Annual Financial Report

Artemis Alpha Trust plc (the 'Company')

LEI: 549300MQXY2QXEIL3756

Annual Report for the year ended 30 April 2023

Financial Highlights

	Year ended 30 April 2023	Year ended 30 April 2022
Total returns
Net asset value per ordinary share*	1.3%	(21.9)%
Ordinary share price*	(1.2)%	(24.8)%
FTSE All-Share Index	6.0%	8.7%
Revenue and dividends
Revenue earnings per ordinary share	6.74p	6.29p
Dividends per ordinary share	6.20p	5.60p
Ongoing charges*	1.08%	1.01%

		As at 30 April 2023		As at 30 April 2022
Capital
Net Assets (£'000)	119,817		124,101
Net asset value per ordinary share	366.02p		367.65p
Ordinary share price	319.00p		329.00p
Net gearing*	13.4%		9.4%

Total returns to 30 April 2023	3 years	5 years	10 years	Since 1 June 2003**
Net asset value per ordinary share*	23.5%	0.1%	41.8%	553.4%
Ordinary share price*	34.4%	7.2%	28.3%	500.5%
FTSE All-Share Index	45.2%	24.1%	80.7%	338.3%

** The date when Artemis was appointed as Investment Adviser

* Alternative Performance Measure

Source: Artemis/Datastream

Chairman's Statement

Performance

During the year ended 30 April 2023, your Company's net asset value per share rose by 1.3% and its share price fell 1.2% (on a total return basis). In comparison the benchmark FTSE All- Share Index rose by 6.0%. The second half of the year showed a stronger relative performance than the first half.

Although the FTSE All-Share Index is your Company's formal benchmark, a significant proportion of the companies in the portfolio are relatively small and form part of the FTSE 250 Index which declined by 3.3% over the year. As we have reminded shareholders in the past, the portfolio bears little relationship to the FTSE All-Share and the stock-selection is not constrained by it. As the last two years have shown, short-term performance is likely to bear very little resemblance to the benchmark; our aim remains to out-perform it over the long term.

During the year global markets were dominated by Russia's invasion of Ukraine and the resulting sharp increase in energy prices, inflation and interest rates. The uncertainty caused by Brexit was exacerbated by the mishandling of the economy by the Truss government, resulting in weakened sentiment towards the UK market and, in particular, the consumer-orientated stocks which feature strongly in our portfolio.

However, the Manager remains confident in the prospects for individual stocks and convinced of the under-valuation of many UK companies. Although the portfolio remains dominated by exposure to UK companies such as retailers, banks and housebuilders, the Manager has also initiated positions in some non-UK companies including out-of-favour digital companies such as Nintendo, Alphabet and Meta.

Revenue earnings and dividends

We are pleased to be able to deliver growth in dividends at a rate in excess of inflation, in line with our policy.

The Board has declared a final dividend of 3.87p (2022: 3.46p) per share, which will be subject to approval by shareholders at the Company's Annual General Meeting. The final dividend, if approved by shareholders, will be paid on 29 September 2023 to those shareholders on the register at 25 August 2023, with an ex-dividend date of 24 August 2023.

Total dividends declared for the year will therefore amount to 6.20p per share (2022: 5.60p), an increase of 10.7% on the previous year and ahead of the increase in the Consumer Prices Index (9.0% as at April 2022), in line with our target.

Investment income from our investee companies fell during the year by 1.5%. The subsidiary company continues to have healthy reserves with which to support the Company's earnings and dividends, if required.

Revenue earnings per share stand at 6.74p for the year to 30 April 2023, an increase of 7.2% on the 6.29p of the prior year.

Share buy backs/discount

The discount to underlying asset value averaged 10.1% over the course of the year, ranging from 4% to 14%, and at the year end stood at 12.8%. In general, discounts of investment trusts, including our own peer group, have widened over the last few months as a result of adverse market conditions.

During the year, the Company bought back a total of 1,019,766 ordinary shares at a total cost of £3.1 million and an average discount of 11.1%, adding approximately 1.19p to the net asset value per share. The policy of buying back shares when in the best interests of our shareholders will continue. We aim to do so in a pragmatic fashion, taking into account both market conditions and the discounts prevailing amongst our peer group; we believe this to be the most effective way of addressing any imbalance in the supply and demand for our shares.

Board Succession

As noted last year, Blathnaid Bergin, having joined the Board in July 2015, retired at the Annual General Meeting in October 2022. Blathnaid had served as Chair of the Audit Committee and Senior Independent Director throughout that time. I am pleased that Victoria Stewart has agreed to take on the role of Senior Independent Director.

The Board spent a significant amount of time with its external advisers in choosing the right candidate to replace Blathnaid Bergin as Chair of the Audit Committee. The Board recognises the importance of achieving a balance of skills and experience whilst paying close attention to the tenure of directors and the level of diversity. Details of these discussions and the process followed can be found within the Annual Report. This process resulted in Tom Smethers joining the Board in March of this year; he brings outstanding and relevant experience and I welcome him to the Board.

Annual General Meeting

Your Company's Annual General Meeting ("AGM") will take place on Thursday, 21 September 2023 at 10.00 a.m. at the London offices of Artemis Fund Managers, Cassini House, 57 St. James's Street, London, SW1A 1LD. The Directors look forward to welcoming shareholders.

The Investment Manager will make a presentation and answer any questions on the portfolio performance and strategy.

I would encourage you to make use of your proxy votes by completing and returning the form of proxy.

Outlook

Despite continued uncertainty and volatility in markets, our policy remains one of picking individual stocks in pursuit of returns over the long term. Our Investment Manager is confident in the prospects for these companies and the opportunities arising from the current market dislocation.

Contact us

Shareholders can keep up to date with Company performance by visiting artemisalphatrust.co.uk where you will find information on the Company, a monthly factsheet and detailed quarterly updates from the Investment Manager.

The Board is always keen to hear from shareholders. Should you wish to, I can be contacted by email on alpha.chairman@artemisfunds.com.

Duncan Budge

Chairman

11 July 2023

Investment Manager's Review

In the year ended April 2023, the Company's NAV increased by 1.3% compared to a 6.0% increase in the FTSE All-Share Index. In the last 6-month period since our interim report, performance improved with NAV rising by 17.0%, compared to a 12.5% increase in its benchmark.

Key factors which influenced equity markets and our portfolio in the period included:

Energy prices rose sharply in response to the impact of the Russia/Ukraine war on European gas supply, increasing the cost pressures affecting consumers and corporates, before falling more recently.
UK politics faced a crisis of confidence in September following the Liz Truss budget. This caused extreme volatility in UK government bond yields and forced an abrupt U-turn from the new government under Rishi Sunak.
Inflation remained higher than expected in the United Kingdom, Europe and the US, although economic activity proved more resilient to interest rate increases than first expected.
Interest rates rose sharply as a result, and a high degree of uncertainty remains over their future path.

This series of events has damaged consumer, corporate and investor confidence. Confusingly, despite this, employment trends have remained robust and corporate profitability has been better than expected.

Idiosyncratic events in the UK hurt sentiment that was already fragile since Brexit. Markets are now pricing an idiosyncratic inflation problem in the UK, leaving the UK with higher long-term bond yields than Greece or Italy.

We continue to anticipate attractive prospective returns from our portfolio owing to a combination of macroeconomic and bottom-up factors:

Inflation is likely to fall markedly to the benefit of consumers and businesses worldwide.
Discounted UK asset valuations should lead to higher future returns.
Durable equity franchises are attractively valued and provide a long-term hedge against inflation.
Capital cycles are leading to increased profitability in capital intensive and cyclical sectors.
The impact of share buybacks at a time of low valuations should be very positive.

The current portfolio is characterised by exposures to capital cycle beneficiaries, structural growth opportunities, and discounted UK assets.

Airlines (easyJet/Ryanair) and retailers (Frasers/Currys) stand to see higher returns from limited capacity / consolidation. Financials (Lloyds/Natwest, Plus500, Hargreaves Lansdown) should be beneficiaries of interest rates remaining higher than they have been in recent years whilst the UK housebuilders should benefit if interest rates ease from current levels. Out-of-favour digital winners (Nintendo, Delivery Hero, and Alphabet) continue to benefit from structural trends that should improve their business economics.

Another reason we are confident in the prospective returns of the portfolio is the result of the diversification in the sources of excess return that we have identified. The portfolio also retains considerable liquidity, with over 80% of the Company able to be sold within one day, which enables us to take advantage of movements in the market.

We judge the greatest visible risks to our outlook to reside in energy markets and geopolitics. Energy markets are fundamentally tight due to underinvestment following the 2014/15 downturn and disruptions to European gas supply provoked by the war. Higher demand or an unforeseen reduction in supply would be damaging to economies with limited domestic supply. Both the UK and US will have elections next year and US-China relations remain strained.

Inflationary pressures likely to ease

UK inflation markets suggest that inflation will be 4% over the next 3 years and 3.6% over the next 10 years. Our view is more sanguine.

Energy prices have fallen markedly in recent months. Luck has played its part as Europe experienced an unusually warm winter. Russian oil production has also proven more resilient than many feared. Following the re-opening of China, the last pandemic-induced distortions to supply chains have eased. These factors suggest downward pressure on goods inflation, when mathematically, inflation should decline from its peak level, as the high rates of inflation seen in the second half of 2023 cease to form part of calculations.

UK labour market tightness has showed signs of easing. In 2022, net migration reached a record net 603,000 against many predictions of a fall following Brexit. The widespread decline in real spending power caused by inflation is providing incentives to seek employment and so the ratio of vacancies to job seekers is falling.

Monetarists were amongst the few correctly to predict higher inflation following the abnormal increase in money supply in response to the pandemic. They are now highlighting marked contractions in money supply growth in both the US and Europe resulting from the increase in interest rates and note that current levels of interest rates would be consistent with the inflation rates seen in the 2010s.

The importance of inflation targeting when making historic comparisons is a factor that is seemingly overlooked. Inflation targeting was introduced in 1992, ahead of the Bank of England becoming independent in 1997. The average annual increase in CPI in the 28 years to 2020 was exactly 2.0%. In the prior 20-year period, the average was 9%.

This illustrates the effectiveness of central banks that have the intent and authority to target inflation over the long- term. Whilst a profound policy mistake was made during the pandemic, central banks remain determined to reassert credibility and have the authority to do what it takes to bring inflation back down to target levels. We are sceptical, consequently, both about expectations of inflation remaining above target and are wary of falling prey to the excessive pessimism currently on display in financial markets as a result of recent difficulties.

A decline in inflation and interest rate expectations should be supportive of risk assets by lowering discount rates and by enabling debt markets to function effectively, even if the cost in the short term is higher interest rates and recession. A re-opening of debt and capital markets would be likely to lead to a pick-up in corporate and private equity activity.

Low valuations in the UK should lead to higher returns

The equity risk premium is a measure of the premium you receive in return for accepting the uncertainty of investing in equities and demonstrates the cheapness of the UK market. At current levels, the earnings yield on the FTSE All-Share is 11%. UK 10-year index linked government bonds yield 0.5%. This implies an equity risk premium of over 10%.

Using the same methodology, the current US and European equity market risk premia are 4% and 7%, respectively. In our judgement, this difference is not justified by the long-term fundamental prospects for corporate profit growth but reflects weak sentiment towards UK markets. Whilst this point might have been made at any point in the last five years, it remains valid.

Our holdings in Natwest and Lloyds illustrate the significant value on offer. Both banks trade on earnings yields in excess of 15% (equating to PE ratios of less than 7x) and at a discount to their book value. This is despite being large and enduring franchises that are also beneficiaries of a normalisation in interest rates. Their combined net interest income in 2023 is forecast to be 40% (>£7bn) more than in 2019.

All of our holdings across the UK housebuilders, with the exception of Berkeley Group, trade below book value. This is attractive for businesses that have consistently achieved returns on capital of over 15%. The UK faces an accumulated supply deficit of over 1 million homes, which has worsened owing to an increasingly difficult environment for planning permissions.

Higher interest rates have reduced demand in the short-term, but this does not impact household formation, which continues every year. Demand for housing is deferred, not eliminated, when it is not fulfilled immediately, and so it is logical to expect industry volumes to recover, as and when mortgage rates stabilise.

The takeover of Dignity highlights the neglected value in UK equities. We have written extensively about the company's irreplicable position within the end-of-life industry as the only vertically integrated provider of funerals (725 branches, #2 share), cremations (46 crematoria, #1 share) and pre-need plans (£1.2bn assets, #1 share).

The Board recommended an offer for the business at an enterprise value of £789m (550p). We have historically noted that the crematoria assets alone generate £48m of EBITDA, implying a value of £820m-£960m based on the comparable multiples of European infrastructure (17-20x). As the bidder offered an opportunity to roll existing shareholdings into a new private vehicle, the Takeover Panel required Morgan Stanley to provide an independent valuation. This was publicly available and indicated a range of 660-990p, 20-80% above the offer price.

We reduced our holding into the cash offer, but we have retained a considerable exposure to the publicly quoted equity roll-over vehicle ("Castelnau") as we see significant value in the business.

Durable equity franchises are attractively valued long-term hedges against inflation

Equity valuation multiples initially contracted sharply in response to higher interest rates, reflecting the fact that higher discount rates reduce equity values. However, higher inflation also acts favourably for equities which display durable pricing power. In our view, this is the primary explanation for the resilience of equity markets that many have found surprising.

The Company has a number of holdings in durable equity franchises such as Nintendo, GSK and EssilorLuxottica each of which enjoys significant pricing power.

Nintendo made considerable progress in the year in its strategy to become a broad entertainment business, allowing it to improve monetisation of its uniquely popular intellectual property. This was evident in the success of the Super Mario Brothers movie, which has become the second most popular animated movie of all time with global box office receipts of over $1.3bn.

GSK has successfully strengthened its balance sheet with the spin-off of its consumer staples business Haleon. The company had a major pipeline success with its RSV (Respiratory Syncytial Virus) vaccine, which has more than 90% efficacy in adults over the age of 50, the cohort at the greatest risk of hospitalisation with the disease.

EssilorLuxottica is the largest global eyewear business, operating in a structurally growing industry and with an R&D budget larger than their four closest competitors combined. This enables the group to provide innovative essential eye care solutions to an ageing global population.

The share prices of Just Eat Takeaway and Delivery Hero have been weak as their growth trends were impacted by consumer confidence and pandemic-related distortions. Both companies have stemmed their losses far more quickly than the market expected, despite declining order volumes. Ultimately, we believe the industry remains in the early stages of long-term adoption and will be able to achieve levels of profitability higher than are anticipated by investors.

The Company's principal focus in the year was to take advantage of volatility to add new holdings in businesses characterised by the long duration of their earnings potential.

In July, the Company initiated a holding in global infrastructure operator Vinci. The company has a portfolio of world-class infrastructure assets (toll roads and airports) with inflation- linked revenues. Vinci has funded these investments from its cash generative contracting business that is benefitting from significant tailwinds from the energy transition.

In August, the Company initiated a holding in Berkeley Group, a company with a unique 16-year land bank and strong record of operational excellence including a counter cyclical approach to buying land. London is a structurally under-supplied market in the <£1m price range. The government estimates demand for London housing to be c.90,000 units per annum, and in the last 3 years deliveries have been less than 30,000 per annum.

The Company received shares in Haleon when the global personal care business was spun out of GSK. The Company doubled its holding in August as we judged concerns over the potential impact of Zantac litigation to be exaggerated. Haleon owns a number of market-leading brands in oral care (Sensodyne), pain relief (Panadol/Advil) and vitamins (Centrum) that have the potential to grow reliably above GDP owing to trends such as ageing populations, self-medication, and premiumisation.

In the second half of the year, the Company repurchased a holding in Meta and initiated a position in Alphabet as we felt that investor pessimism was excessive in the light of the stability of, respectively, their globally dominant franchises in social media and internet search. The digital advertising market has grown rapidly in recent years but remains underpenetrated in many geographies and industry verticals. Meta and Alphabet are amongst the global leaders in the field of artificial intelligence and stand to benefit from the opportunities its development presents.

A new position was started in Hargreaves Lansdown in January as the stock was de-rated sharply in response to slowing industry growth. The company retains an attractive position with a >40% share of the UK direct-to-consumer (D2C) investment market. The entire D2C market has total assets of £300bn, which is only 5% of total UK household wealth of £15tn. We expect the market to grow as costs fall and ageing populations move towards greater personal involvement in their financial planning.

Capital cycles are leading to increased profitability in capital intensive and cyclical sectors

Disruption from the pandemic and volatile demand patterns have created tough conditions in many industries meaning a lack of capital investment is leading to higher returns for those that survive.

In our view, this is most evident in the aviation industry, which was one of the hardest hit sectors through the pandemic as demand evaporated and government support was limited.

Boeing and Airbus combined produced almost 2,000 fewer planes than expected during the pandemic and have full order books to the end of the decade. Demand has rebounded strongly, resulting in a strong pricing environment where it is hard to see how supply can respond.

Our holdings in low-cost airlines easyJet and Ryanair have been strong performers as earnings expectations have been revised upwards owing to their ability to increase fares significantly without loss of volume. Our judgement is that valuations fail to capture the new environment of higher profitability and the operational gearing of their business models to higher prices.

Retail is another sector that has seen dramatic changes owing to the shift to online retail, forced store closures during the pandemic and unpredictable demand. Frasers Group has outshone its peers through prudent cost management and retaining a strong value proposition for customers.

The company has used its strong cash generation to take advantage of commercial distress to acquire several businesses such as Studio Retail, Gieves & Hawkes, Missguided, and Sportsmaster. The company's efficient infrastructure and distribution platforms, combined with its frugal approach to cost, allow it to extract value from businesses which previously struggled. The current environment continues to create new opportunities for the business.

Impact of share buybacks underestimated

Share repurchases are an alternative way of returning cash to shareholders whose value is theoretically equivalent to a reinvestment of dividends. In practice, share buybacks can offer a number of advantages:

Corporates can use share repurchases to distribute excess capital they might not otherwise pay out as dividends.
Capital gains taxes are lower than income tax in the UK.
The resulting growth in earnings per share may be valued more highly by the market than capital returns.

To illustrate the last point, consider a company that trades on 10x earnings and grows earnings by 5% per annum over 10 years. Assuming a constant multiple, if 35% of net income is used to repurchase shares, the company's growth in earnings per share doubles from 5% to 10%.

This highlights how lower valuations increases the compounding effect of share repurchases, which in our view is relevant to the UK equity market and our portfolio today and why Charlie Munger once said, "Pay close attention to the cannibals - the businesses that are eating themselves by buying back their stock."

Plus500 is one such example within the portfolio. The company's business model allows it to grow earnings with limited capital required. Since our investment in 2016, it has invested £330m in repurchasing its own shares and this has helped it reduce its share count by 21% and grow its grown earnings by 17% per annum. Plus500 continues to expand into new geographies and business areas, including the US market, which has exciting potential.

Portfolio companies, which account for 45% of NAV, are repurchasing shares. This segment of the portfolio trades on a weighted average multiple of 10x earnings. Whilst the running dividend yield of the portfolio is 2%, including pro-rata share repurchases, the aggregate distribution yield is close to 5%. We believe that such characteristics offer a sound body for future returns to shareholders.

John Dodd and Kartik Kumar

Fund managers

Artemis Fund Managers Limited

11 July 2023

April 2023 - Key Sector Exposures
Sector	2023	2022	Companies
General retail	14.8%	16.0%	Currys, Frasers
Housebuilding	13.2%	11.5%	Barratt, Bellway, Berkeley, Redrow, Springfield
Airlines	12.8%	12.7%	easyJet, Ryanair
Video games & hobbies	9.1%	10.5%	Nintendo, Hornby
Banking	7.7%	5.9%	Lloyds, NatWest
Funerals	6.8%	10.1%	Dignity
Food delivery	6.2%	8.0%	Delivery Hero, Just Eat Takeaway.com
Financial services	6.1%	3.5%	Singer Capital Markets
Technology	5.9%	-	Alphabet, Darktrace, Meta
Aerospace & defence	5.4%	5.2%	Reaction Engines
Trading platform	5.0%	5.2%	Plus500
Consumer staples	4.1%	2.0%	EssilorLuxottica, Haleon
Pharmaceuticals	4.1%	5.6%	GSK
China technology	3.0%	4.9%	Prosus
Industrials	2.1%	1.4%	Vinci
Energy	0.9%	-	BP, Shell
Basic materials	0.9%	-	Anglo American
Property	0.7%	0.7%	Claremont Alpha
Serviced offices	-	3.1%	IWG
Leisure	-	2.7%	Flutter Entertainment, J D Wetherspoon

Source: Artemis

ESG & Stewardship at Artemis

Introduction

Artemis believes stewardship activities contribute to improvement in company performance and to consequently higher returns for our clients.

Stewardship is a fundamental element of our approach across all investment strategies. Whilst individual strategies are distinctive, views and ideas are shared across investment teams. The Stewardship team supports fund managers by providing insight, research and analysis, discussion, and challenge on ESG and stewardship matters.

In 2022 Artemis set goals for the Net Zero Asset Managers initiative, covering 80% of AuM. Additionally, we published our first Corporate Social Responsibility report and achieved signatory status from the FRC. We have developed extensive internal tools to inform and guide our Stewardship focuses and continue to strengthen our controls, processes, and actions.

Approach to Stewardship

Our stewardship team is specifically dedicated to supporting our fund managers by providing insight, research and analysis, discussion, and challenge on ESG and stewardship matters including:

Identifying and incorporating a wider set of risks and opportunities into investment processes including ESG factors
Monitoring and escalating issues with companies and exercising shareholder rights at company meetings, and
Working collaboratively to develop and promote best practice internally and across the industry.

Artemis Alpha Stewardship approach

The Company employs a long-term value investing strategy to pick stocks. The framework is based on valuing companies using fundamental analysis and sizing positions according to the attractiveness of share prices relative to our view of their value. The Company's strategy is underpinned by a core principle that the key driver of long-term value is achieving a high and sustainable return on capital employed.

Investee companies that do not adhere to strong governance, look after their employees, or fail to recognise environmental and societal harm risk inhibiting their long-term potential. The investment process requires a focus on the ESG risks and opportunities present in each business and industry.

Risk mitigation

Our view is that ESG factors are most pertinent in their contribution when creating the risk of a permanent loss of capital, usually through obsolescence, excessive leverage, misjudged investment value, misallocations of capital, and regulation.

This is evident in the portfolio where we are significantly underweight controversial sectors (as defined by ESG data providers), and therefore are less exposed to key ESG risks that may affect the prospects of these businesses.

We actively monitor ESG risks and opportunities primarily through our fundamental and bottom-up driven research process for monitoring existing and evaluating prospective investments. We frequently engage with management teams on strategy, capital allocation, incentive alignment and communication.

Engagement and voting

The Fund Manager has expanded his engagement with current and potential holdings, ensuring appropriate monitoring and due diligence for the portfolio. During the year, the Fund Manager conducted 220 (vs 114 last year) company meetings, 127 with existing and 93 with prospective investments.

During the year we met with the investor forum to improve the engagement and disclosure of easyJet, and to represent our views on the company's capital allocation. Additionally we raised concerns about the Board's oversight and responded to concerns about remuneration and share issuance. As a result of this initiative the company's chair agreed to meet with investors more regularly.

The team used its voting powers to express its dissatisfaction with company/management policy. The number of votes that were not in line with management guidance grew over the year 6x to 33, with the proportion of votes not in line with recommendations rising from 2% to 8%. Votes against were focussed on compensation, directors, and non-routine business.

Portfolio carbon emissions

The portfolio's carbon emissions relative to its benchmark, the FTSE All-Share Index, have remained elevated since the onset of COVID-19 in early 2020. This is because our airline holdings are still recovering from depressed revenues that penalised their carbon intensity statistics based on emissions per revenue. Furthermore, expectations of a strong recovery in revenue have resulted in increases in their share prices, leading to an increased weighting in the portfolio of their temporarily inflated carbon intensity figures. We expect this measure to normalise somewhat as airline revenues fully recover in 2023.

Strategy and Business Review

Culture, Purpose & Values

The Directors drive the culture, purpose and values of Artemis Alpha Trust plc ("the Company") and by doing so seek to ensure that these three elements underpin the delivery of strategy.

Culture

The Company is an externally managed investment trust and as such its culture is created by the Board of Directors and the Investment Manager, Artemis Fund Managers Limited.

Purpose

Our purpose is to provide our shareholders, large or small, with a diversified and cost-effective investment opportunity to achieve long-term growth.

Values

The Company provides access to a portfolio of investments which the Board expects to be managed with integrity, transparency and accountability and with appropriate due diligence to environmental, social and governance matters. The constructive and openly discursive nature of the relationship between the Board and the Investment Manager helps ensure their respective values are aligned and focused on delivering the strategy for our shareholders.

The core values that contribute to the Board culture include:

Integrity: the Board seeks to comply with all applicable laws and regulations, both to the letter and in spirit.
Accountability: the Board recognises the need to explain the Company's performance to investors and to highlight the risks in a clear and open manner. The Board has a key role to encourage and challenge the performance of its Investment Manager and its other service providers to help ensure the Company continues to provide shareholder value.
Respect & Transparency: the Board seeks to communicate clearly and openly with shareholders and service providers respecting individual opinions and expectations. Contact by shareholders via the Chairman's email address is welcomed.
Environmental, Social and Governance ("ESG") issues: We are stewards of our shareholders' capital; both the Board and Investment Manager recognise that this comes with responsibilities. ESG considerations are integrated within the investment process.

An overview of the Investment Manager's culture, values and stewardship activities can be found on the website at www.artemisfunds.com.

Corporate strategy & policy

The Company is incorporated in England as a public company limited by shares. Its business as an investment trust is to buy and sell investments with the aim of achieving the investment objective and in accordance with the policy.

Gearing

The Company uses gearing (i.e. borrowing) as part of its investment strategy. The Company's Articles of Association limit borrowing to 50 per cent of the Company's net assets. However, the investment policy limits this to 25 per cent of net assets. Subject to compliance with this restriction, the level of borrowing is a matter for the Board, whilst the utilisation of borrowings is delegated to the Investment Manager. This utilisation may be subject to specific guidelines established by the Board from time to time. The current guidelines permit the Investment Manager to employ borrowings of up to 20 per cent of net assets. The Company had no borrowing facility as at 30 April 2023 or the prior year. The use of gearing by the Investment Manager will vary from time to time, reflecting its views on the potential returns from stock markets. The Company's gearing is reviewed by the Board and Investment Manager on an ongoing basis. At the year end, net gearing was created through the use of contracts for difference and stood at 13.4 per cent (9.4 per cent as at 30 April 2022).

Leverage

Leverage is defined in the Alternative Investment Fund Manager Directive ("AIFMD") as any method by which the Company can increase its exposure by borrowing cash or securities, or from leverage that is embedded in derivative positions. The Company has an agreement with Northern Trust to utilise contracts for difference as a form of leverage. A result of 100 per cent indicates that no leverage has been used. The Company is permitted by its Articles to borrow up to 50 per cent; however the Company's investment policy restricts this to 25 per cent. The Company is permitted to have additional leverage of up to 100 per cent of its net assets, which results in permitted total leverage of 225 per cent under both ratios. Artemis as the Alternative Investment Fund Manager ("AIFM"), monitors leverage limits on a daily basis and reviews them annually. No changes have been made to these limits during the year. At 30 April 2023, the Company's leverage was 134.2 per cent as determined using the gross method and 115.7 per cent under the commitment method.

The Investment Manager requires prior Board approval to:

(i) enter into any stocklending agreements;

(ii) borrow money against the security of the Company's investments; or

(iii) create any charges over any of the Company's investments.

Operating environment

The Company operates as an investment trust company and is an investment company within the meaning of section 833 of the Companies Act 2006 (the "Act").

The Company has been approved as an investment trust in accordance with the requirements of section 1158 of the Corporation Taxes Act 2010 which remains subject to the Company continuing to meet the eligibility conditions and ongoing requirements of the regulations. The Board will manage the Company so as to continue to meet these conditions.

The Company has no employees and delegates most of its operational functions to service providers.

Current & future developments

A summary of the Company's developments during the year ended 30 April 2023, together with its prospects for the future, is set out in the Chairman's Statement and the Investment Manager's Review in the Annual Report. The Board's principal focus is the delivery of positive long-term returns for shareholders and this will be dependent on the success of the investment strategy. The investment strategy, and factors that may have an influence on it, such as economic and stock market conditions, are discussed regularly by the Board and the Investment Manager. The Board regularly considers the ongoing development and strategic direction of the Company, including its promotion and the effectiveness of communication with shareholders.

Key Performance Indicators ("KPIs")

The performance of the Company is reviewed regularly by the Board and it uses a number of KPIs to assess the Company's success in meeting its objective. The KPIs which have been established for this purpose and remain unchanged from the prior year are:

Discrete annual total returns

Year ended 30 April	Net asset value*	Share price*	FTSE All-Share Index
2018	11.0%	13.2%	8.2%
2019	(8.6)%	(8.9)%	2.6%
2020	(11.3)%	(12.5)%	(16.7)%
2021	56.0%	80.8%	26.0%
2022	(21.9)%	(24.8)%	8.7%
2023	1.3%	(1.2)%	6.0%

Source: Artemis/Datastream

* Alternative Performance Measure

Dividends per ordinary share

Year ended 30 April	Ordinary	Special	Total pence per ordinary share	Ordinary increase	Total increase/ (decrease)
2018	4.75p	1.60p	6.35p	10.4%	0.8%
2019	5.00p	0.50p	5.50p	5.3%	(13.4)%
2020	5.20p	-	5.20p	4.0%	(5.5)%
2021	5.30p	-	5.30p	1.9%	1.9%
2022	5.60p	-	5.60p	5.6%	5.6%
2023	6.20p	-	6.20p	10.7%	10.7%

Ongoing charges as a proportion of shareholders' funds

As at 30 April	Ongoing charges*
2018	0.90%
2019	0.93%
2020	0.95%
2021	0.93%
2022	1.01%
2023	1.08%

* Alternative Performance Measure

Discount management

In addition to the above KPIs, the Board monitors the discount to the underlying net asset value at which the shares trade. The discount levels throughout the financial year are shown within the Financial Highlights in the Annual Report. No specific discount target has been set, but the Board sets the share buyback policy and has given the Investment Manager discretion to exercise the Company's authority to buyback its own shares from time to time to address any imbalances between the supply and demand in the Company's shares or at times where it is believed this is the best use of available capital to increase NAV per share. This is reviewed regularly by the Board. The Board will also use its authority to issue new ordinary shares from time to time should there be excess demand for the Company's shares. The Company will also provide tender offers every three years. The first tender offer was due in 2021, for 25 per cent of the ordinary shares then in issue. However, following a shareholder vote, this did not take place. The next proposal for a tender offer will be in 2024.

Principal risks and risk management

As required by the 2018 UK Code of Corporate Governance, the Board has carried out a robust assessment of the principal and emerging risks facing the Company. Following consideration of the investment, regulatory and operational risks, the Board has concluded that there are no emerging risks facing the Company that require to be added to the principal risks.

The Board, in conjunction with the Investment Manager, has developed a risk map which sets out the principal risks faced by the Company and the controls established to mitigate these risks. This is an ongoing process and the risk map, including any emerging risks, is formally reviewed every six months. The Board has given particular attention to those risks that might threaten the long-term viability of the Company. Further information on the Company's internal controls is set out in the corporate governance section in the Annual Report. As an investment company the main risks relate to the nature of the individual investments and the investment activities generally; these include market price risk, foreign currency risk, interest rate risk, credit risk and liquidity risk.

A summary of the key areas of risk, their movement during the year and their mitigation is set out below:

Movement

Principal risk

Mitigation/control

No change

Strategic risk

Investment objective and policy are not appropriate in the current market and not favoured by investors.

The investment objective and policy of the Company is set by the Board and is subject to ongoing review and monitoring in conjunction with the Investment Manager. Views expressed by the Company's shareholders are also taken into account.

No change

Investment risk

The Company's investments are selected on their individual merits and the performance of the portfolio is not likely to track the wider UK market (FTSE All-Share Index). Whilst the focus is on large cap companies the Company also invests in small cap (listed), AIM traded and unquoted investments which can be subject to a higher degree of risk than that of larger quoted investments. From time to time, the Company may also have significant exposure to particular industry sectors.

The Investment Manager's high conviction approach leads to a concentrated portfolio, typically containing between 25 and 60 stocks, carrying a higher degree of stock-specific risk than a more diversified portfolio.

The Company's functional and reporting currency is Sterling. However, the investment objective and policy may result in a proportion of the Company's portfolio being invested in overseas equities denominated in currencies other than Sterling. As a result, movements in exchange rates may affect the Sterling value of these investments and their returns.

The Company may borrow money for investment purposes or use derivatives to similarly increase exposure. If the investments fall in value, any borrowings/use of derivatives will magnify the extent of the losses.

The Board considers that this risk is justified by the longer-term nature of the investment objective and the Company's closed-ended structure, and that such investments should be a source of positive returns for shareholders. Risks are diversified through having a range of investments in the portfolio covering various sectors. The Board discusses the investment portfolio with the Investment Manager at each Board meeting, and at each month end between Board meetings, and part of this discussion includes a detailed review of the Company's unquoted investments, their valuations and future prospects together with their portfolio weighting.

The Board receives management information concerning the geographical sector split of the portfolio. The Company is not materially exposed to foreign currency risk.

All borrowing arrangements entered into require the prior approval of the Board and gearing levels, provided by the use of contracts for difference, are regularly discussed and reviewed by the Board and Investment Manager.

No change

Legal and regulatory risk

A breach of s1158 Corporation Tax Act 2010 could lead to a loss of investment trust status and the resultant taxation of realised capital gains.

The principal laws and regulations the Company is required to comply with are the Companies Act 2006, the Alternative Investment Fund Managers' Directive, the Market Abuse Regulation, the UK Listing Rules and the Disclosure Guidance and Transparency Rules.

A breach of the FCA listing rules could lead to suspension of the Company's shares. A breach of the Companies Act 2006 could lead to criminal proceedings and reputational and financial damage.

The Investment Manager provides investment, company secretarial, administration and accounting services through the use of qualified professionals.

The Board receives internal control reports from the Investment Manager confirming compliance with regulations. These reports also highlight any matter that the Compliance team feel should be brought to the Board's attention along with any items discussed during internal audit review.

The Board meets each year with the Risk and Compliance team to discuss the areas of risk appropriate to the Company and the control environment.

No change

Operational risk

Disruption to, or failure of, the Investment Manager's and/or any other third-party service providers' systems which could result in an inability to report accurately and monitor the Company's financial position.

Northern Trust became administrator, custodian and depositary during the year taking over from JP Morgan Europe. There was a temporary additional risk in relation to this move due to the operational changes required.

Both the Investment Manager and the Administrator have established business continuity plans to facilitate continued operation in the event of a major service disruption or disaster.

All of the Investment Manager's and Administrator's staff can work from home with no impact to operations.

The move to Northern Trust was planned in detail with contingencies in place as required. The move has now been completed and the risk returned to the prior year level.

No change

Cyber risk

Failure or disruption of the Investment Manager's and/ or any other third-party service providers' systems as a result of a cyber-attack, data theft, service disruption, etc. Whilst the risk of a direct financial loss by the Company is low, the risk of reputational damage and the risk of loss of control of sensitive information is more significant.

The Company benefits from the cyber security precautions in place at the Investment Manager and also those in place at the third-party suppliers such as the registrar and depositary.

The Board receives regular updates from the Investment Manager and its service providers which describe the protective measures taken to enhance security.

No change

Climate change

Globally, climate change effects are already emerging in the form of changing weather patterns. Extreme weather events could potentially impair the operations of individual investee companies, potential investee companies, their supply chains and their customers.

The Investment Manager takes such risks into account, along with the downside risk to any company (whether in the form of its business prospects or market valuation or sustainability of dividends) that is perceived to be making a detrimental contribution to climate change. The Company invests in a broad portfolio of businesses with operations spread geographically, which should limit the impact of location- specific weather events.

Increased

Geopolitical risk

There is an increasing risk to market stability from geo-political conflicts, such as between Russia and Ukraine.

The Board discusses such risks as they arise and continues to monitor the impact on the Company and its investments through discussion with the Investment Manager as and when required.

The Company does not have any direct investments in countries where there is geopolitical conflict. However, the Board is provided with information from the Investment Manager on the measures it takes to assess the potential impact of geopolitical events, both on itself and other service providers, and any action taken.

Increased

Inflationary risk

Central Bank decisions, the war in Ukraine or any other economic or political factors or global events, may result in increasing levels of inflation directly affecting economic growth and the underlying investment values.

The Board and its Investment Manager have regular discussions to assess the likely impact of inflation rates on the economy, corporate profitability and asset prices.

The Pandemic risk noted in the 2022 Annual Report is no longer considered an emerging or principal risk.

Further information on risks and the management of them are set out in the notes to the financial statements

Long-term Viability

Viability statement

In accordance with the Association of Investment Companies (the "AIC") Code of Corporate Governance, the Board has considered the longer-term prospects for the Company beyond the twelve months required by the going concern basis of accounting. The period assessed is for five years to 30 April 2028. The Board has concluded that this period is appropriate, carefully taking into account the inherent risk with equities and the long-term investor outlook.

As part of its assessment of the viability of the Company, the Board has discussed and considered each of the principal risks, including matters relating to geopolitical events and inflationary pressures, and their impact on the Company. Although the damage to the economy through the total impact of inflation and the geopolitical effect of Russia/ Ukraine cannot be known with certainty, the Board has considered these risks and does not believe they affect the long-term viability of the Company and its portfolio. The Investment Manager carried out stress testing scenarios in connection with a longer-lasting damage to the economy, of the withdrawal of liquidity by the financial authorities and of a significant and sustained fall in markets. The Board has also considered the liquidity of the Company's portfolio to ensure that it will be able to meet its liabilities, as they fall due. The results demonstrated the impact on the Company's NAV throughout the five year period and on its expenses and liabilities. The Board have concluded, given the realisable nature of the majority of the investments, the level of ongoing expenses and the availability of gearing that the Company will continue to be in a position to cover its liabilities.

The Board also made the below assumptions when considering the viability of the Company:

Investors will continue to wish to have exposure to UK listed companies
There will be continued demand for investment trusts
Regulation will not increase to such an extent as to hinder operational efficiency

The Directors do not expect there to be any significant change in the current principal risks and the associated mitigating controls other than the decreased risk in relation to Covid-19. The Directors also do not envisage any change in strategy or objectives that would prevent the Company from continuing to operate over the five-year period. The Company's assets are liquid, its commitments limited, and it intends to continue as an investment trust.

The 2024 tender offer of up to 25% of the share capital has been considered by the Board when assessing the continuing viability of the Company.

Taking into account the results of the above review, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to 30 April 2028.

Life of the Company

The Company operates a triennial liquidity event for shareholders. The tender offers may be made every three years, with the next event proposed in 2024, subject to shareholder approval. Each tender offer will be for up to 25 per cent of the ordinary shares then in issue (excluding Treasury Shares), save that the Board may, at its sole discretion, decide not to proceed with a tender offer if the ordinary shares are trading at a premium to the estimated tender price.

Share capital

Shareholders authorised the Company to buyback up to 14.99 per cent of the shares in issue at the 2022 AGM.

During the year the Company bought back 1,019,766 ordinary shares. As at 30 April 2023, 4,525,566 ordinary shares bought back during the year are held in treasury.

A resolution to renew the Company's buyback authority will be put to shareholders at the AGM on 21 September 2023.

No ordinary shares were issued during the year.

Duty to Promote the Success of the Company

How the Directors discharge their duties under s172 of the Companies Act

Under section 172 of the Companies Act 2006, the Directors have a duty to act in a way they consider, in good faith, would be likely to promote the success of the Company for the benefit of its shareholders as a whole, and in doing so have regard to:

a) the likely consequences of any decision in the long term;

b) the interests of the Company's employees;

c) the need to foster the Company's business relationships with suppliers, customers and others;

d) the impact of the Company's operations on the community and the environment;

e) the desirability of the Company maintaining a reputation for high standards of business conduct; and

f) the need to act fairly as between members of the Company.

As an externally managed investment trust, the Company has no employees or physical assets, our stakeholders include our shareholders and service providers, such as the Investment Manager.

The below tables describe the impact of engagement with our stakeholders that has taken place during the year:

Engagement with key stakeholders

Stakeholders	Engagement	Impact
Shareholders and potential investors	The Board is responsible for promoting the long-term sustainable success and strategic direction of the Company for the benefit of the Company's shareholders. Whilst certain responsibilities are delegated, Directors' responsibilities are set out in the schedule of matters reserved for the Board and the terms of reference of its committees, which are reviewed regularly by the Board. To help the Board in its aim to act fairly as between the Company's members, it encourages communications with all shareholders. The Annual and Half-Yearly reports are issued to shareholders and are available on the Investment Manager's website together with other relevant information including monthly factsheets. The Board receives regular feedback on shareholder meetings from the Company's broker and any shareholder communications are reviewed and discussed by the Board to ensure that shareholder views are taken into consideration as part of any decisions taken by the Board. The Chairman is available to contact via email: alpha.chairman@artemisfunds.com. The Board considers communication with shareholders an important function and Directors are always available to respond to shareholder queries. For further information see `Relations with shareholders'.	Through the publication of the Annual Report and the Half-Yearly Report, monthly factsheets and Fund Manager updates to the Company's website, shareholders are kept informed of Company performance and portfolio activities. Shareholders are encouraged to raise questions and communicate with the Chairman and the Fund Manager.
Artemis as Investment Manager Fund management Company secretarial Financial reporting Sales & marketing Compliance and internal control functions Internal audit Investment administration (outsourced to Northern Trust)	The Board has set the parameters within which the Investment Manager operates and these are set out in the Investment Management Agreement and agreed by the Board. The Board receives regular updates from the Investment Manager and other service providers and ensures that information pertaining to its stakeholders is provided, as required, as part of the information presented in regular Board meetings. During the year, additional monthly performance updates were held between the Board and Investment Manager to discuss the continuing impact of geopolitical, inflationary and market movements events on the Company and its portfolio. The Board, with the support of its Management Engagement Committee, regularly reviews the performance of the Investment Manager and other service providers to ensure that services provided to the Company are managed efficiently and effectively for the benefit of the Company's shareholders. The Board has reviewed and discussed plans for the future marketing and development of the Company with the Investment Manager during the year.	During the year the performance of the Company fell against its benchmark. Buybacks were performed during the year to help maintain and narrow the discount. The liquidity in the market for the Company's shares continued to increase on the prior year, further detail can be found within the Chairman's Statement and Investment Manager's Review. The Fund Manager worked on a number of initiatives to raise the profile of the Company and generate interest with new investors; taking part in various shareholder in-person events and webinars during the year. During the year, the investment administrator changed from JP Morgan to Northern Trust. This was discussed in advance by the Board and approval was given.
Other third-party service providers Northern Trust as Depositary and Custodian Singer Capital Markets as Broker Link Group as Registrar Johnston Carmichael LLP as Auditor	As an investment company, all services are outsourced to third-party service providers. The Board considers the Depositary, the Custodian, the Broker, the Registrar and Auditor to be key stakeholders. The Board relies on the Investment Manager to work alongside these key stakeholders to meet the requirements of the Company. The Management Engagement Committee reviews the performance of these service providers, along with their fee levels, and provides recommendations to the Board as required. The Investment Manager has constant interaction with the service providers and provides feedback to and from the Board as required. Annual assurance reports are received to assist the review of the internal control environments of the Depositary and Custodian. The FRC performs and publishes audit quality reviews on a sample of audit firms and audits each year.	The performance of the third-party service providers is continually monitored throughout the year. As and when appropriate, third-party providers present to the Board. Following formal review by the Management Engagement Committee and Board at the year end, it was concluded that the service providers were operating effectively and provided a good level of service. Following the move of administration services, Depositary and Custodian services are now provided by Northern Trust.
Investee companies	The Board sets the investment objective and discusses stock selection, asset allocation, and the ESG qualities of investee companies with the Fund Manager at each Board meeting. The Fund Manager engages with the investee companies, prior to investment and on an on-going basis. The Fund Manager has a dedicated Stewardship Team which supports the Fund Manager in the investment process.	The engagement of the Fund Manager with the investee companies aids awareness and understanding of the ESG environment in operation as well as the valuation and prospects of their businesses.
The Association of Investment Companies ("AIC")	The Company is a member of the AIC which is an organisation that represents the interests of investment trusts, VCTs and other closed-end funds.	The Board chooses to report under the AIC Code of Corporate Governance. This Code better reflects the nature of an investment trust in the context of good corporate governance.

Board discussions and decisions

The following are the key discussions and decisions made by the Board during the year ended 30 April 2023:

Topic	Background & discussion	Decision
Share buyback policy	The level of buybacks and their effect on the discount is discussed at each Board meeting. The strategy in relation to buybacks and investor feedback thereon is discussed and monitored by the Board. The economic environment had worsened over the period from when the initial extended buyback programme had been put in place.	The Board weighs up the effectiveness of the buyback policy in helping to maintain/reduce the discount to NAV against its impact on the Company and the liquidity of its shares. In light of market developments, buybacks were conducted at a reduced pace in the period. The Board decided to reduce the monetary amount of buybacks and continue to monitor the rate in line with discount and liquidity requirements.
Environmental, social and governance matters (`ESG')	The Board discussed its responsibilities for ESG and how Artemis, as Investment Manager, undertook the required steps to ensure ESG was incorporated within the investment process. The Board made enquiries of the Investment Manager as to the ESG credentials of the underlying portfolio. The Investment Manager confirmed engagement with investee boards helped gain an understanding of the governance in place.	The Board received reporting on ESG, sustainability and voting records quarterly. A representative of the Risk team presents as required to the Board. It was decided that ESG was appropriately incorporated within the Artemis investment process and the Board would continue to discuss and monitor on an on-going basis.
Administration, Depositary and Custodian arrangements	The Board considered and discussed the progress of the change of administrator, depositary and custodian to Northern Trust.	The Board confirmed satisfaction with the progress on the migration of third parties and the change of responsibilities was completed on 6 March 2023.
Gearing	The Board discussed the current policy of providing gearing through Contracts for Difference.	The Board decided that this policy continues to provide gearing at a reduced cost compared to a conventional bank loan.
Internal audit	The Audit Committee discussed the possibility of the Company having its own internal audit function.	The Audit Committee and Board decided the Company should continue to place reliance on the internal audit function performed by the Investment Manager.
Director succession	The Board discussed the succession of Directors taking into account the number of years served, the mix of skills required to perform the role and the diversity requirements of the new legislation. The recruitment process to replace Ms Bergin was discussed. A comprehensive list of applicants for the role of Chairman of the Audit Committee was received from Nurole. These were reviewed and discussed at length to ensure the right candidates were chosen for interview. The Board were keen to see candidates with commercial financial and audit skills as well as those from a more conventional investment trust background.	It was agreed to enlist the services of Nurole as an external, independent recruitment consultant to assist with the replacement of Ms Bergin. Mrs Stewart became interim Chairman of the Audit Committee in October 2022 and became Senior Independent Director on 28 June 2023. Mr Smethers offered the sought after financial and audit skills and was agreed to be an excellent addition to the skills already present on the Board. The Board approved the recruitment of Mr Smethers and his role as Chairman of the Audit Committee. While the Board acknowledges that it has not been compliant with the gender diversity guidelines during the second half of the year, its firm intention is to return to a position of compliance.

The Board's primary focus is to promote the long-term success of the Company for the benefit of the Company's shareholders. In doing so, the Board has regard to the impact of its actions on other stakeholders as described above.

Directors & Diversity

The Directors of the Company and their biographical details are set out in the Annual Report.

No Director has a contract of service with the Company.

The Board supports the recommendations of the Hampton-Alexander Review on gender diversity and the Parker Review on ethnic representation on Boards.

The Board recognises the principles of diversity in the boardroom and acknowledges the benefits of having greater diversity, including gender, social and ethnic backgrounds, and cognitive and personal strengths. When setting a new appointment brief, the Nomination Committee considers diversity alongside seeking to ensure that the overall balance of skills and knowledge that the Board has remains appropriate, so that it can continue to operate effectively. The Board's Director selection policy will, first and foremost, seek to identify the person best qualified to become a Director of the Company, based on merit and objective criteria.

The Board is currently comprised of four male Directors and one female Director.

The FCA announced a new policy statement on diversity and inclusion on company boards in April 2022. Companies are required to comply with the targets or explain the reasons for non-compliance. Outlined below is an overview of the targets and the Company's compliance as at 30 April 2023 in accordance with Listing Rule 9.8.6R(9):

40% of the Board is represented by women: 40% of the individuals on the Board were women up to 13 October 2022, the date of Ms Bergin's retirement. From that point to 15 March 2023, 25% of the Board were women and from 15 March 2023 to 30 April 2023, 20% of the Board were women. As at 30 April 2023, the Company does not meet this diversity target and a further explanation is given in the Annual Report.
One woman in a senior position: as at 30 April 2023 no woman was in a senior position. In the absence of Executive roles, the Company also considers the role of Chairman of the Audit Committee, along with the role of Senior Independent Director, to qualify as a senior position. Ms Bergin held these roles throughout the year until retirement on 13 October 2022 at which point Mrs Stewart became interim Chairman of the Audit Committee until 15 March 2023 and the appointment of Mr Smethers to the role. The Company therefore does not meet this diversity target as at 30 April 2023. Mrs Stewart subsequently became Senior Independent Director on 28 June 2023.
One individual from a minority ethnic background: as at 30 April 2023, no individuals on the Board are from a minority ethnic background. The Company does not therefore meet this diversity target and a further explanation is given in the Annual Report.

The following tables set out the data on the diversity of the Directors on the Company's Board in accordance with Listing Rule 9.8.6R(10) as at 30 April 2023. This data has been collected through consultation with the Board. Subsequent to the record date of 30 April 2023, Mrs Stewart became the Senior Independent Director.

	Number of Board members	Percentage of the Board	Number of senior positions on the Board	Number in executive management2	Percentage of executive management2
Men	4	80%	21	N/A	N/A
Women	1	20%	0	N/A	N/A
Not specified/prefer not to say	N/A	N/A	N/A	N/A	N/A

1 Duncan Budge is the Chairman of the Board, a senior position as defined by the Listing Rules and Mr Smethers is Chairman of the Audit Committee.

2 Not applicable as the Company does not have an executive management team.

Number of Board members		Percentage of the Board	Number of senior positions on the Board	Number in executive management1	Percentage of executive management1
White British or other White	5	100%	2	N/A	N/A
Mixed/Multiple ethnic groups	0	0%	0	N/A	N/A
Asian/Asian British	0	0%	0	N/A	N/A
Black/African/Caribbean/Black British	0	0%	0	N/A	N/A
Other ethnic group, including Arab	0	0%	0	N/A	N/A
Not specified/prefer not to say	N/A	N/A	N/A	N/A	N/A

1 Not applicable as the Company does not have an executive management team.

Modern Slavery Act 2015

The Company does not fall within the scope of the Modern Slavery Act 2015 as its turnover is less than £36m. Therefore, no slavery and human trafficking statement is included in the Annual Report.

Sustainability and Environmental, social and governance

(`ESG') matters

The Board recognises that the most material way in which the Company can have an impact on ESG is through responsible ownership of its investments. The Board has appointed Artemis as Investment Manager, who engages actively with investee companies undertaking extensive evaluation and engagement on a variety of matters such as strategy, performance, risk, dividend policy, governance and remuneration. All risks and opportunities are considered as part of the investment process in the context of enhancing the long-term value of shareholders' investments. This will include matters relating to material environmental, human rights and social considerations that will ultimately impact the profitability of a company or its stock market rating and hence these matters are an integral part of Artemis' thinking as investors. The ESG and stewardship engagement of Artemis is detailed in the Annual Report.

Financial Statements

The financial statements of the Company are included in the Annual Report.

For and on behalf of the Board,

Duncan Budge

Chairman

11 July 2023

Statement of Directors' Responsibilities in respect of the Annual Report

Management Report

Listed companies are required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (the "Rules") to include a management report in their annual financial statements. The information required to be in the management report for the purpose of the Rules is included in the Strategic Report in the Annual Report. Therefore no separate management report has been included.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with UK-adopted international accounting standards.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of their profit or loss for that period. In preparing each of the financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable
and prudent;
state whether they have been prepared in accordance with UK-adopted international accounting standards; and
prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

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 ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The financial statements are published on a website, artemisalphatrust.co.uk, maintained by the Company's Investment Manager, Artemis. Responsibility for the maintenance and integrity of the corporate and financial information relating to the Company on this website has been delegated to the Investment Manager by the Directors. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

Each of the Directors listed in the Annual Report confirm that, to the best of their knowledge:

a) the financial statements, prepared in accordance with the applicable set of UK-adopted international accounting standards, give a true and fair view of the assets, liabilities and financial position of the Company as at 30 April 2023, and of the profit or loss of the Company for the year then ended;

b) the Strategic Report includes 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; and

c) 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.

In the case of each Director in office at the date the Directors' Report is approved:

a) so far as the Director is aware, there is no relevant audit information of which the Company's Auditor is unaware; and

b) they have taken all steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

For and on behalf of the Board

Duncan Budge

Chairman

11 July 2023

Financial Statements

Statement of Comprehensive Income

For the year ended 30 April 2023

	Year ended 30 April 2023			Year ended 30 April 2022
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000		Total £'000
Investment income	3,052	-	3,052	3,099	-		3,099
Total revenue	3,052	-	3,052	3,099	-		3,099
Losses on investments	-	(4,609)	(4,609)	-	(30,511)		(30,511)
Net gains/(losses) on derivatives	-	4,134	4,134	-	(7,770)		(7,770)
Currency gains/(losses)	-	140	140	-	(16)		(16)
Total income/(loss)	3,052	(335)	2,717	3,099	(38,297)		(35,198)
Expenses
Investment management fee	(154)	(615)	(769)	(219)	(875)		(1,094)
Other expenses	(456)	(8)	(464)	(492)	(74)		(566)
Profit/(loss) before finance costs and tax	2,442	(958)	1,484	2,388	(39,246)		(36,858)
Finance costs	(115)	(461)	(576)	(9)	(36)		(45)
Profit/(loss) before tax	2,327	(1,419)	908	2,379	(39,282)		(36,903)
Tax	(101)	-	(101)	(118)	-		(118)
Profit/(loss) and total comprehensive income/(expense) for the year	2,226	(1,419)	807	2,261	(39,282)	(37,021)
Earnings/(loss) per ordinary share	6.74p	(4.30p)	2.44p	6.29p	(109.28p)	(102.99p)

The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with International Financial Reporting Standards. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

All items in the above statement derive from continuing operations.

All income is attributable to the equity shareholders of Artemis Alpha Trust plc. There are no minority interests.

Statement of Financial Position

As at 30 April 2023

	2023 £'000	2022 £'000
Non-current assets
Investments	109,979	119,612
Investments in subsidiary undertaking	4,264	4,231
	114,243	123,843
Current assets
Derivative assets	2,187	492
Other receivables	2,208	781
Collateral held	-	1,970
Cash and cash equivalents	7,653	2,389
Total assets	126,291	129,475
Current liabilities
Derivative liabilities	(106)	(308)
Collateral pledged	(1,930)	-
Other payables	(4,438)	(5,066)
Total liabilities	(6,474)	(5,374)
Net assets	119,817	124,101
Equity attributable to equity holders
Share capital	373	373
Share premium	676	676
Special reserve	18,779	21,964
Capital redemption reserve	217	217
Retained earnings - revenue	3,437	3,117
Retained earnings - capital	96,335	97,754
Total equity	119,817	124,101
Net asset value per ordinary share	366.02p	367.65p

These financial statements were approved by the Board of Directors and signed on its behalf on 11 July 2023:

Duncan Budge

Chairman

Statement of Changes in Equity

For the year ended 30 April 2023

	Share capital £'000	Share premium £'000	Special reserve £'000	Capital redemption reserve £'000	Retained earnings
	Share capital £'000	Share premium £'000	Special reserve £'000	Capital redemption reserve £'000	Revenue £'000	Capital £'000	Total £'000
For the year ended 30 April 2023
At 1 May 2022	373	676	21,964	217	3,117	97,754	124,101
Total comprehensive income:
Profit/(loss) for the year	-	-	-	-	2,226	(1,419)	807
Transactions with owners recorded directly to equity:
Repurchase of ordinary shares into treasury	-	-	(3,185)	-	-	-	(3,185)
Dividends paid	-	-	-	-	(1,906)	-	(1,906)
At 30 April 2023	373	676	18,779	217	3,437	96,335	119,817
For the year ended 30 April 2022
At 1 May 2021	382	676	40,738	208	2,788	137,036	181,828
Total comprehensive income:
Profit/(loss) for the year	-	-	-	-	2,261	(39,282)	(37,021)
Transactions with owners recorded directly to equity:
Repurchase of ordinary shares into treasury	-	-	(14,683)	-	-	-	(14,683)
Repurchase and cancellation of ordinary shares	(9)	-	(4,091)	9	-	-	(4,091)
Dividends paid	-	-	-	-	(1,932)	-	(1,932)
At 30 April 2022	373	676	21,964	217	3,117	97,754	124,101

The notes in the Annual Report form part of these financial statements.

Statement of Cash Flows

For the year ended 30 April 2023

	2023 £'000	2022 £'000
Operating activities
Profit/(loss) before tax	908	(36,903)
Interest payable	576	45
Losses on investments	4,609	30,511
Net (gains)/losses on derivatives	(4,134)	7,770
Currency (gains)/losses	(140)	16
Increase in other receivables	(6)	(56)
Decrease in accrued expenses	(12)	(96)
Net cash inflow from operating activities before interest and tax	1,801	1,287
Interest paid	(576)	(45)
Irrecoverable overseas tax suffered	(101)	(118)
Net cash inflow from operating activities	1,124	1,124
Investing activities
Purchase of investments	(24,601)	(25,087)
Sale of investments	28,584	49,583
Sale/(purchase) of derivatives	583	(6,656)
Collateral pledged/(held)	3,900	(2,800)
Net cash inflow from investing activities	8,466	15,040
Financing activities
Repurchase of ordinary shares into treasury	(3,251)	(14,617)
Repurchase and cancellation of ordinary shares	-	(4,091)
Dividends paid	(1,906)	(1,932)
Increase in intercompany loan	691	404
Net cash outflow from financing activities	(4,466)	(20,236)
Net decrease/(increase) in net funds	5,124	(4,072)
Net funds at the start of the year	2,389	6,477
Effect of foreign exchange rate changes	140	(16)
Net funds at the end of the year	7,653	2,389
Cash and cash equivalents	7,653	2,389

Notes to the Financial Statements

1. Accounting policies

The financial statements have been prepared on a going concern basis under the historical cost convention modified by the revaluation of financial assets and liabilities held at fair value through profit or loss, in accordance with UK-adopted international accounting standards ("IFRSs") which comprise standards and interpretations issued by the International Accounting Standards Board ("IASB"), as applied in accordance with the provisions of the Companies Act 2006. The principal accounting policies adopted by the Company are set out below.

Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts and venture capital trusts issued by the Association of Investment Companies ("AIC") in July 2022 is consistent with the requirements of IFRS, the financial statements have been prepared in accordance with the SORP.

The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 30 April 2023 have been applied consistently, other than where new policies have been adopted.

The financial statements are presented in Sterling, which is the currency of the primary environment in which the Company operates. All values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

2. Income

	Year ended 30 April 2023 £'000	Year ended 30 April 2022 £'000
Investment income*
UK dividend income	1,812	1,920
Overseas dividend income	662	860
	2,474	2,780
Other income
Bank interest	62	25
Derivative income	507	294
Liquidity fund income	9	-
	578	319
Total income	3,052	3,099

* All investments are designated at fair value through profit or loss on initial recognition, therefore all investment income arises on investments at fair value through profit or loss.

A number of UK quoted investments are domiciled in other countries for tax purposes.

3. Dividends paid and proposed

Set out below are the total dividends recognised in respect of the financial year ended 30 April 2023.

	Year ended 30 April 2023 £'000	Year ended 30 April 2022 £'000
2022 final dividend of 3.46p per ordinary share (2021: 3.19p)	1,140	1,189
2023 interim dividend of 2.33p per ordinary share (2022: 2.14p)	766	743
	1,906	1,932

Dividends are recognised in the period in which they are due to be paid and are shown through the Statement of Changes in Equity. Therefore, the Statement of Changes in Equity for the year ended 30 April 2023 reflects the final dividend for the year ended 30 April 2022 which was paid on 21 October 2022. For the year ended 30 April 2023, a first interim dividend of 2.33p has been paid on 26 January 2023 and a final dividend of 3.87p has been proposed for payment on 29 September 2023. The final dividend is proposed for approval by the shareholders at the forthcoming AGM.

Set out below are the total dividends paid/proposed in respect of the financial year ended 30 April 2023.

	Year ended 30 April 2023 £'000	Year ended 30 April 2022 £'000
First interim dividend of 2.33p per ordinary share (2022: 2.14p)	766	743
Final dividend of 3.87p per ordinary share (2022: 3.46p)	1,267	1,168
	2,033	1,911

4. Earnings/(loss) per share

The revenue earnings per ordinary share is based on the revenue profit for the year of £2,226,000 (2022: £2,261,000) and on 33,033,940 (2022: 35,994,478) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

The capital loss per ordinary share is based on the capital loss for the year of £1,419,000 (2022: £39,282,000) and on 33,033,940 (2022: 35,944,478) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

Share capital

(a) Share capital
	2023 Shares	2023 £'000	2022 Shares	2022 £'000
Allotted, called up and fully paid:
Ordinary shares of 1p each	32,734,908	327	33,754,674	338
Ordinary shares of 1p each held in treasury	4,525,566	45	3,505,800	35
	37,260,474	373	37,260,474	373
(b) Ordinary shares

	Shares	£'000
Movements in ordinary shares during the year:
Ordinary shares in issue on 1 May 2022	33,754,674	373
Repurchase of ordinary shares into treasury	(1,019,766)	(45)
Ordinary shares in issue on 30 April 2023	32,734,908	327

The movements in ordinary shares held in treasury during the year are as follows:

	2023 Shares	2023 £'000	2022 Shares	2022 £'000
Balance brought forward	3,505,800	35	-	-
Repurchases of ordinary shares	1,019,766	10	3,505,800	35
Balance carried forward	4,525,566	45	3,505,800	35

During the year ended 30 April 2023, the Company repurchased 1,019,766 shares into treasury (2022: 3,505,800). There were no subscription shares in issue at 30 April 2023 (2022: nil).

6. Net asset value per ordinary share

The net asset value per share is based on the net assets of £119,817,000 (2022: £124,101,000) and on 32,734,908 (2022: 33,754,674) ordinary shares, being the number of ordinary shares in issue at the year end.

7. Transactions with the Investment Manager and related parties

The amounts paid to the Investment Manager and amounts outstanding at the year end are disclosed in the Annual Report.

However, 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 IAS 24: Related Party Disclosures, the Investment Manager is not considered to be a related party.

Fees payable during the year to the Directors and their interest in shares of the Company are considered to be related party transactions and are disclosed within the Directors Remuneration Report, included in the Annual Report.

All transactions with subsidiary undertakings were on an arm's length basis. During the year, transactions in securities between the Company and its subsidiary undertakings amounted to £nil (2022: £nil). The subsidiary did not pay a dividend to Artemis Alpha Trust plc during the year to 30 April 2023 (2022: £nil). Following the increase in lending rates over the year, interest payable by Artemis Alpha Trust to Alpha Securities Trading in respect of the intercompany loan over the period is recognized.

8. Events after the reporting period

As at 11 July 2023, a further 21,756 shares had been bought back at a cost of £69,000.

9. Annual Report

This Annual Report announcement does not constitute the Company's statutory accounts for the years ended 30 April 2023 and 30 April 2022 but is derived from those accounts. Statutory accounts for the year ended 30 April 2022 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 30 April 2023 and the year ended 30 April 2022 both received an audit report which was unqualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not include statements under section 498 of the Companies Act 2006. The statutory accounts for the year ended 30 April 2023 have not yet been delivered to the Registrar of Companies and will be delivered following the Annual General Meeting.

The audited Annual Report for the year ended 30 April 2023 will be available to shareholders shortly. Copies may be obtained from the Company's registered office at Cassini House, 57-59 St James's Street, London SW1A 1LD or at the website at artemisalphatrust.co.uk.

A copy of the Annual Report will also be submitted to the FCA's National Storage Mechanism and will soon be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The Annual General Meeting of the Company will be held on Thursday, 21 September 2023 at 10:00a.m.

For further information, please contact:

Artemis Fund Managers Limited

Company Secretary

Telephone: 0131 225 7300

12 July 2023