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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Thames Ventures Vct 2 Plc | LSE:D467 | London | Ordinary Share | GB00BWX53D91 | DP67 ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 14.00 | 9.00 | 19.00 | 14.00 | 13.50 | 14.00 | 4,951 | 08:00:19 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investment Advice | -6.02M | -7.66M | -0.0777 | -12.81 | 98.05M |
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TIDMD467
Downing FOUR VCT plc
LEI: 21380035MV1VRYEXPR95
Final Results for the year ended 31 March 2019
25 July 2019
FINANCIAL HIGHLIGHTS
31 March 31 March
2019 2018
pence pence
DSO D Share pool
Net Asset Value per DSO D Share 27.8 54.4
Cumulative distributions 76.5 52.5
Adjusted for Performance Incentive estimate (3.9) (4.4)
-------- --------
Total Return per DSO D Share 100.4 (1) 102.5
======== ========
DP67 Share pool
Net Asset Value per DP67 Share 48.5 50.0
Cumulative distributions (since original launch) 49.8 49.8
Total Return per DP67 Share 98.3 99.8
======== ========
DP2011 General Share pool
Net Asset Value per DP2011 General Ordinary Share - -
Net Asset Value per DP2011 General A Share 13.3 20.3
Cumulative distributions (since original launch) 92.0 85.0
Total Return per DP2011 General Ordinary Share and
DP2011 General A Share 105.3 (2) 105.3
======== ========
DP2011 Structured Share pool
Net Asset Value per DP2011 Structured Ordinary Share - -
Net Asset Value per DP2011 Structured A Share 9.9 15.0
Cumulative distributions (since original launch) 95.0 90.0
Total Return per DP2011 Structured Ordinary Share
and DP2011 Structured A Share 104.9 (3) 105.0
======== ========
Generalist Share pool
Net Asset Value and Total Return per Generalist Share 83.5 95.5
======== ========
Healthcare Share pool
Net Asset Value and Total Return per Healthcare Share 83.3 94.6
======== ========
(1) Based on Total Return to Shareholders at 31 March 2019, a
Performance Incentive is expected to become due to management. The
Performance Incentive has been estimated at 3.9p per DSO D Share.
(2) The Total Return to Shareholders at 31 March 2019 is shown net of
the Performance Incentive due to management. By virtue of the A Share
dividends paid to date, members of the management team have received
Performance Incentive payments, to date, equivalent to 3.1p per DP2011
General Ordinary Share. The remaining Performance Incentive, expected to
become payable to management, has been estimated at 2.4p per DP2011
General Ordinary Share.
(3) The Total Return to Shareholders at 31 March 2019 is shown net of
the Performance Incentive due to management. By virtue of the A Share
dividends paid to date, members of the management team have received
Performance Incentive payments, to date, equivalent to 3.6p per DP2011
Structured Ordinary Share. The remaining Performance Incentive, expected
to become payable to management, has been estimated at 1.7p per DP2011
Structured Ordinary Share.
CHAIRMAN'S STATEMENT
Introduction
I present the Company's Annual Report for the year ended 31 March 2019.
We have seen further progress in the realisation of the remaining
investments in the planned exit share pools, ahead of making final
distributions to Shareholders. The Manager has also continued to make
good progress in investing the proceeds of the 2016/17 and 2018/19
Generalist and Healthcare fundraisings.
Share pool review
As at 31 March 2019 the Company had six active Share pools, being four
planned exit pools, which we expect will have completed the process of
returning funds to Shareholders by the end of this calendar year, and
two evergreen pools. Brief reviews of the Share pools which were active
during the year are given below.
Planned Exit Share pools
DSO D Share pool
During the year the Manager made further progress in exiting from the
remaining investments held by the DSO D Share pool. Exit plans are in
place for the six investments held at the year end, and we expect the
final realisations to take place in the coming months.
The DSO D Share NAV stood at 27.8p at the year end, a decrease of 2.6p
per Share or 4.8% over the year after adjusting for the dividend of
24.0p per Share paid in the year. Total Return now stands at 100.4p per
Share, after adjusting for the expected Performance Incentive of 3.9p.
The cost for Shareholders who invested in the DSO D Share offer was
100.0p, or 70.0p per Share net of income tax relief.
A more detailed review of the DSO D Share pool is included in the
Investment Manager's Report on page 7 of the Annual Report.
DP67 Share pool
During the year the Manager continued to work on exiting from the
remaining investments held by the DP67 Share pool. Whilst a limited
number of realisations took place during the year, exit plans are in
place for all of the investments held at the year end, and we expect the
final realisations to take place in the coming months.
The DP67 Share NAV stood at 48.5p at the year end, a decrease of 1.5p
per Share or 3.0% over the year. Total Return now stands at 98.3p per
Share, compared to the original cost for Shareholders who invested in
2007 of 100.0p, or 70.0p net of income tax relief.
A more detailed review of the DP67 Share pool is included in the
Investment Manager's report on page 13 of the Annual Report.
DP2011 General Share pool
The Manager continued the process of exiting from the remaining
investments during the year. All of the investments held at the year-end
have a clear path to exit and we expect to be in a position to make a
final return of capital to Shareholders during the summer.
The NAV of a combined holding of one DP2011 General Ordinary Share and
one DP2011 General A Share stood at 13.3p at 31 March 2019. The combined
NAV has therefore remained unchanged from 31 March 2018, after adjusting
for dividends paid during the year, of 7.0p per combined holding. Total
Return now stands at 105.3p per Share, compared to the cost for
Shareholders of 100.0p, or 70.0p net of income tax relief.
A more detailed review of the DP2011 General Share pool is presented in
the Investment Manager's report on page 18 of the Annual Report.
DP2011 Structured Share pool
The Manager continued the process of exiting from the remaining
investments during the year. All of the investments held at the year-end
have a clear path to exit and we expect to be in a position to make a
final return of capital to Shareholders during the summer.
The NAV of a combined holding of one DP2011 Structured Ordinary Share
and one DP2011 Structured A Share stood at 9.9p at the year end, a
decrease of 0.1p or 0.7% for the year after adjusting for the dividends
paid during the year, of 5.0p per combined holding. Total Return now
stands at 104.9p per Share, compared to the cost for Shareholders of
100.0p or 70.0p net of income tax relief.
A more detailed review of the DP2011 Structured Share pool is presented
in the Investment Manager's Report on page 23 of the Annual Report.
Evergreen Share pools
Generalist Share pool
The first Generalist fundraising launched in December 2016 and closed
during 2018, having raised GBP32.2 million. The subsequent Generalist
Offer launched on 13 November 2018 and has raised a further GBP10.7
million to date. The cost for Shareholders who invested under the
initial offer was 100.0p or 70.0p net of income tax relief.
The Manager has built a pipeline of suitable investment opportunities
and made a number of initial and follow on investments, totalling
GBP10.9 million, into a variety of VCT Qualifying entities during the
year.
The Generalist Share NAV and Total Return stood at 83.5p at the year end,
representing a decrease of 12.0p per Share or 12.6% over the year. The
decrease in the NAV is attributable to a combination of factors. The
most significant is the fall in value of the Liquidity investments,
which have been impacted by the adverse global market conditions in the
final quarter of 2018. The second factor is the cumulative impact of the
provisions required in the Venture Capital portfolio, and in particular
Ormsborough Limited and Glownet Limited.
As the Board and Manager anticipated when the Generalist Share pool was
launched, there have been some businesses for which valuation reductions
have been recognised at what is an early stage in the life of the Share
pool. A typical feature of investing in young growth companies is that
the weaker businesses in a portfolio tend to become visible before the
stronger businesses prove themselves as such. It is therefore no
surprise that some investments in the Generalist Share pool have
underperformed and provisions have been made accordingly. The Manager
continues to work closely with the management teams of all of the
Generalist Share pool's unquoted investments and believes that a number
of these businesses have the potential to deliver good rewards to
investors over time. Additionally, the Share pool held a sizable cash
balance during the year, representing funds awaiting investment. As
these funds were yet to be deployed into VCT Qualifying investments no
income or capital growth could be achieved thereon.
A more detailed review of the Generalist Share pool is included in the
Investment Manager's Report on page 28 of the Annual Report.
Healthcare Share pool
The first Healthcare fundraising launched in December 2016 and closed
during 2018, having raised GBP12.6 million. The subsequent Healthcare
Offer launched on 13 November 2018 and has raised a further GBP4.9
million to date.
The Manager has been working on sourcing investment opportunities and
has made good progress in this regard, having invested GBP4.9 million in
six VCT Qualifying entities during the year.
The Healthcare Share NAV and Total Return stood at 83.3p at the year end,
representing a decrease of 11.3p per Share or 11.9% over the year. As
with the Generalist Share Pool, the decrease in the NAV is attributable
to several factors. Valuation adjustments in the Venture Capital
portfolio have been the single largest factor, with significant
provision required against ADC Biotechnology and a drifting share price
for AIM-quoted Destiny Pharma plc. The Share pool has also been
impacted by falls in the value of the Liquidity investments and the
"cash-drag" of holding uninvested funds.
A more detailed review of the Healthcare Share pool is included in the
Investment Manager's Report on page 38 of the Annual Report.
Share buybacks
In the initial five-year period of each Share class, the Company
operates a policy of buying in its own Shares that become available in
the market, subject to regulatory and liquidity factors. Any such
purchases are undertaken at a price approximately equal to NAV (i.e. at
a nil discount).
As the planned exit Share pools have all initiated the process of
returning funds to Shareholders, the Company will not undertake any
further buybacks in respect of those Share classes.
The policy for buying in Shares is still in operation for the Generalist
and Healthcare Shares.
14,400 Generalist Shares were purchased during the year ended 31 March
2019.
Annual General Meeting ("AGM")
The Company's ninth AGM will be held at 6th Floor, St. Magnus House, 3
Lower Thames Street, London, EC3R 6HD at 12:30 p.m. on 10 September
2019.
Resolution 9 is a special resolution seeking to renew the authority to
allow the Company to make market purchases of its Shares.
Outlook
The remaining planned exit share pools are expected to complete their
respective exit processes in the coming months and the Manager will work
to ensure that remaining funds are promptly returned to Shareholders
thereafter.
The focus of the Manager will also be on further building the Generalist
and Healthcare investment portfolios and we expect new investment
activity to continue at a similar rate during the year ended 31 March
2020. As many companies in the portfolio are young, we expect it to be
some time before the stronger prospects can deliver any rewards for
investors. We also expect that some investments may not be able to meet
their plans and the Manager may therefore decide not to support them
further.
I look forward to reporting on developments in the Half-Yearly Report to
30 September 2019.
Sir Aubrey Brocklebank
Chairman
INVESTMENT MANAGER'S REPORT - DSO D SHARE POOL
Introduction
The five-year anniversary of the DSO D Share pool has passed and the
process of realising the investments and returning funds to Shareholders
is underway.
Net Asset Value and results
The Net Asset Value ("NAV") per DSO D Share at 31 March 2019 stood at
27.8p, a decrease of 2.6p or 4.8% over the year after adjusting for
dividends paid. Total Return stands at 100.4p per share compared to
initial cost to Shareholders, net of income tax relief, of 70.0p per
Share.
The loss on ordinary activities after taxation for the year was
GBP207,000 (2018: profit of GBP453,000), comprising a revenue loss of
GBP49,000 (2018: profit of GBP57,000) and a capital loss of GBP158,000
(2018: gain of GBP396,000).
Venture Capital investments
As at 31 March 2019, the DSO D Share Pool held six Venture Capital
investments with a total value of GBP1.3 million.
Portfolio activity
Four investments were fully exited during the year, generating total
proceeds of GBP2.3 million and a gain over opening value of GBP214,000.
The largest realisation was the sale of Goonhilly Earth Station Limited,
the owner of the Goonhilly Satellite Earth Station in Cornwall. The sale
generated proceeds of GBP878,000 for the DSO D Share pool, resulting in
a gain over cost and opening value of GBP163,000.
Merlin Renewables Limited, the owner and operator of an Anaerobic
Digestion plant in Doncaster, was also sold during the year. The sale
achieved proceeds of GBP770,000 for the DSO D Share pool, realising a
gain over cost of GBP270,000.
The other substantial exit was from Nightjar Sustainable Power Limited,
the owner and operator of a hydroelectric scheme in Scotland. A
refinancing generated proceeds of GBP600,000 and resulted in a gain over
cost of GBP115,000.
The DSO D Share pool also exited in full from Fubar Stirling Limited, a
Scottish licensed leisure company. The loan note investment was being
repaid over time and the GBP8,000 received marks the final instalment
from the company. The Loss over cost of GBP118,000 is in relation to the
equity interest in the company, to which no value ultimately accrued.
Portfolio valuation
During the year, the carrying value of the DSO D portfolio was reduced
in value by GBP355,000.
Apex Energy Limited, the owner of a standby electricity generation plant,
has experienced some significant technical problems in respect of its
engines which have taken the site out of operation. The DSO D investment
has been written down by GBP360,000 as a result.
Other portfolio valuation movements amounted to a net uplift of
GBP5,000.
Outlook
The focus for the DSO D Share pool is now on realising the remaining
investments. We anticipate that the remaining realisations will take
place in the coming months and further dividends will be declared once
this process has been completed.
Downing LLP
REVIEW OF INVESTMENTS - DSO D SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:
Valuation
movement % of
Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000
Venture Capital investments
Lambridge Solar Limited 500 605 (21) 27.4%
Pearce and Saunders Limited 300 376 76 17.0%
Fresh Green Power Limited 189 210 (21) 9.5%
Green Energy Production UK Limited 100 51 (29) 2.3%
Apex Energy Limited 400 40 (360) 1.8%
Pearce and Saunders DevCo Limited* 20 20 - 0.9%
-------- --------- --------- ----------
1,509 1,302 (355) 58.9%
======== =========
Cash at bank and in hand 910 41.1%
--------- ----------
Total investments 2,212 100.0%
========= ==========
* non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2019
DISPOSALS
Valuation Profit/(loss) Realised
Cost at 01/04/18 Proceeds vs. cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture Capital
investments
Merlin Renewables
Limited 500 719 770 270 51
Goonhilly Earth
Station Limited 715 715 878 163 163
Nightjar Renewables
Limited 485 600 600 115 -
Fubar Stirling
Limited 126 8 8 (118) -
1,826 2,042 2,256 430 214
======= ============ ========= ============= ========
INVESTMENT MANAGER'S REPORT - DP67 SHARE POOL
Introduction
The DP67 Share pool has now passed the five-year anniversary for those
investors who took advantage of the Share Realisation and Reinvestment
Scheme in 2013. Accordingly, the process of realising the investment
portfolio and returning funds to investors is underway.
Net Asset Value and results
The Net Asset Value ("NAV") per DP67 Share at 31 March 2019 stood at
48.5p, a decrease of 1.5p or 3.0% over the year. Total Return stands at
98.3p per share compared to initial cost to Shareholders, net of income
tax relief, of 70.0p per Share.
The loss on ordinary activities after taxation for the year was
GBP166,000 (2018: profit of GBP652,000), comprising a revenue profit of
GBP127,000 (2018: GBP20,000) and a capital loss of GBP293,000 (2018:
gain of GBP632,000).
Venture Capital investments
As at 31 March 2019, the DP67 Share pool held a portfolio of six Venture
Capital investments, with a total value of GBP3.6 million.
Portfolio activity
One full and one partial divestment took place during the year,
generating proceeds of GBP689,000 and a total gain over opening value of
GBP41,000.
The largest realisation was the sale of Oak Grove Renewables Limited,
the owner of an Anaerobic Digestion Plant in Norfolk. The sale achieved
proceeds of GBP502,000, representing a gain over opening value of
GBP10,000.
GBP187,000 was also received from Snow Hill Developments LLP. The DP67
Share pool has a membership interest in the business under which a fixed
return accrues. The disposal marks the return of some of this fixed
value to the Share pool. The investment in Snow Hill Developments LLP
was also uplifted by GBP67,000 as at 31 March 2019, as the effect of
discounting the future cash receipts continues to unwind over time.
Portfolio valuation
The DP67 portfolio was reduced in value by a total of GBP413,000 during
the period.
The majority of the total valuation reduction is attributable to Yamuna
Energy Limited, the owner and operator of a wood pelleting plant in
Austria. The site experienced two fires during the year which halted
production and led to a loss of key customers. Downing is working with
the management team at present, however it is unlikely that any value
will be recovered and the investment has been fully provided against as
a result.
London City Shopping Centre Limited has also been reduced to GBPnil as
the company was unable to secure the finance it required in order to
progress with its development plans.
A Valuation uplift of GBP19,000 was also recognised in respect of Fenkle
Street LLP, as the impact of discounting the expected future cash flows
unwinds over time.
Outlook
The focus for the DP67 Share pool is now on realising the remaining
investments. We anticipate that the remaining realisations will take
place in the coming months and further dividends will be declared once
this process has been completed.
Downing LLP
REVIEW OF INVESTMENTS - DP67 SHARE POOL
The following investments were held at 31 March 2019:
Valuation
movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital investments
Cadbury House Holdings Limited 1,409 1,613 - 33.4%
Snow Hill Developments LLP** 474 741 67 15.4%
Fenkle Street LLP** 405 697 19 14.4%
Gatewales Limited* 343 527 - 10.9%
Yamuna Renewables Limited 400 - (400) 0.0%
London City Shopping Centre
Limited** 99 - (99) 0.0%
3,130 3,578 (413) 74.1%
======== ==========
Cash at bank and in hand 1,251 25.9%
--------- ----------
Total investments 4,829 100.0%
========= ==========
*partially qualifying investment
**non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2019
DISPOSALS
(Loss)/
Valuation profit Realised
Cost at 01/04/18 Proceeds vs. cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture Capital
investments
Oak Grove Renewables
Limited 820 492 502 (318) 10
Snow Hill Developments
LLP** 110 156 187 77 31
930 648 689 (241) 41
======= ============ ======== ========= ========
*partially qualifying investment
**non-qualifying investment
INVESTMENT MANAGER'S REPORT - DP2011 GENERAL SHARE POOL
Introduction
The DP2011 General Share pool has made good progress in realising
investments, with two full and two partial exits completed during the
year.
Net Asset Value and results
The combined Net Asset Value ("NAV") of one DP2011 General Ordinary
Share and one DP2011 General A Share at 31 March 2019 stood at 13.3p,
which has remained unchanged from 31 March 2018, after adjusting for
dividends paid. Total Return stands at 105.3p per share compared to an
initial cost to Shareholders, net of income tax relief, of 70.0p per
Share.
The profit on ordinary activities after taxation for the year was
GBP4,000 (2018: GBP760,000) comprising a revenue loss of GBP47,000
(2018: of GBP112,000) and a capital gain of GBP51,000 (2018:
GBP872,000).
Venture Capital investments
The DP2011 General Share pool began the year with GBP2.2 million of
investments and ended with GBP1.9 million spread across a portfolio of
five Venture Capital investments.
Investment activity
The process of exiting investments in the portfolio is underway. Two
full and two partial exits occurred during the year, generating proceeds
of GBP419,000 and a gain over opening value of GBP38,000.
The largest realisation was the sale of Oak Grove Renewables Limited,
the owner of an Anaerobic Digestion Plant in Norfolk. The sale achieved
proceeds of GBP254,000, representing a gain over opening value of
GBP5,000.
GBP141,000 was also received from Snow Hill Developments LLP. The DP2011
General Share pool has a membership interest in the business under which
a fixed return accrues. The disposal marks the return of some of this
fixed value to the Share pool. The investment in Snow Hill Developments
LLP was also uplifted by GBP138,000 as at 31 March 2019, as the effect
of discounting the future cash receipts continues to unwind over time.
The residual investments in Fubar Stirling and Mosaic Spa & Leisure
Limited were also exited in full during the year. The loan notes
investments were being repaid over time and the amounts received during
the year constitute the final settlements. The loss over cost in respect
of Fubar Stirling Limited relates to the equity interest in the company,
to which no value ultimately accrued.
Portfolio valuation
During the year, the carrying value of the DP2011 General portfolio was
increased in value by GBP33,000.
Wickham Solar Limited owns a portfolio of ground mounted solar panels in
Lincolnshire. The company is performing to budget and an uplift of
GBP10,000 was recognised in the year as a result.
London City Shopping Centre Limited has been reduced to GBPnil, as the
company was unable to secure the finance it required in order to
progress with its plans.
The DP2011 General Share pool's interest in Mosaic Spa and Health Clubs
Limited has also been reduced in value, by GBP27,000, as the business is
behind on its loan repayments.
Outlook
The focus for the Share pool is on realising the remaining investments
at sensible valuations. We hope to be in a position to announce a final
distribution to Shareholders during the summer.
Downing LLP
REVIEW OF INVESTMENTS - DP2011 GENERAL SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:
Valuation
Movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital investments
Snow Hill Developments LLP** 680 1,206 138 48.5%
Wickham Solar Limited 550 660 10 26.5%
Mosaic Spa and Health Clubs
Limited* 86 29 (27) 1.2%
Odysian (Holdings) Limited 233 - - 0.0%
London City Shopping Centre
Limited** 88 - (88) 0.0%
-------- --------- ---------- ----------
1,637 1,895 33 76.2%
======== ==========
Cash at bank and in hand 594 23.8%
--------- ----------
Total investments 2,489 100.0%
========= ==========
*partially qualifying investment
**non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2019
DISPOSALS
Valuation (Loss)/profit Realised
Cost at 01/04/18 Proceeds vs. cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture Capital
investments
Oak Grove Renewables
Limited 400 254 259 (141) 5
Snow Hill
Developments LLP 70 110 141 71 31
Fubar Stirling
Limited 133 9 9 (124) -
Mosaic Spa and
Health Clubs
Limited* 10 8 10 - 2
613 381 419 (194) 38
======= ============ ======== ============= ========
*partially qualifying investment
INVESTMENT MANAGER'S REPORT - DP2011 STRUCTURED SHARE POOL
Introduction
The DP2011 Structured Share pool has made good progress during the year
in realising investments, with one full exit and two partial exits
having been completed.
As at 31 March 2019 the DP2011 Structured Share pool held a portfolio of
three Venture Capital investments, with a total value of GBP0.7 million.
Net Asset Value and results
The Net Asset Value ("NAV") of a combined holding of one DP2011
Structured Ordinary Share and one DP2011 Structured A Share at 31 March
2019 stood at 9.9p, a decrease of 0.1p or 0.7% over the year after
adjusting for dividends paid. Total Return stands at 104.9p per share
compared to an initial cost to Shareholders, net of income tax relief,
of 70.0p per Share.
The loss on ordinary activities after taxation for the year was
GBP26,000 (2018: profit of GBP405,000), comprising a revenue loss of
GBP19,000 (2018: profit of GBP91,000) and a capital loss of GBP7,000
(2018: GBP496,000).
Venture Capital investments
Investment activity
The DP2011 Structured Share pool began the year with GBP1.0 million of
investments and ended the year with GBP0.7 million spread across a
portfolio of three Venture Capital investments.
One full and two partial disposals were made during the year, generating
total proceeds of GBP366,000 and a total realised gain of GBP8,000.
The largest realisation was the sale of Oak Grove Renewables Limited,
the owner of an Anaerobic Digestion Plant in Norfolk. The sale achieved
proceeds of GBP353,000, representing a gain over opening value of
GBP6,000.
The residual investments in Fubar Stirling and Mosaic Spa & Leisure
Limited were also exited in full during the year. The loan notes
investments were being repaid over time and the amounts received during
the year constitute the final settlements. The loss over cost in respect
of Fubar Stirling Limited relates to the equity interest in the company,
to which no value ultimately accrued.
Portfolio valuation
Valuation movements in the year resulted in a net reduction of GBP8,000.
Wickham Solar Limited owns a portfolio of ground mounted solar panels in
Lincolnshire. The company is performing to budget and an uplift of
GBP10,000 was recognised in the year as a result.
The DP2011 Structured Share pool's interest in Mosaic Spa and Health
Clubs Limited has also been reduced in value, by GBP18,000, as the
business is behind on its loan repayments.
Outlook
The focus for the Share pool is on realising the remaining investments
at values which maximise returns for Shareholders. We hope to be in a
position to announce a final distribution to Shareholders during the
summer.
Downing LLP
REVIEW OF INVESTMENTS - DP2011 STRUCTURED SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:
Valuation
Movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital investments
Wickham Solar Limited 550 660 10 53.0%
Mosaic Spa and Health Clubs
Limited* 58 19 (18) 1.5%
Odysian (Holdings) Limited 155 - - 0.0%
-------- --------- ---------- ----------
763 679 (8) 54.5%
======== ==========
Cash at bank and in hand 566 45.5%
--------- ----------
Total investments 1,245 100.0%
========= ==========
*partially qualifying investment
All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2019
DISPOSALS
Valuation (Loss)/profit Realised
Cost at 01/04/18 Proceeds vs. cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture Capital
investments
Oak Grove Renewables
Limited 545 347 353 (192) 6
Fubar Stirling
Limited 90 6 6 (84) -
Mosaic Spa and
Health Clubs
Limited* 6 5 7 1 2
641 358 366 (275) 8
======= ============ ======== ============= ========
*partially qualifying investment
INVESTMENT MANAGER'S REPORT - GENERALIST SHARE POOL
Introduction
As at 31 March 2019, the Generalist Share Pool held a portfolio of 26
Venture Capital investments and three Liquidity investments, with a
combined value of GBP24.7 million.
Net Asset Value and results
As at 31 March 2019, the NAV of a Generalist share stood at 83.5p, a
decrease of 12.0p over the year. The fall in value arises from several
areas. 5.4p of the decrease is attributable to the Liquidity investments
which have been negatively impacted by the falls in global markets
towards the end of 2018. 5.5p of the fall arises from net losses in the
Venture Capital portfolio, where two investments in particular have had
significant provisions made against them. The remaining 1.1p of the
decrease has arisen from the surplus of running costs over income.
The loss on ordinary activities for the Generalist Share pool for the
year was GBP3.9 million (2018: GBP1.3 million), comprising a revenue
loss of GBP283,000 (2018: GBP381,000) and a capital loss of GBP3.6
million (2018: GBP953,000).
Investment activity
During the year we made good progress in building the VCT Qualifying
portfolio of the Generalist Share pool, having invested a total of
GBP10.9 million in 17 companies.
New Venture Capital investments
A description of each of the new VCT Qualifying investments made during
the year is shown below.
GBP1.3 million was invested in Rated People Limited, an online home
services marketplace that aims to connect homeowners with high quality
local tradespeople.
GBP1.1 million was invested in Lignia Wood Company Limited (formerly
Fibre 7 UK Limited). The company's product, LIGNIA(R), is produced by
impregnating sustainably-sourced softwood with resin such that it has an
appearance resembling a tropical hardwood with a better appearance,
durability, stability and fire resistance than many high value hardwoods
such as oak and teak.
GBP1.0 million was invested in Firefly Learning Limited, the developer
of a suite of school learning tools which allow teachers to share lesson
plans, assign and review homework and communicate with students and
parents online.
GBP1.0 million was invested in Imagen Limited, the developer of a SaaS
video management platform which holds both current and archive footage
for major sporting organisations and news outlets, including Premier
League, World Tennis Association and the BBC.
GBP803,000 was invested in Virtual Class Limited, trading as Third Space
Learning, via two fundraising tranches. The Company has developed an
online educational platform that provides mathematics tuition to pupils
studying for their Key Stage 2 exams.
GBP784,000 was invested in Hackajob Limited, the developer of an online
recruitment platform that allows companies to hire tech talent directly
through a combination of domain-specific challenges, data and human
intelligence.
GBP741,000 was invested in Glownet Limited, the developer of a
technology solution for organisers of mass-attendance live events, which
allows attendees to make cashless payments at the event.
GBP500,000 was invested in Exonar Limited, a developer of software
solutions which help ensure compliance with data-centric regulations and
imperatives, including GDPR.
GBP412,000 was invested in ADC Biotechnology Limited, a company creating
innovative new technology which aims to speed up, simplify and lower the
costs of the processes involved in the production of new Antibody Drug
Conjugates (ADCs). This investment was made alongside GBP1.1 million
from the Healthcare Share Pool.
GBP300,000 was invested in Arecor Limited, the developer of
biopharmaceuticals and proprietary diabetes-related products, including
ultra-fast acting insulin to treat type 1 and 2 diabetes. This
investment was made alongside GBP1.1 million from the Healthcare Share
Pool.
GBP200,000 was invested in Channel Mum Limited, the developer of a
community-based online platform for parents.
GBP167,000 was invested in Masters of Pie Limited, an early-stage
technology firm specialising in virtual and augmented reality software
for manufacturing and wider enterprise solutions.
Follow-on Venture Capital investments
A description of each of the existing VCT Qualifying businesses to which
the Generalist Share pool provided further funding during the year is
shown below.
GBP991,000 was invested in Live Better With Limited, the developer of a
healthcare platform aiming to help people with long-term medical
conditions, focusing on non-medical products that make day-to-day life
better for patients. The Generalist Share pool has now invested a total
of GBP1.2 million in the business, alongside GBP1.1 million from the
Healthcare Share pool.
GBP639,000 was invested in E Fundamentals (Group) Limited, via two
fundraising tranches, bringing the total invested to GBP917,000. The
company provides a data analytics service which provides online
merchandising insights to brand owners, to enable them to improve their
online revenues.
GBP417,000 was invested in BridgeU Corporation, the developer of a
platform providing intelligent university and course matching which is
tailored to the individual student. GBP811,000 has been invested by the
Generalist Share pool to date.
A further GBP278,000 was invested in Empiribox Holdings Limited,
bringing the total invested to GBP1.0 million. The company provides
equipment, lesson plans and CPD--accredited support for teachers to
deliver engaging and practical science lessons to UK primary school
children.
A further GBP218,000 was invested in Xupes Limited, bringing the total
investment to GBP818,000. Xupes is an online retailer of pre-owned
luxury goods including designer watches, handbags, jewellery and
antiques.
Liquidity Investments
As Shareholders will be aware, where the Generalist Share pool invests
in other Downing-managed funds, Downing provides fee rebates to the
Generalist Share pool such that its investors are not "double-charged".
As MI Downing Diversified Global Managers Fund moved away from being
under Downing's management during the year, the decision was taken to
exit from this investment, as the fee economies which the Generalist
Share pool could previously take advantage of fell away. The exit
generated proceeds of GBP1.8 million and resulted in a loss against cost
of GBP23,000.
Portfolio valuation
Venture Capital portfolio
During the year the Venture Capital portfolio of the Generalist Share
pool was reduced in value by a total of GBP1.7 million.
The largest valuation decrease was in respect of Ormsborough Limited.
The company has experienced some significant challenges in respect of
its pub developments, which have set the company back considerably. As a
result, the Generalist Share pool's investment in the company was been
written down by GBP706,000 during the year. Downing to continue to work
with the company to make improvements to its operations.
The Share pool's investment in Glownet Limited was also written down
during the year. The carrying value of the investment was reduced by
GBP556,000, as a result of the company performing substantially behind
budget and the impact this has had on its working capital.
Virtual Class Limited (Third Space Learning), the developer of an online
educational platform was written reduced in value by GBP259,000 during
the year, as a result of the company being behind budget. Steps are
being taken to rationalise the business and we hope to see improvement
in this regard.
The investment in ADC Biotechnology Limited was reduced in value by
GBP146,000 during the year, in line with a new funding round, which was
undertaken at a lower price to the first round under which the Share
pool invested. The company is running behind plan as a result of delayed
approvals on its production site. However, production is expected to
commence shortly and we continue to work closely with the management
team.
Empiribox Holdings Limited was reduced in value by GBP131,000 during the
year, in view of the fact that the business has not met its sales
targets and has therefore missed its budget.
Destiny Pharma plc ("Destiny Pharma"), which is listed on London's
Alternative Investment Market (AIM), was also revalued downwards as at
31 March 2019, by GBP102,000 in line with the prevailing quoted price at
that date. AIM prices typically fluctuate considerably in a given year
and the reduction in the share price of the Destiny Pharma is
symptomatic of this, as the business is progressing well.
Other valuation movements in the Venture Capital portfolio amounted to a
net valuation uplift of GBP157,000.
Liquidity investments
The carrying values of the liquidity investments have been adjusted to
reflect their quoted prices as at 31 March 2019. This resulted in a
valuation reduction of GBP1.7 million for the year. This decrease is
largely due to adverse conditions in global markets during the end of
2018, which have impacted quoted prices.
MI Downing UK Micro-Cap Growth Fund and Downing Strategic Micro-Cap
Investment Trust plc in particular, have a strategic approach to the
underlying business in which they invest. Given this, we feel that there
continues to be the potential for growth in these underlying businesses.
Outlook
The building of the Venture Capital portfolio of the Generalist Share
pool progressed well during the year and we expect to see a similar
level of investment activity over the coming year, as we work to deploy
the proceeds from the 2018 Offer, in addition to the residual proceeds
from the 2016 Offer.
Downing LLP
REVIEW OF INVESTMENTS - GENERALIST SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:
Valuation
Movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital investments
Live Better With Limited 1,211 1,284 73 3.9%
Rated People Limited 1,282 1,282 - 3.9%
Lignia Wood Company Limited 1,111 1,200 89 3.6%
Firefly Learning Limited 1,047 1,047 - 3.2%
Imagen Limited 1,000 1,000 - 3.0%
E-Fundamentals (Group) Limited 917 917 - 2.7%
Maverick Pubs Limited 1,000 900 (100) 2.7%
Empiribox Holdings Limited 1,028 897 (131) 2.7%
Xupes Limited 818 818 - 2.5%
BridgeU Limited 811 811 - 2.4%
Hackajob Limited 784 784 - 2.4%
Volo Commerce Limited 567 567 - 1.7%
Virtual Class Limited 803 544 (259) 1.6%
Exonar Limited 500 500 - 1.5%
Fenkle Street LLP* 301 372 71 1.1%
Arecor Limited 300 300 - 0.9%
ADC Biotechnology Limited 412 266 (146) 0.8%
Destiny Pharma plc^ 500 261 (102) 0.8%
Limitless Technology Limited 173 219 46 0.7%
Channel Mum Limited 200 200 - 0.6%
Ormsborough Limited 900 194 (706) 0.6%
Glownet Limited 741 185 (556) 0.6%
Masters of Pie Limited 167 167 - 0.5%
Snow Hill Developments LLP* 64 92 23 0.3%
Mosaic Spa and Health Clubs
Limited* 32 17 (15) 0.1%
London City Shopping Centre
Limited* 30 - (30) 0.0%
-------- --------- ---------- ----------
16,699 14,824 (1,743) 44.8%
Liquidity investments
MI Downing Monthly Income Fund* 3,950 3,503 (319) 10.5%
MI Downing UK Micro-Cap Growth
Fund* 4,025 3,327 (534) 10.0%
Downing Strategic Micro-Cap
Investment Trust plc*^ 4,100 2,911 (861) 8.7%
12,075 9,741 (1,714) 29.2%
28,774 24,565 (3,457) 74.0%
======== ==========
Cash at bank and in hand 8,661 26.0%
--------- ----------
Total investments 33,226 100.0%
========= ==========
All VCT Qualifying Investments are incorporated in England and Wales.
*non-qualifying investment
^listed and traded on the London Stock Exchange
Investment movements for the year ended 31 March 2019
ADDITIONS
Cost
GBP'000
Venture Capital investments
Rated People Limited 1,282
Lignia Wood Company Limited 1,111
Firefly Learning Limited 1,047
Imagen Limited 1,000
Live Better With Limited 991
Virtual Class Limited 803
Hackajob Limited 784
Glownet Limited 741
E-Fundamentals (Group) Limited 639
Exonar Limited 500
BridgeU Limited 417
ADC Biotechnology Limited 412
Arecor Limited 300
Empiribox Holdings Limited 278
Xupes Limited 218
Channel Mum Limited 200
Masters of Pie Limited 167
10,890
========
DISPOSALS
Valuation (Loss)/ Realised
at profit (loss)/
Cost 01/04/18 Proceeds vs. cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture Capital
investments
Fenkle Street LLP 60 60 - (60) (60)
Snow Hill Developments
LLP 22 23 23 1 -
Mosaic Spa and Health
Clubs Limited* 6 5 6 1 1
------- --------- --------- --------- --------
87 88 29 (58) (59)
Liquidity investments
MI Downing Diversified
Global Managers Fund 1,800 1,833 1,777 (23) (56)
------- --------- --------- --------- --------
1,800 1,833 1,777 (23) (56)
1,887 1,921 1,806 (81) (115)
======= ========= ========= ========= ========
*partially qualifying investment
INVESTMENT MANAGER'S REPORT - HEALTHCARE SHARE POOL
Introduction
As at 31 March 2019, the Healthcare Share pool held a portfolio of seven
Venture Capital investments and three Liquidity investments, with a
combined value of GBP7.4 million.
Net Asset Value and results
As at 31 March 2019, the NAV of a Healthcare share stood at 83.3p, a
decrease of 11.3p over the year. 3.3p of the decrease relates to
investment revaluations in the Venture Capital portfolio, where, as is
to be expected, some of the early stage companies have fallen a little
behind plan. 5.4p relates to a reduction in value of the Liquidity
Investments which have been negatively impacted by the falls in global
markets towards the end of 2018. The remaining 2.6p of the NAV decrease
is attributable to the surplus of running costs over income.
The return on ordinary activities for the Healthcare Share pool for the
year was a loss of GBP1.4 million (2018: GBP589,000), being a revenue
loss of GBP198,000 (2018: GBP160,000) and a capital loss of GBP1.2
million (2018: GBP429,000).
Investment activity
During the year a total of GBP4.9 million was invested in six venture
capital investments.
New Venture Capital investments
A description of each of the new VCT Qualifying investments made during
the year is shown below.
GBP1.1 million was invested in Arecor Limited, the developer of
biopharmaceuticals and proprietary diabetes-related products, including
ultra-fast acting insulin to treat type 1 and 2 diabetes. This
investment was made alongside GBP300,000 from the Generalist Share Pool.
GBP1.1 million was invested in ADC Biotechnology Limited, a company
creating innovative new technology which aims to speed up, simplify and
lower the costs of the processes involved in the production of new
Antibody Drug Conjugates (ADCs). The company has also been provided with
an investment of GBP412,000 from the Generalist Share Pool.
GBP1.0 million was invested in Open Bionics Limited, the designer and
manufacturer of affordable bionic prosthetic hands by using 3D scanning
and printing. The company's current focus is on becoming the market
leader for bionic hands, before entering the new higher-growth
prosthetic/orthotic markets.
GBP556,000 was invested in Adaptix Limited, the developer of a new
flatpanel x-ray source which will improve the accuracy and mobility of
3D imaging. The company's technology will make portable, low
radiation-dose 3D imaging more accessible and lower-cost than systems
currently available on the market. The technology will also allow
hospitals to provide faster and more definitive diagnoses.
GBP278,000 was invested in Future Health Works Limited, the developer of
myrecovery, a mobile app that informs and empowers patients through
every step of their orthopedic treatment journey, customised to their
procedure and hospital. The app improves efficiency across the
healthcare value chain and delivers actionable insight through data
analytics. In the long term, myrecovery's product is designed to save
money and time to both practitioners and patients.
Follow-on Venture Capital investments
A further GBP886,000 was invested in Live Better With Limited, the
developer of a healthcare platform aiming to help people with long-term
medical conditions, focusing on non-medical products that make
day-to-day life better for patients. The Healthcare Share pool has
invested a total of GBP1.1 million to date, alongside GBP1.2 million
from the Generalist Share pool.
Liquidity Investments
As Shareholders will be aware, where the Healthcare Share pool invests
in other Downing-managed funds, Downing provides fee rebates to the
Healthcare Share pool such that its investors are not "double-charged".
As MI Downing Diversified Global Managers Fund moved away from being
under Downing's management during the year, the decision was taken to
exit from this investment, as the fee economies which the Healthcare
Share pool could previously take advantage of fell away. The exit
generated proceeds of GBP935,000 and resulted in a loss against cost of
GBP15,000.
Portfolio valuation
Venture Capital portfolio
During the year the Venture Capital portfolio of the Healthcare Share
pool was reduced in value by GBP1.0 million.
The largest valuation reduction was in respect of ADC Biotechnology
Limited, with the Healthcare Share pool's investment having been reduced
in value by GBP520,000 during the year. This was to bring the valuation
in line with a new funding round, which was undertaken at a lower price
to the first round under which the Share pool invested. The company is
running behind plan as a result of delayed approvals on its production
site. However, production is expected to commence shortly and we
continue to work closely with the management team.
Destiny Pharma plc ("Destiny Pharma"), which is listed on London's
Alternative Investment Market (AIM), was also revalued downwards as at
31 March 2019, by GBP153,000 in line with the prevailing quoted price at
that date. AIM prices typically fluctuate considerably in a given year
and the reduction in the share price of the Destiny Pharma is
symptomatic of this, as the business is progressing well.
Other movements in the Venture Capital portfolio amounted to a net
uplift of GBP8,000.
Liquidity investments
The carrying values of the liquidity investments have been adjusted to
reflect their quoted prices as at 31 March 2019. This resulted in a
valuation reduction of GBP1.7 million for the year. This decrease is
largely due to adverse conditions in global markets, which have reduced
quoted prices.
MI Downing UK Micro-Cap Growth Fund and Downing Strategic Micro-Cap
Investment Trust plc in particular, have a strategic approach to the
underlying business in which they invest. Given this, we feel that there
continues to be the potential for growth in these underlying businesses.
Outlook
The building of the Venture Capital portfolio of the Healthcare Share
pool progressed well during the year and we expect to see a similar
level of investment activity over the coming year, as we work to deploy
the proceeds from the 2018 Offer, in addition to the residual proceeds
from the 2016 Offer.
Downing LLP
REVIEW OF INVESTMENTS - HEALTHCARE SHARE POOL
Portfolio of investments
The following investments were held at 31 March 2019:
Valuation
Movement % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital investments
Live Better With Limited 1,106 1,179 73 8.5%
Arecor Limited 1,100 1,100 - 8.0%
Open Bionics Limited 1,000 1,000 - 7.2%
ADC Biotechnology 1,054 534 (520) 3.9%
Adaptix Limited 556 491 (65) 3.5%
Destiny Pharma plc^ 750 392 (153) 2.8%
Future Health Works Limited 278 278 - 2.0%
5,844 4,974 (665) 35.9%
Liquidity Investments
MI Downing Monthly Income Fund* 1,100 978 (89) 7.1%
MI Downing UK Micro-Cap Growth
Fund* 1,125 926 (149) 6.7%
Downing Strategic Micro-Cap
Investment Trust plc*^ 700 497 (147) 3.6%
-------- --------- ---------- ----------
2,925 2,401 (385) 17.4%
8,769 7,375 (1,050) 53.3%
======== ==========
Cash at bank and in hand 6,461 46.7%
--------- ----------
Total investments 13,836 100.0%
========= ==========
*non-qualifying investment
^listed and traded on the London Stock Exchange
Investment movements for the year ended 31 March 2019
ADDITIONS
Cost
GBP'000
Venture Capital investments
Arecor Limited 1,100
ADC Biotechnology 1,054
Open Bionics Limited 1,000
Live Better With Limited 886
Adaptix Limited 556
Future Health Works Limited 278
4,874
========
DISPOSALS
Valuation Loss Realised
Cost at 01/04/18 Proceeds vs. cost loss
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Liquidity investments
Downing Diversified
Global Managers Fund 950 962 935 (15) (27)
------- ------------ --------- --------- --------
950 962 935 (15) (27)
======= ============ ========= ========= ========
*partially qualifying investment
Directors' responsibilities
The Directors are responsible for preparing the Report of the Directors,
the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations. They are also
responsible for ensuring that the Annual Report includes information
required by the Listing Rules of the Financial Conduct Authority.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law, the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom accounting
standards and applicable law) including Financial Reporting Standard
102, the financial reporting standard applicable in the UK and Republic
of Ireland (FRS 102). 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 the profit
or loss of the Company for that period.
In preparing these financial statements the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
-- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business; and
-- carry out a robust assessment of the principal risks facing the Company,
as set out in the Strategic report on page 46 of the Annual Report.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions, to
disclose with reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
In addition, each of the Directors considers that the Annual Report,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Company's position,
performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information included
in the Annual Reports may differ from legislation in other
jurisdictions.
Directors' statement pursuant to the Disclosure Guidance and
Transparency Rules
Each of the Directors, whose names and functions are listed on page 3 of
the Annual Report, confirms that, to the best of each person's
knowledge:
-- the financial statements, which have been prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company; and
-- the management report included within the Report of the Directors,
Strategic report, Chairman's Statement, Investment Manager's Report, and
Review of Investments includes a fair review of the development and
performance of the business and the position of the company, together
with a robust assessment of the principal risks and uncertainties that it
faces.
Statement as to disclosure of information to Auditors
The Directors in office at the date of the report have confirmed, as far
as they are aware, that there is no relevant audit information of which
the Auditor is unaware. Each of the Directors has confirmed that they
have taken all the steps that they ought to have taken as Directors in
order to make themselves aware of any relevant audit information and to
establish that it has been communicated to the Auditor.
By order of the Board
Grant Whitehouse
Secretary of Downing FOUR VCT plc
INCOME STATEMENT
for the year ended 31 March 2019
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 378 230 608 765 - 765
Net (loss)/gain on investments - (5,091) (5,091) - 1,425 1,425
------- ------- ------- ------- ------- -------
378 (4,861) (4,483) 765 1,425 2,190
Investment management fees (386) (386) (772) (596) (596) (1,192)
Other expenses (468) - (468) (805) (409) (1,214)
------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (476) (5,247) (5,723) (636) 420 (216)
Tax on total comprehensive income and ordinary
activities 7 - 7 (160) - (160)
------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (469) (5,247) (5,716) (796) 420 (376)
======= ======= ======= ======= ======= =======
Basic and diluted return per share:
DSO B Share - - - (0.2p) 0.2p -
DSO C Share - - - (0.2p) 0.2p -
DSO D Share 0.6p 2.0p 2.6p 0.7p 5.1p 5.8p
DP67 Share 1.1p (2.6p) (1.5p) 0.2p 5.7p 5.9p
DP2011 General Share - - - - - -
DP2011 General A Share (0.3p) 0.3p - (0.6p) 4.7p 4.1p
DP2011 Structured Share - - - - - -
DP2011 Structured A Share (0.2p) (0.1p) (0.3p) (0.6p) 4.0p 3.4p
DP2011 Low Carbon Share - - - (0.6p) (9.1p) (9.7p)
Generalist Share (0.9p) (11.1p) (12.0p) (1.7p) (4.5p) (6.2p)
Healthcare Share (1.6p) (9.7p) (11.3p) (2.5p) (6.9p) (9.4p)
The total column within the Income Statement represents the Statement of
Total Comprehensive Income of the Company prepared in accordance with
Financial Reporting Standard 102 ("FRS 102"). The supplementary revenue
return and capital return columns are prepared in accordance with the
Statement of Recommenced Practice issued in February 2018 by the
Association of Investment Companies ("AIC SORP").
INCOME STATEMENT (analysed by Share pool)
for the year ended 31 March 2019
Split as:
DSO D Share pool
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 14 - 14 166 - 166
Net (loss)/gain on investments - (141) (141) - 442 442
14 (141) (127) 166 442 608
Investment management fees (17) (17) (34) (46) (46) (92)
Other expenses (46) - (46) (53) - (53)
------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (49) (158) (207) 67 396 463
Tax on total comprehensive income and ordinary
activities - - - (10) - (10)
------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (49) (158) (207) 57 396 453
======= ======= ======= ======= ======= =======
DP67 Share pool
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 214 112 326 247 - 247
Net (loss)/gain on investments - (372) (372) - 683 683
------- ------- -------
214 (260) (46) 247 683 930
Investment management fees (33) (33) (66) (51) (51) (102)
Other expenses (26) - (26) (62) - (62)
------- ------- ------- ------- ------- -------
Return/(loss) on ordinary activities before tax 155 (293) (138) 134 632 766
Tax on total comprehensive income and ordinary
activities (28) - (28) (114) - (114)
------- ------- ------- ------- ------- -------
Return/(loss) attributable to equity Shareholders,
being total comprehensive income for the year 127 (293) (166) 20 632 652
======= ======= ======= ======= ======= =======
DP2011 General Share pool
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 4 - 4 160 - 160
Net gain on investments - 71 71 - 947 947
------- ------- -------
4 71 75 160 947 1,107
Investment management fees (20) (20) (40) (75) (75) (150)
Other expenses (31) - (31) (196) - (196)
------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (47) 51 4 (111) 872 761
Tax on total comprehensive income and ordinary
activities - - - (1) - (1)
------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (47) 51 4 (112) 872 760
======= ======= ======= ======= ======= =======
DP2011 Structured Share pool
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 3 - 3 75 - 75
Net gain on investments - - - - 535 535
------- ------- -------
3 - 3 75 535 610
Investment management fees (7) (7) (14) (39) (39) (78)
Other expenses (15) - (15) (126) - (126)
------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (19) (7) (26) (90) 496 406
Tax on total comprehensive income and ordinary
activities - - - (1) - (1)
------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (19) (7) (26) (91) 496 405
======= ======= ======= ======= ======= =======
Generalist Share pool
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 114 118 232 62 - 62
Net loss on investments - (3,572) (3,572) - (718) (718)
------- ------- -------
114 (3,454) (3,340) 62 (718) (656)
Investment management fees (180) (180) (360) (235) (235) (470)
Other expenses (252) - (252) (208) - (208)
------- ------- ------- ------- ------- -------
Loss on ordinary activities before tax (318) (3,634) (3,952) (381) (953) (1,334)
Tax on total comprehensive income and ordinary
activities 35 - 35 - - -
------- ------- ------- ------- ------- -------
Loss attributable to equity Shareholders, being total
comprehensive income for the year (283) (3,634) (3,917) (381) (953) (1,334)
======= ======= ======= ======= ======= =======
Healthcare Share pool
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 29 - 29 9 - 9
Net loss on investments - (1,077) (1,077) - (332) (332)
------- ------- -------
29 (1,077) (1,048) 9 (332) (323)
Investment management fees (129) (129) (258) (97) (97) (194)
Other expenses (98) - (98) (72) - (72)
------- ------- ------- ------- ------- -------
Loss on ordinary activities before tax (198) (1,206) (1,404) (160) (429) (589)
Tax on total comprehensive income and ordinary
activities - - - - - -
------- ------- ------- ------- ------- -------
Loss attributable to equity Shareholders, being total
comprehensive income for the year (198) (1,206) (1,404) (160) (429) (589)
======= ======= ======= ======= ======= =======
BALANCE SHEET
as at 31 March 2019
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 39,394 35,192
Current assets
Debtors 800 695
Cash at bank and in hand 18,443 21,063
------- -------
19,243 21,758
Creditors: amounts falling due within one year (485) (615)
------- -------
Net current assets 18,758 21,143
------- -------
Net assets 58,152 56,335
======= =======
Capital and reserves
Called up Share capital 138 188
Capital redemption reserve - 31
Special reserve 47,040 8,021
Share premium account 7,172 43,904
Funds held in respect of Shares not yet allotted 4,772 420
Revaluation reserve (4,158) 234
Capital reserve -- realised 4,940 4,641
Revenue reserve (1,752) (1,104)
------- -------
Total equity Shareholders' funds 58,152 56,335
======= =======
Basic and diluted Net Asset Value per Share:
DSO B Share - -
DSO C Share - -
DSO D Share 27.8p 54.4p
DP67 Share 48.5p 50.0p
DP2011 General Ordinary Share - -
DP2011 General A Share 13.3p 20.3p
DP2011 Structured Ordinary Share - -
DP2011 Structured A Share 9.9p 15.0p
DP2011 Low Carbon Share - -
Generalist Share 83.5p 95.5p
Healthcare Share 83.3p 94.6p
BALANCE SHEET (analysed by Share pool)
as at 31 March 2019
Split as:
DSO D Share pool
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 1,302 3,699
Current assets
Debtors 1 66
Cash at bank and in hand 910 582
------- -------
911 648
Creditors: amounts falling due within one year (28) (67)
------- -------
Net current assets 883 581
------- -------
Net assets 2,185 4,280
======= =======
Capital and reserves
Called up share capital 8 8
Special reserve 2,259 4,201
Revaluation reserve 153 471
Capital reserve -- realised (148) (362)
Revenue reserve (87) (38)
------- -------
Total equity Shareholders' funds 2,185 4,280
======= =======
DP67 Share pool
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 3,578 4,639
Current assets
Debtors 669 552
Cash at bank and in hand 1,251 519
------- -------
1,920 1,071
Creditors: amounts falling due within one year (70) (116)
------- -------
Net current assets 1,850 955
------- -------
Net assets 5,428 5,594
======= =======
Capital and reserves
Called up share capital 11 11
Capital redemption reserve - 31
Special reserve 534 805
Revaluation reserve 547 579
Capital reserve -- realised 3,622 3,581
Revenue reserve 714 587
------- -------
Total equity Shareholders' funds 5,428 5,594
======= =======
DP2011 General Share pool
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 1,895 2,243
Current assets
Debtors 1 -
Cash at bank and in hand 594 1,569
------- -------
595 1,569
Creditors: amounts falling due within one year (31) (68)
------- -------
Net current assets 564 1,501
------- -------
Net assets 2,459 3,744
======= =======
Capital and reserves
Called up share capital -- Ordinary Shares 16 16
Called up share capital -- A Shares 18 18
Special reserve 652 2,209
Revaluation reserve 636 353
Capital reserve -- realised 867 831
Revenue reserve 270 317
------- -------
Total equity Shareholders' funds 2,459 3,744
======= =======
DP2011 Structured Share pool
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 679 1,045
Current assets
Debtors 3 3
Cash at bank and in hand 566 877
------- -------
569 880
Creditors: amounts falling due within one year (15) (37)
------- -------
Net current assets 554 843
------- -------
Net assets 1,233 1,888
======= =======
Capital and reserves
Called up share capital -- Ordinary Shares 11 11
Called up share capital -- A Shares 13 13
Special reserve 332 1,204
Revaluation reserve 109 (119)
Capital reserve -- realised 599 591
Revenue reserve 169 188
------- -------
Total equity Shareholders' funds 1,233 1,888
======= =======
Generalist Share pool
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 24,565 19,053
Current assets
Debtors 124 73
Cash at bank and in hand 8,661 10,563
------- -------
8,785 10,636
Creditors: amounts falling due within one year (220) (215)
------- -------
Net current assets 8,565 10,421
------- -------
Net assets 33,130 29,474
======= =======
Capital and reserves
Called up share capital 43 38
Special reserve 31,111 (240)
Share premium account 4,692 31,508
Revaluation reserve (4,209) (718)
Funds held in respect of Shares not yet allotted 3,396 398
Revenue reserve (1,903) (1,512)
------- -------
Total equity Shareholders' funds 33,130 29,474
======= =======
Healthcare Share pool
2019 2018
GBP'000 GBP'000
Fixed assets
Investments 7,375 4,513
Current assets
Debtors 2 1
Cash at bank and in hand 6,461 6,953
------- -------
6,463 6,954
Creditors: amounts falling due within one year (121) (112)
------- -------
Net current assets 6,342 6,842
------- -------
Net assets 13,717 11,355
======= =======
Capital and reserves
Called up share capital 18 15
Special reserve 12,152 (100)
Share premium account 2,480 12,396
Revaluation reserve (1,394) (332)
Funds held in respect of Shares not yet allotted 1,376 22
Revenue reserve (915) (646)
------- -------
Total equity Shareholders' funds 13,717 11,355
======= =======
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2019
Funds held
in respect
Called Capital Share of Shares Capital
up Share Redemption Special premium not yet Revaluation reserve Revenue
capital reserve reserve account allotted Reserve - realised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2017 144 31 30,620 10,074 16,137 (1,980) 3,331 1,055 59,412
Total comprehensive income - - - - - (225) 645 (796) (1,363)
Transfer between reserves* - - (22,576) - - 2,439 19,548 589 -
Unallotted Shares - - - - 420 - - - 420
Transactions with owners
Dividend paid - - - - - - (18,883) (589) (19,472)
Purchase of own Shares - - (23) - - - - - (23)
Issue of Shares 44 - - 33,830 (16,137) - - - 17,737
Share issue costs - - - - - - - (1,363) (1,363)
-------- ----------- -------- -------- ----------- ----------- ----------- -------- --------
At 31 March 2018 188 31 8,021 43,904 420 234 4,641 (1,104) 56,335
Total comprehensive income - - - - - (5,250) 3 (469) (5,716)
Transfer between reserves* - - (4,960) - - 858 4,102 - -
Unallotted Shares - - - - 4,352 - - - 4,352
Transactions with owners
Dividend paid - - - - - - (3,806) - (3,806)
Cancellation of Share Premium/ Capital Redemption
Reserve - (89) 43,993 (43,904) - - - - -
Cancellation of Shares (58) 58 - - - - - - -
Purchase of own Shares - - (14) - - - - - (14)
Issue of Shares 8 - - 7,172 - - - - 7,180
Share issue costs - - - - - - - (179) (179)
-------- ----------- -------- -------- ----------- ----------- ----------- -------- --------
At 31 March 2019 138 - 47,040 7,172 4,772 (4,158) 4,940 (1,752) 58,152
======== =========== ======== ======== =========== =========== =========== ======== ========
*A transfer of GBP858,000 (2018: GBP2.4 million), representing
previously recognised unrealised gains and losses on disposal of
investments during the year ended 31 March 2019, has been made between
the Revaluation Reserve and the Special Reserve. A transfer of GBP4.1
million (2018: GBP19.5 million) representing realised gains and losses
on disposal of investments, less capital expenses and capital dividends
in the year was made between the Capital Reserve - realised and the
Special reserve.
CASHFLOW STATEMENT
for the year ended 31 March 2019
DP2011 DP2011
DSO D DP67 General Structured
Share Share Share Share Generalist Healthcare
pool pool pool pool Share pool Share pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
(Loss)/return on ordinary
activities before
taxation (207) (138) 4 (26) (3,952) (1,404) (5,723)
Losses/(gains) on
investments 141 372 (71) - 3,572 1,077 5,091
(Decrease)/increase in
creditors (39) (74) (37) (22) 40 9 (123)
Decrease/(increase) in
debtors 65 (117) (1) - (50) (1) (104)
------- ------- -------- ----------- ----------- ----------- --------
Net cash (outflow)/inflow
from operating
activities (40) 43 (105) (48) (390) (319) (859)
Corporation tax paid - - - - - - -
------- ------- -------- ----------- ----------- ----------- --------
Net cash generated from
operating activities (40) 43 (105) (48) (390) (319) (859)
------- ------- -------- ----------- ----------- ----------- --------
Cash flow from investing
activities
Purchase of
investments - - - - (10,890) (4,874) (15,764)
Proceeds from
disposal of
investments 2,256 689 419 366 1,806 935 6,471
Net cash inflow/(outflow)
from investing
activities 2,256 689 419 366 (9,084) (3,939) (9,293)
------- ------- -------- ----------- ----------- ----------- --------
Net cash inflow/(outflow)
before financing 2,216 732 314 318 (9,474) (4,258) (10,152)
Cash flows from financing
activities
Repurchase of Shares - - - - (14) - (14)
Issue of share capital - - - - 4,589 2,412 7,001
Funds held in respect of
Shares not yet allotted - - - - 2,997 1,354 4,351
Equity dividends paid (1,888) - (1,289) (629) - - (3,806)
------- ------- -------- ----------- ----------- ----------- --------
Net cash (outflow)/inflow
from financing
activities (1,888) - (1,289) (629) 7,572 3,766 7,532
------- ------- -------- ----------- ----------- ----------- --------
Net change in cash 328 732 (975) (311) (1,902) (492) (2,620)
Cash and cash equivalents
at start of the year 582 519 1,569 877 10,563 6,953 21,063
------- ------- -------- ----------- ----------- ----------- --------
Cash and cash equivalents
at end of the year 910 1,251 594 566 8,661 6,461 18,443
======= ======= ======== =========== =========== =========== ========
Cash and cash equivalents
comprise
Cash at bank and in hand 910 1,251 594 566 8,661 6,461 18,443
------- ------- -------- ----------- ----------- ----------- --------
Total cash and cash
equivalents 910 1,251 594 566 8,661 6,461 18,443
======= ======= ======== =========== =========== =========== ========
CASH FLOW STATEMENT
for the year ended 31 March 2018
DP2011 DP2011
DSO B DSO D DP67 General Structured
Share Share Share Share Share DP2011 Generalist Healthcare
pool pool pool pool pool LC Share pool Share pool Share pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Return/(loss) on
ordinary activities
before taxation 43 463 766 761 406 (732) (1,334) (589) (216)
(Gains)/losses on
investments (120) (442) (683) (947) (535) 252 718 332 (1,425)
Decrease/(increase) in
debtors 39 188 (40) 585 362 140 (29) (1) 1,244
(Decrease)/increase in
creditors (111) (18) 10 (60) (50) (54) 205 106 28
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Net cash
(outflow)/inflow from
operating activities (149) 191 53 339 183 (394) (440) (152) (369)
Corporation tax paid (40) 10 (534) (16) (8) (5) (44) - (637)
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
New cash generated
from operating
activities (189) 201 (481) 323 175 (399) (484) (152) (1,006)
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Cash flow from investing
activities
Purchase of
investments - - - - - - (19,546) (4,820) (24,366)
Proceeds from
disposal of
investments 1,872 2,109 1,090 6,089 3,723 2,813 - - 17,696
Net cash
inflow/(outflow) from
investing activities 1,872 2,109 1,090 6,089 3,723 2,813 (19,546) (4,820) (6,670)
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Net cash
inflow/(outflow)
before financing 1,683 2,310 609 6,412 3,898 2,414 (20,030) (4,972) (7,676)
Cash flows from financing
activities
Repurchase of Shares - - (23) - - - - - (23)
Issue of share
capital - - - - - - 9,368 7,425 16,793
Equity dividends paid (4,158) (2,163) (2,463) (5,109) (3,049) (2,530) - - (19,472)
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Net cash
(outflow)/inflow from
financing activities (4,158) (2,163) (2,486) (5,109) (3,049) (2,530) 9,368 7,425 (2,702)
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Net change in cash (2,475) 147 (1,877) 1,303 849 (116) (10,662) 2,453 (10,378)
Cash and cash
equivalents at start
of year 2,475 435 2,396 266 28 116 21,225 4,500 31,441
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Cash and cash
equivalents at end
of year - 582 519 1,569 877 - 10,563 6,953 21,063
======= ======= ======= ======== =========== ============== =========== =========== ========
Cash and cash equivalents
comprise
Cash at bank and in
hand - 582 519 1,569 877 - 10,563 6,953 21,063
------- ------- ------- -------- ----------- -------------- ----------- ----------- --------
Total cash and cash
equivalents - 582 519 1,569 877 - 10,563 6,953 21,063
======= ======= ======= ======== =========== ============== =========== =========== ========
NOTES TO THE ACCOUNTS
for the year ended 31 March 2019
Accounting policies
Basis of accounting
The Company has prepared its financial statements in accordance with the
Financial Reporting Standard 102 ("FRS 102") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies and Venture Capital Trusts" revised February 2018
("SORP").
The Company implements new Financial Reporting Standards ("FRS") issued
by the Financial Reporting Council when required.
The financial statements are presented in pounds sterling and rounded to
thousands. The Company's functional and presentational currency is
pounds sterling.
Presentation of Income Statement
In order to better reflect the activities of a Venture Capital Trust,
and in accordance with the SORP, supplementary information which
analyses the Income Statement between items of a revenue and capital
nature has been presented alongside the Income Statement. The revenue
return is the measure the Directors believe appropriate in assessing the
Company's compliance with certain requirements set out in Part 6 of the
Income Tax Act 2007.
Judgements in applying accounting policies and key sources of estimation
uncertainty
Investments
All investments are designated as "fair value through profit or loss"
assets due to investments being managed and performance evaluated on a
fair value basis, in accordance with Section 9.9B(a) of FRS 102. A
financial asset is designated within this category if it is both
acquired and managed on a fair value basis, with a view to selling after
a period of time, in accordance with the Company's documented investment
policy.
It is possible to determine the fair values within a reasonable range of
estimates. The fair value of an investment upon acquisition is deemed
to be cost. Thereafter investments are measured at fair value in
accordance with FRS 102 sections 11 and 12, together with the
International Private Equity and Venture Capital Valuation Guidelines
("IPEV").
Liquidity investments are measured using bid prices.
For unquoted investments, fair value is established by using the IPEV
guidelines. The valuation methodologies for unquoted entities used by
the IPEV to ascertain the fair value of an investment are as follows:
-Price of recent investment;
-Multiples;
-Net assets;
-Discounted cash flows or earnings (of underlying business);
-Discounted cash flows (from the investment); and
-Industry valuation benchmarks.
Price of recent investment includes valuations resulting from provisions
made against the price of a recent investment.
The methodology applied takes account of the nature, facts and
circumstances of the individual investment and uses reasonable data,
market inputs, assumptions and estimates in order to ascertain fair
value. The valuation of investments is detailed in Note 9 of the Annual
Report.
Gains and losses arising from changes in fair value are included in the
Income Statement for the year as a capital item and transaction costs on
acquisition or disposal of the investment are expensed. Where an
investee company has gone into receivership, liquidation or
administration (where there is little likelihood of recovery), the loss
on the investment, although not physically disposed of, is treated as
being realised.
It is not the Company's policy to exercise significant influence or
joint control over investee companies. Therefore, the results of these
companies are not incorporated into the Income Statement except to the
extent of any income accrued. This is in accordance with FRS 102
sections 14 and 15 and the SORP, which do not require portfolio
investments to be accounted for using the equity method of accounting.
The key source of estimation uncertainty is the selection of a multiple
to be applied when valuing unquoted companies. Whilst there is a degree
of subjectivity in the process of selecting a multiple, the Manager
undertakes a rigorous internal valuations process, which involves
challenging all relevant valuation inputs. The Board then challenges the
proposed valuations once this process is complete.
Income
Dividend income from investments is recognised when the Shareholders'
rights to receive payment have been established, normally the
ex-dividend date.
Interest income is accrued on a time apportioned basis, by reference to
the principal sum outstanding and at the effective rate applicable, and
only where there is reasonable certainty of collection in the
foreseeable future.
Distributions from investments in limited liability partnerships
("LLPs") are recognised as they are paid to the Company. Where such
items are considered capital in nature they are recognised as capital
income.
Arrangement fee rebates received from Downing LLP are treated as capital
income following the date of investment.
Where previously accrued income is considered unrecoverable a
corresponding bad debt expense is recognised.
Expenses
All expenses are accounted for on an accruals basis, and are stated
inclusive of any VAT charged. In respect of the analysis between revenue
and capital items presented within the Income Statement, all expenses
have been presented as revenue items except as follows:
-Expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment; or
-Expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of the
investments held can be demonstrated. The Company has adopted a policy
of charging 50% of the investment management fees to the revenue account
and 50% to the capital account, to reflect the Board's estimated split
of investment returns which will be achieved by the company over the
long term.
Expenses and liabilities not specific to a share class are generally
allocated pro rata to the Net Asset Values of each share class.
Taxation
The tax effects on different items in the Income Statement are allocated
between capital and revenue on the same basis as the particular item to
which they relate, using the Company's effective rate of tax for the
accounting period.
Due to the Company's status as a Venture Capital Trust, and the
continued intention to meet the conditions required to comply with Part
6 of the Income Tax Act 2007, no provision for taxation is required in
respect of any realised or unrealised appreciation of the Company's
investments which arises.
Deferred taxation, which is not discounted, is provided in full on
timing differences that result in an obligation at the balance sheet
date to pay more tax, or a right to pay less tax, at a future date, at
rates expected to apply when they crystallise based on current tax rates
and law. Timing differences arise from the inclusion of items of income
and expenditure in taxation computations in periods different from those
in which they are included in the accounts.
Other debtors and other creditors
Other debtors (including accrued income) and other creditors are
included within the accounts at amortised cost.
Issue costs
Issue costs in relation to the Shares issued for each share class have
been deducted from the share premium account, special reserve or revenue
reserve, as applicable, for the relevant share class.
Performance Incentive
Amounts payable in respect of Performance Incentive arrangements are
recorded at such time that an obligation has been established. An
explanation of each of the Performance Incentive arrangements is given
in Note 12 of the Annual Report. In respect of the DSO D Share pool, the
Performance Incentive is expected to be recorded as an expense item
through the Income Statement. Performance Incentives in respect of all
other Share classes are paid by way of dividends, and will therefore be
recognised in accordance with the dividend accounting policy.
Dividends
Dividends payable are recognised as distributions in the financial
statements when the company's liability to make payment has been
established, typically once declared by the Board or approved by
Shareholders at the AGM.
Funds held in respect of Shares not yet allotted
Cash received in respect of applications for new Shares that have not
yet been allotted is shown as "Funds held in respect of Shares not yet
allotted" and recorded on the Balance Sheet.
Acquisitions
Acquisitions made during the year are accounted for using the
acquisition method. The purchase consideration is measured at the fair
value of equity issued, compared to the fair value of the assets and
liabilities acquired.
Reportable segments
The Company has one reportable segment as the sole activity of the
Company is to operate as a VCT and all of the Company's resources are
allocated to this activity.
Basic and diluted return per share
Weighted
Average
number Capital Total
of Shares in Revenue (loss)/ Comprehensive
issue* Return gain income
Return per share is calculated on
the following: GBP'000 GBP'000 GBP'000
DSO D
Year ended 31 March 2019 Shares 7,867,247 (49) (158) (207)
DP67
Shares 11,192,136 127 (293) 166
DP2011 General Shares 15,644,066 - - -
DP2011 General A Shares 18,418,614 (47) 51 4
DP2011 Structured Shares 10,678,725 - - -
DP2011 Structured A Shares 12,572,817 (19) (7) (26)
Generalist Shares 31,412,013 (283) (3,634) (3,917)
Healthcare Shares 12,378,737 (198) (1,206) (1,404)
DSO B
Year ended 31 March 2018 Shares 19,911,070 (42) 47 5
DSO C
Shares 29,926,070 (43) 47 4
DSO D
Shares 7,867,247 57 396 453
DP67
Shares 11,229,211 20 632 652
DP2011 General
Shares 15,644,066 - - -
DP2011 General A
Shares 18,418,614 (112) 872 760
DP2011 Structured
Shares 10,678,725 - - -
DP2011 Structured A Shares 12,572,817 (91) 496 405
DP2011 Low Carbon Shares 7,575,419 (44) (688) (732)
Generalist Shares 21,421,985 (381) (953) (1,334)
Healthcare Shares 6,267,690 (160) (429) (589)
*Excluding Management Shares
As the Company has not issued any convertible securities or share
options, there is no dilutive effect on the return per DSO B Share, DSO
C Share, DSO D Share, DP67 Share, DP2011 General Share, DP2011 General A
Share, DP2011 Structured Ordinary Share, DP2011 Structured A Share,
DP2011 Low Carbon Share, Generalist Share or Healthcare Share. The
return per share disclosed therefore represents both the basic and
diluted return per Share for all classes of Share.
Basic and diluted Net Asset Value per share
2019 Net Asset 2018 Net Asset
Value Value
Pence per Pence per
Shares in issue share GBP'000 share GBP'000
2019 2018
DSO B
Shares - 19,911,070 - - - -
DSO C
Shares - 29,926,070 - - - -
DSO D
Shares 7,867,247 7,867,247 27.8 2,185 54.4 4,280
DP67 Shares 11,192,136 11,192,136 48.5 5,428 50.0 5,594
DP2011
General
Ordinary
Shares 15,644,066 15,644,066 - - - -
DP2011
General A
Shares 18,418,614 18,418,614 13.3 2,459 20.3 3,744
DP2011
Structured
Ordinary
Shares 10,678,725 10,678,725 - - - -
DP2011
Structured
A Shares 12,572,817 12,572,817 9.9 1,233 15.0 1,888
DP2011 Low
Carbon
Shares - 7,575,419 - - - -
Generalist
Shares 35,621,598 30,450,040 83.5 29,734 95.5 29,076
Generalist
Management
Shares 7,487,874 7,487,874 - - - -
Healthcare
Shares 14,821,564 11,974,285 83.3 12,341 94.6 11,333
Healthcare
Management
Shares 2,993,571 2,993,571 - - - -
Funds held in respect of shares not yet
allotted 4,772 420
Net assets per Balance Sheet 58,152 56,335
======= =======
The Directors allocate the assets and liabilities of the Company between
the DSO D Shares, DP67 Shares, DP2011 General Ordinary Shares, DP2011
General A Shares, DP2011 Structured Shares, DP2011 Structured A Shares,
Generalist Shares and Healthcare Shares such that each Share class has
sufficient net assets to represent its dividend and return of capital
rights as described in note 12 of the Annual Report.
As the Company has not issued any convertible shares or share options,
there is no dilutive effect on the Net Asset Value per DSO D Share, per
DP67 Share, per DP2011 General Ordinary Share, per DP2011 General A
Share, per DP2011 Structured Ordinary Share, per DP2011 Structured A
Share, per Generalist Share or per Healthcare Share. The Net Asset Value
per share disclosed therefore represents both the basic and diluted Net
Asset Value per DSO D Share, per DP67 Share, per DP2011 General Ordinary
Share, per DP2011 General A Share, per DP2011 Structured Ordinary Share,
per DP2011 Structured A Share, per Generalist Share and per Healthcare
Share.
Principal Risks
The Company's investment activities expose the Company to a number of
risks associated with financial instruments and the sectors in which the
Company invests. The principal financial risks arising from the
Company's operations are:
-Market risks;
-Credit risk; and
-Liquidity risk.
The risk management policies used by the Company in respect of the
principal financial risks and a review of the financial instruments held
at the year-end are provided below:
Market risks
As a VCT, the Company is exposed to investment risks in the form of
potential losses and gains that may arise on the investments it holds,
in accordance with its investment policy. The management of these market
risks is a fundamental part of investment activities undertaken by the
Investment Manager and is overseen by the Board. The Manager monitors investments through regular contact with management of investee companies, regular review of management accounts and other financial information and attendance at investee company board meetings. This enables the Manager to manage the investment risk in respect of individual investments. Investment risk is also mitigated by holding a diversified portfolio spread across various business sectors and asset classes. The key market risks to which the Company is exposed are: -Investment price risk; and -Interest rate risk. The Company has undertaken sensitivity analysis on its financial instruments, split into the relevant component parts, taking into consideration the economic climate at the time of review in order to ascertain the appropriate risk allocation. Investment price risk Investment price risk arises from uncertainty about the future prices and valuations of financial instruments held in accordance with the Company's investment objectives. It represents the potential loss that the Company might suffer through market price movements in respect of quoted investments, and also changes in the fair value of unquoted investments that it holds. Interest rate risk The Company accepts exposure to interest rate risk on floating-rate financial assets through the effect of changes in prevailing interest rates. The Company receives interest on its cash deposits at a rate agreed with its bankers. Investments in loan stock attract interest predominately at fixed rates. A summary of the interest rate profile of the Company's investments is shown below. Credit risk Credit risk is the risk that a counterparty to a financial instrument is unable to discharge a commitment to the Company made under that instrument. The Company is exposed to credit risk through its holdings of loan stock in investee companies, cash deposits and debtors. Credit risk relating to holdings of loan stock in investee companies is considered to be part of market risk. Liquidity risk Liquidity risk is the risk that the Company encounters difficulties in meeting obligations associated with its financial liabilities. Liquidity risk may also arise from either the inability to sell financial instruments at their fair values when required, or from the inability to generate cash inflows as required. Events after the reporting period In the period between 31 March 2019 and the date of this report, the Company issued the following Shares: -- 6,015,148 Generalist Shares, at an average price of 89.1p per Share; and -- 2,595,525 Healthcare Shares, at an average price of 86.7p per Share. At the date of this report, there were 49,124,620 Generalist Shares and 20,410,660 Healthcare Shares in issue, including Management Shares. ANNOUNCEMENT BASED ON AUDITED ACCOUNTS The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 31 March 2019 but has been extracted from the statutory financial statements for the year ended 31 March 2019 which were approved by the Board of Directors on 25 July 2019 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006. The statutory accounts for the year ended 31 March 2018 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.
(END) Dow Jones Newswires
July 25, 2019 10:59 ET (14:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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