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Athelney Trust plc (ATY)

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Wednesday 24 February, 2021

Athelney Trust plc

Annual Financial Report

RNS Number : 2261Q
Athelney Trust PLC
24 February 2021
 

Athelney Trust PLC

 

Legal Entity Identifier:

213800ON67TJC7F4DL05

 

NON- STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 December 2020 and 2019 but is derived from those accounts. Statutory accounts for 2019 have been delivered to the Registrar of Companies, and those for 2020 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

Athelney Trust plc, the investor in small companies and junior markets announces its final results  for the 12 months ended 31 December 2020.

 

 

 

Chairman's Statement and Business   Review

Dear Shareholder

I am pleased to present the Annual Financial Report for the year to 31 December 2020.

The Strategic Report section of this Annual Report has been prepared to help Shareholders understand how the Company operates and assess its performance.

Overview

Athelney Trust plc (the 'Company' or 'Trust') faced unprecedented market conditions resulting from the global COVID-19 pandemic declared in March, subsequent disruption to life, business and the economy from two national lockdowns, and vaccine announcements in November and December.  The company performed well in this context, with unusually large market swings and uncertainty leading to increased share price volatility.  The key performance points are as follows:

· At 31 December 2020, audited Net Asset Value (NAV) was 255.3p per share (2019: 266.9p), a decrease of 4.3% over the year as compared to a 6.4% decline in the FTSE 250 and a 14.3% decline 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 -0.22% (2019: 22.2%). Long term performance represented by the Trust's average 10-year total shareholder return of +112% lagged the FTSE 100 (+119%) and lagged the FTSE 250 (+194%). 

· The 12-month revenue return per ordinary share was 5.9p (2019: 9.1p), a decrease of 35%.

· The first interim dividend of 1.7p per share was paid on 25 September 2020.

· Your Board recommend a final dividend of 7.7p per share making a total dividend payable for the year of 9.4p (2019: 9.3p) an increase of 1%.  UK Inflation for the year of 2020 was 0.8% (Office for National Statistics).

· This is the 18th successive year of progressive dividend and importantly returns the Trust to a top position in the dividend yield league table for Investment Companies as well as keeps us in the Next Generation of Dividend Heroes list maintained by the AIC (the trust was top of the list in February 2021).

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 14 to 17.

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 2020.  I have no current or prior connection with any major shareholder of the Company and maintain I am an independent Chairman.  The Board is also agreed that Simon Moore was independent at 31 December 2020.

 

Capital Gains

During the year the Company realised capital profits before expenses arising on the sale of investments in the sum of £223,957 (2019: £262,480).

 

Portfolio Review

Holdings Purchased

Holdings of Clinigen and Yougov were purchased for the first time.

Additional holdings of 4imprint, Abcam, AEW UK, Begbies Traynor, Churchill China, Clarke (T), Fevertree, Homeserve, Jarvis Securities, JD Sport, Lok'n Store, Rightmove, Smart Metering were also acquired.

Holdings Sold or Trimmed

Andrews Sykes, Biffa, Boohoo, Camellia, Costain, Custodian REIT, Greencore, Hill & Smith, Marstons, Mountview Estates, Picton Property, Randall & Quillter, Regional REIT, Vianet, Vitec, VP, Wilmington

 

Corporate Activity

The holding of Hansteen was subject to a Tender Offer during the year at a capital profit of 15%.

 

Dividend

In line with the majority of investment trusts and after consulting shareholders, the board decided the Trust should pay a dividend more frequently than once a year. During the year the Company paid its first interim dividend of 1.7p on 25 September 2020.

 

The Board is very pleased to recommend a final dividend of 7.7p per ordinary share making the total dividend this year 9.4p (2019: 9.3p). This represents an increase of 1% over the previous year. Subject to shareholder approval at the Annual General Meeting on 30 March 2021, the dividend will be paid on 6 April 2021 to shareholders on the register on 12 March 2021 .

Review

It is hard to conceive what else, short of banking collapse or world war, might in a single year have the same impact and longer-term implications for the world today as COVID-19; hardly any UK business has been untouched by related challenges including huge, panic-driven market swings.  In addition, economic uncertainty was exacerbated by a drawn-out US Presidential election plus perhaps an inevitable last-minute UK-EU agreement to a Brexit deal. 

The darkest cloud however arrived in the last quarter, with a resurgence of the virus in more transmissible form in several countries.  It may not be more deadly; however, it means the UK and other major economies must consider lockdown for longer and hope that mutations do not dim the hope that mass vaccination provides. 

I am very pleased therefore to report that NAV outperformed both the FTSE 100 and 250 markets over the year by 10 and 2.1 percentage points respectively.  In the past 18-24 months Manny Pohl has shown focus and efficiency in shaping a portfolio that continues to deliver today and promises much for tomorrow.  The Board is very grateful for his efforts in a difficult year, leading market research and a team approach that is founded on strong basic financial and value filters.  Some companies and sectors have benefited from the conditions in 2020 (mostly the big tech names, plus precious metals) while others seem stuck with a valuation that defies logic.  Finding a balance in the portfolio, now even more focused to 30+ companies, to provide growth over time, at the same time as delivering the usual Trust income during such a pandemic-affected market has been a challenge in 2020.

 

Our status as a closed-ended fund provides a key advantage over open-ended funds; we can use reserves created in good years to smooth out dividend payments through better and leaner years. 2020 was most definitely lean as UK dividends fell by 44% to £61.9bn, the lowest annual total since 2011.  The Bank of England's PRA lifted the prohibition on banking dividends in December, which since March had resulted in the financial sector accounting for 40% of the cuts, and the beleaguered oil sector for another fifth.  Protection is now in place since December to prevent excessive bank dividends being paid.  Some dividend suspensions were reversed in the last quarter, however the year's meagre results have triggered renewed interest in value-creation and cash-generative businesses, as income investors follow the inevitable correction.  Our revenue return of 5.9p per share was 35% down compared to last year, and comparatively speaking, a good outcome. 

 

Against this backdrop I am delighted to tell you that your Board recommends a final dividend payment of 7.7p (total 9.4p).  This shares the benefits of prudence in previous good years and increases our dividend once more, subject to approval at the AGM.  At a share price of 215p on 31 December, this represents a dividend yield of 4.37% (better than the average 2020 yield from FTSE 100 companies of 3.77% and much better than the FTSE 250). 

 

In terms of costs the Trust has continued to be prudent and has not added a fourth Board member to replace David Lawman who retired by rotation at the April AGM; total remuneration reduced by 14% compared to 2019.  Non-executive Director's fees remain at £10,500.  Other Trusts reduced management and Directors' fees through this year.  I believe that along with a reduced management fee of 0.75% since January 2019, we have managed ongoing costs very effectively in 'normal operating conditions' and compared to the very unusual year of 2019, our ongoing charges figure has fallen from 4.30% to 2.45%. As detailed on page 33 in note 3, nearly every line item represented a cost reduction on the prior year.

 

Outlook

All hope for a swift return to normal dividend payments, however some expect this will not take place during 2021, especially with the further COVID-19 restrictions while UK vaccinations take place for the most vulnerable groups in the first quarter.  Link Group expects a best-case UK dividend increase of 8.1% (excluding special payments) and a slow start to the dividend year while a great deal of uncertainty still lingers.  Much depends on vaccination success leading to our gaining a meaningful release from lockdown that lasts long enough to deliver sustained growth in GDP after what seems likely to be shortly announced as a UK double-dip recession in 2020.

 

There may well be pent-up enthusiasm from retail shoppers and investors alike.  Some, maybe many might go on a spending spree, and the Bank of England believes there is upside risk from this.  Current talk of negative interest rates may come to nothing, but the UK economy needs stimulating as we plan to exit lockdown in four stages between 8 March and 21 June this year.  Investors have long waited for the time where neither Brexit nor COVID-19 uncertainties keep foreign investors away, and some dislocated shares can return to par from their 'cheap comparative valuations'.  If true, this now seems most likely to happen in 2021 and will present further opportunities for the Trust focusing on the UK Small Companies sector. 

 

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 bodes well for your Trust.

 

Our AGM in 2020 was held virtually, with no shareholders present, as movement restrictions and the safety of our investors and staff made a physical meeting impossible.  We will be holding a similar event for the AGM this year on 30 March 2021 at 9.00am.  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 by sending your questions to us in advance and making sure there is a proxy for your vote.  Details of the proposed AGM can be found in the Notice to the AGM publication.

 

I leave you with the simple words of one of the inspirations of 2020 - Captain Sir Tom Moore, who after a remarkable 100th year, sadly recently died from COVID-19.  "Things will get better. The sun will shine again".  

 

Frank Ashton

Non-Executive Chairman

24 February 2021

 

Fund Manager's Review

 

Reflecting on 2020, an extraordinary year

The Global Scene

Reflecting on the year that was, it can be confidently said, it was one like no other! This year we saw our world turn upside down with the unimaginable coming to the fore.  We've seen the full gamut of external factors impact Global markets, including raging bushfires, a deadly pandemic, never-before-seen stimulus packages, trade wars and an election that tested the Democratic system of the United States.

Before I begin with this year's review, I'd like to acknowledge those who have worked tirelessly throughout this year for the benefit of our society - nurses, doctors, police and members of the defence forces. While we have all managed the significant challenges and pressures COVID-19 has placed upon us, this crisis has certainty provided each of us with some timely lessons: to cherish the physical times we have with loved ones, enjoy our social connections and to embrace our lives outdoors. Cafes and conference rooms were replaced by the disquiet of working from home, separated from our colleagues and families as we all complied with social distancing. 

Businesses needed to adapt to survive - gin distilleries became hand sanitiser producers, event staging manufacturers built flat-pack office desks, and nearly every service organisation implemented a work from home program.  Five years' worth of technology adoption occurred within weeks as businesses worked out new ways of connecting staff and customers, we created discussion channels on Slack and attended Board meetings with our pets.  This recent explosion in the use of technology is highlighted by the fact that in the five-year period from 2010 to 2015 the global market capitalisation of vertical software companies increased by £90bn from £50bn to £140bn, whereas in the period from 2015 to 2020 their market capitalisation increased by a further £340bn to £480bn.

However, something in this technology focused world was missing: the face-to-face interaction and mentoring that occurs within the office environment.  For business leaders, these items have become the next challenge for those who need to engage with their teams and provide purpose and a sense of community when normal social interactions are not possible. To ensure business success through these times, leaders need to ensure their companies adopt change-orientated capabilities that help firms redeploy and reconfigure their resource base while ensuring they remain responsible to all stakeholders and as investors, we need to ensure that we are able to identify these companies.

The Markets and Our Portfolio

Global markets rose across the board over the last quarter with most markets trending up since the April 2020 lows. After initially under-performing the US tech stocks, UK stocks advanced strongly on the news of a vaccine and a Brexit trade agreement. The pound rose to its highest level against the USD since March 2020.  Without doubt, some areas of the global market look expensive when viewed historically but it was the year of   technology as mentioned previously and the stock markets are merely reflecting the rapid changes taking place in the economy. The FTSE-250 hit a record high of 22,114.30 on 2nd of January 2020 before collapsing by 44.1% over the next 2 months.  It then increased by 66% over the next nine months to close the year at 20,488.3, down 6.4% over the year. By comparison, our portfolio increased by 3.5% (adjusting for outflows on a time weighted basis) over the same period.

While the FTSE-250 only declined by 6.4% this is a capitalisation weighted index and one should not lose sight of the fact that there are many more smaller businesses in trouble, evidenced in the latest Red Flag Alert research report by Begbies Traynor for 2020, which reported that 630,000 businesses in the UK are recorded to be in significant distress at the end of the fourth quarter, the largest quarterly increase (73,000) in financially distressed companies since the second quarter of 2017. This 13% increase (from 557,000 in Q3 2020) comes as the UK is plunged into another nationwide lockdown and clearly these figures would have been much worse had it not been for Government support.  The sad truth is that for many companies this will provide little more than a stay of execution as debt levels become unmanageable and structural changes across many sectors take their toll.

While the majority 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 Games Workshop (LSE: GAW), Jarvis Securities (LSE: JIM) and Treatt (LSE: TET); a brief description of these 3 companies follows.  The biggest detractors from returns over the year included 4IMPRINT (LSE: FOUR), Forterra (LSE: FORT) and Paypoint (LSE: PAY). 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.

Games Workshop Group plc (LSE: GAW)

Games Workshop designs, manufactures, distributes and markets a hobby based upon collecting, modelling, painting and tabletop gaming with model soldiers. Its key brands are the high fantasy Warhammer and dark future Warhammer 40,000 game systems which it has been able to expand out to encompass video games, books and new campaigns. Games Workshops' competitive advantage is driven by the fact that it has limited competition with the games voraciously supported by a legion of fans worldwide, who will go to great lengths (and expense) to produce their own accompaniments to add to the series lore and backstory. The company generates most of its income in North America and during the COVID-19 lockdown, the majority of the 529 retail stores were restricted or closed but normal trading did resume in the period that the stores were allowed to trade.

 

Jarvis Securities plc (LSE: JIM)

Jarvis offers retail execution-only stockbroking, ISA and SIPP investment wrappers, savings schemes, and financial administration, settlement and custody services to other stockbrokers and investment firms as well as individuals. It offers Dial-n-Deal for clients wanting to open an account over the telephone and sell shares in certificated form while sellmysharecertificates.com is a share sale postal service. It also offers outsourced services to investment professionals and other financial intermediaries and its subsidiary, Jarvis Investment Management Ltd, is an outsourced investment administration and Model B settlement services provider.  We believe that this business model should be able to offset the effects of the depressed market conditions and through organic growth be able to translate increased trade volumes into improved profits.

 

Treatt plc (LSE: TET)

Treatt manufactures and supplies various natural extracts and ingredients to the flavour, fragrance, beverage, and consumer product industries from their bases in the UK, the US and China. It has a diverse product portfolio with particular expertise in citrus, tea and sugar reduction. The company also provides ingredient applications for beverage and household products; and fragrance ingredients that are the result of over a century of knowledge and innovation.  The business has continued partnering with customers to develop exciting products in the fast-evolving beverages market and some material new business wins have been achieved including in the global alcoholic seltzer category which is continuing to grow strongly. Treatt is well positioned as a supplier of natural extracts and with its technical expertise enables it to add significant value to customers across a growing range of applications resulting in margin expansion as well as revenue growth.  

 

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 and it is critical that we have confidence in the company's ability to sustainably execute its strategy and grow their earnings, even in a tough environment like the current COVID-19 and Brexit conundrum.

·   Low Leverage: We require investments to operate with low levels of debt, which ensure 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.

 

Sleep Well rather than Eat Well

As our process aims to find high-quality businesses that we own for the very long-term, our portfolio turnover remains low. Through time 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. As mentioned in our monthly reports, the focus this year has been to continue to restructure the portfolio to align it with our investment philosophy while cognisant of the need to maintain the dividend paid to shareholders.

 

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. 

 

Looking Forward

While the COVID epidemic has affected most businesses negatively, our investment philosophy is based on the belief the long-term economics of a business drives long-term investment returns. The long-term financial metrics of our portfolio companies, including organic sales growth, earnings and dividend growth, should provide the impetus for improvement in valuations or at least be supportive of the current valuations in the future. Our companies have strong business models with capable and experienced management teams which we expect will continue to deliver above-average returns to shareholders.  Dividends are expected to be re-instated where they have been cut or withheld, with the Athelney dividend supported in the short-term by the reserves we have built up in the good times and by the distributions from the high yielding property trusts. Over time we expect that the 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.

While we do feel that the markets are relatively fully valued and do not see a significant improvement in the P/E ratings of the market, for many of the companies in the portfolio our estimates and forecasts for total portfolio return remain promising.

 

Update

The unaudited NAV on 31 January 2021 was 256.2p per share - up 0.35% from 31 December 2020, the third monthly increase in a row and beating the FTSE 100(-0.82%), FTSE 250 (-1.27%), Small Cap Index (+0.24%) as well as AIM All-share Index (+0.31%). The share price on the same day was 210p (trading at a discount of 18%).  Further updates can be found at www.athelneytrust.co.uk  

 

Dr Manny Pohl AM

Fund Manager

24 February 2021

 

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 April 2020 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. In light of the current Government COVID-19 guidance the Directors have again decided to hold the 2021 AGM behind closed doors. Further details regarding the 2021 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 18 to 19, 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 (2019: 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 those holdings and his views on asset allocation, including between UK and overseas equities, corporate bonds, cash and gearing.

 

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 2020 can be found on pages 9 and 10 of the annual 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 14 to 17, 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 5 and the Fund Manager's review on pages 6 to 8 which form part of the Strategic Report.

 

Principal Risks and Uncertainties and Risk Management

As stated within the Corporate Governance Statement on pages 14 to 17, 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 14 to 17. 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

  24 February 2021

 

Income Statement

For the Year Ended 31 December 2020

 

 

 

 

 

                                                           2020                                                                                        2019

 

Note

 Revenue

Capital

  Total

 

 Revenue

 Capital

  Total

 

 

 

 

  £

 

£

 

  £

(Losses)/gains on investments held at fair value

8

-

(30,695)

(30,695)

 

-

1,086,854

1,086,854

Income from investments

2

160,876

-

160,876

 

232,262

-

232,262

Investment management expenses

3

(3,781)

(34,221)

(38,002)

 

(3,812)

(34,682)

(38,494)

Other expenses

3

(29,820)

(75,688)

(105,508)

 

(32,807)

(166,384)

(199,191)

Net return on ordinary activities before taxation

 

127,275

(140,604)

(13,329)

 

195,643

885,788

1,081,431

Taxation

5

-

-

-

 

-

-

-

Net return on ordinary activities after taxation

6

127,275

(140,604)

(13,329)

 

195,643

885,788

1,081,431

Net return per ordinary share

6

5.9p

(6.5p)

(0.6p)

 

9.1p

41.0p

50.1p

 

 

 

 

 

 

 

 

 

Dividend per ordinary share paid during the year

7

11p

 

 

 

9.1p

 

 

 

 

 

 

 

 

 

 

 

 

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 October 2019 by the Association of Investment Companies.

 

Statement of Changes in Equity  

For the Year Ended 31 December 2020

 

 

 

 

Called-up

 

Capital

Capital

 

Total

 

Share

Share

reserve

reserve

Revenue

Shareholders'

 

Capital

Premium

realised

unrealised

reserve

Funds

 

£

£

£

£

£

£

Balance brought forward at 1 January 2019

539,470

881,087

1,855,088

1,157,686

440,322

4,873,653

Net profits on realisation

 

 

 

 

 

 

  of investments

-

-

262,480

-

-

262,480

Increase in unrealised

 

 

 

 

 

 

  appreciation

-

-

-

824,374

-

824,374

Expenses allocated to

 

 

 

 

 

 

  Capital

-

-

(201,066)

-

-

(201,066)

Profit for the year

-

-

-

-

195,643

195,643

Dividend paid in year

-

-

-

-

(196,367)

(196,367)

 

 

 

 

 

 

 

Shareholders' Funds at 31 December 2019

539,470

881,087

1,916,502

1,982,060

439,598

5,758,717

 

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 realisation

 

 

 

 

 

 

  of investments

-

-

223,957

-

-

223,957

Decrease in unrealised

 

 

 

 

 

 

  Appreciation

-

-

-

(254,652)

-

(254,652)

Expenses allocated to

 

 

 

 

 

 

  Capital

-

-

(109,909)

-

-

(109,909)

Profit for the year

-

-

-

-

127,275

127,275

Dividend paid in year

-

-

-

-

(237,367)

(237,367)

 

 

 

 

 

 

 

Shareholders' Funds at 31 December 2020

539,470

881,087

2,030,550

1,727,408

329,506

5,508,021

 

Statement of Financial  

As at 31 December   2020

 

Company Number: 02933559

 

  Note 

 

2020

 

2019

 

 

 

 

 

 

 

 

 

£

 

  £

Fixed assets

 

 

 

 

 

Investments held at fair value through profit and loss

8

 

5,310,661

 

5,466,191

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Debtors

9

 

142,136

 

223,733

 

Cash at bank and in hand

 

 

72,601

 

90,902

 

 

 

 

214,737

 

314,635

 

 

 

 

 

 

 

 

Creditors: amounts falling due within one year

10

 

(17,377)

 

(22,109)

 

 

 

 

 

 

 

Net current assets

 

197,360

 

292,526

 

 

 

 

 

 

 

Total assets less current liabilities

5,508,021

 

5,758,717

 

 

 

 

 

 

 

Net assets

 

5,508,021

 

5,758,717

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

2,030,550

 

1,916,502

 

  Capital reserve - unrealised

 

 

1,727,408

 

1,982,060

 

Revenue reserve (distributable)

 

 

329,506

 

439,598

 

 

 

 

 

 

 

Shareholders' funds - all equity

 

 

5,508,021

 

5,758,717

 

 

 

 

 

 

Net Asset Value per share

13

 

255.3p

 

266.9p

                 

 

 

These financial statements were approved and authorised for issue by the Board of Directors on 24 February 2021 and signed on their behalf by

 

 

Dr Manny Pohl AM

Managing Director

 

 

Statement of Cash Flows

For the Year Ended 31 December 2020

 

 

 

 

2020

 

  2019

 

 

 

  £

 

  £

 

 

 

 

 

 

Cash flows used in operating activities

 

 

 

 

 

Net revenue return

 

 

127,275

 

195,643

Adjustment for:

 

 

 

 

 

Expenses charged to capital

 

 

(109,909)

 

(201,066)

(Decrease)/increase in creditors

 

 

(4,732)

 

(1,431)

Decrease/(increase) in debtors

 

 

81,597

 

(10,298)

 

 

 

 

 

 

Cash (used)/from operations

 

 

94,231

 

(17,152)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchase of investments

 

 

(1,137,856)

 

(2,074,201)

Proceeds from sales of investments

 

 

1,262,691

 

2,343,102

Net cash used in investing activities

 

 

124,835

 

268,901

 

 

 

 

 

 

 

 

 

 

 

 

Equity dividends paid

 

 

(237,367)

 

(196,367)

 

 

 

 

 

 

Net (decrease)/increase in cash

 

 

(18,301)

 

55,382

 

 

 

 

 

 

Cash at the beginning of the year

 

 

90,902

 

35,520

 

Cash at the end of the year

 

 

72,601

 

90,902

             

 

 

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.

 

Notes to the Financial Statements

For the Year Ended 31 December 2020

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 October 2019, 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 

 

 

2020

2019

 

£

£

UK dividend income

95,482

173,047

Foreign dividend income

17,834

25,542

UK Property REITs

47,480

  33,173

Bank interest

  80

-

Bank compensation

-

500

Total income

160,876

232,262

 

UK dividend income

 

2020

2019

 

£

£

UK Main Market listed investments

65,476

124,674

UK AIM-traded shares

30,006

  48,373

 

95,482

173,047

   

3. Return on Ordinary Activities before Taxation

The following amounts (inclusive of VAT) are included 

within investment management and other expenses:

 

2020

2019

 

£

£

Directors' remuneration:

 

 

Services as a director

23,625

26,250

Otherwise in connection with management

37,807

45,122

Auditor's remuneration:

 

 

Audit Services - Statutory audit

9,250

13,250

Miscellaneous expenses:

 

 

Other wages and salaries

-

  153

Management services

32,472

32,472

PR and communications

  2,310

12,351

Stock exchange subscription

11,540

6,748

Sundry investment management and other expenses

24,044

27,633

Legal fees

2,460

73,706

 

143,508

237,685

4. Employees and Directors' Remuneration

 

 

2020

2019

 

£

£

Costs in respect of Directors:

 

 

Non-executive Directors' fees

23,625

26,250

Wages and salaries

37,807

45,122

Social security costs

-

153

 

61,432

71,525

 

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 (2019: Nil).

(ii) Factors affecting the tax charge for the year.

The tax charge for the period is higher than (2019: lower than) the average small company rate of corporation tax in the UK of 19 per cent.  The differences are explained below:

 

 

2020

2019

 

£

£

Total return on ordinary activities  before tax

 

(13,329)

1,081,431

Total return on ordinary activities multiplied by the

average small company rate of corporation tax 19% 

(2019: 19%)

( 2,532)

  205,472

Effects of:

 

 

UK dividend income not taxable

(18,142)

(32,879)

Revaluation of shares not taxable

  48,384

(156,631)

Capital gains not taxable

(42,552)

(49,871)

Unrelieved management expenses

14,842

33,909

Current tax charge for the year

   -

   -

 

The Company has unrelieved excess revenue management expenses of £401,358 at 31 December 2020 (2019: £356,765) and £102,597 (2019: £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 2019, 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 2019.  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.

 

 

2020

 

 

£

£

£

 

Revenue

Capital

Total

Attributable return on ordinary activities after taxation

127,275

(140,604)

(13,329)

Weighted average number of shares

 

2,157,881

 

Return per ordinary share

5.9p

(6.5p)

(0.6p)

     

 

 

2019

 

 

£

£

£

 

Revenue

Capital

Total

Attributable return on ordinary activities after taxation

195,643

885,788

1,081,431

Weighted average number of shares

 

2,157,881

 

Return per ordinary share

9.1p

41.0p

50.1p

 

7. Dividend

 

2020

2019

 

£

£

Final dividend in respect of 2019 of 9.3p (2019: a final

dividend of 9.1p was paid in respect of 2018) per share

200,683 

196,367

 

 

 

Interim dividend in respect of 2020 of 1.7p per share

36,684

-

 

237,367

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 7.7p (2019: 9.3p) per ordinary share be paid out of revenue profits amounting to a total of £166,157. For the year 2019, a final dividend of 9.3p was paid on 16 April 2020 amounting to a total of £200,683.

 

Summary of dividends paid for the last 10 financial years

 

 

Ex-div date

Dividend Type

Amount

Financial Year

Proposed 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

21/3/2012

Final

4.95p

2011

06/4/2011

Final

4.9p

2010

 

 

2020

2019

 

£

£

Revenue available for distribution

  127,275

195,643

Interim dividend paid

  (36,684)

-

Final dividend in respect of financial year Ended 31 December 2020

(166,157)

(200,683)

Undistributed Revenue Reserve

(  75,566)

(  5,040)

 

8. Investments

   

Movements in year

2020

2019

 

£

£

Valuation at beginning of year

5,466,191

4,648,238

Purchases at cost

1,137,856

2,074,201

Sales  - proceeds 

(1,262,691)

(2,343,102)

  - realised gains on sales

223,957

262,480

(Decrease)/Increase in unrealised appreciation

(254,652)

824,374

Valuation at end of year

5,310,661

5,466,191

 

 

 

Book cost at end of year

3,583,255

3,484,131

Unrealised appreciation at the end of the year

1,727,406

1,982,060

 

5,310,661

5,466,191

 

 

 

UK Main Market listed investments

3,791,591

4,258,921

UK AIM-traded shares

1,519,070

1,207,270

 

5,310,661

5,466,191

 

   

 

(Losses)/gains on investments 

 

2020

2019

 

£

£

Realised gains on sales

223,957

  262,480

(Decrease)/Increase in unrealised Appreciation

(254,652)

824,374

 

(30,695)

1,086,854

   

The purchase costs and sales proceeds above include transaction costs of £7,910 (2019: £15,533) and £5,056 (2019: £8,810) respectively.

9. Debtors

 

2020

2019

 

£

£

Investment transaction debtors

133,210

213,862

Other debtors

8,926

9,871

 

142,136

223,733

10. Creditors: amounts falling due within one year

 

2020

2019

 

£

£

Social Other creditors security and other taxes

-

1,148

Other creditors

2,850

2,956

Accruals and deferred income

14,527

18,005

 

17,377

22,109

11. Called Up Share Capital

 

2020

2019

 

£

£

Authorised

10,000,000 Ordinary Shares of 25p

 

2,500,000

 

2,500,000

Allotted, called up and fully paid

 2,157,881 Ordinary Shares of 25p

 

539,470

 

539,470

             

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 2020 would have decreased net assets attributable shareholders by 49 pence per share (2019: 51 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.

 

 

2020

2019

 

£

£

Fair value through profit or loss investments

5,310,661

5,466,191

 

Financial instruments by category

The financial instruments of the Company fall into the following categories

 

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

 

 

 

 

Liabilities as per the balance sheet

 

 

 

Creditors

17,377

-

17,377

Total

17,377

-

17,377

 

 

31 December 2019

 

At Amortised Cost

Assets at fair value through profit or loss

Total

Assets as per balance sheet

£

£

£

Investments

-

5,466,191

5,466,191

Debtors

223,733

-

223,733

Cash at bank

  90,902

-

90,902

Total

314,635

5,466,191

5,780,826

 

 

 

 

Liabilities as per the balance sheet

 

 

 

Creditors

22,109

-

22,109 

Total

22,109

-

22,109

 

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 (2019: classification A investments only).

13. Net Asset Value per Share

The net asset value per share is based on net assets of £5,310,661 (2019: £5,758,717) divided by 2,157,881 (2019: 2,157,881) ordinary shares in issue at the year end.

 

2020

2019

 

£

£

Net asset value per share

255.3p

266.9p

 

 

 

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

 

£59,134¹

Simon Moore

 

£ 7,425

Frank Ashton

 

£ 246

Notes:

1.  Manny Pohl's relationship with Global Masters Fund Limited is described in Note 1 to the table of Directors' interests on page 35. During the year dividends amounting to £59,041 were paid to Global Masters Fund Limited and EC Pohl & Co Pty Ltd and £93 to Manny Pohl for shares held in his own name.

 

 

 

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