## Allianz Technology ## Trust PLC ## Annual Financial Report, 31 December 2022 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Key Information Investment objective Risk diversification Allianz Technology Trust PLC (‘the Company’) invests The Company aims to diversify risk and no holding in the principally in the equity securities of quoted technology portfolio will comprise more than 15% of the Company’s companies on a worldwide basis with the aim of assets at the time of acquisition. The Company aims to achieving long-term capital growth in excess of the Dow diversify the portfolio across a range of technology sub- Jones World Technology Index (sterling adjusted, total sectors. return) (the ‘benchmark’). Gearing Investment policy In normal market conditions gearing will not exceed 10% The investment policy of the Company is to invest in a of net assets but may increase to 20%. The Company’s diversified portfolio of companies that use technology Articles of Association limit borrowing to one quarter of its in an innovative way to gain competitive advantage. called up share capital and reserves. As at 31 December Particular emphasis is placed on companies that are 2022 there was no borrowing facility in place. addressing major growth trends with innovation that replaces existing technology or radically changes Liquidity products and services or the way in which they are In normal market conditions the liquidity of the portfolio, supplied to customers. that is the proportion of the Company’s net assets held in cash or cash equivalents, will not exceed 15% of net What constitutes a technology stock assets but may be increased to a maximum of 30% of net Technology has become a vast and diverse sector. It assets. encompasses those companies that sell technology solutions – from cloud storage to component Derivatives manufacturers to software developers – but also those The Company may use derivatives for investment for whom technology is an intrinsic part of their business purposes within guidelines set down by the Board. – the car makers or ecommerce groups using technology to gain a competitive advantage. In this way, technology Foreign currency stocks may sit across multiple sectors, including The Company’s current policy is not to hedge foreign healthcare, industrials or financial services. currency. As technology becomes ever more pervasive, the lines between technology companies and significant adopters Benchmark are increasingly blurred. Even where companies aren’t One of the ways in which the Company measures its selling technology, technology may be intrinsic to their performance is in relation to its benchmark, which is an success as a company. More companies are becoming index made up of some of the world’s leading technology technology companies all the time as disruptive shares. The benchmark used is the Dow Jones World innovation brings change and displaces incumbent Technology Index (sterling adjusted, total return). The market leaders. The challenge is to understand not only Company’s strategy is to have a concentrated portfolio current technologies, but also future trends and the likely which is benchmark aware rather than benchmark effects. driven. The Company has tended to have a significantly higher than benchmark allocation to high growth, mid Asset allocation cap companies which are considered to be the emerging The Investment Manager does not target specific country leaders in the technology sector. The Investment or regional weightings and aims to invest in the most Manager believes that the successful identification of attractive technology shares on a global basis. The these companies relatively early on in their growth stages, lead portfolio manager aims to identify the leading offers the best opportunity for outperformance over the companies in emerging technology growth sub-sectors. long-term. The majority of the portfolio will comprise mid and large cap technology shares. Overview ## Welcome to your new style ## Annual Financial Report. You may notice that the Allianz Technology Trust 2022 We welcome feedback from both shareholders and other Annual Financial Report (‘AFR’) looks markedly different users of the AFR on the new style reporting. from previous versions. The Board has been conscious Please do have a look at this year’s deeper dive into for many years that public company AFRs have become the technology sector at tinyurl.com/ATT-stakeholder- weighty and expensive documents. At the same time the report-22 or by using your tablet or smartphone camera actual readership of hard copy AFRs has declined and the to scan the QR code below. very large majority of shareholders and other interested parties only access AFRs online. Over the past several years the Board has made efforts to include additional information on the technology sector that may be of interest to shareholders, but also to make more of this information available online via a complementary microsite. Having done this (successfully, we hope) for the past two years, we believe that the responsible next step is to focus on making as much as possible available in an electronic format – we are calling it the ‘Stakeholder Report’ – with the ‘paper’ document reduced to its essentials. ### Contents | Overview | 42 Report of the Remuneration Committee | | --- | --- | | IFC Key Information | 43 Directors’ Remuneration Implementation Report | | 2 Financial Highlights | 46 Directors’ Remuneration Policy Report | | 5 Chairman’s Statement | 47 Statement of Directors’ Responsibilities | 48 Audit & Risk Committee Report Investment Manager’s Review Financial Statements 10 Investment Manager’s Review 51 Independent Auditor’s Report to the Members of Allianz 14 Investment Portfolio Technology Trust PLC 56 Income Statement Strategic Report 57 Balance Sheet 16 Strategic Report 58 Statement of Changes in Equity 22 Section 172 Report: Engagement with Key Stakeholders 59 Notes to the Financial Statements 24 Environmental, Social, Governance (ESG) Research and Stewardship Investor Information 72 Glossary of UK GAAP Performance Measures Directors’ Review and Alternative Performance Measures 26 Directors 73 Glossary of Terms 28 Directors’ Report 74 Investor Information 36 Corporate Governance Statement 77 Notice of Meeting 40 Report of the Management Engagement Committee 41 Report of the Nomination Committee 1 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Financial Highlights As at 31 December for each respective year Net asset value (‘NAV’) per ordinary share Share price per ordinary share ## -40.4% ## -33.6% ### 2022 210.0p ### 2022 231.0p ### 2021 352.5p ### 2021 347.9p 1 Benchmark Performance against benchmark 1250 ## -26.4% % indexed ### 2022 1,832.2 50 | 2021 2,489.3 | Dec 12 Dec 22 | | | | | --- | --- | --- | --- | --- | | | | Allianz Technology Trust | | 2 | | | | Benchmark | 3 | | 1 Performance against sector average 1250 % indexed 50 Dec 12 Dec 22 Allianz Technology Trust 2 Sector average 4 2 Overview As at 31 December for each respective year | Ordinary share price (p) | | | NAV per ordinary share (p) | | | | --- | --- | --- | --- | --- | --- | | | | 352.5 | | | 347.9 | | | 297.0 | | | 291.3 | | 231.0 210.0 164.7 165.4 122.0 128.5 2018 2019 20212020 2022 2018 2019 2021 2020 2022 Premium (discount) of ordinary share price to NAV versus benchmark (%) NAV per share (%) 76.1 | 2.0 | | | | 41.7 | | | --- | --- | --- | --- | --- | --- | | | 1.3 | | 39.0 | | | | | | 28.8 | | | 28.2 | 19.4 9.0 0.1 2020 20222018 2019 2021 2020 20222018 2019 2021 (0.4) -26.4 -33.6 (5.0) Allianz Technology Trust 2 (9.1) Benchmark 3 Comparative figures for 2018, 2019 and 2020 have been restated following the sub-division of 25p Shareholders’ funds (£m) ordinary shares into ten ordinary shares of 2.5p each 1,472.4 on 4 May 2021. 1,229.2 1 10 years to 31 December 2022. Rebased to 100 at 938.9 1 December 2011. 2 Allianz Technology Trust – Net Asset Value – 583.4 undiluted. 430.1 3 Dow Jones World Technology Index (sterling adjusted, total return). 4 Peer group of Morningstar Global Technology 2018 2019 2021 2020 2022 Sector Equity. Source: AllianzGI/Datastream. 2018 figures are over a 13 month period. The Alternative Performance Measures (‘APMs’) can be found on page 72. 3 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Financial Summary | | As at | | As at | | --- | --- | --- | --- | | 31 December | | 31 December | | | | 2022 | | 2021 % change | Net Asset Value per Ordinary Share 231.0p 347.9p -33.6 Ordinary Share Price 210.0p 352.5p -40.4 (Discount) premium of Ordinary Share Price to Net Asset Value (9.1%) 1.3% Dow Jones World Technology Index (sterling adjusted, total return) 1,832.2 2,489.3 -26.4 Shareholders' Funds £938.9m £1,472.4m -36.2 | | For the | | For the | | --- | --- | --- | --- | | year ended | | year ended | | | 31 December | | 31 December | | | | 2022 | | 2021 % change | Net Revenue Return per Ordinary Share (0.45p) (1.20p) +63.0 Ongoing charges * 0.70% 0.69% +1.4 * As defined in the APMs on page 72. Five year performance summary 31 December 31 December 31 December 31 December 30 November † 2022 2021 2020 2019 2018 Shareholders' Funds £938.9m £1,472.4m £1,229.2m £583.4m £430.1m Net Asset Value per Ordinary Share 231.0p 347.9p 291.3p 165.4p 128.5p Ordinary Share Price 210.0p 352.5p 297.0p 164.7p 122.0p Dow Jones World Technology Index (sterling adjusted, total return) 1,832.2 2,489.3 1,941.1 1,369.9 985.8 (Discount) premium of Ordinary Share Price to Net Asset Value (9.1%) 1.3% 2.0% (0.4%) (5.0%) Comparative figures have been restated following the sub-division of 25p ordinary shares into ten ordinary shares of 2.5p each on 4 May 2021. † The 2018 figures are over a 13 month period. 4 Overview # Chairman’s Statement ![img-0.jpeg](img-0.jpeg) Dear Shareholder ## A hard year The past year has been a particularly hard one for technology investors against a wide backdrop of economic and geopolitical difficulties. The Russian invasion of Ukraine has turned into a protracted conflict with a large human toll. Inflationary pressures had been building for some time but the war has set off dramatic increases in energy and food prices, fuelling inflation and depressing both consumer and business confidence. Central banks have responded to rising inflation by raising interest rates. These rising rates had a direct impact on investments – money is no longer cheap or easy to raise as it had been for so long with interest rates at near-zero. Where, in the era of quantitative easing, investors had piled into growth stocks, keen to gain access to the best future returns, now there is much more scepticism about the reality of those returns and the discount rates have risen dramatically. As valuations have fallen, more money has moved away from such stocks as investors instead favoured nearer-term cashflows and reliable income streams. ## Performance against this backdrop Technology stocks have been at the epicentre of these valuation changes. As previously reported, in the first half of 2022 our strategic overweight positions in stocks with high growth potential were hardest hit by the market sell-off and hence the portfolio fell by more than the significant fall in its benchmark. More recently performance across technology stocks, whilst weak compared to the general market, has been more mixed. The Board remains satisfied that the differentiated strategy which the Investment Manager continues to follow should be the source of longer-term outperformance and that the current situation should not be a driver to make any wholesale change to that strategy. Over the year, the Company’s Net Asset Value (‘NAV’) per share fell by 33.6%, whilst our benchmark index, the Dow Jones World Technology Index (sterling adjusted, total return) also fell, but by 26.4%. This resulted in underperformance of 7.2 percentage points with all of the underperformance occurring during the first half of the year. The market price of the Company’s shares fell by 40.4% over the year, from 352.5p (31 December 2021) to 210.0p (31 December 2022) as the rating of the Company’s shares moved from a small premium at the end of 2021 to a discount of 9.1% at the end of 2022. The Board is disappointed to see this significant derating of the Company’s shares but notes that it is in line with rating movements implicit in the share prices of other larger investment companies focusing on high growth opportunities. No dividend is proposed for the year ended 31 December 2022 (2021: nil). Given the nature of the Company’s investments and its stated objective to achieve long-term capital growth, the Board continues to consider it unlikely that any dividend will be declared in the near future. Your Board continues to consider the use of borrowing and gearing. Although we have this flexibility, to date our assessment has been not to take on this additional risk. ## Portfolio management team and corporate management changes In my reports last year I wrote about the transition of lead portfolio manager role from Walter Price to Mike Seidenberg with effect from 1 July 2022 and also provided details of the changes to the structuring of the investment management arrangements arising from the sale of Allianz Global Investors GmbH (‘AllianzGI’) US investment operations to Voya Investment Management Co LLC (‘Voya’) – see page 28. The Board took careful steps to be satisfied that each of these changes was in the best interests of shareholders prior to granting its approval. 5 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 As you may be aware the Board has generally visited San Francisco every couple of years to spend time with the investment managers on their home ground. The pandemic interrupted this pattern but the delayed visit that took place last September proved very timely in the light of the significant changes referred to in the previous paragraph. The Board was able to spend time with all the members of Voya’s San Francisco based Global Technology Team and also meet with other Voya senior executives. These meetings provided further reassurance to the Board. In summary I am pleased to report that both the lead portfolio manager and Investment Manager changes appear to have proceeded smoothly. The dichotomy of current demand versus future potential There is no doubt that lofty valuations of technology stocks have been challenged over the past year, however it is also true that many technology companies remain robust in terms of their day- to-day business, if not in the valuation of their equity. The main driving themes for technology most certainly persist: large scale movement of legacy IT systems to cloud architecture, cybersecurity in the face of criminals’ and nation states’ efforts to steal or disrupt, and labour shortages to name just a few. There are also many emerging technologies and themes as companies and innovators look to create the next disruptive technology. As an example, can readers be sure that this year’s statement was written by me and not by an Artificial Intelligence (‘AI’) tool? In this instance I can assure you it was written by me, however there is currently much debate and coverage around tools such as ChatGPT and other AI applications. Citing this is not meant as any commentary on the potential of a company developing software as a future holding – and our investment manager is in a much better position to comment on the potential (or not) of such companies to be portfolio holdings in the future. What it does demonstrate though is the unstoppable development of technology and that it is unlikely to slow anytime soon. The possibility of such a tool writing this report is real given the right prompts into the tool. Indeed, some commentators postulate that these tools can answer university degree questions with some success and articles have already started to foretell a change in the way we will work in the future. Microsoft is certainly taking it seriously, investing $1bn in OpenAI, the developer, in 2019 to gain exclusivity over the product with the aim of bolstering its embedded search engine, Bing. Microsoft believes that OpenAI’s artificial intelligence tools and platforms have the potential to significantly improve its search engine capabilities, offering more accurate and better-tailored search results. Microsoft also believes that OpenAI’s AI technology could help it create more efficient and powerful cloud-based services, enabling it to better serve its customers and reach new markets. Microsoft’s investment in OpenAI is an indication of how seriously the tech giant is taking AI, and how it wants to make sure it’s always at the cutting edge of the technology. That last paragraph was generated by AI using GPT-3, but I promise you the rest was from the human mind! Investment Manager’s Review As ever, my statement is not intended to substitute for the Review from the Investment Manager and I would urge you to read the in-depth explanations of the factors affecting performance from the team starting on page 10. ESG As you will be aware, the Investment Manager considers ESG risks as part of the stock analysis and investment management process. The Board were able to see the process in action during their visit to San Francisco, including visiting a selection of investee companies and hearing how they are dealing with ESG issues from a business management perspective. The Board remains cognisant of investors’ concerns and desire to understand better the broader impact of the investment choices that they make. Given the nature of the Company, the Board consequently engages closely with the related policies and processes of Voya as the Investment Manager and AllianzGI UK as the AIFM. 6 Overview How do we compare with our peers and other indices? The Strategic Report on page 16 contains full details of the comparative data that in the past we have included in this Statement. In summary the Company’s performance is very strong over longer time periods. The costs of running your Company Your Board has maintained its close attention to the costs of running the Company. In a year in which NAV has fallen substantially, I am pleased to report that the Company’s Ongoing Charges Figure (‘OCF’), which is calculated by dividing ongoing operating expenses by the average NAV, has only risen very marginally from 0.69% to 0.70%. This follows a sustained reduction in OCF over previous years. The management fees payable in 2022 were moderated by being calculated on the market value of the Company and not the NAV. The OCF excludes any performance fee due to the manager. Once again no performance fee has been earned in 2022 due to continued underperformance against the benchmark. It should be noted that the underperformance suffered over the past two years will have to be made back, as well as the NAV once again exceeding the level at the end of 2020 (which set a new high watermark) before any future performance fee can be accrued. Transactions in own shares The Board is pleased to both issue shares when there is sufficient investor demand, and to consider buying back shares when the shares trade at a significant discount. Currently we would consider buying back shares during periods where the discount is consistently over 7% and it is felt appropriate to do so given the prevailing market backdrop. For significant periods of 2022 the discount has been in excess of that level and buybacks have been executed accordingly on a frequent basis. Overall, market purchases of £39 million of shares were undertaken, at an average discount of 12.18%. All shares repurchased over the period have been held in treasury rather than cancelled as this makes them readily available to be reissued if sufficient demand occurs in the future. The repurchase of shares during the year enhanced the NAV by 44bps. At the forthcoming AGM, the Board proposes both a renewal of the usual 10% authority to issue new shares and also a renewal of the authority to issue an additional 10% in order to avoid the cost of a further General Meeting should the 10% authority be exhausted as has happened previously when demand was high. The Board recommends that Shareholders vote in favour of both of the proposed resolutions. The Board will continue to consider the issuance of new shares subject to shares only being issued at a premium to NAV and if the Board is satisfied that the issuance is in the best interests of existing shareholders. Similarly, any buy back of shares will also be subject to the criteria set out above being met and where it is felt to be beneficial to shareholders. Alternative Investment Fund Manager (‘AIFM’) As we had notified shareholders in 2022, our management contract with AllianzGI for investment management (delegated to Voya), accounting, company secretarial and administrative services as AIFM of the Company is due to transfer to Allianz Global Investors UK Limited (‘AllianzGI UK’) which is a new FCA authorised and regulated UK entity taking on all activities of the UK Branch of AllianzGI. This change is occurring as a result of the UK leaving the EU and is to take place once the legal set up is arranged to ensure compliance with the regulatory regime. The Board is assured that there will be no change to the portfolio management services (delegated to Voya) nor to the administration services received by the Company. There will be no increase in the management or administrative expenses of the Company as a consequence of this change. Details of the existing arrangement with the AIFM are on page 28. 7 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ![img-1.jpeg](img-1.jpeg) ## Awards and shareholder communications Despite the continuing challenges for the Company this year in performance terms, the Board was delighted to once again in 2022 be awarded "Best Report and Accounts (Specialist)" by the AIC, having previously won the same award in 2021, 2020 and 2018. The Board tries to continually evolve in terms of this key shareholder communication piece and this year you will see further, wider-ranging changes. We do hope you will take the time to visit the full Stakeholder Report housed at www.allianztechnologytrust.com and that you find it of interest. We welcome feedback from both shareholders and other readers on our new reporting. ## Board matters As previously announced Katya Thomson was appointed to the Board last July and has now succeeded Humphrey van der Klugt as Chairman of the Audit & Risk Committee with effect from 1 January 2023. I am pleased to confirm that Humphrey continues as a non-executive Director and Senior Independent Director. I will be stepping down as Chairman and non-executive Director at the Company's forthcoming AGM and therefore will not stand for re-election. The Board, overseen by Humphrey van der Klugt, the Senior Independent Director, has agreed that Tim Scholefield who has been a Director since December 2021, be appointed as Chairman at the conclusion of that meeting. Tim has already made a strong contribution to the Board, and I believe that shareholders should have full confidence in their Board going forward. I confirm that the annual Board and Manager performance appraisal process, conducted internally this year, concluded that the Board has continued to work in an effective manner. In accordance with the AIC code, all Directors with the exception of me, are proposed for election/re-election. ## Annual General Meeting arrangements This year's AGM will be held on 26 April 2023 at 2.30pm. The full Notice of Meeting can be found on page 77. The AGM will be a hybrid meeting, meaning shareholders can either attend physically or online. However, after two years of trialling online voting, we will not be providing that service again for the 2023 meeting. This is due to the relatively high cost to enable the service not having been matched by shareholder take up of the service over the past two years. Should there be reasonable demand emerging from shareholders in the future for online voting then we will look at a possible reintroduction. For this reason, we strongly encourage all shareholders to submit their votes by the proxy voting process by the deadline of 24 April 2023 as detailed in the Notice of Meeting on page 77. Those shareholders attending virtually will be able to view the AGM and submit questions electronically. The Board encourages shareholders to attend the AGM if possible. A presentation by the Investment Manager will be made at the start of the meeting. For those unable to attend either physically or virtually, this will be posted to the Company's website as soon as practicable after the event. The Board looks forward to welcoming shareholders to this year's event. ## Your vote counts We would like to take the opportunity to remind shareholders that you have the right to vote on important matters that affect your Company, such as the election of directors and the proposed renewal of share issuance authorities. We feel it is important that shareholders are encouraged to make their voices heard by voting on all business matters. Instructions on how to vote your shares can be found on page 79. As the vast majority of individual shareholders hold their shares on an investment platform in a nominee account, we are pleased to see continuing action from some of the larger platforms to enable nominee shareholders to access relevant documentation and record their votes. 8 Overview Outlook It is difficult, if not impossible, to predict what might happen with the geopolitical landscape as well as with the global economy as we move forward through 2023. As I write, the war in Ukraine continues, unfortunately with no obvious end in sight yet, and other significant geopolitical tensions also persist. There is some evidence of inflationary pressures easing from a macro perspective, but whilst markets have already made some positive moves on expectation of possible easing interest rates, there is also conflicting rhetoric from many central banks which indicate the easing may not be as swift or widespread as some would hope. Despite recent volatility the long-term secular growth story for technology investing remains intact and is powerful. Returns are likely to accrue disproportionately to a small number of ‘winners’ and this should reward an active, and probably patient, style of portfolio management. We have confidence in the Investment Manager’s ability to drive long-term relative performance through the team’s high conviction expertise as they continue to focus on identifying trends that have the potential to uncover tomorrow’s Apple or Microsoft. Robert Jeens Chairman 10 March 2023 9 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Investment Manager’s Review | 2022 started with fresh optimism that the world | The Euro area has been most affected by the | | --- | --- | | economy would, at last, start to emerge from | energy crisis and growth is expected to fall | | the shadow of the pandemic. That optimism | to just 0.5% in 2023, with many of its major | | quickly faded as Russia’s invasion of the Ukraine | economies in recession. The US is also widely | | plunged the world into another crisis. It fuelled | expected to experience recession in the year | | a mounting inflation problem that forced major | ahead. For emerging and developing Asia, | | central banks across the world to raise interest | much will depend on the relative strength of | | rates. It proved a challenging backdrop for | China, which continued to be held back by | | financial markets, and the technology sector in | Covid restrictions for much of the year. By the | | particular. | end of the year, it had relaxed its zero-Covid | policy and there were hopes that its economy The reverberations from the war in Ukraine were could revive. felt across the world. The sanctions imposed | on Russia as a result of the invasion pushed up | There were a number of notable legislative | | --- | --- | | energy costs, which were reflected in higher | initiatives in 2023. In the US, the Inflation | | inflation figures. The war exaggerated existing | Reduction Act allocated significant funding | | fault lines in the US/China relationship and | for green energy initiatives and domestic | | inflamed geopolitical tensions more widely. | energy investment. The CHIPS and Science Act | | Countries started to increase protectionism, | sought to encourage domestic production of | | particularly around key technologies such as | semiconductors and exclude unfriendly foreign | | semiconductors. | powers from the technology ecosystem. In the | EU, the RePower EU initiative brought more The war’s impact on energy prices and inflation funding for renewable energy, as European proved the most immediate problem. The powers sought to wean themselves off Russian US Consumer Price Index rose steadily from fossil fuels. Largely overlooked in 2022, these 7% in January to a peak of 9.1% in June. Early may set the tone for economic development in assessment that inflation would be transitory the year ahead. proved misplaced and the Federal Reserve (‘Fed’) was forced into rapid action. The US Fed Stock markets funds rate moved from a range of 0.25-0.5% at This uncertain backdrop led to significant the start of the year to a range of 4.25%-4.5% weakness in global financial markets. Markets by December, pushing borrowing costs to their were already wobbling at the end of 2021, and highest level since 2007. in 2022, the FTSE World Index dipped 6% from 2,774 to 2,603 over the year. The technology The Fed continued to talk tough on inflation even sector was particularly weak, as higher interest as pressures started to ease in the second half rates pushed investors to reappraise valuations. of the year. In the December meeting Fed chair Jay Powell said: “Historical experience cautions High valuations had been sustained by a very strongly against prematurely loosening policy. low risk-free interest rate, which had seen the I wouldn’t see us considering rate cuts until the long-term cashflows they offered highly prized committee is confident that inflation is moving by investors. In a climate of rising interest down to 2% in a sustained way.” With inflation rates, these cashflows were worth less. The still at 7.1% by the end of the year, there was still fastest growing companies – where more of some way to go. their valuation was tied up in future revenues - proved particularly vulnerable. Even though Part of the problem has been wage inflation. many companies continued to deliver high Employment levels have remained high, which growth and outpace earnings expectations, it has created wage pressures. Nevertheless, held back their share price progress. strength in the jobs market has helped cushion the hit from higher inflation and interest rates The year was generally characterised by a for the economy. The IMF forecasts that global growing gap between operational and share growth will slow from 6.0% in 2021 to 3.2% price performance, but there were some weak in 2022 and 2.7% in 2023. It said: “This is the spots on earnings. Amazon, for example, weakest growth profile since 2001 except for struggled as the consumer environment the global financial crisis and the acute phase weakened, while Meta’s foray into the of the COVID-19 pandemic.” metaverse proved more expensive and less 10 Investment Manager’s Review remunerative than hoped. Companies exposed There are opportunities in key sectors: to advertising revenues proved vulnerable as manufacturing closer to home is likely to be economic growth slipped, including Alphabet. more expensive, so companies are turning Nevertheless, there were also pockets of to automation, bringing opportunities in resilience. Demand for iPhones held up, areas such as robotics. As countries bring in supporting Apple’s earnings, while Microsoft’s protectionist policies, companies are making cloud computing division helped earnings for investments. In response to the CHIPS and the wider business. Science Act, Micron was emboldened to invest in supply. It will build a new $20bn chip factory Stock markets had started to recover by the in Clay, New York to take advantage of the new end of the year in response to stronger signs on subsidies. inflation. This may be premature. The Federal Reserve remains committed to further rate rises Value versus growth and there are relatively few signs of weakness in Companies with high growth have been in the the all-important labour market. However, there ascendancy over the past decade. There can can little doubt that the majority of the rate rises be little doubt that 2022 marked the start of are now in the past and markets substantially a different environment. Even if inflation falls, reflect the new environment. Valuations are the world is unlikely to revert to previous low significantly lower than a year ago. interest rates. Markets had to make this painful adjustment in 2022, which partially explains the weakness of technology and the strength of Key themes ‘value’ parts of the market. Interest rates | 2022 was a year when everyone was watching | However, this does not mean that markets | | --- | --- | | the Fed. The fortunes of individual companies | will not recognise growth in the years ahead. | | appeared to matter less than the latest | The growth versus value debate will remain | | comments from Chair Jay Powell as investors | pertinent, but with the major adjustment to | | tried to judge whether central banks would | interest rates now in the past, we expect an | | be able to fight inflation without collapsing | environment where stock characteristics play a | | the economy. Financial markets were slow to | bigger role than macroeconomic factors. | recognise the Federal Reserve’s commitment to curbing inflation, but were ultimately forced to Performance accept the reality of higher rates. This was unquestionably a tough year for the Company, both in relative and absolute terms. It is not yet clear whether the Federal Reserve The Company’s net asset value fell 33.6%, will manage to engineer a ‘soft landing’ for compared to a fall of 26.4% in its benchmark, the US economy. If inflation continues to fall, the DJ World Technology index over the investors can expect a more benign interest calendar year. While longer-term performance rate environment in 2023. It is likely that there remains strong, this weakness is undoubtedly will be further rate rises, but these are expected disappointing. by markets and the significant adjustment | necessary in 2022 is unlikely to be repeated. | The reasons for the underperformance are | | --- | --- | | Considerable uncertainty remains for the global | relatively easy to diagnose. The Company has | | economy. | traditionally held a larger weighting in higher | growth, mid cap companies. This is, we believe, Geopolitics the long-term sweet spot to find fast-growing, Geopolitical tensions have been a growing dynamic technology companies. However, this feature of global trade in recent years, but the was the area hit hardest in 2022 as investors problems accelerated in 2022. Russia’s invasion reappraised valuations in light of the changing of Ukraine saw many countries pick sides and interest rate environment. put the US and China in opposing camps. There is now a recognition that globalisation is This sell-off included areas of structural growth, reversing. such as cloud software and cybersecurity. In general, there was little regard for the This has significant implications for the underlying performance of individual corporate sector, with companies increasingly companies. Cybersecurity group Zscaler, prioritising security of supply over cost. for example, was the largest detractor from Companies have brought manufacturing back performance over the year, but beat market to the US, increased inventories and re-routed expectations on sales and adjusted income supply chains. and continued to grow rapidly without burning cash. This experience was commonplace: many 11 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 companies continued to deliver strong revenue group Lyft also detracted from performance. growth and earnings, but were battling investor Collaboration technologies such as ZoomInfo concerns about their future prospects. and Atlassian, and productivity tools such as Asana also struggled. While the long-term At the same time, the Company was growth of flexible working appears to be intact, underweight the benchmark in those share prices for these companies had moved a companies that proved the most defensive. long way and expectations were high. Asana, Apple, for example, was a large absolute for example, had risen 155% in 2021. As such, position in the Company, but it forms a even some pullback in a more difficult environment larger part of the benchmark and therefore was was not surprising. a drag on relative performance. The same was true, to a lesser extent, for Microsoft. Global demand for semiconductors continues to rise, with areas such as electric cars and cloud We continue to believe in the long-term analytics demanding increasingly sophisticated prospects for many high growth companies in chips. However, the sector could not shake off its areas such as cloud computing, data analytics reputation for economic sensitivity and this was or cyber security, and retain a weighting in another weak point for the Company during the the portfolio. Nevertheless, we recognise that year. sentiment is likely to be against them while the economic climate remains weak. Against that The Company’s position in Amazon was also a backdrop, we have reduced risk in the portfolio detractor. Amazon is not part of the benchmark, over the course of the year, moving away from but the Company had a small position. The some of the higher growth, high risk areas online retailer has struggled in an increasingly and towards more defensive positions. Apple, difficult spending climate, though its cloud Microsoft and Alphabet are the top positions in business held up relatively well. Not holding the portfolio today. Shopify, which proved very weak as household incomes dropped, was an advantage. We were also quick to cut companies where | there were signs of weakness. For example, | The Company swerved a number of the | | --- | --- | | we saw Okta struggle to integrate its Auth0 | problems with other megacaps. A low average | | acquisition and exited the position. Company- | weighting in Meta, for example, was an | | specific problems were dealt with brutally by | important contributor to performance as the | | the market during the year, with management | company struggled with its transition away from | | teams seldom given the benefit of the doubt. | its core business towards its new ambitions in | the metaverse. The Company also held a relatively high level of | cash during the year – around 6% on average. | The payments area provided some defensive | | --- | --- | | This was a reflection of the uncertainty of the | characteristics over the year, with Mastercard, | | environment and a desire to retain optionality in | Visa and Paycom all resilient. These were | | the portfolio. With significant swings in pricing, | stronger than smaller groups such as Square | | it made sense to keep the flexibility to take | or Paypal, which had greater exposure to the | | advantage of opportunities as they arose. | smaller company and consumer segment. | Shares of ON Semiconductor, a provider of Stock highlights semiconductor intelligent sensing and power | The weakness in the cybersecurity sector has | solutions, continued to benefit from a healthy | | --- | --- | | been a surprising feature of 2022. Company | demand and limited supply environment. | | management teams remain committed to | The management team delivered very good | | cybersecurity spending in the face of mounting | execution in a challenging macro environment, | | threats and the sector should have been | which led to resilient profitability. The returning | | more resilient. However, investors treated it | of cash to shareholders was also seen as | | like another high growth area and sent share | positive news by the market. We believe the | | prices tumbling. While Zscaler was the most | company is well positioned to take advantage | | significant contributor to the Company’s | of long-term growth in key automotive and | | underperformance over the year, CyberArk and | industrial segments and it may weather any | | Okta were also weak. Only Palo Alto Networks | potential macroeconomic headwinds better | | bucked the trend. | than its peers. | | Other high growth segments suffered: cloud | Flex reported solid results in the period and | | analytics and AI group Snowflake was weak | raised fiscal 2023 guidance. We continue to | | as investors worried about its valuation | believe the company is well positioned to take | | and its competitive prospects. Ride-sharing | share and improve margins as its strategy yields | 12 Investment Manager’s Review | results and supply chain disruptions create | On 25 July 2022 the team and I became | | --- | --- | | net new demand. Despite weaker consumer | employees of Voya. There has been no change | | markets, the broad customer portfolio is acting | to the investment process and it has been a | | as a natural hedge. However, if conditions | seamless transition in terms of the management | | worsen significantly, management has flexibility | of the Company. I have found the Voya culture | | to quickly pull back spending. The company | to be customer centric and supportive of | | is seeing strong demand from multiple | generating the best possible returns for our | | secular growth themes including cloud, auto | shareholders. I look forward to what the future | | technology, and industrial automation. | holds for all associated with Allianz Technology | Trust. Looking forward This has been a tough period, but many of the While inflationary pressures have started to structural growth opportunities for technology ebb, there is still some pain to come on the are intact. Digital transformation, cyber security global economy. There may be further interest and cloud computing are multi-year growth rate rises in the year ahead, and the Federal themes and the recent uncertainty has not Reserve is unlikely to reverse direction in the changed their outlook. Technology remains an short-term. Recession looks likely for many exciting sector in spite of its difficulties in 2022. major economies, while the re-emergence of China could be a double-edged sword. It may move the dial on global growth, but may also Mike Seidenberg contribute to inflation. Against this difficult Lead Portfolio Manager backdrop, the Company remains defensively Voya Investment Management Co LLC positioned. 10 March 2023 However, there are reasons to be more optimistic. Share prices have fallen a long way and now reflect much of the bad economic news. Many technology companies continue to deliver strong earnings in spite of the economic conditions and have a significant runway of growth ahead of them. Equally, potential weakness in the Dollar should help those technology companies with large global markets, such as Apple and Microsoft. 13 13 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Investment Portfolio at 31 December 2022 Full portfolio list | | | | | | Valuation | | | % of | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | # | | # | | | | | | | Investment Sector | | Sub Sector | | Country | | £000 | Portfolio | | Microsoft Software Systems Software United States 63,905 7.1 Apple Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 51,427 5.7 Alphabet Interactive Media & Services Interactive Media & Services United States 46,688 5.2 Broadcom Semiconductors & Semiconductor Equipment Semiconductors United States 41,735 4.6 Mastercard IT Services Data Processing & Outsourced Services United States 32,489 3.6 Taiwan Semiconductor Semiconductors & Semiconductor Equipment Semiconductors Taiwan 31,721 3.5 Paycom Software Software Application Software United States 30,811 3.4 Visa IT Services Data Processing & Outsourced Services United States 26,206 2.9 Palo Alto Networks Software Systems Software United States 24,755 2.8 Datadog Software Application Software United States 23,506 2.6 Top Ten Investments 373,243 41.4 Arista Networks Communications Equipment Communications Equipment United States 22,557 2.5 Pure Storage Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 21,699 2.4 Aspen Technology Software Application Software United States 21,126 2.4 ON Semiconductor Semiconductors & Semiconductor Equipment Semiconductors United States 20,628 2.3 Oracle Software Systems Software United States 20,124 2.2 Meta Platforms Interactive Media & Services Interactive Media & Services United States 19,857 2.2 HubSpot Software Application Software United States 19,585 2.2 Intuit Software Application Software United States 19,529 2.2 Cyberark Software Software Systems Software Israel 18,707 2.1 Flex Electronic Equipment Instruments & Components Electronic Manufacturing Services Singapore 17,091 1.9 Top Twenty Investments 574,146 63.8 Gitlab Software Systems Software United States 16,912 1.9 Automatic Data Processing IT Services Data Processing & Outsourced Services United States 16,564 1.8 Netflix Entertainment Movies & Entertainment United States 16,438 1.8 Motorola Solutions Communications Equipment Communications Equipment United States 14,442 1.6 Applied Materials Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 14,212 1.6 Servicenow Software Systems Software United States 14,082 1.6 Workday Software Application Software United States 14,033 1.6 GEN Digital Software Systems Software United States 13,956 1.6 KnowBe4 Software Systems Software United States 13,221 1.5 Monolithic Power Systems Semiconductors & Semiconductor Equipment Semiconductors United States 13,105 1.5 Top Thirty Investments 721,111 80.3 14 Investment Manager’s Review | | | | | | Valuation | | | % of | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | # | | # | | | | | | | Investment Sector | | Sub Sector | | Country | | £000 | Portfolio | | Marvell Technology Semiconductors & Semiconductor Equipment Semiconductors United States 12,783 1.4 Infineon Technologies Semiconductors & Semiconductor Equipment Semiconductors Germany 12,321 1.4 ASML Semiconductors & Semiconductor Equipment Semiconductor Equipment Netherlands 11,941 1.3 MongoDB IT Services Internet Services & Infrastructure United States 11,755 1.3 Lam Research Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 11,441 1.3 Advanced Micro Devices Semiconductors & Semiconductor Equipment Semiconductors United States 11,145 1.2 Activision Blizzard Entertainment Interactive Home Entertainment United States 10,315 1.1 Okta IT Services Internet Services & Infrastructure United States 9,785 1.1 Zscaler Software Systems Software United States 9,592 1.1 CDW Electronic Equipment, Instrument Technology Distributors United States 9,412 1.0 Top Forty Investments 831,601 92.5 KLA Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 8,596 1.0 Micron Technology Semiconductors & Semiconductor Equipment Semiconductors United States 8,197 0.9 NVIDIA Semiconductors & Semiconductor Equipment Semiconductors United States 8,032 0.9 Computacenter IT Services IT Consulting & Other Services United Kingdom 7,838 0.9 Bumble Interactive Media & Services Interactive Media & Services United States 6,778 0.8 Crowdstrike Software Systems Software United States 5,265 0.6 Altair Engineering Software Application Software United States 5,112 0.6 NXP Semiconductors Semiconductors & Semiconductor Equipment Semiconductors Netherlands 5,104 0.6 Tesla Automobiles Automobile Manufacturers United States 4,718 0.5 SK Hynix Semiconductors & Semiconductor Equipment Semiconductors South Korea 4,177 0.4 Top Fifty Investments 895,418 99.7 STMicroelectronics Semiconductors & Semiconductor Equipment Semiconductors Netherlands 3,519 0.3 Total Investments 898,937 100.0 #GICS Industry classifications 15 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Strategic Report Introduction This Strategic Report is provided in accordance with The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 as amended and is intended to provide information about the Company’s strategy and business needs, its performance and results for the year, and the information and measures which the Directors use to assess, direct and oversee Allianz Global Investors GmbH, UK Branch (‘the AIFM’) and Voya Investment Management Co LLC (‘the Investment Manager’ for portfolio management) in the management of the Company’s activities. Strategy and Business Model The purpose of the Company is defined by its investment objective, to provide shareholders with an investment in equity securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth. The Company carries on business as an investment trust and maintains a premium listing on the London Stock Exchange. Investment trusts are collective investment vehicles constituted as closed ended public limited companies. The Company is managed by a board of non-executive Directors and the Company’s day-to-day functions are carried out by the following main third party services providers: – AllianzGI as AIFM – Voya as Investment Manager – HSBC as Custodian and Depositary – Link as Registrars – State Street providing middle office and fund accounting services (appointed by AllianzGI). The Company complies, where relevant, with the Financial Conduct Authority’s (‘FCA’) Handbook including the Disclosure Guidance and Transparency Rules. Regulatory and portfolio information is announced via the regulatory news service on a daily, monthly and other periodic basis thereby assisting current and potential investors to make informed investment decisions. Additional portfolio information, technology commentary and corporate information is available on the Company’s website www.allianztechnologytrust.com. Performance The investment portfolio at the year end is set out on pages 14 and 15 and a summary of the top twenty holdings can be found on the website version of the Annual Financial Report. In the year ended 31 December 2022, the Company’s total return on net assets per share was -33.6% (2021: 19.4%), underperforming the Dow Jones World Technology Index (sterling adjusted, total return) by 7.2 percentage points. Further details on the performance of the Company, future trends and factors that may impact future performance of the Company are included in the Chairman’s Statement and the Investment Manager’s Review. 16 Strategic^{}[] Report ## Monitoring Performance – Key Performance Indicators The Board assesses performance in meeting the Company's objective and assessing the longer term viability of the Company against the following Key Performance Indicators ('KPIs'): The table below compares the Company's performance to the main technology indices. Although the Company underperformed the benchmark in 2022, your Company has outperformed the reference benchmark index and the Russell MidCap Technology Index over every other time period set out below. The Company has underperformed the MSCI World Technology Index over 1, 3 and 5 years, but remains ahead over 10 years: | % change | 1 year | 3 years | 5 years | 10 years | | --- | --- | --- | --- | --- | | **ATT NAV per share** | **-33.6** | **39.7** | **98.9** | **543.5** | | Dow Jones World Technology Index (sterling adjusted, total return) | -26.4 | 33.7 | 85.5 | 430.6 | | MSCI World Technology Index (total return) | -21.9 | 43.5 | 112.2 | 528.4 | | Russell MidCap Technology Index | -26.7 | 19.8 | 81.4 | 442.7 | Source: AllianzGI/Datastream in GBP as at 31 December 2022 The table below provides a comparison with the broader UK and world equity indices which many investors will use when reviewing the performance of their individual investments. | % change | 1 year | 3 years | 5 years | 10 years | | --- | --- | --- | --- | --- | | **ATT NAV per share** | **-33.6** | **39.7** | **98.9** | **543.5** | | FTSE All Share Index (total return) | 0.3 | 7.1 | 15.5 | 88.2 | | FTSE World Index (total return) | 7.2 | 27.8 | 52.1 | 217.3 | Source: AllianzGI/Datastream in GBP as at 31 December 2022 The Board continues to pay close attention to the Company's performance position against the wider universe of open ended funds, closed ended funds and exchange traded funds. The performance of your Company versus the other funds within the Morningstar Global Technology Sector - Equity (Morningstar) category, whilst disappointing in the short term, is exceptional over longer periods: | | 1 year | 3 years | 5 years | 10 years | | --- | --- | --- | --- | --- | | **Peer Group Ranking vs Morningstar Global Technology Sector Equity** | **134/165** | **18/123** | **10/85** | **1/57** | 17 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 The Board regularly reviews stock and attribution analysis to determine the contribution to relative and absolute performance of the portfolio of the top and bottom stocks. The top contributors to and detractors from the Company's Net Asset Value total return over the year ended to 31 December 2022, relative to the benchmark index*, were as follows: | Top ten contributors | | Active Contribution GBP (%) | | --- | --- | --- | | Meta Platforms Inc. Class A | Underweight | 1.28 | | ON Semiconductor Corporation | Overweight | 0.69 | | Flex Ltd. | Overweight | 0.51 | | Mastercard Incorporated Class A | Overweight | 0.47 | | Broadcom Inc. | Overweight | 0.45 | | Shopify, Inc. Class A | Underweight | 0.36 | | Aspen Technology, Inc. | Overweight | 0.34 | | Box, Inc. Class A | Overweight | 0.30 | | NVIDIA Corporation | Underweight | 0.29 | | Aspen Technology, Inc. | Overweight | 0.28 | | | | **4.98** | | Top ten detractors | | | | Zscaler, Inc. | Overweight | -1.27 | | Snowflake, Inc. Class A | Overweight | -0.96 | | Lyft, Inc. Class A | Overweight | -0.92 | | Okta, Inc. Class A | Overweight | -0.84 | | Apple Inc. | Underweight | -0.76 | | Datadog Inc Class A | Overweight | -0.73 | | Atlassian Corp Class A | Overweight | -0.61 | | Microsoft Corporation | Underweight | -0.58 | | Asana, Inc. Class A | Overweight | -0.53 | | Infineon Technologies AG | Overweight | -0.46 | | | | **-7.66** | Source: Allianz Global Investors. 31 Dec 2021 - 31 Dec 2022. *Relative to Dow Jones World Technology Index. Figures may not add due to rounding. ## Share Buybacks and Share Issues The Directors continually monitor the level of premium or discount of the share price to the NAV per share. Over the year to 31 December 2022, the mid-market price of the Company's shares decreased by 40.4% (2021: increased by 18.7%), with a discount at the year end of 9.1% (2021: premium of 1.3%). The Board carefully considers the parameters which should apply to both the issuance and the buy-back of shares from the market and will only proceed when the action is in the best interests of shareholders. Where there is market volatility the Board will also consider buying back shares when the discount is over 7% and all other factors align. The Board will only issue new shares at a premium to NAV. The Company did not issue any new shares during 2022 (2021: 6,800,000) and bought back 16,703,872 shares at a discount to NAV (2021: 5,565,090). There are 22,268,962 shares held in treasury at the year end. 18 Strategic Report Results and Dividends An overview of the Company’s results is shown in the Financial Highlights on page 2. The revenue reserve remains substantially in deficit, and no dividend is proposed in respect of the year ended 31 December 2022 (2021: nil). As stated in the Chairman’s Statement, the Board considers it unlikely that a dividend will be declared in the near future. Future Development The future development of the Company is dependent on the success of the Company’s investment strategy against the background of the economic environment and market evolution and the future attractiveness of the Company as an investment vehicle compared with long-term savings markets. The Chairman gives his view on the outlook in his statement which starts on page 5 and the Portfolio Manager discusses his view of the Company’s portfolio and the outlook which starts on page 10. The Board holds a strategy specific meeting at least once per year at which time they consider the position of the Company and the strategy for the year ahead and beyond, making recommendations for change where appropriate. The last strategy specific meeting was held in September 2022. Marketing the Company’s Investment Strategy The Company continues to operate a targeted and coordinated marketing programme in order to raise awareness of its investment strategy. During 2022 both virtual and in-person communication tools have been used. This programme targets potential investors as well as communicating the latest developments to its valued existing shareholders. The programme is aimed at both professional and retail investors and aims to create ongoing and sustained demand for the Company’s shares. The retail audience includes those investors who delegate their investment decisions to financial advisers as well as the ever-increasing numbers who are researching and making their own investment decisions. The programme comprises advertising and other promotional activity as well as communicating with national journalists and the financial intermediary press, since positive coverage of the Company’s specialist investment strategy can be highly influential. The marketing programme’s success has been boosted by the number of performance awards won by the Company over recent years and has been instrumental in generating demand from retail investors which is, of course, to the benefit of all of the Company’s shareholders. Increasingly investors are choosing to buy and sell stocks and shares via online trading platforms rather than via a traditional stockbroker. Approximately 35% (2021: 35%) of the Company’s shares are now held by investors on these platforms. Many platform providers offer Individual Savings Account and pension products as well as the facility to invest on a regular monthly basis. Competition amongst platform providers is intense therefore investing online can be a cost-effective way to buy the Company’s shares. Board Diversity At 31 December 2022, there were three male Directors and three female Directors. Further information on Board Diversity may be found in the Directors’ Report on page 30. Risk Report Viability Statement In accordance with the Corporate Governance provisions the Company is required to make a forward looking (longer term) Viability Statement. In order to do this the Board has considered the appetite for a technology investment trust against the current market backdrop, and has formally assessed the prospects for the Company over a period of five years. The Board believes that the period of five years is appropriate and is in line with the five year continuation vote. The next continuation vote will be put to shareholders at the AGM in 2026. In order to assess the prospects for the Company the Board has considered: – The investment objective and strategy taking into account recent, past and potential performance against both the benchmark, other indices of note and peers; – The financial position of the Company, which does not currently utilise gearing in any form but does maintain a portfolio of, in the main, non-income bearing investments; – The liquidity of the portfolio and the ability to liquidate the portfolio on the failure of a continuation vote; – The macro economic conditions and geopolitical events; – The ever increasing level of technology adopted by both individuals and corporations alike; – The inherent risks in such technology both in terms of speed of advancement but also potential catastrophe with the growth of cyber fraud; and – The principal risks faced by the Company as outlined below. The Board is fully aware that the world of technology is constantly moving and growing and the perceived picture of technology now and in five years’ time is potentially very different. Based on the results of the formal assessment, through regular updates from the AIFM and the Investment Manager, the Board believes it is reasonable to expect that the Company will continue in operation and meet its liabilities for the period of five years under this review. 19 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 Investment Controls and Monitoring The Board in conjunction with the AIFM and the Investment Manager has put in place a schedule of investment controls and restrictions within which investment decisions are made. These controls include limits on the size and type of investment and are monitored on a constant basis. They are formally signed off by the AIFM and the Investment Manager every month and are reviewed by the Board at every meeting. Principal & Emerging Risks and Uncertainties The principal risks identified by the Board are set out in the table below, together with information about the actions taken to mitigate these risks. A more detailed version of this table in the form of a Risk Map and Controls document is reviewed in full and updated by the Audit & Risk Committee and Board at least twice per year. Individual risks, including emerging risks and threats to reputation, are considered by the Board in further detail depending on the market situation and a high-level review of all known risks faced by the Company is considered at every Board meeting. The principal risks and uncertainties faced by the Company relate to the nature of its objectives and strategy as an investment company and the operations of its third party service providers. Description Mitigation Investment Strategy and Performance Risk The Investment Manager has responsibility for sectoral The Company’s NAV may be adversely affected by weighting and for individual stock picking, having taken the Investment Manager’s inappropriate allocation due account of Investment Objectives and Controls of funds to particular sub-sectors of the technology that are agreed with the Board from time to time and market and/or to the selection of individual stocks that regularly reviewed. These seek, inter alia, to ensure fail to perform satisfactorily, leading to poor investment that the portfolio is diversified and that its risk profile is performance in absolute terms and/or against the appropriate. benchmark. Technology Sector Risk The Board reviews investment performance, including The technology sector is characterised by rapid change. a detailed attribution analysis comparing performance New and disruptive technologies can place competitive against the benchmark, at each Board meeting. At such pressures on established companies and business meetings, the Investment Manager reports on major models, and technology stocks may experience greater developments and changes in technology market sectors price volatility than securities in some slower changing and also highlights issues relating to individual securities. market sectors. The portfolio is diversified. Cyber Risk The operations of the Company are carried out by third The Company may be at risk of cyber attacks which party service providers. All service providers report to the may result in the loss of sensitive information or Board on operational issues including cyber risks and disruption to the business. the controls in place to capture potential attacks. See Operational Risk below. Market Risk The Board, the AIFM and the Investment Manager The Company’s NAV may be adversely affected by a monitor stock market movements and may consider general decline in the valuation of listed securities and/ hedging, gearing or other strategies to respond or adverse market sentiment towards the technology to particular market conditions. The AIFM and the sector in particular. Although the Company has a Investment Manager maintain regular contact with portfolio that is diversified by company size, sector shareholders to discuss performance and expectations and geography, its principal focus is on companies and to convey the belief of the Board and the Investment with high growth potential in the mid-size ranges of Manager that superior returns can be generated from capitalisation. The shares of these companies may investment in carefully selected companies that are be perceived as being at the higher end of the risk well managed, financially strong and focused on those spectrum, leading to a lack of interest in the Company’s segments of the technology market where disruptive shares in some market conditions. change is occurring. Market sentiment may quickly deteriorate in the face of The Board, the AIFM and the Investment Manager geo political events and effects on the macro-economic would monitor the progress of the unexpected events environment. very closely and initiate appropriate responses where possible. 20 Strategic Report Description Mitigation Currency Risk The Board monitors currency movements and A high proportion of the Company’s assets is likely determines hedging policy as appropriate. The Board to be held in securities that are denominated in US does not currently seek to hedge this foreign currency Dollars, whilst its accounts are maintained in Sterling. risk. Movements in foreign exchange rates affect the performance of the Investment Portfolio and create a risk for shareholders. Financial and Liquidity Risk Financial and liquidity reports are provided to and The financial risks to the Company and the controls in considered by the Board on a regular basis. place to manage these risks are disclosed in detail in Note 13 beginning on page 67. Operational Risk The Board receives regular reports from the AIFM, The Company may be impacted by disruption to or the Investment Manager and third parties on internal the failure of the systems and processes utilised by the controls highlighting areas of exception, including AIFM and the Investment Manager or other third party reports on monitoring visits carried out by the Depositary service providers. This encompasses disruption or failure on behalf of the Company. The Board has further caused by cybercrime, fraud and errors and covers considered the increased risk of cyber-attacks and fraud dealing, trade processing, administrative services, and has received reports and assurance regarding financial and other operational functions. the controls in place and details of whistleblowing procedures. Key Individual Risk Succession plans are in place for the Board. The lead The Company could suffer disruption to operations as portfolio manager is supported by a wider investment a consequence of loss of key individuals e.g. the lead team. Cover is available for core members of the portfolio manager. relevant teams of the AIFM. In addition to the specific principal risks identified in the table above, general risks are also present relating to compliance with accounting, legal and regulatory requirements, and with corporate governance and shareholder relations issues which could have an impact on reputation and market rating. Management of the services provided and the internal controls procedures of the third party providers is monitored and reported on by the AIFM to the Board. These risks are all formally reviewed by the Board twice each year and at such other times as deemed necessary. Details of the Company’s compliance with corporate governance best practice, including information on relations with shareholders, are set out in the Corporate Governance Statement within the Directors’ Report beginning on page 36. The Board’s review of the risks faced by the Company also includes an assessment of the residual risks after mitigating action has been taken. 21 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ### Section 172 Report: ## Engagement with Key Stakeholders As an investment company with no employees, the Company’s primary stakeholders are its shareholders and other stakeholders including its service providers and the companies in which it invests. The Board’s strategy is facilitated by interacting with a wide range of stakeholders through meetings, seminars, presentations and publications and through contacts made through the Company’s suppliers and intermediaries. Engagement is both in person and virtually. Engagement with the Company’s stakeholders enables the Company to fulfil its strategies and to promote the success of the Company for the benefit of the shareholders as a whole. The Board strives for an open, constructive and pro-active culture in its engagements as it seeks to meet the Company’s investment objectives. Set out below are examples of the ways in which the Company has interacted with key stakeholders in line with section 172 of the Companies Act 2006 whereby the Directors have a statutory duty to promote the success of the Company. Stakeholders Why we engage How we engage and what we do The outcomes Shareholders Shareholders receive relevant The Board communicates with Shareholders make informed decisions information to enable them to shareholders through the annual about their investments. Shareholder evaluate whether their investment report and half-yearly report, meets correspondence is forwarded directly interests are aligned with the strategy with shareholders at the AGM and to the Board. of the Company. provides a forum for interaction. The Company has responded to the There is a portfolio management volatile market conditions by issuing or presentation and Q&As. This year, buying back shares during the course there will be a hybrid AGM which each of the year. A share split of 10 to 1 shareholder can attend. There are was undertaken to ensure that the monthly factsheets published on the Company was accessible to all. Company’s website as well as up to date articles and podcasts from the Portfolio Manager. Voya The Board works with the Investment During the year the Board entered The Company is well managed and Investment Manager who provides portfolio into a tripartite agreement for the receives appropriate and timely advice Management – management services. provision of portfolio management and guidance for a reasonable cost. the Investment services. The Board conducted due Manager diligence and held additional meetings with representatives of the Investment Manager and AIFM. The Portfolio Manager provides regular updates at Board meetings and upon request by the Board. Allianz Global The Board works with the AIFM who In addition to the reporting at regular The Company is well managed and Investors – provides accounting and secretarial board meetings, the Board meets with receives appropriate and timely advice the AIFM services as well as expertise in sales representatives of AllianzGI to develop and guidance for a reasonable cost. and marketing. strategy for the Company, including a sales and marketing plan which was adapted during the year, to promote the Company and raise its profile which helps raise its rating. Portfolio The Board approves the Investment On the Company’s behalf the The Company is a responsible investor companies Manager’s active, stock picking Investment Manager engages with and is labelled as ESG Aware. approach and believes in good investee companies, particularly on stewardship. Environmental, Social and Governance matters and exercises its votes at all company meetings. The Board travels every two years to San Francisco and whilst there they visit several of the portfolio companies. 22 Strategic Report Stakeholders Why we engage How we engage and what we do The outcomes Brokers The Board, the AIFM and the The brokers are kept updated on The Company is an attractive Investment Manager work with the the strategy of the Company so that investment and there is liquidity in the brokers, including their research and they can publish relevant research Company’s shares. sales teams to provide access to the information and talk to potential market and liquidity in the Company’s investors. The sales team receives shares. regular contact and helps the Company to participate in exchange volume and provide liquidity for investors. Media The Company works with public Regular communication with public The Company’s name and its attributes partnerships relations advisers to ensure relations partners to raise the as an investment company are known information about the Company, its Company’s profile through press and to an increasingly wider audience. strategies and performance can reach media activity. We can measure the a wide audience of potential investors success of this activity by monitoring through press articles and online website hits and new investment in the media coverage. Company on retail platforms. Distribution To reach a wider audience of investors The wealth managers together with The Board receives detailed feedback partnerships the Company works with firms our distribution partners arrange to confirm that there is wide and providing access to platforms and presentations about the Company growing interest in the Company’s wealth managers. at roadshows and conferences to shares. reach investors through share trading platforms and wealth managers. AIC The Association of Investment The Company is a member of the Information about the Company is Companies looks after the interests AIC and has also supported lobbying disseminated widely. of investment trusts and provides activities such as the representations information to the market. made to the Financial Conduct Authority on the KID document. 23 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Environmental, Social, Governance (ESG) ## Research and Stewardship The Board takes ESG considerations very seriously and, Of course, the more a company matures, the less of a as such, intends to make clear how various aspects are potential problem this usually becomes. considered, both through our fiduciary responsibility Summary: as a board, but also in our oversight of our Investment – The Portfolio Manager has extensive resources Manager’s process, with investment being the sole business dedicated to independent research into investee of the company. company ESG factors and potential risks. Although as an investment trust, the Company has no direct – ESG risk consideration is embedded in the investment social or community responsibilities, the Board shares the process of the portfolio management team. See pages Investment Manager’s view that it is in the shareholders’ 10 to 13 of the Investment Manager’s Review. interests to be aware of and consider environmental, – Voya invest as long term investors with an inherent belief social and governance factors, when selecting and in the importance of stewardship and governance. retaining investments. In addition, Voya has a due diligence approach to ensure any retained company or entity Overall introduction to ESG providing services to the Company in its normal course The Voya portfolio managers integrate the consideration of business has an acceptable approach to ESG factors of Environmental, Social and Governance (ESG) factors and as such does not inadvertently support any negative into the research process for the Company’s portfolio. factors. This process ensures: Details of the Company’s policy on socially responsible investment are set out below. – Formal consideration of Environmental, Social and Governance factors. How ESG fits into technology – Companies with low ESG scores are systematically For technology, the individual elements of ‘ESG’ have flagged to portfolio manager s on a pre-trade basis. The varying outcomes. portfolio manager will consider the elevated ESG risk alongside fundamental consideration, and may consult The ‘E’ (Environmental) is generally a high scoring factor. with internal and 3rd party ESG research materials, in Many technology companies are facilitating the move forming an investment decision. towards a cleaner, less carbon-intensive future. Electric – An independent view from within Voya. vehicles are an obvious example of this. This is not to say – Long-term risk assessment is enhanced. the entire sector is without issue and, indeed, new natural resource demands are emerging as technology expands. ESG & Stewardship Integration We see in general though that companies are aware and In Voya’s research process, environmental, social and consider this factor high in their priorities. Regulators too governance factors are integrated with more traditional have a keen eye. operational and financial considerations. By analysing how a business interacts with the environment, treats The ‘S’ (Social) is split in its outcomes. On the one hand, as its employees and deals with customers and suppliers, a source of quality employment, the result is often positive, valuable insights can be learnt as to its future prospects although some issues have notably come to light. On the and to long term risks which might not be evident in other hand, governments, regulators and the public at financial metrics. large have questioned the impact of some technologies, such as social media. The sheer size and control of some of As discussed in the Chairman’s Statement on page 6 the ‘mega’ sized technology firms has been questioned, as and Investment Manager’s Review starting on page 10, has whether technology might exacerbate social inequality the ESG considerations are integrated within the whole through the inability of poorer socio-demographic groups process of stock selection and portfolio construction. to be able to access the same tools as those with more income. Again, regulators have a sharp focus on this topic. How Voya has integrated ESG in portfolio management Finally, the ‘G’ (Governance) can be the most complicated The ESG Research team at Voya maintains a proprietary factor. Many technology companies by their very nature scorecard which reflects their analysts’ views of the are relatively new and at an early stage of development. financial materiality of ESG issues by industry. This can manifest itself in terms of conflicting priorities between minority shareholders and founders, both in Voya’s dedicated ESG research team provides portfolio strategy and sometimes in unhelpful share structures. managers and sector analysts with ESG knowledge and 24 Strategic Report insights contributing to better investment decisions as they AIFM and Investment Manager’s report on greenhouse consider ESG risks and opportunities that may not have gas emissions on its own operations and the views of the been fully priced by the markets. The ESG research team Investment Manager on CSR and EEE which it adheres offers specialist expertise across the entire spectrum of to in engaging with the underlying investee companies ESG-related requirements. and in exercising its delegated responsibilities in voting. The Investment Manager engages with the Company’s The UK Stewardship Code and Exercise of underlying investee companies in relation to their corporate governance practices and in developing their Voting Powers policies on social, community and environmental matters. The Board has delegated the exercise of voting powers on its behalf to discharge its responsibilities in respect of The Company’s primary objective is to invest principally investments, including the exercise of voting powers on its in the equity securities of quoted technology companies behalf to the AIFM. and receives regular reports on voting on a worldwide basis with the aim of achieving long- activity. term capital growth. Whilst the Board believes that the Company would be in breach of its fiduciary duties to The AllianzGI report on Sustainability and Stewardship shareholders if investment decisions were based solely has been reviewed by the Board and it believes that on CSR and EEE considerations, we are supportive of the Company’s delegated voting powers are being an investment management process that considers all properly executed. AllianzGI subscribes to the ISS Proxy elements of wider ESG risk in the context of risk/reward, Voting Services. ISS manages the voting process and like all other risks considered by the Investment Manager. recommends actions based upon Allianz’s Global Proxy Voting Policy Guidelines. The Strategic Report has been approved by the Board and signed on its behalf by: Corporate Social Responsibility (‘CSR’), Robert Jeens Community and Employee Responsibilities, Chairman Emissions, Environmental and Ethical Policy 10 March 2023 (‘EEE’) The Company’s investment activities and day to day management are delegated to the Investment Manager, AIFM and other third parties. As an investment trust, the Company has no direct social, community, employee or environmental impact, though the Board maintains appropriate oversight of such factors in relation to contracted service providers. Its principal responsibility to shareholders is to ensure that the investment portfolio is properly managed and invested. The Company notes the Task Force on Climate-related Financial Disclosures (‘TCFD’) reporting recommendations. However, as a listed investment company, the Company is not subject to the Listing Rule requirement to report against the framework. In light of the nature of the Company’s business there are no associated human rights issues and the Company does not have a human rights policy. The Company does not maintain premises, hold any physical assets or operations and does not have any employees. Consequently, the Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013. For the same reason as set out above, the Company considers itself to be a low energy user under the Streamlined Energy and Carbon Reporting regulations and therefore is not required to disclose energy and carbon information. The Board has noted the 25 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Directors Robert Jeens Ekaterina (Katya) Thomson Humphrey van der Klugt Chairman of the Board, the Chairman of the Audit & Risk Senior Independent Director and Nomination Committee and Committee and member of the Chairman of the Remuneration the Management Engagement Nomination Committee, the Committee. Member of the Committee. Member of the Remuneration Committee and Nomination Committee and Remuneration Committee. Management Engagement the Management Engagement Committee. Committee. Robert joined the Board on 1 August | 2013 and became Chairman on | Katya joined the Board on 18 | Humphrey joined the Board on 1 July | | --- | --- | --- | | 2 April 2014. Early in his career | July 2022 and was appointed | 2015 and became Chairman of the | | he became an audit partner at | as Chairman of the Audit & Risk | Audit & Risk Committee and Senior | | Touche Ross (now Deloitte) and | Committee on 1 January 2023. | Independent Director on 14 April | | was subsequently Finance Director | She is currently a non-executive | 2016. He stepped down as Chairman | | of Kleinwort Benson Group and | director and audit committee | of the Audit & Risk Committee on | | Woolwich plc. Since 2000 he has | chairman of MIGO Opportunities | 31 December 2022. He is currently | | worked solely as a non-executive | Trust plc, AVI Japan Opportunity Trust | also a director of Worldwide | | director with appointments including | plc and Henderson EuroTrust plc. | Healthcare Trust PLC. He is an | | Henderson Group plc, Royal | She is a corporate finance and | experienced investment manager | | London Mutual Insurance Group | strategy professional with over | and investment company director, | | and a number of listed investment | thirty years of experience in the UK | having previously served as a director | | companies. He has also had | and Europe. Katya is a Chartered | of trusts managed by BlackRock, | | experience of technology companies, | Accountant and a member of the | Fidelity, JP Morgan and Abrdn Plc. | | both listed and private, and is | Institute of Chartered Accountants in | Humphrey initially qualified as a | | currently Chairman of Remote Media | England and Wales. | chartered accountant with Peat | | Group, a cloud based digital signage | | Marwick Mitchell & Co. (now KPMG) | | company. | | in 1979, and in 2004 retired from | a long career as a fund manager and director of Schroder Investment Management Limited. 26 Directors’ Review | Elisabeth Scott | Neeta Patel CBE | Tim Scholefield | | --- | --- | --- | | Member of the Audit & Risk | Member of the Audit & Risk | Member of the Audit & Risk | | Committee, the Nomination | Committee, the Nomination | Committee, the Nomination | | Committee, Remuneration | Committee, the Remuneration | Committee, the Remuneration | | Committee and the Management | Committee and the Management | Committee and Management | | Engagement Committee. | Engagement Committee. | Engagement Committee. | | Elisabeth joined the Board on 1 | Neeta joined the Board on 1 | Tim joined the Board on 1 December | | February 2015. She is Chair of | September 2019. She is a non- | 2021. He is a non-executive Director | | the Association of Investment | executive director of Albion Venture | of CT UK Capital and Income | | Companies, Chair of India Capital | Capital Trust plc. She is also a | Investment Trust PLC, abrdn UK | | Growth Fund plc and Chair of | board adviser at several technology | Smaller Growth Companies Trust | | JPMorgan Global Emerging Markets | startups. She was previously CEO at | plc and Jupiter Unit Trust Managers | | Income Trust plc. She has been a | the Centre for Entrepreneurs and an | Ltd. He is also Chairman of Invesco | | Non-Executive Director of investment | entrepreneur mentor-in-residence | Bond Income Plus Limited. He | | companies since 2011. Elisabeth | at London Business School, a board | has over thirty years’ experience | | worked in the Hong Kong asset | adviser at Tech London Advocates | in investment management and | | management industry from 1992 | and a member of the advisory | was, until 2014, Head of Equities at | | until 2008, latterly as managing | board at City University Ventures. | Baring Asset Management. Prior to | | director and country head of | She was awarded a CBE in | Baring, he was Head of International | | Schroder Investment Management | the Queen’s honours list in | Equities at Scottish Widow | | (Hong Kong) Ltd, and she chaired | October 2020 for services to | Investment Partnership Limited. | | the Hong Kong Investment Funds | entrepreneurship and technology. | | Association between 2005 and 2007. Meeting attendance by the Directors during the year ending 31 December 2022 was as follows: Management Audit & Risk Nomination Remuneration Engagement Strategy Board Committee Committee Committee Committee Meeting Number of meetings in the year 4 2 2 1 1 1 1 Robert Jeens 4 2 2 1 1 1 Humphrey van der Klugt 4 2 2 1 1 1 2 Katya Thomson 2 1 1 1 1 1 Neeta Patel 4 2 2 1 1 1 Tim Scholefield 4 2 2 1 1 1 Elisabeth Scott 4 2 2 1 1 1 The table above sets out the number of formal Board and Committee meetings held during the year and the number of meetings attended by each Director. In addition to the scheduled Board and Committee meetings, Directors attended ad hoc meetings to consider matters as and when required All Directors attended the Annual General Meeting of the Company. None of the Directors has a service contract with the Company. The terms of their appointment are detailed in a letter sent to them when they join the Board. These letters are available for inspection on request to the Company Secretary. 1 Robert Jeens is not a member of the Audit & Risk Committee but may attend by invitation. 2 Katya Thomson was appointed to the Board on 18 July 2022. 27 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 # Directors' Report The Directors present their Report and the audited Financial Statements for the year ended 31 December 2022. Information pertaining to the business review including the outlook and future development, is included in the Strategic Report, starting on page 16 and within the Chairman's Statement on page 9. ## Principal Activity and Status The Company was incorporated on 18 October 1995 and its Ordinary Shares were listed on the London Stock Exchange on 4 December 1995. The Company is registered as a public limited company in England under company number 3117355. The Company is an investment company within the meaning of section 833 of the Companies Act 2006 and carries on business as an investment trust. The Company is a member of the Association of Investment Companies. The Company is an approved investment trust under sections 1158 and 1159 of the Corporation Taxes Act 2010 and Part 2 Chapter 1 of Statutory Instrument 2011/2999. This approval relates to accounting periods commencing on or after 1 December 2012. The Directors are of the opinion, under advice, that the Company has continued to conduct its affairs so as to be able to retain such approval. As an investment trust pursuant to section 1158 of the Corporation Tax Act 2010, the Financial Conduct Authority ('FCA') rules in relation to non-mainstream investment products do not apply to the Company. ## Investment Objective The Company invests principally in the equity securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth, in excess of the Dow Jones World Technology Index (sterling adjusted, total return) (the Benchmark). Full details can be found inside the front cover. ## Investment Funds The market value of the Company's investments at 31 December 2022 was £899m (2021: £1,428m) with losses of £22m (2021: gains of £408m) over book cost. Taking these investments at this valuation, the net assets attributable to each Ordinary Share amounted to 231.0p at 31 December 2022 (2021: 347.9p). During the year, the Company did not enter into any derivative contracts and therefore there were no outstanding contracts as at 31 December 2022. See Note 13 on page 67 for the financial instruments disclosure describing the Company's exposure to price risk, credit risk, liquidity risk, and cash flow risk. Information pertaining to the business review and future outlook can be found in the Strategic Report starting on page 16. ## Investment Management Agreement AllianzGI UK Branch was the appointed Investment Manager up to 25 July 2022. Effective from 25 July 2022, AllianzGI entered into a strategic partnership with Voya. The Company has a tripartite Delegation Agreement with AllianzGI and Voya for portfolio management services. AllianzGI will continue its role as AIFM, providing company secretarial, administrative and sales and marketing services and portfolio management services will be provided by Voya. The aggregate fees paid by the Company to AllianzGI and Voya do not change. The management agreement provides for a base fee of 0.8% per annum payable quarterly in arrears and calculated on the average value of the market capitalisation of the Company at the last business day of each month in the relevant quarter. The base fee reduces to 0.6% for any market capitalisation between £400m and £1 billion, and 0.5% for any market capitalisation over £1 billion. Additionally there is a fixed fee of £55,000 per annum to cover AllianzGI's administration costs. In each year, in accordance with the tripartite management contract, the Investment Manager is entitled to a performance fee subject to various performance conditions. For years beginning on or after 1 January 2022, the performance fee entitlement is equal to 10.0% (1 December 2013 to 31 December 2021: 12.5%) of the outperformance of the adjusted NAV per share total return as compared to the benchmark index, the Dow Jones World Technology Index (sterling adjusted, total return). Any underperformance brought forward from previous years is taken into account in the calculation of the performance fee. A performance fee is only payable where the NAV per share at the end of the relevant Performance Period is greater than the NAV per share at the end of the financial year in which a performance fee was last paid. At 31 December 2022 this 'high water mark' ('HWM') was 297.2p per share. In the event the HWM is not reached in any year, any outperformance shall instead be carried forward to future periods to be applied as detailed below. Any performance fee payable is capped at 1.75% of the average daily NAV of the Company over the period (2021: 2.25% of year-end NAV). For this purpose, the NAV is calculated after deduction of the associated performance fee payable. Any outperformance in excess of the cap (or where the HWM has not been met) shall be carried forward to future years to be available for offset against future underperformance but not to generate a performance fee. To the extent the Company has underperformed the benchmark, such underperformance is carried forward and must be offset by future outperformance before a performance fee can be paid. Underperformance/ 28 Directors' Review outperformance amounts carried forward do so indefinitely until offset. The performance fee accrued for as at 31 December 2022 was Enil (31 December 2021: Enil). The investment management fee (payable to AllianzGI) is charged 100% to revenue and the performance fee (payable to Voya) is charged 100% to capital. As a result of the UK leaving the EU on 30 January 2020, and the agreed transition period ending on 31 December 2020, AllianzGI entered into the UK Temporary Permissions Regime and they were required to seek authorisation from the Financial Conduct Authority ('FCA') to continue to operate in the UK. This has involved changes to AllianzGI's legal set up by forming a UK management company to ensure compliance with the UK regulatory regime. As detailed in the Chairman's Statement, the AIFM is due to transfer to Allianz Global Investors UK Limited which is a new authorised and regulated UK entity. This change will take place once the legal set up is arranged to ensure compliance with the UK regulatory regime. This process is continuing and is expected to be finalised in the coming months. There will be no change to the portfolio management (delegated to Voya) and administration services received and no change to the fee arrangements. ### Continuing Appointment of the AIFM and the Investment Manager During the year, in accordance with the Listing Rules published by the FCA, the Board reviewed the performance of the AIFM and the Investment Manager. The review considered the Company's investment performance over both the short and longer terms, together with the quality and adequacy of other services provided. The Board also reviewed the appropriateness of the terms of the Investment Management Agreement and tripartite Delegation Agreement, in particular the length of notice period and the management fee structure. The Board is satisfied that the continuing appointment of the AIFM and the Investment Manager under the terms of the Investment Management Agreement is in the best interests of shareholders as a whole. ### Going Concern The Directors believe that it is appropriate to adopt the going concern basis in preparing the financial statements as the assets of the Company consist mainly of securities that are readily realisable and the Company's assets are significantly greater than its liabilities. The Directors have considered the Company's investment objective and capital structure. The directors have also considered the risks and consequences of the geo political and macro-economic events on the operational aspects of the company and the Company has adequate financial resources to continue in operational existence for twelve months after approval of these financial statements. The Company is subject to a continuation vote of the Shareholders every five years. The last continuation vote was put to Shareholders at the AGM in 2021. ### Related Party Transactions During the financial year no transactions with related parties took place which would materially affect the financial position or the performance of the Company. ### Capital Structure The Company's capital structure is set out in Note 10 on page 65. ### Voting Rights in the Company's Shares As at 10 March 2023, Allianz Technology Trust PLC's capital consisted of: | Share class | Number of shares issued | Voting rights per share | Total voting rights | | --- | --- | --- | --- | | Ordinary Shares of 2.5p in issue | 400,742,223 | 1 | 400,742,223 | | Ordinary Shares of 2.5p held in treasury | 28,014,457 | Nil | Nil | | **Total** | **428,756,680** | **1** | **400,742,223** | 29 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 Interests in the Company’s Share Capital The Company was aware of the following substantial interests in the voting rights of the Company as at 28 February 2023, the latest practical date before publication of the Annual Financial Report. | | 31 December 2022 | | | 28 February 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | | Number of | | % of issued | Number of | | % of issued | | Holder | | shares | share capital | | shares | share capital | Rathbones Brothers PLC 51,704,358 12.7 50,527,560 12.6 Hargreaves Lansdown, stockbrokers (EO) 48,845,802 12.0 47,863,012 11.9 Interactive Investor (EO) 46,133,770 11.3 45,952,669 11.4 Charles Stanley 30,097,644 7.4 29,606,939 7.4 AJ Bell, stockbrokers (EO) 18,988,001 4.7 18,193,107 4.5 Evelyn Partners (Retail) 12,449,891 3.1 12,918,893 3.2 * Latest practical date EO - Execution Only As previously noted, during 2021 there was a 10 to 1 share split which has not affected the % of the Company’s share capital held by these companies. Repurchase of Shares At the Annual General Meeting (‘AGM’) held on 26 April 2022, authority was granted for the repurchase of up to 64,270,626 Ordinary Shares of 2.5p each, representing 14.99% of the issued share capital at the time. The Board has in place a discretionary discount protection mechanism, described in the Chairman’s Statement and in the Strategic Report. In the year under review the Company bought back 16,703,872 shares for holding in treasury (2021: 5,565,090). The Board and Gender Diversity The Board is supportive of the FCA’s recently updated Listing Rules (LR 9.8.6R(9)) to encourage greater diversity on listed company boards and has implemented the FCA’s disclosure requirements. The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board. The Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. The Board has chosen to align its diversity reporting reference date with the Company’s financial year end and proposes to maintain this alignment for future reporting periods. The Company has met two of the three targets on board diversity as at its chosen reference date, 31 December 2022: (i) at least 40% of the individuals on its board of directors are women; and (ii) at least one individual on its board of directors being from a minority ethnic background. As at the date of this report, the Company has met all targets. Further details on the Company’s appointment process can be found under Appointments to the Board and Director Tenure on page 36. As required under LR 9.8.6R(10), further detail in respect of the three targets outlined above as at 31 December 2022 is disclosed in the tables below. As an externally managed investment company, the Company has no executive directors, employees or internal operations. Therefore columns relating to executive management have been removed from the tables above. The roles of chief executive and chief financial officer are not applicable to the Company, however, the Company considers that the role of Chairman of the Audit Committee to be a senior board position and the following disclosure is made on this basis. As at 31 December 2022: Number of Senior Positions on Number of Percentage the Board (Chair, Board members of the Board Audit Chair and SID) Men 3 50% 2 Women 3 50% - Other - - - Not specified/prefer not to say - - - 30 Directors’ Review Number of Senior Positions on Number of Percentage the Board (Chair, Board members of the Board Audit Chair and SID) White British or other White (including minority-white groups) 5 84% 2 Mixed/Multiple Ethnic Groups - - - Asian/Asian British 1 16% - Black/African/Caribbean/Black British - - - Other ethnic group, including Arab - - - Not specified/prefer not to say - - - Since the reference date and the date that the Annual Financial Report was approved the following changes have occurred. As at 1 January 2023: Number of Senior Positions on Number of Percentage the Board (Chair, Board members of the Board Audit Chair and SID) Men 3 50% 2 Women 3 50% 1 Other - - - Not specified/prefer not to say - - - Number of Senior Positions on Number of Percentage the Board (Chair, Board members of the Board Audit Chair and SID) White British or other White (including minority-white groups) 5 84% 3 Mixed/Multiple Ethnic Groups - - - Asian/Asian British 1 16% - Black/African/Caribbean/Black British - - - Other ethnic group, including Arab - - - Not specified/prefer not to say - - - Directors Election and Re-elections The Directors of the Company, with the exception of Katya Thomson, all served throughout the year under review. With the exception of Robert Jeens, all Directors will stand for election or re-election by the shareholders at the AGM in accordance with the AIC Code 2019. Katya Thomson, who joined the board on 18 July 2022, will stand for election at the AGM. The biographies of the Directors are set out on pages 26 and 27. The skills and experience each Director brings to the Board for the long-term sustainable success of the Company are set out below. The attendance record of each Director at meetings of the Board through the year is shown on page 27. – Resolution 2 relates to the election of Katya Thomson, who was appointed on 18 July 2022, who brings in-depth knowledge, expertise and experience in corporate finance and accountancy which enables her to perform an in-depth review of the Company’s financial statements as the Audit & Risk Committee Chairman. – Resolution 3 relates to the re-election of Humphrey van der Klugt who was appointed on 1 July 2015, who has a wealth of experience from his time as an investment manager and investment company director, with strong accounting skills. He is Chairman of the Remuneration Committee as well as the Senior Independent Director. 31 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 - Resolution 4 relates to the re-election of Elisabeth Scott who was appointed on 1 February 2015, who brings in-depth investment knowledge, expertise and experience of the investment management industry from her time in Hong Kong and more recently from being the Chair of the AIC. - Resolution 5 relates to the re-election of Neeta Patel who was appointed on 1 September 2020 as a Director of the Company. Neeta brings a wealth of knowledge from the technology sector. - Resolution 6 relates to the re-election of Tim Scholefield who was appointed on 1 December 2021 as a Director of the Company. Tim brings a wealth of investment knowledge, expertise and experience in investment management, particularly in equities. # Directors' Fees A report on Directors' Remuneration starts on page 43. # Directors' and Officers' Liability Insurance Directors' and Officers' Liability Insurance cover is in place and is provided at the expense of the Company. Directors' and Officers' Deed of Indemnity information can be found on page 38. # Conflicts of Interest Under the Companies Act 2006 a director must avoid a situation where she/he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the Company's interests. Directors are able, if appropriate, to authorise these conflicts and potential conflicts. The Board reports annually on the Company's procedures for ensuring that its powers of authorisation of conflicts are operated effectively and that the procedures have been followed. Under the AIC Code 2019, the Directors are required to notify the Chairman and Company Secretary of any proposed new appointments and new conflicts or potential conflicts for consideration, if necessary, by the Board. The Directors are required to list their current time constraints when requesting prior approval of a new appointment. The Board confirms that its powers of authorisation are operating effectively and that the agreed procedures have been followed in the year under review. # Directors As at the date of this Report, the Board consisted of six non-executive Directors as detailed on pages 26 to 27. All Directors with the exception of Katya Thomson served throughout the year. Katya was appointed to the Board on 18 July 2022. # Board Committees For the year under review the Management Engagement and the Nomination Committees were chaired by the Chairman of the Company, Robert Jeens. The Audit & Risk Committee and Remuneration Committee were chaired by Humphrey van der Klugt. Katya Thomson was appointed as Chairman of the Audit & Risk Committee effective 1 January 2023. The full Terms of Reference, which clearly define the responsibilities of each Committee, can be obtained from the Company Secretary and can be found on the website www.allianztechnologytrust.com. # Management Engagement Committee The Management Engagement Committee report is on page 40. # Nomination Committee The Nomination Committee report is on page 41. # Remuneration Committee The Remuneration Committee report is on page 42. # Audit & Risk Committee The Audit & Risk Committee Report starts on page 48. # The Board and Matters Reserved for the Board The Board is responsible for efficient and effective leadership of the Company and for the Company's affairs. There is a formal schedule of matters reserved for the decision of the Board and there is an agreed procedure for Directors, in the furtherance of their duties, to take independent professional advice if necessary at the Company's expense. The specific areas reserved for the Board include the setting of parameters for and the monitoring of investment strategy, the review of investment performance (including performance relative to the benchmark and to the Company's peer group) and investment policy; final approval of statutory Companies Act 2006 requirements including the payment of any dividend and the allotment of shares; matters of a Stock Exchange or Internal Control nature such as approval of shareholder statutory documentation; performance reviews and director independence; and, in particular matters of a strategic or management nature, such as the Company's long term objectives, commercial and corporate strategy, share buy-back and share issue policy, share price and discount/premium monitoring; the appointment or removal of the AIFM and the Investment Manager; unquoted investment valuations; consideration and final approval of borrowing requirements and limits and corporate governance matters. In order to enable them to discharge their responsibilities, prior to each meeting Directors are provided, in a timely manner, with a comprehensive set of papers giving detailed information on the Company's transactions, financial position and performance. Representatives of the AIFM and the Investment Manager attend each Board meeting, enabling the Directors to seek clarification on specific issues or to probe further on matters of concern. A full report is received from the Investment Manager at each meeting. In the light of these reports, the Board reviews compliance with the Company's stated investment objectives and, within these established guidelines, the 32 Directors’ Review Investment Manager takes decisions as to the purchase continue to receive hard-copy documents by post. In order and sale of individual investments. to reduce the Company’s impact on the environment we encourage Shareholders, wherever possible, to register an Whistleblowing email address and to receive notifications electronically. We will however continue to make available postal copies As the Company has no employees it does not have a where required. formal policy concerning the raising, in confidence, of any concerns about improprieties for appropriate independent investigation. The Audit & Risk Committee has, however, Common Reporting Standard (‘CRS’) received and noted the AIFM and Investment Manager’s CRS is a global standard for the automatic exchange policy on this matter. However, any matters concerning of information commissioned by the Organisation the Company may be raised with the Chairman or Senior for Economic Cooperation and Development and Independent Director. incorporated into UK law by the International Tax Compliance Regulations 2015. CRS requires the Company Modern Slavery Act 2015 to provide certain additional details to HMRC in relation to UK resident foreign investment holders. The reporting The Company does not provide goods or services in the obligation began in 2016 and is an annual requirement. normal course of business, and as a financial investment The Registrars, Link Group, are appointed to collate such vehicle does not have customers. The Directors do not information and file the reports with HMRC on behalf of therefore consider that the Company is required to make a the Company. statement under the Modern Slavery Act 2015 in relation to slavery or human trafficking. Safe Custody Bribery Act 2010 The Company’s listed investments are held in safe custody by HSBC Bank Plc (the ‘Custodian’). Operational The Board has a zero tolerance policy in relation to bribery matters with the Custodian are carried out on the and corruption in its business processes and activities and Company’s behalf by the Manager in accordance with has received assurance via internal controls reporting from the provisions of the investment management agreement. the Company’s main third party service providers that The Custodian is paid a variable fee dependent on the adequate safeguards are in place to protect against any number of trades transacted and location of the securities such potentially illegal behaviour by employees or agents. held. Criminal Finances Act 2017 Depositary The Company has a commitment to zero tolerance HSBC Securities Services (the ‘Depositary’) acts as the towards the criminal facilitation of tax evasion. Company’s Depositary in accordance with the Alternative Investment Fund Managers Directive (AIFMD). The Global Greenhouse Gas Emissions Depositary’s responsibilities, which are set out in the In light of the nature of the Company’s business there are Investor Disclosure Document on the Company’s website, no associated human rights issues and the Company does include cash monitoring; ensuring the proper segregation not have a human rights policy. The Company does not and safe keeping of the Company’s financial instruments maintain premises, hold any physical assets or operations that are held by the Custodian; and monitoring the and does not have any employees. Consequently, the Company’s compliance with investment and leverage limit Company has no greenhouse gas emissions to report requirements. from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Although the Depositary has delegated the safekeeping Act 2006 (Strategic Report and Directors’ Reports) of all assets held within the Company’s investment Regulations 2013. For the same reason as set out above, portfolio to the Custodian, in the event of loss of those the Company considers itself to be a low energy user assets that constitute financial instruments under under the Streamlined Energy and Carbon Reporting AIFMD, the Depositary will be obliged to return to the regulations and therefore is not required to disclose Company financial instruments of an identical type, energy and carbon information. or the corresponding amount of money, unless it can demonstrate that the loss has arisen as a result of an external event beyond its reasonable control, the Electronic Communications consequences of which would have been unavoidable The Company has enabled electronic communications despite all reasonable efforts to the contrary. whereby shareholders may opt to receive documents electronically. Shareholders who opted for this receive either an email, where an email address has been Directors’ Responsibility, Accountability and registered, or letter notifying them of the availability of Audit the Company’s Annual Report, Half-Year Report and any The Directors’ Statement of Responsibilities in respect other Shareholder documents on the Company’s website. of the financial statements is set out on page 47. The Those that elected not to switch to electronic means will Independent Auditors’ Report starts on page 51. The 33 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 Board has delegated contractually to external agencies, including the AIFM and the Investment Manager, the management of the investment portfolio, the custodial services (which include the safeguarding of the assets), the day to day accounting, company secretarial and administration requirements and the registration services. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of the services offered, including the control systems in operation insofar as they relate to the affairs of the Company. The Board receives and considers regular reports from the AIFM and the Investment Manager and ad hoc reports and information are supplied to the Board as required. ### Auditor Objectivity and Independence Mazars LLP is the Auditor of the Company. The Board believes that auditor objectivity and independence is safeguarded for the following reasons: the extent of non-audit work which may be carried out by Mazars LLP is limited and would flow naturally from the firm's role as auditor to the Company; Mazars LLP has provided information on its independence policies and the safeguards and procedures it has developed to counter perceived threats to its objectivity; it also confirms that it is independent within the meaning of all regulatory and professional requirements and that the objectivity of the audit team is not impaired. Each director at the date of approval of this report confirms that: - (a) in so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware; and - (b) the director has taken all the steps he or she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. Mazars LLP will stand for re-election at the forthcoming AGM. ### Disclosures Required by FCA Listing Rule 9.8.4 This rule requires listed companies to report certain information in a single identifiable section of their annual financial reports. Directors confirm that none of the prescribed information is applicable to the Company in the year under review. ### Post Balance Sheet Events Post balance sheet events are detailed in note 16 to the financial statements. ### Annual General Meeting The AGM will be held on Wednesday 26 April 2023 at 2.30pm. This meeting will be held as a hybrid meeting. This means that there will be an in person meeting as well as it being streamed live for those shareholders who cannot attend in person. The formal Notice of AGM, including instructions on how to join online, starts on page 77. The Directors consider that the resolutions relating to the items of special business, as detailed below, are in the best interests of shareholders as a whole. Accordingly, the Directors unanimously recommend to the shareholders that they vote in favour of the resolutions to be proposed at the forthcoming AGM, as they intend to do in respect of their own holdings of Ordinary Shares. The Board welcomes all shareholders to the AGM at which the Portfolio Manager will present his review of the year and prospects for the future. Additionally, shareholders wishing to communicate directly with the Board may make contact via the Company Secretary, details of whom can be found on page 74. The following Resolutions relating to items of special business will be proposed: ### Authority to allot new shares and sell shares from treasury on a non pre-emptive basis By law, directors are not permitted to allot new shares (or to grant rights over shares) unless authorised to do so by shareholders. In addition, directors require specific authority from shareholders before allotting new shares (or granting rights over shares) for cash or selling shares out of treasury, without first offering them to existing shareholders in proportion to their holdings. Resolution 10 seeks to renew the Directors' authority to allot shares up to a maximum aggregate nominal amount of £1,071,891 (42,875,668 Ordinary shares), representing approximately 10 per cent. of the Company's total issued ordinary share capital as at 10 March 2023, being the latest practicable date prior to publication of this document. The authority will expire on 26 July 2024 or, if earlier, at the end of the Annual General Meeting of the Company to be held in 2024, unless previously cancelled or varied by the Company in general meeting. Resolution 11, which is being proposed as a Special Resolution, seeks to renew the Directors' authority to allot equity securities, or sell treasury shares, for cash without having to offer such shares to existing shareholders pro-rata to their existing holdings, up to a maximum aggregate nominal amount of £1,071,891 (42,875,668 Ordinary shares), representing approximately 10 per cent. of the Company's total issued ordinary share capital as at 10 March 2023, being the latest practicable date prior to publication of this document. The authority will expire on 26 July 2024 or, if earlier, at the end of the Annual General Meeting of the Company to be held in 2024, unless previously cancelled or varied by the Company in general meeting. The Directors do not currently intend to allot new shares or sell shares from treasury under these authorities other than to take advantage of opportunities in the market 34 Directors’ Review as they arise and/or to seek to manage demand for the Company’s shares and the premium to NAV per share at which they trade, and only if they believe it would be in the best interests of the Company’s existing shareholders to do so. Under no circumstances would the Directors issue shares or sell treasury shares at a price which would result in a dilution of the NAV per ordinary share. Authority for the Company to purchase its own shares A resolution authorising the Directors to make market purchases of up to 14.99% of the Company’s Ordinary Shares was passed at the AGM of the Company on 26 April 2022. Resolution 12 will authorise the renewal of such authority enabling the Company to purchase in the market up to a maximum of 64,270,626 Ordinary Shares (equivalent to approximately 14.99% of the Company’s issued share capital) either for cancellation or for holding in treasury and sets out the minimum and maximum prices at which Ordinary Shares may be purchased exclusive of expenses, reflecting requirements of the Companies Act 2006 and the Listing Rules. The authority will expire on 26 July 2024 or, if earlier, at the end of the Annual General Meeting of the Company to be held in 2024, unless previously cancelled or varied by the Company in general meeting. The Board believes that such purchases in the market at appropriate times and prices may be a suitable method of enhancing shareholder value. The Company would make either a single purchase or a series of purchases, when market conditions are suitable and within guidelines set from time to time by the Board, with the aim of maximising the benefits to shareholders. The Board believes that the Company’s ability to purchase its own shares may assist liquidity in the market. Additionally, where purchases are made at prices below the prevailing NAV per share, this enhances the NAV for the remaining shareholders. It is therefore intended that purchases will only be made at prices below the prevailing NAV per share, with the purchases to be funded from the realised capital profits of the Company (which are currently £648 million). Approval is also being sought for two secondary authorities under resolutions 13 and 14, to allot new shares, to sell shares held as Treasury Shares, disapplying pre-emption rights. By order of the Board Kelly Nice Company Secretary 10 March 2023 35 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Corporate Governance Statement The Board recognises the importance of a strong At 31 December 2022, the Board comprised of six non- corporate governance culture that meets the listing executive Directors, of whom Robert Jeens is Chairman. requirements. The Board has put in place a framework for A formal schedule of matters reserved for decision by corporate governance which it believes is appropriate for the Board has been adopted. The Board has engaged an investment company in line with the best practices in external firms to provide investment management, relation to matters affecting shareholders, communities, secretarial, depositary and custodial services. Contractual regulators and other stakeholders of the Company. With arrangements are in place between the Company and a range of relevant skills and experience, all Directors these firms. The Board carefully considers the various contribute to the Board discussions and debates on guidelines for determining the independence of non- corporate governance. In particular, the Board believes executive Directors, placing particular weight on the in providing as much transparency for investors as is view that independence is evidenced by an individual reasonably possible to ensure investors can clearly being independent of mind, character and judgement. All understand the prospects of the business and enhance Directors are presently considered to be independent. All liquidity of its shares while also preserving an appropriate Directors retire at the AGM each year and, if appropriate, level of commercial confidentiality. seek re-election. Each Director has signed a letter of appointment to formalise the terms of their engagement The Board has considered the Principles and Provisions of as a non-executive Director, therefore they do not have a the AIC Code of Corporate Governance (AIC Code). The service contract with the Company. Copies of the letter of AIC Code addresses the Principles and Provisions set out engagements are available on request and at the AGM. in the UK Corporate Governance Code (the UK Code), as well as setting out additional Provisions on issues that are Board Culture of specific relevance to the Company. The UK Code was The Board adopts a culture where all parties are treated updated in July 2018. with respect. The Directors provide mutual support The Board considers that reporting against the Principles combined with constructive challenge. The Chairman and Provisions of the AIC Code, which has been endorsed encourages open debate to foster a supportive and co- by the FRC, provides more relevant information to operative approach for all participants. The Board aims shareholders. to be open and transparent with shareholders and their respective stakeholders. At regular meetings the Board The AIC Code is available on the Company’s and AIC’s engages with the AIFM and the Investment Manager websites. It includes an explanation of how the AIC Code to understand its culture and receives reporting and adapts to the Principles and Provisions set out in the UK feedback from other service providers. Code to make them relevant for investment companies. Appointments to the Board and Director Tenure Application of the Provisions and Principles The Board regularly reviews its composition, having regard The Company has compiled with the Principles and to the Board’s structure and to the present and future Provisions of the AIC Code during the year ended 31 needs of the Company. The Board takes into account its December 2022. Where the Principles and Provisions are diversity, the balance of expertise and skills brought by related to the role of the chief executive, internal audit individual Directors, and length of service, where continuity function and executive directors’ remuneration, the Board and experience can add significantly to the strength of considers these principles not relevant as the Company the Board and believes that this provides for a sound base is an externally managed Company with an entirely non- from which the interests of investors will be served to a executive Board, no employees or internal operations. high standard. The Board The Board believes in the benefits of having a diverse The Directors are responsible for the effective stewardship range of experience, skills, length of service and of the Company’s affairs and aim to provide effective backgrounds. The tenure of each Director, including the leadership so that the Company has the platform Chairman, is not ordinarily expected to exceed nine years. from which it can achieve its investment objective. The However, the Board is also of the view that length of Board’s role is to guide the overall business strategy service will not necessarily compromise the independence to achieve long term success and value for the benefit or contribution of directors of an investment trust company of shareholders. A fuller description of the Company’s or, indeed, its chairman. Continuity and experience can strategy can be found on page 16. Strategic issues add significantly to the strength of the Board especially and all operational matters of a material nature are in times of market turbulence. All Directors with the considered at its meetings. exception of Robert Jeens have served for fewer than 36 Directors’ Review nine years. As noted in the Chairman’s Statement on Board Evaluation page 8, Robert Jeens will retire at the Company’s The Board evaluates its performance and considers forthcoming AGM. The Directors’ appointments are the tenure and independence of each Director on an formally reviewed annually after the first AGM following annual basis. During 2022, an internal Board evaluation their date of joining the Board. In line with the principles was conducted where by each Director was required to of the AIC Code, each Director will stand for re-election complete an in-depth questionnaire on the workings annually at the AGM. The biographies of each Director of and individual contributions to the Board as a whole can be found on pages 26 and 27 and the ordinary and the performance of the Chairman. The results resolutions for their election and re-election on page 31. were discussed at the Nomination Committee held in November 2022 and it was concluded that the evaluation The Board appoints all directors on merit and under the process has been satisfactory. Articles of Association of the Company, the number of Directors may be no more than ten and no less than two. Each Director believes that the composition of the A director may be appointed by ordinary resolution. When Board and its Committees reflect a suitable mix of skills the Nomination Committee considers Board succession and experience, and that the Board, as a whole, and planning and recommends appointments to the Board, its Committees functioned effectively during 2022. All it takes into account a variety of factors. Knowledge, meetings of the Board and Committees were held in experience, skills, personal qualities, residency and person, with some Directors attending virtually when governance credentials play an important part. During necessary. The composition of the Board, Committees the year under review, there were no retirements and one and tenure of the Chairman are reviewed annually by the new appointment. The recruitment of Katya Thomson, Nomination Committee. Further details can be found on following a process run by Sapphire Partners, an external page 41. recruitment agency, provides additional expertise in corporate finance and accounting. The Board is diverse in its composition and thought processes. The Directors have a breadth of experience relevant to the Company. The Directors believe that any Meetings changes to the Board’s composition can be managed The Board is scheduled to meet at least four times a without undue disruption. The members of the Board year and between these formal meetings there is regular strive to challenge each other constructively to make sure contact with the Alternative Investment Fund Manager all issues are examined from different angles and the (‘AIFM’), the Investment Manager, the Company Secretary Board holds the AIFM and Investment Managers properly and the Company’s Brokers. The Directors are kept fully to account on their progress on inclusion and diversity. informed of investment and financial controls, and other matters that are relevant to the business of the Company The Board recommends the re-election of Directors and that should be brought to the attention of the Directors. supporting biographies are disclosed on pages 26 and The Directors also have access, where necessary in the 27 of this annual report. furtherance of their duties, to independent professional advice at the expense of the Company. The attendance Delegation of Responsibilities record of Directors for the year to 31 December 2022 is set The Board has delegated the following areas of out on page 27. responsibility: The day-to-day administration of the The Board considers agenda items laid out in the notice Company has been delegated to Allianz Global Investors and agenda of each meeting which are circulated to GmbH, UK Branch in its capacity as Company Secretary the Board in advance of the meeting as part of the and Administrator, along with financial administration and Board papers. Directors may request any agenda items investor relations. Tasks include preparing the valuations, to be added that they consider appropriate for Board the statutory accounts, the management accounts, discussion. Each Director is required to inform the Board presenting results and information to shareholders, of any potential or actual conflicts of interest prior to coordinating all corporate service providers to the Board discussion. The Board constantly considers the Company and giving the Board general advice. As Company’s strategy with regard to market conditions and noted in the Directors’ Report, AllianzGI is in the process feedback from shareholders received directly or from the of obtaining a UK license from the FCA to continue to Managers. The investment strategy is reviewed regularly operate in the UK. More information can be found on with the AIFM and the Investment Manager. Board page 28. meetings include a review of investment performance and Voya Investment Management Co LLC, the Investment associated matters such as marketing/ investor relations, Manager has full discretion (within agreed parameters) risk management, gearing, general administration and to make investments in accordance with the Company’s compliance, peer group information and industry issues. Investment Policy. Among the specific tasks of the Investment Manager are the overall financial management of the Company and existing portfolio as a whole, including the sourcing of new investments, presenting results and information to shareholders. 37 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 Directors’ and Officers’ Deed of Indemnity The Directors are responsible for overseeing the effectiveness of the risk management and internal control The Company has also entered into qualifying third systems for the Company, which are designed to ensure party deeds of indemnity with each Director to cover that proper accounting records are maintained, that any liabilities that may arise to a third party, other than the financial information on which business decisions the Company, for negligence, default or breach of are made and which is issued for publication is reliable, trust or duty. The deeds were in force during the year and that the assets of the Company are safeguarded. to 31 December 2022 and up to the date of approval Such a system of internal control is designed to manage of this report. The Directors are not indemnified in rather than eliminate the risks of failure to achieve the respect of liabilities to the Company or costs incurred Company’s business objectives and can only provide in connection with criminal proceedings in which the reasonable and not absolute assurance against material Director is convicted or required to pay any regulatory or misstatement or loss. criminal fines. Directors’ and Officers’ Liabilities insurance information can be found on page 32. The Directors, through the procedures outlined below and further detailed in the Strategic Report and the Audit & Training and Advice Risk Committee Report, have kept the effectiveness of New Directors are provided with an induction programme the Company’s risk management and internal controls that is tailored to the particular requirements of the under review throughout the year covered by these appointee. Thereafter regular briefings are provided financial statements and up to the date of approval of on changes in regulatory requirements that affect the the Annual Financial Report. The Board has identified Company. Directors are also encouraged to attend risk management controls in the key areas of investment industry and other seminars. Directors, in the furtherance strategy, technology sector risk, cyber risk, market risk, of their duties, may also seek independent professional currency risk, financial and liquidity risk and operational advice at the expense of the Company. No Director took risk for extended review. Emerging risks are also such advice during the financial year under review. All considered by the Board. Directors have access to the advice and services of the The Directors’ Statement of Responsibilities, set out on Company’s Secretary, who is responsible to the Board for page 47, confirms that they have carried out a robust ensuring that Board procedures are followed and that assessment of the emerging and principal risks facing the applicable rules and regulations are complied with. The Company, including those that would threaten its business Company Secretary is also responsible for advising the model, future performance, solvency or liquidity and Board through the Chairman on all governance matters. reputation. Conflicts of Interest The AIFM and the Investment Manager have established Company directors have a statutory obligation to avoid a internal control frameworks to provide reasonable situation in which they (and connected persons) have, or assurance on the effectiveness of the internal controls can have, a direct or indirect interest that conflicts, or may operated on behalf of their clients. The AIFM and possibly conflict, with the interests of the Company. The Investment Manager’s compliance and risk departments Board has in place procedures for managing any actual or assess the effectiveness of the internal controls on an potential conflicts of interest as set out on page 32. No ongoing basis. conflicts of interest arose during the year under review. The AIFM and the Investment Manager provide the Board with regular reports on all aspects of internal Alternative Performance Measures control (including financial, operational and compliance In addition to providing guidance on Corporate control, risk management and relationships with external Governance, the AIC provides the investment company service providers). Business risks have been analysed and industry with leadership on the reporting of alternative recorded in a Risk Matrix, which is formally reviewed by performance measures to support a fair and balanced the Audit & Risk Committee at its meetings and at other approach to the performance of your Company. A times as necessary. It is believed that an appropriate glossary of Alternative Performance Measures (‘APMs’) framework is in place to meet the requirements of the AIC can be found on page 72. Code. The Investment Manager, at least on a quarterly basis, Audit, Risk Management & Internal Controls reports to the Board on the market and on the investment For the reasons previously mentioned, the Directors performance of the Company’s portfolio. Further consider the provisions relating to the internal audit as not information is contained in the Chairman’s Statement, the relevant to the Company. Directors’ Report and the Investment Manager’s Review. There is an Audit & Risk Committee, which is chaired by Katya Thomson, that meets at least twice a year and the full Audit & Risk Committee Report starts on page 48. 38 Directors’ Review Relations with Shareholders During 2022, the Company had regular contact with its institutional shareholders in person and virtually through the AIFM and the Investment Manager. The AGM will be held as a hybrid meeting and will allow shareholders to ask the Board questions. The Board and the Annual Report The Board is responsible for reviewing the entire annual report and has noted the supporting information received and the recommendations of the Audit & Risk Committee. The Board has considered whether the annual report satisfactorily reflects a true picture of the Company and its activities and performance in the year under review with a clear link between the relevant sections of the report. The Board was then able to confirm that the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position and performance, business model and strategy. By order of the Board Kelly Nice Company Secretary 10 March 2023 39 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Report of the Management Engagement ## Committee Role of the Committee The AIFM and the Investment Manager The role of the Management Engagement Committee is Reappointment to review the investment management agreement and The Committee last met in November 2022 and in a the Company’s Service Providers. The Committee monitors closed session after the presentations from the AIFM the performance of the Investment Manager for portfolio and the Investment Manager, it was concluded that in its management services and the AIFM for the secretarial, opinion the continuing appointment of both the AIFM and financial, administration, marketing and support services the Investment Manager on the terms agreed was in the that it provides under a tripartite agreement. It also interests of shareholders as a whole and recommended reviews the terms of the agreement including the level and this to the Board. structure of fees payable, the length of notice period and best practice provisions generally. All of the Committee’s Committee Evaluation responsibilities have been carried out over the course of The activities of the Management Engagement the year under review. Committee were considered as part of the Board appraisal process completed in accordance with standard Composition of the Committee governance arrangements as summarised on page 37. All the Directors are members of the Committee. The terms The conclusion from the process was that the Committee | of reference can be found on the Company’s website www. | was operating effectively, with the right balance of | | --- | --- | | allianztechnologytrust.com | membership and skills. | | Manager Evaluation Process | Robert Jeens | | During the year under review, the Committee met once | Management Engagement Committee Chairman | | to consider the relationship, and the services provided | 10 March 2023 | by both the AIFM and the Investment Manager prior to making its recommendation to the Board on the retention of the AIFM and the Investment Manager being in the best interests of the Shareholders. The Committee reviewed the performance fee arrangements to ensure they were still appropriate for the size of the Company. The Committee undertook additional work to review the split of responsibilities under the tripartite agreement, details of which are noted in the Chairman’s Statement and in the Directors Report on page 28. The performance of the AIFM and the Investment Manager is considered at every Board meeting with a formal evaluation by the Committee each year. For the purpose of its ongoing monitoring, the Board receives detailed reports and views from the Investment Manager on the investment policy and strategies, asset allocation, stock selection, attributions, portfolio characteristics and risk. The Board also assesses the Investment Manager’s performance against the investment controls set by the Board. A breakdown of the portfolio begins on page 14. 40 Directors’ Review ## Report of the Nomination Committee Role of the Committee Succession Planning The primary role of the Nomination Committee is to During the year the Committee started the process for the review and make recommendations with regard to appointment of a new non-executive director. Sapphire Board structure, size and composition, the balance of Partners, an executive search agency, were engaged to knowledge, experience, skill ranges and diversity and assist with the recruitment process. The Company and consider succession planning and tenure policy. All of the Directors have no other connection with Sapphire the Committee’s responsibilities have been carried out Partners. The Committee provided their criteria for the during the year under review. The Committee met on two appointment. Sapphire Partners introduced several occasions during the year and specifically considered, candidates to the Committee who were invited for monitored and reviewed the following matters: interview with all existing directors. Katya Thomson was appointed to the Board on 18 July 2022. – the structure and size of the Board and its composition particularly in terms of succession planning and the Board Evaluation experience and skills of the individual Directors and An external evaluation was last conducted in 2020, diversity across the Board as a whole; and in 2021 and 2022 the evaluation was performed – tenure policy; internally. The evaluation process adopted required each – the criteria for future Board appointments and the director to complete an in-depth questionnaire on the methods of recruitment, selection and appointment; workings of and individual contributions to the Board as a – the recruitment of a new Director and the whole and the performance of the Chairman. Questions reappointment of those Directors standing for re- also included a review of the interaction with the AIFM election at annual general meetings; and the Investment Manager. The Senior Independent – the need for any changes in committee membership; Director led the review of the Chairman. The results of – the attendance and time commitment of the Directors the questionnaires were collated anonymously and in fulfilling their duties, including the extent of their other discussed at the Committee meeting in November 2022. directorships; Any concerns were discussed openly and addressed – the question of each Director’s independence prior to with all Directors with the AIFM present. It was agreed publication of the Report and Accounts; and by all participants that the evaluation process had been – the authorisation of each Director’s situational conflicts effective and that the review points identified would be of of interests in accordance with the provisions of the Act. benefit to the Board and the Company as a whole. Board and diversity is summarised on page 30. Composition of the Committee The Committee is composed of all the current Directors Committee Evaluation and chaired by the Chairman of the Board. The terms of The activities of the Nomination Committee were reference can be found on the Company’s website www. considered as part of the Board appraisal process allianztechnologytrust.com. completed in accordance with standard governance arrangements as summarised on page 37. The conclusion from the process was that the Committee was operating effectively, with the right balance of membership, experience and skills. Robert Jeens Nomination Committee Chairman 10 March 2023 41 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Report of the Remuneration Committee Role of the Committee Committee Evaluation The primary role of the Remuneration Committee is to The activities of the Remuneration Committee were determine the remuneration policy for the Chairman considered as part of the Board appraisal process and Directors as well as considering the need to appoint completed in accordance with standard governance | external remuneration consultations. The Committee | arrangements as summarised on page 37. The | | --- | --- | | reviews the effectiveness of the remuneration policy and | conclusion from the process was that the Committee was | | strategy at least once a year. | operating effectively. | | Composition of the Committee | Humphrey van der Klugt | Remuneration Committee Chairman The Committee comprises of all current Directors and 10 March 2023 is chaired by Humphrey van der Klugt. The terms of reference can be found on the Company’s website www. allianztechnologytrust.com. Consideration of Directors’ Remuneration The Committee has not received external independent advice or services in respect of its consideration of the Directors’ remuneration; however the Company Secretary provides the Board with details of comparable fees and other market information. The policy is to review directors’ fee rates from time to time, but reviews will not necessarily result in a change to the rates. Any feedback received from shareholders is also taken into account when setting remuneration levels. The level of Directors’ fees are recommended to and approved by the Board. Directors abstain from voting on their own fees. Directors’ remuneration is paid quarterly or monthly in arrears and is paid to the individual director; no payments have been made to third parties on behalf of the individual. A detailed summary of the Chairman and Directors’ remuneration starts on page 43. 42 Directors'^{}[] Review # Directors' Remuneration Implementation Report ## Introduction This Directors' Remuneration Implementation Report (the Report) has been prepared in accordance with the requirements of Sections 420-422A of the Companies Act 2006 and Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended in August 2013 (the Regulations). The Report is subject to an annual advisory vote of shareholders and an Ordinary Resolution for the approval of the Report will be put to the shareholders at the AGM. The law requires your Company's Auditor to audit certain disclosures provided. Where disclosures have been audited, they are noted as such. The Auditor's opinion is included in their report which starts on page 51. ## Remuneration Policy Report The Remuneration Policy of the Company is required to be put to a binding vote of shareholders at least once every three years; the policy was last proposed to and approved by shareholders at the AGM in 2021 and will therefore next be proposed as a binding vote at the AGM in 2024. The Remuneration Policy Report follows on page 46 and is available on the Company's website www.allianztechnologytrust.com. ## Remuneration Committee A detailed description of the Committee's role and members can be found on page 42. ## Annual General Meeting (AGM) Voting Statement At the AGM held on 26 April 2022, of the votes cast by proxy for the approval of the Remuneration Implementation Report, 146,364,312 (98.87%) were cast in favour, 6,000 (0.01%) were cast as discretionary, 1,663,005 (1.12%) were cast against and 204,736 shares were withheld from the vote. For the Remuneration Policy Report, which was last proposed as a binding vote at the AGM held on 29 April 2021, of the votes cast for approval, 17,117,110 (99.65%) were cast in favour, 1,225 (0.01%) were cast as discretionary, 59,259 (0.34%) were cast against and 32,790 shares were withheld from the vote. ## Annual Statement The Chairman of the Remuneration Committee reports that the Directors' remuneration will be increased as of 1 January 2023 as set out on page 44. ## Relative importance of spend on pay The following disclosure is a statutory requirement. The directors, however, do not consider that the comparison of directors' remuneration with distributions made by the Company is a meaningful measure of the Company's overall performance. The table below sets out the total level of remuneration compared to the share buy-backs, dividends and distributions made in the year: | | 2022 £ | 2021 £ | 2020 £ | 2019 £ | 2018 £ | | --- | --- | --- | --- | --- | --- | | Total Remuneration | 203,064 | 149,500 | 128,250 | 132,167 | 118,084* | | Total Dividends, Share Buy-backs and Distributions | 39,263,000 | 16,772,000 | - | - | - | \* 2018 was a 13 month period ## Directors' Service Contracts It is the Board's policy that none of the Directors has a service contract. The terms of their appointment provide that Directors shall, in accordance with the Articles of Association, stand for election by shareholders at the first AGM after their appointment. Each Director will stand for annual election as required by the AIC Code. The terms also provide that a Director may resign by notice in writing to the Board at any time and may be removed without notice and that compensation will not be due on leaving office. Directors' and Officers' Liability Insurance cover is held by the Company. The Board has granted individual indemnities to the Directors. 43 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Your Company's Performance The regulations require a line graph to be included in the Directors' Remuneration Report showing total shareholder return for each of the financial years over a ten year period. The graph below measures the Company's share price and net asset value performance against its Benchmark index of the Dow Jones World Technology Index and is rebased to 100. An explanation of the Company's performance is given in the Chairman's Statement and Investment Manager's Review. ![img-2.jpeg](img-2.jpeg) Source: AllianzGI / Datastream in sterling. Figures have been rebased to 100 as at 31 December 2012. ## Directors' Fees All the Directors, apart from Katya Thomson who joined on 18 July 2022, served throughout the year and received the fees set out below. In the year under review to 31 December 2022 the Directors' fees were paid at the rate of £32,000 (2021: £30,000) per annum with the Chairman of the Board receiving an extra £19,000 (2021: £18,000) per annum and the Chairman of the Audit & Risk Committee, who is also the Senior Independent Director, an extra £9,500 (2021: £9,000) per annum. A review of Directors' fees is conducted annually by the Remuneration Committee, taking into consideration the increasing demands and accountability of the corporate governance and regulatory environment, as well as the fees of other comparable investment companies. No external remuneration consultant was used. As a result of the review, the following increases were agreed. The Directors' fees will be increased as of 1 January 2023 to £33,000 per annum. The Chairman of the Board will receive £53,000 per annum. The Chairman of the Audit & Risk Committee will receive £41,500 and the Senior Independent Director will receive £34,500 per annum. In accordance with the Company's Articles of Association, the aggregate maximum limit for fees that may be paid to the Directors per annum is £250,000. These fees exclude any employers' national insurance contributions, if applicable. Directors are authorised to claim reasonable expenses from the Company in relation to the performance of their duties. However, the policy is to only claim ad hoc expenses which would not ordinarily include general travel to and from meetings held in London. No director is entitled to receive share options, bonuses, pension benefits or other financial or non-financial incentives either in substitution for or in addition to the remuneration stated above. 44 Directors’ Review Directors’ Remuneration (Audited Information) The Directors who served in the year received the following emoluments in the form of fees: | | Variable | | Total | Variable | | Total | | --- | --- | --- | --- | --- | --- | --- | | | | Fees | Fees | | Fees | Fees | | Appointed | | 2022 | 2022 | | 2021 | 2021 | Robert Jeens 1 August 2013 (and as Chairman: 2 April 2014) - 51,000 - 48,000 Humphrey van der Klugt 1 July 2015 (and as Audit & Risk Committee Chairman: 14 April 2016) - 41,500 - 39,000 Elisabeth Scott 1 February 2015 - 32,000 - 30,000 Neeta Patel 1 September 2019 - 32,000 - 30,000 Tim Scholefield 1 December 2022 - 32,000 - 2,500 Katya Thomson 18 July 2022 - 14,564 - - - 203,064 - 149,500 No payments of Directors’ fees were made to third parties. The fees are pro-rata. | | | % change | | | | % change | | | | % change | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | from | | | | from | | | | from | | | | 2022 | | 2022 to | | 2021 | | 2020 to | | 2020 | | 2019 to | | 2019 | | | | £ | | 2021 | | £ | | 2021 | | £ | | 2020 | | £ | Chairman 51,000 6 48,000 18 40,500 4 39,000 Audit Chairman & SID 41,500 6 39,000 15 33,750 4 32,500 Independent Director 32,000 6 30,000 11 27,000 4 26,000 The requirements to disclose this information came into force with financial years on or after 10 June 2019 and the comparison will be expanded in future annual reports until such time as it covers a five year period. Directors’ Interests (Audited Information) The Directors are not required to hold any shares in the Company; however, pursuant to Article 19 of the EU Market Abuse Regulations the Directors’ Interests in the share capital of the Company are shown in the table below. Ordinary Shares of 2.5p each 31 December 31 December Appointed 2022 2021 Robert Jeens 1 August 2013 100,000 100,000 Humphrey van der Klugt 1 July 2015 70,000 70,000 Elisabeth Scott 1 February 2015 16,500 16,500 Neeta Patel* 1 September 2019 7,426 4,968 Tim Scholefield 1 December 2021 10,800 - Katya Thomson 18 July 2022 8,800 - * Neeta Patel invests via a monthly investment plan. Since the year end, Neeta Patel has increased her holding to 7,881 Ordinary Shares. There have been no changes to any of the other Directors’ holdings from the year end to the date of this report. Humphrey van der Klugt Remuneration Committee Chairman 10 March 2023 45 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 # Directors' Remuneration Policy Report In accordance with Schedule 8 of The Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended, the Company is required to put to a binding vote of shareholders, at least every three years, the Company's Remuneration Policy Report (the Policy). The Policy was last proposed to and approved by shareholders at the AGM in 2021 and will therefore next be proposed as an Ordinary Resolution at the AGM in 2024. ## Directors' Remuneration The Company's remuneration policy provides that fees payable to the Directors should reflect the time spent by the Board on the Company's affairs and the responsibilities borne by the Directors and should be sufficient to enable candidates of high calibre to be recruited. Directors are remunerated solely in the form of fees payable monthly or quarterly in arrears, paid to the Director personally or to a specified third party. There are no long-term incentive schemes, share option schemes or pension arrangements and the fees are not specifically related to the Directors' performance, either individually or collectively. There are no payments of recruitment bonuses. The 2022 annual fee rates are Chairman: £51,000, Audit & Risk Committee Chairman and SID position: £41,500 and Director: £32,000. The projected 2023 annual fee rates are Chairman: £53,000, Audit & Risk Committee Chairman: £41,500, SID position: £34,500 and Director: £33,000. The Company does not have a Chief Executive Officer and there are no employees. The Board consists of non-executive Directors whose appointments are reviewed by the Board as a whole. None of the Directors has a service contract with the Company and any Director may resign by notice in writing to the Board at any time; there are no set notice periods and no compensation is payable to a Director on leaving office. When reviewing the level of remuneration consideration is given to the time, commitment and Committee responsibilities of each Director. The Board also takes into account the fees paid to directors of companies within its peer group. The Company's Articles of Association limit the aggregate fees payable to Directors to £250,000 per annum. The policy is for the Chairman of the Board and of each relevant Committee to be paid a fee which is proportionate to the additional responsibilities involved in the position. It is intended that the above remuneration policy will continue to apply in the forthcoming financial year and subsequent years. Humphrey van der Klugt Remuneration Committee Chairman 10 March 2023 46 Directors’ Review ## Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Neither an audit nor a review provides assurance on Financial Report and the financial statements in the maintenance and integrity of the website, including accordance with applicable law and regulations. controls used to achieve this, and in particular whether Company law requires the Directors to prepare financial any changes may have occurred to the financial statements for each financial year. Under that law the information since first published. These matters are the Directors have elected to prepare the financial statements responsibility of the Directors but no control procedures in accordance with United Kingdom Generally Accepted can provide absolute assurance in this area. Accounting Practice (United Kingdom Accounting The Directors each confirm to the best of their knowledge Standards and applicable law). The financial statements that: are required by law to give a true and fair view of the state of affairs of the Company and of the total return of (a) the Financial Statements, prepared in accordance the Company for that year. In preparing these financial with applicable accounting standards, give a true and statements, the Directors are required to: fair view of the assets, liabilities, financial position and return of the Company; and – select suitable accounting policies and then apply them (b) the Strategic Report includes a fair review of the consistently; development and performance of the business and – make judgements and estimates that are reasonable the position of the Company, along with a description and prudent; of the principal risks and uncertainties that the – state whether applicable UK accounting standards have Company faces. been followed; and – prepare the financial statements on the going concern The Directors confirm that the Annual Report and basis, unless it is inappropriate to presume that the Financial Statements, taken as a whole are fair, balanced Company will continue in business. and understandable and provide the information necessary to assess the Company’s position and The Directors confirm that the financial statements comply performance, business model and strategy. with the above requirements. The Directors are responsible for keeping adequate For and on behalf of the Board accounting records that disclose with reasonable accuracy at any time the financial position of the Company and Robert Jeens enable them to ensure that the financial statements Chairman comply with the Companies Act 2006. They are also 10 March 2023 responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, a Directors’ Report, and Corporate Governance Statement, and a Directors’ Remuneration Report which comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. The financial statements are published on www.allianztechnologytrust. com, which is a website maintained by the Alternative Investment Fund Manager. The work undertaken by the Auditors does not involve consideration of the maintenance and integrity of the website and, accordingly, the Auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions. 47 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Audit & Risk Committee Report Introduction from the Chairman I am pleased to present my formal report to Shareholders as Chairman of the Audit & Risk Committee for the year ended 31 December 2022. This is my first report to Shareholders as Chairman of the Committee. I would like to take this opportunity to thank the previous Chairman, Humphrey van der Klugt, who stepped down as Chairman of the Committee on 31 December 2022, for his support and guidance to enable a smooth transition. During the year under review and following an audit tender in 2021, Mazars LLP were appointed as auditor at the Company’s Annual General Meeting effective from 13 July 2022. Their independent report can be found on page 51. Responsibility The primary responsibilities of the Committee are to ensure the integrity of the Company’s financial reporting and the appropriateness of the risk management processes and internal controls. The report details how we carry out this role. Composition and Meetings The members of the Committee during the year were Humphrey van der Klugt as Chairman, Elisabeth Scott, Neeta Patel, Tim Scholefield and myself joining the Committee on 18 July 2022. Robert Jeens, Chairman of the Board, is not a member of the Committee but attends meetings by invitation. The Committee believes that it is in the best interests of the Company for the Chairman of the Board to attend the Committee meetings. All the members of the Committee are independent Non-Executive Directors, and their skills and experience are set out on pages 26 and 27. The Board reviews the composition of the Committee and it considers that, collectively, its members have sufficient recent and relevant financial and sector experience to fully discharge their responsibilities. The Committee meets at least twice per year. The attendance of the Committee members is shown on page 27. The Committee invites the external auditors and personnel from the AIFM’s financial, compliance and risk functions to attend and report to the Committee on relevant matters. As part of the year end process I, as Chairman of the Committee, attended additional meetings with representatives of the AIFM and the external auditor. In addition, during the year, the Committee also met privately with the external auditor to give them an opportunity to raise any issues without management present. After each Committee meeting the Chairman of the Committee reports to the Board on the main items discussed at the meeting. Role and Responsibilities of the Audit & Risk Committee The Committee’s authority and duties are defined in its terms of reference, which were reviewed during the year, and are available on the Company’s website www.allianztechnologytrust.com. The principal activities carried out during the year were: – Financial reporting: we considered the Company’s financial reports, including the implications of any accounting standards and regulatory changes, significant accounting issues and the appropriateness of the accounting policies adopted. We considered and are satisfied that, taken as a whole, the Annual Financial Report is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position, performance, business model and strategy. – External audit: we considered the scope of the external audit plan and the subsequent findings from this work. – Risk and internal control: we considered the key risks facing the Company and the adequacy and effectiveness of the internal controls and risk management processes. – External auditor: we considered the independence, effectiveness and fees of the external auditor, as detailed later in this report. 48 Directors’ Review Internal Audit The Committee continues to believe that the Company does not require an internal audit function as it delegates its day-to-day operations to third parties from whom it receives internal control reports. Reports from third party auditors on the internal controls maintained on behalf of the Company by AllianzGI and by other providers of administrative and custodian services to AllianzGI or directly to the Company were reviewed during the year. Risk Management The Board has ultimate responsibility for the management of the risks associated with the Company. The Committee assists the Board by undertaking a formal assessment of risks and reporting to the Board as appropriate. The Committee has reviewed its approach to risk management and the reporting of such to the Board and has concluded that the processes in place are adequate and provide a robust assessment of risk associated with the Company. The Committee reviews in detail at least twice per year the full Risk Matrix and Controls schedule and makes appropriate recommendations to the Board which may include adding or removing risks for consideration, monitoring and reviewing the mitigating actions. In turn the Board carries out both a detailed specific review of matters highlighted by the Committee and continues to assess the high-level risks. The Audit & Risk Committee also reviews the annual Internal Controls documents provided by key third party service providers and reports as necessary to the Board. Further details of the key risks associated with the Company are detailed within the Strategic Report. Significant Areas of Risk and Focus Considered by the Audit & Risk Committee During the Year The Annual Report and Financial Statements are the responsibility of the Board and the Statement of Directors’ Responsibilities is on page 47. The Audit & Risk Committee advises the Board on the form and content of the Annual Report and Financial Statements, any issues which may arise in relation to these and any specific areas which require judgement. The Committee is responsible for agreeing a suitable Audit Plan for the year-end audit and production of the Annual Financial Report. The significant areas of risk and focus that the Committee considered were substantively unchanged from 2021 and included: Valuation, existence and Valuations of actively traded investments are reconciled using stock ownership of the Company’s exchange prices provided by third party pricing vendors. The Company holds investments no unquoted investments. Ownership of listed investments is verified by reconciliation to the custodian’s records. Recognition, completeness and Income received is accounted for in line with the Company’s accounting occurrence of revenue policy (as set out on page 59) and is reviewed by the Committee. Compliance with Section 1158 of The Committee regularly considers the controls in place to ensure that the the Corporation Tax Act 2010 regulations for ensuring investment trust status are observed at all times. Maintaining internal controls The Committee receives regular reports on internal controls from AllianzGI and its delegates and has access to the relevant personnel at AllianzGI who have responsibility for risk management. Management and Performance The calculation of the management and performance fees payable to Fees AllianzGI and Voya is reviewed by the Committee before being approved by the Board. Viability Statement The Board is required to make a longer term viability statement in relation to the continuing operations of the Company. The Committee reviews papers produced in support of the statement made by the Board which assesses the viability of the Company over a period of five years. Transition of Investment The Committee reviewed the transition arrangement and delegation Manager agreement. Annual Financial Report The Committee and then the whole Board reviewed the entire Annual Financial Report and noted all the supporting information received. It then considered and concluded that the annual report satisfactorily reflected a true picture of the Company and its activities and performance in the year, with a clear link between the relevant sections of the 49 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 report. The directors were then able to confirm that the Annual Financial Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy. Auditor Effectiveness The Committee is responsible for reviewing the terms of appointment of the Auditor and for monitoring the audit process including the effectiveness and objectivity of the Auditor in fulfilling the terms of the agreed Audit Plan and the Audit Findings Report subsequently issued by them. As part of the review of the auditor, the members of the Committee and those representatives of the Manager involved in the audit process reviewed and considered a number of areas including: – the reputation and standing of the audit firm – the audit processes and evidence of partner oversight – audit communication including details of planning; and – information on relevant accounting and regulatory developments, and recommendations on corporate reporting. Auditor Tenure There are no contractual obligations which restrict the Committee’s choice of auditor. This is Mazars LLP’s first year as the Company’s Independent Auditor with Nargis Yunis appointed as audit partner. Following professional guidelines, Nargis can serve for up to five years. The continued appointment of the Auditor is considered by the Audit & Risk Committee each year, taking into account relevant guidance and best practice and considering their independence and the effectiveness of the external audit process. Auditor Independence The Committee has confirmed the independence of the auditor and Mazars LLP has confirmed that they are independent of the Company and have complied with relevant standards on auditing. Mazars LLP did not provide any non-audit services to the Company in this or the previous accounting year. The Committee also took into account the competitiveness of their fees and obtained feedback from the AIFM regarding the performance of the audit team. The Committee is satisfied with the independence and performance of the Auditor. Mazars LLP will be proposed at the forthcoming AGM to be re-appointed as auditors of the Company for the year ending 31 December 2023. Committee Evaluation The activities of the Audit & Risk Committee were considered as part of the Board appraisal process completed in accordance with standard governance arrangements as summarised on page 37. The conclusion from the process was that the Committee was operating effectively, with the right balance of membership, experience and skills. Katya Thomson Audit & Risk Committee Chairman 10 March 2023 50 Financial Statements ## Independent Auditor’s Report to the Members of ## Allianz Technology Trust PLC Opinion may cast significant doubt on the Company’s ability to continue as a going concern; We have audited the financial statements of Allianz – obtaining an understanding of the relevant controls Technology Trust PLC (the ‘Company’) for the year ended relating to the directors’ going concern assessment; 31 December 2022 which comprise the Income Statement, – making enquiries of the directors to understand the the Balance Sheet, the Statement of Changes in Equity, period of assessment considered by the directors, and notes to the financial statements, including a assessing and challenging the appropriateness of the summary of significant accounting policies. directors’ key assumptions in their income and expense The financial reporting framework that has been applied projections and implication of those when assessing in their preparation is applicable law and United Kingdom severe but plausible scenarios; Accounting Standards, including FRS 102 “The Financial – assessing the liquidity of the portfolio through reviewing Reporting Standard applicable in the UK and Republic of Management assessment of how quickly the portfolio Ireland” (United Kingdom Generally Accepted Accounting could be liquidated if required; Practice). – assessing the Company’s performance to date; – evaluating the appropriateness of the Directors’ In our opinion, the financial statements: disclosures in the financial statements on going concern – give a true and fair view of the state of the Company’s and viability statement. affairs as at 31 December 2022 and of the loss for the year then ended; Based on the work we have performed, we have not – have been properly prepared in accordance United identified any material uncertainties relating to events Kingdom Generally Accepted Accounting Practice; and or conditions that, individually or collectively, may cast – have been prepared in accordance with the significant doubt on the Company’s ability to continue as a requirements of the Companies Act 2006. going concern for a period of at least twelve months from when the financial statements are authorised for issue. Basis for opinion Our responsibilities and the responsibilities of the directors We conducted our audit in accordance with International with respect to going concern are described in the relevant Standards on Auditing (UK) (ISAs (UK)) and applicable sections of this report. law. Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit In relation to Allianz Technology Trust PLC’s reporting on of the financial statements” section of our report. We how it has applied the UK Corporate Governance Code, are independent of the Company in accordance with we have nothing material to add or draw attention to the ethical requirements that are relevant to our audit in relation to the directors’ statement in the financial of the financial statements in the UK, including the FRC’s statements about whether the director’s considered Ethical Standard as applied to listed entities and public it appropriate to adopt the going concern basis of interest entities, and we have fulfilled our other ethical accounting. responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained Key audit matters is sufficient and appropriate to provide a basis for our Key audit matters are those matters that, in our opinion. professional judgement, were of most significance in our audit of the financial statements of the current period Conclusions relating to going concern and include the most significant assessed risks of material In auditing the financial statements, we have concluded misstatement (whether or not due to fraud) we identified, that the directors’ use of the going concern basis of including those which had the greatest effect on: the accounting in the preparation of the financial statements overall audit strategy; the allocation of resources in the is appropriate. audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit Our audit procedures to evaluate the directors’ of the financial statements as a whole, and in forming assessment of the Company’s ability to continue to adopt our opinion thereon, and we do not provide a separate the going concern basis of accounting included but were opinion on these matters. not limited to: We summarise below the key audit matter in forming our opinion above, together with an overview of the principal – undertaking an initial assessment at the planning audit procedures performed to address this matter and stage of the audit to identify events or conditions that our key observations arising from those procedures. 51 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 This matter, together with our findings, were communicated to those charged with governance through our Audit Completion Report. Key Audit Matter How our scope addressed the matter Valuation, existence and ownership of the investment Our audit procedures included, but were not limited to: portfolio – understanding Management’s process to record and value investments through discussions with (as described on page 49 in the Report of the Audit Management and examination of control reports for and Risk Committee and as per the accounting policy State Street; set out on page 59). – for all investments in the portfolio, agreeing Investments held as of 31 December 2022 were valued investment holdings to HSBC Bank Plc’s and at £898.9m (2021: £1,428.1m), these are measured in HSBC Security Services custodian and depositary accordance United Kingdom Accounting Standards, confirmation in order to obtain comfort over and the Statement of Recommended Practice issued existence and ownership; by the Association of Investment Companies. The – for all investments in the portfolio, independently investment portfolio solely comprises of level one comparing the market prices to a reputable third investments. party pricing source and recalculating the investment valuations as at the year-end; Investments make up 96% (2021:97%) of net assets by – for all investments in the portfolio, assessing the value and are considered to be the key driver for the frequency of trading to ensuring appropriateness of Company’s performance. The investments are made fair value classification; up of quoted investments that are classified upon initial – reviewing the adequacy of the disclosure in recognition as held at fair value through profit or loss the financial statements and ensure that the and are measured initially and subsequently at fair methodology applied is in accordance with United value which is based on their quoted bid prices at the Kingdom Accounting Standards and the Statement close of business on the year-end date. There is a risk of Recommended Practice issued by the Association that investment recorded might not exist or might not of Investment Companies. be owned by the company. Although the investments are valued at quoted bid prices, there is a risk that Our observations errors in valuation can have a significant impact on the We have no matters to communicate with regards numbers presented. to the valuation, existence and ownership of the investment portfolio held as at 31 December 2022 We therefore identified valuation, existence and ownership of investments as a key audit matter as it had the greatest effect on our overall audit strategy and allocation of resources. Our application of materiality and an overview of the scope of our audit The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Overall materiality £9.4m How we determined it 1% of net assets 52 Financial Statements Rationale for benchmark applied Net assets have been identified as the principal benchmark within the financial statements as it is considered to be the main focus of the shareholders. Whilst valuation processes for these investments are not considered to be complex, there is a risk that errors in valuation could cause a material misstatement. 1% has been chosen as it is a generally accepted industry benchmark for investment trust audits and the Company is a public interest entity. Performance materiality Performance materiality is set to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements in the financial statements exceeds materiality for the financial statements as a whole. On the basis of our risk assessments and together with our assessment of the overall control environment, we set performance materiality at £4.7m which represents 50% of overall materiality. Reporting threshold We agreed with the directors that we would report to them misstatements identified during our audit above £0.3m as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. We also determine a lower level of specific materiality for the Income Statement. As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors made subjective judgements, such as assumptions on significant accounting estimates. We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole. We used the outputs of our risk assessment, our understanding of the Company, its environment, controls, and critical business processes, to consider qualitative factors to ensure that we obtained sufficient coverage across all financial statement line items. Other information The other information comprises the information included in the annual financial report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: – the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements and those reports have been prepared in accordance with applicable legal requirements; 53 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 - the information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has been prepared in accordance with applicable legal requirements; and - information about the Company's corporate governance code and practices and about its administrative, management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules. ### Matters on which we are required to report by exception In light of the knowledge and understanding of the Company and their environment obtained in the course of the audit, we have not identified material misstatements in the: - strategic report or the directors' report; or - information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or - the Company's financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit; or - a corporate governance statement has not been prepared by the Company. ### Corporate governance statement The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Statement specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit: - Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified, set out on page 29; - Directors' explanation as to its assessment of the entity's prospects, the period this assessment covers and why the period is appropriate, set out on page 19; - Directors' statement on fair, balanced and understandable, set out on page 47; - Board's confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on page 20; - The section of the annual financial report that describes the review of effectiveness of risk management and internal control systems, set out on page 20; and; - The section describing the work of the audit committee, set out on page 48. ### Responsibilities of Directors As explained more fully in the directors' responsibilities statement set out on page 47, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. ### Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Based on our understanding of the Company and their industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: Bribery Act 2010, Data Protection Act/GDPR, Money Laundering Regulations 54 Financial Statements 2007 and Money Laundering (Amendment) regulations effect on our audit are discussed in the “Key audit matters” 2012, The Alternative Investment Fund Managers section of this report. Directive (AIFMD), Financial services and markets act A further description of our responsibilities is available on 2000. the Financial Reporting Council’s website at www.frc.org. To help us identify instances of non-compliance with these uk/auditorsresponsibilities. This description forms part of laws and regulations, and in identifying and assessing our auditor’s report. the risks of material misstatement in respect to non- compliance, our procedures included, but were not limited Other matters which we are required to to: address – Gaining an understanding of the legal and regulatory Following the recommendation of the audit committee, framework applicable to the Company, the industry in we were appointed by the Audit Committee on 13 July which they operate, and the structure of the Company, 2022 to audit the financial statements for the year ending and considering the risk of acts by the Company which 31 December 2022 and subsequent financial periods. were contrary to the applicable laws and regulations, including fraud; The non-audit services prohibited by the FRC’s Ethical – Inquiring of the directors, management and, where Standard were not provided to the Company and we appropriate, those charged with governance, as to remain independent of the Company in conducting our whether the Company is in compliance with laws audit. and regulations, and discussing their policies and Our audit opinion is consistent with our additional report procedures regarding compliance with laws and to the audit committee. regulations; – Reviewing any correspondence with relevant licensing or regulatory authorities including the FCA; – Reviewing minutes of directors’ meetings in the year; Use of the audit report and This report is made solely to the Company’s members – Discussing amongst the engagement team the laws as a body in accordance with Chapter 3 of Part 16 of and regulations listed above, and remaining alert to the Companies Act 2006. Our audit work has been any indications of non-compliance. undertaken so that we might state to the Company’s members those matters we are required to state to them We also considered those laws and regulations that in an auditor’s report and for no other purpose. To the have a direct effect on the preparation of the financial fullest extent permitted by law, we do not accept or statements, such as the Listing Rules, HMRC Investment assume responsibility to anyone other than the Company Trust rules, the UK Corporate Governance Code, the AIC and the Company’s members as a body for our audit code of Corporate Governance, the Companies Act 2006 work, for this report, or for the opinions we have formed. and UK tax legislation. In addition, we evaluated the directors’ and Nargis Shaheen Yunis (Senior Statutory Auditor) for and management’s incentives and opportunities for fraudulent on behalf of Mazars LLP manipulation of the financial statements, including the Chartered Accountants and Statutory Auditor risk of management override of controls, and determined 30 Old Bailey that the principal risks related to posting manual London journal entries to manipulate financial performance, EC4M 7AU management bias through judgements and assumptions 10 March 2023 in significant accounting estimates, in particular in relation to the investment portfolio, revenue recognition (which we pinpointed to the accuracy, completeness and cut off, and significant one-off or unusual transactions. Our procedures in relation to fraud included but were not limited to: – Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud; – Gaining an understanding of the internal controls established to mitigate risks related to fraud; – Discussing amongst the engagement team the risks of fraud; – Addressing the risks of fraud through management override of controls by performing journal entry testing; The risks of material misstatement that had the greatest 55 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Income Statement for the year ended 31 December 2022 | | | 2022 | 2022 | | 2022 | | 2021 | 2021 | | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Revenue | | Capital | Total Return | | Revenue | | Capital | Total Return | | | Notes | | £’000s | £’000s | | £’000s | | £’000s | £’000s | | £’000s | (Losses) gains on investments held at fair value 7 - (501,617) (501,617) - 244,546 244,546 through profit or loss Exchange gains (losses) on currency balances 227 9,307 9,534 (33) (457) (490) Income 1 6,683 - 6,683 4,968 - 4,968 Investment management fee and performance fee 2 (6,795) - (6,795) (8,298) - (8,298) Administration expenses 3 (1,098) - (1,098) (1,162) - (1,162) (Loss) profit before finance costs and taxation (983) (492,310) (493,293) (4,525) 244,089 239,564 Finance costs: interest payable and similar expenses - - - - - - (Loss) profit on ordinary activities before taxation (983) (492,310) (493,293) (4,525) 244,089 239,564 Taxation 4 (868) - (868) (608) - (608) (Loss) profit on ordinary activities attributable to (1,851) (492,310) (494,161) (5,133) 244,089 238,956 ordinary shareholders (Loss) earnings per ordinary share (basic and 6 (0.45p) (118.62p) (119.07p) (1.20p) 57.26p 56.06p diluted) The total return column of this statement is the income statement of the Company. The supplementary revenue and capital columns are both prepared under the guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The profit attributable to ordinary shareholders for the year disclosed above represents the Company’s total comprehensive income. The Company does not have any other Comprehensive Income. The notes on pages 59 to 71 form an integral part of these Financial Statements. 56 Financial^{}[] Statements # Balance Sheet at 31 December 2022 | | Notes | 2022 £'000s | 2021 £'000s | | --- | --- | --- | --- | | **Non Current Assets** | | | | | Investments held at fair value through profit or loss | 7 | 898,937 | 1,428,136 | | **Current Assets** | | | | | Other receivables | 9 | 838 | 1,091 | | Cash and cash equivalents | 9 | 41,695 | 45,968 | | | | **42,533** | **47,059** | | **Current Liabilities** | | | | | Other payables | 9 | (2,522) | (2,823) | | **Net current assets** | | **40,011** | **44,236** | | **Total net assets** | | **938,948** | **1,472,372** | | **Capital and Reserves** | | | | | Called up share capital | 10 | 10,719 | 10,719 | | Share premium account | 11 | 334,191 | 334,191 | | Capital redemption reserve | 11 | 1,021 | 1,021 | | Capital reserve | 11 | 626,971 | 1,158,544 | | Revenue reserve | 11 | (33,954) | (32,103) | | **Shareholders' funds - equity** | 12 | **938,948** | **1,472,372** | | **Net asset value per ordinary share** | 12 | **231.0p** | **347.9p** | The financial statements of Allianz Technology Trust PLC, company number 3117355, were approved and authorised for issue by the Board of Directors on 10 March 2023 and signed on its behalf by: Robert Jeens Chairman 10 March 2023 The notes on pages 59 to 71 form an integral part of these Financial Statements. 57 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Statement of Changes in Equity for the year ended 31 December 2022 | Called up | | | Share | | Capital | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Share | Premium | | Redemption | | Capital | Revenue | | | | Capital | Account | | | Reserve | Reserve | Reserve | Total | | | £’000s | | £’000s | | £’000s | £’000s | £’000s | £’000s | Net assets at 1 January 2021 10,549 313,360 1,021 931,227 (26,970) 1,229,187 Revenue loss - - - - (5,133) (5,133) Shares issued from block listing facility during the 170 20,831 - - - 21,001 year Shares repurchased into treasury during the year - - - (16,772) - (16,772) Capital profit - - - 244,089 - 244,089 Net assets at 31 December 2021 10,719 334,191 1,021 1,158,544 (32,103) 1,472,372 Net assets at 1 January 2022 10,719 334,191 1,021 1,158,544 (32,103) 1,472,372 Revenue loss - - - - (1,851) (1,851) Shares repurchased into treasury during the year - - - (39,263) - (39,263) Capital loss - - - (492,310) - (492,310) Net assets at 31 December 2022 10,719 334,191 1,021 626,971 (33,954) 938,948 The notes on pages 59 to 71 form an integral part of these Financial Statements. 58 Financial Statements ## Notes to the Financial Statements for the year ended 31 December 2022 Summary of Accounting Policies for the year ended 31 December 2022 1 The financial statements – have been prepared on the than in cash, the equivalent of the cash dividend is basis of the accounting policies set out below. recognised as revenue. Any excess in the value of the shares received over the amount of the cash dividend The financial statements have been prepared in is recognised in capital. accordance with The Companies Act 2006, FRS 102 and with the Statement of Recommended Practice Deposit interest receivable is accounted for on an ‘Financial Statements of Investment Trust Companies accruals basis. and Venture Capital Trusts’ (SORP) issued by the 3 Investment management fees and administrative Association of Investment Companies (AIC) in July expenses – The investment management fee is 2022. calculated on the basis set out in Note 2 to the In order to better reflect the activities of an investment financial statements and is charged in full to trust company and in accordance with guidance issued revenue as permitted by the SORP. Performance by the AIC, supplementary information which analyses fees are charged in full to capital, as they are the Income Statement between items of a revenue directly attributable to the capital performance of and capital nature has been presented alongside the the investments. Other administrative expenses are Income Statement. In accordance with the Company’s charged in full to revenue. All expenses are recognised status as a UK investment company under section on an accrual basis. 833 and 834 of the Companies Act 2006, net capital returns may be distributed by way of dividend. 4 Valuation – The Company’s business is investing in financial assets with a view to profiting from their The requirements have been met to qualify for total return in the form of increases in fair value. The the exemption to prepare a Cash Flow Statement. financial assets are publicly traded equity investments Therefore the Cash Flow Statement has not been which are held at fair value through profit or loss in included in the financial statements. accordance with FRS 102 Section 11: ‘Basic Financial The accounting policies adopted in preparing the Instruments’ and Section 12: ‘Other Financial current year’s financial statements are consistent with Instruments’. those of previous years. Investments held at fair value through profit or loss The Directors believe that it is appropriate to continue are initially recognised at fair value. After initial to adopt the going concern basis in preparing the recognition, these continue to be measured at fair financial statements as the assets of the Company value, which for quoted investments is either the consist mainly of securities which are readily realisable bid price or the last traded price depending on the and significantly exceed liabilities. The Directors have convention of the exchange on which the investment considered the Company’s investment objective and is listed. Gains or losses on investments are recognised capital structure. The directors have also considered in the capital column of the Income Statement. the risks and consequences of the geo political and Purchases and sales of financial assets are recognised macro-economic events on the operational aspects on the trade date, being the date which the Company of the company and the Company has adequate commits to purchase or sell the assets. financial resources to continue in operational existence for the foreseeable future. 5 Finance costs – In accordance with the FRS 102 Section 11: ‘Basic Financial Instruments’ and Section 2 Revenue – Dividends received on equity shares are 12: ‘Other Financial Instruments’, finance costs of accounted for on an ex-dividend basis. UK dividends borrowing are calculated using the effective interest are shown net of tax credits and foreign dividends are rate method and charged to revenue. grossed up at the appropriate rate of withholding tax. 6 Taxation – Where expenses are allocated between Special dividends are recognised on an ex-dividend capital and revenue, any tax relief obtained in respect basis and treated as a capital or revenue item of those expenses is allocated between capital and depending on the facts and circumstances of each revenue on the marginal basis. Ordinary dividends are dividend. recognised in revenue. Where the Company has elected to receive its Deferred taxation is recognised in respect of all timing dividends in the form of additional shares rather differences that have originated but not reversed at 59 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 the balance sheet date, where transactions or events policies, which are described above, the Directors that result in an obligation to pay more tax or a right are required to make judgement, estimates and to pay less tax in the future have occurred. Timing assumptions about the carrying amounts of assets differences are differences between the Company’s and liabilities that are not readily apparent from other taxable profits and its return as stated in the financial sources. These estimates and associated assumptions statement. are based on historical experience and other factors that are considered to be relevant. Actual results may A deferred tax asset is recognised when it is more likely differ from the estimates. than not that the asset will be recoverable. Deferred tax is measured on a non-discounted basis at the rate Estimates and underlying assumptions are reviewed of Corporation tax that is expected to apply when the on an ongoing basis. Revisions to accounting estimates timing differences are expected to reverse. are recognised in the period in which the estimate is revised if the revision affects only that period or, in the 7 Foreign currency – In accordance with FRS 102 Section period of the revision and future periods if the revision 30: ‘Foreign Currency Translation’, the company is affects both current and future periods. required to nominate a functional currency, being There have been no such significant judgements, the currency in which the company predominately estimates or assumptions made during the year. operates. The functional and reporting currency is The investment portfolio currently consists of listed sterling, reflecting the primary economic environment investments and therefore no significant estimates in which the company operates, the predominant have been made in valuing those securities. currency in which its shareholders operate and the currency in which its expenses are generally paid. 12 Operating segments – The Company has one Transactions in foreign currencies are translated into operating segment, being that of an investment trust sterling at the rates of exchange ruling on the date of investing principally in equity securities on a worldwide the transaction. Assets and liabilities are translated basis, with the aim of achieving long term capital into sterling at the rates of exchange ruling at the growth. balance sheet date. Gains and losses thereon are recognised in the revenue or capital column of the income statement, dependant on the nature of the gain or loss. Gains and losses on investments arising from a change in exchange rate are taken to the capital reserves. 8 Shares repurchased for cancellation and holding in treasury – For shares repurchased for cancellation, Share Capital is reduced by the nominal value of the shares repurchased, and the Capital Redemption Reserve is correspondingly increased in accordance with Section 733 of the Companies Act 2006. The full cost of the repurchase is charged to the Capital Reserve. For shares repurchased for holding in treasury, the full cost is charged to the Capital Reserve. 9 Shares sold (re-issued) from treasury – Proceeds received from the sale of shares held in treasury are treated as realised profits in accordance with Section 731 of the Companies Act 2006. Proceeds equivalent to the original cost, calculated by applying a weighted average price, are credited to the Capital Reserve to replenish the profits available for distribution; proceeds in excess of the original cost are credited to the Share Premium account. 10 Shares issued – Share capital is increased by the nominal value of shares issued. The proceeds in excess of the nominal value of shares net of expenses are allocated to the share premium account. 11 Significant judgements, estimates and assumptions – In the application of the Company’s accounting 60 Financial Statements 1. Income 2022 2021 £’000s £’000s Income from Investments* Equity income from UK investments 293 340 Equity income from overseas investments 5,886 4,628 6,179 4,968 Other Income Deposit interest 504 - 504 - Total income 6,683 4,968 * All equity income is derived from listed investments. 2. Investment Management Fee | | 2022 | 2022 | 2022 | | 2021 | 2021 | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | Capital | Total | Revenue | | Capital | Total | | | £’000s | £’000s | £’000s | | £’000s | £’000s | £’000s | Investment management fee 6,795 - 6,795 8,298 - 8,298 Total 6,795 - 6,795 8,298 - 8,298 Allianz Global Investors GmbH, UK Branch was the appointed Investment Manager up to 25 July 2022. Effective from 25 July 2022, AllianzGI entered into a strategic partnership with Voya Investment Management Co LLC (Voya). The Company has a tripartite Delegation Agreement with AllianzGI and Voya for portfolio management services. AllianzGI will continue its role as Alternative Investment Fund Manager, providing company secretarial, administrative and sales and marketing services and Portfolio Management services will be provided by Voya. The aggregate fees paid by the Company to AllianzGI and Voya do not change. The management agreement provides for a base fee of 0.8% per annum payable quarterly in arrears and calculated on the average value of the market capitalisation of the Company at the last business day of each month in the relevant quarter. The base fee reduces to 0.6% for any market capitalisation between £400m and £1 billion, and 0.5% for any market capitalisation over £1 billion. Additionally there is a fixed fee of £55,000 per annum to cover AllianzGI’s administration costs. In each year, in accordance with the management contract, the Investment Manager is entitled to a performance fee subject to various performance conditions. For years beginning on or after 1 January 2022, the performance fee entitlement is equal to 10.0% (1 December 2013 to 31 December 2021: 12.5%) of the outperformance of the adjusted NAV per share total return as compared to the benchmark index, the Dow Jones World Technology Index (sterling adjusted, total return). Any underperformance brought forward from previous years is taken into account in the calculation of the performance fee. A performance fee is only payable where the NAV per share at the end of the relevant Performance Period is greater than the NAV per share at the end of the financial year in which a performance fee was last paid. At 31 December 2021 this ‘high water mark’ (HWM) was 297.2p per share. In the event the HWM is not reached in any year, any outperformance shall instead be carried forward to future periods to be applied as detailed below. Any performance fee payable is capped at 1.75% of the average daily NAV of the Company over the period (2021: 2.25% of year-end NAV). For this purpose, the NAV is calculated after deduction of the associated performance fee payable. Any outperformance in excess of the cap (or where the HWM has not been met) shall be carried forward to future years to be available for offset against future underperformance but not to generate a performance fee. To the extent the Company has underperformed the benchmark, such underperformance is carried forward and must be offset by future outperformance before a performance fee can be paid. Underperformance/outperformance amounts carried forward do so indefinitely until offset. The performance fee accrued for as at 31 December 2022 was £nil (31 December 2021: £nil). The Investment Manager’s fee is charged 100% to Revenue and the performance fee is charged 100% to Capital. 61 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ### 3. Administration Expenses | | 2022 £'000s | 2021 £'000s | | --- | --- | --- | | **Auditors' Remuneration** | | | | Fee payable to the Company's auditor for the audit of the Company's annual accounts | 47 | 45 | | VAT on auditor's remuneration | 10 | 9 | | | **57** | **54** | | Directors' fees^{1} | 203 | 150 | | Employer national insurance contributions | 16 | 20 | | Marketing costs^{2} | 295 | 277 | | Depository fees | 59 | 68 | | Custodian fees | 65 | 74 | | Registrars' fees | 130 | 163 | | Professional & advisory fees | 98 | 101 | | Stock exchange fees | 59 | 99 | | Legal fees | 25 | 100 | | Printing and postage | 49 | 57 | | FCA fees | 36 | 30 | | AIC fees | 21 | 21 | | Other administrative expenses | 106 | 45 | | VAT recovered | (121) | (97) | | | **1,098** | **1,162** | The above expenses include value added tax where applicable. $^{1}$ Directors' fees are set out in the Directors' Remuneration Implementation Report starting on page 43. $^{2}$ The marketing budget takes into account both the marketing by the AIFM and also third party service providers. 62 Financial Statements 4. Taxation | | 2022 | 2022 | 2022 | | 2021 | 2021 | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | Capital | Total | Revenue | | Capital | Total | | | £’000s | £’000s | £’000s | | £’000s | £’000s | £’000s | Overseas taxation 868 -  868 608 - 608 Total tax 868 -  868 608 - 608 Reconciliation of tax charge (Loss) profit on ordinary activities before taxation (983) (492,310) (493,293) (4,525) 244,089 239,564 Tax on (loss) profit at 19.00% (2021: 19.00%) (187) (93,539) (93,726) (860) 46,377 45,517 Reconciling factors Non taxable income (1,186) - (1,186) (937) - (937) Non taxable capital losses (gains) - 95,307 95,307 - (46,464) (46,464) (Gains) losses on foreign currencies - (1,768) (1,768) - 87 87 Excess of allowable expenses over taxable income 1,373 - 1,373 1,797 - 1,797 Overseas tax suffered 868 - 868 608 - 608 Total tax 868 -  868 608 - 608 The Company’s taxable income is exceeded by its tax allowable expenses. As at 31 December 2022, the Company had accumulated surplus expenses of £89.4m (2021: £77.6m). At 31 December 2022 the Company has not recognised a deferred tax asset of £22.4m (2021: £19.4m) in respect of accumulated expenses based on a prospective corporation tax rate of 25% (2021: 25%). The increase in the standard rate of corporation tax was substantively enacted on 24 May 2021 and will be effective on 1 April 2023. Provided the Company continues to maintain its current investment profile, it is unlikely that the expenses will be utilised and that the Company will obtain any benefit from this asset. In May 2013 the company received confirmation from HM Revenue & Customs of its status as an approved investment trust for accounting periods commencing on or after 1 December 2012, subject to the Company continuing to meet the eligibility conditions at Section 1158 Corporation Tax Act 2010 and the ongoing requirements for approved companies in Chapter 3 of Part 2 Investment Trust (Approved Company) Tax Regulations 2011 (Statutory Instrument 2011/2999). In the opinion of the Directors, the Company has conducted its affairs in such a manner that it continues to meet the eligibility conditions. The Company has not therefore provided tax on any capital gains and losses arising on the disposal of investments. 5. Dividends on Ordinary Shares There were no dividends paid or declared during the financial year ended 31 December 2022 (2021: nil). 63 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 6. (Loss) Earnings per Ordinary Share | | 2022 | 2022 | | 2022 | | 2021 | 2021 | | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | Capital | Total Return | | Revenue | | Capital | Total Return | | | | £’000s | £’000s | | £’000s | | £’000s | £’000s | | £’000s | (Loss) earnings after taxation attributable to (1,851) (492,310) (494,161) (5,133) 244,089 238,956 ordinary shareholders (Loss) earnings per ordinary share (0.45p) (118.62p) (119.07p) (1.20p) 57.26p 56.06p 2022 2021 No. of Shares No. of Shares Weighted average number of Ordinary Shares in issue for the earnings per Ordinary Share calculations above 415,019,252 426,291,035 Basic and diluted earnings per share are the same as the Company has no dilutive instruments. 7. Investments Held at Fair Value through Profit or Loss 2022 2021 Listed assets £’000s £’000s Opening book cost 1,020,260 816,046 Opening investments holding gains 407,876 399,495 Opening market value 1,428,136 1,215,541 Additions at cost 944,166 1,125,387 Disposals proceeds received (971,748) (1,157,338) (Loss) gains on Investments (501,617) 244,546 Market value of investments held at 31 December 898,937 1,428,136 Closing book cost 920,805 1,020,260 Closing investment holding (losses) gains (21,868) 407,876 Closing market value 898,937 1,428,136 (Losses) gains on investments (501,617) 244,546 The company received £971.7m (2021: £1,157.3m) from investments sold in the year. The book cost of these investments when they were purchased was £1,043.6m (2021: 921.1m). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments. Transaction costs and stamp duty on purchases amounted to £207,000 (2021: £152,000) and transaction costs on sales amounted to £419,000 (2021: £242,000). 8. Investments in Subsidiaries or Other Companies As at 31 December 2022 the Company held no investments in subsidiaries, nor did it hold more than 10% of the share capital of any other company or have any holdings in an investee undertaking which comprises 3% or more of any class of capital. 64 Financial^{}[] Statements ## 9. Other Receivables, Cash and Cash Equivalents, and Other Payables | | 2022 £'000s | 2021 £'000s | | --- | --- | --- | | **Other receivables** | | | | Accrued income | 787 | 1,010 | | Other receivables | 51 | 81 | | | **838** | **1,091** | | **Cash and cash equivalents** | | | | Cash at bank | **41,695** | **45,968** | | **Other payables** | | | | Other payables | 2,522 | 2,823 | | | **2,522** | **2,823** | The carrying amount of other receivables, cash and cash equivalents and other payables, each approximate their fair value. ## 10. Called Up Share Capital | | 2022 £'000s | 2021 £'000s | | --- | --- | --- | | **Allotted and Fully Paid** | | | | 428,756,680 Ordinary Shares of 2.5p (2021: 428,756,680)* | 10,719 | 10,719 | \* Inclusive of 22,268,962 (2021: 5,565,090) Ordinary shares held in treasury for reissuance into the market or cancellation at a future date. Shares held in treasury are non-voting and not eligible for receipt of dividend. During the year no Ordinary Shares (2021: 6,800,000) were issued from the block listing facility and 16,703,872 Ordinary shares repurchased to be held in treasury (2021: 5,565,090). During the year no Ordinary Shares were reissued from treasury (2021: nil). Proceeds from share issuances were £nil (2021: £21.0m) net of issuance costs of £nil (2021: £42,000). Since the year end a further 5,745,495 shares have been bought back up to and including 10 March 2023. The Company's Ordinary issued share capital carry one vote each. The holders of Ordinary shares have the right to participate in dividends and other distributions according to their respective rights and interest in the profits of the Company and a return on a winding up of the Company. | | 2022 Number | 2022 £'000s | 2021 Number | 2021 £'000s | | --- | --- | --- | --- | --- | | **Allotted 2.5p ordinary shares** | | | | | | Brought forward | 423,191,590 | 10,580 | 421,956,680 | 10,549 | | Shares repurchased to treasury | (16,703,872) | (418) | (5,565,090) | (139) | | Shares issued from block listing facility | - | - | 6,800,000 | 170 | | **Carried forward** | **406,487,718** | **10,162** | **423,191,590** | **10,580** | | | 2022 Number | 2021 Number | | --- | --- | --- | | **Treasury shares:** | | | | Brought forward | 5,565,090 | - | | Shares repurchased to treasury | 16,703,872 | 5,565,090 | | **Carried forward** | **22,268,962** | **5,565,090** | | **Total ordinary shares in issue and in treasury at the end of the year** | **428,756,680** | **428,756,680** | 65 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 11. Reserves Capital Reserve | | Share | | Capital | | Gains on | | Investment | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Premium | | Redemption | | | Sales of | | | Holding | Revenue | | Account | | | Reserve | Investments | | Gains (Losses) | | | Reserve | | | £’000s | | £’000s | | £’000s | | | £’000s | £’000s | Balance at 30 December 2021 334,191 1,021 749,491 409,053 (32,103) Losses on sales of fixed asset investments - - (507,734) - - Foreign currency gains - - 9,307 - - Net movement in fixed asset investment holding gains - - - 6,117 - Transfer on disposal of investments - - 435,861 (435,861) - Shares repurchased to Treasury during the year - - (39,263) - - Retained loss for the year - - - - (1,851) Balance at 31 December 2022 334,191 1,021 647,662 (20,691) (33,954) The Institute of Chartered Accountants in England and Wales in its technical guidance TECH 02/17BL states that investment holding gains arising out of a change in fair value of assets may be recognised as gains on sales of investments provided they can be readily converted into cash. Securities listed on a stock exchange are generally regarded as being readily convertible into cash and hence investment holding gains in respect of such securities may be regarded as realised under Company Law. The Share Premium Account arose on the issue of ordinary shares. The difference between the par value of shares and the total amount received is allocated here. It is not distributable by way of a dividend and cannot be used to repurchase shares. The Capital Redemption Reserve represents the nominal value of shares repurchased and cancelled. It is not distributable by way of a dividend and cannot be used to repurchase shares. The Capital Reserve reflects realised and unrealised gains and losses on investments and other income and costs recognised in the Capital column of the Income Statement. It can be used for share repurchases for holding in treasury. It is also distributable by way of a dividend. The Revenue Reserve reflects revenue gains or losses. 66 Financial^{}[] Statements ## 12. Net Asset Value ('NAV') per Share The Net Asset Value per share (which equates to the net asset value attributable to each Ordinary Share in issue at the year end calculated in accordance with the Articles of Association) was as follows: | | NAV Per Share Attributable | | | --- | --- | --- | | | 2022 | 2021 | | Ordinary Shares of 2.5p | 231.0p | 347.9p | | | NAV Attributable | | | | 2022 £'000s | 2021 £'000s | | Ordinary Shares of 2.5p | 938,948 | 1,472,372 | The Net Asset Value per share is based on 406,487,718 Ordinary Shares in issue at the year end (2021: 423,191,590 Ordinary Shares). ## 13. Financial Risk Management Policies and Procedures The Company invests in equities and other investments in accordance with its investment policy as stated on the inside front cover. In pursuing its investment objective, the Company is exposed to certain inherent risks that could result in a reduction either in the Company's net return or in its net assets. The main risks arising from the Company's financial instruments are: market risk (comprising market price risk, foreign currency risk and interest rate risk), liquidity risk and credit risk. The Directors determine the objectives and agree policies for managing each of these risks, as set out below. The Investment Manager, in close co-operation with the Directors, implements the Company's risk management policies. These policies have remained substantially unchanged during the current and preceding year. ### (a) Market Risk The Investment Manager assesses the exposure to market risk when making each investment decision, and monitors the risk on the investment portfolio on an ongoing basis. Market risk comprises market price risk, foreign currency risk and interest rate risk. #### (i) Market Price Risk Market price risk arises mainly from the uncertainty about future prices of financial instruments held. It represents the potential loss the Company might suffer through holding market positions in the face of price movements. An analysis of the Company's portfolio starts on page 14. #### Market Price Risk Sensitivity The value of the Company's listed equities, which were exposed to market price risk as at 31 December 2022 and 31 December 2021 was as follows: | | 2022 £'000s | 2021 £'000s | | --- | --- | --- | | Listed equity investments held at fair value through profit or loss | 898,937 | 1,428,136 | The following illustrates the sensitivity of the net return and the net assets to an increase or decrease of 20% (2021: 20%) in the fair values of the Company's listed investments. This level of change is considered to be reasonably possible based on observation of market conditions in the year. The sensitivity analysis is based on the impact of a change to the value of the Company's listed equity investments at each balance sheet date and the consequent impact on the investment management fees for the period, with all other variables held constant. 67 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 | | 2022 | | 2022 | | 2021 | | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | | 20% Increase | | 20% Decrease | | 20% Increase | | 20% Decrease | | | in fair value | | in fair value | | in fair value | | in fair value | | | | £’000s | | £’000s | | £’000s | | £’000s | Revenue earnings Investment management fees (899) 1,079 (1,428) 1,428 Capital earnings Gains (losses) on investments at fair value 179,787 (179,787) 285,627 (285,627) Change in net return 178,888 (178,708) 284,199 (284,199) Management of market price risk The Directors meet regularly to evaluate the risks associated with the investment portfolio. Dedicated fund managers have the responsibility for monitoring the existing portfolio selection in accordance with the Company’s investment objective and seek to ensure that individual stocks meet an acceptable risk reward profile. The Board can authorise the Investment Manager to use options in order to protect the portfolio against high market volatility. Where options are employed, the market value of such options can be volatile but the maximum realised loss on any contract is limited to the original investment cost. No options were taken out in the current year (2021: £ nil). (ii) Foreign Currency Risk Foreign currency risk is the risk of the movement in the values of overseas financial instruments as a result of fluctuations in exchange rates. Management of foreign currency risk Transactions in foreign currencies are translated into sterling at the rates of exchange ruling on the date of the transaction. Foreign currency assets and liabilities are translated into sterling at the rates of exchange ruling at the balance sheet date. It is the Company’s policy not to hedge foreign currency exposure. Any income denominated in foreign currency is converted into sterling on receipt. The Company does not use financial instruments to mitigate the currency exposure in the period between the time that income is included in the financial statements and its receipt. The table below summarises in sterling terms the foreign currency risk exposure: | | 2022 | | 2022 | | 2022 | | 2021 | | 2021 | | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Other | | Total | | | | Other | | Total | | | | Assets and | | Currency | | | | Assets and | | Currency | | | Investments | | Liabilities | | Exposure | | Investments | | Liabilities | | Exposure | | | | £’000s | | £’000s | | £’000s | | £’000s | | £’000s | | £’000s | Sterling 7,838 (1,766) 6,072 11,935 (1,878) 10,057 US Dollar 871,080 41,281 912,361 1,290,369 45,654 1,336,023 Other currency exposure 20,019 496 20,515 125,832 460 126,292 898,937 40,011 938,948 1,428,136 44,236 1,472,372 Foreign Currency Risk Sensitivity The following table details the company’s sensitivity to a 20% increase and decrease in sterling against the relevant foreign currencies and the resultant impact that any such increase or decrease would have on the net return and net assets. The sensitivity analysis includes all foreign currency denominated items and adjusts their translation at the period end for a 20% change in foreign currency rates. 68 Financial Statements | | | 2022 | | | 2022 | | | 2021 | | | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 20% Decrease | | | 20% Increase | | | 20% Decrease | | | 20% Increase | | | | | in sterling | | | in sterling | | | in sterling | | | in sterling | | | | against | | | against | | | against | | | against | | | | | foreign | | | foreign | | | foreign | | | foreign | | | currencies | | | currencies | | | currencies | | | currencies | | | | | £’000s | | | £’000s | | | £’000s | | | £’000s | US Dollar 228,090 (152,060) 334,006 (222,671) Other currency exposure 5,129 (3,419) 31,573 (21,049) Change in net return and net assets 233,219 (155,479) 365,579 (243,720) (iii) Interest Rate Risk Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates. Interest Rate Exposure The table below summarises in sterling terms the financial assets and financial liabilities whose values are directly affected by changes in interest rates. | 2022 | | 2022 | 2022 | 2022 | 2021 | | 2021 | 2021 | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Fixed | Floating | | | | Fixed | Floating | | | | | rate | | rate | Nil | | rate | | rate | Nil | | | interest | interest | | interest | Total | interest | interest | | interest | Total | | £’000s | | £’000s | £’000s | £’000s | £’000s | | £’000s | £’000s | £’000s | Financial assets - 41,695 898,937 940,632 - 45,968 1,428,136 1,474,104 Financial liabilities - - - - - - - - Net financial assets - 41,695 898,937 940,632 - 45,968 1,428,136 1,474,104 Net short-term payables (1,684) (1,732) Net assets per balance sheet 938,948 1,472,372 As at 31 December 2022, the interest rates received on cash balances or paid on bank overdrafts, was 1.9% and 4.5% per annum respectively (2021: 0.0% and 1.25% per annum). Management of interest rate risk The Company invests predominantly in equities, the values of which are not directly affected by changes in prevailing market interest rates. The Company’s policy is to remain substantially fully invested. It does not normally expect to hold significant cash balances for other than brief periods of time and therefore there is minimal exposure to interest rate risk. (b) Liquidity risk Liquidity risk relates to the capacity to meet liabilities as they fall due and is dependent on the liquidity of the underlying assets. Maturity of financial liabilities The table below presents the future cash flows payable by the Company in respect of its financial liabilities. 69 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 | | Three | | Between | Between | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | months | three months | | one and | More than | | | | | or less | and one year | | five years | five years | | Total | | 2022 | £’000s | | £’000s | £’000s | | £’000s | £’000s | Other payables - within one year Other payables 2,522 - - - 2,522 2,522 - - - 2,522 | | Three | | Between | Between | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | months | three months | | one and | More than | | | | | or less | and one year | | five years | five years | | Total | | 2021 | £’000s | | £’000s | £’000s | | £’000s | £’000s | Other payables - within one year Other payables 2,823 - - - 2,823 2,823 - - - 2,823 Management of liquidity risk Liquidity risk is not considered to be significant as the Company’s assets mainly comprise realisable securities, which can be sold to meet funding requirements. Short term flexibility can be achieved through the use of overdraft facilities, where necessary. As at the 31 December 2022, the Company had no committed borrowing facility (2021: £nil). (c) Credit risk Credit risk is the risk of default by a counterparty in discharging its obligations under transactions that could result in the Company suffering a loss. Management of credit risk Outstanding settlements are subject to credit risk. Credit risk is mitigated by the Company through its decision to transact with counterparties of high credit quality. The Company only buys and sells investments through brokers which are considered to be approved counterparties, thus minimising the risk of default during settlement. Normally trades are settled by payment of cash against delivery. The credit ratings of brokers are reviewed quarterly by the Investment Manager. The Company is also exposed to credit risk through the use of banks for its cash position. Bankruptcy or insolvency of banks may cause the Company’s rights with respect to cash held by banks to be delayed or limited. The Company’s cash balances are held with HSBC, rated Aa3 by Moody’s rating agency. The Directors believe the counterparties the Company has chosen to transact with are of high credit quality, therefore the Company has minimal exposure to credit risk. The table below summarises the credit risk exposure of the Company as at 31 December: 2022 2021 £’000s £’000s Other receivables: Accrued income 787 1,010 Other receivables 51 81 Cash and cash equivalents 41,695 45,968 42,533 47,059 Fair values of financial assets and financial liabilities Investments and derivative financial instruments are held at fair value through profit or loss in accordance with FRS 102 sections 11 and 12. FRS102 sets out three fair value hierarchy levels for disclosure that reflect the significance of the inputs used in making the measurements. 70 Financial^{}[] Statements Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant assets as follows: Level 1 - The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly. Level 3 - Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability. As at 31 December 2022, the financial assets at fair value through profit and loss are categorised as follows: | | 2022 £'000s | 2021 £'000s | | --- | --- | --- | | Level 1 | 898,937 | 1,428,136 | | Level 2 | - | - | | Level 3 | - | - | | | **898,937** | **1,428,136** | #### 14. Capital Management Policies and Procedures The Company's objective is to provide long-term capital growth through investing principally in the equity securities of quoted technology companies on a worldwide basis. The Company's capital at 31 December 2022 was as per the equity shareholders' funds in the Balance Sheet on page 57. The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis, including the level of gearing, taking into account the Investment Manager's view on the market and the future prospects of the Company's performance. Capital management also involves reviewing the difference between the net asset value per share and the share price (i.e. the level of share price discount or premium) to assess whether to repurchase shares for cancellation or holding in treasury or to issue shares. The Company's objective, policies and processes for managing capital are unchanged from the preceding accounting period and the Company has complied with them. The Company will not invest in more than 20% of the net assets using 'gearing'. The Company's Articles of Association limit borrowing to one quarter of its called up share capital and reserves. #### 15. Transactions with the Investment Manager and Related Parties The amounts paid to the Investment Manager and the AIFM together with details of the management contract are disclosed in Note 2 on page 61. The existence of an independent board of directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore, under FRS102 Section 33: 'Related Party Disclosures', the Investment Manager and the AIFM are not considered to be related parties. The Company's related parties are its directors. Fees paid to the Company's board, including employer national insurance contributions, are disclosed in Note 3 on page 62. There are no other identifiable related parties at 31 December 2022, and as of 10 March 2023. #### 16. Post Balance Sheet Events Since the year end a further 5,745,495 shares have been bought back for a total cash consideration of £12.8m. As at 10 March there were 428,756,680 shares in issue (including 28,014,457 shares in treasury). 71 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 # Glossary of UK GAAP Performance Measures and Alternative Performance Measures ## UK GAAP performance measures **Net Asset Value** is the value of total assets less all liabilities. The Net Asset Value, or NAV, per ordinary share is calculated by dividing this amount by the total number of ordinary shares in issue. As at 31 December 2022, the NAV was 938.9m (2021: £1,472.4m) and the NAV per share was 231.0p (2021: 347.9p). **Earnings per ordinary share** is the profit after taxation, divided by the weighted average number of shares in issue for the period. For the year ended 31 December 2022 earnings per ordinary share was (0.45p) (2021: (1.20p)), calculated by taking the loss after tax of £1.9m (2021: loss of £5.1m), divided by the weighted average shares in issue of 415,019,252 (2021: 426,291,035). ## Alternative Performance Measures (APMs) **Discount** or **Premium** is the amount by which the stock market price per ordinary share is lower (discount) or higher (premium) than the Net Asset Value, or NAV, per ordinary share. The discount/premium is normally expressed as a percentage of the NAV per ordinary share (see pages 3 and 4). **Ongoing charges** are operating expenses, excluding one off costs, incurred in the running of the company, whether charged to revenue or capital, but excluding financing costs and performance fees. These are expressed as a percentage of the average net asset value during the year and this is calculated in accordance with guidance issued by the Association of Investment Companies (see page 4). | | 2022 £'000s | 2021 £'000s | | --- | --- | --- | | Management fee | 6,795 | 8,298 | | Administration expenses | 1,098 | 1,162 | | Less: non-recurring expenses* | - | (116) | | **Total expenses (A)** | **7,893** | **9,344** | | Average net asset value with debt at market value (B) | 1,127,222 | 1,345,880 | | **Ongoing charge (A/B)** | **0.70%** | **0.69%** | * Non-recurring fees are broker and legal fees in relation to a placing programme (2021: Stock exchange block listing fees) The ongoing charge differs from the ongoing charge in the Company's KID, which is calculated in accordance with the PRIIPs regulations and includes finance costs and performance fees. The ongoing charge including the performance fee payable of £nil (2021: £nil) is 0.70% (2021: 0.69%). 72 Investor Information ## Glossary of Terms AIC Code of Corporate Governance AIC Code Allianz Global Investors GmbH, UK Branch AllianzGI Allianz Global Investors UK Limited AllianzGI UK Allianz Technology Trust PLC The Company Alternative Investment Fund Manager AIFM Alternative Performance Measures APMs Annual Financial Report AFR Annual General Meeting AGM Association of Investment Companies AIC Corporate Social Responsibility CSR Disclosure and Transparency Rules DTR Dow Jones World Technology Index (sterling adjusted, total return) The Benchmark Emissions, Environmental and Ethical EEE Environmental, Social, Governance ESG Federal Reserve Fed Financial Conduct Authority FCA HSBC Bank The Custodian HSBC Security Services The Depositary Key Performance Indicators KPIs Link Group as Registrars Link Net Asset Value NAV Ongoing Charges Figure OCF Senior Independent Director SID State Street as provider of middle office and fund accounting services State Street Task Force on Climate-related Financial Disclosures TCFD UK Code of Corporate Governance The UK Code Voya Investment Management Co LLC Voya 73 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Investor Information | Alternative Investment Fund Manager (AIFM) | Financial Calendar | | --- | --- | | Allianz Global Investors GmbH, UK Branch, | Full year results announced and Annual Financial Report | | 199 Bishopsgate, London, EC2M 3TY | posted to Shareholders in March. | Telephone: +44 (0)20 3246 7000 Annual General Meeting held in April. | Head of Investment Trusts - AllianzGI | Half year results announced and Half-Yearly Financial | | --- | --- | | Stephanie Carbonneil | Report posted to Shareholders in August. | | Email: stephanie.carbonneil@allianzgi.com | The year end is 31 December. | | Company Secretary and Registered Office | How to invest | | Kelly Nice | Information is available from Allianz Global Investors | | Email: kelly.nice@allianzgi.com | either via Investor Services on 0800 389 4696 or on the | Company’s website: www.allianztechnologytrust.com. 199 Bishopsgate, London, EC2M 3TY Telephone: 020 3246 7405 A list of providers can be found on the Company’s website www.allianztechnologytrust.com/how-to-invest Investment Manager | Voya Investment Management Co. LLC | Market and Portfolio Information | | --- | --- | | 555 Mission Street, Suite 1600 | The Company’s Ordinary Shares are listed on the London | | San Francisco, CA 94105 | Stock Exchange under the code ATT. The market price | | Telephone: +1 415 954 4500 | range, gross yield and net asset value (NAV) are shown daily | | Represented by Mike Seidenberg | in the Financial Times and The Daily Telegraph under the | headings ‘Investment Trusts’ and ‘Investment Companies’, Registered Number respectively. The NAV of the Ordinary Shares is calculated 3117355 daily and published on the London Stock Exchange Regulatory News Service. The geographical spread of Bankers and Custodian investments and ten largest holdings are published monthly HSBC Bank plc, 8 Canada Square, London, E14 5HQ on the London Stock Exchange Regulatory News Service. They are also available from the Manager’s Investor Depositary Services Helpline on 0800 389 4696 or via the Company’s HSBC Security Services, 8 Canada Square, London, E14 website: www.allianztechnologytrust.com. 5HQ Share Price Independent Auditors The share price quoted in the London Stock Exchange Mazars LLP, 30 Old Bailey, London, EC4M 7AU Daily Official List for 31 December 2022 was 210.0p per Ordinary Share. Registrars Link Group, 10th Floor, Central Square, 29 Wellington Website Street, Leeds, LS1 4DL. Telephone: 0371 664 0300. Lines Further information about Allianz Technology Trust are open 9.00am to 5.30pm (London time) Monday to PLC, including monthly factsheets, daily share price and Friday. performance, is available on the Company’s website: Email: shareholderenquiries@linkgroup.co.uk www.allianztechnologytrust.com Website: www.linkgroup.com Association of Investment Companies (AIC) Stockbrokers The Company is a member of the AIC, the trade body of Winterflood Investment Trusts, The Atrium Building, the investment trust industry, which provides a range of Cannon Bridge House, 25 Dowgate Hill, London, literature including fact sheets and a monthly statistical EC4R 2GA service. Copies of these publications can be obtained from the AIC, 9th Floor, 24 Chiswell Street, London, EC1Y 4YY, Identifiers or at www.theaic.co.uk. AIC Category: Technology and SEDOL: BNG2M15 Technology Innovation. ISIN: GB00BNG2M159 BLOOMBERG: ATT EPIC: ATT GIIN: YSYR74.99999.SL.826 LEI: 549300OMDPMJU23SSH75 74 Investor^{}[] Information ### Shareholder Enquiries – Link Group In the event of queries regarding their holdings of shares, lost certificates, dividend payments, registered details, etc., shareholders should contact the registrars on 0371 664 0300. Lines are open 9.00am to 5.30pm (UK time) Monday to Friday. Calls to this number are charged at local rates, calls from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Changes of name and address must be notified to the Registrar in writing. Any general enquiries about the Company should be directed to the Company Secretary, Allianz Technology Trust PLC, 199 Bishopsgate, London, EC2M 3TY. Telephone: 020 3246 7405. ### Share Dealing Services Link Group operate an online and telephone dealing facility for UK resident shareholders with share certificates. Stamp duty and commission may also be payable on transactions. For further information on these services please contact: www.linksharedeal.com for online dealing or 0371 664 0445 for telephone dealing. Lines are open 8.00am to 4.30pm Monday to Friday. Calls to this number are charged at local rates, calls from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. ### Shareholder Proxy Voting There are two new ways that shareholders can vote this year. Shareholders may submit their proxy electronically using the Share Portal service at www.signalshares.com. Or via the registrars' new LinkVote+ Shareholder App. Further details on voting via the LinkVote+ App, online through the registrars' Share Portal, or by post using the personalised proxy card provided, are contained within the Notice of Meeting Notes on page 79. ### CREST Proxy Voting Shares held in uncertificated form (i.e., in CREST) may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual. Voting via the Proxymity platform is also available to institutional shareholders. Further details are contained within the Notice of Meeting Notes on page 80. ### FATCA The Company is registered with the Internal Revenue Service (IRS) as a Foreign Financial Institution for the purposes of the Foreign Tax Compliance Act (FATCA). The Company's Global Intermediary Identification Number (GIIN) is YSYR74.99999.SL.826 ### Non Mainstream Pooled Investments The Company is an investment trust and therefore its shares are not subject to the Financial Conduct Authority's (FCA) rules relating to the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes which came into effect on 1 January 2014. Accordingly, its shares can be recommended by IFAs to retail investors in accordance with the FCA's rules in relation to nonmainstream investment products. ### Nominee Code In order to allow investors holding their shares within a nominee company to receive shareholder communications, the Company undertakes to provide multiple copies of such documents to the registered nominee company where prior notice has been given. The Company encourages nominee companies to provide the underlying investors with sufficient information to make informed decisions regarding their investments, including the opportunity to attend Company General Meetings. ### Warning to Shareholders We are aware that some shareholders may have received unsolicited telephone calls or correspondence concerning investment matters. These are typically from overseas based organisations who target UK shareholders offering to sell them, what often turn out to be, worthless or high risk shares in US or UK investments or encourage them to dispose of UK shares. They can be extremely persistent and persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice or offers. Please note that it is most unlikely that either the company or the company's Registrar, Link Group, would make unsolicited telephone calls to shareholders. Any such calls would only ever relate to official documentation already circulated to shareholders and never in respect of investment 'advice'. If you are in any doubt about the veracity of an unsolicited telephone call, please call the Company Secretary on +44 (0)800 389 4696 or the Registrar on +44 (0) 371 664 0300. 75 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 ## Alternative Investment Fund Manager ### Alternative Investment Fund Manager Allianz Global Investors GmbH (AllianzGI) is an investment company with limited liability incorporated in Germany and registered in the UK as a branch with establishment number BR009058 and with an establishment address of 199 Bishopsgate, London, EC2M 3TY. It is authorised by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and is subject to limited regulation by the Financial Conduct Authority (FCA). Website: www.allianzgi.co.uk ### Remuneration Disclosure of the AIFM Employee remuneration of Allianz Global Investors GmbH for the financial year ending 31 December 2022 (all values in Euro). Number of employees: 1,710 | | All employees | Risk Taker | Board Member | Other Risk Taker | Employees with Control Function | Employees with Comparable Compensation | | --- | --- | --- | --- | --- | --- | --- | | Fixed remuneration | 174,302,493 | 7,269,792 | 985,960 | 2,207,677 | 390,480 | 3,685,675 | | Variable remuneration | 121,033,472 | 16,763,831 | 1,483,410 | 4,459,440 | 377,612 | 10,443,368 | | **Total remuneration** | **295,335,965** | **24,033,623** | **2,469,370** | **6,667,117** | **768,092** | **14,129,043** | ### Remuneration Policy of the AIFM The compensation structure at AllianzGI Europe is set up to avoid any kind of excessive risk-taking. Variable compensation awards are delivered via deferral programs to ensure they are linked to sustainable performance. In addition any compensation decisions have to be reviewed and approved by our Functional, Regional and Global Compensation Committees on both an aggregate and individual basis, to further ensure effective risk mitigation. ### AIFM and Depositary The Alternative Investment Fund Managers Directive (AIFMD) aims to create a comprehensive and effective regulatory and supervisory framework for alternative investment fund managers within the EU. Allianz Global Investors GmbH, UK Branch (AllianzGI) is the Company's AIFM and HSBC Securities Services (HSBC) has been appointed as its Depositary in accordance with AIFMD under a depositary agreement between the Company, and HSBC. Depositary fees are charged in addition to custody fees and are calculated on the basis of net assets. ### AIFM Leverage Disclosure The Company may borrow cash and employ leverage which may include the use of derivatives in accordance with the stated investment policy and the underlying investment guidelines set by the Board for the Investment Manager from time to time. It is acknowledged that the use of leverage may expose the Company to greater risk as volatility levels, in particular within derivative contracts, can be high. The use of leverage is therefore carefully considered prior to exposure. The AIFMD requires each element of leverage and its exposure to be expressed as a ratio of the Company's NAV. The Company does not currently employ gearing and does not currently invest in derivatives. ### AIFM Pre-Investment Disclosures The AIFMD requires that potential investors are provided with sufficient pre-investment information in order to make an informed decision. An 'AIFMD: Information Document' is available in the Literature Library on the Company's website at www.allianztechnologytrust.com which provides information on investment objective, strategy, policies and other pertinent information which may have an impact on a potential investors decision. There have been no material changes to the information disclosed within the 'AIFMD: Information Document' since publication. 76 Investor Information # Notice of Meeting **THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.** If you are in any doubt as to what action to take, you should consult your stockbroker, bank manager, solicitor, accountant or other appropriate independent professional advisor authorised under the Financial Services and Markets Act 2000 immediately if you are in the United Kingdom or, if not, another appropriately authorised financial adviser. If you have sold or otherwise transferred all your shares in Allianz Technology Trust PLC, please forward this document and the accompanying Form of Proxy to the purchaser or transferee or to the person through whom the sale or transfer was effected, for transmission to the purchaser or transferee. Notice is hereby given that the Annual General Meeting ('AGM') of Allianz Technology Trust PLC (the 'Company') will be held at Grocers' Hall, Princes Street, London, EC2R 8AD on Wednesday 26 April 2023 at 2.30pm for the following purposes: The AGM will be held in person and voting will be conducted on a poll. However, shareholders will be able to view and listen to a live webcast of the AGM and submit questions to the meeting electronically. Those attending virtually will not be able to vote for the purposes of the business transacted at the AGM and are therefore encouraged to vote ahead of the meeting. Instructions on how to join the meeting virtually are contained on page 81. ## AGM Voting Shareholders are encouraged to vote by proxy. Detail of how to vote, either electronically, by proxy form or through CREST, can be found on pages 79 to 81. The results of the AGM will be announced via the London Stock Exchange and placed on the Company's website as soon as practicable after the conclusion of the AGM. ## Ordinary Business To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions: 1. To receive and adopt the Company's Annual Report and Financial Statements for the financial year ended 31 December 2022, together with the Reports of the Directors and the Independent Auditors' report thereon. 2. To elect Katya Thomson as a Director of the Company. 3. To re-elect Humphrey van der Klugt as a Director of the Company. 4. To re-elect Elisabeth Scott as a Director of the Company. 5. To re-elect Neeta Patel as a Director of the Company. 6. To re-elect Tim Scholefield as a Director of the Company. 7. To re-appoint Mazars LLP as Independent Auditor of the Company to hold office until the conclusion of the next Annual General Meeting of the Company at which the Financial Statements are laid before the Company. 8. To authorise the Directors to determine the remuneration of the Independent Auditor of the Company. 9. To receive and approve the Director's Remuneration Implementation Report for the financial year ended 31 December 2022. ## Special Business To consider and, if thought fit, pass the following resolutions of which 10 and 13 will be proposed as Ordinary Resolutions and 11 12, and 14 will be proposed as Special Resolutions: ### Resolution 10 – Allotment of Shares That, in substitution for any existing authority but without prejudice to the exercise of any such authority prior to the date hereof, the Directors of the Company be and they are hereby 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 shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company (together being 'relevant securities') provided that such authority shall be limited to the allotment of shares and the grant of rights in respect of shares with an aggregate nominal value of up to £1,071,891 (42,875,668 Ordinary shares) (representing 10% of the Company's total issued share capital as at 10 March 2023) such authority to expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, unless previously revoked, varied or extended by the Company in a general meeting, save that the Company may at any time prior to the expiry of this authority make an offer or enter into an agreement which would or might require relevant securities to be allotted or granted after the expiry of such authority and the Directors shall be entitled to allot or grant relevant securities in pursuance of such an offer or agreement as if such authority had not expired. ### Resolution 11 – Disapplication of pre-emption rights That, subject to the passing of resolution 10 above, and in substitution for any existing power but without prejudice to the exercise of any such power prior to the date hereof, the Directors of the Company be and they are hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the 'Act') to allot equity securities (within the meaning of section 560(1) of the Act) for cash either pursuant to the authority given by resolution 10 above or by way of the sale of treasury shares wholly for cash as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power: (a) expires at the conclusion of the next Annual General 77 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 Meeting of the Company after the passing of this resolution or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement as if the power conferred hereby had not expired; and (b) shall be limited to the allotment of equity securities or the sale of treasury shares up to an aggregate nominal value of £1,071,891 (42,875,668 Ordinary shares) (representing 10% of the Company's total issued share capital as at 10 March 2023). # Resolution 12 – Authority to buy back shares That, in substitution for any existing authority but without prejudice to the exercise of any such authority prior to the date hereof, the Company be and is hereby generally and unconditionally authorised, pursuant to and in accordance with Section 701 of the Companies Act 2006 (the 'Act'), to make market purchases (within the meaning of Section 693(4) of the Act) of fully paid Ordinary shares of 2.5p each in the capital of the Company ('Ordinary Shares'), provided that: - (a) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased is 64,270,626 or, if less, the number representing approximately 14.99 per cent. of the issued Ordinary Share capital of the Company on the date on which this resolution is passed; - (b) the minimum price (excluding expenses) which may be paid for an Ordinary Share is 2.5p; - (c) the maximum price (excluding expenses) which may be paid for each Ordinary Share purchased pursuant to this authority shall not be more than the higher of: - (i) 5% above the average closing price on the London Stock Exchange of an Ordinary Share over the five business days immediately preceding the date of purchase; and - (ii) the higher of the last independent trade and the highest current independent bid on the London Stock Exchange; and - (d) unless previously varied, revoked or renewed by the Company in a general meeting, the authority hereby conferred shall expire at the conclusion of the Company's next Annual General Meeting or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, save that the Company may, prior to such expiry, enter into a contract to purchase Ordinary Shares under such authority which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of Ordinary Shares pursuant to any such contract. # Resolution 13 – Allotment of shares – Second authority for the directors' to allot new shares of the Company. THAT, in addition to the authority sought under resolution 10 and in substitution for any existing authority but without prejudice to the exercise of any such authority prior to the date hereof, the Directors of the Company be and they are hereby 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 shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company (together being 'relevant securities') provided that such authority shall be limited to the allotment of shares and the grant of rights in respect of shares with an aggregate nominal value of up to £1,071,891 (42,875,668 Ordinary shares) (representing 10% of the Company's total issued share capital as at 10 March 2023) such authority to expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, unless previously revoked, varied or extended by the Company in a general meeting, save that the Company may at any time prior to the expiry of this authority make an offer or enter into an agreement which would or might require relevant securities to be allotted or granted after the expiry of such authority and the Directors shall be entitled to allot or grant relevant securities in pursuance of such an offer or agreement as if such authority had not expired. # Resolution 14 – Disapplication of pre-emption rights – Second authority for the renewal of the authority to allot up to 10% of the ordinary shares of the Company for cash without first offering them to existing shareholders. That, subject to the passing of resolution 13 above, and in substitution for any existing power but without prejudice to the exercise of any such power prior to the date hereof, the Directors of the Company be and they are hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the 'Act') to allot equity securities (within the meaning of section 560(1) of the Act) for cash either pursuant to the authority given by resolution 13 above or by way of the sale of treasury shares wholly for cash as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power: - (a) expires at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement as if the power conferred hereby had not expired; and - (b) shall be limited to the allotment of equity securities or the sale of treasury shares up to an aggregate nominal value of £1,071,891 (42,875,668 Ordinary shares) (representing 10% of the Company's total issued share capital as at 10 March 2023). By order of the Board Kelly Nice, Company Secretary 199 Bishopsgate, London, EC2M 3TY 10 March 2023 78 Investor Information Notes to the Notice of Meeting Wellington Street, Leeds, LS1 4DL; ii) electronically via proximity or through the website The following notes explain your general rights as a of the Company’s registrar at www.signalshares. shareholder and your right to attend and vote at this com; Annual General Meeting (the ‘Meeting’) or to appoint iii) via LinkVote+ (see note 8); or someone else to vote on your behalf. iv) in the case of shares held through CREST, via the 1. To be entitled to attend and vote at the Meeting (and CREST system (see notes below) for the purpose of the determination by the Company 7. If you return more than one proxy appointment, of the number of votes they may cast), shareholders either by paper or electronic communication, the must be registered in the Register of Members of appointment received last by the Registrar before the Company at close of trading on 24 April 2023. the latest time for the receipt of proxies will take Changes to the Register of Members after the relevant precedence. You are advised to read the terms and deadline shall be disregarded in determining the conditions of use carefully. Electronic communication rights of any person to attend and vote at the Meeting. facilities are open to all shareholders and those who 2. Shareholders, or their proxies, intending to attend the use them will not be disadvantaged. Meeting in person are requested, if possible, to arrive 8. Link Group, the company’s registrar, has launched a at the Meeting venue at least 20 minutes prior to the shareholder app: LinkVote+. It’s free to download and commencement of the Meeting at 2.30pm (UK time) use and gives shareholders the ability to access their on 26 April 2023 so that their shareholding may be shareholding record at any time and allows users to checked against the Company’s Register of Members submit a proxy appointment quickly and easily online and attendances recorded. rather than through the post. The app is available to 3. Shareholders are entitled to appoint another person download on both the Apple App Store and Google as a proxy to exercise all or part of their rights to Play. QR codes to facilitate this are shown below. attend and to speak and vote on their behalf at the Your vote must be lodged by 2.30pm on 24 April 2023 Meeting. A shareholder may appoint more than one in order to be considered valid or, if the meeting is proxy in relation to the Meeting provided that each adjourned, by the time which is 48 hours before the proxy is appointed to exercise the rights attached to time of the adjourned meeting. a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder Apple App Store GooglePlay of the Company. A form of proxy which may be used to make such appointment and give proxy instructions accompanies this Notice. If you do not have a form of proxy and believe that you should have one, or if you require additional forms, please contact the Company’s registrar whose details are provided in Note 6 below and on page 82. 4. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in 9. The return of a completed form of proxy, electronic which the names of the joint holders appear in the proxy appointment or any CREST Proxy Instruction will Company’s Register of Members in respect of the joint not prevent a shareholder from attending the Meeting holding (the first named being the most senior). and voting in person if he/she wishes to do so. 5. A vote withheld is not a vote in law, which means that 10. CREST members who wish to appoint a proxy the vote will not be counted in the calculation of votes or proxies through the CREST electronic proxy for or against the resolution. If no voting indication is appointment service may do so for the Meeting given, your proxy will vote or abstain from voting at his (and any adjournment of the Meeting) by using the or her discretion. Your proxy will vote (or abstain from procedures described in the CREST Manual (available voting) as he or she thinks fit in relation to any other from www.euroclear.com). CREST Personal Members matter which is put before the Meeting. or other CREST sponsored members, and those CREST members who have appointed a voting service 6. To be valid, any form of proxy or other instrument provider(s), should refer to their CREST sponsor or appointing a proxy, must be returned by no later voting service provider(s), who will be able to take the than 2.30pm on 24 April 2023 through any one of the appropriate action on their behalf. following methods: i) by post, courier or by hand (during normal 11. In order for a proxy appointment or instruction made business hours only) to the Company’s registrar at by means of CREST to be valid, the appropriate PXS 1, Link Group, 10th Floor, Central Square, 29 CREST message (a ‘CREST Proxy Instruction’) must be 79 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 properly authenticated in accordance with Euroclear UK & International Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID RA10) by 2.30pm on 24 April 2023. For this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 12. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his/her/their CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 13. If you are an institutional investor you may be able to appoint a proxy electronically via the Proximity platform. For further information regarding Proximity, please go to www.proximity.io. Your proxy must be lodged by 2.30pm on 24 April 2023 in order to be considered valid or, if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned Meeting. Before you can appoint a proxy via this process you will need to have agreed to Proximity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the Proximity platform may be revoked completely by sending an authenticated message via the platform instructing the removal of your proxy vote. 14. Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a shareholder provided that no more than one corporate representative exercises powers in relation to the same shares. 15. As at 10 March 2023, (being the latest practicable business day prior to the publication of this Notice), the Company's ordinary issued share capital excluding treasury shares consists of 400,742,223 ordinary shares, carrying one vote each. As at 10 March 2023 the Company held 28,014,457 Ordinary shares in Treasury (representing 6.5% of the total issued Ordinary share capital of the Company (excluding Treasury shares). Therefore, the total voting rights in the Company as at 10 March 2023 are 400,742,223. 16. Under section 527 of the Companies Act 2006 (the 'Act'), shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's financial statements (including the Auditor's Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual financial statements and reports were laid in accordance with section 437 of the Act (in each case) that the shareholders propose to raise at the relevant meeting. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Act. Where the Company is required to place a statement on a website under section 527 of the Act, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Meeting for the relevant financial year includes any statement that the Company has been required under section 527 of the Act to publish on a website. 17. Any shareholder attending the Meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the Meeting but no such answer need be given if: (a) to do so would interfere unduly with the preparation for the Meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered. 18. The following documents are available for inspection during normal business hours at the registered office of the Company on any business day from the date of this Notice until the time of the Meeting and may also be inspected at the Meeting venue, as specified in this Notice, from 2pm on the day of the Meeting until the conclusion of the Meeting: copies of the Directors' letters of appointment or service contracts. 19. You may not use any electronic address (within the meaning of Section 333(4) of the Act) provided in either this Notice or any related documents (including 80 Investor Information the form of proxy) to communicate with the Company Instructions for Electronic Attendance at the Annual for any purposes other than those expressly stated. General Meeting We are pleased to be able to provide a facility for 20. Any person holding 3 per cent, or more of the total shareholders to follow the AGM remotely and submit voting rights in the Company who appoints a person questions to the board on the business of the meeting. other than the Chairman as his or her proxy must ensure that both he or she and such third party comply How to join the virtual meeting with their respective disclosure obligation under the You will need to visit https://webcast.openbriefing.com/ Disclosure Guidance and Transparency Rules. att-23agm/, using your smartphone, tablet or computer. You will then be prompted to enter your unique 11 digit A copy of this Notice, and other information required by Investor Code (‘IVC’) including any leading zeros and Section 311A of the Companies Act 2006, can be found on ‘PIN’. Your PIN is the last 4 digits of your IVC. This will the Company’s website at www.allianztechnologytrust.com authenticate you as a shareholder. Your IVC can be found on your share certificate, or Signal Shares users (www.signalshares.com) will find this under ‘Manage your account’ when logged in to the Signal Shares portal. You can also obtain this by contacting Link Group, our Registrar, by calling +44 (0) 371 277 1020* Access to the AGM will be available from 30 minutes before the start of the event, although you will not be able to submit questions until you are logged in. If you wish to appoint someone to attend the virtual meeting on your behalf, please contact Link Group on +44 (0) 371 277 1020* in order to obtain their IVC and PIN. It is suggested that you do this as soon as possible and at least 48 hours (excluding non-business days) before the meeting. If your shares are held within a nominee and you wish to attend the electronic meeting, you will need to contact your nominee as soon as possible. Your nominee will need to present a corporate letter of representation to Link Group, our registrar, as soon as possible and at least 72 hours (excluding non-business days) before the meeting, in order that they can obtain for you your unique IVC and PIN to enable you to attend the electronic meeting. *Lines are open from 9.00 a.m. to 5.30 p.m. Monday to Friday, calls are charged at the standard geographic rate and will vary by provider. Calls outside the UK will be charged at the applicable international rate. 81 Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2022 82 Allianz Technology Trust PLC 199 Bishopsgate London EC2M 3TY +44 (0)203 246 7000 www.allianztechnologytrust.com