Finely crafted investments

Amati AIM VCT plc

Annual Report &

Financial Statements

For the year ended 31 January 2022

Company Registration No. 04138683

OUR STRATEGY

The investment objective of

the Company is to generate

tax free capital gains and

income on investors’ funds

through investment primarily

in AIM-traded companies.

DIVIDEND POLICY

The Board aims to pay

annual dividends of around

5% of the Company’s

Net Asset Value at its

immediately preceding

ﬁnancial year end, subject to

distributable reserves and

cash resources, and with the

authority to increase or

decrease this level at the

Directors’ discretion.

Company Registration No. 04138683

This document is important. Shareholders who are in any doubt as

to what action to take should consult an appropriate independent

adviser. If you have sold or transferred all your shares in the

Company, this document should be passed to the person through

whom the sale or transfer was effected for transmission to the

purchaser or transferee.

Amati AIM VCT plc

Highlights

Key data

For the year ended 31 January 2022

Highlights 1

Strategic Report

Chairman’s Statement 4

Fund Manager’s Review 7

Fund Manager Biographies 11

Investment Portfolio 13

Investment Policy, Company

Objectives and Investment Strategy 17

Fund Management and

Key Contracts 19

Principal and Emerging Risks 20

Section 172 Statement 24

Other Matters 28

Reports from the Directors

Board of Directors 30

Directors’ Report 32

Statement of Corporate

Governance 37

Report of the Audit Committee 41

Directors’ Remuneration Report 44

Statement of Directors’

Responsibilities 48

Independent Auditor’s Report to

the Members of Amati AIM VCT plc 49

Financial Statements

Income Statement 55

Statement of Changes in Equity 56

Balance Sheet 58

Statement of Cash Flows 59

Notes to the Financial Statements 60

Information for Shareholders

Shareholder Information 76

Alternative Performance Measures 77

Notice of Annual General Meeting 79

Corporate Information 85

31/01/22 31/01/21

Net Asset Value (“NAV”) £247.1m £238.3m

Shares in issue 136,720,797 115,589,550

NAV per share† 180.7p 206.1p

Share price 166.5p 190.5p

Market capitalisation £227.6m £220.2m

Share price discount to NAV† 7.9% 7.6%

NAV Total Return for the year

(assuming re-invested dividends)† -7.5% 38.9%

Numis Alternative Markets

Total Return Index* -3.5% 20.5%

Ongoing charges**† 1.9% 2.1%

Dividends paid and declared

in respect of the year 9.0p 10.5p

NAV Total return

for the year

-7.5%

£31.3m

invested in qualifying

holdings during the year

£65m

The prospectus offer

launched in July 2021 raised

£65m by close of the offer in

February 2022

Year end

Net Asset Value per share

180.7p

* Numis Alternative Markets Index is included as a benchmark for performance as this index includes all

companies listed on qualifying UK alternative markets.

** Ongoing charges calculated in accordance with the Association of Investment Companies’ (“AIC’s”)

guidance.

† See Alternative Performance Measures on pages 77 and 78.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

1

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Amati AIM VCT plc

Annual Report & Financial Statements 2022

2

Table of investor returns

to 31 January 2022

Numis

NAV Total Alternative

Return with Markets

dividends Total

From Date re-invested Return Index

NAV following re-launch of the VCT under

management of Amati Global Investors (“Amati”) 9 November 2011* 208.0% 65.2%

NAV following appointment of Amati

as Manager of the VCT, which was known

as ViCTory VCT at the time 25 March 2010 223.1% 69.8%

* Date of the share capital reconstruction when the NAV was rebased to approximately 100p per share.

A table of historic returns is included on page 76.

Highlights

Dividends paid and declared

Dividend history

Since the re-launch of the VCT under the management of Amati Global Investors*

Total Cumulative

dividends dividends

per share** per share

Year ended 31 January pp

2011 4.74 4.74

2012 5.50 10.24

2013 6.00 16.24

2014 6.75 22.99

2015 6.25 29.24

2016 6.25 35.49

2017 7.00 42.49

2018 8.50 50.99

2019 7.50 58.49

2020 7.75 66.24

2021 10.50 76.74

2022 9.00 85.74

* On 25 March 2010 Amati Global Investors were appointed as Manager of ViCTory VCT. On 8 November 2011 Invesco Perpetual AIM VCT merged with ViCTory VCT and

the name was changed to Amati VCT 2. On 4 May 2018 the Company merged with Amati VCT and the name was changed to Amati AIM VCT.

** Total dividends per share are the declared dividends of the financial year.

2022 total dividends

per share

9.0p

5.0% of NAV

Cumulative

dividends per share

85.74p

h

14.3%

25/03/10

25/03/11

25/03/12

25/03/13

25/03/14

25/03/15

25/03/16

25/03/17

25/03/18

25/03/19

25/03/20

25/03/21

400

350

300

250

200

150

100

50

Since Invesco

Perpetual Merger

into Amati VCT 2

Since Amati VCT

Merger into

Amati AIM VCT

Amati AIM VCT NAV

Total Return

(rebased to 100)

Numis Alternative

Markets Total Return

Index (rebased to 100)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

3

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

31/1/01

31/1/02

31/1/03

31/1/04

31/1/05

31/1/06

31/1/07

31/1/08

31/1/09

31/1/10

31/1/11

31/1/12

31/1/13

31/1/14

31/1/15

31/1/16

31/1/17

31/1/18

31/1/19

31/1/20

31/1/21

31/1/22

210

190

170

150

130

110

90

70

50

30

Amati AIM VCT NAV Total

Return (rebased to 100)

Numis Alternative Markets

Total Return Index

(rebased to 100)

Historic performance

Amati AIM VCT NAV Total Return and Numis

Alternative Markets Total Return Index from

inception of fund to 31 January 2022

Fund performance

Amati AIM VCT NAV Total Return and Numis

Alternative Markets Total Return Index from change of

Manager on 19 March 2010 (first Net Asset Value

calculated on 25 March 2010) to 31 January 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

4

Peter A. Lawrence

Chairman

This report has been prepared by

the Directors in accordance with

the requirements of Section 414A

of the Companies Act 2006.

Overview and Investment Performance

Following a rise of almost 8% in the first half of the

year, the performance of the portfolio fell away in the

second half to close the year down 7.5%, on a NAV

total return basis. Some of this fall was for company

specific reasons, in particular Polarean Imaging and

Frontier Developments, while some was due to a

sharp deterioration in sentiment. This stemmed from

inflation rising to much higher levels than forecast by

central banks, bringing with it the prospect of higher

interest rates, rising bond yields and the withdrawal of

liquidity through the ending of quantitative easing.

This has led to some significant de-ratings of many

growth companies. On top of this, there was the

deepening crisis caused by Russia’s military build-up

around Ukraine.

The Company made twelve new qualifying investments

during the year. Having invested £19.7m in the ﬁrst

half, a total of £31.3m was invested across the year as

a whole. Six of the new investments come under the

broad category of environmental technology, being

companies providing technologies, products and

services which will help enable, in a myriad of different

ways, both energy transition away from oil and gas and

the reduction of greenhouse gas emissions. With high

levels of capital being deployed to this end around the

world, these are competitive areas. However, with such

big changes to every aspect of our economy being

required over the next 30 years to reach net zero

emissions there are also abundant opportunities for

new technology to be developed and commercialised

and the UK provides fertile ground in which to create

such companies. Healthcare also remained well

represented amongst our new investments, with

software and training companies also featuring. Fuller

details of the new investments and of investment

performance are given in the Manager’s Review which

follows.

Corporate Developments

The Board announced in April that it intended to

launch a Prospectus Offer (the “Offer”). This opened

on 30 July seeking to raise up to £40m with an over-

allotment facility to raise up to a further £25m. This

Offer saw strong demand and the initial £40m was

raised after only four business days. On 15 December

2021, the Board announced that, as the Company had

continued to identify attractive investment

opportunities and having considered the current rate

of investment activity, it intended to utilise the over-

allotment facility of £25m and re-open the Offer in

February 2022. This was confirmed by the Board in its

announcement on 14 February this year, with the

Offer re-opening on 16 February and closing on 21

February, having been fully subscribed.

Ahead of its new financial year, the Board took the

decision to transfer its company secretarial services.

LDC Nominee Secretary Limited, part of The Law

Debenture Corporation p.l.c. (“Law Debenture”) was

appointed as Company Secretary on 1 February 2022.

Contact details for Law Debenture are set out at page

85 of this report.

Strategic Report

Chairman’s Statement

Amati AIM VCT plc

Annual Report & Financial Statements 2022

5

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

At the AGM this year, shareholders are being asked to

vote on a resolution to cancel the entire amount

standing to the credit of the Company’s share

premium account as at the date the relevant Court

order is made. Subject to confirmation by the High

Court of Justice in London and the reduction in capital

taking effect, the amount so cancelled will be credited

to the Company’s distributable reserves. This will

improve the Company’s distributable reserves position

and will provide the Company with flexibility to

support, amongst other things, share buy-backs and

the payment of dividends or other distributions to

shareholders in the future. Shareholders were last

asked to approve such a resolution in 2018.

Dividend

The Board aims to pay annual dividends of around 5%

of the Company’s Net Asset Value at its immediately

preceding ﬁnancial year end, subject to the Company’s

distributable reserves and cash resources, and with the

authority to increase or decrease this level at the

Directors’ discretion.

As at 31 January 2022 the net asset value was 180.7p.

In line with this, the Board is proposing a ﬁnal dividend

of 4.5p per share, to be paid on 22 July 2022 to

shareholders on the register on 17 June 2022. When

added to the interim dividend of 4.5p per share, this

would make total dividends for the year 9.0p per share,

which is 5.0% of year end NAV.

The Board would like to remind shareholders about the

Dividend Re-investment Scheme (“DRIS”). This allows

shareholders to use their dividends to buy new shares

issued by the Company on the dividend payment date

priced at the most recently published NAV per share.

Shares issued by the DRIS, being new shares, have the

same tax beneﬁts as shares bought in our standard

share offers. The only difference is that they do not

have to meet the requirement to be bought more than

six months before or after any share sales, so income

tax relief can be claimed on them at 30% of the

subscription value regardless of any share sales made,

provided that the other standard tests are met, such as

not investing more than £200,000 in VCT shares in any

one tax year, whether through an Offer or on the

market. If you wish to join the DRIS please contact the

Company’s registrar.

Annual General Meeting (“AGM”)

The AGM this year will be held at Barber-Surgeons’

Hall, Monkwell Square, Wood Street, London EC2Y 5BL

starting at 2pm on Thursday 16 June 2022. This will be

followed by presentations from the Manager and

investee companies, and the Amati Guildhall Creative

Entrepreneurs Award. Details are being sent to you

with this report.

The Notice of AGM is set out on pages 79 to 84 of this

report.

At the date of this report, there are no UK Government

imposed restrictions in connection with the Covid-19

pandemic on the holding of public gatherings that

would affect the holding of the AGM in London.

However, the situation relating to Covid-19 is

constantly evolving and the UK Government may re-

impose restrictions in connection with Covid-19 and/or

implement further measures that affect the holding of

shareholder meetings. Accordingly, it is possible that at

the date of the AGM measures may be in place that

would restrict attendance at the AGM.

The Board recognises that the Company’s AGM

represents an important forum for shareholders to put

questions to the Directors, to express their views on

governance and to become fully informed about

matters relating to the AGM resolutions. It understands

that attending in person may not be possible for all

shareholders who wish to attend. Therefore, the

Company intends to also make available a live stream

facility to allow shareholders to watch and listen

to the AGM and the investor event which follows.

If shareholders wish to use this facility please

register your interest by emailing info@amatiglobal.com

and shortly ahead of the event the Company’s Manager

will post a link and instructions on how to join the event

on its homepage at www.amatiglobal.com.

Shareholders watching the AGM will not be counted

towards the quorum of the meeting and will not be able

to participate in the formal business of the meeting,

including asking questions and voting on the day.

The Board encourages shareholders to engage with

the Board and the Company’s Manager. In addition to

asking questions at the AGM, shareholders can email

any questions they may have either on the business of

the AGM or the portfolio to info@amatiglobal.com by

10 June 2022. The Company’s Manager will publish

questions together with answers on the page

dedicated to the AGM on the Manager’s website prior

to the AGM being held. The Company’s Manager will

reply to any individual shareholder questions submitted

by the deadline of 10 June 2022, before the AGM.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

6

The Board also encourages shareholders to exercise

their votes in advance of the meeting. Shareholders are

advised to vote through the Company Registrar’s

online voting facility (details of which can be found at

page 82 of this Report) or by form of proxy.

Shareholders who hold their shares through an

investment platform or other nominee service are also

encouraged to contact their investment platform or

other nominee service as soon as possible to arrange

for votes to be lodged on their behalf.

Board Changes

In 2005, I was invited to join the board of Amati VCT

plc at its foundation, when it was then, First State

Investments AIM VCT plc, going on to chair ﬁrst Amati

VCT plc and then the Company after the merger with

Amati VCT plc in 2018. Since its creation, I have seen

the Company grow and develop to its current size and

success. I shall be retiring from the Board after this

year’s AGM and I would like to thank all of my board

colleagues, past and present and the Company’s

Manager, for their support and hard work throughout

my tenure. After six years on the board, Susannah

Nicklin also intends to retire from the board before the

end of this year to devote more time to other interests

and recent appointments.

During the year we appointed Fiona Wollocombe to

the board with a view to addressing the board’s

succession plans and I am delighted that she has

agreed to take over as Chair. With her experience of

VCTs and the investment sector, I am conﬁdent that I

leave your board and the Company in the best of

hands. It has been a privilege to have played a part in

the evolution of our VCT.

Outlook

Since the aggressive attack by Russia on the Ukraine,

we have experienced extreme investor sentiments

which have led to a dramatic fall in the FT Indices after

our year end. Our well-balanced portfolio has not been

immune to derating along with the market, even for

those companies with high elements of service and

technical expertise. With inﬂation, interest rates and

energy prices rising, there are ongoing headwinds. Our

portfolio contains a diverse range of well-resourced

companies, mostly with high barriers to entry derived

from intellectual property and specialist skills. It also

consists of both early-stage companies with good cash

resources addressing potentially large markets and,

where we have held investments for longer periods,

maturing businesses with typically low levels of debt.

Most of these businesses should be well placed to

perform in more difﬁcult economic conditions. It is in

the nature of VCT investing that if we exit positions in

more mature companies we cannot buy them back

again because they would no longer ﬁt the qualifying

VCT criteria, so we have a strong incentive to be long

term investors. This has proven to be beneﬁcial over

the years. It might be expected that the more

challenging market conditions allow us to make new

investments at lower valuations, and we anticipate

having opportunities to take this advantage and

deploy our recently raised funds during the course

of 2022.

We all hope for peace soon.

Peter A. Lawrence

Chairman

12 April 2022

For any matters relating to your shareholding in

the Company, dividend payments, or the Dividend

Re-investment Scheme, please contact The City

Partnership (UK) Ltd on 01484 240 910, or by

email at amativct@city.uk.com.

For any other matters please contact Amati Global

Investors on 0131 503 9115 or by email at

info@amatiglobal.com. Amati maintains an

informative website for the Company –

www.amatiglobal.com – on which monthly

investment updates, performance information, and

past company reports can be found.

Chairman’s Statement (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

7

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Market Review

During the year under review, some light

ﬁnally began to appear at the end of the

Covid tunnel, with the global rollout of

vaccination programmes now leading to

greatly reduced rates of hospitalisations

and deaths in most countries. Hopefully,

we can now look towards a future with

limited fear of further lockdowns and

gradually falling levels of restrictions.

Despite this clear evidence of progress on the

pandemic, it has been a mixed year for equity markets,

with the strong returns reported in the ﬁrst half

unwinding during the second half. Investors are now

focusing heavily on geo-political and economic factors

which gave increasing cause for concern as we

entered 2022. This has come at a time when equity

valuations look stretched compared to history,

especially in the US. In turn, this has led to market

sentiment changing, with high growth sectors such as

healthcare and technology seeing material proﬁt

taking, whilst out-of-favour sectors including oil and

gas, mining and banking, have enjoyed a return to form

after a number of fallow years.

The ever increasing build-up of Russian troops and

armaments around the Russian-controlled borders of

Ukraine became an ever more worrying development

during the year. Relatively few commentators saw this

as the pre-cursor to an all-out invasion of the kind that

took place on 24 February 2022, but the level of geo-

political risk was rising throughout the period.

The extraordinary level of quantitative easing to

support pandemic policies during 2020 and 2021 has

meant that we are now in an era of higher inﬂation and

an upward trajectory to interest rates. Inﬂation rose to

levels the likes of which younger investors will not have

seen in their careers. Markets are increasingly coming

to the view that inﬂation may be with us for some time.

It is hard to escape the conclusion that central banks

and ﬁnance ministers miscalculated in creating as

much liquidity as they did in 2020 and 2021. Towards

the end of 2021, we saw dramatic increases in global

energy costs, led by rising oil and gas prices, leaving

questions about ongoing energy security, particularly in

the EU, but the UK has also paid little attention to this

in recent years. This comes against ongoing and costly

commitments to deliver reduced carbon levels post the

COP26 conference.

Moving closer to home, it has been a disappointing year

for AIM investors with the Numis Alternative Markets

Total Return Index falling by 3.5%. This was materially

below both the Numis Smaller Companies (plus AIM

excluding Investment Companies) Index which rose by

11.6%, and the Numis Large Cap index which rose by

19.5%. The recent increases we have seen in bond

yields and interest rate expectations have led to a more

difﬁcult environment for the valuation of early-stage

companies in general. However, UK asset prices remain

modest by international standards and the derating we

have seen over the past few months has brought

valuations back in line with longer term norms.

Performance

The VCT’s NAV Total Return for the period was -7.5%.

This underperformed the benchmark Numis Alternative

Markets Total Return Index, which returned -3.5%.

After rising 7.9% in the first half, the tone of the

market became increasingly negative in the second

half of the year. In addition, a couple of the previously

best performing investments in the portfolio hit some

specific issues.

Saietta, which was bought as pre-IPO investment and

then added to at the point of IPO, was the biggest

positive contributor to performance during the period.

Other recent IPOs such as Northcoders and Arecor

Therapeutics have also done well, with more detail in

the section on Portfolio Activity below. Corporate

activity also boosted performance. Universe was

acquired by Professional Data Solutions at a 129%

premium, and Xplorer Capital Growth acquired

CloudCall at a 76% premium. Water Intelligence, the

water leak detection company predominantly

operating via franchisees in the US, was also a

significant contributor, rising by 73%. Earnings have

grown rapidly over the last few years, as the company

has been acquiring underperforming franchises to

operate directly. It has also successfully developed a

national sales channel to sell to insurers. Accesso

Technology, a global leader in online ticketing and

electronic queuing systems, rose by 83% after the

company saw earnings upgrades as its customers

made greater use of its products once lockdowns

began to ease. Angle, the maker of Parsortix, a device

which can isolate circulating tumour cells in blood

samples for analysis, having raised £20m in July, rose

strongly over the year, as did SRT Marine Systems as

Fund Manager’s Review

Amati AIM VCT plc

Annual Report & Financial Statements 2022

8

responding later than the normal regulatory timetable

specified. We had sold around 1m shares ahead of the

approval, but this did not alter the fact that as

Polarean was our largest holding, the fall had a big

impact on the Fund’s NAV. On the positive side, a

recent study in Oxford has shown that Polarean’s

device can play a key role in diagnosing long Covid

where this is caused by lung impairment.

Portfolio Activity

The Company made twelve new investments and two

follow-on investments during the period. The new

investments comprised eight Initial Public Offerings

(“IPO”), one secondary placing, and three pre-IPO

investments. The pre-IPO investments and several of

the IPOs we took part in are focused on environmental

technologies, or in other words, bringing new

technologies to market which are important to the

goal of reducing greenhouse gas emissions. The pre-

IPO investments all took the form of convertible loans

with a small amount of equity investment.

Pre-IPO Investments

In March, prior to its flotation, we invested an initial

£2.6m in Saietta, which had developed a novel design

for an axial flux electric motor. These motors have

advantages over competitors in terms of torque

density, power efficiency and low cost of manufacture.

The first market to be targeted is for outboard motors

in Europe, where the company has launched its first

products under the brand Propel. The longer-term

targets are the light motorbike market (125cc) in Asia,

where countries are trying to improve air quality, and

reduce pollution and carbon emissions, and also

delivery and commercial vehicles and high-

performance cars. When the company floated in June,

we invested a further £2.5m, and the shares have

performed strongly since then. In November, the

company acquired the Dutch electric bus drive train

designer and manufacturer, e-Traction, for very limited

consideration in a distressed sale by Evergrande. This

added a new engineering team, a range of patent

protected designs, capability around inverter design, a

European operating base, and an existing customer

base for electric bus drive trains.

We invested £2m in EleXsys Energy in September.

The company uses innovative technology to allow

clean energy producers to feed multiple times more

energy back into existing electricity distribution grids,

and turns current one-way grids into two-way smart

the company finally delivered on some contract wins,

after several delays, exacerbated by Covid.

Frontier Developments, the video games developer,

was the biggest negative contributor in the period,

falling by 56%. The company’s launch of Jurassic

World Evolution 2 (“JWE2”) undershot expectations,

which had been set high. Whilst the launch was

smooth and glitch-free, the game was released into a

crowded Thanksgiving schedule, as several launches

that had been delayed by Covid came to market at the

same time. Additionally, JWE2 did not have the

support of a concurrent cinema release, as the next

instalment in the franchise has been pushed to June

2022. Revenues were also lower than expected from

Elite Dangerous: Odyssey after the gameplay of the

new release did not work well across different devices.

The console release was also delayed. We are

confident that Frontier remains a world-class video

games developer, and the company continues to

broaden its portfolio of games, creating a more

diversified business. Nonetheless, developing video

games always carries a degree of risk and

unpredictability. Tristel fell by 29%, as further

outbreaks of Covid reduced the number of elective

surgeries taking place and consequently it sold fewer

kits for sterilising surgical equipment.

Polarean Imaging (“Polarean”), which had risen

strongly in the first half of the year, then fell sharply

from its high of 110p in October 2021. The U.S. Food

and Drug Administration (“FDA”) responded to its

application for approval of its medical device with a

Complete Response Letter (“CRL”) as they had

additional questions about the submission. This was

unexpected. We believe it was part of a wider

phenomenon in 2021, where the FDA had devoted so

much time to Covid related approvals, with reduced

underlying capacity due to working from home and

self-isolation, that it pushed approvals back using

whatever means it could, using a CRL or just by

“ The companies in which the VCT

invests are typically rich in intellectual

property and specialist know-how,

focused on products and services

which are important to customers,

and therefore should be able to

maintain pricing power against an

inﬂationary backdrop.”

Fund Manager’s Review (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

9

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

grids, without requiring significant spend on

infrastructure or equipment. We invested £3m in

Flylogix in November. Flylogix has developed remotely

piloted small fixed-wing aircraft that can be used for

monitoring purposes in remote locations at sea. Its

initial focus is on the measurement of methane

emissions from oil and gas infrastructure in the North

Sea, but is expanding this service to other

geographies, led by customer demand. It is also

looking to enter the market for bird and mammal

surveys for prospective wind farms around the UK.

Remotely piloted aviation is safer, cheaper and has a

much reduced carbon footprint versus conventional

aviation. There are several demand drivers and

applications worldwide for its technology, which has

brought together smart software, 4G and satellite

communications, and low-cost electronics to develop a

new generation of smaller, more efficient aircraft.

IPO Investments

We supported three new healthcare IPOs. In May we

invested £1.9m in Arecor Therapeutics, a drug

development services company, which uses its Arestat

platform to enhance the formulation of drugs to

improve their therapeutic properties. Arecor has an

impressive list of pharma, generic and biotech clients

as well as potential significant upside from an

internally developed pipeline of clinical programmes

and has performed well since float. In the same month

we invested £0.7m in Trellus Health, whose software

platform provides expert personalised care for the

treatment of Inflammatory Bowel Disease and other

complex chronic conditions, aiming to cut healthcare

costs by reducing hospital admissions and tailoring

care to the individual patient to improve their resilience

in the face of their symptoms. In December we

invested £3.6m in Aptamer. The company develops

affinity ligands, which are biological molecules that

bind other molecules, in the way that antibodies do for

example. Aptamers are very small in comparison, and

their attributes offer benefits to cost, manufacturing

and likelihood of binding. The company works with

75% of the world’s top 20 pharma companies with

repeat custom. Clients use Aptamers across

healthcare applications, such as therapeutic delivery,

purification, diagnostics and bioprocessing.

Three of the eight IPO investments added to our

portfolio of software, training and ecommerce

companies. In May we invested £3m in Glantus, which

had developed software to automate the process of

checking and auditing Accounts Payable items for

large corporate customers. This is a function in the

past that has often been taken on by specialist

consultants. Glantus has acquired two such

consultancy businesses, allowing it to gain from the

efficiency that the software can bring, whilst

broadening its customer reach. This is a competitive

area, but one in which Glantus has a broad product

set and customer base, with low levels of churn. In

March we invested £1.7m in In the Style, an

ecommerce retailer specialising in providing inclusive

clothing collections by social media influencers. Sales

have grown strongly during the pandemic, but supply

chain issues brought margins down to hardly

breakeven. After some disappointments, a change of

management has seen the founder replaced as CEO,

bringing in a more experienced pair of hands. Lastly, in

July we invested £1.8m in Northcoders, which

provides training to IT novices and junior software

engineers. There continues to be an acute shortage of

coders, programmers, and developers in the UK.

Recently the company has expanded into providing

apprenticeship courses. Northcoders’ student numbers

and revenues took an inevitable hit in 2020 from the

impact of the pandemic, but the company reacted

quickly and within six months it was able to transition

its onsite offering into on-line courses. It can now offer

a full range of onsite and hybrid-online content from

its technology-based teaching platform. This

operational leverage will drive EBITDA margins to

more than 30%, and the IPO funds will enable the

company to expand to new locations.

The remaining two IPOs were in buildings related

products - and services which are coming to the fore

for environmental reasons; we invested £0.75m in

Zenova in July and £1.95m in Eneraqua in November.

Zenova has developed an intriguing array of new fire

safety, thermal insulation, and temperature

management technologies in the form of paints,

renders and sprays. The remarkable features of these

products can be seen in demo videos on the

company’s website. Due to the early stage of the

business, we made a small investment but with a right

to subscribe for a further 6,578,947 shares up to 9

months after the IPO. Eneraqua designs and installs

energy and water systems for large buildings in both

the public and private sectors, involving ground and air

source heat pumps. It has a patented device which

overcomes variable mains pressure to provide

constant water flow. This reduces water consumption

which in turn reduces heating requirements and

Amati AIM VCT plc

Annual Report & Financial Statements 2022

10

system costs. It is working with three utility companies

and 28 local authorities and housing associations, on

both new and replacement systems.

Secondary Placings and Follow-On Investments

In March, we invested £1.7m in another new holding,

GeTech, through a secondary placing. GeTech's core

business is based around its geoscience and

geospatial database and software products.

Historically, these have been sold principally to oil and

gas and mining customers. In addition to detailed

geological and gravity mapping, GeTech's data can

show how the geology of any given location has been

formed. Over the past few years, the company has

focused on diversifying its revenue streams, applying

its data sets to water, transportation, nuclear, pipeline

and electricity infrastructure sectors. In 2021 it bought

the rights to acquire H2 Green, a company developing

UK sites as hydrogen hubs for industrial use, and the

placing was used to fund the development of these

projects.

Follow-on investments over the year included £1.5m in

CloudCall, the online consumer privacy and security

software provider, which was subsequently bid for;

£1m in Velocys, which is focused on technology for

creating Sustainable Aviation Fuel from waste; and

£1.3m in Polarean as part of a $25m total fundraise -

the bulk of this was to enable the company to build

sales and marketing capability ahead of anticipated

FDA approval (which has since been delayed) as well

as additional trials, EU expansion, and further R&D

expenditure.

On the sell side, we took significant profits in Ilika,

which had performed very strongly since our follow-on

investment in 2020 and reduced holdings in Eden

Research, Rua Life Sciences, Synairgen and Falanx.

Outlook

The outlook is overshadowed by the ongoing Russian

invasion of Ukraine, which beyond creating countless

human tragedies, weakens global stability

significantly. With this act, Russia has done something

that many in the West would have believed

unthinkable, although, in reality, it has taken the

pathway towards ever increasing aggression and

willingness to use massive military force beyond its

borders step-by-step over the last decade. In no small

part, Russia’s ability to become such a threat has been

enabled through the vast income generated from sales

of oil and gas to Europe. It is a classic case of the

natural resources curse in action, as described

eloquently in Leif Wenar’s book, “Blood Oil: Tyrants,

Violence, and the Rules that Run the World”, written in

2016. The external oil and gas revenues coming to

resource cursed countries in which a dictator has

established absolute power with whatever level of

violence is required, leads to a vicious circle in which

the regime in power has no interest in cultivating civil

society at home, because they can obtain vast wealth

from abroad as long as any local opposition is

suppressed. Wenar uses a poignant word taken from

CIA circles to describe the consequences of Western

powers choosing to ignore this phenomenon –

“blowback”. Unfortunately, this only stops when the

regime changes or the natural resource revenues

cease. With Russia owning close to a quarter of the

world’s natural gas reserves this is a big problem.

Even a sea-change in mindset cannot suddenly

provide a way out of European dependence on

Russian gas; that will take 3-5 years or more.

This has served as a sharp reminder of just how much

we still depend on oil and gas as crucial sources of

energy, however much we might wish that this was

not the case. This can’t be changed simply by cutting

supply, it can only be changed by changing the

structure of demand. This in turn acts as a reminder of

just how much there is to do to bring about the energy

transition towards carbon-free alternatives. Step one

of this transition is to avoid war and promote

international co-operation, a step which now looks

much more difficult to achieve. Step two is to develop

the technologies to enable de-carbonisation, and that

is an area we have been actively supporting through

portfolio investments.

The companies in which the VCT invests are typically

rich in intellectual property and specialist know-how,

focused on products and services which are important

to customers, and therefore should be able to maintain

pricing power against an inflationary backdrop.

However rising interest rates and the withdrawal of

quantitative easing will continue to keep stock market

ratings under pressure, so returns will need to come

from positive earnings growth over the coming years,

and we remain optimistic that the majority of portfolio

companies should be well placed for this.

Dr Paul Jourdan, David Stevenson,

Anna Macdonald and Scott McKenzie

Amati Global Investors

12 April 2022

Fund Manager’s Review (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

11

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Fund Manager Biographies

Amati Global Investors

Amati Global Investors is a specialist

fund management business based in

Edinburgh. It focuses on UK small and

mid-sized companies, with a universe

ranging from fully listed constituents of

the FTSE Mid 250 and FTSE Small Cap

indices, to stocks quoted on the

Alternative Investment Market. It was

Highly Commended in Investment

Week’s Fund Manager of the Year

Awards 2021. It is the manager of

Amati AIM VCT (for which it won the

2021 Investment Week award for AIM

quoted VCT of the Year), the TB Amati

UK Smaller Companies Fund, the TB

Amati Strategic Metals Fund, and it

also offers an AIM IHT portfolio service.

It is incorporated in Scotland and 51%

owned by its staff, and 49% owned by

Mattioli Woods plc, which invested in

the company in February 2017. Amati

Global Investors was a Tier 1 signatory

to the 2012 UK Stewardship Code and

in March 2022 has been accepted as a

signatory to the 2020 UK Stewardship

Code. Amati is also a signatory to the

UN-supported Principles for

Responsible Investment (PRI).

Paul Jourdan

Founder and CEO

Dr Paul Jourdan is an award winning

fund manager, with a strong track

record in small cap investment. He co-

founded Amati Global Investors

following the management buyout of

Noble Fund Managers from Noble

Group in 2010, having joined Noble in

2007 as Head of Equities. His fund

management career began in 1998

with Stewart Ivory where he gained

experience in UK, emerging market and

global equities. In 2000, Stewart Ivory

was taken over by First State and Paul

became manager of what is now TB

Amati UK Smaller Companies Fund. In

early 2005, he launched Amati VCT

and then also became manager of

Amati VCT 2 plc after the investment

management contract moved to Amati

Global Investors in 2010. In September

2014 Amati launched the Amati AIM

IHT Portfolio Service, which Paul co-

manages with David Stevenson, Anna

Macdonald and Scott McKenzie. Prior

to 1998 Paul worked as a professional

violinist, including a four year period

with the City of Birmingham Symphony

Orchestra. He is a CFA Charterholder,

CEO and a director of Amati and a

trustee of Clean Trade, a charity

registered in England and Wales.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

12

David Stevenson

Fund Manager

David Stevenson joined Amati in

2012. In 2005 he was a co-

founding partner of investment

boutique Cartesian Capital, which

managed a range of retail and

institutional UK equity funds in long

only and long/short strategies. Prior

to that he was Assistant Director at

SVM, where he also managed

equity products including the UK

Opportunities small/midcap fund

which was ranked top decile for the

5 year period from inception to

2005. David started his career at

KPMG where he qualiﬁed as a

Chartered Accountant. He latterly

specialised in corporate ﬁnance,

before moving into private equity

with Dunedin Fund Managers.

David has co-managed both the TB

Amati UK Smaller Companies Fund

and Amati AIM VCT since 2012

and the Amati AIM IHT Portfolio

Service since 2014.

Anna Macdonald

Fund Manager

Anna Macdonald is an experienced

fund manager specialising in UK

equities. Anna began her career as

an analyst and fund manager at

Henderson Global Investors in

London, where she co-managed

the core enhanced UK equity

product, and the UK Equity Market

Neutral hedge fund. At Henderson

she was an analyst on the media

sector. After some time living in

Kenya, as head of research for Old

Mutual Asset Management, she

returned to the UK and worked at

Threadneedle Investors in London

before moving to Edinburgh. Anna

joined the Amati team in 2018 from

Adam and Company, where she led

research for the PAM-award

winning wealth manager. She

brings her expertise running the

successful AIM-listed portfolio

service to Amati as well as a

breadth of experience in managing

substantial OEICs, private client

and charity portfolios. She has

been a CFA Charterholder since

2003.

Scott McKenzie

Fund Manager

Scott McKenzie joined Amati in

April 2021 and has over 25 years

of experience managing UK equity

portfolios. His career began in

Glasgow at Britannia IM in the early

90s before moving to London with

Aviva Investors in 1999. He

returned to Scotland in 2005,

joining Martin Currie where he

remained until 2009. After a period

running his own private businesses,

he joined Saracen Fund Managers

in 2014 where he launched the TB

Saracen UK Income fund and also

became manager of the TB

Saracen UK Alpha fund. He left

Saracen in March 2021 having led

both funds to top quartile rankings

in their sector.

Fund Manager Biographies (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

13

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Investment Portfolio

as at 31 January 2022

Original

Amati VCT Fair value

bookcost at Aggregate movement Market Dividend %

4 May 2018

#

Cost* Cost** Valuation in year Cap FTSE Yield

NTM

of net

Company name £'000 £'000 £'000 £'000 £'000 £m Sector % assets

TB Amati UK Smaller 3,331 6,261 9,592 15,387 62 - Financials 1.2 6.2

Companies Fund

Polarean Imaging plc

1

- 5,218 5,218 14,566 (2,637) 121.5 Health Care 0.0 5.9

Keywords Studios plc

1

323 4,851 5,174 12,808 (1,057) 1,923.3 Information 0.1 5.2

Technology

Ideagen plc

2

565 2,738 3,303 12,612 (952) 778.3 Information 0.2 5.1

Technology

Learning Technologies Group plc

1

780 3,771 4,551 11,530 186 1,315.5 Information 1.0 4.7

Technology

Saietta Group plc

1,3

- 5,100 5,100 11,265 6,165 178.6 Consumer 0.0 4.5

Discretionary

Frontier Developments plc

1

341 4,357 4,698 8,628 (11,040) 545.2 Communication 0.0 3.5

Services

Tristel plc

2

542 2,747 3,289 7,560 (3,135) 193.5 Health Care 1.9 3.1

GB Group plc

2, 3

236 2,967 3,203 7,404 (2,243) 1,650.7 Information 0.8 3.0

Technology

Water Intelligence plc

2

180 1,038 1,218 6,925 2,933 147.6 Industrials 0.0 2.8

Largest ten investments 45,346 108,685 44.0

AB Dynamics plc

1

209 2,370 2,579 6,625 (1,954) 333.7 Industrials 0.4 2.7

Diurnal Group plc

1

732 3,508 4,240 5,130 (570) 91.3 Health Care 0.0 2.1

MaxCyte Inc.

1

449 1,535 1,984 4,552 (1,965) 459.5 Health Care 0.0 1.8

Craneware plc

2,3

298 3,601 3,899 4,189 (537) 692.8 Health Care 1.8 1.7

Aptamer Group plc

1

- 3,677 3,677 4,085 408 89.6 Health Care 0.0 1.7

Anpario plc

2

276 1,553 1,829 3,786 196 134.8 Health Care 1.7 1.5

Angle plc

1

- 1,615 1,615 3,618 989 263.4 Health Care 0.0 1.5

Velocys plc

1

- 2,248 2,248 3,439 (552) 88.8 Energy 0.0 1.4

Sosandar plc

1

- 1,872 1,872 3,245 1,529 57.6 Consumer 0.0 1.3

Discretionary

Northcoders Group plc

1

- 1,800 1,800 3,040 1,240 21.1 Consumer 0.0 1.2

Discretionary

Largest twenty investments 71,089 150,394 60.9

Amati AIM VCT plc

Annual Report & Financial Statements 2022

14

Original

Amati VCT Fair value

bookcost at Aggregate movement Market Dividend %

4 May 2018

#

Cost* Cost** Valuation in year Cap FTSE Yield

NTM

of net

Company name £'000 £'000 £'000 £'000 £'000 £m Sector % assets

Flylogix Limited Ordinary shares - 3,000 3,000 3,000 - - Information 0.0 1.2

& 10% Convertible loan notes

1,4

Technology

Arecor Therapeutics plc

1

- 1,900 1,900 2,943 1,042 97.4 Health Care 0.0 1.2

Amryt Pharma plc ADR

1,3

- 1,607 1,607 2,135 528 646.7 Health Care 0.0 0.9

Amryt Pharma plc Contingent - - - 711 (21) - Health Care 0.0 0.3

Value Rights (“CVRs”)

3

Quixant plc

2

419 3,777 4,196 2,684 418 102.3 Consumer 1.0 1.1

Discretionary

Ilika plc

1

131 646 777 2,677 (1,830) 219.6 Industrials 0.0 1.1

Synairgen plc

1

- 478 478 2,639 467 388.8 Health Care 0.0 1.1

Glantus Holdings plc

1

- 3,000 3,000 2,500 (500) 32.2 Financials 0.0 1.0

Intelligent Ultrasound plc

1

- 1,625 1,625 2,460 238 42.0 Health Care 0.0 1.0

Ixico plc

1

- 1,409 1,409 2,415 (1,711) 23.1 Health Care 0.0 1.0

Brooks Macdonald Group plc

2

- 1,154 1,154 2,289 622 411.2 Financials 3.4 0.9

Getech Group plc

1

- 1,700 1,700 2,272 572 19.7 Energy 0.0 0.9

Solid State plc

2

259 261 520 2,192 889 90.6 Industrials 1.8 0.9

Diaceutics plc

1

- 1,557 1,557 2,172 (697) 89.1 Health Care 0.0 0.9

Fusion Antibodies plc

1

565 1,779 2,344 2,154 (421) 23.9 Health Care 0.0 0.9

Belvoir Group plc

1

404 379 783 2,030 677 95.1 Real Estate 3.3 0.8

Elexsys Energy Ordinary shares - 2,000 2,000 2,000 - - Information 0.0 0.8

& 8% Convertible loan notes

1,4

Technology

Science in Sport plc

2

811 1,145 1,956 1,979 750 89.2 Consumer Staples 0.0 0.8

Eneraqua plc

1

- 1,955 1,955 1,821 (134) 85.7 Industrials 0.0 0.7

Verici Dx Limited

1

- 800 800 1,800 (1,200) 63.8 Health Care 0.0 0.7

SRT Marine Systems plc

1

709 465 1,174 1,733 308 73.9 Information 0.0 0.7

Technology

Accesso Technology Group plc

1,3

- 221 221 1,659 752 309.5 Information 0.0 0.7

Technology

Creo Medical Group plc

1,3

- 1,613 1,613 1,522 (1,084) 213.6 Health Care 0.0 0.6

Hardide plc

1

695 2,361 2,361 1,492 136 18.4 Materials 0.0 0.6

Rosslyn Data Technologies plc

1

614 1,308 1,922 1,199 (1,305) 11.6 Information 0.0 0.5

Technology

One Media iP Group plc

1

- 1,240 1,240 1,151 - 14.5 Financials 0.0 0.5

Equals Group plc

1

- 1,137 1,137 1,130 654 136.3 Information 0.0 0.5

Technology

Property Franchise Group plc (The)

2

155 197 352 926 378 100.6 Real Estate 3.3 0.4

Byotrol plc

1

511 348 859 925 (700) 16.8 Materials 0.0 0.4

Eden Research plc

1

- 857 857 893 (1,077) 23.8 Materials 0.0 0.4

Kinovo plc

2

676 1,005 1,681 862 280 24.9 Industrials 0.0 0.3

Falanx Group Limited

1

- 1,657 1,657 805 (167) 5.3 Industrials 0.0 0.3

Rua Life Sciences plc

1

- 1,690 1,690 775 (1,504) 12.2 Health Care 0.0 0.3

Investment Portfolio (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

15

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Strategic Report

Highlights

Original

Amati VCT Fair value

bookcost at Aggregate movement Market Dividend %

4 May 2018

#

Cost* Cost** Valuation in year Cap FTSE Yield

NTM

of net

Company name £'000 £'000 £'000 £'000 £'000 £m Sector % assets

In Style Group plc

1

- 1,667 1,667 750 (917) 47.2 Consumer 0.0 0.3

Discretionary

Trellus Health plc

1,3

- 700 700 648 (53) 59.8 Health Care 0.0 0.3

Zenova Group plc

1

- 750 750 592 (158) 14.0 Materials 0.0 0.2

Block Energy plc

1

- 3,000 3,000 588 (895) 7.5 Energy 0.0 0.2

Netcall plc

2

- 110 110 428 92 104.8 Information 0.6 0.2

Technology

Brighton Pier Group plc (The)

1

314 175 489 337 235 33.2 Consumer 0.0 0.1

Discretionary

MyCelx Technologies Corporation

1

440 205 645 295 206 14.2 Industrials 0.0 0.1

Velocity Composites plc

1

496 307 803 230 35 7.3 Industrials 0.0 0.1

LoopUp Group plc

1

476 2,027 2,503 135 (545) 14.1 Information 0.0 0.1

Technology

Synectics plc

2

- 342 342 123 (27) 16.0 Information 1.3 -

Technology

FireAngel Safety Technology Group plc

1

- 690 690 91 (28) 26.3 Consumer 0.0 -

Discretionary

Bonhill Group plc

1

- 670 670 84 8 9.9 Communication 0.0 -

Services

Allergy Therapeutics plc

1

- 29 29 66 19 160.9 Health Care 0.0 -

Merit Group plc

1

- 596 596 31 (23) 10.3 Communication 0.0 -

Services

Investments held at nil value 1,954 - - -

Total investments 135,562 214,737 86.9

Net current assets 32,337 13.1

Net assets 135,562 247,074 100.0

1 Qualifying holdings.

2 Part of holding qualifying, part is non-qualifying.

3 These investments are also held by other funds managed by Amati.

4 The investments of Ordinary Shares and Convertible loan notes:

Flylogix Limited (“Flylogix”)

Consists of 392 Ordinary Shares in Flylogix at fair value of £300,000 and 10% Convertible Loan Notes at £2,700,000. The interest for 18 months from the date of

issue on the Convertible Loan Notes is waived if Flylogix is admitted to AIM within that 18-month period, subject to a minimum equity raise of £10m. The Convertible

Loan Notes are convertible into Ordinary Shares after listing. If Flylogix is not listed on AIM, interest is payable at 10% per annum for a term of 5 years. The Board are

of the opinion Flylogix will list on AIM and the interest receivable of £66,000 to the Balance Sheet has therefore not been accrued.

Elexys Energy plc (“Elexys”)

Consists of 202,737 Ordinary Shares in Elexys at fair value of £200,000 and 8% Convertible Loan Notes at £1,800,000. The interest for the year from the date of issue

on the Convertible Loan Notes is waived if Elexys is admitted to AIM, subject to a minimum equity raise of £5m. The Convertible Loan Notes are convertible into

Ordinary Shares after listing. If Elexys is not listed on AIM, interest is payable at 8% per annum for a term of 5 years. The Board are of the opinion Elexys will list in the

next 12 months and the interest receivable of £48,000 to the Balance Sheet date has not been accrued.

# This column shows the original book cost of the investments acquired from Amati VCT plc (“AVCT”) on 4 May 2018.

* This column shows the book cost to the Company as a result of market trades and events or asset acquisition.

** This column shows the aggregate bookcost to the Company either as a result of market trades and events or asset acquisition.

NTM The Manager rebates the management fee of 0.75% on the TB Amati UK Smaller Companies Fund and this is included in the yield.

All holdings are in ordinary shares unless otherwise stated.

Investments held at nil value: Celoxica Holdings plc¹, Leisurejobs.com Limited¹ (previously Sportweb.com), Polyhedra Group plc¹, Rated People Limited¹, Sorbic International

plc, TCOM Limited¹ and VITEC Global Limited¹.

As at the year end, the percentage of the Company’s portfolio held in qualifying holdings for the purposes of Section 274 of the Income and Corporation Taxes Act 2007

was 90.01%.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

16

Health care

Information

Technology

Consumer

Discretionary

Industrials

Comm-

unication

Services

Energy

Consumer

Staples

Matertials

Financials

Real Estate

Cash

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2021

2022

2,500

2,000

1,500

1,000

500

0

Market Capitalisation (£m)

%

0

5

10

15

20

25

30

Polarean

Imaging

Saietta

Keywords

GB Group

Learning

Technologies

Ideagen

Tristel

Frontier

Developments

AB

Dynamics

Water

Intelligence

Polarean

Imaging

Saietta

Water

Intelligence

Qualifying portfolio

The portfolio of qualifying investments in the

Company as at 31 January 2022 is analysed in the

graph below by date of initial investment and market

capitalisation. The size of the circles represents the

relative size of the holdings in the portfolio by value.

The top ten qualifying portfolio companies are

labelled. The dates of investments in securities

held solely by Amati VCT plc prior to the merger

with Amati VCT 2 plc in May 2018, are given as

the dates those securities were originally

acquired by Amati VCT plc.

Sector split

The portfolio of investments in the Company as at 31

January 2022 is analysed in the graph below by

sector. This includes a sector split of the investments

Source:

Amati Global Investors

as at 31 January 2022

within the TB Amati UK Smaller Companies Fund

which in the Investment Portfolio table on pages

13 to 15 is classed as Financials.

Analysis as at 31 January 2022

Investment Portfolio (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

17

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Strategic Report

Highlights

Company Objectives

The objectives of the Company are to generate tax free

capital gains and regular dividend income for its

shareholders while complying with the requirements of

the rules and regulations applicable to VCTs.

Investment Policy

The Company’s policy is to hold a diversiﬁed portfolio

across a broad range of sectors to mitigate risk. It

makes Qualifying Investments (as deﬁned in the Income

Tax Act 2007 (as amended)) in AIM-traded companies

and non-Qualifying Investments as allowed by the VCT

legislation. The Company manages its portfolio to

comply with the requirements of the rules and

regulations applicable to VCTs.

Investment Parameters

Whilst the objective is to make Qualifying Investments

primarily in companies traded on AIM or on the Aquis

stock exchange (“Aquis”), the Company may also make

Qualifying Investments in companies likely to seek a

quotation on AIM or Aquis. With regard to the non-

qualifying portfolio the Company makes investments

which are permitted under the VCT regulations,

including shares or units in an Alternative Investment

Fund (AIF) or an Undertaking for Collective Investment

in Transferable Securities (UCITS) fund, and shares in

other companies which are listed on a regulated market

such as the Main Market of the London Stock Exchange.

For continued approval as a VCT under the ITA the

Company must, within three years of raising funds,

maintain at least 80% of its value (based on cost price,

or last price paid per share if there is an addition to the

holding) in qualifying investments. 30% of new funds

raised in accounting periods beginning after 5 April

2018 are to be invested in qualifying holdings within 12

months of the accounting period following the issuance

of shares. Any investments by the Company in shares

or securities of another company must not represent

more than 15% of the Company's net asset value at the

time of purchase.

Borrowing

The Company has the ﬂexibility to borrow money up to

an amount equal to its adjusted capital and reserves

but the Board’s policy is not to enter into borrowings.

Investment Strategy for Achieving Objectives

The investment strategy for achieving the Company

Objectives which follows is not part of the formal

Investment Policy. Any material amendment to the

formal Investment Policy may only be made with

shareholder consent, but that consent applies only to

the formal Investment Policy above and not to any part

of the Strategy for Achieving Objectives or Key

Performance Indicators below.

(a) Qualifying Investments Strategy

The Company is likely to be a long-term investor in

most Qualifying Investments, with sales generally

only being made where an investment case has

deteriorated or been found to be ﬂawed, or to

realise proﬁts, adjust portfolio weightings, fund

new investments or pay dividends. Construction of

the portfolio of Qualifying Investments is driven by

the historic investments made by the Company

and by the availability of suitable new investment

opportunities. The Manager may co-invest in

companies in which other funds managed by

Amati Global Investors invest.

(b) Non-Qualifying Investments Strategy

The assets of the portfolio which are not in

Qualifying Investments will be invested by the

Manager on behalf of the Company in investments

which are allowable under the rules applicable to

VCTs. Currently, cash not needed in the short term

is invested in a combination of the following

(though ensuring that no more than 15% of the

Company’s funds are invested in any one entity at

the time of purchase):

(i) the TB Amati UK Smaller Companies Fund

(which is a UCITS fund), or other UCITS funds

approved by the Board;

(ii) direct equity investments in small and mid-

sized companies and debt securities in each

case listed on the Main Market of the London

Stock Exchange; and

(iii) cash or cash equivalents (including money

market funds) which are redeemable within 7

days.

Investment Policy, Company Objectives

and Investment Strategy

Amati AIM VCT plc

Annual Report & Financial Statements 2022

18

Environmental, Social and Governance (“ESG”)

Policies

The Investment Manager recognises that managing

investments on behalf of clients involves taking into

account a wide set of responsibilities in addition to

seeking to maximise ﬁnancial returns for investors.

Industry practice in this area has been evolving rapidly

and Amati has been an active participant in seeking to

deﬁne and strengthen its principles accordingly. This

involves both integrating ESG considerations into the

Investment Manager’s investment decision-making

process as a matter of course, and also signing up to

major external bodies who are leading inﬂuencers in the

formation of industry best practice. The following is an

outline of the kinds of ESG factors that the Investment

Manager will take into account as part of its investment

process, reﬂecting the speciﬁc inputs and outputs of a

business.

• Environmental – climate change; use of natural

resources; pollution; waste and impact on

bio-diversity; and taking into account any positive

environmental impacts.

• Social – use of human capital; potential product

or service liabilities; stakeholder opposition; and

taking into account any positive social

considerations.

• Governance – ownership and control;

management structure and quality; pay and

alignment; accounting issues; business ethics;

and tax transparency.

• Human rights – weighing up the risks of activities

in countries with Freedom House Scores below 33

and based on Clean Trade principles; not investing

in companies extracting natural resources in

countries which score below 15; risk of exposure to

corruption and unreliable legal frameworks; risk of

beneﬁting from slave labour; risk from adverse

political developments impacting a business

negatively.

Board Diversity of Investee Companies

The Board, through the Manager, considers Board

diversity to be an important consideration in its

investment decision on investee companies.

Key Performance Indicators

The Board expects the Manager to deliver a

performance which meets the objectives of the

Company. A review of the Company’s performance

during the ﬁnancial year, the position of the Company

at the year end and the outlook for the coming year is

contained in the Chairman’s Statement and Fund

Manager’s Review. The Board monitors on a regular

basis a number of key performance indicators which

are typical for VCTs, the main ones being:

• Compliance with HMRC VCT regulations to

maintain the Company’s VCT Status. See page 28;

• Net asset value and total return to shareholders

(the aggregate of net asset value and cumulative

dividends paid to shareholders, assuming

dividends re-invested at ex-dividend date). See

graphs on page 3;

• Comparison against the Numis Alternative

Markets Total Return Index. See graph on page 47;

• Dividend distributions. See table of investor returns

on page 2;

• Share price. See key data on page 1; and

• Ongoing charges ratio. See key data on page 1.

Investment Policy, Company Objectives

and Investment Strategy (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

19

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Strategic Report

Highlights

Management Agreement

Amati Global Investors was appointed as Manager to

the Company on 19 March 2010. Under an Investment

Management and Administration Agreement dated 19

March 2010, and subsequently revised and updated in

two separate agreements, an Investment Management

Deed (“IMA”) and a Fund Administration, Secretarial

Services and Fund Accounting Agreement (“FASSFAA”),

on 30 September 2019, the Manager agreed to

manage the investments and other assets of the

Company on a discretionary basis subject to the overall

policy of the Directors. The Company will pay to the

Manager under the terms of the IMA a fee of 1.75% of

the net asset value of the Company quarterly in arrears.

In November 2014, with shareholder consent, the

Company amended its non-qualifying investment policy

to permit investment in the TB Amati UK Smaller

Companies Fund, a small and mid-cap fund managed

by the Manager. The Company receives a full rebate on

the fees payable by the Company to the Manager

within this fund either through a reduction of fees

payable by the Company or a direct payment by the

Manager.

Annual running costs are capped at 3.5% of the

Company’s net assets, any excess being met by the

Manager by way of a reduction in future management

fees. The annual running costs include the Directors’

and Manager’s fees, professional fees and the costs

incurred by the Company in the ordinary course of its

business (but excluding any commissions paid by the

Company in relation to any offers for subscription,

irrecoverable VAT and exceptional costs, including

winding-up costs). No performance fee is payable as

the Manager waived all performance fees from 31 July

2014 onwards.

Administration Arrangements

Under the terms of the FASSFAA, the Investment

Manager also agreed to provide certain fund

administration, company secretarial and fund

accounting services to the Company. The Company

agreed to pay to the Investment Manager a fee of

£92,800 (subject to an annual increase in line with the

retail prices index) quarterly in arrears in respect of the

provision of these services. With effect from 1 February

2021 the annual increase will be in line with the

consumer prices index. The appointment of the

Investment Manager as investment manager and/or

administrator, company secretary and fund accountant

may be terminated with twelve months’ notice. Where

the Investment Manager negotiates and structures an

investment directly with a company, most commonly as

a convertible loan, the Investment Manager retains the

right to charge the investee company a fee. Any legal

expenses incurred by the Investment Manager will be

paid out of this fee.

Under the FASSFAA, the Manager has the right to

appoint suitable representatives to provide

administration, secretarial and fund accounting services

to the Company. The Manager engaged The City

Partnership (UK) Limited to act as company secretary

and Link Alternative Fund Administrators Limited to act

as fund administrator and accountant.

During the year the Manager and Board agreed that a

new Company Secretary would be sought with whom

the Company would contract directly. Law Debenture

were appointed as Company Secretary of the Company

from 1 February 2022.

Fund Manager’s Engagement

The Board regularly appraises the performance and

effectiveness of the managerial, administration and

secretarial arrangements of the Company. As part of

this process, the Board will consider the arrangements

for the provision of investment management and other

services to the Company on an ongoing basis and a

formal review is conducted annually. In the opinion of

the Board, the continuing appointment of the Manager,

on the terms agreed, is in the interests of the

shareholders. The Directors are satisﬁed that the

Manager will continue to manage the Company in a

way which will enable the Company to achieve its

objectives.

VCT Status Adviser

Philip Hare & Associates LLP (“Philip Hare &

Associates”) is engaged to advise the Company on

compliance with VCT requirements. Philip Hare &

Associates review new investment opportunities, as

appropriate, and review regularly the investment

portfolio of the Company. Philip Hare & Associates

work closely with the Manager but report directly to the

Board.

Fund Management and Key Contracts

Amati AIM VCT plc

Annual Report & Financial Statements 2022

20

Principal and Emerging Risks

Potential Risk Potential Impact Mitigation

Investment Risk A substantial portion of the Company’s

investments are in small AIM traded

companies as well as some unquoted

companies. By their nature these

investments involve a higher degree of

risk than investments in larger fully listed

companies. These companies tend to

have limited product lines and niche

markets. They can be reliant on a few key

individuals. They can be dependent on

securing further ﬁnancing. With the

changes to VCT regulations introduced in

the Finance Act 2018 focusing investment

in knowledge based companies, newer

investments may well be made at an

earlier stage in the lifecycle and may result

in a reduced exposure to asset based

businesses leading to increased volatility

in the value of an investee company’s

shares. Further, the majority of the new

investments will be in companies which

have invested in developing and

commercialising intellectual property,

which brings with it the risk that another

company might develop superior

technology, or that the commercialisation

strategy may fail. In addition, the liquidity

of these shares can be low and the share

prices volatile.

To reduce the risk, the Board places

reliance upon the skills and expertise of

the Manager and its strong track record

for investing in this segment of the

market. Investments are actively and

regularly monitored by the Manager and

the Board receives detailed reports on

the portfolio in addition to the Manager’s

report at regular Board meetings. The

Manager also seeks to limit these risks

through building a diversiﬁed portfolio

with companies in different areas within

sectors and markets at different stages

of development.

Investments in unquoted companies in

particular are subject to strict controls

and investment limits in recognition of

the signiﬁcant risks involved. In relation

to investments of this nature there is an

expectation that the investee company

will seek admission to AIM within two

years of the initial investment, in order to

de-risk the investment, to the extent

that this is possible, within an

acceptable time frame.

The Audit Committee regularly reviews the Company’s

risk register, which assesses each risk and classiﬁes the

likelihood of the risk and the potential impact of each risk

on the Company. The Board considers that the Company

faces the following major risks and uncertainties:

Amati AIM VCT plc

Annual Report & Financial Statements 2022

21

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Strategic Report

Highlights

Potential Risk Potential Impact Mitigation

Compliance Risk The Company has a premium listing on

the London Stock Exchange and is

required to comply with the rules of the

UK Listing Authority, as well as with the

Companies Act, Financial Reporting

Standards and other legislation. Failure to

comply with these regulations could result

in a delisting of the Company’s shares, or

other penalties under the Companies Acts

or from ﬁnancial reporting oversight

bodies.

The Alternative Investment Fund

Managers (Amendment etc.) (EU Exit)

Regulations 2019 (“AIFMD”) is a directive

affecting the regulation of VCTs. Amati

AIM VCT has been entered in the register

of small, registered UK AIFMs on the

Financial Services register at the Financial

Conduct Authority (“FCA”). As a registered

ﬁrm there are a number of regulatory

obligations and reporting requirements

which must be met in order to maintain its

status as an AIFM.

Board members and the Manager have

considerable experience of operating at

senior levels within quoted businesses.

In addition, the Board and the Manager

receive regular updates on new

regulations from the auditor, lawyers,

the Company Secretary and other

professional bodies.

Venture Capital Trust

Approval

Risk

The current approval as a venture

capital trust allows investors to take

advantage of income tax reliefs on initial

investment and ongoing tax-free capital

gains and dividend income. Failure to

meet the qualifying requirements could

result in investors losing the income tax

relief on initial investment and loss of

tax relief on any tax-free income or

capital gains received. In addition, failure

to meet the qualifying requirements

could result in a loss of listing of the

shares.

A sunset clause was put in place in the

VCT regime to secure ongoing EU

approval at the time of the UK’s

departure from the European Union. At

present it is not clear whether the UK

Treasury will take action to amend the

legislation to extend or remove the date

of the sunset clause. Without an

extension or removal there would be no

initial income tax relief for new

subscriptions after 5 April 2025. The

absence of upfront tax relief may limit

VCTs’ ability to raise funds.

To reduce this risk, the Board has

appointed the Manager which has

signiﬁcant experience in venture capital

trust management and is used to

operating within the requirements of the

venture capital trust legislation. In

addition, to provide further formal

reassurance, the Board has appointed

Philip Hare & Associates as VCT Status

Adviser to the Company. Philip Hare &

Associates reports every six months to

the Board to conﬁrm compliance with

the venture capital legislation, to

highlight areas of risk and to inform on

changes in legislation independently.

Other tax reliefs such as tax-free

dividends and exemption from capital

gains tax would remain unaffected by

the sunset clause. VCT boards and their

managers are actively liaising with the

UK Treasury to encourage the

addressing of this issue.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

22

Principal and Emerging Risks (continued)

Economic Risk Events such as economic recession, not

only in the UK, but also in the core markets

relevant to our investee companies,

together with a movement in interest

rates, can affect investor sentiment

towards liquidity risk, and hence have a

negative impact on the valuation of

smaller companies. The economic future

for the UK and the wider world would

appear to be as uncertain as it has ever

been in the last few decades. Actual war

in Europe and the possibility of war in the

East combine to give grave concern for the

future. This follows two years of the

Covid-19 pandemic and the ensuing

impacts on the UK and global economies

where government debt has not been as

high as it is now since World War 2.

Government actions to deal with Covid-19

and to boost the economy during the

pandemic now result in rising inﬂation and

therefore interest rates, the impacts on the

The Manager seeks to mitigate

economic risk by seeking to adopt a

suitable investment style for the current

point in the business cycle, and to

diversify the exposure to geographic

end markets.

Potential Risk Potential Impact Mitigation

Internal Control Risk Failures in key controls within the Board or

within the Manager’s business could put

assets of the Company at risk or result in

reduced or inaccurate information being

passed to the Board or to shareholders.

Inadequate or failed controls might result

in breaches of regulations or loss of

shareholder trust. The Manager operates

a robust risk management system which

is reviewed regularly to ensure the

controls in place are effective in reducing

or eliminating risks to the Company.

Details of the Company’s internal controls

are on page 42.

The Board seeks to mitigate the internal

control risk by setting policy, regular

reviews of performance, enforcement of

contractual obligations and monitoring

progress and compliance.

Financial Risk By its nature, as a venture capital trust,

the Company is exposed to market price

risk, credit risk, liquidity risk, interest rate

risk and currency risk.

The Company’s policies for managing

these risks are outlined in full in notes 15

to 18 to the ﬁnancial statements on

pages 71 to 73. The Company is

ﬁnanced through equity.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

23

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Strategic Report

Highlights

Potential Risk Potential Impact Mitigation

Economic Risk

(continued)

cost of living being exacerbated by rising

energy prices caused by poor Government

energy policy decision making in the rush

to go green, reliance for energy supplies

on countries with corrupt regimes and the

impact of the Russian invasion into

Ukraine. The Covid-19 pandemic and the

measures taken to control the outbreak

had already led to volatility in stock

markets and other ﬁnancial markets in the

UK and a downturn in the UK economy.

The future development and long-term

impacts of the outbreak are unknown.

Despite a permanent trade agreement

between the UK and EU and the end of

the transition period on 31 December

2020 there remains uncertainty and

potential volatility in markets and for the

economy while practicalities are

addressed.

Operational Risk Failure of the Manager’s, or other

contracted third parties’, accounting

systems or disruption to their businesses

might lead to an inability to provide

accurate reporting and monitoring or loss

to shareholders.

The Manager regularly reviews the

performance of third-party suppliers at

monthly management meetings and the

Board consider at quarterly board

meetings.

Concentration Risk Although the Company has a diversiﬁed

portfolio of investments the ten largest

investments account for almost half of the

total investments. A material fall in any

one investment can have a signiﬁcant

impact on the overall net asset value.

Portfolio weighting limits apply to the

portfolio’s largest holdings such that no

holding is allowed to approach a size of

10% of the portfolio, with action

normally taken well before that level

particularly where the shares have

become overbought with no underlying

earnings justiﬁcation.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

24

As an externally managed investment company, the

Company does not have employees. Its main

stakeholders therefore comprise the shareholders, the

Investment Manager, other service providers and

investee companies.

To ensure that the Directors are aware of, and

understand, their duties they are provided with a

tailored induction, including details of all relevant

regulatory and legal duties as a Director of a UK public

limited company when they ﬁrst join the Board, and

continue to receive regular and ongoing updates and

training on relevant legislative and regulatory

developments.

They also have continued access to the advice and

services of the Company Secretary, and when deemed

necessary, the Directors can seek independent

professional advice. The Terms of Reference of the

Board’s committees are reviewed periodically and

describe the Directors’ responsibilities and obligations

and include any statutory and regulatory duties.

This section sets out the Company’s Section 172

Statement and should be read in conjunction with the

other contents of the Strategic Report. The Directors

have a duty to promote the success of the Company for

the beneﬁt of its members as a whole and in doing so

to have regard to a number of matters including:

• the likely consequences of any decision in the long

term;

• the interests of the Company’s employees;

• the need to foster business relationships with

suppliers, customers and others;

• the impact of the company’s operations on the

community and the environment;

• the desirability of the Company maintaining a

reputation for high standards of business conduct;

and

• the need to act fairly between members of the

Company.

Section 172 Statement

Directors’ Duty to Promote the Success

of the Company

Stakeholder Importance Board Engagement

Shareholders Continued shareholder support and

engagement are critical to the continuing

existence of the business and its future

growth.

The Board places great importance on

communication with its shareholders and

encourages shareholders to attend the

AGM and an annual investor event and

welcomes communication from

shareholders as described more fully on

pages 39 to 40 in the Statement of

Corporate Governance.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

25

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Stakeholder Importance Board Engagement

Investment Manager The Manager’s performance is

fundamental for the Company to

successfully deliver its investment

strategy, meet its investment objective

and its long-term success.

The Board’s decisions are intended to

achieve the Company’s objective to

generate tax free capital gains and

income on investors’ funds and

maintaining the Company’s status as a

VCT is a critical element of this. The Board

regularly monitors the Company’s

performance in relation to its investment

objectives and seeks to maintain a

constructive working relationship with the

Manager.

Representatives of the Manager attend

each quarterly board meeting and provide

an update on the investment portfolio

along with presenting on macro-economic

issues. The Board also expects good

standards at the companies within which

the Company is invested and, as

described on page 27, the Manager was a

Tier 1 signatory to the 2012 UK

Stewardship Code and in March 2022 has

been accepted as a signatory to the 2020

UK Stewardship Code. The Manager is

also a signatory to the Principles for

Responsible Investment.

Other service providers,

including:

The registrar, the

receiving agent, the tax

adviser, the auditor, the

lawyers, the Company

Secretary and the Fund

Accountant

In order to function as an investment

trust with a premium listing on the

London Stock Exchange, the Company

engages a diverse and experienced

range of advisors for support with

meeting all relevant obligations.

The Board maintains regular contact with

its key external service providers, and the

quality of the provision of these services is

considered by the Board at Board

meetings.

Investee companies The Company’s performance is directly

linked to the performance of its

underlying investee companies and

accordingly communication with those

entities is regarded as very important.

The Manager does not have board

representation in any investee company

but does interact with Directors and senior

management of investee companies

regularly.

The Board’s primary focus in promoting

the long-term success of the Company for

the beneﬁt of the members as a whole is

to direct the Company with a view to

achieving the investment objective in a

manner consistent with its stated

investment policy and strategy.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

26

Section 172 Statement

Directors’ Duty to Promote the Success

of the Company (continued)

Key decision making

The mechanisms for engaging with stakeholders are

kept under review by the Directors and discussed at

Board meetings to ensure they remain effective. The

Board has policies for dividends, share buybacks and

the dividend re-investment scheme, all of which it is

considered are for the beneﬁt of shareholders. During

the year the Directors discussed these and re-afﬁrmed

their commitment to the policies. Examples of the

Board’s principal decisions during the year, and how

the Board fulﬁlled its duties under Section 172, are set

out below:

Principal Decision Long-term impact Stakeholder Engagement

To issue new shares in the

Company

Issuing new shares allows the Company

to increase its liquidity, and the successful

investment of the capital raised in new

issuances will promote growth in the

Company’s NAV.

The Board considered the direction and

future aims of the Company and the desire

to continue to invest in growth businesses

with the aim of beneﬁting all stakeholders.

A key part of that is fundraising, to provide

new funds for investment in new or

existing investee companies (where

allowed by VCT regulations). Aligned with

this is the need to maintain sufﬁcient cash

balances to be able to take advantage of

investment opportunities, to maintain

stable and predictable dividends for

investors, and to provide liquidity for

shareholders by facilitating buybacks.

Following the successful prospectus offer

that was launched in July 2021 and which

raised £40m, the Board decided to re-

open the Offer in February 2022 using the

over-allotment facility owing to the strong

demand seen from investors and raised its

full £25m. This decision was taken on the

basis of the deployment of funds and the

pipeline of investment opportunities.

A resolution giving the Directors the

authority to allot shares is voted upon by

shareholders at the AGM each year and

receives a high level of support from

shareholders. Given the high demand seen

for the latest Offer, a General Meeting was

convened and held on 2 March 2022 at

which shareholders again voted in favour

of giving the Board authority to allot

further shares.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

27

Principal Decision Long-term impact Stakeholder Engagement

To make new

appointments to

the Board

Continuing to develop and evolve the

Board, so that it contains an appropriate

mix of skills, diversity and experience is

important to promote the long-term

success of the Company.

During the year, the Board was pleased to

appoint Fiona Wollocombe as a non-

executive director. She brings signiﬁcant

VCT experience to the Board. Fiona’s

appointment is made to promote the best

long-term interests of the Company.

Environmental, Social and Governance (“ESG”)

Policies, and Responsible Ownership

The Company has no employees and no premises and

the Board has decided that the direct impact of its

activities is minimal; therefore it has no policies relating

to social, community and human rights issues. The

Company’s indirect impact occurs through the range of

organisations in which it invests and for this it follows a

policy of Responsible Ownership.

In terms of external validation and support, Amati

Global Investors, the Manager, was a Tier 1 signatory to

the 2012 UK Stewardship Code and in March 2022 has

been accepted as a signatory to the 2020 UK

Stewardship Code which aims to enhance the quality of

engagement between investors and companies to help

improve long-term risk adjusted returns to

shareholders. Amati’s approach to Stewardship and

Shareholder Engagement can be found at

https://www.amatiglobal.com/storage/644/Stewardship

_and_Shareholder_Engagement-v2.pdf. Amati is also a

signatory to the UN-supported Principles for

Responsible Investment (PRI), which works to support

its international network of signatories in incorporating

ESG factors into their investment and ownership

decisions. The PRI acts in the long-term interests of its

signatories, of the ﬁnancial markets and economies in

which they operate and ultimately of the environment

and society as a whole.

Voting on portfolio investments

In 2021 the Manager voted in respect of 48 Amati AIM

VCT holdings at 69 company meetings on a range of

ESG issues.

Business Conduct

The Board takes its responsibility to prevent bribery

very seriously and has a zero-tolerance policy towards

bribery. It has committed to carry out all business in an

honest and ethical manner and to act professionally,

fairly and with integrity in all its business dealings and

relationships. The Manager has its own anti-bribery

and corruption policy.

Global Greenhouse Gas Emissions

The Company is a low energy user and is therefore

exempt from the reporting obligations under the

Companies Act 2006 (Strategic Report and Directors’

Report) Regulations 2013 or the Companies (Directors’

Report) and Limited Liability Partnerships (Energy and

Carbon Report) Regulations 2018, implementing the

UK Government’s policy on Streamlined Energy and

Carbon Reporting. The Company has no greenhouse

gas emissions or energy consumption to report from the

operations of the Company, nor does it have

responsibility for any other emission producing sources.

Under listing rule 15.4.29(R), the Company, as a closed

ended investment fund, is currently exempt from

complying with the Task Force on Climate related

Financial Disclosures.

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Amati AIM VCT plc

Annual Report & Financial Statements 2022

28

VCT Regulations

The Company’s investment policy is designed to ensure

that it meets the requirements of HM Revenue &

Customs to qualify and to maintain approval as a VCT:

(i) The Company must, within three years of raising

funds, maintain at least 80% of its investments by

VCT value (cost, or the last price paid per share, if

there is an addition to the holding) in shares or

securities comprised in qualifying holdings (this

percentage rose from 70% to 80% for accounting

periods beginning on or after 6 April 2019 which

for the Company was from 1 February 2020). At

least 70% by VCT value must be ordinary shares

which carry no preferential rights. A further

condition requires that 30% of new funds raised in

accounting periods beginning after 5 April 2018

are to be invested in qualifying holdings within 12

months of the accounting period following the

issuance of shares;

(ii) The Company may not invest more than 15% of its

investments in a single company and it must have

at least 10% by VCT value of its total investments

in any qualifying company in qualifying shares

approved by HM Revenue & Customs;

(iii) To be classed as a VCT qualifying holding,

companies in which investments are made must

have no more than £15 million of gross assets at

the time of investment and £16 million after

investment; they must be carrying on a qualifying

trade and satisfy a number of other tests including

those outlined below; the investment must also be

made for the purpose of promoting growth or

development;

(iv) VCTs may not invest new capital in a company

which has raised in excess of £5 million (£10

million from 6 April 2018 if the company is deemed

to be a Knowledge Intensive Company) from all

sources of state-aided capital within the 12

months prior to and including the date of

investment;

(v) No investment may be made by a VCT in a

company that causes that company to receive

more than £12 million (£20 million if the company

is deemed to be a Knowledge Intensive Company)

of state aid investment (including from VCTs) over

the company’s lifetime. A subsequent acquisition

by the investee company of another company that

has previously received State Aid Risk Finance can

cause the lifetime limit to be exceeded;

(vi) No investment can be made by a VCT in a

company whose ﬁrst commercial sale was more

than 7 years prior to date of investment, except

where previous State Aid Risk Finance was

received by the company within 7 years (10 years

in each case for a Knowledge Intensive Company)

or where both a turnover test is satisﬁed and the

money is being used to enter a new product or

geographical market;

(vii) No funds received from an investment into a

company can be used to acquire another existing

business or trade;

(viii) Since 6 April 2016 a VCT must not make “non-

qualifying” investments except for certain speciﬁed

investments held for liquidity purposes and

redeemable within seven days. These include

investments in UCITS (Undertakings for Collective

Investments in Transferable Securities) funds, AIF

(Alternative Investment Funds) and in shares and

securities purchased on a Regulated Market. In

each of these cases the restrictions in (iii) – (vii)

above are not applied; and

(ix) Non-qualifying investments in AIM-quoted shares

are not permitted as AIM is not a Regulated

Market.

During 2018, HMRC stopped issuing pre-clearance

letters for VCT investments. They are encouraging VCTs

not to use the advance assurance service for

investments and have stated that where a VCT has

taken reasonable steps to ensure an investment is

qualifying, the VCT status will not be withdrawn where

an investment is ultimately found to be non-qualifying.

The Manager and the Board rely on advice from Philip

Hare & Associates regarding the qualifying status of

new investments. The Manager monitors compliance

with VCT qualifying rules on a day-to-day basis

through a combination of automated and manual

compliance checks in place within the business. Philip

Hare & Associates also review the portfolio bi-annually

to ensure the Manager has complied with regulations

and has reported to the Board that the VCT has met the

necessary requirements during the year.

Other Matters

Amati AIM VCT plc

Annual Report & Financial Statements 2022

29

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

PRIIPs Regulations

The Company is required to publish a Key Information

Document (KID), which sets out the key features, risks,

potential future performance and costs of PRIIPs

(Packaged Retail and Insurance-based Investment

Products). This document is available at the website of

Amati Global Investors: www.amatiglobal.com.

Statement on Long-term Viability

In accordance with the UK Corporate Governance Code

published in July 2018 (the “Code”), the Directors have

carried out a robust assessment of the prospects of the

Company for the period to January 2027, taking into

account the Company’s performance and emerging and

principal risks, and are of the opinion that, at the time of

approving the ﬁnancial statements there is a

reasonable expectation that the Company will be able

to continue in operation and meet liabilities as they fall

due over that period.

To come to this conclusion, the Manager prepares and

the Directors consider an income statement forecast for

the next ﬁve years which is considered to be an

appropriate time period due to its consistency with the

UK Government’s tax relief minimum holding period for

an investment in a VCT. This time frame allows for

reasonable forecasts to be made to allow the Board to

provide shareholders with reasonable assurance over

the viability of the Company. In making their

assessment the Directors have taken into account the

nature of the Company’s business and Investment

Policy, its risk management policies, the diversiﬁcation

of its portfolio, the cash holdings and the liquidity of

non-qualifying investments.

The Directors have considered in particular the likely

economic effects and the impacts on the Company’s

operations of the war taking place in Ukraine, rising

inﬂation and interest rates and the effects of the

COVID-19 pandemic.

The longer-term economic outlook is very difﬁcult to

predict but in considering preparing the long term

viability of the Company the Directors noted the

Company holds a portfolio of liquid investments and

cash balances whose value is a multiple of liabilities.

Other Disclosures

The Company had no employees during the year and

has ﬁve non-executive directors, two of whom are male

and three are female.

On behalf of the Board

Peter A. Lawrence

Chairman

12 April 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

30

Peter Lawrence – Chairman of the Board

In 2005, Peter was invited to join the board of Amati

VCT plc at its foundation, when it was then First State

Investments AIM VCT plc, going on to chair ﬁrst, Amati

VCT plc and then the Company after the merger with

Amati VCT plc in 2018. He was, until 31 March 2022,

chairman of Baronsmead Venture Trust plc and retired

on 17 June 2021 as chairman of Anpario plc, which is

traded on AIM. On 7 March 2019 he retired as chairman

of ECO Animal Health Group plc, an AIM-traded

company which he founded in 1972.

Relevant skills and experience:

Having ﬁrst joined a VCT board in 1999, Peter has a

comprehensive experience of the VCT and investment

trust sector. As an entrepreneur, he also has a sound

understanding of the growth steps facing the

Company’s investees. This has provided a strong basis

for assessing and where appropriate, challenging the

Manager on the Company’s performance and in leading

the Board in strategic discussions. Peter will be retiring

at this year’s AGM in June.

Julia Henderson – Non-Executive Director and

Chairman of the Nomination Committee

Julia Henderson joined the Board in May 2018. Prior to

this she was a non executive director of Amati VCT plc

which merged with the Company in May 2018. She has

specialised in advising quoted and unquoted companies

for over thirty years. Her corporate ﬁnance career began

at ANZ Merchant Bank after which she became a co-

founder and a director of Beeson Gregory Limited, a

mid-market investment bank. Since 2004 she has been

an independent consultant, chairman and non-

executive director to companies across a broad range of

sectors. Previous non-executive directorships include

Alkane Energy plc, ECO Animal Health Group plc, GTL

Resources plc and TP Group plc.

Relevant skills and experience and reasons for re-

election:

Julia’s extensive experience in investment banking and

as a non-executive director provides valuable insight to

the board. Her experience aids constructive challenge

in the boardroom. Following a comprehensive board

evaluation process, the board agreed that Julia

continues to be an effective member of the Board.

Susannah Nicklin – Non-Executive Director and

Chairman of the Remuneration Committee

Susannah Nicklin joined the Board in May 2016. She is

an investment and ﬁnancial services professional with

25 years of experience in executive roles at Goldman

Sachs and Alliance Bernstein in the US, Australia and

the UK. She has also worked in the social impact

private equity sector with Bridges Ventures and the

Global Impact Investing Network. Susannah is Chair of

the Schroder BSC Social Impact Trust plc, and a non-

executive director of Ecoﬁn Global Utilities and

Infrastructure Trust plc, North American Income Trust

plc, and Baronsmead Venture Trust plc. She holds the

Chartered Financial Analyst credential from the CFA

Institute. She was previously a non-executive director

and senior independent director at Pantheon

International plc.

Board of Directors

Amati AIM VCT plc

Annual Report & Financial Statements 2022

31

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Susannah Nicklin (continued)

Relevant skills and experience and reasons for re-

election:

Susannah has gained an in-depth knowledge of

ﬁnancial markets and the investment management

sector through her previous roles with Goldman Sachs

and Alliance Bernstein. She has a wealth of experience

including from her directorships on other investment

trusts which facilitates open discussion and allows for

constructive challenge in the boardroom. Following a

comprehensive board evaluation process, the board

agreed that Susannah continues to be an effective

member of the Board.

Brian Scouler – Non-Executive Director and

Chairman of the Audit Committee

Brian Scouler joined the Board in May 2018. Prior to this

he was a non executive director of Amati VCT plc which

merged with the Company in May 2018. He spent 25

years in Private Equity in senior roles with

Charterhouse, Royal Bank of Scotland and Dunedin. He

has wide experience of buying and selling private

companies and investment portfolio management,

sitting on numerous investee company boards. He was

formerly manager of a quoted investment trust and a

member of the steering committee of LPEQ, the listed

private equity group. He is a Chartered Accountant with

a number of non-executive and advisory appointments.

Relevant skills and experience and reasons for re-

election:

Brian’s experience in company and investment portfolio

management brings valuable business and ﬁnancial

skills to the Board. This enables him to assess the

ﬁnancial position of the Company and its projections,

and to lead discussions regarding the Company’s risk

management framework and risk appetite. Brian’s

experience of managing audit relationships helps

inform his role as Chairman of the Audit Committee.

Following a comprehensive board evaluation process,

the board agreed that Brian continues to be an effective

member of the Board.

Fiona Wollocombe – Non-Executive Director

Fiona Wollocombe was appointed to the Board on 10

June 2021. She is chairman of Kings Arms Yard VCT plc.

Fiona is also chair of the Trustees of the Scottish Ballet

Endowment Fund. Her previous career was in equity

capital markets at NatWest Markets and Deutsche

Bank. She has previously held non-executive director

roles for a number of other companies in the VCT sector

including being chairman of Artemis VCT Plc and of

Maven Income and Growth VCT PLC.

Relevant skills and experience and reasons for election:

Fiona brings strong banking, ﬁnancial and investment

trust skills to the Board. Her extensive knowledge and

experience within the VCT industry help facilitate open

conversation and constructive challenge of the

Manager and contribute to strategic discussions. Fiona

was appointed to the Board in June 2021 and is

therefore seeking election for the ﬁrst time.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

32

The Statement of Corporate Governance on pages 37

to 40 forms part of the Directors’ Report.

Principal Activity and Status

The Company is registered as a public limited company

under the Companies Act 2006 (Registration number

04138683). The address of the registered ofﬁce is

27/28 Eastcastle Street, London, W1W 8DH. The

principal activity of the Company is to invest in a

portfolio of companies whose shares are primarily

traded on AIM. The Directors have managed, and

intend to continue to manage, the Company’s affairs in

such a manner as to comply with section 274 of the

Income Tax Act 2007. A review of the Company’s

business during the year is contained in the Chairman’s

Statement and Fund Manager’s Review.

Directors

The Directors of the Company during the year under

review were Peter Lawrence, Julia Henderson,

Susannah Nicklin, Brian Scouler and Fiona Wollocombe,

who was appointed to the Board on 10 June 2021. The

Company indemniﬁes its Directors and ofﬁcers and has

purchased insurance to cover its Directors.

Conflicts of Interest

Each Director has a statutory duty to avoid a situation

where they have, or could have, a direct or indirect

interest which conﬂicts, or may conﬂict with the

interests of the Company. A Director will not be in

breach of that duty if the relevant matter has been

authorised in accordance with the Articles. The Board

has approved a protocol for identifying and dealing

with conﬂicts and has resolved to conduct a regular

review of actual or possible conﬂicts and any

authorised conﬂicts. No conﬂicts or potential conﬂicts

were identiﬁed during the year.

Management

The Company’s investments are managed by Amati

Global Investors Limited, subject to an Investment

Management Agreement dated 30 September 2019

(the “Agreement”) which was an update from the

original agreement dated 19 March 2010. Pursuant to

the Agreement, Amati is entitled to an investment

management fee of 1.75% per annum charged on the

net asset value of the Company at the quarter end,

payable quarterly in arrears. The Manager rebates the

fee it receives for the management of the Company’s

investment in the TB Amati UK Smaller Companies

Fund.

The Manager waived the right granted in the original

Agreement to receive a performance fee.

The Agreement may be terminated by either party with

twelve months’ notice. There are several events that

could allow immediate termination by the Company,

including insolvency, material breach, loss of FCA

authorisation, a change of control of the Manager, and

Paul Jourdan, CEO of the Manager, ceasing to have an

active role in the management of the portfolio, unless a

replacement acceptable to the Company is appointed

within twenty business days.

Manager Evaluation

Since the year end, the Board have reviewed the

appropriateness of the Manager’s appointment. In

carrying out its review, the Board considered the skills,

experience, resources and commitment of the Manager

together with the investment performance,

management processes, risk controls and the quality of

support provided to the Board during the year and

since its appointment. It also considered the length of

the notice period of the investment management

agreement and the fees payable to the Manager.

Following this review, it is the Directors’ opinion that the

continuing appointment of Amati Global Investors

Limited as Manager is in the interests of shareholders

as a whole. Among the reasons for this view in

particular are the Company’s long-term investment

performance relative to that of the markets in which the

Company invests, as well as the depth and experience

of the research capability of the Manager.

Dividend

The Company paid an interim dividend of 4.5p per

share on 26 November 2021. As stated in the

Chairman’s Statement on page 5 the Board has

declared payment of a ﬁnal dividend of 4.5p per share

for the ﬁnancial year ending 31 January 2022. The

dividend will be paid on 22 July 2022 to shareholders

on the register on 17 June 2022. The ex-dividend date

will be 16 June 2022.

Directors’ Report

Amati AIM VCT plc

Annual Report & Financial Statements 2022

33

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Share Capital

There were 136,720,797 ordinary shares in issue at the

year end. During the year 21,590,838 shares in the

Company were allotted as a result of offers at an

average price of 217p per share raising £46.75m net of

issue costs. 1,289,588 shares in the Company were

allotted as a result of the Dividend Re-investment

Scheme. Since the year end, 12,280,842 shares have

been issued under the Offer for Subscription, please

refer to Note 19 on page 74 for further details.

During the year 1,749,179 shares in the Company with

a nominal value of 5p per share were bought back for

an aggregate consideration of £3.43m at an average

price of 196p per share (representing 1.3% of the

shares in issue at 31 January 2022). Since the year end,

150,616 shares have been bought back for an

aggregate consideration of £253,066 at an average

price of 168p per share. All of the shares were

cancelled after purchase. The purpose of the share

buybacks was to satisfy demand from those

shareholders who sought to sell their shares during the

period, given that there is a very limited secondary

market for shares in Venture Capital Trusts generally. It

remains the Board’s policy to buy back shares in the

market, subject to the overall constraint that such

purchases are in the Company’s interest including the

maintenance of sufﬁcient resources for investment in

new and existing investee companies and the

continued payment of dividends to shareholders. At the

Company’s year end authority remained for the

Company to buy back 16,444,077 shares.

The rights and obligations attached to the Company’s

ordinary shares are set out in the Company’s Articles of

Association, copies of which can be obtained from

Companies House. The Company has one class of

share, ordinary shares, which carry no right to ﬁxed

income. The holders of ordinary shares are entitled to

receive dividends when declared, to receive the

Company’s report and accounts, to attend and speak at

general meetings, to appoint proxies and to exercise

voting rights.

There are no restrictions on voting rights and no

restrictions concerning the transfer of shares in the

Company except that certain restrictions may from time

to time be imposed by laws and regulations (for

example, insider trading laws). There are no special

rights with regard to control attached to securities; no

agreements between holders of securities regarding

their transfer known to the Company; and no

agreements to which the Company is a party that

might change or fall away on a change of control or

trigger any compensatory payments for Directors,

following a successful takeover bid.

Annual General Meeting

The notice of Annual General Meeting to be held on 16

June 2022 is set out on pages 79 to 84. The Company

intends for the meeting to be in person at Barber-

Surgeons’ Hall and it will be live-streamed for those

who wish to view it. An investor event will be held in

the usual format after the formal business of the AGM,

which is proposed to be live-streamed. Please note that

live-streaming will only allow participants to view the

meeting and presentation, they will not have the ability

to vote, or ask questions. Shareholders wishing to ask

questions may do so by emailing the Manager at

info@amatiglobal.com. Instructions on how to watch

the meeting live, as well as further information on the

AGM and investor event, can be found on page 79.

Resolution 10 – Authority to allot shares (ordinary

resolution)

Section 551 of the Companies Act 2006 provides that

the Directors may not allot new shares without

shareholder approval.

Resolution 10 seeks to renew the Directors’ authority to

allot shares up to a maximum nominal amount of

£2,450,000, representing approximately 33 per cent. of

the Company’s total issued ordinary share capital as at

12 April 2022 (being the latest practicable date prior to

publication of this document). As at 12 April 2022, the

Company did not hold any ordinary shares in treasury.

The authority will expire at the end of the Annual

General Meeting of the Company to be held in 2023,

unless previously renewed, varied or revoked by the

Company in general meeting.

The Directors intend to use this authority for the

purposes described below under Resolution 11.

Resolution 11 – Disapplication of pre-emption rights

(special resolution)

Resolution 11 seeks to renew the Directors’ authority to

allot equity securities for cash without ﬁrst having to

offer such securities to existing shareholders pro rata to

their existing holdings. This will include the sale on a

non pre-emptive basis of any shares the Company

holds in treasury for cash. The authority is limited to:

Amati AIM VCT plc

Annual Report & Financial Statements 2022

34

Directors’ Report (continued)

(i) an aggregate nominal amount of £2,300,000

(representing approximately 31 per cent. of the

issued share capital of the Company (excluding

treasury shares) as at the date of this document)

pursuant to one or more offers for subscription of

the Company; and

(ii) an aggregate nominal amount of £150,000

(representing approximately 2 per cent. of the

issued share capital of the Company (excluding

treasury shares) as at the date of this document)

pursuant to the dividend reinvestment scheme

operated by the Company.

The authority will expire at the end of the Annual

General Meeting of the Company to be held in 2023,

unless previously renewed, varied or revoked by the

Company in general meeting.

This power will be exercised only if, in the opinion of the

Directors, it would be in the best interests of

shareholders as a whole.

Resolution 12 – Authority for the Company to purchase

its own shares (special resolution)

Resolution 12 authorises the Company to purchase up

to 14.99 per cent. of the issued ordinary share capital of

the Company as at the date of the passing of

Resolution 12. As at 12 April 2022 this would equate to

approximately 22.3 million ordinary shares. Purchases

will be made on the open market at prices in

accordance with the terms laid out in Resolution 12.

The Board currently intends to cancel those shares

purchased. Such authority will expire at the end of the

Annual General Meeting of the Company to be held in

2023, unless previously cancelled or varied by the

Company in general meeting.

Resolution 13 – Cancellation of share premium account

(special resolution)

Under the Companies Act 2006 and the Companies

(Reduction of Share Capital) Order 2008, a company

may, with the sanction of a special resolution of its

shareholders and the conﬁrmation of the Court, reduce

or cancel all or part of its existing share capital and

apply the sums resulting from such reduction to, among

other things, create distributable reserves. Resolution

13 is a special resolution to cancel the entire amount

standing to the credit of the Company’s share premium

account as at the date the relevant Court order is made.

Subject to conﬁrmation by the High Court of Justice in

London and the reduction in capital taking effect, the

amount so cancelled will be credited to the Company’s

distributable reserves. This will improve the Company’s

distributable reserves position and will provide the

Company with ﬂexibility to support, amongst other

things, share buy-backs and the payment of dividends

or other distributions to shareholders in the future.

Shareholders should note that in order to retain its

status as a VCT, the Company cannot currently make a

distribution to shareholders out of a special reserve

created by the cancellation of the amount standing to

the credit of its share premium account in respect of

shares issued during the ‘restricted period’ as deﬁned in

the VCT legislation (being the period of three years

beginning at the end of the accounting period of the

Company in which the shares were issued). The

Company will monitor any distributions being made

from the cancelled share premium to ensure compliance

with these VCT Rules.

Resolution 14 – Notice period for general meetings

(special resolution)

Under the Companies Act 2006, the notice period

required for all general meetings of the Company is 21

clear days. AGMs will always be held on at least 21

clear days’ notice, but shareholders can approve a

shorter notice period for other general meetings.

The Board believes that it is in the best interests of

shareholders of the Company to have the ability to call

meetings on no less than 14 clear days’ notice should a

matter require urgency. The Board is therefore

proposing Resolution 14 to approve the reduction in the

minimum notice period from 21 clear days to 14 clear

days for all general meetings other than AGMs. The

Directors do not intend to use less than 21 clear days’

notice unless immediate action is required.

Independent Auditor

A tender and evaluation process was undertaken in

April 2021 and it was the recommendation of the Audit

Committee, and decision of the Board, that BDO LLP be

proposed at the AGM for re-appointment as

independent auditor to the Company. Accordingly

resolutions will be proposed at the AGM for the

reappointment of BDO LLP and to authorise the

Directors to agree the independent auditor's

remuneration. Further details regarding the audit tender

can be found in the Audit Committee report on page 43.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

35

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Substantial Shareholdings

31 January As at the date

2022 of this report

No of % of No of % of

ordinary shares ordinary shares

shares held in issue shares held in issue

Hargreaves

Lansdown

(Nominees)

Limited 6,062,786 4% 6,415,899 4%

Re-election of Directors

In accordance with The AIC Code of Corporate

Governance, all Directors are proposed for re-election at

the upcoming AGM. Fiona Wollocombe, who was

appointed during the year, is proposed for election. Peter

Lawrence will be retiring at the end of the AGM this year.

Biographical details of all Directors and their reasons for

election or re-election are set out on pages 30 and 31.

Going Concern

In accordance with FRC Guidance for Directors on

going concern and liquidity risk the Directors have

made an assessment of the Company’s ability to

continue as a going concern and are satisﬁed that the

Company has adequate resources to continue in

operational existence for a period of 12 months from

the date these ﬁnancial statements were approved.

In making this assessment, the Directors took into

account the nature of the Company’s business and

Investment Policy, its risk management policies, the

diversiﬁcation of its portfolio, the cash holdings and the

liquidity of investments. The Company’s business

activities, together with the factors likely to affect its

future development, performance and position including

the ﬁnancial risks the Company is exposed to are set

out in the Strategic Report on pages 4 to 29. The

Directors have considered in particular the likely

economic effects and the impacts on the Company’s

operations of the war taking place in Ukraine, rising

inﬂation and interest rates and the effects of the

COVID-19 pandemic.

The longer term economic outlook is difﬁcult to predict

but in considering preparing the accounts on a going

concern basis the Directors noted the Company holds a

portfolio of liquid investments and cash balances

whose value is a multiple of liabilities. The Directors are

of the view that the Company can meet its obligations

as and when they fall due. The cash available enables

the Company to meet any funding requirements and

ﬁnance future additional investments. The Company is

a closed-end fund, where assets are not required to be

liquidated to meet day-to-day redemptions.

The Board has reviewed stress testing and scenario

analysis prepared by the Investment Manager to assist

them in assessing the impact of changes in market

value and income with associated cash ﬂows. In

making this assessment, the Investment Manager has

considered plausible downside scenarios. These tests

included the modelling of a reduction in income of 50%,

increase in costs of 50% and a reduction in net asset

value of 50%, any or all of which could apply to any set

of circumstances in which asset value and income are

signiﬁcantly impaired. It was concluded that in a

plausible downside scenario, the Company could

continue to meet its liabilities. Whilst the economic

future is uncertain, and the Directors believe that it is

possible the Company could experience further

reductions in income and/or market value, the opinion of

the Directors is that this should not be to a level which

would threaten the Company’s ability to continue as a

going concern.

The Investment Manager and the Company’s third-

party service providers have contingency plans to

ensure the continued operation of their business in the

event of disruption, such as caused by the impact of

COVID-19. The Board is satisﬁed that there has been

minimal impact to the services provided during the year

and are conﬁdent that this will continue. Furthermore,

the Directors are not aware of any material

uncertainties that may cast signiﬁcant doubt on the

Company’s ability to continue as a going concern,

having taken into account the liquidity of the

Company’s investment portfolio and the Company’s

ﬁnancial position in respect of its cash ﬂows, borrowing

facilities and investment commitments (of which there

are none of signiﬁcance). Therefore, the ﬁnancial

statements continue to be prepared on the going

concern basis.

Accountability and Audit

The independent auditor’s report is set out on pages 49

to 54 of this report. The Directors who were in ofﬁce on

the date of approval of these Annual Report and

Financial Statements have conﬁrmed that, as far as

they are aware, there is no relevant audit information

(as deﬁned by Section 418(3) of the Companies Act

2006) of which the auditor is unaware. Each of the

Amati AIM VCT plc

Annual Report & Financial Statements 2022

36

Directors has taken all the steps they ought to have

taken as Directors in order to make themselves aware

of any relevant audit information and to establish that it

has been communicated to the auditor.

Listing Rule Disclosure

The Company conﬁrms that there are no items which

require disclosure in relation to Listing Rule 9.8.4 in

respect of the year ended 31 January 2022.

Financial Instruments

The Company’s ﬁnancial instruments comprise equity

and ﬁxed interest investments, cash balances and liquid

resources including debtors and creditors. Further

details, including details about risk management, are

set out in the Strategic Report and in notes 15 to 18 on

pages 71 to 73.

Future Developments

Signiﬁcant events which have occurred after the year

end are detailed in note 20 on page 74. Future

developments which could affect the Company are

discussed in the outlook sections of the Chairman’s

Statement and Fund Manager’s Review.

Peter A. Lawrence

Chairman

12 April 2022

Directors’ Report (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

37

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Background

The Board of Amati AIM VCT plc 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 as a venture capital trust.

The Board considers that reporting against the

Principles and Provisions of the AIC Code, which has

been endorsed by the Financial Reporting Council,

provides more relevant information to shareholders.

The Company has complied with the Principles and

Provisions of the AIC Code except as set out below:

• Provision 8: the Board will set out the

responsibilities of the Chairman and make this

available in writing in the coming year. The

Company is compliant with the rest of this

provision.

• Provision 14: the Board has determined that the

size of the Board does not warrant the

appointment of a senior independent director.

• Provision 17: given the size of the Board, the

Directors feel it is unnecessarily burdensome to set

up a separate management engagement

committee, and therefore the full Board reviews

the performance of the Manager, as well as other

service providers, annually.

The AIC Code is available on the AIC website

(www.theaic.co.uk). It includes an explanation of how

the AIC Code adapts the Principles and Provisions set

out in the UK Code to make them relevant for

investment companies. For the reasons set out in the

AIC Code, the Board considers that the provisions

relating to the role of chief executive, executive

directors’ remuneration and the need for an internal

audit function are not relevant to the position of the

Company, due to the size and specialised nature of the

Company, the fact that all Directors are independent

and non-executive, and the costs involved.

Board of Directors

The Company has a Board of ﬁve Directors, all of whom

are considered independent non-executive directors

under the AIC Code. As all Directors have acted in the

Statement of Corporate Governance

interests of the Company throughout the period of their

appointment and demonstrated commitment to their

roles, the Board recommends they be re-elected at the

AGM. Fiona Wollocombe, who was appointed during

the year under review, is recommended for election.

Peter Lawrence has announced his intention to retire at

the forthcoming AGM and will therefore not be standing

for re-election. As disclosed in the Chairman’s

statement, following his retirement, Fiona Wollocombe

will become Chairman of the Board.

The Company may by ordinary resolution appoint any

person who is willing to act as a Director, either to ﬁll a

vacancy or as an additional Director. No Director has a

contract of service with the Company. All of the Directors

have been provided with letters of appointment, which

are available for inspection by shareholders immediately

before and after the Company’s annual general meeting.

Directors are provided with key information on the

Company’s activities including regulatory and statutory

requirements and internal controls by the Manager. The

Manager, in the absence of explicit instructions from the

Board, is empowered to exercise discretion in the use of

the Company’s voting rights. All shareholdings are

voted, where practical, in accordance with the

Manager’s own corporate governance policy, which is to

seek to maximise shareholder value by constructive use

of votes at company meetings and by endeavouring to

use its inﬂuence as an investor with a principled

approach to corporate governance.

The AIC Code states that the Board should have a

formal schedule of matters speciﬁcally reserved to it for

decision, to ensure that it has ﬁrm direction and control

of the Company. This is achieved by an investment

management agreement between the Company and

the Manager, which sets out the matters over which the

Manager has authority and the limits above which

Board approval must be sought. All other matters

including strategy, investment and dividend policies,

gearing and corporate governance proceedings are

reserved for the approval of the Board of Directors.

All the Directors are equally responsible for the proper

conduct of the Company’s affairs. In addition, the

Directors are responsible for ensuring that the policies

and operations are in the best interests of all the

Company’s shareholders and that the best interests of

creditors and suppliers to the Company are properly

considered. The Chairman and the company secretary

establish the agenda for each Board meeting. The

necessary papers for each meeting are distributed well

Amati AIM VCT plc

Annual Report & Financial Statements 2022

38

Statement of Corporate Governance (continued)

in advance of each meeting ensuring all Directors

receive accurate, timely and clear information.

The Directors communicate regularly with each other,

and with the Manager, on ongoing business between

Board meetings.

Independence of Directors and Tenure

The Board regularly reviews the independence of each

Director and of the Board as a whole in accordance

with the guidelines in the AIC Code. Directors’ interests

are noted at the start of each Board meeting and any

Director would not participate in the discussion

concerning any investment in which he or she had an

interest. The Board does not consider that length of

service will necessarily compromise the independence

or effectiveness of Directors and no limit has been

placed on the overall length of service, although the

Board does bear in mind the nine year provision relating

to independence and length of service included in the

AIC Code when looking at Board succession. The Board

considers that such continuity and experience can be of

signiﬁcant beneﬁt to the Company and its shareholders.

The Board believes that each Director has

demonstrated that they are independent in character

and judgment and there are no relationships or

circumstances which could affect their objectivity.

Board Performance

The Board carries out a performance evaluation of the

Board, committees and individual Directors each year.In

2021 the evaluation was undertaken externally by Peter

Kennerley, an independent consultant, who has no other

connection to the Company. The evaluation was

undertaken by individual interviews with each Director,

which was supported by a discussion document

covering a range of topics to facilitate discussion. Key

outcomes of the evaluation were:

• that the balance of skills is appropriate, and all

Directors contribute fully to discussion in an open,

constructive and objective way.

• the composition of the Board and its committees is

considered appropriate for the effective

governance of the Company. The biographies of

the Directors, set out on pages 30 and 31,

demonstrate the wide range of investment,

commercial and professional experience and

diversity of experience and background that they

contribute.

• each of the board committees are performing

effectively.

• succession planning was identiﬁed as a key area

of focus for the Board. Succession planning of the

chairman was raised as a vital point during the

evaluation and the Board was pleased to appoint

Fiona Wollocombe during the year, and she will

succeed Peter as chairman upon his retirement

from the Board at this year’s AGM. Longer term

succession planning was also identiﬁed during the

evaluation and, particularly in light of Susannah’s

intention to resign from the Board, as disclosed on

page 6, this will continue to be an area of focus for

the Nomination Committee during 2022.

Board Committees

The Board has established three committees to assist

with its operations, namely the Audit Committee, the

Remuneration Committee and the Nomination

Committee. Each of the committees’ delegated

responsibilities are clearly deﬁned in formal terms of

reference which are available on request from the

Company Secretary and can be found on Amati’s

website: https://www.amatiglobal.com/fund/amati-aim-

vct/the-board-1.

Audit Committee

The Report of the Audit Committee is included on

pages 41 to 43 and forms part of this statement.

Remuneration Committee

The Directors’ Remuneration Report can be found on

pages 44 to 47 to of this report.

Nomination Committee

The Nomination Committee, chaired by Julia Henderson,

comprises the full Board. Given the small size of the

Board, this is felt to be appropriate as permitted by the

AIC Code. It meets at least once annually to make

recommendations to the Board on board structure, size

and composition (including the knowledge, experience,

skills and diversity of the Board). The committee

considers succession planning at each meeting,

particularly in relation to the positions of the Chairman

and the chairman of the audit committee. In considering

appointments to the Board, the nomination committee

takes into account the ongoing requirements of the

Amati AIM VCT plc

Annual Report & Financial Statements 2022

39

Company and the need to have a balance of skills and

experience within the Board.

As disclosed earlier in this report, Fiona Wollocombe

was appointed to the Board on 10 June 2021 after a

rigorous interview process and based on an agreed set

of criteria. An external recruitment agency was not

used in this search.

Diversity

The Board has considered the recommendations of the

AIC Code on Corporate Governance concerning gender

diversity and welcomes initiatives aimed at increasing

diversity generally. The Board is clear that maintaining

an appropriate balance around the board table through

a diverse mix of skills, experience, knowledge, length of

service and background is of paramount importance

and gender diversity is a signiﬁcant element of this. Any

search for new board candidates is conducted, and

appointments made, on merit, against objective

selection criteria having due regard, among other

things, to the beneﬁts of diversity on the board. The

Board therefore continues to consider that it would be

inappropriate to set a target and will always appoint

the best person for the job based on merit, and will not

discriminate on the grounds of gender, race, ethnicity,

religion, sexual orientation, age, physical ability or social

background.

The Board is composed solely of non-executive

Directors and has 60% female representation.

Board and Committee Meetings

The following table sets out the Directors’ attendance

at scheduled Board and committee meetings held

during the year ended 31 January 2022.

Board Audit Remuneration Nomination

meetings committee committee committee

meetings meetings meetings

Director held attended held attended held attended held attended

Peter Lawrence 4 4331122

Julia Henderson 4 4331122

Susannah Nicklin 4 4331122

Brian Scouler 4 4331122

Fiona Wollocombe* 2 2220011

*appointed on 10 June 2021

The Board is in regular contact with the Manager

between Board meetings. In addition to the above

meetings, the Board met a number of times on an ad-

hoc basis during the year to discuss the prospectus and

share offer and the audit tender. The Audit Committee

also met additionally twice on an ad-hoc basis during

the year to discuss the audit tender.

Internal Control

Details of the principal risks and internal controls

applied by the Board are set out on pages 20 to 23. The

disclosures on internal control and risk management

procedures in the Report of the Audit Committee on

page 42 form part of this Corporate Governance

Statement.

Relations with Shareholders

The Company welcomes the views of shareholders and

places great importance on communication with its

shareholders. Shareholders have the opportunity to

meet the Board at the annual general meeting. All

shareholders are welcome to attend the meeting and to

ask questions of the Directors. The Board is also happy

to respond to any written queries made by

shareholders during the course of the year. All

communication from shareholders is recorded and

reviewed by the Board to ensure that shareholder

enquiries are promptly and adequately resolved. Amati

also regularly engages with shareholders and updates

on shareholder communication are provided at every

Board meeting.

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Amati AIM VCT plc

Annual Report & Financial Statements 2022

40

Statement of Corporate Governance (continued)

The notice of the AGM accompanies this annual report,

which is sent to shareholders. A separate resolution is

proposed for each substantive issue. The Board and

representatives of the Manager are available to answer

any questions shareholders may have.

The Company also communicates with shareholders

through annual and half-yearly reports, which appear

on the Manager’s website: www.amatiglobal.com. The

Directors consider the annual report and ﬁnancial

statements taken as a whole are fair, balanced and

understandable and provide the information necessary

for shareholders to assess the Company’s position and

performance, business model and strategy.

Share Capital and Companies Act Disclosures

Details of the Company’s share capital structure and

other Companies Act 2006 Disclosures and details of

substantial interests are set out on pages 33 and 35.

On behalf of the Board

Peter A. Lawrence

Chairman

12 April 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

41

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

Composition of the Committee

The audit committee is chaired by Brian Scouler, a

chartered accountant, who has recent and relevant

ﬁnancial experience. The Committee comprises all of the

Directors and the Board is satisﬁed that they have a

combination of ﬁnancial, investment and business

experience, speciﬁcally with respect to the venture capital

trust sector. Given the size of the Board, and Peter

Lawrence’s experience, it is felt appropriate for him to sit

on the Audit Committee as permitted by the AIC Code.

Role of the Committee

During the year ended 31 January 2022 the audit

committee met three times and:

• reviewed all ﬁnancial statements released by the

Company (including the annual and half-yearly

report);

• reviewed the Company’s accounting policies,

including the expense allocation policy which is

discussed with the Manager;

• monitored the effectiveness of the system of

internal controls and risk management, including a

detailed review of the Company’s risk register;

• approved the independent auditor’s plan and fees;

• received a report from the independent auditor

following their detailed audit work, and discussed

key issues arising from that work;

• led the external audit tender process and made

recommendations to the Board thereon; and

• reviewed and updated its own terms of reference

in accordance with the AIC Code.

The Committee additionally met twice on an ad-hoc

basis during the year to discuss the audit tender.

Significant Issues considered by the Committee

during the year

The Directors carried out a robust assessment of the

principal risks facing the Company and concluded that

the key areas of risk which threaten the business

model, future performance, solvency or liquidity of the

Company are:

Report of the Audit Committee

Key risk area Conclusion

Compliance with HM Revenue &

Customs to maintain the Company’s

VCT status

The Manager conﬁrmed to the audit committee that the conditions for

maintaining the Company’s status had been complied with throughout the

year. The Company’s VCT status is also reviewed by the Company’s tax

adviser, Philip Hare & Associates, as described on page 28.

Market decline sparked by national or

global events

Black swan events such as wars and the Covid-19 outbreak cannot be

predicted but can have an effect on markets. The Manager’s approach to

dealing with any market adjustment is to be as diversiﬁed as possible so

as to not overly suffer from a decline in a particular sector. As the sector

graph on page 16 shows, the VCT’s investments are spread across ten

sectors. The audit committee is satisﬁed that the Manager considers risk

appropriately in its investment decision making process.

Valuation of investments The Manager conﬁrmed to the audit committee that the basis of valuation

for quoted and unquoted companies was consistent with the prior year

and in accordance with published industry guidelines. The valuation of

quoted companies on AIM or those with a full listing is generally based on

bid prices, and for investments traded on SETS (London Stock Exchange's

electronic trading services) is based on the last traded price. The valuation

of unquoted companies takes account of the latest available information

about investee companies and current market data. A comprehensive

report on the valuation of unquoted investments is presented and

discussed at every Board meeting; Directors are also consulted about

material changes to those valuations between Board meetings.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

42

These matters are monitored regularly by the Manager

and are reviewed by the Board at every Board meeting.

They were also discussed with the Manager and the

auditor at the audit committee meeting held to discuss

the annual ﬁnancial statements.

The Manager and auditor conﬁrmed to the audit

committee that they were not aware of any material

unadjusted misstatements. Having reviewed the

reports received from the Manager, the audit committee

is satisﬁed that the key areas of risk and judgement

have been properly addressed in the ﬁnancial

statements and that the signiﬁcant assumptions used

in determining the value of assets and liabilities have

been properly appraised and are sufﬁciently robust.

Internal Control

The Board acknowledges that it is responsible for the

Company’s internal control systems and for reviewing

their effectiveness. In accordance with the AIC Code

and the Guidance on Risk Management published by

the Financial Reporting Council in 2014, the audit

committee has established an ongoing process for

identifying, evaluating and managing the signiﬁcant

risks faced by the Company. Internal controls are

designed to manage the particular needs of the

Company and the risks to which it is exposed. The

internal control systems aim to ensure the maintenance

of proper accounting records, the reliability of the

ﬁnancial information upon which business decisions are

made and which is used for publication, and that the

assets of the Company are safeguarded. They can by

their nature only provide reasonable and not absolute

assurance against material misstatement or loss. The

ﬁnancial controls operated by the Board include the

authorisation of the investment strategy and regular

reviews of the results and investment performance.

The Board has delegated contractually to third parties,

as set out on page 19, the management of the

investment portfolio, the custodial services, including the

safeguarding of the assets, the day-to-day accounting,

company secretarial and administration requirements

and registration services. Each of these contracts was

entered into after full and proper consideration by the

Board of the quality and cost of services offered. The

Board receives and considers regular reports from the

Manager. Ad hoc reports and information are supplied

to the Board as required. It remains the role of the Board

to keep under review the terms of the investment

management agreement with the Manager.

A bi-annual review of the control systems is carried out

which covers consideration of the key risks in three

major areas: corporate strategy and compliance with

laws and regulations; ﬁnancial management and

company reporting and relationships with service

providers. Each risk is considered with regard to the

controls exercised at Board level, reporting by service

providers and controls relied upon by the Board. The

company secretary reviews the annual statutory

accounts to ensure compliance with Companies Act

and the AIC Code and the audit committee reviews

ﬁnancial information prior to its publication. The

principal features of the internal control systems which

the Company has in place in respect of ﬁnancial

reporting include segregation of duties between the

review and approval of unquoted investment valuations

and the recording of these valuations in the accounting

records. Bank reconciliations, cash forecasts and

investment valuations are produced on a weekly basis

for review by the Manager. Quarterly management

accounts are produced for review and approval by the

Manager and the Board.

The committee has previously reviewed the need for an

internal audit function. As an externally managed

investment trust, it has decided that the systems and

procedures employed by the Manager and the

Administrator, including their risk management and

internal audit functions, provide assurance that a sound

system of internal control, which safeguards

shareholders’ investments and the Company’s assets, is

maintained. Reports on internal controls from both the

Custodian and the Administrator, which are reports on

by independent external accountants, are received and

reviewed annually. An internal audit function, speciﬁc to

the Company, is therefore considered unnecessary.

Non-Audit Services

The audit committee regards the continued

independence of the auditor to be a matter of the

highest priority. The Company’s policy with regard to the

provision of non-audit services by the external auditor

ensures that no engagement will be permitted if:

• the provision of the services would contravene any

regulation or ethical standard;

• the auditor is not considered to be an expert

provider of the non-audit services;

Report of the Audit Committee (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

43

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

• the provision of such services by the auditor

creates a conﬂict of interest for either the Board or

the Manager; and

• the services are considered to be likely to inhibit

the auditor’s independence or objectivity as

auditor.

As the Company is a Public Interest Entity listed on the

London Stock Exchange, with effect from 1 April 2017,

under EU legislation, a cap on the level of fees incurred

for permissible non-audit services now applies and

should not exceed 70% of the average audit fee for the

previous three years.

No non-audit services were provided to the Company

by BDO in the year under review (2021: nil).

Auditor Assessment, Independence and Audit Tender

The audit committee has managed the relationship

with the independent auditor and assessed the

effectiveness of the audit process. When assessing the

effectiveness of the process for the year under review

the Committee considered the auditor’s technical

knowledge and that it has a clear understanding of the

business of the Company; that the audit team is

appropriately resourced; that the auditor provided a

clear explanation of the scope and strategy of the audit

and that the auditor maintained independence and

objectivity. As part of the review of auditor

effectiveness and independence, BDO LLP has

conﬁrmed that it is independent of the Company and

has complied with applicable auditing standards.

BDO’s fee in respect of the audit for the year ended 31

January 2022 is £35,000 (2021: £28,000).

Following professional guidelines, the audit partner

rotates after ﬁve years. The year ended 31 January

2022 is Peter Smith’s second year as audit partner.

Under mandatory rotation rules, the Company is

required to put the external audit out to tender at least

every ten years. As previously reported in the

Company’s 2021 Annual Report and Accounts, this

mandatory tender was due in 2021, however, the

Company took advantage of the Financial Reporting

Council, Financial Conduct Authority and Prudential

Regulation Authority COVID-19 Joint Statement that,

among other things was designed to allow companies

to focus on the delivery of information to investors and

capital markets and allowed future postponement of

auditor tenders. The Directors therefore decided to

delay the required audit tender to the year ending 31

January 2022.

A tender and evaluation process was undertaken in

April 2021, in which four audit ﬁrms were approached

and one of which declined to tender on the basis of a

conﬂict of interest. As a result, three ﬁrms participated

in the tender and it was the recommendation of the

Audit Committee, and decision of the Board, that BDO

LLP be proposed at the AGM for re-appointment as

independent auditor to the Company.

By order of the Board

Brian Scouler

Chairman of the Audit Committee

12 April 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

44

Introduction

This report has been prepared in accordance with the

requirements of the Companies Act 2006 and The

Large and Medium-sized Companies and Groups

(Accounts and Reports) (Amendment) Regulations

2013 (the “Regulations”). The Directors’ Annual Report

on remuneration will be put to members at the

upcoming AGM.

The Company’s auditor, BDO LLP, is required to give its

opinion on certain information included in this report.

The disclosures which have been audited are indicated

as such. The auditor’s opinion on these and other

matters is included in the Independent Auditor’s Report

on pages 49 to 54.

The Remuneration Committee, chaired by Susannah

Nicklin, comprises the full Board. Given the small size of

the Board, this is felt to be appropriate as permitted by

the AIC Code.

Annual Statement from the Chairman of the

Company

Directors’ fees are reviewed annually and are set by the

Board to attract individuals with the appropriate range

of skills and experience. In determining the level of fees

their duties and responsibilities are considered, together

with the level of time commitment required in preparing

for and attending meetings. The remit of the

remuneration committee is to discuss fees payable to

advisers (other than the Company’s auditor), the terms

of appointment and remuneration of the Directors and

make recommendations accordingly to the Board. The

Board, on the recommendation of the remuneration

committee, agreed to increase annual fees during the

year under review, with effect from 1 May 2021, in line

with the Consumer Prices Index (“CPI”), although a

small additional increase was paid to the Chairman to

reﬂect the increased workload carried out during the

year.

The remuneration committee receives a report on peer

group remuneration annually and benchmarks the

remuneration of the Directors against this report. The

remuneration committee as a whole agrees the level of

increase to Directors' fees and all Directors' fees are

increased by the same percentage to avoid any

conﬂicts of interest.

Directors’ Remuneration Report

Directors’ Remuneration Policy

In accordance with the requirements of Schedule 8 of

the Large and Medium sized Companies and Groups

(Accounts and Reports) Regulations 2008, as amended

(the Regulations), an ordinary resolution to approve the

Directors’ Remuneration Policy was approved at the

Company’s AGM in 2021. It is proposed that the

approved policy remain in force until the AGM of in

2024, at which time a further resolution will be

proposed. The approved policy is available for

inspection by shareholders in the 2021 Annual Report

on the Company’s website:

https://www.amatiglobal.com/storage/116/AIMVCT_An

nualReport_31January2021.pdf

Directors’ Annual Report on Remuneration

Terms of appointment

No Director has a contract of service with the Company.

All of the Directors have been provided with letters of

appointment which include details of fees payable. The

letters of appointment provide that Directors are subject

to re-election by shareholders at the ﬁrst annual

general meeting after their appointment. In accordance

with corporate governance best practice, the Board has

resolved that all Directors will stand for annual re-

election. Their re-election is subject to shareholder

approval. The letters of appointment are available for

inspection on request from the company secretary.

There is no period of notice to be given to terminate the

letters of appointment and no provision for

compensation upon early termination of appointment.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

45

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Reports from the Directors

Highlights

The following table shows, for each Director, the original appointment date and the annual general meeting at

which they may stand for re-election.

Date of original Due date

Director appointment for re-election

Peter Lawrence 4 May 2018 N/A*

Julia Henderson 4 May 2018 2022 AGM

Susannah Nicklin 4 May 2016 2022 AGM

Brian Scouler 4 May 2018 2022 AGM

Fiona Wollocombe 10 June 2021 2022 AGM**

* Peter Lawrence will be retiring at the 2022 AGM.

** due for election by shareholders for the ﬁrst time, having been appointed during the year under review.

Directors’ fees for the year (Audited)

The fees payable to individual Directors in respect of the year ended 31 January 2022 are shown in the table below.

Year ended 31 January 2022

(audited)

Total Total

Taxable Fixed variable

Fees beneﬁts Total remuneration remuneration

£ £ £ £ £

Peter Lawrence 25,378 - 25,378 25,378 -

Julia Henderson 22,905 - 22,905 22,905 -

Susannah Nicklin 22,905 - 22,905 22,905 -

Brian Scouler 22,905 - 22,905 22,905 -

Fiona Wollocombe* 14,744 - 14,744 14,744 -

108,837 - 108,837 108,837 -

* appointed on 10 June 2021

Year ended 31 January 2021

(audited)

Total Total

Taxable Fixed variable

Fees beneﬁts Total remuneration remuneration

£ £ £ £ £

Peter Lawrence 24,960 - 24,960 24,960 -

Julia Henderson 22,575 - 22,575 22,575 -

Susannah Nicklin 22,575 - 22,575 22,575 -

Brian Scouler 22,575 - 22,575 22,575 -

92,685 - 92,685 92,685 -

Directors are remunerated exclusively by ﬁxed fees and do not receive bonuses, share options, long-term

incentives, pension or other beneﬁts. There have been no payments to past Directors during the ﬁnancial year

ended 31 January 2022, whether for loss of ofﬁce or otherwise.

Annual percentage change in remuneration of Directors

Directors’ pay has increased over the last two years, as set out in the table below:

Change Change

2022 2021 2020 % %

£ £ £ 2021-2022 2020-2021

Peter Lawrence 25,378 24,960 24,651 1.67 1.26

Julia Henderson 22,905 22,575 22,295 1.46 1.26

Susannah Nicklin 22,905 22,575 22,295 1.46 1.26

Brian Scouler 22,905 22,575 22,295 1.46 1.26

Fiona Wollocombe* 14,744 - - n/a n/a

*appointed on 10 June 2021

The requirements to disclose this information came into force for companies with ﬁnancial years starting on or

after 10 June 2019. The comparison will be expanded in future annual reports until such time as it covers a ﬁve

year period. The Company does not have any employees and therefore no comparisons are given in respect of

employees’ pay increases.

Statement of implementation of Remuneration Policy in respect of the financial year ending 31 January 2023

The Committee will, as usual, review Directors’ fees during 2022, taking account of the time required to be

committed to the business of the Company, Consumer Price Index increases and benchmarking information for its

peer group, and will consider whether any changes to remuneration are required.

Relative importance of spend on pay

The table below shows the remuneration paid to Directors and shareholder distributions in the year to 31 January

2022 and the prior year:

Percentage

2022 2021 increase/

£ £ (decrease)

Total dividend paid to shareholders 14,431,940 8,484,193 70.10%

Total repurchase of own shares 3,431,253 3,169,737 8.25%

Total Directors’ fees 108,837 92,685 17.43%

Directors’ shareholdings (Audited)

The Directors who held ofﬁce at 31 January 2022 and their interests in the shares of the Company (including

beneﬁcial and family interests) were:

31 January 2022 31 January 2021

% of issued % of issued

Shares held share capital Shares held share capital

Peter Lawrence 941,660 0.69 859,130 0.74

Julia Henderson 19,360 0.01 17,068 0.01

Susannah Nicklin 25,777 0.02 20,396 0.02

Brian Scouler 60,381 0.04 52,669 0.05

Fiona Wollocombe* 13,755 0.01 - -

*appointed on 10 June 2021

Amati AIM VCT plc

Annual Report & Financial Statements 2022

46

Directors’ Remuneration Report (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

47

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Subsequent to the year end Fiona Wollocombe’s beneﬁcial interest increased by 6,008 shares and Susannah

Nicklin’s beneﬁcial interest increased by 4,807 shares, both under the Offer on 2 March 2022.

The Company conﬁrms that it has not set out any formal requirements or guidelines for a Director to own shares in

the Company.

Company Performance

The Board is responsible for the Company’s investment strategy and performance, although the management of

the Company’s investment portfolio is delegated to the Manager through the investment management agreement.

The graph below compares the Company’s share price with dividends added back at the ex-dividend date to the

Numis Alternative Markets Total Return Index for the period from the launch of the Company. This index was

chosen for comparison purposes, as it is the benchmark used for investment performance measurement purposes.

Shareholder Voting

At the AGM held on 9 June 2021 98.56% of shareholders voted for, 1.44% voted against and 70,621 shares were

withheld in respect of the resolution approving the Directors’ Remuneration Report and 98.42% of shareholders

voted for the Remuneration Policy with 1.58% voting against and 86,746 shares withheld.

On behalf of the Board

Susannah Nicklin

Chairman of the Remuneration Committee

12 April 2022

01/01/01

01/01/02

01/01/03

01/01/04

01/01/05

01/01/06

01/01/07

01/01/08

01/01/09

01/01/10

01/01/11

01/01/12

01/01/13

01/01/14

01/01/15

01/01/16

01/01/17

01/01/18

01/01/19

01/01/20

01/01/21

01/01/22

180

150

120

90

60

30

0

Amati AIM VCT share price

with dividends added back at

ex-dividend date (rebased to 100)

Numis Alternative

Markets Total Return

Index (rebased to 100)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

48

The Directors are responsible for preparing the annual

report and the ﬁnancial statements in accordance with

UK Financial Reporting Standards and applicable law

and regulations.

Company law requires the Directors to prepare ﬁnancial

statements for each ﬁnancial year. Under that law the

Directors are required to prepare the company’s

ﬁnancial statements and have elected to prepare the

company ﬁnancial statements in accordance with UK

Financial Reporting Standards. Under company law the

Directors must not approve the ﬁnancial statements

unless they are satisﬁed that they give a true and fair

view of the state of affairs of the company and of the

proﬁt or loss for the company for that period.

In preparing these ﬁnancial statements, the Directors

are required to:

• select suitable accounting policies and then apply

them consistently;

• make judgements and accounting estimates that

are reasonable and prudent;

• state whether they have been prepared in

accordance with UK Financial Reporting

Standards, subject to any material departures

disclosed and explained in the ﬁnancial

statements;

• prepare the ﬁnancial statements on the going

concern basis unless it is inappropriate to presume

that the group and the company will continue in

business;

• prepare a directors’ report, a strategic report and

directors’ remuneration report which comply with

the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate

accounting records that are sufﬁcient to show and

explain the company’s transactions and disclose with

reasonable accuracy at any time the ﬁnancial position

of the company and enable them to ensure that 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. The Directors are responsible for ensuring

that the annual report and accounts, taken as a whole,

are fair, balanced, and understandable and provide the

information necessary for shareholders to assess the

group’s performance, business model and strategy.

Website Publication

The Directors are responsible for ensuring the annual

report and the ﬁnancial statements are made available

on a website. Financial statements are published on the

company’s website in accordance with legislation in the

United Kingdom governing the preparation and

dissemination of ﬁnancial statements, which may vary

from legislation in other jurisdictions. The maintenance

and integrity of the company's website is the

responsibility of the Directors. The Directors'

responsibility also extends to the ongoing integrity of

the ﬁnancial statements contained therein.

Directors’ responsibilities pursuant to DTR4

The Directors conﬁrm to the best of their knowledge:

• The ﬁnancial statements have been prepared in

accordance with the applicable set of accounting

standards, give a true and fair view of the assets,

liabilities, ﬁnancial position and proﬁt and loss of

the company.

• The annual report includes a fair review of the

development and performance of the business and

the ﬁnancial position of the company, together

with a description of the principal risks and

uncertainties that it faces.

On behalf of the Board

Peter A. Lawrence

Chairman

12 April 2022

Statement of Directors’ Responsibilities

Amati AIM VCT plc

Annual Report & Financial Statements 2022

49

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Opinion on the financial statements

In our opinion the ﬁnancial statements:

• give a true and fair view of the state of the

Company’s affairs as at 31 January 2022 and of its

loss for the year then ended.

• have been properly prepared in accordance with

United Kingdom Generally Accepted Accounting

Practice.

• have been prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the ﬁnancial statements of Amati AIM

VCT PLC (the ‘Company’) for the year ended 31 January

2022 which comprise the income statement, the

statement of changes in equity, the balance sheet, the

statement of cashﬂows 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 Financial Reporting Standard 102 The

Financial Reporting Standard applicable in the UK and

Republic of Ireland (United Kingdom Generally

Accepted Accounting Practice) and as regards the

Company ﬁnancial statements, as applied in

accordance with the provisions 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 believe that the audit evidence

we have obtained is sufﬁcient and appropriate to

provide a basis for our opinion. Our audit opinion is

consistent with the additional report to the audit

committee.

Independence

Following the conclusion of a formal tender process in

2021, we were re-appointed by shareholders at the

AGM on 9 June 2021, subsequent to our original

appointment by shareholders at the AGM on 14 June

2011 to audit the ﬁnancial statements for the year

ended 31 January 2011 and subsequent ﬁnancial

periods. The period of total uninterrupted engagement

including retenders and reappointments is 12 years,

covering the years ending 31 January 2011 to 31

January 2022. We remain independent of the Company

in accordance with the ethical requirements that are

relevant to our audit of the ﬁnancial statements in the

UK, including the FRC’s Ethical Standard as applied to

listed public interest entities, and we have fulﬁlled our

other ethical responsibilities in accordance with these

requirements. The non-audit services prohibited by that

standard were not provided to the Company.

Conclusions relating to going concern

In auditing the ﬁnancial statements, we have concluded

that the Directors’ use of the going concern basis of

accounting in the preparation of the ﬁnancial

statements is appropriate. Our evaluation of the

Directors’ assessment of the Company’s ability to

continue to adopt the going concern basis of

accounting included:

• Obtaining the VCT compliance reports during the

year and as at year end and reviewing their

calculations to check that the Company was

meeting its requirements to retain VCT status.

• Reviewing and challenging the forecasted cash

ﬂows that support the Directors’ assessment of

going concern, taking into account the current

levels of cash and considering the discretionary

nature of the Company's signiﬁcant cash outﬂows.

• Considering the impact of market volatility and

uncertainty, including as a result of the impact of

Russian aggression in Ukraine.

• Calculating ﬁnancial ratios to ascertain the

ﬁnancial health of the Company.

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 Company’s ability to continue as a

going concern for a period of at least twelve months

from when the ﬁnancial statements are authorised for

issue.

In relation to the Company’s reporting on how it has

applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation

to the Directors’ statement in the ﬁnancial statements

about whether the Directors considered it appropriate

to adopt the going concern basis of accounting.

Independent Auditor’s Report

to the Members of Amati AIM VCT plc

Amati AIM VCT plc

Annual Report & Financial Statements 2022

50

Our responsibilities and the responsibilities of the

Directors with respect to going concern are described in

the relevant sections of this report.

Overview

2022 2021

Key audit matters

Valuation and ownership

of investments 33

Materiality

£1.9m (2021: £2.1m) based on 1% of total adjusted net

assets (2021: 1% of total investments)

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of

the Company and its environment, including the

Company’s system of internal control, and assessing the

risks of material misstatement in the ﬁnancial

Key audit matter How the scope of our audit addressed the key audit matter

Valuation and ownership of

investments (note 1 and 8)

We considered the valuation

and ownership of investments

to be the most signiﬁcant audit

area as investments represent

the most signiﬁcant balance in

the ﬁnancial statements and

underpin the principal activity

of the entity.

Incorrect bid prices could be

used in the valuation of quoted

investments.

Incorrect assumptions could be

used in the valuation of

unquoted investments.

Investments could be included

in the valuation where the

Company does not have title to

those investments.

For these reasons, we

considered the valuation and

ownership of investments to be

a key audit matter.

We responded to this matter by testing the valuation and ownership of 100%

of the portfolio of investments. We performed the following procedures:

In respect of quoted investment valuations (96% of the total portfolio by value)

we have:

• Conﬁrmed the year end bid price was used by agreeing to externally

quoted prices and for all of the investments, assessed if there were contra

indicators, such as liquidity considerations, to suggest bid price is not the

most appropriate indication of fair value.

• Obtained direct conﬁrmation of ownership from the custodian regarding all

investments held at the balance sheet date.

• Recomputed the total valuation and compared it to the valuations used by

management

In respect of unquoted investment valuations (remaining 4% of the total

portfolio by value) we have:

• Obtained direct conﬁrmation of ownership from the custodian / investee

entity at the balance sheet date.

• Conﬁrmed and challenged the assumptions and underlying evidence

supporting the year end valuations are in line with UK GAAP and the

International Private Equity and Venture Capital Valuation (“IPEV”)

Guidelines.

• Considered the economic environment in which the company operates to

identify factors that could impact the investment valuation.

Key observations:

Based on our procedures performed we did not identify any material exceptions

with regards to valuation or ownership of investments.

statements. We also addressed the risk of management

override of internal controls, including assessing whether

there was evidence of bias by the Directors that may

have represented a risk of material misstatement.

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)

that 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. This matter was

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

this matter.

Independent Auditor’s Report (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

51

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Our application of materiality

We apply the concept of materiality both in planning

and performing our audit, and in evaluating the effect of

misstatements. We consider materiality to be the

magnitude by which misstatements, including

omissions, could inﬂuence the economic decisions of

reasonable users that are taken on the basis of the

ﬁnancial statements.

In order to reduce to an appropriately low level the

probability that any misstatements exceed materiality,

we use a lower materiality level, performance

materiality, to determine the extent of testing needed.

Importantly, misstatements below these levels will not

necessarily be evaluated as immaterial as we also take

account of the nature of identiﬁed misstatements, and

the particular circumstances of their occurrence, when

evaluating their effect on the ﬁnancial statements as a

whole.

Company ﬁnancial statements

2022 2021

£m £m

Materiality 1.9 2.1

Basis for determining materiality 1% of net assets adjusted to 1% of total investments

exclude fund raising during

the year

Rationale for the benchmark applied

Performance materiality 1.4 1.5

Basis for determining 75% of Materiality

performance materiality

The level off performance materiality applied was set after

having considered a number of factors including the expected

total value of known and likely misstatements and the level of

transaction in the year.

The VCT’s portfolio is mainly

comprised of quoted

investments, which are

considered low risk. For a low

risk portfolio where fair values

are highly visible, a base line

percentage of 1% invested

assets would be a typical

benchmark. We have applied

a percentage of 1% of

adjusted net asset value. The

benchmark used is lower than

the net asset value to take

into account cash that has

been recently raised from

disposals of investments.

We considered gross

investments to be the most

appropriate benchmark

considering the level of

judgement inherent in the

valuation and the range of

reasonable alternative

valuations.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

52

Lower Threshold

Revenue return could inﬂuence users of the ﬁnancial

statements as it is a measure of the Company’s

performance of income generated from its investments

after expenses. Thus, we have set a lower testing

threshold for those items impacting revenue return of

£497,000 (2021: £365,000) which is based on 10% of

gross expenditure.

Reporting threshold

We agreed with the Audit Committee that we would

report to them all individual audit differences in excess

of £38,000 (2021: £42,000). We also agreed to report

differences below this threshold that, in our view,

warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information.

The other information comprises the information

included in the annual report and ﬁnancial statements

other than the ﬁnancial statements and our auditor’s

report thereon. Our opinion on the ﬁnancial statements

does not cover the other information and, except to the

extent otherwise explicitly stated in our report, we do

not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in

doing so, consider whether the other information is

materially inconsistent with the ﬁnancial statements or

our knowledge obtained in the course of the audit, or

otherwise appears to be materially misstated. If we

identify such material inconsistencies or apparent

material misstatements, we are required to determine

whether 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.

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 Code

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.

Independent Auditor’s Report (continued)

Going concern and longer-term

viability

•

The Directors' statement with regards to the appropriateness of

adopting the going concern basis of accounting and any material

uncertainties; and

• The Directors’ explanation as to their assessment of the Company’s

prospects, the period this assessment covers and why the period is

appropriate.

Other Code provisions • Directors' statement on fair, balanced and understandable

• Board’s conﬁrmation that it has carried out a robust assessment of

the emerging and principal risks

• The section of the annual report that describes the review of

effectiveness of risk management and internal control systems and

• The section describing the work of the audit committee

Amati AIM VCT plc

Annual Report & Financial Statements 2022

53

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are

required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Responsibilities of Directors

As explained more fully in the Statement of Directors’

responsibilities, 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.

Strategic report and Directors’

report

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

• the Strategic report and the Directors’ report have been prepared in

accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Company and its

environment obtained in the course of the audit, we have not identiﬁed

material misstatements in the strategic report or the Directors’ report.

Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be

audited has been properly prepared in accordance with the Companies

Act 2006.

Matters on which we are required

to report by exception

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 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.

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.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

54

Independent Auditor’s Report (continued)

Extent to which the audit was capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-

compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined

above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities,

including fraud is detailed below:

We gained an understanding of the legal and

regulatory framework applicable to the Company and

the industry in which it operates and considered the risk

of acts by the Company which were contrary to

applicable laws and regulations, including fraud. These

included but were not limited to compliance with

Chapter 3 Part 6 of the Income Tax Act 2007, the

Companies Act 2006, the FCA listing and DTR rules, the

principles of the UK Corporate Governance Code,

industry practice represented by the AIC SORP and

international accounting standards in conformity with

the requirements of the Companies Act 2006. We also

considered the Company’s qualiﬁcation as a VCT under

UK tax legislation as any breach of this would lead to

the Company losing various deductions and

exemptions from corporation tax.

We focused on laws and regulations that could give

rise to a material misstatement in the Company

ﬁnancial statements. Our tests included, but were not

limited to:

• Obtaining an understanding of the control

environment in monitoring compliance with laws

and regulations;

• the procedures performed in the Key Audit Matters

section above;

• agreement of the ﬁnancial statement disclosures

to underlying supporting documentation;

• enquiries of management of any known, reported

or indications of non-compliance with laws and

regulations including fraud occurring within the

Company and its operations;

• review of minutes of board meetings throughout

the period for any indications of non-compliance

with laws and regulation and instances of fraud;

and

• testing of journal postings made during the year to

identify potential management override of controls.

The engagement team was deemed to collectively have

the appropriate competence and capabilities to identify

or recognise non-compliance with laws and regulations.

We communicated relevant identiﬁed laws and

regulations and potential fraud risks to all engagement

team members and remained alert to any indications of

fraud or non-compliance with laws and regulations

throughout the audit.

Our audit procedures were designed to respond to risks

of material misstatement in the ﬁnancial statements,

recognising that the risk of not detecting a material

misstatement due to fraud is higher than the risk of not

detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are

inherent limitations in the audit procedures performed

and the further removed non-compliance with laws and

regulations is from the events and transactions

reﬂected in the ﬁnancial statements, the less likely we

are to become aware of it.

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.

Use of our report

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work has been

undertaken 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.

Peter Smith (Senior Statutory Auditor)

For and on behalf of BDO LLP,

Statutory Auditor

London, UK

12 April 2022

BDO LLP is a limited liability partnership registered in

England and Wales (with registered number OC305127).

Amati AIM VCT plc

Annual Report & Financial Statements 2022

55

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

2022 2022 2022 2021 2021 2021

Revenue Capital Total Revenue Capital Total

Note £’000 £’000 £’000 £’000 £’000 £’000

(Loss)/gain on investments 8 - (18,123) (18,123) - 69,766 69,766

Income 2 701 - 701 567 - 567

Investment management fees 3 (1,115) (3,345) (4,460) (799) (2,398) (3,197)

Other expenses 4 (514) - (514) (455) - (455)

(Loss)/proﬁt on ordinary

activities before taxation (928) (21,468) (22,396) (687) 67,368 66,681

Taxation on ordinary activities 5 --- - - -

(Loss)/profit and total

comprehensive income

attributable to shareholders (928) (21,468) (22,396) (687) 67,368 66,681

Basic and diluted (loss)/earnings

per ordinary share 7 (0.73)p (16.93)p (17.66)p (0.64)p 62.76p 62.12p

The total column of this Income Statement represents the proﬁt and loss account of the Company. The

supplementary revenue and capital columns have been prepared in accordance with The Association of Investment

Companies’ Statement of Recommended Practice (‘AIC SORP’). There is no other comprehensive income other than

the results for the year discussed above. Accordingly a Statement of Total Comprehensive Income is not required.

All the items above derive from continuing operations of the Company.

The notes on pages 60 to 75 form part of these ﬁnancial statements.

Income Statement

for the year ended 31 January 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

56

for the year ended 31 January 2022

Non-distributable reserves

Capital

Capital reserve

Share Share Merger redemption (non-

capital premium reserve reserve distributable)

£’000 £’000 £’000 £’000 £’000

Opening balance as at 1 February 2021 5,780 61,635 425 731 107,450

(Loss)/proﬁt and total comprehensive

income for the year - - - - (26,784)

Contributions by and distributions to shareholders:

Repurchase of shares (88) - - 88 -

Shares issued 1,144 48,216 - - -

Costs of share issues - (306) - - -

Dividends paid - - - - -

Total contributions by and

distributions to shareholders 1,056 47,910 - 88 -

Closing balance as at 31 January 2022 6,836 109,545 425 819 80,666

for the year ended 31 January 2021

Non-distributable reserves

Capital

Capital reserve

Share Share Merger redemption (non-

capital premium reserve reserve distributable)

£’000 £’000 £’000 £’000 £’000

Opening balance as at 1 February 2020 4,703 26,084 425 629 35,762

Proﬁt/(loss) and total comprehensive

income for the year - - - - 71,688

Contributions by and distributions to shareholders:

Repurchase of shares (102) - - 102 -

Shares issued 1,179 35,875 - - -

Costs of share issues - (324) - - -

Dividends paid - - - - -

Total contributions by and

distributions to shareholders 1,077 35,551 - 102 -

Closing balance as at 31 January 2021 5,780 61,635 425 731 107,450

The accompanying notes on pages 60 to 75 are an integral part of these ﬁnancial statements.

Statement of Changes in Equity

Amati AIM VCT plc

Annual Report & Financial Statements 2022

57

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

Distributable reserves

Capital

Special reserve Revenue Total

reserve (distributable) reserve reserves

£’000 £’000 £’000 £’000

75,023 (11,420) (1,345) 238,279

- 5,316 (928) (22,396)

(3,431) - - (3,431)

- - - 49,360

- - - (306)

(14,432) - - (14,432)

(17,863) - - 31,191

57,160 (6,104) (2,273) 247,074

Distributable reserves

Capital

Special reserve Revenue Total

reserve (distributable) reserve reserves

£’000 £’000 £’000 £’000

86,479 (7,100) (658) 146,324

- (4,320) (687) 66,681

(3,170) - - (3,170)

- - - 37,054

198 - - (126)

(8,484) - - (8,484)

(11,456) - - 25,274

75,023 (11,420) (1,345) 238,279

Amati AIM VCT plc

Annual Report & Financial Statements 2022

58

2022 2021

Note £’000 £’000

Fixed assets

Investments held at fair value 8 214,737 215,398

Current assets

Debtors 9 1,972 46

Cash at bank 31,833 24,967

Total current assets 33,805 25,013

Current liabilities

Creditors: amounts falling due within one year 10 (1,468) (2,132)

Net current assets 32,337 22,881

Total assets less current liabilities 247,074 238,279

Capital and reserves

Called up share capital* 11 6,836 5,780

Share premium account* 109,545 61,635

Merger reserve* 425 425

Capital redemption reserve* 819 731

Capital reserve (non-distributable)* 80,666 107,450

Special reserve 57,160 75,023

Capital reserve (distributable) (6,104) (11,420)

Revenue reserve (2,273) (1,345)

Equity shareholders’ funds 247,074 238,279

Net asset value per share 12 180.7p 206.1p

* These reserves are not distributable.

The ﬁnancial statements on pages 55 to 59 were approved and authorised for issue by the Board of Directors on

12 April 2022 and were signed on its behalf by

Peter A. Lawrence

Chairman

Company Number 04138683

The accompanying notes on pages 60 to 75 are an integral part of these ﬁnancial statements.

Balance Sheet

as at 31 January 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

59

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

2022 2021

£’000 £’000

Cash ﬂows from operating activities

Investment income received 626 512

Investment management fees (4,427) (2,796)

Other operating costs (485) (449)

Net cash outﬂow from operating activities (4,286) (2,733)

Cash flows from investing activities

Purchases of investments (32,872) (15,991)

Disposals of investments 13,596 2,593

Net cash outﬂow from investing activities (19,276) (13,398)

Net cash outﬂow before ﬁnancing (23,562) (16,131)

Cash ﬂows from ﬁnancing activities

Proceeds of share issues* 46,748 35,570

Cost of share issues (306) (126)

Payments for share buy-backs (4,194) (2,437)

Equity dividends paid* (11,820) (7,000)

Net cash inﬂow from ﬁnancing activities 30,428 26,007

Increase in cash 6,866 9,876

Reconciliation of net cash ﬂow to movement in net cash

Increase in cash during the year 6,866 9,876

Net cash at 1 February 24,967 15,091

Net cash at 31 January 31,833 24,967

Reconciliation of (Loss)/Proﬁt on Ordinary Activities Before

Taxation to Net Cash Outﬂow from Operating Activities

(Loss)/proﬁt on ordinary activities before taxation (22,396) 66,681

Net loss/(gain) on investments 18,123 (69,766)

Less dividends reinvested (71) (67)

Increase in creditors, excluding corporation tax payable 64 406

(Increase)/decrease in debtors (6) 13

Net cash outflow from operating activities (4,286) (2,733)

* Adjusted to exclude non-cash dividends re-invested under the Dividend Re-investment Scheme.

The accompanying notes on pages 60 to 75 are an integral part of these ﬁnancial statements.

Statement of Cash Flows

for the year ended 31 January 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

60

1 Accounting Policies

Basis of Accounting

The ﬁnancial statements have been prepared under FRS 102 ‘The Financial Reporting Standard applicable in

the UK and Republic of Ireland’ and in accordance with the AIC SORP.

Basis of Preparation

The functional currency of the Company is Pounds Sterling because this is the currency of the primary

economic environment in which the Company operates. The ﬁnancial statements are presented in Pounds

Sterling rounded to the nearest thousand, except where otherwise indicated.

Going Concern

The ﬁnancial statements have been prepared on a going concern basis and on the basis that the Company

maintains VCT Status.

The Directors have made an assessment of the Company’s ability to continue as a going concern and are

satisﬁed that the Company has adequate resources to continue in operational existence for a period of 12

months from the date these ﬁnancial statements were approved.

In making this assessment, the Directors have considered in particular the likely economic effects and the

impacts of the war taking place in Ukraine, rising inﬂation and interest rates and the effects of the COVID-19

pandemic on the Company, operations and investment portfolio.

The Directors noted that the Company, with the current cash balance and holding a portfolio of liquid listed

investments, is able to meet the obligations of the Company as they fall due. The cash available enables the

Company to meet any funding requirements and ﬁnance future additional investments. The Company is a

closed-end fund, where assets are not required to be liquidated to meet day-to-day redemptions.

The Board has reviewed stress testing and scenario analysis prepared by the Investment Manager to assist

them in assessing the impact of changes in market value and income with associated cash ﬂows. In making

this assessment, the Investment Manager has considered plausible downside scenarios. These tests included

the modelling of a reduction in income of 50%, increase in costs of 50% and a reduction in net asset value of

50%, any or all of which could apply to any set of circumstances in which asset value and income are

signiﬁcantly impaired. It was concluded that in a plausible downside scenario, the Company could continue to

meet its liabilities. Whilst the economic future is uncertain, and the Directors believe that it is possible the

Company could experience further reductions in income and/or market value, the opinion of the Directors is

that this should not be to a level which would threaten the Company’s ability to continue as a going concern.

The Directors, the Investment Manager and the Company’s other service providers have put in place

contingency plans to minimise disruption. The Board was satisﬁed that there has been minimal impact to the

services provided during the year and are conﬁdent that this will continue. Furthermore, the Directors are not

aware of any material uncertainties that may cast signiﬁcant doubt on the Company’s ability to continue as a

going concern, having taken into account the liquidity of the Company’s investment portfolio and the

Company’s ﬁnancial position in respect of its cash ﬂows, borrowing facilities and investment commitments (of

which there are none of signiﬁcance). Therefore, the ﬁnancial statements have been prepared on the going

concern basis.

Segmental Reporting

The Directors are of the opinion that the Company is engaged in a single segment of business, being

investment business. The Company primarily invests in companies listed in the UK.

Notes to the Financial Statements

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Annual Report & Financial Statements 2022

61

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

Judgements and Key Sources of Estimation Uncertainty

The preparation of the Financial Statements requires management to make judgments, estimates and

assumptions that affect the application of policies and reported amounts in the ﬁnancial statements. The

estimates and associated assumptions are based on historical experience and various other factors that are

believed to be reasonable under the circumstances, the results of which form the basis of making judgements

about carrying values of assets and liabilities and the allocation of income and expenses that are not

apparent from other sources. The nature of estimation means that the actual outcomes could differ from those

estimates, possibly signiﬁcantly.

The most critical estimates and judgments relate to the determination of carrying value of unquoted

investments at fair value through proﬁt or loss. The policies for these are set out in the notes to the ﬁnancial

statements below. The Company values unquoted investments by following the International Private Equity

Venture Capital Valuation (“IPEV”) guidelines. Further areas requiring judgement and estimation are

recognising and classifying unusual or special dividends received as either capital or revenue in nature. The

estimates and underlying assumptions are reviewed on an ongoing basis. There are no further signiﬁcant

judgements or estimates in these ﬁnancial statements.

Income

Dividends receivable on quoted equity shares are taken to revenue on an ex-dividend basis except where, in

the opinion of the Directors, their nature indicates they should be recognised in the Capital Account. Where no

ex-dividend date is quoted, dividends are brought into account when the Company’s right to receive payment

is established.

Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis,

provided there is no reasonable doubt that payment will be received in due course.

Interest receivable is included in the accounts on an accruals basis. Where interest is rolled up or payable on

redemption it is recognised as income unless there is reasonable doubt as to its receipt.

All other income is accounted for on a time-apportioned accrual basis and is recognised in the Income

Statement.

Expenses

All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital

items presented within the income statement, all expenses have been prescribed as revenue items except as

follows:

Expenses are split and presented partly as capital items where a connection with the maintenance or

enhancement of the value of the investments held can be demonstrated, and accordingly the investment

management fee is currently allocated 25% to revenue and 75% to capital, which reﬂects the Directors’

expected long-term view of the nature of the investment returns of the Company.

Issue costs in respect of ordinary shares issued by the Company are deducted from the share premium

account.

Taxation

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date. Deferred tax assets are only recognised when they arise from timing differences where

recovery in the foreseeable future is regarded as more likely than not. Timing differences are differences

arising between the Company’s taxable proﬁts and its results as stated in the ﬁnancial statements which are

capable of reversal in one or more subsequent periods. Deferred tax is not discounted.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

62

1 Accounting Policies (continued)

Current tax is expected tax payable on the taxable income for the year, using tax rates enacted or

substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous

years. The tax effect of different items of expenditure is allocated between revenue and capital on the same

basis as a particular item to which it relates, using the Company’s effective rate of tax, as applied to those

items allocated to revenue, for the accounting year.

No tax liability arises on gains from sales of ﬁxed asset investments by the Company by virtue of its VCT

status.

Investments

In accordance with FRS 102, Sections 11 and 12, all investments held by the Company are designated as

held at fair value upon initial recognition and are measured at fair value through proﬁt or loss in subsequent

accounting periods. Investments are initially recognised at cost, being the fair value of the consideration given.

After initial recognition, investments are measured at fair value, with changes in the fair value of investments

recognised in the Income Statement and allocated to capital. Realised gains and losses on investments sold

are calculated as the difference between sales proceeds and cost. Also included within this heading are

transaction costs in relation to the purchase or sale of investments.

In respect of investments that are traded on AIM or are fully listed, these are valued at bid prices at close of

business on the Balance Sheet date. Investments traded on SETS (London Stock Exchange’s electronic trading

service) are valued at the last traded price as this is considered to be a more accurate indication of fair value.

Fair values for unquoted investments, or for investments for which the market is inactive, are established by

using various valuation techniques in accordance with IPEV guidelines. These are constantly monitored for

value and impairment. The values and impairment, if any, are approved by the Board. The shares may be

valued by using the most appropriate methodology recommended by the IPEV guidelines, including revenue

multiples, net assets, discounted cashﬂows and industry valuation benchmarks.

Convertible loan stock instruments are valued using present value of future payments discounted at a market

value of interest for a similar loan and valuing the option at fair value.

Contingent Value Rights (CVRs) pay out if certain hurdles are achieved and are valued at the amount payable

per share on achievement of those hurdles, discounted for certain probabilities and the time to the value date

to reﬂect the illiquidity of the holdings, and further discounted for payment, if it becomes due, being made

either in the form of loan notes or shares issue at market value.

The valuation of the Company’s investment in TB Amati UK Smaller Companies Fund is based on the

published share price. The valuation is provided by the Authorised Corporate Director of the fund, T Bailey

Fund Managers Limited.

Financial Instruments

The Company classiﬁes ﬁnancial instruments, or their component parts, on initial recognition as a ﬁnancial

asset, a ﬁnancial liability or an equity instrument in accordance with the substance of the contractual

arrangement. Financial instruments are recognised on trade date when the Company becomes a party to the

contractual provisions of the instrument. All ﬁnancial instruments are designated upon initial recognition as

held at fair value through proﬁt or loss, and are measured at subsequent reporting dates at fair value, with

changes in the fair value recognised in the Income Statement and allocated to capital.

Financial instruments are derecognised on the trade date when the Company is no longer a party to the

contractual provisions of the instrument.

Notes to the Financial Statements (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

63

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

Cash and Cash Equivalents

For the purposes of the Balance Sheet, cash comprises cash in hand and demand deposits. Cash equivalents

are short-term, highly liquid investments and money market funds that are readily convertible to known

amounts of cash and which are subject to insigniﬁcant risk of changes in value.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash

equivalents as deﬁned above, net of outstanding bank overdrafts when applicable.

Foreign Currency

Foreign currency assets and liabilities are translated into sterling at the exchange rates ruling at the balance

sheet date. Transactions during the year are converted into sterling at the rates ruling at the time the

transactions are executed. Any gain or loss arising from a change in exchange rate subsequent to the date of

the transaction is included as an exchange gain or loss in the capital reserve or the revenue account

depending on whether the gain or loss is of a capital or revenue nature.

Short-term Debtors and Creditors

Debtors and creditors with no stated interest rate and receivable within one year are recorded at transaction

price. Any losses arising from impairment are recognised in the income statement in other operating expenses

upon notiﬁcation.

Dividends Payable

Final dividends are included in the ﬁnancial statements when they are approved by shareholders. Interim

dividends payable are included in the ﬁnancial statements on the date on which they are paid.

Share Premium

The share premium account is a non-distributable reserve which represents the accumulated premium paid

on the issue of shares in previous periods over the nominal value, net of any expenses.

Merger Reserve

The merger reserve is a non-distributable reserve which originally represented the share premium on shares

issued when the Company merged with Singer & Friedlander AIM VCT and Singer & Friedlander AIM 2 VCT in

February 2006. The merger reserve is released to the realised capital reserve as the assets acquired as a

consequence of the merger are subsequently disposed of or permanently impaired. There have been no

disposals of these assets during the year.

Capital Redemption Reserve

The capital redemption reserve represents non-distributable reserves that arise from the purchase and

cancellation of shares.

Special Reserve

The special reserve is a distributable reserve which was created by the authorised reduction of the share

premium account and can be applied in any manner in which the Company’s proﬁts available for distribution

(as determined in accordance with the Companies Act 2006) are able to be applied.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

64

1 Accounting Policies (continued)

Capital Reserve

The following are taken to the capital reserve through the capital column in the Income Statement:

Capital reserve – other, forming part of the distributable reserves:

• gains and losses on the disposal of investments;

• realised exchange gains and losses of a capital nature; and

• expenses allocated to this reserve in accordance with the above policies

Capital reserve – investment holding gains, not distributable:

•

increase and decrease in the value of investments held at the year end; and

• unrealised exchange gains of a capital nature.

Revenue Reserve

The revenue reserve represents accumulated proﬁts and losses and any surplus proﬁt is distributable by way

of dividends.

2 Income

Year to Year to

31 January 31 January

2022 2021

£’000 £’000

Income:

Dividends from UK companies 701 554

Interest from deposits - 13

701 567

3 Management Fees

The Manager provides investment management and administration, secretarial and fund accounting services

to the Company under an Investment Management Agreement (“IMA”) and a Fund Administration, Secretarial

Services and Fund Accounting Agreement (“FASSFAA”). Details of these agreements are given on page 19.

Under the IMA the Manager receives an investment management fee of 1.75% of the net asset value of the

Company quarterly in arrears.

The Company received a rebate of its management fee for the investment in the TB Amati UK Smaller

Companies Fund.

The investment management fee for the year was as follows:

Year to Year to

31 January 31 January

2022 2021

£’000 £’000

Due to the Manager by the Company at 1 February 1,016 615

Investment management fee charged to revenue and capital for the year 4,460 3,197

Fee paid to the Manager during the year (4,427) (2,796)

Due to the Manager by the Company at 31 January 1,049 1,016

Notes to the Financial Statements (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

65

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

In addition to the investment management fee the Manager also receives a secretarial and administration fee

of £96,000 (2021: £95,000) paid quarterly in arrears. As detailed in the Fund Management and Key Contracts

on page 19, the original investment management agreement from 2010 was revised and updated in two

separate agreements on 30 September 2019, a IMA and a FASSFAA. The FASSFAA’s updated fee allowed for

the costs incurred by the Manager for fund administration, secretarial services and fund accounting to be fully

recovered from the Company where they had not been previously. The fee level in the FASSFAA is subject to

an annual increase in line with the retail prices index; with effect from 01 February 2021 the annual increase

will be in line with consumer price index. See note 4.

No performance fee is payable in respect of the year ended 31 January 2022, as the Manager has waived all

performance fees from 31 July 2014 onwards.

Annual running costs are capped at 3.5% of the Company’s net assets. If the annual running costs of the

Company in any year are greater than 3.5% of the Company’s net assets, the excess is met by the Manager by

way of a reduction in future management fees. The annual running costs include the Directors’ and Manager’s

fees, professional fees and the costs incurred by the Company in the ordinary course of its business (but

excluding any commissions paid by the Company in relation to any offers for subscription, any performance fee

payable to the Manager, irrecoverable VAT and exceptional costs, including winding-up costs).

4 Other Expenses

Year to Year to

31 January 31 January

2022 2021

£’000 £’000

Directors’ remuneration 109 93

Directors’ employer’s national insurance 4 4

Directors’ expenses 2 -

Auditor’s remuneration – audit of statutory ﬁnancial statements 35 30

Administration and secretarial services 94 94

Other expenses 270 234

514 455

The Company has no employees. The Directors are therefore the only key management personnel.

Details of Directors’ remuneration are provided in the audited section of the directors’ remuneration report on

page 45.

5 Tax on Ordinary Activities

5a Analysis of charge for the year

Year to Year to

31 January 31 January

2022 2021

£’000 £’000

Charge for the year - -

Amati AIM VCT plc

Annual Report & Financial Statements 2022

66

5 Tax on Ordinary Activities (continued)

5b Factors affecting the tax charge for the year

Year to Year to

31 January 31 January

2022 2021

£’000 £’000

(Loss)/proﬁt on ordinary activities before taxation (22,396) 66,681

Corporation tax at standard rate of 19% (2021: 19%) (4,255) 12,669

Effect of:

Non-taxable dividends (133) (105)

Non-taxable losses/(gains) on investments 3,443 (13,255)

Movement in excess management expenses 945 691

Tax charge for the year (note 5a) - -

Due to the Company’s tax status as an approved Venture Capital Trust, deferred tax has not been

provided on any net capital gains arising on the disposal of investments as such gains are not taxable.

No deferred tax asset has been recognised on surplus management expenses carried forward as it is not

envisaged that future taxable proﬁt will be available against which the Company can use the beneﬁts.

The amount of unrecognised deferred tax asset is £5,992,000 (31 January 2021: £3,609,000). These

values reﬂect prospective corporate tax rates of 25% and 19% substantively enacted at the respective

balance sheet dates.

6 Dividends

Amounts recognised as distributions to equity holders during the year:

2022 2022 2021 2021

Revenue Capital Revenue Capital

£’000 £’000 £’000 £’000

Second interim dividend for the year ended 31 January 2020 of

4.25p per ordinary share paid on 24 July 2020 - - - 4,472

Interim dividend for the year ended 31 January 2021 of

3.50p per ordinary share paid on 27 November 2020 - - - 4,012

Final dividend for the year ended 31 January 2021 of

7.00p per ordinary share paid on 23 July 2021 - 8,278 - -

Interim dividend for the year ended 31 January 2022

of 4.50p per ordinary share paid on 26 November 2021 - 6,154 - -

- 14,432 - 8,484

Set out below are the interim and ﬁnal dividends paid or proposed on ordinary shares in respect of the

ﬁnancial year:

2022 2022 2021 2021

Revenue Capital Revenue Capital

£’000 £’000 £’000 £’000

Interim dividend for the year ended 31 January 2022

of 4.50p per ordinary share (2021: 3.50p) - 6,154 - 4,012

Declared ﬁnal dividend for the year ended 31 January 2022

of 4.50p per ordinary share (2021: 7.00p)* - 6,698 - 8,278

- 12,852 - 12,290

* Based on shares in issue on 12 April 2022. The payment of a ﬁnal dividend will, as always, be subject to ensuring that the Company has sufﬁcient distributable

reserves at the time of payment.

Notes to the Financial Statements (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

67

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

7 Earnings per Share

2022 2021

Basic and Basic and

diluted diluted

Net(loss) Weighted Earnings Net(loss) Weighted Earnings

/proﬁt average per share /proﬁt average per share

£’000 shares pence £’000 shares pence

Revenue (928) (0.73)p (687) (0.64)p

Capital (21,468) (16.93)p 67,368 62.76p

Total (22,396) 126,840,235 (17.66)p 66,681 107,332,617 62.12p

8 Investments

Level 1* Level 2* Level 3* Total

£’000 £’000 £’000 £’000

Opening cost as at 1 February 2021 107,385 - 2,054 109,439

Opening investment holding gains 107,381 - 69 107,450

Opening unrealised loss recognised in realised reserve (228) - (1,263) (1,491)

Opening fair value as at 1 February 2021 214,538 - 860 215,398

Analysis of transactions during the year:

Realised (losses)/gains on sales (679) - 744 65

Unrealised losses on investments (18,167) - (21) (18,188)

Purchases at cost 27,977 - 5,000 32,977

Sales proceeds received (14,644) - (871)** (15,515)

Closing fair value as at 31 January 2022 209,025 - 5,712 214,737

Closing cost as at 31 January 2022 128,607 - 6,955 135,562

Closing investment holding gains as at 31 January 2022 80,646 - 20 80,666

Closing unrealised loss recognised in

realised reserve as at 31 January 2022 (228) - (1,263) (1,491)

Closing fair value as at 31 January 2022 209,025 - 5,712 214,737

Equity shares 209,025 - 501 209,526

Preference shares - - - -

CVRs - - 711 711

Convertible loan notes - - 4,500 4,500

Closing fair value as at 31 January 2022 209,025 - 5,712 214,737

* Refer to note 14 for deﬁnitions

** Includes ﬁnal repayment of China Food Company plc Loan Notes now fully disposed.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

68

8 Investments (continued)

Holdings of ordinary shares in unquoted companies rank pari passu for voting purposes. Preference shares

and CVRs have no voting rights.

The Company received £15,515,000 (2021: £2,381,000) from the sale of investments in the year. The

bookcost of these investments when they were purchased was £6,855,000 (2021: £3,825,000). 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.

2022 2021

£’000 £’000

Realised gains on disposal 65 911

Unrealised (losses)/gains on investments during the year (18,188) 68,855

Net (losses)/gains on investments (18,123) 69,766

Transaction Costs

During the year the Company incurred transaction costs of £44,000 (31 January 2021: £nil) and £8,000 (31

January 2021: £3,000) on purchases and sales of investments respectively. These amounts are included in the

gain on investments as disclosed in the income statement.

9 Debtors

2022 2021

£’000 £’000

Receivable for investments sold 1,919 -

Prepayments and accrued income 53 46

1,972 46

10 Creditors: Amounts Falling due within One Year

2022 2021

£’000 £’000

Payable for share buy-backs 249 1,012

Payable for investments bought 34 -

Other creditors 1,185 1,120

1,468 2,132

11 Called Up Share Capital

2022 2022 2021 2021

Ordinary shares (5p shares) Number £’000 Number £’000

Allotted, issued and fully paid at 1 February 115,589,550 5,780 94,039,012 4,703

Issued during the year 22,880,426 1,144 23,589,915 1,179

Repurchase of own shares for cancellation (1,749,179) (88) (2,039,377) (102)

At 31 January 136,720,797 6,836 115,589,550 5,780

During the year a total of 1,749,179 ordinary shares of 5p each were purchased by the Company at an

average price of 1.96p per share.

Further details of the Company’s share capital and associated rights are shown in the Directors’ Report on

page 33.

Notes to the Financial Statements (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

69

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

12 Net Asset Value per Ordinary Share

2022 2021

Net NAV NAV

assets Ordinary per share Net assets Ordinary per share

£’000 shares pence £’000 shares pence

Ordinary share 247,074 136,720,797 180.7 238,279 115,589,550 206.1

13 Significant Interests

The Company has the following signiﬁcant interests (amounting to an investment of 3% or more of the equity

capital of an undertaking):

Nominal % held

Falanx Group Limited 80,500,000 15.3

Northcoders Group plc 1,000,000 14.4

Polarean Imaging plc 25,114,469 12.0

Getech Group plc 7,727,000 11.6

Leisurejobs.com Limited 58,688 11.4

Ixico plc 5,031,300 10.5

Rosslyn Data Technologies plc 35,274,692 10.4

Fusion Antibodies plc 2,341,463 9.0

Hardide plc 4,521,963 8.1

One Media iP Group plc 17,714,000 8.0

Block Energy plc 51,136,000 7.8

Glantus Holdings plc 2,941,176 7.8

Saeitta Group plc 5,364,232 6.3

Rua Life Sciences plc 1,358,348 6.1

Intelligent Ultrasound plc 15,869,000 5.9

Sosandar plc 12,480,000 5.6

Diurnal Group plc 9,500,000 5.6

Byotrol plc 25,000,001 5.5

Aptamer Group plc 3,142,042 4.6

Zenova Group plc 3,947,368 4.2

Water Intelligence plc 814,660 4.2

Tristel plc 1,844,046 3.9

Velocys plc 53,987,142 3.9

Eden Research plc 14,282,652 3.8

Kinovo plc 2,155,010 3.5

Velocity Composites plc 1,150,294 3.2

Arecor Therapeutics plc 840,708 3.0

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Annual Report & Financial Statements 2022

70

14 Financial Instruments

The Company’s ﬁnancial instruments comprise equity, CVRs and ﬁxed interest investments, cash balances

and liquid resources including debtors and creditors. The Company holds ﬁnancial assets in accordance with

its investment policy to invest in qualifying investments predominantly in AIM traded companies or companies

to be traded on AIM.

Classification of financial instruments

The Company held the following categories of ﬁnancial instruments at 31 January:

2022 2022 2021 2021

Book value Fair value Book value Fair value

£’000 £’000 £’000 £’000

Assets at fair value through proﬁt or loss

Investments 214,737 214,737 215,398 215,398

Assets measured at amortised cost:

Accrued income and other debtors 1,972 1,972 46 46

Cash at bank 31,833 31,833 24,967 24,967

Liabilities (amounts due within one year) measured at amortised cost:

Payable for investments bought (282) (282) (1,007) (1,007)

Accrued expenses (1,186) (1,186) (1,125) (1,125)

Total for ﬁnancial instruments 247,074 247,074 238,279 238,279

Investments (see note 8) are measured at fair value. For quoted securities this is generally the bid price or, in

the case of SETS securities, the last traded price. As explained in note 8, unquoted investments are valued in

accordance with the IPEV guidelines. Changing one or more inputs for level 3 assets would not have a

signiﬁcant impact on the valuation. For example, revenue multiple calculations are used to value some

unquoted equity holdings. These multiples are derived from a basket of comparable quoted companies, with

appropriate discounts applied. These discounts are subjective and based on the Manager’s experience. In

respect of unquoted investments, these are valued by the Directors using rules consistent with IPEV guidelines.

Investments in TB Amati UK Smaller Companies Fund are based on the published fund mid-price NAV. The fair

value of all other ﬁnancial assets and liabilities is represented by their carrying value in the balance sheet.

The Company’s investing activities expose it to various types of risk that are associated with the ﬁnancial

instruments and markets in which it invests. The most important types of ﬁnancial risk to which the Company

is exposed are market risk, credit risk and liquidity risk. The nature and extent of the ﬁnancial instruments

outstanding at the balance sheet date and the risk management policies employed by the Company are

discussed below.

The Company measures fair values using the following fair value hierarchy into which the fair value

measurements are categorised. A fair value measurement is categorised in its entirety on the basis of the

lowest level input that is signiﬁcant to the fair value measurement of the relevant asset 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.

The Company’s level 1 investments are AIM traded companies and fully listed companies.

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.

The Company’s level 2 assets are valued using models with signiﬁcant observable market parameters.

Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

Level 3 fair values are measured using a valuation technique that is based on data from an unobservable

market. Discussions are held with management, statutory accounts, management accounts and cashﬂow

forecasts are obtained, and fair value is based on multiples of revenue.

Notes to the Financial Statements (continued)

Amati AIM VCT plc

Annual Report & Financial Statements 2022

71

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

Financial assets at fair value

Year ended 31 January 2022 Year ended 31 January 2021

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Equity shares 209,025 - 501 209,526 214,538 - 81 214,619

Preference shares ----- - 47 47

CVRs - - 711 711 - - 732 732

Convertible

loan notes - - 4,500 4,500 - - - -

209,025 - 5,712 214,737 214,538 - 860 215,398

Level 3 financial assets at fair value

Year ended 31 January 2022 Year ended 31 January 2021

Equity Preference Loan Equity Preference Loan

shares shares stock CVR Total shares shares stock CVR Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Opening balance

at 1 February 81 47 - 732 860 81 47 - 339 467

Purchases at cost 500 - 4,500 - 5,000 - - - - -

Disposal proceeds (353) (207) (311) - (871) - - (93) - (93)

Total net gains/(losses)

recognised in the

income statement 273 160 311 (21) 723 - - 93 393 486

Closing balance

at 31 January 501 - 4,500 711 5,712 81 47 - 732 860

The fair value of the Level 3 investments are derived as follows:

Equity shares are valued by using revenue multiples, net assets, discounted cashﬂows and industry valuation

benchmarks.

Contingent Value Rights (CVRs) pay out if certain hurdles are achieved and are valued at the amount payable

per share on achievement of those hurdles, discounted for certain probabilities and the time to the value date

to reﬂect the illiquidity of the holdings, and further discounted for payment, if it becomes due, being made

either in the form of loan notes or shares issued at market value.

Convertible Loan Notes (CLNs) are valued using the present value of future payments, benchmarking to a

similar CLN. The value will also be referenced to the underlying assets held and disclosures made by the

underlying investee company.

15 Risks

The identified risks arising from the financial instruments are market risk (which comprises market price risk

and foreign currency risk), liquidity risk and credit and counterparty risk.

The Board and Investment Manager consider and review the risks inherent in managing the Company’s

assets which are detailed below.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

72

16 Market Risk

Market risk arises from uncertainty about the future prices of ﬁnancial instruments held in accordance with

the Company’s investment objectives. It represents the potential loss that the Company might suffer through

holding positions by the way of price movements, interest rate movements and exchange rate movements.

The Company’s strategy on the management of market risk is driven by the Company’s investment objective

as outlined on page 17. The management of market risk is part of the investment management process. The

Board seeks to mitigate the internal risks by setting policy, regular reviews of performance, enforcement of

contractual obligations and monitoring progress and compliance with an awareness of the effects of adverse

price movements through detailed and continuing analysis, with an objective of maximising overall returns to

shareholders. Investments in unquoted stocks and AIM traded companies, by their nature, involve a higher

degree of risk than investments in the Main Market. Some of that risk can be mitigated by diversifying the

portfolio across business sectors and asset classes. The Company’s overall market positions are regularly

monitored by the Board and at quarterly Board meetings.

Market price risk

Market price risk arises from any ﬂuctuations in the value of investments held by the Company. Adherence to

investment policies mitigates the risk of excessive exposure to any particular type of security or issuer. The

portfolio is managed with an awareness of the effects of adverse price movements through detailed and

continuing analysis with the objective of maximising overall returns to shareholders.

The assessment of market risk is based on the Company’s portfolio as held at the year end. The assessment

uses the AIM All-Share Index as a proxy for the AIM Qualifying Investments and quoted Non-Qualifying

Investments and illustrates, based on historical price movements, their potential change in value to the AIM

All-Share Index.

The review has also examined the potential impact of a movement in the market on the CLN investments held

by the Company, whose values will vary according to the value of the underlying security into which the loan

note instrument has the option to convert.

As at 31 January 2022 97.34% (31 January 2021: 99.60%) of the Company’s investments are traded. A 30%

decrease in stock prices as at 31 January 2022 would have decreased the net assets attributable to the

Company’s shareholders and increased the loss for the year by £62,708,000 (31 January 2021: £64,361,000);

an equal change in the opposite direction would have increased the net assets attributable to the Company’s

shareholders and turned the loss into a proﬁt for the year by an equal amount.

As at 31 January 2022 2.66% (31 January 2021: 0.40%) of the Company’s investments are in unquoted

companies held at fair value. A change in market inputs that would result in a 30% decrease in the valuations

of unquoted investments at 31 January 2022 would have decreased the net assets attributable to the

Company’s shareholders and increased the loss for the year by £1,714,000 (31 January 2021: £258,000); an

equal change in the opposite direction would have increased the net assets attributable to the Company’s

shareholders and reduced the loss for the year by an equal amount.

Currency risk

The Company’s performance is measured in sterling, a proportion of the Company’s assets may be either

denominated in other currencies or are in investments with currency exposure. Any income denominated in a

foreign currency is converted into sterling upon receipt. At the Balance Sheet date, the Company exposure to

USD consisted of investments of £2,846,000 (31 January 2021: £860,000).

A 5% rise or decline of Sterling gains foreign currency (i.e. non Pounds Sterling) assets and liabilities held at

the year end would have increased/decreased the net asset value by £142,000 (2021: £43,000).

Notes to the Financial Statements (continued)

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73

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

Interest Rate Risk

Interest rate movements may affect the level of income receivable on cash deposits and any ﬁxed interest

securities. The Company holds two ﬁxed interest investments £4,500,000 (2020: £nil). Interest receivable is

determined by whether the underlying investee companies of the Convertible Loan Notes held will list on AIM.

The Company holds a cash balance at 31 January 2022 of £31,833,000 (2021: £24,967,000). If the level of

cash was maintained for a year, a 1% increase in interest rates would increase the revenue return and net

assets by £318,000 (2021: £249,000). Management proactively manages cash balances. If there were a fall

of 1% in interest rates, it would potentially impact the Company by turning positive interest to negative

interest. The total effect would be a revenue reduction/cost increase of £318,000 (2021: £249,000).

17 Credit Risk

Credit risk is the risk that the counterparty to a ﬁnancial instrument will fail to discharge an obligation or

commitment that it has entered into with the Company. The carrying amount of ﬁnancial assets best

represents the maximum credit risk exposure at the balance sheet date. At 31 January 2022, the ﬁnancial

assets exposed to credit risk, representing convertible loan stock instruments, amounts due from brokers,

accrued income and cash amounted to £38,267,000 (31 January 2021: £25,013,000). The convertible loan in

Sorbic International plc is secured over the buildings and land use rights of the companies.

Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to

unsettled transactions is considered to be small due to the short settlement period involved, the high credit

quality of the brokers used and the fact that almost all transactions are on a ‘delivery versus payment’ basis.

The Manager monitors the quality of service provided by the brokers used to further mitigate this risk.

All the assets of the Company which are tradeable on AIM are held by The Bank of New York Nominees, the

Company’s custodian. Bankruptcy or insolvency of the custodian may cause the Company’s rights with

respect to securities held by the custodian to be delayed or limited.

At 31 January 2022, cash held by the Company was held by The Bank of New York Mellon. Bankruptcy or

insolvency of the institutions may cause the Company’s rights with respect to the cash held by it to be

delayed or limited. Should the credit quality or the ﬁnancial position of the institutions deteriorate signiﬁcantly

the Company has the ability to move the cash at short notice. The Board monitor the credit worthiness of

BNYM, currently rated at Aa1 (Moody’s).

There were no signiﬁcant concentrations of credit risk to counterparties at 31 January 2022 or 31 January 2021.

18 Liquidity Risk

The Company’s ﬁnancial instruments include investments in unlisted equity investments which are not traded

in an organised public market and which generally may be illiquid. As a result, the Company may not be able

to quickly liquidate some of its investments in these instruments at an amount close to their fair value in order

to meet its liquidity requirements, or to respond to speciﬁc events such as deterioration in the creditworthiness

of any particular issuer. The proportion of the portfolio invested in unlisted equity investments is not

considered signiﬁcant given the amount of investments in readily realisable securities.

The Company’s liquidity risk is managed on an ongoing basis by the Manager in accordance with policies and

procedures in place as described in the Strategic Report on pages 20 to 23. The Company’s overall liquidity

risks are monitored on a quarterly basis by the Board.

The Company maintains sufﬁcient investments in cash and readily realisable securities to pay accounts

payable and accrued expenses. At 31 January 2022, these investments were valued at £132,107,000 (31

January 2021: £159,776,000). The Directors consider that frequently traded AIM investments with a market

capitalisation of greater than £200m represent readily realisable securities. The Company is a closed-end

fund, assets do not need to be liquidated to meet redemptions, and sufﬁcient liquidity is maintained to meet

obligations as they fall due.

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Annual Report & Financial Statements 2022

74

19 Capital Management Policies and Procedures

The Company’s capital management objectives are:

• to ensure that it will be able to continue as a going concern;

• to satisfy the relevant HMRC requirements; and

• to maximise the income and capital return to its shareholders.

As a VCT, the Company must have, within 3 years of raising its capital, at least 80% by value of its

investments in VCT qualifying holdings, which are relatively high-risk UK smaller companies. In addition at

least 30% of new money raised during an accounting period must be invested in qualifying holdings within 12

months of the end of the ﬁnancial year in which the funds are raised. In satisfying these requirements, the

Company’s capital management scope is restricted. The Company does have the option of maintaining or

adjusting its capital structure by varying dividends, returning capital to shareholders, issuing new shares or

selling assets to maintain a certain level of liquidity. There has been no change in the objectives, policies or

processes for managing capital from the previous year.

The structure of the Company’s capital is described in note 11 and details of the Company’s reserves are

shown in the Statement of Changes in Equity on pages 56 and 57.

The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s

capital on an ongoing basis. This review includes:

• the need to buy back equity shares for cancellation, which takes account of the difference between the

net asset value per share and the share price (i.e. the premium or discount);

• the need for new issues of shares; and

• the extent to which revenue in excess of that which is to be distributed should be retained.

The Company is subject to externally imposed capital requirements:

a. as a public limited company, the Company is required to have a minimum share capital of £50,000; and

b. in accordance with the provisions of the Income Tax Act 2007, the Company as a Venture Capital Trust:

i) is required to make a distribution each year such that it does not retain more than 15% of income

from shares and securities; and

ii) is required to derive 70% of its income from shares and securities.

These requirements are unchanged since last year and the Company has complied with them at all times.

20 Post Balance Sheet Events

On 24 February 2022, following the Company’s year end, in the largest conventional military attack in Europe

since World War II, Russia began an invasion of Ukraine. Global markets reacted with shock, AIM itself fell by

3% in one day. Markets have fallen further with the effect of economic sanctions rolled out across the world,

with AIM falling further since. This has had an inevitable impact on the Company’s net asset value but the

Directors continue to be of the view that the Company is a going concern that is viable into the longer term.

The Company announced the re-opening of the Offer on 16 February 2022 and raised a further £25,000,000

which was available under the over-allotment facility.

The following transactions have taken place between 31 January 2022 and the date of this report:

• 12,280,842 shares allotted

• 150,616 shares bought back

Notes to the Financial Statements (continued)

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75

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Financial Statements

Highlights

21 Related Parties

The Company retains Amati Global Investors as its Manager. Details of the agreement with the Manager are

set out on page 19. The number of ordinary shares in the Company (all of which are held beneﬁcially) by

certain members of the management team are:

31 January 31 January 31 January 31 January

2022 2022 2021 2021

shares held % shares held shares held % shares held

Paul Jourdan 723,985 0.53% 631,470 0.54%

David Stevenson 26,753 0.02% 17,583 0.02%

Anna Macdonald

*

7,855 0.01% n/a n/a

* Subsequent to the year end Anna Macdonald's shareholding increased by 4,807 shares under the Offer on 2 March 2022.

The remuneration of the Directors, who are key management personnel of the Company, is disclosed in the

Directors’ Remuneration Report on page 45, and in note 4 on page 65.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

76

Share Price

The Company’s shares are listed on the London Stock

Exchange. The bid price of the Company’s shares can

be found on Amati Global Investors’ website:

www.amatiglobal.com.

Net Asset Value per Share

The Company’s net asset value per share as at 31

January 2022 was 180.7p. The Company normally

announces its net asset value on a weekly basis. Net

asset value per share information can be found on the

Amati Global Investors’ website: www.amatiglobal.com.

Dividends

Shareholders who wish to have future dividends re-

invested in the Company’s shares or wish to have

dividends paid directly into their bank account rather

than sent by cheque to their registered address should

contact The City Partnership (UK) Ltd on 01484 240

910 or email amativct@city.uk.com.

Financial Calendar

September 2022 Half-yearly Report for the six

months ending 31 July 2022 to

be circulated to shareholders

31 January 2023 Year-end

Annual General Meeting

The Annual General Meeting of the Company will be

held on 16 June 2022 at the Barber-Surgeons’ Hall,

Monkwell Square, Wood Street, Barbican, London EC2Y

5BL starting at 2pm. The notice of the meeting is

included at pages 79 to 84 of this report.

Shareholder Information

Table of Historic Returns from launch to 31 January 2022

attributable to shares issued by the original VCTs

which have made up Amati AIM VCT

Numis

NAV Total NAV Total Alternative

Return with Return with Markets

dividends dividends not Total Return

Launch date Merger date re-invested re-invested Index

Singer & Friedlander AIM 3 VCT

(‘C’ shares) 4 April 2005 8 December 2005 78.8% 40.1% 38.6%

Amati VCT plc 24 March 2005 4 May 2018 186.3% 97.1% 33.7%

Invesco Perpetual AIM VCT 30 July 2004 8 November 2011 58.2% 2.0% 69.8%

Singer & Friedlander AIM 3 VCT* 29 January 2001 n/a 63.0% 26.7% -0.5%

Singer & Friedlander AIM 2 VCT 29 February 2000 22 February 2006 24.9% -3.5% -49.2%

Singer & Friedlander AIM VCT 28 September 1998 22 February 2006 -14.8% -14.2% 54.6%

* Singer & Friedlander AIM 3 VCT changed its name to ViCTory VCT on 22 February 2006, to Amati VCT 2 on 9 November 2011 and to Amati AIM VCT plc on 4 May 2018.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

77

An Alternative Performance Measure (“APM”) is a numerical measure of the Company’s current, historical or future

ﬁnancial performance, ﬁnancial position or cash ﬂows, other than a ﬁnancial measure deﬁned or speciﬁed in the

applicable ﬁnancial framework.

The Company uses the following Alternative Performance Measures:

Net Asset Value (“NAV”) per share

The NAV per share of the Company is the sum of the underlying assets less the liabilities of the Company divided

by the total number of shares in issue.

NAV calculation 31 January 2022 31 January 2021

Net assets (£’000) 247,074 238,279 (a)

Number of Ordinary shares in issue 136,720,797 115,589,550 (b)

NAV (c = (a/b) * 100) 180.7p 206.1p (c)

Discount/Premium

The price of a share is derived from buyers and sellers agreeing a price at which to trade their shares. For Venture

Capital Trusts the company is the principal buyer of the shares of sellers via buybacks (see Capital Management in

note 19). The share price may not be identical to the NAV per share of the underlying assets less liabilities of the

Company. If the share price is lower than the NAV per share, the shares are trading at a discount. Shares trading

at a price above NAV per share are said to be at a premium.

Discount calculation 31 January 2022 31 January 2021

Closing NAV per share (p) 180.7 206.1 (a)

Closing share price (p) 166.5 190.5 (b)

Discount (c = ((a-b)/a)) 7.9% 7.6% (c)

Ongoing charges ratio

All operating costs, of a capital or revenue nature, payable by the Company and expected to be regularly incurred.

These exclude the costs of acquisition or disposal of investments, ﬁnancing charges, and gains or losses on

investments. They are the best estimate of future costs. The ongoing charges ratio is the annualised operating

costs divided by the average NAV over the period.

Ongoing charges calculation 31 January 2022 31 January 2021

Management fee (£’000) 4,460 3,197

Other administrative expenses (£’000) 514 455

Total management fee and other administrative expenses (£’000) 4,974 3,652 (a)

Average net assets in the year (£) 265,497,028 174,294,968 (b)

Ongoing charges (c = a/b) 1.9% 2.1% (c)

Alternative Performance Measures

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Information for Shareholders

Highlights

Amati AIM VCT plc

Annual Report & Financial Statements 2022

78

Total Return

The return to shareholders calculated on a per share basis by adding dividends paid in the period to the increase

or decrease in the Share price or NAV per share in the period. The dividends are assumed to have been re-invested

in the form of shares or net assets respectively, on the date on which the shares were quoted ex-dividend and this

is accounted for in the “Compounding effect from re-investing dividends line”.

NAV total return calculation 31 January 2022 31 January 2021

Closing NAV per share (p) 180.7 206.1

Add back ﬁnal dividend for the year ended 31 January 2021 (2020)(p) 7.00 4.25

Add back interim dividend for the year ended 31 January 2022 (2021)(p) 4.50 3.50

Compounding effect from re-investing dividends (p) -1.60 2.25

Re-stated closing NAV per share assuming dividends re-invested (p) 190.6 216.1 (a)

Opening NAV per share (p) 206.1 155.6 (b)

NAV total return (c = ((a - b)/b)) (%) -7.5% 38.9% (c)

Alternative Performance Measures (continued)

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Annual Report & Financial Statements 2022

79

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Information for Shareholders

Highlights

This document is important and requires your

immediate attention. If you are in any doubt about any

aspect of the proposals referred to in this document or

about the action which you should take, you should

seek your own advice immediately from a stockbroker,

solicitor, accountant or other independent professional

adviser. If you have sold or otherwise transferred all of

your shares, please pass this document, together with

the accompanying documents, to the purchaser or

transferee, or to the person who arranged the sale or

transfer, so they can pass these documents to the

person who now holds the shares.

It is the Board’s opinion that all Resolutions are in the

best interests of shareholders as a whole and the Board

recommends that shareholders should vote in favour of

all Resolutions.

Attendance at the meeting

The Company intends for the meeting to be held in

person, subject to any changes in guidance from the

Government regarding the Covid-19 pandemic. The

AGM will also be live-streamed for those who wish to

view it but cannot attend in person.

As is our normal practice, there will be live voting for

those physically present at the AGM. Shareholders are

advised that it will not be possible to vote or ask

questions virtually during the live-stream and we

therefore request all shareholders, and particularly

those who cannot attend physically, to submit their

votes by proxy, ahead of the deadline of 2pm on

Tuesday 14 June 2022 to ensure that their vote counts

at the AGM. If you hold your shares in a nominee

account, such as through a share dealing service or

platform, you will need to contact your provider and ask

them to submit the proxy votes on your behalf. For

further instructions on proxy voting, please refer to the

notes on pages 82 to 84 of this document.

Shortly ahead of the AGM, the Company’s Manager will

post a link and instructions on how to join the event on

its homepage at www.amatiglobal.com.

Shareholders who are unable to join the meeting

physically can email any questions they may have

either on the business of the AGM or the portfolio to

info@amatiglobal.com by 10 June 2022. The

Company’s Manager will publish questions together

with answers on the page dedicated to the AGM on the

Manager’s website prior to the AGM being held. The

Company’s Manager will reply to any individual

shareholder questions submitted by the deadline of

10 June 2022, before the AGM.

Notice is hereby given that the annual general

meeting of Amati AIM VCT plc (the “Company”) will

be held at the Barber-Surgeons’ Hall, Monkwell

Square, Wood Street, Barbican, London EC2Y 5BL on

Thursday 16 June 2022 starting at 2pm (the

“Meeting”) for the transaction of the following

business:

ORDINARY BUSINESS

To consider, and if thought ﬁt, to pass the following

Resolutions 1 to 10 as Ordinary Resolutions of the

Company:

Ordinary Resolutions

1. To receive and adopt the Directors’ Report and

Financial Statements of the Company for the

ﬁnancial year ended 31 January 2022 together

with the Independent Auditor’s Report thereon.

2. To approve the Directors’ Annual Report on

Remuneration for the ﬁnancial year ended 31

January 2022.

3. To approve a ﬁnal dividend of 4.5p per share

payable on 22 July 2022 to shareholders on the

register at 17 June 2022.

4. To re-appoint BDO LLP of 55 Baker Street, London,

W1U 7EU as auditor of the Company from the

conclusion of the Meeting until the conclusion of

the next annual general meeting of the Company

to be held in 2023 at which ﬁnancial statements

are laid before the Company.

5. To authorise the Directors to ﬁx the remuneration

of the auditor.

6. To elect Fiona Wollocombe as a Director of the

Company.

7. To re-elect Susannah Nicklin as a Director of the

Company.

8. To re-elect Julia Henderson as a Director of the

Company.

9. To re-elect Brian Scouler as a Director of the

Company.

Notice of Annual General Meeting

Amati AIM VCT plc

Annual Report & Financial Statements 2022

80

Notice of Annual General Meeting (continued)

10. THAT, in substitution for all subsisting authorities

to the extent unused, the Directors of the Company

be and are hereby generally and unconditionally

authorised in accordance with section 551 of the

Companies Act 2006 (the “Act”), to exercise all the

powers of the Company to allot Ordinary Shares of

5 pence each in the capital of the Company

("Ordinary Shares") and to grant rights to

subscribe for or to convert any security into

Ordinary Shares (“Rights”) up to an aggregate

nominal value of £2,450,000 (being equal to

approximately 33 per cent. of the Company’s

issued share capital (excluding treasury shares) as

at 12 April 2022, being the latest practicable date

prior to the date of the notice of this meeting),

provided that:

i. the authority hereby conferred by this

Resolution shall expire (unless previously

renewed, varied or revoked by the Company

in general meeting) on the earlier of the date

of the annual general meeting of the

Company to be held in 2023 and the date

which is 15 months after the date on which

this resolution is passed; and

ii. this authority shall allow the Company to

make, before the expiry of this authority,

offers or agreements which would or might

require Ordinary Shares to be allotted or

Rights to be granted after such expiry the

Directors shall be entitled to allot Ordinary

Shares or grant Rights pursuant to any such

offers or agreements as if the power

conferred by this resolution had not expired.

SPECIAL BUSINESS

To consider, and if thought ﬁt, to pass the following

Resolution 11 (disapplication of pre-emption rights),

Resolution 12 (share buy-backs), Resolution 13

(cancellation of share premium) and Resolution 14

(authority to hold a general meeting on short notice) as

Special Resolutions of the Company:

Special Resolutions

11. THAT, subject to the passing of resolution 10 set

out in the notice of this meeting and in substitution

for all subsisting authorities to the extent unused,

the Directors be and are hereby empowered,

pursuant to sections 570 and 573 of the

Companies Act 2006 (the “Act”) to allot or make

offers or agreements to allot equity securities

(which expression shall have the meaning ascribed

to it in section 560 of the Act) for cash pursuant to

the authority given pursuant to resolution 10 set

out in the notice of this meeting, or by way of a

sale of treasury shares, as if section 561(1) of the

Act did not apply to any such allotment or sale,

provided that this power:

i. shall be limited to the allotment of equity

securities and the sale of treasury shares for

cash up to an aggregate nominal amount of

£2,300,000 (representing approximately 31

per cent. of the issued share capital of the

Company (excluding treasury shares) as at 12

April 2022) pursuant to one or more offers for

subscription of the Company;

ii. shall be limited to the allotment of equity

securities and the sale of treasury shares for

cash up to an aggregate nominal amount of

£150,000 (representing approximately 2 per

cent. of the issued share capital of the

Company (excluding treasury shares) as at 12

April 2022) pursuant to the dividend

reinvestment scheme operated by the

Company; and

Amati AIM VCT plc

Annual Report & Financial Statements 2022

81

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Information for Shareholders

Highlights

iii. shall expire (unless previously renewed,

varied or revoked by the Company in general

meeting) on the earlier of the date of the

annual general meeting of the Company to be

held in 2023 and the date which is 15 months

after the date on which this resolution is

passed save that the Company may before

such expiry make an offer or agreement

which would or might require equity securities

to be allotted or treasury shares to be sold

after such expiry and the Directors may allot

equity securities or sell Ordinary Shares from

treasury in pursuance of such an offer or

agreement as if the power conferred by this

resolution had not expired.

12. THAT, in substitution for existing authorities, the

Company be and is hereby empowered to make

one or more market purchases within the meaning

of Section 701 of the Companies Act 2006 (the

“Act”), of the Ordinary Shares (either for

cancellation or for the retention of treasury shares

for future re-issue or transfer) provided that:

i. the maximum aggregate number of Ordinary

Shares authorised to be purchased is such

number thereof being 14.99% of the issued

ordinary share capital of the Company as at

the date of this resolution;

ii. the minimum price which may be paid per

Ordinary Share is 5p per share, the nominal

amount thereof;

iii. the maximum price (exclusive of expenses)

which may be paid per Ordinary Share is an

amount equal to 105% of the average of the

middle market quotation of such Ordinary

Share taken from the London Stock Exchange

Daily Ofﬁcial List for the ﬁve business days

immediately preceding the day on which such

Ordinary Share is to be purchased;

iv. the authority hereby conferred shall expire on

the earlier of the annual general meeting of

the Company to be held in 2023 and the date

which is 15 months after the date on which

this Resolution is passed; and

v. the Company may make a contract to

purchase its own Ordinary Shares under the

authority conferred by this Resolution prior to

the expiry of such authority which will or may

be executed wholly or partly after the

expiration of such authority and may make a

purchase of such Ordinary Shares pursuant to

any such contract.

13. THAT the share capital of the Company be

reduced by cancelling the entire amount standing

to the credit of the Company’s share premium

account as at the date the order is made

conﬁrming such cancellation by the High Court.

14. THAT a general meeting (other than an AGM) may

be called on not less than 14 clear days’ notice,

provided that this authority shall expire at the

conclusion of the next AGM of the Company.

By order of the Board

LDC Nominee Secretary Limited

Company Secretary

Registered ofﬁce:

27/28 Eastcastle Street

London W1W 8DH

12 April 2022

Amati AIM VCT plc

Annual Report & Financial Statements 2022

82

Notice of Annual General Meeting (continued)

Notes

1. A member entitled to attend and vote at the

Meeting convened by the above Notice of Meeting

is entitled to appoint one or more proxies to attend

and, on a poll, to vote in the member’s place. A

proxy need not be a member of the Company.

2. To appoint a proxy you may use the Form of Proxy

enclosed with this Notice of Meeting. To be valid,

the Form of Proxy, together with the power of

attorney or other written authority (if any) under

which it is signed or a notarially certiﬁed or ofﬁce

copy of the same, must be deposited by 2pm on

14 June 2022 to The City Partnership (UK) Ltd, The

Mending Rooms, Park Valley Mills, Meltham Road,

Huddersﬁeld HD4 7BH (the “Registrar”).

Completion of the Form of Proxy will not prevent

you from attending and voting in person.

3. Pursuant to regulation 41 of the Uncertiﬁcated

Securities Regulations 2001, only shareholders

registered in the register of members of the

Company at 6.00pm on 14 June 2022 shall be

entitled to attend and vote at the Annual General

Meeting in respect of the number of shares

registered in their name at such time. If the

Meeting is adjourned, the time by which a person

must be entered on the register of members of the

Company in order to have the right to attend and

vote at the adjourned Meeting is 48 hours before

the time appointed for the adjourned Meeting.

Changes to the register of members after the

relevant times shall be disregarded in determining

the rights of any person to attend and vote at the

Meeting.

4. You may appoint more than one proxy provided

each proxy is appointed to exercise rights attached

to different shares. You may not appoint more than

one proxy to exercise rights attached to any one

share. To appoint more than one proxy, please

contact the Registrar by email to

amativct@city.uk.com for (an) additional form(s), or

you may photocopy this form. Please indicate in

the box next to the proxy holder’s name the

number of securities in relation to which they are

authorised to act as your proxy. Please also

indicate by ticking the box provided if the proxy

instruction is one of multiple instructions being

given. All forms must be signed and returned

together in the same envelope. However, please

note the restrictions on attendance at this year’s

AGM as set out in Note 15 below.

A reply-paid Form of Proxy is enclosed with

members’ copies of this document. To be valid, the

Form of Proxy must be sent or delivered to the

Registrar at The City Partnership (UK) Ltd, The

Mending Rooms, Park Valley Mills, Meltham Road,

Huddersﬁeld HD4 7BH or sent to the Registrar by

scan and email to amativct@city.uk.com (please

include Amati AIM VCT plc and your name in the

subject line of your email) so as to be received not

later than 48 hours before the time appointed for

the Meeting or any adjourned meeting or, in the

case of a poll taken subsequent to the date of the

Meeting or adjourned meeting, so as to be received

no later than 24 hours before the time appointed

for taking the poll.

5. Online voting: alternatively, you may vote online by

visiting https://proxy-amati.cpip.io. You will then

need to use your City Investor Number (CIN) and

AGM Access Code, which will be provided to

shareholders separately. You will then be able to

vote online for the AGM. Votes lodged through the

online facility must be received by the Registrar not

later than 48 hours (excluding non-working days)

before the start of the Meeting or any adjournment

thereof.

6. Shareholders who hold their shares electronically

may submit their votes through CREST, by

submitting the appropriate and authenticated

CREST message so as to be received by The City

Partnership (UK) Ltd not later than 48 hours

(excluding non-working days) before the start of

the Meeting. Instructions on how to vote through

CREST can be found by accessing the following

website: www.euroclear.com. Please see above at

Note 5 for an alternative method of electronic

submission of proxies.

7. If you are a CREST system user (including a CREST

personal member) you can appoint one or more

proxies or give an instruction to a proxy by having

an appropriate CREST message transmitted. To

appoint one or more proxies or to give an

instruction to a proxy (whether previously

appointed or otherwise) via the CREST system,

CREST messages must be received by The City

Partnership (UK) Ltd (ID number 8RA57) not later

than 48 hours (excluding non-working days)

before the time appointed for holding the Meeting.

For this purpose, the time of receipt will be taken to

be the time (as determined by the timestamp

generated by the CREST system) from which the

Registrar is able to retrieve the message. CREST

Amati AIM VCT plc

Annual Report & Financial Statements 2022

83

Information for Shareholders

Financial Statements

Reports from the Directors

Strategic Report

Highlights

Information for Shareholders

Highlights

personal members or other CREST sponsored

members should contact their CREST sponsor for

assistance with appointing proxies via CREST. For

further information on CREST procedures,

limitations and system timings please refer to the

CREST Manual. The Company may treat as invalid

a proxy appointment sent by CREST in the

circumstances set out in Regulation 35(5)(a) of the

Uncertiﬁcated Securities Regulations 2001.

8. In the case of joint holders, where more than one

of the joint holders purports to appoint one or more

proxies, only the purported appointment submitted

by the most senior holder will be accepted.

Seniority is determined by the order in which the

names of joint holders appear in the Company’s

register of members in respect of the joint holding

(the ﬁrst named being the most senior).

9. Any corporation which is a member can appoint

one or more corporate representatives. Members

can only appoint more than one corporate

representative where each corporate

representative is appointed to exercise rights

attached to different shares. Members cannot

appoint more than one corporate representative to

exercise the rights attached to the same share(s).

10. As at 12 April 2022 (being the last practicable

date prior to the publication of this Notice) the

Company’s issued share capital consists of

148,851,023 shares of 5p each, carrying one vote

each at an annual general meeting of the

Company. Therefore, the total voting rights in the

Company as at 12 April 2022 are 148,851,023.

11. Subject to any restrictions placed on attendance at

the AGM due to the current COVID-19 pandemic,

appointment of a proxy will not preclude a member

from subsequently attending, voting and speaking

at the Meeting should the member subsequently

decide to do so. You can only appoint a proxy using

the procedures set out in these notes and the

notes to the Form of Proxy.

12. Any person to whom this Notice is sent who is a

person nominated under section 146 of the

Companies Act 2006 to enjoy information rights (a

“Nominated Person”) may, under an agreement

between the Nominated Person and the member

by whom he/she was nominated, have a right to

be appointed (or to have someone else appointed)

as a proxy for the Meeting. If a Nominated Person

has no such proxy appointment right or does not

wish to exercise it, he/she may, under any such

agreement, have a right to give instructions to the

shareholder as to the exercise of voting rights.

13. The statement of the rights of members in relation

to the appointment of proxies in Notes 3 to 5

above does not apply to Nominated Persons. The

rights described in these paragraphs can only be

exercised by members of the Company.

14. Copies of the Directors’ letters of appointment will

be available for inspection at the Meeting.

15. Except as provided above, members who have

general queries about the Meeting should use the

following means of communication (no other

methods of communication will be accepted):

• Calling Amati Global Investors on 0131 503

9115 or emailing info@amatiglobal.com

You may not use any electronic address provided

either in this Notice or any related documents

(including the chairman’s letter and Form of Proxy)

to communicate with the Company for any

purpose other than those expressly stated.

16. A copy of the Notice of the Annual General

Meeting and the information required by Section

311A of the Companies Act 2006 is included on

the Manager’s website.

17. Members should note that it is possible that,

pursuant to requests made by members of the

Company under section 527 of the 2006 Act, the

Company may be required to publish on a website

a statement setting out any matter relating to: (a)

the audit of the Company’s accounts (including the

Auditor’s report and the conduct of the audit) that

are to be laid before the Annual General Meeting;

or (b) any circumstance connected with an auditor

of the Company ceasing to hold ofﬁce since the

previous meeting at which annual accounts and

reports were laid in accordance with section 437

of the 2006 Act. The Company may not require the

members requesting any such website publication

to pay its expenses in complying with sections 527

or 528 of the 2006 Act. Where the Company is

required to place a statement on a website under

section 527 of the 2006 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 Annual General Meeting includes any

statement that the Company has been required

under section 527 of the 2006 Act to publish on a

website.

Amati AIM VCT plc

Annual Report & Financial Statements 2022

84

18. Under Section 338 and Section 338A of the

Companies Act 2006, members meeting the

threshold requirements in those sections have the

right to require the Company (a) to give to

members of the Company entitled to receive notice

of meeting, notice of any resolution which may

properly be moved and is intended to be moved at

the meeting and/or (b) to include in the business to

be dealt with at the meeting any matter (other

than a proposed resolution) which may be properly

included in the business.

A resolution may properly be moved or a matter

may properly be included in the business unless (a)

(in the case of resolution only) it would, if passed,

be ineffective (whether by reason of inconsistency

with any enactment or the Company’s constitution

or otherwise), (b) it is defamatory of any person, or

(c) it is frivolous or vexatious. Such a request may

be in hard copy form or in electronic form, must

identify the resolution of which notice is to be given

or the matter to be included in the business, must

be authorised by the person or persons making it,

must be received by the Company not later than 5

May 2022, being the date six weeks before the

meeting, and (in the case of a matter to be

included in the business only) must be

accompanied by a statement setting out the

grounds for the request.

19. Given the risks posed by the spread of COVID-19

and in accordance with the provisions of the

Articles of Association and Government guidance

and regulations, the Company may impose entry

restrictions on certain persons wishing to attend

the AGM in order to secure the orderly and proper

conduct of the AGM. Such restrictions may include

preventing attendance at the Meeting in person of

shareholders. Other restrictions may be imposed

as the chairman of the Meeting may specify in

order to ensure the safety of those attending the

AGM.

20. Personal data provided by shareholders at or in

relation to the Meeting will be processed in line

with the Company’s privacy policy.

Notice of Annual General Meeting (continued)

Corporate Information

Directors

Peter Lawrence

Julia Henderson

Susannah Nicklin

Brian Scouler

Fiona Wollocombe

all of:

27/28 Eastcastle Street

London

W1W 8DH

Secretary

LDC Nominee Secretary Limited

8th Floor, 100 Bishopsgate

London

EC2N 4AG

Fund Manager

Amati Global Investors Limited

8 Coates Crescent

Edinburgh

EH3 7AL

VCT Status Adviser

Philip Hare & Associates LLP

Hamilton House

1 Temple Avenue

London

EC4Y 0HA

Registrar

The City Partnership (UK) Limited

The Mending Rooms

Park Valley Mills

Meltham Road

Huddersﬁeld

HD4 7BH

Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

Solicitors

Dickson Minto W.S.

16 Charlotte Square

Edinburgh

EH2 4DF

Custodian

The Bank of New York Mellon SA/NV

London Branch

160 Queen Victoria Street

London

EC4V 4LA

Amati Global Investors Limited

8 Coates Crescent

Edinburgh

EH3 7AL

Tel: 0131 503 9100

Amati Global Investors Limited

is authorised and regulated by

the Financial Conduct Authority