2024-02-12 17:54:00
Annual Report 2023
DISCOVERING POTENTIAL
Contents
Investment Objective and Policy 1
Directors of the Company 2
Strategic Report including:
Chair’s Statement and Business Review 4
Fund Manager’s Review 7
Investment and Portfolio Analysis 11
Portfolio Breakdown by Sector and by Index 12
Section 172(1) Statement 13
Other Statutory Information 14
Corporate Governance Statement 16
Report of the Directors 20
Statement of Directors’ responsibilities 23
Directors’ Remuneration Report 24
Independent Auditor’s Report 27
Income Statement 32
Statement of Financial Position 33
Statement of Changes in Equity 34
Statement of Cash Flows 35
Notes to the Financial Statements 36
Officers and Financial Advisers 41
Annual Report for the year ended
31 December 2023
Company number
02933559
Athelney Trust
Waterside Court, Falmouth Road
Penryn, Cornwall TR10 8AW
1 | Athelney Trust plc | Annual Report 2023
Investment Objective
The investment objective of the Trust is to provide long-term growth in dividends and
capital, with the risks inherent in small cap investment minimised through a spread of
holdings in quality small cap companies that operate in various industries and sectors. The
Fund Manager also considers that it is important to maintain a progressive dividend record.
Investment Policy
The assets of the Trust are allocated predominantly to companies with either a full
listing on the London Stock Exchange or a trading facility on AIM or AQSE. The assets
of the Trust have been allocated in two main ways: first, to the shares of those
companies which have grown steadily over the years in terms of profits and dividends
but, despite this progress are undervalued by the market when compared to future
earnings and dividends; second, those companies whose shares are undervalued by
the market when compared with the value of land, buildings, other assets or cash on
their balance sheet.
2 | Athelney Trust plc | Annual Report 2023
Directors of the Company
Frank Ashton
Non-Executive Chair
Frank Ashton, aged 62, is a highly experienced senior manager and
independent management consultant. After leaving Cambridge
University with a Natural Sciences degree (Metallurgy & Materials
Science), he spent much of his career providing independent
management advice to companies in a wide variety of sectors. With
15 years spent at PricewaterhouseCoopers and KPMG (Operational
Due Diligence) and 5 years working in Strategy and M&A for
Cummins Inc, he has a proven track record in shareholder value
creation and governance, in providing strategic and operational
advice to both public and private companies in Europe and USA, as
well as working at a policy level for Government entities.
Dr Emmanuel Clive Pohl AM
Managing Director
Manny Pohl, aged 70, is the Chair and CIO of investment house EC
Pohl & Co which he founded in June 2012 and has led through its
evolution into today’s independent, highly acclaimed Australian
fund manager. Manny holds engineering and MBA degrees from
the University of Witwatersrand and a doctorate in Business
Administration (Economics) from Potchefstroom University.
Manny has over 30 years of investment experience, initially as
head of research for leading South African broking firm, Davis
Borkum Hare, followed by Westpac Investment Management in
Australia after he emigrated to Australia in 1994. Manny founded
Hyperion Asset Management in 1996 and left in 2012. He has
served on the Boards of several major corporations in his native
South Africa, the UK and his adopted home Australia. In 2019
Manny was recognised in the Queen’s Birthday honours list for
significant service to the finance sector, and to the community.
3 | Athelney Trust plc | Annual Report 2023
Directors of the Company
Continued
Simon Moore
Non-executive Director
Simon Moore, aged 63, is a consultant Senior Investment
Analyst. He has been an investment trust analyst since 1994 and
has worked with several stockbrokers in the City of London
including Williams de Broe, Teather & Greenwood and Collins
Stewart. He was also Senior Investment Manager at Seven
Investment Management and Head of Research at Tilney
Bestinvest, Senior Investment Analyst at EQ Investors. Simon
has been a long-standing member of two important committees
at the Association of Investment Companies: the Statistics
Committee and the Property and Infrastructure Forum. In 2013
and 2014 Simon was chosen as one of the Citywire Wealth
Manager Top 100 most influential people in UK private client
fund selection. Simon is a scientist by training and has worked
at two start up UK biotechnology companies, before passing on
his knowledge and passion as a science tutor for the Open
University. He has a Biochemistry BSc from Imperial College, and
an MSc in Computer Modelling of molecules from Birkbeck
College. He is a member of the UK Society of Investment
Professionals and the CFA institute. During 2020 he was
appointed as a Non-Executive Director of Home REIT Plc.
Jason Pohl
Alternate Director
Jason Pohl, aged 34, has ten years of professional experience in
fundamental bottom-up investment research at ECP Asset
Management Pty Ltd.
Originally pursuing a legal career, Jason spent his initial stages of
his professional career working for Ashurst (previously Blake
Dawson) before being admitted as a Legal Practitioner in the
NSW Supreme Court. Jason has a B.Com, LLB, and an MBA from
Bond University.
During 2023 he was appointed as a Director of Global Masters
Fund Limited, a company listed on the Australian Securities
Exchange.
4 | Athelney Trust plc | Annual Report 2023
Strategic Report
Chair’s Statement and Business Review
Dear Shareholder
I am pleased to present the Annual Financial Report for the year to 31
December 2023.
The Strategic Report section of this Annual Report has been prepared to
help all Shareholders understand the drivers of performance in the past
year, how the Company operates and to assess its performance.
Financial Summary and Overview
The key performance indicators are as follows:
Year ended
31 December
2023
Year ended
31 December
2022
%
Change
NAV total return
(4.4)%
(26.2)%
n/a
Revenue return per ordinary
share
7.7p
6.9p
11.4%
Total return per share
(0.6)p
(81.3)p
n/a
Share price
185.0p
210.0p
(11.9)%
Net asset value per ordinary
share
209.1p
219.4p
(4.7)%
Discount to NAV per ordinary
share
11.5%
4.3%
n/a
Cumulative value of
shareholder investment
(net asset value plus
cumulative dividends
per
ordinary share)
218.8p
229.0p
(4.4)%
Shareholders’ funds
£4,512m
£4,734m
(4.7)%
• The Trust’s Investment performance over 12 months as measured by
NAV total return, which is the change in NAV plus the dividend paid,
was minus 4.4% (2022: minus 26.2%).
• The interim dividend of 2.2p per share was paid on 22 September
2023.
• Your Board recommends a final dividend of 7.6p per share increasing
a total dividend payable for the year to 9.8p (2022: 9.6p) an increase
of 2.0%.
• This is the 21st successive year of progressive dividends and
importantly returns the Trust to the “Dividend Heroes” list
maintained by the AIC, a list of investment companies that have
consistently increased their dividends for 20 or more years in a row.
Performance
The year under review was disappointing. Equity markets were under
pressure throughout with several headwinds, and investment trusts
were unable to attract investors away from the lure of gilts and passive
funds. The Company suffered negative absolute returns and has
underperformed compared to the FTSE 250 largely because of ongoing
negative sentiment for UK smaller companies and comparatively high UK
interest rates through the year.
In the financial year to 31 December 2023 and on a total return basis,
the Company’s net asset value (NAV) fell by 4.7%, the share price fell by
11.9% compared to a fall of 8.2% in the AIM All-Share index.
The last 12 months created further surprises and uncertainty for
UK investors, as inflation dropped more slowly than in other G7
countries and the resulting medicine of frequent interest rate rises
added to geo-political stressors. For a higher rate UK taxpayer, the
resulting yield on gilts translated to some unusually high potential
returns, and without the equity risk premium, in general bonds
became a more attractive investment. High quality small company
stocks generally lost ground to larger, liquid stocks and after wider
market ‘poor returns’ of the past few years, investors were
generally less interested in investment trusts. Discounts to share
price widened for many investment trusts and remain, on average,
in double-digit territory at 10.0% for UK Smaller Company
investment trusts on 31 December 2023.
Over a 5 year period we have outperformed the FTSE 250 by 3.6%
points, (per annum and before management fees, expenses and
dividends) and maintain that compounded investment into our
portfolio still provides attractive returns compared to
alternatives. Further details on the portfolio are under the Fund
Manager comments later in this report and historical figures in
Table 1 on page 7.
On the positive side, the UK and world economy in general for
2023 have proved to be more resilient than expected as we
recover from the impact of Covid; the widely feared deep
recession has not materialised (although we may be in a UK
technical recession after the late December downward revision of
Q3 to a contraction of 0.1% by the ONS) and there are signs that
peak interest rates may have been reached in European, UK and
US economies.
We believe there is now a strong case for investment in UK
equities such as those held by the Trust, which offer great value
for money. Our quality portfolio, plus the discount, translate into
a strong upside, if undervalued UK stocks get the investment
attention they deserve based on fundamentals, and the general
discount shrinks. This would be a double benefit for those
considering further or a new investment in our investment trust.
Dividend and Earnings
I am pleased to report the total revenue earned from the
Company’s portfolio rose 19.6% to £219,366 from £183,273 last
year which is the highest total since 2019. Our earnings per share
rose to 7.7p from 6.9p, an increase of 11.6%. This improved
performance is a welcome return to more normal, pre-COVID
figures and further evidences the quality of the portfolio
companies and their commitment to shareholder value.
The board is pleased to recommend an increased final dividend
of 7.6p, which, subject to shareholder approval at the next AGM,
will be paid on 11 April 2024 to those shareholders on the register
at 8 March 2024. Once added to the interim dividend, this brings
the full dividend for 2023 to 9.8p a 2.0% increase on the full
dividend for 2022.
5 | Athelney Trust plc | Annual Report 2023
Strategic Report
Chair’s Statement and Business Review
Continued
I am delighted this would maintain our progressive dividend
performance for the 21
st
year and maintain our highlighted ‘Dividend
Hero’ status as conferred by the AIC.
Board and Company Developments
The Board places significant importance on corporate governance and
compliance with the AIC and UK Corporate Governance Codes. Full
details are set out in the Corporate Governance section on pages 16
to 19.
We note the Financial Conduct Authority’s Policy Statement PS22/3
of April 2022 to comply or explain in relation to board diversity and
inclusion, with changes to the Listing Rules commencing in 2023 for
the Trust. As a small, low-cost fund, your Board continues to assess
how best to structure and plan for a board that meets shareholder
and regulatory needs, has continuity, stability and reflects prudent
management of costs.
In terms of controllable costs, I confirm a continued freeze on the non-
executive director’s fee (£10,500) with no premium for Chair positions,
which is comparable to the NED fee of other, similarly sized funds.
Our Ongoing Charges Figure (OCF, calculated using the AIC
recommended Ongoing Charges methodology, taking annualised costs
that would reasonably be incurred if there was no trading of the
investee shares, divided by the average of published monthly NAV) is
3.84% (2022: 2.89%).
The increase is due to the decrease in NAV through 2023, and also
£24,507 net increase in Ongoing Charges in 2023 compared to 2022.
While we remain a small fund, reducing the OCF will continue to be a
challenge, however every effort is made to do this, while applying
appropriate time and resources to growth and good governance.
As we continue to explore ways to grow the fund, the Company is now
using the specialist marketing services of Colchester-based Equity
Development Ltd. We look forward to the impact this will make in the
coming year and continue to take opportunities for the Fund Manager
to explain his investment approach, including use of Goodacre Events
such as the UK Smaller Companies Conferences which can be joined
online.
I regret the sudden resignation of Hazlewood’s LLP as our auditor on
the 9
th
October 2023 because of FRC-driven increased regulatory costs
and staff impact for their public interest entity (PIE) audits. Along with
some other smaller auditors, Hazlewood’s withdrew its PIE registration
at very short notice.
We are delighted to report that after an appropriate, shortened process
to review a number of alternative auditors, the Board has accepted the
recommendation of the Audit Committee and appointed Moore
Kingston Smith LLP as auditor for this financial year on 20 October 2023.
We welcome general audit reform, after recent, surprising company
failures however believe there has been insufficient assessment of the
net effect of these new regulations: Other companies like us had to
replace auditors after abrupt resignations in recent months and also
found there is less choice and capacity than might be expected.
Our audit fee will quadruple in this transition mainly due to the
extra PIE costs and implications for our auditor; the audit approach
itself is largely the same as before. We hope that shareholders and
investors in general see benefits as the regulatory changes
continue to take effect.
Environmental, Human Rights, Employee,
Social and Community Issues
The Board consists entirely of two Non-Executive Directors and
one Managing Director who was the sole employee. The
Company has no direct impact on the community or the
environment, and as such has no environmental, human rights,
social or community policies. In carrying out its investment
activities and in relationships with suppliers, the Company aims
to conduct itself responsibly, ethically and fairly.
Environmental, Social and Governance factors are considered as
part of the commercial
evaluation of investee companies.
Annual General Meeting (AGM)
We are pleased to invite shareholders to our AGM at the offices
of Druces LLP, Salisbury House, London Wall, London EC2M 5PS
on 21 March 2024 at 12.00 noon. We encourage attendance in
order to meet the board and hear from the Fund Manager Dr
Manny Pohl.
There will be an opportunity to ask questions during the AGM and
also afterwards in a less formal environment.
We encourage all shareholders to vote on the resolutions, all of
which the board endorses ahead of the deadline at 12 noon on 19
March 2024. Details on how to vote and also on the AGM, and its
resolutions are in the Notice of AGM, which is delivered with this
Annual Report. Further copies are available on our website, or
from the Company Secretary.
An Independent Board
The Directors in place at the time of signing these accounts are:
• Myself, Frank Ashton – Non-Executive Chair
• Simon Moore – Non-Executive Director, Chair of Audit
Committee, Chair of Remuneration Committee
• Dr Manny Pohl – Managing Director, Fund Manager
• Jason Pohl – Alternate for Dr Manny Pohl
We currently have three directors who together make up an
independent Board under the AIC Code of Governance 2022.
Capital Gains
During the year the Company realised capital profits before
expenses arising on the sale of investments in the sum of £50,853
(2022: £382,704).
6 | Athelney Trust plc | Annual Report 2023
Strategic Report
Chair’s Statement and Business Review
Continued
Portfolio Review
Additional Holdings Purchased
Additional and new holdings of AEW UK REIT, Alpha Group
International, Cake Box Holdings, Fevertree Drinks, Impax Asset
Management, NWF Group, Paypoint, Spirax-Sarco Engineering and
Treatt were acquired.
Holdings Sold or Trimmed
Clarke (T), Games Workshop, Liontrust Asset Management,
Londonmetric Property, Rightmove, Smart Metering and Target
Healthcare REIT.
Outlook
This has been a difficult year, however there is evidence of a change in
the investment landscape in particular the likely reduction of interest
rates, that I believe will bring multiple benefits. We remain cautious
and yet also have confidence in our Managing Director and Fund
Manager, Manny Pohl and his team in providing for the needs of the
Company and its shareholders.
Last year I referred to Charlie Munger and just one of his many
quotations as a champion investor and Vice Chair of Berkshire
Hathaway. It is sad to hear of his death at 99 years but also a chance
to remember that he was no stranger to personal tragedy. Talking
about hardship recently he said “you can cry alright. But you can’t
quit”. Similar things might be said about investing; there can be
disappointments and frustrations, often due to circumstances outside
our control, however we will not quit on fundamentals and
commitment to value. Over the long term you will win; this next year
should see improved performance.
Thank you for your continued support of the Company.
Frank Ashton
Non-Executive Chair
12 February 2024
7 | Athelney Trust plc | Annual Report 2023
Strategic Report
Fund Manager’s Review
Reflecting on 2023
As we reflect on the past year, the investment climate has been
marked by significant events and trends shaping investments and
the general economic outlook. The ongoing geopolitical tensions,
notably the Russian invasion of Ukraine and the escalated conflict
between Israel and Hamas have contributed to a climate of political
uncertainty.
These events have had far-reaching economic impacts, further
complicating the investment environment.
The following chart of the FTSE 250 Index provides some idea of
events that have impacted the market over the past twelve months.
Chart 1: FTSE 250 Index
The required equity risk premium remained high throughout the
year, reflecting the market's sensitivity to these global events and
amidst these challenges, we've seen global inflationary pressures
prompt aggressive interest rate responses from central banks
through time. Recently, the rhetoric from central banks has
softened, suggesting that while further rate hikes are possible, rates
might stabilise near current levels for the foreseeable future.
The macro factors affecting the markets and our performance are
covered in the Chair’s statement and our portfolio has performed
well when compared to the small company indices as shown in Table
1.
However, the NAV has been negatively affected by rising costs,
predominantly audit fees and our large dividend payout (DY:5.2%)
as compared to the FTSE 250 (DY:3.6%) in particular.
Table 1: Performance Metrics
Compound Growth Rate
1 Year
2 Years
3 Years
5 Years
10 Years
ATY Portfolio*
3.3%
-11.8%
0.1%
6.0%
n.a.
ATY NAV
-4.7%
-17.9%
-6.4%
-1.5%
-0.2%
FTSE 250
4.4%
-8.4%
-1.3%
2.4%
2.1%
FTSE 100
3.8%
2.3%
6.2%
2.8%
1.4%
FTSE Small Cap
3.0%
-7.2%
1.1%
4.4%
3.8%
AIM All Share
-8.2%
-20.8%
-12.9%
-2.3%
-1.1%
* Portfolio performance is time weighted, before management fees, expenses and dividends and is only available from when Dr Manny Pohl AM commenced
managing the portfolio.
While macro/political events have dominated the media,
technological advancements have been transformative with
Generative Artificial Intelligence (AI) models emerging as a dominant
theme in business discussions worldwide. While analysts and
researchers have used algorithms to analyse and use data sets to
make predictions for decades, it was the release of NVIDIA’s CUDA
(compute unified device architecture) software for developers in
2006 which enabled scientists to apply parallel processing in
complex simulations and data analysis. Parallel processing utilises
two or more processors (CPUs or GPUs) to handle separate parts of
an overall task, laying the foundation for machine learning. Within
this context, even OpenAI would take 300 years to train ChatGPT 3.5
on the fastest single GPU, but with parallel processing and using
1024 GPUs, it can be done in 34 days. The resultant development of
large language models like ChatGPT, is revolutionising industries.
These developments highlight the importance of investing in
businesses that can harness these technologies to enhance their
competitive advantage and growth potential.
8 | Athelney Trust plc | Annual Report 2023
Strategic Report
Fund Manager’s Review
Continued
Chart 2: Contributions to NAV in the period 1 January 2023 to 31 December 2023 (pence per share)
In this regard, the U.S. and China are leading the AI development
race, with significant investments pouring into this technology, while
Europe appears to be a laggard. This rapid growth has prompted
governments, particularly the U.S., to develop regulations to ensure
the safe and trustworthy evolution of these technologies, with many
trying to get to grips with the inherent risks associated with the use
of the technology, particularly in the areas of cyber security and
privacy.
The recent executive order by US President Joe Biden has been
designed to impose national rules on the fast-moving technology to
ensure “safe, secure and trustworthy” development. More
importantly, this will enable businesses to understand the ground
rules and legitimately organise and obtain data without breaching
data privacy regulations.
In 2023, ChatGPT consumerised these AI developments that had
previously been happening behind closed doors, enabling text,
language, speech, and image recognition to cross over human
capability. The net result is significant reinvestment in technology,
showing up in GPU demand from the Big 5 Tech companies, the
owners of proprietary hardware (e.g., NVIDIA) and large-language
models (e.g., Microsoft, Google, Amazon, Meta).
Of particular interest for business are “Large Language Models”
(LLM), which can train on billions of parameters to develop refined
algorithms for new use cases. Clearly, it is also of the utmost
importance to ensure that the businesses in which we invest need to
utilise these emerging technologies and harness them effectively to
expand their economic footprint and enhance investment value.
To this end, our investment process is centred on assessing
businesses' Dynamic Capability (DC). DCs are pivotal, change-
oriented capabilities that empower firms to adapt and reconfigure
their resources in response to evolving customer demands and
competitive landscapes. This includes a firm's agility in R&D, its
ability to enter new markets with nimble operational structures, the
consolidation of central support functions following acquisitions,
and the replication of successful processes or systems in new
geographical or business sectors.
The impact of early adoption of AI cannot be overstated; the
potential economic unlock will be meaningful. AI's potential to
transform economic landscapes is immense, as it enables the
efficient reading and structuring of vast amounts of corporate data
coupled with powerful workflow automation tools (think a far more
powerful Excel macro). This combination is set to revolutionise
business processes, much like the advent of computer mainframes
in the 1980s, significantly reducing manual accounting work.
By investing in quality companies that are early (effective) adopters
of AI, investors can position themselves at the forefront of this
transformative wave, ready to reap the economic benefits. As we
navigate this new AI era, we focus on meticulously evaluating
companies' business models, financials, and growth plans. This
approach helps us identify quality growth stocks poised for long-
term success, leveraging AI to capitalise on market trends and
demand. In addition, we continue to explore the advancements in
AI that present potential for substantial long-term returns.
Identifying and investing in companies leading these innovations
position portfolios to benefit from future market transformations.
In this regard, while we are certainly pleased to book a handsome
profit on our investment in Smart Metering as a result of the
takeover bid, this was a company which most certainly could have
benefitted from future developments in AI. The continued takeover
of small companies in the UK market is a worrying feature as our
process aims to find high-quality businesses that we would like to
own for the very long-term. However, it does confirm that
valuations are very favourable at present.
219.4
209.1
-2.7
10.2 -9.7
0.0
-6.5
-1.6
0.0
50.0
100.0
150.0
200.0
250.0
NAV 2022 Investment
Performance
Investment
Income
Dividend
Paid
Management
Fee
Tax Operating
Expenses
NAV 2023
(+21.05)(+21.05)(+21.05)(+21.05)(+21.05)(+21.05)
9 | Athelney Trust plc | Annual Report 2023
Strategic Report
Fund Manager’s Review
Continued
During the past year, we increased our exposure to the AEW UK REIT
at the expense of the Target Healthcare REIT, maintaining our overall
exposure to the Property Trusts in recognition of the need to
maintain the dividend paid to shareholders within a growth style
portfolio. In the past twelve months we added two new names to
the portfolio:
Alpha Group: (LSE: ALPH)
Alpha is a leading non-bank provider of financial solutions to
corporates and institutions operating internationally across three
continents. Alpha has two operating divisions, the FX Risk
Management division which focuses on supporting corporate and
institutional clients who need to buy or sell currency to match
commercial transactions involving either the buying and/or selling of
goods and services overseas; and the Alternative Banking Solutions
division which provides multi location banking services at more than
50 countries to alternative investment managers for purposes such
as asset sales, purchases, or distributions. Using cutting-edge
technologies to provide an enhanced alternative to traditional
banks, Alpha should be able to deliver superior shareholder returns
over the medium to long-term.
Cake Box Holdings (LSE: CBOX)
Cake Box Holdings listed on the London Stock Exchange’s AIM
Market in 2018 and has expanded to more than 230 stores
throughout the UK. It is the market leader in premium celebration
products that exclude egg, meat products and alcohol to consumers
including those who have dietary or religious restrictions. The
company has adopted an e-commerce, data-driven approach to
drive future growth and aims to optimise their store rollout based
on customer data to both improve new store performance as well as
refine their franchisee and property strategy. With a target of
doubling to 400 stores, CBOX should be able to deliver superior
shareholder returns over the medium to long-term.
Looking ahead
In the evolving technological landscape, it's become increasingly
clear how pivotal AI will be in shaping future strategies. While short-
term applications of AI, such as customer service chatbots and co-
pilot productivity tools, are becoming more commonplace, the
broader vision of leveraging AI to revolutionise corporate strategy is
still unfolding. This transition, particularly in the context of
leveraging vast corporate data, may be gradual due to inherent
corporate risk aversion.
During my recent flight to attend the Global Federation of
Competitiveness Councils meeting, the following Socrates (470 BC)
quote came to my attention: “The secret of change is to focus all of
your energy not on fighting the old, but on building the new.” This
sentiment encapsulates the transformative journey corporations
must undertake in the AI era.
For investors, the tangible benefits for companies that effectively
integrate AI can be broadly categorised into three areas:
Productivity Enhancement: AI can significantly augment people-
centric processes within organisations, unlocking new levels of
efficiency and workflow optimisation.
Creation of New Revenue Streams: Leveraging AI for personalised
marketing and data-driven insights allows for novel revenue
generation strategies, transforming how businesses interact with
customers.
Sustaining Competitive Advantages: AI enables the development of
unique customer solutions that are challenging to replicate without
access to extensive historical data. This creates a formidable
competitive edge.
As we step into this burgeoning AI-driven era, our focus remains on
evaluating the business models, financial health, and growth
strategies of potential investments in a careful, considered and
committed way.
A thorough approach lets us pinpoint those quality growth stocks
poised for long-term success. Their agility, ability to swiftly capitalise
on emerging opportunities and adeptness at applying AI to harness
market trends and demands are critical factors in their continued
success and the creation of substantial long-term value for our
investors.
Companies with a sustainable competitive advantage are especially
well-positioned to reap the economic benefits of AI. Their resilience
to market disruptions (i.e., business model disruption or price-led
competition) and the high barriers to entry for competitors needing
similar data assets make these quality companies well-positioned to
capture and retain the economic benefits of AI while maintaining
their competitive excellence.
Over the past few years, our industry and society have evolved more
broadly with heightened expectations of corporate responsibility.
Being a compassionate corporate citizen, committed to people, the
planet, and the community, is no longer optional but essential.
At ECP, we proudly embrace these values, as evidenced by our third
annual Sustainability Report which will be available in February
2024. We are committed to ensuring that our business employs best
practices to position our organisation so that we can continue to
sustainably grow through time.
We appreciate our role in the investment community, and we will
continue to focus on growing our clients’ financial wealth, but our
commitment extends beyond financial growth to include
contributing to the societal well-being of future generations.
Turning to our portfolio, we're encouraged by the notable uptick in
our companies' price-to-earnings (P/E) ratios, rebounding from
previous lows. This, combined with robust short-term financial
indicators – including organic sales growth, solid earnings, and
increasing dividends – fortifies our confidence in the future. This
positive trend suggests a promising trajectory for valuation
enhancements across our investments.
Given the current market landscape, we see a prime opportunity to
invest in high-quality franchises. These market conditions are ideal
for investors seeking resilient, growth-oriented investments,
positioning them well for long-term outperformance.
10 | Athelney Trust plc | Annual Report 2023
Strategic Report
Fund Manager’s Review
Continued
Our primary focus is investing in quality businesses within the
growth phase of their lifecycle. For investors, the material derate of
equity valuations, particularly for growth-oriented stocks, and the
expected ongoing volatility present an opportunity for those
investing in resilient, Quality Franchises - it's time to step in and
invest.
Update
The unaudited NAV on 31 January 2024 was 204.7p per share –
down by 2.1% from 31 December 2023. The share price on the same
day was 175p (trading at a discount of 14.5%). Further updates can
be found at www.athelneytrust.co.uk
Dr Manny Pohl AM
Fund Manager
12 February 2024
11 | Athelney Trust plc | Annual Report 2023
Strategic Report
Investment and Portfolio Analysis at 31 December 2023
Stock Holding Value (£)
SECTOR
£
%
Chemicals
Treatt
35,000
176,050
176,050
4.0%
Construction & materials
Clarke T
99,000
134,640
134,640
3.1%
Electronic & electrical equipment
XP Power
4,000
54,240
54,240
1.2%
Food & beverages
Fevertree Drinks
17,000
177,820
177,820
4.1%
General financial
Alpha Group International
4,000
68,000
Close Brothers
20,000
158,800
Impax Asset Management
66,000
363,000
Liontrust Asset Management
20,000
126,000
S & U
6,000
130,800
846,600
19.4%
Industrial engineering
Spirax-Sarco Engineering
500
52,525
52,525
1.2%
Leisure goods
Games Workshop
3,000
295,200
295,200
6.7%
Media
4Imprint
5,000
228,500
Rightmove
23,000
132,387
Yougov
10,100
118,170
479,057
11.0%
Mobile communications
Gamma Communications
15,000
168,600
168,600
3.9%
Multiutilities
National Grid
14,000
148,120
148,120
3.4%
Property, commercial &
residential
AEW UK REIT
580,000
583,480
Londonmetric REIT
84,000
160,860
Target Healthcare REIT
50,000
43,000
Tritax BigBox REIT
200,000
337,200
1,124,540
25.6%
Support services
Begbies Traynor
95,000
111,150
NWF Group
56,000
123,200
Paypoint
24,000
124,560
358,910
8.2%
Technology
Cerillion
10,000
160,000
160,000
3.7%
Travel and leisure
Cake Box Holdings
120,000
198,000
198,000
4.5%
Portfolio Value
4,374,302
Net Current Assets
137,668
TOTAL VALUE
4,511,970
Shares in issue
2,157,881
Audited NAV
209.1p
12 | Athelney Trust plc | Annual Report 2023
Strategic Report
Investment and Portfolio Analysis at 31 December 2023
Continued
Portfolio by Sectors
Portfolio by Listing
4.0% Chemicals
3.1% Construction & materials
1.2% Electronic &
electrical equipment
4.1% Food & beverages
19.4% General financial
1.2% Industrial
Engineering
6.7% Leisure Goods
11.0% Media
3.9% Mobile
Communications
3.4% Multiutilities
25.6% Property Comm &
Residential
8.2% Support Services
3.7% Technology
Software Services
4.5% Travel and Leisure
Portfolio By Sectors
26.4% Small Caps
3.0% Fledgling
32.9% AIM
27.1% FTSE 250
7.4% FTSE 100
3.2% Cash
Portfolio By Listing
13 | Athelney Trust plc | Annual Report 2023
Strategic Report
Section 172(1) Statement
The Directors of the Company are required to promote the success of
the Company for the benefit of the Members and Shareholders as a
whole. Section 172(1) of the Companies Act (2006) expands this duty
and requires the Directors to consider a broader range of interested
parties when considering the promotion of the Company. This wider
group of stakeholders will include employees, if any, suppliers,
customers and others, and the Board will look to understand and take
into account the needs of each stakeholder, although recognising that
different stakeholders may have conflicting priorities and not all
decisions made will be to the benefit of all stakeholder groups.
When making decisions the Board should consider the following:
• the likely consequences of any decisions in the long-term;
• the interests of the Company’s employees (if applicable);
• the impact of the Company’s operations on the environment
and the community;
• the need to foster the Company’s business relationships with
suppliers, customers and others;
• the need to act fairly for all members of the Company, and
• the desirability of the Company maintaining a reputation for
high standards of business conduct.
In line with similar small Investment Trusts and Investment Companies,
Athelney Trust plc does not have any customers and relies on a number
of third-party providers of services such as Company Administrator,
the Custodian and the Registrar to maintain its operations. The
Company takes into account the regulations of the market in which it
operates and has regard to the environment and the wider community
in which it operates.
At every Board meeting the Directors review the performance of the
Company towards meeting the Company’s Investment Objective
through its strategy. Manny Pohl is the fund manager, reports to other
Board members and answers any questions raised. Compliance with
existing regulatory and legal requirements is reviewed, together with
any new regulations that are due to be introduced or are being
proposed that may affect the Company.
The Board recognises the importance of, and is committed to,
understanding the views of Shareholders and maintaining
communication with its Shareholders in the most appropriate manner.
This is undertaken through:
Annual General Meeting
The Company, in normal circumstances encourages all Shareholders
to attend and participate at its Annual General Meeting (“AGM”).
Whilst the formal business of the meeting is the primary purpose of
the meeting, members of the Board are available to answer questions
directly from Shareholders, to provide an update to the meeting and
to offer Shareholders an insight into the business.
The Board plan to hold the 2024 AGM on 21 March 2024 at
12.00 noon. Further details regarding the 2024 AGM are
contained in the Notice of the Annual General Meeting
published in a separate notification.
Published Reports
The Company produces Annual and Half Yearly Reports and
monthly fact sheets are all available from the Company’s website
and paper copies are available on request from the registered
office. The publication of these reports is considered to be the
primary method of communication to Shareholders and other
readers of the reports and provides detailed information on the
portfolio, performance over the period and an assessment of the
outlook for the Company.
The Annual Report also contains details regarding the Company’s
corporate governance and the Board seek to ensure that the
Report is readable and is mindful that it should be fair, balanced
and understandable.
Shareholder enquiries
Shareholders can contact the Company or any of its Directors
through the Company Secretary or through their company email
address. Alternatively, letters can be sent to the registered office
address. Although the Directors are not available full time, with
the assistance of the Company Secretary they seek to maintain
open communication to all Shareholders.
Suppliers
The Company Secretary, Deborah Warburton and Administrator
GW & Co. Limited, are often the main contact point for advisors
and stakeholders in the Company. Regular communication is
maintained between the Company Secretary and the Directors
advising them of all matters concerning the Company. The
Company also relies on the provision of services from outside
parties to operate and gives consideration to the needs and
objectives of those providers and recognises that their success
will often assist the Company in achieving its objectives.
Regulators
The Company operates in an environment that is governed by
legal and regulatory requirements. The Board recognises that
these requirements are there to protect stakeholders, including
the government.
Environment and Community
As the Company does not have any direct employees nor any
physical office environment of its own it has little direct impact
on the community or the environment. The Company seeks to
reduce its impact on the environment in encouraging
Shareholders to receive Reports electronically rather than
through printed hard copies. When paper copies are requested
FSC paper is used. The Board also engage through electronic
means where possible rather than hold excessive face to face
meetings.
14 | Athelney Trust plc | Annual Report 2023
Strategic Report
Other Statutory Information
As explained within the Report of the Directors on pages 20 to 22, the
Company carries on business as an investment trust. Investment trusts
are collective closed-ended public limited companies.
Board
The Board of Directors is responsible for the overall stewardship of the
Company, including investment and dividend policies, corporate and
gearing strategy, corporate governance procedures and risk
management. Biographical details of the three male Directors, can be
found on pages 2 and 3.
One of the Directors is the Company's only employee (2022: one
employee).
Investment Objective
The investment objective of the Trust is to provide shareholders with
prospects of long-term capital growth with the risks inherent in small
cap investment minimised through a spread of holdings in quality small
cap companies that operate in various industries and sectors. The Fund
Manager also considers that it is important to maintain a progressive
dividend record.
Investment Policy
The assets of the Trust are allocated predominantly to companies with
either a full listing on the London Stock Exchange or a trading facility
on AIM or AQSE. The assets of the Trust have been allocated in two
main ways: first, to the shares of those companies which have grown
steadily over the years in terms of revenue and profits but, despite this
progress are undervalued by the market when compared to future
earnings and dividends; second, those companies whose shares are
undervalued by the market when compared with the value of land,
buildings, other assets or cash on their balance sheet.
Investment Strategy
The investment strategy employed by the Fund Manager in meeting
the investment objective focuses on active stock selection. The
selection of individual holdings is based on analysis of, amongst other
things, market positioning, competitive advantage, future growth,
financial strength and cash flows. The weighting of individual
investments reflects the Fund Manager’s conviction in the expected
future returns from those holdings.
Investment of Assets
At each Board meeting, the Board considers compliance with the
Company’s investment policy and other investment restrictions during
the reporting period. An analysis of the portfolio on 31 December 2023
can be found on pages 11 and 12 of this report.
Responsible Ownership
The Fund Manager takes a particular interest in corporate governance
and social responsibility investment policy. As stated within the
Corporate Governance Statement on pages 16 to 19, the Fund
Manager’s current policy is available on the Trust’s website
www.athelneytrust.co.uk. The Board supports the Fund Manager on
his voting policy and his stance towards environmental, social and
governance issues.
Review of Performance and Outlook
Reviews of the Company’s returns during the financial year, the
position of the Company at the year end, and the outlook for the
coming year are contained in the Chair’s Statement on pages 4
to 6 and the Fund Manager’s review on pages 7 to 10 which form
part of the Strategic Report.
Principal Risks and Uncertainties and Risk
Management
As stated within the Corporate Governance Statement on pages
16 to 19, the Board applies the principles detailed in the internal
control guidance issued by the Financial Reporting Council, and
has established a continuing process designed to meet the
particular needs of the Company in managing the risks and
uncertainties to which it is exposed.
The principal risks and uncertainties faced by the Company are
described below and in note 12 which provides detailed
explanations of the risks associated with the Company’s financial
instruments.
• Global conflict – The continuing war between Russia and
Ukraine has had a significant impact, inter alia, on inflation
and, in conjunction with affairs in China, an impact on supply
chains and globalisation. Investee companies will vary as to
the impact on them and their ability to adapt.
• Inflationary pressure – Inflation has escalated sharply in the
last 12 months and the Bank of England has raised interest
rates on several occasions in an attempt to reduce the level
of inflation. Not all investee companies are well-placed to
pass on cost pressures to their customers.
• Market – the Company’s fixed assets consist almost entirely
of listed securities and it is therefore exposed to movements
in the prices of individual securities and the market generally.
• Investment and strategic – incorrect investment strategy,
asset allocation, stock selection and the use of gearing could
all lead to poor returns for shareholders.
• Regulatory – Relevant legislation and regulations which apply
to the Company include the Companies Act 2006, the
Corporation Tax Act 2010 (“CTA”) and the Listing Rules of the
Financial Conduct Authority (“FCA”). The Company has noted
the recommendations of the UK Corporate Governance Code
and its statement of compliance appears on pages 16 to 19.
A breach of the CTA could result in the Company losing its
status as an investment company and becoming subject to
capital gains tax, whilst a breach of the Listing Rules might
result in censure by the FCA. At each Board meeting the
status of the Company is considered and discussed, so as to
ensure that all regulations are being adhered to by the
Company and its service providers.
15 | Athelney Trust plc | Annual Report 2023
Strategic Report
Other Statutory Information
Continued
• Operational – failure of the accounting systems or disruption to
its business, or that of other third-party service providers, could
lead to an inability to provide accurate reporting and monitoring,
leading to a loss of shareholders’ confidence.
• Financial – inadequate controls by the Fund Manager or other third-
party service providers could lead to misappropriation of assets.
Inappropriate accounting policies or failure to comply with accounting
standards could lead to misreporting or breaches of regulations.
• Liquidity – the Company may have difficulty in meeting
obligations associated with financial liabilities.
• Interest rate risk
– this is not considered to be a direct risk to the
Company other than through its effect on investee companies.
• Trading – the Company is a small trust and its shares can be
illiquid, which means that investors may have difficulty in dealing
in larger amounts of shares.
The Company has complied with the MiFID ll and KID legislation and
the deadlines to ensure that shares in the Company were still able to
be traded. A copy of the Company’s KID can be found on the website
http://www.athelneytrust.co.uk
The Board is not aware of any breaches of laws or regulations during
the period under review and up to the date of this report.
The Board seeks to mitigate and manage these risks through
continual review, policy setting and enforcement of contractual
obligations. It also regularly monitors the investment environment
and the management of the Company’s investment portfolio.
Investment risk is spread through holding a wide range of securities
in different industrial sectors.
Statement Regarding Annual Report and
Financial Statements
Following a detailed review of the Annual Report and Financial
Statements by the Audit Committee, the Directors consider that
taken as a whole it is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company’s
performance, business model and strategy.
The Directors have adopted best practices as described by the AIC’s
Statement of Recommended Practice on financial statements dated
July 2022.
Greenhouse Gas Emissions
As an investment company with its activities outsourced to third
parties or self managed by the Non-Executive Directors, the
Company’s own direct environmental impact is minimal. The
Company has no greenhouse gas emissions to report from its
operations, nor does it have responsibility for any other emissions
producing sources under the Companies Act 2006 (Strategic Report
and Directors’ Reports) Regulations 2013. Furthermore, the
Company considers itself to be a low energy user under the
Streamlined Energy & Carbon Reporting regulations and therefore is
not required to disclose energy and carbon information.
Social, Community and Human Rights issues
The Company has one employee and, as far as the Board is aware,
no issues exist in respect of social, community or human rights
issues.
Alternative Investment Fund Manager’s Directive
(“AIFMD”)
The Company is registered as its own AIFM with the FCA under the
AIFMD and confirms that all required returns have been completed
and filed.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
12 February 2024
16 | Athelney Trust plc | Annual Report 2023
Corporate Governance Statement
Shareholders hold the Directors of a company responsible for the
stewardship of that company’s affairs. Corporate governance is
the process by which a Board of Directors discharges this
responsibility. The Company’s arrangements in respect of
corporate governance are explained in this report. The corporate
governance statement forms part of the Report of the Directors
which can be found on pages 20 to 22.
The Company is required to comply with, or to explain its non-
compliance with, the relevant provisions of the UK Corporate
Governance Code issued by the Financial Reporting Council (the
‘FRC’) in July 2022 which can be found at www.frc.org.uk. The
Association of Investment Companies issued its own Code of
Corporate Governance in April 2021 (the ‘AIC Code’), which can be
found at www.theaic.co.uk. and which has been approved by the
FRC as it addresses all the principles of the UK Corporate
Governance Code as well as setting out additional principles and
provisions on issues which are of specific relevance to investment
trusts. The Board considers that reporting against the Principles
and Provisions of the AIC Code, which has been endorsed by the
FRC, provides more relevant information to shareholders.
The Company has not complied with the provisions of the AIC Code
and the UK Corporate Governance Code in respect of the
following:
• Due to the size of the Board, formal performance
evaluations of the Chair, the Board, its Committees and
individual Directors are not undertaken. Instead, it is felt
more appropriate to address matters as and when they
arise.
• Due to the size of the Board, it is felt inappropriate to
appoint a senior independent non-executive Director.
• All the Directors have agreements for provision of their
services but no limit has been imposed on the overall
length of service. The recommendation of the Code is
for fixed term renewable contracts. In recent years each
of the Directors has retired and, where appropriate,
sought re-election. One third of the Directors retires by
rotation annually in accordance with the Company’s
articles of association.
• The Company has one employee. The Company
Secretary’s line of communication in relation to whistle-
blowing is to the Chair of the Company.
The Company does not have a Nominations Committee. During the
year the Board comprised a maximum of three Directors who
liaised continuously throughout and were aware of their
obligations to consider recruitment of further Directors as and
when the occasion occurred.
Board Membership
At 31 December 2023 the Board consisted of three Directors, of which
two were and remain independent. The biographies of all the current
Directors are contained on pages 2 and 3.
Frank Ashton retired by rotation and was re-elected at the AGM on 16
March 2023. The Directors believe that the Board has the balance of
skills, experience and length of service to enable it to provide effective
leadership and proper governance of the Company. The Directors
possess a range of business and financial expertise relevant to the
direction of the Company and consider that they commit sufficient
time to the Company’s affairs.
All Directors receive relevant training, collectively or individually, as
necessary.
The Directors of the Company meet at regular Board Meetings. During
the year ended 31 December 2023, the Board met a total of 10 times.
An additional audit planning meeting was attended by Simon Moore
and the Company Secretary.
Board
Audit
Remuneration
Meetings
Committee
Committee
E C Pohl
5
-
-
N F Ashton
6
3
1
S Moore
6
3
1
Jason Pohl is the alternate Director for Dr Manny Pohl, he was not
required to attend any Board meetings during the year.
The Board subscribes to the view expressed in the AIC Code that long-
serving Directors should not be prevented from forming part of an
independent majority. It does not consider that the length of a
Director’s tenure reduces their ability to act independently. The
Board’s policy on tenure is that continuity and experience are
considered to add significantly to the strength of the Board and, as
such, no limit on the overall length of services of any of the Company’s
Directors, including the Chair, has been imposed, although the Board
believes in the merits of periodic and progressive refreshment of its
composition.
The Board of Directors of the Company comprises three male
Directors. Whilst the Board recognises the benefits of diversity in
appointments to the Board, the key criteria for the appointment of
new Directors will be the appropriate skills and experience in the
interest of shareholder value. The Directors are satisfied that it has an
appropriate breadth of skills and experience. The Board is not
currently planning to add a fourth Director to the Board.
The basis on which the Company aims to generate value over the
longer term is set out in the Strategic Report on pages 4 to 15. All
matters, including corporate and gearing strategy, investment and
dividend policies, corporate governance procedures and risk
management are reserved for the approval of the Board of Directors.
The Board receives full information on the Company’s investment
performance, assets, liabilities and other relevant information in
advance of Board meetings.
17 | Athelney Trust plc | Annual Report 2023
Corporate Governance Statement
Continued
Board Responsibilities and Relationship with the
Fund Manager
The Board is responsible for the investment policy (the Mandate) and
strategic and operational decisions of the Company and for ensuring
that the Company is run in accordance with all regulatory and
statutory requirements.
These matters include:
• The maintenance of clear investment objective and risk
management policies, changes to which require Board approval;
• The monitoring of the business activities of the Company,
including investment performance and annual budgeting; and
• Review of matters delegated to the Fund Manager and Company
Secretary.
The Fund Manager ensures that Directors have timely access to all
relevant management and financial information to enable informed
decisions to be made and contacts the Board as required for specific
guidance. The Company Secretary and Fund Manager prepare
monthly reports for Board consideration on matters of relevance, for
example current valuation and portfolio changes, dividend
comparisons with previous years, cash availability and requirements
and a breakdown of shareholdings by listing and sector. The Board
takes account of Corporate Governance best practice.
Corporate Governance and Social Responsible
Investment Policy
The Board is aware of its duty to act in the interests of the Company.
The Board acknowledges that there are risks associated with
investment in companies which fail to conduct business in a socially
responsible manner. The Fund Manager considers social,
environmental and ethical factors which may affect the performance
or value of the Company's investments. The Directors, through the
Fund Manager, encourage companies in which investments are held
to adhere to best practice in the area of Corporate Governance. They
believe that this can best be achieved by entering into a dialogue with
company management to encourage them, where necessary, to
improve their policies in this area. The Company's ultimate objective
is to deliver superior long term returns for Shareholders which the
Board believe will be produced on a sustainable basis by investing in
companies which adhere to best practice in the area of Corporate
Governance. Accordingly, the Fund Manager will seek to favour
companies which pursue best practice in this area.
Chair
Frank Ashton is independent and considers himself to have sufficient
time to commit to the Company’s affairs.
Directors’ Independence
In accordance with the Listing Rules for investment entities, the Board
has reviewed the status of its individual Directors and the Board as a
whole. Two of the three current Directors including the Chair are
considered by the Board to be independent in character and
judgement and there are no relationships or circumstances which are
likely to affect or could appear to affect the Directors’ judgement.
Remuneration Committee
During the year the Remuneration Committee comprised Simon
Moore and Frank Ashton. The Committee will meet as necessary
to determine and approve Director’s fees, following proper
consideration of the role that individual Directors fulfil in respect
of Board and Committee responsibilities, the time committed to
the Company’s affairs and remuneration levels generally within
the Investment Trust Sector.
Under Listing Rule 15.6.6, the Code principles relating to Directors’
remuneration do not apply to an investment trust company other
than to the extent that they relate specifically to non-executive
Directors. Detailed information on the remuneration
arrangements can be found in the Directors’ remuneration report
on pages 24 to 26 and in note 4 to the financial statements.
Company Secretary
The Company Secretary, Deborah Warburton FCCA, is
responsible for ensuring that Board and Committee procedures
are followed and that the Company complies with regulations.
The Company Secretary also ensures timely delivery of
information and reports and that the statutory obligations of the
Company are met.
All the Directors have access to the advice and services of the
Company Secretary.
Independent Professional Advice and
Directors’ Training
Individual Directors may, at the expense of the Company, seek
independent professional advice on any matter that concerns
them in the furtherance of their duties.
The Chair liaises on a regular basis with the other Directors and
the Company Secretary to ensure that they are maintaining
adequate training and continuing professional development.
Institutional Investors – Use of Voting Rights
and Voting Policy
The Fund Manager, in the absence of explicit instruction from the
Board, is empowered to exercise discretion in the use of the
Company’s voting rights. The Fund Manager votes against
resolutions he believes may damage shareholders’ rights or
economic interests.
Audit Committee
During the year the Audit Committee comprised Simon Moore
and Frank Ashton. The Committee met three times during the
year. The duties of the committee include reviewing the Annual
and Interim Accounts, the system of internal controls, and the
terms of appointment and remuneration of the auditor. During
this year due to the resignation of Hazlewood’s LLP as the
Company auditor the committee oversaw the tender process and
appointment of the new auditor Moore Kingston Smith LLP. The
committee agreed their remuneration and their independence
and objectivity. It is also the forum through which the auditor
reports to the Board of Directors.
18 | Athelney Trust plc | Annual Report 2023
Corporate Governance Statement
Continued
Much of the Board’s corporate governance responsibility is discharged through the Audit Committee. This Committee operates within clearly
defined written terms of reference which are available upon request at the Company’s registered office.
Significant Issues Considered by the Audit Committee in Relation to the Financial Statements
Matter
Action
Investment Portfolio Valuation
The Company’s portfolio is invested predominantly in listed
securities. Although all the securities are fully listed or traded
on AIM or AQSE, errors in the portfolio valuation could have a
material impact on the Company’s net asset value per share.
The portfolio is valued at bid price at the end of each month by
the company secretary, using the London Stock Exchange bid
prices at close of business on the last day of the month.
Misappropriation of Assets
Misappropriation of the Company’s investments or
cash balances could have a material impact on its net
asset value per share.
The portfolio is agreed on a monthly basis by the Company
Secretary during the completion of the monthly accounts.
Income Recognition
Incomplete or inaccurate income recognition could have an
adverse effect on the Company’s net asset value and earnings
per share and its level of dividend cover.
The level of income received for the year and the dividend
forecast for the year are agreed on a monthly basis with the Fund
Manager and the Company Secretary.
Ukraine War
The war in Ukraine has adversely affected the global economy
and this, may impact on the valuation of investee companies
and their ability to pay dividends.
The Fund manager and the Administrator monitor the dividend
situation monthly and make the Board aware of cancelled,
postponed dividends as soon as they become aware.
The Audit Committee reviews the scope and results of the audit and,
during the year, considered and approved Moore Kingston Smith
LLP’s plan for the audit of the financial statements for the year ended
31 December 2023. At the conclusion of the audit Moore Kingston
Smith LLP did not highlight any issues to the Audit Committee which
would cause it to qualify its audit report nor did it highlight any
fundamental internal control weaknesses. Moore Kingston Smith
LLP issued an unqualified audit report which is included on pages 27
to 31.
As part of the review of auditor independence and effectiveness,
Moore Kingston Smith LLP has confirmed that it is independent of
the Company and has complied with relevant auditing standards. In
evaluating Moore Kingston Smith LLP, the Audit Committee has
taken into consideration the standing, skills and experience of the
firm and the audit team. Following the FRC regulatory requirements,
the audit partner rotates after five years.
Company Information
The following information is disclosed in accordance with The Large
and Medium-Sized Companies and Groups (Accounts and Reports)
Regulations 2008 and DTR 7.2.6.
• The Company’s capital structure and voting rights are
summarised on pages 20 and 21.
• Details of the substantial shareholders in the Company are
listed on page 20.
• The rules concerning the appointment and replacement of
Directors are contained in the Company’s Articles of
Association and are discussed on page 20.
The Board is seeking to renew its current powers to issue and re-
purchase shares at the forthcoming Annual General Meeting.
• There are no restrictions concerning the transfer of
securities in the Company; no special rights with regard to
the control attached to securities; no restrictions on voting
rights; no agreements which the Company is party to that
might affect its control following a successful takeover.
• There are no agreements between the Company and its
Directors concerning compensation for loss of office.
19 | Athelney Trust plc | Annual Report 2023
Corporate Governance Statement
Continued
Relations with Shareholders
The Company places great importance on communication with
shareholders and welcomes their views. The Chair and the other
Directors have spoken to major shareholders during the year to
discuss their aspirations for the Company going forward. The Annual
General Meeting of the Company provides a forum, both formal and
informal, for shareholders to meet and discuss issues with the
Directors of the Company.
To comply with the AIC Code the Board are required to consult with
shareholders when 20 percent or more of votes have been cast
against Board recommendations for a resolution. All resolutions
proposed at the AGM were unanimously passed.
The notice and further details of the Annual General Meeting, to be
held on 21 March 2024 at 12.00 noon, is published in a separate
notification. The Annual Report and Notice of Annual General
Meeting are sent to shareholders at least 20 working days before the
Meeting.
Internal Control
The Board is responsible for the Company’s system of internal
control and for reviewing its effectiveness. It has therefore
established an ongoing process designed to meet the particular
needs of the Company in managing the risks to which it is exposed,
consistent with the internal control guidance issued by the Financial
Reporting Council.
Adequate internal controls are in place for identifying, evaluating
and managing risks faced by the Company. This process, together
with key procedures established with a view to providing effective
financial control, has been in place for the full financial year and up
to the date the financial statements were approved and is consistent
with the internal control guidance issued by the Financial Reporting
Council.
The Board has reviewed the need for an internal audit function. It
has decided that the systems and procedures employed by the
Directors, provide sufficient assurance that a sound system of
internal control, which safeguards the Company’s assets, is
maintained. An internal audit function specific to the Company is
therefore considered unnecessary.
Internal Control Assessment Process
Risk assessment and the review of internal controls are undertaken
by the Board in the context of the Company’s overall investment
objective. The review covers the key business, operational,
compliance and financial risks facing the Company. In arriving at its
judgement of what risks the Company faces, the Board has
considered the Company’s operations in the light of the following
factors:
• The nature and extent of risks which it regards as acceptable
for the Company to bear within its overall business objective;
• The threat of such risks becoming a reality;
• The Company’s ability to reduce the incidence and impact
of risk on its performance; and
• The cost and benefits to the Company of third parties
operating the relevant controls.
Against this background, the Board has split the review of risk and
associated controls into four sections reflecting the nature of the
risks being addressed. These sections are as follows:
• Corporate strategy;
• Published information, compliance with laws and
regulations;
• Relationship with service providers; and
• Investment and business activities.
The key procedures which have been established to provide
internal controls are as follows:
• Custody and valuation of assets is undertaken by James
Sharp & Co;
• The duties of investment management, accounting and
the custody of assets are segregated. The procedures of
the individual parties are designed to complement one
another;
• The Directors of the Company clearly define the duties and
responsibilities of their agents and advisers. The
appointment of agents and advisers is conducted by the
Board after consideration of the quality of the parties
involved; the Board monitors their ongoing performance
and contractual arrangements;
• Mandates for authorisation of investment transactions
and expense payments are set by the Board; and
• The Board reviews financial information produced by the
Fund Manager and the Company Secretary in detail on a
regular basis.
In accordance with guidance issued to Directors of listed
companies, the Directors have carried out a review of the
effectiveness of the system of internal control as it has operated
over the year.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
12 February 2024
20 | Athelney Trust plc | Annual Report 2023
Report of the Directors
The Directors present their report and audited financial statements
of the Company for the year ended 31 December 2023. This report
also contains certain information required in accordance with S992
of the Companies Act 2006.
Results and Dividends
The return on ordinary revenue activities before dividends for the
year is £167,070 (2022: £148,531) as detailed on page 32.
The company paid an interim dividend of 2.2p per ordinary share on
the 24 September 2023.
It is recommended that a final dividend of 7.6p per ordinary share
be paid. This will increase the total dividend paid this year to 9.8p
(2022: 9.6p) per ordinary share.
Principal Activity and Status
The Company (company number: 02933559) is a public limited
company, limited by shares and incorporated in England and Wales.
The registered office is Waterside Court, Falmouth Road, Penryn,
TR10 8AW.
The Company is an investment company within the meaning of
Section 833 of the Companies Act 2006 and has been granted
approval from HM Revenue & Customs (“HMRC”) as an investment
trust under sections 1158 and 1159 of the Corporation Tax Act 2010
and will continue to be treated as an investment trust company,
subject to continuing to meet the conditions for approval. The
Company has a premium listing on the London Stock Exchange and
its principal activity is portfolio investment.
The Directors are of the opinion that the Company has conducted its
affairs for the year ended 31 December 2023 so as to be able to
continue to qualify as an investment trust.
The Company’s status as an investment trust allows it to obtain an
exemption from paying taxes on the profits made from the sale of its
investments and all other net capital gains.
Directors
Biographical details of the Directors can be found on pages 2 and 3.
In accordance with the arrangements for retirement contained in
the Company’s Articles of Association, the Directors will retire by
rotation on a three yearly cycle. Simon Moore will retire at the 2024
AGM and will offer himself for re-election.
In addition to any power of removal conferred by the Companies
Acts, the Company may by special resolution remove any Director
without notice.
Directors’ and Officers’ Liability Insurance
Directors’ and Officers’ liability insurance cover was in place
throughout the financial year and as at the date of this report. The
Company’s Articles of Association provide, subject to the provisions
of UK legislation, that the Directors may be indemnified out of the
assets of the Company in respect of liabilities they may sustain or
incur in connection with their appointment.
Conflicts of Interest
Each Director has a statutory duty to avoid a situation where they
have, or could have, a direct or indirect interest which conflicts, or
may conflict, with the interests of the Company. A Director will not
be in breach of that duty if the relevant matter has been authorised
by the Board in accordance with the Company’s Articles of
Association. The Board has approved a protocol for identifying and
dealing with conflicts and conducts a review of actual or possible
conflicts at least annually. No conflicts or potential conflicts were
identified during the year. It is not considered that an interest in the
Company’s shares held by a Director will of itself give rise to a
situation where that Director’s interests or duties conflict with the
interests of the Company.
Capital Structure
At 31 December 2023 the Company’s capital structure consisted of
2,157,881 Ordinary Shares of 25p each (2021: 2,157,881 Ordinary
Shares of 25p each).
Directors and Their Interests
The Directors who held office during the year and at the date of this
report are shown below; their interest in the ordinary shares of the
Company is stated on page 25 in the Directors’ Remuneration
Report.
Dr E. C. Pohl AM (Managing Director)
N. Ashton (Chair)
S. Moore (Non-Executive Director)
The Company does not have any contract of significance subsisting
during the year, with any other company in which a Director is or
was materially interested.
J C Pohl as alternate Director for Dr E C Pohl. As Dr E C Pohl was able
to attend all meetings of the Board during the year, J C Pohl was not
required to attend any Board meetings.
Substantial Shareholders
The Directors have been notified of the following major
shareholdings in the Company that represent greater than 3% of the
voting rights:
Ordinary Shares % of
Issue
Astuce Group 550,000 25.49
IP Worldwide Flexible Fund 339,054 15.71
Mehr Mutual 121,978 5.65
E C Pohl & Co Pty Ltd 86,000 3.99
Mr GW & Mrs DJ Whicheloe 81,500 3.78
Mrs E Davison 75,000 3.48
Mr C Frostick 70,500 3.27
Mr S Moore 67,500 3.13
P Grodzinski 65,000 3.01
Out of the nine major shareholders listed above Dr. Manny Pohl has
control over two substantial shareholdings amounting to 29.48% of
the total shareholding, he is also in contact with IP Worldwide
Flexible Fund and Mr C Frostick on a regular basis. Simon Moore has
control of 3.13% of the total shareholdings and is in regular contact
with two of the remaining four substantial shareholders.
21 | Athelney Trust plc | Annual Report 2023
Report of the Directors
Continued
The remaining two are in regular contact with the Directors (or their
respective agent) to ensure that they are frequently apprised and
are content with the manner in which the Company is being run.
There have been no changes to the substantial shareholders up until
31 January 2024.
Dividends
The Ordinary Shares carry a right to receive dividends which are
declared from time to time by an Ordinary Resolution of the
Company (up to the amount recommended by the Directors) and to
receive any interim dividends which the Directors may resolve to
pay.
Capital Entitlement
On a winding up, after meeting the liabilities of the Company, the
surplus assets will be paid to ordinary shareholders in proportion to
their shareholdings.
Voting
On a show of hands, every ordinary shareholder present in person
or by proxy has one vote and, on a poll, every ordinary shareholder
present in person has one vote for every share he/she holds and a
proxy has one vote for every share in respect of which he/she is
appointed.
Engagement with Suppliers and Other Business
Relationships
The Directors have regard for the need to maintain good business
relationships with suppliers and other businesses that the Company
may have contact with throughout the year. Suppliers are paid in a
timely manner and well within the credit terms afforded to the
Company. Other business relationships are maintained on a
professional and courteous level with regular contact being
maintained by the Fund Manager, Company Secretary and Audit
Committee Chair.
Going Concern
In assessing the going concern basis of accounting, the Directors
have had regard to the guidance issued by the Financial Reporting
Council. They have considered the current cash position of the
Company, and forecast revenues for the current financial year. The
Directors have also taken into account the Company’s investment
policy, which is described on page 14 is subject to regular Board
monitoring processes, and is designed to ensure that the Company
is invested in listed securities and those traded on AIM or AQSE.
The Company retains title to all assets held by its Custodian. Note 12
to the financial statements sets out the financial risk profile of the
Company and indicates the effect on its assets and liabilities of falls
and rises in the value of securities, market rates of interest and
changes in exchange rates.
The assets of the Company consist mainly of marketable securities,
the directors are of the opinion that at the time of approving the
accounts, the Company has adequate resources to continue in
operational existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the accounts.
In addition, the Directors have regard to ongoing investor interest in
the sustainability of the Company’s business model and in the
continuation of the Company, specifically being interested in feedback
from meetings and conversations with Shareholders. In addition to
considering the principal risks on pages 14 and 15 and the financial
position of the Company as described above, the Board has also
considered the following further factors:
• the Board continues to adopt a long-term view when making
investments;
• regulation will not increase to a level that makes the running of the
Company uneconomical; and
• the performance of the Company will be satisfactory and should
performance be less than the Board deem acceptable it has the
powers to take appropriate action.
Viability Statement
The Directors have assessed the prospects of the Company for a period
of three years. The Board believes this time period is appropriate
having consideration for the Company’s principal risks and
uncertainties (outlined on pages 14 and 15), its portfolio of listed
equity investments and cash balances, and its ability to achieve the
stated dividend policy. The Directors have assessed the ability of the
Company to continue as a going concern as outlined above.
In making this assessment, the Directors have considered detailed
information provided at Board meetings which includes the
Company’s balance sheet, investment portfolio and income and
operating expenses.
Based on the above, the Board has a reasonable expectation that the
Company fully expects it will be able to continue in operation and meet
its liabilities as they fall due over the three-year period of this
assessment.
Board Diversity
When recruiting a new Director, the Board’s policy is to appoint
individuals on merit matched against the skill requirements identified
by the Board.
The Board believes diversity is important in bringing an appropriate
range of skills, knowledge and experience to the Board and gives this
consideration when recruiting new Directors and has also noted the
requirements of Listing Rule 9.8.6R (9) following the Parker Report on
increasing the diversity on the boards of public companies.
As at 31 December 2023, there were three male Directors on the
Board. All Directors identified themselves as Caucasian by ethnic
background.
When making appointments in the future the Board will continue to
operate an open-minded approach to recruitment without restrictions
against any perceived group or individual. The Board will take into
consideration the diversity targets set by Listing Rule 9.8.6R (9) when
making future appointments, however due to the size of the Board
meeting a target of 40% of Directors being women with one being a
senior Board position, and one individual being from a minority ethnic
background may not be reached in the immediate future.
The Company does not have any employees other than the Managing
Director and, as a result, the Board does not consider it necessary to
establish means for employee engagement with the Board as required
by the latest version of the UK Corporate Governance Code.
22 | Athelney Trust plc | Annual Report 2023
Report of the Directors
Continued
Modern Slavery Act
As an investment vehicle that does not provide goods or services in
the normal course of business, nor does it have, apart from the
Directors, any employees, the Directors consider that the Company
is not required to make a slavery or human trafficking statement
under the Modern Slavery Act 2015.
The Criminal Finances Act 2017 and Bribery Act
2010
The Company has zero tolerance towards the criminal facilitation of
tax evasion and a policy of zero tolerance in relation to bribery and
corruption both in its own actions and those of its third-party
advisors and service providers.
Financial Instruments
The Company’s financial instruments comprise its investment
portfolio, cash balances and debtors and creditors that arise
directly from its operations such as sales and purchases awaiting
settlement and accrued income. The financial risk management
objectives and policies arising from its financial instruments and the
exposure of the Company to risk are disclosed in note 12 to the
financial statements.
Annual General Meeting
The Notice of Annual General Meeting is published in a separate
notification.
Statement of Disclosure to Auditor
The Directors confirm that, so far as each of them is aware, there is no
relevant audit information of which the Company’s auditor is unaware
and the Directors have taken all the steps that they ought to have
taken as Directors in order to make themselves aware of any relevant
audit information and to establish that the Company’s auditor is
aware of that information.
Re-appointment of Auditor
A resolution will be put to the shareholders at the Annual General
Meeting proposing the re-appointment of Moore Kingston Smith LLP
as Auditor to the Company. Moore Kingston Smith LLP have indicated
their willingness to continue in office.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
12 February 2024
23 | Athelney Trust plc | Annual Report 2023
Statement of Directors’ responsibilities in respect of the
financial statements
The Directors are responsible for preparing the Annual Report and
the financial statements and have elected to prepare them in
accordance with applicable United Kingdom law and United
Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice). Under company law the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of its profit or loss for that period.
In preparing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information;
• state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy, at any time, the
financial position of the Company and to enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Report of the Directors, a Strategic Report,
Directors’ Remuneration Report and Corporate Governance
Statement.
The Directors state that to the best of their knowledge:
• the Financial Statements, prepared in accordance with UK
Generally Accepted Accounting Practice, give a true and fair view
of the assets, liabilities, financial position and net return of the
Company;
• consider the Annual Report and accounts, taken as a whole, are
fair, balanced and understandable and provide the necessary
information for shareholders to assess the Company’s position and
performance, business model and strategy; and
• the Chair’s Statement and Report of the Directors include a fair
review of the development and performance of the business and
the position of the Company together with a description of the
principal risks and uncertainties that it faces.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information related to the Company including
on the Company’s website http://www.athelneytrust.co.uk
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
On behalf of the Board
Dr Manny Pohl AM
Managing Director
12 February 2024
24 | Athelney Trust plc | Annual Report 2023
Directors’ Remuneration Report
The Board has prepared this Report in accordance with the
requirements of Section 421 of the Companies Act 2006. An Ordinary
Resolution will be put to the members to approve the Report at the
forthcoming Annual General Meeting.
The law requires the Company’s Auditor to audit certain disclosures
provided. Where disclosures have been audited, they are indicated
as such. The Auditor’s opinion is included in their report on pages
27 to 31.
Remuneration Committee
The Company had a Remuneration Committee during the year
comprising Simon Moore and Frank Ashton.
The Committee met during the year to review and implement
measures to avoid or manage conflicts of interest where applicable
and to consider and approve the Directors’ remuneration for the
year ending 31 December 2023.
Policy on Directors’ Remuneration
The Board’s policy is that the remuneration of non-executive
Directors should be sufficient to attract and retain Directors with
suitable skills and experience, and is determined in such a way as to
reflect the experience of the Board as a whole, in order to be
comparable with other organisations and appointments. It is
intended that this policy will continue for the year ending 31
December 2024 and thereafter.
The fees for non-executive Directors are determined within the
limits set out in the Company’s Articles of Association. The approval
of shareholders would be required to increase the limits set out in
the Articles of Association. Directors are not eligible for bonuses,
pension benefits, share options, long-term incentive schemes or
other benefits, as the Board does not consider such arrangements or
benefits necessary or appropriate.
Fees for any new Director appointed will be made on the same basis.
Non-executive Director’s fees have been set at £10,500 per annum
for a number of years and no changes are expected for the
foreseeable future.
The salary for the Managing Director and Fund Manager has been
fixed at 0.75% of the portfolio value.
The policy was last approved by Shareholders at the Annual General
Meeting on 16 March 2023 and will remain valid until the Annual
General Meeting in 2025.
Company Performance
The graph below compares capital growth, for the ten financial
years ended 31 December 2023, as a cumulative performance graph
over the whole 10 years and a table of discrete calendar year
performance figures. The comparison is between AIM All-Share and
FTSE Small Caps indices as the majority of investment holdings by
the Company are a constituent of one or the other of these two
indices. The comparison is required by Statutory Instrument to
enable the readers of the accounts to compare the performance of
the Company.
Past performance is no guarantee of future performance.
0
20
40
60
80
100
120
140
160
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Capital Growth
(re-based to 100 at 31/12/2013)
ATY NAV FTSE100 FTSE 250 FTSE Small Cap AIM All Share
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
ATY NAV
4.0% 7.5% 2.5% 13.4% -20.7% 18.
2% -4.4% 21.5% -29.3% -4.7%
FTSE 100
-2.7% -4.9% 14.4% 7.6% -12.5% 12.1% -14.3% 14.6% 1.0% 3.8%
FTSE 250
0.9% 8.4% 3.7% 14.7% -15.6% 25.0% -6.4% 14.3% -19.7% 4.4%
FTSE Small Cap
-24.0% 7.8% 4.5% 3.6% -23.8% 31.2% 4.4% 20.0% -16.3% 3.0%
AIM All Share
-31.4% 27.5% 8.6% 8.8% -34.2% 36.4% 20.7% 5.2% -31.7% -8.2%
25 | Athelney Trust plc | Annual Report 2023
Directors’ Remuneration Report
Continued
Directors’ Remuneration for the Year (audited)
The Directors who served in the year received the following
remuneration in the form of salaries or non-executive Directors’ fees,
no other salary related payments were made to any Director during
the year
.
2023
2022
£
£
Dr E C Pohl - Fund Manager
34,193
40,077
S Moore (Non-executive)
10,500
10,500
F Ashton (Chair)
10,500
10,500
Director’s expenses - -
55,193
61,077
The Directors’ remuneration for the year of £55,193 which is down
by 14.7% on 2022 and is before the proposed final dividend of 7.6p
increasing the total dividend for the year to 9.8p (2022: 9.6p) per
ordinary share, and as compared to total dividends paid in the year
at 9.7p per share amounting to £209,314 (2022: £207,156). The
remuneration decrease is due to the decrease in the portfolio value
during the year on which the Fund Manager’s fee is based.
Expected Fees
for the Year to
31 December
2024
Fees for Year
to 31
December
2023
Chair basic fee
10,500
10,500
Fund Manager
37,000
34,193
Non-Executive Director
10,500
10,500
No expenses were claimed by any Directors during this year.
Performance, Service Contracts, Compensation
and Loss of Office
• The Directors’ remuneration is not subject to any
performance related fee.
• No Director was interested in contracts with the
Company during the period or subsequently.
• The terms of appointment provide that a Director may
be removed without notice.
• Compensation will not be due upon leaving office.
• No Director is entitled to any other monetary payment or any
assets of the Company.
• No incentive or introductory fees will be paid to encourage
a directorship.
• The Directors are not eligible for bonuses, pension
benefits, share options, long term incentive schemes or
other benefits.
Directors’ & Officers’ liability insurance cover is maintained by the
Company on behalf of the Directors.
Relative importance of spend on pay
2023
2022
%
Change
Total remuneration paid to
the Fund Manager
34,193
40,077
(14.7)%
Total remuneration paid to
non-executive Directors
21,000
21,000
0%
Total remuneration paid
55,193
61,077
(14.7)%
Directors’ beneficial and family interests
(audited)
The interests of the Directors and their families in the Ordinary
shares of the Company are set out below:
31 31
December December
2023 2022
(or date of (or date of
Resignation appointment
If earlier) if later)
Dr E. C. Pohl -¹ -¹
S. Moore 67,500 67,500
F. Ashton 2,234 2,234
Notes:
1. Dr. E. C. Pohl is the sole beneficial owner of E C Pohl & Co
Pty Limited. E C Pohl & Co Pty Limited holds 86,000 shares
(2022: 86,000).
None of the Directors nor any persons connected with them had a
material interest in the Company’s transactions, arrangements or
agreements during the year other than through their holdings in the
Company’s shares. There are no requirements for the Director’s to
own shares in the Company.
The Directors are fully aware that the Company is not a close
company and of the rules associated with this status. The Company
Secretary maintains a record of shareholders which is regularly
updated. The Company breached the 5/50 rule during 2019 and this
has remained during the following three years due to the top 5
shareholders owning more than 50% of the total shares in the
company. The Company holds its Investment Trust status under the
S446 Companies Act 2010 exemption because more than 35% of the
company’s shares are held by the public and have been actively
traded in the past 12 months on the London Stock Exchange.
The Directors’ Remuneration Report for the year ended 31 December
2022 was approved by shareholders at the Annual General Meeting
held on 16 March 2023. The votes cast by proxy were as follows:
Number of % of
Votes votes
For 831,818 38
Against 998 -
Total votes cast 832,816 38
Number of votes withheld Nil -
26 | Athelney Trust plc | Annual Report 2023
Directors’ Remuneration Report
Continued
Directors’ Service Contracts
Each of the Directors has a service contract or letter of engagement
with the Company for an initial three-year term commencing in
2019. These were renewed for a further three years before the
2022 AGM. There are no provisions in the service agreements for
payments to be made for loss of office, the service contracts are
kept at the Registered Office and are available for inspection by
appointment.
The letters of engagement for all the Directors provide for renewal
by the Board on terms to be agreed from time to time.
Approval
The Directors’ Remuneration Report was approved by the Board
on 12 February 2024.
Dr Manny Pohl AM
Managing Director
27 | Athelney Trust plc | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Opinion
We have audited the financial statements of Athelney Trust plc for the
year ended 31 December 2023 which comprise the Income Statement,
the Statement of Financial Position, the Statement of Changes in Equity,
the Statement of Cash Flows, and notes to the financial statements,
including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law
and United Kingdom Accounting Standards, including FRS 102 ‘The
Financial Reporting Standard Applicable in the UK and Republic of
Ireland’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs
as at 31 December 2023 and of the Company’s net return for
the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities
for the audit of the financial statements section of our report. We are
independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied to listed public
interest 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.
Our approach to the audit
Our audit was scoped by obtaining an understanding of the Company’s
environment, including its system of internal control, and assessing the
risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the
directors that may have represented a risk of material
misstatement. All work was carried out by the audit team. We
conducted our audit using information maintained and provided
by James Sharp & Co LLP (the "Custodian”) and GW & Co Limited
(the “Company Secretary”), to whom the Company has delegated
the provisions of services.
We tailored the scope of our audit to reflect our risk assessment,
taking into account such factors as the types of investments within
the Company, the involvement of the Company Secretary, the
accounting processes and controls, and the industry in which the
Company operates. The scope of our audit was influenced by our
application of materiality. We set certain quantitative thresholds
for materiality. These together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in the evaluation
of the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. This is not a
complete list of all risks identified during our audit.
We have determined the matters described below to be the key
audit matters to be communicated in our audit report.
Key Audit Matters
How our scope addressed this matter
Carrying value of investments and recognition of
unrealised gains and losses, ownership of investments.
(note 8)
There is a risk that unrealised gains and losses in the year
have been incorrectly recorded. There is also a risk that the
carrying value of the investments is incorrect and an
additional risk that the number of shares held in those
investments is misstated.
The investment portfolio at the year-end had a carrying
value of £4,374,302 (2022: £4,180,985), made up of quoted
investments.
Our audit work included, but was not restricted to:
• Obtaining a list of investments held at fair value through profit and loss
from the Company and reconciling it to the general ledger and the
financial statements.
• Reviewing the Company’s accounting policy and disclosures in the
financial statements for investments held at fair value through profit
and loss and ensuring compliance with the applicable accounting
standards and regulatory requirements.
• Inspecting all the contracts and agreements related to the acquisition
and disposal of investments and agreeing the dates, prices, and parties
involved, and the relevant cash movements.
• Obtaining confirmations from external parties, such as the custodian,
regarding the existence and ownership of the investments as at the
reporting date.
• Testing the fair value of the year-end investments by reference to third-
party market price information.
28 | Athelney Trust plc | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
• Testing the accuracy and completeness of the recognition and
measurement of the gains and losses on fair value movements of the
investments in profit or loss.
• Confirming the appropriateness of the classification and presentation
of the fair value gains and losses in the financial statements.
Key observations:
Based on the procedures performed, we did not identify any material
misstatements in the valuation of the Company’s investment portfolio as at the
reporting date and we concluded that adequate disclosures have been included
in the financial statements.
Non-compliance with laws and regulations
As the Company is both listed on the London Stock
Exchange and holds Investment Trust status under the S446
Companies Act 2010 exemption for such companies, there
are rules and regulations that the Company must adhere to.
A potential breach of the listing rules and Investment Trust
status rules may lead to the Company losing its Trust status
and its associated tax benefits.
Our audit work included, but was not restricted to:
• Reviewing the design and implementation of controls around the
ongoing internal assessment and monitoring of Investment Trust Status
compliance.
• Obtaining an understanding of the processes adopted and obtaining
evidence of the work completed on the compliance of key Investment
Trust rules and management’s review of this on a regular basis.
• Testing the conditions for maintaining approval as an investment Trust
as set out by HMRC. We critically assessed each of the conditions for
maintaining approval to assess whether it has been met as at the year-
end.
Key observations:
Based on our review of the documentation maintained, we have not identified
any non-compliance with the listing and Investment Trust rules during the period
and at the year-end which would lead to approval being removed and we
concluded that adequate discl
osures have been included in the financial
statements.
Our application of materiality
The scope and focus of our audit were influenced by our assessment
and application of materiality. We define materiality as the magnitude
of misstatement that could reasonably be expected to influence the
readers and the economic decisions of the users of the financial
statements. We use materiality to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to
evaluate the effect of misstatements, both individually and on the
financial statements as a whole. We apply the concept of materiality
both in planning and performing our audit, and in evaluating the effect
of misstatements.
Based on our professional judgement we determined materiality for
the 2023 financial statements as a whole and performance materiality
as follows:
Financial statements
Materiality
£45,524
Basis for determining materiality
1% of Gross Assets
Rationale for the benchmark applied.
Athelney Trust plc is a UK-based investment company that focuses on providing
long term growth in dividends and capital, and consequently gross assets has
been used as the benchmark on which to calculate materiality. We have chosen
gross assets as the Company’s investment portfolio, which we considered to be
the key driver of the Company’s total return performance, forms a significant part
of the gross asset value calculation. Consequently, we believe that gross assets is
the benchmark on which the users of the financial statements are likely to focus.
We have chosen this benchmark, based on the wider audit industry using 1%- 2%
as a common threshold for gross assets of this nature. Using the lower end of the
threshold reflects the fact that we are auditing Athelney Trust PLC for the first
time in FY2023.
Performance materiality
£22,762
Basis for determining performance materiality
50% of overall materiality
29 | Athelney Trust plc | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
Rationale for the benchmark applied
We considered a number of factors:
• We are auditing Athelney Trust PLC for the first time in FY2023.
• Athelney Trust PLC is a public interest entity with a premium listing on
the main market of the London Stock Exchange.
• Performance materiality is set at 50% of materiality in line with the
firm's guidance on materiality for listed company audits.
The audit team has set specific levels of overall materiality for Directors’
remuneration at £5,000 and performance materiality to be 50% of this
figure, at £2,500. This amount was determined after considering the
level of each individual director’s remuneration.
We agreed with the Audit Committee that we would report to them all
individual audit differences in excess of £2,276. We also agreed to
report differences below this threshold that, in our view, warranted
reporting on qualitative grounds.
Conclusions relating to going concern
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 the following
procedures:
• We have critically assessed the Company's cash flow
forecasts, which are prepared based on current financial
performance expectations (including sensitivity analysis) and
assessed the Company’s ability to meet its liabilities as they
fall due, including but not limited to, other external factors
that in our opinion might affect the going concern status of
the Company.
• We have evaluated the key assumptions in the forecast, which
are consistent with our knowledge of the business and
considered whether these are supported by the evidence
provided.
• We assessed management’s ability to prepare accurate
forecasts by comparing the 2023 cash flow forecasts available,
against the actual results of the year ended 31 December
2023.
• We examined the disclosures in the financial statements
relating to the going concern basis of preparation and the
explanation of the directors’ assessment in light of the
evidence obtained.
• We examined and critically assessed the directors’
assessment of liquidity of the invested shares at the current
prevailing market price.
• We also critically assessed the directors’ viability statement by
reviewing the 3-year forecasts and analysing the logic and
assumptions used in the forecasts.
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.
In relation to the Company’s reporting on how it has applied the
UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
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
course of the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether
there is a material misstatement in the financial statements. 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.
Opinions on other matters prescribed by the Companies
Act 2006
In our opinion, the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
• the information given in the Strategic Report and the
Report of the Directors for the financial year for which
the financial statements are prepared is consistent with
the financial statements; and
• the Strategic Report and the Report of the Directors have
been prepared in accordance with applicable legal
requirements.
30 | Athelney Trust plc | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
Matters on which we are required to report by exception.
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Report of the
Directors.
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches
not visited by us; or
• the financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Corporate Governance statement
We have reviewed the directors’ statement in relation to going concern,
longer-term viability and that part of the Corporate Governance
Statement relating to the Company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review by the
Listing Rules.
Based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and our
knowledge obtained during the audit:
• Directors' statement with regards the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 21;
• Directors’ explanation as to their assessment of the
Company’s prospects, the period this assessment covers and
why the period is appropriate set out on page 21;
• Director’s statement on whether it has a reasonable
expectation that the Company will be able to continue in
operation and meets its liabilities set out on page 21;
• Directors' statement on fair, balanced and understandable as
set out on page 23;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
pages 14-15;
• Section of the annual report that describes the review of
effectiveness of risk management and internal control
systems set out on page 19 and;
• Section describing the work of the audit committee set out on
pages 17-18.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set
out on page 23, 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 aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities is available on the
FRC’s website at: frc.org.uk.
This description forms part of our auditor’s report.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud
is detailed below.
The objectives of our audit in respect of fraud, are to identify and
assess the risks of material misstatement of the financial
statements due to fraud; to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement
due to fraud, through designing and implementing appropriate
responses to those assessed risks; and to respond appropriately to
instances of fraud or suspected fraud identified during the audit.
However, the primary responsibility for the prevention and
detection of fraud rests with both management and those charged
with governance of the Company.
Our approach was as follows:
• We obtained an understanding of the legal and
regulatory requirements applicable to the Company and
considered that the most significant are the Companies
Act 2006, FRS 102, the AIC Statement of Recommended
Practice, the Listing Rules, the Disclosure and
Transparency Rules, compliance with HMRC conditions
for Investment Trust Status and UK taxation legislation.
• We obtained an understanding of how the Company
complies with these requirements by discussions with
management and those charged with governance.
31 | Athelney Trust plc | Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
Continued
• We assessed the risk of material misstatement of the financial
statements, including the risk of material misstatement due
to fraud and how it might occur, by holding discussions with
management and those charged with governance.
• We inquired of management and those charged with
governance as to any known instances of non-compliance or
suspected non-compliance with laws and regulations.
• Based on this understanding, we designed specific
appropriate audit procedures to identify instances of non-
compliance with laws and regulations. This included making
enquiries of management and those charged with governance
and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above.
We are less likely to become aware of instances of non-compliance with
laws and regulations that are not closely related to events and
transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk
of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Other matters which we are required to address.
We were appointed by the Directors on 16 October 2023 to audit the
financial statements for the period ending 31 December 2023. This is
the first year of our appointment.
The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Company and we remain independent of the Company
in conducting our audit.
Our audit opinion is consistent with the additional report to the
audit committee.
Use of our report
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken for no purpose other
than to draw to the attention of the company’s members those
matters which we are required to include in an auditor’s report
addressed to them. To the fullest extent permitted by law, we do
not accept or assume responsibility to any party other than the
company and company’s members as a body, for our work, for this
report, or for the opinions we have formed.
12 February 2024
Mital Shah (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
Chartered Accountants
Statutory Auditor
6
th
Floor
9 Appold Street
London
EC2A 2AP
32 | Athelney Trust plc | Annual Report 2023
Income Statement
For the Year Ended 31 December 2023
2023 2022
Note
Revenue
Capital
Total
Revenue
Capital
Total
£
£
£
£
£
£
Losses on
investments held at
fair value
8
-
(57,725)
(57,725)
-
(1,787,296)
(1,787,296)
Income from
investments
2
219,366
-
219,366
183,273
-
183,273
Investment
management
expenses
3
(3,419)
(31,019)
(34,438)
(4,008)
(36,327)
(40,335)
Other expenses
3
(48,254)
(91,604)
(139,858)
(30,734)
(78,720)
(109,454)
Net return on
ordinary activities
before taxation
167,693
(180,348)
(12,655)
148,531
(1,902,343)
(1,753,812)
Taxation
5
(623)
-
(623)
-
-
-
Net return (negative
return) on ordinary
activities after
taxation
6
167,070
(180,348)
(13,278)
148,531
(1,902,343)
(1,753,812)
Net return per
ordinary share
6
7.7p
(8.3p)
(0.6p)
6.9p
(88.2p)
(81.3p)
Dividend per
ordinary share paid
during the year
7
9.7p
9.6p
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the year.
The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with
applicable Financial Reporting Standards (“FRS”). The supplementary revenue return and capital return columns are prepared in
accordance with the Statement of Recommended Practice (“AIC SORP”) issued in July 2022 by the Association of Investment
Companies.
The notes on pages 36 to 40 form part of these financial statements.
33 | Athelney Trust plc | Annual Report 2023
Statement of Financial Position
As at 31 December 2023
Company Number: 02933559
Note
2023
2022
£
£
Fixed assets
Investments held at fair value through profit and
loss
8
4,374,302
4,180,985
Current assets
Debtors
9
137,709
543,301
Cash at bank and in hand
40,347
27,361
178,056
570,662
Creditors: amounts falling due within one year
10
(40,388)
(17,085)
Net current assets
137,668
553,577
Total assets less current liabilities
4,511,970
4,734,562
Net assets
4,511,970
4,734,562
Capital and reserves
Called up share capital
11
539,470
539,470
Share premium account
881,087
881,087
Other reserves (non distributable)
Capital reserve - realised
2,467,624
2,539,394
Capital reserve - unrealised
453,206
561,784
Revenue reserve (distributable)
170,583
212,827
Shareholders' funds - all equity
4,511,970
4,734,562
Net Asset Value per share
13
209.1p
219.4p
These financial statements were approved and authorised for issue by the Board of Directors on 12 February 2024 and signed on their
behalf by
Dr Manny Pohl AM
Managing Director
The notes on pages 36 to 40 form part of these financial statements.
34 | Athelney Trust plc | Annual Report 2023
Statement of Changes in Equity
For the Year Ended 31 December 2023
Called-up
Capital
Capital
Total
Share
Share
reserve
reserve
Revenue
Shareholders’
Capital
Premium
realised
unrealised
reserve
Funds
£
£
£
£
£
£
Balance brought forward at
1 January 2022
539,470
881,087
2,271,737
2,731,784
271,452
6,695,530
Net profits on realisation
of investments
-
-
382,704
-
-
382,704
Decrease in unrealised
Appreciation
-
-
-
(2,170,000)
-
(2,170,000)
Expenses allocated to
Capital
-
-
(115,047)
-
-
(115,047)
Profit for the year
-
-
-
-
148,531
148,531
Dividend paid in year
-
-
-
-
(207,156)
(207,156)
Shareholders’ Funds at 31
December 2022
539,470
881,087
2,539,394
561,784
212,827
4,734,562
Balance brought forward at
1 January 2023
539,470
881,087
2,539,394
561,784
212,827
4,734,562
Net profits on realisation
of investments
-
-
50,853
-
-
50,853
Decrease in unrealised
Appreciation
-
-
-
(108,578)
-
(108,578)
Expenses allocated to
Capital
-
-
(122,623)
-
-
(122,623)
Profit for the year
-
-
-
-
167,070
167,070
Dividend paid in year
-
-
-
-
(209,314)
(209,314)
Shareholders’ Funds at 31
December 2023
539,470
881,087
2,467,624
453,206
170,583
4,511,970
The notes on pages 36 to 40 form part of these financial statements.
35 | Athelney Trust plc | Annual Report 2023
Statement of Cash Flows
For the Year Ended 31 December 2023
2023
2022
£
£
Cash flows used in operating activities
Net revenue return
167,070
148,531
Adjustment for:
Expenses charged to capital
(122,623)
(115,047)
Increase/(decrease) in creditors
23,303
(44)
Decrease/(increase) in debtors
405,592
(298,138)
Cash received/(used) in operations
473,342
(264,698)
Cash flows from investing activities
Purchase of investments
(906,775)
(1,003,583)
Proceeds from sales of investments
655,733
1,472,122
Net cash (used)/received from investing activities
(251,042)
468,539
Equity dividends paid
(209,314)
(207,156)
Net increase/(decrease) in cash
12,986
(3,315)
Cash at the beginning of the year
27,361
30,676
Cash at the end of the year
40,347
27,361
As the company does not have any loans, overdrafts or hire purchase arrangements, net debt is equal to cash and therefore no
reconciliation of net debt has been disclosed.
The notes on pages 36 to 40 form part of these financial statements.
36 | Athelney Trust plc | Annual Report 2023
Notes to the Financial Statements
For the Year Ended 31 December 2023
1. Accounting Policies
1.1 Statement of Compliance and Basis of Preparation of Financial
Statements
The financial statements are prepared in accordance with applicable
United Kingdom accounting standards, including Financial Reporting
Standard 102 (“FRS 102”), the Companies Act 2006 and with the AIC
Statement of Recommended Practice (“SORP”) issued in July 2022,
regarding the Financial Statements of Investment Trust Companies
and Venture Capital Trusts. All the Company’s activities are
continuing.
The presentation currency of the financial statements is pounds
sterling, being the functional currency of the primary economic
environment in which the company operates. Monetary amounts in
these financial statements are rounded to the nearest pound.
1.2 Going concern
The Directors have made an assessment of the Company’s ability to
continue as a going concern. This has included consideration of
portfolio liquidity, the financial position in respect of its cashflows,
the working arrangements of key service providers, the continued
eligibility to be approved as an investment trust company, the
impact of the current economic environment and the current
conflicts in the Ukraine and the Middle East. In addition the Directors
are not aware of any material uncertainties that may cast significant
doubt upon the Company’s ability to continue as a going concern.
The Directors are satisfied that the Company has sufficient resources
to continue in business for the foreseeable future being a period of
at least 12 months from the date these financial statements were
approved. Therefore, the financial statements have been prepared
on the going concern basis.
1.3 Income
Income from investments including taxes deducted at source is
recognised when the right to the return is established (normally the
ex-dividend date). UK dividend income is reported net of tax credits
in accordance with FRS 102 section 23 “Revenue”. Interest is dealt
with on an accruals basis.
1.4 Investment Management Expenses
All three Directors are involved in investment management, 10% of
their salaries or fees have been charged to revenue and the other
90% to capital. All other investment management expenses have
been charged to capital. The Board propose continuing this basis for
future years.
1.5 Other Expenses
Expenses (including VAT) and interest payable are dealt with on an
accruals basis and charged through the Revenue and Capital
Accounts in an allocation that the Board consider to be a fair
distribution of the costs incurred.
1.6 Investments
Listed investments comprise those listed on the Official List of the
London Stock Exchange. Unlisted investments are traded on AIM or
AQSE. Profits or losses on sales of investments are taken to realised
capital reserve. Any unrealised appreciation or depreciation is taken
to unrealised capital reserve.
Investments have been classified as “fair value through profit and
loss” upon initial recognition.
Subsequent to initial recognition, investments are measured at fair
value with changes in fair value recognised in the Income Statement.
Securities of companies quoted on a recognised stock exchange are
valued by reference to their quoted bid prices on 31 December.
1.7 Taxation
The tax effect of different items of income and expenses is allocated
between capital and revenue on the same basis as the particular
item to which it relates, using the Company’s effective rate of tax for
the year.
1.8 Judgements and estimates
The Directors confirm that no judgements or significant estimates
have been made in the process of applying the Company’s
accounting policies.
1.9 Deferred Taxation
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed by the balance sheet date.
Deferred tax liabilities are recognised for all taxable timing
differences but deferred tax assets are only recognised if it is
considered more likely than not that there will be suitable profits
from which the future reversal of the underlying timing differences
can be deducted. Deferred tax assets and liabilities are calculated at
the tax rates expected to be effective at the time the timing
differences are expected to reverse. Deferred tax assets and
liabilities are not discounted.
1.10 Capital Reserves
Capital Reserve – Realised
Gains and losses on realisation of fixed asset investments are dealt
with in this reserve. As per the company articles the reserve is not
readily distributable.
Capital Reserve – Unrealised
Increases and decreases in the valuations of fixed asset investments
are dealt with in this reserve. Unrealised capital reserves cannot be
distributed by way of dividends or similar.
1.11 Dividends
In accordance with FRS 102 Section 32“Events after the end of the
Reporting Period”, dividends are included in the financial statements
in the year in which they go ex-div.
1.12 Share Issue Expenses
The costs associated with issuing shares are written off against any
premium arising on the issue of Share Capital.
1.13 Financial Instruments
Short term debtors and creditors are held at cost.
37 | Athelney Trust plc | Annual Report 2023
Notes to the Financial Statements
For the Year Ended 31 December 2023 (continued)
2. Income
Income from investments
2023
2022
£
£
UK dividend income
140,588
108,179
Foreign dividend income
2,160
3,760
UK Property REITs
73,339
71,308
Bank interest
3,279
26
Total income
219,366
183,273
UK dividend income
2023
2022
£
£
UK Main Market listed investments
105,608
79,926
UK AIM-traded shares
34,980
28,253
140,588
108,179
3. Return on Ordinary Activities before Taxation
The following amounts (inclusive of VAT) are included within
investment management and other expenses:
2023
2022
£
£
Directors’ remuneration:
Services as a director
21,000
21,000
Otherwise in connection with
management
34,193
40,077
Auditor’s remuneration:
Audit Services - Statutory audit
46,140
11,984
Miscellaneous expenses:
Management services
32,472
32,472
PR and communications
2,225
6,687
Stock exchange subscription
12,000
10,500
Sundry investment management and
other expenses
24,826
23,276
Legal fees
1,440
3,793
174,296
149,789
4. Employees and Directors’ Remuneration
2023
2022
£
£
Costs in respect of Directors:
Non-executive Directors’ fees
21,000
21,000
Wages and salaries
34,193
40,077
55,193
61,077
Average number of employees:
Chair
-
-
Investment
1
1
Administration
-
-
1
1
5. Taxation
(i) On the basis of these financial statements no provision has been
made for corporation tax (2022: Nil).
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is lower than (2022: higher than) the
average small company rate of corporation tax in the UK of 19 per
cent. The differences are explained below:
2023
2022
£
£
Total return on ordinary activities
before tax
(12,655)
(1,753,812)
Total return on ordinary activities
multiplied by the average small
company rate of corporation tax
19% (2020: 19%)
(2,404)
(333,223)
Effects of:
UK dividend income not taxable
(26,686)
(20,739)
Revaluation of shares not taxable
20,630
412,299
Capital gains not taxable
(9,662)
(72,714)
Unrelieved management expenses
18,745
14,377
Current tax charge for the year
623
-
The Company has unrelieved excess revenue management expenses
of £780,914 at 31 December 2023 (2022: £671,156) and £102,597
(2022: £102,597) of capital losses for Corporation Tax purposes and
which are available to be carried forward to future years. It is unlikely
that the Company will generate sufficient taxable profits in the future
to utilise these expenses and therefore no deferred tax asset has
been recognised.
Historically the Company has received approval from HM Revenue and
Customs under Section 1158 of the Corporation Tax Act 2010, as a
result of this approval the Company was not liable to Corporation Tax
on any realised investment gains for 2023 or the preceding years. The
Directors intend to continue to meet the conditions required to obtain
approval and therefore no deferred tax has been provided on any
capital gains or losses arising on the revaluation or disposal of
investments.
The Directors are fully aware that the Company is not a close
company and of the rules associated with this status. The Company
holds its Investment Trust status under the S446 Companies Act 2010
exemption because more than 35% of the company’s shares are held
by the public and have been actively traded in the past 12 months on
the London Stock Exchange and this is regularly reviewed by the
Directors.
38 | Athelney Trust plc | Annual Report 2023
Notes to the Financial Statements
For the Year Ended 31 December 2023 (continued)
6. Return per Ordinary Share
Returns per share are based on the weighted average number of shares
in issue during the year.
2023
£
£
£
Revenue
Capital
Total
Attributable return on
ordinary activities after
taxation
167,070
(180,348)
(13,278)
Weighted average
number of shares
2,157,881
Return per ordinary share
7.7p
(8.3p)
(0.6p)
2022
£
£
£
Revenue
Capital
Total
Attributable return on
ordinary activities
after taxation
148,531
(1,902,343)
(1,753,812)
Weighted average
number of shares
2,157,881
Return per ordinary
share
6.9p
(88.2p)
(81.3p)
7. Dividend
2023
2022
£
£
Final dividend in respect of 2022 of
7.5p (2022: a final dividend of 7.5p
was paid in respect of 2021) per
share
161,841
161,841
Interim dividend in respect of 2023
of 2.2p (2022: an interim dividend
of 2.1p was paid in respect of 2022)
per share
47,473
45,315
209,314
207,156
Set out below is the total dividend payable in respect of the financial
year, which is the basis on which the requirements of Section 1158 of
the Corporation Tax Act 2010 are considered.
It is recommended that a final dividend of 7.6p (2022: 7.5p) per
ordinary share be paid out of revenue profits amounting to a total of
£167,070. An interim dividend of 2.2p per ordinary share was paid on
22 September 2023 amounting to £47,473 making the total dividend
payable in the year £211,472.
For the year 2022, a final dividend of 7.6p was paid on 6 April 2023
amounting to a total of £163,999. An interim dividend of 2.1p per
ordinary share was paid on 23 September 2022 amounting to £45,315
making the total dividend paid in the year £207,156.
Summary of dividends paid for the last 10 financial years
Ex-div date
Dividend
Type
Amount
Financial
Year
08/03/2024
Proposed
7.6p
2023
07/09/2023
6/04/2023
Interim
Final
2.2p
7.5p
2023
2022
08/09/2022
Interim
2.1p
2022
10/3/2022
Final
7.5p
2021
09/9/2021
Interim
2.0p
2021
11/3/2021
Final
7.7p
2020
10/9/2020
Interim
1.7p
2020
19/3/2020
Final
9.3p
2019
20/3/2019
Final
9.1p
2018
01/3/2018
Final
8.9p
2017
09/3/2017
Final
8.6p
2016
17/3/2016
Final
7.9p
2015
19/3/2015
Final
6.7p
2014
19/3/2014
Final
5.5p
2013
2023
2022
£
£
Revenue available for
distribution
167,070
148,531
Interim dividend paid
(47,473)
(45,315)
Final dividend in respect of
financial year end
(163,999)
(161,841)
Distribution of prior year
reserves
(44,402)
(58,625)
8. Investments
Movements in year
2023
2022
£
£
Valuation at beginning of
year
4,180,985
6,436,820
Purchases at cost
906,775
1,003,583
Sales - proceeds
(655,733)
(1,472,122)
- realised gains on sales
50,853
382,704
Decrease in unrealised
appreciation
(108,578)
(2,170,000)
Valuation at end of year
4,374,302
4,180,985
Book cost at end of year
3,921,097
3,619,201
Unrealised appreciation at
the end of the year
453,205
561,784
4,374,302
4,180,985
UK Main Market listed
investments
2,886,362
3,070,365
UK AIM-traded shares
1,487,940
1,110,620
4,374,302
4,180,985
39 | Athelney Trust plc | Annual Report 2023
Notes to the Financial Statements
For the Year Ended 31 December 2023 (continued)
Gains on investments
2023
2022
£
£
Realised gains on sales
50,853
382,704
Decrease in unrealised appreciation
(108,578)
(2,170,000)
(57,725)
(1,787,296)
The purchase costs and sales proceeds above include transaction costs
of £5,429 (2022: £3,515) and £2,795 (2022: £3,302) respectively.
9. Debtors
2023
2022
£
£
Investment transaction debtors
104,128
513,597
Other debtors
33,581
29,704
137,709
543,301
10. Creditors: amounts falling due within one
year
2023
2022
£
£
Social security and other taxes
700
700
Other creditors
2,880
2,850
Accruals and deferred income
36,808
13,535
40,388
17,085
11. Called Up Share Capital
2023
2022
£
£
Authorised
10,000,000 Ordinary Shares of 25p
2,500,000
0
2,500,000
Allotted, called up and fully paid
2,157,881 Ordinary Shares of 25p
539,470
539,470
12. Financial Instruments
The Company’s financial instruments comprise equity investments, cash
balances and debtors and creditors that arise directly from its
operations, for example, in respect of sales and purchases awaiting
settlement.
The major risks associated with the Company are market, credit and
liquidity risk. The Company has established a framework for managing
these risks. The Directors have guidelines for the management of
investments and financial instruments.
Market Risk
Market price risk arises mainly from uncertainty about future prices of
financial investments used in the Company’s business. It represents the
potential loss the Company might suffer through holding market
positions by way of price movements other than movements in
exchange rates and interest rates.
The Company’s investment portfolio is exposed to market
price fluctuations which are monitored by the Fund Manager
who gives timely reports of relevant information to the
Directors.
Adherence to the investment objectives and the internal
controls on investments set by the Company mitigates the risk
of excessive exposure to any one particular type of security or
issuer.
The Company’s exposure to other changes in market prices at
31 December on its investments is as follows:
A 20% decrease in the market value of investments at 31
December 2023 would have decreased net assets attributable
shareholders by 47 pence per share (2022: 39 pence per
share). An increase of the same percentage would have an
equal but opposite effect on net assets attributable to
shareholders.
Market risk also arises from changes in interest rates and
exchange risk. All of the Company’s assets are in sterling and
accordingly the Company has limited currency exposure. The
majority of the Company’s financial assets are non-interest
bearing, as a result, the Company’s financial assets are not
subject to significant risk due to fluctuations in the prevailing
levels of market interest rates.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the balance sheet date.
Bankruptcy or insolvency of the custodian may cause the
Company’s rights with respect to securities held with the
custodian to be delayed.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty
in meeting obligations associated with financial liabilities. The
Company is able to reposition its investment portfolio when
required so as to accommodate liquidity needs. However, it
may be difficult to realise its investment portfolio in adverse
market conditions.
Maturity Analysis of Financial Liabilities
The Company’s financial liabilities consist of creditors as
disclosed in note 10. All items are due within one year.
Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure the Company’s ability to continue as a going
concern;
• to provide an adequate return to shareholders;
• to support the Company’s stability and growth;
• to provide capital for the purpose of further
investments.
40 | Athelney Trust plc | Annual Report 2023
Notes to the Financial Statements
For the Year Ended 31 December 2023 (continued)
The Company actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure, taking into
consideration the future capital requirements of the Company and
capital efficiency, projected operating cash flows and projected
strategic investment opportunities. The management regards capital as
total equity and reserves, for capital management purposes.
Fair values of financial assets and financial liabilities
Fixed asset investments (see note 8) are valued at market bid
price
where available which equates to their fair values. The fair values of all
other assets and liabilities are represented by their carrying values in
the balance sheet.
2023
2022
£
£
Fair value through profit or loss
investments
4,374,302
4,180,985
Financial instruments by category
The financial instruments of the Company fall into the following
categories
31 December 2023
At
Amortised
Cost
Assets at
fair value
through
profit or
loss
Total
Assets as per balance
sheet
£
£
£
Investments
-
4,374,302
4,374,302
Debtors
137,709
-
137,709
Cash at bank
40,347
-
40,347
Total
178,056
4,374,302
4,552,358
Liabilities as per the
balance sheet
Creditors
39,688
-
39,688
Total
39,688
-
39,688
31 December 2022
At Amortised
Cost
Assets at
fair value
through
profit or
loss
Total
Assets as per
balance sheet
£
£
£
Investments
-
4,180,985
4,180,985
Debtors
543,301
-
543,301
Cash at bank
27,361
-
27,361
Total
570,662
4,180,985
4,751,647
Liabilities as per
the balance
sheet
Creditors
16,385
-
16,385
Total
16,385
-
16,385
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair
value hierarchy of financial instruments.
The fair value hierarchy consists of the following three
classifications:
Classification A – Quoted prices in active markets for identical
assets or liabilities.
Quoted in an active market in this context means quoted prices
are readily and regularly available and those prices represent
actual and regularly occurring market transactions on an arm’s
length basis.
Classification B – The price of a recent transaction for an
identical asset, where quoted prices are unavailable.
The price of a recent transaction for an identical asset provides
evidence of fair value as long as there has not been a significant
change in economic circumstances or a significant lapse of time
since the transaction took place. If it can be demonstrated that
the last transaction price is not a good estimate of fair value
(e.g. because it reflects the amount that an entity would receive
or pay in a forced transaction, involuntary liquidation or distress
sale), that price is adjusted.
Classification C – Inputs for the asset or liability that are based
on observable market data and unobservable market data, to
estimate what the transaction price would have been on the
measurement data in an arm’s length exchange motivated by
normal business considerations.
The Company only holds classification A investments (2022:
classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of
£4,511,970 (2022: £4,734,562) divided by 2,157,881 (2022:
2,157,881) ordinary shares in issue at the year end.
2023
2022
£
£
Net asset value per
share
209.1p
219.4p
14. Dividends paid to Directors
During the year the following dividends were paid to the
Directors of the Company as a result of their total
shareholding:
Dr Manny Pohl AM
£8,342¹
Simon Moore
£6,499
Frank Ashton
£ 226
Notes:
1. Manny Pohl’s relationship with EC Pohl & Co Pty Ltd
is described in Note 1 to the table of Directors’
interests on page 25. During the year dividends
amounting to £8,342 were paid to EC Pohl & Co Pty
Ltd.
41 | Athelney Trust plc | Annual Report 2023
Officers and Financial Advisors
Directors: Mr N F Ashton (Chair) Email: frankashton@athelneytrust.co.uk
Dr E C Pohl Email: mannypohl@athelneytrust.co.uk
Mr S Moore Email: simonmoore@athelneytrust.co.uk
Secretary: Mrs D Warburton Email: secretary@athelneytrust.co.uk
Waterside Court Tel: 01326 378 288
Falmouth Road
Penryn
Cornwall, TR10 8AW
Registered Office: Waterside Court Email: info@athelneytrust.co.uk
Falmouth Road Tel: 01326 378 288
Penryn Website: http://www.athelneytrust.co.uk
Cornwall, TR10 8AW
Company Number: 02933559
(Incorporated and registered in England)
Solicitor: Druces LLP Email: d.smith@druces.com
Salisbury House Tel: 020 7638 9271
London Wall
London
EC2M 5PS
Stockbroker: James Sharp & Co Email: mail@jamessharp.co.uk
5 Bank Street Tel: 0161 764 4043
Bury
Lancashire, BL9 0DN
Auditor: Moore Kingston Smith LLP Email: mshah@mks.co.uk
Broadgate Quarter Tel: 020 4582 1000
9 Appold Street
London
EC2A 2AP
Banker: HSBC Bank Plc
Market Street
Falmouth
Cornwall, TR11 3AA
Registrar: Share Registrars Limited Email: peter@shareregistrars.uk.com
3 Millennium Centre Tel: 01252 821 390
Crosby Way
Farnham
Surrey, GU9 7XX
Company number
02933559
Athelney Trust
Waterside Court, Falmouth Road
Penryn, Cornwall TR10 8AW
athelneytrust.co.uk