Share Name Share Symbol Market Type Share ISIN Share Description
Oxford Technology 2 Venture Capital Trust Plc LSE:OXH London Ordinary Share GB0003105052 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 25.00 15.00 35.00 25.00 25.00 25.00 0.00 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 0.0 -0.1 -1.2 - 1

Oxford Tech 2 VCT Annual Financial Report

22/05/2019 7:01am

UK Regulatory (RNS & others)

   21 May 2019 
   Oxford Technology 2 VCT plc ("the Company" or "OT2") 
   Annual Report and Accounts for the year ended 28 February 2019 
   The Directors are pleased to announce the audited results of the Company 
for the year ended 28 February 2019.  A copy of the Annual Report and 
Accounts (together the "Accounts") will be made available to 
Shareholders shortly.  Set out below are extracts from the audited 
Accounts. References to page numbers below are to those Accounts. 
   The AGM will be held at Magdalen Centre, Oxford Science Park, Oxford OX4 
4GA on Wednesday 3 July 2019, at 2pm. 
   A copy of the Annual Report and Accounts will be available from the 
registered office of the Company at Magdalen Centre, Oxford Science Park, 
Oxford OX4 4GA, as well as on the Company's website: 
   Financial Headlines 
                                            Year Ended          Year Ended 
                                      28 February 2019    28 February 2018 
                                    ------------------  ------------------ 
  Net Assets at Year End              GBP1.67m                    GBP1.69m 
Net Asset Value per Share           31.4p                            31.7p 
 Dividend per Share paid in          -                                8.0p 
Cumulative Dividend per Share       21.0p                            21.0p 
NAV + Cumulative Dividend           52.4p                            52.7p 
 per Share paid from Incorporation 
Share Price at Year End             40.0p                            27.5p 
Earnings Per Share                              (0.3)p                1.0p 
 (Basic & Diluted) 
   Chairman's Statement 
   I am pleased to present my Annual Report for the year to 28 February 
2019 to fellow shareholders. 
   After three years of significant increases in Total Return (which was 
recognised by the Company being short listed in the category of VCT of 
the Year in the "Investment Week Investment Company of the Year Awards 
2018"), the 2018/9 year has been a period of minimal overall value 
change, with the net asset value (NAV) per share dropping 0.3p to 31.4p. 
Total Return since the Company's launch is 52.4p. 
   Shareholders will recall that in June 2017, the Company largest 
investment, OC Robotics,  was sold. Part of the terms of that sale 
included a retention to cover potential warranty claims -- OT2's share 
of this outstanding amount is GBP327,500. Provided no claims are made by 
the acquirer, this is due to be paid to us in June this year. To date we 
are not aware of any claims that may be made, but given this is entirely 
out of our control, we have maintained the principle of accruing only 
half of this benefit in the accounts with GBP163,750 included within the 
debtor's balance (just over 3p per share). 
   Termination of discussions with Chelverton 
   The Board was disappointed to announce the termination of discussions 
with Chelverton Asset Management Limited ("Chelverton") in January 2019. 
The circular issued on 22 October 2018 gave detailed reasons for the 
offer and the jointly agreed changes that would be forthcoming. At the 
general meeting held in November 2018, shareholders had overwhelmingly 
voted to approve all the resolutions that would have enabled the Company 
to launch an offer for a new class of B shares and appoint Chelverton to 
manage this class of shares. The key benefits for OT2's shareholders 
included a reduction in fixed annual running costs to be incurred by the 
ordinary share portfolio, as well as ensuring ongoing longevity of the 
fund, which is especially important to those shareholders who deferred 
capital gains on their original subscription of shares. In addition, it 
would have allowed Shareholders the opportunity to invest in a 
generalist VCT qualifying pool with ongoing oversight from two of the 
existing Directors, allowing existing shareholders to benefit from 30% 
income tax relief and tax-free distributions, and with a reduced cost of 
entry. The Board also hoped that they may have been able to release some 
cash currently held as working capital, and hence pay an additional 
small special dividend to existing shareholders. 
   The proposed offer was also subject to the issue of a prospectus and it 
raising a minimum level of new subscriptions: the documentation was in 
the process of being finalised by both Chelverton and OT2 and HM Revenue 
& Customs had given the Company conditional assurance that the B shares 
would constitute eligible shares for the purposes of section 273 ITA, 
and that the Company would maintain its approval as a VCT. It was 
therefore with some surprise that your Board received notification from 
Chelverton that they had unilaterally decided not to proceed with the 
offer. The proposed offer for subscription for a new class of B shares 
is therefore not proceeding at this time, and Chelverton will not be 
appointed as investment manager of OT2. 
   Your Board had taken care to ensure that any circular and prospectus 
costs were borne by Chelverton alone and there are no termination costs. 
The Company did incur some minor costs in taking advice on, negotiating 
and preparing for the proposed transaction.  These costs amount to less 
than GBP15,000 (less than 0.3p per share) and included an aggregate 
amount of GBP10,000 to be paid to two of the directors for work 
substantially above that envisaged under the existing letters of 
appointment. I received a sum of GBP8,000 and Alex Starling GBP2,000. 
   For the reasons explained in the circular, your Board remains convinced 
that expanding the asset base of the Company by raising funds with a new 
manager remains an attractive course of action for OT2's shareholders, 
and therefore will continue to pursue other such opportunities to 
achieve this goal, although there is no certainty that such an 
opportunity will be found. This is referenced further in the section 
"Planning for the Future" below. 
   Portfolio Review 
   Select Technology, a photocopier (or more generally Multi Function 
Device, or MFD) software company, is the largest holding in your 
Company's portfolio.  It has been positioning itself for growth, and has 
made a welcome return to profitability (and indeed paid a small dividend 
to OT2 in February 2019). Select Technology now sells a more balanced 
portfolio of software products worldwide, and in fact some of the recent 
progress has been from export markets.  In 2017 we reverted to a 
valuation methodology based on a sales multiple to more appropriately 
reflect the prospects of the business.  Our 7.4% stake in this business 
(OT2 holds Select Technology via holding company STL Management Limited) 
has increased in value by just over a fifth over the course of the 12 
months ending 28 February 2019, and the investment now makes up just 
over a quarter of the Company's overall NAV. 
   Arecor raised GBP6 million in 2018 for the clinical development of its 
diabetes speciality pharmaceutical portfolio.  Your Company had 
contributed GBP200k at the end of the prior year to the pre-cursor to 
this funding round, whilst it still had sufficient capability within the 
limitations imposed by the VCT rules.  Arecor has used the investment to 
strengthen its management team with the appointment of a Chief Financial 
Officer as well as to progress its portfolio into the clinic.  A Phase 1 
Clinical Trial Application has been approved by the Austrian Federal 
Office for Safety in Health Care.  The double-blind, randomised, 
three-way cross over study will compare Arecor's product to current best 
in class insulin treatments. The trial is being conducted in Austria at 
an internationally recognised centre of excellence in the field of 
diabetes research. 
   ImmBio (more formally known as Immunobiology) has continued to progress 
its vaccine programmes, and following its first successful trial on 
humans, has now signed its first commercial licence with China National 
Biotech Group for its pneumonia vaccine PnuBioVax. This is significant 
not only as a commercial milestone, but also a third party validation of 
the heat shock protein mediated vaccine approach pioneered by ImmBio. 
Your Company invested GBP12k to support the company during the 
negotiation of this licence and has recently provided a further GBP8k to 
provide working capital until the first milestone payments are received 
from the Chinese licensee. 
   These three companies represent nearly 60% of OT2's NAV. A further 10% 
is covered by Orthogem which has developed and is selling synthetic bone 
graft materials. Orthogem originally developed TriPore as a granular 
formulation, but have recently launched a new putty formulation, which 
fits better with modern orthopaedic surgery techniques.  Your Company 
invested GBP59k during the year to support the registration and launch 
of the TriPore Putty product. 
   Last year, I advised that we had made a new investment in April 2018 of 
GBP150k into Scancell Holdings Plc ("Scancell"). The prime driver of 
this was to provide a holding that should provide liquidity in the 
future, given the illiquid nature of the Company's other investments, 
the inability to hold very much cash given the need to be 80% invested 
in qualifying holdings, and yet also the necessity to be able to 
continue to have enough cash to pay operating costs as they become due 
-- potentially over a number of years into the future. Obviously, it was 
also hoped to prove a profitable investment in its own right. Scancell 
is a company well known to the Board and investment adviser, and 
operates in the exciting -- if difficult -- area of cancer 
immunotherapy. Importantly it is listed on AIM, and the opportunity 
arose to participate in the GBP8.7m (gross) placing last year at 12p. 
   Scancell is using the proceeds to support clinical trials for SCIB1, 
SCIB2 and Modi-1 and pre-clinical work for Modi-2. Unfortunately, the 
share price of Scancell has performed badly subsequently, dropping to 7p 
by 28 February 2019, and falling further since, and is currently just 
above 4p.  Scancell has had some mixed news flow during the course of 
the reporting period. Approval of the SCIB1 phase 2 melanoma combination 
trial in the US was delayed due to FDA questions over the mark 2 third 
party delivery device, but at the end of April 2019 the company 
announced that this phase 2 trial had received regulatory approval in 
the UK. 
   The partnerships with the likes of Cancer Research UK (CRUK) and 
BioNTech continue. Scancell were shortlisted, but not a winner of the 
CRUK Grand Challenge: however, the relationships with larger players who 
supported Lindy Durrant's technical leadership will hopefully bear fruit 
in the future. The first clinical trial of Moditope will start in 2020, 
addressing 3 different types of cancer. The management team has been 
strengthened with 2 new senior appointments. In May 2019, Scancell 
announced encouraging progress in the Cancer Research UK SCIB2 
pre-clinical studies enabling liposomal nanoparticles to be used as a 
delivery system as an alternative to the SCIB1 electroporation method. 
CRUK is now planning a clinical trial to test efficacy and safety of 
   Your Company also has holdings in four other companies, which together 
represent less than 10% of the NAV.  We still hope some of these have 
potential for future value growth, although we had to reduce the value 
of Oxis in line with their latest funding round, when the previously 
expected price level was not achieved. 
   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, and the ability of the Directors and Investment 
Advisor to be able to provide support when such approaches occur is 
essential for maximising value. 
   Further details are contained within the Investment Advisor's Report, 
and on our website. 
   Dividends/Return of Capital 
   Following the significant return of funds to shareholders in the prior 
year, the Directors are not recommending a final dividend for the year 
ending 28 February 2019. 
   The ongoing strategy is 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. 
   VCT Market Changes 
   After some bigger changes in previous years, the regulatory landscape 
remained broadly unchanged during the period following the Patient 
Capital Review (PCR) in the autumn of 2017.  Post PCR, we have noticed 
an increase in VCT activity in the venture and growth sectors, which we 
believe to be a good development.  In fact, the move away from secondary 
capital and asset backed investment by the VCT industry seems to be 
going well -- and this is no bad thing for UK Plc.  We believe that, 
appropriately resourced and supported, the VCT structure is well-suited 
to this patient approach to long term value creation. 
   Shareholders should be aware that as from 1 March 2020 there is an 
increase in the level of VCT qualifying investments to 80% (up from 70%) 
that a VCT needs to hold. OT2 already comfortably exceeds this threshold, 
although some care will be needed by the end of this year if the 
retentions held back from the OCR sale (referred to above) are received 
in full. 
   Planning for the Future 
   I have referred above to the previous announcements relating to our 
plans for the future. We have continued to look at methods of improving 
operational efficiency, reducing costs and, more generally, putting in 
place appropriate plans to ensure your VCT's operational costs relative 
to its overall size remain within acceptable limits.  The uptick in 
interest in 'business as usual' VCT venture and growth investing has 
resulted in these listed retail investment vehicles becoming of more 
interest to mainstream fund managers who do not already have a VCT as 
part of their 'waterfront'.  The previous transaction has sparked 
significant interest from a number of other fund managers, who have also 
seen the success of a similar arrangement where an existing VCT has 
managed to expand its asset base via the appointment of a new fund 
manager, who themselves are raising capital under a new B share class. 
The Board is in active discussions with these parties, and whilst there 
can be no certainty than any of these discussions will lead to a 
tangible proposal that can be put to shareholders, the Board is hopeful 
that a similar transaction to that previously proposed to be with 
Chelverton can be replicated with another partner. Should this be the 
case, we will present any such plans to you in due course. 
   Change of Auditor 
   As we announced in our half year results, James Cowper Kreston, our 
previous auditor, decided to withdraw from auditing Public Interest 
Entities (which include VCTs) for the time being due to the increasing 
regulatory landscape and associated costs, and hence resigned as our 
auditor in October 2018. During a previous tender process, the Audit 
Committee was also impressed by one of the other firms who responded, 
and on its recommendation, the Board has appointed UHY Hacker Young LLP 
("UHY") to fill the casual vacancy that had arisen. UHY have audited 
this year's results, and shareholders are being asked to reappoint them 
at the AGM for the year ending 29 February 2020. 
   Shareholders should note that the AGM for the Company will be held on 
Wednesday 3 July 2019 at the Magdalen Centre, Oxford Science Park, 
starting at the later time of 2pm and will include presentations by 
Oxford Technology Management and some of the companies that the Oxford 
Technology VCTs have invested in. 
   A formal Notice of the AGM has been enclosed with these Financial 
Statements together with a Form of Proxy for those not attending. We 
appreciate all the input we get from our shareholders and very much look 
forward to welcoming as many of you as possible on the day -- thank you 
for your ongoing support. 
   The Oxford Technology VCTs have operated and continue to operate very 
much in the spirit of the old and new VCT legislation by investing in 
and subsequently supporting early stage technology companies.  After 
pursuing apparently lower risk strategies such as solar subsidies, 
management buyouts, managed exit portfolios and the like, following the 
publication of the Patient Capital Review it seems that the VCT market 
is returning to the area that we have always occupied. While this is 
welcome, current VCT rules sometimes limit the amount of follow on 
investment that we are able to make. 
   Brexit is an uncertainty that is -- to an extent -- unquantifiable. 
Your Board does not consider OT2 to be at an unusual level of risk, as 
the companies in the portfolio are not overly exposed to trade with EU 
companies, though of course knock-on effects cannot be ruled out. 
   Looking ahead, the Board continues 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. 
Your Board continues to work so as to best provision your VCT such that 
-- when valuations and liquidity allow -- holdings can be exited and 
proceeds distributed to shareholders, whilst at the same time, finding a 
new manager to partner with, enabling a growth in the Company's net 
   Richard Roth 
   21 May 2019 
   Investment Portfolio Review 
   OT2 was formed in 2000 and invested in a total of 30 companies, all 
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 16 shows the companies remaining in the 
portfolio. A more detailed analysis is given for some of the larger 
   STL Management Ltd (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 both its own and third 
party products.  These products now include PaperCut, KPAX, Foldr, 
Drivve Image, EveryonePrint and Square 9 Enterprise Content Management. 
Sales have increased from GBP210k in the year to July 2010 to over 
GBP6.8m in the year to January 2019, up from GBP5.6m in the year before. 
Select Technology paid a dividend in February 2019. 
   Arecor raised GBP6m to start clinical trials for its insulin products. 
In March 2019, following the year end, Arecor obtained approval to start 
its clinical trial for the Ultra-Rapid Acting Insulin. It has also 
received funding from Innovate for its Superfast post-prandial insulin. 
   In February 2019 ImmBio signed a license deal for PnuBioVax with a 
subsidiary of CNBG, the leading Chinese biologics company.  The deal 
grants a license to CNBG for the Chinese market. PnuBioVax is a vaccine 
that targets pneumococcal disease in children and the elderly. GBP12k 
was invested in April 2018 and a further GBP8k invested after the year 
end, in March 2019, following the signature of the Chinese licence deal. 
   Oxis Energy is developing a Lithium Sulphur rechargeable battery with a 
significantly higher specific energy (energy storage per unit weight) 
than the currently available Lithium Ion batteries. OT2 was the first 
investor in Oxis Energy (then known as Intellikraft) in January 2000. 
Oxis has signed a $60m contract and has started work on the development 
of a factory to produce 2m Lithium Sulphur batteries per year. It also 
started work on a GBP7m automotive battery project supported by a grant 
from Innovate UK. The value of the holding fell due to the repricing of 
an investment received in 2018. 
   Orthogem received a CE mark for its putty product in early 2018. Sales 
have started, but in many countries approval based on the CE mark is 
still going through the procedures. First sales have been registered for 
the putty in India. Steve Lane, the former CEO has moved on to another 
company and has been replaced by new Executive Chairman Bruce Venning. 
   In April 2018, OT2 invested GBP150k into Scancell Holdings Plc 
(Scancell) an AIM-listed stock well known to the Directors and 
Investment Adviser. Scancell is developing novel immunotherapies for 
cancer based on two platform technologies known as Immunobody and 
Moditope.  Results from Scancell's first clinical trial for the 
treatment of melanoma continue to be excellent with recurrence free 
survival at 69% at 5 years, surpassing results in other trials of 
ipilimumab (leading immunotherapy for cancer) which showed 46.5% at 3 
   Unfortunately, Scancell has had a steady decline in share price over the 
year. In October 2018, there was an announcement of a delay to the 
planned start of the clinical trial as the FDA had yet to approve the 
Trichor device/SCIB1 combination as an Investigational New Device (IND). 
Post year end, in April 2019, Scancell received all of the regulatory, 
ethical and legal approvals for the UK arm of this trial. Scancell has 
been granted patents for the Modi platform which will give it a very 
strong position going into the future. 
   New Investments in the year 
   In April 2018 GBP150k was invested into Scancell.  There were two 
follow-on investments during the year of GBP12k into ImmBio and GBP59k 
into Orthogem. All new investments have complied with both EU State Aid 
rules and HMRC VCT rules. 
   Disposals during the year 
   No disposals were made during the year. 
   Valuation Methodology 
   Quoted and unquoted investments are valued in accordance with current 
industry guidelines that are compliant with International Private Equity 
and Venture Capital (IPEVC) Valuation Guidelines and current financial 
reporting standards. 
   VCT Compliance 
   Compliance with the main VCT regulations as at 28 February 2019 and for 
the year then ended is summarised as follows: 
Type of Investment 
 By HMRC Valuation Rules     Actual          Target 
                                     Minimum obligation of: 
VCT Qualifying Investments    88%              70% 
                                        Maximum allowed: 
Non-Qualifying Investments    12%              30% 
Total                          100%                    100% 
   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 - 
   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 GBP5m of State Aid investment in the year, nor more than the 
lifetime limit of GBP12m - Complied. 
   Table of Investments held by Company at 28 February 2019 
                                                   Net cost    Carrying      Change 
                                   Date of             of       value at     in value    % equity       % equity 
                                    initial        investment   28/02/19     for the      held by      held by all     % Net 
Company           Description       investment      GBP'000     GBP'000    year GBP'000     OT2          OTVCTs        Assets 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
Select - 
 STL Management   Photocopier 
 Ltd               Interfaces      Nov 2001               132        429             74       7.4             58.6       25.6 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
Arecor             stabilization   Jul 2007               252        295             27       1.8             10.5       17.6 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
ImmBio            Novel vaccines   Dec 2000               267        275             99       2.6             20.9       16.4 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
                  Bone graft 
Orthogem           material          Dec 2000             401        170             69       8.1             30.5       10.1 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
 (Bid Price       Cancer 
 7p)               therapeutics      April 2018           150         88             88       0.3              3.3        5.3 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
                  Active wound 
Insense            dressings       Jun 2001               204         52              -       2.0              6.8        3.1 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
                  Solid state 
Plasma Antennas    antennas          Nov 2001             188         38              -       5.6             48.8        2.3 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
Oxis Energy        batteries       Jan 2000               540         35          (105)       0.2              0.4        2.1 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
Inaplex            integration     Sep 2001               138          9           (10)      21.5             34.8        0.6 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
Totals                                                  2,273      1,391            242 
------------------------------------------------  -----------  ---------  -------------  --------  ---------------  --------- 
Other Net 
 Assets                                                              282                                                 16.9 
----------------  ---------------  -------------  -----------  ---------  -------------  --------  ---------------  --------- 
NET ASSETS                                                         1,673                                                100.0 
------------------------------------------------  -----------  ---------  -------------  --------  ---------------  --------- 
   Number of shares in issue:  5,331,889 
   Net Asset Value per share at 28 February 2019: 31.4p 
   Dividends paid to date per share: 21p per share 
   This table shows the current portfolio holdings.  The investments in 
Acumen, Assertion, Astron Clinica, Ciphergrid, CHR Design, Coraltech, 
Im-Pak, Freehand Surgical, Inscentinel, Jetmask, M3 Networks, OST, 
Promic and SVA have been written off.   The investments in Hardide, 
Commerce Decisions, MET, Telegesis, Equitalk, Duncan Hynd Associates and 
OC Robotics have been sold. 
   Lucius Cary 
   OT2 Managers Ltd 
   Investment Manager 
   21 May 2019 
   Directors' Report 
   The Directors present their report together with Financial Statements 
for the year ended 28 February 2019. 
   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 2000. 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 Venture 
Capital Trust by HMRC. 
   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 28 February 2019 and at 28 February 2018 are set out below: 
   Name                                                      2019                             2018 
   R Roth                                                   44,033                           44,033 
   R Goodfellow                                         14,000                           14,000 
   D Livesley                                                   Nil 
   A Starling                                                   Nil 
   Under the Company's new Articles of Association approved by Shareholders 
in November 2018,  Directors are required to retire by rotation every 
third year.  However, in line with previous years, the Directors have 
elected that one third of their number should still be subject to 
re-election procedures at this year's Annual General Meeting: Richard 
Roth and Alex Starling will therefore be nominated for re-appointment at 
the forthcoming AGM. The Board believes that both non-executive 
Directors continue to provide a valuable contribution to the Company and 
remain committed to their roles. The Board recommends that Shareholders 
support the resolutions to re-elect Richard Roth and Alex Starling at 
the forthcoming AGM. 
   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 July 2015, the Company, along with 
the other VCTs that were managed by Oxford Technology Management, 
appointed directors such that the four VCTs each had a Common Board. In 
addition, Richard Roth has subsequently also become a Director of Seneca 
Growth Capital VCT Plc, a VCT investing in the Med Tech sector which is 
also self-managed and has a number of investments in common with the 
Oxford Technology VCTs. 
   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 Richard Roth has the time to focus 
on the requirements of each OT fund. 
   Investment Management Fees 
   OT2 Managers Ltd, the Company's wholly owned subsidiary, has an 
agreement to provide investment management services to the Company for a 
fee of 1% of net assets per annum.  Alex Starling and Richard Roth, 
together with Lucius Cary are Directors of OT2 Managers Ltd. 
   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. 
   The Board has been informed that the Investment Manager has arrangements 
in place in accordance with the UK Corporate Governance Code's 
recommendations by which staff of Oxford Technology Management or the 
Secretary of the Company may, in confidence, raise concerns within their 
respective organisations about possible improprieties in matters of 
financial reporting or other matters. 
   Bribery Act 2010 
   The Company is committed to carrying out business fairly, honestly and 
openly.  The Investment Manager 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 Manager 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 ( 
   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, Oxford Science Park, 
Oxford OX4 4GA. 
   Going Concern 
   The assets of the Company consist mainly of securities, one of which is 
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 57 the Board has does not have 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 266,590 shares (representing 
approximately 5% of the ordinary share capital as at 2 May 2018). No 
shares were allotted by the Company during the year. 
   The total number of Ordinary Shares of 10p each in issue at 28 February 
2019 was 5,331,889 (2018: 5,331,889) with each share having one vote. 
There are no other share classes in issue. 
   Companies Act 2006 disclosures 
   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 an 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 28 February 2019, the Company has been notified of the following 
investors whose interest exceeds three percent of the Company's issued 
share capital: Redmayne Nominees Limited 6.9% (includes the beneficial 
interests of Ms Shivani Palakpari Shree Parikh, who has a declared 
holding of 6.4%); Barclays Direct Investing Nominees Ltd, 4.9%; Mr 
Richard Vessey, 4.4%; Mrs Mary Louisa Perry, 3.8%; Merrick Sidney 
Whitehouse Feast, 3.2%. 
   As discussed in the Chairman's statement on page 8, UHY Hacker Young LLP 
have been appointed as the independent auditors in accordance with 
Section 489 of the Companies Act 2006, and will offer themselves for 
reappointment at the AGM. 
   On behalf of the Board 
   Richard Roth 
   21  May 2019 
   Directors' Remuneration Report 
   This report has been prepared by the Directors in accordance with the 
requirements of the Companies Act 2006. The Company's independent 
auditor, UHY Hacker Young LLP, is required to give its opinion on 
certain information included in this report. This report includes a 
statement regarding the Directors' Remuneration Policy. This report sets 
out the Company's Directors' Remuneration Policy and the Annual 
Remuneration Report which describes how this policy has been applied 
during the year. 
   The Directors' Remuneration Policy was last approved by shareholders at 
the AGM on 12 July 2018. It needs to be put to a shareholder vote every 
three years, and shareholders will be asked to approve it again at the 
Annual General Meeting in 2021. 
   Shareholders also need to approve the Directors' Remuneration Report 
every year. It was last approved at the AGM on 12 July 2018 on a 
unanimous show of hands and 100% of proxies voted in favour, and a 
Resolution to approve the Directors' Remuneration Report for the year 
ended 28 February 2019 will also be proposed at the Annual General 
Meeting on 3 July 2019. 
   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.  Re-election will be recommended by the 
Board, but is dependent upon shareholder vote. Directors who have been 
in office for more than nine years will stand for annual re-election in 
line with the AIC Code and the Company's Articles of Association. There 
are no service contracts in place, but Directors have a letter of 
   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 
   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 
GBP75,000 per annum unless otherwise approved by Ordinary Resolution of 
the Company. The following Directors' fees are payable by the Company: 
   per annum 
   Director Base Fee                                        GBP3,500 
   Chairman's Supplement                               GBP2,000 
   Audit Committee Chairman                          GBP3,000 
   Audit Committee Member                            GBP1,500 
   The OT2 Director Fees are amongst the lowest of any VCT (apart from the 
other OT VCTs). However, the Board has spent and continues to spend more 
time on Company activities than was initially envisaged in Summer 2015 
(when the fees were last changed) partly due to closer involvement with 
investment, accounting and administration procedures and partly due to 
compliance with additional government regulations. Fees remain at levels 
approved last year. 
   Typically, VCT industry total directors' fees are in excess of GBP50k 
and individual fees in excess of GBP15k for equivalent levels of work. 
   Richard Roth chairs the Company. He also chairs the Audit Committee, 
with Robin Goodfellow as a member of the Committee. As the VCT is 
self-managed, the Audit Committee carries out a particularly important 
role for the VCT and plays a significant part in the sign off of 
quarterly management accounts, and the production of the half year and 
annual statutory accounts. 
   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. 
   Alex Starling and Richard Roth receive no remuneration in respect of 
their directorships of OT2 Managers Ltd, the Company's Investment 
   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 Oxford 
Technology Management, past Directors and current Directors; the 
remaining 80% is returned to shareholders.  At 28 February 2019 no 
performance fee was due. 
   Should any performance fee be payable at the end of the year to 29 
February 2020, Alex Starling, Robin Goodfellow, and Richard Roth would 
each receive 0.32% of any amount over the threshold and David Livesley 
0.85%.  No performance fee will be payable for the year ending 29 
February 2020 unless original shareholders have received back at least 
159.1p in cash for each 100p (gross) invested. 
   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 
   No change to director's remuneration is expected for the year ending 29 
February 2020. 
Directors' Fees   Year End 29/02/20  Year End 28/02/19  Year End 28/02/18* 
                     (unaudited)         (audited)           (audited) 
----------------  -----------------  -----------------  ------------------ 
Richard Roth          GBP8,500           GBP16,500           GBP7,000 
----------------  -----------------  -----------------  ------------------ 
Alex Starling         GBP3,500           GBP5,500            GBP2,000 
----------------  -----------------  -----------------  ------------------ 
Robin Goodfellow      GBP5,000           GBP5,000            GBP3,500 
----------------  -----------------  -----------------  ------------------ 
David Livesley        GBP3,500           GBP3,500            GBP2,000 
----------------  -----------------  -----------------  ------------------ 
Total                 GBP20,500          GBP30,500          GBP14,500 
----------------  -----------------  -----------------  ------------------ 
   *In the year to 28 February 2018, each Director had agreed to waive 
GBP1,500 of their fee 
   In line with the policy set out above, an additional one off payment has 
been made to Richard Roth of GBP8,000 and GBP2,000 to Alex Starling as 
compensation for work undertaken in relation to setting up of the new B 
share structure as well as the preparation of the circular and draft 
prospectus associated with the planned offer for subscription by 
   Income Statement 
                                           Year Ended           Year Ended 
                                        28 February 2019         28 February 2018 
                           Note   Revenue   Capital    Total    Revenue   Capital    Total 
                            Ref.   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
Gain on disposal 
 of fixed asset 
 investments                          -         -         -         -         86        86 
Unrealised gain 
 on valuation of 
 fixed asset investments              -         59        59        -         49        49 
Investment income              2         4         -         4         -         -         - 
Investment management 
 fees                          3       (1)      (13)      (14)       (6)      (19)      (25) 
Other expenses                 4      (67)         -      (67)      (50)         -      (50) 
Return on ordinary 
 activities before 
 tax                                  (64)        46      (18)      (56)       116        60 
Taxation on return 
 on ordinary activities        5         -         -         -         -         -         - 
Return on ordinary 
 activities after 
 tax                                  (64)        46      (18)      (56)       116        60 
Return on ordinary 
 activities after 
 tax attributable 
 equity shareholders                  (64)        46      (18)      (56)       116        60 
Earnings per share 
 -- basic and diluted          6    (1.2)p      0.9p    (0.3)p    (0.9)p      1.9p      1.0p 
   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 Association 
of Investment Companies. 
   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 
   The accompanying notes are an integral part of the Financial Statements. 
   Statement of Changes in Equity 
                                                 Capital              Unrealised   Profit 
                                                Redemption   Share      Capital    & Loss 
                                Share Capital    Reserve     Premium    Reserve    Reserve   Total 
                                   GBP'000       GBP'000     GBP'000    GBP'000    GBP'000   GBP'000 
  As at 1 March 2017                      679            -       376         235     1,238     2,528 
Revenue return on 
 ordinary activities 
 after tax                                  -            -         -           -      (56)      (56) 
Expenses charged to 
 capital                                    -            -         -           -      (19)      (19) 
  Current period gains 
  on disposal                               -            -         -           -        86        86 
Current period gains 
 on fair value of investments               -            -         -          49         -        49 
Purchase of own shares                  (146)          146         -           -     (470)     (470) 
Prior years gains 
 now realised                               -            -         -     (1,224)     1,224         - 
Dividends paid                              -            -         -           -     (427)     (427) 
  Balance as at 28 February 
  2018                                    533          146       376       (940)     1,576     1,691 
  Revenue return on 
  ordinary activities 
  after tax                                 -            -         -           -      (64)      (64) 
Expenses charged to 
 capital                                    -            -         -           -      (13)      (13) 
Current period gains 
 on fair value of investments               -            -         -          59         -        59 
  Balance as at 28 February 
  2019                                    533          146       376       (881)     1,499     1,673 
   The accompanying notes are an integral part of the Financial Statements. 
   Balance Sheet 
                                           Year Ended       Year Ended 
                                         28 February 2019    28 February 2018 
                               Ref.     GBP'000   GBP'000    GBP'000    GBP'000 
Fixed asset investments 
 at fair value                      7                1,391                1,149 
Current assets 
Debtors                             8        168                  166 
Cash at bank                                 126                  386 
Creditors: amounts falling 
 due within 1 year                  9       (12)                 (10) 
Net Current Assets                                     282                  542 
Net Assets                                           1,673                1,691 
Called up equity share 
 capital                           10                  533                  533 
Capital redemption reserve                             146                  146 
Share premium                                          376                  376 
Unrealised capital reserve         11                (881)                (940) 
Profit and loss account 
 reserve                           11                1,499                1,576 
Total Equity Shareholders' 
 Funds                             11                1,673                1,691 
Net Asset Value Per                               31.4p                31.7p 
   The accompanying notes are an integral part of the Financial Statements. 
   The statements were approved by the Directors and authorised for issue 
on 21 May 2019 and are signed on their behalf by: 
   Richard Roth 
   Statement of Cash Flows 
                                       Year Ended         Year Ended 
                                     28 February 2019   28 February 2018 
                                         GBP'000            GBP'000 
Cash flows from operating 
Return on ordinary activities 
 before tax                                      (18)                 60 
Adjustments for: 
Gain on disposal of investments                     -               (86) 
Gain on valuation of investments                 (59)               (49) 
Increase in debtors                               (2)              (164) 
Increase/(decrease) in creditors                    2               (15) 
Movement in investment debtors 
 and creditors                                      -                164 
Outflow from operating activities                (77)               (90) 
Cash flows from investing 
Purchase of investments                         (183)              (230) 
Disposal of investments                             -              1,457 
(Outflows)/inflows from investing 
 activities                                     (183)              1,227 
Cash flows from financing 
Tender Offer                                        -              (470) 
Dividends paid                                      -              (427) 
Outflow from financing activities                   -              (897) 
(Decrease)/increase in cash 
 at bank                                        (260)                240 
Opening cash and cash equivalents                 386                146 
Cash and cash equivalents 
 at year end                                      126                386 
   The accompanying notes are an integral part of the Financial Statements. 
   Notes to the Financial Statements 
   The Financial Statements have been prepared under Financial Reporting 
Standard 102 -- 'The Financial Reporting Standard applicable in the 
United Kingdom and Republic of Ireland' ('FRS 102'). The accounting 
policies have not materially changed from last year. 
   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 UK Generally Accepted 
Accounting Practice ("GAAP"), including FRS 102 and with the Companies 
Act 2006 and the Statement of Recommended Practice (SORP) 'Financial 
Statements of Investment Trust Companies and Venture Capital Trusts 
(revised 2014)' issued by the AIC. 
   The principal accounting policies have remained materially unchanged 
from those set out in the Company's 2018 Annual Report and Financial 
Statements. A summary of the principal accounting policies is set out 
   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 
   Going Concern 
   The assets of the Company consist mainly of securities, one of which is 
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, although this does rely on subjective 
estimates such as appropriate sector earnings 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. 
   Functional and Presentational Currency 
   The Financial Statements are presented in Sterling (GBP). The functional 
currency is also Sterling (GBP). 
   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 or 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 
multiple, revenue multiple, 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 
   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 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 
(2018: none). The change in fair value for the current and previous year 
is recognised in the income statement. 
   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. 
   All expenses are accounted for on an accruals basis.  Expenses are 
charged wholly to revenue with the exception of the investment 
management fee which has been charged 75% to capital and 25% to revenue. 
Any applicable performance fee will be charged 100% to capital. 
   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. 
   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 current 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. 
   Called up Equity Share Capital -- represents the nominal value of shares 
that have been issued. 
   Share Premium Account -- includes any premiums received on issue of 
share capital. Any transaction costs associated with the issuing of 
shares are deducted from the Share Premium Account. 
   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 Reserve as a movement in 
   The Profit and Loss Reserve 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 the Shareholders. 
   2.  Investment Income 
                        Year Ended         Year Ended 
                      28 February 2019   28 February 2018 
                          GBP'000            GBP'000 
Dividends received                   4                  - 
Total                                4                  - 
   3.  Investment Management Fees 
   Expenses are charged wholly to revenue with the exception of the 
investment management fee which has been charged 75% to the capital 
reserve in line with industry practice. 
                               Year Ended         Year Ended 
                             28 February 2019   28 February 2018 
                                 GBP'000            GBP'000 
Investment management fee                  16                 25 
Cost Cap refund from OTM                  (2)                  - 
Total                                      14                 25 
   In the year to 28 February 2019 the manager received a fee of 1% of the 
net asset value as at the previous year end (2018: 1%). Oxford 
Technology Management (OTM) is also entitled to certain monitoring fees 
from investee companies and the Board reviews the amounts. OTM also 
received a further GBP18k in 2018, the final tranche of a payment which 
had been deferred from previous years. This was part of the revised 
agreement, with effect from 1 March 2015. No further liability is 
payable as at 28 February 2018 or 28 February 2019. 
   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 now been increased 
by compounding that portion that remains to be paid to shareholders by 
6% per annum with effect from 1 March 2010, resulting in the remaining 
required threshold rising to 123.9p at 28 February 2019, corresponding 
to a total shareholder return of 151.7p after taking into account the 
27.8p already paid out (27.8p + 123.9 = 151.7p). The 27.8p already paid 
out includes an effective 6.8p (per original share) that was returned to 
shareholders as part of the Tender Offer. 
   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 Oxford Technology Management 
receives 14p. 
   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. Accordingly, Oxford Technology 
Management reduced their Management fee by GBP2,000 (2018: GBPnil), with 
the amount credited to the revenue account. 
   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         Year Ended 
                           28 February 2019   28 February 2018 
                               GBP'000            GBP'000 
Directors' remuneration                  31                 15 
Auditors' remuneration                    7                  6 
Other expenses                           29                 29 
Total                                    67                 50 
   5. Tax on Ordinary Activities 
   Corporation tax payable at 19.0% (2018: 19.1%) is applied to profits 
chargeable to corporation tax, if any.  The corporation tax charge for 
the period was GBPnil (2018: GBPnil) 
                                   Year Ended         Year Ended 
                                 28 February 2019   28 February 2018 
                                     GBP'000            GBP'000 
Return on ordinary activities 
 before tax                                  (18)                 60 
Current tax at standard rate 
 of taxation                                  (3)                 11 
UK dividends not taxable                      (1)                  - 
Unrealised gains not taxable                 (11)                (9) 
Realised gains not taxable                      -               (16) 
Excess management expenses 
 carried forward                               15                 14 
Total current tax charge        -                  - 
   Unrelieved management expenses of GBP1,621,167 (2018: GBP1,539,772) 
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 GBP18,000 (2018: profit of GBP60,000) 
attributable to shareholders divided by the daily weighted average 
number of shares 5,331,889 (2018: 6,080,419) 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     Unquoted 
                                  investments   Investments 
                                    Level 1       Level 3    Total investments 
                                    GBP'000       GBP'000         GBP'000 
Valuation and net book amount:        -             -                - 
Book cost as at 28 February 
 2018                                       -         2,089              2,089 
Cumulative revaluation to 
 28 February 2018                           -         (940)              (940) 
Valuation at 28 February 
 2018                                       -         1,149              1,149 
Movement in the year: 
Purchases at cost                         150            71                221 
Adjustment to cost                          -          (38)               (38) 
Revaluation in year                      (62)           121                 59 
Valuation at 28 February 
 2019                                      88         1,303              1,391 
Book cost at 28 February 
 2019                                     150         2,123              2,273 
Cumulative revaluation to 
 28 February 2019                        (62)         (819)              (881) 
Valuation at 28 February 
 2019                                      88         1,303              1,391 
   Subsidiary Company 
   The Company also holds 100% of the issued share capital of OT2 Managers 
Ltd at a cost of GBP1. Results of the subsidiary undertaking for the 
year ended 28 February 2019 are as follows: 
              Country of     Nature of   Turnover    Retained profit/loss  Net Assets 
               Registration  Business 
------------  -------------  ----------  ----------  --------------------  ---------- 
OT2 Managers   England and   Investment   GBP14,569          GBP0             GBP1 
     Ltd          Wales        Manager 
   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 Oxford Technology 2 VCT plc, which the 
Directors also consider is the most useful presentation for 
   8.  Debtors 
                                   28 February 2019  28 February 2018 
                                        GBP'000           GBP'000 
Prepayments, accrued income & 
 other debtors                                    4                 2 
Deferred consideration from sale 
 of investments                                 164               164 
Total                                           168               166 
   9. Creditors -- amounts falling due in less than 1 year 
                         28 February 2019  28 February 2018 
                              GBP'000           GBP'000 
Creditors and accruals                 12                10 
Total                                  12                10 
   10. Share Capital 
                                       28 February 2019  28 February 2018 
                                            GBP'000           GBP'000 
Allotted, called up and fully 
5,331,889 (2018: 5,331,889) ordinary 
 shares of 10p each                                 533               533 
   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 
Reserve as a movement in reserves. 
   Distributable reserves are GBP618,000 as at 28 February 2019 (2018: 
   Reconciliation of Movement in Shareholders' Funds 
                                28 February 2019  28 February 2018 
                                     GBP'000           GBP'000 
Shareholders' funds at start 
 of year                                   1,691             2,528 
Return on ordinary activities 
 after tax                                  (18)                60 
Purchase of own shares                         -             (470) 
Dividends paid                                 -             (427) 
Shareholders' funds at end 
 of year                                   1,673             1,691 
   12.  Financial Instruments and Risk Management 
   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 overall disposition of the 
Company's assets is regularly monitored by the Board. 
   13. Capital Commitments 
   The Company had no commitments at 28 February 2019 or 28 February 2018. 
   14.  Related Party Transactions 
   OT2 Managers Ltd, a wholly owned subsidiary, provides investment 
management services to the Company with effect from 1 July 2015 for a 
fee of 1% of net assets per annum.  During the year, GBP14,569 was paid 
in respect of these fees (2018: GBP25,283).  No amounts were outstanding 
at the year end. 
   The payment of GBP8,000 to Richard Roth referred to in the Directors' 
Remuneration Report constitutes a smaller related party transaction 
under Listing Rule 11.1.10R. Alex Starling also received a one off 
payment of GBP2,000 at the same time. 
   15.  Events after the Balance Sheet Date 
   During March 2019, OT2 subscribed for further shares in ImmBio, at a 
cost of GBP8k. 
   16.  Control 
   Oxford Technology 2 VCT Plc is not under the control of any one party or 
   Company Number: 3928569 
   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 28 February 2019, income statement and 
cash flow statement for the period then ended have been extracted from 
the Company's 2019 statutory financial statements upon which the 
auditor's opinion is unqualified and does not include any statement 
under the section 495 of the Act. 
   The Annual Report and Accounts for the year ended 28 February 2019 will 
be filed with the Registrar of Companies. 
   Copies of the documents will be submitted to the National Storage 
Mechanism and are available for inspection at: 

(END) Dow Jones Newswires

May 22, 2019 02:01 ET (06:01 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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