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ATT Allianz Technology Trust Plc

347.50
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Allianz Technology Trust Plc LSE:ATT London Ordinary Share GB00BNG2M159 ORD 2.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 347.50 347.50 349.50 354.00 347.50 354.00 585,303 16:29:38
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Allianz Technology Trust PLC Final Results (7019F)

23/02/2018 7:00am

UK Regulatory


Allianz Technology (LSE:ATT)
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TIDMATT

RNS Number : 7019F

Allianz Technology Trust PLC

23 February 2018

For immediate release

22 February 2018

ALLIANZ TECHNOLOGY TRUST PLC

LEI: 549300OMDPMJU23SSH75

FINAL RESULTS FOR THE YEARED 30 NOVEMBER 2017

The following comprises extracts from the Company's Annual Financial Report (AFR) for the year ended 30 November 2017. The full AFR will shortly be available to be viewed on or downloaded from the company's website at www.allianztechnologytrust.com. Copies will also be posted to shareholders shortly.

For further information contact:

   Robert Jeens             Melissa Gallagher                      Eleanor Emuss 
   Chairman                  Head of Investment Trusts           Company Secretary 

Telephone:

   020 3246 7405          020 3246 7539                           020 3246 7405 

MANAGEMENT REPORT

Chairman's Statement

A year of strong performance

It is pleasing to report that the year under review has been an extremely successful one for your Company and one in which it beat its benchmark index by some considerable distance.

In the year to 30 November 2017, the Company's Net Asset Value (NAV) per share increased by an outstanding 41.0%. Our benchmark index, the Dow Jones World Technology (sterling adjusted, total return), increased by 31.5% over the same period, creating an outperformance for the portfolio of 9.5% in NAV terms. In both absolute and relative terms, your Manager has delivered an exceptional performance.

Over this extremely positive period, the market price of the Company's shares performed even better than the NAV, with the share price rising 50.2% over the year, from 799p to 1200p. The discount to NAV narrowed, from a 4.4% discount (at 30 November 2016) to a small premium of 1.8% one year later. This year has also seen Shareholders' Funds increasing by almost GBP100 million to GBP313.4 million (30 November 2016: GBP216.7 million).

No dividend is proposed for the year ended 30 November 2017 (2016: nil). Given the nature of the Company's investments and its stated objective to achieve long-term capital growth the Board considers it unlikely that any dividend will be declared in the near future.

Investment Managers' Review

Six months ago, when I commented on the Company's interim results to 31 May 2017, I noted that global markets had been strong and that all-time market highs had been reached in the US; this trend continued unabated throughout the Company's second half. Your Company's performance is explored in depth in the Investment Managers' Review on pages 38 to 45 of the AFR which also discusses the significant global geopolitical factors that have provided a complex backdrop to the year under review. Of course, 20 January 2017 marked the inauguration of Donald Trump as the 45th president of the United States and the Manager's review naturally considers the impact the Trump administration has had on the portfolio.

How do we compare with our peers and other indices?

The table below compares the Company to its technology investment trust peers and related indices. You will note that the Company's performance over all timeframes has been strong and that, when compared to peers and indices, your Company has been in 1st or 2nd place over each of the time periods set out below:

 
 % increase                     1 year   3 years   5 years       10 years 
-----------------------------  -------  --------  --------  ------------- 
 ATT NAV                          41.0      92.5     234.3          349.7 
-----------------------------  -------  --------  --------  ------------- 
 Dow Jones World 
  Technology Index 
  (sterling adjusted 
  total return)                   31.5      85.3     184.3          295.8 
-----------------------------  -------  --------  --------  ------------- 
 MSCI World Technology 
  Index (total return)            29.9      86.3     193.6          299.3 
-----------------------------  -------  --------  --------  ------------- 
 Russell MidCap Technology 
  Index                           23.4      83.4     199.4          326.4 
-----------------------------  -------  --------  --------  ------------- 
 Polar Capital Technology 
  (NAV)                           36.1      95.5     192.7          372.2 
-----------------------------  -------  --------  --------  ------------- 
 ATT NAV performance               1st       2nd       1st            2nd 
  against above comparatives 
-----------------------------  -------  --------  --------  ------------- 
 

Source: AllianzGI in sterling as at 30 November 2017

The table below provides a comparison with the broader UK and world equity indices which many investors will use when reviewing the performance of their individual investments.

 
 % increase              1 year   3 years   5 years   10 years 
----------------------  -------  --------  --------  --------- 
 ATT NAV                   41.0      92.5     234.3      349.7 
----------------------  -------  --------  --------  --------- 
 FTSE All Share Index 
  (total return)           13.4      25.2      57.1       76.5 
----------------------  -------  --------  --------  --------- 
 FTSE World Index 
  (total return)           15.4      48.6     107.0      150.9 
----------------------  -------  --------  --------  --------- 
 

Source: AllianzGI in sterling as at 30 November 2017.

As noted in previous reports the Board pays close attention to the Company's performance position against the wider universe of open ended funds, closed ended funds and exchange traded funds. The performance of your Company versus the other funds within the Morningstar Global Technology Sector - Equity (Morningstar) category is very strong over all periods and exceptional over the longer investment terms of 5 and 10 years.

 
                       1 year   3 years   5 years   10 years 
--------------------  -------  --------  --------  --------- 
 Peer Group Ranking 
  vs Morningstar         4/70      7/59      1/58       4/50 
--------------------  -------  --------  --------  --------- 
 

Growing the Company

Your Board considers that growing the Company is strongly in the interest of all shareholders. In addition to delivering capital growth per share, increasing the total value of the Company should make the Company more attractive to a wider range of investors through improved secondary market liquidity and marketability and also enables the Company's fixed expenses to be spread over a larger asset base.

Each year the Board considers carefully what level of expenditure should be incurred to promote the growth of the Company, recognising that the benefit of much marketing-related expenditure is cumulative and hence that returns are not easily measured within each financial year. Over recent years the Board has modestly increased marketing expenditure on a strongly focused basis and it is very pleasing to note the growing awareness of the Company's shares amongst potential shareholders has been achieved. Awareness has grown on the back of the Company's long-term performance record as well as the numerous (and prestigious) awards and positive press comment that this performance has generated.

How marketing can serve to grow the Company

Our communications programme has created significant demand for the Company's shares in recent years, particularly through execution-only investment platforms. The programme includes targeted advertising and substantial communications with national and industry journalists, since press coverage can be highly influential.

The Company's website (www.allianztechnologytrust.com) is managed by Allianz Global Investors and is at the heart of ongoing marketing initiatives. During the period under review, the website was redesigned in a 'responsive' format that provides an optimal viewing experience (by way of easy viewing and navigation) for visitors using all forms of devices - mobile phones, tablets and desktop computers. As well as a much cleaner 'look and feel', the redesign has added substantial new content that the Board believes shareholders will appreciate. It is pleasing to report that visitor numbers have increased substantially since the new site went live.

Accessing the very latest information

The Company's website provides information on both the Company's investment performance and the technology sector as a whole. You will find video interviews, press coverage, regulatory market announcements and a full Literature & Resources library. The 'How to invest' section includes detailed background information as well as links to the most popular online trading platforms. Shareholders are reminded that, via the website, they can register to receive monthly performance updates via email as well as regular 'Investment Insights from Silicon Valley' updates from the Company's Investment Manager.

Performance awards raise awareness

Award recognition is instrumental in raising awareness of the Company's specialist investment theme (and the technology sector as a whole). Allianz Technology Trust has received high profile and prestigious recognition in recent years. Awards include the Investment Week Investment Company of the Year Award, Specialist category (2015 and 2017) where the judging panel comprised some of the UK's leading researchers and investors in investment trusts. In September 2017, the Company was recognised by Investors Chronicle as a 'Top 100 Fund' for the fifth consecutive year whilst it was also selected as the 'Best Investment Trust 2017' by the users of MoneyAM. Such awards reflect the Company's long-term investment performance track record and drive the sustained and ongoing demand for the Company's shares that its marketing campaign seeks to achieve.

Successful issuance of shares

As stated earlier, the Board remains keen to increase the number of shares in issue as a means of growing the Company. However, where there is market volatility the Board will also consider buying back shares when the discount is over 7% and all other factors align. The Board considers carefully the parameters which should apply to both re-issuances of shares held in treasury and shares to be bought-back from the market and will only proceed when the action is in the best interests of shareholders.

In the year under review, 675,000 shares were issued out of those held in treasury at an average price of 1173p and an average discount of 2.99%, while no shares were bought back. Market conditions were very different from the previous year (to 30 November 2016) when it had not proved possible to issue any shares out of those held in treasury. Indeed, in that period shares had been bought back at an average discount of 11.0%.

At 30 November 2017, the Company had 26,594,427 Ordinary shares in issue with a further 1,708,453 shares held in treasury available for re-issue into the market to meet demand subject to appropriate pricing; it should be noted that shares being re-issued into the market shall only be issued at an average discount narrower than that at which they were bought back.

Since the start of the current financial year and up to 12 February 2018 the Company has issued a further 540,000 shares out of those held in treasury at an average price of 1172p and an average discount of 2.29% while no shares were bought back. As of 12 February 2018, 1,168,453 shares are held in treasury.

The Board is very pleased that excellent investment performance, well focused marketing and conducive market conditions have combined to enable the reissuance of a significant number of shares from treasury. The Board is also taking steps to ensure that, should appropriate demand arise, the Company is able to issue new shares once those held in treasury have all been reissued. Any such new shares will only be issued at a premium to NAV.

Our focus on the costs of running the Company

Your board works hard to ensure that the costs of running the Company are both reasonable and competitive, whilst also recognising that Allianz Technology Trust is a specialist vehicle.

The ongoing charges figure (OCF) is calculated by dividing operating expenses by the average net asset value. The OCF for the period under review was 1.02% (2016: 1.03%). The OCF excludes any performance fee to which the Investment Manager may be entitled if the Company's NAV per share outperforms its benchmark (as is explained in more details in Note 2 on page 96 of the Financial Statements in the Annual Report). As a result of the Company's significant outperformance of its benchmark in the year to 30 November 2017, a performance fee of GBP433,476 was earned by the Investment Manager for this period (2016: GBPnil). Your board is pleased that the Company's excellent performance over the period has triggered the payment of a performance fee. The Investment Management Agreement is in place to encourage, recognise and reward such excellent results. It should be added that the Company was one of the very best performing UK-listed investment trusts over the 2017 calendar year.

Towards the end of the last financial year the Board entered into discussions with Allianz Global Investors (AllianzGI) with a view to reducing the rate of AllianzGI's fees as the Company's assets increase. I am pleased to report that a tiered management fee structure has now been agreed whereby the present management fee of 0.8% per annum on market capitalisation reduces to 0.6% per annum for any amount of market capitalisation in excess of GBP400 million. This change became effective on 1 December 2017.

Change of financial year end

The Board has reflected on the November financial year end of the Company and concluded that changing this to a December year end should help shareholders by providing greater clarity in reporting comparative performance. The Board has decided that the current financial year will run for thirteen months to 31 December 2018. The interim report for 2018 will be for the six months to May.

Key Investor Information

The Key Investor Information (KID) is a new document which came into force in January 2018 for investment trusts and many other investment products operating under the Packaged Retail and Insurance-based Investment Products (PRIIP) Regulation. The KID is a standardised pan-European document that contains product, risk, charges and other information. It is a regulatory requirement that you are provided with a KID before you invest, and you will be required to declare that you have seen the latest KID when you make your investment.

The Allianz Technology Trust KID is available from the Literature Library at www.allianztechnologytrust.com. However, your chosen platform provider or stockbroker should provide you with a copy before accepting your investment instructions. Please note that existing investors do not need to review the KID unless planning to top up an investment.

The KID's standardised format is intended to allow potential investors to compare funds easily, on a like-for-like basis. However, your Board shares wider industry concerns that disclosures mandated for inclusion may prove to be unhelpful for investors. Specific concern surrounds the methodology for both the investment performance and risk sections as, particularly given the exceptionally strong five-year performance period on which they are required to be based, the published figures may result in a misleadingly optimistic view. Your Board would therefore strongly encourage any prospective investor in the Company not to rely solely on the KID when making their investment decision.

Board matters

Your Company's Investment Manager continues to enjoy considerable benefits from being located in San Francisco, close to where many of the Company's top holdings are located. As a Board we recognise the advantage the Company gains by being located at 'the heart of the action'. Moreover, we have worked hard to optimise working practices with the Manager, whilst recognising the constraints imposed by the geographical distance and time zone difference between London and San Francisco.

The Company's Board meetings are generally held in London, but we schedule a visit to San Francisco every couple of years. The most recent San Francisco Board meeting was in November 2017 and the next visit is tentatively planned for 2019. The frequency of these visits recognises the importance of good communications and close working relationships between the Manager and the Board, but also the costs and time commitment of such trips.

An internally facilitated Board and Manager performance appraisal process was conducted towards the end of the year. This confirmed that the current Board is working in an effective manner with no significant shortcomings identified.

In accordance with the Articles of Association, at this year's AGM Elisabeth Scott shall retire by rotation and Richard Holway shall retire due to tenure having served as a Director for in excess of nine years. I am pleased to confirm that Elisabeth and Richard are fully effective as independent directors and the re-election of both is fully supported by the Board.

Continuation vote

In accordance with our Articles of Association we are required to propose a continuation vote every five years. The most recent continuation vote was proposed and passed by Shareholders at the 2016 AGM. Shareholders will have a further opportunity to vote on the continuation of the Company at the AGM to be held in 2021.

Outlook

Since the end of the reporting period, markets were initially buoyant but volatility has recently increased significantly and confidence appears to have waned. The chances of a significant market correction remain a high possibility. Indeed 2017 may have created false hope in certain sectors and it is realistic to assume that the path ahead may be less smooth. There is also concern on the implications of rising interest rates around the world, rising labour costs in China and, in the US, tax cuts.

However, we should not let the concerns highlighted above detract from the likelihood that technology should continue to grow its influence over the global economy. As such, your board shares the Manager's positive view that the case for strong relative performance from the technology sector remains robust. As always, stock selection will be of the utmost importance but we believe that the Manager's carefully chosen portfolio of technology investments should continue to deliver positive returns over the longer term.

Annual General Meeting

The AGM will be held at The City of London Club, 19 Old Broad Street, London EC2N 1DS, on Wednesday, 25 April 2018 at 12 noon. All of your Board look forward to welcoming and meeting those shareholders who are able to attend.

Robert Jeens

Chairman

22 February 2018

Investment Managers' Review

Financial Year to 30 November 2017

Economic and market backdrop

The concerns over the health of the global economy that had weighed on investor sentiment for much of 2016 dissipated in 2017. For much of the year, the global economy experienced a synchronised economic upturn, led by the US. This was supportive for corporate earnings, which in many cases, remained robust.

Financial markets weathered three quarter-point rises in interest rates, with monetary policy remaining expansive around the globe. Towards the end of the period under review, concerns over the withdrawal of loose monetary policy had started to weigh on sentiment.

The technology sector

Technology companies have shown real strength in 2017. This strength has had multiple causes: a search for structural growth in a low growth world, improving global growth and the onward march of technology into new sectors and industries. However, above all, the technology sector has been driven higher by earnings growth.

The Dow Jones World Technology Index (sterling adjusted, total return) was up 31.5% over the 12 month period to 30 November 2017. This strength has been widely shared, with most underlying technology sectors participating in the growth. Earning growth has been significant (89% year on year for companies in the portfolio) and, in some cases, materially ahead of expectations.

This growth has been seen outside the headline sectors. Even in traditionally slower growth areas such as semiconductors, for example, supply and demand moved into balance after some significant consolidation, improving pricing for much of 2017. This improved earnings, which in turn saw share prices appreciate.

The strength was also not confined to the US. The Asian technology sector had a buoyant 2017, with companies such as Alibaba and Tencent showing that technology innovation is now firmly a global phenomenon. Chinese stocks were some of the best in the market.

Many technology companies continue to sit on significant cash balances. Research from Moody's showed that Apple, Microsoft, Google parent Alphabet, Cisco Systems and Oracle are set to hold a cumulative $679 billion in cash, up 16% over 2016. Apple's $285 billion cash balance represented nearly 15% of total non-financial corporate cash held by US Companies.

They may also be significant beneficiaries of the changes in the tax rules relating to repatriating cash balances held offshore. At the moment, these remittances are subject to high tax rates, but this will change under the US administration's new tax proposals. However, elsewhere technology companies came under increasing scrutiny for their tax arrangements. Many now recognise the need to make concessions to ensure they can continue to trade freely.

Technology developments over the year

New developments kept technology companies firmly in the headlines. In early November, and amid much hype, the Apple iPhone X went on sale - a celebration of 10 years since the launch of the first iPhone. While face recognition technology captured the imagination, it also addressed some of the issues with existing iPhones - the glass is harder, the battery life is better and there are new applications. Whether it will be enough to support the upgrade cycle is yet to be seen.

The biggest headlines were reserved for cryptocurrencies. Although they have been around since 2009, interest hit fever-pitch in 2017, with around 900 digital currencies now available. The technology appears to hold significant promise - in the long term its unique ledger may have a place, but its uses to date have been limited, and largely focused on criminality. The Bitcoin price was up over 4,500% for the year but has since fallen heavily.

Robotics has become more widespread, with companies increasingly seeking to mechanise to offset rising wages, particularly in emerging markets. At the same time, artificial intelligence (AI) has become a more important part of daily lives - from driverless technology in cars, to the Amazon Echo, it has become a feature in homes across the globe.

Tesla launched its Model 3 in July after a number of production delays. It brought the reality of a mainstream, affordable electric vehicle one step closer. Hurdles remain. In particular, battery supply is a notable challenge, but new factories are being built to address this.

Portfolio analysis

Micron and Square were the top contributors to the portfolio for the 12 months to 30 November 2017. There has been a perception that technology outperformance has largely been generated by the FANGs (Facebook, Amazon, Netflix and Google). While this has a kernel of truth - these stocks have generally performed well this year - they have not been the primary driver of relative and absolute performance in the fund.

Our semiconductor holdings have been a notable contributor to overall performance. Micron has seen a significant appreciation in its share price, on the back of strong earnings and a low starting price. The management team has managed the group's inventory well, which has helped to contribute to a stronger pricing environment for the company. Important too were the semiconductor holdings we didn't own, notably Qualcomm, which saw a series of setbacks including clashes with the regulatory authorities over its patent licensing business, a spat with Apple and a (to date) failed acquisition for NXP Semiconductors.

Having seen unexciting growth in recent years, the semiconductor industry is being given a new lease of life by the demand from developments in software-as-a-service, AI and the connected car. These innovations need high performance processing chips to manage large volumes of data. The sector has seen considerable consolidation, which has also helped pricing. Other notable holdings in the portfolio benefiting from this trend are Lam Research, Broadcom and Applied Materials.

Square was our second strongest contributor to overall performance on an absolute basis. We identified this company relatively early in its lifecycle. It started as a payment processing company. It evolved a system allowing small businesses such as hairdressers or cab drivers to accept credit card payments. It has now transitioned from hardware to software. Increasingly those same businesses are starting to use Square's software to manage other aspects of their business - staffing costs, inventories. It allows far more efficient business operations for small merchants. It has also recently started to offer small loans to businesses.

During the year, we made our first investments in robotics companies, building positions in IPG Photonics and Teradyne. Both contributed positively to the portfolio's performance over the period. In previously low wage economies, such as China, wages have risen significantly, threatening corporate profitability.

Companies are increasingly seeking to retain competitiveness in the face of mounting wages and robotics has proved an effective means to do this. Equally, where companies are seeking to repatriate manufacturing back to the US, they will also need robotics capabilities to keep costs low.

Teradyne makes small robots, nicknamed 'co-bots'. They are not designed to replace humans, but to remove some of the repetitive tasks - polishing metal or attaching two components together, for example. The robots can be trained to perform different tasks and are designed to help humans complete tasks more quickly and efficiently. IPG Photonics makes lasers, used in the manufacturing process for cutting and welding parts for cars, planes and electronics.

Elsewhere among the top performers on an absolute basis in the portfolio were some more familiar names; Amazon.com, Facebook and Samsung Electronics. In most cases this was a function of earnings, which continued to support the relatively high price to earnings multiples of these stocks. Apple also saw encouraging returns, having seen little share price movement in 2016. The reception for the iPhone X is still hard to read, but investors had become overly gloomy.

Although Sophos was a positive contributor to absolute performance, it was a more difficult year for our cyber security holdings. This came in spite of some notable data breaches, including some at major technology companies. Holdings in Palo Alto, FireEye and CyberArk Software detracted from the overall performance of the Company. A lot of the companies are currently going through business model transition, moving from selling hardware and licenses to a subscription service where customers pay fees. In the long-term, this should be a more sustainable business model, and revenues should become more predictable, but in the interim, this has created volatility in earnings.

A secondary problem is that some groups have been weak in executing this transition and investors have lost faith. Valuations were already relatively high and in the end, were not supported by business reality. Similar weakness has been seen in LendingClub, the largest detractor from overall performance. Management has executed poorly on the group's business plan, in spite of some compelling opportunities.

Overseas holdings

It has become increasingly clear in recent years that the US has no monopoly on innovation. Some of the most innovative and fastest growing companies are to be found outside the US, particularly in Asia. Chinese internet stocks have had a particularly strong run, notably Alibaba and Tencent, though investors have started to grow concerned about valuations. We pared back our weighting to China in the wake of the US Election, believing that there was too much uncertainty as to how the new relationship between the US and China would work. This has hurt performance - our underweight position in Tencent was the largest detractor from overall returns on a relative basis for the Company. We rebuilt positions in China early in 2017 but pared some again late in the year after great performance and some concern about difficult comparisons in the first half of 2018.

Absolute performance

The Company delivered a very strong absolute gain of 41%. The primary drivers for the portfolio's absolute performance include positions in some high-growth software companies, as well as robust performance from semiconductor and robotics stocks. These companies performed well due to higher demand for innovative technologies and components that enable the technologies, which led to consistently strong earnings growth.

Relative performance

A final note on relative performance: this year we outperformed the Dow Jones World Technology Index (sterling adjusted, total return), with the Company returning 41.0% against an index performance of 31.53%. Although our investments are not driven by the weightings of individual companies in the benchmark, we are aware of the benchmark and use it to measure the success of our performance. While many of the companies mentioned above contributed on an absolute and relative basis, stocks such as Amazon and Netflix are not currently part of our benchmark, and have therefore helped overall performance.

Outlook

While some investors assume technology companies may only see a small benefit from US tax reform, we believe this can significantly help the sector. New tax rules will allow companies to repatriate cash balances held offshore at lower tax rates. Cash repatriation can lead to larger cash returns to shareholders of large technology companies, and it could spark M&A activity in the tech sector, which should benefit smaller companies. Additionally, companies across the economy will likely spend at least some of the tax savings to invest in their businesses. We expect more spending to flow to technology companies that offer innovative products and services designed to help businesses increase productivity and improve efficiency. In our view, these factors should lead to continued strong earnings growth for technology companies.

22 February 2018

Viability Statement

In accordance with the Corporate Governance provisions the Company is required to make a forward looking (longer term) Viability Statement. In order to do this the Board has considered the appetite for a technology investment trust against the current market backdrop and has formally assessed the prospects for the Company over a period of four years.

The directors believe that the period of four years continues to be appropriate as such time frame incorporates the Company's next five-year continuation vote which will be proposed at the AGM to be held in 2021. In order to assess the prospects for the Company the Board has considered:

-- The investment objective and strategy taking into account recent, past and potential performance against both the benchmark, other indices of note and peers;

-- The financial position of the Company, which does not currently utilise gearing in any form but does maintain a portfolio of, in the main, non-income bearing investments;

-- The liquidity of the portfolio and the ability to liquidate the portfolio on the failure of a continuation vote;

   --      The ever increasing level of technology adopted by both individuals and corporations alike; 

-- The inherent risks in such technology both in terms of speed of advancement but also potential catastrophe with the growth of cyber fraud; and

   --      The principal risks faced by the Company as outlined below. 

The Board is fully aware that the world of technology is constantly moving and growing and the perceived picture of technology now and in four years' time is potentially very different. Based on the results of the formal assessment the Board believes it is reasonable to expect that the Company will continue in operation and meet its liabilities for both the period of four years under direct review but also for the foreseeable future.

Principal Risks and Uncertainties

The principal risks identified by the Board are set out in the table below, together with information about the actions taken to mitigate these risks. A more detailed version of this table in the form of a Risk Map and Controls document is reviewed in full and updated by the Audit Committee and Board at least twice yearly; individual risks are considered by the Board in further detail depending on the market situation and a high-level review of all known risks faced by the Company is considered at every Board meeting. The principal risks and uncertainties faced by the Company relate to the nature of its objectives and strategy as an investment company and the markets in which it operates.

 
 
   Description                          Mitigation 
-----------------------------------  ----------------------------------- 
 
   Investment Strategy Risk             The Investment Manager 
   The Company's NAV may                has responsibility for 
   be adversely affected                sectoral weighting and 
   by the Investment Manager's          for individual stock picking, 
   inappropriate allocation             having taken due account 
   of funds to particular               of Investment Objectives 
   sub-sectors of the technology        and Controls that are 
   market and/or to the selection       agreed with the Board 
   of individual stocks that            from time to time and 
   fail to perform satisfactorily,      regularly reviewed. These 
   leading to poor investment           seek, inter alia, to ensure 
   performance in absolute              that the portfolio is 
   terms and/ or against                diversified and that its 
   the benchmark.                       risk profile is appropriate. 
 
   Technology Sector Risk               The Board reviews investment 
   The technology sector                performance, including 
   is characterised by rapid            a detailed attribution 
   change. New and disruptive           analysis comparing performance 
   technologies can place               against the benchmark, 
   competitive pressures                at each Board meeting. 
   on established companies             At such meetings, the 
   and business models, and             Investment Manager reports 
   technology stocks may                on major developments 
   experience greater price             and changes in technology 
   volatility than securities           market sectors and also 
   in some slower changing              highlights issues relating 
   market sectors.                      to individual securities. 
 
   Cyber Risk                           The operations of the 
   The Company may be at                Company are carried out 
   risk of cyber attacks                by the Investment Manager 
   which may result in the              and various third party 
   loss of sensitive information        service providers. All 
   or disruption to the business.       service providers report 
                                        to the Board on operational 
                                        issues including cyber 
                                        risks and the controls 
                                        in place to capture potential 
                                        attacks. The Board meets 
                                        with the AllianzGI Head 
                                        of Information Security 
                                        and is satisfied that 
                                        appropriate controls are 
                                        in place. See Operational 
                                        Risk below. 
-----------------------------------  ----------------------------------- 
 
   Market Risk                          The Board and the Investment 
   The Company's NAV may be             Manager monitor stock market 
   adversely affected by a              movements and may consider 
   general decline in the               hedging, gearing or other 
   valuation of listed securities       strategies to respond to 
   and/or adverse market sentiment      particular market conditions. 
   towards the technology 
   sector in particular. Although       The Investment Manager 
   the Company has a portfolio          maintains regular contact 
   that is diversified by               with shareholders to discuss 
   company size, sector and             performance and expectations 
   geography its principal              and to convey the belief 
   focus is on companies with           of the Board and the Investment 
   high growth potential in             Manager that superior returns 
   the mid-size ranges of               can be generated from investment 
   capitalisation. The shares           in carefully selected companies 
   of these companies may               that are well managed, 
   be perceived as being at             financially strong and 
   the higher end of the risk           focused on those segments 
   spectrum, leading to a               of the technology market 
   lack of interest in the              where disruptive change 
   Company's shares in some             is occurring. 
   market conditions. 
-----------------------------------  ----------------------------------- 
 Currency Risk 
  A high proportion of the              The Board monitors currency 
  Company's assets is likely            movements and determines 
  to be held in securities              hedging policy as appropriate. 
  that are denominated in               The Board does not currently 
  US Dollars, whilst its                seek to hedge this foreign 
  accounts are maintained               currency risk. 
  in Sterling. 
 
  Movements in foreign exchange 
  rates affect the performance 
  of the Investment Portfolio 
  and creates a risk for 
  shareholders. 
-----------------------------------  ----------------------------------- 
 Financial and Liquidity 
  Risk                                  Financial and liquidity 
  The financial risks to                reports are provided to 
  the Company and the controls          and considered by the 
  in place to manage these              Board on a regular basis. 
  risks are disclosed in 
  detail in Note 15 of the 
  AFR. 
-----------------------------------  ----------------------------------- 
 
   Operational Risk                     The Board receives regular 
   Disruption to or the failure         reports from the Investment 
   of the systems and processes         Manager and third parties 
   utilised by the Investment           on internal controls including 
   Manager or other third               reports on monitoring 
   party service providers.             visits carried out by 
   This encompasses disruption          the Depositary on behalf 
   or failure caused by cyber           of the Company. The Board 
   crime and covers dealing,            has further considered 
   trade processing, administrative     the increased risk of 
   services, financial and              cyber-attacks and has 
   other operational functions.         received reports and assurance 
                                        from the Investment Manager 
                                        regarding the controls 
                                        in place. 
-----------------------------------  ----------------------------------- 
 

In addition to the specific principal risks identified in the table above, the Company faces risks arising from the provision of services from third parties including the Investment Manager where succession planning for the individuals carrying out the day-to-day investment activities has been discussed. General risks are also present relating to compliance with accounting, legal and regulatory requirements, and with corporate governance and shareholder relations issues which could have an impact on reputation and market rating. Management of the services provided and the internal controls procedures of the third party providers is monitored and reported on by the Manager to the Board. These risks are all formally reviewed by the Board twice each year and at such other times as deemed necessary. Details of the Company's compliance with corporate governance best practice, including information on relations with shareholders, are set out in the Corporate Governance Statement within the Directors' Report of the AFR.

The Board's review of the risks faced by the Company also includes an assessment of the residual risks after mitigating action has been taken.

Related Party Transactions

During the financial year no transactions with related parties took place which would materially affect the financial position or the performance of the Company.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Financial Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the total return of the Company for that year. In preparing these 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; 
   -     state whether applicable UK accounting standards have been followed; 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 confirm that the financial statements comply with the above requirements.

The Directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

The financial statements are published on www.allianztechnologytrust.com, which is a website maintained by the Investment Manager. The work undertaken by the Auditors does not involve consideration of the maintenance and integrity of the website and, accordingly, the Auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

Neither an audit nor a review provides assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the Directors but no control procedures can provide absolute assurance in this area.

The Directors each confirm to the best of their knowledge that:

a) the Financial Statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and return of the Company; and

b) the Strategic Report includes 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 the Company faces.

The Directors confirm that the Annual Report and Financial Statements, taken as a whole are fair, balanced and understandable and provide the information necessary to assess the Company's position and performance, business model and strategy.

For and on half of the Board

Robert Jeens

Chairman

22 February 2018

Investment Portfolio as at 30 November 2017

 
 Investment        Sector(#)                Sub-sector(#)         Country             Fair         % of 
                                                                                     Value    Portfolio 
                                                                                   GBP'000 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Technology,              Technology, 
                    Hardware Storage         Hardware Storage     United 
 Apple              & Peripherals            & Peripherals         States           17,553          5.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Internet & 
                   Internet & Direct         Direct Marketing     United 
 Amazon.com*        Marketing Retail         Retail                States           17,167          5.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
 Micron             & Semiconductor                               United 
  Technology        Equipment               Semiconductors         States           16,642          5.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 Microsoft         Software                 Systems Software       States           14,808          4.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Data Processing 
                                             & Outsourced         United 
 Square*           IT Services               Services              States           12,972          4.3 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Internet Software        Internet Software     United 
 Facebook           & Services               & Services            States           12,014          3.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            IT Consulting         United 
 DXC Technology    IT Services               & Other Services      States            9,291          3.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Arista            Communications           Communications        United 
  Networks          Equipment                Equipment             States            8,971          2.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Palo Alto         Communications           Communications        United 
  Networks          Equipment                Equipment             States            8,628          2.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Alphabet          Internet Software        Internet Software     United 
  Inc.              & Services               & Services            States            8,546          2.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Top ten investments                                                               126,592         41.5 
 
                   Technology,              Technology 
 Samsung            Hardware Storage         Hardware, Storage    South 
  Electronics       & Peripherals            & Peripherals         Korea             8,514          2.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Electronic Equipment     Electronic 
                    Instruments              Manufacturing        United 
 IPG Photonics*     & Components             Services              States            8,464          2.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 ServiceNow        Software                 Systems Software       States            8,243          2.7 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
                    & Semiconductor         Semiconductor         United 
 Teradyne           Equipment                Equipment             States            7,981          2.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
                    & Semiconductor         Semiconductor         United 
 Lam Research       Equipment                Equipment             States            7,754          2.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Paycom                                     Application           United 
  Software*        Software                  Software              States            6,946          2.3 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
 Applied            & Semiconductor         Semiconductor         United 
  Materials         Equipment                Equipment             States            5,815          1.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Application           United 
 Workday           Software                  Software              States            5,758          1.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Sophos                                                           United 
  *                Software                 Systems Software       Kingdom           5,689          1.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Baidu             Internet Software        Internet Software 
  ADR               & Services               & Services           China              5,131          1.7 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Top twenty investments                                                            196,887         64.6 
 
                   Semiconductors 
 Infineon           & Semiconductor 
  Technologies      Equipment               Semiconductors        Germany            4,913          1.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
                    & Semiconductor                               United 
 NVIDIA             Equipment               Semiconductors         States            4,778          1.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Application           United 
 Salesforce.com    Software                  Software              States            4,773          1.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Internet Software        Internet Software 
 Alibaba            & Services               & Services           China              4,441          1.4 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 Proofpoint        Software                 Systems Software       States            4,228          1.4 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Internet Software        Internet Software     United 
 Yelp               & Services               & Services            States            4,050          1.3 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
                    & Semiconductor         Semiconductor 
 ASML Holding*      Equipment                Equipment            Netherlands        3,858          1.3 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Application 
 Temenos           Software                  Software             Switzerland        3,725          1.2 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Data Processing 
 Amadeus                                     & Outsourced 
  IT Holdings*     IT Services               Services             Spain              3,364          1.1 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Data Processing 
                                             & Outsourced         United 
 Paypal            IT Services               Services              States            3,148          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Top thirty investments                                                            238,165         78.1 
 
                                            Home Entertainment 
 Nintendo          Software                  Software             Japan              3,073          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Micro                                      Application           United 
  Focus            Software                  Software              Kingdom           3,061          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 NetEase           Internet Software        Internet Software     United 
  ADR               & Services               & Services            States            3,011          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Electrical Equipment     Electronic 
                    Instruments              Equipment &          United 
 Cognex*            & Components             Instruments           States            2,987          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Automobile            United 
 Tesla*            Automobiles               Manufacturers         States            2,959          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Internet Software        Internet Software     United 
 Yandex             & Services               & Services            States            2,914          1.0 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Internet & 
                   Internet & Direct         Direct Marketing     United 
 Netflix*           Marketing Retail         Retail                States            2,860          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Veeva             Health Care              Health Care           United 
  Systems           Technology               Technology            States            2,855          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Technology,              Technology, 
                    Hardware Storage         Hardware Storage     United 
 NetApp             & Peripherals            & Peripherals         States            2,753          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 Oracle            Software                 Systems Software       States            2,713          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Top forty investments                                                             267,351         87.7 
 
                   Technology,              Technology, 
 Microchip          Hardware Storage         Hardware Storage     United 
  Technology        & Peripherals            & Peripherals         States            2,710          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Internet Software        Internet Software 
 Tencent            & Services               & Services           China              2,688          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Tableau                                                          United 
  Software         Software                 Systems Software       States            2,676          0.9 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Technology,              Technology, 
                    Hardware Storage         Hardware Storage     United 
 Pure Storage       & Peripherals            & Peripherals         States            2,540          0.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 LendingClub*      Consumer Finance         Consumer Finance       States            2,413          0.8 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Technology,              Technology, 
                    Hardware Storage         Hardware Storage     United 
 HP                 & Peripherals            & Peripherals         States            2,273          0.7 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 Blue Prism        Software                 Systems Software       Kingdom           2,056          0.7 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Barracuda                                                        United 
  Networks         Software                 Systems Software       States            1,839          0.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Internet Software        Internet Software     United 
 Mercadolibre*      & Services               & Services            States            1,798          0.6 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
                    & Semiconductor                               United 
 Cree               Equipment               Semiconductors         States            1,586          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Top fifty investments                                                             289,930         95.1 
 
                   Internet Software        Internet Software     United 
 Okta               & Services               & Services            States            1,557          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Alfa Financial                             Application           United 
  Software         Software                  Software              Kingdom           1,538          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Electrical Equipment, 
                    Instruments             Technology            United 
 CDW                & Components             Distributors          States            1,519          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Data Processing 
                                             & Outsourced         United 
 Vantiv            IT Services               Services              States            1,505          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                   Semiconductors 
                    & Semiconductor 
 Broadcom           Equipment               Semiconductors        Singapore          1,491          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Application           United 
 Autodesk          Software                  Software              States            1,386          0.5 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Guidewire                                  Application           United 
  Software         Software                  Software              States            1,364          0.4 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                            Human Resources 
 51Job             Professional              & Employment         United 
  ADR               Services                 Services              States            1,337          0.4 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 Symantec          Software                 Systems Software       States            1,217          0.4 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
                                                                  United 
 Fireeye           Software                 Systems Software       States            1,201          0.4 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Top sixty investments                                                             304,045         99.7 
 
                   Semiconductors 
 Cirrus             & Semiconductor                               United 
  Logic             Equipment               Semiconductors         States              914          0.3 
----------------  -----------------------  --------------------  -------------  ----------  ----------- 
 Total Investments                                                                 304,959       100.00 
------------------------------------------------------------------------------  ----------  ----------- 
 

(#) GICS Industry classifications

* Not Constituents of the Benchmark.

INCOME STATEMENT

for the year ended 30 November 2017

 
                             2017          2017           2017           2016          2016           2016 
                            Revenue       Capital         Total         Revenue       Capital         Total 
                              GBP           GBP           Return          GBP           GBP           Return 
                                                           GBP                                         GBP 
---------------------   ------------  -------------  -------------  ------------  -------------  ------------- 
Gains on investments 
 held at fair 
 value through 
 profit or 
 loss                              -     91,039,974     91,039,974             -     41,247,845     41,247,845 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
(Loss) gains 
 on foreign 
 currencies                        -      (515,184)      (515,184)             -      1,066,899      1,066,899 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
Income                     1,723,582              -      1,723,582     1,426,898              -      1,426,898 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
Investment 
 management 
 fee and performance 
 fee                     (2,116,945)      (433,476)    (2,550,421)   (1,444,512)              -    (1,444,512) 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
Administration 
 expenses                  (609,756)              -      (609,756)     (461,918)              -      (461,918) 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
(Loss) profit 
 before finance 
 costs and 
 taxation                (1,003,119)     90,091,314     89,088,195     (479,532)     42,314,744     41,835,212 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
Finance costs: 
 interest payable 
 and similar 
 charges                     (1,536)              -        (1,536)         (544)              -          (544) 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
(Loss) profit 
 before taxation         (1,004,655)     90,091,314     89,086,659     (480,076)     42,314,744     41,834,668 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
Taxation                   (228,129)              -      (228,129)     (191,541)              -      (191,541) 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
(Loss) profit 
 attributable 
 to ordinary 
 shareholders            (1,232,784)     90,091,314     88,858,530     (671,617)     42,314,744     41,643,127 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
(Loss) earnings 
 per ordinary 
 share                       (4.75p)        346.78p        342.03p       (2.59p)        162.87p        160.28p 
----------------------  ------------  -------------  -------------  ------------  -------------  ------------- 
 

The total return column of this statement is the profit and loss account of the Company.

The supplementary revenue and capital columns are both prepared under the guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The net profit for the year disclosed above represents the Company's total comprehensive income.

BALANCE SHEET

at 30 November 2017

 
                                     2017           2017           2016 
                                      GBP            GBP            GBP 
------------------------------   ------------  -------------  ------------- 
Non Current Assets 
------------------------------   ------------  -------------  ------------- 
Investments held at fair 
 value through profit or loss                    304,958,713    209,653,974 
-------------------------------  ------------  -------------  ------------- 
Current Assets 
------------------------------   ------------  -------------  ------------- 
Other receivables                   2,641,205                    14,454,699 
-------------------------------  ------------  -------------  ------------- 
Cash and cash equivalents           7,189,378                     6,380,078 
-------------------------------  ------------  -------------  ------------- 
                                    9,830,583                    20,834,777 
 ------------------------------  ------------  -------------  ------------- 
Current Liabilities 
------------------------------   ------------  -------------  ------------- 
Other payables                    (1,356,349)                  (13,817,374) 
-------------------------------  ------------  -------------  ------------- 
Net current assets                                 8,474,234      7,017,403 
-------------------------------  ------------  -------------  ------------- 
Net assets                                       313,432,947    216,671,377 
-------------------------------  ------------  -------------  ------------- 
 
Capital and Reserves 
------------------------------   ------------  -------------  ------------- 
Called up share capital                            7,075,720      7,075,720 
-------------------------------  ------------  -------------  ------------- 
Share premium Account                             41,810,716     37,097,551 
-------------------------------  ------------  -------------  ------------- 
Capital redemption reserve                         1,020,750      1,020,750 
-------------------------------  ------------  -------------  ------------- 
Capital Reserve                                  281,523,911    188,242,722 
-------------------------------  ------------  -------------  ------------- 
Revenue Reserve                                 (17,998,150)   (16,765,366) 
-------------------------------  ------------  -------------  ------------- 
Shareholders' funds                              313,432,947    216,671,377 
-------------------------------  ------------  -------------  ------------- 
Net asset value per ordinary 
 share                                              1,178.6p         835.9p 
-------------------------------  ------------  -------------  ------------- 
 

The financial statements of Allianz Technology Trust PLC, company number 3117355, were approved and authorised for issue by the Board of Directors on 22 February 2018 and signed on its behalf by:

Robert Jeens

Chairman

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 November 2017

 
                         Called       Share        Capital 
                         up Share     Premium     Redemption     Capital       Revenue 
                         Capital      Account      Reserve       Reserve        Reserve        Total 
                           GBP          GBP          GBP           GBP            GBP           GBP 
--------------------   ----------  -----------  ------------  ------------  -------------  ------------ 
 
   Net assets 
   at 
   1 December 
   2015                 7,075,720   37,097,551     1,020,750   146,601,753   (16,093,749)   175,702,025 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Revenue Loss                   -            -             -             -      (671,617)     (671,617) 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Shares repurchased 
  into treasury 
  during the 
  year                          -            -             -     (673,775)              -     (673,775) 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Capital profit                 -            -             -    42,314,744              -    42,314,744 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Net assets 
  at 
  30 November 
  2016                  7,075,720   37,097,551     1,020,750   188,242,722   (16,765,366)   216,671,377 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 
   Net assets 
   at 
   1 December 
   2016                 7,075,720   37,097,551     1,020,750   188,242,722   (16,765,366)   216,671,377 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Revenue loss                   -            -             -             -    (1,232,784)   (1,232,784) 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Ordinary 
  shares issued 
  from treasury 
  during the 
  year                          -    4,713,165             -     3,189,875              -     7,903,040 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Capital profit                 -            -             -    90,091,314              -    90,091,314 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 Net assets 
  at 
  30 November 
  2017                  7,075,720   41,810,716     1,020,750   281,523,911   (17,998,150)   313,432,947 
---------------------  ----------  -----------  ------------  ------------  -------------  ------------ 
 

Note A

Summary of Accounting Policies

The financial statements - have been prepared on the basis of the accounting policies set out below.

The financial statements have been prepared in accordance with The Companies Act 2006, FRS102 and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (SORP) issued by the Association of Investment Companies (AIC) in November 2014, as updated in January 2017.

In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. In accordance with the Company's status as a UK investment company under section 833 and 834 of the Companies Act 2006, net capital returns may be distributed by way of dividend, under the terms of the Articles of Association. The Company does not utilise this ability.

The requirements have been met to qualify for the exemption to prepare a Cash Flow Statement. The Cash Flow Statement has therefore been removed from the financial statements.

The accounting policies adopted in preparing the current year's financial statements are consistent with those of previous years.

The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the Company consist mainly of securities which are readily realisable and significantly exceed liabilities. Accordingly, the Directors believe that the Company has adequate financial resources to continue in operational existence for the foreseeable future. The

Company's business, the principal risks and uncertainties it faces, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 58 to 62 of the AFR..

Valuation

As the Company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value, financial assets are held at fair value through profit and loss in accordance with FRS 102 Section 11: 'Basic Financial Instruments' and Section 12 'Other Financial Instruments' .

Investments held at fair value through profit or loss are initially recognised at fair value. After initial recognition, these continue to be measured at fair value, which for quoted investments is either the bid price or the last traded price depending on the convention of the exchange on which the investment is listed. Gains or losses on investments are recognised in the capital column of the Income Statement. Purchases and sales of financial assets are recognised on the trade date, being the date which the Company commits to purchase or sell the assets.

Unlisted investments are valued by the Directors based upon the latest dealing prices, stockbrokers' valuations, net asset values, earnings and other known accounting information in accordance with the principles set out by the International Private Equity and Venture Capital Valuation Guidelines issued in December 2015.

Transactions with the Investment Manager and related parties

The amounts paid to the investment manager together with details of the investment management contract are disclosed in Note 2 on page 96 of the AFR. The existence of an independent board of directors demonstrates that the company is free to pursue its own financial and operating policies and therefore, under FRS 102 Section 33: 'Related Party Disclosures', the investment manager is not considered to be a related party.

The Company's related parties are its directors. Fees paid to the Company's Board, including employer national insurance contributions, are disclosed in the Note 3 on page 97 of the AFR. There are no other identifiable related parties at the year end, and as of 22 February 2018.

Note B

Return per Ordinary Share

The total return per Ordinary Share of 342.03p (2016: 160.28p) is based on the weighted average number of Ordinary Shares in issue of 25,979,754 (2016: 25,981,157).

Note C

Investments

Included in the cost of investments are transaction costs on equity purchases which amounted to GBP186,894 (2016: GBP241,586) and transaction costs on equity sales which amounted to GBP151,431 (2016: GBP220,969).

Note D

2017 Financial Information

The financial information for the year ended 30 November 2017 has been extracted from the statutory accounts for that year. The auditor's report on those accounts was unqualified and did not contain a statement under either Section 498(2) or (3) of the Companies Act 2006. The Annual Financial Report has not yet been delivered to the Registrar of Companies.

2016 Financial Information

The financial information for the year ended 30 November 2016 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under either Section 498(2) or (3) of the Companies Act 2006.

Annual Report and Financial Statements

The full Annual Financial Report will shortly be available to be viewed on or downloaded from the Company's website at www.allianztechnologytrust.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, nor forms part of this announcement.

Annual General Meeting

The Annual General Meeting of the Company will be held at 12 noon on Wednesday, 25 April 2018 at The City Club, 19 Old Broad Street, London, EC2N 1DS.

The company news service from the London Stock Exchange

END

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