TIDMATY
RNS Number : 7840P
Athelney Trust PLC
13 February 2023
Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
NON- STATUTORY ACCOUNTS
Athelney Trust plc, the investor in small companies and junior markets
announces its final results for the 12 months ended 31 December 2022.
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 December 2022 and 2021 but
is derived from those accounts. Statutory accounts for 2021 have been
delivered to the Registrar of Companies, and those for 2022 will be
delivered 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 Auditor's report can be found in the Company's full Annual Report
and Accounts on the Company website: www.athelneytrust.co.uk
Chairman's Statement and Business Review
Dear Shareholder
I am pleased to present the Annual Financial Report for the year
to 31 December 2022.
The Strategic Report section of this Annual Report has been
prepared to help all Shareholders understand the drivers of
performance in the past year, how the Company operates and to
assess its performance.
Overview
The key performance points are as follows:
-- At 31 December 2022, audited Net Asset Value (NAV) was 219.4
p per share (2021: 310.3p), a decrease of 29.3% over the year as
compared to a 19.7% decrease in the FTSE 250 and a 1% increase in
the FTSE 100.
-- The share price fell to 210.0p from 225.0p at 31 December
2021 a negative return of 6.7%.
-- The discount to NAV at the end of year had reduced to 4.3%
compared to 27.4% at 31 December 2021.
-- The Trust's investment performance over 12 months as measured
by NAV total return, which is the change in NAV plus the dividend
paid, was minus 26.2% (2021:25.2%).
-- The Trust's performance over 12 months as measured by share
price total return, which is the change in share price plus the
dividend paid, was minus 3.3% (2021:8.2%)
-- The 12-month revenue return per ordinary share was 6.9p
(2021:7.0p), a decrease of 1%.
-- The interim dividend of 2.1p per share was paid on 23 September 2022.
-- Your Board recommends a final dividend of 7.5p per share
increasing a total dividend payable for the year to 9.6p (2021:
9.5p) an increase of 1%. UK inflation for the 12 months to December
2022 slowed for the second month in a row to 10.5%
-- This is the 20th successive year of progressive dividend and
importantly returns the Trust to a high position in the dividend
yield league table for Investment Companies. It also promotes us to
the "Dividend Heroes" list maintained by the AIC, a list of
investment companies that have consistently increased their
dividends for 20 or more years in a row.
Board and Governance
The Board places significant importance on corporate governance
and compliance with the AIC and UK Corporate Governance Codes. Full
details are set out in the Corporate Governance section on pages 15
to 18.
We note the Financial Conduct Authority's Policy Statement
PS22/3 of April 2022 to comply or explain in relation to board
diversity and inclusion, with changes to the Listing Rules
commencing in 2023 for the Trust. As a small, low-cost fund, your
board continues to assess how best to structure and plan for a
board that meets shareholder and regulatory needs, has continuity,
stability and reflects prudent management of costs.
An Independent Board
The Directors in place at the time of signing these accounts
are:
-- Myself, Frank Ashton - Non-Executive Chairman
-- Simon Moore - Non-Executive Director, Chair of Audit
Committee, Chair of Remuneration Committee
-- Dr Manny Pohl - Managing Director, Fund Manager
We currently have three directors who together make up an
independent Board under the AIC Code of Governance 2021.
Capital Gains
During the year the Company realised capital profits before
expenses arising on the sale of investments in the sum of
GBP382,704 (2021: GBP354,843).
Portfolio Review
Additional Holdings Purchased
Additional holdings of AEW UK, Cerillion. Close Brothers,
Fevertree, Gamma, Impax Asset Management, Paypoint, Target
Healthcare, Treatt and Tritax Bigbox were acquired.
Holdings Sold or Trimmed
Abcam, Clinigen, Forterra, Homeserve, Jarvis Securities, JD
Sports, Lok'n Store and LXI Reit.
Dividend
During the year the Company paid an interim dividend of 2.1p on
23 September 2022.
The Board recommends a final dividend of 7.5p per ordinary share
making an increased dividend this year of 9.6p (2021: 9.5p).
Subject to shareholder approval at the Annual General Meeting on 16
March 2023, the dividend will be paid on 6 April 2023 to
shareholders on the register on 10 March 2023.
Period Review
The year of 2022 was, for many, including the investment
community, one to forget. Shocks and surprises marked the year,
which ended very poorly with market uncertainty and loss of
confidence created by the short-lived Liz Truss premiership, made
worse by the impact of double-digit UK inflation.
In an interview with the BBC in 2014, Charlie Munger, renowned
partner in Berkshire Hathaway said:
"Without a system of wise restraints, gross immorality and
extreme craziness will happen in markets. They need to be
dampened."
He was talking about some of the causes of the Crash and Global
Financial Crisis in 2007-08, but this is also true elsewhere. For
example, a leader operating in a powerful political and
governmental system with few restraints represents a risk:
Ukraine's citizens, and to a lesser extent a large proportion of
Europe's population are paying the price for Putin's 'grossly
immoral' and unfettered ambition to control that country.
A new prime minister, seemingly believing the only opinions on
the September mini-budget that mattered were her own and her
Chancellor's, was swiftly brought low; however the damage had been
done. The mini-budget resulted in 'craziness' for a few weeks with
a dramatic loss of financial market confidence in the UK resulting
in the Bank of England being forced to stabilise the bond market by
temporarily buying long-dated UK gilts. Enter Hunt and Sunak as new
Chancellor and PM to try to return the narrative to calmer and more
acceptable content and tones. Now homeowners who have to start a
new mortgage term face a dramatic rise in cost and many wish Truss
and Kwarteng had used any 'system of wise restraints' before
launching that particular mini-budget against the backdrop of a
rising cost of living crisis.
All these events had a heavy impact on the UK Smaller Companies
segment, the focus of this fund; smaller companies can be perceived
to be a riskier investment because they tend to be less liquid and
less resilient stocks in a challenging environment, compared even
to FTSE-250 companies. Market sentiment has recently been strongly
negative to this segment. By comparison the blue-chip FTSE-100
fared better than most markets because these large 'old-fashioned',
liquid, oil/gas- and commodity-based stocks were buoyed by the run
from UK bonds, representing a safer haven than, for example the
NASDAQ where Big Tech companies had a torrid 2022.
I am disappointed to report the poor absolute performance of the
Company in the past 12 months and comparatively against FTSE-250
and especially FTSE-100 indices. We are very aware of the trust
placed in us by investors in the company and take our
responsibilities very seriously. However a better comparison is
against UK Smaller Company investment fund peers, and our Share
Price Total Return at minus 2.57% has performed much better over
the past 12 months in comparative terms than the segment weighted
average of minus 23.52%. Our NAV one year Total Return at minus
23.64% confirms we performed similarly to investment funds in the
same sector, whose weighted average return was minus 22.32%.
Further information on portfolio activity and the drivers behind
the performance is contained in the Managing Director, Dr Manny
Pohl's Report below. Manny is highly experienced at managing funds
in challenging market environments, and your board is very pleased
with the comparative outcome for the year, given the conditions
faced. Our invested companies perhaps have a vote of confidence
taken as a portfolio, given that the share price was trading at
year end at a slightly lower discount of 7.85% (2021: 29.45%)
compared to the AIC UK Smaller Companies weighted average of
9.88%.
This time last year I commented on Apple being the first stock
to reach $1 trillion market cap on 4 January 2022, after tripling
the share price over the prior two years. Well, in 2022 Apple lost
a third of that value, beset with problems on iPhone 14 shipments
due to COVID restrictions at its main Chinese factory, resulting in
declining earnings and disappointing fourth quarter guidance.
I mention such a large US stock in a UK small company fund
report because this poor year, especially for Apple shareholders is
a timely reminder; we should be investing in good stocks and
management teams for the long term and resist perhaps emotionally
driven reactions to news or poor performance over a relatively
short period of time. Wars, times of political incompetence, market
corrections and yes, apparent evidence of fraud at 'star companies'
(such as Sam Bankman-Fried's crypto empire FTX) should really not
surprise us much. Human nature and systemic failings are hardly
news. Temperament is much more important than intelligence for
investors (as Messrs Buffett and Munger have told us for a long
time).
While others run for safety, cool-headed investors look widely
and carefully, to find good companies with shares at low price-book
ratios to invest in. In his report below, Manny explains the care
he takes to deliver income for investors, as well as investing for
growth (which may take a little longer to realise at the moment,
but it will come). The coming year will be a time for patience and
resisting temptation to run with the herd.
At the start of the year we had hoped dividend income would
return to pre-pandemic levels, but that evaporated in the second
half as inflation and interest rates rocketed, reducing many UK
companies' margins and cash generated. In the end net income was
very similar to last year at GBP148,531 (2021: GBP151,260). I
remind you that as a closed-ended fund we can save up to 15% of our
portfolio income each year, which, unlike open-ended funds,
provides a reserve to use in those leaner income years.
I am very pleased to tell you that the Board recommends a final
dividend payment of 7.5p (total 9.6p) an increase of 0.01p
(2021:9.5p). Subject to shareholder approval at the AGM and based
on our share price at 31 December 2022 of 210p this represents a
dividend yield of 4.6% (2021: 3.1%) and is better than the AIC UK
Smaller Companies' weighted average yield of 2.80%.
With this further year of progressive dividend payment (if
approved at the AGM), I am delighted to say your company is
promoted to the full list of AIC Dividend Heroes, as this would
represent the 20th consecutive year of dividend growth. In 2022
this list comprised just seventeen investment companies (out of 324
AIC members), and therefore would be a marvellous company milestone
since its inception as a founder member of AIM in 1995, especially
because this has been delivered from the UK Smaller Companies
segment only.
This is testament and credit to the current MD, Fund Manager and
long-standing major shareholder and board member, Manny Pohl, and
his predecessor, Robin Boyle who managed the fund over many years,
and also to other board members of Athelney Trust, including Simon
Moore, well-known in the industry, supported by John Girdlestone,
the immediate past CoSec, and ably succeeded by Debbie Warburton.
Thank you all.
In terms of controllable costs, I confirm the board has approved
a continued freeze on the non-executive director's fee (GBP10,500)
with no premium for Chair positions, which is comparable to NED
fees of other, similarly-sized funds. Our Ongoing Charges Figure
(OCF, calculated using the AIC recommended Ongoing Charges
methodology, April 2022, taking annualised costs that would
reasonably be incurred if there was no trading of the investee
shares, divided by the average of published monthly NAV) is 2.89%
(2021: 2.38%). The increase is due to the decrease in NAV through
2022, and also GBP1,000 net increase in Ongoing Charges in 2022
compared to 2021. While we remain a small fund, reducing the OCF
will continue to be a challenge, however every effort is made to do
this, while applying appropriate time and resource to growth and
good governance.
Outlook
Perhaps the main questions that will affect our performance for
2023 include:
-- How long will UK inflation remain above that of other
countries in Europe, and what interest rate medicine will be needed
to bring it back in line (after reaching a peak of 11.7% in
October, are we over the worst). This will affect our income
-- What costs, including those to settle public sector pay
negotiations, will be incurred by the government, over what period
of time, and is a Labour government now inevitable in 2025; this
affects general sentiment on the economy, tax burden and confidence
for investors, including inward investors
-- What global assistance or headwind for UK economic recovery
might be expected? Potential global recession, no sight of an end
to war in Ukraine, the rate and strength of recovery for China's
economy, and the apparent weakening of America's economy, all play
into the geo-political environment.
We cannot know the answers to these questions; however, I do
know that Manny Pohl's meticulous and repeatable investment and
divestment approach, explained in his report, will on average, find
and capture value and that being invested for the long term, in
those shares, is right also.
I would encourage you to actively take interest in your company;
perhaps come to meet the board at the AGM in central London on
Thursday 16 March 2023 at 12 noon.
Frank Ashton
Non-Executive Chairman
13 February 2023
Fund Manager's Review
Reflecting on 2022
By any measure, the past twelve months have delivered a very
poor result, especially when compared to the remarkable return
achieved in 2021 when the FTSE 100 was up by 14.6% and our
portfolio up by 29.1%. Over the past twelve months we have
under-performed the various benchmarks as shown in Table 1 and as
one would expect, while our long-term results are still in line
with the FTSE 250, this recent underperformance has prompted us to
consider if we missed anything in our deliberations or if there was
anything we should have done differently in our analysis?
Our Investment Philosophy is based on the belief the economics
of a business drives long-term investment returns and evidenced
through our investment process which delivers a portfolio of
high-quality businesses in the growth stage of their life cycle.
However, investment returns over any period comprise two
components, namely the dividends received and the movement in the
value of the investment portfolio. While the dividends we are
likely to receive from the companies in our portfolio are fairly
easy to predict and, for the most part increase over time, the same
cannot be said for the market price for the shares. These are
affected by investors responding to daily news feeds and commentary
on local and global economic data as well as macro events.
In the first quarter of the financial year, Russia invaded the
Ukraine. The West was quick to issue sanctions and multinationals
started closing down any operations linked to Russia. However, the
war amplified energy and food price issues straining an already
COVID constrained supply-side environment and pushing inflation
higher. Central banks began raising rates and forecasting future
increases which drove down equity-based valuations across the
board.
By the second quarter the high inflation readings were a major
detractor for all sectors of the financial markets other than
mining and energy stocks. The fiscal stimulus plan and series of
tax cuts and regulatory reforms announced in the mini-budget in
September sent financial markets into a tailspin with the pound
reaching a record low and short-term interest rates and bond yields
moving sharply up. The yields on five-year government bonds reached
levels similar to those of more heavily-indebted European economies
such as Italy and Greece. Commensurate with this rise in short and
medium-term interest rates, the quoted prices for income generating
assets and REITs in particular, declined materially. The net effect
of this and the tightening in monetary policy has been to put
pressure on the high PE valuations of the market and growth stocks
in particular, as future earnings are discounted at a higher
rate.
In spite of this, recent operating results from companies in our
portfolio indicate that they have been able to partially withstand
these inflationary pressures by implementing appropriate short-term
strategies and adapting their business models accordingly. While
the majority of the stocks in the portfolio have declined in value
over the past year, dividends for the most part were maintained,
with a handful of names producing positive returns for the year.
These were Begbies Traynor (LSE: BEG), 4Imprint (LSE: FOUR) and NWF
(LSE: NWF).
While we do sell some of our investments from time to time, our
process aims to find high-quality businesses that we own for the
very long-term and as a result our portfolio turnover remains low.
During the past year, while we did reduce our overall exposure to
the Property Trusts, we still maintained a material exposure in
recognition of the need to maintain the dividend paid to
shareholders within a growth style portfolio. However, we are
always looking for new investments and when we do find them, we
ensure that they have sustainable and resilient characteristics. In
the past twelve months we added two new names to the portfolio:
Cerillion: (LSE: CER)
Cerillion joined AIM in 2016 and has since established a very
strong record of revenue and profit growth principally from
software licences and related support and maintenance sales. It
operates in approximately forty-five countries globally, providing
customers with mission-critical software for billing, charging and
customer relationship management mainly for telecommunications
providers, but also for other sectors, including energy and
utilities.
Whilst the coronavirus pandemic is no longer directly affecting
business operations, the global experience of remote-working -
still in place in many economies - has continued to emphasise the
dependence of the world economy on state-of-the-art telecoms
infrastructure. Over the year, we continued to see high levels of
investment in the sector, and an acceleration of investment in 5G
and fibre rollouts, with spending trickling down from core network
improvements to ancillary system upgrades and replacements,
particularly due to national security concerns. We expect to see
these trends continue with increasing pressure on telcos to find
efficiencies in their digital real-estate. This is likely to
encourage further market take-up of product-based SaaS solutions,
which Cerillion offers, rather than the more bespoke solutions
available from more traditional vendors which require highly
complex implementations over several years and have a higher total
cost of ownership.
Impax Asset Management (LSE: IPX)
Impax Asset Management is a fund manager who invests globally in
companies focused on the transition to a more sustainable global
economy and is well placed to benefit from the profound changes to
the economic landscape particularly in the areas of climate change,
pollution and essential investments in human capital,
infrastructure and resource efficiency. Impax has proven expertise
in finding and investing in companies and assets that are well
positioned in this space and should benefit from these mega-trends
which will drive growth for them and create risks for those unable
or unwilling to adapt to the changes. They offer a well-rounded
suite of investment solutions spanning multiple asset classes and
should be able to deliver superior shareholder returns over the
medium to long-term.
Looking ahead
While I was preparing to write this year's commentary, the
following quote came to my attention:
"Time is the friend of the wonderful business, the enemy of the
mediocre." Warren Buffett - Letter to Shareholders 1989
While supply chains are stretched and input products in short
supply, it can be challenging to recognise the potential in
companies, particularly those that are in the growth stage of their
life cycle. It can also be difficult to evaluate the 'narratives'
that some companies are telling about themselves. To invest in a
company in the growth stage of their life cycle it is important to
balance the company's narrative alongside its numbers and it is
vital not to get caught up in the hype and noise of the internet
and daily market movements.
A sound investment philosophy sets out a number of 'rules' or
'procedures' to fall back on when the market noise gets too loud.
Companies that have a sustainable competitive advantage will always
be well-placed to withstand short-term headwinds, regardless of
market conditions, maintain market share and ultimately find new
ways to grow. Their ability to be flexible, to move quickly, to
take advantage of opportunities as they arise, and to capitalise on
market trends and demand, will continue to support the ongoing
success of such businesses, and provide significant long-term
opportunities for their investors. The pandemic, devastating
weather events, and the invasion of Ukraine are examples of
macro-environmental shocks impacting companies worldwide and it is
also of paramount importance to take a holistic approach when
analysing the companies and their sustainability by considering the
business competitiveness and ability to dynamically adapt and react
to black swan events - to be resilient.
Over the past few years our industry, and society more broadly,
has continued to evolve with higher expectations being made of
businesses and their social licence to operate. Being a good
corporate citizen is only part of it. Being a good corporate
citizen that is compassionate, committed to its people, planet, and
the community is mandatory. Any successful business owner makes
decisions for the betterment of their long-term business. Having
sustainable practices and a long-term mindset is vital for any
operator in this modern, rapidly changing world. Sustainability has
long been part of our investment process and since we see ourselves
as business owners (and not share traders), we invest along similar
principles where sustainability and competitiveness are central to
any investment analysis.
A genuine long-term approach
Investment management is more than merely generating alpha in
excess of a benchmark. While that is a core part of our mandate,
other very important qualitative issues are central to what we do.
For example, we recognise that capital allocation is a vehicle
through which to drive change. We have the opportunity to demand
specific standards of corporate governance, decide whether specific
social and ethical issues are acceptable and, if they are not, we
vote with our feet.
For us, the integrity and credibility of any management team is
a founding principle to our investment process. We need to trust
that management has the best interests for all stakeholders at
heart, and we have faith that they will make sound strategic
decisions and have substantial experience and capabilities in their
chosen field. As custodians of our capital, we must ensure that we
are doing whatever we can to preserve capital and grow it over
time. We allocate capital to investments which we believe are
sustainable in the long-term, and finding trustworthy, values-based
management that aligns with our core values and beliefs will ensure
above-average economic portfolio returns. Sustainability of
investment performance or the improvement of the wellbeing of
broader society hinges upon ethical, transparent, and honest
leadership and in cases where we feel we can add something to the
conversation, we engage with the company.
While current macro events have put pressure on our portfolio in
the short-term, our investment philosophy is based on the belief
the long-term economics of a business drives long-term investment
returns. Our companies have strong business models with capable and
experienced management teams and the long- term financial metrics
of our portfolio companies, including organic sales growth,
earnings and dividend growth, should provide the impetus for an
improvement in valuations or at least be supportive of the current
valuations in the future.
The Athelney dividend is supported in the short-term by the
reserves we have built up in the good times as well as by the
ongoing distributions from the high yielding property trusts. For
many of the companies in the portfolio our estimates and forecasts
for earnings and dividends remain promising and over time we expect
that dividends from the high growth quality companies in the
portfolio will increase sufficiently so that the property trusts
can be replaced by other high growth quality companies without
jeopardising our AIC dividend hero status.
Update
The unaudited NAV on 31 January 2023 was 229.4p per share - up
by 4.6% from 31 December 2022. The share price on the same day was
205p (trading at a discount of 10.7%). Further updates can be found
at www.athelneytrust.co.uk
Dr Manny Pohl AM
Fund Manager
13 February 2023
Section 172(1) Statement
The Directors of the Company are required to promote the success
of the Company for the benefit of the Members and Shareholders as a
whole. Section 172(1) of the Companies Act (2006) expands this duty
and requires the Directors to consider a broader range of
interested parties when considering the promotion of the Company.
This wider group of stakeholders will include employees, if any,
suppliers, customers and others, and the Board will look to
understand and take into account the needs of each stakeholder,
although recognising that different stakeholders may have
conflicting priorities and not all decisions made will be to the
benefit of all stakeholder groups.
When making decisions the Board should consider the
following:
-- the likely consequences of any decisions in the long-term;
-- the interests of the Company's employees (if applicable);
-- the impact of the Company's operations on the environment and the community;
-- the need to foster the Company's business relationships with
suppliers, customers and others;
-- the need to act fairly for all members of the Company, and
-- the desirability of the Company maintaining a reputation for
high standards of business conduct.
In line with similar small Investment Trusts and Investment
Companies, Athelney Trust plc does not have any customers and
relies on a number of third-party providers of services such as
Company Administrator, the Custodian and the Registrar to maintain
its operations. The Company takes into account the regulations of
the market in which it operates and has regard to the environment
and the wider community in which it operates.
At every Board meeting the Directors review the performance of
the Company towards meeting the Company's Investment Objective
through its strategy. Manny Pohl is the fund manager, reports to
other Board members and answers any questions raised. Compliance
with existing regulatory and legal requirements is reviewed,
together with any new regulations that are due to be introduced or
are being proposed that may affect the Company.
The Board recognises the importance of, and is committed to,
understanding the views of Shareholders and maintaining
communication with its Shareholders in the most appropriate
manner.
This is undertaken through:
Annual General Meeting
The Company, in normal circumstances encourages all Shareholders
to attend and participate at its Annual General Meeting ("AGM").
Whilst the formal business of the meeting is the primary purpose of
the meeting, members of the Board are available to answer questions
directly from Shareholders, to provide an update to the meeting and
to offer Shareholders an insight into the business.
The Board plan to hold the 2023 AGM on 16 March 2023 at 12.00
noon. Further details regarding the 2023 AGM are contained in the
Notice of the Annual General Meeting published in a separate
notification.
Published Reports
The Company produces Annual and Half Yearly Reports and monthly
fact sheets are all available from the Company's website and paper
copies are available on request from the registered office. The
publication of these reports is considered to be the primary method
of communication to Shareholders and other readers of the reports
and provides detailed information on the portfolio, performance
over the period and an assessment of the outlook for the
Company.
The Annual Report also contains details regarding the Company's
corporate governance and the Board seek to ensure that the Report
is readable and is mindful that it should be fair, balanced and
understandable.
Shareholder enquiries
Shareholders can contact the Company or any of its Directors
through the Company Secretary or through their company email
address. Alternatively, letters can be sent to the registered
office address. Although the Directors are not available full time,
with the assistance of the Company Secretary they seek to maintain
open communication to all Shareholders.
Suppliers
The Company Secretary Deborah Warburton and Administrator GW
& Co. Limited are often the main contact point for advisors and
stakeholders in the Company. Regular communication is maintained
between the Company Secretary and the Directors advising them of
all matters concerning the Company. The Company also relies on the
provision of services from outside parties to operate and gives
consideration to the needs and objectives of those providers and
recognises that their success will often assist the Company in
achieving its objectives.
Regulators
The Company operates in an environment that is governed by legal
and regulatory requirements. The Board recognises that these
requirements are there to protect stakeholders, including the
government.
Environment and Community
As the Company does not have any direct employees nor any
physical office environment of its own it has little direct impact
on the community or the environment. The Company seeks to reduce
its impact on the environment in encouraging Shareholders to
receive Reports electronically rather than through printed hard
copies. When paper copies are requested FSC paper is used. The
Board also engage through electronic means where possible rather
than hold excessive face to face meetings.
Other Statutory Information
As explained within the Report of the Directors on pages 20 to
21, the Company carries on business as an investment trust.
Investment trusts are collective closed-ended public limited
companies.
Board
The Board of Directors is responsible for the overall
stewardship of the Company, including investment and dividend
policies, corporate and gearing strategy, corporate governance
procedures and risk management. Biographical details of the three
male Directors, can be found on pages 2 and 3.
One of the Directors is the Company's only employee (2021: one
employee).
Investment Objective
The investment objective of the Trust is to provide shareholders
with prospects of long-term capital growth with the risks inherent
in small cap investment minimised through a spread of holdings in
quality small cap companies that operate in various industries and
sectors. The Fund Manager also considers that it is important to
maintain a progressive dividend record.
Investment Policy
The assets of the Trust are allocated predominantly to companies
with either a full listing on the London Stock Exchange or a
trading facility on AIM or AQSE. The assets of the Trust have been
allocated in two main ways: first, to the shares of those companies
which have grown steadily over the years in terms of revenue and
profits but, despite this progress are undervalued by the market
when compared to future earnings and dividends; second, those
companies whose shares are undervalued by the market when compared
with the value of land, buildings, other assets or cash on their
balance sheet.
Investment Strategy
The investment strategy employed by the Fund Manager in meeting
the investment objective focuses on active stock selection. The
selection of individual holdings is based on analysis of, amongst
other things, market positioning, competitive advantage, future
growth, financial strength and cash flows. The weighting of
individual investments reflects the Fund Manager's conviction in
the expected future returns from those holdings.
Investment of Assets
At each Board meeting, the Board considers compliance with the
Company's investment policy and other investment restrictions
during the reporting period. An analysis of the portfolio on 31
December 2022 can be found on pages 11 and 12 of this report.
Responsible Ownership
The Fund Manager takes a particular interest in corporate
governance and social responsibility investment policy. As stated
within the Corporate Governance Statement on pages 16 to 19, the
Fund Manager's current policy is available on the Trust's website
www.athelneytrust.co.uk. The Board supports the Fund Manager on his
voting policy and his stance towards environmental, social and
governance issues.
Review of Performance and Outlook
Reviews of the Company's returns during the financial year, the
position of the Company at the year end, and the outlook for the
coming year are contained in the Chairman's Statement on pages 4 to
6 and the Fund Manager's review on pages 7 to 10 which form part of
the Strategic Report.
Principal Risks and Uncertainties and Risk Management
As stated within the Corporate Governance Statement on pages 16
to 19, the Board applies the principles detailed in the internal
control guidance issued by the Financial Reporting Council, and has
established a continuing process designed to meet the particular
needs of the Company in managing the risks and uncertainties to
which it is exposed.
The principal risks and uncertainties faced by the Company are
described below and in note 12 which provides detailed explanations
of the risks associated with the Company's financial
instruments.
-- Market - the Company's fixed assets consist almost entirely
of listed securities and it is therefore exposed to movements in
the prices of individual securities and the market generally.
-- Investment and strategic - incorrect investment strategy,
asset allocation, stock selection and the use of gearing could all
lead to poor returns for shareholders.
-- Regulatory - Relevant legislation and regulations which apply
to the Company include the Companies Act 2006, the Corporation Tax
Act 2010 ("CTA") and the Listing Rules of the Financial Conduct
Authority ("FCA"). The Company has noted the recommendations of the
UK Corporate Governance Code and its statement of compliance
appears on pages 16 to 19. A breach of the CTA could result in the
Company losing its status as an investment company and becoming
subject to capital gains tax, whilst a breach of the Listing Rules
might result in censure by the FCA. At each Board meeting the
status of the Company is considered and discussed, so as to ensure
that all regulations are being adhered to by the Company and its
service providers.
-- Operational - failure of the accounting systems or disruption
to its business, or that of other third-party service providers,
could lead to an inability to provide accurate reporting and
monitoring, leading to a loss of shareholders' confidence.
-- Financial - inadequate controls by the Fund Manager or other
third-party service providers could lead to misappropriation of
assets. Inappropriate accounting policies or failure to comply with
accounting standards could lead to misreporting or breaches of
regulations.
-- Liquidity - the Company may have difficulty in meeting obligations associated with financial liabilities.
-- Trading - ATY is a small trust and its shares can be illiquid, which means that investors may have difficulty in dealing in larger amounts of shares.
The Company has complied with the MiFID ll and KID legislation
and the deadlines to ensure that shares in the Company were still
able to be traded. A copy of the Company's KID can be found on the
website http://www.athelneytrust.co.uk
The Board is not aware of any breaches of laws or regulations
during the period under review and up to the date of this
report.
The Board seeks to mitigate and manage these risks through
continual review, policy setting and enforcement of contractual
obligations. It also regularly monitors the investment environment
and the management of the Company's investment portfolio.
Investment risk is spread through holding a wide range of
securities in different industrial sectors.
Statement Regarding Annual Report and Financial Statements
Following a detailed review of the Annual Report and Financial
Statements by the Audit Committee, the Directors consider that
taken as a whole it is fair, balanced and understandable and
provides the information necessary for shareholders to assess the
Company's performance, business model and strategy.
Environment Emissions
The Company does not have any physical assets, property, or
operations of its own and as such does not generate any greenhouse
gas or otheremissions.
Social, Community and Human Rights issues
The Company has one employee and, as far as the Board is aware,
no issues exist in respect of social, community or human rights
issues.
Alternative Investment Fund Manager's Directive ("AIFMD")
The Company is registered as its own AIFM with the FCA under the
AIFMD and confirms that all required returns have been completed
and filed.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
13 February 2023
Income Statement
For the Year Ended 31 December 2022
2022 2021
Note Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
(Losses)/gains
on investments
held at fair
value 8 - (1,787,296) (1,787,296) - 1,359,219 1,359,219
Income from
investments 2 183,273 - 183,273 186,393 - 186,393
Investment
management
expenses 3 (4,008) (36,327) (40,335) (4,488) (40,692) (45,180)
Other expenses 3 (30,734) (78,720) (109,454) (30,645) (72,964) (103,609)
--------- ------------ ------------ --------- ---------- ----------
Net return
on ordinary
activities
before taxation 148,531 (1,902,343) (1,753,812) 151,260 1,245,563 1,396,823
Taxation 5 - - - - - -
--------- ------------ ------------ --------- ---------- ----------
Net return
(negative
return) on
ordinary activities
after taxation 6 148,531 (1,902,343) (1,753,812) 151,260 1,245,563 1,396,823
========= ============ ============ ========= ========== ==========
Net return
per ordinary
share 6 6.9p (88.2p) (81.3p) 7.0p 57.7p 64.7p
Dividend
per ordinary
share paid
during the
year 7 9.6p 9.7p
All revenue and capital items in the above statement derive from
continuing operations.
No operations were acquired or discontinued during the year.
The total column of this statement is the Statement of Total
Comprehensive Income of the Company prepared in accordance with
applicable Financial Reporting Standards ("FRS"). The supplementary
revenue return and capital return columns are prepared in
accordance with the Statement of Recommended Practice ("AIC SORP")
issued in April 2021 by the Association of Investment
Companies.
The notes on pages 34 to 38 form part of these financial
statements.
Statement of Changes in Equity
For the Year Ended 31 December 2022
Called-up Capital Capital Total
Share Share reserve reserve Revenue Shareholders'
Capital Premium realised unrealised reserve Funds
GBP GBP GBP GBP GBP GBP
Balance brought
forward at 1 January
2021 539,470 881,087 2,030,550 1,727,408 329,506 5,508,021
Net profits on
realisation
of investments - - 354,843 - - 354,843
Increase in unrealised
Appreciation - - - 1,004,376 - 1,004,376
Expenses allocated
to
Capital - - (113,656) - - (113,656)
Profit for the
year - - - - 151,260 151,260
Dividend paid
in year - - - - (209,314) (209,314)
Shareholders'
Funds at 31 December
2021 539,470 881,087 2,271,737 2,731,784 271,452 6,695,530
========== ======== ========== =========== ========== ==============
Balance brought
forward at 1 January
2022 539,470 881,087 2,271,737 2,731,784 271,452 6,695,530
Net profits on
realisation
of investments - - 382,704 - - 382,704
Decrease in unrealised
Appreciation - - - (2,170,000) - (2,170,000)
Expenses allocated
to
Capital - - (115,047) - - (115,047)
Profit for the
year - - - - 148,531 148,531
Dividend paid
in year - - - - (207,156) (207,156)
Shareholders'
Funds at 31 December
2022 539,470 881,087 2,539,394 561,784 212,827 4,734,562
======== ======== ========== ============ ========== ============
The notes on pages 34 to 38 form part of these financial
statements.
Statement of Financial Position As at 31 December 2022
Company Number: 02933559
Note 2022 2021
GBP GBP
Fixed assets
Investments held at fair
value through profit and
loss 8 4,180,985 6,436,820
---------- -----------
Current assets
Debtors 9 543,301 245,163
Cash at bank and in hand 27,361 30,676
570,662 275,839
Creditors: amounts falling
due within one year 10 (17,085) (17,129)
---------- -----------
Net current assets 553,577 258,710
---------- -----------
Total assets less current liabilities 4,734,562 6,695,530
Net assets 4,734,562 6,695,530
========== ===========
Capital and reserves
Called up share capital 11 539,470 539,470
Share premium account 881,087 881,087
Other reserves (non distributable)
Capital reserve - realised 2,539,394 2,271,737
Capital reserve - unrealised 561,784 2,731,784
Revenue reserve (distributable) 212,827 271,452
Shareholders' funds - all
equity 4,734,562 6,695,530
========== ===========
Net Asset Value per share 13 219.4p 310.3p
These financial statements were approved and authorised for
issue by the Board of Directors on 13 February 2023 and signed on
their behalf by
Dr Manny Pohl AM
Managing Director
The notes on pages 34 to 38 form part of these financial
statements.
Statement of Cash Flows
For the Year Ended 31 December 2022
2022 2021
GBP GBP
Cash flows used in operating
activities
Net revenue return 148,531 151,260
Adjustment for:
Expenses charged to capital (115,047) (113,656)
(Decrease) in creditors (44) (248)
(Increase)/decrease in debtors (298,138) (103,027)
Cash used in operations (264,698) (65,671)
------------- -------------------------------------
Cash flows from investing
activities
Purchase of investments (1,003,583) (545,379)
Proceeds from sales of investments 1,472,122 778,439
------------- -------------------------------------
Net cash received from investing
activities 468,539 233,060
------------- -------------------------------------
Equity dividends paid (207,156) (209,314)
Net decrease in cash (3,315) (41,925)
Cash at the beginning of
the year 30,676 72,601
------------- -------------------------------------
Cash at the end of the year 27,361 30,676
============= =====================================
As the company does not have any loans, overdrafts or hire
purchase arrangements, net debt is equal to cash and therefore no
reconciliation of net debt has been disclosed.
The notes on pages 34 to 38 form part of these financial
statements.
Notes to the Financial Statements
For the Year Ended 31 December 2022 .
Accounting Policies
1.1 Statement of Compliance and Basis of Preparation of
Financial Statements
The financial statements are prepared in accordance with
applicable United Kingdom accounting standards, including Financial
Reporting Standard 102 ("FRS 102"), the Companies Act 2006 and with
the AIC Statement of Recommended Practice ("SORP") issued in April
2021, regarding the Financial Statements of Investment Trust
Companies and Venture Capital Trusts. All the Company's activities
are continuing.
The presentation currency of the financial statements is pounds
sterling, being the functional currency of the primary economic
environment in which the company operates. Monetary amounts in
these financial statements are rounded to the nearest pound.
1.2 Income
Income from investments including taxes deducted at source is
recognised when the right to the return is established (normally
the ex-dividend date). UK dividend income is reported net of tax
credits in accordance with FRS 102 "Income Tax". Interest is dealt
with on an accruals basis.
1.3 Investment Management Expenses
All three Directors are involved in investment management, 10%
of their salaries or fees have been charged to revenue and the
other 90% to capital. All other investment management expenses have
been charged to capital. The Board propose continuing this basis
for future years.
1.4 Other Expenses
Expenses (including VAT) and interest payable are dealt with on
an accruals basis and charged through the Revenue and Capital
Accounts in an allocation that the Board consider to be a fair
distribution of the costs incurred.
1.5 Investments
Listed investments comprise those listed on the Official List of
the London Stock Exchange. Unlisted investments are traded on AIM
and Fledgling. Profits or losses on sales of investments are taken
to realised capital reserve. Any unrealised appreciation or
depreciation is taken to unrealised capital reserve.
Investments have been classified as "fair value through profit
and loss" upon initial recognition.
Subsequent to initial recognition, investments are measured at
fair value with changes in fair value recognised in the Income
Statement.
Securities of companies quoted on a recognised stock exchange
are valued by reference to their quoted bid prices at the close of
the year, similarly, AIM-traded investments are valued using the
closing bid price on 31 December.
1.6 Taxation
The tax effect of different items of income and expenses is
allocated between capital and revenue on the same basis as the
particular item to which it relates, using the Company's effective
rate of tax for the year.
1.7 Judgements and estimates
The Directors confirm that no judgements or significant
estimates have been made in the process of applying the Company's
accounting policies.
1.8 Deferred Taxation
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed by the balance sheet date.
Deferred tax liabilities are recognised for all taxable timing
differences but deferred tax assets are only recognised if it is
considered more likely than not that there will be suitable profits
from which the future reversal of the underlying timing differences
can be deducted. Deferred tax assets and liabilities are calculated
at the tax rates expected to be effective at the time the timing
differences are expected to reverse. Deferred tax assets and
liabilities are not discounted.
1.9 Capital Reserves
Capital Reserve - Realised
Gains and losses on realisation of fixed asset investments are
dealt with in this reserve.
Capital Reserve - Unrealised
Increases and decreases in the valuations of fixed asset
investments are dealt with in this reserve. Unrealised capital
reserves cannot be distributed by way of dividends or similar.
1.10 Dividends
In accordance with FRS 102 "Events after the end of the
Reporting Period", dividends are included in the financial
statements in the year in which they go ex-div.
1.11 Share Issue Expenses
The costs associated with issuing shares are written off against
any premium arising on the issue of Share Capital.
1.12 Financial Instruments
Short term debtors and creditors are held at cost.
2. Income
Income from investments
2022 2021
GBP GBP
UK dividend income 108,179 117,516
Foreign dividend income 3,760 11,752
UK Property REITs 71,308 57,078
Bank interest 26 47
Total income 183,273 186,393
UK dividend income
2022 2021
GBP GBP
UK Main Market listed investments 79,926 74,775
UK AIM-traded shares 28,253 42,741
108,179 117,516
3. Return on Ordinary Activities before Taxation
The following amounts (inclusive of VAT) are included within
investment management and other expenses:
2022 2021
GBP GBP
Directors' remuneration:
Services as a director 21,000 21,000
Otherwise in connection
with management 40,077 44,877
Auditor's remuneration:
Audit Services - Statutory
audit 11,984 11,964
Miscellaneous expenses:
Other wages and salaries - -
Management services 32,472 32,472
PR and communications 6,687 4,101
Stock exchange subscription 10,500 10,020
Sundry investment
management and other
expenses 23,276 23.215
Legal fees 3,793 1,140
149,789 148,789
4. Employees and Directors' Remuneration
2022 2021
GBP GBP
Costs in respect of Directors:
Non-executive Directors' fees 21,000 21,000
Wages and salaries 40,077 44,877
61,077 65,877
Average number of employees:
Chairman - -
Investment 1 1
Administration - -
1 1
5. Taxation
(i) On the basis of these financial statements no provision has
been made for corporation tax (2021: Nil).
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is lower than (2021: higher than)
the average small company rate of corporation
tax in the UK of 19 per cent. The differences are explained below:
GBP GBP
2022 2021
GBP GBP
Total return on ordinary
activities before
tax (1,753,812) 1,396,823
Total return on ordinary
activities multiplied
by the average small
company rate of corporation
tax 19% (2020: 19%) (333,223) 265,396
Effects of:
UK dividend income
not taxable (20,739) (22,328)
Revaluation of shares
not taxable 412,299 (190,831)
Capital gains not
taxable (72,714) (67,420)
Unrelieved management
expenses 14,377 15,183
Current tax charge - -
for the year 1,396,823 (13,329)
265,396 (2,532)
The Company has unrelieved excess revenue management expenses of
GBP671,156 at 31 December 2022 (2021: GBP595,482) and GBP102,597
(2021: GBP102,597) of capital losses for Corporation Tax purposes
and which are available to be carried forward to future years. It
is unlikely that the Company will generate sufficient taxable
profits in the future to utilise these expenses and therefore no
deferred tax asset has been recognised.
For the year ended 31 December 2021, the Company received
approval from HM Revenue and Customs under Section 1158 of the
Corporation Tax Act 2010, therefore the Company was not liable to
Corporation Tax on any realised investment gains for 2021. The
Directors intend to continue to meet the conditions required to
obtain approval and therefore no deferred tax has been provided on
any capital gains or losses arising on the revaluation or disposal
of investments.
6. Return per Ordinary Share
The calculation of earnings per share has been performed in
accordance with FRS 102.
2022
GBP GBP GBP
Revenue Capital Total
Attributable
return on ordinary
activities after
taxation 148,531 (1,902,343) (1,753,812)
Weighted average
number of shares 2,157,881
Return per ordinary
share 6.9p (88.2p) (81.3p)
2021
GBP GBP GBP
Revenue Capital Total
Attributable
return on ordinary
activities after
taxation 151,260 1,245,563 1,396,823
Weighted average
number of shares 2,157,881
Return per ordinary
share 7.0p 57.7p 64.7p
7. Dividend
2022 2021
GBP GBP
Final dividend in
respect of 2021 of
7.5p (2021: a final
dividend of 7.7p was
paid in respect of
2020) per share 161,841 166,157
Interim dividend in
respect of 2022 of
2.1p (2021: an interim
dividend of 2.0p was
paid in respect of
2021) per share 45,315 43,157
207,156 209,314
Set out below is the total dividend payable in respect of the
financial year, which is the basis on which the requirements of
Section 1158 of the Corporation Tax Act 2010 are considered.
It is recommended that a final dividend of 7.5p (2021: 7.50p)
per ordinary share be paid out of revenue profits amounting to a
total of GBP161,841. An interim dividend of 2.1p per ordinary share
was paid on 23 September 2022 amounting to GBP45,315 making the
total dividend payable in the year GBP207,156.
For the year 2021, a final dividend of 7.5p was paid on 13 April
2022 amounting to a total of GBP161,841. An interim dividend of 2p
per ordinary share was paid on 24 September 2021 amounting to
GBP43,157 making the total dividend paid in the year
GBP209,314.
Summary of dividends paid for the last 10 financial years
Ex-div Dividend Amount Financial
date Type Year
6/04/2023 Proposed 7.5p 2022
08/09/2022 Interim 2.1p 2022
10/3/2022 Final 7.5p 2021
09/9/2021 Interim 2.0p 2021
11/3/2021 Final 7.7p 2020
10/9/2020 Interim 1.7p 2020
19/3/2020 Final 9.3p 2019
20/3/2019 Final 9.1p 2018
01/3/2018 Final 8.9p 2017
09/3/2017 Final 8.6p 2016
17/3/2016 Final 7.9p 2015
19/3/2015 Final 6.7p 2014
19/3/2014 Final 5.5p 2013
20/3/2013 Final 5.0p 2012
2022 2021
GBP GBP
Revenue available
for distribution 148,531 151,260
Interim dividend
paid (45,315) (43,157)
Final dividend
in respect of
financial year
end (161,841) (161,841)
Undistributed
revenue reserves (58,625) (53,738)
8. Investments
Movements in year 2022 2021
GBP GBP
Valuation at beginning
of year 6,436,820 5,310,661
Purchases at cost 1,003,583 545,379
Sales - proceeds (1,472,122) (778,493)
- realised gains
on sales 382,704 354,843
Increase/(decrease)
in unrealised appreciation (2,170,000) 1,004,376
Valuation at end
of year 4,180,985 6,436,820
Book cost at end
of year 3,619,201 3,705,034
Unrealised appreciation
at the end of the
year 561,784 2,731,786
4,180,985 6,436,820
UK Main Market
listed investments 3,070,365 5,014,560
UK AIM-traded shares 1,110,620 1,422,260
4,180,985 6,436,820
Gains on investments
2022 2021
GBP GBP
Realised gains on sales 382,704 354,843
Increase/(decrease)
in unrealised appreciation (2,170,000) 1,004,376
(1,787,296) 1,359,219
The purchase costs and sales proceeds above include transaction
costs of GBP3,515 (2020: GBP7,910) and GBP3,302 (2020: GBP5,056)
respectively.
9. Debtors
2022 2021
GBP GBP
Investment transaction debtors 513,597 236,912
Other debtors 29,704 8,251
543,301 245,163
10. Creditors: amounts falling due within one year
2022 2021
GBP GBP
Social security and
other taxes 700 719
Other creditors 2,850 2,850
Accruals and deferred
income 13,535 13,560
17,085 17,129
11. Called Up Share Capital
2022 2021
GBP GBP
Authorised
10,000,000 Ordinary
Shares of 25p 2,500,00000 2,500,000
Allotted, called
up and fully paid
2,157,881 Ordinary
Shares of 25p 539,470 539,470
12. Financial Instruments
The Company's financial instruments comprise equity investments,
cash balances and debtors and creditors that arise directly from
its operations, for example, in respect of sales and purchases
awaiting settlement.
The major risks associated with the Company are market, credit
and liquidity risk. The Company has established a framework for
managing these risks. The Directors have guidelines for the
management of investments and financial instruments.
Market Risk
Market price risk arises mainly from uncertainty about future
prices of financial investments used in the Company's business. It
represents the potential loss the Company might suffer through
holding market positions by way of price movements other than
movements in exchange rates and interest rates.
The Company's investment portfolio is exposed to market price
fluctuations which are monitored by the Fund Manager who gives
timely reports of relevant information to the Directors.
Adherence to the investment objectives and the internal controls
on investments set by the Company mitigates the risk of excessive
exposure to any one particular type of security or issuer.
The Company's exposure to other changes in market prices at 31
December on its investments is as follows:
A 20% decrease in the market value of investments at 31 December
2022 would have decreased net assets attributable shareholders by
39 pence per share (2021: 60 pence per share). An increase of the
same percentage would have an equal but opposite effect on net
assets attributable to shareholders.
Market risk also arises from changes in interest rates and
exchange risk. All of the Company's assets are in sterling and
accordingly the Company has limited currency exposure. The majority
of the Company's financial assets are non-interest bearing, as a
result, the Company's financial assets are not subject to
significant risk due to fluctuations in the prevailing levels of
market interest rates.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the balance sheet date. Bankruptcy
or insolvency of the custodian may cause the Company's rights with
respect to securities held with the custodian to be delayed.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty
in meeting obligations associated with financial liabilities. The
Company is able to reposition its investment portfolio when
required so as to accommodate liquidity needs. However, it may be
difficult to realise its investment portfolio in adverse market
conditions.
Maturity Analysis of Financial Liabilities
The Company's financial liabilities consist of creditors as
disclosed in note 10. All items are due within one year.
Capital management policies and procedures
The Company's capital management objectives are:
-- to ensure the Company's ability to continue as a going
concern;
-- to provide an adequate return to shareholders;
-- to support the Company's stability and growth;
-- to provide capital for the purpose of further
investments.
The Company actively and regularly reviews and manages its
capital structure to ensure an optimal capital structure, taking
into consideration the future capital requirements of the Company
and capital efficiency, projected operating cash flows and
projected strategic investment opportunities. The management
regards capital as total equity and reserves, for capital
management purposes.
Fair values of financial assets and financial liabilities
Fixed asset investments (see note 8) are valued at market bid
price where available which equates to their fair values. The fair
values of all other assets and liabilities are represented by their
carrying values in the balance sheet.
2022 2021
GBP GBP
Fair value through
profit or loss investments 4,180,985 6,436,820
Financial instruments by category
The financial instruments of the Company fall into the following
categories
31 December 2022
At Amortised Assets Total
Cost at fair
value
through
profit
or loss
Assets as GBP GBP GBP
per balance
sheet
Investments - 4,180,985 4,180,985
Debtors 543,301 - 543,301
Cash at bank 27,361 - 27,361
Total 570,662 4,180,985 4,751,647
Liabilities
as per the
balance sheet
Creditors 17,085 - 17,085
Total 17,085 - 17,085
31 December 2021
At Amortised Assets Total
Cost at fair
value
through
profit
or loss
Assets as GBP GBP GBP
per balance
sheet
Investments - 6,436,820 6,436,820
Debtors 245,163 - 245,163
Cash at bank 30,676 - 30,676
Total 275,839 6,436,820 6,712,659
Liabilities
as per the
balance sheet
Creditors 17,129 - 17,129
Total 17,129 - 17,129
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair
value hierarchy of financial instruments.
The fair value hierarchy consists of the following three
classifications:
Classification A - Quoted prices in active markets for identical
assets or liabilities.
Quoted in an active market in this context means quoted prices
are readily and regularly available and those prices represent
actual and regularly occurring market transactions on an arm's
length basis.
Classification B - The price of a recent transaction for an
identical asset, where quoted prices are unavailable.
The price of a recent transaction for an identical asset
provides evidence of fair value as long as there has not been a
significant change in economic circumstances or a significant lapse
of time since the transaction took place. If it can be demonstrated
that the last transaction price is not a good estimate of fair
value (e.g. because it reflects the amount that an entity would
receive or pay in a forced transaction, involuntary liquidation or
distress sale), that price is adjusted.
Classification C - Inputs for the asset or liability that are
based on observable market data and unobservable market data, to
estimate what the transaction price would have been on the
measurement data in an arm's length exchange motivated by normal
business considerations.
The Company only holds classification A investments (2021:
classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of
GBP4,734,562 (2021: GBP6,695,530) divided by 2,157,881 (2021:
2,157,881) ordinary shares in issue at the year end.
2022 2021
GBP GBP
Net asset value per share 219.4p 310.3p
14. Dividends paid to Directors
During the year the following dividends were paid to the
Directors of the Company as a result of their total
shareholding:
Dr Manny Pohl AM GBP8,256(1)
Simon Moore GBP6,480
Frank Ashton GBP 214
Notes:
1. Manny Pohl's relationship with EC Pohl & Co Pty Ltd is
described in Note 1 to the table of Directors' interests on page
25. During the year dividends amounting to GBP8,256 were paid to EC
Pohl & Co Pty Ltd.
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