Augmentum Fintech Plc - Annual Financial Report and Proposed Share Issue

Augmentum Fintech Plc - Annual Financial Report and Proposed Share Issue

PR Newswire

London, June 13

14 June 2021

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, SINGAPORE, JAPAN OR ANY EEA STATE (OTHER THAN ANY MEMBER STATE OF THE EEA WHERE THE COMPANY'S SECURITIES MAY BE LEGALLY MARKETED) OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. PLEASE SEE THE SECTION ENTITLED "DISCLAIMER" TOWARDS THE END OF THIS ANNOUNCEMENT.

Augmentum Fintech plc

Annual Financial Report for the year ended 31 March 2021
and
Proposed share issuance programme, including an initial issue of new ordinary shares targeting at least £40 million at an expected price of 135.5p per ordinary share

Augmentum Fintech plc (LSE: AUGM) (the "Company" or "Augmentum"), the UK's only publicly listed investment company solely focused on the fintech sector, announces its audited Final Results for the year ended 31 March 2021.

Financial highlights

• NAV per share increased by 12.3% to 130.4p¹ (31 March 2020: 116.1p).
• Unrealised annualised IRR of 19% on invested capital (31 March 2020: 18%).
• Overall Net Asset Value increased 35% to £183.2 million (31 March 2020: £135.8 million²).
• Raised gross proceeds of £28.0 million through oversubscribed placing and retail offer in October 2020 (net proceeds £27.5 million).
• Unrealised gains of £26.7 million (2020: £12.7 million) across the portfolio.

Portfolio highlights

• £15.4 million³ total invested in two new businesses, ParaFi and Volt, and 11 existing portfolio companies (2020: £32.8 million invested in three new companies and seven existing portfolio companies).
• A further £15.5 million invested in two new companies (Cushon and Epsor) and four existing portfolio companies post year end.
• Total of £185.0 million⁴ equity raised by portfolio companies in the year (2020: £415 million).
• interactive investor completed its acquisition of Share plc in July 2020 and entered into agreement to acquire the direct-to-consumer book of Equiniti Financial Services in March 2021.
• Grover secured €60.0 million in Series B funding and delivered 2.5x year-on-year growth in annual subscription value during the year.
• Tide was awarded a further £25.0 million grant under the Banking Competition Remedies (BCR) grant scheme in September 2020 and grew market share of UK SME banking to 6%.
• Onfido completed a $100.0 million Series C fundraise in April 2020 and reported 82% year-on-year growth in annual recurring revenues 2019-2020.
• Dext (previously Receipt Bank) acquired Xavier, and post period end, the Company's stake in Dext was sold for £10.5 million to Hg Capital, realising a 30.5% gross internal rate of return.

Company Update

The Portfolio Manager continues to see a strong pipeline of investment opportunities, and as announced on 7 June 2021, the Company is considering the issue of new ordinary shares to fund additional investments with the aim of delivering further value for the Company's shareholders.

Alongside this, the Board and Portfolio Manager are recommending that the Company's investment policy be amended to remove the restriction on the Company making investments in seed stage businesses. The aggregate value of seed stage investments will represent no more than 1 per cent. of Net Asset Value at cost and it is the Portfolio Manager's current intention that initial investments into seed stage businesses will be relatively small in size, typically less than £100,000. Separately, to reflect the growth of the Company since IPO, the Board is proposing to reduce the amount of cash as a percentage of Gross Assets that the Company expects to hold at any given time (primarily for making follow-on investments) from 10-20% to 5-15%.

Accordingly, the Company is today publishing a circular to Shareholders containing a Notice of General Meeting (the "Circular") to seek approval of proposed changes to the Company's investment policy and seek Shareholder authority to issue new ordinary shares and/or C shares in connection with a proposed share issuance programme including an initial issue of new ordinary shares.

Any such initial issue is expected to be priced at an issue price of 135.5 pence per new ordinary share and target proceeds of at least £40 million. The issue price represents a premium of 3.9 per cent. to the NAV per ordinary share as at 31 March 2021 and a discount of 6.1 per cent. to the closing mid-price per ordinary share on 11 June 2021 of 144.25 pence per ordinary share (being the last business day prior to this announcement). Such a fundraise is expected to require the publication of a prospectus and further details will be announced in due course.

Neil England, Chairman of Augmentum Fintech plc commented:

"I am pleased to present our third set of positive annual results since the launch of Augmentum Fintech plc in 2018.

In what has been a challenging year for many businesses, the Company's diverse portfolio of investments have performed well, producing an increase in NAV per share of 12.3%. Fintech has been the beneficiary of a strong trend towards a digital economy, a trend which accelerated during the pandemic.

In October 2020 we raised net proceeds of £27.5 million through an oversubscribed placing and a retail offer. This has provided the necessary resources for our Portfolio Manager to continue to add new exciting fintech companies to the portfolio and to make further investments in existing portfolio companies.

Our share price has continued its strong recovery and appetite for the Company has been high, as demonstrated by our consistently high premium to NAV since late 2020.

After the year-end we made our first investment in France with Epsor, and also made our first disposal with the sale of Dext (previously Receiptbank).

Since the Company's half year report our share price has continued its strong recovery, continuing to rise to the end of the reporting period.

The European economy appears set to rebound and the digital economy within that is expected to grow fast. Augmentum, as the acknowledged specialist in early stage fintech is well placed to take advantage of this, with a strong pipeline of interesting opportunities."

Tim Levene, CEO of Augmentum Fintech Management Limited commented:

"Our strategy remains to back some of Europe's most exciting early and growth stage fintech businesses that are disrupting the traditional financial services industry.

Our clear focus during the year was to ensure our portfolio was well funded and supported during these unprecedented times. We have worked closely with the management teams in our portfolio companies to ensure they were well positioned to react quickly and effectively to changes in their respective markets. Our portfolio has performed well over the twelve months under review with many of our companies seeing record growth and successfully completing additional financing rounds.

Having witnessed the positive trading across the portfolio, and having completed our successful placing and retail offer in October, we returned to focus on investing in new and exciting opportunities. By the end of the reporting period we had invested a net total of £14.3 million across two new and 11 existing companies.

We continue to seek out opportunities ahead of popular adoption of new technologies to the fintech mainstream, and this positions Augmentum competitively at a time when more global institutional investors than ever before are seeking to access European fintech. This has led to valuation inflation in parts of the sector, but we continue to remain price disciplined and theses driven, even if that means being contrarian at times.

We believe that the trend to digital adoption will continue to gather pace and are excited at the varied pipeline of opportunities and relationships currently available to us."

Notes

¹ This is considered to be an Alternative Performance Measure. The financial statements in the Annual Report set out the required statutory reporting measures of the Company's financial performance. In addition, the Board assesses the Company's performance against a range of criteria which are viewed as particularly relevant for investment trusts, which are summarised in the key performance indicators in the Annual Report. Definitions of the terms used are set out in the Annual Report.

² Includes net proceeds of £27.5 million from equity issuance in Q4 2020 (+20% contribution to uplift) and return for the year (+15% contribution to uplift).

³ Net investments of £14.3 million.

⁴ Source: Crunchbase and Augmentum Fintech Management Limited.

Augmentum Fintech Tim Levene, Portfolio Manager Nigel Szembel, Investor Relations	[phone] [phone] [e-mail]
Peel Hunt LLP Liz Yong, Luke Simpson, Huw Jeremy, Tom Pocock (Investment Banking)	[phone]
Nplus1 Singer Advisory LLP Harry Gooden, Robert Peel, James Moat (Investment Banking)	[phone]
Frostrow Capital LLP Paul Griggs, Company Secretary	[phone]

About Augmentum

Augmentum invests in fast growing fintech businesses that are disrupting the financial services sector. Augmentum is the UK's only publicly listed investment company focusing on the fintech sector in the UK and wider Europe, having launched on the main market of the London Stock Exchange in 2018, giving businesses access to patient capital and support, unrestricted by conventional fund timelines and giving public markets investors access to a largely privately held investment sector during its main period of growth.

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Annual Report and Financial Statements

CHAIRMAN'S STATEMENT

Financial Highlights

	31 March 2021	31 March 2020
NAV per Share	130.4p	116.1p
NAV per Share Total Return*	12.3%	5.9%
Total Shareholder Return*	128.8%	(41.6%)
Ongoing Charges Ratio*	1.9%	2.1%

* These are considered to be Alternative Performance Measures. Please see the Glossary and Alternative Performance Measures on page 78.

To read more about our KPIs see pages 20 and 21.

I am pleased to present our third annual report since the launch of the Company in March 2018. This report covers the year ended 31 March 2021.

Investment Policy

Your Company invests in early stage European fintech businesses which have disruptive technologies and offer the prospect of high growth with scalable opportunities, a policy consistent with our objective to provide long term capital growth to shareholders.

Performance

In what has been a challenging year for many businesses, I am pleased to report that your Company's diverse portfolio of investments have performed well with an increase in the Company's NAV* per share of 12.3%.

The trend towards a digital economy has accelerated during the pandemic and our portfolio companies have generally been beneficiaries of this. By way of example: Tide, Farewill, interactive investor and Grover have all expanded rapidly, enjoying customer numbers and revenue growth ahead of expectations.

There is a full review of the portfolio and investment transactions in the year in the Portfolio Manager's Review beginning on page 14.

Portfolio Changes

Given the uncertainty caused by the pandemic, we took a cautious approach to cash deployment in the first half of the year under review to ensure we would be in a position to support the existing portfolio. In the event, the need for support was minimal. We made net investments of £14.3 million during the year, a mix of two new and eleven follow-on to support existing portfolio growth.

After the year end, we added two new investments, the first in Epsor, a French workplace savings platform with international potential, followed by Cushon, a workplace pensions and payroll-linked ISA provider with more than 200,000 members across 8,000 UK employers. We also made our first disposal with the sale of Dext (previously Receiptbank) realising a 30.5% IRR* over an investment period of just 15 months. The proceeds from the sale will be reinvested in opportunities over the coming year.

Valuations

Together with our advisors, we have carefully reviewed both the status and the forecasts of the portfolio companies. We have used a variety of methodologies to determine the value of each investment and to sense check our conclusions. The outcome of this is reflected in the valuations in this report. The Portfolio Manager will, where possible, structure investments to afford downside protection* through mechanisms such as a liquidation preference and/or anti-dilution provisions.

Articles of Association

In case we should face restrictions on public gatherings similar to those imposed by the UK Government last year, we have reviewed the Company's Articles of Association to enable us to hold general meetings remotely, or in a hybrid format, should the need arise. Pursuant to this, a resolution to adopt amended Articles is included in the Notice of the Annual General Meeting ("AGM") for approval by shareholders.

Dividend

No dividend has been declared or recommended for the year. Your Company is focused on providing capital growth and has a policy to only pay dividends to the extent that it is necessary to do so in order to maintain the Company's investment trust status.

Share Capital and Share Premium

Shareholders will recall that at the onset of pandemic concerns early in 2020 markets were substantially down and the Company's share price was adversely affected, falling as low as 57.5p per share shortly before the last year end. The price during that first lockdown period represented a substantial discount to the underlying NAV. The Company took advantage of this to buy back 195,000 shares into treasury in March and April 2020 at an average discount of 47.6% to the 31 March 2020 NAV per share, benefitting the NAV per share of remaining shareholders. As I reported in my half year statement, the share price recovered strongly thereafter and indeed has continued to rise to the date of this report.

In November 2020, we raised £27.5 million of new capital, net of costs. In December, we sold, at a premium, the 195,000 shares held in treasury for £0.2m, slightly more than double the cost of the associated buy-backs.

At 31 March 2021, the share price stood at 159.0p per share, which represented a premium of 21.9% to the year-end NAV per share of 130.4p. This substantial premium to NAV reflects heightened interest in the fintech sector and a view that the Company's portfolio has significant potential for further growth.

Circular to Shareholders

Augmentum is the only London listed fintech specialist and given the demand for our shares and the strong pipeline of investment opportunities that the team has access to, we are seeking to raise further capital this year. To this end a circular will be sent to shareholders on or around the date this annual report is published seeking approval to issue new ordinary shares. We aim to build your Company to a scale that enhances its attractiveness to institutional investors and benefits all shareholders by diluting fixed costs. The circular will also include a resolution to adjust the investment policy as outlined below. As set out in the circular, a General Meeting is being convened on 8 July 2021, at which the resolutions included therein will be put to shareholders. Details of how shareholders may vote at the General Meeting will be set out in the circular. The Board recommends that shareholders vote in favour of the resolutions, as they intend to do in respect of their own shares.

Investment Policy Change

As the fintech sector evolves and the scale of the market opportunity becomes more apparent, an increasing volume of investment capital is drawn to the sector. As a result, competition to access some of the most attractive businesses is increasing. One way to get a foot in the door at the Series A or sometimes later rounds is to be an existing seed stage investor. However, at this early seed stage, companies tend to be financed at a local level.

The Portfolio Manager has therefore recommended the launch of a "Scout Programme" which will engage a group of individuals who are embedded within the seed stage ecosystem throughout Europe to act as introducers to earlier stage opportunities than those in which the Company would usually to invest. These may well be in locations where the Portfolio Manager does not have a permanent physical presence.

This strategy will require the Company's investment policy to be amended to allow seed stage investment.

As businesses at this seed stage are inherently more risky aggregate investment in companies still at the seed stage will not exceed 1 per cent. of the Company's NAV at the time of investment and, if shareholders approve the policy change, this limit will be incorporated into the investment policy. It is expected that initial investments into seed stage businesses introduced through the Scout Programme will be relatively small in size, typically less than £100,000 each.

Separately, to reflect the growth of the Company since its launch, guidance as to the amount of cash as a percentage of Gross Assets that the Company expects to hold at any given time (primarily for making follow-on investments) is reduced from 10-20% to 5-15%.

These changes to the Company's investment policy require the approval of shareholders.

Board

The Board's main role is to promote the success of the Company in the best interest of all stakeholders. It seeks, individually and collectively, to act with independence, diligence and integrity to produce high standards of governance and to provide support and constructive challenge to the Portfolio Manager.

To perform this role effectively the Board needs to be adequately resourced. Our recent review of Board performance concluded that we need to supplement our three person team to reflect the workload created by the Board, its four committees and the Company's regular fund raising events. Over the course of the next year, we intend to add one or two new Directors with a passion for fintech who can also bring new skills and experience and a different perspective to our discussions.

AGM

The third AGM of the Company will be held on Tuesday, 21 September 2021 at 11.00 a.m. It is hoped to hold this year's AGM in a normal format, at the offices of Frostrow Capital LLP, 25 Southampton Buildings, London WC2A 1AL. However, it is possible that the UK Government will continue to mandate restrictions on public gatherings. In either case, the Board strongly encourages all shareholders to register their votes in advance by voting online using the Registrar's portal, www.signalshares.com or, if they are not held directly, by instructing the nominee company through which you hold your shares.

The Notice of the AGM is being published as a separate document and will be sent to shareholders with the Annual Report. Both documents will also be available to view on or download from the Company's website at www.augmentum.vc. Updates on any restrictions to admittance to the Meeting will be published on the website.

The Directors consider that all the resolutions listed are in the best interests of the Company and its shareholders and recommend a vote in favour of each, as the Directors intend to do in respect of their own holdings.

Outlook

The recovery from the lows of last spring has continued and the European economy appears set to rebound in the coming year, driven by increases to consumer spending from a position of record personal savings.

Along with this, your Directors expect the recent strong growth of the digital economy to continue. As the acknowledged specialist in early stage fintech, Augmentum should benefit from that. Your Company's well regarded team continue to see the vast bulk of the opportunities in the sector and it is expected this will provide a number of compelling new investment opportunities. This should enable the Company to effectively deploy capital over the coming months.

We may also have an opportunity to realise value from one or two of the more mature investments this year. This capital will increase the resources available to focus on earlier stage fintech businesses with higher growth potential.

Your Directors and the Portfolio Manager have confidence in the Augmentum model as evidenced by their own shareholdings and are positive about the near and long term prospects for the Company.

NeilEngland

Chairman

11 June 2021

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PORTFOLIO MANAGER'S REVIEW

Overview

The period since our last review has been a time of radical change as governments, societies and businesses around the world have grappled with the challenges of the COVID-19 pandemic. Wholesale disruption to daily life has driven long term changes to customer behaviour, and businesses have needed to adapt in order to survive.

Fintech has been a major growth driver for European venture capital, with its share of total European venture capital deployment increasing from 13% to 22% in the 5 years to 2020. This is the premise on which Augmentum was built. The disruption caused by the pandemic has significantly accelerated this growth. Businesses have been forced to evaluate old ways of thinking, inefficient processes have been exposed, and new innovation opportunities have been identified. In response large swathes of capital have come into the market to meet new opportunities, partly through the schemes ushered in by government to address the pandemic, and partly as private sector investors have recognised the opportunities at hand.

A number of sectors within Fintech have become mainstream, while other emerging technologies such as open banking and digital currencies have enjoyed significant momentum. Broadening institutional interest in the digital assets space suggests that the asset class has crossed the point of no return, despite ongoing price volatility. The industry is now attracting attention from regulators and central banks and opportunities are arising both in the emerging infrastructure necessary to handle the assets, and the new applications a fully digital store of value can enable.

Exits

Shortly after the year end, in April, we announced the first exit from the Augmentum portfolio when Dext was acquired by Hg Capital. Whilst this was earlier than we had planned, the transaction returns £10.5 million to the Augmentum portfolio, realising a 40% uplift and an IRR of 30.5% on an investment made as recently as January 2020.

Investments

The year ended 31 March 2021 has been a period of transition. Having ensured portfolio liquidity throughout 2020 and completed our placing and retail offer in late October, our focus has once again been on growing the portfolio. Over the full reporting period we deployed a net total of £14.3 million of capital across thirteen companies, two of which were new additions to the portfolio. Additionally, since the year end we have invested a further £15.4 million in two new companies and four existing portfolio companies.

New Investments

In December we welcomed VOLT to the portfolio. VOLT is a leading provider of account-to-account payments orchestration for international merchants and payment service providers. Broadly, this means they are providing resilient payment networks using open banking 'rails' as an alternative to traditional card 'rails'. The company is operating in a nascent and rapidly growing market, driving our decision to engage at an earlier stage than we typically would. The investment was structured as a convertible loan note. This converted into equity in the company's funding round which closed in June 2021 and in which we invested a further £4 million.

Our aim at Augmentum is to invest ahead of popular adoption of mainstream technologies in fintech, and we are fortunate to benefit from wide experience amongst our advisory and broader networks. During the latter half of 2020 we invested time to understand the opportunities in DeFi (Decentralised Finance); an ecosystem of applications and protocols built on blockchains, primarily Ethereum, which support smart contracts. DeFi provides many of the same services as classical finance, namely borrowing, lending, and saving, but in an autonomous and decentralised manner. The segment is entirely nascent and therefore requires deep knowledge and a portfolio of investments to diversify individual risk. In January, we invested in Parafi Capital, a US managed fund of DeFi investments, with an initial investment totalling US$3.9 million. This relationship is already bearing fruit in terms of new deal flow and opportunities.

Since the year end we closed a €2.5 million new investment into the French company Epsor in a competitive €20 million financing round. Epsor have developed a next generation workplace savings platform in France, providing facilities for both pension contributions and a French specific tax advantaged bonus savings scheme. The market is poorly served by a range of legacy providers who have failed to adapt to the digital age, providing Epsor with an opportunity to build a large wealth management proposition in France and adjacent international territories.

In addition, we led Cushon's Series A fundraising round of £26 million with an investment of £5 million. Cushon are targetting a parallel workplace savings opportunity to Epsor but with focus on the UK market. Distributed through employers, the company provides integrated pensions and payroll-linked ISAs to employees, with a strong focus on the quality of user experience which is delivered through the Cushon app and desktop portal. As of April 2021, Cushon is authorised by The Pensions Regulator as a Master Trust following their acquisition of the Salvus Master Trust. Industry dynamics in the Master Trust space are geared towards further consolidation, which the company will look to leverage as it scales.

The Existing Portfolio

Over the reporting period we have been particularly focused on the existing portfolio, ensuring the companies in it had sufficient runway at the start of the pandemic as well as supporting growth rounds for those that have seen accelerated growth. Over the year we invested a net total of £10.9 million across the existing portfolio.

In July we supported Farewill's £20 million Series B round with an investment of £2.6 million. 2020 proved to be a breakout year for Farewill who delivered year-on-year revenue growth of over 524%. The company continues to drive innovation and digitisation across the fragmented, inefficient and expensive wills, probate and funerals markets.

Tide had a successful 2020 despite the pandemic, emerging with 6% market penetration and over 400,000 members. Tide is now the joint first SME challenger bank, with only the incumbent Big 5 banks serving more SMEs in the UK. Recognising this growth and the opportunity available to the business, we agreed in January to contribute £2 million as part of an advanced subscription agreement that will convert into the company's next financing round.

In February we took the opportunity to increase our stake in Interactive Investor (ii) in a small secondary transaction. 2020 was a record year for new client acquisition with the company adding 170% more new customers and 150% more assets than it did in the prior year, bringing Assets Under Management to over £38 billion and total customers to more than 400,000. Continued strong trading volumes and foreign exchange revenues combined to deliver 46% year-on-year growth in revenues in 2020, 25% ahead of budget. The company remains focused on growth and the completion of a number of strategic projects is already well underway.

Following the receipt of a full banking licence from the Prudential Regulation Authority in June last year, we supported Zopa's £20 million fundraising round in March. Zopa Bank is now fully launched, making them the only truly multi-product neo-bank serving personal loans, auto finance and credit cards funded through fixed term savings and P2P investments. These new product categories have seen an encouraging early trajectory, booking over 30,000 credit card customers and raising over £180 million in fixed-term deposits. The business is on the threshold of profitability and looks set to break even by the end of 2021.

Grover completed its Series B funding round in March, raising €60 million to further develop the rental platform and expand into new geographies. We added a further €2 million in the round and converted our existing €7 million convertible loan note at a 1.8 times uplift to our investment cost (part of this uplift was captured in our September 2020 valuation). Grover enjoyed another year of excellent performance in the period delivering 2.5 times year-on-year growth in annual subscription value to over €70 million as of March 2021.

Habito launched its first residential lending product in March, Habito One - the UK's first long-term (40 year) fixed rate mortgage. The offering has no early repayment charges or exit fees, enabling customers to safeguard against future interest rate rises, while maintaining "flexibility and freedom" over their home finances. It provides compelling differentiation versus other products available in the market.

Onfido continues to build on the foundation it laid in its US$100 million financing round completed in April 2020. Their combination of technology, talent and capital has enabled them to harness new opportunities arising from the pandemic, which saw enterprises across many industries accelerate digital transformation projects which in turn drove demand for digital identity verification services. The company delivered 82% year-on-year growth in annual recurring revenues in 2020 with a doubling of sales in the US, one of the company's fastest growing regions, and the addition of 320 new clients in the year. In November Founder/CEO Hussayn Kassai stepped aside for new CEO Mike Tuchen, an experienced US enterprise software executive with a track record of scaling software businesses globally.

Monese was quick to respond to the impact of the pandemic on trading, adjusting focus towards improving unit economics and reducing the cost base. The business continues to develop its technology platform and product, which is now available in 31 countries across Europe. In October 2020, Monese and Mastercard announced a multi-year strategic partnership, with Monese now operating as a principal Mastercard issuer. During the period and post-year end Augmentum has supported Monese with £2.1 million of follow-on investment alongside co-investors PayPal and Kinnevik.

In the face of market uncertainty and low interest rates BullionVault delivered an exceptional year as private investors moved capital into precious metals and the gold price touched record levels. Pre-tax profits for its financial year ended October 2020 grew 99% year-on-year and the business recorded an increase of 115% in new user registrations. The company is now very well established and as market conditions have stabilised has continued to trade well, albeit at lower volumes than those seen across 2020. In September 2020, WhiskyInvestDirect was spun out of BullionVault to become a standalone company and we now hold our investment in it directly.

Operating as an SME lender across the UK and Germany, iWoca's market and target customer group were impacted by the pandemic. New loan originations and the existing loan book were challenged as the pandemic took hold and the roll out of significant Government support funding distorted the lending market further. iWoca proved nimble in response to the unprecedented situation and secured accreditation from the British Business Bank for distribution of the Coronavirus Business Interruption Loan Scheme through which the business has now distributed over £300 million of capital. As economies emerge from the pandemic and Government support measures reduce, we expect iWoca to see a return in demand for its core loan products. The business is well capitalised having raised further capital in July 2020 which Augmentum supported.

Fund Performance

Performance of the portfolio has benefitted from an acceleration of the trend to digital. For the year to 31 March 2021, we are reporting gains on investments of £26.7 million (2020: £12.6 million). Since IPO this represents an IRR of 19.0% on the capital that we have deployed.

Outlook

Fintech is coming of age with multiple multi-billion pound fintechs now established across Europe. Dealflow is at record levels, but so too is the appetite to fulfil them. Given the opportunity at hand, private venture rounds in fintechs are getting both larger and earlier in a company's maturity profile. The competition to participate in these rounds has also increased as new investors are increasingly recognising the size of the opportunity and this is being reflected at the margin in the pricing of deals. We have remained disciplined and have stepped away from opportunities we judged to be over-priced.

Our task at Augmentum is to continue to navigate this evolving investment landscape as we have done to date. Our portfolio is well placed to benefit from this new wave of interest, deploying at the point of maximum opportunity, and we remain focused on ensuring they execute to their potential. We invest in exceptional companies where we have high conviction and where we see significant potential returns. We anticipate that over the coming 12 months we will see opportunities for M&A and exits within the portfolio, and opportunities for investment in new assets across the maturity profile. With our platform, our reach, our network and our capabilities we are well positioned for this next phase of growth.

Tim Levene CEO

Augmentum Fintech Management Ltd

11 June 2021

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INVESTMENT OBJECTIVE AND POLICY

Investment objective

The Company's investment objective is to generate capital growth over the long term through investment in a focused portfolio of fast growing and/or high potential private financial services technology ("fintech") businesses based predominantly in the UK and wider Europe.

Investment policy

In order to achieve its investment objective, the Company invests in early^ or later stage investments in unquoted fintech businesses. The Company intends to realise value through exiting these investments over time.

The Company seeks exposure to early stage businesses which are high growth, with scalable opportunities, and have disruptive technologies in the banking, insurance and wealth and asset management sectors as well as those that provide services to underpin the financial sector and other cross-industry propositions.

Investments are expected to be mainly in the form of equity and equity-related instruments issued by portfolio companies, although investments may be made by way of convertible debt instruments. The Company intends to invest in unquoted companies and will ensure that the Company has suitable investor protection rights where appropriate. The Company may also invest in partnerships, limited liability partnerships and other legal forms of entity. The Company will not invest in publicly traded companies. However, portfolio companies may seek initial public offerings from time to time, in which case the Company may continue to hold such investments without restriction.

The Company may acquire investments directly or by way of holdings in special purpose vehicles or intermediate holding entities (such as the Partnership*).

The Management Team has historically taken a board or board observer position on investee companies and, where in the best interests of the Company, will do so in relation to future investee companies.

The Company's portfolio is expected to be diversified across a number of geographical areas predominantly within the UK and wider Europe, and the Company will at all times invest and manage the portfolio in a manner consistent with spreading investment risk.

The Management Team will actively manage the portfolio to maximise returns, including helping to scale the team, refining and driving key performance indicators, stimulating growth, and positively influencing future financing and exits.

Investment restrictions

The Company will invest and manage its assets with the object of spreading risk through the following investment restrictions:

• the value of no single investment (including related investments in group entities or related parties) will represent more than 15 per cent. of Net Asset Value;
• the aggregate value of seed stage investments will represent no more than 1 per cent. of Net Asset Value^; and
• at least 80 per cent. of Net Asset Value will be invested in businesses which are headquartered in or have their main centre of business in the UK or wider Europe.

In addition, the Company will itself not invest more than 15 per cent. of its gross assets in other investment companies or investment trusts which are listed on the Official List of the FCA.

Each of the restrictions above will be calculated at the time of investment and disregard the effect of the receipt of rights, bonuses, benefits in the nature of capital or by reason of any other action affecting every holder of that investment. The Company will not be required to dispose of any investment or to rebalance the portfolio as a result of a change in the respective valuations of its assets.

Hedging and derivatives

Save for investments made using equity-related instruments as described above, the Company will not employ derivatives of any kind for investment purposes. Derivatives may be used for currency hedging purposes.

Borrowing policy

The Company may, from time to time, use borrowings to manage its working capital requirements but shall not borrow for investment purposes. Borrowings will not exceed 10 per cent. of the Company's Net Asset Value, calculated at the time of borrowing.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds and tradeable debt securities.

There is no restriction on the amount of cash or cash equivalent investments that the Company may hold or where it is held. The Board has agreed prudent cash management guidelines with the AIFM to ensure an appropriate risk/return profile is maintained. Cash and cash equivalents are held with approved counterparties, and in line with prudent cash management guidelines, agreed with the Board, AIFM and Portfolio Manager.

It is expected that the Company will hold between 5 and 15 per cent. of its Gross Assets in cash or cash equivalent investments^, for the purpose of making follow-on investments in accordance with the Company's investment policy and to manage the working capital requirements of the Company.

Changes to the investment policy

No material change will be made to the investment policy without the approval of Shareholders by ordinary resolution. Non-material changes to the investment policy may be approved by the Board. In the event of a breach of the investment policy set out above and the investment and gearing restrictions set out therein, the Management Team shall inform the AIFM and the Board upon becoming aware of the same and if the AIFM and/or the Board considers the breach to be material, notification will be made to a Regulatory Information Service.

^ As mentioned in the Chairman's Statement the policy has been amended to incorporate changes being put to shareholders at a General Meeting convened for 8 July 2021 to permit limited seed stage investment and to amend the cash management guidelines. Should the amendments not be approved by shareholders the policy will revert to proscribing seed stage investment and the associated limit will be deleted.

* Please refer to the Glossary on page 78.

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PORTFOLIO REVIEW

	Fair value of holding at 31 March 2020 £'000	Net investments/ (realisations) £'000	Investment return £'000	Fair value of holding at 31 March 2021 £'000	% of portfolio
Interactive Investor^	21,807	667	10,157	32,631	19.9%
Tide	14,221	2,000	2,741	18,962	11.6%
Onfido	10,867	-	3,984	14,851	9.0%
Grover	6,267	2,631	4,039	12,937	7.9%
BullionVault^	11,191	(1,068)*	1,342	11,465	7.0%
Farewill	7,216	2,572	803	10,591	6.5%
Dext (formerly Receipt Bank)	7,500	-	3,036	10,536	6.4%
Monese	10,159	1,000	(818)	10,341	6.3%
Zopa^	7,930	1,173	398	9,501	5.8%
Iwoca	7,600	252	119	7,971	4.9%
Top 10 Investments	104,758	9,227	25,801	139,786	85.3%
Other Investments**	18,374	5,041	926	24,341	14.7%
Total Investments	123,132	14,268	26,727	164,127	100.0%

^ Held via Augmentum I LP

* During the year WhiskyInvestDirect was spun out of BullionVault, when its valuation was £446,000, and is now held directly by Augmentum I LP. In addition, £622,000 of dividends were received from BullionVault during the year.

** There are ten other investments (31 March 2020: seven) including WhiskyInvestDirect at its current fair value of £545,000. See pages 12 and 13 for further details.

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KEY INVESTMENTS

interactive investor is the No.1 UK direct-to-consumer fixed fee investment platform, with over £45 billion of assets under administration and over 350,000 customers across its general trading, ISA and SIPP account. It accounts for a fifth of UK retail equity trading. The company offers execution-only trading and investing services in shares, funds, ETFs and investment trusts, all for a market-leading monthly subscription fee.

interactive investor completed a £40 million acquisition of Alliance Trust Savings in 2019, bringing together the two largest UK fixed price platforms, and in 2020 completed the acquisition of Share plc. In March 2021 interactive investor announced the acquisition of D2C investment platform Equinti for £48.5m, which is expected to increase its assets under administration to £50 billion and customers to 400,000.

Source: ii	31 March 2021 £'000	31 March 2020 £'000
Cost:	3,843	3,175
Value:	32,631	21,807
% ownership (fully diluted)	3.8%	3.7%

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2018 £'000
Turnover	90,170	72,956
Pre tax profit	13,933	8,925
Net assets	128,005	116,624

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Tide's mission is to help SMEs save time and money in the running of their businesses. Customers are set up with an account number and sort code in as little as 5 minutes, and the company is building a comprehensive suite of digital banking services for businesses, including automated accounting, instant access to credit, card control and quick, mobile invoicing. Tide has passed 5% market share of business accounts in the UK, a key milestone in the business's growth, serving over 320,000 SMEs.

In September 2019 Augmentum led Tide's £44.1m first round of Series B funding, alongside Japanese investment firm The SBI Group. Tide appointed Sir Donald Brydon as its first independent Non-Executive Chair in September 2020; Sir Donald brings extensive experience to the Board, previously chairing the London Stock Exchange, the Royal Mail and Sage. In the same month Tide also won a second major BCR grant in partnership with ClearBank.

Source: Tide	31 March 2021 £'000	31 March 2020 £'000
Cost:	11,000	9,261
Value:	18,962	14,221
% ownership (fully diluted)*:	5.9%	5.9%

* £2.5m (2020: nil) is in a convertible loan note.

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2018 £'000
Turnover	4,860	1,858
Pre tax loss	(20,821)	(9,558)
Net assets	26,021	1,595

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Onfido is building the new identity standard for the internet. Its AI-based technology assesses whether a user's government-issued ID is genuine or fraudulent, and then compares it against their facial biometrics. Using computer vision and a number of other AI technologies, Onfido can verify against 4,500 different types of identity documents across 195 countries, using techniques like "facial liveness'' to see patterns invisible to the human eye.

Onfido was founded in 2012 and has offices in London, San Francisco, New York, Lisbon, Paris, New Delhi and Singapore. The company has attracted over 1,500 customers in 60 countries worldwide, including industry leaders such as Remitly, Bitstamp and Revolut. These customers are choosing Onfido over others because of its ability to scale, speed in on-boarding new customers (15 seconds for flash verification), preventing fraud, and its advanced biometric technology.

In November 2020 Onfido appointed Mike Tuchen as CEO, a highly experienced executive with a track record of scaling software businesses globally.

Augmentum invested an additional £3.7 million in a convertible loan note in December 2019 as part of a £4.7 million round. This converted into equity when Onfido raised an additional £64.7 million in April 2020.

Source: Onfido	31 March 2021 £'000	31 March 2020 £'000
Cost:	7,750	7,750
Value:	14,851	10,867
% ownership (fully diluted)*:	2.6%	1.7%*

* 2020: £5.7m of investment was in a convertible loan note.

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2018 £'000
Turnover	27,561	18,591
Pre tax loss	(26,488)	(17,265)
Net (liabilities)/assets	(9,494)	13,576

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Grover brings the access economy to the consumer electronics market by offering a simple, monthly subscription model for technology products. Private and business customers have access to over 2,000 products including smartphones, laptops, virtual reality technology and wearables. The Grover service allows users to keep, switch, buy, or return products depending on their individual needs. The company has over 800,000 users and surpassed €50 million in Annual Recurring Revenue in 2020.

In September 2019 Augmentum led a €11 million funding round with a €6 million convertible loan note ("CLN") investment. This coincided with Grover signing a new €30 million debt facility with Varengold Bank, one of Germany's major fintech banking partners. In March 2021 Grover completed a €60 million Series B funding round, with Augmentum participating and converting its CLN. The round was made up of €45 million from equity investors and €15 million in venture debt financing.

Source: Grover	31 March 2021 £'000	31 March 2020 £'000
Cost:	7,978	5,347
Value:	12,937	6,267
% ownership (fully diluted)*:	8.3%	N/A

* 2020: Investment was via a convertible loan note.

As an unquoted German company, Grover is not required to publicly file audited accounts.

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BullionVault is a physical gold and silver market for private investors online. It enables people across 175 countries to buy and sell professional-grade bullion at the very best prices online, with US$3.8 billion of assets under administration, over US$100 million worth of gold and silver traded monthly, and over 95,000 clients.

Each user's property is stored at an unbeaten low cost in secure, specialist vaults in London, New York, Toronto, Singapore and Zurich. BullionVault's unique Daily Audit then proves the full allocation of client property every day.

The company generates solid monthly profits from trading, commission and interest. It is cash generative, dividend paying, and well-placed for any cracks in the wider financial markets.

Source: BullionVault	31 March 2021 £'000	31 March 2020 £'000
Cost:	8,424	8,424
Value:	11,465	11,191*
% ownership (fully diluted):	11.1%	11.1%
Dividends paid:	622	360

• 31 March 2020 value includes WhiskyInvestDirect, which during the year was spun out of BullionVault at a valuation of £446,000.

As per last filed audited accounts of the investee company for the year to 31 October 2020:

	2020 £'000	2019 £'000
Gross profit	15,707	9,340
Pre tax profit	10,703	5,197
Net assets	34,851	35,712

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In the next 10 years, £1 trillion of inheritance will pass between generations in the UK. Farewill is a digital, all-in-one financial and legal services platform for dealing with death and after-death services, including wills, probate and cremation. "The nation's favourite will writer" according to Trustpilot reviews, Farewill aims to be the first major consumer brand in death services.

Farewill accounts for one out of every ten wills written, or a 10% market share, and has raised £340 million for charity in pledged income.

Augmentum led Farewill's £7.5 million Series A fundraise, with a £4 million investment. Augmentum participated in Farewill's £20 million Series B, led by Highland Europe in July 2020.

Source: Farewill	31 March 2021 £'000	31 March 2020 £'000
Cost:	6,573	4,000
Value	10,591	7,216
% ownership (fully diluted):	14.1%	13.4%

Farewill is not currently required to file audited accounts.

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Dext (formerly Receipt Bank) was founded in 2010 out of frustration from the amount of time and money lost in forgotten expenses, lost receipts and weekends spent sorting through paperwork. The founders decided there must be a better way to track business expenses and share them with accountants.

With over 400,000 businesses using the platform, Dext has processed over 250 million receipts, bills and bank statements. It uses powerful machine learning technology to connect accountants, bookkeepers and businesses to unlock the value of accounting data. It employs 450 people in offices across 4 continents. Dext now has over 1 million users, with 250,000 of those joining in 2020. The business rebranded from Receipt Bank to Dext in February 2020.

Augmentum's £7.5 million investment in January 2020 was part of Dext's £55 million Series C round led by US based Insight Partners.

Following the year end Dext was sold for £10.5 million realising a 30% IRR over an investment period of just 15 months. The proceeds from the sale will be reinvested in opportunities over the coming year.

Source: ReceiptBank	31 March 2021 £'000	31 March 2020 £'000
Cost:	7,500	7,500
Value:	10,536	7,500
% ownership (fully diluted):	3.7%	3.7%

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2018 £'000
Turnover	28,537	18,619
Pre tax loss	(12,383)	(17,619)
Net (liabilities)/assets	(9,981)	3,601

.

With Monese you can open a UK or European current account in minutes from your mobile, with a photo ID and a video selfie. Their core customers are amongst the hundreds of millions of people who live some part of their life in another country - whether it's for travel, work, business, study, family, or retirement.

With its mobile-only dual UK and Euro IBAN current account, its portability across 31 countries, and both the app and its customer service available in 14 languages, Monese allows people and businesses to bank like a local across the UK and Europe. Launched in 2015 Monese already has more than 2 million registered users. 70% of incoming funds are from salary payments, indicating that customers are using Monese as their primary account. In October 2020 Mastercard and Monese announced a multi-year strategic partnership, with Monese becoming a principal Mastercard issuer.

Augmentum is invested alongside Kinnevik, PayPal and International Airlines Group.

Source: Monese	31 March 2021 £'000	31 March 2020 £'000
Cost:	10,261	9,261
Value:	10,341	10,159
% ownership (fully diluted)*:	7.5%	5.4%

* £0.9m (2020: £4.0m) of investment in a convertible loan note.

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2018 £'000
Turnover	10,297	5,485
Pre tax loss	(38,061)	(12,663)
Net (liabilities)/assets	(17,398)	18,101

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Zopa built the first peer-to-peer (P2P) lending company to give people access to simpler, better-value loans and investments. Silverstripe invested £140 million in April 2020 following which Zopa have now been granted their full UK banking license.

Zopa's proprietary technology has contributed to their leading digital acquisition position. The company has lent over £5 billion in personal loans since inception and generated positive returns every year through the cycle. New products include a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), a credit card, a money management product and motor finance.

In March 2021, Augmentum participated in a £20m funding round led by Silverstripe.

Source: Zopa	31 March 2021 £'000	31 March 2020 £'000
Cost:	19,670	18,500
Value:	9,501	7,930
% ownership (fully diluted):	3.0%	6.1%

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2019 £'000
Operating income	33,464	24,020
Pre tax loss	(18,136)	(18,295)
Net assets	36,535	48,903

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Founded in 2011, iwoca uses award-winning technology to disrupt small business lending across Europe. They offer short-term loans of up to £200,000 to SMEs across the UK, Germany and Poland. iwoca leverage online integrations with high-street banks, payment processors and sector-specific providers to look at thousands of data points for each business. These feed into a risk engine that enables the company to make a fair assessment of any business - from a retailer to a restaurant, a factory to a farm - and approve a credit facility within hours. The company has issued over £1 billion in funding to over 50,000 SMEs in total and has surpassed £100 million worth of lending through the Coronavirus Business Interruption Loan Scheme to businesses grappling with the fallout of the economic crisis caused by the coronavirus. Iwoca launched iwocaPay in June 2020, an innovative business-to-business (B2B) 'buy now pay later' product to provide flexible payment terms to buyers while giving peace of mind to sellers.

Source: iwoca	31 March 2021 £'000	31 March 2020 £'000
Cost:	7,880	7,600
Value:	7,971	7,600
% ownership (fully diluted)*:	2.5%	2.5%

* £0.4m (2020: nil) of investment in a convertible loan note.

As per last filed audited accounts of the investee company for the year to 31 December 2019:

	2019 £'000	2018 £'000
Turnover	68,587	47,534
Pre tax (loss)/profit	(1,427)	506
Net assets	43,051	28,957

OTHER INVESTMENTS

DueDil is a predictive company intelligence platform whose mission is to inform and connect the economy by telling the story behind every business. DueDil's purpose-built matching technology links together data from authoritative sources, helping its clients find, verify and monitor opportunities and risks. More than four hundred B2B financial services and technology companies rely on DueDil's web platform and application programming interface as an end-to-end solution for go to market execution, compliant on-boarding and lifecycle risk assessment. DueDil ingests billions of data points a day and surfaces more than 270 million connections. Alongside Augmentum, major investors include Notion Capital and Oak Investment Partners.

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Previse allows suppliers to be paid instantly. Previse's artificial intelligence ("AI") analyses the data from the invoices that sellers send to their large corporate customers. Predictive analytics identify the few problematic invoices, enabling the rest to be paid instantly. Previse charges the suppliers a small fee for the convenience, and shares the profit with the corporate buyer and the funder. Previse precisely quantifies dilution risk so that funders can underwrite pre-approval payables at scale. The company processes over 100,000 invoices a day.

Augmentum invested £250,000 in a convertible loan note in August 2019. This converted into equity as part of the company's US$11 million funding round in March 2020, alongside Reefknot Investments and Mastercard, as well as existing investors Bessemer Venture Partners and Hambro Perks. Previse was awarded a £2.5 million Banking Competition Remedies' Capability and Innovation Fund grant in August 2020.

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SRL Global focuses on assisting owners and operators of private wealth with the problems of financial data management, portfolio valuation and reporting by combining cutting-edge technology with back-office and middle-office operations. SRL Global's Nexus Platform provides access to an entire wealth picture on demand by creating an encompassing relationship between every part of the investment process.

Serving as an enterprise business intelligence platform, the solution provides clients with a single investment repository and reporting platform that helps enforce consistency and accuracy by standardising the way information is accessed, analysed and shared. SRL Global is profitable, has served 290 family offices in 18 countries worldwide and offers 24/7 online access.

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Habito is transforming the United Kingdom's £1.3 trillion mortgage market by taking the stress, arduous paperwork, hidden costs and confusing process out of financing a home.

Since launching in April 2016, Habito has helped nearly 400,000 better understand their mortgage needs and submitted almost £6 billion of mortgages. Habito launched their own buy-to-let mortgages in July 2019 and in March 2021 launched a 40-year fixed-rate mortgage 'Habito One', the UK's longest-ever fixed rate mortgage.

Augmentum invested £5 million in August 2019. In August 2020, Augmentum led Habito's £35 million Series C funding round.

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Seedrs is the leading online platform for investing in the equity of startups and other growth companies in Europe, and has been named the most active investor in private companies in the UK.

Seedrs allows all types of investors to invest in businesses they believe in and share in their success, and allows all types of growth-focused businesses to raise capital and business community in the process. The Seedrs Secondary Market (launched in June 2017) enables investors to buy and sell shares from each other, and has served over 11,000 buyers and sellers, with £12.9 million traded. £1.1 billion has been invested into pitches to date with over 1,324 total deals funded.

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Wayhome (previously Unmortgage) offers a unique part-own part-rent model of home ownership, requiring as little as 5% deposit with customers paying a market rent on the portion of the home that Wayhome owns, with the ability to increase the equity in the property as their financial circumstances allow.

Wayhome opens up owner-occupied residential property as an asset class for pension funds, who will earn inflation-linked rent on the portion not owned by the occupier.

.

Intellis is an automated forex trading platform governed by AI.

Augmentum exercised its option to invest a further €1 million in March 2020 and a further €1 million in March 2021.

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Volt is a provider of account-to-account payments connectivity for international merchants and payment service providers (PSPs). An application of Open Banking, Account-to-account payments - where funds are moved directly from one bank account to another rather than via payment rails - deliver benefits to both consumers and merchants. This helps merchants shorten their cash cycle, increase conversion and lower their costs. Volt has connectivity to over 3,500 banks, 27 geographies, 9 currencies and 5 networks.

Augmentum invested in Volt in December 2020.

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ParaFi Capital is an investor in decentralised finance protocols that address tangible use cases of the technology and demonstrate signs of product-market fit. The ParaFi investment has drawn on their domain expertise developed in both traditional finance and crypto to identify and invest in leading protocols such as Compound (lending and interest accrual), Aave (asset borrowing), Uniswap (automated liquidity provision), and Synthetix (synthetic asset trading), MakerDAO (stablecoins). ParaFi also supports its protocols as a liquidity provider and governance participant.

Augmentum invested in ParaFi in January 2021. Co-investors include Bain Capital Ventures and Galaxy Digital.

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Founded in 2015, WhiskyInvestDirect, was a subsidiary of BullionVault and is the online market for buying and selling Scotch whisky as it matures in barrel. This is an asset class that has a long track record of growth, yet has previously been opaque and inaccessible.

The Company has over 3,500 bulk-stockholding clients holding the equivalent of 29 million bottles of whisky stored in barrels. The business seeks to change the way some of the three billion litres of maturing Scottish whisky is owned, stored and financed, giving self-directed investors an opportunity to profit from whisky ownership, with the ability to trade 24/7.

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STRATEGIC REPORT

Business Review

The Strategic Report, set out on pages 17 to 28, provides a review of the Company's business, the performance during the year and its strategy going forward. It also considers the principal risks and uncertainties facing the Company.

The Strategic Report has been prepared to provide information to shareholders to assess how the Directors have performed their duty to promote the success of the Company. Further information on how the Directors have discharged their duty under Section 172 of the Companies Act 2006 can be found on pages 24 and 25.

The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the date of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Strategy and Strategic Review

Throughout the year under review, the Company continued to operate as an approved investment trust, following its investment objectives and policy which is to generate capital growth over the long term through investment in a focused portfolio of fast growing and/or high potential private financial services technology ("fintech") businesses based predominantly in the UK and wider Europe.

The Company is an alternative investment fund ("AIF") under the UK version of the alternative investment fund managers' directive ("AIFMD") and has appointed Frostrow Capital LLP as its alternative investment fund manager ("AIFM").

During the year, the Board, Frostrow Capital LLP, as AIFM and the Portfolio Manager undertook all strategic and administrative activities.

Principal Risks and Risk Management

The Board considers that the risks detailed below are the principal risks currently facing the Company. These are the risks that could affect the ability of the Company to deliver its strategy.

The Board is responsible for the ongoing identification, evaluation and management of the principal risks faced by the Company and has established a process for the regular review of these risks and their mitigation. This process accords with the UK Corporate Governance Code and the FRC's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting.

The Board has carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. Further details of the risk management processes that are in place can be found in the Corporate Governance Statement.

Other than the risks associated with the COVID-19 pandemic, the Board's policy on risk management has not materially changed during the course of the reporting period and up to the date of this report.

The Company maintains a framework of the key risks, with the policies and processes devised to monitor, manage and mitigate them where possible. Its detailed risk map is reviewed regularly by the Audit Committee.

Further details on the financial risks are included in Note 13 starting on page 62.

The Company's key risks fall broadly under the following categories:

Principal Risks and Uncertainties	Mitigation
Macroeconomic Risks The performance of the Group's investment portfolio is materially influenced by economic conditions. These may affect demand for services supplied by investee companies, foreign exchange rates, input costs, interest rates, debt and equity capital markets and the number of active trade and financial buyers. All of these factors could be influenced by the ongoing pandemic and potential fallout from Brexit. They may have an impact on the Group's ability to realise a return from its investments and cannot be directly controlled by the Group.	Within the constraints dictated by its objective, the Company's portfolio is diversified across a range of sectors, has no leverage, a net cash balance and as set out below the Portfolio Manager structures investments to provide downside protection, where possible. The Board, AIFM and Portfolio Manager monitor the macroeconomic environment and this is discussed at each Board meeting, along with the potential impact. The Portfolio Manager also provides a detailed update on the investments at each meeting, including, inter alia, developments in relation to the macro environment and trends.
Strategy Implementation Risks The Group is subject to the risk that its long term strategy and its level of performance fail to meet the expectations of its shareholders.	A robust and sustainable corporate governance structure has been implemented with the Board responsible for continuing to act in the best interests of shareholders. Experienced fintech Portfolio Managers have been retained in order to deliver the strategy.
Investment Risks The performance of the Group's portfolio is influenced by a number of factors. These include, but are not limited to: The Company also invests in early-stage companies which, by their nature, may be smaller capitalisation companies. Such companies may not have the financial strength, diversity and the resources of larger and more established companies, and may find it more difficult to operate, especially in periods of low economic growth.	The Portfolio Manager has put in place a rigorous investment process which ensures disciplined investment selection and portfolio management. This includes detailed due diligence, regular portfolio reviews and in many cases active engagement with portfolio companies by way of board representation or observer status. Investing in young businesses that may be cash consuming for a number of years is inherently risky. In order to reduce the risks of permanent capital loss the Portfolio Manager will, where possible, structure investments to afford a degree of downside protection through mechanisms such as a liquidation preference and/or anti-dilution provisions. As noted above the Portfolio Manager provides a detailed update at each Board meeting, including, inter alia, investee company developments, funding requirements and the pipeline of potential new investments.
Portfolio Diversification Risk The Group is subject to the risk that its portfolio may not be diversified, being heavily concentrated in the fintech sector, with the investments primarily located in the UK and that the portfolio value may be dominated by a single or limited number of companies.	The Group attempts to mitigate this risk by making investments across a range of companies in a range of fintech company subsectors and in companies at different stages of their lifecycle in accordance with the Investment Objective and Investment Policy. Given the nature of the Company's Investment Objective this remains a significant risk.
Cash Risk Returns to the Company through holding cash and cash equivalents are currently low. The Company may hold significant cash balances, particularly when a fundraising has taken place, and this may have a drag on the Company's performance. The Company may require cash to fund potential follow-on investments in existing investee companies. If the Company does not hold sufficient cash to participate in subsequent funding rounds carried out by portfolio companies, this could result in the interest which the Company holds in such businesses being diluted. This may have a material adverse effect on the Company's financial position and returns for shareholders.	To mitigate this risk the Board has agreed prudent cash management guidelines with the AIFM and Portfolio Manager. The Group maintains sufficient cash resources to manage its ongoing operational and investment commitments. Regular discussions are held to consider the future cash requirements of the Company and its investments to ensure that sufficient cash is maintained.
Credit Risk As noted the Company may hold significant cash balances. There is a risk that the banks with which the cash is deposited fail and the Company could be adversely affected through either delay in accessing the cash deposits or the loss of the cash deposit. When evaluating counterparties there can be no assurance that the review will reveal or highlight all relevant facts and circumstances that may be necessary or helpful in evaluating the creditworthiness of the counterparty.	Set limits are agreed on the maximum exposure to any one counterparty and require all counterparties to have a high credit rating and financial strength. Compliance with these guidelines is monitored regularly and reported to the Board on a quarterly basis.
Valuation Risk The valuation of investments in accordance with IFRS 13 and International Private Equity and Venture Capital (IPEV) Valuation Guidelines requires considerable judgement and is explained in Note 19.17. The Company's investments may be illiquid and a sale may require consent of other interested parties. Such investments may therefore be difficult to value and realise. Such realisations may involve significant time and cost and/or result in realisations at levels below the value of such investments as estimated by the Company.	The Company has a rigorous valuation policy and process as set out in Notes 19.4 and 19.17. This process is led by the Board and includes benchmarking valuations against actual prices received when a sale of shares is made, as well as taking account of liquidity issues and/or any restrictions over investments.
Operational Risk The Board is reliant on the systems of the Group and Company's service providers and as such disruption to, or a failure of, those systems could lead to a failure to comply with law and regulations leading to reputational damage and/or financial loss to the Group and/or Company.	To manage these risks the Board:
Key person risk There is a risk that the individuals responsible for managing the portfolio may leave their employment or may be prevented from undertaking their duties.	The Board manage this risk by:

Emerging Risks

The Company has carried out a robust assessment of the Company's emerging and principal risks and the procedures in place to identify emerging risks are described below. The International Risk Governance Council definition of an 'emerging' risk is one that is new, or is a familiar risk in a new or unfamiliar context or under new context conditions (reemerging). Failure to identify emerging risks may cause mitigating actions to be reactive rather than being proactive and, in the worst case, could cause the Company to become unviable or otherwise fail or force the Company to change its structure, objective or strategy.

The Audit Committee reviews a risk map at its half-yearly meetings. Emerging risks are discussed in detail as part of this process and also throughout the year to try to ensure that emerging (as well as known) risks are identified and, so far as practicable, mitigated.

The experience and knowledge of the Directors are useful in these discussions, as are update papers and advice received from the Board's key service providers such as the Portfolio Manager, the AIFM and the Company's Brokers. In addition, the Company is a member of the AIC, which provides regular technical updates as well as drawing members' attention to forthcoming industry and/or regulatory issues and advising on compliance obligations.

COVID-19

The market and operational risks and financial impact as a result of the COVID-19 pandemic, and the measures introduced to combat its spread, have been discussed by the Board, with updates on operational resilience being received from the Company's principal services providers.

The Company's Portfolio Manager continues to provide regular updates to the Board on the financial impacts of the pandemic on portfolio performance and investee companies as well as the effect on the fintech sector.

Performance and Prospects

Performance

As set out in the Chairman's Statement on page 2, considering the opportunities and challenges faced during the year, relative to the wider market, the Board is satisfied with the Company's performance and believes it to be a good result when considering its Key Performance Indicators ("KPIs").

The Board assesses the Company's performance in meeting its objective against the following KPIs. Due to the unique nature and investment policy of the Company, with no direct listed competitors or comparable indices, the Board consider that there is no relevant external comparison against which to assess the KPIs and as such performance against the KPIs is considered on an absolute basis. Information on the Company's performance is provided in the Chairman's Statement and the Portfolio Manager's Review. The KPIs have not changed from the prior year:

• TheNetAsset Value ("NAV") per share total return*

The Directors regard the Company's net asset value per share total return as being the critical measure of value delivered to shareholders over the long term.

This is an Alternative Performance Measure ("APM") and its calculation is explained in the Glossary on page 78. Essentially, it adds back distributions made in the period to the change in the net asset value to arrive at a total return.

The Group's NAV per share total return for the year was 12.3% (2020: 5.9%). This result is discussed in the Chairman's Statement (beginning on page 2).

• TheTotalShareholder Return ("TSR")*

The Directors also regard the Company's TSR as a key indicator of performance. Like the NAV per share total return discussed above, this is an APM and its calculation is explained in the Glossary on page 78. The TSR is similar in nature to the NAV per share total return, except that it adds back distributions made in the period to the change in the share price, to reflect more closely the return in the hands of shareholders. Share price performance is monitored closely by the Board.

The Group's TSR for the year was 128.8% (2020: (41.6%)).

• OngoingChargesRatio ("OCR")*

Ongoing charges represent the costs that shareholders can reasonably expect to pay from one year to the next, under normal circumstances.

The Board is cognisant of costs and reviews the level of expenses at each Board meeting. It works hard to maintain a sensible balance between strong service and keeping costs down.

The reasons for the continued appointment of the Company's AIFM and the Portfolio Manager, together with their terms are set out on page 22. In reaching this decision, the Board took into account the ongoing charges ratio of other investment companies with specialist mandates.

The Group's OCR for the year was 1.9% (2020: 2.1%). The Board aims for this ratio to reduce over time.

* Alternative Performance Measure (see glossary on page 78).

Prospects

The Company's current position and prospects are described in the Chairman's Statement and Portfolio Review sections of this Annual Report and Financial Statements.

Performance and Future developments

The Board's primary focus is on the Portfolio Manager's investment approach and performance. The subject is thoroughly discussed at every Board meeting.

In addition, the AIFM updates the Board on company communications, promotions and investor feedback, as well as wider investment issues.

An outline of performance, investment activity and strategy, and market background during the year, as well as the outlook, is provided in the Chairman's Statement on pages 2 and 3 and the Portfolio Manager's Review on pages 14 to 16.

Viability Statement

The Board has considered the Company's financial position, including its ability to liquidate portfolio assets and meet its expenses as they fall due, and notes the following:

The Board has considered the viability of the Company under various scenarios, including periods of acute stock market and economic volatility such as experienced in 2020.

The expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments currently foreseen which would alter that position.

In considering the Company's longer-term viability, as well as considering the principal risks on pages 17 to 20 and the financial position of the Company, the Board considered the following factors and assumptions:

• The Company is and will continue to be invested primarily in long-term illiquid investments which are not publicly traded;
• The Board reviews the liquidity of the Company, regularly considers any commitments it has and cash flow projections;
• The Board, AIFM and Portfolio Manager will continue to adopt a long term view when making investments and anticipated holding periods will be at least five years;
• As detailed in the Directors' Report, the Valuations Committee oversees the valuation process;
• There will continue to be demand for investment trusts;
• Regulation will not increase to a level that makes running the Company uneconomical; and
• The performance of the Company will continue to be satisfactory.

Whilst acknowledging that market and economic uncertainty have increased as a result of the pandemic, based on the results of its review, and taking into account the long-term nature of the Company, the Board has a reasonable expectation that the Company will be able to continue its operations and meet its expenses and liabilities as they fall due for the foreseeable future, taken to mean at least the next five years. The Board has chosen this period because, whilst it has no information to suggest this judgement will need to change in the coming five years, forecasting over longer periods is imprecise. The Board's long-term view of viability will, of course, be updated each year in the Annual Report.

Going Concern

In light of the conclusions drawn in the foregoing Viability Statement and as set out in note 19.1 to the financial statements on page 66, the Company has adequate financial resources to continue in operational existence for at least the next 12 months.

Therefore, the directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. In reviewing the position as at the date of this report, the Board has considered the guidance on this matter issued the Financial Reporting Council.

Management Arrangements

Principal Service Providers

The Company is structured as an internally managed closed-ended investment company. Augmentum Fintech Management Limited ("Portfolio Manager") is the wholly owned operating subsidiary of the Company that manages the investment portfolio of the Company as a delegate of the AIFM.

The other principal service providers to the Company are Frostrow Capital LLP ("Frostrow" or the "AIFM") and IQ EQ Depositary Company (UK) Limited (the "Depositary"). Details of their key responsibilities and their contractual arrangements with the Company follow.

Alternative Investment Fund Manager ("AIFM")

Frostrow under the terms of its AIFM agreement with the Company provides, inter alia, the following services:

• oversight of the portfolio management function delegated to Augmentum Fintech Management Limited;
• promotion of the Company's shares;
• investment portfolio administration and valuation;
• risk management services;
• share price discount and premium monitoring;
• administrative and company secretarial services;
• advice and guidance in respect of corporate governance requirements;
• maintenance of the Company's accounting records;
• review of the Company's website;
• preparation and publication of annual and half year reports; and
• ensuring compliance with applicable legal and regulatory requirements.

AIFM Fees

Under the terms of the AIFM Agreement Frostrow is entitled to an annual fee of:

• on NAV up to £150 million: 0.225% per annum;
• on that part of NAV in excess of £150 million and up to £500 million: 0.2% per annum; and
• on that part of NAV in excess of £500 million: 0.175% per annum,

calculated on the last working day of each month and payable monthly in arrears.

The AIFM Agreement may be terminated by either party on giving notice of not less than 12 months.

Portfolio Manager

Augmentum Fintech Management Limited, as delegate of the AIFM, is responsible for the management of the Company's portfolio of investments under an agreement between it, the Company and Frostrow (the "Portfolio Management Agreement").

Under the terms of its Portfolio Management Agreement, Augmentum Fintech Management Limited provides, inter alia, the following services:

• seeking out and evaluating investment opportunities;
• recommending the manner by which monies should be invested, disinvested, retained or realised;
• advising on how rights conferred by the investments should be exercised;
• analysing the performance of investments made; and
• advising the Company in relation to trends, market movements and other matters which may affect the investment objective and policy of the Company.

Portfolio Manager Fees

Under the terms of the Portfolio Management Agreement Augmentum Fintech Management Limited (the "Portfolio Manager") receives an annual fee of 1.5% of the NAV per annum, falling to 1.0% of any NAV in excess of £250 million.

The Portfolio Manager is entitled to a carried interest fee in respect of the performance of any investments and follow-on investments. Each carried interest fee operates in respect of investments made during a 24 month period and related follow-on investments made for a further 36 month period, save that the first carried interest fee shall be in respect of investments acquired using 80% of the net proceeds of the Company's IPO* in March 2018 (including the Initial Portfolio), and related follow-on investments.

Subject to certain exceptions, the Portfolio Manager receives, in aggregate, 15% of the net realised cash profits from the investments and follow-on investments made over the relevant period once the Company has received an aggregate annualised 10% realised return on investments (the 'hurdle') and follow-on investments made during the relevant period. The Portfolio Manager's return is subject to a ''catch-up'' provision in its favour. The carried interest fee is paid in cash as soon as practicable after the end of each relevant period, save that at the discretion of the Board payments of the carried interest fee may be made in circumstances where the relevant basket of investments has been realised in part, subject to claw-back arrangements in the event that payments have been made in excess of the Portfolio Manager's entitlement to any carried interest fees as calculated following the relevant period.

Based on the investment valuations as at 31 March 2021 the hurdle has been met, on an unrealised basis, and as such a carried interest fee has been provided for as set out in Notes 2 and 12. This will only be payable if the hurdle is met on a realised basis.

The Portfolio Management Agreement may be terminated by either party giving notice of not less than 12 months.

AIFM and Portfolio Manager Evaluation and Re-Appointment

The performance of Frostrow as AIFM and Augmentum Fintech Management Limited as Portfolio Manager is regularly monitored by the Board with a formal evaluation being undertaken each year. As part of this process the Board monitors the services provided by the AIFM and the Portfolio Manager and receives regular reports and views from them.

Following a review at a Management Engagement & Remuneration Committee meeting in March 2021 the Board believes that the continuing appointment of the AIFM and the Portfolio Manager, under the terms described within this Strategic Report, is in the best interests of the Company's shareholders. In coming to this decision it took into consideration the following additional reasons:

• the quality and depth of experience of the management, company secretarial, administrative and marketing team that the AIFM brought to the management of the Company; and
• the quality and depth of experience allocated by the Portfolio Manager to the management of the portfolio, together with the clarity and rigour of the investment process.

Depositary

The Company has appointed IQ EQ Depositary (UK) Limited as its Depositary in accordance with the AIFMD on the terms and subject to the conditions of an agreement between the Company, Frostrow and the Depositary (the "Depositary Agreement").

The Depositary provides the following services, inter alia, under its agreement with the Company:

• verification of non-custodial investments;
• cash monitoring;
• processing of transactions; and
• foreign exchange services.

The Depositary must take reasonable care to ensure that the Company is managed in accordance with the Financial Conduct Authority's Investment Funds Sourcebook, the AIFMD and the Company's Articles of Association.

Under the terms of the Depositary Agreement, the Depositary is entitled to receive an annual fee of £25,000 plus certain event driven fees.

The notice period on the Depositary Agreement is not less than six months.

Dividend Policy

The Company invests with the objective of achieving capital growth over the long term and it is not expected that a revenue dividend will be paid in the foreseeable future. The Board intends only to pay dividends out of revenue to the extent required in order to maintain the Company's investment trust status.

Potential returns of capital

It is expected that the Company will realise investments from time to time. The proceeds of these disposals may be re-invested, used for working capital purposes or, at the discretion of the Board returned to shareholders.

The Company commits to return to Shareholders up to 50 per cent. of the gains realised by the disposal of investments in each financial year. It is expected that such returns of capital would be made annually. The Company may also seek to make returns of capital to Shareholders where available cash is not expected to be substantially deployed within the following 12-18 months. The options for effecting any return of capital to shareholders may include the Company making tender offers to purchase Shares, paying special dividends or any alternative method or a combination of methods. Certain methods intended to effect a return of capital may be subject to, amongst other things, shareholder approval. Shareholders should note that the return of capital by the Company is at the discretion of the Directors and is subject to, amongst other things, the working capital requirements of the Company.

* See Glossary on page 78

Company Promotion

The Company has appointed Peel Hunt LLP and N+1 Singer as joint corporate brokers, to work alongside one another to encourage demand for the Company's shares.

In addition to AIFM services, Frostrow also provides marketing and distribution services.

Engaging regularly with investors:

The Company's brokers and Frostrow meet with institutional investors, discretionary wealth managers and execution-only platform providers around the UK and hold regular seminars and other investor events;

Making Company information more accessible:

Frostrow manages the investor database and produces all key corporate documents, distributes monthly factsheets, annual reports and updates from the Portfolio Manager on portfolio and market developments; and

Monitoring market activity, acting as a link between the Company, shareholders and other stakeholders:

The Company's brokers and Frostrow maintain regular contact with sector broker analysts and other research and data providers, and provide the Board with up-to-date information on the latest shareholder and market developments.

Community, Social, Employee, Human Rights, Environmental Issues, Anti-bribery and Anti-corruption

The Company is committed to carrying out business in an honest and fair manner with a zero-tolerance approach to bribery, tax evasion and corruption. As such, policies and procedures are in place to prevent bribery and corruption. In carrying out its activities, the Company aims to conduct itself responsibly, ethically and fairly, including in relation to social and human rights issues.

As an investment trust with limited internal resource, the Company has little impact on the environment. The Company believes that high ESG (Environmental, Social and Governance) standards within both the Company and its portfolio companies make good business sense and have the potential to protect and enhance investment returns. Consequently, the Group's investment process ensures that ESG issues are taken into account and best practice is encouraged.

Diversity

There are currently two male Directors and one female Director (being 33% female representation) on the Board. The Company aims to have a balance of relevant skills, experience and background amongst the Directors on the Board and believes that all Board appointments should be made on merit and with due regard to the benefits of diversity, including gender. In addition, the Board encourages diversity in the management team at AFML and the promotion of the benefits of diversity in portfolio companies. Further details are included on page 27.

Engaging with our stakeholders

The following 'Section 172' disclosure describes how the Directors have had regard to the views of the Company's stakeholders in their decision-making.

Who? STAKEHOLDER GROUP	Why? THE BENEFITS OF ENGAGEMENT WITH OUR STAKEHOLDERS	How? HOW THE BOARD THE AIFM AND THE PORTFOLIO MANAGER HAS ENGAGED WITH OUR STAKEHOLDERS
Investors	Clear communication of the Company's strategy and the performance against objective can help the share price trade at a narrower discount or a wider premium to its net asset value which benefits shareholders. New shares may be issued to meet demand without diluting the NAV per share of existing shareholders. Increasing the size of the Company can benefit liquidity as well as spread costs.	Frostrow as AIFM, the Portfolio Manager and the Company's joint brokers on behalf of the Board complete a programme of investor relations throughout the year. In addition the Chairman has continued to engage regularly with the Company's larger shareholders. Key mechanisms of engagement included:
Portfolio Manager	Engagement with our managers is necessary to evaluate their performance against their stated strategy and to understand any risks or opportunities this may present to the Company. It also gives them clarity on the Board's expectations. This also helps ensure that Portfolio Management costs are closely monitored and remain competitive.	The Board meets regularly with the Company's Portfolio Managers throughout the year both formally at the quarterly Board meetings and more regularly on an informal basis. The Board also receives quarterly performance and compliance reporting at each Board meeting. The Portfolio Manager's attendance at each Board meeting provides the opportunity for the Portfolio Manager and Board to further reinforce their mutual understanding of what is expected from all parties.
Service Providers	The Company contracts with third parties for other services including: depositary, investment accounting & administration, company secretarial and registrars. To ensure the third parties to whom we have outsourced services complete their roles diligently and correctly is necessary for the Company's success. The Company ensures all service providers are paid in accordance with their terms of business. The Board closely monitors the Company's Ongoing Charges Ratio.	The Board and Frostrow engage regularly with all service providers both in one-to-one meetings and via regular written reporting. This regular interaction provides an environment where topics, issues and business development needs can be dealt with efficiently and collegiately.
Employees of AFML COVID-19/well being of employees	Attract and retain talent to ensure the Group has the resources to successfully implement its strategy and manage third-party relationships.	In normal times all employees of AFML sit in one open plan office, facilitating interaction and engagement. Notwithstanding remote working, interaction has continued during the lockdown conditions faced over the last year. The senior team report to the Board at each meeting. Given the small number of employees, engagement is at an individual level rather than as a group.
Portfolio companies	Incorporating consideration of ESG factors into the investment process assists in understanding and mitigating risks of an investment and potentially identifying future opportunities.	The Board encourages the Company's Portfolio Managers to engage with companies and in doing so expects ESG issues to be a key consideration. The Portfolio Manager seeks to take a board seat, or have board observer status, on all investments. See pages 26 to 28. for further detail on AFML's ESG approach to investing.

What? WHAT WERE THE KEY TOPICS OF ENGAGEMENT?	Outcomes and actions WHAT ACTIONS WERE TAKEN, INCLUDING PRINCIPAL DECISIONS?
Key topics of engagement with investors Ongoing dialogue with shareholders concerning the strategy of the Company, performance and the portfolio.	The Portfolio Manager, Frostrow and the joint brokers meet regularly with shareholders and potential investors to discuss the Company's strategy, performance and portfolio. These meetings take place with and without the Portfolio Manager. This interaction informed the Board's deliberations, particularly with respect to prospects for increasing the scale of the Company, but did not otherwise lead to specific actions.
Key topics of engagement with the external managers on an ongoing basis are portfolio composition, performance, outlook and business updates.	No specific action required. Regular Board calls with representatives of the Portfolio Manager and AIFM. All of the Company's service providers successfully implemented remote working with no adverse impact on service delivery. The portfolio manager reports regularly any ESG issues in the portfolio companies to the Board. Please see pages 26 to 28 for further details of AFML's ESG policies. See the Remuneration Policy on pages 44 to 48.

Approach to Responsible Investing

Augmentum Fintech Management Limited ("AFML") is committed to a responsible investment approach through the lifecycle of its investments, from pre-screening to exit. AFML believes that the integration of Environmental, Social and Governance ("ESG") factors within the investment analysis, diligence and operating practices is pivotal in mitigating risk and creating sustainable, profitable investments.

Five-Stage Approach to Future-Proofing the Portfolio

ESG principles adapted from the UN PRI (Principles of Responsible Investment) are integrated throughout business operations; in investment decisions, at the screening stage through an exclusion list and due diligence, ongoing monitoring and engaging with portfolio companies post-investment and when making follow-on investment decisions, as well as within fund operations.

1. Screening

An Exclusion List is used to screen out companies incompatible with AFML's corporate values (sub-sectors and types of business). AFML also commits to being satisfied that the investors they invest alongside are of good standing.

2. Due Diligence

An ESG Due Diligence (DD) survey is completed on behalf of all companies in the later stages of the investment process. An ESG scorecard is completed for each potential investment, in which potential ESG risks and opportunities are identified, and discussed with the investment committee. Where necessary, an action plan is agreed with the management team on areas for improvement and commitments are incorporated into the Term Sheet.

3. Post-Investment Monitoring and Engagement

An annual survey is completed by portfolio companies and areas for improvement are discussed with management teams, with commitments agreed and revisited as appropriate.

4. Follow On Investments

ESG risks and opportunities are assessed when making follow-on investment decisions, with an ESG scorecard completed and co-investors taken into consideration. Follow on investments are only made into companies that continue to meet AFML's ESG criteria.

5. Internally at Augmentum

AFML have continued to identify priority areas in which to make suitable ESG-related advancements across fund operations. Key progress areas include:

• Incorporating environmental considerations into operating decisions, from limiting unnecessary printing and encouraging recycling in the office to a Bike2Work scheme for staff and using a sustainable clothing company for branded merchandise;
• Maintaining the highest levels of governance and ethical integrity in accordance with the regulatory standards to which we are subject, including the Financial Conduct Authority and the London Stock Exchange; and
• Continuing to embrace diversity and inclusion through inclusive hiring and professional development practices, as well as charity partnerships and other initiatives including TeenVC (see page 27).

ESG Focus Areas

AFML have identified eight key areas for consideration, across the three ESG categories, which best align with their values and are most relevant for companies operating in the fintech industry.

The key environmental consideration as identified by the AFML is the potential impact of business operations on the global issue of climate change. Social factors include the risks and opportunities associated with data security, privacy and ethical use, consumer protection, diversity and financial inclusion. Governance considerations include anti-bribery and corruption, board structure and independence and compliance.

AFML is committed to:

• Incorporating ESG and sustainability considerations into its investment analysis, diligence, and operating practices.
• Providing ESG training and support to the AFML employees involved in the investment process, so that they may perform their work in accordance with AFML's policy.
• Actively engaging with portfolio companies to encourage improvement in key ESG areas.
• Annual reporting on progress to stakeholders.

ESG in Action

Advancements continue to be seen in ESG practices across the portfolio, both in business models and operating procedures. Below we highlight some examples.

Farewill

2020 alone saw £150 million pledged to cancer, homelessness, military and health charities through gifts in Farewill wills. The company helped over 5,000 NHS staff members to write a free will during lockdown and continues to offer them a 10% discount.

Grover

"Making technology accessible to everyone" remains at the core of Grover's circular economy business model. By the end of 2020 Grover had seen 175,000 devices refurbished and recirculated since their launch, saving 775 tons of e-waste in the process. Through Grover Business, the company equipped thousands of businesses with the tech they needed to keep their wheels turning while teams shifted to remote working in the wake of COVID-19.

Habito

In August 2020, Habito the first mortgage company in the UK to secure the B Corp accreditation, joining a community of companies "using the power of business to make the world a better place".

In March 2021, Habito demonstrated their commitment to transparency, certainty and flexibility for their customers by launching the UK's longest-ever fixed rate mortgage, 'Habito One'.

interactive investor

interactive investor was awarded "Best Sustainable ISA" and "Best Sustainable Pension" in the 2021 Boring Money Best Buys awards. Their ACE 40 list and Ethical Growth portfolio remain carefully-curated options for ethically-minded customers.

Encouraging a Diverse Fintech Industry: Progress highlights

AFML have continued to show their support for a diverse, inclusive fintech industry through involvement in various diversity-focused initiatives and events, and have been recognised for an industry-leading approach. Learn more below.

Diverse Dealflow and Events

AFML have been involved in multiple diversity-focused events including numerous Female Founder Office Hours, 'Power to Black Founders', The Sutton Trust's Banking and Finance pathway sessions (championing social mobility) and supporting a 24 hour virtual investment hackathon for students through Project Venture.

TeenVC

In 2020 AFML launched TeenVC (www.teen-vc.com), a free online education platform for students from all backgrounds to learn about venture capital, technology and entrepreneurship. AFML have continued to engage with students through the platform itself, hosting students across a number of educational sessions and offering ongoing internships and career support through a dedicated LinkedIn group. The initial phase of the initiative saw over 10,000 students around the world engaging with the content, and The TeenVC Challenge saw entries being submitted from as far as San Francisco, South Africa, Bangladesh and Scotland.

ESG Awards and Recognition

• Diversity VC Standard Level 1

Augmentum was one of just 11 VC funds across the UK and Canada to be awarded Level 1 of the Diversity VC Standard, championing diversity and inclusion across investment and internal fund processes. Details on this standard can be found at their website - www.diversity.vc/the-diversity-vc-standard/.

• Fintech for All Charter

AFML is a founding signatory of the Fintech for All Charter, aimed at tackling harassment and promoting diversity within the fintech sector. The Charter has been led by InChorus and supported by Innovate Finance, the FinTech Alliance, and Level39, with the Financial Conduct Authority supporting the steering committee.

• ESG Investing Awards

AFML was a finalist in the ESG Investing Awards, in the "Best Corporate Sustainability Strategy" and "Most Innovative ESG Initiative" categories. The ESG Investing Awards exist to assess and evaluate the best companies involved in all areas of ESG investing across the globe. They are designed exclusively for banks, investment managers, research houses, ratings agencies, index and ETF providers and exchanges. Further detail on the ESG Investing Awards can be found at www.esginvesting.co.uk/awards/.

This strategic report was approved by the Board of Directors and signed on its behalf by:

Neil England

Chairman

11 June 2021

.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT, THE DIRECTORS' REMUNERATION REPORT AND THE FINANCIAL STATEMENTS

The directors are responsible for preparing the annual report and financial statements in accordance with United Kingdom applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group and Company financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the return or loss for the Group and Company for that period.

In preparing these group financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the group financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
• prepare a directors' report, a strategic report and directors' remuneration report which comply with the requirements of the Companies Act 2006.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

They are also responsible for safeguarding the assets of the Group and 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 company's website: www.augmentum.vc. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility Statement

The Directors consider that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the Group and Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed under the 'Board of Directors' on page 29 confirm that, to the best of their knowledge:

• the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group and Company;
• The annual report includes a fair review of the development and performance of the business and the financial position of the group and Company, together with a description of the principal risks and uncertainties that they face.

Neil England

Chairman

11 June 2021

Note to those who access this document by electronic means:

The Annual Report for the year ended 31 March 2021 has been approved by the Board of Augmentum Fintech plc.

Copies of the Annual Report and the Half Year Report are circulated to shareholders and, where possible, to investors through other providers' products and nominee companies (or written notification is sent when they are published online). It is also made available in electronic format for the convenience of readers. Printed copies are available from the Company's registered office in London.

.

CONSOLIDATED INCOME STATEMENT

		Year ended 31 March 2021			Year ended 31 March 2020
	Notes	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on Investments	8	-	26,727	26,727	-	12,683	12,683
Interest Income		7	-	7	106	-	106
Expenses	2	(2,879)	(4,179)	(7,058)	(2,579)	(2,410)	(4,989)
(Loss)/Return before Taxation		(2,872)	22,548	19,676	(2,473)	10,273	7,800
Taxation	6	-	-	-	-	-	-
(Loss)/Return for the year		(2,872)	22,548	19,676	(2,473)	10,273	7,800
(Loss)/Return per Share (pence)	7	(2.3)p	18.2p	15.9p	(2.2)p	9.2p	7.0p

The total column of this statement represents the Group's Consolidated Income Statement, prepared in accordance with IFRS as adopted by the UK.

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

The Group does not have any other comprehensive income and hence the total return, as disclosed above, is the same as the Group's total comprehensive income.

All items in the above statement derive from continuing operations.

All returns are attributable to the equity holders of Augmentum Fintech plc, the parent company. There are no non-controlling interests.

The notes on pages 59 to 69 are integral to and form part of these Financial Statements.

CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY

			Year ended 31 March 2021
Group	Ordinary share capital £'000	Share premium account £'000	Special reserve £'000	Other capital reserve £'000	Revenue reserve £'000	Total £'000
Opening Shareholders funds	1,171	24,760	92,033	22,328	(4,499)	135,793
Issue of shares following placing and offer for subscription	234	27,812	-	-	-	28,046
Costs of placing and offer for subscription	-	(546)	-	-	-	(546)
Issue of shares from Treasury	-	125	119	-	-	244
Purchase of own shares into Treasury	-	-	(51)	-	-	(51)
Return/(loss) for the year	-	-	-	22,548	(2,872)	19,676
At 31 March 2021	1,405	52,151	92,101	44,876	(7,371)	183,162
			Year ended 31 March 2020
Group	Ordinary share capital £'000	Share premium account £'000	Special reserve £'000	Other capital reserve £'000	Revenue reserve £'000	Total £'000
Opening Shareholders funds	940	-	92,101	12,055	(2,026)	103,070
Issue of shares following placing and offer for subscription	231	25,587	-	-	-	25,818
Costs of placing and offer for subscription	-	(827)	-	-	-	(827)
Purchase of own shares into Treasury	-	-	(68)	-	-	(68)
Return/(loss) for the year	-	-	-	10,273	(2,473)	7,800
At 31 March 2020	1,171	24,760	92,033	22,328	(4,499)	135,793
			Year ended 31 March 2021
Company	Ordinary share capital £'000	Share premium account £'000	Special reserve £'000	Other capital reserve £'000	Revenue reserve £'000	Total £'000
Opening Shareholders funds	1,171	24,760	92,033	22,328	(4,690)	135,602
Issue of shares following placing and offer for subscription	234	27,812	-	-	-	28,046
Costs of placing and offer for subscription	-	(546)	-	-	-	(546)
Issue of shares from Treasury	-	125	119	-	-	244
Purchase of own shares into Treasury	-	-	(51)	-	-	(51)
Return/(loss) for the year	-	-	-	22,548	(3,084)	19,464
At 31 March 2021	1,405	52,151	92,101	44,876	(7,774)	182,759
			Year ended 31 March 2020
Company	Ordinary share capital £'000	Share premium account £'000	Special reserve £'000	Other capital reserve £'000	Revenue reserve £'000	Total £'000
Opening Shareholders funds	940	-	92,101	12,055	(2,053)	103,043
Issue of shares following placing and offer for subscription	231	25,587	-	-	-	25,818
Costs of placing and offer for subscription	-	(827)	-	-	-	(827)
Purchase of own shares into Treasury	-	-	(68)	-	-	(68)
Return/(loss) for the year	-	-	-	10,273	(2,637)	7,636
At 31 March 2020	1,171	24,760	92,033	22,328	(4,690)	135,602

The notes on pages 59 to 69 are integral to and form part of these Financial Statements.

CONSOLIDATED BALANCE SHEET

as at 31 March 2021

	Note	2021 £'000	2020 £'000
Non-Current Assets
Investments held at fair value	8	164,127	123,132
Property, plant & equipment		6	17
Current Assets
Right of use asset	5	145	333
Other receivables	10	47	112
Cash and cash equivalents		27,433	15,111
Total Assets		191,758	138,705
Current Liabilities
Other payables	11	(1,940)	(212)
Lease liability	5	(148)	(333)
Provisions	12	(6,508)	(2,367)
Total Assets less Current Liabilities		183,162	135,793
Net Assets		183,162	135,793
Capital and Reserves
Called up share capital	15	1,405	1,171
Share premium		52,151	24,760
Special reserve		92,101	92,033
Retained earnings:
Capital reserves		44,876	22,328
Revenue reserve		(7,371)	(4,499)
Total Equity		183,162	135,793
Net Asset Value per share (pence)	16	130.4p	116.1p

The Financial Statements on pages 53 to 58 were approved by the Board of Directors on 11 June 2021 and signed on its behalf by:

Neil England

Chairman

The notes on pages 59 to 69 are integral to and form part of these Financial Statements.

Augmentum Fintech plc

Company Registration Number: 11118262

COMPANY BALANCE SHEET

as at 31 March 2021

	Note	2021 £'000	2020 £'000
Non-Current Assets
Investments held at fair value	8	164,127	123,132
Investment in subsidiary undertakings	9	500	500
Current Assets
Other receivables	10	17	83
Cash and cash equivalents		26,533	14,387
Total Assets		191,177	138,102
Current Liabilities
Other payables	11	(1,910)	(133)
Provisions	12	(6,508)	(2,367)
Total Assets less Current Liabilities		182,759	135,602
Net Assets		182,759	135,602
Capital and Reserves
Called up share capital	15	1,405	1,171
Share premium		52,151	24,760
Special reserve		92,101	92,033
Retained earnings:
Capital reserves		44,876	22,328
Revenue reserve		(7,774)	(4,690)
Total Equity		182,759	135,602

The accompanying notes are an integral part of these Financial Statements.

The Company return for the year was £19,464,000 (2020: £7,636,000). The Directors have taken advantage of the exemption under s408 of the Companies Act and not presented an income statement or a statement of comprehensive income for the Company alone.

The Financial Statements on pages 53 to 58 were approved by the Board of Directors on 11 June 2021 and signed on its behalf by:

Neil England

Chairman

The notes on pages 59 to 69 are integral to and form part of these Financial Statements.

Augmentum Fintech plc

Company Registration Number: 11118262

CONSOLIDATED CASH FLOW STATEMENT

	Year ended 31 March 2021 £'000	Year ended 31 March 2020 £'000
Operating activities
Purchases of investments	(12,538)	(32,849)
Acquisition of property, plant and equipment	(2)	(13)
Interest income received	68	70
Expenses paid	(2,758)	(2,454)
Lease payments	(141)	(158)
Net cash outflow from operating activities	(15,371)	(35,404)
Issue of shares following placing and offer for subscription	28,046	25,818
Costs of placing and offer for subscription	(546)	(827)
Purchase of own shares into Treasury	(51)	(68)
Issue of shares from Treasury	244	-
Net cash generated from financing activities	27,693	24,923
Net increase/(decrease) in cash and cash equivalents	12,322	(10,481)
Cash and cash equivalents at start of year	15,111	25,592
Cash and cash equivalents at end of year	27,433	15,111

The notes on pages 59 to 69 are integral to and form part of these Financial Statements.

COMPANY CASH FLOW STATEMENT

	Year ended 31 March 2021 £'000	Year ended 31 March 2020 £'000
Operating activities
Purchases of investments	(12,538)	(32,849)
Interest income received	66	70
Expenses paid	(3,075)	(2,803)
Net cash outflow from operating activities	(15,547)	(35,582)
Issue of shares following placing and offer for subscription	28,046	25,818
Costs of placing and offer for subscription	(546)	(827)
Purchase of own shares into Treasury	(51)	(68)
Issue of shares from Treasury	244	-
Net cash generated from financing activities	27,693	24,923
Net increase/(decrease) in cash and cash equivalents	12,146	(10,659)
Cash and cash equivalents at start of year	14,387	25,046
Cash and cash equivalents at end of year	26,533	14,387

The notes on pages 59 to 69 are integral to and form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS

1 Segmental Analysis

The Group operates a single business segment for reporting purposes and is managed as a single investment company. Reporting is provided to the Board of Directors on an aggregated basis. The investments are located in the UK, continental Europe and the US.

2 Expenses

	2021			2020
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
AIFM fees	334	-	334	278	-	278
Administrative expenses	817	39	856	1,016	43	1,059
Directors fees*	95	-	95	95	-	95
Carried Interest (see Note 4)^	-	4,140	4,140	-	2,367	2,367
Staff costs (see Note 4)	1,535	-	1,535	1,081	-	1,081
Auditors' remuneration	98	-	98	109	-	109
Total expenses	2,879	4,179	7,058	2,579	2,410	4,989

£197,000 of interest and depreciation relating to a lease (2020: £158,000) were included in administrative expenses. See note 5 for further details.

* Details of the amounts paid to Directors are included in the Directors Remuneration Report on page 43.

^ Carried Interest is calculated based on the valuation of the Company's investments as at the year end, assuming all the investments were converted to cash at that point, less estimated selling costs. The actual amount payable will be dependent on the amount and timing of the actual realisations of the portfolio investments. See page 22 and Notes 4 and 12 for further details.

Auditors' Remuneration

	2021		2020
	Group £'000	Company £'000	Group £'000	Company £'000
Audit of Group accounts pursuant to legislation*	66	66	641	641
Audit of subsidiaries accounts pursuant to legislation*	14	-	12	-
Audit related assurance services*	18	15	332	302
Total auditors' remuneration	98	81	109	94

1 Includes £4,000 payable to PWC relating to overruns on the 2019 audit.

2 Includes £30,000 payable to PWC in relation to the review of the Interim Report to 30 September 2019.

Non-audit services

It is the Group's practice to employ BDO LLP on assignments additional to their statutory audit duties only when their expertise and experience with the Group are important. Details of the Group's process for safeguarding and supporting the independence and objectivity of the external auditors are given in the Report of the Audit Committee beginning on page 49. BDO LLP were paid £nil (2020: £25,000) for reporting accountant services. These expenses are included within the costs of placing and offer for subscription in the Statement of Changes in Equity. BDO LLP were not the Group or Company's auditor at the time of their engagement as reporting accountants.

3 Key Management Personnel Remuneration

The Directors of the Company are considered to be the Key Management Personnel (KMP) along with the directors of the Company's subsidiary.

	2021			2020
	Salary /Fees £'000	Other benefits £'000	Total £'000	Salary /Fees £'000	Other benefits £'000	Total £'000
Key management personnel remuneration	755	78	833	495	73	568
Carried Interest Allocation*	2,640	-	2,640	1,656	-	1,656
	3,395	78	3,473	2,151	73	2,224

Other benefits include pension contributions relating to the directors of the Company's subsidiary.

* Allocation of the carried interest provision to the directors of the Company' subsidiary. See Note 4 for further details of the carried interest arrangements.

4 Staff Costs

The monthly average number of employees for the Group during the year was eight (2020: seven). All employees are within the investment and administration function and employed by the Company's subsidiary.

	2021 £'000	2020 £'000
Wages and salaries	1,254	876
Social security costs	179	114
Other pension costs	78	68
Other staff benefits	24	23
Staff costs	1,535	1,081
Carried Interest (charged to capital)*	4,140	2,367
Total	5,675	3,448

* Carried interest is only payable once the Group has received an aggregate annualised 10% realised return on investments (the 'hurdle'). Based on the investment valuations as at 31 March 2021 the hurdle has been met, on an unrealised basis, as such carried interest has been provided for. This will only be payable if the hurdle is met on a realised basis and a carried interest fee is paid by the Company to AFML, its subsidiary. See page 22 and Note 19.9 for further details.

The carried interest arrangements have been set up with aim of incentivising employees of AFML and aligning them with shareholders through participation in the realised investment profits of the Group. The Management Engagement & Remuneration Committee determine the allocation of the carried interest amongst employees of AFML and any unallocated carried interest on receipt of a carried interest fee from the company, or unvested carried interest resulting from a participant becoming a leaver, is expected to be allocated to remaining participants. Non-executive Directors of the Company are not eligible to participate in the carried interest arrangements.

5 Leases

Leasing activities

The Group, through its subsidiary AFML, has leased an office, in both 2021 and 2020, in the UK from which it operates for a fixed fee. The Group had no other leases in 2021 and 2020. When measuring lease liabilities for leases that were classified as operating leases, the Group discounts lease payments at a rate of 5%.

Right of Use Asset

	2021 Group Office Premises £'000	2020 Group Office Premises £'000
As at 1 April	333	-
Addition - Recognised on initial adoption of IFRS 16 on 1 April 2020	-	164
Addition	-	320
Depreciation	(188)	(151)
At 31 March	145	333

Lease Liability

	2021 Group Office Premises £'000	2020 Group Office Premises £'000
As at 1 April	333	-
Addition - Recognised on initial adoption of IFRS 16 on 1 April 2020	-	164
Addition	-	320
Interest Expense	9	7
Lease Payments	(194)	(158)
At 31 March	148	333

Maturity Analysis

	Group
At 31 March 2021	Up to 3 months £'000	3 - 12 months £'000	Between 1 - 2 years £'000
Lease payments	34	104	10

The aggregate lease liability recognised in the statement of financial position at 1 April 2019 and the Group's operating lease commitment at 31 March 2019 can be reconciled as follows:

	Group £'000
Operating lease commitment at 31 March 2019	172
Effect of discounting those lease commitments	(8)
Lease liability recognised on initial adoption of IFRS 16 on 1 April 2019	164

6 Taxation Expense

	2021			2020
For the year ended 31 March	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Current tax:
UK corporate tax on profits for the year	-	-	-	-	-	-

The difference between the income tax expense shown above and the amount calculated by applying the effective rate of UK corporation tax of 19% (2020: 19%) to the (loss)/return before tax is as follows:

		2021			2020
For the year ended 31 March	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
(Loss)/return before taxation	(2,872)	22,548	19,676	(2,473)	10,273	7,800
(Loss)/return before tax multiplied by the effective rate of
UK corporation tax of 19% (2020: 19%)	(546)	4,284	3,738	(470)	1,952	1,482
Effects of:
Non-taxable capital returns	-	(5,078)	(5,078)	-	(2,410)	(2,410)
Excess management expenses	546	794	1,340	470	458	928
Total tax expense	-	-	-	-	-	-

No provision for deferred taxation has been made in the current year. The Group has not provided for deferred tax on capital profits arising on the revaluation of investments, as it is exempt from tax on these items because of its status as an investment trust company.

The Company has not recognised a deferred tax asset on the excess management expenses of £9,998,000 (2020: £7,089,000). It is not anticipated that these excess expenses will be utilised in the foreseeable future.

7 (Loss)/Return per Share

The (loss)/return per share figures are based on the following figures:

	2021 £'000	2020 £'000
Net revenue loss	(2,872)	(2,473)
Net capital return	22,548	10,273
Net total return	19,676	7,800
Weighted average number of ordinary shares in issue	123,553,057	111,066,278
	Pence	Pence
Revenue loss per share	(2.3)	(2.2)
Capital return per share	18.2	9.2
Total return per share	15.9	7.0

The return per share is the figure calculated in accordance with IAS 33 'Earnings per share'.

8 Investments Held at Fair Value

Non-currentInvestmentsHeld at Fair Value

As at 31 March	2021 Group and Company £'000	2020 Group and Company £'000
Unlisted at fair value	164,127	123,132

Reconciliation of movements on investments held at fair value are as follows:

	Group and Company £'000	Group and Company £'000
As at 1 April	123,132	77,600
Purchases at cost	14,268	32,849
Gains on investments	26,727	12,683
As at 31 March	164,127	123,132

9 Subsidiary undertakings

The Company has an investment of £500,000 (2020: £500,000) in the issued ordinary share capital of its wholly owned subsidiary undertaking, Augmentum Fintech Management Limited ("AFML"), which is registered in England and Wales, operates in the United Kingdom and is regulated by the Financial Conduct Authority. AFML's principal activity is the provision of portfolio management services to the Company. AFML's registered office is 5-23 Old Street, London EC1V 9HL.

10 Other Receivables

As at 31 March	2021 Group £'000	2021 Company £'000	2020 Group £'000	2020 Company £'000
Other receivables	47	17	112	83

11 Other Payables

As at 31 March	2021 Group £'000	2021 Company £'000	2020 Group £'000	2020 Company £'000
Purchases payable	1,730	1,730	-	-
Other payables	210	180	212	133
	1,940	1,910	212	133

12 Provisions

As at 31 March	2021 Group and Company £'000	2020 Group and Company £'000
Carried Interest provision*	6,508	2,367

* See page 22 and Notes 4 and 19.9 for further details.

13 Financial Instruments

(i) Management of Risk

As an investment trust, the Group's investment objective is to seek capital growth from a portfolio of securities. The holding of these financial instruments to meet this objective results in certain risks.

The Group's financial instruments comprise securities in unlisted companies, partnership interests, trade receivables, trade payables, and cash and cash equivalents.

The main risks arising from the Group's financial instruments are fluctuations in market price, and credit and liquidity risk. The policies for managing each of these risks are summarised below. These policies have remained constant throughout the year under review. The financial risks of the Company are aligned to the Group's financial risks.

Market Price Risk

Market price risk arises mainly from uncertainty about future prices of financial instruments in the Group's portfolio. It represents the potential loss the Group might suffer through holding market positions in the face of price movements, mitigated by stock diversification.

The Group is exposed to the risk of the change in value of its unlisted equity and non-equity investments. For unlisted equity and non-equity investments the market risk is principally deemed to be the assumptions used in the valuation methodology as set out in the accounting policies.

Liquidity Risk

The Group's assets comprise unlisted equity and non-equity investments. Whilst unlisted equity is illiquid, short-term flexibility is achieved through cash and cash equivalents.

Credit Risk

The Group's exposure to credit risk principally arises from cash and cash equivalents. Only highly rated banks (with credit ratings above A3, based on Moodys ratings or the equivalent from another ratings agency) are used for cash deposits and the level of cash is reviewed on a regular basis. Cash was held with the following banks.

Bank Credit Ratings at 31 March 2021	2021 £'000	2020 £'000	Moody's
Barclays Bank plc	27,433	4,095	A1
Santander International*	-	11,016	Aa3
	27,433	15,111

* Rating is for the parent company

(ii) Financial Assets and Liabilities

As at 31 March	Group Fair value 2021 £'000	Company Fair value 2021 £'000	Group Fair value 2020 £'000	Company Fair value 2020 £'000
Financial Assets
Unlisted equity shares	157,719	157,719	103,991	103,991
Unlisted convertible loan notes	6,408	6,408	19,141	19,141
Cash and cash equivalents	27,433	26,533	15,111	14,387
Other assets	47	17	112	83
Financial Liabilities
Other payables	(1,940)	(1,910)	(212)	(133)

Cash and other receivables and payables are measured at amortised cost and the rest of the financial assets in the table above are held at approximate to fair value. The carrying values of the financial assets and liabilities measured at amortised cost are equal to the fair value.

The unlisted financial assets held at fair value are valued in accordance with the IPEV Guidelines as detailed within Note 19.4.

(iii) Fair Value Hierarchy

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm's length transaction.

The Group complies with IFRS 13 in respect of disclosures about the degree of reliability of fair value measurements. This requires the Group to classify, for disclosure purposes, fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The levels of fair value measurement bases are defined as follows:

Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: fair values measured using valuation techniques for all inputs significant to the measurement other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: fair values measured using valuation techniques for which any significant input to the valuation is not based on observable market data (unobservable inputs).

The determination of what constitutes 'observable' requires significant judgement by the Directors.

The Group considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market.

All investments were classified as Level 3 investments as at, and throughout the year to, 31 March 2021. Note 8 on page 62 presents the movements on investments measured at fair value.

When using the price of a recent transaction in the valuations the Company looks to 're-calibrate' this price at each valuation point by reviewing progress within the investment, comparing against the initial investment thesis, assessing if there are any significant events or milestones that would indicate the value of the investment has changed and considering whether a market-based methodology (ie. using multiples from comparable public companies) or a discounted cashflow forecast would be more appropriate.

The main inputs into the calibration exercise, and for the valuation models using multiples, are revenue, EBITDA and P/E multiples (based on the most recent revenue, EBITDA or earnings achieved and equivalent corresponding revenue, EBITDA or earnings multiples of comparable public companies), quality of earnings assessments and comparability difference adjustments. Revenue multiples are often used, rather than EBITDA or earnings, due to the nature of the Group's investments, being in fast-growing, small financial services companies which are not normally expected to achieve profitability or scale for a number of years. Where an investment has achieved scale and profitability the Group would normally then expect to switch to using an EBITDA or earnings multiple methodology.

In the calibration exercise and in determining the valuation for the Group's equity instruments, comparable trading multiples are used. In accordance with the Group's policy, appropriate comparable public companies based on industry, size, developmental stage, revenue generation and strategy are determined and a trading multiple for each comparable company identified is then calculated. The multiple is calculated by dividing the enterprise value of the comparable group by its revenue, EBITDA or earnings. The trading multiple is then adjusted for considerations such as illiquidity, marketability and other differences, advantages and disadvantages between the Group's portfolio company and the comparable public companies based on company specific facts and circumstances.

The main input into the PWERM ('Probability Weighed Expected Return Methodology') was the probability of conversion.This method was used for the convertible loan notes held by the Company.

Total gains and losses on assets measured at Level 3 are recognised as part of Gains on Investments in the Consolidated Income Statement, and no other comprehensive income has been recognised on these assets. The total unrealised return for the year was £26,727,000 (year ended 31 March 2020: £12,683,000).

The table below presents those investments in portfolio companies whose fair values are recognised in whole or in part using valuation techniques based on assumptions that are not supported by prices or other inputs from observable current market transactions in the same instrument and the effect of changing one or more of those assumptions behind the valuation techniques adopted based on reasonable possible alternative assumptions.

Valuation Technique	Fair Value 2021 £'000	Fair Value 2020 £'000	Unobservable Inputs	Reasonably possible shift in input +/-	Change in valuation +/(-) £'000
Multiple methodology	75,461	34,554	Multiple	10%	5,427/(5,444)
			Illiquidity adjustment	30%	(7,422)/8,333
CPORT*	69,536	69,437	Transaction price	10%	6,088/(5,917)
PWERM**	4,503	19,141	Probability of conversion	25%	265/(503)
NAV	4,091	-	Discount to NAV	30%	(1,228)
Sales Price	10,536	-	N/A

* Calibrated price of recent transaction.

** Probability weighted expected return methodology.

14 Substantial holdings in Investments

The table below shows substantial holdings in investments where the Company owns more than 3% of the fully diluted capital of the investee company, and the investment value is more than 5% of the Company's non-current investments.

	2021		2020
	% ownership (fully diluted)	% of portfolio	% ownership (fully diluted)	% of portfolio f
Interactive Investor*	3.8	19.9	3.7	17.7
BullionVault*	11.1	7.0	11.1	9.1
Zopa*	3.0	5.8	6.1	6.4
Augmentum I LP **	100.0	34.8	100.0	36.1
Tide	5.9	11.6	5.9	11.5
Grover	8.3	7.9	-	-
Monese	7.5	6.3	5.4	8.3
Dext (formerly Receipt Bank)	3.7	6.4	3.7	6.1
Farewill	14.1	6.5	13.4	5.9

* indirect ownership via Augmentum I LP.

** Augmentum I LP's registered office is IFC 5, St Helier, Jersey JE1 1ST and it is registered in Jersey.

15 Called up Share Capital

	2021		2020
	Ordinary Shares		Ordinary Shares
	No.	£'000	No.	£'000
Opening issued and fully paid ordinary shares of 1p each	116,931,911	1,171	94,000,000	940
Issue of shares from public offering	23,371,380	234	23,051,911	231
Ordinary shares purchased into treasury	(75,000)	-	(120,000)	-
Issue of shares from Treasury	195,000	-	-	-
Closing issued and fully paid ordinary shares of 1p each	140,423,291	1,405	116,931,911	1,171

On 4 July 2019 23,051,911 ordinary shares were issued. The nominal value of the shares issued was £231,000 and the total gross cash consideration received was £25,818,000. This consideration has been offset against costs of issue, which totalled £827,000.

On 1 November 2020 23,371,380 ordinary shares were issued. The nominal value of the shares issued was £234,000 and the total gross cash consideration received was £28,046,000. This consideration has been offset against costs of issue, which totalled £546,000.

At 31 March 2021 there were no shares held in treasury (2020: 120,000).

16 Net Asset Value per Share

The Net Asset Value ("NAV") per share of 130.4p (2020: 116.1p) is calculated by dividing the NAV of £183,162,000 (2020: £135,793,000) by the number of ordinary shares in issue at the year end amounting to 140,423,291 (31 March 2020: 116,931,911).

17 Related Party Transactions

Balances and transactions between the Company and its subsidiaries are eliminated on consolidation. Details of transactions between the Group and Company and other related parties are disclosed below.

The following are considered to be related parties:

• Frostrow Capital LLP (under the Listing Rules only)
• The Directors of the Company and the Company's subsidiary, Augmentum Fintech Management Limited
• Augmentum Fintech Management Limited

Details of the relationship between the Company and Frostrow Capital LLP, the Company's AIFM, are disclosed on page 22. Details of fees paid to Frostrow by the Company and Group can be found in Note 2 on page 59.

Details of the remuneration of all Directors can be found on page 43. Details of the Directors' interests in the capital of the Company can also be found on page 43.

Augmentum Fintech Management Limited is appointed as the Company's delegated Portfolio Manager. The Portfolio Manager earns a portfolio management fee of 1.5% of NAV up to £250 million and 1.0% of NAV for any excess over £250 million and is entitled to a carried interest fee of 15% of net realised cash profits once the Company has received an annual compounded 10% realised return on its investments. Further details of this arrangement are set out on page 22 in the Strategic Report. During the year the Portfolio Manager received a portfolio management fee of £2,235,000 (2020: £1,861,000), which has been eliminated on consolidation and therefore does not appear in these accounts. A carried interest provision of £6,508,000 (2020: £2,367,000) has been accrued. No carried interest fee is payable or has been paid. There were no outstanding balances due to the Portfolio Manager at the year end (2020: nil).

18 Capital Risk Management

	Group 2021 £'000	Group 2020 £'000
Equity
Equity share capital	1,405	1,171
Retained earnings and other reserves	181,757	134,622
Total capital and reserves	183,162	135,793

The Group's objective in the management of capital risk is to safeguard its liquidity in order to provide returns for shareholders and to maintain an optimal capital structure. In doing so the Group may adjust the amount of dividends paid to shareholders or issue new shares or debt.

The Group manages the levels of cash deposits held whilst maintaining sufficient liquidity for investments and operating expenses.

There are no externally imposed restrictions on the Company's capital.

There is a mis-match between accounting standards which requires the Company's subsidiary, AFML, to recognise carried interest potentially payable to employees based on current investment valuations but is not permitted to recognise the matching carried interest fee payable from the Company to AFML until it is virtually certain to be paid. As a result of this mis-match AFML has a net deficit position on both an accounting and regulatory capital basis. The Board have reviewed this matter and consider that the solvency of AFML is not affected by this as it would only, under the carried interest arrangements, pay carried interest to employees after receipt of the carried interest from the Company.

19 Basis of Accounting and Significant Accounting Policies

19.1 Basis of preparation

The Group and Company Financial Statements for the year ended 31 March 2021 have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union ("IFRS").

The Financial Statements have been prepared on a going concern basis and under the historical cost basis of accounting, modified to include the revaluation of certain assets at fair value, as disclosed in Note 19.4. The Board has considered a detailed assessment of the Group and Company's ability to meet their liabilities as they fall due, including stress tests which modelled the effects of a fall in portfolio valuations and liquidity constraints on the Group and Company's financial position and cash flows. Further information on the stress tests are provided in the Report of the Audit Committee on page 50. The results of the tests showed that the Group and Company would have sufficient cash to meet their liabilities as they fall due. Based on the information available to the Directors at the time of this report, including the results of the stress tests, and the Group and Company's cash balances, the Directors are satisfied that the Group and Company have adequate financial resources to continue in operation for at least the next 12 months and that, accordingly, it is appropriate to adopt the going concern basis in preparing these financial statements.

In order to reflect the activities of an investment trust company, supplementary information which analyses the Consolidated Income Statement between items of a revenue and capital nature has been presented alongside the Consolidated Income Statement. In analysing total income between capital and revenue returns, the Directors have followed the guidance contained in the Statement of Recommended Practice for investment companies issued by the Association of Investment Companies issued in October 2019 (the "SORP").

The recommendations of the SORP which have been followed include:

• Realised and unrealised profits or losses arising on the revaluation or disposal of investments classified as held at fair value through profit or loss should be shown in the capital column of the Consolidated Income Statement. Realised gains are taken to the realised reserves in equity and unrealised gains are transferred to the unrealised reserves in equity.
• Other returns on any investment (whether in respect of dividends, interest or otherwise) should be shown in the revenue column of the Consolidated Income Statement. The total of the revenue column of the Consolidated Income Statement is taken to the revenue reserve in equity.
• The Board should determine whether the indirect costs of generating capital returns should be allocated to capital as well as the direct costs incurred in generating capital profits. In this regard the Board has decided to follow a non-allocation approach to indirect costs, which will therefore be charged in full to the revenue column of the Consolidated Income Statement.

19.2 Basis of Consolidation

The Consolidated Financial Statements include the Company and certain subsidiary undertakings.

IFRS 10 and IFRS 12 define an investment entity and include an exemption from the consolidation requirements for investment entities. The Company has been deemed to meet the definition of an investment entity per IFRS 10 as the following conditions exist:

• The Company has multiple unrelated investors which are not related parties, and holds multiple investments
• Ownership interests in the Company are exposed to variable returns from changes in the fair value of the Company's net assets
• The Company has obtained funds for the purpose of providing investors with investment management services
• The Company's business purpose is investing solely for returns from capital appreciation and investment income
• The performance of investments is measured and evaluated on a fair value basis.

The Company will not consolidate the portfolio companies or other investment entities it controls. The principal subsidiary Augmentum Fintech Management Limited as set out in Note 9 is wholly owned. It provides investment related services through the provision of investment management. As the primary purpose of this subsidiary is to provide investment related services that relate to the Company's investment activities it is not held for investment purposes. This subsidiary has been consolidated.

The Company also owns 100% of the interests in Augmentum I LP (the 'LP'). As this LP is itself an investment entity and is held as part of the Company's investment portfolio it has not been consolidated.

19.3 Application of New Standards

(i) New standards, interpretations and amendments effective from 1 April 2020

There were no new standards or interpretations effective for the first time for periods beginning on or after 1 April 2020 that had a significant effect on the Group's financial statements.

(ii) New standards, interpretations and amendments not yet effective

There are a number of standards and interpretations which have been issued by the International Accounting Standards Board ('IASB') that are effective in future accounting periods. The Group does not expect any of the standards issued by the IASB, but not yet effective, to have a material impact on the Group or Company.

19.4 Investments

All investments are defined by IFRS as fair value through profit or loss (described in the Financial Statements as Investments held at fair value) and are subsequently measured at reporting dates at fair value. The fair value of direct unquoted investments is calculated in accordance with the Principles of Valuation of Investments below. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.

Increases or decreases in valuation are recognised as part of gains on investments at fair value in the Consolidated Income Statement.

Principles of Valuation of Investments

(i)General

The Group estimates the fair value of each investment at the reporting date in accordance with IFRS 13 and the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines.

Fair value is the price for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. In estimating fair value, the AIFM and Board apply valuation techniques which are appropriate in light of the nature, facts and circumstances of the investment and use reasonable current market data and inputs combined with judgement and assumptions. Valuation techniques are applied consistently from one reporting date to another except where a change in technique results in a better estimate of fair value.

In general, the enterprise value of the investee company in question will be determined using one of a range of valuation techniques. The enterprise value is adjusted for factors such as surplus assets, excess liabilities or other contingencies or relevant factors; the resulting amount is apportioned between the investee company's relevant financial instruments according to their ranking and the effect of any instrument that may dilute economic entitlements.

(ii) Unlisted Equity Investments

In respect of each unlisted investment one or more of the following valuation techniques is used:

• A market approach, based on the price of the recent investment, market multiples or industry valuation benchmarks.
• A probability-weighted expected returns methodology . Under the PWERM fair value is based on consideration of values for the investment under different scenarios. This will primarily be used where there is a convertible element to the investment
• A net assets based approach based on the value of the underlying assets of the investment.

In assessing whether a methodology is appropriate techniques that use observable market data are preferred.

Price of Recent Investment/Transaction

Where the investment being valued was itself made recently, or there has been a third party transaction in the investment, the price of the transaction may provide a good indication of fair value. Using the Price of Recent Investment technique is not a default and at each reporting date the fair value of investments is estimated to assess whether changes or events subsequent to the relevant transaction would imply a material change in the investment's fair value.

Multiple

Under the multiple methodology an earnings or revenue multiple technique is used. This involves the application of an appropriate and reasonable multiple to the maintainable earnings of an investee company.

Multiples used are usually taken from current market-based multiples, reflected in the market valuations of quoted comparable companies or the price at which comparable companies have changed ownership. Differences between these market-based multiples and the investee company being valued are reflected by adjusting the multiple for points of difference which might affect the risk and growth prospects which underpin the multiple. Such points of difference might include the relative size and diversity of the entities, rate of revenue/earnings growth, reliance on a small number of key employees, diversity of product ranges, diversity and quality of customer base, level of borrowing, and any other reason the quality of revenue or earnings may differ.

In respect of maintainable revenue/earnings, the most recent 12 month period, adjusted if necessary to represent a reasonable estimate of the maintainable amount, is used. Such adjustments might include exceptional or non-recurring items, the impact of discontinued activities and acquisitions, or forecast material changes.

PWERM ('Probability-Weighted Expected Returns Methodology')

Under the PWERM potential scenarios are identified. Under each scenario the value of the investment is estimated and a probability for each scenario was selected. The fair value is then calculated as the sum of the value under each scenario multiplied by its probability.

Net Assets

For the net asset approach the fair value estimate is based on the attributable proportion of the reported net asset value of the investment derived from the fair value of underlying assets / investments. Valuation reports provided by the manager or general partner of the investments are used to calculate fair value where there is evidence that the valuation is derived using fair value principles that are consistent with the Company's accounting policies and valuation methods. Such valuation reports may be adjusted to take account of changes or events to the reporting date, or other facts and circumstances which might impact the underlying value.

19.5 Cash and Cash Equivalents

Cash comprises cash at bank and short-term deposits with an original maturity of less than 3 months.

19.6 Presentation and Functional Currency

The Group's and Company's presentation and functional currency is Pounds Sterling ("Sterling"), since that is the currency of the primary economic environment in which the Group operates.

19.7 Other income

Interest income received from cash equivalents is accounted for on an accruals basis.

19.8 Expenses

Expenses are accounted for on an accruals basis, and are charged through the revenue column of the Consolidated Income Statement except for transaction costs and the carried interest fee as noted below.

Transaction costs are legal and professional fees incurred when undertaking due diligence on investment transactions. Transaction costs, when incurred, are recognised in the Income Statement. If a transaction successfully completes, as a direct cost of an investment, the related transaction cost is charged to the capital column of the Income Statement. If the transaction falls through the related cost is charged to the revenue column of the Income Statement.

19.9 Carried Interest Fee

The Group offers certain employees the opportunity to participate in the returns from successful investments. "Carried Interest Fee" is the term used for amounts accruing to or payable to employees on investment-related transactions. Dependent on the timing of the investment, investments will be allocated to a basket and each basket will be subject to its own carried interest fee as set out on page 22.

Carried interest is accrued if its performance conditions would be achieved if the remaining assets in that basket were realised at fair value, at the Statement of Financial Position date. Carried interest is equal to the share of profits in excess of the performance conditions in the basket.

The Group accounts for the carried interest fee as an other long term employment benefit and the cost, or reversal, of the employment benefit is recognised as an expense over the relevant vesting period with a corresponding liability.

The Company accrues for the Carried Interest Fee in full.

Carried Interest Fees will be charged to the capital column of the Income Statement and taken to the Capital Reserve.

19.10 Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the Group's incremental borrowing rate. Right-of-use assets are measured at the amount of the lease liability less provisions for dilapidations, where applicable.

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease.

The Group has adopted the modified retrospective approach when adopting IFRS 16. A reconciliation between the operating lease commitment disclosed in the 31 March 2019 financial statements and the aggregate lease liability recognised in the statement of financial position at 1 April 2019 on adoption of IFRS 16 is shown in note 5.

19.11 Taxation

The tax effect of different items of income/gain and expense/loss is allocated between capital and revenue on the same basis as the particular item to which it relates.

19.12 Deferred Tax

Deferred taxation is provided on all timing differences other than those differences regarded as permanent. Deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available from which the reversal of timing differences can be utilised. Deferred tax is not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax is provided at the tax rates that are expected to apply in the year when the liability is settled or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the Statement of Financial Position date.

19.13 Receivables and Payables

Receivables and payables are typically settled in a short time frame and are carried at amortised cost. As a result, the fair value of these balances is considered to be materially equal to the carrying value, after taking into account potential impairment losses.

19.14 Share Capital

Ordinary shares issued by the Group are recognised at the proceeds or fair value received with the excess of the amount received over nominal value being credited to the share premium account. Direct issue costs are deducted from equity.

19.15 Share Premium and Special Reserve

The share premium account arose following the Company's Admission and represented the difference between the proceeds raised and the par value of the shares issued. Costs of the share issuance were offset against the proceeds of the relevant share issue and also taken to the share premium account.

Subsequent to admission and following the approval of the Court, the initial share premium account was cancelled and the balance of the account was transferred to the Special Reserve. The purpose of this was to enable the Company to increase the distributable reserves available to facilitate the payment of future dividends or with which to make share repurchases.

19.16 Revenue and Capital Reserves

Net capital return is added to the Capital Reserve in the Consolidated Statement of Financial Position, while the net revenue return is added to the Revenue Reserve. When positive, the revenue reserve is distributable by way of dividend, as is any realised portion of the capital reserve. The realised portion of the capital reserve is £(208,000) (2020: £(171,000)) representing transaction costs charged to capital.

19.17 Critical Accounting Judgements and Key Sources of Estimation Uncertainty

Critical accounting judgements and key sources of estimation uncertainty used in preparing the financial information are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. The resulting judgements and estimates will, by definition, seldom equal the related actual results.

There is one significant judgement included in the presentation of the Consolidated Financial Statements, that the Company has determined it is an investment company as set out in Note 19.2.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty in the reporting year, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Fair value measurements and valuation processes

Unquoted assets are measured at fair value in accordance with IFRS 13 and the IPEV Valuation Guidelines. Decisions are required in order to determine the appropriate valuation methodology and subsequently in determining the inputs into the valuation model used. These decisions include selecting appropriate quoted company comparables, appropriate multiples to apply, adjustments to comparable multiples and estimating future cash flows of investee companies. In estimating the fair value of an asset, market-observable data is used, to the extent it is available.

The Valuations Committee, which is chaired by a Director, determines the appropriate valuation techniques and inputs for the model. The Audit Committee considers the work of the Valuations Committee and the results of their discussion with the AIFM, Portfolio Manager and the external auditors and works closely with the AIFM and Portfolio Manager to review the appropriate valuation techniques and inputs to the model. The Chairman of the Audit Committee reports its findings to the Board of Directors of the Group every six months to explain the cause of fluctuations in the fair value of the investments.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in Note 19.4. As set out in Note 19.9 carried interest is calculated based on the valuation of the investments and as such is considered a significant accounting estimate.

20 Post Balance Sheet Events

There are no significant events after the end of the reporting period requiring disclosure.

.

2021 Accounts

The figures and financial information for 2021 are extracted from the Annual Report and financial statements for the year ended 31 March 2021 and do not constitute the statutory accounts for the year. The Annual Report and financial statements include the Report of the Independent Auditor which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and financial statements have not yet been delivered to the Registrar of Companies.

2020 Accounts

The figures and financial information for 2020 are extracted from the published Annual Report and financial statements for the period ended 31 March 2020 and do not constitute the statutory accounts for that year. The Annual Report and financial statements have been delivered to the Registrar of Companies and included the Report of the Independent Auditor which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

Annual report and financial statements

Copies of the Annual Report and financial statements will be posted to shareholders shortly and will be available on the Company's website (www.augmentum.vc) or in hard copy format from the Company Secretary.

The Company's Annual Report for the year ended 31 March 2021 will be submitted to the Financial Conduct Authority and will shortly be available for inspection on the National Storage Mechanism (NSM) via https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Annual General Meeting will be held on Tuesday, 21 September 2021 at 11.00 a.m.

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, or forms part of, this announcement.

Disclaimer

This announcement does not constitute a new prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor.

Peel Hunt LLP ("Peel Hunt"), Nplus1 Singer Capital Markets Limited and Nplus1 Singer Advisor LLP (together "Nplus1"), which are authorised and regulated by the Financial Conduct Authority, are acting for the Company only in connection with certain matters described in this announcement and are not acting for or advising any other person, or treating any other person as their client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Peel Hunt and Nplus1 or advice to any other person in relation to the matters contained herein.

The shares of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933 (as amended) (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold into or within the United States, absent registration, except pursuant to an applicable exemption from, or in a transaction that is not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any relevant state or other jurisdiction of the United States. Moreover, the shares of the Company have not been, nor will they be, registered under the applicable securities laws of India, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA. Further, the Company is not, and will not be, registered under the US Investment Company Act of 1940, as amended. The shares of the Company may be offered outside of the United States pursuant to the provisions of Regulation S of the Securities Act. Subject to certain exceptions, the shares of the Company may not be offered or sold in India, the United States, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than to professional investors in certain EEA member states for which marketing approval has been obtained) or to, or for the account or benefit of, any national, resident or citizen of India, the United States, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than to professional investors in certain EEA member states for which marketing approval has been obtained). The distribution of this announcement, in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

-ENDS-