Annual Report 2022
DISCOVERING POTENTIAL
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 11
Portfolio Breakdown by Sector and by Index 12
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
13
14
16
20
22
23
26
30
31
32
33
34
39
Contents
Annual Report for the year ended
31 December 2022
Company number
02933559
Athelney Trust
Waterside Court, Falmouth Road
Penryn, Cornwall TR10 8AW
The investment objective of the Trust is to provide long-term growth in dividends and
Investment Objective
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.
The assets of the Trust are allocated predominantly to companies with either a full
Investment Policy
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 2022
Directors of the Company
Frank Ashton
Non-Executive Chairman
Dr Emmanuel Clive Pohl AM
Managing Director
Frank Ashton, aged 61, is a highly experienced senior
manager and independent management consultant. After
leaving Cambridge University with a Natural Sciences degree
(Metallurgy & Materials Science), he spent much of his
career providing
independent management advice to
companies in a wide variety of sectors. With 15 years spent
at PricewaterhouseCoopers and KPMG (Operational Due
Diligence) and 5 years working in Strategy and M&A for
Cummins Inc, he has a proven track record in shareholder
value creation and governance, in providing strategic and
operational advice to both public and private companies in
Europe and USA, as well as working at a policy level for
Government entities.
Manny Pohl, aged 69, is the Chairman and CIO 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 2022
Continued
Directors of the Company
Simon Moore
Non-executive Director
Simon Moore, aged 62, 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 has been 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
Biochemistry BSc from Imperial College, and an MSc in
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 2022
Strategic Report
Dear Shareholder
Chairman’s Statement and Business Review
I am pleased to present the Annual Financial Report for the year to
31 December 2022.
An Independent Board
The Directors in place at the time of signing these accounts are:
• Myself, Frank Ashton – Non-Executive Chairman
•
Simon Moore – Non-Executive Director, Chair of
Audit Committee, Chair of Remuneration Committee
Dr Manny Pohl - Managing Director, Fund Manager
•
We currently have three directors who together make up an
independent Board under the AIC Code of Governance 2021.
Capital Gains
During the year the Company realised capital profits before
expenses arising on the sale of investments in the sum of
£382,704 (2021: £354,843).
Portfolio Review
Additional Holdings Purchased
Additional holdings of AEW UK, Cerillion. Close Brothers,
Fevertree, Gamma, Impax Asset Management, Paypoint,
Target Healthcare, Treatt and Tritax Bigbox were acquired.
Holdings Sold or Trimmed
Abcam, Clinigen, Forterra, Homeserve, Jarvis Securities, JD
Sports, Lok’n Store and LXI Reit.
Dividend
During the year the Company paid an interim dividend of
2.1p on 23 September 2022.
The Board recommends a final dividend of 7.5p per ordinary
share making an increased dividend this year of 9.6p (2021:
9.5p). Subject to shareholder approval at the Annual General
Meeting on 16 March 2023, the dividend will be paid on 6
April 2023 to shareholders on the register on 10 March 2023.
Period Review
The year of 2022 was, for many, including the investment
community, one to forget. Shocks and surprises marked the
year, which ended very poorly with market uncertainty and
loss of confidence created by the short-lived Liz Truss
premiership, made worse by the impact of double-digit UK
inflation.
In an interview with the BBC in 2014, Charlie Munger,
renowned partner in Berkshire Hathaway said:
“Without a system of wise restraints, gross immorality and
extreme craziness will happen in markets. They need to be
dampened.”
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
The key performance points are as follows:
•
•
•
•
•
•
•
•
•
At 31 December 2022, audited Net Asset Value (NAV) was
219.4 p per share (2021: 310.3p), a decrease of 29.3%
over the year as compared to a 19.7% decrease in the
FTSE 250 and a 1% increase in the FTSE 100.
The share price fell to 210.0p from 225.0p at 31
December 2021 a negative return of 6.7%.
The discount to NAV at the end of year had reduced to
4.3% compared to 27.4% at 31 December 2021.
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 minus 26.2% (2021:25.2%).
The Trust’s performance over 12 months as measured by
share price total return, which is the change in share price
plus the dividend paid, was minus 3.3% (2021:8.2%)
The 12-month revenue return per ordinary share was 6.9p
(2021:7.0p), a decrease of 1%.
The interim dividend of 2.1p per share was paid on 23
September 2022.
Your Board recommends a final dividend of 7.5p per share
increasing a total dividend payable for the year to 9.6p
(2021: 9.5p) an increase of 1%. UK inflation for the 12
months to December 2022 slowed for the second month
in a row to 10.5%
This is the 20th 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 promotes us to the “Dividend Heroes” list maintained
by the AIC, a list of investment companies that have
consistently increased their dividends for 20 or more
years in a row.
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.
We note the Financial Conduct Authority’s Policy Statement
PS22/3 of April 2022 to comply or explain in relation to board
inclusion, with changes to the Listing Rules
diversity and
commencing in 2023 for the Trust. As a small, low-cost fund, your
board continues to assess how best to structure and plan for a
board that meets shareholder and regulatory needs, has
continuity, stability and reflects prudent management of costs.
4 | Athelney Trust plc | Annual Report 2022
Strategic Report
Chairman’s Statement and Business Review
Continued
He was talking about some of the causes of the Crash and Global
Financial Crisis in 2007-08, but this is also true elsewhere. For
in a powerful political and
example, a
governmental system with few restraints represents a risk:
Ukraine’s citizens, and to a lesser extent a large proportion of
Europe’s population are paying the price for Putin’s ‘grossly
immoral’ and unfettered ambition to control that country.
leader operating
29.45%) compared to the AIC UK Smaller Companies weighted
average of 9.88%.
This time last year I commented on Apple being the first stock to
reach $1 trillion market cap on 4 January 2022, after tripling the
share price over the prior two years. Well, in 2022 Apple lost a third
of that value, beset with problems on iPhone 14 shipments due to
COVID restrictions at its main Chinese factory, resulting in declining
earnings and disappointing fourth quarter guidance.
I mention such a large US stock in a UK small company fund report
because this poor year, especially for Apple shareholders is a timely
reminder; we should be investing in good stocks and management
teams for the long term and resist perhaps emotionally driven
reactions to news or poor performance over a relatively short
period of time. Wars, times of political incompetence, market
corrections and yes, apparent evidence of fraud at ‘star companies’
(such as Sam Bankman-Fried’s crypto empire FTX) should really not
surprise us much. Human nature and systemic failings are hardly
news. Temperament is much more important than intelligence for
investors (as Messrs Buffett and Munger have told us for a long
time).
While others run for safety, cool-headed investors look widely and
carefully, to find good companies with shares at low price-book
ratios to invest in. In his report below, Manny explains the care he
takes to deliver income for investors, as well as investing for growth
(which may take a little longer to realise at the moment, but it will
come). The coming year will be a time for patience and resisting
temptation to run with the herd.
At the start of the year we had hoped dividend income would return
to pre-pandemic levels, but that evaporated in the second half as
inflation and interest rates rocketed, reducing many UK companies’
margins and cash generated. In the end net income was very similar
to last year at £148,531 (2021: £151,260). I remind you that as a
closed-ended fund we can save up to 15% of our portfolio income
each year, which, unlike open-ended funds, provides a reserve to
use in those leaner income years.
I am very pleased to tell you that the Board recommends a final
dividend payment of 7.5p (total 9.6p) an increase of 0.01p
(2021:9.5p). Subject to shareholder approval at the AGM and based
on our share price at 31 December 2022 of 210p this represents a
dividend yield of 4.6% (2021: 3.1%) and is better than the AIC UK
Smaller Companies’ weighted average yield of 2.80%.
With this further year of progressive dividend payment (if approved
at the AGM), I am delighted to say your company is promoted to the
full list of AIC Dividend Heroes, as this would represent the 20th
consecutive year of dividend growth. In 2022 this list comprised just
seventeen investment companies (out of 324 AIC members), and
therefore would be a marvellous company milestone since its
inception as a founder member of AIM in 1995, especially because
this has been delivered from the UK Smaller Companies segment
only.
A new prime minister, seemingly believing the only opinions on the
September mini-budget that mattered were her own and her
Chancellor’s, was swiftly brought low; however the damage had
been done. The mini-budget resulted in ‘craziness’ for a few weeks
with a dramatic loss of financial market confidence in the UK
resulting in the Bank of England being forced to stabilise the bond
market by temporarily buying long-dated UK gilts. Enter Hunt and
Sunak as new Chancellor and PM to try to return the narrative to
calmer and more acceptable content and tones. Now homeowners
who have to start a new mortgage term face a dramatic rise in cost
and many wish Truss and Kwarteng had used any ‘system of wise
restraints’ before launching that particular mini-budget against the
backdrop of a rising cost of living crisis.
All these events had a heavy impact on the UK Smaller Companies
segment, the focus of this fund; smaller companies can be
perceived to be a riskier investment because they tend to be less
liquid and less resilient stocks in a challenging environment,
compared even to FTSE-250 companies. Market sentiment has
recently been strongly negative to this segment. By comparison the
blue-chip FTSE-100 fared better than most markets because these
large ‘old-fashioned’, liquid, oil/gas- and commodity-based stocks
were buoyed by the run from UK bonds, representing a safer haven
than, for example the NASDAQ where Big Tech companies had a
torrid 2022.
investors
in us by
I am disappointed to report the poor absolute performance of the
Company in the past 12 months and comparatively against FTSE-
250 and especially FTSE-100 indices. We are very aware of the trust
in the company and take our
placed
responsibilities very seriously. However a better comparison is
against UK Smaller Company investment fund peers, and our Share
Price Total Return at minus 2.57% has performed much better over
the past 12 months in comparative terms than the segment
weighted average of minus 23.52%. Our NAV one year Total Return
at minus 23.64% confirms we performed similarly to investment
funds in the same sector, whose weighted average return was
minus 22.32%.
Further information on portfolio activity and the drivers behind the
performance is contained in the Managing Director, Dr Manny
Pohl’s Report below. Manny is highly experienced at managing
funds in challenging market environments, and your board is very
pleased with the comparative outcome for the year, given the
conditions faced. Our invested companies perhaps have a vote of
confidence taken as a portfolio, given that the share price was
trading at year end at a slightly lower discount of 7.85% (2021:
5 | Athelney Trust plc | Annual Report 2022
Continued
• How long will UK inflation remain above that of other countries in
Europe, and what interest rate medicine will be needed to bring it
back in line (after reaching a peak of 11.7% in October, are we over
the worst). This will affect our income
• What costs, including those to settle public sector pay negotiations,
will be incurred by the government, over what period of time, and is
a Labour government now inevitable in 2025; this affects general
sentiment on the economy, tax burden and confidence for investors,
including inward investors
• What global assistance or headwind for UK economic recovery
might be expected? Potential global recession, no sight of an end to
war in Ukraine, the rate and strength of recovery for China’s
economy, and the apparent weakening of America’s economy, all play
into the geo-political environment.
We cannot know the answers to these questions; however, I do know
that Manny Pohl’s meticulous and repeatable investment and
divestment approach, explained in his report, will on average, find
and capture value and that being invested for the long term, in those
shares, is right also.
I would encourage you to actively take interest in your company;
perhaps come to meet the board at the AGM in central London on
Thursday 16 March 2023 at 12 noon.
Frank Ashton
Non-Executive Chairman
13 February 2023
Strategic Report
Chairman’s Statement and Business Review
This is testament and credit to the current MD, Fund Manager and
long-standing major shareholder and board member, Manny Pohl,
and his predecessor, Robin Boyle who managed the fund over
many years, and also to other board members of Athelney Trust,
including Simon Moore, well-known in the industry, supported by
John Girdlestone, the immediate past CoSec, and ably succeeded
by Debbie Warburton. Thank you all.
In terms of controllable costs, I confirm the board has approved a
continued freeze on the non-executive director’s fee (£10,500)
with no premium for Chair positions, which is comparable to NED
fees of other, similarly-sized funds. Our Ongoing Charges Figure
(OCF, calculated using the AIC recommended Ongoing Charges
methodology, April 2022, taking annualised costs that would
reasonably be incurred if there was no trading of the investee
shares, divided by the average of published monthly NAV) is 2.89%
(2021: 2.38%). The increase is due to the decrease in NAV through
2022, and also £1,000 net increase in Ongoing Charges in 2022
compared to 2021. While we remain a small fund, reducing the
OCF will continue to be a challenge, however every effort is made
to do this, while applying appropriate time and resource to growth
and good governance.
Outlook
Perhaps the main questions that will affect our performance for
2023 include:
6 | Athelney Trust plc | Annual Report 2022
Strategic Report
Fund Manager’s Review
Reflecting on 2022
By any measure, the past twelve months have delivered a very
poor result, especially when compared to the remarkable return
achieved in 2021 when the FTSE 100 was up by 14.6% and our
portfolio up by 29.1%. Over the past twelve months we have
under-performed the various benchmarks as shown in Table 1
Table 1: Performance Metrics
and as one would expect, while our long-term results are still in
line with the FTSE 250, this recent underperformance has
prompted us to consider
in our
deliberations or if there was anything we should have done
differently in our analysis?
if we missed anything
Compound Growth Rate
1 Year
2 Years
3 Years
5 Years
10 Years
ATY PORTFOLIO
ATY NAV
FTSE 250
FTSE 100
FTSE Small Cap
-24.7%
-29.3%
-19.7%
0.9%
-16.3%
-1.5%
-7.3%
-4.1%
7.4%
0.2%
0.3%
-6.3%
-4.8%
-0.4%
1.6%
n.a.
-5.1%
-1.9%
-0.6%
1.1%
n.a.
4.3%
4.3%
2.4%
6.2%
Our Investment Philosophy is based on the belief the economics
of a business drives long-term investment returns and evidenced
through our investment process which delivers a portfolio of
high-quality businesses in the growth stage of their life cycle.
However, investment returns over any period comprise two
components, namely the dividends received and the movement
in the value of the investment portfolio. While the dividends we
are likely to receive from the companies in our portfolio are fairly
easy to predict and, for the most part increase over time, the
same cannot be said for the market price for the shares. These
are affected by investors responding to daily news feeds and
commentary on local and global economic data as well as macro
events.
Chart 1, showing the FTSE 250 Index in 2022 provides some idea
of events that have impacted the market over the past twelve
months.
Chart 1: FTSE 250 Index
7 | Athelney Trust plc | Annual Report 2022
Strategic Report
Fund Manager’s Review
In the first quarter of the financial year, Russia invaded the
Continued
issue sanctions and
Ukraine. The West was quick to
multinationals started closing down any operations linked to
Russia. However, the war amplified energy and food price issues
straining an already COVID constrained supply-side environment
and pushing inflation higher. Central banks began raising rates
and forecasting future increases which drove down equity-based
valuations across the board.
By the second quarter the high inflation readings were a major
detractor for all sectors of the financial markets other than
mining and energy stocks. The fiscal stimulus plan and series of
tax cuts and regulatory reforms announced in the mini-budget in
September sent financial markets into a tailspin with the pound
reaching a record low and short-term interest rates and bond
yields moving sharply up. The yields on five-year government
bonds reached levels similar to those of more heavily-indebted
European economies such as Italy and Greece. Commensurate
with this rise in short and medium-term interest rates, the
quoted prices for income generating assets and REITs in
particular, declined materially. The net effect of this and the
tightening in monetary policy has been to put pressure on the
high PE valuations of the market and growth stocks in particular,
as future earnings are discounted at a higher rate.
Chart 2: Contributions to NAV in the period 1 January 2022 to 31 December 2022 (pence per share)
In spite of this, recent operating results from companies in our
portfolio indicate that they have been able to partially withstand
these inflationary pressures by implementing appropriate short-
term strategies and adapting their business models accordingly.
While the majority of the stocks in the portfolio have declined in
value over the past year, dividends for the most part were
maintained, with a handful of names producing positive returns
for the year. These were Begbies Traynor (LSE: BEG), 4Imprint
(LSE: FOUR) and NWF (LSE: NWF).
8 | Athelney Trust plc | Annual Report 2022
Strategic Report
Fund Manager’s Review
Continued
While we do sell some of our investments from time to time, our
process aims to find high-quality businesses that we own for the
very long-term and as a result our portfolio turnover remains
low. During the past year, while we did reduce our overall
exposure to the Property Trusts, we still maintained a material
exposure in recognition of the need to maintain the dividend
paid to shareholders within a growth style portfolio. However,
we are always looking for new investments and when we do find
them, we ensure that they have sustainable and resilient
characteristics. In the past twelve months we added two new
names to the portfolio:
Cerillion: (LSE: CER)
Cerillion joined AIM in 2016 and has since established a very
strong record of revenue and profit growth principally from
software licences and related support and maintenance sales. It
operates
forty-five countries globally,
providing customers with mission-critical software for billing,
charging and customer relationship management mainly for
telecommunications providers, but also for other sectors,
including energy and utilities.
in approximately
Whilst the coronavirus pandemic is no longer directly affecting
business operations, the global experience of remote-working –
still in place in many economies – has continued to emphasise
the dependence of the world economy on state-of-the-art
telecoms infrastructure. Over the year, we continued to see high
levels of investment in the sector, and an acceleration of
investment in 5G and fibre rollouts, with spending trickling down
from core network improvements to ancillary system upgrades
and replacements, particularly due to national security
concerns. We expect to see these trends continue with
increasing pressure on telcos to find efficiencies in their digital
real-estate. This is likely to encourage further market take-up of
product-based SaaS solutions, which Cerillion offers, rather than
the more bespoke solutions available from more traditional
vendors which require highly complex implementations over
several years and have a higher total cost of ownership.
Impax Asset Management (LSE: IPX)
Impax Asset Management is a fund manager who invests
globally in companies focused on the transition to a more
sustainable global economy and is well placed to benefit from
the profound changes to the economic landscape particularly in
the areas of climate change, pollution and essential investments
in human capital, infrastructure and resource efficiency. Impax
has proven expertise in finding and investing in companies and
assets that are well positioned in this space and should benefit
from these mega-trends which will drive growth for them and
create risks for those unable or unwilling to adapt to the
changes. They offer a well-rounded suite of investment solutions
spanning multiple asset classes and should be able to deliver
superior shareholder returns over the medium to long-term.
9 | Athelney Trust plc | Annual Report 2022
Looking ahead
While I was preparing to write this year’s commentary, the
following quote came to my attention:
“Time is the friend of the wonderful business, the enemy of the
mediocre.” Warren Buffett - Letter to Shareholders 1989
While supply chains are stretched and input products in short
supply, it can be challenging to recognise the potential in
companies, particularly those that are in the growth stage of
their life cycle. It can also be difficult to evaluate the ‘narratives’
that some companies are telling about themselves. To invest in
a company in the growth stage of their life cycle it is important
to balance the company’s narrative alongside its numbers and it
is vital not to get caught up in the hype and noise of the internet
and daily market movements.
A sound investment philosophy sets out a number of ‘rules’ or
‘procedures’ to fall back on when the market noise gets too loud.
Companies that have a sustainable competitive advantage will
always be well-placed to withstand short-term headwinds,
regardless of market conditions, maintain market share and
ultimately find new ways to grow. Their ability to be flexible, to
move quickly, to take advantage of opportunities as they arise,
and to capitalise on market trends and demand, will continue to
support the ongoing success of such businesses, and provide
significant long-term opportunities for their investors. The
pandemic, devastating weather events, and the invasion of
Ukraine are examples of macro-environmental shocks impacting
companies worldwide and it is also of paramount importance to
take a holistic approach when analysing the companies and their
sustainability by considering the business competitiveness and
ability to dynamically adapt and react to black swan events - to
be resilient.
Over the past few years our industry, and society more broadly,
has continued to evolve with higher expectations being made of
businesses and their social licence to operate. Being a good
corporate citizen is only part of it. Being a good corporate citizen
that is compassionate, committed to its people, planet, and the
community is mandatory. 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.
Strategic Report
Fund Manager’s Review
Continued
A genuine long-term approach
Investment management is more than merely generating alpha in
excess of a benchmark. While that is a core part of our mandate,
other very important qualitative issues are central to what we do.
For example, we recognise that capital allocation is a vehicle
through which to drive change. We have the opportunity to demand
specific standards of corporate governance, decide whether specific
social and ethical issues are acceptable and, if they are not, we vote
with our feet.
For us, the integrity and credibility of any management team is a
founding principle to our investment process. We need to trust that
management has the best interests for all stakeholders at heart, and
we have faith that they will make sound strategic decisions and have
substantial experience and capabilities in their chosen field. As
custodians of our capital, we must ensure that we are doing
whatever we can to preserve capital and grow it over time. We
allocate capital to investments which we believe are sustainable in
the long-term, and finding trustworthy, values-based management
that aligns with our core values and beliefs will ensure above-
average economic portfolio returns. Sustainability of investment
performance or the improvement of the wellbeing of broader
society hinges upon ethical, transparent, and honest leadership and
in cases where we feel we can add something to the conversation,
we engage with the company.
While current macro events have put pressure on our portfolio in the
short-term, our investment philosophy is based on the belief the
long-term economics of a business drives long-term investment
returns. Our companies have strong business models with capable
and experienced management teams and 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 in the good times 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 and
over time we expect that dividends from the high growth
quality companies in the portfolio will increase sufficiently so
that the property trusts can be replaced by other high growth
quality companies without jeopardising our AIC dividend
hero status.
Update
The unaudited NAV on 31 January 2023 was 229.4p per share
– up by 4.6% from 31 December 2022. The share price on the
same day was 205p (trading at a discount of 10.7%). Further
updates can be found at www.athelneytrust.co.uk
Dr Manny Pohl AM
Fund Manager
13 February 2023
10 | Athelney Trust plc | Annual Report 2022
SECTOR
£
186,600
174,000
80,400
155,700
%
4.5%
4.2%
1.9%
3.7%
922,780
300,125
22.1%
7.2%
470,640
161,700
140,140
11.3%
3.9%
3.4%
1,124,330
26.7%
345,570
119,000
8.3%
2.8%
Strategic Report
Investment and Portfolio Analysis at 31 December 2022
Holding
Value (£)
Stock
Chemicals
Construction & materials
Electronic & electrical equipment
Food & beverages
General financial
Leisure goods
Media
Mobile communications
Multiutilities
Property, commercial &
residential
Support services
Technology
Treatt
Clarke T
XP Power
Fevertree
Close Brothers
Impax Asset Management
Liontrust Asset Management
S & U
Games Workshop
4Imprint
Rightmove
Yougov
Gamma Communications
National Grid
AEW UK REIT
Londonmetric REIT
Target Healthcare REIT
Tritax BigBox REIT
Begbies Traynor
NWF Group
Paypoint
Smart Metering Systems
Cerillion
Portfolio Value
Net Current Assets
TOTAL VALUE
Shares in issue
Audited NAV
219.4p
186,000
174,000
80,400
155,700
209,600
287,600
300,780
124,800
300,125
214,250
154,380
102,010
161,700
140,140
475,950
172,600
196,980
278,800
135,090
86,800
60,960
62,720
119,000
30,000
145,000
4,000
15,000
20,000
40,000
27,000
6,000
3,500
5,000
30,000
10,100
15,000
14,000
475,000
100,000
245,000
200,000
95,000
35,000
12,000
8,000
10,000
4,180,985
553,577
4,734,562
2,157,881
11 | Athelney Trust plc | Annual Report 2022
Strategic Report
Investment and Portfolio Analysis at 31 December 2022
Portfolio by Sectors
Continued
2.8% Technology
software services
8.3% Support services
26.7% Property
commercial &
residential
4.5 % Chemicals 4.2% Construction &
materials
1.9% Electronic &
electrical equipment
3.7% Food &
beverages
22.1% General
financial
3.4% Multiutilities
7.2% Leisure goods
11.3% Media
3.9% Mobile
communications
Portfolio by Listing
11.5% Cash
6.2% FTSE 100
19.7% Small Caps
3.7% Fledgling
35.4% FTSE 250
23.5% AIM
12 | Athelney Trust plc | Annual Report 2022
Strategic Report
Section 172(1) Statement
The Directors of the Company are required to promote the success of
the Company for the benefit of the Members and Shareholders as a
whole. Section 172(1) of the Companies Act (2006) expands this duty
and requires the Directors to consider a broader range of interested
parties when considering the promotion of the Company. This wider
group of stakeholders will include employees, if any, suppliers,
customers and others, and the Board will look to understand and take
into account the needs of each stakeholder, although recognising that
different stakeholders may have conflicting priorities and not all
decisions made will be to the benefit of all stakeholder groups.
When making decisions the Board should consider the following:
•
•
•
•
•
•
the likely consequences of any decisions in the long-term;
the interests of the Company’s employees (if applicable);
the impact of the Company’s operations on the environment
and the community;
the need to foster the Company’s business relationships with
suppliers, customers and others;
the need to act fairly for all members of the Company, and
the desirability of the Company maintaining a reputation for
high standards of business conduct.
In line with similar small Investment Trusts and Investment Companies,
Athelney Trust plc does not have any customers and relies on a number
of third-party providers of services such as Company Administrator,
the Custodian and the Registrar to maintain its operations. The
Company takes into account the regulations of the market in which it
operates and has regard to the environment and the wider community
in which it operates.
At every Board meeting the Directors review the performance of the
Company towards meeting the Company’s Investment Objective
through its strategy. Manny Pohl is the fund manager, reports to other
Board members and answers any questions raised. Compliance with
existing regulatory and legal requirements is reviewed, together with
any new regulations that are due to be introduced or are being
proposed that may affect the Company.
The Board recognises the importance of, and is committed to,
understanding
the views of Shareholders and maintaining
communication with its Shareholders in the most appropriate manner.
This is undertaken through:
Annual General Meeting
The Company, in normal circumstances encourages all Shareholders to
attend and participate at its Annual General Meeting (“AGM”). Whilst the
formal business of the meeting is the primary purpose of the meeting,
members of the Board are available to answer questions directly from
Shareholders, to provide an update to the meeting and to offer
Shareholders an insight into the business.
13 | Athelney Trust plc | Annual Report 2022
The Board plan to hold the 2023 AGM on 16 March 2023 at 12.00
noon. Further details regarding the 2023 AGM are contained in the
Notice of the Annual General Meeting published in a separate
notification.
Published Reports
The Company produces Annual and Half Yearly Reports and
monthly fact sheets are all available from the Company’s website
and paper copies are available on request from the registered
office. The publication of these reports is considered to be the
primary method of communication to Shareholders and other
readers of the reports and provides detailed information on the
portfolio, performance over the period and an assessment of the
outlook for the Company.
The Annual Report also contains details regarding the Company’s
corporate governance and the Board seek to ensure that the
Report is readable and is mindful that it should be fair, balanced
and understandable.
Shareholder enquiries
Shareholders can contact the Company or any of its Directors
through the Company Secretary or through their company email
address. Alternatively, letters can be sent to the registered office
address. Although the Directors are not available full time, with
the assistance of the Company Secretary they seek to maintain
open communication to all Shareholders.
Suppliers
The Company Secretary Deborah Warburton and Administrator
GW & Co. Limited are often the main contact point for advisors
and stakeholders in the Company. Regular communication is
maintained between the Company Secretary and the Directors
advising them of all matters concerning the Company. The
Company also relies on the provision of services from outside
parties to operate and gives consideration to the needs and
objectives of those providers and recognises that their success
will often assist the Company in achieving its objectives.
Regulators
The Company operates in an environment that is governed by
legal and regulatory requirements. The Board recognises that
these requirements are there to protect stakeholders, including
the government.
Environment and Community
As the Company does not have any direct employees nor any
physical office environment of its own it has little direct impact
on the community or the environment. The Company seeks to
reduce
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.
impact on the environment
its
Strategic Report
Other Statutory Information
As explained within the Report of the Directors on pages 20 to 21, the
Company carries on business as an investment trust. Investment trusts
are collective closed-ended public limited companies.
Board
The Board of Directors is responsible for the overall stewardship of the
Company, including investment and dividend policies, corporate and
gearing strategy, corporate governance procedures and
risk
management. Biographical details of the three male Directors, can be
found on pages 2 and 3.
One of the Directors is the Company's only employee (2021: 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,
individual
financial strength and cash flows. The weighting of
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 2022
can be found on pages 11 and 12 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 16 to 19, 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.
14 | Athelney Trust plc | Annual Report 2022
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 10 which
form part of the Strategic Report.
Principal Risks and Uncertainties and Risk
Management
As stated within the Corporate Governance Statement on pages
16 to 19, the Board applies the principles detailed in the internal
control guidance issued by the Financial Reporting Council, and
has established a continuing process designed to meet the
particular needs of the Company in managing the risks and
uncertainties to which it is exposed.
The principal risks and uncertainties faced by the Company are
described below and in note 12 which provides detailed
explanations of the risks associated with the Company’s financial
instruments.
•
Market – the Company’s fixed assets consist almost
entirely of listed securities and it is therefore exposed to
movements in the prices of individual securities and the market
generally.
Investment and strategic –
•
investment
strategy, asset allocation, stock selection and the use of gearing
could all lead to poor returns for shareholders.
incorrect
•
Regulatory – Relevant legislation and regulations which
apply to the Company include the Companies Act 2006, the
Corporation Tax Act 2010 (“CTA”) and the Listing Rules of the
Financial Conduct Authority (“FCA”). The Company has noted the
recommendations of the UK Corporate Governance Code and its
statement of compliance appears on pages 16 to 19. 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
Strategic Report
Other Statutory Information
Continued
•
Liquidity – the Company may have difficulty in meeting
obligations associated with financial liabilities.
•
Trading – ATY is a small trust and its shares can be illiquid,
which means that investors may have difficulty in dealing
in larger amounts of shares.
The Company has complied with the MiFID ll and KID legislation and
the deadlines to ensure that shares in the Company were still able to
be traded. A copy of the Company’s KID can be found on the website
http://www.athelneytrust.co.uk
The Board is not aware of any breaches of laws or regulations during
the period under review and up to the date of this report.
The Board seeks to mitigate and manage these risks through
continual review, policy setting and enforcement of contractual
obligations. It also regularly monitors the investment environment
and the management of the Company’s investment portfolio.
Investment risk is spread through holding a wide range of securities
in different industrial sectors.
Statement Regarding Annual Report and
Financial Statements
Following a detailed review of the Annual Report and Financial
Statements by the Audit Committee, the Directors consider that
taken as a whole it is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company’s
performance, business model and strategy.
Environment Emissions
The Company does not have any physical assets, property, or
operations of its own and as such does not generate any greenhouse
gas or other emissions.
Social, Community and Human Rights issues
The Company has one employee and, as far as the Board is aware,
no issues exist in respect of social, community or human rights
issues.
Alternative Investment Fund Manager’s Directive
(“AIFMD”)
The Company is registered as its own AIFM with the FCA under the
AIFMD and confirms that all required returns have been completed
and filed.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
13 February 2023
15 | Athelney Trust plc | Annual Report 2022
Manny Pohl and Simon Moore retired by rotation and were re-elected
at the AGM on 5 April 2022. The Directors believe that the Board has
the balance of skills, experience 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 2022, the Board met a total of 7 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
5
5
5
Audit
Committee
-
1
1
Remuneration
Committee
1
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 15. 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.
Corporate Governance Statement
Shareholders hold the Directors of a company responsible for the
stewardship of that company’s affairs. Corporate governance is
the process by which a Board of Directors discharges this
responsibility. The Company’s arrangements
in respect of
corporate governance are explained in this report.
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:
•
•
•
•
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 2022 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.
16 | Athelney Trust plc | Annual Report 2022
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:
• 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
comparisons with previous years, cash availability and requirements
and a breakdown of shareholdings by listing and sector. The Board
takes account of Corporate Governance best practice.
considers
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
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.
17 | Athelney Trust plc | Annual Report 2022
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 23 to 25 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
Much of the Board’s corporate governance responsibility is
Continued
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 is still adversely affecting the global
economy and this, in turn may, still 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.
Ukraine War
The war in the Ukraine has adversely affected the global
economy and this, may impact on the valuation of investee
companies and their ability to pay dividends.
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 2022. At the conclusion of the audit Hazlewoods LLP did
not highlight any issues to the Audit Committee which would cause
it to qualify its audit report nor did it highlight any fundamental
internal control weaknesses. Hazlewoods LLP
issued an
unqualified audit report which is included on pages 26 to 29.
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.
18 | Athelney Trust plc | Annual Report 2022
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 Company’s capital structure and voting rights are
•
summarised on pages 20 and 21.
•
•
Details of the substantial shareholders in the Company are
listed on page 20.
The rules concerning the appointment and replacement of
Directors are contained
in the Company’s Articles of
Association and are discussed on page 20.
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.
Corporate Governance Statement
Relations with Shareholders
Continued
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.
• 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:
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. All
resolutions proposed at the AGM were unanimously passed.
The notice and further details of the Annual General Meeting, to be
held on 16 March 2023 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
internal controls are
Risk assessment and the review of
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:
• Corporate strategy;
• Published
information, compliance with
laws and
regulations;
• Relationship with service providers; and
•
Investment and business activities.
The key procedures which have been established to provide
internal controls are as follows:
• Custody and valuation of assets is undertaken by James
Sharp & Co;
• The duties of investment management, accounting and
the custody of assets are segregated. The procedures of
the individual parties are designed to complement one
another;
• The Directors of the Company clearly define the duties and
responsibilities of
their agents and advisers. The
appointment of agents and advisers is conducted by the
Board after consideration of the quality of the parties
involved; the Board monitors their ongoing performance
and contractual arrangements;
• Mandates for authorisation of investment transactions
and expense payments are set by the Board; and
• The Board reviews financial information produced by the
Fund Manager and the Company 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
13 February 2023
19 | Athelney Trust plc | Annual Report 2022
Capital Structure
At 31 December 2022 the Company’s capital structure consisted of
2,157,881 Ordinary Shares of 25p each (2021: 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 25 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
Astuce Group
IP Worldwide Flexible Fund
Mehr Mutual
E C Pohl & Co Pty Ltd
Mr GW & Mrs DJ Whicheloe
Mrs E Davison
Mr C Frostick
Mr S Moore
P Grodzinski
550,000
339,054
121,479
86,000
81,500
75,000
70,500
67,500
65,000
% of
Issue
25.5
15.7
5.6
4.0
3.8
3.5
3.3
3.1
3.0
Out of the nine major shareholders listed above Dr. Manny Pohl has
control over two substantial shareholdings amounting to 29.5% of
the total shareholding, he is also in contact with IP Worldwide
Flexible Fund and Mr C Frostick on a regular basis. Simon Moore has
control of 3.1% of the total shareholdings and is in regular contact
with two of the remaining four substantial shareholders. The
remaining two 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.
There have been no changes to the substantial shareholders up until
6 February 2023.
Report of the Directors
The Directors present their report and audited
financial
statements of the Company for the year ended 31 December 2022.
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 £148,531 (2021: £151,260) as detailed on page 30.
The company paid an interim dividend of 2.1p per ordinary share
on the 23 September 2022.
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 9.6p
(2021: 9.5p) 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
2021. The Directors are of the opinion that the Company has
conducted its affairs for the year ended 31 December 2022 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. Frank Ashton will retire at the
2023 AGM and will offer himself 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.
20 | Athelney Trust plc | Annual Report 2022
Report of the Directors
Dividends
Continued
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 14 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.
21 | Athelney Trust plc | Annual Report 2022
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 14 and 15), 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
investment
The Company’s financial
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
13 February 2023
Statement of Directors’ responsibilities in respect of the
financial statements
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 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.
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
13 February 2023
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.
22 | Athelney Trust plc | Annual Report 2022
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.
These were renewed for a further three years before the 2022 AGM.
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 2022, 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.
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 26 to 29.
Remuneration Committee
The Company had a Remuneration Committee during the year
comprising Simon Moore and Frank Ashton, Manny Pohl was
invited to attend the meeting by the other Board members.
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 2022.
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 2023 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.
23 | Athelney Trust plc | Annual Report 2022
Directors’ Remuneration Report
Continued
Capital Growth
(re-based to 100 at 31/12/2012)
250
200
150
100
50
0
2012
2013
2014
ATY NAV
2015
FTSE100
2016
2017
FTSE 250
2018
2019
FTSE Small Cap
2020
2021
2022
AIM All Share
ATY NAV
FTSE 100
FTSE 250
FTSE Small Cap
AIM All Share
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
2022
21.5% -29.3%
14.6%
1.0%
14.3% -19.7%
20.0% -16.3%
5.2% -31.7%
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 - Fund Manager
S Moore (Non-executive)
F Ashton (Chairman)
Director’s expenses
2022
£
40,077
10,500
10,500
-
2021
£
44,877
10,500
10,500
-
61,077
65,877
The Directors’ remuneration for the year of £61,077 which is down
by 7.3% on 2021 and is before the proposed final dividend of 7.5p
increasing the total dividend for the year to 9.6p (2021: 9.5p) per
ordinary share, and as compared to total dividends paid in the year
at 9.7p per share amounting to £207,156 (2021: £202,840). The
remuneration decrease is due to the decrease in the portfolio value
during the year on which the Fund Manager’s fee is based.
24 | Athelney Trust plc | Annual Report 2022
Expected Fees
for the Year to
31 December
2023
10,500
42,000
10,500
Fees for Year
to 31
December
2022
10,500
40,077
10,500
Chairman basic
Fund Manager
Non-Executive
No expenses were claimed by any Directors during this year.
Performance, Service Contracts, Compensation
and Loss of Office
•
The Directors’ remuneration is not subject to any
performance related fee.
• No Director was interested in contracts with the
Company during the period or subsequently
•
•
The terms of appointment provide that a Director may
be removed without notice.
Compensation will not be due upon leaving office.
Directors’ Remuneration Report
Continued
•
No Director is entitled to any other monetary payment or any
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.
The Directors’ Remuneration Report for the year ended 31 December
2021 was approved by shareholders at the Annual General Meeting
held on 5 April 2022. The votes cast by proxy were as follows:
For
Against
Total votes cast
Number of votes withheld
Number of
Votes
% of
votes
814,560
Nil
814,560
Nil
38
-
38
-
Approval
The Directors’ Remuneration Report was approved by the Board
on 13 February 2023.
Dr Manny Pohl AM
Managing Director
assets of the Company.
• No incentive or introductory fees will be paid to encourage
a directorship.
•
The Directors are not eligible for bonuses, pension
benefits, share options, long term incentive schemes or
other benefits.
Directors’ & Officers’ liability insurance cover is maintained by the
Company on behalf of the Directors.
Relative importance of spend on pay
Total remuneration
paid to the Fund
Manager
Total remuneration
paid to non-
executive Directors
Total remuneration
paid
2022
40,077
2021
44,877
% Change
-10.7%
21,000
21,000
0%
61,077
65,877
-7.3%
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:
31
December
2022
(or date of
Resignation
If earlier)
31
December
2021
(or date of
appointment
if later)
-¹
67,500
2,234
-¹
67,500
2,234
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. E C Pohl & Co Pty Limited holds 86,000 shares
(2021: 496,000).
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 the following three years due to the top 5
shareholders owning more than 50% of the total shares in the
company. The Company holds its Investment Trust status under the
25 | Athelney Trust plc | Annual Report 2022
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Conclusions relating to going concern
Opinion
In auditing the financial statements, we have concluded that the
We have audited the financial statements of Athelney Trust plc (the
director's use of the going concern basis of accounting in the
‘Company’) for the year ended 31 December 2022, which comprise the
preparation of the financial statements is appropriate.
Income Statement, Statement of Changes in Equity, Statement of the
Financial Position, Statement of Cash Flows and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation
law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In 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.
is applicable
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as at
31 December 2022 and of its net return for the year then ended;
• have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice;
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with international Standards
on Auditing (UK) ((ISAs UK)) and applicable law. Our responsibilities
in the Auditor’s
under those standards are further described
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 and the maintenance of the
Company’s accounting records are managed internally, with the
custody of its investments outsourced to third-party service providers.
Accordingly, our audit work is focused on obtaining an understanding
of, and evaluating, internal controls of the Company 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.
The audit team communicated throughout the audit with the directors
and investment managers in order to ensure we had good knowledge
of the business of the Company. During the audit, we reassessed and
re-evaluated audit risks and tailored our approach accordingly.
We communicated with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant findings, including significant deficiencies in internal control
that we identified during the audit, if any.
26 | Athelney Trust plc | Annual Report 2022
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 entities reporting on how they have 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 directors 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 management override of controls
are always deemed risks in any audit. This is not a complete list of
all risks identified by our audit.
Valuation, ownership and existence of investments
The Company’s investment portfolio is one of the key drivers of its
results, of which 100% is represented by quoted investments. The
investments are not considered to be at a high risk of material
misstatement, or to be subject to a significant level of judgement,
because they comprise liquid, quoted investments for which
evidence of the market price is readily available.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
However, due to their materiality in the context of the financial
Continued
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 third
party custodian confirmations.
Key observations
Our testing did not identify any material misstatements in revenue
recognition.
Investment trust status
In order to remain tax exempt the criteria of an investment trust
must be met. This includes a 15% limit on retention of income after
dividends and revenue expenses and a minimum of 35% of its
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 share were not held by a related party; and
obtaining an Audit Representation Letter from the Company's
directors confirming that they complied with the applicable rules.
Key observations
Our testing did not identify any breaches in the criteria stated
above.
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 £95,000, 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 £37,000, 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.
Key observations
Our testing did not identify any material misstatements in the
valuation of the Company’s investment portfolio as at the year end.
Allocation of costs between capital and revenue
The Company allocates expenditure between revenue and capital on
the basis of the Board’s expected long-term capital and revenue
returns. The allocation is important as it affects distributable reserves.
Our audit work included, but was not restricted to, a detailed review of
the actual dividend and capital income received in the past 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.
Key observations
Our testing did not identify any material misstatements in the
allocation of costs between capital and revenue as at the year end.
Management override of financial controls
The risk of management override is always considered a significant
audit risk but is particularly relevant for the Company due to the size
of the organisation structure. Our audit work included, but was not
restricted to: a review of all significant management estimates and
judgements applied during the completion of the financial statements.
We also reviewed material journal entries processed by management
during the period. The Company’s principal accounting policies are
described note 1 to the financial statements.
Key observations
Our testing did not identify any management override of financial
controls that will materially misstate 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.
27 | Athelney Trust plc | Annual Report 2022
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
Continued
ATHELNEY TRUST PLC
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in
the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of
the other information where we conclude that those items meet the
following conditions:
• Fair, balanced and understandable, set out on page 15 – the
statement given by the Directors that they consider the annual
report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the Company’s performance, business
model and strategy, is materially inconsistent with our knowledge
obtained in the audit; or
• Audit committee reporting, set out on pages 17 to 18 – the
section describing the work of the audit committee does not
appropriately address matters communicated by us to the audit
committee; or
• Directors’ statement of compliance with the UK Corporate
Governance Code, set out on page 16 - 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:
•
•
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
28 | Athelney Trust plc | Annual Report 2022
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:
•
•
the Strategic Report or the Directors’ Report; or
the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5
and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches
not visited by us; or
the financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
•
• certain disclosures of Directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit; or
• a corporate governance statement has not been prepared by
the Company.
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 Company'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:
•
the disclosures in the annual report set out on pages 14 to 15
that describe the principal risks and explain how they are being
managed or mitigated;
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
Continued
ATHELNEY TRUST PLC
•
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 of investments has
been verified by reference to this information.
the Directors’ confirmation set out on page 14 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 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
This
description forms part of our auditor’s report.
at www.frc.org.uk/auditorsresponsibilities.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with chapter 3 of part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to
them in an auditors’ report and for no other purpose. To the fullest
extent permitted by
law. We do not accept or assume
responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Ryan Hancock FCCA (Senior Statutory Auditor)
for and on behalf of Hazlewoods LLP
Statutory Auditor, Cheltenham.
13 February 2023
•
the Directors’ statement set out on page 21 in the financial
statements about whether the Directors considered it appropriate
to adopt the going concern basis of accounting in preparing the
financial statements and the Directors’ identification of any
material uncertainties to the Company’s ability to continue to do
so over a period of at least twelve months from the date of
approval of the financial statements;
• whether the Directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in
the audit; or
•
the Directors’ explanation set out on page 21 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 pages 22), 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.
29 | Athelney Trust plc | Annual Report 2022
Income Statement
For the Year Ended 31 December 2022
Note
Revenue
2022
Total
Capital
Revenue
Capital
2021
Total
(Losses)/gains on
investments held at
fair value
Income from
investments
Investment
management
expenses
Other expenses
Net return on
ordinary activities
before taxation
Taxation
Net return (negative
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
£
£
£
-
(1,787,296)
(1,787,296)
£
-
£
£
1,359,219
1,359,219
183,273
-
183,273
186,393
-
186,393
(4,008)
(36,327)
(40,335)
(4,488)
(40,692)
(45,180)
(30,734)
(78,720)
(109,454)
(30,645)
(72,964)
(103,609)
148,531
(1,902,343)
(1,753,812)
151,260
1,245,563
1,396,823
-
-
-
-
-
-
148,531
(1,902,343)
(1,753,812)
151,260
1,245,563
1,396,823
6.9p
(88.2p)
(81.3p)
7.0p
57.7p
64.7p
9.6p
9.7p
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 34 to 38 form part of these financial statements.
30 | Athelney Trust plc | Annual Report 2022
Statement of Changes in Equity
For the Year Ended 31 December 2022
Called-up
Share
Capital
£
Share
Premium
£
Capital
reserve
realised
£
Capital
reserve
unrealised
£
Revenue
reserve
£
Total
Shareholders’
Funds
£
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
539,470
881,087
2,271,737
2,731,784
271,452
6,695,530
-
-
-
-
-
-
-
-
-
-
382,704
-
-
(2,170,000)
-
-
382,704
(2,170,000)
(115,047)
-
-
-
-
-
-
148,531
(207,156)
(115,047)
148,531
(207,156)
539,470
881,087
2,539,394
561,784
212,827
4,734,562
Balance brought forward at
1 January 2021
Net profits on realisation
of investments
Increase in unrealised
Appreciation
Expenses allocated to
Capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at 31
December 2021
Balance brought forward at
1 January 2022
Net profits on realisation
of investments
Decrease in unrealised
Appreciation
Expenses allocated to
Capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at 31
December 2022
The notes on pages 34 to 38 form part of these financial statements.
31 | Athelney Trust plc | Annual Report 2022
2022
£
2021
£
4,180,985
6,436,820
Statement of Financial Position
As at 31 December 2022
Company Number: 02933559
Note
Fixed assets
Investments held at fair value through profit and
loss
Current assets
Debtors
Cash at bank and in hand
8
9
Creditors: amounts falling due within one year
10
Net current assets
Total assets less current liabilities
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
543,301
27,361
570,662
(17,085)
553,577
4,734,562
4,734,562
539,470
881,087
2,539,394
561,784
212,827
4,734,562
245,163
30,676
275,839
(17,129)
258,710
6,695,530
6,695,530
539,470
881,087
2,271,737
2,731,784
271,452
6,695,530
310.3p
Net Asset Value per share
13
219.4p
These financial statements were approved and authorised for issue by the Board of Directors on 13 February 2023 and signed on their
behalf by
Dr Manny Pohl AM
Managing Director
The notes on pages 34 to 38 form part of these financial statements.
32 | Athelney Trust plc | Annual Report 2022
Statement of Cash Flows
For the Year Ended 31 December 2022
Cash flows used in operating activities
Net revenue return
Adjustment for:
Expenses charged to capital
(Decrease) in creditors
(Increase)/decrease in debtors
Cash used in operations
Cash flows from investing activities
Purchase of investments
Proceeds from sales of investments
Net cash received from investing activities
Equity dividends paid
Net decrease in cash
Cash at the beginning of the year
Cash at the end of the year
2022
£
148,531
(115,047)
(44)
(298,138)
(264,698)
(1,003,583)
1,472,122
468,539
(207,156)
(3,315)
30,676
27,361
2021
£
151,260
(113,656)
(248)
(103,027)
(65,671)
(545,379)
778,439
233,060
(209,314)
(41,925)
72,601
30,676
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 34 to 38 form part of these financial statements.
33 | Athelney Trust plc | Annual Report 2022
Notes to the Financial Statements
1. Accounting Policies
For the Year Ended 31 December 2022
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 and
Fledgling. 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.
34 | Athelney Trust plc | Annual Report 2022
Notes to the Financial Statements
For the Year Ended 31 December 2022 (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
2022
£
108,179
3,760
71,308
26
183,273
2022
£
79,926
28,253
108,179
2021
£
117,516
11,752
57,078
47
186,393
2021
£
74,775
42,741
117,516
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
2022
£
2021
£
21,000
40,077
21,000
44,877
11,984
11,964
-
32,472
6,687
10,500
23,276
-
32,472
4,101
10,020
23.215
3,793
1,140
149,789
148,789
4. Employees and Directors’ Remuneration
Costs in respect of Directors:
Non-executive Directors’ fees
Wages and salaries
2022
£
21,000
40,077
61,077
2021
£
21,000
44,877
65,877
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 (2021: Nil).
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is lower than (2021: 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
2022
£
(1,753,812)
2021
£
1,396,823
(333,223)
265,396
(20,739)
412,299
(72,714)
14,377
(22,328)
(190,831)
(67,420)
15,183
Current tax charge for the year
-
-
The Company has unrelieved excess revenue management
expenses of £671,156 at 31 December 2022 (2021: £595,482) and
£102,597 (2021: £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 2021, 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 2021. 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.
35 | Athelney Trust plc | Annual Report 2022
Notes to the Financial Statements
For the Year Ended 31 December 2022 (continued)
6. Return per Ordinary Share
The calculation of earnings per share has been performed in
accordance with FRS 102.
£
Revenue
2022
£
Capital
£
Total
148,531
(1,902,343)
(1,753,812)
2,157,881
6.9p
(88.2p)
(81.3p)
£
Revenue
2021
£
Capital
£
Total
151,260
1,245,563
1,396,823
2,157,881
7.0p
57.7p
64.7p
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
Final dividend in respect of 2021 of
7.5p (2021: a final dividend of 7.7p
was paid in respect of 2020) per
share
Interim dividend in respect of 2022
of 2.1p (2021: an interim dividend
of 2.0p was paid in respect of 2021)
per share
207,156
209,314
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 (2021: 7.50p) per
ordinary share be paid out of revenue profits amounting to a total of
£161,841. An interim dividend of 2.1p per ordinary share was paid on
23 September 2022 amounting to £45,315 making the total dividend
payable in the year £207,156.
Summary of dividends paid for the last 10 financial years
Ex-div date
6/04/2023
08/09/2022
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
Dividend
Type
Proposed
Interim
Final
Interim
Final
Interim
Final
Final
Final
Final
Final
Final
Final
Final
Amount
7.5p
2.1p
7.5p
2.0p
7.7p
1.7p
9.3p
9.1p
8.9p
8.6p
7.9p
6.7p
5.5p
5.0p
Financial
Year
2022
2022
2021
2021
2020
2020
2019
2018
2017
2016
2015
2014
2013
2012
for
available
Revenue
distribution
Interim dividend paid
Final dividend in respect of
financial year end
2022
£
148,531
2021
£
151,260
(45,315)
(43,157)
(161,841)
(161,841)
Undistributed
reserves
revenue
(58,625)
(53,738)
2022
£
6,436,820
Valuation at beginning of
year
Purchases at cost
Sales - proceeds
- realised gains on sales
Increase/(decrease)
in
unrealised appreciation
Valuation at end of year
1,003,583
(1,472,122)
382,704
(2,170,000)
4,180,985
2021
£
5,310,661
545,379
(778,493)
354,843
1,004,376
6,436,820
Book cost at end of year
Unrealised appreciation at
the end of the year
3,619,201
561,784
3,705,034
2,731,786
4,180,985
6,436,820
2022
£
2021
£
161,841 166,157
8. Investments
45,315
43,157
Movements in year
For the year 2021, a final dividend of 7.5p was paid on 13 April 2022
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 paid in the year £209,314.
UK Main Market
investments
UK AIM-traded shares
listed
3,070,365
5,014,560
1,110,620
1,422,260
4,180,985
6,436,820
36 | Athelney Trust plc | Annual Report 2022
Notes to the Financial Statements
Gains on investments
For the Year Ended 31 December 2022 (continued)
Realised gains on sales
Increase/(decrease)
appreciation
in
unrealised
2022
£
382,704
(2,170,000)
2021
£
354,843
1,004,376
(1,787,296)
1,359,219
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
2022
£
513,597
29,704
543,301
2021
£
236,912
8,251
245,163
10. Creditors: amounts falling due within one
year
Social security and other taxes
Other creditors
Accruals and deferred income
2022
£
700
2,850
13,535
17,085
2021
£
719
2,850
13,560
17,129
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
2022
£
2021
£
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 2022 would have decreased net assets attributable
shareholders by 39 pence per share (2021: 60 pence per share).
An increase of the same percentage would have an equal but
opposite effect on net assets attributable 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.
37 | Athelney Trust plc | Annual Report 2022
For the Year Ended 31 December 2022 (continued)
Notes to the Financial Statements
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
2022
£
4,180,985
2021
£
6,436,820
Financial instruments by category
The financial instruments of the Company fall into the following
categories
31 December 2022
At
Amortised
Cost
£
Assets at
fair value
through
profit or
loss
£
Total
£
-
543,301
27,361
4,180,985
-
-
4,180,985
543,301
27,361
Assets as per balance
sheet
Investments
Debtors
Cash at bank
Total
570,662
4,180,985
4,751,647
17,085
17,085
-
-
At Amortised
Cost
£
Assets at
fair value
through
profit or
loss
£
17,085
17,085
Total
£
-
245,163
30,676
6,436,820
-
-
6,436,820
245,163
30,676
275,839
6,436,820
6,712,659
Liabilities as per the
balance sheet
Creditors
Total
31 December 2021
Assets as per
balance sheet
Investments
Debtors
Cash at bank
Total
Liabilities as per
the balance
sheet
Creditors
Total
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 (2021:
classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of
£4,734,562 (2021: £6,695,530) divided by 2,157,881 (2021:
2,157,881) ordinary shares in issue at the year end.
Net asset value per
share
2022
£
219.4p
2021
£
310.3p
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:
£8,256¹
£6,480
£ 214
17,129
17,129
-
-
17,129
17,129
1. Manny Pohl’s relationship with EC Pohl & Co Pty Ltd
is described in Note 1 to the table of Directors’
interests on page 25. During the year dividends
amounting to £8,256 were paid to EC Pohl & Co Pty
Ltd.
38 | Athelney Trust plc | Annual Report 2022
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
39 | Athelney Trust plc | Annual Report 2022
Company number
02933559
Athelney Trust
Waterside Court, Falmouth Road
Penryn, Cornwall TR10 8AW
athelneytrust.co.uk
40 | Athelney Trust plc | Annual Report 2022