Assetco PLC Annual Report 2021

FY2021 Annual Report · Assetco PLC

Loading PDF…

ASSETCO PLC
YEAR ENDED 30 SEPTEMBER 2021

2021

ANNUAL
REPORT AND
FINANCIAL
STATEMENTS

[SECTION HEADING]TO BUILD A 21ST
CENTURY ASSET
AND WEALTH
MANAGEMENT
BUSINESS THAT
WILL DELIVER FOR
INVESTORS AND
SHAREHOLDERS

CONTENTS

1. CHAIRMAN’S STATEMENT

2. BUSINESS REVIEW

3. BOARD OF DIRECTORS

4. STRATEGIC REPORT

5. DIRECTORS’ REPORT

6. CORPORATE GOVERNANCE STATEMENT

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC

8. CONSOLIDATED INCOME STATEMENT

9. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

10. CONSOLIDATED AND COMPANY’S STATEMENT OF FINANCIAL POSITION

11. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

12. COMPANY STATEMENT OF CHANGES IN EQUITY

13. CONSOLIDATED AND COMPANY’S STATEMENT OF CASH FLOWS

14. NOTES TO THE FINANCIAL STATEMENTS

15. NOTICE OF ANNUAL GENERAL MEETING

16. COMPANY INFORMATION

1. CHAIRMAN’S STATEMENT

A YEAR OF TRANSFORMATION
The twelve month period ended 30 September 2021
was a transformational year for AssetCo. The Group
returned nearly £27 million to investors through a tender
offer, it adopted a new strategy focused on building and
operating an asset and wealth management business,
and agreed to acquire equity stakes in four firms.

On 2 October 2020 there was a successful conclusion
to the Grant Thornton litigation case. Grant Thornton
informed the Group of its decision not to appeal to the
Supreme Court, thereby crystallising the award from the
Court of Appeal ruling on 31 January 2019 amounting
to £30.5 million, including costs. This formed the basis
of returning £26.9 million to shareholders, by way of
a tender offer which was fully subscribed. The Group
purchased 6.53 million shares, equivalent to 50% of
its then issued share capital, at £4.11 per share.

In January 2021, the Group welcomed an investor
group consisting of funds managed by Toscafund
Asset Management, Peter McKellar, various
associates and me who, in aggregate, acquired a
29.8% shareholding from existing shareholders at
£4.75 per share. Peter and I joined the Board as
non-executive directors on 25 January 2021.

We both have extensive experience of the asset
and wealth management industry. The industry is
contending with significant structural shifts, including
technological advances, a reorientation of investment
habits and evolving client needs that will have a
profound impact on the business models of many
existing asset management and wealth providers,
their offerings and the choices available to clients
and savers. Following readmission to AIM and
approval by shareholders in April 2021 to change the
business strategy, the Group is committed to creating
and managing an asset and wealth management
business that is fit for purpose in the 21st century.

At the same time as the change in strategy, I was
appointed Chairman of AssetCo. I would like to pay
tribute to my predecessor, Tudor Davies, for guiding
the Group over the last 10 years. He played a crucial
role in AssetCo’s development and its transition
to an asset and wealth management business.

AssetCo plc | Report and Financial Statements 2021
1. CHAIRMAN’S STATEMENT

PROGRESS TO DATE
In January and February 2021, the Group acquired
5 million shares in River and Mercantile Group PLC,
an asset management business, at a total cost of
£10.4 million. We believed that River and Mercantile
was significantly undervalued, where the value of its
two operating businesses was not properly recognised
and that the businesses were worth more on a
stand-alone basis. This belief has been borne out
by the completed sale of its Solutions business for
significantly more than the total market capitalisation
of River and Mercantile when we invested.

In May 2021, the Group announced the acquisition of
Saracen Fund Managers for £3.44 million. Saracen is an
active manager of listed equity portfolios, an approach
we believe will reward investors over the years to come,
as markets become increasingly volatile and investors
seek targeted strategies. Our aim is to build on Saracen’s
strong foundations by broadening the investor base
of its existing funds – Global Income and Growth, UK
Alpha and UK Income (total Assets under Management
(AuM) £113.2 million) – and by expanding its product
range over time. We have already strengthened the
investment team with the recruitment of another fund
manager. In addition, we are looking to build our listed
equities capabilities through further acquisitions.

In July 2021, the Group completed the acquisition of a
68% majority equity interest (of which 5% is subject to
certain near-term performance conditions) in Rize ETF
for £16.5 million and announced the acquisition of a
30% equity stake in Parmenion for a total consideration
of up to £27.8 million. The acquisition of the stake
in Parmenion completed on 1 October 2021.

Rize ETF is a provider of thematic investment strategies
via Exchange Traded Funds (ETFs). Thematic ETFs allow
investors to invest in opportunities outside of traditional
sectors. According to Morningstar Research, total thematic
Assets under Management globally grew to $595 billion
as of March 2021, from $174 billion three years earlier,
with Europe representing over half of the AuM.

There is enormous growth potential in the area of
thematic ETF investing. Through a combination of
AssetCo’s support, and the Rize team’s expertise
and product innovation, we believe we can
significantly grow the business. Currently Rize
offers six thematic strategies with combined AuM

of $514.1 million, with approximately $459 million
of net inflows being achieved in 2021.

Rize’s success and potential were recognised through a
number of prestigious awards that the team won during
the year. Rize was named Best New Entrant at the
ETF Express European Awards. The Rize Sustainable
Future of Food ETF was named the most innovative
sustainable and ESG ETF launch by Investment Week
and the most innovative ETF of the year at the ETF
Stream Awards. Rize also won the Best ESG Investment
Fund (thematic) category at the ESG Investing Awards.

Parmenion is a B2B fund investment and advisory
platform for the UK wealth and IFA sector,
partnering with over 1,500 adviser firms helping
them to deliver investment solutions to over 80,000
underlying customers. The business is benefiting
from the digital transformation taking place within
the asset and wealth management industry.

Parmenion has positioned itself as an enabler to the
wealth management industry, with its proprietary
technology platform enabling it to retain control
of customer propositions and hence continue
to address the evolving needs of its clients. This
client focused approach, coupled with strong
service, has driven the growth of Parmenion’s AuM
significantly ahead of the overall platform market.

Parmenion has been consistently ranked by financial
advisers as number one for platforms with AuM of
less than £20 billion, and second for all platforms.
During the year, Parmenion won the Best Overall
Service to Paraplanners category at the Professional
Paraplanner Awards and was named best platform
for advisers (Assets under Administration below
£25 billion) at the Professional Adviser awards.
Currently, Parmenion has AuM of £9.3 billion and, in
response to client demand, is looking to broaden the
range of investment solutions it hosts on its platform.

In part, the investments in Rize ETF and Parmenion were
financed by a successful £25 million equity fund raising
at £14.50 per share in July 2021 that attracted interest
from both existing and new shareholders. We would
like to thank shareholders for their support. We also
note and welcome the increasing interest from analysts
and investors generally in the Group and its strategy.

AssetCo plc | Report and Financial Statements 2021 1. CHAIRMAN’S STATEMENT

FINANCIALS
It is pleasing to report that the Group made a profit before taxation of
£16.1 million during the twelve months ended 30 September 2021
(2020: £3.4 million). The sizeable year-on-year increase is largely due to
the successful conclusion of the litigation case against Grant Thornton.
During the twelve month period the share price more than quadrupled
to close at £17.00 per share (30 September 2020: £4.11 per share).

Net assets of the Group at 30 September 2021 were £56.137
million (2020: £32.345 million) with the increase mainly attributable
to goodwill on acquisition of Rize ETF and Saracen.

£3.4m

£16.2m

2020 profit before tax

2021 profit before tax

>4X

INCREASE IN
SHARE PRICE

£56M

NET ASSETS
AT 30 SEP 2021

AssetCo plc | Report and Financial Statements 20211. CHAIRMAN’S STATEMENT

NEW TEAM
To lead the Group on its journey as an asset and
wealth management business, in September 2021
we announced the appointment of Campbell Fleming
as Chief Executive Officer from 2 October 2021.
His experience and expertise within the industry,
together with his leadership qualities, means he is
well placed to build on AssetCo’s strong foundations.
He succeeds Peter McKellar, who due to his other
commitments agreed to be interim CEO until a
long-term candidate was identified. The Board
and I are immensely grateful to Peter for all his
hard work and are delighted that he will remain on
the Board as Deputy Chairman, continuing to be
involved in the Group’s strategy and development.

Campbell is supported by a small team of distribution
and communication professionals – Gary Collins,
Lucy Draper and James Thorneley – who all joined
the Group in 2021. The Board and I appreciate their
hard work and efforts in building a new business.
They have also begun raising the profile of the
Group with clients and partners around the world
and with the media. These interactions are showing
early promise as people are interested to learn
more about our strategy, plans and capabilities.

Finally, the Board and I would like to thank the teams
in our underlying businesses for their continued hard
work. We are also grateful for the continued support
of customers, clients and shareholders who believe
in the products and services we offer and our focus
on delivering for investors over the long-term.

OUTLOOK
Following the end of AssetCo’s financial year, the
Group announced a possible offer to acquire River and
Mercantile Group PLC, further to the announcement
of a sale of River and Mercantile Solutions division
to Schroders PLC. The acquisition of River and
Mercantile is a core part of this strategy; it strengthens
our active equity capability and importantly provides
a foundation stone to building a private markets
business given its infrastructure investment team. It will
complement our existing presence in thematic investing
with Rize ETF and our investment in Parmenion, a
digital platform for the financial planning sector.

The Group is being transformed and has successfully
put in place some of the building blocks required
for it to become a 21st century asset and wealth
management business that delivers for investors
and makes a difference. We will look to develop
these businesses and explore other opportunities.

Martin Gilbert
Chairman

18 February 2022

AssetCo plc | Report and Financial Statements 2021

5
5

[SECTION HEADING]2. BUSINESS REVIEW

Our mission is to build a 21st century asset and wealth management business that will deliver returns for investors
and shareholders. The work to achieve this began in 2021, as we reviewed the broader market for businesses that
are agile and that exhibit many of the key attributes, set out below, that we believe are critical to building relevance
and value.

High growth thematics

Demand for alternatives

Active specialists

Digital platform

Product innovation

Access to opportunities & investors

Data analytics capabilities

ESG

Importantly, all of the businesses, and associated capabilities, that we have invested in to date exhibit many of
the above characteristics. Our focus is to develop these acquisitions through the provision of senior management
expertise and contacts, distribution and marketing support, and, where required, additional capital. The intention is
that, over time, the Company develops between five to seven distinct and different asset management and wealth
capabilities in some of the fastest growing and/or under-valued areas within the sector. The expectation is that in
addition to building these verticals, there will also be significant opportunities for the capabilities to work together
and deliver further growth.

Campbell Fleming
Chief Executive Officer

Peter McKellar,
Deputy Chairman

18 February 2022

AssetCo plc | Report and Financial Statements 20212. BUSINESS REVIEW

“Parmenion has positioned itself as a forward looking enabler to the UK wealth management sector. Through a
combination of proprietary technology, the extensive knowledge and experience of our management team and a
commitment to understanding and responding to the needs of our clients, Parmenion has delivered a service which
has been consistently ranked in the top two every quarter since 2016. Parmenion will continue to invest in the business
to ensure that we can help our clients better serve their customers and support the growth in their business”

Martin Jennings
Chief Executive of Parmenion

ACTIVE SPECIALISTS
Saracen Fund Managers was established in
Edinburgh in 1997. It is an active investment
manager offering a range of UK and Global equity
strategies. All of the funds managed by Saracen
are concentrated, differentiated portfolios.

A strict valuation framework is the cornerstone of the
investment process. Coupled with detailed fundamental
analysis, and a worst case analysis for risk, the aim is to
invest in high quality companies at an attractive price.
ESG analysis is also a core element of the investment
process and the team are most interested in companies
that can improve their ESG score over time, with better
disclosure and revised practices. This can contribute
to a better operating and financial performance at
the relevant company, which can lead to a rerating
of the shares. This approach is based on supporting
change, rather than investing in the best in class.

“Saracen is a small fund management firm with
great potential. The investment team focuses on
what we do best; giving us the freedom to invest
with conviction within a disciplined investment
process, unhindered by bureaucracy.”

Bettina Edmondston
Investment Director at Saracen Fund Managers

DIGITAL PLATFORM

AuM more than
quadrupled L5Y to
c.£9.3bn

Advisers
2,500+
(c.900 adviser firms)

Savers
68,000+

Multi-award-winning
portfolios

Since 2007, Parmenion’s award-winning
investment expertise and diverse range of
investment solutions has helped financial advice
firms build their own investment propositions.

Based in Bristol – one of the UK’s fintech
hubs – Parmenion’s strength comes from having
built a powerful combination of an intelligent
investment capability, intuitive technology and a
stellar service platform.

Trusting Parmenion to do the heavy lifting means
financial advisers can reduce risk and cost in their
business, leaving them with more time; time that can
be spent on what matters most, developing stronger
client relationships and growing their business.

Parmenion’s AuM is now £9.3 billion, with
over 1,500 financial advice firms partnering
with them to deliver their chosen investment
proposition to over 80,000 underlying clients.

AssetCo plc | Report and Financial Statements 2021 2. BUSINESS REVIEW

“Rize ETF is pioneering a new and better way to invest
in the future, one that we believe empowers investors
to participate in the growth stories of tomorrow, while
remaining on the right side of history”
Rahul Bhushan
Co-Founder and Director of Rize ETF

8
8

AssetCo plc | Report and Financial Statements 2021

[SECTION HEADING]2. BUSINESS REVIEW

United States

RoW

Europe

Canada

HIGH GROWTH THEMATICS

$600bn

$500bn

$400bn

$300bn

$200bn

$100bn

2002

2005

2010

2015

2020

Source: Morningstar Research

Rize ETF is believed to be Europe’s first specialist
thematic ETF issuer and one of the fastest growing
providers in the rapidly growing thematic ETF segment
of the asset management industry. The business
was founded in January 2019 by an experienced
management team, with a proven track record
in establishing and scaling ETF businesses.

Thematic ETFs allow investors to invest in opportunities
outside of traditional sectors. According to Morningstar
Research, total thematic fund AuM globally grew to
$595 billion as of March 2021, from $174 billion three
years earlier, with Europe representing over half of the
AuM. AuM invested in thematic funds represents 2.1%
of all assets invested in equity funds globally, up from
0.6% ten years ago. In Europe, total AuM allocated
to thematic ETFs is estimated at over $40 billion.

So far Rize ETF – which is headquartered in
London – has launched six new and innovative
thematic ETFs, providing investors with access
to transformational megatrends in an accessible,

transparent and purpose-built way. The strategies
include Cybersecurity and Data Privacy, Education
Tech and Digital Learning, Medical Cannabis and
Life Sciences and Sustainable Future of Food.

Rize ETF currently has $455.7 million of AuM.
Importantly, all six ETFs have a Sustainable Finance
Disclosure Regulation (SFDR) rating of 8 or 9. The ETFs
are marketed using traditional and digital mediums
and distributed primarily through wholesale channels,
including IFAs, private banks, wealth managers,
fund of funds and discretionary asset managers.

Rize ETF has a strong pipeline of anticipated launches
in 2022 and 2023, underpinned by a focused research
ethos and an approach to the development of new
investment strategies that leverage the best experts
in an industry in each of the relevant themes.

AssetCo plc | Report and Financial Statements 2021 3. BOARD OF DIRECTORS

CHAIRMAN –
MARTIN GILBERT
Martin Gilbert has a long history in asset and wealth
management. He co-founded Aberdeen Asset
Management PLC in 1983 and was chief executive
officer from 1991 to 2017. During that period Aberdeen
Asset Management PLC grew, through a combination
of organic growth and strategic acquisition, to become
one of the world’s leading independent asset managers
with £308 billion of AuM. In 2017 Aberdeen Asset
Management PLC merged with Standard Life plc, to
become Standard Life Aberdeen plc. On merging,
Standard Life Aberdeen plc was the biggest UK-
based asset management company and the second
biggest in Europe. Martin was co-chief executive
officer and subsequently vice chairman until he retired
from Standard Life Aberdeen plc in September 2020.
Martin is chairman of Revolut Ltd and Toscafund,
deputy chairman of River and Mercantile Group
PLC and senior independent director of Glencore
plc, alongside a number of other directorships.

CHIEF EXECUTIVE OFFICER –
CAMPBELL FLEMING
Campbell has worked within the investment
industry since the 1990s. He was Global Head of
Distribution & Marketing at Standard Life Aberdeen
until September 2021. Before joining Aberdeen
Asset Management in August 2016, Campbell was
Chief Executive – EMEA and Global Chief Operating
Officer at Columbia Threadneedle Investments,
having joined that firm as Global Head of Distribution
in November 2009. Prior to this, Campbell was
Head of UK for JPMorgan Asset Management. He
trained as a barrister in Australia before moving to
the UK in 1995. He also chairs The Big Exchange.

DEPUTY CHAIRMAN AND EXECUTIVE
DIRECTOR – PETER MCKELLAR
Peter McKellar has spent nearly all of his working
career in private markets, in particular private
equity and infrastructure investment management
and direct operating management. He retired in
September 2020 as executive chairman and global
head of private markets for Standard Life Aberdeen
plc, where he oversaw investment management
activities across private equity, infrastructure, real
estate, natural resources, and certain private credit
capabilities, totalling £55 billion of AuM. Peter is
a non-executive director of 3i Group plc and a
non-executive member of Scottish Enterprise.

NON-EXECUTIVE DIRECTOR –
TUDOR DAVIES
Chairman of the Audit Committee

Appointed to the AssetCo plc board in March 2011,
Tudor was chairman of AssetCo until the change in
strategy was approved in April 2021 when Martin Gilbert
took over the role. Upon becoming non-executive
Tudor also took on the role of Chairman of the Audit
Committee taking over from Christopher Mills.

He was the executive chairman of Dowding and Mills plc
and, following a reverse acquisition, was subsequently
appointed to the board of Castle Support Services plc.
He was also a non-executive director and subsequently
chairman of Stratagem Group plc and was chief
executive and subsequently chairman of Hicking
Pentecost plc. He is also chairman of Zytronic plc.

AssetCo plc | Report and Financial Statements 2021[SECTION HEADING]

NON-EXECUTIVE DIRECTOR –
CHRISTOPHER MILLS
Chairman of the Remuneration Committee

Appointed to the AssetCo plc board
in March 2011, Christopher is chief
executive officer of Harwood Capital
Management Limited and chief executive
and investment manager of North Atlantic
Smaller Companies Investment Trust plc.
He relinquished his role as Chairman of
the Audit Committee to Tudor Davies
when the latter became non-executive.

NON-EXECUTIVE DIRECTOR –
MARK BUTCHER
Chairman of the Nomination Committee

Appointed to the AssetCo plc board in October
2012, Mark was previously an executive
director of GPG (UK) Holdings plc which was
the UK investment arm of Guinness Peat Group
plc. He currently sits on the boards of Redde
Northgate plc and National Milk Records plc.

AssetCo plc | Report and Financial Statements 2021

4. STRATEGIC REPORT

INTRODUCTION
The directors present their Strategic Report on the
Group for the year ended 30 September 2021.

REVIEW OF THE BUSINESS
A review of the business is contained in the Chairman’s
statement on pages 2 to 5 and in the Business Review
on pages 6 to 9 and is incorporated into this report by
cross-reference.

STRATEGY
The Group’s strategy is to identify high-quality asset
and wealth management businesses which can be
added to the AssetCo stable and improved by working
alongside our experienced management team to
improve their capabilities, distribution and reach.

Our key areas of focus include being a responsible
company and manager, meeting the needs of clients
and investors and to expand through a combination
of selective acquisitions and organic growth.

KEY PERFORMANCE INDICATORS (KPIs)
Given the significant change in strategy during the year
previous KPIs are no longer relevant.

The financial key performance indicators for the year
ended 30 September 2021 were as follows:

2021

2020 Movement

Profit before tax (£’000s)

16,129

3,361

+12,768

Share price (in £)

17.00

4.11

+12.89

The increase in profit before tax arises mainly
from the successful conclusion of the litigation
case against Grant Thornton. The share price
improvement reflects the return to shareholders of
almost £27 million from the funds released by the
Grant Thornton litigation as well the subsequent
completion of two acquisitions which demonstrate
the successful commencement of our transformation
into an asset and wealth management business.

The key measurements for the asset and wealth
management businesses under our control or influence,
include revenue and profitability, AuM and investment
performance. Detailed KPIs will be developed in 2022.

PRINCIPAL RISKS AND UNCERTAINTIES
The directors continuously monitor the business
and markets to identify and deal with risks and
uncertainties as they arise. Set out below are the
principal risks which we believe could materially
affect the company’s ability to achieve its strategy.
The risks are not listed in order of significance.

FAILURE TO ATTRACT INVESTMENT FUNDS
The new strategy involves the development of an asset
and wealth management business. Such businesses are
operationally geared and success depends on attracting
adequate investment funds to manage. If the asset and
wealth management business fails to attract sufficient
assets, this could have a material adverse effect on the
Company’s business, financial condition and prospects.

In transforming AssetCo into an asset and wealth
manager, a significant amount work and detailed due
diligence is undertaken to identify appropriate and
complementary target businesses to acquire. The
experience and expertise of the Directors, management
and the teams in the underlying businesses should
enable them to attract investment funds.

PORTFOLIO, INVESTMENT
AND CLIENT MANAGEMENT RISK
The risk arises from poor investment returns.

AssetCo is an asset and wealth manager. Its
underlying businesses manage a wide range of
portfolios. There may be periods where some
portfolios have weaker performance, but during
this time other portfolios should perform better.
We recognise the importance of delivering long-
term returns and good service levels to clients.

REGULATORY RISK
There is a risk of financial fines, legal penalties and
material loss if AssetCo and/or its underlying businesses
fail to act in accordance with laws and regulations.

The Company will continue to dedicate considerable
time and resources to ensure it meets its regulatory
obligations. The Group has its own in-house legal
counsel and engages when necessary a law firm
whose speciality is regulatory compliance.

AssetCo plc | Report and Financial Statements 2021OPERATIONAL RISK
Operational risk is the risk of loss from inadequate of
failed internal processes, people and systems, or from
external events.

The management of operational risk is a key focus for
senior management within AssetCo and its underlying
businesses. The AssetCo head office team is very
experienced and meets management of operating
businesses regularly to review major issues and to
ensure proper functioning of controls.

PEOPLE RISK
The lack of retention of key employees and the
inability to attract new talent affects the continuity
and effectiveness of on-going relationships with
stakeholders.

People are key part of an asset and wealth management
business. The stability and development of our teams is
critical to our success.

This risk of losing people is minimised by ensuring a
team approach across all aspects of the Company
and its underlying businesses. In addition, to retain
key employees and attract new talent incentivisation
packages are in place.

EFFECTS OF COVID-19 PANDEMIC
The COVID-19 pandemic has had a significant effect on
all activities globally during 2021. Personal engagement
is very important in developing asset and wealth
management businesses.

AssetCo and its underlying businesses continue to
monitor the impact of the virus on economies, markets
and investors. The diversity of our businesses and
their client bases means AssetCo is well positioned to
weather any further headwinds and to take advantage
of opportunities that arise.

4. STRATEGIC REPORT

S.172 STATEMENT
Under section 172 of the Companies Act 2006 (the
“CA 2006”) the directors have a duty to promote
the success of the company for the benefit of the
shareholders as a whole. In doing so the directors are
required to have regard to matters set out in section
172(1) of the CA 2006 and the likely consequences
of any decision in the long-term; the desirability of
the company for maintaining a reputation for high
standards of business conduct; and the need to
act fairly as between members of the company.

In this context, the company is proposing to seek
new revenue opportunities in developing an asset and
wealth management business. The Board considers
that its primary stakeholders are shareholders,
employees clients and suppliers. We set out
below how we engage with our stakeholders.

Shareholders – contact with our shareholders is through
a number of avenues which include the annual report,
AGM, one-to-one meetings (when allowed) and telephone
conversations. Matters under discussion include strategy
and its execution and generating strong returns.

Employees – all employees are senior experienced
professionals and open discussion of the challenges
facing us is encouraged and frequent.

Clients – the company through its subsidiaries
aims to provide investment products that meet
the needs of investors. The company’s distribution
team have a busy engagement schedule in this
regard and update the Board on a regular basis
in terms of how client needs are evolving.

Suppliers – the company places reliance on external
third party providers for certain activities and services.
The selection process and engagement with these parties
is undertaken by senior management to ensure the
smooth operation and delivery of services to the company.

By order of the board

Stephen Murphy
Company Secretary

18 February 2022

Company Registration Number: 04966347

AssetCo plc | Report and Financial Statements 2021 5. DIRECTORS’ REPORT

INTRODUCTION
The directors present their annual report and the audited
consolidated financial statements of the Group for the
year ended 30 September 2021.

DIRECTORS
The directors of the Company who were in office during
the year, and up to the date of signing the financial
statements, were as follows:

Martin Gilbert (Chairman) – appointed as a director
25 January 2021

Campbell Fleming (CEO) – appointed 2 October 2021

Peter McKellar (Executive) – appointed 25 January 2021

Christopher Mills (Non- Executive)

Tudor Davies (Non-Executive)

Mark Butcher (Non-Executive)

Tudor Davies was executive chairman until 15 April 2021
when the company was re-admitted to AIM following a
change of strategy. On that date Martin Gilbert became
Chairman and Tudor Davies became a non-executive.

The company secretary up until 15 April 2021
was Tudor Davies. The company secretary from
that date until the date of signing this report, was
Stephen Murphy.

RESULTS
The financial statements are set out on pages 30 to 70.

DIVIDEND
The directors do not propose a dividend this year
(2020: £nil).

CAPITAL STRUCTURE
The primary objective of the company's capital
management is to ensure that capital is available
to allocate to the business that maximises
shareholder value.

Full details of the authorised and issued capital, together
with details of the movements in the company’s issued
share capital during the year, are shown in note 24.

THE COMPANY
AssetCo plc is a public limited company registered
and domiciled in England and Wales with the
registered number 4966347. The registered
office is Singleton Court Business Park,
Wonastow Road, Monmouth, NP25 5JA.

FINANCIAL RISK MANAGEMENT
See note 3 to the financial statements.

RESEARCH AND DEVELOPMENT
No expenditure has been incurred during the year in
respect of research and development activities.

FUTURE DEVELOPMENTS
The outlook for the Group is set out in the
Chairman’s Statement.

AssetCo plc | Report and Financial Statements 20215. DIRECTORS’ REPORT

DIRECTORS’ SHAREHOLDINGS
The beneficial interests of the directors in the shares of the company were as follows:

Martin Gilbert

Campbell Fleming *

Peter McKellar

Tudor Davies **

Christopher Mills ***

Mark Butcher

At 30 September 2021
No.

At 30 September 2020
No.

720,000

150,000

259,482

200,000

1,803,800

6,896

–

32,813

5,905,779

–

* Campbell Fleming was appointed since the year end but did hold 150,000 ordinary shares at 30 September 2021.

** Tudor Davies is deemed to have an interest in 200,000 shares held by Cadoc Limited, a company controlled by

his family.

*** Christopher Mills, as chief executive and a member of Harwood Capital LLP, is deemed to have an interest in the

1,803,800 shares owned by various funds associated with Harwood Capital LLP.

SUBSTANTIAL SHAREHOLDINGS
At 2 February 2022 the company secretary has been notified, in accordance with Chapter 5 of the Disclosure
Guidance and Transparency Rules sourcebook as issued by the Financial Conduct Authority, of the following interest
in 3% or more in the ordinary share capital of the company:

Harwood Capital LLP

Toscafund Asset Management LLP

Martin Gilbert

ICM Limited

Lombard Odier Asset Management (Europe) Limited

Richard Griffiths

Janus Henderson Group Plc

Peter McKellar

No. of shares

1,796,500

1,048,368

720,000

708,967

651,500

302,113

275,000

259,482

% of issued
share capital

21.32%

12.44%

8.55%

8.42%

7.73%

3.59%

3.26%

3.08%

PRINCIPAL ACTIVITIES
During the year the Company has effected a transition from being a fire and rescue provider to its new strategy
of developing an asset and wealth management business. The company has acquired majority stakes in two
businesses and immediately after the year end acquired a 30% stake in another. Accordingly the group’s activities
now involve fund management, high-growth thematics, and digital platforms. These are discussed in more detail in
the Chairman’s statement on pages 2 to 5 and the Business Review on pages 6 to 9.

AssetCo plc | Report and Financial Statements 2021 5. DIRECTORS’ REPORT CONTINUED

SHARE BUY-BACK
Following the successful conclusion of the litigation
against the Company’s former auditor, Grant Thornton,
the excess cash realised, amounting to approximately
£26.9 million, was returned to shareholders in December
2020 via a tender offer for 50% of the share capital in
issue at the time. The number of shares repurchased
and subsequently cancelled was 6,532,942 with
a nominal value of £653,294 (see note 24).

BUSINESS COMBINATIONS AND DISPOSALS
Business combinations during the year are discussed in
note 18.

POST BALANCE SHEET EVENTS
As mentioned in the Chairman’s statement there were
two post balance sheet events. These are set out in
more detail in note 31 Post Balance Sheet Events.

GOING CONCERN
The directors have considered the going concern
assumption of the company, AssetCo plc, by assessing
the operational and funding requirements of the Group.

As set out in the Chairman’s statement the board has
decided to pursue a new strategy of developing an
asset and wealth management business. The successful
conclusion of the claim against Grant Thornton has
generated cash resources and freed up management
time which, together with the appointment of two new
directors with considerable experience of asset and
wealth management, means the company is well placed
to make a success of this.

The directors have prepared financial projections
along with sensitivity analyses of reasonably
plausible alternative outcomes. The forecasts
demonstrate that the directors have a reasonable
expectation that the existing Group has adequate
financial resources to continue in operational
existence for the foreseeable future.

On 25 January 2022 the Company announced a
formal bid to acquire 94.15% of River and Mercantile
Asset Group Plc. As a result of its size, the Acquisition
constitutes a Reverse Takeover for AssetCo for the
purposes of the AIM Rules. In advance of the potential
Acquisition, AssetCo will be required to undertake a
re-admission process and to publish a re-admission
document and to seek the approval of AssetCo
Shareholders for the Acquisition at the AssetCo General

Meeting. The Acquisition will also be conditional on
the approval of AssetCo Shareholders to the granting
of authorities necessary for the issuance of the New
AssetCo Shares, such authorities to be put to the
AssetCo Shareholders at the AssetCo General Meeting.

STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.

Company law requires the directors to prepare
financial statements for each financial year. Under
that law the directors have prepared the group and
the company financial statements in accordance with
international accounting standards in conformity with
the requirements of the Companies Act 2006.

Under company law, directors must not approve the
financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of
the group and company and of the profit or loss of
the group for that period. In preparing the financial
statements, the directors are required to:

•

select suitable accounting policies and then apply
them consistently;
state whether applicable international accounting
standards in conformity with the requirements of the
Companies Act 2006 have been followed, subject
to any material departures disclosed and explained
in the financial statements;

• make judgements and accounting estimates that

are reasonable and prudent; and

• prepare the financial statements on the going

concern basis unless it is inappropriate to presume
that the group and company will continue in
business.

The directors are responsible for safeguarding the
assets of the group and company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.

The directors are also responsible for keeping adequate
accounting records that are sufficient to show and
explain the group’s and company’s transactions and
disclose with reasonable accuracy at any time the
financial position of the group and company and enable
them to ensure that the financial statements comply
with the Companies Act 2006.

AssetCo plc | Report and Financial Statements 2021The directors are responsible for the maintenance
and integrity of the company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.

DIRECTORS’ CONFIRMATIONS
In the case of each director in office at the date the
Directors’ Report is approved:

•

so far as the director is aware, there is no relevant
audit information of which the company’s auditors
are unaware; and
they have taken all the steps that they ought to have
taken as a director in order to make themselves
aware of any relevant audit information and to
establish that the company’s auditors are aware of
that information.

DIRECTORS’ LIABILITY INSURANCE
The Company has entered into deeds of indemnity for
the benefit of each director of the Company in respect
of liabilities to which they may become liable in their
capacity as director of the Company and any company
in the Group. Those indemnities are qualifying third
party indemnity provisions for the purposes of S. 234
of Companies Act 2006 and have been in force from
15 April 2021 up to date of approval of the financial
statements.

INDEPENDENT AUDITORS
In accordance with section 489(4) of the
Companies Act 2006, a resolution to reappoint
PricewaterhouseCoopers LLP will be proposed at the
annual general meeting.

CORPORATE GOVERNANCE
The Company’s statement of corporate governance
can be found on pages 18 to 21 of these financial
statements. The Corporate Governance Statement
forms part of this Report of the Directors and is
incorporated by cross-reference. The Board confirms
that it has complied with the requirements of the Quoted
Company Alliance Corporate Governance Code for
small and medium sized companies

5. DIRECTORS’ REPORT CONTINUED

ANNUAL GENERAL MEETING
The resolutions to be proposed at the forthcoming
Annual General Meeting are set out in the formal notice
of the meeting as set out on pages 71 to 77.

RECOMMENDATION
The Board considers the resolutions to be proposed
at the Annual General Meeting are in the best interests
of Company and it is unanimously recommended that
shareholders support these proposals as the Board
intends to do in respect of their own holdings.

By order of the Board

Stephen Murphy
Company Secretary

18 February 2022

Company Registration Number: 04966347

AssetCo plc | Report and Financial Statements 2021 6. CORPORATE GOVERNANCE REPORT

In accordance with AIM Rule 26, the Company chooses
to report against the Quoted Company Alliance
Corporate Governance Code for small and medium
sized companies (the "QCA Code").

DELEGATION OF AUTHORITY
The Board is responsible for setting strategy, purpose
and the direction of the Company. The Board has
delegated:

The following Report sets out the Company's
governance arrangements and goes on to describe how
we have complied with each of the ten principles in the
QCA Code.

•

GOVERNANCE FRAMEWORK
The Company, consistent with the early stages of
the implementation of its business strategy, has a flat
management structure.

The Board comprises three Executive Directors and
three Non-Executive Directors. The Board is responsible
for matters of strategy, performance, budgeting and
resources as well as setting standards of conduct and
accountability. The Board has delegated authority for
the day to day running of the business to the Chief
Executive Officer.

The Board considers Mark Butcher will be an
independent Director for the purposes of the QCA
Code and recognises that it does not currently comply
with the requirement to have at least two independent
Directors. The Board is continuing its search for another
independent non-executive Director.

All Directors are required to stand for re-election on
an annual basis at the Company's annual general
meeting in accordance with the Company's Articles
of Association.

The Chairman, in conjunction with the Executive
Directors and Company Secretary, sets the agenda
for each Board Meeting management information is
delivered ahead of each Meeting and the decisions of
the Board are formally minuted.

BOARD AND COMMITTEE ATTENDANCE
During the year, the Board held 10 scheduled
Meetings, which included Meetings to approve specific
transactions as well as Meetings to approve the
Company's full and half year results. All meetings were
attended by all board members.

to the Chief Executive Officer authority for the day to
day running of the business; and
specific authority (as set out in the terms of
reference of each committee) to the Audit,
Remuneration, Nominations and Disclosure
Committees (the "Committees"). The Committees
have the following remits:
–

–

The Audit Committee is comprised of Tudor
Davies (Chair), Christopher Mills and Mark
Butcher. The Audit Committee is focused on
the key areas of financial integrity, internal
controls and risk management. This includes:
review of the financial statements and
–
Annual Report;
consideration of the external audit report
and management representation letter;
going concern review;
review of the 2021 audit plan and audit
engagement letter;
review of the risk management and internal
control systems;
review of the interim results; and

–
– meetings with the auditors with and without

–
–

–

management present

The Audit Committee monitors the relationship
with the auditors, PwC LLP, to ensure that the
auditors’ independence and objectivity are
maintained. As part of its review the Committee
monitors the provision of non-audit services by
the external auditors.
The auditors prepare an audit plan for the
full-year financial statements. The audit plan
sets out the scope of the audit, areas of
special focus and audit timetable. This plan is
reviewed and agreed in advance by the Audit
Committee. Following the audit of the annual
financial statements, the auditors present their
findings to the Audit Committee for discussion.

AssetCo plc | Report and Financial Statements 2021

6. CORPORATE GOVERNANCE REPORT

–

Areas of significant risk and matters of audit
judgement are regularly discussed, and are
detailed in note 4; ‘Critical accounting estimates
and judgements’. External experts were
engaged for key areas of focus; such as the
identification and valuation of intangible assets
on acquisition, and valuation of the long-term
incentive plan, in the preparation of the 2021
financial statements.
During the year ended 30 September 2021 the
Audit Committee met twice;
the Remunerations Committee is tasked
with ensuring that Directors and senior
employees are provided with an appropriate
package of incentives and rewards that align
personal reward with increased shareholder
value over both the short and longer term.
The Remuneration Committee is comprised
of Christopher Mills (Chair), Tudor Davies
and Mark Butcher. During the year ended
30 September 2021 the Remuneration
Committee met twice;
the Nominations Committee is responsible for
reviewing the structure, size and composition
of the Board and identifying and nominating,
for the approval of the Board, candidates
to fill vacancies on the Board as and when
they arise. The Nominations Committee is
comprised of Mark Butcher (Chair), Christopher
Mills and Tudor Davies. During the year
ended 30 September 2021 the Nominations
Committee met once; and
the Disclosure Committee is a recently
established Committee formed to determine
whether information concerning the Company
or its shares constitutes inside information
which should be disclosed to the market to
include the timing of such disclosures. The
Disclosure Committee is comprised of Martin
Gilbert, Campbell Fleming and Nicholas
Heather, the Company's general counsel. The
Disclosure Committee is an ad hoc, recently
established Committee and has not met during
the year ended 30 September 2021.

The Committees are provided with sufficient resources
to discharge their duties, including access to external
advisers where required.

QCA CODE COMPLIANCE
The disclosures below describe in detail how we meet
or did not meet the principles in the QCA Code against
which the Company chooses to report its governance
arrangements. A formal statement on our compliance
with the QCA Code is set out in the Directors Report at
page 14.

1. Establish a strategy and business model which

promote the long term value for Shareholders
The principle activities at the Company and its
strategy are set out and explained in the Directors’
Report section on page 14 of this document.
2. Seek to understand and meet Shareholders

needs and expectations
The Company, through its Chairman, has regular
contact with its institutional Shareholders. The
Board supports the principle that the Annual
General Meeting will be used to communicate with
private Shareholders and will encourage them to
participate.
The restrictions imposed as a result of the
pandemic require the Annual General Meeting to be
held as a closed meeting. However Shareholders
have been offered the opportunity to raise any
questions in advance.
Shareholders can access corporate, regulatory,
news, share capital information on the Company's
website at www.assetco.com. Enquiries can be
directed to the Board via the corporate email
address: info@assetco.com.

3. Take into account wider stakeholder and social

responsibilities and their implications for long
term success
The Company is at an early stage in terms of the
implementation of its new strategy. As the Company
grows and develops its business it will develop a
new set of stakeholders (including its employees)
and it is mindful of the need for wider stakeholder
and social responsibilities to achieve long term
success.

The terms of reference for each of the Committee
is available on the Company's website at
www.assetco.com.

AssetCo plc | Report and Financial Statements 2021

6. CORPORATE GOVERNANCE REPORT CONTINUED

In this regard the Company has adopted a number
of policies (including modern slavery and anti-tax
avoidance policies) and these are available on
the Company's website at www.assetco.com. In
addition the Company has formally adopted policies
in respect of Environmental, Social and Governance
matters ("ESG") as explained below.

4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation
The Board considers regularly the risks relating to
the Company's activities. Details of the principal
risks facing the Company are set out in Part II
of the readmission document published by the
Company on 26 March 2021 (the "Readmission
Document") under the heading "Risk Factors". A
copy of the Readmission Document is available on
the Company's website at www.assetco.com.
Further details of the risks and uncertainties facing
the Company are set out in the Strategic Report on
page 12 of this document.

5. Maintain the Board as a well-functioning

balances team led by the Board
The composition of the Board is considered to be
appropriate in terms of the current development of
the Company's business strategy. Notwithstanding
this the Company continues its search for an
appropriately qualified independent non-executive
Director. There are four Board Committees. The
terms of reference for each is available on the
Company's website at www.assetco.com.

6. Ensure that between them the Directors have

the necessary up-to-date skills and capabilities
The Directors (biographical details in respect of
which are set out on pages 10 and 11 of this
document) have a wide range of qualifications and
expertise which is to be considered appropriate
in terms of the implementation of the Company's
strategy.

7. Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
It is the intention of the Board to put in place a
formal evaluation process for all Directors in line with
our new strategic focus.

8. Promote a corporate culture that is based on

ethical values and behaviours
The Board, in developing the Company through
implementation of its new strategy, will promote a
positive corporate culture, ideals and desired ethical
behaviours within the Company, and communicate
these across the business as its size increases.
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the Board
The Board is responsible for the Company's system
of internal control and reviewing its effectiveness.
The procedures for planning and monitoring the
operation and performance of the Company, as
well as its compliance with applicable law and
regulations, are set out in the Directors’ Report on
page 14 of this document.

10. Communicate how the Company is governed

and is performing by maintaining a dialogue with
Shareholders and other relevant stakeholders
The principal method of communicating the
Company's corporate governance process and
principles is the Annual Report which is being
sent directly to Shareholders and is available on
the Company's website at www.assetco.com.
The Annual General Meeting also provides an
opportunity for Shareholders to address corporate
governance matters.

INTERNAL CONTROL
The board is responsible for the company's system
of internal control and for reviewing its effectiveness.
However, such a system is designed to manage rather
than eliminate the risk of failure to achieve business
objectives and can provide only reasonable and not
absolute assurance against material misstatement or loss.

The directors review the internal control processes on a
regular basis.

The company has established procedures for
planning and monitoring the operational and financial
performance of all businesses in the company, as
well as their compliance with applicable laws and
regulations. These procedures include:

• clear responsibilities for financial controls and
the production of timely financial management
information;

AssetCo plc | Report and Financial Statements 2021
6. CORPORATE GOVERNANCE REPORT CONTINUED

•

the control of key financial risks through clearly laid
down authorisation levels and proper segregation of
accounting duties;
the review of business updates, cash flows and
cash balances by management and the board;

ENVIRONMENTAL SOCIAL AND GOVERNANCE
In pursuing its strategy the Company is committed to
a responsible business approach that delivers positive
outcomes and sustainable long term value to allow
stakeholders. In this regard the Company has developed
an Environmental Social and Governance Statement.

This ESG policy statement (or "ESG Policy")
applies to AssetCo plc ("AssetCo"). AssetCo
is the holding company whose mission is to
acquire, manage and operate asset and wealth
management activities and interests, together
with other related services (our "Mission").

In pursing our Mission we are committed to a
responsible business approach that delivers positive
outcomes and sustainable long term value to all our
stakeholders and particularly to our clients. At the heart
of this is our ESG Policy which is incorporated into all
our decision making processes.

In framing our ESG Policy we are, and will continue to
be, focused on our clients concerns and needs. We will
endeavour to engage with our clients to understand and
accommodate their ESG requirements in terms of the
services we provide.

Our ESG Policy is not static, it will evolve as our
business evolves and we will continually look to improve
our ESG Policy in the light of best market practice and
the expectations of our stakeholders.

ENVIRONMENTAL
We will strive to reduce the impact of our business
activities on the environment. This will include
reducing our energy, carbon, water and waste
footprint. In due course we intend to implement
systems to track all our major environmental
impacts so that we might access the effectiveness
of our policies and report to our stakeholders.

SOCIAL
We intend to be a responsible member of the
community and a force for positive change. We
will endeavour to contribute to the community
through the philanthropic and cultural partnerships
and encourage employee volunteering. Wherever
possible we will look to address critical social
issues – such as inclusivity, equal opportunity
and mental health and promote catalysts for
change such as the arts, sport and education.

GOVERNANCE
We intend, commensurate with the size of the AssetCo
business, to embrace high standards of integrity,
transparency and corporate governance. We will look to
foster a culture of inclusion, diversity (including gender
balance) and equal opportunity across our businesses.
We will treat our staff with integrity and respect. We are
a values led business and will look to attract, develop
and retain the best talent.

We intend to regularly engage with our investors and
to take heed of their views. We also intend to support
initiatives developed by appropriate regulators (including
the FCA) and to implement and maintain systems to
ensure compliance with all regulatory requirements.

MEMBERSHIP AND REPORTING
In pursuing our Mission we are at an early stage. In
due course, as we grow, we intend to bolster our ESG
agenda by supporting or adopting initiatives such as
the United Nations-backed Principles for Responsible
Investment and the UK Stewardship Code.

Likewise, in due course, we intend to implement annual
ESG reporting and other external communications to
evidence our commitment to our ESG Policies.

ACQUISITIONS AND SERVICE PROVIDERS
Our Mission is largely predicated by an acquisition
strategy. In terms of businesses acquired we will look
to ensure that they have or adopt policies and initiatives
which are consistent with our ESG Policy. Likewise we
will expect all significant service providers to AssetCo
and its businesses to have in place policies which are
consistent with our ESG Policy.

AssetCo plc | Report and Financial Statements 2021 7. INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ASSETCO PLC

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OUR AUDIT APPROACH
OVERVIEW
Audit scope
• We have performed full-scope audit procedures in

respect of the Company, AssetCo plc

• Our audit scope included specified audit procedures

in respect of the subsidiary, Rize ETF Limited

• Our audit procedures covered over 97% of
the Group's total assets for the year ended
30 September 2021

• All work has been performed by the group team.

Key audit matters
• Valuation of the long-term incentive plan ("LTIP")

(group and parent)

• Consolidation decisions, including the valuation of

intangible assets and goodwill on acquisition (group)

• Recoverability of Group goodwill and the

Company’s investment in subsidiaries (group and
parent)

• Estimation of current tax payable and expense in
relation to an uncertain tax position (group and
parent)

Materiality
• Overall group materiality: £596,000 (2020:
£336,000) based on 1% of total assets.

• Overall company materiality: £566,000 (2020:

£336,000) based on component allocation of group
materiality.

• Performance materiality: £447,000 (2020:

£252,000) (group) and £424,000 (2020: £252,000)
(company).

THE SCOPE OF OUR AUDIT
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.

OPINION
In our opinion, AssetCo plc’s group financial statements
and company financial statements (the “financial
statements”):

• give a true and fair view of the state of the group’s

and of the company’s affairs as at 30 September
2021 and of the group’s profit and the group’s and
company’s cash flows for the year then ended;
• have been properly prepared in accordance with
international accounting standards in conformity
with the requirements of the Companies Act 2006;
and

• have been prepared in accordance with the
requirements of the Companies Act 2006.

We have audited the financial statements, included
within the Annual report and financial statements (the
“Annual Report”), which comprise: Consolidated and
Company statement of financial position as at 30
September 2021; Consolidated income statement,
Consolidation statement of comprehensive income,
Consolidated and Company statement of cash flows,
and Consolidated and Company statement of changes
in equity for the year then ended; and the notes to the
financial statements, which include a description of the
significant accounting policies.

BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs (UK)”)
and applicable law. Our responsibilities under ISAs (UK)
are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our
report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis
for our opinion.

INDEPENDENCE
We remained independent of the group in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which
includes the FRC’s Ethical Standard, as applicable to
listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.

AssetCo plc | Report and Financial Statements 2021
7. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC

KEY AUDIT MATTERS
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the
audit of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of our procedures thereon, were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Valuation of the long-term incentive plan (“LTIP”), Consolidation decisions, including the valuation of intangible assets
and goodwill on acquisition, Recoverability of Group goodwill and the Company’s investment in subsidiaries and
Estimation of current tax payable and expense in relation to an uncertain tax position, are new key audit matters
this year. Accounting treatment of Grant Thornton settlement claim, and Impact of COVID-19, which were key audit
matters last year, are no longer included because the amounts recognised in the current year in respect of the
settlement claim are in accordance with the treatment concluded on in the prior year, the Group and Company has
continued to operate throughout the pandemic and Covid-19 is no longer considered a pervasive risk. Otherwise,
the key audit matters below are consistent with last year.

Key audit matter

How our audit addressed the key audit matter

Valuation of the long-term incentive plan (“LTIP”) (group and parent)

During the year, the Group and Company implemented a
Long Term Incentive Plan (“LTIP”) for senior management
and executive directors. The increase in the group’s
market value as calculated under the agreed formula
gives rise to a pool which, in the ordinary course of
events, is settled one third in cash within 60 days of the
year end, and two thirds in shares over a vesting period
of 5 years in equal annual instalments. For the 2021 LTIP
pool it has been agreed by the board that the initial one
third normally payable in cash will be equity-settled.

The awards of 993,315 deferred shares have been
accounted in accordance with IFRS 2 as equity-
settled share based payments, and the fair value has
been measured at the grant date of the shares, and
is recognised in equity in the share-based payment
reserve. Refer to note 24, Other reserves.

Management engaged with an independent expert to
value the share-based awards at the grant date. As the
awards were granted two days before the performance
period end date (30 September 2021), the experts were
able to determine the Company’s Volume-Weighted
Average Price (“VWAP”) for 18 out of the 20 dealing
days required to determine the Award value. Estimation
was therefore limited to the share price for the final
2 days. Refer to note 30, Deferred shares long-term
incentive plan.

We obtained management’s experts share-based
payment expense calculation and verified the
mathematical accuracy, and appropriate application
of the accounting standards. We consulted with our
technical experts and concurred with the methodology
applied and charge recognised in the Consolidation
income statement.

We obtained and reviewed the LTIP agreement, and
assessed the number of shares to be issued have been
calculated in accordance with the Rules. This has been
corroborated to the award letters to participants.

We used our internal valuation experts to review the
methodology and integrity of the calculation of fair value,
and key inputs used in determining the valuation in
accordance with the rules. We have corroborated key
inputs to supporting evidence.

We concur with the valuation approach
adopted by management’s experts for IFRS 2
purposes. We have evaluated the disclosures
included within the Annual report.

AssetCo plc | Report and Financial Statements 2021 7. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC CONTINUED

Key audit matter

How our audit addressed the key audit matter

Consolidation decisions, including the valuation of intangible assets and goodwill on acquisition (group)

The transformation of AssetCo into an asset wealth
management business in the current year included the
acquisition of a majority stake in 2 companies; 100%
holding in Saracen Fund Managers Limited, and a 68%
interest in Rize ETF Limited. The Directors assessed
the group to have control over these entities, and the
acquisition method of accounting has been applied to
account for the business combination by the group.
Refer to note 18, Business Combinations.

Judgement is applied by the Directors’ in the
determination of control of Rize ETF Limited under
IFRS 10. As detailed in note 4, Critical accounting
estimates and judgements, the Directors’ consider
the shareholder agreement in place confers
considerable control to the Group, and therefore
has been consolidated as a subsidiary.

The net assets acquired are to be measured at fair value,
including identifiable intangible assets. There is inherent
judgement applied in identifying the intangible assets on
acquisition, and the valuation includes key assumptions
in the forecast cash flows, such as discount rates and
profit margins. The amount of goodwill recognised is
dependent on the valuation of the intangible assets.
Refer to note 18, Business Combinations.

The Directors’ engaged an independent expert for the
purchase price allocation exercise. The intangible assets
(brands) recognised on acquisition have been disclosed
in note 16, Intangible assets.

Our procedures included;

• We obtained the Directors’ accounting paper

prepared to assess control, and challenged
AssetCo’s right to, and power to affect the variable
returns from the acquired entity. We corroborated
key terms to the supporting shareholder agreements
and Company’s articles. While we concur that there
are the appropriate indicators of control including the
ability to direct the Board, determination of control
remains a key judgement.

• We have evaluated the adequacy of

disclosures detailing these key judgements
applied by the Directors in note 4, Critical
accounting estimates and judgements.

• We have worked alongside our internal valuation

experts to assess the competency of management’s
experts, and to review the identification and valuation
analysis prepared to calculate the fair value of the
intangible assets used in the business combination
accounting. This included;
–

Assessed the appropriateness of the
methodology applied, and integrity of the
discounted cash-flow used to determine the fair
value of the intangibles assets in the business
combination. Corroborated cash flows to Board
approved forecasts;

– Challenged the key assumptions made by
management in determining the fair values,
in particular, the forecast EBITDA margin and
discount rates, and benchmarking of discount
rates; and
Assessed the Group’s disclosures regarding
the acquisition and estimation assumptions and
whether they had been disclosed appropriately.
We concur that the approach adopted is in accordance
with the accounting standards.

–

AssetCo plc | Report and Financial Statements 20217. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC CONTINUED

Key audit matter

How our audit addressed the key audit matter

Recoverability of Group goodwill and the Company’s investment in subsidiaries (group and parent)

Following the acquisitions in the year, £19.787m of
goodwill has been recognised in the consolidated
financial statements as at 30 September 2021.

The investment in subsidiaries included in the Company
statement of financial position as at 30 September 2021
is £25.194m, which includes £5.25m preference shares
invested immediately upon acquisition in Rize ETF.

Goodwill in the Group and the Company’s investment
in subsidiaries are significant, and the estimated
recoverable amount of these balances is subjective due
to the inherent uncertainty involved in forecasting and
discounting future cash flows.

The impairment reviews therefore include
significant estimates and judgements in respect
of future growth rates, cash flows and discount
rates. The sensitivity of these key assumptions
are detailed in note 16, Intangible assets.

We obtained the group’s cash flow forecasts supporting
its assessments and performed the following procedures;

• Assessed the methodology used by management in
accordance with IAS 36 ‘Impairment of assets’ and
tested the mathematical accuracy of the model;
• Agreed forecast cash flows to board approved
budgets, and evaluated and challenged key
assumptions within the cashflows and validated to
supporting documentation where appropriate. We
worked with our PwC Valuation experts to consider
key inputs such as the discount rate; and

• Performed sensitivity analysis including the effect of

reasonably possible reductions in forecast cash flows
to evaluated the impact on the carrying value of the
goodwill and investment in subsidiaries.

We have assessed the adequacy of the Group and
Company’s disclosures regarding the goodwill and
investment in subsidiaries, and the sensitivity of the
outcome of the impairment assessment to changes in
key assumptions used in the model. We concur with
management’s assessment that no impairment charge is
required in respect of goodwill and intangible assets.

Estimation of current tax payable and expense in relation to an uncertain tax position (group and parent)

The Group and Company’s current tax provision relates
to the Directors assessment of the amount of tax
payable on open positions where the liabilities remain
to be agreed with the relevant tax authorities. The
uncertain tax items relates to the Directors’ interpretation
of tax legislation applicable to key transactions that
have occurred in the year, specifically the award in the
settlement of the case against Grant Thornton on 2
October 2020 for £30.515m (£.4.957m of which was
reflected in the prior year).

The Directors’ recognise that due to the uncertainty
associated with such tax items, it is possible that,
on conclusion of open tax matters at a future
date, the final outcome may differ significantly.
A range of outcomes for additional or reduction
in tax liabilities are further disclosed in note 4,
Critical accounting estimates and judgements.

We have assessed the uncertain tax position
in accordance with IFRIC 23. We obtained
management’s tax paper, and challenged the
key judgements and application of tax legislation,
supported by our internal tax specialists. We have
reviewed the analysis prepared in the assessment
and confirmed the accuracy of the calculations.

We have assessed the effect of the uncertainty reflected
in the calculated current tax using the ‘most likely
amount’ method.

We have reviewed the disclosures to ensure the
appropriate risks and estimation uncertainty are
adequately described in note 4, Critical accounting
estimates and judgements.

AssetCo plc | Report and Financial Statements 2021 7. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC CONTINUED

HOW WE TAILORED THE AUDIT SCOPE
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the group and the company, the accounting
processes and controls, and the industry in which they operate.

As a result of the strategic change of AssetCo to building and operating an asset wealth management business,
majority equity stakes were acquired in two entities during the year. Consequently this is the first year consolidated
financial statements has been presented.

Saracen Fund Managers Limited is an active manager of listed equity portfolios, is FCA regulated and registered
in the UK. Rize ETF Limited is a provider of thematic investment strategies via Exchange Traded Funds and is
registered in the UK. The acquisitions completed in July 2021, and therefore the performance of the two entities
have had a limited impact to the overall Group profit for the year.

AssetCo plc is assessed as a financially significant component of the Group given the significant total assets
value, and a full-scope audit of this component has been performed. Our audit scope also included specified audit
procedures in respect of Rize ETF Limited , where we designed audit procedures to gain coverage over certain
financial statement line items. Desktop review procedures were performed on Saracen Fund Managers Limited.

Our audit procedures covered over 97% of the Group’s total assets for the year ended 30 September 2021. All
procedures have been performed by the group engagement team.

MATERIALITY
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – group

Financial statements – company

Overall materiality £596,000 (2020: £336,000).

£566,000 (2020: £336,000).

How we
determined it

Rationale for
benchmark
applied

1% of total assets

Component allocation of group materiality

Based on the benchmarks used in
the Annual Report, total assets are
considered as the primary measure used
by the shareholders in assessing the
performance of the Company, and is a
generally accepted auditing benchmark.

Since the materiality we would have
employed to this entity on a standalone
basis was in excess of the component
allocation, materiality was capped at the
component materiality allocation.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was £566,000.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality
in determining the scope of our audit and the nature and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75%
(2020: 75%) of overall materiality, amounting to £447,000 (2020: £252,000) for the group financial statements and
£424,000 (2020: £252,000) for the company financial statements.

AssetCo plc | Report and Financial Statements 20217. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC CONTINUED

In determining the performance materiality, we
considered a number of factors – the history of
misstatements, risk assessment and aggregation risk
and the effectiveness of controls – and concluded that
an amount at the upper end of our normal range was
appropriate.

We agreed with those charged with governance that we
would report to them misstatements identified during
our audit above £29,800 (group audit) (2020: £16,800)
and £28,300 (company audit) (2020: £16,800) as well
as misstatements below those amounts that, in our
view, warranted reporting for qualitative reasons.

CONCLUSIONS RELATING TO GOING CONCERN
Our evaluation of the directors’ assessment of the
group’s and the company’s ability to continue to adopt
the going concern basis of accounting included:

• Verifying the integrity and mathematical accuracy of
management’s model as well as agreeing underlying
cash flow projections to management approved
forecasts.

• Evaluating and challenging the reasonableness of
the key assumptions in management’s model,and
corroborating to source documents where
applicable

• Evaluating the sensitivity analysis that takes account

of severe, but plausible downside scenarios.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group’s and the company’s
ability to continue as a going concern for a period of at
least twelve months from when the financial statements
are authorised for issue.

In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.

However, because not all future events or conditions
can be predicted, this conclusion is not a guarantee as
to the group’s and the company’s ability to continue as
a going concern.

Our responsibilities and the responsibilities of the
directors with respect to going concern are described in
the relevant sections of this report.

REPORTING ON OTHER INFORMATION
The other information comprises all of the information
in the Annual Report other than the financial statements
and our auditors’ report thereon. The directors are
responsible for the other information. Our opinion
on the financial statements does not cover the other
information and, accordingly, we do not express an
audit opinion or, except to the extent otherwise explicitly
stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information
is materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If we identify
an apparent material inconsistency or material
misstatement, we are required to perform procedures
to conclude whether there is a material misstatement
of the financial statements or a material misstatement
of the other information. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report based on
these responsibilities.

With respect to the Strategic report and Directors’
report, we also considered whether the disclosures
required by the UK Companies Act 2006 have
been included.

Based on our work undertaken in the course of the
audit, the Companies Act 2006 requires us also to
report certain opinions and matters as described below.

STRATEGIC REPORT AND DIRECTORS’ REPORT
In our opinion, based on the work undertaken in
the course of the audit, the information given in the
Strategic report and Directors’ report for the year ended
30 September 2021 is consistent with the financial
statements and has been prepared in accordance with
applicable legal requirements.

In light of the knowledge and understanding of
the group and company and their environment
obtained in the course of the audit, we did
not identify any material misstatements in the
Strategic report and Directors’ report.

AssetCo plc | Report and Financial Statements 2021 7. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC CONTINUED

RESPONSIBILITIES FOR THE FINANCIAL
STATEMENTS AND THE AUDIT
RESPONSIBILITIES OF THE DIRECTORS FOR THE
FINANCIAL STATEMENTS
As explained more fully in the Statement of directors’
responsibilities, the directors are responsible for the
preparation of the financial statements in accordance
with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also
responsible for such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the directors
are responsible for assessing the group’s and the
company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting unless the directors either intend to liquidate
the group or the company or to cease operations, or
have no realistic alternative but to do so.

AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
financial statements.

Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud, is detailed below.

Based on our understanding of the group and industry,
we identified that the principal risks of non-compliance
with laws and regulations related to regulatory
compliance matters, AIM rules and employment
legislation, and we considered the extent to which
non-compliance might have a material effect on the
financial statements. We also considered those laws
and regulations that have a direct impact on the financial
statements such as tax legislation and Companies Act
2006. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls),
and determined that the principal risks were related to
posting of inappropriate journal entries to manipulate
financial results and potential management bias in
accounting estimates. Audit procedures performed by
the engagement team included:

• Review of correspondence with the Group’s

regulators, including the Financial Conduct Authority
(‘FCA’) for relevant subsidiaries;

• Enquiry with management around known or

suspected instances of non-compliance with laws
and regulations and fraud;

• Review of minutes of meetings of those charged

with governance;

• Challenging assumptions made by management

•

in its significant accounting estimates, in particular
in relation to the uncertain tax position, business
combination accounting, impairment assessment,
valuation of share-based awards and establishing
control for consolidation decisions; and
Identifying and testing the validity of journal entries,
in particular any journal entries posted with unusual
account combinations and consolidation journals.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations
that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of
not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or
through collusion.

AssetCo plc | Report and Financial Statements 20217. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASSETCO PLC CONTINUED

Our audit testing might include testing complete
populations of certain transactions and balances,
possibly using data auditing techniques. However, it
typically involves selecting a limited number of items for
testing, rather than testing complete populations. We will
often seek to target particular items for testing based on
their size or risk characteristics. In other cases, we will
use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.

A further description of our responsibilities for the audit
of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditors’ report.

USE OF THIS REPORT
This report, including the opinions, has been prepared
for and only for the company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this
report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.

OTHER REQUIRED REPORTING
COMPANIES ACT 2006 EXCEPTION REPORTING
Under the Companies Act 2006 we are required to
report to you if, in our opinion:

• we have not obtained all the information and
explanations we require for our audit; or

• adequate accounting records have not been kept
by the company, or returns adequate for our audit
have not been received from branches not visited
by us; or

• certain disclosures of directors’ remuneration

•

specified by law are not made; or
the company financial statements are not in
agreement with the accounting records and returns.

We have no exceptions to report arising from this
responsibility.

Jason Clarke
Senior Statutory Auditor
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cardiff

18 February 2022

AssetCo plc | Report and Financial Statements 2021 8. CONSOLIDATED

INCOME STATEMENT

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Continuing operations

Revenue

Cost of sales

Gross (loss)/profit

Other income

Administrative expenses

Operating profit

Investment income

Finance costs

Profit before tax

Income tax expense

Profit for the year

Profit/(loss) attributable to:

Owners of the parent

Non-controlling interest

Note

2021
£000

408

(536)

(128)

22,388

(7,967)

14,293

1,844

(8)

16,129

(1,442)

14,687

14,796

(109)

14,687

2020
£000

–

4,597

(1,192)

3,405

(62)

3,361

–

3,361

–

3,361

Earnings per ordinary share attributable to the owners of the
parent during the year

Basic – pence

Diluted – pence

180.57

161.05

27.52

AssetCo plc | Report and Financial Statements 2021
9.

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Profit for the year

Other comprehensive (expense)

Items that may be reclassified to profit or loss

Exchange differences on translating foreign operations

Other comprehensive (expense), net of tax

Total comprehensive income for the year

Attributable to:

Owners of the parent

Non-controlling interests

Total comprehensive income for the year

Note

2021
£000

14,687

2020
£000

3,361

(7)

(871)

14,680

2,490

14,789

(109)

14,680

2,490

–

2,490

AssetCo plc | Report and Financial Statements 2021 10. CONSOLIDATED AND COMPANY’S

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2021

Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiaries
Deferred tax assets
Total non-current assets
Current assets
Trade and other receivables
Financial assets at fair value through profit and loss
Current income tax receivable
Cash and cash equivalents
Cash held in respect of bonds
Total current assets
Total assets
Liabilities
Non-current liabilities
Deferred tax liability
Total non-current liabilities
Current liabilities
Trade and other payables
Current income tax liabilities
Total current liabilities
Total liabilities
Shareholders’ equity
Share capital
Share premium
Capital redemption reserve
Merger reserve
Other reserve
Retained earnings

Non-controlling interest
Total equity
Total equity and liabilities

Group
2021
£000

Group
2020
£000

Company
2021
£000

Company
2020
£000

Note

15
16
17
25

19
20

21
21

24
24
24
24
24

16
20,067
–
–
20,083

607
12,000
3
26,902
–
39,512
59,595

49
49

1,972
1,437
3,409
3,458

843
27,770
653
2,762
5,496
18,892
56,416
(279)
56,137
59,595

–
–
–
–
–

4,683
–
–
27,860
1,058
33,601
33,601

–
–

1,256
–
1,256
1,256

1,221
–
–
–
–
31,124
32,345
–
32,345
33,601

–
–
25,194
–
25,194

108
12,000
–
22,226
–
34,334
59,528

–
–

1,466
1,437
2,903
2,903

843
27,770
653
2,762
5,496
19,101
56,625
–
56,625
59,528

–
–
–
–
–

4,683
–
–
27,860
1,058
33,601
33,601

–
–

1,256
–
1,256
1,256

1,221
–
–
–
–
31,124
32,345
–
32,345
33,601

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
Company income statement. The profit of the Company for the year was £15,005,000. (2020: £3,361,000).

The notes on pages 36 to 70 are an integral part of these consolidated financial statements. The financial
statements were authorised for issue by the board of directors on 18 February 2022 and were signed on its behalf
by Campbell Fleming.

AssetCo plc

Registered number: 04966347

AssetCo plc | Report and Financial Statements 202111. CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Share
capital
£000

Share
premium
£000

Capital
redemption
reserve
£000

Merger
reserve
£000

Other
reserve
£000

Retained
earnings
£000

Non-
controlling
interest
£000

Total
£000

Total
equity
£000

Balance at
1 October 2019

Profit for the year
Other comprehensive
expense:

Exchange differences
on translation

Total comprehensive
income for the year

Capital reduction
(see note 24)

Balance at
30 September 2020

Profit for the year
Other comprehensive
expense:

Exchange differences
on translation

Total comprehensive
income for the year

Shares issued for cash
(note 24)

Costs of share issue
(note 24)

25,474 64,941

–

(24,253) (64,941)

1,221

–

173 24,840

–

(515)

Share buy-back (note 24)

(653)

Costs of share buy-back
(note 24)

Shares issued on
acquisition (note 18)

Reserve for share-based
payments

– LTIP (note 24)

– Success fee (note 6)

Non-controlling interest
acquired (note 18)

Balance at
30 September 2021

–

3,445

–

2,762

–

653

–

– (60,560) 29,855
3,361

3,361

–

(871))

(871)

2,490

89,194

–

31,124

32,345

–

29,855

3,361

(871)

2,490

–

32,345

14,796

(109) 14,687

(7))

(7)

–

(7)

14,789

(109) 14,680

25,013

–

25,013

(515)

– (26,850)

(26,850)

(171))

(171)

2,779

5,496

3.530

–

5,496

–

(515)

–
– (26,850)

–

(171)

2,779

5,496

3,530

–

(170)

843 27,770

653

2,762

5,496

18,892

56,416

(279) 56,137

AssetCo plc | Report and Financial Statements 2021 12. COMPANY STATEMENT OF

CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Share
capital
£000

Share
Premium
£000

Capital
redemption
reserve
£000

Merger
reserve
£000

Other
reserve
£000

Balance at 1 October 2019

25,474

64,941

Profit for the year
Other comprehensive
expense:

Exchange differences on
translation

Total comprehensive income
for the year

–

Capital reduction (see note 24)

(24,253)

(64,941)

Balance at 30 September 2020

1,221

Profit for the year
Other comprehensive
expense:

Exchange differences
on translation

Total comprehensive income
for the year

Shares issued for cash
(note 24)

Costs of share issue (note 24)

Share buy-back (note 24)

Costs of share buy-back
(note 24)

Shares issued on acquisition
(note 24)

Share-based payments

– LTIP (note 24)

– Success fee (note 6)

–

173

24,840

–

(653)

–

(515)

–

3,445

–

653

–

2,762

–

5,496

–

Profit
and loss
account
£000

(60,560)

3,361

Total
Equity
£000

29,855

3,361

(871)

2,490

89,194

31,124

15,005

2,490

–

32,345

15,005

(7)

14,998

–

25,013

(515)

(26,850)

(171)

–

2,779

5,496

3,530

Balance at 30 September 2021

843

27,770

653

2,762

5,496

19,101

56,625

AssetCo plc | Report and Financial Statements 202113. CONSOLIDATED AND COMPANY’S
STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

Cash flows from operating activities

Cash inflow from operations

Cash released in respect of bonds

Finance costs

Net cash inflow from operating activities

Cash flows from investing activities

Payments for acquisition of subsidiaries, net of
cash acquired

Dividends received from financial assets held at
fair value

Finance income

Purchase of property, plant and equipment

Purchase of intangibles

Net cash (outflow)/inflow from investing
activities

Cash flows from financing activities

Shares issued for cash

Costs of share issue

Payments for shares bought back

Buy-back transaction costs

Net cash consumed by financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of year

Exchange differences on translation

Group
2021
£000

Group
2020
£000

Company
2021
£000

Company
2020
£000

Notes

16,755

1,104

(8)

8,807

2,270

(62)

18,025

1,104

(8)

8,807

2,270

(62)

17,851

11,015

19,121

11,015

(16,460)

194

–

(8)

(1)

(16,275)

25,013

(515)

(26,850)

(171)

(2,523)

(947)

27,860

(11)

–

11,033

17,101

(274)

(22,415)

194

–

(22,221)

25,013

(515)

(26,850)

(171)

(2,523)

(5,623)

27,860

(11)

–

11,033

17,101

(274)

Cash and cash equivalents at end of year

26,902

27,860

22,226

27,860

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL

STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2021

1. LEGAL STATUS AND ACTIVITIES
AssetCo Plc (“AssetCo” or the “Company”) is a public limited company limited by shares, and incorporated and
domiciled in England and Wales. The address of its registered office is Singleton Court Business Park, Wonastow
Road, Monmouth, Monmouthshire, NP25 5JA. The Company operates from an administrative office in the UK
as well as a site in UAE. In February 2021 the Company announced its intention to change strategy to focus on
developing an asset and wealth management business. Following the successful re-admission of the AssetCo’s
shares to AIM in April 2021 the Company has acquired two subsidiaries involved in these activities. Accordingly
these are the first set of consolidated financial statements for AssetCo plc since the change in strategy.

AssetCo shares are listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange.

The financial statements have been presented in sterling to the nearest thousand pounds (£000) except where
otherwise indicated.

These financial statements were authorised for issue by the board of directors on 18 February 2022.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements, which have
been applied consistently with those applied in the previous year, are set out below.

2.1 BASIS OF PREPARATION
The financial statements comply with AIM Rules and have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 (“IFRS”) and the applicable
legal requirements of the Companies Act 2006. The financial statements are prepared using the historical cost
convention modified by revaluation of financial assets and financial liabilities held at fair value through profit and loss.
The accounting policies which follow set out those policies which apply in preparing the financial statements for the
year ended 30 September 2021.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to make estimates and assumptions that affect the
amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenue
and expenses during the year. The nature of estimation means the actual outcomes may differ from the estimates.
Further details on the critical accounting estimates used and judgements made in preparing these financial
statements can be found in note 4.

NEW AND AMENDED STANDARDS ADOPTED BY THE COMPANY
The Group has applied the following standards and amendments for the first time for their annual reporting period
commencing 1 October 2020:

• Definition of a Business – Amendments to IFRS 3; and,
• Revised Conceptual Framework for Financial Reporting.

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not
expected to significantly affect the current or future periods.

NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Certain new accounting standards and interpretations have been published that are not mandatory for
30 September 2021 reporting periods and have not been early adopted by the company. These standards are
not expected to have a material impact on the entity in the current or future reporting periods an on foreseeable
future transactions.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
GOING CONCERN
The directors have considered the going concern assumption of the company, AssetCo plc, by assessing the
operational and funding requirements of the Group.

As set out in the Chairman’s statement the board has decided to pursue a new strategy of developing an asset
and wealth management business. The successful conclusion of the claim against Grant Thornton has generated
cash resources and freed up management time which, together with the appointment of two new directors with
considerable experience of asset and wealth management, means the company is well placed to make success
of this.

The directors have prepared financial projections along with sensitivity analyses of reasonably plausible alternative
outcomes. The forecasts demonstrate that the directors have a reasonable expectation that the existing Group has
adequate financial resources to continue in operational existence for the foreseeable future.

On 25 January 2022 the Company announced a formal bid to acquire 94.15% of River and Mercantile Asset
Management Plc. As a result of its size, the Acquisition constitutes a Reverse Takeover for AssetCo for the purposes
of the AIM Rules. In advance of the potential Acquisition, AssetCo will be required to undertake a re-admission
process and to publish a re-admission document and to seek the approval of AssetCo Shareholders for the
Acquisition at the AssetCo General Meeting. The Acquisition will also be conditional on the approval of AssetCo
Shareholders to the granting of authorities necessary for the issuance of the New AssetCo Shares, such authorities
to be put to the AssetCo Shareholders at the AssetCo General Meeting.

2.2 PRINCIPLES OF CONSOLIDATION AND EQUITY ACCOUNTING
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls
an entity where the group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that
control ceases.

The acquisition method of accounting is used to account for business combinations by the group (note 18).

Inter-company transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.

CHANGES IN OWNERSHIP INTERESTS
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in a separate reserve within equity attributable to owners of AssetCo plc.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
2.3 REVENUE RECOGNITION
IFRS 15 specifies the requirements that an entity must apply in order to measure and recognise revenue and its
related cash flows. The core principle of the standard is that an entity should recognise revenue at an amount that
reflects the consideration to which the entity expects to be entitled in exchange for transferring promised goods or
services to a customer.

The standard includes a five-step model for recognising revenue as follows: Identifying the contract with the
customer; identifying the relevant performance obligations of the contract; determining the amount of consideration
to be received under the contract; allocating the consideration to the relevant performance obligation; and
accounting for the revenue as the performance obligations are satisfied.

The Group’s primary source of income is made up as follows:

MANAGEMENT FEES
Gross management fees from investment management activities. These fees are generally based on an agreed
percentage, as per the management contract, of the AuM and are recognised in the same period in which it is
provided. Under the requirements of IFRS 15 revenue is presented gross with rebates and commission presented in
cost of sales.

Commission includes fees based on a set percentage of certain flows into our funds and are recognised on receipt.

MARKETING FEES
Fees from marketing thematic ETFs. These marketing fees are generally based on an agreed percentage, as per the
contract, of the AuM and are recognised in the same period in which it is provided.

For all revenue streams, the Group acts as principal and therefore recognises revenue gross with any related
expenses presented in cost of sales.

The Group currently has two segments, Active Specialists and High-growth Thematics. Whilst revenue is generated
in both segments with regard to AuM in the Active Specialists segment the assets are managed by our business. In
High-growth Thematics we do not take part in the management as our focus is on providing clients with access to
the funds in particular themed sectors.

2.4 FOREIGN CURRENCY TRANSLATION
a) Functional and presentation currency
Items included in the financial statements of each of the company’s businesses are measured using the currency of
the primary economic environment in which the entity operates (“the functional currency”). The financial statements
are presented in sterling (£), which is the company’s functional and presentation currency.

There has been no change in the company’s functional or presentation currency during the year under review.

b) Foreign operations translation
The financial statements are prepared in sterling. Income statements of foreign operations are translated into sterling
at the average exchange rates for the year and balance sheets are translated into sterling at the exchange rate
ruling on the balance sheet date. Foreign exchange gains or losses resulting from such translation are recognised
through equity.

c) Other transactions and balances
Other foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies, other than those held in foreign operations, are recognised in the income statement.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
2.5 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the board of directors.

2.6 PROPERTY, PLANT AND EQUIPMENT
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying amount of any replaced parts is derecognised. All other
repairs and maintenance are charged to the income statement during the financial year in which they are incurred.

Depreciation on assets is calculated using the straight-line method to write down their cost to their residual values
over their estimated useful lives as follows:

Fixtures and fittings
Computer equipment

3 – 5 years
5 years

The residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within operating profit in the income statement.

2.7 INTANGIBLE ASSETS
(i) Goodwill
Goodwill is measured as described in note 2.13 Business Combinations. Goodwill on acquisitions of subsidiaries is
included in intangible assets. Goodwill is not amortised but it is tested for impairment annually, or more frequently
if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to
the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which
goodwill is monitored for internal management purposes, being the operating segments (note 5).

(ii) Brands
Separately acquired brands are shown at historical cost. Brands acquired in a business combination are recognised
at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less
accumulated amortisation and impairment losses.

Amortisation on assets is calculated using the straight-line method to write down their cost to their residual values
over their estimated useful lives over 5 – 10 years.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(iii) Website development
Costs associated with maintaining software programmes are recognised as an expense as incurred.

Development costs payable to third parties that are directly attributable to the design and testing of new features
of websites used by Group companies are capitalised. No internal costs in relation to website development are
capitalised

Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is
ready for use.

Amortisation on website development costs is calculated using the straight-line method to write down their cost to
their residual values over their estimated useful lives over a maximum of 10 years.

2.8 FINANCIAL INSTRUMENTS
a) Financial assets
Investments and other financial assets

(i) Classification
The group classifies its financial assets in the following measurement categories:

•
•

those to be measured subsequently at fair value (either through OCI or through profit or loss); and
those to be measured at amortised cost.

The classification depends on the company’s business model for managing the financial assets and the contractual
terms of the cash flows.

For assets measured at fair value, gains and losses will be recorded either in profit or loss or in OCI.

For investments in equity instruments that are not held for trading, this will depend on whether the group has made
an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).

(ii) Recognition and de-recognition
Regular way purchases and sales of financial assets are recognised on trade date being the date on which the
group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and the group has transferred substantially all
the risks and rewards of ownership.

(iii) Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Equity instruments
The group subsequently measures all equity investments at fair value. Where the group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of
fair value gains and losses to profit or loss following the de-recognition of the investment. Dividends from such
investments continue to be recognised in profit or loss as investment income when the group’s right to receive
payments is established.

Changes in the fair value of financial assets at FVPL are recognised in investment income in the statement of profit
or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.

The group has applied the IFRS 9 simplified approach to measuring expected credit losses for trade receivables.
Under this approach a provision is made for lifetime expected credit losses for the trade receivable. For calculation
of expected credit losses the trade receivables are grouped based on the number of days past due. Expected credit
losses on trade receivables that are not past due are primarily based on actual credit losses from recent years.

Cash held in respect of bonds
Cash held in respect of bonds includes cash on deposit with banks held by them as collateral against performance
and warranty bonds.

Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the balance sheet.

b) Financial liabilities
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another
entity or to exchange financial assets or financial liabilities with another entity under conditions that are potentially
unfavourable to the company.

An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. Financial liabilities are classified as such in the balance sheet.

Finance costs and gains or losses relating to financial liabilities are included in the income statement. Finance costs
are calculated so as to produce a constant rate of return on the outstanding liability. Where the contractual terms
of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity
instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method. Trade payables represent amounts owed to suppliers for professional services, utilities, office
supplies and any other goods provided to the Group.

2.9 EQUITY
Issued share capital
Ordinary shares are classified as equity.

Costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from
the proceeds.

Share premium
The share premium account represents the excess over nominal value of the fair value of consideration received for
equity shares, net of expenses of the share issue.

Purchase of own shares
Where any group company purchases the company’s equity instruments (for example, as the result of a share buy-
back), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted
from equity attributable to the owners of AssetCo plc and the shares are cancelled with the relevant amount
transferred to a capital redemption reserve.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
2.10 DIVIDENDS
Dividends payable are recognised as a liability in the year in which they are authorised. An interim dividend is
recognised when it is paid and a final dividend is recognised when it has been approved by shareholders at the
annual general meeting.

Dividends receivable are recognised on the date given by the investee company as the ex- dividend date.

2.11 EARNINGS PER SHARE
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:

•

the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary
shares;

• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus

elements in ordinary shares issued during the year and excluding treasury shares

(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

•

the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares;
and
the weighted average number of additional ordinary shares that would have been outstanding, assuming the
conversion of all dilutive potential ordinary shares.

2.12 LEASES
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:

• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the

commencement date;

• Amounts expected to be payable by the company under residual value guarantees;
• The exercise price of a purchase option if the company is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the company exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.

Right-of-use assets are measured at cost comprising the following:

• The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs; and
• Restoration costs.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a
straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less.

The only leasing activities undertaken by the company are rental of office buildings in UK and UAE, together with
leasing of cars for employees in UAE all of which have a lease term of less than 12 months, and therefore the short-
term lease exemption has been applied.

2.13 BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:

fair values of the assets transferred;
liabilities incurred to the former owners of the acquired business;

•
•
• equity interests issued by the group;
•
•

fair value of any asset or liability resulting from a contingent consideration arrangement; and
fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The group recognises any non-
controlling interest in the acquired entity, on an acquisition-by-acquisition basis, either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the:

• consideration transferred;
• amount of any non-controlling interest in the acquired entity; and
• acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net
identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a
bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an independent financier under comparable
terms and conditions.

Contingent consideration is classified either as equity or as a financial liability. Amounts classified as a financial
liability are subsequently re-measured to fair value, with changes in fair value recognised in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is re-measured to fair value at the acquisition date. Any gains or losses arising from
such re-measurement are recognised in profit or loss.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
2.14 INCOME TAXES
The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based
on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the company and its subsidiaries and associates operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will
accept an uncertain tax treatment. The group measures its tax balances either based on the most likely amount or the
expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects neither accounting nor taxable profit nor loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and
liabilities and where the deferred tax balances relate to the same taxation authority.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity respectively, that future taxable profit will be available against which the temporary
differences can be utilised.

2.15 EMPLOYEE BENEFITS
Deferred shares
The Group operates a Long term Incentive Plan (“LTIP”) which seeks to align the interests of shareholders and senior
management by focusing on the increase in market value of the group’s shares. The increase in the group’s market
value as calculated under the agreed formula gives rise to a pool which, in the ordinary course of events, is settled
one third in cash within 60 days of the year end, and two thirds in shares over a vesting period of 5 years in equal
annual instalments. For the 2021 LTIP pool it has been agreed by the board that the initial one third normally payable
in cash will be equity-settled.

The fair value of deferred shares granted to employees for nil consideration under the LTIP is recognised as an
expense over the relevant service period, being the year to which the bonus relates and the vesting period of the
shares. The fair value is measured at the grant date of the shares and is recognised in equity in the share-based
payment reserve. The number of shares expected to vest is estimated based on the non-market vesting conditions.
The estimates are revised at the end of each reporting period, and adjustments are recognised in profit or loss and
the share-based payment reserve. When shares vest employers’ national insurance is payable. A liability for the
relevant amount of employers’ national insurance is recognised within other payables in the period to which the
vesting equities relate.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Where shares are forfeited due to a failure by the employee to satisfy the service conditions, any expenses
previously recognised in relation to such shares are reversed with effect from the date of the forfeiture.

Pension contributions – defined contribution scheme
For defined contribution schemes, the Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The company has no further payment obligations
once the contributions have been paid. Contributions to defined contribution schemes are recognised in the income
statement during the year in which they become payable.

Termination benefits
Termination benefits are payable when an employment is terminated by the Group before the normal retirement
date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group
recognises termination benefits when it is demonstrably committed to either terminating the employment of current
employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as
a result of acceptance of an offer of voluntary redundancy. Benefits falling due more than twelve months after the
balance sheet date are discounted to their present value.

2.16 ACCRUED INCOME
Material income earned from, but not yet invoiced to, customers in the financial year is included within prepayments
and accrued income where receipt of such income is virtually certain.

2.17 DEFERRED INCOME
Deferred income arises when cash from customers is received in advance of the year in which the company is
contractually obliged to provide its service. Such income is held within accruals and deferred income and only
released to the income statement when the company has met its related obligations.

2.18 CONTINGENT LIABILITIES
Contingent liabilities reflect the maximum potential liability on performance and warranty bonds issued in respect of
contracted performance obligations and warranties given to customers under contracts for the provision goods and
services. Since the year end the company has been released from any liability by its customer.

3 FINANCIAL RISK MANAGEMENT
3.1 FINANCIAL RISK FACTORS
The risks of the business are measured and monitored continuously by the Board which has in place procedures
and policies covering specific areas namely credit, market and liquidity risk. We set out below how we approach
each area.

a) Credit risk
Credit risk is the risk that a counterparty defaults on their contractual obligations which may result in financial loss
to the Group. The carrying amount of financial assets at fair value recorded in the financial statements represents
the Group’s maximum exposure to credit risk. The Group holds no collateral as security against any financial asset.
Credit risk arises principally from the Group’s fee receivables, other receivables and cash balances. The banks with
whom the Group deposits cash and cash equivalent balances are monitored, including their credit ratings. The
credit risk is limited as balances are held with reputable banks with credit ratings of A and above, as disclosed in
note 21.

The Group manages its credit risk through monitoring the aging of receivables and the credit quality of the
counterparties with which it does business. The ageing of these is provided in note 19.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

3 FINANCIAL RISK MANAGEMENT CONTINUED
b) Market risk
Pricing risk
Pricing risk arises where the fair value or future cash flows of financial instruments will fluctuate because of changes
in market prices other than those from interest rate risk or currency risk. The Group is at an early stage in its
development of an Asset and Wealth Management business and the current exposure to pricing risk is immaterial.

Currency risk
The company transacts principally in sterling. The company’s exposure to currency risk is detailed in note 23.

In relation to translation risk, the Group’s current policy is not to hedge the net asset values of the overseas
investments although, where appropriate and cost effective facilities are available, local borrowings are utilised to
reduce the translation risk.

Cash flow interest rate risk
The Group’s policy on managing interest rate risk is subject to regular monitoring of the effect of potential changes
in interest rates on its interest cost with a view to taking suitable actions should exposure reach certain levels. The
Group may seek to limit its exposure to fluctuating interest rates by keeping a significant proportion of the Group’s
cash or borrowings at fixed interest rates.

Financial assets
The company holds its surplus funds in short-term bank deposits.

Financial liabilities
The Group has no material cash flow interest rate risk as it has no financial liabilities that attract interest. Should this
situation change then the Group may manage the risk by using floating or fixed interest rate swaps.

Other price risk
Other price risks, such as changes in the fair value of financial instruments being caused by movements in equity
prices, are monitored regularly. See note 20 for further information.

c) Liquidity risk
Prudent liquidity management implies maintaining sufficient cash and the availability of funding through an adequate
amount of committed credit facilities. The Group maintains adequate bank balances to fund its operations. See
note 23 for analysis of the Group’s financial liabilities into relevant maturity groupings based on the remaining period
at the year-end date to the contractual maturity date.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

3 FINANCIAL RISK MANAGEMENT CONTINUED
3.2 CAPITAL RISK MANAGEMENT
The Group considers its capital to comprise:

Issued share capital

Share premium account

Capital redemption reserve

Merger reserve

Share-based payments reserve

Accumulated profits

Non-controlling interest

Total equity

Cash and cash equivalents

Cash held in respect of bonds

Total capital

2021
£000

843

27,770

653

2,762

5,496

18,892

56,416

(279)

56,137

(26,902)

–

(26,902)

29,235

2020
£000

1,221

–

31,124

32,345

–

32,345

(27,860)

(1,058)

(28,918)

3,427

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital. The Group is not subject to externally impaired capital requirements.

The Group owns subsidiary companies which are regulated by the Financial Conduct Authority (“FCA”) and these
businesses are subject to regulatory capital thresholds. Internal compliance departments in these businesses
regularly monitor and report to FCA to ensure they comply with capital thresholds which apply to them.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. This
note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which
are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong.

a) Estimates
Acquisition accounting and valuation of goodwill and other intangible assets – Determining the valuation of goodwill
and intangible assets arising from a business combination under IFRS 3 contains elements of judgement. Having
considered the guidance under the relevant accounting standards and all aspects of the acquisition of Saracen and
Rize ETF, the Directors have concluded that this was an acquisition of a business and the assets acquired have
been recognised within the Group Consolidated Financial Statements in accordance with IFRS 3. Refer to note 18
Business Combinations.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS CONTINUED
Impairment of goodwill and other intangible assets and recoverability of Parent Company investment in subsidiaries
– The recognition of goodwill and other intangible assets arising on acquisitions and the impairment assessments
contain significant accounting estimates. Goodwill is carried at cost less provision for impairment, the carrying value
is tested annually for impairment, or more frequently if any indicators arise. Other intangible assets are amortised
over their useful economic life and are assessed for impairment when there is an indication that the asset might
be impaired. The impairment test of goodwill and other intangible assets includes key assumptions underlying the
recoverable amounts, the growth rates applied to the future cash flows and the Group’s discount rate. Note 15 sets
out the estimates used and the sensitivity changes in the key assumptions.

Estimation of current tax payable and current tax expense in relation to an uncertain tax position – The group’s current
tax provision of £1.442 million relates to management’s assessment of the amount of tax payable on open positions
where the liabilities remain to be agreed with relevant tax authorities. Uncertain tax items for which a provision of
£1.437 million is made relates principally to the interpretation applicable to arrangements entered into by the Group.
Due to uncertainty associated with such tax items, it is possible that, on conclusion of open tax matters at a future
date, the final outcome may differ significantly. Note 13 sets out the income tax charge recognised in the year.

Whilst a range of outcomes is possible, the extent of the maximum reasonable possible range is from additional tax
liabilities of up to £2 million to a reduction in liabilities of up to £1.437 million.

b) Judgements
AssetCo has acquired 68% of the equity of Rize EFT Limited. Whilst the founders of the business have a material
stake (which could be increased by 5%age points in the event of a sales “trigger” being met) there is in place a
comprehensive shareholder agreement which confers considerable control to the Group via the appointment of
Board representation and the way in which key matters have to be agreed including the ability to block resolutions
as well as voting patterns and economic dependency. Accordingly we believe it is appropriate to account for Rize as
a subsidiary entity.

The board do not consider that any other critical judgements have been made in preparing the financial statements
which have a significant risk of causing a material adjustment to be made to the carrying amounts of assets and
liabilities within the next financial year.

5. SEGMENTAL REPORTING
The core principle of IFRS 8 ‘Operating segments’ is to require an entity to disclose information that enables users
of the financial statements to evaluate the nature and financial effects of the business activities in which the entity
engages and the economic environments in which it operates. Segment information is therefore presented in
respect of the company’s commercial competencies, Active Specialists and High-Growth Thematics.

No secondary segmental information has been provided as, in the view of the Directors, whilst there is a presence
in UAE it is not material in the context of the Group’s new activities following the change in strategy to concentrate
on asset and wealth management. All revenues are earned in the UK. The directors consider that the chief operating
decision maker is the Board.

The amounts provided to the board with respect to net assets are measured in a manner consistent with that of the
financial statements. The company is domiciled in the UK and also operates out of a branch in UAE. Unallocated
comprises AssetCo including the UAE business.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

5. SEGMENTAL REPORTING CONTINUED
ANALYSIS OF REVENUE AND RESULTS BY COMMERCIAL ACTIVITY

Year ended 30 September 2021

Revenue

Management fees

Marketing fees

Total revenue to external customers

Segment result

Operating profit/(loss)

Investment income

Finance costs

Profit/(loss)/profit before tax

Income tax

Profit/(loss) for the year

Segment assets and liabilities

Total assets

Total liabilities

Total net assets

Other segment information

Depreciation

Amortisation

Total capital expenditure

Active
specialists
£000

High-growth
Thematics
£000

Unallocated
£000

Continuing
Operations
£000

135

–

135

–

(6)

–

273

(347)

–

14,608

1,844

(8)

(347)

16,444

(1,437)

(346)

15,007

3,518

21,742

(85)

(471)

3,433

21,271

34,335

(2,902)

31,433

–

135

273

408

14,293

1,844

(8)

16,129

(1,442)

14,687

59,595

(3,458)

56,137

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

5. SEGMENTAL REPORTING CONTINUED

Year ended 30 September 2020 (restated)

Revenue

Management fees

Marketing fees

Total revenue to external customers

Segment result

Operating profit

Investment income

Finance costs

Profit before tax

Income tax

Profit for the year

Segment assets and liabilities

Total assets

Total liabilities

Total net assets

Other segment information

Total capital expenditure

6. OTHER INCOME

Grant Thornton litigation

Success fee

Active
specialists
£000

High-growth
Thematics
£000

Unallocated
£000

Continuing
Operations
£000

–

3,405

(62)

3,361

–

3,361

33,601

(1,256)

32,345

33,601

(1,256)

32,345

–

2021
£000

25,918

(3,530)

22,388

2020
£000

4,597

–

4,597

As referred to in the Chairman’s statement the case against Grant Thornton was concluded successfully on
2 October 2020. The total award came to £30.515 million of which £4.597 million was reflected in the 2020 full year
financial statements, as it had been awarded by the Courts irrespective of the outcome of any appeal. Other income
shown in these financial statements represents the balance of the Court’s award, less the success fee of 15% of
claim proceeds excluding costs.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

7. OPERATING PROFIT
Operating profit is stated after charging the following:

Depreciation of property plant and equipment (note 15)

Amortisation of intangible assets (note 16)

Loss on foreign exchange differences

Fees payable to the company’s auditors:

For the audit of the parent Company and the consolidated financial statements

Employee benefit expense (note 9)

Leases recognised in income statement
The income statement shows the following amounts relating to leases:

Expense relating to short-term leases

8. DIRECTORS’ EMOLUMENTS

2021
£000

132

7,014

2021
£000

Salary and fees

Long term incentive plan

Total

Director

Martin Gilbert

Peter McKellar

Tudor Davies

Christopher Mills

Mark Butcher

2021
£000

2020
£000

–

2021
£000

1,649

1,374

–

Aggregate fees and emoluments

262

110

3,023

2020
£000

–

2021
£000

1,712

1,449

2020
£000

–

425

2020
£000

–

3,285

110

Two directors have received awards under the company’s LTIP during the financial year 2021. The awards were
granted on 28 September 2021 and the relevant shares vest at a time following the year end as determined under
the rules and as agreed with the Remuneration Committee. The fair value of this award is calculated for the two
directors using the valuation method described in note 30. The fair value has been spread over the assumed vesting
period, with a charge of £3,023,000 recognised in 2021 (2020: £nil). The provision for employer social security costs
on the award for £228,000 and £190,000 for Martin Gilbert and Peter McKellar respectively, has been accrued over
the performance period attached to the award and recognised in liabilities.

As the Company is currently involved in the proposed acquisition of River and Mercantile it has been agreed that the
shares will not vest until such a time as is considered appropriate by the Remuneration Committee. Accordingly no
shares have been issued at the date of signing of these financial statements.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

8. DIRECTORS’ EMOLUMENTS CONTINUED
The ordinary share award for Martin Gilbert is 99,334 shares and for Peter McKellar 82,778. This is determined
based on the price agreed under the terms of the scheme, as detailed in note 30. For the end of performance
period of 30 September 2021, this was £17.01 per share.

There are no retirement benefits accruing to current directors (2020: none) under a defined benefit or defined
contribution scheme. The highest paid director received aggregate emoluments, including the effect of the share-
based payments charge, of £1,712,000 (2020: £70,000).

9. EMPLOYEE BENEFIT EXPENSE
The monthly average number of persons employed by the Group and Company (including executive directors) was:

Active specialists

High-growth thematics

Head office

The costs incurred in respect of these employees were:

Wages and salaries

Social security costs

Share-based payments

Other pension costs

Group
2021
No.

Group
2020
No.

Company
2021
No.

Company
2020
No.

Group
2021
£000

660

852

5,496

7,014

–

Group
2020
£000

403

–

425

–

Company
2021
£000

Company
2020
£000

450

827

5,496

–

6,773

403

–

425

EMPLOYEE BENEFIT OBLIGATIONS
The group’s subsidiaries both have defined contribution pension schemes in place. The pension contribution charge
in 2021 amounted to £6,000 (2020: £14,000).

10. INVESTMENT INCOME

Fair value gains on financial instruments classified as fair value through
profit and loss account

Dividend income

Interest income

2021
£000

1,650

194

–

1,844

2020
£000

–

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

11. FINANCE COSTS

Finance costs on bonds and letters of credit

12. GROUP AND COMPANY DIVIDENDS
A final dividend for 2021 has not been recommended (2020: £nil).

13. INCOME TAX EXPENSE

Current tax

Current tax on profits for the year

Total current tax expense

Deferred tax

Increase in deferred tax assets (note 25)

Increase in deferred tax liabilities (note 25)

Total deferred tax expense

Income tax expense

2021
£000

(8)

2020
£000

(62)

2021
£000

1,437

(307)

312

1,442

2020
£000

–

The tax on the group’s profit before tax differs from the theoretical amount that would arise using the standard tax
rate applicable to the profits of the consolidated entities as follows:

Profit before tax

Tax at a standard rate of 19% (2020: 19%)

Factors affecting tax charge for the year:

Expenses not deductible for tax

Income not taxable for tax purposes

Losses not allowable

Tax losses used

Tax losses generated

2021
£000

16,129

3,064

805

(105)

–

(2,393)

1,442

2020
£000

3,361

639

–

(675)

–

A change to the main UK corporation tax rate was included in the Finance Bill 2021, which had its third reading
on 24 May 2021, and is now considered substantively enacted. The rate applicable from 1 April 2020 to 31 March
2023 remains at 19% but the rate from 1 April 2023 will increase to 25%. Deferred taxes at the reporting date have
been measured using these enacted tax rates and reflected in these financial statements.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

14. EARNINGS/(LOSS) PER SHARE
(a) Basic
Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the weighted
average number of Ordinary Shares in issue during the year.

Profit attributable to owners of the parent – £000

Weighted average number of ordinary shares in issue – no.

Basic earnings per share – pence

2021

14,796

2020

3,361

8,194,031 12,211,163

180.57

27.52

(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares in issue
assuming conversion of all dilutive potential Ordinary Shares. The Company has one category of dilutive potential
ordinary shares being shares allocated to the LTIP pool.

Profit attributable to owners of the parent – £000

Weighted average number of ordinary shares in issue – no.

Basic earnings per share – pence

Weighted average number of ordinary shares in issue

Adjustment for:

2021

14,796

2020

3,361

9,187,346 12,211,163

161.05

27.52

2021
No.

2020
No.

8,194,031 12,211,163

– assumed vesting of all ordinary shares in LTIP pool

993,315

–

Weighted average number of ordinary shares including potentially dilutive shares

9,187,346 12,211,163

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

15. PROPERTY, PLANT AND EQUIPMENT

Group

Cost

At 1 October 2019 and 30 September 2020

Acquisition of subsidiary

Additions

At 30 September 2021

Accumulated depreciation

At 1 October 2019 and 30 September 2020

Acquisition of subsidiary

Charge for the year

At 30 September 2021

Net book value at 30 September 2021

Net book value at 30 September 2020

Company

Cost

At 1 October 2019 and 30 September 2020

Disposals

At 30 September 2021

Accumulated depreciation

At 1 October 2019 and 30 September 2020

Disposals

At 30 September 2021

Net book value at 30 September 2021

Net book value at 30 September 2020

Fixtures and
fittings
£000

Computer
equipment
£000

Total
£000

–

Fixtures and
fittings
£000

Total
£000

–

SECURITY
As at 30 September 2021 neither the group nor the company provided no security in respect of property, plant and
equipment (2020: £nil).

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

16. INTANGIBLE ASSETS

Group

Cost

Acquisition of business

Additions

At 30 September 2021

Accumulated amortisation

Acquisition of business

Charge for the year

At 30 September 2021

Net book value at 30 September 2021

Net book value at 30 September 2020

Goodwill
£000

19,787

–

19,787

–

19,787

–

Brand
£000

Website
development
£000

200

–

200

–

194

–

100

–

Goodwill is allocated to the Group’s cash-generating units (CGU’s) identified according to market operating
segment. An operating segment-level summary of the goodwill allocation is presented below:

Thematic ETFs

Active specialists

Total

2021
£000

16,860

2,927

19,787

Total
£000

20,086

20,087

20,067

–

2020
£000

–

IMPAIRMENT REVIEW
Goodwill includes £2,927 million (2020: £nil) in respect of Saracen Fund Managers Limited (“Saracen”) and
£16.860 million (2020: £nil) in respect of Rize ETF Limited (“Rize”).

The Directors estimated the recoverable amount of the Saracen goodwill based upon the value in use of the
business. The value in use was measured using internal budgets and forecasts to generate a five–year view. The key
assumptions used were: revenue based on internally approved three year forecast, and a terminal revenue growth
rate of 2% per cent; and a pre–tax discount rate of 15.3% per cent. Estimates were made concerning remuneration
and administrative costs, based upon current levels and expected changes.

Sensitivity analysis was performed on the key inputs of the valuation, being the growth and discount rates and future
cash flows. A fall of greater than 10% in projected profit margin or a change in the discount rate to a rate in excess
of 17.5% is required to indicate impairment.

The Directors estimated the recoverable amount of the Rize ETF goodwill using the value in use of the business. The
value in use was measured using internal budgets and forecasts to generate a five–year view. The key assumptions
used were: revenue based on internally approved four year forecast, and a terminal revenue growth rate of 2%; and
a pre–tax discount rate of 35.0% per cent. Estimates were made concerning remuneration and administrative costs,
based upon current levels and expected changes.

Sensitivity analysis was performed on the key inputs of the valuation, being the growth and discount rates and future
cash flows. A fall of greater than 1.5% in projected profit margin or a change in the discount rate to a rate in excess
of 35.3% is required to indicate impairment.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

17. INVESTMENTS IN SUBSIDIARIES
Company shares in group undertakings

At 1 October

Additions in the year

At 30 September

2021
£000

–

25,194

2020
£000

–

Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid, less any
impairment. Further detail is included in note 18.

The subsidiaries of AssetCo plc as at 30 September 2021 are as follows:

Name of Company

Saracen Fund Managers Limited

Rize ETF Limited

AAMCO Limited**

AssetCo Asset Management Limited**

AssetCo Asset Managers Limited**

AssetCo Investment Management Limited**

Notes:

Note

Proportion
held

Class of
shareholding

100%

Ordinary

68%*

100%

Ordinary

Nature of business

Investment
management

Marketing of
thematic exchange
traded funds

Dormant

1. Incorporated, registered and having its principal place of business in the United Kingdom with its registered office

being 2nd Floor, 19 Rutland Square, Edinburgh EH1 2BB.

2. Incorporated, registered and having its principal place of business in the United Kingdom with its registered office

being 2 Glass Wharf, Bristol BS2 0FR

3. Incorporated, registered and having their principal places of business in the United Kingdom with their registered

office being Singleton Court Business Park, Wonastow Road, Monmouth, NP25 5JA

Rize ETF Limited is subject to a “trigger” based on sales targets which grants founders/management an
additional 5% of the ordinary shares. Whilst we believe the sales target is likely to be met the Group’s recognises
its holding in Rize ETF Limited as 68%. The voting rights held by the Group amount to 70%.

Immediately upon acquisition in July 2021 the Company invested £5.25 million in new preference shares in
Rize of which £1 million was used to repay a loan to the former majority shareholder with the remainder used to
provide working capital funding to take Rize to profitability and a cashflow positive position.

** All subsidiaries are exempt from preparing individual financial statements by virtue of section 394 of the

Companies Act 2006 and exempt from filing with the Registrar individual financial statements by virtue of section
448a of the Companies Act 2006.

All subsidiary undertakings are included in the consolidation.

AssetCo plc | Report and Financial Statements 2021
14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

18. BUSINESS COMBINATION
(a) Summary of acquisitions
On 14 May 2021 AssetCo plc announced the conditional acquisition of 100% of the ordinary shares of Saracen
Fund Managers Limited (“Saracen”), an investment management company based in Edinburgh. The transaction
subsequently completed on 30 July 2021.

On 22 July 2021 AssetCo plc announced that it had reached agreement to purchase 68% of the ordinary shares of
Rize ETF Limited (“RIZE”), a company which develops and markets thematic exchange-traded funds (“ETFs”). This
transaction completed on 28 July 2021.

Details of the purchase consideration, net assets acquired and goodwill are as follows:

Cash paid

Ordinary shares issued

Total consideration

Total
£000

Saracen
£000

17,165

2,779

19,944

665

2,779

3,444

Rize
£000

16,500

–

16,500

The fair value of the 166,904 shares issued as part of the consideration paid for Saracen £2,779,000) was based on
the published share price on 30 July 2021 of £16.65 per share. Issue costs attributable to the shares were negligible
and expensed to profit and loss account.

The fair value of assets and liabilities recognised as a result of the acquisition are as follows:

Cash

Trade receivables

Other receivables

Plant and equipment

Corporation tax asset

Intangible assets: brand

Intangible assets: website development

Trade payables

Other payables

Deferred tax liability

Loan to former shareholder

Net identifiable assets/(liabilities) acquired

Less: non-controlling interest

Add: goodwill

Net assets acquired

Total
£000

Saracen
£000

705

116

170

200

(131)

(129)

(44)

(1,000)

(13)

170

157

19,787

19,944

418

–

(38)

(14)

(6)

–

517

–

517

2,927

3,444

Rize
£000

287

141

–

150

(93)

(115)

(38)

(1,000)

(530)

170

(360)

16,860

16,500

The goodwill is attributable to the significant growth prospects of Rize ETF and intangible assets that do not qualify
for separate recognition.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

18. BUSINESS COMBINATION CONTINUED
Acquired receivables
The fair value of acquired trade receivables is £116,000 and no loss allowance has been recognised on acquisition.

Acquired brands
The brands are recognised on acquisition at their fair values at the date of acquisition and subsequently amortised
on a straight line basis, over their estimated useful lives.

Revenue and profit contribution
The acquired businesses contributed revenues of £408,000 and operating losses of £315,000 from the date of
acquisition to 30 September 2021. If the acquisition had occurred on 1 October 2020 consolidated proforma
revenue and loss for the year ended 30 September 2021 would have been £1,922,000 and £1,664,000 respectively.

Merger relief
Where a company issues equity shares in consideration for securing a holding of at least 90% of the nominal value
of each class of equity in another company, the application of merger relief is compulsory. Merger relief is a statutory
relief from recognising any share premium on shares issued. Instead, a merger reserve is recorded equal to the value
of share premium which would have been recorded if the provisions of section 612 of the Companies Act 2006
had not be applicable. As the consideration for the acquisition of Saracen met this criterion merger relief has been
applied (see note 24).

Accounting policy choice for non-controlling interests
The group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling
interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-
by-acquisition basis. For the non-controlling interests in Rize ETF Limited, the group elected to recognise the non-
controlling interests at the proportionate basis of the acquired net identifiable assets. See note 2.13 for the group’s
accounting policies for business combinations.

(b) Purchase consideration – cash outflow
Outflow of cash to acquire subsidiaries, net of cash acquired

Cash consideration

Less: balances acquired

Net outflow of cash – investing activities

2021
£000

17,165

(705)

16,460

2020
£000

–

Acquisition-related costs
Acquisition-related costs of £277,000 (2020:nil) that were not directly attributable to the issue of shares are included
in operating costs in the statement of profit or loss and in operating cash flows in the statement of cash flows.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

19. TRADE AND OTHER RECEIVABLES

Trade receivables

Other receivables

Prepayments and accrued income

Group
2021
£000

216

144

247

607

Group
2020
£000

–

4,640

4,683

Company
2021
£000

Company
2020
£000

–

108

–

4,640

4,683

Due to their short-term nature, the carrying value of trade and other receivables approximates to their fair
value. Trade and other receivables, including accrued income, held in UAE dirhams amounted to £0.02 million
(2020: £0.03 million)

Other receivables in 2020 included £4.6 million in costs plus associated interest, which was ordered by the Court to
be paid by Grant Thornton to the Company. See also Note 6.

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables and accrued
income. The company does not hold any collateral as security.

As of 30 September 2021, trade and other receivables of £nil (2020: £nil) were impaired, and all receivables were
aged less than 30 days. The amount of the provision was £nil (2020: £nil). No trade receivables were written off
during the year (2020: £nil).

20. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

UK listed shares

Group
2021
£000

12,000

Group
2020
£000

Company
2021
£000

Company
2020
£000

–

12,000

–

In January and February 2021 the group purchased 5,000,000 ordinary shares in River and Mercantile Group
Plc representing 5.85% of the shares in issue. The share price at 30 September 2021 was £2.40 per share. As
discussed in the Chairman’s statement and elsewhere since the year end the Company has made a recommended
offer for River and Mercantile Group plc and at the time of signing of these financial statements the outcome of the
offer is not known.

(a) Amounts recognised in profit or loss

Fair value gains on equity investments

Dividends received recognised in investment income

Group
2021
£000

1,650

194

Group
2020
£000

Company
2021
£000

Company
2020
£000

–

1,650

194

–

(b) Risk exposure and fair value measurement
The financial instruments are exposed to equity market price risk. Fair value for the investments were determined
by reference to their published price quotation in an active market (classified as level 1 in the fair value hierarchy
under IFRS 13). The Group and Company did not have any level 2 or level 3 classified financial assets as at
30 September 2021.

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

21. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

Cash and cash equivalents

UK sterling

UAE dirhams

Group
2021
£000

26,902

26,866

26,902

Group
2020
£000

27,860

26,441

1,419

27,860

Company
2021
£000

Company
2020
£000

22,226

22,190

22,226

27,860

26,441

1,419

27,860

Cash and cash equivalents receive interest at the floating rate and are carried on the balance sheet at a value
approximate to their fair values. Balances are held with reputable banks with credit ratings of A and above.

In addition to the above, UAE dirhams amounting to nil (2020: £1.1 million) were held on deposit as security in
respect of outstanding performance and warranty bonds.

22. TRADE AND OTHER PAYABLES

Trade payables

Other payables

Other taxation and social security

Accruals

Group
2021
£000

300

1,577

1,972

Group
2020
£000

102

1,149

1,256

Company
2021
£000

Company
2020
£000

104

1,315

1,466

102

1,149

1,256

Due to their short-term nature, the carrying value of trade and other payables approximates to their fair value. Trade
and other payables held in UAE dirhams amounted to £0.3 million (2020: £1.1 million).

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

23. FINANCIAL ASSETS AND LIABILITIES
The following tables illustrate the categorisation and carrying value of financial assets and liabilities as at
30 September 2021. Credit risk is also discussed in note 3.1 (a).

FINANCIAL ASSETS

Trade receivables

Other receivables

Cash and cash equivalents

Cash held in respect of bonds

Financial assets at amortised cost

Financial assets at fair value through profit and loss

FINANCIAL LIABILITIES
Liabilities at amortised cost

Trade and other payables

Group
2021
£000

216

144

26,902

–

27,262

12,000

39,262

Group
2020
£000

–

4,640

27,860

1,058

33,558

–

33,558

Company
2021
£000

Company
2020
£000

–

22,226

–

22,261

12,000

34,261

–

4,640

27,860

1,058

33,558

–

33,558

Group
2021
£000

1,910

Group
2020
£000

1,253

Company
2021
£000

Company
2020
£000

1,421

1,253

Maturity analysis of financial liabilities
The following disclosures show the maturity profile of contractual undiscounted cash flows of financial liabilities,
excluding deferred income, as at 30 September 2021:

Other
payables
and
accruals
£000

Trade
payables
£000

Total
£000

300

1,610

1,910

102

1,151

1,253

2021

In one year or less

2020

In one year or less

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

23. FINANCIAL ASSETS AND LIABILITIES CONTINUED
CURRENCY RISK
The company has used a sensitivity technique that measures the estimated change to the fair value of the
company’s financial instruments of a 10% strengthening in sterling against all other currencies from the closing rates
as at 30 September 2021, with all other variables remaining constant. A 10% variation would have had an impact on
the balance sheet of £1,000. Of this charge, £1,000 would be taken to the income statement.

2021

Financial assets

Financial liabilities

2020

Financial assets

Financial liabilities

UK sterling
£000

UAE
dirhams
£000

Total
£000

10%
£000

39,209

(1,610)

37,599

31,051

(189)

30,862

(300)

(247)

2,507

(1,064)

1,443

39,262

(1,910)

37,352

33,558

(1,253)

32,305

(1)

(228)

(131)

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions.
Nonetheless the analysis above is considered to be materially representative of the company’s exposure to currency
risk during the year.

24. EQUITY
(a) Share capital and share premium

Ordinary shares of 10p each

Fully paid

2021
Shares

2020
Shares

2021
£000

2020
£000

8,424,847 12,211,163

28,613

1,221

The ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the
company in proportion to the number of and amounts paid on the shares held.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

24. EQUITY CONTINUED
(i) Movement in ordinary shares

Opening balance at 1 October 2019

12,211,163

1,221

64,941

66,162

Number of
shares

Par value
£000

Share
premium
£000

Total
£000

Capital reduction – note (i)

Balance at 30 September 2020

Success fee settled in ordinary shares (ii)

Share buy-back (iii)

Placing (iv)

Consideration shares re: Saracen (v)

Less: transaction costs arising on shares issues

Balance at 30 September 2021

(ii) Movement in deferred shares

Opening balance at 1 October 2019

Capital reduction – note (i)

Balance at 30 September 2020 and 2021

Notes:

(i) Capital reduction

–

(64,941)

12,211,163

1,221

854,722

(6,532,942)

1,725,000

166,904

8,424,847

–

8,424,847

(653)

173

843

–

843

–

3,445

–

1,221

3,530

(653)

24,840

25,013

–

28,285

29,128

(515)

27,770

28,613

Number of
shares

Par value
£000

91,214,165

24,253

(91,214,165)

(24,253)

–

Share
premium
£000

–

Total
£000

24,253

(24,253)

–

In a circular to shareholders dated 10 June 2020 it was proposed that the company be allowed to reduce its
capital by cancelling all outstanding deferred shares of 24p and 495p together with the balance standing to the
credit of the share premium account. This Resolution was duly approved at a general meeting of shareholders on
10 July 2020 and confirmed at a Court hearing on 4 August 2020.

(ii) Success fee

Following the successful conclusion of the litigation against the Company’s former auditors, Grant Thornton, in
October 2020 a fee became payable to Cadoc Limited which was settled entirely in ordinary shares in December
2020 at an issue price of £4.13 per share.

(iii) Share buy-back
Also arising out of the successful litigation the Company returned approximately £26.9 million to shareholders
in a tender offer. A circular was sent to shareholders on 2 December 2020 and the resolution was approved at
a general meeting on 17 December 2020. The tender was over-subscribed and the full 50% of shares offered
were bought-back and cancelled amounting to 6,532,942 ordinary shares. The buy-back was completed
without reference to published financial statements but the Board carefully considered the material effects of the
receipt of cash from the Grant Thornton claim and satisfied themselves on the basis of up-to-date management
accounts and careful consideration of amounts available in the company’s bank accounts.

The total cost of £27.021 million (including £171,000 of transactions costs) were deducted from equity. A transfer
of £653,000 was made from retained earnings to capital redemption reserve.

AssetCo plc | Report and Financial Statements 2021

14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

24. EQUITY CONTINUED
iv) Placing

In July 2021 the Company raised £25,012,500 via a placing of 1,725,000 new ordinary shares at £14.50 per
share to fund the acquisition of Rize ETF Limited

(v) Consideration re: Saracen Fund Managers
On 30 July 2021 the Company completed the acquisition of Saracen Fund Managers Limited which was settled
in part by the issue to certain vendors of 166,904 new ordinary share. Under section 612 of the Companies
Act 2006 the excess over the par value of these shares is accounted for as a Merger Reserve rather than as
share premium.

(b) Other reserves

Opening balance at 1 October 2019 and 2020

Arising on buy-back of shares

Arising on acquisition of Saracen

Share-based payments in relation to LTIP (see note 30)

Capital
redemption
reserve
£000

–

653

–

Merger
reserve
£000

–

2,762

–

Balance at 30 September 2021

653

2,762

Other
reserve
£000

–

5,496

Total
£000

–

653

2,762

5,496

8,911

As referred to in note 24 (a) the Company bought back and cancelled 6,532,942 ordinary shares in December 2020.
These shares have been credited to the Capital Redemption Reserve in the amount of £653,000.

Also as referred to in note 24 (a) a Merger Reserve arose on the issue of shares to vendors of Saracen Fund
Managers Limited rather than share premium.

The Company has in place a Long Term Incentive Plan (“LTIP”). The charge for the year amounted to £6,273,000
including the related employers’ national insurance cost. The amount due to the participants in the scheme for 2021
will be entirely equity-settled and this reserve represents the cost of meeting that obligation (see note 30).

Opening balance at 1 October

Net profit for period

Capital reduction – see (i) above

Share buy-back – see (iii) above

Costs associated with the buy-back

Exchange movement

Balance at 30 September

2021
£000

31,124

14,796

–

(26,850)

(171)

(7)

2020
£000

(60.560)

3,361

89,194

–

(871)

18,892

31,124

AssetCo plc | Report and Financial Statements 2021
14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

25. DEFERRED TAXATION
The balance comprised temporary differences attributable to:

Deferred tax liability

Financial assets at fair value through profit and loss

Intangible assets

Deferred tax liability

Less:

Set-off of deferred tax liabilities pursuant to set-off provisions

Net deferred tax liability

Group
2021
£000

313

362

(313)

Deferred tax movements

Group

At 1 October 2019 and 30 September 2020

Acquisition of subsidiary

Credited/(charged) to profit and loss

Set-off of deferred tax liabilities pursuant to set-off provisions

At 30 September 2021

The balance comprised temporary differences attributable to:

Deferred tax assets

Share-based payments

Less: amounts not recognised

Deferred tax liability

Less:

Set-off of deferred tax liabilities pursuant to set-off provisions

Net deferred tax asset

Group
2020
£000

Company
2021
£000

Company
2020
£000

–

313

–

313

(313)

–

Financial
assets at
fair value
through
profit and
loss
£000

–

313

(313)

–

Intangible
assets
£000

–

(1)

–

Total
£000

–

312

(313)

Group
2021
£000

1,044

(731)

313

(313)

–

Group
2020
£000

Company
2021
£000

Company
2020
£000

–

1,044

(731)

313

(313)

–

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

25. DEFERRED TAXATION CONTINUED

Group

At 1 October 2019 and 30 September 2020

Acquisition of subsidiary

(Credited)/charged to profit and loss

Set-off of deferred tax liabilities pursuant to set-off provisions

At 30 September 2021

Losses
£000

Share-based
payments
£000

–

(6)

–

313

(313)

–

Total
£000

–

307

(313)

–

The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable
taxable profits will be available in the future against which the reversal of temporary differences can be deducted.
Where the temporary differences relate to losses, the availability of the losses to offset against future profitability
is also considered. The directors consider that there is no basis on which to recognise deferred tax assets at
30 September 2021 or 30 September 2020. The unrecognised asset in respect of tax losses at 30 September
2021 amounts to £1.28 million (2020:£2.6 million).

Tax losses

Unused tax losses for which no deferred tax benefit has been recognised

Potential tax benefit at 25% (2020: 19%)

The unused tax losses were incurred by AssetCo plc and Rize ETF Limited.

Unrecognised temporary differences

Temporary differences for which no deferred tax benefit has been recognised

Potential tax benefit at 19% (2020: 19%)

2021
£000

5,118

1,280

2021
£000

3,874

731

2020
£000

13,911

2,643

2020
£000

–

Temporary differences of £731,000 have arisen as a result of the long-term incentive plan however a deferred tax
asset has been recognised only to the extent that there are sufficient deferred tax liabilities that can be offset by the
deferred tax asset.

26. FUTURE CAPITAL COMMITMENTS
There were no capital commitments contracted for but not provided in these financial statements at 30 September
2021 (2020: £nil).

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

27. RECONCILIATION OF PROFIT BEFORE TAX TO NET CASH INFLOW FROM OPERATIONS

Profit for the year before taxation

Share-based payments

– in respect of LTIP

– Success fee

Increase in investments

Depreciation

Amortisation

Finance costs (note 11)

Investment income (note 10)

Decrease in receivables

(Decrease)/increase in payables

Cash inflow from operations

28. CONTINGENT LIABILITIES

Performance bond related to a UAE released in
full in January 2021

Group
2021
£000

16,129

5,496

3,530

(12,000)

(194)

4,367

(591)

16,755

Group
2020
£000

3,361

Company
2021
£000

Company
2020
£000

16,444

3,361

–

(18)

6,024

(622)

8,807

5496

3,530

(12,000)

–

(194)

4,578

163

18,025

–

(18)

6,024

(622)

8,807

Approximate maximum potential liability

Group
2021
£000

Group
2020
£000

Company
2021
£000

Company
2020
£000

–

1,058

–

1,058

29. RELATED PARTY TRANSACTIONS
Related parties comprise the company’s shareholders, subsidiaries, associated companies, joint ventures and other
entities over which the shareholders of the company have the ability to control or exercise significant influence over
financial and operating decisions and key management personnel.

During the year, the company entered into the following significant transactions with related parties at prices and on
terms agreed between the related parties:

KEY MANAGEMENT COMPENSATION

Salaries, fees and other employee benefits

Share-based payments

Key management includes the directors of the Company only.

Further details on directors’ emoluments can be found in note 8.

2021
£000

262

3,023

3,285

2020
£000

110

–

110

AssetCo plc | Report and Financial Statements 202114. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

29. RELATED PARTY TRANSACTIONS CONTINUED
Tudor Davies was appointed Executive Chairman on 23 March 2011 and became a non-executive director on
15 April 2021 with the confirmation of the appointment of Martin Gilbert as chairman.

Consultancy services were provided by Cadoc Limited, a company associated with Tudor Davies, to AssetCo
during the year at a cost of £91,000 (2020: £83,000), including at the balance sheet date an accrual of £nil (2020:
£42,000). On conclusion of the court action against Grant Thornton, Cadoc Limited was entitled to a success fee of
15% of the funds realised from the litigation. The fee was settled by the issue of shares with a value of £3,530,000.

Toscafund Asset Management LLP has an agreement with AssetCo plc under which the Company acts as
Appointed Representative for regulatory purposes. Toscafund charges a monthly fee for this service and the amount
charged in these financial statements is £30,000.

In December 2020 the Company completed a buy-back of 50% of the ordinary shares in issue at a cost of
£26.8 million. Included in the buy-back were shares controlled by members of the board. 2,952,890 shares were
purchased from Harwood Capital LLP, a company owned and controlled by Christopher Mills at a price of £4.11 per
share amounting to £12.136 million. In addition to this shares 427,361 shares were purchased from Cadoc Limited,
a company controlled by Tudor Davies’ family, as well as 16,306 shares held in Harwood Capital LLP, at a price if
£4.11 per share amounting to £1.823 million.

In July 2021 the Company undertook a placing of 1,725,000 ordinary shares at £14.50 per share raising a total
before costs of £25.013 million. Related parties who participated in the placing were Harwood Capital LLP
(200,000 shares), Martin Gilbert (70,000 shares), Peter McKellar (34,483 shares) and Mark Butcher (6,896 shares).
The amounts subscribed by each party respectively were Harwood Capital LLP £2.9 million, Martin Gilbert
£1.015 million, Peter McKellar £500,000 and Mark Butcher £100,000.

As set out in note 20 the Company has purchased 5,000,000 shares in River and Mercantile Group Plc. AssetCo
plc’s chairman Martin Gilbert is also deputy chairman of River and Mercantile.

Immediately upon acquisition in July 2021 the Company invested £5.25 million in new preference shares in Rize of
which £1 million was used to repay a loan to the former majority shareholder with the remainder used to provide
working capital funding to take Rize to profitability and a cashflow positive position.

Details of the Directors’ shareholdings in the Company can be found in the Directors’ Report.

30. DEFERRED SHARES – LONG TERM INCENTIVE PLAN
During the year the Group implemented a Long term Incentive Plan (“LTIP”) which seeks to align the interests
of shareholders and senior management by focusing on the increase in market value of the group’s shares. The
arrangement is such that participants receive a share of a pool value equivalent to 20% of the total growth in market
capitalisation for the performance period, calculated under the agreed formula. In the ordinary course of events, the
award is settled one third in cash within 60 days of the year end, and two thirds in shares over a vesting period of 5
years in equal annual instalments. They automatically convert into one ordinary share each on vesting, at an exercise
price of nil. The executives do not receive any dividends and are not entitled to vote in relation to the deferred shares
during the vesting period. If an executive ceases to be employed by the group within this period, the rights will be
forfeited, except in limited circumstances that are approved by the board on a case-by-case basis.

For the LTIP award in respect of 2021 it has been agreed that the 1/3rd element of the annual LTIP normally paid in
cash would now be equity-settled in order to fully align the interests of shareholders and the executives. The 2021
awards were granted on 28 September 2021 and has a performance period end of 30 September 2021.

AssetCo plc | Report and Financial Statements 2021 14. NOTES TO THE FINANCIAL STATEMENTS CONTINUED

30. DEFERRED SHARES – LONG TERM INCENTIVE PLAN CONTINUED
We engage with external experts to undertake the valuation of the awards. The performance condition for the
equity-settled LTIP is a market-based performance condition. As the grant date was 2 days before the end of the
first performance period, the fair value of the LTIP awards were calculated by determining the Company’s volume
weighted average share price (“VWAP”) for 18 out of the 20 dealing days required to determine the Award value.
In this case, we consider the 18 day average VWAP up to the grant date, plus the grant date share price as an
estimate of the final 2 days, to represent a fair estimate for IFRS2 purposes. The fair value of the rights at grant date
was calculated as £16.72 per share.

The number of shares expected to vest is estimated based on the non-market vesting conditions. The estimates are
revised at the end of each reporting period, and adjustments are recognised in profit or loss and the share-based
payment reserve. The group recognises a charge of £5,496,000 (2020: £nil) in the Consolidated Income Statement
in respect of the equity-settled LTIP.

The total number of shares to be issued under the 2021 LTIP based on the actual award value calculated under the
agreed formula at the end of the performance period (£17.01 per share) is 993,315 of which 331,110 are due to
vest shortly after the signing of these financial statements.

There were no deferred shares at the beginning of the reporting period, and those granted under the 2021 LTIP
remained outstanding as at 30 September 2021. The weighted average remaining contractual life of the deferred
shares outstanding at the end of the period is 2.01 years.

When shares vest employers’ national insurance is payable. A liability for the relevant amount of employers’ national
insurance is recognised within liabilities in the period to which the vesting equities relate. An accrual for £777,000
(2020: £nil) has been recognised in liabilities in respect of the 2021 LTIP.

NET SETTLEMENT FEATURE FOR WITHHOLDING TAX OBLIGATIONS
Under UK tax law, AssetCo plc must withhold an amount for an employee’s tax obligation associated with a share-
based payment and transfer that amount in cash to the tax authority on the employee’s behalf. The deferred shares
granted under the group’s LTIP scheme include a net settlement feature under which the Company withholds shares
in order to settle the employee’s tax obligations.

31. POST BALANCE SHEET EVENTS
On 1 October 2021 the Company announced the acquisition of a 30% stake in Parmenion Capital Partners LLP for
a purchase price of £21.9 million.

On 25 January 2022 the Company announced a formal bid to acquire the 94.15% of River and Mercantile Group
Plc which was not already owned, with River and Mercantile shareholders entitled to receive 0.07392 New AssetCo
shares for each River and Mercantile share held which, as at the date of the 2.7 announcement, corresponded to a
total consideration of approximately £99 million.

There are no other post balance sheet events.

AssetCo plc | Report and Financial Statements 202115. NOTICE OF ANNUAL
GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General
Meeting of AssetCo plc (the “Company”) will be held at
4 More London, Riverside, London SE1 2AU at 11 a.m.
on Wednesday 13 April 2022. The Annual General
Meeting is being held to consider and vote on the
Resolutions below. Resolutions 1 to 10 will be proposed
as ordinary resolutions and Resolutions 11 and 12
will be proposed as special resolutions. Voting on all
Resolutions will be conducted by way of a poll vote
rather than on a show of hands.

Please read carefully the notes (the “Notes”) to this
notice of Annual General Meeting (“Notice”). The
Notes include guidance as to the attendance at the
Annual General Meeting, how to vote by proxy and
gives explanations in respect of the Resolutions to be
proposed at the Annual General Meeting.

ORDINARY RESOLUTIONS
1.

To receive the Company’s audited accounts for
the 12 month period ended 30 September 2021,
together with the Directors’ report, the strategic
report and the auditor’s report on those accounts.

To re-elect Martin Gilbert as a Director of the Company.

To re-elect Peter McKellar as a Director of the
Company.

To re-elect Campbell Fleming as a Director of the
Company.

To re-elect Tudor Davies as a Director of the Company.

To re-elect Mark Butcher as a Director of the
Company.

To re-elect Christopher Mills as a Director of the
Company.

8. PricewaterhouseCoopers LLP be re-appointed as
auditors of the Company to hold office from the
conclusion of this Annual General Meeting until the
conclusion of the next Annual General Meeting at
which the accounts are laid before the Company.

The remuneration of PricewaterhouseCoopers LLP
as auditors of the Company be determined by the
Directors of the Company.

10. THAT the Directors of the Company be and are

hereby generally and unconditionally authorised for
the purposes of section 551 of the Companies Act
2006 (“Act”) to allot ordinary shares in the Company
or to grant rights to subscribe for or to convert

any security into ordinary shares in the Company
(“Rights”) up to an aggregate nominal amount of
£421,242 such authority to expire unless sooner
revoked or altered by the Company in general
meeting on 13 April 2023 or at the conclusion of
the next Annual General Meeting of the Company
(whichever is the earlier) and provided further that
the Company may before the expiry of this authority
make an offer or agreement which would nor might
require ordinary shares to be allotted or Rights to
be granted after the expiry of this authority and the
Directors may allot ordinary shares or grant rights in
pursuance of any such offer or agreement as if the
authority conferred hereby had not expired.

SPECIAL RESOLUTIONS
11. THAT subject to Resolution 10 above being passed,
the Directors of the Company be and they are
empowered pursuant to section 570 of the Act to
allot equity securities (within the meaning of section
560 of the Act) wholly for cash pursuant to the
authority conferred by Resolution 10 as if sub-section
(1) of section 561 of the Act did not apply to any
such allotment, provided that this power shall be
limited to the allotment of equity securities:

(a)

in connection with an offer of such securities by
way of rights to holders of ordinary shares in the
Company in proportion (as nearly as may be
practicable) to their respective holdings of such
ordinary shares, but subject to such exclusions or
other arrangements as the Directors may deem
necessary or expedient in relation to fractional
entitlements or any legal or practical problems
under the laws of any territory, or the requirements
of any regulatory body or stock exchange; and

(b) otherwise than pursuant to sub-paragraph (a)
above up to an aggregate nominal amount of
£421,242,

and shall expire on 13 April 2023 or at the
conclusion of the next Annual General Meeting of
the Company in 2023 (whichever is the earlier), and
provided further that the Company may before the
expiry of this authority make an offer or agreement
which would or might require relevant securities to
be allotted after the expiry of this authority and the
Directors of the Company may allot equity securities
in pursuance of any such offer or agreement as if
the authority conferred hereby had not expired.

AssetCo plc | Report and Financial Statements 2021 15. NOTICE OF ANNUAL GENERAL MEETING CONTINUED

12. THAT the Company be and is generally and

unconditionally authorised for the purposes of
section 701 of the Act to make one or more market
purchases (within the meaning of section 693(4) of
the Act) on the AIM market of the London Stock
Exchange of its ordinary shares provided that:

(a) the maximum aggregate number of ordinary
shares authorised to be purchased is 84,484;

(b) the minimum price which may be paid for such
ordinary shares is £0.10 per ordinary share;

(c) the maximum price which may be paid for an
ordinary share shall not be more, at the time
of purchase, than the amount equal to 105
per cent. of the average of the middle market
quotations for an ordinary share as derived
from the London Stock Exchange for the five
business days immediately preceding the date
on which the ordinary share is purchased;

(d) unless previously renewed, varied or revoked,
the authority conferred shall expire at the
conclusion of the next Annual General Meeting
of the Company in 2023; and

(e) the Company may make a contract or contracts
to purchase ordinary shares under the authority
conferred prior to the expiry of such authority
which will or may be executed wholly or partly
after the expiry of such authority and may make
a purchase of ordinary shares in pursuance
of any such contract or contracts, as if such
authority had not expired.

By order of the Board

Stephen Murphy
Company Secretary

11 March 2022

Registered Office:
Singleton Court Business Park
Wonastow Road
Monmouth
NP25 5JA

Registered in England and Wales No. 04966347

AssetCo plc | Report and Financial Statements 202115. NOTICE OF ANNUAL GENERAL MEETING CONTINUED

NOTES:
ENTITLEMENT TO ATTEND AND VOTE
1.

Due to the ongoing COVID-19 pandemic and
in light of the COVID-19 related Government
measures which are presently in place to restrict
social gatherings, as well as overriding health and
safety concerns, the Company has decided to hold
this year’s Annual General Meeting (“AGM”) as a
closed meeting with only the minimum quorum of
two members present. Any members and others
(other than those forming the quorum) are unable
to attend the AGM in person and, in the interests of
safety, will be refused entry.

Members are therefore strongly encouraged to
appoint the chairman of the AGM as their proxy, in
line with the procedures set out in these Notes and
the notes to the form of proxy, to ensure that their
vote is exercised at the AGM. Other proxies will not
be granted access to the AGM.

Only those members registered on the Company’s
register of members at:

(a) 6.30 p.m. on 11 April 2022; or

(b) if the AGM is adjourned, at 6.30 p.m. on the
day two days prior to the adjourned meeting,

shall be entitled to vote at the AGM. Changes to
the register of members after the relevant deadline
shall be disregarded in determining the rights of any
person to vote at the AGM. As mentioned, in light of
the COVID-19 related Government measures which
are present in place, anyone seeking to attend
the AGM in person (other than those forming the
quorum) will be refused entry.

WEBSITE GIVING INFORMATION REGARDING THE AGM
4.

Information regarding the AGM, including a copy of
this Notice and the information required by section
311A of the Companies Act 2006, can be found at
the Company’s website, www.assetco.com.

APPOINTMENT OF PROXIES
5.

If you are a member of the Company at the time set
out in Note 3 above, you are entitled to appoint a
proxy to exercise all or any of your rights to attend,
speak and vote at the AGM and you should have
received a form of proxy with this Notice. You can
only appoint a proxy using the procedures set out in
these Notes and the notes to the form of proxy.

A proxy does not need to be a member of the
Company but must attend the AGM to represent
you. In light of the COVID-19 related Government
measures which are presently in place, anyone
seeking to attend the AGM in person (other than
those forming the quorum) will be refused entry.
Therefore, members intending to appoint a proxy
are strongly encouraged to appoint the chairman of
the AGM as their proxy. Details of how to appoint
a proxy using the form of proxy are set out in the
notes to the form of proxy.

You may appoint more than one proxy provided
each proxy is appointed to exercise rights attached
to different shares. You may not appoint more than
one proxy to exercise rights attached to any one
share. To appoint more than one proxy using a hard
copy proxy form, please contact the Company’s
registrars, Computershare Investor Services PLC,
on 0370 889 3198, to request additional forms
of proxy. As above, in light of COVID-19 related
Government measures, members are strongly
encouraged to appoint the chairman of the AGM as
their proxy. Any other proxy will not be admitted to
the AGM.

A vote withheld is not a vote in law, which means
that the vote will not be counted in the calculation
of votes for or against the Resolution. If no voting
indication is given, your proxy will vote or abstain
from voting at his or her discretion. Your proxy will
vote (or abstain from voting) as he or she thinks fit in
relation to any other matter which is put before the
AGM.

APPOINTMENT OF PROXY USING HARD COPY
PROXY FORM
9.

The notes to the form of proxy explain how to direct
your proxy how to vote on each Resolution or
withhold their vote.

To appoint a proxy using the form of proxy, the form
must be:

–
–

–

completed and signed;
sent or delivered to Computershare Investor
Services PLC at The Pavilions, Bridgwater
Road, Bristol, BS99 6ZY; and
received by Computershare Investor Services
PLC no later than 11.00 a.m. on 11 April 2022.

AssetCo plc | Report and Financial Statements 2021 15. NOTICE OF ANNUAL GENERAL MEETING CONTINUED

In the case of a member which is a company, the
form of proxy must be executed under its common
seal or signed on its behalf by a duly authorised
officer of the company or a duly authorised attorney
for the company.

Any power of attorney or any other authority under
which the form of proxy is signed (or a duly certified
copy of such power or authority) must be included
with the form of proxy.

If you have not received a form of proxy and believe
that you should have one, or if you require additional
proxy forms, please contact Computershare
Investor Services PLC, The Pavilions, Bridgwater
Road, Bristol BS99 6ZY on 0370 889 3198.

APPOINTMENT OF PROXIES THROUGH CREST
10. CREST members who wish to appoint a proxy

or proxies by utilising the CREST electronic proxy
appointment service may do so for the AGM and
any adjournment(s) of it by using the procedures
described in the CREST Manual (available from
https://www.euroclear.com). CREST personal
members or other CREST sponsored members,
and those CREST members who have appointed (a)
voting service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able
to take the appropriate action on their behalf.

In order for a proxy appointment made by means of
CREST to be valid, the appropriate CREST message
(a “CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear UK &
Ireland Limited’s (“EUI”) specifications and must
contain the information required for such instructions,
as described in the CREST Manual. The message
must be transmitted so as to be received by the
issuer’s agent (ID number 3RA50) by 11.00 a.m. on
11 April 2022 or, in the event of an adjournment of
the AGM, 48 hours before the adjourned AGM. For
this purpose, the time of receipt will be taken to be
the time (as determined by the timestamp applied
to the message by the CREST Applications Host)
from which the issuer’s agent is able to retrieve
the message by enquiry to CREST in the manner
prescribed by CREST. After this time, any change
of instructions to proxies appointed through CREST
should be communicated to the appointee through
other means.

11. CREST members and, where applicable, their

CREST sponsors or voting service providers
should note that EUI does not make available
special procedures in CREST for any particular
message. Normal system timings and limitations
will therefore apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the
CREST member concerned to take (or, if the
CREST member is a CREST personal member or
sponsored member or has appointed (a) voting
service provider(s), to procure that his/her CREST
sponsor or voting service provider(s) take(s)) such
action as shall be necessary to ensure that a
message is transmitted by means of the CREST
system by any particular time. In this connection,
CREST members and, where applicable, their
CREST sponsors or voting service providers are
referred, in particular, to those sections of the
CREST Manual concerning practical limitations of
the CREST system and timings.

12. The Company may treat as invalid a CREST

Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.

APPOINTMENT OF PROXY BY JOINT MEMBERS
13. In the case of joint holders, where more than one of
the joint holders completes a proxy appointment,
only the appointment submitted by the most senior
holder will be accepted. Seniority is determined by
the order in which the names of the joint holders
appear in the Company’s register of members in
respect of the joint holding (the first-named being
the most senior).

CHANGING PROXY INSTRUCTIONS
14. To change your proxy instructions, simply submit a
new proxy appointment using the methods set out
above. This can be done at any time provided it is
received by Computershare Investor Services PLC
prior to 11.00 a.m. on 11 April 2022, the start of
the AGM, however, acceptance of any change to
your proxy instructions received by Computershare
Investor Services PLC after 11.00 a.m. on 11 April
2022, being the time that the proxy vote closes, will
be at the sole discretion of the Board.

AssetCo plc | Report and Financial Statements 202115. NOTICE OF ANNUAL GENERAL MEETING CONTINUED

Where you have appointed a proxy using the hard-
copy form of proxy and would like to change the
instructions using another hard-copy form of proxy,
please contact Computershare Investor Services
PLC, The Pavilions, Bridgwater Road, Bristol BS99
6ZY on 0370 889 3198.

If you submit more than one valid proxy
appointment, the appointment received last before
the latest time for the receipt of proxies will take
precedence.

TERMINATION OF PROXY APPOINTMENTS
15. In order to revoke a proxy instruction, you will need
to inform the Company by sending a signed hard
copy notice clearly stating your intention to revoke
your proxy appointment to Computershare Investor
Services PLC, The Pavilions, Bridgwater Road,
Bristol BS99 6ZY. In the case of a member which is
a company, the revocation notice must be executed
under its common seal or signed on its behalf by
a duly authorised officer of the company or a duly
authorised attorney for the company. Any power
of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy
of such power or authority) must be included with
the revocation notice.

Such revocation notice must be received by
Computershare Investor Services PLC no later than
11.00 a.m. on 11 April 2022.

If you attempt to revoke your proxy appointment but
the revocation is received after the time specified
then your proxy appointment will remain valid.

CORPORATE REPRESENTATIVES
16. A corporation which is a member can appoint
one or more corporate representatives who
may exercise, on its behalf, all its powers as
a member provided that no more than one
corporate representative exercises powers over
the same share.

ISSUED ORDINARY SHARES AND TOTAL VOTING RIGHTS
17. As at 10 March 2022 (being the last business
day prior to the publication of this Notice), the
Company’s issued ordinary share capital comprised
8,424,847 ordinary shares of 10p each. Each
ordinary share carries the right to one vote at a
general meeting of the Company and, therefore,

the total number of voting rights in the Company as
at 10 March 2022 is 8,424,847.

VOTING
18. Voting on all Resolutions will be conducted by way
of a poll vote. On a poll, each shareholder has one
vote for every ordinary share held. This will ensure
that the votes of all members are recognised,
including those who are unable to attend the AGM
in person.

COMMUNICATION
19. Except as provided above, members who have
general queries about the AGM should use the
following means of communication (no other
methods of communication will be accepted):-

(a) e-mailing our investor relations team at

info@assetco.com; or

(b) calling the dedicated AssetCo plc shareholder

information line at Computershare on
0370 889 3198.

You may not use any electronic address provided
either:

(a) in this Notice; or

(b) any related documents (including the form of

proxy),

to communicate with the Company for any
purposes other than those expressly stated.

QUESTIONS AT THE AGM
20. Any member has the right to ask questions of the

Company. As the AGM is being conducted as a
closed meeting, questions must be submitted to
the Company in advance using the methods set
out in paragraph 19. The Company must answer
any question you ask relating to the business being
dealt with at the AGM unless:

(a) answering the question would interfere unduly
with the preparation for the AGM or involve the
disclosure of confidential information; or

(b) the answer has already been given on a website

in the form of an answer to a question; or

AssetCo plc | Report and Financial Statements 2021 15. NOTICE OF ANNUAL GENERAL MEETING CONTINUED

THE RESOLUTIONS EXPLAINED
21. The following Notes explain the proposed

Resolutions:

(a) Resolution 1. The Company is required

to present the accounts together with the
Directors report and the auditor’s report to the
AGM for approval.

(b) Resolutions 2 to 7. In accordance with the

Articles of Association of the Company and in
accordance with best corporate governance
practice all the Directors are standing for re-
election.

(c) Resolutions 8 and 9. The auditors must be
re-appointed at each meeting at which the
accounts are laid, to hold office until the
conclusion of the next such meeting. Resolution
9 gives authority to the Directors in accordance
with standard practice to determine the
auditor’s remuneration.

(d) Resolution 10. The Directors may only allot

ordinary shares or grant rights to subscribe for,
or convert any security into ordinary shares,
if authorised to do so by shareholders. The
existing authority to allot ordinary shares
conferred on the Directors at last year’s Annual
General Meeting under section 551 of the Act
expires on the date of the AGM.

Resolution 10 seeks to renew the existing
authority under section 551 of the Act which
would otherwise expire at the AGM, to give the
Board authority to allot ordinary shares and
to grant rights to subscribe for or convert any
security into ordinary shares up to an aggregate
maximum normal amount of £421,242
(representing 4,212,420 ordinary shares of 10
pence each, which represents approximately 50
per cent. of the issued ordinary share capital of
the Company (excluding treasury shares) as at
10 March 2022 being the latest practicable date
prior to the date of this Notice).

The authority granted by this Resolution will
expire at the earlier of the conclusion of the
next Annual General Meeting of the Company
or 13 April 2023. As at 10 March 2022 being
the latest practicable date prior to publication of

this Notice, no ordinary shares are held by the
Company in treasury.

The Company is proposing this Resolution
to give the Directors flexibility to allot ordinary
shares and to grant rights to subscribe for or
convert any security into ordinary shares.

(e) Resolution 11. Under section 561(1) of the Act,
if the Directors wish to allot ordinary shares,
or grant rights to subscribe for, or convert
securities into ordinary shares, or sell treasury
shares for cash (other than pursuant to an
employee share scheme) they must in the first
instance offer them to existing shareholders
in proportion to their holdings. There may be
occasions, however, when the Directors need
the flexibility to finance business opportunities
by the issue of new ordinary shares, for
cash, without a pre-emptive offer to existing
shareholders. This cannot be done under the
Act unless shareholders have first waived their
pre-emption rights. This Resolution 11 seeks to
review the authority given to the Board which
would otherwise expire at the forthcoming
AGM, to allot equity securities for cash on
a non-pre-emptive basis, (a) pursuant to a
rights issue, or (b) up to an aggregate nominal
amount of £421,242 representing 4,212,420
ordinary shares of 10 pence each (which
represents approximately 50 per cent. of the
issued ordinary share capital of the Company
(excluding treasury shares) as at 10 March
2022, being the latest practicable date prior
to the publication of this Notice). The authority
granted by this Resolution will expire at the
earlier of the conclusion of the next Annual
General Meeting of the Company or 13 April
2023.

(f)

Resolution 12. This Resolution will give the
Company the ability to purchase its own
ordinary shares up to a specified amount. The
authority will be limited to market purchases
of up to 84,484 ordinary shares, being 10 per
cent. of the issued ordinary share capital
(excluding treasury shares) as at 10 March
2022, being the latest practicable date prior to
the publication of this Notice.

AssetCo plc | Report and Financial Statements 202115. NOTICE OF ANNUAL GENERAL MEETING CONTINUED

This Resolution sets out the minimum and
maximum prices that the Company can pay
for the ordinary shares. The authority will be
kept under review and the Company will only
exercise the power to purchase after careful
consideration and when the Company is
satisfied that to do so is in the best interests
of the Company and its shareholders under
the circumstances. The authority granted by
this Resolution will expire at the earlier of the
conclusion of the next Annual General Meeting
of the Company or 13 April 2023. Any ordinary
shares purchased would be either held as
treasury shares or cancelled at the discretion of
the Directors.

AssetCo plc | Report and Financial Statements 2021 16. COMPANY INFORMATION

NOMINATED ADVISER
AND CORPORATE BROKER
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR

REGISTRAR
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgewater Road
Bristol
BS13 8AE

WEBSITE
www.assetco.com

COMPANY REGISTRATION NUMBER
04966347

REGISTERED OFFICE
Singleton Court Business Park
Wonastow Road
Monmouth
Monmouthshire
NP25 5JA

DIRECTORS

Martin Gilbert (Chairman)
Campbell Fleming
Peter McKellar
Christopher Mills
Mark Butcher
Tudor Davies

COMPANY SECRETARY
Stephen Murphy

INDEPENDENT AUDITOR

PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
1 Kingsway
Cardiff
CF10 3PW

AssetCo plc | Report and Financial Statements 2021Singleton Court Business Park

Wonastow Road

Monmouth

Monmouthshire

NP25 5JA

[SECTION HEADING]