Octopus Titan VCT plc

Backing Britain’s

brightest businesses

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022

Titan’s mission is to invest

in the people, ideas and

industries that will change

the world.

Octopus Titan VCT plc (‘Titan’ or the

‘Company’) has earned a reputation

for backing pioneering entrepreneurs.

It invests in companies that are using

technology to shape the future.

Octopus

Ventures awards

Octopus

Investments awards

FinancialsGovernanceStrategic report

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 1

How Titan works p7

Portfolio Manager’s review p23

Financials p77

Find it fast

Strategic report

Highlights 2

Chair’s statement 3

Titan’s objectives 6

How Titan works 7

Portfolio Manager’s review 23

Operating responsibly 39

Section 172(1) statement 45

Risks and risk management 51

Business review 55

Governance

Board of Directors 58

Corporate governance report 60

Leadership and purpose 62

Division of responsibilities 63

Composition, succession and evaluation 64

Audit, risk and internal control 66

Management Engagement Committee 69

Remuneration 70

Directors’ report 73

Financials

Directors’ responsibilities statement 78

Independent auditor’s report 79

Income statement 86

Balance sheet 87

Statement of changes in equity 88

Cash ﬂow statement 90

Notes to the ﬁnancial statements 91

Appendix 106

Shareholder information and contact details 111

Glossary of terms 115

Directors and advisers 116

Notice of Annual General Meeting 117

Key dates

Interim dividend payment date 24 May 2023

Shareholder event 7 June 2023

Annual General Meeting 14 June 2023

Interim results to 30 June 2023 published September 2023

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 2

Highlights

Net assets (£’000)

NAV + cumulative dividends

Dividends paid in the year

(Loss)/proﬁt after tax (£’000)

Total return (p)¹

Dividend yield %

NAV per share

Total return %

Dividend declared

£1,051,760

2021: £1,373,041

173.9p

2021: 197.7p

5.0p

2021: 11.0p

£(319,215)

2021: £216,557

(23.8)p

2021: 19.7p

4.7%

2021: 11.3%

76.9p

2021: 105.7p

(22.5)%

2021: 20.3%

3.0p

2021: 3.0p

1. Total return is an alternative performance measure, calculated as movement in NAV per share in the period plus dividends paid in the period.

2. Total return % is an alternative performance measure, calculated as total return/opening NAV.

3. Dividend yield is an alternative performance measure, calculated as dividends paid/opening NAV.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 3

The net asset value (NAV) per share at

31 December 2022 was 76.9p which, adjusting for

dividends paid, represents a net decrease of 23.8p

per share from 31 December 2021 or a total return of

(22.5)%. The Total Value (NAV plus cumulative dividends

paid per share since launch) at the end of the period

was 173.9p (31 December 2021: 197.7p). This decline is,

of course, disappointing but reﬂects the dicult global

macro environment we have faced in the last year

and follows a record year in 2021 in terms of both exit

proceeds and total return. Despite the recent decrease

in NAV, total return over ﬁve years is 11% and the tax-free

annual compound return for the original shareholders

since Titan’s launch in October 2007 is 4.2%.

In the 12 months to 31 December 2022, we utilised

£355 million of our cash resources, comprising

£157 million in new and follow-on investments,

£50 million in dividends (net of the Dividend

Reinvestment Scheme), £41 million in share buybacks,

£43 million in annual investment management

fees and other running costs, and a £64 million

performance fee payable in respect of the year ended

31 December 2021. Together, this utilised 93% of our

cash and cash equivalents at 31 December 2021.

The cash and corporate bond balance of £179 million at

31 December 2022 represented 17% of net assets at that

date, compared to 28% at 31 December 2021.

The relatively higher cash position as at

31 December 2021, was due to the signiﬁcant disposal

proceeds received from proﬁtable exits in 2021 and

was accelerated by the 2021 fundraise which closed

having raised more than £200 million in November 2021,

compared to typical closing dates of March or April.

Performance incentive fees

As the 2022 total return has been negative, and

net assets have declined since 31 December 2021,

no performance fee is payable. To remind you, the

performance fee is calculated as 20% on net gains

above the High Water Mark, the highest total return

as at previous year ends, which is currently set as 197.7p

as at 31 December 2021. See Note 19 of the ﬁnancial

statements for further details.

I am pleased to present the annual

results for Titan for the year ended

31 December 2022.

Chair’s statement

Titan’s latest fundraise

£237 million

Total return over ﬁve years

11%

Dividends paid in 2022

Highlights

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 4

Chair’s statement continued

Dividends

Following careful consideration, I am pleased to

conﬁrm that on 16 March 2023 the Board declared a

second interim dividend of 3p per share in respect of

the year ended 31 December 2022. This will be paid

on 24 May 2023 to shareholders on the register as at

5 May 2023, resulting in full-year dividends of 5p. This

represents a tax-free dividend yield of 4.7% on the NAV

at 31 December 2021, equivalent to 7% for a higher rate

tax payer. As shareholders will know, our ambition is to

pay an annual dividend of 5p per share, supplemented

by special dividends when appropriate.

If you are one of the 26% of shareholders who take

advantage of the Dividend Reinvestment Scheme

(DRIS), your dividend will be receivable in Titan shares.

This is an excellent way for those of you who prefer the

capital value of your investment to grow to achieve your

investment objectives.

Since inception, we have now paid 97p in tax-free

dividends per share, excluding the recently declared

dividend.

Fundraise and buybacks

On 10 November 2022, we launched a new oer to raise

up to £175 million, with an over-allotment facility of up

to £75 million. On 6 March 2023, we were pleased to

announce, following strong investor demand, that the

over-allotment facility would be used, increasing the

maximum amount that could be raised under the Oer to

£250 million. The Oer was closed to new applicants on 5

April 2023 having raised in total £237 million. I would like to

take this opportunity to welcome all new shareholders and

thank all existing shareholders for their continued support.

During the period, Titan repurchased 45 million

shares (representing 3.0% of the net asset value as at

31 December 2021). Further details can be found in Note 14

of the ﬁnancial statements. The Board has continued to

buy back shares from shareholders at no greater than a

5% discount to NAV per share. Whilst the Board will seek

authority to continue to be able to buy back up to 14.99%

of Titan’s shares, the Directors intend that this authority

will only be used for a maximum of 5% of the share

capital annually.

Board of Directors

Matt Cooper, having originally been appointed to the

Board of Octopus Titan 1 VCT in October 2007, and then

continuing as a Director after the merger of the various

Titan VCTs in 2014, has decided to retire from the Board

and will not be seeking re-election at the forthcoming

Annual General Meeting (AGM). It has been a pleasure to

work with Matt, and I would like to take this opportunity

to thank him on behalf of the Board and the shareholders

for his substantial contribution over the years and help

in guiding Titan through its dierent phases of growth.

A new Non-Executive Director will be appointed at the

completion of a structured recruitment process which is

already in ﬂight. All the other Directors have indicated their

willingness to remain on the Board, and Anthony Rockley

and Jane O’Riordan will be seeking re-election at the AGM.

AGM and shareholder event

The AGM will take place on 14 June 2023 from 12.00 noon

and will be held at One Moorgate Place, London,

EC2R 6EA. Full details of the business to be conducted

at the AGM are given in the Notice of the AGM on

pages 117 to 120.

Shareholders’ views are important, and the Board

encourages shareholders to vote on the resolutions

within the Notice of AGM on pages 117 to 120 using the

proxy form, or electronically at

www.investorcentre.co.uk/eproxy. The Board has

carefully considered the business to be approved at the

AGM and recommends shareholders to vote in favour

of all the resolutions being proposed, as the Board will

be doing.

In addition to the AGM, this year, we are also pleased to

oer shareholders the opportunity to attend an online

shareholder webinar on 7 June at 12.00 noon, to make

sure we can respond to any questions you may have for

either the Portfolio Manager or Titan Board prior to the

proxy forms needing to be completed. At this event,

Malcolm Ferguson (lead fund manager for Titan) and

I will present. For details on how to sign up please see

octopustitanvct.com. Alternatively, shareholders are

also invited to send any questions they may have via

email to TitanAGM@octopusinvestments.com.

93%

increase in Total

Value since 2008

97p

dividends

paid to date

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 5

Chair’s statement continued

Outlook

The impact of the economic downturn is being felt

globally. The escalation of the conﬂict in Ukraine,

central banks raising interest rates, the cost-of-living

crisis deepening, political uncertainty and high inﬂation

rates have wide-ranging impacts, and early-stage

venture investments and VCTs are not immune to

these turbulent trends. The Association of Investment

Companies (AIC) conducted research across the VCT

market and found that, after 13 consecutive years

of positive returns, the VCTs analysed delivered a

loss in 2022. The decline in Titan’s NAV is, of course,

disappointing. Our accounting policy is to value Titan’s

unquoted companies in line with the International

Private Equity and Venture Capital Guidelines, which

require an assessment of the fair value of each

investment at 31 December 2022. In some cases,

valuations have been adjusted downwards to reﬂect

both the tougher conditions and lower market

comparables, as this inﬂuences what an acquirer

might deem a fair price to pay for a business in the

current climate.

In other cases, a decreased valuation will reﬂect a

portfolio company’s speciﬁc performance, and we

believe that, in the short term, we may unfortunately

see more companies fail – they are operating under

more dicult circumstances, targets set at the point

of initial investment may be more dicult to achieve,

and it may become more challenging for companies to

raise funds. More can be read about the cash runway

of the portfolio companies in the Portfolio Manager’s

Review on page 38.

However, despite this dicult short-term outlook, our

long-term view of early-stage venture capital remains

positive. The Board is reassured by the breadth and

depth of Titan’s portfolio as it spans seven investment

themes (Fintech, Health, Deep tech, Consumer,

Business-to-business (B2B) software, Bio and Climate)

across dierent stages of development. This diversity

means that Titan is well placed to navigate the current

situation. Some portfolio companies should be more

resilient to the current market volatility, such as those

with recurring revenue models. Some will also thrive,

as many tech-enabled companies will look to take

advantage of the increased willingness to adopt new

technologies to navigate the changing landscape.

Great companies will continue to be established,

funded and grow in uncertain times.

I am pleased to report that in the 12-month period,

Titan completed four proﬁtable disposals (three full

exits and one partial), including Glofox being acquired

by ABC Fitness Solutions, representing a 3x return on

Titan’s initial investment, and Digital Shadows being

sold to ReliaQuest for $160 million. Collectively, the four

companies received investment of £22 million from the

Company and the combined realised consideration

totalled £48 million (in cash, shares and/or deferred

amounts). More can be read about these disposals in

the Portfolio Manager’s Review on page 25.

Titan also invested £157 million in new and follow-on

opportunities in the year to 31 December 2022, which

brings the total number of companies in the portfolio

to 128 at 31 December 2022. The diversity and volume of

exciting new investments, and the upcoming pipeline of

opportunities, is a testament to the work the investment

team continues to put into sourcing, securing and

working with such businesses successfully.

VCTs have long provided a compelling opportunity

for UK investors to provide funding for businesses

in a tax-ecient way, and we look forward to Titan

continuing to do so in the coming year. I would like to

conclude by thanking both the Board and the Octopus

team on behalf of all shareholders for their hard work.

Tom Leader

Chair

24 April 2023

Governance FinancialsStrategic report

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 6

Titan’s objectives

Invest in pioneering companies

Titan’s investment strategy aims to back the next generation

of entrepreneurs leading technology and tech-enabled

businesses across seven dedicated areas – Health, Fintech,

Deep tech, Consumer, B2B software, Bio and Climate.

Long-term sustainability of the VCT

Over the long term, Titan targets:

• maintaining a NAV per share of at least 90p after

the payment of dividends;

• generating sucient cash from realisations within

the portfolio to cover share buybacks, dividends and

operating costs; and

• capital raised from fundraising predominantly utilised

for new and follow-on investments.

Regular tax-free dividend

Titan targets regular dividends of 5p per annum with the

potential to pay special dividends as investments are realised

at a signiﬁcant proﬁt. As at the date of this document,

Titan has paid total dividends of 97p per share to investors

and announced a further 3p of dividends for payment

in May 2023. However, this is not a guarantee, and no

projection or forecast is expressed or implied.

Read more about cash deployment and creating

value for the long term on pages 21 and 22

Titan is the largest VCT in the market, with over

£1 billion of funds under management and a diverse

portfolio of over 125 companies. Titan is managed by

the investment team, called Octopus Ventures, and

has a proud history of backing some of the UK’s most

successful entrepreneurs including early investments

in Depop, WaveOptics, Zoopla Property Group and

ManyPets. Octopus Ventures continues to seek out

and back companies with the potential to become

generation-deﬁning companies.

Titan’s success can be attributed to three things:

• access to a wide range of exciting investment

opportunities;

• being in a strong position to back winners through

multiple investment rounds; and

• the team at Octopus Ventures has the resources and

experience to provide practical support and guidance

to the entrepreneurs we back to increase the chances

of success.

Octopus Ventures’ skilled and experienced team are

one of the largest venture capital investment teams in

Europe. Operating from its base in London, alongside an

oce in New York, the team invest mainly in early-stage,

UK-based, tech-enabled companies – with the potential

to grow quickly.

The team back pioneering entrepreneurs who are

changing the world. Their areas of focus encompass

Health, Fintech, Deep tech, Consumer, B2B software,

Bio and Climate.

Creating a brand-new market, or disrupting an

existing one, doesn’t happen overnight. Titan’s

typical investment horizon is ﬁve to ten years, and an

early-stage company will often need several rounds

of funding as it grows. That’s why entrepreneurs want

to partner with investors who can support them at

every stage throughout their journey. It is thanks to

shareholder support that Titan can do this.

An important feature of investing in early-stage

companies is that there’s no guarantee they will

be successful or deliver a return on the investment.

The team recognise that smaller companies, on average,

have a higher failure rate than companies listed on

the main market of the London Stock Exchange.

To mitigate the risks, investments are made across a

range of sectors, geographies and investment stages

to oer diversiﬁcation across Titan’s portfolio. The team

target a 20% initial equity stake in a company, and

then can invest further when agreed milestones have

been achieved, both of which oer the opportunity to

enhance the return for Titan.

Governance FinancialsStrategic report

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 7

How Titan works

Titan looks to invest in companies with talented

entrepreneurs and management teams, world-changing

ideas and enormous market opportunities.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 8

How Titan works continued

Spotlight on supporting portfolio companies

The best entrepreneurs are selective about accepting investment, so it’s important to

have a good reputation for adding value beyond the ﬁnance that can be provided.

The Octopus Ventures team work with the entrepreneurs they back by holding

workshops on strategy, advising on sales and marketing plans, and providing

connections to other companies which can help their businesses grow. The quality

of a portfolio management team can make or break a young business, which is why

Octopus Ventures has expanded its in-house People and Talent team supporting the

portfolio companies. The team’s sole focus is on partnering and supporting its portfolio

companies’ leaders to help them be better and faster to execute successfully. The

People and Talent experts work with founders to make sure they are set up for success

when it comes to recruitment, retention, leadership teams and culture. All portfolio

companies are provided with a dedicated partner who supports them and their teams

throughout their scaling journey.

The Octopus Ventures People and Talent team

specialise in unlocking potential within our

portfolio companies and their entrepreneurs.

The People and Talent team worked with Orca

Computing’s founders to develop and deliver

training on eective communication and improving

collaboration across the organisation. They implemented

essential tools for retention and engagement such as

compensation philosophies and career levels.

“Huge amount of knowledge within the team, which

is very relevant for us as we scale. The advice and

support is highly speciﬁc to our needs and business...

and delivered eciently at the right time. The team

have lived and worked in enviable, successful tech

companies, so they’re great at relaying ﬁrst-hand

experiences.”

Richard Murray

Co-founder and Chief Executive Ocer

Portfolio company testimonial

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 9

Access to

Octopus

Giving

Octopus Giving is Octopus’ charitable

foundation which now supports Titan’s

portfolio, oering matched funding for

charity fundraising, volunteer sessions with

Octopus’ charity partners and dedicated

support and advice for portfolio companies

to establish their own charity foundation.

How Titan works continued

Some of the support and services oered to portfolio companies:

Candidate

database

Coaching

hub

Carbon

management

tool

Partnership

with Harley

Therapy

Platform of

templates and

resources

Operating

consultant

network

Community

Aimed at connecting Titan’s early-stage

portfolio with candidates in the market

to support their recruitment objectives.

Leaders derive great value from working

with a coach, so on the hub there is access

to a dedicated and vetted group of coaches

who specialise in working with founders.

The hub is designed to remove the common

issues which impede founders, including not

knowing where to ﬁnd a great coach and not

understanding what makes a great coach.

All portfolio companies are provided

access to a complimentary carbon

management tool to help inform their

green development and carbon footprint.

Oering mental health support from

professional therapists to all of Titan’s

portfolio company founders to help

support them to perform at their best,

not just at times of crises, but to be

instrumental in enabling them to achieve

their full potential in all areas of life.

This makes information accessible to all

founders, ranging from environmental

to parental leave policy templates, to

tips on how to design an organisational

structure.

A network made up of experts who

are focused on working with start

ups. These consultants can support

portfolio companies on project work, ﬁll

a temporary role or work part time with

a portfolio company.

Connecting one of the largest venture

capital communities in Europe for

continued support and shared learning.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 10

Backing pioneers who seek to vastly improve society’s

ability to exchange and allocate ﬁnancial resources

and risk.

Portfolio company examples

31 28%

portfolio companies of portfolio companies

by value

Portfolio value

by investment

focus (%)

Fintech

Deep tech

Health

Consumer

B2B software

Bio

Climate

How Titan works continued

Our investment focus

Fintech

28%

15%

18%

15%

18%

Titan’s portfolio spans seven investment themes including Fintech, Health,

Deep tech, Consumer, B2B software, Bio and Climate across dierent stages

of development. Below you can read more about each area of focus and see

some portfolio examples.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 11

How Titan works continued

Our investment focus continued

Backing the innovators transforming the everyday in

how we live, work, travel, play, rest and recuperate.

Backing pioneers with the outrageous ambition to

transform the face of health and help us all live better

for longer.

Focusing on the tools and technologies that will power

the next industrial revolution. These include quantum

computing, robotics and drones, sensory human

augmentation and 3D printing.

Portfolio company examplesPortfolio company examplesPortfolio company examples

23 15%

portfolio companies of portfolio companies

by value

21 18%

portfolio companies of portfolio companies

by value

25 15%

portfolio companies of portfolio companies

by value

Health ConsumerDeep tech

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 12

Backing the people and businesses that are powering

planet-friendly progress by creating a circular economy,

decarbonising global energy systems and infrastructure,

reducing energy consumption, greening ﬁnance,

protecting and developing ecosystems and erasing our

historical footprint through carbon removal technologies.

Bioscience PHDs, former operators and spinout

specialists investing in biotech and techbio trailblazers

in sectors from therapeutics to energy and creating a

bioscience-led revolution.

Backing outstanding teams with proven, scalable

business models and excellent execution capabilities.

Portfolio company examplesPortfolio company examplesPortfolio company examples

11 3%

portfolio companies of portfolio companies

by value

5 3%

portfolio companies of portfolio companies

by value

12 18%

portfolio companies of portfolio companies

by value

B2B software Bio Climate

How Titan works continued

Our investment focus continued

Governance FinancialsStrategic report

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 13Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 13

As an investment team, this means:

How Titan works continued

Investment strategy

Talented and

ambitious teams

Big market

opportunity

Innovative

technology

Rapid pace

of growth

25+

new early-stage

investments per year

£1-10m

initial investment

from Titan

20%

targeted initial

equity stake

10x+

return

targeted on initial

investment

Invest

further

where we can

enhance returns

What and who Titan invests in:

By owning shares in Titan you gain access to a portfolio of over

125 early-stage companies with high-growth potential operating

across a diverse range of sectors.

The net asset value (NAV) is the combined value of all

the assets owned by Titan after deducting the value of

its liabilities. The NAV is comprised of dierent elements,

as shown in the diagram. 79% is derived from the value

of the underlying investments. 9% is held as highly

liquid cash in the bank and money market funds which

is required for investments. The upcoming pipeline of

investments is closely monitored to make sure that

there is always cash available for funding companies.

The remaining 12% of the value is corporate bonds,

net creditors and debtors.

NAV

breakdown

Top 20

The value of the top 20 investments as

at 31 December 2022

Other investments

Value of remaining portfolio

investments as at 31 December 2022

Cash

Value of cash in bank and money

market funds

Other

Value of corporate bond portfolio,

debtors less creditors

46%

Read more > page 39

The Octopus Ventures team

One of Europe’s most experienced investment teams with

35 investment professionals focusing on Titan.

Scale

Total assets under management (AUM) of over £1 billion,

making Titan the largest VCT in the UK (as at 31 December

2022).

An established and diversiﬁed portfolio

A portfolio of over 125 early-stage, high-growth,

tech-enabled companies operating across a wide variety

of industries.

How Octopus Ventures ﬁnds portfolio companies

1. Active network management and deal monitoring

2. Proprietary technology used to support deal sourcing

3. 2,800+ opportunities reviewed

4. 290+ preliminary meetings

5. 25+ new investments per year

Ongoing support

The Octopus Ventures team work with the portfolio

companies it backs to make their success more likely,

whether that’s taking a board seat, helping them

expand overseas or introducing them to the dedicated

People and Talent team.

Mitigating risk

Titan looks to mitigate risk through building a portfolio

of companies across a diverse range of sectors, business

models and investment stages and looks to take an

initial material equity stake in the business.

Strategic report Governance Financials

How Titan works continued

Measuring our performance

The Board has identiﬁed eight key performance

measures to assess Titan’s success in meeting these

objectives. Some of these are classiﬁed as alternative

performance measures (APMs) in line with Financial

Reporting Council (FRC) guidance. The Glossary of

Terms on page 115 has further details:

As a VCT, Titan’s objective is to provide shareholders with

attractive dividends and potential capital return by investing its

funds in a broad spread of unquoted UK companies which meet

the relevant criteria for VCTs.

NAV per share;

Total return per share (APM);

Dividends per share paid in the year;

Total ongoing charges (APM);

Qualifying % under VCT rules (APM);

Distributable reserves;

Cash and cash equivalents; and

Sustainability % of Titan (APM).

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 16

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 17

How Titan works continued

Measuring our performance continued

NAV per share

The NAV per share of Titan is the sum of the underlying assets less the liabilities

of Titan, divided by the total number of shares in issue. Over the long-term,

Titan’s target is to maintain a NAV per share of at least 90p after the payment

of dividends.

2022

76.9p

2022 change

-27.2%

2021

105.7p

2020

97.0p

Performance over the year

The NAV per share has decreased from last year’s value of 105.7p to 76.9p. We

recognise that it is a long-term objective to maintain a NAV per share of at least

90p after the payment of dividends, and the Company is not achieving this

currently. The Octopus Ventures team are working to increase the NAV per share

back above 90p through continued growth in the underlying portfolio, and the

performance of new investments over the coming years. The decrease in valuation

over 2022 has been driven by a combination of the eects of the tougher trading

environment for portfolio companies to operate in, a downward correction in

comparable market multiples used for valuing our portfolio companies, as well as

some company-speciﬁc performance issues.

Total return per share (APM)

Total return per share is calculated as movement in NAV per share in the period plus

dividends paid in the period, divided by the NAV per share at the beginning of the

period. Total return on the NAV per share enables shareholders to evaluate more

clearly the performance of Titan, as it reﬂects the underlying value of the portfolio

at the reporting date. This is the most widely used measure of performance in the

VCT sector. Titan’s target is for the total return per share to increase by at least 5p

per annum, covering the target annual dividend.

2022 change

-22.5%

2021

19.7p

2020

6.8p

2022

-23.8p

Performance over the year

As previously considered, the NAV per share has decreased from last year’s value of

105.7p to 76.9p. Adding back the 5p of dividends paid in the year, this is a decrease

of 23.8p or 22.5%. The Octopus Ventures team are working to improve total return

per share. This decrease is mainly driven by a downward valuation movement in the

portfolio, as detailed in the Portfolio Manager’s Review on page 24.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 18

How Titan works continued

Measuring our performance continued

Dividends per share paid in the year

Titan has a target of paying annual tax-free dividends of 5p per share, with the

potential to pay special dividends when there are signiﬁcant gains from the sale

of portfolio holdings.

2022

2022 change

-54.5%

2021

11p

2020

Performance over the year

Despite the decline in Titan’s NAV, we are pleased that ordinary dividends of 5p were

paid in the year in line with the dividend policy of a regular annual dividend of 5p per

annum. The decrease since 2021 is due to the special dividend of 6p being declared

in September 2021 and paid on 20 December 2021.

Total ongoing charges (APM)

The ongoing charges ratio has been calculated using the AIC recommended

methodology and excludes irrecoverable VAT, exceptional costs, trail commission

and performance fees. Titan aims for this to be 2% or lower. This is capped at 2.5%.

2022

2.2%

2022 change

+0.2%

2021

2.0%

2020

1.9%

Performance over the year

The ongoing charges are in line with last year, as a percentage of average net

assets, and below the cap of 2.5%. The slight increase is driven by the fall in net

assets in 2022.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 19

How Titan works continued

Measuring our performance continued

Qualifying % under VCT rules (APM)

Titan must comply with VCT legislation set out by HMRC. Key requirements are to

maintain at least an 80% qualifying investment level (Titan targets at least 90%)

and investing at least 30% of all new funds raised within 12 months of the end of

the accounting period in which the shares were issued.

2022

100%

2022 change

0.0%

2021

100%

2020

98%

Performance over the year

At the end of the period, 100% by value (as measured by HMRC rules) of Titan’s

investments were in qualifying shares or securities. The qualiﬁcation level has been

kept above the 80% threshold by the continued deployment of funds into qualifying

assets, and investments made from cash raised three years ago now being included

in the calculation of the 80% qualifying investment level. The 30% test has also

been met for all relevant years.

Distributable reserves

There are restrictions on the amount of capital that can be distributed back to

shareholders in the form of dividends and share buybacks. Restrictions are placed on

these reserves by both the Companies Act and VCT regulations. Titan aims to have

sucient reserves to continue to fund dividends and buybacks. The table shows the

amount available under the Companies Act as at 31 December 2022.

2022

£797m

2022 change

+34.6%

2021

£592m

2020

£55m

Performance over the year

The Companies Act distributable reserves have increased signiﬁcantly during the

year following the reduction of nominal share capital from 10p to 0.1p and the

cancellation of the share premium balance in July 2022.

We continue to have sucient reserves under the VCT regulations to fund forecast

dividends and buybacks, and this is reviewed ahead of any distribution from Titan.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 20

How Titan works continued

Measuring our performance continued

Cash and cash equivalents

The cash and cash equivalents balance includes cash at bank, funds in money

market accounts, and corporate bonds. Titan aims to have sucient cash to fund

investments, dividends, buybacks, management fees, other running costs and a

performance fee, when applicable, over a 12-month period.

2022

£179m

2022 change

-53.0%

2021

£381m

2020

£236m

Performance over the year

The relatively higher cash position as at 31 December 2021, was due to the signiﬁcant

disposal proceeds received from proﬁtable exits in 2021 and was accelerated by the

2021 fundraise which closed having raised more than £200 million in November 2021,

compared to typical closing dates of March or April. This movement can be seen in

the cash deployment bridge on page 21.

Sustainability % of Titan (APM)

The Board considers that it is important that Titan can cover its cash costs without

fundraising over the medium term and so considers a sustainability metric which

is calculated as the proportion of Titan’s costs that are covered by realisations over

the preceding three years. The costs of the VCT include the share buybacks, ordinary

dividends and operating costs in the year. Titan’s target is that 100% of costs are

covered by realisations. These costs are illustrated on page 21.

2022

74.3%

2022 change

-14.7%

2021

89.0%

2020

31.0%

Performance over the year

The decline in this metric in the year is due to the signiﬁcant disposal proceeds

received from proﬁtable exits in 2021 in comparison to lower realisations in 2022.

Titan realised £62 million of proceeds from exits in the year (as shown on page 25).

We aim to improve this metric to be in line with expectations, through working

with Octopus to both monitor and manage costs appropriately, and support their

work with the portfolio to optimise the portfolio companies’ chances of proﬁtable

realisations.

•]

Cash inﬂows Cash outﬂows

300

200

100

£m

400

500

381

179

(50)

(41)

(23)

(64)

(20)

(52)

(105)

Dividends Buybacks Management

fee

Performance

fee

Other

costs

New

investments

Follow-on

investments

Cash as at

31 December

2021

Cash as at

31 December

2022

Disposal

proceeds

Fundraise

Cash deployment

The following graph shows Titan’s cash inﬂows and outﬂows during the year to demonstrate the movement from the opening to closing cash position.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 21

How Titan works continued

Creating value for the long term

100

140

120

NAV per share Increase in NAV per share

Decrease in NAV per share

NAV as at

31 December

2022

NAV

before

dividends

Other

costs

Foreign

exchange

translation

Management

fee

Unrealised

valuation

downgrades

Unrealised

valuation

uplifts

DividendsNAV as at

31 December

2021

105.7

4.5

(26.7)

(1.6)

(0.5)

0.5

(5.0)

81.9

76.9

NAV per share (p)

Titan Total Value growth

The following graph shows the increases and decreases contributing to the movement in the NAV per share during the year.

Dividend Reinvestment Scheme (DRIS)

Titan has adopted a Dividend Reinvestment Scheme under which shareholders are given the opportunity to reinvest future dividend payments by way of subscription for new

shares. Subject to a shareholder’s personal circumstances, shares subscribed for under the Dividend Reinvestment Scheme should beneﬁt from VCT tax relief.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 22

How Titan works continued

Creating value for the long term continued

160

Oct

Dec

89.9

97.1

96.9

95.0

127.9

137. 7

148.9

154.7

158.9

162.4

164.1

171.2

178.0

197. 7

173.9

Total Value (p)

NAV per share Cumulative dividends

120

200

Titan Total Value growth from inception

The graph below shows the performance of Titan since 31 October 2008 (Titan’s ﬁrst full year) in net asset value (NAV), dividends paid and NAV plus cumulative dividends paid (Total Value).

The Total Value has seen a signiﬁcant increase since the end of Titan’s ﬁrst year (31 October 2008), as shown on the graph — from 89.9p to 173.9p at 31 December 2022. This

represents an increase of 93% in value since Titan’s ﬁrst full year, including dividends paid since inception of 97p. Since Titan launched, a total of over £428 million has been

distributed back to shareholders in the form of tax-free dividends. This includes dividends reinvested as part of the DRIS.

At Octopus, our focus is on managing your investments and providing investors

with open communication. Our annual and interim updates are designed to keep

you informed about the progress of your investment.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 23

Portfolio Manager’s review

Focus on performance

The NAV of 76.9p per share at 31 December 2022 represents a decrease in NAV of 23.8p per share versus a NAV of 105.7p per share as at 31 December 2021 (when adjusted

for dividends).

The performance over the ﬁve years to 31 December 2022 is shown below:

Year ended

31 October 2018

Period ended

31 December 2019

Year ended

31 December 2020

Year ended

31 December 2021

Year ended

31 December 2022

NAV, p 93.1 95.2 97.0 105.7

76.9

Cumulative dividends paid, p 71.0 76.0 81.0 92.0

97.0

Total Value, p 164.1 171.2 178.0 197.7

173.9

Total return 1.8% 7.6% 7.1% 20.3%

(22.5)%

Dividend yield 5.2% 5.4% 5.3% 11.3%

4.7%

Equivalent dividend yield for a higher rate tax payer 7.7% 8.0% 7.8% 16.8%

7.0%

1. Note, the period to December 2019 was 14 months.

In total, 67 companies saw a collective decrease in valuation of £352 million. The businesses that contributed most signiﬁcantly to this were Cazoo, ManyPets and Chronext. Cazoo

listed on the New York Stock Exchange in August 2021 and its share price has declined since the start of 2022. That being said, from a trading perspective, Cazoo has performed

well, delivering revenues of £1.25 billion in 2022 (representing a 91% year-on-year growth). Chronext has been aected by a more challenging fundraising market for companies

with business-to-consumer business models. ManyPets, Titan’s single largest investment, has seen its value drop in the period despite strong underlying performance, with this

decline being driven by a softening of the valuation multiples of comparable companies, which has been reﬂected in the holding value of the company. Octopus Ventures will

continue to work with these companies to help them realise their ambitions. In some cases, the support oered could include further funding, to make sure a business has the

capital it needs to execute on its strategy.

Despite the reduction in Titan’s NAV, 2022 saw the proﬁtable disposal (in full or in part) of four companies (Amplience, BehavioSec, Digital Shadows and Glofox), as well as the

increase in valuation of certain companies. Collectively, 40 portfolio companies drove an increase in valuation of £68 million. Please refer to the exit table in Note 10 on page 98 for

more information.

The loss on Titan’s cash and cash equivalent investments was £12.6 million in the year to 31 December 2022 (2021: loss of £1.5 million). The Board’s objective for these investments is

to generate sucient returns through the cycle to cover costs, at limited risk to capital, however the holdings were negatively impacted by the rise in interest rates driving a lower

market value on the corporate bond portfolio in particular.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 24

Portfolio Manager’s review continued

Disposals

In 2022, three full proﬁtable disposals completed in the period (BehavioSec, Digital Shadows and Glofox), with one partial proﬁtable realisation (Amplience). In total, these

disposals will return £48 million to Titan in cash, shares and/or deferred amounts, with £44 million of this having been received in 2022. More information on these exits is oered

below:

• in February 2022, as part of a $100 million fundraise with an equity investment from Farview Partners and growth ﬁnancing from Sixth Street, Titan sold a proportion of its

shareholding in Amplience;

• in May 2022, LexisNexis Risk Solutions, a leading provider of legal and regulatory intelligence, acquired BehavioSec, a pioneer in the behavioural biometrics industry;

• in July 2022, ReliaQuest, a force multiplier of security operations, acquired Digital Shadows, a company which delivers threat intelligence for security teams; and

• in August 2022, ABC Fitness Solutions, a leading technology and related services provider for the ﬁtness industry, acquired Glofox, a ﬁtness management platform servicing the

boutique gym and studio sector.

There have also been four disposals made at a partial loss (Fluidly was acquired by OakNorth, Trouva was sold to Made.com, Jolt was purchased by Global University Systems

and part of Titan’s listed holding in Eve Sleep was sold on the day it was placed into administration). Unfortunately, Whirli and WeFarm were disposed of at a full loss as they were

placed into administration having been unsuccessful in securing further funding and having explored and exhausted all available options. In aggregate, these losses generated

negligible proceeds (totalling £0.8 million) compared to an investment cost of £26.4 million, meaning a realised loss of £25.6 million. The underperformance of a portfolio company

is always disappointing for Octopus and shareholders alike, but it’s a key characteristic of a venture capital portfolio, and we believe the successful disposals will continue to

signiﬁcantly outweigh the losses over the medium to long term.

Year ended

31 October 2018

Period

ended

31 December 2019

Year ended

31 December 2020

Year ended

31 December 2021

Year ended

31 December 2022 Total

Dividends (£'000) 24,178 33,187 46,037 101,976 49,596

254,974

Disposal proceeds

(£'000) 22,367 26,334 23,915 221,504 62,213

356,333

1. Note, the period to December 2019 was 14 months.

2. Note, this table includes cash and retention proceeds received in the period.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 25

Portfolio Manager’s review continued

New and follow-on investments

Titan completed follow-on investments into 33 companies and made 31 new investments. Together, these totalled £157 million (made up of £52 million invested into the existing

portfolio and £105 million into new companies). This compares with 31 new investments and 24 follow-on investments in 2021, together totalling £143 million. The total value of the

portfolio as at 31 December 2022 is £837 million.

Below are some examples of new investments made across our seven areas of focus during the year. For a full list, please refer to the Appendix on page 106:

Fintech

• Cobee is a fully digital solution

that simpliﬁes employee beneﬁts

management. Using the app and

Cobee Visa card, employees have

access to a range of beneﬁts; and

• Sidekick oers an alternative

investment platform that gives retail

investors access to actively managed

portfolios.

Deep tech

• Touchlab has developed an electronic

skin that can provide robots with the

sense of touch; and

• Unlikely AI is developing an Artiﬁcial

Intelligence (AI) platform capable of

providing intelligence in a manner

similar to the brain.

Health

• Vira is a digital health company

focused on relief for the central pain

points of menopause; and

• Little Journey has created a digital

support platform that prepares,

informs and provides support for a

child’s healthcare procedures and

clinical trials.

Consumer

• Onin is a consumer app fusing

calendar and communications under

a single interface; and

• Partly has built a global platform and

protocol for vehicle parts.

B2B software

• Velaris is an operating system for

modern customer success teams; and

• Contingent oers a real-time, supply

chain visibility platform applicable

across industries.

Bio

• Bioﬁdelity has developed technology

that enables rapid, precise genomic

proﬁling and stratiﬁcation of cancer

able to be performed on existing

instruments; and

• Inﬁnitopes has built an antigen

discovery platform to develop

cancer vaccines that provide better

treatment outcomes.

Climate

• Foodsteps oers a platform that

makes it quick and aordable to

calculate environmental impacts

across large and complex food

operations; and

• Kita is a carbon credit insurance

company.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 26

Portfolio Manager’s review continued

Malcolm Ferguson

Partner and Titan Lead Fund Manager

Q&A

How do we think about

exiting our positions?

In a venture capital portfolio, a relatively small

number of investments generate a signiﬁcant

proportion of fund performance. As a result,

we have a natural tension between ensuring

we facilitate the best performing companies to

reach their potential (including being prepared

to give them sucient time to achieve this), and

maintaining good portfolio management discipline

to make sure realised proceeds materially contribute

towards ﬁnancing the Company’s ongoing running

costs and meeting its dividends targets.

Private markets are by deﬁnition illiquid, and as a

result, the opportunities to sell all or some of our

holding in a particular company are intermittent. We

ﬁnd there are opportunities for partial realisations

as part of later stage funding rounds, however most

realisations will be part of a full exit process, usually

to a strategic buyer or private equity ﬁrm. We work

closely with each portfolio company to understand

and optimise its cash runway, with the goal of them

maintaining ﬂexibility over exit timing with the best

interests of its shareholders in mind.

Our portfolio is large and diverse, and although we

aim to take a systematic approach to supporting

our portfolio, we know there is no deﬁnitive formula

for success, especially when working across very

dierent industries and stages. Often wider

macroeconomic conditions can inﬂuence exits as

much as factors within a company’s control. We

also recognise it is not always the right time to

exit a position and instead continue to support

the company, being alert to opportunities as they

arise, and helping to proactively create these

opportunities where we can through our network.

When do we start to think

about exits?

We seek to invest in pioneering entrepreneurs who

are looking to change an industry for the better.

Not only is that an ambitious objective, but it is

also one which often requires patience. As such, we

understand that for our best performing companies,

we may be shareholders for ten years or more.

Despite that, understanding who the likely acquirers

are from the outset and throughout the holding

period can help inform important strategic decisions

which contribute to value creation for shareholders.

As the saying goes, “companies are bought,

not sold”. In practice, this means that the most

impactful exits we have completed are from

companies which have been successful in changing

their industry, either by becoming the new

dominant player or by ﬁlling a strategic gap in an

incumbent’s oering. Many of the most successful

companies are built with the intention of remaining

independent, but believe it is healthy to maintain

relationships with key potential acquirers. They

are often commercial partners before becoming

acquirers, and as such this activity can be highly

productive.

We know not all companies will be as successful as

we hope at the time of the initial investment. We

therefore seek to realise investments in companies

which are underperforming and unlikely to generate

a meaningful return. It can also help to ﬁnd a

“soft landing” for the company’s employees where

the alternative may be placing the business into

administration. Although generally not meaningful

to investor returns, our behaviour in these scenarios

is important to cement our reputation as a

founder-friendly investor who entrepreneurs seek

to partner with on subsequent projects.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 27

Portfolio Manager’s review continued

How do we work with

portfolio company boards?

We believe that it is important to be an active

and supportive investor, so we typically appoint

a non-executive director or observer to the

board of our portfolio companies. This allows us

to oer ongoing support at the top level of the

business, be involved in key decisions and allows

the opportunity for us to share any expertise and

insights that we may have.

Even very experienced founders may only sell a

business once or twice in their career, whereas

as investors, we may be involved in ﬁve to ten

exits each year. We therefore look to support

our portfolio companies by sharing the learnings

and experience gathered across our team,

all with the objective of obtaining the best

outcome for our investors and shareholders in

the company overall.

Who are typically buyers for

our portfolio companies?

There are a variety of exit options for our portfolio

companies. For the largest and most successful

companies, these may look to list on a public

stock exchange. There have only been a few of

these in Titan’s history so far.

More common are sales to strategic acquirers

and private equity ﬁrms. Titan VCT is proud to

have sold companies to many of the largest

global companies, including Microsoft, Google,

Amazon, Nestlé and Unilever.

Finally, we can partially realise our shareholdings

in later-stage funding rounds, where existing

shareholders can sell a proportion of their

shareholding to accommodate new later-stage

investors to the round.

Though, as already stated, not all exits result in

a proﬁtable outcome.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 28

Portfolio Manager’s review continued

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 29

Portfolio Manager’s review continued

Valuation

methodology

– by value

Valuation

methodology

– by number of

companies

Valuations

The pie charts below illustrate the split of valuation methodology (shown as a percentage of portfolio value and number of companies). ‘External price’ includes valuations based

on funding rounds that typically completed in the last 12 months to the period end or shortly after the period end, and exits of companies where terms have been issued with an

acquirer. ‘External price’ also includes quoted holdings, which are held at their quoted price as at the valuation date. ‘Multiples’ is predominantly used for valuations that are based

on a multiple of revenues for portfolio companies. Where there is uncertainty around the potential outcomes available to a company, a probability weighted ‘Scenario analysis’ is

considered. For further information please see Note 16, which only concerns the unquoted holdings in the portfolio.

Multiples

Scenario

analysis

External

price

40.9% 4.7%54.4% 19.4%

Multiples Write oExternal

price

Scenario

analysis

23.2% 6.2%51.2%

All values in £’000.

1. Not a graphical representation of the full value of the holding.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 30

Portfolio Manager’s review continued

Here, we set out the cost and valuation of

the top 20 holdings of the overall portfolio.

These 20 account for over 58% of the value

of Titan’s portfolio.

Changes since last year

In 2021, we reported details of the top ten

holdings as this made up c.50% of Titan’s

total portfolio value. This has now been

increased to report on the top 20 to show

58% of total portfolio value.

Key:

Fintech

Deep tech

Health

Consumer

B2B software

Bio

Climate

top

102,729

38,786

18,994 38,510

12,890 33,581

11,500 32,933

10,298 25,174

12,855 22,220

19,766

12,608 18,366

11,496 17,383

13,634

9,978

8,020

Investment

cost:Portfolio:

Total valuation

including cost:

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 31

Portfolio Manager’s review continued

7,724

7,206 14,518

11,510 13,668

7,32 5 13,393

6,417 13,338

5,475 12,698

7,128 12,257

15,940

4,190 11,992

9,491 10,486

9,102 10,451

Investment

cost:Portfolio:

Total valuation

including cost:

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 32

Portfolio Manager’s review continued

Portfolio case studies

Orbex is a UK-based private, low-cost rocket

company, serving the needs of the small satellite

industry.

It has developed one of the world’s most

advanced, low carbon, high performance

microlauncher rockets, with the aim of

launching the ﬁrst vertical rocket from UK soil

and creating the ﬁrst European commercial

launch vehicle business.

The company is the ﬁrst to use bio-propane as

a fuel, which allows the rocket to reduce carbon

emissions signiﬁcantly compared to other similarly

sized rockets. A study by the University of Exeter

showed that a single launch of the Orbex Prime

rocket will produce 96% lower carbon emissions

than comparable space launch systems using

fossil fuels. The use of biofuel has been made

possible by Orbex’s innovative approaches

to design.

Octopus investment dates:

Initial investment: December 2020

Latest investment: October 2022

£40.4 million

raised in Series C

funding round in

October 2022

May 2022

Orbex Prime rocket

unveiled – the ﬁrst

full-stack rocket to

be revealed in Europe

www.orbex.space

Permutive is a privacy-compliant advertising

technology company that helps publishers and

advertisers to strengthen and action their valuable

data for targeting, all while keeping it safe.

Its Audience Platform uses on-device technology

to access and process data quickly, accurately

and anonymously. This enables a privacy-safe

way of learning about consumers’ behaviours

online, without compromising data security or

identifying them.

For many companies, General Data Protection

Regulation (GDPR) made handling consumer

information complicated and opened up

regulatory risk. Many existing platforms were

unable to adapt to the new rules, creating a

gap in the market. The platform uses a form of

edge computing, keeping user data safe, and

minimising latency which allows for immediate

insights and targeting.

Octopus investment dates:

Initial investment: May 2015

Latest investment: October 2021

70%

The partner

of choice for

privacy-compliance,

targeting more than

70% of the UK’s top

publishers

Customers include:

• The Times

• The Economist

• BuzzFeed

• Condé Nast

www.permutive.com

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 33

Portfolio Manager’s review continued

Portfolio case studies continued

Skin+Me oers direct-to-consumer,

prescription-strength personalised skin care

treatments. Skin+Me combines medical expertise

and technology to oer personalised treatment

plans on a subscription basis.

Through an online consultation, customers

are prescribed a bespoke treatment plan and

presented with a fully customised skincare routine,

without requiring a trip to the dermatologist.

The momentum behind this growth is largely

driven by consumers dismissing the one-size-ﬁts-all

approach. There is also an increased awareness

of sustainability amongst consumers, whereby

Skin+Me strive to challenge industry standards.

By using recyclable packaging and oering

personalised solutions that are made-to-order,

it means none goes to waste.

Octopus investment dates:

Initial investment: September 2019

Latest investment: December 2022

$17.2 billion

The global personalised

skincare market

was valued at

$17.2 billion last year

and is expected to hit

$38.9 billion in 2030

4.5/5 stars

on Trustpilot (from

over 6,000 reviews)

as of 1 April 2023

www.skinandme.com

1. Global personalised skincare

market worth $38.9 billion

by 2030, InsightAce Analytic

report, January 2022.

Tatum is simplifying complex blockchain

operations for app developers.

Blockchain is the underlying technology that

enables the existence of cryptoassets (such as

Bitcoin and Ethereum) and non-fungible tokens

(NFTs). All blockchains operate dierently,

using dierent mechanisms, coding languages

and privacy measures, making it particularly

challenging to build across multiple blockchains.

Tatum’s blockchain development platform allows

developers to connect various blockchains and

blockchain services through a single integration.

It simpliﬁes operational processes, reduces product

development time for applications by up to 90%

and bridges the skills gap that exists because of

the relative lack of blockchain developers in the

market.

Octopus investment dates:

Initial investment: November 2021

Latest investment: August 2022

>100,000

customers, adding

over 7,000 new ones

per month

$592 billion

value of the

global blockchain

technology market

in 2021

www.tatum.com

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 34

Portfolio Manager’s review continued

Portfolio case studies continued

Vitesse is a market-leading settlement and

liquidity management platform to hold funds

and deliver international payments globally,

using domestic, in-country processing.

With a focus on serving the global insurance

market, the company already includes some of

the world’s largest insurers as customers. In 2022,

the company announced a strategic deal with

Lloyd’s of London to improve capital eciency

across the insurance marketplace and to improve

the speed of claims payment. In the same year,

Vitesse won the best international payments,

remittance or use of FX award at Pay360 Awards.

Octopus investment dates:

Initial investment: June 2020

Latest investment: January 2022

>£8 billion

settled globally to

over 100 countries

and payment types

>70%

completed

transactions for the

London insurance

market

www.vitessepsp.com

ManyPets was founded in 2012 to provide

a transparent and digital-ﬁrst insurance

experience, and in 2017 it launched its own

dog and cat insurance policies.

It has become one of the fastest-growing

insurance businesses in Europe by listening to pet

owners and solving their insurance pain points.

It was the ﬁrst company to create a product for

pets with pre-existing conditions and partner with

a video vet service. Its tech allows it to automate

payments for a signiﬁcant proportion of claims

and ﬁne tune pricing to ensure a sustainable loss

ratio. In 2019, it launched in Sweden and then in

2021 expanded into the US. It has moved further

into the pet health space by acquiring a pet

medication subscription business.

Octopus investment dates:

Initial investment: October 2016

Latest investment: April 2021

>600,000

pets covered globally

85%

Covering 85% of the

pet insurance market

in the US

www.manypets.com

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 35

Portfolio Manager’s review continued

Top 10 investments in detail

ManyPets Amplience Permutive Quit Genius

www.manypets.com www.amplience.com www.permutive.com www.quitgenius.com

An award-winning insurtech company

with a speciﬁc focus on providing

better pet insurance for everyone.

Amplience is a leading headless

content management system, which

powers retailers’ digital channels.

Permutive’s publisher data platform

gives its customers an in-the-moment

view of everyone on their site.

A digital health solution for managing

substance use disorders.

Initial investment October 2016

date:

Investment cost: £9.9m

(2021: £9.9m)

Valuation: £102.7m

(2021: £146.9m)

Last submitted 31 March 2022

accounts:

Turnover: £42.4m

(2021: £29.8m)

Loss before tax: £(31.9)m

(2021: £(22.3)m)

Net assets: £12.6m

(2021: £38.1m)

Valuation Revenue multiple

methodology:

Initial investment December 2010

date:

Investment cost: £13.6m

(2021: £13.6m)

Valuation: £38.7m

(2021: £46.6m)

Last submitted 30 June 2022

accounts:

Turnover: £13.4m

(2021: £11.7m)

Loss before tax: £(7.8)m

(2021: £(2.0)m)

Net assets: £(12.1)m

(2021: £(6.8)m)

Valuation Last round

methodology:

Initial investment May 2015

date:

Investment cost: £18.9m

(2021: £18.9m)

Valuation: £38.5m

(2021: £49.5m)

Last submitted Not available

accounts

Turnover: Not available

Loss before tax: Not available

Net assets: Not available

Valuation Revenue multiple

methodology:

Initial investment January 2020

date:

Investment cost: £12.8m

(2021: £12.8m)

Valuation: £33.5m

(2021: £29.8m)

Last submitted Not available

accounts

Turnover: Not available

Loss before tax: Not available

Net assets: Not available

Valuation Last round

methodology:

1. These are numbers per latest public ﬁlings. Latest ﬁgures have not been disclosed.

2. Information not publicly available.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 36

Portfolio Manager’s review continued

Top 10 investments in detail

continued

Skin+Me Orbex Big Health vHive Tech Ltd

www.skinandme.com www.orbex.space www.bighealth.com www.vhive.ai

Skin+Me oers direct-to-consumer,

personalised skincare.

Orbex designs and constructs small,

orbital rockets to service the growing

small satellite launch market.

A digital medicine company delivering

cognitive behavioural therapy to

suerers of mental health problems.

vHive enables businesses to deploy

autonomous drone hives to digitise their

ﬁeld assets and operations.

Initial investment September 2019

date:

Investment cost: £11.5m

(2021: £4.0m)

Valuation: £32.9m

(2021: £17. 5 m)

Last submitted 31 August 2021

accounts:

Turnover: Not available

Loss before tax: £(5.5)m

(2021: £(2.3)m)

Net assets: £0.3m

(2021: £5.8m)

Valuation Last round

methodology:

Initial investment December 2020

date:

Investment cost: £10.2m

(2021: £4.5m)

Valuation: £25.1m

(2021: £10.3m)

Last submitted 31 December 2021

accounts:

Consolidated turnover: $0.6m

(2021: $0.9m)

Consolidated loss $(5.9)m

before tax: (2021: $(0.8)m)

Consolidated $12.3m

net assets: (2021: $16.9m)

Valuation Last round

methodology:

Initial investment June 2016

date:

Investment cost: £12.8m

(2021: £12.8m)

Valuation: £22.2m

(2021: £26.4m)

Last submitted 31 December 2021

accounts:

Consolidated $20.3m

turnover: (2021: $13.4m)

Consolidated $(12.9)m

loss before tax: (2021: $(13.5)m)

Consolidated $79.6m

net assets: (2021: $23.9m)

Valuation Revenue multiple

methodology:

Initial investment May 2019

date:

Investment cost: £8.0m

(2021: £3.9m)

Valuation: £19.7m

(2021: £13.7m)

Last submitted 31 December 2021

accounts:

Consolidated $2.4m

turnover: (2021: $0.8m)

Consolidated $(3.0)m

loss before tax: (2021: £(2.8)m)

Consolidated $2.3m

net assets: (2021: $4.5m)

Valuation Last round

methodology:

1. These are numbers per latest public ﬁlings. Latest ﬁgures have not been disclosed.

Strategic report Governance Financials

Portfolio Manager’s review continued

Top 10 investments in detail

continued

Token Sofar Sounds Limited

www.token.io www.sofarsounds.com

A leading Open Banking solution,

focused on payments.

Sofar Sounds organises small, intimate

music performances in unique spaces

across the globe.

Initial investment March 2017

date:

Investment cost: £12.6m

(2021: £8.4m)

Valuation: £18.3m

(2021: £11.1m)

Last submitted 31 December 2021

group accounts:

Turnover: Not available

Loss before tax: Not available

Net assets: £0.5m

(2021: £0.4m)

Valuation Revenue multiple

methodology:

Initial investment January 2015

date:

Investment cost: £11.4m

(2021: £11.4m)

Valuation: £17. 3 m

(2021: £15.3m)

Last submitted 31 December 2021

group accounts:

Consolidated $5.8m

turnover: (2021: $2.8m)

Consolidated loss $(11.8)m

before tax: (2021: $(12.2)m)

Consolidated $5.8m

net assets: (2021: $6.2m)

Valuation Last round

methodology:

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 37

1. These are numbers per latest public ﬁlings. Latest ﬁgures have not been disclosed.

Outlook

Having enjoyed consistent growth since inception, with

especially strong performance over the three years to

31 December 2021, the decline in Titan’s NAV is of course

disappointing. The headwinds we have encountered over

the past 12 months have been particularly strong and we

have seen many existing issues intensify. Valuations of the

portfolio companies are reﬂective of this environment. Titan’s

unquoted portfolio companies are valued in accordance

with the IPEV valuation guidelines. This means we value the

portfolio at fair value, which is the price we expect people

would be willing to buy or sell an asset for, assuming they

had all the information we have available; are knowledgeable

parties with no pre-existing relationship; and that the

transaction is carried out under the normal course of

business. On top of this, several of Titan’s portfolio companies

have been aected by the challenges the economic backdrop

has created, with costs increasing and consumer conﬁdence

and spending declining. As a result, valuations have been

reappraised in line with all these factors.

Despite this decline in performance, we are reassured by the

continued fundraising success of our portfolio companies

as well as the resilience, ambition and drive displayed by

extraordinary management teams behind them. The pie

chart shows the percentage split across Titan’s NAV of the

cash runway available to its portfolio companies. Almost 40%

of the portfolio is not expected to require further funding,

and almost 85% has cash runway of at least 12 months

– this should ensure that the portfolio is well capitalised

to navigate the challenging fundraising environment. The

strong deployment rate over the past 12 months, with 31

new investments completing, shows us that exciting and

novel businesses are still founded in turbulent times. These

investments have been made into early-stage, tech-enabled

businesses with high-growth potential. These types of

companies should thrive in challenging periods as barriers

to adopting new technologies lessen, there is a greater

acceptance of change and as talent availability improves.

As well as these new investments, we can see that many

of Titan’s existing portfolio companies are maturing,

growing their customer base, winning new contracts,

hiring new talent, and developing their technologies.

So, although we are currently in a more challenging exit

environment, when conditions improve in the future, we

believe there should be opportunities for companies to

take the next steps on their growth journey. Successful

exits enable Titan to realise the growth a portfolio

company has achieved over its investment lifespan.

Please see page 27 where we answer some questions

surrounding our exit process.

To be able to support portfolio companies in their

ambition to change the world, we believe we should

be an active investor, oering more than just ﬁnancial

support. You will have read about our in-house Talent

team and how they lend their expertise and knowledge

to support our companies on pages 8 and 9. We work

to equip the management teams with the platforms

and tools they need to succeed. It is typical for a

member of the Octopus Ventures team to join the

Board of a portfolio company to provide ongoing

support. We believe that the management team are the

key determining factor for a company’s success, and

this support is an investment in the future, designed

to bolster resilience so that our portfolio companies

can weather periods of disruption, and to help them

develop the culture and capabilities they need to drive

ongoing success. And it sets Octopus Ventures apart,

oering us a competitive advantage in winning the best

investment opportunities and proving our value beyond

just investment.

The past 12 months have been a period of immense

change on a global scale, and Titan has understandably

been aected by this. Looking ahead, we are conﬁdent

that many portfolio companies have the potential to

build upon their successes to date. We back businesses

from a wide range of sectors, at dierent investment

stages, and we think this breadth of scope will provide

Titan with the opportunities it needs to succeed in the

future and return to its previous growth trajectory.

Months of cash

runway available

to Titan’s portfolio

companies – %

portfolio NAV

months

6-12

months

12-18

months

>18

months

funding

requirement

3% 14% 18% 27% 38%

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 38

Portfolio Manager’s review continued

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 39

Operating responsibly

Titan has a policy in place, which is set by the Board, to make

sure Octopus Ventures considers responsible investment within

investment decisions in relation to Octopus Titan VCT.

The policy ensures Octopus Ventures follows a three-step approach

to responsible investment which is aligned with Octopus Group’s

responsible investment policy.

Please view the Company’s policy here:

octopusinvestments.com/titan-responsible-investment-policy/

Octopus Ventures’ initiatives:

Female diversity pledge:

By 2025, 30% of all new

founder pitches to the Octopus

Ventures investment team

must be businesses led or

co-led by a woman and by

2027, this will increase to 50%.

Greenhouse gases:

Octopus Ventures engage with

all portfolio companies on their

greenhouse gases and give

them access to appropriate

complimentary tools to support

their understanding of their

carbon footprint.

The Directors consider responsible investment

to be important and believe Titan’s portfolio

companies should implement a framework to

support best practices, which in turn can help

create long-term value in the business.

Operating

responsibly

framework

of risks to

investments

This framework considers:

1. Materiality of risks to investments: the materiality of sustainability issues

in Titan’s underlying portfolio;

2. Mission: the mission of an investment; and

3. Responsibility: a portfolio company’s values, culture and behaviour.

Octopus Ventures is responsible for implementing the policy. As the nature of

responsible investment, our investors, and the wider business environment evolves,

the policy will be reviewed and if necessary updated.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 40

Operating responsibly continued

Mission Responsibility

Materiality of risks

to investments

Titan’s mission is to invest in the ideas, industries

and people that will change the world – backing

pioneering entrepreneurs building companies that

are using technology to shape the future. Whilst

Titan doesn’t target speciﬁc sustainability goals or

objectives, Octopus Investments track the number,

amount invested and the value of companies in

Titan’s portfolio that are aligned with Octopus

Group’s three sustainable themes: building a

sustainable planet, revitalising healthcare and

empowering people.

Titan has a responsible investment policy to

ensure environmental, social and governance

risks of Titan’s underlying portfolio will be

considered during the investment process and

any sustainability issues, that could impact the

ﬁnancial performance of an investment, are

identiﬁed. To do this, a Responsible Investment

Tool is used which utilises guidance from the

Sustainability Accounting Standards Board (SASB)

to help identify and manage any issues.

Once identiﬁed, the investment team consider

the exposure to these risks and engage directly

with the portfolio companies to understand how

appropriately they are managing the risks. Given

the nature of these tech-enabled businesses, the

most material risks identiﬁed include data security,

data privacy, and recruiting and managing a

global, diverse and skilled workforce.

Titan will not invest in any business whose

activities or practices appear on the Octopus

Ventures Exclusion List, which includes sectors

such as tobacco, arms, fossil fuels, gambling and

deforestation.

The team make sure that all portfolio companies:

• provide safe and healthy working conditions;

• treat people fairly, irrespective of race, gender,

nationality, disability, political or religious

beliefs;

• do not accept bribes; and

• uphold high standards of business integrity at

all times.

Octopus Investments has created an Engagement

Tool which is sent to all of Titan’s portfolio

companies to help the Octopus Ventures

investment team understand whether a portfolio

company considers its wider stakeholders

(community, customers, people, planet and

shareholders) within decision-making, and provides

tools and guidance to help them adopt responsible

practices.

The Octopus Ventures team also collect data

on diversity within the portfolio and actively

work with portfolio companies to support talent

management, recruitment and diversity.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 41

Operating responsibly continued

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 41

Responsible investment initiatives

2019 2021 2022

February 2019

becomes a

signatory to the

UNPRI

July 2022

launched the annual

engagement survey to

the portfolio to collect

key metrics

Key:

Octopus Investments actions

Octopus Ventures actions

November 2021

signed up to

B Corp Climate

Collective, committing

to a 2030 net zero

target

September 2022

launched Octopus

Giving oer to the

Octopus Ventures

portfolio

January 2021

becomes B Corp

certiﬁed

March 2022

launched carbon

management tool to

portfolio companies

July 2022

launched the

Equity Chiefs (ECs) – an

initiative where individuals

are designated the EC role

on a six monthly basis, and

are responsible for ensuring

accountability when it comes

to diversity, equity and

inclusion

October 2022

participated in

the British Business

Bank “Alison Rose

Review of Female

Entrepreneurship”

June 2022

announcement of

the Female diversity

pledge – see page 39

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 42

Operating responsibly continued

Climate-related risks and opportunities

Whilst not a requirement, Octopus Investments has chosen to continue evolving its disclosures in line with the

recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and has given some initial

disclosures under the main headings below, which will continue to evolve over future periods.

Governance

Octopus Investments

Day-to-day management of

Titan’s portfolio companies

and oversight of investment

decisions is undertaken by

Octopus Ventures and works

within Octopus Investments’

governance structures.

Octopus Ventures team

Accountable for the delivery

of the RI policies which form

part of the funds they manage.

Responsible investment

therefore forms part of the

investment process.

Titan Board

Considers RI as an integrated

element of Titan’s investment

strategy, and oversight of

climate-related risks and

opportunities forms part of

the existing risk management

process.

Impact and

Sustainability team

Sits within Octopus Investments

and works with Octopus Ventures

to implement responsible

investment processes, and provide

training, tools and support around

disclosures and reporting.

Responsible Investment

(RI) Committee

Comprised of an Octopus

Founder, Chief Executive Ocer,

Chief Investment Ocer, Head

of Institutional, Head of Impact

and Sustainability and Chief of

Sta.

Provides RI oversight and makes

sure that appropriate action

has been taken to address any

concerns within the Octopus

Ventures Investment Committee.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 43

Operating responsibly continued

Strategy

Portfolio

With the transition to a lower carbon economy, the Impact

and Sustainability team are taking ‘transition climate

risks’ and ‘physical climate risks’ into consideration to

understand what could potentially be material to portfolio

company ﬁnancial performance in the short, medium

and long term, and in both best (1.5ºC temperature

change) and worst case (4ºC temperature change) climate

scenarios. Where these risks are identiﬁed as being relevant

to portfolio companies they will be addressed, for example:

• energy management: future increases in energy prices

relating to carbon taxes, carbon pricing or supply could

impact costs and therefore proﬁtability. Recognising

that every company can reduce their energy usage, the

Octopus Ventures team are working with the portfolio

companies to understand and reduce carbon emissions.

Titan

Titan recognises the need to conduct its business,

including investment decisions, in a manner that is

responsible to the environment wherever possible.

Titan does not produce any reportable emissions as the

fund management is outsourced to Octopus, with no

physical assets or property held by Titan. As Titan has

no employees or operations, it is not responsible for any

direct emissions.

Risk management

The investment team use guidance from the

Sustainability Accounting Standards Board (SASB)

to identify climate-related risks. Where potential

material climate-related risks have been identiﬁed, the

investment team assess how well the risk is managed by

the portfolio company. Where appropriate, this is raised

to the Investment Committee as part of the investment

process and is continually monitored.

Metrics and targets

Titan invests in unquoted, early-stage businesses.

In contrast to later-stage, quoted businesses, there

is limited readily available data on climate-related risks

and opportunities that impact the portfolio companies.

To understand the carbon emissions of Titan’s portfolio,

the Octopus Ventures team have taken steps to

measure the portfolio companies’ Scope 1 and 2

greenhouse gas (GHG) emissions by providing them

with access to a carbon measurement tool that will

provide the companies with details of their carbon

footprint. Scope 1 emissions are those directly from

company-owned and controlled resources. Scope 2

emissions are indirect emissions from the generation

of purchased energy from a utility provider. Scope 3

emissions are the result of activities from assets not

owned or controlled by the reporting organisation,

but that the organisation indirectly aects in its value

chain. Whilst Octopus supports portfolio companies in

measuring some Scope 3 emissions such as purchased

goods and services and business travel, this is an area

where it is looking to grow its capability to support the

portfolio companies that are looking to measure their

full scope.

While the ultimate goal is to reduce portfolio emissions

to minimise these risks, the immediate goal is to

increase data coverage to 100% (currently 25% of Titan’s

portfolio companies have been measured) within the

next two years.

Current greenhouse gas emissions (tonnes CO

e):

• Scope 1: 102.13

• Scope 2: 201.74

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 44

Operating responsibly continued

Gender and diversity

Following the upcoming AGM, the Board of Directors will

comprise of two female and two male Non-Executive

Directors with considerable experience of the VCT

industry and investment in early-stage growth

companies. The gender and diversity of the constitution

of the Board is reviewed on an annual basis.

Human rights issues

The Board seeks to conduct Titan’s aairs responsibly.

Titan is required by company law to provide details

of employee, human rights, social and community

issues, including information about any policies it has in

relation to these matters and the eectiveness of such

policies. As an externally managed investment company

with no employees, Titan does not maintain speciﬁc

policies in relation to these matters.

Whistleblowing

The Board considers, on an annual basis, the

arrangements implemented by Octopus to encourage

employees of the Portfolio Manager or the Company

Secretary to raise concerns in conﬁdence, within their

organisation, about possible improprieties in matters of

ﬁnancial reporting or other matters. The Whistleblowing

policy allows for any concerns to be raised via email or

telephone hotline. The Board is satisﬁed that adequate

arrangements are in place to allow an independent

investigation, and follow-on action where necessary,

to take place within the organisation.

Bribery Act

Octopus has introduced robust procedures, set out

in the Anti-Bribery policy, to ensure full compliance

with the Bribery Act 2010 and to make sure that the

highest standards of professional ethical conduct are

maintained. All employees and those working for, or on

behalf of, the ﬁrm are aware of their legal obligations

when conducting company business. This is done via

an online learning platform with annual declarations.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 45

Section 172(1) statement

This report sets out how the Directors have had regard

to promoting the success of Titan for the beneﬁt of its

stakeholders as a whole, and in making their decisions

to have regard to, but not limited to, a list of six

factors contained within this section of the Companies

Act 2006:

• the likely consequence of any decision in the

long term;

• the interests of the Company’s employees;

• the need to foster the Company’s business

relationships with suppliers, customers and others;

• the impact of the Company’s operations on the

community and the environment;

• the desirability of the Company maintaining a

reputation for high standards of business conduct;

and

• the need to act fairly between members of the

Company.

Business strategy

The success of Titan is driven by its investment policy

and liquidity strategy which is set out in the Strategic

Report on page 55. The Portfolio Manager prepares a

detailed budget which is approved by the Board on an

annual basis and reviewed regularly, and forms the basis

for Titan’s resource planning and deployment decisions.

When considering business strategy, the Board also

considers other matters such as the interests of its

various stakeholders and the long-term impact of its

actions on Titan’s future and reputation.

The Board

The Board adopts the 2019 AIC Code of Corporate

Governance which provides a framework for the

governance of investment companies such as Titan.

It is normal practice for Venture Capital Trusts to

delegate authority for day-to-day management of the

Company to a Portfolio Manager, and to outsource

administration, accounting and company secretarial

services. The Board then engages with the Portfolio

Manager in setting, approving and overseeing the

execution of the business strategy and related policies.

At every Board meeting a review of ﬁnancial and

operational performance, as well as legal and

regulatory compliance, is undertaken. The Board also

reviews other areas over the course of the ﬁnancial

year including Titan’s business strategy; key risks;

stakeholder-related matters; diversity and inclusivity;

environmental matters; corporate responsibility and

governance; compliance and legal matters. The Board

has set ﬁnancial KPIs relating to portfolio performance.

The Board formally reviews the performance of the

Portfolio Manager, in relation to both investment

and non-investment services, on an annual basis.

The investment policy and investment process,

including the management of conﬂicts of interest

and the allocations policy, have also been agreed and

documented.

Matters reserved for the Board include, but are not

limited to, all shareholder communication, the setting

of investment policy, investment of cash reserves,

the raising of capital and the allotment and issue of

shares, the buy back of shares, dividend policy, Director

appraisal and succession, ﬁnancial reporting, RIS

announcements, compliance with UK Listing Authority

rules and FCA regulations.

Culture

The Directors seek to apply the ESG principles adopted

by Octopus Ventures and these values help to deﬁne the

culture and relationship with the investment team. There

is a general principle of openness and transparency in

dealings between Octopus Ventures and the Directors,

and clear policies covering, for instance, investment

process and conﬂicts, providing a clear operating

framework. Generally, the culture should contribute to

the purpose of producing consistent returns over the

long term and achieving the agreed KPIs, which will

deliver, most importantly, good returns to shareholders.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 46

Section 172(1) statement continued

Business ethics and governance

The Board is responsible for ensuring that the activities

of Titan and its various investments are conducted in

compliance with the law and applicable governance

and regulatory regimes, and in adherence with

prevailing best practice for the relevant industry. This

includes reviewing internal controls, ensuring that

there is an appropriate balance of skills and experience

represented on the Board, and ensuring that the

ﬁnancial statements give a true and fair view of the

state of aairs of Titan. Further detail can be found in

the Statement of Directors’ Responsibilities on page 78.

In the year to 31 December 2022 no areas of concern

have been ﬂagged in this regard.

Relations with key stakeholders

The requirement for Titan to consider the interests of

its key stakeholders is limited as it does not have any

employees. The Board considers Octopus to be its key

business partner as it has responsibility for the provision

of investment management, administration, custody

and company secretarial services.

As Titan is classiﬁed as a full-scope Alternative

Investment Fund under the Alternative Investment Fund

Managers Directive (the ‘AIFM Directive’), it has in place

an agreement with Octopus AIF Management Limited to

act as Manager (an authorised alternative investment

fund manager responsible for ensuring compliance with

the AIFM Directive). Octopus AIF Management Limited

has in turn appointed Octopus Investments Limited

to act as Portfolio Manager to Titan (responsible for

portfolio management and the day-to-day running

of the Company). The AIF Manager’s main focus is

risk management and the review of the valuation of

Titan’s portfolio.

The Board works with Octopus in the selection of

third-party providers such as the registrars, corporate

broker and VCT status adviser. Its selection is made

on the basis of quality of service, accuracy and price.

Any errors or delays reﬂect badly on Titan, but more

importantly can cause inconvenience, and potential

loss, for shareholders. The performance of third-party

providers is reviewed at least annually.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 47

Section 172(1) statement continued

Our key stakeholders

Shareholders

Why we engage

The Board recognises the critical importance of

open and timely communications with shareholders.

Their support is fundamental to raising further capital

which is dependent on Titan’s performance and

clear reporting on portfolio progress. Shareholders

are encouraged to attend and vote at shareholder

meetings and to raise questions in relation to

Titan’s progress.

How we engage

The annual and interim reports, prospectus and other

shareholder information are published on the Octopus

Investments website octopustitanvct.com. Details of

the portfolio, the investment team and other insights

are published on the Octopus Ventures website

octopusventures.com. Shareholder enquiries are

handled promptly by Octopus Investments. The Chair

responds to communications addressed to the Board.

The Directors aim to make sure that the annual

report and ﬁnancial statements are fair, balanced

and understandable, and that sucient information

is provided to shareholders to assess Titan’s

performance, business approach and strategy.

The shareholder event also provides the opportunity

for shareholders to receive an update on the portfolio

and to meet members of the investment team.

Portfolio companies

Why we engage

Titan’s performance and the performance of its

underlying portfolio companies are directly and

intrinsically linked. The Portfolio Manager monitors

the portfolio companies through a programme of

regular company meetings as part of its investment

process.

How we engage

The Board has also given Octopus discretionary

authority to vote on portfolio company resolutions

on its behalf as part of its approach to corporate

governance, and encourages it to do so. As part of

the portfolio valuation review the Board is provided

with sucient information and support to scrutinise

the performance of the portfolio companies.

Octopus and suppliers

Why we engage

Titan is reliant on Octopus as the key provider of

investment management and non-investment

services. In addition, third parties such as

Computershare, Titan’s registrar; and Panmure

Gordon, Titan’s corporate broker; as well as lawyers

and tax advisers provide key services for Titan and

shareholders. Titan works with our suppliers to make

sure that it can provide an appropriate level of service

and regulatory compliance function. Titan is focused

on ensuring that we have the right suppliers and

relationships that can eectively deliver the right

services for the business in line with applicable laws,

regulations and best practice.

How we engage

Titan engages with Octopus and its third-party

suppliers on the basis of proven track record with

observance of minimum levels of performance,

ethics and governance in order to create value and

mitigate risk. Octopus attends all Board meetings

with regular updates on investment performance,

risks and non-investment services activities as well as

ad hoc analysis as requested by the Board. The Board

has a positive and open relationship with Octopus

and annually, following a review, votes on retaining

Octopus as the Portfolio Manager. A variety of

independent professional advisers are utilised by Titan

to help with certain activities, including regulatory

and legal compliance, for example lawyers; tax

advisers; corporate brokers; and auditors.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 48

Section 172(1) statement continued

Our key stakeholders continued

Community and environment

Why we engage

Titan aims to back pioneering entrepreneurs, leading

technology and tech-enabled businesses, to shape

the world we live in. The Board considers it important

that Titan has a responsible approach to investing as

set out in the framework on page 39, taking account

of environmental, social and governance matters.

Titan’s investment operations create employment,

aid economic growth, generate tax revenues and

produce wealth, thus beneﬁtting the community and

economy overall.

How we engage

Apart from the Board’s recognition that the

responsible investment policy should help to mitigate

the impacts of climate change, the Board has moved

to a largely paperless operation over the past three

years and utilises conferencing platforms where

appropriate.

The Board requires that Octopus collects data on

diversity within the portfolio and actively works with

our portfolio companies on an ongoing basis to

support their talent management and recruitment,

sta well-being and diversity policies and initiatives.

A condition of our investment is that the company

must have in place a Diversity and Inclusion policy, as

well as an Anti-Harassment and Discrimination policy.

Government and regulators

Why we engage

Good governance and compliance with applicable

regulations is vital in ensuring the continued success

of Titan and the regimes within which it operates.

Octopus, on behalf of the Board, actively engages

with HMRC and HMT to seek changes in VCT

legislation, lobbying the government to highlight the

economic beneﬁts of VCTs.

How we engage

The Board encourages openness and transparency

and promotes proactive compliance with new

regulation.

Titan, through its Portfolio Manager, engages with

government and regulatory bodies at regular intervals

as well as participating in focus groups and research

with industry bodies.

Government and regulatory policy informs strategic

decision-making at Board level with consideration

given to the impact Titan has on the sector.

Key decisions and actions during the year which have required the Directors to consider applicable Section 172 factors include:

Long-term strategy

S172 matters/stakeholders

considered:

(a) (b) (d) (f)

The targets below have been agreed with the Portfolio Manager as part of the long-term strategy of Titan:

i) regular dividends of 5p per annum with the potential to pay special dividends as investments are realised at a signiﬁcant

proﬁt;

ii) maintaining a NAV per share of at least 90p after the payment of dividends;

iii) generating sucient cash from realisations within the portfolio to cover share buybacks, dividends and operating costs;

and

iv) capital raised from fundraising predominantly utilised for new and follow-on investments.

i) and ii) should provide a minimum 5p per share overall return to shareholders, whereas iii) and iv) provides that cash raised

from shareholders should be solely directed to investment in the portfolio, and not in support of operating costs. The eect for

shareholders will be to provide them ongoing returns via dividends whilst maintaining the value of their holdings.

Communication



S172 matters/stakeholders

considered:

(a) (b) (e) (f)

During the Covid-19 pandemic, shareholder events, in which the Portfolio Manager provides an update, were introduced when

the AGM could not be held in person due to social distancing restrictions. Following the success of these shareholder events,

they have continued despite restrictions no longer being in place. Attendance at these events is signiﬁcantly higher than at

AGMs, and still provides shareholders with an opportunity to put questions to the Chair and Portfolio Manager.

Since 2022, AGMs have again been held as physical meetings at the Company’s registered oce.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 49

Section 172(1) statement continued

The impact of key decisions on stakeholders in 2022



of interest and fund

allocation policies

S172 matters/stakeholders

considered:

(a) (b) (c) (d) (f)

There is an external review, conducted annually by PwC, of the Octopus Conﬂicts of Interest framework. This was introduced in

2021 following the decision by Octopus to launch new products which may co-invest with Titan. The Board continue to engage

with Octopus on this matter with a regular review of allocation policies.

A number of recommendations classed as medium or low risk were made by PwC and adjustments to the Octopus Investments

framework have been made to address these as appropriate.

Fundraising launch



S172 matters/stakeholders

considered:

(a) (b) (c) (f)

The Board reviewed cash forecasts to April 2024 in order to evaluate the cash needs over that period set against retaining a

sucient cash buer to operate Titan, support the portfolio with follow-on capital and to take advantage of new investment

opportunities as they arise. In November 2022, the Board approved a fundraise of £175 million with a £75 million over-allotment

facility for the 2022/23 tax year.

Key – Section 172 matters considered

(a) The likely consequence of any decision in the long term.

(b) The interests of Titan’s shareholders.

(d) The need to foster Titan’s relationships with government and regulators.

(e) The impact of Titan’s operations on the community and the environment.

(f) The desirability of Titan maintaining a reputation for high standards of business conduct.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 50

Section 172(1) statement continued

The impact of key decisions on stakeholders in 2022 continued

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 51

Risks and risk management

Emerging and principal risks, and risk management

Emerging risks

The Board has considered emerging risks. The Board seeks to mitigate emerging risks

and those noted below by setting policy, regular review of performance and monitoring

progress and compliance. In the mitigation and management of these risks, the Board

applies the principles detailed in the Financial Reporting Council’s Guidance on Risk

Management, Internal Control and Related Financial and Business Reporting.

Risk Mitigation Change

Investment performance:

The focus of Titan’s investments is into unquoted, small and

medium-sized VCT qualifying companies which, by their

nature, entail a higher level of risk and shorter cash runway

than investments in larger quoted companies.

Octopus has signiﬁcant experience and a strong track record of investing

in early-stage unquoted companies, and appropriate due diligence is

undertaken on every new investment. A member of the Octopus Ventures

team is typically appointed to the board of a portfolio company, and regular

board reports are prepared by the portfolio company’s management

and examined by the Manager. This arrangement, in conjunction with its

portfolio talent team’s active involvement, allows Titan to play a prominent

role in a portfolio company’s ongoing development and strategy. This

includes the impact of Covid-19, and the current situation in Ukraine,

on portfolio companies. The overall risk in the portfolio is mitigated by

maintaining a wide spread of holdings in terms of ﬁnancing stage, age,

industry sector and business models. The Board reviews the investment

portfolio with the Portfolio Manager on a regular basis. The Portfolio

Manager is incentivised to make sure Titan performs well, via a performance

incentive fee (charged annually) for exceeding certain performance hurdles,

as detailed in Note 19 on page 104.

Increased due to

the dicult macro

environment and

challenging trading

conditions for some

portfolio companies.

The Board assesses the risks faced by Titan and, as a board,

reviews the mitigating controls and actions, and monitors the

eectiveness of these controls and actions.

The following are some of the potential emerging risks management and the

Board are currently monitoring:

• adverse changes in global macroeconomic environment;

• high market valuation;

• geo-political instability; and

• climate change.

Principal risks

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 52

Risks and risk management continued

Risk Mitigation Change

VCT qualifying status:

Titan is required at all times to observe the conditions for the

maintenance of approved VCT status. The loss of such approval

could lead to Titan and its investors losing access to the various

tax beneﬁts associated with VCT status and investment.

Octopus tracks Titan’s qualifying status regularly throughout the year, and

reviews this at key points including investment, realisation. This status is

reported to the Board at each Board meeting. The Board has also engaged

external independent advisers to undertake an independent VCT status

monitoring role.

Given the level

of independent

veriﬁcation, a

systemic issue which

would result in the

loss of VCT status

is considered less

likely and therefore

a decreased risk.

Loss of key people:

The loss of key investment sta by the Portfolio Manager could

lead to poor fund management and/or performance due to

lack of continuity or understanding of Titan.

The Portfolio Manager has a broad team experienced in and focused on

early-stage investing. This mitigates the risk of any one individual with

the required skill set and knowledge of venture capital investing, and the

portfolio speciﬁcally, leaving. Key investment sta are also incentivised via

the performance incentive fee.

An increase in risk

exposure reﬂects

a reduction in

performance fees

potentially increasing

attrition.

Operational:

The Board is reliant on the Portfolio Manager to manage

investments eectively, and manage the services of a number

of third parties, in particular the registrar, depositary and

tax advisers. A failure of the systems or controls at Octopus

or third-party providers could lead to an inability to provide

accurate reporting and accounting and to ensure adherence

to VCT rules.

The Board reviews the system of internal controls, both ﬁnancial and

non-ﬁnancial, operated by Octopus (to the extent the latter are relevant

to Titan’s internal controls). These include controls designed to make sure

that Titan’s assets are safeguarded and that proper accounting records are

maintained.

No overall change

in risk exposure on

balance.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 53

Risks and risk management continued

Risk Mitigation Change

Information security:

A loss of key data could result in a data breach and ﬁnes.

The Board is reliant on Octopus and third parties to take

appropriate measures to prevent a loss of conﬁdential

customer information.

Annual due diligence is conducted on third parties which includes a review of

their controls for information security. Octopus has a dedicated information

security team and a third party is engaged to provide continual protection in

this area. A security framework is in place to help prevent malicious events.

No overall change on

balance, although

cyber threat remains

a signiﬁcant risk area

faced by all service

providers.

Economic:

Events such as an economic recession and movement in

interest rates could adversely aect some smaller companies’

valuations, as they may be more vulnerable to changes in

trading conditions or the sectors in which they operate.

This could result in a reduction in the value of Titan’s assets.

Titan invests in a diverse portfolio of companies, across a range of sectors,

which helps to mitigate against the impact on any one sector. Titan also

maintains adequate liquidity to make sure it can continue to provide

follow-on investment to those portfolio companies which require it and

which is supported by the individual investment case.

Continued

uncertainty in

an environment

that includes high

inﬂation, high

interest rates and

other economic

factors.

Legislative:

A change to the VCT regulations could adversely impact

Titan by restricting the companies Titan can invest in under

its current strategy. Similarly, changes to VCT tax reliefs for

investors could make VCTs less attractive and impact Titan’s

ability to raise further funds.

The Portfolio Manager engages with HMT and industry bodies to

demonstrate the positive beneﬁts of VCTs in terms of growing early-stage

companies, creating jobs and increasing tax revenue, and to help shape any

change to VCT legislation. The changes to VCT regulations in 2018 largely

beneﬁtted Titan as there were increased annual and lifetime investment

limits introduced for Knowledge Intensive companies (i.e. those that have

a high proportion of Research and Development or innovation spend), and

many of the companies in which Titan invests qualify as such companies.

Reduced slightly,

reﬂecting a

sentiment that the

sunset clause is

likely to be removed,

although political

uncertainty remains.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 54

Risks and risk management continued

Risk Mitigation Change

Liquidity:

The risk that Titan’s available cash will not be sucient to meet

its ﬁnancial obligations. Titan invests into smaller unquoted

companies, which are inherently illiquid as there is no readily

available market for these shares. Therefore, these may be

dicult to realise for their fair market value at short notice.

Titan’s liquidity risk is managed on a continuing basis by Octopus in

accordance with policies and procedures agreed by the Board. Titan’s overall

liquidity risks are monitored on a quarterly basis by the Board, with frequent

budgeting and close monitoring of available cash resources. Titan maintains

sucient investments in cash and readily realisable securities to meet its

ﬁnancial obligations. At 31 December 2022, these investments were valued

at £162,945,000 (2021: £198,373,000), which represents 15% (2021: 14%) of the

net assets of Titan.

Increased to reﬂect

the potential

knock-on eects

of economic

uncertainty,

including impacts

on fundraising and

the risk of disposal

failures.

Valuation:

The portfolio investments are valued in accordance with

International Private Equity and Venture Capital (IPEV)

valuation guidelines. This means companies are valued at fair

value. As the portfolio comprises smaller unquoted companies,

establishing fair value can be dicult due to the lack of a

readily available market for the shares of such companies and

the potentially limited number of external reference points.

Valuations of portfolio companies are performed by appropriately

experienced sta, with detailed knowledge of both the portfolio company

and the market it operates in. These valuations are then subject to review

and approval by Octopus’ Valuation Committee, comprised of sta who

are independent of Octopus Ventures with relevant knowledge of unquoted

company valuations, as well as Titan’s Board of Directors.

An increase in

valuation risk reﬂects

greater economic

uncertainty within

valuation modelling.

Foreign currency exposure:

Investments held and revenues generated in other currencies

may not generate the expected level of returns due to changes

in foreign exchange rates.

Octopus and the Board regularly review the exposure to foreign currency

movement to make sure the level of risk is appropriately managed.

Investments are primarily made in GBP, EUR and USD so exposure is limited

to a small number of currencies. On realisation of investments held in foreign

currencies, cash is translated to GBP shortly after receiving the proceeds to

limit the amount of time exposed to foreign currency ﬂuctuations.

Reduced exposure

due to the realisation

of investments held

in foreign currencies

during the year.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 55

Business review

Investment policy

Titan’s focus is on providing early-stage, development

and expansion funding to unquoted companies. Titan

typically makes an initial investment of £1 million to

£10 million and will make further follow-on investments

into existing portfolio companies. The intention is to

hold a portfolio of largely unquoted technology and

tech-enabled companies.

No material changes may be made to Titan’s investment

policy without the prior approval of shareholders by the

passing of an Ordinary Resolution. The Directors will

continually monitor the investment process and secure

compliance with the investment policy.

The Directors control the overall risk of the portfolio by

ensuring that Titan has exposure to a diversiﬁed range

of portfolio companies from a number of dierent

technology and tech-enabled sectors. Concentration risk

is mitigated by ensuring that at the point of investment

no more than 15% of Titan by value will be in any one

investment. Any borrowing by Titan for the purposes of

making investments will be in accordance with Titan’s

Articles of Association.

The investment proﬁle is expected to be:

• 80-90% in VCT qualifying investments, primarily in

unquoted companies; and

• 10-20% in non-VCT qualifying investments or cash.

Non-VCT qualifying investments

An active approach is taken to manage any cash

held, prior to investing in VCT qualifying companies.

After Titan makes sure it satisﬁes all VCT investment

qualiﬁcation targets required by HMRC, the majority of

the remaining cash will be invested in accordance with

HMRC rules for non-qualifying investments. Currently

this includes Undertakings for Collective Investments

in Transferable Securities (UCITS), corporate bonds or

other money market funds, including those managed

by Octopus.

VCT qualifying investments

Investment decisions made must adhere to HMRC’s VCT

qualiﬁcation rules. In addition to adhering to the VCT

rules, when contemplating a prospective investment in

a company, particular consideration is given to:

• the strength of the management team;

• large, typically global, addressable markets;

• the portfolio company’s ability to sustain a

competitive advantage;

• the existence of proprietary technology;

• visibility over future revenues and recurring income;

and

• the company’s prospects of being sold or ﬂoated in

the future, at a signiﬁcant multiple on the initial cost

of investment.

A review of the investment portfolio and of market

conditions during the period is included in the Chair’s

Statement and Portfolio Manager’s Review which

form part of the Strategic Report on pages 23 to 38

respectively.

Liquidity strategy

The Board’s strategy is to maintain an appropriate level

of liquidity on the balance sheet to continue to achieve

the following ﬁve targets:

• to support further investment in existing portfolio

companies if required;

• to take advantage of new investment opportunities

as they arise;

• to cover the running costs of Titan as they fall due;

• to support a consistent dividend ﬂow; and

• to assist liquidity in the shares through the buyback

facility.

Liquidity in Titan is primarily driven by proﬁtable exits

and fundraising activities.

VCT regulation

Compliance with the required VCT rules and regulations

is considered when all investment decisions are made.

Internally. This is measured on a continuous basis and

it is also reviewed by Shoosmiths LLP every six months,

who perform a comprehensive validation exercise. One

of the primary purposes of the investment policy is to

make sure Titan continues to qualify and is approved as

a VCT by HMRC. The main criteria to which Titan must

adhere to are detailed on page 111.

Titan will continue to ensure its compliance with the

qualiﬁcation requirements.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 56

Business review continued

Titan performance

The Board is responsible for Titan’s investment strategy

and performance, although the management of the

investment portfolio is delegated to Octopus through

the Investment Management Agreement, as referred

to in the Directors’ Report on page 73.

The graph compares the NAV total return and share

price total return (gross dividends reinvested) of Titan

over the period from October 2007 to December 2022

with the total return from a notional investment

in the FTSE Small-Cap index over the same period

(all rebased to 100p). This index is considered to be

the most appropriate broad equity market index

for comparative purposes, given the nature of the

underlying investments. The Board wishes to point out

that VCTs are not able to make qualifying investments

in companies quoted on the Main Market in their

observance of the HMRC rules.

Titan will continue to ensure its compliance with the

qualiﬁcation requirements.

The Strategic Report was approved on behalf of the

Board by:

Tom Leader

Chair

24 April 2023

AIC methodology: The NAV total return to the investor, including the original amount invested (rebased to 100p)

from launch, assuming that dividends paid were reinvested at the NAV of Titan at the time the shares were quoted

ex-dividend. Transaction costs are not taken into account.

The loss per share for the year ended 31 December 2022 is (24.3)p (2021: earnings of 19.3p per share). Further details

can be found in Note 8 of the ﬁnancial statements on page 95.

NAV and share price total return since launch

140

190

240

290

340

NAV total return (gross dividend reinvested) plus 30% upfront income tax relief rebased to 100p at launch

NAV total return (gross dividend reinvested) rebased to 100p at launch

FTSE Small-Cap total return rebased to 100p at launch

Total return (p)

Oct 07

Oct 08

Apr 08

Apr 09

Oct 09

Apr 10

Oct 10

Oct 11

Apr 11

Apr 12

Oct 12

Oct 14

Oct 13

Oct 15

Dec 22

Apr 13

Apr 14

Apr 15

Apr 16

Oct 16

Apr 17

Oct 17

Apr 18

Oct 18

Apr 19

Dec 19

Jun 20

Dec 20

Jun 21

Dec 21

Jun 22

1. Total return is an alternative performance measure calculated as movement in NAV per share in the period plus dividends paid in the period,

divided by the NAV per share at the beginning of the period.

2. Based on notional investment on 31 October 2007.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 57

Governance

Board of Directors 58

Corporate governance report 60

Leadership and purpose 62

Division of responsibilities 63

Composition, succession and evaluation 64

Audit, risk and internal control 66

Management Engagement Committee 69

Remuneration 70

Directors’ report 73

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 58

Board of Directors

Tom Leader

Non-Executive Chair

Tom has over 30 years’ private equity experience. He

is currently Head of Caledonia Private Capital (part

of Caledonia Investments plc). Before Caledonia, Tom

worked at Nova Capital Management, Baring Private

Equity Partners and Morgan Grenfell Private Equity.

Tom started his career in the management consultancy

practice of Coopers & Lybrand. Tom is a Non-Executive

Director of Stonehage Fleming Family & Partners

Limited and 7IM Holdings Limited. Separately, he is

Non-Executive Chair of Penox Group GmbH.

Gaenor Bagley

Non-Executive Director

Following a 30-year career in professional services, where

she held a variety of leadership positions including at

board level, Gaenor now has a portfolio of non-executive

director roles. Her other current roles include:

Non-Executive Director, Chair of Audit Committee and

Chair of Remuneration Committee, Zopa Bank Limited;

Non-Executive Director, National Audit Oce; Chair,

The Kemnal Academies Trust; external member of

Council, Cambridge University. The majority of Gaenor’s

professional career has been as a M&A tax adviser

with PwC as part of the tax practice. In 2011 she was

appointed to the executive board of PwC UK to be Head

of People, with responsibilities for developing the ﬁrm’s

People and Corporate Social Responsibility strategy.

Alongside this role she was the Global Head of Learning

and Development, responsible for the development

strategy for the PwC network ﬁrms. From July 2016 until

her retirement in December 2017, Gaenor was Head

of Corporate Purpose at PwC UK, leading on PwC’s

Corporate Social Responsibility agenda.

Matt Cooper

Non-Executive Director

Matt currently works as a Non-Executive Chair and/or

Director with a range of public and private companies.

These currently include Intrepid Owls Ltd, CatchApp

Ltd, VouchedFor Ltd and Live Tech Games Ltd.

Matt’s areas of expertise include corporate strategy

formulation, brand and marketing and implementation,

organisational culture and design, and executive

coaching and leadership. Previously, Matt was Principal

Managing Director of Capital One Bank Europe plc

until leaving the company in 2001. Originally from New

Jersey, Matt graduated ﬁrst in his class in Chemistry

from Princeton University in 1988. Matt was a director

of Octopus Titan VCT 1 plc from 29 October 2007 to

27 November 2014, in addition to being a director

of Titan from 29 October 2007 to date. He was also

Chair of Octopus Capital Limited from July 2001 until

September 2022.

Matt will be retiring from the Board at the AGM.

Key:

Independent

Audit Committee

Chair

Management Engagement CommitteeNomination and Remuneration Committee

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 59

Board of Directors continued

Jane O’Riordan

Non-Executive Director

Jane is currently Chair of Turtle Bay Hospitality,

Caravan Restaurants and of Flight Club Darts. Jane

was previously a director of Yellowwoods Associates

UK Limited, where she was involved in the strategic

development of companies such as Nando’s, Gourmet

Burger Kitchen, Pizza Express/Gondola and others.

Before Yellowwoods, Jane was a director with Braxton

Associates, the then strategic consulting division of

Deloitte & Touche. In addition to over 29 years of private

equity, venture capital and management consulting

experience, Jane worked for three years with British

Aerospace as a spacecraft systems engineer. Jane has

a BSc in mechanical engineering and an MBA from

Harvard Business School. Jane was Director and Chair

of Octopus Titan VCT 5 plc from 17 November 2010 to

27 November 2014 and has been a director of Titan from

27 November 2014 to date.

Lord Rockley

Non-Executive Director

Anthony is a qualiﬁed chartered accountant and former

partner at KPMG. He joined KPMG in 1983 and held

various positions throughout his career, most notably

within the banking sector and latterly as the lead audit

partner in KPMG’s Private Equity Group (PEG) which

he was instrumental in establishing. He led PEG Audit

until his retirement as a partner in 2015. Anthony was

a member of the British Venture Capital Association

working party and was key in the development of

the ﬁrst valuation guidelines for the industry. He was

also a member of the International Private Equity and

Venture Capital Guidelines Board between 2005 and

2014. He has an MA in Natural Sciences from Cambridge

University.

Key:

Independent

Audit Committee

Chair

Management Engagement CommitteeNomination and Remuneration Committee

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 60

Corporate governance report

The Association of Investment Companies Code of

Corporate Governance (the ‘AIC Code’), issued by

the AIC in February 2019, addresses the principles and

provisions set out in the UK Corporate Governance Code

(the ‘UK Code’), issued by the Financial Report Council

(FRC) in July 2018, as well as setting out additional

provisions on issues that are of speciﬁc relevance to

Titan. The FRC has conﬁrmed that members of the

AIC, who report against the AIC Code, will be meeting

their obligations in relation to the UK Code and the

associated disclosure requirements under paragraph

9.8.6 of the Listing Rules. The AIC Code is available on

the AIC’s website www.theaic.co.uk. It includes an

explanation of how the AIC Code adapts the principles

and provisions set out in the UK Code to make them

relevant for investment companies.

Corporate governance within the closed-ended

investment company industry diers from that of other

companies. In addition, VCTs dier from most other

investment companies in that they have, developed

over many years, a complex range of additional legal,

tax and regulatory requirements.

Titan, as a VCT and closed-ended investment company,

has particular factors which have an impact on its

governance arrangements. Titan:

• outsources all day-to-day activities (such as portfolio

management, administration, accounting, custody

and company secretarial). This means that it is

governed entirely by a Board of Non-Executive

Directors. In these circumstances, the proper

oversight of these relationships is the key aspect of

achieving good corporate governance;

• does not have executive directors or employees. As a

consequence, the only ‘corporate memory’ is that of

the Non-Executive Directors; and

• does not have customers, only shareholders.

The AIC Code deals with matters such as the

relationship with the manager and other service

providers.

In practice, most of the time spent by the board of a

well-functioning investment company should be spent

on matters of general corporate governance (e.g. the

investment strategy, policy and performance), which

applies to Titan.

Titan is committed to maintaining high standards in

corporate governance. With the exception of the items

outlined below, the Directors consider that Titan has,

throughout the year under review, complied with the

provisions set out in the AIC Code:

• Titan does not have a Senior Independent Director;

this is not considered necessary;

• the Chair is a member of the Audit Committee,

having been Chair of the Audit Committee until

June 2022. The Directors believe this is appropriate

to beneﬁt from his skills and knowledge;

• the Chair is also Chair of the Nomination and

Remuneration Committee, which the Directors

consider to be appropriate given the small number

of independent Directors and tenure of those on

the Board;

• the Directors do not stand for annual re-election

in order to make sure experience is retained on

the Board; and

• Titan has no major shareholders, so shareholders are

not given the opportunity to meet any Non-Executive

Directors at a speciﬁc meeting other than the AGM,

or other designated shareholder events, but are

welcome to contact the Board or Octopus at

any time.

The Board of Directors has considered the principles and

recommendations of the Association of Investment Companies

Code of Corporate Governance.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 61

Corporate governance report continued

Viability statement

In accordance with the FRC UK Corporate Governance

Code published in 2018 and provision 36 of the AIC

Code of Corporate Governance, the Directors have

assessed the prospects of Titan over a period of ﬁve

years, consistent with the expected investment hold

period of a VCT investor. A fundraising was launched on

10 November 2022 and closed on 5 April 2023, raising

£237 million. Under VCT rules, subscribing investors are

required to hold their investment for a ﬁve-year period

in order to beneﬁt from the associated tax reliefs. The

Board regularly considers strategy, including investor

demand for Titan’s shares, and a ﬁve-year period is

considered to be a reasonable time horizon for this.

The Board carried out a robust assessment of the

emerging and principal risks facing Titan and its current

position, including risks which may adversely impact

its business model, future performance, solvency or

liquidity, and focused on the major factors which aect

the economic, regulatory and political environment.

Particular consideration was given to Titan’s reliance

on, and close working relationship with, the Portfolio

Manager. The principal risks faced by Titan and the

procedures in place to monitor and mitigate them are

set out on pages 51 to 54.

The Board has carried out robust stress testing of cash

ﬂows which included assessing the resilience of portfolio

companies, including the requirement for any future

ﬁnancial support and the ability to pay dividends, and

buybacks.

The Board has additionally considered the ability of Titan

to comply with the ongoing conditions to make sure

it maintains its VCT qualifying status under its current

investment policy.

Based on this assessment the Board conﬁrms that it

has a reasonable expectation that Titan will be able to

continue in operation and meet its liabilities as they fall

due over the ﬁve-year period to 31 December 2027. The

Board is mindful of the ongoing risks and will continue to

make sure that appropriate safeguards are in place, in

addition to monitoring the cash ﬂow forecasts to ensure

Titan has sucient liquidity.

Going concern

Titan’s business activities, together with the factors

likely to aect its future development, performance

and position, are set out in the Strategic Report. Further

details on the management of ﬁnancial risk may be

found in Note 16 to the ﬁnancial statements.

The Board receives regular reports from Octopus and

the Directors believe that Titan has adequate ﬁnancial

resources to continue in operational existence for a

period of at least 12 months from the date of the signing

of these ﬁnancial statements. In reaching this conclusion

the Directors have considered the liquid assets of Titan

and its ability to meet its obligations as they fall due.

As no material uncertainties leading to signiﬁcant doubt

about going concern have been identiﬁed, and taking

into account all available information about Titan,

the Directors believe that it is appropriate to continue

to adopt the going concern basis of accounting in

preparing the ﬁnancial statements.

Board leadership and purpose

The Board is responsible for leading the business in

the way which it believes is most likely to lead to

long-term sustainable success. This includes eective

engagement with our stakeholders.

Remuneration

The Board comprises Non-Executive Directors only, who

receive fees which are subject to periodic review. No

element of their remuneration is performance related.

Composition, succession and evaluation

The Board makes sure it is balanced with the

appropriate skills and maintains a succession plan. Its

performance and composition are considered annually.

Audit, risk and internal control

Titan’s strategy is determined by the Board,

taking account of the need to avoid unnecessary

or unacceptable risks. The Audit Committee is

appointed to oversee this process on behalf of

the Board.

Division of responsibilities

As all day-to-day activities are outsourced, the Board

ensures proper oversight in order to achieve good

corporate governance.

Read more on page 66

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 62

Leadership and purpose

Board of Directors

Titan currently has a Board of ﬁve Non-Executive Directors, four of whom are

considered to be independent. Matt Cooper is not considered to be independent

due to his role as Chair of Octopus Capital Limited, the parent company of Octopus

Investments Limited, Titan’s Portfolio Manager, from 1 July 2001 to 14 September 2022.

The Board meets regularly, at least six times a year, and on other occasions as required,

to review the investment performance and monitor compliance with the investment

policy laid down by the Board as set out in the Strategic Report on page 55.

The Board has a formal schedule of matters speciﬁcally reserved for its decision

which include:

• the consideration and approval of future developments or changes to the

investment policy, including risk and asset allocation;

• consideration of corporate strategy;

• approval of the appropriate dividend to be paid to the shareholders;

• approval of the annual report and the unaudited half-yearly report;

• the appointment, evaluation, removal and remuneration of Octopus;

• the performance of Titan, including monitoring of the discount of the NAV to the

share price; and

• monitoring shareholder proﬁles and considering shareholder communications.

During the period the following meetings were held:

Board meeting

attendance

Audit Committee

meeting attendance

Nomination and

Remuneration

Committee

meeting

attendance

John Hustler

4/4 1/1 n/a

Matt Cooper 5/8 n/a n/a

Jane O’Riordan 8/8 3/3 1/1

Tom Leader 8/8 3/3 1/1

Gaenor Bagley 8/8 3/3 1/1

Lord Rockley 8/8 3/3 1/1

1. John Hustler resigned as a Director on 14 June 2022.

Additional meetings were held as required to address speciﬁc issues including

considering investment recommendations from Octopus, allotments and purchases

of its own shares.

The Chair leads the Board in the determination of its strategy and in the achievement

of its objectives. The Chair is responsible for organising the business of the Board,

ensuring its eectiveness and setting its agenda, and has no involvement in the

day-to-day business of Titan. He facilitates the eective contribution of the Directors

and makes sure that they receive accurate, timely and clear information and that they

communicate eectively with shareholders.

The company secretarial function is discharged by Octopus Company Secretarial

Services Limited, which is responsible for advising the Board, through the Chair, on

all governance matters. All of the Directors have access to the advice and services of

the Company Secretary, who has administrative responsibility for the meetings of the

Board and its committees. Directors may also take independent professional advice

at Titan’s expense where necessary in the performance of their duties. The Board does

not consider it necessary for the size of the Board or Titan to identify a member of the

Board as the senior Non-Executive Director.

Titan’s Articles of Association and the schedule of matters reserved to the Board for

decision provide that the appointment and removal of the Company Secretary is a

matter for the full Board.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 63

Division of responsibilities

Board committees

The Board has appointed three committees to make recommendations to the Board in

speciﬁc areas:

The Audit Committee consists of four independent Directors. The Audit Committee

believes that Lord Rockley, current Chair of the Audit Committee, possesses

appropriate and relevant ﬁnancial experience. The Board considers that the members

of the Committee are independent and collectively have the skills and experience

required to discharge their duties eectively. The Audit Committee Report is given on

pages 66 to 68.

The Management Engagement Committee, which was established towards the end

of the ﬁnancial year, assists the Board in evaluating the performance of the Portfolio

Manager and other third-party service providers engaged by the Company. The

Management Engagement Committee is chaired by Gaenor Bagley and comprises all

independent Directors.

The Nomination and Remuneration Committee, comprising all independent Directors

and chaired by Tom Leader, considers the selection and appointment of Directors

to the Board and its committees. The Committee considers composition and

succession, appointing new members on merit, measured against objective criteria

with due regard for the beneﬁts of gender and diversity. The Committee also has

responsibility for setting the remuneration policy for the Non-Executive Directors.

Detailed information relating to the remuneration of Directors is given in the Directors’

Remuneration Report on pages 70 to 72.

Key Board activities and decisions during the year

Creation of additional distributable reserves

Distributable reserves are required to pay dividends and facilitate share buybacks.

The Board will continue to seek to create more reserves with the ongoing process of

cancelling share premium, with the appropriate resolution being put to shareholders

at the AGM. Following the external review of reserves undertaken in 2021, the capital

redemption reserve was cancelled and the nominal value of Ordinary shares reduced,

as approved by shareholders at the AGM held in June 2022.

Review of governance arrangements

Following a review of Titan’s governance arrangements, it was agreed that a

Management Engagement Committee be established to assist the Board in evaluating

the performance of the Portfolio Manager and third-party service providers. The

remit of the Nominations Committee was also extended to include remuneration

and new terms of reference for the Committee agreed. In addition, it was agreed

that the annual Board evaluation process would be done on a more formal basis

with a questionnaire approach, as opposed to the individual and collective discussion

approach of previous years.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 64

Composition, succession and evaluation

Titan’s Articles of Association require that one-third of Directors should retire by

rotation each year and seek re-election at the AGM, and that Directors appointed by

the Board should seek re-appointment at the next AGM. All Directors are required to

submit themselves for re-election at least every three years with the exception of Matt

Cooper who stands for re-election annually as he is not considered to be independent

as he was Chair of Octopus Capital Limited, the parent company of Octopus

Investments Limited, Titan’s Portfolio Manager, until his resignation in September 2022.

Matt Cooper was originally appointed to the Board on 29 October 2007; he will not be

standing for re-election this year as he will be retiring from the Board at the conclusion

of the AGM.

The practice mentioned above was followed during the year under review. However,

although Directors stood for election less than three years ago, in this instance the

Articles of Association require the longest-serving Directors to stand. Accordingly,

Jane O’Riordan and Lord Rockley will stand for election at the 2023 AGM.

Date of original

appointment

Date of last

election/re-election

Due date for

re-election

Jane O’Riordan 27/11/2014 AGM 2021 AGM 2023

Tom Leader 08/08/2018 AGM 2022 AGM 2024

Lord Rockley 08/04/2021 AGM 2021 AGM 2023

Gaenor Bagley 07/06/2021 AGM 2022 AGM 2024

Board succession

The Directors recognise the importance of ensuring the Board remains independent,

and collectively has sucient breadth of experience and expertise to appropriately

represent Titan’s shareholders’ best interests, particularly given the continued growth

in complexity of Titan. Trust Associates have been engaged for the recruitment of a

new Non-Executive Director, who is expected to be appointed to the Board later in the

year, with the process being led by the Nomination and Remuneration Committee.

Appointment and replacement of Directors

A person may be appointed as a Director of Titan by the shareholders in a general

meeting by Ordinary Resolution (requiring a simple majority of the persons voting on

the relevant resolution) or by the Directors. No person, other than a Director retiring

by rotation or otherwise, shall be appointed or re-appointed a Director at any general

meeting unless they are recommended by the Directors or, not less than seven nor

more than 42 clear days before the date appointed for the meeting, notice is given

to Titan of the intention to propose that person for appointment or re-appointment

in the form and manner set out in Titan’s Articles of Association. Each Director

who is appointed by the Directors (and who has not been elected as a Director by

the members at a general meeting held in the interval since his appointment as a

Director) is to be subject to election as a Director of Titan by the members at the

ﬁrst AGM following his or her appointment. At each AGM one-third of the Directors

for the time being, or if their number is not three or an integral multiple of three the

number nearest to but not exceeding one-third, are to be subject to re-election. The

Companies Act 2006 allows shareholders in a general meeting by Ordinary Resolution

(requiring a simple majority of the persons voting on the relevant resolution) to remove

any Director before the expiration of his or her period of oce, but without prejudice

to any claim for damages which the Director may have for breach of any contract of

service between him or her and Titan. A person also ceases to be a Director if he or she

resigns in writing, ceases to be a Director by virtue of any provision of the Companies

Act, becomes prohibited by law from being a Director, becomes bankrupt or is the

subject of a relevant insolvency procedure, or becomes of unsound mind, or if the

Board so decides following at least six months’ absence without leave or if he or she

becomes subject to relevant procedures under the mental health laws, as set out in

Titan’s Articles of Association.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 65

Composition, succession and evaluation continued

Independence

The Directors believe that, in line with the AIC Code, all members of the Board

identiﬁed as independent are so in character and judgement with respect to

their duties to the shareholders. Following the AGM, Jane O’Riordan will be the

longest-serving independent Board member, having served on the Board for nine years

since her initial appointment. She is still considered to be independent in the absence

of a connection with the Portfolio Manager or any of Titan’s advisers.

Length of service of the Chair and other Directors is one of a number of factors taken

into account when considering the contribution and ongoing independence of the

Board, both individually and in terms of overall composition. The Board considers

the experience, range of skills, knowledge of Titan and its operating environment

and diversity of the Directors. Accordingly, the Board’s policy on tenure is that the

term the Chair and other Directors serve on the Board should not be restricted to

a ﬁxed time limit in order to ensure sucient corporate memory and consistent

adherence to strategy.

Performance evaluation

Each year a formal performance evaluation is undertaken of the Board as a whole,

its committees and the Directors in the form of one-to-one meetings between the

Chair and each Director. The Directors were made aware of the annual performance

evaluation on their appointment. The Chair provides a summary of the ﬁndings to the

Board, which are discussed at the next meeting and an action plan agreed. There were

no issues requiring action in the period. The performance of the Chair was evaluated by

the other Directors. As a result of the evaluation, the Board considers that all Directors

continue to make an eective contribution and have the requisite skills and experience

to continue to provide able leadership and direction for Titan.

The Board also conducts an evaluation of Octopus, as the Portfolio Manager, and

feedback of the results of the evaluation is provided to Octopus.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 66

Audit, risk and internal control

Audit Committee report

This report is submitted in accordance with the AIC

Code in respect of the year ended 31 December 2022

and describes the work of the Audit Committee in

discharging its responsibilities.

The Committee’s key objective is the provision of

eective governance of the appropriateness of Titan’s

ﬁnancial reporting, the performance of the auditor

and the management of the internal control and

business risks systems. The Directors forming the Audit

Committee can be found on pages 58 and 59.

The Audit Committee’s terms of reference include the

following responsibilities:

• reviewing and making recommendations to the Board

in relation to Titan’s published ﬁnancial statements

and other formal announcements relating to Titan’s

ﬁnancial performance;

• advising the Board on whether the annual report

and ﬁnancial statements, taken as a whole, is fair,

balanced and understandable;

• advising the Board on whether the annual report and

ﬁnancial statements provides necessary information

for shareholders to assess performance, business

model and strategy;

• reviewing and making recommendations to the

Board in relation to Titan’s internal control (including

internal ﬁnancial control) and risk management

systems;

• annually considering the need for an internal audit

function;

• making recommendations to the Board in relation to

the appointment, re-appointment and removal of the

external auditor and approving the remuneration and

terms of engagement of the external auditor;

• reviewing and monitoring the external auditor’s

independence and objectivity and the eectiveness

of the audit process, taking into consideration

relevant UK professional regulatory requirements;

• monitoring the extent to which the external auditor

is engaged to supply non-audit services; and

• ensuring that Octopus has arrangements in place for

the investigation and follow-up of any concerns raised

conﬁdentially by sta in relation to the propriety of

ﬁnancial reporting or other matters.

As part of the process of working with the Board to

maximise eectiveness, meetings of the Committee

usually take place immediately prior to a Board meeting

and a report is provided on relevant matters to enable

the Board to carry out its duties.

The Committee reviews its terms of reference and its

eectiveness annually and recommends to the Board

any changes required as a result of the review. The

terms of reference are available on request from Titan’s

Company Secretary. The Committee meets at least

twice per year and on an ad hoc basis as necessary and

has direct access to BDO LLP, Titan’s external auditor.

Auditor appointment

When considering whether to recommend the

appointment or re-appointment of the external auditor,

the Committee takes into account the tenure of the

current auditor in addition to comparing the fees

charged by similar sized audit ﬁrms. The current auditor

was appointed on 15 March 2018 following a competitive

tender process. Vanessa Bradley, the current audit

partner, has been involved for ﬁve years. Due to rotation

requirements, a new audit partner will be appointed for

the 2023 year-end audit.

Auditor independence and objectivity

When considering the eectiveness of the external

audit, the Committee considered the quality and

content of the audit plan and report provided and the

resultant reporting and discussions on topics raised.

The Committee reviews the information and assurances

provided by the auditor on its compliance with the

relevant ethical standards. No non-audit services were

provided by the auditor in the period under review.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 67

Audit, risk and internal control continued

Audit Committee report continued

Auditor evaluation

The eectiveness of the external audit is assessed as

part of the Board and Committee evaluation process

which is conducted annually. The Committee also

challenges the auditor when present at a Committee

meeting, if appropriate.

Internal audit

Titan does not have an internal audit function as it is

not deemed appropriate given the size of Titan and

the nature of its business. However, the Committee

considers annually whether there is a need for such a

function and makes the appropriate recommendation

to the Board. Octopus has an internal audit function

which reports to the Board annually on the outcome

of the internal audits that have taken place. Any

signiﬁcant issues arising from the Octopus internal audit

that aect Titan would be raised to the Committee

immediately. Octopus’ Compliance Department also

reports regularly to the Board.

The Committee monitors the signiﬁcant risks at each

meeting and Octopus engages closely with the auditor

to mitigate the risks and the resultant impact.

Matters considered by the Audit Committee

During the year ended 31 December 2022, the Audit

Committee discharged its responsibilities by:

• reviewing and approving the external auditor’s terms

of engagement and remuneration;

• reviewing the external auditor’s plan for the

audit of Titan’s ﬁnancial statements, including

identiﬁcation of key risks and conﬁrmation of auditor

independence;

• reviewing Octopus’ statement of internal controls

in relation to Titan’s business and assessing the

eectiveness of those controls in minimising the

impact of key risks;

• reviewing periodic reports on the eectiveness of the

regulatory compliance of Octopus;

• reviewing the appropriateness of Titan’s accounting

policies;

• reviewing Titan’s draft annual ﬁnancial and interim

results statements prior to Board approval;

• reviewing the external auditor’s audit ﬁndings

report to the Committee on the annual ﬁnancial

statements;

• reviewing Titan’s going concern as referred to on page

61; and

• reviewing in detail the valuation of the investment

portfolio and supporting data.

The Committee has considered the whole annual

report and ﬁnancial statements for the year ended

31 December 2022 and has reported to the Board that it

considers them to be fair, balanced and understandable,

providing the information necessary for shareholders to

assess Titan’s ﬁnancial position, performance, business

model and strategy.

Signiﬁcant risks

The Audit Committee is responsible for considering and

reporting on any signiﬁcant risks that arise in relation to

the audit of the ﬁnancial statements.

The Committee and the auditor have identiﬁed the most

signiﬁcant risks for Titan as:

• valuation of investment portfolio: The Committee

gives special audit consideration to the valuation

of investments and supporting data provided by

Octopus. The impact of this risk would be a large

gain or loss in Titan’s results. The valuations are

supported by the portfolio companies’ accounts and

third-party evidence which gives comfort to the Audit

Committee.

• management override of ﬁnancial controls:

The Committee reviews all signiﬁcant accounting

estimates that form part of the ﬁnancial statements

and considers any material judgements applied by

management during the completion of the ﬁnancial

statements.

• recognition of revenue from investments: Investment

income is Titan’s source of revenue. Revenue is

recognised when Titan’s right to the return is

established in accordance with the Statement of

Recommended Practice. Octopus conﬁrms to the

Audit Committee that the revenues are recognised

appropriately.

These issues were discussed with Octopus and the

auditor at the conclusion of the audit of the ﬁnancial

statements.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 68

Audit, risk and internal control continued

Audit Committee report continued

Internal controls

The Directors have overall responsibility for keeping

under review the eectiveness of Titan’s systems of

risk management and internal controls. The purpose of

these controls is to make sure that proper accounting

records are maintained, Titan’s assets are safeguarded

and the ﬁnancial information used within the business

and for publication is accurate and reliable; such a

system can only provide reasonable and not absolute

assurance against material misstatement or loss. The

systems of risk management and internal control are

designed to manage rather than eliminate the risk of

failure to achieve the business objectives. These internal

controls have been in place throughout the period under

review and up to the date of this report.

The Board regularly reviews ﬁnancial results and

investment performance with Octopus. Octopus

identiﬁes the investment opportunities, monitors the

portfolio of investments and manages the assets of

Titan on a discretionary basis.

Octopus is engaged to carry out the accounting

function and retains physical custody of the documents

of title relating to unquoted investments. Octopus

regularly reconciles the client asset register with the

physical documents.

The Directors conﬁrm that they have established a

continuing process throughout the year and up to

the date of this report for identifying, evaluating and

managing the signiﬁcant potential risks faced by

Titan and have reviewed the eectiveness of the risk

management and internal control systems. As part of

this process an annual review of the risk management

and internal control systems is carried out in accordance

with the Financial Reporting Council’s Guidance on Risk

Management, Internal Control and Related Financial

and Business Reporting. The Board does not consider it

appropriate to have an internal audit function due to

the nature of Titan’s transactions as this would not be

an appropriate control for a VCT.

The risk management and internal control systems

include the production and review of monthly bank

reconciliations and management accounts. All outﬂows

made from Titan’s accounts require the authority of

two approved signatories from Octopus. Further to this,

the audit partner has open access to Titan’s Directors

and Octopus is subject to regular review by the Octopus

Compliance Department.

Financial risk management

Titan is exposed to the risks arising from its operational

and investment activities. Further details can be found

in Note 16 of the ﬁnancial statements.

The Committee is also responsible for considering and

reporting on any signiﬁcant issues that arise in relation

to the audit of the ﬁnancial statements. The Committee

can conﬁrm that there were no signiﬁcant issues to

report to the shareholders in respect of the audit of the

ﬁnancial statements to 31 December 2022.

Lord Rockley

Audit Committee Chair

24 April 2023

Strategic report Governance Financials

Management Engagement Committee

Management Engagement Committee report

In December 2022, the Board established a Management

Engagement Committee to help in evaluating the

performance of the Manager and other third-party

service providers engaged by Titan. The Committee

is chaired by Gaenor Bagley, and comprises all the

independent Directors.

The Committee’s responsibilities are:

• to review, at least annually, the contractual

relationships with the Manager and terms of the

management agreement, to make sure they are

competitive and in the interests of shareholders as a

whole, making recommendations to the Board on any

variation to the terms which it considers necessary or

appropriate;

• to review, at least annually, the performance of the

Manager and describe its decisions and rationale in

the annual report;

• to consider whether the appointment of the Manager

continues to be in the interests of shareholders;

• if it considers it necessary or appropriate, to

negotiate/re-negotiate terms with the Manager;

• to review the standard of services provided by

the Manager, whether under the terms of the

management agreement, the non-investment

services agreement (which covers administrative,

company secretarial, sales and marketing activities)

or simply as part of a non-contractual obligation of

understanding;

• to review, monitor and evaluate, at least annually,

the performance of the Company’s third-party

service providers in meeting their obligations under

their respective agreements and to ensure their

continued competitiveness and eectiveness, making

recommendations on any variation to the terms

which it considers necessary or appropriate;

• to assess the Company’s third-party service providers

in their role as stakeholders and whether there is an

appropriate level of engagement with them; and

• to consider any points of conﬂict which may arise

for the providers of services to the Company.

The Committee met subsequent to the period end and

conﬁrmed the continued appointment of Octopus, on

the agreed terms, was in the interests of shareholders.

Gaenor Bagley

Management Engagement Committee Chair

24 April 2023

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 69

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 70

Remuneration

Directors’ remuneration report

Introduction

This report has been prepared in accordance with

Schedule 8 to the Large and Medium-sized Companies

and Groups (Accounts and Reports) (Amendment)

Regulations 2013, in respect of the year ended

31 December 2022. The reporting requirements entail

two sections be included, a policy report and an annual

remuneration report, which are presented below.

Titan’s auditor, BDO LLP, is required to give its opinion

on certain information included in this report; this

comprises the Directors’ emoluments section and share

information below. Their report on these and other

matters is set out on pages 79 to 85.

Consideration by the Directors of matters relating

to Directors’ remuneration

The Board has appointed the Nomination and

Remuneration Committee to consider remuneration;

historically this was considered by the Board. The

Directors have not sought advice or services from

any external person in respect of its consideration of

Directors’ remuneration during the year, although the

Directors expect from time to time to review the fees

against those paid to the Boards of Directors of other

VCTs. The Directors’ remuneration paid during the

period is set out on page 71. Titan does not have a Chief

Executive Ocer, senior management or any employees.

Directors’ remuneration policy report

The Board consists entirely of Non-Executive Directors,

who meet regularly, at least six times a year, and on

other occasions as necessary, to deal with the important

aspects of Titan’s aairs. Directors are appointed with

the expectation that they will serve for at least a period

of three years. All Non-Executive Directors retire at

the ﬁrst general meeting after election and thereafter

one-third of all Directors are subject to retirement

by rotation at subsequent AGMs. Re-election will be

recommended by the Board but is dependent upon

a shareholder vote.

Each Director received a letter of appointment

which is subject to termination by the Director or

Titan on three months’ notice in writing. Copies of

letters of appointment are held at the Company’s

registered oce. None of the Directors are entitled to

compensation payable upon early termination of their

contract other than in respect of any unexpired notice

period.

Titan’s policy is that the fees payable to the Directors

should reﬂect the time spent by the Board on Titan’s

aairs and the responsibilities borne by the Directors.

They should be sucient to attract candidates of high

calibre to be recruited. The policy is for the Chair of the

Board and the Chair of the Audit Committee to be paid

higher fees than the other Directors in recognition of

their more onerous roles.

The policy is to review these rates from time to time.

Due to the nature of Titan, there are no employees other

than the Directors and so no such issues to consider

when determining the Directors’ remuneration.

The maximum level of Directors’ remuneration is

currently ﬁxed by Titan’s Articles of Association, not to

exceed £300,000 in aggregate.

Titan’s policy is for the Directors to be remunerated

in the form of fees, payable quarterly in arrears.

The fees are not speciﬁcally related to the Directors’

performance, either individually or collectively. There

are no long-term incentive schemes, share option

schemes or pension schemes in place. The Articles of

Association also entitle the Directors to be repaid all

reasonable travelling, subsistence and other expenses

incurred by them respectively whilst conducting their

duties as Directors; however, no other remuneration or

compensation was paid or payable by Titan during the

year to any of the current Directors.

The Directors’ remuneration policy was approved by

shareholders at the AGM held in May 2020. Accordingly,

the Policy will be put to shareholders for approval at the

2023 AGM.

Annual remuneration report

This remuneration report is subject to approval by a

simple majority of shareholders at the AGM in June

2023, as in previous years.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 71

Remuneration continued

Directors’ remuneration report continued

Statement of voting at the Annual General Meeting

The 2021 Directors’ remuneration report was presented

to the AGM in June 2022 and received shareholder

approval following a vote on a show of hands. Of the

17,137,637 votes received, those for the resolution totalled

85.7%, 10.0% of votes were at the discretion of the Chair

and 4.3% of the votes cast were against, with 150,842

votes withheld.

The Directors‘ remuneration policy was approved at the

AGM in May 2020. Of the 17,087,626 votes received, those

for the resolution totalled 86.55%, 8.67% of votes were

at the discretion of the Chair and 4.78% of the votes

cast were against, with 397,084 votes withheld.

The proxy forms returned to the registrars contained no

explanation for the votes against the resolution.

Shareholders’ views are always welcome and considered

by the Board. The methods of contacting the Board are

set out in the Directors’ Report on page 76.

Company performance

The Board is responsible for Titan’s investment strategy

and performance, although the management of Titan’s

investment portfolio is delegated to the Portfolio

Manager through the agreements as referred to in the

Directors’ Report.

The performance graph on page 56 also shows the

performance of the NAV and Total Value of Titan.

Further details of Titan’s performance are shown in the

table on page 24 in the Portfolio Manager’s Review.

Directors’ emoluments (audited)

The amount of each Director’s fees for the period were:

Year ended

31 December 2022

£’000

Year ended

31 December 2021

£’000

Year ended

31 December 2020

£’000 2022 change 2021 change 2020 change

John Hustler

40 40

(53)%

0% 0%

Matt Cooper

—

— —

—

— —

Jane O’Riordan

33 33

0% 0%

Mark Hawkesworth

—

18 35

(100)%

(49)% 0%

Tom Leader (Chair)

34 33

24%

3% 0%

Anthony Rockley

24 —

58%

— —

Gaenor Bagley

18 —

100%

— —

Total 171

167 141

1. John Hustler resigned as a Director on 14 June 2022.

2. Matt Cooper’s fees have been paid by Octopus Investments Limited since 1 May 2016.

3. Mark Hawkesworth resigned as a Director on 7 June 2021.

The Directors do not receive any other form of emoluments in addition to the Directors’ fees. Their total remuneration is ﬁxed and not linked to the performance of Titan and no

bonuses were or will be paid to the Directors.

The Chair of the Board and the Chair of the Audit Committee receive additional remuneration over the basic Directors’ fee in recognition of the additional responsibilities and time

commitment required of their roles. From 1 April 2022, Directors’ fees have been paid at the following rates: Chair of the Board £45,000; Chair of the Audit Committee £40,000;

and all other Directors £37,000.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 72

Remuneration continued

Directors’ remuneration report continued

Dividends paid to Directors in the year as a result of their shareholdings in Titan are

shown in Note 20 of the ﬁnancial statements.

Expected fees

for the year to

31 December 2023

Chair

45,000

Chair of the Audit Committee

40,000

Non-Executive Director

37,000

Relative importance of spend on pay

The actual expenditure in the current period is as follows:

Year to

31 December 2022

£’000

Year to

31 December 2021

£’000

Total dividends paid

66,220

135,969

Total buybacks

41,192

34,519

Total Directors’ fees

171

167

Total expenses

29,568

27,963

There were no other signiﬁcant payments during the 12-month period relevant to

understanding the relative importance of spend on pay.

Statement of Directors’ shareholdings (audited)

There are no guidelines or requirements for Directors to own shares in Titan. The

interests of the Directors of Titan during the year (in respect of which transactions are

notiﬁable under Disclosure and Transparency Rule 3.1.2R) in the issued Ordinary shares

of 0.1p each are shown in the table below:

Year to

31 December 2022

Year to

31 December 2021

Matt Cooper

2,353,220

1,911,287

Jane O’Riordan

130,607

113,592

Tom Leader

32,797

23,070

Lord Rockley

42,904

19,172

Gaenor Bagley

14,793

8,912

There have been no changes in the Directors’ share interests between 31 December 2022

and the date of this report.

All of the Directors’ shares were held beneﬁcially except for Matt Cooper who holds his

shares in a nominee account and Jane O’Riordan who holds 41,267 shares in a nominee

account.

Any information required by legislation in relation to executive directors (including a

Chief Executive Ocer) or employees has been omitted because Titan has neither and

so it is not relevant.

By Order of the Board

Tom Leader

Chair

24 April 2023

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 73

Directors’ report

The Corporate Governance Report on pages 60 and 61

and the Audit Committee Report on pages 66 to 68

form part of this Directors’ Report.

The Directors consider that the annual report and

ﬁnancial statements, taken as a whole, is fair, balanced

and understandable and provides the information

necessary for shareholders to assess Titan’s position,

performance, business model and strategy.

Directors

Brief biographical notes on the Directors are given on

pages 58 and 59.

Matt Cooper is not considered to be independent due

to his role as Director and Chair of Octopus Capital

Limited, the parent company of Octopus Investments

Limited, Titan’s Portfolio Manager, from 1 July 2001 to

14 September 2022. As a non-independent Director he

has stood for re-election annually as required by Listing

Rule 15.2.13A. However, Matt Cooper will be retiring

from the Board at the conclusion of the 2023 AGM and

therefore not standing for re-election.

Jane O’Riordan and Lord Rockley will be standing for

re-election this year.

Directors’ and Ocers’ liability insurance

Titan has, as permitted by the Companies Act 2006,

maintained insurance cover on behalf of the Directors

and Company Secretary indemnifying them against

certain liabilities which may be incurred by them in

relation to Titan.

Management

Titan has in place an agreement with Octopus AIF

Management Limited to act as Manager. Octopus AIF

Management Limited has in turn appointed Octopus

Investments Limited to act as Portfolio Manager to

Titan (responsible for portfolio management and the

day-to-day running of Titan). These agreements are

central to Titan’s ability to continue in business. The

principal terms of the management agreement with

Octopus are set out in Notes 3 and 19 of the ﬁnancial

statements.

Octopus also provides secretarial and administrative

services to Titan. BNP Paribas Trust Coporation has been

appointed as depositary to Titan. BNP Paribas provides

cash monitoring, safekeeping of ﬁnancial instruments

and other assets and oversight duties.

The Directors conﬁrm that, in their opinion, the

continuing appointment of Octopus as Portfolio

Manager is in the best interests of the shareholders as

a whole. In reaching this conclusion the Directors have

taken into account the performance of the investment

portfolio and the ability of Octopus to produce

satisfactory investment performance in the future.

They also considered the length of the notice period

of the management agreement and fees payable to

Octopus, together with the standard of other services

provided, as set out above. Details of the fees paid to

Octopus in respect of services provided are detailed in

Note 19 of the ﬁnancial statements.

With the exception of Matt Cooper, no Director has

an interest in any contract to which Titan is a party.

Matt Cooper was the Chair of Octopus Capital Limited

until his resignation on 14 September 2022.

Titan has established a performance incentive

scheme whereby Octopus is entitled to an annual

performance-related incentive fee if certain

performance criteria are met. Further details of this

scheme are disclosed within Note 19 of the ﬁnancial

statements.

Through the agreements described above, the

investment decisions and routine management decisions

such as the payment of standard running costs are

delegated to Octopus.

The Directors present their report and the

audited ﬁnancial statements for the year ended

31 December 2022.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 74

Directors’ report continued

Whistleblowing

Please refer to page 44 for our statement on

whistleblowing.

Bribery Act

Please refer to page 44 for our statement on the

Bribery Act.

VCT regulation

Compliance with required rules and regulations is

considered when all investment decisions are made.

Titan is further monitored on a continual basis to ensure

compliance. The main criteria to which it must adhere

are detailed on page 111.

Titan will continue to ensure its compliance with the

qualiﬁcation requirements.

Environment policy and greenhouse gas emissions

Refer to pages 39 to 44 in the Strategic Report for our

Responsible Investment policy and greenhouse gas

emissions.

Share capital

Titan’s Ordinary share capital as at 31 December 2022

comprised 1,367,949,929 (2021: 1,298,498,396) Ordinary

shares of 0.1p each. No shares were held in Treasury.

At the 2022 Annual General Meeting a resolution was

approved that the issued share capital of Titan be

reduced by cancelling and extinguishing capital to the

extent of 9.9p on each issued fully paid-up share and

reducing the nominal value of each share from 10p to

0.1p and the amount by which the share capital is so

reduced would be used to create a pool of distributable

reserves for Titan.

Share issues

During the period 114,461,503 shares were issued.

On 21 October 2021 an Oer for subscription to raise up to

£125 million in aggregate with an over-allotment facility

of £75 million was launched. As at 31 December 2021,

172,285,599 shares had been issued for a total

consideration of £200 million. This Oer is now closed.

On 10 November 2022 an Oer for subscription

to raise up to £175 million in aggregate with an

over-allotment facility of £75 million was launched.

As at 31 December 2022, 94,306,911 shares had been

issued for a total gross consideration of £91 million.

This Oer closed on 5 April 2023.

Share buybacks

During the 12-month period, Titan purchased 45,009,970

shares, with a nominal value of £1,864,442, for

cancellation at a weighted average price of 92.9p per

share for a total consideration of £41 million, which

represents 3.5% of the shares in issue at the prior year

end (2021: 33,816,980 shares, with a nominal value of

£3,381,698, for cancellation at a weighted average

price of 102.1p per share for a total consideration of

£35 million). These were repurchased in accordance

with Titan’s share buyback facility in order to assist the

marketability of the shares and to prevent the shares

trading at a wide discount to the NAV.

Post balance sheet events

A full list of post balance sheet events since 31 December

2022 can be found in Note 17 of the ﬁnancial statements

on page 103.

Rights attaching to the shares and restrictions

on voting and transfer

Subject to any suspension or abrogation of rights

pursuant to relevant law or Titan’s Articles of

Association, the shares confer on their holders the

following principal rights:

a) the right to receive out of proﬁts available for

distribution such dividends as may be agreed to be

paid (in the case of a ﬁnal dividend in an amount not

exceeding the amount recommended by the Board

as approved by shareholders in a general meeting

or in the case of an interim dividend in an amount

determined by the Board). All dividends unclaimed

for a period of 12 years after having become due for

payment are forfeited automatically and cease to

remain owing by Titan;

b) the right, on a return of assets on a liquidation,

reduction of capital or otherwise, to share in the

surplus assets of Titan remaining after payment of its

liabilities pari passu with the other holders of Ordinary

shares; and

c) the right to receive notice of and to attend and speak

and vote in person or by proxy at any general meeting

of Titan. On a show of hands, every member present

or represented and voting has one vote, and on a poll,

every member present or represented and voting has

one vote for every share of which that member is the

holder. The appointment of a proxy must be received

not less than 48 hours before the time of the holding

of the relevant meeting or adjourned meeting or,

in the case of a poll taken otherwise than at or on

the same day as the relevant meeting or adjourned

meeting, be received after the poll has been

demanded and not less than 24 hours before the time

appointed for the taking of the poll.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 75

Directors’ report continued

Rights attaching to the shares and restrictions on

voting and transfer continued

These rights can be suspended. If a member, or any

other person appearing to be interested in shares held

by that member, has failed to comply within the time

limits speciﬁed in Titan’s Articles of Association with

a notice pursuant to s793 of the Companies Act 2006

(notice by Titan requiring information about interests in

its shares), Titan can, until the default ceases, suspend

the right to attend and speak and vote at a general

meeting. If the shares represent at least 0.25% of their

class, Titan can also withhold any dividend or other

money payable in respect of the shares (without any

obligation to pay interest) and refuse to accept certain

transfers of the relevant shares.

Shareholders, either alone or with other shareholders,

have other rights as set out in Titan’s Articles of

Association and in company law (principally the

Companies Act 2006).

A member may choose whether his shares are evidenced

by share certiﬁcates (certiﬁcated shares) or held in

electronic (uncertiﬁcated) form in CREST (the UK

electronic settlement system).

Any member may transfer all or any of his shares,

subject in the case of certiﬁcated shares to the rules

set out in Titan’s Articles of Association or in the case of

uncertiﬁcated shares to the regulations governing the

operation of CREST (which allow the Directors to refuse

to register a transfer as therein set out); the transferor

remains the holder of the shares until the name of the

transferee is entered in the register of members. The

Directors may refuse to register a transfer of certiﬁcated

shares in favour of more than four persons jointly or

where there is no adequate evidence of ownership or the

transfer is not duly stamped (if so required).

The Directors may also refuse to register a share transfer

if it is in respect of a certiﬁcated share which is not fully

paid up or on which Titan has a lien provided that, where

the share transfer is in respect of any share admitted to

the Ocial List maintained by the UK Listing Authority,

any such discretion may not be exercised so as to

prevent dealings taking place on an open and proper

basis, or if in the opinion of the Directors (and with the

concurrence of the UK Listing Authority) exceptional

circumstances so warrant, provided that the exercise of

such power will not disturb the market in those shares.

Whilst there are no squeeze-out and sell out rules

relating to the shares in Titan’s Articles of Association,

shareholders are subject to the compulsory acquisition

provisions in s974 to s991 of the Companies Act 2006.

Directors’ authority to allot shares, to disapply

pre-emption rights

The authority proposed under Resolution 7 is required

so that the Directors may oer existing shareholders

the opportunity to add to their investment or to oer

potential shareholders an opportunity to invest in Titan

in a tax-ecient manner without it having to incur

substantial costs. Any consequent modest increase in

the size of Titan will, in the opinion of the Directors,

be in the interests of shareholders generally. Any issue

proceeds will be available for investment in line with

Titan’s investment policy and may be used, in part, to

purchase Ordinary shares in the market.

Resolution 7 renews the Directors’ authority to allot

Ordinary shares. Such authority would expire at the later

of the conclusion of the next AGM following the passing

of this Resolution and the expiry of 15 months from the

passing of the Resolution, giving the Directors authority

to allot up to 25% of Titan’s issued share capital as

at the date of the Notice of AGM. This authority is

in addition to existing authorities. The Board intends

to utilise this authority in respect of the fundraising

activities of Titan.

Resolution 8 renews the Directors’ authority to allot

Ordinary shares in connection with the Dividend

Re-Investment Scheme up to 5% of Titan’s issued share

capital as at the date of the Notice of AGM. Such

authority would expire at the later of the conclusion of

the next AGM following the passing of this Resolution

and the expiry of 15 months from the passing of the

Resolution. The Board intends to utilise this authority to

issue shares from time to time under the DRIS.

Resolutions 9 and 10 renew and extend the Directors’

authority to allot equity securities for cash without

pre-emption rights applying in certain circumstances.

These Resolutions would authorise the Directors, until

the conclusion of the next AGM of Titan following the

passing of these Resolutions or, if later, on the expiry

of 15 months from the passing of these Resolutions,

to issue Ordinary shares for cash without pre-emption

rights applying by way of an oer to existing

shareholders. These powers will be exercised only if,

in the opinion of the Directors, it would be in the best

interests of shareholders, as a whole. This authority is in

addition to existing authorities.

Directors’ authority to make market

purchases of its own shares

The authority proposed under Resolution 11 is required

so that the Directors may make purchases of up to

233,371,367 Ordinary shares, representing approximately

14.99% of Titan’s issued share capital as at the date of

the Notice of AGM. Any shares bought back under this

authority will be at a price determined by the Board

(subject to a minimum price of 0.1p (being the nominal

value of such shares) and a maximum price of 5% above

the average mid-market quotation for such shares

on the London Stock Exchange and the applicable

regulations thereunder) and may be cancelled or held in

Treasury as may be determined by the Board.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 76

Directors’ report continued

Directors’ authority to make market

purchases of its own shares continued

The authority conferred by Resolution 10 will expire on

the earlier of the conclusion of the next AGM of Titan

following the passing of this Resolution and 15 months

from the date of the passing of the Resolution unless

renewed, varied or revoked by Titan in a general meeting

and will be in addition to existing authorities. This power

will be exercised only if, in the opinion of the Directors, a

repurchase would be in the best interests of shareholders

as a whole.

Cancellation of share premium account

The Board considers it appropriate to obtain

shareholders’ approval for the cancellation of the

amount standing to the share premium account of

Titan to create (subject to Court approval) a pool of

distributable reserves. A Special Resolution to this eect

is being proposed at Resolution 12.

Substantial shareholdings

As at the date of this report, no disclosures of major

shareholdings had been made to Titan under Disclosure

and Transparency Rule 5 (Vote Holder and Issuer

Notiﬁcation Rules).

Independent auditor

BDO LLP were originally appointed as auditor on

15 March 2018 and oer themselves for re-appointment

as auditor. A resolution to re-appoint BDO LLP will be

proposed at the forthcoming AGM.

As far as the Directors are aware, there is no relevant

audit information of which the auditor is unaware and

the Directors have taken all the steps they ought to have

taken as a Director in order to make them aware of any

relevant audit information and to establish that Titan’s

auditor is aware of that information.

Financial risk management

Titan is exposed to the risks arising from its operational

and investment activities. Further details can be found

in the principal risks detailed on pages 51 to 54, and in

Note 16 of the ﬁnancial statements.

Share buybacks

Subject to the provisions of the Companies Act 2006,

the Articles of Association of Titan and any directions

given by shareholders by Special Resolution, the Articles

of Association specify that the business of Titan is to

be managed by the Directors, who may exercise all the

powers of Titan, whether relating to the management

of the business or not. In particular, the Directors may

exercise on behalf of Titan its powers to purchase its

own shares to the extent permitted by shareholders.

Authority was given at Titan’s 2022 AGM to make

market purchases of up to 14.99% of the issued Ordinary

share capital at any time up to the 2023 AGM and

otherwise on the terms set out in the relevant resolution,

and renewed authority is being sought at the 2023 AGM

as set out in the Notice of Meeting.

Relations with shareholders

Shareholders will have the opportunity to attend the

Annual General Meeting which will be held on 14 June

2023 at 12.00 noon. The meeting will be for voting only.

Titan will also be holding a virtual shareholders event

on 7 June 2022 at 12.00 noon where there will be a

presentation by the Board and Portfolio Manager as well

as an opportunity to ask questions. To register please

see octopustitanvct.com.

The Board is also happy to respond to any written

queries made by shareholders during the course of the

year and can be contacted at 33 Holborn, London,

EC1N 2HT. Alternatively, the team at Octopus will be

pleased to answer any questions you may have and can

be contacted on 0800 316 2295.

Consumer Duty

The Directors are cognisant of the Portfolio Manager’s

obligations to comply with the FCA’s Consumer Duty

rules and principles introduced in 2022 and coming into

force in 2023. Firms subject to Consumer Duty must

ensure they are acting to deliver good outcomes and

that this is reﬂected in their strategies, governance,

leadership and policies. The Portfolio Manager is

currently undergoing a review of its existing practices

to identify areas which it must update to bring in line

with the Consumer Duty principles. Titan is not directly

captured by Consumer Duty, however the Directors

will continue to receive updates on how the Portfolio

Manager is meetings its obligations.

Information given in the Strategic Report

Information on dividends and likely future development

has not been given in the Directors’ Report as equivalent

disclosure has been given in the Strategic Report.

The Directors’ Report was approved on behalf of the

Board on 20 April 2023.

Tom Leader

Chair

24 April 2023

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 77

Financials

Directors’ responsibilities statement 78

Independent auditor’s report 79

Income statement 86

Balance sheet 87

Statement of changes in equity 88

Cash ﬂow statement 90

Notes to the ﬁnancial statements 91

Appendix 106

Shareholder information and contact details 111

Glossary of terms 115

Directors and advisers 116

Notice of Annual General Meeting 117

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 78

Directors’ responsibilities statement

The Directors are responsible for preparing the Strategic Report, the Directors’ Report,

the Directors’ Remuneration Report and the ﬁnancial statements in accordance with

applicable law and regulations. They are also responsible for ensuring that the annual

report and ﬁnancial statements include information required by the Listing Rules of the

Financial Conduct Authority.

Company law requires the Directors to prepare ﬁnancial statements for each ﬁnancial

year. Under that law the Directors have elected to prepare the ﬁnancial statements

in accordance with United Kingdom Generally Accepted Accounting Practice (GAAP),

including Financial Reporting Standard 102 – ‘The Financial Reporting Standard

Applicable in the United Kingdom and Republic of Ireland’ (FRS 102), (United Kingdom

accounting standards and applicable law). 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 aairs and proﬁt or loss of the Company for that period. In

preparing these 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 applicable UK Accounting Standards have been followed, subject to

any material departures disclosed and explained in the 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 Strategic Report, Directors’ 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

sucient to show and explain the Company’s transactions and disclose with

reasonable accuracy at any time the ﬁnancial position of the Company and enable

them to ensure that the ﬁnancial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence

for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

In so far as each of the Directors is aware:

• there is no relevant audit information of which the Company’s auditor is unaware;

and

• the Directors have taken all steps that they ought to have taken to make themselves

aware of any relevant audit information and to establish that the auditor is aware

of that information.

The Directors are responsible for preparing the annual report and ﬁnancial statements

in accordance with applicable law and regulations. Having taken advice from the Audit

Committee, the Directors are of the opinion that this report as a whole provides the

necessary information to assess the Company’s performance, business model and

strategy and is fair, balanced and understandable.

The Directors are responsible for the maintenance and integrity of the corporate and

ﬁnancial information included on the Company’s website. Legislation in the United

Kingdom governing the preparation and dissemination of ﬁnancial statements may

dier from legislation in other jurisdictions.

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

• the ﬁnancial statements, prepared in accordance with United Kingdom Generally

Accepted Accounting Practice, including FRS 102, give a true and fair view of the

assets, liabilities, ﬁnancial position and proﬁt or loss of the Company; and

• the annual report and ﬁnancial statements (including the Strategic Report), give a

fair review of the development and performance of the business and the position

of the Company, together with a description of the principal risks and uncertainties

that it faces.

On behalf of the Board

Tom Leader

Chair

24 April 2023

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 79

Independent auditor’s report



Opinion on the ﬁnancial statements

In our opinion the ﬁnancial statements:

• give a true and fair view of the state of the Company’s aairs as at

31 December 2022 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally

Accepted Accounting Practice

• have been prepared in accordance with the requirements of the Companies

Act 2006.

We have audited the ﬁnancial statements of Octopus Titan VCT Plc (the ‘Company’)

for the year ended 31 December 2022 which comprise the Income Statement, the

Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and

notes to the ﬁnancial statements, including a summary of signiﬁcant accounting

policies. The ﬁnancial reporting framework that has been applied in their preparation

is applicable law and United Kingdom Accounting Standards, including Financial

Reporting Standard 102 The Financial Reporting Standard applicable in the UK and

Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK)

(ISAs (UK)) and applicable law. Our responsibilities under those standards are further

described in the Auditor’s responsibilities for the audit of the ﬁnancial statements

section of our report. We believe that the audit evidence we have obtained is sucient

and appropriate to provide a basis for our opinion. Our audit opinion is consistent with

the additional report to the Audit Committee.

Independence

Following the recommendation of the Audit Committee, we were appointed by

the Board of Directors on 15 March 2018 to audit the ﬁnancial statements for the

year ended 31 October 2018 and subsequent ﬁnancial periods. The period of total

uninterrupted engagement is ﬁve years, covering the years ended 31 October 2018

to 31 December 2022. We remain independent of the Company in accordance with

the ethical requirements that are relevant to our audit of the ﬁnancial statements

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

entities, and we have fulﬁlled our other ethical responsibilities in accordance with these

requirements. The non-audit services prohibited by that standard were not provided to

the Company.

Conclusions relating to going concern

In auditing the ﬁnancial statements, we have concluded that the Directors’ use of the

going concern basis of accounting in the preparation of the ﬁnancial statements is

appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to

continue to adopt the going concern basis of accounting included:

• obtaining the VCT compliance reports prepared by management’s expert during

the year and as at year end and reviewing the calculations therein to check that the

Company was meeting its requirements to retain VCT status;

• consideration of the Company’s expected future compliance with VCT legislation,

the absence of bank debt, contingencies and commitments and any market or

reputational risks;

• reviewing the forecasted cash ﬂows that support the Directors’ assessment of going

concern, challenging assumptions and judgements made in the forecasts, and

assessing them for reasonableness. In particular, we considered the available cash

resources relative to the forecast expenditure which was assessed against the prior

year for reasonableness; and

• evaluating the Directors’ method of assessing the going concern in light of market

volatility caused by the current macroeconomic uncertainties.

Based on the work we have performed, we have not identiﬁed any material

uncertainties relating to events or conditions that, individually or collectively, may cast

signiﬁcant doubt on the Company’s ability to continue as a going concern for a period

of at least 12 months from when the ﬁnancial statements are authorised for issue.

In relation to the Company’s reporting on how it has applied the UK Corporate

Governance Code, we have nothing material to add or draw attention to in relation

to the Directors’ statement in the ﬁnancial statements about whether the Directors

considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going

concern are described in the relevant sections of this report.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 80

Independent auditor’s report continued

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Overview

2022 2021

Key audit matters

Valuation of unquoted

investments

 

Materiality Company ﬁnancial statements as a whole

£21,200,000 (2021: £23,900,000) based on 2% (2021: 2%)

of adjusted net assets. Adjusted net assets is the net asset

value adjusted for the cash that has been recently raised

from funding during the year, where applicable.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most

signiﬁcance in our audit of the ﬁnancial statements of the current period and include

the most signiﬁcant assessed risks of material misstatement (whether or not due to

fraud) that we identiﬁed, including those which had the greatest eect on: the overall

audit strategy, the allocation of resources in the audit, and directing the eorts of the

engagement team. These matters were addressed in the context of our audit of the

ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not

provide a separate opinion on these matters.

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its

environment, including the Company’s system of internal control, and assessing the

risks of material misstatement in the ﬁnancial statements. We also addressed the

risk of management override of internal controls, including assessing whether there

was evidence of bias by the Directors that may have represented a risk of material

misstatement.

Key audit matter How the scope of our audit addressed the key audit matter

Valuation

of unquoted

investments

(Notes 10 and 12

to the ﬁnancial

statements)

We consider the valuation of

investments to be the most

signiﬁcant audit area as there

is a high level of estimation

uncertainty involved in

determining the unquoted

investment valuations.

There is also an inherent risk of

management override arising

from the unquoted investment

valuations being prepared by

the Portfolio Manager, who

is remunerated based on the

value of the net assets of the

fund, as shown in note 3.

Our sample for the testing of unquoted investments was stratiﬁed according to risk considering, inter alia, the value of

individual investments, the nature of the investment, the extent of the fair value movement and the subjectivity of the

valuation technique.

For all Investments in our sample we:

Challenged whether the valuation methodology was the most appropriate in the circumstances under the International

Private Equity and Venture Capital Valuation (IPEV) Guidelines and the applicable accounting standards. We have

recalculated the value attributable to the Company, having regard to the application of enterprise value across the capital

structures of the portfolio companies.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 81

Independent auditor’s report continued



Key audit matter continued How the scope of our audit addressed the key audit matter continued

Valuation

of unquoted

investments

(Notes 10 and 12

to the ﬁnancial

statements)

continued

For these reasons we

considered the valuation of

unquoted investments to be

a key audit matter.

For investments sampled that were valued using less subjective valuation techniques (price of recent investment and

calibration to price of recent investment reviewed for changes in fair value) we:

• veriﬁed the cost or price of recent investment to supporting documentation;

• considered whether the investment was an arm’s length transaction through reviewing the parties involved in the

transaction and checking whether or not they were already investors of the portfolio company;

• considered whether there were any indications that the cost or price of recent investment was no longer representative of

fair value considering, inter alia, the current performance of the portfolio company and the milestones and assumptions

set out in the investment proposal; and

• considered whether the price of recent investment is supported by alternative valuation techniques.

For investments sampled that were valued using more subjective techniques (revenue multiples and calibration to revenue

multiple) we:

• challenged and corroborated the inputs to the valuation with reference to management information of portfolio

companies, market data and our own understanding and assessed the impact of the estimation uncertainty concerning

these assumptions and the disclosure of these uncertainties in the ﬁnancial statements;

• reviewed the historical ﬁnancial statements and any recent management information available to support assumptions

about maintainable revenues used in the valuations;

• considered the revenue multiples applied and the discounts applied by reference to observable listed company market

data; and

• challenged the consistency and appropriateness of adjustments made to such market data in establishing the revenue

multiple applied in arriving at the valuations adopted by considering the individual performance of portfolio companies

against plan and relative to the peer group, the market and sector in which the portfolio company operates and other

factors as appropriate.

Where appropriate, we performed a sensitivity analysis by developing our own point estimate where we considered that

alternative input assumptions could reasonably have been applied and we considered the overall impact of such sensitivities

on the portfolio of investments in determining whether the valuations as a whole are reasonable and free from bias.

Key observations

Based on the procedures performed we consider the investment valuations to be appropriate considering the level of

estimation uncertainty.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 82

Independent auditor’s report continued

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Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the eect of misstatements. We consider materiality to be the magnitude by

which misstatements, including omissions, could inﬂuence the economic decisions of reasonable users that are taken on the basis of the ﬁnancial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine

the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identiﬁed

misstatements, and the particular circumstances of their occurrence, when evaluating their eect on the ﬁnancial statements as a whole.

Based on our professional judgement, we determined materiality for the ﬁnancial statements as a whole and performance materiality as follows:

Company ﬁnancial statements

2022

£m

2021

£m

Materiality £21,200,000

£23,900,000

Basis for determining materiality 2% of adjusted net assets

2% of adjusted net assets

Rationale for the benchmark applied

In setting materiality, we have had regard to the nature and disposition of the investment portfolio. Given that

the VCT’s portfolio is comprised of unquoted investments which would typically have a wider spread of reasonable

alternative possible valuations, we have applied a percentage of 2% of adjusted net assets. The benchmark

used is lower than the net asset value to take into account cash that has been recently raised from fund raising,

where applicable.

Performance materiality

£15,900,000

£17,900,000

Basis for determining performance materiality

75% of materiality

Rationale for the percentage applied for

performance materiality

The level of performance materiality applied was set after having considered a number of factors including the

expected total value of known and likely misstatements and the level of transactions in the year.

Lower testing threshold

While the majority of long-term returns are expected to arise from capital, we note that ongoing costs and revenue returns are still important to users of the ﬁnancial statements,

despite being considerably smaller in magnitude. As a result, we determined a lower testing threshold for those items impacting revenue return of £2,200,000 (2021: £9,130,000)

based on 10% of expenditure (2021: 10% of expenditure).

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit dierences in excess of £1,100,000 (2021: £1,300,000). We also agreed to report dierences

below this threshold that, in our view, warranted reporting on qualitative grounds.

Strategic report Governance Financials

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Independent auditor’s report continued

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Other information

The Directors are responsible for the other information. The other information

comprises the information included in the annual report other than the ﬁnancial

statements and our auditor’s report thereon. Our opinion on the ﬁnancial statements

does not cover the other information and, except to the extent otherwise explicitly

stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether

the other information is materially inconsistent with the ﬁnancial statements or

our knowledge obtained in the course of the audit, or otherwise appears to be

materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this gives rise to a material

misstatement in the ﬁnancial statements themselves. If, based on the work we

have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact.

We have nothing to report in this regard.

Corporate governance statement

The Listing Rules require us to review the Directors’ statement in relation to going

concern, longer-term viability and that part of the Corporate Governance Statement

relating to the Company’s compliance with the provisions of the UK Corporate

Governance Code speciﬁed for our review.

Based on the work undertaken as part of our audit, we have concluded that each of

the following elements of the Corporate Governance Statement is materially consistent

with the ﬁnancial statements or our knowledge obtained during the audit.

Going concern and

longer-term viability

• The Directors’ statement with regards to the

appropriateness of adopting the going concern basis of

accounting and any material uncertainties identiﬁed set

out on page 59; and

• The Directors’ explanation as to their assessment of the

Company’s prospects, the period this assessment covers

and why the period is appropriate set out on page 59.

Other Code provisions

• Directors’ statement on fair, balanced and

understandable set out on Page 75;

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

assessment of the emerging and principal risks set out

on page 50;

• The section of the annual report that describes the

review of eectiveness of risk management and internal

control systems set out on page 66; and

• The section describing the work of the Audit Committee

set out on page 64.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the

course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to

report on certain opinions and matters as described below.

Strategic report

and Directors’ report

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

of the audit:

• the information given in the Strategic report and the

Directors’ report for the ﬁnancial year for which the

ﬁnancial statements are prepared is consistent with the

ﬁnancial statements; and

• the Strategic report and the Directors’ report have

been prepared in accordance with applicable legal

requirements.

In the light of the knowledge and understanding of the

Company and its environment obtained in the course of the

audit, we have not identiﬁed material misstatements in the

Strategic report or the Directors’ report.

Directors’

remuneration

In our opinion, the part of the Directors’ remuneration

report to be audited has been properly prepared in

accordance with the Companies Act 2006.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 84

Independent auditor’s report continued

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Other Companies Act 2006 reporting continued

Matters on which we

are required to report

by exception

We have nothing to report in respect of the following

matters in relation to which the Companies Act 2006

requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or

returns adequate for our audit have not been received

from branches not visited by us; or

• the ﬁnancial statements and the part of the Directors’

remuneration report to be audited are not in agreement

with the accounting records and returns; or

• certain disclosures of Directors’ remuneration speciﬁed

by law are not made; or

• we have not received all the information and

explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement, the Directors are

responsible for the preparation of the ﬁnancial statements and for being satisﬁed that

they give a true and fair view, and for such internal control as the Directors determine is

necessary to enable the preparation of ﬁnancial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the ﬁnancial statements, the Directors are responsible for assessing the

Company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of accounting unless the

Directors either intend to liquidate the Company or to cease operations, or have no

realistic alternative but to do so.

Auditor’s responsibilities for the audit of the ﬁnancial statements

Our objectives are to obtain reasonable assurance about whether the ﬁnancial

statements as a whole are free from material misstatement, whether due to fraud or

error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is

a high level of assurance, but is not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to inﬂuence the economic decisions

of users taken on the basis of these ﬁnancial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

We gained an understanding of the Company and the industry in which it operates

and held discussions with the Portfolio Manager and those charged with governance in

order to obtain an understanding of the Company’s policies and procedures regarding

compliance with laws and regulations. We have therefore considered the signiﬁcant

laws and regulations to be the Companies Act 2006, the FCA listing and DTR rules,

the principles of the UK Corporate Governance Code, industry practice represented

by the Statement of Recommended Practice: Financial Statements of Investment

Trust Companies and Venture Capital Trusts (‘the SORP’) and updated in 2022 with

consequential amendments and the applicable ﬁnancial reporting framework. We also

considered the Company’s qualiﬁcation as a VCT under UK tax legislation.

Our procedures in respect of the above included:

• obtaining an understanding of the control environment in monitoring compliance

with laws and regulations;

• agreement of the ﬁnancial statement disclosures to underlying supporting

documentation;

• enquiries of the Portfolio Manager and those charged with governance relating

to the existence of any non-compliance with laws and regulations;

• obtaining the VCT compliance reports prepared by management’s expert during the

year and as at year end and reviewing their calculations to check that the Company

was meeting its requirements to retain VCT status; and

• reviewing minutes of meeting of those charged with governance for the period for

instances of non-compliance with laws and regulations.

Strategic report Governance Financials

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Independent auditor’s report continued

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Auditor’s responsibilities for the audit of the ﬁnancial statements continued

Fraud

We assessed the susceptibility of the ﬁnancial statement to material misstatement

including fraud.

Our risk assessment procedures included:

• enquiry with the Portfolio Manager and those charged with governance regarding

any known or suspected instances of fraud;

• review of minutes of meeting of those charged with governance for any known or

suspected instances of fraud;

• discussion amongst the engagement team as to how and where fraud might occur

in the ﬁnancial statements; and

• considering management fees and performance targets and the related ﬁnancial

statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be

the valuation of unquoted investments and management override of controls.

Our procedures in respect of the above included:

• the procedures set out in the Key Audit Matters section above;

• obtaining independent evidence to support the ownership of a sample of

investments;

• recalculating investment management fees in total;

• obtaining independent conﬁrmation of bank balances; and

• tested journals posted in preparation of the ﬁnancial statements and evaluating

whether there was evidence of bias by the Portfolio Manager and Directors that

represented a risk of material misstatement due to fraud.

We also communicated relevant identiﬁed laws and regulations and potential fraud

risks to all engagement team members who were all deemed to have appropriate

competence and capabilities and remained alert to any indications of fraud or

non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement

in the ﬁnancial statements, recognising that the risk of not detecting a material

misstatement due to fraud is higher than the risk of not detecting one resulting

from error, as fraud may involve deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are inherent limitations in the audit

procedures performed and the further removed non-compliance with laws and

regulations is from the events and transactions reﬂected in the ﬁnancial statements,

the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting

Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms

part of our auditor’s report.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with

Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken

so that we might state to the Company’s members those matters we are required

to state to them in an auditor’s report and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the

Company and the Company’s members as a body, for our audit work, for this report,

or for the opinions we have formed.

Vanessa-Jayne Bradley (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, United Kingdom

24 April 2023

BDO LLP is a limited liability partnership registered in England and Wales

(with registered number OC305127).

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 86

Year to 31 December 2022 Year to 31 December 2021

Notes

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Gain on disposal of ﬁxed asset investments 10

— 66 66

— 76,520 76,520

(Loss)/gain on valuation of ﬁxed asset investments 10

— (284,465) (284,465)

— 232,864 232,864

Loss on valuation of current asset investments

— (12,682) (12,682)

— (1,475) (1,475)

Investment income 2

864 — 864

500 — 500

Investment management fee 3

(1,125) (21,383) (22,508)

(1,033) (19,635) (20,668)

Performance fee 3

— — —

— (63,943) (63,943)

Other expenses 4

(7,060) — (7,060)

(7,295) — (7,295)

Foreign exchange translation

— 6,570 6,570

— 54 54

(Loss)/proﬁt before tax (7,321) (311,894) (319,215)

(7,828) 224,385 216,557

Tax 6

— — —

(Loss)/proﬁt after tax (7,321) (311,894) (319,215)

(7,828) 224,385 216,557

(Loss)/earnings per share – basic and diluted

(0.6)p (24.0)p (24.6)p

(0.7)p 20.0p 19.3p

• The ‘Total’ column of this statement is the proﬁt and loss account of Titan; the supplementary revenue return and capital return columns have been prepared under guidance

published by the Association of Investment Companies.

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

• Titan has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.

Titan has no other comprehensive income for the period.

The accompanying notes form an integral part of the ﬁnancial statements.

Income statement

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 87

Balance sheet

As at 31 December 2022 As at 31 December 2021

Notes £’000 £’000 £’000 £’000

Fixed asset investments 10

827,449

1,005,353

Current assets:

Money market funds 12

58,701

88,126

Corporate bonds 12

104,244

110,247

Applications cash

23,299

2,630

Cash at bank

16,120

182,514

Debtors 11

47,374

53,443

249,738

436,960

Current liabilities 13

(25,427)

(69,272)

Net current assets

224,311

367,688

Net assets 1,051,760

1,373,041

Share capital 14

1,368

129,850

Share premium

92,896

201,163

Capital redemption reserve

9,759

Special distributable reserve

887,288

642,873

Capital reserve realised

(53,430)

(14,122)

Capital reserve unrealised

160,634

439,790

Revenue reserve

(37,023)

(36,272)

Total equity shareholders’ funds 1,051,760

1,373,041

NAV per share

76.9p

105.7p

1. Funds raised from investors since Titan opened for new investment which have not been allotted as at year end.

The accompanying notes form an integral part of the ﬁnancial statements.

The statements were approved by the Directors and authorised for issue on 24 April 2023 and are signed on their behalf by:

Tom Leader

Chair

Company Number 06397765

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 88

Share capital

£’000

Share premium

£’000

Capital

redemption

reserve

£’000

Special

distributable

reserve

£’000

Capital reserve

realised

£’000

Capital reserve

unrealised

£’000

Revenue

reserve

£’000

Total

£’000

As at 1 January 2021 107,502 564,308 6,377 150,007 (66,167) 309,706 (28,498) 1,043,235

Comprehensive income for the year:

Management fees allocated as capital expenditure — — — — (19,635) — — (19,635)

Current year gain on disposal of ﬁxed asset investments — — — — 76,520 — — 76,520

Gain on fair value of ﬁxed asset investments — — — — — 232,864 — 232,864

Gain on fair value of current asset investments — — — — — (1,475) — (1,475)

Loss after tax — — — — — — (7,828) (7,828)

Foreign exchange translation — — — — — — 54 54

Performance fee — — — — (63,943) — — (63,943)

Total comprehensive income for the year — — — — (7,058) 231,389 (7,774) 216,557

Contributions by and distributions to owners:

Share issue (includes DRIS) 25,730 264,963 — — — — — 290,693

Share issue costs — (6,956) — — — — — (6,956)

Repurchase of own shares (3,382) — 3,382 (34,519) — — — (34,519)

Dividends paid (includes DRIS) — — — (93,767) (42,202) — — (135,969)

Total contributions by and distributions to owners 22,348 258,007 3,382 (128,286) (42,202) — — 113,249

Other movements:

Share premium cancellation — (621,152) — 621,152 — — — —

Prior year ﬁxed asset gains now realised — — — — 101,305 (101,305) — —

Total other movements — (621,152) — 621,152 101,305 (101,305) — —

Balance as at 31 December 2021 129,850 201,163 9,759 642,873 (14,122) 439,790 (36,272) 1,373,041

1. Reserves are available for distribution, subject to the restrictions tabled in Note 15 of the ﬁnancial statements.

The accompanying notes form an integral part of the ﬁnancial statements.

Statement of changes in equity

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 89

Statement of changes in equity continued

Share capital

£’000

Share premium

£’000

Capital

redemption

reserve

£’000

Special

distributable

reserve

£’000

Capital reserve

realised

£’000

Capital reserve

unrealised

£’000

Revenue

reserve

£’000

Total

£’000

As at 1 January 2022 129,850 201,163 9,759 642,873 (14,122) 439,790 (36,272) 1,373,041

Comprehensive income for the year:

Management fees allocated as capital expenditure — — — — (21,383) — — (21,383)

Current year gain on disposal of ﬁxed asset investments — — — — 66 — — 66

Loss on fair value of ﬁxed asset investments — — — — — (284,465) — (284,465)

Loss on fair value of current asset investments — — — — — (12,682) — (12,682)

Loss after tax — — — — — — (7,321) (7,321)

Foreign exchange translation — — — — — — 6,570 6,570

Total comprehensive income for the year — — — — (21,317) (297,147) (751) (319,215)

Contributions by and distributions to owners:

Share issue (includes DRIS) 1,299 106,307 — — — — — 107,606

Share issue costs — (2,260) — — — — — (2,260)

Repurchase of own shares (1,864) — 1,864 (41,192) — — — (41,192)

Dividends paid (includes DRIS) — — — (66,220) — — — (66,220)

Total contributions by and distributions to owners (565) 104,047 1,864 (107,412) — — — (2,066)

Other movements:

Share premium cancellation

—

(212,314) (11,596) 223,910 — — — —

Reduction in the nominal value of share capital (127,9 17 ) — — 127,917 — — — —

Prior year ﬁxed asset gains now realised — — — — 9,575 (9,575) — —

Transfer between reserves — — — — (27,566) 27,566 — —

Total other movements (127,917) (212,314) (11,596) 351,827 (17,9 91) 17,991 — —

Balance as at 31 December 2022 1,368 92,896 27 887,288 (53,430) 160,634 (37,023) 1,051,760

1. Reserves are available for distribution, subject to the restrictions tabled in Note 15 of the ﬁnancial statements.

The accompanying notes form an integral part of the ﬁnancial statements.

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Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 90

Notes

Year to 31 December

2022

£’000

Year to 31 December

2021

£’000

Reconciliation of proﬁt to cash ﬂows from operating activities

(Loss)/proﬁt before tax

(319,215)

216,557

Increase in debtors

(5,666)

(28)

(Decrease)/increase in creditors 13

(64,514)

46,600

Loss on valuation of current asset investments 12

12,682

1,475

Gain on disposal of ﬁxed asset investments

(66)

(76,520)

Loss/(gain) on valuation of ﬁxed asset investments 10

284,465

(232,864)

Outﬂow from operating activities (92,314)

(44,780)

Cash ﬂows from investing activities

Purchase of current asset investments

(6,679)

(21,840)

Purchase of ﬁxed asset investments 10

(156,973)

(142,831)

Proceeds from sale of ﬁxed asset investments 10

62,213

220,324

(Outﬂow)/inﬂow from investing activities (101,439)

55,653

Cash ﬂows from ﬁnancing activities

Movement in applications account 13

20,669

(983)

Dividends paid (net of DRIS)

(49,596)

(101,976)

Purchase of own shares 14

(41,192)

(34,519)

Share issues

90,982

256,700

Share issue costs

(2,260)

(6,956)

Inﬂow from ﬁnancing activities 18,603

112,266

(Decrease)/increase in cash and cash equivalents (175,150)

123,139

Opening cash and cash equivalents

273,270

150,131

Closing cash and cash equivalents 98,120

273,270

Cash and cash equivalents comprise

Cash at bank

16,120

182,514

Applications cash 13

23,299

2,630

Money market funds 12

58,701

88,126

Closing cash and cash equivalents 98,120 273,270

The accompanying notes form an integral part of the ﬁnancial statements.



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1. Principal accounting policies

Titan is a Public Limited Company (plc) incorporated in England and Wales and its

registered oce is at 6th Floor, 33 Holborn, London EC1N 2HT.

Titan has been approved as a Venture Capital Trust by HMRC under Section 259 of the

Income Taxes Act 2007. The shares of Titan were ﬁrst admitted to the Ocial List of the

UK Listing Authority and trading on the London Stock Exchange on 28 December 2007

and can be found under the TIDM code OTV2. Titan is premium listed.

The principal activity of Titan is to invest in a diversiﬁed portfolio of UK smaller

companies in order to generate capital growth over the long term as well as an

attractive tax-free dividend stream.

The ﬁnancial statements are presented in sterling (£) to the nearest £’000. The

functional currency is also sterling (£).

Basis of preparation

The ﬁnancial statements have been prepared on a going concern basis under the

historical cost convention, except for the measurement at fair value of certain ﬁnancial

instruments, and in accordance with UK Generally Accepted Accounting Practice

(GAAP), including Financial Reporting Standard 102 – ‘The Financial Reporting Standard

applicable in the United Kingdom and Republic of Ireland’ (FRS 102), and with the

Companies Act 2006 and the Statement of Recommended Practice (SORP) ‘Financial

Statements of Investment Trust Companies and Venture Capital Trusts (July 2022)’.

The principal accounting policies have remained unchanged from those set out in

Titan’s 2021 annual report and ﬁnancial statements. A summary of the principal

accounting policies is set out in the notes.

Titan presents its Income Statement in a tri-columnar format to give shareholders

additional detail of the performance of Titan, split between items of a revenue or

capital nature as required by the SORP.

The preparation of the ﬁnancial statements requires management to make

judgements and estimates that aect the application of policies and reported

amounts of assets, liabilities, income and expenses. Estimates and assumptions

mainly relate to the fair valuation of the ﬁxed asset investments, particularly unquoted

investments. Estimates are based on historical experience and other assumptions

that are considered reasonable under the circumstances. The estimates and the

assumptions are under continuous review with particular attention paid to the carrying

value of the investments.

Capital valuation policies are those that are most important to the manifestation of

Titan’s ﬁnancial position and that require the application of subjective and complex

judgements, often as a result of the need to make estimates about the eects of

matters that are inherently uncertain and may change in subsequent periods. The

critical accounting policies that are declared will not necessarily result in material

changes to the ﬁnancial statements in any given period but rather contain a potential

for material change. The main accounting and valuation policies used by Titan are

disclosed in the notes below. Whilst not all of the signiﬁcant accounting policies require

subjective or complex judgements, Titan considers that the following accounting

policies should be considered critical.

Titan has designated all ﬁxed asset investments as being held at fair value through

proﬁt or loss; therefore all gains and losses arising from investments held are taken

to the Income Statement in the period in which they occur. Accordingly, all interest

income, fee income, expenses and investment gains and losses are attributable to

assets designated as being at fair value through proﬁt or loss. Corporate bonds (part

of current asset investments) are held at fair value through proﬁt or loss.

Investments are regularly reviewed to ensure that the fair values are appropriately

stated. Quoted investments are valued in accordance with the bid-price on the

relevant date, unquoted investments are valued in accordance with current IPEV

valuation guidelines, although this does rely on subjective estimates such as

appropriate sector earnings or revenue-based multiples, forecast results of portfolio

companies, asset values of subsidiary companies and liquidity or marketability of the

investments held.

Although Titan believes that the assumptions concerning the business environment

and estimates of future cash ﬂows are appropriate, changes in estimates and

assumptions could require changes in the stated values. This could lead to additional

changes in fair value in the future.

Revenue and capital

The revenue column of the Income Statement includes revenue income and revenue

expenses. The capital column includes changes in fair value of investments, as well

as gains and losses on disposal and any capital dividends received. Gains and losses

arising from changes in fair value of investments are recognised as part of the capital

return within the Income Statement. Investment management fees are split between

revenue (5%) and capital (95%) in the same way that the income streams are derived.

Strategic report Governance Financials

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1. Principal accounting policies continued

Cash and cash equivalents

Cash and cash equivalents comprises cash at bank and other highly liquid short-

term investments with a maturity of three months or less at the date of acquisition.

The carrying amount approximates fair value.

Financing strategy and capital structure

Capital management is monitored and controlled by forecasting income and

expenditure over both the short and medium term to enable investments to be made

whilst maintaining short-term liquidity. The investments being managed include equity

and ﬁxed-interest investments, and short-term liquidity comprises cash and cash

equivalents including debtors and creditors.

We deﬁne capital as shareholders’ funds and our ﬁnancial strategy in the medium term

is to manage a level of cash that balances the risks of the business with optimising the

return on equity. Titan currently has no borrowings nor does it anticipate that it will

have any borrowing facilities in the future to fund the acquisition of investments.

Titan does not have any externally imposed capital requirements.

The value of the managed capital is indicated in Note 15. The Board considers the

distributable reserves and the total return for the period when recommending a

dividend. In addition, the Board is authorised to make market purchases up to a

maximum of 14.99% of the issued Ordinary share capital of Titan in accordance with

Special Resolution 11 in order to maintain sucient liquidity in the VCT.

Financial instruments

Titan’s principal ﬁnancial assets are its investments and the policies in relation to

those assets are set out in Note 10. Financial liabilities and equity instruments are

classiﬁed according to the substance of the contractual arrangements entered into.

An equity instrument is any contract that evidences a residual interest in the assets of

the entity after deducting all of its ﬁnancial liabilities. Where the contractual terms of

share capital do not have any terms meeting the deﬁnition of a ﬁnancial liability then

this is classed as an equity instrument. Dividends and distributions relating to equity

instruments are debited directly to equity.

Judgements in applying accounting policies and key sources of

estimation uncertainty

This is addressed in Note 10.

Reserves

Share capital – represents the nominal value of shares that have been issued.

Share premium – includes any premium received on issue of share capital. Any

transaction costs directly associated with the issuing of shares are deducted from

share premium.

Special distributable reserve – includes realised proﬁts and cancelled share premium

available for distribution, subject to compliance with VCT rules.

Capital redemption reserve – represents the nominal value of shares bought back

from shareholders and cancelled.

Capital reserve realised – arises when an investment is sold. Any balance held on the

capital reserve unrealised is transferred to the capital reserve realised, as a movement

in reserves.

Capital reserve unrealised – arises when Titan revalues the investments held at

the end of the period. Any gains or losses arising are credited/charged to the capital

reserve unrealised.

Revenue reserve – revenue proﬁts and losses are credited and charged to this account.

Subsidiaries

Zenith Holding Company is a wholly-owned subsidiary of Titan, but owing to the

exemption permitted under FRS 102 to not have to consolidate investment companies

held as part of an investment portfolio (Section 9 of FRS 102, paragraphs 9.9(b) and

9.9B), Titan has not consolidated the assets and liabilities of Zenith Holding Company.

Zenith Holding Company made a proﬁt of £10,513 during the period (2021: (11,158,934))

and its aggregate capital and reserves during the period amounted to £11,372,628

(2021: 11,383,141).

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2. Investment income

Accounting policy

Investment income includes interest earned on money market funds.

Dividend income is shown net of any related tax credit.

Dividends receivable are brought into account when Titan’s right to receive

payment is established and there is no reasonable doubt that payment

will be received. Fixed returns on debt and money market funds are

recognised so as to reﬂect the eective interest rate, provided there is no

reasonable doubt that payment will be received in due course.

Disclosure

Year to

31 December

2022

£’000

Year to

31 December

2021

£’000

Money market funds

577

Loan note interest receivable

287

497

Total investment income 864

500

3. Investment management fees

Accounting policy

For the purposes of the revenue and capital columns in the Income

Statement, the management fee has been allocated 5% to revenue and 95%

to capital, in line with the Board’s expected long-term return in the form of

income and capital gains respectively from Titan’s investment portfolio.

Disclosure

Year to 31 December 2022 Year to 31 December 2021

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Investment

management fee 1,125 21,383 22,508 1,033 19,635 20,668

Performance fee — — — — 63,943 63,943

Total 1,125 21,383 22,508 1,033 83,578 84,611

The performance fee has been wholly attributed to capital. For more details please

refer to Note 19.

The Portfolio Manager provides investment management services through agreements

with Octopus AIF Management Limited and Titan. It also provides non-investment

services to Titan under a non-investment services agreement. No compensation is

payable if the agreement is terminated by either party, if the required notice period is

given. The fee payable, should insucient notice be given, will be equal to the fee that

would have been paid should continuous service be provided, or the required notice

period was given. The basis upon which the management fee is calculated is disclosed

within Note 19 of the ﬁnancial statements.

4. Other expenses

Accounting policy

Other expenses are accounted for on an accruals basis and are charged

wholly to revenue.

The transaction costs incurred when purchasing or selling assets are

written o to the Income Statement in the period that they occur.

Year to

31 December

2022

£’000

Year to

31 December

2021

£’000

Ongoing adviser charges and trail commission

3,085

3,202

Accounting and administration services

1,893

1,723

Impairment of accrued loan note interest receivable 373 572

Listing fees

236

447

Depositary fees

336

278

Registrar’s fees

149

188

Directors’ remuneration

190

179

D&O insurance

117

143

Audit fees

144

104

Other fees

537

459

Total

7,060

7,295

1. Includes employers’ NI.

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4. Other expenses continued

Total ongoing charges are capped at 2.5% of net assets. For the year to

31 December 2022 the ongoing charges were 2.2% of net assets (2021: 2.0%). This is

calculated by summing the expenses incurred in the period (excluding ongoing IFA

charges and non-recurring expenses) divided by the average NAV throughout the period.

5. Directors’ remuneration

Total Directors’ fees paid during the year were £171,000 (2021: £167,000). Employers’

National Insurance contributions paid during the year were £19,000 (2021: £12,000).

The highest paid Director received £42,000 (2021: £40,000). None of the Directors

received any other remuneration or beneﬁt from Titan during the period. Titan has no

employees other than Non-Executive Directors. The average number of Non-Executive

Directors in the period was ﬁve (2021: six).

6. Tax on ordinary activities

Accounting policy

Corporation tax payable is applied to proﬁts chargeable to corporation

tax, if any, at the current rate. The tax eect of dierent items of income/

gain and expenditure/loss is allocated between capital and revenue return

on the ‘marginal’ basis as recommended in the SORP.

Deferred tax is recognised in respect of all timing dierences at the

reporting date. Timing dierences are dierences between taxable proﬁts

and total income as stated in the ﬁnancial statements that arise from the

inclusion of income and expenses in tax assessments in periods dierent

from those in which they are recognised in ﬁnancial statements.

Disclosure

The corporation tax charge for the period was £nil (2021: £nil).

Year to

31 December

2022

£’000

Year to

31 December

2021

£’000

(Loss)/Proﬁt on ordinary activities before tax

(319,215)

216,557

Current tax at 19% (2021: 19%)

(60,568)

41,146

Eects of:

Non-taxable income

—

(11)

Non-taxable capital loss/(gain)

56,368

(58,503)

Non-deductible expenses

Zenith Holding Company distribution

—

4,750

Excess management expenses on which deferred

tax not recognised 5,450 16,540

Tax rate dierences

(1,314)

(3,969)

Total current tax charge —

—

1. In 2021, £25 million was distributed from Zenith Holding Company to Titan following the sale of Calastone,

which is taxable income for Titan.

2. Tax rate dierence due to tax charge for the year being calculated at 19% and excess management

expenses on which deferred tax is not recognised being calculated at 25%.

Unrelieved tax losses of £186,669,000 (2021: £164,870,000) are estimated to be

carried forward at 31 December 2022 (subject to completion of Titan’s tax return)

and are available for oset against future taxable income, subject to agreement

with HMRC. Titan has not recognised the deferred tax asset of £46,667,000 (2021:

£41,218,000) in respect of these tax losses because there is insucient forecast taxable

income in excess of deductible expenses to utilise these losses carried forward. There is

no expiry period on these deductible expenses under the UK HMRC legislation.

Approved VCTs are exempt from tax on capital gains. As the Directors intend for

Titan to continue to maintain its approval as a VCT through its aairs, no current

deferred tax has been recognised in respect of any capital gains or losses arising on

the revaluation or disposal of investment.

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7. Dividends

Accounting policy

Dividends payable are recognised as distributions in the ﬁnancial

statements when Titan’s liability to make the payment has been

established. This liability is established on the record date, the date on

which those shareholders on the share register are entitled to the dividend.

Disclosure

Year to

31 December

2022

£’000

Year to

31 December

2021

£’000

Dividends paid in the year

Previous year’s second interim dividend – 3.0p

(2021: 3.0p) 38,700 33,629

Current period’s interim dividend – 2.0p

(2021: 8.0p) 27,520 102,340

66,220

135,969

Dividends in respect of the year

Interim dividend paid – 2.0p (2021: 8.0p)

27,520

102,340

Second interim dividend – 3.0p (2021: 3.0p)

41,038

38,955

68,558

141,295

The ﬁgures above include dividends elected to be reinvested through the DRIS.

The second interim dividend of 3.0p for the period ending 31 December 2022 will be

paid on 24 May 2023 to shareholders on the register on 5 May 2023.

8. Earnings per share

Year to 31 December 2022 Year to 31 December 2021

Revenue Capital Total Revenue Capital Total

(Loss)/proﬁt attributable

to Ordinary shareholders

(£’000) (7,321)

(311,894)

(319,215) (7,828) 224,385 216,557

(Loss)/proﬁt per

Ordinary share (p) (0.6)p (24.0)p (24.6)p (0.7)p 20.0p 19.3p

The total earnings per share is based on 1,297,081,006 (2021: 1,122,053,322) Ordinary

shares, being the weighted average number of Ordinary shares in issue during

the period.

There are no potentially dilutive capital instruments in issue and so no diluted

return per share ﬁgures are relevant. The basic and diluted earnings per share are

therefore identical.

9. Net asset value per share

31 December

2022

31 December

2021

Net assets (£)

1,051,760,000

1,373,040,000

Ordinary shares in issue

1,367,949,929

1,298,498,396

NAV per share (p)

76.9

105.7

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10. Fixed asset investments

Accounting policy

Titan’s principal ﬁnancial assets are its ﬁxed asset investments and the policies in relation to those assets are set out below. Purchases and sales of investments are

recognised in the ﬁnancial statements at the date of the transaction (trade date).

These investments are managed and their performance evaluated on a fair value basis in accordance with a documented investment strategy and information about

them is provided internally on that basis to the Board. Accordingly, as permitted by FRS 102, the investments are measured as being at fair value through proﬁt or loss

(FVTPL) on the basis that they qualify as a group of assets managed, and whose performance is evaluated, on a fair value basis in accordance with a documented

investment strategy. Titan’s investments are measured at subsequent reporting dates at fair value.

In the case of unquoted investments, fair value is established by using measures of value such as price of recent transaction, earnings or revenue-based multiples,

discounted cash ﬂows and net assets. This is consistent with IPEV capital valuation guidelines. Where price of recent transaction is used, the valuation is calibrated to

a valid methodology.

Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the Income Statement and allocated to the

capital reserve unrealised. Fixed returns on non-equity shares and debt securities which are held at fair value are computed using the eective interest rate, to

distinguish between the interest income receivable (which is disclosed as interest income within the revenue column of the Income Statement) and other fair value

movements arising on these instruments (which are disclosed as holding gains within the capital column of the Income Statement).

Investments deemed to be associates due to the shareholding and level of inﬂuence exerted over the portfolio company are measured at fair value using a consistent

methodology to the rest of Titan’s portfolio as permitted by FRS 102 and highlighted in the SORP (paragraph 32).

In preparation of the valuations of assets the Directors are required to make judgements and estimates that are reasonable and incorporate their knowledge of the

performance of the portfolio companies.

Fair value hierarchy

Paragraph 34.22 of FRS 102 recognises a hierarchy of fair value measurements, for ﬁnancial instruments measured at fair value in the balance sheet, which gives the highest

priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). This methodology is

adopted by Titan and requires disclosure of ﬁnancial instruments to be dependent on the lowest signiﬁcant applicable input, as laid out below:

Level 1: The unadjusted, fully accessible and current quoted price in an active market for identical assets or liabilities that an entity can access at the measurement date.

Titan’s quoted investments are included in Level 1.

Level 2: Inputs for similar assets or liabilities other than the quoted prices included in Level 1 that are directly or indirectly observable, which exist for the duration of the period

of investment. Titan holds no such investments in the current or prior year.

Level 3: This is where inputs are unobservable, where no active market is available and recent transactions for identical instruments do not provide a good estimate of fair value

for the asset or liability. Titan’s unquoted investments are included in Level 3 in the current and prior year.

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10. Fixed asset investments continued

Fair value hierarchy continued

There has been one transfer between these classiﬁcations in the year (2021: one).

The change in fair value of Titan’s investments for the current and previous year has

been recognised through the Income Statement.

All items held at fair value through proﬁt or loss were designated as such upon initial

recognition. Movements in investments at fair value through proﬁt or loss during the

year to 31 December 2022 are summarised below and in Note 12.

The most critical estimates, assumptions and judgements relate to the determination

of the carrying value of investments at ‘fair value through proﬁt and loss’ (FVTPL).

All investments held by Titan are classiﬁed as FVTPL and measured in accordance with

the International Private Equity and Venture Capital Valuation (IPEV) guidelines, as

updated in December 2018 (and as updated by Special Valuation guidance issued in

March 2020). For investments actively traded on organised ﬁnancial markets, fair value

is generally determined by reference to Stock Exchange market quoted bid prices at the

close of business on the balance sheet date.

Unquoted investments are stated at fair value by the Directors at each measurement

date in accordance with appropriate valuation techniques, which are consistent with

the IPEV guidelines:

(i) the price of a recent investment (PRI), if resulting from an orderly transaction, is

assumed to represent fair value as of the transaction date. At every subsequent

measurement date, the PRI may remain an appropriate indicator of fair value,

however as its validity is eroded over time, adequate consideration will be given to

the current facts and circumstances, including, but not limited to, changes in the

market or changes in the performance of the portfolio company. We may solely rely

on PRI for certain investments where other valuation methodologies may not be

possible, notably where there are no current or short-term future revenues expected;

(ii) where a recent transaction is not deemed to be representative of fair value, a

market approach may be considered. This technique involves the application of an

appropriate multiple to a performance measure (typically revenue, but potentially

also EBITDA) in order to derive the value of the business:

– appropriate multiples will usually be derived by reference to a current

market-based multiple, as reﬂected in market valuations of comparable

quoted companies or the price at which comparable companies have

changed ownership, to the extent this information is publicly available;

or calibration to the PRI validates that the valuation techniques using

contemporaneous market inputs generate fair value at the investment date

and that the same valuation techniques using updated market inputs as of

each subsequent reporting date will generate fair value at each such date.

This approach will notably help capture any risks associated with a lack of

liquidity in the minority holding of an unquoted investment and may be

further adjusted to reﬂect the trading performance of the portfolio company

versus expectations as at the investment.

(iii) premiums, to the extent that they are considered capital in nature, and that

they will be received upon repayment of loan stock investments, are accrued

at fair value when Titan receives the right to the premium and when considered

recoverable;

(iv) for investments in early or development stages, where there are no current or

short-term future revenues expected, the most appropriate valuation approach

to measure fair value may be based on calibrating the latest pricing round using

qualitative milestones. These milestones provide a directional indication of the

movement in fair value;

(v) where a number of discreet outcomes can be expected for an investment, a

simpliﬁed probability-weighted expected return model may be used to determine

fair value.

(vi) where appropriate, an income approach may be used.

Capital gains and losses on investments, whether realised or unrealised, are dealt with

in the proﬁt and loss and revaluation reserves and movements in the period are shown

in the Income Statement. All ﬁgures are shown net of any applicable transaction

costs incurred by Titan. All investments are initially recognised at transaction price

and subsequently measured at fair value. Changes in fair value are recognised in the

Income Statement.

A key judgement made in applying the above accounting policy relates to investments

that are permanently written o. Where the value of an investment has fallen

permanently below the price of recent investment, the loss is treated as a realised

loss, even though the investment is still held. The Board assesses the portfolio for

such investments and, after agreement with the Portfolio Manager, will agree the

values that represent the extent to which an investment loss has become realised.

This is based upon an assessment of objective evidence of that investment’s future

prospects, to determine whether there is potential for the investment to recover

in value.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 98

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10. Fixed asset investments continued

Disclosure

Level 1: Quoted

investments

£’000

Level 3: Unquoted

investments

£’000

Total

£’000

Valuation and net book amount:

Book cost 9,124 614,342 623,466

Cumulative revaluation 68,295 313,592 381,887

Valuation at 1 January 2022

77,419 927,93 4 1,005,353

Movement in the period:

Purchases at cost — 156,973 156,973

Disposal proceeds

(2) (50,476) (50,478)

(Loss)/gain on disposal of investments (28) 94 66

Revaluation in period (75,150) (209,315) (284,465)

Valuation at 31 December 2022 2,239

825,210 827,4 49

Book cost at 31 December 2022 8,963 730,639 739,602

Cumulative revaluation at

31 December 2022 (6,724) 94,571 87,8 47

Valuation at 31 December 2022 2,239 825,210 827,4 49

1. Consists of both cash proceeds (£45.8 million) and retention proceeds (£4.6 million) in relation to exits

made during the accounting year. Disposal proceeds presented on the cash ﬂow statement of £62.2 million

are the cash proceeds received in the year, relating to disposals during the year (£45.8 million) as well as

retentions received (£16.4 million) in relation to disposals made in prior years.

The investment portfolio is managed with capital growth as the primary focus.

The loan and equity investments are considered to be one instrument due to the legal

binding stated within the investment agreements and so they are combined in the

table shown above.

Unquoted investments in the portfolio are considered Level 3 assets, such that

their values are not directly observable but are estimated using a combination of

valuation methodologies which notably extrapolate from observable market data for

comparable assets. Further details in respect of the methods and assumptions applied

in determining the fair value of the investments are disclosed in the Portfolio Manager’s

Review. The sensitivity of these valuations to a reasonable possible change in such

assumptions is given in Note 16.

Exits

Name of

company

Area of

investment

focus

Year of

ﬁrst

investment

Total

investment

cost

£’000 Acquirer

Date

of exit

Amplience

Limited

B2B

software

Dec 2010 13,634 Farview

Content LP

Feb 2022

BehavioSec

Inc (trading as

BehavioSec)

Deep

tech

Sep 2014 4,229 LexisNexis®

Risk Solutions

Apr 2022

Streethub Limited

(trading as Trouva)

Consumer Dec 2013 10,513 Made.Com

Design Ltd

May 2022

Fluidly Limited B2B

software

Sep 2017 2,299 OakNorth

International

(UK) Limited

May 2022

Digital

Shadows Ltd

B2B

software

Sep 2017 9,702 ReliaQuest Jun 2022

Zappy Ltd

(trading as Glofox)

B2B

software

May 2019 5,090 ABC Fitness Aug 2022

Casual Speakers

Limited

(trading as Jolt)

Consumer Jun 2018 6,258 Global University

Systems

Sep 2022

Eve Sleep plc

Consumer Oct 2015 4,151 Administration Oct 2022

1. Amplience was a partial disposal and Titan still holds shares.

2. Eve Sleep was a partial disposal and Titan still holds shares.

At 31 December 2022, there were no commitments in respect of investments not yet

completed (2021: none).

Strategic report Governance Financials

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11. Debtors

31 December

2022

£’000

31 December

2021

£’000

Deferred consideration (non-current)

2,592

49,828

Deferred consideration (current)

44,364

2,840

Interest receivable on loans included in ﬁxed asset

investments 288 486

Prepayments

Other debtors

225

Total

47,374

53,443

1. Disposal proceeds on investments made during the year for which the disposal proceeds have not been received

by year end, the majority of which relates to the Wave Optics disposal which occurred in 2021. The decrease

in deferred consideration of £5.7 million since 2021 is due to deferred consideration of £16.3 million being

received during the year, oset by £4.6 million deferred consideration related to disposals in 2022 that was still

outstanding at year end and a £6.0 million foreign exchange gain.

12. Current asset investments

Accounting policy

Current asset investments comprise money market funds and corporate

bonds, which are designated as FVTPL. Gains and losses arising from changes

in fair value of investments are recognised as part of the capital return within

the Income Statement and allocated to the capital reserve unrealised.

The current asset investments are readily convertible into cash at the

option of Titan. The current asset investments are held for trading, are

actively managed and the performance is evaluated in accordance with

a documented investment strategy. Information about them is provided

internally on that basis to the Board.

Disclosure

31 December

2022

£’000

31 December

2021

£’000

Money market funds

58,701

88,126

Corporate bonds

104,244

110,247

Total

162,945

198,373

Money market funds and corporate bonds held at year end sit within Level 1 of the fair

value hierarchy for the purposes of FRS 102, as set out in Note 10.

At 31 December 2022 and 31 December 2021, there were no commitments in respect of

current asset investments approved by the Portfolio Manager but not yet completed.

13. Current liabilities

Accounting policy

Financial liabilities and equity instruments are classiﬁed according to

the substance of the contractual arrangements entered into. An equity

instrument is any contract that evidences a residual interest in the

assets of the entity after deducting all of its ﬁnancial liabilities. Where

the contractual terms of share capital do not have any terms meeting

the deﬁnition of a ﬁnancial liability then this is classed as an equity

instrument. Dividends and distributions relating to equity instruments are

debited directly to equity.

31 December

2022

£’000

31 December

2021

£’000

Accruals

2,097

2,630

Trade creditors

63,955

Applications cash

23,299

2,687

Total

25,427

69,272

1. Applications cash is cash received from investors to Titan but not yet allotted. The movement in the

applications cash creditor is reﬂected in the cash ﬂow statement as application inﬂows not yet allotted.

Included within trade creditors is an amount of £nil (2021: £63,943,000) relating to a

performance fee payable to the Portfolio Manager. For more details please refer to

Note 19.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 100

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14. Share capital

31 December

2022

£’000

31 December

2021

£’000

Allotted and fully paid up: 1,367,949,929

(2021: 1,298,498,396) Ordinary shares of 0.1p

1,368 129,850

1. As granted on 5 July 2022, there was a reduction in the nominal value of the Company’s issued share

capital from 10p per Ordinary share to 0.1p per Ordinary share.

The capital of Titan is managed in accordance with its investment policy with a view to the

achievement of its investment objective as set out on page 6. Titan is not subject to any

externally imposed capital requirements.

Capital is deﬁned as shareholders’ funds and Titan’s ﬁnancial strategy in the medium term

is to manage a level of cash that balances the risks of the business with optimising the

return on equity. Titan currently has no borrowings nor does it anticipate that it will enter

into any borrowing facilities in the future to fund the acquisition of investments.

The Board considers the distributable reserves and the total return for the year when

recommending a dividend. In addition, the Board is authorised to make market purchases

up to a maximum of 14.99% of the issued Ordinary share capital of Titan as at the date of

the AGM for the period to the next AGM in accordance with Special Resolution 11 in order to

maintain sucient liquidity in Titan’s shares.

Capital management is monitored and controlled using the internal control procedures set

out on page 68 of this report. The capital being managed includes equity and ﬁxed-interest

investments, cash balances and liquid resources including debtors and creditors.

0.1p Ordinary shares

31 December

2022

’000

31 December

2021

’000

Brought forward

1,298,498

1,075,024

Shares issued – fundraise

97,22 5

225,165

Shares issued – DRIS

17,236

32,126

Shares repurchased for cancellation

(45,010)

(33,817)

Carried forward 1,367,949

1,298,498

1. The Dividend Reinvestment Scheme (DRIS) allows shareholders to elect to receive Ordinary shares instead

of a dividend. This is explained further in the Shareholder Information and Contact Details at the back of

this report.

Each share has full voting, dividend and capital distribution rights.

During the period 114,461,503 shares were issued at an average price of 96.9p per share

(2021: 257,291,278 shares were issued at a price of 116.6p). The gross consideration

received for these shares was £108 million (£105 million net) including DRIS (2021:

£291 million gross, £284 million net).

Titan repurchased 45,009,970 Ordinary shares for cancellation at a weighted average

price of 92.9p (2021: 33,816,980 shares at a price of 102.1p) at a cost of £41 million

(2021: £35 million).

The total nominal value of the shares repurchased during the ﬁnancial year was

£1,864,442, representing 0.1% of the issued share capital at the year end (2021:

£3,381,698 representing 3.1%).

15. Reserves

When Titan revalues its investments during the year, any gains or losses arising are

credited or charged to the Income Statement. Unrealised gains/losses are then

transferred to the ‘Capital reserve unrealised’. When an investment is sold, any balance

held on the ‘Capital reserve unrealised’ is transferred to the ‘Capital reserve realised’ as

a movement in reserves.

Reserves available for potential distribution by way of a dividend are:

31 December

2022

£’000

31 December

2021

£’000

Brought forward

592,479

55,342

Movement in period

204,356

537,137

Carried forward 796,835

592,479

During the year there was a share premium cancellation amounting to £212 million

(2021: £621 million). This was carried out with the approval of shareholders for the

purposes of creating sucient distributable reserves.

The purpose of the special distributable reserve is to create a reserve which is capable of

being used by Titan to pay dividends and for the purpose of making repurchases of its

own shares in the market (subject to the above restriction) with a view to narrowing the

discount to NAV at which Titan’s Ordinary shares trade.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 101

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16. Financial instruments and risk management

Titan’s ﬁnancial instruments comprise equity and ﬁxed-interest investments, cash

balances and liquid resources including debtors and creditors. Titan holds ﬁnancial

assets in accordance with its investment policy of investing mainly in a portfolio of

VCT qualifying unquoted securities whilst holding a proportion of its assets in cash or

near-cash investments in order to provide a reserve of liquidity.

Classiﬁcation of ﬁnancial instruments

Titan held the following categories of ﬁnancial instruments, all of which are included in

the Balance Sheet at fair value, at 31 December 2022:

31 December

2022

£’000

31 December

2021

£’000

Financial assets held at fair value through

proﬁt or loss

Fixed asset investments

827,449

1,005,353

Corporate bonds

104,244

110,247

Money market funds

58,701

88,126

Total 990,394

1,203,726

Financial assets at amortised cost

Applications cash

23,299

2,630

Cash at bank

16,120

182,514

Other debtors

225

Disposal proceeds

46,956

52,668

Interest receivable on loans included in ﬁxed asset

investments 288 486

Total 86,706

238,523

Financial liabilities at amortised cost

Trade creditors

Unallotted cash

23,299

2,630

Total

23,330

2,642

1. Applications cash and unallotted cash is cash received from investors by Titan but not yet allotted.

Fixed asset investments (see Note 10) are valued at fair value. Unquoted investments

are carried at fair value as determined by the Directors in accordance with IPEV

guidelines. The fair value of all other ﬁnancial assets and liabilities is represented by

their carrying value in the Balance Sheet. The Directors believe that the fair value of

these assets held at the year end is equal to their book value.

In carrying on its investment activities, Titan is exposed to various types of risk

associated with the ﬁnancial instruments and markets in which it invests. The most

signiﬁcant types of ﬁnancial risk facing Titan are market risk, interest rate risk, credit

risk and liquidity risk. Titan’s approach to managing these risks is set out below,

together with a description of the nature and amount of the ﬁnancial instruments

held at the balance sheet date.

Market risk

Titan’s strategy for managing investment risk is determined with regard to Titan’s

investment objective, as outlined on page 6. The management of market risk is

part of the investment management process and is a central feature of venture

capital investment. Titan’s portfolio is managed in accordance with the policies and

procedures described in the Corporate Governance Statement on pages 60 and 61,

having regard to the possible eects of adverse price movements, with the objective

of maximising overall returns to shareholders. Investments in unquoted companies,

by their nature, usually involve a higher degree of risk than investments in companies

quoted on a recognised stock exchange, though the risk can be mitigated to a

certain extent by diversifying the portfolio across business sectors and asset classes.

The overall disposition of Titan’s assets is regularly monitored by the Board.

Details of Titan’s investment portfolio at the balance sheet date are set out on pages

106 to 110.

78.2% (2021: 67.6%) by value of Titan’s net assets (99.7% of portfolio value) comprises

investments in unquoted companies held at fair value. The valuation methods used

by Titan include the application of a multiples ratio derived from listed companies

with similar characteristics, and other market derived valuations, and consequently

the value of the unquoted element of the portfolio can be indirectly aected by

movements in the prices of quoted investments, such as those listed on the London

Stock Exchange. A 25% (2021: 25%) overall decrease in the valuation of the unquoted

investments at 31 December 2022 would have decreased net assets for the year by

£206,302,406 (2021: £231,983,000) and an equivalent change in the opposite direction

would have increased net assets for the year by the same amount.

Strategic report Governance Financials

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continued

16. Financial instruments and risk management continued

Market risk continued

32.2% of net assets (40.9% of portfolio value) is valued using revenue-based multiples,

including PRI calibration. An increase in the multiple used by 10% would increase the

net asset value by 2.9% (£30,362,224). Conversely, a decrease in the multiple used by

10% would decrease the net asset value by 2.9% (£30,546,798). The 10% sensitivity used

provides the most meaningful impact of average multiple changes across the portfolio.

42.5% of net assets (54.1% of portfolio value) is valued using PRI multiples, and an

increase in the PRI used by 5% would increase the net asset value by 2.1% (£22,291,997).

Conversely, a decrease in the PRI used by 5% would have a minimal impact on the

portfolio value given the majority of investments have downside protection achieved

through structuring. The 5% sensitivity used provides the most meaningful impact of

average PRI changes across the portfolio.

34.5% of net assets (37.4% of portfolio value) is exposed to changes in the foreign

exchange rate, of which 22.8% of net assets is exposed to USD, 3.4% is exposed to EUR,

while 8.3% is exposed to more than one foreign currency. An increase in the rate of 5%

would decrease the net asset value by 1.2% (£12,810,684). Conversely, a decrease in the

rate of 5% would increase the net asset value by 1.4% (£13,416,894). The 5% sensitivity

used provides the most meaningful impact of average foreign exchange rate changes

across the portfolio.

Interest rate risk

Some of Titan’s ﬁnancial assets are interest-bearing, of which some are at ﬁxed rates

and some variable. As a result, Titan is exposed to fair value interest rate risk due to

ﬂuctuations in the prevailing levels of market interest rates.

Fixed rate

The table below summarises weighted average eective interest rates for the ﬁxed

interest-bearing ﬁnancial instruments:

As at 31 December 2022 As at 31 December 2021

Total

ﬁxed rate

portfolio

by value

£’000

Weighted

average

interest

rate %

Weighted

average

time for

which

rate is

ﬁxed

(years)

Total

ﬁxed rate

portfolio

by value

£’000

Weighted

average

interest

rate %

Weighted

average

time for

which

rate is

ﬁxed

(years)

Fixed rate investments in

unquoted companies 3,183 7. 25% 4.4 8,010 6.59% 4.9

Due to the relatively short period to maturity of the ﬁxed rate investments held within

the portfolio, it is considered that an increase or decrease of 1% in the base rate as at the

reporting date would not have had a signiﬁcant eect on Titan’s net assets for the year.

Floating rate

Titan’s ﬂoating rate investments comprise interest-bearing money market funds as

at 31 December 2022. Titan’s cash held at bank earns no interest due to the HMRC

VCT rule which prohibits a VCT from earning more than 30% of its income in non-VCT

qualifying income, and interest earned on bank balances is non-qualifying income.

The benchmark rate which determines the rate of interest receivable on Titan’s money

market investment is the Bank of England base rate, which was 3.5% at 31 December

2022. The amounts held in ﬂoating rate investments at the balance sheet date were as

follows:

31 December 2022

£’000

31 December 2021

£’000

Money market funds

58,701

88,126

Total

58,701

88,126

A 1% increase in the base rate would increase income receivable from these

investments and the net assets for the year by £587,000 (2021: £881,000).

Credit risk

There were no signiﬁcant concentrations of credit risk to counterparties at

31 December 2022. By fair value, no individual investment exceeded 9.8% (2021: 11%)

of Titan’s net assets at 31 December 2022.

Credit risk is the risk that a counterparty to a ﬁnancial instrument will fail to discharge

an obligation or commitment that it has entered into with Titan. The Portfolio

Manager and the Board carry out a regular review of counterparty risk. The carrying

values of ﬁnancial assets represent the maximum credit risk exposure at the balance

sheet date.

Strategic report Governance Financials

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16. Financial instruments and risk management continued

Credit risk continued

At 31 December 2022, Titan’s ﬁnancial assets exposed to credit risk comprised of the

following:

31 December

2022

£’000

31 December

2021

£’000

Cash at bank

16,120

182,514

Applications cash

23,299

2,630

Money market funds

58,701

88,126

Corporate bonds

104,244

110,247

Fixed rate investments in unquoted companies

3,183

8,010

Total

205,547

391,527

Credit risk relating to listed money market funds is mitigated by investing in a portfolio

of investment instruments of high credit quality, comprising securities issued by major

UK companies and institutions. Credit risk relating to loans to and preference shares in

unquoted companies is considered to be part of market risk.

The investments in money market funds and corporate bonds are uncertiﬁed.

Credit risk arising on the sale of investments is considered to be small due to the short

settlement and the contracted agreements in place with the settlement lawyers.

Titan’s deposit and current accounts are maintained with HSBC Bank plc. The Portfolio

Manager has in place a monitoring procedure in respect of counterparty risk which

is reviewed on an ongoing basis. Should the credit quality or the ﬁnancial position of

HSBC deteriorate signiﬁcantly, the Portfolio Manager will move the cash holdings to

another bank.

Liquidity risk

Titan’s ﬁnancial assets include investments in unquoted equity securities which are not

traded on a recognised stock exchange and which generally may be illiquid. They also

include investments in AIM-quoted companies, which, by their nature, involve a higher

degree of risk than investments on the main market. As a result, Titan may not be

able to realise some of its investments in these instruments quickly at an amount close

to their fair value in order to meet its liquidity requirements, or to respond to speciﬁc

events such as deterioration in the creditworthiness of any particular issuer.

Titan’s listed money market funds are considered to be readily realisable as they are of

high credit quality as outlined above.

Titan’s liquidity risk is managed on a continuing basis by the Portfolio Manager in

accordance with policies and procedures laid down by the Board. Titan’s overall

liquidity risks are monitored on a quarterly basis by the Board.

Titan maintains sucient investments in cash and readily realisable securities to pay

accounts payable and accrued expenses. At 31 December 2022 these investments were

valued at £179,062,000 (2021: £380,290,000).

17. Post balance sheet events

The following other events occurred between the balance sheet date and the signing

of these ﬁnancial statements:

• 13 new investments completed totalling £36.1 million;

• 6 follow-on investments completed totalling £9.3 million;

• the NAV as at 31 December 2022 of 76.9p was announced on 4 April 2023 as a correction

to the NAV announced on 29 March 2023 and was used for recent share transactions;

• 135.3 million shares were issued on 29 March 2023 at an allotment price of 81.7p

under the Oer which closed on 5 April 2023;

• 0.5 million shares were issued on 4 April 2023 at a corrected allotment price of

81.4p under the Oer which closed on 5 April 2023;

• 53.4 million shares were issued on 5 April 2023 at an allotment price of 81.4p

under the Oer which closed on 5 April 2023;

• full disposal of Patch Gardens Limited in January 2023 in exchange for shares in

Arena Online Limited; and

• full disposal of Commazero Limited in February 2023 to Paystratus Group Limited.

18. Contingencies, guarantees and ﬁnancial commitments

Provided that an intermediary continues to act for a shareholder and the shareholder

continues to be the beneﬁcial owner of the shares, intermediaries will be paid

an annual IFA commission of 0.5% of advised investors’ gross NAV from Titan.

IFA charges of £3,084,000 were expensed during the period (2021: £3,202,000) and

there was £1,622,000 (2021: £1,932,000) outstanding at the period end.

There were £nil contingencies, guarantees or ﬁnancial commitments as at

31 December 2022 (2021: £nil).

Strategic report Governance Financials

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19. Transactions with the Manager and Portfolio Manager

Since 1 September 2017, Titan has been classiﬁed as a full-scope Alternative Investment

Fund under the Alternative Investment Fund Management Directive (the ‘AIFM

Directive’). As a result, since 1 September 2017, Titan’s investment management

agreement was assigned by way of the deed of novation from Octopus Investments

Limited to Octopus AIF Management Limited to act as Manager (an authorised

alternative investment fund manager responsible for ensuring compliance with the

AIFM Directive). Octopus AIF Management Limited has in turn appointed Octopus

Investments Limited to act as Portfolio Manager to Titan (responsible for portfolio

management and the day-to-day running of Titan). These agreements ensure the

same personnel are managing Titan’s portfolio both before and after 1 September 2017.

Titan paid Octopus AIF Management Limited £22,508,000 (2021: £20,668,000) in the

period as a management fee. The annual management charge (AMC) is based on 2%

of Titan’s NAV in respect of existing funds but in respect of funds raised by Titan under

the 2018 Oer and thereafter (and subject to Titan having a cash reserve of 10% of

its NAV), the AMC on uninvested cash is the lower of either (i) the actual return that

Titan receives on its cash and funds that are the equivalent of cash (which currently

consist of corporate bonds and money market funds) subject to a 0% ﬂoor and (ii) 2%

of Titan’s NAV. The AMC is payable quarterly in advance and calculated using the latest

published NAV of Titan and the number of shares in issue at each quarter end.

Octopus provides non-investment services to the Company and receives a fee for

these services which is capped at the lower of (i) 0.3% per annum of the Company’s

NAV or (ii) the administration and accounting costs of the Company for the year

ended 31 December 2020 with inﬂation increases in line with the Consumer Price Index.

During the period, the Company paid £1,893,000 (2021: £1,723,000) to Octopus for the

non-investment services.

In addition, Octopus is entitled to performance-related incentive fees. The incentive

fees were designed to ensure that there were signiﬁcant tax-free dividend payments

made to shareholders as well as strong performance in terms of capital and income

growth, before any performance-related fee payment was made.

Due to performance in the period, the Total Value has decreased to 173.9p, representing

a total loss of 23.8p.

The High Water Mark for FY 2023 will therefore be 197.7p. If, on a subsequent ﬁnancial

year end, the performance value of Titan falls short of the High Water Mark on the

previous ﬁnancial year end, no performance fee will arise. If, on a subsequent ﬁnancial

year end, the performance exceeds the previous best High Water Mark of Titan, the

Manager will be entitled to 20% of such excess in aggregate.

Octopus received £nil in the period to 31 December 2022 (2021: £0.1 million) in regard

to arrangement and monitoring fees in relation to investments made on behalf

of Titan. Since 31 October 2018, Octopus no longer receives such fees in respect of

new investments or any such new fees in respect of further investments into portfolio

companies in which Titan invested on or before 31 October 2018, with any such fees

received after that time being passed to Titan.

The cap relating to Titan’s total ongoing charges ratio, that is the regular, recurring

costs of Titan expressed as a percentage of its NAV, above which Octopus has agreed

to pay, is 2.5%, and is calculated in accordance with the AIC Guidelines.

Octopus AIF Management Limited remuneration disclosures (unaudited)

Quantitative remuneration disclosures required to be made in this annual report in

accordance with the FCA Handbook FUND 3.3.5 are available on the website:

https://www.octopusinvestments.com/remuneration-disclosures/.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 105

continued

20. Related party transactions

Titan owns Zenith Holding Company Limited, which owns a share in Zenith LP, a fund

managed by Octopus.

In the year, Octopus Investments Nominees Limited (OINL) has purchased Titan shares

from shareholders to correct administrative issues, on the understanding that shares

will be sold back to Titan in subsequent share buybacks. As at 31 December 2022, no

Titan shares were held by OINL (2021: 7,637 shares) as beneﬁcial owner. Throughout

the period to 31 December 2022, OINL purchased 729,365 shares (2021: 24,359 shares)

at a cost of £678,000 (2021: £27,000) and sold 737,002 shares (2021: 16,816 shares) for

proceeds of £672,000 (2021: £18,000). This is classed as a related party transaction as

Octopus, the Portfolio Manager, and OINL are part of the same group of companies.

Any such future transactions, where OINL takes over the legal and beneﬁcial ownership

of Company shares, will be announced to the market and disclosed in annual and

half-yearly reports.

Several members of the Octopus investment team hold non-executive directorships

as part of their monitoring roles in Titan’s portfolio companies, but they have no

controlling interests in those companies.

Matt Cooper, a Non-Executive Director of Titan, was the Chair of Octopus Capital

Limited until his resignation on 14 September 2022. Matt Cooper owned shares in

Octopus Group Holdings Ltd during the year, which have been fully disposed of

as at year end. The Directors received the following dividends from Titan:

Year to

31 December

2022

Year to

31 December

2021

Tom Leader (Chair since 14 June 2022)

1,640

2,148

John Hustler (Chair until 14 June 2022)

5,569

11,983

Matt Cooper

117,661

207,754

Jane O’Riordan

6,530

11,347

Mark Hawkesworth (resigned on 7 June 2021)

1,061

10,659

Lord Rockley

2,145

1,427

Gaenor Bagley

740

713

21. Voting rights and equity management

The following table shows the percentage of voting rights held by Titan for each of the

top ten investments held in Titan. Titan has no other substantial interests that require

separate disclosure.

Investments % equity held by Titan

Many Group Ltd (trading as ManyPets) 7.5%

Amplience Limited 23.6%

Permutive Inc. 17.9 %

Digital Therapeutics, Inc. (trading as Quit Genius) 15.4%

Mr & Mrs Oliver Ltd (trading as Skin+Me) 20.6%

Orbital Express Launch Limited (trading as Orbex) 11.5%

Big Health Limited 10.8%

vHive Tech Limited 19.0%

Token.IO Limited 14.1%

Sofar Sounds Limited 10.7%

At 31 December 2022, the Company held signiﬁcant investments, amounting to 20%

or more of the equity capital of an undertaking, in the following companies:

£’000 £’000 £’000

Equity investment

(Ordinary shares)

Investment in loan

stock and

preference shares

Total

investment

(at cost)

Registered address

Zenith

Holding

Company

Limited

8,963 0 8,963 94 Solaris Avenue

Camana Bay

Grand Cayman

KY1-1108

Amplience 6,121 7,513 13,634 Tower House

10 Southampton Street

London WC2E 7HA

Mr & Mrs

Oliver Ltd

(trading as

Skin+Me)

11,500 0 11,500 The Battleship Building

179 Harrow Road, London

England, W2 6NB

1. See Note 1 for further information on Titan’s relationship with Zenith Holding Company.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 106

Appendix

Investment portfolio

The table below sets out the investment cost and the amount invested in the year for the portfolio as at 31 December 2022. Details of the top ten investments can be found on

pages 35 to 37.

Fixed asset investments Investment focus

Investment

cost as at

31 December 2022

£’000

Amount invested

in the year to

31 December 2022

£’000

Permutive Inc. B2B software

18,994 —

Amplience Limited B2B software

13,634 —

Digital Therapeutics (trading as Quit Genius) Health

12,890 —

Big Health Limited Health

12,855 —

Token.IO Ltd

Fintech

12,608 4,186

Smartkem Limited Deep tech

12,195 1,442

Ometria Limited B2B software

11,510 —

Mr & Mrs Oliver Ltd (trading as Skin+Me) Health

11,500 7,500

Sofar Sounds Limited Consumer

11,496 95

PLU&M Limited Consumer

11,050 550

Orbital Express Launch Limited (trading as Orbex) Deep tech

10,298 5,748

Bought By Many Limited (trading as ManyPets) Fintech

9,978 —

Uniplaces Limited Consumer

9,491 —

Ori Biotech Limited Bio

9,102 —

Zenith Holding Company Limited Consumer

8,963 —

Codasip Deep tech

8,633 8,633

Seatfrog UK Holdings Limited Consumer

8,631 408

Appear Here Limited

Consumer

8,509 —

XYZ Reality Limited Consumer

8,500 —

Automata Technologies Limited Health

8,500 8,500

Intropic Limited

Fintech

8,394 8,394

CurrencyFair Limited (trading as Zai) Fintech

8,381 —

Antidote Technologies Ltd

Health

8,251 —

Allplants Limited Climate

8,150 900

vHive Tech Ltd Deep tech

8,020 4,024

Elliptic Enterprises Limited

Fintech

7,724 —

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 107

Appendix continued

Fixed asset investments Investment focus

Investment

cost as at

31 December 2022

£’000

Amount invested

in the year to

31 December 2022

£’000

Chronext AG Consumer

7,708 —

AllTaster Limited (trading as Taster) Consumer

7,456 3,772

The Justice Platform Inc. (trading as Legl) B2B software

7,32 5 3,325

Picsoneye Segmentation Innovation Limited (trading as Pixoneye) Deep tech

7,208 1,400

Iovox Limited

B2B software

7,206 —

Ibex Medical Analytics Health

7,148 —

Vitesse PSP Ltd Fintech

7,128 2,128

Surrey NanoSystems Limited Bio

6,918 —

Stackin Inc Fintech

6,840 —

Papercup Technologies Limited

Deep tech

6,800 6,800

Partly Consumer

6,769 6,769

By Miles Limited Fintech

6,732 —

Minoro Limited (trading as Kleene.ai)

B2B software

6,724 —

Chiaro Technology Limited (trading as Elvie)

Health

6,417 —

Biofidelity Ltd Bio

6,343 —

Dead Happy Limited

Fintech

6,300 2,600

Casual Speakers Limited (trading as Jolt) Consumer

6,258 189

Phoelex Ltd Deep tech

6,025 —

Olio Exchange Limited Climate

6,000 —

Sprout.ai Limited Fintech

6,000 —

Origami Energy Limited Climate

5,947 —

Bondaval Limited

Fintech

5,899 3,349

Overture Life, Inc Health

5,813 —

Artesian Solutions Limited (trading as Full Circl)

B2B software

5,481 —

Anikin Ltd (trading as KatKin) Consumer

5,475 675

Messier 31 Inc (trading as Pngme) Fintech

5,429 —

Memrise Inc Consumer

5,144 —

Lifescore Music Limited

Deep tech

5,100 5,100

Cazoo Limited

Consumer

4,973 —

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 108

Appendix continued

Fixed asset investments Investment focus

Investment

cost as at

31 December 2022

£’000

Amount invested

in the year to

31 December 2022

£’000

Impatients N.V. (trading as MyTomorrows)

Health

4,905 200

Michelson Diagnostics Limited

Health

4,795 —

Dogtooth Technologies Limited Deep tech

4,739 —

Inﬂow Holdings Inc

Health

4,500 4,500

ThoughtRiver Limited Deep tech

4,500 —

Raylo Group Limited

Climate

4,500 —

Positron Technologies Limited Fintech

4,500 500

Patch Gardens Limited Consumer

4,472 300

The Faction Collective SA Consumer

4,464 —

Secret Escapes Limited

Consumer

4,256 —

Lapse Ltd Consumer

4,250 —

Tatum Blockchain Services s.r.o. Fintech

4,190 2,042

Smiler BV Consumer

4,099 4,099

Mosaic Smart Data Limited Fintech

4,015 1,235

AudioTelligence Limited Deep tech

4,000 —

CRED Investment Holdings Limited Fintech

4,000 1,000

Slamcore Limited Deep tech

3,875 1,325

Contingent & Future Technologies Ltd

Fintech

3,825 —

Living Optics Deep tech

3,819 3,819

Unmade Ltd Deep tech

3,800 —

Altitude Angel Ltd Deep tech

3,800 —

Unlikely AI Deep tech

3,783 3,783

Merge Holdings Ltd Fintech

3,740 3,740

Medisafe Project Limited

Health

3,664 —

Vira Health Limited

Health

3,632 3,632

Perk Finance (trading as Cobee) Fintech

3,621 3,621

Orca Computing Limited Deep tech

3,500 3,500

Inrupt Inc. Fintech

3,495 —

CoMind Technologies Limited

Deep tech

3,375 —

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 109

Appendix continued

Fixed asset investments Investment focus

Investment

cost as at

31 December 2022

£’000

Amount invested

in the year to

31 December 2022

£’000

Inﬁnitopes

Bio

3,004 3,004

Traﬁ Limited

Climate

2,965 —

Bloom App Limited

Consumer

2,857 2,857

Ecrebo Limited

B2B software

2,857 —

Metrasens Limited Deep tech

2,819 —

Nanosyrinx Ltd Health

2,750 1,375

iSize Limited Climate

2,625 —

HURR Climate

2,550 —

Caprera Ltd (trading as Collectiv Food) Climate

2,471 471

Intrepid Owls Limited (trading as Rest Less) Fintech

2,427 900

ONIN Limited Consumer

2,340 2,340

Apheris B2B software

2,322 2,322

Streetbees.com Limited B2B software

2,229 —

Touchlab Limited Deep tech

2,125 2,125

Total Food Control Ltd (trading as Lollipop) Consumer

2,125 —

Manantial Ltd t⁄a Velaris B2B software

2,040 2,040

Uniq Health Limited Health

1,900 —

Commazero Ltd Fintech

1,785 —

Invierno AB (trading as Vinter) Fintech

1,776 1,776

Foodsteps Ltd Climate

1,700 1,700

Imophoron Limited Bio

1,700 —

Ufonia Limited Health

1,664 1,664

Intrinsic Deep tech

1,641 1,641

Walking on Earth Consumer

1,615 —

Quantum Motion Technologies Limited Deep tech

1,498 —

Segura Systems Limited B2B software

1,470 —

Neat Fintech

1,426 1,426

Minimum Corporation Climate

1,393 634

Sidekick Money Ltd Fintech

1,351 1,351

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 110

Appendix continued

Fixed asset investments Investment focus

Investment

cost as at

31 December 2022

£’000

Amount invested

in the year to

31 December 2022

£’000

Ribbon Technologies Ltd Consumer

1,351 1,351

Aire Labs Limited Fintech

1,332 —

Kita Earth

Climate

1,289 1,289

Oto Health Inc

Health

1,286 1,286

Multiply AI Limited Fintech

1,283 —

Mojo Men Ltd Health

1,275 —

Bkwai Ltd Deep tech

1,275 —

I.F. Technology Ltd (trading as Integrated Finance)

Fintech

1,275 —

Mindset Technologies Limited

Health

1,020 —

Phlux Technology Ltd Deep tech

937 937

Anansi Technology Limited Fintech

900 —

Avione Saving & Investment Ltd Fintech

850 —

Hapi Plan Technologies Ltd (trading as Nosso) Fintech

765 —

Little Journey Limited Health

703 703

Troglo Ltd (trading as LVNDR)

Health

680 —

M10 Networks Fintech

626 —

Excession Technologies Limited Deep tech

298 —

Total ﬁxed asset investments 649,507 156,973

1. Investment cost reﬂects the amount invested into each portfolio company from Titans 1 – 5 before the 2014 merger and from Titan after the merger. This is dierent to the book cost (as per Note 10 to the ﬁnancial

statements) which includes the holding gains/(losses) on assets which transferred from Titans 1, 3, 4 and 5 to Titan 2 (now Titan) during the 2014 merger, as Titan purchased these assets at fair value.

2. Owns stake in Secret Escapes Limited.

3. These companies have also been invested into by other funds managed by Octopus.

4. The ﬁgures for Secret Escapes relate to Titan’s direct investment only.

5. Disposed during the year as disclosed in the exit table in Note 10 on page 98.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 111

Shareholder information and contact details

Octopus Titan VCT 2 plc was renamed Octopus Titan VCT plc on 27 November 2014

following the merger with Octopus Titan VCT 1 plc, Octopus Titan VCT 3 plc, Octopus

Titan VCT 4 plc and Octopus Titan VCT 5 plc on the same date.

Titan was incorporated on 12 October 2007. In collaboration with Octopus Titan VCT 1

plc, over £30.8 million in aggregate (£29.5 million net of expenses) was raised through

an Oer for Subscription during the year to 31 October 2008. Since then, further funds

have been raised through fundraises as follows:

• £1.4 million (£1.3 million net of expenses) during the year to 31 October 2010;

• £1.4 million (£1.3 million net of expenses) during the year to 31 October 2012;

• £4.8 million (£4.6 million net of expenses) during the year to 31 October 2013;

• £10.8 million (£10.4 million net of expenses) during the year to 31 October 2014;

• £54.7 million (£52.6 million net of expenses) during the year to 31 October 2015;

• £99.8 million (£96.3 million net of expenses) during the year to 31 October 2016;

• £124.1 million (£119.9 million net of expenses) during the year to 31 October 2017;

• £204.9 million (£198.4 million net of expenses) during the year to 31 October 2018;

• £289.6 million (£279.7 million net of expenses) during the period to

31 December 2019;

• £131.4 million (£127.8 million net of expenses) during the year to 31 December 2020;

• £256.3 million (£249.3 million net of expenses) during the year to 31 December 2021;

and

• £90.5 million (£88.2 million net of expenses) during the year to 31 December 2022.

The Oer for Subscription was closed to new applicants on 5 April 2023 having raised

£237 million.

Further details of Titan’s progress are discussed in the Chair’s Statement and Portfolio

Manager’s Review on pages 3 to 5 and 23 to 38 respectively.

Venture Capital Trusts (VCTs)

VCTs were introduced in the Finance Act 1995 to provide a means for private individuals

to invest in unquoted companies in the UK. Subsequent Finance Acts have introduced

changes to VCT legislation. The tax beneﬁts currently available to eligible new investors

in VCTs include:

• up to 30% upfront income tax relief;

• exemption from income tax on dividends paid; and

• exemption from capital gains tax on disposals of shares in VCTs.

The principal activity of Titan is to invest in a diversiﬁed portfolio of UK smaller

companies in order to generate capital growth over the long term as well as an

attractive tax-free dividend stream. Titan has been granted full approval as a VCT by

HM Revenue & Customs (HMRC).

In order to maintain its approval Titan must comply with certain requirements on a

continuing basis including the provisions of chapter 3 of the Income Tax Act 2007,

in particular s280A:

• at least 80% of its investments must comprise ‘qualifying holdings’

(as deﬁned in

the legislation); at least 70% of the 80% of qualifying holdings must be invested in

Ordinary shares with no preferential rights (for money allotted before April 2011, the

limit is 30% for new investments);

• no single investment made can exceed 15% of Titan’s Total Value; and

• a minimum of 10% of each qualifying investment must be in Ordinary shares with

no preferential rights.

1. A ‘qualifying holding’ consists of up to £5 million (£10 million for knowledge-intensive companies) invested

in any one year in new shares or securities in an unquoted company (or companies quoted on AIM) which

is carrying on a qualifying trade and whose gross assets do not exceed a prescribed limit at the time of

investment. The deﬁnition of a ‘qualifying trade’ excludes certain activities such as property investment

and development, ﬁnancial services and asset leasing.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 112

Shareholder information and contact details continued

Dividends

Dividends are paid by Computershare Investor Services PLC (‘Computershare’) on

behalf of Titan. Shareholders who wish to have dividends paid directly into their

bank account rather than by cheque to their registered address can complete a

mandate form for this purpose or complete an instruction electronically by visiting the

Computershare Investor Centre at: www-uk.computershare.com/investor/.

Queries relating to dividends, shareholdings or requests for mandate forms should

be directed to Computershare by calling 0370 703 6324. Calls to this number cost

the same as a normal local or national landline call and may be included in your

service provider’s tari. Calls outside the United Kingdom will be charged at the

applicable international rate. Computershare Investor Services PLC are open between

8.30am-5.30pm, Monday to Friday excluding public holidays in England and Wales.

Computershare can be contacted in writing at:

The Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS99 6ZZ

The table below shows the NAV per share and lists the dividends that have been paid

since the launch of Titan:

Period ended NAV

Dividends paid

in period

NAV + cumulative

dividends

(Total Value)

30 April 2008 95.0p — 95.0p

31 October 2008 89.9p — 89.9p

30 April 2009 91.5p 0.5p 92.0p

31 October 2009 96.1p 0.5p 97.1p

30 April 2010 92.0p 0.5p 93.5p

31 October 2010 94.9p 0.5p 96.9p

30 April 2011 92.1p 0.75p 94.85p

31 October 2011 91.5p 0.75p 95.0p

30 April 2012 92.8p 1.0p 97. 3p

31 October 2012 121.9p 1.5p 127.9p

30 April 2013 88.7p 34.0p 128.7p

31 October 2013 95.2p 2.5p 137.7p

30 April 2014 92.2p 2.5p 137. 2p

31 October 2014 101.4p 2.5p 148.9p

30 April 2015 97.7p 2.5p 147.7p

31 October 2015 102.7p 2.0p 154.7p

30 April 2016 95.7p 7.0 p 154.7p

31 October 2016 97.9p 2.0p 158.9p

30 April 2017 95.2p 3.0p 159.2p

31 October 2017 96.4p 2.0p 162.4p

30 April 2018 94.3p 3.0p 163.3p

31 October 2018 93.1p 2.0p 164.1p

30 April 2019 92.4p 3.0p 166.4p

31 December 2019 95.2p 2.0p 171.2p

30 June 2020 89.5p 3.0p 168.5p

31 December 2020 97.0p 2.0p 178.0p

30 June 2021 113.9p 3.0p 197.9p

31 December 2021 105.7p 8.0p 197.7p

30 June 2022 91.3p 3.0p 186.3p

31 December 2022 76.9p 2.0p 173.9p

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 113

Shareholder information and contact details continued

Dividends continued

A second interim dividend of 3p per share will be paid on 24 May 2023 to shareholders

on the register on 5 May 2023.

Titan also oers a Dividend Reinvestment Scheme (DRIS). Any shareholder wishing

to reinvest their dividends, who has not already elected to do so, can request a DRIS

instruction form by calling Computershare on 0370 703 6324. The application form can

also be found on the Octopus Investments Limited website:

www.octopusinvestments.com. If you are uncertain about your current DRIS

position, please call Computershare on the number above or complete a new form.

Share price

Titan’s share price can be found on various ﬁnancial websites including

www.londonstockexchange.com, with the following TIDM/EPIC code:

Ordinary shares

TIDM/EPIC code OTV2

Latest share price (21 April 2023) 73.5p

Buying and selling shares

Titan’s Ordinary shares can be bought and sold via a stockbroker in the same way

as any other company quoted on the London Stock Exchange. There may be tax

implications in respect of selling all or part of your holdings, so shareholders should

contact their independent ﬁnancial adviser if they have any queries.

Buyback of shares

Titan operates a policy of buying its own shares for cancellation as they become

available, and envisages that purchases will be made at no greater than a 5%

discount to the prevailing NAV. Titan is, however, unable to buy back shares directly

from shareholders. If you are considering selling your shares please contact Octopus

Investments who can talk to you about the options available. They will also be able

to provide details of closed periods (when Titan is prohibited from buying shares) and

details of the price at which it has been bought and can be contacted as follows:

Octopus Client 0800 316 2295

Relations Team investorsupport@octopusinvestments.com

If you are considering trading on the secondary market or would like to talk directly

to Titan’s corporate broker, Panmure Gordon (UK) Limited (‘Panmure’), they can be

contacted as follows:

Chris Lloyd 020 7886 2716 chris.lloyd@panmure.com

Paul Nolan 020 7886 2717 paul.nolan@panmure.com

Secondary market

UK income tax payers, aged 18 or over, can purchase shares in the secondary market

and beneﬁt from:

• tax-free dividends;

• realised gains not being subject to capital gains tax (although any realised losses are

not allowable);

• no minimum holding period; and

• no need to include VCT dividends in annual tax returns.

The UK tax treatment of VCTs is on a ﬁrst in and ﬁrst out basis and so tax advice

should be obtained before shareholders dispose of their shares.

Whilst there is no speciﬁc limit on the amount of an individual’s acquisition of shares

in a VCT, tax reliefs will only be given to the extent that the total of an individual’s

subscriptions or other acquisitions of shares in VCTs in any tax year do not exceed

£200,000. Qualifying investors who intend to invest more than £200,000 in VCTs in

any one tax year should consult their professional advisers.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 114

Shareholder information and contact details continued

Notiﬁcation of change of address

Communications with shareholders are mailed to the registered address held on the

share register. In the event of a change of address or other amendment, this should be

notiﬁed to Titan’s registrar, Computershare, under the signature of the registered holder

or via the Computershare Investor Centre at: www-uk.computershare.com/investor/.

Computershare’s contact details are provided on page 116.

Other information for shareholders

Shareholders can obtain a full copy of Titan’s annual report as well as previously

published annual reports and interim reports on the Octopus website at

octopustitanvct.com.

All other statutory information can also be found here.

Electronic communications

We also publish reports and accounts and all other correspondence electronically.

This cuts the cost of printing and reduces the impact on the environment.

If, in future, you would prefer to receive an email telling you a report is

available to view or to receive documents by email please contact Octopus on

0800 316 2295 or Computershare on 0370 703 6324. Alternatively you can sign

up to receive e-communications via the Computershare Investor Centre at:

www-uk.computershare.com/investor/.

Warning to shareholders

Many companies are aware that their shareholders have received unsolicited

phone calls or correspondence concerning investment matters. These are typically

from overseas-based ‘brokers’ who target UK shareholders oering to sell them what

often turn out to be worthless or high risk shares in US or UK investments. They can

be very persistent and extremely persuasive. Shareholders are therefore advised to

be wary of any unsolicited advice, oer to buy shares at a discount, or oer for free

company reports.

Please note that it is very unlikely that either Octopus or Titan’s registrar would make

unsolicited telephone calls to shareholders and that any such calls would relate only

to ocial documentation already circulated to shareholders and never in respect of

investment advice.

If you are in any doubt about the authenticity of an unsolicited phone call, please call

Octopus on 0800 316 2295.

The Financial Conduct Authority has also issued guidelines on how to

avoid share fraud and further information can be found on their website:

www.fca.org.uk/scamsmart/share-bond-boiler-room-scams.

You can report any share fraud to them by calling 0800 111 6768.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 115

Glossary of terms

Alternative performance measure (APM)

A ﬁnancial measure of historical or future ﬁnancial performance, ﬁnancial position,

or cash ﬂows, other than a ﬁnancial measure deﬁned or speciﬁed in the applicable

ﬁnancial reporting framework. These APMs will help shareholders to understand and

assess Titan’s progress. A number of terms within this glossary have been identiﬁed

as APMs.

Net asset value or NAV

The value of the VCT’s total assets less liabilities. It is equal to the total shareholders’

funds.

Net asset value per share or NAV per share

The NAV per share of Titan is the sum of the underlying assets less the liabilities of

Titan divided by the total number of shares in issue.

Dividend yield (APM)

Dividend yield is calculated as dividends paid per share in the period divided by the

opening NAV per share.

Ongoing charges ratio (APM)

The ongoing charges ratio has been calculated using the AIC recommended

methodology and excludes irrecoverable VAT, exceptional costs, trail commission and

performance fees. The ﬁgure shows the annual percentage reduction in shareholder

returns as a result of recurring operational expenses. It informs shareholders of the

likely costs that will be incurred in managing Titan in the future.

This is calculated by dividing the ongoing expenses, which includes the expenses

listed out in Note 4 on page 94 but excludes irrecoverable VAT, exceptional costs,

trail commission and performance fees by the average net assets in the period.

Total return (APM)

Total return is calculated as movement in NAV per share in the period plus dividends

paid in the period. Total return on the NAV per share enables shareholders to evaluate

more clearly the performance of Titan, as it reﬂects the underlying value of the

portfolio at the reporting date.

Total return % (APM)

Total return % is calculated as movement in NAV per share in the period plus dividends

paid in the period, divided by the NAV per share at the beginning of the period.

Total return % on the NAV per share enables shareholders to evaluate more clearly

the performance of Titan, as it reﬂects the underlying value of the portfolio at the

reporting date.

Sustainability % of Titan (APM)

Sustainability % is calculated as the proportion of Titan’s costs that are covered by

realisations over the preceding three years. The costs of the VCT include the share

buybacks, ordinary dividends and operating costs in the year.

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 116

Directors and advisers

Board of Directors

Tom Leader (Chair)

Jane O’Riordan

Matt Cooper

Lord Rockley

Gaenor Bagley

Company Number

Registered in England & Wales

No. 06397765

Legal Entity Identiﬁer (LEI)

213800A67IKGG6PVYW75

Secretary and Registered Oce

Octopus Company Secretarial Services Limited

33 Holborn

London

EC1N 2HT

Portfolio Manager

Octopus Investments Limited

33 Holborn

London

EC1N 2HT

Tel: 0800 316 2295

www.octopusinvestments.com

Manager

Octopus AIF Management Limited

33 Holborn

London

EC1N 2HT

Tel: 0800 316 2295

www.octopusinvestments.com

Corporate Broker

Panmure Gordon (UK) Limited

40 Gracechurch Street

London

EC3V 0BT

Tel: 020 7886 2500

Independent Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

Tax Adviser

James Cowper Kreston

Reading Bridge House

George Street

Reading

Berkshire

RG1 8LS

VCT Status Adviser

Shoosmiths LLP (appointed on 24/02/2022)

1 Bow Churchyard

London

EC4M 9DQ

Bankers

HSBC Bank plc

31 Holborn

London

EC1N 2HR

Registrars

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS99 6ZZ

Tel: 0370 703 6324

(Calls are charged at the standard geographic rate

and will vary by provider. Calls from outside the United

Kingdom will be charged at the applicable international

rate.)

www.computershare.com/uk

www-uk.computershare.com/investor/

Depositary

BNP Paribas Trust Corporation UK Limited

10 Avenue

London

NW1A 6AA

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 117

Notice of Annual General Meeting

Notice is hereby given that the AGM of Octopus Titan VCT plc will be held at One

Moorgate Place, London, EC2R 6EA on Wednesday, 14 June 2023 at 12.00 noon for the

purposes of considering and, if thought ﬁt, passing the following resolutions of which

Resolutions 1 to 8 will be proposed as Ordinary Resolutions and Resolutions 9 to 12 will

be proposed as Special Resolutions:

Ordinary Business

1. To receive and adopt the annual report and the audited ﬁnancial statements for

the year to 31 December 2022.

2. To approve the Directors’ remuneration policy.

3. To approve the Directors’ Remuneration Report.

4. To re-elect Jane O’Riordan as a Director.

5. To re-elect Lord Rockley as a Director.

6. To re-appoint BDO LLP as auditor of the Company and to authorise the Directors to

determine their remuneration.

Special Business

To consider and, if thought ﬁt, pass Resolutions 7 and 8 as Ordinary Resolutions and

Resolutions 9 to 12 as Special Resolutions:

7. Authority to allot relevant securities

THAT, in addition to existing authorities, the Directors of the Company be and

hereby are generally and unconditionally authorised in accordance with Section 551

of the Companies Act 2006 (the ‘Act’) to exercise all the powers of the Company

to allot up to a maximum of 389,211,753 Ordinary shares in the Company (‘Shares’)

(representing approximately 25% of the Shares in issue as at 21 April 2023), provided

that the authority conferred by this Resolution shall expire on the date falling 15

months from the date of the passing of this Resolution (unless previously renewed,

varied or revoked by the Company in general meeting) save that this authority

shall allow the Company to make, before the expiry of this authority, any oers

or agreements which would or might require Shares to be allotted or rights to be

granted after such expiry and the Directors may allot Shares in pursuance of any

such oer or agreement notwithstanding the expiry of such authority.

8. Authority to allot relevant securities under the DRIS

THAT, in addition to existing authorities, the Directors of the Company be and

hereby are generally and unconditionally authorised in accordance with Section

551 of the Act to exercise all the powers of the Company to allot up to a maximum

of 77,842,351 Shares in connection with the Company’s Dividend Reinvestment

Scheme (representing approximately 5% of the Shares in issue as at 21 April 2023),

provided that the authority conferred by this Resolution shall expire on the date

falling 15 months from the date of the passing of this Resolution (unless previously

renewed, varied or revoked by the Company in general meeting) save that this

authority shall allow the Company to make, before the expiry of this authority, any

oers or agreements which would or might require Shares to be allotted or rights to

be granted after such expiry and the Directors may allot Shares in pursuance of any

such oer or agreement notwithstanding the expiry of such authority.

9. Empowerment to make allotments of equity securities

THAT, conditional upon the passing of Resolution 7 above and in addition to

existing authorities the Directors of the Company be and hereby are empowered

pursuant to Section 571 of the Act to allot or make oers or agreements to allot

equity securities (which expression shall have the meaning ascribed to it in Section

560(1) of the Act) for cash pursuant to the authority granted by Resolution 7

above, as if Section 561 of the Act did not apply to any such allotment and so that:

(a) reference to allotment of equity securities in this Resolution shall be construed

in accordance with Section 560(2) of the Act; and (b) the power conferred by

this Resolution shall enable the Company to make any oer or agreement before

the expiry of the said power which would or might require equity securities to

be allotted after the expiry of the said power and the Directors may allot equity

securities in pursuance of any such oer or agreement notwithstanding the expiry

of such power. The power provided by this Resolution shall expire on the date

falling 15 months from the date of the passing of this Resolution (unless previously

renewed, varied or revoked by the Company in general meeting).

Strategic report Governance Financials

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 118

Notice of Annual General Meeting continued

10. Empowerment to make allotments of equity securities under the DRIS

THAT, conditional upon the passing of Resolution 8 above and in addition to

existing authorities, the Directors of the Company be and hereby are empowered

pursuant to Section 571 of the Act to allot or make oers or agreements to allot

equity securities (which expression shall have the meaning ascribed to it in Section

560(1) of the Act) for cash pursuant to the authority granted by Resolution 8