Annual Reports
& Accounts 2020
For the year ended 31 December 2020
10 YEAR ANNIVERSARY OF ADMISSION TO AIM
TMT is a publicly
traded company
providing exposure
to high-growth,
private companies
in the technology
sector.
Then & Now
DECEMBER 2011
NET ASSET VALUE
$19.18M
DECEMBER 2020
NET ASSET VALUE
$177.92M
NET ASSET VALUE PER SHARE
NET ASSET VALUE PER SHARE
$0.96
$6.10
INVESTMENTS MADE SINCE INCEPTION
INVESTMENTS MADE SINCE INCEPTION
10
65+
PROFITABLE FULL AND PARTIAL EXITS
PROFITABLE FULL AND PARTIAL EXITS
0
2
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TMT Investments Plc was admitted to AIM in December 2010, in conjunction with raising $20 million of equity capital (before expenses).Since admission to AIM, TMT has invested in over 65 companies and has a diversified portfolio of over 35 investments, focused primarily on Big Data/Cloud, SaaS, Marketplaces, EdTech and e-commerce. TMT provides its shareholders with the daily liquidity that a publicly traded company offers whilst achieving exposure to a diversified portfolio of high-growth, private companies in the TMT sector that are hard to access without the required specialist expertise. LOOKING FORWARD
“
With cash on the balance sheet of $34.6m
as of the date of this report, TMT is in an
excellent position to continue seeking
suitable investment opportunities and
identify tomorrow’s winners. We thank
all our team for their hard work and
our shareholders for their investment
commitment over the last decade
”
Alexander Selegenev
Executive Director
3
4
Highlights
All figures are shown in USD
$6.10
NAV per share of US$6.10 (up 73.3% from
US$3.52 as of 31 December 2019)
$177.9m
Total NAV of US$177.9 million (up from
US$102.8 million as of 31 December 2019)
$41m
$34.6m
US$41 million of net cash proceeds from exits
US$34.6 million in cash reserves as of 24
during 2020
March 2021
$12.5m
US$12.5 million of investments across 16 new
and existing portfolio companies in 2020
$81.9m
US$81.9m - Total cash proceeds from portfolio
companies since inception (including 14 full and
partial profitable exits)
Contents
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09
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About TMT Investments Plc
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Corporate Governance
A share in TMT
Our investment strategy
Investing Policy
Executive Director’s statement
Pipedrive Case Study
Backblaze Case Study
Bolt Case Study
Portfolio Developments
New Investments
Investment Portfolio
64
Directors’ Report
68
Independent Auditor’s Report
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72
73
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75
Financial Statements
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes In Equity
76
Notes to the financial statements
98
Directors and professional advisers
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Board of Directors
Registered office
13 Castle Street, St Helier, Jersey JE1 1ES.
Tel. +44 1534 281 800 Fax. +44 08451 258 623
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TMT Investments Annual Report and Accounts 2020
TMT Investments
Plc is an early-stage
investor in high-
growth technology
companies with
global scale-up
ambitions.
TMT Investments Plc (“TMT” or “the Company”) provides its shareholders
with access to a diversified portfolio of companies in the TMT (technology,
media and telecommunications) sector.
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About TMT
Investments
TMT Investments Plc (“TMT” or the “Company”) provides
its shareholders with access to a diversified portfolio of
companies in the technology, media and telecommunications
sector.
We are passionate about our work. Members of our
team have been investing in and building start-ups since
the 1990s, and we are experienced in the challenges
many founders and entrepreneurs face. We are
therefore highly selective in our investments, leveraging
the team’s collective experience to identify the best risk/
reward entry point when making an investment.
When we joined the AIM market of the London Stock
Exchange in December 2010, we were one of the first
publicly traded venture capital vehicles in the UK to
provide investors with access to the universe of high-
growth international private technology companies.
Since then, the Company has invested in over 65
companies and realised 14 profitable full and partial
exits. TMT was one of the earliest investors into some
of our most successful companies, including Wrike, Bolt,
Pipedrive and Backblaze.
EXPERIENCED INVESTORS
TMT has a management team comprised of
experienced investors that have been investing
in, building and scaling start-ups since the 1990s.
The Company is able to leverage this experience
to identify and invest in companies at a relatively
early stage of their development, with a number of
investee companies having achieved significant growth
and generated substantial returns for investors.
Identifying and investing in such companies at an
early stage before they have fully proven themselves
is not easy, but offers the potential for generating
significant returns. Prime examples are our exits
from project management software company Wrike,
which generated a US$22.6m cash exit and a return
of 23 times initial investment when it was acquired
by Vista Equity Partners in December 2018, and the
US$41 million disposal of the Company’s interest in
sales management software company, Pipedrive, to
Vista Equity Partners, which generated a total cash
return of over 51 times on investments made in 2012
and 2013. TMT seeks to utilise the experience of its
Board and management team to identify and execute
investments capable of generating significant returns
for shareholders, in companies that may ordinarily be
difficult to gain exposure to, whilst seeking to minimise
risks.
GLOBAL INVESTORS
TMT has no restrictions on the geographies in which
it invests. Our key investment criteria include having
a globally scalable business model and being led by
a management team with the resilience and ability
to execute in high-growth environments. To date,
investments have typically been made in companies
that are headquartered in the US and operate
globally but investment opportunities continue to
be scrutinised globally, regardless of location. Since
2019, the Company has selectively added a number of
companies headquartered in the United Kingdom to its
portfolio, together with others located elsewhere that
meet our key investment criteria.
SPECIALIST INVESTORS
Investing in private companies in the TMT sector
requires a specialist set of skills and investment
approach, in contrast to investing in publicly listed
companies. Information available on private
companies is typically much scarcer than for publicly
listed companies, especially at an early stage of their
development. A dedicated and specialist investment
process is therefore required that includes evaluating a
range of factors. Our proprietary four-filter investment
process is specifically designed to reduce risk and
identify the best opportunities in early-stage investing.
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TMT Investments Annual Report and Accounts 2020
TMT as a public
company
Investors who choose to invest directly in private companies typically face less liquidity when it comes to exiting
their investment compared to those in publicly traded companies. Investors wishing to exit from their investment
in a private company will need to identify current shareholders who are willing to increase their stake(s), or new
investors wishing to acquire a stake. Some private companies may have additional restrictions on new investors
contained within their constitution. Other potential exit events could include a sale to an acquirer or a listing on a
stock exchange, neither of which can be guaranteed, and may require agreement among major shareholders.
TMT was established to solve this problem by providing investors with the daily liquidity that a publicly traded
company offers whilst achieving exposure to a diversified portfolio of high-growth, private companies in the TMT
sector.
Investing in private companies requires a specialist skill set, access to suitable investment opportunities and
extensive research. Our shareholders trust in us to build and manage a diversified portfolio of high-growth
technology companies. For the last five years, our NAV-based IRR (internal rate of return) has been 28.7% per
annum.
Benefits of investing
via TMT
Liquidity
investing via publicly
traded TMT shares
provides shareholders
with venture capital
exposure combined with
the benefits of publicly
traded liquidity
Diversification
Rare exposure
Experience
access to a diversified
portfolio of high-growth,
private companies in the
TMT sector
TMT’s shareholders
benefit from the
experience of a specialist
investment team with a
track record of success
most successful start-ups
move to their next level
of financing and revenues
within just one to two
years, at which point
they become practically
inaccessible to private
investors until such time
as they subsequently
undertake a listing/IPO
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NAV (NET ASSET VALUE) PER SHARE
IRR 3 YEARS 1
IRR 5 YEARS 1
IRR 7 YEARS 1
IRR SINCE INCEPTION
10 YEARS 1
38.46%
28.73%
26.48%
21.13%
$6.401
$6.10
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$2.43
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$1.91
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TMT Investments Annual Report and Accounts 2020
Our Investment
Strategy
Through our investment criteria, TMT seeks to identify companies
that have, amongst other features:
Competent
and motivated
management founders
Managing high-growth
companies requires a
rare combination of skills
High growth potential
Companies with a
product or service that
can be scaled up globally
Growth stage
We highly favour investing
in companies that are
already generating
revenues (we have a
typical minimum revenue
threshold of US$100,000
per month)
Viable exit
opportunities
When we invest, we
are already assessing
potential exit scenarios
We invest in our core sectors. TMT currently focuses on identifying attractive
investment opportunities in the following segments of the TMT sector:
BIG DATA AND
CLOUD SOLUTIONS
SAAS TOOLS
E-COMMERCE
MARKETPLACES
EDTECH
Whilst we focus our attention on these segments, we are not constrained to these and will consider making
investments throughout the TMT sector.
WE INVEST GLOBALLY
The Company is not geographically restricted in terms of where it can invest. It will consider any geographical
area, to the extent that the investment fits within the Company’s investment criteria.
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OUR INVESTMENT SELECTION PROCESS
POST-INVESTMENT ENGAGEMENT
We have funded over 65 companies since inception.
Our engagement with companies continues after our
investment, and is tailored to each company’s needs
and size, including attending investee board meetings,
facilitating introductions to new investors, providing
strategic advice and exploring synergies with partner
companies, including TMT’s portfolio companies.
INVESTMENT RADAR
Companies that have successfully passed through
the majority of the filters but not received investment
from us are added to our investment radar, whereby
we monitor their development for possible future
investment.
Our investment selection process is based on analysing
companies through our four-filter process. Our tried
and tested process is the fruit of our extensive hands-on
experience in building and growing start-ups, combined
with a deep analysis of key operational and financial
metrics.
Preliminary filter
The basic filter ensures that we are comfortable with
the company’s segment within the TMT sector, growth
stage, the market trends in which it operates, and its
exit potential.
Numbers filter
The numbers filter analyses a company’s financial
performance, operational metrics and fundraising
terms, considering our assessment of the company’s
competitive landscape.
Product filter
We analyse the company’s product from a customer’s
perspective, including user experience, by drawing on
our experience of assessing competing products as
part of the investment selection process.
People filter
Managing a company in high growth or hyper growth
scenarios requires a rare combination of high levels
of resilience, organisation and commercial acumen,
amongst other attributes. We interview the company’s
founders to identify these abilities, drawing upon
our experience of working with hundreds of start-up
company management teams.
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TMT Investments Annual Report and Accounts 2020
Our Investment
Strategy
(Since inception to 31 December 2020)
12,000+
PROPOSALS IN
8 YEARS
PRELIMINARY FILTER
Sector, Growth Stage, Markets
Trends, Exit Potential
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INTERNAL PRODUCT TESTING
FROM THE CUSTOMER’S
PERSPECTIVE
1,000+
DEEPLY SCRUTINISED
POST-INVESTMENT ENGAGEMENT
Investee Board Meetings, New Investor
Introductions Strategic Advice and
Exploring Synergies
65+
COMPANIES FUNDED
2,500+
CLOSELY ANALYSED
300+
INTERVIEWED
NUMBERS FILTER
Financial Performance, Operational Metrics,
Fundraising Terms, Competitive Landscape
PEOPLE FILTER
Founders’ Competence,
Team’s Ability to Grow Business
200+
PROMISING COMPANIES
ON THE RADAR
INTERNAL PRODUCT TESTING
FROM THE CUSTOMER’S
PERSPECTIVE
1,000+
DEEPLY SCRUTINISED
POST-INVESTMENT ENGAGEMENT
Investee Board Meetings, New Investor
Introductions Strategic Advice and
Exploring Synergies
65+
COMPANIES FUNDED
12,000+
PROPOSALS IN
8 YEARS
PRELIMINARY FILTER
Sector, Growth Stage, Markets
Trends, Exit Potential
2,500+
CLOSELY ANALYSED
300+
INTERVIEWED
NUMBERS FILTER
Financial Performance, Operational Metrics,
Fundraising Terms, Competitive Landscape
PEOPLE FILTER
Founders’ Competence,
Team’s Ability to Grow Business
200+
PROMISING COMPANIES
ON THE RADAR
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TMT Investments Annual Report and Accounts 2020
Investing Policy
The Company’s objective is to generate an attractive rate
of return for shareholders, predominantly through capital
appreciation, by investing in primarily venture capital and
private equity opportunities in the Technology, Media and
Telecommunications (“TMT”) sector.
PRIVATE COMPANIES
The Company will target primarily small and mid-sized
companies. Each investment is expected to be at
least US$250,000. The investments targeted by the
Company will aim to support rapidly-growing private
companies to increase market share and achieve
long-term shareholder value. If the Company invested
in a private company prior to that company listing on
a stock market, the Company may retain a part of its
investment in the listed entity going forward. Wherever
appropriate, the Company intends to work closely
with the management of each investee company to
create value by focusing on driving growth through
revenue creation, margin enhancement and extracting
cost efficiencies, as well as implementing appropriate
capital structures to enhance returns.
PUBLIC COMPANIES
When investing in public equities, the Company will
seek to select companies with strong growth potential
in their respective segments. No restrictions will be
placed on the size of public companies in which the
Company may make an investment.
The Company aims to provide equity, debt, and equity-
related investment capital, such as convertible loans,
primarily to small and mid-sized private companies,
which are seeking capital for growth and development,
consolidation or acquisition, or as pre-IPO financing.
In addition, the Company may invest in “digital assets”
defined as an electronically stored right or title to
digital or non-digital property or service, including
but not limited to intellectual property, software, or
cryptocurrencies. The Company may also invest in
publicly traded equities which have securities listed on
a stock exchange or over-the-counter market.
The Company may make investments either directly
into individual companies or indirectly through similar
investment vehicles or funds focused primarily on
venture capital and private equity opportunities in
the TMT sector, provided such indirect investments
in other investment vehicles or funds in total do
not exceed 20% of the Company’s latest audited
or announced net asset value at the time of the
investment. The Company may also set up (and
potentially co-invest in) other investment vehicles or
funds and generate income by providing advisory and
consulting services to other investment vehicles or
funds.
The Company is not geographically restricted in terms
of where it will consider making investments. It will
consider any geographical area, to the extent that
the investment fits within the Company’s investment
criteria. The Company’s Directors and senior managers
have the relevant expertise to invest in the TMT sector,
whether in the form of equity, debt, equity related
instruments, collective investment vehicles, or “digital
assets”. The Company is not subject to any borrowing
or leveraging limits.
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REALISATION OF RETURNS
The Company will, when appropriate, consider how
best to realise value for Shareholders whether through
a trade sale, flotation or secondary sale of the investee
companies. The proposed exit route will form a key
consideration of the initial investment analysis. The
Company expects to derive returns on investments
principally through long-term capital gains and/or the
payment of dividends by investees. The primary ways
in which the Company expects to realise these returns
include:
(a) the sale or merger of a company;
(b) the sale of securities of a company by means of
public or private offerings; and
(c) the disposal of public equity investments through
the stock exchanges on which they are listed.
For private investee companies the Company believes
that its typical investment holding period should
provide sufficient time for investee companies to
adequately benefit from the capital and operational
improvements resulting from the Company’s
investment. The targeted holding period shall be
reviewed on a regular basis by the Company, but it is
expected that this will typically be between two to six
years. For public equities, following the investment,
the Company will continue to monitor its position.
Importance will be placed on the timing of any
disposal. Should the Company consider that the capital
appreciation of a particular investment has reached
its peak or is likely to or has begun to decline, then the
Company will consider the sale of that investment.
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TMT Investments Annual Report and Accounts 2020
Executive Director’s
Statement
At the time of the publication of TMT’s interim results in September 2020, it was
still not possible to predict that the tech venture capital investment space would
become one of the few beneficiaries of the new market environment caused by
COVID-19. However, the second half of 2020 revealed increased investor interest
in the high-growth potential of business models based on digital, online and
remote technologies, leading to a significant increase in fundraising activities by
technology companies around the world. In turn, this resulted in a large number of
significant revaluations and cash realisations across our portfolio, making 2020 the
most successful year for the Company to date.
TMT’s net asset value (“NAV”) per share as of 31
December 2020 increased significantly to US$6.10
(up 73.3% from US$3.52 as of 31 December 2019). In
particular, the Company’s NAV benefited significantly
from increased valuations in three of our significant
holdings: sales CRM company Pipedrive (+US$29.1
million in NAV), global ride-hailing and food delivery
company Bolt (+US$14.1 million in NAV), and cloud
storage company Backblaze (+US$34.8 million in NAV).
In accordance with IFRS standards, valuations for the
Company’s investments in Backblaze and Scentbird
as of 31 December 2020 have utilised comparable
company revenue multiple analysis (with appropriate
discounts to publicly traded comparable companies
applied for lack of marketability) to revalue these
investments as part of the accounts preparation
and audit process, in order to reflect the continuing
positive progress of those investee companies, in the
absence of recent equity fundraising activity in those
companies, which would otherwise have been our
preferred valuation method.
The majority of our portfolio companies have
been navigating the turmoil caused by COVID-19
successfully, with many investees actually benefiting
from the changed market environment. A large
number of our investees have taken advantage of
increased investor interest in growing technology
companies and raised capital for further expansion.
Despite making only two new investments in the
first half of the year, the Company finished the year
with investments in a total of 16 new and existing
portfolio companies in 2020. Out of over 35 portfolio
investee companies, the Company registered only
2 impairments during the period. The only notable
impairment was in respect of Le Tote, whose
department store and fashion rental business was
directly affected by COVID-19 and associated lock
downs, resulting in the company filing for bankruptcy in
August 2020.
In December 2020, TMT celebrated 10 years since
its admission to AIM in December 2010, when it was
one of only a handful of publicly quoted companies
investing in privately held technology companies at
the time. We are delighted that TMT’s NAV per share
has grown 6.4 times in that 10-year period (including
dividends paid to date), which has seen two multi-
million dollar exits (the US$22.6m cash exit from
Wrike in December 2018 and the US$41m cash exit
from Pipedrive in 2020). With cash on the balance
sheet of $34.6m as of the date of this report, TMT is
in an excellent position to continue seeking suitable
investment opportunities and identify tomorrow’s
winners. We thank all our team for their hard work and
our shareholders for their investment commitment
over the last decade.
NAV PER SHARE
The Company’s NAV per share in 2020 increased by
73.3% to US$6.10 (from US$3.52 as of 31 December
2019), mainly as a result of the significant upward
revaluations of our investments in Pipedrive, Backblaze
and Bolt.
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NAV PER SHARE IN
2020 INCREASED
73.3%
$6.10
OPERATING EXPENSES
In 2020, the Company’s administrative expenses of
US$1,255,451 were slightly above the corresponding
2019 levels (US$1,174,466), reflecting the Company’s
increased investment activity in the second half of
2020.
FINANCIAL POSITION
As of 31 December 2020, the Company had no
financial debt and cash reserves of approximately
US$39 million. As of 24 March 2021, the Company had
cash reserves of approximately US$34.6 million.
BONUS PLAN
The Company has put in place the bonus plan for
Directors, officers, employees of, or consultants to, the
Company (the “Bonus Plan”). The initial 3-year Bonus
Plan was approved by the Board on 2 December 2015.
Under the Bonus Plan, subject to achieving minimum
hurdle rate and high watermark conditions in respect
of the Company’s net asset value (“NAV”), the team
received an annual cash bonus equal to 7.5% of the
net increases in the Company’s NAV, adjusted for any
changes in the Company’s equity capital resulting from
issuance of new shares, dividends, share buy-backs
or similar corporate transactions. In June 2018, the
Company extended the Bonus Plan for three years
(until 30 June 2021) on the same terms, with slightly
amended initial allocations of the bonus pool among
the participants.
On 25 November 2020, the Board announced that
it had approved the amendment of the Bonus Plan
in order to simplify its administration by bringing
the calculation of the bonus pool in line with the
Company’s financial year end of 31 December and
accordingly, the “bonus year-end date” was amended
from 30 June to 31 December.
In addition, given the increase in the size of the
Company and its team since the Bonus Plan was
first introduced in 2015, the team’s consistent
outperformance in growing the Company’s NAV and
to bring it more in line with typical structures within
the venture capital sector in which TMT operates, the
Board announced on 25 November 2020 that the
Bonus Plan’s bonus pool was increased from 7.5% to
10% of the net increase in the Company’s adjusted NAV,
starting from 1 January 2021 until 31 December 2024.
The total amount of bonus accrued for the period
ended 31 December 2020 was US$6,086,948.
UPDATE ON THE CONTINUING EFFECT OF
COVID-19
In the first half of 2020, when COVID-19 first caused
significant uncertainty and volatility in the market, we
were pleased to see that the majority of our portfolio
companies benefited from the previously adopted
pragmatic approach of seeking cost-efficient growth,
as opposed to ‘growth at any cost’. This approach
allowed them to control their burn rates and cash
liquidity levels effectively in those turbulent months.
The second half of 2020 was marked by renewed
investor interest in the high-growth potential of tech
start-ups, which in turn removed liquidity concerns for
high-quality, fast growing companies (including many of
our investees) and allowed them to return to the more
usual “invest for growth” mode.
Our top five portfolio companies (Backblaze, Bolt,
Depositphotos, Scentbird and PandaDoc), accounting
for approximately 78% of investment portfolio value,
are well-established, more mature businesses, with
globally diversified revenues, strong cash reserves
and tens of thousands of customers. They are
operationally nimble, cost conscious companies that
have grown rapidly, without undertaking large funding
rounds to support expanded cost bases, compared to
some of their peers.
Cloud storage provider, Backblaze (www.backblaze.
com), continued to perform well, with over 450,000
customers globally. Backblaze offers easy-to-use,
affordable cloud storage that is well positioned for
growth in the current cost-saving environment. While
there is still some uncertainty given the continuing
COVID-19 pandemic, Backblaze achieved double digit
growth and strong continued momentum in 2020.
Bolt (www.bolt.eu), a leading international ride-hailing
and food delivery company, is active in over 200 cities
globally. Whilst turnover for the core ride-hailing
business had been negatively affected as a result of
COVID-19 at the beginning of the pandemic in Q2 of
2020, Bolt’s track record as a highly competitive and
cost-efficient ride-hailing operator allowed it to not only
survive the most difficult COVID-19 lockdown months
without laying off a single employee, but also launch
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TMT Investments Annual Report and Accounts 2020
Executive Director’s Statement Continued
new services and raise (in May 2020) €100 million in
additional capital through a convertible note. Since the
easing of strict lockdown restrictions in most of Bolt’s
key markets, its turnover and revenue have rapidly
increased. Bolt resumed its geographic and product
expansion and, in December 2020, successfully raised
a further €150 million in an equity finance round led by
D1 Capital Partners.
Stock photo and video marketplace Depositphotos
(www.depositphotos.com) entered the recent turbulent
period operationally profitable, with sizeable cash
reserves and a well-diversified international customer
base. As estimated in our 2019 Annual Report, the
short-term impact on Depositphotos proved neutral.
Perfume, wellness and beauty product subscription
service, Scentbird (www.scentbird.com), entered the
COVID-19 period operationally profitable, with sizeable
cash reserves. Contrary to our more pessimistic
expectations in our 2019 Annual Report, the short-
term impact on Scentbird’s revenues proved positive.
Scentbird continued to grow its annualised revenue
at double digits, and its subscriber base exceeded
400,000 (from “over 330,000” as of 31 December 2019).
Proposal automation and contract management
software provider, PandaDoc (www.pandadoc.com), has
recently become TMT’s fifth largest portfolio holding,
following completion of a recent new equity round
which resulted in a revaluation of TMT’s investment
to US$3.6 million. Post COVID-19, its solutions, which
enable sales teams to remotely manage their selling
processes “from propose to close”, have become even
more relevant, and the company continues to grow.
The remainder of our portfolio consists of over 30
companies and is diversified across our five core
investment sectors: Big Data/Cloud, SaaS (software-
as-a-service), Marketplaces, EdTech and E-commerce.
While a limited number of our portfolio companies
were significantly exposed to sectors immediately
affected by COVID-19 related disruptions and faced
challenges (with Le Tote being the only sizeable
example), many of our portfolio companies have
experienced a notable increase in demand for their
products. The further effect of COVID-19’s implications
on our portfolio companies will depend on how the
situation develops in the coming months.
TMT’s own team has always been internationally based
and is therefore used to working remotely. As a result,
there has been no disruption to our operations.
OUTLOOK
Throughout the recent crisis, and especially following
the gradual removal of strict COVID-19-related
restrictions in many markets, the venture capital
industry has continued to actively invest in fast-
growing, cost-conscious tech companies. TMT has now
invested in over 65 companies since its admission to
AIM in December 2010 and has a diversified portfolio
of over 35 investments, focused primarily on Big Data/
Cloud, SaaS, Marketplaces, EdTech and E-commerce.
TMT’s strategy remains to be very selective in
identifying new investment opportunities, while seeking
to capitalise on the new and existing investment
themes continuously developing in the technology
space.
Alexander Selegenev
Executive Director
24 March 2021
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51x
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$41M
Cash Exit
Pipedrive is a leading sales CRM (customer
relationship management) solution. Founded
in 2010, it is now used by over 95,000
companies in 150 countries.
“
Pipedrive became TMT’s second unicorn upon exit
completion in December 2020, generating US$41m
of cash proceeds, a total cash return of over 51 times
on TMT’s investments. As one of Pipedrive’s earliest
institutional investors, TMT identified Pipedrive’s unicorn
potential early on in 2012. This is the real value add of
”
venture capital investing.
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Identifying
value before
the crowd
2010
Pipedrive is born
After selling everything from newspaper ads to insurance and training
tens of thousands of sales professionals for companies like Coca-Cola
and Nissan, Timo Rein and Urmas Purde spot a gap in the CRM market.
In their combined 40 years of experience, they hadn’t found a sales
management tool catering to the needs of people doing the actual selling.
So they decide to create their own. They team up with fellow co-founders
Martin Henk, Ragnar Sass and Martin Tajur to create a CRM software that
puts the needs of salespeople first. Pipedrive is born.
2012 - 2013
TMT identifies potential
unicorn in Pipedrive
TMT identifies the makings of a potential unicorn company in Pipedrive
early on, when it makes its first investment of $328,945 in 2012 and an
additional $450,000 in 2013 into Pipedrive’s convertible notes, just two
years into Pipedrive’s foundation.
PIPEDRIVE FITS TMT’S INVESTMENT CRITERIA:
Competent and motivated
management founders
High growth potential that
can be scaled up globally
Already generating
revenues
and with viable exit
opportunities
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2015 - 2019
Pipedrive attracts interest
from large venture capital
2020
Pipedrive receives majority
investment from Vista Equity
Partners
As Pipedrive enters its expansion phase and records strong growth
globally, its success leads to attracting US$90 million of investment from
large venture capital funds including Atomico, Bessemer Venture Partners
and Rembrandt Venture Partners.
By 2020, Pipedrive has a well-diversified customer base of over 90,000
companies worldwide, very significant cash reserves and continues to be
operationally profitable.
In November 2020 Pipedrive signs a definitive conditional agreement
regarding a majority investment from Vista Equity Partners, a leading US
investment firm. As part of the transaction, TMT agrees to dispose of its
entire holding in Pipedrive to Vista for a cash consideration of US$41
million. The transaction is completed in December 2020. The disposal
represented a substantial valuation uplift of US$29.3 million (or 247%) in
the value of TMT’s investment in Pipedrive prior to the disposal, being the
sum of the previous reported amount as of 31 December 2019 plus the
value of Pipedrive shares acquired by TMT in July 2020.
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TMT Investments Annual Report and Accounts 2020
164%
REVALUATION
UPLIFT
CUSTOMERS IN
175+ COUNTRIES
Backblaze offers easy-to-use, affordable cloud storage that is well
positioned for growth in the current cost-saving environment.
“
Backblaze achieved double digit growth
and strong continued momentum in
2020, launching new initiatives including
compatibility with the Amazon S3 cloud
storage ecosystem ”
TMT became Backblaze’s first
institutional external investor in 2012.
Backblaze had been launched five years
earlier, when in 2007 the company’s
five founders quit their jobs to provide
backup services to their friends and
family’s computers working from an
apartment.
Since then, Backblaze’s technology offering has made
it one of the world leaders in computer backup and
cloud storage, with customers in over 175 countries.
Backblaze prides itself on making back up processes
very easy while improving clients’ operational
expenses vs. Amazon S2 and other providers.
Backblaze’s success in generating strong organic
growth without recurring to large and dilutive equity
fund raises means that TMT retains a significant
10.85% stake in Backblaze’s equity. The fair value of
TMT’s investment in Backblaze was revalued in 2020
using comparable company revenue multiples, as a
result of continued growth of the business, coupled
with the absence of recent equity capital raises by (or
partial exit transactions in) Backblaze.
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64%
REVALUATION
UPLIFT
€250
MILLION
RAISED
Bolt is a ride-hailing and food delivery
service active in over 200 cities globally
“
Revenue at Bolt recovered rapidly from
the COVID-related lows in April 2020
and by end 2020 was active in over 200
cities globally, up from 150 cities at end
December 2019 ”
FROM LOCAL MINNOW TO GLOBAL PLAYER
In September 2014, TMT became one of the earliest
investors in Bolt, when it was a one-year old start-up
present in four cities in Estonia and Latvia. Since then
Bolt has become a global player, active in over 200
cities globally and has leveraged its technology and
user base to expand into electric scooter, food and
business parcels delivery.
In May 2020 Bolt raised €100 million (US$110 million)
in additional capital through a convertible note. In
December 2020 Bolt successfully raised €150 million
(US$182 million) in an equity finance round led by D1
Capital Partners to support growth. Bolt’s ability in
raising significant amounts of capital to fund growth
during the Covid-19 pandemic represents strong
investor confidence in Bolt’s management team, its
business model and the outlook for the company.
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TMT Investments Annual Report and Accounts 2020
Portfolio
Developments
Although the first half of 2020 was
understandably quieter for TMT in terms of new
investments and revaluations, the second half of
2020 more than compensated the lack of activity
in the first half of the year. We were delighted
with our highly profitable US$41 million cash exit from
Pipedrive, as well as the underlying performance of the
majority of our other portfolio companies. A number
of portfolio companies (PandaDoc, HealthyHealth,
Scalarr, MEL Science, Bolt, Feel, and Affise) received
further validation for their business ls by raising fresh
equity capital at higher valuations. In tandem, some
of our portfolio companies (ClassTag, Legionfarm,
and RetargetApp) raised additional capital in the form
of convertible instruments. While the latter did not
trigger immediate revaluations for TMT, they featured
notably higher conversion caps compared to the levels
at which TMT invested in those companies, therefore
creating potential upside for the Company’s NAV.
PORTFOLIO PERFORMANCE
The following developments had an impact on and
are reflected in the Company’s NAV and/or financial
statements as of 31 December 2020 in accordance
with applicable accounting standards:
•
In June 2020, insurtech and healthtech company
HealthyHealth (www.healthyhealth.com) completed
a new equity funding round. The transaction
represented a revaluation uplift of US$0.16 million
(or 63.9%) in the fair value of TMT’s investment in
HealthyHealth, compared to the previous reported
amount as of 31 December 2019.
•
•
•
In August 2020, PandaDoc, a proposal automation
and contract management software provider (www.
pandadoc.com), completed a new equity funding
round. The transaction represented a revaluation
uplift of US$1.41 million (or 63.5%) in the fair value
of TMT’s investment in PandaDoc, compared to
the previous reported amount as of 31 December
2019.
In November 2020, Pipedrive, a leading sales
CRM solution (www.pipedrive.com), signed a
definitive conditional agreement regarding a
majority investment from Vista Equity Partners
(“Vista”), a leading US investment firm. As part
of the transaction, TMT agreed to dispose of its
entire holding in Pipedrive to Vista for a cash
consideration of US$41 million (the “Disposal”).
The Disposal was completed in December 2020
and represented a substantial valuation uplift of
US$29.3 million (or 247%) in the value of TMT’s
investment in Pipedrive prior to the Disposal, being
the sum of the previous reported amount as of 31
December 2019 plus the value of Pipedrive shares
acquired by TMT in July 2020.
In November 2020, MEL Science, an EdTech
company focused on VR-assisted chemistry and
physics experiment subscription kits for children
(www.melscience.com), completed a new US$14
million equity funding round. The transaction
represented a revaluation uplift of US$0.66 million
(or 33.2%) in the fair value of TMT’s investment in
MEL Science, compared to the previous reported
amount as of 31 December 2019.
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•
•
In November 2020, Scalarr, a machine learning-
based fraud detection solution focused on the
advertising market (www.scalarr.io), completed
a new equity funding round. The transaction
represented a revaluation uplift of US$0.76 million
(or 50.4%) in the fair value of TMT’s investment
in Scalarr, compared to the previous reported
amount as of 31 December 2019.
ride-hailing and food delivery company (www.
bolt.eu), successfully raised €150 million (US$182
million) in an equity finance round led by D1
Capital Partners. The transaction represented a
substantial valuation uplift of US$14.1 million (or
64%) in the fair value of TMT’s investment in Bolt,
compared to the previous reported amount as of
31 December 2019.
In December 2020, Feel Holdings Limited (“Feel”),
a subscription-based innovative multivitamin
and supplement producer (www.wearefeel.com),
completed a new equity funding round. The
transaction represented a revaluation uplift of
US$0.36 million (or 104.4%) in the fair value of
TMT’s original investment in Feel completed in
August 2020.
•
In February 2021, Affise Technologies Ltd, a
performance marketing SaaS solution (https://
affise.com/en/), completed a new equity funding
round. The transaction represented a revaluation
uplift of US$0.40 million (or 40.0%) in the fair value
of TMT’s investment in Affise, compared to the
previous reported amount as of 31 December
2019.
•
In December 2020, Bolt, a leading international
In addition, the following portfolio companies were revalued using comparable company revenue multiples:
Portfolio
Company
Upward revaluation
amount (US$)
Upward revaluation
amount as % of fair
value reported as
of 31 Dec 2019
Reasons for upward revaluation
Backblaze
34,802,829
164%
Scentbird
2,920,647
87%*
Continued growth of the business, coupled
with the absence of recent equity capital
raises by (or partial exit transactions in) the
portfolio company
Continued growth of the business, coupled
with the absence of recent equity capital
raises by (or partial exit transactions in) the
portfolio company
* - adjusted for the value of the additional investment made during 2020.
As of the date of this report, portfolio companies valued at comparable company revenue multiples (as opposed
to actual equity transactions or at cost) constituted 43.2% of the total value of the Company’s investment portfolio.
NEGATIVE REVALUATIONS:
The following of the Company’s portfolio investments were negatively revalued in the first half of 2020:
Portfolio
Company
Write-down
amount (US$)
Reduction as % of
fair value reported
as of 31 Dec 2019
Reasons for write-down
Le Tote
2,749,812
E2C
136,781
100%
100%
Company filed for bankruptcy in August
2020
Lack of progress in the last 3 years
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TMT Investments Annual Report and Accounts 2020
Key developments for the five largest portfolio holdings in 2020
(source: TMT’s portfolio companies):
BACKBLAZE (CLOUD STORAGE PROVIDER):
BOLT (RIDE-HAILING AND FOOD DELIVERY SERVICE):
• Double-digit revenue growth continued
•
Launched key new initiatives including compatibility
with the Amazon S3 cloud storage ecosystem
•
•
•
Active in over 200 cities globally (up from 150 cities
as of 31 December 2019)
As announced in May and December 2020, raised
a total of €250 million in additional capital to
support growth
Revenue recovered rapidly from the COVID-related
lows in April 2020
DEPOSITPHOTOS (STOCK PHOTO AND VIDEO
MARKETPLACE):
SCENTBIRD (PERFUME, WELLNESS AND BEAUTY
PRODUCT SUBSCRIPTION SERVICE):
•
Flat revenue was offset by organic cost savings
• Double-digit revenue growth continued
• New graphic design software product Crello
• Over 400,000 subscribers (from over 330,000 as of
continued growing fast in both users and revenue
31 December 2019)
PANDADOC (PROPOSAL AUTOMATION AND
CONTRACT MANAGEMENT SOFTWARE):
•
Annual recurring revenue grew 63%
• Over 23,000 paying clients (from over 17,000 as of
31 December 2019)
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New investments
Having naturally slowed down the pace of new investments in the second quarter of
2020, we returned to full investing mode in the second half of the year. This resulted
in the Company investing in 16 new and existing portfolio companies that met our
investment criteria of having fast growing revenue, outstanding management teams,
high growth potential based on globally scalable business models and viable exit
opportunities.
In 2020, the Company made the following investments:
US$400,000
£500,000
in ClassTag, Inc., a parent-school
communication platform currently
connecting over 2 million families
across 25,000 schools in the USA (www.
classtag.com);
(in two separate rounds) in 3S Money Club
Limited, a UK-based online banking service
focusing on international trade (www.3s.
money);
US$1,000,000
in Moeco IoT, Inc., an end-to-end
solution for valuable data generation
and delivery through simple non-
intrusive sensors and a secure software
platform (www.moeco.io);
US$329,903
US$1,630,075
US$200,000
(via acquisition of existing shares) in
portfolio company Scentbird (www.
scentbird.com);
(via acquisition of existing shares) in
portfolio company Pipedrive (www.
pipedrive.com);
in Volumetric Biotechnologies,
Inc., an advanced biomaterial and
bio-fabrication company (www.
volumetricbio.com);
Additional
US$1,001,250
in Central American delivery and
transportation technology company
Hugo (www.hugoapp.com);
£1,262,000
£500,000
(in two separate rounds) in Feel
Holdings Limited, a subscription-based
innovative multivitamin and supplement
producer (www.wearefeel.com);
in Hinterview Limited, a specialist video
platform for the recruitment industry
(https://hello.hinterview.com/);
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PAGE CONTENTTMT Investments Annual Report and Accounts 2020
New Investments Continued
US$1,000,000
in StudyFree, Inc., an EdTech SaaS
platform that connects students
with international opportunities and
helps them secure financing through
scholarships and grants (www.
international.studyfree.org/);
US$500,000
in NovaKid Inc., an online school
for children learning English (www.
novakidschool.com);
Additional
US$700,000
in Ad Intelligence Inc., trading as
RetargetApp, an online solution
aimed at monitoring ad campaigns
and automatically managing daily
budgets, audience and bids to improve
the quality of retargeting (https://
retargetapp.com);
£1,000,000
in MTL Financial Ltd, trading as Outfund,
a UK-based revenue-based financing
provider (www.out.fund);
US$750,000
in Virtual Mentor Inc., trading as All
Right, an online school for children
learning English (https://allright.com/
en/);
Additional
US$500,000
in Scalarr, Inc., a machine learning-
based fraud detection solution focused
on the advertising market (www.scalarr.
io); and
€150,000
in Postoplan OÜ, a social network
marketing platform, which helps create,
schedule, and promote content (www.
postoplan.app).
EVENTS AFTER THE REPORTING PERIOD
In January 2021, the Company invested an additional £135,825 (via acquisition of existing shares) in 3S Money, a
UK-based online banking service focusing on international trade (www.3s.money).
In January 2021, the Company invested an additional US$228,933 (via acquisition of existing shares) in Workiz, a
SaaS solution for the service field industry (www.workiz.com).
In February 2021, the Company invested an additional US$2,000,000 in Affise, a performance marketing SaaS
solution (https://affise.com/en/).
In February 2021, the Company invested an additional £399,997 in HealthyHealth, an insurtech and healthtech
company (www.healthyhealth.com).
In March 2021, the Company invested US$1,000,000 in 3DLook Inc., a body scanning and measuring technology
solution for the online retail industry (www.3dlook.me).
These events after the reporting period are not reflected in the NAV and/or the financial statements as at 31
December 2020.
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$2.0M
$2.66M
TOTAL INVESTMENT
(USD MILLION)
FAIR VALUE
(USD MILLION)
MEL SCIENCE IS AN EDTECH COMPANY FOCUSED ON VR-ASSISTED
CHEMISTRY AND PHYSICS EXPERIMENT SUBSCRIPTION KITS FOR
CHILDREN
In November 2020, MEL Science, an EdTech company
focused on VR-assisted chemistry and physics experiment
subscription kits for children (www.melscience.com),
completed a new US$14 million equity funding round. The
transaction represented a revaluation uplift of US$0.66
million (or 33.2%) in the fair value of TMT’s investment in
MEL Science, compared to the previous reported amount as
of 31 December 2019.
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Investment
Portfolio
32
Portfolio Classification By Investees’ Sectors
(as of 31 December 2020)
Big Data / Cloud
E-Commerce
Marketplace
SaaS
EDTECH
Other
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TMT Investments Annual Report and Accounts 2020
The Company’s Ten Largest Portfolio Investments
(as of 31 December 2020)
OTHER
Portfolio
Company
#
1
2
3
4
5
6
7
8
9
Backblaze
Bolt
DepositPhotos
Scentbird
PandaDoc
Remote.it
Scalarr
MEL Science
Feel
10 Wanelo
Other
Total
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Fair value (US$)
As % of total
portfolio value
56,004,337
36,201,527
10,836,105
6,590,954
3,621,279
3,025,285
2,756,563
2,663,696
2,035,512
1,825,596
19,242,300
144,803,154
38.68
25.00
7.48
4.55
2.50
2.09
1.90
1.84
1.41
1.26
13.29
100.00
OTHER
Portfolio allocation by sector and
by number of companies per sector
(as of 31 December 2020)
Edtech
3.69%
Other
4.37%
SaaS
5.87%
E-Commerce
7.53%
Marketplace
34.92%
5
9
Big Data / Cloud
43.63%
6
5
8
4
Sector
Fair Value ($)
As % of Fair Value
Companies
Big Data / Cloud
Marketplace
E-Commerce
SaaS
Other
Edtech
63.18M
50.57M
10.90M
8.49M
6.32M
5.34M
43.63
34.92
7.53
5.87
4.37
3.69
9
5
4
8
6
5
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TMT Investments Annual Report and Accounts 2020
Portfolio allocation by growth stage of investee companies
(% of portfolio and number of companies, as of 31 December 2020)
Early
12.65%
Expansion
4
Expansion
70.73%
Sector
Early
Mid-stage
Expansion
Fair
Value
Mid-stage
16.62%
Mid-stage
11
Companies
Early
22
Fair Value ($)
Percentage (%)
Companies
18.32M
24.07M
102.42M
144.80M
12.65%
16.62%
70.73%
Portfolio allocation by target audience of investee companies
(% of portfolio and number of companies, as of 31 December 2020)
22
11
4
37
B2C
12
B2C
36.27%
B2B
18
Fair
Value
Companies
B2B/B2C
7
Fair Value ($)
Percentage (%)
Companies
52.53M
74.13M
18.15M
144.80M
36.27
51.19
12.53
12
7
18
37
B2B
12.53%
B2B/B2C
51.19%
Sector
B2C
B2C/B2B
B2B
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Proven Track Record In Creating Value
(since inception to 31 December 2020)
VALUE CREATED
$226.7M
$72.1M
$9.8M
---
FULL
PROFITABLE
CASH EXITS
PARTIAL CASH
EXITS AND
OTHER CASH
PROCEEDS
REMAINING
IN IMPAIRED
COMPANIES
$144.8M
REMAINING IN POSITIVELY REVALUED COMPANIES
CAPITAL INVESTED $53.4M
VALUE LOST
$11.6M
$11.6M
---
FULL NEGATIVE EXITS
PARTIAL IMPAIRMENTS
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Exits
(since inception to 31 December 2020)
FULL PROFITABLE EXITS
Astrid
PARTIAL PROFITABLE EXITS
ACQUIRERS
Private Investors
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Portfolio Map
(as of 31 December 2020)
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The Company’s ten largest portfolio investments
(as of 31 December 2020)
BACKBLAZE
Online data back-up and cloud storage provider.
www.Backblaze.com
Incorporation
USA
First invested in
July 2012
BOLT
International ride-hailing and delivery platform.
www.bolt.eu
Incorporation
Estonia
First invested in
September 2014
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Total Investment
(USD Million)
$5.03m
Fair Value (USD Million)
$56.00m
Total Investment
(USD Million)
$0.32m
Fair Value (USD Million)
$36.20m
DEPOSITPHOTOS
A photobank (an online image marketplace) acting
as intermediary between picture right owners and buyers.
www.Depositphotos.com
Incorporation
USA
First invested in
July 2011
SCENTBIRD
Perfume, wellness and beauty product subscription service.
www.scentbird.com
Incorporation
USA
First invested in
April 2015
PANDADOC
PandaDoc helps improve efficiency and productivity of business
development and sales teams across various industries.
www.PandaDoc.com
Incorporation
USA
First invested in
July 2014
Total Investment
(USD Million)
$4.02m
Fair Value (USD Million)
$10.84m
Total Investment
(USD Million)
$1.23m
Fair Value (USD Million)
$6.59m
Total Investment
(USD Million)
$0.41m
Fair Value (USD Million)
$3.62m
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REMOTE.IT
Secure overlay networks on top of the Internet.
www.remote.it
Incorporation
USA
First invested in
June 2014
Total Investment
(USD Million)
$0.28m
Fair Value (USD Million)
$3.03m
SCALARR
Machine learning-based fraud detection solution focused on the advertising
market
www.scalarr.io
Incorporation
USA
First invested in
August 2019
Total Investment
(USD Million)
$2.00m
Fair Value (USD Million)
$2.76m
MEL SCIENCE
Subscription-based science experiments for school children,
combining a hands-on approach with theory and VR.
www.melscience.com
Incorporation
United Kingdom
First invested in
February 2019
Total Investment
(USD Million)
$2.00m
Fair Value (USD Million)
$2.66m
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FEEL
Subscription-based innovative multivitamin and supplement producer
www.wanelo.com
Incorporation
United Kingdom
First invested in
August 2020
WANELO
Online social discovery shopping platform.
www.wanelo.com
Incorporation
USA
First invested in
November 2011
Total Investment
(USD Million)
$1.68m
Fair Value (USD Million)
$2.04m
Total Investment
(USD Million)
$0.36m
Fair Value (USD Million)
$1.83m
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Board of Directors
Yuri Mostovoy, Non-executive Chairman, was
appointed to the Board in June 2011. Yuri brings over
37 years of expertise in investment banking, software
development and business to his role as Chairman of
the Company. Yuri completed his Ph.D. program at
the Moscow Aviation Institute in 1972 and has a M.Sc.
in Electrical Engineering from that same institution.
Yuri has held a number of previous Board positions
at a number of companies, and brings this experience
to the Board. He has been involved in a number of
internet start-ups in the areas of medical devices,
software development, and social media.
Yuri Mostovoy is actively involved in the start-up
investment community, especially in some of the tech
hubs in the USA, meeting with technological companies
seeking investments on a regular basis. Through this
process of direct contact with investee companies, Yuri
keeps updated on sector developments.
Alexander Selegenev, Executive Director, was
appointed to the Board in December 2010. The
Executive Director has the responsibility of leading
the business and the executive management team,
ensuring that strategic and commercial objectives are
met. Alexander has over 20 years of experience in
investment banking and venture capital, with specific
expertise in international corporate finance, equity
capital markets and mergers and acquisitions at a
number of City of London firms including Teather &
Greenwood Limited, Daiwa Securities SMBC Europe
Limited, and Sumitomo Bank Limited. Throughout his
career he worked on a large number of AIM IPOs and
private equity and merger and acquisition transactions.
He has an MSc (Hons) and a BSc (Hons) in Business
from the Peoples’ Friendship University of Russia in
Moscow and a Bachelor of Business Studies (Major in
Management) from Monash International University
in Australia. He brings strong experience of working
with public markets. Alexander’s public markets and
financial experience make him an ideal conduit to
engaging with the Company’s Nomad, investors and
make him an effective conduit between the Board and
the Company’s other team members.
Alexander Selegenev is an active member of the
Company’s investment committee, allowing him to keep
very close to developments and current thinking on
new technologies, market trends, company valuations
and fund raising activities.
Alexander Selegenev is a member of the Company’s
Nomination Committee.
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James Mullins, independent Non-executive
Director, was appointed to the Board in December
2010. He brings to the Company a strong combination
of accountancy, experience of working with public
markets and institutional investors. James, with his
financial background, provides the experience required
as chairman of the audit committee to challenge the
business internally and also the external auditors. From
2004 to 2007, he was the Finance Director at Rambler
Media and was involved in its successful admission on
AIM and subsequent sale. He has been a director of
numerous funds and companies including the Russian
Federation First Mercantile Fund. This Fund (Class
A shares) is listed on the Bermuda Stock Exchange.
He was previously a partner in First Mercantile and
FM Asset Management Ltd. He previously worked for
PricewaterhouseCoopers, Deloitte and British Coal
where he was a national investment manager. He was
recently Chairman of the Scottish Salmon Company,
which is listed on the Oslo Bors. James is a Fellow of
the Association of Chartered Certified Accountants and
he holds a Bachelor of Science degree and a Master of
Arts degree from Trinity College, Dublin. James is also
an active entrepreneur and investor.
James Mullins has recently completed an online course
with University of Oxford Said Business School entitled
Oxford Blockchain Strategy Programme.
Petr Lanin, independent Non-executive Director,
was appointed to the Board in December 2010. Petr’s
experience in investment and brokerage that he brings
to the Company allows him to review and challenge
decisions and opportunities presented both within the
formal arena of the Boardroom and as called upon
when needed by senior management.
He began his career as an equity analyst in the Russian
information agency “RosBusinessConsulting” (“RBC”)
in 1995. Between 1996-2000 he served as chief of
the share department in Makprombank. Between
2000 and 2006 he held the position of general
director of the investment company “Maxwell Capital”.
Following his appointment as general director of
“Maxwell Asset Management” in 2003, Mr Lanin was
key in the establishment and management of many
investment funds. He was also one of the managing
directors of venture capital fund “Maxwell Biotech”
which was a closed mutual fund set up and operated
by Maxwell Asset Management. In 2008, Maxwell
Asset Management established a UK FSA registered
subsidiary in which Petr Lanin held a controlled
function. At present, Petr is a chief of the Purchases
and Supply Department in Federal State Organisation
“Clinical hospital #1”. Petr holds an MBA degree
in finance and credit from the Plekhanov Russian
Academy of Economics.
James Mullins serves as Chairman of the Audit,
Remuneration and Nomination committees.
Petr Lanin is a member of the Company’s Audit and
Remuneration Committees.
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Corporate
Governance
AIM quoted companies are required, pursuant to the AIM Rules for Companies,
to set out details of the recognised corporate governance code that the Board of
Directors has decided to adopt, how the Company complies with that code and
provide reasons for any departures where it does not comply with that code.
Introduction
The Board fully endorses the importance of good corporate governance
and has adopted the 2018 Quoted Companies Alliance Corporate
Governance Code for Small and Mid-Sized Companies (the “QCA Code”),
which the Board believes to be the most appropriate corporate governance
code given the Company’s size, stage of development and that its shares
are admitted to trading on AIM. The QCA Code is a practical, outcome-
oriented approach to corporate governance that is tailored for small and
mid-size quoted companies in the UK and which provides the Company
with the framework and effective oversight to help ensure that a strong
level of governance is maintained.
In accordance with the QCA Code and AIM Rule 26, the report below
provides a high-level overview of how TMT has applied the principles of the
QCA Code and any areas in which the Company’s governance structures
and practices depart from or differ from the expectations of the QCA Code.
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PAGE CONTENT Chairman’s Corporate governance statement
Dear Shareholder,
As Chairman, it remains my responsibility, working with my fellow Board colleagues, to ensure that good standards
of corporate governance are embraced throughout the Company. I am therefore pleased to report that, in
accordance with the revisions made to the AIM Rules for Companies, the Board chose to adopt the QCA Code
effective 28 September 2018.
The adoption of the QCA Code supports the Company’s success by creating and supporting a strong corporate
governance environment for the benefit of the Company, its shareholders and its stakeholders.
The Board is committed to good governance across the business, at executive level and throughout its operations
and we believe that the QCA Code provides us with the right governance framework: a flexible but rigorous
outcome-oriented environment in which we can continue to develop our governance model to support our
business. The Company applies the QCA Code by seeking to address all of its requirements and ensuring that the
QCA Code is embedded in the Company’s operations and corporate culture.
As Chairman, I am responsible for leading an effective Board, fostering a good corporate governance culture,
maintaining open communications with shareholders and ensuring appropriate strategic focus and direction for
the Company.
A corporate culture bases on transparency, innovation and continuous improvement
The Board not only sets expectations for the business but works towards ensuring that strong values are set and
carried out by the Directors across the business. The Company’s corporate culture is based on the three values
of transparency, innovation and continuous improvement. These three values support the Company’s objectives,
strategy and business model.
Transparency
As a publicly quoted company that provides investors with a liquid route to investing in private companies,
transparency is fundamental to how we operate and communicate with our shareholders. The Company therefore
endorses a culture of transparency and seeks to provide investors with as much information as is practically
possible regarding its portfolio investments and its own operations as a company.
Innovation
Innovation supports the Company’s objective of investing in successful, long-term companies that have innovation
at the core of their own business models. In parallel, the Company seeks to apply an innovative approach to
how it manages its own operations. The Company therefore seeks to review its operations and capabilities on an
ongoing basis to ensure it can continue to successfully operate as an investing company and make best use of its
range of capabilities.
Continuous improvement
Continuous improvement reflects the Company’s objective of assessing its own performance and identifying areas
for improvement across its investment processes and operations on an ongoing basis.
We place a special focus on monitoring and promoting a healthy corporate culture, which the Company currently
enjoys. Nevertheless, there is always room for improvement and we will continue to pursue programmes that
keep us advancing in this regard.
The importance of engaging with our shareholders underpins the essence of the business, and we welcome
investors’ continued engagement with both the Board and executive team.
In the statements that follow, we explain our approach to corporate governance, how the Board and its
committees operate, and how we seek to comply with the QCA’s 10 principles.
Yuri Mostovoy
Chairman
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$1.23M
$6.59M
TOTAL INVESTMENT
(USD MILLION)
FAIR VALUE
(USD MILLION)
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SCENTBIRD IS A PERFUME, WELLNESS AND BEAUTY PRODUCT
SUBSCRIPTION SERVICE
The fair value of Scentbird (www.scentbird.com) in TMT’s
portfolio was revalued in 2020 using comparable company
revenue multiples, as a result of continued growth of the
business, coupled with the absence of recent equity capital
raises by (or partial exit transactions in) Scentbird.
Principle 1
Establish a strategy and business model
which promote long-term value for shareholders
The Company has been established for the purpose of making
investments in the Technology, Media and Telecommunications sector
(“TMT sector”) where the Directors believe there is potential for growth
and the creation of shareholder value.
INVESTMENT STRATEGY
TMT currently focuses on identifying attractive investment
opportunities in the following segments of the TMT sector:
BIG DATA AND
CLOUD SOLUTIONS
SAAS TOOLS
E-COMMERCE
MARKETPLACES
EDTECH
Among other features, TMT seeks to identify companies that have:
• Competent and motivated management
founders – managing high-growth companies
requires a rare combination of skills
• High growth potential – companies with a product
or service that can be scaled up globally
• Growth stage – we highly favour investing in
companies that are already generating revenues
(we have a typical minimum revenue threshold of
US$100,000 per month)
• Viable exit opportunities – when we invest, we
are already assessing potential exit scenarios
The Company has identified a number of challenges in
executing its strategy. We describe these risks and how
we manage them in Principle 4.
The Company believes it is well placed to deliver
shareholder value in the medium and long-term
through the application of its business model,
investment strategy and risk mitigation measures, as
described in this document.
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Principle 2
Seek to understand and meet
shareholder needs and expectations
The Company places great importance on
communication with shareholders and potential
investors, which it undertakes through a variety of
channels, including the annual report and accounts,
interim accounts, and regulatory announcements
that are available on the Company’s website www.
tmtinvestments.com. On request, hard copies of the
Company’s reports and accounts can be mailed to
shareholders and other parties who have an interest in
the Company’s performance.
The Directors review the Company’s investment
strategy on an ongoing basis. Any material change to
the Investing Policy will be subject to the prior consent
of the shareholders in a general meeting.
Developing a good understanding of the needs
and expectations of all elements of the Company’s
shareholder base is fundamental to the Company’s
progress. The Company has developed a number of
initiatives that it holds on a regular basis to meet this
need. As part of its regular dialogue with shareholders,
the Company seeks to understand the motivations
behind shareholder voting decisions as well as manage
shareholders’ expectations.
The Company’s shareholder base has grown in
numbers as well as become more diversified since its
admission to AIM in December 2010. The Company’s
shareholder base is comprised of institutional
investors, family offices, high net worth individuals and
retail investors.
On 17 February 2021, the Company announced the
appointment of Cenkos Securities plc (“Cenkos”)
as Joint Broker to TMT. Cenkos, together with the
Company’s other advisors, is arranging regular
meetings with UK institutional investors and private
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client brokers, seeking to broaden the Company’s
shareholder base. In addition, the Company engages
with the financial media on a regular basis in order to
generate interest among a wider number of potential
shareholders.
The Company continues to be committed to engaging
with retail investors by holding private investor events
arranged by the Company’s public relations adviser.
As part of these retail investor events, feedback
surveys are provided to attendees. The feedback
includes information on amount, type and quality of
information provided, presentation style and areas
of investor interest. Investor feedback collected is
incorporated into the planning of future events on an
ongoing basis. In view of the restrictions imposed by
the Covid-19 pandemic, the Company is making use
of online communications to maintain communication
with all types of investors. Interested parties are able
to subscribe for notifications of such future events by
contacting tmt@kinlancommunications.com.
Shareholder enquiries should be directed to Alexander
Selegenev, Executive Director at ir@tmtinvestments.
com, or to the Company’s advisors, contact details for
whom are included on the Company’s website.
Principle 3
Take into account wider stakeholder and social
responsibilities and their implications for long-term success
The Company’s business model is that of a publicly
quoted venture capital investing company investing
in the TMT sector. As such, it relies on the continued
growth of the TMT sector and access to good
investment opportunities. In relation to its wider
stakeholders, the Company needs to ensure that it:
• Maintains a good reputation as a credible investor in
its chosen investment sector;
•
Is fully compliant with all regulatory requirements;
• Takes into account its wider stakeholders’ needs;
and
• Takes into account its social responsibilities and
their implications for long-term success.
The Company regards its employees, advisors,
shareholders and investee companies, as well as the
technology and start-up community, to be the core of
its wider stakeholder group:
The technological and start-up community
The Company sources its investments from the global
technological universe of companies. All members
of the Company’s team maintain good relationships
with the global technological start-up community
through arranging meetings with prospective investees,
attending tech and tech investor events, and through
ongoing building of their professional networks.
This has led to a valuable level of accumulated
tech knowledge and access to suitably attractive
investments.
PROFESSIONAL ADVISORS
The Company’s professional advisors include its
Nominated Adviser (Nomad), Brokers, Accountants,
Auditors, and Legal and Financial PR advisors. The
Company works closely with its professional advisors
to ensure that it is fully compliant with all regulatory
requirements at all times.
REGULATORS
The Company is quoted on AIM and is subject to
regulation by the London Stock Exchange. The
Company is also subject to the UK City Code on
Takeovers and Mergers.
OTHER SUPPLIERS
The Company has banking relationships in place
to service its operations as well as a number of
administrative and other suppliers, such as the
Registrar and Company Secretary.
INTERNAL STAKEHOLDERS
The Company’s workforce
The Company’s investment performance relies on the
retention and incentivisation of its directors, employees
and consultants.
The Company has put in place the Bonus Plan for
Directors, officers, employees of, or consultants to, the
Company, as summarised in the Executive Director’s
Statement above. In November 2020, the Company
announced an extension to its Bonus Plan until 31
December 2024. Under the Company’s Bonus Plan,
subject to achieving a minimum hurdle NAV and high
watermark conditions, the team receives an annual
cash bonus equal to 7.5% of the net increases in
the Company’s NAV, adjusted for any changes in the
Company’s equity capital resulting from issuance
of new shares, dividends, share buy-backs and
similar corporate transactions. As announced on 25
November 2020, this has been increased from 7.5% to
10.0% with effect from 1 January 2021.
The Company engages with its stakeholders during the
course of its day-to-day activities, seeking feedback as
the occasion arises. The Company evaluates feedback
and assesses its incorporation into its decisions and
actions and, if appropriate, its operations, on an
ongoing basis. Details of the Company’s most regular
interactions with shareholders, through which the
Company gains feedback from shareholders, are
provided in the disclosures on Principle 2 above.
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Principle 4
Embed effective risk management, considering
both opportunities and threats, throughout the organisation
The Board has taken into account the relevant
provisions of the QCA Code and associated guidance in
formulating the systems and procedures which it has
put in place. The Board is aware of the need to conduct
regular risk assessments to identify the deficiencies in
the controls currently operating over all aspects of the
Company.
The Board regularly reviews the risks faced by the
Company and ensures the mitigation strategies
in place are the most effective and appropriate to
the Company. There may be additional risks and
uncertainties which are not known to the Board and
there are risks and uncertainties which are currently
deemed to be less material, which may also adversely
impact performance. It is possible that several adverse
events could occur and that the overall impact of
these events would compound the possible impact on
the Company. Any number of the below risks could
materially adversely affect the Company’s business,
financial condition, results of operations and/or the
market price of the ordinary shares.
The Directors are responsible for the Company’s
internal control framework and for reviewing its
effectiveness. Each year the Board reviews all controls,
including financial, operational and compliance
controls and risk management procedures. The
Directors are responsible for ensuring that the
Company maintains a system of internal control to
provide them with reasonable assurance regarding
the reliability of financial information used within
the business and for publication, and that assets are
safeguarded. There are inherent limitations in any
system of internal financial control. On the basis that
such a system can only provide reasonable but not
absolute assurance against material misstatement
or loss, and that it relates only to the needs of the
business at the time, the system as a whole was found
by the Directors at the time of approving the accounts
to be appropriate given the size of the business.
In determining what constitutes a sound system
of internal controls the Board considers:
• The nature and extent of the risks which they regard
as acceptable for the Company to bear within its
particular business;
• The threat of such risks becoming reality;
• The Company’s ability to reduce the incidence and
impact on its business if the risk crystallises; and
• The costs and benefits resulting from operative
relevant controls.
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The Company has identified the following principal risks in executing its strategy and addresses these
in the following ways:
KEY PEOPLE RISK
MITIGATION
The Company’s management team is relatively small
in number and the resignation or unavailability of
members of the management team could potentially
have an effect on the performance of the Company.
In order to mitigate this risk, the Company has put in
place a bonus plan. The Company ensures that the
databases it maintains for investment selection and
monitoring are shared across the senior management
team, reducing the possibility of loss of information
due to any one individual leaving or not being
available.
THE COMPANY INVESTS IN EARLY
STAGE COMPANIES
Investing in earlier stage companies is inherently
risky. These businesses may not successfully scale
up their technology or offering, may fail to secure the
necessary funding (attract further investment) and
may lose key personnel, amongst other risks.
MITIGATION
The TMT team is experienced in investing in earlier
stage technology companies and conducts extensive
analysis through its four-filter investment process,
as well as due diligence on the companies before it
makes any investment.
PORTFOLIO VALUATION MAY BE DOMINATED BY
SINGLE OR LIMITED NUMBER OF COMPANIES
MITIGATION
The success or failure of companies in our portfolio
in growing revenues and/or attracting further
investment is likely to have a significant impact on
their valuation, increasing or decreasing significantly.
These valuations are driven by market forces and are
outside of our control.
The Company has built and continues to build a
diversified portfolio across its core investment
sectors. The Company also sells partial stakes from
time to time in its more successful holdings in order
to reinvest in other companies and/or keep the
Company’s portfolio appropriately balanced.
LARGE NUMBER OF INVESTMENT OPPORTUNITIES
MITIGATION
The sectors in which the Company invests are
characterised by large numbers of new companies
being launched with similar business models and
across many countries. The sheer multitude of
companies can make identifying the best companies
a challenge in terms of analysis, the monitoring
of performance before investing and the overall
assessment of an investee’s potential.
The Company focuses on a small number of core
segments within the TMT sector in which it has
expertise and established professional networks,
in order to benefit from its competitive information
advantage.
Employing a filtering system that is designed to
identify companies with the best potential to become
scalable businesses with strong growth potential.
A special emphasis is placed on assessing the exit
opportunities for investments under consideration,
taking into account sector trends, valuations, M&A
trends and other relevant criteria.
SPEED OF TECHNOLOGICAL CHANGET
MITIGATION
Technological change is taking place at ever
increasing tempos. The speed of technological
innovation can make it harder to assess an investee
company’s potential, especially at an early stage of
development.
We address this challenge by typically investing in
companies that are already generating revenue and
therefore have a proven revenue generating business
model at the time of the Company’s initial investment.
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VALUATION OF INVESTMENTS
MITIGATION
The Company invests in companies that at times
operate in very competitive sectors. Given the nature
of the companies we invest in, it is not likely that all
will be a success. It is therefore inevitable that some
investments will require impairment.
To mitigate this risk, the Company reviews all its
investments, as a minimum, every six months. For each
of its portfolio companies, the Company maintains a
database registering data provided by the portfolio
companies that includes key performance indicators.
Through this process, the Company actively monitors
the performance of its portfolio and can affect fair
value revaluations as required, whilst remaining
focussed on managing a portfolio of growing
companies.
THE COMPANY HAS A SMALL NUMBER
OF SHAREHOLDERS WHO HOLD A LARGE
PROPORTION OF THE TOTAL SHARE CAPITAL
OF THE COMPANY
The decision by one or more of these shareholders to
dispose of their holding in the Company may have an
adverse effect on the Company’s share price.
MITIGATION
The Company seeks to build a mutual understanding
of objectives between itself and its shareholders.
The Company maintains regular contact with its
shareholders through meetings and presentations
held throughout the year.
NON-CONTROLLING POSITIONS IN
PORTFOLIO COMPANIES
MITIGATION
Non-controlling interests in portfolio companies may
lead to a limited ability to protect the Company’s
position in such investments.
As part of its investment in portfolio companies, the
Company will seek to secure board representation,
where possible. Fundamentally, however, the success
of a start-up depends greatly on the abilities of its
founder-managers. The Company therefore places
very high importance on investing in companies
backed by highly skilled, professional and trustworthy
founders.
PROCEEDS FROM THE REALIZATION OF INVESTMENTS MAY VARY SUBSTANTIALLY FROM YEAR TO YEAR
The timing of portfolio company realisations is uncertain and depends on factors beyond the Company’s
control. As an investing company that does not generate sales, the Company faces the potential challenge of
insufficient funds to meet its financial obligations or make new investments. Cash returns from the Company’s
portfolio are therefore unpredictable.
MITIGATION
To address this challenge, the Company focuses on investing in companies that it considers to have good
exit opportunities, via a trade sale, IPO or other exit route. This increases the likelihood of generating cash
returns, which can then be used to reinvest or satisfy financial obligations if necessary. The Company has
also conducted a number of equity fundraises since its admission to trading on AIM. As part of its fundraising
efforts, the Company has committed significant resources to developing its shareholder base. The Company
seeks to maintain sufficient cash resources to manage its ongoing operating and investment commitment and
undertakes regular working capital reviews.
The Company’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company.
The Company has low liquidity risk due to maintaining adequate cash reserves, by continuously monitoring
actual cash flows and by matching the maturity profiles of financial assets and current liabilities.
The Company believes it is well placed to deliver shareholder value in the medium and long-term through the
application of its business model and investment strategy and risk mitigation, as described above.
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Principle 5
Maintain the board as a well-functioning,
balanced team led by the chair
The Board is responsible to shareholders for the
overall management of the Company and may
exercise all the powers of the Company, subject to the
provisions of relevant statutes and any directions given
by special resolution of the shareholders.
The Board, led by the Chairman, consists of four
directors, three of whom are Non-executive.
The Board comprises of the Non-executive Chairman
(Yuri Mostovoy), two Non-executive Directors (James
Joseph Mullins and Petr Lanin) and the Executive
Director (Alexander Selegenev). James Mullins and Petr
Lanin, both Non-executives, are considered by the
Board to be independent. Both James Mullins and Petr
Lenin were appointed to the Board in December 2010.
Whilst they have now served as independent Non-
executive Directors for over ten years, the QCA Code
states that the fact that a director has served for over
nine years does not automatically affect independence.
The Board is satisfied that both James Mullins and Petr
Lanin continue to be free from any business or other
relationship which could interfere with the exercise
of their independent judgement. In line with the QCA
Code recommended good practice, both James Mullins
and Petr Lanin will now be subject to annual re-election
on an ongoing basis.
experience, possessing the necessary mix of
experience, skills, personal qualities and capabilities
to deliver the strategy of the Company for the benefit
of the shareholders over the medium to long-term
(details of which are set out in the responses to
Principle 6 of the QCA Code below).
The Non-executive Chairman is required to dedicate
at least seven days every month to his duties with
the Company. The Executive Director is expected to
dedicate the substantial part of his time to his duties
with the Company. The Non-executive Directors are
normally required to dedicate at least two days a
month to their duties with the Company.
The Board delegates certain responsibilities to
its Committees, so that it can operate efficiently
and give an appropriate level of attention and
consideration to relevant matters. The Company has
an Audit Committee, a Remuneration Committee
and a Nomination Committee, all of which operate
within a scope and remit defined by specific terms of
reference determined by the Board. The Board and its
Committees are provided with high quality information
in a timely manner to facilitate proper assessment of
the matters requiring a decision or insight.
The Board considers that it has the necessary
industrial, financial, public markets and governance
The Directors have access to the Company’s advisers
and are able to obtain advice from other external
bodies as and when required.
Principle 6
Ensure that between them the directors have
the necessary up-to-date experience, skills and capabilities
The Board considers that it has the necessary industrial, financial, public markets and governance experience,
possessing the necessary mix of experience, skills, personal qualities and capabilities to deliver the strategy of the
Company for the benefit of the shareholders over the medium to long-term. The Directors’ individual experience
is set out in the Board of Directors section of this report.
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TMT Investments Annual Report and Accounts 2020
Principle 7
Evaluate board performance based on clear
and relevant objectives, seeking continuous improvement
The Company conducts evaluation of the effectiveness
of its Board and committees and that of the Executive
and Non-executive Directors’ performance in
accordance with the QCA Code. The results of such
reviews are used to determine whether any alterations
are needed or whether any additional training would
be beneficial. After considering different alternatives
the Board made the decision to undertake the
evaluations internally.
The third such formal evaluation for the year ended
December 2020 took place in January 2021. The
previous such evaluation had been for the year ended
December 2019, which started in January 2020 and
concluded in March 2020. Compared to the previous
year, the responses to the various questionnaires that
formed the evaluation showed similar and positive
results.
The evaluations involved both a numeric and discursive
self-assessment by each Board member, in response
to a questionnaire, on the role and functioning of the
Board and its members and Committees. Responses
were collated and fed back to the Board at its meeting
held in March 2021.
In general, the responses found the Board, its
members and Committees to be operating effectively.
We provide further information below on the various
evaluations that took place and their outcomes.
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Principle 7
BOARD EFFECTIVENESS
AUDIT COMMITTEE EFFECTIVENESS
The Board effectiveness evaluation involved the
completion of a detailed questionnaire by Board
directors. The following items and their respective
criteria were assessed as a measure of effectiveness at
Board level, whereby all Board members were asked
to provide a rating (on a scale of 1 – 5). The evaluation
addressed the following items:
• Board composition – Evaluating the Board’s right
balance of skills, knowledge and experience to
govern the Company effectively.
• Board engagement – How timely is the Board’s
engagement with its internal and external
stakeholders
• Governance structure – Is the Board’s Committee
structure clear and providing members with
assurance to discharge their duties effectively.
• Risk management – How well is the Board
addressing the key business risks and adhering to
internal controls;
• Board agenda and forward plan – Is the Board’s
meeting agenda and forward plan ensuring that
members are focusing on the right areas at the
right time.
• Director’s self-assessment of awareness of current
issues faced by the Company;
• Board reporting – How comprehensive, accurate,
easy to understand, timely and appropriate is the
information received by Board members
• Board dynamics – How effectively do Board
members operate as a team, striking the right
balance between trust and challenge.
• Personal development – how well are development
needs identified and satisfy requirements
• Chair’s leadership – How effective is the Chair as a
leader of the Board.
• Performance evaluation – Are the Board members
continually improving as a group and as individuals.
• Succession planning for Board members – How
robust is succession planning
The Board effectiveness evaluation concluded that the
Board was operating effectively.
As part of the Audit Committee evaluation exercise,
the two members of the Audit Committee completed
a self-assessment questionnaire. Each member was
asked to rate (on a scale of 1 – 5) the extent to which
the Audit Committee is properly constituted, with regard
to the knowledge, behaviours and processes relevant
to the effective functioning of the Audit Committee. The
evaluation concluded the committee was functioning
effectively, taking into consideration as well the updated
QCA Audit Committee Guide 2019.
REMUNERATION COMMITTEE EFFECTIVENESS
As part of the Remuneration Committee evaluation,
the two members of the Remuneration Committee
completed a self-assessment questionnaire. Each
member was asked to rate (on a scale of 1 – 5) the
extent to which the Remuneration Committee is
properly constituted, with regard to the knowledge,
behaviours and processes relevant to the correct
functioning of the Remuneration Committee. The
evaluation concluded the committee was functioning
effectively, taking into consideration as well the
updated QCA Remuneration Committee Guide 2019.
NOMINATION COMMITTEE EFFECTIVENESS
The Nomination Committee did not convene during the
financial year ended 31 December 2020 as there were
no new Board or senior management appointments
during the year.
By way of evaluation of succession planning, all Board
members were asked to respond to a questionnaire
which reviewed succession planning, the processes
by which the Company determines board and
other senior appointments and the professional
development of the Company’s employees and
management. The evaluation concluded that the
processes in place for succession planning are
adequate in view of the size and scope of operations of
the Company.
The Nomination committee works closely with the
Board to identify the skills, experience, personal
qualities and capabilities required for any next stages
in the Company’s development, linking the Company’s
strategy to future changes on the Board.
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Principle 7
INDIVIDUAL EFFECTIVENESS
The evaluation addressed the following items:
The individual effectiveness evaluation involved the
completion of a detailed questionnaire. The following
items and their respective criteria were assessed as
a measure of effectiveness at the individual level,
whereby all Board members were asked to provide a
rating (on a scale of 1 – 5). The evaluation concluded
that all Board members were operating effectively.
• Relationships with the Board of directors
and major shareholders
• Knowledge of the Company’s business as it
continues to evolve
• Active engagement in robust discussions during
and between board meetings
• Personal accountability for promoting the success
of the Company
• An open and questioning approach to reviewing
risk in the organisation
• Strategic planning, financial management, people
management and relationships, and conduct
of business
• Assessing the time commitment required from
each director
• Development, training or mentoring needs
of individual directors
The Board reviews on an ongoing basis the human
resource needs of the Company and the expected
availability of its directors, employees and consultants.
The review seeks to identify any potential changes in
the make-up of the Board and senior management,
in order to allow sufficient planning to appoint a
replacement or other suitable arrangements.
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Principle 8
Promote a corporate culture that is based
on ethical values and behaviours
The Board has very regular interaction with Company
employees, thereby ensuring that ethical values and
behaviours are recognised and respected. Given the
size of the Company, the Board believes this is the
most efficient way of ensuring that a good corporate
culture is maintained, which the Board deems to be
good and healthy.
The Company’s approach to governance, and how
that culture is consistent with both the Company’s
objectives and the creation of long-term stakeholder
value, is set out in the Chairman’s statement on
corporate governance at the start of this document.
The Board not only sets expectations for the business
but works towards ensuring that strong values are
set and carried out by the Directors across the
business. The Board places significant importance on
the promotion of ethical values and good behaviour
within the Company and takes ultimate responsibility
for ensuring that these are promoted and maintained
throughout the organisation and that they guide the
Company’s business objectives and strategy. The Board
ensures sound ethical practices and behaviours are
deployed at Company board meetings.
The Company’s corporate culture is based on the three
values of transparency, innovation and continuous
improvement. These three values support the
Company’s objectives, strategy and business model.
These are explained in more detail in the Chairman’s
corporate governance statement, which reflects how
the Company’s corporate culture is consistent with the
Company’s objectives, strategy and business model.
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Principle 9
Maintain governance structures and processes that are fit
for purpose and support good decision-making by the board
Yuri Mostovoy, as Chairman, is responsible for leading an
effective Board, fostering a good corporate governance
culture and ensuring appropriate strategic focus and
direction.
Alexander Selegenev, as Executive Director, has overall
responsibility for managing the group’s business and
promoting, protecting and developing the investment
business of the Company. Alexander also has active
responsibility for the implementation of and adherence
to the financial reporting procedures adopted by
the Company and the Company’s financial reporting
obligations under the AIM Rules.
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Principle 9
THE BOARD’S COMMITTEES
NOMINATION COMMITTEE
The Board is assisted by various standing committees
which report regularly to the Board. The membership
of these committees is regularly reviewed by the
Board. When considering committee membership and
chairmanship, the Board aims to ensure that undue
reliance is not placed on particular Directors. The terms
of reference of the Audit Committee, Remuneration
Committee and Nomination Committee provide that no
one other than the particular committee chairman and
members may attend a meeting unless invited to attend
by the relevant committee.
The Company has established a Nomination Committee,
which considers the appointment of directors to the
Company’s Board and makes recommendations in this
respect. The Nomination Committee currently comprises
James Mullins and Alexander Selegenev, with James
Mullins appointed as Chairman.
MATTERS RESERVED FOR THE BOARD
The Board of Directors of the Company meets at least
four times per year, or more often if required. The matters
reserved for the attention of the Board include inter alia:
Details of the committees of the Board are set out below.
AUDIT COMMITTEE
The Audit Committee currently comprises James Mullins
and Petr Lanin being non-executive members of the
Board, with James Mullins appointed as chairman. The
Audit Committee should meet at least twice a year. The
committee is responsible for the functions recommended
by the QCA Code including:
• Review of the annual financial statements and interim
reports prior to approval, focusing on changes in
accounting policies and practices, major judgemental
areas, significant audit adjustments, going concern and
compliance with accounting standards, AIM and legal
requirements;
• Receive and consider reports on internal financial
controls, including reports from the auditors and
report their findings to the Board;
• Consider the appointment of the auditors and their
remuneration including the review and monitoring of
independence and objectivity;
• The preparation and approval of the financial
statements and interim reports, together with
the approval of dividends, significant changes in
accounting policies and other accounting issues;
• Board membership and powers, including the
appointment and removal of Board members, and
determining the terms of reference of the Board and
establishing and maintaining the Company’s overall
control framework;
• Approval of major communications with shareholders,
including any shareholder circulars and financial
results required to be announced pursuant to the AIM
Rules or the Market Abuse Regulation;
• Senior management and Board appointments and
remuneration, contracts, approval of bonus plans, and
grant of share options;
• Financial matters including the approval of the budget
and financial plans, and changes to the Company’s
capital structure, business strategy and investing policy
(subject to shareholder approval); and
• Other matters including regulatory and legal
• Meet with the auditors to discuss the scope of their
audit, issues arising from their work and any matters
the auditors may wish to raise;
compliance.
SHARE DEALINGS
• Develop and implement policy on the engagement of
the external auditor to supply non-audit services; and
• Review the Company’s corporate review procedures
and any statement on internal control prior to
endorsement by the Board.
REMUNERATION COMMITTEE
The Remuneration Committee currently comprises James
Mullins and Petr Lanin, with James Mullins appointed as
chairman. The committee has the following key duties:
• Reviewing and recommending the emoluments,
pension entitlements and other benefits of any
Executive Directors and other senior executives; and
• Reviewing the operation of any share option schemes
and/or bonus plans implemented by the Company and
the granting of options and/or bonus awards under
such schemes.
The Company has adopted a model code for share
dealings in its ordinary shares which is appropriate for
an AIM company, including compliance with Rule 21 of
the AIM Rules for Companies relating to Directors and
employees’ dealings in the Company’s shares. Jersey
law contains no statutory pre-emption rights on the
allotment and issue by the Company of equity securities
(being shares in the Company, or rights to subscribe
for, or to convert securities into, such shares). However,
the Company’s articles of association contain certain
provisions as to Directors’ authority to issue equity
securities and pre-emption rights on issues of equity
securities by the Company, further details of which are
set out in paragraphs 8 and 9 of Part 3 of the Company’s
AIM Admission Document which can be found on the
Company’s website.
As the Company grows, the directors will ensure that the
governance framework remains in place to support the
development of the business.
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Principle 10
Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
The Company communicates with shareholders
through the annual report and accounts, regulatory
announcements, the annual general meeting and
one-to-one meetings with large existing shareholders
or potential investors. A range of corporate
information (including all Company announcements
and presentations) is also available on the Company’s
website. In addition, the Company seeks to maintain
dialogue with shareholders through the organisation
of shareholder events, and employee stakeholders are
regularly updated on the development of the Company
and its performance.
AUDIT COMMITTEE REPORT
The Company has established an audit committee,
which comprises James Mullins (Chairman) and Petr
Lanin. The audit committee’s main functions include,
inter alia, reviewing and monitoring internal financial
control systems and risk management systems on which
the Company is reliant, considering annual and interim
accounts and audit reports, making recommendations
to the Board in relation to the appointment and
remuneration of the Company’s auditors and monitoring
and reviewing annually their independence, objectivity,
effectiveness and qualifications.
The Audit Committee met formally twice during 2020 to
approve the 2020 interim report and 2019 report and
accounts.
REMUNERATION COMMITTEE REPORT
The Company has established a remuneration
committee, which comprises James Mullins (Chairman)
and Petr Lanin. The remuneration committee met
formally twice during 2020, to discuss and approve
the extension of the bonus plan to 31 December 2024
and new fees for directors, staff and advisers from 1
January 2021.
The Company seeks to publicly disclose the outcomes
of all shareholder votes in a clear and transparent
manner, although voting decisions (including votes
withheld or abstentions) are not posted on the
Company’s website or contained in the announcement
released via RNS. The outcomes of all shareholder
votes are publicly notified to the market via RNS and
are available for review in the Company’s regulatory
announcements section of its AIM Rule 26 website.
If a significant proportion of independent votes
were to be cast against a resolution at any general
meeting, the Board’s policy would be to engage with
the shareholders concerned in order to understand
the reasons behind the voting results. Following this
process, the Board would make an appropriate public
statement regarding any different action it has taken,
or will take, as a result of the vote.
The Company’s financial reports for the last five years
can be found on the Investor Relations sections of the
TMT Investments Plc website www.tmtinvestments.com
Notices of General Meetings of the Company for the
last five years can be found on the Investor Relations
sections of the TMT Investments Plc website www.
tmtinvestments.com
All of the Company’s RNS announcements, including
those confirming voting results, can be found on the
Investor Relations sections of the TMT Investments Plc
website www.tmtinvestments.com
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$0.40M
$3.62M
TOTAL INVESTMENT
(USD MILLION)
FAIR VALUE
(USD MILLION)
PANDADOC IS A PROPOSAL AUTOMATION AND CONTRACT
MANAGEMENT SOFTWARE COMPANY.
In August 2020, PandaDoc, a proposal automation and
contract management software provider (www.pandadoc.
com), completed a new equity funding round. The
transaction represented a revaluation uplift of US$1.41
million (or 63.5%) in the fair value of TMT’s investment in
PandaDoc, compared to the previous reported amount as
of 31 December 2019.
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TMT Investments Annual Report and Accounts 2020
Directors’ Report
The Directors present their report and
audited financial statements of the Company
for the year ended 31 December 2020.
PRINCIPAL ACTIVITY AND REVIEW OF THE
BUSINESS
TMT Investments plc (“TMT Investments” or the
“Company”) was incorporated under the laws of Jersey.
The Company has been established for the purpose
of making investments in the TMT sector where the
Directors believe there is a potential for growth and the
creation of shareholder value. The Company primarily
targets companies operating in markets that the
Directors believe have strong growth potential and having
the potential to become multinational businesses. The
Company can invest in any region of the world.
RESULTS AND DIVIDENDS
The gain for the year amounted to US$75,108,677
which includes a profit on changes in fair value of
financial assets at FVPL (“Fair Value through profit and
loss”) of US$82,294,256.
Further information on the Company’s results
and financial position is included in the financial
statements.
Given the quantum of further investment opportunities
available to the Company, the board has decided that it
will not recommend a final dividend (2019: nil).
COMPANY LISTING
TMT is traded on the AIM market (“AIM”) of the
London Stock Exchange. The Company’s ticker is TMT.
Information required by AIM Rule 26 is available in the
‘Investor Relations’ section of the Company’s website at
www.tmtinvestments.com.
BOARD MEETINGS
There were 6 Board meetings held in 2020. Two
meetings of the Audit Committee and two meetings of
the Remuneration Committee were held in 2020. The
number of meetings attended by the Directors is set
out below.
Director
Board Meetings
Audit Committee
Meetings
Remuneration
Committee Meetings
Yuri Mostovoy
Alexander Selegenev
Petr Lanin
James Mullins
Total Meetings
6
5
6
6
6
2
2
2
2
2
2
CHANGES IN SHARE CAPITAL
SUBSTANTIAL SHAREHOLDINGS
The Company has one class of ordinary share that
carries no right to fixed income, and each share
carries the right to one vote at general meetings of the
Company. As at 31 December 2020 and the date of
this report, the Company’s issued share capital consists
of 29,185,831 ordinary shares of no par value each in
the Company.
The Directors are aware of the following shareholdings
of 3% or more of the issued share capital of the
Company as of 24 March 2021.
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Shareholders
Alexander Morgulchik, German Kaplun, Artemii Iniutin, Nelli Morgulchik (via
Macmillan Trading Company Limited)
Number of
ordinary shares
% of issued
ordinary share
capital
6,817,063
23.36%
German Kaplun (via Ramify Consulting Corp)
5,348,980
18.33%
Andrey Kareev (via Wissey Trade & Invest Ltd)
5,000,000
17.13%
Zaur Ganiev
Nika Kirpichenko (via Eclectic Capital Limited)
Dmitry Kirpichenko (via Menostar Holdings Limited)
Canaccord Genuity Group Inc.
Artemii Iniutin (via Merit Systems Inc.)
Others
Total
CONCERT PARTY
2,443,810
1,800,000
1,790,000
1,484,996
1,191,218
8.37%
6.17%
6.13%
5.09%
4.08%
3,309,764
11.34%
29,185,831
100.00%
A concert party, as defined in the City Code on Takeovers and Mergers (the “Code”), currently exists, consisting of
the following shareholders:
Shareholder (legal holder)
Beneficial holder
(if different to legal holder)
No. of Ordinary
% of issued
Shares
share capital
Macmillan Trading Company
Limited (“Macmillan”)
Ramify Consulting Corp.
(“Ramify”)
Wissey Trade & Invest Ltd
(“Wissey”)
Alexander Morgulchik 45.05%, German
Kaplun 37.17%, Artemii Iniutin 9.90%, Nelli
6,817,063
23.36%
Morgulchik 7.88%
German Kaplun
5,348,980
18.33%
Andrey Kareev
5,000,000
17.13%
Eclectic Capital Limited (“Eclectic”)
Nika Kirpichenko
1,800,000
6.17%
Menostar Holdings Limited
(“Menostar”)
Dmitry Kirpichenko
1,790,000
6.13%
Merit Systems Inc.
Artemii Iniutin
1,191,218
4.08%
Natalia Inyutina (Adult daughter
of Artemii Iniutin)
Vlada Kaplun (Adult Daughter of
German Kaplun)
Marina Kedrova (Adult Daughter
of German Kaplun)
Artemii Iniutin
Total
727,156
2.49%
363,578
1.25%
363,578
1.25%
241,939
0.83%
23,643,512
81.01%
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Directors’ Report
Continued
Since September 2013, when the Company became subject to the Code, the concert party has been interested in, in aggregate,
more than 50% of the Company’s issued share capital at all times.
The total direct and indirect interest in TMT by the concert party’s beneficial holders are now as follows:
Beneficial holder
German Kaplun
Andrey Kareev
Alexander Morgulchik
Artemii Iniutin
Nika Kirpichenko
Dmitry Kirpichenko
Natalia Inyutina
Nelli Morgulchik
Vlada Kaplun
Marina Kedrova
Total
NOTES:
Number of
% of issued
ordinary
ordinary share
shares
7,882,664
5,000,000
3,071,087
2,108,046
1,800,000
1,790,000
727,156
537,403
363,578
363,578
capital
27.01%
17.13%
10.52%
7.22%
6.17%
6.13%
2.49%
1.84%
1.25%
1.25%
23,643,512
81.01%
The majority of the ordinary shares held by Eclectic were previously held by Menostar, who invested in the Company at the
time of its Admission. As announced by the Company on 22 June 2016, the Company was notified that Menostar no longer
had an interest in the Company and that Eclectic was interested in 4,650,000 ordinary shares. As announced on 17 October
2019, Eclectic notified the Company that it had sold ordinary shares such that it is interested in 2,800,000 ordinary shares
and Menostar notified the Company that it had acquired 1,790,000 ordinary shares. The beneficial owner of Eclectic is Nika
Kirpichenko who is the wife of Dmitry Kirpichenko, the beneficial owner of Menostar. Wissey and Menostar both invested in
the Company on its Admission and, along with Eclectic, have invested in and/or been otherwise involved with other business
ventures associated with the two founders of the Company Alexander Morgulchik and German Kaplun.
The Company will update this disclosure in future annual financial reports and, if relevant, via RNS announcements.
DIRECTORS
During the financial year the following Directors held office:
THE DIRECTORS’ FEES FOR 2020 WERE AS
FOLLOWS:
Yuri Mostovoy
Non-executive Chairman
Director
Directors’ fees
Alexander Selegenev
Executive Director
James Joseph Mullins
Petr Lanin
Independent Non-Executive
Director
Independent Non-Executive
Director
Yuri Mostovoy
US$50,000
Alexander Selegenev
US$100,000
James Joseph Mullins
US$25,798
Petr Lanin
US$10,000
The minimum initial allocation
of the Bonus Pool accrued
for the period ended 31
December 2020 among
the Directors who are
predetermined participants of
the Bonus Plan is as follows:
Director
Alexander Selegenev
Yuri Mostovoy
The minimum initial
allocation of the
Bonus Pool (%)
The minimum initial
allocation of the
Bonus Pool (US$)
16.5%
5.0%
1,004,346
304,347
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SUBSEQUENT EVENTS POST THE PERIOD END
In January 2021, the Company invested an additional
£135,825 (via acquisition of existing shares) in 3S Money, a
UK-based online banking service focusing on international
trade (www.3s.money).
In January 2021, the Company invested an additional
US$228,933 (via acquisition of existing shares) in Workiz, a
SaaS solution for the service field industry (www.workiz.com).
In February 2021, the Company invested an additional
US$2,000,000 in Affise, a performance marketing SaaS
solution (https://affise.com/en/).
In February 2021, the Company invested an additional
£399,997 in HealthyHealth, an insurtech and healthtech
company (www.healthyhealth.com).
In March 2021, the Company invested US$1,000,000 in
3DLook Inc., a body scanning and measuring technology
solution for the online retail industry (www.3dlook.me).
These events after the reporting period are not reflected in
the NAV and/or the financial statements as at 31 December
2020.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND THE
FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual
Report and Accounts in accordance with applicable law
and International Financial Reporting Standards (“IFRSs”) as
adopted by the European Union.
The Companies (Jersey) Law 1991 (as amended) (“Companies
Law”) requires the Directors to prepare financial statements
for each financial year. 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 enable them to ensure that its financial
statements comply with the Companies Law. They have
general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the preparation of the
Directors’ report and corporate governance statement. The
Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in Jersey governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
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 the profit or loss
for that period. In preparing these financial statements, the
Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable IFRSs as adopted by the
European Union (“EU”) 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.
DIRECTORS’ RESPONSIBILITY STATEMENT
Each of the Directors, whose names are listed in the Directors
section above confirm that, to the best of each person’s
knowledge and belief:
•
•
the financial statements, prepared in accordance with
IFRSs as adopted by the EU, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company; and
the Directors’ report contained in the annual report
includes a true and fair review of the development and
performance of the business and the position of the
Company.
GOING CONCERN
The Company’s business activities together with the factors
which may impact its activities are described in the relevant
sections above. The financial position of the Company
is described in the financial statements and notes to the
financial statements.
In the year to date, the global economy was affected by the
COVID-19 pandemic and related market volatility. Whilst
the Company’s operations and liquidity position were not
directly impacted, the principal activity of the Company was
naturally affected through the impact on and therefore
potential performance of the Company’s investee companies.
Accordingly, the potential negative effect of COVID-19 and
related market volatility, while potentially affecting the future
fair value of the Company’s investments, does not impact the
Company’s liquidity position.
The Directors confirm that, after giving due consideration
to the financial position and expected cash flows of the
Company; they have a reasonable expectation that the
Company will have adequate cash resources to continue in
operational existence for the foreseeable future, and for at
least one year from the date of approval of these financial
statements and they have therefore adopted the going
concern basis in preparing the financial statements.
AUDITORS
Each of the persons who is a Director at the date of
approval of this annual report confirms that:
• so far as the Directors are aware, there is no relevant audit
information of which the Company’s auditors are unaware;
and
•
the Directors have taken steps that they ought to have
taken to make themselves aware of any relevant audit
information and to establish that the auditors are aware of
that information.
On behalf of the Board of Directors
Alexander Selegenev
Executive Director
24 March 2021
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TMT Investments Annual Report and Accounts 2020
Independent
Auditor’s report
to the members of TMT investments Plc for the year ended 31 December 2020
OPINION
BASIS FOR OPINION
We have audited the financial statements of TMT Investments
plc (the ‘company’) for the year ended 31 December 2020
which comprise the Statement of Comprehensive Income,
the Statement of Financial Position, the Statement of Cash
Flows, the Statement of Changes in Equity and the notes to
the financial statements, including a summary of significant
accounting policies. The financial reporting framework that
has been applied in the preparation of the company’s financial
statements is applicable law and International Financial
Reporting Standards (IFRSs), as adopted by the European
Union.
IN OUR OPINION, THE FINANCIAL STATEMENTS:
• give a true and fair view of the state of company’s affairs
as at 31 December 2020 and of the company’s profit and
cash flows for the year then ended;
• have been properly prepared in accordance with IFRSs as
adopted by the European Union; and
• have been prepared in accordance with the requirements
of the Companies (Jersey) Law 1991.
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that
the director’s use of the going concern basis of accounting in
the preparation of the financial statement is appropriate.
Our evaluation of the director’s assessment of the entity’s
ability to continue to adopt the going concern basis of
accounting included:
Evaluation of management assessment
Key observations
We evaluated the Directors’ going concern assessment
and performed the following procedures:
At 31 December 2020, the Company held cash of £39,004.288
at bank.
• We assessed the appropriateness of the cash flow
forecasts in the context of the Company’s 2020
financial performance and evaluated the Directors’
sensitivities performed against this forecast.
• We evaluated the key assumptions in the forecast,
which were consistent with our knowledge of the
business and considered whether these were
supported by the evidence we obtained.
• We compared the prior year forecast against current
year actual performance to assess management’s
ability to forecast accurately.
• We also reviewed the disclosures relating to going
concern basis of preparation and found that these
provided an explanation of the Directors’ assessment
that was consistent with the evidence we obtained.
The Company’s cash flow forecasts to 31 March 2022 (‘the
going concern period’) have been approved by the Board.
These are prepared based on certain key assumptions,
against which plausible sensitivities have been applied. These
included considering further investments being made along
with the ongoing operating costs.
The forecast shows that the Company has at all times
available cash and liquidity to meets its liabilities as they fall
due.
Based on the audit procedures performed we concluded
that the Company has appropriately adopted the going
concern basis of preparation. Further, we did not identify any
material disclosures that should be included regarding any
material uncertainty in respect of the going concern basis of
preparation.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the entity’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
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OUR APPROACH TO THE AUDIT
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain.
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account an understanding
of the structure of the company, its activities, the accounting
processes and controls, and the industry in which it operates.
Our planned audit testing was directed accordingly and was
focused on areas where we assessed there to be the highest risk
of material misstatement.
The audit testing included 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 and the
management of specific risk.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant findings, including any
significant deficiencies in internal control that we identify
during the audit.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgment, 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. This is not a complete list of all risks identified
during our audit.
Key audit matters
How our audit addressed the key audit matters
Valuation of investments
Our audit work included, but was not restricted to:
The company is investing in pre-growth companies in
a very competitive industry. Given the nature of the
companies being invested in, it is not likely that all will be
a success. The value of the investment is one of the most
material balances in the company’s financial statements.
These investments are carried at fair value in the financial
statements and the valuation is based on significant
judgement and assumptions. Due to the nature of the
company’s activities, there is a risk that the fair value has
not been appropriately applied for all of the investments
and therefore that the value of investments held at year-
end may be misstated.
• We obtained an understanding of management’s
assessment of the investment valuations and obtained an
understanding of how they are performed.
• This involved evaluating whether the method chosen was
in accordance with published guidance and reviewing
and challenging the assumptions applied to the valuation
inputs.
• We verified and benchmarked key inputs and estimates
to independent information from our own research and
against metrics from the investments.
• Where appropriate, we have performed sensitivity analysis
on the valuation calculations.
• Alternative valuations methods were considered and
discussed with management to provide alternative views
on the value of the investments.
• We agreed the purchase and sale of investments
to supporting evidence of the transaction and cash
movements on a sample basis and recalculated the
realised gains and losses on the sale of investments for
both the individual transactions on a sample basis and for
the total portfolio.
The Company’s accounting policy on fixed asset investments
held at fair value through profit or loss is shown in note 2.6 of
the Financial Statements and related disclosures are included
in note 10.
KEY OBSERVATIONS
From our audit work undertaken, we did not identify any
material misstatement in the investment valuations included
in the financial statements.
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TMT Investments Annual Report and Accounts 2020
Independent Auditor’s Report
Continued
OUR APPLICATION OF MATERIALITY
The scope and focus of our audit was influenced by our
assessment and application of materiality. We apply the
concept of materiality both in planning and performing our
audit, and in evaluating the effect of misstatements on our
audit and on the financial statements.
We define financial statement materiality as the magnitude by
which misstatements, including omissions, could reasonably
be expected to influence the economic decisions taken on the
basis of the financial statements by reasonable users.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine
the extent of testing needed. Importantly, misstatements
below these levels will not necessarily be evaluated as
immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial
statements as a whole.
Materiality Measure
Company
Overall materiality
We determined materiality for the financial statements as a
whole to be £2,765,000.
How we determine it
Based on 1.5% of gross assets held at 31 December 2020.
Rationale for benchmarks applied
Performance materiality
Specific materiality
Reporting threshold
We believe that these benchmarks are appropriate due to
the investments being the key driver of the company and the
nature of its activities.
On the basis of our risk assessment, together with our
assessment of the company’s control environment, our
judgement is that performance materiality for the financial
statements should be 75% of materiality, and was set at
£2,073,750
We also determine a lower level of specific materiality
for certain areas such as Director’s remuneration. Area
materiality for the disclosure of the cash element of Director’s
remuneration has been set at £2,000 and performance
materiality of £1,000.
We agreed with the Audit Committee that we would report
to them all misstatements over £11,150 (5% of overall
materiality) identified during the audit, as well as differences
below that threshold that, in our view, warrant reporting on
qualitative grounds. We also report to the Audit Committee
on disclosure matters that we identified when assessing the
overall presentation of the Financial Statements.
OTHER INFORMATION
The other information comprises the information included in
the annual report other than the financial statements and our
Auditor’s report thereon. The directors are responsible for the
other information contained within the annual report. 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.
inconsistent with the financial statements or our knowledge
obtained in the course of 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 this gives rise to a material
misstatement in the financial statements themselves.
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.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
We have nothing to report in this regard.
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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
directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies (Jersey) Law 1991 requires
us to report to you if, in our opinion:
• proper accounting records have not been kept by the
company, or proper returns adequate for our audit have
not been received from branches not visited by us; or
•
the financial statements 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.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the statement of directors’
responsibilities above, 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 have no realistic
alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
• Based on our understanding of the Company and the
industry in which it operates, we identified that the
principal risks of non-compliance with laws and regulations
related to the acts by the Company which were contrary
to applicable laws and regulations including fraud and we
considered the extent to which non-compliance might
have a material effect on the Financial Statements. We also
considered those laws and regulations that have a direct
impact on the preparation of the Financial Statements
such as Part 16 of Companies (Jersey) Law 1991. We
evaluated management’s incentives and opportunities
for fraudulent manipulation of the Financial Statements
(including the risk of override of controls), and determined
that the principal risks were related to inflated investment
valuations and profit.
• Audit procedures performed included: review of the
Financial Statement disclosures to underlying supporting
documentation, review of correspondence with legal
advisors, and enquiries of management in so far as they
related to the Financial Statements, and testing of journals
and evaluating whether there was evidence of bias by the
Directors that represented a risk of material misstatement
due to fraud.
There are inherent limitations in the audit procedures
described above and the further removed non-compliance
with laws and regulations is from the events and transactions
reflected in the Financial Statements, the less likely we would
become aware of it. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members, as
a body, in accordance with Article 113A of the Companies
(Jersey) Law 1991. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other
than the Company and the Company’s members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Daniel Hutson
(Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
24 March 2021
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TMT Investments Annual Report and Accounts 2020
Financial
Statements
STATEMENT OF COMPREHENSIVE INCOME
Gains on investments
Dividend income
Total investment income
Expenses
Bonus scheme payment charge
Administrative expenses
Other operating expenses
Operating gain
Net finance income
Gain before taxation
Taxation
Notes
For the year
ended 31/12/2020
For the year
ended 31/12/2019
3
6
5
7
8
USD
USD
82,259,735
21,275,927
129,897
73,517
82,389,632
21,349,444
(6,086,948)
(2,007,694)
(1,255,451)
(1,174,466)
-
(13,079)
75,047,233
18,154,205
61,444
235,306
75,108,677
18,389,511
-
-
Gain attributable to equity shareholders
75,108,677
18,389,511
Total comprehensive income for the year
75,108,677
18,389,511
Gain per share
Basic and diluted gain per share (cents per share)
9
257.35
63.01
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STATEMENT OF FINANCIAL POSITION
Non-current assets
Notes
At 31 December
At 31 December
2020
USD
2019
USD
Financial assets at FVPL
10
144,803,154
91,207,190
Total non-current assets
144,803,154
91,207,190
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
11
12
13
487,838
711,957
39,004,288
11,700,074
39,492,126
12,412,031
184,295,280
103,619,221
6,372,573
6,372,573
6,372,573
805,191
805,191
805,191
Net assets
177,922,707
102,814,030
Equity
Share capital
Retained profit
Total equity
14
34,790,174
34,790,174
143,132,533
68,023,856
177,922,707
102,814,030
The financial statements were approved by the Board of Directors on 24 March 2021 and were signed on its behalf by:
Alexander Selegenev
Executive Director
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TMT Investments Annual Report and Accounts 2020
STATEMENT OF CASH FLOWS
Operating activities
Operating gain
Adjustments for non-cash items:
Notes
For the
year ended
31/12/2020
For the year
ended
31/12/2019
USD
USD
75,047,233
18,154,205
Changes in fair value of financial assets at FVPL
3
(82,294,256)
(21,269,830)
Changes in working capital:
Decrease in trade and other receivables
Increase/(Decrease) in trade and other payables
Net cash generated from/(used in) operating activities
Investing activities
Interest received
Purchase of financial assets at FVPL
Proceeds from sale of financial assets at FVPL
Other financial income
(7,247,023)
(3,115,625)
224,119
23,092,438
5,567,382
(897,751)
(1,455,522)
19,079,062
61,444
202,224
(12,503,095)
(8,581,128)
41,201,387
3,533,912
-
33,082
11
13
7
10
10
7
Net cash (used in)/generated from investing activities
28,759,736
(4,811,910)
Financing activities
Dividends paid
Net cash used in financing activities
-
-
(5,837,166)
(5,837,166)
Increase in cash and cash equivalents
27,304,214
8,429,986
Cash and cash equivalents at the beginning of the year
11,700,074
3,270,088
Cash and cash equivalents at the end of the year
12
39,004,288
11,700,074
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STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019 and for the year ended 31 December 2020, USD
Note
Share Capital Retained Profit
USD
USD
Total
USD
Balance at 1 January 2019
34,790,174
55,471,511
90,261,685
Gain for the year
Total comprehensive income for the
year
Transactions with owners in their capacity as
owners:
Dividends paid
-
-
-
18,389,511
18,389,511
18,389,511
18,389,511
(5,837,166)
(5,837,166)
Balance at 31 December 2019
34,790,174
68,023,856
102,814,030
Gain for the year
Total comprehensive income for the
year
-
-
75,108,677
75,108,677
75,108,677
75,108,677
Balance at 31 December 2020
34,790,174
143,132,533
177,922,707
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TMT Investments Annual Report and Accounts 2020
Notes to
the Financial
Statements
For the year ended 31 December 2020
76
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PAGE CONTENT 1. Company information
TMT Investments Plc (“TMT” or the “Company”) is a company incorporated in
Jersey with its registered office at 13 Castle Street, St Helier, Jersey, JE1 1ES,
Channel Islands.
The Company was incorporated and registered on 30 September 2010 in
Jersey under the Companies (Jersey) Law 1991 (as amended) with registration
number 106628 under the name TMT Investments Limited. The Company
obtained consent from the Jersey Financial Services Commission pursuant
to the Control of Borrowing (Jersey) Order 1985 on 30 September 2010.
On 1 December 2010 the Company re-registered as a public company and
changed its name to TMT Investments Plc. The Company’s ordinary shares
were admitted to trading on the AIM market of the London Stock Exchange
on 1 December 2010.
The memorandum and articles of association of the Company do not restrict
its activities and therefore it has unlimited legal capacity. The Company’s
ability to implement its Investing Policy and achieve its desired returns will
be limited by its ability to identify and acquire suitable investments. Suitable
investment opportunities may not always be readily available.
The Company will seek to make investments in any region of the world.
Financial statements of the Company are prepared by and approved by the
Directors in accordance with International Financial Reporting Standards,
International Accounting Standards and their interpretations issued or
adopted by the International Accounting Standards Board as adopted by the
European Union (“IFRSs”). The Company’s accounting reference date is 31
December.
2. Summary of significant accounting policies
2.1
BASIS OF PRESENTATION
2.2
GOING CONCERN
The principal accounting policies applied by the Company in the
preparation of these financial statements are set out below and have been
applied consistently.
The financial statements have been prepared on a going concern basis,
under the historical cost basis as modified by the fair value of financial
assets at FVPL, as explained in the accounting policies below, and in
accordance with IFRS. Historical cost is generally based on the fair value of
the consideration given in exchange for assets.
In the year to date, the global economy was affected by the COVID-19
pandemic and related market volatility. Whilst the Company’s operations
and liquidity position were not directly impacted, the principal activity of
the Company was naturally affected through the impact on and therefore
potential performance of the Company’s investee companies. Accordingly,
the potential negative effect of COVID-19 and related market volatility, while
potentially affecting the future fair value of the Company’s investments,
does not impact the Company’s liquidity position.
The Directors confirm that, after giving due consideration to the financial
position and expected cash flows of the Company; they have a reasonable
expectation that the Company will have adequate cash resources to
continue in operational existence for the foreseeable future, and for at
least one year from the date of approval of these financial statements and
they have therefore adopted the going concern basis in preparing the
financial statements.
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2.3
SEGMENTAL REPORTING
2.4
FOREIGN CURRENCY
TRANSLATION
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker who is
responsible for allocating resources and assessing performance of the
operating segments and which has been identified as the Board that make
strategic decisions. For the purposes of IFRS 8 ‘Operating Segments’ the
Company currently has one segment, being ‘Investing in the TMT sector’.
Even though the Company only invests in the TMT sector, there are still
geographical disclosures that need to be made to comply with IFRS 8
‘Operating Segments’.
The Company analyses non-current financial assets according to the
geographical location of the investment (see note 4).
(a) Functional and presentation currency
Items included in the financial statements of the Company are measured
in United States Dollars (‘US dollars’, ‘USD’ or ‘US$’), which is the Company’s
functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into US$ using the exchange
rates prevailing at the dates of the transactions. Exchange differences
arising from the translation at the year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in
the statement of comprehensive income.
Currency
As at 31.12.2020
Conversation rates,
USD
Average rate,
2020
British pounds, £
Euro, €
1.3649
1.2276
1.2839
1.1416
2.5
CASH AND CASH
EQUIVALENTS
Cash and cash equivalents consist of cash at bank and in hand, deposits
held at call with banks, bank overdrafts and other short-term highly liquid
investments with maturities of three months or less from the date of
acquisition.
2.6
FINANCIAL ASSETS
RECOGNITION AND MEASUREMENT
The Company recognises financial assets and liabilities when it becomes
party to the contractual provisions of the instrument. Financial assets
are derecognised when the contractual rights to the cash flows from the
financial asset expire, or when the financial asset and substantially all
the risks and rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires. Financial assets
are initially measured at fair value adjusted for transaction costs (where
applicable). Financial assets are classified into the following categories:
• amortised cost;
•
•
fair value through profit or loss (FVPL); and
fair value through other comprehensive income (FVOCI).
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In the periods presented, the Company does not have any financial assets
categorised as FVOCI. The classification is determined by both:
• the entity’s business model for managing the financial asset; and
• the contractual cash flow characteristics of the financial asset.
SUBSEQUENT MEASUREMENT
FVPL
The Company manages its investments with a view to profiting from the
receipt of dividends and changes in fair value of equity investments.
Financial assets of the Company comprise of unlisted equity investments,
convertible promissory notes and SAFEs. All the financial assets are not for
trading and are classified as financial assets at FVPL. Directly attributable
transaction costs are recognised in profit or loss as incurred. Financial
assets at fair value through profit or loss are measured at fair value, and
changes therein are recognised in profit or loss.
When measuring the fair value of a financial instrument, the Company uses
relevant transactions during the year or shortly after the year end, which
gives an indication of fair value and considers other valuation methods to
provide evidence of value. The “price of recent investment” methodology
is used mainly for venture capital investments, and the fair value is derived
by reference to the most recent equity financing round or sizeable partial
disposal. Fair value change is only recognised if that round involved a new
external investor. From time to time, the Company may assess the fair
value in the absence of a relevant independent equity transaction by relying
on other market observable data and valuation techniques, such as the
analysis of revenue multiples of comparable companies and/or comparable
transactions. The nature of such valuation techniques is highly judgmental
and dependent on the market sentiment at the time of the analysis.
FAIR VALUES ARE CATEGORISED INTO DIFFERENT LEVELS IN A FAIR
VALUE HIERARCHY BASED ON THE INPUTS USED IN THE VALUATION
TECHNIQUES AS FOLLOWS:
Level 1: The fair value of financial instruments traded in active markets
is based on quoted market prices at the end of the reporting period. The
quoted market price used for financial assets held by the Company is the
current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an
active market is determined using valuation techniques which maximise
the use of observable market data and rely as little as possible on entity
specific estimates. Specific valuation techniques used to value financial
instruments include the use of quoted market prices or dealer quotes for
similar instruments.
Level 3: If one or more of the significant inputs is not based on observable
market data, the instrument is included in level 3. Financial assets that
qualify as an associate, as 20% or more of the voting rights are held by the
company, are exempt from IAS 28 ‘Investments in Associates’, as TMT is a
venture capital organisation. Such investments are therefore treated as
financial assets at FVPL.
FINANCIAL ASSETS AT AMORTISED COST
Financial assets are measured at amortised cost if the assets meet the
following conditions:
• they are held within a business model whose objective is to hold the
financial assets and collect its contractual cash flows; and
• the contractual terms of the financial assets give rise to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
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After initial recognition, these are measured at amortised cost using the
effective interest method. Discounting is omitted where the effect of
discounting is immaterial. The Company’s cash and cash equivalents, trade
and other receivables fall into this category of financial instruments.
IMPAIRMENT OF FINANCIAL ASSETS
In relation to the impairment of financial assets, IFRS 9 requires an
expected credit loss model to be applied. The expected credit loss model
requires the Company to account for expected credit losses and changes
in those expected credit losses at each reporting date to reflect changes
in credit risk since initial recognition of the financial assets. IFRS 9 requires
the Company to recognise a loss allowance for expected credit losses on
receivables.
In particular, IFRS 9 requires the Company to measure the loss allowance
for a financial instrument at an amount equal to the lifetime expected
credit losses (ECL) if the credit risk on that financial instrument has
increased significantly since initial recognition, or if the financial instrument
is a purchased or originated credit-impaired financial asset. However, if the
credit risk on a financial instrument has not increased significantly since
initial recognition, the Company is required to measure the loss allowance
for that financial instrument at an amount equal to 12 months ECL.
INCOME
Interest income from convertible notes receivable is recognised as it
accrues by reference to the principal outstanding and the effective interest
rate applicable, which is the rate that exactly discounts the estimated future
cash flows through the expected life of the financial asset to the asset’s
carrying value.
2.7
NET FINANCE INCOME
Net finance income comprises interest income on deposits and dividends
from portfolio companies. Interest income is recognised as it accrues
in the statement of comprehensive income, using the effective interest
method.
2.8
TAXATION
Deferred tax is provided in full using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in
a transaction other than a business combination that, at the time of the
transaction, affects neither accounting nor taxable profit or loss. Deferred
tax is determined using tax rates that are expected to apply when the
related deferred tax asset is realised or when the deferred tax liability is
settled. Deferred tax assets are recognised to the extent that it is probable
that future taxable profits will be available against which the temporary
differences can be utilised.
2.9
EQUITY INSTRUMENTS
Ordinary shares are classified as equity. Costs directly attributable to the
issue of new shares are shown in equity as a deduction from the proceeds.
2.10
NEW IFRSS AND
INTERPRETATIONS
The following standards and amendments became effective from 1 January
2020, but did not have any material impact on the Company:
• Amendments to References to Conceptual Framework in IFRS Standards
• Amendments to IFRS 9 and IFRS 7 – Interest rate benchmark reform
• Amendments to IAS 1 and IAS 8 – Definition of Materiality
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2.11
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Estimates and judgements need to be regularly evaluated and are based
on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The
Company makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, rarely equal the related
actual results.
The estimates and underlying assumptions are reviewed on an on-going
basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both current
and future periods.
The estimates significant to the financial statements during the year and at
the year-end is the consideration of the fair value of financial assets at FVPL
as set out in the relevant accounting policies shown above. A number of the
financial assets at FVPL held by the Company are at an early stage of their
development. The Company cannot carry out regular reliable fair value
estimates of some of these investments. Future events or transactions
involving the companies invested in may result in more accurate valuations
of their fair values (either upwards or downwards) which may affect the
Company’s overall net asset value.
3. Gains on investments
For the year ended
31/12/2020
USD
For the year ended
31/12/2019
USD
Gross interest income from convertible notes receivable
Net interest income from convertible notes receivable
82,879
82,879
21,698
21,698
Gains on changes in fair value of financial assets at FVPL
82,294,256
21,269,830
Success fee attributable to consultants
-
(15,601)
Other losses on investment
(117,400)
-
Total net gains on investments
82,259,735
21,275,927
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4. Segmental Analysis
GEOGRAPHIC INFORMATION
The Company has investments in the USA, Estonia, the United Kingdom,
BVI, Cyprus and Israel.
Non-current financial assets
31.12.2019
Equity
investments
Convertible
notes & SAFEs
USA
USD
Israel
USD
BVI
USD
Estonia
USD
Cyprus
USD
United
Kingdom
USD
Total
USD
57,787,606
291,781
779,000
22,642,461
-
2,253,607
83,754,455
6,802,735
-
-
-
650,000
-
7,452,735
Total
64,590,341
291,781
779,000
22,642,461
650,000
2,253,607
91,207,190
31.12.2020
Equity
investments
Convertible
notes & SAFEs
USA
USD
Israel
USD
BVI
USD
Estonia
USD
Cyprus
USD
United
Kingdom
USD
Total
USD
90,078,690
155,000
1,780,250
36,711,439
-
7,718,112 136,443,491
6,827,998
-
-
181,665
1,350,000
-
8,359,663
Total
96,906,688
155,000
1,780,250
36,893,104
1,350,000
7,718,112 144,803,154
5. Administrative Expenses
Administrative expenses include the following amounts:
Staff expenses (note 6)
Professional fees
Legal fees
Bank and LSE charges
Audit fees
Accounting fees
Rent
Other expenses
Currency exchange loss (gain)
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For the year ended
31/12/2020
For the year ended
31/12/2019
USD
653,318
254,172
97,100
18,336
31,625
15,200
94,608
69,646
21,446
USD
648,170
241,480
45,732
13,620
26,328
15,200
94,596
106,897
(17,557)
1,255,451
1,174,466
6. Staff Expenses
Directors’ fees
Wages and salaries
For the year ended 31/12/2020
For the year ended 31/12/2019
USD
185,798
467,520
653,318
USD
185,570
462,600
648,170
Wages and salaries shown above include salaries relating to 2020. Bonus Plan
costs are not included in administrative expenses and are shown separately.
The Directors’ fees and bonuses for 2020 were as follows:
For the year ended 31/12/2020
For the year ended 31/12/2019
Alexander Selegenev
Yuri Mostovoy
James Joseph Mullins
Petr Lanin
USD
100,000
50,000
25,798
10,000
185,798
USD
100,000
50,000
25,570
10,000
185,570
The Directors’ fees shown above are all classified as ‘short term
employment benefits’ under International Accounting Standard 24. The
Directors do not receive any pension contributions or other benefits. The
average number of staff employed (excluding Directors) by the Company
during the year was 6 (2019: 6).
Key management personnel of the Company are defined as those
persons having authority and responsibility for the planning, directing
and controlling the activities of the Company, directly or indirectly. Key
management of the Company are therefore considered to be the Directors
of the Company. There were no transactions with the key management,
other than their fees, bonuses, and reimbursement of business expenses.
Under the Company’s Bonus Plan, subject to achieving a minimum hurdle
NAV and high watermark conditions, the team receives an annual cash
bonus equal to 7.5% (increasing to 10% from 1 January 2021) of the
net increases in the Company’s NAV, adjusted for any changes in the
Company’s equity capital resulting from issuance of new shares, dividends,
share buy-backs and similar corporate transactions. For the bonus period
from 1 July 2020 to 31 December 2020, the total amount of bonus accrued
was US$6,086,948. The exact allocation of the accrued bonus is expected
to be approved and paid to the participants of the Company’s Bonus Plan
shortly after the publication of this report.
The minimum initial allocation of the Bonus Pool among the predetermined
participants of the Bonus Plan is as follows:
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Participants of the Bonus Plan
The minimum initial allocation
of the Bonus Pool (%)
The minimum initial allocation
of the Bonus Pool (US$)
Artemii Iniutin (Employee)
German Kaplun (Employee)
Alexander Morgulchik (Employee)
Alexander Selegenev (Director)
Yuri Mostovoy (Director)
Alexander Pak (Employee)
Levan Kavtaradze (Employee)
To be allocated
Total
7. Net Finance Income
Interest income
Other finance income
16.5%
16.5%
16.5%
16.5%
5.0%
10.0%
8.0%
11.0%
100%
1,004,346
1,004,346
1,004,346
1,004,346
304,347
608,695
486,956
669,566
US$6,086,948
For the year ended 31/12/2020
For the year ended 31/12/2019
USD
61,444
-
61,444
USD
202,224
33,082
235,306
8. Income Tax Expense
The Company is incorporated in Jersey. No tax reconciliation note has been presented as the income tax rate for
Jersey companies is 0%.
9. Gain per share
The calculation of basic gain per share is based upon the net gain for the year ended 31 December 2020
attributable to the ordinary shareholders of US$75,108,677 (2019: net gain of US$18,389,511) and the weighted
average number of ordinary shares outstanding was calculated as follows:
Gain per share
For the year ended
31/12/2020
USD
For the year ended
31/12/2019
USD
Basic gain per share (cents per share)
257.35
63.01
Gain attributable to equity holders of the entity
75,108,677
18,389,511
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The weighted average number of ordinary shares outstanding was calculated as follows:
Weighted average number of shares in issue
Ordinary shares
For the year ended
31/12/2020
For the year ended
31/12/2019
29,185,831
29,185,831
29,185,831
29,185,831
During the years ended 31 December 2020 and 31 December 2019 there were no dilutive instruments in issue.
10. Non-current Financial Assets
Financial assets at FVPL, USD:
Investments in equity shares (i)
At 31/12/2020
At 31/12/2019
- unlisted shares
136,443,491
83,754,455
Convertible notes receivable (ii)
- promissory notes
- SAFEs
2,753,663
5,606,000
3,452,735
4,000,000
144,803,154
91,207,190
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10. NON-CURRENT FINANCIAL
ASSETS CONTINUED
Reconciliation of fair value measurements of non-current financial assets:
Financial assets at FVPL
Total
Unlisted shares
Convertible notes
& SAFEs
USD
USD
USD
Balance as at 31 December 2018
62,285,914
2,604,230
64,890,144
Total gains or losses in 2019:
- changes in fair value
21,838,934
(569,104)
21,269,830
Purchases (including consulting & legal fees)
2,881,128
5,700,000
8,581,128
Disposal of investment (carrying value)
(3,533,912)
-
(3,533,912)
Conversion and other movements
282,391
(282,391)
-
Balance as at 31 December 2019
83,754,455
7,452,735
91,207,190
Total gains or losses in 2020:
- changes in fair value
81,892,288
401,968
82,294,256
Purchases (including consulting & legal fees)
8,873,494
3,629,601
12,503,095
Disposal of investment (carrying value)
(41,201,387)
-
(41,201,387)
Conversion and other movements
3,124,641
(3,124,641)
-
Balance as at 31 December 2020
136,443,491
8,359,663
144,803,154
Financial assets at fair value through profit or loss are measured at fair value,
and changes therein are recognised in profit or loss.
When measuring the fair value of a financial instrument, the Company uses
relevant transactions during the year or shortly after the year end, which
gives an indication of fair value and considers other valuation methods to
provide evidence of value. The “price of recent investment” methodology
is used mainly for venture capital investments, and the fair value is derived
by reference to the most recent equity financing round or sizeable partial
disposal. Fair value change is only recognised if that round involved a new
external investor. From time to time, the Company may assess the fair
value in the absence of a relevant independent equity transaction by relying
on other market observable data and valuation techniques, such as the
analysis of revenue multiples of comparable companies and/or comparable
transactions. The nature of such valuation techniques is highly judgmental
and dependent on the market sentiment at the time of the analysis.
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$2.0M
$2.76M
TOTAL INVESTMENT
(USD MILLION)
FAIR VALUE
(USD MILLION)
SCALARR IS A MACHINE LEARNING-BASED FRAUD DETECTION
SOLUTION FOCUSED ON THE ADVERTISING MARKET.
In November 2020, Scalarr, a machine learning-based fraud
detection solution focused on the advertising market (www.
scalarr.io), completed a new equity funding round. The
transaction represented a revaluation uplift of US$0.76
million (or 50.4%) in the fair value of TMT’s investment in
Scalarr, compared to the previous reported amount as of 31
December 2019.
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(i) Equity investments as at 31 December 2020:
Investee company
Date of initial
investment
Value at
1 Jan 2020,
USD
Additions to equity
investments
during the period
Conversions from
loan notes
Investee company
Disposals
Value at 31 Dec
Equity stake
2020
owned
Gain/loss from
changes in fair
value of equity
investments,
USD
USD
USD
USD
USD
DepositPhotos
26.07.2011
10,836,105
21.11.2011
1,825,596
24.07.2012
21,201,509
15.02.2014
136,781
13.06.2014
3,025,285
21.07.2014
2,749,812
25.08.2014
1,000,000
01.09.2014
155,000
15.09.2014
22,132,548
30.07.2012
10,257,098
1,630,075
11.07.2014
2,215,118
11.01.2018
244,506
-
-
13.04.2015
3,340,404
329,903
16.05.2016
06.05.2016
19.01. 2019
442,159
450,015
779,000
-
-
1,001,250
06.06.2019
31.08.2018
16.09.2019
05.12. 2019
03.02.2020
07.04.2020
21.09.2020
12.11.2020
13.11.2020
17.11.2020
15.08.2019
21.08.2019
13.08.2020
253,615
288,224
200,000
221,688
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
620,870
660,197
772,500
500,000
1,322,100
499,999
-
1,336,600
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,282,705
341,936
29,314,214
(41,201,387)
DepositPhotos
Wanelo
Backblaze
E2C
Remote.it
Le Tote
Anews
Klear
Bolt
Pipedrive
PandaDoc
FullContact
Scentbird
Workiz
Vinebox
Hugo
MEL Science
Healthy Health
eAgronom
Rocket Games
(Legionfarm)
Timbeter
Classtag
3S Money Club
Hinterview
Virtual Mentor
(Allright)
NovaKid
MTL Financial
(OutFund)
Scalarr
Accern
Feel
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,802,828
(136,781)
(2,749,812)
14,068,979
1,406,161
2,920,647
326,686
663,704
162,122
756,564
356,976
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,836,105
1,825,596
56,004,337
3,025,285
1,000,000
155,000
36,201,527
-
-
-
3,621,279
244,506
6,590,954
768,845
450,015
1,780,250
2,663,696
415,737
288,224
200,000
221,688
200,000
620,870
660,197
772,500
500,000
1,322,100
2,756,563
1,282,705
2,035,512
16.67%
4.69%
10,85%
1.64%
0.69%
9.41%
3.04%
1.48%
-
1.55%
0.19%
4.43%
2.32%
2.42%
3.55%
3,64%
2.17%
2.13%
1.96%
4.64%
1.18%
4.83%
6.47%
3.01%
1.65%
5.71%
7.66%
5.12%
9.07%
83,754,455
8,873,494
3,124,641
81,892,288
(41,201,387)
136,443,491
MEL Science
25.02.2019
1,999,992
Wanelo
Backblaze
E2C
Remote.it
Le Tote
Anews
Klear
Bolt
Pipedrive
PandaDoc
FullContact
Scentbird
Workiz
Vinebox
Hugo
Healthy Health
eAgronom
Rocket Games
(Legionfarm)
Timbeter
Classtag
3S Money Club
Hinterview
Virtual Mentor
(Allright)
NovaKid
MTL Financial
(OutFund)
Scalarr
Accern
Feel
Total
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
88
Disposals
Value at 31 Dec
2020
Equity stake
owned
(i) Equity investments as at 31 December 2020:
(i) Equity investments as at 31 December 2020:
Investee company
Value at
Additions to equity
Conversions from
Investee company
Date of initial
investment
1 Jan 2020,
USD
investments
loan notes
during the period
USD
USD
DepositPhotos
26.07.2011
10,836,105
DepositPhotos
Wanelo
Backblaze
E2C
Remote.it
Le Tote
Anews
Klear
Bolt
Pipedrive
PandaDoc
FullContact
Scentbird
Workiz
Vinebox
Hugo
MEL Science
Healthy Health
eAgronom
Rocket Games
(Legionfarm)
Timbeter
Classtag
3S Money Club
Hinterview
Virtual Mentor
(Allright)
NovaKid
MTL Financial
(OutFund)
Scalarr
Accern
Feel
21.11.2011
1,825,596
24.07.2012
21,201,509
15.02.2014
136,781
13.06.2014
3,025,285
21.07.2014
2,749,812
25.08.2014
1,000,000
01.09.2014
155,000
15.09.2014
22,132,548
11.07.2014
2,215,118
11.01.2018
244,506
30.07.2012
10,257,098
1,630,075
13.04.2015
3,340,404
329,903
16.05.2016
06.05.2016
19.01. 2019
06.06.2019
31.08.2018
16.09.2019
05.12. 2019
03.02.2020
07.04.2020
21.09.2020
12.11.2020
13.11.2020
17.11.2020
15.08.2019
21.08.2019
13.08.2020
442,159
450,015
779,000
253,615
288,224
200,000
221,688
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,001,250
200,000
620,870
660,197
772,500
500,000
1,322,100
499,999
1,336,600
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,282,705
341,936
Wanelo
Backblaze
E2C
Remote.it
Le Tote
Anews
Klear
Bolt
Pipedrive
PandaDoc
FullContact
Scentbird
Workiz
Vinebox
Hugo
Healthy Health
eAgronom
Rocket Games
(Legionfarm)
Timbeter
Classtag
3S Money Club
Hinterview
Virtual Mentor
(Allright)
NovaKid
MTL Financial
(OutFund)
Scalarr
Accern
Feel
Total
MEL Science
25.02.2019
1,999,992
Gain/loss from
changes in fair
value of equity
investments,
USD
-
-
34,802,828
(136,781)
-
(2,749,812)
-
-
14,068,979
USD
USD
-
-
-
-
-
-
-
-
-
10,836,105
1,825,596
56,004,337
-
3,025,285
-
1,000,000
155,000
36,201,527
29,314,214
(41,201,387)
-
1,406,161
-
2,920,647
326,686
-
-
663,704
162,122
-
-
-
-
-
-
-
-
-
756,564
-
356,976
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,621,279
244,506
6,590,954
768,845
450,015
1,780,250
2,663,696
415,737
288,224
200,000
221,688
200,000
620,870
660,197
772,500
500,000
1,322,100
2,756,563
1,282,705
2,035,512
83,754,455
8,873,494
3,124,641
81,892,288
(41,201,387)
136,443,491
16.67%
4.69%
10,85%
1.64%
0.69%
9.41%
3.04%
1.48%
-
1.55%
0.19%
4.43%
2.32%
2.42%
3.55%
3,64%
2.17%
2.13%
1.96%
4.64%
1.18%
4.83%
6.47%
3.01%
1.65%
5.71%
7.66%
5.12%
9.07%
T
M
T
I
n
v
e
s
t
m
e
n
t
s
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
2
0
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
89
(ii) Convertible loan notes as at 31 December 2020:
Investee company
Date of initial
investment
Value at 1 Jan 2020,
Sharethis
26/03/2013
USD
570,030
KitApps (Attendify)
10/07/2013
600,000
21.08.2019
1,282,705
18.09.2019
1,000,000
Additions To
Convertible Note
Investments During The
Period
USD
Investee
company
Conversions
Gain/loss from
Value at
Term, years
Interest rate,
changes in fair
31 Dec 2020
%
value of equity
investments
USD
USD
USD
-
-
-
-
13.08.2020
08.12.2020
-
-
341,936
181,665
3,452,735
523,601
(1,624,641)
401,968
2,753,663
Accern
Affise
Feel
Postoplan
Total
(iii) SAFEs as at 31 December 2020:
Investee company
Date of initial
investment
Value at 1 Jan 2020 Additions to convertible
note investments
during the period,
Spin
Cheetah (Go-X)
Scallar
Retarget
Rocket Games
(Legionfarm)
Classtag
Moeco
Volumetric
StudyFree
Total
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
90
17.12.2018
29.07.2019
15.08.2019
24.09.2019
USD
300,000
350,000
1,500,000
650,000
17.09.2019
1,200,000
03.02.2020
08.07.2020
24.07.2020
08.12.2020
-
-
-
-
USD
-
-
-
700,000
-
200,000
1,000,000
206,000
1,000,000
Spin
Scallar
Retarget
Rocket Games
(Legionfarm)
Classtag
Moeco
Volumetric
StudyFree
-
-
-
-
-
-
-
4,000,000
3,106,000
(1,500,000)
-
-
-
-
-
-
-
-
-
-
Accern
(1,282,705)
Sharethis
KitApps
(Attendify)
Affise
Feel
Postoplan
-
-
-
-
(341,936)
570,030
600,000
-
-
-
-
-
-
-
401,968
1,401,968
5.00%
181,665
1.0
2.00%
Investee company
Conversions Gain/loss from changes
Disposals
Value at 31 Dec
in fair value of SAFE
investments
USD
USD
USD
Cheetah (Go-X)
(1,500,000)
5.0
1.0
-
-
-
-
-
-
-
-
-
-
-
-
-
1.09%
2.00%
-
-
2020
USD
300,000
350,000
-
1,350,000
1,200,000
200,000
1,000,000
206,000
1,000,000
5,606,000
(341,936)
Affise
Feel
-
401,968
1,401,968
5.0
1.0
-
-
-
1.09%
2.00%
-
5.00%
-
(ii) Convertible loan notes as at 31 December 2020:
(ii) Convertible loan notes as at 31 December 2020:
Investee
company
Conversions
Gain/loss from
changes in fair
value of equity
investments
Value at
31 Dec 2020
Term, years
Interest rate,
%
USD
USD
USD
Sharethis
26/03/2013
KitApps (Attendify)
10/07/2013
600,000
Sharethis
KitApps
(Attendify)
-
-
21.08.2019
1,282,705
Accern
(1,282,705)
-
-
-
570,030
600,000
-
Investee company
Date of initial
Value at 1 Jan 2020,
investment
Additions To
Convertible Note
Investments During The
Period
USD
USD
570,030
-
-
-
-
-
-
-
-
note investments
during the period,
USD
700,000
200,000
1,000,000
206,000
1,000,000
18.09.2019
1,000,000
13.08.2020
08.12.2020
341,936
181,665
-
-
-
-
-
-
USD
300,000
350,000
1,500,000
650,000
17.12.2018
29.07.2019
15.08.2019
24.09.2019
03.02.2020
08.07.2020
24.07.2020
08.12.2020
17.09.2019
1,200,000
Accern
Affise
Feel
Postoplan
Total
Spin
Cheetah (Go-X)
Scallar
Retarget
Rocket Games
(Legionfarm)
Classtag
Moeco
Volumetric
StudyFree
Total
3,452,735
523,601
(1,624,641)
401,968
2,753,663
(iii) SAFEs as at 31 December 2020:
(iii) SAFEs as at 31 December 2020:
Investee company
Value at 1 Jan 2020 Additions to convertible
Investee company
Date of initial
investment
Conversions Gain/loss from changes
in fair value of SAFE
investments
Disposals
Value at 31 Dec
2020
Spin
USD
-
Cheetah (Go-X)
(1,500,000)
Scallar
Retarget
Rocket Games
(Legionfarm)
Classtag
Moeco
Volumetric
StudyFree
-
-
-
-
-
-
4,000,000
3,106,000
(1,500,000)
USD
USD
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
USD
300,000
350,000
-
1,350,000
1,200,000
200,000
1,000,000
206,000
1,000,000
5,606,000
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
91
181,665
1.0
2.00%
Postoplan
-
-
-
-
TMT Investments Annual Report and Accounts 2020
11. Trade and Other Receivables
Prepayments
Other receivables
Interest receivable on promissory notes
Interest receivable on deposits
At 31 December 2020
At 31 December 2019
USD
26,631
272,779
188,428
-
487,838
USD
264,361
326,648
105,548
15,400
711,957
The fair values of trade and other receivables approximate to their carrying amounts as presented above. During
2020 and 2019 no balances were past due or impaired, and no credit losses had been expected.
12. Cash and Cash Equivalents
The cash and cash equivalents as at 31 December 2020 include cash on hand and in banks.
Cash and cash equivalents comprise the following:
Deposits
Bank balances
At 31/12/2020
At 31/12/2019
USD
-
39,004,288
39,004,288
USD
6,500,000
5,200,074
11,700,074
The following table represents an analysis of cash and equivalents by rating agency designation based
on Standard and Poor’s rating or their equivalent:
At 31/12/2020
At 31/12/2019
USD
USD
39,004,288
39,004,288
-
-
39,004,288
5,200,074
5,200,074
6,500,000
6,500,000
11,700,074
Bank balances
BBB+ rating
Deposits
BBB+ rating
Total
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
92
13. Trade and Other Payables
Salaries payable
Directors’ fees payable
Bonuses payable
Trade payables
Other current liabilities
Accruals
At 31/12/2020
At 31/12/2019
USD
40,000
22,954
6,257,560
27,491
-
24,568
6,372,573
USD
-
15,732
748,626
11,912
9
28,912
805,191
The fair values of trade and other payables approximate to their carrying amounts as presented above.
14. Share Capital
On 31 December 2020 the Company had an authorised share capital of unlimited ordinary shares of no
par value and had issued ordinary share capital of:
At 31/12/2020
At 31/12/2019
USD
USD
Share capital
34,790,174
34,790,174
Issued capital comprises:
Fully paid ordinary shares
Number
Number
29,185,831
29,185,831
Number of shares
Number of shares
Balance at 31 December 2019
29,185,831
29,185,831
Issue of ordinary shares
-
-
Balance at 31 December 2020
29,185,831
29,185,831
There have been no changes to the Company’s ordinary share capital between the year-end date and the date of
approval of these financial statements.
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
93
TMT Investments Annual Report and Accounts 2020
15. Capital Management
The capital structure of the Company consists of equity share capital,
reserves, and retained earnings.
The Board’s policy is to maintain a strong capital base so as to maintain
investor and market confidence and to enable the successful future
development of the business.
The Company is not subject to externally imposed capital requirements.
No changes were made to the objectives, policies and process for
managing capital during the year.
16. Financial Risk Management and Financial Instruments
The Company has identified the following risks arising from its activities
and has established policies and procedures to manage these risks.
The Company’s principal financial assets are cash and cash equivalents,
investments in equity shares, and convertible notes receivable.
As at 31 December 2020 the largest exposure to credit risk related to
cash and cash equivalents (US$39,004,288). The exposure risk is reduced
because the counterparties are banks with high credit ratings (“BBB+”
Liquidity banks) assigned by international credit rating agencies. The
Directors intend to continue to spread the risk by holding the Company’s
cash reserves in more than one financial institution.
(i) Exposure to credit risk
The carrying amount of the following assets represents the maximum credit
exposure. The maximum exposure to credit risk as at 31 December is as
follows:
At 31/12/2020
USD
At 31/12/2019
USD
Convertible notes receivable & SAFEs
8,359,663
5,970,030
Trade and other receivables
487,838
711,957
Cash and cash equivalents
39,004,288
11,700,074
47,851,789
18,382,061
The Company’s financial assets are classified as financial assets at FVPL.
The measurement of the Company’s investments in equity shares and
convertible notes and SAFEs is largely dependent on the underlying trading
performance of the investee companies, but the valuation and other items
in the financial statements can also be affected by the interest rate and
fluctuations in the exchange rate.
COVID-19 and related market volatility, whilst not directly affecting the
Company’s operations and liquidity position, may impact the underlying
performance and therefore future fair market values of the Company’s
investee companies. A 10% increase in company valuations would impact
the value of the investment portfolio and unrealised gains by US$14.45
million.
CREDIT RISK
MARKET RISK
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
94
INTEREST RATE RISK
Changes in interest rates impact primarily cash and cash equivalents by
changing either their fair value (fixed rate deposits) or their future cash
flows (variable rate deposits). Management does not have a formal policy
of determining how much of the Company’s exposure should be to fixed
or variable rates. As of 31 December 2020 the Company was not exposed
to the interest rate risk as it did not have any interest bearing bank deposit
balances.
FOREIGN CURRENCY RISK
MANAGEMENT
The Company is exposed to foreign currency risks on investments and
salary and director remuneration payments that are denominated in a
currency other than the functional currency of the Company. The currency
giving rise to this risk is primarily GBP and EUR. The exposure to foreign
currency risk as at 31 December 2020 was as follows:
For the
year ended
31/12/2020
For the
year ended
31/12/2020
For the
year ended
31/12/2019
For the
year ended
31/12/2019
GBP
EUR
GBP
EUR
Current assets
Cash and cash equivalents
94,26
7,987
484,295
8,705
Current liabilities
Trade and other payables
(4,309)
-
(291,853)
Net (short) long position
Net exposure currency
89,951
65,903
7,987
192,442
6,506
146,757
-
8,705
7,771
Net exposure currency (assuming a
10% movement in exchange rates)
Impact on exchange movements in the
statement of comprehensive income
80,956
7,188
173,198
7,834
8,995
799
19,244
870
FOREIGN CURRENCY RISK
MANAGEMENT CONTINUED
The foreign exchange rates of the USD at 31 December were as
follows:
Currency
31/12/2020
31/12/2019
British pounds, £
1.3649
Euro, €
1.2276
1.3113
1.1202
This analysis assumes that all other variables, in particular interest rates,
remain constant.
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
95
TMT Investments Annual Report and Accounts 2020
FAIR VALUE AND LIQUIDITY
RISK MANAGEMENT
The Company’s approach to managing liquidity is to ensure that it will
always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company.
The Company has low liquidity risk due to maintaining adequate banking
facilities, by continuously monitoring actual cash flows and by matching the
maturity profiles of financial assets and current liabilities.
As at 31 December 2020, the cash and equivalents of the Company were
US$39,004,288.
The following are the maturities of current liabilities as at 31 December 2020:
Salaries
Directors’ fees payable
Bonuses payable
Trade payables
Accruals
Carrying
Amount
Within One
year
USD
40,000
22,954
USD
40,000
22,954
6,257,560
6,257,560
27,491
24,568
27,491
24,568
6,372,573
6,372,573
2-5 years
5+ years
USD
USD
-
-
-
-
-
-
-
-
-
-
-
-
The following table analyses the fair values of financial instruments measured at fair value by the
level in the fair value hierarchy as at 31 December 2020:
Level 1
USD
Level 2
Level 3
USD
USD
Total
USD
Financial assets
Financial assets at FVPL
-
82,207,863
62,595,291
144,803,154
82,207,863
62,595,291
144,803,154
17. Related Party Transactions
Since May 2012 until 31 December 2020, TMT’s Moscow-based staff were
located in an office that belongs to a company (“Orgtekhnika”) controlled
by Mr. Alexander Morgulchik and Mr. German Kaplun, the Company’s
senior managers. Alexander Morgulchik and German Kaplun also have
a beneficial interest over 10.52% and 27.01% respectively of the issued
share capital of TMT. Thus, Orgtekhnika is considered a related party.
Together with other related expenses (support personnel, company car,
security services, etc.), the total office rent costs to TMT from 1 April 2017
was US$7,883 per month. The lease was short-term (less than one year) in
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
96
RELATED PARTY
TRANSACTIONS CONTINUED
nature and so was recognised directly in expenses. With TMT’s directors,
employees and advisers increasingly working remotely from various
international locations, the Company has not renewed (and does not intend
to renew) its agreement with Orgtekhnika beyond 31 December 2020.
The Company’s Directors receive fees and bonuses from the Company,
details of which can be found in Note 6.
18. Subsequent Events
In January 2021, the Company invested an additional £135,825 (via
acquisition of existing shares) in 3S Money, a UK-based online banking
service focusing on international trade (www.3s.money).
In January 2021, the Company invested an additional US$228,933 (via
acquisition of existing shares) in Workiz, a SaaS solution for the service field
industry (www.workiz.com).
In February 2021, the Company invested an additional US$2,000,000 in
Affise, a performance marketing SaaS solution (https://affise.com/en/).
In February 2021, the Company invested an additional £399,997 in
HealthyHealth, an insurtech and healthtech company (www.healthyhealth.
com).
In March 2021, the Company invested US$1,000,000 in 3DLook Inc., a
body scanning and measuring technology solution for the online retail
industry (www.3dlook.me).
These events after the reporting period are not reflected in the NAV and/or
the financial statements as at 31 December 2020.
19. Control
The Company is not controlled by any one party. Details of significant
shareholders are shown in the Directors’ Report.
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
A
L
S
T
A
T
E
M
E
N
T
S
97
TMT Investments Annual Report and Accounts 2020
Directors and
Professional Advisers
DIRECTORS
Yuri Mostovoy
Non-executive Chairman
Petr Lanin
Independent Non-executive Director
Alexander Selegenev
Executive Director
James Joseph Mullins
Independent Non-executive Director
SECRETARY
Computershare Company Secretarial Services (Jersey)
Limited
REGISTERED OFFICE
13 Castle Street, St Helier, Jersey, JE1 1ES
13 Castle Street, St Helier, Jersey, JE1 1ES
COMPANY REGISTRATION NUMBER
106628 (Jersey)
NOMINATED ADVISER
JOINT BROKER
Cenkos Securities Plc
6-8 Tokenhouse Yard, London EC2R 7AS
JOINT BROKER
Hybridan LLP
20 Ironmonger Lane
London, EC2V 8EP
REGISTRAR
Computershare Investor Services (Jersey) Limited
13 Castle Street, St Helier,
Jersey, JE1 1ES
Strand Hanson Limited
26 Mount Row, Mayfair
London, W1K 3SQ
PUBLIC RELATIONS ADVISER
Kinlan Communications
2-4 Exmoor Street
London, W10 6BD
AUDITORS
UHY Hacker Young LLP
Quadrant House
4 Thomas More Square
London, E1W 1YW
COMPANY WEBSITE
www.tmtinvestments.com
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Registered office: 13 Castle Street,
St Helier, Jersey, JE1 1ES
Tel. +44 1534 281 800 Fax. +44 08451 258 623