Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022
## Backing Britain’s
## brightest businesses
## Octopus Titan VCT plc

## 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 Octopus
### Ventures awards Investments awards
FinancialsGovernanceStrategic report
## Find it fast

| Strategic report | Financials |  |
| --- | --- | --- |
| Highlights 2 | Directors’ responsibilities statement 78 |  |
| Chair’s statement 3 | Independent auditor’s report 79 |  |
| Titan’s objectives 6 | Income statement 86 |  |
| How Titan works 7 | Balance sheet 87 |  |
| Portfolio Manager’s review 23 | Statement of changes in equity 88 |  |
| Operating responsibly 39 | Cash ﬂow statement 90 | How Titan works p7 |
| Section 172(1) statement 45 | Notes to the ﬁnancial statements 91 |  |
| Risks and risk management 51 | Appendix 106 |  |
| Business review 55 | Shareholder information and contact details 111 |  |

Glossary of terms 115
Directors and advisers 116
## Governance Notice of Annual General Meeting 117
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 Portfolio Manager’s review p23
Remuneration 70
Directors’ report 73
## 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 Financials p77
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 1
Strategic report Governance Financials
## Highlights

|  | Net assets (£’000) | (Loss)/proﬁt after tax (£’000) |  |  | NAV per share |
| --- | --- | --- | --- | --- | --- |
| £1,051,760 |  |  | £(319,215) |  | 76.9p |
|  | 2021: £1,373,041 |  |  | 2021: £216,557 | 2021: 105.7p |

2

| NAV + cumulative dividends |  | Total return (p)¹ |  | Total return % |
| --- | --- | --- | --- | --- |
|  | 173.9p | (23.8)p |  | (22.5)% |
|  | 2021: 197.7p |  | 2021: 19.7p | 2021: 20.3% |

3

| Dividends paid in the year |  | Dividend yield % |  | Dividend declared |  |
| --- | --- | --- | --- | --- | --- |
|  | 5.0p |  | 4.7% |  | 3.0p |
|  | 2021: 11.0p |  | 2021: 11.3% |  | 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 2
Strategic report

Governance

Financials

# Chair's statement

![img-0.jpeg](img-0.jpeg)

## Highlights

Titan's latest fundraise

**£237 million**

Total return over five years

**11%**

Dividends paid in 2022

**5p**

I am pleased to present the annual results for Titan for the year ended 31 December 2022.

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 difficult 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.

Octopus Titan VCT plc | Annual report and financial statements 2022

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Governance

Financials

# 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.

![img-1.jpeg](img-1.jpeg)

## Fundraise and buybacks

On 10 November 2022, we launched a new offer 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 Offer to £250 million. The Offer 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 different 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 offer 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.

Octopus Titan VCT plc | Annual report and financial statements 2022

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Strategic report Governance Financials
## Chair’s statement continued
Outlook However, despite this dicult short-term outlook, our Titan also invested £157 million in new and follow-on
The impact of the economic downturn is being felt long-term view of early-stage venture capital remains opportunities in the year to 31 December 2022, which
globally. The escalation of the conﬂict in Ukraine, positive. The Board is reassured by the breadth and brings the total number of companies in the portfolio
central banks raising interest rates, the cost-of-living depth of Titan’s portfolio as it spans seven investment to 128 at 31 December 2022. The diversity and volume of
crisis deepening, political uncertainty and high inﬂation themes (Fintech, Health, Deep tech, Consumer, exciting new investments, and the upcoming pipeline of
rates have wide-ranging impacts, and early-stage Business-to-business (B2B) software, Bio and Climate) opportunities, is a testament to the work the investment
venture investments and VCTs are not immune to across dierent stages of development. This diversity team continues to put into sourcing, securing and
these turbulent trends. The Association of Investment means that Titan is well placed to navigate the current working with such businesses successfully.
Companies (AIC) conducted research across the VCT situation. Some portfolio companies should be more
VCTs have long provided a compelling opportunity
market and found that, after 13 consecutive years resilient to the current market volatility, such as those
for UK investors to provide funding for businesses
of positive returns, the VCTs analysed delivered a with recurring revenue models. Some will also thrive,
in a tax-ecient way, and we look forward to Titan
loss in 2022. The decline in Titan’s NAV is, of course, as many tech-enabled companies will look to take
continuing to do so in the coming year. I would like to
disappointing. Our accounting policy is to value Titan’s advantage of the increased willingness to adopt new
conclude by thanking both the Board and the Octopus
unquoted companies in line with the International technologies to navigate the changing landscape.
team on behalf of all shareholders for their hard work.
Private Equity and Venture Capital Guidelines, which Great companies will continue to be established,
require an assessment of the fair value of each funded and grow in uncertain times.
investment at 31 December 2022. In some cases,
I am pleased to report that in the 12-month period,
valuations have been adjusted downwards to reﬂect
Titan completed four proﬁtable disposals (three full
Tom Leader
both the tougher conditions and lower market
exits and one partial), including Glofox being acquired
Chair
comparables, as this inﬂuences what an acquirer
by ABC Fitness Solutions, representing a 3x return on
might deem a fair price to pay for a business in the 24 April 2023
Titan’s initial investment, and Digital Shadows being
current climate.
sold to ReliaQuest for $160 million. Collectively, the four
In other cases, a decreased valuation will reﬂect a companies received investment of £22 million from the
portfolio company’s speciﬁc performance, and we Company and the combined realised consideration
believe that, in the short term, we may unfortunately totalled £48 million (in cash, shares and/or deferred
see more companies fail – they are operating under amounts). More can be read about these disposals in
more dicult circumstances, targets set at the point the Portfolio Manager’s Review on page 25.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 5
Governance FinancialsStrategic report
## Titan’s objectives
Invest in pioneering companies
1
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
2
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
3
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
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 6
Governance FinancialsStrategic report
## How Titan works
## Titan looks to invest in companies with talented
## entrepreneurs and management teams, world-changing
## ideas and enormous market opportunities.
Titan is the largest VCT in the market, with over Creating a brand-new market, or disrupting an
£1 billion of funds under management and a diverse existing one, doesn’t happen overnight. Titan’s
portfolio of over 125 companies. Titan is managed by typical investment horizon is ﬁve to ten years, and an
the investment team, called Octopus Ventures, and early-stage company will often need several rounds
has a proud history of backing some of the UK’s most of funding as it grows. That’s why entrepreneurs want
successful entrepreneurs including early investments to partner with investors who can support them at
in Depop, WaveOptics, Zoopla Property Group and every stage throughout their journey. It is thanks to
ManyPets. Octopus Ventures continues to seek out shareholder support that Titan can do this.
and back companies with the potential to become
An important feature of investing in early-stage
generation-deﬁning companies.
companies is that there’s no guarantee they will
Titan’s success can be attributed to three things: be successful or deliver a return on the investment.
The team recognise that smaller companies, on average,
• access to a wide range of exciting investment
have a higher failure rate than companies listed on
opportunities;
the main market of the London Stock Exchange.
• being in a strong position to back winners through
To mitigate the risks, investments are made across a
multiple investment rounds; and
range of sectors, geographies and investment stages
• the team at Octopus Ventures has the resources and
to oer diversiﬁcation across Titan’s portfolio. The team
experience to provide practical support and guidance
target a 20% initial equity stake in a company, and
to the entrepreneurs we back to increase the chances
then can invest further when agreed milestones have
of success.
been achieved, both of which oer the opportunity to
Octopus Ventures’ skilled and experienced team are enhance the return for Titan.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 7
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## How Titan works continued
### Spotlight on supporting portfolio companies
## The Octopus Ventures People and Talent team Portfolio company testimonial
## 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
The best entrepreneurs are selective about accepting investment, so it’s important to companies, so they’re great at relaying ﬁrst-hand
have a good reputation for adding value beyond the ﬁnance that can be provided. experiences.”
The Octopus Ventures team work with the entrepreneurs they back by holding
workshops on strategy, advising on sales and marketing plans, and providing Richard Murray
connections to other companies which can help their businesses grow. The quality Co-founder and Chief Executive Ocer
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 8
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## How Titan works continued
## Some of the support and services oered to portfolio companies:
Access to Partnership Platform of
Coaching
Octopus with Harley templates and
hub
Giving Therapy resources
Octopus Giving is Octopus’ charitable Leaders derive great value from working Oering mental health support from This makes information accessible to all
foundation which now supports Titan’s with a coach, so on the hub there is access professional therapists to all of Titan’s founders, ranging from environmental
portfolio, oering matched funding for to a dedicated and vetted group of coaches portfolio company founders to help to parental leave policy templates, to
charity fundraising, volunteer sessions with who specialise in working with founders. support them to perform at their best, tips on how to design an organisational
Octopus’ charity partners and dedicated The hub is designed to remove the common not just at times of crises, but to be structure.
support and advice for portfolio companies issues which impede founders, including not instrumental in enabling them to achieve
to establish their own charity foundation. knowing where to ﬁnd a great coach and not their full potential in all areas of life.
understanding what makes a great coach.
Carbon Operating
Candidate
management consultant Community
database
tool network
Aimed at connecting Titan’s early-stage All portfolio companies are provided A network made up of experts who Connecting one of the largest venture
portfolio with candidates in the market access to a complimentary carbon are focused on working with start capital communities in Europe for
to support their recruitment objectives. management tool to help inform their ups. These consultants can support continued support and shared learning.
green development and carbon footprint. portfolio companies on project work, ﬁll
a temporary role or work part time with
a portfolio company.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 9
Strategic report Governance Financials
## How Titan works continued
### Our investment focus
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.
## Fintech
### 3%
### 3% Backing pioneers who seek to vastly improve society’s
ability to exchange and allocate ﬁnancial resources
### 28% and risk.
### 18%
## 31 28%
portfolio companies of portfolio companies
## Portfolio value
by value
## by investment
## focus (%) Portfolio company examples
### 15%
### 15%
### 18%
Fintech Health B2B software Climate
Deep tech Consumer Bio
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## How Titan works continued
### Our investment focus continued
## Health ConsumerDeep tech
Focusing on the tools and technologies that will power Backing pioneers with the outrageous ambition to Backing the innovators transforming the everyday in
the next industrial revolution. These include quantum transform the face of health and help us all live better how we live, work, travel, play, rest and recuperate.
computing, robotics and drones, sensory human for longer.
augmentation and 3D printing.

| 25 15% |  | 21 18% |  | 23 15% |  |
| --- | --- | --- | --- | --- | --- |
| portfolio companies of portfolio companies |  | portfolio companies of portfolio companies |  | portfolio companies of portfolio companies |  |
|  | by value |  | by value |  | by value |

Portfolio company examplesPortfolio company examplesPortfolio company examples
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 11
Strategic report Governance Financials
## How Titan works continued
### Our investment focus continued
## B2B software Bio Climate
Backing outstanding teams with proven, scalable Bioscience PHDs, former operators and spinout Backing the people and businesses that are powering
business models and excellent execution capabilities. specialists investing in biotech and techbio trailblazers planet-friendly progress by creating a circular economy,
in sectors from therapeutics to energy and creating a decarbonising global energy systems and infrastructure,
bioscience-led revolution. reducing energy consumption, greening ﬁnance,
protecting and developing ecosystems and erasing our
historical footprint through carbon removal technologies.

| 12 18% |  | 5 3% |  | 11 3% |  |
| --- | --- | --- | --- | --- | --- |
| portfolio companies of portfolio companies |  | portfolio companies of portfolio companies |  | portfolio companies of portfolio companies |  |
|  | by value |  | by value |  | by value |

Portfolio company examplesPortfolio company examplesPortfolio company examples
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 12
Governance FinancialsStrategic report
## How Titan works continued
### Investment strategy
## What and who Titan invests in: As an investment team, this means:
### 1 Talented and
### ambitious teams
### 2 Big market
## 25+ £1-10m 20%
### opportunity

|  |  | new early-stage | initial investment | targeted initial |
| --- | --- | --- | --- | --- |
|  |  | investments per year | from Titan | equity stake |
| 3 | Innovative |  |  |  |

### technology
### 4 Rapid pace
### of growth

| 10x+ | Invest |
| --- | --- |
| return | further |
| targeted on initial | where we can |
| investment | enhance returns |

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 13Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 13
Strategic report Governance Financials
## How Titan works continued
### What’s in a share
## 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 Top 20
its liabilities. The NAV is comprised of dierent elements,
### 46% The value of the top 20 investments as
as shown in the diagram. 79% is derived from the value
at 31 December 2022
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 Other investments
there is always cash available for funding companies. Value of remaining portfolio
### 33%
The remaining 12% of the value is corporate bonds, investments as at 31 December 2022
## NAV
net creditors and debtors.
## breakdown
Cash
### 9% Value of cash in bank and money
market funds
Other
### 12% Value of corporate bond portfolio,
Read more in the
debtors less creditors
Financials section on
pages 86 to 90.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 14
Strategic report Governance Financials
## How Titan works continued
### Creating value
## How Titan looks to create value for shareholders
What makes Titan dierent What the Octopus Ventures team do
How cash is managed
1 How Octopus Ventures ﬁnds portfolio companies
Read more > page 21
1. Active network management and deal monitoring
The Octopus Ventures team 2. Proprietary technology used to support deal sourcing
One of Europe’s most experienced investment teams with 3. 2,800+ opportunities reviewed
35 investment professionals focusing on Titan.
4. 290+ preliminary meetings
5. 25+ new investments per year
How Titan’s portfolio companies
Scale 2 Ongoing support
are supported along the journey
Total assets under management (AUM) of over £1 billion, The Octopus Ventures team work with the portfolio
Read more > page 8
making Titan the largest VCT in the UK (as at 31 December companies it backs to make their success more likely,
2022). whether that’s taking a board seat, helping them
expand overseas or introducing them to the dedicated
People and Talent team.
An established and diversiﬁed portfolio

| A portfolio of over 125 early-stage, high-growth, |  |  | Why responsible investment |
| --- | --- | --- | --- |
|  | 3 | Mitigating risk |  |
| tech-enabled companies operating across a wide variety |  |  | matters |

Titan looks to mitigate risk through building a portfolio
of industries. Read more > page 39
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 15
Strategic report Governance Financials
## How Titan works continued
### Measuring our performance
## 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.
The Board has identiﬁed eight key performance
### 1 NAV per share;
measures to assess Titan’s success in meeting these
objectives. Some of these are classiﬁed as alternative
### performance measures (APMs) in line with Financial 2 Total return per share (APM);
Reporting Council (FRC) guidance. The Glossary of
Terms on page 115 has further details:

| 3 | Dividends per share paid in the year; |
| --- | --- |
| 4 | Total ongoing charges (APM); |
| 5 | Qualifying % under VCT rules (APM); |
| 6 | Distributable reserves; |
| 7 | Cash and cash equivalents; and |
| 8 | Sustainability % of Titan (APM). |

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Strategic report Governance Financials
## How Titan works continued
### Measuring our performance continued
1 NAV per share 2 Total return per share (APM)
The NAV per share of Titan is the sum of the underlying assets less the liabilities Total return per share is calculated as movement in NAV per share in the period plus
of Titan, divided by the total number of shares in issue. Over the long-term, dividends paid in the period, divided by the NAV per share at the beginning of the
Titan’s target is to maintain a NAV per share of at least 90p after the payment period. Total return on the NAV per share enables shareholders to evaluate more
of dividends. 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.
2021 2021
2020
2020
## 105.7p 19.7p
2022 2022
## 97.0p
## 6.8p

| 76.9p |  | -23.8p |  |
| --- | --- | --- | --- |
|  | 2022 change |  | 2022 change |
|  | -27.2% |  | -22.5% |

Performance over the year Performance over the year
The NAV per share has decreased from last year’s value of 105.7p to 76.9p. We As previously considered, the NAV per share has decreased from last year’s value of
recognise that it is a long-term objective to maintain a NAV per share of at least 105.7p to 76.9p. Adding back the 5p of dividends paid in the year, this is a decrease
90p after the payment of dividends, and the Company is not achieving this of 23.8p or 22.5%. The Octopus Ventures team are working to improve total return
currently. The Octopus Ventures team are working to increase the NAV per share per share. This decrease is mainly driven by a downward valuation movement in the
back above 90p through continued growth in the underlying portfolio, and the portfolio, as detailed in the Portfolio Manager’s Review on page 24.
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.
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Strategic report Governance Financials
## How Titan works continued
### Measuring our performance continued
3 Dividends per share paid in the year 4 Total ongoing charges (APM)
Titan has a target of paying annual tax-free dividends of 5p per share, with the The ongoing charges ratio has been calculated using the AIC recommended
potential to pay special dividends when there are signiﬁcant gains from the sale methodology and excludes irrecoverable VAT, exceptional costs, trail commission
of portfolio holdings. and performance fees. Titan aims for this to be 2% or lower. This is capped at 2.5%.
2021 2022
2021
## 11p 2.2%
2020
## 2.0%
## 1.9%

| 2020 | 2022 |  |  |
| --- | --- | --- | --- |
|  |  | 2022 change | 2022 change |
| 5p | 5p |  |  |
|  |  | -54.5% | +0.2% |

Performance over the year Performance over the year
Despite the decline in Titan’s NAV, we are pleased that ordinary dividends of 5p were The ongoing charges are in line with last year, as a percentage of average net
paid in the year in line with the dividend policy of a regular annual dividend of 5p per assets, and below the cap of 2.5%. The slight increase is driven by the fall in net
annum. The decrease since 2021 is due to the special dividend of 6p being declared assets in 2022.
in September 2021 and paid on 20 December 2021.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 18
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Governance

Financials

# How Titan works continued

Measuring our performance continued

## 1 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.

![img-2.jpeg](img-2.jpeg)

### 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.

## 2 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 sufficient reserves to continue to fund dividends and buybacks. The table shows the amount available under the Companies Act as at 31 December 2022.

![img-3.jpeg](img-3.jpeg)

### 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 sufficient reserves under the VCT regulations to fund forecast dividends and buybacks, and this is reviewed ahead of any distribution from Titan.

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Financials

# How Titan works continued

Measuring our performance continued

## 1 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 sufficient cash to fund investments, dividends, buybacks, management fees, other running costs and a performance fee, when applicable, over a 12-month period.

![img-4.jpeg](img-4.jpeg)

### 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.

## 4 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.

![img-5.jpeg](img-5.jpeg)

### 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.

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20
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## How Titan works continued
### Creating value for the long term
### 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.
500
•]
400 381
91
(50)
62
(41)
300 (23)
(64)
(20)
(105)
200
179
(52)
100
£m
0

| Cash as at |  | Disposal | Dividends Buybacks Management |  | Performance |  | Other | Fundraise |  | New | Follow-on | Cash as at |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 31 December |  | proceeds |  | fee |  | fee | costs |  | investments |  | investments | 31 December |  |
|  | 2021 |  |  |  |  |  |  |  |  |  |  |  | 2022 |

Cash inﬂows Cash outﬂows
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 21
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## How Titan works continued
### Creating value for the long term continued
### Titan Total Value growth
The following graph shows the increases and decreases contributing to the movement in the NAV per share during the year.
140
120
4.5
105.7
100
0.5 81.9
76.9
80 (26.7)
(1.6) (0.5)
(5.0)
60
40
20
0

|  |  | Unrealised | Unrealised | Management |  | Other | Foreign | NAV | DividendsNAV as at | NAV as at |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 31 December |  | valuation | valuation |  | fee | costs | exchange | before |  | 31 December |  |
|  | 2021 | uplifts | downgrades |  |  |  | translation | dividends |  |  | 2022 |

Dividend Reinvestment Scheme (DRIS)
NAV per share (p)
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 22
NAV per share Increase in NAV per share Decrease in NAV per share
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Financials

# Portfolio Manager's review

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.

## 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.

![img-6.jpeg](img-6.jpeg)

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## Portfolio Manager’s review continued
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 Period ended Year ended Year ended Year ended
1

|  | 31 October 2018 | 31 December 2019 | 31 December 2020 | 31 December 2021 | 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 24
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## 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.
1

|  |  | Year ended |  | Period | ended |  | Year ended |  | Year ended |  | Year ended |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 31 October 2018 |  | 31 December 2019 |  |  | 31 December 2020 |  | 31 December 2021 |  | 31 December 2022 Total |  |  |
| Dividends (£'000) 24,178 33,187 46,037 101,976 49,596 |  |  |  |  |  |  |  |  |  |  |  | 254,974 |

2
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 25
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## 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 Deep tech Health Consumer
• Cobee is a fully digital solution • Touchlab has developed an electronic • Vira is a digital health company • Onin is a consumer app fusing
that simpliﬁes employee beneﬁts skin that can provide robots with the focused on relief for the central pain calendar and communications under
management. Using the app and sense of touch; and points of menopause; and a single interface; and
Cobee Visa card, employees have • Unlikely AI is developing an Artiﬁcial • Little Journey has created a digital • Partly has built a global platform and
access to a range of beneﬁts; and Intelligence (AI) platform capable of support platform that prepares, protocol for vehicle parts.
• Sidekick oers an alternative providing intelligence in a manner informs and provides support for a
investment platform that gives retail similar to the brain. child’s healthcare procedures and
investors access to actively managed clinical trials.
portfolios.

| B2B software |  | Bio |  | Climate |  |
| --- | --- | --- | --- | --- | --- |
| • Velaris is an operating system for |  | • Bioﬁdelity has developed technology |  | • Foodsteps oers a platform that |  |
|  | modern customer success teams; and |  | that enables rapid, precise genomic |  | makes it quick and aordable to |
| • Contingent oers a real-time, supply |  |  | proﬁling and stratiﬁcation of cancer |  | calculate environmental impacts |
|  | chain visibility platform applicable |  | able to be performed on existing |  | across large and complex food |
|  | across industries. |  | instruments; and |  | operations; and |
|  |  | • Inﬁnitopes has built an antigen |  | • Kita is a carbon credit insurance |  |
|  |  |  | discovery platform to develop |  | company. |

cancer vaccines that provide better
treatment outcomes.
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## Portfolio Manager’s review continued
### Q How do we think about Q When do we start to think
### exiting our positions? about exits?
In a venture capital portfolio, a relatively small We seek to invest in pioneering entrepreneurs who
A A
number of investments generate a signiﬁcant are looking to change an industry for the better.
proportion of fund performance. As a result, Not only is that an ambitious objective, but it is
## Q&A
we have a natural tension between ensuring also one which often requires patience. As such, we
we facilitate the best performing companies to understand that for our best performing companies,
reach their potential (including being prepared we may be shareholders for ten years or more.
to give them sucient time to achieve this), and Despite that, understanding who the likely acquirers
maintaining good portfolio management discipline are from the outset and throughout the holding
to make sure realised proceeds materially contribute period can help inform important strategic decisions
towards ﬁnancing the Company’s ongoing running which contribute to value creation for shareholders.
costs and meeting its dividends targets.
As the saying goes, “companies are bought,
Private markets are by deﬁnition illiquid, and as a not sold”. In practice, this means that the most
result, the opportunities to sell all or some of our impactful exits we have completed are from
holding in a particular company are intermittent. We companies which have been successful in changing
ﬁnd there are opportunities for partial realisations their industry, either by becoming the new
as part of later stage funding rounds, however most dominant player or by ﬁlling a strategic gap in an
realisations will be part of a full exit process, usually incumbent’s oering. Many of the most successful
to a strategic buyer or private equity ﬁrm. We work companies are built with the intention of remaining
closely with each portfolio company to understand independent, but believe it is healthy to maintain
and optimise its cash runway, with the goal of them relationships with key potential acquirers. They
maintaining ﬂexibility over exit timing with the best are often commercial partners before becoming
interests of its shareholders in mind. acquirers, and as such this activity can be highly
productive.
Our portfolio is large and diverse, and although we
aim to take a systematic approach to supporting We know not all companies will be as successful as
Malcolm Ferguson
our portfolio, we know there is no deﬁnitive formula we hope at the time of the initial investment. We
Partner and Titan Lead Fund Manager
for success, especially when working across very therefore seek to realise investments in companies
dierent industries and stages. Often wider which are underperforming and unlikely to generate
macroeconomic conditions can inﬂuence exits as a meaningful return. It can also help to ﬁnd a
much as factors within a company’s control. We “soft landing” for the company’s employees where
also recognise it is not always the right time to the alternative may be placing the business into
exit a position and instead continue to support administration. Although generally not meaningful
the company, being alert to opportunities as they to investor returns, our behaviour in these scenarios
arise, and helping to proactively create these is important to cement our reputation as a
opportunities where we can through our network. founder-friendly investor who entrepreneurs seek
to partner with on subsequent projects.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 27
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## Portfolio Manager’s review continued
### Q How do we work with Q Who are typically buyers for
### portfolio company boards? our portfolio companies?
We believe that it is important to be an active There are a variety of exit options for our portfolio
A A
and supportive investor, so we typically appoint companies. For the largest and most successful
a non-executive director or observer to the companies, these may look to list on a public
board of our portfolio companies. This allows us stock exchange. There have only been a few of
to oer ongoing support at the top level of the these in Titan’s history so far.
business, be involved in key decisions and allows
More common are sales to strategic acquirers
the opportunity for us to share any expertise and
and private equity ﬁrms. Titan VCT is proud to
insights that we may have.
have sold companies to many of the largest
Even very experienced founders may only sell a global companies, including Microsoft, Google,
business once or twice in their career, whereas Amazon, Nestlé and Unilever.
as investors, we may be involved in ﬁve to ten
Finally, we can partially realise our shareholdings
exits each year. We therefore look to support
in later-stage funding rounds, where existing
our portfolio companies by sharing the learnings
shareholders can sell a proportion of their
and experience gathered across our team,
shareholding to accommodate new later-stage
all with the objective of obtaining the best
investors to the round.
outcome for our investors and shareholders in
Though, as already stated, not all exits result in
the company overall.
a proﬁtable outcome.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 28
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## Portfolio Manager’s review continued
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.
### Valuation
### Valuation
### methodology
### methodology
### – by number of
### – by value
### companies
### 40.9% 4.7%54.4% 19.4% 23.2% 6.2%51.2%
Multiples External Scenario Multiples Write oExternal Scenario
price analysis price analysis
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 29
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# Portfolio Manager's review continued

# top 20

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

|  Portfolio: |   | Investment cost: | Total valuation including cost:  |
| --- | --- | --- | --- |
|  1 | Mgmt/Peti | 9,978 | 102,729  |
|  2 | Amplence | 13,634 | 38,786  |
|  3 | Permutive | 18,994 | 38,310  |
|  4 | Quit Genius | 12,890 | 33,581  |
|  5 | Make+Me | 11,500 | 32,933  |
|  6 | Debt | 10,298 | 25,174  |
|  7 | Big Health | 12,855 | 22,220  |
|  8 | vHive | 8,020 | 19,766  |
|  9 | token | 12,608 | 18,366  |
|  10 | Sales+ | 11,496 | 17,385  |

All values in £'000.

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

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## Portfolio Manager’s review continued

|  | Investment | Total valuation |  |
| --- | --- | --- | --- |
|  | cost:Portfolio: | including cost: |  |
| 11 | 7,724 |  | 15,940 |
| 12 | 7,206 14,518 |  |  |
| 13 | 11,510 13,668 |  |  |
| 14 | 7,32 5 13,393 |  |  |
| 15 | 6,417 13,338 |  |  |
| 16 | 5,475 12,698 |  |  |
| 17 | 7,128 12,257 |  |  |
| 18 | 4,190 11,992 |  |  |
| 19 | 9,491 10,486 |  |  |
| 20 | 9,102 10,451 |  |  |

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## Portfolio Manager’s review continued
### Portfolio case studies
www.permutive.com www.orbex.space
### Permutive is a privacy-compliant advertising Orbex is a UK-based private, low-cost rocket
### technology company that helps publishers and company, serving the needs of the small satellite
### advertisers to strengthen and action their valuable industry.
### data for targeting, all while keeping it safe.
Its Audience Platform uses on-device technology It has developed one of the world’s most
## £40.4 million
## to access and process data quickly, accurately 70% advanced, low carbon, high performance
and anonymously. This enables a privacy-safe microlauncher rockets, with the aim of
raised in Series C
The partner
way of learning about consumers’ behaviours launching the ﬁrst vertical rocket from UK soil
funding round in
of choice for
online, without compromising data security or and creating the ﬁrst European commercial
October 2022
privacy-compliance, launch vehicle business.
identifying them.
targeting more than
The company is the ﬁrst to use bio-propane as
For many companies, General Data Protection

|  | 70% of the UK’s top | a fuel, which allows the rocket to reduce carbon |  |
| --- | --- | --- | --- |
| Regulation (GDPR) made handling consumer |  |  | May 2022 |
|  | publishers | emissions signiﬁcantly compared to other similarly |  |

information complicated and opened up
sized rockets. A study by the University of Exeter Orbex Prime rocket
regulatory risk. Many existing platforms were
showed that a single launch of the Orbex Prime unveiled – the ﬁrst
unable to adapt to the new rules, creating a
Customers include:
rocket will produce 96% lower carbon emissions
gap in the market. The platform uses a form of full-stack rocket to
than comparable space launch systems using
edge computing, keeping user data safe, and • The Times
be revealed in Europe
fossil fuels. The use of biofuel has been made
minimising latency which allows for immediate
• The Economist
possible by Orbex’s innovative approaches
insights and targeting.
• BuzzFeed to design.
Octopus investment dates:
• Condé Nast Octopus investment dates:
Initial investment: May 2015
Initial investment: December 2020
Latest investment: October 2021
Latest investment: October 2022
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 32
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## Portfolio Manager’s review continued
### Portfolio case studies continued
www.skinandme.com www.tatum.com
### Skin+Me oers direct-to-consumer, Tatum is simplifying complex blockchain
### prescription-strength personalised skin care operations for app developers.
### treatments. Skin+Me combines medical expertise
### and technology to oer personalised treatment
### plans on a subscription basis.
Blockchain is the underlying technology that
## enables the existence of cryptoassets (such as >100,000
Through an online consultation, customers
Bitcoin and Ethereum) and non-fungible tokens
## $17.2 billion customers, adding
are prescribed a bespoke treatment plan and
(NFTs). All blockchains operate dierently,

| presented with a fully customised skincare routine, |  |  | over 7,000 new ones |
| --- | --- | --- | --- |
|  | The global personalised | using dierent mechanisms, coding languages |  |
| without requiring a trip to the dermatologist. |  |  | per month |
|  | skincare market | and privacy measures, making it particularly |  |
| The momentum behind this growth is largely |  | challenging to build across multiple blockchains. |  |

was valued at
driven by consumers dismissing the one-size-ﬁts-all Tatum’s blockchain development platform allows
$17.2 billion last year
## developers to connect various blockchains and $592 billion
approach. There is also an increased awareness
and is expected to hit blockchain services through a single integration.
of sustainability amongst consumers, whereby
value of the
1
Skin+Me strive to challenge industry standards. $38.9 billion in 2030 It simpliﬁes operational processes, reduces product
global blockchain

| By using recyclable packaging and oering |  | development time for applications by up to 90% |  |
| --- | --- | --- | --- |
| personalised solutions that are made-to-order, |  | and bridges the skills gap that exists because of | technology market |
| it means none goes to waste. | 4.5/5 stars | the relative lack of blockchain developers in the | in 2021 |

market.
Octopus investment dates: on Trustpilot (from
Octopus investment dates:
Initial investment: September 2019 over 6,000 reviews)
Latest investment: December 2022 Initial investment: November 2021
as of 1 April 2023
Latest investment: August 2022
1. Global personalised skincare
market worth $38.9 billion
by 2030, InsightAce Analytic
report, January 2022.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 33
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## Portfolio Manager’s review continued
### Portfolio case studies continued
www.manypets.com www.vitessepsp.com

| ManyPets was founded in 2012 to provide |  | Vitesse is a market-leading settlement and |  |
| --- | --- | --- | --- |
| a transparent and digital-ﬁrst insurance |  | liquidity management platform to hold funds |  |
| experience, and in 2017 it launched its own |  | and deliver international payments globally, |  |
| dog and cat insurance policies. |  | using domestic, in-country processing. |  |
| It has become one of the fastest-growing |  | With a focus on serving the global insurance |  |
| insurance businesses in Europe by listening to pet | >600,000 | market, the company already includes some of | >£8 billion |
| owners and solving their insurance pain points. |  | the world’s largest insurers as customers. In 2022, |  |
|  | pets covered globally |  | settled globally to |
| It was the ﬁrst company to create a product for |  | the company announced a strategic deal with |  |

over 100 countries
pets with pre-existing conditions and partner with Lloyd’s of London to improve capital eciency
a video vet service. Its tech allows it to automate across the insurance marketplace and to improve and payment types
## 85%
payments for a signiﬁcant proportion of claims the speed of claims payment. In the same year,
and ﬁne tune pricing to ensure a sustainable loss Covering 85% of the Vitesse won the best international payments,
## ratio. In 2019, it launched in Sweden and then in remittance or use of FX award at Pay360 Awards. >70%
pet insurance market
2021 expanded into the US. It has moved further
in the US completed
into the pet health space by acquiring a pet
transactions for the
medication subscription business. Octopus investment dates:
Initial investment: June 2020 London insurance
Octopus investment dates:
Latest investment: January 2022 market
Initial investment: October 2016
Latest investment: April 2021
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 34
Strategic report Governance Financials
## Portfolio Manager’s review continued
1
### Top 10 investments in detail
1 2 3 4
ManyPets Amplience Permutive Quit Genius
www.manypets.com www.amplience.com www.permutive.com www.quitgenius.com

| An award-winning insurtech company | Amplience is a leading headless | Permutive’s publisher data platform |  | A digital health solution for managing |  |
| --- | --- | --- | --- | --- | --- |
| with a speciﬁc focus on providing | content management system, which | gives its customers an in-the-moment |  | substance use disorders. |  |
| better pet insurance for everyone. | powers retailers’ digital channels. | view of everyone on their site. |  |  |  |
| Initial investment October 2016 | Initial investment December 2010 | Initial investment May 2015 |  | Initial investment January 2020 |  |
| date: | date: | date: |  | date: |  |
| Investment cost: £9.9m | Investment cost: £13.6m | Investment cost: £18.9m |  | Investment cost: £12.8m |  |
| (2021: £9.9m) | (2021: £13.6m) | (2021: £18.9m) |  | (2021: £12.8m) |  |
| Valuation: £102.7m | Valuation: £38.7m | Valuation: £38.5m |  | Valuation: £33.5m |  |
| (2021: £146.9m) | (2021: £46.6m) | (2021: £49.5m) |  | (2021: £29.8m) |  |
| Last submitted 31 March 2022 | Last submitted 30 June 2022 | Last submitted Not available |  | Last submitted Not available |  |
|  |  |  | 2 |  | 2 |
| accounts: | accounts: | accounts | : | accounts | : |
| Turnover: £42.4m | Turnover: £13.4m | Turnover: Not available |  | Turnover: Not available |  |
| (2021: £29.8m) | (2021: £11.7m) |  |  |  |  |
|  |  | Loss before tax: Not available |  | Loss before tax: Not available |  |
| Loss before tax: £(31.9)m | Loss before tax: £(7.8)m |  |  |  |  |
|  |  | Net assets: Not available |  | Net assets: Not available |  |
| (2021: £(22.3)m) | (2021: £(2.0)m) |  |  |  |  |
|  |  | Valuation Revenue multiple |  | Valuation Last round |  |
| Net assets: £12.6m | Net assets: £(12.1)m |  |  |  |  |
|  |  | methodology: |  | methodology: |  |
| (2021: £38.1m) | (2021: £(6.8)m) |  |  |  |  |
| Valuation Revenue multiple | Valuation Last round |  |  |  |  |
| methodology: | methodology: |  |  |  |  |

1. These are numbers per latest public ﬁlings. Latest ﬁgures have not been disclosed.
2. Information not publicly available.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 35
Strategic report Governance Financials
## Portfolio Manager’s review continued
1
### Top 10 investments in detail continued
5 6 7 8
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, | Orbex designs and constructs small, | A digital medicine company delivering | vHive enables businesses to deploy |
| --- | --- | --- | --- |
| personalised skincare. | orbital rockets to service the growing | cognitive behavioural therapy to | autonomous drone hives to digitise their |
|  | small satellite launch market. | suerers of mental health problems. | ﬁeld assets and operations. |
| Initial investment September 2019 | Initial investment December 2020 | Initial investment June 2016 | Initial investment May 2019 |
| date: | date: | date: | date: |
| Investment cost: £11.5m | Investment cost: £10.2m | Investment cost: £12.8m | Investment cost: £8.0m |
| (2021: £4.0m) | (2021: £4.5m) | (2021: £12.8m) | (2021: £3.9m) |
| Valuation: £32.9m | Valuation: £25.1m | Valuation: £22.2m | Valuation: £19.7m |
| (2021: £17. 5 m) | (2021: £10.3m) | (2021: £26.4m) | (2021: £13.7m) |
| Last submitted 31 August 2021 | Last submitted 31 December 2021 | Last submitted 31 December 2021 | Last submitted 31 December 2021 |
| accounts: | accounts: | accounts: | accounts: |
| Turnover: Not available | Consolidated turnover: $0.6m | Consolidated $20.3m | Consolidated $2.4m |
|  | (2021: $0.9m) | turnover: (2021: $13.4m) | turnover: (2021: $0.8m) |

Loss before tax: £(5.5)m
(2021: £(2.3)m) Consolidated loss $(5.9)m Consolidated $(12.9)m Consolidated $(3.0)m
before tax: (2021: $(0.8)m) loss before tax: (2021: $(13.5)m) loss before tax: (2021: £(2.8)m)
Net assets: £0.3m
(2021: £5.8m) Consolidated $12.3m Consolidated $79.6m Consolidated $2.3m
net assets: (2021: $16.9m) net assets: (2021: $23.9m) net assets: (2021: $4.5m)
Valuation Last round
methodology: Valuation Last round Valuation Revenue multiple Valuation Last round
methodology: methodology: methodology:
1. These are numbers per latest public ﬁlings. Latest ﬁgures have not been disclosed.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 36
Strategic report Governance Financials
## Portfolio Manager’s review continued
1
### Top 10 investments in detail continued
9 10
Token Sofar Sounds Limited
www.token.io www.sofarsounds.com
A leading Open Banking solution, Sofar Sounds organises small, intimate
focused on payments. music performances in unique spaces
across the globe.

| Initial investment March 2017 | Initial investment January 2015 |
| --- | --- |
| date: | date: |
| Investment cost: £12.6m | Investment cost: £11.4m |
| (2021: £8.4m) | (2021: £11.4m) |
| Valuation: £18.3m | Valuation: £17. 3 m |
| (2021: £11.1m) | (2021: £15.3m) |
| Last submitted 31 December 2021 | Last submitted 31 December 2021 |
| group accounts: | group accounts: |
| Turnover: Not available | Consolidated $5.8m |

turnover: (2021: $2.8m)
Loss before tax: Not available
Consolidated loss $(11.8)m
Net assets: £0.5m
before tax: (2021: $(12.2)m)
(2021: £0.4m)
Consolidated $5.8m
Valuation Revenue multiple
net assets: (2021: $6.2m)
methodology:
Valuation Last round
methodology:
1. These are numbers per latest public ﬁlings. Latest ﬁgures have not been disclosed.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 37
Strategic report Governance Financials
## Portfolio Manager’s review continued
Outlook As well as these new investments, we can see that many The past 12 months have been a period of immense
Having enjoyed consistent growth since inception, with of Titan’s existing portfolio companies are maturing, change on a global scale, and Titan has understandably
especially strong performance over the three years to growing their customer base, winning new contracts, been aected by this. Looking ahead, we are conﬁdent
31 December 2021, the decline in Titan’s NAV is of course hiring new talent, and developing their technologies. that many portfolio companies have the potential to
disappointing. The headwinds we have encountered over So, although we are currently in a more challenging exit build upon their successes to date. We back businesses
the past 12 months have been particularly strong and we environment, when conditions improve in the future, we from a wide range of sectors, at dierent investment
have seen many existing issues intensify. Valuations of the believe there should be opportunities for companies to stages, and we think this breadth of scope will provide
portfolio companies are reﬂective of this environment. Titan’s take the next steps on their growth journey. Successful Titan with the opportunities it needs to succeed in the
unquoted portfolio companies are valued in accordance exits enable Titan to realise the growth a portfolio future and return to its previous growth trajectory.
with the IPEV valuation guidelines. This means we value the company has achieved over its investment lifespan.
portfolio at fair value, which is the price we expect people Please see page 27 where we answer some questions
would be willing to buy or sell an asset for, assuming they surrounding our exit process.
had all the information we have available; are knowledgeable
To be able to support portfolio companies in their
parties with no pre-existing relationship; and that the
ambition to change the world, we believe we should
transaction is carried out under the normal course of
be an active investor, oering more than just ﬁnancial
business. On top of this, several of Titan’s portfolio companies
support. You will have read about our in-house Talent
have been aected by the challenges the economic backdrop
### Months of cash
team and how they lend their expertise and knowledge
has created, with costs increasing and consumer conﬁdence
### to support our companies on pages 8 and 9. We work runway available
and spending declining. As a result, valuations have been
to equip the management teams with the platforms
reappraised in line with all these factors.
### to Titan’s portfolio
and tools they need to succeed. It is typical for a
Despite this decline in performance, we are reassured by the
### member of the Octopus Ventures team to join the companies – %
continued fundraising success of our portfolio companies
Board of a portfolio company to provide ongoing
### portfolio NAV
as well as the resilience, ambition and drive displayed by
support. We believe that the management team are the
extraordinary management teams behind them. The pie
key determining factor for a company’s success, and
chart shows the percentage split across Titan’s NAV of the
this support is an investment in the future, designed
cash runway available to its portfolio companies. Almost 40%
to bolster resilience so that our portfolio companies
of the portfolio is not expected to require further funding,
can weather periods of disruption, and to help them
and almost 85% has cash runway of at least 12 months
develop the culture and capabilities they need to drive
– this should ensure that the portfolio is well capitalised
ongoing success. And it sets Octopus Ventures apart,
to navigate the challenging fundraising environment. The
oering us a competitive advantage in winning the best
3% 14% 18% 27% 38%
strong deployment rate over the past 12 months, with 31
investment opportunities and proving our value beyond
new investments completing, shows us that exciting and
just investment.
novel businesses are still founded in turbulent times. These
<6 6-12 12-18 >18 No
investments have been made into early-stage, tech-enabled
months months months months funding
businesses with high-growth potential. These types of requirement
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 38
Strategic report Governance Financials
## Operating responsibly
Titan has a policy in place, which is set by the Board, to make
## The Directors consider responsible investment
sure Octopus Ventures considers responsible investment within
## investment decisions in relation to Octopus Titan VCT. to be important and believe Titan’s portfolio
## companies should implement a framework to
## The policy ensures Octopus Ventures follows a three-step approach support best practices, which in turn can help
to responsible investment which is aligned with Octopus Group’s
## create long-term value in the business.
responsible investment policy.
Please view the Company’s policy here:
## octopusinvestments.com/titan-responsible-investment-policy/ e r i a l
## t i t
## a y
## M
of risks to
investments
## Octopus Ventures’ initiatives: Operating
### responsibly
## R
### Female diversity pledge: Greenhouse gases: framework
## e
By 2025, 30% of all new Octopus Ventures engage with
## s
## founder pitches to the Octopus all portfolio companies on their n
## p
## o
## Ventures investment team greenhouse gases and give o i
## n s
must be businesses led or them access to appropriate
## s
## s i
co-led by a woman and by complimentary tools to support
## i

|  |  | b |  |  | M |
| --- | --- | --- | --- | --- | --- |
| 2027, this will increase to 50%. | their understanding of their |  | i |  |  |
|  |  |  | l i |  |  |
|  |  |  |  | t y |  |

carbon footprint.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 39
Strategic report Governance Financials
## Operating responsibly continued
## Materiality of risks
## Mission Responsibility
## to investments
Titan has a responsible investment policy to Titan’s mission is to invest in the ideas, industries Titan will not invest in any business whose
ensure environmental, social and governance and people that will change the world – backing activities or practices appear on the Octopus
risks of Titan’s underlying portfolio will be pioneering entrepreneurs building companies that Ventures Exclusion List, which includes sectors
considered during the investment process and are using technology to shape the future. Whilst such as tobacco, arms, fossil fuels, gambling and
any sustainability issues, that could impact the Titan doesn’t target speciﬁc sustainability goals or deforestation.
ﬁnancial performance of an investment, are objectives, Octopus Investments track the number,
The team make sure that all portfolio companies:
identiﬁed. To do this, a Responsible Investment amount invested and the value of companies in
• provide safe and healthy working conditions;
Tool is used which utilises guidance from the Titan’s portfolio that are aligned with Octopus
Sustainability Accounting Standards Board (SASB) Group’s three sustainable themes: building a • treat people fairly, irrespective of race, gender,
to help identify and manage any issues. sustainable planet, revitalising healthcare and nationality, disability, political or religious
empowering people. beliefs;
Once identiﬁed, the investment team consider
• do not accept bribes; and
the exposure to these risks and engage directly
with the portfolio companies to understand how • uphold high standards of business integrity at
appropriately they are managing the risks. Given all times.
the nature of these tech-enabled businesses, the Octopus Investments has created an Engagement
most material risks identiﬁed include data security, Tool which is sent to all of Titan’s portfolio
data privacy, and recruiting and managing a companies to help the Octopus Ventures
global, diverse and skilled workforce. 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 40
Strategic report Governance Financials
## Operating responsibly continued
## Responsible investment initiatives
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
October 2022
to diversity, equity and
March 2022 participated in
inclusion

| January 2021 |  | launched carbon | the British Business |
| --- | --- | --- | --- |
| becomes B Corp |  | management tool to | Bank “Alison Rose |
|  | certiﬁed | portfolio companies | Review of Female |

Entrepreneurship”
July 2022
February 2019 launched the annual
becomes a engagement survey to
2019 2021 2022
signatory to the the portfolio to collect
UNPRI key metrics
November 2021
June 2022
signed up to
announcement of
B Corp Climate
the Female diversity
Collective, committing
pledge – see page 39
to a 2030 net zero
target
September 2022
launched Octopus
Giving oer to the
Key:
Octopus Ventures
Octopus Investments actions portfolio
Octopus Ventures actions
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 41 Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 41
Strategic report Governance Financials
## 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
Impact and
Sustainability team
Sits within Octopus Investments
and works with Octopus Ventures
to implement responsible
investment processes, and provide
Octopus Investments training, tools and support around Octopus Ventures team Titan Board
disclosures and reporting. Accountable for the delivery Considers RI as an integrated
Day-to-day management of
Titan’s portfolio companies of the RI policies which form element of Titan’s investment
and oversight of investment part of the funds they manage. strategy, and oversight of
decisions is undertaken by Responsible investment climate-related risks and
Octopus Ventures and works therefore forms part of the opportunities forms part of
within Octopus Investments’ investment process. the existing risk management
governance structures. Responsible Investment process.
(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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 42
Strategic report Governance Financials
## Operating responsibly continued
Strategy Metrics and targets
Portfolio Titan invests in unquoted, early-stage businesses.
In contrast to later-stage, quoted businesses, there
With the transition to a lower carbon economy, the Impact
is limited readily available data on climate-related risks
and Sustainability team are taking ‘transition climate
and opportunities that impact the portfolio companies.
risks’ and ‘physical climate risks’ into consideration to
understand what could potentially be material to portfolio To understand the carbon emissions of Titan’s portfolio,
company ﬁnancial performance in the short, medium the Octopus Ventures team have taken steps to
and long term, and in both best (1.5ºC temperature measure the portfolio companies’ Scope 1 and 2
change) and worst case (4ºC temperature change) climate greenhouse gas (GHG) emissions by providing them
scenarios. Where these risks are identiﬁed as being relevant with access to a carbon measurement tool that will
to portfolio companies they will be addressed, for example: provide the companies with details of their carbon
footprint. Scope 1 emissions are those directly from
• energy management: future increases in energy prices
company-owned and controlled resources. Scope 2
relating to carbon taxes, carbon pricing or supply could
emissions are indirect emissions from the generation
impact costs and therefore proﬁtability. Recognising
of purchased energy from a utility provider. Scope 3
that every company can reduce their energy usage, the
emissions are the result of activities from assets not
Octopus Ventures team are working with the portfolio
owned or controlled by the reporting organisation,
companies to understand and reduce carbon emissions.
but that the organisation indirectly aects in its value
Titan
chain. Whilst Octopus supports portfolio companies in
Titan recognises the need to conduct its business,
measuring some Scope 3 emissions such as purchased
including investment decisions, in a manner that is
goods and services and business travel, this is an area
responsible to the environment wherever possible.
where it is looking to grow its capability to support the
Titan does not produce any reportable emissions as the
portfolio companies that are looking to measure their
fund management is outsourced to Octopus, with no
full scope.
physical assets or property held by Titan. As Titan has
While the ultimate goal is to reduce portfolio emissions
no employees or operations, it is not responsible for any
to minimise these risks, the immediate goal is to
direct emissions.
increase data coverage to 100% (currently 25% of Titan’s
Risk management portfolio companies have been measured) within the
The investment team use guidance from the next two years.
Sustainability Accounting Standards Board (SASB)
Current greenhouse gas emissions (tonnes CO e):
2
to identify climate-related risks. Where potential
• Scope 1: 102.13
material climate-related risks have been identiﬁed, the
investment team assess how well the risk is managed by • Scope 2: 201.74
the portfolio company. Where appropriate, this is raised
to the Investment Committee as part of the investment
process and is continually monitored.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 43
Strategic report Governance Financials
## Operating responsibly continued
Gender and diversity Bribery Act
Following the upcoming AGM, the Board of Directors will Octopus has introduced robust procedures, set out
comprise of two female and two male Non-Executive in the Anti-Bribery policy, to ensure full compliance
Directors with considerable experience of the VCT with the Bribery Act 2010 and to make sure that the
industry and investment in early-stage growth highest standards of professional ethical conduct are
companies. The gender and diversity of the constitution maintained. All employees and those working for, or on
of the Board is reviewed on an annual basis. behalf of, the ﬁrm are aware of their legal obligations
when conducting company business. This is done via
Human rights issues
an online learning platform with annual declarations.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 44
Strategic report Governance Financials
## Section 172(1) statement
This report sets out how the Directors have had regard The Board Matters reserved for the Board include, but are not
to promoting the success of Titan for the beneﬁt of its The Board adopts the 2019 AIC Code of Corporate limited to, all shareholder communication, the setting
stakeholders as a whole, and in making their decisions Governance which provides a framework for the of investment policy, investment of cash reserves,
to have regard to, but not limited to, a list of six governance of investment companies such as Titan. the raising of capital and the allotment and issue of
factors contained within this section of the Companies shares, the buy back of shares, dividend policy, Director
It is normal practice for Venture Capital Trusts to
Act 2006: appraisal and succession, ﬁnancial reporting, RIS
delegate authority for day-to-day management of the
announcements, compliance with UK Listing Authority
• the likely consequence of any decision in the Company to a Portfolio Manager, and to outsource
rules and FCA regulations.
long term; administration, accounting and company secretarial
• the interests of the Company’s employees; services. The Board then engages with the Portfolio Culture
Manager in setting, approving and overseeing the
• the need to foster the Company’s business The Directors seek to apply the ESG principles adopted
execution of the business strategy and related policies.
relationships with suppliers, customers and others; by Octopus Ventures and these values help to deﬁne the
At every Board meeting a review of ﬁnancial and culture and relationship with the investment team. There
• the impact of the Company’s operations on the
operational performance, as well as legal and is a general principle of openness and transparency in
community and the environment;
regulatory compliance, is undertaken. The Board also dealings between Octopus Ventures and the Directors,
• the desirability of the Company maintaining a
reviews other areas over the course of the ﬁnancial and clear policies covering, for instance, investment
reputation for high standards of business conduct;
year including Titan’s business strategy; key risks; process and conﬂicts, providing a clear operating
and
stakeholder-related matters; diversity and inclusivity; framework. Generally, the culture should contribute to
• the need to act fairly between members of the
environmental matters; corporate responsibility and the purpose of producing consistent returns over the
Company.
governance; compliance and legal matters. The Board long term and achieving the agreed KPIs, which will
Business strategy has set ﬁnancial KPIs relating to portfolio performance. deliver, most importantly, good returns to shareholders.
The success of Titan is driven by its investment policy The Board formally reviews the performance of the
and liquidity strategy which is set out in the Strategic Portfolio Manager, in relation to both investment
Report on page 55. The Portfolio Manager prepares a and non-investment services, on an annual basis.
detailed budget which is approved by the Board on an
The investment policy and investment process,
annual basis and reviewed regularly, and forms the basis
including the management of conﬂicts of interest
for Titan’s resource planning and deployment decisions.
and the allocations policy, have also been agreed and
When considering business strategy, the Board also documented.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 45
Strategic report Governance Financials
## Section 172(1) statement continued
Business ethics and governance As Titan is classiﬁed as a full-scope Alternative
The Board is responsible for ensuring that the activities Investment Fund under the Alternative Investment Fund
of Titan and its various investments are conducted in Managers Directive (the ‘AIFM Directive’), it has in place
compliance with the law and applicable governance an agreement with Octopus AIF Management Limited to
and regulatory regimes, and in adherence with act as Manager (an authorised alternative investment
prevailing best practice for the relevant industry. This fund manager responsible for ensuring compliance with
includes reviewing internal controls, ensuring that the AIFM Directive). Octopus AIF Management Limited
there is an appropriate balance of skills and experience has in turn appointed Octopus Investments Limited
represented on the Board, and ensuring that the to act as Portfolio Manager to Titan (responsible for
ﬁnancial statements give a true and fair view of the portfolio management and the day-to-day running
state of aairs of Titan. Further detail can be found in of the Company). The AIF Manager’s main focus is
the Statement of Directors’ Responsibilities on page 78. risk management and the review of the valuation of
In the year to 31 December 2022 no areas of concern Titan’s portfolio.
have been ﬂagged in this regard.
The Board works with Octopus in the selection of
third-party providers such as the registrars, corporate
Relations with key stakeholders
broker and VCT status adviser. Its selection is made
The requirement for Titan to consider the interests of
on the basis of quality of service, accuracy and price.
its key stakeholders is limited as it does not have any
Any errors or delays reﬂect badly on Titan, but more
employees. The Board considers Octopus to be its key
importantly can cause inconvenience, and potential
business partner as it has responsibility for the provision
loss, for shareholders. The performance of third-party
of investment management, administration, custody
providers is reviewed at least annually.
and company secretarial services.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 46
Strategic report Governance Financials
## Section 172(1) statement continued
### Our key stakeholders
Shareholders Portfolio companies Octopus and suppliers
Why we engage Why we engage Why we engage
The Board recognises the critical importance of Titan’s performance and the performance of its Titan is reliant on Octopus as the key provider of
open and timely communications with shareholders. underlying portfolio companies are directly and investment management and non-investment
Their support is fundamental to raising further capital intrinsically linked. The Portfolio Manager monitors services. In addition, third parties such as
which is dependent on Titan’s performance and the portfolio companies through a programme of Computershare, Titan’s registrar; and Panmure
clear reporting on portfolio progress. Shareholders regular company meetings as part of its investment Gordon, Titan’s corporate broker; as well as lawyers
are encouraged to attend and vote at shareholder process. and tax advisers provide key services for Titan and
meetings and to raise questions in relation to shareholders. Titan works with our suppliers to make
Titan’s progress. 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 How we engage How we engage
The annual and interim reports, prospectus and other The Board has also given Octopus discretionary Titan engages with Octopus and its third-party
shareholder information are published on the Octopus authority to vote on portfolio company resolutions suppliers on the basis of proven track record with
Investments website octopustitanvct.com. Details of on its behalf as part of its approach to corporate observance of minimum levels of performance,
the portfolio, the investment team and other insights governance, and encourages it to do so. As part of ethics and governance in order to create value and
are published on the Octopus Ventures website the portfolio valuation review the Board is provided mitigate risk. Octopus attends all Board meetings
octopusventures.com. Shareholder enquiries are with sucient information and support to scrutinise with regular updates on investment performance,
handled promptly by Octopus Investments. The Chair the performance of the portfolio companies. risks and non-investment services activities as well as
responds to communications addressed to the Board. ad hoc analysis as requested by the Board. The Board
The Directors aim to make sure that the annual has a positive and open relationship with Octopus
report and ﬁnancial statements are fair, balanced and annually, following a review, votes on retaining
and understandable, and that sucient information Octopus as the Portfolio Manager. A variety of
is provided to shareholders to assess Titan’s independent professional advisers are utilised by Titan
performance, business approach and strategy. to help with certain activities, including regulatory
and legal compliance, for example lawyers; tax
The shareholder event also provides the opportunity
advisers; corporate brokers; and auditors.
for shareholders to receive an update on the portfolio
and to meet members of the investment team.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 47
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## Section 172(1) statement continued
### Our key stakeholders continued
Community and environment Government and regulators
Why we engage Why we engage
Titan aims to back pioneering entrepreneurs, leading Good governance and compliance with applicable
technology and tech-enabled businesses, to shape regulations is vital in ensuring the continued success
the world we live in. The Board considers it important of Titan and the regimes within which it operates.
that Titan has a responsible approach to investing as
Octopus, on behalf of the Board, actively engages
set out in the framework on page 39, taking account
with HMRC and HMT to seek changes in VCT
of environmental, social and governance matters.
legislation, lobbying the government to highlight the
Titan’s investment operations create employment,
economic beneﬁts of VCTs.
aid economic growth, generate tax revenues and
produce wealth, thus beneﬁtting the community and
economy overall.
How we engage How we engage
Apart from the Board’s recognition that the The Board encourages openness and transparency
responsible investment policy should help to mitigate and promotes proactive compliance with new
the impacts of climate change, the Board has moved regulation.
to a largely paperless operation over the past three
Titan, through its Portfolio Manager, engages with
years and utilises conferencing platforms where
government and regulatory bodies at regular intervals
appropriate.
as well as participating in focus groups and research
The Board requires that Octopus collects data on with industry bodies.
diversity within the portfolio and actively works with
Government and regulatory policy informs strategic
our portfolio companies on an ongoing basis to
decision-making at Board level with consideration
support their talent management and recruitment,
given to the impact Titan has on the sector.
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.
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## Section 172(1) statement continued
### The impact of key decisions on stakeholders in 2022
Key decisions and actions during the year which have required the Directors to consider applicable Section 172 factors include:
Long-term strategy 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
S172 matters/stakeholders
proﬁt;
considered:
ii) maintaining a NAV per share of at least 90p after the payment of dividends;
(a) (b) (d) (f)
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 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.
S172 matters/stakeholders
Since 2022, AGMs have again been held as physical meetings at the Company’s registered oce.
considered:
(a) (b) (e) (f)
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## Section 172(1) statement continued
### The impact of key decisions on stakeholders in 2022 continued
 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
## of interest and fund
with Octopus on this matter with a regular review of allocation policies.
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.
S172 matters/stakeholders
considered:
(a) (b) (c) (d) (f)
Fundraising launch 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.
S172 matters/stakeholders
considered:
(a) (b) (c) (f)
Key – Section 172 matters considered
(a) The likely consequence of any decision in the long term.
(b) The interests of Titan’s shareholders.
(c) The need to act fairly between portfolio companies.
(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.
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## Risks and risk management
## 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.
Emerging and principal risks, and risk management The following are some of the potential emerging risks management and the
Board are currently monitoring:
Emerging risks
The Board has considered emerging risks. The Board seeks to mitigate emerging risks • adverse changes in global macroeconomic environment;
and those noted below by setting policy, regular review of performance and monitoring • high market valuation;
progress and compliance. In the mitigation and management of these risks, the Board
• geo-political instability; and
applies the principles detailed in the Financial Reporting Council’s Guidance on Risk
• climate change.
Management, Internal Control and Related Financial and Business Reporting.
Principal risks
Risk Mitigation Change
Investment performance: Octopus has signiﬁcant experience and a strong track record of investing
The focus of Titan’s investments is into unquoted, small and in early-stage unquoted companies, and appropriate due diligence is
medium-sized VCT qualifying companies which, by their undertaken on every new investment. A member of the Octopus Ventures
Increased due to
nature, entail a higher level of risk and shorter cash runway team is typically appointed to the board of a portfolio company, and regular
the dicult macro
than investments in larger quoted companies. board reports are prepared by the portfolio company’s management
environment and
and examined by the Manager. This arrangement, in conjunction with its
challenging trading
portfolio talent team’s active involvement, allows Titan to play a prominent
conditions for some
role in a portfolio company’s ongoing development and strategy. This
portfolio companies.
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.
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## Risks and risk management continued
Risk Mitigation Change
VCT qualifying status: Octopus tracks Titan’s qualifying status regularly throughout the year, and
Titan is required at all times to observe the conditions for the reviews this at key points including investment, realisation. This status is
maintenance of approved VCT status. The loss of such approval reported to the Board at each Board meeting. The Board has also engaged
Given the level
could lead to Titan and its investors losing access to the various external independent advisers to undertake an independent VCT status
of independent
tax beneﬁts associated with VCT status and investment. monitoring role.
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 Portfolio Manager has a broad team experienced in and focused on
The loss of key investment sta by the Portfolio Manager could early-stage investing. This mitigates the risk of any one individual with
lead to poor fund management and/or performance due to the required skill set and knowledge of venture capital investing, and the
An increase in risk
lack of continuity or understanding of Titan. portfolio speciﬁcally, leaving. Key investment sta are also incentivised via
exposure reﬂects
the performance incentive fee.
a reduction in
performance fees
potentially increasing
attrition.
Operational: The Board reviews the system of internal controls, both ﬁnancial and
The Board is reliant on the Portfolio Manager to manage non-ﬁnancial, operated by Octopus (to the extent the latter are relevant
to Titan’s internal controls). These include controls designed to make sure No overall change
investments eectively, and manage the services of a number
that Titan’s assets are safeguarded and that proper accounting records are in risk exposure on
of third parties, in particular the registrar, depositary and
maintained. balance.
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.
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## Risks and risk management continued
Risk Mitigation Change
Information security: Annual due diligence is conducted on third parties which includes a review of
A loss of key data could result in a data breach and ﬁnes. their controls for information security. Octopus has a dedicated information
security team and a third party is engaged to provide continual protection in No overall change on
The Board is reliant on Octopus and third parties to take
this area. A security framework is in place to help prevent malicious events. balance, although
appropriate measures to prevent a loss of conﬁdential
cyber threat remains
customer information.
a signiﬁcant risk area
faced by all service
providers.
Economic: Titan invests in a diverse portfolio of companies, across a range of sectors,
Events such as an economic recession and movement in which helps to mitigate against the impact on any one sector. Titan also
interest rates could adversely aect some smaller companies’ maintains adequate liquidity to make sure it can continue to provide
Continued
valuations, as they may be more vulnerable to changes in follow-on investment to those portfolio companies which require it and
uncertainty in
trading conditions or the sectors in which they operate. which is supported by the individual investment case.
an environment
This could result in a reduction in the value of Titan’s assets.
that includes high
inﬂation, high
interest rates and
other economic
factors.
Legislative: The Portfolio Manager engages with HMT and industry bodies to
A change to the VCT regulations could adversely impact demonstrate the positive beneﬁts of VCTs in terms of growing early-stage
Titan by restricting the companies Titan can invest in under companies, creating jobs and increasing tax revenue, and to help shape any
Reduced slightly,
its current strategy. Similarly, changes to VCT tax reliefs for change to VCT legislation. The changes to VCT regulations in 2018 largely
reﬂecting a
investors could make VCTs less attractive and impact Titan’s beneﬁtted Titan as there were increased annual and lifetime investment
sentiment that the
ability to raise further funds. limits introduced for Knowledge Intensive companies (i.e. those that have
sunset clause is
a high proportion of Research and Development or innovation spend), and
likely to be removed,
many of the companies in which Titan invests qualify as such companies.
although political
uncertainty remains.
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## Risks and risk management continued
Risk Mitigation Change
Liquidity: Titan’s liquidity risk is managed on a continuing basis by Octopus in
The risk that Titan’s available cash will not be sucient to meet accordance with policies and procedures agreed by the Board. Titan’s overall
its ﬁnancial obligations. Titan invests into smaller unquoted liquidity risks are monitored on a quarterly basis by the Board, with frequent
Increased to reﬂect
companies, which are inherently illiquid as there is no readily budgeting and close monitoring of available cash resources. Titan maintains
the potential
available market for these shares. Therefore, these may be sucient investments in cash and readily realisable securities to meet its
knock-on eects
dicult to realise for their fair market value at short notice. ﬁnancial obligations. At 31 December 2022, these investments were valued
of economic
at £162,945,000 (2021: £198,373,000), which represents 15% (2021: 14%) of the
uncertainty,
net assets of Titan.
including impacts
on fundraising and
the risk of disposal
failures.
Valuation: Valuations of portfolio companies are performed by appropriately
The portfolio investments are valued in accordance with experienced sta, with detailed knowledge of both the portfolio company
International Private Equity and Venture Capital (IPEV) and the market it operates in. These valuations are then subject to review
An increase in
valuation guidelines. This means companies are valued at fair and approval by Octopus’ Valuation Committee, comprised of sta who
valuation risk reﬂects
value. As the portfolio comprises smaller unquoted companies, are independent of Octopus Ventures with relevant knowledge of unquoted
greater economic
establishing fair value can be dicult due to the lack of a company valuations, as well as Titan’s Board of Directors.
uncertainty within
readily available market for the shares of such companies and
valuation modelling.
the potentially limited number of external reference points.
Foreign currency exposure: Octopus and the Board regularly review the exposure to foreign currency
Investments held and revenues generated in other currencies movement to make sure the level of risk is appropriately managed.
may not generate the expected level of returns due to changes Investments are primarily made in GBP, EUR and USD so exposure is limited
Reduced exposure
in foreign exchange rates. to a small number of currencies. On realisation of investments held in foreign
due to the realisation
currencies, cash is translated to GBP shortly after receiving the proceeds to
of investments held
limit the amount of time exposed to foreign currency ﬂuctuations.
in foreign currencies
during the year.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 54
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## Business review
Investment policy Non-VCT qualifying investments A review of the investment portfolio and of market
Titan’s focus is on providing early-stage, development An active approach is taken to manage any cash conditions during the period is included in the Chair’s
and expansion funding to unquoted companies. Titan held, prior to investing in VCT qualifying companies. Statement and Portfolio Manager’s Review which
typically makes an initial investment of £1 million to After Titan makes sure it satisﬁes all VCT investment form part of the Strategic Report on pages 23 to 38
£10 million and will make further follow-on investments qualiﬁcation targets required by HMRC, the majority of respectively.
into existing portfolio companies. The intention is to the remaining cash will be invested in accordance with
Liquidity strategy
hold a portfolio of largely unquoted technology and HMRC rules for non-qualifying investments. Currently
The Board’s strategy is to maintain an appropriate level
tech-enabled companies. this includes Undertakings for Collective Investments
of liquidity on the balance sheet to continue to achieve
in Transferable Securities (UCITS), corporate bonds or
No material changes may be made to Titan’s investment
the following ﬁve targets:
other money market funds, including those managed
policy without the prior approval of shareholders by the
by Octopus. • to support further investment in existing portfolio
passing of an Ordinary Resolution. The Directors will
companies if required;
continually monitor the investment process and secure VCT qualifying investments
• to take advantage of new investment opportunities
compliance with the investment policy.
Investment decisions made must adhere to HMRC’s VCT
as they arise;
The Directors control the overall risk of the portfolio by qualiﬁcation rules. In addition to adhering to the VCT
• to cover the running costs of Titan as they fall due;
ensuring that Titan has exposure to a diversiﬁed range rules, when contemplating a prospective investment in
a company, particular consideration is given to: • to support a consistent dividend ﬂow; and
of portfolio companies from a number of dierent
technology and tech-enabled sectors. Concentration risk • to assist liquidity in the shares through the buyback
• the strength of the management team;
is mitigated by ensuring that at the point of investment facility.
• large, typically global, addressable markets;
no more than 15% of Titan by value will be in any one
Liquidity in Titan is primarily driven by proﬁtable exits
• the portfolio company’s ability to sustain a
investment. Any borrowing by Titan for the purposes of
and fundraising activities.
competitive advantage;
making investments will be in accordance with Titan’s
Articles of Association. • the existence of proprietary technology; VCT regulation
• visibility over future revenues and recurring income; Compliance with the required VCT rules and regulations
The investment proﬁle is expected to be:
and is considered when all investment decisions are made.
• 80-90% in VCT qualifying investments, primarily in
Internally. This is measured on a continuous basis and
• the company’s prospects of being sold or ﬂoated in
unquoted companies; and
it is also reviewed by Shoosmiths LLP every six months,
the future, at a signiﬁcant multiple on the initial cost
• 10-20% in non-VCT qualifying investments or cash. who perform a comprehensive validation exercise. One
of investment.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 55
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Governance

Financials

# 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

## NAV and share price total return since launch¹

![img-7.jpeg](img-7.jpeg)

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.

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.

Octopus Titan VCT plc | Annual report and financial statements 2022

56
Strategic report Governance Financials
## 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
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## Board of Directors
Tom Leader Gaenor Bagley Matt Cooper
Non-Executive Chair Non-Executive Director Non-Executive Director
Tom has over 30 years’ private equity experience. He Following a 30-year career in professional services, where Matt currently works as a Non-Executive Chair and/or
is currently Head of Caledonia Private Capital (part she held a variety of leadership positions including at Director with a range of public and private companies.
of Caledonia Investments plc). Before Caledonia, Tom board level, Gaenor now has a portfolio of non-executive These currently include Intrepid Owls Ltd, CatchApp
worked at Nova Capital Management, Baring Private director roles. Her other current roles include: Ltd, VouchedFor Ltd and Live Tech Games Ltd.
Equity Partners and Morgan Grenfell Private Equity. Non-Executive Director, Chair of Audit Committee and Matt’s areas of expertise include corporate strategy
Tom started his career in the management consultancy Chair of Remuneration Committee, Zopa Bank Limited; formulation, brand and marketing and implementation,
practice of Coopers & Lybrand. Tom is a Non-Executive Non-Executive Director, National Audit Oce; Chair, organisational culture and design, and executive
Director of Stonehage Fleming Family & Partners The Kemnal Academies Trust; external member of coaching and leadership. Previously, Matt was Principal
Limited and 7IM Holdings Limited. Separately, he is Council, Cambridge University. The majority of Gaenor’s Managing Director of Capital One Bank Europe plc
Non-Executive Chair of Penox Group GmbH. professional career has been as a M&A tax adviser until leaving the company in 2001. Originally from New
with PwC as part of the tax practice. In 2011 she was Jersey, Matt graduated ﬁrst in his class in Chemistry
appointed to the executive board of PwC UK to be Head from Princeton University in 1988. Matt was a director
of People, with responsibilities for developing the ﬁrm’s of Octopus Titan VCT 1 plc from 29 October 2007 to
People and Corporate Social Responsibility strategy. 27 November 2014, in addition to being a director
Alongside this role she was the Global Head of Learning of Titan from 29 October 2007 to date. He was also
and Development, responsible for the development Chair of Octopus Capital Limited from July 2001 until
strategy for the PwC network ﬁrms. From July 2016 until September 2022.
her retirement in December 2017, Gaenor was Head
Matt will be retiring from the Board at the AGM.
of Corporate Purpose at PwC UK, leading on PwC’s
Corporate Social Responsibility agenda.
Key: Audit Committee Management Engagement CommitteeNomination and Remuneration Committee Independent Chair
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## Board of Directors continued
Jane O’Riordan Lord Rockley
Non-Executive Director Non-Executive Director
Jane is currently Chair of Turtle Bay Hospitality, Anthony is a qualiﬁed chartered accountant and former
Caravan Restaurants and of Flight Club Darts. Jane partner at KPMG. He joined KPMG in 1983 and held
was previously a director of Yellowwoods Associates various positions throughout his career, most notably
UK Limited, where she was involved in the strategic within the banking sector and latterly as the lead audit
development of companies such as Nando’s, Gourmet partner in KPMG’s Private Equity Group (PEG) which
Burger Kitchen, Pizza Express/Gondola and others. he was instrumental in establishing. He led PEG Audit
Before Yellowwoods, Jane was a director with Braxton until his retirement as a partner in 2015. Anthony was
Associates, the then strategic consulting division of a member of the British Venture Capital Association
Deloitte & Touche. In addition to over 29 years of private working party and was key in the development of
equity, venture capital and management consulting the ﬁrst valuation guidelines for the industry. He was
experience, Jane worked for three years with British also a member of the International Private Equity and
Aerospace as a spacecraft systems engineer. Jane has Venture Capital Guidelines Board between 2005 and
a BSc in mechanical engineering and an MBA from 2014. He has an MA in Natural Sciences from Cambridge
Harvard Business School. Jane was Director and Chair University.
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.
Key: Audit Committee Management Engagement CommitteeNomination and Remuneration Committee Independent Chair
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 59
Strategic report Governance Financials
## Corporate governance report
## The Board of Directors has considered the principles and
## recommendations of the Association of Investment Companies
## Code of Corporate Governance.
The Association of Investment Companies Code of Titan, as a VCT and closed-ended investment company, Titan is committed to maintaining high standards in
Corporate Governance (the ‘AIC Code’), issued by has particular factors which have an impact on its corporate governance. With the exception of the items
the AIC in February 2019, addresses the principles and governance arrangements. Titan: outlined below, the Directors consider that Titan has,
provisions set out in the UK Corporate Governance Code throughout the year under review, complied with the
• outsources all day-to-day activities (such as portfolio
(the ‘UK Code’), issued by the Financial Report Council provisions set out in the AIC Code:
management, administration, accounting, custody
(FRC) in July 2018, as well as setting out additional
and company secretarial). This means that it is • Titan does not have a Senior Independent Director;
provisions on issues that are of speciﬁc relevance to
governed entirely by a Board of Non-Executive this is not considered necessary;
Titan. The FRC has conﬁrmed that members of the
Directors. In these circumstances, the proper • the Chair is a member of the Audit Committee,
AIC, who report against the AIC Code, will be meeting
oversight of these relationships is the key aspect of having been Chair of the Audit Committee until
their obligations in relation to the UK Code and the
achieving good corporate governance; June 2022. The Directors believe this is appropriate
associated disclosure requirements under paragraph
• does not have executive directors or employees. As a to beneﬁt from his skills and knowledge;
9.8.6 of the Listing Rules. The AIC Code is available on
consequence, the only ‘corporate memory’ is that of • the Chair is also Chair of the Nomination and
the AIC’s website www.theaic.co.uk. It includes an
the Non-Executive Directors; and Remuneration Committee, which the Directors
explanation of how the AIC Code adapts the principles
• does not have customers, only shareholders. consider to be appropriate given the small number
and provisions set out in the UK Code to make them
of independent Directors and tenure of those on
relevant for investment companies. The AIC Code deals with matters such as the
the Board;
relationship with the manager and other service
Corporate governance within the closed-ended
providers. • the Directors do not stand for annual re-election
investment company industry diers from that of other
in order to make sure experience is retained on
companies. In addition, VCTs dier from most other In practice, most of the time spent by the board of a
the Board; and
investment companies in that they have, developed well-functioning investment company should be spent
over many years, a complex range of additional legal, on matters of general corporate governance (e.g. the • Titan has no major shareholders, so shareholders are
tax and regulatory requirements. investment strategy, policy and performance), which not given the opportunity to meet any Non-Executive
applies to Titan. 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 60
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## Corporate governance report continued
Viability statement Based on this assessment the Board conﬁrms that it
In accordance with the FRC UK Corporate Governance has a reasonable expectation that Titan will be able to Board leadership and purpose
Code published in 2018 and provision 36 of the AIC continue in operation and meet its liabilities as they fall The Board is responsible for leading the business in
Code of Corporate Governance, the Directors have due over the ﬁve-year period to 31 December 2027. The the way which it believes is most likely to lead to
assessed the prospects of Titan over a period of ﬁve Board is mindful of the ongoing risks and will continue to long-term sustainable success. This includes eective
years, consistent with the expected investment hold make sure that appropriate safeguards are in place, in engagement with our stakeholders.
period of a VCT investor. A fundraising was launched on addition to monitoring the cash ﬂow forecasts to ensure
Read more on page 62
10 November 2022 and closed on 5 April 2023, raising Titan has sucient liquidity.
£237 million. Under VCT rules, subscribing investors are
Going concern
required to hold their investment for a ﬁve-year period Division of responsibilities
Titan’s business activities, together with the factors
in order to beneﬁt from the associated tax reliefs. The As all day-to-day activities are outsourced, the Board
likely to aect its future development, performance
Board regularly considers strategy, including investor ensures proper oversight in order to achieve good
and position, are set out in the Strategic Report. Further
demand for Titan’s shares, and a ﬁve-year period is corporate governance.
details on the management of ﬁnancial risk may be
considered to be a reasonable time horizon for this.
found in Note 16 to the ﬁnancial statements. Read more on page 63
The Board carried out a robust assessment of the
The Board receives regular reports from Octopus and
emerging and principal risks facing Titan and its current
the Directors believe that Titan has adequate ﬁnancial Composition, succession and evaluation
position, including risks which may adversely impact
resources to continue in operational existence for a The Board makes sure it is balanced with the
its business model, future performance, solvency or
period of at least 12 months from the date of the signing appropriate skills and maintains a succession plan. Its
liquidity, and focused on the major factors which aect
of these ﬁnancial statements. In reaching this conclusion performance and composition are considered annually.
the economic, regulatory and political environment.
the Directors have considered the liquid assets of Titan
Particular consideration was given to Titan’s reliance
Read more on page 64
and its ability to meet its obligations as they fall due.
on, and close working relationship with, the Portfolio
As no material uncertainties leading to signiﬁcant doubt
Manager. The principal risks faced by Titan and the
about going concern have been identiﬁed, and taking Audit, risk and internal control
procedures in place to monitor and mitigate them are
into account all available information about Titan,
set out on pages 51 to 54. Titan’s strategy is determined by the Board,
the Directors believe that it is appropriate to continue
taking account of the need to avoid unnecessary
The Board has carried out robust stress testing of cash
to adopt the going concern basis of accounting in
or unacceptable risks. The Audit Committee is
ﬂows which included assessing the resilience of portfolio
preparing the ﬁnancial statements.
appointed to oversee this process on behalf of
companies, including the requirement for any future
the Board.
ﬁnancial support and the ability to pay dividends, and
buybacks. Read more on page 66
The Board has additionally considered the ability of Titan
Remuneration
to comply with the ongoing conditions to make sure
The Board comprises Non-Executive Directors only, who
it maintains its VCT qualifying status under its current
receive fees which are subject to periodic review. No
investment policy.
element of their remuneration is performance related.
Read more on page 70
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## Leadership and purpose
Board of Directors Additional meetings were held as required to address speciﬁc issues including
Titan currently has a Board of ﬁve Non-Executive Directors, four of whom are considering investment recommendations from Octopus, allotments and purchases
considered to be independent. Matt Cooper is not considered to be independent of its own shares.
due to his role as Chair of Octopus Capital Limited, the parent company of Octopus
The Chair leads the Board in the determination of its strategy and in the achievement
Investments Limited, Titan’s Portfolio Manager, from 1 July 2001 to 14 September 2022.
of its objectives. The Chair is responsible for organising the business of the Board,
The Board meets regularly, at least six times a year, and on other occasions as required, ensuring its eectiveness and setting its agenda, and has no involvement in the
to review the investment performance and monitor compliance with the investment day-to-day business of Titan. He facilitates the eective contribution of the Directors
policy laid down by the Board as set out in the Strategic Report on page 55. and makes sure that they receive accurate, timely and clear information and that they
communicate eectively with shareholders.
The Board has a formal schedule of matters speciﬁcally reserved for its decision
which include: The company secretarial function is discharged by Octopus Company Secretarial
Services Limited, which is responsible for advising the Board, through the Chair, on
• the consideration and approval of future developments or changes to the
all governance matters. All of the Directors have access to the advice and services of
investment policy, including risk and asset allocation;
the Company Secretary, who has administrative responsibility for the meetings of the
• consideration of corporate strategy;
Board and its committees. Directors may also take independent professional advice
• approval of the appropriate dividend to be paid to the shareholders; at Titan’s expense where necessary in the performance of their duties. The Board does
• approval of the annual report and the unaudited half-yearly report; not consider it necessary for the size of the Board or Titan to identify a member of the
• the appointment, evaluation, removal and remuneration of Octopus; Board as the senior Non-Executive Director.
• the performance of Titan, including monitoring of the discount of the NAV to the Titan’s Articles of Association and the schedule of matters reserved to the Board for
share price; and decision provide that the appointment and removal of the Company Secretary is a
• monitoring shareholder proﬁles and considering shareholder communications. matter for the full Board.
During the period the following meetings were held:
Nomination and
Remuneration
Committee
Board meeting Audit Committee meeting
attendance meeting attendance attendance
1
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.
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## Division of responsibilities
Board committees Key Board activities and decisions during the year
The Board has appointed three committees to make recommendations to the Board in Creation of additional distributable reserves
speciﬁc areas:
Distributable reserves are required to pay dividends and facilitate share buybacks.
The Audit Committee consists of four independent Directors. The Audit Committee The Board will continue to seek to create more reserves with the ongoing process of
believes that Lord Rockley, current Chair of the Audit Committee, possesses cancelling share premium, with the appropriate resolution being put to shareholders
appropriate and relevant ﬁnancial experience. The Board considers that the members at the AGM. Following the external review of reserves undertaken in 2021, the capital
of the Committee are independent and collectively have the skills and experience redemption reserve was cancelled and the nominal value of Ordinary shares reduced,
required to discharge their duties eectively. The Audit Committee Report is given on as approved by shareholders at the AGM held in June 2022.
pages 66 to 68.
Review of governance arrangements
The Management Engagement Committee, which was established towards the end
Following a review of Titan’s governance arrangements, it was agreed that a
of the ﬁnancial year, assists the Board in evaluating the performance of the Portfolio
Management Engagement Committee be established to assist the Board in evaluating
Manager and other third-party service providers engaged by the Company. The
the performance of the Portfolio Manager and third-party service providers. The
Management Engagement Committee is chaired by Gaenor Bagley and comprises all
remit of the Nominations Committee was also extended to include remuneration
independent Directors.
and new terms of reference for the Committee agreed. In addition, it was agreed
The Nomination and Remuneration Committee, comprising all independent Directors that the annual Board evaluation process would be done on a more formal basis
and chaired by Tom Leader, considers the selection and appointment of Directors with a questionnaire approach, as opposed to the individual and collective discussion
to the Board and its committees. The Committee considers composition and approach of previous years.
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.
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Governance

Financials

# 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 Rackley 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 Rackley | 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 sufficient 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 office, 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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## Composition, succession and evaluation continued
Independence Performance evaluation
The Directors believe that, in line with the AIC Code, all members of the Board Each year a formal performance evaluation is undertaken of the Board as a whole,
identiﬁed as independent are so in character and judgement with respect to its committees and the Directors in the form of one-to-one meetings between the
their duties to the shareholders. Following the AGM, Jane O’Riordan will be the Chair and each Director. The Directors were made aware of the annual performance
longest-serving independent Board member, having served on the Board for nine years evaluation on their appointment. The Chair provides a summary of the ﬁndings to the
since her initial appointment. She is still considered to be independent in the absence Board, which are discussed at the next meeting and an action plan agreed. There were
of a connection with the Portfolio Manager or any of Titan’s advisers. 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
Length of service of the Chair and other Directors is one of a number of factors taken
continue to make an eective contribution and have the requisite skills and experience
into account when considering the contribution and ongoing independence of the
to continue to provide able leadership and direction for Titan.
Board, both individually and in terms of overall composition. The Board considers
the experience, range of skills, knowledge of Titan and its operating environment The Board also conducts an evaluation of Octopus, as the Portfolio Manager, and
and diversity of the Directors. Accordingly, the Board’s policy on tenure is that the feedback of the results of the evaluation is provided to Octopus.
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.
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## Audit, risk and internal control
### Audit Committee report
This report is submitted in accordance with the AIC • annually considering the need for an internal audit The Committee reviews its terms of reference and its
Code in respect of the year ended 31 December 2022 function; eectiveness annually and recommends to the Board
and describes the work of the Audit Committee in • making recommendations to the Board in relation to any changes required as a result of the review. The
discharging its responsibilities. the appointment, re-appointment and removal of the terms of reference are available on request from Titan’s
external auditor and approving the remuneration and Company Secretary. The Committee meets at least
The Committee’s key objective is the provision of
terms of engagement of the external auditor; twice per year and on an ad hoc basis as necessary and
eective governance of the appropriateness of Titan’s
has direct access to BDO LLP, Titan’s external auditor.
ﬁnancial reporting, the performance of the auditor • reviewing and monitoring the external auditor’s
and the management of the internal control and independence and objectivity and the eectiveness Auditor appointment
business risks systems. The Directors forming the Audit of the audit process, taking into consideration
When considering whether to recommend the
Committee can be found on pages 58 and 59. relevant UK professional regulatory requirements;
appointment or re-appointment of the external auditor,
The Audit Committee’s terms of reference include the • monitoring the extent to which the external auditor the Committee takes into account the tenure of the
following responsibilities: is engaged to supply non-audit services; and current auditor in addition to comparing the fees
• ensuring that Octopus has arrangements in place for charged by similar sized audit ﬁrms. The current auditor
• reviewing and making recommendations to the Board
the investigation and follow-up of any concerns raised was appointed on 15 March 2018 following a competitive
in relation to Titan’s published ﬁnancial statements
conﬁdentially by sta in relation to the propriety of tender process. Vanessa Bradley, the current audit
and other formal announcements relating to Titan’s
ﬁnancial reporting or other matters. partner, has been involved for ﬁve years. Due to rotation
ﬁnancial performance;
requirements, a new audit partner will be appointed for
• advising the Board on whether the annual report As part of the process of working with the Board to
the 2023 year-end audit.
and ﬁnancial statements, taken as a whole, is fair, maximise eectiveness, meetings of the Committee
balanced and understandable; usually take place immediately prior to a Board meeting Auditor independence and objectivity
and a report is provided on relevant matters to enable
• advising the Board on whether the annual report and When considering the eectiveness of the external
the Board to carry out its duties.
ﬁnancial statements provides necessary information audit, the Committee considered the quality and
for shareholders to assess performance, business content of the audit plan and report provided and the
model and strategy; resultant reporting and discussions on topics raised.
• reviewing and making recommendations to the The Committee reviews the information and assurances
Board in relation to Titan’s internal control (including provided by the auditor on its compliance with the
internal ﬁnancial control) and risk management relevant ethical standards. No non-audit services were
systems; provided by the auditor in the period under review.
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## Audit, risk and internal control continued
### Audit Committee report continued
Auditor evaluation Matters considered by the Audit Committee Signiﬁcant risks
The eectiveness of the external audit is assessed as During the year ended 31 December 2022, the Audit The Audit Committee is responsible for considering and
part of the Board and Committee evaluation process Committee discharged its responsibilities by: reporting on any signiﬁcant risks that arise in relation to
which is conducted annually. The Committee also the audit of the ﬁnancial statements.
• reviewing and approving the external auditor’s terms
challenges the auditor when present at a Committee
of engagement and remuneration; The Committee and the auditor have identiﬁed the most
meeting, if appropriate.
• reviewing the external auditor’s plan for the signiﬁcant risks for Titan as:
Internal audit audit of Titan’s ﬁnancial statements, including
• valuation of investment portfolio: The Committee
Titan does not have an internal audit function as it is identiﬁcation of key risks and conﬁrmation of auditor gives special audit consideration to the valuation
not deemed appropriate given the size of Titan and independence; of investments and supporting data provided by
the nature of its business. However, the Committee • reviewing Octopus’ statement of internal controls Octopus. The impact of this risk would be a large
considers annually whether there is a need for such a in relation to Titan’s business and assessing the gain or loss in Titan’s results. The valuations are
function and makes the appropriate recommendation eectiveness of those controls in minimising the supported by the portfolio companies’ accounts and
to the Board. Octopus has an internal audit function impact of key risks; third-party evidence which gives comfort to the Audit
which reports to the Board annually on the outcome Committee.
• reviewing periodic reports on the eectiveness of the
of the internal audits that have taken place. Any
regulatory compliance of Octopus; • management override of ﬁnancial controls:
signiﬁcant issues arising from the Octopus internal audit
• reviewing the appropriateness of Titan’s accounting The Committee reviews all signiﬁcant accounting
that aect Titan would be raised to the Committee
policies; estimates that form part of the ﬁnancial statements
immediately. Octopus’ Compliance Department also
and considers any material judgements applied by
• reviewing Titan’s draft annual ﬁnancial and interim
reports regularly to the Board.
management during the completion of the ﬁnancial
results statements prior to Board approval;
The Committee monitors the signiﬁcant risks at each statements.
• reviewing the external auditor’s audit ﬁndings
meeting and Octopus engages closely with the auditor • recognition of revenue from investments: Investment
report to the Committee on the annual ﬁnancial
to mitigate the risks and the resultant impact. income is Titan’s source of revenue. Revenue is
statements;
recognised when Titan’s right to the return is
• reviewing Titan’s going concern as referred to on page
established in accordance with the Statement of
61; and
Recommended Practice. Octopus conﬁrms to the
• reviewing in detail the valuation of the investment
Audit Committee that the revenues are recognised
portfolio and supporting data.
appropriately.
The Committee has considered the whole annual
These issues were discussed with Octopus and the
report and ﬁnancial statements for the year ended
auditor at the conclusion of the audit of the ﬁnancial
31 December 2022 and has reported to the Board that it
statements.
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.
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## Audit, risk and internal control continued
### Audit Committee report continued
Internal controls The Directors conﬁrm that they have established a Financial risk management
The Directors have overall responsibility for keeping continuing process throughout the year and up to Titan is exposed to the risks arising from its operational
under review the eectiveness of Titan’s systems of the date of this report for identifying, evaluating and and investment activities. Further details can be found
risk management and internal controls. The purpose of managing the signiﬁcant potential risks faced by in Note 16 of the ﬁnancial statements.
these controls is to make sure that proper accounting Titan and have reviewed the eectiveness of the risk
The Committee is also responsible for considering and
records are maintained, Titan’s assets are safeguarded management and internal control systems. As part of
reporting on any signiﬁcant issues that arise in relation
and the ﬁnancial information used within the business this process an annual review of the risk management
to the audit of the ﬁnancial statements. The Committee
and for publication is accurate and reliable; such a and internal control systems is carried out in accordance
can conﬁrm that there were no signiﬁcant issues to
system can only provide reasonable and not absolute with the Financial Reporting Council’s Guidance on Risk
report to the shareholders in respect of the audit of the
assurance against material misstatement or loss. The Management, Internal Control and Related Financial
ﬁnancial statements to 31 December 2022.
systems of risk management and internal control are and Business Reporting. The Board does not consider it
designed to manage rather than eliminate the risk of appropriate to have an internal audit function due to
failure to achieve the business objectives. These internal the nature of Titan’s transactions as this would not be
controls have been in place throughout the period under an appropriate control for a VCT.
Lord Rockley
review and up to the date of this report.
The risk management and internal control systems
Audit Committee Chair
The Board regularly reviews ﬁnancial results and include the production and review of monthly bank
24 April 2023
investment performance with Octopus. Octopus reconciliations and management accounts. All outﬂows
identiﬁes the investment opportunities, monitors the made from Titan’s accounts require the authority of
portfolio of investments and manages the assets of two approved signatories from Octopus. Further to this,
Titan on a discretionary basis. the audit partner has open access to Titan’s Directors
and Octopus is subject to regular review by the Octopus
Octopus is engaged to carry out the accounting
Compliance Department.
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.
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## Management Engagement Committee
### Management Engagement Committee report
In December 2022, the Board established a Management • to review, at least annually, the performance of the • to review, monitor and evaluate, at least annually,
Engagement Committee to help in evaluating the Manager and describe its decisions and rationale in the performance of the Company’s third-party
performance of the Manager and other third-party the annual report; service providers in meeting their obligations under
service providers engaged by Titan. The Committee • to consider whether the appointment of the Manager their respective agreements and to ensure their
is chaired by Gaenor Bagley, and comprises all the continues to be in the interests of shareholders; continued competitiveness and eectiveness, making
independent Directors. recommendations on any variation to the terms
• if it considers it necessary or appropriate, to
which it considers necessary or appropriate;
The Committee’s responsibilities are: negotiate/re-negotiate terms with the Manager;
• to assess the Company’s third-party service providers
• to review, at least annually, the contractual • to review the standard of services provided by
in their role as stakeholders and whether there is an
relationships with the Manager and terms of the the Manager, whether under the terms of the
appropriate level of engagement with them; and
management agreement, to make sure they are management agreement, the non-investment
services agreement (which covers administrative, • to consider any points of conﬂict which may arise
competitive and in the interests of shareholders as a
company secretarial, sales and marketing activities) for the providers of services to the Company.
whole, making recommendations to the Board on any
variation to the terms which it considers necessary or or simply as part of a non-contractual obligation of The Committee met subsequent to the period end and
appropriate; understanding; 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
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## Remuneration
### Directors’ remuneration report
Introduction Directors’ remuneration policy report The policy is to review these rates from time to time.
This report has been prepared in accordance with The Board consists entirely of Non-Executive Directors, Due to the nature of Titan, there are no employees other
Schedule 8 to the Large and Medium-sized Companies who meet regularly, at least six times a year, and on than the Directors and so no such issues to consider
and Groups (Accounts and Reports) (Amendment) other occasions as necessary, to deal with the important when determining the Directors’ remuneration.
Regulations 2013, in respect of the year ended aspects of Titan’s aairs. Directors are appointed with
The maximum level of Directors’ remuneration is
31 December 2022. The reporting requirements entail the expectation that they will serve for at least a period
currently ﬁxed by Titan’s Articles of Association, not to
two sections be included, a policy report and an annual of three years. All Non-Executive Directors retire at
exceed £300,000 in aggregate.
remuneration report, which are presented below. the ﬁrst general meeting after election and thereafter
Titan’s policy is for the Directors to be remunerated
one-third of all Directors are subject to retirement
Titan’s auditor, BDO LLP, is required to give its opinion
in the form of fees, payable quarterly in arrears.
by rotation at subsequent AGMs. Re-election will be
on certain information included in this report; this
The fees are not speciﬁcally related to the Directors’
recommended by the Board but is dependent upon
comprises the Directors’ emoluments section and share
performance, either individually or collectively. There
a shareholder vote.
information below. Their report on these and other
are no long-term incentive schemes, share option
matters is set out on pages 79 to 85. Each Director received a letter of appointment
schemes or pension schemes in place. The Articles of
which is subject to termination by the Director or
Association also entitle the Directors to be repaid all
Consideration by the Directors of matters relating
Titan on three months’ notice in writing. Copies of
reasonable travelling, subsistence and other expenses
to Directors’ remuneration
letters of appointment are held at the Company’s
incurred by them respectively whilst conducting their
The Board has appointed the Nomination and
registered oce. None of the Directors are entitled to
duties as Directors; however, no other remuneration or
Remuneration Committee to consider remuneration;
compensation payable upon early termination of their
compensation was paid or payable by Titan during the
historically this was considered by the Board. The
contract other than in respect of any unexpired notice
year to any of the current Directors.
Directors have not sought advice or services from
period.
any external person in respect of its consideration of The Directors’ remuneration policy was approved by
Titan’s policy is that the fees payable to the Directors
Directors’ remuneration during the year, although the shareholders at the AGM held in May 2020. Accordingly,
should reﬂect the time spent by the Board on Titan’s
Directors expect from time to time to review the fees the Policy will be put to shareholders for approval at the
aairs and the responsibilities borne by the Directors.
against those paid to the Boards of Directors of other 2023 AGM.
They should be sucient to attract candidates of high
VCTs. The Directors’ remuneration paid during the
calibre to be recruited. The policy is for the Chair of the Annual remuneration report
period is set out on page 71. Titan does not have a Chief
Board and the Chair of the Audit Committee to be paid This remuneration report is subject to approval by a
Executive Ocer, senior management or any employees.
higher fees than the other Directors in recognition of simple majority of shareholders at the AGM in June
their more onerous roles. 2023, as in previous years.
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## Remuneration continued
### Directors’ remuneration report continued
Statement of voting at the Annual General Meeting The Directors‘ remuneration policy was approved at the Company performance
The 2021 Directors’ remuneration report was presented AGM in May 2020. Of the 17,087,626 votes received, those The Board is responsible for Titan’s investment strategy
to the AGM in June 2022 and received shareholder for the resolution totalled 86.55%, 8.67% of votes were and performance, although the management of Titan’s
approval following a vote on a show of hands. Of the at the discretion of the Chair and 4.78% of the votes investment portfolio is delegated to the Portfolio
17,137,637 votes received, those for the resolution totalled cast were against, with 397,084 votes withheld. Manager through the agreements as referred to in the
85.7%, 10.0% of votes were at the discretion of the Chair Directors’ Report.
The proxy forms returned to the registrars contained no
and 4.3% of the votes cast were against, with 150,842
explanation for the votes against the resolution. The performance graph on page 56 also shows the
votes withheld.
performance of the NAV and Total Value of Titan.
Shareholders’ views are always welcome and considered
Further details of Titan’s performance are shown in the
by the Board. The methods of contacting the Board are
table on page 24 in the Portfolio Manager’s Review.
set out in the Directors’ Report on page 76.
Directors’ emoluments (audited)
The amount of each Director’s fees for the period were:

|  | Year ended |  |  | Year ended |  |  | Year ended |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 31 December 2022 |  |  | 31 December 2021 |  |  | 31 December 2020 |  |  |
|  |  | £’000 |  |  | £’000 |  |  | £’000 2022 change 2021 change 2020 change |

1
John Hustler 19 40 40 (53)% 0% 0%
2
Matt Cooper — — — — — —
Jane O’Riordan 36 33 33 9% 0% 0%
3

| Mark Hawkesworth | — | 18 35 | (100)% |  | (49)% 0% |  |
| --- | --- | --- | --- | --- | --- | --- |
| Tom Leader (Chair) | 42 | 34 33 |  | 24% |  | 3% 0% |
| Anthony Rockley | 38 | 24 — |  | 58% |  | — — |
| Gaenor Bagley | 36 | 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 71
Strategic report Governance Financials
## Remuneration continued
### Directors’ remuneration report continued
Dividends paid to Directors in the year as a result of their shareholdings in Titan are Statement of Directors’ shareholdings (audited)
shown in Note 20 of the ﬁnancial statements. 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
Expected fees
for the year to notiﬁable under Disclosure and Transparency Rule 3.1.2R) in the issued Ordinary shares
31 December 2023 of 0.1p each are shown in the table below:
£

|  |  |  |  |  | Year to |  |  | Year to |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Chair | 45,000 |  |  |  |  |  |  |  |
|  |  |  | 31 December 2022 |  |  | 31 December 2021 |  |  |
| Chair of the Audit Committee | 40,000 |  |  |  |  |  |  |  |
|  |  | Matt Cooper |  | 2,353,220 |  |  | 1,911,287 |  |
| Non-Executive Director | 37,000 |  |  |  |  |  |  |  |
|  |  | Jane O’Riordan |  |  | 130,607 |  | 113,592 |  |
|  |  | Tom Leader |  |  | 32,797 |  |  | 23,070 |

Relative importance of spend on pay
Lord Rockley 42,904 19,172
The actual expenditure in the current period is as follows:

|  |  |  |  |  | Gaenor Bagley | 14,793 | 8,912 |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Year to |  | Year to |  |  |  |
|  | 31 December 2022 |  | 31 December 2021 |  | There have been no changes in the Directors’ share interests between 31 December 2022 |  |  |
|  |  | £’000 |  | £’000 | and the date of this report. |  |  |
| Total dividends paid |  | 66,220 |  | 135,969 |  |  |  |

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

| Total buybacks | 41,192 |  | 34,519 |  | shares in a nominee account and Jane O’Riordan who holds 41,267 shares in a nominee |
| --- | --- | --- | --- | --- | --- |
| Total Directors’ fees |  | 171 |  | 167 | account. |
| Total expenses | 29,568 |  | 27,963 |  | 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
There were no other signiﬁcant payments during the 12-month period relevant to
so it is not relevant.
understanding the relative importance of spend on pay.
By Order of the Board
Tom Leader
Chair
24 April 2023
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 72
Strategic report Governance Financials
## Directors’ report
## The Directors present their report and the
## audited ﬁnancial statements for the year ended
## 31 December 2022.
The Corporate Governance Report on pages 60 and 61 Directors’ and Ocers’ liability insurance The Directors conﬁrm that, in their opinion, the
and the Audit Committee Report on pages 66 to 68 Titan has, as permitted by the Companies Act 2006, continuing appointment of Octopus as Portfolio
form part of this Directors’ Report. maintained insurance cover on behalf of the Directors Manager is in the best interests of the shareholders as
and Company Secretary indemnifying them against a whole. In reaching this conclusion the Directors have
The Directors consider that the annual report and
certain liabilities which may be incurred by them in taken into account the performance of the investment
ﬁnancial statements, taken as a whole, is fair, balanced
relation to Titan. portfolio and the ability of Octopus to produce
and understandable and provides the information
satisfactory investment performance in the future.
necessary for shareholders to assess Titan’s position,
Management
They also considered the length of the notice period
performance, business model and strategy.
Titan has in place an agreement with Octopus AIF
of the management agreement and fees payable to
Directors Management Limited to act as Manager. Octopus AIF
Octopus, together with the standard of other services
Management Limited has in turn appointed Octopus
Brief biographical notes on the Directors are given on provided, as set out above. Details of the fees paid to
Investments Limited to act as Portfolio Manager to
pages 58 and 59. Octopus in respect of services provided are detailed in
Titan (responsible for portfolio management and the
Note 19 of the ﬁnancial statements.
Matt Cooper is not considered to be independent due
day-to-day running of Titan). These agreements are
to his role as Director and Chair of Octopus Capital With the exception of Matt Cooper, no Director has
central to Titan’s ability to continue in business. The
Limited, the parent company of Octopus Investments an interest in any contract to which Titan is a party.
principal terms of the management agreement with
Limited, Titan’s Portfolio Manager, from 1 July 2001 to Matt Cooper was the Chair of Octopus Capital Limited
Octopus are set out in Notes 3 and 19 of the ﬁnancial
14 September 2022. As a non-independent Director he until his resignation on 14 September 2022.
statements.
has stood for re-election annually as required by Listing
Titan has established a performance incentive
Octopus also provides secretarial and administrative
Rule 15.2.13A. However, Matt Cooper will be retiring
scheme whereby Octopus is entitled to an annual
services to Titan. BNP Paribas Trust Coporation has been
from the Board at the conclusion of the 2023 AGM and
performance-related incentive fee if certain
appointed as depositary to Titan. BNP Paribas provides
therefore not standing for re-election.
performance criteria are met. Further details of this
cash monitoring, safekeeping of ﬁnancial instruments
Jane O’Riordan and Lord Rockley will be standing for scheme are disclosed within Note 19 of the ﬁnancial
and other assets and oversight duties.
re-election this year. 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 73
Strategic report Governance Financials
## Directors’ report continued

| Whistleblowing | Share issues | Rights attaching to the shares and restrictions |
| --- | --- | --- |
| Please refer to page 44 for our statement on | During the period 114,461,503 shares were issued. | on voting and transfer |
| whistleblowing. |  | Subject to any suspension or abrogation of rights |

On 21 October 2021 an Oer for subscription to raise up to
pursuant to relevant law or Titan’s Articles of
Bribery Act £125 million in aggregate with an over-allotment facility
Association, the shares confer on their holders the
of £75 million was launched. As at 31 December 2021,
Please refer to page 44 for our statement on the
following principal rights:
172,285,599 shares had been issued for a total
Bribery Act.
consideration of £200 million. This Oer is now closed. a) the right to receive out of proﬁts available for
VCT regulation
distribution such dividends as may be agreed to be
On 10 November 2022 an Oer for subscription
Compliance with required rules and regulations is paid (in the case of a ﬁnal dividend in an amount not
to raise up to £175 million in aggregate with an
considered when all investment decisions are made. exceeding the amount recommended by the Board
over-allotment facility of £75 million was launched.
Titan is further monitored on a continual basis to ensure as approved by shareholders in a general meeting
As at 31 December 2022, 94,306,911 shares had been
compliance. The main criteria to which it must adhere or in the case of an interim dividend in an amount
issued for a total gross consideration of £91 million.
are detailed on page 111. determined by the Board). All dividends unclaimed
This Oer closed on 5 April 2023.
for a period of 12 years after having become due for
Titan will continue to ensure its compliance with the
Share buybacks payment are forfeited automatically and cease to
qualiﬁcation requirements.
During the 12-month period, Titan purchased 45,009,970 remain owing by Titan;
Environment policy and greenhouse gas emissions shares, with a nominal value of £1,864,442, for
b) the right, on a return of assets on a liquidation,
Refer to pages 39 to 44 in the Strategic Report for our cancellation at a weighted average price of 92.9p per
reduction of capital or otherwise, to share in the
Responsible Investment policy and greenhouse gas share for a total consideration of £41 million, which
surplus assets of Titan remaining after payment of its
emissions. represents 3.5% of the shares in issue at the prior year
liabilities pari passu with the other holders of Ordinary
end (2021: 33,816,980 shares, with a nominal value of
shares; and
Share capital
£3,381,698, for cancellation at a weighted average
c) the right to receive notice of and to attend and speak
Titan’s Ordinary share capital as at 31 December 2022
price of 102.1p per share for a total consideration of
and vote in person or by proxy at any general meeting
comprised 1,367,949,929 (2021: 1,298,498,396) Ordinary
£35 million). These were repurchased in accordance
of Titan. On a show of hands, every member present
shares of 0.1p each. No shares were held in Treasury.
with Titan’s share buyback facility in order to assist the
or represented and voting has one vote, and on a poll,
At the 2022 Annual General Meeting a resolution was marketability of the shares and to prevent the shares
every member present or represented and voting has
approved that the issued share capital of Titan be trading at a wide discount to the NAV.
one vote for every share of which that member is the
reduced by cancelling and extinguishing capital to the
Post balance sheet events holder. The appointment of a proxy must be received
extent of 9.9p on each issued fully paid-up share and
not less than 48 hours before the time of the holding
A full list of post balance sheet events since 31 December
reducing the nominal value of each share from 10p to
of the relevant meeting or adjourned meeting or,
2022 can be found in Note 17 of the ﬁnancial statements
0.1p and the amount by which the share capital is so
in the case of a poll taken otherwise than at or on
on page 103.
reduced would be used to create a pool of distributable
the same day as the relevant meeting or adjourned
reserves for Titan.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 74
Strategic report Governance Financials
## Directors’ report continued
Rights attaching to the shares and restrictions on The Directors may also refuse to register a share transfer Resolution 8 renews the Directors’ authority to allot
voting and transfer continued if it is in respect of a certiﬁcated share which is not fully Ordinary shares in connection with the Dividend
These rights can be suspended. If a member, or any paid up or on which Titan has a lien provided that, where Re-Investment Scheme up to 5% of Titan’s issued share
other person appearing to be interested in shares held the share transfer is in respect of any share admitted to capital as at the date of the Notice of AGM. Such
by that member, has failed to comply within the time the Ocial List maintained by the UK Listing Authority, authority would expire at the later of the conclusion of
limits speciﬁed in Titan’s Articles of Association with any such discretion may not be exercised so as to the next AGM following the passing of this Resolution
a notice pursuant to s793 of the Companies Act 2006 prevent dealings taking place on an open and proper and the expiry of 15 months from the passing of the
(notice by Titan requiring information about interests in basis, or if in the opinion of the Directors (and with the Resolution. The Board intends to utilise this authority to
its shares), Titan can, until the default ceases, suspend concurrence of the UK Listing Authority) exceptional issue shares from time to time under the DRIS.
the right to attend and speak and vote at a general circumstances so warrant, provided that the exercise of
Resolutions 9 and 10 renew and extend the Directors’
meeting. If the shares represent at least 0.25% of their such power will not disturb the market in those shares.
authority to allot equity securities for cash without
class, Titan can also withhold any dividend or other Whilst there are no squeeze-out and sell out rules
pre-emption rights applying in certain circumstances.
money payable in respect of the shares (without any relating to the shares in Titan’s Articles of Association,
These Resolutions would authorise the Directors, until
obligation to pay interest) and refuse to accept certain shareholders are subject to the compulsory acquisition
the conclusion of the next AGM of Titan following the
transfers of the relevant shares. provisions in s974 to s991 of the Companies Act 2006.
passing of these Resolutions or, if later, on the expiry
Shareholders, either alone or with other shareholders, Directors’ authority to allot shares, to disapply of 15 months from the passing of these Resolutions,
have other rights as set out in Titan’s Articles of to issue Ordinary shares for cash without pre-emption
pre-emption rights
Association and in company law (principally the rights applying by way of an oer to existing
The authority proposed under Resolution 7 is required
Companies Act 2006). shareholders. These powers will be exercised only if,
so that the Directors may oer existing shareholders
in the opinion of the Directors, it would be in the best
A member may choose whether his shares are evidenced the opportunity to add to their investment or to oer
interests of shareholders, as a whole. This authority is in
by share certiﬁcates (certiﬁcated shares) or held in potential shareholders an opportunity to invest in Titan
addition to existing authorities.
electronic (uncertiﬁcated) form in CREST (the UK in a tax-ecient manner without it having to incur
electronic settlement system). substantial costs. Any consequent modest increase in
Directors’ authority to make market
the size of Titan will, in the opinion of the Directors,
purchases of its own shares
Any member may transfer all or any of his shares,
be in the interests of shareholders generally. Any issue
subject in the case of certiﬁcated shares to the rules The authority proposed under Resolution 11 is required
proceeds will be available for investment in line with
set out in Titan’s Articles of Association or in the case of so that the Directors may make purchases of up to
Titan’s investment policy and may be used, in part, to
uncertiﬁcated shares to the regulations governing the 233,371,367 Ordinary shares, representing approximately
purchase Ordinary shares in the market.
operation of CREST (which allow the Directors to refuse 14.99% of Titan’s issued share capital as at the date of
to register a transfer as therein set out); the transferor Resolution 7 renews the Directors’ authority to allot the Notice of AGM. Any shares bought back under this
remains the holder of the shares until the name of the Ordinary shares. Such authority would expire at the later authority will be at a price determined by the Board
transferee is entered in the register of members. The of the conclusion of the next AGM following the passing (subject to a minimum price of 0.1p (being the nominal
Directors may refuse to register a transfer of certiﬁcated of this Resolution and the expiry of 15 months from the value of such shares) and a maximum price of 5% above
shares in favour of more than four persons jointly or passing of the Resolution, giving the Directors authority the average mid-market quotation for such shares
where there is no adequate evidence of ownership or the to allot up to 25% of Titan’s issued share capital as on the London Stock Exchange and the applicable
transfer is not duly stamped (if so required). at the date of the Notice of AGM. This authority is regulations thereunder) and may be cancelled or held in
in addition to existing authorities. The Board intends Treasury as may be determined by the Board.
to utilise this authority in respect of the fundraising
activities of Titan.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 75
Strategic report

Governance

Financials

# 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 effect 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 offer 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

Octopus Titan VCT plc | Annual report and financial statements 2022

76
Strategic report Governance Financials
## 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
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 77
Strategic report Governance Financials
## Directors’ responsibilities statement
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, In so far as each of the Directors is aware:
the Directors’ Remuneration Report and the ﬁnancial statements in accordance with
• there is no relevant audit information of which the Company’s auditor is unaware;
applicable law and regulations. They are also responsible for ensuring that the annual
and
report and ﬁnancial statements include information required by the Listing Rules of the
• the Directors have taken all steps that they ought to have taken to make themselves
Financial Conduct Authority.
aware of any relevant audit information and to establish that the auditor is aware
Company law requires the Directors to prepare ﬁnancial statements for each ﬁnancial of that information.
year. Under that law the Directors have elected to prepare the ﬁnancial statements
The Directors are responsible for preparing the annual report and ﬁnancial statements
in accordance with United Kingdom Generally Accepted Accounting Practice (GAAP),
in accordance with applicable law and regulations. Having taken advice from the Audit
including Financial Reporting Standard 102 – ‘The Financial Reporting Standard
Committee, the Directors are of the opinion that this report as a whole provides the
Applicable in the United Kingdom and Republic of Ireland’ (FRS 102), (United Kingdom
necessary information to assess the Company’s performance, business model and
accounting standards and applicable law). Under company law the Directors must not
strategy and is fair, balanced and understandable.
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 The Directors are responsible for the maintenance and integrity of the corporate and
preparing these ﬁnancial statements, the Directors are required to: ﬁnancial information included on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of ﬁnancial statements may
• select suitable accounting policies and then apply them consistently;
dier from legislation in other jurisdictions.
• make judgements and accounting estimates that are reasonable and prudent;
The Directors conﬁrm that, to the best of their knowledge:
• state whether applicable UK Accounting Standards have been followed, subject to
any material departures disclosed and explained in the ﬁnancial statements; • the ﬁnancial statements, prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including FRS 102, give a true and fair view of the
• prepare the ﬁnancial statements on the going concern basis unless it is
assets, liabilities, ﬁnancial position and proﬁt or loss of the Company; and
inappropriate to presume that the Company will continue in business; and
• the annual report and ﬁnancial statements (including the Strategic Report), give a
• prepare a Strategic Report, Directors’ Report and Directors’ Remuneration Report
fair review of the development and performance of the business and the position
which comply with the requirements of the Companies Act 2006.
of the Company, together with a description of the principal risks and uncertainties
The Directors are responsible for keeping adequate accounting records that are
that it faces.
sucient to show and explain the Company’s transactions and disclose with
On behalf of the Board
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. Tom Leader
Chair
24 April 2023
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 78
Strategic report Governance Financials
## Independent auditor’s report
### 
Opinion on the ﬁnancial statements Conclusions relating to going concern
In our opinion the ﬁnancial statements: 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
• give a true and fair view of the state of the Company’s aairs as at
appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to
31 December 2022 and of its loss for the year then ended;
continue to adopt the going concern basis of accounting included:
• have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice • 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
• have been prepared in accordance with the requirements of the Companies
Company was meeting its requirements to retain VCT status;
Act 2006.
• consideration of the Company’s expected future compliance with VCT legislation,
We have audited the ﬁnancial statements of Octopus Titan VCT Plc (the ‘Company’)
the absence of bank debt, contingencies and commitments and any market or
for the year ended 31 December 2022 which comprise the Income Statement, the
reputational risks;
Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and
• reviewing the forecasted cash ﬂows that support the Directors’ assessment of going
notes to the ﬁnancial statements, including a summary of signiﬁcant accounting
concern, challenging assumptions and judgements made in the forecasts, and
policies. The ﬁnancial reporting framework that has been applied in their preparation
assessing them for reasonableness. In particular, we considered the available cash
is applicable law and United Kingdom Accounting Standards, including Financial
resources relative to the forecast expenditure which was assessed against the prior
Reporting Standard 102 The Financial Reporting Standard applicable in the UK and
year for reasonableness; and
Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
• evaluating the Directors’ method of assessing the going concern in light of market
Basis for opinion
volatility caused by the current macroeconomic uncertainties.
We conducted our audit in accordance with International Standards on Auditing (UK)
Based on the work we have performed, we have not identiﬁed any material
(ISAs (UK)) and applicable law. Our responsibilities under those standards are further
uncertainties relating to events or conditions that, individually or collectively, may cast
described in the Auditor’s responsibilities for the audit of the ﬁnancial statements
signiﬁcant doubt on the Company’s ability to continue as a going concern for a period
section of our report. We believe that the audit evidence we have obtained is sucient
of at least 12 months from when the ﬁnancial statements are authorised for issue.
and appropriate to provide a basis for our opinion. Our audit opinion is consistent with
the additional report to the Audit Committee. 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
Independence
to the Directors’ statement in the ﬁnancial statements about whether the Directors
Following the recommendation of the Audit Committee, we were appointed by
considered it appropriate to adopt the going concern basis of accounting.
the Board of Directors on 15 March 2018 to audit the ﬁnancial statements for the
Our responsibilities and the responsibilities of the Directors with respect to going
year ended 31 October 2018 and subsequent ﬁnancial periods. The period of total
concern are described in the relevant sections of this report.
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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 79
Strategic report Governance Financials
## Independent auditor’s report continued
### 
Overview An overview of the scope of our audit
2022 2021 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
Key audit matters Valuation of unquoted
 
risks of material misstatement in the ﬁnancial statements. We also addressed the
investments
risk of management override of internal controls, including assessing whether there
Materiality Company ﬁnancial statements as a whole
was evidence of bias by the Directors that may have represented a risk of material
£21,200,000 (2021: £23,900,000) based on 2% (2021: 2%)
misstatement.
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.
Key audit matter How the scope of our audit addressed the key audit matter

| Valuation | We consider the valuation of | Our sample for the testing of unquoted investments was stratiﬁed according to risk considering, inter alia, the value of |
| --- | --- | --- |
| of unquoted | investments to be the most | individual investments, the nature of the investment, the extent of the fair value movement and the subjectivity of the |
| investments | signiﬁcant audit area as there | valuation technique. |
| (Notes 10 and 12 | is a high level of estimation |  |

For all Investments in our sample we:
to the ﬁnancial uncertainty involved in
Challenged whether the valuation methodology was the most appropriate in the circumstances under the International
statements) determining the unquoted
Private Equity and Venture Capital Valuation (IPEV) Guidelines and the applicable accounting standards. We have
investment valuations.
recalculated the value attributable to the Company, having regard to the application of enterprise value across the capital
There is also an inherent risk of
structures of the portfolio companies.
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.
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## Independent auditor’s report continued
### 
Key audit matter continued How the scope of our audit addressed the key audit matter continued
Valuation For these reasons we For investments sampled that were valued using less subjective valuation techniques (price of recent investment and
of unquoted considered the valuation of calibration to price of recent investment reviewed for changes in fair value) we:
investments unquoted investments to be
• veriﬁed the cost or price of recent investment to supporting documentation;
(Notes 10 and 12 a key audit matter.
• considered whether the investment was an arm’s length transaction through reviewing the parties involved in the
to the ﬁnancial
transaction and checking whether or not they were already investors of the portfolio company;
statements)
• considered whether there were any indications that the cost or price of recent investment was no longer representative of
continued
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.
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## Independent auditor’s report continued
### 
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 |  |  | 2021 |
| --- | --- | --- | --- | --- | --- |
|  |  | £m |  |  | £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 The level of performance materiality applied was set after having considered a number of factors including the
performance materiality 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.
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## Independent auditor’s report continued
### 
Other information
Other Code provisions • Directors’ statement on fair, balanced and
The Directors are responsible for the other information. The other information
understandable set out on Page 75;
comprises the information included in the annual report other than the ﬁnancial
• Board’s conﬁrmation that it has carried out a robust
statements and our auditor’s report thereon. Our opinion on the ﬁnancial statements
assessment of the emerging and principal risks set out
does not cover the other information and, except to the extent otherwise explicitly
on page 50;
stated in our report, we do not express any form of assurance conclusion thereon.
• The section of the annual report that describes the
Our responsibility is to read the other information and, in doing so, consider whether
review of eectiveness of risk management and internal
the other information is materially inconsistent with the ﬁnancial statements or
control systems set out on page 66; and
our knowledge obtained in the course of the audit, or otherwise appears to be
• The section describing the work of the Audit Committee
materially misstated. If we identify such material inconsistencies or apparent material
set out on page 64.
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
Other Companies Act 2006 reporting
have performed, we conclude that there is a material misstatement of this other
Based on the responsibilities described below and our work performed during the
information, we are required to report that fact.
course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to
We have nothing to report in this regard. report on certain opinions and matters as described below.
Strategic report In our opinion, based on the work undertaken in the course
and Directors’ report of the audit:
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going • the information given in the Strategic report and the
concern, longer-term viability and that part of the Corporate Governance Statement Directors’ report for the ﬁnancial year for which the
relating to the Company’s compliance with the provisions of the UK Corporate ﬁnancial statements are prepared is consistent with the
Governance Code speciﬁed for our review. ﬁnancial statements; and
Based on the work undertaken as part of our audit, we have concluded that each of • the Strategic report and the Directors’ report have
the following elements of the Corporate Governance Statement is materially consistent been prepared in accordance with applicable legal
with the ﬁnancial statements or our knowledge obtained during the audit. requirements.
In the light of the knowledge and understanding of the
Going concern and • The Directors’ statement with regards to the
Company and its environment obtained in the course of the
longer-term viability appropriateness of adopting the going concern basis of
audit, we have not identiﬁed material misstatements in the
accounting and any material uncertainties identiﬁed set
Strategic report or the Directors’ report.
out on page 59; and
Directors’ In our opinion, the part of the Directors’ remuneration
• The Directors’ explanation as to their assessment of the
remuneration report to be audited has been properly prepared in
Company’s prospects, the period this assessment covers
accordance with the Companies Act 2006.
and why the period is appropriate set out on page 59.
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## Independent auditor’s report continued
### 
Extent to which the audit was capable of detecting irregularities, including fraud
Other Companies Act 2006 reporting continued
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
Matters on which we We have nothing to report in respect of the following
We design procedures in line with our responsibilities, outlined above, to detect material
are required to report matters in relation to which the Companies Act 2006
misstatements in respect of irregularities, including fraud. The extent to which our
by exception requires us to report to you if, in our opinion:
procedures are capable of detecting irregularities, including fraud is detailed below:
• adequate accounting records have not been kept, or
Non-compliance with laws and regulations
returns adequate for our audit have not been received
from branches not visited by us; or 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
• the ﬁnancial statements and the part of the Directors’
order to obtain an understanding of the Company’s policies and procedures regarding
remuneration report to be audited are not in agreement
compliance with laws and regulations. We have therefore considered the signiﬁcant
with the accounting records and returns; or
laws and regulations to be the Companies Act 2006, the FCA listing and DTR rules,
• certain disclosures of Directors’ remuneration speciﬁed the principles of the UK Corporate Governance Code, industry practice represented
by law are not made; or by the Statement of Recommended Practice: Financial Statements of Investment
Trust Companies and Venture Capital Trusts (‘the SORP’) and updated in 2022 with
• we have not received all the information and
consequential amendments and the applicable ﬁnancial reporting framework. We also
explanations we require for our audit.
considered the Company’s qualiﬁcation as a VCT under UK tax legislation.
Our procedures in respect of the above included:
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are • obtaining an understanding of the control environment in monitoring compliance
responsible for the preparation of the ﬁnancial statements and for being satisﬁed that with laws and regulations;
they give a true and fair view, and for such internal control as the Directors determine is • agreement of the ﬁnancial statement disclosures to underlying supporting
necessary to enable the preparation of ﬁnancial statements that are free from material documentation;
misstatement, whether due to fraud or error.
• enquiries of the Portfolio Manager and those charged with governance relating
In preparing the ﬁnancial statements, the Directors are responsible for assessing the to the existence of any non-compliance with laws and regulations;
Company’s ability to continue as a going concern, disclosing, as applicable, matters • obtaining the VCT compliance reports prepared by management’s expert during the
related to going concern and using the going concern basis of accounting unless the year and as at year end and reviewing their calculations to check that the Company
Directors either intend to liquidate the Company or to cease operations, or have no was meeting its requirements to retain VCT status; and
realistic alternative but to do so.
• reviewing minutes of meeting of those charged with governance for the period for
instances of non-compliance with laws and regulations.
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.
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## Independent auditor’s report continued
### 
Auditor’s responsibilities for the audit of the ﬁnancial statements continued 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
Fraud
misstatement due to fraud is higher than the risk of not detecting one resulting
We assessed the susceptibility of the ﬁnancial statement to material misstatement
from error, as fraud may involve deliberate concealment by, for example, forgery,
including fraud.
misrepresentations or through collusion. There are inherent limitations in the audit
Our risk assessment procedures included:
procedures performed and the further removed non-compliance with laws and
• enquiry with the Portfolio Manager and those charged with governance regarding regulations is from the events and transactions reﬂected in the ﬁnancial statements,
any known or suspected instances of fraud; the less likely we are to become aware of it.
• review of minutes of meeting of those charged with governance for any known or A further description of our responsibilities is available on the Financial Reporting
suspected instances of fraud; Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms
• discussion amongst the engagement team as to how and where fraud might occur part of our auditor’s report.
in the ﬁnancial statements; and
Use of our report
• considering management fees and performance targets and the related ﬁnancial
This report is made solely to the Company’s members, as a body, in accordance with
statement areas impacted by these.
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken
Based on our risk assessment, we considered the areas most susceptible to fraud to be so that we might state to the Company’s members those matters we are required
the valuation of unquoted investments and management override of controls. 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
Our procedures in respect of the above included:
Company and the Company’s members as a body, for our audit work, for this report,
• the procedures set out in the Key Audit Matters section above;
or for the opinions we have formed.
• 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 Vanessa-Jayne Bradley (Senior Statutory Auditor)
• tested journals posted in preparation of the ﬁnancial statements and evaluating For and on behalf of BDO LLP, Statutory Auditor
whether there was evidence of bias by the Portfolio Manager and Directors that London, United Kingdom
represented a risk of material misstatement due to fraud. 24 April 2023
We also communicated relevant identiﬁed laws and regulations and potential fraud
risks to all engagement team members who were all deemed to have appropriate
BDO LLP is a limited liability partnership registered in England and Wales
competence and capabilities and remained alert to any indications of fraud or
(with registered number OC305127).
non-compliance with laws and regulations throughout the audit.
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## Income statement
Year to 31 December 2022 Year to 31 December 2021

|  |  |  | Revenue |  |  | Capital | Total | Revenue |  |  | Capital | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Notes |  | £’000 |  |  | £’000 | £’000 | £’000 |  |  | £’000 | £’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 |  | 8 |  | (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.
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## 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
1

|  | Applications cash | 13 | 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 |  |  |  |  |  | 27 |  |  |  | 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 |  | 9 |  |  | 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
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## Statement of changes in equity

|  |  | Capital | Special |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | redemption | distributable | Capital reserve | Capital reserve | Revenue |  |
|  |  |  |  | 1 | 1 |  | 1 |
| Share capital | Share premium | reserve | reserve | realised | unrealised | reserve | Total |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’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.
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## Statement of changes in equity continued

|  |  | Capital | Special |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | redemption | distributable | Capital reserve | Capital reserve | Revenue |  |
|  |  |  |  | 1 | 1 |  | 1 |
| Share capital | Share premium | reserve | reserve | realised | unrealised | reserve | Total |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 89
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## 

|  | Year to 31 December |  | Year to 31 December |  |
| --- | --- | --- | --- | --- |
|  | 2022 |  | 2021 |  |
| Notes |  | £’000 |  | £’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 Capital valuation policies are those that are most important to the manifestation of
Titan is a Public Limited Company (plc) incorporated in England and Wales and its Titan’s ﬁnancial position and that require the application of subjective and complex
registered oce is at 6th Floor, 33 Holborn, London EC1N 2HT. 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
Titan has been approved as a Venture Capital Trust by HMRC under Section 259 of the
critical accounting policies that are declared will not necessarily result in material
Income Taxes Act 2007. The shares of Titan were ﬁrst admitted to the Ocial List of the
changes to the ﬁnancial statements in any given period but rather contain a potential
UK Listing Authority and trading on the London Stock Exchange on 28 December 2007
for material change. The main accounting and valuation policies used by Titan are
and can be found under the TIDM code OTV2. Titan is premium listed.
disclosed in the notes below. Whilst not all of the signiﬁcant accounting policies require
The principal activity of Titan is to invest in a diversiﬁed portfolio of UK smaller subjective or complex judgements, Titan considers that the following accounting
companies in order to generate capital growth over the long term as well as an policies should be considered critical.
attractive tax-free dividend stream.
Titan has designated all ﬁxed asset investments as being held at fair value through
The ﬁnancial statements are presented in sterling (£) to the nearest £’000. The proﬁt or loss; therefore all gains and losses arising from investments held are taken
functional currency is also sterling (£). 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
Basis of preparation
assets designated as being at fair value through proﬁt or loss. Corporate bonds (part
The ﬁnancial statements have been prepared on a going concern basis under the
of current asset investments) are held at fair value through proﬁt or loss.
historical cost convention, except for the measurement at fair value of certain ﬁnancial
instruments, and in accordance with UK Generally Accepted Accounting Practice Investments are regularly reviewed to ensure that the fair values are appropriately
(GAAP), including Financial Reporting Standard 102 – ‘The Financial Reporting Standard stated. Quoted investments are valued in accordance with the bid-price on the
applicable in the United Kingdom and Republic of Ireland’ (FRS 102), and with the relevant date, unquoted investments are valued in accordance with current IPEV
Companies Act 2006 and the Statement of Recommended Practice (SORP) ‘Financial valuation guidelines, although this does rely on subjective estimates such as
Statements of Investment Trust Companies and Venture Capital Trusts (July 2022)’. appropriate sector earnings or revenue-based multiples, forecast results of portfolio
companies, asset values of subsidiary companies and liquidity or marketability of the
The principal accounting policies have remained unchanged from those set out in
investments held.
Titan’s 2021 annual report and ﬁnancial statements. A summary of the principal
accounting policies is set out in the notes. Although Titan believes that the assumptions concerning the business environment
and estimates of future cash ﬂows are appropriate, changes in estimates and
Titan presents its Income Statement in a tri-columnar format to give shareholders
assumptions could require changes in the stated values. This could lead to additional
additional detail of the performance of Titan, split between items of a revenue or
changes in fair value in the future.
capital nature as required by the SORP.
Revenue and capital
The preparation of the ﬁnancial statements requires management to make
judgements and estimates that aect the application of policies and reported The revenue column of the Income Statement includes revenue income and revenue
amounts of assets, liabilities, income and expenses. Estimates and assumptions expenses. The capital column includes changes in fair value of investments, as well
mainly relate to the fair valuation of the ﬁxed asset investments, particularly unquoted as gains and losses on disposal and any capital dividends received. Gains and losses
investments. Estimates are based on historical experience and other assumptions arising from changes in fair value of investments are recognised as part of the capital
that are considered reasonable under the circumstances. The estimates and the return within the Income Statement. Investment management fees are split between
assumptions are under continuous review with particular attention paid to the carrying revenue (5%) and capital (95%) in the same way that the income streams are derived.
value of the investments.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 91
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Governance

Financials

# Notes to the financial statements continued

## 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 sufficient 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 9.9(f)). Titan has not consolidated the assets and liabilities of Zenith Holding Company. Zenith Holding Company made a profit of £10,515 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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## continued
2. Investment income The performance fee has been wholly attributed to capital. For more details please
refer to Note 19.
Accounting policy
The Portfolio Manager provides investment management services through agreements
Investment income includes interest earned on money market funds.
with Octopus AIF Management Limited and Titan. It also provides non-investment
Dividend income is shown net of any related tax credit.
services to Titan under a non-investment services agreement. No compensation is
Dividends receivable are brought into account when Titan’s right to receive
payable if the agreement is terminated by either party, if the required notice period is
payment is established and there is no reasonable doubt that payment
given. The fee payable, should insucient notice be given, will be equal to the fee that
will be received. Fixed returns on debt and money market funds are
would have been paid should continuous service be provided, or the required notice
recognised so as to reﬂect the eective interest rate, provided there is no
period was given. The basis upon which the management fee is calculated is disclosed
reasonable doubt that payment will be received in due course.
within Note 19 of the ﬁnancial statements.
Disclosure
4. Other expenses
Year to Year to
31 December 31 December
Accounting policy
2022 2021
£’000 £’000 Other expenses are accounted for on an accruals basis and are charged
wholly to revenue.
Money market funds 577 3
Loan note interest receivable 287 497 The transaction costs incurred when purchasing or selling assets are
written o to the Income Statement in the period that they occur.

| Total investment income 864 |  | 500 |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Year to |  | Year to |
| 3. Investment management fees |  |  |  | 31 December |  | 31 December |  |
|  |  |  |  |  | 2022 |  | 2021 |
|  | Accounting policy |  |  |  | £’000 |  | £’000 |
|  | For the purposes of the revenue and capital columns in the Income |  | Ongoing adviser charges and trail commission |  | 3,085 |  | 3,202 |

Statement, the management fee has been allocated 5% to revenue and 95%
Accounting and administration services 1,893 1,723
to capital, in line with the Board’s expected long-term return in the form of
Impairment of accrued loan note interest receivable 373 572
income and capital gains respectively from Titan’s investment portfolio.
Listing fees 236 447
Depositary fees 336 278
Disclosure
Registrar’s fees 149 188
Year to 31 December 2022 Year to 31 December 2021
1

|  |  |  |  |  |  |  |  |  | Directors’ remuneration | 190 | 179 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Revenue |  | Capital | Total | Revenue |  | Capital | Total |  |  |  |
|  |  | £’000 | £’000 | £’000 |  | £’000 | £’000 | £’000 | D&O insurance | 117 | 143 |
| Investment |  |  |  |  |  |  |  |  | Audit fees | 144 | 104 |

management fee 1,125 21,383 22,508 1,033 19,635 20,668
Other fees 537 459
Performance fee — — — — 63,943 63,943
Total 7,060 7,295
Total 1,125 21,383 22,508 1,033 83,578 84,611 1. Includes employers’ NI.
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## continued
4. Other expenses continued Disclosure
Total ongoing charges are capped at 2.5% of net assets. For the year to The corporation tax charge for the period was £nil (2021: £nil).
31 December 2022 the ongoing charges were 2.2% of net assets (2021: 2.0%). This is
Year to Year to
calculated by summing the expenses incurred in the period (excluding ongoing IFA

|  |  | 31 December |  |  | 31 December |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| charges and non-recurring expenses) divided by the average NAV throughout the period. |  |  |  | 2022 |  |  | 2021 |
|  |  |  |  | £’000 |  |  | £’000 |
|  | (Loss)/Proﬁt on ordinary activities before tax |  | (319,215) |  |  | 216,557 |  |

5. Directors’ remuneration
Current tax at 19% (2021: 19%) (60,568) 41,146
Total Directors’ fees paid during the year were £171,000 (2021: £167,000). Employers’
Eects of:
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 Non-taxable income — (11)
received any other remuneration or beneﬁt from Titan during the period. Titan has no Non-taxable capital loss/(gain) 56,368 (58,503)
employees other than Non-Executive Directors. The average number of Non-Executive

|  | Non-deductible expenses |  | 64 |  | 47 |
| --- | --- | --- | --- | --- | --- |
| Directors in the period was ﬁve (2021: six). |  | 1 |  |  |  |
|  | Zenith Holding Company distribution |  | — | 4,750 |  |

Excess management expenses on which deferred
6. Tax on ordinary activities tax not recognised 5,450 16,540
2
Tax rate dierences (1,314) (3,969)
Accounting policy
Total current tax charge — —
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/ 1. In 2021, £25 million was distributed from Zenith Holding Company to Titan following the sale of Calastone,
which is taxable income for Titan.
gain and expenditure/loss is allocated between capital and revenue return
2. Tax rate dierence due to tax charge for the year being calculated at 19% and excess management
on the ‘marginal’ basis as recommended in the SORP.
expenses on which deferred tax is not recognised being calculated at 25%.
Deferred tax is recognised in respect of all timing dierences at the
Unrelieved tax losses of £186,669,000 (2021: £164,870,000) are estimated to be
reporting date. Timing dierences are dierences between taxable proﬁts
carried forward at 31 December 2022 (subject to completion of Titan’s tax return)
and total income as stated in the ﬁnancial statements that arise from the
and are available for oset against future taxable income, subject to agreement
inclusion of income and expenses in tax assessments in periods dierent
with HMRC. Titan has not recognised the deferred tax asset of £46,667,000 (2021:
from those in which they are recognised in ﬁnancial statements.
£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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## continued
7. Dividends 8. Earnings per share
Year to 31 December 2022 Year to 31 December 2021
Accounting policy
Dividends payable are recognised as distributions in the ﬁnancial Revenue Capital Total Revenue Capital Total
statements when Titan’s liability to make the payment has been
(Loss)/proﬁt attributable
established. This liability is established on the record date, the date on
to Ordinary shareholders
which those shareholders on the share register are entitled to the dividend.
(£’000) (7,321) (311,894) (319,215) (7,828) 224,385 216,557
(Loss)/proﬁt per
Disclosure
Ordinary share (p) (0.6)p (24.0)p (24.6)p (0.7)p 20.0p 19.3p
Year to Year to
The total earnings per share is based on 1,297,081,006 (2021: 1,122,053,322) Ordinary
31 December 31 December
shares, being the weighted average number of Ordinary shares in issue during

|  | 2022 | 2021 |  |
| --- | --- | --- | --- |
|  | £’000 | £’000 | the period. |
| Dividends paid in the year |  |  | There are no potentially dilutive capital instruments in issue and so no diluted |
| Previous year’s second interim dividend – 3.0p |  |  | return per share ﬁgures are relevant. The basic and diluted earnings per share are |
| (2021: 3.0p) 38,700 33,629 |  |  | therefore identical. |

Current period’s interim dividend – 2.0p
(2021: 8.0p) 27,520 102,340
9. Net asset value per share

| 66,220 | 135,969 |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  | 31 December |  | 31 December |  |
|  |  |  | 2022 |  | 2021 |

Dividends in respect of the year

|  |  |  | Net assets (£) | 1,051,760,000 |  | 1,373,040,000 |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Interim dividend paid – 2.0p (2021: 8.0p) | 27,520 | 102,340 |  |  |  |  |  |
|  |  |  | Ordinary shares in issue | 1,367,949,929 |  | 1,298,498,396 |  |
| Second interim dividend – 3.0p (2021: 3.0p) | 41,038 | 38,955 |  |  |  |  |  |
|  |  |  | NAV per share (p) |  | 76.9 |  | 105.7 |
|  | 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.
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## continued
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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## continued
10. Fixed asset investments continued contemporaneous market inputs generate fair value at the investment date
and that the same valuation techniques using updated market inputs as of
Fair value hierarchy continued
each subsequent reporting date will generate fair value at each such date.
There has been one transfer between these classiﬁcations in the year (2021: one).
This approach will notably help capture any risks associated with a lack of
The change in fair value of Titan’s investments for the current and previous year has
liquidity in the minority holding of an unquoted investment and may be
been recognised through the Income Statement.
further adjusted to reﬂect the trading performance of the portfolio company
All items held at fair value through proﬁt or loss were designated as such upon initial
versus expectations as at the investment.
recognition. Movements in investments at fair value through proﬁt or loss during the
(iii) premiums, to the extent that they are considered capital in nature, and that
year to 31 December 2022 are summarised below and in Note 12.
they will be received upon repayment of loan stock investments, are accrued
The most critical estimates, assumptions and judgements relate to the determination at fair value when Titan receives the right to the premium and when considered
of the carrying value of investments at ‘fair value through proﬁt and loss’ (FVTPL). recoverable;
All investments held by Titan are classiﬁed as FVTPL and measured in accordance with (iv) for investments in early or development stages, where there are no current or
the International Private Equity and Venture Capital Valuation (IPEV) guidelines, as short-term future revenues expected, the most appropriate valuation approach
updated in December 2018 (and as updated by Special Valuation guidance issued in to measure fair value may be based on calibrating the latest pricing round using
March 2020). For investments actively traded on organised ﬁnancial markets, fair value qualitative milestones. These milestones provide a directional indication of the
is generally determined by reference to Stock Exchange market quoted bid prices at the movement in fair value;
close of business on the balance sheet date.
(v) where a number of discreet outcomes can be expected for an investment, a
Unquoted investments are stated at fair value by the Directors at each measurement simpliﬁed probability-weighted expected return model may be used to determine
date in accordance with appropriate valuation techniques, which are consistent with fair value.
the IPEV guidelines:
(vi) where appropriate, an income approach may be used.
(i) the price of a recent investment (PRI), if resulting from an orderly transaction, is
Capital gains and losses on investments, whether realised or unrealised, are dealt with
assumed to represent fair value as of the transaction date. At every subsequent
in the proﬁt and loss and revaluation reserves and movements in the period are shown
measurement date, the PRI may remain an appropriate indicator of fair value,
in the Income Statement. All ﬁgures are shown net of any applicable transaction
however as its validity is eroded over time, adequate consideration will be given to
costs incurred by Titan. All investments are initially recognised at transaction price
the current facts and circumstances, including, but not limited to, changes in the
and subsequently measured at fair value. Changes in fair value are recognised in the
market or changes in the performance of the portfolio company. We may solely rely
Income Statement.
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; 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
(ii) where a recent transaction is not deemed to be representative of fair value, a
permanently below the price of recent investment, the loss is treated as a realised
market approach may be considered. This technique involves the application of an
loss, even though the investment is still held. The Board assesses the portfolio for
appropriate multiple to a performance measure (typically revenue, but potentially
such investments and, after agreement with the Portfolio Manager, will agree the
also EBITDA) in order to derive the value of the business:
values that represent the extent to which an investment loss has become realised.
– appropriate multiples will usually be derived by reference to a current
This is based upon an assessment of objective evidence of that investment’s future
market-based multiple, as reﬂected in market valuations of comparable
prospects, to determine whether there is potential for the investment to recover
quoted companies or the price at which comparable companies have
in value.
changed ownership, to the extent this information is publicly available;
or calibration to the PRI validates that the valuation techniques using
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10. Fixed asset investments continued 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
Disclosure
valuation methodologies which notably extrapolate from observable market data for
Level 1: Quoted Level 3: Unquoted
comparable assets. Further details in respect of the methods and assumptions applied
investments investments Total
£’000 £’000 £’000 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
Valuation and net book amount:
assumptions is given in Note 16.
Book cost 9,124 614,342 623,466

| Cumulative revaluation 68,295 313,592 381,887 |  | Exits |  |  |  |
| --- | --- | --- | --- | --- | --- |
| Valuation at 1 January 2022 | 77,419 927,93 4 1,005,353 |  |  |  | Total |
|  |  |  | Area of | Year of | investment |

Movement in the period:
Name of investment ﬁrst cost Date
Purchases at cost — 156,973 156,973 company focus investment £’000 Acquirer of exit
1
Disposal proceeds (2) (50,476) (50,478) Amplience B2B Dec 2010 13,634 Farview Feb 2022
1

| (Loss)/gain on disposal of investments (28) 94 66 |  | Limited | software |  | Content LP |  |
| --- | --- | --- | --- | --- | --- | --- |
| Revaluation in period (75,150) (209,315) (284,465) |  | BehavioSec | Deep | Sep 2014 4,229 LexisNexis® |  | Apr 2022 |
|  |  | Inc (trading as | tech |  | Risk Solutions |  |
| Valuation at 31 December 2022 2,239 | 825,210 827,4 49 |  |  |  |  |  |

BehavioSec)
Book cost at 31 December 2022 8,963 730,639 739,602
Streethub Limited Consumer Dec 2013 10,513 Made.Com May 2022
Cumulative revaluation at
(trading as Trouva) Design Ltd
31 December 2022 (6,724) 94,571 87,8 47
Fluidly Limited B2B Sep 2017 2,299 OakNorth May 2022
Valuation at 31 December 2022 2,239 825,210 827,4 49
software International
1. Consists of both cash proceeds (£45.8 million) and retention proceeds (£4.6 million) in relation to exits
(UK) Limited
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 Digital B2B Sep 2017 9,702 ReliaQuest Jun 2022
retentions received (£16.4 million) in relation to disposals made in prior years. Shadows Ltd software
The investment portfolio is managed with capital growth as the primary focus. Zappy Ltd B2B May 2019 5,090 ABC Fitness Aug 2022

| The loan and equity investments are considered to be one instrument due to the legal | (trading as Glofox) | software |  |  |
| --- | --- | --- | --- | --- |
| binding stated within the investment agreements and so they are combined in the | Casual Speakers | Consumer Jun 2018 6,258 Global University |  | Sep 2022 |
| table shown above. | Limited |  | Systems |  |

(trading as Jolt)
2
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).
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11. Debtors Money market funds and corporate bonds held at year end sit within Level 1 of the fair
31 December 31 December value hierarchy for the purposes of FRS 102, as set out in Note 10.
2022 2021
At 31 December 2022 and 31 December 2021, there were no commitments in respect of
£’000 £’000
current asset investments approved by the Portfolio Manager but not yet completed.
1
Deferred consideration (non-current) 2,592 49,828
1
Deferred consideration (current) 44,364 2,840
13. Current liabilities
Interest receivable on loans included in ﬁxed asset
investments 288 486
Accounting policy
Prepayments 87 64 Financial liabilities and equity instruments are classiﬁed according to
Other debtors 43 225 the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the
Total 47,374 53,443
assets of the entity after deducting all of its ﬁnancial liabilities. Where
1. Disposal proceeds on investments made during the year for which the disposal proceeds have not been received
the contractual terms of share capital do not have any terms meeting
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 the deﬁnition of a ﬁnancial liability then this is classed as an equity
received during the year, oset by £4.6 million deferred consideration related to disposals in 2022 that was still instrument. Dividends and distributions relating to equity instruments are
outstanding at year end and a £6.0 million foreign exchange gain.
debited directly to equity.

|  | 31 December |  | 31 December |  |
| --- | --- | --- | --- | --- |
| 12. Current asset investments |  | 2022 |  | 2021 |
|  |  | £’000 |  | £’000 |

Accounting policy
Accruals 2,097 2,630
Current asset investments comprise money market funds and corporate
Trade creditors 31 63,955
bonds, which are designated as FVTPL. Gains and losses arising from changes
1
Applications cash 23,299 2,687
in fair value of investments are recognised as part of the capital return within
the Income Statement and allocated to the capital reserve unrealised. Total 25,427 69,272
The current asset investments are readily convertible into cash at the 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.
option of Titan. The current asset investments are held for trading, are
actively managed and the performance is evaluated in accordance with Included within trade creditors is an amount of £nil (2021: £63,943,000) relating to a
a documented investment strategy. Information about them is provided performance fee payable to the Portfolio Manager. For more details please refer to
internally on that basis to the Board. Note 19.
Disclosure

|  | 31 December |  |  | 31 December |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  | 2022 |  |  | 2021 |
|  |  |  | £’000 |  |  | £’000 |
| Money market funds |  | 58,701 |  |  | 88,126 |  |
| Corporate bonds |  | 104,244 |  |  | 110,247 |  |
| Total |  | 162,945 |  |  | 198,373 |  |

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14. Share capital Each share has full voting, dividend and capital distribution rights.
31 December 31 December During the period 114,461,503 shares were issued at an average price of 96.9p per share
2022 2021
(2021: 257,291,278 shares were issued at a price of 116.6p). The gross consideration
£’000 £’000
received for these shares was £108 million (£105 million net) including DRIS (2021:
Allotted and fully paid up: 1,367,949,929
£291 million gross, £284 million net).
1
(2021: 1,298,498,396) Ordinary shares of 0.1p 1,368 129,850
Titan repurchased 45,009,970 Ordinary shares for cancellation at a weighted average
1. As granted on 5 July 2022, there was a reduction in the nominal value of the Company’s issued share
price of 92.9p (2021: 33,816,980 shares at a price of 102.1p) at a cost of £41 million
capital from 10p per Ordinary share to 0.1p per Ordinary share.
(2021: £35 million).
The capital of Titan is managed in accordance with its investment policy with a view to the
The total nominal value of the shares repurchased during the ﬁnancial year was
achievement of its investment objective as set out on page 6. Titan is not subject to any
£1,864,442, representing 0.1% of the issued share capital at the year end (2021:
externally imposed capital requirements.
£3,381,698 representing 3.1%).
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 15. Reserves
into any borrowing facilities in the future to fund the acquisition of investments.
When Titan revalues its investments during the year, any gains or losses arising are
The Board considers the distributable reserves and the total return for the year when credited or charged to the Income Statement. Unrealised gains/losses are then
recommending a dividend. In addition, the Board is authorised to make market purchases transferred to the ‘Capital reserve unrealised’. When an investment is sold, any balance
up to a maximum of 14.99% of the issued Ordinary share capital of Titan as at the date of held on the ‘Capital reserve unrealised’ is transferred to the ‘Capital reserve realised’ as
the AGM for the period to the next AGM in accordance with Special Resolution 11 in order to a movement in reserves.
maintain sucient liquidity in Titan’s shares.
Reserves available for potential distribution by way of a dividend are:
Capital management is monitored and controlled using the internal control procedures set
31 December 31 December
out on page 68 of this report. The capital being managed includes equity and ﬁxed-interest
2022 2021
investments, cash balances and liquid resources including debtors and creditors.

|  |  |  |  |  |  |  |  |  |  |  |  | £’000 |  | £’000 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | 31 December |  |  |  | 31 December |  |  |  | Brought forward | 592,479 |  | 55,342 |  |
|  |  |  |  |  | 2022 |  |  |  | 2021 |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Movement in period | 204,356 |  | 537,137 |  |
| 0.1p Ordinary shares |  |  |  |  | ’000 |  |  |  | ’000 |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Carried forward 796,835 |  |  | 592,479 |  |
| Brought forward |  |  | 1,298,498 |  |  |  | 1,075,024 |  |  |  |  |  |  |  |
| Shares issued – fundraise |  |  |  | 97,22 5 |  |  |  | 225,165 |  | During the year there was a share premium cancellation amounting to £212 million |  |  |  |  |
|  | 1 |  |  |  |  |  |  |  |  | (2021: £621 million). This was carried out with the approval of shareholders for the |  |  |  |  |
| Shares issued – DRIS |  |  |  | 17,236 |  |  |  | 32,126 |  |  |  |  |  |  |

purposes of creating sucient distributable reserves.
Shares repurchased for cancellation (45,010) (33,817)
The purpose of the special distributable reserve is to create a reserve which is capable of
Carried forward 1,367,949 1,298,498
being used by Titan to pay dividends and for the purpose of making repurchases of its
1. The Dividend Reinvestment Scheme (DRIS) allows shareholders to elect to receive Ordinary shares instead
own shares in the market (subject to the above restriction) with a view to narrowing the
of a dividend. This is explained further in the Shareholder Information and Contact Details at the back of
discount to NAV at which Titan’s Ordinary shares trade.
this report.
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Financials

# Notes to the financial statements continued

## 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^{1} | 23,299 | 2,630  |
|  Cash at bank | 16,120 | 182,514  |
|  Other debtors | 43 | 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 | 31 | 12  |
|  Unallotted cash^{1} | 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 effects 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 affected 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.

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## continued
16. Financial instruments and risk management continued 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
Market risk continued
reporting date would not have had a signiﬁcant eect on Titan’s net assets for the year.
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
Floating rate
net asset value by 2.9% (£30,362,224). Conversely, a decrease in the multiple used by
Titan’s ﬂoating rate investments comprise interest-bearing money market funds as
10% would decrease the net asset value by 2.9% (£30,546,798). The 10% sensitivity used
at 31 December 2022. Titan’s cash held at bank earns no interest due to the HMRC
provides the most meaningful impact of average multiple changes across the portfolio.
VCT rule which prohibits a VCT from earning more than 30% of its income in non-VCT
42.5% of net assets (54.1% of portfolio value) is valued using PRI multiples, and an qualifying income, and interest earned on bank balances is non-qualifying income.
increase in the PRI used by 5% would increase the net asset value by 2.1% (£22,291,997). The benchmark rate which determines the rate of interest receivable on Titan’s money
Conversely, a decrease in the PRI used by 5% would have a minimal impact on the
market investment is the Bank of England base rate, which was 3.5% at 31 December
portfolio value given the majority of investments have downside protection achieved
2022. The amounts held in ﬂoating rate investments at the balance sheet date were as
through structuring. The 5% sensitivity used provides the most meaningful impact of
follows:
average PRI changes across the portfolio.
31 December 2022 31 December 2021
34.5% of net assets (37.4% of portfolio value) is exposed to changes in the foreign
£’000 £’000
exchange rate, of which 22.8% of net assets is exposed to USD, 3.4% is exposed to EUR,
Money market funds 58,701 88,126
while 8.3% is exposed to more than one foreign currency. An increase in the rate of 5%
Total 58,701 88,126
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
A 1% increase in the base rate would increase income receivable from these
used provides the most meaningful impact of average foreign exchange rate changes
investments and the net assets for the year by £587,000 (2021: £881,000).
across the portfolio.
Credit risk
Interest rate risk
There were no signiﬁcant concentrations of credit risk to counterparties at
Some of Titan’s ﬁnancial assets are interest-bearing, of which some are at ﬁxed rates
31 December 2022. By fair value, no individual investment exceeded 9.8% (2021: 11%)
and some variable. As a result, Titan is exposed to fair value interest rate risk due to
of Titan’s net assets at 31 December 2022.
ﬂuctuations in the prevailing levels of market interest rates.
Credit risk is the risk that a counterparty to a ﬁnancial instrument will fail to discharge
Fixed rate an obligation or commitment that it has entered into with Titan. The Portfolio
The table below summarises weighted average eective interest rates for the ﬁxed Manager and the Board carry out a regular review of counterparty risk. The carrying
interest-bearing ﬁnancial instruments: values of ﬁnancial assets represent the maximum credit risk exposure at the balance
sheet date.
As at 31 December 2022 As at 31 December 2021

|  |  |  |  | Weighted |  |  |  |  |  | Weighted |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | average |  |  |  |  |  | average |  |
|  | Total |  |  | time for |  |  | Total |  |  | time for |  |
| ﬁxed rate |  | Weighted |  |  | which | ﬁxed rate |  | Weighted |  |  | which |
| portfolio |  |  | average |  | rate is | portfolio |  |  | average |  | rate is |
| by value |  |  | interest |  | ﬁxed | by value |  |  | interest |  | ﬁxed |
|  | £’000 |  | rate % |  | (years) |  | £’000 |  | rate % |  | (years) |

Fixed rate investments in
unquoted companies 3,183 7. 25% 4.4 8,010 6.59% 4.9
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## continued
16. Financial instruments and risk management continued Titan’s listed money market funds are considered to be readily realisable as they are of
high credit quality as outlined above.
Credit risk continued
At 31 December 2022, Titan’s ﬁnancial assets exposed to credit risk comprised of the Titan’s liquidity risk is managed on a continuing basis by the Portfolio Manager in
following: accordance with policies and procedures laid down by the Board. Titan’s overall
liquidity risks are monitored on a quarterly basis by the Board.

| 31 December |  | 31 December |  |  |
| --- | --- | --- | --- | --- |
|  | 2022 |  | 2021 | Titan maintains sucient investments in cash and readily realisable securities to pay |
|  | £’000 |  | £’000 |  |

accounts payable and accrued expenses. At 31 December 2022 these investments were

| Cash at bank | 16,120 | 182,514 | valued at £179,062,000 (2021: £380,290,000). |
| --- | --- | --- | --- |
| Applications cash | 23,299 | 2,630 |  |
| Money market funds | 58,701 | 88,126 |  |

17. Post balance sheet events
Corporate bonds 104,244 110,247
The following other events occurred between the balance sheet date and the signing
Fixed rate investments in unquoted companies 3,183 8,010 of these ﬁnancial statements:
Total 205,547 391,527
• 13 new investments completed totalling £36.1 million;
Credit risk relating to listed money market funds is mitigated by investing in a portfolio • 6 follow-on investments completed totalling £9.3 million;
of investment instruments of high credit quality, comprising securities issued by major
• the NAV as at 31 December 2022 of 76.9p was announced on 4 April 2023 as a correction
UK companies and institutions. Credit risk relating to loans to and preference shares in
to the NAV announced on 29 March 2023 and was used for recent share transactions;
unquoted companies is considered to be part of market risk.
• 135.3 million shares were issued on 29 March 2023 at an allotment price of 81.7p
The investments in money market funds and corporate bonds are uncertiﬁed. under the Oer which closed on 5 April 2023;
Credit risk arising on the sale of investments is considered to be small due to the short • 0.5 million shares were issued on 4 April 2023 at a corrected allotment price of
settlement and the contracted agreements in place with the settlement lawyers. 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
Titan’s deposit and current accounts are maintained with HSBC Bank plc. The Portfolio
under the Oer which closed on 5 April 2023;
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 • full disposal of Patch Gardens Limited in January 2023 in exchange for shares in
HSBC deteriorate signiﬁcantly, the Portfolio Manager will move the cash holdings to Arena Online Limited; and
another bank. • full disposal of Commazero Limited in February 2023 to Paystratus Group Limited.
Liquidity risk
Titan’s ﬁnancial assets include investments in unquoted equity securities which are not 18. Contingencies, guarantees and ﬁnancial commitments
traded on a recognised stock exchange and which generally may be illiquid. They also Provided that an intermediary continues to act for a shareholder and the shareholder
include investments in AIM-quoted companies, which, by their nature, involve a higher continues to be the beneﬁcial owner of the shares, intermediaries will be paid
degree of risk than investments on the main market. As a result, Titan may not be an annual IFA commission of 0.5% of advised investors’ gross NAV from Titan.
able to realise some of its investments in these instruments quickly at an amount close IFA charges of £3,084,000 were expensed during the period (2021: £3,202,000) and
to their fair value in order to meet its liquidity requirements, or to respond to speciﬁc there was £1,622,000 (2021: £1,932,000) outstanding at the period end.
events such as deterioration in the creditworthiness of any particular issuer.
There were £nil contingencies, guarantees or ﬁnancial commitments as at
31 December 2022 (2021: £nil).
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Financials

# Notes to the financial statements continued

## 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 Offer 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 175.9p, 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/

Octopus Titan VCT plc | Annual report and financial statements 2022

104
Strategic report Governance Financials
## continued
20. Related party transactions 21. Voting rights and equity management
Titan owns Zenith Holding Company Limited, which owns a share in Zenith LP, a fund The following table shows the percentage of voting rights held by Titan for each of the
managed by Octopus. top ten investments held in Titan. Titan has no other substantial interests that require
separate disclosure.
In the year, Octopus Investments Nominees Limited (OINL) has purchased Titan shares
from shareholders to correct administrative issues, on the understanding that shares Investments % equity held by Titan
will be sold back to Titan in subsequent share buybacks. As at 31 December 2022, no
Many Group Ltd (trading as ManyPets) 7.5%
Titan shares were held by OINL (2021: 7,637 shares) as beneﬁcial owner. Throughout
Amplience Limited 23.6%
the period to 31 December 2022, OINL purchased 729,365 shares (2021: 24,359 shares)
Permutive Inc. 17.9 %
at a cost of £678,000 (2021: £27,000) and sold 737,002 shares (2021: 16,816 shares) for
Digital Therapeutics, Inc. (trading as Quit Genius) 15.4%
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. Mr & Mrs Oliver Ltd (trading as Skin+Me) 20.6%
Any such future transactions, where OINL takes over the legal and beneﬁcial ownership Orbital Express Launch Limited (trading as Orbex) 11.5%
of Company shares, will be announced to the market and disclosed in annual and
Big Health Limited 10.8%
half-yearly reports.
vHive Tech Limited 19.0%
Several members of the Octopus investment team hold non-executive directorships
Token.IO Limited 14.1%
as part of their monitoring roles in Titan’s portfolio companies, but they have no
Sofar Sounds Limited 10.7%
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 At 31 December 2022, the Company held signiﬁcant investments, amounting to 20%
Octopus Group Holdings Ltd during the year, which have been fully disposed of or more of the equity capital of an undertaking, in the following companies:
as at year end. The Directors received the following dividends from Titan:
£’000 £’000 £’000

|  |  | Year to |  |  |  | Year to |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Investment in loan |  |  | Total |  |  |  |  |  |
|  | 31 December |  |  |  | 31 December |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  | Equity investment |  |  | stock and | investment |  |  |  |  |  |  |
|  |  |  | 2022 |  |  |  | 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  | (Ordinary shares) |  | preference shares |  | (at cost) |  |  |  |  | Registered address |  |
|  |  |  |  | £ |  |  |  | £ |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Zenith |  |  | 8,963 0 8,963 94 Solaris Avenue |  |  |  |  |  |  |  |  |  |
| Tom Leader (Chair since 14 June 2022) |  | 1,640 |  |  |  | 2,148 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Holding |  |  |  |  |  |  |  |  |  |  | Camana Bay |  |
| John Hustler (Chair until 14 June 2022) |  | 5,569 |  |  |  | 11,983 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Company |  |  |  |  |  |  |  |  |  |  | Grand Cayman |  |
| Matt Cooper |  | 117,661 |  |  |  | 207,754 |  |  |  | 1 |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Limited |  |  |  |  |  |  |  |  |  |  |  | KY1-1108 |
| Jane O’Riordan |  | 6,530 |  |  |  | 11,347 |  |  | Amplience 6,121 7,513 13,634 Tower House |  |  |  |  |  |  |  |  |  |  |  |  |
| Mark Hawkesworth (resigned on 7 June 2021) |  | 1,061 |  |  |  | 10,659 |  |  |  |  |  |  |  |  |  |  |  | 10 Southampton Street |  |  |  |
|  |  | 2,145 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | London WC2E 7HA |  |  |
| Lord Rockley |  |  |  |  |  | 1,427 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | 740 |  |  |  |  |  | Mr & Mrs |  |  | 11,500 0 11,500 The Battleship Building |  |  |  |  |  |  |  |  |  |
| Gaenor Bagley |  |  |  |  |  |  | 713 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Oliver Ltd |  |  |  |  |  |  |  | 179 Harrow Road, London |  |  |  |  |
|  |  |  |  |  |  |  |  |  | (trading as |  |  |  |  |  |  |  |  |  | England, W2 6NB |  |  |

Skin+Me)
1. See Note 1 for further information on Titan’s relationship with Zenith Holding Company.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 105
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## 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.

|  | Investment | Amount invested |  |
| --- | --- | --- | --- |
|  | cost as at |  | in the year to |
| 31 December 2022 |  | 31 December 2022 |  |

1

| Fixed asset investments Investment focus |  | £’000 | £’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 — |  |  |

3

| 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 |

3

| Appear Here Limited | Consumer | 8,509 — |
| --- | --- | --- |
| XYZ Reality Limited Consumer |  | 8,500 — |
| Automata Technologies Limited Health |  | 8,500 8,500 |

3
Intropic Limited Fintech 8,394 8,394
CurrencyFair Limited (trading as Zai) Fintech 8,381 —
3

| Antidote Technologies Ltd | Health | 8,251 — |
| --- | --- | --- |
| Allplants Limited Climate |  | 8,150 900 |
| vHive Tech Ltd Deep tech |  | 8,020 4,024 |

3
Elliptic Enterprises Limited Fintech 7,724 —
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 106
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## Appendix continued

|  | Investment | Amount invested |  |
| --- | --- | --- | --- |
|  | cost as at |  | in the year to |
| 31 December 2022 |  | 31 December 2022 |  |

1

| Fixed asset investments Investment focus | £’000 | £’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 |  |

3

| 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 — |

3

| Papercup Technologies Limited | Deep tech | 6,800 6,800 |
| --- | --- | --- |
| Partly Consumer |  | 6,769 6,769 |
| By Miles Limited Fintech |  | 6,732 — |

3
Minoro Limited (trading as Kleene.ai) B2B software 6,724 —
3
Chiaro Technology Limited (trading as Elvie) Health 6,417 —
Biofidelity Ltd Bio 6,343 —
3

| 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 — |

3
Bondaval Limited Fintech 5,899 3,349
Overture Life, Inc Health 5,813 —
3

| 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 — |

3
Lifescore Music Limited Deep tech 5,100 5,100
3
Cazoo Limited Consumer 4,973 —
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 107
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## Appendix continued

|  | Investment | Amount invested |  |
| --- | --- | --- | --- |
|  | cost as at |  | in the year to |
| 31 December 2022 |  | 31 December 2022 |  |

1
Fixed asset investments Investment focus £’000 £’000
3
Impatients N.V. (trading as MyTomorrows) Health 4,905 200
3
Michelson Diagnostics Limited Health 4,795 —
Dogtooth Technologies Limited Deep tech 4,739 —
3
Inﬂow Holdings Inc Health 4,500 4,500
ThoughtRiver Limited Deep tech 4,500 —
3

| 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 — |

4

| 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 |

3

| 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 |

3
Medisafe Project Limited Health 3,664 —
3

| 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 — |

3
CoMind Technologies Limited Deep tech 3,375 —
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 108
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## Appendix continued

|  | Investment | Amount invested |  |
| --- | --- | --- | --- |
|  | cost as at |  | in the year to |
| 31 December 2022 |  | 31 December 2022 |  |

1
Fixed asset investments Investment focus £’000 £’000
3
Inﬁnitopes Bio 3,004 3,004
3
Traﬁ Limited Climate 2,965 —
3
Bloom App Limited Consumer 2,857 2,857
3

| 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 |

Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 109
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## Appendix continued

|  | Investment | Amount invested |  |
| --- | --- | --- | --- |
|  | cost as at |  | in the year to |
| 31 December 2022 |  | 31 December 2022 |  |

1

| Fixed asset investments Investment focus | £’000 | £’000 |
| --- | --- | --- |
| Ribbon Technologies Ltd Consumer | 1,351 1,351 |  |
| Aire Labs Limited Fintech | 1,332 — |  |

3
Kita Earth Climate 1,289 1,289
3

| 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 — |

3
I.F. Technology Ltd (trading as Integrated Finance) Fintech 1,275 —
3

| 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 |

3

| 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.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 110
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Governance

Financials

# 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 Offer 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 Offer 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.

Octopus Titan VCT plc | Annual report and financial statements 2022

1. A 'qualifying holding' consists of up to £3 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.

111
Strategic report Governance Financials
## Shareholder information and contact details continued
Dividends The table below shows the NAV per share and lists the dividends that have been paid
Dividends are paid by Computershare Investor Services PLC (‘Computershare’) on since the launch of Titan:
behalf of Titan. Shareholders who wish to have dividends paid directly into their NAV + cumulative
bank account rather than by cheque to their registered address can complete a Dividends paid dividends
Period ended NAV in period (Total Value)
mandate form for this purpose or complete an instruction electronically by visiting the
30 April 2008 95.0p — 95.0p
Computershare Investor Centre at: www-uk.computershare.com/investor/.
31 October 2008 89.9p — 89.9p
Queries relating to dividends, shareholdings or requests for mandate forms should
30 April 2009 91.5p 0.5p 92.0p
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 31 October 2009 96.1p 0.5p 97.1p
service provider’s tari. Calls outside the United Kingdom will be charged at the 30 April 2010 92.0p 0.5p 93.5p
applicable international rate. Computershare Investor Services PLC are open between 31 October 2010 94.9p 0.5p 96.9p
8.30am-5.30pm, Monday to Friday excluding public holidays in England and Wales. 30 April 2011 92.1p 0.75p 94.85p
Computershare can be contacted in writing at: 31 October 2011 91.5p 0.75p 95.0p
30 April 2012 92.8p 1.0p 97. 3p
The Registrar

| Computershare Investor Services PLC | 31 October 2012 121.9p 1.5p 127.9p |
| --- | --- |
| The Pavilions | 30 April 2013 88.7p 34.0p 128.7p |
| Bridgwater Road | 31 October 2013 95.2p 2.5p 137.7p |

Bristol
30 April 2014 92.2p 2.5p 137. 2p
BS99 6ZZ
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
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 112
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Financials

# 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 offers 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 investonsupport@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.

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## Shareholder information and contact details continued
Notiﬁcation of change of address Warning to shareholders
Communications with shareholders are mailed to the registered address held on the Many companies are aware that their shareholders have received unsolicited
share register. In the event of a change of address or other amendment, this should be phone calls or correspondence concerning investment matters. These are typically
notiﬁed to Titan’s registrar, Computershare, under the signature of the registered holder from overseas-based ‘brokers’ who target UK shareholders oering to sell them what
or via the Computershare Investor Centre at: www-uk.computershare.com/investor/. often turn out to be worthless or high risk shares in US or UK investments. They can
Computershare’s contact details are provided on page 116. 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
Other information for shareholders
company reports.
Shareholders can obtain a full copy of Titan’s annual report as well as previously
Please note that it is very unlikely that either Octopus or Titan’s registrar would make
published annual reports and interim reports on the Octopus website at
unsolicited telephone calls to shareholders and that any such calls would relate only
octopustitanvct.com.
to ocial documentation already circulated to shareholders and never in respect of
All other statutory information can also be found here.
investment advice.
Electronic communications If you are in any doubt about the authenticity of an unsolicited phone call, please call
We also publish reports and accounts and all other correspondence electronically. Octopus on 0800 316 2295.
This cuts the cost of printing and reduces the impact on the environment.
The Financial Conduct Authority has also issued guidelines on how to
If, in future, you would prefer to receive an email telling you a report is
avoid share fraud and further information can be found on their website:
available to view or to receive documents by email please contact Octopus on
www.fca.org.uk/scamsmart/share-bond-boiler-room-scams.
0800 316 2295 or Computershare on 0370 703 6324. Alternatively you can sign
up to receive e-communications via the Computershare Investor Centre at: You can report any share fraud to them by calling 0800 111 6768.
www-uk.computershare.com/investor/.
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## Glossary of terms
Alternative performance measure (APM) Total return (APM)
A ﬁnancial measure of historical or future ﬁnancial performance, ﬁnancial position, Total return is calculated as movement in NAV per share in the period plus dividends
or cash ﬂows, other than a ﬁnancial measure deﬁned or speciﬁed in the applicable paid in the period. Total return on the NAV per share enables shareholders to evaluate
ﬁnancial reporting framework. These APMs will help shareholders to understand and more clearly the performance of Titan, as it reﬂects the underlying value of the
assess Titan’s progress. A number of terms within this glossary have been identiﬁed portfolio at the reporting date.
as APMs.
Total return % (APM)
Net asset value or NAV Total return % is calculated as movement in NAV per share in the period plus dividends
The value of the VCT’s total assets less liabilities. It is equal to the total shareholders’ paid in the period, divided by the NAV per share at the beginning of the period.
funds. 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
Net asset value per share or NAV per share
reporting date.
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. Sustainability % of Titan (APM)
Sustainability % is calculated as the proportion of Titan’s costs that are covered by
Dividend yield (APM)
realisations over the preceding three years. The costs of the VCT include the share
Dividend yield is calculated as dividends paid per share in the period divided by the
buybacks, ordinary dividends and operating costs in the year.
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.
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## Directors and advisers

| Board of Directors | Manager | VCT Status Adviser |
| --- | --- | --- |
| Tom Leader (Chair) | Octopus AIF Management Limited | Shoosmiths LLP (appointed on 24/02/2022) |
|  | 33 Holborn | 1 Bow Churchyard |

Jane O’Riordan
London London
Matt Cooper
EC1N 2HT EC4M 9DQ
Lord Rockley
Tel: 0800 316 2295
Gaenor Bagley Bankers
www.octopusinvestments.com
HSBC Bank plc
31 Holborn
Company Number
Corporate Broker
London
Registered in England & Wales
Panmure Gordon (UK) Limited
EC1N 2HR
No. 06397765
40 Gracechurch Street
London
EC3V 0BT Registrars
Legal Entity Identiﬁer (LEI)
Computershare Investor Services PLC
213800A67IKGG6PVYW75 Tel: 020 7886 2500
The Pavilions
Bridgwater Road
Secretary and Registered Oce Independent Auditor Bristol
BDO LLP BS99 6ZZ
Octopus Company Secretarial Services Limited
33 Holborn 55 Baker Street
Tel: 0370 703 6324
London London
(Calls are charged at the standard geographic rate
EC1N 2HT W1U 7EU
and will vary by provider. Calls from outside the United
Kingdom will be charged at the applicable international
Portfolio Manager Tax Adviser rate.)
Octopus Investments Limited James Cowper Kreston
www.computershare.com/uk
33 Holborn Reading Bridge House
www-uk.computershare.com/investor/
London George Street
EC1N 2HT Reading
Berkshire
Depositary
Tel: 0800 316 2295
RG1 8LS
BNP Paribas Trust Corporation UK Limited
www.octopusinvestments.com
10 Avenue
London
NW1A 6AA
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# 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 adapt 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 offers 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 offer or agreement notwithstanding the expiry of such authority.

8. Authority to allot relevant securities under the ORIS

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 offers 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 offer 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 offers 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 offer 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 offer 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).

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# 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 offers 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 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 offer 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 offer 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).

11. Authority to make market purchases

THAT, in addition to existing authorities, the Company be and is hereby generally and unconditionally authorised to make one or more market purchases (within the meaning of s693(4) of the Act) of Shares provided that:

- a) the maximum number of Shares so authorised to be purchased shall not exceed 233,371,367 Shares, representing approximately 14.99% of the present issued Shares as at the date of this notice;
- b) the minimum price which may be paid for a Share shall be its nominal value;
- c) the maximum price, exclusive of expenses, which may be paid for a Share is an amount equal to the higher of (i) 105% of the average of the middle market quotation for a Share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the Share is contracted to be purchased; and (ii) the amount stipulated by Article 5(6) of the Market Abuse Regulation;
- d) the authority conferred by this Resolution shall (unless previously renewed, varied or revoked in general meeting) expire on the date falling 15 months after the passing of this Resolution or, if earlier, at the conclusion of the Annual General Meeting of the Company to be held in 2024; and

- e) the Company may enter into a contract to purchase its Shares under this authority prior to the expiry of this authority which will or may be executed wholly or partly after the expiry of this authority and the Company may make a purchase of its Shares in pursuance of any such contract.

12. Cancellation of share premium account

THAT, subject to the sanction of the High Court, the amount standing to the credit of the share premium account of the Company, at the date an order is made confirming such cancellation by the Court, be and hereby is cancelled, and the amount by which the share capital is so reduced be credited to a reserve of the Company.

By Order of the Board

Tom Leader

Chair

24 April 2023

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## Notice of Annual General Meeting continued
### Notes:
a) A member entitled to attend and vote at the AGM may appoint one or more e) Any person receiving a copy of the Notice as a person nominated by a member
proxies to attend and vote on his or her behalf. A proxy need not be a member. to enjoy information rights under Section 146 of the Companies Act 2006 (a
‘Nominated Person’) should be aware that the provisions in Notes (a) and (b) above
b) Pursuant to Regulation 41 of the Uncertiﬁcated Securities Regulations 2001,
concerning the appointment of a proxy or proxies to attend the meeting in place
entitlement to attend and vote at the meeting and the number of votes which
of a member, do not apply to a Nominated Person as only shareholders have the
may be cast thereat will be determined by reference to the Register of Members of
right to appoint a proxy. However, a Nominated Person may have a right under an
the Company at close of business on the day which is two days before the day of
agreement between the Nominated Person and the member by whom he or she
the meeting. Changes to entries on the Register of Members after that time shall
was nominated to be appointed, or to have someone else appointed, as a proxy for
be disregarded in determining the rights of any person to attend and vote at the
the meeting. If a Nominated Person has no such proxy appointment right or does
meeting.
not wish to exercise it, he/she may have a right under such an agreement to give
c) A form of proxy is enclosed which, to be eective, must be completed and delivered
instructions to the member as to the exercise of voting rights at the meeting.
to the registrars of the Company, Computershare Investor Services PLC, The
f) Section 319A of the Companies Act 2006 requires the Directors to answer any
Pavilions, Bridgwater Road, Bristol, BS99 6ZY or alternatively, you may register
question raised at the AGM which relates to the business of the meeting although
your proxy electronically at www.investorcentre.co.uk/eproxy, in each case, so
no answer need be given (a) if to do so would interfere unduly with the preparation
as to be received by no later than 48 hours (excluding non-working days) before
of the meeting or involve disclosure of conﬁdential information; (b) if the answer
the time the AGM is scheduled to begin. To vote electronically, you will be asked to
has already been given on the Company’s website; or (c) if it is undesirable in the
provide your Control Number, Shareholder Reference Number and PIN which are
best interests of the Company or the good order of the meeting.
detailed on your proxy form.
Questions from our shareholders in relation to the AGM can be sent via email to
Appointment of a proxy, or any CREST proxy instruction (as described in paragraph
TitanAGM@octopusinvestments.com. The Company may, however, elect to
(d) below) will not preclude a member from subsequently attending and voting at
provide answers to questions raised within a reasonable period of days after the
the meeting should he or she choose to do so. This is the only acceptable means by
conclusion of the AGM.
which proxy instructions may be submitted electronically.
g) Members satisfying the thresholds in Section 527 of the Companies Act 2006
d) To appoint one or more proxies or to give an instruction to a proxy (whether
can require the Company to publish a statement on its website setting out any
previously appointed or otherwise) via the CREST system, CREST messages must
matter relating to (a) the audit of the Company’s accounts (including the auditor’s
be received by the issuer’s agent (ID number 3RA50) not later than 48 hours
report and the conduct of the audit) that are to be laid before the AGM; or (b)
(excluding non-working days) before the time appointed for holding the meeting.
any circumstances connected with an auditor of the Company ceasing to hold
For this purpose, the time of receipt will be taken to be the time (as determined by
oce since the last AGM, that the members propose to raise at the meeting.
the time stamp generated by the CREST system) from which the issuer’s agent is
The Company cannot require the members requesting the publication to pay its
able to retrieve the message. After this time any change of instructions to a proxy
expenses. Any statement required to be placed on the website must also be sent
appointed through CREST should be communicated to the proxy by other means.
to the Company’s auditors no later than the time it makes its statement available
CREST personal members or other CREST sponsored members, and those CREST
on the website. The business which may be dealt with at the meeting includes any
members who have appointed voting service provider(s) should contact their CREST
statement that the Company has been required to publish on its website.
sponsor or voting service provider(s) for assistance with appointing proxies via
CREST. For further information on CREST procedures, limitations and system timings
please refer to the CREST manual. The Company may treat as invalid a proxy
appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of
the Uncertiﬁcated Securities Regulations 2001.
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## Notice of Annual General Meeting continued
### Notes: continued
h) Under Sections 338 and 338A of the Companies Act 2006, members meeting the
threshold requirements in those sections have the right to require the Company:
(i) to give, to members of the Company entitled to receive notice of the meeting,
notice of a resolution which may properly be moved and is intended to be
moved at the meeting; and/or
(ii) to include in the business to be dealt with at the meeting any matters (other
than a proposed resolution) which may be properly included in the business.
A resolution may properly be moved or a matter may properly be included in the
business unless:
(i) (in the case of a resolution only) it would, if passed, be ineective (whether by
reason of inconsistency with any enactment or the Company’s constitution or
otherwise);
(ii) it is defamatory of any person; or
(iii) it is frivolous or vexatious.
Such a request may be in hard copy form or in electronic form, and must identify
the resolution of which notice is to be given or the matter to be included in the
business, must be authorised by the person or persons making it, must be received
by the Company not later than six weeks before the meeting, and (in the case of a
matter to be included in the business only) must be accompanied by a statement
setting out the grounds for the request.
i) A copy of the Notice of AGM and the information required by Section 311A of
the Companies Act 2006 is included on the Company’s website,
octopustitanvct.com. Copies of the Directors’ letters of appointment, the
Register of Directors’ Interests in the Ordinary shares of the Company kept in
accordance with the Listing Rules and a copy of the Memorandum and Articles of
Association of the Company will be available for inspection at the registered oce
of the Company during usual business hours on any weekday from the date of this
notice until the AGM, and at the place of that meeting for at least 15 minutes prior
to the commencement of the meeting until its conclusion.
j) As at 21 April 2023 (being the last practicable date prior to the publication of this
Notice) the Company’s issued share capital consists of 1,556,847,012 Ordinary
shares, carrying one vote each. Therefore, the total voting rights in the Company as
at 21 April 2023 are 1,556,847,012.
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022 120
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Octopus Investments
33 Holborn
London EC1N 2HT
0800 316 2295
investorsupport@octopusinvestments.com
octopusinvestments.com
Octopus Titan VCT plc | Annual report and ﬁnancial statements 2022