Octopus Titan VCT plc
Annual Report
2024
Octopus Investments
33 Holborn
London EC1N 2HT
0800 316 2295
investorsupport@octopusinvestments.com
octopusinvestments.com
Octopus Titan VCT plc|Annual Report 2024
Octopus Investments’ awards
Titan’s mission is to invest in the people,
ideas and industries thatwillchange theworld.
Octopus Titan VCT plc
(
‘Titan’ or the ‘Company’
)
is managed by Octopus AIF Management Limited
(
the ‘Manager’
)
, which has delegated investment
management to Octopus Investments Limited
(
‘Octopus’ or ‘PortfolioManager’
)
via its investment
team Octopus Ventures.
Find it fast
Strategic report
Key financials 2
Chair’s statement 3
Titan’s objectives 6
How Titan works 7
Portfolio Manager’s review 19
Operating responsibly 35
Section 172 statement 40
Risks and risk management 46
Business review 50
Governance
Board of Directors 53
Corporate governance report 55
Leadership and purpose 57
Division of responsibilities 58
Composition, succession and evaluation 59
Audit, risk and internal control 61
Management Engagement Committee 64
Directors’ remuneration report 65
Directors’ report 68
Financials
Directors’ responsibilities statement 73
Independent auditor’s report 74
Income statement 81
Balance sheet 82
Statement of changes in equity 83
Cash flow statement 85
Notes to the financial statements 86
Investment portfolio 103
Shareholder information and contact details 108
Glossary of terms 112
Directors and advisers 113
Notice of Annual General Meeting 114
Key dates
Interim dividend payment date 29 May 2025
Annual General Meeting 19 June 2025
Half-year results to 30 June 2025 published September 2025
How Titan works
p.7
Portfolio Manager’s review
p.19
Financials
p.73
2 Octopus Titan VCT plc — Annual report and financial statements 2024
Key inancials
Net assets (£’000)
Total value per share
1
Dividends paid in the year
Total return per share
2
Dividend yield %
4
Dividend declared
Total return per share %
3
Loss after tax (£’000) NAV per share
£831,358
2023: £993,744
155.6p
2023: 164.4p
3.1p
2023: 5.0p
£(147,649)
2023: £(149,499)
(8.8)p
2023: (9.5)p
5.0%
2023: 6.5%
(14.1)%
2023: (12.4)%
0.5p
2023: 1.9p
1. Total value per share is an alternative performance measure, calculated as NAV plus cumulative dividends paid since launch, as described in the glossary of terms.
2. Total return per share is an alternative performance measure, calculated as movement in NAV per share in the period plus dividends paid in the period, as described in the glossary of terms.
3. Total return % is an alternative performance measure, calculated as total return/opening NAV, as described in the glossary of terms.
4. Dividend yield is an alternative performance measure, calculated as dividends paid/opening NAV, as described in the glossary of terms.
50.5p
2023: 62.4p
Octopus Titan VCT plc — Annual report and financial statements 2024 3
The Net Asset Value (NAV) per share at 31 December
2024 was 50.5p which, adjusting for dividends paid in
the year, represents a net decrease of 8.8p per share
from 31 December 2023 or a total return of –14.1%.
This further decline in value has been driven by several
factors, including company-specific performance
issues and tougher trading conditions, which have
reduced revenue growth across a range of sectors.
As a result, many companies in the portfolio have
not met performance expectations, leading to lower
valuation multiples being applied compared to those
at recent points of investment. This situation has
been exacerbated by a continued slow private market
fundraising environment, leading to more limited
capital availability. Consequently, companies have
prioritised extending their cash runway, aiming to
achieve profitability or delay fundraising until market
conditions improve. In the short term, this has led to
reduced valuations due to slower growth, but in the
long run, the disciplined focus on sustainable growth
should be beneficial.
With this further decline in NAV, the 5-year tax-free
annual compound return for shareholders is now -3.5%.
Since the high watermark as at 31 December 2021,
Titan’s total return per share has been –39.8% with
which the Board and Manager are, and shareholders
will be, deeply disappointed. The scale of shareholder
dissatisfaction has been made abundantly clear
following the recently conducted survey.
In the 12 months to 31 December 2024, the Company
utilised £137 million of its cash resources, comprising
£30million in new and follow-on investments,
£44million in dividends (net of the Dividend
Reinvestment Scheme (DRIS)), £38 million in share
buybacks and £25million in annual investment
management fees and other running costs. The cash
and corporate bond balance of £184 million at 31
December 2024 represented 22% of net assets at that
date, compared to 20% at 31December 2023.
The total value (NAV plus cumulative dividends paid per
share since launch) at the end of the period was 155.6p
(31 December 2023: 164.4p). Titan’s one-year total return
of -8.8p (-14.1%), five-year total return of -15.6p (-16.4%)
and ten-year total return of 6.7p (6.6%) evidence the
disappointing decline in performance in recent years.
Strategic Review
As shareholders will be aware, in the half-yearly report
issued at the end of September 2024, we announced a
review of strategy to ensure a thorough retrospective
analysis took place and a plan be drawn up for how
the Company can be best structured for sustainability
and improved performance in the future. A significant
amount of work has been undertaken by Octopus and
our appointed external advisers, Smith Square Partners
LLP, across a number of different workstreams. This
includes a detailed analysis of historical investment
performance, ongoing sustainability, the forward-
looking pipeline for realisations, future investment
strategy, investment team resources and, finally,
investment manager’s culture and governance. The
significant performance challenges and the early-
stage nature of much of the portfolio mean that it
will take some time for changes to have an impact on
performance and a longer-term approach to shaping
the future of the Company is needed. We are making
reasonably good progress, and more can be read
about the steps which have been taken in the Spotlight
section on page 7. The response to our shareholder
survey is included on page 24. From this it is clear that
there is widespread and deep dissatisfaction with the
past performance of Titan, both in absolute and relative
terms and an understandable frustration with the
lack of capital growth in recent years. The Board also
acknowledges the recent press coverage, particularly
in respect of shareholders’ views on the fees that Titan
pays. We would like to thank those that participated
in the survey, as well as those that have provided their
feedback to both the Board and Octopus. The Board
wishes to assure shareholders that it is considering the
results and feedback alongside the review.
Titan’s total return for the year to 31 December 2024 was -14.1% with net assets at the end of the
period totalling £831 million.
Chair’s statement
Tom Leader
Chair
4 Octopus Titan VCT plc — Annual report and financial statements 2024
We expect to provide a further update on the review
at, or prior to, our Annual General Meeting (AGM)
on 19June 2025. However, we do not anticipate the
process to be completed by this point, so any proposals
for the future of the Company will likely be put to
shareholders at a later date.
Performance incentive fees
As the 2024 total return has been negative, and total
value per share has declined since 31 December 2021,
no performance fee is payable. To remind you, the
performance fee is calculated as 20% on net gains
above the high-water mark (the highest total value per
share as at previous year ends), which is currently set
as 197.7p as at 31 December 2021. See Note 19 of the
financial statements for further details.
Dividends
Following careful consideration and recognising the
value that shareholders place on receiving tax-free
dividends, I am pleased to confirm that the Board has
decided to declare a second interim dividend of 0.5p
per share (2023: 1.9p per share). This will be paid on
29May 2025 to shareholders on the register as at 25
April 2025. This second interim dividend, in addition to
the 1.2p per share interim dividend paid in December
2024, brings the total dividends declared to 1.7p per
share in respect of 2024. However, this 0.5p per share
dividend is lower than that paid in previous years
because of the ongoing performance challenges,
and dividends are typically a distribution of achieved
performance. Considering dividends paid during 2024
(totalling 3.1p), the total dividend yield for the year is
5%, therefore meeting the Company’s target.
Dividends, whether paid in cash or reinvested under
the DRIS, are always at the discretion of the Board, are
never guaranteed, and are subject to regular review
reflecting the returns generated by the Company,
the timing of investment realisations, cash and
distributable reserves and continuing compliance with
VCT rules.
The Board will consider any further dividends to be paid
in 2025 in the second half of the year at, or around,
the release of the interim accounts for the six months
ending 30 June 2025, subject to Titan’s performance,
both realised and unrealised, improving and, as ever,
Titan holding sufficient cash reserves.
As with the dividend paid to shareholders on 19
December 2024, and in light of the ongoing review
of Titan’s strategy, the Board continues to suspend
the Company’s dividend reinvestment scheme for the
dividend to be paid on 29 May 2025, with the dividend
being paid to shareholders in cash.
Fundraise and buybacks
We were pleased to raise over £107 million in the
fundraise which closed on 5 April 2024. As stated in
the half-yearly review, the Board will decide on the
approach to future fundraising at the conclusion of the
review of strategy.
During the year, Titan repurchased 67 million shares for
£38 million (representing 4.2% of the net asset value as
at 31 December 2023). Further details can be found in
Note 14 of the financial statements. Details of the share
buybacks undertaken during the year can be found in
the Directors’ Report on page 69 and in Note 14 to the
financial statements on page 95.
VCT status
In November 2023, a ten-year extension was
announced to the ‘sunset clause’ (a retirement date
for the VCT scheme), meaning VCT tax reliefs will be
available until 5 April 2035. This extension passed
through Parliament in February 2024 and on 3
September 2024, His Majesty’s Treasury brought the
extension into effect through The Finance Act 2024. The
Board is delighted that this has brought clarity to the
status of VCTs.
Board of Directors
Rupert Dickinson was appointed to the Board
with effect from 1 May 2024 and was elected by
shareholders at the AGM held in June 2024. Rupert has
over 20 years’ experience in the wealth and investment
management industries. We are already benefitting
from his extensive experience.
All the other Directors have indicated their willingness
to remain on the Board, and Jane O’Riordan and Lord
Rockley will be seeking re-election at the AGM.
Portfolio Manager and team
In March 2024, Malcolm Ferguson, Octopus’ lead
Fund Manager for Titan, resigned and Jo Oliver was
appointed as lead Fund Manager and Adviser to the
Board on fund and strategy on an interim basis. In
August 2024, Jo stepped down from this interim role.
We wish to take this opportunity to thank both Jo and
Malcolm for their contributions to the Company and
wish them well for the future. We are pleased that,
despite Malcolm’s resignation, he continues to support
with portfolio management on a contractual basis. The
process to appoint a replacement lead Fund Manager
will commence once the review of strategy iscompleted.
Chair’s statement
continued
Shareholders may be aware that there has been
considerable turnover over the past twelve months in
the Octopus Ventures team, which is responsible for
managing Titan. As part of the on-going strategic
review, Octopus is assessing the team structure, size,
culture and experience to ensure it is aligned with its
future investment strategy proposals. In the interim, the
Octopus Ventures team is receiving additional senior
support from across the business to ensure adequate
resources are available.
AGM and shareholder event
The AGM will take place on 19 June 2025 from
12.00noon and will be held at the offices of Octopus
Investments Limited, 33 Holborn, London, EC1N 2HT.
Full details of the business to be conducted at the AGM
are given in the Notice of AGM on pages 114 to 117.
Shareholders’ views are important, and the Board
encourages shareholders to vote on the resolutions within
the Notice of AGM on pages 114 to 117 using the proxy
form, or electronically at www.investorcentre.co.uk/eproxy.
Shareholders are invited to send any questions they may
have via email to TitanAGM@octopusinvestments.com.
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, as the
Board will be doing.
Currently, we do not anticipate the strategic review
process will have been fully completed by the date
of the AGM. As a result, we will issue a further
communication to shareholders in due course setting
a date for a shareholder event and, if applicable, a
General Meeting at which shareholders will be able to
vote on any proposals for the future direction of the
Company.
Outlook
The further decline in NAV to 31 December 2024 is
extremely disappointing, especially when set against
the backdrop of the recent recovery of some of the
comparable markets and other VCTs. This decline
has been primarily driven by specific portfolio
performance issues and sectoral downturns, leading
to cash constraints exacerbated by a challenging
fundraising environment. Some portfolio companies
attempted to raise funds but were unsuccessful,
resulting in several being placed into administration
or accepting acquisition offers on unfavourable terms.
More details on these disposals can be found in the
Portfolio Manager’s review on page19. Others had to
complete funding rounds at lower valuations or in ways
that negatively impacted the value of the Company’s
shareholding.
The Company returned £29 million in cash proceeds
from exits in 2024, in addition to £12.4 million
distributed from Zenith Holding Company to Titan.
This is a disappointing outcome as it is below the
level achieved in 2023, and does not accomplish the
Company’s long-term sustainability target. Despite
the Manager’s initiatives to increase the number of
realisations of portfolio companies and return cash
proceeds to Titan, as discussed on page 23, we have
not yet seen any profitable realisations in 2025.
This sustained focus on achieving regular liquidity
is an important step towards ensuring the ongoing
sustainability of the Company.
Despite this, the Board retains a degree of optimism
about the potential of some of the companies within
what is undoubtedly a diversified portfolio, with over
135 companies spanning a wide range of sectors,
business models and investment stages. Furthermore,
Titan’s portfolio remains well funded with circa 42% of
the portfolio NAV being comprised of companies not
expecting to need further funding. This figure rises to
67% when including those companies with more than
12months’ cash runway.
I would like to conclude by thanking both the Board and
the Octopus team on behalf of all shareholders for their
hard work during this very challenging period.
Tom Leader
Chair
28 April 2025
Chair’s statement
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 5
6 Octopus Titan VCT plc — Annual report and financial statements 2024
Titan’s objectives
Titan is managed by Octopus Ventures, known for
its expertise in identifying and supporting innovative
businesses some of which have grown to become
household names, including Depop, Skin+Me and
Zoopla. The team aims to invest in early-stage
companies that offer the potential of returning
significant multiples of the initial investment.
The VCT benefits from the team’s rigorous investment
process and specialist expertise in the sectors in which
they invest. Octopus Ventures has historically engaged
with thousands of potential investment opportunities
each year and go on to invest in only around 1% of
these. This means they can be highly selective and pick
only those they believe offer the most potential.
Octopus Ventures can back companies through
multiple funding rounds. This is hugely valuable and
attractive for entrepreneurs looking for a partner who
can support their long-term growth ambitions.
Practical support, guidance and specialist knowledge
are all things an early-stage company needs to
accelerate its growth.
The investment team is supported by a dedicated
People and Talent team. They offer direct support,
expertise and access to programmes and platforms to
help the investee company management teams scale
their businesses. This offers a competitive advantage
when Octopus Ventures is looking to secure the chance
to invest in the best smaller companies in the market.
Titan is the largest VCT in the market, with over £830
million of funds under management and a diverse
portfolio of over 135 companies.
Read more about cash deployment
and creating value for the long term on
pages 17 and 18
1. Invest in pioneering companies
Titan’s investment strategy aims to back the next
generation of entrepreneurs leading technology and
tech-enabled businesses across seven dedicated areas
– Health, Fintech, Deep tech, Consumer, Business-to-
Business (B2B) software, Bio and Climate. Over the last
nine to twelve months, Titan has been looking to build
value in its existing portfolio, as the greatest returns
are expected to be driven by these holdings. More can
be read about this in the Portfolio Manager’s review on
page 19.
2. Long-term sustainability of the VCT
Historically, Titan has targeted:
•
maintaining a Net Asset Value
(
NAV
)
per share of at
least 90p after the payment of dividends;
•
generating sufficient cash from realisations within
the portfolio to cover share buybacks, dividends and
operating costs; and
•
that capital raised from fundraising is predominantly
utilised for new and follow-on investments.
These objectives are not currently being met and the
review of strategy has been assessing what course of
action is required to achieve long-term sustainability.
3. Regular tax-free dividend
Titan targets a regular dividend in each financial year of
5% of the NAV per share at the start of that financial year,
with the potential to pay special dividends when there are
significant gains from the sale of portfolio holdings. The
Board has declared dividend of 0.5p per share. This will be
paid on 29 May 2025 to shareholders on the register as at
25 April 2025.
Octopus Titan VCT plc — Annual report and financial statements 2024 7
Spotlight on the review of strategy
How Titan works
On 30 September 2024, the Board, in conjunction with the Manager, announced a strategic review. This was catalysed by the ongoing challenges in the early-stage venture
market to which the Company is exposed and the resultant performance issues faced. Since this date, the Board and Manager have undertaken numerous actions to identify
the areas of focus and potential changes which could be made to drive the best performance for the Company and outcome for shareholders. Below is a summary of the steps
taken to date by both the Board and Manager.
Sep 2024
Oct 2024
Nov 2024
Dec 2024
Jan 2025
Feb 2025
Mar 2025
Apr 2025
Investment Manager’s actions
Establish internal
review committee
comprised of different
areas of the business.
Co-ordinating
information packs for
the external advisers.
Recruitment process
for senior Portfolio
Management roles
commences.
Internal review
committee submits
scope of work to the
Board. More can be
read about the six
work streams on the
following page.
Internal review
committee submits
information pack on
sustainability and
fund performance
workstreams to the
Board.
Survey results analysed.
External specialists
commence review of
Consumer Duty.
Internal review
committee submits
information pack on
team and culture and
risk and governance work
streams to the Board.
Internal review
committee presents first
part of the go-forward
investment strategy and
further sustainability
analysis and metrics.
Results of Consumer
Duty Review analysed.
Internal review
committee presents
follow up detail on the
go-forward investment
strategy, as well as
proposals for future
team and resourcing
plan.
Proposal submitted
to Board regarding
ongoing fees.
Four Board meetings
Two Board meetings
One Board meeting Two Board meetings One Board meeting Two Board meetings Two Board meetings
Titan VCT Board’s actions
Announcement of
review of strategy.
External adviser
selection process
concluded and terms
agreed.
External advisers,
Smith Square Partners,
appointed.
Board reviews Octopus’
scope of work.
Shareholder and adviser
survey launched (more
information available on
the results on page 24).
Board reviews information
pack on sustainability
and fund performance.
Board reviews external
advisers’ analysis of
performance and
benchmarking.
Board reviews external
advisers’ progress
report including
analysis of the
realisations pipeline.
Board reviews
information pack on
team and culture and
risk and governance
work streams.
Survey results
analysed.
Board reviews
go-forward strategy and
sustainability analysis
and metrics.
Board reviews external
advisers’ progress
report.
Results of Consumer
Duty Review analysed.
Unaudited NAV
released with
updateon progress
ofreview.
External advisers’
interim report shared
with the Board.
Annual report
published.
Board considers
proposal on future
team and resourcing
strategy and fees.
Board commences
fee negotiations with
Octopus.
8 Octopus Titan VCT plc — Annual report and financial statements 2024
Spotlight on the review of strategy
Octopus Ventures’ new CEO
How Titan works
Summary of the Manager's internal review workstreams:
1. Fund performance | 2. Fund strategy | 3. Sustainability | 4. Team & culture | 5. Consumer Duty | 6. Risk & governance
Working to understand
the most appropriate
investment and
divestment strategy
looking at past
performance metrics,
benchmarks and future
objectives.
Investigating potential
future options for Titan’s
strategy which could drive
improved performance.
Some potential options
were included in the
shareholder survey to
canvas views.
Working on past
performance and
future forecasting to
ensure Titan operates
sustainably, returning
funds through
realisations.
Reviewing the team
structure, size, culture
and experience (past
and present) and how it
maps to the successful
management of the
Company. Full Octopus
Ventures strategy refresh
in line with new Chief
Executive Officer (CEO)
Erin Platts joining.
External consultants
appointed to carry
out a review of
Consumer Duty.
This is to understand
shareholders’ expected
outcomes and
assessing how the
Company has delivered
against them.
Work led by the
compliance team
updating Titan’s risk
register (more can be read
about this on page 46).
Review and enhancement
of governance processes
and procedures, where
relevant.
Erin Platts joined Octopus Ventures as CEO in January
2025.
Previously, she held the role of CEO at HSBC Innovation
Banking UK, formerly Silicon Valley Bank UK &
EMEA. Over two decades in leadership roles with the
institution, she established Silicon Valley Bank UK as
a standalone, regulated subsidiary before leading the
organisation through the transition period following its
sale to HSBC in 2023, scaling operations to over 800
people, across six countries and into the market leading
position across the sector.
With a career spent in the US, UK and European tech
ecosystems, Erin is an active and vocal spokesperson,
championing Diversity, Equity and Inclusion through
partnerships with organisations including Tech Nation,
Founders Forum and the Newton Venture Program.
continued
What’s next
1. Final Smith Square Partners report presented to the
Board.
2. Finalise fee proposal, as well as review of the
Investment Management Agreement and Non-
Investment Services Agreement.
Octopus Titan VCT plc — Annual report and financial statements 2024 9
Climate
Backing the people and businesses
that are powering planet-friendly
progress by creating a circular economy,
decarbonising global energy systems
and infrastructure, reducing energy
consumption, greening finance,
protecting and developing ecosystems,
and erasing our historical footprint
through carbon removal technologies.
Consumer
Redefining how we live, work and play.
Backing the pioneers who use tech to
dramatically improve consumers’ lives.
They’re obsessed with their customers’
happiness, and dedicated to delivering
authentic, unique experiences.
Bio
Backing trailblazing founders creating
a bioscience-led revolution. Advances
in biosciences and molecular biology,
combined
with leaps forward in
computer power, have laid the
foundations for a revolution across
sectors from therapeutics to energy.
Deep tech
Advancing technology touches every
aspect of our lives: agriculture, education,
health, commerce, communication.
Backing the founders who are solving
de
ep technical problems across every
industry in ways that will transform our
world. They’ve pioneered new business
models to create opportunities and invent
entirely new markets.
Health
Backing the businesses and people
at the most ambitious frontiers of
medical science. Supporting health tech
startups who uncover the unknown. The
people doing things we didn’t think were
possible, confronting taboo issues and
breaking down social boundaries.
B2B software
Supporting industries through
digitisation and automation. Advances
in B2B software have an impact on
every industry, bringing everyone closer
to more efficient andsustainable ways
of working.
Fintech
Backing companies that are redefining
financial services, driving us towards
a future of safe, efficient transactions
that occur faster than the speed of
thought.
Titan’s portfolio
Titan’s portfolio spans seven investment areas of focus across different stages of development. Below you can read more about each area of focus and some portfolio
companyexamples.
Investment focus
How Titan works
10 Octopus Titan VCT plc — Annual report and financial statements 2024
Titan’s portfolio
The pie charts below illustrate Titan’s investment focus by portfolio value
asapercentage and by number of portfolio companies.
Fintech
Deep tech
Health
Bio
B2B software
Climate
Consumer
Portfolio value
(%)
by investment
focus
24%
20%
20%
14%
14%
4%
4%
Number of
companies
by investment
focus
26
25
17
23
5
10
12
continued
Investment focus continued
How Titan works
1 The appropriate strategy to maximise value in line with shareholder objectives is being considered as part of the strategic review.
Octopus Titan VCT plc — Annual report and financial statements 2024 11
Investment strategy
15-30
early-stage investments
per year
£1m-
£10m
initial investment
fromTitan
Pioneers
with global
ambitions
Return
significant multiples on
initial investment
Invest
further
where we can
enhancereturns
Aiming
for a 20%
initial equity stake across
all Octopus Ventures
mandates
What and who Titan has historically invested in:
As an investment team, this has typically meant
1
:
Talented and
ambitious team
Big market
opportunity
Innovative
technology
Rapid pace
of growth
1 2 3 4
How Titan works
NAV
breakdown
Top 20 investments
The value of the top 20 portfolio
investments
Other investments
Value of remaining portfolio investments
Cash and cash equivalents
1
Value of cash in bank, money market
funds and corporate bond portfolio
Other
Value of debtors less creditors
22%
1%
1
For the purpose of fund management, the corporate bond portfolio
is included as cash and cash equivalents. Cash, for the purpose of the
Cash Flow Statement, comprises of cash at bank and money market
funds.
47%
30%
12 Octopus Titan VCT plc — Annual report and financial statements 2024
How Titan works
What’s in a share
The net asset value (NAV) is the combined value
of all the assets owned by Titan after deducting
the value of its liabilities. The NAV is comprised
of different elements, as shown in the diagram.
77% is derived from the value of the underlying
investments as at 31 December 2024. 22% is held as
highly liquid cash in the bank, money market funds
and corporate bond portfolios, which is required for
investments. 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.
By owning shares in Titan you gain access to a portfolio ofover 135 early-stage
companies with high-growth potential operating across a diverse range of sectors.
Read more in the Financials
section on pages 73 to 102.
How Titan works
Octopus Titan VCT plc — Annual report and financial statements 2024 13
Measuring our performance
Titan’s objective is to provide shareholders with attractive dividends and potential capital appreciation by investing in a broad spread of unquoted UK companies which meet
the relevant criteria for VCTs. The Board has identified eight key performance measures to assess Titan’s success in meeting these objectives, some of which are classified as
alternative performance measures (APMs) in line with Financial Reporting Council (FRC) guidance. Please see the Glossary of Terms on page 112 for further details.
The NAV per share of Titan is the sum of the underlying assets less the liabilities of
Titan, divided by the total number of shares in issue. Over the long term, Titan’s target
is to maintain a NAV per share of at least 90p after the payment ofdividends.
Performance over the year
The NAV per share has decreased from last year’s value of 62.4p to 50.5p. We recognise
that it is a long-term objective to maintain a NAV per share of at least 90p after the
payment of dividends, and the Company is not achieving this currently. The Octopus
Ventures team are working to increase the NAV per share back above 90p through
continued growth in the underlying portfolio. The decrease in valuation during 2024 has
been driven by a combination of the continuation of a tougher trading and fundraising
environment, some externally led funding rounds into portfolio companies, which have
had dilutive effects on Titan’s shareholding, company specific performance issues,
and a slowing of growth across the portfolio as companies optimise for efficiency and
profitability (where possible).
Total return per share 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 Titan, 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. Titan’s target is for the total return per share to increase by at least 5% per
annum, covering the target annual dividend.
Performance over the year
As previously considered, the NAV per share has decreased from last year’s value of
62.4p to 50.5p. Adding back the 3.1p of dividends paid in the year, this is a decrease of
8.8p or 14.1%. The Octopus Ventures team are working to improve total return per share.
This decrease is mainly driven by a downward valuation movement in the portfolio, as
detailed to the left on this page.
NAV per share Total return per share
(
APM
)
1 2
How Titan works
2024
50.5p
2023
62.4p
2024 change
-19.1%
2022
76.9p
2024
-14.1%
-8.8p
2023
-12.4%
-9.5p
-22.5%
-23.8p
2022
14 Octopus Titan VCT plc — Annual report and financial statements 2024
2024
5.0%
3.1p
2024 change
-1.5%
-1.9p
2023
6.5%
5.0p
2022
4.7%
5.0p
Titan targets a regular dividend paid in each financial year of 5% of the NAV per share
at the start of that financial year, with the potential to pay special dividends when
there are significant gains from the sale of portfolio holdings.
Performance over the year
Ordinary dividends of 3.1p were paid in the year in line with the Dividend policy,
targeting a regular dividend of 5% of the NAV per share at the start of the financial
year. Therefore, for the financial year ending 31 December 2024, the Company has met
its objective of achieving a 5% dividend yield. The decrease since 2023 is due to the
change in Dividend policy as announced in the 2023 interim report.
The ongoing charges ratio has been calculated using the Association of Investment
Companies (AIC) recommended methodology and excludes irrecoverable VAT,
exceptional costs, trail commission and performance fees. This is capped at 2.5%.
2.1%
2024 change
+0.1%
2.0%
1.9%
Performance over the year
Total ongoing charges as a percentage of average net assets has increased. The decline
in net assets over the period has caused management fees, as a percentage of average
net assets, to increase to 2.1%. These fees are calculated in advance at 2% of the
opening net assets each quarter. As a result, the decrease in net assets has led to these
fees rising to 2.1% of the average net assets for the year. We expect this to return to 2%
in 2025. See Note 19 for more details on the calculation of management fees.
Dividends per share paid in the year Total ongoing charges
(
APM
)
3 4
continued
Measuring our performance
How Titan works
0.3%
0.4%
0.4%
2022
2023 2024
Management Fees
Other expenses
Octopus Titan VCT plc — Annual report and financial statements 2024 15
Titan must comply with VCT legislation set out by HMRC. Key requirements are to
maintain at least an 80% qualifying investment level (Titan targets at least 90%)
and investing at least 30% of all new funds raised within 12 months of the end of
theaccounting period in which the shares were issued.
2024
90%
2024 change
0%
2023
90%
2022
100%
Performance over the year
At the end of the period, 90% by value (as measured by HMRC rules) of Titan’s
investments were in qualifying shares or securities. The qualification level has been kept
above the 80% threshold by the continued deployment of funds into qualifying assets,
and investments made from cash raised three years ago now being included in the
calculation of the 80% qualifying investment level. The 30% test has also been met for all
relevant years.
There are restrictions on the amount of capital that can be distributed back to
shareholders in the form of dividends and share buybacks. Restrictions are placed on
these reserves by both the Companies Act and VCT regulations. Titan aims to have
sufficient reserves to continue to fund dividends and buybacks. The table shows the
amount available under the Companies Act as at 31 December 2024.
2024
830m
2024 change
-7.3%
2023
£895m
2022
£797m
Performance over the year
The Companies Act distributable reserves have decreased during the year due to
losses arising from unrealised fixed asset valuation downgrades, which have impacted
the capital reserve unrealised.
We continue to have sufficient reserves under the VCT regulations to fund forecast
dividends and buybacks, and this is reviewed ahead of any distribution from Titan.
continued
Qualifying % under VCT rules
(
APM
)
Distributable reserves
5 6
Measuring our performance
How Titan works
Management Fees
1 For the purpose of fund management, the corporate bond portfolio is included as cash and cash equivalents. Cash, for the purpose of the Cash Flow Statement, comprises of cash at bank and money market funds.
16 Octopus Titan VCT plc — Annual report and financial statements 2024
The cash and cash equivalents balance includes cash at bank, funds in money market
accounts, and corporate bonds. Titan has historically aimed to have sufficient cash to
fund investments, dividends, buybacks, management fees, other running costs and
a performance fee,when applicable, over a 12-month period. This is under review as
part of the review of strategy, as set out on page 8.
2024
£184m
2023
£203m
2024 change
-9.3%
2022
£179m
Performance over the year
The movement in cash and cash equivalents over the year was driven by £67million
of funds allotted and disposals of £41 million in FY 2024, offset by deployment of
£30million into new and follow-on investments, £44 million in dividends (net of DRIS),
£38million in share buybacks, £25 million in annual investment management fees
and other running costs. This movement can be seen in the cash deployment bridge
on page 17.
The Board considers that it is important that Titan can cover its cash outflows without
fundraising over the medium term and so considers a sustainability metric which is
calculated as the proportion of Titan’s cash outflows that are covered by realisations
over the preceding three years. Such outflows of the VCT include the share buybacks,
ordinary dividends and operating costs in the year. Titan’s target is that 100% of
outflows are covered by realisations. These outflows are illustrated on page 17. The
sustainability objective is forming part of the review of strategy, as set out on page 8.
2024
36%
2023
77%
2024 change
-40.3%
2022
74%
Performance over the year
With £29 million returned in cash proceeds to the Company from exits in 2024, in
addition to £12.4 million distributed from Zenith Holding Company to Titan (as shown
on page 22), the decrease in the sustainability percentage for Titan is primarily due
to a reduction in realisations achieved in 2024. This is in contrast to the significant
proceeds from profitable exits in 2021 which are no longer included in the trailing
3-year calculation.
Cash and cash equivalents
1
Sustainability % of Titan
(
APM
)
7 8
continued
Measuring our performance
How Titan works
Cash deployment
The following graph shows Titan’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, funds in money market accounts, and corporate bonds.
Cash inflows Cash outflows
0
150
100
50
£m
200
350
250
300
(44)
(38)
(19)
(5)
(30)
Dividends Buybacks Management
fee
Other
costs
New and
follow-on
investments
Cash as at
31 December
2023
184
Cash as at
31 December
2024
Disposal
proceeds
Fundraise Money market
funds income
Gain on
bonds
5
4
41
203
67
Octopus Titan VCT plc — Annual report and financial statements 2024 17
Cash and value movements during the year
How Titan works
0
40
30
20
10
60
70
NAV per share Increase in NAV per share
Decrease in NAV per share
50
NAV as at
31 December
2024
NAV
before
dividends
Other
running costs
Management
fee
Unrealised
fixed asset
investments
valuation
downgrades
Unrealised
fixed asset
investments
valuation
uplifts
DividendsNet realised
gain on
disposal of
fixed asset
investments
Investment
income and
corporate bond
revaluations
NAV as at
31 December
2023
3.4
0.3
0.6
(11.6)
(1.1)
(0.4)
53.6
(3.1)
50.5
NAV per share (p)
62.4
Titan total value movement
The following graph shows the increases and decreases
contributing to the movement in the NAV per share
during the year.
DRIS
Titan had adopted a DRIS under which shareholders
were given the opportunity to reinvest future dividend
payments by way of subscription for new shares.
Subject to a shareholder’s personal circumstances,
shares subscribed for under the Dividend Reinvestment
Scheme should benefit from VCT tax relief. As stated
in the Chair’s statement, the DRIS was suspended in
respect of the interim dividend paid on 19 December
2024 and will remain so until further notice.
18 Octopus Titan VCT plc — Annual report and financial statements 2024
Cash and value movements during the year
continued
How Titan works
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.
Focus on performance
The NAV of 50.5p per share at 31 December 2024 represents a decrease in NAV of 8.8p per share versus a NAV of 62.4p per share as at 31 December 2023, after adding back
dividends paid during the year of 3.1p (2023: 5p) per share, a negative total return per share of 14.1% in the year.
The performance over the five years to 31 December 2024 is shown below:
Year ended
31 December 2020
Year ended
31 December 2021
Year ended
31 December 2022
Year ended
31 December 2023
Year ended
31 December 2024
NAV, p 97.0 105.7 76.9 62.4 50.5
Cumulative dividends paid, p 81.0 92.0 97.0 102.0 105.1
Total value, p 178.0 197.7 173.9 164.4 155.6
Total return
1
7.1% 20.3% (22.5)% (12.4)% (14.1)%
Dividend yield
2
5.3% 11.3% 4.7% 6.5% 5.0%
1. Total return % is an alternative performance measure, calculated as total return/opening NAV.
2. Dividend yield is an alternative performance measure, calculated as dividends paid/opening NAV.
Octopus Titan VCT plc — Annual report and financial statements 2024 19
Portfolio Manager’s review
We are deeply disappointed by the negative total
return of 14.1% in 2024 which has been driven by a
decline of £193 million across 72 companies. The
businesses that contributed most significantly to this
decline were Pelago, Many Pets and Big Health. Whilst
these companies continue to look to scale, they have
underperformed the high expectations set at their
last funding round, and so have seen their valuations
decline.
These three valuation movements account for around a
third of the total decline in NAV over the twelve-month
reporting period.
Octopus Ventures believes that many of the companies
which have seen decreased valuations in the period
have the potential to overcome the issues they face and
get their growth plans back on track. Octopus Ventures
continues to work with them to help them realise their
potential. In some cases, the support offered could
include further funding to ensure a business has the
capital it needs to execute on its strategy. Our in-house
Talent team is being utilised to build high-performing
teams and support on key recruitment initiatives. This
team, as well as our expert network of consultants,
support companies on project work and can also work
part-time with the businesses.
More positively, 39 companies saw an increase in
valuation in the period, delivering a collective increase
in valuation of £56 million. These valuation increases
reflect businesses which have successfully concluded
further funding rounds at increased valuations, grown
revenues or met certain important milestones. Notable
strong performers in the portfolio include Legl, Taster
and Katkin – all of which have increased their market
reach through new product launches. These strong
performers demonstrate that there are opportunities
available for companies to thrive, and Titan’s diverse
portfolio allows different routes for each company to
succeed in their market.
The gain on Titan’s uninvested cash reserves was
£9.2million in the year to 31 December 2024, primarily
driven by a fair value movement of £4.4 million in the
corporate bond portfolio and a return of £4.2million on
the money market funds. The objective for the money
market funds is to earn appropriate market rates on
highly liquid treasury holdings, with limited risk to
capital.
20 Octopus Titan VCT plc — Annual report and financial statements 2024
Portfolio Manager’s review
continued
0
80
160
Oct
09
Oct
08
Oct
10
Oct
11
Oct
12
Oct
13
Oct
14
Oct
15
Oct
16
Oct
17
Oct
18
Dec
19
Dec
20
89.9
97.1
96.9
95.0
127.9
137.7
148.9
154.7
158.9
162.4
164.1
171.2
178.0
Dec
21
197.7
Dec
22
173.9
Dec
24
Dec
23
164.4
155.6
Total value (p)
NAV per share Cumulative dividends
40
120
200
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Titan total value growth from inception
The graph below shows the performance of Titan since 31 October 2008 (Titan’s first full year) in
NAV, dividends paid, and NAV plus cumulative dividends paid (total value). The table highlights
the compound annual growth rate across different holding periods.
Despite the reduction in NAV in the year, the total value has seen an increase since the end of
Titan’s first year, as shown on the graph, from 89.9p to 155.6p at 31 December 2024. Since Titan
launched, a total of over £557 million has been distributed back to shareholders in the form of
tax-free dividends. This includes dividends reinvested as part of theDRIS.
Holding period Total return
Tax-free compound
annual growth rate
Since October 2008 73.1% 3.4%
10 years 6.6% 0.6%
5 years (16.4)% (3.5)%
1 year (14.1)% (14.1)%
Octopus Titan VCT plc — Annual report and financial statements 2024 21
Portfolio Manager’s review
continued
Disposals
Disposals and deferred proceeds have returned £29
million in cash during the period. In addition, £12.4
million was distributed from Zenith Holding Company to
the Company.
Exits
In June, Taxfix (a European focused tax return technology
platform) acquired TaxScouts, for a combination of cash
and equity, which has allowed it to enter the UK market.
As a result, Titan now holds shares in Taxfix.
In July, Foodsteps was acquired by Registrar Corp (a
provider of regulatory and compliance software for the
food, cosmetic and life sciences industry). This transaction
was also for a combination of cash and equity and has
offered Registrar Corp access to Foodsteps’ global market
platform of over 32,000 companies in 190 countries.
In November, Cobee was acquired by Pluxee Group (an
employee benefits and engagement platform) as part
of its strategic growth plan. Pluxee is a global leader
in employee benefits and engagement, operating in
31countries with over 5,000 employees. Pluxee is uniquely
positioned to support Cobee’s continued growth.
In November, nCino (a cloud-based software company
that provides a platform for financial institutions to
manage their business lines) acquired FullCircl. This will
enhance nCino’s data and automation capabilities and
allow it to expand its reach across the UK and Europe.
In December, Behavox (a leading provider of AI powered
archiving, compliance and security solutions) acquired
Mosaic Smart Data.
Partial exits
Two partial exits completed in October with Neat (an
embedded insurance platform that enables merchants
to offer tailored insurance bundles to their customers
at competitive rates) completing a €50 million Series
A funding round, and Vitesse (a global domestic
settlement and liquidity management system to hold
funds and execute cross-border payments) completing
a $93 million Series C investment round. As part
of both of these rounds, Titan sold a portion of its
shares. We are pleased to have realised some value for
shareholders in these transactions, but also excited to
maintain a holding in the companies and to be able to
continue to support their growth journeys.
Deferred proceeds
In the year, Titan also received deferred proceeds
from the sale of Calastone (to The Carlyle Group in
2020) which was held via Octopus Zenith Holding
Company, iSize (to Sony Interactive Entertainment in
2023), Conversocial (to Verint), Glofox (to ABC Fitness),
Comma (to Weavr) and Foodsteps (to Registrar).
Exits at a loss
There have been four disposals made at a loss: Titan
sold its remaining shares in Cazoo, which was listed on
the New York Stock Exchange, Unmade was acquired
by High-Tech Apparel, and Titan’s shares in Appear
Here were converted to deferred shares and divested,
as there was not seen to be a chance of recovery of any
funds. Vinter was acquired by Kaiko (a leading provider
of cryptocurrency market data, analytics and indices)
for equity. As a result, Titan now holds shares in Kaiko,
which are currently valued below Titan’s initial cost of
investment, but these will be subject to re-valuation
at least twice annually as per our normal process. In
aggregate, these losses generated negligible proceeds
compared to an investment cost of £19 million.
Companies placed into administration
Unfortunately, Audiotelligence, Stackin (now fully dissolved),
Contingent, Phoelex, Excession, Dead Happy, Pulse Platform
and Allplants were placed into administration having all been
unsuccessful in securing further funding and having explored
and exhausted all available options. In aggregate, the
investment cost of the companies placed into administration
totalled £26 million.
In the year to 31 December 2024, Third Eye and
LifeBook were fully dissolved having been placed into
administration in previous reporting periods.
The underperformance of a portfolio company is always
disappointing for Octopus and shareholders alike, but it
is an inherent characteristic of a venture capital portfolio,
and we believe the successful disposals will continue to
outweigh the losses over the medium to long-term.
Year ended
31 December 2020
Year ended
31 December 2021
Year ended
31 December 2022
Year ended
31 December 2023
Year ended
31 December 2024 Total
Disposal proceeds
1
(£'000) 23,915 221,504 62,213 45,637 41,432 394,701
1. This table includes cash and retention proceeds received in the period.
22 Octopus Titan VCT plc — Annual report and financial statements 2024
Portfolio Manager’s review
continued
DRIFT Energy: Designing sailing vessels and
routing algorithms required to capture deep
water wind energy and convert it into onboard
hydrogen gas for transportation back to shore.
ExpressionEdits: Using a proprietary AI
algorithm to design DNA sequences and
intronization technology to enhance the
expression of proteins in mammalian cells.
Forefront: Developing a tuneable Radio
Frequency Front-End (RFFE) module for mobile
devices which is smaller, cheaper, and more
flexible than currently available products sold.
LabGenius: A next-generation platform
leveraging machine learning to develop novel
therapeutic antibodies.
Manual: Provides innovative treatments for a
range of health conditions.
Remofirst is an Employer of Record (EOR) and
compliance platform that allows companies to
hire and pay employees globally.
SWiiPR: Developed a digital payments platform
specifically for the airline industry.
Fintech
Deep tech
Bio
Climate
As explained in the half-yearly report, the Octopus
Ventures team is focused on improving performance
from the existing portfolio and driving improved returns
to shareholders. Given Titan’s scale, the greatest returns
are expected to be driven by its existing, largest holdings.
Over the last nine months, Titan has focused on building
value in its existing portfolio, allowing capital and time to
be prioritised on existing companies. No term sheets for
new investments have been signed since the summer of
2024. The five follow-on investments which completed
in the second half of 2024 have all increased in value
in the December valuation round, on average seeing
an increase of 10%. We believe that this focus will drive
positive future NAV performance as these portfolio
companies are more established, so have a greater
potential to secure further investment, or are closer to an
exit.
New and follow-on investments
Titan completed 8 new investments and made 14
follow-on investments in the reporting period. Together,
these totalled £30 million (made up of £19 million into
new companies and £11 million invested into the existing
portfolio). For a full list of investments which completed
in the year, please refer to the investment portfolio on
page 103.
Please see a summary of some of the new investments
we made in the year.
Health
Octopus Titan VCT plc — Annual report and financial statements 2024 23
Portfolio Manager’s review
continued
Shareholder survey results
Octopus regularly seeks feedback from Titan's investor and
adviser base either through local Business Development
Managers or after webinars with the Investment
Managers. Considering the ongoing review of Titan's
strategy, which is looking at a wide range of areas such
as investment strategy, fundraising and dividend policies,
Octopus and the Board wanted to give investors and
advisers an extra opportunity to share feedback and help
shape the future strategic direction of Titan. In conjunction
with an external research firm, between December 2024
and January 2025, Octopus surveyed Titan’s investor
and adviser base to try to better understand investors’
priorities, areas of concern and opportunities which may
be of interest.
We were pleased to see significant engagement, having
received over 3,000 responses from investors and advisers.
As stated in the Chair's statement, the results emphasise
that the greatest areas of dissatisfaction are around past
performance and the capital growth opportunity, as
highlighted to the right and on the next page. Octopus and
the Board share investors’ frustration with the recent poor
performance, and have been reviewing Titan's investment
strategy with the aim to improve shareholder returns. The
Board intends to communicate to investors any strategic
changes once they are agreed in due course.
To understand investors' priorities when making their
investment decision we asked the following:
When you first chose to invest in Titan VCT, how important were the following factors?
The results were as follows in order of importance:
1
Tax reliefs available on your investment (income tax relief, tax free dividends and tax free capital gains)
2
5% annual target dividend
3
Capital growth opportunity
4
Past performance of fund
5
Access to early-stage, unlisted tech enabled companies with high growth potential
6
Ability to sell your shares back to the VCT via the share buyback facility
7
Size of fund
8
Fees and charges
24 Octopus Titan VCT plc — Annual report and financial statements 2024
Portfolio Manager’s review
continued
Survey
Results
Portfolio Manager’s review
continued
Octopus asked investors to rank their level of satisfaction against each of the top eight factors and the results
were as follows:
Survey results based on responses from 1,093 direct investors and 2,195 advised investors, does not include
responses from advisers.
Octopus Titan VCT plc — Annual report and financial statements 2024 25
Satisfied
Dissatisfied
Neutral or not sure
5% annual target dividend
2
50% 22%
Capital growth opportunity
Ability to sell your shares back to the VCT via the share buyback facility
3
6
18%
29%
60%
8%
Past performance of fund
Size of fund
4
7
21%
34%
52%
6%
Access to early-stage, unlisted tech enabled companies with high growth potential
Fees and charges
5
8
39%
22%
10%
18%
Tax reliefs available on your investment
1
88%
2%
Survey
Results
Portfolio Manager’s review
continued
26 Octopus Titan VCT plc — Annual report and financial statements 2024
Valuations
Titan’s unquoted portfolio companies are valued in
accordance with UK GAAP accounting standards and
the International Private Equity and Venture Capital
(IPEV) valuation guidelines. This means we value the
portfolio at Fair Value, which is the price we expect
people would be willing to buy or sell an asset for,
assuming they had all the information available that
we do, are knowledgeable parties with no pre-existing
relationship, and that the transaction is carried out
under the normal course of business.
The pie charts here illustrate the split of valuation
methodology (shown as a percentage of portfolio value
and number of companies). ‘External price’ includes
valuations based on funding rounds that typically
completed by the year end or shortly after the year end,
and exits of companies where terms have been issued
with an acquirer. ‘External price’ also includes quoted
holdings, which are held at their quoted price as at the
valuation date. As at 31 December 2024, Titan only held
one quoted holding. ‘Multiples’ is predominantly used
for valuations that are based on a multiple of revenues
for portfolio companies. Where there is uncertainty
around the potential outcomes available to a company,
a probability-weighted ‘scenario analysis’ is considered.
For further information please see Note 10 in the notes
to the financial statements.
17%
53%
16%
14%
25
33
30
25
25
External price
External price
Multiples
Multiples
Scenario analysis
Milestone analysis
Scenario analysis
Milestone analysis
Write off
Valuation
methodology
by value
Valuation
methodology
by number of
companies
Octopus Titan VCT plc — Annual report and financial statements 2024 27
Portfolio Manager’s review
continued
https://www.manual.co/ https://legl.com/
Making high-quality care more accessible
and stigma-free
Revolutionising Legal Services with AI and
Data-Driven Insights
MANUAL provides innovative treatments for
a range of conditions, from hair loss and low
testosterone to weight management and
diagnostics.
With over 800,000 patients served across the
UK and Brazil, MANUAL continues to expand
its impact. The company's weight loss brand,
Voy, has helped over 70,000 people lose weight.
In 2024, MANUAL acquired Menopause Care
– the UK’s second largest menopause clinic –
furthering its mission to support underserved
areas of health.
Following the company's £29 million Series B
raise in 2024, the company is accelerating its
growth, with a 140% revenue Compound Annual
Growth Rate (CAGR) since 2019. With this
investment, MANUAL is scaling its reach and
pioneering new healthcare solutions, ensuring
more people get the treatments they need to
improve their quality of life.
•
Nearly 90% of men do not seek help unless
they have a serious problem
•
Served more than 800,000 patients to date
Legl delivers a world-class client
experience for UK law firms by reducing
risk, improving cash flow, and enabling
them to bill and collect payments faster.
With actionable client intelligence,
their customers are empowered to
make smarter decisions and drive
businessgrowth.
By leveraging cutting-edge technology
and data insights, Legl creates seamless
onboarding experiences and superior
payment processing capabilities. Beyond
onboarding, they provide intelligence
and audit functionality to help firms
manage risk intelligently in a complex
and ever-changing environment. Its
embedded finance stack, which has
been built specifically for law firms,
makes collecting payments, reducing
debt, and fostering exceptional client
relationships effortless. In turn, providing
a step-change for internal cash flow and
treasury management.
•
Helped firms manage risk for
over one million clients
•
Processed over $500 million in
payments
Case studies
28 Octopus Titan VCT plc — Annual report and financial statements 2024
Portfolio Manager’s review
continued
https://www.bondaval.com/ https://taster.com/
Transforming non-payment risk protection Food innovators redefining quick-service dining
Founded in 2020, B2B insurtech
Bondaval protects companies when
their customers buy now, but don't pay
later, and is already serving some of the
largest companies in the world. While
existing options are opaque, inflexible or
limited, Bondaval's range of insurance
products are made more powerful via
their proprietary technology platform,
which translates policy obligations
into clear tasks, helps aggregate and
monitor risk signals, and makes limit
management effortless for credit
managers. With their receivables
secured, businesses can grow faster
with more peace of mind, achieve more
predictable financial performance, and
even access new lines of financing.
•
Offices in London, New York
andDallas
•
Licensed in 30+ countries
Taster was founded with the goal
of revolutionising the quick-service
food experience globally. In 2017, the
company raised €8 million, and by 2021,
they secured an additional €30 million.
By the end of 2023, Taster had grown to
400 online restaurants, with its franchise
network expanding across France,
the UK, Spain, the Netherlands, and
Belgium. Taster collaborates closely with
co-creators and kitchen partners, from
launching new brands to creating special
edition menu items. Their strategy
focuses on building social media-first
brands that engage audiences and
cultivate communities around their
digital restaurants.
•
Operating in over 90 cities across
Europe
Case studies
Octopus Titan VCT plc — Annual report and financial statements 2024 29
1. Digital Therapeutics, Inc., formerly Quit Genius, has rebranded as Pelago.
£17.9m
£12.0m
£8.8m
£7.3m
Portfolio
£23.2m
£17.8m
£25.8m
£18.6m
£16.5m
£31.0m
£26.2m
£12.6m
£19.0m
£9.9m
£10.0m
£24.6m
We are disappointed to report a net
decrease in the value of the portfolio of
£137 million since 31 December 2023,
excluding additions and disposals. This
represents a decline of 17% on the value of
the portfolio at the start of the year. Here,
we set out the cost and valuation of the
top 20 holdings, which account for 61% of
the value of the portfolio and 47% of the
total NAV.
Key:
Fintech Deep tech
Health Bio
B2B software Climate
Consumer
1
1
7
9
5
1
£35.0m£13.6m
8
10
4
3
2
£11.5m
Investment
cost
Investment
focus
Total valuation including cost
£44.9m
6
Portfolio Manager’s review
continued
Top
20
1
30 Octopus Titan VCT plc — Annual report and financial statements 2024
Portfolio
Investment
focus
Investment
cost
Total valuation including cost
39
investments have
increased in value
£15.3m
£7.1m
£9.6m
£10.7m
£10.6m
£13.5m
£8.2m
£12.3m
£13.2m
£12.4m
£15.4m £8.1m
£14.9m £8.0m
£11.5m £14.0m
17
19
20
18
14
15
16
£11.8m £9.5m
£7.2m £10.4m
11
12
13
Portfolio Manager’s review
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 31
Skin+Me Amplience Permutive Elliptic
Skin+Me offers direct-to-consumer,
personalised skincare.
www.skinandme.com
Amplience is a leading headless content
management system, which powers
retailers’ digitalchannels.
www.amplience.com
Permutive’s publisher data platform gives
its customers an in-the-moment view of
everyone ontheir site.
www.permutive.com
Crypto compliance and forensic investigation
solutions used by financial institutions, crypto
businesses, law enforcement, and regulators
to detect and prevent financial crime.
www.elliptic.co
Initial investment date: September 2019
Investment cost: £11.5m
(2023:£11.5m)
Valuation: £44.9m
(2023:£48.5m)
Last submitted 31 August 2023
accounts:
Turnover: £28.7m
(2023:£14.3m)
Profit/(loss) before tax: £1.8m
(2023:£(3.3)m)
Net assets: £12.8m
(2023:£(0.7)m)
Valuation methodology: Multiple
2023: Multiple
Initial investment date: December 2010
Investment cost: £13.6m
(2023: £13.6m)
Valuation: £35.0m
(2023:£41.8m)
Last submitted 30 June 2024
accounts:
Turnover: £16.0m
(2023:£14.9m)
Loss before tax: £(5.5)m
(2023:£(8.1)m)
Net assets: £(22.8)m
(2023: £(17.4)m)
Valuation methodology: Multiple
2023: Multiple
Initial investment date: May 2015
Investment cost: £19.0m
(2023: £19.0m)
Valuation: £31.0m
(2023:£41.2m)
Last submitted 31 January 2023
accounts:
Turnover: Not available
2
(2023:£9.8m)
Loss before tax: Not available
2
(2023:£(19.3)m)
Net assets: Not available
2
(2023: £(40.2)m)
Valuation methodology: Multiple
2023: Multiple
Initial investment date: July 2014
Investment cost: £9.9m
(2023: £9.9m)
Valuation: £26.2m
(2023:£19.0m)
Last submitted 31 March 2024
accounts:
Turnover: £13.7m
(2023:£9.6m)
Loss before tax: £(16.4)m
(2023:£(27.1)m)
Net assets: £(3.8)m
(2023:£10.6m)
Valuation methodology: Multiple
2023: Multiple
1. These are numbers per latest public filings. More recent figures have not yet been disclosed.
2. Information not publicly available.
Portfolio Manager’s review
continued
1 2 3 4
Top 10 investments in detail
1
32 Octopus Titan VCT plc — Annual report and financial statements 2024
Vitesse ManyPets Pelago Legl
A settlement and liquidity management
platform to hold funds and deliver
international payments globally, using
domestic, in-country processing.
www.vitesse.io/
An award-winning insurtech company
with a specific focus on providing better
pet insurance for everyone.
www.manypets.com
A digital health solution for managing
substance use disorders.
www.pelagohealth.com
Cloud based legal workflow automation
platform.
www.legl.com
Initial investment date: June 2020
Investment cost: £8.8m
(2023:£10.1m)
Valuation: £25.8m
(2023:£26.6m)
Last submitted 31 March 2024
accounts:
Consolidated turnover: £24.8m
(2023:£11.2m)
Consolidated profit/(loss) £0.6m
before tax: (2023:£(5.7)m)
Net assets: £17.3m
(2023:£16.2m)
Valuation methodology: Multiple
2023: Last Round
Initial investment date: October 2016
Investment cost: £10.0m
(2023:£10.0m)
Valuation: £24.6m
(2023:£47.1m)
Last submitted 31 March 2024
accounts:
Turnover: £29.6m
(2023:£35.9m)
Loss before tax: £(34.1)m
(2023:£(67. 5)m)
Net assets: £79.9m
(2023: £110.6m)
Valuation methodology: Multiple
2023: Multiple
Initial investment date: January 2020
Investment cost: £17.9m
(2023:£17.9m)
Valuation: £23.2m
(2023:£38.6m)
Last submitted Not available
2
accounts:
Turnover: Not available
2
2023: Not available
2
Loss before tax: Not available
2
2023: Not available
2
Net assets: Not available
2
2023: Not available
2
Valuation methodology: Multiple
2023: Last Round
Initial investment date: January 2021
Investment cost: £7.3m
(2023:£7.3m)
Valuation: £18.6m
(2023:£13.8m)
Last submitted 31 December 2023
accounts:
Turnover: Not available
2
2023: Not available
2
Profit/(loss) before tax: $1.5m
(2023:$(0.1)m)
Net assets: $30.4m
(2023:$28.8m)
Valuation methodology: Multiple
2023: Multiple
1. These are numbers per latest public filings. More recent figures have not yet been disclosed.
2. Information not publicly available.
Portfolio Manager’s review
continued
5 6 7 8
Top 10 investments in detail
1
Octopus Titan VCT plc — Annual report and financial statements 2024 33
Orbex Token
Focused on providing low-cost orbital
launch services for small satellites.
www.orbex.space
A leading open banking solution, focused
on payments.
www.token.io
Initial investment date: December 2020
Investment cost: £12.0m
(2023:£10.3m)
Valuation: £17.8m
(2023:£15.3m)
Last submitted 31 December 2023
group accounts:
Turnover: Not available
2
2023: Not available
2
Consolidated £(17.2)m
loss before tax: (2023:£(8.8)m)
Consolidated £16.3m
net assets: (2023:£31.8m)
Valuation Scenario Analysis
methodology: 2023: Scenario Analysis
Initial investment date: March 2017
Investment cost: £12.6m
(2023:£12.6m)
Valuation: £16.5m
(2023:£17.1m)
Last submitted 31 December 2023
group accounts:
Turnover: Not available
2
2023: Not available
2
Loss before tax: Not available
2
2023: Not available
2
Net assets: £0.9m
(2023: £0.7m)
Valuation methodology: Multiple
2023: Multiple
1. These are numbers per latest public filings. More recent figures have not yet been disclosed.
2. Information not publicly available.
Portfolio Manager’s review
continued
9 10
Top 10 investments in detail
1
Outlook
Our portfolio companies have been navigating a
turbulent few years and global geo-political and
economic conditions remain uncertain. Due to the
early-stage nature of the portfolio companies, any
improvement in conditions will not be felt immediately.
The fundraising environment remains challenging for
portfolio companies, with 2024 seeing both a decline
in the number of investments completed at the seed
and Series A stages and many rounds completing at
decreased valuations. This is largely a function of a reset
in venture-backed valuations which began in 2022,
with many companies having no option but to accept
a reduced valuation to bring in new capital to survive
or scale. We have also seen in the year that the venture
landscape has been reshaped by AI, which captured a
37% share in all funding in 2024 and 17% of all deals.
1
However, when AI investments are excluded, global deal
activity dropped to its lowest levels since 2016.
With some of our portfolio companies struggling to
secure new investors and requiring significant investment
to develop, many have had to focus on cash preservation
and limit their growth. As such, the valuation multiples
being applied have declined in line with this. We have
also seen some companies being unable to achieve the
milestones Octopus set out when the initial investment
was completed and so we have seen more declines in
value.
Looking to the future, the Octopus Ventures team has
been focusing on driving both improved performance
and distributions to Titan. In the year, we have been able
to realise £29 million in cash proceeds to the Company
from exits. This includes deferred amounts received
in cash relating to disposals from previous periods.
In addition, £12.4 million was distributed from Zenith
Holding Company to the Company. The team is actively
involved in its portfolio companies and during the year
developed specific workstreams to support the portfolio
with value-adding activities, as summarised below:
•
Capital allocation: aims to optimise financial
planning by fostering stronger alignment between
each company’s strategic objectives and their
financial plans, reducing the risk of unexpected cash
issues and value-eroding insolvencies or emergency
down-rounds. Improving financial planning will
ensure efficient resource allocation, minimise risks
and enhance profitability, ultimately leading to
sustainable growth and long-term success.
•
Return: looking to drive exits or other liquidity events
as part of a clear aim of regularly recycling capital
back into the Company.
•
Raise: to improve fundraising outcomes for portfolio
companies, through initiatives such as supporting
the creation of fundraising material, network
introductions for potential investors or timeframe
planning. Raising additional funding is crucial to
provide the necessary capital to expand operations,
invest in new technologies and seize available growth
opportunities, ensuring a company's long-term
viability and competitive edge.
•
Talent and board: to drive performance in companies
by supporting and influencing the build of high
performing leadership teams and effective boards.
This workstream is driven by Octopus Ventures in-
house People and Talent team. Building talented
teams drives innovation, enhances productivity and
contributes to a positive work culture, all of which lead
to a company’s overall success.
Titan’s capital and resources have been prioritised on
those portfolio companies which have the potential
to drive the greatest returns. This portfolio focus has
been leveraging the advantages Titan has of being a
very large and mature VCT holding a highly diversified
portfolio. Having made over 80 investments in the
preceding few years, there remains the opportunity for
long-term returns to the Company. The ongoing focus
for the team will be optimising growth plans for the
portfolio and taking advantage of exit opportunities.
1. https://www.cbinsights.com/research/report/venture-trends-2024/
34 Octopus Titan VCT plc — Annual report and financial statements 2024
Portfolio Manager’s review
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 35
Operating responsibly
Titan has a policy in place, set by theBoard, to make
sure Octopus Ventures considers responsibleinvestment
(RI) within investment decisions, including
environmental, social and governance risks.
Octopus Ventures is responsible for implementing
Titan’s RI policy. As the nature of responsible
investment 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 responsible investment.
Please view the Company’s RI policy here:
Octopus Titan VCT plc Responsible Investment Policy
Octopus is an accredited B Corp and signatory to the internationally
recognised Principles for Responsible Investment, demonstrating
their commitment to responsible investment and to creating a more
sustainable financial system.
The Directors consider responsible investment tobe 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.
This framework considers:
1. Materiality of risks to investments: the materiality of
sustainability issues inTitan’s underlying portfolio;
2. Mission: the mission of an investment; and
3. Responsibility: a portfolio company’s values, culture
and behaviour.
Operating
responsibly
framework
of risks to
investments
M
a
t
e
r
i
a
l
i
t
y
R
e
s
p
o
n
s
i
b
i
l
i
t
y
M
i
s
s
i
o
n
36 Octopus Titan VCT plc — Annual report and financial statements 2024
Operating responsibly
continued
Materiality of risks toinvestments
Environmental, social and governance risks of the
Company’s underlying portfolio are 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 anyissues.
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 skilled
workforce.
Mission
Titan’s mission is to back businesses with the power
to transform the world for the better. Whilst the
Company doesn’t target specific sustainability goals
or objectives, Octopus Investments tracks the number,
amount invested and value of companies in Titan’s
portfolio that are aligned with Octopus Investments’
three investment themes: building a sustainable planet,
revitalising healthcare and empowering people.
Responsibility
The Company does not invest in any business
whose activities or practices appear on the Octopus
Ventures Exclusion List, which includes sectors
such as tobacco, arms, fossil fuels, gambling and
deforestation.
The team endeavours to ensure 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 bribes; and
•
uphold high standards of business integrity at all
times.
Octopus Investments has created an Engagement
Tool which is sent to all portfolio companies to help
the Octopus Ventures investment 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 and diversity.
Additionally, Octopus Ventures' People and Talent
team provides founders with access to support and
resources to build out best-in-class teams, including
policy guidance for parental leave policies, as well as
support sourcing and building diverse teams.
Octopus Titan VCT plc — Annual report and financial statements 2024 37
Operating responsibly
continued
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 Taskforce on Climate-related
Financial Disclosures
(
TCFD
)
. Importantly, due to its
structure, Titan 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.
Governance
Octopus Investments
Sets and maintains Octopus’ RI
governance structure.
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.
Titan Board
Considers RI as an integrated
element of Titan’s investment
strategy, and oversight of
climate-related risks and
opportunities forms part of
the existing risk management
process. The Board sets this
approach through the Titan
RI policy.
Impact and Sustainability team
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 senior stakeholders and
board representation from across
Octopus.
Provides RI oversight and makes sure
that appropriate action has been
taken to address any concerns within
the Octopus Ventures Investment
Committee.
38 Octopus Titan VCT plc — Annual report and financial statements 2024
Operating responsibly
continued
Strategy
With the transition to a lower carbon economy, the
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 (1.5ºC
temperature change) and worst case (4ºC temperature
change) climate scenarios. Where these 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 carbonemissions.
Risk management
The investment team use guidance from the
Sustainability Accounting Standards Board (SASB)
to identify climate-related risks. Where potential
material climate-related risks have been identified, the
investment team assess how well the risk is managed by
the portfolio company. Where appropriate, this is raised
to the Investment Committee as part of the investment
process and is continually monitored.
Metrics and targets
Titan recognises the need to conduct its business,
including investment decisions, in a manner that is
responsible to the environment wherever possible. Titan
does not produce any reportable emissions as the fund
management is outsourced to Octopus, with no physical
assets or property held by Titan. As the Company has
no employees or operations, it is not responsible for
any direct emissions. Titan is not responsible for direct
emissions, but does report on financed emissions.
In 2021, Octopus set a 2040 Net Zero target, more of
which can be read about:
https://octopusgroup.com/net-zero-plan/
Titan invests in unquoted, early-stage businesses.
Incontrast to later-stage, quoted businesses, there
islimited readily available data on climate-related risks
and opportunities that impact the portfolio companies.
To understand the carbon emissions of the Titan
portfolio, the Octopus Ventures team have taken steps
to measure the portfolio companies’ Scope 1 and 2
greenhouse gases (GHG) emissions by providing them
with access to a carbon measurement tool that will
provide the companies with details of their carbon
footprint. Scope1emissions 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.
Octopus engages with all portfolio companies on
their GHG and gives 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. Of the 131 companies
contacted in 2024 requesting their participation, 57
companies have supplied their 2023 emissions data.
2024 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 37:
GHG emissions in tonnes (tCO
2
e)
2024
(based on 2023
full year data,
57 companies
measured)
2023
(based on 2022
full year data,
58 companies
measured)
Scope 1 and 2 783.21 702.23
The increase seen in scope 1 and 2 emissions is not to be
unexpected, as Titan's portfolio companies collectively
grew their revenue in 2024 by 19%, and as such scaled
the companies to support this growth.
Where there are company year-on-year comparisons in
data available to assess whether there have been any
specific increases in emissions, these will be analysed to
ascertain the reasons and whether any actions need to
be taken.
Whilst scope 3 emissions data is collected from portfolio
companies, due to their early-stage nature and
more limited resources, it is not reported on as these
indirect emissions are extremely complex to report on,
and therefore the data provided may not be a true
representation of their indirect emissions. Scope 3
category materiality assessments have not been carried
Octopus Titan VCT plc — Annual report and financial statements 2024 39
Operating responsibly
continued
out at the portfolio company level, and all calculations
use readily available data.
Diversity & Inclusion
(
D&I
)
Octopus Venture's female diversity pledge has been
previously reported on in Titan's annual report. This
pledge stated that by 2025, 30% of all new founder
pitches to the Titan’s investment team must be
businesses led or co-led by a woman and, by 2027, this
will increase to 50%. As Titan transitioned in the period
to a greater focus on portfolio management, there have
not been new business pitches to the investment team.
However, as at 31 December 2024, 29% of the portfolio
companies have at least one female founder and over
80% have a D&I policy in place.
Human rights issues
The Board seeks to conduct Titan’s affairs responsibly.
The Company 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,
Titan VCT does not maintain specific policies inrelation
to these matters.
Whistleblowing
The Board considers, on an annual basis, the
arrangements implemented by Octopus to encourage
employees of the Portfolio Manager or the Company
Secretary to raise concerns in confidence, within their
organisation, about possible improprieties in matters of
financial reporting or other matters. The Whistleblowing
policy allows for any concerns to be raised via email or
telephone hotline. The Board is satisfied that adequate
arrangements are in place to allow an independent
investigation, and follow-on action where necessary,
totake place within the organisation.
Bribery Act
Octopus has introduced robust procedures, set out
in the Anti-Bribery policy, 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 firm are aware of their legal obligations
when conducting company business. This is done via
anonline learning platform with annual declarations.
40 Octopus Titan VCT plc — Annual report and financial statements 2024
Section 172 statement
This report sets out how the Directors have had regard
to promoting the success of Titan for the benefit of its
stakeholders 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
Act2006:
•
the likely consequence of any decision in the
longterm;
•
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 Titan is driven by its Investment policy
and liquidity strategy which is set out in the Business
Review on page 50. The Portfolio Manager prepares a
detailed cash flow which is approved by the Board on
an annual basis and reviewed regularly, and forms the
basis for Titan’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 Titan’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 Titan.
It is normal practice for Venture Capital Trusts to
delegate authority for day-to-day management of the
Company to a Portfolio Manager, and to outsource
administration, accounting and company secretarial
services. The Board then engages with the Portfolio
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 Titan’s business strategy, key risks,
stakeholder-related matters, diversity and inclusion,
environmental matters, corporate responsibility and
governance, compliance and legal matters. The Board
has set financial KPIs relating to portfolio performance.
TheBoard formally reviews the performance of the
Portfolio Manager, in relation to both investment
andnon-investment services, on a regular basis.
The Investment policy and investment process,
including the management of Conflicts of Interest
and the Allocations policy, have also been agreed and
documented and are approved periodically by the
Board.
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 Board seeks to apply the Responsible Investment
principles adopted by Octopus Ventures and these
values help to define the culture and relationship with
the investment team. There are clear policies covering,
for instance, investment process and conflicts, laying
out a clear operating framework.
Section 172 statement
Business ethics and governance
The Board is responsible for ensuring that the activities
of Titan 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 Titan. Further detail can be found in
the Directors’ responsibilities statement on page 73.
Inthe year to 31 December 2024, no areas of concern
have been flagged in this regard.
Relations with key stakeholders
The requirement for Titan 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.
As Titan is classified as a full-scope Alternative
Investment Fund under the Alternative Investment
Fund Managers Directive (the ‘AIFM Directive’), it has
in place an agreement with Octopus AIF Management
Limited to act as Manager (an authorised alternative
investment fund manager responsible for ensuring
compliance with the AIFM Directive). Octopus AIF
Management Limited has in turn appointed Octopus
Investments Limited to act as Portfolio Manager to
Titan (responsible for portfolio management and
the day-to-day running of the Company). The AIF
Manager’s main focus is risk management and the
review of the valuation of Titan’sportfolio.
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 Titan, but more
importantly can cause inconvenience, and potential
loss, for shareholders. The performance of third-party
providers is reviewed at least annually.
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 41
42 Octopus Titan VCT plc — Annual report and financial statements 2024
Section 172 statement
continued
Our key stakeholders
Shareholders
Why we engage
The Board recognises the critical importance of
openand timely communications with shareholders.
Their support is fundamental to raising further capital
which is dependent on Titan’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 Titan’sprogress.
How we engage
The annual and half-yearly reports, prospectus and
other shareholder information are published on
octopustitanvct.com. Details of the portfolio, the
investment team and other insights are published on
octopusventures.com. Shareholder enquiries are
handled promptly by Octopus Investments. Shareholder
complaints data is reviewed periodically by the Board.
The Board has conducted a shareholder survey to better
understand shareholder sentiment and to gauge interest
in potential future opportunities which could be available
to the Company. More can be read about this on page 24.
The shareholder event also provides the opportunity for
shareholders to receive an update on the portfolio and to
meet members of the investment team.
Portfolio companies
Why we engage
Titan’s performance and the performance of its
underlying portfolio companies are directly and
intrinsically linked. The Portfolio 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
Titan is reliant on Octopus as the key provider of investment
management and non-investment services. In addition,
third party suppliers provide key services for Titan and
shareholders. Titan works with the third party suppliers to
make sure that it can provide an appropriate level of service
and regulatory compliance function. Titan 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
Titan 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. A variety of
independent professional advisers are utilised by Titan
to help with certain activities, including regulatory and
legal compliance, for example, lawyers, tax advisers,
corporate brokers and auditors.
Octopus Titan VCT plc — Annual report and financial statements 2024 43
Section 172 statement
continued
Our key stakeholders
Community and environment
Why we engage
Titan aims to back pioneering entrepreneurs, leading
technology and tech-enabled businesses, to shape the
world we live in. The Board considers it important that
Titan has a responsible approach to investing as set
out in the framework on page 35, taking account of
environmental, social and governance matters.
Titan’s investment operations create employment, aid
economic growth, generate tax revenues and produce
wealth, thus benefitting the community and economy
overall.
How we engage
The Board reviews Octopus Ventures’ diversity and talent
management processes and 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 recruitment, retention and engagement, 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.
Apart from the Board’s recognition that the RI policy
should help to mitigate the impacts of climate change,
the Board has moved to a largely digital operation over
the past three years and utilises conferencing platforms
where appropriate.
The shareholder event also provides the opportunity for
shareholders to receive an update on the portfolio and to
meet members of the investment team.
Government and regulators
Why we engage
Good governance and compliance with applicable
regulations is vital in ensuring the continued success of
Titan 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.
Titan, through its Portfolio 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 Titan has on the sector.
Key decisions and actions during the year which have required the Directors to consider applicable Section 172 factors include:
Long-term strategy
S172 matters/stakeholders
considered:
(
a
)
(
b
)
(
d
)
(
f
)
The targets below have been agreed with the Portfolio Manager as part of the long-term strategy of Titan:
i. a regular dividend in each financial year of 5% of the NAV per share at the start of that financial year, with the potential to
pay special dividends when there are significant gains from the sale of portfolio holdings;
ii. maintaining a NAV per share of at least 90p after the payment of dividends;
iii. generating sufficient cash from realisations within the portfolio to cover share buybacks, dividends and operating costs;
iv. and capital raised from fundraising predominantly utilised for new and follow-on investments.
i) and ii) should provide a minimum 5% per share overall return to shareholders, whereas iii) and iv) provide that cash raised
from shareholders should be solely directed to investment in the portfolio, and not in support of operating costs. The effect for
shareholders will be to provide them ongoing returns via dividends whilst maintaining the value of their holdings.
These targets are not currently being met and the review of strategy announced by the Board in September 2024 has been
assessing what course of action is required to achieve long-term sustainability.
Communication withshareholders
S172 matters/stakeholders
considered:
(
a
)
(
b
)
(
e
)
(
f
)
The annual and half-yearly reports, prospectus and other shareholder information are published on octopustitanvct.com.
Details of the portfolio, the investment team and other insights are published on octopusventures.com.
Shareholder events, introduced during the Covid pandemic, have continued. These events provide an opportunity for
shareholders to receive an update on the portfolio while asking questions online. In addition AGMs are now held in person and
shareholders are encouraged to attend. Shareholder enquiries are handled promptly by Octopus Investments. Shareholder
complaints data is reviewed periodically by the Board.
In December 2024, Octopus, on behalf of the Board, conducted a shareholder survey to try to better understand shareholders
priorities and concerns.
Reviewing the Conflicts of Interest
and Fund Allocation policies
S172 matters/stakeholders
considered:
(
a
)
(
b
)
(
c
)
(
d
)
(
f
)
There is an external review, conducted periodically by an external third party, of the Octopus Conflicts of Interest framework.
This was introduced in 2021 following the decision by Octopus to launch new products which may co-invest with Titan. In
the period this review was carried out by Grant Thornton. The Board continue to engage with Octopus on this matter with a
regular review of the Allocation policy. A number of recommendations were made by Grant Thornton and adjustments to the
Octopus Investments framework have been made to address these as appropriate.
44 Octopus Titan VCT plc — Annual report and financial statements 2024
Section 172 statement
continued
The impact of key decisions on stakeholders in 2024
Change of Depositary
S172 matters/stakeholders
considered:
(
a
)
(
b
)
(
c
)
(
f
)
On 9 July 2024, Titan entered into a deed of novation with its depositary BNP Paribas Trust Corporation UK Limited to novate
the depositary agreement and service level agreements previously in place. This novation agreement was entered into to
amend clauses in the existing agreement at the request of the depositary due to internal restructuring. On 31 October 2024,
Titan transitioned its depositary services from BNP Paribas Trust Corporation UK Limited to NatWest Trustee and Depositary
Services Limited. This change was implemented to enhance operational efficiencies.
Key – Section 172 matters considered
(
a
)
The likely consequence of any decision in the long term.
(
b
)
The interests of Titan’s shareholders.
(
c
)
The need to act fairly between portfolio companies.
(
d
)
The need to foster Titan’s relationships with government and regulators.
(
e
)
The impact of Titan’s operations on the community and the environment.
(
f
)
The desirability of Titan maintaining a reputation for high standards of business conduct.
Octopus Titan VCT plc — Annual report and financial statements 2024 45
Section 172 statement
continued
The impact of key decisions on stakeholders in 2024
46 Octopus Titan VCT plc — Annual report and financial statements 2024
Risks and risk management
Emerging and principal risks, and risk
management
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 that management and the Boardarecurrently
monitoring:
•
adverse changes in global macroeconomic
environment;
•
challenging market conditions for private company
fundraising and exits;
•
geo-political instability; and
•
climate change.
Risk Mitigation Change
1
Investment performance:
The focus of Titan’s investments is into unquoted,
small and medium-sized VCT qualifying
companies which, by their nature, entail a
higher level of risk and shorter cash runway than
investments in larger quoted companies.
Octopus has significant experience of investing in early-stage unquoted companies,
and appropriate due diligence is undertaken on every new investment. A member of the
Octopus Ventures team is appointed to the board of a portfolio company using a risk-
based approach, considering the size of the company within the Titan portfolio and the
engagement levels of other investors. Regular board reports are prepared by the portfolio
company’s management and examined by the Manager. This arrangement, in conjunction
with its Portfolio Talent team’s active involvement, allows Titan to play a prominent
role when necessary in a portfolio company’s ongoing development and strategy. The
overall risk in the portfolio is mitigated by maintaining a wide spread of holdings in terms
of financing stage, age, industry sector and business model. The Board reviews the
investment portfolio with the Portfolio Manager on a regular basis. The Portfolio Manager is
incentivised via a performance incentive fee for exceeding certain performance hurdles, as
detailed in Note 19 on page 100. The Board and Octopus are reviewing the feestructure.
Risk exposures
continue to increase
due to the difficult
macro environment
and challenging
trading conditions
for some portfolio
companies continuing.
The Board assesses the risks faced by Titan and, as a board, reviews the mitigating controls and
actions, and monitors the effectiveness of these controls and actions.
Principal risks
1. Since 31 December 2023,
=
indicates no change , indicates an increase and indicates a decrease.
Octopus Titan VCT plc — Annual report and financial statements 2024 47
Risks and risk management
Risk Mitigation Change
1
VCT qualifying status:
Titan is required at all times to observe the
conditions for the maintenance of approved
VCT status. The loss of such approval could lead
to Titan and its investors losing access to the
various tax benefits associated with VCT status
and investment.
Octopus tracks Titan’s qualifying status regularly throughout the year, and reviews this at
key points including investment realisation. This status is reported to the Board at each
Board meeting. The Board has also engaged external independent advisers to undertake an
independent VCT status monitoring role.
Decreased exposures
reflected in the previous
period remain. VCT
status monitoring by
independent advisers
continues to reduce the
risk of an issue causing a
loss of VCT status.
=
Loss of key people:
The loss of key investment staff by the Portfolio
Manager could lead to poor fund management
and/or performance due to lack of continuity or
understanding of Titan.
The Portfolio Manager has a broad team, experienced in and focused on early-stage
investing and portfolio company management. Various mitigants exist to assist in
managing key person risk. These include frameworks that review succession, remuneration
and career progression. Workforce planning is continuous and reviews skillsets and team
structures. To reduce the exposure further, the core team is also supplemented by part-time
venture partners with sector or functional specialism.
The increased exposures
reflected in the previous
period remain due to
the loss of the lead fund
manager and other
leadership positions at
the Portfolio Manager.
The absence of a
performance fee and
lack of new investments
or deal-making
opportunities compared
to previous periods are
also factors.
Operational:
The Board is reliant on the Portfolio Manager to
manage investments effectively, and manage the
services of a number of third parties, in particular
the registrar, depositary and tax advisers. A
failure of the systems or controls at Octopus or
third-party providers could lead to an inability to
provide accurate reporting and accounting and to
ensure adherence toVCT rules.
The Board reviews the system of internal controls, both financial and non-financial,
operated by Octopus (to the extent the latter are relevant to Titan’s internal controls). These
include controls designed to make sure that Titan’s assets are safeguarded and that proper
accounting records are maintained.
No overall change
in risk exposure on
balance.
=
continued
48 Octopus Titan VCT plc — Annual report and financial statements 2024
Risk Mitigation Change
1
Information security:
A loss of key data could result in a data breach
and fines. The Board is reliant on Octopus and
third parties to take appropriate measures
to prevent a loss of confidential customer
information.
Annual due diligence is conducted on third parties which includes a review of their controls
for information security. Octopus 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.
No overall change on
balance, although
cyber threat remains
a significant risk
area faced by all
service providers. The
appropriateness of
mitigants in place
are continuously
reassessed to adapt
to new risk exposures,
such as those posed by
artificial intelligence.
=
Economic:
Events such as an economic recession and
movement in interest rates 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. Thiscould result in a reduction in the
value of Titan’s assets.
Titan invests in a diverse portfolio of companies, across a range of sectors, which helps to
mitigate against the impact on any one sector. Titan also maintains adequate liquidity to
make sure it can continue to provide follow-on investment to those portfolio companies
which require it and which is supported by the individual investment case.
Increased exposures
reflected in the
previous periods
remain and have
heightened further as
economic uncertainty
persists through high
inflation, high interest
rates and other
economic factors.
Legislative:
A change to the VCT regulations could adversely
impact Titan by restricting the companies Titan
can invest in under its current strategy. Similarly,
changes to VCT tax reliefs for investors could make
VCTs less attractive and impact Titan’s ability to
raise further funds.
The Portfolio Manager engages with HM Treasury and industry bodies to demonstrate the
positive benefits of VCTs in terms of growing early-stage companies, creating jobs and
increasing tax revenue, and to help shape any change to VCT legislation.
Risk exposure has
continued to
reduce since the
previous period
following the extension
of the sunset clause to
2035 being agreed.
Risks and risk management
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 49
Risk Mitigation Change
1
Liquidity:
The risk that Titan’s available cash will not be
sufficient to meet its financial obligations. Titan
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 at short notice.
Titan’s liquidity risk is managed on a continuing basis by Octopus in accordance with
policies and procedures agreed by the Board. Titan’s overall liquidity risks are monitored on
a quarterly basis by the Board, with frequent budgeting and close monitoring of available
cash resources. Titan maintains sufficient investments in cash and readily realisable
securities to meet its financial obligations. At 31 December 2024, these investments were
valued at £183,770,000 (2023: £199,841,000), which represents 22% (2023: 20%) of the net
assets of Titan. The Board also reviews the cash runway in the portfolio.
Risk exposure has
continued to increase,
reflecting economic
uncertainty, the
impact on fundraising
and the risk of failing
to exit portfolio
companies.
Valuation:
The portfolio investments are valued in
accordance with International Private Equity
and Venture Capital (IPEV) valuation guidelines.
This means companies are valued at fair value.
As the portfolio comprises smaller unquoted
companies, establishing fair value can be difficult
due to the lack of a readily available market for
the shares of such companies and the potentially
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 it operates in. These
valuations are then subject to review and approval by Octopus’ Valuation Committee,
comprised of staff who are independent of Octopus Ventures with relevant knowledge of
unquoted company valuations, as well as Titan’s Board of Directors.
Risk exposure
remains unchanged
from the previous
period due to
economic uncertainty
within valuation
modelling.
=
Foreign currency exposure:
Investments held and revenues generated in
other currencies may not generate the expected
level of returns due to changes in foreign
exchange rates.
Octopus and the Board regularly review the exposure to foreign currency movement to
make sure the level of risk is appropriately managed. Investments are primarily made in
GBP, EUR and USD so exposure is limited to a small number of currencies. On realisation of
investments held in foreign currencies, cash is converted to GBP shortly after receiving the
proceeds to limit the amount of time exposed to foreign currency fluctuations.
Risk exposure has
not changed since
the previous period.
=
Risks and risk management
continued
50 Octopus Titan VCT plc — Annual report and financial statements 2024
Business review
Investment policy
Titan’s focus is on providing early-stage development
and expansion funding to unquoted companies. Titan
typically makes an initial investment of £1 million to
£10 million and will make further follow-on investments
into existing portfolio companies. The intention is to
hold a portfolio of largely unquoted technology and
tech-enabled companies.
No material changes may be made to Titan’s
Investment policy without the prior approval
of shareholders by the passing of an Ordinary
Resolution. The Directors continually monitor the
investment process and secure compliance with the
Investmentpolicy.
The Directors control the overall risk of the portfolio by
ensuring that Titan has exposure to a diversified range
of portfolio companies from a number of different
technology and tech-enabled sectors. Concentration
risk is mitigated by ensuring that at the point of
investment no more than 15% of Titan by value will be
in any one investment. Any borrowing by Titan for the
purposes of making investments will be in accordance
with Titan’s Articles of Association.
The investment profile is expected to be:
•
80-90% in VCT qualifying investments, primarily in
unquoted companies; and
•
10-20% in non-VCT qualifying investments or cash.
Non-VCT qualifying investments
An active approach is taken to manage any cash
held, prior to investing in VCT qualifying companies.
After the Directors are sure that Titan satisfies all VCT
qualification targets required by HMRC, the majority of
the remaining cash will be invested in accordance with
HMRC rules for non-qualifying investments. Currently,
this includes Undertakings for Collective Investments
in Transferable Securities (UCITS), corporate bonds or
other money market funds, including those managed
byOctopus.
VCT qualifying investments
Investment decisions made must adhere to HMRC’s
VCT qualification rules. In addition to adhering to
the VCT rules, when contemplating a prospective
investment in acompany, particular consideration is
given to:
•
the strength of the management team;
•
large, typically global, addressable markets;
•
the portfolio company’s ability to sustain a
competitive advantage;
•
the existence of proprietary technology;
•
visibility over future revenues and recurring income;
and
•
the company’s prospects of being sold or floated in
the future, at a significant multiple on the initial cost
of investment.
A review of the investment portfolio and of market
conditions during the period is included in the Chair’s
Statement and Portfolio Manager’s Review which
form part of the Strategic Report on pages 3 and 19
respectively.
Liquidity strategy
The Board’s strategy is to maintain an appropriate level
of liquidity on the balance sheet to continue to achieve
the following five targets:
•
to support further investment in existing portfolio
companies if required;
•
to take advantage of new investment opportunities
as they arise;
•
to cover the running costs of Titan as they fall due;
•
to support a consistent dividend flow; and
•
to assist liquidity in the shares through the buyback
facility.
Liquidity in Titan is primarily driven by profitable exits
and fundraising activities. Liquidity is considered in
detail as part of the Board’s review of viability and
going concern as detailed on page 56, along with
various other factors.
VCT regulation
Compliance with the required VCT rules and regulations
is considered when all investment decisions are made.
Internally, this is measured on a continuous basis and
reviewed by Shoosmiths LLP every six months, who
perform a comprehensive validation exercise. One of
the primary purposes of the Investment policy is to
make sure Titan continues to qualify and is approved as
a VCT by HMRC. The main criteria to which Titan must
adhere to are detailed on page 108.
Titan will continue to ensure its compliance with the
qualification requirements.
Octopus Titan VCT plc — Annual report and financial statements 2024 51
Business review
Titan performance
The Board is responsible for Titan’s investment strategy
and performance, although the management of the
investment portfolio is delegated to Octopus through
the Investment Management Agreement, as referred
toin the Directors’ Report on page 68.
The graph compares the NAV total return and share
price total return (gross dividends reinvested) of Titan
over the period from October 2007 to December2024
with the total return from a notional investment
in the FTSE Small-Cap Index over the same period
(all rebased to 100p). This index is considered to be
the most appropriate broad equity market index
for comparative purposes, given the nature of the
underlying investments. The Board wishes to point out
that VCTs are not able to make qualifying investments
in companies quoted on the Main Market in their
observance of the HMRC rules.
Titan will continue to ensure its compliance with the
qualification requirements.
The Strategic Report was approved on behalf of the
Boardby:
Tom Leader
Chair
28 April 2025
AIC methodology: The NAV total return to the investor, including the original amount invested (rebased to 100p)
from launch, assuming that dividends paid were reinvested at the NAV of Titan at the time the shares were quoted
ex-dividend. Transaction costs are not taken into account.
The loss per share for the year ended 31 December 2024 is 9.0p (2023: loss of 9.9p per share). Further details can be
found in the earnings per share Note 8 of the financial statements on page 90.
Net asset value and share price total return since launch against the FTSE Small-Cap Index total return
1
NAV total return (gross dividend reinvested) plus 30% upfront income tax relief rebased to 100p at launch
2
NAV total return (gross dividend reinvested) rebased to 100p at launch
2
FTSE Small-Cap total return rebased to 100p at launch
2
Total return (p)
Oct 07
Oct 08
Apr 08
Apr 09
Oct 09
Apr 10
Oct 10
Oct 11
Apr 11
Apr 12
Oct 12
Oct 14
Oct 13
Oct 15
Dec 22
Apr 13
Apr 14
Apr 15
Apr 16
Oct 16
Apr 17
Oct 17
Apr 18
Oct 18
Apr 19
Dec 19
Jun 20
Dec 20
Jun 21
Dec 21
Jun 22
Dec 24
Jun 24
Dec 23
Jun 23
0
50
100
150
200
250
300
350
1. Total return is an alternative performance measure 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.
2. Based on notional investment on 31 October 2007.
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 53
Board of Directors
Tom Leader
Non-Executive Chair
Tom has over 30 years’ private equity experience. He
is currently Head of Caledonia Private Capital (part
of Caledonia Investments plc). Before Caledonia, Tom
worked at Nova Capital Management, Baring Private
Equity Partners and Morgan Grenfell Private Equity.
Tom started his career in the management consultancy
practice of Coopers & Lybrand. Tom is a Non-Executive
Director of Stonehage Fleming Family & Partners
Limited and Non-Executive Chair of Penox Group
GmbH.
Julie Nahid Rahman
Non-Executive Director
Julie is currently an external advisor to McKinsey’s life
sciences and healthcare private equity practices. She
brings 25 years of experience across a diverse mix of
industries from top tier global firms including private
equity, executive search and strategy consulting. Julie
was previously a member of the European healthcare
practice at Spencer Stuart leading senior executive and
board appointments for life sciences companies and
healthcare funds. Prior to executive search, she spent
a decade as an investor at Visium Healthcare Partners
and Paul Capital Healthcare providing creative growth
capital to life sciences companies. Julie began her
career as a strategy consultant with Bain & Company,
advising healthcare and private equity clients.
Julie holds an MBA from Harvard Business School
and graduated from the Massachusetts Institute of
Technology with her MSc in materials science (MIT
Langer Lab) and her BSc in chemical engineering.
Key:
A
Audit Committee
N
Nomination and Remuneration Committee
M
Management Engagement Committee Independent
Chair
Gaenor Bagley
Non-Executive Director
Following a 30-year career in professional services,
where she held a variety of leadership positions
including at board level, Gaenor now has a portfolio
of non-executive director roles. Her other current roles
include: Non-Executive Director and Chair of Audit
Committee, Zopa Bank Limited; Non-Executive Director,
National Audit Office; Chair, The Kemnal Academies
Trust; external member of Council, Cambridge University.
The majority of Gaenor’s professional career has been as
a M&A tax adviser with PwC as part of the tax practice. In
2011 she was appointed to the executive board of PwC UK
to be Head of People, with responsibilities for developing
the firm’s People and Corporate Social Responsibility
strategy. Alongside this role she was the Global Head
of Learning and Development, responsible for the
development strategy for the PwC network firms. From
July 2016 until her retirement in December 2017, Gaenor
was Head of Corporate Purpose at PwC UK, leading on
PwC’s Corporate Social Responsibility agenda.
A
N
M
A
N
M
A
N
M
54 Octopus Titan VCT plc — Annual report and financial statements 2024
Board of Directors
continued
Key:
A
Audit Committee
N
Nomination and Remuneration Committee
M
Management Engagement Committee Independent
Chair
Lord Rockley
Non-Executive Director
Anthony is a qualified chartered accountant and former
partner at KPMG. He joined KPMG in 1983 and held
various positions throughout his career, most notably
within the banking sector and latterly as the lead audit
partner in KPMG’s Private Equity Group (PEG) which
he was instrumental in establishing. He led PEG Audit
until his retirement as a partner in 2015. Anthony was
a member of the British Venture Capital Association
working party and was key in the development of the
first valuation guidelines for the industry. He was also a
member of the International Private Equity and Venture
Capital Guidelines Board between 2005 and 2014.
He has an MA in Natural Sciences from Cambridge
University.
Jane O’Riordan
Non-Executive Director
Jane is currently Chair of Turtle Bay Hospitality,
Caravan Restaurants and of Flight Club Darts. Jane
was previously a director of Yellowwoods Associates
UK Limited, where she was involved in the strategic
development of companies such as Nando’s, Gourmet
Burger Kitchen, Pizza Express/Gondola and others.
Before Yellowwoods, Jane was a director with Braxton
Associates, the then strategic consulting division of
Deloitte & Touche. In addition to almost 30 years of
private equity, venture capital and management
consulting experience, Jane worked for three years with
British Aerospace as a spacecraft systems engineer.
Jane has a BSc in mechanical engineering and an MBA
from Harvard Business School. Jane was Director and
Chair of Octopus Titan VCT 5 plc from 17 November
2010 to 27 November 2014 and has been a director of
Titan since 27 November 2014.
A
N
M
A
N
M
Rupert Dickinson
Non-Executive Director
Rupert has over 20 years’ experience in the wealth and
investment management industries. He qualified as a
chartered accountant before spending the majority of
his executive career with Barclays. He was initially Chief
Operating Officer and then Chief Executive of Barclays
Stockbrokers before becoming a member of the Wealth
Division's Executive Committee.
Rupert is currently the Non-Executive Chairman of
Sparrows Capital, a Non-Executive Director at Killik &
Co, and the Chair of the Audit and Risk Committee and
Non-Executive Director of Schroders Personal Wealth.
Rupert is a member of The Institute of Chartered
Accountants of Scotland, with an LLB (Hons) degree in
Law and Forensic Medicine and over 15 years serving on
12 Boards as an Executive Director and 8 Boards as a
Non-Executive Director.
A
N
M
Octopus Titan VCT plc — Annual report and financial statements 2024 55
Corporate governance report
The Association of Investment Companies Code of
Corporate Governance (the ‘AIC Code’), issued by the
AIC in February 2019, addresses the principles and
provisions set out in the UK Corporate Governance
Code (the ‘UK Code’), issued by the Financial Report
Council (FRC) in July 2018, as well as setting out
additional provisions on issues that are of specific
relevance to Titan. 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 6.6.6 of the UK Listing Rules. The AIC Code
is available on the AIC’s website www.theaic.co.uk. It
includes an explanation of how the AIC Code adapts
the principles and provisions set out in the UK Code to
make them relevant for investment companies.
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
overmany years, a complex range of additional legal,
tax and regulatory requirements.
Titan, as a VCT and closed-ended investment company,
has particular factors which have an impact on its
governance arrangements. Titan:
•
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 Titan.
Titan is committed to maintaining high standards in
corporate governance. With the exception of the items
outlined below, the Directors consider that Titan has,
throughout the year under review, complied with the
provisions set out in the AIC Code:
•
Titan does not have a Senior Independent Director;
this is not considered necessary;
•
the Chair is a member of the Audit Committee,
having been Chair of the Audit Committee until
June 2022. The Directors believe this is appropriate
tobenefit from his skills and knowledge;
•
the Chair is also Chair of the Nomination and
Remuneration Committee of which all Directors are
members. The Directors consider this appropriate
given the size of the Board;
•
the Directors do not stand for annual re-election
in order to make sure experience is retained on
theBoard; and
•
Titan has no major shareholders, so shareholders
are not given the opportunity to meet any
Non-Executive Directors at a specific meeting other
than the AGM, or other designated shareholder
events, butare welcome to contact the Board or
Octopus at anytime.
The Board of Directors has considered the principles and recommendations of the Association of
Investment Companies Code of Corporate Governance.
56 Octopus Titan VCT plc — Annual report and financial statements 2024
Corporate governance report
Viability statement
In accordance with the FRC UK Corporate Governance
Code published in 2018 and provision 36 of the AIC
Code of Corporate Governance, the Directors have
assessed the prospects of Titan over a period of five
years, consistent with the expected investment hold
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 Titan’s shares, and a five-year
period is considered to be a reasonable time horizon
forthis.
The Board carried out a robust assessment of the
emerging and principal risks facing Titan and its current
position, including 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 Titan’s reliance
on, and close working relationship with, the Portfolio
Manager. The principal risks faced by Titan and the
procedures in place to monitor and mitigate them are
set out on pages 46 to 49.
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
Titan to comply with the ongoing conditions to make
sure it maintains its VCT qualifying status under its
current Investment policy.
Based on this assessment the Board confirms that it
has a reasonable expectation that Titan will be able to
continue in operation and meet its liabilities as they fall
due over the five-year period to 31 December 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
ensure Titan has sufficient liquidity.
Going concern
Titan’s business activities, together with the factors
likely to affect its future development, performance
and position, are set out in the Strategic Report. Further
details on the management of financial risk may be
found in Note 16 to the financial statements.
The Board receives regular reports from Octopus, and
the Directors believe that Titan has adequate financial
resources to continue in operational existence for
a period of at least 12 months from the date of the
signing of these financial statements. In reaching this
conclusion, the Directors have considered the liquid
assets of Titan and its ability to meet its obligations
as they fall due, including performing stress tests to
confirm that Titan has sufficient capital and liquidity
to continue its operations effectively. Asno material
uncertainties leading to significant doubt about going
concern have been identified, and taking into account
all available information about Titan, the Directors
believe that it is appropriate to continue to adopt the
going concern basis of accounting in preparing the
financial statements.
continued
Board leadership and purpose
The Board is responsible for leading the business in the
way which it believes is most likely to lead to long-term
sustainable success. This includes effective engagement
with our stakeholders.
Read more on page 57
Division of responsibilities
As all day-to-day activities are outsourced, the Board
ensures proper oversight in order to achieve good
corporate governance.
Read more on page 58
Composition, succession and evaluation
The Board makes sure it is balanced with the
appropriate skills and maintains a succession plan. Its
performance and composition are considered annually.
Read more on page 59
Audit, risk and internal control
Titan’s strategy is determined by the Board, taking
account of the need to avoid unnecessary or
unacceptable risks. The Audit Committee is appointed
to oversee this process on behalf of theBoard.
Read more on page 61
Remuneration
The Board comprises Non-Executive Directors only, who
receive fees which are subject to periodic review. No
element of their remuneration is performance related.
Read more on page 65
Octopus Titan VCT plc — Annual report and financial statements 2024 57
Leadership and purpose
Board of Directors
Titan currently has a Board of six Non-Executive
Directors, all of whom are considered to be
independent.
The Board meets regularly, at least six times a year,
and on other occasions as required, to review the
investment performance and monitor compliance with
the Investment policy laid down by the Board as set out
in the Business Review on page 50.
The Board has a formal schedule of matters specifically
reserved for its decision whichinclude:
•
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;
•
approval of the annual report and the unaudited
half-yearly report;
•
the appointment, evaluation, removal and
remuneration of Octopus;
•
the performance of Titan, including monitoring of
the discount of the NAV 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 Titan. He facilitates the effective contribution
of the Directors and makes sure that they receive
accurate, timely and clear information and that they
communicate effectively with shareholders.
The company secretarial function is discharged by
Octopus Company Secretarial Services Limited, which
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 Titan’s expense where necessary in the
performance of their duties. The Board does not
consider it necessary for the size of the Board or
Titan to identify a member of the Board as the senior
Non-Executive Director.
Titan’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 period the following meetings were held:
Board meeting
attendance
Audit Committee
meeting attendance
Nomination and
Remuneration Committee
meeting attendance
Management
Engagement Committee
meeting attendance
Jane O’Riordan
14/16 4/6 1/1 3/3
Tom Leader
16/16 6/6 1/1 3/3
Lord Rockley
15/16 6/6 1/1 3/3
Gaenor Bagley
16/16 6/6 1/1 3/3
Julie Nahid Rahman
16/16 6/6 1/1 3/3
Rupert Dickinson
12/13 3/3 – 2/2
1. Rupert Dickinson was appointed as a Director on 1 May 2024.
58 Octopus Titan VCT plc — Annual report and financial statements 2024
Division of responsibilities
Board committees
The Board has appointed three committees to make
recommendations to the Board in specific areas:
The Audit Committee is responsible for the
appropriateness of Titan’s financial reporting, the
performance of the auditor and the management
of the internal control and business risk systems. All
Directors are members of the Audit Committee which
is chaired by Lord Rockley. The Audit Committee
believes that Lord Rockley possesses appropriate and
relevant financial experience. The Board considers that
the members of the Committee are independent and
collectively have the skills and experience required to
discharge their duties effectively. The Audit Committee
Report is given on pages 61 to 63.
The Management Engagement Committee 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 Gaenor Bagley
and comprises all Directors.
The Nomination and Remuneration Committee,
comprising all Directors and chaired by Tom Leader,
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 65 to 67.
Key Board activities and decisions during
the year
Review of strategy
In September 2024, the Board, in conjunction with
Octopus, initiated a review of Titan’s strategy due to the
ongoing challenges in the early-stage venture market
to which the Company is exposed, and the resultant
performance issues faced. Further details of the review
can be found on pages 7 and 8.
Shareholder survey
In December 2024, a shareholder survey was issued
to Titan’s investor and adviser base to try to better
understand investors priorities, areas of concern and
potential opportunities which may be of interest.
Further details of these results can be found on
page24.
Change in depositary
Titan transitioned its depositary services from BNP
Paribas Trust Corporation UK Limited to NatWest
Trustee and Depositary Services Limited in October
2024. This change was implemented to enhance
operational efficiencies.
Creation of additional distributable reserves
Distributable reserves are required to pay dividends
and facilitate share buybacks. The Board seek to create
more reserves with an ongoing process of cancelling
share premium, with the appropriate resolution being
put to shareholders at the AGM in 2024.
Octopus Titan VCT plc — Annual report and financial statements 2024 59
Composition, succession and evaluation
Titan’s Articles of Association require that one-third of
Directors should retire by rotation each year and seek
re-election at the AGM, and that Directors appointed
by the Board should seek election at the next AGM.
All Directors are required to submit themselves for
re-election at least every three years.
The practice mentioned above was followed during the
year under review. However, although Directors stood
for election less than three years ago, in this instance
the Articles of Association require the longest-serving
Directors to stand. Accordingly, Lord Rockley and Jane
O’Riordan will stand for re-election at the 2025 AGM.
Date of original
appointment
Date of last
election
/re-election
Due date for
re-election
Jane O’Riordan 27/11/2014 AGM 2023 AGM 2025
Tom Leader 08/08/2018 AGM 2024 AGM 2026
Lord Rockley 08/04/2021 AGM 2023 AGM 2025
Gaenor Bagley 07/06/2021 AGM 2024 AGM 2027
Julie Nahid Rahman 01/08/2023 AGM 2024 AGM 2026
Rupert Dickinson 01/05/2024 AGM 2024 AGM 2027
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 Titan’s shareholders’ best interests, particularly
given the continued growth in complexity of Titan. Trust
Associates Limited, who are independent of Titan, were
engaged in the recruitment of Rupert Dickinson who was
appointed to the Board on 1 May 2024.
Appointment and replacement of Directors
A person may be appointed as a Director of Titan 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 they are
recommended by the Directors or, not less than seven
nor more than 42 clear days before the date appointed
for the meeting, notice is given to Titan of the intention
to propose that person for appointment or re-
appointment in the form and manner set out in Titan’s
Articles of Association. Each Director who is appointed
by the Directors (and who has not been elected as a
Director by the members at a general meeting held in
the interval since his or her appointment as a Director)
is to be subject to election as a Director of Titan by
the members at the first AGM following his or her
appointment. At each AGM, 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 2006 allows shareholders in a
general meeting 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 Titan. A person also ceases to be a
Director if he or she resigns in writing, ceases to be 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 Titan’s Articles of Association.
60 Octopus Titan VCT plc — Annual report and financial statements 2024
Composition, succession and evaluation
continued
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 50%
Not applicable
– see note
Women 3 50%
Not specified/prefer not to say – –
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) 5 84%
Not applicable
– see note
Mixed/Multiple Ethnic Groups – –
Asian/Asian British 1 16%
Black/African/ Caribbean/ Black British – –
Other ethnic group – –
Not specified/prefer not to say – –
Gender and diversity
The Board of Directors is comprised of three male and
three female Non-Executive Directors with considerable
experience of the VCT industry and investment in early-
stage growth companies. The gender and diversity of the
constitution of the Board is reviewed on an annual basis.
As per UK Listing Rule 6.6.6R (9)(a), 50% of individuals on
the Company’s Board are women. As the Company is
externally managed, the roles of CEO or CFO do not exist. As
a consequence of this, no senior Board positions are held by
a woman in the Company. Furthermore, 16% of the Board is
comprised of persons from a minority ethnic background.
The tables below which report on gender identity/sex and
ethnic background as at 31 December 2024 are included
for completeness.
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
theexperience, range of skills, knowledge of Titan and
its operating environment anddiversity of the Directors.
Accordingly, the Board’s policy on tenure is that the
termthe 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.
Performance evaluation
Each year a performance evaluation is undertaken
of the Board as a whole, its committees and the
Directors. For 2024, this was done using the Boardforms
Limited platform, which utilised a series of online
questionnaires. 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. As a result of
the evaluation, the Board considers that all Directors
continue to make an effective contribution and have
the requisite skills and experience to continue to provide
able leadership and direction for Titan.
The Board also conducts an evaluation of Octopus,
as the Portfolio Manager, and in relation to non-
investment services, including finance and company
secretarial. The results of the evaluation are discussed
with Octopus. Further details can be found in the
Report of the Management Engagement Committee on
page 64.
1
This column is not applicable as the Company is externally managed and does not have executive management functions, specifically
it does not have a CEO or CFO. The Company considers that the role of Chair and Chair of the Audit Committee are senior positions. Of
these two senior positions, both are performed by men.
2
This column is not applicable as the Company is externally managed and does not have executive management functions, specifically
it does not have a CEO or CFO. The Company considers that the role of Chair and Chair of the Audit Committee are senior positions. Of
these two senior positions, both are performed by those from a White British background.
Octopus Titan VCT plc — Annual report and financial statements 2024 61
Audit, risk and internal control
This report is submitted in accordance with the AIC
Code in respect of the year ended 31 December 2024
and describes the work of the Audit Committee in
discharging its responsibilities.
The Committee’s key objective is the provision of
effective governance of the appropriateness of Titan’s
financial reporting, the performance of the auditor
and the management of the internal control and
business risks systems. The Directors forming the Audit
Committee can be found on pages 53 and 54.
The Audit Committee’s terms of reference include the
following responsibilities:
•
reviewing and making recommendations to the
Board in relation to Titan’s published financial
statements and other formal announcements
relating to Titan’s financial performance;
•
advising the Board on whether the annual report
and financial statements, taken as a whole, is fair,
balanced and understandable;
•
advising the Board on whether the annual report and
financial statements provides necessary information
for shareholders to assess performance, business
model and strategy;
•
reviewing and making recommendations to the
Board in relation to Titan’s internal control (including
internal financial control) and risk management
systems;
•
annually considering the need for an internal audit
function;
•
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 and monitoring the external auditor’s
independence and objectivity and the effectiveness
of the audit process, taking into consideration
relevant UK professional regulatory requirements;
•
monitoring the extent to which the external auditor
isengaged to supply non-audit services; and
•
ensuring that Octopus has arrangements in place for
the investigation and follow-up of any concerns raised
confidentially by staff in relation to the 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 annually and recommends to the Board
any changes required as a result of the review. The
terms of reference are available on request from Titan’s
Company Secretary. The Committee meets at least
twice per year and on an ad hoc basis as necessary and
has direct access to BDO LLP, Titan’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 15 March 2018 following
a competitive tender process. Chris Meyrick was
appointed as audit partner for the 2023 year-end audit
following rotation requirements for the previous audit
partner to be rotated off.
Auditor independence and objectivity
When considering the effectiveness of the external
audit, the Committee considered the quality and
content of the audit plan and report provided and the
resultant reporting and discussions on topics raised.
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 in the period under review.
Audit and Risk Committee report
62 Octopus Titan VCT plc — Annual report and financial statements 2024
Audit, risk and internal control
Auditor evaluation
Theeffectiveness of the external audit is assessed as
part of the Board and Committee evaluation process
which is conducted annually. The Committee also
challengesthe auditor when present at a Committee
meeting, if appropriate.
Internal audit
Titan does not have an internal audit function as it is
not deemed appropriate given the size of Titan and
the nature of its business. However, the Committee
considers annually whether there is a need for such a
function and makes the appropriate recommendation
to the Board. Octopus has an internal audit function
which reports to the Board annually on the outcome
of the internal audits that have taken place. Any
significant issues arising from the Octopus internal
audit that affect Titan would be raised to the
Committee immediately. The Octopus Compliance
Department also reports regularly to the Board.
The Committee monitors the significant risks at each
meeting and Octopus engages closely with the auditor
to mitigate the risks and the resultant impact.
Matters considered by the Audit Committee
During the year ended 31 December 2024, the Audit
Committee discharged its responsibilities by:
•
reviewing and approving the external auditor’s terms
of engagement and remuneration;
•
reviewing the external auditor’s plan for the
audit of Titan’s financial statements, including
identification of key risks and confirmation of auditor
independence;
•
reviewing the Octopus statement of internal controls
in relation to Titan’s business and assessing the
effectiveness of those controls in minimising the
impact of key risks;
•
reviewing periodic reports on the effectiveness of the
regulatory compliance of Octopus;
•
reviewing the appropriateness of Titan’s accounting
policies;
•
reviewing Titan’s draft annual financial and half-
yearly results statements prior to Board approval;
•
reviewing the external auditor’s audit findings
report to the Committee on the annual financial
statements;
•
reviewing Titan’s going concern as referred to on
page56; and
•
reviewing in detail the valuation of the investment
portfolio and supporting data.
The Committee has considered the whole annual
report and financial statements for the year ended
31December 2024 and has reported to the Board
that it considers them to be fair, balanced and
understandable, providing the information necessary
for shareholders to assess Titan’s financial position,
performance, business model and strategy.
Significant risks
The Audit Committee is responsible for considering and
reporting on any significant risks that arise in relation to
the audit of the financial statements.
The Committee and the auditor have identified the
most significant risks for Titan as:
•
valuation of unquoted investments: The Committee
gives special audit consideration to the valuation
of investments and supporting data provided by
Octopus. The impact of this risk would be a large
gain or loss in Titan’s results. The valuations are
supported by the portfolio companies’ accounts
and third-party evidence which gives comfort to the
Audit Committee:
•
management override of financial controls:
TheCommittee reviews all significant accounting
estimates that form part of the financial statements
and considers any material judgements applied by
management during the completion of the financial
statements.
These issues were discussed with Octopus and the
auditor at the conclusion of the audit of the financial
statements.
continued
Audit, risk and internal control
Internal controls
The Directors have overall responsibility for keeping
under review the effectiveness of Titan’s systems of
risk management and internal controls. The purpose of
these controls is to make sure that proper accounting
records are maintained, Titan’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
systems of risk management and internal control are
designed to manage rather than eliminate the risk of
failure to achieve the business objectives. These internal
controls have been in place throughout the period
under review and up to the date of this report. The
Board regularly reviews financial results and investment
performance with Octopus.
Octopus identifies the investment opportunities,
monitors the portfolio of investments and manages the
assets of Titan on a discretionary basis.
Octopus is engaged to carry out the accounting
function and retains physical custody of the documents
of title relating to unquoted investments. Octopus
regularly reconciles the client asset register with the
physical documents.
The Directors confirm that they have established a
continuing process throughout the year and up to
the date of this report for identifying, evaluating and
managing the significant potential risks faced by
Titan, 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’s
Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting. The Board
does not consider it appropriate to have an internal
audit function due to the nature of Titan’s transactions
as this would not be an appropriate control for a VCT.
The risk management and internal control systems
include the production and review of monthly bank
reconciliations and management accounts. All outflows
made from Titan’s accounts require the authority of
two approved signatories from Octopus. Octopus is
subject to regular review by the Octopus Compliance
Department.
Financial risk management
Titan is exposed to the risks arising from its operational
and investment activities. Further details can be found
in Note 16 of the financial statements.
The Committee is also responsible for considering and
reporting on any significant issues that arise in relation
to the audit of the financial statements. The Committee
can confirm that there were no significant issues to
report to the shareholders in respect of the audit of the
financial statements to 31 December 2024.
Lord Rockley
Audit Committee Chair
28 April 2025
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 63
64 Octopus Titan VCT plc — Annual report and financial statements 2024
Management Engagement Committee
The Management Engagement Committee was
established to evaluate the performance of the
Manager and other third-party service providers
engaged by Titan. The Committee is chaired by Gaenor
Bagley, and comprises all the independent Directors.
The Committee’s responsibilities are:
•
to review, at least annually, the contractual
relationships with the Manager and terms of the
management agreement, to make sure they are
competitive and in the best 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
Manager and describe its decisions and rationale in
the annual report;
•
to consider whether the appointment of the Manager
continues to be in the best interests of shareholders;
•
if it considers it necessary or appropriate, to
negotiate/re-negotiate terms with the Manager;
•
to review the standard of services provided by
the Manager, whether under the terms of the
management agreement, the non-investment
services agreement (which covers administrative,
company secretarial, sales and marketing activities)
or simply as part of a non-contractual obligation of
understanding;
•
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 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 points of conflict which may arise
forthe providers of services to the Company.
The Committee met three times during the year. In
addition to the performance matters considered
as part of the strategic review, the Committee
considered in detail the performance of the Portfolio
Manager under the terms of both the Non-Investment
Services Agreement and the Investment Management
Agreement. At each meeting the Committee identified
specific actions to address performance issues and
followed up on previously agreed actions.
Specific areas of focus included:
•
plans to address gaps in the Octopus Ventures team
as a result of team turnover and to address identified
skills gaps;
•
additional information and reporting requirements
to enable the Board to enhance its monitoring of
performance, sustainability, liquidity and realisations
more effectively;
•
monitoring of agreed actions relating to compliance
with Consumer Duty legislation;
•
proposals for mitigating actions in response to service
performance issues;
•
plans for increased administration support given the
increased numbers of Board, committee and strategy
meetings; and
•
review of performance reports from certain of the
other advisors to the fund.
The Committee has been conducting a thorough
review of the performance of the Manager over the last
twelve months and has concluded that the continued
appointment of Octopus remains in the best interests
of shareholders while the strategic review is ongoing.
Gaenor Bagley
Management Engagement Committee Chair
28 April 2025
Management Engagement Committee report
Octopus Titan VCT plc — Annual report and financial statements 2024 65
Introduction
This report has been prepared in accordance with
Schedule 8 to the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013, in respect of the year ended
31December 2024. The reporting requirements entail
two sections be included, a policy report and an annual
remuneration report, which are presented below.
Titan’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 74 to 80.
Consideration by the Directors of matters
relating toDirectors’ remuneration
The Board has appointed the Nomination and
Remuneration Committee to consider remuneration;
historically this was considered by the Board. The
Directors have 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 Directors’ remuneration paid during
the period is set out on page 66. Titan does not have
a Chief Executive Officer, senior management or any
employees.
Directors’ Remuneration policy report
The Board consists entirely of Non-Executive Directors,
who meet regularly, at least six times a year, and
on other occasions as necessary, to deal with the
important aspects of Titan’s affairs. Directors are
appointed with the expectation that they will serve
for at least a period of three years. All Non-Executive
Directors retire at the first general meeting after
election and thereafter one-third of all Directors are
subject to retirement by rotation at subsequent AGMs.
Re-election will be recommended by the Board but is
dependent upon ashareholder vote.
Each Director received a letter of appointment
which is subject to termination by the Director or
Titan on three months’ notice in writing. Copies of
letters of appointment are held at the Company’s
registered office. None of the Directors are entitled to
compensation payable upon early termination of their
contract other than in respect of any unexpired notice
period.
Titan’s policy is that the fees payable to the Directors
should reflect the time spent by the Board on Titan’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 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.
Dueto the nature of Titan, there are no employees
other than the Directors and so no such issues to
consider when determining the Directors’ remuneration.
The maximum level of Directors’ remuneration is
currently fixed by Titan’s Articles of Association, not to
exceed £300,000 in aggregate.
Titan’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. The Articles of
Association also entitle the Directors to be repaid all
reasonable travelling, subsistence and other expenses
incurred by them respectively whilst conducting their
duties as Directors, however, no other remuneration or
compensation was paid or payable by Titan during the
year to any of the current Directors.
The Directors’ Remuneration policy was approved
by shareholders at the AGM held in June 2024.
Accordingly, the Policy will be put to shareholders for
approval at the 2027 AGM.
Annual remuneration report
This remuneration report is subject to approval by a
simple majority of shareholders at the AGM in June
2025, as in previous years.
Directors’ remuneration report
66 Octopus Titan VCT plc — Annual report and financial statements 2024
Statement of voting at the Annual General
Meeting
The 2023 Directors’ remuneration report was presented
to the AGM in June 2024 and received shareholder
approval following a vote on a show of hands. Of the
15,476,234 votes received, those for the resolution
totalled 83.14%, 7.97% of votes were at the discretion
of the Chair and 8.89% of the votes cast were against,
with 630,956 votes withheld.
The Directors‘ Remuneration policy was approved at
the AGM in June 2024. Of the 16,270,015 votes received,
those for the resolution totalled 86.65%, 7.76% of votes
were at the discretion of the Chair and 5.59% of the
votes cast were against, with 663,009 votes withheld.
The proxy forms returned to the registrars contained no
explanation for the votes against the resolution.
Shareholders’ views are always welcome and considered
by the Board. The methods of contacting the Board are
set out in the Directors’ Report on page 71.
Company performance
The Board is responsible for Titan’s investment strategy
and performance, although the management of Titan’s
investment portfolio is delegated to the Portfolio
Manager through the agreements as referred to in the
Directors’ Report.
The performance graph on page 51 also shows the
performance of the NAV and total value of Titan.
Further details of Titan’s performance are shown in the
table on page 19 in the Portfolio Manager’s Review.
Directors’ emoluments
(
audited
)
The amount of each Director’s fees for the period (on an annualised basis) were:
Year ended
31 December 2024
£’000
Year ended
31 December 2023
£’000 2024 change 2023 change 2022 change 2021 change 2020 change
Jane O’Riordan
40 37 8% 3% 9% 0% 0%
Tom Leader (Chair)
1
48 45 7% 7% 24%
1
3% 0%
Lord Rockley
2
43 40 8% 5% 19%
2
— —
Gaenor Bagley
3
40 37 8% 3% 9% — —
Julie Nahid Rahman
4
40 15 8% — — — —
Rupert Dickinson
5
27 — — — — — —
Total
238 174
1. Tom Leader was appointed as Chair on 14 June 2022.
2. Lord Rockley was appointed as a Director on 8 April 2021, and subsequently he was appointed as Audit Committee Chair on 14 June 2022.
3. Gaenor Bagley was appointed as a Director on 7 June 2021.
4. Julie Nahid Rahman was appointed as a Director on 1 August 2023.
5. Rupert Dickinson was appointed as a Director on 1 May 2024.
Directors’ remuneration report
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 67
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
Titan and no bonuses were or will be paid to the Directors.
The Chair of the Board and the Chair of the Audit Committee receive additional
remuneration over the basic Directors’ fee in recognition of the additional
responsibilities and time commitment required of their roles. Following a review, the
following fee rates were agreed with effect from 1 April 2024 (previous fees shown
in brackets): Chair of the Board £49,500 (£45,000), Chair of the Audit Committee
£44,000 (£40,000), and all other Directors £40,700 (£37,000).
Dividends paid to Directors in the year as a result of their shareholdings in Titan are
shown in Note 21 of the financial statements.
Expected fees
for the year to
31 December 2025
£
Chair
49,500
Chair of the Audit Committee
44,000
Non-Executive Director
40,700
Relative importance of spend on pay
The actual expenditure in the current year is as follows:
Year to
31 December 2024
£’000
Year to
31 December 2023
£’000
Total dividends paid
51,642 7 7,76 3
Total buybacks
37,986 32,422
Total Directors’ fees
238 174
Total expenses
25,151 27,346
There were no other significant payments during the 12-month period relevant to
understanding the relative importance of spend on pay.
Statement of Directors’ shareholdings
(
audited
)
There are no guidelines or requirements for Directors to own shares in Titan. The
interests of the Directors of Titan during the year (in respect of which transactions are
notifiable under Disclosure and Transparency Rule 3.1.2) in the issued Ordinary shares
of 0.1p each are shown in the table below:
Year to
31 December 2024
Year to
31 December 2023
Jane O’Riordan
155,868 152,379
Tom Leader
48,127 46,662
Lord Rockley
79,077 76,670
Gaenor Bagley
24,264 23,526
Julie Nahid Rahman
4,466 4,466
Rupert Dickinson
2
n/a n/a
1. Julie Nahid Rahman was appointed as a Director on 1 August 2023.
2. Rupert Dickinson was appointed as a Director on 1 May 2024.
There have been no changes in the Directors’ share interests between 31December2024
and the date of this report.
All of the Directors’ shares were held beneficially except Jane O’Riordan who holds
41,267 shares in a nominee account.
Any information required by legislation in relation to executive directors (including
a Chief Executive Officer) or employees has been omitted because Titan has neither
and so it is not relevant.
By Order of the Board
Tom Leader
Chair
28 April 2025
Directors’ remuneration report
continued
68 Octopus Titan VCT plc — Annual report and financial statements 2024
Directors’ report
The Corporate Governance Report on pages 55 and
56 and the Audit Committee Report on pages 61 to 63
form part of this Directors’ Report.
The Directors consider that the annual report and
financial statements, taken as a whole, is fair, balanced
and understandable and provides the information
necessary for shareholders to assess Titan’s position,
performance, business model and strategy.
Directors
Brief biographical notes on the Directors are given on
pages 53 and 54.
Jane O’Riordan and Lord Rockley will be standing for
re-election this year.
Directors’ and Officers’ liability insurance
Titan 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 Titan.
Management
Titan has in place an agreement with Octopus AIF
Management Limited to act as Manager. Octopus AIF
Management Limited has in turn appointed Octopus
Investments Limited to act as Portfolio Manager to
Titan (responsible for portfolio management and the
day-to-day running of Titan). These agreements are
central to Titan’s ability to continue in business. The
principal terms of the management agreement with
Octopus are set out in Notes 3 and 19 of the financial
statements.
Octopus also provides secretarial and administrative
services to Titan. NatWest Trustee and Depositary
Services Limited have been appointed as depositary
to Titan, having transferred from BNP Paribas Trust
Corporation UK Limited on 31 October 2024. NatWest
provides cash monitoring, safekeeping of financial
instruments and other assets and oversight duties.
The Investment Management Agreement and the Non-
Investment Services Agreement may be terminated
on written notice of not less than three years, so as to
expire at the end of the notice period, subject to earlier
termination with 12 months notice in the event of under
performance of the Company or the departure of certain
members of Octopus. Given the poor performance of
the fund and the turnover in the Octopus Ventures team
referred to in the Chair’s statement and the Portfolio
Manager’s review in this annual report, the 12 month
notice period currently applies.
The Directors confirm that, in their opinion, the
continuing appointment of Octopus as Portfolio
Manager is in the best interests of the shareholders
while the strategic review is ongoing. Theyalso
considered the fees payable to Octopus, together with
the standard of other services provided. Details of the
fees paid to Octopus in respect of services provided are
detailed in Note 19 of the financial statements.
No Director has an interest in any contract to which
Titan is a party.
Titan has established a performance incentive
scheme whereby Octopus is entitled to an annual
performance-related incentive fee if certain
performance criteria are met. Further details of this
scheme are disclosed within Note 19 of the financial
statements.
Through the agreements described above, the
investment decisions and routine management
decisions such as the payment of standard running
costs are delegated to Octopus.
Whistleblowing
Please refer to page 39 for our statement on
whistleblowing.
Bribery Act
Please refer to page 39 for our statement on the
BriberyAct.
VCT regulation
Compliance with required rules and regulations is
considered when all investment decisions are made.
Titan is further monitored on a continual basis to ensure
compliance. The main criteria to which it must adhere
are detailed on page 108.
Titan will continue to ensure its compliance with the
qualification requirements.
The Directors present their report and the audited financial statements for the year ended
31 December 2024.
Octopus Titan VCT plc — Annual report and financial statements 2024 69
Directors’ report
Environmental matters and greenhouse gas
emissions
Refer to pages 35 to 39 in the Strategic Report for
our RIpolicy and greenhouse gas emissions. As the
company 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).
Share capital
Titan’s Ordinary share capital as at 31 December 2024
comprised 1,647,212,355 (2023: 1,593,601,092) Ordinary
shares of 0.1p each. No shares were held in Treasury.
Share issues
During the period 120,898,782 shares were issued.
On 19 October 2023, an Offer for subscription
to raise up to £125 million in aggregate with an
over-allotment facility of £75 million was launched.
Asat31December2023, 55,469,950 shares had been
issued for a total gross consideration of £38 million.
ThisOffer closed on 5 April 2024.
As a result of the Company’s review of strategy
there was no Offer for subscription in the year ended
31December 2024.
Share buybacks
During the 12-month period, Titan purchased 67,287,519
shares, with a nominal value of £67,288, for cancellation
at a weighted average price of 56.5p per share for a total
consideration of £38 million, which represents 4.2% of
the shares in issue at the prior year end (2023: 46,895,882
shares, with a nominal value of £46,896, for cancellation
at a weighted average price of 69.1p per share for a total
consideration of £32 million). These were repurchased in
accordance with Titan’s share buyback facility in order to
assist the marketability of the shares and to prevent the
shares trading at a wide discount to the NAV.
Post-balance sheet events
A full list of post-balance sheet events since
31December 2024 can be found in Note 17 of the
financial statements on page 99.
Rights attaching to the shares and
restrictions onvoting and transfer
Subject to any suspension or abrogation of rights
pursuant to relevant law or Titan’s Articles of
Association, the shares confer on their holders the
following principal rights:
a) the right to receive out of profits available for
distribution 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 shareholders in a general meeting
or in the case of an interim dividend in an amount
determined by the Board). All dividends unclaimed
for a period of 12 years after having become due for
payment are forfeited automatically and cease to
remain owing by Titan;
b) the right, on a return of assets on a liquidation,
reduction of capital or otherwise, to share in the
surplus assets of Titan 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 Titan. 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 Titan’s Articles of Association with
a notice pursuant to s793 of the Companies Act 2006
(notice by Titan requiring information about interests in
its shares), Titan can, until the default ceases, suspend
the right to attend and speak and vote at a general
meeting. If the shares represent at least 0.25% of their
class, Titan 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 Titan’s Articles of
Association and in company law (principally the
Companies Act 2006).
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).
continued
70 Octopus Titan VCT plc — Annual report and financial statements 2024
Rights attaching to the shares and
restrictions on voting and transfer continued
Any member may transfer all or any of his shares,
subject in the case of certificated shares to the rules set
out in Titan’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 Titan 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 no
squeeze-out and sell out rules relating to the shares in
Titan’s Articles of Association, shareholders are subject
to the compulsory acquisition provisions in s974 to s991
of the Companies Act 2006.
Directors’ authority to allot shares, to
disapply pre-emption rights
The authority proposed under Resolution 8 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 Titan
in a tax-efficient manner without it having to incur
substantial costs. Any consequent modest increase
in the size of Titan 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
Titan’s Investment policy and may be used, in part, to
purchase Ordinary shares in the market.
Resolution 8 renews the Directors’ authority to allot
Ordinary shares. Such authority would expire 15 months
from the passing of the Resolution, unless previously
renewed, varied or revoked by Titan in general meeting,
giving the Directors authority to allot up to 25% of
Titan’s issued share capital as 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 fundraising activities of Titan.
Resolution 9 renews the Directors’ authority to allot
Ordinary shares in connection with the Dividend
Re-Investment Scheme up to 5% of Titan’s issued share
capital as at the date of the Notice of AGM. Such
authority would expire 15 months from the passing of
the Resolution, unless previously renewed, varied or
revoked by Titan in general meeting. The Board intends
to utilise this authority to issue shares from time to time
under the DRIS.
Resolutions 10 and 11 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 expiry of 15 months from the passing of these
Resolutions, unless previously renewed, varied or
revoked by Titan in general meeting, to issue Ordinary
shares for cash without pre-emption rights applying by
way of an offer to existing shareholders. 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. This authority is in addition to existing
authorities.
Directors’ authority to make market
purchasesofitsown shares
The authority proposed under Resolution 12 is required
so that the Directors may make purchases of up to
246,917,132 Ordinary shares, representing approximately
14.99% of Titan’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 12 will expire
15 months from the date of the passing of the
Resolution unless renewed, varied or revoked by Titan
in a 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.
Directors’ report
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 71
Substantial shareholdings
As at the date of this report, no disclosures of major
shareholdings had been made to Titan under Disclosure
and Transparency Rule 5 (Vote Holder and Issuer
Notification Rules).
Independent auditor
BDO LLP were originally appointed as auditor on
15March 2018 and offer themselves for re-appointment
as auditor. A resolution to re-appoint BDO LLP will be
proposed at the forthcoming AGM.
As far as the Directors are aware, there is no relevant
audit information of which the auditor is unaware and
the Directors have taken all the steps they ought to
have taken as a Director in order to make them aware
of any relevant audit information and to establish that
Titan’s auditor is aware of that information.
Financial risk management
Titan is exposed to the risks arising from its operational
and investment activities. Further details can be found
in the principal risks detailed on pages 46 to 49, and in
Note 16 of the financial statements.
Share buybacks
Subject to the provisions of the Companies Act 2006,
the Articles of Association of Titan and any directions
given by shareholders by Special Resolution, the
Articles of Association specify that the business of
Titan is to be managed by the Directors, who may
exercise all the powers of Titan, whether relating to the
management of the business or not. In particular, the
Directors may exercise on behalf of Titan its powers
to purchase its own shares to the extent permitted by
shareholders. Authority was given at Titan’s 2024 AGM
to make market purchases of up to 14.99% of the issued
Ordinary share capital at any time up to the 2025 AGM
and otherwise on the terms set out in the relevant
resolution, and renewed authority is being sought at
the 2025 AGM as set out in the Notice of AGM.
Relations with shareholders
Shareholders will have the opportunity to attend the
Annual General Meeting which will be held on 19 June
2025 at 12.00 noon. The meeting will be for voting
only. Titan will also be holding a virtual shareholders
event on 19 June 2025 at 12.00 noon. where there will
be a presentation by the Board and Portfolio Manager
as well as an opportunity to ask questions. To register
please see octopustitanvct.com.
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,
EC1N2HT. Alternatively, the team at Octopus will be
pleased to answer any questions you may have and can
be contacted on 0800 316 2295.
Consumer Duty
The Directors are cognisant of the Portfolio Manager’s
obligations to comply with the FCA’s Consumer Duty
rules and principles that came into force in 2023.
Firms subject to Consumer Duty must ensure they
are acting to deliver good outcomes and that this is
reflected in their strategies, governance, leadership
and policies. Titan is not directly captured by Consumer
Duty, however the Directors will continue to receive
updates on how the Portfolio Manager is meetings its
obligations.
Information given in the Strategic Report
Information on dividends and likely future development
has not been given in the Directors’ Report as
equivalent disclosure has been given in the Strategic
Report.
The Directors’ Report was approved on behalf of the
Board on 28 April 2025.
Tom Leader
Chair
28 April 2025
Directors’ report
continued
72 Octopus Titan VCT plc — Annual report and financial statements 2024
Financials
Directors’ responsibilities statement 73
Independent auditor’s report 74
Income statement 81
Balance sheet 82
Statement of changes in equity 83
Cash flow statement 85
Notes to the financial statements 86
Investment portfolio 103
Shareholder information and contact details 108
Glossary of terms 112
Directors and advisers 113
Notice of Annual General Meeting 114
Octopus Titan VCT plc — Annual report and financial statements 2024 73
The Directors are responsible for preparing the
Strategic Report, the Directors’ Report, theDirectors’
Remuneration Report and the financial statements in
accordance with applicable law and regulations. They
are also responsible for ensuring that the annual report
and financial statements include information required
by the Listing Rules of the Financial ConductAuthority.
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 (GAAP),
including Financial Reporting Standard 102 – ‘The
Financial Reporting Standard Applicable in the United
Kingdom and Republic of Ireland’ (FRS 102), (United
Kingdom accounting standards and applicable law).
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 stateof 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 anymaterial
departures disclosed and explained in the financial
statements;
•
prepare the financial statements on the going
concern basis unless it is inappropriate topresume
that the Company will continue in business; and
•
prepare a Strategic Report, Directors’ Report and
Directors’ Remuneration Report whichcomply with
the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position
of the Company and enable them to ensure that the
financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
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 and financial statements in accordance
with applicable law and regulations. Having taken
advice from the Audit Committee, the Directors are
of the opinion that this report as a whole provides
the necessary information to assess the Company’s
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 financial statements (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
Tom Leader
Chair
28 April 2025
Directors’ responsibilities statement
74 Octopus Titan VCT plc — Annual report and financial statements 2024
Independent auditor’s report
to the membersofOctopus Titan 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 December 2024 and of its
loss for the year then ended;
•
have been properly prepared in accordance with
United Kingdom Generally Accepted Practice; and
•
have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements of Octopus
Titan VCT plc (the ‘Company’) for the year ended
31 December 2024 which comprise the Income
statement, the Balance sheet, the Statement of
changes in equity, the Cashflow 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 our
reporting to the Audit Committee.
Independence
Following the recommendation of the Audit
Committee, we were appointed by the Board of
Directors on 15 March 2018 to audit the financial
statements for the year ended 31 October 2018 and
subsequent financial periods. The period of total
uninterrupted engagement including retenders and
reappointments is seven years, covering the years
ended 31 October 2018 to 31 December 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 checking that the Company was meeting its
requirements to retain VCT status;
•
Consideration of the Directors’ assessment of
expected future compliance with VCT legislation,
the absence of bank debt, 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 forecasted 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 including
the stress tests applied to confirm that the Company
has sufficient capital and liquidity to continue its
operations effectively.
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.
Octopus Titan VCT plc — Annual report and financial statements 2024 75
to the membersofOctopus Titan VCT plc
Independent auditor’s report
Overview
2024 2023
Key audit matters
Valuation of unquoted
investments
P P
Materiality
Company financial statements as a whole
£16,600,000 (2023: £19,800,000 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 year 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.
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 Portfolio Manager, who
is remunerated based on the
value of the net assets of the
Company as shown in note 19.
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 appropriate in the circumstances under the International Private
Equity and Venture Capital Valuation (“IPEV”) Guidelines and the applicable accounting standards; and
•
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.
76 Octopus Titan VCT plc — Annual report and financial statements 2024
Key audit matter How the scope of our audit addressed the key audit matter
For these reasons we
considered the valuation of
unquoted investments to be a
key audit matter.
For investments sampled that were valued using the price of recent investment or milestone analysis we:
•
Verified the 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 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;
•
Considered whether the price of recent investment is supported by alternative valuation techniques; and
•
For pre-revenue or startup investee companies, we assessed their performance against established milestones by
reviewing their board reports or progress updates.
For investments sampled that were valued using the 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
multiple 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
Considering the level of estimation uncertainty and the procedures performed to address this risk, we consider the
unquoted investment valuations to be appropriate.
Independent auditor’s report
continued
to the membersofOctopus Titan VCT plc
Octopus Titan VCT plc — Annual report and financial statements 2024 77
Independent auditor’s report
continued
to the membersofOctopus Titan VCT plc
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 16,600,000 19,800,000
Basis for determining
materiality
2% of Net assets
Rationale for the
benchmark applied
In setting materiality, we have considered the nature and disposition
of the investment portfolio. Given that the VCT’s portfolio is
comprised of unquoted investments which would typically have a
wider 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 12,450,000 14,900,000
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 £830,000 (2023: £990,000). 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 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.
78 Octopus Titan VCT plc — Annual report and financial statements 2024
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 56; 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 56.
Other Code provisions
•
Directors' statement on fair, balanced and
understandable set out on page 68;
•
Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set
out on pages 46-49;
•
The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on page 63; and
•
The section describing the work of the Audit
Committee set out on pages 61-63.
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
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.
Independent auditor’s report
continued
to the membersofOctopus Titan VCT plc
Octopus Titan VCT plc — Annual report and financial statements 2024 79
Independent auditor’s report
continued
to the membersofOctopus Titan VCT plc
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
Based on:
•
Our understanding of the Company and the industry
in which it operates;
•
Discussion with the Portfolio Manager and those
charged with governance; and
•
Obtaining and understanding of the Company’s
policies and procedures regarding compliance with
laws and regulations;
we 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 February 2018 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 Portfolio Manager and those
charged with governance relating to the existence of
any non-compliance with laws and regulations;
•
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 throughout the year for instances of
non-compliance with laws and regulations.
80 Octopus Titan VCT plc — Annual report and financial statements 2024
Independent auditor’s report
continued
to the membersofOctopus Titan VCT plc
Fraud
We assessed the susceptibility of the financial
statement to material misstatement including fraud.
Our risk assessment procedures included:
•
Enquiry with the Portfolio 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; and
•
Discussion amongst the engagement team as to
how and where fraud might occur in the financial
statements.
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:
•
Considered the opportunity and incentive to
manipulate accounting entries and target tested
relevant adjustments made in the year end financial
reporting process;
•
Reviewed for significant transactions outside the
normal course of business;
•
Reviewed the significant judgements and estimates
made in the valuation of unquoted investments and
considered 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.
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.
Chris Meyrick (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
28 April 2025
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
Octopus Titan VCT plc — Annual report and financial statements 2024 81
Year to 31 December 2024 Year to 31 December 2023
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gain/(loss) on disposal of fixed asset investments 10 — 5,184 5,184 — (1,870) (1,870)
Gain on disposal of current asset investments — 563 563 — 355 355
Loss on valuation of fixed asset investments 10 — (136,894) (136,894) — (131,655) (131,655)
Gain on valuation of current asset investments — 4,439 4,439 — 8,098 8,098
Investment income 2 4,215 — 4,215 4,467 — 4,467
Investment management fee 3 (954) (18,125) (19,079) (1,054) (20,028) (21,082)
Other expenses 4 (6,072) — (6,072) (6,264) — (6,264)
Foreign exchange translation — (5) (5) — (1,548) (1,548)
Loss before tax (2,811) (144,838) (147,649) (2,851) (146,648) (149,499)
Tax 6 — — — — — —
Loss after tax (2,811) (144,838) (147,649) (2,851) (146,648) (149,499)
Loss per share – basic and diluted 8 (0.2)p (8.8)p (9.0)p (0.2)p (9.7)p (9.9)p
•
The ‘Total’ column of this statement is the profit and loss account of Titan. The supplementary 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.
•
Titan has only one class of business and derives its income from investments made in shares and securities, and from bank and money market funds.
Titan has no other comprehensive income for the year.
The accompanying notes form an integral part of the financial statements.
Income statement
82 Octopus Titan VCT plc — Annual report and financial statements 2024
Balance sheet
As at 31 December 2024 As at 31 December 2023
Notes £’000 £’000 £’000 £’000
Fixed asset investments 10 640,797 791,403
Current assets:
Money market funds 12 93,523 91,172
Corporate bonds 12 90,247 108,669
Applications cash
1
13 22 17,842
Cash at bank 213 2,970
Debtors 11 8,412 1,218
192,417 221,871
Creditors: amounts falling due within one year 13 (1,856) (19,530)
Net current assets 190,561 202,341
Net assets 831,358 993,744
Share capital 14 1,647 1,594
Share premium — 45,780
Capital redemption reserve 141 74
Special distributable reserve 1,056,537 1,025,614
Capital reserve realised (125,444) ( 89,5 7 0 )
Capital reserve unrealised (57,285) 51,674
Revenue reserve (44,238) (41,422)
Total equity shareholders’ funds 831,358 993,744
NAV per share 9 50.5p 62.4p
1. Funds raised from investors since Titan opened for new investment which have not been allotted as at year end.
The accompanying notes form an integral part of the financial statements.
The statements were approved by the Directors and authorised for issue on 28 April 2025 and are signed on their behalf by:
Tom Leader, Chair
Company Number 06397765
Octopus Titan VCT plc — Annual report and financial statements 2024 83
Statement of changes in equity
Share capital
£’000
Share premium
£’000
Capital
redemption
reserve
£’000
Special
distributable
reserve
1
£’000
Capital reserve
realised
1
£’000
Capital reserve
unrealised
£’000
Revenue
reserve
1
£’000
Total
£’000
As at 1 January 2024 1,594 45,780 74 1,025,614 (89,570) 51,674 (41,422) 993,744
Comprehensive income for the year:
Management fees allocated as capitalexpenditure — — — — (18,125) — — (18,125)
Current year gain on disposal of fixed asset investments — — — — 5,184 — — 5,184
Current year gain on disposal of current asset investments — — — — 563 — — 563
Loss on fair value of fixed assetinvestments — — — — — (136,894) — (136,894)
Gain on fair value of current assetinvestments — — — — — 4,439 — 4,439
Loss after tax — — — — — — (2,811) (2,811)
Foreign exchange translation — — — — — — (5) (5)
Total comprehensive income for the year — — — — (12,378) (132,455) (2,816) (147,649)
Contributions by and distributions toowners:
Share issue (includes DRIS) 120 76,664 — — — — — 76,784
Share issue costs — (1,893) — — — — — (1,893)
Repurchase of own shares (67) — 67 (37,986) — — — (37,986)
Dividends paid (includes DRIS) — — — (51,642) — — — (51,642)
Total contributions by and distributions to owners 53 74,771 67 (89,628) — — — (14,737)
Other movements:
Share premium cancellation — (120,551) — 120,551 — — — —
Prior year fixed asset gains now realised — — — — 7,473 (7,473) — —
Prior year current asset losses now realised — — — — (74) 74 — —
Transfer between reserves — — — — (30,895) 30,895 — —
Total other movements — (120,551) — 120,551 (23,496) 23,496 — —
Balance as at 31 December 2024 1,647 — 141 1,056,537 (125,444) (57,285) (44,238) 831,358
1. Reserves are available for distribution, subject to the restrictions tabled in Note 15 of the financial statements.
The accompanying notes form an integral part of the financial statements.
84 Octopus Titan VCT plc — Annual report and financial statements 2024
Statement of changes in equity
Share capital
£’000
Share premium
£’000
Capital
redemption
reserve
£’000
Special
distributable
reserve
1
£’000
Capital reserve
realised
1
£’000
Capital reserve
unrealised
£’000
Revenue
reserve
1
£’000
Total
£’000
As at 1 January 2023 1,368 92,896 27 887,288 (53,430) 160,634 (37,023) 1,051,760
Comprehensive income for the year:
Management fees allocated as capitalexpenditure — — — — (20,028) — — (20,028)
Current year loss on disposal of fixed asset investments — — — — (1,870) — — ( 1,8 70)
Current year gain on disposal of current asset investments — — — — 355 — — 355
Loss on fair value of fixed assetinvestments — — — — — ( 131,655 ) — (131,655)
Gain on fair value of current assetinvestments — — — — — 8,098 — 8,098
Loss after tax — — — — — — (2,851) (2,851)
Foreign exchange translation — — — — — — (1,548) (1,548)
Total comprehensive income for the year — — — — (2 1,5 43 ) (123,557) (4, 399) ( 149, 499)
Contributions by and distributions toowners:
Share issue (includes DRIS) 273 207,132 — — — — — 207,405
Share issue costs — (5,737) — — — — — (5,737)
Repurchase of own shares (47) — 47 (32,422) — — — (32,422)
Dividends paid (includes DRIS) — — — (77,763) — — — (77,763)
Total contributions by and distributions to owners 226 201,395 47 (110,185) — — — 91,483
Other movements:
Share premium cancellation — (248,511) — 248,511 — — — —
Prior year current asset losses now realised — — — — (355) 355 — —
Transfer between reserves — — — — ( 14,242) 14,242 — —
Total other movements — (248,511) — 248,511 (14,597) 14,597 — —
Balance as at 31 December 2023
1,594 45,780 74 1,025,614 (89,570) 51,674 (41,422) 993,744
1. Reserves are available for distribution, subject to the restrictions tabled in Note 15 of the financial statements.
The accompanying notes form an integral part of the financial statements.
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 85
Notes
Year to 31 December
2024
£’000
Year to 31 December
2023
£’000
Reconciliation of profit to cash flows from operating activities
Loss before tax
1
(147,649) (149,499)
Decrease in debtors
2
11 279 3,671
Decrease/(increase) in creditors 13 146 (440)
Gain on disposal of current asset investments 12 (563) (355)
Gain on valuation of current asset investments 12 (4,439) (8,098)
Gain on disposal of fixed asset investments 10 (5,184) (1,111)
Loss on valuation of fixed asset investments 10 136,894 131,655
Outflow from operating activities (20,516) (24,177)
Cash flows from investing activities
Sale of current asset investments 23,424 4,028
Purchase of fixed asset investments 10 (30,011) (97,650)
Proceeds from sale of fixed asset investments
3
10 41,432 45,637
Inflow/(outflow) from investing activities 34,845 (47,985)
Cash flows from financing activities
Movement in applications account 13 (17,820) (5,457)
Dividends paid (net of DRIS) (43,881) (58,210)
Purchase of own shares 14 (37,986) (32,422)
Share issues (net of DRIS) 69,025 187,852
Share issue costs (1,893) (5,737)
(Outflow)/inflow from financing activities (32,555) 86,026
Increase/(decrease) in cash and cash equivalents (18,226) 13,864
Opening cash and cash equivalents 111,984 98,120
Closing cash and cash equivalents 93,758 111,984
Cash and cash equivalents comprise
Cash at bank 213 2,970
Applications cash 13 22 17,8 42
Money market funds 12 93,523 91,172
Closing cash and cash equivalents 93,758 111,984
1. Loss before tax includes cashflows from dividends of £4.2 million (2023: £4.2 million).
2. Movement in debtors, net of disposal proceeds received in the year £41.4 million, with £40.9 million relating to current year disposals and £0.5 million relating to prior year disposals.
3. Of these proceeds, £12.4 million was distributed from Zenith Holding Company, a wholly owned subsidiary of Titan, to Titan during the year.
The accompanying notes form an integral part of the financial statements.
Cash low statement
86 Octopus Titan VCT plc — Annual report and financial statements 2024
Notes to the inancial statements
1. Principal accounting policies
Titan is a Public Limited Company (plc) incorporated
in England and Wales and its registered office is at 6th
Floor, 33 Holborn, London EC1N 2HT.
Titan has been approved as a Venture Capital Trust by
HMRC under Section 259 ofthe Income Taxes Act 2007.
The shares of Titan were first admitted to the Official List
ofthe UK Listing Authority and trading on the London
Stock Exchange on 28December2007 and can be found
under the TIDM code OTV2. Titan is premium listed.
The principal activity of Titan is to invest in a diversified
portfolio of UK smaller companies in order to generate
capital growth over the long term as well as an
attractive tax-free dividend stream.
The financial statements are presented in GBP (£) to the
nearest £’000. The functional currency is also GBP (£).
Some accounting policies have been disclosed in the
respective notes to the financial statements.
Basis of preparation
The financial statements have been prepared on a going
concern basis 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 (July 2022)’.
The principal accounting policies have remained
unchanged from those set out in Titan’s 2023 annual
report and financial statements. A summary of the
principal accounting policies is set outin the notes.
Titan presents its Income Statement in a tri-columnar
format to give shareholders additional detail of the
performance of Titan, split between items of a revenue
or capital nature as required by the SORP.
The preparation of the financial statements requires
management to make judgements and estimates that
affect the application of policies and reported amounts
of assets, liabilities, income and expenses. Estimates and
assumptions mainly relate to the fair valuation of the fixed
asset investments, particularly unquoted investments.
Estimates are based on historical experience and other
assumptions that are considered reasonable under the
circumstances. The estimates and the assumptions are
under continuous review with particular attention paid to
the carrying value of the investments.
Capital valuation policies are those that are most
important to the manifestation of Titan’s financial
position and that require the application of subjective
and complex judgements, often as a result of the
need to make estimates about the effects of matters
that are inherently uncertain and may change in
subsequent periods. The critical accounting policies
that are declared will not necessarily result in material
changes to the financial statements in any given period
but rather contain a potential for material change. The
main accounting and valuation policies used by Titan
are disclosed in the notes below. Whilst not all of the
significant accounting policies require subjective or
complex judgements, Titan considers that the following
accounting policies should be considered critical.
Titan has designated all fixed asset investments as
being held at fair value through profit or loss in line
with the exemption under FRS 102 for investment
companies, therefore all gains and losses arising from
investments held are taken to the Income Statement in
the period in which they occur. Accordingly, all interest
income, fee income, expenses and investment gains
and losses are attributable to assets designated as
being at fair value through profit or loss. Corporate
bonds (part of current asset investments) are held at
fair value through profit or loss.
Investments are regularly reviewed to ensure that
the fair values are appropriately stated. Quoted
investments are valued in accordance with the bid-price
on the relevant date, unquoted investments are valued
in accordance with current IPEV valuation guidelines,
although this does rely on subjective estimates such as
appropriate sector earnings or revenue-based multiples,
forecast results of portfolio companies, asset values of
subsidiary companies andliquidity or marketability of
the investments held.
Although Titan 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.
Revenue and capital
The revenue column of the Income Statement includes
revenue income and revenue expenses. 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
revenue (5%) and capital (95%) in line with the Board’s
expected long-term return in the form of income and
capital gains respectively from Titan’s investment
portfolio.
Octopus Titan VCT plc — Annual report and financial statements 2024 87
1. Principal accounting policies continued
Cash and cash equivalents
Cash and cash equivalents comprises cash at bank and
other highly liquid short-term investments with a maturity of
three months or less at the date of acquisition and subject
to insignificant changes in fair value. For the purpose of the
Cash Flow Statement, cash and cash equivalents comprises
cash at bank and money market funds (MMFs). Thecarrying
amount approximates fair value.
Financing strategy and capital structure
Capital management is monitored and controlled by
forecasting income and expenditure over both the short
and medium-term to enable investments to be made
whilst maintaining short-term liquidity. The investments
being managed include equity and fixed-interest
investments, and short-term liquidity comprises cash
and cash equivalents including debtors and creditors.
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. Titan currently has no borrowings nor
does it anticipate that it will have any borrowing facilities
in the future to fund the acquisition of investments.
Titan does not have any externally imposed capital
requirements.
The value of the managed capital is indicated in
Note15. The Board considers the distributable reserves
and the total return for the period when recommending
a dividend. Inaddition, the Board is authorised to make
market purchases up to a maximum of 14.99% of the
issued Ordinary share capital of Titan in accordance
with Special Resolution 12 in order to maintain sufficient
liquidity in the VCT.
Financial instruments
Titan’s principal financial assets are its investments
and the policies in relation to those assets are set out
in Note 10. Financial liabilities and equity instruments
are classified according to the substance of the
contractual arrangements entered into. An equity
instrument is any contract that evidences a residual
interest in the assets of the entity after deducting all
of its financial liabilities. Where the contractual terms
of share capital do not have any terms meeting the
definition of a financial liability then this is classed
as an equity instrument. Dividends and distributions
relating to equity instruments are debited directly
toequity.
Judgements in applying accounting policies
andkeysourcesof estimationuncertainty
This is addressed in Note 10.
Reserves
Share capital – represents the nominal value of shares
that have been issued.
Share premium – includes any premium received on
issue of share capital. Any transaction costs directly
associated with the issuing of shares are deducted from
share premium.
Special distributable reserve – includes realised profits
and cancelled share premium available for distribution,
subject to compliance with VCT rules.
Capital redemption reserve – represents the nominal
value of shares bought back from shareholders and
cancelled.
Capital reserve realised – arises 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.
Capital reserve unrealised – arises when Titan
revalues the investments held at the end of the period.
Any gains or losses arising are credited/charged to the
capital reserve unrealised.
Revenue reserve – revenue profits and losses are
credited and charged to this account.
Subsidiaries
Zenith Holding Company is a wholly owned subsidiary
of Titan, but owing to the exemptionpermitted
under FRS 102 to not have to consolidate investment
companies held as part of an investment portfolio
(Section 9 of FRS 102, paragraphs 9.9(b) and 9.9B), Titan
has not consolidated the assets and liabilities of Zenith
Holding Company. Zenith Holding Company made a
profit of £899,000 during the year to 31 October 2024.
(2023: profit of £301,000) and its aggregate capital
and reserves during the year amounted to £12,573,000
(2023: £11,674,000).
Notes to the inancial statements
continued
88 Octopus Titan VCT plc — Annual report and financial statements 2024
2. Investment income
Accounting policy
Investment income includes interest earned on money market funds.
Dividendincome is shown net of any related tax credit.
Dividends receivable are brought into account when Titan’s right to receive
payment is established and there is no reasonable doubt that payment will
be received. Fixed returns on debt and money market funds are recognised
so as to reflect the effective interest rate, provided there is no reasonable
doubt that payment will be received in due course.
Disclosure
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Money market funds 4,215 4,154
Loan note interest receivable — 313
Total investment income 4,215 4,467
In the current year, accrued loan note interest income is treated to be included in
the fair value of investments. The opening balance of accrued loan interest has
been reclassified to be included in the fair value of investments. This reclassification
amends the balance previously reported as of 31 December 2023.
3. Investment management fees
Accounting policy
For the purposes of the revenue and capital columns in the Income
Statement, the management fee has been allocated 5% to revenue and
95% to capital, in line with the Board’s expected long-term return in the
form of income and capital gains respectively from Titan’s investment
portfolio.
Disclosure
Year to 31 December 2024 Year to 31 December 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management fee 954 18,125 19,079 1,054 20,028 21,082
The Portfolio Manager provides investment management services through agreements
with Octopus AIF Management Limited and Titan. It also provides non-investment
services to Titan under a non-investment services agreement. No compensation is
payable if the agreement is terminated by either party, if the required notice period is
given. Thefee payable, should insufficient notice be given, will be equal to the fee that
would have been paid should continuousservice be provided, or the required notice
period was given. Thebasis upon whichthe management fee is calculated is disclosed
within Note 19 of the financialstatements.
4. Other expenses
Accounting policy
Other expenses are accounted for on an accruals basis and are charged
wholly to revenue.
The transaction costs incurred when purchasing or selling assets are
written off to the Income Statement in the period that they occur.
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Ongoing adviser and non-advised charges 2,111 2,370
Non-investment services fee
1
2,078 2,020
Other fees 780 480
Directors’ remuneration
2
263 192
Audit fees 204 191
Registrar’s fees 196 200
Depositary fees 187 270
Listing fees 136 401
Directors and Officers (D&O) insurance 117 123
Impairment of accrued loan note interest receivable — 17
Total 6,072 6,264
1. For further information please see note 19.
2. Includes employers’ NI.
Notes to the inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 89
4. Other expenses continued
Total ongoing charges are capped at 2.5% of net assets. For the year to
31December2024, the ongoing charges were 2.5% of net assets (2023: 2.4%). This
is calculated by summing the expenses incurred in the period (excluding ongoing IFA
charges and non-recurring expenses) divided by the average NAV throughout the period.
5. Directors’ remuneration
Total Directors’ fees paid during the year were £238,000 (2023: £174,000). Employers’
National Insurance contributions paid during the year were £25,000 (2023: £18,000).
Thehighest paid Director received £48,000 (2023: £45,000). None of the Directors
received any other remuneration or benefit from Titan during the period. Titan has
no employees other than Non-Executive Directors. The average number of Non-
Executive Directors in the period was six (2023: five).
6. Tax on ordinary activities
Accounting policy
Corporation tax payable is applied to profits chargeable to corporation
tax, if any, at the current 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 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 infinancialstatements.
Disclosure
The corporation tax charge for the period was £nil (2023: £nil).
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Loss on ordinary activities before tax (147,649) (149,499)
Current tax at 25% (2023: 23.5%) (36,912) (35,163)
Effects of:
Non-taxable income (1,054) (977)
Non-taxable capital loss 31,677 29,418
Non-deductible expenses 55 71
Zenith distribution
1
3,100 —
Excess management expenses on which deferred tax
not recognised
3,134 7,070
Tax rate differences
2
— (419)
Total current tax charge — —
1. £12.4 million was distributed from Zenith Holding Company to Titan in the year which is taxable income
for Titan.
2. Tax rate difference in the year to 31 December 2023 due to tax charge for the year being calculated at
19% and excess management expenses on which deferred tax is not recognised being calculated at 25%.
Unrelieved tax losses of £227,486,000 (2023: £214,949,000) are estimated to be
carried forward at 31December2024 (subject to completion of Titan’s tax return)
and areavailable for offset against future taxable income, subject to agreement
with HMRC. Titan has not recognised the deferred tax asset of £56,871,000 (2023:
£53,737,000) in respectof 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.
Approved VCTs are exempt from tax on capital gains. As the Directors intend for
Titan to continue to maintain its approval as a VCT through its affairs, no current
deferred tax has been recognised in respect of any capital gains or losses arising on
therevaluation or disposal of investment.
Notes to the inancial statements
continued
90 Octopus Titan VCT plc — Annual report and financial statements 2024
7. Dividends
Accounting policy
Dividends payable are recognised as distributions in the financial
statements when Titan’sliability to make the payment has been
established. This liability is established on therecord date, the date on
which those shareholders on the share register are entitled tothe dividend.
Disclosure
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Dividends paid in the year
Previous year’s second interim dividend – 1.9p
(2023:3.0p) 31,876 46,127
Current year’s interim dividend – 1.2p
(2023:2.0p) 19,767 31,636
Total 51,643 7 7,76 3
Dividends in respect of the year
Interim dividend – 1.2p (2023: 2.0p) 19,767 31,636
Second interim dividend – 0.5p (2023: 1.9p) 8,236 31,876
Total 28,003 63,512
The figures above include dividends elected to be reinvested through the DRIS.
The second interim dividend of 0.5p for the period ending 31 December 2024 will be
paid on 29May 2025 to shareholders on the register on 25 April 2025, this equates to
1% of the Company’s opening NAV per share.
8. Earnings per share
Year to 31 December 2024 Year to 31 December 2023
Revenue Capital Total Revenue Capital Total
Loss attributable to
Ordinary shareholders
(£’000)
(2,811) (144,838) (147,649) (2,851)
(146,648)
(149,499)
Loss per Ordinary
share (p)
(0.2)p (8.8)p (9.0)p (0.2)p (9.7 )p (9.9)p
The total loss per share is based on 1,644,900,726 (2023: 1,506,111,802) Ordinary
shares, being the weighted average number of Ordinary shares in issue during
theyear.
There are no potentially dilutive capital instruments in issue and so no diluted
return per share figures are relevant. The basic and diluted earnings per share are
thereforeidentical.
9. Net asset value per share
31 December
2024
31 December
2023
Net assets (£) 831,358,000 993,744,000
Ordinary shares in issue 1,647,212,355 1,593,601,092
NAV per share (p) 50.5 62.4
Notes to the inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 91
10. Fixed asset investments
Accounting policy
Titan’s principal financial assets are its fixed asset 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).
These investments are 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 investment strategy. Titan’s investments are measured at subsequent reporting dates at fair value.
In the case of unquoted investments, fair value is established by using measures of value such as price of recent transaction, earnings or revenue-based multiples,
discounted cash flows and net assets. This is consistent with IPEV capital valuation guidelines. Where price ofrecent transaction is used, the valuation is calibrated to
a validmethodology.
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. Fixed returns on non-equity shares and debt securities which are held at fair value are computed using the effective interest rate, to
distinguish between the interest income receivable and other fair value movements arising on these instruments (which are both disclosed as holding gains within the
capital 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 Titan’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 Titan 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.
Titan’squoted investments are included in Level 1.
Level 2: Inputs for similar assets or liabilities other than the quoted prices included in Level1that are directly or indirectly observable, which exist for the duration of the period
ofinvestment. Titan 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. Titan’s unquoted investments are included in Level 3 in the current and prior year.
During the last year, there have been no transfers across the various Levels throughout the portfolio. Note, there is only one asset which is valued using Level 1 inputs.
Notes to the inancial statements
continued
92 Octopus Titan VCT plc — Annual report and financial statements 2024
10. Fixed asset investments continued
Fair value hierarchy continued
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
yearto31 December 2024 are summarised below and in Note 16.
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).
Allinvestmentsheld by Titan 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.
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 IPEV guidelines:
(i) the price of a recent investment (PRI), if resulting from an orderly transaction, is
assumed 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. This may result in
calibrating the PRI to account for the aforementioned factors. Where necessary, we
may rely on PRI for certain investments where other valuation methodologies may
not be possible, or calibration confirms the PRI is appropriate notably where there are
no current or short-term future revenues expected, and no other valuation approach
is appropriate;
(ii) where a recent transaction is not deemed to be representative of fair value, a
market approach may be considered. This technique involves the application
of an appropriate multiple to a performance measure (typically revenue, but
potentially also EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortisation)) in order to derive the value of the business:
–
appropriate multiples will usually be derived by reference to a peer group
of current market-based multiples, 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
–
calibration to the PRI validates the valuation techniques using
contemporaneous market inputs and may be further adjusted to reflect the
trading performance of the portfolio company versus expectations as at
theinvestment date;
(iii) 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
atfair value when Titan receives the right to the premium and when considered
recoverable;
(iv) for investments in early or development stages, where there are no current or
short-term future revenues expected, the most appropriate valuation approach
to measure fair value may be based on calibrating the latest pricing round using
qualitative milestones. These milestones provide a directional indication of the
movement in fair value, which we have sensitised by a standardised percentage,
applied in 25% increments; and
(v) 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.
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 Titan. All investments are initially recognised at
transaction price 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 written off. Where the value of an investment
has fallen permanently below the price of recent investment, the loss is treated as a
realised loss, even though the investment is still held. The Board assesses the portfolio
for such investments and, after agreement with the Portfolio Manager, will agree the
values that represent the extent to which an investment loss has become realised.
Thisisbased upon an assessment of objective evidence of that investment’s future
prospects, todetermine whether there is potential for the investment to recover
invalue.
Notes to the inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 93
10. Fixed asset investments continued
The following table summarises the various valuation methodologies used to value
Level 3 instruments, the inputs and the sensitivities applied and the impact of those
sensitivities to the unobserved inputs.
Valuation
basis/
methodology
Number of
companies
valued by
approach
Percentage
of companies
valued by
approach
Inputs to be
sensitised
Fair value at
31December
2024
£m
Fair value
impact of
sensitivities
£m
Calibrated
Price of Recent
Investment
1
24 17% n/a 106.2 n/a
Market
Approach
– revenue
multiple
30 22%
Market
multiple +/-
10%
341.3 34.1 / (34.1)
Probability
weighted
approach
2
33 24% n/a 100.2 n/a
Milestone
Approach
25 18%
+/- 25%
milestone
achievement
91.0 20.4 / (30.1)
Write-off 26 19% n/a – n/a
1. Sensitivity analysis has not been provided for inputs to the Calibrated Price of Recent Investment
valuation methodology as it references external pricing datapoints in recent investment rounds. If the
Fair Value of the investments valued using Calibrated Price of Recent Investment is sensitised by +/- 10%
the Fair Value would increase or decrease by £10.6 million.
2. Sensitivity analysis has not been provided for inputs to the Probability Weighted Approach valuation
methodology as each investment valued using this approach has a unique set of expected outcomes and
probability weightings. If the Fair Value of the investments valued using Probability Weighted Approach is
sensitised by +/- 10% the Fair Value would increase or decrease by £10.0 million.
To ensure the accuracy and robustness of fair value assessments for fixed assets,
particularly those involving Level 3 inputs, a dedicated Valuation Committee reviews
all portfolio company valuations. The Valuation Committee rigorously challenges
the Valuation Team's assumptions and methodologies, leveraging the expertise of its
members, who include both internal and external professionals with the necessary
technical knowledge and experience to provide robust oversight and guidance.
Disclosure
Level 1:
Quoted
investments
£’000
Level 3:
Unquoted
investments
£’000
Total
£’000
Valuation and net book amount:
Book cost 17,168 735,874 753,042
Cumulative revaluation (16,158) 54,519 38,361
Valuation at 1 January 2024 1,010 790,393 791,403
Movement in the year:
Purchases at cost — 35,918 35,918
Disposal proceeds
1
(17) (54,797) (54,814)
Gain on disposal of investments
2
(46) 5,230 5,184
Revaluation in year (456) (136,438) (136,894)
Valuation at 31 December 2024 491 640,306 640,797
Book cost at 31 December 2024 12,195 727,769 739,964
Cumulative revaluation at 31December 2024 (11,704) (87,463 ) (99,167 )
Valuation at 31 December 2024 491 640,306 640,797
1. Total proceeds realised from exits during the year amounted to £54.8 million. This includes £28.5 million in
cash proceeds received upon exit, £5.9 million in equity proceeds received upon disposal, £8.0 million of
proceeds deferred to future years and a £12.4 million distribution received from Zenith Holding Company.
2. Deferred proceeds no longer receivable were written off during the year and have been netted against
the (Loss)/gain on disposal of investments. Deferred proceeds have been revalued at year-end and have
been netted against the (loss)/gain on disposal of investments.
The investment portfolio is managed with capital growth as the primary focus.
Theloan and equity investments are considered to be one instrument due to the legal
binding statedwithin the investment agreements and so they are combined in the
table shownabove.
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. Thesensitivity of these valuations to a reasonable possible change in such
assumptions isgiven in Note 16.
Notes to the inancial statements
continued
94 Octopus Titan VCT plc — Annual report and financial statements 2024
Exits
Name of
company
Area of
investment
focus
Year of
first
investment
Total
investment
cost
£m Acquirer
Date
of exit
Cazoo Limited
1
Consumer Jan-18 5.0 Listed Mar 24
Unmade Limited Deep tech May-19 3.8 High-Tech Apparel Apr-24
Positron Technologies
Limited
(trading as Tax Scouts)
FinTech May-20 4.5 TaxFix Jun-24
Foodsteps Limited
1
Climate Mar-22 1.7 Registrar Jul-24
Perk Finance S.L.
(trading as Cobee)
1
FinTech Nov-22 4.8 Pluxee Sep-24
Vitesse PSP Limited FinTech Jun-20 1.3
2
Secondaries Oct-24
Neat SAS
1
FinTech Nov-22 0.4
2
Secondaries Oct-24
Appear Here Limited
1
Consumer Apr-17 8.5 –
3
Oct-24
Artesian Solutions
Limited
(trading as FullCircl)
1
B2B Software Dec-11 5.5
4
nCino Nov-24
Invierno AB
(trading as Vinter)
1
FinTech Mar-22 1.8 Kaiko Dec-24
Mosaic Smart Data
Limited
FinTech Apr-19 4.0 Behavox Dec-24
1. These companies have also been invested in by other funds managed by Octopus.
2. Partial disposal.
3. A conversion of shares to deferred shares with no cash transferred.
4. £5.5 million is the investment cost, which reflects the amount invested into FullCircl from Titans 1 – 5 before the
2014 merger. This is different to the book cost of £6.4 million which includes the holdings gain when transferred
from Titans 1, 3, 4 and 5 to Titan 2
(
now Titan
)
during the 2014 merger, as Titan purchased this asset at fair value.
The company received £42.4 million
(
2023: £3.7 million
)
from investments sold in the year. The book cost of these
investments when they were purchased was £41.3 million
(
2023: £23.3 million
)
. These investments have been
revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the
investments.
At 31 December 2024, there were no commitments in respect of fixed asset
investments not yet completed (2023: none).
11. Debtors
31 December
2024
£’000
31 December
2023
£’000
Deferred consideration (non-current)
1
5,296 328
Deferred consideration (current)
1
2,969 466
Prepayments 143 211
Other debtors 4 213
Total 8,412 1,218
1. Disposal proceeds on investments made during the year for which the disposal proceeds have not been
received by year end. The increase in deferred consideration of £7.5 million since 2023 is attributable to exits
that included deferred consideration components.
12. Current asset investments
Accounting policy
For the purpose of the Cash Flow Statement, cash and cash equivalents
comprise of cash at bank and money market funds.
Current asset investments on the Balance Sheet comprise money market
funds and corporate bonds, which are designated as FVTPL. 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.
Money market funds are measured at the latest published price.
The current asset investments are readily convertible into cash at the
option of Titan, within seven days. Thecurrent asset investments are held
for trading, are actively managed and the performance is evaluated in
accordance with a documented investment strategy. Information about
them is provided internally on that basis to the Board.
Notes to the inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 95
31 December
2024
£’000
31 December
2023
£’000
Money market funds 93,523 91,172
Corporate bonds 90,247 108,669
Total current asset investments 183,770 199,841
Money market funds held at year end sit within Level 1 of the fair value hierarchy
for the purposes of FRS 102, and corporate bonds sit within Level 2 of the fair value
hierarchy as set out in Note 10.
At 31 December 2024, there were no commitments in respect of current asset
investments approved by the Portfolio Manager but not yet completed (2023: none).
13. Current liabilities
Accounting policy
Financial liabilities and equity instruments are classified according to
the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets
of the entity after deducting all of its financial liabilities. Where the
contractual terms of share capital do not have any terms meeting the
definition of a financial liability then this is classed as an equity instrument.
Dividends and distributions relating to equity instruments are debited
directly to equity.
31 December
2024
£’000
31 December
2023
£’000
Accruals 1,827 1,670
Trade creditors 7 18
Applications cash
1
22 17,842
Total 1,856 19,530
1. Applications cash is cash received from investors to Titan but not yet allotted. The movement in the
applications cash creditor is reflected in the Cash Flow Statement as application inflows not yet allotted.
14. Share capital
31 December 2024
£’000
31 December 2023
£’000
Allotted and fully paid up: 1,647,212,355
(2023:1,593,601,092) Ordinary shares of 0.1p 1,647 1,594
The capital of Titan is managed in accordance with its Investment policy with a view to the
achievement of its investment objective as set out on page
6
. Titan is not subject to any
externally imposed capital requirements.
Capital is defined as shareholders’ funds and Titan’s 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. Titan currently has no borrowings nor does it anticipate that it will enter
into any borrowing facilities in the future to fund the acquisition of investments.
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 of Titan as at the date of
the AGM for the period to the next AGM in accordance with Special Resolution 12 in order
to maintain sufficient liquidity in Titan’s shares.
Capital management is monitored and controlled using the internal control procedures set
out on page 63 of this report. The capital being managed includes equity and fixed-interest
investments, cash balances and liquid resources including debtors and creditors.
0.1p Ordinary shares
31 December 2024
’000
31 December 2023
’000
Brought forward 1,593,601 1, 367,950
Shares issued – fundraise 108,071 244,860
Shares issued – DRIS
1
12,828 27,6 87
Shares repurchased for cancellation (67,288) (46,896)
Carried forward 1,647,212 1,593,601
1. The Dividend Reinvestment Scheme (DRIS) allows shareholders to elect to receive Ordinary shares instead
of a dividend. This is explained further in the Shareholder Information and Contact Details at the back of
this report.
Notes to the inancial statements
continued
96 Octopus Titan VCT plc — Annual report and financial statements 2024
Each share has full voting, dividend and capital distribution rights.
During the year 120,898,782 shares were issued at an average price of 65.5p per share
(2023:272,547,045 shares were issued at a price of 78.6p). The gross consideration
received for these shares was £77 million (£75 million net) including DRIS (2023:
£207million gross, £202 million net).
Titan repurchased 67,287,519 Ordinary shares for cancellation at a weighted average
price of 56.5p (2023: 46,895,882 shares at a price of 69.1p) at a cost of £38 million
(2023:£32million).
The total nominal value of the shares repurchased during the financial year was
£67,288, representing 0.0% of the issued share capital at the year end (2023:
£46,896representing0.0%).
15. Reserves
When Titan revalues its investments during the year, any gains or losses arising are
credited or 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:
31 December 2024
£’000
31 December 2023
£’000
Brought forward 894,622 796,835
Movement in period (65,052) 97,787
Carried forward 829,570 894,622
This is the maximum value of reserves available for potential distribution under the
Companies Act, subject to the future convertibility of gains and losses in the Capital
reserve unrealised. However, the amounts available for distribution may be lower
due to HMRC Distributable Reserves restrictions. VCT regulations further restrict the
distribution of the special distributable reserve until at least three years after the year-
end in which the funds were originally raised.
The purpose of the special distributable reserve is to create a reserve which will be
capable of being used by Titan 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 Titan's Ordinary shares trade. During the year there was a
share premium cancellation amounting to £121 million (2023: £249 million). This was
carried out with the approval of shareholders for the purposes of creating sufficient
distributable reserves.
16. Financial instruments and risk management
Titan’s financial instruments comprise equity and fixed-interest investments, cash
balances and liquid resources including debtors and creditors. Titan 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 inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 97
Classification of financial instruments
Titan held the following categories of financial instruments, all of which are included in
the Balance Sheet at fair value, at 31 December 2024:
31 December 2024
£’000
31 December 2023
£’000
Financial assets held at fair value through
profitor loss
Fixed asset investments 640,797 791,403
Corporate bonds 90,247 108,669
Money market funds 93,523 91,172
Total 824,567 991,244
Financial assets at amortised cost
Applications cash
1
22 17,842
Cash at bank 213 2,970
Other debtors 5 213
Disposal proceeds (deferred consideration) 8,265 794
Total 8,504 21,819
Financial liabilities at amortised cost
Trade creditors 7 18
Unallotted cash
1
22 17,842
Total 29 17,860
1. Applications cash or unallotted cash is cash received from investors by Titan but not yet allotted.
Fixed asset investments (see Note 10) are valued at fair value. Unquoted investments
are carried at fair value as determined by the Directors in accordance with IPEV
guidelines. Thefair value of all other financial assets and liabilities is represented by
their carrying valuein the Balance Sheet. The Directors believe that the fairvalue of
these assets held atthe year end is equal to their book value.
In carrying on its investment activities, Titan 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 Titan are market risk, interest rate risk, credit risk and liquidity risk.
Titan’s approach to managing these risks is set out below, together with a description of
thenature and amount of the financial instruments heldat the balance sheet date.
Market risk
Titan’s strategy for managing investment risk is determined with regard to Titan’s
investment objective, as outlined on page 6. The management of market risk is
part of theinvestment management process and is a central feature of venture
capital investment. Titan’s portfolio is managed in accordance with the policies and
procedures described in the Corporate Governance Statement on pages 55 and 56,
considering the possible effects of adverse price movements, with the objective of
maximising overall returns to shareholders. Investments in unquoted companies, by
their nature, usually involve a higher degree of risk than investments in 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.
Theoverall disposition of Titan’s assets is regularly monitored by the Board.
Details of Titan’s investment portfolio at the balance sheet date are set out on
pages103 to 107.
77.0% (2023: 79.5%) by value of Titan’s net assets (99.9% of portfolio value) comprises
investments in unquoted companies held at fair value. The valuation methods used
by Titan include the application of a multiples ratio derived from listed companies
with similar characteristics, and other market derived valuations, and consequently
the value of the unquoted element of the portfolio can be indirectly affected by
movements in the prices of quoted investments, such as those listed on the London
Stock Exchange. A 25% overall decrease in the valuation of the unquoted investments
at 31 December 2024 would have decreased net assets for the year by £160,076,000
(2023: £197,452,000) and an equivalent change in the opposite direction would have
increased net assets for the year by the same amount.
Notes to the inancial statements
continued
98 Octopus Titan VCT plc — Annual report and financial statements 2024
16. Financial instruments and risk management continued
Market risk continued
41% of net assets (53% of portfolio value) is valued using revenue-based multiples,
including PRI calibration. An increase in the multiple used by 10% would increase the net
asset value by 4% (£34.1 million). Conversely, a decrease in the multiple used by 10% would
decrease the net asset value by 4% (£34.1 million). The 10% sensitivity used provides the
most meaningful impact of average multiple changes across the portfolio.
11% of net assets (14% of portfolio value) is valued using a milestone approach. The
milestone approach is used when a company has nil or nascent revenue making a
market (revenue multiple) approach inappropriate. The milestone adjustment is applied
to PRI in 25% increments (both positive and negative) based on a qualitative assessment.
An increase in the milestone adjustment of 25% would increase the net asset value by
2% (£20.4 million). Conversely, a decrease in the milestone adjustment of 25% would
decrease the net asset value by 4% (£30.1 million).
28% of net assets (36% of portfolio value) is exposed to changes in the foreign exchange
rate. Of which, 14% of net assets is exposed to USD, 5% is exposed to EUR, while 9% is
exposed to more than one foreign currency. An increase in the rate of 10% would decrease
the net asset value by 2% (£19.9 million). Conversely a decrease in the rate of 10% would
increase the net asset value by 2% (£19.9 million). The 5% sensitivity used provides the
most meaningful impact of average foreign exchange rate changes across the portfolio.
Interest rate risk
Some of Titan’s financial assets are interest-bearing, of which some are at fixed rates
and some variable. As a result, Titan 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 fixed
interest-bearing financial instruments:
As at 31 December 2024 As at 31 December 2023
Total
fixed rate
portfolio
by value
£’000
Weighted
average
interest
rate %
Weighted
average
time for
which rate
is fixed
(years)
Total
fixed rate
portfolio
by value
£’000
Weighted
average
interest
rate %
Weighted
average
time for
which rate
is fixed
(years)
Fixed rate investments in
unquoted companies 7,099 13.69% 5.0 6,186 9.44% 4.9
Due to the relatively short period to maturity of the fixed rate investments held within
the portfolio, it is considered that an increase or decrease of 1% in the base rate as at the
reporting date would not have had a significant effect on Titan’s net assets for the year.
Floating rate
Titan’s floating rate investments comprise interest-bearing money market funds as at
31December 2024. Titan’s cash held at bank earns no interest due to the HMRC VCT rule
which prohibits a VCT from earning more than 30% of its income in non-VCT qualifying
income, and interest earned on bank balances is non-qualifying income. The benchmark
rate which determines the rate of interest receivable on Titan’s money market investment
isthe Bank of England base rate, which was 4.75% at 31 December 2024 (2023: 5.25%).
The amounts held infloating rate investments at the balance sheet date were as follows:
31 December 2024
£’000
31 December 2023
£’000
Money market funds 93,523 91,172
A 1% increase/(decrease) in the base rate would increase/(decrease) income receivable
from these investments and the net assets for the year by £935,000 (2023: £912,000).
Notes to the inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 99
16. Financial instruments and risk management continued
Credit risk
There was no significant concentration of credit risk to counterparties at 31December
2024. By fair value, no individual investment exceeded 5.4% (2023: 4.9%) ofTitan’snet
assets at 31 December 2024.
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge
an obligation or commitment that it has entered into with Titan. The Portfolio 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 December 2024, Titan’s financial assets exposed to credit risk comprised of the
following:
31 December
2024
£’000
31 December
2023
£’000
Cash at bank 213 2,970
Applications cash 22 17,842
Money market funds 93,523 91,172
Corporate bonds 90,247 108,669
Deferred consideration 8,265 794
Fixed rate investments in unquoted companies 7,099 6,186
Total 199,369 227,633
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 major UK companies and institutions. Credit risk relating to loans to and
preference shares in unquoted companies is considered to be part of market risk.
The investments in money market funds and corporate bonds 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.
Titan’s deposit and current accounts are maintained with HSBC Bank plc. The
Portfolio Manager has in place a monitoring procedure in respect of counterparty
risk which is reviewed on an ongoing basis. Should the credit quality or the financial
position of HSBC deteriorate significantly, the Portfolio Manager will move the cash
holdings to another bank.
Liquidity risk
Titan’s financial assets include investments in unquoted equity securities which are
not traded on a recognised stock exchange and which generally may be illiquid. They
also include investments in AIM-quoted companies, which, by their nature, involve a
higher degree of risk than investments on the main market. As a result, Titan 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.
Titan’s listed money market funds are considered to be readily realisable as they are of
high credit quality as outlined above.
Titan’s liquidity risk is managed on a continuing basis by the Portfolio Manager in
accordance with policies and procedures laid down by the Board. Titan’s overall
liquidity risks are monitored on a monthly basis by the Board.
Titan maintains sufficient investments in cash and readily realisable securities to pay
accounts payable and accrued expenses. At 31 December 2024, these investments
were valued at £183,770,000 (2023: £199,841,000). The Company has no debt,
therefore no maturity analysis is required.
17. Post-balance sheet events
The following other events occurred between the balance sheet date and the signing
ofthese financial statements:
•
8 follow-on investments completed totalling £4.8 million;
Notes to the inancial statements
continued
100 Octopus Titan VCT plc — Annual report and financial statements 2024
Notes to the inancial statements
continued
18. Contingencies, guarantees and financial commitments
Provided that an intermediary continues to act for a shareholder and the shareholder
continues to be the beneficial owner of the shares, intermediaries will be paid
an annual IFAcommission of 0.5% of advised investors’ gross NAV from Titan.
IFAchargesof £2,111,000 were expensed during the period (2023: £2,370,000) and
there was £1,048,000(2023: £1,404,000) outstanding at the period end.
There were £nil contingencies, guarantees or financial commitments as at
31December2024 (2023: £nil).
19. Transactions with the Manager and Portfolio Manager
Since 1 September 2017, Titan has been classified as a full-scope Alternative Investment
Fund under the Alternative Investment Fund Management Directive (the ‘AIFM
Directive’). As a result, since 1 September 2017, Titan’s investment management
agreement was assigned by way of the deed of novation from Octopus Investments
Limited to Octopus AIF Management Limited to act as Manager (an authorised
alternative investment fund manager responsible for ensuring compliance with the
AIFM Directive). Octopus AIF Management Limited has in turn appointed Octopus
Investments Limited to act as Portfolio Manager to Titan(responsible for portfolio
management and the day-to-day running of Titan).
Titan paid Octopus AIF Management Limited £19,079,000 (2023: £21,082,000) in the
period as a management fee. The annual management charge (AMC) is based on 2%
of Titan’s NAV in respect of existing funds but in respect of funds raised by Titan under
the 2018 Offer and thereafter (and subject to Titan having a cash reserve of 10% of its
NAV), the AMC on uninvested cash is the lower of either (i) the actual return that Titan
receives on its cash and funds that are the equivalent of cash (which currently consist
of corporate bonds and money market funds) subject to a 0% floor and (ii) 2% of
Titan’s NAV. TheAMC is payable quarterly in advance and calculated using the latest
published NAV of Titan and the number of shares in issue at each quarter end.
Octopus provides non-investment services to the Company and receives a fee for
these services which is capped at the lower of (i) 0.3% per annum of the Company’s
NAV or (ii) the administration and accounting costs of the Company for the year
ended 31 December 2020 with inflation increases in line with the Consumer Price
Index. During the period, the Company paid £2,078,000 (2023: £2,020,000) to
Octopus for the non-investment services.
In addition, Octopus is entitled to performance-related incentive fees. The incentive
fees were designed to ensure that there were significant tax-free dividend payments
made to shareholders as well as strong performance in terms of capital and income
growth, beforeany performance-related fee payment was made.
Due to performance in the year, the total value has decreased to 155.6p, representing
atotal loss of 8.8p. Therefore, the high water mark for the 2025 financial year remains
at197.7p.
If, on a subsequent financial yearend, the performance value of Titan falls short of the
high water mark on the previous financial year end, no performance fee will arise. If, on
a subsequent financial year end, the performance exceeds the previous best high water
mark of Titan, the Manager will beentitled to 20% of such excess in aggregate.
Octopus received £39,000 in the period to 31 December 2024 (2023: £36,000)
inregard to arrangement and monitoring fees in relation to investments made on
behalf ofTitan. Since 31 October 2018, Octopus no longer receives such fees in respect
of new investments or any such new fees in respect of further investments into
portfolio companies in which Titan invested on or before 31 October 2018, with any
such fees received after that time being passed to Titan.
The cap relating to Titan’s total ongoing charges ratio, that is the regular, recurring
costs of Titan expressed as a percentage of its NAV, above which Octopus has agreed
topay, is2.5%, andis calculated in accordance with the AIC Guidelines.
Octopus AIF Management Limited remuneration disclosures (unaudited)
Quantitative remuneration disclosures required to be made in this annual report in
accordance with the FCA Handbook FUND 3.3.5 are available on the website:
https://www.octopusinvestments.com/remuneration-disclosures/.
Octopus Titan VCT plc — Annual report and financial statements 2024 101
20. Related party transactions
Titan owns Zenith Holding Company Limited, which owns a share in Zenith LP, a fund
managed by Octopus.
In the year, Octopus Investments Nominees Limited (OINL) has purchased Titan
shares from shareholders to correct administrative issues, on the understanding that
shares will be sold back to Titan in subsequent share buybacks. As at 31 December
2024, no Titan shares were held by OINL (2023: no shares) as beneficial owner.
Throughout the period to 31December 2024, OINL purchased 65,000 shares (2023:
1,883,000 shares) at a cost of £36,000 (2023: £1,563,000) and sold 65,000 shares
(2023: 1,883,000 shares) for proceeds of £34,000 (2023: £1,353,000).This is classed
as a related party transaction as Octopus, the Portfolio 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.
Several members of the Octopus investment team hold non-executive directorships
as part of their monitoring roles in Titan’s portfolio companies, but they have no
controlling interests inthose companies.
Details of the Directors and their remuneration can be found in the Directors’
Remuneration Report on pages 65 to 67.
The Directors received the following dividends from Titan:
Year to
31 December
2024
£
Year to
31 December
2023
£
Jane O’Riordan 4,766 6,901
Tom Leader 1,464 1,889
Lord Rockley 2,406 2,776
Julie Nahid Rahman 138 89
Gaenor Bagley 738 901
Rupert Dickinson — —
21. Voting rights and equity management
The following table shows the percentage of voting rights held by Titan for each of the
top ten investments held in Titan. Titan has no other substantial interests that require
separate disclosure.
Investments % equity held by Titan
Mr & Mrs Oliver Ltd (trading as Skin + Me) 20.6%
Amplience Limited 21.4%
Permutive Inc. 17.2%
Elliptic Enterprises Limited 11.3%
Vitesse PSP Limited 9.8%
Many Group Ltd (trading as Many Pets) 7.5%
Digital Therapeutics (trading as Pelago, formerly Quit Genius) 14.0%
The Justice Platform Inc. (trading as Legl) 20.1%
Orbital Express Launch Limited (trading as Orbex) 10.0%
Token.IO Limited 13.0%
Notes to the inancial statements
continued
102 Octopus Titan VCT plc — Annual report and financial statements 2024
21. Voting rights and equity management continued
At 31 December 2024, the Company held significant investments, amounting to 20% ormore of the equity capital of an undertaking, in the following companies:
Significant investments
Equity investment
(Ordinary shares)
£’000
Investment in
loan stock and
preference shares
£’000
Total
investment
(at cost)
£’000
% equity
held by Titan
Zenith Holding Company Limited
1
8,963 – 8,963 100.0%
Seatfrog UK Holdings Limited 9,630 – 9,630 29.9%
Iovox Limited 7,206 – 7,206 29.4%
Surrey NanoSystems Limited 6,918 – 6,918 26.8%
Uniplaces Limited 2,532 6,959 9,491 26.8%
Smartkem Limited
2
12,195 12,195 24.0%
Imophoron Limited 2,295 – 2,295 23.0%
CRED Investment Holdings Limited 4,000 – 4,000 21.8%
Amplience Limited 13,634 – 13,634 21.4%
Mr & Mrs Oliver Limited (trading as Skin+Me) 11,500 – 11,500 20.6%
The Justice Platform Inc. (trading as Legl) — 7,325 7,325 20.1%
1. See Note 1 for further information on Titan’s relationship with Zenith Holding Company.
2. Smartkem is a publicly listed company.
Notes to the inancial statements
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 103
Investment portfolio
The table below sets out the investment cost and the amount invested in the year for the portfolio as at 31 December 2024. Details of the top ten investments can be found on
pages 31 to 33.
Fixed asset investments Investment focus
Investment
cost as at
31 December 2024
1
£’000
Amount invested
in the year to
31 December 2024
£’000
Permutive Inc.
3
B2B Software 18,994
—
Digital Therapeutics (trading as Pelago, formerly Quit Genius) Health 17,868
—
XYZ Reality Limited
3
Consumer 15,299
—
Amplience Limited B2B Software 13,634
—
Big Health Limited
3
Health 12,855
—
Token.IO Limited
3
FinTech 12,608
—
Automata Technologies Limited
3
Health 12,254
—
Smartkem Limited
3
Deep tech 12,195
—
Orbital Express Launch Limited (trading as Orbex) Deep tech 12,048 1,750
Ibex Medical Analytics Health 11,785
—
Ometria Limited B2B Software 11,510
—
Mr & Mrs Oliver Limited (trading as Skin+Me)
3
Health 11,500
—
Sofar Sounds Limited
3
Consumer 11,496
—
PLU&M Limited Consumer 11,050
—
Many Group Limited (trading as Many Pets)
3
FinTech 9,978
—
Elliptic Enterprises Limited
3
FinTech 9,913
—
Seatfrog UK Holdings Limited Consumer 9,630
—
Uniplaces Limited
3
Consumer 9,491
—
Codasip Deep Tech 9,488 855
Ori Biotech Limited Bio 9,102
—
Zenith Holding Company Limited
2
Consumer 8,963
—
Vitesse PSP Limited FinTech 8,802
—
Intropic Limited
3
FinTech 8,394
—
CurrencyFair Limited (trading as Zai)
3
FinTech 8,381
—
Antidote Technologies Limited
3
Health 8,251
—
Anikin Limited (trading as KatKin) Consumer 8,166
—
AllTaster Limited (trading as Taster)
3
Consumer 8,127
—
vHive Tech Limited Deep tech 8,020
—
104 Octopus Titan VCT plc — Annual report and financial statements 2024
Fixed asset investments Investment focus
Investment
cost as at
31 December 2024
1
£’000
Amount invested
in the year to
31 December 2024
£’000
Lapse Limited
3
Consumer 7,954 —
Biofidelity Limited
3
Bio 7,508 1,165
The Justice Platform Inc. (trading as Legl) B2B Software 7,325 —
Picsoneye Segmentation Innovation Limited (trading as Edgify) Deep tech 7,208 —
Iovox Limited
3
B2B Software 7,206 —
Bondaval Limited
3
FinTech 7,125 1,226
CoMind Technologies Limited
3
Deep tech 7,125 —
Sprout.ai Limited FinTech 7,092 —
Tympa Health Technologies Limited
3
Health 6,930 1,924
Surrey NanoSystems Limited
3
Deep tech 6,918 —
Papercup Technologies Limited
3
Deep tech 6,800 —
Partly Consumer 6,769 —
Minoro Limited (trading as Kleene.ai)
3
B2B Software 6,724 —
Overture Life, Inc. Health 6,534 721
Chiaro Technology Limited (trading as Elvie)
3
Health 6,417 —
Flock Limited Fintech 6,160 —
Olio Exchange Limited Climate 6,000 —
Origami Energy Limited
3
Climate 5,947 —
Haiper Limited Consumer 5,863 —
Messier 31 Inc. (trading as Pngme)
3
FinTech 5,429 —
Quantum Motion Technologies Limited Deep tech 5,149 —
Memrise Inc. Consumer 5,144 —
Lifescore Music Limited
3
Deep tech 5,100 —
Remofirst, Inc.
3
FinTech 4,977 4,977
Impatients N.V. (trading as MyTomorrows)
3
Health 4,905 —
Michelson Diagnostics Limited
3
Health 4,795 —
HelloSelf Limited Health 4,756 —
Dogtooth Technologies Limited Deep tech 4,739 —
Raylo Group Limited
3
Climate 4,500 —
ThoughtRiver Limited Deep tech 4,500 —
Investment portfolio
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 105
Fixed asset investments Investment focus
Investment
cost as at
31 December 2024
1
£’000
Amount invested
in the year to
31 December 2024
£’000
Inflow Holdings Inc.
3
Health 4,500 —
Arena Online Limited Consumer 4,472 —
The Faction Collective SA
3
Consumer 4,464 —
Secret Escapes Limited
4
Consumer 4,256 —
Tatum Blockchain Services s.r.o.
3
FinTech 4,190 —
Smiler BV
3
Consumer 4,099 —
CRED Investment Holdings Limited B2B Software 4,000 —
Vira Health Limited
3
Health 3,996 364
Slamcore Limited Deep tech 3,875 —
Living Optics Limited
3
Deep Tech 3,819 —
Altitude Angel Limited Deep tech 3,800 —
Unlikely AI
3
Deep Tech 3,783 —
Ourotech Limited (trading as Pear Bio)
3
Bio 3,755 —
Merge Holdings Limited
3
FinTech 3,740 —
Medisafe Project Limited
3
Health 3,664 —
Taxfix FinTech 3,629 3,629
Puraffinity Limited
3
Climate 3,617 —
Orca Computing Limited
3
Deep tech 3,500 —
Nanosyrinx Limited
3
Bio 3,500 750
Inrupt Inc. FinTech 3,495 —
HURR
3
Climate 3,174 —
Infinitopes Limited
3
Bio 3,004 —
Trafi Limited
3
Climate 2,965 —
Ecrebo Limited
3
B2B Software 2,857 —
Bloom App Limited
3
Consumer 2,857 —
Metrasens Limited
3
Deep tech 2,819 —
Apheris AI GmbH
3
B2B Software 2,769 447
Correcto ESP, S.L.
3
Consumer 2,765 —
Swiipr Technologies Limited
3
FinTech 2,608 2,608
LabGenius Limited
3
Bio 2,592 2,592
Investment portfolio
continued
106 Octopus Titan VCT plc — Annual report and financial statements 2024
Fixed asset investments Investment focus
Investment
cost as at
31 December 2024
1
£’000
Amount invested
in the year to
31 December 2024
£’000
Forefront RF Limited
3
Deep tech 2,559 2,559
CellVoyant Technology Limited
3
Bio 2,488 —
Caprera Limited (trading as Collectiv Food) Climate 2,471 —
ExpressionEdits Ltd
3
Bio 2,448 2,448
Intrepid Owls Limited (trading as Rest-Less) FinTech 2,427 —
Onibi Inc. Consumer 2,375 —
Elo Health Inc.
3
Health 2,344 —
ONIN Limited
3
Consumer 2,340 —
Imophoron Limited
3
Bio 2,295 —
Streetbees.com Limited
3
B2B Software 2,229 —
Walking on Earth
3
Consumer 2,158 543
Total Food Control Limited (trading as Lollipop)
3
Consumer 2,125 —
Touchlab Limited
3
Deep tech 2,125 —
Menwell Limited (trading as Manual)
3
Health 2,114 2,114
Manantial Limited (trading as Velaris)
3
B2B Software 2,040 —
Colonia Technologies B2B Software 2,020 —
Uniq Health Limited (trading as Tuune) Health 1,900 —
Drift Energy Ltd
3
Climate 1,863 1,863
Go Autonomous ApS B2B Software 1,845 —
Sidekick Money Limited
3
FinTech 1,741 390
Awell Health BV
3
Health 1,725 —
Ufonia Limited
3
Health 1,664 —
Intrinsic Semiconductor Technologies Limited
3
Deep tech 1,641 —
Pencil Biosciences Limited
3
Bio 1,557 —
Mojo Men Limited
3
Health 1,525 250
Segura Systems Limited
3
B2B Software 1,470 —
Pivotal Future Limited
3
Climate 1,430 —
Minimum Corporation
3
Climate 1,393 —
Ribbon Technologies Limited
3
Consumer 1,351 —
Pulse Platform UK Limited (previously Aire Labs Limited) FinTech 1,332 —
Kita Earth Limited
3
Climate 1,289 —
Investment portfolio
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 107
Fixed asset investments Investment focus
Investment
cost as at
31 December 2024
1
£’000
Amount invested
in the year to
31 December 2024
£’000
Oto Health Inc.
3
Health 1,286 —
Multiply AI Limited FinTech 1,283 —
Bkwai Limited
3
Deep tech 1,275 —
I.F. Technology Limited (trading as Integrated Finance)
3
FinTech 1,275 —
Mindset Technologies Limited (trading as Lets Mindstep)
3
Health 1,258 —
PSP Registrar Delaware Aggregator, LLC B2B Software 1,196 1,196
Little Journey Limited
3
Health 1,169 466
Anansi Technology Limited
3
FinTech 1,151 —
Challenger Deep (trading as KAIKO) FinTech 1,082 1,082
Perci Health Limited
3
Health 1,078 —
Neat SAS
3
FinTech 1,070 —
Secfix
3
B2B Software 1,013 —
Phlux Technology Limited
3
Deep tech 937 —
Avione Saving & Investment Limited (trading as Belong)
3
FinTech 850 —
TYTN (trading as TitanML)
3
Deep tech 840 —
AgileRL Limited B2B Software 749 —
Vypercore Limited
3
Deep tech 703 —
M10 Networks
3
FinTech 626 —
Metris Energy, Inc.
3
Climate 425 —
Total fixed asset investments 679,514 35,918
1. Investment cost reflects the amount invested into each portfolio company from Titans 1 – 5 before the 2014 merger and from Titan after the merger. This is different to the book cost (as per Note 10 to the financial
statements) which includes the holding gains/(losses) on assets which transferred from Titans 1, 3, 4 and 5 to Titan 2 (now Titan) during the 2014 merger, as Titan purchased these assets at fair value.
2. Owns stake in Secret Escapes Limited.
3. These companies have also been invested into by other funds managed by Octopus.
4. The figures for Secret Escapes relate to Titan’s direct investment only.
Investment portfolio
continued
108 Octopus Titan VCT plc — Annual report and financial statements 2024
Shareholder information and contact details
Octopus Titan VCT 2 plc was renamed Octopus Titan VCT plc on 27 November 2014
following the merger with Octopus Titan VCT 1 plc, Octopus Titan VCT 3 plc, Octopus
Titan VCT 4 plc and Octopus Titan VCT 5 plc on the same date.
Titan was incorporated on 12 October 2007. In collaboration with Octopus Titan VCT 1
plc, over £30.8 million in aggregate (£29.5 million net of expenses) was raised through
an Offer for Subscription during the year to 31 October 2008. Since then, further funds
have been raised through fundraises as follows:
•
£1.4 million (£1.3 million net of expenses) during the year to 31 October 2010;
•
£1.4 million (£1.3 million net of expenses) during the year to 31 October 2012;
•
£4.8 million (£4.6 million net of expenses) during the year to 31 October 2013;
•
£10.8 million (£10.4 million net of expenses) during the year to 31 October 2014;
•
£54.7 million (£52.6 million net of expenses) during the year to 31 October 2015;
•
£99.8 million (£96.3 million net of expenses) during the year to 31 October 2016;
•
£124.1 million (£119.9 million net of expenses) during the year to 31 October 2017;
•
£204.9 million (£198.4 million net of expenses) during the year to 31 October 2018;
•
£289.6 million (£279.7 million net of expenses) during the period to
31December2019;
•
£131.4 million (£127.8 million net of expenses) during the year to 31 December 2020;
•
£256.3 million (£249.3 million net of expenses) during the year to 31December2021;
•
£90.5 million (£88.2 million net of expenses) during the year to 31December2022;
•
£187.9 million (£182.2 million net of expenses) during the year to 31December2023;
and
•
£69.0 million (£67.1 million net of expenses) during the year to 31December2024.
The Offer for Subscription was closed to new applicants on 5 April 2024 having raised
£107 million.
Further details of Titan’s progress are discussed in the Chair’s Statement and Portfolio
Manager’s Review on pages 3 to 5 and 19 to 34 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 VCTsinclude:
•
up to 30% upfront income tax relief;
•
exemption from income tax on dividends paid; and
•
exemption from capital gains tax on disposals of shares in VCTs.
The principal activity of Titan is to invest in a diversified portfolio of UK smaller
companies in order to generate capital growth over the long term as well as an
attractive tax-free dividend stream. Titan has been granted full approval as a VCT by
HM Revenue & Customs (HMRC).
In order to maintain its approval Titan must comply with certain requirements on a
continuing basis including the provisions of chapter 3 of the Income Tax Act 2007,
inparticular s280A:
•
at least 80% of its investments must comprise ‘qualifying holdings’
1
(as defined in
the legislation). At least 70% of the 80% of qualifying holdings must be invested in
Ordinary shares with no preferential rights (for money allotted before April 2011, the
limit is 30% for new investments);
•
no single investment made can exceed 15% of Titan’s total value; and
•
a minimum of 10% of each qualifying investment must be in Ordinary shares with no
preferential rights.
1. A ‘qualifying holding’ consists of up to £5 million (£10 million for knowledge-intensive companies) invested
in any one year in new shares or securities in an unquoted company (or companies quoted on AIM) 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.
Octopus Titan VCT plc — Annual report and financial statements 2024 109
Dividends
Dividends are paid by Computershare Investor Services PLC (‘Computershare’) on
behalf of Titan. 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 6324. Calls to this number cost
the same as a normal local or national landline call and may be included in your
service provider’s tariff. Calls outside the United Kingdom will be charged at the
applicable international rate. Computershare Investor Services PLC are open between
8.30am-5.30pm, Monday to Friday excluding public holidays in England and Wales.
Computershare can be contacted in writing at:
The Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
The table opposite shows the NAV per share and lists the dividends that have been
paid since the launch of Titan.
Period ended NAV
Dividends paid
in period
NAV + cumulative
dividends (total value)
30 April 2008 95.0p — 95.0p
31 October 2008 89.9p — 89.9p
30 April 2009 91.5p 0.5p 92.0p
31 October 2009 96.1p 0.5p 97.1p
30 April 2010 92.0p 0.5p 93.5p
31 October 2010 94.9p 0.5p 96.9p
30 April 2011 92.1p 0.8p 94.9p
31 October 2011 91.5p 0.8p 95.0p
30 April 2012 92.8p 1.0p 97.3p
31 October 2012 121.9p 1.5p 127.9p
30 April 2013 88.7p 34.0p 128.7p
31 October 2013 95.2p 2.5p 137.7p
30 April 2014 92.2p 2.5p 137.2p
31 October 2014 101.4p 2.5p 148.9p
30 April 2015 97.7p 2.5p 147.7p
31 October 2015 102.7p 2.0p 154.7p
30 April 2016 95.7p 7.0p 154.7p
31 October 2016 97.9p 2.0p 158.9p
30 April 2017 95.2p 3.0p 159.2p
31 October 2017 96.4p 2.0p 162.4p
30 April 2018 94.3p 3.0p 163.3p
31 October 2018 93.1p 2.0p 164.1p
30 April 2019 92.4p 3.0p 166.4p
31 December 2019 95.2p 2.0p 171.2p
30 June 2020 89.5p 3.0p 168.5p
31 December 2020 97.0p 2.0p 178.0p
30 June 2021 113.9p 3.0p 197.9p
31 December 2021 105.7p 8.0p 197.7p
30 June 2022 91.3p 3.0p 186.3p
31 December 2022 76.9p 2.0p 173.9p
30 June 2023 68.2p 3.0p 168.2p
31 December 2023 62.4p 2.0p 164.4p
30 June 2024 53.5p 1.9p 157.4p
31 December 2024 50.5p 1.2p 155.6p
Shareholder information and contact details
continued
110 Octopus Titan VCT plc — Annual report and financial statements 2024
Dividends continued
A dividend of 0.5p per share will be paid on 29 May 2025 to shareholders on the
register on25 April 2025.
Titan offers a Dividend Reinvestment Scheme (DRIS). Any shareholder wishing to
reinvest their dividends, who has not already elected to do so, can request a DRIS
instruction form by calling Computershare on 0370 703 6324. The application form
can also be found on the Octopus Investments Limited website:
www.octopusinvestments.com. If you are uncertain about your current DRIS
position, please call Computershare on the number above or complete a new form
The DRIS is currently suspended pending the outcome of the strategic review.
Share price
Titan’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 OTV2
Latest share price (25 April 2025) 36.50p
Buying and selling shares
Titan’s Ordinary shares can be bought and sold via a stockbroker in the same way
as any other company quoted on the London Stock Exchange. There may be tax
implications in respect of selling all or part of your holdings, so shareholders should
contact their financial adviser if they have any queries. Titan operates a policy of
buying its own shares for cancellation as they become available, and envisages that
purchases will be made at no greater than a 5% discount to the prevailing NAV.
Buyback of shares
Titan is unable to buy back shares directly from shareholders. Ifyou are considering
selling your shares please contact Octopus Investments who can talk to you about
the options available. They will also be able to provide details of closed periods (when
Titan is prohibited from buying shares) and details of the price at which it has been
bought and can be contacted as follows:
Octopus Client 0800 316 2295
Relations Team investorsupport@octopusinvestments.com
If you are considering trading on the secondary market or would like to talk directly
to Titan’s corporate broker, Panmure Liberum Limited (‘Panmure’), they can be
contacted as follows:
Chris Lloyd 020 7886 2716 chris.lloyd@panmureliberum.com
Paul Nolan 020 7886 2717 paul.nolan@panmureliberum.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 so tax advice
should be obtained before shareholders dispose of their shares.
Whilst there is no specific limit on the amount of an individual’s acquisition of shares
in a VCT, tax reliefs will only be given to the extent that the total of an individual’s
subscriptions or other acquisitions of shares in VCTs in any tax year do not exceed
£200,000. Qualifyinginvestors who intend to invest more than £200,000 in VCTs in
anyone tax year should consult their professional advisers.
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 Titan’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 113.
Shareholder information and contact details
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 111
Other information for shareholders
Shareholders can obtain a full copy of Titan’s annual report as well as previously
published annual reports and half-yearly reports on the Octopus website at
octopustitanvct.com.
All other statutory information can also be found here.
Electronic communications
We also publish reports and accounts and all other correspondence 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
08003162295 or Computershare on 03707036324. 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
phonecalls orcorrespondence 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 offer for free
company reports.
Please note that it is very unlikely that either Octopus or Titan’s 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 08003162295.
The Financial Conduct Authority has also issued guidelines on how to
avoid share fraud andfurther information can be found on their website:
www.fca.org.uk/consumers/share-bond-and-boiler-room-scams.
You can report any share fraud to them by calling 0800 111 6768.
Shareholder information and contact details
continued
112 Octopus Titan VCT plc — Annual report and financial statements 2024
Glossary of terms
Alternative performance measure
(
APM
)
A financial measure of historical or future financial performance, financial position,
orcashflows, other than a financial measure defined or specified in the applicable
financial reporting framework. These APMs will help shareholders to understand and
assess Titan’s progress. A number of terms within this glossary have been identified
asAPMs.
Dividend yield
(
APM
)
Dividend yield is calculated as dividends paid per share in the period divided by the
opening NAV per share.
Money Market Fund
(
MMF
)
A mutual fund that invests in highly liquid, short-term investments. 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.
Net asset value or NAV
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 Titan is the sum of the underlying assets less the liabilities of
Titandivided 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, trail commission and
performance fees. 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 Titan in the future.
This is calculated by dividing the ongoing expenses, which includes the expenses
listed out inNote 4 on page 88 but excludes irrecoverable VAT, exceptional costs,
trailcommission and performance fees by the average net assets in the period.
Sustainability % of Titan
(
APM
)
Sustainability % is calculated as the proportion of Titan’s costs that are covered by
realisations over the preceding three years. The costs of the VCT include the share
buybacks, ordinary dividends and operating costs in the year.
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 Titan, as it reflects the underlying value of the portfolio at
the reporting date.
Total return per share
(
APM
)
Total return is calculated as movement in NAV per share in the period plus dividends
paid in the period. Total return on the NAV per share enables shareholders to evaluate
more clearly the performance of Titan, as it reflects the underlying value of the
portfolio at the reportingdate.
Total value per share
(
APM
)
Total value per share is calculated as NAV plus cumulative dividends paid since
launch.
Octopus Titan VCT plc — Annual report and financial statements 2024 113
Directors and advisers
Board of Directors
Tom Leader (Chair)
Jane O’Riordan
Lord Rockley
Gaenor Bagley
Julie Nahid Rahman
Rupert Dickinson
Company Number
Registered in England & Wales
No. 06397765
Legal Entity Identifier
(
LEI
)
213800A67IKGG6PVYW75
Secretary and Registered Office
Octopus Company Secretarial Services Limited
33 Holborn
London
EC1N 2HT
Portfolio Manager
Octopus Investments Limited
33 Holborn
London
EC1N 2HT
Tel: 0800 316 2295
www.octopusinvestments.com
Manager
Octopus AIF Management Limited
33 Holborn
London
EC1N 2HT
Tel: 0800 316 2295
www.octopusinvestments.com
Corporate Broker
Panmure Liberum Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Tel: 020 3100 2000
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
Apex Plaza
Forbury Road
Reading
RG1 1SH
Bankers
HSBC Bank plc
31 Holborn
London
EC1N 2HR
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Tel: 0370 703 6324
(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/
Depositary
Natwest Trustee and Depositary Services Limited
250 Bishopsgate
London
EC2M 4AA
(from 31 October 2024)
BNP Paribas Trust Corporation UK Limited
10 Harewood Avenue
London
NW1A 6AA
(until 31 October 2024)
114 Octopus Titan VCT plc — Annual report and financial statements 2024
Notice of Annual General Meeting
Notice is hereby given that the AGM of Octopus Titan VCT plc will be held at
33 Holborn, London, EC1N 2HT on Thursday, 19 June 2025 at 12.00 noon for the
purposes of considering and, if thought fit, passing the following resolutions of which
Resolutions 1 to 7 will be proposed as Ordinary Resolutions and Resolutions 8 to 10 will
be proposed as Special Resolutions:
Ordinary Business
1. To receive and adopt the annual report and the audited financial statements for
the year to 31 December 2024.
2. To approve the Directors’ Remuneration Report.
3. To re-elect Jane O’Riordan as a Director.
4. To re-elect Lord Rockley as a Director.
5. To re-appoint BDO LLP as auditor of the Company and to authorise the Directors
to determine their remuneration.
Special Business
To consider and, if thought fit, pass Resolutions 6 and 7 as Ordinary Resolutions and
Resolutions 8 to 10 as Special Resolutions:
6. Authority to allot relevant securities
THAT, in addition to existing authorities, the Directors of the Company be and
hereby are generally and unconditionally authorised in accordance with Section 551
of the Companies Act 2006 (the ‘Act’) to exercise all the powers of the Company to
allot up to a maximum of 411,803,089 Ordinary shares in the Company (‘Shares’)
(representing approximately 25% of the Shares in issue as at 25 April 2025), 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 (unless previously renewed,
varied or revoked by the Company in general meeting) save that this authority
shall allow the Company 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.
7. Authority to allot relevant securities under the DRIS
THAT, in addition to existing authorities, the Directors of the Company be and
hereby are generally and unconditionally authorised in accordance with Section
551 of the Act to exercise all the powers of the Company to allot up to a maximum
of 82,360,618 Shares in connection with the Company’s Dividend Reinvestment
Scheme (representing approximately 5% of the Shares in issue as at 25 April 2025),
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 (unless previously
renewed, varied or revoked by the Company in general meeting) save that this
authority shall allow the Company 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.
8. Empowerment to make allotments of equity securities
THAT, conditional upon the passing of Resolution 6 above and in addition to existing
authorities, the Directors of the Company be and hereby are empowered pursuant
to Section 571 of the Act to allot or make offers or agreements to allot equity
securities (which expression shall have the meaning ascribed to it in Section 560(1)
of the Act) for cash pursuant to the authority granted by Resolution 6 above, as if
Section 561 of the Act did not apply to any such allotment and so that: (a)reference
to allotment of equity securities in this Resolution shall be construed in accordance
with Section 560(2) of the Act; and (b) the power conferred by this Resolution shall
enable the Company 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 any
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 (unless previously renewed, varied
or revoked by the Company in general meeting).
Octopus Titan VCT plc — Annual report and financial statements 2024 115
9. Empowerment to make allotments of equity securities under the DRIS
THAT, conditional upon the passing of Resolution 7 above and in addition to
existing authorities, the Directors of the Company be and hereby are empowered
pursuant to Section 571 of the Act to allot or make offers or agreements to allot
equity securities (which expression shall have the meaning ascribed to it in Section
560(1) of the Act) for cash pursuant to the authority granted by Resolution 7
above, as if Section 561 of the Act did not apply to any such allotment and so that:
(a)reference to allotment of equity securities in this Resolution shall be construed
in accordance with Section 560(2) of the Act; and (b) the power conferred by this
Resolution shall enable the Company 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 any 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 (unless previously
renewed, varied or revoked by the Company in general meeting).
10. Authority to make market purchases
THAT, in addition to existing authorities, the Company be and is hereby generally
and unconditionally authorised to make one or more market purchases (within the
meaning of s693(4) of the Act) of Shares provided that:
a) the maximum number of Shares so authorised to be purchased shall not
exceed 246,917,132 Shares, representing approximately 14.99% of the present
issued Shares as at the date of this notice;
b) the minimum price which may be paid for a Share shall be its nominal value;
c) the maximum price, exclusive of expenses, which may be paid for a Share is
an amount equal to the higher of (i) 105% of the average of the middle market
quotation for a Share taken from the London Stock Exchange Daily Official List
for the five business days immediately preceding the day on which the Share
is contracted to be purchased; and (ii) the amount stipulated by Article 5(6) of
the Market Abuse Regulation;
d) the authority conferred by this Resolution shall (unless previously renewed,
varied or revoked in general meeting) expire on the date falling 15 months after
the passing of this Resolution or, if earlier, at the conclusion of the Annual
General Meeting of the Company to be held in 2026; and
e) the Company may enter into a contract to purchase its Shares under this
authority prior to the expiry of this authority which will or may be executed
wholly or partly after the expiry of this authority and the Company may make
a purchase of its Shares in pursuance of any such contract.
By Order of the Board
Tom Leader
Chair
28 April 2025
Notice of Annual General Meeting
continued
116 Octopus Titan VCT plc — Annual report and financial statements 2024
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 the Company 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 the registrars of the Company, 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 (excluding non-working
days) 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. The Company may treat as invalid a
proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)
(a) of the Uncertificated Securities Regulations 2001.
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 be aware 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 the Company’s website; or (c) if it is undesirable in the
best interests of the Company or the good order of the meeting.
Questions from our shareholders in relation to the AGM can be sent via email to
TitanAGM@octopusinvestments.com. The Company 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 the Company to publish a statement on its website setting out any
matter relating to (a) the audit of the Company’s accounts (including the auditor’s
report and the conduct of the audit) that are to be laid before the AGM; or (b)
any circumstances connected with an auditor of the Company ceasing to hold
office since the last AGM, that the members propose to raise at the meeting.
The Company 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 the Company’s auditors no later than the time it makes its statement available
Notice of Annual General Meeting
continued
Octopus Titan VCT plc — Annual report and financial statements 2024 117
on the website. The business which may be dealt with at the meeting includes any
statement that the Company has been required to publish on its website.
h) Under Sections 338 and 338A of the Companies Act 2006, members meeting the
threshold requirements in those sections have the right to require the Company:
(i) to give, to members of the Company 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 in 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 the Company’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 the Company 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 of
theCompanies Act 2006 is included on the Company’s website,
octopustitanvct.com. Copies of the Directors’ letters of appointment, the
Register of Directors’ Interests in the Ordinary shares of the Company kept in
accordance with the Listing Rules and a copy of the Memorandum and Articles of
Association of the Company will be available for inspection at the registered office
of the Company 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 25 April 2025 (being the last practicable date prior to the publication of this
Notice) the Company’s issued share capital consists of 1,647,212,355 Ordinary
shares, carrying one vote each. Therefore, the total voting rights in the Company
as at 25 April 2025 are 1,647,212,355.
Notice of Annual General Meeting
continued
Octopus Investments
33 Holborn
London EC1N 2HT
0800 316 2295
investorsupport@octopusinvestments.com
octopusinvestments.com
Octopus Titan VCT plc|Annual Report 2024