TMT Investments
Annual Report 2022

Plain-text annual report

Investing globally in leading-edge, earlier stage technology companies since 2010 Annual Report & Accounts 2022 For the year ended 31 December 2022 Investing globally Investing globally is a key advantage, enabling TMT to seek the best risk/reward investment opportunities worldwide for its shareholders. As technology business models and trends start in one region and spread to or are replicated in others, they may well command significantly different valuation levels based on geography and stage of development. This can give rise to significant valuation disparities. TMT therefore identifies and evaluates companies engaged in high growth business trends across continents, seeking attractive valuation disparity opportunities. 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 2 0 2 2 A B O U T T M T I N V E S T M E N T S 33 Planning the next generation of potential winners Early and mid-stage companies represented 45% of TMT’s total portfolio value and 93% of the total number of portfolio companies, providing a large pipeline from which to keep growing tomorrow’s winners. US$9.6m of investments in 2022 Given the high level of market uncertainty and volatility, TMT chose to invest selectively in 2022, investing approximately US$9.6 million into 4 new portfolio companies and making 6 additional investments into portfolio companies. TMT’s largest investmet in 2022 was an initial invesmtent of US$4m in SOAX Ltd, a SaaS-enabled marketplace of tools to collect publicly available data at scale (https://soax.com) 22.8% NAV-based IRR for last five years 18 Profitable Full and Partial Exits 5 Unicorns to Date A prolific AIM pioneer TMT is a pioneer in its sector. Joining the AIM market of the London Stock Exchange in December 2010, the Company was 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 90 companies and realised 18 profitable full and partial exits. TMT was one of the earliest investors in some of its most successful portfolio companies, including Wrike, Bolt, Pipedrive, Pandadoc and Backblaze. Having generated five unicorn companies in its portfolio to date, TMT is increasingly being recognised as a trailblazer in identifying promising technology companies at an earlier stage of their development. A B O U T T M T I N V E S T M E N T S 4 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 2 0 2 2 A B O U T T M T I N V E S T M E N T S 55 90+ TMT has now invested in over 90 companies since its admission to AIM in December 2010 (as of 31 December 2022). P A G E C O N T E N T S 6 Contents 08 11 12 13 14 18 20 24 27 38 44 46 64 67 69 74 80 80 81 82 83 About TMT Investments TMT as a public company NAV per Share Highlights Investment Strategy Investment Policy Executive Director’s Statement Portfolio Developments Investment Portfolio Case Studies Board of Directors Corporate Governance ESG Policy ESG Developments Directors’ Reports Independent Auditor’s Report Financial Statements Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes In Equity 84 Notes to the financial statements 114 Directors and professional advisers Registered office 13 Castle Street, St Helier, Jersey JE1 1ES. Tel. +44 1534 281 800 Fax. +44 08451 258 623 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 2 0 2 2 P A G E C O N T E N T S 7 TMT Investments Plc is an earlier-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. A B O U T T M T I N V E S T M E N T S 8 About TMT Investments 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. TMT is passionate about its work. Members of the Company’s team have been investing in and building start-ups since the 1990s. The team is experienced in the challenges many founders and entrepreneurs face and therefore highly selective in its investments, leveraging its collective experience to identify the best risk/reward entry point. TMT is a pioneer in its sector: having joined the AIM market of the London Stock Exchange in December 2010, the Company was 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 90 companies and realised 18 profitable full and partial exits. TMT was one of the earliest investors in some of its most successful portfolio companies, including Wrike, Bolt, Pipedrive, Pandadoc and Backblaze. Having generated five unicorn companies in its portfolio to date, TMT is increasingly being recognised as a trailblazer in identifying promising technology companies at an earlier stage of their development. Global investors TMT has no restrictions on the geographies in which it invests. The Company’s 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. TMT believes that investing globally is a key advantage, enabling the Company to seek the best risk/reward investment opportunities worldwide for its shareholders. As technology business models and trends start in one region and spread to or are replicated in others, they may well command significantly different valuation levels based on geography and stage of development. This can give rise to significant valuation disparities. TMT therefore identifies and evaluates companies engaged in high- growth business trends across continents, seeking attractive valuation entry points for companies. A suitable example is food delivery. In this sector TMT has made investments in Hugo App and Muncher (active in Latin and Central America), MetroSpeedy (active in New York), and Bairro (an instant food and grocery delivery company in Portugal). Experienced investors TMT’s management team comprises experienced investors who have been investing in, building and scaling start-ups since the 1990s. The Company leverages this deep experience to identify and invest in high-growth companies at a relatively early stage of their development before they reach potentially much higher valuations. TMT seeks to pay special attention to not “overpaying” when it makes an investment, and prefers to reject an investment opportunity where it considers the risk/reward balance is not sufficiently attractive given the stage of an investee’s development. If a company in which TMT has made an investment is performing well, TMT will seek to make follow on investments where appropriate. In parallel, TMT has an active policy of seeking to reduce the value of underperforming investees as soon as there is enough evidence to support such decision. TMT’s approach has led to a well-maintained portfolio, which is broadly diversified across early, mid and expansion stage companies and business sectors. A number of portfolio companies have achieved significant growth and generated stellar returns for 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 2 0 2 2 A B O U T T M T I N V E S T M E N T S 9 About TMT Investments Continued investors. Prime examples are the Company’s exits from project management software company Wrike, which generated a US$23m cash exit and a return of 23 times initial investment when it was acquired by Vista Equity Partners in December 2018, the US$41 million disposal of the Company’s interest in sales management software company Pipedrive to Vista Equity Partners in December 2020, which generated a total cash return of over 51 times on investments made in 2012 and 2013, and the US$20m total cash exits from Depositphotos realised in 2016 and 2021, which generated a total cash return of 5 times. These substantial cash exits, together with other cash exits and the proceeds of the Company’s fund raise conducted in October 2021, which raised US$19.3 million before expenses, have been reinvested into earlier and mid-stage companies as part of planning the next generation of the portfolio’s potential winners. In summary, identifying and investing in high-growth technology companies at an early stage before they have fully proven themselves is not easy, but offers the potential for generating significant returns. TMT leverages 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. 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 earlier stage of their development, and requires a dedicated and specialist investment process that includes evaluating other factors. TMT’s proprietary four-filter investment process is specially designed to reduce risk and identify the best opportunities in early-stage investing. A B O U T T M T I N V E S T M E N T S 10 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 such a stake. Some private companies may have additional restrictions on new investors contained within their constitution. Other potential exit events could include a potential 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, privately held technology companies. Investing in private companies requires a specialist skill set, access to suitable investment opportunities and extensive research. TMT’s shareholders trust in the Company’s team to build and manage a diversified portfolio of high-growth technology companies. For the last five years, TMT’s NAV-based IRR (internal rate of return) has been 22.8% per annum. Benefits of investing via TMT Liquidity Diversification Rare exposure Experience Investing via publicly traded TMT shares provides shareholders with venture capital exposure combined with the benefits of publicly traded liquidity 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 for direct investment until such time as they subsequently undertake a listing/IPO 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 2 0 2 2 T M T A S A P U B L I C C O M P A N Y 11 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 2 0 2 2 NAV per share Highlights Net Asset Value per share IRR* 3 Years IRR* 5 Years IRR* 7 years IRR* Since Inception (12 years) 20.20% 22.75% 22.36% 17.29% $6.41 NAV per share of US$6.41 (down 28.7% from US$9.00 as of 31 December 2021) $100.6m Total cash proceeds from portfolio companies since inception $201.7m Total NAV of US$201.7m (down from US$283.1m as of 31 December 2021) $9.6m Approximately $9.6m of new investments across 9 new and existing portfolio companies 22.75% 5-year IRR of 22.75% per annum $11.4m Approximately in cash and cash equivalent reserves as of 27 March 2023 N A V P E R S H A R E 12 I H G H L G H T S I 13 201120202019201820172016As of 31 December of each year20152014201320122021$0.96$1.11$1.30$1.44$1.91$1.89$2.43$3.09$3.52$6.10$9.00$9.30*$6.40*$3.19*$2.53*$1.99*$3.82** Including dividends paid to date$6.41$6.71*2022 Investment Strategy Through its investment criteria, TMT seeks to identify companies with the following 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 Investment selection process TMT’s investment selection process is based on analysing companies through its four-filter process. The Company’s tried and tested process is the fruit of its 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 the team is 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 assessment of the company’s competitive landscape. Growth stage – companies that are already generating revenues (TMT’s typical minimum revenue threshold is US$100,000 per month) Product filter Series A / Pre-Series – A stage TMT’s typical investment range: US$0.5m-2.5m Viable exit opportunities – assessing potential exit scenarios from the start Core investment sectors. TMT currently focuses on identifying attractive investment opportunities in the following segments of the TMT sector: Analysis of the company’s product from a customer’s perspective, including user experience, by drawing on the team’s experience of assessing competing products and services. 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 others. TMT interviews the company’s founders to identify these abilities, drawing upon its experience of working with hundreds of start-up company management teams. Big Data / Cloud SaaS E-Commerce Marketplaces Post-investment engagement Fintech Edtech Foodtech TMT has funded over 90 companies since inception. The Company’s engagement with investees continues post-investment, and is tailored to each company’s needs and size. This can include attending an investee’s board meetings, facilitating introductions to new investors, providing strategic advice and exploring synergies with partner companies, including TMT’s portfolio companies. Whilst the Company focuses its attention on these segments, it is not constrained to these segments and will consider making investments throughout the TMT sector. Investment radar TMT invests 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. Companies that have successfully passed through the majority of the filters, but have not received investment from TMT, are added to the Company’s investment radar, whereby their development is monitored for potential future investment. Novakid and 3S Money are two most recent examples of successful investee companies which TMT followed for a while before making its first investment. I N V E S T M E N T S T R A T E G Y 14 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 2 0 2 2 I N V E S T M E N T S T R A T E G Y 15 Investment Strategy Through its investment criteria, TMT seeks to identify companies with the following features: I I N N V V E E S S T T M M E E N N T T S S T T R R A A T T E E G G Y Y 16 16 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 2 0 2 2 I N V E S T M E N T S T R A T E G Y 17 PRELIMINARY FILTERSector, Growth Stage, Markets Trends, Exit PotentialNUMBERS FILTERFinancial Performance, Operational Metrics, Fundraising Terms, Competitive LandscapePEOPLE FILTERFounders’ Competence, Team’s Ability to Grow BusinessPOST-INVESTMENT ENGAGEMENTInvestee Board Meetings, New Investor Introductions Strategic Advice and Exploring SynergiesINTERNAL PRODUCT TESTING FROM THE CUSTOMER’S PERSPECTIVE15,000+Proposals in 12 Years1,500+Deeply Scrutinised90+Companies Funded300+Promising Companies on the Radar500+Interviewed3,500+Closely Analysed 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 2 0 2 2 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. 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. Private Companies The Company will target primarily small and midsized 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. 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. I N V E S T M E N T P O L I C Y 1818 Executive Director’s Statement 2022 saw substantially increased market and economic volatility, with the larger-cap public market sell-off throughout the year leading to reduced valuations for some privately held start-ups. A challenging macro-economic environment has meant that many companies, both tech and non-tech, large and small, are having to react to the changed outlook and improve their business models and financial management. Developments in the Technology Venture Capital Sector As 2022 progressed, we observed an acceleration of two existing trends: first, an increasing focus by investors on examining a tech start-up’s profitability/ path to profitability, and second, increasing divergence in how tech companies are reacting to the changed market and operational environment. Turning to the first trend, venture capital investors are now much more reticent than previously to subsidise revenue growth or market share gains at the expense of profitability or a clear path to profitability. This rebalancing by investors towards a greater focus on profitability and away from “revenue growth at any cost” accelerated as 2022 progressed. This is to be expected: an innovative technology solution only becomes valuable to investors if it can achieve a product market fit (right product or service for the right client at the right price) that is ultimately focused on profitability. TMT was early to observe this trend and we commented on this already in our 2020 Annual Report, when tech companies’ business models were tested by the COVID- caused disruption in 2020, and had already sought to implement this insight in terms of TMT’s portfolio selection by tilting the portfolio toward companies that recognised the importance of having viable business models focused on visible profitability and strong management of their financial resources. Turning to the second trend, the knock-on effect of this rebalancing in the venture capital industry is now forcing the majority of start-ups of all stages to prioritise profitability over growth, with growth only being rewarded if it is achieved in a tightly controlled cost environment. This means that being a tech company with an innovative business model, product or service Technology Company Valuations has ceased to be sufficient per se to attract immediate investor attention. As a result, tech companies are having to reassess their underlying business models and profitability timelines and work harder to ensure their product market fit is well positioned to retain and grow market share. The marked change in how investors value technology companies is creating a “survival of the fittest” market dynamic, as companies react to a changed market environment and how they are valued by investors. On the one hand, companies with superior business models that have reacted quickly and adopted successful measures have continued to grow and flourish, albeit at lower speeds. On the other hand, companies with weaker business models that were more dependent on future funding and have failed to react successfully have come under increased pressure. TMT’s portfolio has not been immune to these developments, and we are naturally seeing an increasing divergence between the stronger and weaker performers. A first group of companies were quick to react in early 2022 by reducing burn-rates and accelerating their paths to profitability, continuing to refine their business models, or taking other required measures. In many cases this has led to lower revenue growth rates, but a stronger and more sustainable business position overall. A second group only started reacting in late 2022 / early 2023. Those companies that were slower to react to the tougher economic environment may have grown their revenues a bit faster compared to the first group, but their recent aggressive burn rates are now forcing them to have to look for new funds at lower valuation levels and/or implement business optimisation measures in a more stressed environment. A third group includes well capitalised companies with high levels of cash reserves and typically low burn rates or close to achieving profitability. Such companies are in the fortunate position of being able to choose whether to focus on revenue growth or profitability, depending on what they see as a priority for success in their respective market sectors. Despite the challenging macroeconomic and political outlook, investors in 2022 continued to back high- growth, high-quality digital technology companies, taking into account the above noted trends in the tech company universe. This resulted in positive revaluations of several of TMT’s portfolio companies. We were pleased to see Accern, Outfund, FemTech, Spin.ai, Muncher, and Cyberwrite receive further validation for their business models by raising fresh equity capital at higher valuations to TMT’s previous entry points. TMT adopts a conservative approach to valuing its portfolio investments and therefore regularly reviews and writes down investments that are not showing the progress TMT believes is required to justify the previously reported valuation level. As a result, in addition to Bolt and Backblaze, TMT partially or fully wrote down the value of twelve of its smaller investments during the period (excluding further write- downs related purely to exchange rate fluctuations). The significantly reduced share prices of publicly traded technology companies negatively affected the value of TMT’s equity stake in NASDAQ-traded cloud storage company Backblaze (www.backblaze.com), resulting in a US$40.2 million reduction in the value of TMT’s investment in Backblaze as of 31 December 2022. Despite such financial market volatility, Backblaze’s business has been developing well, recording 26% revenue growth in 2022 compared to 2021. Backblaze remains well capitalised with a preliminary announced unaudited net cash position of approximately US$32 million as of 31 December 2022. Consistent with TMT’s prudent valuation policy, the Company has also decided to reduce the fair value of its equity stake in Bolt (www.bolt.eu) by 33%, despite the fact that the previous valuation level was established on the back of Bolt’s successful €628 million equity raise, which completed in January 2022 and after the market correction had started. This decision reflects the reduction in the values of Bolt’s publicly traded peers, namely Uber, as of 31 December 2022. Business- wise, Bolt continued to perform reasonably well in 2022, recording double-digit revenue growth, making progress towards operating profitability and enjoying the benefits of its significant net cash reserves. As a business, Bolt also benefits from a highly diversified geographical revenue base, with over 100 million customers in more than 45 countries across the globe, as well as leveraging its technology to serve six business segments: rides, scooter rental, car sharing, food delivery, grocery delivery and business travel. As can be seen from the BVP Cloud Index (https:// cloudindex.bvp.com), median valuation multiples for larger-cap publicly traded technology companies have fallen sharply, in effect returning to the more sustainable levels seen in 2013-2017. The negative effect of increased market and economic volatility on earlier-stage start-ups has been the generally lower disbursement levels of funding that we are currently seeing, as investors continue to carefully assess how tech companies are reacting to the current challenges. ‘Dry powder’ cash levels available for investment remain very high globally, as the State of European Tech 2022 report indicates, but founders are having to go the extra mile to prove the quality and potential of their businesses as investors become more discerning. This is to be expected and bodes well for high levels of funding to continue being available to tech companies with strong business models, a successful differentiated offering and savvy financial management. NAV per share The Company’s NAV per share in 2022 decreased by 28.7% to US$6.41 as of 31 December 2022 (31 December 2021: US$9.00), mainly as a result of the significant downward revaluation of Backblaze and Bolt during 2022. Operating expenses In 2022, the Company’s administrative expenses of US$1,443,395 were below corresponding 2021 levels (2021:US$1,924,650), reflecting the Company’s reduced level of investment and business development activities during the period. E X E C U T I I V E D R E C T O R S ’ S T A T E M E N T 20 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 2 0 2 2 E X E C U T I I V E D R E C T O R S ’ S T A T E M E N T 21 Financial position As of 31 December 2022, the Company had no financial debt and cash reserves of approximately US$10.1 million (31 December 2021: US$25.5 million). As of 27 March 2023, the Company had cash and cash equivalent reserves of approximately US$11.4 million. With regard to the recent developments surrounding Silicon Valley Bank (“SVB”), TMT’s main banking partner, the Company notes that, after the measures implemented by the USA’s Federal Deposit Insurance Corporation and Federal Reserve, the Company expects to retain access to all its funds held at SVB and that therefore the developments regarding SVB are not expected to have any impact on TMT’s financial position. For the same reasons the Company does not believe that the recent developments at SVB will have any material impact on the financial position of its portfolio companies. As of 27 March 2023, the Company had approximately US$2.9 million in cash held with SVB. Outlook TMT has a diversified investment portfolio of over 50 companies, focused primarily on big data/cloud, SaaS (software-as-a-service), marketplaces, e-commerce, FinTech, EdTech and FoodTech, most of which continue to benefit from the ongoing shift to online consumer habits and remote working. 2022 saw a dramatic change for the venture capital and technology company environment, with most investors “returning to basics” by looking to support ultimately profitable business models at sensible valuations. Start- ups have now realised that the “growth at any cost” approach has rapidly been replaced with a focus on “fundamentally profitable growth at the right valuation”. Start-ups’ ability to reposition and adjust to the changed market environment will largely define their success/ survival rate in the near future. The recent military conflict in Ukraine and more recently the US and European bank liquidity issues have undoubtedly added significantly to global market uncertainty. A number of negative trends and factors continue to affect the prospects of the wider global economy, and the ultimate effect on the technology sector and its participants will depend on how global dynamics unfold in the coming months. Despite the ongoing volatility, investors continue to be interested in high-quality technology businesses at the right valuation levels. TMT is continuing to identify such opportunities very selectively, whilst employing an extremely cautious general investment approach for the time being. With no financial debt and cash reserves of approximately US$11.4 million as of 27 March 2023, TMT is well positioned to ride out the current market volatility and to continue making investments and realising full and partial disposals when the right opportunities present themselves. Alexander Selegenev Executive Director 27 March 2023 E X E C U T I 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 2 0 2 2 E X E C U T I I V E D R E C T O R S ’ I V E D R E C T O R S ’ S T A T E M E N T 22 S T A T E M E N T 23 Portfolio Developments The following developments have had an impact on, and are reflected in, the Company’s NAV and/or financial statements as of 31 December 2022 in accordance with applicable accounting standards. PORTFOLIO PERFORMANCE The following developments have had an impact on, and are reflected in, the Company’s NAV and/or financial statements as of 31 December 2022 in accordance with applicable accounting standards: FULL AND PARTIAL CASH EXITS, AND POSITIVE REVALUATIONS: • Accern, a no-code AI platform for the financial service industry (www.accern.com), completed a new equity funding round. The transaction represented a revaluation uplift of US$1.6 million (or 124%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. • MTL Financial, trading as Outfund, a revenue-based financing provider (www.out.fund), completed a new equity funding round. The transaction represented a revaluation uplift of US$1.2 million (or 94%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. • FemTech, a London-based technology accelerator focused on female founders (www.femtechlab. com), completed two new equity funding rounds in July 2022 and February 2023. The latest transaction represented a revaluation uplift of US$0.5 million (or 196%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. • Spin.ai, an all-in-one SaaS data protection platform for mission-critical SaaS apps (www.spin. ai), completed a new equity funding round. The transaction represented a revaluation uplift of US$0.7 million (or 221%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021 transaction represented a revaluation uplift of US$1.6 million (or 41%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. • Cyberwrite, an AI cyber insurance platform providing cybersecurity insights and risk quantification for businesses worldwide (www.cyberwrite.com), completed a new equity funding round. The transaction represented a revaluation uplift of US$0.5 million (or 95%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. • In its 2021 Annual Report, the Company reported that Delivery Hero SE, one of the world’s leading local food delivery platforms, had announced in October 2021 that it had entered into an agreement with TMT’s portfolio company Hugo Technologies Ltd. (“Hugo”) (www.hugoapp.com), to acquire Hugo’s multi-category marketplace’s core food delivery and quick commerce business in Central America (the “Original Disposal”). In November 2022, the Original Disposal finally completed with slightly amended terms (the “Final Disposal”). As part of the Final Disposal, TMT received an initial dividend payment of US$0.2 million from Hugo in November 2022. • TMT’s equity stake in 3S Money Club Limited (www.3s.money) was revalued on the back of independent secondary equity transactions in 3S Money shares. The relevant secondary transactions represented a revaluation uplift of US$3.8 million (or 37%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021 NEGATIVE REVALUATIONS: The following of the Company’s portfolio investments were negatively revalued in 2022: KEY DEVELOPMENTS FOR THE FIVE LARGEST PORTFOLIO HOLDINGS IN 2022 (SOURCE: TMT’S PORTFOLIO COMPANIES): Portfolio Company Write- down amount (US$) Reduction as % of fair value reported as of 31 Dec 2021 Backblaze 40,153,509 64% Bolt 33,618,816 33% Pandadoc 5,341,305 33% Affise 1,675,190 48% Remote.it 1,381,443 91% MEL Science 1,758,040 66% Estateguru 979,500 55% StudyFree 1,000,000 100% EdVibe 750,001 50% Academy of Change 670,000 67% 3D Look 499,999 50% Usual 450,015 100% Hugo 338,222* 9% Reasons for write- down Based on the closing mid-market price of US$6.15 per share on 31 December 2022 Based on comparable company analysis, and supported by a partial buying order received by TMT from a bona fide financial buyer Based on comparable company analysis Based on comparable company analysis Independent convertible note round Based on comparable company analysis; lack of progress in the last 2 years Based on comparable company analysis (plus exchange rate effect); extra exposure to the current financial market volatility Serious lack of progress in the last 2 years Insufficient progress in the last 1.5 years; revenue exposure to Russia Insufficient progress in the last 1.5 years; previous revenue exposure to Russia Lack of progress in the last 2 years Independent highly dilutive equity capital raise Acquisition by Delivery Hero announced in Oct 2021 completed in Nov 2022. Value of TMT’s investment partially reduced due to the expedited receipt of relevant proceeds. Bolt (ride-hailing and food delivery service): • Active in over 500 cities globally (up from over 400 cities as of 31 December 2021) • Double-digit revenue growth (cloud storage provider): • Double-digit revenue growth • Multiple new integrations and partnerships building basis for future growth • Targeting adjusted EBITDA breakeven point in Q4 2023 (proposal automation and contract management software): • Double-digit revenue growth • Multiple new integrations and partnerships building basis for future growth • Acquisition of LiveNotary to launch a remote online notarisation service (provider of corporate multi-currency bank accounts): • Triple-digit revenue growth • Profitable and cash flow positive (Perfume, wellness and beauty product subscription service): • Single-digit revenue growth • Acquisition of car air freshener company Drift • Targeting positive EBITDA in 2023 *- adjusted for the US$0.2 million dividend TMT received from Hugo in November 2022. • Muncher, a cloud kitchen and virtual food brand operator in South America (www.muncher.com. co), completed a new equity funding round. The In addition, TMT’s investment in eAgronom had a minor increase in value thanks to the exchange rate movement as of 31 December 2022. Anews 330,000 100% Company liquidated Total 88,946,040 I P O R T F O L O D E V E L O P M E N T S 24 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 2 0 2 2 I P O R T F O L O D E V E L O P M E N T S 25 Investment Portfolio EVENTS AFTER THE REPORTING PERIOD In January and March 2023, TMT received a total additional US$1.6 million in dividends from Hugo, as part of the consideration for Hugo’s disposal of its food delivery and quick commerce business in Central America to Delivery Hero. In February 2023, TMT invested an additional US$0.1 million in Cyberwrite, an AI cyber insurance platform providing cybersecurity insights and risk quantification for businesses worldwide (www.cyberwrite.com). In February 2023, TMT invested an additional £45,861 in FemTech, a London-based technology accelerator focused on female founders (www.femtechlab.com). In February 2023, TMT received US$0.3 million from Backblaze, Inc., as a settlement payment in respect of TMT’s additional investment in Backblaze in 2021. In March 2023, Silicon Valley Bank (“SVB”), a key banking partner of TMT and many of its investee companies, experienced liquidity issues. As a result of the various measures implemented by the USA’s Federal Deposit Insurance Corporation and Federal Reserve, the Company expects to retain access to all its funds held at SVB and that therefore the developments regarding SVB are not expected to have any material impact on the financial position of TMT or any of its portfolio companies. In addition, the following of TMT’s non-USD denominated investments decreased in value due to exchange rate fluctuations as of 31 December 2022: Feel, Timbeter, Hinterview, MTL (Outfund), Conte.ai (Postoplan), Outvio, Sonic Jobs, Bairro, and Laundry Heap. NEW INVESTMENTS Given the high level of market uncertainty and volatility, TMT was even more selective in 2022, investing approximately US$9.6 million across the following companies: • • • Initial €825,000 in Bairrissimo, LDA, trading as Bairro, an instant food and grocery delivery company in Portugal (www.bairro.io); Initial US$4,000,000 in SOAX Ltd, a SaaS-enabled marketplace of tools to collect publicly available data (https://soax.com); Initial £500,000 and additional £999,918 in Laundryheap Limited, a marketplace for on-demand laundry and dry-cleaning services (www.laundryheap.com); • Initial US$1,000,000 in MedVidi Inc., an online mental healthcare provider (www.medvidi.com); • Additional €400,000 in Postoplan OÜ, trading as Conte.ai, a social network marketing platform, which helps create, schedule, and promote content (www.conte.ai); • Additional US$250,000 in Legionfarm, Inc., an online game coaching platform (www.legionfarm.com); • Additional £250,000 in Feel Holdings Limited, a subscription-based multivitamin and supplement producer (www.wearefeel.com); • Additional US$500,000 in Bafood Global Limited, a hyper local ready-to-eat food delivery and cloud kitchen operator in Eastern Europe (https://bafood. app); and • Additional US$200,000 in My Device Inc., trading as Whizz, a device-as-a-service e-bike rental company (www.getwhiz.co). I P O R T F O L O D E V E L O P M E N T S 26 T M T I N V E S T M E N T S A N N U A L R E P O R T 2 0 2 2 I N V E S T M E N T P O R T F O L O I 27 Portfolio Classification By Investees’ Sectors (as of 31 December 2022) Ten Largest Portfolio Investments (as of 31 December 2022) Other Big Data / Cloud E-Commerce Marketplace SaaS EDTECH Fintech Foodtech Other I N V E S T M E N T P O R T F O L O I 28 Portfolio Company # 1 2 3 4 5 6 7 8 9 Bolt Backblaze 3S Money Club PandaDoc Scentbird Muncher SOAX Workiz Feel 10 Hugo Other Total Fair value (US$M) As % of total portfolio value 69.76 22.99 14.09 10.84 6.59 5.71 4.00 3.98 3.65 3.23 50.42 195.26 35.73 11.78 7.22 5.55 3.38 2.92 2.05 2.03 1.87 1.67 25.80 100.00 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 2 0 2 2 I N V E S T M E N T P O R T F O L O I 29 Portfolio allocation by sector and by number of companies Portfolio allocation by growth stage of investee companies (as of 31 December 2022) (% of portfolio and number of companies, as of 31 December 2022) Early 10.38% Expansion 4 Other 4.14% Foodtech 5.17% EDTECH 3.64% Fair Value Expansion 55.09% Mid-stage 34.53% Mid-stage 31 Number of Companies Early 21 4 7 3 7 8 4 7 16 Marketplace 41.96% Sector Early Mid-stage Expansion Fair Value (US$) As % of Fair Value Companies 20.27M 67.42M 107.57M 195.26M 10.38 34.53 55.09 100.00 Portfolio allocation by target audience of investee companies (% of portfolio and number of companies, as of 31 December 2022) B2B 33.81% Fair Value B2B 27 B2C 48.54% Number of Companies SaaS 15.53% Fair Value (US$) As % of Fair Value Companies 21 31 4 56 B2C 16 B2C/B2B 13 81.94M 30.32M 28.28M 18.59M 10.85M 7.11M 10.09M 8.08M 41.96 15.53 14.48 9.52 5.56 3.64 5.17 4.14 8 16 7 4 3 7 4 7 56 B2C/B2B 17.65% Sector B2C B2C/B2B B2B I N V E S T M E N T P O R T F O L O I Total 195.26M 100.00 I N V E S T M E N T P O R T F O L O I 30 Fair Value (US$) As % of Fair Value Companies 94.77M 34.47M 66.02M 195.26M 48.54 17.65 33.81 100.00 16 13 27 56 E-Commerce 5.56% Fintech 9.52% Big Data / Cloud 14.48% Sector Marketplace SaaS Big Data / Cloud Fintech E-Commerce EDTECH Foodtech Other 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 2 0 2 2 I N V E S T M E N T P O R T F O L O I 31 Proven Track Record In Creating Value Exits Exits (since inception to 31 December 2022) (since inception to 31 December 2022) (since inception to 30 June 2021) FULL PROFITABLE EXITS Value Created PARTIAL PROFITABLE EXITS Capital Invested Value Lost ACQUIRERS VALUE CREATED $295.9m $94.2m Full Profitable Cash Exits $6.4m Partial Cash Exits and other cash proceeds $195.3m Current Portfolio CAPITAL INVESTED $103.5m VALUE LOST $19.1m $13.9m Full negative exits $5.1m Partial impairments I N V E S T M E N T P O R T F O L O I 32 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 2 0 2 2 I I N N V V E E S S T T M M E E N N T T P P O O R R T T F F O O L L O O I I 33 33 Partial Profitable ExitsAcquirersFull Profitable Exits Portfolio Map (as of 31 December 2022) Expansion Mid-stage Early I N V E S T M E N T P O R T F O L O I 34 The Company’s ten largest portfolio investments (as of 31 December 2022) www.bolt.eu International ridehailing and delivery platform. Incorporation Estonia First invested in September 2014 Total Investment $0.32m Fair Value $69.8m www.backblaze.com Online data back-up and cloud storage provider. * including $2.0m partial cash exit Incorporation USA Total Investment $7.03m First invested in July 2012 Fair Value $25m* www.3s.money A UK-based bank challenger providing corporate clients with multi-currency bank accounts Incorporation Incorporation UK UK Total Investment $5.99m First invested in First invested in April 2020 April 2020 Fair Value $14.1m T T M M T T I I I n N v V e s E t S m T e M n t E s N n T t S e r A i m N N R U e s A u L l t s R 2 E 0 P 2 O 2 R T 2 0 2 2 E X E C U T I ’ I I V E N D V R E E S C T T M O E R N S T S P T O A R T T E F M O E L N O T I 35 35 www.pandadoc.com Proposal automation and contract management software provider. Incorporation USA First invested in July 2014 Total Investment $0.40m Fair Value $10.8m www.workiz.com A leading SaaS provider for the field service industry. Incorporation USA First invested in May 2016 Total Investment $0.38m Fair Value $3.97m www.scentbird.com Perfume, wellness and beauty product subscription service. Incorporation USA Total Investment $1.23m First invested in April 2015 Fair Value $6.6m www.wearefeel.com Subscription-based innovative multivitamin and supplement producer Incorporation UK First invested in August 2020 Total Investment $3.4m Fair Value $3.65m www.muncher.com.co Cloud kitchen and virtual food brand operator in Central & Latin America. Incorporation USA First invested in April 2021 Total Investment $4.06m Fair Value $5.71m www.hugoapp.com Incorporation USA Total Investment $1.2m Multi-category marketplace. First invested in Fair Value January 2019 $3.55m https://soax.com A SaaS-enabled marketplace of tools to collect publicly available data at scale Incorporation UK Total Investment $4.00m First invested in January 2022 Fair Value $4.00m I N V E S T M E N T P O R T F O L O I 36 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 2 0 2 2 I N V E S T M E N T P O R T F O L O I 37 217x Return on TMT’s investment to date 3.5x Return on TMT’s investment to date $0.32M Total Investment $69.8M $7.03M Total Investment $25M* Fair Value of TMT’s stake Fair Value of TMT’s stake Backblaze recorded 26% revenue growth in 2022 The significantly reduced share prices of publicly traded technology companies negatively affected the value of TMT’s equity stake in NASDAQ-traded cloud storage company Backblaze (www.backblaze. com), resulting in a US$40.2 million reduction in the value of TMT’s investment in Backblaze as of 31 December 2022. Despite such financial market volatility, Backblaze’s business has been developing well, recording 26% revenue growth in 2022 compared to 2021. Backblaze remains well capitalised with a preliminary announced unaudited net cash position of approximately US$32 million as of 31 December 2022. *Including $2.0m partial cash exit Bolt is now active in over 500 cities globally, up from over 400 cities as of end December 2021 Bolt is a ride-hailing and food delivery service which is transforming mobility worldwide (www.bolt.eu). In 2022, Bolt expanded its presence to over 500 cities globally. Business wise, Bolt continued to perform reasonably well in 2022, recording double-digit revenue growth, making progress towards operating profitability and making use of the benefits of its significant net cash reserves. Consistent with TMT’s prudent valuation policy, the Company has also decided to reduce the fair value of its equity stake in Bolt (www. bolt.eu) by 33%, despite the fact that the previous valuation level was established on the back of Bolt’s successful €628 million equity raise, which completed in January 2022 and after the market correction had started. This decision reflects the reduction in the values of Bolt’s publicly traded peers, namely Uber, as of 31 December 2022. As a business, Bolt benefits from a highly diversified geographical revenue base, with over 100 million customers in more than 45 countries across the globe, as well as leveraging its technology to serve six business segments: rides, scooter rental, car sharing, food delivery, grocery delivery and business travel. C A S E S T U D Y 38 38 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 2 0 2 2 C A S E S T U D Y 39 In 2022, TMT invested an initial £0.5M and additional £1M in Laundryheap, a marketplace for on-demand laundry and dry-cleaning services Founded in 2014 in London, Laundryheap (www.laundryheap. com) is a next generation laundry & dry cleaning company, offering offer professional laundry and dry cleaning delivered to your doorstep in as quick as 24 hours. Since its beginnings in London, Laundryheap has expanded globally to 11 countries. Laundryheap’s services are available in Qatar, Ireland, Netherlands, Bahrain, UAE, Singapore, Kuwait, United Kingdom, Sweden, United States, and Denmark. FemTech completed two new equity funding rounds FemTech, a London-based technology accelerator focused on female founders (www.femtechlab.com), completed two new equity funding rounds in July 2022 and February 2023. The latest transaction represented a revaluation uplift of US$0.5 million (or 196%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. $0.27M $0.81M Total Investment Fair Value of TMT’s stake 3x Return on TMT’s investment to date C A S E S T U D Y 40 In January 2022, TMT invested an initial US$4m in SOAX Ltd, a SaaS-enabled marketplace of tools to collect publicly available data at scale SOAX (soax.com) makes it easy to access and collect ethically sourced data from anywhere in the world. SOAX is an award-winning automated data collection solution with over 1,000 clients worldwide and 8.5m+ ethically sourced proxies. Since its foundation, SOAX has registered exponential growth and now has 74 employees working fully remotely in 19 countries. 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 2 0 2 2 C A S E S T U D Y 41 2.9x Return on TMT’s investment to date 1.4x Return on TMT’s investment to date Accern completed a new equity funding round Accern, a no-code AI platform for the financial service industry (www.accern.com), completed a new equity funding round in 2022. The transaction represented a revaluation uplift of US$1.6 million (or 124%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. $1.0M Total Investment $2.9M $4.0M Total Investment $5.7M Fair Value of TMT’s stake Fair Value of TMT’s stake Muncher completed a new equity funding round Muncher, a cloud kitchen and virtual food brand operator in South America (www.muncher.com.co), completed a new equity funding round in 2022. The transaction represented a revaluation uplift of US$1.6 million (or 41%) in the fair value of TMT’s investment, compared to the previous reported amount as of 31 December 2021. 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 2 0 2 2 C A S E S T U D Y 43 C A S E S T U D Y 42 Board of Directors Yuri Mostovoy, Non-Executive Chairman, was appointed to the Board in June 2011. Yuri brings over 38 years expertise in investment banking, software development and business to his role as Chairman of the Company. 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 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, corporate brokers, 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 innovative technologies, market trends, company valuations and fund raising activities. Alexander Selegenev is a member of the Company’s Nomination Committee. Andrea Nastaj, independent Non-executive Director, was appointed to the Board in May 2022, succeeding Petr Lanin. Andrea is an experienced executive within the financial sector, having held senior positions at a number of financial institutions. He has, for the past decade, served as Head of Compliance for Capital Mill OÜ, the commercial real estate investor and manager. Prior to this, Andrea held the position of Vice-President at Banque Profil de Gestion, the independent bank whose primary services are private and investment banking. Banque Profil de Gestion merged with One Swiss Bank SA in June 2021 and is listed on the SIX Swiss Exchange (SIX:ONE). His appointment to the Board as an independent non-executive director of the Company brings to the team a wealth of corporate governance, compliance and financial services experience. Andrea has a Master’s in Accounting and Finance from the University of St. Gallen, Switzerland. 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 Group 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 a fund 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 completed an online course with University of Oxford Said Business School entitled “Oxford Blockchain Strategy Programme”. James Mullins serves as Chairman of the Audit, Remuneration and Nomination committees. B O A R D O F I D R E C T O R S 44 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 2 0 2 2 B O A R D O F I D R E C T O R S 45 Corporate Governance 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. 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. C O R P O R A T E G O V E R N A N C E 46 Chairman’s Corporate Governance Statement Introduction 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. Good governance is the fundamental underpinning of ESG The focus on ESG (Environmental, Social & Governance) by both businesses and society at large continued to evolve in 2022, as countries around the world emerged from the devastating social and economic fallout provoked by the COVID pandemic. Investor attention has been driven by three main factors: regulatory pressure, underlying investor demand and a recognition that current levels of ESG data available remain opaque and under-developed in many sectors, resulting in new business opportunities to meet this shortfall. The Company has been monitoring ESG issues before they reached the mainstream investment agenda. As such, TMT has made a number of investments in ESG- focused companies that also meet TMT’s investment objectives. In 2021, TMT started formalising its ESG Policy under the guiding principles that it be relevant, realistic and accountable, and finalised it as published in its Interim Results 2022. Starting with 2022 and going forward, TMT will also be providing an annual update on ESG developments in TMT’s portfolio. A corporate culture based 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. 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 47 Chairman’s Corporate governance statement continued 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 C O R P O R A T E G O V E R N A N C E 48 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/Cloud • SaaS (software-as-a-service) • Marketplaces • EdTech • E-commerce • FinTech • FoodTech 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 – companies that are already generating revenues (TMT’s typical minimum revenue threshold is US$100,000 per month) • Series A / Pre-Series A stage TMT’s typical investment range: US$0.5m-2.5m • Viable exit opportunities – assessing potential exit scenarios from the start 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. 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 49 PRINCIPLE 2 Seek to understand and meet shareholder needs and expectations 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. During the restrictions imposed by the Covid-19 pandemic, the Company made increased use of online and social media 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 web site. 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. The Company engages two brokers, Cenkos Securities plc (“Cenkos”) and Hybridan LLP (“Hybridan”) as Joint Brokers to TMT. Together with the Company’s other advisors, both brokers arrange regular meetings with UK institutional investors and private 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. C O R P O R A T E G O V E R N A N C E 50 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 promising investment opportunities. In relation to its wider stakeholders, the Company needs to ensure that it: 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. • Maintains a good reputation as a credible investor in Other suppliers its chosen investment sector; • Is fully compliant with all regulatory requirements; • Takes into account its wider stakeholders’ needs; and 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. • Takes into account its social responsibilities and their Internal stakeholders implications for long-term success. The Company’s workforce 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 Company’s investment performance relies on the retention and incentivisation of its directors, employees and consultants. 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 network, both online and in person. This is essential to maintaining a valuable level of accumulated tech knowledge, being connected to the latest developments in our core sectors and having access to a pipeline of attractive investments in the innovative world of technology investing. 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. 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 Principle 2 above. 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 51 PRINCIPLE 4 Embed effective risk management, considering both opportunities and threats, throughout the organisation 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. 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 Company has identified the following principal risks in executing its strategy and addresses these in the following ways: In determining what constitutes a sound system of internal controls the Board considers: Key people risk • The nature and extent of the risks which they regard as acceptable for the Company to bear within its particular business; 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. • The threat of such risks becoming reality; Mitigation: • 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. 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 conducts a formal risk assessment on an annual basis but will also report by exception on any material changes during the year. 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. In addition, the Company’s bonus plan serves to ensure that compensation is benchmarked to ensure staff retention. The Company invests in earlier 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. C O R P O R A T E G O V E R N A N C E 52 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 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 uses a filtering system that is designed to identify companies with the best potential to become scalable businesses with rapid 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 change 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. Mitigation: 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 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. Mitigation: 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. Mitigation: 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. Valuation of investments The Company invests in companies that at times operate in extremely 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. Mitigation: 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 with data provided by its portfolio companies that includes their key performance indicators (KPIs). Through this process, the Company actively monitors the performance of KPIs and other indicators that can affect fair value revaluations. 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 53 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 fund raises 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 thanks 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. 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 Non-controlling interests in portfolio companies may lead to a limited ability to protect the Company’s position in such investments. Mitigation 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 extremely high importance on investing in companies backed by highly skilled, professional and trustworthy founders. Proceeds from the realisation 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 C O R P O R A T E G O V E R N A N C E 54 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 Andrea Nastaj) and the Executive Director (Alexander Selegenev). James Mullins and Andrea Nastaj, both Non-executives, are considered by the Board to be independent. James Mullins was appointed to the Board in December 2010. Whilst James Mullins has 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 James Mullins continues 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, James Mullins will be subject to annual re-election on an ongoing basis. 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 (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 Directors have access to the Company’s advisers and are able to obtain advice from other external bodies as and when required. Board meetings Six board meetings were held in 2022. One meeting of the Audit Committee, one meeting of the Remuneration Committee and one meeting of the Nomination Committee were held in 2022. The number of meetings attended by the Directors is set out below. Director Board meetings Audit Commitee meetings Remuneration Committee Meetings Nomination Committee Meetings Yuri Mostovoy Alexander Selegenev Petr Lanin Andrea Nastaj James Mullins Total meetings 6 5 1 3 6 6 - - 1 1 1 - - 1 1 1 1 1 1 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 55 PRINCIPLE 6 Ensure that between them the Directors havethe 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 below. Yuri Mostovoy, Non-Executive Chairman, was appointed to the Board in June 2011. Yuri brings over 39 years expertise in investment banking, software development and business to his role as Chairman of the Company. 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 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, corporate brokers, 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 innovative technologies, market trends, company valuations and fund raising activities. Alexander Selegenev is a member of the Company’s Nomination Committee. 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 Group 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 a fund 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 completed an online course with University of Oxford Said Business School entitled “Oxford Blockchain Strategy Programme”. James Mullins serves as Chairman of the Audit, Remuneration and Nomination committees. C O R P O R A T E G O V E R N A N C E 56 Andrea Nastaj, independent Non-executive Director, was appointed to the Board in May 2022, succeeding Petr Lanin. Andrea is an experienced executive within the financial sector, having held senior positions at a number of financial institutions. He has, for the past decade, served as Head of Compliance for Capital Mill OÜ, the commercial real estate investor and manager. Prior to this, Andrea held the position of Vice-President at Banque Profil de Gestion, the independent bank whose primary services are private and investment banking. Banque Profil de Gestion merged with One Swiss Bank SA in June 2021 and is listed on the SIX Swiss Exchange (SIX:ONE). His appointment to the Board as an independent non-executive director of the Company brings to the team a wealth of corporate governance, compliance and financial services experience. Andrea has a Master’s in Accounting and Finance from the University of St. Gallen, Switzerland. Andrea Nastaj is a member of the Company’s Audit and Remuneration Committees. 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 57 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 fifth such formal evaluation for the year ended December 2022 took place in February 2023. The previous such evaluation had been for the year ended December 2021, which started in January 2022 and concluded in February 2022. Compared to the previous year, the responses to the various evaluation questionnaires 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 2023. minor updates. 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. 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. • Board reporting – How comprehensive, accurate, easy to understand, timely and appropriate is the information received by Board members. Board 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). TMT’s Board effectiveness questionnaire content had been updated in 2021 in light of the QCA’s “Board Performance Review Guide” published by the QCA in 2021, and as detailed in TMT’s 2021 Annual Report (Board effectiveness review). TMT therefore continued to make use of the same board effectiveness questionnaire to conduct its 2022 evaluation, with some • 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. C O R P O R A T E G O V E R N A N C E 58 The Board effectiveness evaluation concluded that the Board is confident that it is addressing the key issues facing the company at its stage of development, size, business and operating model needs, complexity and shareholder structure. The Board was also confident it is maintaining its competitive advantage and examining the creation of new advantages and strengths. Audit Committee effectiveness 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. 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. The evaluation addressed the following items: • 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 Remuneration Committee effectiveness • 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. 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 2020. Nomination Committee effectiveness 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. Disclosure Committee effectiveness The Disclosure Committee conducted an annual review in 2022 of its procedures, performance, constitution and terms of reference, which concluded it was operating effectively. Individual effectiveness 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 59 PRINCIPLE 8 Promote a corporate culture that is based on ethical values and behaviours PRINCIPLE 9 Maintain governance structures and processes that are fit for purpose and support good decision-making by the board 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. In 2021, TMT started formalising its ESG Policy under the guiding principles that it be relevant, realistic and accountable, and finalised it as published in its Interim Results 2022. Starting with 2022 and going forward, TMT will also be providing an annual update on ESG developments in TMT’s portfolio. The Company has been monitoring and following ESG issues before they reached the mainstream agenda. As such, TMT has made a number of investments since inception in ESG-focused companies that also meet TMT’s investment objectives. 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. 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. C O R P O R A T E G O V E R N A N C E 60 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. The Board’s committees The Board is assisted by various standing committees which report regularly to the Board. The Board has formally established Audit, Remuneration and Nomination Committees in accordance with the recommendations of the QCA Corporate Governance Code (“QCA Code”) as well as a Disclosure Committee, which was established in 2021. 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. Details of the committees of the Board are set out below. Audit Committee The Audit Committee should meet at least twice a year and currently comprises James Mullins and Andrea Nastaj being non-executive members of the Board, with James Mullins appointed as chairman. The Audit Committee reviews its terms of reference annually. 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; • 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; • 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 Andrea Nastaj, 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. 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 61 Nomination Committee Share dealings 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. Disclosure Committee The Company has established a Disclosure Committee, which considers matters relating to the management and disclosure of inside information by the Company. The Disclosure Committee currently comprises Alexander Selegenev, German Kaplun, Levan Kavtaradze and Andrey Konstantinov, with Alexander Selegenev appointed as Chairman. Andrey Konstantinov is the Company’s Legal Counsel. 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: • 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 (save where such communications have been delegated to the Disclosure Committee of the Board in accordance with the terms of reference of the Disclosure Committee); • 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 compliance. The Company has adopted a share dealing code and all Company directors, officers and employees receive annual training on the share dealing code and insider dealing requirements (including, without limitation, the provisions of MAR). The share dealing code was updated in 2021 and approved at the Board of Directors meeting held in March 2022. 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. Conflicts of interest policy The Company’s directors, officers and employees (“Applicable Persons”) may not: (a) appropriate for their benefit, or for the benefit of any family member or any other third person, any business opportunity that comes to their knowledge and that may directly or indirectly relate to, compete or lead to competition with, or might be of benefit to, the Company’s business or (b) divert or redirect any business opportunities away from the Company. It is an Applicable Person’s responsibility to disclose any transaction or relationship that could reasonably be expected to give rise to a conflict of interest with the Company to the Initial Investment Committee, which shall be responsible for determining whether such transaction or relationship constitutes a conflict of interest. From time to time, Applicable Persons may want to personally invest in certain opportunities that may fall within the Company’s Investing Policy or may otherwise conflict with the Company’s interests. In order to avoid conflicts of interest and ensure such Applicable Persons’ continuing focus on their TMT-related duties, the Company has adopted a Conflict of Interest Policy. As the Company grows, the directors will ensure that the governance framework remains in place to support the development of the business. C O R P O R A T E G O V E R N A N C E 62 PRINCIPLE 10 Communicate how the company is governed and is performing by maintaininga 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 Andrea Nastaj. 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 once in March 2022 to approve the 2021 Annual Report & Accounts. The aforementioned Audit Committee meeting was attended by James Mullin (Chairman) and Petr Lanin (Non-executive director and Audit Committee member at the time) Remuneration committee report The Company has established a remuneration committee, which comprises James Mullins (Chairman) and Andrea Nastaj. The remuneration committee met once in April 2022 to discuss and approve the allocation of the 2021 bonus pool. The aforementioned Remuneration Committee meeting was attended by James Mullin (Chairman) and Petr Lanin (Non-executive director and Remuneration Committee member at the time). Nomination committee report The Company has established a nomination committee, which comprises James Mullins (Chairman) and Alexander Selegenev. The nomination committee met once in May 2022 to discuss and approve the appointment of Andrea Nastaj as Non-executive director. 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 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 2 0 2 2 C O R P O R A T E G O V E R N A N C E 63 ESG Policy Introduction As with most business sectors, technology has the capacity to make the world a better place. Given the high pace of technology innovation we are witnessing, TMT believes this capacity is intensified in the case of technology. However, technological innovation for its own sake is meaningless unless it results in tangible benefits in terms of productivity, improved user experience, higher efficiency, positive impact in its chosen sectors, improved profitability or other desired objectives. ESG evaluation can be carried out in a number of different ways. Among other factors, its effectiveness will depend on the questions being addressed, the principles being applied and the quality of data available. Indeed, at times the prioritising of some principles can have a negative impact on others, given the asymmetric nature of benefits that can sometimes arise. An example is when alleviation of poverty in the short term comes at a higher environmental cost. The social and economic fallout from the COVID-19 pandemic served to put the ESG agenda into sharper relief and has accelerated the intensity of focus. As an investing company, TMT has been monitoring ESG issues and taking them into account before they began to enter the mainstream investment agenda. TMT started to formalise its approach to ESG in its initial ESG Policy announced in its 2021 Annual Report. TMT holds minority positions in its portfolio companies and therefore can exert influence on ESG matters in two main ways: first, by screening investments for exclusion from investment and second, by engaging in constructive dialogue with portfolio companies and monitoring progress. The Company’s ESG policy reflects this approach. TMT itself, as an investing company with limited internal resources, has little impact on the environment. The Company’s team is mindful of reducing its travel, paper consumption, energy costs and other environmental impact wherever possible. TMT has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code for Small & Mid-Sized Companies, which already covers a number of well-established ESG items. TMT’s initial ESG policy is outlined below. E S G P O L I C Y 64 TMT’s 3 guiding ESG principles for portfolio companies: relevant, realistic and accountable TMT’s three ESG principles guide and inform potential portfolio companies of the Company’s approach to ESG and are at the core of what good ESG looks like. They are specific and challenging, whilst allowing portfolio companies to engage with them both at an earlier stage of development and as they grow in size. Relevant TMT’s approach TMT’s ESG policy is based on a 3-step approach: Step 1: Filter out by Exclusion list TMT’s exclusion list sets out the sectors, businesses and activities in which the Company will not invest due to having as their objective, or direct impact on, any of the following: 1) Slavery, human trafficking, forced or compulsory labour, or unlawful / harmful child labour. 2) Production or sale of illegal or banned products, or involvement in illegal activities. • Is the investee addressing ESG where it can make the greatest impact in terms of its business model? 3) Activities that compromise endangered or protected wildlife. • Has the investee undertaken an ESG materiality assessment and, if so, how has this informed its ESG framework? 4) Production or sale of hazardous chemicals, pesticides and waste. 5) Manufacture, distribution or sale of arms or • Have ESG red flags, as well as opportunities, been ammunitions. identified? Realistic 6) Manufacture of, or trade in, tobacco or drugs. 7) Manufacture or sale of pornography. • Is the investee developing an ESG roadmap as part of its business plan? 8) Trade in human body parts or organs. • Are the investee’s ESG objectives achievable and proportionate in view of its current resources? 9) Animal testing other than for the satisfaction of medical regulatory requirements. • What resources does the investee need to consider 10) Production or other trade related to unbonded in order to progress its ESG roadmap? asbestos fibres. Accountable Step 2: Assess level of ESG Engagement • How is the investee evaluating its ESG activities and engagement? Step 2 focuses on assessing how the proposed portfolio company incorporates ESG in its business model and company culture. • Is the investee conducting ESG benchmarking against its peers? • Does the investee review its ESG metrics and reporting process in view of latest ESG, scientific and technological developments? In its investment selection process, TMT examines how each potential investee company is addressing and incorporating ESG issues based on TMT’s 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 2 0 2 2 E S G P O L I C Y 65 principles of being relevant, realistic and accountable, feeding the results into a presentation to TMT’s Initial Investment Committee and the Formal Investment Committee. If necessary, remedial actions or areas for improvement are agreed with the investee company. For follow-on investments, TMT requires a formal update from the investee highlighting any divergence from TMT’s initial assessment. Step 3: Engagement with portfolio companies on ESG ESG by its very nature is a journey, which needs to adapt to changing environmental, social and governance dynamics, in view of latest developments. Two-way dialogue and engagement with portfolio companies is an essential part of this journey, in which both parties are sharing and learning. TMT therefore includes ESG topics as part of its continuous engagement with portfolio companies. E S G P O L I C Y 66 ESG developments in TMT’s portfolio As the understanding and application of ESG evolves over time, an increasing number of companies globally are focusing or seeking to incorporate ESG frameworks within their business models. TMT recognizes that a sound application of ESG objectives can help companies create a distinct offering that meets evolving customer requirements and makes for a stronger business model. TMT therefore takes into account an investee’s approach to ESG when reviewing investment opportunities alongside TMT’s main investment criteria, the latter being as follows: • 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 – companies that are already generating revenues (TMT’s typical minimum revenue threshold is US$100,000 per month) • Series A / Pre-Series – A stage TMT’s typical investment range: US$0.5m-2.5m • Viable exit opportunities – assessing potential exit scenarios from the start We classify TMTs’ portfolio companies according to their intensity of focus on ESG as part of their business model. To do this we review their stated level of engagement with the United Nations Social & Development Goal (UN SDGs). good progress in developing their business models and revenues. This gives us confidence that their ESG focus is leading to a distinct offering that meets market demand and strengthens their business model. Timbeter, a SaaS solution for quick and accurate timber measurement and data management, which is making the forestry industry more sustainable, profitable and efficient www.timbeter.com); SDG 13 & 15 eAgronom, which provides a unique combination of services to grain farmers: carbon programmes, an AI-powered consulting service and farm management software enabling farmers to build sustainable businesses and preserve nature (www.eagronom. com); SDG 13 & 15 Mobilo, an eco-friendly solution allowing users to digitally share contact details instead of using paper/ plastic business cards and turn meetings into leads (www.mobilocard.com); SDG 12 & 13 FemTechLab, Europe’s first tech accelerator focused on female founders (www.femtechlab.com); SDG 5 Go-x, US-based electric scooter hiring company (https://goxapp.com); SDG 11 & 13 Laundryheap, a professional laundry and dry cleaning company (https://www.laundryheap.co.uk); SDG 12 & 13 3S Money Club, an international payments service (https://3s.money); SDG 8 & 10 ESG-focused: Companies whose business objectives focus on one or more of the UN SDGs ESG-partial companies in TMT’s portfolio ESG-partial: Companies that address one or more of the UN SDGs in the way they conduct their business Non-ESG: Companies that do not focus or explicitly address one or more of the UN SDGs in the way they conduct their business ESG-focused companies in TMT’s portfolio At present, there are seven companies in TMT’s portfolio whose business objectives focus on one or more of the UN SDGs. During 2022 all of them made At present, there are eight companies in TMT’s portfolio that address one or more of the UN SDGs in the way they conduct their business. These are VertoFX, 3D Look, Bolt, Feel, Metrospeedy, Moeco, Muncher and My Device Inc., trading as Whizz. We continue to monitor developments in ESG initiatives among TMT’s portfolio companies in order to better evaluate their ongoing contribution to investees’ overall business models. 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 2 0 2 2 E S G D E V E L O P M E N T S 67 Directors’ Report For the year ended 31 December 2022 The Directors present their report and audited financial statements of the Company for the year ended 31 December 2022.. Further information on the Company’s results and financial position is included in the financial statements. Principal activity and review of the business The board has decided that it will not recommend a final dividend (2021: nil) TMT Investments Plc (“TMT” 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 loss for the year amounted to US$81,393,833 (2021: profit of US$86,711,815), which includes a loss on changes in fair value of financial assets at Fair Value through profit and loss (“FVPL”) of US$79,638,928 (2021: profit of US$98,741,409). 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 2022. One meeting of the Audit Committee, one meeting of the Remuneration Committee and one meeting of the Nomination Committee were held in 2022. The number of meetings attended by the Directors is set out below. Director Board meetings Audit Committee Remuneration Nomination meetings Committee Meetings Committee Meetings Yuri Mostovoy Alexander Selegenev Petr Lanin Andrea Nastaj James Mullins Total meetings 6 5 1 3 6 6 - - 1 1 1 - - 1 1 1 1 1 1 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 2022 and the date of this report, the Company’s issued share capital consisted of 31,451,538 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 27 March 2023. 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 2 0 2 2 I D R E C T O R S ’ R E P O R T 69 I D R E C T O R S ‘ R E P O R T 68 Directors’ Report continued Shareholders Number of ordinary shares % of issued ordinary share capital Macmillan Trading Company Limited Wissey Trade & Invest Ltd Ramify Consulting Corp Zaur Ganiev Canaccord Genuity Group Inc Merit Systems Inc. Menostar Holdings Limited Eclectic Capital Limited Others Total Concert Party 7,076,058 5,000,000 4,728,576 2,443,810 2,154,939 2,054,865 1,734,458 1,355,806 22.50% 15.90% 15.03% 7.77% 6.85% 6.53% 5.51% 4.31% 4,903,026 15.59% 31,451,538 100.00% 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 No. of Ordinary different to legal holder) Shares % of issued share capital Macmillan Trading Company Limited (“Macmillan”) Alexander Morgulchik 45.05%, German Kaplun 37.17%, Artemii 7,076,058 22.50% Iniutin 17.78%, Wissey Trade & Invest Ltd (“Wissey”) Andrey Kareev Ramify Consulting Corp. (“Ramify”) German Kaplun Merit Systems Inc. Artemii Iniutin Eclectic Capital Limited (“Eclectic”) Nika Kirpichenko Menostar Holdings Limited (“Menostar”) Dmitry Kirpichenko Natalia Inyutina (Adult daughter of Artemii Iniutin) Artemii Iniutin Vlada Kaplun (Adult Daughter of German Kaplun) Marina Kedrova (Adult Daughter of German Kaplun) German Kaplun Alexander Morgulchik Total I D R E C T O R S ‘ R E P O R T 70 5,000,000 4,728,576 2,054,865 1,355,806 1,734,458 727,156 380,877 363,578 363,578 138,938 138,938 15.90% 15.03% 6.53% 4.31% 5.51% 2.31% 1.21% 1.16% 1.16% 0.44% 0.44% 24,062,828 76.51% 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 as follows: Beneficial holder No. of Ordinary Shares % of issued share capital German Kaplun Andrey Kareev Artemii Iniutin Alexander Morgulchik Nika Kirpichenko Dmitry Kirpichenko Natalia Inyutina Vlada Kaplun Marina Kedrova Total NOTES: 7,497,458 5,000,000 3,694,092 3,326,702 1,355,806 1,734,458 727,156 363,578 363,578 23.84% 15.90% 11.75% 10.58% 4.31% 5.51% 2.31% 1.16% 1.16% 24,062,828 76.51% 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. 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: Yuri Mostovoy Non-executive Chairman Alexander Selegenev Executive Director James Joseph Mullins Independent Non-Executive Director Petr Lanin Andrea Nastaj Independent Non-Executive Director (resigned on 23 May 2022) Independent Non-Executive Director (appointed on 23 May 2022) 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 2 0 2 2 I D R E C T O R S ’ R E P O R T 71 Directors’ Report continued The Directors’ fees for 2022 and 2021 were as follows: Director Yuri Mostovoy Alexander Selegenev James Joseph Mullins Petr Lanin Andrea Nastaj 2022 2021 US$55,000 US$55,000 US$110,000 US$110,000 US$27,081 US$30,259 US$9,347 US$11,000 US$10,738 -- Subsequent events post the period end In January and March 2023, TMT received a total additional US$1.6 million dividend from Hugo, as part of the consideration for Hugo’s disposal of its food delivery and quick commerce business in Central America to Delivery Hero. In February 2023, TMT invested an additional US$0.1 million in Cyberwrite, an AI cyber insurance platform providing cybersecurity insights and risk quantification for businesses worldwide (www.cyberwrite.com). In February 2023, TMT invested an additional £45,861 in FemTech, a London-based technology accelerator focused on female founders (www.femtechlab.com). In February 2023, TMT received US$0.3 million from Backblaze, Inc., as a settlement payment in respect of TMT’s additional investment in Backblaze in 2021. In March 2023, Silicon Valley Bank (“SVB”), a key banking partner of TMT and many of its investee companies, experienced liquidity issues. As a result of the various measures implemented by the USA’s Federal Deposit Insurance Corporation and Federal Reserve, the Company expects to retain access to all its funds held at SVB and that therefore the developments regarding SVB are not expected to have any material impact on the financial position of TMT or any of its portfolio companies. Statement of Directors’ responsibilities in respect of the annual report and the financial statements 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 UK-adopted IFRSs 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 UK-adopted IFRSs, 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 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 are responsible for preparing the Annual Report and Accounts in accordance with applicable law and UK-adopted International Financial Reporting Standards (“IFRSs”). • 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. 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. On behalf of the Board of Directors Alexander Selegenev Executive Director 27 March 2023 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 2 0 2 2 I D R E C T O R S ’ R E P O R T 73 I D R E C T O R S ‘ R E P O R T 72 Independent Auditor’s Report To the shareholders of TMT Investments Plc for the year ended 31 December 2022 Opinion Conclusions relating to going concern We have audited the financial statements of TMT Investments PLC (the ‘Company’) for the year ended 31 December 2022 which comprise the statement of comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation of the financial statements is UK adopted international accounting standards, as applied in accordance with the provisions of the Companies (Jersey) Law 1991. In our opinion, the financial statements: • give a true and fair view of the state of the Company’s affairs as at 31 December 2022 and of the Company’s loss for the year then ended; and • have been properly prepared in accordance with UK adopted international accounting standards; and • have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included: • Analysing the financial performance and financial strength of the business based on recently audited annual results; and • Assessment of the liquidity of the business, including analysis of the quantum of investments that are readily realisable for cash; and • Evaluating the on-going liabilities profile of the business not including performance-based expenses such as bonus fees; and • Analysis of the share price over the past 12 months to ensure there have been no significant movements that suggest the Company’s reputation in the marketplace presents a material threat to going concern; and • Review of events and transactions subsequent to the balance sheet date that present a material threat to going concern. 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 Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. 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. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows: Materiality Measure 2022 2021 (based on 2022 approach) Materiality $4,034,679 $5,662,500 Basis for determining materiality Rationale for benchmark applied 2% of net assets 2% of net assets The Company’s principal activity of that of venture capital investment, as such The Company’s principal activity of that of venture capital investment, as such business performance is driven by the business performance is driven by the underlying value of investment assets held underlying value of investment assets held by the Company. Performance materiality $2,824,275 by the Company. $3,963,750 Basis for determining performance materiality Rationale for benchmark applied 70% of materiality 70% of materiality Given the judgemental nature of the valuation Given the judgemental nature of the valuation of investments as well as the Company’s AIM- of investments as well as the Company’s AIM- listed status a performance materiality has listed status a performance materiality has been applied reflecting that this is a higher been applied reflecting that this is a higher risk engagement. risk engagement. We reported all audit differences found in excess of our triviality threshold of $201,734 ($283,125) to the directors and the management board. 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. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. 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, I N D E P E N D E N T I A U D T O R S ’ R E P O R T 74 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 2 0 2 2 I N D E P E N D E N T I A U D T O R S ’ R E P O R T 75 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 by our audit. Valuation of investments US$195,260,535 (2021: US$265,454,136) Significance and nature of key risk How our audit addressed the key risk The Company’s investment strategy targets early stage/start-up businesses. To this end valuations of individual investments can be highly subjective, especially in the case of valuations linked to earnings-based multiples. Given the inherent uncertainty as well as the highly material nature of the balance in the statement of financial position this is considered to be a key risk area. Furthermore, as investments are carried at fair value through the profit or loss in the financial statements investment gains and losses in the year also drive underlying business performance. The Company’s investments accounting policy is outlined in note 2.6 of these financial statements. We reviewed the investments portfolio and selected a sample of individual investments to review in detail. The selection basis for these investments was based on their relative value in the statement of financial position as well as investments that applied valuation methodologies that involved increased inherent uncertainty. This sample covered 96% of the total stated investments in the financial statements. We confirmed the ownership percentage of each investment to appropriate signed documentation. Where investments are valued based on cost we have also vouched the initial cost of purchase to these documents as well. For equity-based valuations we have obtained the source documentation determining the fair value per share and assessed this for reasonableness of assumptions made. For earnings-based multiples we have obtained the valuation calculations and considered reasonableness of assumptions made, including the multiple applied. For listed market investments we have independently recalculated the value of the Company’s shareholding based on the market price as at 31 December 2022. In the case of all investments we considered potential impairment indicators that might suggest a material overstatement of the investment value. With respect to valuation methodologies subject to increased estimation uncertainty our specialist valuations team considered the reasonableness of the assumptions used. Key observations communicated to the Audit Committee While there is inherent uncertainty in the valuation of many of the Company’s investments, due to the very nature of the companies invested in, we have no material concerns over the appropriateness of the valuation methodologies applied, including individual assumptions made, with respect to investments reviewed as part of the statutory audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 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 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. Capability of the audit in detecting irregularities, including fraud Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to anti-bribery. 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 the Companies (Jersey) Law 1991. We communicated identified laws and regulations throughout our team and remained alert to any indications of non- compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements 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 2 0 2 2 I N D E P E N D E N T I A U D T O R S ’ R E P O R T 77 I N O T E S N T D O E P T E H N E D F E I N N T A N A C U D A L T O S T R A S T E R M E P E O N R T S T I I ’ 76 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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. Anne Dwyer BSc(Hons) FCA (Senior Statutory Auditor) For and on behalf of Kreston Reeves LLP Chartered Accountants Statutory Auditor London Date: (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of investments. Audit procedures performed by the engagement team included: of instances of non-compliance. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations and fraud, and review of the reports made by management; and • Assessment of identified fraud risk factors; and • Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud; and • Review of the integrity of banking records; and • Challenging assumptions and judgements made by management in its significant accounting estimates; and • Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and • Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and • Reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax and regulatory authorities; and • Review of the valuation methodology and associated assumptions for investments held; and • Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and • Use of data analytics in identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion. I N D E P E N D E N T I A U D T O R S ’ R E P O R T 78 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 2 0 2 2 I N D E P E N D E N T I A U D T O R S ’ R E P O R T 79 Financial Statements STATEMENT OF FINANCIAL POSITION At 31 December At 31 December 2022 USD 2021 USD Notes Non-current assets Financial assets at FVPL 10 195,260,535 265,454,136 STATEMENT OF COMPREHENSIVE INCOME Total non-current assets 195,260,535 265,454,136 (Losses)/Gains on investments Dividend income Total investment (loss)/income Expenses Bonus scheme payment charge Underpaid previous years’ bonuses Administrative expenses Operating (loss)/ gain Net finance income Currency exchange loss (Loss)/Gain before taxation Taxation 3 6 6 5 7 8 For the year ended 31/12/2022 For the year ended 31/12/2021 Current assets Notes USD USD Trade and other receivables (79,864,874) 98,741,409 Cash and cash equivalents 11 12 1,382,811 2,050,649 10,102,683 25,527,801 105,844 48,333 Total current assets 11,485,494 27,578,450 (79,759,030) 98,789,742 Total assets 206,746,029 293,032,586 - - (9,676,043) (372,556) Current liabilities Trade and other payables 13 5,012,099 9,904,823 (1,443,395) (1,924,650) Total current liabilities 5,012,099 9,904,823 (81,202,425) 86,816,493 9,729 - Total liabilities 5,012,099 9,904,823 (201,137) (104,678) (81,393,833) 86,711,815 Net assets 201,733,930 283,127,763 - - (Loss)/Gain attributable to equity shareholders (81,393,833) 86,711,815 Equity Total comprehensive (loss)/income for the year (81,393,833) 86,711,815 (Loss)/Gain per share Basic and diluted (loss)/gain per share (cents per share) 9 (258.78) 291.58 Share capital Retained profit Total equity 14 53,283,415 53,283,415 148,450,515 229,844,348 201,733,930 283,127,763 F I N A N C I A L S T A T E M E N T S 80 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 2 0 2 2 F I N A N C I A L S T A T E M E N T S 81 STATEMENT OF CASH FLOWS STATEMENT OF CHANGES IN EQUITY Operating activities Operating (loss)/gain Adjustments for non-cash items: For the year ended 31/12/2022 For the year ended 31/12/2021 Notes USD USD For the year ended 31 December 2021 and for the year ended 31 December 2022, USD Share capital Retained profit Note USD USD Total USD Balance at 31 December 2020 34,790,174 143,132,533 177,922,707 (81,202,425) 86,816,493 Gain for the year Total comprehensive income for the year - - 86,711,815 86,711,815 86,711,815 86,711,815 Changes in fair value of financial assets at FVPL 3 79,638,928 (98,600,052) Currency exchange loss Impairment of receivables Changes in working capital: Decrease/(Increase) in trade and other receivables Decrease in trade and other payables Net cash used in operating activities Investing activities Purchase of financial assets at FVPL Proceeds from sale/disposal of financial assets at FVPL Interest received 11 13 10 10 7 (201,137) (104,678) 249,060 - Issue of shares 18,493,241 - 18,493,241 (1,515,574) (11,888,237) Balance at 31 December 2021 53,283,415 229,844,348 283,127,763 418,778 (1,562,811) (4,892,724) 7,275,871 Loss for the period Total comprehensive loss for the year - - (81,393,833) (81,393,833) (81,393,833) (81,393,833) (5,989,520) (6,175,177) Balance at 31 December 2022 53,283,415 148,450,515 201,733,390 (9,608,593) (40,540,924) 163,266 18,489,994 9,729 - The financial statements were approved by the Board of Directors on 27 March 2023 and were signed on its behalf by: Alexander Selegenev Executive Director Net cash used in investing activities (9,435,598) (22,050,930) Financing activities Proceeds from issue of shares Net cash from financing activities - - 14,749,620 14,749,620 Decrease in cash and cash equivalents (15,425,118) (13,476,487) Cash and cash equivalents at the beginning of the year 25,527,801 39,004,288 Cash and cash equivalents at the end of the year 12 10,102,683 25,527,801 F I N A N C I A L S T A T E M E N T S 82 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 2 0 2 2 F I N A N C I A L S T A T E M E N T S 83 Notes to the Financial Statements For the year ended 31 December 2022 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 84 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 10 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 Investment 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 seeks to make investments in any region of the world. The Company invests in high-growth technology companies globally across a number of core specialist sectors. The Company’s objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation. Financial statements of the Company are prepared by and approved by the Directors in accordance with International Financial Reporting Standards, UK-adopted International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board (“IFRSs”). The Company’s accounting reference date is 31 December. 2. Summary of significant accounting policies 2.1 BASIS OF PRESENTATION 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. On 15 September 2021, the Company established 100%-owned subsidiary TMT Investments II GP Limited. As the subsidiary was dormant at the year-end, consolidated accounts have not been prepared. We consider this entity to be highly immaterial to the Company’s financial statements. 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 2 0 2 2 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 85 2.2 GOING CONCERN The Directors confirm that, after giving due consideration to the financial position and expected cash flows of the Company and due to availability of highly liquid investments readily realisable for cash should this be needed; 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. 2.3 SEGMENTAL REPORTING 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). 2.4 FOREIGN CURRENCY TRANSLATION (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. Foreign currency monetary items are translated using the closing rate (i.e. mid-market price investments). Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. (i.e. comparable company analysis and cost-based investments as these are effectively re-fair valued at each year-end). 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. Conversion rates, USD Currency As at 31/12/2022 Average rate, 2022 British pounds, £ Euro, € 1.2039 1.0676 1.2367 1.0537 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 86 2.5 CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, 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). In the periods presented, the Company did 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 All financial investments of the Company are measured at fair value through profit or loss and are subject to a fair value revaluation at year end date. The Company manages its investments with a view of 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 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. 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 2 0 2 2 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 87 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 mid-market price at the time. 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. 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. Transfers between levels of the fair value hierarchy, for the purpose of preparing these financial statements, are deemed to have occurred at the beginning of the reporting period. 2.7 NET FINANCE INCOME Net finance income comprises interest income on deposits. Interest income is recognised as it accrues in the statement of comprehensive income, using the effective interest method. Where an active market is established for an investment it is classified to level 1 with a mid-market price valuation methodology applied. Where observable market data becomes available for an investment, including for comparable companies within an active market, it is classified to level 2 with comparable company analysis used as the valuation methodology. The investment otherwise remains classified to level 3, with the cost of investment or price of recent investment valuation methodology applied. 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. 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 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 2.8 TAXATION The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. 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. The Company is incorporated in Jersey. There is no current tax expenses recognised in the Statement of comprehensive income as the income tax rate for Jersey companies is 0%. 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. 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 2 0 2 2 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 2.10 NEW IFRSS AND INTERPRETATIONS The following standards and amendments became effective from 1 January 2022, but did not have any impact on the Company: 2.12 ACCOUNTING ESTIMATES AND JUDGEMENTS • Amendments to IAS 16 “Property, Plant and Equipment” • Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Asserts” • Amendments to IFRS 3 “Business Combination”. 2.11 FUTURE IFRS CHANGES The following table summarises changes to IFRS adoption which is mandatory for periods beginning in 2023 and beyond: Standard Effective date Overview IFRS 17 Insurance Contracts 1 January 2023 (early adoption permitted) IFRS 17 will replace IFRS 4 Insurance Contracts, a temporary standard which permits a variety of accounting practices for insurance contracts. Many insurance entities will now be applying both IFRS 17 and IFRS 9 for the first time in annual reporting periods beginning on or after 1 January 2023. 1 January 2023 (early adoption permitted)) 1 January 2023 (early adoption permitted) The standard has been amended to clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Amendments to IFRS 17 – Initial Application of IFRS 17 & IFRS Comparative Information Amendments to IAS 1 - Presentation of Financial Statements Classification of Liabilities as Current or Non-current Amendments to IAS 1 and IFRS Practice Statement 2 – Making Materiality Judgements 1 January 2023 (early adoption permitted) Disclosure of Accounting Policies Amendments to IAS 12 – Income Taxes Deferred Tax related to Assets and Liabilities arising from a Single Transaction Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors Definition of Accounting Estimates 1 January 2023 (early adoption permitted) 1 January 2023 (early adoption permitted) The amendments to IAS 1 will require an entity to disclose material accounting policies. Accounting policy information is likely to be considered material if users need the disclosure to understand other material information in the accounts. The amendment to IAS 12 Income Taxes introduces an exception to the “initial recognition exemption” when the transaction gives rise to equal taxable and deductible temporary differences. The amendments introduce a definition for accounting estimates which is ‘monetary amounts in financial statements that are subject to measurement uncertainty’. Measurement uncertainty will arise when monetary amounts required to apply an accounting policy cannot be observed directly. In such cases, accounting estimates will need to be developed using judgements and assumptions. 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 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 yet 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. As summarised in note 10 the Company has investments held at year-end of US$87,192,406 (2021: US$6,590,954) classified as level 2 in the fair value hierarchy, valued on a comparable company analysis basis. The Company has a further US$85,075,197 (2021: US$195,716,742) classified as level 3, valued at cost or price of recent investment (less any currency exchange- related impairment charges). Generally, when impairments are used in the comparable company valuation methodology, impairments are allocated on a 50%-66% basis when management determine that there is increased uncertainty over the investee’s business prospects and/or exit strategy, or a 100% basis when management determine that it is unlikely that a successful exit outcome could be achieved. Readers of these financial statements should consider the inherent uncertainty principle involved when considering these investment valuations. 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 2 0 2 2 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 3. Gains (Losses) on investments Gross interest income from convertible notes receivable Net interest income from convertible notes receivable (Losses)/Gains on changes in fair value of financial assets at FVPL Impairment of receivables Other (losses)/gains on investment For the year ended 31/12/2022 USD For the year ended 31/12/2021 USD 40,012 40,012 41,290 41,290 (79,638,928) 98,600,052 (249,060) (16,898) - 100,067 Total (loss)/gain on investments (79,864,874) 98,741,409 During the year ended 31 December 2022, impairment losses related to receivables for previously disposed investments of US$249,060 were recognised (2021: none). 4. Segmental analysis GEOGRAPHIC INFORMATION The Company has investments in the following geographic areas: the USA, Estonia, the United Kingdom, Portugal, BVI, Cyprus and the Cayman Islands. Non-current financial assets As at 31/12/2022 Equity investments Convertible notes & SAFEs Cayman Islands BVI Estonia Cyprus Kingdom Portugal United USD USD USD USD USD USD USA USD Total USD 66,393,603 - 3,255,052 71,759,682 330,000 30,481,358 - 172,219,695 14,800,030 1,030,000 - 1,628,090 4,100,000 601,950 880,770 23,040,840 Total 81,193,633 1,030,000 3,255,052 73,387,772 4,430,000 31,083,308 880,770 195,260,535 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 Cayman Islands USD USA USD BVI USD United Estonia Cyprus Kingdom Portugal USD USD USD USD Total USD As at 31/12/2021 Equity investments Convertible notes & SAFEs 112,296,648 - 3,756,540 106,437,128 1,000,000 20,017,105 14,620,030 1,030,000 - 1,332,985 3,600,000 1,363,700 Total 126,916,678 1,030,000 3,756,540 107,770,113 4,600,000 21,380,805 5. Administrative expenses Administrative expenses include the following amounts: - - - 243,507,421 21,946,715 265,454,136 Staff expenses (note 6) Professional fees Legal fees Bank and LSE charges Audit and accounting fees Bank and LSE charges Other expenses For the year ended 31/12/2022 USD For the year ended 31/12/2021 USD 825,366 326,651 82,941 15,069 59,577 17,480 116,311 1,443,395 805,459 502,124 393,682 31,434 38,183 16,220 137,548 1,924,650 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 2 0 2 2 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 6. Staff expenses 7. Net finance income Directors’ fees Wages and salaries For the year ended 31/12/2022 For the year ended 31/12/2021 USD 212,166 613,200 825,366 USD 206,259 599,200 805,459 Interest income For the year ended 31/12/2022 USD For the year ended 31/12/2021 USD 9,729 9,729 - - Wages and salaries shown above include fees and salaries relating to the year ended 31 December 2022. 8. Income tax expense The Directors’ fees for 2022 were as follows: For the year ended 31/12/2022 USD For the year ended 31/12/2021 USD The Company is incorporated in Jersey. No tax reconciliation note has been presented as the income tax rate for Jersey companies is 0%. Alexander Selegenev Yuri Mostovoy James Joseph Mullins Petr Lanin Andrea Nastaj 110,000 55,000 27,081 9,347 10,738 212,166 110,000 55,000 30,259 11,000 - 206,259 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 7 (2021: 7). 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 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 10% 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. The Company`s bonus year runs from 1 January to 31 December. As the Company’s adjusted NAV decreased in 2022, no bonus was accrued and expected to be accrued for the year ended 31 December 2022. 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 9. (Loss)/Gain per share The calculation of basic gain per share is based upon the net losses for the year ended 31 December 2022 attributable to the ordinary shareholders of US$81,393,833 (2021: net gain of US$86,711,815) and the weighted average number of ordinary shares outstanding calculated as follows: Gain per share Basic (loss)/gain per share (cents per share) (Loss)/Gain attributable to equity holders of the entity For the year ended 31/12/2022 For the year ended 31/12/2021 (258.78) 291.58 (81,393,833) 86,711,815 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 31/12/2022 For the year ended 31/12/2021 31,451,538 31,451,538 31,451,538 31,451,538 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 2 0 2 2 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 10. Non-current financial assets Reconciliation of fair value measurements of non-current financial assets: Investments held at fair value through profit and loss - listed and unlisted shares (i) - promissory notes (ii) SAFEs (iii) - Shares to be issued (iv) Opening valuation Purchases (including consulting and legal fees) Disposal proceeds Impairment losses in the year Realised gain Unrealised (losses)/gains Closing valuation Movement in unrealised gains/ (losses) Opening accumulated unrealised gains Unrealised (losses)/ gains Transfer of previously unrealised gains to realised reserve on disposal of Investments At 31 December 2022 USD At 31 December 2021 USD 172,219,695 4,830,070 18,210,770 - 241,461,421 4,266,715 17,680,000 2,046,000 195,260,535 265,454,136 At 31 December 2022 USD At 31 December 2021 USD 265,454,136 9,608,593 (163,266) (1,280,016) - (78,358,912) 195,260,535 144,803,154 40,540,924 (18,489,994) - 6,294,635 92,305,417 265,454,136 195,706,888 (78,358,912) 111,980,464 92,305,417 (105,606) (8,578,993) Closing accumulated unrealised gains 117,242,370 195,706,888 Reconciliation of investments, if held under the cost and price of recent investment model: Historic cost basis Opening book cost Purchases (including consulting and legal fees) Disposals on sale of investment Impairment losses in the year Closing book cost 69,747,248 9,608,593 (57,660) (1,280,016) 78,018,165 32,822,690 40,540,924 (3,616,366) - 69,747,248 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 Valuation methodology Mid-market price Comparable company analysis Cost and price of recent investment At 31 December 2022 USD At 31 December 2021 USD 22,992,932 94,755,170 77,512,433 195,260,535 63,146,440 6,590,954 195,716,742 265,454,136 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 yet 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. Valuation methodologies can be changed from time to time, the following table shows the changes made for 2022 compared to 2021. These investments were held at cost or price of recent investments of the total value of USD 133,457,069 as at 31 December 2021: Company name 2022 2021 3D Look Affise Comparable company analysis Cost or price of recent investment Comparable company analysis Cost or price of recent investment Academy of change Comparable company analysis Cost or price of recent investment Bolt EstateGuru MEL Science Moeco PandaDoc Scalarr Comparable company analysis Cost or price of recent investment Comparable company analysis Cost or price of recent investment Comparable company analysis Cost or price of recent investment Comparable company analysis Cost or price of recent investment Comparable company analysis Cost or price of recent investment Comparable company analysis Cost or price of recent investment Study Space, Inc (EdVibe) Comparable company analysis Cost or price of recent investment Wanelo Comparable company analysis Cost or price of recent investment The list of fully impaired investments, in which the Company still maintained ownership as of 31 December 2022, was as follows: 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 2 0 2 2 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 Company name Rollapp UsingMiles/Help WW/Source Inc. Favim AdInch E2C Drupe Virool/Turgo Sixa Usual Beverage Co. StudyFree Total Investment amount (USD) Year of impairment 350,000 250,000 300,000 1,000,000 124,731 225,000 600,000 300,000 300,000 1,000,000 4,449,731 2018 2018 2018 2018 2020 2019 2017 2019 2022 2022 Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss. 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 When measuring the fair value of a financial instrument, the Company uses relevant transactions during the year or shortly after the year end, uses relevant transactions during the year or shortly after the year end, which gives an indication of fair value and considers other valuation 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 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 value is derived by reference to the most recent equity financing round or sizeable partial disposal. Fair value change is only recognised if that equity sizeable partial disposal. Fair value change is only recognised if that equity round or partial disposal involved a new external investor. From time to time, the Company may assess the fair value in the absence of a relevant round or partial disposal 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 independent equity transaction by relying on other market observable data and valuation techniques, such as the analysis of comparable companies and valuation techniques, such as the analysis 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 and/or comparable transactions. The nature of such valuation techniques the analysis. is highly judgmental and dependent on the market sentiment at the time of the analysis. 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 98 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 2 0 2 2 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 99 (i) Equity investments as at 31 December 2022: T T M M T T Investee company Date of initial investment Value at 1 Jan 2022, USD Additions to equity investments during the period, USD Conversions from loan notes, USD - - - - - - - - - - - - - - - - - Wanelo Backblaze Remote.it Anews Bolt 21.11.2011 602,447 24.07.2012 63,146,440 13.06.2014 1,512,643 25.08.2014 330,000 15.09.2014 103,375,800 PandaDoc 11.07.2014 16,185,773 Full Contact 11.01.2018 244,506 ScentBird Workiz 13.04.2015 6,590,954 16.05.2016 3,971,659 Usual/Vinebox 06.05.2016 450,015 Hugo 19.01.2019 3,756,540 MEL Science 25.02.2019 2,663,696 Qumata (Healthy Health) 06.06.2019 1,818,822 eAgronom 31.08.2018 447,087 Rocket Games (Legionfarm) Timbeter Classtag 16.09.2019 200,000 05.12.2019 221,688 03.02.2020 200,000 3S Money Club 07.04.2020 8,253,630 Hinterview 21.09.2020 891,107 Virtual Mentor (Allright) 12.11.2020 772,500 NovaKid 13.11.2020 2,949,855 N N O O T T E E S S T T O O T T H H E E F F I I N N A A N N C C I I A A L L S S T T A A T T E E M M E E N N T T S S 100 100 - - - - - - - - - - - - - - - - - - - - - I I I n N v V e s E t S m T e M n t E s N n T t S e r A i m N N R U e s A u L l t s R 2 E 0 P 2 O 2 R T 2 0 2 2 Investee company Gain/loss from changes in fair value of equity investments, USD Wanelo - Backblaze (40,153,509) Remote.it (1,381,443) Anews Bolt - (33,618,816) PandaDoc (5,341,305) Full Contact ScentBird Workiz Usual/Vinebox - - - - Disposals, USD Write-offs USD Value at 31 Dec 2022, USD Equity stake owned - - - - - - - - - - - - 602,447 4.69% 22,992,931 11.20% 131,200 1.64% (330,000) - - - - - - - 69,756,984 1.26% 10,844,468 1.17% 244,506 0.19% 6,590,954 4.18% 3,971,659 1.89% (450,015) - 1.91% Hugo (338,222) (163,266) MEL Science (1,758,040) Qumata (Healthy Health) eAgronom Rocket Games (Legionfarm) Timbeter Classtag - 7,591 - (8,168) - 2,046,000 3S Money Club 3,790,966 - - - Hinterview (78,377) Virtual Mentor (Allright) NovaKid - - - - - - - - - - - - - - - - - - - - - - - 3,255,052 3.55% 905,656 3.21% 1,818,822 2.52% 454,678 1.41% 200,000 1.26% 213,520 4.64% 200,000 1.66% 14,090,596 11.38% 812,730 2.52% 772,500 2.95% 2,949,855 1.51% N N O O T T E E S S T T O O T T H H E E F F I I N N A A N N C C I I A A L L S S T T A A T T E E M M E E N N T T S S 101 101 Date of initial investment Value at 1 Jan 2022, USD Additions to equity investments during the period, USD Conversions from loan notes, USD 17.11.2020 1,322,100 15.08.2019 1,378,282 21.08.2019 1,282,705 - - - - - - 13.08.2020 2,035,512 320,467 1,363,700 (i) Equity investments as at 31 December 2022: : (continued) Investee company MTL Financial (OutFund) Scalarr Accern Feel Affise 3D Look FemTech Muncher 18.09.2019 3,470,870 03.03.2021 1,000,000 30.03.2021 274,220 23.04.2021 2,059,999 CyberWrite 20.05.2021 500,000 Outvio VertoFX 22.06.2021 612,353 16.07.2021 1,132,999 Academy of change 02.08.2021 1,000,000 EstateGuru 06.09.2021 1,780,200 Prodly 09.09.2021 1,800,000 Sonic Jobs 15.09.2021 712,018 EdVibe (Study Space, Inc) 02.11.2021 1,500,001 1Fit (Alippe, Inc) 24.12.2021 500,000 Agendapro 03.09.2021 515,000 Laundry Heap 28.01.2022 SOAX Spin.ai Total 21.01.2022 17.12.2018 - - - 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 102 - - - - - - - - - - - - - - 1,325,393 4,000,000 - - - - - - - - - - - - - - - - - 964,102 Gain/loss from changes in fair value of equity investments, USD Disposals, USD Write-offs USD Value at 31 Dec 2022, USD Equity stake owned Investee company MTL Financial (OutFund) Scalarr Accern Feel Affise 3D Look FemTech Muncher CyberWrite Outvio VertoFX 1,243,818 - 1,591,179 (66,459) (1,675,190) (500,000) 536,386 1,647,396 475,741 (78,553) - Academy of change (670,000) EstateGuru (979,500) Prodly Sonic Jobs EdVibe (Study Space, Inc) 1Fit (Alippe, Inc) Agendapro - (92,009) (750,001) - - Laundry Heap (121,592) SOAX Spin.ai Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2,565,918 3.66% 1,378,282 7.66% 2,873,884 3.17% 3,653,220 11.11% 1,795,680 8.70% 500,000 3.77% 810,606 9.74% 3,707,395 6.10% 975,741 3.52% 533,800 4.00% 1,132,999 3.24% 330,000 7.69% 800,700 2.73% 1,800,000 4.39% 620,009 2.77% 750,000 7.36% 500,000 4.70% 515,000 2.00% 1,203,801 2.44% 4,000,000 9.41% 964,102 1.69% 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 2 0 2 2 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 103 241,461,421 5,645,860 4,373,802 (78,318,107) (163,266) (780,015) 172,219,695 (ii) Convertible loan notes as at 31 December 2022: Investee company Date of initial investment Value at 1 Jan 2022, USD Additions to convertible note investments during the period, USD Conversions USD Investee company Gain/(loss) from changes in fair value of convertible notes, USD Disposals USD Value at 31 Dec 2022, USD Term, years Interest rate, % ShareThis 26.03.2013 570,030 - Conte.ai/ Postoplan 08.12.2020 1,332,985 451,200 ShareThis - Conte.ai/ Postoplan (156,095) - - - (1,363,700) - - - - 1,030,000 589,300 Metrospeedy Feel MedVidi Laundry Heap - - - - - - - 570,030 1,628,090 1,000,000 - 1,030,000 601,950 4,830,070 5.0 1.0 - - - 1.09% 2.00% - - - - - - - 12,650 (143,445) Metrospeedy 16.07.2021 1,000,000 Feel MedVidi 08.10.2021 1,363,700 27.09.2021 - - Laundry Heap 21.11.2022 Total 4,266,715 2,070,500 (1,363,700) 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 104 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 2 0 2 2 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 105 (iii) SAFEs as at 31 December 2022: Investee company Date of initial investment Value at 1 Jan 2022, USD Additions to SAFE investments during the period, USD Conversions to equity, USD Investee company (964,102) Spin.ai Spin.ai Cheetah (Go-X) 17.12.2018 29.07.2019 300,000 350,000 Adwisely (Retarget) 24.09.2019 1,600,000 - - - Rocket Games (Legionfarm) 17.09.2019 1,200,000 250,000 Classtag Moeco StudyFree Aurabeat 03.02.2020 08.07.2020 200,000 500,000 08.12.2020 1,000,000 03.05.2021 1,030,000 Synder (CloudBusiness Inc) 26.05.2021 2,060,000 Collectly 13.07.2021 2,060,000 OneNotary (Adorum) 01.10.2021 500,000 - - - - - - - BaFood 05.11.2021 2,000,000 500,000 Educate online 16.11.2021 1,000,000 - My Device Inc 30.11.2021 850,000 200,000 Mobilo (Lulu Systems, Inc) 09.12.2021 1,030,000 13.12.2021 2,000,000 12.01.2022 - 942,233 - - Muncher Bairro Total 17,680,000 1,892,233 (964,102) - - - - - - - - - - - - - - - - Gain/(loss) from changes in fair value of SAFE investments, USD 664,102 - - - - - - - - - - - - - - - (61,463) 602,639 Disposals, USD Write-offs USD Value at 31 Dec 2022, USD - - - - - - - - - - - - - - - - - (1,000,000) - 350,000 1,600,000 1,450,000 200,000 500,000 - 1,030,000 2,060,000 2,060,000 500,000 2,500,000 1,000,000 1,050,000 1,030,000 2,000,000 880,770 (1,000,000) 18,210,770 Cheetah (Go-X) Adwisely (Retarget) Rocket Games (Legionfarm) Classtag Moeco StudyFree Aurabeat Synder (CloudBusiness Inc) Collectly OneNotary (Adorum) BaFood Educate online My Device Inc Mobilo (Lulu Systems, Inc) Muncher Bairro Total (iv) Shares to be issued as at 31 December 2022: Investee company Date of initial investment Value at 1 Jan 2022, USD Additions to equity investments during the period, USD Conversions from loan notes, USD Investee company Gain/loss from changes in fair value of equity investments, USD Disposals/ conversions, USD Value at 30 Jun 2022, USD 3S Money Club - 2,046,000 Total 2,046,000 - - - - 3S Money Club Total - - (2,046,000) 2,046,000 - - 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 106 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 2 0 2 2 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 107 107 11. Trade and other receivables 12. Cash and cash equivalents Prepayments Other receivables Interest receivable on promissory notes Interest receivable on deposit At 31 December 2022 At 31 December 2021 The cash and cash equivalents as at 31 December 2022 include cash on hand and in banks. USD 42,550 1,219,506 113,214 7,541 1,382,811 USD 53,412 1,917,843 79,394 - 2,050,649 Cash and cash equivalents comprise the following: Deposits Bank balances At 31 December 2022 At 31 December 2021 USD 2,502,188 7,600,495 10,102,683 USD - 25,527,801 25,527,801 The fair value of trade and other receivables approximate to their carrying amounts as presented above. The following table represents an analysis of cash and equivalents by rating agency designation based on Moody`s rating or their equivalent: Other receivables as of 31 December 2022 represented amounts due from the previously disposed investments in Klear, Volumetric (in the form of publicly traded shares of 3D Systems Inc.) and DepositPhotos. Bank balances A3 rating Baa3 rating Not rated Deposits A1 rating At 31 December 2022 At 31 December 2021 USD USD 7,587,687 25,512,940 2,447 10,361 3,296 11,565 7,600,495 25,527,801 At 31 December 2022 At 31 December 2021 USD 2,502,188 2,502,188 USD - - 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 2 0 2 2 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 109 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 108 13. Trade and other payables 15. Capital management At 31 December 2022 USD At 31 December 2021 USD 81,838 66,100 82,500 40,534 4,817,785 9,676,043 7,702 3,307 35,367 73,042 - 32,704 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. 5,012,099 9,904,823 16. Financial risk management and financial instruments Salaries payable Directors’ fees payable Bonus payable Trade payables Other current liabilities Accruals 14. Share capital The fair value of trade and other payables approximate to their carrying amounts as presented above. On 31 December 2022 the Company had an authorised share capital of unlimited ordinary shares of no par value and had issued ordinary share capital of: At 31 December 2022 At 31 December 2021 Share capital Issued capital comprises: Fully paid ordinary shares Balance at 31 December 2021 Issue of ordinary shares Balance at 31 December 2022 USD 53,283,415 Number 31,451,538 USD 53,283,415 Number 31,451,538 Number of shares Number of shares 31,451,538 - 31,451,538 29,185,831 2,265,707 31,451,538 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 110 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. Credit risk As at 31 December 2022 the largest exposure to credit risk related to convertible notes receivable and SAFEs (US$23,040,840), and cash and cash equivalents (US$10,102,683). The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each investee company. The credit quality of investments in equity shares and convertible promissory notes is based on the financial performance of the individual portfolio companies. For those assets that are not impaired it is believed that the risk of default is small and that capital repayments and interest payments will be made in accordance with the agreed terms and conditions of the Company’s investment. In other cases, an appropriate asset impairment is recorded to reflect the fair value. The exposure to credit risk is approved and monitored on an on-going basis individually for all significant investee companies. 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 was as follows: 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 2 0 2 2 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 111 At 31 December 2022 At 31 December 2021 USD 23,040,840 1,382,811 10,102,683 34,526,334 USD 21,946,715 2,050,649 25,527,801 49,525,165 Convertible notes receivable & SAFEs Trade and other receivables Cash and cash equivalents Market risk 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 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 fluctuations in interest and currency exchange rates. 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. At 31 December 2022 the Company had cash deposit of USD 2,502,188, earning a variable rate of interest. The Board of Directors monitors the interest rates available in the market to ensure that returns are maximized. 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 112 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 2022 was as follows: For the year ended 31/12/2022 GBP For the year ended 31/12/2022 EUR For the year ended 31/12/2021 GBP For the year ended 31/12/2021 EUR 171,705 177,998 534,672 294,597 (14,861) - (50,106) (1,215) 156,844 177,998 484,566 293,382 130,280 166,727 359,550 259,195 141,160 160,198 436,109 264,044 15,684 17,800 48,457 29,338 Current assets Cash and cash equivalents Current liabilities Trade and other payables Net (short) long position Net exposure currency Net exposure currency (assuming a 10% movement in exchange rates) Impact on exchange movements in the statement of comprehensive income The foreign exchange rates of the USD at 31 December were as follows: Currency British pounds, £ Euro, € 31/12/2022 31/12/2021 1.2039 1.0676 1.3477 1.1319 This analysis assumes that all other variables, in particular interest rates, remain constant. 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 2 0 2 2 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 113 Fair value and liquidity risk management 17. Related party transactions 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 2022, the cash and equivalents of the Company were US$10,102,683. The following are the maturities of current liabilities as at 31 December 2022: 18. Subsequent events The Company’s Directors receive fees and bonuses from the Company, details of which can be found in Note 6. Carrying amount Within one year 2-5 years More than 5 years Salaries Directors’ fees payable USD 81,838 66,100 USD 81,838 66,100 Bonuses payable 4,817,785 4,817,785 Trade payables Other current liabilities 7,702 3,307 7,702 3,307 Accruals 35,367 35,366 5,012,099 5,012,098 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 2022: Financial assets Level 1 USD Level2 USD Level 3 USD Level 4 USD Financial assets at FVPL 22,992,932 77,512,433 94,755,170 195,260,535 22,992,932 77,512,433 94,755,170 195,260,535 19. Control In January and March 2023, TMT received a total additional US$1.6 million dividend from Hugo, as part of the consideration for Hugo’s disposal of its food delivery and quick commerce business in Central America to Delivery Hero. In February 2023, TMT invested an additional US$0.1 million in Cyberwrite, an AI cyber insurance platform providing cybersecurity insights and risk quantification for businesses worldwide (www.cyberwrite.com). In February 2023, TMT invested an additional £45,861 in FemTech, a London-based technology accelerator focused on female founders (www.femtechlab.com). In February 2023, TMT received US$0.3 million from Backblaze, Inc., as a settlement payment in respect of TMT’s additional investment in Backblaze in 2021. In March 2023, Silicon Valley Bank (“SVB”), a key banking partner of TMT and many of its investee companies, experienced liquidity issues. As a result of the various measures implemented by the USA’s Federal Deposit Insurance Corporation and Federal Reserve, the Company expects to retain access to all its funds held at SVB and that therefore the developments regarding SVB are not expected to have any material impact on the financial position of TMT or any of its portfolio companies The Company is not controlled by any one party. Details of significant shareholders are shown in the Directors’ Report. 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 2 0 2 2 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 115 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 114 Directors and Professional Advisers DIRECTORS Yuri Mostovoy Non-executive Chairman Alexander Selegenev Executive Director Andrea Nastaj Independent Non-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 Strand Hanson Limited 26 Mount Row, Mayfair London, W1K 3SQ Cenkos Securities Plc 6-8 Tokenhouse Yard, London EC2R 7AS PUBLIC RELATIONS ADVISER JOINT BROKER Kinlan Communications 2-4 Exmoor Street London, W10 6BD Hybridan LLP 1 Poultry, London, EC2R 8EJ AUDITORS REGISTRAR Kreston Reeves LLP 2nd Floor 168 Shoreditch High Street London E1 6RA Computershare Investor Services (Jersey) Limited 13 Castle Street, St Helier, Jersey, JE1 1ES COMPANY WEBSITE www.tmtinvestments.com I D R E C T O R S A N D P R O F F E S S O N A L I A D V I S E R S 116 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 2 0 2 2 I D R E C T O R S A N D P R O F E S S O N A L I A D V I S E R S 117 Registered office: 13 Castle Street, St Helier, Jersey, JE1 1ES Tel. +44 1534 281 800 Fax. +44 8451 258 623 

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