OXFORD TECH 4
Annual Report and Accounts for the year ended
The Directors are pleased to announce the audited results of the Company for the year ended
The AGM will be held at Magdalen Centre,
A copy of the Annual Report and Accounts will be available from the registered office of the Company at Magdalen Centre,
Financial Headlines
| Year Ended | Year Ended | |
| Net Assets at Year End | £4.15m | £5.64m |
| Net Asset Value (NAV) per Share | 36.1p | 49.0p |
| Dividend paid in Year | 3.0p | 3.0p |
| Cumulative Dividend per Share | 43.0p | 40.0p |
| NAV + Cumulative Dividend per Share Paid from Incorporation | 79.1p | 89.0p |
| Share Price at Year End | 26.5p | 29.5p |
| Earnings Per Share (Basic & Diluted) | (9.9)p | 6.1p |
Chairman’s Statement
I present the Annual Report for the year to
In these unprecedented and uncertain times our thoughts are with everyone affected by the recent market and social turmoil, specifically our shareholders, the staff of our Investment Adviser and the employees of our investee companies. We hope that by the time of our AGM in July there will be some light at the end of the tunnel and greater visibility going forward.
Shareholders will appreciate that an annual report is a snapshot in time. Our year end was 29 February and shareholders will be aware that the FTSE100 had been above 7000 for the whole year up to 26 February, fell to 6700 at 29 February. It subsequently dropped to a low of 5000 on
Under the valuation rules we are required to produce valuations based on all the information that was known or should have been known to the Directors at
We have been continuously assessing the effect of this double impact. With the passage of another two months to the time of signing off this report we are beginning to get greater clarity of what it means to the investee companies and your VCT. Industry-wide the worst hit sectors have been airlines, travel, hospitality and oil whilst on the upside some biotechnology companies have found new opportunities. The rest of the portfolio has not materially changed since 29 February. Since the year end Castleton, the only listed company in the OT4 portfolio has announced an approved takeover offer from
Last year our biggest Brexit concern was the uncertainty itself, and this year, I had expected to comment on the ongoing uncertainty about the terms on which the
There has been significant other market turmoil over the last 12 months, including the closing of the
Despite all of the above, it is worth reminding ourselves that the VCT structure is an appropriate holding vehicle for unquoted companies through difficult times. Unlike unit trusts, we are under no pressure to make fire sales to meet the demand from unit holders to withdraw their cash.
Your VCT has over £200k in the bank as of mid-May, which covers about 2 years of expenses, at the current running rate, and if we do not invest further in the portfolio. Furthermore, we expect to fully realise our Castleton Technology plc holding under the current takeover offer.
Overview
Your company made a loss of 9.9p per share, with the NAV falling £1.49 million to 36.1p per share. In part this is as a result of the 3.0p dividend paid in Q1 2019, but also by significant reductions in valuations of several portfolio companies made to reflect difficult trading issues. Total Return since company launch is 79.1p per share. Your Board is not recommending the payment of a final dividend for the year ended
Whilst we anticipate the majority of our investees will be less impacted by the recent turmoil than many entities, they are by no means immune from it. All companies have now needed to react to the change in circumstances, revising their cash flow forecasts and adjusting for significantly reduced sales revenues. The Investment Adviser will help companies through this process, and if desired support them to raise additional funding where possible. The Board and Investment Adviser have sought the assess the immediate impact on valuations. Using latest bid prices, and the Directors’ normal determinants of fair value, we estimate that the NAV per share has reduced to an unaudited 34.3p (a drop of 5%) as at mid-May. Given we are in no immediate hurry to liquidate any of our holdings, we would hope some form of market normality will return before any asset sales occur.
The Board and your Investment Adviser will continue to monitor and mentor investee companies towards points of value inflection at which we can profitably exit and return funds to shareholders. This is the nature of a longer than expected life technology fund.
Portfolio Overview
The largest holding by value within the VCT is now
The second largest holding by value is
Castleton Technology plc (Castleton) remains the third largest holding at 16% of NAV and has quickly become a leading provider of integrated technology solutions within the social housing sector, with their software being used by over 600 social housing providers. Following a period of rapid growth both organic and by acquisition, Castleton paid a maiden dividend in
ImmBio (more formally known as
Valuation changes have also been made at
The Directors continue to take an active interest in the companies within the portfolio, both to support their management teams to achieve company development, but also to prepare companies for realisation at the appropriate time. It should be noted, however, that approaches do occur at other times as can be seen with Castleton and the ability of the Directors and Investment Adviser to be able to provide support when such approaches occur is essential for maximising value.
Further details are contained within the Investment Adviser’s Report, and on our website.
First Quarter Results Announcement
As mentioned in the overview section above, the Directors estimate that the NAV per share is an unaudited 34.3p as of mid-May.
At this time, and unless there are reasons to suggest conditions are not similar at the end of
Dividends/Return of Capital
An interim capital dividend of 3.0p per share was paid on
The ongoing strategy remains to seek to crystallise value from the portfolio and distribute cash to shareholders. Our priority is to maximise shareholder value and liquidity over the medium term by seeking exits for these holdings at the appropriate time but remaining mindful of the need to meet VCT and going concern tests.
VCT Market Changes
After some big changes in recent years, this has been another period of allowing the new regulatory landscape to bed in. The types of investment now allowed are of the sort in which the OT VCTs have always specialised and we continue to believe the VCT structure is well-suited to this patient approach to long term value creation. However, the VCT rules do provide additional challenges for very small VCTs, where there is very little flexibility in how to operate, and with a small portfolio, we are very severely hindered from continuing to support our own investee companies. Our VCT is not in line with the majority of the industry, which is continuing to raise funds and making new investments, and where scale is not an issue, so these policies impact us more than larger VCTs. As mentioned above, from
Covid-19 Response
The Investment Adviser has proved to be operationally resilient and financially sound during the turmoil of Covid-19. Your Board is used to working in a virtual environment and the VCT has continued to operate effectively, as evidenced by the publication of this Annual Report and Financial Statements to our normal timetable.
Your Board continues to look at methods of improving operational efficiency, reducing costs and, more generally putting in place appropriate plans to ensure that your VCT’s operational costs relative to its overall size remain within acceptable limits. Over the last 5 years we have renegotiated almost every element of cost.
Our investment management and Directors’ fees and auditors’ remuneration are amongst the lowest in the VCT industry. The largest remaining elements of cost are the LSE listing fee at almost £10k and the
Whilst your VCT remains in good structural shape, it seems prudent to take some precautionary measures. Every year we have a resolution for the shareholders to enable the Directors to raise a further 5% of shares without pre-emption rights which has been approved. This year, following guidance from the
Shareholders who might be interested in buying shares via such a placing are invited to register their potential interest by email to: vcts@oxfordtechnology.com.
AGM
We believe the meeting is likely to be a virtual meeting with limited physical attendance and no investee or Investment Adviser presentations. We will provide further updates on this by the end of June via our website. Covid-19 permitting, the Board and Investment Adviser hope to be able to host a physical event in October/November following the half year results so that shareholders can be updated and for them to hear how some of our investees have coped with this year’s disruption.
In the meantime, may I encourage you to return your proxies as early as possible. Please send in any questions you might have and we will put up a Q&A section on the website.
Please note that in accordance with new AIC guidelines all four directors are standing for annual re-election. I have no hesitation in recommending shareholders to vote for all my co-directors. All have played a very full part in the VCT’s activities throughout the year.
We also recommend the re-election of
As in previous years, we are putting forward a resolution to vote for the continuation of the VCT. The Directors do not consider this to be an appropriate time to wind up the VCT and that it would not be in shareholders’ best interests.
Finally, we have taken the opportunity to update our articles of association; Oxford Technology 2 Venture Capital Trust Plc did this 2 years ago and a very similar format has been followed. More details are shown on page 36 and on our website www.oxfordtechnologyvct.com.
A formal Notice of the AGM has been enclosed with these Financial Statements together with a Form of Proxy for those not attending. We encourage you to vote on the AGM resolutions via your proxy forms and thank you all for your ongoing support
Outlook/planning for the Future
Our company remains a small VCT (by both net assets and market cap), reducing in size as we realise investments and return proceeds to shareholders and we continue to operate on a shoestring budget. Efforts have continued throughout the year to seek a partner interested in using the existing VCT structure to launch its own share offering, and hence enabling us to expand our asset base. As I reported at the half year, we have had detailed conversations with many other prospective parties who are potentially interested in entering the VCT industry, but to date, the costs of such a launch present too high a risk for other parties to make such a move. We have always made clear that there is no certainty such a possibility can be successful but the Directors will continue seeking such opportunities when the future outlook has become clearer.
We continue to believe your VCT is an appropriate structure to hold your Company’s investments, albeit it would be preferable to have a larger asset base to share the operating costs. In the meantime, your Board continues to work so as to best provision the Company such that – when valuations and liquidity allow – holdings can be exited and proceeds distributed to shareholders.
In normal years I would conclude by expressing my thanks to all shareholders for their continuing support and looking forward to welcoming as many of you to the AGM as possible. This year I will just express a wish that you keep safe and healthy and that together we may ultimately arise stronger and more united for a future in what will undoubtedly be a different world.
Chairman
Investment Portfolio Review
OT4 was formed in 2004 and has invested in 35 companies which were start-up or early stage technology companies. Some of these companies failed with the loss of the investment. Some have succeeded and have been sold. The table on page 23 shows the companies remaining in the portfolio. A more detailed analysis is given of the major investments on the following pages. Several still have the potential to deliver significant returns and weather the storm of the current Covid-19 pandemic. OTM is working with all of the portfolio companies helping and advising them through these difficult and unprecedented times.
Arecor conducted its phase 1 trial for Ultra-Rapid Acting Insulin. The results were very good with all the desired outcomes being met. Arecor also has other insulin and non-insulin internal development programmes. Arecor also announced a new collaboration agreement with a pharma company and it has received a milestone payment for a partnered programme.
Select Technology specialises in software for photocopiers – now known as MFDs – Multi-Function Devices. Over the last decade Select Technology has built up a global network of distributors and dealers through which it sells third party products. These products now include PaperCut, KPAX, Foldr, Drivve Image, EveryonePrint and Square 9 Enterprise Content Management. Sales have increased from £210k in the year to
OT4 received shares in AIM-listed Castleton Technology Plc as part of the proceeds of sale when Castleton purchased Impact Applications in 2015. Castleton is a provider of software, services and IT infrastructure to the social, public and commercial housing sector. During the year Castleton paid its first dividend. On the 15 April, following the year end Castleton, received a recommended cash offer to acquire its shares at 95p per Castleton share. The company had been doing well, if a little behind management expectations, as 67% of its income was recurring revenues and the company was well set up to weather the Covid-19 crisis. Nonetheless for OT4, a return of 95p per Castleton share is an excellent result, and when combined with all the proceeds already received, will reflect an eight fold return from our original investment in Impact Applications.. The bid price used at the year end for these accounts was 71p.
In
Dynamic Extractions was formed as a spin-out from
Also, although the sale of HPCCC instruments remains part of the business, more of the company's effort is now devoted to using its own technology to produce valuable compounds for sale. For example, the company is able to produce 99.9% purity CBD and given the interest in CBD following the growing legalisation of cannabis products across the world it was hoped that there would be a market for high purity CBD. Disappointingly, however, this has not proved to be the case to date. Some sales have been achieved but the volumes have been low. So Dynamic Extractions is continuing to search for a high value product which it can extract or purify and sell. The technology could equally be used to remove traces of toxin or pesticide from a residue.
OT4 was the first investor in Diamond Hard Surfaces (DHS) when the company was founded in 2004. The objective was to develop a process for creating a hard diamond like coating that was superior to other similar coatings. The DHS coating is extremely hard and also has exceptionally low friction against itself. The technology is a low temperature process which can be applied to a wide range of substrate materials and geometries and is applied in sectors such as Aerospace, Oil and Gas and Electronics. Over the last few years the company has been developing a coating which has the unusual properties of being an almost perfect electrical insulator while having three times the thermal conductivity of copper. This coating has now been branded ThermaSp3c™. This coating is used as a heat sink – removing heat from chips which are working particularly hard (and therefore getting hot), principally in defence applications. DHS had a disappointing year in 2019 with sales being slightly below the levels of the year before. However,
Orthogem received a CE mark for its putty product in early 2018. Approvals for other countries were very slow to follow. Although a deal was made with a new and much larger
New Investments in the year
Follow on investment has been made into ImmBio of £67,433 in two tranches. This has complied with both EU State Aid rules and HMRC rules.
Disposals during the year
Castleton shares to the value of £491,470 were sold in
Valuation Methodology
Quoted and unquoted investments are valued in accordance with current industry guidelines that are compliant with
VCT Compliance
Compliance with the main VCT regulations as at
| Type of Investment By HMRC Valuation Rules | Actual | Target |
| VCT Qualifying Investments | 88.1% | Minimum obligation of: 70% (80% from |
| Non-Qualifying Investments | 11.9% | Maximum allowed: 30% (20% from |
| Total | 100% | 100% |
The value used in the qualifying tests is not necessarily the original investment cost due to the complex rules required by HMRC, therefore the allocation of Qualifying investments as defined by the legislation can be different to the portfolio weighting as measured by market value relative to the net assets of the VCT.
At least 70% of each investment must be in eligible shares – Complied.
No more than 15% of the income from shares and securities is retained – Complied.
No investment constitutes more than 15% of the Company’s portfolio (by value at time of investment or when the holding is added to) -– Complied.
The Company’s income in the period has been derived wholly or mainly (70% plus) from shares or securities – Complied.
No investment made by the VCT has caused the company to receive more than £5m of State Aid investment in the year, nor more than the lifetime limit of £12m – Complied.
Table of Investments
The table below shows the current portfolio holdings. The investments in
Number of shares in issue: 11,516,946
Net Asset Value per share at
Dividends per share paid to date: 43.0p
Table of Investments held by Company at
| Company | Description | Date of initial investment | Net cost of investment £’000 | Carrying value at £’000 | Change in value for the year £’000 | % equity held OT4 | % equity held by all OTVCTs | % Net Assets |
| Arecor | Protein stabilisation | 590 | 1,289 | 382 | 5.6 | 10.5 | 31.0 | |
| Photocopier Interfaces | 237 | 1,022 | (42) | 18.4 | 58.6 | 24.6 | ||
| Castleton Technologies Bid Price 71p | Mobile software for contractors | 72 | 622 | (621)* | 1.1 | 1.1 | 15.0 | |
| ImmBio | Novel vaccines | 857 | 555 | (457) | 13.0 | 22.6 | 13.4 | |
| Diamond Hard Surfaces | Diamond coatings | 640 | 135 | (202) | 49.9 | 49.9 | 3.3 | |
| Insense | Wound healing dressings | 475 | 67 | - | 2.5 | 6.8 | 1.6 | |
| Novacta | 347 | 59 | - | 2.3 | 2.3 | 1.4 | ||
| Dynamic Extractions | Separation technology | 377 | 56 | (257) | 30.4 | 30.4 | 1.3 | |
| Oxis Energy | Rechargeable batteries | 305 | 41 | (49) | 0.2 | 0.3 | 1.0 | |
| Plasma Antennas | Directional antennas | 700 | 40 | - | 30.9 | 48.8 | 1.0 | |
Bid Price 10p | Virtual product placement | - | 5 | (2) | 0.0 | 0.0 | 0.1 | |
| Metal Nanopowers | Production of nanopowers | 52 | - | - | 16.7 | 36.7 | 0.0 | |
| Superhard Materials | Very hard materials | 9 | - | - | 18.2 | 40.0 | 0.0 | |
| Totals | 4,661 | 3,891 | (1,248) | 93.7 | ||||
| Other Net Assets | 262 | 6.3 | ||||||
| NET ASSETS | 4,153 | 100.0 |
* £463k reduction related to share disposals, and £158k related to the decline during the year of the AIM share price on the shares still held at
Director –
Investment Manager
Directors’ Report
The Directors present their report together with Financial Statements for the year ended
The Directors consider that the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy.
This report has been prepared by the Directors in accordance with the requirements of s415 of the Companies Act 2006. The Company’s independent auditor is required by law to report on whether the information given in the Directors’ Report is consistent with the Financial Statements.
Principal Activity
The Company commenced business in 2004. The Company invests in start-up and early stage technology companies in general located within 60 miles of Oxford. The Company has maintained its approved status as a
Review of Business Activities
The Directors are required by section 417 of the Companies Act 2006 to include a Business Review to shareholders. This is set out on page 12 and forms part of the Strategic Report. The purpose of the Business Review is to inform members of the Company and help them assess how the Directors have performed their duty under section 172 of the Companies Act 2006 (duty to promote the success of the Company). The Company’s section 172 Statement on page 18, the Chairman's Statement on page 6 to 11, and the Investment Portfolio Review on pages 20 to 28 also form part of the Strategic Report.
Corporate Governance Statement
The Board has considered the principles and recommendations of the 2019 AIC Code as applied to companies reporting as at
The 2019 AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the 2019 AIC Code adapts the Principles and Provisions set out in the
The Company has complied with the recommendations of the 2019 AIC Code and the relevant provisions of the
- The Company does not have a Chief Executive Officer or a Senior Independent Director. The Board does not consider this necessary as it does not have any executive directors.
- New Directors do not receive a formal induction on joining the Board, though they did receive one tailored to them on an individual basis.
- The Company conducts a formal review as to whether there is a need for an internal audit function. However, the Directors do not consider that an internal audit would be an appropriate control for this VCT at this time.
- The Company does not have a Remuneration Committee as these matters are dealt with by the Board.
- The Company does not have a Nomination Committee as these matters are dealt with by the Board.
For the reasons set out in the AIC Guide, and as explained in the
Directors
The Directors of the Company are required to notify their interests under Disclosure and Transparency Rule 3.12R. The membership of the Board and their beneficial interests in the ordinary shares of the company at
Name 2020 2019
D Livesley 3,499 3,499
R Roth 44,310 44,310
A Starling Nil Nil
R Goodfellow 20,000 20,000
Under the Company’s articles of association one third of the Directors are required to retire by rotation each year. However, best practice under the latest corporate governance guidelines is for all directors to stand for election each year and as a result,
The Board is satisfied that, following individual performance appraisals, the Directors who are retiring continue to be effective and demonstrate commitment to their roles and therefore offer themselves for re-election with the support of the Board.
The Board did not identify any conflicts of interest between the Chairman’s interest and those of the shareholders, especially with regard to the relationship between the Chairman and the Investment Adviser.
The Board is cognisant of shareholders' preference for Directors not to sit on the boards of too many larger companies ("overboarding"). Shareholders will be aware that in
In addition,
Whilst great care is taken to safeguard the interests of the shareholders of each separate company, there is an element of overlap in the workload of each Director across the four OT funds due to the way the VCTs are managed. The Directors note that the workload related to the four OT funds is less than it would be for four totally separate and larger funds and are satisfied that
Investment Management Fees
Directors’ and Officers’ Insurance
The Company has maintained insurance cover on behalf of the Directors, indemnifying them against certain liabilities which may be incurred by them in relation to their duties as Directors of the Company.
Ongoing Review
The Board has reviewed and continues to review all aspects of internal governance to mitigate the risk of breaches of VCT rules or company law.
Whistleblowing
The Board has been informed that the Investment Adviser has arrangements in place in accordance with the
Bribery Act 2010
The Company is committed to carrying out business fairly, honestly and openly. The Investment Adviser has established policies and procedures to prevent bribery within its organisation. The Company has adopted a zero tolerance approach to bribery and will not tolerate bribery under any circumstance in any transaction the Company is involved in. The Company has instructed the Investment Adviser to adopt the same approach with investee companies.
Relations with Shareholders
The Company values the views of its shareholders and recognises their interest in the Company. The Company’s website provides information on all of the Company’s investments, as well as other information of relevance to shareholders (www.oxfordtechnologyvct.com/vct4.html)
Shareholders have the opportunity to meet the Board at the Annual General Meeting. In addition to the formal business of the AGM the Board is available to answer any questions a shareholder may have.
The Board is also happy to respond to any written queries made by shareholders during the course of the year and can be contacted at the Company’s registered office: Magdalen Centre,
Going Concern
The assets of the Company consist mainly of securities, two of which are AIM quoted, quite liquid and readily accessible, as well as cash. After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they have adopted the going concern basis in preparing the Financial Statements.
Share Capital
As disclosed on page 81, the Board has authority to make market purchases of the Company’s own shares. No shares were purchased by the Company during the year.
The Board has authority to allot up to 575,847 shares (representing approximately 5% of the ordinary share capital as at
The total number of Ordinary Shares of 10p each in issue at
As discussed in the Chairman’s Statement, whilst the VCT remains in good structural shape, it seems prudent to take some precautionary measures and the Board is proposing a resolution for shareholders to enable the Directors to raise a further 20% of shares without pre-emption rights this year, following guidance from the
This will provide additional flexibility, if ever required, to raise money more cheaply and at shorter notice. This would enable the Company to support investee companies (within the VCT rules) and, exceptionally, take advantage of other opportunities arising from other investees in the OT VCT stable. At the moment we have no plans to raise additional capital or to conduct a possible placing, but it seems prudent in these uncertain times to have the capability in case the Board wishes to act quickly.
As in previous years, the Board are also proposing a resolution which would enable the Company to buy back up to 10% of its own share capital. To date, the Company has never bought back any of its shares, and the Board have no current plans to use this authority in the course of the next year. The Board is also cognisant that some shareholders do not support this proposal. However, it is good practice for the Company to retain the flexibility to be able to buy back shares should the Directors think it is in shareholders’ best interests.
In accordance with Schedule 7 of the Large and Medium Size Companies and Groups (Accounts and Reports) Regulations 2008, as amended, the Directors disclose the following information:
- The Company’s capital structure and voting rights are summarised above, and there are no restrictions on voting rights nor any agreement between holders of securities that result in restrictions on the transfer of securities or on voting rights;
- There exist no securities carrying special rights with regard to the control of the Company;
- The rules concerning the appointment and replacement of Directors, amendment of the Articles of Association and powers to issue or buy back the Company’s shares are contained in the Articles of
Association of the Company and the Companies Act 2006;
- The Company does not have any employee share scheme;
- There exist no agreements to which the Company is party that may affect its control following a takeover bid; and
- There exist no agreements between the Company and its Directors providing for compensation for loss of office that may occur following a takeover bid or for any other reason
Substantial Shareholders
At
Auditors
Adoption of New Articles of Association
At the AGM, we are also seeking to adopt new articles (“New Articles”) in substitution for the current articles. The New Articles are in a form which is appropriate for a premium listed Main Market traded VCT and in conformity with the Companies Act 2006. The New Articles also include the rights attaching to a second class of shares (B Shares) to facilitate the potential to raise equity (if required) with a new manager at some point in the future. Another change proposed which reduces the nominal value of each share from 10p per share to 1p per share is a pre-cursor to enable the creation of additional distributable reserves in the future, which may allow the Company to pay out more to shareholders in time. A more detailed summary of the key differences between the current articles of the Company and the New Articles which, in the opinion of the Directors, are relevant for shareholders, is set on the Company’s website (www.oxfordtechnologyvct.com/vct4.html), as are the New Articles themselves.
A copy of the proposed New Articles is also available for inspection from the date of this Annual Report at the registered office of the Company and for at least 15 minutes prior to and during the Annual General Meeting at the place of the Annual General Meeting, Magdalen Centre,
On behalf of the Board
Chairman
Directors’ Remuneration Report
Introduction
This report has been prepared by the Directors in accordance with the requirements of the Companies Act 2006. The Company’s independent auditor,
The Directors' Remuneration Policy was last approved by shareholders at the AGM on
Shareholders also need to approve the Directors' Remuneration Report every year. It was last approved at the AGM on
Directors’ Terms of Appointment
The Board consists entirely of non-executive Directors who meet at least four times a year and on other occasions as necessary to deal with important aspects of the Company’s affairs. Directors are appointed with the expectation that they will serve for at least three years and are expected to devote the time necessary to perform their duties. All Directors retire at the first general meeting after election and thereafter every third year, with at least one Director standing for election or re-election each year. In line with best practice, all Directors will offer themselves for re-election this year.
Directors’ Remuneration Policy
The Board acts as the Remuneration Committee and meets annually to review Directors’ pay to ensure it remains appropriate given the need to attract and retain candidates of sufficient calibre and ensure they are able to devote the time necessary to lead the Company in achieving its strategy.
The articles of association of the company state that the aggregate of the remuneration (by way of fee) of all the Directors shall not exceed £50,000 per annum unless otherwise approved by Ordinary Resolution of the Company. At this year’s AGM, shareholders are being asked to approve the adoption of New Articles (see page 36), which include a proposal to increase this limit to £75,000 per annum. This revised level would be more suitable to remunerate Directors at an appropriate level for a growing fund with an additional share class, should the members of the Board not also be Directors of other funds and should the Company be successful in significantly increasing its asset base.
The following Directors’ fees are payable by the Company:
per annum
Director Base Fee £3,500
Chairman’s Supplement £2,000
Audit Committee Chairman £3,000
Audit Committee Member £1,500
The OT4 Director Fees are amongst the lowest of any VCT.
Fees are currently paid annually. The fees are not specifically related to the Directors’ performance, either individually or collectively. No expenses are paid to the Directors. There are no share option schemes or pension schemes in place, but Directors are entitled to a share of the carried interest as detailed below. The Directors may at their discretion pay additional sums in respect of specific tasks carried out by individual Directors on behalf of the Company.
The performance fee is detailed in note 3. Current Directors are entitled to benefit from any payment made, subject to a formula driven by relative lengths of service. The performance fee becomes payable if a certain cash return threshold to shareholders is exceeded – the excess is then subject to a 20% carry that is distributed to
Should any performance fee be payable at the end of the year to
Relative Spend on Directors’ Fees
The Company has no employees, so no consultation with employees or comparison measurements with employee remuneration are appropriate.
Loss of Office
In the event of anyone ceasing to be a Director, for any reason, no loss of office payments will be made. There are no contractual arrangements entitling any Director to any such payment.
Annual Remuneration Report
| Directors’ Fees | Year End (unaudited) | Year End (audited) | Year End (audited) |
| £5,500 | £5,500 | £5,500 | |
| £3,500 | £3,500 | £3,500 | |
| £6,500 | £6,500 | £6,500 | |
| £5,000 | £5,000 | £5,000 | |
| Total | £20,500 | £20,500 | £20,500 |
Income Statement
| Year Ended | Year Ended | ||||||
| Note Ref. | Revenue £’000 | Capital £’000 | Total £’000 | Revenue £’000 | Capital £’000 | Total £’000 | |
| (Loss)/gain on disposal of fixed asset investments | - | (198) | (198) | - | 185 | 185 | |
| Unrealised (loss)/gain on valuation of fixed asset investments | - | (852) | (852) | - | 617 | 617 | |
| Investment income | 2 | 19 | - | 19 | 11 | - | 11 |
| Investment management fees | 3 | (56) | - | (56) | (13) | (40) | (53) |
| Other expenses | 4 | (54) | - | (54) | (56) | - | (56) |
| Return on ordinary activities before tax | (91) | (1,050) | (1,141) | (58) | 762 | 704 | |
| Taxation on return on ordinary activities | 5 | - | - | - | - | - | - |
| Return on ordinary activities after tax | (91) | (1,050) | (1,141) | (58) | 762 | 704 | |
| Return on ordinary activities after tax attributable to equity shareholders | | (91) | (1,050) | (1,141) | (58) | 762 | 704 |
| Earnings per share – basic and diluted | 6 | (0.8)p | (9.1)p | (9.9)p | (0.5)p | 6.6p | 6.1p |
There was no other Comprehensive Income recognised during the year.
The ‘Total’ column of the Income Statement is the Profit and Loss Account of the Company, the supplementary Revenue and Capital return columns have been prepared under guidance published by the
All Revenue and Capital items in the above statement derive from continuing operations.
The Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.
The accompanying notes are an integral part of the Financial Statements.
Balance Sheet
| Year Ended | Year Ended | ||||
| Note Ref. | £’000 | £’000 | £’000 | £’000 | |
| Fixed Asset Investments at Fair Value | 7 | 3,891 | 5,366 | ||
| Debtors | 8 | 10 | 2 | ||
| Cash at Bank | 262 | 284 | |||
| Creditors | 9 | (10) | (13) | ||
| Net Current Assets | 262 | 273 | |||
| Net Assets | 4,153 | 5,639 | |||
| Called Up Share Capital | 10 | 1,152 | 1,152 | ||
| Share Premium Reserve | 813 | 813 | |||
| Unrealised Capital Reserve | 11 | (770) | 7 | ||
| Profit and Loss Account | 11 | 2,958 | 3,667 | ||
| Total Equity Shareholders’ Funds | 11 | 4,153 | 5,639 | ||
| Net Asset Value Per Share | 36.1p | 49.0p | |||
The accompanying notes are an integral part of the Financial Statements.
The statements were approved by the Directors and authorised for issue on
Chairman
Statement of Changes in Equity
| Called up Share Capital £’000 | Share Premium Reserve £’000 | Unrealised Capital Reserve £’000 | Profit & Loss Account £’000 | Total £’000 | |
| As at | 1,152 | 813 | (1,457) | 4,772 | 5,280 |
| Revenue return on ordinary activities after tax | - | - | - | (58) | (58) |
| Expenses charged to capital | - | - | - | (40) | (40) |
| Current period gains on disposal | - | - | - | 185 | 185 |
| Current period gains on fair value of investments | - | - | 617 | - | 617 |
| Prior years’ unrealised losses now realised | - | - | 847 | (847) | - |
| Dividends paid | - | - | - | (345) | (345) |
| Balance as at | 1,152 | 813 | 7 | 3,667 | 5,639 |
| Revenue return on ordinary activities after tax | - | - | - | (91) | (91) |
| Current period losses on disposal | - | - | - | (198) | (198) |
| Current period losses on fair value of investments | - | - | (852) | - | (852) |
| Prior years’ unrealised losses now realised | - | - | 75 | (75) | - |
| Dividends paid | - | - | - | (345) | (345) |
| Balance as at | 1,152 | 813 | (770) | 2,958 | 4,153 |
The accompanying notes are an integral part of the Financial Statements.
Statement of Cash Flows
| Year Ended £’000 | Year Ended £’000 | |
| Cash flows from operating activities | ||
| Return on ordinary activities before tax | (1,141) | 704 |
| Adjustments for: | ||
| Loss/(gain) on disposal of investments | 198 | (185) |
| Loss/(gain) on valuation of investments | 852 | (617) |
| (Decrease)/increase in creditors | (3) | 3 |
| Increase in debtors | (7) | - |
| Cash outflow from operating activities | (101) | (95) |
| Cash flows from investing activities | ||
| Purchase of investments | (67) | (265) |
| Disposal of investments | 491 | 842 |
| Cash inflow from investing activities | 424 | 577 |
| Cash flow from financing activities | ||
| Dividends paid | (345) | (345) |
| Cash outflow from financing activities | (345) | (345) |
| (Decrease)/increase in cash at bank | (22) | 137 |
| Opening cash and cash equivalents | 284 | 147 |
| Cash and cash equivalents at year end | 262 | 284 |
The accompanying notes are an integral part of the Financial Statements.
Notes to the Financial Statements
1. Principal Accounting Policies
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
The principal accounting policies have remained materially unchanged from those set out in the Company’s 2019 Annual Report and Financial Statements (the only change relating to investment management fees no longer being partially allocated to capital, as explained below). A summary of the principal accounting policies follows.
FRS 102 sections 11 and 12 have been adopted with regard to the Company’s financial instruments. The Company held all fixed asset investments at fair value through profit or loss. Accordingly, all interest income, fee income, expenses and gains and losses on investments are attributable to assets held at fair value through profit or loss.
The most important policies affecting the Company’s financial position are those related to investment valuation and require the application of subjective and complex judgements, often as a result of the need to make estimates about the effects of matters that are inherently uncertain and may change in subsequent periods. These are discussed in more detail below.
Going Concern
The assets of the Company consist mainly of securities, two of which are AIM quoted, quite liquid and readily accessible, as well as cash. After reviewing the Company’s forecasts and expectations, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing its Financial Statements.
Key Judgements and Estimates
The preparation of the Financial Statements requires the Board to make judgements and estimates regarding the application of policies and affecting the reported amounts of assets, liabilities, income and expenses. Estimates and assumptions mainly relate to the fair valuation of the fixed asset investments particularly unquoted investments. Estimates are based on historical experience and other assumptions that are considered reasonable under the circumstances. The estimates and the assumptions are under continuous review with particular attention paid to the carrying value of the investments.
Investments are regularly reviewed to ensure that the fair values are appropriately stated. Unquoted investments are valued in accordance with current IPEVC Valuation Guidelines, which can be found on their website at www.privateequityvaluation.com, although this does rely on subjective estimates such as appropriate sector earnings or revenue multiples, forecast results of investee companies, asset values of investee companies and liquidity or marketability of the investments held.
Although the Directors believe that the assumptions concerning the business environment and estimate of future cash flows are appropriate, changes in estimates and assumptions could result in changes in the stated values. This could lead to additional changes in fair value in the future, and in particular this could be the case in the short term if the Covid-19 lockdown is extended.
The material factors affecting the returns and net assets attributable to shareholders are the valuations of the investments and ongoing general expenses.
Functional and Presentational Currency
The Financial Statements are presented in Sterling (£). The functional currency is also Sterling (£).
Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and also include bank overdrafts.
Fixed Asset Investments
The Company’s principal financial assets are its investments and the policies in relation to those assets are set out below.
Purchases and sales of investments are recognised in the Financial Statements at the date of the transaction (trade date).
These investments will be managed and their performance evaluated on a fair value basis and information about them is provided internally on that basis to the Board. Accordingly, as permitted by FRS 102, the investments are measured as being fair value through profit and loss on the basis that they qualify as a group of assets managed, and whose performance is evaluated, on a fair value basis in accordance with a documented investment strategy. The Company's investments are measured at subsequent reporting dates at fair value.
In the case of investments quoted on a recognised stock exchange, fair value is established by reference to the closing bid price on the relevant date or the last traded price, depending upon convention of the exchange on which the investment is quoted. In the case of AIM quoted investments this is the closing bid price.
In the case of unquoted investments, fair value is established by using measures of value such as the price of recent transactions, earnings or revenue multiples, discounted cash flows and net assets. These are consistent with the IPEVC Valuation Guidelines.
Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the Income Statement and allocated to the Unrealised Capital Reserve.
In the preparation of the valuations of assets the Directors are required to make judgements and estimates that are reasonable and incorporate their knowledge of the performance of the investee companies.
Fair Value Hierarchy
Paragraph 34.22 of FRS 102 regarding financial instruments that are measured in the Balance Sheet at fair value requires disclosure of fair value measurements dependent on whether the stock is quoted and the level of the accuracy in the ability to determine its fair value. The fair value measurement hierarchy is as follows:
For Quoted Investments:
Level 1: quoted prices in active markets for an identical asset. The fair value of financial instruments traded in active markets is based on quoted market prices at the Balance Sheet date. A market is regarded as active if quoted prices are readily and regularly available, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held is the bid price at the Balance Sheet date.
Level 2: where quoted prices are not available (or where a stock is normally quoted on a recognised stock exchange that no quoted price is available), the price of a recent transaction for an identical asset, providing there has been no significant change in economic circumstances or a significant lapse in time since the transaction took place. The Company held no such investments in the current or prior year.
For investments not quoted in an active market:
Level 3: the fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.
These valuation techniques maximise the use of observable data (e.g. the price of recent transactions, earnings/revenue multiple, discounted cash flows and/or net assets) where it is available and rely as little as possible on entity specific estimates.
There have been no transfers between these classifications in the year (2019: none). The change in fair value for the current and previous year is recognised in the Income Statement.
Income
Investment income includes interest earned on bank balances and from unquoted loan note securities, and dividends. Fixed returns on debt are recognised on a time apportionment basis so as to reflect the effective yield, provided it is probable that payment will be received in due course. Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established, normally the ex dividend date.
Expenses
All expenses are accounted for on an accruals basis and are charged wholly to revenue. Historically investment management fees were charged 75% to capital and 25% to revenue. However, the Directors have determined that a more appropriate current split is to charge these fees 100% to revenue since the company is a small late life VCT no longer raising new capital. This modification to the policy has been applied this year. There is no change to the total return, nor to distributable reserves. Any applicable performance fee will continue to be charged 100% to capital. Due to the small amounts involved we have not restated the previous year.
Revenue and Capital
The revenue column of the Income Statement includes all income and revenue expenses of the Company. The capital column includes gains and losses on disposal and holding gains and losses on investments. Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the Income Statement and allocated to the appropriate capital reserve on the basis of whether they are realised or unrealised at the Balance Sheet date.
Taxation
Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the applicable 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 on an undiscounted basis in respect of all timing differences that have originated, but not reversed, at the balance sheet date, except as otherwise indicated.
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.
Financial Instruments
The Company’s principal financial assets are its investments and the policies in relation to those assets are set out above. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument.
The Company does not have any externally imposed capital requirements.
Reserves
Called up Share Capital – represents the nominal value of shares that have been issued.
Share Premium Reserve – includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from the Share Premium Reserve.
Unrealised Capital Reserve arises when the Company revalues the investments still held during the period and any gains or losses arising are credited/charged to the Unrealised Capital Reserve.
When an investment is sold, any balance held on the Unrealised Capital Reserve is transferred to the Profit and Loss Account as a movement in reserves.
The Profit and Loss Account represents the aggregate of accumulated realised profits, less losses and dividends.
Dividends Payable
Dividends payable are recognised as distributions in the Financial Statements when the Company’s liability to make payment has been established. This liability is established for interim dividends when they are declared by the Board, and for final dividends when they are approved by shareholders.
2. Investment Income
| Year Ended £’000 | Year Ended £’000 | |
| Dividends received | 19 | 11 |
| Total | 19 | 11 |
All of the Company’s income has been generated in the
3. Investment Management Fees
Investment Management Fees are accounted for on an accruals basis and are charged wholly to revenue. In the previous year, the investment management fee was charged 75% to capital.
| Year Ended £’000 | Year Ended £’000 | |
| Investment management fee | 56 | 53 |
| Total | 56 | 53 |
In the year to
A performance fee is payable to the Investment Manager once original shareholders have received a specified threshold in cash for each 100p (gross) invested. The original threshold of 100p has been increased by compounding that portion that remains to be paid to shareholders by 6% per annum with effect from
After this amount has been distributed to shareholders, each extra 100p distributed goes 80p to the shareholders and 20p to the beneficiaries of the performance incentive fee, of which
No performance fee has become due or been paid to date. Any applicable performance fee will be charged 100% to capital.
Expenses are capped at 3%, including the management fee, but excluding Directors’ fees and any performance fee.
4. Other Expenses
All expenses are accounted for on an accruals basis. All expenses are charged through the income statement except as follows:
- those expenses which are incidental to the acquisition of an investment are included within the cost of the investment;
- expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment.
| Year Ended £’000 | Year Ended £’000 | |
| Directors’ remuneration | 21 | 21 |
| Auditors’ remuneration | 9 | 8 |
| London Stock Exchange Fees | 10 | 9 |
| FCA Fees | 6 | 6 |
| Other expenses | 8 | 12 |
| Total | 54 | 56 |
5. Tax on Ordinary Activities
Corporation tax payable at 19.0% (2019: 19.0%) is applied to profits chargeable to corporation tax, if any. The corporation tax charge for the period was £ nil (2019: £ nil).
| Year Ended £’000 | Year Ended £’000 | |
| Return on ordinary activities before tax | (1,141) | 704 |
| Current tax at standard rate of taxation | (217) | 134 |
| (4) | (2) | |
| Unrealised losses/(gains) not taxable | 162 | (117) |
| Realised losses/(gains) not taxable | 38 | (35) |
| Excess management expenses carried forward | 21 | 20 |
| Total current tax charge | - | - |
Unrelieved management expenses of £2,352,365 (2019: £2,242,461) remain available for offset against future taxable profits.
6. Earnings per Share
The calculation of earnings per share (basic and diluted) for the period is based on the net loss of £1,141,000 (2019: profit of £704,000) attributable to shareholders divided by the daily weighted average number of shares 11,516,946 (2019: 11,516,946) in issue during the period.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant. The basic and diluted earnings per share are therefore identical.
7. Investments
| AIM quoted investments Level 1 £’000 | Unquoted investments Level 3 £’000 | Total investments £’000 | |
| Valuation and net book amount: Book cost as at | 115 | 5,244 | 5,359 |
| Cumulative revaluation to | 1,135 | (1,128) | 7 |
| Valuation at | 1,250 | 4,116 | 5,366 |
| Movement in the year: | |||
| Purchases at cost | - | 67 | 67 |
| Disposals - cost | (43) | (722) | (765) |
| Disposals – revaluation | (420) | 495 | 75 |
| Revaluation in year | (160) | (692) | (852) |
| Valuation at | 627 | 3,264 | 3,891 |
| Book cost at | 72 | 4,589 | 4,661 |
| Cumulative revaluation to | 555 | (1,325) | (770) |
| Valuation at | 627 | 3,264 | 3,891 |
All investments are initially measured at their transaction price. Subsequently, at each reporting date, the investments are valued at fair value through profit and loss, and all capital gains or losses on investments are so measured.
The changes in fair value of such investments recognised in these Financial Statements are treated as unrealised holding gains or losses.
The Company also holds 100% of the issued share capital of
Results of the subsidiary undertaking for the year ended
| Country of Registration | Nature of Business | Turnover | Retained profit/loss | Net Assets | |
| Investment Manager | £56,393 | £0 | £1 |
Consolidated group Financial Statements have not been prepared as the subsidiary undertaking is not considered to be material for the purpose of giving a true and fair view. The Financial Statements therefore present only the results of
8. Debtors
£’000 | £’000 | |
| Prepayments, accrued income & other debtors | 10 | 2 |
| Total | 10 | 2 |
9. Creditors
£’000 | £’000 | |
| Creditors and accruals | 10 | 13 |
| Total | 10 | 13 |
10. Share Capital
£’000 | £’000 | |
| Allotted, called up and fully paid: 11,516,946 (2019: 11,516,946) ordinary shares of 10p each | 1,152 | 1,152 |
11. Reserves
When the Company revalues its investments during the period, any gains or losses arising are credited/charged to the Income Statement. Changes in fair value of investments are then transferred to the Unrealised Capital Reserve. When an investment is sold any balance held on the Unrealised Capital Reserve is transferred to the Profit and Loss Account as a movement in reserves.
Distributable reserves are £2,188,000 as at
Reconciliation of Movement in Shareholders’ Funds
£’000 | £’000 | |
| Shareholders’ funds at start of year | 5,639 | 5,280 |
| Return on ordinary activities after tax | (1,141) | 704 |
| Dividends paid | (345) | (345) |
| Shareholders’ funds at end of year | 4,153 | 5,639 |
12. Capital Commitments
The Company had no commitments at
13. Related Party Transactions
14. Financial Instruments
The Company’s financial instruments comprise equity and loan note investments, cash balances and debtors and creditors. The Company holds financial assets in accordance with its investment policy of investing mainly in a portfolio of VCT – qualifying unquoted securities whilst holding a proportion of its assets in cash or near cash investments in order to provide a reserve of liquidity. The risk faced by these instruments, such as interest rate risk or liquidity risk is considered to be minimal due to their nature. All of these are carried in the accounts at fair value.
The Company’s strategy for managing investment risk is determined with regard to the Company’s investment objective. The management of market risk is part of the investment management process and is a central feature of venture capital investment. The Company’s portfolio is managed with regard to the possible effects of adverse price movements and with the objective of maximising overall returns to shareholders.
Investments in unquoted companies, by their nature, usually involve a higher degree of risk than investments in companies quoted on a recognised stock exchange, though the risk can be mitigated to a certain extent by diversifying the portfolio across business sectors and asset classes, though VCT rules limit the extent to which suitable Qualifying investments can be bought or sold.
The Company’s portfolio is concentrated for various reasons, including the age of the VCT, exits within the portfolio and the Company’s policy of seeking to return excess capital to shareholders. No new funds have been raised since 2010. No investments in new portfolio companies have been made since 2015. The overall disposition of the Company’s assets is regularly monitored by the Board.
Classification of financial instruments
The Company held the following categories of financial instruments, all of which are included in the balance sheet at fair value, at
£’000 | £’000 | |
| Financial assets at fair value through profit or loss | ||
| Fixed asset investments | 3,891 | 5,366 |
| Total | 3,891 | 5,366 |
| Financial assets measured at amortised cost | ||
| Cash at bank and in hand | 262 | 284 |
| Debtors | 10 | 2 |
| Total | 272 | 286 |
| Financial liabilities measured at amortised cost | ||
| Creditors | - | - |
| Accruals | 10 | 13 |
| Total | 10 | 13 |
Fixed asset investments (see note 7) are valued at fair value. Unquoted investments are carried at fair value as determined by the Directors in accordance with current venture capital industry guidelines. The fair value of all other financial assets and liabilities is represented by their carrying value in the balance sheet. The Directors believe that the fair value of the assets held at the year-end is equal to their book value.
The Company’s creditors and debtors are initially recognised at fair value, which is usually the transaction price, and then thereafter at amortised cost.
15. Financial Risk Management
In carrying on its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The most significant types of financial risk facing the Company are market risk, credit risk and liquidity risk.
The Company's approach to managing these risks is set out below together with a description of the nature and amount of the financial instruments held at the Balance Sheet date. In addition, the Board considers that the impact of Covid-19 presents an additional risk that is worth flagging separately.
Market risk
The Company’s strategy for managing investment risk is determined with regard to the Company’s investment objective, as outlined on page 5. The management of market risk is part of the investment management process. The Company's portfolio is managed with regard to the possible effects of adverse price movements and with the objective of maximising overall returns to shareholders in the medium term. Investments in unquoted companies, by their nature, usually involve a higher degree of risk than investments in companies quoted on a recognised stock exchange, though the risk can be mitigated to a certain extent by diversifying the portfolio across business sectors and asset classes. The overall disposition of the Company's assets is regularly monitored by the Board.
Details of the Company’s investment portfolio at the Balance Sheet date are set out on pages 20 to 28.
78.6% (2019: 72.9%) by value of the Company’s net assets comprise investments in unquoted companies held at fair value. The valuation methods used by the Company include the price of recent transactions, earnings or revenue multiples, discounted cashflows and net assets. A 10% overall increase in the valuation of the unquoted investments at
15.1% (2019: 22.2%) by value of the Company’s net assets comprises equity securities quoted on AIM. A 10% increase in the bid price of these securities as at
Credit risk
There were no significant concentrations of credit risk to counterparties at
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Board carries out a regular review of counterparty risk. The carrying values of financial assets represent the maximum credit risk exposure at the Balance Sheet date.
Liquidity risk
The Company’s financial assets include investments in unquoted equity securities which are not traded on a recognised stock exchange and which generally are illiquid.
They also include investments in AIM-quoted companies, which, by their nature, involve a higher degree of risk than investments on the main market. As a result, the Company may not be able to realise some of its investments in these instruments quickly at an amount close to their fair value in order to meet its liquidity requirements.
The Company’s liquidity risk is managed and monitored on a continuing basis by the Board in accordance with policies and procedures laid down by the Board.
Covid-19 risk
At the time of writing there remains significant uncertainty with regard to the lasting effects on the world economy of Covid-19 although it is clear that
16. Control
17. Events after the Balance Sheet Date
As referred to in the Chairman’s Statement, the financial implications of the Covid 19 pandemic only really started to become apparent post the Balance Sheet date. Under the valuation rules we are required to produce valuations based on all the information that was known or should have been known to the Directors at
The Board and Investment Adviser have sought to assess the impact on valuations at mid-May. Using latest bid prices, and the Directors’ normal determinants of fair value, we estimate that the NAV per share has reduced to an unaudited 34.3p (a drop of 5%) as at mid-May, mainly due to falls in the valuation of Select Technology and ImmBio offset by an increase in Castleton as explained below. This change has been treated as an unadjusting Event after the Balance Sheet Date, since the major impacts of Covid-19 on
On the
As highlighted on page 27, ImmBio had made 3 vaccine grant applications at the end of 2019: in two of them, active discussions with the grant award bodies have continued post year end. Unfortunately, in
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014
Company Number: 5038854
Note to the announcement:
The financial information set out in this announcement does not constitute statutory accounts as defined in the Companies Act 2006 ("the Act"). The Balance Sheet as at
The Annual Report and Accounts for the year ended
Copies of the documents will be submitted to the National Storage Mechanism and are available for inspection at: http://www.mornningstar.co.uk/uk/NSM
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