fLders
Annual Report
for the year ended 31 December 2018
COMPANY NUMBER: 02933559
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Athelney Trust plc
CONTENTS
Directors of the Company
Strategic Report including:
Chairman’s Statement and Business Review
Fund Managers Report
Investment and Portfolio Analysis
Portfolio Breakdown by Sector and by Index
Business Model and Other Statutory Information
Corporate Governance Statement
Report of the Directors
Statement of Directors’ Responsibilities
Directors’ Remuneration Report
Independent Auditors’ Report
Income Statement
Statement of Changes in Equity
Statement of Financial Position
Statement of Cash Flows
Notes to the Financial Statements
Officers and Financial Advisers
Notice of Annual General Meeting
Form of Proxy and Notes
1
Athelney Trust plc
Directors of the Company
Frank Ashton (Executive Chairman)
Frank Ashton, aged 57, is a highly experienced senior manager and independent management consultant. After leaving
Cambridge University with a Natural Sciences degree (Metallurgy & Materials Science), he spent much of his career
providing independent management advice to companies in a wide variety of sectors. With 15 years spent at
PricewaterhouseCoopers and KPMG (Operational Due Diligence) and 5 years working in Strategy and M&A for
Cummins Inc, he has a proven track record in shareholder value creation and governance, in providing strategic and
operational advice to both public and private companies in Europe and USA, as well as working at a policy level for
Government entities.
David Lawman (Non-executive Director)
David Lawman aged 70 years has been associated with the London Stock Market since 1969. During that period, he has
been actively involved in analytical research and marketing of smaller companies at medium sized agency brokers such as
Sheppards and Chase, Seymour Pierce, Williams de Broe and latterly at Daniel Stewart. He has helped to establish
successful corporate broking businesses which has involved him in both floating smaller companies on AIM and raising
equity finance for corporate clients thereby establishing a contact list of most small cap fund managers. He is a Liveryman
with the Worshipful Company of Coach Makers and Coach Harness Makers and a Fellow of the Chartered Institute for
Securities and Investment.
Helen Sachdev (Non-executive Director)
Helen Sachdev, aged 53, is currently Non-Executive Director and Audit Chair of Loughborough Building Society, and
was Non-Executive Director of Communisis plc, the leading provider of personalised customer communication services,
until its acquisition in December 2018. Helen is also currently a Director with the coaching consultancy, WOMBA.
Helen is a Fellow of the Chartered Institute of Management Accountants and has a BA (Hons) in Retail Marketing from
Manchester Metropolitan University. Helen brings a wealth of experience as a non-executive director, underpinned by
extensive blue chip executive experience having worked in senior positions at Barclays plc, Tesco and Sainsbury’s, and
she has a proven track record of operational expertise, corporate development and strategy implementation.
2
Athelney Trust plc
Strategic Report
Chairman’s Statement
Stabilise the Company in readiness for Growth
Overview
Given the challenging markets and various Board developments within Athelney Trust plc (the ‘Company’ or
the ‘Trust’) over the past months, it is perhaps not surprising to have to report mixed results for the Company
in the year ended 31 December 2018. The key points are as follows:
Investment performance as measured by Net Asset Value (NAV) total return, which is the change in
NAV plus the dividend paid, was minus 17.6% (2017: plus 16.8%)
Audited NAV was 225.9p per share (2017: 284.8p) - a decline of 20.7%
Revenue return per ordinary share was 9.9p (2017: 9.6p), an increase of 3.1%
Board/major shareholder disagreements led to approximately £90,000 extra cost (£40,000 pre year
end and £50,000 post year end), ongoing distraction for the Board and general shareholder uncertainty
– more of this would be unsustainable, especially for a fund of this size
Recommended final dividend of 9.1p per share (2017: 8.9p) an increase of 2.2%
The Fund Manager (and then Managing Director), Dr Manny Pohl volunteered in December 2018 to
reduce his salary by 0.25% to 0.75% starting from January 2019
Long term performance represented by the 10 year Total Shareholder Return lags both FTSE SmallCap Index
and AIM All-Share Index (see graph on page 37)
Board and Governance
The Board places significant importance on corporate governance and compliance with the AIC and UK
Corporate Governance Codes. Full details are set out in the Corporate Governance section of our Annual
Report and Accounts on pages 20 to 29.
An Independent Board - Update
There were a lot of movements including five directors who came off the Board, another five who came on and
two reshuffles over the last six months. Details of the various Board changes are on page 31. The directors in
place at the time of signing these accounts are:
Myself, Frank Ashton – Executive Chairman
Helen Sachdev – Non-Executive Director, Chair of Audit Committee
David Lawman – Non-Executive Director
We now have three directors who together make up an independent Board. On 8 February 2019 I took over
the role of Chairman from David Lawman. To the best of my knowledge, like Helen Sachdev, I have no current
or prior connection with any major shareholder of the Company and maintain I am an independent Chairman.
I am also Executive Chairman. Both roles being undertaken by one person is not compliant with the UK
Corporate Governance Code. However after full consideration by the Board it is deemed appropriate at this
critical time for the Company. A detailed explanation of the non-compliant position is available in the Corporate
Governance section.
I believe the Board has created and is now implementing a plan that reflects Robin Boyle’s long-held vision and
ambition for the Company, which he founded 24 years ago. Further details can be found on pages 6 to 8.
3
Athelney Trust plc
Strategic Report
Chairman’s Statement
Stabilise the Company in readiness for Growth
Capital Gains
During the year the Company realised capital profits before expenses arising on the sale of investments in the
sum of £98,840 (31 December 2017: £296,629).
Portfolio Review
Holdings of Belvoir Lettings, Clarke T, Dairy Crest, Hansteen Holdings, Paypoint, Real Estate Investors and Rightmove
were all purchased for the first time. Additional holdings of Braemar Shipping, Cineworld, Epwin, Ibstock, Jarvis
Securities, Marstons, VP and XP Power were also acquired. Connect Group, Debenhams, DX Group, Countrywide, GVC,
Juridica, Low & Bonar, Safestyle, Slingsby, Sprue Aegis, Standard Life and UK Commercial were sold. Nine holdings
were top-sliced to provide capital for the new purchases.
Corporate Activity
The holding of Communisis was taken over at a capital profit of 152.8%.
Dividend
The Board is pleased to recommend an increased annual dividend of 9.1p per ordinary share (2017: 8.9p). This
represents an increase of 2.2% over the previous year. Subject to shareholder approval at the Annual General
Meeting on 3 April 2019, the dividend will be paid on 18 April 2019 to shareholders on the register on 22
March 2019.
Summary
As Chairman, I am pleased that we now have an independent board in place to set up and oversee the
transition to growth – creating shareholder value for all, managing costs and risk. We are now in a
period of stability, which is essential as a precursor to growth
We believe the optimum size for the fund will be between £50m and £150m. At this size we will
have:
-
Sufficient fund management capacity and skills to uncover and maximise potential opportunities
- The ability to consistently deliver superior performance, driven by the right targets and measures
- Reduced risk of breaching the Chapter 3 regulation (five shareholders owning more than 50% of
the Company) that would result in temporarily losing Investment Trust and tax exempt status
- An opportunity to reduce the Ongoing Charge percentage to match or better our peer group
We are in the process of confirming a Fund Management team that in our judgement, will have the
necessary skills and processes in place to identify and realise value-enhancing investment
opportunities, at lower relative risk
We will continue to balance the need to manage costs and also ensure the Company and fund are
supported with appropriate resources now and in the longer term
4
Athelney Trust plc
Strategic Report
Chairman’s Statement
Stabilise the Company in readiness for Growth
Outlook
The world and UK markets have recovered since the start of 2019 (FTSE 100 Index rose over 6% from 31
December 2018 to 1 March 2019). I am very pleased to report that along with this improvement, and with the
active support of Dr Manny Pohl the Fund Manager, the Company’s NAV has also recovered from 225.9p per
share at 31 December 2018 to 235.9p per share (unaudited) at 28 February 2019, an increase of 4.4%.
The February change in NAV was 1.07%, the second monthly increase in a row, outperforming the SmallCap
Index (0.90%) as well as the AIM All-share Index (-0.88%). The share price on 28 February 2019 was 225p,
trading at a discount of 4.84%, a substantial improvement on the position just after the shareholder
requisitioned General Meeting (GM) when the discount briefly increased to more than 20%. This is the point
I joined the board. Ever since the GM, we appear and are more stable; this report will address a number of
basic shareholder questions about the near and medium-term future stability, including recommended dividend
and management plan, that should reduce uncertainty.
Externally, uncertainties continue for a UK small-cap fund.
Brexit rumbles on, struggling between the need for a political outcome that reflects the balanced voting 52:48
in the referendum, and the realities of negotiation between two sides with a lot to lose, economically and
politically – the UK government and remaining 27 member states of the EU. How or even when this will end
is still uncertain. The manner of Brexit, whatever it is, and also developments on the global stage will impact
the economy and sterling in the short term; we invest for the longer term in quality stocks and are mindful of
opportunities that arise as a result in the shorter term.
The US economy is unlikely to repeat its 2018 outperformance and Washington’s more hostile approach to
trade is a driver of convergence of larger developed economies’ growth and a thorn for the UK’s trade
negotiators post Brexit. More protectionism and continued uncertainty has already translated to companies
deferring investment or freezing recruitment, and there are signs global companies will move capacity away
from the UK over time.
We are watching these market trends closely to see which Company plans, if any, need to change as the market
cycle continues – there will be turbulence, but we are here for the long term.
We are excited to see the prospect of a new-look Athelney Trust on the horizon. We must continue to deliver
to all shareholders a period of stability and solid performance as well as listen to their feedback and needs, then
using that information, build an even stronger future.
So far our listening and analysis has produced the following common ground: The Trust has a history of good
results, but recent events also show it is vulnerable, because of its size and pattern of shareholding. Many would
like to see it grow, and at least some see the advantage of external Fund Management in that regard. Dividends
are progressive but some criticise total shareholder returns over the long term and also the fund’s size.
5
Athelney Trust plc
Strategic Report
Chairman’s Statement
Stabilise the Company in readiness for Growth
The conditions need to be right – right to convince existing shareholders that growth is possible (because the
Company is once again stable over a period of months at least) and then right to attract new shareholders over
time. The benefits from our plan to Stabilise and Grow are set out in Figure 1 below.
Figure 1 - The Board's Plan to Stabilise and Grow the Company and Fund
I believe we now have the right elements in place, and a process and plan to unite them, so that the foundations
for ‘Readiness to Grow’ are in place. Shareholder support for continuation with this plan will be sought at the
AGM.
The plan’s foundations are:
1. A carefully reviewed and confirmed mandate, with continued focus in the small/mid-cap territory
2. A Fund Management team capable of delivering significant benefits realised from an optimal size
(around £100m total assets)
3. A fund which is large enough to attract further investors and reduce the risks of accidentally losing
investment trust status
4. Realising a larger fund allows us to reduce the Ongoing Charge percentage as well as attract, retain the
best resources
6
Athelney Trust plc
Strategic Report
Chairman’s Statement
Stabilise the Company in readiness for Growth
We appreciate the hard-working contribution of Dr Manny Pohl, the current Fund Manager and second largest
shareholder (17.6%) and continue to discuss his role.
We are grateful for the support and interest shown by Gresham House Asset Management (Gresham House).
Since December 2018 Gresham House has worked hard with Robin Boyle, the largest shareholder (20.8%) to
set up an ‘externally-managed Fund’ option for the Company. Robin founded the Company 24 years ago and
until last September was Managing Director and Fund Manager. Now, as he considers the future, he wants to
help realise the most attractive, sustainable future possible for Athelney Trust. Those of Robin’s friends and
family who are also shareholders and have been contacted, agree with our initial assessment that Gresham House
appears to be a very attractive route to preserve and grow shareholder value.
I believe, along with my colleagues, that although Dr Manny Pohl has investment success through ECP Asset
Management, when it comes to maximising shareholder value, the Gresham House option represents a strong
alternative as it has the following features;
More investment management capacity from existing, proven skills and experience in UK small- and
mid-cap companies – not just from Robin Boyle who would be a consultant to Gresham House but also
Investment Manager Laurence Hulse, his manager Ken Wotton and the wider team of Gresham House.
These UK-based segments are where the undervalued companies are and this team has the capacity to
find and realise value for shareholders, now and in the future when the fund has grown
More due diligence face-face with the management team – which often produces invaluable insights
otherwise not available at any price. In my own experience of due diligence and work with
management teams of all sizes, personal visits always give a clearer view of management, their
processes, culture and aspirations that aids making better investment management decisions. ‘In person
due diligence’ has always been central to Robin Boyle’s process and this is also true of Gresham House
A route for Robin Boyle’s knowledge, insights and investment process to be teamed with Gresham
House’s compatible value-based structure and conviction scoring. This teamwork and parallel working
can be co-located in Gresham House’s London office, allowing the most effective transition and
succession plan for Robin Boyle’s knowledge over time. Robin would work closely with Laurence
Hulse, Investment Manager at Gresham House, from the start; they already speak highly of each other
from their work to date
A great opportunity to use Gresham House’s proven ability to grow in the UK market, as well as select
from a choice of mandates, used successfully by them – the existing Gresham House culture,
management style and portfolio structure fits well with our Company
Finally we believe a move to a ‘Gresham House with Robin Boyle’ Fund Management option, could happen
quickly after the AGM, with low risk and limited cost to Athelney and its shareholders, so that free cash flows
over time can be quickly optimised. At the moment, given Dr Manny Pohl’s resolutions that, if carried, would
re-shuffle the Board once again, we are blocked from committing the Company to further contracts, and
therefore unable to proceed more quickly.
7
Athelney Trust plc
Strategic Report
Chairman’s Statement
Stabilise the Company in readiness for Growth
We will use the time up to the AGM to complete our review of the options available to the Company, and to
determine the best option for shareholders.
We have a particularly important AGM this year. Given the resolutions presented, shareholders have a clear
choice to determine the future direction and prospects for the Company.
Some resolutions are the usual and expected ones, including those to re-elect myself and Helen Sachdev (new
directors appointed since the last AGM, not voted on to the Board by shareholders).
Others, requisitioned by Dr Manny Pohl, if carried, return himself and Simon Moore to the Board and vote
David Lawman off, almost perfectly reversing the result of the GM held a month ago. We believe this returns
shareholders to the conditions of late 2018, and will introduce further uncertainty and delay.
We, the current Board of Directors, have quickly created an effective and proactive working relationship. We
are in the process of stabilising the Company by doing what all directors must: Listen to the needs of all
shareholders, explore all options to create shareholder value and carry out our fiduciary duties in a collaborative
way that embodies the AIC Code of Governance.
Compared to our plan we believe the implied direction from the Dr Manny Pohl resolutions represents less
shareholder value, and carry the prospect of continued instability and we therefore recommend you vote against
his resolutions.
We believe the current Board has understood the current position quickly and selected the plan that we are
confident is best for shareholders and the future of the Company.
We look forward to a good relationship with existing and future shareholders, and with the right management
team in place, are confident in the prospects for Athelney Trust PLC.
Frank Ashes
Frank Ashton
Executive Chairman
4 March 2019
8
Athelney Trust plc
Fund Manager’s Review of 2018
Delivering Steady Performance in a Difficult Market
2018 in Review
The 2018 calendar year began with strong growth across many global economies, however, the wheels began
to fall off quickly, with growth trajectories diverging. After two years of steady growth in asset prices, the
13.7% fall in the MSCI World Index in the last three months of 2018 means global stocks produced their worst
quarterly performance in seven years leading to a decline of 10.4% for the full year. In comparison, the FTSE
performed slightly better during the quarter, declining by only 10.4% to close 12.5% down for the full financial
year.
Since the Global Financial Crisis (GFC), equities have been a major beneficiary of the low-interest rate and
loose monetary policy environment. Companies have been able to borrow money cheaply to strengthen their
balance sheets while also benefiting from a pick-up in demand as the global economy recovered. Low-interest
rates have driven down the yield on other asset classes such as bonds, with UK government bonds yielding
around 1.3% compared with the FTSE All Share Index which yields approximately 4.0%. Now that UK and
US interest rates have each risen by 0.25% in late 2018, markets have recovered well.
The year of 2018 saw disappointing market returns and higher correlation between asset classes. For many, the
geopolitical risks around the global have presented investors with an uncertain future with a poor growth
outlook.
Investment Philosophy
As a survivor of the stock market crash in 1987 and the GFC in 2008, I have learned the importance of having
the courage to stand true to core values when approaching investments and be willing to source conviction from
within. When times get tough, the delineation between facts and feelings is blurred and having a high
conviction, based on a core philosophy, helps us move through these turbulent and traumatic snapshots in time.
I have found that when the dust settles, and we look back on these events, there is quite a thrilling tale; but only
for those who stood by their convictions.
At the core of my values is the belief that the underlying economics of a business drives its long-term returns.
Companies who are growing their economic footprint (profitably) are generally better investment opportunities
than those that aren't. I would rather invest in a smaller number of companies which I understand well than a
large number of companies of which I have only a cursory understanding. As a custodian of other people’s
money, I owe it to those who have invested alongside us to allocate their capital to opportunities that I believe
will produce the best return for shareholders.
As a high-conviction, quality-growth manager that invests for the long-term, my promise ensures that: 1 - I will
never speculate to generate returns; 2- I buy for the long-term and do not see myself as a trader; and, 3 - I do
not diversify to cover up for poor due diligence.
9
Athelney Trust plc
Fund Manager’s Review of 2018
Delivering Steady Performance in a Difficult Market
Our Task
My task begins with the mandate of Athelney Trust – to provide shareholders with prospects of long-term
capital growth in quality small-cap companies, while maintaining a progressive dividend record. With this in
mind, the first task when taking over the portfolio was to consolidate the holdings and divest of poor-quality
companies, without jeopardising the progressive annual dividend. My portfolio review identified several
investments with lacklustre long-term growth prospects, with some investments where the business model is
under serious threat.
The request for a GM presented some uncertainty for our Company and meant I ceased making further
wholesale changes to the portfolio in the event that fund management would revert back to Robin Boyle.
With the GM behind us, I will continue to deliver superior returns for shareholders. Note, I will remain mindful
that our investment turnover should remain low while aiming to have no more than fifty companies in the
portfolio. Further, I am pleased to report that the Company realised capital profits before expenses arising from
the sale of investments in the sum of £98,840 (31 December 2017: £296,629).
Redefining Active Investing
While the active versus passive debate continues, and while the focus of the industry has been on the fees paid
rather than on the returns generated, the more compelling issue which needs to be addressed is, in fact, manager
skill in picking quality investments rather than having a broad portfolio and replicating an index. In all of this,
the acid test is longer-term investment performance and the only way to grow sustainable wealth that is resilient
through time is to invest money in a careful, considered and committed way. I adhere to an Active Investing
approach and believe that it requires:
I. Forensic Research: Considerable factors need to line up before I invest in a business. For example, a
sound business strategy that is contextually relevant to the markets they operate. A durable business
model with a Sustainable Competitive Advantage (SCA) that management has previously demonstrated
a strong competency of execution.
II. Understanding Potential, not just Performance: I believe it’s important to understand both the narrative of
an investment and the numbers that support it. Investing on the narrative alone ignores reality; and
investing in numbers alone, ignores potential. I marry the two together so that we can best capture the
long-term potential while ensuring that we pay a fair price.
III. Being Highly Engaged with Portfolio Companies: To make high conviction investment decisions and to maintain these
over the long-term requires deep understanding and a lot of time and attention. It means I need to think about
investing as an owner, and not a share trader. As a result, I only have time for our best ideas, and we continue
to monitor and assess these through collaborative and discursive practices
.
10
Athelney Trust plc
Fund Manager’s Review of 2018
Delivering Steady Performance in a Difficult Market
Environmental, Social and Governance Considerations
In more recent times, investment management is more than merely generating performance in excess of a
benchmark. While that is a core part of a mandate, there are other very important qualitative issues that are
central to what should be done. For example, one should recognise that capital allocation is a vehicle through
which to drive change. I have the opportunity to demand specific standards of corporate governance, decide
whether specific social and ethical issues are acceptable and, if they are not, I vote with my feet.
For me, the integrity and credibility of any management team is a founding principle to our investment process.
I need to trust that management have the best interests for all stakeholders, and I have faith that they will make
sound strategic decisions and have strong experience and capabilities in their chosen field. As custodians of
shareholders’ capital, we have an obligation to ensure that we are doing whatever we can to preserve capital
and grow it over time. I allocate capital to investments which are sustainable in the long-term, and finding
trustworthy, values-based management that align with my core values and beliefs that will ensure above-average
economic portfolio returns.
Recent Additions
Since taking over the management of the portfolio I added only one position: Rightmove Plc (LSE: RMV).
Rightmove has been able to ride the paradigm shift from papers to online. Its principal business is their website
(www.rightmove.co.uk) where its customers - estate agents, rental agents and new home developers - pay fees
to have their properties displayed on the website, which provides home hunters with property details to search.
The business competes for classified property advertising and has seen impressive growth. Rightmove’s success
means it is now a household name; and its opportunity ahead remains large, particularly compared to the other
online pure-plays.
Update
The unaudited NAV on 28 February 2019 was 235.9p per share – up 1.07%, the second monthly increase in a
row and beating the SmallCap Index (0.90%) as well as AIM All-share Index (-0.88%). The share price on the
same day was 225p (trading at a discount of 4.84%). Further updates can be found at www.athelneytrust.co.uk
11
Athelney Trust plc
Fund Manager’s Review of 2018
Delivering Steady Performance in a Difficult Market
Prospects
To this end, I will continue to consolidate the REIT and property exposure into names that have a limited
exposure to retail and display the ability to grow their dividend over time. For any new additions, I will ensure
that the investments fit within our investment philosophy, while adhering to the Company Mandate. The key
attributes that will define my investments are:
I. Organic Sales Growth: Quality franchises organically growing sales above GDP and can do so (sustainably)
because they have a large, growing market opportunity and compelling competitive advantage which
will drive ongoing market share gains.
II. A Proven Track Record: This encompasses both the management’s capability and the strength of the
business’ model. Generally, a firm that delivers a ROE > 15% (consistently) indicates a Quality
Franchise. Our investment philosophy is built on the belief that a stock’s long-term return to
shareholders is driven by the return on capital of the underlying business. Our view is that long-term
investors are backing a management team and a business model. Management are the key decision-
makers regarding the company’s strategy and its competitive position in the marketplace.
III. Company's future profits: It is critical that I have confidence in their ability to execute even in a tough
environment like the current Brexit conundrum.
IV. Low Leverage: I require investments to operate with low levels of debt, which ensure that they have
sufficient resources to execute on its strategy. For me, an Interest Coverage above 4x provides
sufficient bandwidth in times of economic trouble. As a long-term investor, capital preservation is my
highest priority. There is nothing that changes a management team’s focus toward the short term
quicker than an upcoming debt refinance when market conditions suddenly change. We need to be
comfortable that this will not happen and that the company has a strong enough balance sheet so that it
will retain optionality and can easily execute its strategy over the long-term.
For me, investment discipline is a prerequisite for success, and I am going to ensure a consistent approach to
investments during this uncertain time.
Dr Manny Pohl
Fund Manager
4 March 2019
12
SECTOR
£
46,970
%
1.0%
333,368
62,850
7.2%
1.4%
108,049
2.3%
693,324
39,360
14.9%
0.8%
181,430
3.9%
187,810
4.0%
68,985
136,575
1.5%
2.9%
290,398
6.2%
Athelney Trust plc
Investment and Portfolio Analysis at 31 December 2018
Stock
Holding
Value (£)
Chemicals
Construction & materials
Electronic & electrical equipment
Food & beverages
General financial
Home construction
Industrial engineering
Industrial transportation
Insurance
Leisure goods
Media
Property, commercial &
residential
11,000
14,666
55,000
50,000
40,000
15,500
30,000
3,000
10,000
19,000
8,000
500
35,714
27,000
15,000
140,000
40,000
150,000
22,500
4,000
15,000
12,000
2,000
7,000
4,000
30,000
3,000
6,500
16,000
30,000
4,500
2,000
40,000
16,000
50,000
42,500
2,000
32,500
45,000
65,000
85,000
135,000
40,000
45,000
50,000
52,500
11,000
32,500
1,500
13,000
175,000
90,000
50,000
89,000
50,000
46,970
46,198
47,740
36,200
89,400
54,250
59,580
62,850
42,200
33,849
32,000
52,750
77,499
124,200
44,265
101,500
65,600
46,950
50,625
84,800
45,135
39,360
50,000
83,930
47,500
60,450
51,960
75,400
55,200
13,785
136,575
36,800
43,000
46,080
36,500
28,008
8,644
57,931
33,435
57,850
73,950
37,125
46,480
41,400
46,300
59,588
44,000
56,518
138,000
40,820
148,925
44,280
46,200
50,819
52,750
Treatt
Costain Group
Clarke T
Epwin Group
Forterra
Heath (Samuel) & Sons
Ibstock
XP Power
Dairy Crest
Greencore Group
Wynnstay Group
Camellia
Charles Taylor
Jarvis Securities
Jupiter Fund Management
Park Group
Randall & Quilter Investment Holdings
Record
River & Mercantile Group
S & U
TP ICAP
Crest Nicholson
Goodwin
Hill & Smith
Vitec
Braemar Shipping Services
Fisher (James)
Ocean Wilsons
Chesnara
Hansard Global
Games Workshop
4Imprint
Huntsworth
M&C Saatchi
Quarto Group Inc Com
Reach
Rightmove
Wilmington
XLmedia
AEW UK REIT
Belvoir Lettings
Capital & Regional
Custodian REIT
F & C UK Real Estate Investments
Hansteen Holdings
Harworth Group
Lok’n Store Group
London Metric Property
Mountview Estates
Palace Capital
Picton Property Income
Real Estate Investments
Regional REIT Ltd
Schroder Real Estate Investment Trust
Schroder European Real Estate
13
Athelney Trust plc
Investment and Portfolio Analysis at 31 December 2018
Stock
Holding
Value (£)
SECTOR
£
%
Property, commercial &
residential (continued)
Retailers
Support services
Target Healthcare
The PRS REIT
Town Centre Securities
Tritax Big Box
McColls Retail Group
Andrew Sykes Group
Begbies Traynor
Biffa
Gattaca
Kin & Carta
Latham (James)
Menzies (John)
Murgitroyd
NWF Group
Paypoint
Safecharge International
Vianet Group
VP
Telecommunications
KCOM Group
Travel & leisure
Air Partner
Cineworld
Greene King
Hostelworld
Marstons
Photo-Me
100,000
50,000
27,500
60,000
35,000
19,500
80,000
25,000
21,500
37,500
5,500
9,500
12,500
35,000
5,000
20,000
50,000
19,000
56,000
112,500
37,500
10,000
22,500
80,000
32,500
107,500
47,100
56,650
78,720
19,355
92,040
52,640
48,900
22,253
36,225
34,375
48,545
56,250
54,950
40,400
46,000
50,500
186,580
40,824
93,374
98,625
52,780
45,338
75,200
28,990
1,274,975
19,355
27.5%
0.4%
769,658
40,824
16.6%
0.9%
394,307
8.5%
Portfolio Value
Net Current Assets
TOTAL VALUE
Shares in issue
£4,648,238
£225,415
£4,873,653
2,157,881
Audited NAV
225.9p
14
Athelney Trust plc
Portfolio Breakdown by Sector and Index
Portfolio by Sectors
1.0% Chemicals
7.2% Construction
materials
8.5% Travel & leisure
0.9%
Telecommunications
1.4% Electronic &
electrical equipment
2.3% Food & beverages
16.6% Support services
0.4% Retailers
14.9% General financial
0.8% Home
construction
3.9% Industrial
engineering
4.0% Industrial
transportation
1.5% Insurance
27.5% Property,
commercial &
residential
2.9% Leisure goods
6.2% Media
Portfolio by listing
17.7% FTSE Mid 250
7.6% Non Indexed
0.2% FTSE 100
24.0% AIM
42.8% Small Caps
7.7% Fledgling
15
Athelney Trust plc
Business Model and Other Statutory Information
Business Model
The Business Model and principal activity of the Company remained unchanged throughout the year ended 31
December 2018.
Strategy
The long term strategy of Athelney Trust PLC is to pursue its investment objective and deliver shareholder
value by operating as an investment trust company (as explained on pages 30 to 33 – Directors’ Report).
Investment trusts are collective closed-ended public limited companies. The investment trust company
structure allows the shareholders, whether institutions or private investors, to access a diversified portfolio of
investments that is professionally managed, and so reduce risk over time compared to investing themselves.
Stabilising the Company and Growing the Fund
What is clear, however, is that there is a growing imperative to grow the fund. Our fund must be larger to
deliver better long term performance in all measures. The Board will continue in the early part of 2019 to
stabilise the Governance and running of the fund. The Board will also in parallel carry out the necessary
preparation to grow the fund. This in turn will allow the fund over time to move to a proportionally lower
Ongoing Charge and in the short term, reduce the risk of losing its tax status, as well as better overall
performance.
The Mandate will evolve, but will focus on similar opportunities - small-/mid-cap development from the
existing portfolio, allowing value-/conviction-based process to uncover under-researched opportunities and so
deliver superior performance.
Stabilising the
Company
Growing the Fund
New Board appointed, process in place to appoint long term Fund Manager
We believe the optimum size for the fund will be between £50m and £150m. At this size
we will have:
-
Sufficient investment management capacity to maximise potential
opportunities
- The ability to consistently deliver superior performance
-
Significantly reduce the risk of losing the Trust’s tax status by an inadvertent
breach of the 5/50 rule
Reduce Cost
Growing whilst keeping a tight control of costs will allow us to reduce the Ongoing Charge
percentage to be in line with or better than the peer group
Investment Approach – the Board
The Board of Directors is responsible for the overall stewardship of the Company, including investment and dividend
policies, corporate and gearing strategy, corporate governance procedures and risk management. Biographical details of
the three Directors, can be found on page 2 and details of other Directors during the year can be found on page 31.
The Company had one male employee during the year (2017: one male employee).
16
Athelney Trust plc
Business Model and Other Statutory Information
(continued)
Investment Objective
The investment objective of the Trust is to provide shareholders with prospects of long-term capital growth with the risks
inherent in small cap. investment minimised through a wide spread of holdings over various industries and sectors. The
Board also considers that it is important to maintain a progressive dividend record.
Investment Policy
The assets of the Trust are allocated predominantly to companies with either a full listing on the London Stock Exchange
or a trading facility on AIM or ISDX. The assets of the Trust have been allocated in two main ways: first, to the shares of
those companies which have grown steadily over the years in terms of profits and dividends but, despite this progress, the
market rating is favourable when compared to future earnings and dividends; second, to those companies whose shares
are standing at a favourable level compared with the value of land, buildings or cash in the balance sheet.
Investment Strategy
The investment strategy employed by the Fund Manager in meeting the investment objective focuses on active stock
selection. The selection of individual holdings is based on analysis of, amongst other things, market positioning,
competitive advantage, financial strength and cash flows. The weighting of individual investments reflects the Fund
Manager’s conviction in those holdings and his views on asset allocation, including between UK and overseas equities,
corporate bonds, cash and gearing.
Investment of Assets
At each Board meeting, the Board considers compliance with the Company’s investment policy and other investment
restrictions during the reporting period. An analysis of the portfolio on 31 December 2018 can be found on pages 13 to
14 of the annual report.
Responsible Ownership
The Fund Manager takes a particular interest in corporate governance and social responsible investment policy. As stated
within the Corporate Governance Statement on pages 20 to 29, the Fund Manager’s current policy is available on its
website www.athelneytrust.co.uk. The Board supports the Fund Manager on his voting policy and his stance towards
environmental, social and governance issues.
Review of Performance and Outlook
Reviews of the Company’s returns during the financial year, the position of the Company at the year end, and the outlook
for the coming year are contained in the Chairman’s Statement on pages 3 to 8 which forms part of the Strategic Report.
Principal Risks and Uncertainties and Risk Management
As stated within the Corporate Governance Statement on pages 20 to 29, the Board applies the principles detailed in the
internal control guidance issued by the Financial Reporting Council, and has established a continuing process designed to
meet the particular needs of the Company in managing the risks and uncertainties to which it is exposed.
17
Athelney Trust plc
Business Model and Other Statutory Information
(continued)
The principal risks and uncertainties faced by the Company are described below and in note 12 which provides detailed
explanations of the risks associated with the Company’s financial instruments.
• Market – the Company’s fixed assets consist almost entirely of listed securities and it is therefore exposed to movements
in the prices of individual securities and the market generally.
• Investment and strategic – incorrect investment strategy, asset allocation, stock selection and the use of gearing could
all lead to poor returns for shareholders.
• Regulatory – relevant legislation and regulations which apply to the Company include the Companies Act 2006, the
Corporation Tax Act 2010 (“CTA”) and the Listing Rules of the Financial Conduct Authority (“FCA”). The Company has
noted the recommendations of the UK Corporate Governance Code and its statement of compliance appears on
pages 20 to 29. A breach of the CTA could result in the Company losing its status as an investment company and
becoming subject to capital gains tax, whilst a breach of the Listing Rules might result in censure by the FCA. At each
Board meeting the status of the Company is considered and discussed, so as to ensure that all regulations are being
adhered to by the Company and its service providers.
On the 3 January 2018 MiFIDll and KID came into force with the introduction of the Key Information Document (KID).
The Company has complied with the legislation and the deadlines to ensure that shares in the Company were still able to
be traded. A copy of the Company’s KID can be found on the website www.athelneytrust.co.uk. The reports are updated
on a yearly basis.
The Board is not aware of any breaches of laws or regulations during the period under review and up to the date of
this report.
• Operational – failure of the accounting systems or disruption to its business, or that of other third party service
providers, could lead to an inability to provide accurate reporting and monitoring, leading to a loss of shareholders’
confidence.
• Financial – inadequate controls by the Fund Manager or other third party service providers could lead to
misappropriation of assets. Inappropriate accounting policies or failure to comply with accounting standards could lead
to misreporting or breaches of regulations.
• Liquidity – the Company may have difficulty in meeting obligations associated with financial liabilities.
The Board seeks to mitigate and manage these risks through continual review, policy setting and enforcement of
contractual obligations. It also regularly monitors the investment environment and the management of the Company’s
investment portfolio. Investment risk is spread through holding a wide range of securities in different industrial sectors.
Statement Regarding Annual Report and Financial Statements
Following a detailed review of the Annual Report and Financial Statements by the Audit Committee, the Directors
consider that taken as a whole it is fair, balanced and understandable and provides the information necessary for
shareholders to assess the Company’s performance, business model and strategy.
Environment Emissions
The Company does not have any physical assets, property, or operations of its own and as such does not generate any
greenhouse gas or other emissions.
18
Athelney Trust plc
Business Model and Other Statutory Information
(continued)
Social, Community and Human Rights Issues
The Company has one employee (2017: one employee) and, as far as the Board is aware, no issues exist in respect of
social, community or human rights issues.
Alternative Investment Fund Manager’s Directive (“AIFMD”)
The Company is registered as its own AIFM with the FCA under the AIFMD and confirms that all required returns have
been completed and filed.
BY ORDER OF THE BOARD
J. Girdlestone
Secretary
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW
4 March 2019
19
Athelney Trust plc
Corporate Governance Statement
Shareholders hold the Directors of a company responsible for the stewardship of that company’s affairs. Corporate
governance is the process by which a board of Directors discharges this responsibility. The Company’s arrangements in
respect of corporate governance are explained in this report.
Statement of Compliance with the UK Corporate Governance Code
The Company is required to comply with, or to explain its non-compliance with, the relevant provisions of the UK
Corporate Governance Code issued by the Financial Reporting Council (the ‘FRC’) in April 2016 which can be found at
www.frc.org.uk. The Association of Investment Companies issued its own Code of Corporate Governance in July 2016
(the ‘AIC Code’), which can be found at www.theaic.co.uk and which has been approved by the FRC as it addresses all
the principles of the UK Corporate Governance Code as well as setting out additional principles and recommendations
on issues which are of specific relevance to investment trusts. The Board considers that reporting against the principles
and recommendations of the AIC Code provides better information to shareholders than the UK Corporate Governance
Code on its own.
The Company has not complied with the provisions of the Corporate Governance Code in respect of the following:
Frank Ashton holds the role of Executive Chairman. The background is the uncertainty faced by the Company and
its shareholders, following the changes to the composition of the board at, and immediately after, the shareholder-
requisitioned General Meeting (GM) on 22 January 2019. The board believes there is considerable support from
shareholders to resolve the shareholder dispute over time, and in the meantime stabilise and grow the Fund. In the
short term, a lot of work is required to set this up. Much of this work has and is being performed by Frank Ashton.
As a result of this work, the board now believes it has the resources and skills, in the absence of a permanent
executive director, to bring all parties towards a common ground that allows a more viable and attractive future for
all shareholders, including the two major shareholders.
At the same time, the Company has been on a critical path to Annual Reporting and the AGM. The Company is on
schedule to comply as planned, but has needed executive input from Frank Ashton to meet this timetable.
As a result the board resolved to appoint Frank Ashton as Executive Chairman of the Company until the end of May
2019, in the expectation that by that time we will have reached resolutions of the various challenges facing the
Company. Mr Ashton’s role as Executive Chairman will be reviewed by the board following the AGM on 3 April
2019, allowing changes or any recruitment to take place as the workload reduces, which we believe should happen
by the end of May 2019.
The Board notes that the appointment of an Executive Chairman, whilst not in compliance with the UK Corporate
Governance Code, does not offend against the Compliance Code recommended for investment companies such as
the Company by the Association of Investment Companies, and is approved by the Financial Reporting Council as
an acceptable corporate governance code for such companies.
In mitigation of risk all three directors will sit on the Audit Committee (chaired by Helen Sachdev) and
Remuneration Committee.
Due to the size of the Board, formal performance evaluations of the Chairman, the Board, its Committees and
individual Directors are not undertaken. Instead it is felt more appropriate to address matters as and when they
arise.
Due to the size of the Board, it is felt inappropriate to appoint a senior independent non-executive Director.
20
Athelney Trust plc
Corporate Governance Statement
(Continued)
All the Directors have agreements for provision of their services but no limit has been imposed on the overall length
of service. The recommendation of the Code is for fixed term renewable contracts. In recent years each of the
Directors has retired and, where appropriate, sought re-election each year. The Directors retire by rotation on a
three yearly basis in accordance with the Company’s articles of association with effect from the 2017 AGM.
The Company has one employee. The Company Secretary’s line of communication in relation to whistle-blowing is
to the Chairman of the Company.
The Company does not have a Nominations Committee. During the year the Board consisted of only three Directors
who liaised continuously throughout the year and were aware of their obligations to consider recruitment of further
Directors as and when the occasion occurred. The Board are in the process of setting up a Nominations Committee
for 2019.
Board Membership
During the year and post year end the following Board changes took place:
On 26th September 2018 Mr Robin Boyle, the Managing Director and Fund Manager, resigned as a Director of the
Company with immediate effect. Subsequently an emergency Board meeting was held on 1st October 2018, Dr Manny
Pohl was appointed Managing Director and Fund Manager and Mr Simon Moore was appointed Chairman. The Board
decided to actively seek to appoint a new non-executive Director as a matter of urgency.
Mrs Jemma Jackson was appointed as a non-executive Director on 1st December 2018 to be effective until the next AGM
when she would retire and seek re-election.
On 20th December 2018 the Board received a letter from the Director of Trehellas House Limited, a major shareholder
in Athelney Trust. The Director of Trehellas House, Mr Robin Boyle, called for the Company to hold a GM within the
timescales detailed in the Companies Act 2006.
The following ordinary resolutions were requisitioned by Mr Robin Boyle, circulated to Shareholders in a GM notice on
28 December 2018, and voted on at the GM on 22 January 2019, where the Shareholders voted as follows:
Ordinary Resolution 1
AGAINST
The proposed re-appointment of Robin Boyle as a Director of the Company
Ordinary Resolution 2
The proposed appointment of David Lawman as a Director of the Company
Ordinary Resolution 3
The proposed appointment of Paul Coffin as a Director of the Company
Ordinary Resolution 4
The proposed termination of Dr Emmanuel Pohl as a Director of the Company
Ordinary Resolution 5
The proposed termination of Simon Moore as a Director of the Company
Ordinary Resolution 6
The proposed termination of Jemma Jackson as a Director of the Company
FOR
FOR
FOR
FOR
FOR
21
Athelney Trust plc
Corporate Governance Statement
(Continued)
Ordinary Resolution 7
FOR
The proposed termination of Jason Pohl as alternate Director of the Company
Ordinary Resolution 8
The termination of the appointment of any Director appointed on or after the date of this
notice, and prior to the consideration of this resolution at a general meeting of the
NOT VOTED UPON
*
Company.
*Resolution 8 was not voted on due to the fact that no further Directors had been appointed to the Board since the notice
of the GM was published.
As a result of the GM on 22nd January 2019 the three Directors who were on the Board at the year end were terminated
and two new Directors were appointed, Mr David Lawman and Mr Paul Coffin.
On the 25th January 2019 Mr Paul Coffin resigned as a Director of the Company and Mr Frank Ashton was appointed in
his place. The biographies of all the current Directors are contained on page 2.
At 31 December 2018 the Board consisted of three Directors, of which two were independent.
The Board has agreed that Frank Ashton and Helen Sachdev will retire at the forthcoming AGM and each of them has
indicated that they will seek re-election. Re-election is subject to a continuing satisfactory performance by the director
seeking re-election; the Board confirm that they are happy for Frank Ashton and Helen Sachdev to seek re-election at the
forthcoming AGM.
The Board believes that Frank Ashton and Helen Sachdev are Directors independent in character and that there are no
relationships or circumstances which are likely to affect their judgement. All Directors receive relevant training,
collectively or individually, as necessary.
The Directors believe that the Board has the balance of skills, experience, ages and length of service to enable it to provide
effective leadership and proper governance of the Company. The Directors possess a range of business and financial
expertise relevant to the direction of the Company and consider that they commit sufficient time to the Company’s affairs.
The Directors of the Company meet at regular Board Meetings. During the year ended 31 December 2018, the Board
met a total of 15 times. Mr Robin Boyle attended all meetings until his resignation on 26th September 2018.
Dr. E C Pohl
R G Boyle
S Moore
J Jackson
Board
Audit
Meetings Committee
15
9
15
-
1
-
1
-
Remuneration
Committee
1
-
1
-
22
Athelney Trust plc
Corporate Governance Statement
(Continued)
The Board subscribes to the view expressed in the AIC Code that long-serving Directors should not be prevented from
forming part of an independent majority. It does not consider that the length of a Director’s tenure reduces their ability
to act independently. The Board’s policy on tenure is that continuity and experience are considered to add significantly
to the strength of the Board and, as such, no limit on the overall length of services of any of the Company’s Directors,
including the Chairman, has been imposed, although the Board believes in the merits of periodic and progressive
refreshment of its composition.
The Board of Directors of the Company comprised three male and one female Director in the year to 31 December 2018.
Whilst the Board recognises the benefits of diversity in appointments to the Board, the key criteria for the appointment
of new Directors will be the appropriate skills and experience in the interest of shareholder value. The Directors are
satisfied that the Board currently contains members with an appropriate breadth of skills and experience.
The basis on which the Company aims to generate value over the longer term is set out in the Strategic Report on pages
3 to 8. All matters, including corporate and gearing strategy, investment and dividend policies, corporate governance
procedures and risk management are reserved for the approval of the Board of Directors. The Board receives full
information on the Company’s investment performance, assets, liabilities and other relevant information in advance of
Board meetings.
Board Responsibilities and Relationship with the Fund Manager
The Board is responsible for the investment policy (the Mandate) and strategic and operational decisions of the Company
and for ensuring that the Company is run in accordance with all regulatory and statutory requirements. These matters
include:
The maintenance of clear investment objectives and risk management policies, changes to which require Board
approval;
The monitoring of the business activities of the Company, including investment performance and annual budgeting;
and
Review of matters delegated to the Fund Manager and Company Secretary.
The Fund Manager ensures that Directors have timely access to all relevant management and financial information to
enable informed decisions to be made and contacts the Board as required for specific guidance. The Company Secretary
and Fund Manager prepare monthly reports for Board consideration on matters of relevance, for example current
valuation and portfolio changes, dividend comparisons with previous years, cash availability and requirements and a
breakdown of shareholdings by listing and sector. The Board takes account of Corporate Governance best practice.
23
Athelney Trust plc
Corporate Governance Statement
(Continued)
Corporate Governance and Social Responsible Investment Policy
The Board is aware of its duty to act in the interests of the Company. The Board acknowledges that there are risks
associated with investment in companies which fail to conduct business in a socially responsible manner. The Fund
Manager considers social, environmental and ethical factors which may affect the performance or value of the Company's
investments. The Directors, through the Fund Manager, encourage companies in which investments are held to adhere
to best practice in the area of Corporate Governance. They believe that this can best be achieved by entering into a
dialogue with company management to encourage them, where necessary, to improve their policies in this area. The
Company's ultimate objective is to deliver superior long term returns for Shareholders which the Board believe will be
produced on a sustainable basis by investing in companies which adhere to best practice in the area of Corporate
Governance. Accordingly the Fund Manager will seek to favour companies which pursue best practice in this area.
Chairman
The Chairman, during the year was Dr. E C Pohl from 1 January 2018 till 1 October 2018 when he was appointed
Managing Director and Fund Manager and Mr S Moore was appointed Chairman.
As a result of the GM (as detailed on pages 21-22) Mr S Moore’s tenure as Chairman was terminated on 22 January 2019
and Mr D Lawman was appointed.
Mr D Lawman stepped down as Chairman in a board meeting on 8 February 2019, and Mr F Ashton was appointed
Executive Chairman. Mr F Ashton is independent and considers himself to have sufficient time to commit to the
Company’s affairs.
Directors’ Independence
In accordance with the Listing Rules for investment entities, the Board has reviewed the status of its individual Directors
and the Board as a whole. Two of the three current Directors including the Chairman are considered by the Board to be
independent in character and judgement and there are no relationships or circumstances which are likely to affect or could
appear to affect the Directors’ judgement.
Remuneration Committee
During the year the Remuneration Committee comprised of Dr Emmanuel Pohl and Mr Simon Moore (Chairman). Post
year end the Remuneration Committee comprises the current Directors. The Committee will meet as necessary to
determine and approve Director’s fees, following proper consideration of the role that individual Directors fulfil in
respect of Board and Committee responsibilities, the time committed to the Company’s affairs and remuneration levels
generally within the Investment Trust Sector.
Under Listing Rule 15.6.6, the Code principles relating to Directors’ remuneration do not apply to an investment trust
company other than to the extent that they relate specifically to non-executive Directors. Detailed information on the
remuneration arrangements can be found in the Directors’ remuneration report on pages 36 to 39 and in note 4 to the
financial statements.
24
Athelney Trust plc
Corporate Governance Statement
(Continued)
Company Secretaries
The Company Secretaries, Mr John Girdlestone FCA and Mrs Deborah Warburton FCCA, are responsible for ensuring
that Board and Committee procedures are followed and that applicable regulations are complied with. The Company
Secretaries also ensure timely delivery of information and reports and that the statutory obligations of the Company are
met.
All the Directors have access to the advice and services of the Company Secretaries.
Independent Professional Advice and Directors’ Training
Individual Directors may, at the expense of the Company, seek independent professional advice on any matter that
concerns them in the furtherance of their duties.
The Chairman liaises on a regular basis with the other Directors and the Company Secretaries to ensure that they are
maintaining adequate training and continuing professional development.
Institutional Investors – Use of Voting Rights and Voting Policy
The Fund Manager, in the absence of explicit instruction from the Board, is empowered to exercise discretion in the use
of the Company’s voting rights. The Fund Manager votes against resolutions he believes may damage shareholders’ rights
or economic interests.
Audit Committee
During the year the Audit Committee was chaired by Mr Simon Moore and attended by Dr Emmanuel Pohl. Post year
end the Audit Committee comprises the current Directors. The Committee met once during the year. The duties of the
committee include reviewing the Annual and Interim Accounts, the system of internal controls, and the terms of
appointment and remuneration of the auditor, Hazlewoods LLP, including its independence and objectivity. It is also the
forum through which Hazlewoods LLP reports to the Board of Directors.
Much of the Board’s corporate governance responsibility is discharged through the Audit Committee. This Committee
operates within clearly defined written terms of reference which are available upon request at the Company’s registered
office.
25
Athelney Trust plc
Corporate Governance Statement
(Continued)
Significant Issues Considered by the Audit Committee in Relation to the Financial Statements
Matter
Action
Investment Portfolio Valuation
The Company’s portfolio is invested predominantly in
listed securities. Although all the securities are fully listed
or traded on AIM, errors in the portfolio valuation could
have a material impact on the Company’s net asset value
per share.
Misappropriation of Assets
Misappropriation of the Company’s investments or
cash balances could have a material impact on its net
asset value per share.
The portfolio is valued at bid price at the end of each
month by the custodians James Sharp & Co.
The portfolio is valued at bid price at the end of each
month by the custodians James Sharp & Co. The portfolio
is agreed on a monthly basis by the Company Secretaries
during the completion of the monthly accounts.
Income Recognition
Incomplete or inaccurate income recognition could have
an adverse effect on the Company’s net asset value and
earnings per share and its level of dividend cover.
The level of income received for the year and the dividend
forecast for the year are agreed on a monthly basis with
the Fund Manager and the Company Secretaries.
The Audit Committee reviews the scope and results of the audit and, during the year, considered and approved
Hazlewoods LLP’s plan for the audit of the financial statements for the year ended 31 December 2018. At the conclusion
of the audit Hazlewoods LLP did not highlight any issues to the Audit Committee which would cause it to qualify its audit
report nor did it highlight any fundamental internal control weaknesses. Hazlewoods LLP issued an unqualified audit
report which is included on pages 40 to 44.
The Audit Committee also reviews any potential provision of non-audit services by the auditor. It has been agreed that
all non-audit work to be carried out by the auditor must be approved in advance by the Audit Committee. No non-audit
services have been provided in the year.
As part of the review of auditor independence and effectiveness, Hazlewoods LLP has confirmed that it is independent of
the Company and has complied with relevant auditing standards. In evaluating Hazlewoods LLP, the Audit Committee
has taken into consideration the standing, skills and experience of the firm and the audit team. Following professional
guidelines, the audit partner rotates after five years.
Company Information
The following information is disclosed in accordance with The Large and Medium-Sized Companies and Groups
(Accounts and Reports) Regulations 2008 and DTR 7.2.6.
The Company’s capital structure and voting rights are summarised on pages 31 and 32.
Details of the substantial shareholders in the Company are listed on page 31.
The rules concerning the appointment and replacement of Directors are contained in the Company’s Articles of
Association and are discussed on page 30.
The Board is seeking to renew its current powers to issue and re-purchase shares at the forthcoming Annual General
Meeting.
26
Athelney Trust plc
Corporate Governance Statement
(Continued)
There are: no restrictions concerning the transfer of securities in the Company; no special rights with regard to the
control attached to securities; no restrictions on voting rights; no agreements which the Company is party to that might
affect its control following a successful takeover.
There are no agreements between the Company and its Directors concerning compensation for loss of office.
Relations with Shareholders
The Company places great importance on communication with shareholders and welcomes their views. The Chairman
and the other Directors are available to meet shareholders. The Annual General Meeting of the Company provides a
forum, both formal and informal, for shareholders to meet and discuss issues with the Directors of the Company.
The notice of the Annual General Meeting, to be held in London on 3 April 2019, is set out on pages 59 to 67. The Annual
Report and Notice of Annual General Meeting are sent to shareholders at least 20 working days before the Meeting.
Internal Control
The Board is responsible for the Company’s system of internal control and for reviewing its effectiveness. It has therefore
established an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is
exposed, consistent with the internal control guidance issued by the Financial Reporting Council.
Adequate internal controls are in place for identifying, evaluating and managing risks faced by the Company. This process,
together with key procedures established with a view to providing effective financial control, has been in place for the full
financial year and up to the date the financial statements were approved and is consistent with the internal control guidance
issued by the Financial Reporting Council.
The Board has reviewed the need for an internal audit function. It has decided that the systems and procedures employed
by the Directors, provide sufficient assurance that a sound system of internal control, which safeguards the Company’s
assets, is maintained. An internal audit function specific to the Company is therefore considered unnecessary.
27
Athelney Trust plc
Corporate Governance Statement
(Continued)
Internal Control Assessment Process
Risk assessment and the review of internal controls are undertaken by the Board in the context of the Company’s
overall investment objective. The review covers the key business, operational, compliance and financial risks facing the
Company. In arriving at its judgement of what risks the Company faces, the Board has considered the Company’s
operations in the light of the following factors:
The nature and extent of risks which it regards as acceptable for the Company to bear within its overall business
objective;
The threat of such risks becoming a reality;
The Company’s ability to reduce the incidence and impact of risk on its performance; and
The cost and benefits to the Company of third parties operating the relevant controls.
Against this background, the Board has split the review of risk and associated controls into four sections reflecting the
nature of the risks being addressed. These sections are as follows:
Corporate strategy;
Published information, compliance with laws and regulations;
Relationship with service providers; and
Investment and business activities.
The key procedures which have been established to provide internal controls are as follows:
Custody and valuation of assets is undertaken by James Sharp & Co;
The duties of investment management, accounting and the custody of assets are segregated. The procedures of the
individual parties are designed to complement one another;
The Directors of the Company clearly define the duties and responsibilities of their agents and advisers. The appointment
of agents and advisers is conducted by the Board after consideration of the quality of the parties involved; the Board
monitors their ongoing performance and contractual arrangements;
Mandates for authorisation of investment transactions and expense payments are set by the Board; and
The Board reviews financial information produced by the Fund Manager and the Company Secretaries in detail on a
regular basis.
28
Athelney Trust plc
Corporate Governance Statement
(Continued)
In accordance with guidance issued to Directors of listed companies, the Directors have carried out a review of the
effectiveness of the system of internal control as it has operated over the year.
BY ORDER OF THE BOARD
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW 4 March 2019
J. Girdlestone
Secretary
29
Athelney Trust plc
Report of the Directors
The Directors present their report and audited financial statements of the Company for the year ended 31 December
2018. This report also contains certain information required in accordance with S992 of the Companies Act 2006.
Results and Dividends
The return on ordinary revenue activities before dividends for the year is £213,098 (2017: £206,177) as detailed on page
45.
It is recommended that a dividend of 9.1p (2017: 8.9p) per ordinary share be paid.
Principal Activity and Status
The Company (company number: 02933559) is a public limited company, limited by shares and incorporated in England
and Wales. It is an investment company as defined in Section 833 of the Companies Act 2006. The registered office is
Waterside Court, Falmouth Road, Penryn, TR10 8AW.
The Company carries on business as an investment trust. The Company has been granted approval from HM Revenue &
Customs ('HMRC') as an authorised investment trust under Section 1158 of the Corporation Tax Act 2010 for the year ended
31 December 2017. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31
December 2018 so as to be able to continue to obtain approval as an authorised investment trust, under Section 1158 of the
Corporation Tax Act 2010.
Directors
Biographical details of the Directors, can be found on page 2.
In accordance with the arrangements for retirement contained in the Company’s Articles of Association, the Directors
will retire by rotation on a three yearly cycle. Having been appointed by the Board since the last AGM Mr Frank Ashton
and Mrs Helen Sachdev will retire at the 2019 AGM and will offer themselves for re-election.
The Board confirms that, following the evaluation process set out in the Corporate Governance Statement on pages 20 to
29, Mr Ashtons’s and Mrs Sachdev’s performances as Directors continues to be effective and they demonstrate
commitment to the role. The Board therefore believes that it is in the interests of shareholders that Mr Ashton and Mrs
Sachdev are re-elected. In addition to any power of removal conferred by the Companies Acts, the Company may by
special resolution remove any Director without notice.
Directors’ Indemnity
Each Director of the Company is entitled to be indemnified to the extent permitted by the Companies Act 2006 against
liabilities incurred by any of them in the execution of their duties and exercise of their powers.
Conflicts of Interest
Each Director has a statutory duty to avoid a situation where they have, or could have, a direct or indirect interest which
conflicts, or may conflict, with the interests of the Company. A Director will not be in breach of that duty if the relevant
matter has been authorised by the Board in accordance with the Company’s Articles of Association. The Board has
approved a protocol for identifying and dealing with conflicts and conducts a review of actual or possible conflicts at least
annually. No conflicts or potential conflicts were identified during the year. It is not considered that an interest in the
Company’s shares held by a Director will of itself give rise to a situation where that Director’s interests or duties conflict
with the interests of the Company.
30
Athelney Trust plc
Report of the Directors
(continued)
Capital Structure
At 31 December 2018 the Company’s capital structure consisted of 2,157,881 Ordinary Shares of 25p each (2017:
2,157,881 Ordinary Shares of 25p each).
Directors and Their Interests
The Directors who held office during the year and at the date of this report are shown below; their interest in the ordinary
shares of the Company are stated on page 38 in the Directors’ Remuneration Report.
Dr. E. C. Pohl
R. G. Boyle
S. Moore
J. Jackson
D. Lawman
P. Coffin
F. Ashton
(Non-executive Chairman)(Managing Director) terminated 22/1/2019
(Managing Director) resigned 26/9/2018
(Non-executive Director)(Chairman) terminated 22/1/2019
(Non-executive Director) appointed 1/12/2018 – terminated 22/1/2019
(Non-executive Director) appointed 22/1/2019
(Non-executive Director) appointed 22/1/2019 – resigned 25/1/2019
(Executive Chairman) appointed 25/1/2019
The Company does not have any contract of significance subsisting during the year, with any other company in which a
Director is or was materially interested.
Mr J Pohl was appointed as alternate director for Dr EC Pohl but as Dr EC Pohl was able to attend all meetings of the
Board and its committees during the year, Mr J Pohl was not required to act as his alternate. Following the EGM, Mr J
Pohl’s position as alternate director has been terminated.
There were a number of Director changes during the year and more changes as a result of the GM on the 22 January
2019 a detailed disclosure of the events can be found in the Corporate Governance Statement on pages 20 to 29.
Substantial Shareholders
The Directors have been notified of the following major shareholdings in the Company that represent greater than 3%
of the voting rights:
Mr RG Boyle
Global Masters Fund
Mr GW & Mrs DJ Whicheloe
Mrs E Davison
Mr C Frostick
Ordinary
Shares
449,055
379,640
104,000
75,000
69,720
% of issue
20.81
17.59
4.82
3.48
3.23
Out of the six major shareholders listed above two were under the direct control of two of the Directors during the year.
The remaining four are in regular contact with the Directors (or their respective agent) to ensure that they are frequently
appraised and are content with the manner in which the Company is being run.
There have been no other changes in the above major shareholdings in the Company up to 20 February 2019.
31
Athelney Trust plc
Report of the Directors
(continued)
Dividends
The Ordinary Shares carry a right to receive dividends which are declared from time to time by an Ordinary Resolution
of the Company (up to the amount recommended by the Directors) and to receive any interim dividends which the
Directors may resolve to pay.
Capital Entitlement
On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to ordinary shareholders in
proportion to their shareholdings.
Voting
On a show of hands, every ordinary shareholder present in person or by proxy has one vote and on a poll every ordinary
shareholder present in person has one vote for every share he/she holds and a proxy has one vote for every share in respect
of which he/she is appointed.
Payment of Suppliers
It is the Company’s policy to obtain the best possible terms for all business and, therefore, there is no consistent policy as
to the terms used. The Company contracts the terms on which business will take place throughout the year with its
suppliers. There are accrued expenses outstanding at the end of the year, all of which appear as creditors in the balance
sheet.
Going Concern
In assessing the going concern basis of accounting, the Directors have had regard to the guidance issued by the Financial
Reporting Council. They have considered the current cash position of the Company, and forecast revenues for the current
financial year. The Directors have also taken into account the Company’s investment policy, which is described on page
17 and which is subject to regular Board monitoring processes, and is designed to ensure that the Company is invested in
listed securities and those traded on AIM.
The Company retains title to all assets held by its custodian. Note 12 to the financial statements sets out the financial risk
profile of the Company and indicates the effect on its assets and liabilities of falls and rises in the value of securities, market
rates of interest and changes in exchange rates.
The Directors believe, in the light of the controls and review processes noted above and bearing in mind the nature of the
Company’s business and assets, that the Company has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Viability Statement
The Directors have assessed the prospects of the Company for a period of three years. The Board believes this time period
is appropriate having consideration for the Company’s principal risks and uncertainties (outlined on pages 17 and 18), its
portfolio of listed equity investments and cash balances, and its ability to achieve the stated dividend policy. The Directors
have assessed the ability of the Company to continue as a going concern as outlined above.
32
Athelney Trust plc
Report of the Directors
(continued)
In making this assessment, the Directors have considered detailed information provided at board meetings which includes
the Company’s balance sheet, investment portfolio and income and operating expenses.
Based on the above, the Board confirms that the Company fully expects it will be able to continue in operation and meet
its liabilities as they fall due over the three-year period of this assessment.
Financial Instruments
The Company’s financial instruments comprise its investment portfolio, cash balances and debtors and creditors that arise
directly from its operations such as sales and purchases awaiting settlement and accrued income. The financial risk
management objectives and policies arising from its financial instruments and the exposure of the Company to risk are
disclosed in note 12 to the financial statements.
Annual General Meeting
The Notice of Annual General Meeting is set out on pages 59 to 67.
Disclosure of Information to Auditors
The Directors confirm that, so far as each of them is aware, there is no relevant audit information of which the Company’s
auditor is unaware and the Directors have taken all the steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that
information.
Re-appointment of Auditor
A resolution will be put to the shareholders at the Annual General Meeting proposing the re-appointment of Hazlewoods
LLP as Auditor to the Company. Hazlewoods LLP has indicated its willingness to continue in office.
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW
4 March 2019
BY ORDER OF THE BOARD
J. Girdlestone
Secretary
33
Athelney Trust plc
Statement of Directors’ responsibilities in respect of the financial
statements
The Directors are responsible for preparing the Annual Report and the financial statements and have elected to prepare
them in accordance with applicable United Kingdom law and United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice). Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss
for that period.
In preparing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy, at any time, the financial position of the Company and to
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Report of the Directors, a
Strategic Report, Directors’ Remuneration Report and Statement on Corporate Governance.
The Directors state that to the best of their knowledge:
• the Financial Statements, prepared in accordance with UK Generally Accepted Accounting Practice, give a true and
fair view of the assets, liabilities, financial position and net return of the Company;
• consider the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the
necessary information for shareholders to assess the Company’s position and performance, business model and strategy;
and
• the Chairman’s Statement and Report of the Directors include a fair review of the development and performance of
the business and the position of the Company together with a description of the principal risks and uncertainties that
it faces.
The Directors are responsible for the maintenance and integrity of the corporate and financial information related to
the Company including on the Company’s website www.athelneytrust.co.uk
34
Athelney Trust plc
Statement of Directors’ responsibilities in respect of the financial
statements
(Continued)
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
BY ORDER OF THE BOARD
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW
J.Girdlestone
Secretary
4 March 2019
35
Athelney Trust plc
Directors’ Remuneration Report
The Board has prepared this Report in accordance with the requirements of Section 421 of the Companies Act 2006. An
Ordinary Resolution will be put to the members to approve the Report at the forthcoming Annual General Meeting.
The law requires the Company’s Auditors to audit certain disclosures provided. Where disclosures have been audited,
they are indicated as such. The Auditors’ opinion is included in their report on pages 40 to 44.
Remuneration Committee
The Company had a Remuneration Committee during the year comprising of Dr Emmanuel Pohl and Mr Simon Moore,
with Simon Moore chairing the meetings. The Committee considered and approved the Directors’ remuneration for the
year ending 31 December 2018. The changes to the Directors after the GM on 22 January 2019 has led to the three
current Directors being appointed to the Remuneration Committee.
Policy on Directors’ Remuneration
The Board’s policy is that the remuneration of non-executive Directors should be sufficient to attract and retain Directors
with suitable skills and experience, and is determined in such a way as to reflect the experience of the Board as a whole,
in order to be comparable with other organisations and appointments. It is intended that this policy will continue for the
year ending 31 December 2019 and thereafter.
The fees for non-executive Directors are determined within the limits set out in the Company’s Articles of Association.
The approval of shareholders would be required to increase the limits set out in the Articles of Association. Directors are
not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits, as the Board does
not consider such arrangements or benefits necessary or appropriate. Fees for any new Director appointed will be made
on the same basis.
The salary for the Managing Director and Fund Manager was fixed on 1 April 2015 at 1% of portfolio value calculated on
a monthly basis. At a Board meeting held in December 2018 it was agreed that with effect from 1 January 2019 this would
be reduced to 0.75% of the portfolio value.
Directors’ Service Contracts
Each of the Directors has a service contract or letter of engagement with the Company. There are no provisions in the
service agreements for payments to be made for loss of office.
The letters of engagement for two of the three non-executive Directors, Mr F Ashton and Mrs H Sachdev, provide for
their appointment to continue until the Annual General Meeting following the appointment and, following re-election at
that meeting, for renewal by the Board on terms to be agreed from time to time. Mr D Lawman was appointed by
shareholders at the GM held on 22 January 2019 and accordingly his agreement provides for renewal by the Board on
terms to be agreed from time to time.
36
Athelney Trust plc
Directors’ Remuneration Report
(continued)
Company Performance
The graph below compares, for the ten financial years ended 31 December 2018, the total return (assuming all dividends
are reinvested) to ordinary shareholders compared to the total shareholder return on a notional investment made up of
shares in the component parts of the AIM All-Share Index and Small Caps Index. The comparison is made between AIM
All-Share and Small Caps as the majority of investment holdings by the Company are a constituent of one or the other of
these two indices. The comparison is required by Statutory Instrument to enable the readers of the accounts to compare
the performance of the Company and Directors remuneration.
*Assuming all dividends are reinvested
Past performance is no guarantee of future performance.
Directors’ Remuneration for the Year (audited information)
The Directors who served in the year received the following remuneration in the form of salaries or non-executive
Directors’ fees:
Dr E. C. Pohl (Chairman, Non-executive)
Dr E. C. Pohl (Managing Director)
R. G. Boyle (Managing Director)
S. Moore (Non-executive)
J. Jackson
2018
£
8,750
8,639
43,399
10,500
875
72,163
2017
£
10,500
-
57,474
10,500
-
78,474
The Director’s remuneration for the year of £72,163 is before the proposed dividend of 9.1p (2017:8.9p) per ordinary
share. As stated in the Chairman’s Statement on page 3 this is an increase of 2 per cent on last year.
37
Athelney Trust plc
Directors’ Remuneration Report
(continued)
Chairman basic fee
Fund Manager 0.75% (2018: 1%) of net assets
Non-Executive Director basic fee
Expected Fees for the Year to 31
December 2019
16,800
40,000
10,500
Fees for Year to 31
December 2018
10,500
51,163
10,500
Directors’ beneficial and family interests (audited)
The interests of the Directors and their families in the Ordinary shares of the Company are set out below:
R.G. Boyle
Dr E.C. Pohl
S. Moore
Notes:
31 December
2018
(or date of
resignation if
earlier)
449,055²
-¹
50,000
31 December
2017
(or date of
appointment
if later)
449,055
-
32,000
1. Dr. E. C. Pohl is the sole beneficial owner of E C Pohl & Co Pty Limited, which owns 54.1% of the issued share
capital of Global Masters Fund Limited on behalf of itself and clients whose portfolios it manages. Global Masters
Fund Limited holds 379,640 (2017: 349,640) shares in the Company.
2.
Included within R.G. Boyle’s holding is an interest in Trehellas House Limited, a company which holds 391,600
(2017: 391,600) ordinary shares representing 18.1 per cent of the Company’s share capital. R.G. Boyle has
separately entered into an agreement with E C Pohl & Co giving E C Pohl & Co on behalf of its client Global Masters
Fund a right of first refusal to such number of shares owned by Trehellas House Limited as shall when taken with
their existing holding not exceed 29.9% of the issued equity share capital of the Company. The price for any such
sale and purchase has been agreed at the net asset value of each share as determined by the most recent published
statement. This agreement amounts to a right of first refusal only and there is no obligation on Trehellas House
Limited to sell its shares at any particular time nor, Trehellas House Limited having determined to sell those shares,
any obligation on E C Pohl & Co to buy.
Mr D Lawman has an indirect interest in the form of 2,500 shares held in his SIPP. Apart from this none of the current
Directors has any beneficial or non-beneficial interests to disclose.
None of the Directors nor any persons connected with them had a material interest in the Company’s transactions,
arrangements or agreements during the year other than through their holdings in the Company’s shares.
The Directors are fully aware that the Company is not a close company and of the rules associated with this status. The
Company Secretaries maintain a record of shareholders that is regularly updated and used to publish, with the Fund
Manager’s report, the latest total holding of the top 5 shareholders. Shareholders and potential investors are able to see
the risk and understand how their proposed transaction might affect the Investment Trust status of the Company, possibly
breaching the Chapter 3 “5/50 rule”.
38
Athelney Trust plc
Directors’ Remuneration Report
(continued)
The Directors’ Remuneration Report for the year ended 31 December 2017 was approved by shareholders at the Annual
General Meeting held on 22 March 2018. The votes cast by proxy were as follows:
For
Against
Total votes cast
Number of votes withheld
Number of votes % of votes cast
60.3
-
60.3
-
1,302,011
Nil
1,302,011
Nil
The Directors’ Remuneration Policy was approved by shareholders at the Annual General Meeting held on 30 March
2017. The votes cast by proxy were as follows:
For
Against
Total votes cast
Number of votes withheld
Approval
Number of votes % of votes cast
57.5
-
57.5
-
1,241,619
Nil
1,241,619
Nil
The Directors’ Remuneration Report was approved by the Board on 3 March 2019.
J. Girdlestone
Company Secretary
39
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Opinion
We have audited the financial statements of Athelney Trust plc (the ‘Company’) for the year ended 31 December 2018,
which comprise the Income Statement, Statement of Changes in Equity, Statement of the Financial Position, Statement
of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the Company’s affairs as at 31 December 2018 and of its net return for
the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with international Standards on Auditing (UK) ((ISAs UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the
financial statements section of our report. We are independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK)
require us to report to you whether we have anything material to add or draw attention to:
the disclosures in the annual report set out on pages 17 to 18 that describe the principal risks and explain how
they are being managed or mitigated;
the Directors’ confirmation set out on page 17 in the annual report that they have carried out a robust assessment
of the principal risks facing the Company, including those that would threaten its business model, future performance,
solvency or liquidity;
the Directors’ statement set out on page 32 in the financial statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting in preparing the financial statements and the Directors’
identification of any material uncertainties to the Company’s ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
whether the Directors’ statement relating to going concern required under the Listing Rules in accordance with
Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
the Directors’ explanation set out on page 32 in the annual report as to how they have assessed the prospects of
the Company, over what period they have done so and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and
meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
.
40
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
(Continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our 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) we identified, 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 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.
Key audit matters identified were valuation, ownership and existence of investments and the allocation of capital and
revenue items. Revenue recognition and management override of controls are always deemed risks in any audit. This is
not a complete list of all risks identified by our audit.
Valuation, ownership and existence of investments
The company’s investment portfolio is one of the key drivers of its results, of which 100% is represented by quoted investments. The
investments are not considered to be at a high risk of material misstatement, or to be subject to a significant level of judgement, because
they comprise liquid, quoted investments for which evidence of the market price is readily available. However, due to their materiality in
the context of the financial statements as a whole, they are considered to be a significant risk area. Our audit work included, but was not
restricted to, consideration of the design and implementation of controls over the pricing of quoted investments and agreeing 100% of
investment prices to independent sources. We considered the appropriateness of the use of the quoted bid price by reviewing the liquidity
of the market of the quoted investments held. We also confirmed investment holdings to either third party confirmations, direct investee
confirmations or share certificates.
Allocation of costs between capital and revenue
The company allocates expenditure between revenue and capital on the basis of the Board’s expected long-term capital and revenue
returns. The allocation is important as it affects distributable reserves. Our audit work included, but was not restricted to, a detailed
review of the actual dividend and capital income received in the past seven years compared to the Board’s expected long-term capital and
revenue returns. The company’s accounting policy on this allocation is included in note 1 to the financial statements.
Management override of financial controls
The risk of management override is always considered a significant audit risk but is particularly relevant for the company due to the size
of the organisation structure. Our audit work included, but was not restricted to a review of all significant management estimates and
judgements applied during the completion of the financial statements. We also reviewed material journal entries processed by management
during the period. The company’s principal accounting policies are included in note 1 to the financial statements.
Revenue recognition
Under ISA 240 there is always a presumed risk that revenue may be misstated due to the improper recognition of revenue. In particular
we identified completeness and occurrence of investment income as a risk that requires particular audit attention. Our audit work included,
but was not restricted to: Obtaining an understanding of management’s process to recognise revenue in accordance with the stated
accounting policy; testing income transactions by comparing dividends during the year obtained from an independent source with those
recognised by the Company; testing gains and losses on investments to third party contracts; and performing cut-off testing of dividend
income around the year end.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified
misstatements and in forming our opinion. For the purpose of determining whether the financial statements are free from
material misstatement, we define materiality as the magnitude of a misstatement or an omission from the financial
statements or related disclosures that would make it probable that the judgement of a reasonable person, relying on the
information would have been changed or influenced by the misstatement or omission. We also determine a level of
performance materiality, which we use to determine the extent of testing needed, to reduce to an appropriately low-
level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial
statements as a whole.
41
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
(Continued)
We established materiality for the financial statements as a whole to be £73,000, which is 1.5% of the value of the
Company’s net assets. For income and expenditure items we determined that misstatements of lesser amounts than
materiality for the financial statements as a whole would make it probable that the judgement of a reasonable person,
relying on the information would have been changed or influenced by the misstatement or omission. Accordingly, we
established materiality for revenue items within the income statement to be £53,000, which is 25% of the Company’s net
return on ordinary activities before taxation, excluding gains on investments at fair value.
An overview of the scope of our audit
Our audit approach was based on a thorough understanding of the Company’s business and is risk-based. The day-to-day
management of the Company’s investment portfolio, the custody of its investments and the maintenance of the
Company’s accounting records is outsourced to third-party service providers. Accordingly, our audit work is focused on
obtaining an understanding of, and evaluating, internal controls at the Company and the third-party service providers and
inspecting records and documents held by the third-party service providers. We undertook substantive testing on
significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall
assessment of the control environment, the effectiveness of controls over individual systems and the management of
specific risks.
Other information
The Directors are responsible for the other information. The other information comprises the information included in
the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion 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 such material inconsistencies or
apparent material misstatements, we are required to determine whether there is a material misstatement in 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 in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following items
in the other information and to report as uncorrected material misstatements of the other information where we conclude
that those items meet the following conditions:
• Fair, balanced and understandable, set out on page 18 – the statement given by the Directors that they consider
the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
• Audit committee reporting, set out on pages 25 to 26 – the section describing the work of the audit committee
does not appropriately address matters communicated by us to the audit committee; or
• Directors’ statement of compliance with the UK Corporate Governance Code, set out on pages 20 to
21 the parts of the Directors’ statement required under the Listing Rules relating to the Company’s compliance with the
UK Corporate Governance Code containing provisions specified for review by the auditors in accordance with Listing
Rule 9.8.10R (2) do not properly disclose a departure from a relevant provision of the UK Corporate Governance Code.
42
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
(Continued)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006;
the information given in the Strategic Report and the Report of the Directors for the financial year for which the
financial statements are prepared is consistent with the financial statements and those reports have been prepared in
accordance with applicable legal requirements
the information about internal control and risk management systems in relation to financial reporting processes
and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and
Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial
statements and has been prepared in accordance with applicable legal requirements; and
information about the Company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA
Rules.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified material misstatements:
the strategic report or the Directors’ Report; or
the information about internal control and risk management systems in relation to financial reporting processes
and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
a corporate governance statement has not been prepared by the Company.
Responsibilities of Directors
As explained more fully in the Statement of Directors' responsibilities (set out on pages 34-35), the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the Directors 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 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 Company or to cease operations, or has no realistic alternative but to
do so.
43
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
(Continued)
Auditor’s 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 auditor’s 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with chapter 3 of part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law. We do
not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Scott Lawrence FCA (Senior Statutory Auditor )
for and on behalf of Hazlewoods LLP
Statutory Auditor, Cheltenham.
4 March 2019
44
Athelney Trust plc
Income Statement
For the Year Ended 31 December
2018
For the Year Ended 31 December
2017
Note Revenue
Capital
Total
Revenue
Capital
Total
£
£
£
£
£
£
(Losses)/gains on
investments held at fair
value
Income from investments
Investment Management
expenses
Other expenses
Net return on ordinary
activities before taxation
Taxation
8
2
3
3
5
Net return on ordinary
activities after taxation 6
-
(1,135,313))
(1,135,313)
-
835,709
835,709
251,990
-
251,990
238,832
-
238,832
(5,412)
(51,068)
(56,480)
(6,128)
(56,042)
(62,170)
(33,480)
(106,537)
(140,017)
(26,527)
(73,817)
(100,344)
213,098
(1,292,918) (1,079,820)
206,177
705,850
912,027
-
-
-
-
-
-
213,098
(1,292,918) (1,079,820)
206,177
705,850
912,027
Net return per
ordinary share
6
9.9p
(59.9)p
(50.0)p
9.6p
32.7p
42.3p
Dividend per ordinary share
paid during the year 7
8.9p
8.6p
The total column of this statement is the profit and loss account for the Company.
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the above financial years.
A statement of movements of reserves is given overleaf.
A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above Statement.
The notes on pages 49 to 57 form part of these financial statements.
45
Athelney Trust plc
Statement of Changes in Equity for the Year Ended
31 December 2018
Called-up
Share
Capital
£
Share
Premium
£
Capital
reserve
realised
£
Capital
reserve Revenue
reserve
£
unrealised
£
Total
Shareholders’
Funds
£
539,470
881,087
1747,083
1852,759
398,134
5,418,533
-
-
-
-
-
-
-
-
-
-
296,629
-
-
539,080
-
-
(129,859)
-
-
-
-
-
-
206,177
(185,036)
296,629
539,080
(129,859)
206,177
(185,036)
539,470
881,087
1,913,853
2,391,839
419,275
6,145,524
539,470
881,087
1,913,853
2,391,839
419,275
6,145,524
-
-
-
-
-
-
-
-
-
-
98,840
-
-
(1,234,153)
-
-
98,840
(1,234,153)
(157,605)
-
-
-
-
-
-
213,098
(192,051)
(157,605)
213,098
(192,051)
539,470
881,087
1,855,088
1,157,686
440,322
4,873,653
Balance brought forward at 1
January 2017
Net profits on realisation
of investments
Increase in unrealised
appreciation
Expenses allocated to
Capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2017
Balance brought forward at 1
January 2018
Net profits on realisation
of investments
Decrease in unrealised
appreciation
Expenses allocated to
Capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2018
The notes on pages 49 to 57 form part of these financial statements.
46
Athelney Trust plc
Statement of the Financial Position as at
31 December 2018
Company Number: 02933559
Note
Fixed assets
Investments held at fair value through profit and
loss
Current assets
Debtors
Cash at bank and in hand
8
9
Creditors: amounts falling due within one
year
10
Net current assets
Total assets less current liabilities
2018
£
2017
£
4,648,238
5,966,679
213,435
35,520
248,955
(23,540)
225,415
4,873,653
156,798
45,289
202,087
(23,242)
178,845
6,145,524
-
Provisions for liabilities and charges
-
Net assets
4,873,653
6,145,524
11
Capital and reserves
Called up share capital
Share premium account
Other reserves (non distributable)
Capital reserve - realised
Capital reserve - unrealised
Revenue reserve (distributable)
Shareholders' funds - all equity
Net Asset Value per share
13
Approved and authorised for issue by the Board of Directors on 4 March 2019.
539,470
881,087
1,855,088
1,157,686
440,322
4,873,653
225.9p
539,470
881,087
1,913,853
2,391,839
419,275
6,145,524
284.8p
…………………………………..
Ante
Frank
Frank Ashton
Director
The notes on pages 49 to 57 form part of these financial statements.
47
Athelney Trust plc
Statement of Cash flows for the Year Ended
31 December 2018
Cash flows from operating activities
Net revenue return
Adjustment for:
Expenses charged to capital
Increase in creditors
(Increase)/decrease in debtors
2018
£
2017
£
213,098
206,177
(157,605)
299
(56,638)
(129,859)
8,410
100,166
Cash (used)/from operations
(846)
184,894
Cash flows from investing activities
Purchase of investments
Proceeds from sales of investments
Net cash used in investing activities
Equity dividends paid
Net decrease in cash
Cash at the beginning of the year
Cash at the end of the year
The notes on pages 49 to 57 form part of these financial statements.
(581,051)
764,179
183,128
(674,520)
660,818
(13,702)
(192,051)
(185,036)
(9,769)
45,289
35,520
(13,844)
59,133
45,289
48
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
1. Accounting Policies
1.1 Statement of Compliance and Basis of Preparation of Financial Statements
The financial statements are prepared in accordance with applicable United Kingdom accounting standards, including
Financial Reporting Standard 102 (“FRS 102”), the Companies Act 2006 and with the AIC Statement of
Recommended Practice (“SORP”) issued in November 2014 (amended January 2017), regarding the Financial
Statements of Investment Trust Companies and Venture Capital Trusts. All the Company’s activities are continuing.
1.2 Income
Income from investments including taxes deducted at source is recognised when the right to the return is established
(normally the ex-dividend date). UK dividend income is reported net of tax credits in accordance with FRS 102
“Income Tax”. Interest is dealt with on an accruals basis.
1.3 Investment Management Expenses
All three Directors are involved in investment management, 10% of their salaries or fees have been charged to revenue
and the other 90% to capital. All other investment management expenses have been charged to capital. The Board
propose continuing this basis for future years.
1.4 Other Expenses
Expenses (including VAT) and interest payable are dealt with on an accruals basis and charged through the Revenue
and Capital Accounts in an allocation that the Board consider to be a fair distribution of the costs incurred.
1.5 Investments
Listed investments comprise those listed on the Official List of the London Stock Exchange. Unlisted investments are
traded on AIM. Profits or losses on sales of investments are taken to realised capital reserve. Any unrealised
appreciation or depreciation is taken to unrealised capital reserve.
Investments have been classified as “fair value through profit and loss” upon initial recognition.
Subsequent to initial recognition, investments are measured at fair value with changes in fair value recognised in the
Income Statement.
Securities of companies quoted on a recognised stock exchange are valued by reference to their quoted bid prices at
the close of the year, similarly, AIM-traded investments are valued using the closing bid price on 31 December.
1.6 Taxation
The tax effect of different items of income and expenses is allocated between capital and revenue on the same basis as
the particular item to which it relates, using the Company’s effective rate of tax for the year.
1.7 Judgements and estimates
The Directors confirm that no judgements or significant estimates have been made in the process of applying the
Company’s accounting policies.
49
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
1. Accounting Policies (continued)
1.8 Deferred Taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed by the balance sheet
date. Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised
if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying
timing differences can be deducted. Deferred tax assets and liabilities are calculated at the tax rates expected to be
effective at the time the timing differences are expected to reverse. Deferred tax assets and liabilities are not
discounted.
1.9 Capital Reserves
Capital Reserve – Realised
Gains and losses on realisation of fixed asset investments are dealt with in this reserve.
Capital Reserve – Unrealised
Increases and decreases in the valuations of fixed asset investments are dealt with in this reserve. Unrealised capital
reserves cannot be distributed by way of dividends or similar.
1.10 Dividends
In accordance with FRS 102 “Events after the end of the Reporting Period”, dividends are included in the financial
statements in the year in which they go ex-div.
1.11 Share Issue Expenses
The costs associated with issuing shares are written off against any premium arising on the issue of Share Capital.
1.12 Financial Instruments
Short term debtors and creditors are held at cost.
2. Income
Income from investments
UK dividend income
Foreign dividend income
UK Property REITs
Bank interest
Total income
UK dividend income
UK Main Market listed investments
UK AIM-traded shares
50
2018
£
183,833
30,496
37,653
8
251,990
2018
£
145,370
38,463
183,833
2017
£
154,547
43,876
40,334
75
238,832
2017
£
101,879
52,668
154,547
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
3. Return on Ordinary Activities before Taxation
The following amounts (inclusive of VAT) are included
within investment management and other expenses:
Directors’ remuneration:
- Services as a director
- Otherwise in connection with management
Auditors’ remuneration:
- Audit Services - Statutory audit
Miscellaneous expenses:
- Other wages and salaries
- Management services
- PR and communications
- Stock exchange subscription
- Sundry investment management and other expenses
- Legal fees
2018
£
2017
£
21,000
51,163
10,930
2,400
32,472
2,958
8,760
24,255
42,559
21,000
57,474
10,500
4,134
30,996
3,891
7,920
26,599
-
On 1 April 2016 the Company entered into a contract with GW & Co to provide management services at an annual cost
of £24,600 plus VAT. An increase of 10% was agreed in July 2017 making the annual fee £27,060 plus VAT.
196,497
162,514
4. Employees and Directors’ Remuneration
Costs in respect of Directors:
Non-executive directors’ fees
Wages and salaries
Social security costs
Average number of employees:
Chairman
Investment
Administration
2018
£
21,000
51,163
2,400
74,563
-
1
-
1
2017
£
21,000
57,474
4,134
82,608
-
1
-
1
51
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
5. Taxation
(i) On the basis of these financial statements no provision has been made for corporation tax (2017: Nil).
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is lower than (2017: lower than) the average small company rate of corporation tax in the
UK of 19 per cent. The differences are explained below:
Total return on ordinary activities before tax
(1,079,820)
2018
£
2017
£
912,027
Total return on ordinary activities multiplied by the average small
company rate of corporation tax 19% (2017: 19.25%)
(205,166)
175,565
Effects of:
UK dividend income not taxable
Revaluation of shares not taxable
Capital gains not taxable
Unrelieved management expenses
Current tax charge for the year
(34,945)
233,746
(18,037)
24,402
-
(29,750)
(103,773)
(57,101)
15,059
-
The Company has unrelieved excess revenue management expenses of £214,415 at 31 December 2018 (2017: £127,914)
and £102,597 (2017: £102,597) of capital losses for Corporation Tax purposes and which are available to be carried forward
to future years. It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses
and therefore no deferred tax asset has been recognised.
For the year ended 31 December 2017, the Company received approval from HM Revenue and Customs under Section
1158 of the Corporation Tax Act 2010, therefore the Company was not liable to Corporation Tax on any realised
investment gains for 2017. The Directors intend to continue to meet the conditions required to obtain approval and
therefore no deferred tax has been provided on any capital gains or losses arising on the revaluation or disposal of
investments.
6. Return per Ordinary Share
The calculation of earnings per share has been performed in accordance with FRS 102.
£
Revenue
2018
£
Capital
£
Total
£
Revenue
2017
£
Capital
£
Total
Attributable return on
ordinary activities after
taxation
Weighted average number of
shares
213,098
(1,292,918)
(1,079,820)
206,177
705,850
912,027
2,157,881
2,157,881
Return per ordinary share
9.9p
(59.9)p
(50.0)p
9.6p
32.7p
42.3p
52
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
7. Dividend
Final dividend in respect of 2017 of 8.9p (2017: a final dividend
of 8.6p was paid in respect of 2016) per share
2018
£
2017
£
192,051
185,036
Set out below is the total dividend payable in respect of the financial year, which is the basis on which the requirements of
Section 1158 of the Corporation Tax Act 2010 are considered.
It is recommended that a final dividend of 9.1p (2017: 8.9p) per ordinary share be paid out of revenue profits amounting
to a total of £196,367 For the year 2017, a final dividend of 8.9p was paid on 6 April 2018 amounting to a total of £192,051.
2018
£
213,098
(196,367)
16,731
2018
£
5,966,679
581,051
(764,179)
98,840
(1,234,153)
4,648,238
3,490,551
1,157,687
4,648,238
3,530,985
1,117,253
4,648,238
2017
£
206,177
(192,051)
14,126
2017
£
5,117,268
674,520
(660,818)
296,629
539,080
5,966,679
3,574,834
2,391,845
5,966,679
4,618,263
1,348,416
5,966,679
Revenue available for distribution
Final dividend in respect of financial year ended
31 December 2018
Undistributed Revenue Reserve
8. Investments
Movements in year
Valuation at beginning of year
Purchases at cost
Sales - proceeds
- realised gains on sales
(Decrease)/increase in unrealised appreciation
Valuation at end of year
Book cost at end of year
Unrealised appreciation at the end of the year
UK Main Market listed investments
UK AIM-traded shares
53
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
8. Investments (continued)
Gains on investments
Realised gains on sales
(Decrease)/Increase in unrealised appreciation
2018
£
98,840
(1,234,153)
(1,135,313)
2017
£
296,629
539,080
835,709
The purchase costs and sales proceeds above include transaction costs of £4,290 (2017: £5,711) and £3,308 (2017:
£2,401) respectively.
9. Debtors
Investment transaction debtors
Other debtors
10. Creditors: amounts falling due within one year
Social security and other taxes
Other creditors
Accruals and deferred income
11. Called Up Share Capital
Authorised
10,000,000 Ordinary Shares of 25p
Allotted, called up and fully paid
2,157,881 Ordinary Shares of 25p
(2016: 2,157,881 Ordinary Shares of 25p)
2018
£
201,627
11,808
213,435
2018
£
524
2,961
20,055
23,540
2018
£
2017
£
148,483
8,315
156,798
2017
£
2,959
8,628
11,655
23,242
2017
£
2,500,000
2,500,000
539,470
539,470
54
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
12. Financial Instruments
The Company’s financial instruments comprise equity investments, cash balances and debtors and creditors that arise
directly from its operations, for example, in respect of sales and purchases awaiting settlement.
The major risks associated with the Company are market, credit and liquidity risk. The Company has established a
framework for managing these risks. The Directors have guidelines for the management of investments and financial
instruments.
Market Risk
Market price risk arises mainly from uncertainty about future prices of financial investments used in the Company’s
business. It represents the potential loss the Company might suffer through holding market positions by way of price
movements other than movements in exchange rates and interest rates.
The Company’s investment portfolio is exposed to market price fluctuations which are monitored by the Fund Manager
who gives timely reports of relevant information to the Directors.
Adherence to the investment objectives and the internal controls on investments set by the Company mitigates the risk of
excessive exposure to any one particular type of security or issuer.
The Company’s exposure to other changes in market prices at 31 December on its investments is as follows:
A 20% decrease in the market value of investments at 31 December 2018 would have decreased net assets attributable to
shareholders by 43 pence per share (2017: 55.3 pence per share). An increase of the same percentage would have an equal
but opposite effect on net assets available to shareholders.
Fair value through profit or loss investments
2018
£
4,648,238
2017
£
5,966,679
Market risk also arises from changes in interest rates and exchange risk. All of the Company’s assets are in sterling and
accordingly the Company has limited currency exposure. The majority of the Company’s financial assets are non-interest
bearing, as a result the Company’s financial assets are not subject to significant risk due to fluctuations in the prevailing
levels of market interest rates.
The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date.
Bankruptcy or insolvency of the custodian may cause the Company’s rights with respect to securities held with the
custodian to be delayed.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty in meeting obligations associated with financial liabilities.
The Company is able to reposition its investment portfolio when required so as to accommodate liquidity needs. However
it may be difficult to realise its investment portfolio in adverse market conditions.
Maturity Analysis of Financial Liabilities
The Company’s financial liabilities consist of creditors as disclosed in note 10. All items are due within one year.
55
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
12. Financial Instruments (continued)
Capital management policies and procedures
The Company’s capital management objectives are:
to ensure the Company’s ability to continue as a going concern;
to provide an adequate return to shareholders;
to support the Company’s stability and growth;
to provide capital for the purpose of further investments.
The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure,
taking into consideration the future capital requirements of the Company and capital efficiency, projected operating cash
flows and projected strategic investment opportunities. The management regards capital as total equity and reserves, for
capital management purposes.
Fair values of financial assets and financial liabilities
Fixed asset investments (see note 8) are valued at market bid price where available which equates to their fair values. The
fair values of all other assets and liabilities are represented by their carrying values in the balance sheet.
Financial instruments by category
The financial instruments of the Company fall into the following categories
31 December 2018
Assets as per the balance sheet
Investments
Debtors
Cash at bank
Total
Liabilities as per the balance sheet
Creditors
Total
31 December 2017
Assets as per the balance sheet
Investments
Debtors
Cash at bank
Total
Liabilities as per the balance sheet
Creditors
Total
At
Amortised
Cost
£
Assets at fair
value through
profit or loss
£
-
213,435
35,520
248,955
23,540
23,540
4,648,238
-
-
4,648,238
-
-
At Amortised
Cost
£
Assets at fair
value through
profit or loss
£
-
156,798
45,289
202,087
23,242
23,242
5,966,679
-
-
5,966,679
-
-
56
Total
£
4,648,238
213,435
35,520
4,897,193
23,540
23,540
Total
£
5,966,679
156,798
45,289
6,168,766
23,242
23,242
Athelney Trust plc
Notes to the Financial Statements
For the Year Ended 31 December 2018
12. Financial Instruments (continued)
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair value hierarchy of financial instruments.
The fair value hierarchy consists of the following three classifications:
Classification A – Quoted prices in active markets for identical assets or liabilities.
Quoted in an active market in this context means quoted prices are readily and regularly available and those prices
represent actual and regularly occurring market transactions on an arm’s length basis.
Classification B – The price of a recent transaction for an identical asset, where quoted prices are unavailable.
The price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a
significant change in economic circumstances or a significant lapse of time since the transaction took place. If it can be
demonstrated that the last transaction price is not a good estimate of fair value (e.g. because it reflects the amount that an
entity would receive or pay in a forced transaction, involuntary liquidation or distress sale), that price is adjusted.
Classification C – Inputs for the asset or liability that are based on observable market data and unobservable market
data, to estimate what the transaction price would have been on the measurement data in an arm’s length exchange
motivated by normal business considerations.
The Company only holds classification A investments (2017: classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of £4,873,653 (2017: £6,145,524) divided by 2,157,881 (2017:
2,157,881) ordinary shares in issue at the year end.
Net asset value per share
225.9p
284.8p
2018
2017
14. Dividends paid to Directors
During the year the following dividends were paid to the Directors of the Company as a result of their total shareholding:
Mr Robin Boyle
Dr. Manny Pohl
Mr Simon Moore
Notes:
£39,966²
£31,118¹
£2,848
1. Dr Manny Pohl’s relationship with Global Masters Fund Limited is described in Note 1 to the table of Directors’ interests
on page 38. During the year a dividend of £31,118 was paid to Global Masters Fund Limited.
2. This figure includes £34,852 paid to Trehellas House Limited. Mr Robin Boyle’s interest in Trehellas House Limited is
described in Note 2 to the table of Directors’ interests on page 38.
57
Athelney Trust plc
OFFICERS AND FINANCIAL ADVISERS
Directors:
Secretaries:
Registered Office:
Mr N F Ashton (Chairman)
Mr D Lawman
Mrs H Sachdev
Email: frankashton@athelneytrust.co.uk
Email: davidlawman@athelneytrust.co.uk
Email: helensachdev@athelneytrust.co.uk
J. Girdlestone and D.Warburton
Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
Email: john@athelneytrust.co.uk
Tel: 01326 378 288
Website: www.athelneytrust.co.uk
Email: info@athelneytrust.co.uk
Tel: 01326 378 288
Company Number:
02933559
(Incorporated and registered in England)
Solicitor:
Druces LLP
Salisbury House
London Wall
London
EC2M 5PS
Email: d.smith@druces.com
Tel: 020 7638 9271
Stockbroker:
James Sharp & Co
5 Bank Street Tel: 0161 764 4043
Bury
Lancashire, BL9 0DN
Email: mail@jamessharp.co.uk
Auditors:
Banker:
Registrar:
Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT
HSBC Bank Plc
Market Street
Falmouth
Cornwall, TR11 3AA
Share Registrars Limited
Suite E First Floor
9 Lion & Lamb Yard
Farnham
Surrey, GU9 7LL
Email: scott.lawrence@hazlewoods.co.uk
Tel: 01242 237 661
Email: peter@shareregistrars.uk.com
Tel: 01252 821 390
58
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the content or action you should take, you should immediately consult your
stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the
Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all your shares in Athelney Trust plc please send this document,
together with the accompanying Form of Proxy to the purchaser or transferee or to the stockbroker, bank or
other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
____________________________________________________________________________________
ATHELNEY TRUST PLC
NOTICE OF ANNUAL GENERAL MEETING
Notice of the Annual General Meeting to be held at the offices of Druces LLP, Salisbury House, London Wall,
London EC2M 5PS on 3 April 2019 at 2.00pm is set out at the end of this document. The accompanying Form of
Proxy for use at the Annual General Meeting should be completed and returned and to be valid to reach John
Girdlestone, C/O Athelney Trust plc, Waterside Court, Falmouth Road, Penryn, Cornwall TR10 8AW as soon as
possible but, in any event so as to arrive not later than 48 hours prior to the meeting time being not later than
2.00pm on 1 April 2019. Instructions for the appointment of proxies through CREST are contained in the Notes
to the Notice of Annual General Meeting.
59
Letter from the Chairman
Athelney Trust PLC
(Incorporated and registered in England and Wales with No. 02933559)
Directors
D Lawman
F Ashton
H Sachdev
Registered office:
Waterside Court
Falmouth Road
Penryn
Cornwall TR10 8AW
To the holders of ordinary shares of 25p each (“Shares”) in the capital of Athelney Trust plc
(“Company”).
4 March 2019
Dear Shareholder,
2019 ANNUAL GENERAL MEETING
APPROVAL OF ANNUAL REPORT AND ACCOUNTS AND OTHER RESOLUTIONS
Introduction
The 2019 Annual General Meeting (“AGM”) of the Company is to be held on 3 April 2019 at 2.00pm at the
offices of Druces LLP, Salisbury House, London Wall, London EC2M 5PS. A copy of the notice convening
the AGM (the “Notice”) is set out at the end of this letter.
Your full attention is directed to the full terms of the Notice.
As you will see from the Notice, there are additional items of special business to be considered at Resolutions
10, 11 and 12.
I am writing to you to explain its purpose.
In addition, the normal business of the Annual General Meeting including appointment of Directors and the
approval of the Annual Report and Accounts for the year ended 31 December 2018 will be undertaken at this
meeting. Reference is made to those resolutions at the end of this letter. A copy of the Annual Report and
Accounts is enclosed.
Proposal
It is the belief of the Directors of the Company (the “Directors” or the “Board”) that the Company would
benefit from the Directors being authorised to allot further shares in the Company so that the Company may
make offers and enter into agreements during the relevant period which would, or might, require shares to
be allotted or rights to subscribe for, or convert other securities into, shares to be granted after the authority
ends. The Directors further believe that the statutory pre-emption rights on the issue of new shares for cash
which are contained in the Companies Act should be disapplied and that the Company should be allowed to
purchase its own shares.
Resolution 7 proposes as follows:
The authority given to the Directors to allot further shares or to grant rights to subscribe for, or to convert
securities into ordinary shares in the capital of the Company requires the prior authorisation of the
shareholders in general meeting under section 551 Companies Act 2006.
Upon the passing of Resolution 7, the Directors will (pursuant to paragraph (i) of Resolution 7) have the
necessary authority until the date of the next annual general meeting, or 30 April 2019 if earlier, to allot
60
and/or grant equity securities (as defined in section 560(1) of the Act), up to an aggregate nominal amount
of £53,947, which is equivalent to 10 per cent of the current issued share capital.
In addition, upon the passing of Resolution 7, (pursuant to paragraph (ii) of Resolution 7) the Directors will
have authority, until the date of the next annual general meeting of the Company or 30 April 2020 if earlier,
to allot and/or grant equity securities (as defined in section 560(1) of the Act) in connection with a rights
issue or other pre-emptive offer in favour of Shareholders (subject to certain exclusions) up to an aggregate
nominal amount equal to £53,947.
The Directors will continue to seek to renew this authority at each annual general meeting.
This limited authority will enable the Directors to issue shares when they believe it is in the interests of the
Company to do so. While the Company would always consider from time to time the best manner of
financing its activities, there is no present intention of issuing ordinary shares pursuant to the authority
proposed in Resolution 7.
Resolution 8 proposes as follows:
If the Directors wish to exercise the authority under Resolution 7 and issue Shares (or sell any shares which
the Company may purchase and elect to hold as treasury shares) for cash, the Companies Act 2006 requires
that unless shareholders have given specific authority for the waiver of their statutory pre-emption rights, the
new shares must be offered first to existing shareholders in proportion to their existing shareholdings. This
can be a cumbersome and particularly expensive exercise for a company of this size.
Accordingly if passed Resolution 8 will empower the Directors until the date of the next annual general
meeting of the Company, or 30 April 2020 if earlier, to allot and/grant equity securities for cash (or transfer
shares which are from time to time held by the Company in treasury) (i) by way of a pre-emptive offer(a) by
way of a rights issue (subject to certain exclusions), or (b) by way of an open offer or other offer of securities
(not being a rights issue) in favour of existing shareholders in proportion to their shareholdings (subject to
certain exclusions) or (ii) otherwise than pursuant to (i) up to an aggregate nominal value of £53,947. The
Directors will seek to renew such authority and power at successive annual general meetings.
This limited authority will enable the Directors to issue shares for cash when they believe it is in the interests
of the Company to do so.
As at 1 March 2019 (being the last practicable date prior to publication of this document), the Company held
no shares in treasury.
Resolution 9 proposes as follows:
That authority be granted to the Directors to make market purchases (as defined in section 693 Companies
Act 2006) of ordinary shares of 25p in the capital of the Company. In this case the authority contained in the
resolution will be limited to a maximum number of ordinary shares of 25p each equivalent to 10 per cent of
the issued ordinary shares of the Company at a minimum price of 25 pence per share and a maximum price
(exclusive of expenses) being an amount equal to 105 per cent of the average of the middle market quotations
for an ordinary share of the Company (as derived from the Daily Official List of London Stock Exchange plc)
for the five trading days immediately preceding the day on which the share is contracted to be purchased.
This authority will expire at the Annual General Meeting for 2020 or on 30 April 2020 if sooner.
Other resolutions
On 18 February 2019 the directors received a requisition letter from Global Masters Fund Limited in which
Dr EC Pohl has a 54.1% interest. Global Masters Fund Limited, a substantial shareholder in the Company,
61
through this letter is requiring the following resolutions, included in the Notice as resolutions 10, 11 and 12,
to be proposed at the AGM:
That Simon Moore be appointed as a Director of the Company
That Emmanuel Clive Pohl be appointed as a Director of the Company
That David Lawman be removed as a Director of the Company
The other resolutions proposed to be taken at the AGM are set out below and constitute the normal annual
business of the meeting.
Resolutions 1 to 6 relate to the receiving of the report and accounts; the declaration of a dividend; the
approval of the report of the remuneration committee; the re-election of Mr F Ashton and Mrs H Sachdev
who retire and offer themselves for re-election under the articles of association; and the re-appointment of
the auditors and approval of authority to set their remuneration.
Form of proxy and meeting arrangements
A form of proxy is enclosed for you to complete according to the instructions given in the Notice and on the
proxy form. The completed form should be sent to John Girdlestone, C/O Athelney Trust plc, Waterside
Court, Falmouth Road, Penryn, Cornwall TR10 8AW to be received not later than 48 hours before the start
of the meeting being not later than 2.00pm on 1 April 2019. Appointment of a proxy will not prevent you
from attending and voting at the meeting if you subsequently find that you are able to do so.
Instructions for appointing a proxy through CREST are given in the notes to the Notice.
We would very much welcome you to the meeting, if you can attend, where there will be an opportunity for
you to ask questions relating to the business of the meeting.
Recommendations
I consider that resolutions 1 to 9 in the Notice are in the best interests of the Company and shareholders as a
whole and I and my fellow Directors unanimously recommend that you vote in favour of Resolutions 1-
9.
I consider that resolutions 10 to 12 in the Notice are not in the best interests of the Company and shareholders
as a whole. The full reasoning is set out in the Outlook sub-section, under Chairman’s Statement of the Annual
Report. In summary we believe it is a retrograde step, returning the Company to the uncertain and ultimately
costly management conditions of the last quarter of 2018 and therefore producing less shareholder value over
time than our plan. I and my fellow Directors unanimously recommend that you vote against Resolutions
10, 11 and 12.
Yours faithfully,
Mr Frank Ashton
Executive Chairman
62
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Athelney Trust plc ( “the Company”) will be held at
the offices of Druces LLP, Salisbury House, London Wall, London EC2M 5PS on 3 April 2019 at 2.00pm to consider
the following Ordinary and Special business, of which Resolutions 1 to 6 will be proposed as Ordinary Resolutions,
Resolutions 7 to 9 will be proposed as Special Resolutions and Resolutions 10 to 12 will be proposed as Ordinary
Resolutions:
ORDINARY BUSINESS
1
2
3
4
5
6
To receive and adopt the Company’s Accounts for the year ended 31 December 2018.
To declare a final dividend of 9.1p per ordinary share. It is intended that dividend cheques in respect of the
dividend will be posted on 18 April 2019 to all shareholders on the register of members at close of business
on 22 March 2019.
To approve the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) as set out
on pages 36-39 of the Company’s Accounts for the year ended 31 December 2018.
To re-elect Mr F Ashton as a Director of the Company retiring pursuant to the Articles of Association.
To re-elect Mrs H Sachdev as a Director of the Company retiring pursuant to the Articles of Association.
To appoint Hazlewoods LLP as auditors to the Company and to authorise the Directors to fix their
remuneration.
SPECIAL BUSINESS
7
Directors’ authority to allot shares
To resolve that the Directors be generally and unconditionally authorised pursuant to and in accordance with
section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares or grant
rights to subscribe for or to convert any security into shares:
(i) up to an aggregate nominal amount of £53,947; and
(ii) comprising equity securities (as defined in section 560(1) of the Companies Act 2006) up to a
further nominal amount of £53,947 in connection with a pre-emptive offer
such authorities to apply in substitution for all previous authorities pursuant to section 551 of the Companies
Act 2006 and to expire at the conclusion of the next annual general meeting or on 30 April 2020, whichever
is the earlier but, in each case, so that the Company may make offers and enter into agreements during the
relevant period which would, or might, require shares to be allotted or rights to subscribe for, or convert
other securities into, shares to be granted after the authority ends.
For the purposes of this resolution:
(a) “pre-emptive offer” means a rights issue or an offer of equity securities open for acceptance for a period
fixed by the Directors to (i) holders (other than the Company) on the register on a record date fixed by the
Directors of ordinary shares in proportion to their respective holdings and (ii) other persons so entitled by
virtue of the rights attaching to any other equity securities held by them, but subject in all such cases to such
exclusions or other arrangements as the Directors may deem necessary or expedient in relation to treasury
shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of,
any territory; and
63
(b) “rights issue” means an offer to (i) ordinary shareholders in proportion (or as near as may be practicable)
to their existing holdings; (ii) to people who are holders of other equity securities if this is required by the
rights of those securities or, if the Directors consider it necessary, as permitted by the rights of those securities;
in either case to subscribe for further securities by means of the issue of a renounceable letter (or other
negotiable document) which may be traded for a period before payment for the securities is due, but subject
in both cases to such exclusions or other arrangements as the Directors may deem necessary or expedient in
relation to treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or
under the laws of, any territory.
8
Limited disapplication of pre-emption rights
That, subject to the passing of Resolution 7 above, the Directors be empowered to allot equity securities (as
defined in section 560(1) of the Companies Act 2006) wholly for cash pursuant to the authority given by
paragraph (i) of Resolution 7 above or where the allotment constitutes an allotment of equity securities by
virtue of section 560(3) of the Companies Act 2006 in each case:
(a) generally, up to an aggregate nominal amount of £53,947 pursuant to the authority given by paragraph
(i) of Resolution 7 above; and
(b)
in connection with a pre-emptive offer pursuant to the authority given by paragraph (ii) of Resolution 7
above
such power to expire at the conclusion of the next annual general meeting or on 30 April 2020, whichever is
the earlier, but so that the Company may make offers and enter into agreements during this period which
would, or might, require equity securities to be allotted after the power ends and the Directors may allot
equity securities under any such offer or agreement as if the power had not ended.
For the purposes of this resolution:
(a) pre-emptive offer has the same meaning as in Resolution 7 above;
(b) references to an allotment of equity securities shall include a sale of treasury shares; and
(c) the nominal amount of any securities shall be taken to be, in the case of rights to subscribe for or convert
any securities into shares of the Company, the nominal amount of such shares which may be allotted
pursuant to such rights.
9
Authority to purchase ordinary shares
That the Company be and is hereby generally and unconditionally authorised for the purposes of section 701
of the Companies Act 2006 to make market purchases (within the meaning of section 693 of the Companies
Act 2006) of ordinary shares of 25p each in the capital of the Company and where such shares are held in
treasury, the Company may use them for the purposes of its employees’ share plans, provided that:
(a)
(b)
(c)
the maximum aggregate number of ordinary shares authorised to be purchased shall be such an
amount as represents 10 per cent of the Company’s issued share capital from time to time;
the minimum price which may be paid for each ordinary share shall be 25p;
the maximum price, exclusive of expenses, which may be paid for each ordinary share shall be an
amount equal to the higher of (a) 105 per cent of the average closing price of the Company’s ordinary
shares as derived from the London Stock Exchange Daily Official List for the five London business
days immediately preceding the day on which such share is contracted to be purchased or (b) the
higher of the price of the last independent trade and the highest current bid as stipulated by Article
5(1) of the Commission Regulation (EC) 22 December 2003 implementing the Market Abuse
Directive as regards exemptions for buy-back programmes and stabilisation of financial instruments
(No 2273/2003);
64
(d)
(e)
this authority shall expire at the conclusion of the next annual general meeting or on 30 April 2020
whichever is the earlier, unless such authority is renewed before then; and
the Company may make a contract to purchase its ordinary shares under this authority before its
expiry which would or might be executed wholly or partly after the expiry, and may make a purchase
of its ordinary shares under that contract
SPECIAL BUSINESS PURSUANT TO A SHAREHOLDER REQUISITION
10
11
12
That Simon Moore be appointed as a Director of the Company
That Emmanuel Clive Pohl be appointed as a Director of the Company
That David Lawman be removed as a Director of the Company
Dated 4 March 2019
By Order of the Board
John Girdlestone
Company Secretary
Registered office:
Waterside Court
Falmouth Road
Penryn
Cornwall TR10 8AW
65
Notes
Appointment of Proxies
1. A member entitled to attend and vote at the meeting is entitled to appoint another person(s) (who need
not be a member of the Company) to exercise all or any of his rights to attend, speak and vote at the meeting.
A member can appoint more than one proxy in relation to the meeting, provided that each proxy is appointed
to exercise the rights attaching to different shares held by him.
2. Your proxy could be the Chairman, another director of the Company or another person who has agreed
to attend to represent you. Your proxy will vote as you instruct and must attend the meeting for your vote
to be counted. Details of how to appoint the Chairman or another person as your proxy using the proxy form
are set out in the notes to the proxy form. Appointing a proxy does not preclude you from attending the
meeting and voting in person. If you attend the meeting in person, your proxy appointment will automatically
be terminated.
3. An appointment of proxy is provided with this notice and instructions for use are shown on the form. In
order to be valid, a completed appointment of proxy must be returned to the Company by one of the following
methods:
3.1 in hard copy form by post or by hand to the Company Secretary at the address shown on the form of
proxy; or
3.2 in the case of CREST members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below,
and in each case must be received by the Company Secretary or as the case may be the Company's Registrars
not less than 48 hours before the time fixed for the meeting. Please note that any electronic communication
sent to us/our registrars in respect of the appointment of a proxy that is found to contain a computer virus
will not be accepted.
4. To change your proxy instructions you may return a new proxy appointment using the methods set out
above. Where you have appointed a proxy using the hard copy proxy form and would like to change the
instructions using another hard copy proxy form, please contact the Company Secretary at Waterside Court,
Falmouth Road, Penryn, Cornwall TR10 8AW. The deadline for receipt of proxy appointments (see above)
also applies in relation to amended instructions. Any attempt to terminate or amend a proxy appointment
received after the relevant deadline will be disregarded. Where two or more valid separate appointments of
proxy are received in respect of the same share in respect of the same meeting, the one which is last sent shall
be treated as replacing and revoking the other or others.
5. Crest Members
5.1 CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy
appointment service may do so by utilising the procedures described in the CREST Manual. 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.
5.2 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's
specifications and must contain the information required for such instructions, as described in the CREST
Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to
the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be
received by the issuer's agent (ID 7RA36) by the latest time(s) for receipt of proxy appointments specified in
the notice of meeting. 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.
5.3 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.
6. Only those shareholders registered in the Register of Members of the Company as at 6.00p.m. on 22 March 2019
(or, if the meeting is adjourned, on the date which is two days before the time of the adjourned meeting) shall be entitled
to attend and vote at the meeting or adjourned meeting in respect of the number of shares registered in their respective
66
names at that time. Changes to the Register of Members after that time will be disregarded in determining the rights of
any person to attend or vote at the meeting or adjourned meeting.
7. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its
behalf all of its powers as a member provided that they do not do so in relation to the same shares.
Nominated Persons
8. A copy of this notice has been sent for information only to persons who have been nominated by a member to enjoy
information rights under section 146 of the Companies Act 2006 (a "Nominated Person"). The rights to appoint a proxy
cannot be exercised by a Nominated Person they can only be exercised by the member. However, a Nominated Person
may have a right under an agreement between him and the member who has nominated him to be appointed as a proxy
for the meeting or to have someone else so appointed. If a Nominated Person does not have such a right or does not wish
to exercise it, he may have a right under such an agreement to give instructions to the member as to the exercise of voting
rights.
lssued Shares and Total Voting Rights
9. As at 1 March 2019 (being the last business day before the publication of this Notice), the Company's issued share
capital consisted of 2,157,881 ordinary shares carrying one vote each. Therefore the total voting rights in the Company
are currently 2,157,881.
Website Publication of Audit Concerns
10. Members satisfying the thresholds in section 527 of the Companies Act 2006 can require the Company to publish
a statement on its website setting out any matter relating to the audit of the Company's accounts (including the auditor's
report and the conduct of the audit) that are to be laid before the meeting.
The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the
website must also be sent to the Company's auditor no later than the time it makes its statement available on the website.
The business which may be dealt with at the meeting includes any statement that the Company has been required to
publish on its website.
Members' Right to ask Questions
11. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any
such question relating to the business being dealt with at the meeting but no such answer need be given if:
11.1 to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential
information;
11.2 the answer has already been given on a website in the form of an answer to a question; or
11.3 it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Documents on Display
12. The following documents are available for inspection at the Company's registered office at Waterside Court,
Falmouth Road, Penryn, Cornwall TR10 8AW during normal business hours on each weekday (public holidays excluded)
from the date of this Notice of Annual General Meeting until the date of the Annual General Meeting and will be available
for inspection at the place of the Annual General Meeting for at least 15 minutes prior to and during the meeting:
12.1 copy of the Managing Director’s service contract with the Company;
12.2 copies of Letters of Appointment of the Non-Executive Directors; and
12.3 a copy of the Articles of Association of the Company.
A copy of this notice, and other information required by section 311A of the Companies Act 2006, can be found at
www.athelneytrust.co.uk
67
ATHELNEY TRUST PLC
Company Number 02933559
Form of Proxy for use at the Annual General Meeting to be held at 2.00pm on 3 April 2019
at the offices of Druces LLP. Salisbury House, London Wall, London EC2M 5PS
in
full)
(name
.................................................................(IN BLOCK CAPITALS) of
I/We
......................................................................................................hereby appoint the Chairman of the
Meeting
..........................................of
................................................................................... to act as my/our proxy to attend, speak and vote
at the Annual General Meeting of the Company to be held on 3 April 2019 and at any adjournment thereof.
failing
him
or
I/We direct my/our proxy to vote on the following resolutions as I/we have indicated by marking the appropriate box
with an “X”. If no indication is given below, my/our proxy will vote or abstain from voting at his or her discretion.
FOR AGAINST ABSTAIN DISCRETIONARY
RESOLUTIONS
1
2
3
4
5
6
7
8
To receive and adopt the Company’s Accounts
for the year ending 31 December 2018.
To declare a final dividend of 9.1p per ordinary
share.
To approve the Directors’ Remuneration
Report (excluding the Directors’ Remuneration
Policy) for the year ended 31 December 2018.
To re-elect Mr F Ashton as a Director retiring
pursuant to the Articles of Association.
To re-elect Mrs H Sachdev as a Director
retiring pursuant to the Articles of Association.
To appoint Hazlewoods as the Auditors and
authorise the Directors to fix their
remuneration.
To resolve that the Directors be generally and
unconditionally authorised to allot shares to the
extent stated in the resolution.
To resolve to dis-apply the statutory pre-
emption rights to the extent stated in this
resolution.
9
To Authorise purchase of own shares.
10 To elect Mr S Moore as a Director
11 To elect Dr E C Pohl as a Director
12 To remove Mr D Lawman as a Director
Your attention is drawn to the notes overleaf.
Signature(s)......................................................
Dated............................................
68
NOTES
1. To be valid, completed forms must be returned to the Company by one of the following methods:
in hard copy form by post, by courier or by hand to the Company’s Registered Office Waterside Court, Falmouth
1.1
Road, Penryn, Cornwall TR10 8AW; or
1.2 in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the
procedures set out below,
and in each case must be received by the Company Secretary or (as the case may be) the Company’s Registrars not less than
48 hours before the time fixed for the meeting. If someone else signed the form on your behalf, you or that person must
send the power of attorney or other written authority under which it is signed to the Company’s registrars so that it is
received not less than 48 hours before the time fixed for the meeting.
2. A corporation must execute this form either under its common seal or under the hand of an officer or attorney duly
authorised in writing.
3. This form enables you to instruct your proxy how to vote, whether on a show of hands or on a poll, on the resolutions to
be proposed at the meeting. If you want your proxy to vote in a certain way on the resolutions specified please place an ‘X’
in the relevant boxes. If you fail to select any of the given options your proxy can vote as he or she chooses or can decide
not to vote at all. The proxy can also do this on any other resolution that is put to the meeting. The ‘Vote Withheld’ option
is provided to enable you to abstain on any particular resolution; however it should be noted that a ‘vote withheld’ is not a
vote in law and will not be counted in the calculation of the proportion of the votes ‘For’ and ‘Against’ a resolution.
4. Every holder has the right to appoint some other person(s) of their choice, who need not be a shareholder, as their proxy
to exercise all or any of their rights to attend, speak and vote on their behalf at the meeting, provided each proxy is appointed
to exercise rights in respect of different shares. The appointment of the chairman as proxy has been included for
convenience. If you wish to appoint any other person or persons as proxy or proxies delete the words “the chairman of the
meeting” and add the name and address of the proxy or proxies appointed in the space provided. If you do not delete such
words and you appoint a proxy or proxies, the chairman shall not be entitled to vote as proxy. If your proxy is being
appointed in relation to less than your full voting entitlement, the number of shares in respect of which each such proxy is
to vote must be specified in the space provided. In the absence of any specific direction, a proxy shall be deemed to be
entitled to vote in respect of all the shares in the relevant holding.
5. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may
do so by utilising the procedures described in the CREST Manual. To be valid, the appropriate CREST message, regardless
of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed
proxy, must be transmitted so as to be received by the Company’s agent (ID 7RA36) by the latest time(s) for receipt of
proxy appointments specified in the notice of meeting. See the notes to the notice of the Annual General Meeting for further
information on proxy appointment through CREST.
6. To appoint more than one proxy, please photocopy this form indicating on each copy the name of the proxy you wish to
appoint and the number of shares in respect of which the proxy is appointed.
7.
8.
In the case of joint holders, the signature of any one holder will be sufficient but the names of all the joint holders should be
stated and the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of
the votes of the other joint holders. For this purpose, seniority will be determined by the order in which the names stand
in the register of members in respect of the shares.
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.
9. Returning the form of proxy will not prevent you from attending the meeting and voting in person.
10. You may not use any electronic address provided either in this form of proxy or any related documents (including the notice
of meeting) to communicate with the Company for any purposes other than those expressly stated.
11. Any questions regarding the proxy form are to be addressed to the Company Secretary, whose contact details are shown in
paragraph 1 above.
69