British & American Annual Financial Report

 
TIDMBAF 
 
British & American Investment Trust PLC 
 
Annual Financial Report 
for the year ended 31 December 2021 
 
Registered number: 00433137 
 
 
 
Directors                                                         Registered office 
 
David G Seligman (Chairman)                                       Wessex House 
 
Jonathan C Woolf (Managing Director)                              1 Chesham Street 
 
Dominic G Dreyfus (Non-executive and Chairman of the Audit        Telephone: [phone] 
Committee until 7 February 2022)                                  3100 
 
Alex Tamlyn (Non-executive and acting Chairman of the Audit       Registered in 
Committee)                                                        England 
 
Julia Le Blan (Non-executive from 1 June 2022)                    No.00433137 
 
                                                                  28 April 2022 
 
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 2021 
 
 
                             2021                             2020 
 
 
                                Revenue    Capital      Total    Revenue    Capital         Total 
                                 return     return                return     return 
 
                                   £000       £000       £000       £000       £000          £000 
 
Profit/(loss) before tax -          978      (810)        168        879    (1,230)         (351) 
realised 
 
Profit before tax -                   -      1,028      1,028          -      1,388         1,388 
unrealised 
 
                             __________ __________ __________ __________ __________    __________ 
 
Profit before tax - total           978        218      1,196        879        158         1,037 
 
                             __________ __________ __________ __________ __________    __________ 
 
Earnings per £1 ordinary 
share - basic                     2.66p      0.87p      3.53p      2.23p      0.63p         2.86p 
 
                             __________ __________ __________ __________ __________    __________ 
 
Earnings per £1 ordinary 
share - diluted                   2.90p      0.62p      3.52p      2.59p      0.45p         3.04p 
 
                             __________  _________ __________ __________  _________    __________ 
 
Net assets                                              6,727                               6,720 
 
                                                   __________                          __________ 
 
Net assets per ordinary 
share 
 
- deducting preference 
shares                                                    19p                                 19p 
    at fully diluted net 
asset value* 
 
                                                   __________                          __________ 
 
- diluted                                                 19p                                 19p 
 
                                                   __________                          __________ 
 
Diluted net asset value per                               17p 
ordinary share at 25 April 
2022 
 
                                                   __________ 
 
Dividends declared or 
proposed for the period: 
 
per ordinary share 
 
- interim paid                                           3.5p                                2.7p 
 
- final proposed                                         0.0p                                0.0p 
 
per preference share                                     3.5p                               1.75p 
 
 
 
*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 2021. 
 
Revenue 
 
The return on the revenue account before tax amounted to £1.0 million (2020: £ 
0.9 million), similar to 2020 but a significantly lower level from prior years 
when higher levels of dividends from external investments were being received 
and the portfolio value was higher.  In 2021, a large majority of dividend 
income was received from our subsidiary companies in accordance with our 
strategy of realising gains when available on our principal US investments for 
later distribution as dividends. 
 
Gross revenues totalled £1.4 million (2020: £1.4 million). In addition, film 
income of £171,000 (2020: £84,000) and property unit trust income of £2,000 
(2020: £14,000) was received in our subsidiary companies. This reduction in 
property income reflected the sale of one of our investments during the year. 
In accordance with IFRS10, these income streams are not included within the 
revenue figures noted above. 
 
The total return before tax amounted to a profit of £1.2 million (2020: £1.0 
million profit), which comprised net revenue of £1.0 million, a realised loss 
of £0.8 million and an unrealised gain of £1.0 million. The revenue return per 
ordinary share was 2.7p (2020: 2.2p) on an undiluted basis and 2.9p (2020: 
2.6p) on a diluted basis. 
 
Net Assets and Performance 
 
Net assets at the year end were £6.7 million (2020: £6.7 million), unchanged 
after payment of £0.9 million in dividends to shareholders during the year. 
This compares to increases in the FTSE 100 and All Share indices of 14.3 
percent and 14.5 percent, respectively, over the period. On a total return 
basis, after adding back dividends paid during the year, our net assets 
increased by 18.3 percent compared to increases of 18.4 percent and 18.3 
percent in the FTSE 100 and All Share indices, respectively. 
 
During this second year of significant disruption due to the Covid pandemic, 
when markets rallied strongly from the substantial falls of the previous year, 
we were able to match these gains on a total return basis while also returning 
cash via dividends to shareholders at more than three times the market level of 
return. This was made possible by a second year of substantial gains in 
sterling terms (over 40 percent in 2021 and 60 percent in 2020) in one of our 
two largest US investments, Lineage Cell Therapeutics Inc (a combination of two 
previously held regenerative medicine stem cell companies, Biotime Inc and 
Asterias Biotherapeutics Inc).  This was despite losses of over 20 percent in 
the year in the value of our other large US investment, Geron Corporation. In 
addition, a periodic and independent revaluation of the feature films held in 
our subsidiary company, yielded a favourable upwards revaluation based on the 
strength and consistency of historic revenues and the buoyant market conditions 
in recent years for intellectual copyright content such as films and music. 
 
More generally, equity markets in the USA and UK continued to build strongly 
and consistently in the second half of 2021 on the recovery seen in the first 
half, as reported on at length at the interim stage. The highly successful 
global vaccination programme initiated at the beginning of the year allowed the 
social and corporate disruptions of the previous year gradually to be mitigated 
and markets and leading economy GDPs mostly regained their pre-Covid levels, 
which at the time had been at all time highs, at varying stages during the 
year. In addition, central banks kept interest rates at their historically low 
levels for longer than expected and only in recent months have begun what is 
likely to be an extended process of returning rates closer to more normal 
levels. 
 
The list of structural damage and disruption to economies and societies caused 
by the Covid pandemic is extremely long and widespread. It includes permanently 
lost production, substantially increased levels of government and private debt, 
increased fiscal deficits, higher taxes, significantly higher levels of 
inflation leading to severe cost of living pressures particularly related to 
energy prices, employment shortages, long-term disruption or alteration to 
supply lines, trade, travel, working practices and the creation of asset 
bubbles in sectors such as housing and natural resources. 
 
However, all consideration of these many problems has been recently and 
substantially overshadowed by Russia's invasion of Ukraine in February 2022, 
representing an unacceptable and unprovoked challenge to the global rules-based 
system which has been in place since the Second World War. The immediately 
resulting economic and humanitarian effects have already been substantial.  The 
unprecedentedly severe sanctions swiftly imposed by Western countries on Russia 
in response to limit and ultimately deter its illegal war of aggression will 
inevitably have substantial global consequences for a considerable period to 
come, whatever the final military outcome. This includes a major recalibration 
after many years of relative weakness in the West's defensive posture through 
NATO and a potential re-alignment of global alliances and operations giving 
rise to political, strategic, economic and social effects for years if not 
generations to come, even if a more wide-scale European conflict can be 
avoided. 
 
Dividend 
 
In 2021, dividends of 3.5 pence per ordinary share and 3.5 pence per preference 
share were paid as two interim payments during the year.  This represented an 
increase of 30 percent for ordinary shareholders over the previous year and a 
yield of approximately 11 percent on the ordinary share price averaged over a 
period of 12 months. 
 
It is our intention to pay further interim dividends this year as close as 
possible in amount and timing to the dividends paid in 2021, as and when the 
profitable sales of investments permit.  The position regarding these 
investments is set out in more detail in the Managing Director's report below. 
 
Board of Directors 
 
On 10th February 2022, we sadly announced the untimely death of Dominic 
Dreyfus, non-executive director since 1995 and chairman of the Audit Committee 

since its formation in 2001.   He had battled for some time with his illness 
and throughout continued to show the great sense of duty, commitment and 
professionalism which had marked his long and successful time on our board and 
as an exceptional chairman of our Audit Committee.  He will be greatly missed 
by the board and his other colleagues. 
 
On 27th April 2022, we were pleased to announce the appointment of Julia Le 
Blan as a non-executive director and chairman of the Audit Committee with 
effect from 1st June 2022. Julia is a chartered accountant and has worked in 
the financial services industry for over 30 years. She was formerly a partner 
at Deloitte with particular familiarity with the investment trust industry, 
having sat for two terms on the AIC's technical committee. Julia is currently a 
director of the Biotech Growth Trust plc and Aberforth Smaller Companies Trust 
plc. 
 
Recent events and outlook 
 
The long list of problems enumerated above which have piled up following two 
years of Covid pandemic would have provided uncertainty enough from an 
investment perspective, but now markets are faced with the first major war of 
aggression on the continent of Europe by a nuclear-armed superpower, seemingly 
intent on prosecuting its aims at no matter what cost to civilians, the world 
order, peace and indeed itself. 
 
Even at this early stage it is evident that very little will stay the same in 
terms of global relationships, trade and supply lines which have formed the 
engine of world growth over the last decades. Recent projections from the World 
Trade Organisation (WTO) and the IMF, for example, cut their estimates of world 
trade growth for the current year by between a third and a half due to the war 
and are forecasting a cut to world GDP of approximately 1 percent, representing 
a decline of over one quarter. And there is no reason to expect that such 
effect on world growth will be limited to the current year given the likely 
long term and widespread effects of the war on so many aspects of international 
behaviour and endeavour. 
 
Nevertheless, after a short and sharp reversal of up to 8 percent in February 
at the outbreak of the war, equity markets (except in Russia and in China for 
other reasons) resumed their steady climb by the end of the first quarter to 
regain their pre-Covid levels in the UK if not exactly so in the USA. The 
continued ultra-low interest rate regimes in developed countries and a newly 
adopted expectation that rates may not now be raised as high or as quickly as 
previously thought to combat the currently high levels of inflation because of 
the war has contributed to this persistent strength in the markets. 
 
Despite this seeming steadfastness in major markets in the face of these 
challenges, to say nothing of the fact that Covid continues to remain a strong 
and disruptive threat in many parts of the world, particularly in China, we 
cannot ignore these major challenges going forward and will continue to limit 
our activities and major focus to our US biopharma investments which do not 
tend to track general market movements and which we believe hold significant 
investment promise as they progress ever closer towards commercialisation of 
their ground-breaking and valuable technologies. 
 
As at 25 April 2022, our net assets had decreased to £6.0 million, a decrease 
of 10.8 percent since the beginning of the calendar year. This is equivalent to 
17.1 pence per share (prior charges deducted at fully diluted value) and 17.1 
pence per share on a diluted basis. Over the same period the FTSE 100 decreased 
0.1 percent, the All Share Index decreased 2.4 percent and NASDAQ decreased 
18.8 percent. 
 
David Seligman 
 
28 April 2022 
 
Managing Director's report 
 
At the interim stage, this report focussed on the likely after-effects of Covid 
in terms of financial, fiscal, production and growth prospects in the short to 
medium term.  Swollen government budget deficits and substantially increased 
debt levels when combined with rapidly increasing inflation and disruption to 
world trade and supply lines were in the process of creating a very unstable 
platform for a longer-term rebound in growth and prosperity. 
 
The financial and social costs of combating Covid were always going to have to 
be reckoned with at some stage but it had been expected, and markets had 
supported that expectation, that these costs could be handled in a manageable 
way over an extended period of time.  Central banks imagined that the immediate 
short- term consequences of considerably higher inflation could be handled 
through a gradual tightening of interest rates from their ultra-low levels and 
that the measured introduction of tax rises would address fiscal imbalances. 
While the major and much vaunted plans in the USA and UK for capital 
expenditure and 'levelling up' might have to wait a little, the judgement was 
that if well calibrated, these classic interventions would both cool down and 
rebalance the resurgent demand which was causing inflation, employment 
shortages, trade dislocations and assets bubbles without resulting in a return 
to recession. 
 
Up to the end of the year, this approach was generally seen as working, despite 
inflation threatening to move above the higher levels of 4 to 5 percent which 
had been expected.  Markets continued their steady recovery, as noted above, 
encouraged by the strong resumption of corporate activity in most sectors and 
the gradualist application of financial and fiscal measures.  The threat of 
inflation getting out of control and more stringent measures having to be taken 
was always there in the background but, when set against the historically low 
short-term and indeed long-term interest rate environment, the availability of 
cheap money continued to support the markets. 
 
All this changed, however, in the first quarter of 2022 with the wholly 
unexpected and unjustifiable invasion of Ukraine by Russia on 24th February and 
the unprecedentedly wide-ranging and united response by Western governments in 
terms of sanctions and the supply of weaponry and other support to Ukraine. All 
the best-laid financial and fiscal plans to return to post-Covid normality were 
immediately overturned as inflation moved even higher, to levels not seen for 
40 years in the USA and 30 years in the UK, on the back of rocketing energy, 
food and fertiliser prices adding to the effects of the already existing supply 
chain disruptions in products such as semi-conductors, processed metals, rare 
earth and other natural resources.  This has prompted renewed expectations of 
accelerated and higher interest rate rises and re-introduced significant 
volatility to financial markets. 
 
Consequently, any prior visibility into the near or medium term future which 
might have existed at the year-end quickly dissipated. Furthermore, with the 
war still in its early stages and already of a size, ferocity and brutality not 
seen in Europe since the Second World War, it is impossible to predict how much 
more and substantial damage this unnecessary and criminal action by Russia's 
terrorist regime will cause in the months to come to global security, society, 
growth, trade and markets, quite apart from the total upheaval which has 
already occurred in the decades-long international rules-based order. The 
world's previously progressive path towards globalisation, climate change 
reduction and nuclear weapons stability has now been put in real jeopardy. 
 
US Biotech Investments 
 
For some time now, the performance of our portfolio has been closely linked to 
the fortunes of our major investments in US biotech companies which by their 
nature are volatile.  2021 was no exception to this. 
 
Lineage Cell Therapeutics Inc ("LCTX") achieved a second year of substantial 
price growth in 2021 of 40 percent. At the year end, LCTX announced an 
important and transformative partnership with Roche and Genentech in respect of 
one of its regenerative medicine treatments for ocular disease, specifically 
Dry Eye Age-Related Macular Degeneration (AMD), a chronic disease resulting in 
blindness with no approved medications and currently in Phase 2 clinical 
trials.   Under this partnership, Roche/Genentech pay for the future 
development and trial costs of the treatment and LCTX receives an upfront 
payment of $50 million and a further up to $670 million of milestone payments 
together with a royalty share. 
 
Partnerships with big and leading pharma companies such as these are 
fundamental to and the principal goal of independent biotech companies such as 
LCTX. These partnerships provide not only funding for and confirmation of the 
value of their technologies but also, and sometimes most importantly, 
validation, influence and expertise in the further development, clinical trials 
and eventual commercialisation of these new technologies. 
 
These days, partnerships of this kind are typically struck at the Phase 2 or 
early Phase 3 clinical trial stages as the safety and efficacy of the 
treatments begin to be seen and when substantial funding starts to be required 
by the biotechs as the trials grow in size and complexity.  It is at this point 
of partnership that a substantial increase is seen in the biotech's share price 
and LCTX's share price moved up by almost 50 percent on the news, building on 
the significant rises already seen over the year.  It could, however, have been 
expected to rise considerably further given the size and prestige of the pharma 
companies involved in the partnership but surprisingly the price has in fact 
dropped in the months since to return to the levels of the beginning of 2021. 
 
In the patent absence of any bad news, it is believed that this was a 
market-inspired movement based on the rumour that the company would be seeking 
to raise additional funds on the back of its improved share price to fund its 
other lines of activity, even though no such fund raising was indicated by the 
company itself, the company had just received a substantial cash payment and no 

such fundraising has materialised in the four months since the price reversal. 
Comments on this sort of undeserved and contrary market movement have been made 
in this report in the past and are made again below in greater detail in 
respect of our other major biotech investment, Geron Corporation. 
 
Geron Corporation ("GERN"), languished in value in 2021, falling by 20 percent 
by the year end to a level recorded two years prior to that. This was despite 
having in 2021 commenced a second Phase 3 clinical trial in Myelofibrosis 
("MF") to add to its first Phase 3 trial in Myelodysplastic Syndrome ("MDS") 
now nearing completion, both being chronic haematologic cancer diseases with 
poor outcomes. In addition during the year, the company (i) published continued 
strong results in both of its trials which substantially out-performed current 
best available treatments in terms of efficacy and patient survival, (ii) 
announced an application for fast-track consideration and approval under the 
UK's new and more adaptable post-Brexit medicines licensing regime at the MRHA, 
(iii) announced further high calibre hirings from leading pharma companies, 
including its former partner Johnson and Johnson, in multiple departments 
including those related to clinical trials, product registration, corporate 
development and international marketing, indicating its confidence and that of 
the new appointments in the progress and eventual success of the trials and 
(iv) continued to maintain strong levels of cash to fund the ongoing and 
expanding trials. 
 
Nevertheless, Geron's share price has over this time disappointingly failed to 
match this significant progress to potential trial success and 
commercialisation. Comments have been made in this report a number of times in 
the past on the seeming dislocation between Geron's market value and the real 
world progress in its activities. Over the years, there have been a number of 
contrary trends and movements in the share price and in addition a history of 
well above average amounts of short trading activity and short positions being 
taken in this stock. As an example, a tumultuous and most abnormal one-day 
trading spike occurred on 18th June 2021 with a price rise of 60 percent and 
volume traded of 20 times normal following which the price returned to its 
prior level. No reason for this was given at the time and there has been no 
explanation since. 
 
Biotech companies generate little or no income in what can be long drawn out 
and multi-year development stages. The absence of income (which for normal 
trading companies provides a minimum level of share price support) together 
with the ongoing and growing need for funding to support that development, 
makes biotech and other early-stage development companies particularly prone to 
be the target of short selling traders and funds which can take valuable 
advantage of this inherent weakness and periodic vulnerability. 
 
To illustrate this, last month Geron unexpectedly announced a secondary share 
issue despite having previously confirmed the availability of a sufficient cash 
runway through to the completion of its first Phase 3 trial in MDS, scheduled 
for the first quarter of 2023. Geron's share price had shown significant and 
consistent weakness in the months prior to the announcement of this share 
issue, falling by 40 percent while the Nasdaq fell by 15 percent and the 
Biotech index fell by 20 percent. In the weeks prior to the share issue, the 
short position which had been relatively steady over the previous six months 
grew by almost 50 percent.  On 1st April 2022, Geron issued 53 million shares 
with warrants attached at an overall discount to the market price of over 20 
percent. However, on the following day and most unusually Geron's share price 
rose above the issue price by over 50 percent and in the following two weeks 
the short position fell by over 20 percent with this higher price level being 
sustained since the issue. Participants in the issue thus made an immediate 
return of 50 percent or approximately $30 million on their commitments, plus 
similar future profits on the warrants and any additional gains they may have 
realised on closing out any short position they may have held over the prior 
months during which Geron's share price declined by 40 percent by taking up the 
issue of new shares. 
 
While circumstantial, the above occurrences would nevertheless tend to support 
the widely held view that in the US market, a very lucrative and potentially 
unscrupulous strategy can be effected by the aggressive short selling of those 
stocks which are perceived to have a near-term funding need and then closing 
such positions through the new shares issued at a discount by the company. This 
sort of strategy effectively negates the positive developments built up over 
time by such companies which could otherwise have assisted the raising of new 
finance at a more realistic price level and preserved value for existing 
long-term shareholders (such as ourselves, for example) who see the underlying 
value in the company's assets, achievements and prospects. Practices of this 
kind can only do damage to companies seeking to develop new, useful and in the 
case of biotech much needed and potentially life-saving technologies and should 
be actively discouraged by the regulators. It would be relatively easy to 
prevent such damaging profiteering by, for example, prohibiting funds or 
traders from participating in a share issue of any company in which they or 
their clients hold a short position. 
 
As a pointed coda to this, a recently announced takeover of a biotech company 
very closely similar to Geron illustrates how, and perhaps because of the above 
described market activity, Geron's share price fails to capture even a small 
part of its future potential.  On 12th April 2022, the major British 
pharmaceutical company, GlaxoSmithKline, announced the takeover of Sierra 
Oncology for $1.9 billion.  Sierra's only product, Momelotinib, is a monoclonal 
antibody drug in just completed Phase 3 trials for the palliative symptom 
relief treatment of MF.  As noted above, Geron is in Phase 3 trials of its MF 
treatment, Imetelstat, which has actually and more powerfully demonstrated life 
extending and potentially disease modifying (curative) effects on MF in its 
trials.  The price paid for Sierra is based on estimated peak annual sales of 
$750 million. In their most recent quarterly results presentation this month, 
Geron's management estimated potential peak annual sales of £3 billion for its 
combined treatments of MF and the closely-related MDS diseases, both in Phase 3 
trials, with the MDS trial being less than 12 months behind Sierra's MF trial. 
On a comparable basis and without any discount for uncertainty, this would 
value Geron at $4.5 billion which is approximately 8 times its current market 
capitalisation.  It represents a share price of $11.50, which is considerably 
in excess of even the high end of the price target range of $4.00 to $7.00 
which leading industry brokers have maintained on Geron for some time and 
compares to a current share price of $1.50. 
 
The proper realisation by the market of the true potential and therefore value 
of our major US biotech investments plays a significant part in our own ongoing 
dividend distribution policy. Levels of income reserves available to us for 
distribution to shareholders have reduced in recent years following the Covid 
pandemic when overall market income returns diminished significantly. 
Additionally, the portfolio size on which we generate income is now much 
smaller following the high and above market levels of distributions made to 
shareholders over many years and the erratic capital performance of our US 
investments, as described above.  Going forward we have positioned ourselves to 
take advantage of the capital growth we expect in these investments to fund a 
major part of our future dividends. 
 
Film Library Valuation 
 
As noted in the Chairman's statement above, we have conducted a 5 year periodic 
review of the value of the revenue earning feature films owned by our group 
subsidiary company, including Oliver!, The Day of the Jackal and The Odessa 
File. 
 
This review has been based on an updated financial calculation of the 
discounted future estimated cash flows projected to be generated by the films 
over the full period of copyright (previously only for 10 years), adjusted for 
recent trends in revenue receipts and long-term interest rates. In addition, an 
independent valuation by an industry professional has been received, taking 
into account the nature of the rights held, the periods of copyright, the 
quality and long-term marketability of the films and current values achieved in 
the film distribution and media rights acquisition markets. 
 
As a result of this combined review, the valuation of the films has been 
increased by 170 percent to £2 million. 
 
Jonathan Woolf 
 
28 April 2022 
 
Income statement 
 
For the year ended 31 December 2021 
 
 
                               2021                       2020 
 
 
                                Revenue  Capital    Total  Revenue  Capital    Total 
                                 return   return            return   return 
 
                                  £ 000    £ 000    £ 000    £ 000    £ 000    £ 000 
 
Investment income (note 2)        1,439        -    1,439    1,372        -    1,372 
 
Holding gains on investments               1,028    1,028             1,388    1,388 
at fair value through profit          -                          - 
or loss 
 
Losses on disposal of 
investments at fair value             -    (585)    (585)        -    (960)    (960) 
through profit or loss* 
 
Foreign exchange gains/             (4)       22       18     (44)     (13)     (57) 
(losses) 
 
Expenses                          (422)    (243)    (665)    (400)    (242)    (642) 
 
                               ________ ________ ________ ________ ________ ________ 
 

Profit before finance costs       1,013  222        1,235      928  173        1,101 
and tax 
 
Finance costs                      (35)      (4)     (39)     (49)     (15)     (64) 
 
                               ________ ________ ________ ________ ________ ________ 
 
Profit before tax                   978      218    1,196      879      158    1,037 
 
Tax                                  36        -       36       29        -       29 
 
                               ________ ________ ________ ________ ________ ________ 
 
Profit for the year               1,014      218    1,232      908      158    1,066 
 
                               ________ ________ ________ ________ ________ ________ 
 
Earnings per share 
 
Basic - ordinary shares           2.66p    0.87p    3.53p    2.23p    0.63p    2.86p 
 
                               ________ ________ ________ ________ ________ ________ 
 
Diluted - ordinary shares         2.90p    0.62p    3.52p    2.59p    0.45p    3.04p 
 
                               ________ ________ ________ ________ ________ ________ 
 
The company does not have any income or expense that is not included in the 
profit/(loss) for the year. Accordingly, the '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 
Losses on sales of £270,000 (2020 - £613,000 losses) and Losses on provision 
for liabilities and charges of £315,000 (2020 - £347,000 losses). 
 
Statement of changes in equity 
 
For the year ended 31 December 2021 
 
                                           Share    Capital  Retained Total 
                                           capital  reserve  earnings 
 
 
                                              £ 000    £ 000    £ 000    £ 000 
 
Balance at 31 December 2019                  35,000 (28,606)      110    6,504 
 
Changes in equity for 2020 
 
Profit for the period                             -      158      908    1,066 
 
Ordinary dividend paid (note 4)                   -        -    (675)    (675) 
 
Preference dividend paid (note 4)                 -        -    (175)    (175) 
 
                                           ________ ________ ________ ________ 
 
Balance at 31 December 2020                  35,000 (28,448)      168    6,720 
 
Changes in equity for 2021 
 
Profit for the period                             -      218    1,014    1,232 
 
Ordinary dividend paid (note 4)                   -        -    (875)    (875) 
 
Preference dividend paid (note 4)                 -        -    (350)    (350) 
 
                                           ________ ________ ________ ________ 
 
Balance at 31 December 2021                  35,000 (28,230)     (43)    6,727 
 
                                           ________ ________ ________ ________ 
 
Registered number: 00433137 
 
Balance Sheet 
 
At 31 December 2021 
 
                                                     2021           2020 
 
                                                     £ 000          £ 000 
 
Non-current assets 
 
Investments - fair value through                              6,124          6,436 
profit or loss 
 
Subsidiaries - fair value through                             6,707          5,719 
profit or loss 
 
                                                         __________     __________ 
 
                                                             12,831         12,155 
 
Current assets 
 
Receivables                                                     535          1,605 
 
Cash and cash equivalents                                        83            394 
 
                                                         __________     __________ 
 
                                                                618          1,999 
 
                                                         __________     __________ 
 
Total assets                                                 13,449         14,154 
 
                                                         __________     __________ 
 
Current liabilities 
 
Trade and other payables                                      2,129          3,003 
 
Bank loan                                                       619            687 
 
                                                         __________     __________ 
 
                                                            (2,748)        (3,690) 
 
                                                         __________     __________ 
 
Total assets less current liabilities                        10,701         10,464 
 
                                                         __________     __________ 
 
Non - current liabilities                                   (3,974)        (3,744) 
 
                                                         __________     __________ 
 
Net assets                                                    6,727          6,720 
 
                                                         __________     __________ 
 
Equity attributable to equity holders 
 
Ordinary share capital                                       25,000         25,000 
 
Convertible preference share capital                         10,000         10,000 
 
Capital reserve                                            (28,230)       (28,448) 
 
Retained revenue earnings                                      (43)            168 
 
                                                         __________     __________ 
 
Total equity                                                  6,727          6,720 
 
                                                         __________     __________ 
 
Approved: 28 April 2022 
 
Cash flow statement 
 
For the year ended 31 December 2021 
 
                                                        Year ended  Year ended 
                                                              2021        2020 
 
                                                             £ 000       £ 000 
 
Cash flows from operating activities 
 
Profit before tax                                            1,196       1,037 
 
Adjustments for: 
 
Gains on investments                                         (443)       (428) 
 
Dividends in specie                                           (78)           - 
 
Proceeds on disposal of investments at fair                  1,708       2,619 
value through profit and loss 
 
Purchases of investments at fair value through             (1,610)     (2,415) 
profit and loss 
 
Finance costs                                                   39          64 
 
                                                        __________  __________ 
 
Operating cash flows before movements in working               812         877 
capital 
 
Decrease in receivables                                        551          34 
 
Decrease in payables                                         (549)       (192) 
 
                                                        __________  __________ 
 
Net cash from operating activities before                      814         719 
interest 
 
Interest paid                                                  (7)        (31) 
 
                                                        __________  __________ 
 
Net cash from operating activities                             807         688 
 
Cash flows from financing activities 
 
Dividends paid on ordinary shares                            (875)       (675) 
 
Dividends paid on preference shares                          (175)       (175) 
 
Bank loan                                                     (68)     (1,948) 
 
                                                        __________  __________ 
 
Net cash used in financing activities                      (1,118)     (2,798) 
 
                                                        __________  __________ 
 
Net decrease in cash and cash equivalents                    (311)     (2,110) 
 
Cash and cash equivalents at beginning of year 
                                                               394       2,504 
 
                                                        __________  __________ 
 
Cash and cash equivalents at end of year 
                                                                83         394 
 
                                                        __________  __________ 
 
Purchases and sales of investments are considered to be operating activities of 
the company, given its purpose, rather than investing activities. 
 
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 2021. The company has prepared its 
financial statements under IFRS. 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 2021 is an extract from the 
statutory accounts to that date. Statutory company accounts for 2020, which 
were prepared under IFRS as adopted by the EU, have been delivered to the 
registrar of companies and company statutory accounts for 2021, prepared under 
IFRS as adopted by the EU, will be delivered in due course. 
 
The auditors have reported on the 31 December 2021 year end accounts and their 
reports were 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 
 
 
                                                            2021       2020 
 
                                                       £ 000     £ 000 
 
Income from investments 
 
UK dividends                                                391        221 
 
Dividend from subsidiary                                    907      1,066 
 
                                                       _________  _________ 
 
                                                           1,298      1,287 
 
Other income                                                  71         85 
 
Other                                                         70          - 
 
                                                       _________ __________ 
 
Total income                                               1,439      1,372 
 
                                                       _________ __________ 
 
Total income comprises: 
 
Dividends                                                  1,298      1,287 
 
Other interest                                              141         85 
 
                                                       _________ __________ 
 
                                                           1,439      1,372 
 
                                                       _________ __________ 
 
Dividends from investments 
 
Listed investments                                          391        221 
 
Unlisted investments                                        907      1,066 
 
                                                       _________ __________ 
 
                                                          1,298      1,287 
 
                                                       _________ __________ 
 
Of the £1,298,000 (2020 - £1,287,000) dividends received, £204,000 (2020 - £ 
90,000) related to special and other dividends received from investee companies 
that were bought after the dividend announcement. There was a corresponding 
capital loss of £249,000 (2020 - £324,000), on these investments. 
 
Under IFRS 10 the income analysis is for the parent company only rather than 
that of the consolidated group. Thus film revenues of £171,000 (2020 - £84,000) 
received by the subsidiary British & American Films Limited and property unit 
trust income of £2,000 (2020 - £14,000) 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: 
 
 
           2021                             2020 
 
              Revenue    Capital      Total    Revenue    Capital      Total 
               return     return                return     return 
 
 
           £ 000      £ 000      £ 000      £ 000      £ 000      £ 000 
 
Earnings: 
 
Basic             664        218        882        558        158        716 
 
Preference 
dividend          350         -         350        350         -         350 
 
           __________ __________ __________ __________ __________ __________ 
 
Diluted         1,014        218      1,232        908        158      1,066 
 
           __________ __________ __________ __________ __________ __________ 
 
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 (2020: 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 (2020: 35 
million) ordinary and preference shares in issue. 
 
4 Dividends 
 
                                                   2021        2020 
 
                                                   £ 000       £ 000 
 
Amounts recognised as distributions to equity 
holders in the period 
 
Dividends on ordinary shares: 
 
Final dividend for the year ended 31 December 2020 
of 0.0p                                                      -           - 
(2019: 0.0p) per share 
 
First interim dividend for the year ended 31 
December 2021 of 2.7p                                      675         675 
(2020: 2.7p) per share 
 
Second interim dividend for the year ended 31 
December 2021 of 0.8p                                      200           - 
(2020: 0.0p) per share 
 
                                                    __________  __________ 
 
                                                           875         675 
 
                                                    __________  __________ 
 
Proposed final dividend for the year ended 31 
December 2021 of 0.0p (2020: 0.0p) per share                -           - 
 
                                                    __________  __________ 
 
Dividends on 3.5% cumulative convertible 
preference shares: 
 
Preference dividend for the 6 months ended 31 
December 2020 of 0.00p (2019: 0.00p) per share               -           - 
 
Preference dividend for the 6 months ended 30 June 
2021 of 1.75p (2020: 1.75p) per share                      175         175 
 
Preference dividend for the 6 months ended 31 
December 2021 of 1.75p (2020: 0.00p) per share            175           - 
 
                                                    __________  __________ 
 
                                                           350         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 
 
 
                                                          2021        2020 
 
                                                         £ 000       £ 000 
 
Dividends on ordinary shares: 
 
First interim dividend for the year ended 31 
December 2021 of 2.7p                                      675         675 
(2020: 2.7p) per share 
 
Second interim dividend for the year ended 31 
December 2021 of 0.8p                                      200           - 
(2020: 0.0p) per share 
 
Proposed final dividend for the year ended 31 
December 2021 of 0.0p (2020: 0.0p) per share                 -           - 
 
                                                    __________  __________ 
 
                                                           875         675 
 
                                                    __________  __________ 
 
Dividends on 3.5% cumulative convertible 
preference shares: 
 
Preference dividend for the year ended 31 December 
2021 of 1.75p (2020: 1.75p) per share                      175         175 
 
Preference dividend for the year ended 31 December 
2021 of 1.75p (2020: 0.00p) per share                      175           - 
 
                                                    __________  __________ 
 
                                                           350         175 
 
                                                    __________  __________ 
 
The non-payment in December 2019 and in December 2020 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 and for the year ended 31 December 2020, has 
resulted in arrears of £350,000 on the 3.5% cumulative convertible preference 
shares. 
 
1st interim dividend declared for the year ended 31 December 2021 of 2.7 pence 
per ordinary share was paid on 24 June 2021 to shareholders on the register at 
11 June 2021. A preference dividend of 1.75 pence was paid to preference 
shareholders on the same date. 
 
2nd interim dividend declared for the year ended 31 December 2021 of 0.8 pence 
per ordinary share was paid on 9 December 2021 to shareholders on the register 
at 12 November 2021. A preference dividend of 1.75 pence was payable to 
preference shareholders on the same date. 
 
The 2nd interim dividend declared and paid in the second half of 2021 was paid 
from available distributable reserves shown in the published interim accounts 
of 30 June 2021. 
 
5 Net asset values 
 
                                                                 Net asset 
                                                           value per share 
 
                                                      2021            2020 
 
Ordinary shares                                          £               £ 
 
Diluted                                               0.19            0.19 
 
Undiluted                                             0.19            0.19 
 
 
 
 
                                                      2021            2020 
 
                                                     £ 000           £ 000 
 
Total net assets                                     6,727           6,720 
 
Less convertible preference shares at              (1,922)         (1,920) 
fully diluted value 
 
                                                __________      __________ 
 
Net assets attributable to ordinary                  4,805           4,800 
shareholders 
 
                                                __________      __________ 
 
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 2021 Annual Report and Accounts, but remain 
unchanged from those published in the 2020 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 three 
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 the investment transactions to sell 
stock for £772,000 (2020 - £nil) to British & American Films Limited and for £ 
532,000 (2020 - £455,000) to BritAm Investments Limited. 
 
During the year the company entered into the investment transaction to purchase 
stock for £1,243,000 (2020 - £nil) from BritAm Investments Limited. 
 
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 (2020 - £35,000,000) being 
25,000,000 ordinary shares of £1 (2020 - 25,000,000) and 10,000,000 non-voting 
convertible preference shares of £1 each (2020 - 10,000,000). The rights 
attaching to the shares will be explained in more detail in the notes to the 
2021 Annual Report and Accounts, but remain unchanged from those published in 
the 2020 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 Tuesday 28 June 2022 
at 12.15pm at Wessex House, 1 Chesham Street, London SW1X 8ND. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

April 28, 2022 07:08 ET (11:08 GMT)