Accelerating the growth
of proven businesses
Octopus Apollo VCT plc
Annual report and financial statements 2024
Octopus Apollo VCT plc | Annual report and financial statements 2024
5 Star Winner
Octopus Apollo VCT plc (‘Apollo’ or
the ‘Company’) is a Venture Capital
Trust (VCT) which aims to provide
shareholders with attractive tax-free
dividends and long-term capital growth
by investing in a diverse portfolio of
predominantly unquoted companies.
The Company is managed by Octopus
Investments Limited (‘Octopus’ or
the ‘Investment Manager’) via its
investment team, Octopus Ventures.
Octopus
Investments awards
Strategic Report
Key financials 2
Chair’s statement 3
Spotlight on investment process 6
Sector breakdown 8
How Apollo works 9
Measuring our performance 10
Creating value for the long term 12
Investment Manager’s review 14
Operating responsibly 26
Section 172
(
1
)
statement 31
Risks and risk management 35
Business review 39
Governance
Board of Directors 42
Corporate governance report 44
Leadership and purpose 46
Division of responsibilities 47
Composition, succession and evaluation 48
Audit, risk and internal control 51
Management Engagement Committee 54
Directors’ remuneration report 55
Directors’ report 59
Spotlight: Apollo’s investment process
p.6
Investment Manager’s review
p.14
Financials
p.64
Financials
Directors’ responsibilities statement 64
Independent auditor’s report 65
Financial statements 74
Income statement 74
Balance sheet 75
Statement of changes in equity 76
Cash flow statement 78
Notes to the financial statements 80
Investment portfolio 97
Shareholder information and contact details 99
Glossary of terms 103
Directors and advisers 104
Notice of Annual General Meeting 105
Find it fast
Key Dates
Annual General Meeting
(
AGM
)
10 July 2024
Interim results to 31 July 2024 published October 2024
Octopus Apollo VCT plc — Annual report and financial statements 2024 1
2 Octopus Apollo VCT plc — Annual report and financial statements 2024
Key nancials
Net assets (£’000)
Cumulative dividends paid since launch
Dividend yield
Total value per share
2
Dividend declared
3
Dividends paid in the year
(Loss)/profit after tax (£’000)
NAV per share
1
£390,294
2023: £349,493
87.4p
2023: 84.7p
5.1%
2023: 5.2%
£(435)
2023: £34,541
137.9p
2023: 137.9p
1.3p
2023: 1.3p
50.5p
2023: 53.2p
2.7p
2023: 2.6p
Total return per share %
4
0.0%
2023: 11.2%
1. NAV per share is an alternative performance measure
(
APM
)
calculated as net assets divided by total number of shares, as described in the glossary of terms.
2. Total value per share is an APM calculated by adding together NAV per share and cumulative dividends paid since launch.
3. The declared second interim dividend of 1.3p per Ordinary share for the year ended 31 January 2024 was paid on 2 May 2024 to all Ordinary shareholders on the register on 12 April 2024.
4. Total return per share % is an APM calculated as movement in NAV in the period plus dividends paid in the period, divided by the NAV at the beginning of the period, as described in the glossary of terms.
Octopus Apollo VCT plc — Annual report and financial statements 2024 3
Chair’s statement
Performance
I am pleased to present the annual results for Apollo for
the year ended 31 January 2024. The net asset value
(
NAV
)
plus cumulative dividends per share at 31 January 2024
was 137.9p, which is flat on the prior year’s results from
31January 2023. The NAV per share decreased during the
year from 53.2p to 50.5p which represents, after adding
back the 2.7p of dividends paid in the year, a flat return
for the year compared to 11.2% in the previous year. I am
satisfied with this stable and consistent result when it is set
against the challenging global macroeconomic backdrop
of the past few years, and it is a testament to the resilience
of the underlying portfolio companies.
In the twelve months to 31 January 2024, we utilised £70.3
million of our cash resources, comprising £33.0million
in new and follow-on investments, £14.7million in
dividends
(
net of the Dividend Reinvestment Scheme
)
,
£7.4 million in management fees, £6.7 million in share
buybacks, £4.5 million in current asset investments, and
£4.0 million in other running costs such as accounting
and administration services and trail commissions.
The cash and cash equivalents balance of £61.2 million at
31January 2024 represented 15.7% of net assets at that
date, compared to 14.1% at January 2023.
Dividends
It is your Board’s policy to maintain a regular dividend
flow where possible to take advantage of the tax-free
distributions a VCT can provide, and work towards the
targeted 5% annual dividend yield policy.
I am pleased to confirm that the Board declared a second
interim dividend of 1.3p per share in respect of the year
ended 31 January 2024. This is in addition to the 1.4p per
share interim dividend paid during the year and brought
the total dividends declared to 2.7p per share for the
year, a tax-free yield of 5.1%. The dividend was paid on
2 May2024 to shareholders on the register at 12April
2024. Since inception, we have now paid 88.7p in tax-free
dividends per share, including the recently paiddividend.
Apollo’s dividend reinvestment scheme
(
DRIS
)
was
introduced in November 2014 and to date 20% of
shareholders take advantage of it as it is an attractive
scheme for investors who would prefer to benefit from
additional income tax relief on their reinvested dividend.
I hope that shareholders will find this scheme beneficial.
During the year to 31 January 2024, 8,713,356 shares were
issued under the DRIS, equating to a reinvested amount of
£4.5million.
Fundraise and share buybacks
On 16 November 2023, the Company launched a new
offer to raise up to £35 million, with an over-allotment
facility of up to £15 million. We were pleased to raise
£50million utilising the over-allotment facility so the offer
closed fully subscribed on 19 March 2024. We would like to
take this opportunity to welcome all new shareholders and
thank all existing shareholders for their continued support.
The success of the fundraise and good performance led
the Board to announce, on 19 April 2024, its intention to
Highlights
Apollo’s latest
fundraise
£50 million
Five-year Total
Return
41.8%
Murray Steele
Chair
4 Octopus Apollo VCT plc — Annual report and financial statements 2024
Chair’s statement
increase the offer from £50 million to £85million, with
applications re-opening on 29 April 2024.
Apollo has continued to buy back and cancel shares as
required. Subject to shareholder approval of resolution 11
at the forthcoming AGM, this facility will remain in place
to provide liquidity to investors who may wish to sell their
shares, subject to Board discretion. Details of the share
buybacks undertaken during the year can be found in the
Directors’ Report on page 61 and in Note 14 to the financial
statements on page 91.
Dividends, whether paid in cash or reinvested under the
DRIS, and share buybacks are always at the discretion of
the Board, are never guaranteed and may be reviewed
when necessary.
VCT sunset clause
We were pleased in the November Autumn Statement
that the Chancellor extended the VCT sunset clause,
meaning VCT relief will be available to subscribers for
shares issued before April 2035, rather than April 2025.
Board of Directors
Having completed a structured recruitment process, led
and managed by an independent, third-party specialist,
I am pleased to announce the appointment of Gillian
Elcock as an independent Non-Executive Director of the
Company, who joined the Board on 1 December 2023.
Gillian was the founder of Denny Ellison, an independent
investment research and training company, and was
its Managing Director for ten years. She is a Non-
Executive Director of Melrose Industries plc, International
Biotechnology Trust plc and STS Global Income & Growth
Trust plc. She is also a member of the board of the CFA
Society of the UK. We look forward to benefiting from her
wealth of experience.
AGM
The AGM will be held on 10 July 2024 at 10am. Full
details of the business to be conducted at the AGM are
given in the Notice of the Meeting on pages 105 and
106. Shareholders may recall that in prior years, we have
hosted an online shareholder event. However, having
conducted a review of attendance, this year we will have
an Investment Manager’s update at the AGM, supported
by a filmed update from the Investment Manager which
will be available on the website at
https://octopusinvestments.com/apollovct/.
Shareholders’ views are important, and the Board
encourages shareholders to vote on the resolutions by
using the proxy form, or electronically at
www.investorcentre.co.uk/eproxy. The Board has
carefully considered the business to be approved at the
AGM and recommends shareholders to vote in favour of
all the resolutions being proposed.
Outlook
2023 has been another challenging year for the UK
and global economies, so I am satisfied to be able to
announce a stable total return
(
NAV plus dividends
paid
)
for the Company. The geo-political turbulence
and macro-economic headwinds have impacted the
underlying portfolio companies. We have seen growth
rates slow down resulting in lower valuations as companies
work through the tougher trading environment, including
elongated sales cycles. Some have proactively slowed
their growth to reduce their cash burn and focus on
efficiency and profitability
(
where possible
)
due to the
scarcity and higher cost of capital. There have also
been some company specific performance issues, with
several having been more affected than others by the
unpredictable market conditions. However, the recurring
revenue models of most of the companies in the portfolio
have offered some protection against the current
marketvolatility.
Dividends paid
in the year
Dividends paid
to date
2.7p
88.7p
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 5
Chair’s statement
We are starting to see some green shoots of recovery with
more activity on the listed markets, interest rates starting
to stabilise and inflation beginning to moderate. However,
we anticipate a slow and unpredictable route to recovery.
The UK general election creates some uncertainty, global
economies are projected to experience growth below
their typical rates and there is no certainty on geopolitical
stability.
The Octopus Ventures team continues to actively monitor
the portfolio companies to be able to understand the full
impact of any challenges that may arise. Members of the
team typically take a seat on the Board of the companies
so that they can provide their expertise and introduce
relevant contacts from their network. The Octopus
People and Talent team draws upon years of experience
to offer tailored advice and support to the portfolios’
management teams and equip them with the tools they
need to succeed and grow as a business.
VCTs have long provided a compelling opportunity for
UK investors to invest in businesses in a tax-efficient way,
and we look forward to Apollo continuing to do so in the
coming year. I would like to conclude by thanking both the
Board and the Octopus team on behalf of all shareholders
for their hard work.
Murray Steele
Chair
28 May 2024
continued
6 Octopus Apollo VCT plc — Annual report and financial statements 2024
Spotlight on investment process
Making a new investment is a rigorous process and fundamental to the success of the
Company. Below, the Apollo deal flow is explained, taking you through from the initial
introduction to exiting the portfolio company.
The process starts with finding potential deals. The
Octopus Ventures team’s relationships across an
extensive network including corporate financiers,
industry specialists and other investors help them
spot great businesses that are seeking funding. The
ability to look at plenty of investment opportunities is
really important to a VCT’s success. It means the team
can be highly selective in choosing which companies
to back. The team considers over 800 investment
opportunities a year and expects to only back around
ten to twelve of them.
If a deal looks like it has potential, the team will meet
with the company’s management and do an initial
review to see if the business meets the Company’s
investment criteria. The team spends time getting
to know the management team and their business,
digging deeper into all aspects of its market
andoperations.
Where appropriate, the team will involve external
experts to supplement its analysis of the business.
This helps test the investment case and it gives an
independent view on a company’s potential, the
quality of its technology and other factors that could
determine whether it succeeds. There are two major
benefits to this process. It often reveals improvements
that a business can make to increase its chances of
success. In other cases, the process uncovers areas
of significant concern and the team then has the
opportunity to walk away from the deal.
Once all these stages have been successfully
completed, and the full legal process concluded, funds
will be invested into the business.
The team typically invest between £2 and £10 million
and look for businesses which fit the below criteria:
Clear trajectory
towards profitability
Strong management
Already sells a
product or service
A business whose
customers are other
businesses
Operating for
4-10 years
Annual revenues
of between £2 to
£8million, majority
from recurring or
contracted sources
Investment processDeal selection
Octopus Apollo VCT plc — Annual report and financial statements 2024 7
Strategic guidance
A member of the investment team usually sits on the
portfolio company’s board. This allows the team to play
a prominent role in the company’s development and help
them solve problems based on their experiences with
other companies.
Support with senior talent recruitment
As with all companies, the quality of management can
make or break a young business. That’s why a dedicated
team of experts are on hand to coach and mentor
leadership teams, as well as support them in sourcing and
retaining the best talent. The Octopus Ventures People
and Talent team specialise in unlocking potential within
the portfolio companies and their entrepreneurs.
Access to experienced consultants
Portfolio companies have access to a global panel
of consultants who have previously grown successful
businesses. These individuals partner with our portfolio
companies to help them grow through global expansion
or sales and marketing. They also make valuable
introductions to other contacts within other companies,
to learn from their expertise.
As portfolio companies mature, the Octopus
Ventures team think carefully about timings
and potential partners to ensure that the right
opportunities are seized at the right time to
realise value for Apollo’s shareholders. This could
mean sourcing a suitable trade buyer or a merger
opportunity. Successful exits enable the Company to
realise the growth that the portfolio companies have
achieved over its investment lifespan.
Spotlight on investment process
continued
Examples of some exits
from the portfolio:
Portfolio management Exits
ACQUIRED BY
ACQUIRED BY
ACQUIRED BY
8 Octopus Apollo VCT plc — Annual report and financial statements 2024
Sector breakdown
Business-to-Business
(
B2B
)
software sector analysis
The chart below show the sectors within B2B software that Apollo is invested in and their respective proportions as a percentage of total B2B software investments.
B2B software makes up 93% of total fixed asset investments.
IT Infrastructure
Telecommunications
Sales and Marketing
Cybersecurity
Financial Services
HR and Human Capital
Community
Life Sciences
Travel
Education
Healthcare
Music
Sport
Real Estate
1%
2%
31 January 2024
14%
12%
11%
10%
10%
10%
8%
6%
6%
4%
3%
3%
Octopus Apollo VCT plc — Annual report and financial statements 2024 9
How Apollo works
What’s in a share
The net asset value
(
NAV
)
is the combined value of
all the assets owned by Apollo after deducting the
value of its liabilities. The NAV is comprised of different
elements, as shown in the diagram. 84% is derived
from the value of the underlying investments. 16% is
held as highly liquid cash in the bank, money market
funds
(
MMFs
)
and open ended investment companies
(
OEICs
)
which is required for investments, dividends,
buybacks and other expenses. The upcoming pipeline
of investments is closely monitored to make sure that
there is always cash available for funding companies.
The remaining balance represents less than 1% and is
the value of debtors less creditors.
Read more in the Financials section
on pages 74 to 96.
NAV
breakdown
46%
38%
16%
Top ten
The value of the top ten investments as
at 31 January 2024
Other investments
Value of remaining portfolio
investments as at 31 January 2024
Cash and cash equivalents*
Value of cash in bank, MMFs and OEICs
* Cash, for the purpose of the Cash Flow Statement,
comprises cash at bank and MMFs. For the purpose of fund
management, the OEIC portfolio is included as cash and
cash equivalents.
By owning shares in Apollo you gain access to a portfolio of 46 companies predominantly
within the software-as-a-service
(
SaaS
)
sector.
10 Octopus Apollo VCT plc — Annual report and financial statements 2024
Measuring our performance
Key Performance Indicators
(
KPIs
)
As a VCT, Apollo’s objective is to provide shareholders
with an attractive income and capital return by
investing its funds in unquoted companies which
meet the relevant criteriafor VCTs.
The Board has identified five key performance measures
to assess Apollo’s success in meeting these objectives.
Some of these are classified as alternative performance
measures
(
APMs
)
in line with Financial Reporting Council
(
FRC
)
guidance.
*These KPIs are defined as alternative performance measures
(
APMs
)
and are defined in more detail in the Glossary of terms on page 103.
The NAV per share of Apollo is the sum of the underlying
assets less the liabilities of Apollo divided by the total
number of shares in issue. Apollo’s target is for the NAV to
stay flat or increase after deducting dividends.
Performance over the year
The NAV per share has decreased from last year’s value
of 53.2p to 50.5p. This 5% decline is driven by the 2.7p of
dividends that were paid out during the year.
NAV per share*
2
2023
53.2p
2024
50.5p
2024 change
-5%
Total return is calculated as movement in NAV per share
in the period plus dividends paid in the period, divided
by the NAV per share at the beginning of the period.
Total return on the NAV enables shareholders to evaluate
more clearly the performance of Apollo, as it reflects the
underlying value of the portfolio at the reporting date. This
is the most widely used measure of performance in the
VCT sector. Apollo’s target is for the Total Return per share
to increase by 5% per annum, covering the target annual
dividend.
Performance over the year
The total return per share, after adding back dividends
paid, has remained flat over the year.
Total return per share*
1
2023
137.9p
2024
137.9p
2024 change
0%
For further details see the Glossary
of terms on page 103
Octopus Apollo VCT plc — Annual report and financial statements 2024 11
Measuring our performance
continued
The ongoing charges ratio has been calculated using
the AIC recommended methodology and excludes
performance fee, exceptional costs and trail commission.
Apollo must comply with VCT legislation laid down by
HMRC. A key requirement is to maintain at least an 80%
qualification investment level.
Performance over the year
The drop of 0.1% is driven by the increase in average
net assets in the year being greater than the increase
in ongoing charges, and therefore the ratio of ongoing
charges to average net assets has decreased.
Performance over the year
100%
(
as measured by HMRC rules
)
by value of Apollo’s
investments has been represented throughout the period
by shares or securities comprised in qualifying holdings of
Apollo. The qualification level remains consistent with prior
year.
Apollo has continued to meet the 80% Qualification
investment level. There continue to be sufficient
investment opportunities to enable the Investment
Manager to comply with these ratios.
Total ongoing charges*
Qualifying % under VCT rules
4 5
2023
2.5%
2023
100%
2024
2.4%
2024
100%
2024 change
-0.1%
2024 change
0%
Apollo has a target of paying an annual dividend of 5%
yield based on the openingNAV.
Performance over the year
Apollo paid 2.7p of dividends in the current year compared
to 2.6p in the prior year. The dividend of 2.7p represents an
annual yield of 5.1% based on the NAV per share of 53.2p
at the beginning of the year, which meets the Board’s
policy of the targeted 5% annual dividend yield.
Dividends per share paid in the year
3
2023
2.6p
2024
2.7p
2024 change
+0.1p
*These KPIs are defined as alternative performance measures
(
APMs
)
and are defined in more detail in the Glossary of terms on page 103.
12 Octopus Apollo VCT plc — Annual report and financial statements 2024
Creating value for the long term
Cash deployment
The following graph shows Apollo’s cash inflows and outflows during the year to demonstrate the movement from the opening to closing cash and cash equivalents. The cash and cash
equivalents balance includes cash at bank, MMFs and OEICs.
Cash inflows Cash outflows
0
90
60
30
£m
120
150
Cash as at
31 January
2023
Disposal
proceeds*
MMF
income
Dividend
income
Fundraise
63
49
21
2
1
(4)
(7)
(7)
(9)
(15)
(33)
61
Dividends
Management
fee
Performance
fee(fee related
to FY23 which
was paid in
May 2023)
Other
costs
Purchase of
fixed asset
investments
Buybacks
Cash as at
31 January
2024
*This includes deferred proceeds received in relation to prior year disposals as well as loan interest received in relation to current year disposals.
Octopus Apollo VCT plc — Annual report and financial statements 2024 13
Creating value for the long term
Total value growth
The following graph shows the increases and decreases contributing to the movement in the NAV per share during the year.
continued
0
40
30
20
10
NAV per share (p)
50
60
NAV per share Increase in NAV per share
Decrease in NAV per share
NAV as at
31 January
2024
NAV
before
dividends
Other running
costs
Realised loss on
disposal of
fixed asset
investments
Management
fee
Investment
and MMF
income
Net unrealised fixed
asset investment
valuation uplifts
Dividends NAV as at
31 January
2023
1.0
53.2
53.2
50.5
0.6
(1.0)
(0.5)
(0.1)
(2.7)
14 Octopus Apollo VCT plc — Annual report and financial statements 2024
Investment Manager’s review
At Octopus our focus is on managing your investments and providing open communication.
Our annual and half year updates are designed to keep you informed about the progress of
your investment.
Investment strategy
Most companies in the portfolio operate in sectors where
there is a strong opportunity for growth. In general, we
invest in technology companies in the software-as-a-
service
(
SaaS
)
space that have recurring revenues from
a diverse base of customers. We also seek to invest in
companies that will provide an opportunity for Apollo to
realise its investment typically within three to seven years.
Apollo total value growth
The graph to the right shows the performance of Apollo
since the year to 31 January 2019. The graph shows the
performance in net asset value
(
NAV
)
plus cumulative
dividends paid
(
total value
)
. The total value has seen a
significant increase over the five years, as shown on the
graph, from 118.2p to 137.9p at 31 January 2024. This
increase in total value of 19.7p represents a 41.8% increase
on the NAV of 47.1p as at 31 January 2019. A total of over
£77million has also been distributed back to shareholders
in the form of tax-free dividends. This includes dividends
reinvested as part of the DRIS.
0
30
60
90
120
150
31 January
2024
31 January
2023
31 January
2022
31 January
2021
31 January
2020
31 January
2019
Total Value (p)
NAV per share Cumulative dividends
118.2
119.8
125.6
132.3
137.9 137.9
Octopus Apollo VCT plc — Annual report and financial statements 2024 15
Investment Manager’s review
continued
Focus on performance
Apollo made a flat total return per share in the year to 31 January 2024, which I am satisfied with given the challenging economic environment. The NAV per share decreased from
53.2p to 50.5p, solely because 2.7p per share of dividends were paid in the period, representing a dividend yield of 5.1% and bringing cumulative dividends paid as at 31 January 2024 to
87.4p and the total return
(
NAV plus cumulative dividends
)
to 137.9p per share.
The performance over the five years to 31 January 2024 is shown below:
Year Ended NAV Dividends paid in year Cumulative dividends NAV + cumulative dividends Total return %
31 January 2020 45.7p 3.0p 74.1p 119.8p 3.4%
31 January 2021 49.2p 2.3p 76.4p 125.6p 12.7%
31 January 2022 50.2p 5.7p 82.1p 132.3p 13.6%
31 January 2023 53.2p 2.6p 84.7p 137.9p 11.2%
31 January 2024 50.5p 2.7p 87.4 p 137.9p 0.0%
Over the year, there have been valuation increases across 22 portfolio companies, delivering a collective increase of £37.3 million. These increases reflect businesses which have
successfully grown their customer base and revenues through the period. The majority of strong performers are the B2B technology companies that Apollo has invested in over recent
years, with notable strong performers including Lodgify, Hasgrove and Dyscova.
Conversely, 18 companies saw a decrease in valuation, collectively totalling £30.5 million. The businesses that saw the most significant reductions were Ryte, Ubisecure, Sova and Delio.
Growth has decelerated in all these companies due to lengthening enterprise software sales cycles, as well as there being some company-specific performance issues.
Although this resulted in a net increase in portfolio company valuations of £6.8 million, the overall return for Apollo was flat due to the net impact of share allotments, share buybacks,
income received and expenditure.
As part of liquidity management, Apollo regularly invests in and withdraws from MMFs in order to meet cash requirements. During the year, on a net basis, an additional £5.6 million
was invested in MMFs. Apollo also invested an additional £4.5 million into the Sequoia Economic Infrastructure Fund
(
SEQI
)
during the year. These investments, in combination with the
previously held investments in SEQI and the MMFs, took the total liquid investments at 31 January 2024 to £56.4 million
(
including interest earned during the year on MMF deposits
)
.
16 Octopus Apollo VCT plc — Annual report and financial statements 2024
Disposals
Two profitable disposals completed in the year. Firstly,
The Safeguarding Company
(
TSC
)
being acquired by
Tes Global, a provider of online educational services and
software. Apollo first invested in TSC in August 2019 and
during the investment period, TSC almost doubled its
headcount and expanded its product functionality and
international presence. The exit offered Apollo a 2.5x
total return on its equity investment. Then in November,
Apollo sold its shares in the listed company Ergomed
plc, realising £5.1million in proceeds which represented a
very strong 8.7x total return for Apollo. Both of these saw
Apollo exit its full shareholding in the companies.
Apollo also received deferred proceeds from the sale
of Luther Pendragon
(
which originally completed in
2022
)
and Countrywide Healthcare repaid the loan that
Apollo invested in 2014. In the year, all disposals and loan
repayments have in aggregate returned £18.3 million to
Apollo.
Investment Manager’s review
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 17
Year ended
31 January 2020
Year ended
31 January 2021
Year ended
31 January 2022
Year ended
31 January 2023
Year ended
31 January 2024 Total
Dividends (£'000) 8,345 7,47 1 28,366 14,323 19,165
77,670
Disposal proceeds (£'000) 17,794 3,356 53,939 3,591 18,292
96,972
New and follow-on investments
Apollo completed follow-on investments in seven companies and made four new investments. Together, these totalled £33 million
(
made up of £17.8 million invested in the existing
portfolio and £15.2 million in new companies
)
. This compares with nine new investments and eight follow-on investments in the year to 31 January 2023, together totalling £69.4 million.
This slowing of investment rate is a result of a reduced volume of businesses seeking funding, as they looked to reduce reliance on further funding or take steps to make their existing
capital go further in the more challenging macro-economic environment.
Apollo’s new investments were in:
Zipline Cloud Pty Ltd
(t/a Pendula) £3.9 million
Vaultspeed £6.5 million Magic Orange £2.2 million Harbiz £2.6 million
A two-way customer communication
software platform that helps
organisations automate high impact
customer engagement to improve
customer retention, satisfaction and
drive additional revenue.
A data transformation automation
software tool for organisations
undertaking complex IT projects.
A provider of IT Financial
Management software that allows
customers to better understand
and visualise their IT spend through
reporting dashboards.
A customer engagement focused
solution for wellness professionals
and small businesses, offering both
booking and scheduling services, as
well as customer interaction to boost
customer experience.
Investment Manager’s review
continued
18 Octopus Apollo VCT plc — Annual report and financial statements 2024
Q
How do you value a portfolio company?
A
Apollo’s unquoted portfolio companies are valued in
accordance with UK Generally Accepted Accounting
Practice
(
GAAP
)
accounting standards and the
International Private Equity and Venture Capital
(
IPEV
)
valuation guidelines. This means we value
the portfolio at Fair Value, with all companies being
valued at least twice yearly, for our interim
(
July
)
and
annual
(
January
)
accounts.
Q
What do you mean by ‘Fair Value’?
A
When we say Fair Value, we mean the price we
expect people would be willing to buy or sell an
asset for, assuming they had all the information
available we do, are knowledgeable parties with no
pre-existing relationship, and that the transaction is
carried out under the normal course of business.
Q
What is the valuation process and what
oversight is there?
A
The Octopus Investment Managers involved with
the portfolio companies, usually in the capacity
of a Director or Observer on the Board, will draft a
trading update and then the Lead Fund Manager will
meet with our dedicated valuations team to offer a
verbal update on each company.
The valuations team, utilising these portfolio
updates, the portfolio companies’ financial reports,
progress towards their KPIs and analysing the wider
market in which they operate, will draft the initial
valuation proposals. These are then reviewed,
challenged, and ultimately approved by our
Valuations Lead and Lead Fund Manager. These
proposed valuations will then be sent to the Octopus
Valuations Committee and Apollo Board who will
meet to discuss them in detail, revise as necessary
and ultimately sign them off.
There are also more high level valuation checkpoints
throughout the year in advance of share allotments,
DRIS allotments, share buybacks and other
share-related transactions, which means that the
portfolio’s valuation is reviewed to ensure NAV is
fairly represented prior to these corporate actions.
BDO LLP are the external auditors of Apollo and
perform a statutory audit of the annual accounts,
which includes valuations. As part of our continuous
improvement processes, we periodically review the
actual realised value of our investments compared
to their last holding value and refine our valuation
methodologies accordingly. This firmly underpins the
robustness of the Apollo valuation process.
Richard Court
Partner and Apollo
Lead Fund Manager
Q&A
Investment Manager’s review
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 19
Valuations
The pie charts on the right illustrate the split of valuation
methodology
(
shown as a percentage of portfolio value
and number of companies
)
. Methodologies include:
•
‘Price of Recent Investment’
(
PRI
)
is utilised when
there has been a recent transaction which is generally
assessed to be the best indicator of Fair Value as of the
transaction date;
•
‘Market approach’ involves the application of an
appropriate multiple to a performance measure
(
typically a revenue metric, but potentially also profit
)
to derive the value of the business. The multiple is
derived by referring to comparable listed companies or
comparable transactions; and
•
‘Scenario analysis’ is utilised where there is uncertainty
around the potential outcomes available to a company,
so a probability-weighted scenario analysis is considered.
For further information please see Note 10.
If you would like to find out more regarding the
IPEV guidelines, please visit their website at
www.privateequityvaluation.com
Market approach
PRI
Scenario analysis Write-off
23.3%
19.4%
51.2%
6.2%
Valuation
methodology
by number of
companies
40.9%
54.4%
4.7%
Valuation
methodology
by value
Investment Manager’s review
continued
20 Octopus Apollo VCT plc — Annual report and financial statements 2024
lodgify.com www.valueblue.com
Case studies
Vacation rental software to help grow bookings Accelerating business transformation with enterprise architecture
Lodgify empowers vacation rental hosts
with the tools to start and grow their
businesses independently. Its software-as-
a-service platform enables hosts to easily
create a website, accept direct bookings
and commission-free payments, and is
integrated with today’s popular booking
channels like Airbnb, Vrbo, and Booking.
com. It centralises all guest reservations
and communications into a single, user-
friendly interface so hosts can prioritise
increasing occupancy and providing
excellent service to their guests.
In 2023, Lodgify launched its AI Assistant,
a messaging tool designed to enhance
guest communications by generating
personalised responses with a click of
a button. The company also recently
announced its collaboration with Google,
automatically enabling Lodgify-powered
websites to appear on top of organic
Google searches to further boost their
visibility with high-intent travellers.
ValueBlue is the company behind
BlueDolphin, an Enterprise Architecture
(
EA
)
SaaS platform that helps organisations
to plan, design and manage business
transformation. It allows more effective
collaboration across the entire business
and drives successful outcomes for IT
transformation projects.
ValueBlue helps organisations gain insight
into their complex IT landscape, spotting
weaknesses, risks, and opportunities for
improvement. Based on these insights,
ValueBlue is used to plan and execute
transformation projects, speeding up
innovation and lowering project costs.
The company was recently named a
Challenger in the 2023 Gartner Magic
Gartner® Magic Quadrant™ for EA tools.
£9.5 million invested to support
product development.
£30 million
raised in Series B fundraise
100+ countries
where Lodgify hosts have
properties
£10 million invested to scale the
team and grow internationally.
220 customers
experience more efficient and
effective transformation initiatives
thanks to BlueDolphin
60% timesaving
on project architecture design
45% reduction
in operational IT spend achieved by
businesses using BlueDolphin
Investment Manager’s review
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 21
Top ten investments by value as at 31 January 2024
We are pleased to report a net increase in the value of the portfolio of £6.8 million since 31 January 2023. This represents an increase of 2.2% on the value of the portfolio at the start of
the year, leaving total return flat after the impact of income, expenses and other activities throughout the year. Here, we set out the cost and valuation of the top ten holdings, which
account for over 54% of the value of the portfolio.
Portfolio Total valuation including cost
(
£’000
)
1
2
3
4
5
6
7
8
9
10
£17,490
Investment
cost
(
£’000
)
£12,250
£9,541
£308
£6,000
£15,000
£3,800
£10,071
£8,000
£10,000
Investment Manager’s review
continued
£37,558
£12,933
£13,926
£14,791
£15,000
£15,000
£16,125
£19,445
£21,037
£12,729
22 Octopus Apollo VCT plc — Annual report and financial statements 2024
Natterbox is a London-based
provider of business-to-business cloud
telephone services that are uniquely
integrated into Customer Resource
Management
(
CRM
)
software
platforms, most notably Salesforce.
www.natterbox.com
Investment date March 2018
Equity held 8.5%
(
2023: 8.5%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
£150,000
(
2023: £150,000
)
Last submitted accounts 31 December 2022
Consolidated
turnover
£17,092,000
(
2021: £14,309,000
)
Consolidated loss
before tax
£
(
2,568,000
)
(
2021: £
(
7,249,000
))
Consolidated
net assets
£1,022,000
(
2021: £2,899,000
)
N2JB Limited
(
trading as Natterbox
)
1
Sova Assessment Limited
2
Sova Assessment is a UK based end-
to-end digital candidate assessment
SaaS platform targeting large blue-
chip organisations conducting large
volumes of hiring.
www.sovaassessment.com
Investment date November 2020
Equity held 37.2%
(
2023: 31.9%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
£93,000
(
2023: £83,000
)
Last submitted accounts 31 March 2023
Consolidated
turnover
£5,611,000
(
2022: £3,892,000
)
Consolidated loss
before tax
£
(
5,360,000
)
(
2022: £
(
3,344,000
))
Consolidated
net assets
£
(
3,593,000
)
(
2022: £
(
1,654,000
))
Codebay Solutions Limited
(
trading as Lodgify
)
3
Lodgify provides a SaaS platform for
vacation rental hosts and property
managers to manage their business
and process their bookings.
www.lodgify.com
Investment date September 2022
Equity held 11.9%
(
2023: 11.9%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
n/a
(
2023: n/a
)
Last submitted accounts 31 December 2022
Consolidated
turnover
€9,315,000
(
2021: €6,084,000
)
Consolidated loss
before tax
€(6,239,000)
(
2021: €
(
1,291,000
))
Consolidated
net assets
€16,946,000
(
2021: €4,183,000
)
Top
ten
Investment Manager’s review
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 23
Mention Me Limited
6
Mention Me is a referral engineering
SaaS platform that helps business to
consumer
(
B2C
)
businesses acquire
new customers more successfully
through their referral channel.
www.mention-me.com
Investment date December 2021
Equity held 19.4%
(
2023: 19.4%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
n/a
(
2023: n/a
)
Last submitted
accounts
31 December 2022
Consolidated
turnover
£10,244,000
(
2021: £8,043,000
)
Consolidated loss
before tax
(
£5,621,000
)
(
2021:
(
£2,765,000
)
Consolidated
net assets
£10,173,000
(
2021: £10,162,000
)
Fable Data provides anonymised,
pan-European consumer transaction
data and analysis to institutional
investors, businesses, governments
and academics.
www.fabledata.com
Investment date December 2022
Equity held 6.2%
(
2023: 6.4%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
n/a
(
2023: n/a
)
Last submitted
accounts
31 December 2022
Consolidated
turnover
Not available
1
(
2021: Not available
1
)
Consolidated loss
before tax
Not available
1
(
2021: Not available
1
)
Consolidated
net assets
£2,111,000
(
2021: £
(
2,064,000
))
Fable Data Limited
5
Investment Manager’s review
continued
4
Hasgrove is the holding company
for Interact, a SaaS business which
provides an intranet product which
focuses on the communication and
collaboration requirements of large
organisations.
www.interactsoftware.com
Investment date December 2016
Equity held 5.7%
(
2023: 5.4%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
n/a
(
2023: n/a
)
Last submitted accounts 31 December 2022
Consolidated
turnover
£29,388,000
(
2021: £23,046,000
)
Consolidated profit
before tax
£8,099,000
(
2021: £6,196,000
)
Consolidated
net assets
£13,136,000
(
2021: £6,132,000
)
Hasgrove Limited
7
Triumph Holdings Limited
Triumph has developed a risk based
quality management and monitoring
platform for the life sciences industry.
www.tritrials.com
Investment date October 2018
Equity held 52.0%
(
2023: 52.0%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
£171,000
(
2023: £132,000
)
Last submitted
accounts
31 December 2022
Consolidated
turnover
Not available
1
(
2021: Not available
1
)
Consolidated loss
before tax
Not available
1
(
2021: Not available
1
)
Consolidated
net assets
£2,875,000
(
2021: £2,957,000
)
24 Octopus Apollo VCT plc — Annual report and financial statements 2024
1
These numbers are not available per the latest
public filings on Companies House or the
company is Non-UK.
Fuse is a business-to-business
software provider of a cloud-based
learning technology platform for
corporates, founded in 2008 and
based in London
(
with further offices
in South Africa and Australia
)
.
www.fuseuniversal.com
Investment date August 2019
Equity held 0%
(
2023: 0%
)
Valuation basis Fair value of
accrued return
Income received in
year to 31 January
2024
£100,000
(
2023: £100,000
)
Last submitted accounts 31 December 2022
Consolidated
turnover
£9,338,000
(
2021: £9,912,000
)
Consolidated loss
before tax
£
(
2,816,000
)
(
2021: £
(
6,201,000
))
Consolidated
net assets
£
(
3,682,000
)
(
2021: £
(
2,479,000
))
Fuse Universal Limited
9
Turtl is an enterprise SaaS product
which enables corporates to produce
high quality, brand consistent and
personalised marketing collateral at
scale.
https://turtl.co/
Investment date September 2021
Equity held 13.6%
(
2023: 13.6%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
n/a
(
2023: n/a
)
Last submitted accounts 31 December 2022
Consolidated
turnover
£8,085,000
(
2021: £6,153,000
)
Consolidated loss
before tax
£
(
4,401,000
)
(
2021: £
(
2,098,000
)
Consolidated
net assets
£4,907,000
(
2021: £9,189,000
)
10
Turtl Surf & Immerse Limited
Investment Manager’s review
continued
Value Blue B.V.
8
Value Blue is a Netherlands based
provider of enterprise architecture
management software, that is
growing in the UK. The product allows
companies to map their existing
technology architecture in a single
location to easily plan, collaborate
and execute both large scale
transformational and everyday IT
projects.
www.valueblue.com
Investment date January 2022
Equity held 20.3%
(
2023: 14.2%
)
Valuation basis Revenue multiple
Income received in
year to 31 January
2024
£19,000
(
2023: n/a
)
Last submitted
accounts
Not available
1
Consolidated
turnover
Not available
1
(
2023: Not available
1
)
Consolidated loss
before tax
Not available
1
(
2023: Not available
1
)
Consolidated
net assets
Not available
1
(
2023: Not available
1
)
Octopus Apollo VCT plc — Annual report and financial statements 2024 25
Outlook
There has been a slowing of growth across the portfolio, as
companies look to preserve cash and seek greater capital
efficiency to extend cash runways. We are reassured
that the portfolio is well funded with around 30% of the
portfolio based on NAV not requiring further funding, as
they are profitable, and this increases to 80% with more
than twelve months’ cash runway. As well as a suppressed
funding market, we have also seen similar in the exit
environment, with a substantial reduction in the number
and value of merger and acquisition
(
M&A
)
transactions
over 2023*. Despite this, we were pleased to successfully
realise our holdings in the Safeguarding Company and
Ergomed in the period and we hope to see a continued
series of profitable realisations over the next year.
We have also seen a decline in Apollo’s investment rate
when compared to the prior year, as fewer businesses
have looked to raise money due to limited capital
availability and the higher cost of capital. However, we are
starting to see signs of recovery, with a strong pipeline of
exciting opportunities converting into one new deal and six
follow-on investments completing since the year end.
Alongside this, we were delighted with the support we’ve
received from Apollo’s new and existing investors, with
the latest fundraise closing fully subscribed, including the
over-allotment facility. These funds will allow Apollo to
continue to support the existing portfolio in their growth
plans and invest in new opportunities, which have great
potential to become successful and deliver good returns to
shareholders.
The ongoing need for exciting, high-growth companies
to raise funding for growth provides ample opportunity
to make successful future investments in line with the
existing now-proven strategy. We remain optimistic and
confident about Apollo’s future investment prospects and
its current diverse portfolio. We think this breadth of scope
will provide Apollo with the opportunities it needs for
continued success.
*Source: Atomico, State of European Tech – December 2023 – p.226.
Investment Manager’s review
continued
26 Octopus Apollo VCT plc — Annual report and financial statements 2024
Operating responsibly
Apollo has a policy in place set by the Board, to make sure Octopus Ventures
considers responsible investment
(
RI
)
within investment decisions, taking into
account environmental, social and governance risks.
Octopus Ventures is responsible for implementing
Apollo’s RI policy. As the nature of RI and the wider
business environment evolves, the policy will be
reviewed, and, if necessary, updated. The policy
ensures Octopus Ventures follows a three-step
approach to RI.
Please view Apollo’s RI policy here:
https://octopusinvestments.com/apollo-
responsible-investment-policy/
Octopus is an accredited B Corp and signatory to the
internationally recognised Principles for Responsible
Investment, demonstrating Octopus’ commitment
to responsible investment and to creating a more
sustainable financial system.
The Directors consider responsible investment to be
important and believe portfolio companies should
implement a framework to support best practices, which
in turn can help create long-term value in the business.
Thisframework considers:
1. Mission: the mission of an investment
2. Materiality of risks to investments: the materiality
of sustainability issues in Apollo’s underlying portfolio
3. Responsibility: a portfolio company’s values,
culture, and behaviour
Octopus Apollo VCT plc — Annual report and financial statements 2024 27
continued
Operating responsibly
Mission:
Whilst Apollo doesn’t target specific sustainability goals
or objectives, Octopus tracks the number, amount
invested and the value of companies in Apollo’s portfolio
that are aligned with Octopus Group’s three sustainable
themes: building a sustainable planet, revitalising
healthcare and empowering people.
Materiality of risks to investments:
Apollo has a responsible investment policy to make sure
environmental, social and governance risks of Apollo’s
underlying portfolio will be considered during the
investment process and any sustainability issues that
could impact the financial performance of an investment
are identified. To do this, an RI tool is used which utilises
guidance from the Sustainability Accounting Standards
Board
(
SASB
)
to help identify and manage any issues.
Once identified, the investment team consider the
exposure to these risks and engage directly with the
portfolio companies to understand how appropriately
they are managing the risks. Given the nature of
these tech-enabled businesses, the most material
risks identified include data security, data privacy,
and recruiting and managing a global, diverse and
skilledworkforce.
Responsibility:
Apollo will not invest in any business whose activities or
practices appear on Octopus Ventures’ Exclusion List,
which includes sectors such as tobacco, arms, fossil fuels,
gambling and deforestation.
The Octopus Ventures team make sure that all portfolio
companies:
•
provide safe and healthy working conditions;
•
treat people fairly, irrespective of race, gender, identity,
sexual orientation, nationality, disability, political or
religious beliefs;
•
do not accept or pay bribes; and
•
uphold high standards of business integrity at all times.
Octopus has created an Engagement Tool which is sent
to all of Apollo’s portfolio companies to help the Octopus
Ventures team understand whether a portfolio company
considers its wider stakeholders
(
community, customers,
people, planet and shareholders
)
within decision-making,
and provides tools and guidance to help them adopt
responsible practices.
The Octopus Ventures team also collect data on diversity
within the portfolio and actively work with portfolio
companies to support talent management, recruitment
anddiversity.
28 Octopus Apollo VCT plc — Annual report and financial statements 2024
Octopus Ventures’ initiatives:
Greenhouse gases
Octopus Ventures will engage with all portfolio
companies on their greenhouse gases and give them
access to appropriate complimentary tools to support
their understanding of their carbon footprint.
Progress made:
•
The long-term goal is to reduce portfolio emissions
to minimise climate-related risks
(
see page 30
)
.
Currently, of the 27 companies contacted throughout
2021 and 2022 requesting their participation,
24companies have supplied one year’s data – either
their 2021 or 2022 emissions data. 2023 data is
currently being requested. Below is a breakdown of
GHG emissions reported on the carbon monitoring
tool provided by Octopus to the portfolio companies.
An explanation for the different scopes can be read
on page 30:
GHG emissions in tonnes tCO
2
e
2023
(
based on 2022
full year data, 12
companies measured
)
2022
(
based on 2021
full year data, 12
companies measured
)
Scope 1 and 2 171.75 341.30
As yet, there are no company year-on-year
comparisons available to assess whether there have
been any increases in emissions from a company.
However, when this data is available, if there are any
increases these will be discussed with the portfolio
company to ascertain the reasons and whether any
actions need to be taken.
Female diversity pledge:
By 2025, 30% of all new founder pitches to the
Octopus Ventures investment team should be
businesses led or co-led by a woman and by 2027,
this will increase to 50%.
Progress made:
•
Between 1 February 2023 and 31 January 2024,
28% of the companies that Octopus Ventures met
with had at least one founder who identified as
female.
•
Initiatives the investment team have launched
to help drive engagement with female
entrepreneursinclude:
•
offering ‘office hours’ to answer questions;
•
offering feedback to support entrepreneurs who
may not normally have access to this type of
forum; and
•
participating in industry-wide groups to improve
awareness and communicate our commitment
to supporting female founders.
continued
Operating responsibly
Climate-related risks and opportunities
Octopus Investments has chosen to continue evolving
its responsible investment disclosures in alignment
with industry-recognised regulatory and reporting
frameworks, such as the Task Force on Climate-
related Financial Disclosures
(
TCFD
)
. Importantly, due
to its structure, Apollo is voluntarily disclosing this
information, as opposed to it being a mandated ‘in-
scope’ fund. In alignment with the spirit of the TCFD
framework, some initial disclosures have been outlined
under the categorisations below, but do not cover the
full set of requirements as per the TCFD framework.
Future changes are anticipated as regulatory and
reporting frameworks continue to evolve.
Octopus Apollo VCT plc — Annual report and financial statements 2024 29
Governance
Octopus Investments
Day-to-day management of
Apollo’s portfolio companies
and oversight of investment
decisions is undertaken by
Octopus Ventures and works
within Octopus Investments’
governance structures.
Octopus Ventures team
Accountable for the delivery
of the RI policies which
form part of the funds
they manage. Responsible
investment therefore forms
part of the investment
process.
Apollo Board
Considers RI as an integrated
element of Apollo’s
investment strategy, and
oversight of climate-related
risks and opportunities
forms part of the existing
risk management process.
The Board sets and approves
targets and monitors
performance of the portfolio
against these.
Impact and Sustainability team
Sits within Octopus Investments
and works with Octopus Ventures to
implement responsible investment
processes, and provide training, tools
and support around disclosures and
reporting.
Octopus Responsible Investment
(
RI
)
Committee
Comprised of an Octopus Founder,
Chief Executive Officer, Chief
Investment Officer, Head of
Institutional, Head of Impact and
Sustainability and Chief of Staff.
Provides RI oversight and makes sure
that appropriate action has been
taken to address any concerns within
the Octopus Ventures Investment
Committee.
continued
Operating responsibly
30 Octopus Apollo VCT plc — Annual report and financial statements 2024
continued
Operating responsibly
Strategy
With the transition to a lower carbon economy, the
Octopus Impact and Sustainability team are taking
‘transition climate risks’ and ‘physical climate risks’ into
consideration to understand what could potentially be
material to portfolio company financial performance in the
short, medium and long term, and in both best
(
1.5degree
centigrade temperature change
)
and worst case
(
4degree
centigrade temperature change
)
climatescenarios.
Where risks are identified as being relevant to portfolio
companies they will be addressed, for example:
•
Energy management: future increases in energy
prices relating to carbon taxes, carbon pricing or
supply could impact costs and therefore profitability.
Recognising that every company can reduce their
energy usage, the Octopus Ventures team are working
with the portfolio companies to understand and
reduce carbon emissions.
Apollo
Apollo recognises the need to conduct its business, including
investment decisions, in a manner that is responsible to the
environment wherever possible. Apollo does not produce
any reportable emissions as the fund management is
outsourced to Octopus, with no physical assets or property
held by Apollo. As Apollo has no employees or operations,
it is not responsible for any direct emissions, and as it uses
less than 40,000 kWh of energy during the reporting year it
is exempt from Streamlined Energy and Carbon Reporting
(
SECR
)
reporting requirements.
In 2021, Octopus set a 2030 Net Zero target, more of
which can be read about and its progress here.
https://octopusgroup.com/net-zero-plan/
Risk management
The investment team use guidance from the
Sustainability Accounting Standards Board
(
SASB
)
to
identify climate-related risks in portfolio companies.
Where potential material climate-related risks have been
identified, the investment team assess how well the risk
is managed by the company. Where appropriate, this
is raised to the Investment Committee as part of the
investment process and is continually monitored.
Metrics and targets
To understand the carbon emissions of the Apollo
portfolio, the Octopus Ventures team have taken
steps to measure the portfolio companies’ Scope 1
and 2
(
GHG
)
emissions by providing them with access
to a carbon measurement tool that will provide the
companies with details of their carbon footprint. Scope1
emissions are those directly from company-owned and
controlled resources. Scope 2 emissions are indirect
emissions from the generation of purchased energy
from a utility provider. Scope 3 emissions are the result
of activities from assets not owned or controlled by
the reporting organisation, but that the organisation
indirectly affects in its value chain. Whilst Octopus
supports portfolio companies in measuring some Scope
3 emissions, such as purchased goods and services and
business travel, this is an area where it is looking to grow
its capability to support the portfolio companies that
are looking to measure their full scope.
Human rights issues
The Board seeks to conduct Apollo’s affairs responsibly.
Apollo is required by company law to provide details
of employee, human rights, social and community
issues, including information about any policies it has in
relation to these matters and the effectiveness of such
policies. As an externally managed investment company
with no employees, Apollo does not maintain specific
policies in relation to these matters.
Whistleblowing
In accordance with the recommendations of the
Association of Investment Companies Code of
Corporate Governance, the Board has considered
the arrangements in place to encourage staff of the
Investment Manager or Secretary of Apollo to raise
concerns, inconfidence, within their organisation
about possible improprieties in matters of financial
reporting or other matters. It is satisfied that adequate
arrangements are in place to allow an independent
investigation, and follow-on action where necessary, to
take place within theorganisation.
Bribery Act
The Investment Manager has an Anti-Bribery policy
with robust procedures to ensure full compliance
with the Bribery Act 2010 and to make sure that the
highest standards of professional ethical conduct are
maintained. All employees and those working for, or on
behalf of the Investment Manager, are aware of their
legal obligations when conducting company business.
Octopus Apollo VCT plc — Annual report and financial statements 2024 31
Section 172(1) statement
This report sets out how the Directors have had regard
to promoting the success of Apollo for the benefit of its
shareholders as a whole, and in making their decisions
to have regard to, but not limited to, a list of six factors
contained within this section of the Companies Act 2006:
•
the likely consequence of any decision in the long term;
•
the interests of the Company’s employees;
•
the need to foster the Company’s 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.
Business strategy
The success of Apollo is driven by its investment policy and
liquidity strategy which is set out in the Business Review
on page 39. The Investment Manager prepares a detailed
cash flow which is approved by the Board on an annual
basis and reviewed regularly, and forms the basis for
Apollo’s resource planning and deployment decisions.
When considering business strategy, the Board also
considers other matters such as the interests of its various
stakeholders and the long-term impact of its actions on
Apollo’s future and reputation.
The Board
The Board adopts the 2019 AIC Code of Corporate
Governance which provides a framework for the
governance of investment companies such as Apollo.
It is normal practice for Venture Capital Trusts to delegate
authority for day-to-day management of the Company to
an Investment Manager, and to outsource administration,
accounting and company secretarial services. The Board
then engages with the Investment Manager in setting,
approving and overseeing the execution of the business
strategy and related policies.
At every Board meeting a review of financial and
operational performance, as well as legal and
regulatory compliance, is undertaken. The Board also
reviews other areas over the course of the financial
year including Apollo’s business strategy; key risks;
stakeholder-related matters; diversity and inclusivity;
environmental matters; corporate responsibility and
governance; compliance and legal matters. The Board
has set financial KPIs relating to portfolio performance.
The Board formally reviews the performance of the
Investment Manager on an annual basis.
Matters reserved for the Board include, but are not
limited to, all shareholder communication, the setting
of investment policy, investment of cash reserves, the
raising of capital and the allotment and issue of shares,
the buyback of shares, dividend policy, Director appraisal
and succession, financial reporting, RIS announcements,
compliance with UK Listing Authority rules and FCA
regulations.
Culture
The Directors seek to apply the ESG principles adopted
by Octopus Ventures and these values help to define the
culture and relationship with the investment team. There
is a general principle of openness and transparency in
dealings between Octopus Ventures and the Directors,
and clear policies covering, for instance, investment
process and conflicts, providing a clear operating
framework. Generally, the culture should contribute to the
purpose of producing consistent returns over the long term
and achieving the agreed KPIs, which will deliver, most
importantly, good returns to shareholders.
32 Octopus Apollo VCT plc — Annual report and financial statements 2024
Section 172(1) statement
continued
Business ethics and governance
The Board is responsible for ensuring that the activities
of Apollo and its various investments are conducted in
compliance with the law and applicable governance and
regulatory regimes, and in adherence with prevailing best
practice for the relevant industry. This includes reviewing
internal controls, ensuring that there is an appropriate
balance of skills and experience represented on the Board,
and ensuring that the financial statements give a true
and fair view of the state of affairs of Apollo. Further detail
can be found in the Directors’ responsibilities statement
on page 64. In the year to 31 January 2024 no areas of
concern have been flagged in this regard.
Relations with key stakeholders
The requirement for Apollo to consider the interests of
its key stakeholders is limited as it does not have any
employees. The Board considers Octopus to be its key
business partner as it has responsibility for the provision
of investment management, administration, custody
and company secretarial services. The Board works with
Octopus in the selection of third-party providers such as
the registrars, corporate broker and VCT status adviser.
Its selection is made on the basis of quality of service,
accuracy and price. Any errors or delays reflect badly on
Apollo, but more importantly can cause inconvenience,
and potential loss, for shareholders. The performance of
third-party providers is reviewed at least annually.
Key decisions
Some of the key decisions made during the year that
required the Board to take into consideration Section 172
(
1
)
factors include:
•
in line with the Company’s objectives, the Board issued
an offer for subscription of shares on 16 November 2023
to raise up to £35.0 million, with an over-allotment
facility of £15.0 million. This was discussed with the
Investment Manager, and allowed new and existing
shareholders to invest in the Company;
•
the Company continued to buy back shares, balancing
the interests of both remaining and selling shareholders
by providing adequate liquidity;
•
the Board declared dividends of 2.7p per share in
accordance with the Company’s dividend policy; and
•
the Board monitored investment decisions and the
Company’s ability to meet the requirements of the
HMRC’s VCT investment rules.
•
the Board considered and approved the Company’s
valuations and net asset value
(
NAV
)
at the half-year
and year-end.
Octopus Apollo VCT plc — Annual report and financial statements 2024 33
Section 172(1) statement
continued
Our key stakeholders
Shareholders
Why we engage
The Board recognises the critical importance of open
and timely communications with shareholders. Their
support is fundamental to raising further capital
which is dependent on Apollo’s performance and
clear reporting on portfolio progress. Shareholders are
encouraged to attend and vote at shareholder meetings
and to raise questions in relation to Apollo’s progress.
How we engage
The annual and half-yearly reports, prospectus and other
shareholder information are published on the Octopus
Investments website octopusinvestments.com.
Details of the portfolio, the investment team and
other insights are published on the Octopus Ventures
website octopusventures.com. Shareholder enquiries
are handled promptly by Octopus Investments. The
Chair responds to communications addressed to the
Board. The Directors aim to make sure that the annual
report and financial statements are fair, balanced and
understandable, and that sufficient information is
provided to shareholders to assess Apollo’s performance,
business approach and strategy.
Portfolio companies
Why we engage
Apollo’s performance and the performance of its
underlying portfolio companies are directly and
intrinsically linked. The Investment Manager monitors
the portfolio companies through a programme of
regular company meetings as part of its investment
process.
How we engage
The Board has also given Octopus discretionary
authority to vote on portfolio company resolutions
on its behalf as part of its approach to corporate
governance, and encourages it to do so. As part of the
portfolio valuation review the Board is provided with
sufficient information and support to scrutinise the
performance of the portfolio companies.
Octopus and suppliers
Why we engage
Apollo is reliant on Octopus as the key provider of
investment management and non-investment services.
In addition, third parties such as Computershare,
Apollo’s registrar; Panmure Gordon, Apollo’s corporate
broker; as well as lawyers and tax advisers provide
key services for Apollo and shareholders. Apollo works
with our suppliers to make sure that it can provide an
appropriate level of service and regulatory compliance
function. Apollo is focused on ensuring that we have
the right suppliers and relationships that can effectively
deliver the right services for the business in line with
applicable laws, regulations and best practice.
How we engage
Apollo engages with Octopus and its third-party
suppliers on the basis of proven track record with
observance of minimum levels of performance,
ethics and governance in order to create value and
mitigate risk. Octopus attends all Board meetings
with regular updates on investment performance,
risks and non-investment services activities as well as
ad hoc analysis as requested by the Board. The Board
has a positive and open relationship with Octopus
and annually, following a review, votes on retaining
Octopus as the Investment Manager. A variety of
independent professional advisers are utilised by Apollo
to help with certain activities, including regulatory and
legal compliance, for example lawyers; tax advisers;
corporate brokers; and auditors.
34 Octopus Apollo VCT plc — Annual report and financial statements 2024
Section 172(1) statement
continued
Our key stakeholders continued
Community and environment
Why we engage
The Board considers it important that Apollo has
a responsible approach to investing as set out
in the framework on page 26 taking account of
environmental, social and governance matters.
Apollo’s investment operations create employment, aid
economic growth, generate tax revenues and produce
wealth, thus benefitting the community and economy
overall.
How we engage
Apart from the Board’s recognition that the responsible
investment policy should help to mitigate the impacts
of climate change, the Board has moved to a largely
paperless operation over the past three years and utilises
conferencing platforms where appropriate.
The Board requires that Octopus collects data on
diversity within the portfolio and actively works with our
portfolio companies on an ongoing basis to support their
talent management and recruitment, staff well-being
and diversity policies and initiatives. A condition of
our investment is that the company must have in
place a Diversity and Inclusion policy, as well as an
Anti-Harassment and Discrimination policy.
Government and regulators
Why we engage
Good governance and compliance with applicable
regulations is vital in ensuring the continued success of
Apollo and the regimes within which it operates.
Octopus, on behalf of the Board, actively engages with
HMRC and HMT to seek changes in VCT legislation,
lobbying the government to highlight the economic
benefits of VCTs.
How we engage
The Board encourages openness and transparency and
promotes proactive compliance with new regulation.
Apollo, through its Investment Manager, engages with
government and regulatory bodies at regular intervals
as well as participating in focus groups and research
with industry bodies.
Government and regulatory policy informs strategic
decision-making at Board level with consideration given
to the impact Apollo has on the sector.
Octopus Apollo VCT plc — Annual report and financial statements 2024 35
Risks and risk management
Emerging and principal risks, and risk
management
The Board is mindful of the ongoing risks and will continue
to make sure that appropriate safeguards are in place, in
addition to monitoring the cash flow forecasts to make
sure that the Company has sufficient liquidity.
The Board carries out a regular review of the risk
environment in which the Company operates.
Risk Mitigation Change
Investment performance:
The focus of Apollo’s investments is in unquoted, small
and medium-sized VCT qualifying companies which, by
their nature, entail a higher level of risk and may have
lower cash reserves than investments in larger quoted
companies. Poor performance across these investments
may impact Apollo’s ability to raise new funds from
investors.
Octopus has significant experience and a strong track record of investing in unquoted
companies, and appropriate due diligence is undertaken on every new investment. A
member of the Octopus Ventures team is typically appointed to the board of a portfolio
company, and regular board reports are prepared by the portfolio company management
and examined by the Investment Manager. This arrangement allows Apollo to play a
prominent role in a portfolio company’s ongoing development and strategy. Although
investment strategy is focused on B2B software, the overall risk in the portfolio is mitigated
by diversifying investment across a wide spread of holdings in terms of the underlying sub-
sector served by the portfolio companies, and their financing stage, age, industry sector
and business models. The Board reviews the investment portfolio with the Investment
Manager on a regular basis. The Investment Manager is incentivised to make sure Apollo
performs well, via a Performance Incentive Fee (charged annually) for exceeding certain
performance hurdles, as detailed in Note 3 to the financial statements.
Increased exposures
reflected in the previous
period remain due to the
difficult macro environment
and challenging trading
conditions for some portfolio
companies continuing.
=
The Board assesses the risks faced by Apollo and, as a board, reviews the mitigating controls and
actions, and monitors the effectiveness of these controls and actions.
Emerging risks
The Board has considered emerging risks. The Board
seeks to mitigate emerging risks and those noted below
by setting policy, regular review of performance and
monitoring progress and compliance. In the mitigation
and management of these risks, the Board applies the
principles detailed in the Financial Reporting Council’s
Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting.
The following are some of the potential emerging risks
management and the Board are currently monitoring:
•
adverse changes in global macroeconomic
environment;
•
rising cost of living;
•
geopolitical tensions; and
•
climate change.
Further details of the Company’s financial risk
management policies are provided inNote16 to the
financial statements.
Principal risks
36 Octopus Apollo VCT plc — Annual report and financial statements 2024
continued
Risks and risk management
Risk Mitigation Change
VCT qualifying status risk:
Apollo is required at all times to observe the conditions
for the maintenance of HMRC-approved VCT status.
The loss of such approval could lead to Apollo and its
investors losing access to the tax benefits associated with
VCT status and, in certain circumstances, to investors
being required to repay the initial income tax relief on
their investment.
Prior to making an investment, the Investment Manager seeks assurance from Apollo’s
VCT status adviser that the investment will meet the legislative requirements for VCT
investments.
On an ongoing basis, the Investment Manager monitors Apollo’s compliance with VCT
regulations on a current and forecast basis to ensure ongoing compliance with VCT
legislation. Regular updates are provided to the Board throughout the year.
The VCT status adviser formally reviews Apollo’s compliance with VCT regulations on a bi-
annual basis and reports its results to the Board.
VCT status monitoring
by independent advisers
continues to reduce the risk
of an issue causing a loss of
VCT status.
Risk Mitigation Change
Operational – reliance on third parties:
The Board is reliant on the Investment Manager to
manage investments effectively, and manage the
services of a number of third parties, in particular the
registrar and tax advisers. A failure of the systems or
controls at the Investment Manager or third-party
providers could lead to an inability to provide accurate
reporting and to ensure adherence to VCT and other
regulatory rules.
The Board reviews the system of internal control, both financial and non-financial,
operated by the Investment Manager (to the extent the latter are relevant to Apollo’s
internal controls). These include controls that are designed to ensure that Apollo’s assets
are safeguarded and that proper accounting records are maintained, as well as any
regulatory reporting. Feedback on other third-parties is reported to the Board on at least
an annual basis, including adherence to Service Level Agreements where relevant.
No overall change in risk
exposure on balance.
Risk Mitigation Change
Information security:
A lack of suitable controls could result in a data breach
and fines. The Board is reliant on the Investment
Manager and third parties to take appropriate measures
to prevent a loss of confidential customerinformation.
Annual due diligence is conducted on third parties, which includes a review of their
controls for information security. The Investment Manager has a dedicated information
security team and a third party is engaged to provide continual protection in this area. A
security framework is in place to help prevent malicious events. The Investment Manager
reports to the Board on an annual basis to update it on relevant information security
arrangements. Significant and relevant information security breaches are escalated to the
Board when theyoccur.
No overall change on
balance, although cyber
threat remains a significant
risk area faced by all service
providers.
=
=
=
Octopus Apollo VCT plc — Annual report and financial statements 2024 37
continued
Risks and risk management
Risk Mitigation Change
Economic:
Events such as an economic recession, movement
in interest rates, inflation, political instability and
rising living costs could adversely affect some smaller
companies’ valuations, as they may be more vulnerable
to changes in trading conditions or the sectors in which
they operate. This could result in a reduction in the value
of Apollo’s assets.
Apollo invests in a portfolio of companies serving markets across a diverse range of
sectors, which helps tomitigate against the impact of performance in any one sector.
Apollo also maintains adequate liquidity tomake sure that it can continue to provide
follow-on investment to those portfolio companies that require itand which is supported
by the individual investment case.
The Investment Manager monitors the impact of macroeconomic conditions on an
ongoing basis and provides updates to the Board at least quarterly.
Increased exposures
reflected in the previous
period remain as economic
uncertainty persists through
high inflation, high interest
rates and other economic
factors.
Risk Mitigation Change
Legislative:
A change to the VCT regulations could adversely impact
Apollo by restricting the companies Apollo can invest in
under its current strategy. Similarly, changes to VCT tax
reliefs for investors could make VCTs less attractive and
impact Apollo’s ability to raise further funds.
Failure to adhere to other relevant legislation and
regulation could result in reputational damage and/or
fines.
We are also pleased that the sunset clause in place for
April 2025, regarding eligibility of VCTs for tax relief, has
been extended and seemslikely to be removed.
The Investment Manager engages with HM Treasury and industry bodies to demonstrate
the positive benefits of VCTs in terms of growing UK companies, creating jobs and
increasing tax revenue, and to help shape any change to VCT legislation.
The Investment Manager employs individuals with expertise across the legislation and
regulation relevant to Apollo. Individuals receive ongoing training and external experts are
engaged where required.
Risk exposure has continued
to reduce since the previous
period following the
extension of the sunset
clause to 2035 being agreed.
=
38 Octopus Apollo VCT plc — Annual report and financial statements 2024
Risk Mitigation Change
Liquidity:
Apollo invests in smaller unquoted companies, which are
inherently illiquid as there is no readily available market
for these shares. Therefore, these may be difficult to
realise for their fair market value atshortnotice.
The Investment Manager prepares cash flow forecasts to make sure cash levels are
maintained in accordance with policies agreed with the Board. Apollo’s overall liquidity
levels are monitored on a quarterly basis by the Board, with close monitoring of available
cash resources. Apollo maintains sufficient cash and readily realisable securities, including
MMFs and OEICs, which can be accessed at short notice. At 31 January 2024, 85% of
current asset investments were held in MMFs, realisable within one business day, and 15%
in OEICs, realisable within seven business days.
Risk exposure remains
unchanged from the
previous period.
Risk Mitigation Change
Valuation:
While investments within the portfolio are valued in
accordance with International Private Equity and
Venture Capital (IPEV) valuation guidelines, for smaller
companies establishing a fair value can be difficult due
to the lack of readily available market data for similar
shares, resulting in limited number of external reference
points.
Valuations of portfolio companies are performed by appropriately experienced staff, with
detailed knowledge of both the portfolio company and the market in which it operates.
These valuations are then subject to review and approval by the Octopus Valuations
Committee, comprised of staff who are independent of Octopus Ventures and with
relevant knowledge of unquoted company valuations. The Board reviews valuations after
they have been agreed by the Octopus Valuations Committee.
Risk exposure remains
unchanged from the
previous period due to
economic uncertainty within
valuation modelling.
continued
Risks and risk management
=
=
Octopus Apollo VCT plc — Annual report and financial statements 2024 39
Business review
The objective of the Company is to invest in a diversified portfolio of smaller unquoted UK companies
which meet the relevant criteria for VCTs in order to generate income and capital growth over the long
term. Investments are made selectively, primarily in the Technology sector, in companies that have the
potential to grow and enhance their value. The Company’s investments are managed byOctopus.
Investment policy
The Company’s investment policy is designed to enable
the Company to comply with the VCT qualifying
conditions. It invests predominantly in unquoted smaller
companies and expects that this will continue to make up
the significant majority of the portfolio. It will also retain
holdings in cash or near-cash investments to provide a
reserve of liquidity, which will maximise the Company’s
flexibility as to the timing of investment acquisitions and
disposals, dividend payments and share buybacks.
Unquoted investments are structured using various
investment instruments, including ordinary and
preference shares, loan stocks and convertible securities,
to achieve an appropriate balance of income and capital
growth, having regard to the VCT legislation. Although
the Company invests primarily in the Technology sector,
the portfolio is diversified by investing in a broad range of
sub-sectors. The normal investment period into portfolio
companies is typically expected to be between the range
of three to seven years. Any uninvested funds are held in
cash, MMFs, open ended investment companies
(
OEICs
)
and similar investment vehicles.
Although the Directors cannot be sure of the overall impact
of macroeconomic and geopolitical uncertainties on the
investment portfolio and performance over the medium
term, the Company spreads the risk of the portfolio by
investing in companies operating in a diverse range of
sub-sectors, using a variety of securities. Concentration risk
is mitigated by ensuring that at the point of investment no
more than 15% of the Company by value will be in any one
investment, complying with the HMRC rules.
The value of individual investments is expected to increase
over time as a result of trading progress and a continuous
assessment is made of investments’ suitability for sale
to make sure we optimise the timing of such sale. The
Company’s VCT qualifying investments are held with a view
to long-term capital growth as well as income generation and
will often have limited marketability. Asaresult, it is possible
that individual holdings may grow in value to the point where
they represent a significantly higher proportion of total assets
prior to a realisation opportunity being available.
Investments are made using shareholders’ funds and it is
not currently intended that the Company will take on any
long-term borrowings.
No material changes may be made to the Company’s
investment policy described above without the prior
approval of shareholders by the passing of an Ordinary
Resolution. The Directors monitor the investment process
and ensure compliance with the investment policy.
A review of the investment portfolio and of market
conditions during the year is included in the Chair’s
Statement and Investment Manager’s Review which
form part of the Strategic Report on pages 3 to 25. This
Business Review also forms part of the Strategic Report
onpages39to 40.
Co-investment policy
Where one or more of the companies or funds managed
or advised by Octopus wishes to participate in an
investment opportunity, allocations will be made by
Octopus in how they split this across their funds as at
the date of the investment. In the event of a conflict of
interest on the part of Octopus or where co-investment is
proposed to be made other than on a pro-rata basis, such
an investment requires the approval of the Board.
40 Octopus Apollo VCT plc — Annual report and financial statements 2024
Business review
Liquidity strategy
The Board’s strategy is to maintain an appropriate level of
liquidity in the Balance Sheet to continue to achieve the
following four targets:
•
to support further permissible investment in existing
portfolio companies if required;
•
to take advantage of new investment opportunities as
they arise;
•
to support the target dividend flow; and
•
to provide liquidity to investors through the ability to buy
back the Company’s shares as they become available.
VCT regulation
Compliance with the required VCT rules and regulations
is considered when all investment decisions are made.
Octopus measure this on a continuous basis and it is
reviewed by external advisers every six months who
perform a comprehensive validation exercise. The primary
purpose of the investment policy is to make sure the
Company continues to qualify and is approved as a VCT
by HMRC. The main criteria to which the Company must
adhere are detailed on page 99.
The Investment Manager will continue to monitor the
Company’s compliance with the VCT rules to make sure
itmeets the requirements at all times.
continued
Performance
The Board is responsible for setting the Company’s
investment strategy and performance, although the
management of the investment portfolio is delegated
to Octopus through the Investment Management
Agreement, as referred to in the Directors’ report
onpage59.
The graph below compares NAV total return
(
gross
dividends reinvested
)
of the Company over the period from
January 2014 to January 2024 with the total return from
a notional investment in relevant indices over the same
period
(
all rebased to £100
)
. These indices are considered to
be the most appropriate broad equity market indices for
comparative purposes, given the nature of the underlying
investments. The Board wishes to point out that VCTs are
not able to make investments in companies quoted on the
Main Market in their observance of the VCT rules.
The Strategic Report was approved by the Board on
28 May 2024 and signed on its behalf by:
Murray Steele
Chair
28 May 2024
0
20
40
60
80
100
120
140
160
180
200
220
240
Jan-24
Jul-23
Jan-23
Jul-22
Jan-22
Jul-21
Jan-21
Jul-20
Jan-20
Jul-19
Jan-19
Jul-18
Jan-18
Jul-17
Jan-17
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jan-14
NAV Total Return (gross divend re-invested) + 30% up front income tax relief, based on a notional investment of £100 on 31 January 2014
FTSE All-Share total return, based on £100 notional investment on 31 January 2014 and the reinvestment of all income
FTSE Small-Cap ex Investment trusts total return, based on £100 notional investment on 31 January 2014 and the reinvestment of all income
NAV Total Return (gross divend re-invested), based on a notional investment of £100 on 31 January 2014
Value of £100 investment (£)
Net asset value and share price total return
Octopus Apollo VCT plc — Annual report and financial statements 2024 41
Governance
Board of Directors 42
Corporate governance report 44
Leadership and purpose 46
Division of responsibilities 47
Composition, succession and evaluation 48
Audit, risk and internal control 51
Management Engagement Committee 54
Directors’ remuneration report 55
Directors’ report 59
42 Octopus Apollo VCT plc — Annual report and financial statements 2024
Board of Directors
Murray Steele
A
N
M
Chair
Murray was appointed as Director and Chair on
completion of the merger of Octopus Apollo VCT 1 plc,
Octopus Apollo VCT 2 plc and Octopus Apollo VCT 4
plc with the Company on 28 September 2012. Murray
has had a broad range of experience as a director of a
number of companies. Currently he is Chair of Surface
Generation Limited, a hi-tech engineering company.
Murray has Bachelor’s and Master’s degrees in mechanical
engineering from the University of Glasgow, an MBA
from Cranfield School of Management and holds an
accounting qualification. Murray was formerly a director
of Octopus Apollo 4 VCT plc.
Christopher Powles
A
N
M
Non-Executive Director
Chris was appointed as a Director on completion of the
merger of Octopus Apollo VCT 1 plc, Octopus Apollo VCT
2 plc and Octopus Apollo VCT 4 plc with the Company on
28 September 2012. Chris was the principal founder of Pi
Capital, a private client fund management company that
specialised in investing in smaller unquoted companies.
Subsequently he was the Finance Director of an AIM-
traded company, as well as a Non-Executive Director
of both listed and private companies. Currently, he is
involved in a major renewable energy and development
project in central Africa. Chris is a Chartered Accountant,
having qualified at what is now part of PwC, and has a BA
Hons degree from University of Oxford. Chris was formerly
a director of Octopus Apollo 4 VCT plc.
Key:
A
Audit Committee
N
Nomination and Remuneration Committee
M
Management Engagement Committee Independent
Chair
Claire Finn
Senior Independent Director
Claire was appointed as a Director on 21 September
2021. Claire has spent the majority of her professional
career working for BlackRock, where she held a variety of
leadership positions. Claire now has a portfolio of Non-
Executive Director roles. Her other current roles include
being Chair of UBS Asset Management Life Limited
and Non-Executive Director of Artemis Fund Managers
Limited, The Law Debenture Corporation plc, Sparrows
Capital Limited and Baillie Gifford Shin Nippon plc.
Claire has a BA Hons degree from Leeds University and a
Master’s degree in Finance from the University of London.
MNA
Octopus Apollo VCT plc — Annual report and financial statements 2024 43
Key:
A
Audit Committee
N
Nomination and Remuneration Committee
M
Management Engagement Committee Senior Independent Director
Chair
Gillian Elcock
A
N
M
Non-Executive Director
Gillian was appointed as a Director on 1 December 2023.
Gillian was the founder of Denny Ellison, an independent
investment research and training company, and was its
Managing Director for ten years. Prior to this, she worked
as an equity research analyst for several years at Putnam
Investments and Insight Investment. Gillian is a Non-
Executive Director of Melrose Industries plc, International
Biotechnology Trust plc and STS Global Income & Growth
Trust plc. She is also a member of the board of the CFA
Society of the UK. Gillian holds an MBA from the Harvard
Business School and MEng and BSc degrees from the
Massachusetts Institute of Technology.
Alex Hambro
A
N
M
Non-Executive Director
Alex was formerly Chair of Octopus Eclipse VCT plc and
was appointed as a Director on 19 December 2016, on
completion of the merger of Octopus Eclipse VCT plc
with the Company. Alex has spent the last 29 years in the
venture capital and private equity sector. As a Director
of Hambro Group Investments, he was responsible for
the establishment and operations of the Hambro Private
Equity Group, which sponsored nine fund managers
in the UK, Europe, the US and Australia. Alongside his
responsibilities with the Company, Alex also sits on the
board of Judges Scientific Plc, Oberon Investments Group
plc and Falanx Cyber Security Ltd and is a Non-Executive
Director of several private companies.
Board of Directors
continued
44 Octopus Apollo VCT plc — Annual report and financial statements 2024
Corporate governance report
The AIC Code addresses the principles and provisions
set out in the UK Corporate Governance Code
(
the ‘UK
Code’
)
, issued by the Financial Reporting Council
(
FRC
)
in
July 2018, as well as setting out additional provisions on
issues that are of specific relevance to the Company. The
FRC has confirmed that members of the AIC, who report
against the AIC Code, will be meeting their obligations
in relation to the UK Code and the associated disclosure
requirements under paragraph 9.8.6 of the Listing Rules.
The AIC Code is available on the AIC website
(
www.theaic.co.uk
)
. Itincludes 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. The Board is aware of the revisions to the UK
Corporate Governance Code, announced in January 2024,
and will be reporting against these in due course.
Corporate governance within the closed-ended
investment company industry differs from that of other
companies. In addition, VCTs differ from most other
investment companies in that they have developed, over
many years, a complex range of additional legal, tax and
regulatory requirements.
Apollo, as a VCT and closed-ended investment company,
has particular factors which have an impact on its
governance arrangements. Apollo:
•
outsources all day-to-day activities
(
such as portfolio
management, administration, accounting, custody
and company secretarial
)
. This means that it is
governed entirely by a Board of Non-Executive
Directors. In these circumstances, the proper oversight
of these relationships is the key aspect of achieving
good corporate governance;
•
does not have executive directors or employees. As a
consequence, the only ‘corporate memory’ is that of
the Non-Executive Directors; and
•
does not have customers, only shareholders.
The AIC Code deals with matters such as the relationship
with the manager and other service providers.
In practice, most of the time spent by the board of a
well-functioning investment company should be spent
on matters of general corporate governance
(
e.g. the
investment strategy, policy and performance
)
, which
applies to Apollo.
The Company is committed to maintaining high
standards in corporate governance. With the exception
of the items outlined below, the Directors consider that
the Company has, throughout the period under review,
complied with the provisions set out in the AIC Code:
•
The Chair is a member of the Audit and Risk
Committee, which is considered appropriate based on
the limited number of Directors.
•
The Chair is also Chair of the Nomination and
Remuneration Committee, which the Directors
consider to be appropriate given the small number of
Directors.
•
The Company has no major shareholders with a
notifiable interest. Shareholders have an opportunity
to meet with the Non-Executive Directors at the AGM.
Shareholders are welcome to contact the Board or
Octopus at any time.
•
The Directors do not all stand for annual re-election.
This is to make sure experience is retained on the Board
and that the Company has at least two Directors at
all times. Ashighlighted earlier, the Board considers
all the Directors to be independent of the Investment
Manager.
The Board of Apollo has considered the principles and provisions of the Association of Investment
Companies Code of Corporate Governance
(
the ‘AIC Code’
)
.
Octopus Apollo VCT plc — Annual report and financial statements 2024 45
Corporate governance report
continued
Viability statement
In accordance with provision 36 of the AIC Code of
Corporate Governance, the Directors have assessed the
prospects of the Company over a period of five years,
consistent with the expected investment holding period of
a VCT investor. Under VCT rules, subscribing investors are
required to hold their investment for a five-year period in
order to benefit from the associated tax reliefs. The Board
regularly considers strategy, including investor demand
for the Company’s shares, and a five-year period is
considered to be a reasonable time horizon for this.
The Board carried out a robust assessment of the
emerging and principal risks facing the Company and its
current position.
This includes risks which may adversely impact its
business model, future performance, solvency or liquidity,
and focused on the major factors which affect the
economic, regulatory and political environment. Particular
consideration was given to the Company’s reliance on,
and close working relationship with, the Investment
Manager. The principal risks faced by the Company and
the procedures in place to monitor and mitigate them are
set out on pages 35 to 38.
The Board has carried out robust stress testing of cash
flows which included; assessing the resilience of portfolio
companies, including the requirement for any future
financial support; and the ability to pay dividends and
buybacks.
The Board has additionally considered the ability of the
Company to comply with the ongoing conditions to make
sure it maintains its VCT qualifying status under its current
investment policy.
Based on the above assessment the Board confirms that
it has a reasonable expectation that the Company will
be able to continue in operation and meet its liabilities as
they fall due over the five-year period to 31 January 2029.
The Board is mindful of the ongoing risks and will continue
to make sure that appropriate safeguards are in place, in
addition to monitoring the cash flow forecasts to make
sure that the Company has sufficient liquidity.
Going concern
The Company’s business activities, together with
the factors likely to affect its future development,
performance and position, are set out in the Strategic
Report, on pages 3 to 40. Further details on the
management of financial risk may be found in Note 16 to
the financial statements.
The Board receives regular reports from the Investment
Manager and the Directors believe that, as no material
uncertainties leading to significant doubt about going
concern have been identified, it is appropriate to continue
to adopt the going concern basis in preparing the financial
statements.
As mentioned in the Business Review, the Board has
considered the Company’s cash flow projections and
found these to be realistic and reasonable.
The assets of the Company include holdings in MMFs and
OEICs which are readily realisable, as well as cash. As at
31January 2024 cash and current asset investments made
up 13.0% of net assets and, accordingly, the Company has
adequate financial resources to continue in operational
existence for at least the next twelve months from the
date of this report.
46 Octopus Apollo VCT plc — Annual report and financial statements 2024
Leadership and purpose
Board of Directors
The Company has a Board of five Non-Executive
Directors, all of whom are considered to be independent
of the Company’s Investment Manager, Octopus
Investments.
The Board meets a minimum of five times per annum,
and on other occasions as required, to review the
investment performance and monitor compliance with
the investment policy laid down by the Board.
The Board has a formal schedule of matters specifically
reserved for its decision, which includes:
•
the consideration and approval of future developments
or changes to the investment policy, including risk and
asset allocation;
•
consideration of corporate strategy;
•
approval of the appropriate dividend to be paid to the
shareholders;
•
the appointment, evaluation, removal and
remuneration of the Investment Manager;
•
the performance of the Company, including monitoring
of the discount of the net asset value to the share price;
and
•
monitoring shareholder profiles and considering
shareholder communications.
The Chair leads the Board in the determination of
its strategy and in the achievement of its objectives.
The Chair is responsible for organising the business of
the Board, ensuring its effectiveness and setting its
agenda, and has no involvement in the day-to-day
business of the Company. He facilitates the effective
contribution of the Directors and ensures that they
receive accurate, timely and clear information and
that they communicate effectively with shareholders.
The Company Secretary is responsible for advising the
Board through the Chair on all governance matters. All
of the Directors have access to the advice and services
of the Company Secretary, who has administrative
responsibility for the meetings of the Board and its
Committees. Directors may also take independent
professional advice at the Company’s expense where
necessary in the performance of their duties.
The Company’s Articles of Association and the schedule of
matters reserved to the Board for decision provide that the
appointment and removal of the Company Secretary is a
matter for the full Board.
During the year the following meetings were held:
Full Board Meetings
Held
No. of Meetings
Attended
Audit and Risk
Committee
Meetings Held
Audit and Risk
Committee
Meetings Attended
Murray Steele
(
Chair
)
7 7 6 6
Christopher Powles 7 7 6 6
Alex Hambro 7 7 6 6
Claire Finn 7 7 6 6
Gillian Elcock
1
2 2 1 1
1
Gillian Elcock was appointed to the Board on 1 December 2023 and has attended all meetings since her date of appointment
Additional meetings not included above were held as required to address specific issues including considering recommendations from
the Investment Manager, allotments and share repurchases. A brief biographical summary of each Director is given on pages 42 to 43.
Octopus Apollo VCT plc — Annual report and financial statements 2024 47
Board committees
The Board has appointed three committees to make
recommendations to the Board in specific areas:
The Audit and Risk Committee, chaired by Christopher
Powles, consists of all five Directors. The independence
of the Audit and Risk Committee is not impaired by this
and due to the structure of Apollo this is appropriate. The
Audit and Risk Committee believes Mr Powles possesses
appropriate and relevant financial experience as per the
requirements of the AIC Code of Corporate Governance.
The Board considers that the members of the Committee
are independent and have collectively the skills and
experience required to discharge their duties effectively.
The Audit and Risk Committee Report is given on
pages51to 53.
The Management Engagement Committee, which was
established towards the end of the financial year, assists
the Board in evaluating the performance of the Portfolio
Manager and other third-party service providers engaged
by the Company. The Management Engagement
Committee is chaired by Claire Finn and comprises all five
Directors.
The Nomination and Remuneration Committee,
comprising all five Directors and chaired by Murray Steele,
considers the selection and appointment of Directors to
the Board and its committees. The Committee considers
composition and succession, appointing new members on
merit, measured against objective criteria with due regard
for the benefits of gender and diversity. The Committee
also has responsibility for setting the remuneration policy
for the Non-Executive Directors. Detailed information
relating to the remuneration of Directors is given in the
Directors’ Remuneration Report on pages 55 to 58.
Division of responsibilities
48 Octopus Apollo VCT plc — Annual report and financial statements 2024
Composition, succession and evaluation
As reported previously, the Board has decided that each
year two Directors will offer themselves for re-election.
The Board believes that this is in the best interests of
shareholders as it complies with the Company’s Articles
of Association, the Companies Act for a listed company
and the UK Listing Rules to have a minimum of two
Directors. Directors appointed by the Board will stand
for election at the next AGM following appointment.
The Director rotation for re-election is as follows:
Date of
Original
Appointment
Due Date for
Election/
Re-election
Murray Steele
(
Chair
)
28/09/2012 AGM 2024
Christopher Powles 28/09/2012 AGM 2025
Alex Hambro 19/12/2016 AGM 2025
Claire Finn 21/09/2021 AGM 2024
Gillian Elcock 01/12/2023 AGM 2024
Independence
The Directors believe that, in line with the AIC Code, all
members of the Board are independent and as such are
identified as independent in character and judgement
with respect to their duties to the shareholders.
Length of service of the Chair and other Directors is
one of a number of factors taken into account when
considering the contribution and ongoing independence
of the Board, both individually and in terms of overall
composition. The Board considers the experience,
range of skills, knowledge of Apollo and its operating
environment and diversity of the Directors. Accordingly,
the Board’s policy on tenure is that the term the Chair
and other Directors serve on the Board should not
be restricted to a fixed time limit in order to ensure
sufficient corporate memory and consistent adherence
to strategy.
Board succession
The Directors recognise the importance of ensuring the
Board remains independent, and collectively has sufficient
breadth of experience and expertise to appropriately
represent Apollo’s shareholders’ best interests. Trust
Associates Limited, who are independent of Apollo, were
engaged in the recruitment of Gillian Elcock who was
appointed to the Board on 1 December 2023.
Performance evaluation
Each year a formal performance evaluation is undertaken
of the Board as a whole, its Committees and the
Directors in the form of a questionnaire. The Directors
were made aware of the annual performance evaluation
on their appointment. The Chair provides a summary
of the findings to the Board, which are discussed at the
next meeting and an action plan agreed. There were no
issues requiring action in the period. The performance of
the Chair was evaluated by the other Directors led by the
Senior Independent Director.
The Board also conducts an evaluation of Octopus, as
the Investment Manager, and feedback of the results
of the evaluation is provided to Octopus. Further
details can be found in the Report of the Management
Engagement Committee on page 54.
Octopus Apollo VCT plc — Annual report and financial statements 2024 49
Gender identity or sex
Number of Board
members
Percentage of the
Board
Number of senior
positions on the Board
(
CEO, CFO, SID and Chair
)
1
Men 3 60% 1
Women 2 40% 1
Not specified/ prefer not to say – – –
1
The Company is externally managed and therefore does not have executive management functions, specifically it does not have a
CEO or CFO. The Company considers that the role of Chair and Senior Independent Director are senior positions. Of these two senior
positions, one is performed by a man and one by a woman.
Ethnic background
Number of Board
members
Percentage of the
Board
Number of senior
positions on the Board
(
CEO, CFO, SID and Chair
)
2
White British or Other White
(
including minority white groups
)
4 80% 2
Mixed/ Multiple Ethnic Groups – – –
Asian/ Asian British – – –
Black/ African/ Caribbean/ Black British 1 20% –
Other ethnic group, including Arab – – –
Not specified/ prefer not to say – – –
2
The Company is externally managed and therefore does not have executive management functions, specifically it does not have a
CEO or CFO. The Company considers that the role of Chair and Senior Independent Director are senior positions. Of these two senior
positions, one is performed by a man and one by a woman.
Composition, succession and evaluation
continued
Gender and diversity
The Board of Directors comprises two female and
three male Non-Executive Directors with considerable
experience of the VCT and investment management
industries, and investment in early-stage growth
companies. The diversity and composition of the Board
is reviewed on an annual basis. As per Listing Rule 9.8.6R
(
9
)(
a
)
40% of individuals on the Company’s Board were
women as at 31 January 2024.
As the Company is externally managed the roles of CEO
or CFO do not exist. The Company considers the role of
Senior Independent Director as a senior Board position.
This position is held by a woman. Furthermore, 20%
of the Board is comprised of a person from a minority
ethnic background.
The tables below which report on gender identity/sex
and ethnic background are included for completeness.
Appointment and replacement of Directors
A person may be appointed as a Director of the
Company by the shareholders in a general meeting
by Ordinary Resolution
(
requiring a simple majority of
the persons voting on the relevant resolution
)
or by the
Directors; no person, other than a Director retiring by
rotation or otherwise, shall be appointed or re-appointed
a Director at any general meeting unless he or she is
recommended by the Directors or, not less than seven
nor more than 42clear days before the date appointed
for the meeting, notice is given to the Company of the
intention to propose that person for appointment or
re-appointment in the form and manner set out in the
Company’s Articles of Association. Each Director who
is appointed by the Directors
(
and who has not been
elected as a Director of the Company by the members
at a general meeting held in the interval since his or her
appointment as a Director of the Company
)
is to be
subject to election as a Director of the Company by the
members at the first AGM of the Company following
his or her appointment. At each AGM of the Company
one third of the Directors for the time being, or if their
number is not three or an integral multiple of three
the number nearest to but not exceeding one-third,
are to be subject to re-election. The Companies Act
allows shareholders in meetings by Ordinary Resolution
(
requiring a simple majority of the persons voting on
the relevant resolution
)
to remove any Director before
the expiration of his or her period of office, but without
prejudice to any claim for damages which the Director
may have for breach of any contract of service between
him or her and the Company. A person also ceases to
be a Director if he or she resigns in writing, ceases to be
50 Octopus Apollo VCT plc — Annual report and financial statements 2024
Composition, succession and evaluation
continued
a Director by virtue of any provision of the Companies
Act, becomes prohibited by law from being a Director,
becomes bankrupt or is the subject of a relevant
insolvency procedure, or becomes of unsound mind,
or if the Board so decides following at least six months’
absence without leave or if he or she becomes subject to
relevant procedures under the mental health laws, as set
out in the Company’s Articles of Association.
The Board does not have a policy limiting the tenure of
any Director, including the Chair, as the Board does not
consider that a Director’s length of service reduces their
ability to act independently of the Investment Manager.
Powers of the Directors
Subject to the provisions of the Companies Act, the
Memorandum and Articles of Association of the
Company and any directions given by shareholders by
Special Resolution, the Articles of Association specify
that the business of the Company is to be managed by
the Directors, who may exercise all the powers of the
Company, whether relating to the management of the
business or not. In particular the Directors may exercise
on behalf of the Company its powers to purchase its
own shares to the extent permitted by shareholders.
Authority was given at the Company’s AGM held
on 11July 2023 to make market purchases of up to
101,288,382Ordinary shares, as per the terms set out
in the relevant resolution. Renewed authority is being
sought at the 2024 AGM as set out in the notice of
meeting.
Octopus Apollo VCT plc — Annual report and financial statements 2024 51
This report is submitted in accordance with the AIC
Code of Corporate Governance in respect of the
year ended 31 January 2024 and describes the work
of the Audit and Risk Committee in discharging its
responsibilities.
The Committee’s key objective is the provision of
effective governance of the appropriateness of the
Company’s financial reporting, the performance of the
auditor and the management of the internal control and
business risks systems. The Directors forming the Audit
and Risk Committee can be found on pages 42 to 43.
Matters considered by the Audit and Risk
Committee
The Audit and Risk Committee’s terms of reference
include the following responsibilities:
•
reviewing and making recommendations
to the Board in relation to the Company’s
published financial statements and other formal
announcements relating to the Company’s financial
performance;
•
advising the Board on whether the Annual Report
and Accounts, taken as a whole, is fair, balanced and
understandable;
•
reviewing the viability and going concern assessment;
•
advising the Board on whether the Annual Report
and Accounts provides necessary information for
shareholders to assess position and performance,
business model and strategy;
•
reviewing and making recommendations to the
Board in relation to the Company’s internal control
(
including internal financial control
)
and risk
management systems;
•
periodically considering the need for an internal
audit function;
•
reviewing the valuations of the investments portfolio;
•
making recommendations to the Board in relation
to the appointment, re-appointment and removal of
the external auditor and approving the remuneration
and terms of engagement of the external auditor;
•
reviewing the external auditor’s audit plan;
•
reviewing and monitoring the external auditor’s
independence and objectivity and the effectiveness
of the audit process, taking into consideration
relevant UKregulatory requirements;
•
monitoring the extent to which the external auditor is
engaged to supply non-audit services; and
•
ensuring that the Investment Manager has
arrangements in place for the investigation and
follow-up of any concerns raised confidentially by
staffin relation to propriety of financial reporting or
other matters.
As part of the process of working with the Board to
maximise effectiveness, meetings of the Committee
usually take place immediately prior to a Board
meeting and a report is provided on relevant matters
to enable the Board to carry out its duties.
The Committee reviews its terms of reference and its
effectiveness periodically and recommends to the
Board any changes required as a result of the review.
The terms of reference are available on request from
the Company Secretary. The Committee meets at least
twice each year and on an ad hoc basis as necessary
and has direct access to BDO LLP, the Company’s
external auditor.
Auditor appointment
When considering whether to recommend the
appointment or re-appointment of the external
auditor, the Committee takes into account the tenure
of the current auditor in addition to comparing the
fees charged by similar sized audit firms. The current
auditor was appointed on 12 July 2018 following a
competitive tender process. Elizabeth Hooper was
appointed as audit partner for the 2024 year-end audit
following rotation requirements for the previous audit
partner to be rotated off.
Audit, risk and internal control
Audit and Risk Committee report
52 Octopus Apollo VCT plc — Annual report and financial statements 2024
Auditor independence and objectivity
The Committee reviews the information and
assurances provided by the auditor on its compliance
with the relevant ethical standards. No non-audit
services were provided by the auditor during the period
and therefore the Audit and Risk Committee does not
believe there are any influences on their independence
or objectivity.
Auditor evaluation
The effectiveness of the external audit is assessed as
part of the Board evaluation conducted annually and
by the quality and content of the audit plan and report
provided to the Committee by the Auditor and the
resultant discussions on topics raised. The Committee
also challenges the Auditor when present at a
Committee meeting if appropriate. In accordance with
guidance issued by the Financial Reporting Council the
audit partner is rotated every five years to make sure
that objectivity and independence is not impaired.
Internal audit
The Company does not have an independent internal
audit function as it is not deemed necessary given
the nature of the Company’s business. However, the
Committee considers annually whether there is a need
for such a function and, if so, would recommend this to
the Board. Octopus has an internal audit team which
is supported, as required, by external consultants.
Octopus’ Compliance Department reports to the Board
on the outcome of the internal audits that have taken
place, in so far as these relate to the Company, and
confirms the absence of any issues relating to internal
audit, of which the Board should be aware.
Octopus undertakes to immediately raise to the
Committee any significant issues arising from the
Octopus internal audit that affect the Company. The
Committee is satisfied with the level of reporting.
The Committee will monitor the significant risks at
each meeting and Octopus will work closely with the
Auditors to mitigate the risks and the resultant impact.
Discharge of responsibilities
During the period ended 31 January 2024, the Audit
and Risk Committee discharged its responsibilities by:
•
reviewing and amending the Committee’s terms of
reference;
•
reviewing and updating the Company’s risk register;
•
reviewing and approving the external auditor’s terms
of engagement and remuneration;
•
reviewing the external auditor’s plan for the audit
of the Company’s financial statements, including
identification of key risks and confirmation of auditor
independence;
•
reviewing the Octopus statement of internal controls
in relation to the Company’s business and assessing
the effectiveness of those controls in minimising the
impact of key risks;
•
reviewing periodic reports on and the effectiveness
of the Octopus compliance and internal audit
procedures;
•
reviewing the valuations of the investment portfolio;
•
reviewing the appropriateness of the Company’s
accounting policies;
•
reviewing the Company’s draft annual financial and
interim results statements prior to Board approval;
•
reviewing the external auditor’s Audit Findings
Report to the Committee on the annual financial
statements; and
•
reviewing the Company’s going concern status as
referred to on page 45.
The Committee has considered the Annual Report
and Accounts for the year ended 31 January 2024 and
has reported to the Board that it considers them to be
fair, balanced and understandable and providing the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Significant audit risks
The Audit and Risk Committee is responsible for
considering significant issues that arise in relation to the
financial statements. The Committee has identified the
most significant risks for the Company as:
•
Valuation of investment portfolio: the Committee
gives special audit consideration to the valuation of
investments and the supporting data provided by the
Investment Manager. The impact of this risk could be
a large movement in the Company’s net asset value.
The valuations are supported by portfolio companies’
and third-party evidence. These give comfort to the
Audit and Risk Committee.
•
Management override of financial controls: the
Committee reviews all significant accounting
estimates that form part of the financial statements
and consider any material judgements applied by
management during the preparation of the financial
statements.
Audit, risk and internal control
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 53
These issues were discussed with the Investment
Manager and the Auditor at the conclusion of the audit
of the financial statements.
The Audit and Risk Committee is also responsible for
considering and reporting on any significant issues
that arise in relation to the audit of the financial
statements. The Audit and Risk Committee can
confirm that there were no significant issues to
report to the shareholders in respect of the audit
of the financial statements for the year ended
31January2024.
Internal controls
The Directors have overall responsibility for keeping under
review the effectiveness of the Company’s systems of risk
management and internal controls. The purpose of these
controls is to make sure that proper accounting records
are maintained, the Company’s assets are safeguarded
and the financial information used within the business
and for publication is accurate and reliable; such a system
can only provide reasonable and not absolute assurance
against material misstatement or loss. The system of risk
management and internal control is designed to manage
rather than eliminate the risk of failure to achieve the
business objectives.
The Investment Manager is engaged to carry out the
accounting function and retains physical custody of the
documents of title relating to unquoted investments.
Quoted investments are held in CREST. The Investment
Manager regularly reconciles the client asset register with
the physical documents.
The Directors confirm that they have established a
continuing process throughout the period and up to
the date of this report for identifying, evaluating and
managing the significant potential risks faced by the
Company and have reviewed the effectiveness of the
risk management and internal control systems. As part
of this process an annual review of the risk management
and internal control systems is carried out in accordance
with the Financial Reporting Council guidelines. The Board
does not consider it appropriate to have an internal audit
function due to the nature of Apollo’s transactions as this
would not be an appropriate control for a VCT.
The risk management and internal control systems relevant
to financial reporting include the production and review
of monthly bank reconciliations and management
accounts. All outflows made from the Company’s
accounts require the authority of two signatories from the
Investment Manager. Further to this, the Audit Partner
has open access to the Directors of the Company and
the Investment Manager is subject to regular review
by the Octopus Compliance and Octopus Internal
AuditDepartments.
Financial risk management
The Company is exposed to the risks arising from its
operational and investment activities. Further details
can be found on pages 35 to 38 and in Note 16 to the
financialstatements.
Christopher Powles
Audit and Risk Committee Chair
28 May 2024
Audit, risk and internal control
continued
54 Octopus Apollo VCT plc — Annual report and financial statements 2024
Management Engagement Committee
Management Engagement
Committee report
In June 2023, the Board established a Management
Engagement Committee to help in evaluating the
performance of the Manager and other third-party
service providers engaged by Apollo. The Committee is
chaired by Claire Finn, and comprises all five Directors.
The Committee’s responsibilities are:
•
to review, at least annually, the contractual
relationships with the Investment Manager and terms
of the Investment Management Agreement, to make
sure they are competitive and in the interests of
shareholders as a whole, making recommendations
to the Board on any variation to the terms which it
considers necessary or appropriate;
•
to review, at least annually, the performance of the
Investment Manager and describe its decisions and
rationale in the annual report;
•
to consider whether the appointment of the
Investment Manager continues to be in the interests
of shareholders;
•
if it considers it necessary or appropriate, to
negotiate/re-negotiate terms with the Investment
Manager;
•
to review the standard of services provided by
the Investment Manager under the terms of the
Investment Management Agreement, which
covers investment and non-investment services
(
administrative, finance, company secretarial, sales
and marketing activities
)
;
•
to review, monitor and evaluate, at least annually,
the performance of the Company’s third-party
service providers in meeting their obligations under
their respective agreements and to ensure their
continued competitiveness and effectiveness,
making recommendations on any variation to
the terms of their appointment which it considers
necessary or appropriate;
•
to assess the Company’s third-party service
providers in their role as stakeholders and whether
there is an appropriate level of engagement with
them; and
•
to consider any conflicts of interest which may arise
for the providers of services to the Company.
The Committee met subsequent to the period end and
confirmed the continued appointment of Octopus, on
the agreed terms, was in the interests of shareholders.
Claire Finn
Management Engagement Committee Chair
28 May 2024
Octopus Apollo VCT plc — Annual report and financial statements 2024 55
Introduction
This report is submitted in accordance with the Large
and Medium-sized Companies and Groups
(
Accounts
and Reports
)
(
Amendment
)
Regulations 2013 in respect
of the year ended 31 January 2024. The reporting
obligations require that two sections be included,
aDirectors’ Remuneration Policy Report and an Annual
Remuneration Report, which are presented below.
The Company’s auditor, BDO LLP, is required to give its
opinion on certain information included in this report;
this comprises the Directors’ emoluments section and
share information below. Their report on these and
other matters is set out on pages 65 to 73.
Consideration by the Directors of matters
relating to Directors’ remuneration
During the year ended 31 January 2024, the Board
has appointed the Nomination and Remuneration
Committee to consider remuneration; historically this
was considered by the Board.
The Board has not sought advice or services from
any external person in respect of its consideration of
Directors’ remuneration during the year, although the
Directors expect from time to time to review the fees
against those paid to the Boards of directors of other
VCTs. The Company does not have a Chief Executive
Officer, SeniorManagement or any employees.
Directors’ remuneration policy report
The Board consists entirely of Non-Executive Directors,
who meet at least five times a year and on other
occasions as necessary, to deal with important aspects of
the Company’s affairs. Directors are appointed with the
expectation that they will serve for, at least, a period of
three years. All Directors retire at the first general meeting
after election and thereafter at least two Directors are
subject to retirement by rotation at subsequent AGMs.
Re-election will be recommended by the Board but is
dependent upon the shareholder vote.
Each Director receives a letter of appointment. A Director
may resign by notice in writing to the Board at any time
giving three months’ notice. None of the Directors are
entitled to compensation payable upon early termination
of their contract other than in respect of any unexpired
notice period.
The maximum level of Directors’ remuneration is fixed
by the Company’s Articles of Association, not to exceed
£250,000 per annum in aggregate; any amendment to
this is by way of an Ordinary Resolution subject to the
approval of shareholders in a general meeting.
The Company’s policy is that the fees payable to the
Directors should reflect the time spent by the Board on the
Company’s affairs and the responsibilities borne by the
Directors. They should be sufficient to attract candidates
of high calibre to be recruited.
The policy is for the Chair of the Board and the Chair
of the Audit and Risk Committee to be paid higher
fees than the other Directors in recognition of their
more onerous roles. The policy is to review these
rates from time to time, although such review will not
necessarily result in any changes. Due to the nature
of the Company, there are no employees other than
the Directors and therefore there are no employee
remuneration issues to consider when determining the
Directors’ remuneration.
The Company’s policy is for the Directors to be
remunerated in the form of fees, payable quarterly
in arrears. The fees are not specifically related to
the Directors’ performance, either individually or
collectively. There are no long-term incentive schemes,
share option schemes or pension schemes in place.
No other remuneration or compensation was paid or
payable by the Company to any of the Directors during
the period.
An Ordinary Resolution to approve the Directors’
Remuneration Policy of the Company was put to
shareholders at the 2023 AGM and remains in force for
a three-year period.
Annual remuneration report
This section of the report is subject to approval by a simple
majority of shareholders at the 2024 AGM, as in previous
years.
Directors’ remuneration report
56 Octopus Apollo VCT plc — Annual report and financial statements 2024
Statement of voting at the Annual General Meeting
The most significant portion of the votes cast against a resolution at the 2023 AGM were
for the resolutions relating to the approval of the Directors’ Remuneration Policy
(
10.26%
)
and the approval of the Directors’ Remuneration Report
(
6.42%
)
. No communication
was received from shareholders giving reasons for the votes against the resolutions.
Shareholders’ views are always welcomed and considered by the Board.
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 Investment
Manager through the Investment Management Agreement, as referred to in the Directors’
Report. The performance graph on page 40 shows the performance of the Company.
Directors’ fees
(
audited
)
The amount of each Director’s fees, as audited, were:
Year ended
31 January
2024
£
Year ended
31 January
2023
£
Murray Steele
(
Chair
)
40,000 40,000
Christopher Powles 35,000 35,000
Alex Hambro 30,000 30,000
Claire Finn 30,000 30,000
Gillian Elcock
(
appointed on 1 December 2023
)
5,000 n/a
Total 140,000 135,000
The Directors do not receive any other form of emoluments in addition to the Directors’
fees; their total remuneration is fixed and not linked to the performance of the Company
and no bonuses were or will be paid to the Directors.
The Chair of the Company and Audit Chair receive additional remuneration over the basic
Director’s fee in recognition of the additional responsibilities and time commitment of their
roles. Following a review, the following fee rates were agreed with effect from 1 February
2024
(
previous fees shown in brackets
)
: Chair of the Board £44,000
(
£40,000
)
, Chair of the
Audit Committee £38,500
(
£35,000
)
, and all other Directors £33,000
(
£30,000
)
.
Directors’ remuneration report
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 57
Directors’ fees annual percentage change
2024 % change
(
annualised
)
2023 % change 2022 % change
Murray Steele
(
Chair
)
0% 33% 0%
Christopher Powles 0% 40% 0%
James Otter
(
resigned on
31July 2021
)
n/a n/a
(
50%
)
Alex Hambro 0% 33% 0%
Claire Finn
(
appointed on
21September 2021
)
0% 33% n/a
Gillian Elcock
(
appointed on
1 December 2023
)
n/a n/a n/a
Total 3.7% 35%
(
1.9%
)
Relative importance of spend on pay
The actual expenditure in the current year is as follows:
Year to
31 January
2024
£’000
Year to
31 January
2023
£’000 % change
Total buybacks 6,743 8,220
(
18.0%
)
Total dividends paid 19,165 14,323 33.8%
Total management and
performance fees
7,463 14,949
(
50.1%
)
Total Directors’ fees 140 135 3.7%
There were no other significant payments during the year relevant to understanding the
relative importance of spend on pay.
Directors’ interests in shares
(
audited
)
There are no guidelines or requirements for Directors to own shares in the Company.
Theinterests of the Directors, and their connected persons, in shares of the Company
during the year
(
in respect of which transactions are notifiable under Disclosure and
Transparency Rule 3.1.2R
)
in the issued Ordinary share of 0.1p each are shown in the
tablebelow:
As at
31 January
2024
As at
31 January
2023
Murray Steele
(
Chair
)
465,577 404,962
Christopher Powles 44,790 34,982
Alex Hambro 106,420 103,615
Claire Finn 40,887 20,205
Gillian Elcock – n/a
In the period 31 January 2024 to the date of this report, the Directors’ share interests have
increased as follows:
On 28 March 2024, Murray Steele acquired 7,881 Ordinary shares, and his spouse 2,261
Ordinary shares. Claire Finn acquired 506 Ordinary shares.
On 2 May 2024, Directors were allotted shares in accordance with Apollo’s Dividend
Reinvestment Scheme as follows: Murray Steele and his spouse 9,789 and 2,511 Ordinary
shares respectively; Christopher Powles 1,028 Ordinary shares; Alex Hambro 2,811 Ordinary
shares; and Claire Finn 1,080 Ordinary shares.
All of the Directors’ shares were held beneficially. Any information required by legislation in
relation to executive directors
(
including a Chief Executive Officer
)
or employees has been
omitted because the Company has neither and therefore it is not relevant.
Directors’ remuneration report
continued
58 Octopus Apollo VCT plc — Annual report and financial statements 2024
Shareholders proxy voting information
As required by Schedule 8:23 of the Regulations, the votes received at the AGM held on 11 July 2023 were as follows:
For Discretion Against
No. of
Shares %
No. of
Shares %
No. of
Shares %
Approval of Directors’ Remuneration Report 9,432,585 82.38 1,281,988 11.20 735,089 6.42
The votes received for the approval of the Directors’ Remuneration Policy at the AGM held in 2023 were as follows:
For Discretion Against
No. of
Shares %
No. of
Shares %
No. of
Shares %
Approval of Directors’ Remuneration Policy 9,202,124 78.79 1,278,087 10.95 1,198,786 10.26
By Order of the Board
Murray Steele
Chair
28 May 2024
Directors’ remuneration report
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 59
Directors’ report
The Corporate Governance Report on pages 44 to 45, and
the Audit and Risk Committee Report on pages 51 to53
form part of this Directors’ Report.
The Directors consider that the annual report and
accounts, taken as a whole is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position,
performance, business model and strategy.
Directors
Brief biographical notes on the Directors are given on
pages 42 and 43.
In accordance with the Articles of Association and the
AICCode, Gillian Elcock offers herself for election.
The Board has previously reported the decision that each
year two Directors will offer themselves for re-election.
Accordingly, Mr Steele and Ms Finn will retire as Directors
at the AGM, and being eligible, offer themselves for
re-election.
The Board has considered provisions of the Association of
Investment Companies Code of Corporate Governance
and, following a formal performance evaluation as part of
the Board evaluation, believes that Mr Steele and Ms Finn
continue to be effective and demonstrate commitment
to their role, the Board and the Company. The Board
therefore has no hesitation in recommending them for
re-election at the forthcoming AGM. Further details
can be found in the Corporate Governance report on
pages44to45.
Directors’ and Officers’ liability insurance
The Company has, as permitted by the Companies
Act 2006, maintained insurance cover on behalf of the
Directors and Company Secretary indemnifying them
against certain liabilities which may be incurred by them
in relation to the Company.
Management
The Company has in place an agreement with Octopus to
act as Investment Manager, which is central to the ability
of the Company to continue in business. The principal
terms of the Company’s management agreement
with Octopus are set out in Notes 3 and 19 to the
financial statements. Octopus also provides secretarial,
administrative and custodian services to the Company.
There are no other contracts which are deemed to be
essential to the business of the Company.
As required by the Listing Rules, the Directors confirm
that, in their opinion, the continuing appointment of
Octopus as Investment Manager is in the best interests of
the shareholders as a whole. In reaching this conclusion,
the Directors who are all independent of the Investment
Manager, have taken into account the performance of
the investment portfolio and the ability of the Investment
Manager to produce satisfactory investment performance
in the future. They also considered the twelve-month
notice period of the management agreement and fees
payable to Octopus, together with the standard of
other services provided which include secretarial and
accounting services. Details of the fees paid to Octopus in
respect of services provided are detailed in Note 3 to the
financial statements.
No Director has an interest in any contract to which the
Company is party.
The Company has established a performance incentive
scheme whereby the Investment Manager is entitled to
an annual performance related incentive fee in the event
that certain performance criteria are met. Further details
of this scheme are disclosed within Note 19 to the financial
statements.
The Board has delegated the routine management
decisions such as the payment of standard running costs
to the Investment Manager. The Investment Manager also
has authority for investment decisions.
Whistleblowing
Please refer to page 30 for our statement on
whistleblowing.
Bribery Act
Please refer to page 30 for our statement on the
BriberyAct.
The Directors present their report and the audited financial
statements for the year to 31 January 2024.
60 Octopus Apollo VCT plc — Annual report and financial statements 2024
Directors’ report
VCT regulation
Compliance with required rules and regulations is
considered when all investment decisions are made.
TheCompany is further monitored on a continual basis
to ensure compliance. The main criteria which the
Company must adhere to are detailed on page 99.
Apollo will continue to ensure its compliance with the
qualification requirements.
Environment policy and greenhouse gas
emissions
Refer to pages 26 to 30 in the Strategic Report for our
Responsible Investment policy and greenhouse gas
emissions.
Share capital and rights attaching to
the shares and restrictions on voting
andtransfer
The Company’s Ordinary share capital as at 31 January
2024 was 772,743,612 Ordinary shares of 0.1p
(
2023:
657,239,253
)
. No shares were held in Treasury. Subject to
any suspension or abrogation of rights pursuant to relevant
law or the Company’s Articles of Association, the shares
confer on their holders the following principal rights:
(
a
)
the right to receive out of returns available for
distribution to each share class such dividends as
may be agreed to be paid
(
in the case of a final
dividend in an amount not exceeding the amount
recommended by the Board as approved by each
class of shareholders in general meeting or in the
case of an interim dividend in an amount determined
by the Board
)
. All dividends unclaimed for a period of
twelve years after having become due for payment
are forfeited automatically and cease to remain
owing by the Company;
(
b
)
the right, on a return of assets on a liquidation,
reduction of capital or otherwise, to share in the
surplus assets of the Company remaining after
payment of its liabilities pari passu with the other
holders of Ordinary shares; and
(
c
)
the right to receive notice of and to attend and
speak and vote in person or by proxy at any general
meeting of the Company. On a show of hands every
member present or represented and voting has
one vote and on a poll every member present or
represented and voting has one vote for every share
of which that member is the holder; the appointment
of a proxy must be received not less than 48 hours
before the time of the holding of the relevant meeting
or adjourned meeting or, in the case of a poll taken
otherwise than at or on the same day as the relevant
meeting or adjourned meeting, be received after the
poll has been demanded and not less than 24 hours
before the time appointed for the taking of the poll.
These rights can be suspended. If a member, or any
other person appearing to be interested in shares held
by that member, has failed to comply within the time
limits specified in the Company’s Articles of Association
with a notice pursuant to s793 of the Companies Act
2006
(
notice by the Company requiring information
about interests in its shares
)
, the Company can, until
the default ceases, suspend the right to attend and
speak and vote at a general meeting and, if the shares
represent at least 0.25% of their class, the Company
can also withhold any dividend or other money payable
in respect of the shares
(
without any obligation to pay
interest
)
and refuse to accept certain transfers of the
relevant shares. Shareholders, either alone or with
other shareholders, have other rights as set out in the
Company’s Articles of Association and in company law.
A member may choose whether his shares are
evidenced by share certificates
(
certificated shares
)
or
held in electronic
(
uncertificated
)
form in CREST
(
the
UK electronic settlement system
)
. Any member may
transfer all or any of his shares, subject in the case of
certificated shares to the rules set out in the Company’s
Articles of Association or in the case of uncertificated
shares to the regulations governing the operation of
CREST
(
which allow the Directors to refuse to register a
transfer as therein set out
)
; the transferor remains the
holder of the shares until the name of the transferee is
entered in the register of members. The Directors may
refuse to register a transfer of certificated shares in
favour of more than four persons jointly or where there
is no adequate evidence of ownership or the transfer
is not duly stamped
(
if so required
)
. The Directors may
also refuse to register a share transfer if it is in respect
of a certificated share which is not fully paid up or on
which the Company has a lien provided that, where the
share transfer is in respect of any share admitted to the
Official List maintained by the UK Listing Authority, any
such discretion may not be exercised so as to prevent
dealings taking place on an open and proper basis, or if
in the opinion of the Directors
(
and with the concurrence
of the UK Listing Authority
)
exceptional circumstances
so warrant, provided that the exercise of such power will
not disturb the market in those shares. Whilst there are
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 61
Directors’ report
no squeeze-out and sell out rules relating to the shares
in the Company’s Articles of Association, shareholders
are subject to the compulsory acquisition provisions in
s974 to s991 of the Companies Act 2006.
Share issues and open offers
During the year under review 8,713,356 shares were
issued to those shareholders who elected to receive
shares under the DRIS as an alternative to dividends.
This raised £4.5 million to the Company. See Note 14 to
the financial statements for details.
On 16 November 2023, a prospectus offer was launched
to raise up to £35 million, with a £15 million over-
allotment facility. This prospectus closed to further
applications on 19March 2024 being fully subscribed.
Share buybacks and redemptions
During the period the Company purchased for
cancellation 13,332,183 Ordinary shares, with a nominal
value of £13,332, at a weighted average price of
50.6p per share for total consideration of £6,742,931
(
2023:17,195,329 shares at a weighted average price
of 47.8p per share
)
. The shares were repurchased in
accordance with the Company’s share buyback policy to
provide liquidity in the shares and to prevent the shares
trading at a wide discount to the NAV. See Note 14 of
the financial statements for details. The Board received
authority at the Annual General meeting held on 11 July
2023 to buy back up to 14.99% of the share capital, such
authority to expire 15 months after the passing of the
resolution. Renewal of this authority will be sought at the
forthcoming AGM. The Board’s policy is to apply up to a
5% discount to buybacks of Ordinary shares.
Post-balance sheet events
A full list of post balance sheet events since 31 January
2024 can be found in Note 17 to the financial statements
on page 95.
Directors’ authority to make market
purchases of its own shares
The authority proposed under Resolution 11 is required
so that the Directors may make purchases of up to
126,461,086 Ordinary shares, representing approximately
14.99% of the Company’s issued share capital as at the
date of the notice of AGM. Any shares bought back
under this authority will be at a price determined by
the Board,
(
subject to a minimum price of 0.1p
(
being
the nominal value of such shares
)
and a maximum
price of 5% above the average mid-market quotation
for such shares on the London Stock Exchange and
the applicable regulations thereunder
)
and may be
cancelled or held in Treasury as may be determined by
the Board. The authority conferred by Resolution 10 will
expire 15 months after the passing of the Resolution or, if
earlier, the conclusion of the next AGM of the Company
unless renewed, varied or revoked by the Company
in general meeting and will be in addition to existing
authorities. This power will be exercised only if, in the
opinion of the Directors, a repurchase would be in the
best interests of shareholders as a whole.
Cancellation of share premium account
The Board considers it appropriate to obtain
shareholders’ approval for the cancellation of the
amount outstanding to the share premium account of
Apollo to create
(
subject to Court approval
)
a pool of
distributable reserves. A special resolution to this effect
is being proposed at Resolution 12.
Substantial shareholdings
As at the date of this report, no disclosures of major
shareholdings had been made to the Company under
Disclosure and Transparency Rule 5
(
Vote Holder and
Issuer Notification Rules
)
.
Independent auditor and disclosure of
information to auditor
BDO LLP is the appointed auditor of the Company and
offer themselves for re-appointment as auditor.
A Resolution to re-appoint BDO LLP as auditor and to
authorise the Directors to determine their remuneration
will be proposed at the forthcoming AGM.
Financial risk management
Apollo is exposed to the risks arising from its operational
and investment activities. Further details can be found
in the principal risks detailed on pages 35 to 38, and in
Note 16 of the financial statements.
continued
62 Octopus Apollo VCT plc — Annual report and financial statements 2024
Directors’ report
Directors’ authority to allot shares and to
disapply pre-emption rights
The authority proposed under Resolution 7 is required so
that the Directors may offer existing shareholders the
opportunity to add to their investment or to offer potential
shareholders an opportunity to invest in the Company in
a cost-efficient manner. Any consequent modest increase
in the size of the Company will, in the opinion of the
Directors, be in the interests of shareholders generally. Any
issue proceeds will be available for investment in line with
the Company’s investment policy and may be used, in
part, to purchase Ordinary shares in the market.
Resolution 7 renews the Directors’ authority to allot
Ordinary shares. Such authority would expire 15 months
after the date of the passing of the Resolution or, if
earlier, the conclusion of the next AGM of the Company,
giving the Directors authority to allot up to 30% of the
Company’s issued share capital at the date of the Notice
of AGM. This authority is in addition to existing authorities.
The Board intends to utilise this authority in respect of
the Company’s fundraising activities. Any shares allotted
under this authority would be issued at prices at or
aboveNAV.
Resolution 8 authorises the Directors to allot Ordinary
shares in connection with the Dividend Reinvestment
Scheme
(
DRIS
)
, up to 7% of the Company’s issued share
capital at the date of the Notice of AGM. Such authority
would expire 15 months after the date of the passing of the
Resolution or, if earlier, the conclusion of the next AGM of
the Company.
Resolutions 9 and 10 renew and extend the Directors’
authority to allot equity securities for cash without pre-
emption rights applying in certain circumstances. These
resolutions would authorise the Directors, until the date
falling 15 months after the date of the passing of the
Resolution or, if earlier, the conclusion of the next AGM of
the Company, to issue Ordinary shares for cash without
pre-emption rights applying by way of an offer to existing
shareholders, or re-issuing shares out of Treasury up to a
maximum of Ordinary shares
(
representing approximately
10% of the Company’s issued share capital as at the date
of this report
)
. These powers will be exercised only if, in the
opinion of the Directors, it would be in the best interests
of shareholders, as a whole. Any shares allotted under this
authority would be issued at prices at or above NAV.
Relations with shareholders
The Investment Manager will provide an update on
Apollo’s activities and future plans at the AGM to be held
on 10 July 2024. This will also provide an opportunity for
shareholders to ask questions of the Board relating to
the AGM resolutions and annual report and accounts.
The Board is also happy to respond to any written
queries made by shareholders during the course of the
year and can be contacted at 33 Holborn, London, EC1N
2HT. Alternatively, the team at Octopus is available to
answer any questions that a shareholder may have and
can be contacted on 0800 316 2295.
Consumer Duty
The Directors are aware of the Investment Manager’s
obligations to comply with the FCA’s Consumer Duty
rules and principles which came into force in 2023. Firms
subject to Consumer Duty must ensure they are acting
to deliver good outcomes for consumers and that this is
reflected in their strategies, governance, leadership, and
policies. The Investment Manager undertook a review of
its practices to identify and uplift areas of its operations
in order to comply with the Consumer Duty principles
which concluded ahead of the Consumer Duty principles
coming into force. The Company is not directly captured
by Consumer Duty, however the Directors will receive
updates from the Investment Manager in order to monitor
how the Investment Manager is meeting its obligations.
Information given in the Strategic Report
Information on dividends and likely future developments
has not been given in the Directors’ Report as equivalent
disclosure has been made in the Strategic Report.
On behalf of the Board
Murray Steele
Chair
28 May 2024
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 63
Financials
Directors’ responsibilities statement 64
Independent auditor’s report 65
Financial statements 74
Income statement 74
Balance sheet 75
Statement of changes in equity 76
Cash flow statement 78
Notes to the financial statements 80
Investment Portfolio 97
Shareholder information and contact details 99
Glossary of terms 103
Directors and advisers 104
Notice of Annual General Meeting 105
Octopus Apollo VCT plc — Annual report and financial statements 2024 63
64 Octopus Apollo VCT plc — Annual report and financial statements 2024
Directors’ responsibilities statement
The Directors are responsible for preparing the Strategic
Report, the Directors’ Report, the Directors’ Remuneration
Report and the Financial Statements in accordance with
applicable law and regulations. They are also responsible
for ensuring that the Annual Report and Accounts include
information required by the Listing Rules of the Financial
Conduct Authority.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the financial statements
in accordance with United Kingdom Generally Accepted
Accounting Practice
(
United Kingdom Accounting
Standards and applicable laws
)
including FRS 102 – “The
Financial Reporting Standard applicable in the UK and
Republic of Ireland”. 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 and profit or loss of 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 applicable UK accounting standards
have been followed, 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
Company will continue in business; and
•
prepare a Strategic Report, a Directors’ 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 make sure that the
financial statements and the Directors’ Remuneration
Report 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.
Insofar as each of the Directors is aware:
•
there is no relevant audit information of which the
Company’s auditor is unaware; and
•
the Directors have taken all steps that they ought to
have taken to make themselves aware of any relevant
audit information and to establish that the auditor is
aware of that information.
The Directors are responsible for preparing the annual
report in accordance with applicable law and regulations.
Having taken advice from the Audit and Risk Committee,
the Directors consider the annual report and the financial
statements, taken as a whole, provide the information
necessary to assess the Company’s position, performance,
business model and strategy and is fair, balanced and
understandable.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors confirm that, to the best of their knowledge:
•
the financial statements, prepared in accordance
with United Kingdom Generally Accepted Accounting
Practice, including FRS 102, give a true and fair view of
the assets, liabilities, financial position and profit or loss
of the Company; and
•
the Annual Report and Accounts
(
including the
Strategic Report
)
, give a fair review of the development
and performance of the business and the position of the
Company, together with a description of the principal
risks and uncertainties that it faces.
On behalf of the Board
Murray Steele
Chair
28 May 2024
Octopus Apollo VCT plc — Annual report and financial statements 2024 65
Independent auditor’s report
To the members of Octopus Apollo VCT plc
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 2024 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 Octopus
Apollo VCT plc
(
the ‘Company’
)
for the year ended
31January 2024 which comprise the Income Statement,
the Balance Sheet, the Statement of Changes in Equity,
the Cash Flow Statement 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
)
.
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 recommendation of the Audit Committee,
we were appointed by the Board of Directors on 12July
2018 to audit the financial statements for the year ended
31January 2019 and subsequent financial periods. The
period of total uninterrupted engagement is six years,
covering the years ended 31 January 2019 to 31January
2024. 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 prepared by
management’s expert during the year and as at year
end and reviewing the calculations therein to check that
the Company was meeting its requirements to retain
VCT status;
•
consideration of the Company’s expected future
compliance with VCT legislation, the absence of bank
debt as well as contingencies and commitments;
•
reviewing the forecasted cash flows that support the
Directors’ assessment of going concern, challenging
assumptions and judgements made in the forecasts,
and assessing them for reasonableness. In particular, we
considered the available cash resources relative to the
forecast expenditure which was assessed against the
prior year for reasonableness; and
•
evaluating the Directors’ method of assessing the going
concern in light of market conditions.
66 Octopus Apollo VCT plc — Annual report and financial statements 2024
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the Company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In relation to the Company’s reporting on how it has applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the
Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern
are described in the relevant sections of this report.
Overview
2024 2023
Key audit matters Valuation of Unquoted
Investments
Materiality Company financial statements as a whole
£7,800,000
(
2023: £6,900,000
)
based on 2%
(
2023: 2%
)
of net
assets adjusted for significant uninvested cash arising from
fundraising in the year.
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 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.
These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Octopus Apollo VCT plc — Annual report and financial statements 2024 67
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of unquoted
investments
(
Note 10 to the financial
statements
)
We consider the valuation
of unquoted investments to
be the most significant audit
area as there is a high level of
estimation uncertainty involved
in determining the unquoted
investment valuations.
There is an inherent risk of
management override arising
from the unquoted investment
valuations being prepared by
the Investment Manager, who is
remunerated based on the value
of the net assets of the fund, as
shown in Note 3.
We assessed the design and implementation of controls relating to the valuation of unquoted investments. This included
obtaining an understanding of the sources of key inputs, judgements and significant estimates used as well as the
oversight and governance structures in relation to the valuation process.
Our sample for the testing of unquoted investments was stratified according to risk considering, inter alia, the value of
individual investments, the nature of the investment and the subjectivity of the valuation technique.
For all unquoted investments in our sample we:
Challenged whether the valuation methodology was the most appropriate in the circumstances under the International
Private Equity and Venture Capital Valuation
(
IPEV
)
Guidelines and the applicable accounting standards. We have
recalculated the value attributable to the Company, having regard to the application of enterprise value across the
capital structures of the investee companies.
For investments sampled that were valued using less subjective valuation techniques
(
external offers and price of recent
investment reviewed for indicators of changes in fair value since the funding round
)
we:
•
verified the cost or price of recent investment to supporting documentation;
•
considered whether the investment was an arm’s length transaction through reviewing the parties involved in the
transaction and checking whether or not they were already investors of the investee Company;
•
considered whether there were any indications that the cost or price of recent investment was no longer
representative of fair value considering, inter alia, the current performance of the investee company and the
milestones and assumptions set out in the investment proposal; and
•
considered whether the price of recent investment is supported by alternative valuation techniques.
68 Octopus Apollo VCT plc — Annual report and financial statements 2024
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of
unquoted investments
(
continued
)
(
Note 10 to the financial
statements
)
(
continued
)
For investments sampled that were valued using more subjective techniques
(
revenue multiples and scenario analysis
)
we:
•
challenged and corroborated the inputs to the valuation with reference to management information of investee
companies, market data and our own understanding and assessed the impact of the estimation uncertainty
concerning these assumptions and the disclosure of these uncertainties in the financial statements;
•
reviewed the historical financial statements and any recent management information available to support
assumptions about maintainable revenues or cash flows used in the valuations;
•
considered the revenue multiples applied and the discounts applied by reference to observable listed company
market data; and
•
challenged the consistency and appropriateness of adjustments made to such market data in establishing
the revenue multiples and cash flow applied in arriving at the valuations adopted by considering the individual
performance of investee companies against plan and relative to the peer group, the market and sector in which the
investee company operates and other factors as appropriate.
Where appropriate, we performed a sensitivity analysis by developing our own point estimate where we considered
that alternative input assumptions could reasonably have been applied and we considered the overall impact of such
sensitivities on the portfolio of investments in determining whether the valuations as a whole are reasonable and free
from bias.
Key observations
Based on the procedures performed we consider the investment valuations to be appropriate considering the level of
estimation uncertainty.
Octopus Apollo VCT plc — Annual report and financial statements 2024 69
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
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.
Based on our professional judgement, we determined materiality for the financial
statements as a whole and performance materiality as follows:
Company Financial statements
2024 2023
Materiality £ 7,800,000 £6,900,000
Basis for determining materiality 2% of adjusted net assets
Rationale for the benchmark applied In setting materiality, we have had regard to the nature and disposition of the investment portfolio. Given that the VCT’s
portfolio is comprised of unquoted investments which would typically have a spread of reasonable alternative possible
valuations, we have applied a percentage of 2% of net assets adjusted for significant fundraising in the year.
Performance materiality £ 5,800,000 £5,100,000
Basis for determining performance materiality 75% of materiality
Rationale for the percentage applied for
performance materiality
The level of 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 transactions in the year.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit
differences in excess of £390,000
(
2023: £300,000
)
. 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 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
70 Octopus Apollo VCT plc — Annual report and financial statements 2024
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
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.
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 identified set
out on page 45; and
•
the Directors’ explanation as to their assessment of the
Company’s prospects, the period this assessment covers
and why the period is appropriate set out on page 45.
Other Code provisions
•
Directors’ statement on fair, balanced and
understandable set out on page 59;
•
Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on pages 35-38;
•
the section of the Annual Report that describes the
review of effectiveness of risk management and internal
control systems set out on page 53; and
•
the section describing the work of the Audit Committee
set out on pages 51-53.
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.
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.
Corporate governance statement
In our opinion, based on the work undertaken in the
course of the audit the information about internal control
and risk management systems in relation to financial
reporting processes and about share capital structures,
given in compliance with rules 7.2.5 and 7.2.6 in the
Disclosure Guidance and Transparency Rules sourcebook
made by the Financial Conduct Authority
(
the FCA
Rules
)
, is consistent with the financial statements and
has been prepared in accordance with applicable legal
requirements.
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 this information.
In our opinion, based on the work undertaken in the
course of the audit information about the Company’s
Octopus Apollo VCT plc — Annual report and financial statements 2024 71
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
corporate governance code and practices and about its
administrative, management and supervisory bodies and
their committees complies with rules 7.2.2, 7.2.3 and 7.2.7
of the FCA Rules.
We have nothing to report arising from our responsibility to
report if a corporate governance statement has not been
prepared by the Company.
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, 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.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the
preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to
enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern
basis of accounting unless the Directors either intend to
liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance
with ISAs
(
UK
)
will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
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:
Non-compliance with laws and regulations
We gained an understanding of the Company and the
industry in which it operates and held discussions with the
Investment Manager and those charged with governance
in order to obtain an understanding of the Company’s
policies and procedures regarding compliance with
laws and regulations. We have therefore considered the
significant laws and regulations to be the Companies
Act 2006, the FCA listing and DTR rules, the principles of
the UK Corporate Governance Code, industry practice
represented by the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies
and Venture Capital Trusts
(
the ‘SORP’
)
and updated in
2022 with consequential amendments and the applicable
financial reporting framework. We also considered the
Company’s qualification as a VCT under UK tax legislation.
Our procedures in respect of the above included:
•
obtaining an understanding of the control environment
in monitoring compliance with laws and regulations;
•
agreement of the financial statement disclosures to
underlying supporting documentation;
•
enquiries of the Investment Manager and those charged
with governance relating to the existence of any non-
compliance with laws and regulations;
72 Octopus Apollo VCT plc — Annual report and financial statements 2024
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
•
obtaining the VCT compliance reports prepared by
management’s expert 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; and
•
reviewing minutes of meeting of those charged with
governance and a sample of legal invoices throughout
the period for instances of non-compliance with laws
and regulations.
Fraud
We assessed the susceptibility of the financial statement to
material misstatement including fraud.
Our risk assessment procedures included:
•
enquiry with the Investment Manager and those
charged with governance regarding any known or
suspected instances of fraud;
•
review of minutes of meeting of those charged with
governance for any known or suspected instances of
fraud;
•
discussion amongst the engagement team as to
how and where fraud might occur in the financial
statements; and
•
considering management fees and performance targets
and the related financial statement areas impacted by
these.
Based on our risk assessment, we considered the areas
most susceptible to be valuation of unquoted investments
and management override of controls.
Our procedures in respect of the above included:
•
in addressing the risk of valuation of unquoted
investments, the procedures set out in the Key Audit
Matter section in our report were performed;
•
in addressing the risk of management override of
control, we:
•
considered the opportunity and incentive to
manipulate accounting entries and target tested
relevant adjustments made in the period end
financial reporting process;
•
reviewed for significant transactions outside the
normal course of business;
•
reviewed the significant judgements made in the
unquoted investment valuations and considering
whether the valuation methodology is the most
appropriate;
•
considered any indicators of bias in our audit as a
whole; and
•
performed a review of unadjusted audit differences,
if any, for indications of bias or deliberate
misstatement.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members, who were deemed to have the
appropriate competence and capabilities 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.
Octopus Apollo VCT plc — Annual report and financial statements 2024 73
Independent auditor’s report
To the members of Octopus Apollo VCT plc
continued
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.
Elizabeth Hooper
(
Senior Statutory Auditor
)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
28 May 2024
BDO LLP is a limited liability partnership registered in
England and Wales
(
with registered number OC305127
)
.
74 Octopus Apollo VCT plc — Annual report and financial statements 2024
Income statement
Year ended 31 January 2024 Year ended 31 January 2023
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Realised
(
loss
)
/gain on disposal of fixed asset investments 10 –
(
876
)
(
876
)
– 525 525
Change in fair value of fixed asset investments
10 – 7,633 7,633 – 49,921 49,921
Change in fair value of current asset investments – 16 16 –
(
800
) (
800
)
Investment income 2 4,260 – 4,260 2,257 11 2,268
Investment management fees 3
(
1,862
)
(
5,601
)
(
7,463
)
(
1,437
) (
13,512
) (
14,949
)
Other expenses 4
(
4,006
)
–
(
4,006
)
(
2,431
)
–
(
2,431
)
Foreign currency translation 1 – 1 7 – 7
(
Loss
)
/profit before tax
(
1,607
)
1,172
(
435
)
(
1,604
)
36,145 34,541
Tax 6 – – – – – –
(
Loss
)
/profit after tax
(
1,607
)
1,172
(
435
)
(
1,604
)
36,145 34,541
(
Loss
)
/earnings per share – basic and diluted 8
(
0.2p
)
0.1p
(
0.1p
)
(
0.3p
)
6.3p 6.0p
• The ‘Total’ column of this statement is the profit and loss account of Apollo; the revenue return and capital return columns have been prepared under guidance published by the Association of Investment
Companies.
• All revenue and capital items in the above statement derive from continuing operations.
• Apollo has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.
Apollo has no other comprehensive income for the period.
The accompanying notes are an integral part of the financial statements.
Octopus Apollo VCT plc — Annual report and financial statements 2024 75
As at 31 January 2024 As at 31 January 2023
Notes £’000 £’000 £’000 £’000
Fixed asset investments 10 328,370 306,930
Current assets:
Investments 11 8,486 3,970
Money market funds 11 47,950 40,360
Debtors 12 3,752 4,866
Cash at bank 4,868 4,990
Applications cash 8,852 9,261
Total current assets 73,908 63,447
Current liabilities 13
(
11,984
)
(
20,884
)
Net current assets 61,924 42,563
Net assets 390,294 349,493
Share capital 14 773 657
Share premium 27,476 78,440
Special distributable reserve 266,132 174,061
Capital redemption reserve 172 159
Capital reserve realised
(
15,275
)
(
20,136
)
Capital reserve unrealised 115,343 119,032
Revenue reserve
(
4,327
)
(
2,720
)
Total shareholders' funds 390,294 349,493
Net asset value per share – basic and diluted 9 50.5p 53.2p
The statements were approved by the Directors and authorised for issue on 28 May 2024 and are signed on their behalf by:
Murray Steele
Chair
Company number: 05840377
The accompanying notes are an integral part of the financial statements.
Balance sheet
76 Octopus Apollo VCT plc — Annual report and financial statements 2024
Statement of changes in equity
Share capital
£’000
Share
premium
£’000
Special
distributable
reserves
*
£’000
Capital
redemption
reserve
£’000
Capital
reserve
realised
*
£’000
Capital
reserve
unrealised
£’000
Revenue
reserve
*
£’000
Total
£’000
As at 1 February 2023 657 78,440 174,061 159
(
20,136
)
119,032
(
2,720
)
349,493
Total comprehensive loss for the year – – – –
(
6,477
)
7,6 49
(
1,607
) (
435
)
Total contributions by and distributions to owners:
Repurchase and cancellation of own shares
(
13
)
–
(
6,743
)
13 – – –
(
6,743
)
Issue of shares 129 70,927 – – – – – 71,056
Share issue cost –
(
3,912
)
– – – –
(
3,912
)
Dividends paid – –
(
19,165
)
– – – –
(
19,165
)
Total contributions by and distributions to owners: 116 67,015
(
25,908
)
13 – – – 41,236
Other movements:
Prior year fixed asset gains now realised – – – – 11,338
(
11,338
)
– –
Cancellation of Share Premium –
(
117,979
)
117,979 – – – – –
Total other movements –
(
117,979
)
117,979 – 11,338
(
11,338
)
– –
Balance as at 31 January 2024 773 27,476 266,132 172
(
15,275
)
115,343
(
4,327
)
390,294
*Included in these reserves is an amount of £246,530,000
(
2023: £151,204,000
)
which is considered distributable to shareholders per the Companies Act.
The accompanying notes are an integral part of the financial statements.
Octopus Apollo VCT plc — Annual report and financial statements 2024 77
Share capital
£’000
Share
premium
£’000
Special
distributable
reserves
*
£’000
Capital
redemption
reserve
£’000
Capital
reserve
realised
*
£’000
Capital
reserve
unrealised
£’000
Revenue
reserve
*
£’000
Total
£’000
As at 1 February 2022 52,365 81,600 58,918 8,441
(
5,197
)
68,079
(
1,247
)
262,959
Total comprehensive income for the year – – – –
(
12,976
)
49,121
(
1,604
)
34,541
Total contributions by and distributions to owners:
Repurchase and cancellation of own shares
(
17
)
–
(
8,220
)
17 – – –
(
8,220
)
Issue of shares 151 78,876 – – – – – 79,027
Share issue cost –
(
4,491
)
– – – – –
(
4,491
)
Dividends paid – –
(
14,323
)
– – – –
(
14,323
)
Total contributions by and distributions to owners: 134 74,385
(
22,543
)
17 – – – 51,993
Other movements:
Prior year fixed asset losses now realised – – – –
(
1,963
)
1,963 – –
Cancellation of Share Premium –
(
7 7,545
)
7 7,545 – – – – –
Cancellation of Capital Redemption Reserve – – 8,299
(
8,299
)
– – – –
Share capital nominal value reduction
(
51,842
)
– 51,842 – – – – –
Transfer between reserves – – – – –
(
131
)
131 –
Total other movements
(
51,842
) (
7 7,545
)
137,686
(
8,299
) (
1,963
)
1,832 131 –
Balance as at 31 January 2023 657 78,440 174,061 159
(
20,136
)
119,032
(
2,720
)
349,493
*Included in these reserves is an amount of £151,204,000
(
2022: £52,474,000
)
which is considered distributable to shareholders per the Companies Act.
The accompanying notes are an integral part of the financial statements.
Statement of changes in equity
continued
78 Octopus Apollo VCT plc — Annual report and financial statements 2024
Notes
Year to
31 January 2024
£’000
Year to
31 January 2023
£’000
Cash flows from operating activities
(
Loss
)
/ profit before tax
(
435
)
34,541
Adjustments for:
Decrease/
(
increase
)
in debtors 12 1,114
(
977
)
(
Decrease
)
/increase in creditors 13
(
8,490
)
776
Loss/
(
gain
)
on disposal of fixed asset investments 10 876
(
525
)
Gain on valuation of fixed asset investments 10
(
7,633
)
(
49,921
)
(
Gain
)
/ loss on valuation of current asset investments
(
17
)
800
In-specie dividends 2 –
(
11
)
Net cash utilised in operating activities
(
14,585
) (
15,317
)
Cash flows from investing activities
Purchase of fixed asset investments 10
(
32,975
) (
69,393
)
Proceeds on sale of fixed asset investments 10 18,292 3,591
Purchase of current asset investments
(
4,499
)
–
Transfer of current asset investments* – 16,659
Net cash utilised in investing activities
(
19,182
) (
49,143
)
Cash flow statement
Octopus Apollo VCT plc — Annual report and financial statements 2024 79
Notes
Year to
31 January 2024
£’000
Year to
31 January 2023
£’000
Cash flows from financing activities
Movement in applications account 13
(
409
)
8,746
Purchase of own shares 14
(
6,743
)
(
8,220
)
Proceeds from share issues 14 66,543 75,662
Cost of share issues 14
(
3,912
)
(
4,491
)
Dividends paid
(
net of DRIS
)
7
(
14,653
)
(
10,958
)
Net cash generated from financing activities 40,826 60,739
Increase/
(
Decrease
)
in cash and cash equivalents 7,059
(
3,721
)
Opening cash and cash equivalents 54,611 58,332
Closing cash and cash equivalents 61,670 54,611
Cash and cash equivalents comprise
Cash at bank 4,868 4,990
Applications cash 8,852 9,261
Money market funds 47,950 40,360
Closing cash and cash equivalents 61,670 54,611
* During the year ended 31 January 2023 Octopus Portfolio Manager
(
OPM
)
began the process of being closed down. The only investment remaining is in a BlackRock MMF. The classification of this asset was
therefore transferred from an OEIC to a MMF within the accounts and is therefore classified as a cash equivalent. See Note 11 for further details.
The accompanying notes are an integral part of the financial statements.
Cash flow statement
continued
80 Octopus Apollo VCT plc — Annual report and financial statements 2024
1. Significant accounting policies
Apollo is a Public Limited Company
(
plc
)
incorporated in
England and Wales and its registered office is 33 Holborn,
London, EC1N 2HT.
Apollo’s principal activity is to invest in a diverse portfolio
of predominantly unquoted companies with the aim of
providing shareholders with attractive tax-free dividends
and long-term capital growth.
Basis of preparation
The financial statements have been prepared under the
historical cost convention, except for the measurement
at fair value of certain financial instruments, and in
accordance with UK Generally Accepted Accounting
Practice
(
GAAP
)
, including Financial Reporting Standard
102 – ‘The Financial Reporting Standard applicable in
the United Kingdom and Republic of Ireland’
(
FRS 102
)
,
and with the Companies Act 2006 and the Statement of
Recommended Practice
(
SORP
)
‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts
(
issued 2014 and updated in April 2021 with consequential
amendments
)
’.
The significant accounting policies have remained
unchanged since those set out in Apollo’s 2023 Annual
Report and Accounts. A summary of the significant
accounting policies is set out below.
FRS 102 sections 11 and 12 have been adopted with regard
to Apollo’s financial instruments. Apollo held all fixed
asset investments at fair value through profit or loss
(
FVTPL
)
; therefore all gains and losses arising from such
investments held are attributable to financial assets held
at FVTPL. Accordingly, all interest income, fee income,
expenses and gains and losses on investments are
attributable to assets held at FVTPL.
Going concern
After reviewing Apollo’s forecasts and expectations, the
Directors have a reasonable expectation that Apollo has
adequate resources to continue in operational existence
for the foreseeable future. The annual expenses of Apollo
are around £11.5 million and Apollo had £52.8 million in
cash and MMFs at the year end. Therefore if there was
a serious downturn, Apollo could continue by choosing
to retain cash in order to pay these expenses as they fall
due. The ability to retain cash is largely in our control as
we can shift investment strategy to make sure we have
a sufficient cash buffer, subject to VCT rules. Apollo
therefore continues to adopt the going concern basis in
preparing its financial statements. See Director’s Report
on page 59 to 62 for further details.
Key judgements and estimates
The preparation of the financial statements requires the
Board to make judgements and estimates that affect
the application of policies and reported amounts of
assets, liabilities, income and expenses. Estimates and
assumptions applied mainly relate to the fair valuation
of the unquoted fixed asset investments. Estimates are
based on historical experience and other assumptions
that are considered reasonable under the circumstances.
The estimates and the assumptions applied are under
continuous review with particular attention paid to the
carrying value of the investments.
Investment valuation policies are important to the
depiction of Apollo’s financial position and require the
application of subjective and complex judgements,
notably with regards to unquoted holdings, often as
aresult of the need to make estimates about the effects
of matters that are inherently uncertain and may change
in subsequent periods. The main accounting and valuation
policies used by Apollo are disclosed below.
Investments are regularly reviewed to make sure that
the fair values are appropriately stated. Unquoted
investments are valued in accordance with current
IPEV guidelines, although this does rely on subjective
estimates such as appropriate sector revenue multiples,
forecast results of portfolio companies, asset values of
the subsidiary companies of portfolio companies and
liquidity or marketability of the investments held. Quoted
investments are valued at the closing bid price on the
year-end date.
Although Apollo believes that the assumptions concerning
the business environment and estimates of future
cash flows are appropriate, changes in estimates and
assumptions could require changes in the stated values.
This could lead to additional changes in fair value in the
future
(
see Note 10
)
.
Revenue and capital
Apollo presents its Income Statement in a three column
format to give shareholders additional details of the
performance of Apollo, split between items of a revenue or
capital nature as required by the SORP.
Notes to the financial statements
Octopus Apollo VCT plc — Annual report and financial statements 2024 81
1. Significant accounting policies
(
continued
)
The revenue column of the Income Statement includes
revenue income and revenue expenses of Apollo.
The capital column includes changes in fair value of
investments, as well as gains and losses on disposal and
any capital dividends received. Gains and losses arising
from changes in fair value of investments are recognised
as part of the capital return within the Income Statement.
Investment Management fees are split between the
revenue
(
25%
)
and capital
(
75%
)
in the same way that the
income streams are derived.
Cash and liquid resources
Cash, for the purposes of the cash flow statement,
comprises cash at bank and cash held in MMFs. Cash
equivalents are current asset investments which are
disposable without curtailing or disrupting the business
and are either readily convertible into known amounts of
cash at or close to their carrying values or traded in an
active market. This comprises investments in OEICs and
MMFs subject to insignificant changes in fair value.
Financing strategy and capital structure
We define capital as shareholders’ funds and our financial
strategy in the medium term is to manage a level of cash
that balances the risks of the business with optimising the
return on equity. Apollo currently has no borrowings nor
does it anticipate that it will have any borrowing facilities
in the future to fund the acquisition of investments.
Apollo does not have any externally imposed capital
requirements.
The Board considers the distributable reserves and
the total return for the year when recommending a
dividend. In addition, the Board is authorised to make
market purchases up to a maximum of 14.99% of the
issued Ordinary share capital in accordance with Special
Resolution 11 in order to maintain sufficient liquidity in
Apollo’s shares.
Reserves
Share capital: represents the nominal value of shares
that have been issued.
Share premium: includes any premiums received on issue
of share capital. Any transaction costs associated with the
issuing of shares are deducted from share premium.
Special distributable reserves: includes cancelled share
premium available for distribution.
Capital redemption reserve: includes nominal share
capital which has been bought back by Apollo for
cancellation and cannot be distributed to shareholders.
Capital reserve realised: when an investment is sold, any
balance held in Capital reserve unrealised is transferred
to Capital reserve realised on disposal, as a movement in
reserves. The portion of the management fee allocated
to capital expenditure is also included in this reserve.
Thisreserve is available for distribution.
Capital reserve unrealised: when Apollo revalues the
investments still held during the period, any gains or losses
arising are credited/charged to Capital reserve unrealised.
Revenue reserve: includes all net revenue profits and
losses of Apollo.
Functional and presentational currency
The financial statements are presented in Sterling
(
£
)
.
Thefunctional currency is also Sterling
(
£
)
.
Notes to the financial statements
continued
82 Octopus Apollo VCT plc — Annual report and financial statements 2024
2. Investment income
Accounting policy
Fixed returns on non-equity shares and debt securities are recognised on a time
apportionment basis
(
including time amortisation of any premium or discount to
redemption
)
, so as to reflect the effective interest rate, provided it is considered probable
that payment will be received in due course. Income from fixed-interest securities and
deposit interest is accounted for on an effective interest rate method. Investment income
includes interest earned on MMFs. Dividend income is shown net of any related taxcredit.
Dividends receivable are brought into account when Apollo’s right to receive payment
is established and it is probable that payment will be received. Fixed returns on debt
are recognised provided it is probable that payment will be received in due course. The
nature of dividends received is assessed to establish whether they are revenue or income
dividends.
Disclosure
31 January 2024
£’000
31 January 2023
£’000
Loan note interest receivable 1,683 1,600
Dividends receivable 576 354
MMF interest income 2,001 303
In-specie dividend – 11
4,260 2,268
3. Investment management fees
31 January 2024 31 January 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment
management
fee
1,862 5,587 7,449 1,437 4,311 5,748
Investment
performance
fee
– 14 14 – 9,201 9,201
1,862 5,601 7,463 1,437 13,512 14,949
For the purpose of the revenue and capital columns in the Income Statement, the
management fee has been allocated 25% to revenue and 75% to capital, in line with
the Board’s expected long-term split of returns in the form of income and capital gains
respectively from Apollo’s investment portfolio. The investment performance fee,
explained below, is allocated 100% to capital as it is deemed that capital appreciation
on investments has primarily driven the total return of Apollo above the required hurdle
rate at which the performance fee is payable. The management fee, administration
and accountancy fees are calculated based on the NAV which is then multiplied by the
number of shares in issue, calculated on a daily basis.
Octopus provide investment management, accounting and administration services and
company secretarial services to Apollo under a management agreement which may be
terminated at any time thereafter by not less than twelve months’ notice given by either
party. No compensation is payable in the event of terminating the agreement by either
party, if the required notice period is given. The fee payable, should insufficient notice
be given, will be equal to the fee that would have been paid should continuous service
be provided. The basis upon which the management fee is calculated is disclosed within
Note19 to the financial statements.
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 83
3. Investment management fees
(
continued
)
Apollo has established a performance incentive scheme whereby the Investment Manager
is entitled to an annual performance related incentive fee in the event that certain
performance criteria are met. Further details of this scheme are disclosed within Note 19
to the financial statements. As at 31 January 2024 £14,000 was due to the Investment
Manager by way of annual performance fee
(
2023: £9,201,000
)
.
4. Other expenses
Accounting policy
All expenses are accounted for on an accruals basis. Expenses are charged wholly to
revenue, apart from management fees charged 75% to capital and 25% to revenue,
performance fees charged wholly to capital and transaction costs. Transaction costs
incurred when purchasing or selling assets are written off to the Income Statement in
theperiod that they occur.
Disclosure
31 January 2024
£’000
31 January 2023
£’000
Audit fees 85 73
Accounting and administration services 1,117 862
Legal fees 12 33
Registrars' fees 106 127
Ongoing trail commission 1,011 767
Directors’ fees 140 135
Other administration expenses 582 434
Bad debt provision 953 –
4,006 2,431
The ongoing charges ratio of Apollo for the year to 31 January 2024 was 2.4%
(
2023:
2.5%
)
. Total annual running costs are capped at 2.75% of average net assets
(
2023 cap:
3.3% of average net assets
)
. This figure excludes any extraordinary items, adviser charges,
impairment of interest and performance fees.
No non-audit services were provided by Apollo’s auditor.
5. Directors’ remuneration
Total Directors’ fees paid during the year were £140,000
(
2023: £135,000
)
. This excludes
Employer’s National Insurance contributions of £14,000
(
2023: £14,000
)
which have been
included within other administration expenses. The highest paid director received £40,000
(
2023: £40,000
)
. None of the Directors received any other remuneration or benefit from
Apollo during the year. Apollo has no employees other than Non-Executive Directors. The
average number of Non-Executive Directors in the year was four
(
2023: four
)
, with Gillian
Elcock being appointed on 1 December 2023.
6. Tax
Accounting policy
Current tax is recognised for the amount of income tax payable in respect of the taxable
profit/
(
loss
)
for the current or past reporting periods using the current UK corporation tax
rate. The tax effect of different items of income/gain and expenditure/loss is allocated
between capital and revenue return on the “marginal” basis as recommended in the SORP.
Deferred tax is recognised in respect of all timing differences at the reporting date. Timing
differences are differences between taxable profits and total comprehensive income as
stated in the financial statements that arise from the inclusion of income and expenses in
tax assessments in periods different from those in which they are recognised in financial
statements.
Deferred tax assets are only recognised to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other future taxable profits.
Notes to the financial statements
continued
84 Octopus Apollo VCT plc — Annual report and financial statements 2024
6. Tax
(
continued
)
Disclosure
31 January 2024 31 January 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
(
Loss
)
/profit
before tax
(
1,607
)
1,172
(
435
) (
1,604
)
36,145 34,541
Tax at 24%
(
2023: 19%
)
(
386
)
282
(
104
) (
305
)
6,867 6,562
Effects of:
Non-taxable
dividend
income
(
16
)
–
(
16
) (
67
) (
2
) (
69
)
Non-taxable
capital gains
on valuations
and disposals
–
(
1,628
) (
1,628
)
–
(
9,432
) (
9,432
)
Expenses not
deductible for
tax purposes
– 14 14 – 7 7
Excess
management
expenses on
which deferred
tax not
recognised
402 1,332 1,734 372 2,560 2,932
Total tax
charge
– – – – – –
Approved VCTs are exempt from tax on chargeable gains. Since the Directors intend that
Apollo will continue to conduct its affairs so as to maintain its approval as a VCT, no deferred
tax has been provided in respect of any capital gains or losses arising on the revaluation or
disposal of investments. On 1 April 2023, the main rate of Corporation Tax was increased to
25%. Unrelieved tax losses of £50,101,000
(
2023: £42,887,000
)
are estimated to be carried
forward at 31 January 2024
(
subject to completion of Apollo’s tax return
)
and are available
for offset against future taxable income, subject to agreement with HMRC. Apollo has not
recognised the deferred tax asset of £12,525,000
(
2023: £10,722,000
)
in respect of these tax
losses because there is insufficient forecast taxable income in excess of deductible expenses
to utilise these losses carried forward. There is no expiry period on these deductible expenses
under the UK HMRC legislation.
7. Dividends
Accounting policy
Dividends payable are recognised as distributions in the financial statements when
Apollo’s liability to make payment has been established. This liability is established on the
record date, the date on which those shareholders on the share register are entitled to the
dividend. Interim dividends to equity shareholders are declared by the Directors.
Disclosure
31 January 2024
£’000
31 January 2023
£’000
Dividends paid in the year
Second interim dividend: 1.3p per
share paid 28 April 2023
(
2023: 1.3p
per share
)
in respect of prior year
8,739 6,771
Interim dividend: 1.4p per share paid
14 December 2023
(
2023: 1.3p
)
in
respect of the current year
10,426 7,552
19,165 14,323
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 85
7. Dividends
(
continued
)
31 January 2024
£’000
31 January 2023
£’000
Dividends in respect of the year
Interim dividend: 1.4p per share paid
14 December 2023
(
2023: 1.3p
)
10,426 7,552
Second interim dividend:
1.3p paid 2 May 2024
(
2023: 1.3p per share
)
10,901 8,739
21,327 16,291
8. Earnings per share
31 January 2024 31 January 2023
Revenue Capital Total Revenue Capital Total
Loss/profit
attributable
to ordinary
shareholders
(
£’000
)
(
1,607
)
1,172
(
435
) (
1,604
)
36,145 34,541
Earnings per
ordinary share
(
p
)
(
0.2p
)
0.1p
(
0.1p
) (
0.3p
)
6.3p 6.0p
The
(
loss
)
/earnings per share is based on 709,769,066 Ordinary shares
(
2023: 572,765,083
)
,
being the weighted average of shares in issue during the year.
There are no potentially dilutive capital instruments in issue and, as such, the basic and
diluted earnings per share are identical.
9. Net asset value per share
31 January 2024
Ordinary shares
31 January 2023
Ordinary shares
Net assets
(
£
)
390,294,000 349,493,000
Shares in issue 772,743,612 657,239,253
Net asset value per share
(
p
)
50.5 53.2
There are no potentially dilutive capital instruments in issue and, as such, the basic and
diluted NAV per share are identical.
10. Fixed asset investments at fair value through profit or loss
Accounting policy
Apollo’s principal financial assets are its investments and the policies in relation to those
assets are set out below. Purchases and sales of investments are recognised in the
financial statements at the date of the transaction
(
trade date
)
.
Notes to the financial statements
continued
86 Octopus Apollo VCT plc — Annual report and financial statements 2024
10. Fixed asset investments at fair value through profit or loss
(
continued
)
These investments will be managed and their performance evaluated on a fair value basis
in accordance with a documented investment strategy and information about them is
provided internally on that basis to the Board. Accordingly, as permitted by FRS 102, the
investments are measured as being at fair value through profit or loss
(
FVTPL
)
on the basis
that they qualify as a group of assets managed, and whose performance is evaluated, on
a fair value basis in accordance with a documented valuation policy. Apollo’s investments
are measured at subsequent reporting dates at fair value.
In the case of unquoted investments, fair value is established by assessing different
methods of valuation, such as price of recent transaction, earnings or revenue-based
multiples, discounted cash flows and net assets. This is consistent with current IPEV
guidelines. Where price of a recent transaction is used, the valuation is corroborated using
another valuation methodology.
Gains and losses arising from changes in fair value of investments are recognised as part
of the capital return within the Income Statement and allocated to the capital reserve
unrealised. Fair value movements arising from fixed returns on non-equity shares are
disclosed as holding gains within the capital column of the Income Statement. Interest
income receivable arising from debt securities are disclosed as interest income within the
revenue column of the Income Statement.
Investments deemed to be associates due to the shareholding and level of influence
exerted over the portfolio company are measured at fair value using a consistent
methodology to the rest of Apollo’s portfolio as permitted by FRS 102 and highlighted in
the SORP
(
paragraph 32
)
.
In preparation of the valuations of assets the Directors are required to make judgements
and estimates that are reasonable and incorporate their knowledge of the performance of
the portfolio companies.
Fair value hierarchy
Paragraph 34.22 of FRS 102 recognises a hierarchy of fair value measurements for
financial instruments measured at fair value in the Balance Sheet, which gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities
(
Level 1
)
and the lowest priority to unobservable inputs
(
Level 3
)
. This methodology is
adopted by Apollo and requires disclosure of financial instruments to be dependent on the
lowest significant applicable input, as laid out below:
Level 1: The unadjusted, fully accessible and current quoted price in an active market
for identical assets or liabilities that an entity can access at the measurement date.
TheCompany’s quoted investments are included in Level 1.
Level 2: Inputs for similar assets or liabilities other than the quoted prices included in
Level 1 that are directly or indirectly observable, which exist for the duration of the period
of investment. Apollo holds no such investments in the current or prior year.
Level 3: This is where inputs are unobservable, where no active market is available and
recent transactions for identical instruments do not provide a good estimate of fair value
for the asset or liability. Apollo’s unquoted investments are included in Level 3 in the
current and prior year.
There have been no transfers between these classifications in the year
(
2023: none
)
.
Thechange in fair value for the current and previous year is recognised through the
income statement.
All items held at fair value through profit or loss were designated as such upon initial
recognition. Movements in investments at fair value through profit or loss during the year
to 31 January 2024 are summarised below in and in Note 11.
The most critical estimates, assumptions and judgements relate to the determination
of the carrying value of investments at ‘fair value through profit and loss’
(
FVTPL
)
.
Allinvestments held by Apollo are classified as FVTPL and measured in accordance
with the International Private Equity and Venture Capital Valuation
(
IPEV
)
guidelines,
as updated in December 2022. For investments actively traded on organised financial
markets, fair value is generally determined by reference to Stock Exchange market quoted
bid prices at the close of business on the balance sheet date.
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 87
10. Fixed asset investments at fair value through profit or loss
(
continued
)
Unquoted investments are stated at fair value by the Directors at each measurement
date in accordance with appropriate valuation techniques, which are consistent with the
IPEVguidelines:
(
i
)
Each investment is considered as a whole on a ‘unit of account’ basis, i.e. that the
value of each portfolio company is considered as a whole, alongside consideration of:
The price of a recent investment
(
PRI
)
, if resulting from an orderly transaction,
isassumed to represent fair value as of the transaction date. At every subsequent
measurement date, the PRI may remain an appropriate indicator of fair value,
however, as its validity is eroded over time, adequate consideration will be given to the
current facts and circumstances, including, but not limited to, changes in the market
or changes in the performance of the portfolio company. We may solely rely on
PRIfor certain investments where other valuation methodologies may not be possible,
notably where there are no current or short-term future revenues expected.
Where a recent transaction is not deemed to be representative of fair value,
amarket approach may be considered. This technique involves the application of
anappropriate multiple to a performance measure
(
typically revenue, but potentially
also EBITDA
)
in order to derive the value of the business. Appropriate multiples will
usually be derived by reference to a current market-based multiple, as reflected
in market valuations of comparable quoted companies or the price at which
comparable companies have changed ownership, to the extent this information is
publicly available; or by calibrating the multiple implied by the PRI with reference to
the movement in market inputs between the investment date and each subsequent
reporting date. This approach will notably help capture any risks associated with
a lack of liquidity in the minority holding of an unquoted investment and may be
further adjusted to reflect the trading performance of the portfolio company versus
expectations as at the investment.
(
ii
)
Premiums, to the extent that they are considered capital in nature, and that they will
be received upon repayment of loan stock investments, are accrued at fair value when
Apollo receives the right to the premium and when considered recoverable.
(
iii
)
Where a number of discreet outcomes can be expected for an investment, a simplified
probability-weighted expected return model may be used to determine fair value.
(
iv
)
Where appropriate, an income approach may be used.
Capital gains and losses on investments, whether realised or unrealised, are dealt with in
the profit and loss and revaluation reserves and movements in the period are shown in the
Income Statement. All figures are shown net of any applicable transaction costs incurred
by Apollo. All investments are initially recognised and subsequently measured at fair value.
Changes in fair value are recognised in the Income Statement.
A key judgement made in applying the above accounting policy relates to investments
that are permanently impaired. Where the value of an investment has fallen permanently
below the price of recent investment, the loss is treated as a permanent impairment and
as a realised loss, even though the investment is still held. The Board assesses the portfolio
for such investments and, after agreement with the Investment Manager, will agree the
values that represent the extent to which an investment loss has become realised. This is
based upon an assessment of objective evidence of that investment’s future prospects,
todetermine whether there is potential for the investment to recover in value.
Notes to the financial statements
continued
88 Octopus Apollo VCT plc — Annual report and financial statements 2024
10. Fixed asset investments at fair value through profit or loss
(
continued
)
Disclosure
Level 1:
AIM-quoted
investments
£’000
Level 3:
Unquoted
investments
£’000
Total
£’000
Cost at 1 February 2023 2,385 186,739 189,124
Unrealised gain at
1 February 2023
4,189 113,617 117,806
Valuation at 1 February 2023 6,574 300,356 306,930
Movement in the year:
Purchases at cost – 32,975 32,975
Disposal proceeds
(
5,113
)
(
13,179
)
(
18,292
)
Gain on realisation of investments 591
(
1,467
)
(
876
)
Change in fair value in year
(
270
)
7,903 7,6 33
Closing valuation at
31 January 2024
1,782 326,588 328,370
Cost at 31 January 2024 1,828 212,442 214,270
Unrealised gain/
(
loss
)
at
31 January 2024
(
46
)
114,146 114,100
Valuation at 31 January 2024 1,782 326,588 328,370
Level 1 valuations are valued in accordance with the closing bid-price on the relevant
date. Further details of the fixed asset investments held by Apollo are shown within the
Investment Manager’s Review.
Unquoted investments in the portfolio are considered Level 3 assets, such that their
values are not directly observable but are estimated using a combination of valuation
methodologies which notably extrapolate from observable market data for comparable
assets. Further details in respect of the methods and assumptions applied in determining
the fair value of the investments are disclosed in the Portfolio Manager’s Review.
Thesensitivity of these valuations to a reasonable possible change in such assumptions is
given in Note 16. The loan and equity investments are considered to be one instrument due
to them being bound together when assessing the portfolio’s returns to shareholders. This
is consistent with Apollo’s investment policy. Further details of the fixed asset investments
held by Apollo are shown within the Investment Manager’s Review on pages 14 to 25.
Subsidiaries
The following company is deemed to be a subsidiary of Apollo because Apollo owns more
than 50% of the voting rights in that company:
Portfolio
company
Country of
incorporation Sector
Profit/
(
loss
)
before
tax
£’000
Net
assets/
(
liabilities
)
£’000
% equity
held by
Octopus
Apollo
VCT
plc
Voting
rights held
by Octopus
Apollo VCT
plc
Superior
Heat
Limited*
United
Kingdom
Ground
source
heat
(
40
) (
273
)
100 100
*Registered address: 33 Holborn, London, EC1N 2HT.
By virtue of FRS 102 section 9.9, Apollo does not have to produce consolidated financial
statements owing to the fact that its interests in subsidiaries are all held as part of an
investment portfolio
(
as defined by FRS 102
)
, and therefore its interests in subsidiaries are
excluded from consolidation. They have therefore been treated in the same way as other
portfolio companies and are held at fair value. These financial statements are therefore
separate financial statements to those of its subsidiaries.
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 89
11. Current asset investments, cash and cash equivalents
Accounting policy
For the purpose of the Cash Flow Statement, cash and cash equivalents comprise of
cash at bank and money market funds. Cash equivalents are current asset investments
which are disposable without curtailing or disrupting the business and are either readily
convertible into known amounts of cash at or close to their carrying values or traded in an
active market. They are also subject to insignificant risk of valuation changes.
Current asset investments on the Balance Sheet comprise OEICs, which are valued on
a FVTPL basis. Gains and losses arising from changes in fair value of investments are
recognised as part of the capital return within the Income Statement and allocated to the
capital reserve unrealised.
The current asset investments are readily convertible into cash at the option of Apollo,
within seven days. The current asset investments are held for trading, are actively
managed and the performance is evaluated in accordance with a documented
investment strategy.
Disclosure
Current asset investments comprised of OEICs and MMFs. These fall into Level 1 of the
fair value hierarchy as defined in the fixed asset investment accounting policy in Note 10
above.
Level 1
investments
£’000
Cost at 1 February 2023 44,927
Unrealised loss at 1 February 2023
(
597
)
Valuation at 1 February 2023 44,330
Movement in the year:
Additions 76,293
Disposal proceeds
(
66,205
)
Change in fair value in the year 2,018
Closing valuation at 31 January 2024 56,436
Cost at 31 January 2024 55,015
Unrealised gain at 31 January 2024 1,421
Valuation at 31 January 2024 56,436
Notes to the financial statements
continued
90 Octopus Apollo VCT plc — Annual report and financial statements 2024
11. Current asset investments, cash and cash equivalents
(
continued
)
31 January 2024
£’000
31 January 2023
£’000
OEICs:
Sequoia Economic Infrastructure
Fund
(
SEQI
)
8,486 3,970
MMFs:
BlackRock MMF 15,957 16,016
HSBC MMF 15,995 12,171
Deutsche Bank MMF 15,998 12,173
Total current asset investments 56,436 44,330
Cash at bank 13,720 14,251
Total current asset investments
and cash
70,156 58,581
12. Debtors
31 January 2024
£’000
31 January 2023
£’000
Prepayments 68 20
Accrued income 3,508 3,716
Other debtors 176 1,130
3,752 4,866
13. Current liabilities
31 January 2024
£’000
31 January 2023
£’000
Accruals 3,132 11,623
Applications cash 8,852 9,261
11,984 20,884
At 31 January 2024, there were £8,852,000
(
2023: £9,261,000
)
of funds to be allotted as
shares. This applications cash is cash received from investors but not yet allotted. The
movement in the applications cash creditor is reflected in the Cash Flow Statement as
movement in applications account. Accruals included £14,000 for performance fees due
to Octopus
(
2023: £9,201,000
)
.
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 91
14. Share capital
31 January 2024
£’000
31 January 2023
£’000
Allotted and fully paid up:
772,743,612 Ordinary shares of 0.1p
(
2023: 657,239,253 Ordinary shares
of 0.1p
)
773 657
Apollo purchased for cancellation the following shares during the year:
Date
Number of
shares
Price per
share
(
p
)
Total cost
of shares
repurchased
(
£’000
)
31 March 2023 5,060,122 51.1 2,586
28 April 2023 583,979 49.89 291
30 June 2023 2,065,136 49.89 1,030
1 November 2023 3,329,241 51.0 1,698
19 December 2023 2,293,705 49.5989 1,138
Totals 13,332,183 6,743
The Ordinary shares repurchased for cancellation during the year were cancelled at a
weighted average price of 50.6p. The total nominal value of the shares repurchased for
cancellation was £13,332 representing 1.7% of the issued share capital.
Apollo issued the following Ordinary shares during the year:
Date
Number of
shares
Price per
share
(
p
)
Net proceeds
from share
issues
(
£’000
)
31 March 2023 20,072,875 56.3 10,631
28 April 2023
(
DRIS
)
4,038,321 51.9 2,096
7 July 2023 51,732,793 55.0 26,802
7 July 2023 162,416 51.9 84
20 October 2023 22,549,054 56.2 11,930
14 December 2023
(
DRIS
)
4,675,035 51.7 2,417
19 December 2023 25,606,048 54.8 13,184
Totals 128,836,542 67,14 4
The Ordinary shares issued during the year were issued at a weighted average price of
52.1p. Excluding the value of shares issued under the DRIS, the total value of shares issued
net of share issue costs was £62,631,000
(
2023: £71,171,000
)
. This is shown in the Cash Flow
Statement.
The capital of Apollo is managed in accordance with its investment policy with a view to
the achievement of its investment objective as set out on pages 39 to 40. Apollo is not
subject to any externally imposed capital requirements.
Capital management is monitored and controlled using the internal control procedures
set out on page 53 of this report. The capital being managed includes equity and fixed-
interest investments, cash balances and liquid resources including debtors and creditors.
Notes to the financial statements
continued
92 Octopus Apollo VCT plc — Annual report and financial statements 2024
15. Reconciliation of movements in equity
31 January 2024
£’000
31 January 2023
£’000
Shareholders’ funds at start of year 349,493 262,959
(
Loss
)
/ profit after tax
(
435
)
34,541
Shares bought for cancellation
(
6,743
)
(
8,220
)
Issue of shares
(
net of issue costs
)
67,14 4 74,536
Dividends paid
(
19,165
)
(
14,323
)
Shareholders’ funds at end of year 390,294 349,493
When Apollo revalues its investments during the year, any gains or losses arising are
credited/charged to the Income Statement. Unrealised gains/
(
losses
)
are then transferred
to the ‘Capital reserve unrealised’. When an investment is sold, any balance held on the
‘Capital reserve unrealised’ is transferred to the ‘Capital reserve realised’ as a movement in
reserves.
Reserves available for potential distribution under the Companies Act by way of a
dividend are:
£’000
As at 1 February 2023 151,205
Movement in the year 95,325
As at 31 January 2024 246,530
This is the maximum value of reserves available for potential distribution under the
Companies Act, which will be impacted by the future convertibility, into cash, of gains and
losses included in the Capital reserve unrealised. Amounts available for distribution may
be lower under HMRC Distributable Reserves restrictions.
The purpose of the special distributable reserve is to create a reserve which will be capable
of being used by Apollo to pay dividends and for the purpose of making repurchases of its
own shares in the market with a view to narrowing the discount to net asset value at which
Apollo’s Ordinary shares trade. Apollo cancelled the share premium balance
(
£117.8 million
)
as at 31 July 2023 after obtaining a court order on 25September2023
(
in the year to 31
January 2023 a share premium balance of £77.5 million and capital redemption reserve
balance of £8.3 million was cancelled after obtaining a court order on 8 February 2022
)
.
16. Financial instruments and risk management
Apollo’s financial instruments comprise equity investments, unquoted loans, cash
balances and cash equivalents including debtors and creditors. Apollo holds financial
assets in accordance with its investment policy of investing mainly in a portfolio of VCT
qualifying unquoted securities whilst holding a proportion of its assets in cash or near-cash
investments in order to provide a reserve of liquidity.
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 93
16. Financial instruments and risk management
(
continued
)
Classification of financial instruments
Apollo held the following categories of financial instruments, all of which are included in
the Balance Sheet at fair value, at 31 January 2024 and 31 January 2023:
31 January 2024
£’000
31 January 2023
£’000
Financial assets at fair value
through profit or loss
Fixed asset investments 328,370 306,930
Current asset investments 56,436 44,330
Total 384,806 351,260
Financial assets at amortised cost
Cash at bank 13,720 14,251
Accrued income 3,508 3,716
Total 17,228 17,967
Financial liabilities at
amortisedcost
Accruals and other creditors 11,984 20,884
Total 11,984 20,884
Fixed and current asset investments
(
see Note 10 and 11
)
are valued at fair value.
Forquoted investments this is bid price. Unquoted investments are carried at fair value
as determined by the Directors in accordance with IPEV guidelines as detailed within the
Investment Manager’s Review. The fair value of all other financial assets and liabilities are
represented by their carrying value in the Balance Sheet. The Directors believe that the
fairvalue of the assets held at the year end is equal to their carrying value.
In carrying on its investment activities, Apollo is exposed to various types of risk associated
with the financial instruments and markets in which it invests. The most significant types
of financial risk facing Apollo are market risk, interest rate risk, credit risk and liquidity risk.
Apollo’s approach to managing these risks is set out below together with a description of
the nature and amount of the financial instruments held at the Balance Sheet date.
Market risk
Apollo’s strategy for managing investment risk is determined with regard to Apollo’s
investment objective, as outlined on pages 39 to 40. The management of market risk is
part of the investment management process and is a central feature of venture capital
investment. Apollo’s portfolio is managed in accordance with the policies and procedures
described in the Directors’ Report on pages 59 to 62, having regard to the possible
effects of adverse price movements, with the objective of maximising overall returns
to shareholders. Investments in smaller companies, by their nature, usually involve a
higher degree of risk than investments in larger companies quoted on a recognised stock
exchange, though the risk can be mitigated to a certain extent by diversifying the portfolio
across business sectors and asset classes. The overall disposition of Apollo’s assets is
regularly monitored by the Board.
Details of Apollo’s investment portfolio at the Balance Sheet date are set out on pages 97
and 98.
83.7%
(
2023: 85.9%
)
by value of Apollo’s net assets comprises investments in unquoted
companies held at fair value. A 20% overall decrease in the valuation of the unquoted
investments at 31 January 2024 would have decreased net assets and the total profit for
the year by £65,318,000
(
2023: £60,071,000 at 20%
)
. An equivalent change in the opposite
direction would have increased net assets and the total profit for the year by the same
amount.
Sensitivity analyses were carried out on 98.3% of unquoted investments
(
excluding
immaterial unquoted holdings
)
to assess the potential impact of changes in revenue-
based multiples and foreign exchange rates. 73.1% of net assets
(
86.9% of portfolio value
)
is valued using revenue-based multiples, including PRI calibration. An increase in the
multiple used by 5% would increase the net asset value by 1.6%
(
£4,536,000
)
. Conversely,
a decrease in the multiple used by 5% would decrease the net asset value by 1.3%
(
£3,734,000
)
. The 5% sensitivity used provides the most meaningful impact of average
multiple changes across the portfolio.
Notes to the financial statements
continued
94 Octopus Apollo VCT plc — Annual report and financial statements 2024
16. Financial instruments and risk management
(
continued
)
30.5% of net assets
(
36.2% of portfolio value
)
is exposed to changes in the foreign
exchange rate. An increase in the rate of 5% would increase the net asset value by 4.4%
(
£5,199,000
)
. Conversely, a decrease in the rate of 5% would decrease the net asset value
by 4.0%
(
£4,703,000
)
. The 5% sensitivity used provides the most meaningful impact of
average foreign exchange rate changes across the portfolio.
Current asset investments comprised 14.5% of Apollo’s net assets by value
(
2023: 12.7%
)
. A
20% decrease
(
2023: 20%
)
in the price of these securities at 31 January 2024 would have
decreased net assets by £11,287,000
(
2023: £8,866,000 decrease
)
; and an equivalent
change in the opposite direction would have increased net assets for the year by the
same amount.
Interest rate risk
Some of Apollo’s financial assets and current asset investments are interest-earning. As a
result, Apollo is exposed to fair value interest rate risk due to fluctuations in the prevailing
levels of market interest rates.
Fixed rate
The table below summarises weighted average effective interest rates for the interest-
bearing loans made to portfolio companies:
31 January 2024 31 January 2023
Total
loan
portfolio
by value
£’000
Weighted
average
interest
rate
%
Weighted
average
time for
which
rate is
fixed
Years
Total loan
portfolio
by value
£’000
Weighted
average
interest
rate
%
Weighted
average
time for
which
rate is
fixed
Years
Fixed rate
investments
in unquoted
companies
14,247 12.5 4.5 15,640 11.0 4.6
Floating rate
Apollo’s floating rate investments comprise cash held within interest-bearing money
market funds. The benchmark rate which determines the rate of interest receivable on
such investments is the bank base rate, which was 5.25% at 31 January 2024
(
31January
2023: 3.5%
)
. The amounts held in floating rate investments at the Balance Sheet date
were as follows:
31 January 2024
£’000
31 January 2023
£’000
Money market funds 47,950 40,360
Every 1% increase or decrease in the base rate would increase or decrease income receivable
from these investments and the total profit for the year by £479,497
(
2023:£403,602
)
.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to dischargean
obligation or commitment that it has entered into with Apollo. The Investment Manager
and the Board carry out a regular review of counterparty risk. The carrying values of
financial assets represent the maximum credit risk exposure at the Balance Sheet date.
At 31 January 2024, Apollo’s financial assets exposed to credit risk comprised the following:
31 January 2024
£’000
31 January 2023
£’000
Fixed rate investments in unquoted
companies
14,247 15,640
Cash at bank 4,868 4,990
Applications cash 8,852 9,261
Accrued dividends and interest
receivable
3,508 3,715
31,475 33,606
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 95
16. Financial instruments and risk management
(
continued
)
Credit risk relating to listed money market funds is mitigated by investing in a portfolio
of investment instruments of high credit quality, comprising securities issued by the UK
Government and major UK institutions. Credit risk relating to loans and preference shares
in unquoted companies is considered to be part of market risk. The investments in OEICs
are uncertified.
Credit risk arising on the sale of investments is considered to be small due to the short
settlement and the contracted agreements in place with the settlement lawyers.
Apollo’s current accounts are maintained with HSBC Bank plc. Should the credit quality or
the financial position of HSBC Bank plc deteriorate significantly the Investment Manager
will move the cash holdings to another bank.
Credit risk which is associated with accrued dividends and interest receivable is considered
to be small as Apollo performs impairment assessments on these amounts and makes
reasonable provisions where necessary on an on-going basis.
Liquidity risk
Apollo’s financial assets include investments in unquoted equity securities which are not
traded on a recognised stock exchange and which generally may be illiquid. As a result,
Apollo may not be able to realise some of its investments in these instruments quickly 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.
Apollo’s liquidity risk is managed on a continuing basis by the Investment Manager in
accordance with policies and procedures laid down by the Board. Apollo’s overall liquidity
risks are monitored on a quarterly basis by the Board.
Apollo maintains sufficient investments in cash and readily realisable securities to pay
accounts payable and accrued expenses. At 31 January 2024 these investments were
valued at £61,305,000
(
2023: £49,321,000
)
.
17. Events after the end of the reporting period
The following events occurred between the Balance Sheet date and the signing of these
financial statements:
•
4.3 million shares were purchased at a price of 48.48p per share on 27 March 2024.
•
70.1 million shares were issued at an allotment price of 53.5p per share on 28 March 2024.
•
Apollo announced its intention to increase the fundraise offer from £50.0 million to
£85.0 million on 19 April 2024, with applications opening on 29 April 2024.
•
Apollo invested a total of £10.7 million in one new and six follow-on investments.
•
Apollo sold Renalytix plc for cash proceeds of £62,700.
•
A dividend of £10.9 million was paid on 2 May 2024.
•
5.1 million shares were issued at an allotment price of 49.2p under the DRIS on 2 May 2024.
18. Contingencies, guarantees and financial commitments
There were no contingencies or guarantees as at 31 January 2024. There are two
committed follow-on investments totalling £3.6 million
(
2023: £4.2 million
)
.
19. Transactions with the Investment Manager
Apollo has employed Octopus throughout the year as the Investment Manager. Apollo
has incurred £7,449,000
(
2023: £5,748,000
)
in management fees due to the Investment
Manager in the year. At 31 January 2024 there was £1,989,000 outstanding
(
2023:
£1,599,000
)
. The management fee is payable quarterly in arrears and is based on 2% of
the NAV calculated daily from 31 January.
The Investment Manager is entitled to an annual performance-related incentive fee,
subject to the total return
(
NAV plus cumulative dividends paid
)
per share being at least
100p at the end of the relevant period. This performance fee is equal to 20% of the
amount by which the NAV plus cumulative dividends paid per share exceeds the higher of:
•
The highest total return in previous accounting periods. This is currently the return in the
year to 31 January 2023
(
137.9p
)
.
•
The total return as at 1 February 2012, plus the average Bank of England interest rate to
date, commencing 1 February 2012.
Notes to the financial statements
continued
96 Octopus Apollo VCT plc — Annual report and financial statements 2024
19. Transactions with the Investment Manager
(
continued
)
The Board considers that the liability becomes due at the point that the performance
criteria are met, which has happened at the end of this financial year. In the year, Apollo
incurred performance fees of £14,000
(
2023: £9,201,000
)
. At 31 January 2024 there were
£14,000 of outstanding performance fees to be paid
(
2023: £9,201,000
)
.
The Investment Manager also provides accounting and administrative services to Apollo,
payable quarterly in arrears, for a fee of 0.3% of the NAV calculated daily. During the
year £1,117,000
(
2023: £862,000
)
was paid to the Investment Manager, of which £298,000
(
2023: £240,000
)
was outstanding at the Balance Sheet date, for the accounting and
administrative services. In addition, the Investment Manager also provides company
secretarial services for a fee of £20,000 per annum
(
2023: £20,000
)
.
20. Related party transactions
Several members of the Octopus investment team hold non-executive directorships as
part of their monitoring roles in Apollo’s portfolio companies, but they have no controlling
interests in those companies. The Investment Manager receives transaction fees and
directors’ fees from these portfolio companies. During the year ended 31January 2024,
directors’ fees of £821,000 attributable to the investments of Apollo were received by the
Investment Manager
(
2023: £686,000
)
.
As at 31 January 2024, Octopus Investments Nominees Limited
(
OINL
)
held 315 shares
(
2023: 173,900
)
in Apollo as beneficial owner, having purchased these from shareholders
to protect their interests after delays or errors with shareholder instructions and other
similar administrative issues. Throughout the period to 31 January 2024 OINL purchased
315 shares
(
2023: 384,179
)
at a cost of £163
(
2023: £183,363
)
and sold 173,900 shares
(
2023: 219,539
)
for proceeds of £87,993
(
2023: £103,040
)
. This is classed as a related party
transaction as per the Listing Rules, as Octopus, the Investment Manager, and OINL are
part of the same group of companies. Any such future transactions, where OINL takes
over the legal and beneficial ownership of Company shares will be announced to the
market and disclosed in annual and half-yearly reports.
Notes to the financial statements
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 97
Fixed asset investments
Investment cost as at
31 January 2024
(
£’000
)
Amount invested in the year to
31 January 2024
(
£’000
)
N2JB Limited
(
trading as Natterbox
)
17,490 –
Sova Assessment Limited 12,250 1,750
Codebay Solutions Limited
(
trading as Lodgify
)
9,541 –
Hasgrove Limited
(
trading as Interact
)
308 –
Fable Data Limited 6,000 –
Mention Me Limited 15,000 –
Triumph Holdings Limited 3,800 –
ValueBlue BV 10,071 5,886
Fuse Universal Limited 8,000 –
Turtl Surf & Immerse Limited 10,000 –
Intigriti NV 9,639 –
Ryte GmbH 8,359 –
Wazoku Limited 8,000 –
Delio Ltd 7,69 9 2,200
Adway AB 7,0 12 1,366
Vaultspeed NV 6,506 6,506
Synchtank Limited 6,000 2,500
Ubisecure Holdings Limited 5,575 –
Fergus Software Limited 5,563 1,797
Tendable Limited 5,310 –
Pollen Technology Limited
(
trading as APLYiD
)
5,265 –
Zapnito Ltd 5,000 1,000
Investment portfolio
The table below sets out the investment cost and the amount invested in the year for the portfolio as at 31 January 2024. Details of the top ten investments can be found on
pages 21 to 24.
98 Octopus Apollo VCT plc — Annual report and financial statements 2024
Investment portfolio
continued
Fixed asset investments
Investment cost as at
31 January 2024
(
£’000
)
Amount invested in the year to
31 January 2024
(
£’000
)
Dyscova Limited
(
trading as Care & Independence
)
4,700 –
Fiscal Technologies Ltd 4,607 –
Rotolight Group Limited 4,600 –
Zipline Cloud Pty Ltd
(
trading as Pendula
)
3,934 3,934
Edge10
(
UK
)
Limited 3,750 1,250
Homesearch Digital Limited 3,000 –
Dudy Solutions SL
(
trading as Harbiz
)
2,586 2,586
Peak Data AG 2,492 –
MagicOrange Group Limited 2,200 2,200
Superior Heat Limited 1,961 –
Artesian Solutions Limited
(
trading as FullCircl
)
1,805 –
Secret Escapes Limited 1,181 –
Trafi Limited 727 –
EKF Diagnostics plc 677 –
Origami Energy Limited 673 –
CurrencyFair Limited
(
trading as Zai
)
657 –
Vertu Motors plc 639 –
Countrywide Healthcare Supplies Limited 423 –
Segura Systems Limited 393 –
Ecrebo Limited 366 –
Nektan plc 276 –
Renalytix plc 139 –
Trellus Health plc 62 –
Verici Dx plc 34 –
Total 214,270 32,975
Octopus Apollo VCT plc — Annual report and financial statements 2024 99
Shareholder information and contact details
Apollo, formerly named Octopus Apollo VCT 3 plc, was launched in July 2006.
On 27September 2012, the Company acquired the net assets of Octopus Apollo VCT 1 plc,
Octopus Apollo VCT 2 plc and Octopus Apollo VCT 4 plc. On the same day, the Company
was renamed Octopus Apollo VCT plc. On 28 November 2015 the Company acquired
the net assets of Octopus VCT plc
(
OVCT
)
in consideration for the issue of 52,035,840
C Ordinary shares. On 27 January 2016 the Company acquired the net assets of Octopus
VCT 2 plc in consideration for the issue of 19,082,726 D Ordinary shares. On 19 December
2016 the Company acquired the net assets of Octopus Eclipse VCT plc in consideration for
the issue of 35,349,838 Ordinary 10p shares.
The Company was incorporated on 7 June 2006. During the period from launch to 5 April
2007 over £27.1 million
(
£25.9 million net of expenses
)
was raised through an Offer for
Subscription. Since then the Company has raised additional investment through further
fundraises as follows:
•
£29.3 million
(
£27.8 million net of expenses
)
during the year to 31 January 2013;
•
£22.4 million
(
£20.6 million net of expenses
)
during the year to 31 January 2014;
•
£8.7 million
(
£8.3 million net of expenses
)
during the year to 31 January 2015;
•
£31.2 million
(
£30.3 million net of expenses
)
during the year to 31 January 2016;
•
£37.4 million
(
£35.9 million net of expenses
)
during the year to 31 January 2017;
•
£16.6 million
(
£16.1 million net of expenses
)
during the year to 31 January 2018;
•
£21.7 million
(
£21.0 million net of expenses
)
during the year to 31 January 2020;
•
£28.1 million
(
£27.6 million net of expenses
)
during the year to 31 January 2021;
•
£106.1 million
(
£101.9 million net of expenses
)
during the year to 31 January 2022;
•
£79.0 million
(
£74.5 million net of expenses
)
during the year to 31 January 2023;
•
£71.1 million
(
£67.2 million net of expenses
)
during the year to 31 January 2024.
The objective of the Company is to invest in a diversified portfolio of UK smaller
companies in order to generate income and preserve capital over the long term.
Further details of the Company’s progress are discussed in the Chair’s Statement and
Investment Manager’s Review on pages 3 to 5 and pages 14 to 25, respectively.
Venture Capital Trusts
(
VCTs
)
VCTs were introduced in the Finance Act 1995 to provide a means for private individuals
to invest in unquoted companies in the UK. Subsequent Finance Acts have introduced
changes to VCT legislation. The tax benefits currently available to eligible new investors in
VCTs include:
•
up to 30% up-front income tax relief;
•
exemption from income tax on dividends paid; and
•
exemption from capital gains tax on disposals of shares in VCTs.
The Company has been approved as a VCT by HMRC. In order to maintain its approval
the Company must comply with certain requirements of the Income Tax Act 2007 on a
continuing basis, specifically the provisions of chapter 3 and, in particular, s280A:
•
at least 80% of the Company’s investments must comprise ‘qualifying holdings’*
(
asdefined in the legislation
)
;
•
for cash raised in accounting periods beginning on or after 5 April 2018, at least 30% of
the funds raised must be invested in qualifying holdings within twelve months of the end
of the accounting period in which they were raised;
•
no single investment made can exceed 15% of the total Company value; and
•
a minimum of 10% of each Qualifying Investment must be in Ordinary shares with no
preferential rights.
* A ‘qualifying holding’ consists of up to £5 million invested in any one year
(
£10 million for knowledge
intensive companies
)
in new shares or securities in an unquoted UK company
(
or companies traded
on AIM or Aquis
)
which is carrying on a qualifying trade and whose gross assets do not exceed a
prescribed limit at the time of investment. The definition of a ‘qualifying trade’ excludes certain
activities such as property investment and development, financial services and asset leasing.
The Company invests in a diversified portfolio of AIM-traded and smaller unquoted
UK companies in order to preserve capital over the long-term as well as to deliver an
attractive tax-free dividend stream.
The Directors have managed the affairs of the Company with the intention of maintaining
its status as a VCT.
100 Octopus Apollo VCT plc — Annual report and financial statements 2024
Dividends
Dividends are paid by Computershare Investor Services PLC
(
‘Computershare’
)
on behalf
of the Company. Shareholders who wish to have dividends paid directly into their bank
account rather than by cheque to their registered address can complete a mandate form
for this purpose or complete an instruction electronically by visiting the Computershare
Investor Centre at: www.uk.computershare.com/investor/.
Queries relating to dividends, shareholdings or requests for mandate forms should be
directed to Computershare by calling 0370 703 6327
(
calls to this number cost the same
as a normal local or national landline call and may be included in your service providers
tariff. Calls outside the United Kingdom will be charged at the applicable international
rate. Computershare are open between 8.30am-5.30pm, Monday to Friday excluding
public holidays in England and Wales
)
, or by writing to them at:
The Registrar
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
The following table shows the net asset value
(
NAV
)
per Ordinary share and lists the
dividends that have been paid since the launch of Apollo:
Year ended
NAV
Dividends
Paid
in Year
Cumulative
Dividends
Paid
NAV +
Cumulative
Dividends
31 January 2008 95.5p – – 95.5p
31 January 2009 92.2p 3.0p 3.0p 95.2p
31 January 2010 90.1p 3.0p 6.0p 96.1p
31 January 2011 89.6p 3.0p 9.0p 98.6p
31 January 2012 90.9p 3.5p 12.5p 103.4p
31 January 2013 89.3p 5.0p 17.5p 106.8p
31 January 2014 86.8p 5.0p 22.5p 109.3p
31 January 2015 84.8p 5.0p 27.5 p 112.3p
31 January 2016 82.3p 5.0p 32.5p 114.8p
31 January 2017 63.2p 21.5p 54.0p 117.2p
31 January 2018 50.6p 14.0p 68.0p 118.6p
31 January 2019 47.1p 3.1p 71.1p 118.2p
31 January 2020 45.7p 3.0p 74.1p 119.8p
31 January 2021 49.2p 2.3p 76.4p 125.6p
31 January 2022 50.2p 5.7p 82.1p 132.3p
31 January 2023 53.2p 2.6p 84.7p 137.9p
31 January 2024 50.5p 2.7p 87.4 p 137.9p
The second interim dividend of 1.3p per Ordinary share was paid on 2 May 2024 to
shareholders on the register on 12 April 2024.
Shareholder information and contact details
continued
Jan
07
Jan
08
Jan
09
Jan
10
Jan
11
Jan
12
Jan
13
Jan
14
Jan
15
Jan
16
Jan
17
Jan
18
Jan
19
Jan
20
Jan
21
Jan
22
Jan
24
Jan
23
0
30
60
90
120
150
NAV per share Cumulative dividends
93.7 95.5 92.2 90.1 89.6 90.9 89.3 86.8 84.8 82.3 63.2 50.6
47.1
45.7
49.2
50.2
50.5
53.2
93.7
95.5 95.2
96.1
98.6
106.8
109.3
112.3
114.8
117.2
118.6
118.2
119.8
125.6
132.3
137.9 137.9
103.4
Total Value Since Inception
Octopus Apollo VCT plc — Annual report and financial statements 2024 101
At the General Meeting held in November 2014 shareholders approved a
Dividend Reinvestment Scheme
(
DRIS
)
and gave the Directors authority to offer
shareholders the right to elect to receive Ordinary shares instead of a cash dividend.
Any shareholder wishing to reinvest their dividends, and who has not already
elected to do so, can request a DRIS mandate form by calling Computershare on
0370703 6327. The DRIS mandate form can also be found on the Octopus website:
www.octopusinvestments.com.
Share price
The Company’s share price can be found on various financial websites including
www.londonstockexchange.com, with the following TIDM/EPIC code:
Ordinary shares
TIDM/EPIC code OAP3
Latest share price 24 May 2024 47.1p per share
Buying and selling shares
The Company’s Ordinary shares can be bought and sold in the same way as any other
company quoted on the London Stock Exchange via a stockbroker. There may be tax
implications in respect of selling all or part of your holdings, so shareholders should contact
their independent financial adviser if they have any queries.
Buyback of shares
The Company operates a policy of buying its own shares for cancellation as they become
available. The Company is, however, unable to buy back shares directly from shareholders.
If you are considering selling your shares or trading in the secondary market, please
contact the Company’s Corporate Broker, Panmure Gordon
(
UK
)
Limited
(
‘Panmure’
)
.
Panmure is able to provide details of close periods
(
when the Company is prohibited from
buying its own shares
)
and details of the price at which it has bought shares. Panmure can
be contacted as follows:
Chris Lloyd 020 7886 2716 chris.lloyd@panmure.com
Paul Nolan 020 7886 2717 paul.nolan@panmure.com
Secondary market
UK income tax payers, aged 18 or over, can purchase shares in the secondary market and
benefit from:
•
tax-free dividends;
•
realised gains not being subject to capital gains tax
(
although any realised losses are not
allowable
)
;
•
no minimum holding period; and
•
no need to include VCT dividends in annual tax returns.
The UK tax treatment of VCTs is on a first in and first out basis and therefore tax advice
should be obtained before shareholders dispose of their shares.
Notification of change of address
Communications with shareholders are mailed to the registered address held on the share
register. In the event of a change of address or other amendment, this should be notified
to the Company’s registrar, Computershare, under the signature of the registered holder
or via the Computershare Investor Centre at: www.uk.computershare.com/investor/.
Computershare’s contact details are provided on page 104.
Shareholder information and contact details
continued
102 Octopus Apollo VCT plc — Annual report and financial statements 2024
Other information for shareholders
Previously published Annual Reports and Half-yearly Reports are available for viewing on
the Investment Manager’s website at www.octopusinvestments.com. Other statutory
information about the Company can also be found here.
Electronic communications
Reports and accounts and all other correspondence are published electronically.
Thiscuts the cost of printing and reduces the impact on the environment. If, in future,
you would prefer to receive an email telling you a report is available to view or to receive
documents by email, please contact Octopus on 0800 316 2295 or Computershare
on 0370 703 6327. Alternatively you can sign up to receive e-communications via the
Computershare Investor Centre at: www.uk.computershare.com/investor/.
Warning to shareholders
Many companies are aware that their shareholders have received unsolicited phone calls
or correspondence concerning investment matters. These are typically from overseas
based ‘brokers’ who target UK shareholders offering to sell them what often turn out to
be worthless or high risk shares in US or UK investments. They can be very persistent and
extremely persuasive. Shareholders are therefore advised to be wary of any unsolicited
advice, offer to buy shares at a discount or offers for free company reports.
Please note that it is very unlikely that the Company, the Investment Manager or the
Registrar would make unsolicited telephone calls to shareholders and that any such calls
would relate only to official documentation already circulated to shareholders and never in
respect of investment advice.
If you are in any doubt about the authenticity of an unsolicited phone call, please call
Octopus on 0800 316 2295.
The Financial Conduct Authority has also issued guidelines on how to avoid share fraud
and further information can be found on their website: www.fca.org.uk/consumers/
scams/ investment-scams/share-fraud-and-boiler-room-scams. You can report any
share fraud to them by calling 0800 111 6768.
Shareholder information and contact details
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 103
Alternative performance measure
(
APM
)
APMs are financial measures of historical or future financial performance, financial
position, or cash flows, other than a financial measure defined or specified in the
applicable financial reporting framework. These APMs will help shareholders to understand
and assess Apollo’s progress. A number of terms within this Glossary have been identified
as APMs.
Net asset value or NAV
NAV is the value of the VCT’s total assets less liabilities. It is equal to the total shareholders’
funds.
Net asset value per share or NAV per share
The NAV per share of Apollo is the sum of the underlying assets less the liabilities of Apollo
divided by the total number of shares in issue.
Ongoing charges ratio
(
APM
)
The ongoing charges ratio has been calculated using the AIC recommended methodology
and excludes irrecoverable VAT, exceptional costs and trail commission. The figure shows
the annual percentage reduction in shareholder returns as a result of recurring operational
expenses. It informs shareholders of the likely costs that will be incurred in managing the
fund in the future.
This is calculated by dividing expenses of £9,433,000, which includes investment
management fees, the expenses listed out in Note 4 on page 83, and excludes
performance fee, exceptional costs and trail commission by average net assets of
£387,906,000.
Total return
(
APM
)
Total return is calculated as movement in NAV per share in the period plus dividends paid
in the period. Total return per share enables shareholders to evaluate more clearly the
performance of Apollo, as it includes the underlying value of the portfolio at the reporting
date.
Total return %
(
APM
)
Total return % is calculated as movement in NAV per share in the period plus dividends
paid in the period, divided by the NAV per share at the beginning of the period. Total
return % on the NAV per share enables shareholders to evaluate more clearly the
performance of Apollo, as it includes the underlying value of the portfolio at the reporting
date.
Money Market Fund
(
MMF
)
A mutual fund that invests in highly liquid, short term instruments. These instruments
include cash, cash equivalent securities, and high credit rating debt based securities with
a short term maturity. They are intended to offer investors high liquidity with a low level
of risk.
Open Ended Investment Company
(
OEIC
)
A type of investment fund that invests in equities, bonds, and other securities. The price
of the shares is based on the underlying assets of the fund. These are highly liquid as
new shares can be created to meet investor demand and the fund will cancel shares of
investors who exit the fund.
Glossary of terms
104 Octopus Apollo VCT plc — Annual report and financial statements 2024
Board of Directors
Murray Steele
(
Chair
)
Christopher Powles
Alex Hambro
Claire Finn
Gillian Elcock
(
appointed 1 December 2023
)
Company Number
Registered in England & Wales
No. 05840377
Legal Entity Identifier
(
LEI
)
213800Y3XEIQ18DP3O53
Secretary and Registered Office
Octopus Company Secretarial Services Limited
33 Holborn
London
EC1N 2HT
Investment and Administration Manager
Octopus Investments Limited
33 Holborn
London
EC1N 2HT
Tel: 0800 316 2295
www.octopusinvestments.com
Corporate Broker
Panmure Gordon
(
UK
)
Limited
40 Gracechurch Street
London
EC3V 0BT
Tel: 020 7886 2500
Independent Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Tax Adviser
James Cowper Kreston
Reading Bridge House
George Street
Reading
Berkshire
RG1 8LS
VCT Status Adviser
Shoosmiths LLP
(
appointed 22 February 2022
)
Apex Plaza
Forbury Road
Reading
RG1 1SH
Directors and advisers
Bankers
HSBC Bank plc
31 Holborn
London
EC1N 2HR
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Tel: 0370 703 6327
(
calls are charged at the standard geographic rate and will
vary by provider. Calls from outside the United Kingdom
will be charged at the applicable international rate
)
.
www.computershare.com/uk
www.uk.computershare.com/investor/
Octopus Apollo VCT plc — Annual report and financial statements 2024 105
Notice is hereby given that the Annual General Meeting
(
AGM
)
of Octopus Apollo VCT plc
will be held at 33 Holborn, London, EC1N 2HT on 10 July 2024 at 10.00am for the purposes
of considering and, if thought fit, passing the following resolutions of which Resolutions
1to 8 will be proposed as Ordinary Resolutions and Resolutions 9 to 12 will be proposed as
Special Resolutions:
Ordinary Business
1. To receive and adopt the Annual Report and Accounts and the audited financial
statements for the year to 31 January 2024.
2. To approve the Directors’ Remuneration Report.
3. To re-elect Murray Steele as a Director.
4. To re-elect Claire Finn as a Director.
5. To elect Gillian Elcock as a Director.
6. To re-appoint BDO LLP as auditor of Apollo and to authorise the Directors to determine
their remuneration.
Special Business
To consider and if thought fit, pass Resolutions 7 and 8 as Ordinary Resolutions and
Resolutions 9 to 12 as Special Resolutions:
7. Authority to allot relevant securities
THAT, in addition to existing authorities, the Directors be and are generally and
unconditionally authorised in accordance with s551 of the Companies Act 2006
(
the ‘Act’
)
to exercise all the powers of Apollo to allot shares in Apollo up to a maximum nominal
amount of £253,156
(
representing approximately 30% of the Ordinary share capital in
issue at the date of this Notice
)
such authority to expire at the earlier of the conclusion
of Apollo’s AGM next following the passing of this Resolution and the expiry of 15 months
from the passing of the relevant Resolution
(
unless previously renewed, varied or revoked
by Apollo in a general meeting
)
but so that such authority allows Apollo to make offers or
agreements before the expiry thereof, which would or might require relevant securities to
be allotted after the expiry of such authority.
8. Authority to allot relevant securities under the DRIS
THAT in addition to existing authorities, the Directors of Apollo be and hereby are generally
and unconditionally authorised in accordance with Section 551 of the Act to exercise all the
powers of Apollo to allot shares in Apollo up to a maximum nominal amount of £59,069 in
connection with Apollo’s dividend reinvestment scheme
(
representing approximately 7% of
the Ordinary share capital in issue as at the date of this Notice
)
provided that the authority
conferred by this Resolution shall expire on the date falling 15 months from the date of
the passing of this Resolution or, if earlier, the conclusion of Apollo’s next AGM following
the passing of this Resolution
(
unless previously renewed, varied or revoked by Apollo in
general meeting
)
save that this authority shall allow Apollo to make, before the expiry of
this authority, any offers or agreements which would or might require Shares to be allotted
or rights to be granted after such expiry and the Directors may allot Shares in pursuance of
any such offer or agreement notwithstanding the expiry of such authority.
9. Empowerment to make allotments of equity securities
THAT, conditional upon the passing of Resolution 7, and in addition to existing authorities,
the Directors of Apollo be and are hereby empowered pursuant to s571 of the Act to allot
or make offers or agreements to allot equity securities
(
as defined in s560
(
1
)
of the said
Act
)
for cash pursuant to the authority granted by Resolution 7 as if s561 of the Act did not
apply to any such allotments and so that:
(
a
)
reference to allotment in this Resolution shall be construed in accordance with s560
(
2
)
of the Act; and
(
b
)
the power conferred by this Resolution shall enable Apollo to make any offer or
agreement before the expiry of the said power which would or might require equity
securities to be allotted after the expiry of the said power and the Directors may allot
equity securities in pursuance of such offer or agreement notwithstanding the expiry
of such power.
The power provided by this Resolution shall expire on the date falling 15 months from the
date of the passing of this Resolution or, if earlier, the conclusion of Apollo’s next AGM
following the passing of this Resolution
(
unless previously renewed, varied or revoked by
Apollo in general meeting
)
.
Notice of Annual General Meeting
106 Octopus Apollo VCT plc — Annual report and financial statements 2024
10. Empowerment to make allotments of equity securities under the DRIS
THAT, conditional upon the passing of Resolution 8, and in addition to existing authorities,
the Directors of Apollo be and are hereby empowered pursuant to s571 of the Act to allot
or make offers or agreements to allot equity securities
(
as defined in s560
(
1
)
of the said
Act
)
for cash pursuant to the authority granted by Resolution 8 as if s561 of the Act did not
apply to any such allotments and so that:
(
a
)
reference to allotment in this Resolution shall be construed in accordance with s560
(
2
)
of the Act; and
(
b
)
the power conferred by this Resolution shall enable Apollo to make any offer or
agreement before the expiry of the said power which would or might require equity
securities to be allotted after the expiry of the said power and the Directors may allot
equity securities in pursuance of such offer or agreement notwithstanding the expiry
of such power.
The power provided by this Resolution shall expire on the date falling 15 months from the
date of the passing of this Resolution or, if earlier, the conclusion of Apollo’s next AGM
following the passing of this Resolution
(
unless previously renewed, varied or revoked by
Apollo in general meeting
)
.
11. Authority to make market purchases
THAT, in addition to existing authorities, Apollo be and is hereby generally and
unconditionally authorised to make market purchases
(
within the meaning of s693
(
4
)
of
the Act
)
of Ordinary shares of 0.1p each in Apollo
(
‘Ordinary shares’
)
provided that:
(
a
)
the maximum number of Ordinary shares so authorised to be purchased shall not
exceed 126,493,699 Ordinary shares, representing approximately 14.99% of Apollo’s
issued share capital at the date of this Notice;
(
b
)
the minimum price which may be paid for an Ordinary share shall be its nominal
value;
(
c
)
the maximum price, exclusive of expenses, which may be paid for an Ordinary share
is an amount equal to the higher of:
(
i
)
105% of the average of the middle market
quotation for an Ordinary share taken from the London Stock Exchange Daily Official
List for the five business days immediately preceding the day on which the Ordinary
share is contracted to be purchased; and
(
ii
)
the amount stipulated by Article 5
(
6
)
of
the Market Abuse Regulation;
(
d
)
the authority conferred comes to an end at the conclusion of the next AGM of Apollo
or upon the expiry of 15 months from the passing of this Resolution, whichever is the
earlier; and
(
e
)
that Apollo may enter into a contract to purchase its Ordinary shares under this
authority prior to the expiry of this authority which would or might be completed
wholly or partly after the expiry of this authority.
12. Cancellation of share premium account
THAT, subject to the sanction of the High Court, the amount standing to the share
premium account of Apollo, at the date the order is made confirming such cancellation
by the Court, be and is hereby cancelled, and the amount by which the share capital is so
reduced be credited to the reserves of Apollo.
By Order of the Board
Murray Steele
Chair
28 May 2024
Notice of Annual General Meeting
continued
Octopus Apollo VCT plc — Annual report and financial statements 2024 107
Notes:
(
a
)
A member entitled to attend and vote at the AGM may appoint one or more proxies to
attend and vote on his or her behalf. A proxy need not be a member.
(
b
)
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001,
entitlement to attend and vote at the meeting and the number of votes which may
be cast thereat will be determined by reference to the Register of Members of Apollo
at close of business on the day which is two days before the day of the meeting.
Changes to entries on the Register of Members after that time shall be disregarded in
determining the rights of any person to attend and vote at the meeting.
(
c
)
A form of proxy is enclosed which, to be effective, must be completed and delivered
to Apollo’s registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater
Road, Bristol, BS99 6ZY or alternatively, you may register your proxy electronically at
www.investorcentre.co.uk/eproxy, in each case, so as to be received by no later
than 48 hours before the time the AGM is scheduled to begin. To vote electronically,
you will be asked to provide your Control Number, Shareholder Reference Number and
PIN which are detailed on your proxy form.
Appointment of a proxy, or any CREST proxy instruction
(
as described in paragraph
(
d
)
below
)
will not preclude a member from subsequently attending and voting at the
meeting should he or she choose to do so. This is the only acceptable means by which
proxy instructions may be submitted electronically.
(
d
)
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 issuer’s agent
(
ID number 3RA50
)
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 time stamp generated
by the CREST system
)
from which the issuer’s agent is able to retrieve the message.
After this time any change of instructions to a proxy appointed through CREST should
be communicated to the proxy by other means. CREST personal members or other
CREST sponsored members, and those CREST members who have appointed voting
service provider
(
s
)
should contact their CREST sponsor or voting service provider
(
s
)
for assistance with appointing proxies via CREST. For further information on CREST
procedures, limitations and system timings please refer to the CREST manual. Apollo
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.
(
e
)
Any person receiving a copy of the Notice as a person nominated by a member to
enjoy information rights under section 146 of the Companies Act 2006
(
a ‘Nominated
Person’
)
should note that the provisions in Notes
(
a
)
and
(
b
)
above concerning the
appointment of a proxy or proxies to attend the meeting in place of a member,
do not apply to a Nominated Person as only shareholders have the right to appoint
a proxy. However, a Nominated Person may have a right under an agreement
between the Nominated Person and the member by whom he or she was nominated
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 have a right under such an agreement to give instructions to
the member as to the exercise of voting rights at the meeting.
(
f
)
Section 319A of the Companies Act 2006 requires the Directors to answer any question
raised at the AGM which relates to the business of the meeting although no answer
need be given
(
a
)
if to do so would interfere unduly with the preparation of the meeting
or involve disclosure of confidential information;
(
b
)
if the answer has already been
given on Apollo’s website; or
(
c
)
if it is undesirable in the best interests of Apollo or the
good order of the meeting.
Questions from our shareholders in relation to the AGM can be sent via email to
ApolloAGM@octopusinvestments.com. Apollo may, however, elect to provide
answers to questions raised within a reasonable period of days after the conclusion of
the AGM.
(
g
)
Members satisfying the thresholds in section 527 of the Companies Act 2006 can
require Apollo to publish a statement on its website setting out any matter relating to
(
a
)
the audit of Apollo’s accounts
(
including the auditor’s report and the conduct of the
audit
)
that are to be laid before the AGM; or
(
b
)
any circumstances connected with an
auditor of Apollo ceasing to hold office since the last AGM, that the members propose
to raise at the meeting. Apollo cannot require the members requesting the publication
to pay its expenses. Any statement required to be placed on the website must also be
sent to Apollo’s auditors no later than the time it makes its statement available on the
Notice of Annual General Meeting
continued
108 Octopus Apollo VCT plc — Annual report and financial statements 2024
website. The business which may be dealt with at the meeting includes any statement
that Apollo has been required to publish on its website.
(
h
)
Under sections 338 and 338A Companies Act 2006, members meeting the threshold
requirements in those sections have the right to require Apollo:
(
i
)
to give, to members of Apollo entitled to receive notice of the meeting, notice of
a resolution which may properly be moved and is intended to be moved at the
meeting, and/or
(
ii
)
to include the business to be dealt with at the meeting any matters
(
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:
(
i
)
(
in the case of a resolution only
)
it would, if passed, be ineffective
(
whether by reason of
inconsistency with any enactment or Apollo’s constitution or otherwise
)
;
(
ii
)
it is defamatory of any person; or
(
iii
)
it is frivolous or vexatious.
Such a request may be in hard copy form or in electronic form, and 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 Apollo not
later than 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.
(
i
)
A copy of the Notice of AGM and the information required by Section 311A Companies
Act 2006 is included on Apollo’s website, www.octopusinvestments.com under
Venture Capital Trusts. Copies of the Directors’ Letters of Appointment, the Register
of Directors’ Interests in the Ordinary shares of Apollo kept in accordance with the
Listing Rules and a copy of the Memorandum and Articles of Association of Apollo
will be available for inspection at the registered office of Apollo during usual business
hours on any weekday from the date of this notice until the AGM, and at the place of
that meeting for at least 15 minutes prior to the commencement of the meeting until
its conclusion.
(
j
)
As at 24 May 2024
(
being the last practicable date prior to the publication of this
Notice
)
Apollo’s issued share capital consists of 846,853,899 Ordinary shares, carrying
one vote each. Therefore, the total voting rights in Apollo as at 24 May 2024 are
843,853,899.
Notice of Annual General Meeting
continued
Octopus Investments
33 Holborn
London EC1N 2HT
0800 316 2295
investorsupport@octopusinvestments.com
octopusinvestments.com