| Athelney Trust PLC
Legal Entity Identifier: 213800ON67TJC7F4DL05
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| 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 2021.
The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 December 2021 and 2020 but is derived from those accounts. Statutory accounts for 2020 have been delivered to the Registrar of Companies, and those for 2021 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
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Chairman's Statement and Business Review
Dear Shareholder
I am pleased to present the Annual Financial Report for the year to 31 December 2021.
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
Athelney Trust plc (the 'Company' or 'Trust') experienced a year of different conditions to 2020 as the global pandemic transitions little by little to an endemic and economies deal more with the results of disruption rather than just the health crisis itself.
Your company performed extremely well in this context, and the key performance points are as follows:
· At 31 December 2021, audited Net Asset Value (NAV) was 310.3p per share (2020: 255.3p), an increase of 21.5% over the year as compared to a 14.6% increase in the FTSE 250 and a 14.3% increase in the FTSE 100.
· 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 25.2% (2020: -0.22%).
· The 12-month revenue return per ordinary share was 7.0p (2020: 5.9p), an increase of 18.6%.
· The interim dividend of 2.0p per share was paid on 24 September 2021.
· Your Board recommends a final dividend of 7.5p per share increasing a total dividend payable for the year to 9.5p (2020: 9.4p) an increase of 1.1%. UK inflation for 2021 was 4.8% (Office for National Statistics)
· This is the 19th 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 keeps us in the Next Generation of Dividend Heroes list maintained by the AIC.
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.
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 £354,843 (2020: £223,957).
Portfolio Review
Additional Holdings Purchased
Additional holdings of Abcam, Clinigen, Fevertree, JD Sports, LXI REIT, Rightmove, Target Healthcare and Treatt were acquired.
Holdings Sold or Trimmed
AEW UK, Belvoir Group, Churchill China, Games Workshop, Liontrust Asset Management, Mountview Estates and National Grid.
Dividend
During the year the Company paid an interim dividend of 2.0p on 24 September 2021.
The Board recommends a final dividend of 7.5p per ordinary share making an increased dividend this year of 9.5p (2020: 9.4p). Subject to shareholder approval at the Annual General Meeting on 5 April 2022, the dividend will be paid on 13 April 2022 to shareholders on the register on 11 March 2022.
Review
Geo-political uncertainties grew during 2021, from more extremely polarised US politics and questions on that country's future role in conflict areas, to the end-game for Taiwan and Ukraine. Who can forget the mob scenes at the US Capitol or the chaos at Kabul airport as the rapid withdrawal from Afghanistan unfolded? It seems in retrospect that 2021 will be seen by history as a major year of change and development as the usual suspects reposition on the world stage.
Economies recovered, some faster than expected, thanks to the remarkably rapid vaccination development and deployment. Shortages of a wide variety of products occurred as supply struggled to keep pace with demand. We dined out less, but bought more goods leading to container port blockages for example. Common items such as microchips were in such short supply that delivery on a wide range of items - from cars to handheld tablets - were delayed. Apple, which navigated the shortages better than others, estimated the impact to be a loss of $6 billion to 2021 sales. The IMF estimates that globally 1% of 2021 GDP was lost as a result, however stock markets reached record highs.
A year on from Brexit it is hard to quantify and isolate the impact from that of COVID, however most agree that so far it has been negative: The UK's GDP continues to under-perform the Euro zone which may be partly due to a loss of EU nationals previously employed in the UK, increased controls at the border reducing trade, and the long term effects of the uncertainty created by the referendum result in 2016. The next few years need to produce clearer benefits to evidence a net gain; in the meantime UK stocks continue to be under-valued as investors prefer alternatives and continue to present us, your company with investment opportunities.
The impact of the new Omicron variant added to the list of uncertainties in the last quarter of 2021 including how much more interventionist European governments will become, for example on mandating vaccinations or on when and how quickly the 'free money' and easy lending from central bank intervention will end, or monetary policy tightens to combat rising interest rates.
I am delighted therefore to report that your company's NAV outperformed both the FTSE 100 and 250 markets over the year by 7.2 and 6.9 percentage points respectively. We are seeing the benefit that Manny Pohl brings in the three years since he became fund manager with greater conviction, focus and efficiency resulting in a smaller portfolio that is outperforming comparators. The Board is very grateful for his concentrated efforts to identify the right investments and timing to invest or divest, and to continue to provide returns for shareholders against the backdrop of greater than usual uncertainties.
As 2021 drew to a close, Apple continued its relentless rise, tripling its share price since early 2020 when Covid first struck. On the first day of trading in 2022, it became the first company to realise $3 trillion market capitalisation, reflecting the importance of technology for work, education, entertainment and staying connected.
In the wider market a concerted lift to global markets began in April, benefiting stocks to cryptocurrencies, with a rush into US equities by retail investors at the heart of that lift. All three major US indices set record highs in October. As the Federal Reserve retreated from its stimulus program, however, the bubble burst for Spacs and cryptos, the newest, frothiest assets.
By the end of the year some assets had lost a third to one half of their value in just over a month.
Meanwhile your company continues to invest for the long term in the UK market which has de-rated strongly since 2016 and is now trading at the lowest price to earnings level against global peers for 30 years: Its value is attractive on a relative and absolute basis. The UK market continues to offer the highest dividend yield globally, with high levels of dividend cover.
In the UK, expectations were that dividends would grow just 8% in 2021, best case (Link Group), however actual underlying growth (excluding special dividends) was much better at nearly 22% with most sectors contributing, especially banking (restoring distributions) and industrials. Mid-caps (+40.1%) rebounded and grew faster than the top 100 on an underlying basis.
Dividend growth amongst smaller companies was faster still and this is one of the reasons we focus on small companies; resilience from the right companies and their management team in times of adversity. However despite this growth, mid-cap dividends only ended the year at the same level as 2007/2008. The headlines were taken in 2021 by mining companies delivering a record £16.9bn of special dividends, three quarters of this from Rio Tinto and BHP alone.
Your company's revenue return improved by 19% to 7p per share (2020: 5.9p) still below the 9.1p of 2019. NAV total return was a very healthy 25.2% (2020: -0.2%) improving on the pre-Covid figure of 22.2%.
Against this backdrop I am pleased to tell you that your Board recommends a final dividend payment of 7.5p (total 9.5p). This reflects the better performance and total return for the year, subject to approval at the AGM. At a share price of 310p on 31 December, this represents a dividend yield of 3.1%, better than the average 2021 yield from FTSE 250 companies of 1.91% (and comparable to the FTSE All-Share yield of 3.07%).
Non-executive Director's fees remain at £10,500 each and your board continues to exercise a tight grip on costs. Our ongoing charges figure has fallen again, from 2.45% last year to 2.38%. Your board understands that while we remain a small fund, reducing this will continue to be a challenge, however every effort is made to do this, while maintaining appropriate attention on controls and governance.
Outlook
There are a number of ongoing uncertainties that may slow the return to foreign investment in UK stocks, starting with the obvious potential for another Covid variant prolonging the progress towards endemicity. Being able to 'live with the virus' depends on social norms for what is 'acceptable', the possible occurrence of a more severe variant and the effectiveness of global vaccinations.
Secondly the risk of conflict or at least lower levels of cooperation and trade between major nations is higher at the moment, in the case of Russia, Ukraine and NATO countries, and also between China, Taiwan and America. Globalisation and trade between major countries and regions means that local shocks now have a much larger impact on national economies and in some cases global outlook than perhaps ever before.
Covid has not encouraged the wider country-country cooperation or action that was hoped; in fact we see more of the opposite as politicians act 'in the national interest', and countries have to look after themselves.
Thirdly there will be unrest as we experience an uncomfortable financial squeeze. Interest rates will rise to combat inflation. In the case of the Fed, which many commentators feel has lost its direction in this matter and dithered too long, it appears likely there will be an abrupt tightening in response to 7% inflation and a 5% increase in wages and salaries in America over 2021. Globally, inflation is running at 6% and here in Europe, central banks are preparing the markets for two or more interest rate rises in 2022. In the short term, the UK is going to see a rapid rise in household bills, mostly driven by huge energy price rises; this has already resulted in calls from the Governor of the Bank of England for wage restraint to avoid entrenchment of inflation longer term. To make the challenge bigger, the jobs market is "extraordinarily tight" according to Governor Andrew Bailey.
At the same time, uncertainty grows for Boris Johnson's premiership, as 'Partygate' gains momentum with a possible fixed penalty notice for him and senior No 10 staff a possible result. This would certainly trigger a no-confidence vote by his Tory MPs and a damaging pause to any possible progress after Brexit while a new leader is selected. All await the outcome of the Metropolitan Police investigations and the Sue Grey report.
Together these elements raise concern: History tells us the fight against inflation normally results in a recession and short term, the UK
is apparently short of governmental leadership that inspires trust and confidence through challenging times.
In the UK, record mining special dividends of 2021 are likely to not be repeated in 2022. However B&M and Next already have distributed such dividends to provide a catch-up and to reflect extra revenue from lockdown, online pent-up demand and little competition for the wallet from international travel. There is also some optimism that underlying dividends for the top 100 will grow by about 5% overall this year (Link Group): This is likely to be a stronger number for smaller companies than for the Top 100.
Good companies at fair prices are still overlooked by house analysts. Those with commitment to a proven system, prepared to analyse fully and act on conviction, will come out on top in the long run. Our Managing Director and Fund Manager has many years' experience relevant to operating successfully in the conditions of 2021 - this continues to bode well for your Trust as we recently passed his 3 year anniversary in taking on the Fund Management role.
Our AGM in 2021 was again held virtually, with no shareholders present, as movement restrictions and the safety of our investors and colleagues were uppermost in our minds. We plan to hold a meeting in person for the AGM this year on 5 April 2022 at 12.00 noon. Shareholder engagement and opinion is very important to us, so there are plans in place to give you the opportunity to engage with the Board. Details of the proposed AGM can be found in the separate Notice to the AGM publication.
Manny Pohl, as Fund Manager, will provide a short presentation on his investment approach for all attendees of the AGM.
I and my colleagues on the board look forward to the chance of meeting you in person once more. We wish you well in the meantime.
Frank Ashton
Non-Executive Chairman
23 February 2022
Fund Manager's Review
The Global Scene
The past year has been very unusual characterised by isolation, distance, and virtuality and one which most of us will be keen to forget. While 2020 imposed a strange new world upon us, 2021 became the year of the 'new-normal'. For most of us, this past year has seen our social circles dwindle dramatically and our online, virtual lives came to fruition. For me, this year has been most challenging due to the restrictions on travelling and not seeing loved ones and long-standing friends. As for everyone, we have had to adjust, be resilient and find new and alternative ways to move forward and improve.
Over the past year, we have been teased with our freedoms, gradually emerging from blanket lockdowns and then focusing on implementing ongoing regional lockdowns. Many of the rescheduled 2020 sporting events were hosted in 2021, albeit in most cases without the public in attendance.
For the world community, being resilient in these testing times is the only attribute that has kept us all going. Sadly, as the world gradually opened, the reported deaths continued to climb, reaching five million in November 2021. On a positive note, the vaccines administered worldwide exceeded 1 billion in June 2021. While world health officials were focused on combatting different variants of the virus, businesses were struggling to survive, and consumers were fearful of disrupted supply chains, low inventories, and rising inflation.
The Markets and Our Portfolio
Despite this frantic and dramatic backdrop, equity markets and our portfolio have delivered a remarkable return with the FTSE 100 up by 7.5% in the final quarter of the year and our portfolio up by 29.1%. This compared favourably with other major stock markets and better than the NASDAQ's 4.1% rise. The NASDAQ, which is home to many technology companies, has outperformed strongly over the last two years, but more recently, the share prices of older, more traditional companies have started to increase. The FTSE 100 is home to many such companies, including BP, Royal Dutch Shell as well as Utility companies. It hit a record high of 7457.1 on 29 December 2021 before declining to close at 7384.5 at year-end. I have been managing the portfolio for the past three years, and I am very pleased with the performance.
Despite this excellent stock market performance, the Begbies Traynor's "Red Flag Alert", which has monitored the financial health of British companies for the past 15 years, now paints a particularly worrying picture for UK businesses with increasing numbers falling victim to pressures that have been building up over the past two years as a result of the COVID-19 pandemic. Therefore, it is essential in this environment that the portfolio comprises quality businesses with demonstrated resilience against such a headwind, enabling the portfolio to outperform.
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.
While most of the stocks in the portfolio contributed to the outperformance of the portfolio versus the market, a handful of names performed exceptionally well, which included Liontrust Asset Management (LSE: LIO), Tritax Big Box (LSE: BBOX) and AEW UK Reit (LSE: AEWU). After an impressive performance in 2020, Games Workshop (LSE: GAW) detracted from the portfolio return over the year, as did HomeServe (LSE: HSV). At an aggregate level, all of our alpha was generated through stock selection, as opposed to sector selection and this is consistent with our style as a bottom-up, benchmark unaware, high conviction manager.
Liontrust Asset Management (LSE: LIO)
The company was launched in 1995 and listed on the London Stock Exchange in 1999. LIO currently has approximately £37.2 billion in assets under management and advice as at the 31 December 2021, which increased 20% over the financial year. It is a well-run, fairly vanilla active investment manager which offers traditional products such as Unit Trusts, Offshore funds, Segregated Mandates, and Discretionary Portfolio Management Services. Each fund management team applies distinct and rigorous investment processes to manage funds and portfolios that ensure portfolio management is predictable and repeatable. It markets its fund internationally to institutional investors, wealth managers, financial advisers, private investors, and wholesale markets such as family offices, private banks, wealth managers, and multi-managers. The company's geographical segments are the United Kingdom, Europe (excluding the UK), Canada, and Australia.
Tritax Big Box (LSE: BBOX)
Tritax Big Box owns and operates big box stores which serve as the breakdown point for bulk palleted deliveries and are often port-centric in their location focus. It is a UK-based real estate investment trust with the focus on the acquisition and management of large-scale logistics real estate let to institutional-grade tenants on long-term leases. The company has benefited from implementing a strategy that anticipated long-term, structural changes, particularly the growth in e-commerce. The company has witnessed the most robust first half performance to date with a 12.5% total return to June 2021 reflecting an increasingly acute imbalance between increasing demand and highly constrained supply, in a market with clear barriers to entry.
AEW UK REIT (LSE: AEWU)
AEW UK is a conservatively geared REIT with a current loan to NAV ratio of 29.84%. The company's investment objective is the attractive total return to shareholders from primarily investing in a portfolio of smaller commercial properties in the UK. Geographically, it operates only in the United Kingdom and the company derives revenue from rental income and other property income which has been retained in the portfolio because of its attractive yield.
A genuine long-term approach
Our process aims to find high-quality businesses that we own for the very long-term, our portfolio turnover remains low. We continue to have investments that we have held for over ten years; however, this doesn't mean we aren't always looking for new investments. The focus this year has been to monitor the individual business performance in a highly stressful environment of our existing holdings as opposed to the share price performance to ensure that they have the sustainable and resilient characteristics mentioned previously. Few changes have been made to the portfolio with our exposure to property trusts retained to recognise the need to maintain the dividend paid to shareholders within a growth style portfolio.
Investment management is more than merely generating alpha in excess of a benchmark. While that is a core part of our mandate, other fundamental qualitative issues are central to what we do. For example, we recognise that capital allocation is a vehicle 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 in our investment process. We need to trust that management has the best interests for all stakeholders at heart. 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 that we believe are sustainable in the long term. Finding trustworthy, values-based management teams that align with our core values and beliefs will ensure above-average economic portfolio returns. Sustainability of investment performance and the improvement of societal wellbeing hinges upon ethical, transparent, and honest leadership. In cases where we feel we can add something to the conversation, we engage with the company.
Investment Philosophy
As far as portfolio investments are concerned, our investment philosophy is clear:
I. The economics of a business drives long-term investment returns; and
II. Investing in high quality, growth businesses that have the ability to generate predictable, above-average economic returns will produce superior investment performance over the long-term.
In essence, this means that in assessing potential investments we:
1. Value long-term potential, not just performance
2. Choose high-quality, growing businesses; and
3. Ignore temporary market turbulence.
The key attributes that will define our investments are:
· Organic Sales Growth: Quality franchises organically growing sales above GDP growth that can do so (sustainably) because they have a large, growing market opportunity and compelling competitive advantage which will drive ongoing market share gains are attractive.
· A Proven Track Record: This encompasses both the management's capability and the strength of the business' model. Generally, a firm that consistently delivers a Return on Equity of greater than 15% indicates a Quality Franchise for us. Our investment philosophy is built on the belief that a stock's long-term return to shareholders is driven by the return on capital of the underlying business.
· Company's Future Profits: In essence we are backing a proven management team and a successful business model. Management are the key decision makers regarding the company's strategy and its competitive position in the marketplace. It is critical that we have confidence in the company's ability to sustainably execute its strategy and grow earnings, even in a tough environment like the current and Brexit conundrum.
· Low Leverage: We require investments to operate with low levels of debt, which ensures that they have sufficient resources to execute on their strategy. An Interest Coverage above 4x provides sufficient bandwidth in times of economic trouble. As a long-term investor, capital preservation is the highest priority. There is nothing that changes a management team's focus toward the short term quicker than impending debt refinancing when market conditions suddenly change for the worse. We need to be comfortable that this will not happen and that the company has a strong enough balance sheet so that it will retain optionality and can quickly and efficiently execute its strategy over the long-term.
Looking Forward
The portfolio outperformance over the past twelve months was due to a considerable increase in both the earnings and the dividends declared by our companies and a substantial re-rating of these businesses by the market. The world economy had the wind at its back in 2021 with generous fiscal policy and accommodative central bankers. However, inflation and supply chains have been identified as the key obstacles to earnings growth, with central banks now focusing on dealing with the former. In the US, the Fed is expected to increase interest rates four times during 2022, and with inflation rising in the UK to 5.4% in December, the BoE hiked its policy rate by 25 bps to 0.5% at its February meeting. In Europe, recent data has confirmed an economic soft patch with the Eurozone January services PMI index declining by more than expected and the corresponding index in the UK also declining in January.
The net effect of the expected tightening in monetary policy has placed pressure on the high PE valuations of the market, in particular growth stocks as future earnings are discounted at a higher rate. While this will put pressure on our portfolio in the short term, our investment philosophy is based on the belief that the long-term economics of a business drives long-term investment returns. Our companies have strong business models with capable and experienced management teams. 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 through our investment performance 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. Over time we expect that dividends from the high growth quality companies in the portfolio will increase sufficiently so that other high growth quality companies can replace the property trusts without jeopardising our AIC dividend hero status.
Update
The unaudited NAV on 31 January 2022 was 282p per share - down by 9.1% from 31 December 2021, The share price on the same day was 235p (trading at a discount of 16.5%). Further updates can be found at www.athelneytrust.co.uk
Dr Manny Pohl AM
Fund Manager
23 February 2022
Strategic Report
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 and reports to other Board members and answers any questions raised. The compliance with existing regulatory and legal requirements are 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 AGM held in March 2021 was subject to government COVID-19 restrictions and the Board reluctantly held the meeting behind closed doors and Shareholders were requested not to attend. Voting was poll based and Shareholders were requested to email any questions to the Directors. The Board plan to hold the 2022 AGM in person on 5 April 2022 at 12.00 noon. Further details regarding the 2022 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 19 to 20, 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 (2020: 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 2021 can be found on pages 10 and 11 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 15 to 18, 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 9 which form part of the Strategic Report.
Principal Risks and Uncertainties and Risk Management
As stated within the Corporate Governance Statement on pages 15 to 18, 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 15 to 18. 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 other emissions.
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
23 February 2022
Income Statement
For the Year Ended 31 December 2021
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2021 2020
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| Note | Revenue | Capital | Total |
| Revenue | Capital | Total |
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| £ | £ | £ |
| £ | £ | £ |
| Gains/(losses) on investments held at fair value | 8 | - | 1,359,219 | 1,359,219 |
| - | (30,695) | (30,695) |
| Income from investments | 2 | 186,393 | - | 186,393 |
| 160,876 | - | 160,876 |
| Investment management expenses | 3 | (4,488) | (40,692) | (45,180) |
| (3,781) | (34,221) | (38,002) |
| Other expenses | 3 | (30,645) | (72,964) | (103,609) |
| (29,820) | (75,688) | (105,508) |
| Net return on ordinary activities before taxation |
| 151,260 | 1,245,563 | 1,396,823 |
| 127,275 | (140,604) | (13,329) |
| Taxation | 5 | - | - | - |
| - | - | - |
| Net return on ordinary activities after taxation | 6 | 151,260 | 1,245,563 | 1,396,823 |
| 127,275 | (140,604) | (13,329) |
| Net return per ordinary share | 6 | 7.0p | 57.7p | 64.7p |
| 5.9p | (6.5p) | (0.6p) |
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| Dividend per ordinary share paid during the year | 7 | 9.7p |
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| 11p |
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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 33 to 37 form part of these financial statements.
Statement of Changes in Equity
For the Year Ended 31 December 2021
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| Called-up |
| Capital | Capital |
| Total |
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| Share | Share | reserve | reserve | Revenue | Shareholders' |
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| Capital | Premium | realised | unrealised | reserve | Funds |
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| £ | £ | £ | £ | £ | £ |
| Balance brought forward at 1 January 2020 | 539,470 | 881,087 | 1,916,502 | 1,982,060 | 439,598 | 5,758,717 |
| Net profits on realization |
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| of investments | - | - | 223,957 | - | - | 223,957 |
| Decrease in unrealized |
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| Appreciation | - | - | - | (254,652) | - | (254,652) |
| Expenses allocated to |
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| Capital | - | - | (109,909) | - | - | (109,909) |
| Profit for the year | - | - | - | - | 127,275 | 127,275 |
| Dividend paid in year | - | - | - | - | (237,367) | (237,367) |
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| Shareholders' Funds at 31 December 2020 | 539,470 | 881,087 | 2,030,550 | 1,727,408 | 329,506 | 5,508,021 |
| 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 realization |
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| of investments | - | - | 354,843 | - | - | 354,843 |
| Increase in unrealized |
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| Appreciation | - | - | - | 1,004,376 | - | 1,004,376 |
| Expenses allocated to |
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| Capital | - | - | (113,656) | - | - | (113,656) |
| Profit for the year | - | - | - | - | 151,260 | 151,260 |
| Dividend paid in year | - | - | - | - | (209,314) | (209,314) |
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| Shareholders' Funds at 31 December 2021 | 539,470 | 881,087 | 2,271,737 | 2,731,784 | 271,452 | 6,695,530 |
The notes on pages 33 to 37 form part of these financial statements.
Statement of Financial Position As at 31 December 2021
Company Number: 02933559
| Note |
| 2021 |
| 2020 | ||||
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| £ |
| £ | |||
| Fixed assets |
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| Investments held at fair value through profit and loss | 8 |
| 6,436,820 |
| 5,310,661 |
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| Current assets |
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| Debtors | 9 |
| 245,163 |
| 142,136 |
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| Cash at bank and in hand |
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| 30,676 |
| 72,601 |
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| 275,839 |
| 214,737 |
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| Creditors: amounts falling due within one year | 10 |
| (17,129) |
| (17,377) |
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| Net current assets |
| 258,710 |
| 197,360 |
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| Total assets less current liabilities | 6,695,530 |
| 5,508,021 |
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| Net assets |
| 6,695,530 |
| 5,508,021 |
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| Capital and reserves |
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| Called up share capital | 11 |
| 539,470 |
| 539,470 |
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| Share premium account |
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| 881,087 |
| 881,087 |
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| Other reserves (non distributable) |
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| Capital reserve - realised |
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| 2,271,737 |
| 2,030,550 |
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| Capital reserve - unrealised |
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| 2,731,784 |
| 1,727,408 |
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| Revenue reserve (distributable) |
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| 271,452 |
| 329,506 |
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| Shareholders' funds - all equity |
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| 6,695,530 |
| 5,508,021 |
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| Net Asset Value per share | 13 |
| 310.3p |
| 255.3p | |||
These financial statements were approved and authorised for issue by the Board of Directors on 23 February 2022 and signed on their behalf by
Dr Manny Pohl AM
Managing Director
The notes on pages 33 to 37 form part of these financial statements.
Statement of Cash Flows
For the Year Ended 31 December 2021
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| 2021 |
| 2020 | |
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| £ |
| £ | |
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| Cash flows used in operating activities |
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| Net revenue return |
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| 151,260 |
| 127,275 | |
| Adjustment for: |
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| Expenses charged to capital |
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| (113,656) |
| (109,909) | |
| Decrease in creditors |
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| (248) |
| (4,732) | |
| (Increase)/decrease in debtors |
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| (103,027) |
| 81,597 | |
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| Cash (used)/generated from operations |
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| (65,671) |
| 94,231 | |
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| Cash flows from investing activities |
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| Purchase of investments |
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| (545,379) |
| (1,137,856) | |
| Proceeds from sales of investments |
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| 778,439 |
| 1,262,691 | |
| Net cash received in investing activities |
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| 233,060 |
| 124,835 | |
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| Equity dividends paid |
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| (209,314) |
| (237,367) | |
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| Net decrease in cash |
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| (41,925) |
| (18,301) | |
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| Cash at the beginning of the year |
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| 72,601 |
| 90,902 | |
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Cash at the end of the year |
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| 30,676 |
| 72,601 | |
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 33 to 37 form part of these financial statements.
Notes to the Financial Statements
For the Year Ended 31 December 2021
1. 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. 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
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| 2021 | 2020 |
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| £ | £ |
| UK dividend income | 117,516 | 95,482 |
| Foreign dividend income | 11,752 | 17,834 |
| UK Property REITs | 57,078 | 47,480 |
| Bank interest | 47 | 80 |
| Total income | 186,393 | 160,876 |
UK dividend income
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| 2021 | 2020 |
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| £ | £ |
| UK Main Market listed investments | 74,755 | 65,476 |
| UK AIM-traded shares | 42,741 | 30,006 |
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| 117,496 | 95,482 |
3. Return on Ordinary Activities before Taxation
The following amounts (inclusive of VAT) are included within investment management and other expenses:
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| 2021 | 2020 |
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| £ | £ |
| Directors' remuneration: |
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| Services as a director | 21,000 | 23,625 |
| Otherwise in connection with management | 44,877 | 37,807 |
| Auditor's remuneration: |
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| Audit Services - Statutory audit | 11,964 | 9,250 |
| Miscellaneous expenses: |
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| Other wages and salaries | - | - |
| Management services | 32,472 | 32,472 |
| PR and communications | 4,101 | 2,310 |
| Stock exchange subscription | 10,020 | 11,540 |
| Sundry investment management and other expenses | 23.215 | 24,044 |
| Legal fees | 1,140 | 2,460 |
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| 148,789 | 143,508 |
4. Employees and Directors' Remuneration
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| 2021 | 2020 |
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| £ | £ |
| Costs in respect of Directors: |
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| Non-executive Directors' fees | 21,000 | 23,625 |
| Wages and salaries | 44,877 | 37,807 |
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| 65,877 | 61,432 |
Average number of employees:
| Chairman | - | - |
| Investment | 1 | 1 |
| Administration | - | - |
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| 1 | 1 |
5. Taxation
(i) On the basis of these financial statements no provision has been made for corporation tax (2020: Nil).
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is lower than (2020: higher than) the average small company rate of corporation tax in the UK of 19 per cent. The differences are explained below:
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The Company has unrelieved excess revenue management expenses of £595,482 at 31 December 2021 (2020: £401,358) and £102,597 (2020: £102,597) 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 2020, 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 2020. 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.
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| 2021 |
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| £ | £ | £ |
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| 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 |
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| Return per ordinary share | 7.0p | 57.7p | 64.7p |
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| 2020 |
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| £ | £ | £ |
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| Revenue | Capital | Total |
| Attributable return on ordinary activities after taxation | 127,275 | (140,604) | (13,329) |
| Weighted average number of shares |
| 2,157,881 |
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| Return per ordinary share | 5.9p | (6.5p) | (0.6p)
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7. Dividend
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| 2021 | 2020 |
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| £ | £ |
| Final dividend in respect of 2020 of 7.7p (2020: a final dividend of 9.3p was paid in respect of 2019) per share | 166,157 | 200,683 |
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| Interim dividend in respect of 2021 of 2.0p (2020: an interim dividend of 1.7p was paid in respect of 2020) per share | 43,157 | 36,684 |
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| 209,314 | 196,367 |
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 (2020: 7.7p) per ordinary share be paid out of revenue profits amounting to a total of £161,841. An interim dividend of 2p per ordinary share was paid on 24 September 2021 amounting to £43,157 making the total dividend payable in the year £204,998.
For the year 2020, a final dividend of 7.7p was paid on 6 April 2021 amounting to a total of £166,157. An interim dividend of 1.7p per ordinary share was paid on 24 September 2020 amounting to £36,684 making the total dividend paid in the year £202,841.
Summary of dividends paid for the last 10 financial years
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8. Investments
| Movements in year | 2021 | 2020 |
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| £ | £ |
| Valuation at beginning of year | 5,310,661 | 5,466,191 |
| Purchases at cost | 545,379 | 1,137,856 |
| Sales - proceeds | (778,439) | (1,262,691) |
| - realised gains on sales | 354,843 | 223,957 |
| Increase/(decrease) in unrealised appreciation | 1,004,376 | (254,652) |
| Valuation at end of year | 6,436,820 | 5,310,661 |
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| Book cost at end of year | 3,705,034 | 3,583,255 |
| Unrealised appreciation at the end of the year | 2,731,786 | 1,727,406 |
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| 6,436,820 | 5,310,661 |
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| UK Main Market listed investments | 5,014,560 | 3,791,591 |
| UK AIM-traded shares | 1,422,260 | 1,519,070 |
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| 6,436,820 | 5,310,661
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Gains on investments
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| 2021 | 2020 |
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| £ | £ |
| Realised gains on sales | 354,843 | 223,957 |
| Increase/(decrease) in unrealised appreciation | 1,004,376 | (254,652) |
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| 1,359,219 | (30,695) |
The purchase costs and sales proceeds above include transaction costs of £3,515 (2020: £7,910) and £3,302 (2020: £5,056) respectively.
9. Debtors
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| 2021 | 2020 |
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| £ | £ |
| Investment transaction debtors | 236,912 | 133,210 |
| Other debtors | 8,251 | 8,926 |
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| 245,163 | 142,136 |
10. Creditors: amounts falling due within one year
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| 2021 | 2020 |
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| £ | £ |
| Social security and other taxes | 719 | - |
| Other creditors | 2,850 | 2,850 |
| Accruals and deferred income | 13,560 | 14,527 |
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| 17,129 | 17,377 |
11. Called Up Share Capital
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| 2021 | 2020 |
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| £ | £ |
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| 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 |
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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 2021 would have decreased net assets attributable shareholders by 60 pence per share (2020: 49 pence per share). An increase of the same percentage would have an equal but opposite effect on net assets available 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.
|
| 2021 | 2020 |
|
| £ | £ |
| Fair value through profit or loss investments | 6,436,820 | 5,310,661 |
Financial instruments by category
The financial instruments of the Company fall into the following categories
31 December 2021
|
| At Amortised Cost | Assets at fair value through profit or loss | Total |
| Assets as 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 |
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|
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| Liabilities as per the balance sheet |
|
|
|
| Creditors | 17,129 | - | 17,129 |
| Total | 17,129 | - | 17,129 |
31 December 2020
|
| At Amortised Cost | Assets at fair value through profit or loss | Total |
|
| Assets as per balance sheet | £ | £ | £ |
|
| Investments | - | 5,310,661 | 5,310,661 |
|
| Debtors | 142,136 | - | 142,136 |
|
| Cash at bank | 72,601 | - | 72,601 |
|
| Total | 214,737 | 5,310,661 | 5,525,398 |
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|
|
|
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| |
| Liabilities as per the balance sheet |
|
|
| |
| Creditors | 17,377 | - | 17,377 |
|
| Total | 17,377 | - | 17,377 |
|
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 (2020: classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of £6,695,530 (2020: £5,508,021) divided by 2,157,881 (2020: 2,157,881) ordinary shares in issue at the year end.
|
| 2021 | 2020 |
|
| £ | £ |
| Net asset value per share | 310.3p | 255.3p |
|
|
|
|
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 |
| £48,112¹ |
| Simon Moore |
| £ 6,548 |
| Frank Ashton |
| £ 217 |
Notes:
1. Manny Pohl's relationship with Global Masters Fund Limited is described in Note 1 to the table of Directors' interests on page 25. During the year dividends amounting to £48,112 were paid to Global Masters Fund Limited and EC Pohl & Co Pty Ltd.
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