Annual Financial Report, 31 December 2022
Allianz Technology
Trust PLC
Investment objective
Allianz Technology Trust PLC (‘the Company’) invests
principally in the equity securities of quoted technology
companies on a worldwide basis with the aim of
achieving long-term capital growth in excess of the Dow
Jones World Technology Index (sterling adjusted, total
return) (the ‘benchmark’).
Investment policy
The investment policy of the Company is to invest in a
diversified portfolio of companies that use technology
in an innovative way to gain competitive advantage.
Particular emphasis is placed on companies that are
addressing major growth trends with innovation that
replaces existing technology or radically changes
products and services or the way in which they are
supplied to customers.
What constitutes a technology stock
Technology has become a vast and diverse sector. It
encompasses those companies that sell technology
solutions – from cloud storage to component
manufacturers to software developers – but also those
for whom technology is an intrinsic part of their business
– the car makers or ecommerce groups using technology
to gain a competitive advantage. In this way, technology
stocks may sit across multiple sectors, including
healthcare, industrials or financial services.
As technology becomes ever more pervasive, the lines
between technology companies and significant adopters
are increasingly blurred. Even where companies aren’t
selling technology, technology may be intrinsic to their
success as a company. More companies are becoming
technology companies all the time as disruptive
innovation brings change and displaces incumbent
market leaders. The challenge is to understand not only
current technologies, but also future trends and the likely
effects.
Asset allocation
The Investment Manager does not target specific country
or regional weightings and aims to invest in the most
attractive technology shares on a global basis. The
lead portfolio manager aims to identify the leading
companies in emerging technology growth sub-sectors.
The majority of the portfolio will comprise mid and large
cap technology shares.
Risk diversification
The Company aims to diversify risk and no holding in the
portfolio will comprise more than 15% of the Company’s
assets at the time of acquisition. The Company aims to
diversify the portfolio across a range of technology sub-
sectors.
Gearing
In normal market conditions gearing will not exceed 10%
of net assets but may increase to 20%. The Company’s
Articles of Association limit borrowing to one quarter of its
called up share capital and reserves. As at 31 December
2022 there was no borrowing facility in place.
Liquidity
In normal market conditions the liquidity of the portfolio,
that is the proportion of the Company’s net assets held
in cash or cash equivalents, will not exceed 15% of net
assets but may be increased to a maximum of 30% of net
assets.
Derivatives
The Company may use derivatives for investment
purposes within guidelines set down by the Board.
Foreign currency
The Company’s current policy is not to hedge foreign
currency.
Benchmark
One of the ways in which the Company measures its
performance is in relation to its benchmark, which is an
index made up of some of the world’s leading technology
shares. The benchmark used is the Dow Jones World
Technology Index (sterling adjusted, total return). The
Company’s strategy is to have a concentrated portfolio
which is benchmark aware rather than benchmark
driven. The Company has tended to have a significantly
higher than benchmark allocation to high growth, mid
cap companies which are considered to be the emerging
leaders in the technology sector. The Investment
Manager believes that the successful identification of
these companies relatively early on in their growth stages,
offers the best opportunity for outperformance over the
long-term.
Key Information
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Overview
Contents
Overview
IFC Key Information
2 Financial Highlights
5 Chairman’s Statement
Investment Manager’s Review
10 Investment Manager’s Review
14 Investment Portfolio
Strategic Report
16 Strategic Report
22 Section 172 Report: Engagement with Key Stakeholders
24 Environmental, Social, Governance (ESG) Research and
Stewardship
Directors’ Review
26 Directors
28 Directors’ Report
36 Corporate Governance Statement
40 Report of the Management Engagement Committee
41 Report of the Nomination Committee
42 Report of the Remuneration Committee
43 Directors’ Remuneration Implementation Report
46 Directors’ Remuneration Policy Report
47 Statement of Directors’ Responsibilities
48 Audit & Risk Committee Report
Financial Statements
51 Independent Auditor’s Report to the Members of Allianz
Technology Trust PLC
56 Income Statement
57 Balance Sheet
58 Statement of Changes in Equity
59 Notes to the Financial Statements
Investor Information
72 Glossary of UK GAAP Performance Measures
and Alternative Performance Measures
73 Glossary of Terms
74 Investor Information
77 Notice of Meeting
Welcome to your new style
Annual Financial Report.
You may notice that the Allianz Technology Trust 2022
Annual Financial Report (‘AFR’) looks markedly different
from previous versions. The Board has been conscious
for many years that public company AFRs have become
weighty and expensive documents. At the same time the
actual readership of hard copy AFRs has declined and the
very large majority of shareholders and other interested
parties only access AFRs online.
Over the past several years the Board has made efforts
to include additional information on the technology
sector that may be of interest to shareholders, but also
to make more of this information available online via a
complementary microsite. Having done this (successfully,
we hope) for the past two years, we believe that the
responsible next step is to focus on making as much as
possible available in an electronic format – we are calling
it the ‘Stakeholder Report’ – with the ‘paper’ document
reduced to its essentials.
We welcome feedback from both shareholders and other
users of the AFR on the new style reporting.
Please do have a look at this year’s deeper dive into
the technology sector at tinyurl.com/ATT-stakeholder-
report-22 or by using your tablet or smartphone camera
to scan the QR code below.
1
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Performance against sector average
1
Benchmark
-26.4%
2022 1,832.2
2021 2,489.3
Share price per ordinary share
-40.4%
2022 210.0p
2021 352.5p
Performance against benchmark
1
Financial Highlights
As at 31 December for each respective year
1250
50
Dec 12 Dec 22
% indexed
1250
50
Dec 12 Dec 22
% indexed
Allianz Technology Trust
2
Benchmark
3
Allianz Technology Trust
2
Sector average
4
Net asset value (‘NAV’) per ordinary share
-33.6%
2022 231.0p
2021 347.9p
2
Overview
Shareholders’ funds (£m)
NAV versus benchmark (%)
NAV per ordinary share (p)
Allianz Technology Trust
2
Benchmark
3
Premium (discount) of ordinary share price to
NAV per share (%)
Ordinary share price (p)
As at 31 December for each respective year
Comparative figures for 2018, 2019 and 2020 have
been restated following the sub-division of 25p
ordinary shares into ten ordinary shares of 2.5p each
on 4 May 2021.
1
10 years to 31 December 2022. Rebased to 100 at
1 December 2011.
2
Allianz Technology Trust – Net Asset Value –
undiluted.
3
Dow Jones World Technology Index (sterling
adjusted, total return).
4
Peer group of Morningstar Global Technology
Sector Equity.
Source: AllianzGI/Datastream. 2018 figures are over
a 13 month period.
The Alternative Performance Measures (‘APMs’) can
be found on page 72.
2022
938.9
2018 2019 2021
1,472.4
430.1
583.4
2020
1,229.2
2022
210.0
2018 2019 20212020
352.5
122.0
164.7
297.0
2022
231.0
2018 2019 2021
347.9
128.5
165.4
2020
291.3
20222018 2019 2021
1.3
(5.0)
(0.4)
(9.1)
2020
2.0
20222018 2019 2021
9.0
28.8
19.4
-33.6
39.0
28.2
-26.4
0.1
2020
76.1
41.7
3
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Financial Summary
As at
31 December
2022
As at
31 December
2021 % change
Net Asset Value per Ordinary Share 231.0p 347.9p -33.6
Ordinary Share Price 210.0p 352.5p -40.4
(Discount) premium of Ordinary Share Price to Net Asset Value (9.1%) 1.3%
Dow Jones World Technology Index (sterling adjusted, total return) 1,832.2 2,489.3 -26.4
Shareholders' Funds £938.9m £1,472.4m -36.2
For the
year ended
31 December
2022
For the
year ended
31 December
2021 % change
Net Revenue Return per Ordinary Share (0.45p) (1.20p) +63.0
Ongoing charges
* 0.70% 0.69% +1.4
* As defined in the APMs on page 72.
Five year performance summary
31 December
2022
31 December
2021
31 December
2020
31 December
2019
30 November
2018
†
Shareholders' Funds £938.9m £1,472.4m £1,229.2m £583.4m £430.1m
Net Asset Value per Ordinary Share 231.0p 347.9p 291.3p 165.4p 128.5p
Ordinary Share Price 210.0p 352.5p 297.0p 164.7p 122.0p
Dow Jones World Technology Index (sterling adjusted, total return) 1,832.2 2,489.3 1,941.1 1,369.9 985.8
(Discount) premium of Ordinary Share Price to Net Asset Value (9.1%) 1.3% 2.0% (0.4%) (5.0%)
Comparative figures have been restated following the sub-division of 25p ordinary shares into ten ordinary shares of 2.5p each on 4 May 2021.
† The 2018 figures are over a 13 month period.
4
Overview
Chairman’s Statement
Dear Shareholder
A hard year
The past year has been a particularly hard one for technology investors against a wide backdrop of
economic and geopolitical difficulties. The Russian invasion of Ukraine has turned into a protracted
conflict with a large human toll. Inflationary pressures had been building for some time but the
war has set off dramatic increases in energy and food prices, fuelling inflation and depressing both
consumer and business confidence.
Central banks have responded to rising inflation by raising interest rates. These rising rates had a
direct impact on investments – money is no longer cheap or easy to raise as it had been for so long
with interest rates at near-zero. Where, in the era of quantitative easing, investors had piled into
growth stocks, keen to gain access to the best future returns, now there is much more scepticism
about the reality of those returns and the discount rates have risen dramatically. As valuations have
fallen, more money has moved away from such stocks as investors instead favoured nearer-term
cashflows and reliable income streams.
Performance against this backdrop
Technology stocks have been at the epicentre of these valuation changes. As previously reported,
in the first half of 2022 our strategic overweight positions in stocks with high growth potential were
hardest hit by the market sell-off and hence the portfolio fell by more than the significant fall in
its benchmark. More recently performance across technology stocks, whilst weak compared to
the general market, has been more mixed. The Board remains satisfied that the differentiated
strategy which the Investment Manager continues to follow should be the source of longer-term
outperformance and that the current situation should not be a driver to make any wholesale
change to that strategy.
Over the year, the Company’s Net Asset Value (‘NAV’) per share fell by 33.6%, whilst our benchmark
index, the Dow Jones World Technology Index (sterling adjusted, total return) also fell, but by 26.4%.
This resulted in underperformance of 7.2 percentage points with all of the underperformance
occurring during the first half of the year.
The market price of the Company’s shares fell by 40.4% over the year, from 352.5p (31 December
2021) to 210.0p (31 December 2022) as the rating of the Company’s shares moved from a small
premium at the end of 2021 to a discount of 9.1% at the end of 2022. The Board is disappointed
to see this significant derating of the Company’s shares but notes that it is in line with rating
movements implicit in the share prices of other larger investment companies focusing on high
growth opportunities.
No dividend is proposed for the year ended 31 December 2022 (2021: nil). Given the nature of the
Company’s investments and its stated objective to achieve long-term capital growth, the Board
continues to consider it unlikely that any dividend will be declared in the near future.
Your Board continues to consider the use of borrowing and gearing. Although we have this flexibility,
to date our assessment has been not to take on this additional risk.
Portfolio management team and corporate management changes
In my reports last year I wrote about the transition of lead portfolio manager role from Walter Price
to Mike Seidenberg with effect from 1 July 2022 and also provided details of the changes to the
structuring of the investment management arrangements arising from the sale of Allianz Global
Investors GmbH (‘AllianzGI’) US investment operations to Voya Investment Management Co LLC
(‘Voya’) – see page 28. The Board took careful steps to be satisfied that each of these changes
was in the best interests of shareholders prior to granting its approval.
5
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
As you may be aware the Board has generally visited San Francisco every couple of years to spend
time with the investment managers on their home ground. The pandemic interrupted this pattern
but the delayed visit that took place last September proved very timely in the light of the significant
changes referred to in the previous paragraph. The Board was able to spend time with all the
members of Voya’s San Francisco based Global Technology Team and also meet with other Voya
senior executives. These meetings provided further reassurance to the Board.
In summary I am pleased to report that both the lead portfolio manager and Investment Manager
changes appear to have proceeded smoothly.
The dichotomy of current demand versus future potential
There is no doubt that lofty valuations of technology stocks have been challenged over the past
year, however it is also true that many technology companies remain robust in terms of their day-
to-day business, if not in the valuation of their equity. The main driving themes for technology most
certainly persist: large scale movement of legacy IT systems to cloud architecture, cybersecurity in
the face of criminals’ and nation states’ efforts to steal or disrupt, and labour shortages to name just
a few. There are also many emerging technologies and themes as companies and innovators look
to create the next disruptive technology.
As an example, can readers be sure that this year’s statement was written by me and not by an
Artificial Intelligence (‘AI’) tool? In this instance I can assure you it was written by me, however there
is currently much debate and coverage around tools such as ChatGPT and other AI applications.
Citing this is not meant as any commentary on the potential of a company developing software
as a future holding – and our investment manager is in a much better position to comment on the
potential (or not) of such companies to be portfolio holdings in the future. What it does demonstrate
though is the unstoppable development of technology and that it is unlikely to slow anytime soon.
The possibility of such a tool writing this report is real given the right prompts into the tool. Indeed,
some commentators postulate that these tools can answer university degree questions with some
success and articles have already started to foretell a change in the way we will work in the future.
Microsoft is certainly taking it seriously, investing $1bn in OpenAI, the developer, in 2019 to gain
exclusivity over the product with the aim of bolstering its embedded search engine, Bing.
Microsoft believes that OpenAI’s artificial intelligence tools and platforms have the potential to
significantly improve its search engine capabilities, offering more accurate and better-tailored
search results. Microsoft also believes that OpenAI’s AI technology could help it create more efficient
and powerful cloud-based services, enabling it to better serve its customers and reach new markets.
Microsoft’s investment in OpenAI is an indication of how seriously the tech giant is taking AI, and
how it wants to make sure it’s always at the cutting edge of the technology.
That last paragraph was generated by AI using GPT-3, but I promise you the rest was from the
human mind!
Investment Manager’s Review
As ever, my statement is not intended to substitute for the Review from the Investment Manager and
I would urge you to read the in-depth explanations of the factors affecting performance from the
team starting on page 10.
ESG
As you will be aware, the Investment Manager considers ESG risks as part of the stock analysis and
investment management process. The Board were able to see the process in action during their
visit to San Francisco, including visiting a selection of investee companies and hearing how they are
dealing with ESG issues from a business management perspective.
The Board remains cognisant of investors’ concerns and desire to understand better the broader
impact of the investment choices that they make. Given the nature of the Company, the Board
consequently engages closely with the related policies and processes of Voya as the Investment
Manager and AllianzGI UK as the AIFM.
6
Overview
How do we compare with our peers and other indices?
The Strategic Report on page 16 contains full details of the comparative data that in the past we
have included in this Statement. In summary the Company’s performance is very strong over longer
time periods.
The costs of running your Company
Your Board has maintained its close attention to the costs of running the Company. In a year in
which NAV has fallen substantially, I am pleased to report that the Company’s Ongoing Charges
Figure (‘OCF’), which is calculated by dividing ongoing operating expenses by the average NAV,
has only risen very marginally from 0.69% to 0.70%. This follows a sustained reduction in OCF over
previous years. The management fees payable in 2022 were moderated by being calculated on the
market value of the Company and not the NAV.
The OCF excludes any performance fee due to the manager. Once again no performance fee
has been earned in 2022 due to continued underperformance against the benchmark. It should
be noted that the underperformance suffered over the past two years will have to be made back,
as well as the NAV once again exceeding the level at the end of 2020 (which set a new high
watermark) before any future performance fee can be accrued.
Transactions in own shares
The Board is pleased to both issue shares when there is sufficient investor demand, and to
consider buying back shares when the shares trade at a significant discount. Currently we would
consider buying back shares during periods where the discount is consistently over 7% and it is
felt appropriate to do so given the prevailing market backdrop. For significant periods of 2022
the discount has been in excess of that level and buybacks have been executed accordingly on a
frequent basis.
Overall, market purchases of £39 million of shares were undertaken, at an average discount of
12.18%. All shares repurchased over the period have been held in treasury rather than cancelled
as this makes them readily available to be reissued if sufficient demand occurs in the future. The
repurchase of shares during the year enhanced the NAV by 44bps.
At the forthcoming AGM, the Board proposes both a renewal of the usual 10% authority to issue
new shares and also a renewal of the authority to issue an additional 10% in order to avoid the cost
of a further General Meeting should the 10% authority be exhausted as has happened previously
when demand was high. The Board recommends that Shareholders vote in favour of both of the
proposed resolutions.
The Board will continue to consider the issuance of new shares subject to shares only being issued
at a premium to NAV and if the Board is satisfied that the issuance is in the best interests of existing
shareholders. Similarly, any buy back of shares will also be subject to the criteria set out above being
met and where it is felt to be beneficial to shareholders.
Alternative Investment Fund Manager (‘AIFM’)
As we had notified shareholders in 2022, our management contract with AllianzGI for investment
management (delegated to Voya), accounting, company secretarial and administrative services
as AIFM of the Company is due to transfer to Allianz Global Investors UK Limited (‘AllianzGI UK’)
which is a new FCA authorised and regulated UK entity taking on all activities of the UK Branch of
AllianzGI. This change is occurring as a result of the UK leaving the EU and is to take place once
the legal set up is arranged to ensure compliance with the regulatory regime. The Board is assured
that there will be no change to the portfolio management services (delegated to Voya) nor to the
administration services received by the Company. There will be no increase in the management or
administrative expenses of the Company as a consequence of this change. Details of the existing
arrangement with the AIFM are on page 28.
7
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Awards and shareholder communications
Despite the continuing challenges for the Company this year in performance terms, the Board
was delighted to once again in 2022 be awarded “Best Report and Accounts (Specialist)” by the
AIC, having previously won the same award in 2021, 2020 and 2018. The Board tries to continually
evolve in terms of this key shareholder communication piece and this year you will see further, wider-
ranging changes.
We do hope you will take the time to visit the full Stakeholder Report housed at www.
allianztechnologytrust.com and that you find it of interest. We welcome feedback from both
shareholders and other readers on our new reporting.
Board matters
As previously announced Katya Thomson was appointed to the Board last July and has now
succeeded Humphrey van der Klugt as Chairman of the Audit & Risk Committee with effect from 1
January 2023. I am pleased to confirm that Humphrey continues as a non-executive Director and
Senior Independent Director.
I will be stepping down as Chairman and non-executive Director at the Company’s forthcoming
AGM and therefore will not stand for re-election. The Board, overseen by Humphrey van der
Klugt, the Senior Independent Director, has agreed that Tim Scholefield who has been a Director
since December 2021, be appointed as Chairman at the conclusion of that meeting. Tim has
already made a strong contribution to the Board, and I believe that shareholders should have full
confidence in their Board going forward.
I confirm that the annual Board and Manager performance appraisal process, conducted internally
this year, concluded that the Board has continued to work in an effective manner. In accordance
with the AIC code, all Directors with the exception of me, are proposed for election/re-election.
Annual General Meeting arrangements
This year’s AGM will be held on 26 April 2023 at 2.30pm. The full Notice of Meeting can be found on
page 77.
The AGM will be a hybrid meeting, meaning shareholders can either attend physically or online.
However, after two years of trialling online voting, we will not be providing that service again for
the 2023 meeting. This is due to the relatively high cost to enable the service not having been
matched by shareholder take up of the service over the past two years. Should there be reasonable
demand emerging from shareholders in the future for online voting then we will look at a possible
reintroduction. For this reason, we strongly encourage all shareholders to submit their votes by the
proxy voting process by the deadline of 24 April 2023 as detailed in the Notice of Meeting on page
77. Those shareholders attending virtually will be able to view the AGM and submit questions
electronically.
The Board encourages shareholders to attend the AGM if possible. A presentation by the Investment
Manager will be made at the start of the meeting. For those unable to attend either physically or
virtually, this will be posted to the Company’s website as soon as practicable after the event.
The Board looks forward to welcoming shareholders to this year’s event.
Your vote counts
We would like to take the opportunity to remind shareholders that you have the right to vote on
important matters that affect your Company, such as the election of directors and the proposed
renewal of share issuance authorities. We feel it is important that shareholders are encouraged to
make their voices heard by voting on all business matters. Instructions on how to vote your shares
can be found on page 79.
As the vast majority of individual shareholders hold their shares on an investment platform in a
nominee account, we are pleased to see continuing action from some of the larger platforms to
enable nominee shareholders to access relevant documentation and record their votes.
8
Overview
Outlook
It is difficult, if not impossible, to predict what might happen with the geopolitical landscape as
well as with the global economy as we move forward through 2023. As I write, the war in Ukraine
continues, unfortunately with no obvious end in sight yet, and other significant geopolitical tensions
also persist.
There is some evidence of inflationary pressures easing from a macro perspective, but whilst
markets have already made some positive moves on expectation of possible easing interest rates,
there is also conflicting rhetoric from many central banks which indicate the easing may not be as
swift or widespread as some would hope.
Despite recent volatility the long-term secular growth story for technology investing remains intact
and is powerful. Returns are likely to accrue disproportionately to a small number of ‘winners’
and this should reward an active, and probably patient, style of portfolio management. We have
confidence in the Investment Manager’s ability to drive long-term relative performance through
the team’s high conviction expertise as they continue to focus on identifying trends that have the
potential to uncover tomorrow’s Apple or Microsoft.
Robert Jeens
Chairman
10 March 2023
9
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Investment Manager’s Review
2022 started with fresh optimism that the world
economy would, at last, start to emerge from
the shadow of the pandemic. That optimism
quickly faded as Russia’s invasion of the Ukraine
plunged the world into another crisis. It fuelled
a mounting inflation problem that forced major
central banks across the world to raise interest
rates. It proved a challenging backdrop for
financial markets, and the technology sector in
particular.
The reverberations from the war in Ukraine were
felt across the world. The sanctions imposed
on Russia as a result of the invasion pushed up
energy costs, which were reflected in higher
inflation figures. The war exaggerated existing
fault lines in the US/China relationship and
inflamed geopolitical tensions more widely.
Countries started to increase protectionism,
particularly around key technologies such as
semiconductors.
The war’s impact on energy prices and inflation
proved the most immediate problem. The
US Consumer Price Index rose steadily from
7% in January to a peak of 9.1% in June. Early
assessment that inflation would be transitory
proved misplaced and the Federal Reserve
(‘Fed’) was forced into rapid action. The US Fed
funds rate moved from a range of 0.25-0.5% at
the start of the year to a range of 4.25%-4.5%
by December, pushing borrowing costs to their
highest level since 2007.
The Fed continued to talk tough on inflation even
as pressures started to ease in the second half
of the year. In the December meeting Fed chair
Jay Powell said: “Historical experience cautions
strongly against prematurely loosening policy.
I wouldn’t see us considering rate cuts until the
committee is confident that inflation is moving
down to 2% in a sustained way.” With inflation
still at 7.1% by the end of the year, there was still
some way to go.
Part of the problem has been wage inflation.
Employment levels have remained high, which
has created wage pressures. Nevertheless,
strength in the jobs market has helped cushion
the hit from higher inflation and interest rates
for the economy. The IMF forecasts that global
growth will slow from 6.0% in 2021 to 3.2%
in 2022 and 2.7% in 2023. It said: “This is the
weakest growth profile since 2001 except for
the global financial crisis and the acute phase
of the COVID-19 pandemic.”
The Euro area has been most affected by the
energy crisis and growth is expected to fall
to just 0.5% in 2023, with many of its major
economies in recession. The US is also widely
expected to experience recession in the year
ahead. For emerging and developing Asia,
much will depend on the relative strength of
China, which continued to be held back by
Covid restrictions for much of the year. By the
end of the year, it had relaxed its zero-Covid
policy and there were hopes that its economy
could revive.
There were a number of notable legislative
initiatives in 2023. In the US, the Inflation
Reduction Act allocated significant funding
for green energy initiatives and domestic
energy investment. The CHIPS and Science Act
sought to encourage domestic production of
semiconductors and exclude unfriendly foreign
powers from the technology ecosystem. In the
EU, the RePower EU initiative brought more
funding for renewable energy, as European
powers sought to wean themselves off Russian
fossil fuels. Largely overlooked in 2022, these
may set the tone for economic development in
the year ahead.
Stock markets
This uncertain backdrop led to significant
weakness in global financial markets. Markets
were already wobbling at the end of 2021, and
in 2022, the FTSE World Index dipped 6% from
2,774 to 2,603 over the year. The technology
sector was particularly weak, as higher interest
rates pushed investors to reappraise valuations.
High valuations had been sustained by a very
low risk-free interest rate, which had seen the
long-term cashflows they offered highly prized
by investors. In a climate of rising interest
rates, these cashflows were worth less. The
fastest growing companies – where more of
their valuation was tied up in future revenues
- proved particularly vulnerable. Even though
many companies continued to deliver high
growth and outpace earnings expectations, it
held back their share price progress.
The year was generally characterised by a
growing gap between operational and share
price performance, but there were some weak
spots on earnings. Amazon, for example,
struggled as the consumer environment
weakened, while Meta’s foray into the
metaverse proved more expensive and less
10
Investment
Manager’s
Review
remunerative than hoped. Companies exposed
to advertising revenues proved vulnerable as
economic growth slipped, including Alphabet.
Nevertheless, there were also pockets of
resilience. Demand for iPhones held up,
supporting Apple’s earnings, while Microsoft’s
cloud computing division helped earnings for
the wider business.
Stock markets had started to recover by the
end of the year in response to stronger signs on
inflation. This may be premature. The Federal
Reserve remains committed to further rate rises
and there are relatively few signs of weakness in
the all-important labour market. However, there
can little doubt that the majority of the rate rises
are now in the past and markets substantially
reflect the new environment. Valuations are
significantly lower than a year ago.
Key themes
Interest rates
2022 was a year when everyone was watching
the Fed. The fortunes of individual companies
appeared to matter less than the latest
comments from Chair Jay Powell as investors
tried to judge whether central banks would
be able to fight inflation without collapsing
the economy. Financial markets were slow to
recognise the Federal Reserve’s commitment to
curbing inflation, but were ultimately forced to
accept the reality of higher rates.
It is not yet clear whether the Federal Reserve
will manage to engineer a ‘soft landing’ for
the US economy. If inflation continues to fall,
investors can expect a more benign interest
rate environment in 2023. It is likely that there
will be further rate rises, but these are expected
by markets and the significant adjustment
necessary in 2022 is unlikely to be repeated.
Considerable uncertainty remains for the global
economy.
Geopolitics
Geopolitical tensions have been a growing
feature of global trade in recent years, but the
problems accelerated in 2022. Russia’s invasion
of Ukraine saw many countries pick sides and
put the US and China in opposing camps.
There is now a recognition that globalisation is
reversing.
This has significant implications for the
corporate sector, with companies increasingly
prioritising security of supply over cost.
Companies have brought manufacturing back
to the US, increased inventories and re-routed
supply chains.
There are opportunities in key sectors:
manufacturing closer to home is likely to be
more expensive, so companies are turning
to automation, bringing opportunities in
areas such as robotics. As countries bring in
protectionist policies, companies are making
investments. In response to the CHIPS and
Science Act, Micron was emboldened to invest
in supply. It will build a new $20bn chip factory
in Clay, New York to take advantage of the new
subsidies.
Value versus growth
Companies with high growth have been in the
ascendancy over the past decade. There can
be little doubt that 2022 marked the start of
a different environment. Even if inflation falls,
the world is unlikely to revert to previous low
interest rates. Markets had to make this painful
adjustment in 2022, which partially explains the
weakness of technology and the strength of
‘value’ parts of the market.
However, this does not mean that markets
will not recognise growth in the years ahead.
The growth versus value debate will remain
pertinent, but with the major adjustment to
interest rates now in the past, we expect an
environment where stock characteristics play a
bigger role than macroeconomic factors.
Performance
This was unquestionably a tough year for the
Company, both in relative and absolute terms.
The Company’s net asset value fell 33.6%,
compared to a fall of 26.4% in its benchmark,
the DJ World Technology index over the
calendar year. While longer-term performance
remains strong, this weakness is undoubtedly
disappointing.
The reasons for the underperformance are
relatively easy to diagnose. The Company has
traditionally held a larger weighting in higher
growth, mid cap companies. This is, we believe,
the long-term sweet spot to find fast-growing,
dynamic technology companies. However, this
was the area hit hardest in 2022 as investors
reappraised valuations in light of the changing
interest rate environment.
This sell-off included areas of structural growth,
such as cloud software and cybersecurity.
In general, there was little regard for the
underlying performance of individual
companies. Cybersecurity group Zscaler,
for example, was the largest detractor from
performance over the year, but beat market
expectations on sales and adjusted income
and continued to grow rapidly without burning
cash. This experience was commonplace: many
11
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
companies continued to deliver strong revenue
growth and earnings, but were battling investor
concerns about their future prospects.
At the same time, the Company was
underweight the benchmark in those
companies that proved the most defensive.
Apple, for example, was a large absolute
position in the Company, but it forms a even
larger part of the benchmark and therefore was
a drag on relative performance. The same was
true, to a lesser extent, for Microsoft.
We continue to believe in the long-term
prospects for many high growth companies in
areas such as cloud computing, data analytics
or cyber security, and retain a weighting in
the portfolio. Nevertheless, we recognise that
sentiment is likely to be against them while the
economic climate remains weak. Against that
backdrop, we have reduced risk in the portfolio
over the course of the year, moving away from
some of the higher growth, high risk areas
and towards more defensive positions. Apple,
Microsoft and Alphabet are the top positions in
the portfolio today.
We were also quick to cut companies where
there were signs of weakness. For example,
we saw Okta struggle to integrate its Auth0
acquisition and exited the position. Company-
specific problems were dealt with brutally by
the market during the year, with management
teams seldom given the benefit of the doubt.
The Company also held a relatively high level of
cash during the year – around 6% on average.
This was a reflection of the uncertainty of the
environment and a desire to retain optionality in
the portfolio. With significant swings in pricing,
it made sense to keep the flexibility to take
advantage of opportunities as they arose.
Stock highlights
The weakness in the cybersecurity sector has
been a surprising feature of 2022. Company
management teams remain committed to
cybersecurity spending in the face of mounting
threats and the sector should have been
more resilient. However, investors treated it
like another high growth area and sent share
prices tumbling. While Zscaler was the most
significant contributor to the Company’s
underperformance over the year, CyberArk and
Okta were also weak. Only Palo Alto Networks
bucked the trend.
Other high growth segments suffered: cloud
analytics and AI group Snowflake was weak
as investors worried about its valuation
and its competitive prospects. Ride-sharing
group Lyft also detracted from performance.
Collaboration technologies such as ZoomInfo
and Atlassian, and productivity tools such as
Asana also struggled. While the long-term
growth of flexible working appears to be intact,
share prices for these companies had moved a
long way and expectations were high. Asana,
for example, had risen 155% in 2021. As such,
some pullback in a more difficult environment
was not surprising.
Global demand for semiconductors continues to
rise, with areas such as electric cars and cloud
analytics demanding increasingly sophisticated
chips. However, the sector could not shake off its
reputation for economic sensitivity and this was
another weak point for the Company during the
year.
The Company’s position in Amazon was also a
detractor. Amazon is not part of the benchmark,
but the Company had a small position. The
online retailer has struggled in an increasingly
difficult spending climate, though its cloud
business held up relatively well. Not holding
Shopify, which proved very weak as household
incomes dropped, was an advantage.
The Company swerved a number of the
problems with other megacaps. A low average
weighting in Meta, for example, was an
important contributor to performance as the
company struggled with its transition away from
its core business towards its new ambitions in
the metaverse.
The payments area provided some defensive
characteristics over the year, with Mastercard,
Visa and Paycom all resilient. These were
stronger than smaller groups such as Square
or Paypal, which had greater exposure to the
smaller company and consumer segment.
Shares of ON Semiconductor, a provider of
semiconductor intelligent sensing and power
solutions, continued to benefit from a healthy
demand and limited supply environment.
The management team delivered very good
execution in a challenging macro environment,
which led to resilient profitability. The returning
of cash to shareholders was also seen as
positive news by the market. We believe the
company is well positioned to take advantage
of long-term growth in key automotive and
industrial segments and it may weather any
potential macroeconomic headwinds better
than its peers.
Flex reported solid results in the period and
raised fiscal 2023 guidance. We continue to
believe the company is well positioned to take
share and improve margins as its strategy yields
12
Investment
Manager’s
Review
results and supply chain disruptions create
net new demand. Despite weaker consumer
markets, the broad customer portfolio is acting
as a natural hedge. However, if conditions
worsen significantly, management has flexibility
to quickly pull back spending. The company
is seeing strong demand from multiple
secular growth themes including cloud, auto
technology, and industrial automation.
Looking forward
While inflationary pressures have started to
ebb, there is still some pain to come on the
global economy. There may be further interest
rate rises in the year ahead, and the Federal
Reserve is unlikely to reverse direction in the
short-term. Recession looks likely for many
major economies, while the re-emergence of
China could be a double-edged sword. It may
move the dial on global growth, but may also
contribute to inflation. Against this difficult
backdrop, the Company remains defensively
positioned.
However, there are reasons to be more
optimistic. Share prices have fallen a long way
and now reflect much of the bad economic
news. Many technology companies continue
to deliver strong earnings in spite of the
economic conditions and have a significant
runway of growth ahead of them. Equally,
potential weakness in the Dollar should help
those technology companies with large global
markets, such as Apple and Microsoft.
On 25 July 2022 the team and I became
employees of Voya. There has been no change
to the investment process and it has been a
seamless transition in terms of the management
of the Company. I have found the Voya culture
to be customer centric and supportive of
generating the best possible returns for our
shareholders. I look forward to what the future
holds for all associated with Allianz Technology
Trust.
This has been a tough period, but many of the
structural growth opportunities for technology
are intact. Digital transformation, cyber security
and cloud computing are multi-year growth
themes and the recent uncertainty has not
changed their outlook. Technology remains an
exciting sector in spite of its difficulties in 2022.
Mike Seidenberg
Lead Portfolio Manager
Voya Investment Management Co LLC
10 March 2023
13
13
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Investment Sector
#
Sub Sector
#
Country
Valuation
£000
% of
Portfolio
Microsoft Software Systems Software United States 63,905 7.1
Apple Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 51,427 5.7
Alphabet Interactive Media & Services Interactive Media & Services United States 46,688 5.2
Broadcom Semiconductors & Semiconductor Equipment Semiconductors United States 41,735 4.6
Mastercard IT Services Data Processing & Outsourced Services United States 32,489 3.6
Taiwan Semiconductor Semiconductors & Semiconductor Equipment Semiconductors Taiwan 31,721 3.5
Paycom Software Software Application Software United States 30,811 3.4
Visa IT Services Data Processing & Outsourced Services United States 26,206 2.9
Palo Alto Networks Software Systems Software United States 24,755 2.8
Datadog Software Application Software United States 23,506 2.6
Top Ten Investments 373,243 41.4
Arista Networks Communications Equipment Communications Equipment United States 22,557 2.5
Pure Storage Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 21,699 2.4
Aspen Technology Software Application Software United States 21,126 2.4
ON Semiconductor Semiconductors & Semiconductor Equipment Semiconductors United States 20,628 2.3
Oracle Software Systems Software United States 20,124 2.2
Meta Platforms Interactive Media & Services Interactive Media & Services United States 19,857 2.2
HubSpot Software Application Software United States 19,585 2.2
Intuit Software Application Software United States 19,529 2.2
Cyberark Software Software Systems Software Israel 18,707 2.1
Flex Electronic Equipment Instruments & Components Electronic Manufacturing Services Singapore 17,091 1.9
Top Twenty Investments 574,146 63.8
Gitlab Software Systems Software United States 16,912 1.9
Automatic Data Processing IT Services Data Processing & Outsourced Services United States 16,564 1.8
Netflix Entertainment Movies & Entertainment United States 16,438 1.8
Motorola Solutions Communications Equipment Communications Equipment United States 14,442 1.6
Applied Materials Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 14,212 1.6
Servicenow Software Systems Software United States 14,082 1.6
Workday Software Application Software United States 14,033 1.6
GEN Digital Software Systems Software United States 13,956 1.6
KnowBe4 Software Systems Software United States 13,221 1.5
Monolithic Power Systems Semiconductors & Semiconductor Equipment Semiconductors United States 13,105 1.5
Top Thirty Investments 721,111 80.3
Full portfolio list
Investment Portfolio
at 31 December 2022
14
Investment
Manager’s
Review
Investment Sector
#
Sub Sector
#
Country
Valuation
£000
% of
Portfolio
Marvell Technology Semiconductors & Semiconductor Equipment Semiconductors United States 12,783 1.4
Infineon Technologies Semiconductors & Semiconductor Equipment Semiconductors Germany 12,321 1.4
ASML Semiconductors & Semiconductor Equipment Semiconductor Equipment Netherlands 11,941 1.3
MongoDB IT Services Internet Services & Infrastructure United States 11,755 1.3
Lam Research Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 11,441 1.3
Advanced Micro Devices Semiconductors & Semiconductor Equipment Semiconductors United States 11,145 1.2
Activision Blizzard Entertainment Interactive Home Entertainment United States 10,315 1.1
Okta IT Services Internet Services & Infrastructure United States 9,785 1.1
Zscaler Software Systems Software United States 9,592 1.1
CDW Electronic Equipment, Instrument Technology Distributors United States 9,412 1.0
Top Forty Investments 831,601 92.5
KLA Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 8,596 1.0
Micron Technology Semiconductors & Semiconductor Equipment Semiconductors United States 8,197 0.9
NVIDIA Semiconductors & Semiconductor Equipment Semiconductors United States 8,032 0.9
Computacenter IT Services IT Consulting & Other Services United Kingdom 7,838 0.9
Bumble Interactive Media & Services Interactive Media & Services United States 6,778 0.8
Crowdstrike Software Systems Software United States 5,265 0.6
Altair Engineering Software Application Software United States 5,112 0.6
NXP Semiconductors Semiconductors & Semiconductor Equipment Semiconductors Netherlands 5,104 0.6
Tesla Automobiles Automobile Manufacturers United States 4,718 0.5
SK Hynix Semiconductors & Semiconductor Equipment Semiconductors South Korea 4,177 0.4
Top Fifty Investments 895,418 99.7
STMicroelectronics Semiconductors & Semiconductor Equipment Semiconductors Netherlands 3,519 0.3
Total Investments 898,937 100.0
#GICS Industry classifications
15
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Strategic Report
Introduction
This Strategic Report is provided in accordance with The Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013 as amended and is intended to provide information about the Company’s strategy and business
needs, its performance and results for the year, and the information and measures which the Directors use to assess,
direct and oversee Allianz Global Investors GmbH, UK Branch (‘the AIFM’) and Voya Investment Management Co LLC
(‘the Investment Manager’ for portfolio management) in the management of the Company’s activities.
Strategy and Business Model
The purpose of the Company is defined by its investment objective, to provide shareholders with an investment in equity
securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth.
The Company carries on business as an investment trust and maintains a premium listing on the London Stock Exchange.
Investment trusts are collective investment vehicles constituted as closed ended public limited companies. The Company
is managed by a board of non-executive Directors and the Company’s day-to-day functions are carried out by the
following main third party services providers:
– AllianzGI as AIFM
– Voya as Investment Manager
– HSBC as Custodian and Depositary
– Link as Registrars
– State Street providing middle office and fund accounting services (appointed by AllianzGI).
The Company complies, where relevant, with the Financial Conduct Authority’s (‘FCA’) Handbook including the Disclosure
Guidance and Transparency Rules. Regulatory and portfolio information is announced via the regulatory news service on
a daily, monthly and other periodic basis thereby assisting current and potential investors to make informed investment
decisions. Additional portfolio information, technology commentary and corporate information is available on the
Company’s website www.allianztechnologytrust.com.
Performance
The investment portfolio at the year end is set out on pages 14 and 15 and a summary of the top twenty
holdings can be found on the website version of the Annual Financial Report. In the year ended 31 December 2022,
the Company’s total return on net assets per share was -33.6% (2021: 19.4%), underperforming the Dow Jones World
Technology Index (sterling adjusted, total return) by 7.2 percentage points. Further details on the performance of the
Company, future trends and factors that may impact future performance of the Company are included in the Chairman’s
Statement and the Investment Manager’s Review.
16
Strategic
Report
Monitoring Performance – Key Performance Indicators
The Board assesses performance in meeting the Company’s objective and assessing the longer term viability of the
Company against the following Key Performance Indicators (‘KPIs’):
The table below compares the Company’s performance to the main technology indices. Although the Company
underperformed the benchmark in 2022, your Company has outperformed the reference benchmark index and the
Russell MidCap Technology Index over every other time period set out below. The Company has underperformed the
MSCI World Technology Index over 1, 3 and 5 years, but remains ahead over 10 years:
% change 1 year 3 years 5 years 10 years
ATT NAV per share -33.6 39.7 98.9 543.5
Dow Jones World Technology Index (sterling adjusted, total return) -26.4 33.7 85.5 430.6
MSCI World Technology Index (total return) -21.9 43.5 112.2 528.4
Russell MidCap Technology Index -26.7 19.8 81.4 442.7
Source: AllianzGI/Datastream in GBP as at 31 December 2022
The table below provides a comparison with the broader UK and world equity indices which many investors will use when
reviewing the performance of their individual investments.
% change 1 year 3 years 5 years 10 years
ATT NAV per share -33.6 39.7 98.9 543.5
FTSE All Share Index (total return) 0.3 7.1 15.5 88.2
FTSE World Index (total return) 7.2 27.8 52.1 217.3
Source: AllianzGI/Datastream in GBP as at 31 December 2022
The Board continues to pay close attention to the Company’s performance position against the wider universe of open
ended funds, closed ended funds and exchange traded funds. The performance of your Company versus the other funds
within the Morningstar Global Technology Sector - Equity (Morningstar) category, whilst disappointing in the short term,
is exceptional over longer periods:
1 year 3 years 5 years 10 years
Peer Group Ranking vs Morningstar Global Technology Sector Equity
134/165 18/123 10/85 1/57
17
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
The Board regularly reviews stock and attribution analysis to determine the contribution to relative and absolute
performance of the portfolio of the top and bottom stocks. The top contributors to and detractors from the Company’s
Net Asset Value total return over the year ended to 31 December 2022, relative to the benchmark index*, were as
follows:
Top ten contributors
Active Contribution
GBP (%)
Meta Platforms Inc. Class A Underweight 1.28
ON Semiconductor Corporation Overweight 0.69
Flex Ltd. Overweight 0.51
Mastercard Incorporated Class A Overweight 0.47
Broadcom Inc. Overweight 0.45
Shopify, Inc. Class A Underweight 0.36
Aspen Technology, Inc. Overweight 0.34
Box, Inc. Class A Overweight 0.30
NVIDIA Corporation Underweight 0.29
Aspen Technology, Inc. Overweight 0.28
4.98
Top ten detractors
Zscaler, Inc. Overweight -1.27
Snowflake, Inc. Class A Overweight -0.96
Lyft, Inc. Class A Overweight -0.92
Okta, Inc. Class A Overweight -0.84
Apple Inc. Underweight -0.76
Datadog Inc Class A Overweight -0.73
Atlassian Corp Class A Overweight -0.61
Microsoft Corporation Underweight -0.58
Asana, Inc. Class A Overweight -0.53
Infineon Technologies AG Overweight -0.46
-7.66
Source: Allianz Global Investors. 31 Dec 2021 - 31 Dec 2022.
*Relative to Dow Jones World Technology Index. Figures may not add due to rounding.
Share Buybacks and Share Issues
The Directors continually monitor the level of premium or discount of the share price to the NAV per share. Over the year
to 31 December 2022, the mid-market price of the Company’s shares decreased by 40.4% (2021: increased by 18.7%),
with a discount at the year end of 9.1% (2021: premium of 1.3%).
The Board carefully considers the parameters which should apply to both the issuance and the buy-back of shares from
the market and will only proceed when the action is in the best interests of shareholders. Where there is market volatility
the Board will also consider buying back shares when the discount is over 7% and all other factors align. The Board will
only issue new shares at a premium to NAV.
The Company did not issue any new shares during 2022 (2021: 6,800,000) and bought back 16,703,872 shares at a
discount to NAV (2021: 5,565,090). There are 22,268,962 shares held in treasury at the year end.
18
Strategic
Report
Results and Dividends
An overview of the Company’s results is shown in the Financial Highlights on page 2. The revenue reserve remains
substantially in deficit, and no dividend is proposed in respect of the year ended 31 December 2022 (2021: nil). As stated
in the Chairman’s Statement, the Board considers it unlikely that a dividend will be declared in the near future.
Future Development
The future development of the Company is dependent on the success of the Company’s investment strategy
against the background of the economic environment and market evolution and the future attractiveness of the
Company as an investment vehicle compared with long-term savings markets. The Chairman gives his view on the
outlook in his statement which starts on page 5 and the Portfolio Manager discusses his view of the Company’s
portfolio and the outlook which starts on page 10. The Board holds a strategy specific meeting at least once per
year at which time they consider the position of the Company and the strategy for the year ahead and beyond, making
recommendations for change where appropriate. The last strategy specific meeting was held in September 2022.
Marketing the Company’s Investment Strategy
The Company continues to operate a targeted and coordinated marketing programme in order to raise awareness of
its investment strategy. During 2022 both virtual and in-person communication tools have been used. This programme
targets potential investors as well as communicating the latest developments to its valued existing shareholders.
The programme is aimed at both professional and retail investors and aims to create ongoing and sustained demand for
the Company’s shares. The retail audience includes those investors who delegate their investment decisions to financial
advisers as well as the ever-increasing numbers who are researching and making their own investment decisions. The
programme comprises advertising and other promotional activity as well as communicating with national journalists and
the financial intermediary press, since positive coverage of the Company’s specialist investment strategy can be highly
influential. The marketing programme’s success has been boosted by the number of performance awards won by the
Company over recent years and has been instrumental in generating demand from retail investors which is, of course, to
the benefit of all of the Company’s shareholders. Increasingly investors are choosing to buy and sell stocks and shares
via online trading platforms rather than via a traditional stockbroker. Approximately 35% (2021: 35%) of the Company’s
shares are now held by investors on these platforms. Many platform providers offer Individual Savings Account and
pension products as well as the facility to invest on a regular monthly basis. Competition amongst platform providers is
intense therefore investing online can be a cost-effective way to buy the Company’s shares.
Board Diversity
At 31 December 2022, there were three male Directors and three female Directors. Further information on Board
Diversity may be found in the Directors’ Report on page 30.
Risk Report
Viability Statement
In accordance with the Corporate Governance provisions the Company is required to make a forward looking (longer
term) Viability Statement. In order to do this the Board has considered the appetite for a technology investment trust
against the current market backdrop, and has formally assessed the prospects for the Company over a period of five
years. The Board believes that the period of five years is appropriate and is in line with the five year continuation vote.
The next continuation vote will be put to shareholders at the AGM in 2026. In order to assess the prospects for the
Company the Board has considered:
– The investment objective and strategy taking into account recent, past and potential performance against both the
benchmark, other indices of note and peers;
– The financial position of the Company, which does not currently utilise gearing in any form but does maintain a
portfolio of, in the main, non-income bearing investments;
– The liquidity of the portfolio and the ability to liquidate the portfolio on the failure of a continuation vote;
– The macro economic conditions and geopolitical events;
– The ever increasing level of technology adopted by both individuals and corporations alike;
– The inherent risks in such technology both in terms of speed of advancement but also potential catastrophe with the
growth of cyber fraud; and
– The principal risks faced by the Company as outlined below.
The Board is fully aware that the world of technology is constantly moving and growing and the perceived picture
of technology now and in five years’ time is potentially very different. Based on the results of the formal assessment,
through regular updates from the AIFM and the Investment Manager, the Board believes it is reasonable to expect that
the Company will continue in operation and meet its liabilities for the period of five years under this review.
19
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Investment Controls and Monitoring
The Board in conjunction with the AIFM and the Investment Manager has put in place a schedule of investment
controls and restrictions within which investment decisions are made. These controls include limits on the size and type
of investment and are monitored on a constant basis. They are formally signed off by the AIFM and the Investment
Manager every month and are reviewed by the Board at every meeting.
Principal & Emerging Risks and Uncertainties
The principal risks identified by the Board are set out in the table below, together with information about the actions
taken to mitigate these risks. A more detailed version of this table in the form of a Risk Map and Controls document is
reviewed in full and updated by the Audit & Risk Committee and Board at least twice per year. Individual risks, including
emerging risks and threats to reputation, are considered by the Board in further detail depending on the market situation
and a high-level review of all known risks faced by the Company is considered at every Board meeting. The principal risks
and uncertainties faced by the Company relate to the nature of its objectives and strategy as an investment company
and the operations of its third party service providers.
Description Mitigation
Investment Strategy and Performance Risk
The Company’s NAV may be adversely affected by
the Investment Manager’s inappropriate allocation
of funds to particular sub-sectors of the technology
market and/or to the selection of individual stocks that
fail to perform satisfactorily, leading to poor investment
performance in absolute terms and/or against the
benchmark.
The Investment Manager has responsibility for sectoral
weighting and for individual stock picking, having taken
due account of Investment Objectives and Controls
that are agreed with the Board from time to time and
regularly reviewed. These seek, inter alia, to ensure
that the portfolio is diversified and that its risk profile is
appropriate.
Technology Sector Risk
The technology sector is characterised by rapid change.
New and disruptive technologies can place competitive
pressures on established companies and business
models, and technology stocks may experience greater
price volatility than securities in some slower changing
market sectors.
The Board reviews investment performance, including
a detailed attribution analysis comparing performance
against the benchmark, at each Board meeting. At such
meetings, the Investment Manager reports on major
developments and changes in technology market sectors
and also highlights issues relating to individual securities.
The portfolio is diversified.
Cyber Risk
The Company may be at risk of cyber attacks which
may result in the loss of sensitive information or
disruption to the business.
The operations of the Company are carried out by third
party service providers. All service providers report to the
Board on operational issues including cyber risks and
the controls in place to capture potential attacks. See
Operational Risk below.
Market Risk
The Company’s NAV may be adversely affected by a
general decline in the valuation of listed securities and/
or adverse market sentiment towards the technology
sector in particular. Although the Company has a
portfolio that is diversified by company size, sector
and geography, its principal focus is on companies
with high growth potential in the mid-size ranges of
capitalisation. The shares of these companies may
be perceived as being at the higher end of the risk
spectrum, leading to a lack of interest in the Company’s
shares in some market conditions.
Market sentiment may quickly deteriorate in the face of
geo political events and effects on the macro-economic
environment.
The Board, the AIFM and the Investment Manager
monitor stock market movements and may consider
hedging, gearing or other strategies to respond
to particular market conditions. The AIFM and the
Investment Manager maintain regular contact with
shareholders to discuss performance and expectations
and to convey the belief of the Board and the Investment
Manager that superior returns can be generated from
investment in carefully selected companies that are
well managed, financially strong and focused on those
segments of the technology market where disruptive
change is occurring.
The Board, the AIFM and the Investment Manager
would monitor the progress of the unexpected events
very closely and initiate appropriate responses where
possible.
20
Strategic
Report
Description Mitigation
Currency Risk
A high proportion of the Company’s assets is likely
to be held in securities that are denominated in US
Dollars, whilst its accounts are maintained in Sterling.
Movements in foreign exchange rates affect the
performance of the Investment Portfolio and create a
risk for shareholders.
The Board monitors currency movements and
determines hedging policy as appropriate. The Board
does not currently seek to hedge this foreign currency
risk.
Financial and Liquidity Risk
The financial risks to the Company and the controls in
place to manage these risks are disclosed in detail in
Note 13 beginning on page 67.
Financial and liquidity reports are provided to and
considered by the Board on a regular basis.
Operational Risk
The Company may be impacted by disruption to or
the failure of the systems and processes utilised by the
AIFM and the Investment Manager or other third party
service providers. This encompasses disruption or failure
caused by cybercrime, fraud and errors and covers
dealing, trade processing, administrative services,
financial and other operational functions.
The Board receives regular reports from the AIFM,
the Investment Manager and third parties on internal
controls highlighting areas of exception, including
reports on monitoring visits carried out by the Depositary
on behalf of the Company. The Board has further
considered the increased risk of cyber-attacks and fraud
and has received reports and assurance regarding
the controls in place and details of whistleblowing
procedures.
Key Individual Risk
The Company could suffer disruption to operations as
a consequence of loss of key individuals e.g. the lead
portfolio manager.
Succession plans are in place for the Board. The lead
portfolio manager is supported by a wider investment
team. Cover is available for core members of the
relevant teams of the AIFM.
In addition to the specific principal risks identified in the table above, general risks are also present relating to
compliance with accounting, legal and regulatory requirements, and with corporate governance and shareholder
relations issues which could have an impact on reputation and market rating. Management of the services provided
and the internal controls procedures of the third party providers is monitored and reported on by the AIFM to the
Board. These risks are all formally reviewed by the Board twice each year and at such other times as deemed necessary.
Details of the Company’s compliance with corporate governance best practice, including information on relations with
shareholders, are set out in the Corporate Governance Statement within the Directors’ Report beginning on page 36.
The Board’s review of the risks faced by the Company also includes an assessment of the residual risks after mitigating
action has been taken.
21
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Section 172 Report:
Engagement with Key Stakeholders
As an investment company with no employees, the Company’s primary stakeholders are its shareholders and other
stakeholders including its service providers and the companies in which it invests. The Board’s strategy is facilitated by
interacting with a wide range of stakeholders through meetings, seminars, presentations and publications and through
contacts made through the Company’s suppliers and intermediaries. Engagement is both in person and virtually.
Engagement with the Company’s stakeholders enables the Company to fulfil its strategies and to promote the success of
the Company for the benefit of the shareholders as a whole. The Board strives for an open, constructive and pro-active
culture in its engagements as it seeks to meet the Company’s investment objectives.
Set out below are examples of the ways in which the Company has interacted with key stakeholders in line with section
172 of the Companies Act 2006 whereby the Directors have a statutory duty to promote the success of the Company.
Stakeholders Why we engage How we engage and what we do The outcomes
Shareholders
Shareholders receive relevant
information to enable them to
evaluate whether their investment
interests are aligned with the strategy
of the Company.
The Board communicates with
shareholders through the annual
report and half-yearly report, meets
with shareholders at the AGM and
provides a forum for interaction.
There is a portfolio management
presentation and Q&As. This year,
there will be a hybrid AGM which each
shareholder can attend. There are
monthly factsheets published on the
Company’s website as well as up to
date articles and podcasts from the
Portfolio Manager.
Shareholders make informed decisions
about their investments. Shareholder
correspondence is forwarded directly
to the Board.
The Company has responded to the
volatile market conditions by issuing or
buying back shares during the course
of the year. A share split of 10 to 1
was undertaken to ensure that the
Company was accessible to all.
Voya
Investment
Management –
the Investment
Manager
The Board works with the Investment
Manager who provides portfolio
management services.
During the year the Board entered
into a tripartite agreement for the
provision of portfolio management
services. The Board conducted due
diligence and held additional meetings
with representatives of the Investment
Manager and AIFM. The Portfolio
Manager provides regular updates at
Board meetings and upon request by
the Board.
The Company is well managed and
receives appropriate and timely advice
and guidance for a reasonable cost.
Allianz Global
Investors –
the AIFM
The Board works with the AIFM who
provides accounting and secretarial
services as well as expertise in sales
and marketing.
In addition to the reporting at regular
board meetings, the Board meets with
representatives of AllianzGI to develop
strategy for the Company, including a
sales and marketing plan which was
adapted during the year, to promote
the Company and raise its profile
which helps raise its rating.
The Company is well managed and
receives appropriate and timely advice
and guidance for a reasonable cost.
Portfolio
companies
The Board approves the Investment
Manager’s active, stock picking
approach and believes in good
stewardship.
On the Company’s behalf the
Investment Manager engages with
investee companies, particularly on
Environmental, Social and Governance
matters and exercises its votes at all
company meetings. The Board travels
every two years to San Francisco and
whilst there they visit several of the
portfolio companies.
The Company is a responsible investor
and is labelled as ESG Aware.
22
Strategic
Report
Stakeholders Why we engage How we engage and what we do The outcomes
Brokers
The Board, the AIFM and the
Investment Manager work with the
brokers, including their research and
sales teams to provide access to the
market and liquidity in the Company’s
shares.
The brokers are kept updated on
the strategy of the Company so that
they can publish relevant research
information and talk to potential
investors. The sales team receives
regular contact and helps the
Company to participate in exchange
volume and provide liquidity for
investors.
The Company is an attractive
investment and there is liquidity in the
Company’s shares.
Media
partnerships
The Company works with public
relations advisers to ensure
information about the Company, its
strategies and performance can reach
a wide audience of potential investors
through press articles and online
media coverage.
Regular communication with public
relations partners to raise the
Company’s profile through press and
media activity. We can measure the
success of this activity by monitoring
website hits and new investment in the
Company on retail platforms.
The Company’s name and its attributes
as an investment company are known
to an increasingly wider audience.
Distribution
partnerships
To reach a wider audience of investors
the Company works with firms
providing access to platforms and
wealth managers.
The wealth managers together with
our distribution partners arrange
presentations about the Company
at roadshows and conferences to
reach investors through share trading
platforms and wealth managers.
The Board receives detailed feedback
to confirm that there is wide and
growing interest in the Company’s
shares.
AIC
The Association of Investment
Companies looks after the interests
of investment trusts and provides
information to the market.
The Company is a member of the
AIC and has also supported lobbying
activities such as the representations
made to the Financial Conduct
Authority on the KID document.
Information about the Company is
disseminated widely.
23
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Environmental, Social, Governance (ESG)
Research and Stewardship
The Board takes ESG considerations very seriously and,
as such, intends to make clear how various aspects are
considered, both through our fiduciary responsibility
as a board, but also in our oversight of our Investment
Manager’s process, with investment being the sole business
of the company.
Although as an investment trust, the Company has no direct
social or community responsibilities, the Board shares the
Investment Manager’s view that it is in the shareholders’
interests to be aware of and consider environmental,
social and governance factors, when selecting and
retaining investments. In addition, Voya has a due diligence
approach to ensure any retained company or entity
providing services to the Company in its normal course
of business has an acceptable approach to ESG factors
and as such does not inadvertently support any negative
factors.
Details of the Company’s policy on socially responsible
investment are set out below.
How ESG fits into technology
For technology, the individual elements of ‘ESG’ have
varying outcomes.
The ‘E’ (Environmental) is generally a high scoring factor.
Many technology companies are facilitating the move
towards a cleaner, less carbon-intensive future. Electric
vehicles are an obvious example of this. This is not to say
the entire sector is without issue and, indeed, new natural
resource demands are emerging as technology expands.
We see in general though that companies are aware and
consider this factor high in their priorities. Regulators too
have a keen eye.
The ‘S’ (Social) is split in its outcomes. On the one hand, as
a source of quality employment, the result is often positive,
although some issues have notably come to light. On the
other hand, governments, regulators and the public at
large have questioned the impact of some technologies,
such as social media. The sheer size and control of some of
the ‘mega’ sized technology firms has been questioned, as
has whether technology might exacerbate social inequality
through the inability of poorer socio-demographic groups
to be able to access the same tools as those with more
income. Again, regulators have a sharp focus on this topic.
Finally, the ‘G’ (Governance) can be the most complicated
factor. Many technology companies by their very nature
are relatively new and at an early stage of development.
This can manifest itself in terms of conflicting priorities
between minority shareholders and founders, both in
strategy and sometimes in unhelpful share structures.
Of course, the more a company matures, the less of a
potential problem this usually becomes.
Summary:
– The Portfolio Manager has extensive resources
dedicated to independent research into investee
company ESG factors and potential risks.
– ESG risk consideration is embedded in the investment
process of the portfolio management team. See pages
10 to 13 of the Investment Manager’s Review.
– Voya invest as long term investors with an inherent belief
in the importance of stewardship and governance.
Overall introduction to ESG
The Voya portfolio managers integrate the consideration
of Environmental, Social and Governance (ESG) factors
into the research process for the Company’s portfolio.
This process ensures:
– Formal consideration of Environmental, Social and
Governance factors.
– Companies with low ESG scores are systematically
flagged to portfolio manager s on a pre-trade basis. The
portfolio manager will consider the elevated ESG risk
alongside fundamental consideration, and may consult
with internal and 3rd party ESG research materials, in
forming an investment decision.
– An independent view from within Voya.
– Long-term risk assessment is enhanced.
ESG & Stewardship Integration
In Voya’s research process, environmental, social and
governance factors are integrated with more traditional
operational and financial considerations. By analysing
how a business interacts with the environment, treats
its employees and deals with customers and suppliers,
valuable insights can be learnt as to its future prospects
and to long term risks which might not be evident in
financial metrics.
As discussed in the Chairman’s Statement on page 6
and Investment Manager’s Review starting on page 10,
the ESG considerations are integrated within the whole
process of stock selection and portfolio construction.
How Voya has integrated ESG in portfolio
management
The ESG Research team at Voya maintains a proprietary
scorecard which reflects their analysts’ views of the
financial materiality of ESG issues by industry.
Voya’s dedicated ESG research team provides portfolio
managers and sector analysts with ESG knowledge and
24
Strategic
Report
insights contributing to better investment decisions as they
consider ESG risks and opportunities that may not have
been fully priced by the markets. The ESG research team
offers specialist expertise across the entire spectrum of
ESG-related requirements.
The UK Stewardship Code and Exercise of
Voting Powers
The Board has delegated the exercise of voting powers
on its behalf to discharge its responsibilities in respect of
investments, including the exercise of voting powers on its
behalf to the AIFM. and receives regular reports on voting
activity.
The AllianzGI report on Sustainability and Stewardship
has been reviewed by the Board and it believes that
the Company’s delegated voting powers are being
properly executed. AllianzGI subscribes to the ISS Proxy
Voting Services. ISS manages the voting process and
recommends actions based upon Allianz’s Global Proxy
Voting Policy Guidelines.
Corporate Social Responsibility (‘CSR’),
Community and Employee Responsibilities,
Emissions, Environmental and Ethical Policy
(‘EEE’)
The Company’s investment activities and day to day
management are delegated to the Investment Manager,
AIFM and other third parties. As an investment trust, the
Company has no direct social, community, employee
or environmental impact, though the Board maintains
appropriate oversight of such factors in relation to
contracted service providers. Its principal responsibility to
shareholders is to ensure that the investment portfolio is
properly managed and invested.
The Company notes the Task Force on Climate-related
Financial Disclosures (‘TCFD’) reporting recommendations.
However, as a listed investment company, the Company
is not subject to the Listing Rule requirement to report
against the framework.
In light of the nature of the Company’s business there are
no associated human rights issues and the Company does
not have a human rights policy. The Company does not
maintain premises, hold any physical assets or operations
and does not have any employees. Consequently, the
Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013. For the same reason as set out above,
the Company considers itself to be a low energy user
under the Streamlined Energy and Carbon Reporting
regulations and therefore is not required to disclose
energy and carbon information. The Board has noted the
AIFM and Investment Manager’s report on greenhouse
gas emissions on its own operations and the views of the
Investment Manager on CSR and EEE which it adheres
to in engaging with the underlying investee companies
and in exercising its delegated responsibilities in voting.
The Investment Manager engages with the Company’s
underlying investee companies in relation to their
corporate governance practices and in developing their
policies on social, community and environmental matters.
The Company’s primary objective is to invest principally
in the equity securities of quoted technology companies
on a worldwide basis with the aim of achieving long-
term capital growth. Whilst the Board believes that the
Company would be in breach of its fiduciary duties to
shareholders if investment decisions were based solely
on CSR and EEE considerations, we are supportive of
an investment management process that considers all
elements of wider ESG risk in the context of risk/reward,
like all other risks considered by the Investment Manager.
The Strategic Report has been approved by the Board and
signed on its behalf by:
Robert Jeens
Chairman
10 March 2023
25
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Directors
Robert Jeens
Chairman of the Board, the
Nomination Committee and
the Management Engagement
Committee. Member of the
Remuneration Committee.
Robert joined the Board on 1 August
2013 and became Chairman on
2 April 2014. Early in his career
he became an audit partner at
Touche Ross (now Deloitte) and
was subsequently Finance Director
of Kleinwort Benson Group and
Woolwich plc. Since 2000 he has
worked solely as a non-executive
director with appointments including
Henderson Group plc, Royal
London Mutual Insurance Group
and a number of listed investment
companies. He has also had
experience of technology companies,
both listed and private, and is
currently Chairman of Remote Media
Group, a cloud based digital signage
company.
Ekaterina (Katya) Thomson
Chairman of the Audit & Risk
Committee and member of the
Nomination Committee, the
Remuneration Committee and
Management Engagement
Committee.
Katya joined the Board on 18
July 2022 and was appointed
as Chairman of the Audit & Risk
Committee on 1 January 2023.
She is currently a non-executive
director and audit committee
chairman of MIGO Opportunities
Trust plc, AVI Japan Opportunity Trust
plc and Henderson EuroTrust plc.
She is a corporate finance and
strategy professional with over
thirty years of experience in the UK
and Europe. Katya is a Chartered
Accountant and a member of the
Institute of Chartered Accountants in
England and Wales.
Humphrey van der Klugt
Senior Independent Director and
Chairman of the Remuneration
Committee. Member of the
Nomination Committee and
the Management Engagement
Committee.
Humphrey joined the Board on 1 July
2015 and became Chairman of the
Audit & Risk Committee and Senior
Independent Director on 14 April
2016. He stepped down as Chairman
of the Audit & Risk Committee on
31 December 2022. He is currently
also a director of Worldwide
Healthcare Trust PLC. He is an
experienced investment manager
and investment company director,
having previously served as a director
of trusts managed by BlackRock,
Fidelity, JP Morgan and Abrdn Plc.
Humphrey initially qualified as a
chartered accountant with Peat
Marwick Mitchell & Co. (now KPMG)
in 1979, and in 2004 retired from
a long career as a fund manager
and director of Schroder Investment
Management Limited.
26
Directors’
Review
Elisabeth Scott
Member of the Audit & Risk
Committee, the Nomination
Committee, Remuneration
Committee and the Management
Engagement Committee.
Elisabeth joined the Board on 1
February 2015. She is Chair of
the Association of Investment
Companies, Chair of India Capital
Growth Fund plc and Chair of
JPMorgan Global Emerging Markets
Income Trust plc. She has been a
Non-Executive Director of investment
companies since 2011. Elisabeth
worked in the Hong Kong asset
management industry from 1992
until 2008, latterly as managing
director and country head of
Schroder Investment Management
(Hong Kong) Ltd, and she chaired
the Hong Kong Investment Funds
Association between 2005 and 2007.
Neeta Patel CBE
Member of the Audit & Risk
Committee, the Nomination
Committee, the Remuneration
Committee and the Management
Engagement Committee.
Neeta joined the Board on 1
September 2019. She is a non-
executive director of Albion Venture
Capital Trust plc. She is also a
board adviser at several technology
startups. She was previously CEO at
the Centre for Entrepreneurs and an
entrepreneur mentor-in-residence
at London Business School, a board
adviser at Tech London Advocates
and a member of the advisory
board at City University Ventures.
She was awarded a CBE in
the Queen’s honours list in
October 2020 for services to
entrepreneurship and technology.
Tim Scholefield
Member of the Audit & Risk
Committee, the Nomination
Committee, the Remuneration
Committee and Management
Engagement Committee.
Tim joined the Board on 1 December
2021. He is a non-executive Director
of CT UK Capital and Income
Investment Trust PLC, abrdn UK
Smaller Growth Companies Trust
plc and Jupiter Unit Trust Managers
Ltd. He is also Chairman of Invesco
Bond Income Plus Limited. He
has over thirty years’ experience
in investment management and
was, until 2014, Head of Equities at
Baring Asset Management. Prior to
Baring, he was Head of International
Equities at Scottish Widow
Investment Partnership Limited.
Meeting attendance by the Directors during the year ending 31 December 2022 was as follows:
Board
Audit & Risk
Committee
Nomination
Committee
Remuneration
Committee
Management
Engagement
Committee
Strategy
Meeting
Number of meetings in the year 4 2 2 1 1 1
Robert Jeens
1
4 2 2 1 1 1
Humphrey van der Klugt 4 2 2 1 1 1
Katya Thomson
2
2 1 1 1 1 1
Neeta Patel 4 2 2 1 1 1
Tim Scholefield 4 2 2 1 1 1
Elisabeth Scott 4 2 2 1 1 1
The table above sets out the number of formal Board and Committee meetings held during the year and the number of
meetings attended by each Director. In addition to the scheduled Board and Committee meetings, Directors attended
ad hoc meetings to consider matters as and when required All Directors attended the Annual General Meeting of the
Company. None of the Directors has a service contract with the Company. The terms of their appointment are detailed in a
letter sent to them when they join the Board. These letters are available for inspection on request to the Company Secretary.
1
Robert Jeens is not a member of the Audit & Risk Committee but may attend by invitation.
2
Katya Thomson was appointed to the Board on 18 July 2022.
27
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Directors’ Report
The Directors present their Report and the audited
Financial Statements for the year ended 31 December
2022. Information pertaining to the business review
including the outlook and future development, is included
in the Strategic Report, starting on page 16 and within
the Chairman’s Statement on page 9.
Principal Activity and Status
The Company was incorporated on 18 October 1995
and its Ordinary Shares were listed on the London
Stock Exchange on 4 December 1995. The Company
is registered as a public limited company in England
under company number 3117355. The Company is an
investment company within the meaning of section 833
of the Companies Act 2006 and carries on business as
an investment trust. The Company is a member of the
Association of Investment Companies. The Company is an
approved investment trust under sections 1158 and 1159
of the Corporation Taxes Act 2010 and Part 2 Chapter 1 of
Statutory Instrument 2011/2999. This approval relates to
accounting periods commencing on or after 1 December
2012. The Directors are of the opinion, under advice, that
the Company has continued to conduct its affairs so as
to be able to retain such approval. As an investment trust
pursuant to section 1158 of the Corporation Tax Act 2010,
the Financial Conduct Authority (‘FCA’) rules in relation to
non-mainstream investment products do not apply to the
Company.
Investment Objective
The Company invests principally in the equity securities of
quoted technology companies on a worldwide basis with
the aim of achieving long-term capital growth, in excess of
the Dow Jones World Technology Index (sterling adjusted,
total return) (the Benchmark). Full details can be found
inside the front cover.
Investment Funds
The market value of the Company’s investments at
31 December 2022 was £899m (2021: £1,428m) with
losses of £22m (2021: gains of £408m) over book cost.
Taking these investments at this valuation, the net assets
attributable to each Ordinary Share amounted to 231.0p
at 31 December 2022 (2021: 347.9p). During the year,
the Company did not enter into any derivative contracts
and therefore there were no outstanding contracts as at
31 December 2022. See Note 13 on page 67 for the
financial instruments disclosure describing the Company’s
exposure to price risk, credit risk, liquidity risk, and cash
flow risk.
Information pertaining to the business review and future
outlook can be found in the Strategic Report starting on
page 16.
Investment Management Agreement
AllianzGI UK Branch was the appointed Investment
Manager up to 25 July 2022. Effective from 25 July 2022,
AllianzGI entered into a strategic partnership with Voya.
The Company has a tripartite Delegation Agreement
with AllianzGI and Voya for portfolio management
services. AllianzGI will continue its role as AIFM, providing
company secretarial, administrative and sales and
marketing services and portfolio management services
will be provided by Voya. The aggregate fees paid by
the Company to AllianzGI and Voya do not change. The
management agreement provides for a base fee of 0.8%
per annum payable quarterly in arrears and calculated
on the average value of the market capitalisation of the
Company at the last business day of each month in the
relevant quarter. The base fee reduces to 0.6% for any
market capitalisation between £400m and £1 billion,
and 0.5% for any market capitalisation over £1 billion.
Additionally there is a fixed fee of £55,000 per annum to
cover AllianzGI’s administration costs.
In each year, in accordance with the tripartite
management contract, the Investment Manager is entitled
to a performance fee subject to various performance
conditions. For years beginning on or after 1 January
2022, the performance fee entitlement is equal to 10.0%
(1 December 2013 to 31 December 2021: 12.5%) of the
outperformance of the adjusted NAV per share total
return as compared to the benchmark index, the Dow
Jones World Technology Index (sterling adjusted, total
return). Any underperformance brought forward from
previous years is taken into account in the calculation of
the performance fee.
A performance fee is only payable where the NAV per
share at the end of the relevant Performance Period is
greater than the NAV per share at the end of the financial
year in which a performance fee was last paid. At 31
December 2022 this ‘high water mark’ (‘HWM’) was
297.2p per share. In the event the HWM is not reached
in any year, any outperformance shall instead be carried
forward to future periods to be applied as detailed below.
Any performance fee payable is capped at 1.75% of the
average daily NAV of the Company over the period (2021:
2.25% of year-end NAV). For this purpose, the NAV is
calculated after deduction of the associated performance
fee payable.
Any outperformance in excess of the cap (or where the
HWM has not been met) shall be carried forward to
future years to be available for offset against future
underperformance but not to generate a performance
fee. To the extent the Company has underperformed the
benchmark, such underperformance is carried forward
and must be offset by future outperformance before
a performance fee can be paid. Underperformance/
28
Directors’
Review
outperformance amounts carried forward do so indefinitely until offset.
The performance fee accrued for as at 31 December 2022 was £nil (31 December 2021: £nil).
The investment management fee (payable to AllianzGI) is charged 100% to revenue and the performance fee (payable
to Voya) is charged 100% to capital.
As a result of the UK leaving the EU on 30 January 2020, and the agreed transition period ending on 31 December
2020, AllianzGI entered into the UK Temporary Permissions Regime and they were required to seek authorisation from
the Financial Conduct Authority (‘FCA’) to continue to operate in the UK. This has involved changes to AllianzGI’s legal
set up by forming a UK management company to ensure compliance with the UK regulatory regime. As detailed in
the Chairman’s Statement, the AIFM is due to transfer to Allianz Global Investors UK Limited which is a new authorised
and regulated UK entity. This change will take place once the legal set up is arranged to ensure compliance with the
UK regulatory regime. This process is continuing and is expected to be finalised in the coming months. There will be no
change to the portfolio management (delegated to Voya) and administration services received and no change to the
fee arrangements.
Continuing Appointment of the AIFM and the Investment Manager
During the year, in accordance with the Listing Rules published by the FCA, the Board reviewed the performance of
the AIFM and the Investment Manager. The review considered the Company’s investment performance over both the
short and longer terms, together with the quality and adequacy of other services provided. The Board also reviewed
the appropriateness of the terms of the Investment Management Agreement and tripartite Delegation Agreement, in
particular the length of notice period and the management fee structure.
The Board is satisfied that the continuing appointment of the AIFM and the Investment Manager under the terms of the
Investment Management Agreement is in the best interests of shareholders as a whole.
Going Concern
The Directors believe that it is appropriate to adopt the going concern basis in preparing the financial statements as the
assets of the Company consist mainly of securities that are readily realisable and the Company’s assets are significantly
greater than its liabilities. The Directors have considered the Company’s investment objective and capital structure.
The directors have also considered the risks and consequences of the geo political and macro-economic events on the
operational aspects of the company and the Company has adequate financial resources to continue in operational
existence for twelve months after approval of these financial statements.
The Company is subject to a continuation vote of the Shareholders every five years. The last continuation vote was put to
Shareholders at the AGM in 2021.
Related Party Transactions
During the financial year no transactions with related parties took place which would materially affect the financial
position or the performance of the Company.
Capital Structure
The Company’s capital structure is set out in Note 10 on page 65.
Voting Rights in the Company’s Shares
As at 10 March 2023, Allianz Technology Trust PLC’s capital consisted of:
Share class
Number of
shares issued
Voting rights
per share
Total
voting rights
Ordinary Shares of 2.5p in issue 400,742,223 1 400,742,223
Ordinary Shares of 2.5p held in treasury 28,014,457 Nil Nil
Total 428,756,680 1 400,742,223
29
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Interests in the Company’s Share Capital
The Company was aware of the following substantial interests in the voting rights of the Company as at 28 February
2023, the latest practical date before publication of the Annual Financial Report.
31 December 2022
28 February 2023
Holder
Number of
shares
% of issued
share capital
Number of
shares
% of issued
share capital
Rathbones Brothers PLC 51,704,358 12.7 50,527,560 12.6
Hargreaves Lansdown, stockbrokers (EO) 48,845,802 12.0 47,863,012 11.9
Interactive Investor (EO) 46,133,770 11.3 45,952,669 11.4
Charles Stanley 30,097,644 7.4 29,606,939 7.4
AJ Bell, stockbrokers (EO) 18,988,001 4.7 18,193,107 4.5
Evelyn Partners (Retail) 12,449,891 3.1 12,918,893 3.2
* Latest practical date
EO - Execution Only
As previously noted, during 2021 there was a 10 to 1 share split which has not affected the % of the Company’s share
capital held by these companies.
Repurchase of Shares
At the Annual General Meeting (‘AGM’) held on 26 April 2022, authority was granted for the repurchase of up to
64,270,626 Ordinary Shares of 2.5p each, representing 14.99% of the issued share capital at the time. The Board has
in place a discretionary discount protection mechanism, described in the Chairman’s Statement and in the Strategic
Report. In the year under review the Company bought back 16,703,872 shares for holding in treasury (2021: 5,565,090).
The Board and Gender Diversity
The Board is supportive of the FCA’s recently updated Listing Rules (LR 9.8.6R(9)) to encourage greater diversity on
listed company boards and has implemented the FCA’s disclosure requirements. The Board recognises the importance
of having a range of skilled, experienced individuals with the right knowledge represented on the Board. The Board will
continue to ensure that all appointments are made on the basis of merit against the specification prepared for each
appointment. The Board has chosen to align its diversity reporting reference date with the Company’s financial year end
and proposes to maintain this alignment for future reporting periods. The Company has met two of the three targets
on board diversity as at its chosen reference date, 31 December 2022: (i) at least 40% of the individuals on its board of
directors are women; and (ii) at least one individual on its board of directors being from a minority ethnic background. As
at the date of this report, the Company has met all targets. Further details on the Company’s appointment process can
be found under Appointments to the Board and Director Tenure on page 36. As required under LR 9.8.6R(10), further
detail in respect of the three targets outlined above as at 31 December 2022 is disclosed in the tables below.
As an externally managed investment company, the Company has no executive directors, employees or internal
operations. Therefore columns relating to executive management have been removed from the tables above. The roles
of chief executive and chief financial officer are not applicable to the Company, however, the Company considers that the
role of Chairman of the Audit Committee to be a senior board position and the following disclosure is made on this basis.
As at 31 December 2022:
Number of
Board members
Percentage
of the Board
Number of
Senior Positions on
the Board (Chair,
Audit Chair and SID)
Men 3 50% 2
Women 3 50% -
Other - - -
Not specified/prefer not to say - - -
30
Directors’
Review
Number of
Board members
Percentage
of the Board
Number of
Senior Positions on
the Board (Chair,
Audit Chair and SID)
White British or other White (including minority-white groups) 5 84% 2
Mixed/Multiple Ethnic Groups - - -
Asian/Asian British 1 16% -
Black/African/Caribbean/Black British - - -
Other ethnic group, including Arab - - -
Not specified/prefer not to say - - -
Since the reference date and the date that the Annual Financial Report was approved the following changes have
occurred.
As at 1 January 2023:
Number of
Board members
Percentage
of the Board
Number of
Senior Positions on
the Board (Chair,
Audit Chair and SID)
Men 3 50% 2
Women 3 50% 1
Other - - -
Not specified/prefer not to say - - -
Number of
Board members
Percentage
of the Board
Number of
Senior Positions on
the Board (Chair,
Audit Chair and SID)
White British or other White (including minority-white groups) 5 84% 3
Mixed/Multiple Ethnic Groups - - -
Asian/Asian British 1 16% -
Black/African/Caribbean/Black British - - -
Other ethnic group, including Arab - - -
Not specified/prefer not to say - - -
Directors Election and Re-elections
The Directors of the Company, with the exception of Katya Thomson, all served throughout the year under review.
With the exception of Robert Jeens, all Directors will stand for election or re-election by the shareholders at the AGM in
accordance with the AIC Code 2019. Katya Thomson, who joined the board on 18 July 2022, will stand for election at
the AGM. The biographies of the Directors are set out on pages 26 and 27. The skills and experience each Director
brings to the Board for the long-term sustainable success of the Company are set out below. The attendance record of
each Director at meetings of the Board through the year is shown on page 27.
– Resolution 2 relates to the election of Katya Thomson, who was appointed on 18 July 2022, who brings in-depth
knowledge, expertise and experience in corporate finance and accountancy which enables her to perform an in-depth
review of the Company’s financial statements as the Audit & Risk Committee Chairman.
– Resolution 3 relates to the re-election of Humphrey van der Klugt who was appointed on 1 July 2015, who has a wealth
of experience from his time as an investment manager and investment company director, with strong accounting skills.
He is Chairman of the Remuneration Committee as well as the Senior Independent Director.
31
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
– Resolution 4 relates to the re-election of Elisabeth Scott
who was appointed on 1 February 2015, who brings in-
depth investment knowledge, expertise and experience
of the investment management industry from her time
in Hong Kong and more recently from being the Chair
of the AIC.
– Resolution 5 relates to the re-election of Neeta Patel
who was appointed on 1 September 2020 as a Director
of the Company. Neeta brings a wealth of knowledge
from the technology sector.
– Resolution 6 relates to the re-election of Tim Scholefield
who was appointed on 1 December 2021 as a Director
of the Company. Tim brings a wealth of investment
knowledge, expertise and experience in investment
management, particularly in equities.
Directors’ Fees
A report on Directors’ Remuneration starts on page 43.
Directors’ and Officers’ Liability Insurance
Directors’ and Officers’ Liability Insurance cover is in place
and is provided at the expense of the Company. Directors’
and Officers’ Deed of Indemnity information can be found
on page 38.
Conflicts of Interest
Under the Companies Act 2006 a director must avoid
a situation where she/he has, or can have, a direct or
indirect interest that conflicts, or possibly may conflict, with
the Company’s interests. Directors are able, if appropriate,
to authorise these conflicts and potential conflicts. The
Board reports annually on the Company’s procedures for
ensuring that its powers of authorisation of conflicts are
operated effectively and that the procedures have been
followed.
Under the AIC Code 2019, the Directors are required
to notify the Chairman and Company Secretary of any
proposed new appointments and new conflicts or potential
conflicts for consideration, if necessary, by the Board. The
Directors are required to list their current time constraints
when requesting prior approval of a new appointment.
The Board confirms that its powers of authorisation are
operating effectively and that the agreed procedures have
been followed in the year under review.
Directors
As at the date of this Report, the Board consisted of six
non-executive Directors as detailed on pages 26 to
27. All Directors with the exception of Katya Thomson
served throughout the year. Katya was appointed to the
Board on 18 July 2022.
Board Committees
For the year under review the Management Engagement
and the Nomination Committees were chaired by the
Chairman of the Company, Robert Jeens. The Audit &
Risk Committee and Remuneration Committee were
chaired by Humphrey van der Klugt. Katya Thomson
was appointed as Chairman of the Audit & Risk
Committee effective 1 January 2023. The full Terms of
Reference, which clearly define the responsibilities of
each Committee, can be obtained from the Company
Secretary and can be found on the website www.
allianztechnologytrust.com.
Management Engagement Committee
The Management Engagement Committee report is on
page 40.
Nomination Committee
The Nomination Committee report is on page 41.
Remuneration Committee
The Remuneration Committee report is on page 42.
Audit & Risk Committee
The Audit & Risk Committee Report starts on page 48.
The Board and Matters Reserved for the Board
The Board is responsible for efficient and effective
leadership of the Company and for the Company’s
affairs. There is a formal schedule of matters reserved
for the decision of the Board and there is an agreed
procedure for Directors, in the furtherance of their duties,
to take independent professional advice if necessary
at the Company’s expense. The specific areas reserved
for the Board include the setting of parameters for and
the monitoring of investment strategy, the review of
investment performance (including performance relative
to the benchmark and to the Company’s peer group) and
investment policy; final approval of statutory Companies
Act 2006 requirements including the payment of any
dividend and the allotment of shares; matters of a Stock
Exchange or Internal Control nature such as approval
of shareholder statutory documentation; performance
reviews and director independence; and, in particular
matters of a strategic or management nature, such as
the Company’s long term objectives, commercial and
corporate strategy, share buy-back and share issue
policy, share price and discount/premium monitoring; the
appointment or removal of the AIFM and the Investment
Manager; unquoted investment valuations; consideration
and final approval of borrowing requirements and limits
and corporate governance matters.
In order to enable them to discharge their responsibilities,
prior to each meeting Directors are provided, in a timely
manner, with a comprehensive set of papers giving
detailed information on the Company’s transactions,
financial position and performance. Representatives of
the AIFM and the Investment Manager attend each Board
meeting, enabling the Directors to seek clarification on
specific issues or to probe further on matters of concern.
A full report is received from the Investment Manager
at each meeting. In the light of these reports, the Board
reviews compliance with the Company’s stated investment
objectives and, within these established guidelines, the
32
Directors’
Review
Investment Manager takes decisions as to the purchase
and sale of individual investments.
Whistleblowing
As the Company has no employees it does not have a
formal policy concerning the raising, in confidence, of any
concerns about improprieties for appropriate independent
investigation. The Audit & Risk Committee has, however,
received and noted the AIFM and Investment Manager’s
policy on this matter. However, any matters concerning
the Company may be raised with the Chairman or Senior
Independent Director.
Modern Slavery Act 2015
The Company does not provide goods or services in the
normal course of business, and as a financial investment
vehicle does not have customers. The Directors do not
therefore consider that the Company is required to make a
statement under the Modern Slavery Act 2015 in relation
to slavery or human trafficking.
Bribery Act 2010
The Board has a zero tolerance policy in relation to bribery
and corruption in its business processes and activities and
has received assurance via internal controls reporting from
the Company’s main third party service providers that
adequate safeguards are in place to protect against any
such potentially illegal behaviour by employees or agents.
Criminal Finances Act 2017
The Company has a commitment to zero tolerance
towards the criminal facilitation of tax evasion.
Global Greenhouse Gas Emissions
In light of the nature of the Company’s business there are
no associated human rights issues and the Company does
not have a human rights policy. The Company does not
maintain premises, hold any physical assets or operations
and does not have any employees. Consequently, the
Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013. For the same reason as set out above,
the Company considers itself to be a low energy user
under the Streamlined Energy and Carbon Reporting
regulations and therefore is not required to disclose
energy and carbon information.
Electronic Communications
The Company has enabled electronic communications
whereby shareholders may opt to receive documents
electronically. Shareholders who opted for this receive
either an email, where an email address has been
registered, or letter notifying them of the availability of
the Company’s Annual Report, Half-Year Report and any
other Shareholder documents on the Company’s website.
Those that elected not to switch to electronic means will
continue to receive hard-copy documents by post. In order
to reduce the Company’s impact on the environment we
encourage Shareholders, wherever possible, to register an
email address and to receive notifications electronically.
We will however continue to make available postal copies
where required.
Common Reporting Standard (‘CRS’)
CRS is a global standard for the automatic exchange
of information commissioned by the Organisation
for Economic Cooperation and Development and
incorporated into UK law by the International Tax
Compliance Regulations 2015. CRS requires the Company
to provide certain additional details to HMRC in relation
to UK resident foreign investment holders. The reporting
obligation began in 2016 and is an annual requirement.
The Registrars, Link Group, are appointed to collate such
information and file the reports with HMRC on behalf of
the Company.
Safe Custody
The Company’s listed investments are held in safe
custody by HSBC Bank Plc (the ‘Custodian’). Operational
matters with the Custodian are carried out on the
Company’s behalf by the Manager in accordance with
the provisions of the investment management agreement.
The Custodian is paid a variable fee dependent on the
number of trades transacted and location of the securities
held.
Depositary
HSBC Securities Services (the ‘Depositary’) acts as the
Company’s Depositary in accordance with the Alternative
Investment Fund Managers Directive (AIFMD). The
Depositary’s responsibilities, which are set out in the
Investor Disclosure Document on the Company’s website,
include cash monitoring; ensuring the proper segregation
and safe keeping of the Company’s financial instruments
that are held by the Custodian; and monitoring the
Company’s compliance with investment and leverage limit
requirements.
Although the Depositary has delegated the safekeeping
of all assets held within the Company’s investment
portfolio to the Custodian, in the event of loss of those
assets that constitute financial instruments under
AIFMD, the Depositary will be obliged to return to the
Company financial instruments of an identical type,
or the corresponding amount of money, unless it can
demonstrate that the loss has arisen as a result of
an external event beyond its reasonable control, the
consequences of which would have been unavoidable
despite all reasonable efforts to the contrary.
Directors’ Responsibility, Accountability and
Audit
The Directors’ Statement of Responsibilities in respect
of the financial statements is set out on page 47. The
Independent Auditors’ Report starts on page 51. The
33
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Board has delegated contractually to external agencies,
including the AIFM and the Investment Manager, the
management of the investment portfolio, the custodial
services (which include the safeguarding of the assets),
the day to day accounting, company secretarial and
administration requirements and the registration services.
Each of these contracts was entered into after full and
proper consideration by the Board of the quality and
cost of the services offered, including the control systems
in operation insofar as they relate to the affairs of the
Company. The Board receives and considers regular
reports from the AIFM and the Investment Manager and
ad hoc reports and information are supplied to the Board
as required.
Auditor Objectivity and Independence
Mazars LLP is the Auditor of the Company. The Board
believes that auditor objectivity and independence is
safeguarded for the following reasons: the extent of
non-audit work which may be carried out by Mazars LLP
is limited and would flow naturally from the firm’s role
as auditor to the Company; Mazars LLP has provided
information on its independence policies and the
safeguards and procedures it has developed to counter
perceived threats to its objectivity; it also confirms that it
is independent within the meaning of all regulatory and
professional requirements and that the objectivity of the
audit team is not impaired.
Each director at the date of approval of this report
confirms that:
(a) in so far as the director is aware, there is no relevant
audit information of which the Company’s auditors are
unaware; and
(b) the director has taken all the steps he or she ought
to have taken as a director in order to make himself/
herself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that
information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 418 of the
Companies Act 2006. Mazars LLP will stand for re-election
at the forthcoming AGM.
Disclosures Required by FCA Listing Rule 9.8.4
This rule requires listed companies to report certain
information in a single identifiable section of their annual
financial reports. Directors confirm that none of the
prescribed information is applicable to the Company in
the year under review.
Post Balance Sheet Events
Post balance sheet events are detailed in note 16 to the
financial statements.
Annual General Meeting
The AGM will be held on Wednesday 26 April 2023 at
2.30pm. This meeting will be held as a hybrid meeting. This
means that there will be an in person meeting as well as
it being streamed live for those shareholders who cannot
attend in person. The formal Notice of AGM, including
instructions on how to join online, starts on page 77.
The Directors consider that the resolutions relating to the
items of special business, as detailed below, are in the
best interests of shareholders as a whole. Accordingly, the
Directors unanimously recommend to the shareholders
that they vote in favour of the resolutions to be proposed
at the forthcoming AGM, as they intend to do in respect of
their own holdings of Ordinary Shares.
The Board welcomes all shareholders to the AGM at which
the Portfolio Manager will present his review of the year
and prospects for the future. Additionally, shareholders
wishing to communicate directly with the Board may make
contact via the Company Secretary, details of whom can
be found on page 74.
The following Resolutions relating to items of special
business will be proposed:
Authority to allot new shares and sell shares from
treasury on a non pre-emptive basis
By law, directors are not permitted to allot new shares
(or to grant rights over shares) unless authorised to do
so by shareholders. In addition, directors require specific
authority from shareholders before allotting new shares
(or granting rights over shares) for cash or selling shares
out of treasury, without first offering them to existing
shareholders in proportion to their holdings.
Resolution 10 seeks to renew the Directors’ authority to
allot shares up to a maximum aggregate nominal amount
of £1,071,891 (42,875,668 Ordinary shares), representing
approximately 10 per cent. of the Company’s total
issued ordinary share capital as at 10 March 2023, being
the latest practicable date prior to publication of this
document. The authority will expire on 26 July 2024 or, if
earlier, at the end of the Annual General Meeting of the
Company to be held in 2024, unless previously cancelled
or varied by the Company in general meeting.
Resolution 11, which is being proposed as a Special
Resolution, seeks to renew the Directors’ authority to allot
equity securities, or sell treasury shares, for cash without
having to offer such shares to existing shareholders
pro-rata to their existing holdings, up to a maximum
aggregate nominal amount of £1,071,891 (42,875,668
Ordinary shares), representing approximately 10 per cent.
of the Company’s total issued ordinary share capital as at
10 March 2023, being the latest practicable date prior to
publication of this document. The authority will expire on
26 July 2024 or, if earlier, at the end of the Annual General
Meeting of the Company to be held in 2024, unless
previously cancelled or varied by the Company in general
meeting.
The Directors do not currently intend to allot new shares
or sell shares from treasury under these authorities other
than to take advantage of opportunities in the market
34
Directors’
Review
as they arise and/or to seek to manage demand for the
Company’s shares and the premium to NAV per share at
which they trade, and only if they believe it would be in the
best interests of the Company’s existing shareholders to
do so. Under no circumstances would the Directors issue
shares or sell treasury shares at a price which would result
in a dilution of the NAV per ordinary share.
Authority for the Company to purchase its own
shares
A resolution authorising the Directors to make market
purchases of up to 14.99% of the Company’s Ordinary
Shares was passed at the AGM of the Company on 26
April 2022. Resolution 12 will authorise the renewal of
such authority enabling the Company to purchase in the
market up to a maximum of 64,270,626 Ordinary Shares
(equivalent to approximately 14.99% of the Company’s
issued share capital) either for cancellation or for holding
in treasury and sets out the minimum and maximum prices
at which Ordinary Shares may be purchased exclusive of
expenses, reflecting requirements of the Companies Act
2006 and the Listing Rules. The authority will expire on 26
July 2024 or, if earlier, at the end of the Annual General
Meeting of the Company to be held in 2024, unless
previously cancelled or varied by the Company in general
meeting.
The Board believes that such purchases in the market at
appropriate times and prices may be a suitable method of
enhancing shareholder value. The Company would make
either a single purchase or a series of purchases, when
market conditions are suitable and within guidelines set
from time to time by the Board, with the aim of maximising
the benefits to shareholders.
The Board believes that the Company’s ability to
purchase its own shares may assist liquidity in the market.
Additionally, where purchases are made at prices below
the prevailing NAV per share, this enhances the NAV for
the remaining shareholders. It is therefore intended that
purchases will only be made at prices below the prevailing
NAV per share, with the purchases to be funded from
the realised capital profits of the Company (which are
currently £648 million).
Approval is also being sought for two secondary
authorities under resolutions 13 and 14, to allot new
shares, to sell shares held as Treasury Shares, disapplying
pre-emption rights.
By order of the Board
Kelly Nice
Company Secretary
10 March 2023
35
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
The Board recognises the importance of a strong
corporate governance culture that meets the listing
requirements. The Board has put in place a framework for
corporate governance which it believes is appropriate for
an investment company in line with the best practices in
relation to matters affecting shareholders, communities,
regulators and other stakeholders of the Company. With
a range of relevant skills and experience, all Directors
contribute to the Board discussions and debates on
corporate governance. In particular, the Board believes
in providing as much transparency for investors as is
reasonably possible to ensure investors can clearly
understand the prospects of the business and enhance
liquidity of its shares while also preserving an appropriate
level of commercial confidentiality.
The Board has considered the Principles and Provisions of
the AIC Code of Corporate Governance (AIC Code). The
AIC Code addresses the Principles and Provisions set out
in the UK Corporate Governance Code (the UK Code), as
well as setting out additional Provisions on issues that are
of specific relevance to the Company. The UK Code was
updated in July 2018.
The Board considers that reporting against the Principles
and Provisions of the AIC Code, which has been endorsed
by the FRC, provides more relevant information to
shareholders.
The AIC Code is available on the Company’s and AIC’s
websites. It includes an explanation of how the AIC Code
adapts to the Principles and Provisions set out in the UK
Code to make them relevant for investment companies.
Application of the Provisions and Principles
The Company has compiled with the Principles and
Provisions of the AIC Code during the year ended 31
December 2022. Where the Principles and Provisions are
related to the role of the chief executive, internal audit
function and executive directors’ remuneration, the Board
considers these principles not relevant as the Company
is an externally managed Company with an entirely non-
executive Board, no employees or internal operations.
The Board
The Directors are responsible for the effective stewardship
of the Company’s affairs and aim to provide effective
leadership so that the Company has the platform
from which it can achieve its investment objective. The
Board’s role is to guide the overall business strategy
to achieve long term success and value for the benefit
of shareholders. A fuller description of the Company’s
strategy can be found on page 16. Strategic issues
and all operational matters of a material nature are
considered at its meetings.
At 31 December 2022, the Board comprised of six non-
executive Directors, of whom Robert Jeens is Chairman.
A formal schedule of matters reserved for decision by
the Board has been adopted. The Board has engaged
external firms to provide investment management,
secretarial, depositary and custodial services. Contractual
arrangements are in place between the Company and
these firms. The Board carefully considers the various
guidelines for determining the independence of non-
executive Directors, placing particular weight on the
view that independence is evidenced by an individual
being independent of mind, character and judgement. All
Directors are presently considered to be independent. All
Directors retire at the AGM each year and, if appropriate,
seek re-election. Each Director has signed a letter of
appointment to formalise the terms of their engagement
as a non-executive Director, therefore they do not have a
service contract with the Company. Copies of the letter of
engagements are available on request and at the AGM.
Board Culture
The Board adopts a culture where all parties are treated
with respect. The Directors provide mutual support
combined with constructive challenge. The Chairman
encourages open debate to foster a supportive and co-
operative approach for all participants. The Board aims
to be open and transparent with shareholders and their
respective stakeholders. At regular meetings the Board
engages with the AIFM and the Investment Manager
to understand its culture and receives reporting and
feedback from other service providers.
Appointments to the Board and Director Tenure
The Board regularly reviews its composition, having regard
to the Board’s structure and to the present and future
needs of the Company. The Board takes into account its
diversity, the balance of expertise and skills brought by
individual Directors, and length of service, where continuity
and experience can add significantly to the strength of
the Board and believes that this provides for a sound base
from which the interests of investors will be served to a
high standard.
The Board believes in the benefits of having a diverse
range of experience, skills, length of service and
backgrounds. The tenure of each Director, including the
Chairman, is not ordinarily expected to exceed nine years.
However, the Board is also of the view that length of
service will not necessarily compromise the independence
or contribution of directors of an investment trust company
or, indeed, its chairman. Continuity and experience can
add significantly to the strength of the Board especially
in times of market turbulence. All Directors with the
exception of Robert Jeens have served for fewer than
Corporate Governance Statement
36
Directors’
Review
nine years. As noted in the Chairman’s Statement on
page 8, Robert Jeens will retire at the Company’s
forthcoming AGM. The Directors’ appointments are
formally reviewed annually after the first AGM following
their date of joining the Board. In line with the principles
of the AIC Code, each Director will stand for re-election
annually at the AGM. The biographies of each Director
can be found on pages 26 and 27 and the ordinary
resolutions for their election and re-election on page 31.
The Board appoints all directors on merit and under the
Articles of Association of the Company, the number of
Directors may be no more than ten and no less than two.
A director may be appointed by ordinary resolution. When
the Nomination Committee considers Board succession
planning and recommends appointments to the Board,
it takes into account a variety of factors. Knowledge,
experience, skills, personal qualities, residency and
governance credentials play an important part. During
the year under review, there were no retirements and one
new appointment. The recruitment of Katya Thomson,
following a process run by Sapphire Partners, an external
recruitment agency, provides additional expertise in
corporate finance and accounting.
Meetings
The Board is scheduled to meet at least four times a
year and between these formal meetings there is regular
contact with the Alternative Investment Fund Manager
(‘AIFM’), the Investment Manager, the Company Secretary
and the Company’s Brokers. The Directors are kept fully
informed of investment and financial controls, and other
matters that are relevant to the business of the Company
that should be brought to the attention of the Directors.
The Directors also have access, where necessary in the
furtherance of their duties, to independent professional
advice at the expense of the Company. The attendance
record of Directors for the year to 31 December 2022 is set
out on page 27.
The Board considers agenda items laid out in the notice
and agenda of each meeting which are circulated to
the Board in advance of the meeting as part of the
Board papers. Directors may request any agenda items
to be added that they consider appropriate for Board
discussion. Each Director is required to inform the Board
of any potential or actual conflicts of interest prior to
Board discussion. The Board constantly considers the
Company’s strategy with regard to market conditions and
feedback from shareholders received directly or from the
Managers. The investment strategy is reviewed regularly
with the AIFM and the Investment Manager. Board
meetings include a review of investment performance and
associated matters such as marketing/ investor relations,
risk management, gearing, general administration and
compliance, peer group information and industry issues.
Board Evaluation
The Board evaluates its performance and considers
the tenure and independence of each Director on an
annual basis. During 2022, an internal Board evaluation
was conducted where by each Director was required to
complete an in-depth questionnaire on the workings
of and individual contributions to the Board as a whole
and the performance of the Chairman. The results
were discussed at the Nomination Committee held in
November 2022 and it was concluded that the evaluation
process has been satisfactory.
Each Director believes that the composition of the
Board and its Committees reflect a suitable mix of skills
and experience, and that the Board, as a whole, and
its Committees functioned effectively during 2022. All
meetings of the Board and Committees were held in
person, with some Directors attending virtually when
necessary. The composition of the Board, Committees
and tenure of the Chairman are reviewed annually by the
Nomination Committee. Further details can be found on
page 41.
The Board is diverse in its composition and thought
processes. The Directors have a breadth of experience
relevant to the Company. The Directors believe that any
changes to the Board’s composition can be managed
without undue disruption. The members of the Board
strive to challenge each other constructively to make sure
all issues are examined from different angles and the
Board holds the AIFM and Investment Managers properly
to account on their progress on inclusion and diversity.
The Board recommends the re-election of Directors and
supporting biographies are disclosed on pages 26 and
27 of this annual report.
Delegation of Responsibilities
The Board has delegated the following areas of
responsibility: The day-to-day administration of the
Company has been delegated to Allianz Global Investors
GmbH, UK Branch in its capacity as Company Secretary
and Administrator, along with financial administration and
investor relations. Tasks include preparing the valuations,
the statutory accounts, the management accounts,
presenting results and information to shareholders,
coordinating all corporate service providers to the
Company and giving the Board general advice. As
noted in the Directors’ Report, AllianzGI is in the process
of obtaining a UK license from the FCA to continue to
operate in the UK. More information can be found on
page 28.
Voya Investment Management Co LLC, the Investment
Manager has full discretion (within agreed parameters)
to make investments in accordance with the Company’s
Investment Policy. Among the specific tasks of
the Investment Manager are the overall financial
management of the Company and existing portfolio
as a whole, including the sourcing of new investments,
presenting results and information to shareholders.
37
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Directors’ and Officers’ Deed of Indemnity
The Company has also entered into qualifying third
party deeds of indemnity with each Director to cover
any liabilities that may arise to a third party, other than
the Company, for negligence, default or breach of
trust or duty. The deeds were in force during the year
to 31 December 2022 and up to the date of approval
of this report. The Directors are not indemnified in
respect of liabilities to the Company or costs incurred
in connection with criminal proceedings in which the
Director is convicted or required to pay any regulatory or
criminal fines. Directors’ and Officers’ Liabilities insurance
information can be found on page 32.
Training and Advice
New Directors are provided with an induction programme
that is tailored to the particular requirements of the
appointee. Thereafter regular briefings are provided
on changes in regulatory requirements that affect the
Company. Directors are also encouraged to attend
industry and other seminars. Directors, in the furtherance
of their duties, may also seek independent professional
advice at the expense of the Company. No Director took
such advice during the financial year under review. All
Directors have access to the advice and services of the
Company’s Secretary, who is responsible to the Board for
ensuring that Board procedures are followed and that
applicable rules and regulations are complied with. The
Company Secretary is also responsible for advising the
Board through the Chairman on all governance matters.
Conflicts of Interest
Company directors have a statutory obligation to avoid a
situation in which they (and connected persons) have, or
can have, a direct or indirect interest that conflicts, or may
possibly conflict, with the interests of the Company. The
Board has in place procedures for managing any actual or
potential conflicts of interest as set out on page 32. No
conflicts of interest arose during the year under review.
Alternative Performance Measures
In addition to providing guidance on Corporate
Governance, the AIC provides the investment company
industry with leadership on the reporting of alternative
performance measures to support a fair and balanced
approach to the performance of your Company. A
glossary of Alternative Performance Measures (‘APMs’)
can be found on page 72.
Audit, Risk Management & Internal Controls
For the reasons previously mentioned, the Directors
consider the provisions relating to the internal audit as not
relevant to the Company.
There is an Audit & Risk Committee, which is chaired by
Katya Thomson, that meets at least twice a year and the
full Audit & Risk Committee Report starts on page 48.
The Directors are responsible for overseeing the
effectiveness of the risk management and internal control
systems for the Company, which are designed to ensure
that proper accounting records are maintained, that
the financial information on which business decisions
are made and which is issued for publication is reliable,
and that the assets of the Company are safeguarded.
Such a system of internal control is designed to manage
rather than eliminate the risks of failure to achieve the
Company’s business objectives and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
The Directors, through the procedures outlined below and
further detailed in the Strategic Report and the Audit &
Risk Committee Report, have kept the effectiveness of
the Company’s risk management and internal controls
under review throughout the year covered by these
financial statements and up to the date of approval of
the Annual Financial Report. The Board has identified
risk management controls in the key areas of investment
strategy, technology sector risk, cyber risk, market risk,
currency risk, financial and liquidity risk and operational
risk for extended review. Emerging risks are also
considered by the Board.
The Directors’ Statement of Responsibilities, set out on
page 47, confirms that they have carried out a robust
assessment of the emerging and principal risks facing the
Company, including those that would threaten its business
model, future performance, solvency or liquidity and
reputation.
The AIFM and the Investment Manager have established
internal control frameworks to provide reasonable
assurance on the effectiveness of the internal controls
operated on behalf of their clients. The AIFM and
Investment Manager’s compliance and risk departments
assess the effectiveness of the internal controls on an
ongoing basis.
The AIFM and the Investment Manager provide the
Board with regular reports on all aspects of internal
control (including financial, operational and compliance
control, risk management and relationships with external
service providers). Business risks have been analysed and
recorded in a Risk Matrix, which is formally reviewed by
the Audit & Risk Committee at its meetings and at other
times as necessary. It is believed that an appropriate
framework is in place to meet the requirements of the AIC
Code.
The Investment Manager, at least on a quarterly basis,
reports to the Board on the market and on the investment
performance of the Company’s portfolio. Further
information is contained in the Chairman’s Statement, the
Directors’ Report and the Investment Manager’s Review.
38
Directors’
Review
Relations with Shareholders
During 2022, the Company had regular contact with its
institutional shareholders in person and virtually through
the AIFM and the Investment Manager. The AGM will be
held as a hybrid meeting and will allow shareholders to
ask the Board questions.
The Board and the Annual Report
The Board is responsible for reviewing the entire annual
report and has noted the supporting information received
and the recommendations of the Audit & Risk Committee.
The Board has considered whether the annual report
satisfactorily reflects a true picture of the Company and its
activities and performance in the year under review with a
clear link between the relevant sections of the report. The
Board was then able to confirm that the annual report,
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.
By order of the Board
Kelly Nice
Company Secretary
10 March 2023
39
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Role of the Committee
The role of the Management Engagement Committee is
to review the investment management agreement and
the Company’s Service Providers. The Committee monitors
the performance of the Investment Manager for portfolio
management services and the AIFM for the secretarial,
financial, administration, marketing and support services
that it provides under a tripartite agreement. It also
reviews the terms of the agreement including the level and
structure of fees payable, the length of notice period and
best practice provisions generally. All of the Committee’s
responsibilities have been carried out over the course of
the year under review.
Composition of the Committee
All the Directors are members of the Committee. The terms
of reference can be found on the Company’s website www.
allianztechnologytrust.com
Manager Evaluation Process
During the year under review, the Committee met once
to consider the relationship, and the services provided
by both the AIFM and the Investment Manager prior to
making its recommendation to the Board on the retention
of the AIFM and the Investment Manager being in the
best interests of the Shareholders.
The Committee reviewed the performance fee
arrangements to ensure they were still appropriate for the
size of the Company.
The Committee undertook additional work to review the
split of responsibilities under the tripartite agreement,
details of which are noted in the Chairman’s Statement
and in the Directors Report on page 28.
The performance of the AIFM and the Investment
Manager is considered at every Board meeting with a
formal evaluation by the Committee each year. For the
purpose of its ongoing monitoring, the Board receives
detailed reports and views from the Investment Manager
on the investment policy and strategies, asset allocation,
stock selection, attributions, portfolio characteristics and
risk. The Board also assesses the Investment Manager’s
performance against the investment controls set by the
Board.
A breakdown of the portfolio begins on page 14.
The AIFM and the Investment Manager
Reappointment
The Committee last met in November 2022 and in a
closed session after the presentations from the AIFM
and the Investment Manager, it was concluded that in its
opinion the continuing appointment of both the AIFM and
the Investment Manager on the terms agreed was in the
interests of shareholders as a whole and recommended
this to the Board.
Committee Evaluation
The activities of the Management Engagement
Committee were considered as part of the Board
appraisal process completed in accordance with standard
governance arrangements as summarised on page 37.
The conclusion from the process was that the Committee
was operating effectively, with the right balance of
membership and skills.
Robert Jeens
Management Engagement Committee Chairman
10 March 2023
Report of the Management Engagement
Committee
40
Directors’
Review
Role of the Committee
The primary role of the Nomination Committee is to
review and make recommendations with regard to
Board structure, size and composition, the balance of
knowledge, experience, skill ranges and diversity and
consider succession planning and tenure policy. All of
the Committee’s responsibilities have been carried out
during the year under review. The Committee met on two
occasions during the year and specifically considered,
monitored and reviewed the following matters:
– the structure and size of the Board and its composition
particularly in terms of succession planning and the
experience and skills of the individual Directors and
diversity across the Board as a whole;
– tenure policy;
– the criteria for future Board appointments and the
methods of recruitment, selection and appointment;
– the recruitment of a new Director and the
reappointment of those Directors standing for re-
election at annual general meetings;
– the need for any changes in committee membership;
– the attendance and time commitment of the Directors
in fulfilling their duties, including the extent of their other
directorships;
– the question of each Director’s independence prior to
publication of the Report and Accounts; and
– the authorisation of each Director’s situational conflicts
of interests in accordance with the provisions of the Act.
Composition of the Committee
The Committee is composed of all the current Directors
and chaired by the Chairman of the Board. The terms of
reference can be found on the Company’s website www.
allianztechnologytrust.com.
Succession Planning
During the year the Committee started the process for the
appointment of a new non-executive director. Sapphire
Partners, an executive search agency, were engaged to
assist with the recruitment process. The Company and
the Directors have no other connection with Sapphire
Partners. The Committee provided their criteria for the
appointment. Sapphire Partners introduced several
candidates to the Committee who were invited for
interview with all existing directors. Katya Thomson was
appointed to the Board on 18 July 2022.
Board Evaluation
An external evaluation was last conducted in 2020,
and in 2021 and 2022 the evaluation was performed
internally. The evaluation process adopted required each
director to complete an in-depth questionnaire on the
workings of and individual contributions to the Board as a
whole and the performance of the Chairman. Questions
also included a review of the interaction with the AIFM
and the Investment Manager. The Senior Independent
Director led the review of the Chairman. The results of
the questionnaires were collated anonymously and
discussed at the Committee meeting in November 2022.
Any concerns were discussed openly and addressed
with all Directors with the AIFM present. It was agreed
by all participants that the evaluation process had been
effective and that the review points identified would be of
benefit to the Board and the Company as a whole. Board
and diversity is summarised on page 30.
Committee Evaluation
The activities of the Nomination Committee were
considered as part of the Board appraisal process
completed in accordance with standard governance
arrangements as summarised on page 37. The
conclusion from the process was that the Committee
was operating effectively, with the right balance of
membership, experience and skills.
Robert Jeens
Nomination Committee Chairman
10 March 2023
Report of the Nomination Committee
41
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Role of the Committee
The primary role of the Remuneration Committee is to
determine the remuneration policy for the Chairman
and Directors as well as considering the need to appoint
external remuneration consultations. The Committee
reviews the effectiveness of the remuneration policy and
strategy at least once a year.
Composition of the Committee
The Committee comprises of all current Directors and
is chaired by Humphrey van der Klugt. The terms of
reference can be found on the Company’s website www.
allianztechnologytrust.com.
Consideration of Directors’ Remuneration
The Committee has not received external independent
advice or services in respect of its consideration of the
Directors’ remuneration; however the Company Secretary
provides the Board with details of comparable fees and
other market information. The policy is to review directors’
fee rates from time to time, but reviews will not necessarily
result in a change to the rates. Any feedback received
from shareholders is also taken into account when setting
remuneration levels.
The level of Directors’ fees are recommended to and
approved by the Board. Directors abstain from voting on
their own fees. Directors’ remuneration is paid quarterly or
monthly in arrears and is paid to the individual director; no
payments have been made to third parties on behalf of
the individual.
A detailed summary of the Chairman and Directors’
remuneration starts on page 43.
Committee Evaluation
The activities of the Remuneration Committee were
considered as part of the Board appraisal process
completed in accordance with standard governance
arrangements as summarised on page 37. The
conclusion from the process was that the Committee was
operating effectively.
Humphrey van der Klugt
Remuneration Committee Chairman
10 March 2023
Report of the Remuneration Committee
42
Directors’
Review
Directors’ Remuneration Implementation Report
Introduction
This Directors’ Remuneration Implementation Report (the Report) has been prepared in accordance with the
requirements of Sections 420-422A of the Companies Act 2006 and Schedule 8 of The Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 as amended in August 2013 (the Regulations). The
Report is subject to an annual advisory vote of shareholders and an Ordinary Resolution for the approval of the Report
will be put to the shareholders at the AGM.
The law requires your Company’s Auditor to audit certain disclosures provided. Where disclosures have been audited,
they are noted as such. The Auditor’s opinion is included in their report which starts on page 51.
Remuneration Policy Report
The Remuneration Policy of the Company is required to be put to a binding vote of shareholders at least once every
three years; the policy was last proposed to and approved by shareholders at the AGM in 2021 and will therefore next be
proposed as a binding vote at the AGM in 2024. The Remuneration Policy Report follows on page 46 and is available
on the Company’s website www.allianztechnologytrust.com.
Remuneration Committee
A detailed description of the Committee’s role and members can be found on page 42.
Annual General Meeting (AGM) Voting Statement
At the AGM held on 26 April 2022, of the votes cast by proxy for the approval of the Remuneration Implementation
Report, 146,364,312 (98.87%) were cast in favour, 6,000 (0.01%) were cast as discretionary, 1,663,005 (1.12%) were cast
against and 204,736 shares were withheld from the vote. For the Remuneration Policy Report, which was last proposed as
a binding vote at the AGM held on 29 April 2021, of the votes cast for approval, 17,117,110 (99.65%) were cast in favour,
1,225 (0.01%) were cast as discretionary, 59,259 (0.34%) were cast against and 32,790 shares were withheld from the vote.
Annual Statement
The Chairman of the Remuneration Committee reports that the Directors’ remuneration will be increased as of 1 January
2023 as set out on page 44.
Relative importance of spend on pay
The following disclosure is a statutory requirement. The directors, however, do not consider that the comparison of
directors’ remuneration with distributions made by the Company is a meaningful measure of the Company’s overall
performance. The table below sets out the total level of remuneration compared to the share buy-backs, dividends and
distributions made in the year:
2022
£
2021
£
2020
£
2019
£
2018
£
Total Remuneration 203,064 149,500 128,250 132,167 118,084*
Total Dividends, Share Buy-backs and Distributions 39,263,000 16,772,000 - - -
* 2018 was a 13 month period
Directors’ Service Contracts
It is the Board’s policy that none of the Directors has a service contract. The terms of their appointment provide that
Directors shall, in accordance with the Articles of Association, stand for election by shareholders at the first AGM after
their appointment. Each Director will stand for annual election as required by the AIC Code. The terms also provide
that a Director may resign by notice in writing to the Board at any time and may be removed without notice and that
compensation will not be due on leaving office.
Directors’ and Officers’ Liability Insurance cover is held by the Company. The Board has granted individual indemnities to
the Directors.
43
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Allianz Technology Trust
Ordinary Share Price Total
Return
Allianz Technology Trust Net
Asset Value Total Return
Dow Jones World Technology
Index (sterling adjusted, total
return)
Source: AllianzGI / Datastream in sterling. Figures have been rebased to 100 as at 31 December 2012.
1250
650
50
Dec 12 Dec13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22
%
Your Company’s Performance
The regulations require a line graph to be included in the Directors’ Remuneration Report showing total shareholder return for
each of the financial years over a ten year period. The graph below measures the Company’s share price and net asset value
performance against its Benchmark index of the Dow Jones World Technology Index and is rebased to 100. An explanation of
the Company’s performance is given in the Chairman’s Statement and Investment Manager’s Review.
Directors’ Fees
All the Directors, apart from Katya Thomson who joined on 18 July 2022, served throughout the year and received the fees set
out below.
In the year under review to 31 December 2022 the Directors’ fees were paid at the rate of £32,000 (2021: £30,000) per annum
with the Chairman of the Board receiving an extra £19,000 (2021: £18,000) per annum and the Chairman of the Audit & Risk
Committee, who is also the Senior Independent Director, an extra £9,500 (2021: £9,000) per annum.
A review of Directors’ fees is conducted annually by the Remuneration Committee, taking into consideration the increasing
demands and accountability of the corporate governance and regulatory environment, as well as the fees of other
comparable investment companies. No external remuneration consultant was used. As a result of the review, the following
increases were agreed. The Directors’ fees will be increased as of 1 January 2023 to £33,000 per annum. The Chairman of
the Board will receive £53,000 per annum. The Chairman of the Audit & Risk Committee will receive £41,500 and the Senior
Independent Director will receive £34,500 per annum.
In accordance with the Company’s Articles of Association, the aggregate maximum limit for fees that may be paid to the
Directors per annum is £250,000.
These fees exclude any employers’ national insurance contributions, if applicable. Directors are authorised to claim reasonable
expenses from the Company in relation to the performance of their duties. However, the policy is to only claim ad hoc expenses
which would not ordinarily include general travel to and from meetings held in London. No director is entitled to receive share
options, bonuses, pension benefits or other financial or non-financial incentives either in substitution for or in addition to the
remuneration stated above.
44
Directors’
Review
Directors’ Remuneration (Audited Information)
The Directors who served in the year received the following emoluments in the form of fees:
Appointed
Variable
Fees
2022
Total
Fees
2022
Variable
Fees
2021
Total
Fees
2021
Robert Jeens 1 August 2013 (and as Chairman: 2 April 2014) - 51,000 - 48,000
Humphrey van der Klugt 1 July 2015 (and as Audit & Risk Committee Chairman: 14 April 2016) - 41,500 - 39,000
Elisabeth Scott 1 February 2015 - 32,000 - 30,000
Neeta Patel 1 September 2019 - 32,000 - 30,000
Tim Scholefield 1 December 2022 - 32,000 - 2,500
Katya Thomson 18 July 2022 - 14,564 - -
- 203,064 - 149,500
No payments of Directors’ fees were made to third parties. The fees are pro-rata.
2022
£
% change
from
2022 to
2021
2021
£
% change
from
2020 to
2021
2020
£
% change
from
2019 to
2020
2019
£
Chairman 51,000 6 48,000 18 40,500 4 39,000
Audit Chairman & SID 41,500 6 39,000 15 33,750 4 32,500
Independent Director 32,000 6 30,000 11 27,000 4 26,000
The requirements to disclose this information came into force with financial years on or after 10 June 2019 and the comparison
will be expanded in future annual reports until such time as it covers a five year period.
Directors’ Interests (Audited Information)
The Directors are not required to hold any shares in the Company; however, pursuant to Article 19 of the EU Market Abuse
Regulations the Directors’ Interests in the share capital of the Company are shown in the table below.
Ordinary Shares of 2.5p each
Appointed
31 December
2022
31 December
2021
Robert Jeens 1 August 2013 100,000 100,000
Humphrey van der Klugt 1 July 2015 70,000 70,000
Elisabeth Scott 1 February 2015 16,500 16,500
Neeta Patel* 1 September 2019 7,426 4,968
Tim Scholefield 1 December 2021 10,800 -
Katya Thomson 18 July 2022 8,800 -
* Neeta Patel invests via a monthly investment plan.
Since the year end, Neeta Patel has increased her holding to 7,881 Ordinary Shares. There have been no changes to any of the other Directors’ holdings from the year
end to the date of this report.
Humphrey van der Klugt
Remuneration Committee Chairman
10 March 2023
45
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Directors’ Remuneration Policy Report
In accordance with Schedule 8 of The Large and Medium
sized Companies and Groups (Accounts and Reports)
Regulations 2008 as amended, the Company is required
to put to a binding vote of shareholders, at least every
three years, the Company’s Remuneration Policy Report
(the Policy).
The Policy was last proposed to and approved by
shareholders at the AGM in 2021 and will therefore next
be proposed as an Ordinary Resolution at the AGM in
2024.
Directors’ Remuneration
The Company’s remuneration policy provides that
fees payable to the Directors should reflect the time
spent by the Board on the Company’s affairs and the
responsibilities borne by the Directors and should be
sufficient to enable candidates of high calibre to be
recruited.
Directors are remunerated solely in the form of fees
payable monthly or quarterly in arrears, paid to the
Director personally or to a specified third party. There are
no long-term incentive schemes, share option schemes or
pension arrangements and the fees are not specifically
related to the Directors’ performance, either individually
or collectively. There are no payments of recruitment
bonuses.
The 2022 annual fee rates are Chairman: £51,000, Audit &
Risk Committee Chairman and SID position: £41,500 and
Director: £32,000. The projected 2023 annual fee rates are
Chairman: £53,000, Audit & Risk Committee Chairman:
£41,500, SID position: £34,500 and Director: £33,000. The
Company does not have a Chief Executive Officer and
there are no employees.
The Board consists of non-executive Directors whose
appointments are reviewed by the Board as a whole.
None of the Directors has a service contract with the
Company and any Director may resign by notice in writing
to the Board at any time; there are no set notice periods
and no compensation is payable to a Director on leaving
office.
When reviewing the level of remuneration consideration
is given to the time, commitment and Committee
responsibilities of each Director. The Board also takes into
account the fees paid to directors of companies within its
peer group.
The Company’s Articles of Association limit the aggregate
fees payable to Directors to £250,000 per annum.
The policy is for the Chairman of the Board and of
each relevant Committee to be paid a fee which is
proportionate to the additional responsibilities involved
in the position. It is intended that the above remuneration
policy will continue to apply in the forthcoming financial
year and subsequent years.
Humphrey van der Klugt
Remuneration Committee Chairman
10 March 2023
46
Directors’
Review
The Directors are responsible for preparing the Annual
Financial 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 the
Directors have elected to prepare the financial statements
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards and applicable law). The financial statements
are required by law to give a true and fair view of the
state of affairs of the Company and of the total return of
the Company for that year. In preparing these financial
statements, the Directors are required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and estimates that are reasonable
and prudent;
– state whether applicable UK accounting standards have
been followed; and
– prepare the financial statements on the going concern
basis, unless it is inappropriate to presume that the
Company will continue in business.
The Directors confirm that the financial statements comply
with the above requirements.
The Directors are responsible for keeping adequate
accounting records that disclose with reasonable accuracy
at any time the financial position of the Company and
enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic Report, a
Directors’ Report, and Corporate Governance Statement,
and a Directors’ Remuneration Report which comply 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. The financial
statements are published on www.allianztechnologytrust.
com, which is a website maintained by the Alternative
Investment Fund Manager. The work undertaken by
the Auditors does not involve consideration of the
maintenance and integrity of the website and, accordingly,
the Auditors accept no responsibility for any changes that
may have occurred to the financial statements since they
were initially presented on the website. Visitors to the
website need to be aware that legislation in the United
Kingdom governing the preparation and dissemination
of the financial statements may differ from legislation in
other jurisdictions.
Neither an audit nor a review provides assurance on
the maintenance and integrity of the website, including
controls used to achieve this, and in particular whether
any changes may have occurred to the financial
information since first published. These matters are the
responsibility of the Directors but no control procedures
can provide absolute assurance in this area.
The Directors each confirm to the best of their knowledge
that:
(a) the Financial Statements, prepared in accordance
with applicable accounting standards, give a true and
fair view of the assets, liabilities, financial position and
return of the Company; and
(b) the Strategic Report includes a fair review of the
development and performance of the business and
the position of the Company, along with a description
of the principal risks and uncertainties that the
Company faces.
The Directors confirm that the Annual Report and
Financial Statements, taken as a whole are fair, balanced
and understandable and provide the information
necessary to assess the Company’s position and
performance, business model and strategy.
For and on behalf of the Board
Robert Jeens
Chairman
10 March 2023
Statement of Directors’ Responsibilities
47
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Audit & Risk Committee Report
Introduction from the Chairman
I am pleased to present my formal report to Shareholders as Chairman of the Audit & Risk
Committee for the year ended 31 December 2022. This is my first report to Shareholders as Chairman
of the Committee. I would like to take this opportunity to thank the previous Chairman, Humphrey
van der Klugt, who stepped down as Chairman of the Committee on 31 December 2022, for his
support and guidance to enable a smooth transition. During the year under review and following
an audit tender in 2021, Mazars LLP were appointed as auditor at the Company’s Annual General
Meeting effective from 13 July 2022. Their independent report can be found on page 51.
Responsibility
The primary responsibilities of the Committee are to ensure the integrity of the Company’s financial
reporting and the appropriateness of the risk management processes and internal controls. The
report details how we carry out this role.
Composition and Meetings
The members of the Committee during the year were Humphrey van der Klugt as Chairman,
Elisabeth Scott, Neeta Patel, Tim Scholefield and myself joining the Committee on 18 July 2022.
Robert Jeens, Chairman of the Board, is not a member of the Committee but attends meetings by
invitation. The Committee believes that it is in the best interests of the Company for the Chairman of
the Board to attend the Committee meetings. All the members of the Committee are independent
Non-Executive Directors, and their skills and experience are set out on pages 26 and 27. The
Board reviews the composition of the Committee and it considers that, collectively, its members
have sufficient recent and relevant financial and sector experience to fully discharge their
responsibilities.
The Committee meets at least twice per year. The attendance of the Committee members is shown
on page 27. The Committee invites the external auditors and personnel from the AIFM’s financial,
compliance and risk functions to attend and report to the Committee on relevant matters. As
part of the year end process I, as Chairman of the Committee, attended additional meetings with
representatives of the AIFM and the external auditor. In addition, during the year, the Committee
also met privately with the external auditor to give them an opportunity to raise any issues without
management present. After each Committee meeting the Chairman of the Committee reports to
the Board on the main items discussed at the meeting.
Role and Responsibilities of the Audit & Risk Committee
The Committee’s authority and duties are defined in its terms of reference, which were reviewed
during the year, and are available on the Company’s website www.allianztechnologytrust.com.
The principal activities carried out during the year were:
– Financial reporting: we considered the Company’s financial reports, including the implications
of any accounting standards and regulatory changes, significant accounting issues and the
appropriateness of the accounting policies adopted. We considered and are satisfied that, taken
as a whole, the Annual Financial Report is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Company’s position, performance, business
model and strategy.
– External audit: we considered the scope of the external audit plan and the subsequent findings
from this work.
– Risk and internal control: we considered the key risks facing the Company and the adequacy and
effectiveness of the internal controls and risk management processes.
– External auditor: we considered the independence, effectiveness and fees of the external auditor,
as detailed later in this report.
48
Directors’
Review
Internal Audit
The Committee continues to believe that the Company does not require an internal audit function as it delegates its
day-to-day operations to third parties from whom it receives internal control reports. Reports from third party auditors
on the internal controls maintained on behalf of the Company by AllianzGI and by other providers of administrative and
custodian services to AllianzGI or directly to the Company were reviewed during the year.
Risk Management
The Board has ultimate responsibility for the management of the risks associated with the Company. The Committee
assists the Board by undertaking a formal assessment of risks and reporting to the Board as appropriate. The Committee
has reviewed its approach to risk management and the reporting of such to the Board and has concluded that the
processes in place are adequate and provide a robust assessment of risk associated with the Company.
The Committee reviews in detail at least twice per year the full Risk Matrix and Controls schedule and makes
appropriate recommendations to the Board which may include adding or removing risks for consideration, monitoring
and reviewing the mitigating actions. In turn the Board carries out both a detailed specific review of matters highlighted
by the Committee and continues to assess the high-level risks.
The Audit & Risk Committee also reviews the annual Internal Controls documents provided by key third party service
providers and reports as necessary to the Board. Further details of the key risks associated with the Company are
detailed within the Strategic Report.
Significant Areas of Risk and Focus Considered by the Audit & Risk Committee During the Year
The Annual Report and Financial Statements are the responsibility of the Board and the Statement of Directors’
Responsibilities is on page 47. The Audit & Risk Committee advises the Board on the form and content of the Annual
Report and Financial Statements, any issues which may arise in relation to these and any specific areas which require
judgement.
The Committee is responsible for agreeing a suitable Audit Plan for the year-end audit and production of the Annual
Financial Report. The significant areas of risk and focus that the Committee considered were substantively unchanged
from 2021 and included:
Valuation, existence and
ownership of the Company’s
investments
Valuations of actively traded investments are reconciled using stock
exchange prices provided by third party pricing vendors. The Company holds
no unquoted investments. Ownership of listed investments is verified by
reconciliation to the custodian’s records.
Recognition, completeness and
occurrence of revenue
Income received is accounted for in line with the Company’s accounting
policy (as set out on page 59) and is reviewed by the Committee.
Compliance with Section 1158 of
the Corporation Tax Act 2010
The Committee regularly considers the controls in place to ensure that the
regulations for ensuring investment trust status are observed at all times.
Maintaining internal controls The Committee receives regular reports on internal controls from AllianzGI
and its delegates and has access to the relevant personnel at AllianzGI who
have responsibility for risk management.
Management and Performance
Fees
The calculation of the management and performance fees payable to
AllianzGI and Voya is reviewed by the Committee before being approved by
the Board.
Viability Statement The Board is required to make a longer term viability statement in relation to
the continuing operations of the Company. The Committee reviews papers
produced in support of the statement made by the Board which assesses the
viability of the Company over a period of five years.
Transition of Investment
Manager
The Committee reviewed the transition arrangement and delegation
agreement.
Annual Financial Report
The Committee and then the whole Board reviewed the entire Annual Financial Report and noted all the supporting
information received. It then considered and concluded that the annual report satisfactorily reflected a true picture
of the Company and its activities and performance in the year, with a clear link between the relevant sections of the
49
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
report. The directors were then able to confirm that the Annual Financial Report, taken as a whole, is fair, balanced
and understandable and provides the information necessary for shareholders to assess the Company’s position,
performance, business model and strategy.
Auditor Effectiveness
The Committee is responsible for reviewing the terms of appointment of the Auditor and for monitoring the audit process
including the effectiveness and objectivity of the Auditor in fulfilling the terms of the agreed Audit Plan and the Audit
Findings Report subsequently issued by them.
As part of the review of the auditor, the members of the Committee and those representatives of the Manager involved
in the audit process reviewed and considered a number of areas including:
– the reputation and standing of the audit firm
– the audit processes and evidence of partner oversight
– audit communication including details of planning; and
– information on relevant accounting and regulatory developments, and recommendations on corporate reporting.
Auditor Tenure
There are no contractual obligations which restrict the Committee’s choice of auditor. This is Mazars LLP’s first year as the
Company’s Independent Auditor with Nargis Yunis appointed as audit partner. Following professional guidelines, Nargis
can serve for up to five years. The continued appointment of the Auditor is considered by the Audit & Risk Committee each
year, taking into account relevant guidance and best practice and considering their independence and the effectiveness
of the external audit process.
Auditor Independence
The Committee has confirmed the independence of the auditor and Mazars LLP has confirmed that they are
independent of the Company and have complied with relevant standards on auditing. Mazars LLP did not provide any
non-audit services to the Company in this or the previous accounting year.
The Committee also took into account the competitiveness of their fees and obtained feedback from the AIFM regarding
the performance of the audit team. The Committee is satisfied with the independence and performance of the Auditor.
Mazars LLP will be proposed at the forthcoming AGM to be re-appointed as auditors of the Company for the year
ending 31 December 2023.
Committee Evaluation
The activities of the Audit & Risk Committee were considered as part of the Board appraisal process completed in
accordance with standard governance arrangements as summarised on page 37.
The conclusion from the process was that the Committee was operating effectively, with the right balance of
membership, experience and skills.
Katya Thomson
Audit & Risk Committee Chairman
10 March 2023
50
Financial
Statements
Independent Auditor’s Report to the Members of
Allianz Technology Trust PLC
Opinion
We have audited the financial statements of Allianz
Technology Trust PLC (the ‘Company’) for the year ended
31 December 2022 which comprise the Income Statement,
the Balance Sheet, the Statement of Changes in Equity,
and notes to the financial statements, including a
summary of significant accounting policies.
The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom
Accounting Standards, including FRS 102 “The Financial
Reporting Standard applicable in the UK and Republic of
Ireland” (United Kingdom Generally Accepted Accounting
Practice).
In our opinion, the financial statements:
– give a true and fair view of the state of the Company’s
affairs as at 31 December 2022 and of the loss for the
year then ended;
– have been properly prepared in accordance United
Kingdom Generally Accepted Accounting Practice; and
– have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the “Auditor’s responsibilities for the audit
of the financial statements” section of our report. We
are independent of the Company in accordance with
the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities and public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
Our audit procedures to evaluate the directors’
assessment of the Company’s ability to continue to adopt
the going concern basis of accounting included but were
not limited to:
– undertaking an initial assessment at the planning
stage of the audit to identify events or conditions that
may cast significant doubt on the Company’s ability to
continue as a going concern;
– obtaining an understanding of the relevant controls
relating to the directors’ going concern assessment;
– making enquiries of the directors to understand the
period of assessment considered by the directors,
assessing and challenging the appropriateness of the
directors’ key assumptions in their income and expense
projections and implication of those when assessing
severe but plausible scenarios;
– assessing the liquidity of the portfolio through reviewing
Management assessment of how quickly the portfolio
could be liquidated if required;
– assessing the Company’s performance to date;
– evaluating the appropriateness of the Directors’
disclosures in the financial statements on going concern
and viability statement.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue as a
going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
In relation to Allianz Technology Trust PLC’s reporting on
how it has applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to
in relation to the directors’ statement in the financial
statements about whether the director’s considered
it appropriate to adopt the going concern basis of
accounting.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in our
audit of the financial statements of the current period
and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
We summarise below the key audit matter in forming our
opinion above, together with an overview of the principal
audit procedures performed to address this matter and
our key observations arising from those procedures.
51
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
This matter, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
Key Audit Matter How our scope addressed the matter
Valuation, existence and ownership of the investment
portfolio
(as described on page 49 in the Report of the Audit
and Risk Committee and as per the accounting policy
set out on page 59).
Investments held as of 31 December 2022 were valued
at £898.9m (2021: £1,428.1m), these are measured in
accordance United Kingdom Accounting Standards,
and the Statement of Recommended Practice issued
by the Association of Investment Companies. The
investment portfolio solely comprises of level one
investments.
Investments make up 96% (2021:97%) of net assets by
value and are considered to be the key driver for the
Company’s performance. The investments are made
up of quoted investments that are classified upon initial
recognition as held at fair value through profit or loss
and are measured initially and subsequently at fair
value which is based on their quoted bid prices at the
close of business on the year-end date. There is a risk
that investment recorded might not exist or might not
be owned by the company. Although the investments
are valued at quoted bid prices, there is a risk that
errors in valuation can have a significant impact on the
numbers presented.
We therefore identified valuation, existence and
ownership of investments as a key audit matter as it
had the greatest effect on our overall audit strategy
and allocation of resources.
Our audit procedures included, but were not limited to:
– understanding Management’s process to record
and value investments through discussions with
Management and examination of control reports for
State Street;
– for all investments in the portfolio, agreeing
investment holdings to HSBC Bank Plc’s and
HSBC Security Services custodian and depositary
confirmation in order to obtain comfort over
existence and ownership;
– for all investments in the portfolio, independently
comparing the market prices to a reputable third
party pricing source and recalculating the investment
valuations as at the year-end;
– for all investments in the portfolio, assessing the
frequency of trading to ensuring appropriateness of
fair value classification;
– reviewing the adequacy of the disclosure in
the financial statements and ensure that the
methodology applied is in accordance with United
Kingdom Accounting Standards and the Statement
of Recommended Practice issued by the Association
of Investment Companies.
Our observations
We have no matters to communicate with regards
to the valuation, existence and ownership of the
investment portfolio held as at 31 December 2022
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our
professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality £9.4m
How we determined it
1% of net assets
52
Financial
Statements
Rationale for benchmark applied
Net assets have been identified as the principal benchmark
within the financial statements as it is considered to be the
main focus of the shareholders.
Whilst valuation processes for these investments are
not considered to be complex, there is a risk that errors
in valuation could cause a material misstatement. 1%
has been chosen as it is a generally accepted industry
benchmark for investment trust audits and the Company is
a public interest entity.
Performance materiality
Performance materiality is set to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements in the financial statements
exceeds materiality for the financial statements as a whole.
On the basis of our risk assessments and together with
our assessment of the overall control environment, we set
performance materiality at £4.7m which represents 50% of
overall materiality.
Reporting threshold
We agreed with the directors that we would report to them
misstatements identified during our audit above £0.3m as
well as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
We also determine a lower level of specific materiality for the Income Statement.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due to
fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at
where the directors made subjective judgements, such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the
financial statements as a whole. We used the outputs of our risk assessment, our understanding of the Company, its
environment, controls, and critical business processes, to consider qualitative factors to ensure that we obtained sufficient
coverage across all financial statement line items.
Other information
The other information comprises the information included in the annual financial report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements and those reports have been prepared in
accordance with applicable legal requirements;
53
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
– the information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given in
compliance with rules 7.2.5 and 7.2.6 in the Disclosure
Guidance and Transparency Rules sourcebook made
by the Financial Conduct Authority (the FCA Rules),
is consistent with the financial statements and has
been prepared in accordance with applicable legal
requirements; and
– information about the Company’s corporate
governance code and practices and about its
administrative, management and supervisory bodies
and their committees complies with rules 7.2.2, 7.2.3
and 7.2.7 of the FCA Rules.
Matters on which we are required to report by
exception
In light of the knowledge and understanding of the
Company and their environment obtained in the course of
the audit, we have not identified material misstatements
in the:
– strategic report or the directors’ report; or
– information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given in
compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
– adequate accounting records have not been kept by
the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
– the Company’s financial statements and the part of the
directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
– certain disclosures of directors’ remuneration specified
by law are not made; or
– we have not received all the information and
explanations we require for our audit; or
– a corporate governance statement has not been
prepared by the Company.
Corporate governance statement
The Listing Rules require us to review the directors’
statement in relation to going concern, longer-term
viability and that part of the Corporate Governance
Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Statement
specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements
of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge
obtained during the audit:
– Directors’ statement with regards the appropriateness
of adopting the going concern basis of accounting and
any material uncertainties identified, set out on page
29;
– Directors’ explanation as to its assessment of the entity’s
prospects, the period this assessment covers and why
the period is appropriate, set out on page 19;
– Directors’ statement on fair, balanced and
understandable, set out on page 47;
– Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks, set out
on page 20;
– The section of the annual financial report that describes
the review of effectiveness of risk management and
internal control systems, set out on page 20; and;
– The section describing the work of the audit committee,
set out on page 48.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities
statement set out on page 47, the directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of
irregularities, including fraud.
Based on our understanding of the Company and their
industry, we considered that non-compliance with the
following laws and regulations might have a material
effect on the financial statements: Bribery Act 2010, Data
Protection Act/GDPR, Money Laundering Regulations
54
Financial
Statements
2007 and Money Laundering (Amendment) regulations
2012, The Alternative Investment Fund Managers
Directive (AIFMD), Financial services and markets act
2000.
To help us identify instances of non-compliance with these
laws and regulations, and in identifying and assessing
the risks of material misstatement in respect to non-
compliance, our procedures included, but were not limited
to:
– Gaining an understanding of the legal and regulatory
framework applicable to the Company, the industry in
which they operate, and the structure of the Company,
and considering the risk of acts by the Company which
were contrary to the applicable laws and regulations,
including fraud;
– Inquiring of the directors, management and, where
appropriate, those charged with governance, as to
whether the Company is in compliance with laws
and regulations, and discussing their policies and
procedures regarding compliance with laws and
regulations;
– Reviewing any correspondence with relevant licensing
or regulatory authorities including the FCA;
– Reviewing minutes of directors’ meetings in the year;
and
– Discussing amongst the engagement team the laws
and regulations listed above, and remaining alert to
any indications of non-compliance.
We also considered those laws and regulations that
have a direct effect on the preparation of the financial
statements, such as the Listing Rules, HMRC Investment
Trust rules, the UK Corporate Governance Code, the AIC
code of Corporate Governance, the Companies Act 2006
and UK tax legislation.
In addition, we evaluated the directors’ and
management’s incentives and opportunities for fraudulent
manipulation of the financial statements, including the
risk of management override of controls, and determined
that the principal risks related to posting manual
journal entries to manipulate financial performance,
management bias through judgements and assumptions
in significant accounting estimates, in particular in relation
to the investment portfolio, revenue recognition (which we
pinpointed to the accuracy, completeness and cut off, and
significant one-off or unusual transactions.
Our procedures in relation to fraud included but were not
limited to:
– Making enquiries of the directors and management on
whether they had knowledge of any actual, suspected
or alleged fraud;
– Gaining an understanding of the internal controls
established to mitigate risks related to fraud;
– Discussing amongst the engagement team the risks of
fraud;
– Addressing the risks of fraud through management
override of controls by performing journal entry testing;
The risks of material misstatement that had the greatest
effect on our audit are discussed in the “Key audit matters”
section of this report.
A further description of our responsibilities is available on
the Financial Reporting Council’s website at www.frc.org.
uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
Other matters which we are required to
address
Following the recommendation of the audit committee,
we were appointed by the Audit Committee on 13 July
2022 to audit the financial statements for the year ending
31 December 2022 and subsequent financial periods.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Company and we
remain independent of the Company in conducting our
audit.
Our audit opinion is consistent with our additional report
to the audit committee.
Use of the audit report
This report is made solely to the Company’s members
as a body in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members as a body for our audit
work, for this report, or for the opinions we have formed.
Nargis Shaheen Yunis (Senior Statutory Auditor) for and
on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London
EC4M 7AU
10 March 2023
55
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Income Statement
for the year ended 31 December 2022
Notes
2022
Revenue
£’000s
2022
Capital
£’000s
2022
Total Return
£’000s
2021
Revenue
£’000s
2021
Capital
£’000s
2021
Total Return
£’000s
(Losses) gains on investments held at fair value
through profit or loss
7 - (501,617) (501,617) - 244,546 244,546
Exchange gains (losses) on currency balances 227 9,307 9,534 (33) (457) (490)
Income 1 6,683 - 6,683 4,968 - 4,968
Investment management fee and performance fee 2 (6,795) - (6,795) (8,298) - (8,298)
Administration expenses 3 (1,098) - (1,098) (1,162) - (1,162)
(Loss) profit before finance costs and taxation (983) (492,310) (493,293) (4,525) 244,089 239,564
Finance costs: interest payable and similar expenses - - - - - -
(Loss) profit on ordinary activities before taxation (983) (492,310) (493,293) (4,525) 244,089 239,564
Taxation 4 (868) - (868) (608) - (608)
(Loss) profit on ordinary activities attributable to
ordinary shareholders
(1,851) (492,310) (494,161) (5,133) 244,089 238,956
(Loss) earnings per ordinary share (basic and
diluted)
6 (0.45p) (118.62p) (119.07p) (1.20p) 57.26p 56.06p
The total return column of this statement is the income statement of the Company.
The supplementary revenue and capital columns are both prepared under the guidance published by the Association of
Investment Companies.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or
discontinued in the year.
The profit attributable to ordinary shareholders for the year disclosed above represents the Company’s total
comprehensive income. The Company does not have any other Comprehensive Income.
The notes on pages 59 to 71 form an integral part of these Financial Statements.
56
Financial
Statements
Notes
2022
£’000s
2021
£’000s
Non Current Assets
Investments held at fair value through profit or loss 7 898,937 1,428,136
Current Assets
Other receivables 9 838 1,091
Cash and cash equivalents 9 41,695 45,968
42,533 47,059
Current Liabilities
Other payables 9 (2,522) (2,823)
Net current assets 40,011 44,236
Total net assets 938,948 1,472,372
Capital and Reserves
Called up share capital 10 10,719 10,719
Share premium account 11 334,191 334,191
Capital redemption reserve 11 1,021 1,021
Capital reserve 11 626,971 1,158,544
Revenue reserve 11 (33,954) (32,103)
Shareholders' funds - equity 12 938,948 1,472,372
Net asset value per ordinary share 12 231.0p 347.9p
The financial statements of Allianz Technology Trust PLC, company number 3117355, were approved and authorised for
issue by the Board of Directors on 10 March 2023 and signed on its behalf by:
Robert Jeens
Chairman
10 March 2023
Balance Sheet
at 31 December 2022
The notes on pages 59 to 71 form an integral part of these Financial Statements.
57
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Statement of Changes in Equity
for the year ended 31 December 2022
Called up
Share
Capital
£’000s
Share
Premium
Account
£’000s
Capital
Redemption
Reserve
£’000s
Capital
Reserve
£’000s
Revenue
Reserve
£’000s
Total
£’000s
Net assets at 1 January 2021 10,549 313,360 1,021 931,227 (26,970) 1,229,187
Revenue loss - - - - (5,133) (5,133)
Shares issued from block listing facility during the
year
170 20,831 - - - 21,001
Shares repurchased into treasury during the year - - - (16,772) - (16,772)
Capital profit - - - 244,089 - 244,089
Net assets at 31 December 2021 10,719 334,191 1,021 1,158,544 (32,103) 1,472,372
Net assets at 1 January 2022 10,719 334,191 1,021 1,158,544 (32,103) 1,472,372
Revenue loss - - - - (1,851) (1,851)
Shares repurchased into treasury during the year - - - (39,263) - (39,263)
Capital loss - - - (492,310) - (492,310)
Net assets at 31 December 2022 10,719 334,191 1,021 626,971 (33,954) 938,948
The notes on pages 59 to 71 form an integral part of these Financial Statements.
58
Financial
Statements
Notes to the Financial Statements
for the year ended 31 December 2022
1 The financial statements – have been prepared on the
basis of the accounting policies set out below.
The financial statements have been prepared in
accordance with The Companies Act 2006, FRS 102
and with the Statement of Recommended Practice
‘Financial Statements of Investment Trust Companies
and Venture Capital Trusts’ (SORP) issued by the
Association of Investment Companies (AIC) in July
2022.
In order to better reflect the activities of an investment
trust company and in accordance with guidance issued
by the AIC, supplementary information which analyses
the Income Statement between items of a revenue
and capital nature has been presented alongside the
Income Statement. In accordance with the Company’s
status as a UK investment company under section
833 and 834 of the Companies Act 2006, net capital
returns may be distributed by way of dividend.
The requirements have been met to qualify for
the exemption to prepare a Cash Flow Statement.
Therefore the Cash Flow Statement has not been
included in the financial statements.
The accounting policies adopted in preparing the
current year’s financial statements are consistent with
those of previous years.
The Directors believe that it is appropriate to continue
to adopt the going concern basis in preparing the
financial statements as the assets of the Company
consist mainly of securities which are readily realisable
and significantly exceed liabilities. The Directors have
considered the Company’s investment objective and
capital structure. The directors have also considered
the risks and consequences of the geo political and
macro-economic events on the operational aspects
of the company and the Company has adequate
financial resources to continue in operational existence
for the foreseeable future.
2 Revenue – Dividends received on equity shares are
accounted for on an ex-dividend basis. UK dividends
are shown net of tax credits and foreign dividends are
grossed up at the appropriate rate of withholding tax.
Special dividends are recognised on an ex-dividend
basis and treated as a capital or revenue item
depending on the facts and circumstances of each
dividend.
Where the Company has elected to receive its
dividends in the form of additional shares rather
than in cash, the equivalent of the cash dividend is
recognised as revenue. Any excess in the value of the
shares received over the amount of the cash dividend
is recognised in capital.
Deposit interest receivable is accounted for on an
accruals basis.
3 Investment management fees and administrative
expenses – The investment management fee is
calculated on the basis set out in Note 2 to the
financial statements and is charged in full to
revenue as permitted by the SORP. Performance
fees are charged in full to capital, as they are
directly attributable to the capital performance of
the investments. Other administrative expenses are
charged in full to revenue. All expenses are recognised
on an accrual basis.
4 Valuation – The Company’s business is investing in
financial assets with a view to profiting from their
total return in the form of increases in fair value. The
financial assets are publicly traded equity investments
which are held at fair value through profit or loss in
accordance with FRS 102 Section 11: ‘Basic Financial
Instruments’ and Section 12: ‘Other Financial
Instruments’.
Investments held at fair value through profit or loss
are initially recognised at fair value. After initial
recognition, these continue to be measured at fair
value, which for quoted investments is either the
bid price or the last traded price depending on the
convention of the exchange on which the investment
is listed. Gains or losses on investments are recognised
in the capital column of the Income Statement.
Purchases and sales of financial assets are recognised
on the trade date, being the date which the Company
commits to purchase or sell the assets.
5 Finance costs – In accordance with the FRS 102
Section 11: ‘Basic Financial Instruments’ and Section
12: ‘Other Financial Instruments’, finance costs of
borrowing are calculated using the effective interest
rate method and charged to revenue.
6 Taxation – Where expenses are allocated between
capital and revenue, any tax relief obtained in respect
of those expenses is allocated between capital and
revenue on the marginal basis. Ordinary dividends are
recognised in revenue.
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at
Summary of Accounting Policies
for the year ended 31 December 2022
59
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
the balance sheet date, where transactions or events
that result in an obligation to pay more tax or a right
to pay less tax in the future have occurred. Timing
differences are differences between the Company’s
taxable profits and its return as stated in the financial
statement.
A deferred tax asset is recognised when it is more likely
than not that the asset will be recoverable. Deferred
tax is measured on a non-discounted basis at the rate
of Corporation tax that is expected to apply when the
timing differences are expected to reverse.
7 Foreign currency – In accordance with FRS 102 Section
30: ‘Foreign Currency Translation’, the company is
required to nominate a functional currency, being
the currency in which the company predominately
operates. The functional and reporting currency is
sterling, reflecting the primary economic environment
in which the company operates, the predominant
currency in which its shareholders operate and the
currency in which its expenses are generally paid.
Transactions in foreign currencies are translated into
sterling at the rates of exchange ruling on the date of
the transaction. Assets and liabilities are translated
into sterling at the rates of exchange ruling at the
balance sheet date. Gains and losses thereon are
recognised in the revenue or capital column of the
income statement, dependant on the nature of the
gain or loss. Gains and losses on investments arising
from a change in exchange rate are taken to the
capital reserves.
8 Shares repurchased for cancellation and holding in
treasury – For shares repurchased for cancellation,
Share Capital is reduced by the nominal value of the
shares repurchased, and the Capital Redemption
Reserve is correspondingly increased in accordance
with Section 733 of the Companies Act 2006. The
full cost of the repurchase is charged to the Capital
Reserve.
For shares repurchased for holding in treasury, the full
cost is charged to the Capital Reserve.
9 Shares sold (re-issued) from treasury – Proceeds
received from the sale of shares held in treasury are
treated as realised profits in accordance with Section
731 of the Companies Act 2006. Proceeds equivalent
to the original cost, calculated by applying a weighted
average price, are credited to the Capital Reserve
to replenish the profits available for distribution;
proceeds in excess of the original cost are credited to
the Share Premium account.
10 Shares issued – Share capital is increased by the
nominal value of shares issued. The proceeds in excess
of the nominal value of shares net of expenses are
allocated to the share premium account.
11 Significant judgements, estimates and assumptions –
In the application of the Company’s accounting
policies, which are described above, the Directors
are required to make judgement, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. These estimates and associated assumptions
are based on historical experience and other factors
that are considered to be relevant. Actual results may
differ from the estimates.
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 periods if the revision
affects both current and future periods.
There have been no such significant judgements,
estimates or assumptions made during the year.
The investment portfolio currently consists of listed
investments and therefore no significant estimates
have been made in valuing those securities.
12 Operating segments – The Company has one
operating segment, being that of an investment trust
investing principally in equity securities on a worldwide
basis, with the aim of achieving long term capital
growth.
60
Financial
Statements
1. Income
2022
£’000s
2021
£’000s
Income from Investments*
Equity income from UK investments 293 340
Equity income from overseas investments 5,886 4,628
6,179 4,968
Other Income
Deposit interest 504 -
504 -
Total income 6,683 4,968
* All equity income is derived from listed investments.
2. Investment Management Fee
2022
Revenue
£’000s
2022
Capital
£’000s
2022
Total
£’000s
2021
Revenue
£’000s
2021
Capital
£’000s
2021
Total
£’000s
Investment management fee 6,795 - 6,795 8,298 - 8,298
Total 6,795 - 6,795 8,298 - 8,298
Allianz Global Investors GmbH, UK Branch was the appointed Investment Manager up to 25 July 2022. Effective from
25 July 2022, AllianzGI entered into a strategic partnership with Voya Investment Management Co LLC (Voya). The
Company has a tripartite Delegation Agreement with AllianzGI and Voya for portfolio management services. AllianzGI
will continue its role as Alternative Investment Fund Manager, providing company secretarial, administrative and sales
and marketing services and Portfolio Management services will be provided by Voya. The aggregate fees paid by the
Company to AllianzGI and Voya do not change. The management agreement provides for a base fee of 0.8% per annum
payable quarterly in arrears and calculated on the average value of the market capitalisation of the Company at the
last business day of each month in the relevant quarter. The base fee reduces to 0.6% for any market capitalisation
between £400m and £1 billion, and 0.5% for any market capitalisation over £1 billion. Additionally there is a fixed fee of
£55,000 per annum to cover AllianzGI’s administration costs.
In each year, in accordance with the management contract, the Investment Manager is entitled to a performance
fee subject to various performance conditions. For years beginning on or after 1 January 2022, the performance fee
entitlement is equal to 10.0% (1 December 2013 to 31 December 2021: 12.5%) of the outperformance of the adjusted
NAV per share total return as compared to the benchmark index, the Dow Jones World Technology Index (sterling
adjusted, total return). Any underperformance brought forward from previous years is taken into account in the
calculation of the performance fee.
A performance fee is only payable where the NAV per share at the end of the relevant Performance Period is greater
than the NAV per share at the end of the financial year in which a performance fee was last paid. At 31 December
2021 this ‘high water mark’ (HWM) was 297.2p per share. In the event the HWM is not reached in any year, any
outperformance shall instead be carried forward to future periods to be applied as detailed below. Any performance fee
payable is capped at 1.75% of the average daily NAV of the Company over the period (2021: 2.25% of year-end NAV).
For this purpose, the NAV is calculated after deduction of the associated performance fee payable.
Any outperformance in excess of the cap (or where the HWM has not been met) shall be carried forward to future years
to be available for offset against future underperformance but not to generate a performance fee. To the extent the
Company has underperformed the benchmark, such underperformance is carried forward and must be offset by future
outperformance before a performance fee can be paid. Underperformance/outperformance amounts carried forward
do so indefinitely until offset.
The performance fee accrued for as at 31 December 2022 was £nil (31 December 2021: £nil).
The Investment Manager’s fee is charged 100% to Revenue and the performance fee is charged 100% to Capital.
61
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
3. Administration Expenses
2022
£’000s
2021
£’000s
Auditors’ Remuneration
Fee payable to the Company's auditor for the audit of the Company's annual accounts 47 45
VAT on auditor's remuneration 10 9
57 54
Directors' fees
1
203 150
Employer national insurance contributions 16 20
Marketing costs
2
295 277
Depositary fees 59 68
Custodian fees 65 74
Registrars' fees 130 163
Professional & advisory fees 98 101
Stock exchange fees 59 99
Legal fees 25 100
Printing and postage 49 57
FCA fees 36 30
AIC fees 21 21
Other administrative expenses 106 45
VAT recovered (121) (97)
1,098 1,162
The above expenses include value added tax where applicable.
1
Directors’ fees are set out in the Directors’ Remuneration Implementation Report starting on page 43.
2
The marketing budget takes into account both the marketing by the AIFM and also third party service providers.
62
Financial
Statements
4. Taxation
2022
Revenue
£’000s
2022
Capital
£’000s
2022
Total
£’000s
2021
Revenue
£’000s
2021
Capital
£’000s
2021
Total
£’000s
Overseas taxation 868 - 868 608 - 608
Total tax 868 - 868 608 - 608
Reconciliation of tax charge
(Loss) profit on ordinary activities before taxation (983) (492,310) (493,293) (4,525) 244,089 239,564
Tax on (loss) profit at 19.00% (2021: 19.00%) (187) (93,539) (93,726) (860) 46,377 45,517
Reconciling factors
Non taxable income (1,186) - (1,186) (937) - (937)
Non taxable capital losses (gains) - 95,307 95,307 - (46,464) (46,464)
(Gains) losses on foreign currencies - (1,768) (1,768) - 87 87
Excess of allowable expenses over taxable income 1,373 - 1,373 1,797 - 1,797
Overseas tax suffered
868 - 868 608 - 608
Total tax 868 - 868 608 - 608
The Company’s taxable income is exceeded by its tax allowable expenses. As at 31 December 2022, the Company had
accumulated surplus expenses of £89.4m (2021: £77.6m).
At 31 December 2022 the Company has not recognised a deferred tax asset of £22.4m (2021: £19.4m) in respect of
accumulated expenses based on a prospective corporation tax rate of 25% (2021: 25%). The increase in the standard
rate of corporation tax was substantively enacted on 24 May 2021 and will be effective on 1 April 2023. Provided the
Company continues to maintain its current investment profile, it is unlikely that the expenses will be utilised and that the
Company will obtain any benefit from this asset.
In May 2013 the company received confirmation from HM Revenue & Customs of its status as an approved investment
trust for accounting periods commencing on or after 1 December 2012, subject to the Company continuing to meet the
eligibility conditions at Section 1158 Corporation Tax Act 2010 and the ongoing requirements for approved companies in
Chapter 3 of Part 2 Investment Trust (Approved Company) Tax Regulations 2011 (Statutory Instrument 2011/2999).
In the opinion of the Directors, the Company has conducted its affairs in such a manner that it continues to meet the
eligibility conditions.
The Company has not therefore provided tax on any capital gains and losses arising on the disposal of investments.
5. Dividends on Ordinary Shares
There were no dividends paid or declared during the financial year ended 31 December 2022 (2021: nil).
63
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
6. (Loss) Earnings per Ordinary Share
2022
Revenue
£’000s
2022
Capital
£’000s
2022
Total Return
£’000s
2021
Revenue
£’000s
2021
Capital
£’000s
2021
Total Return
£’000s
(Loss) earnings after taxation attributable to
ordinary shareholders
(1,851) (492,310) (494,161) (5,133) 244,089 238,956
(Loss) earnings per ordinary share (0.45p) (118.62p) (119.07p) (1.20p) 57.26p 56.06p
2022
No. of Shares
2021
No. of Shares
Weighted average number of Ordinary Shares in issue for the earnings per Ordinary Share calculations above 415,019,252 426,291,035
Basic and diluted earnings per share are the same as the Company has no dilutive instruments.
7. Investments Held at Fair Value through Profit or Loss
Listed assets
2022
£’000s
2021
£’000s
Opening book cost 1,020,260 816,046
Opening investments holding gains 407,876 399,495
Opening market value 1,428,136 1,215,541
Additions at cost 944,166 1,125,387
Disposals proceeds received (971,748) (1,157,338)
(Loss) gains on Investments (501,617) 244,546
Market value of investments held at 31 December 898,937 1,428,136
Closing book cost 920,805 1,020,260
Closing investment holding (losses) gains (21,868) 407,876
Closing market value 898,937 1,428,136
(Losses) gains on investments (501,617) 244,546
The company received £971.7m (2021: £1,157.3m) from investments sold in the year. The book cost of these investments
when they were purchased was £1,043.6m (2021: 921.1m). These investments have been revalued over time and until
they were sold any unrealised gains/losses were included in the fair value of the investments.
Transaction costs and stamp duty on purchases amounted to £207,000 (2021: £152,000) and transaction costs on sales
amounted to £419,000 (2021: £242,000).
8. Investments in Subsidiaries or Other Companies
As at 31 December 2022 the Company held no investments in subsidiaries, nor did it hold more than 10% of the share
capital of any other company or have any holdings in an investee undertaking which comprises 3% or more of any class
of capital.
64
Financial
Statements
9. Other Receivables, Cash and Cash Equivalents, and Other Payables
2022
£’000s
2021
£’000s
Other receivables
Accrued income 787 1,010
Other receivables 51 81
838 1,091
Cash and cash equivalents
Cash at bank 41,695 45,968
Other payables
Other payables 2,522 2,823
2,522 2,823
The carrying amount of other receivables, cash and cash equivalents and other payables, each approximate their fair value.
10. Called Up Share Capital
2022
£’000s
2021
£’000s
Allotted and Fully Paid
428,756,680 Ordinary Shares of 2.5p (2021: 428,756,680)* 10,719 10,719
* Inclusive of 22,268,962 (2021: 5,565,090) Ordinary shares held in treasury for reissuance into the market or cancellation at a future date.
Shares held in treasury are non-voting and not eligible for receipt of dividend.
During the year no Ordinary Shares (2021: 6,800,000) were issued from the block listing facility and 16,703,872 Ordinary
shares repurchased to be held in treasury (2021: 5,565,090). During the year no Ordinary Shares were reissued from
treasury (2021: nil). Proceeds from share issuances were £nil (2021: £21.0m) net of issuance costs of £nil (2021: £42,000).
Since the year end a further 5,745,495 shares have been bought back up to and including 10 March 2023.
The Company’s Ordinary issued share capital carry one vote each. The holders of Ordinary shares have the right to
participate in dividends and other distributions according to their respective rights and interest in the profits of the
Company and a return on a winding up of the Company.
2022
Number
2022
£’000s
2021
Number
2021
£’000s
Allotted 2.5p ordinary shares
Brought forward 423,191,590 10,580 421,956,680 10,549
Shares repurchased to treasury (16,703,872) (418) (5,565,090) (139)
Shares issued from block listing facility - - 6,800,000 170
Carried forward 406,487,718 10,162 423,191,590 10,580
2022
Number
2021
Number
Treasury shares:
Brought forward 5,565,090 -
Shares repurchased to treasury 16,703,872 5,565,090
Carried forward 22,268,962 5,565,090
Total ordinary shares in issue and in treasury at the end of the year 428,756,680 428,756,680
65
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
11. Reserves
Capital Reserve
Share
Premium
Account
£’000s
Capital
Redemption
Reserve
£’000s
Gains on
Sales of
Investments
£’000s
Investment
Holding
Gains (Losses)
£’000s
Revenue
Reserve
£’000s
Balance at 30 December 2021 334,191 1,021 749,491 409,053 (32,103)
Losses on sales of fixed asset investments - - (507,734) - -
Foreign currency gains - - 9,307 - -
Net movement in fixed asset investment holding gains - - - 6,117 -
Transfer on disposal of investments - - 435,861 (435,861) -
Shares repurchased to Treasury during the year - - (39,263) - -
Retained loss for the year - - - - (1,851)
Balance at 31 December 2022 334,191 1,021 647,662 (20,691) (33,954)
The Institute of Chartered Accountants in England and Wales in its technical guidance TECH 02/17BL states that
investment holding gains arising out of a change in fair value of assets may be recognised as gains on sales of
investments provided they can be readily converted into cash.
Securities listed on a stock exchange are generally regarded as being readily convertible into cash and hence investment
holding gains in respect of such securities may be regarded as realised under Company Law.
The Share Premium Account arose on the issue of ordinary shares. The difference between the par value of shares and
the total amount received is allocated here. It is not distributable by way of a dividend and cannot be used to repurchase
shares.
The Capital Redemption Reserve represents the nominal value of shares repurchased and cancelled. It is not
distributable by way of a dividend and cannot be used to repurchase shares.
The Capital Reserve reflects realised and unrealised gains and losses on investments and other income and costs
recognised in the Capital column of the Income Statement. It can be used for share repurchases for holding in treasury. It
is also distributable by way of a dividend.
The Revenue Reserve reflects revenue gains or losses.
66
Financial
Statements
12. Net Asset Value (‘NAV’) per Share
The Net Asset Value per share (which equates to the net asset value attributable to each Ordinary Share in issue at the
year end calculated in accordance with the Articles of Association) was as follows:
NAV Per Share Attributable
2022 2021
Ordinary Shares of 2.5p 231.0p 347.9p
NAV Attributable
2022
£’000s
2021
£’000s
Ordinary Shares of 2.5p 938,948 1,472,372
The Net Asset Value per share is based on 406,487,718 Ordinary Shares in issue at the year end (2021: 423,191,590
Ordinary Shares).
13. Financial Risk Management Policies and Procedures
The Company invests in equities and other investments in accordance with its investment policy as stated on the inside
front cover. In pursuing its investment objective, the Company is exposed to certain inherent risks that could result in a
reduction either in the Company’s net return or in its net assets.
The main risks arising from the Company’s financial instruments are: market risk (comprising market price risk, foreign
currency risk and interest rate risk), liquidity risk and credit risk. The Directors determine the objectives and agree policies
for managing each of these risks, as set out below. The Investment Manager, in close co-operation with the Directors,
implements the Company’s risk management policies. These policies have remained substantially unchanged during the
current and preceding year.
(a) Market Risk
The Investment Manager assesses the exposure to market risk when making each investment decision, and monitors the
risk on the investment portfolio on an ongoing basis. Market risk comprises market price risk, foreign currency risk and
interest rate risk.
(i) Market Price Risk
Market price risk arises mainly from the uncertainty about future prices of financial instruments held. It represents the
potential loss the Company might suffer through holding market positions in the face of price movements. An analysis of
the Company’s portfolio starts on page 14.
Market Price Risk Sensitivity
The value of the Company’s listed equities, which were exposed to market price risk as at 31 December 2022 and 31
December 2021 was as follows:
2022
£’000s
2021
£’000s
Listed equity investments held at fair value through profit or loss 898,937 1,428,136
The following illustrates the sensitivity of the net return and the net assets to an increase or decrease of 20% (2021: 20%)
in the fair values of the Company’s listed investments. This level of change is considered to be reasonably possible based
on observation of market conditions in the year. The sensitivity analysis is based on the impact of a change to the value
of the Company’s listed equity investments at each balance sheet date and the consequent impact on the investment
management fees for the period, with all other variables held constant.
67
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
2022
20% Increase
in fair value
£’000s
2022
20% Decrease
in fair value
£’000s
2021
20% Increase
in fair value
£’000s
2021
20% Decrease
in fair value
£’000s
Revenue earnings
Investment management fees (899) 1,079 (1,428) 1,428
Capital earnings
Gains (losses) on investments at fair value 179,787 (179,787) 285,627 (285,627)
Change in net return 178,888 (178,708) 284,199 (284,199)
Management of market price risk
The Directors meet regularly to evaluate the risks associated with the investment portfolio. Dedicated fund managers
have the responsibility for monitoring the existing portfolio selection in accordance with the Company’s investment
objective and seek to ensure that individual stocks meet an acceptable risk reward profile.
The Board can authorise the Investment Manager to use options in order to protect the portfolio against high market
volatility. Where options are employed, the market value of such options can be volatile but the maximum realised loss
on any contract is limited to the original investment cost. No options were taken out in the current year (2021: £ nil).
(ii) Foreign Currency Risk
Foreign currency risk is the risk of the movement in the values of overseas financial instruments as a result of fluctuations
in exchange rates.
Management of foreign currency risk
Transactions in foreign currencies are translated into sterling at the rates of exchange ruling on the date of the
transaction. Foreign currency assets and liabilities are translated into sterling at the rates of exchange ruling at the
balance sheet date. It is the Company’s policy not to hedge foreign currency exposure.
Any income denominated in foreign currency is converted into sterling on receipt. The Company does not use financial
instruments to mitigate the currency exposure in the period between the time that income is included in the financial
statements and its receipt.
The table below summarises in sterling terms the foreign currency risk exposure:
2022
Investments
£’000s
2022
Other
Assets and
Liabilities
£’000s
2022
Total
Currency
Exposure
£’000s
2021
Investments
£’000s
2021
Other
Assets and
Liabilities
£’000s
2021
Total
Currency
Exposure
£’000s
Sterling 7,838 (1,766) 6,072 11,935 (1,878) 10,057
US Dollar 871,080 41,281 912,361 1,290,369 45,654 1,336,023
Other currency exposure 20,019 496 20,515 125,832 460 126,292
898,937 40,011 938,948 1,428,136 44,236 1,472,372
Foreign Currency Risk Sensitivity
The following table details the company’s sensitivity to a 20% increase and decrease in sterling against the relevant
foreign currencies and the resultant impact that any such increase or decrease would have on the net return and net
assets. The sensitivity analysis includes all foreign currency denominated items and adjusts their translation at the period
end for a 20% change in foreign currency rates.
68
Financial
Statements
2022
20% Decrease
in sterling
against
foreign
currencies
£’000s
2022
20% Increase
in sterling
against
foreign
currencies
£’000s
2021
20% Decrease
in sterling
against
foreign
currencies
£’000s
2021
20% Increase
in sterling
against
foreign
currencies
£’000s
US Dollar 228,090 (152,060) 334,006 (222,671)
Other currency exposure 5,129 (3,419) 31,573 (21,049)
Change in net return and net assets 233,219 (155,479) 365,579 (243,720)
(iii) Interest Rate Risk
Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates.
Interest Rate Exposure
The table below summarises in sterling terms the financial assets and financial liabilities whose values are directly
affected by changes in interest rates.
2022
Fixed
rate
interest
£’000s
2022
Floating
rate
interest
£’000s
2022
Nil
interest
£’000s
2022
Total
£’000s
2021
Fixed
rate
interest
£’000s
2021
Floating
rate
interest
£’000s
2021
Nil
interest
£’000s
2021
Total
£’000s
Financial assets - 41,695 898,937 940,632 - 45,968 1,428,136 1,474,104
Financial liabilities - - - - - - - -
Net financial assets - 41,695 898,937 940,632 - 45,968 1,428,136 1,474,104
Net short-term payables (1,684) (1,732)
Net assets per balance sheet 938,948 1,472,372
As at 31 December 2022, the interest rates received on cash balances or paid on bank overdrafts, was 1.9% and 4.5% per
annum respectively (2021: 0.0% and 1.25% per annum).
Management of interest rate risk
The Company invests predominantly in equities, the values of which are not directly affected by changes in prevailing
market interest rates. The Company’s policy is to remain substantially fully invested. It does not normally expect to hold
significant cash balances for other than brief periods of time and therefore there is minimal exposure to interest rate risk.
(b) Liquidity risk
Liquidity risk relates to the capacity to meet liabilities as they fall due and is dependent on the liquidity of the underlying
assets.
Maturity of financial liabilities
The table below presents the future cash flows payable by the Company in respect of its financial liabilities.
69
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
2022
Three
months
or less
£’000s
Between
three months
and one year
£’000s
Between
one and
five years
£’000s
More than
five years
£’000s
Total
£’000s
Other payables - within one year
Other payables 2,522 - - - 2,522
2,522 - - - 2,522
2021
Three
months
or less
£’000s
Between
three months
and one year
£’000s
Between
one and
five years
£’000s
More than
five years
£’000s
Total
£’000s
Other payables - within one year
Other payables 2,823 - - - 2,823
2,823 - - - 2,823
Management of liquidity risk
Liquidity risk is not considered to be significant as the Company’s assets mainly comprise realisable securities, which can
be sold to meet funding requirements. Short term flexibility can be achieved through the use of overdraft facilities, where
necessary. As at the 31 December 2022, the Company had no committed borrowing facility (2021: £nil).
(c) Credit risk
Credit risk is the risk of default by a counterparty in discharging its obligations under transactions that could result in the
Company suffering a loss.
Management of credit risk
Outstanding settlements are subject to credit risk. Credit risk is mitigated by the Company through its decision to
transact with counterparties of high credit quality. The Company only buys and sells investments through brokers which
are considered to be approved counterparties, thus minimising the risk of default during settlement. Normally trades
are settled by payment of cash against delivery. The credit ratings of brokers are reviewed quarterly by the Investment
Manager.
The Company is also exposed to credit risk through the use of banks for its cash position. Bankruptcy or insolvency of
banks may cause the Company’s rights with respect to cash held by banks to be delayed or limited. The Company’s cash
balances are held with HSBC, rated Aa3 by Moody’s rating agency. The Directors believe the counterparties the Company
has chosen to transact with are of high credit quality, therefore the Company has minimal exposure to credit risk.
The table below summarises the credit risk exposure of the Company as at 31 December:
2022
£’000s
2021
£’000s
Other receivables:
Accrued income 787 1,010
Other receivables 51 81
Cash and cash equivalents 41,695 45,968
42,533 47,059
Fair values of financial assets and financial liabilities
Investments and derivative financial instruments are held at fair value through profit or loss in accordance with FRS 102
sections 11 and 12.
FRS102 sets out three fair value hierarchy levels for disclosure that reflect the significance of the inputs used in making
the measurements.
70
Financial
Statements
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the
fair value measurement of the relevant assets as follows:
Level 1 - The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the
measurement date.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data)
for the asset or liability, either directly or indirectly.
Level 3 - Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
As at 31 December 2022, the financial assets at fair value through profit and loss are categorised as follows:
2022
£’000s
2021
£’000s
Level 1 898,937 1,428,136
Level 2 - -
Level 3 - -
898,937 1,428,136
14. Capital Management Policies and Procedures
The Company’s objective is to provide long-term capital growth through investing principally in the equity securities of
quoted technology companies on a worldwide basis.
The Company’s capital at 31 December 2022 was as per the equity shareholders’ funds in the Balance Sheet on page
57.
The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company’s
capital on an ongoing basis, including the level of gearing, taking into account the Investment Manager’s view on the
market and the future prospects of the Company’s performance. Capital management also involves reviewing the
difference between the net asset value per share and the share price (i.e. the level of share price discount or premium) to
assess whether to repurchase shares for cancellation or holding in treasury or to issue shares.
The Company’s objective, policies and processes for managing capital are unchanged from the preceding accounting
period and the Company has complied with them.
The Company will not invest in more than 20% of the net assets using ‘gearing’. The Company’s Articles of Association
limit borrowing to one quarter of its called up share capital and reserves.
15. Transactions with the Investment Manager and Related Parties
The amounts paid to the Investment Manager and the AIFM together with details of the management contract are
disclosed in Note 2 on page 61. The existence of an independent board of directors demonstrates that the Company
is free to pursue its own financial and operating policies and therefore, under FRS102 Section 33: ‘Related Party
Disclosures’, the Investment Manager and the AIFM are not considered to be related parties.
The Company’s related parties are its directors. Fees paid to the Company’s board, including employer national
insurance contributions, are disclosed in Note 3 on page 62. There are no other identifiable related parties at 31
December 2022, and as of 10 March 2023.
16. Post Balance Sheet Events
Since the year end a further 5,745,495 shares have been bought back for a total cash consideration of £12.8m. As at 10
March there were 428,756,680 shares in issue (including 28,014,457 shares in treasury).
71
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
UK GAAP performance measures
Net Asset Value is the value of total assets less all liabilities. The Net Asset Value, or NAV, per ordinary share is calculated
by dividing this amount by the total number of ordinary shares in issue. As at 31 December 2022, the NAV was 938.9m
(2021: £1,472.4m) and the NAV per share was 231.0p (2021: 347.9p).
Earnings per ordinary share is the profit after taxation, divided by the weighted average number of shares in issue
for the period. For the year ended 31 December 2022 earnings per ordinary share was (0.45p) (2021: (1.20p)),
calculated by taking the loss after tax of £1.9m (2021: loss of £5.1m), divided by the weighted average shares in issue of
415,019,252 (2021: 426,291,035).
Alternative Performance Measures (APMs)
Discount or Premium is the amount by which the stock market price per ordinary share is lower (discount) or higher
(premium) than the Net Asset Value, or NAV, per ordinary share. The discount/premium is normally expressed as a
percentage of the NAV per ordinary share (see pages 3 and 4).
Ongoing charges are operating expenses, excluding one off costs, incurred in the running of the company, whether
charged to revenue or capital, but excluding financing costs and performance fees. These are expressed as a percentage
of the average net asset value during the year and this is calculated in accordance with guidance issued by the
Association of Investment Companies (see page 4).
2022
£’000s
2021
£’000s
Management fee 6,795 8,298
Administration expenses 1,098 1,162
Less: non-recurring expenses* - (116)
Total expenses (A) 7,893 9,344
Average net asset value with debt at market value (B) 1,127,222 1,345,880
Ongoing charge (A/B) 0.70% 0.69%
* Non-recurring fees are broker and legal fees in relation to a placing programme (2021: Stock exchange block listing fees)
The ongoing charge differs from the ongoing charge in the Company’s KID, which is calculated in accordance with the
PRIIPs regulations and includes finance costs and performance fees.
The ongoing charge including the performance fee payable of £nil (2021: £nil) is 0.70% (2021: 0.69%).
Glossary of UK GAAP Performance Measures
and Alternative Performance Measures
72
Investor
Information
AIC Code of Corporate Governance AIC Code
Allianz Global Investors GmbH, UK Branch AllianzGI
Allianz Global Investors UK Limited AllianzGI UK
Allianz Technology Trust PLC The Company
Alternative Investment Fund Manager AIFM
Alternative Performance Measures APMs
Annual Financial Report AFR
Annual General Meeting AGM
Association of Investment Companies AIC
Corporate Social Responsibility CSR
Disclosure and Transparency Rules DTR
Dow Jones World Technology Index (sterling adjusted, total return) The Benchmark
Emissions, Environmental and Ethical EEE
Environmental, Social, Governance ESG
Federal Reserve Fed
Financial Conduct Authority FCA
HSBC Bank The Custodian
HSBC Security Services The Depositary
Key Performance Indicators KPIs
Link Group as Registrars Link
Net Asset Value NAV
Ongoing Charges Figure OCF
Senior Independent Director SID
State Street as provider of middle office and fund accounting services State Street
Task Force on Climate-related Financial Disclosures TCFD
UK Code of Corporate Governance The UK Code
Voya Investment Management Co LLC Voya
Glossary of Terms
73
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Alternative Investment Fund Manager (AIFM)
Allianz Global Investors GmbH, UK Branch,
199 Bishopsgate, London, EC2M 3TY
Telephone: +44 (0)20 3246 7000
Head of Investment Trusts - AllianzGI
Stephanie Carbonneil
Email: stephanie.carbonneil@allianzgi.com
Company Secretary and Registered Office
Kelly Nice
Email: kelly.nice@allianzgi.com
199 Bishopsgate, London, EC2M 3TY
Telephone: 020 3246 7405
Investment Manager
Voya Investment Management Co. LLC
555 Mission Street, Suite 1600
San Francisco, CA 94105
Telephone: +1 415 954 4500
Represented by Mike Seidenberg
Registered Number
3117355
Bankers and Custodian
HSBC Bank plc, 8 Canada Square, London, E14 5HQ
Depositary
HSBC Security Services, 8 Canada Square, London, E14
5HQ
Independent Auditors
Mazars LLP, 30 Old Bailey, London, EC4M 7AU
Registrars
Link Group, 10th Floor, Central Square, 29 Wellington
Street, Leeds, LS1 4DL. Telephone: 0371 664 0300. Lines
are open 9.00am to 5.30pm (London time) Monday to
Friday.
Email: shareholderenquiries@linkgroup.co.uk
Website: www.linkgroup.com
Stockbrokers
Winterflood Investment Trusts, The Atrium Building,
Cannon Bridge House, 25 Dowgate Hill, London,
EC4R 2GA
Identifiers
SEDOL: BNG2M15
ISIN: GB00BNG2M159
BLOOMBERG: ATT
EPIC: ATT
GIIN: YSYR74.99999.SL.826
LEI: 549300OMDPMJU23SSH75
Financial Calendar
Full year results announced and Annual Financial Report
posted to Shareholders in March.
Annual General Meeting held in April.
Half year results announced and Half-Yearly Financial
Report posted to Shareholders in August.
The year end is 31 December.
How to invest
Information is available from Allianz Global Investors
either via Investor Services on 0800 389 4696 or on the
Company’s website: www.allianztechnologytrust.com.
A list of providers can be found on the Company’s website
www.allianztechnologytrust.com/how-to-invest
Market and Portfolio Information
The Company’s Ordinary Shares are listed on the London
Stock Exchange under the code ATT. The market price
range, gross yield and net asset value (NAV) are shown daily
in the Financial Times and The Daily Telegraph under the
headings ‘Investment Trusts’ and ‘Investment Companies’,
respectively. The NAV of the Ordinary Shares is calculated
daily and published on the London Stock Exchange
Regulatory News Service. The geographical spread of
investments and ten largest holdings are published monthly
on the London Stock Exchange Regulatory News Service.
They are also available from the Manager’s Investor
Services Helpline on 0800 389 4696 or via the Company’s
website: www.allianztechnologytrust.com.
Share Price
The share price quoted in the London Stock Exchange
Daily Official List for 31 December 2022 was 210.0p per
Ordinary Share.
Website
Further information about Allianz Technology Trust
PLC, including monthly factsheets, daily share price and
performance, is available on the Company’s website:
www.allianztechnologytrust.com
Association of Investment Companies (AIC)
The Company is a member of the AIC, the trade body of
the investment trust industry, which provides a range of
literature including fact sheets and a monthly statistical
service. Copies of these publications can be obtained from
the AIC, 9th Floor, 24 Chiswell Street, London, EC1Y 4YY,
or at www.theaic.co.uk. AIC Category: Technology and
Technology Innovation.
Investor Information
74
Investor
Information
Shareholder Enquiries – Link Group
In the event of queries regarding their holdings of shares,
lost certificates, dividend payments, registered details, etc.,
shareholders should contact the registrars on 0371 664
0300. Lines are open 9.00am to 5.30pm (UK time) Monday
to Friday. Calls to this number are charged at local rates,
calls from outside the UK are charged at applicable
international rates. Different charges may apply to calls
made from mobile telephones and calls may be recorded
and monitored randomly for security and training
purposes.
Changes of name and address must be notified to the
Registrar in writing. Any general enquiries about the
Company should be directed to the Company Secretary,
Allianz Technology Trust PLC, 199 Bishopsgate, London,
EC2M 3TY. Telephone: 020 3246 7405.
Share Dealing Services
Link Group operate an online and telephone dealing
facility for UK resident shareholders with share certificates.
Stamp duty and commission may also be payable on
transactions.
For further information on these services please contact:
www.linksharedeal.com for online dealing or 0371 664
0445 for telephone dealing. Lines are open 8.00am
to 4.30pm Monday to Friday. Calls to this number are
charged at local rates, calls from outside the UK are
charged at applicable international rates. Different
charges may apply to calls made from mobile telephones
and calls may be recorded and monitored randomly for
security and training purposes.
Shareholder Proxy Voting
There are two new ways that shareholders can vote this
year. Shareholders may submit their proxy electronically
using the Share Portal service at www.signalshares.com.
Or via the registrars’ new LinkVote+ Shareholder App.
Further details on voting via the LinkVote+ App, online
through the registrars’ Share Portal, or by post using the
personalised proxy card provided, are contained within
the Notice of Meeting Notes on page 79.
CREST Proxy Voting
Shares held in uncertificated form (i.e., in CREST) may
be voted through the CREST Proxy Voting Service in
accordance with the procedures set out in the CREST
manual. Voting via the Proxymity platform is also
available to institutional shareholders. Further details are
contained within the Notice of Meeting Notes on page
80.
FATCA
The Company is registered with the Internal Revenue
Service (IRS) as a Foreign Financial Institution for the
purposes of the Foreign Tax Compliance Act (FATCA). The
Company’s Global Intermediary Identification Number
(GIIN) is YSYR74.99999.SL.826
Non Mainstream Pooled Investments
The Company is an investment trust and therefore its
shares are not subject to the Financial Conduct Authority’s
(FCA) rules relating to the restrictions on the retail
distribution of unregulated collective investment schemes
and close substitutes which came into effect on 1 January
2014. Accordingly, its shares can be recommended by IFAs
to retail investors in accordance with the FCA’s rules in
relation to nonmainstream investment products.
Nominee Code
In order to allow investors holding their shares
within a nominee company to receive shareholder
communications, the Company undertakes to provide
multiple copies of such documents to the registered
nominee company where prior notice has been given. The
Company encourages nominee companies to provide the
underlying investors with sufficient information to make
informed decisions regarding their investments, including
the opportunity to attend Company General Meetings.
Warning to Shareholders
We are aware that some shareholders may have received unsolicited telephone calls or correspondence concerning
investment matters. These are typically from overseas based organisations who target UK shareholders offering
to sell them, what often turn out to be, worthless or high risk shares in US or UK investments or encourage them to
dispose of UK shares. They can be extremely persistent and persuasive. Shareholders are therefore advised to be
very wary of any unsolicited advice or offers.
Please note that it is most unlikely that either the company or the company’s Registrar, Link Group, would make
unsolicited telephone calls to shareholders. Any such calls would only ever relate to official documentation already
circulated to shareholders and never in respect of investment ‘advice’.
If you are in any doubt about the veracity of an unsolicited telephone call, please call the Company Secretary on
+44 (0)800 389 4696 or the Registrar on +44 (0) 371 664 0300.
75
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Alternative Investment Fund Manager
Alternative Investment Fund Manager
Allianz Global Investors GmbH (AllianzGI) is an investment company with limited liability incorporated in Germany
and registered in the UK as a branch with establishment number BR009058 and with an establishment address of 199
Bishopsgate, London, EC2M 3TY. It is authorised by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and is
subject to limited regulation by the Financial Conduct Authority (FCA). Website: www.allianzgi.co.uk
Remuneration Disclosure of the AIFM
Employee remuneration of Allianz Global Investors GmbH for the financial year ending 31 December 2022 (all values in
Euro).
Number of employees: 1,710
All employees Risk Taker
Board
Member
Other
Risk Taker
Employees
with Control
Function
Employees with
Comparable
Compensation
Fixed remuneration 174,302,493 7,269,792 985,960 2,207,677 390,480 3,685,675
Variable remuneration 121,033,472 16,763,831 1,483,410 4,459,440 377,612 10,443,368
Total remuneration 295,335,965 24,033,623 2,469,370 6,667,117 768,092 14,129,043
Remuneration Policy of the AIFM
The compensation structure at AllianzGI Europe is set up to avoid any kind of excessive risk-taking. Variable
compensation awards are delivered via deferral programs to ensure they are linked to sustainable performance. In
addition any compensation decisions have to be reviewed and approved by our Functional, Regional and Global
Compensation Committees on both an aggregate and individual basis, to further ensure effective risk mitigation.
AIFM and Depositary
The Alternative Investment Fund Managers Directive (AIFMD) aims to create a comprehensive and effective regulatory
and supervisory framework for alternative investment fund managers within the EU. Allianz Global Investors GmbH, UK
Branch (AllianzGI) is the Company’s AIFM and HSBC Securities Services (HSBC) has been appointed as its Depositary in
accordance with AIFMD under a depositary agreement between the Company, and HSBC. Depositary fees are charged
in addition to custody fees and are calculated on the basis of net assets.
AIFM Leverage Disclosure
The Company may borrow cash and employ leverage which may include the use of derivatives in accordance with the
stated investment policy and the underlying investment guidelines set by the Board for the Investment Manager from
time to time. It is acknowledged that the use of leverage may expose the Company to greater risk as volatility levels, in
particular within derivative contracts, can be high. The use of leverage is therefore carefully considered prior to exposure.
The AIFMD requires each element of leverage and its exposure to be expressed as a ratio of the Company’s NAV. The
Company does not currently employ gearing and does not currently invest in derivatives.
AIFM Pre-Investment Disclosures
The AIFMD requires that potential investors are provided with sufficient pre-investment information in order to make an
informed decision. An ‘AIFMD: Information Document’ is available in the Literature Library on the Company’s website
at www.allianztechnologytrust.com which provides information on investment objective, strategy, policies and other
pertinent information which may have an impact on a potential investors decision. There have been no material changes
to the information disclosed within the ‘AIFMD: Information Document’ since publication.
76
Investor
Information
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION. If you are in any doubt as to
what action to take, you should consult your stockbroker,
bank manager, solicitor, accountant or other appropriate
independent professional advisor authorised under the
Financial Services and Markets Act 2000 immediately
if you are in the United Kingdom or, if not, another
appropriately authorised financial adviser. If you have
sold or otherwise transferred all your shares in Allianz
Technology Trust PLC, please forward this document
and the accompanying Form of Proxy to the purchaser
or transferee or to the person through whom the sale or
transfer was effected, for transmission to the purchaser or
transferee.
Notice is hereby given that the Annual General Meeting
(‘AGM’) of Allianz Technology Trust PLC (the ‘Company’) will
be held at Grocers’ Hall, Princes Street, London, EC2R 8AD
on Wednesday 26 April 2023 at 2.30pm for the following
purposes:
The AGM will be held in person and voting will be
conducted on a poll. However, shareholders will be
able to view and listen to a live webcast of the AGM and
submit questions to the meeting electronically. Those
attending virtually will not be able to vote for the purposes
of the business transacted at the AGM and are therefore
encouraged to vote ahead of the meeting. Instructions on
how to join the meeting virtually are contained on page
81.
AGM Voting
Shareholders are encouraged to vote by proxy. Detail of
how to vote, either electronically, by proxy form or through
CREST, can be found on pages 79 to 81.
The results of the AGM will be announced via the London
Stock Exchange and placed on the Company’s website as
soon as practicable after the conclusion of the AGM.
Ordinary Business
To consider and, if thought fit, to pass the following
resolutions as Ordinary Resolutions:
1. To receive and adopt the Company’s Annual Report
and Financial Statements for the financial year ended
31 December 2022, together with the Reports of the
Directors and the Independent Auditors’ report thereon.
2. To elect Katya Thomson as a Director of the Company.
3. To re-elect Humphrey van der Klugt as a Director of the
Company.
4. To re-elect Elisabeth Scott as a Director of the Company.
5. To re-elect Neeta Patel as a Director of the Company.
6. To re-elect Tim Scholefield as a Director of the Company
7. To re-appoint Mazars LLP as Independent Auditor of the
Company to hold office until the conclusion of the next
Annual General Meeting of the Company at which the
Financial Statements are laid before the Company.
8. To authorise the Directors to determine the
remuneration of the Independent Auditor of the
Company.
9. To receive and approve the Director’s Remuneration
Implementation Report for the financial year ended 31
December 2022 .
Special Business
To consider and, if thought fit, pass the following resolutions
of which 10 and 13 will be proposed as Ordinary
Resolutions and 11 12, and 14 will be proposed as Special
Resolutions:
Resolution 10 – Allotment of Shares
That, in substitution for any existing authority but without
prejudice to the exercise of any such authority prior to the
date hereof, the Directors of the Company be and they
are hereby generally and unconditionally authorised in
accordance with section 551 of the Companies Act 2006
(the ‘Act’) to exercise all the powers of the Company to allot
shares in the Company and to grant rights to subscribe
for, or to convert any security into, shares in the Company
(together being ‘relevant securities’) provided that such
authority shall be limited to the allotment of shares and
the grant of rights in respect of shares with an aggregate
nominal value of up to £1,071,891 (42,875,668 Ordinary
shares) (representing 10% of the Company’s total issued
share capital as at 10 March 2023) such authority to expire
at the conclusion of the next Annual General Meeting of the
Company after the passing of this resolution or on the expiry
of 15 months from the passing of this resolution, whichever is
the earlier, unless previously revoked, varied or extended by
the Company in a general meeting, save that the Company
may at any time prior to the expiry of this authority make
an offer or enter into an agreement which would or might
require relevant securities to be allotted or granted after the
expiry of such authority and the Directors shall be entitled
to allot or grant relevant securities in pursuance of such an
offer or agreement as if such authority had not expired.
Resolution 11 – Disapplication of pre-emption rights
That, subject to the passing of resolution 10 above, and in
substitution for any existing power but without prejudice
to the exercise of any such power prior to the date hereof,
the Directors of the Company be and they are hereby
generally empowered, pursuant to sections 570 and 573 of
the Companies Act 2006 (the ‘Act’) to allot equity securities
(within the meaning of section 560(1) of the Act) for cash
either pursuant to the authority given by resolution 10
above or by way of the sale of treasury shares wholly for
cash as if section 561(1) of the Act did not apply to any such
allotment or sale, provided that this power:
(a) expires at the conclusion of the next Annual General
Notice of Meeting
77
Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
Meeting of the Company after the passing of this
resolution or on the expiry of 15 months from the
passing of this resolution, whichever is the earlier, save
that the Company may, before such expiry, make
an offer or agreement which would or might require
equity securities to be allotted after such expiry and
the Directors may allot equity securities in pursuance of
any such offer or agreement as if the power conferred
hereby had not expired; and
(b) shall be limited to the allotment of equity securities or
the sale of treasury shares up to an aggregate nominal
value of £1,071,891 (42,875,668 Ordinary shares)
(representing 10% of the Company’s total issued share
capital as at 10 March 2023).
Resolution 12 – Authority to buy back shares
That, in substitution for any existing authority but without
prejudice to the exercise of any such authority prior to the
date hereof, the Company be and is hereby generally and
unconditionally authorised, pursuant to and in accordance
with Section 701 of the Companies Act 2006 (the ‘Act’), to
make market purchases (within the meaning of Section
693(4) of the Act) of fully paid Ordinary shares of 2.5p each
in the capital of the Company (‘Ordinary Shares’), provided
that:
(a) the maximum aggregate number of Ordinary Shares
hereby authorised to be purchased is 64,270,626 or,
if less, the number representing approximately 14.99
per cent. of the issued Ordinary Share capital of the
Company on the date on which this resolution is passed;
(b) the minimum price (excluding expenses) which may be
paid for an Ordinary Share is 2.5p;
(c) the maximum price (excluding expenses) which may be
paid for each Ordinary Share purchased pursuant to this
authority shall not be more than the higher of:
(i) 5% above the average closing price on the London
Stock Exchange of an Ordinary Share over the five
business days immediately preceding the date of
purchase: and
(ii) the higher of the last independent trade and the
highest current independent bid on the London
Stock Exchange; and
(d) unless previously varied, revoked or renewed by
the Company in a general meeting, the authority
hereby conferred shall expire at the conclusion of the
Company’s next Annual General Meeting or on the
expiry of 15 months from the passing of this resolution,
whichever is the earlier, save that the Company may,
prior to such expiry, enter into a contract to purchase
Ordinary Shares under such authority which will or might
be completed or executed wholly or partly after the
expiration of such authority and may make a purchase
of Ordinary Shares pursuant to any such contract.
Resolution 13 – Allotment of shares – Second authority for
the directors’ to allot new shares of the Company.
THAT, in addition to the authority sought under resolution
10 and in substitution for any existing authority but without
prejudice to the exercise of any such authority prior to the
date hereof, the Directors of the Company be and they
are hereby generally and unconditionally authorised in
accordance with section 551 of the Companies Act 2006
(the ‘Act’) to exercise all the powers of the Company to allot
shares in the Company and to grant rights to subscribe
for, or to convert any security into, shares in the Company
(together being ‘relevant securities’) provided that such
authority shall be limited to the allotment of shares and
the grant of rights in respect of shares with an aggregate
nominal value of up to £1,071,891 (42,875,668 Ordinary
shares) (representing 10% of the Company’s total issued
share capital as at 10 March 2023) such authority to expire
at the conclusion of the next Annual General Meeting of the
Company after the passing of this resolution or on the expiry
of 15 months from the passing of this resolution, whichever is
the earlier, unless previously revoked, varied or extended by
the Company in a general meeting, save that the Company
may at any time prior to the expiry of this authority make
an offer or enter into an agreement which would or might
require relevant securities to be allotted or granted after the
expiry of such authority and the Directors shall be entitled
to allot or grant relevant securities in pursuance of such an
offer or agreement as if such authority had not expired.
Resolution 14 – Disapplication of pre-emption rights –
Second authority for the renewal of the authority to allot
up to 10% of the ordinary shares of the Company for cash
without first offering them to existing shareholders.
That, subject to the passing of resolution 13 above, and in
substitution for any existing power but without prejudice
to the exercise of any such power prior to the date hereof,
the Directors of the Company be and they are hereby
generally empowered, pursuant to sections 570 and 573 of
the Companies Act 2006 (the ‘Act’) to allot equity securities
(within the meaning of section 560(1) of the Act) for cash
either pursuant to the authority given by resolution 13
above or by way of the sale of treasury shares wholly for
cash as if section 561(1) of the Act did not apply to any such
allotment or sale, provided that this power:
(a) expires at the conclusion of the next Annual General
Meeting of the Company after the passing of this
resolution or on the expiry of 15 months from the
passing of this resolution, whichever is the earlier, save
that the Company may, before such expiry, make
an offer or agreement which would or might require
equity securities to be allotted after such expiry and
the Directors may allot equity securities in pursuance of
any such offer or agreement as if the power conferred
hereby had not expired; and
(b) shall be limited to the allotment of equity securities or
the sale of treasury shares up to an aggregate nominal
value of £1,071,891 (42,875,668 Ordinary shares)
(representing 10% of the Company’s total issued share
capital as at 10 March 2023).
By order of the Board
Kelly Nice, Company Secretary
199 Bishopsgate, London, EC2M 3TY
10 March 2023
78
Investor
Information
Notes to the Notice of Meeting
The following notes explain your general rights as a
shareholder and your right to attend and vote at this
Annual General Meeting (the ‘Meeting’) or to appoint
someone else to vote on your behalf.
1. To be entitled to attend and vote at the Meeting (and
for the purpose of the determination by the Company
of the number of votes they may cast), shareholders
must be registered in the Register of Members of
the Company at close of trading on 24 April 2023.
Changes to the Register of Members after the relevant
deadline shall be disregarded in determining the
rights of any person to attend and vote at the Meeting.
2. Shareholders, or their proxies, intending to attend the
Meeting in person are requested, if possible, to arrive
at the Meeting venue at least 20 minutes prior to the
commencement of the Meeting at 2.30pm (UK time)
on 26 April 2023 so that their shareholding may be
checked against the Company’s Register of Members
and attendances recorded.
3. Shareholders are entitled to appoint another person
as a proxy to exercise all or part of their rights to
attend and to speak and vote on their behalf at the
Meeting. A shareholder may appoint more than one
proxy in relation to the Meeting provided that each
proxy is appointed to exercise the rights attached to
a different ordinary share or ordinary shares held by
that shareholder. A proxy need not be a shareholder
of the Company. A form of proxy which may be used
to make such appointment and give proxy instructions
accompanies this Notice. If you do not have a form
of proxy and believe that you should have one, or
if you require additional forms, please contact the
Company’s registrar whose details are provided in
Note 6 below and on page 82.
4. In the case of joint holders, where more than one of
the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will
be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the
Company’s Register of Members in respect of the joint
holding (the first named being the most senior).
5. A vote withheld is not a vote in law, which means that
the vote will not be counted in the calculation of votes
for or against the resolution. If no voting indication is
given, your proxy will vote or abstain from voting at his
or her discretion. Your proxy will vote (or abstain from
voting) as he or she thinks fit in relation to any other
matter which is put before the Meeting.
6. To be valid, any form of proxy or other instrument
appointing a proxy, must be returned by no later
than 2.30pm on 24 April 2023 through any one of the
following methods:
i) by post, courier or by hand (during normal
business hours only) to the Company’s registrar at
PXS 1, Link Group, 10th Floor, Central Square, 29
Wellington Street, Leeds, LS1 4DL;
ii) electronically via proximity or through the website
of the Company’s registrar at www.signalshares.
com;
iii) via LinkVote+ (see note 8); or
iv) in the case of shares held through CREST, via the
CREST system (see notes below)
7. If you return more than one proxy appointment,
either by paper or electronic communication, the
appointment received last by the Registrar before
the latest time for the receipt of proxies will take
precedence. You are advised to read the terms and
conditions of use carefully. Electronic communication
facilities are open to all shareholders and those who
use them will not be disadvantaged.
8. Link Group, the company’s registrar, has launched a
shareholder app: LinkVote+. It’s free to download and
use and gives shareholders the ability to access their
shareholding record at any time and allows users to
submit a proxy appointment quickly and easily online
rather than through the post. The app is available to
download on both the Apple App Store and Google
Play. QR codes to facilitate this are shown below.
Your vote must be lodged by 2.30pm on 24 April 2023
in order to be considered valid or, if the meeting is
adjourned, by the time which is 48 hours before the
time of the adjourned meeting.
Apple App Store GooglePlay
9. The return of a completed form of proxy, electronic
proxy appointment or any CREST Proxy Instruction will
not prevent a shareholder from attending the Meeting
and voting in person if he/she wishes to do so.
10. CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so for the Meeting
(and any adjournment of the Meeting) by using the
procedures described in the CREST Manual (available
from www.euroclear.com). CREST Personal Members
or other CREST sponsored members, and those
CREST members who have appointed a voting service
provider(s), should refer to their CREST sponsor or
voting service provider(s), who will be able to take the
appropriate action on their behalf.
11. In order for a proxy appointment or instruction made
by means of CREST to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’) must be
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Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
properly authenticated in accordance with Euroclear
UK & International Limited’s specifications and must
contain the information required for such instructions,
as described in the CREST Manual. The message must
be transmitted so as to be received by the issuer’s
agent (ID RA10) by 2.30pm on 24 April 2023. For this
purpose, the time of receipt will be taken to mean the
time (as determined by the timestamp applied to the
message by the CREST application host) from which
the issuer’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST.
After this time, any change of instructions to proxies
appointed through CREST should be communicated to
the appointee through other means.
12. CREST members and, where applicable, their CREST
sponsors or voting service providers should note
that Euroclear UK & International Limited does not
make available special procedures in CREST for
any particular message. Normal system timings and
limitations will, therefore, apply in relation to the input
of CREST Proxy Instructions. It is the responsibility of
the CREST member concerned to take (or, if the CREST
member is a CREST personal member, or sponsored
member, or has appointed a voting service provider(s),
to procure that his/her/their CREST sponsor or voting
service provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted
by means of the CREST system by any particular
time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting service
providers are referred, in particular, to those sections
of the CREST Manual concerning practical limitations
of the CREST system and timings. The Company
may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
13. If you are an institutional investor you may be able
to appoint a proxy electronically via the Proxymity
platform. For further information regarding Proxymity,
please go to www.proxymity.io. Your proxy must be
lodged by 2.30pm on 24 April 2023 in order to be
considered valid or, if the meeting is adjourned, by the
time which is 48 hours before the time of the adjourned
Meeting. Before you can appoint a proxy via this
process you will need to have agreed to Proxymity’s
associated terms and conditions. It is important that
you read these carefully as you will be bound by them
and they will govern the electronic appointment of
your proxy. An electronic proxy appointment via the
Proxymity platform may be revoked completely by
sending an authenticated message via the platform
instructing the removal of your proxy vote.
14.
Any corporation which is a shareholder can appoint one
or more corporate representatives who may exercise
on its behalf all of its powers as a shareholder provided
that no more than one corporate representative
exercises powers in relation to the same shares.
15. As at 10 March 2023, (being the latest practicable
business day prior to the publication of this Notice),
the Company’s ordinary issued share capital excluding
treasury shares consists of 400,742,223 ordinary shares,
carrying one vote each. As at 10 March 2023 the
Company held 28,014,457 Ordinary shares in Treasury
(representing 6.5% of the total issued Ordinary share
capital of the Company (excluding Treasury shares).
Therefore, the total voting rights in the Company as at
10 March 2023 are 400,742,223.
16. Under section 527 of the Companies Act 2006
(the ‘Act’), shareholders meeting the threshold
requirements set out in that section have the right
to require the Company to publish on a website
a statement setting out any matter relating to: (i)
the audit of the Company’s financial statements
(including the Auditor’s Report and the conduct of the
audit) that are to be laid before the Meeting; or (ii)
any circumstances connected with an auditor of the
Company ceasing to hold office since the previous
meeting at which annual financial statements and
reports were laid in accordance with section 437 of the
Act (in each case) that the shareholders propose to
raise at the relevant meeting. The Company may not
require the shareholders requesting any such website
publication to pay its expenses in complying with
sections 527 or 528 of the Act. Where the Company
is required to place a statement on a website under
section 527 of the Act, it must forward the statement
to the Company’s auditor not later than the time when
it makes the statement available on the website. The
business which may be dealt with at the Meeting for
the relevant financial year includes any statement that
the Company has been required under section 527 of
the Act to publish on a website.
17. Any shareholder attending the Meeting has the right
to ask questions. The Company must cause to be
answered any such question relating to the business
being dealt with at the Meeting but no such answer
need be given if: (a) to do so would interfere unduly
with the preparation for the Meeting or involve the
disclosure of confidential information; (b) the answer
has already been given on a website in the form of
an answer to a question; or (c) it is undesirable in the
interests of the Company or the good order of the
Meeting that the question be answered.
18. The following documents are available for inspection
during normal business hours at the registered office
of the Company on any business day from the date
of this Notice until the time of the Meeting and may
also be inspected at the Meeting venue, as specified in
this Notice, from 2pm on the day of the Meeting until
the conclusion of the Meeting: copies of the Directors’
letters of appointment or service contracts.
19. You may not use any electronic address (within the
meaning of Section 333(4) of the Act) provided in
either this Notice or any related documents (including
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Investor
Information
the form of proxy) to communicate with the Company
for any purposes other than those expressly stated.
20. Any person holding 3 per cent, or more of the total
voting rights in the Company who appoints a person
other than the Chairman as his or her proxy must
ensure that both he or she and such third party comply
with their respective disclosure obligation under the
Disclosure Guidance and Transparency Rules.
A copy of this Notice, and other information required by
Section 311A of the Companies Act 2006, can be found on
the Company’s website at www.allianztechnologytrust.com
Instructions for Electronic Attendance at the Annual
General Meeting
We are pleased to be able to provide a facility for
shareholders to follow the AGM remotely and submit
questions to the board on the business of the meeting.
How to join the virtual meeting
You will need to visit https://webcast.openbriefing.com/
att-23agm/, using your smartphone, tablet or computer.
You will then be prompted to enter your unique 11 digit
Investor Code (‘IVC’) including any leading zeros and
‘PIN’. Your PIN is the last 4 digits of your IVC. This will
authenticate you as a shareholder.
Your IVC can be found on your share certificate, or Signal
Shares users (www.signalshares.com) will find this under
‘Manage your account’ when logged in to the Signal
Shares portal. You can also obtain this by contacting Link
Group, our Registrar, by calling +44 (0) 371 277 1020*
Access to the AGM will be available from 30 minutes
before the start of the event, although you will not be able
to submit questions until you are logged in.
If you wish to appoint someone to attend the virtual
meeting on your behalf, please contact Link Group on +44
(0) 371 277 1020* in order to obtain their IVC and PIN. It
is suggested that you do this as soon as possible and at
least 48 hours (excluding non-business days) before the
meeting.
If your shares are held within a nominee and you wish to
attend the electronic meeting, you will need to contact
your nominee as soon as possible. Your nominee will need
to present a corporate letter of representation to Link
Group, our registrar, as soon as possible and at least 72
hours (excluding non-business days) before the meeting,
in order that they can obtain for you your unique IVC and
PIN to enable you to attend the electronic meeting.
*Lines are open from 9.00 a.m. to 5.30 p.m. Monday to
Friday, calls are charged at the standard geographic
rate and will vary by provider. Calls outside the UK will be
charged at the applicable international rate.
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Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022
82
Allianz Technology Trust PLC
199 Bishopsgate
London
EC2M 3TY
+44 (0)203 246 7000
www.allianztechnologytrust.com