Annual Report 2023

DISCOVERING POTENTIAL

Contents

Investment Objective and Policy 1

Directors of the Company 2

Strategic Report including:

Chair’s Statement and Business Review 4

Fund Manager’s Review 7

Investment and Portfolio Analysis 11

Portfolio Breakdown by Sector and by Index 12

Section 172(1) Statement 13

Other Statutory Information 14

Corporate Governance Statement 16

Report of the Directors 20

Statement of Directors’ responsibilities 23

Directors’ Remuneration Report 24

Independent Auditor’s Report 27

Income Statement 32

Statement of Financial Position 33

Statement of Changes in Equity 34

Statement of Cash Flows 35

Notes to the Financial Statements 36

Officers and Financial Advisers 41

Annual Report for the year ended

31 December 2023

Company number

02933559

Athelney Trust

Waterside Court, Falmouth Road

Penryn, Cornwall TR10 8AW

1 | Athelney Trust plc | Annual Report 2023

Investment Objective

The investment objective of the Trust is to provide long-term growth in dividends and

capital, with the risks inherent in small cap investment minimised through a spread of

holdings in quality small cap companies that operate in various industries and sectors. The

Fund Manager also considers that it is important to maintain a progressive dividend record.

Investment Policy

The assets of the Trust are allocated predominantly to companies with either a full

listing on the London Stock Exchange or a trading facility on AIM or AQSE. The assets

of the Trust have been allocated in two main ways: first, to the shares of those

companies which have grown steadily over the years in terms of profits and dividends

but, despite this progress are undervalued by the market when compared to future

earnings and dividends; second, those companies whose shares are undervalued by

the market when compared with the value of land, buildings, other assets or cash on

their balance sheet.

2 | Athelney Trust plc | Annual Report 2023

Directors of the Company

Frank Ashton

Non-Executive Chair

Frank Ashton, aged 62, is a highly experienced senior manager and

independent management consultant. After leaving Cambridge

University with a Natural Sciences degree (Metallurgy & Materials

Science), he spent much of his career providing independent

management advice to companies in a wide variety of sectors. With

15 years spent at PricewaterhouseCoopers and KPMG (Operational

Due Diligence) and 5 years working in Strategy and M&A for

Cummins Inc, he has a proven track record in shareholder value

creation and governance, in providing strategic and operational

advice to both public and private companies in Europe and USA, as

well as working at a policy level for Government entities.

Dr Emmanuel Clive Pohl AM

Managing Director

Manny Pohl, aged 70, is the Chair and CIO of investment house EC

Pohl & Co which he founded in June 2012 and has led through its

evolution into today’s independent, highly acclaimed Australian

fund manager. Manny holds engineering and MBA degrees from

the University of Witwatersrand and a doctorate in Business

Administration (Economics) from Potchefstroom University.

Manny has over 30 years of investment experience, initially as

head of research for leading South African broking firm, Davis

Borkum Hare, followed by Westpac Investment Management in

Australia after he emigrated to Australia in 1994. Manny founded

Hyperion Asset Management in 1996 and left in 2012. He has

served on the Boards of several major corporations in his native

South Africa, the UK and his adopted home Australia. In 2019

Manny was recognised in the Queen’s Birthday honours list for

significant service to the finance sector, and to the community.

3 | Athelney Trust plc | Annual Report 2023

Directors of the Company

Continued

Simon Moore

Non-executive Director

Simon Moore, aged 63, is a consultant Senior Investment

Analyst. He has been an investment trust analyst since 1994 and

has worked with several stockbrokers in the City of London

including Williams de Broe, Teather & Greenwood and Collins

Stewart. He was also Senior Investment Manager at Seven

Investment Management and Head of Research at Tilney

Bestinvest, Senior Investment Analyst at EQ Investors. Simon

has been a long-standing member of two important committees

at the Association of Investment Companies: the Statistics

Committee and the Property and Infrastructure Forum. In 2013

and 2014 Simon was chosen as one of the Citywire Wealth

Manager Top 100 most influential people in UK private client

fund selection. Simon is a scientist by training and has worked

at two start up UK biotechnology companies, before passing on

his knowledge and passion as a science tutor for the Open

University. He has a Biochemistry BSc from Imperial College, and

an MSc in Computer Modelling of molecules from Birkbeck

College. He is a member of the UK Society of Investment

Professionals and the CFA institute. During 2020 he was

appointed as a Non-Executive Director of Home REIT Plc.

Jason Pohl

Alternate Director

Jason Pohl, aged 34, has ten years of professional experience in

fundamental bottom-up investment research at ECP Asset

Management Pty Ltd.

Originally pursuing a legal career, Jason spent his initial stages of

his professional career working for Ashurst (previously Blake

Dawson) before being admitted as a Legal Practitioner in the

NSW Supreme Court. Jason has a B.Com, LLB, and an MBA from

Bond University.

During 2023 he was appointed as a Director of Global Masters

Fund Limited, a company listed on the Australian Securities

Exchange.

4 | Athelney Trust plc | Annual Report 2023

Strategic Report

Chair’s Statement and Business Review

Dear Shareholder

I am pleased to present the Annual Financial Report for the year to 31

December 2023.

The Strategic Report section of this Annual Report has been prepared to

help all Shareholders understand the drivers of performance in the past

year, how the Company operates and to assess its performance.

Financial Summary and Overview

The key performance indicators are as follows:

Year ended

31 December

2023

Year ended

31 December

2022

Change

NAV total return

(4.4)%

(26.2)%

n/a

Revenue return per ordinary

7.7p

6.9p

11.4%

Total return per share

(0.6)p

(81.3)p

n/a

Share price

185.0p

210.0p

(11.9)%

Net asset value per ordinary

209.1p

219.4p

(4.7)%

Discount to NAV per ordinary

11.5%

4.3%

n/a

Cumulative value of

shareholder investment

(net asset value plus

cumulative dividends

per

ordinary share)

218.8p

229.0p

(4.4)%

Shareholders’ funds

£4,512m

£4,734m

(4.7)%

• The Trust’s Investment performance over 12 months as measured by

NAV total return, which is the change in NAV plus the dividend paid,

was minus 4.4% (2022: minus 26.2%).

• The interim dividend of 2.2p per share was paid on 22 September

2023.

• Your Board recommends a final dividend of 7.6p per share increasing

a total dividend payable for the year to 9.8p (2022: 9.6p) an increase

of 2.0%.

• This is the 21st successive year of progressive dividends and

importantly returns the Trust to the “Dividend Heroes” list

maintained by the AIC, a list of investment companies that have

consistently increased their dividends for 20 or more years in a row.

Performance

The year under review was disappointing. Equity markets were under

pressure throughout with several headwinds, and investment trusts

were unable to attract investors away from the lure of gilts and passive

funds. The Company suffered negative absolute returns and has

underperformed compared to the FTSE 250 largely because of ongoing

negative sentiment for UK smaller companies and comparatively high UK

interest rates through the year.

In the financial year to 31 December 2023 and on a total return basis,

the Company’s net asset value (NAV) fell by 4.7%, the share price fell by

11.9% compared to a fall of 8.2% in the AIM All-Share index.

The last 12 months created further surprises and uncertainty for

UK investors, as inflation dropped more slowly than in other G7

countries and the resulting medicine of frequent interest rate rises

added to geo-political stressors. For a higher rate UK taxpayer, the

resulting yield on gilts translated to some unusually high potential

returns, and without the equity risk premium, in general bonds

became a more attractive investment. High quality small company

stocks generally lost ground to larger, liquid stocks and after wider

market ‘poor returns’ of the past few years, investors were

generally less interested in investment trusts. Discounts to share

price widened for many investment trusts and remain, on average,

in double-digit territory at 10.0% for UK Smaller Company

investment trusts on 31 December 2023.

Over a 5 year period we have outperformed the FTSE 250 by 3.6%

points, (per annum and before management fees, expenses and

dividends) and maintain that compounded investment into our

portfolio still provides attractive returns compared to

alternatives. Further details on the portfolio are under the Fund

Manager comments later in this report and historical figures in

Table 1 on page 7.

On the positive side, the UK and world economy in general for

2023 have proved to be more resilient than expected as we

recover from the impact of Covid; the widely feared deep

recession has not materialised (although we may be in a UK

technical recession after the late December downward revision of

Q3 to a contraction of 0.1% by the ONS) and there are signs that

peak interest rates may have been reached in European, UK and

US economies.

We believe there is now a strong case for investment in UK

equities such as those held by the Trust, which offer great value

for money. Our quality portfolio, plus the discount, translate into

a strong upside, if undervalued UK stocks get the investment

attention they deserve based on fundamentals, and the general

discount shrinks. This would be a double benefit for those

considering further or a new investment in our investment trust.

Dividend and Earnings

I am pleased to report the total revenue earned from the

Company’s portfolio rose 19.6% to £219,366 from £183,273 last

year which is the highest total since 2019. Our earnings per share

rose to 7.7p from 6.9p, an increase of 11.6%. This improved

performance is a welcome return to more normal, pre-COVID

figures and further evidences the quality of the portfolio

companies and their commitment to shareholder value.

The board is pleased to recommend an increased final dividend

of 7.6p, which, subject to shareholder approval at the next AGM,

will be paid on 11 April 2024 to those shareholders on the register

at 8 March 2024. Once added to the interim dividend, this brings

the full dividend for 2023 to 9.8p a 2.0% increase on the full

dividend for 2022.

5 | Athelney Trust plc | Annual Report 2023

Strategic Report

Chair’s Statement and Business Review

Continued

I am delighted this would maintain our progressive dividend

performance for the 21

year and maintain our highlighted ‘Dividend

Hero’ status as conferred by the AIC.

Board and Company Developments

The Board places significant importance on corporate governance and

compliance with the AIC and UK Corporate Governance Codes. Full

details are set out in the Corporate Governance section on pages 16

to 19.

We note the Financial Conduct Authority’s Policy Statement PS22/3

of April 2022 to comply or explain in relation to board diversity and

inclusion, with changes to the Listing Rules commencing in 2023 for

the Trust. As a small, low-cost fund, your Board continues to assess

how best to structure and plan for a board that meets shareholder

and regulatory needs, has continuity, stability and reflects prudent

management of costs.

In terms of controllable costs, I confirm a continued freeze on the non-

executive director’s fee (£10,500) with no premium for Chair positions,

which is comparable to the NED fee of other, similarly sized funds.

Our Ongoing Charges Figure (OCF, calculated using the AIC

recommended Ongoing Charges methodology, taking annualised costs

that would reasonably be incurred if there was no trading of the

investee shares, divided by the average of published monthly NAV) is

3.84% (2022: 2.89%).

The increase is due to the decrease in NAV through 2023, and also

£24,507 net increase in Ongoing Charges in 2023 compared to 2022.

While we remain a small fund, reducing the OCF will continue to be a

challenge, however every effort is made to do this, while applying

appropriate time and resources to growth and good governance.

As we continue to explore ways to grow the fund, the Company is now

using the specialist marketing services of Colchester-based Equity

Development Ltd. We look forward to the impact this will make in the

coming year and continue to take opportunities for the Fund Manager

to explain his investment approach, including use of Goodacre Events

such as the UK Smaller Companies Conferences which can be joined

online.

I regret the sudden resignation of Hazlewood’s LLP as our auditor on

the 9

October 2023 because of FRC-driven increased regulatory costs

and staff impact for their public interest entity (PIE) audits. Along with

some other smaller auditors, Hazlewood’s withdrew its PIE registration

at very short notice.

We are delighted to report that after an appropriate, shortened process

to review a number of alternative auditors, the Board has accepted the

recommendation of the Audit Committee and appointed Moore

Kingston Smith LLP as auditor for this financial year on 20 October 2023.

We welcome general audit reform, after recent, surprising company

failures however believe there has been insufficient assessment of the

net effect of these new regulations: Other companies like us had to

replace auditors after abrupt resignations in recent months and also

found there is less choice and capacity than might be expected.

Our audit fee will quadruple in this transition mainly due to the

extra PIE costs and implications for our auditor; the audit approach

itself is largely the same as before. We hope that shareholders and

investors in general see benefits as the regulatory changes

continue to take effect.

Environmental, Human Rights, Employee,

Social and Community Issues

The Board consists entirely of two Non-Executive Directors and

one Managing Director who was the sole employee. The

Company has no direct impact on the community or the

environment, and as such has no environmental, human rights,

social or community policies. In carrying out its investment

activities and in relationships with suppliers, the Company aims

to conduct itself responsibly, ethically and fairly.

Environmental, Social and Governance factors are considered as

part of the commercial

evaluation of investee companies.

Annual General Meeting (AGM)

We are pleased to invite shareholders to our AGM at the offices

of Druces LLP, Salisbury House, London Wall, London EC2M 5PS

on 21 March 2024 at 12.00 noon. We encourage attendance in

order to meet the board and hear from the Fund Manager Dr

Manny Pohl.

There will be an opportunity to ask questions during the AGM and

also afterwards in a less formal environment.

We encourage all shareholders to vote on the resolutions, all of

which the board endorses ahead of the deadline at 12 noon on 19

March 2024. Details on how to vote and also on the AGM, and its

resolutions are in the Notice of AGM, which is delivered with this

Annual Report. Further copies are available on our website, or

from the Company Secretary.

An Independent Board

The Directors in place at the time of signing these accounts are:

• Myself, Frank Ashton – Non-Executive Chair

• Simon Moore – Non-Executive Director, Chair of Audit

Committee, Chair of Remuneration Committee

• Dr Manny Pohl – Managing Director, Fund Manager

• Jason Pohl – Alternate for Dr Manny Pohl

We currently have three directors who together make up an

independent Board under the AIC Code of Governance 2022.

Capital Gains

During the year the Company realised capital profits before

expenses arising on the sale of investments in the sum of £50,853

(2022: £382,704).

6 | Athelney Trust plc | Annual Report 2023

Strategic Report

Chair’s Statement and Business Review

Continued

Portfolio Review

Additional Holdings Purchased

Additional and new holdings of AEW UK REIT, Alpha Group

International, Cake Box Holdings, Fevertree Drinks, Impax Asset

Management, NWF Group, Paypoint, Spirax-Sarco Engineering and

Treatt were acquired.

Holdings Sold or Trimmed

Clarke (T), Games Workshop, Liontrust Asset Management,

Londonmetric Property, Rightmove, Smart Metering and Target

Healthcare REIT.

Outlook

This has been a difficult year, however there is evidence of a change in

the investment landscape in particular the likely reduction of interest

rates, that I believe will bring multiple benefits. We remain cautious

and yet also have confidence in our Managing Director and Fund

Manager, Manny Pohl and his team in providing for the needs of the

Company and its shareholders.

Last year I referred to Charlie Munger and just one of his many

quotations as a champion investor and Vice Chair of Berkshire

Hathaway. It is sad to hear of his death at 99 years but also a chance

to remember that he was no stranger to personal tragedy. Talking

about hardship recently he said “you can cry alright. But you can’t

quit”. Similar things might be said about investing; there can be

disappointments and frustrations, often due to circumstances outside

our control, however we will not quit on fundamentals and

commitment to value. Over the long term you will win; this next year

should see improved performance.

Thank you for your continued support of the Company.

Frank Ashton

Non-Executive Chair

12 February 2024

7 | Athelney Trust plc | Annual Report 2023

Strategic Report

Fund Manager’s Review

Reflecting on 2023

As we reflect on the past year, the investment climate has been

marked by significant events and trends shaping investments and

the general economic outlook. The ongoing geopolitical tensions,

notably the Russian invasion of Ukraine and the escalated conflict

between Israel and Hamas have contributed to a climate of political

uncertainty.

These events have had far-reaching economic impacts, further

complicating the investment environment.

The following chart of the FTSE 250 Index provides some idea of

events that have impacted the market over the past twelve months.

Chart 1: FTSE 250 Index

The required equity risk premium remained high throughout the

year, reflecting the market's sensitivity to these global events and

amidst these challenges, we've seen global inflationary pressures

prompt aggressive interest rate responses from central banks

through time. Recently, the rhetoric from central banks has

softened, suggesting that while further rate hikes are possible, rates

might stabilise near current levels for the foreseeable future.

The macro factors affecting the markets and our performance are

covered in the Chair’s statement and our portfolio has performed

well when compared to the small company indices as shown in Table

However, the NAV has been negatively affected by rising costs,

predominantly audit fees and our large dividend payout (DY:5.2%)

as compared to the FTSE 250 (DY:3.6%) in particular.

Table 1: Performance Metrics

Compound Growth Rate

1 Year

2 Years

3 Years

5 Years

10 Years

ATY Portfolio*

3.3%

-11.8%

0.1%

6.0%

n.a.

ATY NAV

-4.7%

-17.9%

-6.4%

-1.5%

-0.2%

FTSE 250

4.4%

-8.4%

-1.3%

2.4%

2.1%

FTSE 100

3.8%

2.3%

6.2%

2.8%

1.4%

FTSE Small Cap

3.0%

-7.2%

1.1%

4.4%

3.8%

AIM All Share

-8.2%

-20.8%

-12.9%

-2.3%

-1.1%

* Portfolio performance is time weighted, before management fees, expenses and dividends and is only available from when Dr Manny Pohl AM commenced

managing the portfolio.

While macro/political events have dominated the media,

technological advancements have been transformative with

Generative Artificial Intelligence (AI) models emerging as a dominant

theme in business discussions worldwide. While analysts and

researchers have used algorithms to analyse and use data sets to

make predictions for decades, it was the release of NVIDIA’s CUDA

(compute unified device architecture) software for developers in

2006 which enabled scientists to apply parallel processing in

complex simulations and data analysis. Parallel processing utilises

two or more processors (CPUs or GPUs) to handle separate parts of

an overall task, laying the foundation for machine learning. Within

this context, even OpenAI would take 300 years to train ChatGPT 3.5

on the fastest single GPU, but with parallel processing and using

1024 GPUs, it can be done in 34 days. The resultant development of

large language models like ChatGPT, is revolutionising industries.

These developments highlight the importance of investing in

businesses that can harness these technologies to enhance their

competitive advantage and growth potential.

8 | Athelney Trust plc | Annual Report 2023

Strategic Report

Fund Manager’s Review

Continued

Chart 2: Contributions to NAV in the period 1 January 2023 to 31 December 2023 (pence per share)

In this regard, the U.S. and China are leading the AI development

race, with significant investments pouring into this technology, while

Europe appears to be a laggard. This rapid growth has prompted

governments, particularly the U.S., to develop regulations to ensure

the safe and trustworthy evolution of these technologies, with many

trying to get to grips with the inherent risks associated with the use

of the technology, particularly in the areas of cyber security and

privacy.

The recent executive order by US President Joe Biden has been

designed to impose national rules on the fast-moving technology to

ensure “safe, secure and trustworthy” development. More

importantly, this will enable businesses to understand the ground

rules and legitimately organise and obtain data without breaching

data privacy regulations.

In 2023, ChatGPT consumerised these AI developments that had

previously been happening behind closed doors, enabling text,

language, speech, and image recognition to cross over human

capability. The net result is significant reinvestment in technology,

showing up in GPU demand from the Big 5 Tech companies, the

owners of proprietary hardware (e.g., NVIDIA) and large-language

models (e.g., Microsoft, Google, Amazon, Meta).

Of particular interest for business are “Large Language Models”

(LLM), which can train on billions of parameters to develop refined

algorithms for new use cases. Clearly, it is also of the utmost

importance to ensure that the businesses in which we invest need to

utilise these emerging technologies and harness them effectively to

expand their economic footprint and enhance investment value.

To this end, our investment process is centred on assessing

businesses' Dynamic Capability (DC). DCs are pivotal, change-

oriented capabilities that empower firms to adapt and reconfigure

their resources in response to evolving customer demands and

competitive landscapes. This includes a firm's agility in R&D, its

ability to enter new markets with nimble operational structures, the

consolidation of central support functions following acquisitions,

and the replication of successful processes or systems in new

geographical or business sectors.

The impact of early adoption of AI cannot be overstated; the

potential economic unlock will be meaningful. AI's potential to

transform economic landscapes is immense, as it enables the

efficient reading and structuring of vast amounts of corporate data

coupled with powerful workflow automation tools (think a far more

powerful Excel macro). This combination is set to revolutionise

business processes, much like the advent of computer mainframes

in the 1980s, significantly reducing manual accounting work.

By investing in quality companies that are early (effective) adopters

of AI, investors can position themselves at the forefront of this

transformative wave, ready to reap the economic benefits. As we

navigate this new AI era, we focus on meticulously evaluating

companies' business models, financials, and growth plans. This

approach helps us identify quality growth stocks poised for long-

term success, leveraging AI to capitalise on market trends and

demand. In addition, we continue to explore the advancements in

AI that present potential for substantial long-term returns.

Identifying and investing in companies leading these innovations

position portfolios to benefit from future market transformations.

In this regard, while we are certainly pleased to book a handsome

profit on our investment in Smart Metering as a result of the

takeover bid, this was a company which most certainly could have

benefitted from future developments in AI. The continued takeover

of small companies in the UK market is a worrying feature as our

process aims to find high-quality businesses that we would like to

own for the very long-term. However, it does confirm that

valuations are very favourable at present.

219.4

209.1

-2.7

10.2 -9.7

0.0

-6.5

-1.6

0.0

50.0

100.0

150.0

200.0

250.0

NAV 2022 Investment

Performance

Investment

Income

Dividend

Paid

Management

Fee

Tax Operating

Expenses

NAV 2023

(+21.05)(+21.05)(+21.05)(+21.05)(+21.05)(+21.05)

9 | Athelney Trust plc | Annual Report 2023

Strategic Report

Fund Manager’s Review

Continued

During the past year, we increased our exposure to the AEW UK REIT

at the expense of the Target Healthcare REIT, maintaining our overall

exposure to the Property Trusts in recognition of the need to

maintain the dividend paid to shareholders within a growth style

portfolio. In the past twelve months we added two new names to

the portfolio:

Alpha Group: (LSE: ALPH)

Alpha is a leading non-bank provider of financial solutions to

corporates and institutions operating internationally across three

continents. Alpha has two operating divisions, the FX Risk

Management division which focuses on supporting corporate and

institutional clients who need to buy or sell currency to match

commercial transactions involving either the buying and/or selling of

goods and services overseas; and the Alternative Banking Solutions

division which provides multi location banking services at more than

50 countries to alternative investment managers for purposes such

as asset sales, purchases, or distributions. Using cutting-edge

technologies to provide an enhanced alternative to traditional

banks, Alpha should be able to deliver superior shareholder returns

over the medium to long-term.

Cake Box Holdings (LSE: CBOX)

Cake Box Holdings listed on the London Stock Exchange’s AIM

Market in 2018 and has expanded to more than 230 stores

throughout the UK. It is the market leader in premium celebration

products that exclude egg, meat products and alcohol to consumers

including those who have dietary or religious restrictions. The

company has adopted an e-commerce, data-driven approach to

drive future growth and aims to optimise their store rollout based

on customer data to both improve new store performance as well as

refine their franchisee and property strategy. With a target of

doubling to 400 stores, CBOX should be able to deliver superior

shareholder returns over the medium to long-term.

Looking ahead

In the evolving technological landscape, it's become increasingly

clear how pivotal AI will be in shaping future strategies. While short-

term applications of AI, such as customer service chatbots and co-

pilot productivity tools, are becoming more commonplace, the

broader vision of leveraging AI to revolutionise corporate strategy is

still unfolding. This transition, particularly in the context of

leveraging vast corporate data, may be gradual due to inherent

corporate risk aversion.

During my recent flight to attend the Global Federation of

Competitiveness Councils meeting, the following Socrates (470 BC)

quote came to my attention: “The secret of change is to focus all of

your energy not on fighting the old, but on building the new.” This

sentiment encapsulates the transformative journey corporations

must undertake in the AI era.

For investors, the tangible benefits for companies that effectively

integrate AI can be broadly categorised into three areas:

Productivity Enhancement: AI can significantly augment people-

centric processes within organisations, unlocking new levels of

efficiency and workflow optimisation.

Creation of New Revenue Streams: Leveraging AI for personalised

marketing and data-driven insights allows for novel revenue

generation strategies, transforming how businesses interact with

customers.

Sustaining Competitive Advantages: AI enables the development of

unique customer solutions that are challenging to replicate without

access to extensive historical data. This creates a formidable

competitive edge.

As we step into this burgeoning AI-driven era, our focus remains on

evaluating the business models, financial health, and growth

strategies of potential investments in a careful, considered and

committed way.

A thorough approach lets us pinpoint those quality growth stocks

poised for long-term success. Their agility, ability to swiftly capitalise

on emerging opportunities and adeptness at applying AI to harness

market trends and demands are critical factors in their continued

success and the creation of substantial long-term value for our

investors.

Companies with a sustainable competitive advantage are especially

well-positioned to reap the economic benefits of AI. Their resilience

to market disruptions (i.e., business model disruption or price-led

competition) and the high barriers to entry for competitors needing

similar data assets make these quality companies well-positioned to

capture and retain the economic benefits of AI while maintaining

their competitive excellence.

Over the past few years, our industry and society have evolved more

broadly with heightened expectations of corporate responsibility.

Being a compassionate corporate citizen, committed to people, the

planet, and the community, is no longer optional but essential.

At ECP, we proudly embrace these values, as evidenced by our third

annual Sustainability Report which will be available in February

2024. We are committed to ensuring that our business employs best

practices to position our organisation so that we can continue to

sustainably grow through time.

We appreciate our role in the investment community, and we will

continue to focus on growing our clients’ financial wealth, but our

commitment extends beyond financial growth to include

contributing to the societal well-being of future generations.

Turning to our portfolio, we're encouraged by the notable uptick in

our companies' price-to-earnings (P/E) ratios, rebounding from

previous lows. This, combined with robust short-term financial

indicators – including organic sales growth, solid earnings, and

increasing dividends – fortifies our confidence in the future. This

positive trend suggests a promising trajectory for valuation

enhancements across our investments.

Given the current market landscape, we see a prime opportunity to

invest in high-quality franchises. These market conditions are ideal

for investors seeking resilient, growth-oriented investments,

positioning them well for long-term outperformance.

10 | Athelney Trust plc | Annual Report 2023

Strategic Report

Fund Manager’s Review

Continued

Our primary focus is investing in quality businesses within the

growth phase of their lifecycle. For investors, the material derate of

equity valuations, particularly for growth-oriented stocks, and the

expected ongoing volatility present an opportunity for those

investing in resilient, Quality Franchises - it's time to step in and

invest.

Update

The unaudited NAV on 31 January 2024 was 204.7p per share –

down by 2.1% from 31 December 2023. The share price on the same

day was 175p (trading at a discount of 14.5%). Further updates can

be found at www.athelneytrust.co.uk

Dr Manny Pohl AM

Fund Manager

12 February 2024

11 | Athelney Trust plc | Annual Report 2023

Strategic Report

Investment and Portfolio Analysis at 31 December 2023

Stock Holding Value (£)

SECTOR

Chemicals

Treatt

35,000

176,050

4.0%

Construction & materials

Clarke T

99,000

134,640

3.1%

Electronic & electrical equipment

XP Power

4,000

54,240

1.2%

Food & beverages

Fevertree Drinks

17,000

177,820

4.1%

General financial

Alpha Group International

4,000

68,000

Close Brothers

20,000

158,800

Impax Asset Management

66,000

363,000

Liontrust Asset Management

20,000

126,000

S & U

6,000

130,800

846,600

19.4%

Industrial engineering

Spirax-Sarco Engineering

500

52,525

1.2%

Leisure goods

Games Workshop

3,000

295,200

6.7%

Media

4Imprint

5,000

228,500

Rightmove

23,000

132,387

Yougov

10,100

118,170

479,057

11.0%

Mobile communications

Gamma Communications

15,000

168,600

3.9%

Multiutilities

National Grid

14,000

148,120

3.4%

Property, commercial &

residential

AEW UK REIT

580,000

583,480

Londonmetric REIT

84,000

160,860

Target Healthcare REIT

50,000

43,000

Tritax BigBox REIT

200,000

337,200

1,124,540

25.6%

Support services

Begbies Traynor

95,000

111,150

NWF Group

56,000

123,200

Paypoint

24,000

124,560

358,910

8.2%

Technology

Cerillion

10,000

160,000

3.7%

Travel and leisure

Cake Box Holdings

120,000

198,000

4.5%

Portfolio Value

4,374,302

Net Current Assets

137,668

TOTAL VALUE

4,511,970

Shares in issue

2,157,881

Audited NAV

209.1p

12 | Athelney Trust plc | Annual Report 2023

Strategic Report

Investment and Portfolio Analysis at 31 December 2023

Continued

Portfolio by Sectors

Portfolio by Listing

4.0% Chemicals

3.1% Construction & materials

1.2% Electronic &

electrical equipment

4.1% Food & beverages

19.4% General financial

1.2% Industrial

Engineering

6.7% Leisure Goods

11.0% Media

3.9% Mobile

Communications

3.4% Multiutilities

25.6% Property Comm &

Residential

8.2% Support Services

3.7% Technology

Software Services

4.5% Travel and Leisure

Portfolio By Sectors

26.4% Small Caps

3.0% Fledgling

32.9% AIM

27.1% FTSE 250

7.4% FTSE 100

3.2% Cash

Portfolio By Listing

13 | Athelney Trust plc | Annual Report 2023

Strategic Report

Section 172(1) Statement

The Directors of the Company are required to promote the success of

the Company for the benefit of the Members and Shareholders as a

whole. Section 172(1) of the Companies Act (2006) expands this duty

and requires the Directors to consider a broader range of interested

parties when considering the promotion of the Company. This wider

group of stakeholders will include employees, if any, suppliers,

customers and others, and the Board will look to understand and take

into account the needs of each stakeholder, although recognising that

different stakeholders may have conflicting priorities and not all

decisions made will be to the benefit of all stakeholder groups.

When making decisions the Board should consider the following:

• the likely consequences of any decisions in the long-term;

• the interests of the Company’s employees (if applicable);

• the impact of the Company’s operations on the environment

and the community;

• the need to foster the Company’s business relationships with

suppliers, customers and others;

• the need to act fairly for all members of the Company, and

• the desirability of the Company maintaining a reputation for

high standards of business conduct.

In line with similar small Investment Trusts and Investment Companies,

Athelney Trust plc does not have any customers and relies on a number

of third-party providers of services such as Company Administrator,

the Custodian and the Registrar to maintain its operations. The

Company takes into account the regulations of the market in which it

operates and has regard to the environment and the wider community

in which it operates.

At every Board meeting the Directors review the performance of the

Company towards meeting the Company’s Investment Objective

through its strategy. Manny Pohl is the fund manager, reports to other

Board members and answers any questions raised. Compliance with

existing regulatory and legal requirements is reviewed, together with

any new regulations that are due to be introduced or are being

proposed that may affect the Company.

The Board recognises the importance of, and is committed to,

understanding the views of Shareholders and maintaining

communication with its Shareholders in the most appropriate manner.

This is undertaken through:

Annual General Meeting

The Company, in normal circumstances encourages all Shareholders

to attend and participate at its Annual General Meeting (“AGM”).

Whilst the formal business of the meeting is the primary purpose of

the meeting, members of the Board are available to answer questions

directly from Shareholders, to provide an update to the meeting and

to offer Shareholders an insight into the business.

The Board plan to hold the 2024 AGM on 21 March 2024 at

12.00 noon. Further details regarding the 2024 AGM are

contained in the Notice of the Annual General Meeting

published in a separate notification.

Published Reports

The Company produces Annual and Half Yearly Reports and

monthly fact sheets are all available from the Company’s website

and paper copies are available on request from the registered

office. The publication of these reports is considered to be the

primary method of communication to Shareholders and other

readers of the reports and provides detailed information on the

portfolio, performance over the period and an assessment of the

outlook for the Company.

The Annual Report also contains details regarding the Company’s

corporate governance and the Board seek to ensure that the

Report is readable and is mindful that it should be fair, balanced

and understandable.

Shareholder enquiries

Shareholders can contact the Company or any of its Directors

through the Company Secretary or through their company email

address. Alternatively, letters can be sent to the registered office

address. Although the Directors are not available full time, with

the assistance of the Company Secretary they seek to maintain

open communication to all Shareholders.

Suppliers

The Company Secretary, Deborah Warburton and Administrator

GW & Co. Limited, are often the main contact point for advisors

and stakeholders in the Company. Regular communication is

maintained between the Company Secretary and the Directors

advising them of all matters concerning the Company. The

Company also relies on the provision of services from outside

parties to operate and gives consideration to the needs and

objectives of those providers and recognises that their success

will often assist the Company in achieving its objectives.

Regulators

The Company operates in an environment that is governed by

legal and regulatory requirements. The Board recognises that

these requirements are there to protect stakeholders, including

the government.

Environment and Community

As the Company does not have any direct employees nor any

physical office environment of its own it has little direct impact

on the community or the environment. The Company seeks to

reduce its impact on the environment in encouraging

Shareholders to receive Reports electronically rather than

through printed hard copies. When paper copies are requested

FSC paper is used. The Board also engage through electronic

means where possible rather than hold excessive face to face

meetings.

14 | Athelney Trust plc | Annual Report 2023

Strategic Report

Other Statutory Information

As explained within the Report of the Directors on pages 20 to 22, the

Company carries on business as an investment trust. Investment trusts

are collective closed-ended public limited companies.

Board

The Board of Directors is responsible for the overall stewardship of the

Company, including investment and dividend policies, corporate and

gearing strategy, corporate governance procedures and risk

management. Biographical details of the three male Directors, can be

found on pages 2 and 3.

One of the Directors is the Company's only employee (2022: one

employee).

Investment Objective

The investment objective of the Trust is to provide shareholders with

prospects of long-term capital growth with the risks inherent in small

cap investment minimised through a spread of holdings in quality small

cap companies that operate in various industries and sectors. The Fund

Manager also considers that it is important to maintain a progressive

dividend record.

Investment Policy

The assets of the Trust are allocated predominantly to companies with

either a full listing on the London Stock Exchange or a trading facility

on AIM or AQSE. The assets of the Trust have been allocated in two

main ways: first, to the shares of those companies which have grown

steadily over the years in terms of revenue and profits but, despite this

progress are undervalued by the market when compared to future

earnings and dividends; second, those companies whose shares are

undervalued by the market when compared with the value of land,

buildings, other assets or cash on their balance sheet.

Investment Strategy

The investment strategy employed by the Fund Manager in meeting

the investment objective focuses on active stock selection. The

selection of individual holdings is based on analysis of, amongst other

things, market positioning, competitive advantage, future growth,

financial strength and cash flows. The weighting of individual

investments reflects the Fund Manager’s conviction in the expected

future returns from those holdings.

Investment of Assets

At each Board meeting, the Board considers compliance with the

Company’s investment policy and other investment restrictions during

the reporting period. An analysis of the portfolio on 31 December 2023

can be found on pages 11 and 12 of this report.

Responsible Ownership

The Fund Manager takes a particular interest in corporate governance

and social responsibility investment policy. As stated within the

Corporate Governance Statement on pages 16 to 19, the Fund

Manager’s current policy is available on the Trust’s website

www.athelneytrust.co.uk. The Board supports the Fund Manager on

his voting policy and his stance towards environmental, social and

governance issues.

Review of Performance and Outlook

Reviews of the Company’s returns during the financial year, the

position of the Company at the year end, and the outlook for the

coming year are contained in the Chair’s Statement on pages 4

to 6 and the Fund Manager’s review on pages 7 to 10 which form

part of the Strategic Report.

Principal Risks and Uncertainties and Risk

Management

As stated within the Corporate Governance Statement on pages

16 to 19, the Board applies the principles detailed in the internal

control guidance issued by the Financial Reporting Council, and

has established a continuing process designed to meet the

particular needs of the Company in managing the risks and

uncertainties to which it is exposed.

The principal risks and uncertainties faced by the Company are

described below and in note 12 which provides detailed

explanations of the risks associated with the Company’s financial

instruments.

• Global conflict – The continuing war between Russia and

Ukraine has had a significant impact, inter alia, on inflation

and, in conjunction with affairs in China, an impact on supply

chains and globalisation. Investee companies will vary as to

the impact on them and their ability to adapt.

• Inflationary pressure – Inflation has escalated sharply in the

last 12 months and the Bank of England has raised interest

rates on several occasions in an attempt to reduce the level

of inflation. Not all investee companies are well-placed to

pass on cost pressures to their customers.

• Market – the Company’s fixed assets consist almost entirely

of listed securities and it is therefore exposed to movements

in the prices of individual securities and the market generally.

• Investment and strategic – incorrect investment strategy,

asset allocation, stock selection and the use of gearing could

all lead to poor returns for shareholders.

• Regulatory – Relevant legislation and regulations which apply

to the Company include the Companies Act 2006, the

Corporation Tax Act 2010 (“CTA”) and the Listing Rules of the

Financial Conduct Authority (“FCA”). The Company has noted

the recommendations of the UK Corporate Governance Code

and its statement of compliance appears on pages 16 to 19.

A breach of the CTA could result in the Company losing its

status as an investment company and becoming subject to

capital gains tax, whilst a breach of the Listing Rules might

result in censure by the FCA. At each Board meeting the

status of the Company is considered and discussed, so as to

ensure that all regulations are being adhered to by the

Company and its service providers.

15 | Athelney Trust plc | Annual Report 2023

Strategic Report

Other Statutory Information

Continued

• Operational – failure of the accounting systems or disruption to

its business, or that of other third-party service providers, could

lead to an inability to provide accurate reporting and monitoring,

leading to a loss of shareholders’ confidence.

• Financial – inadequate controls by the Fund Manager or other third-

party service providers could lead to misappropriation of assets.

Inappropriate accounting policies or failure to comply with accounting

standards could lead to misreporting or breaches of regulations.

• Liquidity – the Company may have difficulty in meeting

obligations associated with financial liabilities.

• Interest rate risk

– this is not considered to be a direct risk to the

Company other than through its effect on investee companies.

• Trading – the Company is a small trust and its shares can be

illiquid, which means that investors may have difficulty in dealing

in larger amounts of shares.

The Company has complied with the MiFID ll and KID legislation and

the deadlines to ensure that shares in the Company were still able to

be traded. A copy of the Company’s KID can be found on the website

http://www.athelneytrust.co.uk

The Board is not aware of any breaches of laws or regulations during

the period under review and up to the date of this report.

The Board seeks to mitigate and manage these risks through

continual review, policy setting and enforcement of contractual

obligations. It also regularly monitors the investment environment

and the management of the Company’s investment portfolio.

Investment risk is spread through holding a wide range of securities

in different industrial sectors.

Statement Regarding Annual Report and

Financial Statements

Following a detailed review of the Annual Report and Financial

Statements by the Audit Committee, the Directors consider that

taken as a whole it is fair, balanced and understandable and provides

the information necessary for shareholders to assess the Company’s

performance, business model and strategy.

The Directors have adopted best practices as described by the AIC’s

Statement of Recommended Practice on financial statements dated

July 2022.

Greenhouse Gas Emissions

As an investment company with its activities outsourced to third

parties or self managed by the Non-Executive Directors, the

Company’s own direct environmental impact is minimal. The

Company has no greenhouse gas emissions to report from its

operations, nor does it have responsibility for any other emissions

producing sources under the Companies Act 2006 (Strategic Report

and Directors’ Reports) Regulations 2013. Furthermore, the

Company considers itself to be a low energy user under the

Streamlined Energy & Carbon Reporting regulations and therefore is

not required to disclose energy and carbon information.

Social, Community and Human Rights issues

The Company has one employee and, as far as the Board is aware,

no issues exist in respect of social, community or human rights

issues.

Alternative Investment Fund Manager’s Directive

(“AIFMD”)

The Company is registered as its own AIFM with the FCA under the

AIFMD and confirms that all required returns have been completed

and filed.

On behalf of the Board

Dr Manny Pohl AM

Managing Director

12 February 2024

16 | Athelney Trust plc | Annual Report 2023

Corporate Governance Statement

Shareholders hold the Directors of a company responsible for the

stewardship of that company’s affairs. Corporate governance is

the process by which a Board of Directors discharges this

responsibility. The Company’s arrangements in respect of

corporate governance are explained in this report. The corporate

governance statement forms part of the Report of the Directors

which can be found on pages 20 to 22.

The Company is required to comply with, or to explain its non-

compliance with, the relevant provisions of the UK Corporate

Governance Code issued by the Financial Reporting Council (the

‘FRC’) in July 2022 which can be found at www.frc.org.uk. The

Association of Investment Companies issued its own Code of

Corporate Governance in April 2021 (the ‘AIC Code’), which can be

found at www.theaic.co.uk. and which has been approved by the

FRC as it addresses all the principles of the UK Corporate

Governance Code as well as setting out additional principles and

provisions on issues which are of specific relevance to investment

trusts. The Board considers that reporting against the Principles

and Provisions of the AIC Code, which has been endorsed by the

FRC, provides more relevant information to shareholders.

The Company has not complied with the provisions of the AIC Code

and the UK Corporate Governance Code in respect of the

following:

• Due to the size of the Board, formal performance

evaluations of the Chair, the Board, its Committees and

individual Directors are not undertaken. Instead, it is felt

more appropriate to address matters as and when they

arise.

• Due to the size of the Board, it is felt inappropriate to

appoint a senior independent non-executive Director.

• All the Directors have agreements for provision of their

services but no limit has been imposed on the overall

length of service. The recommendation of the Code is

for fixed term renewable contracts. In recent years each

of the Directors has retired and, where appropriate,

sought re-election. One third of the Directors retires by

rotation annually in accordance with the Company’s

articles of association.

• The Company has one employee. The Company

Secretary’s line of communication in relation to whistle-

blowing is to the Chair of the Company.

The Company does not have a Nominations Committee. During the

year the Board comprised a maximum of three Directors who

liaised continuously throughout and were aware of their

obligations to consider recruitment of further Directors as and

when the occasion occurred.

Board Membership

At 31 December 2023 the Board consisted of three Directors, of which

two were and remain independent. The biographies of all the current

Directors are contained on pages 2 and 3.

Frank Ashton retired by rotation and was re-elected at the AGM on 16

March 2023. The Directors believe that the Board has the balance of

skills, experience and length of service to enable it to provide effective

leadership and proper governance of the Company. The Directors

possess a range of business and financial expertise relevant to the

direction of the Company and consider that they commit sufficient

time to the Company’s affairs.

All Directors receive relevant training, collectively or individually, as

necessary.

The Directors of the Company meet at regular Board Meetings. During

the year ended 31 December 2023, the Board met a total of 10 times.

An additional audit planning meeting was attended by Simon Moore

and the Company Secretary.

Board

Audit

Remuneration

Meetings

Committee

E C Pohl

N F Ashton

S Moore

Jason Pohl is the alternate Director for Dr Manny Pohl, he was not

required to attend any Board meetings during the year.

The Board subscribes to the view expressed in the AIC Code that long-

serving Directors should not be prevented from forming part of an

independent majority. It does not consider that the length of a

Director’s tenure reduces their ability to act independently. The

Board’s policy on tenure is that continuity and experience are

considered to add significantly to the strength of the Board and, as

such, no limit on the overall length of services of any of the Company’s

Directors, including the Chair, has been imposed, although the Board

believes in the merits of periodic and progressive refreshment of its

composition.

The Board of Directors of the Company comprises three male

Directors. Whilst the Board recognises the benefits of diversity in

appointments to the Board, the key criteria for the appointment of

new Directors will be the appropriate skills and experience in the

interest of shareholder value. The Directors are satisfied that it has an

appropriate breadth of skills and experience. The Board is not

currently planning to add a fourth Director to the Board.

The basis on which the Company aims to generate value over the

longer term is set out in the Strategic Report on pages 4 to 15. All

matters, including corporate and gearing strategy, investment and

dividend policies, corporate governance procedures and risk

management are reserved for the approval of the Board of Directors.

The Board receives full information on the Company’s investment

performance, assets, liabilities and other relevant information in

advance of Board meetings.

17 | Athelney Trust plc | Annual Report 2023

Corporate Governance Statement

Continued

Board Responsibilities and Relationship with the

Fund Manager

The Board is responsible for the investment policy (the Mandate) and

strategic and operational decisions of the Company and for ensuring

that the Company is run in accordance with all regulatory and

statutory requirements.

These matters include:

• The maintenance of clear investment objective and risk

management policies, changes to which require Board approval;

• The monitoring of the business activities of the Company,

including investment performance and annual budgeting; and

• Review of matters delegated to the Fund Manager and Company

Secretary.

The Fund Manager ensures that Directors have timely access to all

relevant management and financial information to enable informed

decisions to be made and contacts the Board as required for specific

guidance. The Company Secretary and Fund Manager prepare

monthly reports for Board consideration on matters of relevance, for

example current valuation and portfolio changes, dividend

comparisons with previous years, cash availability and requirements

and a breakdown of shareholdings by listing and sector. The Board

takes account of Corporate Governance best practice.

Corporate Governance and Social Responsible

Investment Policy

The Board is aware of its duty to act in the interests of the Company.

The Board acknowledges that there are risks associated with

investment in companies which fail to conduct business in a socially

responsible manner. The Fund Manager considers social,

environmental and ethical factors which may affect the performance

or value of the Company's investments. The Directors, through the

Fund Manager, encourage companies in which investments are held

to adhere to best practice in the area of Corporate Governance. They

believe that this can best be achieved by entering into a dialogue with

company management to encourage them, where necessary, to

improve their policies in this area. The Company's ultimate objective

is to deliver superior long term returns for Shareholders which the

Board believe will be produced on a sustainable basis by investing in

companies which adhere to best practice in the area of Corporate

Governance. Accordingly, the Fund Manager will seek to favour

companies which pursue best practice in this area.

Chair

Frank Ashton is independent and considers himself to have sufficient

time to commit to the Company’s affairs.

Directors’ Independence

In accordance with the Listing Rules for investment entities, the Board

has reviewed the status of its individual Directors and the Board as a

whole. Two of the three current Directors including the Chair are

considered by the Board to be independent in character and

judgement and there are no relationships or circumstances which are

likely to affect or could appear to affect the Directors’ judgement.

Remuneration Committee

During the year the Remuneration Committee comprised Simon

Moore and Frank Ashton. The Committee will meet as necessary

to determine and approve Director’s fees, following proper

consideration of the role that individual Directors fulfil in respect

of Board and Committee responsibilities, the time committed to

the Company’s affairs and remuneration levels generally within

the Investment Trust Sector.

Under Listing Rule 15.6.6, the Code principles relating to Directors’

remuneration do not apply to an investment trust company other

than to the extent that they relate specifically to non-executive

Directors. Detailed information on the remuneration

arrangements can be found in the Directors’ remuneration report

on pages 24 to 26 and in note 4 to the financial statements.

Company Secretary

The Company Secretary, Deborah Warburton FCCA, is

responsible for ensuring that Board and Committee procedures

are followed and that the Company complies with regulations.

The Company Secretary also ensures timely delivery of

information and reports and that the statutory obligations of the

Company are met.

All the Directors have access to the advice and services of the

Company Secretary.

Independent Professional Advice and

Directors’ Training

Individual Directors may, at the expense of the Company, seek

independent professional advice on any matter that concerns

them in the furtherance of their duties.

The Chair liaises on a regular basis with the other Directors and

the Company Secretary to ensure that they are maintaining

adequate training and continuing professional development.

Institutional Investors – Use of Voting Rights

and Voting Policy

The Fund Manager, in the absence of explicit instruction from the

Board, is empowered to exercise discretion in the use of the

Company’s voting rights. The Fund Manager votes against

resolutions he believes may damage shareholders’ rights or

economic interests.

Audit Committee

During the year the Audit Committee comprised Simon Moore

and Frank Ashton. The Committee met three times during the

year. The duties of the committee include reviewing the Annual

and Interim Accounts, the system of internal controls, and the

terms of appointment and remuneration of the auditor. During

this year due to the resignation of Hazlewood’s LLP as the

Company auditor the committee oversaw the tender process and

appointment of the new auditor Moore Kingston Smith LLP. The

committee agreed their remuneration and their independence

and objectivity. It is also the forum through which the auditor

reports to the Board of Directors.

18 | Athelney Trust plc | Annual Report 2023

Corporate Governance Statement

Continued

Much of the Board’s corporate governance responsibility is discharged through the Audit Committee. This Committee operates within clearly

defined written terms of reference which are available upon request at the Company’s registered office.

Significant Issues Considered by the Audit Committee in Relation to the Financial Statements

Matter

Action

Investment Portfolio Valuation

The Company’s portfolio is invested predominantly in listed

securities. Although all the securities are fully listed or traded

on AIM or AQSE, errors in the portfolio valuation could have a

material impact on the Company’s net asset value per share.

The portfolio is valued at bid price at the end of each month by

the company secretary, using the London Stock Exchange bid

prices at close of business on the last day of the month.

Misappropriation of Assets

Misappropriation of the Company’s investments or

cash balances could have a material impact on its net

asset value per share.

The portfolio is agreed on a monthly basis by the Company

Secretary during the completion of the monthly accounts.

Income Recognition

Incomplete or inaccurate income recognition could have an

adverse effect on the Company’s net asset value and earnings

per share and its level of dividend cover.

The level of income received for the year and the dividend

forecast for the year are agreed on a monthly basis with the Fund

Manager and the Company Secretary.

Ukraine War

The war in Ukraine has adversely affected the global economy

and this, may impact on the valuation of investee companies

and their ability to pay dividends.

The Fund manager and the Administrator monitor the dividend

situation monthly and make the Board aware of cancelled,

postponed dividends as soon as they become aware.

The Audit Committee reviews the scope and results of the audit and,

during the year, considered and approved Moore Kingston Smith

LLP’s plan for the audit of the financial statements for the year ended

31 December 2023. At the conclusion of the audit Moore Kingston

Smith LLP did not highlight any issues to the Audit Committee which

would cause it to qualify its audit report nor did it highlight any

fundamental internal control weaknesses. Moore Kingston Smith

LLP issued an unqualified audit report which is included on pages 27

to 31.

As part of the review of auditor independence and effectiveness,

Moore Kingston Smith LLP has confirmed that it is independent of

the Company and has complied with relevant auditing standards. In

evaluating Moore Kingston Smith LLP, the Audit Committee has

taken into consideration the standing, skills and experience of the

firm and the audit team. Following the FRC regulatory requirements,

the audit partner rotates after five years.

Company Information

The following information is disclosed in accordance with The Large

and Medium-Sized Companies and Groups (Accounts and Reports)

Regulations 2008 and DTR 7.2.6.

• The Company’s capital structure and voting rights are

summarised on pages 20 and 21.

• Details of the substantial shareholders in the Company are

listed on page 20.

• The rules concerning the appointment and replacement of

Directors are contained in the Company’s Articles of

Association and are discussed on page 20.

The Board is seeking to renew its current powers to issue and re-

purchase shares at the forthcoming Annual General Meeting.

• There are no restrictions concerning the transfer of

securities in the Company; no special rights with regard to

the control attached to securities; no restrictions on voting

rights; no agreements which the Company is party to that

might affect its control following a successful takeover.

• There are no agreements between the Company and its

Directors concerning compensation for loss of office.

19 | Athelney Trust plc | Annual Report 2023

Corporate Governance Statement

Continued

Relations with Shareholders

The Company places great importance on communication with

shareholders and welcomes their views. The Chair and the other

Directors have spoken to major shareholders during the year to

discuss their aspirations for the Company going forward. The Annual

General Meeting of the Company provides a forum, both formal and

informal, for shareholders to meet and discuss issues with the

Directors of the Company.

To comply with the AIC Code the Board are required to consult with

shareholders when 20 percent or more of votes have been cast

against Board recommendations for a resolution. All resolutions

proposed at the AGM were unanimously passed.

The notice and further details of the Annual General Meeting, to be

held on 21 March 2024 at 12.00 noon, is published in a separate

notification. The Annual Report and Notice of Annual General

Meeting are sent to shareholders at least 20 working days before the

Meeting.

Internal Control

The Board is responsible for the Company’s system of internal

control and for reviewing its effectiveness. It has therefore

established an ongoing process designed to meet the particular

needs of the Company in managing the risks to which it is exposed,

consistent with the internal control guidance issued by the Financial

Reporting Council.

Adequate internal controls are in place for identifying, evaluating

and managing risks faced by the Company. This process, together

with key procedures established with a view to providing effective

financial control, has been in place for the full financial year and up

to the date the financial statements were approved and is consistent

with the internal control guidance issued by the Financial Reporting

Council.

The Board has reviewed the need for an internal audit function. It

has decided that the systems and procedures employed by the

Directors, provide sufficient assurance that a sound system of

internal control, which safeguards the Company’s assets, is

maintained. An internal audit function specific to the Company is

therefore considered unnecessary.

Internal Control Assessment Process

Risk assessment and the review of internal controls are undertaken

by the Board in the context of the Company’s overall investment

objective. The review covers the key business, operational,

compliance and financial risks facing the Company. In arriving at its

judgement of what risks the Company faces, the Board has

considered the Company’s operations in the light of the following

factors:

• The nature and extent of risks which it regards as acceptable

for the Company to bear within its overall business objective;

• The threat of such risks becoming a reality;

• The Company’s ability to reduce the incidence and impact

of risk on its performance; and

• The cost and benefits to the Company of third parties

operating the relevant controls.

Against this background, the Board has split the review of risk and

associated controls into four sections reflecting the nature of the

risks being addressed. These sections are as follows:

• Corporate strategy;

• Published information, compliance with laws and

regulations;

• Relationship with service providers; and

• Investment and business activities.

The key procedures which have been established to provide

internal controls are as follows:

• Custody and valuation of assets is undertaken by James

Sharp & Co;

• The duties of investment management, accounting and

the custody of assets are segregated. The procedures of

the individual parties are designed to complement one

another;

• The Directors of the Company clearly define the duties and

responsibilities of their agents and advisers. The

appointment of agents and advisers is conducted by the

Board after consideration of the quality of the parties

involved; the Board monitors their ongoing performance

and contractual arrangements;

• Mandates for authorisation of investment transactions

and expense payments are set by the Board; and

• The Board reviews financial information produced by the

Fund Manager and the Company Secretary in detail on a

regular basis.

In accordance with guidance issued to Directors of listed

companies, the Directors have carried out a review of the

effectiveness of the system of internal control as it has operated

over the year.

On behalf of the Board

Dr Manny Pohl AM

Managing Director

12 February 2024

20 | Athelney Trust plc | Annual Report 2023

Report of the Directors

The Directors present their report and audited financial statements

of the Company for the year ended 31 December 2023. This report

also contains certain information required in accordance with S992

of the Companies Act 2006.

Results and Dividends

The return on ordinary revenue activities before dividends for the

year is £167,070 (2022: £148,531) as detailed on page 32.

The company paid an interim dividend of 2.2p per ordinary share on

the 24 September 2023.

It is recommended that a final dividend of 7.6p per ordinary share

be paid. This will increase the total dividend paid this year to 9.8p

(2022: 9.6p) per ordinary share.

Principal Activity and Status

The Company (company number: 02933559) is a public limited

company, limited by shares and incorporated in England and Wales.

The registered office is Waterside Court, Falmouth Road, Penryn,

TR10 8AW.

The Company is an investment company within the meaning of

Section 833 of the Companies Act 2006 and has been granted

approval from HM Revenue & Customs (“HMRC”) as an investment

trust under sections 1158 and 1159 of the Corporation Tax Act 2010

and will continue to be treated as an investment trust company,

subject to continuing to meet the conditions for approval. The

Company has a premium listing on the London Stock Exchange and

its principal activity is portfolio investment.

The Directors are of the opinion that the Company has conducted its

affairs for the year ended 31 December 2023 so as to be able to

continue to qualify as an investment trust.

The Company’s status as an investment trust allows it to obtain an

exemption from paying taxes on the profits made from the sale of its

investments and all other net capital gains.

Directors

Biographical details of the Directors can be found on pages 2 and 3.

In accordance with the arrangements for retirement contained in

the Company’s Articles of Association, the Directors will retire by

rotation on a three yearly cycle. Simon Moore will retire at the 2024

AGM and will offer himself for re-election.

In addition to any power of removal conferred by the Companies

Acts, the Company may by special resolution remove any Director

without notice.

Directors’ and Officers’ Liability Insurance

Directors’ and Officers’ liability insurance cover was in place

throughout the financial year and as at the date of this report. The

Company’s Articles of Association provide, subject to the provisions

of UK legislation, that the Directors may be indemnified out of the

assets of the Company in respect of liabilities they may sustain or

incur in connection with their appointment.

Conflicts of Interest

Each Director has a statutory duty to avoid a situation where they

have, or could have, a direct or indirect interest which conflicts, or

may conflict, with the interests of the Company. A Director will not

be in breach of that duty if the relevant matter has been authorised

by the Board in accordance with the Company’s Articles of

Association. The Board has approved a protocol for identifying and

dealing with conflicts and conducts a review of actual or possible

conflicts at least annually. No conflicts or potential conflicts were

identified during the year. It is not considered that an interest in the

Company’s shares held by a Director will of itself give rise to a

situation where that Director’s interests or duties conflict with the

interests of the Company.

Capital Structure

At 31 December 2023 the Company’s capital structure consisted of

2,157,881 Ordinary Shares of 25p each (2021: 2,157,881 Ordinary

Shares of 25p each).

Directors and Their Interests

The Directors who held office during the year and at the date of this

report are shown below; their interest in the ordinary shares of the

Company is stated on page 25 in the Directors’ Remuneration

Report.

Dr E. C. Pohl AM (Managing Director)

N. Ashton (Chair)

S. Moore (Non-Executive Director)

The Company does not have any contract of significance subsisting

during the year, with any other company in which a Director is or

was materially interested.

J C Pohl as alternate Director for Dr E C Pohl. As Dr E C Pohl was able

to attend all meetings of the Board during the year, J C Pohl was not

required to attend any Board meetings.

Substantial Shareholders

The Directors have been notified of the following major

shareholdings in the Company that represent greater than 3% of the

voting rights:

Ordinary Shares % of

Issue

Astuce Group 550,000 25.49

IP Worldwide Flexible Fund 339,054 15.71

Mehr Mutual 121,978 5.65

E C Pohl & Co Pty Ltd 86,000 3.99

Mr GW & Mrs DJ Whicheloe 81,500 3.78

Mrs E Davison 75,000 3.48

Mr C Frostick 70,500 3.27

Mr S Moore 67,500 3.13

P Grodzinski 65,000 3.01

Out of the nine major shareholders listed above Dr. Manny Pohl has

control over two substantial shareholdings amounting to 29.48% of

the total shareholding, he is also in contact with IP Worldwide

Flexible Fund and Mr C Frostick on a regular basis. Simon Moore has

control of 3.13% of the total shareholdings and is in regular contact

with two of the remaining four substantial shareholders.

21 | Athelney Trust plc | Annual Report 2023

Report of the Directors

Continued

The remaining two are in regular contact with the Directors (or their

respective agent) to ensure that they are frequently apprised and

are content with the manner in which the Company is being run.

There have been no changes to the substantial shareholders up until

31 January 2024.

Dividends

The Ordinary Shares carry a right to receive dividends which are

declared from time to time by an Ordinary Resolution of the

Company (up to the amount recommended by the Directors) and to

receive any interim dividends which the Directors may resolve to

pay.

Capital Entitlement

On a winding up, after meeting the liabilities of the Company, the

surplus assets will be paid to ordinary shareholders in proportion to

their shareholdings.

Voting

On a show of hands, every ordinary shareholder present in person

or by proxy has one vote and, on a poll, every ordinary shareholder

present in person has one vote for every share he/she holds and a

proxy has one vote for every share in respect of which he/she is

appointed.

Engagement with Suppliers and Other Business

Relationships

The Directors have regard for the need to maintain good business

relationships with suppliers and other businesses that the Company

may have contact with throughout the year. Suppliers are paid in a

timely manner and well within the credit terms afforded to the

Company. Other business relationships are maintained on a

professional and courteous level with regular contact being

maintained by the Fund Manager, Company Secretary and Audit

Committee Chair.

Going Concern

In assessing the going concern basis of accounting, the Directors

have had regard to the guidance issued by the Financial Reporting

Council. They have considered the current cash position of the

Company, and forecast revenues for the current financial year. The

Directors have also taken into account the Company’s investment

policy, which is described on page 14 is subject to regular Board

monitoring processes, and is designed to ensure that the Company

is invested in listed securities and those traded on AIM or AQSE.

The Company retains title to all assets held by its Custodian. Note 12

to the financial statements sets out the financial risk profile of the

Company and indicates the effect on its assets and liabilities of falls

and rises in the value of securities, market rates of interest and

changes in exchange rates.

The assets of the Company consist mainly of marketable securities,

the directors are of the opinion that at the time of approving the

accounts, the Company has adequate resources to continue in

operational existence for the foreseeable future. For this reason, they

continue to adopt the going concern basis in preparing the accounts.

In addition, the Directors have regard to ongoing investor interest in

the sustainability of the Company’s business model and in the

continuation of the Company, specifically being interested in feedback

from meetings and conversations with Shareholders. In addition to

considering the principal risks on pages 14 and 15 and the financial

position of the Company as described above, the Board has also

considered the following further factors:

• the Board continues to adopt a long-term view when making

investments;

• regulation will not increase to a level that makes the running of the

Company uneconomical; and

• the performance of the Company will be satisfactory and should

performance be less than the Board deem acceptable it has the

powers to take appropriate action.

Viability Statement

The Directors have assessed the prospects of the Company for a period

of three years. The Board believes this time period is appropriate

having consideration for the Company’s principal risks and

uncertainties (outlined on pages 14 and 15), its portfolio of listed

equity investments and cash balances, and its ability to achieve the

stated dividend policy. The Directors have assessed the ability of the

Company to continue as a going concern as outlined above.

In making this assessment, the Directors have considered detailed

information provided at Board meetings which includes the

Company’s balance sheet, investment portfolio and income and

operating expenses.

Based on the above, the Board has a reasonable expectation that the

Company fully expects it will be able to continue in operation and meet

its liabilities as they fall due over the three-year period of this

assessment.

Board Diversity

When recruiting a new Director, the Board’s policy is to appoint

individuals on merit matched against the skill requirements identified

by the Board.

The Board believes diversity is important in bringing an appropriate

range of skills, knowledge and experience to the Board and gives this

consideration when recruiting new Directors and has also noted the

requirements of Listing Rule 9.8.6R (9) following the Parker Report on

increasing the diversity on the boards of public companies.

As at 31 December 2023, there were three male Directors on the

Board. All Directors identified themselves as Caucasian by ethnic

background.

When making appointments in the future the Board will continue to

operate an open-minded approach to recruitment without restrictions

against any perceived group or individual. The Board will take into

consideration the diversity targets set by Listing Rule 9.8.6R (9) when

making future appointments, however due to the size of the Board

meeting a target of 40% of Directors being women with one being a

senior Board position, and one individual being from a minority ethnic

background may not be reached in the immediate future.

The Company does not have any employees other than the Managing

Director and, as a result, the Board does not consider it necessary to

establish means for employee engagement with the Board as required

by the latest version of the UK Corporate Governance Code.

22 | Athelney Trust plc | Annual Report 2023

Report of the Directors

Continued

Modern Slavery Act

As an investment vehicle that does not provide goods or services in

the normal course of business, nor does it have, apart from the

Directors, any employees, the Directors consider that the Company

is not required to make a slavery or human trafficking statement

under the Modern Slavery Act 2015.

The Criminal Finances Act 2017 and Bribery Act

2010

The Company has zero tolerance towards the criminal facilitation of

tax evasion and a policy of zero tolerance in relation to bribery and

corruption both in its own actions and those of its third-party

advisors and service providers.

Financial Instruments

The Company’s financial instruments comprise its investment

portfolio, cash balances and debtors and creditors that arise

directly from its operations such as sales and purchases awaiting

settlement and accrued income. The financial risk management

objectives and policies arising from its financial instruments and the

exposure of the Company to risk are disclosed in note 12 to the

financial statements.

Annual General Meeting

The Notice of Annual General Meeting is published in a separate

notification.

Statement of Disclosure to Auditor

The Directors confirm that, so far as each of them is aware, there is no

relevant audit information of which the Company’s auditor is unaware

and the Directors have taken all the steps that they ought to have

taken as Directors in order to make themselves aware of any relevant

audit information and to establish that the Company’s auditor is

aware of that information.

Re-appointment of Auditor

A resolution will be put to the shareholders at the Annual General

Meeting proposing the re-appointment of Moore Kingston Smith LLP

as Auditor to the Company. Moore Kingston Smith LLP have indicated

their willingness to continue in office.

On behalf of the Board

Dr Manny Pohl AM

Managing Director

12 February 2024

23 | Athelney Trust plc | Annual Report 2023

Statement of Directors’ responsibilities in respect of the

financial statements

The Directors are responsible for preparing the Annual Report and

the financial statements and have elected to prepare them in

accordance with applicable United Kingdom law and United

Kingdom Accounting Standards (United Kingdom Generally

Accepted Accounting Practice). Under company law the Directors

must not approve the financial statements unless they are satisfied

that they give a true and fair view of the state of affairs of the

Company and of its profit or loss for that period.

In preparing the financial statements, the Directors are required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and estimates that are reasonable and

prudent;

• present information, including accounting policies, in a manner

that provides relevant, reliable, comparable and understandable

information;

• state whether applicable UK Accounting Standards have been

followed, subject to any material departures disclosed and

explained in the financial statements; and

• prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the Company will

continue in business.

The Directors 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 to enable them to ensure that

the financial statements comply with the Companies Act 2006. They

are also responsible for safeguarding the assets of the Company and

hence for taking reasonable steps for the prevention and detection

of fraud and other irregularities.

Under applicable law and regulations, the Directors are also

responsible for preparing a Report of the Directors, a Strategic Report,

Directors’ Remuneration Report and Corporate Governance

Statement.

The Directors state that to the best of their knowledge:

• the Financial Statements, prepared in accordance with UK

Generally Accepted Accounting Practice, give a true and fair view

of the assets, liabilities, financial position and net return of the

Company;

• consider the Annual Report and accounts, taken as a whole, are

fair, balanced and understandable and provide the necessary

information for shareholders to assess the Company’s position and

performance, business model and strategy; and

• the Chair’s Statement and Report of the Directors include 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.

The Directors are responsible for the maintenance and integrity of the

corporate and financial information related to the Company including

on the Company’s website http://www.athelneytrust.co.uk

Legislation in the United Kingdom governing the preparation and

dissemination of financial statements may differ from legislation in

other jurisdictions.

On behalf of the Board

Dr Manny Pohl AM

Managing Director

12 February 2024

24 | Athelney Trust plc | Annual Report 2023

Directors’ Remuneration Report

The Board has prepared this Report in accordance with the

requirements of Section 421 of the Companies Act 2006. An Ordinary

Resolution will be put to the members to approve the Report at the

forthcoming Annual General Meeting.

The law requires the Company’s Auditor to audit certain disclosures

provided. Where disclosures have been audited, they are indicated

as such. The Auditor’s opinion is included in their report on pages

27 to 31.

Remuneration Committee

The Company had a Remuneration Committee during the year

comprising Simon Moore and Frank Ashton.

The Committee met during the year to review and implement

measures to avoid or manage conflicts of interest where applicable

and to consider and approve the Directors’ remuneration for the

year ending 31 December 2023.

Policy on Directors’ Remuneration

The Board’s policy is that the remuneration of non-executive

Directors should be sufficient to attract and retain Directors with

suitable skills and experience, and is determined in such a way as to

reflect the experience of the Board as a whole, in order to be

comparable with other organisations and appointments. It is

intended that this policy will continue for the year ending 31

December 2024 and thereafter.

The fees for non-executive Directors are determined within the

limits set out in the Company’s Articles of Association. The approval

of shareholders would be required to increase the limits set out in

the Articles of Association. Directors are not eligible for bonuses,

pension benefits, share options, long-term incentive schemes or

other benefits, as the Board does not consider such arrangements or

benefits necessary or appropriate.

Fees for any new Director appointed will be made on the same basis.

Non-executive Director’s fees have been set at £10,500 per annum

for a number of years and no changes are expected for the

foreseeable future.

The salary for the Managing Director and Fund Manager has been

fixed at 0.75% of the portfolio value.

The policy was last approved by Shareholders at the Annual General

Meeting on 16 March 2023 and will remain valid until the Annual

General Meeting in 2025.

Company Performance

The graph below compares capital growth, for the ten financial

years ended 31 December 2023, as a cumulative performance graph

over the whole 10 years and a table of discrete calendar year

performance figures. The comparison is between AIM All-Share and

FTSE Small Caps indices as the majority of investment holdings by

the Company are a constituent of one or the other of these two

indices. The comparison is required by Statutory Instrument to

enable the readers of the accounts to compare the performance of

the Company.

Past performance is no guarantee of future performance.

100

120

140

160

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Capital Growth

(re-based to 100 at 31/12/2013)

ATY NAV FTSE100 FTSE 250 FTSE Small Cap AIM All Share

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

ATY NAV

4.0% 7.5% 2.5% 13.4% -20.7% 18.

2% -4.4% 21.5% -29.3% -4.7%

FTSE 100

-2.7% -4.9% 14.4% 7.6% -12.5% 12.1% -14.3% 14.6% 1.0% 3.8%

FTSE 250

0.9% 8.4% 3.7% 14.7% -15.6% 25.0% -6.4% 14.3% -19.7% 4.4%

FTSE Small Cap

-24.0% 7.8% 4.5% 3.6% -23.8% 31.2% 4.4% 20.0% -16.3% 3.0%

AIM All Share

-31.4% 27.5% 8.6% 8.8% -34.2% 36.4% 20.7% 5.2% -31.7% -8.2%

25 | Athelney Trust plc | Annual Report 2023

Directors’ Remuneration Report

Continued

Directors’ Remuneration for the Year (audited)

The Directors who served in the year received the following

remuneration in the form of salaries or non-executive Directors’ fees,

no other salary related payments were made to any Director during

the year

2023

2022

Dr E C Pohl - Fund Manager

34,193

40,077

S Moore (Non-executive)

10,500

F Ashton (Chair)

10,500

Director’s expenses - -

55,193

61,077

The Directors’ remuneration for the year of £55,193 which is down

by 14.7% on 2022 and is before the proposed final dividend of 7.6p

increasing the total dividend for the year to 9.8p (2022: 9.6p) per

ordinary share, and as compared to total dividends paid in the year

at 9.7p per share amounting to £209,314 (2022: £207,156). The

remuneration decrease is due to the decrease in the portfolio value

during the year on which the Fund Manager’s fee is based.

Expected Fees

for the Year to

31 December

2024

Fees for Year

to 31

December

2023

Chair basic fee

10,500

Fund Manager

37,000

34,193

Non-Executive Director

10,500

No expenses were claimed by any Directors during this year.

Performance, Service Contracts, Compensation

and Loss of Office

• The Directors’ remuneration is not subject to any

performance related fee.

• No Director was interested in contracts with the

Company during the period or subsequently.

• The terms of appointment provide that a Director may

be removed without notice.

• Compensation will not be due upon leaving office.

• No Director is entitled to any other monetary payment or any

assets of the Company.

• No incentive or introductory fees will be paid to encourage

a directorship.

• The Directors are not eligible for bonuses, pension

benefits, share options, long term incentive schemes or

other benefits.

Directors’ & Officers’ liability insurance cover is maintained by the

Company on behalf of the Directors.

Relative importance of spend on pay

2023

2022

Change

Total remuneration paid to

the Fund Manager

34,193

40,077

(14.7)%

Total remuneration paid to

non-executive Directors

21,000

Total remuneration paid

55,193

61,077

(14.7)%

Directors’ beneficial and family interests

(audited)

The interests of the Directors and their families in the Ordinary

shares of the Company are set out below:

31 31

December December

2023 2022

(or date of (or date of

Resignation appointment

If earlier) if later)

Dr E. C. Pohl -¹ -¹

S. Moore 67,500 67,500

F. Ashton 2,234 2,234

Notes:

1. Dr. E. C. Pohl is the sole beneficial owner of E C Pohl & Co

Pty Limited. E C Pohl & Co Pty Limited holds 86,000 shares

(2022: 86,000).

None of the Directors nor any persons connected with them had a

material interest in the Company’s transactions, arrangements or

agreements during the year other than through their holdings in the

Company’s shares. There are no requirements for the Director’s to

own shares in the Company.

The Directors are fully aware that the Company is not a close

company and of the rules associated with this status. The Company

Secretary maintains a record of shareholders which is regularly

updated. The Company breached the 5/50 rule during 2019 and this

has remained during the following three years due to the top 5

shareholders owning more than 50% of the total shares in the

company. The Company holds its Investment Trust status under the

S446 Companies Act 2010 exemption because more than 35% of the

company’s shares are held by the public and have been actively

traded in the past 12 months on the London Stock Exchange.

The Directors’ Remuneration Report for the year ended 31 December

2022 was approved by shareholders at the Annual General Meeting

held on 16 March 2023. The votes cast by proxy were as follows:

Number of % of

Votes votes

For 831,818 38

Against 998 -

Total votes cast 832,816 38

Number of votes withheld Nil -

26 | Athelney Trust plc | Annual Report 2023

Directors’ Remuneration Report

Continued

Directors’ Service Contracts

Each of the Directors has a service contract or letter of engagement

with the Company for an initial three-year term commencing in

2019. These were renewed for a further three years before the

2022 AGM. There are no provisions in the service agreements for

payments to be made for loss of office, the service contracts are

kept at the Registered Office and are available for inspection by

appointment.

The letters of engagement for all the Directors provide for renewal

by the Board on terms to be agreed from time to time.

Approval

The Directors’ Remuneration Report was approved by the Board

on 12 February 2024.

Dr Manny Pohl AM

Managing Director

27 | Athelney Trust plc | Annual Report 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

ATHELNEY TRUST PLC

Opinion

We have audited the financial statements of Athelney Trust plc for the

year ended 31 December 2023 which comprise the Income Statement,

the Statement of Financial Position, the Statement of Changes in Equity,

the Statement of Cash Flows, and notes to the financial statements,

including significant accounting policies. The financial reporting

framework that has been applied in their preparation is applicable law

and United Kingdom Accounting Standards, including FRS 102 ‘The

Financial Reporting Standard Applicable in the UK and Republic of

Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the Company’s affairs

as at 31 December 2023 and of the Company’s net return for

the year then ended;

• have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of

the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on

Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under

those standards are further described in the Auditor’s Responsibilities

for the audit of the financial statements section of our report. We are

independent of the Company in accordance with the ethical

requirements that are relevant to our audit of the financial statements

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

interest entities, and we have fulfilled our other ethical responsibilities

in accordance with these requirements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

Our approach to the audit

Our audit was scoped by obtaining an understanding of the Company’s

environment, including its 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. All work was carried out by the audit team. We

conducted our audit using information maintained and provided

by James Sharp & Co LLP (the "Custodian”) and GW & Co Limited

(the “Company Secretary”), to whom the Company has delegated

the provisions of services.

We tailored the scope of our audit to reflect our risk assessment,

taking into account such factors as the types of investments within

the Company, the involvement of the Company Secretary, the

accounting processes and controls, and the industry in which the

Company operates. The scope of our audit was influenced by our

application of materiality. We set certain quantitative thresholds

for materiality. These together with qualitative considerations,

helped us to determine the scope of our audit and the nature,

timing and extent of our audit procedures on the individual

financial statement line items and disclosures and in the evaluation

of the effect of misstatements, both individually and in aggregate

on the financial statements as a whole.

Key audit matters

Key audit matters are those matters that, in our professional

judgement, were of most significance in our audit of the financial

statements of the current period and include the most significant

assessed risks of material misstatement (whether or not due to

fraud) we identified, including those which had the greatest effect

on: the overall audit strategy, the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the

financial statements, and in forming our opinion thereon, and we

do not provide a separate opinion on these matters. This is not a

complete list of all risks identified during our audit.

We have determined the matters described below to be the key

audit matters to be communicated in our audit report.

Key Audit Matters

How our scope addressed this matter

Carrying value of investments and recognition of

unrealised gains and losses, ownership of investments.

(note 8)

There is a risk that unrealised gains and losses in the year

have been incorrectly recorded. There is also a risk that the

carrying value of the investments is incorrect and an

additional risk that the number of shares held in those

investments is misstated.

The investment portfolio at the year-end had a carrying

value of £4,374,302 (2022: £4,180,985), made up of quoted

investments.

Our audit work included, but was not restricted to:

• Obtaining a list of investments held at fair value through profit and loss

from the Company and reconciling it to the general ledger and the

financial statements.

• Reviewing the Company’s accounting policy and disclosures in the

financial statements for investments held at fair value through profit

and loss and ensuring compliance with the applicable accounting

standards and regulatory requirements.

• Inspecting all the contracts and agreements related to the acquisition

and disposal of investments and agreeing the dates, prices, and parties

involved, and the relevant cash movements.

• Obtaining confirmations from external parties, such as the custodian,

regarding the existence and ownership of the investments as at the

reporting date.

• Testing the fair value of the year-end investments by reference to third-

party market price information.

28 | Athelney Trust plc | Annual Report 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

ATHELNEY TRUST PLC

Continued

• Testing the accuracy and completeness of the recognition and

measurement of the gains and losses on fair value movements of the

investments in profit or loss.

• Confirming the appropriateness of the classification and presentation

of the fair value gains and losses in the financial statements.

Key observations:

Based on the procedures performed, we did not identify any material

misstatements in the valuation of the Company’s investment portfolio as at the

reporting date and we concluded that adequate disclosures have been included

in the financial statements.

Non-compliance with laws and regulations

As the Company is both listed on the London Stock

Exchange and holds Investment Trust status under the S446

Companies Act 2010 exemption for such companies, there

are rules and regulations that the Company must adhere to.

A potential breach of the listing rules and Investment Trust

status rules may lead to the Company losing its Trust status

and its associated tax benefits.

Our audit work included, but was not restricted to:

• Reviewing the design and implementation of controls around the

ongoing internal assessment and monitoring of Investment Trust Status

compliance.

• Obtaining an understanding of the processes adopted and obtaining

evidence of the work completed on the compliance of key Investment

Trust rules and management’s review of this on a regular basis.

• Testing the conditions for maintaining approval as an investment Trust

as set out by HMRC. We critically assessed each of the conditions for

maintaining approval to assess whether it has been met as at the year-

end.

Key observations:

Based on our review of the documentation maintained, we have not identified

any non-compliance with the listing and Investment Trust rules during the period

and at the year-end which would lead to approval being removed and we

concluded that adequate discl

osures have been included in the financial

statements.

Our application of materiality

The scope and focus of our audit were influenced by our assessment

and application of materiality. We define materiality as the magnitude

of misstatement that could reasonably be expected to influence the

readers and the economic decisions of the users of the financial

statements. We use materiality to determine the scope of our audit

and the nature, timing and extent of our audit procedures and to

evaluate the effect of misstatements, both individually and on the

financial statements as a whole. We apply the concept of materiality

both in planning and performing our audit, and in evaluating the effect

of misstatements.

Based on our professional judgement we determined materiality for

the 2023 financial statements as a whole and performance materiality

as follows:

Financial statements

Materiality

£45,524

Basis for determining materiality

1% of Gross Assets

Rationale for the benchmark applied.

Athelney Trust plc is a UK-based investment company that focuses on providing

long term growth in dividends and capital, and consequently gross assets has

been used as the benchmark on which to calculate materiality. We have chosen

gross assets as the Company’s investment portfolio, which we considered to be

the key driver of the Company’s total return performance, forms a significant part

of the gross asset value calculation. Consequently, we believe that gross assets is

the benchmark on which the users of the financial statements are likely to focus.

We have chosen this benchmark, based on the wider audit industry using 1%- 2%

as a common threshold for gross assets of this nature. Using the lower end of the

threshold reflects the fact that we are auditing Athelney Trust PLC for the first

time in FY2023.

Performance materiality

£22,762

Basis for determining performance materiality

50% of overall materiality

29 | Athelney Trust plc | Annual Report 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

ATHELNEY TRUST PLC

Continued

Rationale for the benchmark applied

We considered a number of factors:

• We are auditing Athelney Trust PLC for the first time in FY2023.

• Athelney Trust PLC is a public interest entity with a premium listing on

the main market of the London Stock Exchange.

• Performance materiality is set at 50% of materiality in line with the

firm's guidance on materiality for listed company audits.

The audit team has set specific levels of overall materiality for Directors’

remuneration at £5,000 and performance materiality to be 50% of this

figure, at £2,500. This amount was determined after considering the

level of each individual director’s remuneration.

We agreed with the Audit Committee that we would report to them all

individual audit differences in excess of £2,276. We also agreed to

report differences below this threshold that, in our view, warranted

reporting on qualitative grounds.

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 the following

procedures:

• We have critically assessed the Company's cash flow

forecasts, which are prepared based on current financial

performance expectations (including sensitivity analysis) and

assessed the Company’s ability to meet its liabilities as they

fall due, including but not limited to, other external factors

that in our opinion might affect the going concern status of

the Company.

• We have evaluated the key assumptions in the forecast, which

are consistent with our knowledge of the business and

considered whether these are supported by the evidence

provided.

• We assessed management’s ability to prepare accurate

forecasts by comparing the 2023 cash flow forecasts available,

against the actual results of the year ended 31 December

2023.

• We examined the disclosures in the financial statements

relating to the going concern basis of preparation and the

explanation of the directors’ assessment in light of the

evidence obtained.

• We examined and critically assessed the directors’

assessment of liquidity of the invested shares at the current

prevailing market price.

• We also critically assessed the directors’ viability statement by

reviewing the 3-year forecasts and analysing the logic and

assumptions used in the forecasts.

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.

Other information

The other information comprises the information included in the

annual report, other than the financial statements and our

auditor’s report thereon. The directors are responsible for the

other information within the annual report. 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

there is a material misstatement in the financial statements. If,

based on the work we have performed, we conclude that there is

a material misstatement of this other information, we are required

to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies

Act 2006

In our opinion, the part of the Directors’ Remuneration Report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

In our opinion, based on the work undertaken in the course of the

audit:

• the information given in the Strategic Report and the

Report of the Directors for the financial year for which

the financial statements are prepared is consistent with

the financial statements; and

• the Strategic Report and the Report of the Directors have

been prepared in accordance with applicable legal

requirements.

30 | Athelney Trust plc | Annual Report 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

ATHELNEY TRUST PLC

Continued

Matters on which we are required to report by exception.

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 Report of the

Directors.

We have nothing to report in respect of the following matters where 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.

Corporate Governance statement

We have reviewed 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 by the

Listing Rules.

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 and our

knowledge obtained during the audit:

• Directors' statement with regards the appropriateness of

adopting the going concern basis of accounting and any

material uncertainties identified set out on page 21;

• 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 21;

• Director’s statement on whether it has a reasonable

expectation that the Company will be able to continue in

operation and meets its liabilities set out on page 21;

• Directors' statement on fair, balanced and understandable as

set out on page 23;

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

assessment of the emerging and principal risks set out on

pages 14-15;

• Section of the annual report that describes the review of

effectiveness of risk management and internal control

systems set out on page 19 and;

• Section describing the work of the audit committee set out on

pages 17-18.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set

out on page 23, 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 aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial

statements.

A further description of our responsibilities is available on the

FRC’s website at: frc.org.uk.

This description forms part of our auditor’s report.

Explanation as to what extent the audit was considered

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.

The objectives of our audit in respect of fraud, are to identify and

assess the risks of material misstatement of the financial

statements due to fraud; to obtain sufficient appropriate audit

evidence regarding the assessed risks of material misstatement

due to fraud, through designing and implementing appropriate

responses to those assessed risks; and to respond appropriately to

instances of fraud or suspected fraud identified during the audit.

However, the primary responsibility for the prevention and

detection of fraud rests with both management and those charged

with governance of the Company.

Our approach was as follows:

• We obtained an understanding of the legal and

regulatory requirements applicable to the Company and

considered that the most significant are the Companies

Act 2006, FRS 102, the AIC Statement of Recommended

Practice, the Listing Rules, the Disclosure and

Transparency Rules, compliance with HMRC conditions

for Investment Trust Status and UK taxation legislation.

• We obtained an understanding of how the Company

complies with these requirements by discussions with

management and those charged with governance.

31 | Athelney Trust plc | Annual Report 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

ATHELNEY TRUST PLC

Continued

• We assessed the risk of material misstatement of the financial

statements, including the risk of material misstatement due

to fraud and how it might occur, by holding discussions with

management and those charged with governance.

• We inquired of management and those charged with

governance as to any known instances of non-compliance or

suspected non-compliance with laws and regulations.

• Based on this understanding, we designed specific

appropriate audit procedures to identify instances of non-

compliance with laws and regulations. This included making

enquiries of management and those charged with governance

and obtaining additional corroborative evidence as required.

There are inherent limitations in the audit procedures described above.

We are less likely to become aware of instances of non-compliance with

laws and regulations that are not closely related to events and

transactions reflected in the financial statements. Also, 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 or intentional

misrepresentations, or through collusion.

Other matters which we are required to address.

We were appointed by the Directors on 16 October 2023 to audit the

financial statements for the period ending 31 December 2023. This is

the first year of our appointment.

The non-audit services prohibited by the FRC’s Ethical Standard were not

provided to the Company and we remain independent of the Company

in conducting our audit.

Our audit opinion is consistent with the additional report to the

audit committee.

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 for no purpose other

than to draw to the attention of the company’s members those

matters which we are required to include in an auditor’s report

addressed to them. To the fullest extent permitted by law, we do

not accept or assume responsibility to any party other than the

company and company’s members as a body, for our work, for this

report, or for the opinions we have formed.

12 February 2024

Mital Shah (Senior Statutory Auditor)

for and on behalf of Moore Kingston Smith LLP

Chartered Accountants

Statutory Auditor

Floor

9 Appold Street

London

EC2A 2AP

32 | Athelney Trust plc | Annual Report 2023

Income Statement

For the Year Ended 31 December 2023

2023 2022

Note

Revenue

Capital

Total

Revenue

Capital

Total

Losses on

investments held at

fair value

(57,725)

(1,787,296)

Income from

investments

219,366

183,273

Investment

management

expenses

(3,419)

(31,019)

(34,438)

(4,008)

(36,327)

(40,335)

Other expenses

(48,254)

(91,604)

(139,858)

(30,734)

(78,720)

(109,454)

Net return on

ordinary activities

before taxation

167,693

(180,348)

(12,655)

148,531

(1,902,343)

(1,753,812)

Taxation

(623)

Net return (negative

return) on ordinary

activities after

taxation

167,070

(180,348)

(13,278)

148,531

(1,902,343)

(1,753,812)

Net return per

ordinary share

7.7p

(8.3p)

(0.6p)

6.9p

(88.2p)

(81.3p)

Dividend per

ordinary share paid

during the year

9.7p

9.6p

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the year.

The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with

applicable Financial Reporting Standards (“FRS”). The supplementary revenue return and capital return columns are prepared in

accordance with the Statement of Recommended Practice (“AIC SORP”) issued in July 2022 by the Association of Investment

Companies.

The notes on pages 36 to 40 form part of these financial statements.

33 | Athelney Trust plc | Annual Report 2023

Statement of Financial Position

As at 31 December 2023

Company Number: 02933559

Note

2023

2022

Fixed assets

Investments held at fair value through profit and

loss

4,374,302

4,180,985

Current assets

Debtors

137,709

543,301

Cash at bank and in hand

40,347

27,361

178,056

570,662

Creditors: amounts falling due within one year

(40,388)

(17,085)

Net current assets

137,668

553,577

Total assets less current liabilities

4,511,970

4,734,562

Net assets

4,511,970

4,734,562

Capital and reserves

Called up share capital

539,470

Share premium account

881,087

Other reserves (non distributable)

Capital reserve - realised

2,467,624

2,539,394

Capital reserve - unrealised

453,206

561,784

Revenue reserve (distributable)

170,583

212,827

Shareholders' funds - all equity

4,511,970

4,734,562

Net Asset Value per share

209.1p

219.4p

These financial statements were approved and authorised for issue by the Board of Directors on 12 February 2024 and signed on their

behalf by

Dr Manny Pohl AM

Managing Director

The notes on pages 36 to 40 form part of these financial statements.

34 | Athelney Trust plc | Annual Report 2023

Statement of Changes in Equity

For the Year Ended 31 December 2023

Called-up

Capital

Total

reserve

Revenue

Shareholders’

Capital

Premium

realised

unrealised

reserve

Funds

Balance brought forward at

1 January 2022

539,470

881,087

2,271,737

2,731,784

271,452

6,695,530

Net profits on realisation

of investments

382,704

Decrease in unrealised

Appreciation

(2,170,000)

Expenses allocated to

Capital

(115,047)

Profit for the year

148,531

Dividend paid in year

(207,156)

Shareholders’ Funds at 31

December 2022

539,470

881,087

2,539,394

561,784

212,827

4,734,562

Balance brought forward at

1 January 2023

539,470

881,087

2,539,394

561,784

212,827

4,734,562

Net profits on realisation

of investments

50,853

Decrease in unrealised

Appreciation

(108,578)

Expenses allocated to

Capital

(122,623)

Profit for the year

167,070

Dividend paid in year

(209,314)

Shareholders’ Funds at 31

December 2023

539,470

881,087

2,467,624

453,206

170,583

4,511,970

The notes on pages 36 to 40 form part of these financial statements.

35 | Athelney Trust plc | Annual Report 2023

Statement of Cash Flows

For the Year Ended 31 December 2023

2023

2022

Cash flows used in operating activities

Net revenue return

167,070

148,531

Adjustment for:

Expenses charged to capital

(122,623)

(115,047)

Increase/(decrease) in creditors

23,303

(44)

Decrease/(increase) in debtors

405,592

(298,138)

Cash received/(used) in operations

473,342

(264,698)

Cash flows from investing activities

Purchase of investments

(906,775)

(1,003,583)

Proceeds from sales of investments

655,733

1,472,122

Net cash (used)/received from investing activities

(251,042)

468,539

Equity dividends paid

(209,314)

(207,156)

Net increase/(decrease) in cash

12,986

(3,315)

Cash at the beginning of the year

27,361

30,676

Cash at the end of the year

40,347

27,361

As the company does not have any loans, overdrafts or hire purchase arrangements, net debt is equal to cash and therefore no

reconciliation of net debt has been disclosed.

The notes on pages 36 to 40 form part of these financial statements.

36 | Athelney Trust plc | Annual Report 2023

Notes to the Financial Statements

For the Year Ended 31 December 2023

1. Accounting Policies

1.1 Statement of Compliance and Basis of Preparation of Financial

Statements

The financial statements are prepared in accordance with applicable

United Kingdom accounting standards, including Financial Reporting

Standard 102 (“FRS 102”), the Companies Act 2006 and with the AIC

Statement of Recommended Practice (“SORP”) issued in July 2022,

regarding the Financial Statements of Investment Trust Companies

and Venture Capital Trusts. All the Company’s activities are

continuing.

The presentation currency of the financial statements is pounds

sterling, being the functional currency of the primary economic

environment in which the company operates. Monetary amounts in

these financial statements are rounded to the nearest pound.

1.2 Going concern

The Directors have made an assessment of the Company’s ability to

continue as a going concern. This has included consideration of

portfolio liquidity, the financial position in respect of its cashflows,

the working arrangements of key service providers, the continued

eligibility to be approved as an investment trust company, the

impact of the current economic environment and the current

conflicts in the Ukraine and the Middle East. In addition the Directors

are not aware of any material uncertainties that may cast significant

doubt upon the Company’s ability to continue as a going concern.

The Directors are satisfied that the Company has sufficient resources

to continue in business for the foreseeable future being a period of

at least 12 months from the date these financial statements were

approved. Therefore, the financial statements have been prepared

on the going concern basis.

1.3 Income

Income from investments including taxes deducted at source is

recognised when the right to the return is established (normally the

ex-dividend date). UK dividend income is reported net of tax credits

in accordance with FRS 102 section 23 “Revenue”. Interest is dealt

with on an accruals basis.

1.4 Investment Management Expenses

All three Directors are involved in investment management, 10% of

their salaries or fees have been charged to revenue and the other

90% to capital. All other investment management expenses have

been charged to capital. The Board propose continuing this basis for

future years.

1.5 Other Expenses

Expenses (including VAT) and interest payable are dealt with on an

accruals basis and charged through the Revenue and Capital

Accounts in an allocation that the Board consider to be a fair

distribution of the costs incurred.

1.6 Investments

Listed investments comprise those listed on the Official List of the

London Stock Exchange. Unlisted investments are traded on AIM or

AQSE. Profits or losses on sales of investments are taken to realised

capital reserve. Any unrealised appreciation or depreciation is taken

to unrealised capital reserve.

Investments have been classified as “fair value through profit and

loss” upon initial recognition.

Subsequent to initial recognition, investments are measured at fair

value with changes in fair value recognised in the Income Statement.

Securities of companies quoted on a recognised stock exchange are

valued by reference to their quoted bid prices on 31 December.

1.7 Taxation

The tax effect of different items of income and expenses is allocated

between capital and revenue on the same basis as the particular

item to which it relates, using the Company’s effective rate of tax for

the year.

1.8 Judgements and estimates

The Directors confirm that no judgements or significant estimates

have been made in the process of applying the Company’s

accounting policies.

1.9 Deferred Taxation

Deferred tax is recognised in respect of all timing differences that

have originated but not reversed by the balance sheet date.

Deferred tax liabilities are recognised for all taxable timing

differences but deferred tax assets are only recognised if it is

considered more likely than not that there will be suitable profits

from which the future reversal of the underlying timing differences

can be deducted. Deferred tax assets and liabilities are calculated at

the tax rates expected to be effective at the time the timing

differences are expected to reverse. Deferred tax assets and

liabilities are not discounted.

1.10 Capital Reserves

Capital Reserve – Realised

Gains and losses on realisation of fixed asset investments are dealt

with in this reserve. As per the company articles the reserve is not

readily distributable.

Capital Reserve – Unrealised

Increases and decreases in the valuations of fixed asset investments

are dealt with in this reserve. Unrealised capital reserves cannot be

distributed by way of dividends or similar.

1.11 Dividends

In accordance with FRS 102 Section 32“Events after the end of the

Reporting Period”, dividends are included in the financial statements

in the year in which they go ex-div.

1.12 Share Issue Expenses

The costs associated with issuing shares are written off against any

premium arising on the issue of Share Capital.

1.13 Financial Instruments

Short term debtors and creditors are held at cost.

37 | Athelney Trust plc | Annual Report 2023

Notes to the Financial Statements

For the Year Ended 31 December 2023 (continued)

2. Income

Income from investments

2023

2022

UK dividend income

140,588

108,179

Foreign dividend income

2,160

3,760

UK Property REITs

73,339

71,308

Bank interest

3,279

Total income

219,366

183,273

UK dividend income

2023

2022

UK Main Market listed investments

105,608

79,926

UK AIM-traded shares

34,980

28,253

140,588

108,179

3. Return on Ordinary Activities before Taxation

The following amounts (inclusive of VAT) are included within

investment management and other expenses:

2023

2022

Directors’ remuneration:

Services as a director

21,000

Otherwise in connection with

management

34,193

40,077

Auditor’s remuneration:

Audit Services - Statutory audit

46,140

11,984

Miscellaneous expenses:

Management services

32,472

PR and communications

2,225

6,687

Stock exchange subscription

12,000

10,500

Sundry investment management and

other expenses

24,826

23,276

Legal fees

1,440

3,793

174,296

149,789

4. Employees and Directors’ Remuneration

2023

2022

Costs in respect of Directors:

Non-executive Directors’ fees

21,000

Wages and salaries

34,193

40,077

55,193

61,077

Average number of employees:

Chair

Investment

Administration

5. Taxation

(i) On the basis of these financial statements no provision has been

made for corporation tax (2022: Nil).

(ii) Factors affecting the tax charge for the year.

The tax charge for the period is lower than (2022: higher than) the

average small company rate of corporation tax in the UK of 19 per

cent. The differences are explained below:

2023

2022

Total return on ordinary activities

before tax

(12,655)

(1,753,812)

Total return on ordinary activities

multiplied by the average small

company rate of corporation tax

19% (2020: 19%)

(2,404)

(333,223)

Effects of:

UK dividend income not taxable

(26,686)

(20,739)

Revaluation of shares not taxable

20,630

412,299

Capital gains not taxable

(9,662)

(72,714)

Unrelieved management expenses

18,745

14,377

Current tax charge for the year

623

The Company has unrelieved excess revenue management expenses

of £780,914 at 31 December 2023 (2022: £671,156) and £102,597

(2022: £102,597) of capital losses for Corporation Tax purposes and

which are available to be carried forward to future years. It is unlikely

that the Company will generate sufficient taxable profits in the future

to utilise these expenses and therefore no deferred tax asset has

been recognised.

Historically the Company has received approval from HM Revenue and

Customs under Section 1158 of the Corporation Tax Act 2010, as a

result of this approval the Company was not liable to Corporation Tax

on any realised investment gains for 2023 or the preceding years. The

Directors intend to continue to meet the conditions required to obtain

approval and therefore no deferred tax has been provided on any

capital gains or losses arising on the revaluation or disposal of

investments.

The Directors are fully aware that the Company is not a close

company and of the rules associated with this status. The Company

holds its Investment Trust status under the S446 Companies Act 2010

exemption because more than 35% of the company’s shares are held

by the public and have been actively traded in the past 12 months on

the London Stock Exchange and this is regularly reviewed by the

Directors.

38 | Athelney Trust plc | Annual Report 2023

Notes to the Financial Statements

For the Year Ended 31 December 2023 (continued)

6. Return per Ordinary Share

Returns per share are based on the weighted average number of shares

in issue during the year.

2023

Revenue

Capital

Total

Attributable return on

ordinary activities after

taxation

167,070

(180,348)

(13,278)

Weighted average

number of shares

2,157,881

Return per ordinary share

7.7p

(8.3p)

(0.6p)

2022

Revenue

Capital

Total

Attributable return on

ordinary activities

after taxation

148,531

(1,902,343)

(1,753,812)

Weighted average

number of shares

2,157,881

Return per ordinary

6.9p

(88.2p)

(81.3p)

7. Dividend

2023

2022

Final dividend in respect of 2022 of

7.5p (2022: a final dividend of 7.5p

was paid in respect of 2021) per

161,841

Interim dividend in respect of 2023

of 2.2p (2022: an interim dividend

of 2.1p was paid in respect of 2022)

per share

47,473

45,315

209,314

207,156

Set out below is the total dividend payable in respect of the financial

year, which is the basis on which the requirements of Section 1158 of

the Corporation Tax Act 2010 are considered.

It is recommended that a final dividend of 7.6p (2022: 7.5p) per

ordinary share be paid out of revenue profits amounting to a total of

£167,070. An interim dividend of 2.2p per ordinary share was paid on

22 September 2023 amounting to £47,473 making the total dividend

payable in the year £211,472.

For the year 2022, a final dividend of 7.6p was paid on 6 April 2023

amounting to a total of £163,999. An interim dividend of 2.1p per

ordinary share was paid on 23 September 2022 amounting to £45,315

making the total dividend paid in the year £207,156.

Summary of dividends paid for the last 10 financial years

Ex-div date

Dividend

Type

Amount

Financial

Year

08/03/2024

Proposed

7.6p

2023

07/09/2023

6/04/2023

Interim

Final

2.2p

7.5p

2023

2022

08/09/2022

Interim

2.1p

2022

10/3/2022

Final

7.5p

2021

09/9/2021

Interim

2.0p

2021

11/3/2021

Final

7.7p

2020

10/9/2020

Interim

1.7p

2020

19/3/2020

Final

9.3p

2019

20/3/2019

Final

9.1p

2018

01/3/2018

Final

8.9p

2017

09/3/2017

Final

8.6p

2016

17/3/2016

Final

7.9p

2015

19/3/2015

Final

6.7p

2014

19/3/2014

Final

5.5p

2013

2023

2022

Revenue available for

distribution

167,070

148,531

Interim dividend paid

(47,473)

(45,315)

Final dividend in respect of

financial year end

(163,999)

(161,841)

Distribution of prior year

reserves

(44,402)

(58,625)

8. Investments

Movements in year

2023

2022

Valuation at beginning of

year

4,180,985

6,436,820

Purchases at cost

906,775

1,003,583

Sales - proceeds

(655,733)

(1,472,122)

- realised gains on sales

50,853

382,704

Decrease in unrealised

appreciation

(108,578)

(2,170,000)

Valuation at end of year

4,374,302

4,180,985

Book cost at end of year

3,921,097

3,619,201

Unrealised appreciation at

the end of the year

453,205

561,784

4,374,302

4,180,985

UK Main Market listed

investments

2,886,362

3,070,365

UK AIM-traded shares

1,487,940

1,110,620

4,374,302

4,180,985

39 | Athelney Trust plc | Annual Report 2023

Notes to the Financial Statements

For the Year Ended 31 December 2023 (continued)

Gains on investments

2023

2022

Realised gains on sales

50,853

382,704

Decrease in unrealised appreciation

(108,578)

(2,170,000)

(57,725)

(1,787,296)

The purchase costs and sales proceeds above include transaction costs

of £5,429 (2022: £3,515) and £2,795 (2022: £3,302) respectively.

9. Debtors

2023

2022

Investment transaction debtors

104,128

513,597

Other debtors

33,581

29,704

137,709

543,301

10. Creditors: amounts falling due within one

year

2023

2022

Social security and other taxes

700

Other creditors

2,880

2,850

Accruals and deferred income

36,808

13,535

40,388

17,085

11. Called Up Share Capital

2023

2022

Authorised

10,000,000 Ordinary Shares of 25p

2,500,000

Allotted, called up and fully paid

2,157,881 Ordinary Shares of 25p

539,470

12. Financial Instruments

The Company’s financial instruments comprise equity investments, cash

balances and debtors and creditors that arise directly from its

operations, for example, in respect of sales and purchases awaiting

settlement.

The major risks associated with the Company are market, credit and

liquidity risk. The Company has established a framework for managing

these risks. The Directors have guidelines for the management of

investments and financial instruments.

Market Risk

Market price risk arises mainly from uncertainty about future prices of

financial investments used in the Company’s business. It represents the

potential loss the Company might suffer through holding market

positions by way of price movements other than movements in

exchange rates and interest rates.

The Company’s investment portfolio is exposed to market

price fluctuations which are monitored by the Fund Manager

who gives timely reports of relevant information to the

Directors.

Adherence to the investment objectives and the internal

controls on investments set by the Company mitigates the risk

of excessive exposure to any one particular type of security or

issuer.

The Company’s exposure to other changes in market prices at

31 December on its investments is as follows:

A 20% decrease in the market value of investments at 31

December 2023 would have decreased net assets attributable

shareholders by 47 pence per share (2022: 39 pence per

share). An increase of the same percentage would have an

equal but opposite effect on net assets attributable to

shareholders.

Market risk also arises from changes in interest rates and

exchange risk. All of the Company’s assets are in sterling and

accordingly the Company has limited currency exposure. The

majority of the Company’s financial assets are non-interest

bearing, as a result, the Company’s financial assets are not

subject to significant risk due to fluctuations in the prevailing

levels of market interest rates.

The carrying amounts of financial assets best represent the

maximum credit risk exposure at the balance sheet date.

Bankruptcy or insolvency of the custodian may cause the

Company’s rights with respect to securities held with the

custodian to be delayed.

Liquidity Risk

Liquidity Risk is the risk that the Company may have difficulty

in meeting obligations associated with financial liabilities. The

Company is able to reposition its investment portfolio when

required so as to accommodate liquidity needs. However, it

may be difficult to realise its investment portfolio in adverse

market conditions.

Maturity Analysis of Financial Liabilities

The Company’s financial liabilities consist of creditors as

disclosed in note 10. All items are due within one year.

Capital management policies and procedures

The Company’s capital management objectives are:

• to ensure the Company’s ability to continue as a going

concern;

• to provide an adequate return to shareholders;

• to support the Company’s stability and growth;

• to provide capital for the purpose of further

investments.

40 | Athelney Trust plc | Annual Report 2023

Notes to the Financial Statements

For the Year Ended 31 December 2023 (continued)

The Company actively and regularly reviews and manages its capital

structure to ensure an optimal capital structure, taking into

consideration the future capital requirements of the Company and

capital efficiency, projected operating cash flows and projected

strategic investment opportunities. The management regards capital as

total equity and reserves, for capital management purposes.

Fair values of financial assets and financial liabilities

Fixed asset investments (see note 8) are valued at market bid

price

where available which equates to their fair values. The fair values of all

other assets and liabilities are represented by their carrying values in

the balance sheet.

2023

2022

Fair value through profit or loss

investments

4,374,302

4,180,985

Financial instruments by category

The financial instruments of the Company fall into the following