2138004PBWN5WM2XST62 2021-07-01 2022-06-30 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 2138004PBWN5WM2XST62 2022-06-30 2138004PBWN5WM2XST62 2021-06-30 2138004PBWN5WM2XST62 2020-06-30 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 ifrs-full:IssuedCapitalMember 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 ifrs-full:SharePremiumMember 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 ifrs-full:CapitalRedemptionReserveMember 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 ifrs-full:CapitalReserveMember 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 inv:RevenueReserveMember 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 inv:RevenueMember 2138004PBWN5WM2XST62 2020-07-01 2021-06-30 inv:CapitalMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 ifrs-full:IssuedCapitalMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 ifrs-full:SharePremiumMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 ifrs-full:CapitalRedemptionReserveMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 ifrs-full:CapitalReserveMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 inv:RevenueReserveMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 inv:RevenueMember 2138004PBWN5WM2XST62 2021-07-01 2022-06-30 inv:CapitalMember 2138004PBWN5WM2XST62 2020-06-30 ifrs-full:IssuedCapitalMember 2138004PBWN5WM2XST62 2020-06-30 ifrs-full:SharePremiumMember 2138004PBWN5WM2XST62 2020-06-30 ifrs-full:CapitalRedemptionReserveMember 2138004PBWN5WM2XST62 2020-06-30 ifrs-full:CapitalReserveMember 2138004PBWN5WM2XST62 2020-06-30 inv:RevenueReserveMember 2138004PBWN5WM2XST62 2021-06-30 ifrs-full:IssuedCapitalMember 2138004PBWN5WM2XST62 2021-06-30 ifrs-full:SharePremiumMember 2138004PBWN5WM2XST62 2021-06-30 ifrs-full:CapitalRedemptionReserveMember 2138004PBWN5WM2XST62 2021-06-30 ifrs-full:CapitalReserveMember 2138004PBWN5WM2XST62 2021-06-30 inv:RevenueReserveMember 2138004PBWN5WM2XST62 2022-06-30 ifrs-full:IssuedCapitalMember 2138004PBWN5WM2XST62 2022-06-30 ifrs-full:SharePremiumMember 2138004PBWN5WM2XST62 2022-06-30 ifrs-full:CapitalRedemptionReserveMember 2138004PBWN5WM2XST62 2022-06-30 ifrs-full:CapitalReserveMember 2138004PBWN5WM2XST62 2022-06-30 inv:RevenueReserveMember iso4217:GBP iso4217:GBP xbrli:shares
for the year ended 30 June 2022
CONTENTS
Directors
and Advisers
1
Strategic Report
Summary of Results
2
Investment Objective
2
Investment Policy
2
Guiding Principles
3
Chairman’
s Statement
4
Portfolio Summary
6
Portfolio
and Assets
7
Principal Risks and Risk Management
8
Directors’
Report
1
1
Audit Committee Report
22
Directors’
Remuneration Report
24
Statement of Directors’
Responsibilities
27
Independent
Auditors’
Report to the Members
28
Consolidated Income Statement
35
Consolidated Statement of Changes in Equity
36
Company Statement of Changes in Equity
37
Consolidated Balance Sheet
38
Company Balance Sheet
39
Consolidated and Company Cash Flow Statements
40
Notes to the Financial Statements
41
Shareholder Information
57
Notice of
Annual General Meeting
58
1
DIRECTORS AND ADVISERS
DIRECTORS
I.R. Dighé (Chairman)
T
.W
.J. Cleverly
T
.M. Metcalfe
M.H.W
. Perrin
M.J. W
eeks
ADVISERS
Secretary
,
Administrator
and Registered Ofce
ISCA
Administration Services Limited
Suite 8, Bridge House, Courtenay Street
Newton Abbot
Devon TQ12 2QS
T
elephone: 01392 487056
tic@iscaadmin.co.uk
Custodian
Fiske plc
Salisbury House
London W
all
London EC2M 5QS
Broker
Shore Capital Stockbrokers Limited
Cassini House
57 St James’
s Street
London SW1A
1LD
Independent Auditor
PKF Littlejohn LLP
Statutory Auditor
15 W
estferry Circus
Canary Wharf
London E14 4HD
Solicitor
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
W
est Sussex BN99 6DA
T
elephone: 0371 384 2030
W
ebsite:
shareview
.co.uk
Identication Codes
ISIN:
GB0004658257
SEDOL:
0465825
Bloomberg:
INV LN
LEI:
2138004PBWN5WM2XST62
W
ebsite:
https://theinvestmentcompanyplc.co.uk
For general shareholder queries please contact:
info@theinvestmentcompanyplc.co.uk
2
SUMMAR
Y OF
RESUL
TS
At 30 June
2022
At 30 June
2021
Change
%
Equity Shareholders’
funds (£)
16,048,191
16,281,804
(1.43)
Number of ordinary shares in issue
4,772,049
4,772,049
–
Net asset value (“NA
V”) per ordinary share
336.30p
341.19p
(1.43)
Ordinary share price (mid)
294.00p
309.00p
(4.85)
Discount to NA
V
12.58%
9.43%
(3.15)
At 30 June
2022
At 30 June
2021
T
otal return per ordinary share*
(5.21)p
29.08p
Dividends paid per ordinary share
–
3.00p
*
The total return per ordinary share is based on total income after taxation as detailed in the Consolidated Income Statement and in Note 6.
INVESTMENT OBJECTIVE
At the
Annual General Meeting held on 4 November 2020, Shareholders voted to amend the Company’
s Investment
Objective and Policy to that shown below
.
The Company’
s investment objective is to protect the purchasing power of its capital in real terms, and to participate in
enduring economic activities which lend themselves to genuine capital accumulation and wealth creation.
INVESTMENT POLICY
The Company will seek to acquire and hold, with no predetermined investment time horizon, a collection of assets which,
in the Directors’
judgement, are well-suited to the avoidance of a permanent loss of capital.
These assets will be comprised
of minority participations in the equity
, debt or convertible securities of quoted businesses which the Directors believe
are led by responsible and like-minded managers and suitable for the long-term compounding of earnings. In addition, to
protect its capital as well as to maintain liquidity for future investments, the Company will keep reserves in (a) liquid debt
instruments such as cash in banks or securities issued by governments and/or (b) liquid, non-debt, tangible assets such as
gold bullion, whether held indirectly or in physical form.
The Company has no predetermined maximum or minimum levels of exposure to asset classes, currencies or geographies,
and has the ability to invest globally
.
These exposures will be monitored by the Board in order to ensure an adequate
spreading of risks. No holding in an individual company or debt instrument will represent more than 15 per cent. by value
of the Company’
s total assets at the time of acquisition (such restriction does not, however
, apply to gold bullion or cash
balances). The Company’
s holdings of gold bullion may be as high as 35 per cent. of total assets at
the time of investment.
Given the Company’
s investment objective, asset mix and time horizon, the portfolio will not seek to track any benchmark
or index. The Company will not invest more than 10 per cent. of its total assets in other listed closed-ended investment
funds. The Company will not use derivative instruments for
speculative purposes, nor will it use currency hedges to
manage returns in any currency
.
The Company’
s gearing will not exceed 20 per cent. of net assets at the time of drawdown.
No material change will be made to the investment policy without the approval of Shareholders by ordinary resolution.
STRA
TEGIC REPOR
T
3
In addition to the Investment Objective and Policy disclosed above, Shareholders are reminded of the Guiding Principles
adopted by the Board as set out in the Circular published on 7 October 2020 and reproduced below:
GUIDING PRINCIPLES
The success of the Company demands a shared understanding of the Company’
s goals and an appreciation of the values
that will guide the Board’
s decision-making. While the investment work will speak for itself, we (your Board) believe it
necessary to set out a statement of principles that will guide our investment decisions.
Our purpose is to protect the savings of our Shareholders. It is not to try to make Shareholders rich or to impress anyone.
W
e do not promise returns of any kind, either relative
or absolute. Instead, we promise two things: to be faithful to the
principles
outlined
here,
and
to
participate
alongside
those
we
serve
as
fellow
Shareholders.
The
Company’
s
nancial
results will be lumpy and, if considered over only a few years, will sometimes be disappointing. W
e are not concerned
with tomorrow
, but with preserving savings for the next generation.
W
e believe savings
are scarce.
It takes
time, effort
and sacrice
to
acquire
them,
and
holding
on
to
them is
difcult. W
e
have the utmost respect for their irreplaceability
. For this reason, our understanding of “risk” is fundamentally dif
ferent
from
much of
the nancial
industry
.
W
e
are unconcerned
with the
“risk”
(singular) of
the volatility
of
returns as
compared
to an index. W
e are, however
, profoundly concerned with understanding and managing the myriad of “risks” (plural) that
may
result
in
a
permanent
loss
of
capital.
In
doing
so,
we
believe
that
hubris,
unaccountability
,
and
nancialisation
are
every bit as threatening as weak nancial accounts and poor competitive standing.
W
e have no predetermined investment horizon or exit strategies and are keen to participate in the long-term compounding
of earnings. W
e see ourselves as owners rather than investors, and we seek to deploy our capital alongside other owners
whose life’
s work is committed to the long-term survival of their company
. The attributes we prize most – scarcity
,
permanence and independence – are rare. When we do come across them, we are not looking to sell.
W
e pay no attention to the
views of others in the nancial industry
, what they
expect or what they consider valuable. W
e
are neither bearish nor bullish, but keen to distinguish what is real and true from what is not.
W
e believe that our success
will not
come from a
strict set of
rules regarding
asset allocation,
position sizes, the
blind pursuit
of diversication,
or the
mimicking of any index. W
e do not rely on diversication to compensate us for risks we don’t understand.
W
e do nothing complicated or formulaic. W
e invest in businesses and people we understand and avoid those we do not,
no matter how compelling they may appear to be. W
e avoid the idea of growth for its own sake, short-term thinking, and
nancial engineering.
W
e like natural monopolies and
economic niches having scale, barriers
to entry and pricing power
.
W
e prefer
what is
rm, durable, earned,
and designed
for continuity
, rather
than what
is fragile,
eeting, and
unsure. W
e
think
that
endurance
is
valuable
and
that
it
is
the
result
of
focusing
on
the
customer
rather
than
nancial
rewards
that
ensue. Our emphasis on the qualitative may not be fashionable, but we believe it to be correct.
W
e believe our ability to hold adequate and suitable reserves is important to achieving our purpose, and that the quality of
our reserves matters just as much as the quality of our investments. W
e want reserves that are timeless – true assets that
are neither someone else’
s liability nor the plaything of central banks and political parties. For this reason gold bullion is
well suited to be an important component of our reserves.
W
e
value
responsibility
and
accountability
in
corporate
governance,
as
well
as
the
avoidance
of
conicts
of
interest
consistent
with
the
duty
of
loyalty
and
the
duty
of
care.
W
e
will
strive
to
keep
our
costs
low
,
but
will
not
sacrice
our
intellectual or operational freedom for the sake of lower costs.
STRA
TEGIC REPOR
T
continued
4
CHAIRMAN’S ST
A
TEMENT
During the twelve months the net asset value (“NA
V”) decreased by 1.4% to 336.3p and the share price decreased by
4.9% to 294.0p. There were three important components to the change in net asset value for the year: First, the price of
gold rose 16.3% against sterling and this increase added about 3.9% to the NA
V
. Second, the share price contribution from
the equities portfolio was nil, as the modest decline in share prices overseas was completely offset by the weaker British
pound. Third, the Company held 3.3% of net assets in depository receipts for Lukoil which were written down to
zero fair
value during the year on account of the impact of punitive international sanctions regimes which pose great uncertainty
as to the likelihood of receiving any future cash-ows from this holding.
The substantial weakness of the British pound was an important contributor to the results during the last twelve months.
Though this weakness was unexpected, the protection that comes from our broadly international collection of businesses
is deliberate. Most of our investments are listed in different currencies and
are active outside the UK. Excluding the gold
holdings – a currency in its own right – approximately 61.0% of the portfolio is invested in businesses whose primary
listing
and
trading
currency
is something
other than
the British
pound.
This temporarily
atters the
results when
the pound
is weak and will temporarily atten them when the pound is strong again.
Income and expenses
Expenses were down substantially from the prior year
. This was lar
gely attributable to both the one-time reorganisation
expenses
incurred
in
the
prior
year
,
and
this
being
the
rst
full
year
where
the
cost
benets
of
being
self-managed
(i.e.
there
being no external investment management fees) translated into a lower operating expense base. Income also declined as
we shifted away from an income-oriented portfolio to one focused on capital preservation. Despite the Company’
s small
size, dividend income offset most of the annual expenses.
The Board is not proposing a dividend: the results do not justify it and to do so would represent returning capital to
Shareholders in the form of taxable income.
Investments
Presently 67.4% of net assets is invested in 19 different businesses representing 14 dif
ferent industries with operations all
over Europe, the
Americas and beyond.
A
further 28.5% is invested in gold bullion held through three ETFs, and we hold
4.1% in cash and other legacy assets.
The changes to the portfolio were modest compared to the transformation of the prior year
. W
e added four new businesses
representing
interests
in
the
production
of
natural
avours
and
fragrances,
premium
dairy
production,
specialty
plastics
and cigarettes – all of which were on our radar screen from day one.
W
e also sold off four businesses, sold almost all
our remaining legacy assets, and made a small sale of gold bullion. These sales collectively realised
gains of £514,000
representing a 17.9% gain on cost. Excluding the sales of legacy assets and the compulsory redemption of Fromageries
Bel, the portfolio turnover for the year was approximately 15%. W
e think this was an especially active year and anticipate
lower turnover in the years to come.
W
e
remain
satised
that
gold bullion
–
as
opposed
to cash,
short-dated
bonds,
ination-linked
securities or
other
securities
– remains the appropriate reserve asset for a prudent saver looking to protect capital in a thoroughly disingenuous world.
In any case the events
of the last twelve months
have revealed the weaknesses
of these and other nancial
assets that we
think
is
endemic.
With the
added
benet
of
hindsight,
the
timing
of
the
November
2020
repurposing
of
the
Company's
investment
objective
was
opportune.
Exceptionally
high
ination,
paired
with
purposefully
depressed
interest
rates
and
rapidly falling
foreign
exchange
rates is
a
trifecta
which few
nancial
assets
can withstand.
Gold
is
no panacea
–
but
its
value comes from the fact that it is inert and completely unaffected by the world around it.
It is independent of any price
index,
foreign
exchange
level,
interest
rate,
or
the
credit
risk of
any
nancial
institution.
It
requires
nothing
and
it produces
nothing.
It
is
the
exemplar
of
nancial
independence
–
there
is
no
other
asset
like
it
–
and
it’
s
precisely
this
nancial
honesty which makes it valuable.
STRA
TEGIC REPOR
T
continued
5
The
illusory
world
of
quantitative
easing
and
zero
interest
rates
is
over
, and
we are
already faced
with
signicant
ination
and the spectre of recession. Government is already resorting to numerous scal measures to support households such
as
energy subsidies. History teaches us such interventions labeled as temporary rarely are and here in the UK,
The Bank of
England pleas for wage restraint seem to be going unheeded. Daily prot warnings from seemingly stable businesses are
routine. V
aluations
fall steeply
when
held
against
weakening
balance
sheets and
falling
protability
. The
share
prices of
soundly and conservatively run companies suffer just the same from higher costs of capital and the anticipation of more
challenging times.
Against this backdrop we continue to invest the capital alongside a small collection of entrepreneurs
and business owners. These are the people who make something real and valuable
to their customers and who favour
economic resilience, operational independence, and the
businesses survival above all
else. There is no formula, nancial
or moral, that will identify these owners for us, but these are the traits we look for in the businesses we own.
Board Overview
T
om
Cleverly
has
notied
the
Board
that
he
does
not
wish
to
seek
re-election
as
a
Director
at
the AGM
in
order
to
be
able
to
focus
on
his
other
business
commitments.
The
Board
wishes
to
record
their
deep
appreciation
of
his
signicant
contribution to the Company since his appointment in November 2020 and wishes him well in his future endeavours.
Outlook
The outlook for small, listed investment trusts remains challenging as Shareholders and their advisors grapple with
increasing
compliance
restrictions
as
to
liquidity
and
overall
market
capitalisation.
Y
our
Board
is
satised
as
to
the
underlying strength of its portfolio of undertakings but is fully cognisant of the immense challenges in growing the capital
base of the Company
. The Board continues to evaluate genuine opportunities to grow the capital base of the Company
against the strict criteria of capital preservation and growth over the longer term.
I. R. Dighé
Chairman
22 September 2022
STRA
TEGIC REPOR
T
continued
6
STRA
TEGIC REPOR
T
continued
POR
TFOLIO SUMMARY
Net
Asset Exposure by
T
rading Currency
At 30 June 2022
Currency
Equities
(%)
Fixed income
& prefer
ence
shares
(%)
Gold
(%)
Cash
& other
net assets
(%)
T
otal
(%)
GBP
6.8
0.4
–
2.4
9.6
CAD
9.4
–
–
–
9.4
CHF
5.6
–
–
–
5.6
EUR
37.6
–
–
1.3
38.9
NOK
3.9
–
–
–
3.9
USD
4.1
–
28.5
–
32.6
T
otal
67.4
0.4
28.5
3.7
100.0
Equity Participations – Regional Economic Exposure*
At 30 June 2022
Region
% of equity
participations
Europe
48.9
North America
31.2
Asia, Africa,
Other
12.7
South America
7.2
T
otal
100.0
Equity Participations – By Sector
At 30 June 2022
Sector
% of equity
participations
Industrials
40.7
Consumer Goods
39.3
Basic Materials
12.8
Oil & Gas
7.2
T
otal
100.0
*
Directors’
estimates. Regional Economic Exposure represents where in the world the underlying business activity of the equity participations
takes place.
7
POR
TFOLIO AND ASSETS
At 30 June 2022
Security
Country
Holding
Fair
V
alue
£
% of total
portfolio
Hal T
rust
Netherlands
12,769
1,349,659
8.4
British American
T
obacco
UK
27,000
950,266
5.9
T
onnellerie François Frères Group
France
32,000
870,374
5.4
Imperial Oil
Canada
20,000
774,917
4.8
Karelia T
obacco
Greece
3,450
760,199
4.7
Barrick Gold
Canada
45,000
655,562
4.1
Lucas Bols
Netherlands
75,000
652,005
4.1
Bakkafrost
Faroe Islands
12,000
630,026
3.9
Robertet
France
800
581,857
3.6
Crete Plastics
Greece
44,452
562,443
3.5
Emmi
Switzerland
700
559,855
3.5
Cembre
Italy
26,000
559,477
3.5
Nedap
Netherlands
9,000
463,247
2.9
Franco-Nevada
Canada
3,600
389,217
2.4
Alamos Gold
Canada
60,000
345,956
2.2
Bucher Industries
Switzerland
1,200
342,622
2.2
Kri-Kri Milk Industry
Greece
50,000
232,399
1.5
Strix Group
UK
80,000
133,600
0.8
T
otal equity participations
10,813,681
67.4
Other legacy holdings
V
arious
61,776
0.4
T
otal legacy holdings
61,776
0.4
Invesco Physical Gold ETC
UK
15,000
2,158,775
13.5
W
isdomTree Physical Swiss Gold ETC
Switzerland
9,000
1,288,520
8.0
W
isdomTree Physical Gold ETC
UK
8,000
1,122,491
7.0
T
otal gold
4,569,786
28.5
Cash
678,592
4.2
Other liabilities net of other assets
(75,644)
(0.5)
T
otal cash less other net curr
ent liabilities
602,948
3.7
T
otal net assets
16,048,191
100.0
STRA
TEGIC REPOR
T
continued
8
STRA
TEGIC REPOR
T
continued
PRINCIP
AL
RISKS
AND RISK MANAGEMENT
Principal Risks and Uncertainties
The management of the business and the execution of the Company’
s strategy are subject to a number of risks.
An
assessment of the principal risks to the Company has been carried out, including those that would threaten its business
model, future performance, solvency and liquidity
.
The
Covid-19
pandemic
and
the
conict
in
Ukraine
continue
to
have
an
effect
on
both
global
and
domestic
economies.
Political initiatives to mitigate the impact thereof have included a continued expansion of quantitative easing. These events
are all being closely monitored by the Board as is their potential impact on the Company
. The Board is also monitoring how
BREXIT continues to unfold.
The Group’
s principal risks are set out below
.
An explanation of how these have been mitigated or managed is also
provided, where appropriate.
The key business risks affecting the Group are:
Risk
Mitigation
Business risk
The
protability
,
market
positioning
and
outlook
for companies in which the Company is invested
may decline or fail to make expected progress.
This may be because of internal factors at the
investee company or external factors such
as competitive pressures, economic downturns or
political events.
The Company looks to invest in businesses that
can demonstrate resilient characteristics and a
shared philosophy around long term creation of
value.
Concentration
risk
28.5%
of
the
Company's
portfolio
is
invested
in
gold ETCs and a further 8.7% is invested in gold
royalty and mining businesses.
At the time of acquisition, investments in
any one company shall not exceed 15% and
investments in gold bullion shall not exceed 35%
of the Company's total assets.
Monetary risk
The widespread implications of quantitive easing
and other monetary policies, which include
mounting
inationary
pressure,
pose
a
risk
to
the
real value of the Company's assets.
The Company looks to own a portfolio of assets
that possess an enduring real value whether from
the value of the underlying assets in an investment,
or in the investee’
s ability to create an enduring
prot stream.
Operational risk
The Company is reliant on service providers
including, ISCA
Administration Services Limited
as
Administrator and Company Secretary
, and
Fiske plc as Custodian. Failure of the internal
control systems of these parties could result in
losses to the Company
.
The Board formally reviews the Company’
s
service providers on an annual basis.
9
There are other risks that are becoming more prominent but are not yet considered key risks.
Global conict
The war between Russia and Ukraine has had a signicant impact, inter alia, on ination 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.
Inationary pr
essure
Ination
has
escalated
sharply
in
the
last
12
months.
Not
all
companies
are
well-placed
to
pass
on
cost
pressures
to
their
customers. In addition, for The Investment Company
, it is expected that operating costs will rise more than dividend income.
In addition, there are other risks that may materially impact the Company
, however, the likelihood thereof is considered small.
For
eign currency risk
Under the revised investment policy the Company has increasingly invested in stocks in overseas markets dominated
in foreign currencies thus increasing the foreign currency risk.
As shown on page 6 approximately 90.4% is invested in
foreign currency stocks and other assets.
Regulatory risk
The Company operates in an evolving regulatory environment and faces a number of regulatory risks.
A
breach of sections
1
158/1159 of the Corporation
T
ax
Act 2010 would result in the Company being subject to capital gains tax on portfolio
investments. Breaches of other regulations, including the Companies
Act 2006, the UKLA
Listing Rules, the UKLA
Disclosure Guidance and T
ransparency Rules, or the
Alternative Investment Fund Managers’
Directive, could lead to a
detrimental outcome. Breaches of controls by service providers to the Company could also lead to reputational damage or
loss. The Board monitors compliance with regulations, with reports from the
Administrator
.
Discount volatility
The Company’
s shares may trade at a price which represents a discount to its underlying NA
V
.
Market price risk
The
Board
monitors
the
prices
of
nancial
instruments
held
by
the
Company
on
a
regular
basis.
In
addition,
it
is
the
Board’
s policy to hold an appropriate spread of investments in the portfolio in order to reduce risks arising from investment
decisions and investment valuations. The Board actively monitors market prices throughout the year and meets regularly
in order to review investment strategy
. Most of the equity investments held by the Company are listed on a recognised
Stock Exchange.
Liquidity risk
The Group’
s assets mainly comprise readily realisable quoted securities that can be sold to meet funding commitments if
necessary
. Short-term exibility is achieved through the use of overdraft facilities.
Cr
edit risk
The failure of a counterparty to a transaction to discharge its obligations under that transaction that could
result in the
Company suffering a loss. Normal delivery versus payment practice and a review of counterparties
and custodians by the
Board mean that this is not a signicant risk.
Inter
est rate risk
Given the changes in the portfolio resulting from the change of Investment Objective and Policy in November 2020 this
is not considered a signicant risk.
STRA
TEGIC REPOR
T
continued
10
Section 172(i) Statement
Section 172(i) of the Companies
Act 2006, requires Directors to take into consideration the interests of stakeholders in
their decision making.
The Directors continue to
have regard to the interests
of, and the
impact of the rm’
s activities on,
the
various
stakeholders
in
the
rm
and
to
consider
what
is
most
likely
to
promote
the
success
of
the
Company
for
its
members in the long term.
Whilst the importance of giving due consideration to our stakeholders is not new
, S172 requires that the Board elaborates
how it discharges its duties in this respect.
W
e have categorised our key stakeholders into two groups. Where appropriate,
each group is considered to include both current and potential stakeholders:
•
Shareholders
•
Administrator and other service providers
Shar
eholders
Our Shareholders are of course the owners of the Company and we need to act fairly as between members of the Company
.
In the prior year
, the Company underwent considerable change. One of these – the change of dividend policy – led to some
changes to the Shareholder base. These changes were undertaken with the active support of Shareholders as being in the
best interests of the Company as a whole.
W
e have a regular dialogue with our key Shareholders – but all are welcome to be in communication.
All Shareholders
are encouraged to attend our
Annual General Meeting.
Administrator and other service pr
oviders
The Board seeks to maintain constructive liaison with its service providers so as to optimise the way in which the
Company’
s needs are met.
Following their appointment in January 2021, ISCA
Administration Services acted as Company Secretary and
Administrator during the year and worked with the Directors to ensure the Company continued to operate normally
throughout the restrictions imposed by Covid.
In January 2022, the Company negotiated a new contract with Equiniti to continue to provide Registrar services to the
Company
.
The Strategic Report has been approved by the Board of Directors.
On behalf of the Board
I. R. Dighé
Chairman
22 September 2022
STRA
TEGIC REPOR
T
continued
11
DIRECTORS’
REPOR
T
The Directors present their report and audited nancial statements for the year ended 30 June 2022.
The Company
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 1
158 and 1
159 of the
Corporation T
ax
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 30 June 2022 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 prots
made from
the sale of its investments and all other net capital gains.
As an investment company
, managed and marketed in the UK, the Company is an
Alternative Investment Fund (“AIF”)
under the provisions of the
Alternative Investment Fund Manager
’
s Directive (“AIFMD”). The Company was registered
by the FCA
as a Small Registered UK
Alternative Investment Fund Manager (“AIFM”) with effect from 29 March 2018.
The Company owns
Abport Limited, an investment dealing company
, and New Centurion T
rust Limited, an inactive
investment company (the “Subsidiaries”). The Company and its wholly owned Subsidiaries together comprise a group
(the “Group”).
Investment Policy
The Company’
s Investment Policy is set out on page 2.
Performance
Details of
the Company’
s performance
during
the nancial
year are
provided in
the
Chairman’
s Statement
on pages
4 and
5 and the nancial statements on pages 35 to 56.
Key Performance Indicators (“KPIs”)
The Board reviews performance by reference to a number of KPIs and considers that the most relevant KPIs are those
that
communicate
the
nancial
performance
and
strength
of
the
Group
as
a
whole.
The
Board
monitors
the
following
KPIs:
NA
V performance:
The NA
V per ordinary share at 30 June 2022 was 336.30p per share (2021: 341.19p). The total
return of the NA
V was (1.43)%.
(Discount)/premium of share price in relation to NA
V
:
Over the year to 30 June 2022, the Company’
s share price
moved from trading at a discount of 9.43% to a discount of 12.58%.
Ongoing Charges Ratio:
The Ongoing Charges Ratio for the year to 30 June 2022 amounted to 2.17% (2021: 2.24%).
Going Concern
In accordance with the Financial Reporting Council’
s guidance on going concern, including its Covid-19 guidance, the
Directors have undertaken a review of the Company’
s ability to continue as a going concern.
12
The Directors believe that the Company is well placed to manage its business risks and that the assets of the Group consist
mainly of securities which are readily realisable. The Directors are of the opinion that the Group has adequate resources to
continue in operational existence for the foreseeable future and that it is therefore appropriate to adopt the going concern
basis
in preparing
the
nancial
statements. In
arriving
at this
conclusion,
the
Directors have
considered
the liquidity
of
the
portfolio and reviewed
cash ow
forecasts showing
the ability
of the
Company to
meet obligations
as they
fall due
for a
period of at least 12 months from the date that these nancial statements were approved.
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
, specically
being interested
in
feedback
from meetings
and
conversations with
Shareholders.
In
addition
to
considering
the
principal
risks
on
pages
8
and
9
and
the
nancial
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.
V
iability Statement
Over
the
Company’
s
life
it
has
experienced
a
number
of
signicant
social
and
economic
events
impacting
world
history
.
The
recent
Covid
pandemic
and
the
conict
in
Ukraine
are
the
latest
events
impacting
not
just
this
Company
but all commercial entities. The change in Investment Policy and the decision as supported by Shareholders during the
previous year to become self-managed by the Board demonstrates the viability of the Company as a vehicle for delivering
investment performance
to Shareholders.
The Board's
analysis is based
on the performance
and progress
of the Company
and its investment portfolio, an assessment of current and future risks, the appropriateness of the investment strategy and
review
of
the nancial
position of
the Company
,
and
operating expenses
over the
next two
years. In
addition,
consultation
with key Shareholders as to their perspectives is a key consideration.
The Directors also consider viability in the context of the Company being a going concern and it being appropriate that
the accounts are prepared on such a basis. This is elaborated in Note 1 to the nancial statements.
Future Pr
ospects
The future of the Company is dependent upon the success of the investment strategy
. The outlook for the Company is
discussed in the Chairman’
s Statement on pages 4 and 5.
Board Diversity
When recruiting a new Director
, the Board’
s policy is to appoint individuals on merit matched against the skill requirements
identied
by
the
Board. The
Board
believes
diversity
is
important
in
bringing
an
appropriate range
of skills,
knowledge
and experience to the Board and gives that consideration when recruiting new Directors and has also noted the Parker
Report on increasing the
diversity on boards of
public companies.
As
at 30 June 2022,
there were ve
male Directors on
the
Board. As
discussed
in
the
Chairman's
Statement
on
page
5,
T
om
Cleverly
does
not
wish
to
seek
re-election
at
the
forthcoming
AGM. There are no current plans to appoint a replacement.
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 Company does not have any employees other than Directors 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.
DIRECTORS’
REPOR
T
continued
13
DIRECTORS’
REPOR
T
continued
Environmental, Human Rights, Employee, Social and Community Issues
The Board consists entirely of Non-Executive Directors and during the year the Company had no employees. 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.
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
trafcking statement under the Modern Slavery
Act 2015.
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.
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 and Group considers itself
to be a low energy user under the Streamlined Ener
gy & Carbon Reporting regulations and therefore is not required to
disclose energy and carbon information.
Directors
Ian Dighé
(Chairman)
was
appointed
to
the
Board
on
6
July
2018.
He
has
signicant
listed
company
experience,
particularly in the investment banking, corporate broking, asset management and closed end funds sectors. He was a co-
founder of Bridgewell Group plc and was Chairman of Miton Group plc from February 201
1, overseeing the successful
renancing
and
subsequent
growth
of
the
group.
He
retired
from
the
Miton
board
in
December
2017.
He
is
an
Independent
Director of Edelweiss Holdings plc, and a director of a number of private companies, and charities.
T
om Cleverly
was appointed to the Board on 4 November 2020. He spent the 10 years to 201
1 in the audit profession. He
is CFO, treasurer and a member of the executive committee of Edelweiss Holdings plc, where he also served on the board
between November 201
1 and September 2015 and again since November 2020. Mr Cleverly is a Fellow Member of the
Institute of Chartered
Accountants in England and W
ales.
T
im Metcalfe
was
appointed
to
the
Board
on
6
July
2018.
He
is
an
experienced
corporate
nancier
,
having
spent
over
20 years working at Robert Fleming & Co., N M Rothschild, W
esthouse Securities, and Northland Capital Partners and
was
Joint CEO
of
Zeus Capital,
prior
to being
the co-founder
,
in 2015,
of
IFC
Advisory
,
an investor
relations
and nancial
PR adviser to small and mid-cap companies.
Martin Perrin
(Audit Committee Chairman) was appointed to the Board in June 2013. He is a non-executive director
of Fiske plc. He is a Chartered
Accountant and Chartered Fellow of the Securities Institute and has wide international
experience of operations and nance in both regulated nancial services rms and in technology companies in industry
.
Michael W
eeks
was appointed to the Board on 4 November 2020. He is a member of the executive committee of Edelweiss
Holdings plc, where he has been part of the investment team since 201
1. He is a CF
A
charterholder and holds degrees in
chemical engineering and philosophy
.
Details of the interests of the Directors in the share capital of the Company are set out in the Directors’
Remuneration
Report on page 26.
14
In accordance with the policy adopted by the Board, all Directors, with the exception of T
om Cleverly
, will stand for re-
election at the forthcoming
AGM. Further details of the independence of the Board and Board tenure is provided in the
Corporate Governance Statement.
The Board has considered the position of the Directors as part of the evaluation process and believes that it would be in
the Company’
s best interests for each of them to be proposed for re-election at the forthcoming
AGM, given their material
level of contribution and commitment to the role.
As a non-executive Director of Fiske plc, Mr
. Perrin is deemed to be interested in the Company’
s past management
agreement and current custody agreement. There were no other contracts subsisting during the year under review or up to
the date of this report in which
a Director of the Company is or
was materially interested and which is
or was signicant
in relation to the Company’
s business.
Directors’
and Ofcers’
Liability Insurance
Directors’
and Ofcers’
liability insurance
cover
was
in
place
throughout
the
nancial 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
indemnied
out
of
the
assets
of
the
Company
in
respect
of
liabilities
they
may
sustain
or
incur
in
connection
with
their
appointment.
Conicts of Interest
The Companies
Act 2006 provides that a director must avoid a situation where they could have, a direct or indirect interest
that conicts, or
could perceivably conict with
the Company’
s
interests. The Company’
s
Articles of
Association permit
the Board
to
consider
and,
if
appropriate,
to
authorise
situations
where
a
Director
has
an
interest
that
conicts,
or
might
possibly
conict, with
the
Company
. The
Board
has
a
formal
system
in
place
at
each
board
meeting
for
the
Directors
to
declare situations for authorisation by those Directors not involved in the situation.
Any situations considered and any
authorisations subsequently given are
appropriately recorded.
Any
Director who is
considered conicted might
be asked
to
leave
the
meeting
or
remain
but
not
participate
in
the
discussion
and
abstain
from
voting
or
inuencing
a
decision
or
course of action.
All Directors acknowledge that any decision they take as a Directors of the Company must be taken to
promote the success of the Company
.
The Board believes that the system it has in place for reporting, considering and recording situations where a Director has
an
interest
that
conicts
such
as
Mr
.
Perrin’
s
appointment
as
discussed
on
page
18,
or
might
possibly
conict,
with
the
Company operated effectively during the year under review
.
Capital Structure
As at 30 June 2022, and the date of this
Annual Report, the Company’
s share capital consists of 4,772,049 ordinary shares
of 50p each.
In
addition,
there
are
1,717,565
xed
rate
preference
shares
of
50p
in
issue,
all
of
which
are
held
by
New
Centurion
T
rust
Limited
a
wholly
owned
subsidiary
of
the
Company
.
The
xed
rate
preference
shares
are
non-voting,
are
entitled
to receive a cumulative dividend of 0.01p per share per annum, and are entitled to receive their nominal value, 50p, on a
distribution of assets or winding up. Preference shares are disclosed as equity in accordance with IAS 32.
At any general meeting of the Company
, holders of ordinary shares are entitled to one vote on a show of hands and on a
poll, to one vote for every share held. During the year under review the Company did not repurchase any ordinary shares
in the market, issue any ordinary shares or sell ordinary shares from treasury
. The Company holds no shares in treasury
as at 30 June 2022. The current authorities to buy
back shares and to issue new ordinary shares or sell ordinary shares
from treasury for cash will expire at the conclusion of the 2022
AGM. The Directors are proposing that these authorities
be renewed at the
AGM.
DIRECTORS’
REPOR
T
continued
15
DIRECTORS’
REPOR
T
continued
Substantial Shareholdings
As at 30 June 2022, the Company had been notied of the following notiable interests in its voting rights:
Number of
ordinary shares
% of
voting rights
Edelweiss Holdings Plc
1,246,909
26.13
Philip J. Milton & Company plc
395,274
8.28
Mr C.P
. Kirkley
291,443
6.1
1
Mr C.A. Kirkley
291,443
6.1
1
Aboyne-Clyde Rubber Estates of Ceylon Ltd
203,800
4.27
Investec W
ealth & Investment Limited
201,322
4.22
Subsequent to the year end, on 3
August 2022, the Company was informed that Philip J. Milton & Company plc had a
notiable interest in 432,086 shares (9.05%).
Controlling Party
The Director
’
s consider that there is no controlling party
.
Change of Control
The Directors are not aware of any agreements between Shareholders that may result in restrictions on the transfer of
securities or voting rights. The Directors are not aware of any other restrictions on the transfer of shares in the Company
other than certain restrictions that may from time to time be imposed by laws and regulations. There are no agreements to
which the Company is party that might affect its control following a successful takeover bid.
Requirements of the FCA
Listing Rules
FCA
Listing
Rule 9.8.4 requires
the Company
to include certain
information in a
single identiable
section of the
Annual
Report
or
a
cross-reference
table
indicating
where
the
information
is
set
out.
The
Directors
conrm
that
the
only
disclosure
required in relation to FCA
Listing Rule 9.8.4, is that as a Non-Executive Director of Fiske, Mr Perrin is deemed to have
an interest in the Company’
s Custody
Agreement. There were no other contracts subsisting during the year to which the
Company was a party and in which a Director of the Company is or was materially interested; or between the Company
and a controlling shareholder
.
Articles
of Association
Under section 21 of the Companies
Act 2006 the Company’
s
Articles of
Association can only be amended by special
resolution at a general meeting of the Shareholders.
Annual General Meeting
The Company’
s
AGM will be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS on 28 October
2022 at 1
1.00 am. The Notice of Meeting is set out on pages 58 to 62.
Shareholders ar
e encouraged to submit their proxy votes ahead of the meeting to ensur
e that their votes count
towards deciding each resolution.
Appointing the Chair of the meeting rather than a named person will ensur
e
that the vote will count.
The business of this year
’
s
AGM consists of 12 resolutions. Resolutions 1 to 8 are the normal resolutions concerning the
approval of the Report and
Accounts and the re-election of Directors and are self-explanatory
.
16
Authority to allot shares
Resolutions 9 and 10: Authority to issue shar
es and disapplication of pr
e-emption rights
The Board wishes to have the authority to issue ordinary shares and may only allot shares for cash if authorised to do so
by Shareholders in general meeting.
Accordingly
, an ordinary resolution to authorise the Directors to allot ordinary shares up to an aggregate nominal amount
of £477,204 equal to 20% of the Company’
s issued ordinary share capital at the date of this Notice, will be proposed as
Resolution 9.
In addition, Resolution 10 is being proposed as a special resolution to authorise the Directors to disapply the pre-emption
rights of existing Shareholders in relation to the issue of ordinary shares under Resolution 9 and to sell ordinary shares
from treasury up to a maximum nominal amount of £477,204 equal to 20% of the Company’
s issued share capital as at
the date of the Notice of
AGM.
The Directors intend to issue ordinary shares, subject to any applicable regulatory requirements, when it is in the best
interests of Shareholders to do so.
These authorities, if approved, will expire at the
Annual General Meeting of the Company to be held in 2023.
Purchase of Own Shar
es
Resolution 1
1: Authority to pur
chase shar
es
Resolution 1
1, a special resolution, will renew the Company’
s authority to make market purchases of up to 14.99% of its
ordinary shares, either for cancellation or placing into treasury at the determination of the Directors. Purchases of ordinary
shares will be made within guidelines established from time to time by the Board.
Any purchase of ordinary shares would
be made only out of the available cash resources of the Company
.
The
Directors
would
use
this
authority
to
address
any
signicant
imbalance
between
the
supply
and
demand
for
the
Company’
s ordinary shares and to manage the discount to NA
V at which the ordinary shares trade. Ordinary shares will
be repurchased only at prices below the NA
V per ordinary share, which should have the effect of increasing the NA
V per
ordinary share for remaining Shareholders. This authority will expire at the
AGM to be held in 2023 when a resolution to
renew the authority will be proposed.
Notice Period for General Meetings
Resolution 12: Authority for a 14 day notice period
Resolution 12, a special resolution, will give the Directors the ability to convene general meetings, other than annual
general meetings, on a minimum of 14 clear days’
notice. The minimum notice period for annual general meetings
will remain at 21 clear days. The approval will be ef
fective until the Company’
s
AGM to be held in 2023, at which it is
intended renewal will be sought. The Directors will only call a general meeting on 14 days’
notice where they consider it
to be in the interests of Shareholders to do so and the relevant matter is required to be dealt with expediently
.
Continuation
The Company’
s
Articles provide that an ordinary resolution be put to Shareholders at the
Annual General Meeting,
proposing that the Company continues in existence as a closed-ended investment company
, every 5 years, the next
occasion to be in 2025.
DIRECTORS’
REPOR
T
continued
17
Recommendation
The Directors consider that all the resolutions to be proposed at the
AGM are likely to promote the success of the Company
and are in the best interests of the Company and its Shareholders as a whole. The Directors unanimously recommend that
Shareholders vote in favour of each resolution, as they intend to do in respect of their own benecial holdings.
Post balance sheet events
There were no post balance sheet events requiring disclosure.
Reappointment
of Auditors
PKF Littlejohn LLP
, the independent external
Auditor of the Company
, were appointed in 2018. Resolutions to reappoint
PKF Littlejohn LLP
as the Company’
s
Auditor, and to authorise the
Audit Committee to determine their remuneration will
be proposed at the forthcoming
AGM.
Auditor Information
In
accordance with
the
requirement
and
denitions
under
section
418
of
the
Companies Act 2006,
each
of
the
Directors
at the date of approval of this report conrms that:
•
so far as they are each aware, there is no relevant audit information of which the Company’
s
Auditor is unaware;
and
•
each Director has taken all the steps that he ought to have taken as a Director to make himself aware of any
relevant audit information and to establish that the Company’
s
Auditor is aware of that information.
The Directors’
Report was approved by the Board on 22 September 2022.
On behalf of the Board
I. R. Dighé
Chairman
22 September 2022
DIRECTORS’
REPOR
T
continued
18
The Corporate Governance Statement forms part of the Directors’
Report.
Statement of Compliance
The
Directors have
adopted the
AIC
Code
published in
February 2019
for
the
nancial year
ended 30
June
2022.
The
AIC
Code addresses the principles and provisions set out in the UK Corporate Governance Code (“the UK Code”) as well as
setting out additional principles and recommendations on issues that are of specic relevance to the Company
.
The Board considers that reporting against the principles and recommendations of the
AIC Code, and by reference to the
AIC Guide as outlined above, will provide the most appropriate information to Shareholders.
The AIC
Code
was
endorsed
in
February
2019
by
the
Financial
Reporting
Council
(“FRC”)
which
has
conrmed
that
in complying with the
AIC Code, the Company will meet its obligations in relation to the UK Code. The
AIC Code is
available online at: www
.theaic.co.uk.
A
copy of the UK Code can be found at: www
.frc.org.uk.
This statement has been compiled in accordance with the FCA
’
s Disclosure and T
ransparency Rule (“DTR”) 7.2 on
Corporate Governance Statements.
The Board considers that the Company has complied fully with the
AIC Code and the relevant provisions of the UK Code,
except as set out below
.
Although self-managed, the Company does not employ a chief executive, nor any executive Directors. The systems
and procedures of the
Administrator and other service providers, and the annual statutory audit as well as the size of the
Company’
s
operations,
gives
the
Board
condence
that
an
internal
audit
function
is
not
appropriate.
The
Company
is
therefore not reporting further in respect of these areas.
The Board has further considered the principles of the UK Code and believes that the Company has complied with the
provisions thereof for the year under review
, except as outlined above.
The Board of Directors
The Board consists
of ve non-executive
Directors all of
whom, with the
exception of Mr
Perrin, who is
a non-executive
Director of Fiske plc, are considered to be independent by the Board. Fiske plc were until 4 November 2020 the investment
manager and remain as the Company's custodian.
Messrs Dighé, Cleverly and W
eeks hold directorships or positions of senior management within Edelweiss Holdings plc
(“Edelweiss”), who became
a signicant
shareholder in
the Company in
the previous
year
. Notwithstanding
these cross-
directorships and links with Edelweiss, the Board considers Messrs Dighé, Cleverly and W
eeks to be independent
Directors as they do not represent Edelweiss through their chairmanship and directorships of the Company
. Furthermore,
their appointments to the Board occurred prior to Edelweiss becoming a signicant Shareholder
.
The Board is responsible for all matters of direction and control of the Group, including its investment policy
, strategy
and delivery
. The Directors review at regular meetings the Group’
s investments and all other important issues to ensure
that control is maintained over the Group’
s affairs.
The Chairman,
Mr I.
R. Dighé,
is considered
to
be
independent
and
has
no
conicting
relationships.
He considers
himself
to have sufcient time to commit to the Company’
s affairs.
The
AIC Code recommends that the Board should appoint one of its independent non- executive directors to be the Senior
Independent Director
. Mr Metcalfe is the Company’
s Senior Independent Director
.
The Board has formalised the arrangements under which Directors, in the furtherance of their duties, may take independent
professional advice.
DIRECTORS’
REPOR
T
continued
19
DIRECTORS’
REPOR
T
continued
The Directors each have a service contract, copies of which are available on request from the Secretary
. Mr
. Perrin is
approaching his eleventh year as Chairman of the
Audit Committee, his independence is reviewed on an annual basis and
the Board is committed to reviewing his continuing appointment at an appropriate time.
The
appointment
of
a
new
Director
would
be
on
the
basis
of
a
candidate’
s
merits
and
the
skills/experience
identied
by
the Board as being desirable to complement those of the existing Directors. The Company’
s diversity policy
, is set out on
page 12, but diversity is one of the factors that would be taken into account when making a new appointment.
Board Operation
The Directors meet at regular Board meetings usually once a quarter
, with additional meetings arranged as necessary
.
During the year ended 30 June 2022, the number of formal Board and Committee meetings attended by each Director who
served during the year was as follows:
Board
Meetings
Audit Committee
Meetings
Investment Committee
Meetings
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Ian Dighé
5
5
2
2
3
3
T
om Cleverly
5
5
2
2
3
3
T
im Metcalfe
5
5
2
2
–
–
Martin Perrin
5
5
2
2
–
–
Michael W
eeks
5
5
2
2
3
3
Performance Evaluation
An annual evaluation for the year ended 30 June 2022 has been carried out. This took the form of a formal questionnaire
by the Directors as to the effectiveness of the Board, the chairmanship and its Committees and how the Company can
better serve Shareholders.
There
were no
signicant
actions
arising from
the
evaluation
process and
it
was agreed
that
the
current composition
of
the
Board and its Committees was appropriate and that the Board and its Committees were functioning effectively
.
T
enure
In
terms
of
overall
length
of
tenure,
the
AIC
Code
does
not
make
specic
restrictions
on
tenure
for
Directors.
Some
market
commentators
have
expressed
opinions
that
considerable
length
of
service
(which
has
generally
been
dened
as
a limit of 9 years) may lead to the compromise of a Director
’
s independence. The Board does not believe that a Director
should
be
appointed
for
a
nite
period.
The
AIC
Code
does
recommend
that
it
should
have
a
policy
on
tenure
of
its
Chairman. The Board has noted that there is no requirement under the
AIC Code for its Chairman to stand down after
nine years however
, it has adopted a nine-year maximum tenure policy for its Chairman.
Re-election of Directors
W
ith the exception of T
om Cleverly
, who has advised the Board that he does not wish to seek re-election, all Directors
shall seek annual re-election by the Shareholders at the Company’
s
Annual General Meeting (“AGM”).
The Board undertook an evaluation of the Company’
s operations in 2020 and proposed that the Company change from
being managed by an investment manager to being self-managed. These proposals were approved by Shareholders at the
General Meeting in November 2020. Following a full evaluation of the structure of the Board as part of the change, and
as proposed in the Circular
, T
om Cleverly and Michael W
eeks were subsequently appointed to the Board.
20
DIRECTORS’
REPOR
T
continued
The Chairman and the Senior independent Director have subsequently undertaken a review and assessment of the
effectiveness
of
the
revised
structure
in
delivering
the
new
Investment
Policy
and
meeting
the
Board's
obligations
to
Shareholders. This review undertaken through meetings and discussion with each individual Director has concluded that
each
Director
,
and
the
Board
and
its
Committees,
are
working
well
and
no
weaknesses
have
been
identied
requiring
a
revision to the Board. The Board has considered the re-election
of each individual Director and recommends their re-
election on the basis of their skills, knowledge and continued contribution.
Board Responsibilities
The Board is responsible for the determination and implementation of the Company’
s investment policy and strategy and
has overall responsibility for the Company’
s activities. The Board’
s main roles are to create value for Shareholders, to
provide leadership to the Company and to approve the Company’
s strategic objectives. The Board has adopted a schedule
of
matters reserved
for its
decision
and specic
responsibilities
that includes:
reviewing the
Company’
s
investments, asset
allocation, gearing policy
, cash management, investment outlook and revenue forecasts.
The
Company's
day-to-day
administrative
functions
have
been
subcontracted
to
a
number
of
service
providers,
each
engaged under separate legal agreements.
At each Board meeting the Directors follow a formal agenda, which is circulated in advance by the Company Secretary
.
The
Company
Secretary
and
Administrator
regularly
provide
nancial
information,
together
with
brieng
notes
and
papers
in
relation
to
changes
in
the
Company’
s
economic
and
nancial
environment,
statutory
and
regulatory
changes
and corporate governance best practice.
Committees of the Board
The
Company
has
appointed
an
Audit
Committee
to
monitor
specic
operations,
further
details
are
provided
in
the
Audit Committee Report on pages 22 and 23. Given the size of the Board, it is not felt appropriate to have a separate
Management Engagement, Nomination or Remuneration Committee. The functions that would be normally carried out
by these Committees are dealt with by the full Board.
The
Audit Committee is comprised of all of the Directors of the Company and is chaired by Mr Perrin. Given the size of
the Board, it is deemed proportionate and practical for all Directors to sit on the
Audit Committee. Mr Perrin FCA, is a
chartered
accountant
with
a
wide
experience
of
operations
and
nance
in
industry
.
The
Board
is
satised
that
Mr
Perrin
has
recent and relevant nancial experience in the sector the Company operates to guide the Committee in its deliberations.
Investment Committee
The Company set up an Investment Committee following Shareholder approval in November 2020 that investment
decisions would be made by the Board rather than employing an Investment Manager
. Membership of the Investment
Committee currently comprises the Chairman, T
om Cleverly (until the
AGM on 28 October 2022) and Michael W
eeks.
Internal Control Review
The Directors are responsible for the Group’
s risk management and systems of internal control, for the reliability of the
nancial reporting process and for reviewing their effectiveness.
Throughout the year under review and up to the date of this
Annual Report, there has been an ongoing process for
identifying, evaluating and managing the principal risks faced by the Group, which accords with guidance supplied by the
FRC
on risk
management,
internal control
and
related nancial
and
business reporting.
This
is
reviewed on
a regular
basis
by the Board. The internal control systems are designed to ensure that proper accounting records are maintained, that the
nancial
information
on
which
business
decisions
are
made
and
which
are
issued
for
publication
is
reliable
and
that
the
assets of the Group are safeguarded. The risk management process and Group systems of internal control are designed
to manage rather than eliminate the risk of failure to achieve the Group’
s objectives. It should be recognised that such
systems can only provide reasonable, not absolute, assurance against material misstatement or loss.
21
DIRECTORS’
REPOR
T
continued
The Directors have carried out a review of the effectiveness of the systems of internal control as they
have operated during
the year and up to the date of approval of the
Annual Report and Financial Statements. The internal control systems in
place are considered to be effective as there were no matters arising from this review that required further investigation
and no signicant failings or weaknesses were identied.
Risk assessment and a review of internal controls is undertaken regularly in the context of the Company’
s overall
investment
objective.
The
Board,
through
the
Audit
Committee,
has
identied
risk
management
controls in
four
key areas:
corporate strategy; published information and compliance with laws and regulations; relationships with service providers;
and investment and business activities. In arriving at its judgement, the Board has considered the Company’
s operations
in 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 reality;
•
the Company’
s ability to reduce the incidence and impact of risk on its performance; and
•
the cost to the Company and benets related to the Company and third parties operating the relevant controls.
Most functions for the day-to-day management of the Company are sub-contracted to third party service providers, and the
Directors therefore obtain regular assurances and information from these suppliers regarding their internal systems and controls.
Internal Audit
As the Company’
s investment management is carried out by the Board and the administration and custodial activities are
carried out by third party service providers the Board does not consider it necessary to have an internal audit function.
The
Board reviews nancial information produced by the
Administrator on a regular basis.
Relations with Shareholders
Communication with Shareholders is given a high priority by the Board.
All Shareholders are encouraged to vote at the
AGM.
Shareholders that wish to communicate directly with the Board or to lodge a question in advance of the
AGM should contact
the Company Secretary at the address on page 1 or contact the Board via email to
info@theinvestmentcompanyplc.co.uk.
The
Annual and Half-Y
early Reports of the Company are prepared by the Board to present a full, fair
, balanced and
understandable review of the Company’
s performance, business model and strategy
. Copies of these are released to
the London Stock Exchange. The
Annual Report is dispatched to Shareholders by mail and is also available from the
Secretary or at https://theinvestmentcompanyplc.co.uk.
The Board maintains regular dialogue with representatives of the Company’
s largest Shareholders throughout the year
.
The Board is mindful of feedback received from Shareholders.
Disclosure Guidance and
T
ransparency Rules (“DGTR”)
Other information required to be disclosed pursuant to the DGTR has been placed in the Directors’
Report because it is
information which refers to events that have taken place during the course of the year
.
On behalf of the Board
I. R. Dighé
Chairman
22 September 2022
22
Role of the
Audit Committee
The primary responsibilities of the
Audit Committee (the “Committee”) are:
•
to
monitor
the
integrity
of
the
nancial
statements
of
the
Group,
and
review
the
nancial
reporting
process
and
the accounting policies of the Group;
•
to present a fair balance and understandable assessment of the Group’
s
Annual Report and Financial Statements;
•
to keep under review the effectiveness of the Group’
s internal control environment and risk management systems;
•
to review annually the need for the Group to have its own internal audit function;
•
to make recommendations to the Board in relation to the re-appointment or removal of the external
Auditor and
to approve its remuneration and terms of engagement;
•
to review the effectiveness of the audit process;
•
to develop and implement a policy on the supply of non-audit services by the
Auditor; and
•
to review and monitor the
Auditor
’
s independence and objectivity
.
Matters considered in the year
The Committee met twice during the
nancial year to consider the nancial
statements and to review the
internal control
systems.
The
Audit Committee has:
•
reviewed the need for the Group to have its own internal audit function;
•
reviewed the internal controls and risk management systems of the Company and those of its third party service
providers;
•
reviewed and, where appropriate, updated the Company’
s risk register;
•
agreed the audit plan with the
Auditor
, including the principal areas of focus;
•
received and discussed with the
Auditor its report on the results of the audit; and
•
reviewed the Group’
s nancial statements.
The
principal
issues
identied
by
the
Committee
were
the
valuation
and
ownership
of
the
investment
portfolio,
in
particular the unquoted holdings and revenue recognition. The Board relies on the
Administrator to use correct listed
prices and seeks comfort in the testing of this process through the internal control statements. This was discussed with the
Administrator and
Auditor at the conclusion of the audit of the nancial statements.
The
Committee
assesses
annually
whether
it
is
appropriate
to
prepare
the
Company’
s
nancial
statements
on
a
going
concern basis. The Board’
s conclusions are set out in Note 1 of the nancial statements.
The Committee considers the internal control system of the Company and its third party service providers. There were no
signicant matters
of
concern
identied
in
the
Committee’
s
review
of
the internal
controls
of
the
Company
and
its
third
party service providers.
Following consideration of the above, and its detailed review
, the Committee was of the opinion that the
Annual Report
and Financial Statements, taken as a whole, are fair
, balanced and understandable and provide the information necessary
to assess the Group’
s position and performance, business model and strategy and advised the Board accordingly
.
AUDIT COMMITTEE REPOR
T
23
Auditor
The
Audit Committee will, in accordance with the terms of reference of the Committee, continue to consider the need to
put the audit out to tender
, the
Auditor
’
s performance, its fees and independence, along with matters raised during each
audit.
Audit Fees
An audit fee of £38,900 has been agreed in respect of the audit for the year ended 30 June 2022. Of this amount, £32,300
relates to the
Audit of the Company and £3,300 to each of the subsidiary companies.
Audit services
The Committee reviews the need for non-audit services and authorises such on a case by case basis, having consideration
to the cost-effectiveness of the services and the independence and objectivity
of the
Auditor
. No non-audit services were
provided to the Group in the year under review
.
Appointment of the
Auditor
The Committee conducted a review of PKF Littlejohn LLP’
s independence and audit process effectiveness as part of
its
review
of
the
nancial
reporting
for
the
year
ended
30
June
2022.
In
considering
the
effectiveness,
the
Committee
reviewed
the
audit
plan
in
July
2022,
discussing
the
materiality
level
and
identication
of
key
nancial
reporting
risks.
The Committee also considered the execution of the audit against the plan, as well as the auditor’
s reporting to the
Committee
in
respect
of
the
nancial
statements.
Based
on
this,
the
Committee
were
satised
that
the
quality
of
the
external audit process had been good with appropriate focus and challenge on the key audit risks.
The Committee advises the Board on the appointment of the external auditor and determines the
Auditors’
remuneration.
It keeps under review the cost effectiveness and also the independence and objectivity of the external auditor
. The
Committee was satised that the objectivity and independence of the auditor was not impaired during the year
.
This is the fourth year in which PKF Littlejohn LLP
has conducted the audit.
As a Public Interest Entity listed on the
London Stock Exchange the Company is subject to mandatory auditor rotation requirements. The Company will be
required to put the external audit out to tender at least every ten years and change the
Auditor at least every twenty years.
Under the legislation the Company will be required to put the audit out to tender
, at the latest, following the 2028 year
end. The auditor is required to rotate partners every ve years.
The current audit partner for the Company
, Ian Cowan, is in his fourth year in this role.
M. H. W
. Perrin (FCA)
Chairman, Audit
Committee
22 September 2022
AUDIT COMMITTEE REPOR
T
continued
24
DIRECTORS’
REMUNERA
TION REPOR
T
The Board has prepared this report in accordance with the requirements of the Lar
ge and Medium Sized Companies
and Groups (Accounts and Reports) (Amendment) Regulations 2013.
An ordinary resolution for the approval of the
Remuneration Report will be put to Shareholders at the forthcoming
AGM. 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 the Independent
Auditor
’
s Report on pages 28 to 34.
Annual Statement from the Chairman
I am pleased to present the Directors’
Remuneration Report for the year ended 30 June 2022.
Given the size of the Board, it is not considered appropriate for the Company to have a separate Remuneration Committee
and the functions of this Committee are carried out by the Board as a whole. Each Director of the Company takes no part
in discussions concerning their own remuneration.
Remuneration Policy
The
Board’
s
policy
is
that
the
remuneration
of
non-executive
Directors
should
reect
the
experience
of
the
Board
as
a
whole, and is determined with reference to comparable nancial organisations and appointments.
The Directors’
fees are determined within the limits set out in the Company’
s
Articles of
Association, not to exceed
a maximum aggregate amount of £250,000 per annum. In addition, Directors may be paid extra remuneration for the
performance of service which in the opinion of the Director is beyond the ordinary and usual duties of a Director
. Under
the Company’
s
Articles of
Association, if any Director performs or agrees to perform services (including services as
a member of any committee(s)) which in the opinion of the Directors are beyond the ordinary and usual duties of a
Director
, the Director may (unless otherwise expressly resolved by the Company in general meeting) be paid such extra
remuneration by way of salary or otherwise, as the Directors may determine, which shall be charged as part of the
Company’
s ordinary working expenses. However
, as the Directors do not receive performance related pay
, any additional
remuneration would not be based on a percentage of prots.
Directors
have not
been
paid
bonuses,
pension benets,
share
options, long-term
incentive schemes
or
other performance-
related
benets
or
compensation
for
loss
of
ofce.
Director
’
s
fees
will
be
reviewed
in
the
future,
within
the
context
of
growing the assets of the Company
, and will be subject to Shareholder approval.
Fees for any new Director appointed will be on the above basis.
Any views expressed by Shareholders on the fees being
paid to Directors would be taken into consideration by the Board.
The terms of appointment provide that Directors shall retire and be subject to annual re-election at each
Annual General
Meeting of the Company in accordance with the
Articles of
Association of the Company
. Compensation will not be paid
upon early termination of appointment.
Shareholder
views of remuneration policy
The formal views of unconnected Shareholders have not been sought in the preparation of this policy
.
Employees
The
Company
does
not
have
any
employees
and,
therefore
no
Chief
Executive
Ofcer
.
Accordingly
,
the
disclosures
required under paragraphs 18(2), 19, 38 and 39 of Schedule 8 of the Large and Medium sized Companies and Groups
(Accounts and Reports) Regulations 2008 are not required.
25
DIRECTORS’
REMUNERA
TION REPOR
T
continued
Directors’
Emoluments for the
Y
ear
The Directors who served in the year received the following total emoluments:
Y
ear ended 30 June 2022
Y
ear ended 30 June 2021
Fees
£
T
otal
£
Fees
£
T
otal
£
Ian Dighé
20,000
20,000
20,000
20,000
T
om Cleverly*
20,000
20,000
13,146
13,146
T
im Metcalfe
20,000
20,000
20,000
20,000
Martin Perrin
20,000
20,000
20,000
20,000
Michael W
eeks*
20,000
20,000
13,146
13,146
100,000
100,000
86,292
86,292
*
appointed 4 November 2020.
Company Performance
The
Company
does
not
have
a
specic
benchmark
against
which
performance
is
measured.
The
graph
below
compares
the total return (assuming all dividends are reinvested) to holders of ordinary shares compared to the total shareholder
return of the MSCI W
orld Index.
The Company has had several different investment objectives and policies which makes any long-term comparison to
an
index
difcult,
however,
the
MSCI
W
orld
Index
is
the
closest
broad
index
against
which
to
measure
the
Company’
s
recent performance.
Sha
re
holder
re
turn (pence)
re
based to 100
31 March
2012
31 March
2010
30 June
2013*
30 June
2020
30 June
2019
30 June
2018
30 June
2017
30 June
2016
30 June
2015
30 June
2014
30 June
2022
400
300
250
200
150
100
50
Ordinary Shares
NA
V T
otal Return
Share price
T
otal Return
MSCI
Wo
rld Net T
otal Return Index
*15 months to 30 June 2013.
30 June
2021
350
31 March
201
1
Relative Importance of Spend on Pay
The table below shows the proportion of the Company’
s income spent on pay
.
2022
£
2021
£
2021/2022
Change
2020
£
2020/2021
Change
Dividends paid to Ordinary Shareholders in the year
–
143,161
(100.0)%
584,576
(75.5)%
Directors’
fees
100,000
86,292
15.9%
51,250
68.4%
26
DIRECTORS’
REMUNERA
TION REPOR
T
continued
Directors’
Benecial and Family Interests
The Board has not adopted a policy that Directors are required to own shares in the Company
. The interests of the current
Directors and their families in the voting rights of the Company are set out below:
As at 30 June
2022
No. of ordinary
shares
As at 30 June
2021
No. of ordinary
shares
Ian Dighé
30,820
30,820
T
om Cleverly
7,061
7,061
T
im Metcalfe
47,505
45,052
Martin Perrin
21,695
20,644
Michael W
eeks
32,000
32,000
There have been no changes to the Directors’
share interests between 30 June 2022 and the date of this Report.
V
oting at
Annual General Meeting
In accordance with the requirement of the Companies
Act 2006 Shareholder approval for the Remuneration Report will
be sought at the 2022
AGM.
An ordinary resolution adopting the Remuneration Report was approved at the
AGM held on 27 October 2021. The votes
cast by proxy were as follows:
Directors’
Remuneration Report
Number of
votes
% of votes
cast
For and discretionary
1,697,560
83.32
Against
339,744
16.68
T
otal votes cast
2,037,304
100.00
Number of votes withheld
1,266,909
V
oting on the Remuneration Policy at the
AGM held on 27 October 2021 was as follows:
Directors’
Remuneration Policy
Number of
votes
% of votes
cast
For and discretionary
1,697,560
83.32
Against
339,744
16.68
T
otal votes cast
2,037,304
100.00
Number of votes withheld
1,266,909
Approval
The Directors’
Remuneration Report was approved by the Board on 22 September 2022.
On behalf of the Board
I. R. Dighé
Chairman
27
The
Directors
are
responsible
for
preparing
this
Annual Report
and the
nancial statements
in accordance
with applicable
law
and
regulations.
Company
law
requires
the
Directors
to
prepare
nancial
statements
for
each
nancial
year
.
Under
that
law
,
the
Directors
have
prepared
the
Group
and
Company
nancial
statements
in
accordance
with
UK
adopted
international accounting standards in conformity with the requirements of the Companies
Act 2006.
Additionally
, the
Financial Conduct
Authority’
s Disclosure Guidance and T
ransparency Rules require the Directors to prepare the Group
nancial
statements
in
accordance
with
UK
adopted
international
accounting
standards.
Under company
law
the Directors
must not
approve the
nancial statements unless
they are
satised that they give
a true and
fair view
of the state
of af
fairs
of the Group and Company and of the prot or loss of the Group and Company for that period.
In preparing those nancial statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
•
make judgements and estimates that are reasonable and prudent;
•
state whether applicable UK adopted international accounting standards, in conformity with the requirements of
the Companies
Act 2006 and, for the Group, UK adopted international accounting standards have been followed,
subject to any material departures disclosed and explained in the nancial statements; and
•
prepare
the
nancial
statements
on
the
going
concern
basis
unless
it
is
inappropriate
to
presume
that
the
Group
will continue in business.
The
Directors
are responsible
for keeping
adequate accounting
records that
are sufcient
to show
and explain
the Group’
s
and
Company’
s
transactions
and
disclose
with
reasonable
accuracy
at
any
time
the
nancial
position
of
the
Group
and
Company
and
enable
them
to
ensure
that
the
nancial
statements
comply
with
the
Companies Act
2006.
They
are
also
responsible for safeguarding the assets of the Group and 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 Strategic Report, Directors’
Report,
Directors’
Remuneration Report and Corporate Governance Statement that comply with that law and those regulations, and
for ensuring that the
Annual Report includes information required by the Listing Rules of the Financial Conduct
Authority
.
The
nancial
statements
are
available
on
the
Company’
s
website
at
https://theinvestmentcompanyplc.co.uk
. The
Directors
are also responsible for the maintenance and integrity of the Company’
s website. V
isitors to the website need to be aware
that legislation in the
United Kingdom covering the
preparation and dissemination of the
nancial statements may differ
from legislation in their jurisdiction.
W
e conrm that to the best of our knowledge:
•
the
Group
and
Company
nancial
statements,
which
have
been
prepared
in
accordance
with
UK
adopted
international
accounting standards in conformity with the requirements of the Companies
Act 2006 and, for the Group, UK
adopted international accounting standards, give a true and fair view
of the assets, liabilities, nancial position and
loss of the Group and Company;
•
the
Annual Report includes a fair review of the development and performance of the business and the position of
the Group and Company together with a description of the principal risks and uncertainties faced by the Group
and Company; and
•
the
Annual Report and nancial
statements, taken as a whole,
are fair
, balanced and understandable and provide
the information necessary for Shareholders to assess the position and performance, business model and strategy
of the Group and Company
.
On behalf of the Board
I. R. Dighé
Chairman
22 September 2022
ST
A
TEMENT OF
DIRECTORS’
RESPONSIBILITIES
28
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
Opinion
W
e
have
audited
the
nancial
statements
of
The
Investment
Company
Plc
(the
‘Parent
Company’)
and
its
subsidiaries
(the
‘Group’)
for
the
year
ended
30
June
2022
which
comprise
the
Consolidated
Income
Statement,
the
Consolidated
Statement of Changes in Equity
, the Company Statement of Changes in Equity
, the Consolidated Balance Sheet, the
Company Balance Sheet, the Consolidated and Company Cash Flow Statements and Notes to the Financial Statements,
including
signicant
accounting
policies.
The
nancial
reporting
framework
that
has
been
applied
in
their
preparation
is
applicable
law
and
UK-adopted
international
accounting
standards
and
as
regards
the
Parent
Company
nancial
statements, as applied in accordance with the provisions of the Companies
Act 2006.
In our opinion:
•
the nancial statements give a true
and fair view of the state
of the Group’
s and of
the Parent Company’
s affairs
as at 30 June 2022 and of the Group’
s loss for the year then ended;
•
the
Group nancial
statements
have been
properly
prepared
in accordance
with
UK-adopted international
accounting standards;
•
the
Parent
Company
nancial
statements
have
been
properly
prepared
in
accordance
with
UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies
Act 2006;
and
•
the nancial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
W
e 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
nancial
statements section of our report. W
e are independent of the Group and Parent Company in accordance with the ethical
requirements that are relevant to our audit of the nancial statements in the UK, including the FRC’
s Ethical Standard as
applied
to
listed
public
interest
entities,
and
we
have
fullled
our
other
ethical
responsibilities
in
accordance
with
these
requirements.
W
e believe that the
audit evidence we
have obtained is sufcient
and appropriate to provide a basis for
our
opinion.
Conclusions relating to going concern
In auditing
the nancial
statements, we have
concluded that
the Director's use
of the
going concern
basis of
accounting in
the preparation of the nancial statements is appropriate. Our
evaluation of the Directors’
assessment
of the Group’
s and
Parent Company’
s ability to continue to adopt the going concern basis of accounting included:
•
an
assessment
of
management’
s
assumptions
in
modelling
future
nancial
performance
and
cashow
requirements,
including consideration of the key changes arising from adopting the new investment objective and ensuring any
investment commitments are reected therein;
•
assessing liquidity and the ability of management to trade in the investment portfolio in order to cover operational
expenditure as required;
•
checking the
mathematical accuracy
of the spreadsheet used
to model future nancial
performance and cashow
requirements;
•
assessing the mitigating factors available to management including their ability to generate cash from the
investment portfolio, should that be required, and the liquidity of the portfolio; and
•
assessing the appropriateness of the going concern disclosures included within the nancial statements.
Based on the
work we have
performed, we
have not identied
any material uncertainties
relating to events
or conditions
that, individually
or
collectively
, may
cast
signicant doubt
on
the
Group’
s
or Parent
Company's
ability
to continue
as
a
going concern for a period of at least twelve months from when the nancial statements are authorised for issue.
29
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
continued
In relation to the entities reporting on how they have applied the UK Corporate Governance Code, we have nothing
material
to
add
or
draw
attention
to
in
relation
to
the
Directors’
statement
in
the
nancial
statements
about
whether
the
Director
’
s considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The
scope
of
our
audit
was
inuenced
by
our
application
of
materiality
.
W
e
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
nancial
statement
line
items
and disclosures
and
in
evaluating
the effect of misstatements, both individually and in aggregate, on the nancial statements as a whole.
Based on our professional judgement, we determined materiality for the nancial statements as follows:
Group
Company
Overall materiality
£323,000 (2021: £331,000)
£322,000 (2021: £330,000)
Performance materiality
£226,100 (2021: £231,700)
£225,400 (2021: £231,000)
T
riviality
£16,150 (2021: £16,550)
£16,100 (2021: £16,500)
Basis for determining materiality
2% of gross assets
Rationale for the benchmark
applied
W
e have set our overall materiality at 2% of gross assets as the carrying value of the
investments is a key driver of shareholder value and a key performance indicator used
by management and forms more than 90% of gross assets. The basis of materiality
has been consistently applied in the current and previous year
.
Performance materiality represents amounts set by the auditor at less than the overall
materiality to reduce the probability that the aggregate of uncorrected and undetected
misstatements exceeds the overall materiality
. In setting this we consider the overall
control environment and our experience from previous audits which has indicated a
low number of corrected and uncorrected misstatements. Based on these factors we
have set performance materiality at 70% of our overall materiality
.
In addition to the above, we determined a specic materiality in our audit of the Income Statement, as follows:
Group
Company
Overall materiality
£18,000 (2021: £33,000)
£16,000 (2021: £30,000)
Performance materiality
£12,600 (2021: £23,100)
£1
1,200 (2021: £21,000)
T
riviality
£900 (2021: £1,650)
£800 (2021: £1,500)
Basis for determining materiality
5% of expenses
Rationale for the benchmark
applied
W
e consider expenses to be a stable metric for income statement materiality and
have applied this method consistently in the current and previous year
. Cost control
is a key focus of the Group, and hence this is deemed to be a suitable performance
indicator to use for determining materiality
.
For the reasons noted above performance materiality has been set at 70% of the
overall materiality
.
W
e set materiality for each component of the Group at a lower level of materiality
, dependent on the size and our
assessment of the risk of material misstatement of that component. This was consistent between the balance sheet and
income statement for both subsidiaries. For
Abport Limited, overall materiality was set at £9,000 (2021: £1,800), and for
New Centurion T
rust Limited at £16,000 (2021: £17,000). W
e further applied performance materiality levels of 70% of
the component materiality
.
30
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
continued
W
e have agreed with the audit committee that we would report to the committee individual audit differences in excess of
the trivial thresholds outlined above, as well as differences below
these thresholds that, in our view
, warranted reporting
on qualitative grounds.
W
e also report to
the audit committee on
disclosure matters that we
identied when assessing the
overall presentation of
the nancial statements.
Our appr
oach to the audit
In
designing
our
audit,
we
determined
materiality
and
assessed
the
risk
of
material
misstatement
in
the
nancial
statements.
In
particular
,
we
looked
at
areas
involving
signicant
accounting
estimates
and
judgement
by
the
Directors
and
considered
future events that are inherently uncertain such as the valuation of unquoted investments. W
e also addressed the risk of
management override of internal controls, including among other matters consideration of whether there was evidence of
bias that represented a risk of material misstatement due to fraud.
The Group’
s only
signicant and material
component was the
Parent Company and
this was subject
to a full
scope audit
by a team with relevant sector
experience undertaken from our ofce
based in London.
The components identied as not
signicant and not material were subject to review procedures undertaken by the same audit team.
Key audit matters
Key
audit
matters
are
those
matters
that,
in
our
professional
judgment,
were
of
most
signicance
in
our
audit
of
the
nancial
statements
of
the
current
period
and
include
the
most
signicant
assessed
risks
of
material
misstatement
(whether
or
not
due
to
fraud)
we
identied, including
those
which had
the
greatest ef
fect
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 nancial statements
as a whole, and in forming
our opinion thereon, and we do not
provide a separate
opinion on these matters.
31
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
continued
Key Audit
Matter
How our scope addressed this matter
V
aluation and ownership of investments (note
1 and 8)
The Group holds investments with a carrying
value of £15.4m as at 30 June 2022. The Group’
s
investments include both listed and unlisted
holdings and are valued using the appropriate
level of the fair value hierarchy as per IFRS 13
Fair V
alue Measurement. For those holdings
which are unlisted and have limited market
information, the Directors apply their knowledge
and experience together with the assistance of a
management expert to arrive at a valuation.
Director valuations involve critical accounting
estimation and judgement and therefore there
is a risk that the year-end investment valuation
may be materially misstated.
Furthermore, there is a risk that the Group does not
hold the legal title to the investments.
As above,
investments
are
a
highly
signicant
component
of the balance sheet and therefore if the
investments were to not be rightfully owned, this
would
have
a
material
impact
on
the
nancial
statements. Therefore, this is determined to be a
key audit matter
.
Our work included:
•
testing a sample of listed investment valuations to closing
bid prices published by an independent pricing source;
•
reviewing and assessing management’
s valuation of a
sample of the unlisted investments by checking supporting
evidence where available;
•
assessing the independence and competence of
management’
s expert, whose work is used by the Group and
Parent
Company
to
assist
them
in
preparing
the
nancial
statements;
•
challenging the assumptions and inputs used by the
management expert to derive the valuations of unquoted
investments;
•
agreeing 100% of the listed investments held at the year-end
to the custody report received directly from the custodian
Fiske plc;
•
performing a reconciliation of the investment holdings,
checking
that
the
correct
classication
has
been
applied
to
each holding and that the fair value hierarchy disclosure
is presented in accordance with IFRS 13 Fair V
alue
Measurement; and
•
testing a sample of investment additions and disposals
and corroborating to supporting documentation including
recalculating any realised gains/losses on disposal to ensure
they have been accurately calculated.
Based
on
the
work
performed,
we
are
satised
that
the
Group
and
Parent Company’
s valuation of the investments held is appropriate,
and that the Group and Parent Company holds legal title to the
investments.
32
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
continued
Other information
The
other
information
comprises
the
information
included
in
the Annual Report,
other
than
the
nancial
statements and
our auditor
’
s report thereon. The Directors are responsible for the other information contained within the
Annual Report.
Our
opinion
on
the
Group
and
Parent
Company
nancial
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 nancial
statements or our
knowledge obtained
in
the course
of the
audit, or otherwise
appears to
be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives
rise to a
material misstatement in
the nancial statements
themselves. If, based on
the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
W
e have nothing to report in this regard.
Opinions on other matters pr
escribed 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
Directors’
Report
for
the
nancial
year
for
which
the
nancial statements are prepared is consistent with the nancial statements; and
•
the Strategic Report and the Directors’
Report have been prepared in accordance with applicable legal requirements.
Matters on which we are r
equired to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained
in the course of the audit, we have not identied material misstatements in the Strategic Report or the Directors’
Report.
W
e have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to
report to you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company
, or returns adequate for our audit have
not been received from branches not visited by us; or
•
the
Parent Company
nancial
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 specied by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Corporate governance statement
W
e
have
reviewed
the
Directors'
statement
in
relation
to
going
concern,
longer-term
viability
and
that
part
of
the
Corporate
Governance
Statement
relating
to
the
Group’
s
and
Parent
Company's
compliance
with
the
provisions
of
the
UK
Corporate
Governance Code specied 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 nancial statements or our knowledge obtained during the audit:
•
Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identied set out on pages 1
1 and 12;
33
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
continued
•
Directors’
explanation as to their assessment of the Group’
s prospects, the period this assessment covers and why
the period is appropriate set out on page 12;
•
Directors’
statement on whether they have a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities set out on page 12;
•
Directors' statement
that they
consider the
annual report
and the
nancial statements,
taken
as a
whole, to
be fair
,
balanced and understandable set out on page 27;
•
Board’
s
conrmation
that
it
has
carried
out
a
robust
assessment
of
the
emer
ging
and
principal
risks
set
out
on
page 20;
•
the section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on pages 20 and 21; and
•
the section describing the work of the audit committee set out on pages 22 and 23.
Responsibilities of directors
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the preparation
of the Group and
Parent Company nancial statements
and for being
satised that they give
a true and
fair view
, and for
such internal
control as the
Directors determine
is necessary to
enable the
preparation of nancial
statements that
are free
from material misstatement, whether due to fraud or error
.
In preparing the Group
and Parent Company nancial
statements, the Directors are
responsible for assessing the Group’
s
and the Parent 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 Group or the
Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s r
esponsibilities for the audit of the nancial statements
Our
objectives are
to
obtain
reasonable assurance
about
whether the
nancial
statements
as a
whole
are
free from
material
misstatement, whether due to fraud or error
, and to issue an auditor
’
s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material
if,
individually
or
in
the
aggregate,
they
could
reasonably
be
expected
to
inuence
the
economic
decisions
of
users taken on the basis of these nancial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
W
e 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:
•
W
e obtained an understanding of the Group and Parent Company and the sector in which they operate to identify
laws
and
regulations
that
could
reasonably
be
expected
to
have
a
direct
effect
on
the
nancial
statements.
W
e
obtained our understanding in this regard through discussions with management, industry research, and the
application of our cumulative audit knowledge and experience of the sector
.
•
W
e determined the principal laws and regulations relevant to the Group and Parent Company in this regard
to be those arising from the FCA
Rules, Listing Rules, Disclosure and T
ransparency Rules, the principles of
the UK Corporate Governance Code applied by the
AIC Code of Corporate Governance (the
AIC Code), the
AIC Statement of Recommended Practice Financial Statements of Investment T
rust Companies and V
enture
Capital T
rusts issued in
April 2021 (“AIC SORP) to the extent that is consistent with IFRS, Companies
Act
2006, UKLA
Listing Rules, UKLA
Disclosure Guidance and T
ransparency Rules,
Alternative Investment Fund
Managers’
Directive and
UK tax
legislation including
qualication as
an investment
trust under
section
1
158
of
the Corporation tax
Act 2010.
34
•
W
e designed our audit procedures to ensure the audit team considered whether there were any indications of
non-compliance by the Group and Parent Company with those laws and regulations. These procedures included,
but were not limited to enquiries of management, review of minutes, review of legal/regulatory correspondence
and
reviewing
nancial
statement
disclosures and
testing
to
supporting documentation
to
assess compliance
with
applicable laws and regulations.
•
W
e
also
identied the
risks
of
material
misstatement
of
the
nancial statements
due
to
fraud. W
e considered,
in
addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, the
risk of fraud related to revenue recognition, the posting of unusual journals and the manipulation of the Group’
s
alternative performance prot measures
and other key performance
indicators to meet externally
communicated
targets.
The
potential
for
management
bias was
identied in
relation to
the
unlisted
investments
and we
addressed
this by challenging the assumptions and judgements made by management when auditing the accounting estimate.
•
As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing
audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates
for
evidence
of
bias;
and
evaluating
the
business
rationale
of
any
signicant
transactions
that
are
unusual
or
outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those
leading
to
a
material
misstatement
in
the
nancial
statements
or
non-compliance
with
regulation.
This
risk
increases
the
more
that
compliance
with
a
law
or
regulation
is
removed
from
the
events
and
transactions
reected
in
the
nancial
statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding
irregularities occurring due to fraud rather than error
, as fraud involves intentional concealment, forgery
, collusion,
omission or misrepresentation.
A
further description of our responsibilities for the audit of the nancial statements is located on
the Financial Reporting
Council’
s website at: www
.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’
s report.
Other matters which we ar
e required to addr
ess
W
e were appointed
by the
Audit Committee on 29
November 2018 to audit the
nancial statements
for the period
ending
30 June
2019 and
subsequent nancial
periods. Our
total uninterrupted
period of
engagement is
four years,
covering the
periods ending 30 June 2019 to 30 June 2022.
The non-audit services prohibited by the FRC’
s Ethical Standard were not provided to the Group or the Parent Company
and we remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our r
eport
This report is made solely to the Company’
s members, as a body
, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’
s members those matters we are
required to state to them in an auditor
’
s report and for no other purpose. T
o the fullest extent permitted by law
, we do not
accept or assume responsibility to
anyone, other than the
Company and the Company's members
as a body
, for our audit
work, for this report, or for the opinions we have formed.
Ian Cowan (Senior Statutory
Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 W
estferry Circus
Canary Wharf
London E14 4HD
22 September 2022
INDEPENDENT
AUDITORS’
REPOR
T T
O THE MEMBERS
continued
35
The notes on pages 41 to 56 form part of these nancial statements.
CONSOLIDA
TED INCOME ST
A
TEMENT
For the year ended 30 June 2022
Y
ear ended 30 June 2022
Y
ear ended 30 June 2021
Notes
Revenue
£
Capital
£
T
otal
£
Revenue
£
Capital
£
T
otal
£
(Losses)/gains on
investments at fair value
through prot or loss
8
–
(227,992)
(227,992)
–
1,315,694
1,315,694
Exchange gains/(losses) on
capital items
–
2,583
2,583
–
(88)
(88)
Investment income
2
371,956
–
371,956
724,585
–
724,585
Investment management fee
3
–
–
–
(96,825)
–
(96,825)
Other expenses
4
(355,618)
–
(355,618)
(535,120)
–
(535,120)
Return/(loss) before
taxation
16,338
(225,409)
(209,071)
92,640
1,315,606
1,408,246
T
axation
5
(39,554)
–
(39,554)
(20,338)
–
(20,338)
T
otal (loss)/income after
taxation
(23,216)
(225,409)
(248,625)
72,302
1,315,606
1,387,908
Revenue
pence
Capital
pence
T
otal
pence
Revenue
pence
Capital
pence
T
otal
pence
(Loss)/return on total
income after taxation per
50p ordinary share – basic
& diluted
6
(0.49)
(4.72)
(5.21)
1.51
27.57
29.08
The total column of this statement is the Income Statement of the Group prepared in accordance with international
accounting standards in conformity with the requirements of the Companies
Act 2006. The supplementary revenue and
capital columns are prepared in accordance with the Statement of Recommended Practice (“AIC SORP”) issued in
April
2021 by the
Association of Investment Companies.
The Group did not have any income or expense that was not included in total income for the year
.
Accordingly
, total
income
is
also
total
comprehensive
income
for
the
year
,
as
dened
by
IAS
1
(revised)
and
no
separate
Statement
of
Comprehensive Income has been presented.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or
discontinued during the year
.
36
The notes on pages 41 to 56 form part of these nancial statements.
CONSOLIDA
TED ST
A
TEMENT OF
CHANGES IN EQUITY
For the year ended 30 June 2022
Ordinary
share
capital
£
Share
premium
£
Capital
redemption
reserve
£
Capital
reserve
£
Revenue
reserve
£
T
otal
£
Balance at 1 July 2021
2,386,025
4,453,903
2,408,820
8,410,600
(1,377,544)
16,281,804
T
otal comprehensive income
Net loss for the year
–
–
–
(225,409)
(23,216)
(248,625)
T
ransactions with Shareholders
recorded dir
ectly to equity
Ordinary dividends (note 7)
–
–
–
–
15,012
15,012
Balance at 30 June 2022
2,386,025
4,453,903
2,408,820
8,185,191
(1,385,748)
16,048,191
Balance at 1 July 2020
2,386,025
4,453,903
2,408,820
7,094,994
(1,306,685)
15,037,057
T
otal comprehensive income
Net return for the year
–
–
–
1,315,606
72,302
1,387,908
T
ransactions with Shareholders
recorded dir
ectly to equity
Ordinary dividends (note 7)
–
–
–
–
(143,161)
(143,161)
Balance at 30 June 2021
2,386,025
4,453,903
2,408,820
8,410,600
(1,377,544)
16,281,804
37
The notes on pages 41 to 56 form part of these nancial statements.
COMP
ANY
ST
A
TEMENT OF
CHANGES IN EQUITY
For the year ended 30 June 2022
Ordinary
share capital
£
Preference
share capital
£
Share
premium
£
Capital
redemption
reserve
£
Capital
reserve
£
Revenue
reserve
£
T
otal
£
Balance at 1 July 2021
2,386,025
858,783
4,453,903
2,408,820
5,852,000
1,122,327
17,081,858
T
otal comprehensive income
Net loss for the year
–
–
–
–
(225,503)
(8,715)
(234,218)
T
ransactions with Shareholders
recorded dir
ectly to equity
Ordinary dividends (note 7)
–
–
–
–
–
15,012
15,012
Preference share dividends paid
–
–
–
–
–
(172)
(172)
Balance at 30 June 2022
2,386,025
858,783
4,453,903
2,408,820
5,626,497
1,128,452
16,862,480
Balance at 1 July 2020
2,386,025
858,783
4,453,903
2,408,820
4,549,368
1,185,316
15,842,215
T
otal comprehensive income
Net return for the year
–
–
–
–
1,302,632
80,344
1,382,976
T
ransactions with Shareholders
recorded dir
ectly to equity
Ordinary dividends (note 7)
–
–
–
–
–
(143,161)
(143,161)
Preference share dividends paid
–
–
–
–
–
(172)
(172)
Balance at 30 June 2021
2,386,025
858,783
4,453,903
2,408,820
5,852,000
1,122,327
17,081,858
38
The notes on pages 41 to 56 form part of these nancial statements.
CONSOLIDA
TED BALANCE SHEET
At 30 June 2022
Notes
30 June
2022
£
30 June
2021
£
Non-current assets
Investments held at fair value through prot or loss
8
15,445,243
15,618,864
Current assets
T
rade and other receivables
11
30,358
389,029
Cash and cash equivalents
678,592
540,800
708,950
929,829
Current liabilities
T
rade and other payables
12
(106,002)
(266,889)
(106,002)
(266,889)
Net current assets
602,948
662,940
Net assets
16,048,191
16,281,804
Capital and reserves
Ordinary share capital
13
2,386,025
2,386,025
Share premium
4,453,903
4,453,903
Capital redemption reserve
2,408,820
2,408,820
Capital reserve
8,185,191
8,410,600
Revenue reserve
(1,385,748)
(1,377,544)
Shareholders’
funds
16,048,191
16,281,804
NA
V per
50p ordinary share
15
336.30p
341.19p
These nancial statements were approved by the Board on 22 September 2022 and were signed on its behalf by:
I. R. Dighé
Chairman
Company Number: 0004205
39
The notes on pages 41 to 56 form part of these nancial statements.
COMP
ANY
BALANCE SHEET
At 30 June 2022
Notes
30 June
2022
£
30 June
2021
£
Non-current assets
Investments held at fair value through prot or loss
8
15,444,619
15,618,334
Investment in subsidiaries
9
862,656
862,656
16,307,275
16,480,990
Current assets
T
rade and other receivables
11
89,097
435,180
Cash and cash equivalents
663,863
526,071
752,960
961,251
Current liabilities
T
rade and other payables
12
(197,755)
(360,383)
(197,755)
(360,383)
Net current assets
555,205
600,868
Net assets
16,862,480
17,081,858
Capital and reserves
Ordinary share capital
13
2,386,025
2,386,025
Preference share capital
14
858,783
858,783
Share premium
4,453,903
4,453,903
Capital redemption reserve
2,408,820
2,408,820
Capital reserve
5,626,497
5,852,000
Revenue reserve
1,128,452
1,122,327
Shareholders’
funds
16,862,480
17,081,858
As permitted by section 408 of the Companies
Act 2006, the Company has not presented its own Income Statement. The
amount
of
the
Company’
s
return
for
the nancial
year
dealt
with in
the
nancial
statements of
the
Group
is a
loss
after
tax
of £234,218 (2021: prot of £1,382,976).
These nancial statements were approved by the Board on 22 September 2022 and were signed on its behalf by:
I. R. Dighé
Chairman
Company Number: 0004205
40
The notes on pages 41 to 56 form part of these nancial statements.
CONSOLIDA
TED
AND COMP
ANY
CASH FLOW
ST
A
TEMENTS
For the year ended 30 June 2022
Group
Company
Notes
30 June
2022
£
30 June
2021
£
30 June
2022
£
30 June
2021
£
Cash ows (used in)/generated from operating
activities
Income received from investments
342,923
777,299
342,923
777,299
Interest received
38
9,792
38
9,792
Overseas taxation paid
(29,350)
(19,195)
(29,350)
(19,195)
Investment management fees paid
(1,678)
(104,544)
(1,678)
(104,544)
Other cash payments
(347,995)
(564,381)
(335,407)
(555,145)
Net cash (used in)/generated from operating
activities
(36,062)
98,971
(23,474)
108,207
Cash ows used in nancing activities
Dividends paid on ordinary shares
7
–
(143,161)
–
(143,161)
Net cash used in nancing activities
–
(143,161)
–
(143,161)
Cash ows generated from investing activities
Purchase of investments
8
(3,580,745)
(13,442,242)
(3,580,745)
(13,442,242)
Sale of investments
8
3,748,933
13,762,164
3,748,933
13,748,539
Loans to subsidiaries
–
–
(12,588)
(9,236)
Net cash generated from investing activities
168,188
319,922
155,600
297,061
Net increase in cash and cash equivalents
132,126
275,732
132,126
262,107
Reconciliation of net cash ow to movement
in net cash
Increase in cash
132,126
275,732
132,126
262,107
Exchange rate movements
5,666
16
5,666
16
Increase in net cash
137,792
275,748
137,792
262,123
Net cash at start of period
540,800
265,052
526,071
263,948
Net cash at end of period
678,592
540,800
663,863
526,071
Analysis of net cash
Cash and cash equivalents
678,592
540,800
663,863
526,071
678,592
540,800
663,863
526,071
41
1.
ACCOUNTING POLICIES
Basis of Preparation
The Company is a public limited company limited by shares and incorporated and registered in England and W
ales. The
Company has been approved as an investment trust within the meaning of sections 1
158/1159 of the Corporation
T
ax
Act
2010. The Company’
s registered ofce is Suite 8, Bridge House, Courtenay Street, Newton
Abbot TQ12 2QS.
The Group’
s consolidated
nancial statements
for the year
ended 30 June
2022, which comprise
the audited results
of the
Company and its wholly owned subsidiaries,
Abport Limited and New Centurion T
rust Limited (together referred to as
the “Group”), have been prepared in accordance with UK adopted international accounting standards and in accordance
with
the
requirements of
the Companies
Act 2006.
The annual
nancial statements
have also
been prepared
in accordance
with the
AIC Statement of Recommended Practice issued in
April 2021 (“AIC SORP”), except to any extent where it is
not consistent with the requirements of UK IFRS.
In order
to better
reect the
activities of
an investment
trust
company
and in
accordance with
guidance issued
by the
AIC,
supplementary information which analyses the Income Statement between items of a revenue and capital nature have been
prepared alongside the Income Statement.
The
nancial
statements
are
presented
in
Sterling,
which
is
the
Group’
s
functional
currency
as
the
UK
is
the
primary
environment in which it operates.
Going Concern
The Directors have made an assessment of the Group’
s ability to continue as a going concern.
This has included
consideration
of
portfolio
liquidity
,
the
Group’
s
nancial
position
in
respect
of
its
cash
ows
and
investment
commitments
(of
which
there
are
none
of
signicance),
the
working
arrangements
of
key
service
providers,
continued
eligibility
to
be
approved
as
an
investment
trust
company
and
the
impact
of
the
conict
in
Ukraine
and
the
Covid-19
pandemic.
In
addition,
the Directors
are not
aware of
any material
uncertainties
that
may cast
signicant doubt
upon the
Group’
s
ability
to continue as a going concern.
The
Directors
are
satised
that
the
Group
has
sufcient
resources
to
continue
in
business
for
the
foreseeable
future
being a period of at least
12 months from the date that these
nancial statements were approved. Therefore, the nancial
statements have been prepared on the going concern basis.
Basis of Consolidation
IFRS10 stipulates that subsidiaries of Investment Entities are not consolidated. The
Investment Company meets all three
characteristics of an Investment Entity as described, however
, it is envisaged that one of the subsidiaries will be a dealing
subsidiary
and,
therefore
consolidated
nancial
statements
are
presented
for
the
Group.
The
nancial
statements
of
the
subsidiaries are prepared for the same reporting year as the parent Company
, using consistent accounting policies.
All
inter-company balances and transactions, including unrealised prots arising from them are eliminated.
Segmental Reporting
The Directors are of the opinion that the Group is engaged in a single segment of business, being investment business. The
Group primarily invests in companies listed in the UK, Continental Europe and North
America.
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
For the year ended 30 June 2022
42
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
1.
ACCOUNTING POLICIES
(continued)
Accounting Developments
The following accounting standards and their amendments were in issue at the year end but will not be in effect until after
this nancial year
.
International Accounting Standar
ds
Effective date*
IAS 1
(Amendments) Presentation of Financial Statements regarding classication of
liabilities
1 January 2023
IAS 1
(Amendments) Presentation of Financial Statements regarding the amendments of
disclosure of accounting policies
1 January 2023
IAS 8
(Amendments)
Accounting Policies, Changes in
Accounting Estimates and Error to
distinguish between accounting policies and accounting estimates
1 January 2023
*
Y
ears beginning on or after
The
Directors
do
not
expect
that
the
adoption
of
the
standards
listed
above
will
have
a
material
impact
on
the
nancial
statements of the Group or Company in future periods.
Critical
Accounting Judgements and Key Sources of Estimation Uncertainty
The
preparation of
nancial statements
in
conformity with
IFRS
requires management
to make
judgements,
estimates and
assumptions that affect the application of policies and the reported amounts in the Balance Sheet, the Consolidated Income
Statement and the disclosure
of contingent assets and
liabilities at the
date of the nancial
statements. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
The estimates and underlying assumptions are based on historical experience and other factors that are considered to be
relevant. These are reviewed on an ongoing basis.
Actual results may differ from these estimates. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the
period of the revision and future period if the revision affects both current and future periods.
The major part of the investment portfolio is valued by reference to quoted prices. However
, the Board assesses the
portfolio for any investments which it considers the value has fallen permanently below cost.
Any such loss is treated as
a permanent impairment and as a realised loss, even though the investment is still held.
In
addition,
£61,152
of
the
portfolio
comprises
xed
interest
stocks
which
are
thinly
traded;
such
stocks
are
primarily
valued by reference to current market price lists provided by an independent broker
, itself a recognised leader in such
preference
shares and
similar
xed interest
stocks.
The
Directors may
overlay
such prices
with
situation specic
adjustments
including
(a)
taking
a
second
independent
opinion
on
a
specic
stock,
or
(b)
reducing
the
value
to
a
net
present
value,
to
reect
the
likely
time
to
be
taken
to
realise
a
stock
which
the
Group
is
actively
looking
to
sell.
The
outturn is reected in the valuations set out in note 8 to the nancial statements.
There were no other signicant accounting estimates or signicant judgements in the current or previous year
.
43
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
1.
ACCOUNTING POLICIES
(continued)
Investments
As
the
Group’
s
business
is
investing
in
nancial
assets
with
a
view
to
proting
from
their
total
return
in
the
form
of
income
and capital growth,
Investments are classied
at fair value
through prot or loss on initial
recognition in accordance
with
IFRS
9.
The
portfolio
of
nancial
assets
is
managed
and
its
performance
evaluated
on
a
fair
value
basis,
in
accordance
with a documented investment strategy
, and information about the portfolio is provided internally on that basis to the
Group’
s Board of Directors.
Investments are measured initially
, and at subsequent reporting dates, at fair value, and derecognised at trade date where a
purchase or sale is under a contract whose terms require delivery within the time-frame of the relevant market. For quoted
investments this is deemed to be bid market prices or closing prices.
Changes in fair value of investments and realised gains and losses on disposal are recognised in the Consolidated Income
Statement as capital items. The holdings of the investment in
subsidiaries are stated at cost less diminution in value.
All
investments for which fair value is
measured or disclosed in the nancial
statements are categorised within the fair
value
hierarchy in note 8.
Foreign Curr
ency
T
ransactions denominated in foreign currencies are converted to Sterling at the actual exchange rate as at the date of the
transaction. Items that are denominated in foreign currencies at the year-end are reported at the rate of exchange at the
Balance Sheet date.
Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is
included as an exchange gain or loss in the capital reserve or the revenue account depending on whether the gain or loss
is of a capital or revenue nature.
Cash and Cash Equivalents
Cash comprises cash at bank and demand deposits. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to insignicant risk of changes in value.
For
the
purpose
of
the
Cash
Flow
Statement,
cash
and
cash
equivalents
consist
of
cash
and
cash
equivalents
as
dened
above.
Current Assets
Current assets are initially recognised at cost and subsequently measured at amortised cost and balances revalued for
exchange rate movement. Current assets comprise debtors, prepayments and cash and are subject to review for impairment
at least at each reporting date.
Current Liabilities
Current liabilities are initially recognised at cost and subsequently measured at amortised cost and balances revalued for
exchange rate movement. Current liabilities comprise accruals and other creditors and are subject to review for impairment
at least at each reporting date.
44
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
1.
ACCOUNTING POLICIES
(continued)
Income
Dividends receivable on quoted equity shares are taken to revenue on an ex-dividend basis. Dividends receivable on
equity shares where no ex-dividend date is quoted are brought into account when the Company’
s right to receive payment
is established. Fixed returns on non-equity shares are recognised on a time-apportioned basis.
Dividends from overseas companies are shown gross of any non-recoverable withholding taxes which are disclosed
separately in the Consolidated Income Statement.
Dividend income will only be recognised when there is reasonable certainty that the issuer has the ability to make the
return.
Expenses and Finance Costs
All expenses and nance costs are accounted for on an accruals basis.
T
axation
The
tax
expense
represents
the
sum
of
the
tax
currently
payable.
The
tax
payable
is
based
on
the
taxable
prot
for
the
year
.
T
axable prot differs from
net prot as reported in
the Consolidated Income Statement
because it excludes items that
are
taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’
s liability
for current tax is calculated using tax rates applicable at the Balance Sheet date.
No
taxation
liability
arises
on
gains
from
sales
of
xed
asset
investments
by
the
Group
by
virtue
of
its
investment
trust
status. However
, the net revenue (excluding UK dividend income) accruing to the Group is liable to corporation tax at
the prevailing rates.
Dividends Payable to Shareholders
Dividends to Shareholders are recognised as a liability in the period in which they are paid or approved in general
meetings and are taken to the Statement of Changes in Equity
. Dividends declared and approved by the Company after
the Balance Sheet date have not been recognised as a liability of the Company at the Balance Sheet date.
Share Capital
Issued share capital consists of Ordinary shares with voting rights and issued preference shares which are non-voting.
The issued preference shares, owned in their entirety by New Centurion T
rust Limited, a wholly-owned subsidiary of the
Company
, are entitled to receive a cumulative dividend of 0.01p per share per annum, and are entitled to receive their
nominal value, 50p, on a distribution of assets or a winding up.
Share Pr
emium
The share premium account represents the accumulated premium paid for shares issued in previous periods above their
normal value less issue expenses. This is a reserve forming part of non-distributable reserves.
The following items are
taken to this reserve:
•
costs associated with the issue of equity; and
•
premium on the issue of shares.
45
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
1.
ACCOUNTING POLICIES
(continued)
Capital Redemption Reserve
The reserve represents the nominal value of the shares bought back and cancelled. This reserve is not distributable.
Capital Reserve
Capital expenses, gains
or losses on realisation
of investments held at fair value
through prot or
loss and changes
in fair
value of investments are transferred to the capital reserve.
The following are taken to this reserve:
•
gains and losses on the disposal of investments;
•
net movement
arising from
changes in
the fair
value of
investments held
and classied
as at
“fair value
through
prot or loss”;
•
exchange differences of a capital nature; and
•
expenses together with the related taxation effect, allocated to this reserve in accordance with the above policies.
Realised gains on investments less expenses, provisions and unrealised gains may be considered by the Board for
distribution. This reserve is not distributable.
Revenue Reserves
The net revenue for the year is transferred to the revenue reserve and dividends paid are deducted from the revenue reserve.
The revenue reserve represents the surplus accumulated prots and is distributable.
2.
INCOME
Y
ear ended
30 June 2022
£
Y
ear ended
30 June 2021
£
Income from investments:
UK dividends
122,508
438,996
Unfranked dividend income (including scrip dividends)
258,224
132,143
UK xed interest
(8,814)
143,654
371,918
714,793
Other income
Bank deposit and other interest
38
9,792
T
otal income
371,956
724,585
46
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
3.
INVESTMENT MANAGEMENT
FEE
Y
ear ended
30 June 2022
£
Y
ear ended
30 June 2021
£
Investment management fee
–
96,825
Pursuant to the changes to the Company’
s Investment Objective and Policy
, and the Company becoming self-managed
on 4 November 2020, the Investment Management
Agreement with Fiske plc came to an end on 5 May 2021. The
management fee payable monthly in arrears by the Company to the Investment Manager was calculated at the rate of one-
twelfth of 0.75% of the NA
V as at the last business day of each calendar month.
At 30 June 2022, an amount of £nil (2021: £1,678) was outstanding and due to the Investment Manager
.
4.
OTHER EXPENSES
Y
ear ended
30 June 2022
£
Y
ear ended
30 June 2021
£
Administration and secretarial services – recurring
85,000
81,236
– non-recurring
–
36,500
Auditors’
remuneration for:
–
Audit of the Group’
s nancial statements
38,900
37,250
Directors’
remuneration (see note 18)
100,000
86,292
T
ransaction costs in relation to the change of investment policy
–
152,285
Other expenses
131,718
141,557
T
otal expenses
355,618
535,120
The
audit
of
the
Group’
s
nancial
statements
includes
the
cost
of
the
audit
of Abport Limited
of
£3,300
(2021:
£3,150)
and New Centurion T
rust Limited £3,300 (2021: £3,150), which are charged to the subsidiaries.
The Directors were the Group and Company’
s only employees in the current and comparative period.
47
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
5.
T
AXA
TION
Y
ear ended 30 June 2022
Y
ear ended 30 June 2021
Revenue
£
Capital
£
T
otal
£
Revenue
£
Capital
£
T
otal
£
Current T
axation
–
–
–
–
–
–
Overseas taxation suffered
39,554
–
39,554
20,338
–
20,338
39,554
–
39,554
20,338
–
20,338
The current tax charge for the year is higher than (2021: lower than) the standard rate of corporation tax in the UK of 19%.
The differences are explained below:
Y
ear ended 30 June 2022
Y
ear ended 30 June 2021
Revenue
£
Capital
£
T
otal
£
Revenue
£
Capital
£
T
otal
£
Return on ordinary activities
16,338
(225,409)
(209,071)
92,640
1,315,606
1,408,246
T
ax at UK Corporation tax rate of 19%
(2021:19%)
3,104
(42,828)
(39,724)
17,602
249,965
267,567
Effects of:
UK dividends that are not taxable
(23,277)
–
(23,277)
(83,409)
–
(83,409)
Overseas dividends that are not taxable
(1
1,537)
–
(1
1,537)
(8,386)
–
(8,386)
Non-taxable investment losses/(gains)
–
42,828
42,828
–
(249,965)
(249,965)
Overseas taxation suffered
39,554
–
39,554
20,338
–
20,338
Unrelieved expenses
31,710
–
31,710
74,193
–
74,193
Actual current tax charged to the
revenue account
39,554
–
39,554
20,338
–
20,338
Factors that may affect future tax charges
The Company has excess management expenses of £2,323,531 (2021: £2,156,636). It is unlikely that the Company
will
generate
sufcient
taxable
income
in
the
future
to
use
these
expenses
to
reduce
future
tax
charges and
therefore
no
deferred tax asset has been recognised.
Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the
Company meets (and intends to continue for the foreseeable future to meet) the conditions for approval as an investment
trust company under HMRC rules.
On 3 March 2021, the UK government announced that it intended to increase the main rate of corporation tax to 25% for
the
nancial
years
beginning
1
April
2023.
This new
rate was
substantively enacted
by Finance
Act
2021
on 10
June 2021.
48
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
6.
RETURN PER ORDINAR
Y SHARE
Returns per share are based on the weighted average number of shares in issue during the year
. Normal and diluted returns
per share are the same as there are no dilutive elements on share capital.
Y
ear ended 30 June 2022
Y
ear ended 30 June 2021
Revenue
Capital
T
otal
Revenue
Capital
T
otal
Return/(loss) after taxation attributable
to ordinary Shareholders (£)
(23,216)
(225,409)
(248,625)
72,302
1,315,606
1,387,908
W
eighted average number of ordinary
shares in issue (excluding shares held
in T
reasury)
4,772,049
4,772,049
(Loss)/return per ordinary share basic
and diluted (pence)
(0.49)
(4.72)
(5.21)
1.51
27.57
29.08
7.
DIVIDENDS PER ORDINAR
Y SHARE
Amounts recognised as distributions to equity holders in the year
.
Y
ear ended
30 June 2022
£
Y
ear ended
30 June 2021
£
Paid per Ordinary shar
e in respect of the prior period:
Fourth interim dividend of 0.00p (2021: 1.00p)
–
47,720
In respect of the year
under review:
First interim dividend of 0.00p (2021: 1.00p)
–
47,720
Second interim dividend of 0.00p (2021: 1.00p)
–
47,721
–
143,161
Unclaimed dividends in respect of prior periods clawed back after 12 years
(15,012)
–
T
otal
(15,012)
143,161
No dividend will be declared in respect of the year under review
.
49
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
8.
INVESTMENTS
Group
Company
2022
£
2021
£
2022
£
2021
£
Investments held at fair value thr
ough prot or loss
Opening book cost
15,354,823
16,538,418
15,375,1
15
16,571,760
Opening net investment holding gains/(losses)
264,041
(1,720,058)
243,219
(1,754,581)
Opening valuation
15,618,864
14,818,360
15,618,334
14,817,179
Movements in the year:
Purchases at cost
3,443,998
13,607,771
3,443,998
13,607,771
Sales proceeds
(3,389,627)
(14,122,961)
(3,389,627)
(14,109,336)
Realised gains/(losses) on sales
219,171
(668,405)
219,171
(695,080)
Permanent diminution*
(541,006)
–
(541,006)
–
Unrealised gains in the year
93,843
1,984,099
93,749
1,997,800
Closing valuation
15,445,243
15,618,864
15,444,619
15,618,334
Being:
Book cost
15,087,359
15,354,823
15,107,651
15,375,1
15
Net investment holding gains
357,884
264,041
336,968
243,219
15,445,243
15,618,864
15,444,619
15,618,334
* The Company has provided for a permanent diminution in the value of its holding in Lukoil GDR.
Group
Company
2022
£
2021
£
2022
£
2021
£
Summary of capital gains/(losses)
Realised gains/(losses) on sales
219,171
(668,405)
219,171
(695,080)
Permanent diminution
(541,006)
–
(541,006)
–
Unrealised gains in the year
93,843
1,984,099
93,749
1,997,800
(227,992)
1,315,694
(228,086)
1,302,720
Group
Company
2022
£
2021
£
2022
£
2021
£
T
ransaction costs
Costs on purchases
7,339
24,721
7,339
24,721
Costs on sales
5,405
20,698
5,405
20,698
12,744
45,419
12,744
45,419
Reconciliation of cash movements in investment transactions
The difference between the purchases in note 8 of £3,443,998 and that shown in the Cash Flow Statement on page 40 is
£136,747 which is represented by the payment of the trade outstanding at 30 June 2021 of £165,529, the scrip dividend in
Hal T
rust of £30,376 and an exchange loss of £1,594.
The difference between the sales proceeds in note 8 of £3,389,627 and that shown in the Cash Flow Statement on page
40 is £359,306 which is represented by the receipt of the trade outstanding at 30 June 2021 of £360,797 and an exchange
loss of £1,491.
50
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
8. INVESTMENTS
(continued)
Fair V
alue Hierarchy
Fair value is the amount at which an asset could be sold in an ordinary transaction between market participants at the
measurement date, other than a forced or liquidation sale. The Group measures fair values using the following hierarchy
that reects the signicance of the inputs used in making the measurements.
Categorisation
within
the
hierarchy
has been
determined
on
the
basis of
the
lowest
level
input that
is
signicant
to
the fair
value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices, unadjusted in active markets for identical assets and liabilities.
Level 2 – valued by reference to valuation techniques using observable inputs for the asset or liability other than quoted
prices included in Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data for the
asset or liability
.
The table below
sets out fair
value measurement of nancial instruments
as at 30
June 2022, by the level
in the fair
value
hierarchy into which the fair value measurement is categorised.
Group
At 30 June 2022
Level 1
£
Level 2
£
Level 3
£
T
otal
£
Financial assets at fair value thr
ough prot or loss:
Equities
10,814,305
–
61,152
10,875,457
Exchange traded commodities
4,569,786
–
–
4,569,786
15,384,091
–
61,152
15,445,243
Group
At 30 June 2021
Level 1
£
Level 2
£
Level 3
£
T
otal
£
Financial assets at fair value thr
ough prot or loss:
Equities
10,852,907
–
594,320
11,447,227
Exchange traded commodities
4,109,137
–
–
4,109,137
Fixed interest-bearing securities
62,500
–
-
62,500
15,024,544
–
594,320
15,618,864
There were no transfers between levels during the current or prior year
.
The valuation techniques used by the Group are set out in the
Accounting Policies in Note 1.
51
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
8. INVESTMENTS
(continued)
V
aluation pr
ocess for Level 2 investments
Investments
classied
within
level
2
are
valued
by
reference
to
quoted
prices
but
not
being
actively
traded
have
been
treated as level 2.
V
aluation pr
ocess for Level 3 investments
Investments
classied
within Level
3
comprise
those
valued by
reference
to
an
indicative price
list
of
an
independent third
party broker
, but the said price list is not sufciently denitive or
observable/publicly available, so as to meet the
criteria
for a level 2 categorisation.
If the value of the level 3 investments were to increase or decrease by 10%, while all the other variables remained constant,
the net assets and net prot available to Shareholders would have increased/decreased by £6,1
15 (2021: £59,432).
Reconciliation of Level 3 investments
The following table summarises Level 3 investments that were accounted for at fair value for the year ended
30 June 2022.
Group and Company
Financial assets at fair value
through pr
ot or loss
£
Opening fair value
594,320
Purchases
–
Sales proceeds
(573,939)
T
otal gains/(losses) included in (losses)/gains on investments
in the Consolidated Income Statement
– on assets sold
55,099
– on assets held at the year end
(14,328)
Closing balance
61,152
9.
INVESTMENT IN SUBSIDIARIES
Company
30 June 2022
£
Company
30 June 2021
£
At cost
5,410,552
5,410,552
Provision for diminution in value
(4,547,896)
(4,547,896)
Net value
862,656
862,656
At 30 June 2022, the Company held interests in the following subsidiary companies:
Country of
Incorporation
% share of
capital held
% share of
voting rights
Nature of business
Abport Limited
England
100%
100%
Investment dealing company
New Centurion T
rust Limited
England
100%
100%
Investment dealing company
The registered ofce of the Subsidiaries is the same as that of the Company
.
10.
SUBST
ANTIAL
SHARE INTERESTS
The
Company
has
no
notied
interests
in
3%
or
more
of
the
voting
rights
of
any
companies
at
30
June
2022
(30
June
2021: nil).
52
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
1
1. TRADE
AND OTHER RECEIV
ABLES
Group
Company
2022
£
2021
£
2022
£
2021
£
Amounts due from subsidiaries
–
–
58,739
46,151
Accrued income
–
8,814
–
8,814
Dividends receivable
12,035
4,602
12,035
4,602
T
axation recoverable
641
8,978
641
8,978
Amounts due from brokers
–
360,797
–
360,797
Other receivables
17,682
5,838
17,682
5,838
30,358
389,029
89,097
435,180
The carrying amount of such receivables approximates to their fair value. T
rade and other receivables are not past due at
30 June 2022.
12.
TRADE
AND OTHER P
A
Y
ABLES
Group
Company
2022
£
2021
£
2022
£
2021
£
Preference dividends payable to the Company’
s wholly
owned subsidiary
–
–
1,549
1,377
Amounts due to subsidiaries
–
–
101,533
101,533
Investment management fees
–
1,678
–
1,678
Amounts due to brokers
–
165,529
–
165,529
T
rade payables and accruals
106,002
99,682
94,673
90,266
106,002
266,889
197,755
360,383
13.
ORDINAR
Y SHARE CAPIT
AL
Group and Company
2022
Group and Company
2021
Number
£
Number
£
Issued allotted and fully paid:
Ordinary shares of 50p each
4,772,049
2,386,025
4,772,049
2,386,025
The ordinary shares entitle the holders to receive all ordinary dividends and all remaining assets on a winding up, after the
xed rate preference shares have been satised in full.
The Company does not hold any ordinary shares in T
reasury (2021: None).
14.
ISSUED PREFERENCE SHARE CAPIT
AL
Group
Company
2022
£
2021
£
2022
£
2021
£
Issued preference share of 50p each
–
–
858,783
858,783
The
1,717,565
xed
rate
preference
shares
are
non-voting,
entitled
to
receive
a
cumulative
dividend
of
0.01p
per
share
per annum, and are entitled to receive their nominal value of 50p, on a distribution of assets or a winding up. The whole
of the issue is held by New Centurion T
rust Limited, a wholly owned subsidiary of the Company
.
The
Directors
do
not
consider
the
fair
values
of
the
issued
preference
share
capital
to be
signicantly different
from
the
carrying values.
53
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
15.
NET
ASSET
V
ALUE PER ORDINARY
SHARE
The NA
V per ordinary share is calculated as follows:
2022
£
2021
£
Net Assets
16,048,191
16,281,804
Ordinary shares in issue
4,772,049
4,772,049
NA
V per ordinary share
336.30p
341.19p
The underlying investments of the wholly owned subsidiary New Centurion T
rust Limited comprise issued preference
share capital, as discussed in Note 14, in the Company and, being effectively eliminated on consolidation, the valuation
thereof does not impact the NA
V attributable to ordinary Shareholders.
16.
FINANCIAL
INSTRUMENTS AND ASSOCIA
TED
RISKS
Investment Objective and Policy
At the
Annual General Meeting on 4 November 2020, Shareholders voted to amend the Company’
s Investment Objective
and Policy to that shown below
.
The Company’
s investment objective is to protect the purchasing power of its capital in real terms, and to participate in
enduring economic activities which lend themselves to genuine capital accumulation and wealth creation.
Risks
The Group’
s nancial risk management can be found in the Strategic Report on pages 8 and 9.
The Group’
s nancial
instruments comprise
securities, cash balances,
receivables and payables.
They are
classied in the
following categories:
•
those to be measured subsequently at fair value through prot or loss; and
•
those to be measured at amortised cost.
The nancial assets held at amortised cost include trade and other receivables, cash and cash equivalents.
The main risks identied arising from the Group’
s nancial instruments are:
a)
market price risk, including currency risk, interest rate risk and other price risk;
b)
liquidity risk; and
c)
credit risk.
The Board reviews and agrees policies for managing each of these risks, which are summarised below
.
Market price risk
Market
price risk
arises
mainly
from uncertainty
about
future
prices of
nancial
instruments
used in
the
Group’
s
business.
It represents the potential loss the Group might suffer through holding market positions by way of price
movements,
interest rate movements and exchange rate movements. The Board
assesses the exposure to market price risk when
making each investment decision and monitor these risks on the whole of the investment portfolio on an ongoing basis.
54
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
16.
FINANCIAL
INSTRUMENTS AND ASSOCIA
TED
RISKS
(continued)
Curr
ency risk
The
Group’
s
total
return
and
net
assets
can
be
materially
affected
by
currency
translation
movements
as
a
signicant
proportion of the Company’
s assets are denominated in currencies other than Sterling, which is the Group’
s functional
currency
. It is not the Group’
s policy to hedge this currency risk.
The
revenue
account
is
subject
to
currency
uctuation
arising
on
overseas
income.
The
Group
does
not
hedge
this
currency
risk.
Foreign currency exposure by currency of denomination at the Balance Sheet date:
Group
30 June 2022
Group
30 June 2021
Overseas
investments
£
Other net
assets/
(liabilities)
£
T
otal
£
Overseas
investments
£
Other net
assets/
(liabilities)
£
T
otal
£
Australian Dollar
624
–
624
530
–
530
Canadian Dollar
1,510,090
3,257
1,513,347
1,190,448
(87,454)
1,102,994
Euro
6,031,660
214,098
6,245,758
4,417,968
1,770
4,419,738
Norwegian Krone
630,026
–
630,026
717,698
–
717,698
Swiss Franc
902,477
–
902,477
974,678
–
974,678
US Dollar
5,225,348
1,638
5,226,986
5,285,236
192,535
5,477,771
14,300,225
218,993
14,519,218
12,586,558
106,851
12,693,409
Inter
est rate risk
The
Group’
s
nancial
assets
and
liabilities,
include
cash,
equity
shares,
preference
shares
and
xed
interest
stocks.
As
the
majority
of
the
Group’
s
nancial
assets
and
liabilities
are
non-interest
bearing
the
direct
exposure
to
interest
rates
is
not
material.
The
impact
of
movements
would
not
signicantly
affect
the
net
assets
attributable
to
ordinary
Shareholders
or
the
total
prot.
Other price risk
Other price risk arises from changes in market prices other than those arising from currency risk or interest rate risk.
The Board manages the risks inherent in the investment portfolio by maintaining a spread of investments across different
sectors and monitoring market prices throughout the year
. The Board meets regularly in order to review investment
performance and its investment strategy
.
Liquidity risk
This is the risk that
that the Group will encounter difculty in meeting
its obligations associated with
nancial liabilities.
All liabilities are due within one year
.
The Group invests in a spread of investments, including physical gold, which are traded on recognised stock markets and
which can be readily realised for cash.
Cr
edit risk
The
Group
does
not
have
any
signicant
exposure
to
credit
risk
arising
from
one
individual
party
.
Credit
risk
is
spread
across a
number
of
counterparties,
each
having
an
immaterial
effect on
the
Group’
s
cash
ows
should
a
default
happen.
The Group assesses its debtors from time to time to ensure they are neither past due or impaired.
55
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
16.
FINANCIAL
INSTRUMENTS AND ASSOCIA
TED
RISKS
(continued)
The maximum exposure of nancial assets to credit risk at the Balance Sheet date was as follows:
Group
Company
2022
£
2021
£
2022
£
2021
£
Financial assets neither past due or
impaired
Fixed interest securities
–
62,500
–
62,500
Preference shares
61,152
594,320
61,152
594,320
T
rade and other receivables
30,358
389,029
89,097
435,180
Cash and cash equivalents
678,592
540,800
663,863
526,071
770,102
1,586,649
814,1
12
1,618,071
Sensitivity Analysis
The Board believes that the Group’
s assets are mainly exposed to market price risk and currency risk.
The table below shows the impact on prot and net
assets if overall shares prices rose or fell by 5%
at the Balance Sheet
date with all other variables held constant:
Group
2022
Prot and net assets
2021
Prot and net assets
increase
(decrease)
increase
(decrease)
If overall prices rose/fell by 5%:
– on share prices (£)
543,773
(543,773)
575,486
(575,486)
– on exchange traded commodities
228,489
(228,489)
205,457
(205,457)
– on earnings and net assets (£)
772,262
(772,262)
780,943
(780,943)
– in earnings net asset value per Ordinary share (pence)
16.18
(16.18)
16.36
(16.36)
The
table
below
shows
the
impact
on
prot
and
net
assets
if
Sterling
had
moved
by
5%
against
all
currencies
at
the
Balance Sheet date with all other variables held constant:
Group
2022
Prot and net assets
2021
Prot and net assets
weakening
£
(strengthening)
£
weakening
£
(strengthening)
£
If Sterling had moved by 5%:
Euro
328,724
(297,418)
232,618
(210,464)
Swiss Franc
47,499
(42,975)
51,299
(46,413)
Norwegian Krone
33,159
(30,001)
37,774
(34,176)
Australian Dollar
33
(30)
28
(25)
Canadian Dollar
79,650
(72,065)
58,052
(52,524)
US Dollar
275,104
(248,904)
288,304
(260,846)
– on earnings and net assets
764,169
(691,393)
668,075
(604,448)
– on earnings and net asset value per Ordinary share (pence)
16.01
(14.49)
14.00
(12.67)
Assets excluding ETCs
523,654
(473,783)
451,804
(408,775)
ETCs
240,515
(217,610)
216,271
(195,673)
56
NOTES T
O THE FINANCIAL
ST
A
TEMENTS
continued
For the year ended 30 June 2022
17.
CAPIT
AL
MANAGEMENT POLICIES
Capital is managed so as to maximise the return to Shareholders while maintaining a capital base to allow the Group to
operate effectively
. Capital is managed on a consolidated basis and to ensure that the Group will be able to continue as a
going concern.
In order to maintain or adjust the capital structure, the Group may pay dividends to Shareholders, return capital to
Shareholders, issue new shares or sell securities to reduce debt.
The Group had no debt during the years to 30 June 2022 or 30 June 2021.
18.
RELA
TED P
AR
TY
TRANSACTIONS
Fiske plc, was paid a fee in respect of the Investment Management services provided to the Company until the termination
of the contract on 5 May 2021.
The amounts previously paid to the Investment Manager
, together with the Investment Management
Agreement, are
disclosed in note 3. Investment Management fees for the year amounted to £nil (2021: £96,825). In addition, £8,247
(2021: £5,459) was paid to Fiske plc pursuant to a custody agreement.
As at the year end, £2,005 (2021: £3,745) was payable to Fiske plc under the custody agreement.
Key Management Personnel
The
Board
currently
consists
of
ve
non-executive
Directors
all
of
whom,
with
the
exception
of
Mr
Perrin,
who
is
a
non-executive
Director
of
Fiske
plc,
the
Company's
custodian
and
until
4
November
2020
the
investment
manager
,
are
considered to be independent by the Board. Messrs Dighé, Cleverly and W
eeks hold directorships or positions of senior
management
within Edelweiss
Holdings
plc (“Edelweiss”),
who
became
a signicant
Shareholder
in the
Company
during
the previous year
. For the year ended 30 June 2022, all Directors, including the Chairman, received an annual fee of
£20,000. Further information can be found within the Directors' Remuneration Report on page 25.
The Directors did not receive any other form of remuneration and at the year end, there were no outstanding fees payable
to Directors (2021: £nil).
There were no other related party transactions during the current or previous year
.
19.
POST BALANCE SHEET
EVENTS
There are no post balance sheet events requiring disclosure.
20.
UL
TIMA
TE CONTROLLING P
AR
TY
The Directors consider there is no overall controlling party
.
57
FRAUD W
ARNING
Fraudsters use persuasive and high-pressure tactics to lure investors into scams and we are aware of entities from time to
time purporting to be The Investment Company plc.
They may offer to sell shares that turn out to be worthless or non-
existent,
or
to
buy
shares
at
an
inated
price
in
return
for
an
upfront
payment.
While
high
prots
are
promised,
if
you
buy or sell shares in this way you will probably lose your money
. Detailed advice on how to avoid and report potential
investment scams is available on the FCA
website: www
.fca.org.uk/scamsmart.
The Company has also been made aware of attempts to issue documentation in the Company’
s name which is not
legitimate.
Anyone wishing to verify the authenticity of any documentation should contact the Company Secretary on
01392 487056 or tic@iscaadmin.co.uk.
The
Company
has
also
been
made
aware
of
a
website
purporting
to
be
the
Company's
website
which
is
not
legitimate.
Anyone wishing to verify the authenticity of the website should contact the Company Secretary on 01392 487056 or
tic@iscaadmin.co.uk.
SHAREHOLDER INFORMA
TION
58
Notice is hereby given that the 156th
Annual General Meeting of the Company will be held at the City of London Club,
19
Old Broad
Street,
London EC2N
1DS on
28
October 2022
at
11.00am
to
consider and,
if
thought t,
pass the
following
resolutions, of which numbers 1 to 9 will be proposed as ordinary resolutions and numbers 10 to 12 as special resolutions.
Please note that if Government advice concerning public meetings and gatherings were to change the arrangements
for the
AGM may be altered or
changed, details of any changes will be posted to the Company’
s website.
Ordinary Business
Resolution 1 – Or
dinary Resolution
T
o
receive
and
adopt
the
Strategic
Report,
Reports
of
the
Directors
and Auditor and
the
audited
nancial
statements
for
the year ended 30 June 2022.
Resolution 2 – Or
dinary Resolution
T
o receive and approve the Directors’
Remuneration Report.
Resolution 3 – Or
dinary Resolution
T
o re-elect I.R. Dighé as a Director of the Company
.
Resolution 4 – Or
dinary Resolution
T
o re-elect T
.M. Metcalfe as a Director of the Company
.
Resolution 5 – Or
dinary Resolution
T
o re-elect M. H. W
. Perrin as a Director of the Company
.
Resolution 6 – Or
dinary Resolution
T
o re-elect M.J. W
eeks as a Director of the Company
.
Resolution 7 – Or
dinary Resolution
T
o re-appoint PKF Littlejohn
LLP
as
Auditor of the
Company to
hold ofce from
the conclusion
of this meeting
until the
conclusion of the next meeting at which nancial statements are laid before the Company
.
Resolution 8 – Or
dinary Resolution
T
o authorise the Directors to determine the remuneration of the
Auditor
.
Resolution 9 – Or
dinary Resolution
THA
T
, in substitution for any existing authorities, the Directors be and are hereby generally and unconditionally authorised in
accordance with Section 551 of the Companies
Act 2006 (“the
Act”) to exercise all the powers of the Company to allot ordinary
shares of 50 pence each in the capital of the Company (“ordinary shares”) up to an aggregate nominal amount of £477,204
(being 20% of the issued ordinary share capital of the Company at the date of this Notice, during the period commencing on
the date of the passing of this Resolution and expiring at the conclusion of the
Annual General Meeting of the Company to be
held in 2023 (unless previously renewed, varied or revoked by the Company in general meeting) (the “Section 551 period”),
but so that the Company may
, at any time prior to the expiry of the Section 551 period, make offers or agreements which
would or might require ordinary shares to be allotted after the expiry of the Section 551 period and the Directors may allot
ordinary shares in pursuance of such offers or agreements as if the authority had not expired.
NOTICE OF
ANNUAL
GENERAL
MEETING
59
Resolution 10 – Special Resolution
THA
T
, in substitution for any existing authorities, subject to the passing of Resolution 9, the Directors be and they are hereby
empowered, in accordance with Sections 570 and 573 of the
Act, to allot ordinary shares for cash pursuant to the authority
conferred on the Directors by Resolution 9 above, and to sell ordinary shares from T
reasury for cash as if Section 561(1) of
the
Act did not apply to any such allotment or sale, up to an aggregate nominal amount of £477,204 (being 20% of the issued
ordinary share capital of the Company at the date of this Notice, such power to expire at the conclusion of the
Annual General
Meeting of the Company to be held in 2023 (unless previously renewed, varied or revoked by the Company in general
meeting) save that the Company may
, at any time prior to the expiry of such power, make an of
fer or enter into an agreement
which would or might require ordinary shares to be allotted or sold after the expiry of such power and the Directors may allot
or sell ordinary shares in pursuance of such an offer or agreement as if such power had not expired.
Resolution 1
1 – Special Resolution
THA
T
, the Company is hereby generally and unconditionally authorised in accordance with Section 701 of the
Act to
make market purchases (within the meaning of Section 693(4) of the
Act) of ordinary shares of 50p each in the capital of
the Company (“ordinary shares”) provided that:
a)
the maximum number of ordinary shares hereby authorised to be purchased is 715,330 (representing 14.99%
of the ordinary shares in issue, excluding shares held in T
reasury at the date of the passing of this Resolution);
b)
the minimum price which may be paid for each ordinary share is 50p;
c)
the maximum price which may be paid for each Ordinary Share shall not be more than the higher of: (i) an
amount equal to 105% of the average of the middle market quotations of ordinary shares taken from the Daily
Ofcial List
of
the
London
Stock
Exchange
for the
ve
business
days
immediately
preceding
the day
on
which
the contract of purchase is made; and (ii) the higher of the price of the last independent trade in the ordinary
shares and the highest then current independent bid for the ordinary shares on the London Stock Exchange;
d)
this authority will (unless previously renewed, varied or revoked by the Company in general meeting) expire at
the conclusion of the
Annual General Meeting of the Company to be held in 2023;
e)
the Company may make a contract of purchase for ordinary shares under this authority before this authority
expires which will or may be executed wholly or partly after its expiration; and
f)
any ordinary shares bought back under the authority hereby granted may
, at the discretion of the Directors, be
cancelled or held in T
reasury and if held in T
reasury may be resold from T
reasury or cancelled at the discretion
of the Directors.
Special Business
Resolution 12 – Special Resolution
THA
T
, a General Meeting other than an
Annual General Meeting may be called on not less than 14 clear days’
notice.
By order of the Board
ISCA
Administration Services Limited
Suite 8, Bridge House, Courtenay Street, Newton
Abbot, Devon TQ12 2QS
22 September 2022
NOTICE OF
ANNUAL
GENERAL
MEETING
continued
60
NOTICE OF
ANNUAL
GENERAL
MEETING
continued
NOTES
Right to appoint a pr
oxy
1.
A
member entitled to attend and vote at this meeting may appoint one or more persons as his/her proxy to
attend, speak and vote on his/her behalf at the meeting.
A
proxy does not need to be a member of the Company
.
A
member may appoint more than one proxy in relation to a meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares held by that member
.
2.
A
proxy form which may be used to make such appointment and give proxy directions accompanies this notice. If
you do not receive a proxy form and believe that you should have one, or if you require additional proxy forms in
order to appoint more than one proxy
, please contact the Registrar on 0371 384 2030 or
, if dialling internationally
,
on +44 (0) 121 415 7047. The helpline is open Monday to Friday 8.30am to 5.30pm, excluding public holidays
in England and W
ales.
Pr
ocedure for appointing a pr
oxy
3.
T
o be valid, the proxy form, together with any power of attorney or other authority under which it is signed or
a
notarially
certied
copy
thereof,
should
be
lodged
at
the
ofce
of
the
Company’
s
Registrar
,
Equiniti
Limited,
Aspect House, Spencer Road, Lancing, W
est Sussex BN99 6DA
and must be received by post or (during normal
business hours only) by hand at Equiniti Limited,
Aspect House, Spencer Road, Lancing W
est Sussex no later
than 48 hours (excluding non-working days) before the time of the meeting or any adjournment thereof.
4.
The return of a completed proxy form will not preclude a member from attending the
Annual General Meeting
and voting in person if he or she wishes to do so. The termination of the authority
of a person to act as proxy must
be notied to the Company in writing.
Nominated persons
5.
Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies
Act 2006
to enjoy information rights (a “Nominated Person”) may
, under an agreement between him/her and the member
by whom he or she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy
for the
Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish
to exercise it, he/she may
, under any such agreement, have a right to give instructions to the member as to the
exercise of voting rights.
6.
The statement of the rights of members in relation to the appointment of proxies in notes 1 and 3 above does
not apply to Nominated Persons. The rights described in those notes can only be exercised by members of the
Company
.
Recor
d date and entitlement to vote
7.
T
o be entitled to attend and vote at the
Annual General Meeting (and for the purpose of the determination by the
Company of the votes they may cast), members must be entered on the Company’
s register of members at 18:30
on 26 October 2022 (or
, in the event of any adjournment, 48 hours before the time of the adjourned meeting).
Changes to the register of members after the relevant deadline will be disregarded in determining the right of any
person to attend and vote at the meeting. Only holders of ordinary shares are entitled to attend and vote at the
Annual General Meeting.
61
NOTICE OF
ANNUAL
GENERAL
MEETING
continued
8.
As at 21 September 2022, (the business day prior to the publication of this notice), the Company’
s issued share
capital amounted to 4,772,049 ordinary shares carrying one vote each. The total voting rights in the Company as
at 21 September 2022 were 4,772,049 votes.
Members’
rights
9.
In accordance with Section 319A
of the Companies
Act 2006, the Company must cause any question relating
to the business being dealt with at the meeting put by a member attending the meeting to be answered. No such
answer need be given if:
a)
to do so would:
(i)
interfere unduly with the preparation for the meeting, or
(ii)
involve the disclosure of condential information;
b)
the answer has already been given on a website in the form of an answer to a question; or
c)
it is undesirable in the interests of the Company or the good order of the meeting that the question be
answered.
10.
A
corporation which is a member can appoint one or more corporate representatives who may exercise, on its
behalf, all its powers as a member provided that no more than one corporate representative exercises powers over
the same share.
1
1.
Members should note that it is possible that, pursuant to requests made by members of the Company under
Section 527 of the Companies
Act 2006, the Company may be required to publish on a website a statement
setting out any matter relating to: (i) the audit of the Company’
s accounts (including the auditor
’
s report and the
conduct of the audit) that are to be laid before the
Annual General Meeting; or (ii) any circumstances connected
with an
auditor of
the Company
ceasing to
hold ofce
since the
previous meeting
at which
annual accounts
and
reports were laid in accordance with Section 437 of the Companies
Act 2006.The Company may not require the
members requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of
the Companies
Act 2006.Where the Company is required to place a statement on a website under Section 527 of
the Companies
Act 2006, it must forward the statement to the Company’
s auditor not later than the time when
it makes the statement available on the website. The business which may
be dealt with at the
Annual General
Meeting includes any statement that the Company has been required under Section 527 of the Companies
Act
2006 to publish on a website.
12.
Members satisfying the thresholds in Section 338 of the Companies
Act 2006 may require the Company to give,
to members of the Company entitled to receive notice of the
Annual General Meeting, notice of a resolution
which those members intend to move (and which may properly be moved) at the
Annual General Meeting.
A
resolution may properly be moved at the
Annual General Meeting unless: (i) it would, if passed, be ineffective
(whether by reason of any inconsistency with any enactment or the Company’
s constitution or otherwise); (ii) it
is defamatory of any person; or (iii) it is frivolous or vexatious.
A
request made pursuant to this right may be in
hard copy or electronic form, must identify the resolution of which notice is to be given, must be authenticated
by the person(s) making it and must be received by the Company not later than six weeks before the date of the
Annual General Meeting.
13.
Members satisfying the thresholds in Section 338A
of the Companies
Act 2006 may request the Company
to include in the business to be dealt with at the
Annual General Meeting any matter (other than a proposed
resolution) which may properly be included in the business at the
Annual General Meeting.
A
matter may properly
be included in the business at the
Annual General Meeting unless (i) it is defamatory of any person or (ii) it is
frivolous or vexatious.
A
request made pursuant to this right may be in hard copy or electronic form, must identify
grounds for the request, must be authenticated by the person(s) making it and must be received by the Company
not later than six weeks before the date of the
Annual General Meeting.
62
Electr
onic Proxy
Appointment through CREST
14.
CREST member
s who wish to appoint a proxy or proxies, or amend an instruction to a previously appointed
proxy
, through the CREST electronic proxy appointment service may do so for the
Annual General Meeting to
be held at 1
1.00am on 28 October 2022 and any adjournment(s) thereof, by using the procedures described in
the CREST manual (available via
www
.euroclear
.com
). CREST personal members or other CREST
sponsored
members, and those CREST members who have appointed (a) voting service provider(s), should refer to their
CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a CREST
Proxy Instruction) must be properly authenticated in accordance with Euroclear UK
&
Ireland Limited
(Euroclear)’
s
specications and
must
contain the
information
required
for such
instructions,
as
described in the CREST manual.
The message, regardless of whether it relates to the appointment of a proxy or
to an instruction to a previously appointed proxy
, must be transmitted so as to be received by the issuer
’
s agent
(ID: RA19) by no later than 1
1.00am on 26 October 2022.
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to
the message by the CREST
Applications Host) from which the issuer
’
s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST
.
CREST members and, where applicable, their CREST
sponsors or voting service provider(s) should note that
Euroclear does not make available special procedures in CREST for any particular messages. Normal system
timings and limitations will therefore apply in relation to the input of CREST
proxy instructions. It is the
responsibility of the CREST member concerned to take (or
, if the CREST member is a CREST personal member
or sponsored member or has appointed (a) voting service provider(s), to procure that his/her CREST
sponsor or
voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this connection, CREST
members and, where applicable,
their CREST sponsors or voting service provider(s) is/are referred, in particular
, to those sections of the CREST
manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST proxy instruction in the circumstances
set out in Regulation 35(5)
(a) of the Uncerticated Securities Regulations 2001.
Documents
15.
The
Annual Report incorporating this Notice of
Annual General Meeting and, if applicable, any members’
statements, members’
resolutions or members’
matters of business received by the Company after the dates of
this Notice will be available on the Company’
s website, https://theinvestmentcompanyplc.co.uk.
16.
A
copy of the
Directors’
service
contracts will be
available for
inspection at the
registered ofce of the
Company
during usual business hours on any weekday (except weekends and public holidays) until the date of the meeting
and at the place of the meeting for a period of fteen minutes prior to and during the meeting.
Registered in England and W
ales No. 0004205
NOTICE OF
ANNUAL
GENERAL
MEETING
continued
63
NOTES
64
NOTES