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Dividends
It is your Board’s policy to maintain a regular dividend flow where possible to take advantage of the tax-free distributions a VCT can provide, and work towards the targeted 5% annual dividend yield policy.

I am pleased to confirm that the Board declared a second interim dividend of 1.3p per share in respect of the year ended 31 January 2024. This is in addition to the 1.4p per share interim dividend paid during the year and brought the total dividends declared to 2.7p per share for the year, a tax-free yield of 5.1%. The dividend was paid on 2 May 2024 to shareholders on the register at 12 April 2024. Since inception, we have now paid 88.7p in tax-free dividends per share, including the recently paid dividend.

Apollo’s dividend reinvestment scheme (DRIS) was introduced in November 2014 and to date 20% of shareholders take advantage of it as it is an attractive scheme for investors who would prefer to benefit from additional income tax relief on their reinvested dividend. I hope that shareholders will find this scheme beneficial. During the year to 31 January 2024, 8,713,356 shares were issued under the DRIS, equating to a reinvested amount of £4.5 million.

Fundraise and share buybacks
On 16 November 2023, the Company launched a new offer to raise up to £35 million, with an over-allotment facility of up to £15 million. We were pleased to raise £50 million utilising the over-allotment facility so the offer closed fully subscribed on 19 March 2024. We would like to take this opportunity to welcome all new shareholders and thank all existing shareholders for their continued support. The success of the fundraise and good performance led the Board to announce, on 19 April 2024, its intention to increase the offer from £50 million to £85 million, with applications re-opening on 29 April 2024.

Apollo has continued to buy back and cancel shares as required. Subject to shareholder approval of resolution 11 at the forthcoming Annual General Meeting (AGM), this facility will remain in place to provide liquidity to investors who may wish to sell their shares, subject to Board discretion. Details of the share buybacks undertaken during the year can be found in the Directors’ Report.

Dividends, whether paid in cash or reinvested under the DRIS, and share buybacks are always at the discretion of the Board, are never guaranteed and may be reviewed when necessary.

VCT sunset clause
We were pleased in the November Autumn Statement that the Chancellor extended the VCT sunset clause, meaning VCT relief will be available to subscribers for shares issued before April 2035, rather than April 2025.

Board of Directors
Having completed a structured recruitment process, led and managed by an independent, third-party specialist, I am pleased to announce the appointment of Gillian Elcock as an independent Non-Executive Director of the Company, who joined the Board on 1 December 2023. Gillian was the founder of Denny Ellison, an independent investment research and training company, and was its Managing Director for ten years. She is a Non-Executive Director of Melrose Industries plc, International Biotechnology Trust plc and STS Global Income & Growth Trust plc. She is also a member of the board of the CFA Society of the UK. We look forward to benefiting from her wealth of experience.

AGM
The AGM will be held on 10 July 2024 at 10am. Full details of the business to be conducted at the AGM are given in the Notice of the Meeting. Shareholders may recall that in prior years, we have hosted an online shareholder event. However, having conducted a review of attendance, this year we will have an Investment Manager’s update at the AGM, supported by a filmed update from the Investment Manager which will be available on the website at https://octopusinvestments.com/apollovct/.

Shareholders’ views are important, and the Board encourages shareholders to vote on the resolutions by using the proxy form, or electronically at www.investorcentre.co.uk/eproxy. The Board has carefully considered the business to be approved at the AGM and recommends shareholders to vote in favour of all the resolutions being proposed.

Outlook
2023 has been another challenging year for the UK and global economies, so I am satisfied to be able to announce a stable total return (NAV plus dividends paid) for the Company. The geo-political turbulence and macro-economic headwinds have impacted the underlying portfolio companies. We have seen growth rates slow down resulting in lower valuations as companies work through the tougher trading environment, including elongated sales cycles. Some have proactively slowed their growth to reduce their cash burn and focus on efficiency and profitability (where possible) due to the scarcity and higher cost of capital. There have also been some company specific performance issues, with several having been more affected than others by the unpredictable market conditions. However, the recurring revenue models of most of the companies in the portfolio have offered some protection against the current market volatility.

We are starting to see some green shoots of recovery with more activity on the listed markets, interest rates starting to stabilise and inflation beginning to moderate. However, we anticipate a slow and unpredictable route to recovery. The UK general election creates some uncertainty, global economies are projected to experience growth below their typical rates and there is no certainty on geopolitical stability.

The Octopus Ventures team continues to actively monitor the portfolio companies to be able to understand the full impact of any challenges that may arise. Members of the team typically take a seat on the Board of the companies so that they can provide their expertise and introduce relevant contacts from their network. The Octopus People and Talent team draws upon years of experience to offer tailored advice and support to the portfolios’ management teams and equip them with the tools they need to succeed and grow as a business.

VCTs have long provided a compelling opportunity for UK investors to invest in businesses in a tax-efficient way, and we look forward to Apollo continuing to do so in the coming year. I would like to conclude by thanking both the Board and the Octopus team on behalf of all shareholders for their hard work.

Murray Steele
Chair

INVESTMENT MANAGER’S REVIEW

At Octopus our focus is on managing your investments and providing open communication. Our annual and half year updates are designed to keep you informed about the progress of your investment.

Investment Strategy
Most companies in the portfolio operate in sectors where there is a strong opportunity for growth. In general, we invest in technology companies in the software-as-a-service (SaaS) space that have recurring revenues from a diverse base of customers. We also seek to invest in companies that will provide an opportunity for Apollo to realise its investment typically within three to seven years.

Apollo total value growth
The total value has seen a significant increase over the five years from 118.2p to 137.9p at 31 January 2024. This increase in total value of 19.7p represents a 41.8% increase on the NAV of 47.1p as at 31 January 2019. A total of over £77 million has also been distributed back to shareholders in the form of tax-free dividends. This includes dividends reinvested as part of the DRIS.

Focus on performance
Apollo made a flat total return per share in the year to 31 January 2024, which I am satisfied with given the challenging economic environment. The NAV per share decreased from 53.2p to 50.5p, solely because 2.7p per share of dividends were paid in the period, representing a dividend yield of 5.1% and bringing cumulative dividends paid as at 31 January 2024 to 87.4p and the total return (NAV plus cumulative dividends) to 137.9p per share.

The performance over the five years to 31 January 2024 is shown below:

Over the year, there have been valuation increases across 22 portfolio companies, delivering a collective increase of £37.3 million. These increases reflect businesses which have successfully grown their customer base and revenues through the period. The majority of strong performers are the B2B technology companies that Apollo has invested in over recent years, with notable strong performers including Lodgify, Hasgrove and Dyscova.

Conversely, 18 companies saw a decrease in valuation, collectively totalling £30.5 million. The businesses that saw the most significant reductions were Ryte, Ubisecure, Sova and Delio. Growth has decelerated in all these companies due to lengthening enterprise software sales cycles, as well as there being some company-specific performance issues.

Although this resulted in a net increase in portfolio company valuations of £6.8 million, the overall return for Apollo was flat due to the net impact of share allotments, share buybacks, income received and expenditure.

As part of liquidity management, Apollo regularly invests in and withdraws from MMFs in order to meet cash requirements. During the year, on a net basis, an additional £5.6 million was invested in MMFs. Apollo also invested an additional £4.5 million into the Sequoia Economic Infrastructure Fund (SEQI) during the year. These investments, in combination with the previously held investments in SEQI and the MMFs, took the total liquid investments at 31 January 2024 to £56.4 million (including interest earned during the year on MMF deposits).

Disposals
Two profitable disposals completed in the year. Firstly, The Safeguarding Company (TSC) being acquired by Tes Global, a provider of online educational services and software. Apollo first invested in TSC in August 2019 and during the investment period, TSC almost doubled its headcount and expanded its product functionality and international presence. The exit offered Apollo a 2.5x total return on its equity investment. Then in November, Apollo sold its shares in the listed company Ergomed plc, realising £5.1 million in proceeds which represented a very strong 8.7x total return for Apollo. Both of these saw Apollo exit its full shareholding in the companies.

Apollo also received deferred proceeds from the sale of Luther Pendragon (which originally completed in 2022) and Countrywide Healthcare repaid the loan that Apollo invested in 2014. In the year, all disposals and loan repayments have in aggregate returned £18.3 million to Apollo.

New and follow-on investments
Apollo completed follow-on investments in seven companies and made four new investments. Together, these totalled £33 million (made up of £17.8 million invested in the existing portfolio and £15.2 million in new companies). This compares with nine new investments and eight follow-on investments in the year to 31 January 2023, together totalling £69.4 million. This slowing of investment rate is a result of a reduced volume of businesses seeking funding, as they looked to reduce reliance on further funding or take steps to make their existing capital go further in the more challenging macro-economic environment.

Apollo’s new investments were in:

• Zipline Cloud Pty Ltd (t/a Pendula) £3.9 million – A two-way customer communication software platform that helps organisations automate high impact customer engagement to improve customer retention, satisfaction and drive additional revenue.

• Vaultspeed £6.5 million – A data transformation automation software tool for organisations undertaking complex IT projects.

• Magic Orange £2.2 million – A provider of IT Financial Management software that allows customers to better understand and visualise their IT spend through reporting dashboards.

• Harbiz £2.6 million – A customer engagement focused solution for wellness professionals and small businesses, offering both booking and scheduling services, as well as customer interaction to boost customer experience.

Q&A
How do you value a portfolio company?
Apollo’s unquoted portfolio companies are valued in accordance with UK Generally Accepted Accounting
Practice (GAAP) accounting standards and the International Private Equity and Venture Capital (IPEV) valuation guidelines. This means we value the portfolio at Fair Value, with all companies being valued at least twice yearly, for our interim (July) and annual (January) accounts.

What do you mean by ‘Fair Value’?
When we say Fair Value, we mean the price we expect people would be willing to buy or sell an asset for, assuming they had all the information available we do, are knowledgeable parties with no pre-existing relationship, and that the transaction is carried out under the normal course of business.

What is the valuation process and what oversight is there?
The Octopus Investment Managers involved with the portfolio companies, usually in the capacity of a Director or Observer on the Board, will draft a trading update and then the Lead Fund Manager will meet with our dedicated valuations team to offer a verbal update on each company.

The valuations team, utilising these portfolio updates, the portfolio companies’ financial reports, progress towards their KPIs and analysing the wider market in which they operate, will draft the initial valuation proposals. These are then reviewed, challenged, and ultimately approved by our Valuations Lead and Lead Fund Manager. These proposed valuations will then be sent to the Octopus Valuations Committee and Apollo Board who will meet to discuss them in detail, revise as necessary and ultimately sign them off.

There are also more high level valuation checkpoints throughout the year in advance of share allotments, DRIS allotments, share buybacks and other share-related transactions, which means that the portfolio’s valuation is reviewed to ensure NAV is fairly represented prior to these corporate actions.

BDO LLP are the external auditors of Apollo and perform a statutory audit of the annual accounts, which includes valuations. As part of our continuous improvement processes, we periodically review the actual realised value of our investments compared to their last holding value and refine our valuation methodologies accordingly. This firmly underpins the robustness of the Apollo valuation process.

Valuations
Methodologies include:

• ‘Price of Recent Investment’ (PRI) is utilised when there has been a recent transaction which is generally assessed to be the best indicator of Fair Value as of the transaction date;
• ‘Market approach’ involves the application of an appropriate multiple to a performance measure (typically a revenue metric, but potentially also profit) to derive the value of the business. The multiple is derived by referring to comparable listed companies or comparable transactions; and
• ‘Scenario analysis’ is utilised where there is uncertainty around the potential outcomes available to a company, so a probability-weighted scenario analysis is considered.

Case studies
Lodgify
lodgify.com
Vacation rental software to help grow bookings

• £9.5 million invested to support product development.

• £30 million raised in Series B fundraise

• 100+ countries where Lodgify hosts have properties
  
  

Lodgify empowers vacation rental hosts with the tools to start and grow their businesses independently. Its software-as-a-service platform enables hosts to easily create a website, accept direct bookings and commission-free payments, and is integrated with today’s popular booking channels like Airbnb, Vrbo, and Booking.com. It centralises all guest reservations and communications into a single, user-friendly interface so hosts can prioritise increasing occupancy and providing excellent service to their guests.

In 2023, Lodgify launched its AI Assistant, a messaging tool designed to enhance guest communications by generating personalised responses with a click of a button. The company also recently announced its collaboration with Google, automatically enabling Lodgify-powered websites to appear on top of organic Google searches to further boost their visibility with high-intent travellers.

ValueBlue
www.valueblue.com
Accelerating business transformation with enterprise architecture

• £10 million invested to scale the team and grow internationally.

• 220 customers experience more efficient and effective transformation initiatives thanks to BlueDolphin

• 60% timesaving on project architecture design

• 45% reduction in operational IT spend achieved by businesses using BlueDolphin

ValueBlue is the company behind BlueDolphin, an Enterprise Architecture (EA) SaaS platform that helps organisations to plan, design and manage business transformation. It allows more effective collaboration across the entire business and drives successful outcomes for IT transformation projects.

ValueBlue helps organisations gain insight into their complex IT landscape, spotting weaknesses, risks, and opportunities for improvement. Based on these insights, ValueBlue is used to plan and execute transformation projects, speeding up innovation and lowering project costs. The company was recently named a Challenger in the 2023 Gartner Magic Gartner® Magic Quadrant™ for EA tools.

Top ten investments by value as at 31 January 2024
We are pleased to report a net increase in the value of the portfolio of £6.8 million since 31 January 2023. This represents an increase of 2.2% on the value of the portfolio at the start of the year, leaving total return flat after the impact of income, expenses and other activities throughout the year. Here, we set out the cost and valuation of the top ten holdings, which account for over 54% of the value of the portfolio.

Top ten
1
N2JB Limited (trading as Natterbox)

Natterbox is a London-based provider of business-to-business cloud telephone services that are uniquely integrated into Customer Resource Management (CRM) software platforms, most notably Salesforce.

www.natterbox.com

2
Sova Assessment Limited

Sova Assessment is a UK based end-to-end digital candidate assessment SaaS platform targeting large blue-chip organisations conducting large volumes of hiring.

www.sovaassessment.com

3
Codebay Solutions Limited (trading as Lodgify)

Lodgify provides a SaaS platform for vacation rental hosts and property managers to manage their business and process their bookings.

www.lodgify.com

4
Hasgrove Limited

Hasgrove is the holding company for Interact, a SaaS business which provides an intranet product which focuses on the communication and collaboration requirements of large organisations.

www.interactsoftware.com

5
Fable Data Limited

Fable Data provides anonymised, pan-European consumer transaction data and analysis to institutional investors, businesses, governments and academics.

www.fabledata.com

6
Mention Me Limited

Mention Me is a referral engineering SaaS platform that helps business to consumer (B2C) businesses acquire new customers more successfully through their referral channel.

www.mention-me.com

7
Triumph Holdings Limited

Triumph has developed a risk based quality management and monitoring platform for the life sciences industry.

www.tritrials.com

8
Value Blue B.V.

Value Blue is a Netherlands based provider of enterprise architecture management software, that is growing in the UK. The product allows companies to map their existing technology architecture in a single location to easily plan, collaborate and execute both large scale transformational and everyday IT projects.

www.valueblue.com

9
Fuse Universal Limited

Fuse is a business-to-business software provider of a cloud-based learning technology platform for corporates, founded in 2008 and based in London (with further offices in South Africa and Australia).

www.fuseuniversal.com

10
Turtl Surf & Immerse Limited

Turtl is an enterprise SaaS product which enables corporates to produce high quality, brand consistent and personalised marketing collateral at scale.

https://turtl.co/

1. These numbers are not available per the latest public filings on Companies House or the company is Non-U.K.
   
   

Outlook

There has been a slowing of growth across the portfolio, as companies look to preserve cash and seek greater capital efficiency to extend cash runways. We are reassured that the portfolio is well funded with around 30% of the portfolio based on NAV not requiring further funding, as they are profitable, and this increases to 80% with more than twelve months’ cash runway. As well as a suppressed funding market, we have also seen similar in the exit environment, with a substantial reduction in the number and value of merger and acquisition (M&A) transactions over 2023*. Despite this, we were pleased to successfully realise our holdings in the Safeguarding Company and Ergomed in the period and we hope to see a continued series of profitable realisations over the next year.

We have also seen a decline in Apollo’s investment rate when compared to the prior year, as fewer businesses have looked to raise money due to limited capital availability and the higher cost of capital. However, we are starting to see signs of recovery, with a strong pipeline of exciting opportunities converting into one new deal and six follow-on investments completing since the year end.

Alongside this, we were delighted with the support we’ve received from Apollo’s new and existing investors, with the latest fundraise closing fully subscribed, including the over-allotment facility. These funds will allow Apollo to continue to support the existing portfolio in their growth plans and invest in new opportunities, which have great potential to become successful and deliver good returns to shareholders.

The ongoing need for exciting, high-growth companies to raise funding for growth provides ample opportunity to make successful future investments in line with the existing now-proven strategy. We remain optimistic and confident about Apollo’s future investment prospects and its current diverse portfolio. We think this breadth of scope will provide Apollo with the opportunities it needs for continued success.

*Source: Atomico, State of European Tech – December 2023 – p.226.

RISKS AND RISK MANAGEMENT

The Board assesses the risks faced by Apollo and, as a board, reviews the mitigating controls and actions, and monitors the effectiveness of these controls and actions.

Emerging and principal risks, and risk management

The Board is mindful of the ongoing risks and will continue to make sure that appropriate safeguards are in place, in addition to monitoring the cash flow forecasts to make sure that the Company has sufficient liquidity.

The Board carries out a regular review of the risk environment in which the Company operates.

Emerging risks

The Board has considered emerging risks. The Board seeks to mitigate emerging risks and those noted below by setting policy, regular review of performance and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies the principles detailed in the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting.

The following are some of the potential emerging risks management and the Board are currently monitoring:

• adverse changes in global macroeconomic environment;

• rising cost of living;

• geopolitical tensions; and

• climate change.

Principal risks

VIABILITY STATEMENT

In accordance with provision 36 of the AIC Code of Corporate Governance, the Directors have assessed the prospects of the Company over a period of five years, consistent with the expected investment holding period of a VCT investor. Under VCT rules, subscribing investors are required to hold their investment for a five-year period in order to benefit from the associated tax reliefs. The Board regularly considers strategy, including investor demand for the Company’s shares, and a five-year period is considered to be a reasonable time horizon for this.

The Board carried out a robust assessment of the emerging and principal risks facing the Company and its current position.

This includes risks which may adversely impact its business model, future performance, solvency or liquidity, and focused on the major factors which affect the economic, regulatory and political environment. Particular consideration was given to the Company’s reliance on, and close working relationship with, the Investment Manager. The principal risks faced by the Company and the procedures in place to monitor and mitigate them are set out above.

The Board has carried out robust stress testing of cash flows which included; assessing the resilience of portfolio companies, including the requirement for any future financial support; and the ability to pay dividends and buybacks.

The Board has additionally considered the ability of the Company to comply with the ongoing conditions to make sure it maintains its VCT qualifying status under its current investment policy.

Based on the above assessment the Board confirms that it has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five-year period to 31 January 2029. The Board is mindful of the ongoing risks and will continue to make sure that appropriate safeguards are in place, in addition to monitoring the cash flow forecasts to make sure that the Company has sufficient liquidity.

DIRECTORS’ RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Directors’ Remuneration Report and the Financial Statements in accordance with applicable law and regulations. They are also responsible for ensuring that the Annual Report and Accounts include information required by the Listing Rules of the Financial Conduct Authority.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws) including FRS 102 – “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

• prepare a Strategic Report, a Directors’ Report and Directors’ Remuneration Report which comply with the requirements of the Companies Act 2006.
  
  

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to make sure that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Insofar as each of the Directors is aware:

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

• the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The Directors are responsible for preparing the annual report in accordance with applicable law and regulations. Having taken advice from the Audit and Risk Committee, the Directors consider the annual report and the financial statements, taken as a whole, provide the information necessary to assess the Company’s position, performance, business model and strategy and is fair, balanced and understandable.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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

• the financial statements, prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

• the Annual Report and Accounts (including the Strategic Report), give a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

Murray Steele
Chair

INCOME STATEMENT

• The ‘Total’ column of this statement is the profit and loss account of Apollo; the revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies.

• All revenue and capital items in the above statement derive from continuing operations.

• Apollo has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.
  
  

Apollo has no other comprehensive income for the period.

The accompanying notes are an integral part of the financial statements.

BALANCE SHEET

The statements were approved by the Directors and authorised for issue on 28 May 2024 and are signed on their behalf by:

Murray Steele
Chair
Company number: 05840377

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CHANGES IN EQUITY

* Included in these reserves is an amount of £246,530,000 (2023: £151,204,000) which is considered distributable to shareholders per the Companies Act.

The accompanying notes are an integral part of the financial statements.

*Included in these reserves is an amount of £151,204,000 (2022: £52,474,000) which is considered distributable to shareholders per the Companies Act.

The accompanying notes are an integral part of the financial statements.

CASH FLOW STATEMENT

* During the year ended 31 January 2023 Octopus Portfolio Manager (OPM) began the process of being closed down. The only investment remaining is in a BlackRock MMF. The classification of this asset was therefore transferred from an OEIC to a MMF within the accounts and is therefore classified as a cash equivalent.

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1. Significant accounting policies

Apollo is a Public Limited Company (plc) incorporated in England and Wales and its registered office is 33 Holborn, London, EC1N 2HT.

Apollo’s principal activity is to invest in a diverse portfolio of predominantly unquoted companies with the aim of providing shareholders with attractive tax-free dividends and long-term capital growth.

Basis of preparation
The financial statements have been prepared under the historical cost convention, except for the measurement at fair value of certain financial instruments, and in accordance with UK Generally Accepted Accounting Practice (GAAP), including Financial Reporting Standard 102 – ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (FRS 102), and with the Companies Act 2006 and the Statement of Recommended Practice (SORP) ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts (issued 2014 and updated in April 2021 with consequential amendments)’.

The significant accounting policies have remained unchanged since those set out in Apollo’s 2023 Annual Report and Accounts.

2. Investment income
Accounting policy

Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis (including time amortisation of any premium or discount to redemption), so as to reflect the effective interest rate, provided it is considered probable that payment will be received in due course. Income from fixed-interest securities and deposit interest is accounted for on an effective interest rate method. Investment income includes interest earned on MMFs. Dividend income is shown net of any related tax credit.

Dividends receivable are brought into account when Apollo’s right to receive payment is established and it is probable that payment will be received. Fixed returns on debt are recognised provided it is probable that payment will be received in due course. The nature of dividends received is assessed to establish whether they are revenue or income dividends.

Disclosure

3. Investment management fees

For the purpose of the revenue and capital columns in the Income Statement, the management fee has been allocated 25% to revenue and 75% to capital, in line with the Board’s expected long-term split of returns in the form of income and capital gains respectively from Apollo’s investment portfolio. The investment performance fee, explained below, is allocated 100% to capital as it is deemed that capital appreciation on investments has primarily driven the total return of Apollo above the required hurdle rate at which the performance fee is payable. The management fee, administration and accountancy fees are calculated based on the NAV which is then multiplied by the number of shares in issue, calculated on a daily basis.

Octopus provide investment management, accounting and administration services and company secretarial services to Apollo under a management agreement which may be terminated at any time thereafter by not less than twelve months’ notice given by either party. No compensation is payable in the event of terminating the agreement by either party, if the required notice period is given. The fee payable, should insufficient notice be given, will be equal to the fee that would have been paid should continuous service be provided. The basis upon which the management fee is calculated is disclosed within the Annual report and financial statements.

Apollo has established a performance incentive scheme whereby the Investment Manager is entitled to an annual performance related incentive fee in the event that certain performance criteria are met. Further details of this scheme are disclosed within the Annual report and financial statements. As at 31 January 2024 £14,000 was due to the Investment Manager by way of annual performance fee (2023: £9,201,000).

4. Other expenses
Accounting policy

All expenses are accounted for on an accruals basis. Expenses are charged wholly to revenue, apart from management fees charged 75% to capital and 25% to revenue, performance fees charged wholly to capital and transaction costs. Transaction costs incurred when purchasing or selling assets are written off to the Income Statement in the period that they occur.

Disclosure

The ongoing charges ratio of Apollo for the year to 31 January 2024 was 2.4% (2023: 2.5%). Total annual running costs are capped at 2.75% of average net assets (2023 cap: 3.3% of average net assets). This figure excludes any extraordinary items, adviser charges, impairment of interest and performance fees.

No non-audit services were provided by Apollo’s auditor.

5. Tax
Accounting policy

Current tax is recognised for the amount of income tax payable in respect of the taxable profit/(loss) for the current or past reporting periods using the current UK corporation tax rate. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the “marginal” basis as recommended in the SORP.

Deferred tax is recognised in respect of all timing differences at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.

Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Disclosure

Approved VCTs are exempt from tax on chargeable gains. Since the Directors intend that Apollo will continue to conduct its affairs so as to maintain its approval as a VCT, no deferred tax has been provided in respect of any capital gains or losses arising on the revaluation or disposal of investments. On 1 April 2023, the main rate of Corporation Tax was increased to 25%. Unrelieved tax losses of £50,101,000 (2023: £42,887,000) are estimated to be carried forward at 31 January 2024 (subject to completion of Apollo’s tax return) and are available for offset against future taxable income, subject to agreement with HMRC. Apollo has not recognised the deferred tax asset of £12,525,000 (2023: £10,722,000) in respect of these tax losses because there is insufficient forecast taxable income in excess of deductible expenses to utilise these losses carried forward. There is no expiry period on these deductible expenses under the UK HMRC legislation.

6. Dividends
Accounting policy

Dividends payable are recognised as distributions in the financial statements when Apollo’s liability to make payment has been established. This liability is established on the record date, the date on which those shareholders on the share register are entitled to the dividend. Interim dividends to equity shareholders are declared by the Directors.

Disclosure

7. Earnings per share

The (loss)/earnings per share is based on 709,769,066 Ordinary shares (2023: 572,765,083), being the weighted average of shares in issue during the year.

There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted earnings per share are identical.

8. Net asset value per share

There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted NAV per share are identical.

9. Transactions with the Investment Manager

Apollo has employed Octopus throughout the year as the Investment Manager. Apollo has incurred £7,449,000 (2023: £5,748,000) in management fees due to the Investment Manager in the year. At 31 January 2024 there was £1,989,000 outstanding (2023: £1,599,000). The management fee is payable quarterly in arrears and is based on 2% of the NAV calculated daily from 31 January.

The Investment Manager is entitled to an annual performance-related incentive fee, subject to the total return (NAV plus cumulative dividends paid) per share being at least 100p at the end of the relevant period. This performance fee is equal to 20% of the amount by which the NAV plus cumulative dividends paid per share exceeds the higher of:

• The highest total return in previous accounting periods. This is currently the return in the year to 31 January 2023 (137.9p).

• The total return as at 1 February 2012, plus the average Bank of England interest rate to date, commencing 1 February 2012.

The Board considers that the liability becomes due at the point that the performance criteria are met, which has happened at the end of this financial year. In the year, Apollo incurred performance fees of £14,000 (2023: £9,201,000). At 31 January 2024 there were £14,000 of outstanding performance fees to be paid (2023: £9,201,000).

The Investment Manager also provides accounting and administrative services to Apollo, payable quarterly in arrears, for a fee of 0.3% of the NAV calculated daily. During the year £1,117,000 (2023: £862,000) was paid to the Investment Manager, of which £298,000 (2023: £240,000) was outstanding at the Balance Sheet date, for the accounting and administrative services. In addition, the Investment Manager also provides company secretarial services for a fee of £20,000 per annum (2023: £20,000).

10. Related party transactions

Several members of the Octopus investment team hold non-executive directorships as part of their monitoring roles in Apollo’s portfolio companies, but they have no controlling interests in those companies. The Investment Manager receives transaction fees and directors’ fees from these portfolio companies. During the year ended 31 January 2024, directors’ fees of £821,000 attributable to the investments of Apollo were received by the Investment Manager (2023: £686,000).

As at 31 January 2024, Octopus Investments Nominees Limited (OINL) held 315 shares (2023: 173,900) in Apollo as beneficial owner, having purchased these from shareholders to protect their interests after delays or errors with shareholder instructions and other similar administrative issues. Throughout the period to 31 January 2024 OINL purchased 315 shares (2023: 384,179) at a cost of £163 (2023: £183,363) and sold 173,900 shares (2023: 219,539) for proceeds of £87,993 (2023: £103,040). This is classed as a related party transaction as per the Listing Rules, as Octopus, the Investment Manager, and OINL are part of the same group of companies. Any such future transactions, where OINL takes over the legal and beneficial ownership of Company shares will be announced to the market and disclosed in annual and half-yearly reports.

11. 2024 financial information

The figures and financial information for the year ended 31 January 2024 are extracted from the Company’s annual financial statements for the period and do not constitute statutory accounts. The Company’s annual financial statements for the year to 31 January 2024 have been audited but have not yet been delivered to the Registrar of Companies. The Auditors’ report on the 2024 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.

12. 2023 financial information

The figures and financial information for the period ended 31 January 2023 are compiled from an extract of the published financial statements for the period and do not constitute statutory accounts. Those financial statements have been delivered to the Registrar of Companies and included the Auditors’ report which was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.

13. Annual Report and financial statements
The Annual Report and financial statements will be posted to shareholders in June and will be available on the Company’s website. The Notice of Annual General Meeting is contained within the Annual Report.

14. General information
Registered in England & Wales. Company No. 05840377
LEI: 213800Y3XEIQ18DP3O53

15. Directors
Murray Steele (Chair), Christopher Powles, Alex Hambro, Claire Finn and Gillian Elcock.

16. Secretary and registered office
Octopus Company Secretarial Services Limited
6^th Floor, 33 Holborn, London EC1N 2HT