TIDMNAS
RNS Number : 1377Y
North Atlantic Smlr Co Inv Tst PLC
10 May 2021
North Atlantic Smaller Companies Investment Trust plc
Annual Report for the year ended 31 January 2021
The financial information set out in this announcement does not
constitute the Company's statutory financial statements in
accordance with section 434 Companies Act 2006 for the year ended
31 January 2021, but has been extracted from the statutory
financial statements for the year ended 31 January 2021 which were
approved by the Board of Directors on 10 May 2021 and will be
delivered to the Registrar of Companies in due course. The
Independent Auditor's Report on those financial statements was
unqualified and did not contain any emphasis of matter nor
statements under s 498(2) and (3) of the Companies Act 2006. The
statutory accounts for the year ended 31 January 2020 have been
delivered to the Registrar of Companies and received an Independent
Auditor's report which was unqualified and did not contain any
emphasis of matter nor statements under s 498(2) and (3) of the
Companies Act 2006. The annual financial report will be posted to
shareholders later this month. Copies of the Annual Report will
then be available on the Company's website www.nascit.co.uk and
from the Company Secretary.
objective of the company and financial highlights
The objective of the Company is to provide capital appreciation
through investment in a portfolio of smaller companies principally
based in countries bordering the North Atlantic Ocean.
31 January 2021 % change 31 January 2020 31 January 2019 31 January 2018 31 January 2017
----------------- ---------------- --------- ---------------- ---------------- ---------------- ----------------
return
Return for the
year (GBP'000) 130,078 31.6% 98,852 35,418 70,817 32,038
Basic return per
5p Ordinary
Share:*
- Revenue 3.76 (90.9%) 41.24 40.58 35.62 8.97
- Capital 916.57 40.4% 652.92 205.57 455.29 212.95
Final Dividend
per 5p Ordinary
Share
(declared) nil 30.0p 30.0p nil nil
assets
Net assets
(GBP'000) 742,230 19.6% 620,723 531,425 499,423 428,606
Net asset value
("NAV") per 5p
Ordinary
Share:**
Basic 5,292p 20.7% 4,384p 3,710p 3,462p 2,971p
Diluted 5,292p 20.7% 4,384p 3,708p 3,458p 2,968p
Basic adjusted 5,355p 18.9% 4,505p 3,776p 3,529p 3,036p
Diluted adjusted 5,355p 18.9% 4,505p 3,774p 3,525p 3,033p
Mid-market price
of the 5p
Ordinary Shares 3,850.0p 13.2% 3,400p 2,910p 2,870p 2,455p
discount to
diluted net
asset value 27.2% 22.4% 21.5% 17.0% 17.3%
discount to
diluted
adjusted net
asset value 28.1% 24.5% 22.9% 18.6% 19.1%
----------------- ---------------- --------- ---------------- ---------------- ---------------- ----------------
indices and
exchange rates
at 31 January
Standard &
Poor's 500
Composite Index 3,714.2 15.2% 3,225.5 2,704.1 2,823.8 2,278.9
Russell 2000
Index 2,073.6 28.5% 1,614.1 1,499.4 1,575.0 1,352.3
US
Dollar/Sterling
exchange rate 1.37295 4.1% 1.31830 1.31505 1.4221 1.2581
Standard &
Poor's 500
Composite Index
- Sterling
adjusted 2,709.5 10.9% 2,442.5 2,062.8 1,989.9 1,811.7
Russell 2000 -
Sterling
adjusted 1,512.7 23.8% 1,222.2 1,143.8 1,109.9 1,075.1
----------------- ---------------- --------- ---------------- ---------------- ---------------- ----------------
* Please refer to note 7 for details on how the basic return per
5p Ordinary Share is calculated.
** Please refer to note 7 for details on how the net asset value
per 5p Ordinary Share is calculated.
Adjusted to reflect Oryx International Growth Fund Limited
("Oryx") under the equity method of accounting, which is how the
Company previously accounted for its share of Oryx, prior to the
adoption of IFRS 10. This is useful to the shareholder as it shows
the NAV based on valuing Oryx at NAV. See note 7.
chairman's statement
It is pleasing to report that despite a tumultuous year
resulting from the COVID pandemic the net asset value ("NAV") per
share rose during the year to 31 January 2021 by 20.7% as compared
to a rise in the sterling adjusted S&P Composite of 10.9%.
While the capital return of the Company was GBP130 million
(2020: GBP93 million), the revenue account showed a return after
tax of GBP531,000 (2020: GBP5,872,000). The decline in revenue can
be directly attributed to the cessation in dividends in some of our
major investments as a consequence of the COVID crisis as well as a
reduction in loan note interest following the repayment of the
SourceBio loan. The Directors do not therefore recommend a dividend
in respect of the year to end January 2021 (2020 30p).
During the year, 135,482 shares were purchased for cancellation
at a significant discount to NAV. This benefits all long-term
shareholders by creating an immediate uplift for the NAV. At the
forthcoming AGM shareholders will once again be asked to support a
whitewash proposal allowing the company to continue to repurchase
shares without requiring our Chief Executive and persons and
companies presumed to be acting in concert with him to make a
mandatory offer under Rule 9 of The Takeover Code for the Company.
This proposal and the background surrounding it are outlined in a
separate circular being sent to shareholders. The passing of the
resolution to support this proposal assists the liquidity of those
shareholders wishing to sell while enabling the company to add
value to the ongoing NAV by buying back its own shares. Last year
the AGM approved the whitewash with opposing votes of 32.57% of
votes cast (the largest shareholder being disqualified from
voting). We continue to engage with those voting against the
resolution but have found little interest in any meaningful
discourse. Most of the votes cast against the whitewash resolution
appear to have been determined by the ESG (Environmental, Social
and Governance) departments of certain large nominees and
custodians. Their decisions, apparently made on general principle,
are not in my opinion in the interests of our shareholders and I
would appeal to beneficial shareholders to ensure that their votes
are cast in favour of Resolution 16.
Many of our businesses suffered to some extent with some being
shut down entirely for long periods of time. On the other hand, our
exposure to life science companies more than offset this which
resulted in a further year of progress. Brexit has now come and
gone and to date we have seen little or no impact on our
investments.
The outlook for the economy is for further volatility over the
coming year with weakness in the first half followed by a strong
recovery over the balance of the year as the vaccines finally (and
hopefully) contain the pandemic.
Equity markets have, in my opinion, already priced a recovery in
corporate profits into current valuations, which do not appear for
the most part to be particularly cheap. The core driver of equity
markets is therefore the continuing provision of liquidity by
central banks, with the only cloud coming perhaps from significant
fiscal stimulus combining with an increase in money velocity to
prompt some reversal of the deluge of monetary easing measures.
I am pleased to say that the Company continues to have
substantial cash balances and the majority of our investments have
no debt and healthy cash reserves. Although it is unlikely the
Company's NAV will perform as well in the year end to 31 January
2022, I am hopeful we can continue to see further progress in the
current year.
Peregrine Moncreiffe
Chairman
10 May 2021
investment manager's report
quoted portfolio UK
The year was very much a game of two halves. Substantial losses
in the period to 31 July 2020, followed by a substantial recovery
through to 31 January 2021. The Company was badly impacted through
its exposure to leisure related stocks and in particular the fall
in Ten Entertainment and Stobart Group resulted in a net loss to
the Company of approximately GBP30 million, as key parts of their
business were forced to close.
Fortunately, this was more than offset by the relatively high
weighting in Life Sciences with Ergomed (prior to sale), EKF,
Renalytix and Verici DX all performing notably well and
collectively adding nearly GBP90 million to the NAV. Augean and
Polar Capital rose modestly but the gain was offset by a fall in MJ
Gleeson.
Smaller holdings such as AssetCo, Sureserve and Signature
Aviation performed well and other holdings such as Frenkel Topping,
Bigblu Broadband, Tribal and Benchmark made modest progress.
Finally, it is pleasing to note that both Oryx International
("Oryx"), our largest holding, and Odyssean Investment Trust,
outperformed their benchmarks, in Oryx's case by a significant
amount.
quoted portfolio USA
The portfolio remains relatively modest and had no major impact
on the net asset value of the Company.
unquoted portfolio UK
Source Bioscience (previously Sherwood Holdings) went public
during the period and with accrued interest is estimated to have
added in total approximately GBP9 million to the net asset value.
Hamsard was also written up but the impact was offset by the need
to write down Specialist Components due to weak orders resulting
from the COVID Pandemic. Viking was also written up modestly with
further gains expected in the current year as the business
hopefully enters a liquidity event.
Finally, it was necessary to write down Jaguar Holdings Group an
inflight catering business as demands for its services collapsed
due to COVID impact on the airline industry.
unquoted portfolio USA
The standout performer of the year was the IPO of Telos in the
fourth quarter. In January 2021, the ordinary shares were valued at
little over GBP1 million. With sales following the IPO of over
GBP20 million and with the balance of the publicly listed shares
worth over GBP5 million the investment made an outstanding
contribution to the Company's performance in the year to 31 January
2021.
Performance Chemicals suffered due to the weak oil price but
remained EBITDA profitable. Coventbridge and Utitec made modest
progress again impeded by COVID issues. We do however expect
liquidity events from both the investments in the current financial
year which will boost both cash reserves and the net asset
value.
liquidity
Cash and US treasury bills started the year at GBP82 million and
fell initially as opportunity was taken to invest in companies
where we believed there had been an overreaction in the share price
compared to the intrinsic value of the business. Most recently
however, the IPO of Source, the partial sale of Assetco, the
partial sale of Signature following multiple ongoing bids and the
sale of most of the Telos position has resulted in cash and US
treasury bills at the end of January 2021 nearing GBP89 million.
This is expected to increase still further as the balance of the
Telos and Signature Aviation positions are realised.
Your Managers are constantly reviewing potential investment
opportunities but markets have had a major recovery and in our
opinion are running ahead of fundamentals even assuming a full
vaccine roll out over the course of the coming year.
Christopher Mills
Chief Executive & Investment Manager
10 May 2021
strategic report - sector analysis of investments at fair
value
as at 31 January
Europe United States United Kingdom Total Total
31 January 2021 31 January 2021 31 January 2021 31 January 2021 31 January 2020
equities, convertible securities & loan stocks as a % of total portfolio v
aluation % % % % %
--------------------------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Financial Services* - - 24.8 24.8 30.7
Pharmaceuticals and Health Care - 0.4 15.5 15.9 12.5
Industrial Goods & Services 1.2 2.6 8.2 12.0 14.6
Technology & Software - 1.1 10.0 11.1 4.4
Consumer Products and Services - - 8.8 8.8 -
Banks - 0.9 7.4 8.3 9.5
Travel & Leisure - - 3.8 3.8 11.9
Energy - - 2.6 2.6 1.3
Oil & Gas - 1.9 - 1.9 2.4
Telecommunications - - 1.3 1.3 1.0
Education Services - - 1.2 1.2 -
Insurance - - 0.5 0.5 1.0
Real Estate - - 0.1 0.1 0.2
--------------------------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
1.2 6.9 84.2 92.3 89.4
treasury bills - 7.7 - 7.7 10.6
--------------------------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
total at 31 January 2021 1.2 14.6 84.2 100.0
--------------------------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
total at 31 January 2020 1.1 18.7 80.2 100.0
--------------------------------------------------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
* Includes Investment Trusts.
strategic report - twenty largest investments
as at 31 January
equities (including convertibles, At fair value
loan stocks and related financing) GBP'000
------------------------------------- ------------------ --------------
Oryx International Growth Fund
Limited * UK Listed 104,321
EKF Diagnostics Holdings plc UK Quoted on AIM 67,130
Renalytix AI plc UK Quoted on AIM 56,534
Polar Capital Holdings plc UK Quoted on AIM 41,860
Augean plc UK Quoted on AIM 36,900
MJ Gleeson Group plc UK Listed 36,000
Harwood Private Equity IV LP UK Unquoted 34,656
Ten Entertainment Group plc UK Listed 20,500
Hargreaves Services Plc UK Quoted on AIM 18,833
Odyssean Investment Trust Plc UK Listed 17,420
------------------------------------- ------------------ --------------
ten largest investments 434,154
--------------------------------------------------------- --------------
Esken Limited * UK Listed 15,750
Performance Chemicals Company US Unquoted 13,233
Verici DX UK Quoted on AIM 12,529
Sureserve Group plc UK Quoted on AIM 12,322
Benchmark Holdings plc UK Quoted on AIM 11,600
Signature Aviation plc UK Listed 11,303
Frenkel Topping Group Plc UK Quoted on AIM 10,845
Coventbridge Group US Unquoted 10,133
Redcentric plc UK Quoted on AIM 9,834
Bigblu Broadband Plc UK Quoted on AIM 9,574
------------------------------------- ------------------ --------------
twenty largest investments 551,277
Aggregate of other investments
at fair value 106,982
--------------------------------------------------------- --------------
658,259
US Treasury Bills 54,615
--------------------------------------------------------- --------------
total 712,874
--------------------------------------------------------- --------------
* incorporated in Guernsey.
All investments are valued at fair value.
strategic report
The Directors present the strategic report of the Company for
the year ended 31 January 2021.
principal activity
The Company carries on business as an investment trust and its
principal activity is portfolio investment.
objective
The Company's objective is to provide capital appreciation to
its shareholders through investing in a portfolio of smaller
companies which are based primarily in countries bordering the
North Atlantic Ocean.
strategy
In order to achieve the Company's investment objective, the
Manager uses a stock specific approach in managing the Company's
portfolio, selecting investments that he believes will increase in
value over a period of time, whether that be due to issues in the
management of the businesses which he believes can be improved by
shareholder engagement and involvement or simply due to the fact
that the stock is undervalued and he can see potential for
improvement in value over the long term. The Company may invest in
both quoted and unquoted companies. At present, the investments in
the portfolio are principally in companies which are located either
in the United Kingdom or the United States of America. Typically
the investment portfolio will comprise between 40 and 50
securities.
investment policy
While pursuing the Company's objective, the Manager must adhere
to the following:
1. the maximum investment limit is 15% of the Company's
investments in any one company at the time of the investment;
2. gearing is limited to a maximum of 30% of net assets;
3. the Company may invest on both sides of the Atlantic, with
the weighting varying from time to time;
4. the Company may invest in unquoted securities as and when
opportunities arise and again the weighting will vary from time to
time.
investment restrictions
The Company has not adopted any specific investment
restrictions, and the Company's investments may be highly
concentrated. However, the Manager has put in place internal
limitations to control risk and to manage diversification with the
aim of allowing it to operate within parameters that it believes
are wide enough for it to generate target returns but which are
suitable to prevent undue risk.
investment approach
The Company invests in a diversified range of companies, both
quoted and unquoted, on both sides of the Atlantic in accordance
with its objective and investment policy.
Christopher Mills, the Company's Chief Executive and Investment
Manager, is responsible for the construction of the portfolio and
details of the principal investments are set out in the Annual
Report. The top twenty largest investments by current valuation are
listed above.
When analysing a potential investment, the Manager will employ a
number of valuation techniques depending on their relevance to the
particular investment. A key consideration when deciding on a
potential investment would be the sustainability and growth of long
term cash flow. The Manager will consider the balance of quoted and
unquoted securities in the portfolio when deciding whether to
invest in an unquoted stock as he is aware that the level of risk
in unquoted securities may be considered higher.
In respect of the unquoted portfolio, regular contact is
maintained with the management of prospective and existing
investments and rigorous financial and business analysis of these
companies is undertaken. It is recognised that different types of
business perform better than others depending on economic cycles
and market conditions and this is taken into consideration when the
Manager selects investments and is therefore reflected within the
range of investments in the portfolio. The Company attempts to
minimise its risk by investing in a diversified spread of
investments whether that spread be geographical, industry type or
quoted or unquoted companies.
best execution
The Company as the operator of a closed-ended investment trust
has considered the rules on best execution as noted in the
Financial Services Markets Act 2000 and COBS 11.2 of the FCA
Handbook. The Company has determined that the rules on performing
best execution do not apply to the Company when, acting in the
capacity of operator of an internally managed AIF (regulated
collective investment scheme), it purchases or sells units in that
AIF/scheme.
borrowing and leverage
The Company does not intend to incur borrowings as part of its
investment strategy.
However, in the event that it did employ leverage for working
capital purposes, any such borrowings incurred will not remain
outstanding for more than 60 calendar days. In each such case,
leverage may be obtained on an unsecured or secured/collateralised
basis. The Company is not otherwise expected to engage in borrowing
or make use of leverage.
The Company's borrowing and leveraging capacity is limited to an
amount equal to: 30% of the net asset value of the Company when
calculated in accordance with the "commitment" method set out in
the AIFMD Rules.
The calculation and disclosure of such maximum leverage limits
is required in order to satisfy the requirements of the AIFMD
Rules. However, the Investment Manager expects the typical leverage
levels to be lower than the maximum levels stated above, and
generally not to exceed 10% of the Company's net asset value. The
Investment Manager will inform investors to the extent such
leverage limits are exceeded in accordance with the AIFMD
Rules.
The Company does not currently grant any guarantee under any
leveraging arrangement. The grant of any such guarantee would be
disclosed to investors in accordance with the AIFMD Rules. Save as
set out herein, there are no restrictions on the Company's use of
leverage, by borrowing or otherwise, other than those which may be
imposed by applicable law, rule or regulation.
changes to the investment policy, Investment restrictions and
investment approach
Changes to the investment policy, investment restrictions and
investment approach of the Company as set out above may be made by
the Directors. Changes believed by the Directors to be material
will be notified to investors in advance of the change taking
effect.
financial instruments
The financial instruments employed by the Company primarily
comprise equity and loan stock investments, although it does hold
cash and liquid instruments. Further details of the Company's risk
management objectives and policies relating to the use of financial
instruments can be found in note 14 to the financial
statements.
delegated activities
The Company being internally managed has not delegated the
provision of portfolio management and risk management functions but
does rely on third party services providers to provide ancillary
services to support the activities of the company. As a result, the
Company will continue to act as an internally managed AIFM of the
Company for the purposes of the FCA Rules in accordance with the
Investment Management Agreement.
appointment of depositary
The Company has appointed Bank of New York Mellon (BNYM) as
depositary for the quoted securities deposited for safekeeping with
BNYM or with any third party appointed by BNYM and to hold cash in
accordance with the terms of its agreement.
any conflicts of interest that may arise from such
delegations
From time to time conflicts may arise between the Depositary and
the delegates, for example where an appointed delegate is an
affiliated group company which receives remuneration for another
custodial service it provides to the Company. In the event of any
potential conflict of interest which may arise during the normal
course of business, the Depositary will have regard to the
applicable laws.
performance
At 31 January 2021, the diluted NAV per share was 5,292p (2020:
4,384p), an increase of 20.7% during the year, compared to an
increase of 15.2% during the year in the Standard & Poor's 500
Composite Index (Sterling adjusted).
Net assets attributable to equity holders at 31 January 2021
amounted to GBP742,230,000 compared with GBP620,723,000 at 31
January 2020.
The ongoing charges relating to the Company are 1.2% (2020:
1.1%), based on total expenses, excluding finance charges and
non-recurring items for the year and average monthly net
assets.
results and dividends
The total net return after taxation for the financial year ended
31 January 2021 amounted to GBP130,078,000 (2020: GBP98,852,000).
The Board does not propose to pay a final dividend (2020: 30p).
key performance indicators
The Directors regard the following as the main key indicators
pertaining to the Company's performance:
(i) Net asset value per Ordinary Share: the chart in the
Strategic Report in the Annual Report illustrates the movement in
the fully diluted net asset value per Ordinary Share over the past
five years:
(ii) Share price return: the chart in the Strategic Report in
the Annual Report illustrates the movement in the share price per
Ordinary Share over the past five years:
(iii) Performance against benchmark
The performance of the Company's share price is measured against
the Standard & Poor's 500 Composite Index (Sterling adjusted),
the Company's benchmark. A graph comparing performance can be found
in the Directors' Remuneration Report in the Annual Report.
principal risks and uncertainties
The Board has carried out a robust assessment of the emerging
and principal risks facing the Company including those that would
threaten the Company's business model, future performance, solvency
of liquidity and reputation.
The key risks faced by the Company are set out below. The Board
regularly reviews these and agrees policies for managing these
risks.
-- Impact of COVID and Brexit: While COVID had an initial
negative impact on the value of certain investments which were in
the entertainment and travel infrastructure sectors, the positive
performance of our life science investments has more than made up
for any shortfall. Our portfolio continues to show resilience and
our strong cash position gives us considerable protection from
downside risks relating to both COVID and Brexit.
-- Performance risk: the Board is responsible for deciding the
investment strategy in order to fulfil the Company's objectives and
for monitoring the performance of the Manager. An inappropriate
investment strategy may result in under-performance against the
companies in the peer group or against the benchmark indices. The
Board manages this risk by ensuring that the investments are
appropriately diverse and by receiving reports from the Manager at
every board meeting explaining his investment decisions and the
composition and performance of the portfolio.
-- Market risk: this category of risk includes currency risk,
market price risk and interest rate risk. The fair value or future
cash flows of a financial investment held by the Company may
fluctuate because of changes in market prices. Also, the valuations
of the investments in the portfolio may be subject to fluctuation
due to exchange rates or general market prices. The Manager
monitors these fluctuations and the markets on a daily basis; the
performance of the investment portfolio against its benchmarks is
also closely monitored by the Manager. The afore-mentioned graph in
the Directors' Remuneration Report illustrates the Company's
performance against its benchmarks over the last ten years.
-- Investments in unquoted stocks, by their nature, involve a
higher degree of risk than investments in the listed market. The
valuation of unquoted investments can include a significant element
of estimation based on professional assumptions that is not always
supported by prices from current market transactions. Recognised
valuation techniques are used and recent arms' length transactions
in the same or similar entities may be taken into account. Clearly
the valuation of such investments is therefore a key uncertainty
but the Board manages this risk by regularly reviewing the
valuation principles applied by the Manager to ensure that they
comply with the Company's accounting policies and with fair value
principles. Harwood Capital LLP, a firm which is ultimately owned
by Christopher Mills, the Company's Manager, and which provides
services such as dealings, administration and compliance to the
Company, operates a Valuations and Pricing Committee which meets
regularly throughout the year to review and agree the valuations of
the investments in the portfolio for onward submission to the
Board.
-- Discount volatility: Subject to shareholder support for
Resolution 14, the Company's share buy-back programme should have
the effect of limiting the extent of the discount to net asset
value at which the Company's shares trade. The Company repurchased
135,482 (2020: 165,620) Ordinary Shares for cancellation during the
year.
-- Regulatory risk: any breach of a number of regulations
applicable to the Company, the UKLA's Listing Rules, the FCA
compliance regime and the Companies Act could lead to a number of
detrimental effects on the Company as well as reputational damage.
The Audit Committee monitors compliance with these regulations in
close alliance with the Manager and Secretary.
-- Custodial and Banking risk: there is a risk that the
custodians and banks used by the Company to hold assets and cash
balances could fail and the Company's assets may not be returned.
Associated with this is the additional risk of fraud or theft by
employees of those third parties. The Board exercises monitoring
through the Manager and Harwood Capital LLP over the financial
position of its custodial banks.
-- Credit risk/Counterparty risk: the Company holds preference
shares in some investee companies and provides other forms of debt
or loan guarantees where deemed necessary. There is a risk of those
counterparties being unable to meet their obligations. The
financial position and performance of those investee companies are
continually monitored by the Manager and actions are taken to
protect the Company's investment if needed.
professional negligence
The Company covers professional liability risks set out in
Article 9(7) of Directive 2011/61/EU on Alternative Investment Fund
Managers (the "Directive) and article 12 and 13 of the AIFMD level
2 regulation (professional liability risks) by holding professional
indemnity insurance and maintaining an amount of own funds to meet
the PII capital requirement under the Directive; and comply with
the qualitative requirements addressing professional liability
risks.
section 172 statement
Under Section 172 of the Companies Act 2006, directors are
required to promote the success of the Company for the benefit of
the stakeholders. In accordance with the requirements of the
Companies (Miscellaneous Reporting) Regulations, 2018, the Company
has to detail how this duty has been performed with regard to the
matters set out in Section 172 (1) (a) to (f).
-- The directors have to consider the likely consequences of
their decisions in the long term taking into account the interests
of the various different stakeholders of the Company.
-- A company's stakeholders are normally considered to comprise
of its shareholders, employees, customers and suppliers as well as
the wider community in which the company operates. As the Company
is an internally managed investment company it does not have any
employees as its activities are outsourced. Its customers are its
shareholders and details of those owning more than 3% of the
Company's shares are shown in the Report of the Directors. The
Company's relations with its shareholders are detailed in the Annua
Report.
-- The main stakeholders are therefore the Company's
shareholders and a small number of key third party suppliers,
principally the Investment Manager, together with the company
secretary, accountants, brokers, depositary, bankers and auditors,
to whom the day to day functions are delegated.
-- The Board works closely with the Investment Manager to
promote the long-term success of the Company as effectively and
responsibly as possible and he in turn interacts directly with the
investee companies. Details of the investment policy and investment
approach can be found on above.
-- The Company has a limited impact on the environment and has
no greenhouse gas emissions to report as indicated in the Report of
the Directors. Its impact on social, community and human rights
issues are detailed below, and a statement on the Modern Slavery
Act is given below.
-- To summarise, the directors are fully aware of their duty
under Section 172 in all their deliberations, and decisions taken
always take into account the interests of the key stakeholders.
viability statement
In accordance with the UK Corporate Governance Code the Board
has considered the longer term prospects for the Company. The
Directors have reviewed the Company over the next three years to
May 2024, which is generally a reasonable investment horizon for
many investment trust shareholders. This assessment took into
account the Company's current position as well as its continuing
investment strategy. Additional factors under review included the
principal risks inherent in its management and portfolio structure,
contractual arrangements and cost base.
The Directors have noted the following elements as part of its
evaluation:
-- the Company invests in a combination of listed and unquoted
companies, most of which have positive EBITDA and/or net tangible
asset values which support their valuations;
-- the Company holds more than 10% of its portfolio in cash and
US Treasury Bills which are readily realisable and intends to
continue to hold liquidity comfortably in excess of any contingent
liabilities, including any requirements to fund any future
drawdowns resulting from private equity or put option
commitments;
-- the Company's expenses are relatively stable, except for the
Investment Manager's fee which is positively correlated with the
Company's net asset value and relative performance, giving comfort
that the Company could easily cover costs in the event of a
substantial decline in net asset value; and
-- the Company has considered the effect of COVID and does not
believe it impacts its viability.
The Directors have also assessed the Company's principal risks
and uncertainties and believe that appropriate measures are in
place to minimise the likelihood of their potential to impact the
viability of the Company. These measures include:
-- the Manager's reports on compliance with the investment objective;
-- the Manager's control of counterparty and custodial risk;
-- the Board's monitoring of gearing (if any), compliance with
specific investment guidelines and liquidity risk; and
-- monitoring the share price's discount to net asset value and
the stability of the shareholder base.
Based on the results of this analysis, the Directors have
concluded that there is a reasonable expectation that the Company
can continue in operation and meet its liabilities as they fall due
during the period to May 2024.
future prospects
The Directors are hopeful that some of the Company's investments
will see corporate activity over the coming year so that the
Company's net asset value should outperform its benchmark.
social, community and human rights issues
As an investment trust with no employees the Company has no
direct social or community responsibilities or impact on the
environment. The Company, however, takes into account the impact of
environmental, social and governance factors when selecting and
managing its investments within the context of its obligation to
manage investments in the financial interests of its
shareholders.
modern slavery act
As an investment vehicle the Company does not provide goods or
services in the normal course of business. Accordingly, the
Directors consider that the Company is not required to make any
slavery or human trafficking statement under the Modern Slavery Act
2015.
AIFMD
The Company is authorised under the AIFMD as a Small Registered
UK Alternative Investment Fund Manager under regulation 10(1) of
the Alternative Investment Fund Managers Regulations 2013 (SI
2013/1773). Small registered UK AIFMs are not authorised persons as
a result of their registration as small registered UK AIFMs and are
not included on the Financial Services Register in relation to this
business. However, small registered UK AIFMs are not prevented from
carrying on regulated activities as a result of their registration
and therefore may be included on the Financial Services Register in
relation to other business. For AIFMD purpose the Company is
internally managed with Christopher Mills making the investment
decisions in his capacity as Chief Executive. As the Company has
passed the tipping point it is now seeking approval as a full-scope
UK AIFM of an internally managed AIF. The Company has received a
minded to authorise communication from the FCA subject to
appointing the Depositary which has been confirmed to the FCA. It
is envisaged that the Company will be authorised as a full-scope
AIFM by the end of the third quarter 2021.
periodic and regular disclosure
1. The following information is available to investors in the annual report:
(i) the percentage of the Company's assets that are subject to
special arrangements arising from their illiquid nature;
(ii) any material changes to the arrangements for managing the liquidity of the Company;
(iii) the current risk profile of the Company and the risk
management systems employed by the Company to manage those
risks;
(iv) the total amount of leverage employed by the Company if
applicable; and
(v) details of the Company's policy towards best execution.
2. Any changes to the following information will be provided by
the Company to investors without undue delay (and may be provided
by email) in accordance with the AIFMD Rules:
(i) the maximum level of leverage which the Company may employ on behalf of the Company;
(ii) the grant of or any changes to any right of re-use of
collateral or any changes to any guarantee granted under any
leveraging arrangement; and
(iii) activation of liquidity management tools.
By Order of the Board
Derringtons Limited
Company Secretary
10 May 2021
report of the directors
for the year ended 31 January
The Directors present their report to shareholders and the
financial statements for the year ended 31 January 2021. Certain
information that is required to be disclosed in this report has
been provided in other sections of this Annual Report and
accordingly, these are incorporated into this report by
reference.
taxation status
In the opinion of the Directors, the Company has conducted its
affairs during the period under review, and subsequently, so as to
maintain its status as an investment trust for the purposes of
Chapter 4 of Part 24 of the Corporation Tax Act 2010. The Company
made a successful application under Regulation 5 of the Investment
Trust (Approved Company) (Tax) Regulations 2011 for investment
trust status to apply to all accounting periods starting on or
after 1 February 2013 subject to the Company continuing to meet the
eligibility conditions contained in Section 1158 of the Corporation
Tax Act 2010 and the ongoing requirements outlined in Chapter 3 of
Part 2 of the Regulations.
share capital
The Company's issued share capital consisted of 14,024,518
Ordinary Shares of 5p nominal value each on 31 January 2021. Since
the year end, 24,518 Ordinary Shares have been repurchased for
cancellation. All shares hold equal rights with no restrictions and
no shares carry special rights with regard to the control of the
Company. There are no special rights attached to the shares in the
event that the Company is wound up.
During the year, the Company purchased 135,482 (2020: 165,620)
Ordinary Shares for GBP4.3m (2020: GBP5.0m) for cancellation to
improve net asset value per Share. This comprised 1.0% (2020: 1.2%)
of the issued share capital.
share valuations
On 31 January 2021, the middle market quotation and the diluted
net asset value per 5p Ordinary Share were 3,850p and 5,292p
respectively. The comparable figures at 31 January 2020 were 3,400p
and 4,384p respectively. There were no outstanding options for the
year ended 2021 or 2020 meaning there was no dilutive effect on the
net asset value at either of these dates.
substantial shareholders
As at 31 January 2021, and at the date of this report, the
following interests in the Ordinary Shares of the Company which
exceed 3% of the issued share capital had been notified to the
Company:
Number of Ordinary Shares % of issued share capital
------------------------ -------------------------- --------------------------
Christopher Mills 3,766,000 26.85
CG Asset Management 941,738 6.71
Butterfield Bank Group 759,082 5.41
Rathbone Brothers plc 707,570 5.05
1607 Capital Partners 584,500 4.17
Peregrine Moncreiffe 440,589 3.14
------------------------ -------------------------- --------------------------
directors
The biographical details for Directors currently in office are
shown in the Annual Report.
The Company's Articles of Association require that Directors
should submit themselves for election at the first Annual General
Meeting following their appointment and thereafter for re-election
at least every three years. However, the Company is adopting the
requirements of the UK Corporate Governance Code in relation to the
annual re-election of directors. Therefore, in accordance with
provision 18 of the UK Corporate Governance Code all of the
Directors will retire at the Annual General Meeting and being
eligible, offer themselves up for re-election.
directors' interests
The interests of the Directors as notified to the Company,
including those of their connected persons, in the Ordinary Shares
of the Company as at 31 January 2021 and 31 January 2020 were as
follows:
31 January 2021 31 January 2020
5p Ordinary Shares 5p Ordinary Shares
Peregrine Moncreiffe 440,589 438,140
Christopher Mills 3,766,000 3,766,000
Christopher Mills (non-beneficial) 355,740 355,740
Lord Howard of Rising 5,000 5,000
G Walter Loewenbaum 15,000 15,000
Sir Charles Wake 5,270 1,800
------------------------------------ -------------------- --------------------
There have been no changes to the above interests between 31
January 2021 and the date of this report.
Details of Directors' remuneration are described in the
Directors' Remuneration Report in the Annual Report.
Save as disclosed in the Report of the Directors in the Annual
Report or in notes 3 and 15 to the financial statements, no
Director was party to or had any interest in any contract or
arrangement with the Company at any time during the year.
significant agreements
The Company is required to disclose details of any agreement
that it considers to be essential to the business and the two
agreements detailed below are considered by the Board to be
significant.
Pursuant to the Sub Advisory, Administration and Transmission
Services Agreement dated 15 June 2016, Harwood Capital LLP provides
administration services to the Company. The Sub Advisory,
Administration and Transmission Services Agreement continues unless
thereafter terminated by either party on not less than twelve
months' notice in writing or may be terminated forthwith as a
result of a material breach of the agreement or the insolvency of
either party. No compensation is payable on termination of the
Agreement.
Pursuant to the Secondment Services Agreement between the
Company, GFS and Christopher Mills and the Sub Advisory,
Administration and Transmission Services Agreement between the
Company and Harwood Capital LLP, Christopher Mills is responsible
for the day-to-day investment decisions. The Secondment Services
Agreement continues until terminated by the Company or GFS on not
less than twelve months' notice.
The Board reviews the activities of the Manager. The Chief
Executive carries out day-to-day investment decisions for and on
behalf of the Company. As part of this review, the Board is
satisfied that the continuing appointment of the Manager, on the
terms agreed, is in the best interests of shareholders. Christopher
Mills has been Chief Executive of the Company since 1984 and the
Board consider it is in the best interest of the Company for this
arrangement to continue.
As part of this review, the Board has given consideration to the
experience, skills and commitment of the Chief Executive in
addition to the personnel, services and resources provided by
Harwood Capital LLP. The Company's performance over the last year
is described in the Chairman's Statement above.
related party transactions
Christopher Mills makes day-to-day investment decisions for the
Company in his capacity as its Chief Executive and this position is
distinct from his position as Chief Investment Officer of Harwood
Capital LLP. Christopher Mills is a director of Growth Financial
Services Limited ("GFS"). GFS is a wholly-owned subsidiary of
Harwood Capital Management Limited, which is the holding company of
the Harwood group of companies and is, in turn, 100% owned by
Christopher Mills. Harwood Capital Management Limited is also a
Designated Member of Harwood Capital LLP.
Details of the related party transactions and fees payable are
disclosed in note 15 and in the Directors' Remuneration Report in
the Annual Report. The Investment Management Fees are disclosed in
note 3 of the financial statements. Any Performance Fee payable to
GFS is disclosed in the Directors' Remuneration Report in the
Annual Report and note 3 of the financial statements.
With the exception of the matters referred to above, during the
year no Director was materially interested in any contract of
significance (as defined by the UK Listing Authority Listing Rules)
entered into by the Company.
institutional investors - use of voting rights
The Chief Executive, in the absence of explicit instruction from
the Board, is empowered to exercise discretion in the use of the
Company's voting rights in respect of investments and to then
report to the Board, where appropriate, regarding decisions taken.
The Board have considered whether it is appropriate to adopt a new
voting policy and an investment policy with regard to social,
ethical and environmental issues and concluded that it is not
appropriate to change the existing arrangements.
donations
The Company does not make any political or charitable
donations.
creditors' payment policy
It is the Company's policy to settle investment transactions
according to the settlement periods operating for the relevant
markets. For other creditors, it is the Company's policy to pay
amounts due to them as and when they become due. All supplier
invoices received by 31 January 2021 had been paid (31 January 2020
- all supplier invoices paid).
greenhouse gas emissions
The Company has no physical assets, operations, premises or
employees of its own. Consequently it consumed less than 40,000 kWh
of energy during the year so has no greenhouse gas emissions to
report.
auditors
Resolutions to re-appoint RSM UK Audit LLP as the Company's
auditors and to authorise the Board to determine their remuneration
will be proposed at the forthcoming Annual General Meeting.
In the case of each of the persons who are directors at the time
the report is approved so far as each director is aware, there is
no relevant audit information of which the Company's auditor is
unaware, and he has taken all the steps that he ought to have taken
as a director in order to make himself aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
going concern
The Company's assets largely comprise readily realisable
securities which can be sold to meet funding commitments if
necessary and it also has sufficient cash reserves so the Directors
have a reasonable expectation that the Company has adequate
resources to continue in operation for the foreseeable future. They
have, therefore, adopted the going concern basis in preparing these
financial statements.
additional disclosures
The following further information is disclosed in accordance
with the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008:
-- the Company's capital structure and voting rights are
summarised earlier in this report and note 11;
-- details of the substantial shareholders in the Company are listed earlier in this report;
-- the rules concerning the appointment and replacement of
directors are contained in the Company's Articles of Association
and are discussed earlier in this report;
-- amendment of the Company's Articles of Association and powers
to issue on a pre-emptive basis or buy back the Company's shares
requires a special resolution to be passed by the shareholders;
and
-- there are: no restrictions concerning the transfer of
securities in the Company; no special rights with regard to control
attached to securities; no agreements between holders of securities
regarding their transfer known to the Company; no agreements which
the Company is party to that might affect its control following a
takeover bid; no agreements between the Company and its Directors
concerning compensation for loss of office; and no qualifying third
party indemnities in place.
By Order of the Board
Derringtons Limited
Company Secretary
Registered Office:
6 Stratton Street
Mayfair
London
W1J 8LD
Registered No: 1091347
10 May 2021
statement of directors' responsibilities in respect of the
annual report and the financial statements
for the year ended 31 January
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with
International Accounting Standards in conformity with the
requirement of the Companies Act 2006.
The financial statements are required by law and International
Accounting Standards to present fairly the financial position and
performance of the company. The Companies Act 2006 provides in
relation to such financial statements that references in the
relevant part of that Act to financial statements giving a true and
fair view are references to their achieving a fair
presentation.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss for that period. In preparing these financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable, relevant and reliable;
-- state whether they have been prepared in accordance with
International Accounting Standards in conformity with the
requirement of the Companies Act 2006;
-- assess the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
-- use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They
are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company and
to prevent and detect fraud and other irregularities.
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 complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
responsibility statement of the directors in respect of the
annual financial report
Each of the directors, whose names and functions are listed in
the Annual Report confirm that to the best of each person's
knowledge:
-- the financial statements, prepared in accordance with
International Accounting Standards in conformity with the
requirement of the Companies Act 2006, give a true and fair view of
the assets, liabilities, financial position and profit or loss of
the Company taken as a whole; and
-- the Strategic Report and the Report of the Directors includes
a fair review of the development and performance of the business
and the position of the company, together with a description of the
principal risks and uncertainties that they face.
We consider the Annual Report and financial statements, taken as
a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
For and on behalf of the Board
Peregrine Moncreiffe
Chairman
10 May 2021
statement of comprehensive income
for the year ended 31 January
2021 2020
Revenue Capital Revenue Capital
Notes GBP'000 GBP'000 Total GBP'000 GBP'000 GBP'000 Total GBP'000
---------------- ------ ------------- ------------- -------------- -------------- -------------- --------------
Income 2 7,889 - 7,889 12,345 - 12,345
Net gains on
investments at
fair value 8 - 133,879 133,879 - 93,536 93,536
Currency
exchange
(losses)/gains 8 - (563) (563) - 153 153
---------------- ------ ------------- ------------- -------------- -------------- -------------- --------------
total income 7,889 133,316 141,205 12,345 93,689 106,034
Expenses
Investment
management fee 3 (6,380) (3,769) (10,149) (5,410) (709) (6,119)
Other expenses 4 (963) - (963) (1,063) - (1,063)
---------------- ------ ------------- ------------- -------------- -------------- -------------- --------------
return before
taxation 546 129,547 130,093 5,872 92,980 98,852
Taxation 6 (15) - (15) - - -
---------------- ------ ------------- ------------- -------------- -------------- -------------- --------------
return for the
year 531 129,547 130,078 5,872 92,980 98,852
---------------- ------ ------------- ------------- -------------- -------------- -------------- --------------
basic and
diluted
earnings per
ordinary share 7 3.76 916.57 920.33 41.24 652.92 694.16
---------------- ------ ------------- ------------- -------------- -------------- -------------- --------------
The total column of the statement is the Statement of
Comprehensive Income of the Company, prepared in accordance with
International Accounting Standards in conformity with the
requirement of the Companies Act 2006. The supplementary revenue
and capital columns are presented in accordance with the Statement
of Recommended Practice issued by the Association of Investment
Companies ("AIC SORP").
All items in the above Statement derive from continuing
operations. No operations were acquired or discontinued in the
year.
There is no other comprehensive income, and therefore the return
for the year is also the comprehensive income.
The notes form part of these financial statements.
statement of changes in equity
for the year ended 31 January
Capital
Share redemption Capital Revenue
capital reserve Share premium reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Total GBP'000
--------------- ------------- ------------- --------- -------------- ------------- ------------- --------------
2021
31 January
2020 708 162 1,301 612,022 6,530 620,723
Total
comprehensive
income for
the year - - - 129,547 531 130,078
Dividend paid - - - - (4,230) (4,230)
Shares
purchased for
cancellation (7) 7 - (4,341) - (4,341)
--------------- ------------- ------------- --------- -------------- ------------- ------------- --------------
31 January
2021 701 169 1,301 737,228 2,831 742,230
--------------- ------------- ------------- --------- -------------- ------------- ------------- --------------
Share Capital Share Share premium Capital Revenue Total GBP'000
capital redemption options GBP'000 reserve reserve
GBP'000 reserve reserve GBP'000 GBP'000
GBP'000 GBP'000
--------------- ------------- ------------- --------- -------------- ------------- ------------- --------------
2020
31 January
2019 716 154 24 1,301 524,316 4,914 531,425
Total
comprehensive
income for
the year - - - - 92,980 5,872 98,852
Dividend paid - - - - - (4,256) (4,256)
Shares
purchased for
cancellation (8) 8 - - (5,022) - (5,022)
Share options
discharge - - (24) - (252) - (276)
--------------- ------------- ------------- --------- -------------- ------------- ------------- --------------
31 January
2020 708 162 - 1,301 612,022 6,530 620,723
--------------- ------------- ------------- --------- -------------- ------------- ------------- --------------
The notes form part of these financial statements.
balance sheet
as at 31 January
Notes 31 January 2021 GBP'000 31 January 2020 GBP'000
---------------------------------------------------------- ------ ------------------------ ------------------------
non current assets
Investments at fair value through profit or loss 8 712,874 601,168
---------------------------------------------------------- ------ ------------------------ ------------------------
712,874 601,168
current assets
Trade and other receivables 9 3,211 3,736
Cash and cash equivalents 33,918 17,805
---------------------------------------------------------- ------ ------------------------ ------------------------
37,129 21,541
---------------------------------------------------------- ------ ------------------------ ------------------------
total assets 750,003 622,709
---------------------------------------------------------- ------ ------------------------ ------------------------
current liabilities
Trade and other payables 10 (7,773) (1,986)
---------------------------------------------------------- ------ ------------------------ ------------------------
total liabilities (7,773) (1,986)
---------------------------------------------------------- ------ ------------------------ ------------------------
total assets less current liabilities 742,230 620,723
---------------------------------------------------------- ------ ------------------------ ------------------------
net assets 742,230 620,723
---------------------------------------------------------- ------ ------------------------ ------------------------
represented by:
Share capital 11 701 708
Capital redemption reserve 169 162
Share premium account 1,301 1,301
Capital reserve 737,228 612,022
Revenue reserve 2,831 6,530
---------------------------------------------------------- ------ ------------------------ ------------------------
total equity attributable to equity holders of the
company 742,230 620,723
---------------------------------------------------------- ------ ------------------------ ------------------------
net asset value per ordinary share:
Basic and Diluted 7 5,292p 4,384p
The notes part of these financial statements.
These financial statements were approved and authorised for
issue by the Board of Directors on 10 May 2021 and signed on its
behalf by:
Peregrine Moncreiffe, Chairman
Company Registered Number: 1091347
cash flow statement
for the year ended 31 January
2021 2020
Notes GBP'000 GBP'000
--------------------------------------------------------------- ------ ---------- ----------
cash flows from operating activities
Investment income received 6,202 9,631
Deposit interest received 4 18
Investment Manager's fees paid (7,082) (7,168)
Share based payment - discharge of options - (276)
Transfer from subsidiary 104 -
Other cash payments (923) (1,225)
--------------------------------------------------------------- ------ ---------- ----------
cash (expended)/generated from operations 12 (1,695) 980
Taxation paid (15) -
--------------------------------------------------------------- ------ ---------- ----------
net cash (outflow)/inflow from operating activities (1,710) 980
--------------------------------------------------------------- ------ ---------- ----------
cash flows from investing activities
Purchases of investments (265,471) (290,621)
Sales of investments 292,209 286,006
--------------------------------------------------------------- ------ ---------- ----------
net cash inflow/(outflow) from investing activities 26,738 (4,615)
--------------------------------------------------------------- ------ ---------- ----------
cash flows from financing activities
Dividend paid (4,230) (4,256)
Repurchase of Ordinary Shares for cancellation (4,159) (5,022)
--------------------------------------------------------------- ------ ---------- ----------
net cash outflow from financing activities (8,389) (9,278)
--------------------------------------------------------------- ------ ---------- ----------
increase/(decrease) in cash and cash equivalents for the year 16,639 (12,913)
--------------------------------------------------------------- ------ ---------- ----------
cash and cash equivalents at the start of the year 17,805 30,669
--------------------------------------------------------------- ------ ---------- ----------
Revaluation of foreign currency balances (526) 49
--------------------------------------------------------------- ------ ---------- ----------
cash and cash equivalents at the end of the year 13 33,918 17,805
--------------------------------------------------------------- ------ ---------- ----------
The notes form part of these financial statements.
notes to the financial statements
1 accounting policies
NASCIT is a listed public company incorporated and registered in
England and Wales. The registered office of the Company is 6
Stratton Street, Mayfair, London W1J 8LD. The principal activity of
the Company is that of an investment trust company within the
meaning of sections 1158/1159 of the Corporation Tax Act 2010 and
its investment approach is detailed in the Strategic Report.
a) basis of preparation
The financial statements of the Company have been prepared in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006. The annual
financial statements have also been prepared in accordance with the
AIC SORP for the financial statements of investment trust companies
and venture capital trusts.
The functional currency of the Company is Pounds Sterling
because this is the currency of the primary economic environment in
which the Company operates. The financial statements are also
presented in Pounds Sterling rounded to the nearest thousand,
except where otherwise indicated.
b) going concern
The financial statements have been prepared on a going concern
basis and on the basis that approval as an investment trust company
will continue to be met.
The Directors have made an assessment of the Company's ability
to continue as a going concern and are satisfied that the Company
has adequate resources to continue in operational existence for a
period of at least 12 months from the date when these financial
statements were approved.
In making this assessment, the Directors have considered in
particular the likely economic effects and the effects on the
Company's operations of the current COVID pandemic.
The longer-term economic effects of the pandemic are very
difficult to predict but in considering preparing the accounts on a
going concern basis the Directors noted the Company holds a
portfolio of liquid investments whose value is a multiple of
liabilities. The Directors are of the view that the Company can
meet its obligations as and when they fall due. The cash and US
treasury bills available enables the Company to meet any funding
requirements and finance future additional investments. The Company
is a closed-end fund, where assets are not required to be
liquidated to meet day-to-day redemptions.
c) segmental reporting
The Directors are of the opinion that the Company is engaged in
a single segment of business, being investment business. The
Company invests in small companies principally based in countries
bordering the North Atlantic Ocean.
d) accounting developments
In the current year, the Company has applied a number of
amendments to IFRS, issued by the IASB mandatorily effective for an
accounting period that begins on or after 1 January 2020. These
include annual improvements to IFRS, changes in standards,
legislative and regulatory amendments, changes in disclosure and
presentation requirements. The adoption of these has not had any
material impact on these financial statements.
e) critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial 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 Income Statement and the disclosure of
contingent assets and liabilities at the date of the financial
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.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
period if the revision affects both current and future periods.
In order to value the unquoted investments, there are a number
of valuation techniques that can be used. Judgement is used to
determine the best methodology to obtain the most accurate
valuation. Details of valuation techniques used and sensitivities
are set out in Note 14.
The Board of Directors has assessed the Company as meeting the
definition of an investment entity within IFRS 10 Consolidated
Financial Statements requirements. The Company measures the
subsidiaries at fair value through profit or loss rather than
consolidate the entities. The details are set out in Note 8.
Further to the above there were no accounting estimates or
significant judgements in the current period that have had a
material impact upon the financial statements.
f) investments
All investments are designated upon initial recognition as held
at fair value through profit or loss, and are measured at
subsequent reporting dates at fair value. Quoted investments are
valued using either the bid price or the closing price for Stock
Exchange Electronic Trading Service - quotes and crosses
('SETSqx'). The Company derecognises a financial asset only when
the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the
risks and rewards of ownership of the asset to another entity. On
derecognition of a financial asset, the difference between the
asset's carrying amount and the sum of consideration received and
receivable and the cumulative gain or loss that had been
accumulated is recognised in profit or loss.
Fair values for unquoted investments, or investments for which
the market is inactive, are established by using various valuation
techniques in accordance with the International Private Equity and
Venture Capital Valuation (the "IPEV") guidelines. These may
include recent arm's length market transactions, the current fair
value of another instrument which is substantially the same,
discounted cash flow analysis and option pricing models. Where
there is a valuation technique commonly used by market participants
to price the instrument and that technique has been demonstrated to
provide reliable estimates of prices obtained in actual market
transactions, that technique is utilised.
Gains and losses arising from changes in fair value are included
in the total return as a capital item. Also included within this
heading are transaction costs in relation to the purchase or sale
of investments. When a sale or purchase is made under a contract,
the terms of which require delivery within the timeframe of the
relevant market, the investments concerned are recognised or
derecognised on the trade date.
All investments for which a fair value is measured or disclosed
in the financial statements are categorised within the fair value
hierarchy levels set out in Note 14.
g) foreign currency translation
Transactions in currencies other than Pounds Sterling are
recorded at the rates of exchange prevailing on the date of the
transaction. Items that are denominated in foreign currencies are
retranslated at the rates prevailing on 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 capital or revenue in nature.
h) cash and cash equivalents
Cash comprises cash in hand, overdrafts 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 insignificant risk of changes in value.
For the purpose of the Cash Flow Statement, cash and cash
equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts when applicable.
i) other receivables and payables
Trade receivables and trade payables are measured at amortised
cost and balances revalued for exchange rate movement.
j) 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
withholding taxes which are disclosed separately in the Statement
of Comprehensive Income.
Special dividends are taken to the revenue or capital account
depending on their nature. In deciding whether a dividend should be
regarded as capital or revenue receipt, the Board reviews all
relevant information as to the sources of the dividend on a
case-by-case basis.
When the Company has elected to receive scrip dividends in the
form of additional shares rather than in cash, the amount of the
cash dividend foregone is recognised as income. Any excess in the
value of the cash dividend is recognised in the capital column.
All other income is accounted on a time-apportioned accruals
basis and is recognised in the Statement of Comprehensive
Income.
k) expenses and finance costs
All expenses are accounted on an accruals basis and are
allocated to wholly to revenue with the exception of the
Performance Fees which are allocated wholly to capital, as the fee
payable by reference to the capital performance of the Company.
Expenses incurred in shares purchased for cancellation are
charged to the capital reserve through the Statement of Changes in
Equity.
l) taxation
The charge for taxation is based on the net revenue for the year
and takes into account taxation deferred or accelerated because of
temporary differences between the treatment of certain items for
accounting and taxation purposes.
Deferred tax is provided using the liability method on temporary
differences between the tax bases of assets and liabilities and
their carrying amount for financial reporting purposes at the
reporting date. Deferred tax assets are only recognised if it is
considered more likely than not that there will be suitable profits
from which the future reversal of timing differences can be
deducted. In line with recommendations of the SORP, the allocation
method used to calculate the tax relief expenses charged to capital
is the 'marginal' basis. Under this basis, if taxable income is
capable of being offset entirely by expenses charged through the
revenue account, then no tax relief is transferred to the capital
account.
m) 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.
n) share capital and reserves
Share Capital: Represents the nominal value of equity
shares.
Capital Redemption Reserve: The amount by which the share
capital has been reduced, equivalent to the nominal value of the
Ordinary Shares repurchased for cancellation.
Share Options Reserve: The expense of share based payments. The
fair value of Share Options is measured at grant date and spread
over the vesting period. The deemed expense is transferred to the
Share Options Reserve.
Share Premium: The account represents the accumulated premium
paid for shares issued in previous periods above their nominal
value less issue expenses.
Capital Reserve: The following items are taken to this
reserve:
-- realised and unrealised capital and exchange gains and losses
on the disposal and revaluation of investments and of foreign
currency items;
-- performance fee costs;
-- Ordinary Shares repurchased for cancellation; and
-- exchange differences of a capital nature.
Revenue Reserves: Represents the surplus of accumulated revenue
profits being the excess of income derived from holding investments
less the costs associated with running the Company. This reserve
may be distributed by way of dividends.
2 income
2021 2020
GBP'000 GBP'000
----------------------------- --------- ---------
income from investments
Dividend income 4,070 6,640
Unfranked investment income
- interest 1,914 3,274
- interest reinvested 1,901 2,413
----------------------------- --------- ---------
7,885 12,327
----------------------------- --------- ---------
other income
Interest receivable 4 18
----------------------------- --------- ---------
4 18
----------------------------- --------- ---------
Total income 7,889 12,345
----------------------------- --------- ---------
total income comprises
Dividends 4,070 6,640
Interest 3,819 5,705
----------------------------- --------- ---------
7,889 12,345
----------------------------- --------- ---------
income from investments
Listed UK 3,976 6,640
Other listed 94 -
Other unquoted 3,815 5,687
----------------------------- --------- ---------
7,885 12,327
----------------------------- --------- ---------
3 investment management fee
(i) Pursuant to the Secondment Services Agreement, described in
the Report of the Directors above and the Directors' Remuneration
Report of the Annual Report, GFS provides the services of
Christopher Mills as Chief Executive of the Company, who is
responsible for day-to-day investment decisions. Christopher Mills
is a director of GFS. GFS is entitled to receive part of the
investment management and related fees payable to GFS and Harwood
Capital LLP as may be agreed between them from time to time.
(ii) Pursuant to the terms of the Sub Advisory, Administration
and Transmission Services Agreement, described in the Report of the
Directors, Harwood Capital LLP is entitled to receive a fee (the
Annual Fee) in respect of each financial period equal to the
difference between (a) 1% of shareholders' Funds (as defined) on 31
January each year and (b) the amount payable to GFS referred to in
note 3(i) above. This fee is payable quarterly in advance.
As set out in note 15, no formal arrangements exist to avoid
double charging on investments managed or advised by the Chief
Executive or Harwood Capital LLP.
(iii) The Performance Fee, calculated annually to 31 January, is
only payable if the investment portfolio, including Oryx at the
adjusted price, outperforms the Sterling adjusted Standard &
Poors' 500 Composite Index. It is calculated as 10% of the
outperformance and paid as a percentage of shareholders' Funds. It
is limited to a maximum payment of 0.5% of shareholders' Funds. The
Performance Fee arrangements payable to GFS have been in place
since 1984 when they were approved by shareholders.
The amounts payable in the year in respect of investment
management are as follows:
2021 2020
Revenue Capital Total GBP'000 Revenue GBP'000 Capital GBP'000 Total GBP'000
GBP'000 GBP'000
---------------- --------------- --------------- -------------- ---------------- ---------------- --------------
Annual fee
payable to
Harwood
Capital 3,828 - 3,828 3,246 - 3,246
Annual fee
payable to GFS 2,552 - 2,552 2,164 - 2,164
Performance fee - 3,774 3,774 - 654 654
Irrecoverable
VAT thereon* - 30 30 - 55 55
Irrecoverable
VAT adjustment
in respect of
prior years** - (35) (35) - - -
---------------- --------------- --------------- -------------- ---------------- ---------------- --------------
6,380 3,769 10,149 5,410 709 6,119
---------------- --------------- --------------- -------------- ---------------- ---------------- --------------
At 31 January 2021, GBP270,000 was payable to Harwood Capital
LLP in respect of outstanding management fees (2020: GBP270,000).
At 31 January 2021, there was GBP501,000 payable to GFS in respect
of outstanding performance fees (2020: GBP654,000) net of VAT.
* 4% irrecoverable VAT (2020: 42%) based on rates per latest VAT
return information.
** Adjustment in irrecoverable VAT following completion of VAT
return.
4 other expenses
2021 2020
GBP'000 GBP'000
--------------------------------------------------------------------------- --------- ---------
Auditor's remuneration - audit - RSM UK Audit LLP 59 58
Directors' fees (see Directors' Remuneration Report in the Annual Report) 130 130
Administration fee 271 279
Legal and Professional fees 198 192
Registrars fees 36 29
Stock Exchange related fees 33 35
Other expenses 236 340
--------------------------------------------------------------------------- --------- ---------
963 1,063
--------------------------------------------------------------------------- --------- ---------
5 dividends paid
2021 2020
GBP'000 GBP'000
-------------------------------------------------------------------------------- --------- ---------
Final dividend for the year ended 31 January 2020 of 30p per share (2019: 30p) 4,230 4,256
-------------------------------------------------------------------------------- --------- ---------
4,230 4,256
-------------------------------------------------------------------------------- --------- ---------
The Directors do not recommend the payment of a dividend in
respect of the year ended 31 January 2021.
6 taxation
2021 2020
Total Total
GBP'000 GBP'000
---------------- --------- ---------
Withholding tax 15 -
---------------- --------- ---------
15 -
---------------- --------- ---------
The current taxation charge for the year is different from the
standard rate of corporation tax in the UK of 19%. The differences
are explained below.
2021 2020
Total Total
GBP'000 GBP'000
------------------------------------------------------------------------------ --------- ---------
Total return before taxation 130,093 98,852
------------------------------------------------------------------------------ --------- ---------
Theoretical tax at UK Corporation tax rate of 19% (2020: 19%) 24,718 18,782
Effects of:
Non taxable capital return (25,330) (17,801)
UK and overseas dividends which are not taxable (774) (1,262)
Withholding tax 15 -
Increase in tax losses, disallowable expenses and excess management expenses 1,386 281
------------------------------------------------------------------------------ --------- ---------
actual current tax charge 15 -
------------------------------------------------------------------------------ --------- ---------
Factors that may affect future tax charges:
As at 31 January 2021, the Company has tax losses of
GBP69,275,000 (2020: GBP62,732,000) that are available to offset
future taxable revenue, comprising excess management expenses of
GBP60,280,000 and a non-trade loan relationship deficit of
GBP8,995,000 (2020: excess management expenses of GBP53,737,000 and
a non-trade loan relationship deficit of GBP8,995,000). A deferred
tax asset has not been recognised in respect of those losses as the
Company is not expected to generate taxable income in the future in
excess of the deductible expenses of future periods and,
accordingly, it is unlikely that the Company will be able to reduce
future tax liabilities through the use of those losses.
The Company is exempt from corporation tax on capital gains
provided it maintains its status as an investment trust under
Chapter 4 of Part 24 of the Corporation Tax Act 2010. Due to the
Company's intention to continue to meet the conditions required to
maintain its investment trust status, it has not provided for
deferred tax on any capital gains or losses arising on the
revaluation or disposal of investments.
7 return per ordinary share and net asset value per ordinary
share
a) return per ordinary share:
Revenue Capital Total
Net Net Net
return Ordinary Per Share return Ordinary Per Share return Ordinary Per Share
GBP'000 Shares pence GBP'000 Shares pence GBP'000 Shares pence
---------- --------- ----------- ---------- --------- ----------- ---------- --------- ----------- ----------
2021
Basic and
diluted
return
per
Share 531 14,133,859 3.76 129,547 14,133,859 916.57 130,078 14,133,859 920.33
---------- --------- ----------- ---------- --------- ----------- ---------- --------- ----------- ----------
Revenue Capital Total
Net Net Net
return Ordinary Per Share return Ordinary Per Share return Ordinary Per Share
GBP'000 Shares pence GBP'000 Shares pence GBP'000 Shares pence
---------- --------- ----------- ---------- --------- ----------- ---------- --------- ----------- ----------
2020
Basic and
diluted
return
per
Share 5,872 14,240,620 41.24 92,980 14,240,620 652.92 98,852 14,240,620 694.16
---------- --------- ----------- ---------- --------- ----------- ---------- --------- ----------- ----------
Return per Ordinary Share has been calculated using the weighted
average number of Ordinary Shares in issue during the year.
b) net asset value per ordinary share:
The net asset value per Ordinary Share calculated in accordance
with the Articles of Association is as follows:
Net assets Net asset value
2021 GBP'000 Number of Ordinary Shares per Share
-------------------------------------- ----------- -------------------------- ----------------
Ordinary Shares - Basic and diluted 742,230 14,024,518 5,292p
Ordinary Shares* - Basic and diluted 751,077 14,024,518 5,355p
-------------------------------------- ----------- -------------------------- ----------------
Net assets Net asset value
2020 GBP'000 Number of Ordinary Shares per Share
-------------------------------------- ----------- -------------------------- ----------------
Ordinary Shares - Basic and diluted 620,723 14,160,000 4,384p
Ordinary Shares* - Basic and diluted 637,974 14,160,000 4,505p
-------------------------------------- ----------- -------------------------- ----------------
* Adjusted for Oryx using equity accounting.
The Company has also reported an adjusted net asset value per
share, in accordance with its previous method of valuing its
investment in Oryx. The Company has chosen to report this net asset
value per share to show the difference if equity accounting was
used. Equity accounting permits the use of net asset value pricing
for listed assets, which in the case of Oryx, is higher than its
fair value.
The values of Oryx, as at each year end, are as follows:
2021 2020
GBP'000 GBP'000
------------------------------------------------- --------- ---------
Oryx at Fair value (traded price) using IFRS 10 104,321 72,251
Oryx value using Equity Accounting 113,168 89,502
Increase in net assets using Equity Accounting 8,847 17,251
------------------------------------------------- --------- ---------
8 investments at fair value through profit or loss
a) investments at fair value through profit or loss
2021 2020
GBP'000 GBP'000
-------------------------------------------------- --------- ---------
Quoted at fair value:
United Kingdom 532,711 400,401
Overseas 19,868 19,930
-------------------------------------------------- --------- ---------
Total quoted investments 552,579 420,331
Treasury bills 54,615 63,841
Unquoted and loan stock 105,680 116,996
-------------------------------------------------- --------- ---------
investments at fair value through profit or loss 712,874 601,168
-------------------------------------------------- --------- ---------
Listed Unlisted
equities AIM quoted equities Loan stocks Treasury Bills
2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Total GBP'000
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
analysis of
investment
portfolio
movements
Opening
bookcost as at
1 February
2020 101,533 107,375 48,581 42,812 65,252 365,553
Investment
holding
gains/(losses) 125,650 85,773 25,711 (108) (1,411) 235,615
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
opening fair
value as at 1
February 2020 227,183 193,148 74,292 42,704 63,841 601,168
Movements in
year:
Purchases at
cost 20,953 48,482 11,740 1,918 186,027 269,120
Sales -
proceeds (39,333) (31,278) (4,696) (21,445) (194,541) (291,293)
- realised
gains/(losses)
on sales 25,595 13,213 44 - (1,885) 36,967
Investment
holding
(losses)/gains (3,165) 97,781 726 397 1,173 96,912
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
closing fair
value as at 31
January 2021 231,233 321,346 82,106 23,574 54,615 712,874
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
Closing
bookcost as at
31 January
2021 108,748 137,792 55,669 23,285 54,853 380,347
Investment
holding
gains/(losses) 122,485 183,554 26,437 289 (238) 332,527
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
231,233 321,346 82,106 23,574 54,615 712,874
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
Listed Unlisted
equities AIM quoted equities Loan stocks Treasury Bills
2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Total GBP'000
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
analysis of
investment
portfolio
movements
Opening
bookcost as at
1 February
2019 75,357 104,344 42,670 44,728 92,899 359,998
Investment
holding
gains/(losses) 99,462 18,309 24,659 274 (2,006) 140,698
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
opening fair
value as at 1
February 2019 174,819 122,653 67,329 45,002 90,893 500,696
Movements in
year:
Purchases at
cost 34,991 18,973 8,957 9,665 203,140 275,726
Sales -
proceeds (20,579) (4,392) (1,468) (11,193) (231,158) (268,790)
- realised
gains/(losses)
on sales 11,764 (11,550) (1,578) (388) 371 (1,381)
Investment
holding
gains/(losses) 26,188 67,464 1,052 (382) 595 94,917
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
closing fair
value as at 31
January 2020 227,183 193,148 74,292 42,704 63,841 601,168
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
Closing
bookcost as at
31 January
2020 101,533 107,375 48,581 42,812 65,252 365,553
Investment
holding
gains/(losses) 125,650 85,773 25,711 (108) (1,411) 235,615
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
227,183 193,148 74,292 42,704 63,841 601,168
---------------- --------------- ---------------- --------------- --------------- --------------- --------------
2021 2020
GBP'000 GBP'000
-------------------------------------- --------- ---------
analysis of capital gains and losses
Gains/(losses) on sales 36,967 (1,381)
Unrealised gains 96,912 94,917
-------------------------------------- --------- ---------
gains on investments at fair value 133,879 93,536
-------------------------------------- --------- ---------
2021 2020
GBP'000 GBP'000
------------------------------------------ --------- ---------
Exchange (losses)/gains on capital items (37) 104
Exchange (losses)/gains on currency (526) 49
------------------------------------------ --------- ---------
exchange (losses)/gains (563) 153
------------------------------------------ --------- ---------
2021 2020
GBP'000 GBP'000
----------------------- --------- ---------
portfolio analysis
Equity shares 629,292 490,333
Preference securities 5,393 4,290
Loan stocks 23,574 42,704
Treasury Bills 54,615 63,841
----------------------- --------- ---------
712,874 601,168
----------------------- --------- ---------
b) subsidiary undertakings
At 31 January 2021 the Company has the following Subsidiaries
which were active during the year:
Subsidiary Principal activity Equity held Country of registration
--------------------------------------- -------------------------- ------------ -------------------------
Consolidated Venture Finance Limited Investment entity 100% England and Wales
Hampton Investment Properties Limited Property investment 79.65% England and Wales
Oryx International Growth Fund Limited Investment company 52.47% Guernsey
Performance Chemical Company Oil field service company 53.12% United States of America
--------------------------------------- -------------------------- ------------ -------------------------
assessment as an investment entity
Entities that meet the definition of an investment entity within
IFRS 10 Consolidated Financial Statements, are required to measure
their subsidiaries at fair value through profit or loss rather than
consolidate the entities. The criteria which define an investment
entity are as follows:
-- an entity that obtains funds from one or more investors for
the purpose of providing those investors with investment
services;
-- an entity that commits to its investors that its business
purpose is to invest funds solely for returns from capital
appreciation, investment income or both; and
-- an entity that measures and evaluates the performance of
substantially all of its investments on a fair value basis.
The Board have concluded that the Company continues to meet the
characteristics of an investment entity in that it has more than
one investment, it has ownership interests in the form of equity
and similar interests, it has more than one investor and its
investors are not related parties other than those disclosed in
note 15.
c) significant holdings
At the year-end, the Company held 20% or over of the aggregate
nominal value of voting equity of the following companies:
Revenue
Company and Country of reserves for Company Company
address of incorporation Capital and the last holding holding
principal and reserves financial 31 January 31 January
business registration Year end GBP'000 year GBP'000 2021 % 2020 %
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Consolidated
Venture
Finance
6 Stratton
Street,
Mayfair,
London, W1J England and
8LD Wales 31 January 2020 (730) 15 100.00 100.00
EKF
Diagnostics
Holdings Plc
Avon House,
19 Stanwell
Road,
Penarth,
Cardiff, CF64 England and
2EZ Wales 31 December 2020 78,200 15,395 21.54 21.58
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Frenkel
Topping Group
Plc
Frenkel House
15 Carolina
Way, Salford,
Manchester,
United
Kingdom, M50 England and
2ZY Wales 31 December 2020 25,148 1,197 22.30 19.99
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Hampton
Investment
Properties
6 Stratton
Street,
Mayfair,
London, W1J England and
8LD Wales 31 December 2019 12,211 (176) 79.65 70.81
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Hargreaves
Services Plc
West Terrace,
Esh Winning,
Durham,
Durham, DH7 England and
9PT Wales 31 May 2020 130,055 3,701 20.91 7.74
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Harwood England and 31 March 2021 - - 28.57 -
Private Wales (first year end)
Capital UK
L.P.
6 Stratton
Street,
Mayfair,
London, W1J
8LD
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Harwood
Private
Equity Fund
IV
6 Stratton
Street,
Mayfair,
London, W1J England and
8LD Wales 31 December 2020 125,674 2,743 26.28 26.28
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Harwood
Private
Equity Fund V
6 Stratton
Street,
Mayfair,
London, W1J England and
8LD Wales 31 December 2020 31,200 1,045 25.00 25.00
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Oryx
International
Growth Fund
Limited
BNP Paribas
House, St
Julian's
Avenue, St
Peter Port,
Guernsey GY1
1WA Guernsey 31 March 2020 124,872 (8,453) 52.47 51.95
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Performance
Chemical
Company
9105 W
Interstate 20
Midland, TX United States
79706 of America 30 September 2020 $13,424 $591 53.12 53.12
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
Trident
Private
Equity Fund
III LP
6 Stratton
Street,
Mayfair,
London, W1J England and
8LD Wales 31 December 2020 15,120 (346) 38.76 38.76
--------------- --------------- ------------------ -------------- -------------- --------------- ---------------
All the investments detailed above have not been consolidated
into the financial statements due to the Company meeting the
definition of an investment entity under IFRS 10 and therefore
these investments are included at fair value through profit and
loss.
At the year end, the Company held over 3% of the shares in the
following listed companies which were considered to be
material:
%
---------------------------------------- ------
Oryx International Growth Fund Limited 52.47
Frenkel Topping Group Plc 22.30
EKF Diagnostics Holdings Plc 21.54
Hargreaves Services Plc 20.91
AssetCo Plc 19.13
Augean Plc 17.15
Bigblu Broadband Plc 15.54
Odyssean Investment Trust Plc 15.23
TEN Entertainment Group Plc 14.63
Sureserve Group Plc 12.66
MJ Gleeson Plc 8.58
Renalytix AI Plc 8.53
Circassia Group Plc 7.80
Verici DX Limited 7.31
Esken Limited 7.20
Polar Capital Holdings Plc 6.59
SourceBio International plc 5.39
Redcentric Plc 5.25
Tribal Group Plc 4.50
---------------------------------------- ------
d) investments in US treasury bills
At 31 January 2021, the Company held US Treasury Bills with a
market value of GBP54,615,000 (2020: GBP63,841,000).
e) transaction costs
During the year, the Company incurred total transaction costs of
GBP176,000 (2020: GBP183,000) comprising GBP87,000 (2020:
GBP114,000) and GBP89,000 (2020: GBP69,000) on purchases and sales
of investments respectively. These amounts are included in gains on
investments as disclosed in the Statement of Comprehensive
Income.
f) commitment
At 31 January 2021 NASCIT had undrawn capital commitments to
invest GBP32 million (2020: GBP40 million) in Harwood Private
Equity V LP and GBP18.7 million (2020: GBPnil) in Harwood Private
Capital U.K. LP.
9 trade and other receivables
2021 2020
GBP'000 GBP'000
----------------------------- --------- ---------
Amounts due from brokers 169 1,085
Amounts owed by Subsidiary - 90
Accrued income 623 825
Other debtors 1,528 808
Recoverable withholding tax 891 928
----------------------------- --------- ---------
3,211 3,736
----------------------------- --------- ---------
10 trade and other payables
2021 2020
GBP'000 GBP'000
------------------------------------------- --------- ---------
Investment Manager's fees 319 270
Performance fees (incl. VAT) 4,529 784
Amounts due to brokers for share buybacks 182 -
Amounts due to brokers for trades 2,519 771
Other creditors and accruals 224 161
------------------------------------------- --------- ---------
7,773 1,986
------------------------------------------- --------- ---------
11 share capital
2021 2021 2020 2020
Number GBP'000 Number GBP'000
------------------------------------- ----------- --------- ----------- ---------
allotted, called up and fully paid:
Ordinary Shares of 5p:
Balance at beginning of year 14,160,000 708 14,325,620 716
Cancellation of shares (135,482) (7) (165,620) (8)
------------------------------------- ----------- --------- ----------- ---------
Balance at end of year 14,024,518 701 14,160,000 708
------------------------------------- ----------- --------- ----------- ---------
Since 31 January 2021, 24,518 Ordinary Shares have been
purchased by the Company for cancellation. As at the date of
approval of this report, the Company's issued share capital
consists of 14,000,000 Ordinary Shares of 5p nominal value
each.
12 reconciliation of total return before taxation to cash
generated from operations
2021 2020
GBP'000 GBP'000
----------------------------------------------- ---------- ---------
Total return before taxation 130,093 98,852
Gains on investments (133,316) (93,689)
Dividends and interest reinvested (1,901) (2,413)
Share based payment - discharge of options - (276)
Transfer from subsidiary 104 -
Increase in debtors and accrued income (518) (133)
Increase/(decrease) in creditors and accruals 3,843 (1,361)
----------------------------------------------- ---------- ---------
Cash (expended)/generated from operations (1,695) 980
----------------------------------------------- ---------- ---------
13 analysis of net cash and net debt
At 1 February 2020 Exchange movement At 31 January 2021
net cash GBP'000 Cash flow GBP'000 GBP'000 GBP'000
------------------------ ---------------------- ------------------ ----------------------- -----------------------
Cash and cash
equivalents 17,805 16,638 (525) 33,918
------------------------ ---------------------- ------------------ ----------------------- -----------------------
14 financial instruments and capital disclosures
The Company's financial risk management objectives, policies and
strategy can be found in the Strategic Report in the Annual
Report.
The Company's financial instruments comprise its investment
portfolio, cash balances, loan stock and trade receivables and
trade payables that arise directly from its operations.
The main risks arising from the Company's financial instruments
are:
(i) market price risk, including currency risk, interest rate risk and other price risk;
(ii) liquidity risk; and
(iii) credit risk
The Board and Manager consider and review the risks inherent in
managing the Company's assets which are detailed below.
(i) market price risk
The fair value or future cash flows of a financial instrument
held by the Company may fluctuate because of changes in market
prices. This market risk comprises currency risk, interest rate
risk and other price risk. The Board of Directors reviews and
agrees policies for managing these risks through detail and
continuing analysis. The Manager assesses the exposure to market
risk when making each investment decision and monitor the overall
level of market risk on the whole of the investment portfolio on an
ongoing basis.
currency risk
The Company's total return and net assets can be materially
affected by currency translation movements as a significant
proportion of the Company's assets are denominated in currencies
other than Sterling, which is the Company's functional currency. It
is not the Company's policy to hedge this risk on a continuing
basis but the Company may, from time to time, match specific
overseas investment with foreign currency borrowings. The Manager
seeks, when deemed appropriate, to manage exposure to currency
movements on borrowings by using forward foreign currency contracts
as a hedge against potential foreign currency movements. At 31
January 2021, the Company had no open forward currency contracts
(2020: none).
The revenue account is subject to currency fluctuation arising
on overseas income. The Company does not hedge this currency
risk.
Foreign currency exposure by currency of denomination:
31 January 2021 31 January 2020
Overseas Net monetary Total currency Overseas Net monetary Total currency
investments assets exposure investments assets exposure
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------------- ---------------- --------------- ---------------- ---------------- ----------------
US Dollar 106,484 5,079 111,563 118,468 1,946 120,414
Euro 8,504 - 8,504 6,725 - 6,725
----------- ---------------- ---------------- --------------- ---------------- ---------------- ----------------
114,988 5,079 120,067 125,193 1,946 127,139
----------- ---------------- ---------------- --------------- ---------------- ---------------- ----------------
Sensitivity analysis is based on the Company's monetary foreign
currency financial instruments held at each balance sheet date. If
Sterling had moved by 10% against all currencies, with all other
variables constant, net assets would have moved by the amounts
shown below. The analysis is shown on the same basis for 2020.
31 January 2021 31 January 2020
10% weakening GBP'000 10% strengthening GBP'000 10% weakening GBP'000 10% strengthening GBP'000
----------- ---------------------- -------------------------- ---------------------- --------------------------
US Dollar 12,396 (10,142) 13,379 (10,947)
Euro 945 (773) 747 (611)
----------- ---------------------- -------------------------- ---------------------- --------------------------
13,341 (10,915) 14,126 (11,558)
----------- ---------------------- -------------------------- ---------------------- --------------------------
In the opinion of the Directors, the above sensitivity analyses
are not representative of the year as a whole, since the level of
exposure changes frequently as part of the currency risk management
process used to meet the Company's objectives.
interest rate risk
Interest rate movements may affect;
-- the fair value of the investments in fixed interest rate
securities (including unquoted loans); or
-- the level of income receivable on cash deposits;
The possible effects on fair value and cash flows that could
arise as a result of changes in interest rates are taken into
account when making investment decisions.
The Board reviews on a regular basis the values of the fixed
interest rate securities and the unquoted loans to companies in
which private equity investment is made.
Movements in interest rates would not significantly affect net
assets attributable to the Company's shareholders and total
profit.
other price risk
Other price risks (i.e. changes in market prices other than
those arising from currency risk or interest rate risk) may affect
the value of the quoted and unquoted investments.
The Company's exposure to price risk comprises mainly movements
in the value of the Company's investments. It should be noted that
the prices of options tend to be more volatile than the prices of
the underlying securities. As at the year-end, the spread of the
Company's investment portfolio analysed by sector was as set out
earlier in the Annual Report.
The Board of Directors manages the market price risks inherent
in the investment portfolios by ensuring full and timely access to
relevant investment information from the Manager. The Board meets
regularly and at each meeting reviews investment performance. The
Board monitors the Manager's compliance with the Company's
objectives and is directly responsible for investment strategy and
asset allocation.
The Company's exposure to other changes in market prices at 31
January 2021 on its quoted and unquoted investments and options on
investments was as follows:
2021 2020
GBP'000 GBP'000
---------------------------------------------------------------- --------- ---------
Financial assets at fair value through profit or loss
- Non current investments at fair value through profit or loss 712,874 601,168
---------------------------------------------------------------- --------- ---------
As mentioned in the accounting policies note, the Private equity
investments have been valued following the IPEV Valuation
Guidelines. The valuation incorporates all relevant factors that
market participants would consider in setting a price.
Methods applied include cost of investment, price of recent
investments, net assets and earnings multiples. Any valuations in
local currency are converted into sterling at the prevailing
exchange rate on the valuation date.
Although the Manager believes that the estimates of fair values
are appropriate, the use of different methodologies or assumptions
could lead to different measurements of fair values.
Subsequent adjustments in price are determined by the Manager's
Valuation and Pricing Committee.
The table below shows how the most significant unquoted
investments have been valued as at 31 January 2021.
Method of fair value 2021 fair value GBP 2020 fair value GBP
valuation GBP'000 GBP'000
---------------------------- ---------------------------- --------------------------- ---------------------------
Harwood Private Equity Fund
IV Net Assets 34,656 37,524
Performance Chemical
Holdings Common Stock US$ Valuation Multiple 9,916 10,327
Performance Chemical
Holdings Series A
Preferred Stock US$ Cost 3,317 3,454
Coventbridge Group Limited
USD 9% loan Cost 10,133 10,051
Pelsis Holding/Hamsard 3468
Ltd A2 Loan Notes Euro
EUR1 Cost plus accrued interest 5,083 4,016
Pelsis Holding/Hamsard 3468
Ltd A1 Loan Notes Euro
EUR1 Cost plus accrued interest 3,388 2,677
Pelsis Holding/Hamsard 3468
Ltd A4 Ordinary Euro EUR1 Valuation multiple 33 32
Harwood Private Equity Fund Net Assets 7,944 -
V
Trident Private Equity Fund
LP 3 Including Rebate Net Assets 5,874 6,418
Viking Investments LP Net Assets 5,734 4,852
Utitec Holdings Inc US$ -
Loan Stock 12.5% Cost 3,642 3,793
Spring Investment LP (Duke
Street) GBP Net Assets 3,500 3,500
Antler Holdco Limited Fair Value 3,117 -
Antler Holdco Discount Cost 17 -
Notes GBP
Jaguar Holdings Limited
Preference Shares - USD Cost 2,076 2,162
Jaguar Holdings Limited
Ordinary Shares - USD Valuation Multiple 947 1,630
WEP II SIMCO Co-Investment
US$ Net Assets 1,602 1,517
Specialist Components Ltd
GBP 5% Loan Notes Valuation Multiple 1,311 2,622
Specialist Components Ltd
APC Technology Ord GBP1 Valuation Multiple - 118
Harwood Private Capital UK Cost 1,300 -
L.P.
Trellus Health Limited A Valuation Multiple 980 -
Ordinary Shares GBP
Hampton Investment
Properties Ltd New Adjusted Net Assets 742 995
Sherwood Holdings Limited
12.5% PIK Loan Notes Cost - 19,544
Telos Corporation Common
Stock Valuation multiple - 1,315
---------------------------- ---------------------------- --------------------------- ---------------------------
105,312 116,547
Other investments 368 449
---------------------------------------------------------- --------------------------- ---------------------------
105,680 116,996
--------------------------------------------------------- --------------------------- ---------------------------
the valuation techniques applied are based on the following
assumptions:
Unquoted investments are usually valued by reference to the
valuation multiples of similar listed companies or from
transactions of similar businesses. Where appropriate discounts are
then applied to those comparable multiples to reflect difference in
size and liquidity. These enterprise values are then adjusted for
net debt to arrive at an equity valuation. Where companies are in
compliance with the loan note terms these loans are generally held
at par plus accrued interest (where applicable) unless the
enterprise value suggests that the debt cannot be recovered.
Further detail on the valuation of significant investments, are
detailed below:
Trident Private Equity Fund III LP (TPE3), Harwood Private
Equity IV LP (HPE4) and Harwood Private Equity V LP (HPE5)
Held at net asset value, derived from the audited financial
statements of the Funds as at 31 December 2020, as the underlying
investments within TPE3, HPE4 and HPE5 are valued on a fair value
basis. The Directors believe that the movement between the Funds'
measurement dates and the reporting dates are not material. As the
funds have no debts, a change of 10% in the underlying assets would
have a 10% impact on the Funds' carrying value.
Performance Chemical Company - Ordinary Shares and Preferred
Shares
The enterprise value is calculated based on an EBITDA multiple
of 9.9x. A reduction in the multiple by a factor of 1x would reduce
the carrying value of the total investment by US$1.5 million, or
-8%. An increase in the multiple by a factor of 1x would increase
the value of the total investment by US$1.5 million, or 8%. The
preference shares are held at cost.
Coventbridge Group - Loan
The loan is held at par plus accrued interest. The enterprise
value is calculated using an EBITDA multiple of 13x. Neither a
reduction nor an increase in the multiple by a factor of 1x would
impact the carry value of the loan.
Hamsard 3468 Limited - Ordinary Shares and Loan notes
The ordinary shares are valued using an EBITDA multiple of 10.2x
to calculate an enterprise value. The loan notes are held at par
plus accrued interest. A reduction in the multiple by a factor of
1x would reduce the carrying value of the total investment by
EUR1.4 million or 15%. An increase in the multiple by a factor of
1x would increase the value of the total investment by EUR1.6
million or 17%.
The following table illustrates the sensitivity of the profit
after taxation and net assets to an increase or decrease of 10% in
the fair values of the Company's investments. This level of change
is considered to be reasonably possible based on observation of
current market conditions. The sensitivity analysis is based on the
Company's equities and equity exposure through options at each
Balance Sheet date, with all other variables held constant.
2021 2020
Increase in Decrease in Increase in Decrease in
fair value fair value fair value fair value
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ ------------ ------------
Increase/(decrease) in net assets 71,287 (71,287) 60,117 (60,117)
----------------------------------- ------------ ------------ ------------ ------------
(ii) liquidity risk
This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
The Company invests in equities and other investments that are
readily realisable. It also invests in unquoted securities, which
are less readily marketable than equities. These investments are
monitored by the Board on regular basis.
As at 31 January 2021, the majority of the Company's cash is
held in short-term Treasury Bills, which are highly liquid. As a
consequence, the Company could access in excess of GBP55 million
based on the year end exchange rates, within one week.
As the Company is a closed-end company, assets do not need to be
liquidated to meet redemptions and sufficient liquidity is
maintained to meet obligations as they fall due.
(iii) credit risk
Other than its investment in US Treasury Bills, the Company does
not have any significant exposure to credit risk arising from any
one individual party. Credit risk is spread across a number of
counterparties, each having an immaterial effect on the Company's
cash flows, should a default happen. The Company assesses the
credit worthiness of its debtors from time to time to ensure they
are neither past due or impaired.
The maximum exposure of the financial assets to credit risk at
the Balance Sheet date was as follows:
2021 2020
GBP'000 GBP'000
----------------------------------------------- --------- ---------
financial assets neither past due or impaired
Fixed income securities 23,574 42,704
Preference shares 2,162 4,290
Treasury Bills 54,615 63,841
Accrued income and other debtors 3,211 3,736
Cash and cash equivalents 33,918 17,805
----------------------------------------------- --------- ---------
117,480 132,376
----------------------------------------------- --------- ---------
The maximum credit exposure of financial assets represents the
carrying amount.
There are no financial assets that are past due or impaired.
commitments giving rise to credit risk
There are no commitments giving rise to credit risk as at 31
January 2021.
fair value of financial assets
The Company measures fair values using the fair value hierarchy
that reflects the significance of the inputs used in making the
measurements of the relevant assets as follows:
-- Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
-- Level 2 - Inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from
prices).
-- Level 3 - Inputs for the asset or liability that are not
based on observable market data (unobservable inputs). See note 1e)
for details on how the value of level 3 investments are
calculated.
The Company's main unobservable inputs are earnings multiples,
recent transactions and net asset basis. The market value would be
sensitive to movements in these unobservable inputs. Movements in
these inputs, individually or in aggregate could have a significant
effect on the market value. The effect of such a change or a
reasonable possible alternative would be difficult to quantify as
such data is not available.
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement in its entirety. For this purpose, the
significance of an input is assessed against the fair value
measurement in its entirety. If a fair value measurement uses
observable inputs that require significant adjustment based on
unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value
measurement in its entirety requires judgement, considering factors
specific to the asset or liability.
The Company considers observable data from investments actively
traded in organised financial markets, fair value is generally
determined by reference to Stock Exchange quoted market bid prices
at the close of business on the Balance Sheet date, without
adjustment for transaction costs necessary to realise the
asset.
The table below sets out fair value measurements of financial
assets in accordance with the IFRS 13 fair value hierarchy
system:
financial assets at fair value through profit or loss
At 31 January 2021
Total Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- --------- ---------
Equity investments 634,685 552,579 - 82,106
Fixed interest investments 78,189 54,615 - 23,574
---------------------------- --------- --------- --------- ---------
total 712,874 607,194 - 105,680
---------------------------- --------- --------- --------- ---------
At 31 January 2020
Total Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- --------- ---------
Equity investments 494,623 420,331 - 74,292
Fixed interest investments 106,545 63,841 - 42,704
---------------------------- --------- --------- --------- ---------
total 601,168 484,172 - 116,996
---------------------------- --------- --------- --------- ---------
A reconciliation of fair value measurements in Level 3 is set
out below.
level 3 financial assets at fair value through profit or
loss
At 31 January 2021
Total GBP'000 Equity investments GBP'000 Fixed interest investments GBP'000
------------------------------------ -------------- --------------------------- -----------------------------------
Opening fair value 116,996 74,292 42,704
Purchases 13,658 11,740 1,918
Sales (26,141) (4,696) (21,445)
Total gains/(losses) included in
gains on investments
in the Statement of Comprehensive
Income:
- on assets sold 44 44 -
- on assets held at the end of the
year 1,123 726 397
------------------------------------ -------------- --------------------------- -----------------------------------
closing fair value 105,680 82,106 23,574
------------------------------------ -------------- --------------------------- -----------------------------------
capital management policies and procedures
The Company's capital management objectives are:
-- to ensure that the Company will be able to continue as a going concern; and
-- to maximise the income and capital return to its equity
shareholders through an appropriate balance of equity capital and
debt. The policy is that gearing should not exceed 30% of net
assets.
The Company's capital at 31 January comprises:
2021 2020
GBP'000 GBP'000
-------------------------------------- --------- ---------
debt - -
equity
Equity share capital 701 708
Retained earnings and other reserves 741,529 620,015
-------------------------------------- --------- ---------
742,230 620,723
-------------------------------------- --------- ---------
debt as a % of net assets 0.0% 0.0%
The Board, with the assistance of the Manager monitor and
reviews the broad structure of the Company's capital on an ongoing
basis. This review includes:
-- the planned level of gearing, which takes account of the Manager's views on the market;
-- the need to buy back equity Shares for cancellation, which
takes account of the difference between the net asset value per
share and the Share price (i.e. the level of share price discount
or premium);
-- the need for new issues of equity Shares; and
-- the extent to which revenue in excess of that which is
required to be distributed should be retained.
capital requirement
The Company's objectives, policies and processes for managing
capital are unchanged from the preceding accounting period.
15 related party transactions
Harwood Capital LLP is regarded as a related party of the
Company due to Christopher Mills, the Company's Chief Executive and
Investment Manager being a member of Harwood Capital LLP until 9
June 2015 and the ultimate beneficial owner. Harwood Capital LLP
acts as Investment Manager or Investment Adviser of the following
companies in which the Company has an investment and from which
companies it receives fees or other incentives for its
services:
2021 2020
Services GBP'000 GBP'000
---------------------------------------- --------------------- --------- ---------
Oryx International Growth Fund Limited Investment Advisory 2,289 1,843
Trident Private Equity III LP Investment Advisory 146 147
Harwood Private Equity IV LP Investment Advisory 2,446 3,052
Harwood Private Equity V LP Investment Advisory 2,111 -
---------------------------------------- --------------------- --------- ---------
The amounts payable to the Manager are disclosed in note 3. The
relationships between the Company, its Directors and the Manager
are disclosed in the Report of the Directors in the Annual
Report.
Christopher Mills is Chief Executive Officer and indirectly a
member of Harwood Capital LLP. He is also a director of Oryx. GFS
is a wholly-owned subsidiary of Harwood Capital Management Limited,
which is the holding company of the Harwood group of companies and
is, in turn, 100% owned by Christopher Mills. Harwood Capital
Management Limited is also a Designated Member of Harwood Capital
LLP, the Administrator of the Company.
Fees from Odyssean Investment Trust Plc and Harwood Private
Capital UK LP go to Odyssean Capital LLP (OCLLP) and Harwood
Private Capital LLP (HPCLLP) respectively. Both OCLLP and HPCLLP
are 50:50 JVs between Harwood Capital Management Ltd and Stuart
Widdowson, for OCLLP, and Haseeb Aziz, for HPCLLP.
transfer of assets from subsidiary
During the year to 31 January 2021, the Company received a
transfer of cash and assets from its subsidiary company,
Consolidated Venture Finance, amounting to GBP104,000 (2020:
nil).
disclosure of interests
Christopher Mills is also a director of the following companies
in which the Company has an investment or may have had in the year
and/or from which he may receive fees or hold shares: AssetCo plc,
Augean plc, Bigblu Broadband plc, Coventbridge Group Limited, EKF
Diagnostics Holdings Plc, Frenkel Topping Group plc, Hampton
Investment Properties Limited, Jaguar Holdings Limited, M J Gleeson
Group plc, Oryx, Pelsis/Hamsard, Renalytix Al Plc, SourceBio
International plc, Sunlink Health Systems Inc, SureServe Group plc,
Ten Entertainment Group Plc and Utitec Holdings Inc. Employees of
the Manager may hold options over shares in investee companies. A
total of GBP435,000 (2020: GBP411,000) in directors fees was
received by Christopher Mills during the year under review.
No formal arrangements exist to avoid double charging on
investments held by the Company which are also managed or advised
by Christopher Mills (Chief Executive) and/or Harwood Capital LLP.
Members and certain private clients of Harwood Capital LLP, and its
associates (excluding Christopher Mills and his family) hold 83,924
shares in the Company (2020: 83,924).
Members, employees, institutional clients and private clients of
Harwood Capital LLP may co-invest in the same investments as the
Company.
From time to time Directors may co-invest in the same
investments as the Company.
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END
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