Investment Objective and Policy
Directors of the Company
Strategic Report including:
Chairman’s Statement and Business Review
Fund Manager’s Review
1
2
4
7
Investment and Portfolio Analysis 10
Portfolio Breakdown by Sector and by Index 11
Section 172(1) Statement
Other Statutory Information
Corporate Governance Statement
Report of the Directors
Statement of Directors’ Responsibilities
Directors’ Remuneration Report
Independent Auditor’s 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
12
13
15
19
21
22
24
29
30
31
32
33
38
Contents
Annual Report for the year ended
31 December 2021
Company number
02933559
Athelney Trust
Waterside Court, Falmouth Road
Penryn, Cornwall TR10 8AW
IInvestment Objective
The investment objective of the Trust is to provide long-term growth in dividends and
capital, with the risks inherent in small cap investment minimised through a spread of
holdings in quality small cap companies that operate in various industries and sectors. The
Fund Manager also considers that it is important to maintain a progressive dividend record.
IInvestment Policy
The assets of the Trust are allocated predominantly to companies with either a full
listing on the London Stock Exchange or a trading facility on AIM or AQSE. The assets
of the Trust have been allocated in two main ways: first, to the shares of those
companies which have grown steadily over the years in terms of profits and dividends
but, despite this progress are undervalued by the market when compared to future
earnings and dividends; second, those companies whose shares are undervalued by
the market when compared with the value of land, buildings, other assets or cash on
their balance sheet.
1 | Athelney Trust plc | Annual Report 2021
DDirectors oof tthe CCompany
Frank Ashton
Non-Executive Chairman
Dr Emmanuel Clive Pohl AM
Managing Director
independent management consultant. After
Frank Ashton, aged 60, is a highly experienced senior manager
leaving
and
Cambridge University with a Natural Sciences degree
(Metallurgy & Materials Science), he spent much of his career
providing independent management advice to companies in a
spent at
wide variety of
PricewaterhouseCoopers
(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.
sectors. With 15 years
and KPMG
Manny Pohl, aged 68, is the Chairman and CEO of investment
house EC Pohl & Co which he founded in June 2012 and has led
through its evolution into today’s independent, highly acclaimed
Australian fund manager. Manny holds engineering and MBA
degrees from the University of Witwatersand and a doctorate in
Business Administration (Economics) from Potchefstroom
University.
Manny has over 30 years of investment experience, initially as
head of research for leading South African broking firm, Davis
Borkum Hare, followed by Westpac Investment Management in
Australia after he emigrated to Australia in 1994. Manny
founded Hyperion Asset Management in 1996 and left in 2012.
He has served on the Boards of several major corporations in his
native South Africa, the UK and his adopted home Australia. In
2019 Manny was recognised in the Queen’s Birthday honours
list for significant service to the finance sector, and to the
community.
2 | Athelney Trust plc | Annual Report 2021
DDirectors oof tthe CCompany
Continued
Simon Moore
Non-executive Director
Simon Moore, aged 61, is a consultant Senior Investment
Analyst. He has been an investment trust analyst since 1994 and
has worked with several stockbrokers in the City of London
including Williams de Broe, Teather & Greenwood and Collins
Stewart. He was also Senior Investment Manager at Seven
Investment Management and Head of Research at Tilney
Bestinvest and Senior Investment Analyst at EQ Investors. Simon
is a long-standing member of two important committees at the
Association of Investment Companies: the Statistics committee
and the Property and Infrastructure Forum. In 2013 and 2014
Simon was chosen as one of the Citywire Wealth Manager Top
100 most influential people in UK private client fund selection.
Simon is a scientist by training and has worked at two start up
UK biotechnology companies, before passing on his knowledge
and passion as a science tutor for the Open University. He has a
in
Biochemistry BSc from Imperial College, and an MSc
Computer Modelling of molecules from Birkbeck College. He is
a member of the UK Society of Investment Professionals and the
CFA institute. During 2020 he was appointed as a Non-Executive
Director of Home REIT Plc.
3 | Athelney Trust plc | Annual Report 2021
Strategic Report
Chairman’s Statement and Business Review
Capital Gains
During the year the Company realised capital profits before
expenses arising on the sale of investments in the sum of
£354,843 (2020: £223,957).
Portfolio Review
Additional Holdings Purchased
Additional holdings of Abcam, Clinigen, Fevertree, JD Sports, LXI
REIT, Rightmove, Target Healthcare and Treatt were acquired.
Holdings Sold or Trimmed
AEW UK, Belvoir Group, Churchill China, Games Workshop,
Liontrust Asset Management, Mountview Estates and National
Grid.
Dividend
During the year the Company paid an interim dividend of 2.0p
on 24 September 2021.
The Board recommends a final dividend of 7.5p per ordinary
share making an increased dividend this year of 9.5p (2020:
9.4p). Subject to shareholder approval at the Annual General
Meeting on 5 April 2022, the dividend will be paid on 13 April
2022 to shareholders on the register on 11 March 2022.
Review
Geo-political uncertainties grew during 2021, from more
extremely polarised US politics and questions on that country’s
future role in conflict areas, to the end-game for Taiwan and
Ukraine. Who can forget the mob scenes at the US Capitol or the
chaos at Kabul airport as the rapid withdrawal from Afghanistan
unfolded? It seems in retrospect that 2021 will be seen by
history as a major year of change and development as the usual
suspects reposition on the world stage.
Economies recovered, some faster than expected, thanks to the
remarkably rapid vaccination development and deployment.
Shortages of a wide variety of products occurred as supply
struggled to keep pace with demand. We dined out less, but
bought more goods leading to container port blockages for
example. Common items such as microchips were in such short
supply that delivery on a wide range of items – from cars to
handheld tablets - were delayed. Apple, which navigated the
shortages better than others, estimated the impact to be a loss
of $6 billion to 2021 sales. The IMF estimates that globally 1% of
2021 GDP was lost as a result, however stock markets reached
record highs.
Dear Shareholder
I am pleased to present the Annual Financial Report for the year to
31 December 2021.
The Strategic Report section of this Annual Report has been prepared
to help all Shareholders understand the drivers of performance in the
past year, how the Company operates and to assess its performance.
Overview
Athelney Trust plc (the ‘Company’ or ‘Trust’) experienced a year of
different conditions to 2020 as the global pandemic transitions little
by little to an endemic and economies deal more with the results of
disruption rather than just the health crisis itself.
Your company performed extremely well in this context, and the
key performance points are as follows:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
At 31 December 2021, audited Net Asset Value (NAV) was
310.3p per share (2020: 255.3p), an increase of 21.5% over
the year as compared to a 14.6% increase in the FTSE 250
and a 14.3% increase in the FTSE 100.
The Trust’s investment performance over 12 months as
measured by NAV total return, which is the change in NAV
plus the dividend paid, was 25.2% (2020: -0.22%).
The 12-month revenue return per ordinary share was 7.0p
(2020: 5.9p), an increase of 18.6%.
The interim dividend of 2.0p per share was paid on 24
September 2021.
Your Board recommends a final dividend of 7.5p per share
increasing a total dividend payable for the year to 9.5p
(2020: 9.4p) an increase of 1.1%. UK inflation for 2021 was
4.8% (Office for National Statistics)
This is the 19th successive year of progressive dividend and
importantly returns the Trust to a high position in the
dividend yield league table for Investment Companies. It
also keeps us in the Next Generation of Dividend Heroes list
maintained by the AIC.
Board and Governance
The Board places significant importance on corporate governance
and compliance with the AIC and UK Corporate Governance Codes.
Full details are set out in the Corporate Governance section on
pages 15 to 18.
An Independent Board
The Directors in place at the time of signing these accounts are:
(cid:120) Myself, Frank Ashton – Non-Executive Chairman
(cid:120)
Simon Moore – Non-Executive Director, Chair of Audit
Committee, Chair of Remuneration Committee
Dr Manny Pohl - Managing Director, Fund Manager
(cid:120)
We currently have three directors who together make up an
independent Board under the AIC Code of Governance 2021.
4 | Athelney Trust plc | Annual Report 2021
Strategic Report
Chairman’s Statement and Business Review
Continued
Dividend growth amongst smaller companies was faster still and
this is one of the reasons we focus on small companies; resilience
from the right companies and their management team in times of
adversity. However despite this growth, mid-cap dividends only
ended the year at the same level as 2007/2008. The headlines
were taken in 2021 by mining companies delivering a record
£16.9bn of special dividends, three quarters of this from Rio Tinto
and BHP alone.
Your company’s revenue return improved by 19% to 7p per share
(2020: 5.9p) still below the 9.1p of 2019. NAV total return was a
very healthy 25.2% (2020: -0.2%) improving on the pre-Covid figure
of 22.2%.
Against this backdrop I am pleased to tell you that your Board
recommends a final dividend payment of 7.5p (total 9.5p). This
reflects the better performance and total return for the year,
subject to approval at the AGM. At a share price of 310p on 31
December, this represents a dividend yield of 3.1%, better than the
average 2021 yield from FTSE 250 companies of 1.91% (and
comparable to the FTSE All-Share yield of 3.07%).
Non-executive Director’s fees remain at £10,500 each and your
board continues to exercise a tight grip on costs. Our ongoing
charges figure has fallen again, from 2.45% last year to 2.38%. Your
board understands that while we remain a small fund, reducing this
will continue to be a challenge, however every effort is made to do
this, while maintaining appropriate attention on controls and
governance.
Outlook
There are a number of ongoing uncertainties that may slow the
return to foreign investment in UK stocks, starting with the obvious
potential for another Covid variant prolonging the progress
towards endemicity. Being able to ‘live with the virus’ depends on
social norms for what is ‘acceptable’, the possible occurrence of a
more severe variant and the effectiveness of global vaccinations.
Secondly the risk of conflict or at least lower levels of cooperation
and trade between major nations is higher at the moment, in the
case of Russia, Ukraine and NATO countries, and also between
China, Taiwan and America. Globalisation and trade between
major countries and regions means that local shocks now have a
much larger impact on national economies and in some cases
global outlook than perhaps ever before.
Covid has not encouraged the wider country-country cooperation
or action that was hoped; in fact we see more of the opposite as
politicians act ‘in the national interest’, and countries have to look
after themselves.
A year on from Brexit it is hard to quantify and isolate the impact from
that of COVID, however most agree that so far it has been negative:
The UK’s GDP continues to under-perform the Euro zone which may
be partly due to a loss of EU nationals previously employed in the UK,
increased controls at the border reducing trade, and the long term
effects of the uncertainty created by the referendum result in 2016.
The next few years need to produce clearer benefits to evidence a net
gain; in the meantime UK stocks continue to be under-valued as
investors prefer alternatives and continue to present us, your
company with investment opportunities.
The impact of the new Omicron variant added to the list of
uncertainties in the last quarter of 2021 including how much more
interventionist European governments will become, for example on
mandating vaccinations or on when and how quickly the ‘free money’
and easy lending from central bank intervention will end, or monetary
policy tightens to combat rising interest rates.
I am delighted therefore to report that your company’s NAV
outperformed both the FTSE 100 and 250 markets over the year by
7.2 and 6.9 percentage points respectively. We are seeing the benefit
that Manny Pohl brings in the three years since he became fund
manager with greater conviction, focus and efficiency resulting in a
smaller portfolio that is outperforming comparators. The Board is
very grateful for his concentrated efforts to identify the right
investments and timing to invest or divest, and to continue to provide
returns for shareholders against the backdrop of greater than usual
uncertainties.
As 2021 drew to a close, Apple continued its relentless rise, tripling its
share price since early 2020 when Covid first struck. On the first day
of trading in 2022, it became the first company to realise $3 trillion
market capitalisation, reflecting the importance of technology for
work, education, entertainment and staying connected.
In the wider market a concerted lift to global markets began in April,
benefiting stocks to cryptocurrencies, with a rush into US equities by
retail investors at the heart of that lift. All three major US indices set
record highs in October. As the Federal Reserve retreated from its
stimulus program, however, the bubble burst for Spacs and cryptos,
the newest, frothiest assets.
By the end of the year some assets had lost a third to one half of their
value in just over a month.
Meanwhile your company continues to invest for the long term in the
UK market which has de-rated strongly since 2016 and is now trading
at the lowest price to earnings level against global peers for 30 years:
Its value is attractive on a relative and absolute basis. The UK market
continues to offer the highest dividend yield globally, with high levels
of dividend cover.
In the UK, expectations were that dividends would grow just 8% in
2021, best case (Link Group), however actual underlying growth
(excluding special dividends) was much better at nearly 22% with most
sectors contributing, especially banking (restoring distributions) and
industrials. Mid-caps (+40.1%) rebounded and grew faster than the
top 100 on an underlying basis.
5 | Athelney Trust plc | Annual Report 2021
Strategic Report
Chairman’s Statement and
Business Review Continued
Thirdly there will be unrest as we experience an uncomfortable financial
squeeze. Interest rates will rise to combat inflation. In the case of the
Fed, which many commentators feel has lost its direction in this matter
and dithered too long, it appears likely there will be an abrupt
tightening in response to 7% inflation and a 5% increase in wages and
salaries in America over 2021. Globally, inflation is running at 6% and
here in Europe, central banks are preparing the markets for two or more
interest rate rises in 2022. In the short term, the UK is going to see a
rapid rise in household bills, mostly driven by huge energy price rises;
this has already resulted in calls from the Governor of the Bank of
England for wage restraint to avoid entrenchment of inflation longer
term. To make the challenge bigger, the jobs market is “extraordinarily
tight” according to Governor Andrew Bailey.
At the same time, uncertainty grows for Boris Johnson’s premiership, as
‘Partygate’ gains momentum with a possible fixed penalty notice for
him and senior No 10 staff a possible result. This would certainly trigger
a no-confidence vote by his Tory MPs and a damaging pause to any
possible progress after Brexit while a new leader is selected. All await
the outcome of the Metropolitan Police investigations and the Sue Grey
report.
Together these elements raise concern: History tells us the fight against
inflation normally results in a recession and short term, the UK
is apparently short of governmental leadership that inspires trust and
confidence through challenging times.
In the UK, record mining special dividends of 2021 are likely to not be
repeated in 2022. However B&M and Next already have distributed
such dividends to provide a catch-up and to reflect extra revenue from
lockdown, online pent-up demand and little competition for the wallet
from international travel. There is also some optimism that underlying
dividends for the top 100 will grow by about 5% overall this year (Link
Group): This is likely to be a stronger number for smaller companies
than for the Top 100.
Good companies at fair prices are still overlooked by house
analysts. Those with commitment to a proven system, prepared to
analyse fully and act on conviction, will come out on top in the long
run. Our Managing Director and Fund Manager has many years’
experience relevant to operating successfully in the conditions of
2021 – this continues to bode well for your Trust as we recently
passed his 3 year anniversary in taking on the Fund Management
role.
Our AGM in 2021 was again held virtually, with no shareholders
present, as movement restrictions and the safety of our investors
and colleagues were uppermost in our minds. We plan to hold a
meeting in person for the AGM this year on 5 April 2022 at 12.00
noon. Shareholder engagement and opinion is very important to
us, so there are plans in place to give you the opportunity to
engage with the Board. Details of the proposed AGM can be found
in the separate Notice to the AGM publication.
Manny Pohl, as Fund Manager, will provide a short presentation on
his investment approach for all attendees of the AGM.
I and my colleagues on the board look forward to the chance of
meeting you in person once more. We wish you well in the
meantime.
Frank Ashton
Non-Executive Chairman
23 February 2022
6 | Athelney Trust plc | Annual Report 2021
Strategic Report
Fund Manager’s Review
The Global Scene
The past year has been very unusual characterised by isolation,
distance, and virtuality and one which most of us will be keen to
forget. While 2020 imposed a strange new world upon us, 2021
became the year of the ‘new-normal’. For most of us, this past year
has seen our social circles dwindle dramatically and our online,
virtual lives came to fruition. For me, this year has been most
challenging due to the restrictions on travelling and not seeing loved
ones and long-standing friends. As for everyone, we have had to
adjust, be resilient and find new and alternative ways to move
forward and improve.
Over the past year, we have been teased with our freedoms,
gradually emerging from blanket lockdowns and then focusing on
implementing ongoing regional lockdowns. Many of the rescheduled
2020 sporting events were hosted in 2021, albeit in most cases
without the public in attendance.
For the world community, being resilient in these testing times is the
only attribute that has kept us all going. Sadly, as the world gradually
opened, the reported deaths continued to climb, reaching five
million in November 2021. On a positive note, the vaccines
administered worldwide exceeded 1 billion in June 2021. While
world health officials were focused on combatting different variants
of the virus, businesses were struggling to survive, and consumers
were fearful of disrupted supply chains, low inventories, and rising
inflation.
The Markets and Our Portfolio
Despite this frantic and dramatic backdrop, equity markets and our
portfolio have delivered a remarkable return with the FTSE 100 up
by 7.5% in the final quarter of the year and our portfolio up by 29.1%.
This compared favourably with other major stock markets and better
than the NASDAQ’s 4.1% rise. The NASDAQ, which is home to many
technology companies, has outperformed strongly over the last two
years, but more recently, the share prices of older, more traditional
companies have started to increase. The FTSE 100 is home to many
such companies, including BP, Royal Dutch Shell as well as Utility
companies. It hit a record high of 7457.1 on 29 December 2021
before declining to close at 7384.5 at year-end. I have been
managing the portfolio for the past three years, and I am very
pleased with the performance as shown in Table 1.
Table 1: Performance Metrics
Compound
Growth Rate
1 Yr
2 Yr
3 Yr
5 Yr
10 Yr
ATY PORTFOLIO *
29.1% 15.7% 19.9% n.a
n.a.
ATY NAV
FTSE 250
FTSE 100
21.5% 7.8%
11.2% 4.4%
9.7%
14.6% 3.6%
10.3% 5.4%
8.8%
14.3%
-1.1% 3.2%
0.7%
2.9%
FTSE Small Cap
20.0% 12.0% 12.9% 7.7%
10.5%
* Portfolio performance is time weighted, before management fees,
expenses and dividends and is only available from when Dr Manny Pohl AM
commenced managing the portfolio.
7 | Athelney Trust plc | Annual Report 2021
Despite this excellent stock market performance, the Begbies
Traynor’s “Red Flag Alert”, which has monitored the financial health
of British companies for the past 15 years, now paints a particularly
worrying picture for UK businesses with increasing numbers falling
victim to pressures that have been building up over the past two
years as a result of the COVID-19 pandemic. Therefore, it is essential
in this environment that the portfolio comprises quality businesses
with demonstrated resilience against such a headwind, enabling the
portfolio to outperform.
Any successful business owner makes decisions for the betterment
of their long-term business. Having sustainable practices and a long-
term mindset is vital for any operator in this modern, rapidly
changing world. Sustainability has long been part of our investment
process, and since we see ourselves as business owners (and not
share traders), we invest along similar principles where sustainability
and competitiveness are central to any investment analysis.
While most of the stocks in the portfolio contributed to the
outperformance of the portfolio versus the market, a handful of
names performed exceptionally well, which included Liontrust Asset
Management (LSE: LIO), Tritax Big Box (LSE: BBOX) and AEW UK Reit
(LSE: AEWU). After an impressive performance in 2020, Games
Workshop (LSE: GAW) detracted from the portfolio return over the
year, as did HomeServe (LSE: HSV). At an aggregate level, all of our
alpha was generated through stock selection, as opposed to sector
selection and this is consistent with our style as a bottom-up,
benchmark unaware, high conviction manager.
Liontrust Asset Management (LSE: LIO)
The company was launched in 1995 and listed on the London Stock
Exchange in 1999. LIO currently has approximately £37.2 billion in
assets under management and advice as at the 31 December 2021,
which increased 20% over the financial year. It is a well-run, fairly
vanilla active investment manager which offers traditional products
such as Unit Trusts, Offshore funds, Segregated Mandates, and
fund
Discretionary Portfolio Management
investment
management team applies distinct and rigorous
processes to manage funds and portfolios that ensure portfolio
management is predictable and repeatable. It markets its fund
internationally to institutional investors, wealth managers, financial
advisers, private investors, and wholesale markets such as family
offices, private banks, wealth managers, and multi-managers. The
company’s geographical segments are the United Kingdom, Europe
(excluding the UK), Canada, and Australia.
Services. Each
Tritax Big Box (LSE: BBOX)
Tritax Big Box owns and operates big box stores which serve as the
breakdown point for bulk palleted deliveries and are often port-
centric in their location focus. It is a UK-based real estate investment
trust with the focus on the acquisition and management of large-
scale logistics real estate let to institutional-grade tenants on long-
term leases. The company has benefited from implementing a
strategy that anticipated long-term, structural changes, particularly
the growth in e-commerce. The company has witnessed the most
robust first half performance to date with a 12.5% total return to
June 2021 reflecting an increasingly acute imbalance between
increasing demand and highly constrained supply, in a market with
clear barriers to entry.
Strategic Report
Fund Manager’s Review
Continued
AEW UK REIT (LSE: AEWU)
AEW UK is a conservatively geared REIT with a current loan to NAV
ratio of 29.84%. The company’s investment objective is the
attractive total return to shareholders from primarily investing in a
portfolio of smaller commercial properties in the UK. Geographically,
it operates only in the United Kingdom and the company derives
revenue from rental income and other property income which has
been retained in the portfolio because of its attractive yield.
Chart 1: Contributions to NAV in the period 1 January 2021 to 31 December 2021 (pence per share)
+7(cid:1005)(cid:856)(cid:1010)
-9.7
-2.1
0.0
-4.8
31(cid:1004)(cid:856)(cid:1007)
340.0
320.0
300.0
280.0
260.0
240.0
220.0
200.0
255.3
N(cid:4)(cid:115) 2020
Portfolio
Performance
Dividend Paid Management
Tax
Fee
Operating
Expenses
N(cid:4)(cid:115) 2021
For us, the integrity and credibility of any management team is a
founding principle in our investment process. We need to trust that
management has the best interests for all stakeholders at heart. We
have faith that they will make sound strategic decisions and have
substantial experience and capabilities in their chosen field. As
custodians of our capital, we must ensure that we are doing
whatever we can to preserve capital and grow it over time. We
allocate capital to investments that we believe are sustainable in the
long term. Finding trustworthy, values-based management teams
that align with our core values and beliefs will ensure above-average
investment
economic portfolio
performance and the improvement of societal wellbeing hinges
upon ethical, transparent, and honest leadership. In cases where we
feel we can add something to the conversation, we engage with the
company.
Sustainability of
returns.
A genuine long-term approach
Our process aims to find high-quality businesses that we own for the
very long-term, our portfolio turnover remains low. We continue to
have investments that we have held for over ten years; however, this
doesn’t mean we aren’t always looking for new investments. The
focus this year has been to monitor the individual business
performance in a highly stressful environment of our existing
holdings as opposed to the share price performance to ensure that
they have the sustainable and resilient characteristics mentioned
previously. Few changes have been made to the portfolio with our
exposure to property trusts retained to recognise the need to
maintain the dividend paid to shareholders within a growth style
portfolio.
Investment management is more than merely generating alpha in
excess of a benchmark. While that is a core part of our mandate,
other fundamental qualitative issues are central to what we do. For
example, we recognise that capital allocation is a vehicle to drive
change. We have the opportunity to demand specific standards of
corporate governance, decide whether specific social and ethical
issues are acceptable and, if they are not, we vote with our feet.
8 | Athelney Trust plc | Annual Report 2021
Strategic Report
Fund Manager’s Review
Continued
Investment Philosophy
As far as portfolio investments are concerned, our investment
philosophy is clear:
I. The economics of a business drives long-term investment
returns; and
II.
Investing in high quality, growth businesses that have the ability
to generate predictable, above-average economic returns will
produce superior investment performance over the long-term.
In essence, this means that in assessing potential investments we:
1. Value long-term potential, not just performance
2. Choose high-quality, growing businesses; and
3.
Ignore temporary market turbulence.
The key attributes that will define our investments are:
Organic Sales Growth: Quality franchises organically growing
(cid:120)
sales above GDP growth that can do so (sustainably) because they
have a
large, growing market opportunity and compelling
competitive advantage which will drive ongoing market share gains
are attractive.
the
A Proven Track Record: This encompasses both
(cid:120)
management’s capability and the strength of the business’ model.
Generally, a firm that consistently delivers a Return on Equity of
greater than 15%
indicates a Quality Franchise for us. Our
investment philosophy is built on the belief that a stock’s long-term
return to shareholders is driven by the return on capital of the
underlying business.
Company's Future Profits: In essence we are backing a proven
(cid:120)
management team and a successful business model. Management
are the key decision makers regarding the company’s strategy and
its competitive position in the marketplace. It is critical that we have
confidence in the company’s ability to sustainably execute its
strategy and grow earnings, even in a tough environment like the
current and Brexit conundrum.
Low Leverage: We require investments to operate with low
(cid:120)
levels of debt, which ensures that they have sufficient resources to
execute on their strategy. An Interest Coverage above 4x provides
sufficient bandwidth in times of economic trouble. As a long-term
investor, capital preservation is the highest priority. There is nothing
that changes a management team’s focus toward the short term
quicker than impending debt refinancing when market conditions
suddenly change for the worse. We need to be comfortable that this
will not happen and that the company has a strong enough balance
sheet so that it will retain optionality and can quickly and efficiently
execute its strategy over the long-term.
9 | Athelney Trust plc | Annual Report 2021
Looking Forward
The portfolio outperformance over the past twelve months was
due to a considerable increase in both the earnings and the
dividends declared by our companies and a substantial re-rating
of these businesses by the market. The world economy had the
wind at its back in 2021 with generous fiscal policy and
accommodative central bankers. However, inflation and supply
chains have been identified as the key obstacles to earnings
growth, with central banks now focusing on dealing with the
former. In the US, the Fed is expected to increase interest rates
four times during 2022, and with inflation rising in the UK to 5.4%
in December, the BoE hiked its policy rate by 25 bps to 0.5% at its
February meeting. In Europe, recent data has confirmed an
economic soft patch with the Eurozone January services PMI index
declining by more than expected and the corresponding index in
the UK also declining in January.
long-term economics of a business drives
The net effect of the expected tightening in monetary policy has
placed pressure on the high PE valuations of the market, in
particular growth stocks as future earnings are discounted at a
higher rate. While this will put pressure on our portfolio in the
short term, our investment philosophy is based on the belief that
the
long-term
investment returns. Our companies have strong business models
with capable and experienced management teams. The long-term
financial metrics of our portfolio companies, including organic
sales growth, earnings, and dividend growth, should provide the
impetus for an improvement in valuations or at least be
supportive of the current valuations in the future.
The Athelney dividend is supported in the short-term by the
reserves we have built up through our investment performance as
well as by the ongoing distributions from the high yielding property
trusts. For many of the companies in the portfolio, our estimates
and forecasts for earnings and dividends remain promising. Over
time we expect that dividends from the high growth quality
companies in the portfolio will increase sufficiently so that other
high growth quality companies can replace the property trusts
without jeopardising our AIC dividend hero status.
Update
The unaudited NAV on 31 January 2022 was 282p per share – down
by 9.1% from 31 December 2021, The share price on the same day
was 235p (trading at a discount of 16.5%). Further updates can be
found at www.athelneytrust.co.uk
Dr Manny Pohl AM
Fund Manager
23 February 2022
Strategic Report
Investment and Portfolio Analysis at 31 December 2021
Stock
Holding
Value (£)
Biotechnology
Chemicals
Construction & materials
Electronic & electrical equipment
Food & beverages
General financial
Healthcare
Leisure goods
Media
Mobile communications
Multiutilities
Property, commercial &
residential
Retailers
Support services
Abcam
Treatt
Clarke T
Forterra
XP Power
Fevertree
Close Brothers
Jarvis Securities
Liontrust Asset Management
S & U
Clinigen
Games Workshop
4Imprint
Rightmove
Yougov
Gamma Communications
National Grid
AEW UK REIT
Lok’n Store
Londonmetric
LXI REIT
Target Healthcare REIT
Tritax BigBox REIT
JD Sports
Begbies Traynor
Homeserve
NWF Group
Paypoint
Smart Metering Systems
13,000
26,000
145,000
40,000
4,000
7,000
13,500
116,000
27,000
6,000
30,000
3,500
5,000
30,000
10,100
10,000
14,000
350,000
33,000
100,000
106,923
200,000
170,000
55,000
95,000
16,000
35,000
9,000
8,000
226,460
336,700
232,000
109,000
204,400
189,980
189,135
319,000
592,650
162,600
274,500
349,650
139,500
239,460
157,560
164,800
149,213
392,700
326,700
283,600
154,612
235,600
422,960
119,460
125,780
140,240
71,400
60,120
67,040
SECTOR
£
226,460
336,700
341,000
204,400
189,980
1,263,385
274,500
349,650
536,520
164,800
149,213
%
3.5
5.2
5.3
3.2
3.0
19.6
4.3
5.4
8.3
2.6
2.3
1,816,172
119,460
28.2
1.9
464,580
7.2
Portfolio Value
Net Current Assets
TOTAL VALUE
Shares in issue
Audited NAV
310.3p
£6,436,820
£258,710
£6,695,530
2,157,881
10 | Athelney Trust plc | Annual Report 2021
Strategic Report
Investment and Portfolio Analysis at 31 December 2021
Continued
Portfolio by Sectors
Portfolio by Listing
11 | Athelney Trust plc | Annual Report 2021
Strategic Report
Section 172(1) Statement
The Directors of the Company are required to promote the success
of the Company for the benefit of the Members and Shareholders
as a whole. Section 172(1) of the Companies Act (2006) expands
this duty and requires the Directors to consider a broader range of
interested parties when considering the promotion of the
Company. This wider group of stakeholders will include employees,
if any, suppliers, customers and others, and the Board will look to
understand and take into account the needs of each stakeholder,
although recognising that different stakeholders may have
conflicting priorities and not all decisions made will be to the
benefit of all stakeholder groups.
When making decisions the Board should consider the following:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the likely consequences of any decisions in the long-term;
the interests of the Company’s employees (if applicable);
impact of the Company’s operations on the
the
environment and the community;
the need to foster the Company’s business relationships
with suppliers, customers and others;
the need to act fairly for all members of the Company,
and
the desirability of the Company maintaining a reputation
for high standards of business conduct.
In line with similar small Investment Trusts and Investment
Companies, Athelney Trust plc does not have any customers and
relies on a number of third-party providers of services such as
Company Administrator, the Custodian and the Registrar to
maintain its operations. The Company takes into account the
regulations of the market in which it operates and has regard to the
environment and the wider community in which it operates.
At every Board meeting the Directors review the performance of
the Company towards meeting the Company’s
Investment
Objective through its strategy. Manny Pohl is the fund manager and
reports to other Board members and answers any questions raised.
The compliance with existing regulatory and legal requirements are
reviewed, together with any new regulations that are due to be
introduced or are being proposed that may affect the Company.
The Board recognises the importance of, and is committed to,
understanding the views of Shareholders and maintaining
communication with its Shareholders in the most appropriate
manner.
This is undertaken through:
in normal
Annual General Meeting
The Company,
circumstances encourages all
Shareholders to attend and participate at its Annual General
Meeting (“AGM”). Whilst the formal business of the meeting is the
primary purpose of the meeting, members of the Board are
available to answer questions directly from Shareholders, to
provide an update to the meeting and to offer Shareholders an
insight into the business.
12 | Athelney Trust plc | Annual Report 2021
The AGM held in March 2021 was subject to government COVID-19
restrictions and the Board reluctantly held the meeting behind
closed doors and Shareholders were requested not to attend.
Voting was poll based and Shareholders were requested to email
any questions to the Directors. The Board plan to hold the 2022
AGM in person on 5 April 2022 at 12.00 noon. Further details
regarding the 2022 AGM are contained in the Notice of the Annual
General Meeting published in a separate notification.
Published Reports
The Company produces Annual and Half Yearly Reports and monthly
fact sheets are all available from the Company’s website and paper
copies are available on request from the registered office. The
publication of these reports is considered to be the primary method
of communication to Shareholders and other readers of the reports
and provides detailed information on the portfolio, performance
over the period and an assessment of the outlook for the Company.
The Annual Report also contains details regarding the Company’s
corporate governance and the Board seek to ensure that the Report
is readable and is mindful that it should be fair, balanced and
understandable.
Shareholder enquiries
Shareholders can contact the Company or any of its Directors
through the Company Secretary or through their company email
address. Alternatively, letters can be sent to the registered office
address. Although the Directors are not available full time, with the
assistance of the Company Secretary they seek to maintain open
communication to all Shareholders.
in
the Company. Regular communication
Suppliers
The Company Secretary Deborah Warburton and Administrator GW
& Co. Limited are often the main contact point for advisors and
is
stakeholders
maintained between the Company Secretary and the Directors
advising them of all matters concerning the Company. The Company
also relies on the provision of services from outside parties to
operate and gives consideration to the needs and objectives of
those providers and recognises that their success will often assist
the Company in achieving its objectives.
Regulators
The Company operates in an environment that is governed by legal
and regulatory requirements. The Board recognises that these
requirements are there to protect stakeholders, including the
government.
Environment and Community
As the Company does not have any direct employees nor any
physical office environment of its own it has little direct impact on
the community or the environment. The Company seeks to reduce
its impact on the environment in encouraging Shareholders to
receive Reports electronically rather than through printed hard
copies. When paper copies are requested FSC paper is used. The
Board also engage through electronic means where possible rather
than hold excessive face to face meetings.
Strategic Report
Other Statutory Information
As explained within the Report of the Directors on pages 19 to 20,
the Company carries on business as an
investment trust.
Investment trusts are collective closed-ended public limited
companies.
Board
The Board of Directors is responsible for the overall stewardship of
the Company,
investment and dividend policies,
corporate and gearing strategy, corporate governance procedures
and risk management. Biographical details of the three male
Directors, can be found on pages 2 and 3.
including
One of the Directors is the Company's only employee (2020: one
employee).
Investment Objective
The investment objective of the Trust is to provide shareholders
with prospects of long-term capital growth with the risks inherent
in small cap investment minimised through a spread of holdings in
quality small cap companies that operate in various industries and
sectors. The Fund Manager also considers that it is important to
maintain a progressive dividend record.
Investment Policy
The assets of the Trust are allocated predominantly to companies
with either a full listing on the London Stock Exchange or a trading
facility on AIM or AQSE. The assets of the Trust have been
allocated in two main ways: first, to the shares of those companies
which have grown steadily over the years in terms of revenue and
profits but, despite this progress are undervalued by the market
when compared to future earnings and dividends; second, those
companies whose shares are undervalued by the market when
compared with the value of land, buildings, other assets or cash on
their balance sheet.
Investment Strategy
The investment strategy employed by the Fund Manager in
meeting the
investment objective focuses on active stock
selection. The selection of individual holdings is based on analysis
of, amongst other things, market positioning, competitive
advantage, future growth, financial strength and cash flows. The
weighting of individual investments reflects the Fund Manager’s
conviction in the expected future returns from those holdings.
Investment of Assets
At each Board meeting, the Board considers compliance with the
Company’s investment policy and other investment restrictions
during the reporting period. An analysis of the portfolio on 31
December 2021 can be found on pages 10 and 11 of this report.
Responsible Ownership
The Fund Manager takes a particular interest in corporate
governance and social responsibility investment policy. As stated
within the Corporate Governance Statement on pages 15 to 18,
the Fund Manager’s current policy is available on the Trust’s
website www.athelneytrust.co.uk. The Board supports the Fund
Manager on his voting policy and his stance
towards
environmental, social and governance issues.
13 | Athelney Trust plc | Annual Report 2021
Review of Performance and Outlook
Reviews of the Company’s returns during the financial year, the
position of the Company at the year end, and the outlook for the
coming year are contained in the Chairman’s Statement on pages 4
to 6 and the Fund Manager’s review on pages 7 to 9 which form part
of the Strategic Report.
Principal Risks and Uncertainties and Risk
Management
As stated within the Corporate Governance Statement on pages 15
to 18, the Board applies the principles detailed in the internal control
guidance issued by the Financial Reporting Council, and has
established a continuing process designed to meet the particular
needs of the Company in managing the risks and uncertainties to
which it is exposed.
The principal risks and uncertainties faced by the Company are
described below and
in note 12 which provides detailed
explanations of the risks associated with the Company’s financial
instruments.
(cid:120) 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.
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Investment and strategic – incorrect investment strategy,
asset allocation, stock selection and the use of gearing could
all lead to poor returns for shareholders.
the
recommendations of
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
the UK Corporate
noted
Governance Code and its statement of compliance appears
on pages 15 to 18. A breach of the CTA could result in the
Company losing its status as an investment company and
becoming subject to capital gains tax, whilst a breach of the
Listing Rules might result in censure by the FCA. At each
Board meeting the status of the Company is considered and
discussed, so as to ensure that all regulations are being
adhered to by the Company and its service providers.
Operational – failure of the accounting systems or disruption
to its business, or that of other third-party service providers,
could lead to an inability to provide accurate reporting and
monitoring, leading to a loss of shareholders’ confidence.
third-party
Financial – inadequate controls by the Fund Manager or
other
to
misappropriation of assets.
Inappropriate accounting
policies or failure to comply with accounting standards could
lead to misreporting or breaches of regulations.
service providers could
lead
Environment Emissions
The Company does not have any physical assets, property, or
operations of its own and as such does not generate any
greenhouse gas or other emissions.
Social, Community and Human Rights issues
The Company has one employee and, as far as the Board is aware,
no issues exist in respect of social, community or human rights
issues.
Investment
Fund Manager’s
Alternative
Directive (“AIFMD”)
The Company is registered as its own AIFM with the FCA under the
AIFMD and confirms that all required returns have been
completed and filed.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
23 February 2022
Strategic Report
Other Statutory Information
Continued
(cid:120)
(cid:120)
Liquidity – the Company may have difficulty in meeting
obligations associated with financial liabilities.
Trading – ATY is a small trust and its shares can be illiquid,
which means that investors may have difficulty in dealing in
larger amounts of shares.
The Company has complied with the MiFID ll and KID legislation and
the deadlines to ensure that shares in the Company were still able to
be traded. A copy of the Company’s KID can be found on the website
http://www.athelneytrust.co.uk
The Board is not aware of any breaches of laws or regulations during
the period under review and up to the date of this report.
The Board seeks to mitigate and manage these risks through continual
review, policy setting and enforcement of contractual obligations. It
also regularly monitors the
investment environment and the
management of the Company’s investment portfolio. Investment risk
is spread through holding a wide range of securities in different
industrial sectors.
Statement Regarding Annual Report and Financial
Statements
Following a detailed review of the Annual Report and Financial
Statements by the Audit Committee, the Directors consider that
taken as a whole it is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company’s
performance, business model and strategy.
14 | Athelney Trust plc | Annual Report 2021
Corporate Governance Statement
Frank Ashton retired by rotation and was re-elected at the AGM on
31 March 2021. 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.
All Directors receive relevant training, collectively or individually, as
necessary.
The Directors of the Company meet at regular Board Meetings.
During the year ended 31 December 2021, the Board met a total of
9 times, via conferencing facilities due to face to face meetings being
impossible due to COVID-19 restrictions.
E C Pohl
N F Ashton
S Moore
Board
Meetings
9
9
9
Audit
Committee
-
1
1
Remuneration
Committee
-
1
1
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 comprises three male
Directors. 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 it has
an appropriate breadth of skills and experience. The Board is not
currently planning to add a fourth Director to the Board.
The basis on which the Company aims to generate value over the
longer term is set out in the Strategic Report on pages 4 to 14. 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.
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.
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 January 2021 which can be found at www.frc.org.uk. The
Association of Investment Companies issued its own Code of
Corporate Governance in April 2021 (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
provisions on issues which are of specific relevance to investment
trusts. The Board considers that reporting against the Principles
and Provisions of the AIC Code, which has been endorsed by the
FRC, provides more relevant information to shareholders.
The Company has not complied with the provisions of the AIC Code
and the UK Corporate Governance Code in respect of the
following:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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.
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. One third of the Directors retires by
rotation annually in accordance with the Company’s
articles of association.
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 comprised a maximum of three Directors who
liaised continuously throughout and were aware of their
obligations to consider recruitment of further Directors as and
when the occasion occurred.
Board Membership
At 31 December 2021 the Board consisted of three Directors, of
which two were and remain independent. The biographies of all
the current Directors are contained on pages 2 and 3.
15 | Athelney Trust plc | Annual Report 2021
Corporate Governance Statement
Continued
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:
(cid:120)
•
The maintenance of clear investment objective 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
cash availability and
comparisons with previous
requirements and a breakdown of shareholdings by listing and
sector. The Board takes account of Corporate Governance best
practice.
years,
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
Mr. N 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.
16 | Athelney Trust plc | Annual Report 2021
Remuneration Committee
During the year the Remuneration Committee comprised Simon
Moore and Frank Ashton. 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.
the
remuneration arrangements can be found in the Directors’
remuneration report on pages 22 to 24 and in note 4 to the
financial statements.
information on
Detailed
Company Secretary
The Company Secretary, Deborah Warburton FCCA,
is
responsible for ensuring that Board and Committee procedures
are followed and that the Company complies with regulations.
The Company Secretary also ensures 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 Secretary.
Professional
Independent
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.
Advice
and
The Chairman liaises on a regular basis with the other Directors
and the Company Secretary 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 comprised Simon Moore
and Frank Ashton. 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.
Corporate Governance Statement
Continued
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.
Significant Issues Considered by the Audit Committee in Relation to the Financial Statements
Matter
Action
COVID-19 pandemic
The COVID-19 pandemic has adversely affected the global
economy and this, in turn still, may impact on the valuation of
investee companies and their ability to pay dividends.
Key service providers could experience high levels of staff
illness which may interrupt services.
The Fund manager and the Administrator monitor the dividend
situation monthly and make the Board aware of cancelled,
postponed dividends as soon as they become aware.
The Board have checked with key service providers the steps they
have taken to protect their employees and procedures they have
in place for a continuity of service.
Investment Portfolio Valuation
The Company’s portfolio is invested predominantly in listed
securities. Although all the securities are fully listed or traded
on AIM or AQSE, 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 agreed on a monthly basis by the Company
Secretary 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 Secretary.
•
The rules concerning the appointment and replacement of
in the Company’s Articles of
Directors are contained
Association and are discussed on page 19.
The Board is seeking to renew its current powers to issue and re-
purchase shares at the forthcoming Annual General Meeting.
•
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.
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 2021. 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
issued an
internal control weaknesses. Hazlewoods LLP
unqualified audit report which is included on pages 25 to 28.
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 19 and 20.
Details of the substantial shareholders in the Company are
listed on page 19.
17 | Athelney Trust plc | Annual Report 2021
Corporate Governance Statement
Continued
Relations with Shareholders
The Company places great importance on communication with
shareholders and welcomes their views. The Chairman and the
other Directors have spoken to major shareholders during the year
to discuss their aspirations for the Company going forward. 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.
To comply with the AIC Code the Board are required to consult
with shareholders when 20 percent or more of votes have been
cast against Board recommendations for a resolution. Due to
COVID-19 the AGM on the 31 March 2021 was held behind closed
doors with no shareholders in physical attendance. All resolutions
proposed at the AGM were unanimously passed.
The notice and further details of the Annual General Meeting, to be
held on 5 April 2022 at 12.00 noon, is published in a separate
notification. 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.
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 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 authorization 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 Secretary in detail on a
regular basis.
In accordance with guidance
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.
issued to Directors of
On behalf of the Board
• 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;
Dr Manny Pohl AM
Managing Director
23 February 2022
18 | Athelney Trust plc | Annual Report 2021
Report of the Directors
The Directors present their report and audited
financial
statements of the Company for the year ended 31 December 2021.
This report also contains certain
in
accordance with S992 of the Companies Act 2006.
information required
Results and Dividends
The return on ordinary revenue activities before dividends for the
year is £151,260 (2020: £127,275) as detailed on page 29.
The company paid an interim dividend of 2.0p per ordinary share
on the 24 September 2021.
It is recommended that a final dividend of 7.5p per ordinary share
be paid. This will increase the total dividend paid this year to 9.5p
(2020: 9.4p) per ordinary share.
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
2020. The Directors are of the opinion that the Company has
conducted its affairs for the year ended 31 December 2021 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 pages 2 and
3.
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. Simon Moore and Manny Pohl will
retire at the 2022 AGM and will offer themselves for re-election.
In addition to any power of removal conferred by the Companies
Acts, the Company may by special resolution remove any Director
without notice.
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.
19 | Athelney Trust plc | Annual Report 2021
Capital Structure
At 31 December 2021 the Company’s capital structure consisted of
2,157,881 Ordinary Shares of 25p each (2020: 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 is stated on page 24 in the Directors’ Remuneration
Report.
Dr E. C. Pohl AM
(Managing Director)
N. Ashton
S. Moore
(Chairman)
(Non-Executive Director)
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.
J C Pohl as alternate Director for Dr E C Pohl. As Dr E C Pohl was able
to attend all meetings of the Board during the year, J C Pohl was not
required to act as his alternate.
Substantial Shareholders
The Directors have been notified of the
following major
shareholdings in the Company that represent greater than 3% of the
voting rights:
Ordinary Shares
E C Pohl & Co Pty Ltd
IP Worldwide Flexible Fund
Astuce Group
Mehr Mutual
Mr GW & Mrs DJ Whicheloe
Mrs E Davison
Mr C Frostick
Mr S Moore
P Grodzinski
496,000
339,054
140,000
105,818
81,500
75,000
70,500
67,500
65,000
% of
Issue
22.9
15.7
6.5
4.9
3.8
3.5
3.3
3.1
3.0
Out of the nine major shareholders listed above three were under
the direct control of two of the Directors during the year. The
remaining six are in regular contact with the Directors (or their
respective agent) to ensure that they are frequently apprised and
are content with the manner in which the Company is being run.
On 12 January 2022 E C Pohl & Co Pty Ltd sold 410,000 shares to
Astuce Group. Manny Pohl is a Director of E C Pohl & Co Pty Ltd and
Astuce Group. No other major sharehold(cid:286)(cid:396)(cid:3)(cid:410)(cid:396)(cid:258)(cid:374)(cid:400)(cid:258)(cid:272)(cid:410)(cid:349)(cid:381)(cid:374)(cid:400) took place
up until 14 February 2022.
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.
Engagement with Suppliers and Other Business
Relationships
The Directors have regard for the need to maintain good business
relationships with suppliers and other businesses that the
Company may have contact with throughout the year. Suppliers
are paid in a timely manner and well within the credit terms
afforded to the Company. Other business relationships are
maintained on a professional and courteous level with regular
contact being maintained by the Fund Manager, Company
Secretary and Audit Committee Chairman.
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 13 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 or AQSE.
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.
20 | Athelney Trust plc | Annual Report 2021
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 13 and 14), 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.
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.
instruments comprise
Financial Instruments
The Company’s financial
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.
its
Annual General Meeting
The Notice of Annual General Meeting is published in a separate
notification.
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.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
23 February 2022
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
(United Kingdom Generally
Kingdom Accounting Standards
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:
•
•
•
in accordance with UK
the Financial Statements, prepared
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 http://www.athelneytrust.co.uk
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
23 February 2022
21 | Athelney Trust plc | Annual Report 2021
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 Auditor’s opinion is included in their
report on pages 25 to 28.
Remuneration Committee
The Company had a Remuneration Committee during the year
comprising Simon Moore and Frank Ashton.
The Committee met during the year to review and implement
measures to avoid or manage conflicts of interest where applicable
and to consider and approve the Directors’ remuneration for the
year ending 31 December 2021.
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 2022 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 of appropriate.
Fees for any new Director appointed will be made on the same basis.
Non-executive Director’s fees have been set at £10,500 per annum for
a number of years and no changes are expected for the foreseeable
future.
The salary for the Managing Director and Fund Manager has been
fixed at 0.75% of the portfolio value.
The policy was last approved by Shareholders at the Annual General
Meeting on 30 March 2021 and will remain valid until the Annual
General Meeting in 2023.
Directors’ Service Contracts
Each of the Directors has a service contract or letter of engagement
with the Company for an initial three-year term commencing in 2019.
There are no provisions in the service agreements for payments to be
made for loss of office, the service contracts are kept at the
Registered Office and are available for inspection by appointment.
The letters of engagement for all the Directors provide for renewal by
the Board on terms to be agreed from time to time.
Company Performance
The graph below compares capital growth, for the ten financial years
ended 31 December 2021, as a cumulative performance graph over
the whole 10 years and a table of discrete calendar year performance
figures. The comparison is between AIM All-Share and FTSE Small
Caps indices 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.
22 | Athelney Trust plc | Annual Report 2021
Directors’ Remuneration Report
Continued
Capital Growth
(re-based to 100 at 31/12/2011)
300
250
200
150
100
50
0
2011
2012
2013
ATY NAV
2014
FTSE100
2015
2016
FTSE 250
2017
FTSE Small Cap
2018
2019
AIM All Share
2020
2021
ATY NAV
FTSE 100
FTSE 250
FTSE Small Cap
AIM All Share
2012
21.1%
5.8%
22.5%
46.1%
37.4%
2014
2013
4.0%
47.0%
-2.7%
14.4%
0.9%
28.8%
4.2% -24.0%
17.9% -31.4%
2015
7.5%
-4.9%
8.4%
7.8%
27.5%
2016
2.5%
14.4%
3.7%
4.5%
8.6%
2017
2018
13.4% -20.7%
7.6% -12.5%
14.7% -15.6%
3.6% -23.8%
8.8% -34.2%
2020
2019
18.2%
-4.4%
12.1% -14.3%
-6.4%
25.0%
4.4%
31.2%
20.7%
36.4%
2021
21.5%
14.6%
14.3%
20.0%
5.2%
Expected
Fees for the
Year to 31
December
2022
10,500
46,000
10,500
Fees for
Year to 31
December
2021
10,500
44,877
10,500
Chairman basic
Fund Manager
Non-Executive
No expenses were claimed by any Directors during this year.
Past performance is no guarantee of future performance.
Directors’ Remuneration for the Year (audited)
The Directors who served in the year received the following
remuneration in the form of salaries or non-executive Directors’
fees, no other salary related payments were made to any Director
during the year.
Dr E C Pohl - Managing Director
- Fund Manager
S Moore (Non-executive)
F Ashton (Chairman)
D Lawman (Non-executive)
Directors expenses
2021
£
-
44,877
10,500
10,500
-
-
2020
£
-
37,807
10,500
10,500
2,625
-
65,877
61,432
The Directors’ remuneration for the year of £65,877 which is up
by 7.2% on 2020 and is before the proposed final dividend of 7.5p
increasing the total dividend for the year to 9.5p (2020: 9.4p) per
ordinary share, and as compared to total dividends paid in the
year at 9.7p per share amounting to £202,840 (£200,683). The
remuneration increase is due to the increase in the portfolio
value during the year on which the Fund Manager’s fee is based.
23 | Athelney Trust plc | Annual Report 2021
Directors’ Remuneration Report
Continued
Relative importance of spend on pay
Total remuneration
paid to the Fund
Manager
Total remuneration
paid to non-
executive Directors
Total remuneration
paid
2021
44,877
2020
37,807
% Change
19%
21,000
23,625
-11%
65,877
61,432
8%
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:
The Directors’ Remuneration Report for the year ended 31 December
2020 was approved by shareholders at the Annual General Meeting
held on 30 March 2021. The votes cast by proxy were as follows:
% of
votes
Number of
Votes
For
Against
Total votes cast
Number of votes withheld
776,234
Nil
776,234
Nil
36
-
36
-
Approval
The Directors’ Remuneration Report was approved by the Board
on 23 February 2022.
31
December
2021
(or date of
Resignation
If earlier)
31
December
2020
(or date of
appointment
if later)
-¹
67,500
2,234
-¹
67,500
2,234
Dr Manny Pohl AM
Managing Director
Dr E. C. Pohl
S. Moore
F. Ashton
Notes:
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. E C Pohl & Co Pty
Limited holds 496,000 (2020: 394,000), Global Masters
Fund Limited holds nil (2020: 102,000) shares in the
Company.
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. There are no requirements for the Director’s to
own shares in the Company.
The Directors are fully aware that the Company is not a close
company and of the rules associated with this status. The Company
Secretary maintains a record of shareholders which is regularly
updated. The Company breached the 5/50 rule during 2019 and this
has remained during 2020 and 2021 due to the top 5 shareholders
owning more than 50% of the total shares in the company. The
Company holds
Investment Trust status under the S446
Companies Act 2010 exemption because more than 35% of the
company’s shares are held by the public and have been actively
traded in the past 12 months on the London Stock Exchange.
its
.
24 | Athelney Trust plc | Annual Report 2021
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 2021, 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
law and United Kingdom Accounting
preparation
Standards, including Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
is applicable
In our opinion the financial statements:
(cid:120) give a true and fair view of the state of the Company’s affairs as
at 31 December 2021 and of its net return for the year then
ended;
(cid:120) have been properly prepared
in accordance with United
Kingdom Generally Accepted Accounting Practice;
(cid:120) 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.
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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
25 | Athelney Trust plc | Annual Report 2021
In making this assessment we have considered the directors’
procedures for overseeing the activities of the company and
reviewing its results and forecasts. The application of those
procedures has been supported by us reviewing Board minutes and
other accessible documentation which confirm that the directors
regularly benchmark key performance indicators which include but
is not restricted to, comparing performance against the FTSE Small
Cap, FTSE 250 and FTSE 100 markets, frequent monitoring of
available funds, anticipated cash outflows and financial headroom.
In conjunction with the evaluation of management’s assessment of
going concern, we have observed that resources are carefully
planned and managed with the intention of ensuring that the
company has sufficient resources available and accessible to ensure
that the company’ commitments and obligations are capable of
being met as they fall due.
In relation to the entity’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the
financial statements about whether the director’s considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Our approach to the audit
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 the risk of management override of
controls are always deemed risks in any audit. This is not a complete
list of all risks identified by our audit.
VValuation, 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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
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 custodian confirmations, we have only checked to
custodian confirmations.
AAllocation 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 nine
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 preparation 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
There is always a presumed risk that revenue may be misstated due to
the improper and/or incomplete 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; checking on a sample basis
income
transactions by comparing dividends during the year obtained from an
independent source with those recognised by the Company; checking
on a sample basis gains and losses on investments to third party
contracts; and checking transactions close to the financial year end
date on a sample basis, to ensure that they have been allocated to the
correct accounting period.
Investment trust status
In order to maintain its status as a tax exempt investment trust certain
criteria must be fulfilled. These requirements include a 15% limit on
retention of income after dividends and revenue expenses and a
minimum of 35% of the Company’s shares must be owned by the
general public and traded on a recognised stock exchange. Our audit
work included, but was not restricted to: reviewing calculations to
ensure that no more than 15% of income was retained after dividends
and revenue expenditure; reviewing the shareholder' register to
ensure that at least 35% of the shares were not held by related parties;
and obtaining an Audit Representation Letter from the Company's
Directors confirming that they complied with the applicable rules.
26 | Athelney Trust plc | Annual Report 2021
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.
We established materiality for the financial statements as a whole
to be £134,000, which is 2% 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 £38,000, which is 25% of the
Company’s net revenue return on ordinary activities before
taxation.
Other information
The Directors are responsible for the other information contained
within the annual report. 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:
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
(cid:120) Fair, balanced and understandable, set out on page 12 – 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
(cid:120) Audit committee reporting, set out on pages 16 to 17 – the
section describing the work of the audit committee does not
appropriately address matters communicated by us to the audit
committee; or
(cid:120) Directors’ statement of compliance with the UK Corporate
Governance Code, set out on page 15 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.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the course of the
audit:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 in:
27 | Athelney Trust plc | Annual Report 2021
(cid:120)
(cid:120)
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:
(cid:120) 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
(cid:120)
(cid:120) certain disclosures of Directors’ remuneration specified by law
are not made; or
(cid:120) we have not received all the information and explanations we
require for our audit; or
(cid:120) a corporate governance statement has not been prepared by
the Company.
Corporate governance statement
The Listing Rules require us to review the directors' statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the entity's
compliance with the provisions of the UK Corporate Governance
Statement specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
(cid:120)
(cid:120)
(cid:120)
the disclosures in the annual report set out on pages 13 to 14
that describe the principal risks and explain how they are being
managed or mitigated;
the Directors’ confirmation set out on page 13 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 20 in the financial
statements about whether the Directors considered
it
appropriate to adopt the going concern basis of accounting in
financial statements and the Directors’
preparing the
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;
(cid:120) whether the Directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3)
inconsistent with our knowledge
obtained in the audit; or
is materially
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
(cid:120)
the Directors’ explanation set out on page 20 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.
Responsibilities of Directors
As explained more fully in the Statement of Directors' responsibilities
(set out on page 20), 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.
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.
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud.
The audit evidence available in relation to the investment portfolio
and associated returns are publicly available and considered to be
strong sources of audit evidence. Ownership has been verified
against custodian documentation and confirmations.
The nature of the company’s activities means that overheads are
generally consistent and predictable and where unexpected
variances occur, adequate evidence is available.
Our audit work, which utilises the above audit evidence along with
the audit procedures outlined in our description of our approach
to the audit above, provides us with a reasonable assurance that
our audit procedures will detect irregularities, including fraud.
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/auditorsresposibilities. 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 auditor’s 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.
Ryan Hancock FCCA (Senior Statutory Auditor)
for and on behalf of Hazlewoods LLP
Statutory Auditor, Cheltenham.
23 February 2022
28 | Athelney Trust plc | Annual Report 2021
Income Statement
For the Year Ended 31 December 2021
Note
Revenue
2021
Total
Capital
Revenue
Capital
2020
Total
Gains/(losses) on
investments held at
fair value
Income from
investments
Investment
management
expenses
Other expenses
Net return on
ordinary activities
before taxation
Taxation
Net return on
ordinary activities
after taxation
Net return per
ordinary share
Dividend per
ordinary share paid
during the year
8
2
3
3
5
6
6
7
£
£
£
-
1,359,219
1,359,219
£
-
£
£
(30,695)
(30,695)
186,393
-
186,393
160,876
-
160,876
(4,488)
(40,692)
(45,180)
(3,781)
(34,221)
(38,002)
(30,645)
(72,964)
(103,609)
(29,820)
(75,688)
(105,508)
151,260
1,245,563
1,396,823
127,275
(140,604)
(13,329)
-
-
-
-
-
-
151,260
1,245,563
1,396,823
127,275
(140,604)
(13,329)
7.0p
57.7p
64.7p
5.9p
(6.5p)
(0.6p)
9.7p
11p
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the year.
The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with
applicable Financial Reporting Standards (“FRS”). The supplementary revenue return and capital return columns are prepared in
accordance with the Statement of Recommended Practice (“AIC SORP”) issued in April 2021 by the Association of Investment
Companies.
The notes on pages 33 to 37 form part of these financial statements.
29 | Athelney Trust plc | Annual Report 2021
Statement of Changes in Equity
For the Year Ended 31 December 2021
Called-up
Share
Capital
£
Share
Premium
£
Capital
reserve
realised
£
Capital
reserve
unrealised
£
Revenue
reserve
£
Total
Shareholders’
Funds
£
539,470
881,087
1,916,502
1,982,060
439,598
5,758,717
-
-
-
-
-
-
-
-
-
-
223,957
-
-
(254,652)
-
-
(109,909)
-
-
-
-
-
-
127,275
(237,367)
223,957
(254,652)
(109,909)
127,275
(237,367)
539,470
881,087
2,030,550
1,727,408
329,506
5,508,021
539,470
881,087
2,030,550
1,727,408
329,506
5,508,021
-
-
-
-
-
-
-
-
-
-
354,843
-
-
1,004,376
-
-
(113,656)
-
-
-
-
-
-
151,260
(209,314)
354,843
1,004,376
(113,656)
151,260
(209,314)
539,470
881,087
2,271,737
2,731,784
271,452
6,695,530
Balance brought forward at
1 January 2020
Net profits on realization
of investments
Decrease in unrealized
Appreciation
Expenses allocated to
Capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at 31
December 2020
Balance brought forward at
1 January 2021
Net profits on realization
of investments
Increase in unrealized
Appreciation
Expenses allocated to
Capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at 31
December 2021
The notes on pages 33 to 37 form part of these financial statements.
30 | Athelney Trust plc | Annual Report 2021
Statement of Financial Position
As at 31 December 2021
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
2021
£
2020
£
6,436,820
5,310,661
245,163
30,676
275,839
Creditors: amounts falling due within one year
10
(17,129)
Net current assets
Total assets less current liabilities
Net assets
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
11
258,710
6,695,530
6,695,530
539,470
881,087
2,271,737
2,731,784
271,452
6,695,530
Net Asset Value per share
13
310.3p
142,136
72,601
214,737
(17,377)
197,360
5,508,021
5,508,021
539,470
881,087
2,030,550
1,727,408
329,506
5,508,021
255.3p
These financial statements were approved and authorised for issue by the Board of Directors on 23 February 2022 and signed on their
behalf by
Dr Manny Pohl AM
Managing Director
The notes on pages 33 to 37 form part of these financial statements.
31 | Athelney Trust plc | Annual Report 2021
Statement of Cash Flows
For the Year Ended 31 December 2021
Cash flows used in operating activities
Net revenue return
Adjustment for:
Expenses charged to capital
Decrease in creditors
(Increase)/decrease in debtors
Cash (used)/generated from operations
Cash flows from investing activities
Purchase of investments
Proceeds from sales of investments
Net cash received in investing activities
Equity dividends paid
Net decrease in cash
Cash at the beginning of the year
Cash at the end of the year
2021
£
151,260
(113,656)
(248)
(103,027)
(65,671)
(545,379)
778,439
233,060
(209,314)
(41,925)
72,601
30,676
2020
£
127,275
(109,909)
(4,732)
81,597
94,231
(1,137,856)
1,262,691
124,835
(237,367)
(18,301)
90,902
72,601
As the company does not have any loans, overdrafts or hire purchase arrangements, net debt is equal to cash and therefore no
reconciliation of net debt has been disclosed.
The notes on pages 33 to 37 form part of these financial statements.
32 | Athelney Trust plc | Annual Report 2021
Notes to the Financial Statements
For the Year Ended 31 December 2021
1. Accounting Policies
1.1 Statement of Compliance and Basis of Preparation of Financial
Statements
The financial statements are prepared in accordance with applicable
United Kingdom accounting standards, including Financial Reporting
Standard 102 (“FRS 102”), the Companies Act 2006 and with the AIC
Statement of Recommended Practice (“SORP”) issued in April 2021,
regarding the Financial Statements of Investment Trust Companies
and Venture Capital Trusts. All the Company’s activities are
continuing.
The presentation currency of the financial statements is pounds
sterling, being the functional currency of the primary economic
environment in which the company operates. Monetary amounts in
these financial statements are rounded to the nearest pound.
1.2 Income
Income from investments including taxes deducted at source is
recognised when the right to the return is established (normally the
ex-dividend date). UK dividend income is reported net of tax credits
in accordance with FRS 102 “Income Tax”. Interest is dealt with on
an accruals basis.
1.3 Investment Management Expenses
All three Directors are involved in investment management, 10% of
their salaries or fees have been charged to revenue and the other
90% to capital. All other investment management expenses have
been charged to capital. The Board propose continuing this basis for
future years.
1.4 Other Expenses
Expenses (including VAT) and interest payable are dealt with on an
accruals basis and charged through the Revenue and Capital
Accounts in an allocation that the Board consider to be a fair
distribution of the costs incurred.
1.5 Investments
Listed investments comprise those listed on the Official List of the
London Stock Exchange. Unlisted investments are traded on AIM.
Profits or losses on sales of investments are taken to realised capital
reserve. Any unrealised appreciation or depreciation is taken to
unrealised capital reserve.
year, similarly, AIM-traded investments are valued using the closing
bid price on 31 December.
1.6 Taxation
The tax effect of different items of income and expenses is allocated
between capital and revenue on the same basis as the particular
item to which it relates, using the Company’s effective rate of tax for
the year.
1.7 Judgements and estimates
The Directors confirm that no judgements or significant estimates
have been made in the process of applying the Company’s
accounting policies.
1.8 Deferred Taxation
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed by the balance sheet date.
Deferred tax
liabilities are recognised for all taxable timing
differences but deferred tax assets are only recognised if it is
considered more likely than not that there will be suitable profits
from which the future reversal of the underlying timing differences
can be deducted. Deferred tax assets and liabilities are calculated at
the tax rates expected to be effective at the time the timing
differences are expected to reverse. Deferred tax assets and
liabilities are not discounted.
1.9 Capital Reserves
Capital Reserve – Realised
Gains and losses on realisation of fixed asset investments are dealt
with in this reserve.
Capital Reserve – Unrealised
Increases and decreases in the valuations of fixed asset investments
are dealt with in this reserve. Unrealised capital reserves cannot be
distributed by way of dividends or similar.
1.10 Dividends
In accordance with FRS 102 “Events after the end of the Reporting
Period”, dividends are included in the financial statements in the
year in which they go ex-div.
Investments have been classified as “fair value through profit and
loss” upon initial recognition.
1.11 Share Issue Expenses
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
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.
33 | Athelney Trust plc | Annual Report 2021
Notes to the Financial Statements
For the Year Ended 31 December 2021 (continued)
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
2021
£
117,516
11,752
57,078
47
186,393
2020
£
95,482
17,834
47,480
80
160,876
2021
£
2020
£
74,755
42,741
65,476
30,006
117,496
95,482
3. Return on Ordinary Activities before Taxation
The following amounts (inclusive of VAT) are included within
investment management and other expenses:
Directors’ remuneration:
Services as a director
Otherwise in connection with
management
Auditor’s 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
2021
£
2020
£
21,000
44,877
23,625
37,807
11,964
9,250
-
32,472
4,101
10,020
23.215
-
32,472
2,310
11,540
24,044
1,140
148,789
2,460
143,508
4. Employees and Directors’ Remuneration
Costs in respect of Directors:
Non-executive Directors’ fees
Wages and salaries
2021
£
21,000
44,877
65,877
2020
£
23,625
37,807
61,432
Average number of employees:
Chairman
Investment
Administration
-
1
-
1
-
1
-
1
5. Taxation
(i) On the basis of these financial statements no provision has been
made for corporation tax (2020: Nil).
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is lower than (2020: higher than) the
average small company rate of corporation tax in the UK of 19 per
cent. The differences are explained below:
Total return on ordinary activities
before tax
Total return on ordinary activities
multiplied by the average small
company rate of corporation tax 19%
(2020: 19%)
Effects of:
UK dividend income not taxable
Revaluation of shares not taxable
Capital gains not taxable
Unrelieved management expenses
2021
£
1,396,823
2020
£
(13,329)
265,396
(2,532)
(22,328)
(190,831)
(67,420)
15,183
(18,142)
48,384
(42,552)
14,842
Current tax charge for the year
-
-
The Company has unrelieved excess revenue management
expenses of £595,482 at 31 December 2021 (2020: £401,358) and
£102,597 (2020: £102,597) of capital losses for Corporation Tax
purposes and which are available to be carried forward to future
years. It is unlikely that the Company will generate sufficient
taxable profits in the future to utilise these expenses and therefore
no deferred tax asset has been recognised.
For the year ended 31 December 2020, the Company received
approval from HM Revenue and Customs under Section 1158 of the
Corporation Tax Act 2010, therefore the Company was not liable to
Corporation Tax on any realised investment gains for 2020. The
Directors intend to continue to meet the conditions required to
obtain approval and therefore no deferred tax has been provided
on any capital gains or losses arising on the revaluation or disposal
of investments.
34 | Athelney Trust plc | Annual Report 2021
Notes to the Financial Statements
For the Year Ended 31 December 2021 (continued)
6. Return per Ordinary Share
The calculation of earnings per share has been performed in
accordance with FRS 102.
£
Revenue
151,260
2021
£
Capital
1,245,563
2,157,881
£
Total
1,396,823
7.0p
57.7p
64.7p
£
Revenue
127,275
2020
£
Capital
(140,604)
2,157,881
£
Total
(13,329)
5.9p
(6.5p)
(0.6p)
Attributable return on
ordinary activities after
taxation
Weighted average
number of shares
Return per ordinary
share
Attributable return on
ordinary activities after
taxation
Weighted average
number of shares
Return per ordinary
share
7. Dividend
2021
£
166,157
2020
£
200,683
Final dividend in respect of 2020 of
7.7p (2020: a final dividend of 9.3p
was paid in respect of 2019) per
share
Interim dividend in respect of 2021
of 2.0p (2020: an interim dividend
of 1.7p was paid in respect of 2020)
per share
209,314
196,367
Set out below is the total dividend payable in respect of the financial
year, which is the basis on which the requirements of Section 1158 of
the Corporation Tax Act 2010 are considered.
It is recommended that a final dividend of 7.5p (2020: 7.7p) per
ordinary share be paid out of revenue profits amounting to a total of
£161,841. An interim dividend of 2p per ordinary share was paid on 24
September 2021 amounting to £43,157 making the total dividend
payable in the year £204,998.
Summary of dividends paid for the last 10 financial years
Ex-div date
10/3/2022
09/9/2021
11/3/2021
10/9/2020
19/3/2020
20/3/2019
01/3/2018
09/3/2017
17/3/2016
19/3/2015
19/3/2014
20/3/2013
21/3/2012
Dividend
Type
Proposed
Interim
Final
Interim
Final
Final
Final
Final
Final
Final
Final
Final
Final
Amount
7.5p
2.0p
7.7p
1.7p
9.3p
9.1p
8.9p
8.6p
7.9p
6.7p
5.5p
5.0p
4.95p
Financial
Year
2021
2021
2020
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
for
available
Revenue
distribution
Interim dividend paid
Final dividend in respect of
financial year ended 31
December 2021
2021
£
151,260
2020
£
127,275
(43,157)
(36,684)
(161,841)
(166,157)
Undistributed
reserves
revenue
(53,738)
(75,566)
Valuation at beginning of
year
Purchases at cost
Sales - proceeds
- realised gains on sales
Increase/(decrease)
in
unrealised appreciation
Valuation at end of year
Book cost at end of year
Unrealised appreciation at
the end of the year
2021
£
5,310,661
545,379
(778,439)
354,843
1,004,376
2020
£
5,466,191
1,137,856
(1,262,691)
223,957
(254,652)
6,436,820
5,310,661
3,705,034
2,731,786
3,583,255
1,727,406
6,436,820
5,310,661
8. Investments
43,157
36,684
Movements in year
For the year 2020, a final dividend of 7.7p was paid on 6 April 2021
amounting to a total of £166,157. An interim dividend of 1.7p per
ordinary share was paid on 24 September 2020 amounting to £36,684
making the total dividend paid in the year £202,841.
UK Main Market
investments
UK AIM-traded shares
listed
5,014,560
3,791,591
1,422,260
1,519,070
6,436,820
5,310,661
35 | Athelney Trust plc | Annual Report 2021
Notes to the Financial Statements
For the Year Ended 31 December 2021 (continued)
Gains on investments
Realised gains on sales
Increase/(decrease)
appreciation
in
unrealised
2021
£
354,843
1,004,376
2020
£
223,957
(254,652)
1,359,219
(30,695)
The purchase costs and sales proceeds above include transaction costs
of £3,515 (2020: £7,910) and £3,302 (2020: £5,056) respectively.
9. Debtors
Investment transaction debtors
Other debtors
2021
£
236,912
8,251
245,163
2020
£
133,210
8,926
142,136
10. Creditors: amounts falling due within one
year
Social security and other taxes
Other creditors
Accruals and deferred income
2021
£
719
2,850
13,560
17,129
2020
£
-
2,850
14,527
17,377
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
2021
£
2020
£
2,500,0000
2,500,000
539,470
539,470
12. Financial Instruments
The Company’s financial instruments comprise equity investments, cash
balances and debtors and creditors that arise directly from its operations,
for example, in respect of sales and purchases awaiting settlement.
Adherence to the investment objectives and the internal
controls on investments set by the Company mitigates the risk
of excessive exposure to any one particular type of security or
issuer.
The Company’s exposure to other changes in market prices at
31 December on its investments is as follows:
A 20% decrease in the market value of investments at 31
December 2021 would have decreased net assets attributable
shareholders by 60 pence per share (2020: 49 pence per share).
An increase of the same percentage would have an equal but
opposite effect on net assets available to shareholders.
Market risk also arises from changes in interest rates and
exchange risk. All of the Company’s assets are in sterling and
accordingly the Company has limited currency exposure. The
majority of the Company’s financial assets are non-interest
bearing, as a result, the Company’s financial assets are not
subject to significant risk due to fluctuations in the prevailing
levels of market interest rates.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the balance sheet date.
Bankruptcy or insolvency of the custodian may cause the
Company’s rights with respect to securities held with the
custodian to be delayed.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty in
meeting obligations associated with financial liabilities. The
Company is able to reposition its investment portfolio when
required so as to accommodate liquidity needs. However, it
may be difficult to realise its investment portfolio in adverse
market conditions.
Maturity Analysis of Financial Liabilities
The Company’s financial liabilities consist of creditors as
disclosed in note 10. All items are due within one year.
Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure the Company’s ability to continue as a going
concern;
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.
• to provide an adequate return to shareholders;
• to support the Company’s stability and growth;
• to provide capital
for the purpose of
further
investments.
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.
36 | Athelney Trust plc | Annual Report 2021
Notes to the Financial Statements
For the Year Ended 31 December 2021 (continued)
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.
Fair value through profit or loss
investments
2021
£
6,436,820
2020
£
5,310,661
Financial instruments by category
The financial instruments of the Company fall into the following
categories
31 December 2021
At
Amortised
Cost
£
Assets at
fair value
through
profit or
loss
£
Total
£
-
245,163
30,676
6,436,820
-
-
6,436,820
245,163
30,676
Assets as per balance
sheet
Investments
Debtors
Cash at bank
Total
275,839
6,436,820
6,712,659
Liabilities as per the
balance sheet
Creditors
Total
31 December 2020
Assets as per
balance sheet
Investments
Debtors
Cash at bank
17,129
17,129
-
-
At Amortised
Cost
£
Assets at
fair value
through
profit or
loss
£
17,129
17,129
Total
£
-
142,136
72,601
5,310,661
-
-
5,310,661
142,136
72,601
Total
214,737
5,310,661
5,525,398
Liabilities as per
the balance
sheet
Creditors
Total
17,377
17,377
-
-
17,377
17,377
37 | Athelney Trust plc | Annual Report 2021
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair
value hierarchy of financial instruments.
The fair value hierarchy consists of the following three
classifications:
Classification A – Quoted prices in active markets for identical
assets or liabilities.
Quoted in an active market in this context means quoted prices
are readily and regularly available and those prices represent
actual and regularly occurring market transactions on an arm’s
length basis.
Classification B – The price of a recent transaction for an
identical asset, where quoted prices are unavailable.
The price of a recent transaction for an identical asset provides
evidence of fair value as long as there has not been a significant
change in economic circumstances or a significant lapse of time
since the transaction took place. If it can be demonstrated that
the last transaction price is not a good estimate of fair value
(e.g. because it reflects the amount that an entity would receive
or pay in a forced transaction, involuntary liquidation or distress
sale), that price is adjusted.
Classification C – Inputs for the asset or liability that are based
on observable market data and unobservable market data, to
estimate what the transaction price would have been on the
measurement data in an arm’s length exchange motivated by
normal business considerations.
The Company only holds classification A investments (2020:
classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of
£6,695,530 (2020: £5,508,021) divided by 2,157,881 (2020:
2,157,881) ordinary shares in issue at the year end.
Net asset value per
share
2021
£
310.3p
2020
£
255.3p
14. Dividends paid to Directors
During the year the following dividends were paid to the
Directors of the Company as a result of their total
shareholding:
Dr Manny Pohl AM
Simon Moore
Frank Ashton
Notes:
£48,112¹
£ 6,548
£ 217
1. Manny Pohl’s relationship with Global Masters Fund
Limited is described in Note 1 to the table of
Directors’ interests on page 25. During the year
dividends amounting to £48,112 were paid to Global
Masters Fund Limited and EC Pohl & Co Pty Ltd.
Officers and Financial Advisors
Directors:
Secretary:
Mr N F Ashton (Chairman)
Dr E C Pohl
Mr S Moore
Email: frankashton@athelneytrust.co.uk
Email: mannypohl@athelneytrust.co.uk
Email: simonmoore@athelneytrust.co.uk
Mrs D Warburton
Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
Email: secretary@athelneytrust.co.uk
Tel: 01326 378 288
Registered Office: Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
Email: info@athelneytrust.co.uk
Tel: 01326 378 288
Website: http://www.athelneytrust.co.uk
Company Number: 02933559
(Incorporated and registered in England)
Email: d.smith@druces.com
Tel: 020 7638 9271
Email: mail@jamessharp.co.uk
Tel: 0161 764 4043
Email: ryan.hancock@hazlewoods.co.uk
Tel: 01242 680 000
Email: peter@shareregistrars.uk.com
Tel: 01252 821 390
Solicitor:
Druces LLP
Salisbury House
London Wall
London
EC2M 5PS
James Sharp & Co
Stockbroker:
5 Bank Street
Bury
Lancashire, BL9 0DN
Auditors:
Banker:
Registrar:
Hazlewoods LLP
Staverton Court
Staverton
GL51 0UX
HSBC Bank Plc
Market Street
Falmouth
Cornwall, TR11 3AA
Share Registrars Limited
3 Millennium Centre
Crosby Way
Farnham
Surrey, GU9 7XX
38 | Athelney Trust plc | Annual Report 2021
Company number
02933559
Athelney Trust
Waterside Court, Falmouth Road
Penryn, Cornwall TR10 8AW
athelneytrust.co.uk
39 | Athelney Trust plc | Annual Report 2021