REG-British & American Investment Trust Plc: Annual Financial Report
30/04/2024 12:45
British & American Investment Trust PLC
Annual Financial Report for the year ended 31 December 2023
Registered number: 00433137
Directors
Registered office
David G Seligman (Chairman)
Wessex House
Jonathan C Woolf (Managing Director)
1 Chesham Street
Alex Tamlyn (Non-executive)
Telephone: 020 7201 3100
Julia Le Blan (Non-executive and Chair of the Audit Committee)
Registered in England
No.00433137
30 April 2024
This is the Annual Financial Report as required to be published under DTR 4 of
the UKLA Listing Rules.
Financial Highlights
For the year ended 31 December 2023
2023 2022
Revenue Capital Total Revenue Capital Total
return return return return
£000 £000 £000 £000 £000 £000
Profit/(loss) before tax – realised 797 (585) 212 658 (277) 381
(Loss)/profit before tax – unrealised – (2,196) (2,196) – 579 579
__________ __________ __________ __________ __________ __________
(Loss)/profit before tax – total 797 (2,781) (1,984) 658 302 960
__________ __________ __________ __________ __________ __________
Earnings per £1 ordinary share – basic and diluted* 1.86p (11.12)p (9.26)p 1.30p 1.21p 2.51p
__________ __________ __________ __________ __________ __________
Net assets 4,512 7,091
__________ __________
Net assets per ordinary share
– deducting preference shares 13p 20p
at fully diluted net asset value**
__________ __________
– diluted 13p 20p
__________ __________
Diluted net asset value per ordinary share at 26 April 2024 26p
__________
Dividends declared or proposed for the period:
per ordinary share
– interim paid 1.75p 1.75p
– final proposed 0.0p 0.0p
per preference share 1.75p 1.75p
*Calculated in accordance with International Accounting Standard 33 ‘Earnings per Share’. Conversion of the preference shares will have an antidilutive effect. Upon conversion of the preference shares to ordinary shares the anti-diluted earnings per share would be 2.33p (2022 – 1.93p) (revenue return) (Note 3). **Basic net assets are calculated using a value of fully diluted net asset value for the preference shares.
Chairman’s Statement
I report our results for the year ended 31 December 2023.
Revenue
The return on the revenue account before tax amounted to £0.8 million (2022:
£0.7 million), a similar level to that of the previous year due. The bulk of
this revenue was accounted for by dividends received from subsidiary companies
arising from gains realised on our principal US investments. In addition,
further one-off income of £236,000 was received from the proceeds of a class
action suit settlement in the USA relating to the take-over in 2018 of one of
our US investments, Asterias Biotherapeutics Inc.
Gross revenues totalled £1.3 million (2022: £1.2 million). In addition, film
income of £74,000 (2022: £107,000) and property unit trust income of £nil
(2022: £1,000) was received in our subsidiary companies. This reduction in
property income reflected the sale of one of our investments during the year
2021. In accordance with IFRS10, these income streams are not included within
the revenue figures noted above because consolidated financial statements are
not prepared.
The total return before tax, comprising revenue and capital return, amounted
to a loss of £2.0 million (2022: £1.0 million profit), representing net
revenue of £0.8 million, a realised loss of £0.6 million and an unrealised
loss of £2.2 million. The revenue return per ordinary share was 1.9p (2022:
1.3p) on an undiluted basis.
Net Assets and Performance
Net assets at the year end were £4.5 million (2022: £7.1 million), a
decrease of 36.4 percent after payment of £0.6 million in dividends to
shareholders during the year. This compares to an increase in the FTSE 100
index of 3.8 percent and to an increase in the UK All Share index of 3.8
percent over the period. On a total return basis, after adding back dividends
paid during the year, our net assets decreased by 27.7 percent compared to
increases of 7.9 percent and 7.9 percent in the FTSE 100 and UK All Share
indices, respectively.
This substantial underperformance for the year as a whole, despite the 20
percent out-performance recorded at the half-year, was due almost entirely to
the significant decline of 34 percent in the value of our largest investment,
Geron Corporation, in the last quarter of 2023. Thankfully this decline was
reversed in the first quarter of 2024 with a rise of 36 percent to a level
slightly higher than that recorded at the half year. As noted below, this has
allowed us to register significant recovery in value of over £4 million so
far this year, resulting in outperformance of approximately 95 percent since
the beginning of 2023. The reasons for this volatility in the share price of
Geron Corporation are explained in more detail in the Managing Director's
report below.
Equity markets in the UK and USA performed with a determined firmness in 2023,
maintaining their close to all time high levels throughout the first three
quarters. Then in the fourth quarter, equity prices broke out strongly, by
over 20 percent in the USA, as inflation levels started to decline from their
2022 highs and the prospect of reductions in interest rates began to be
foreseen, with the first in a series of rate reductions expected from the
Federal Reserve in the USA in March 2023.
Further strong impetus was given to markets at this time from significantly
improved results from technology companies in the USA with particular exposure
to activities connected with Artificial Intelligence. These movements had the
effect of lifting markets strongly as a whole, although equity price rises
have since become more broadly-based as other leading companies have been able
to show growing levels of profitability for 2023, recovering from the
depredations of the Covid pandemic in 2021 and 2022.
Market strength over the last year seems, however, to have ignored the many
and substantial challenges and uncertainties developed economies are facing
politically, strategically, militarily and socially around the world. These
include the continuing war in Ukraine, now into its third year; new
instability in the Middle East with renewed and intensified Israeli and
Palestinian conflict; a revanchist Russia threatening the post-WW2 settlement
in Europe, political gridlock in the US Congress impeding the effective
conduct of government business together with divisive and acrimonious
elections due there at the end of the year, as well as in many major European
countries including the UK; battles over the implementation of climate change
policies while weather records are continuously being broken and damage to
infrastructure, production and habitats is being experienced throughout the
world; and the dangerous distortion of truth and real news through social
media misinformation or AI- generated fakery to further malign political and
social programmes or criminal enterprises to the detriment of free and open
discourse. While markets seem to have so far ignored these important and
future-defining issues, definite reaction is now being seen politically and
socially, as societies have become increasingly polarised, populist
politicians have been gaining traction and long held social norms have begun
to be eroded.
Voters now show a high level of distrust in their politician's ability to
address their basic concerns - uncontrolled levels of immigration, lack of
economic growth, high rates of tax, stagnation in middle class incomes, lack
of investment and trust in government - precipitating movements towards
political extremes and a hollowing out of the liberal political middle.
It goes without saying that these unfortunate and regressive developments will
inevitably have a fundamental and destabilising effect on future economic
outcomes, democratic freedoms and continued social development in those
countries where governments fail to provide real leadership rather than
gesture politics and fail to respond to their citizens' basic needs and
expectations.
Dividend
In 2023, dividends of 1.75 pence per ordinary share and 1.75 pence per
preference share were paid as an interim payment during the year. This was the
same level of dividend for ordinary and preference shareholders as in the
previous year and represented a yield of approximately 10 percent on the
ordinary share price averaged over a period of 12 months.
The Board has become aware of an issue concerning technical compliance with
the Companies Act 2006 (“Act”) in relation to the payment of this interim
dividend on 21 December 2023. This issue arose because interim accounts, while
duly prepared and showing sufficient distributable profits to justify payment
of the interim dividend, had not been filed at Companies House prior to the
declaration of the dividend, as is required by the Act in the case of public
companies. It is intended that this technical issue, which has no impact on
the Company's financial position nor upon any other distributions made by the
Company, be ratified by a shareholder resolution at our forthcoming Annual
General Meeting in June 2024 and voted on by shareholders unconnected with any
director of the company. All necessary steps have been taken to ensure this
issue is not repeated in the future and we are grateful for shareholders'
understanding in this matter.
It is our intention to pay an interim dividend this year of no less amount
contingent on the profitable sales of investments during the year. The
position regarding these investments is set out in more detail in the Managing
Director’s report below.
Recent events and outlook
The extremely strong performance of investment markets over the last 6 months,
based essentially on the prospect of declining interest rates, makes a future
correction to what is now a 16 year rising market and a three year post-Covid
bull market, somewhat inevitable, particularly given the serious global
concerns noted above.
Our investment policy relies, as it has for some time, on the capture of value
from our major investments in US biotechnology. Our largest investment, Geron
Corporation, is now on the cusp of fulfilling its transformation from clinical
development to product sales with the imminently expected approval of its
oncology drug by the FDA.
The beginnings of this value enhancement were seen last month with a positive
vote from the FDA's Advisory Committee on the drug's safety and effectiveness,
following which Geron's share price rose by over 90 percent. Further
significant upward price movement is expected to continue with the official
approval from the FDA due to be delivered by mid-June.
As at 26 April 2024, our net assets had increased to £9.1 million, an
increase of 100.8 percent since the beginning of the calendar year. This is
equivalent to 25.9 pence per share (prior charges deducted at fully diluted
value) and 25.9 pence per share on a diluted basis. Over the same period the
FTSE 100 increased 5.3 percent and the All Share Index increased 4.5 percent.
David Seligman
30 April 2024
Managing Director's report
Following significant out-performance in the first half, our portfolio
underperformed by a large margin for the year as a whole, as noted in the
Chairman’s statement above. This was due to a combination of two factors:
a significant reversal in the share price of our largest investment, Geron
Corporation, of over 35 percent in the second half of the year and continued
strong growth in the US equity index of 10 percent and to a lesser extent in
the UK equity index of 3 percent over the same period.
I had reported in detail at the interim stage on the reasons for and
background to Geron’s strong upward price movement over the first six months
of 2023 and the expectation of further positive gains given the stage it had
reached in its clinical development programme prior to anticipated approval of
its oncology drug by the US Federal Drug Agency (“FDA”) in the summer of
this year. However, this was not to be the case and the opposite price
movement occurred for reasons which cannot be rationally explained given the
absence of any adverse news from Geron and a strong market during the
period.
It will be recalled that in last year’s interim report and indeed in many
previous reports, we have commented in detail on the lack of true price
discovery and inexplicable levels of volatility in Geron’s stock price over
many years. Unusual market-related activities, poor timing and execution of
secondary share issues and manipulative trading practices have been cited as
reasons for this and it would appear that some of such forces were again
active in the second half of 2023.
That being said, I am very pleased to report that the decline in Geron’s
share price at the end of 2023 has now been more than reversed this year to
date with a rise of 80 percent.
On 14th March of this year, Geron received a positive vote from the FDA’s
independent advisory committee of experts (ODAC – Oncology Drugs Advisory
Committee) on the safety and efficacy of its haematological drug Imetelstat -
to be marketed under the brand name “RyTelo”. ODAC’s findings are used
by the FDA to inform their own decision on approving new drugs which have
successfully passed through the full clinical trials process. Historically,
the FDA approves 97 percent of all new oncology drug applications which have
received a positive recommendation from ODAC and the FDA is now scheduled to
issue its formal decision by 16th June of this year, no more than 7 weeks
away. A positive decision will allow Geron to market RyTelo, for which it
has already built up a significant marketing team and operations, immediately
thereafter.
With this penultimate step to approval now successfully achieved, we believe
that the market has now finally started to attribute a somewhat more
transparent and reasonable market value to Geron at this pre-approval stage of
the process. This new level should only be built upon further as the
approval date approaches, the anticipated approval is granted and sales
commence.
As a result of this strong recovery in Geron’s share price, our portfolio
has outperformed the indices by 95 percent in 2024 to date exceeding the
outperformance of 20 percent registered at the half-year stage last year.
Investment climate outlook
The list of geopolitical, economic, financial and social concerns now facing
the world is long and growing: Serious security issues in Europe, the Middle
East and potentially the Far East with the emboldenment of autocratic regimes
in those areas; the weakness of democracies in leading Western nations as
internal division and consequential political gridlock prevail; stubbornly
high inflation; recession or economic stagnation in all but one of the G7
economies; record levels of government debt; the inability of international
institutions to address the many challenges now being seen to the post WW2
rules based order and climate change.
These multiple and widespread conditions, all with negative long-term impact
potential, are too numerous and complex to analyse in detail in a report such
as this.
However, markets have been largely ignoring these risks and continue to
maintain their all time high levels, albeit with some recently higher levels
of volatility. That this should be the case seems somewhat extraordinary,
particularly when the currently higher levels of interest rates are now
expected to remain at these higher levels for longer as inflation in the US
and European countries is also expected to remain higher for longer before
returning to target levels.
In the absence of a significant and unexpected turnaround for the better in
world affairs, it seems incontrovertible that these multiple risks must
inevitably at some point prove negative for investment sentiment and
performance going forward.
Consequently, we will be examining closely our hitherto policy of full
investment in equity investments and when appropriate to our portfolio
performance will be seeking to reduce exposure to equities, to be replaced by
a more traditional and diverse balance of investments alongside equities,
including cash, fixed interest, funds, commodities, real assets and where
appropriate non-financial investments, within the parameters of our stated
investment policy.
Jonathan Woolf
30 April 2024
Income statement
For the year ended 31 December 2023
2023 2022
Revenue Capital Total Revenue Capital Total
return return return return
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Investment income (note 2) 1,264 - 1,264 1,156 - 1,156
Holding (losses)/gains on investments at fair value through profit or loss - (2,196) (2,196) - 579 579
Losses on disposal of investments at fair value through profit or loss* - (175) (175) - (294) (294)
Foreign exchange (losses)/gains 36 (119) (83) (40) 277 237
Expenses (453) (255) (708) (424) (250) (674)
________ ________ ________ ________ ________ ________
(Loss)/profit before finance costs and tax 847 (2,745) (1,898) 692 312 1,004
Finance costs (50) (36) (86) (34) (10) (44)
________ ________ ________ ________ ________ ________
(Loss)/profit before tax 797 (2,781) (1,984) 658 302 960
Tax 17 - 17 16 - 16
________ ________ ________ ________ ________ ________
(Loss)/profit for the year 814 (2,781) (1,967) 674 302 976
________ ________ ________ ________ ________ ________
Earnings per share
Basic and diluted - ordinary shares** 1.86p (11.12)p (9.26)p 1.30p 1.21p 2.51p
________ ________ ________ ________ ________ ________
The company does not have any income or expense that is not included in the
(loss)/profit for the year. Accordingly, the ‘(Loss)/profit for the year’
is also the ‘Total Comprehensive Income for the year’ as defined in IAS 1
(revised) and no separate Statement of Comprehensive Income has been
presented.
The total column of this statement represents the Income Statement, prepared
in accordance with IFRS. The supplementary revenue return and capital return
columns are both prepared under guidance published by the Association of
Investment Companies. All items in the above statement derive from continuing
operations.
All profit and total comprehensive income is attributable to the equity
holders of the company.
*Losses on disposal of investments at fair value through profit or loss
include Gains on sales of £45,000 (2022 – £9,000 gains) and Losses on
provision for liabilities and charges of £220,000 (2022 – £303,000
losses).
**Calculated in accordance with International Accounting Standard 33
‘Earnings per Share’. Conversion of the preference shares will have an
antidilutive effect. Upon conversion of the preference shares to ordinary
shares the anti-diluted earnings per share would be 2.33p (2022 – 1.93p)
(revenue return).
Statement of changes in equity
For the year ended 31 December 2023
Share Capital Retained Total
capital reserve earnings
£ 000 £ 000 £ 000 £ 000
Balance at 31 December 2021 35,000 (28,230) (43) 6,727
Changes in equity for 2022
Profit for the period - 302 674 976
Ordinary dividend paid (note 4) - - (437) (437)
Preference dividend paid (note 4) - - (175) (175)
________ ________ ________ ________
Balance at 31 December 2022 35,000 (27,928) 19 7,091
Changes in equity for 2023
(Loss)/profit for the period - (2,781) 814 (1,967)
Ordinary dividend paid (note 4) - - (437) (437)
Preference dividend paid (note 4) - - (175) (175)
________ ________ ________ ________
Balance at 31 December 2023 35,000 (30,709) 221 4,512
________ ________ ________ ________
Registered number: 00433137
Balance Sheet
At 31 December 2023
2023 2022
£ 000 £ 000
Non-current assets
Investments - at fair value through profit or loss 4,895 5,600
Investment in subsidiaries - at fair value through profit or loss 6,665 7,712
__________ __________
11,560 13,312
Current assets
Receivables 362 442
Cash and cash equivalents 39 45
__________ __________
401 487
__________ __________
Total assets 11,961 13,799
__________ __________
Current liabilities
Trade and other payables 2,008 1,794
Bank credit facility 1,235 1,018
__________ __________
(3,243) (2,812)
__________ __________
Total assets less current liabilities 8,718 10,987
__________ __________
Non - current liabilities (4,206) (3,896)
__________ __________
Net assets 4,512 7,091
__________ __________
Equity attributable to equity holders
Ordinary share capital 25,000 25,000
Convertible preference share capital 10,000 10,000
Capital reserve (30,709) (27,928)
Retained revenue earnings 221 19
__________ __________
Total equity 4,512 7,091
__________ __________
Approved: 30 April 2024
Cash flow statement
For the year ended 31 December 2023
Year ended 2023 Year ended 2022
£ 000 £ 000
Cash flows from operating activities
(Loss)/profit before tax (1,984) 960
Adjustments for:
Losses/(gains) on investments 2,371 (285)
Proceeds on disposal of investments at fair value through profit and loss 136 548
Purchases of investments at fair value through profit and loss (536) (441)
Finance costs 73 44
__________ __________
Operating cash flows before movements in working capital 60 826
Decrease in receivables 97 109
Decrease in payables (127) (1,351)
__________ __________
Net cash from operating activities before interest 30 (416)
Interest paid (73) (21)
__________ __________
Net cash from operating activities (43) (437)
Cash flows from financing activities
Dividends paid on ordinary shares (180) -
Dividends paid on preference shares - -
__________ __________
Net cash used in financing activities (180) -
__________ __________
Net decrease in cash and cash equivalents (223) (437)
Cash and cash equivalents at beginning of year (973) (536)
__________ __________
Cash and cash equivalents at end of year (1,196) (973)
__________ __________
Purchases and sales of investments are considered to be operating activities
of the company, given its purpose, rather than investing activities. Cash and
cash equivalents at year end shows net movement on the bank facility.
1 Basis of preparation and going concern
The financial information set out above contains the financial information of
the company for the year ended 31 December 2023. The company has prepared its
financial statements in accordance with UK-adopted international accounting
standards and with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards. The financial statements have also
been prepared as far as applicable and relevant to the company in accordance
with the Statement of Recommended Practice: Financial Statements of Investment
Trust Companies and Venture Capital Trusts (SORP), reissued in July 2022 by
the Association of Investment Companies (AIC).
The financial statements have been prepared on a going concern basis adopting
the historical cost convention except for the measurement at fair value of
investments, derivative financial instruments and subsidiaries.
The information for the year ended 31 December 2023 is an extract from the
statutory accounts to that date. Statutory company accounts for 2022, which
were prepared in accordance with UK-adopted international accounting
standards, have been delivered to the registrar of companies and company
statutory accounts for 2023, prepared under IFRS as adopted by the UK, will be
delivered in due course.
The auditors have reported on the 31 December 2023 year end accounts and their
report was unqualified and did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying their
reports and did not contain statements under section 498(2) or (3) of the
Companies Act 2006.
The directors, having made enquiries, consider that the company has adequate
financial resources to enable it to continue in operational existence for the
foreseeable future. Accordingly, the directors believe that it is appropriate
to continue to adopt the going concern basis in preparing the company's
accounts.
2 Income
2023 2022
£ 000 £ 000
Income from investments
UK dividends 94 89
Dividend from subsidiary 867 1,001
_________ _________
961 1,090
Other income 303 66
_________ __________
Total income 1,264 1,156
_________ __________
Total income comprises:
Dividends 961 1,090
Other interest 64 66
Other income - settlement of US class action suit 239 -
_________ _________
1,264 1,156
_________ __________
Dividends from investments
Listed investments 94 89
Unlisted investments 867 1,001
_________ _________
961 1,090
_________ __________
During the year the company received a dividend of £867,000 (2022 -
£1,001,000) from a subsidiary which was generated from gains made on the
realisation of investments held by that company. As a result of the receipt of
this dividend a corresponding reduction was recognised in the value of the
investment in the subsidiary company.
During the year the company recognised £154,000 of a foreign exchange loss
(2022 – £317,000 gain) on the loan of $3,526,000 to a subsidiary. As a
result of this loss, the corresponding movement was recognised in the value of
the investment in the subsidiary company.
Under IFRS 10 the income analysis is for the parent company only rather than
that of the consolidated group. Thus, film revenues of £74,000 (2022 –
£107,000) received by the subsidiary British & American Films Limited and
property unit trust income of £nil (2022 – £1,000) received by the
subsidiary BritAm Investments Limited are shown separately in this
paragraph.
3 Earnings per ordinary share
The calculation of the basic (after deduction of preference dividend) and
diluted earnings per share is based on the following data:
2023 2022
Revenue Capital Total Revenue Capital Total
return return return return
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Earnings:
Basic and diluted 464 (2,781) (2,317) 324 302 626
Basic revenue, capital and total return per ordinary share is based on the net
revenue, capital and total return for the period after tax and after deduction
of dividends in respect of preference shares and on 25 million (2022: 25
million) ordinary shares in issue.
The diluted revenue, capital and total return is based on the net revenue,
capital and total return for the period after tax and on 35 million (2022: 35
million) ordinary and preference shares in issue.
*Calculated in accordance with International Accounting Standard 33
‘Earnings per Share’. Conversion of the preference shares will have an
antidilutive effect. Upon conversion of the preference shares to ordinary
shares the anti-diluted earnings per share would be 2.33p (2022 – 1.93p)
(revenue return).
4 Dividends
2023 2022
£ 000 £ 000
Amounts recognised as distributions to equity holders in the period
Dividends on ordinary shares:
Final dividend for the year ended 31 December 2022 of 0.0p (2021: 0.0p) per share - -
Interim dividend for the year ended 31 December 2023 of 1.75p 437 437
(2022: 1.75p) per share
__________ __________
437 437
__________ __________
Proposed final dividend for the year ended 31 December 2023 of 0.0p (2022: 0.0p) per share - -
__________ __________
Dividends on 3.5% cumulative convertible preference shares:
Preference dividend for the 6 months ended 31 December 2022 of 0.00p (2021: 0.00p) per share - -
Preference dividend for the 6 months ended 30 June 2023 of 1.75p (2022: 0.00p) per share 175 -
Preference dividend for the 6 months ended 31 December 2023 of 0.00p (2022: 1.75p) per share - 175
__________ __________
175 175
__________ __________
We have set out below the total dividend payable in respect of the financial
year, which is the basis on which the retention requirements of Section 1158
of the Corporation Tax Act 2010 are considered.
Dividends proposed for the period
2023 2022
£ 000 £ 000
Dividends on ordinary shares:
Interim dividend for the year ended 31 December 2023 of 1.75p (2022: 1.75p) per share 437 437
Proposed final dividend for the year ended 31 December 2023 of 0.0p (2022: 0.0p) per share - -
__________ __________
437 437
__________ __________
Dividends on 3.5% cumulative convertible preference shares:
Preference dividend for the 6 months ended 30 June 2023 of 1.75p (2022: 0.00p) per share 175 -
Preference dividend for the 6 months ended 31 December 2023 of 0.00p (2022: 1.75p) per share - 175
__________ __________
175 175
__________ __________
The non-payment in December 2019, December 2020, June 2022 and December 2023
of the dividend of 1.75 pence per share on the 3.5% cumulative convertible
preference shares, consequent upon the non-payment of a final dividend on the
Ordinary shares for the year ended 31 December 2019, for the year ended 31
December 2020, for the period ended 30 June 2022 and for the year ended 31
December 2023, has resulted in arrears of £700,000 on the 3.5% cumulative
convertible preference shares. These arrears will become payable in the event
that the ordinary shares receive, in any financial year, a dividend on par
value in excess of 3.5%.
An interim dividend declared for the year ended 31 December 2023 of 1.75 pence
per ordinary share was paid on 21 December 2023 to shareholders on the
register at 7 December 2023. A preference dividend of 1.75 pence was paid to
preference shareholders on the same date.
5 Net asset values
Net asset
value per share
2023 2022
Ordinary shares £ £
Diluted 0.13 0.20
Undiluted 0.13 0.20
Net assets attributable
2023 2022
£ 000 £ 000
Total net assets 4,512 7,091
Less convertible preference shares at fully diluted value (1,289) (2,026)
__________ __________
Net assets attributable to ordinary shareholders 3,223 5,065
__________ __________
The undiluted and diluted net asset values per £1 ordinary share are based on
net assets at the year end and 25 million (undiluted) ordinary and 35 million
(diluted) ordinary and preference shares in issue.
Principal risks and uncertainties
The principal risks facing the company relate to its investment activities and
include market risk (other price risk, interest rate risk and currency risk),
liquidity risk and credit risk. The other principal risks to the company are
loss of investment trust status and operational risk. These will be explained
in more detail in the notes to the 2023 Annual Report and Accounts, but remain
unchanged from those published in the 2022 Annual Report and Accounts.
Related party transactions
The company rents its offices from Romulus Films Limited, and is also charged
for its office overheads.
The salaries and pensions of the company’s employees, except for the
non-executive directors and one employee are paid by Remus Films Limited and
Romulus Films Limited and are recharged to the company.
During the year the company entered into investment transactions with British
& American Films Limited to sell stock for £890,000 (2022 – £nil) and to
purchase stock for £890,000 (2022 – £nil).
At 31 December 2023 £4,413,958 (2022 – £4,132,163) was owed by British &
American Films Limited to Romulus Films Limited under an existing loan
agreement (general purpose facility agreement).
There have been no other related party transactions during the period, which
have materially affected the financial position or performance of the company.
Capital Structure
The company's capital comprises £35,000,000 (2022 – £35,000,000) being
25,000,000 ordinary shares of £1 (2022 – 25,000,000) and 10,000,000
non-voting convertible preference shares of £1 each (2022 – 10,000,000).
The rights attaching to the shares will be explained in more detail in the
notes to the 2023 Annual Report and Accounts, but remain unchanged from those
published in the 2022 Annual Report and Accounts.
Directors’ responsibility statement
The directors are responsible for preparing the financial statements in
accordance with applicable law and regulations. The directors confirm that to
the best of their knowledge the financial statements prepared in accordance
with the applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and the (loss)/profit of the
company and that the Chairman’s Statement, Managing Director's Report and
the Directors’ report include a fair review of the information required by
rules 4.1.8R to 4.2.11R of the FSA’s Disclosure and Transparency Rules,
together with a description of the principal risks and uncertainties that the
company faces.
Annual General Meeting
This year’s Annual General Meeting has been convened for Wednesday 12 June
2024 at 12.15pm at Wessex House, 1 Chesham Street, London SW1X 8ND.
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