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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Oxford Technology 4 Venture Capital Trust Plc | LSE:OXF | London | Ordinary Share | GB00B01H4V84 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 34.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMOXF
21 May 2019
Oxford Technology 4 VCT plc ("the Company" or "OT4")
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:
https://www.globenewswire.com/Tracker?data=ja1Dw5B_f_cBDSbvaHskcblNzO5ExbZxjlGgbXV7cHeiwxvRpKZUGKEQApzQxBS69SAAlLdeDIv9ezgiL6ZhYl9NN8rd37r6UMGStvk5OmOufsBsoXMCvWJIARPZvLPn10jtMWb7xEbfyvCKdesQ0g==
www.oxfordtechnologyvct.com/vct4.html
Financial Headlines
Year Ended Year Ended
28 February 2019 28 February 2018
-----------------
Net Assets at Year End GBP5.64m GBP5.28m
Net Asset Value per Share 49.0p 45.9p
Dividend Paid in August 2018 3p -
Cumulative Dividend per Share 40.0p 37.0p
NAV + Cumulative Dividend Paid
per Share from Incorporation
to 28 Feb 19 89.0p 82.9p
Dividend Paid in April 2019* 3p -
Share Price at Year End 29.5p 39.0p
Earnings Per Share
(Basic & Diluted) 6.1p (6.0)p
-----------------
* The payment of the 3p dividend on 26 April 2019 has reduced the NAV
per share by a corresponding amount.
Chairman's Statement
I am pleased to present my Annual Report for the year to 28 February
2019 to fellow shareholders.
Overview
75% of the Company's assets are now represented by four holdings:
Castleton Technology, Immunobiology, Select Technology and Arecor. All
four have made progress during the year, and this is reflected in both
an increase in the Net Asset Value (NAV), and the ability of your
Company to pay a further interim dividend.
Castleton's share price rose from 68.5p in March 2018 to 89.0p on the 28
February 2019. Your Company has used this strengthening of the share
price to sell a further GBP643k of its shareholding, and this has
allowed the Company to pay a further interim dividend of 3.0p post the
year end. Your Company has now realised GBP2.9m from its original
investment of GBP486k into Impact Applications (excluding repaid loans),
representing a 5.9x multiple on its investment, and still holds around
40% of its Castleton shares.
Immunobiology has continued to progress its vaccine programmes, and has
now signed its first commercial licence with China National Biotech
Group. Arecor raised GBP6 million in 2018 for the clinical development
of its diabetes speciality pharmaceutical portfolio. Select Technology
continues to pursue its new commercial strategy, with sales growing over
the year.
Abzena, the integrated life science group which originally purchased
Warwick Effect Polymers in 2012 was purchased in a cash offer by Astro
Bidco Limited. Your Company realised GBP15k.
An interim dividend of 3.0p per share was paid last year on 31 August
2018, and a further interim dividend of 3.0p on 26 April 2019; currently
the Board of OT4 is not recommending an additional dividend at this
time.
Portfolio Review
The NAV of the Company rose 3.1p during the year, ending at 49.0p per
share (28 February 2018: 45.9p), which including the 3.0p dividend paid
in 2018 takes the total return to 89.0p per share, giving a total return
for the year of 6.1p.
Castleton remains the largest holding in your Company's portfolio,
representing 22.0% of the NAV. At the time of the acquisition of Impact,
the deal structure was part cash on completion, and part shares in
Castleton. Impact shareholders were given the choice of additional cash
up front, or additional shares. Your VCT chose to take additional
shares, which given the rise in the Castleton share price has proven the
correct decision. Castleton continues to grow by acquisition, as well as
by organic growth. 2018 was a year of several commercial milestones,
which has led to a strong share price performance. There have been
several significant sellers in the market, which has restricted your
Company's ability to sell its own shares within the price range set by
the Board, but we have still been able to sell down around 60% of our
holding.
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 GBP57k to support ImmBio during the negotiation of
this licence. As a result of signing the licence, Immunobiology has been
revalued giving an increase in the value of your Company's holding of
over 58% and since the year end a further GBP38k has been invested to
provide working capital until the first royalty payments are received
from the Chinese licensee.
Arecor raised GBP6 million in 2018 for the clinical development of its
diabetes speciality pharmaceutical portfolio. Your Company contributed
GBP99k to the fund raising. 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 ("CTA") for product candidate AT247 has been approved
by the Austrian Federal Office for Safety in Health Care. The
double-blind, randomised, three-way cross over study will compare the
pharmacokinetic and pharmacodynamic profiles of AT247 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.
Select Technology, a photocopier (or more generally Multi Function
Device, or MFD) software company, is the second 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 OT4 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 18.4% stake in this business
has increased in value by over 20% over the course of the 12 months
ending 28 February 2019, and makes up approximately 19% of your
Company's overall NAV. Select Technology is held as a shareholding in
its holding company STL Management Limited.
Your Company also has holdings in eight other companies, which together
represent 20% of the NAV. Whilst these holdings are currently held at
lower valuations, some have potential for future value growth. To
support the growth of these companies, your Company invested a further
GBP79k into Orthogem.
Your Company also invested a further GBP30k into ZuvaSyntha to support
their application and successful bid for a GBP490k Innovate UK grant.
Unfortunately, under EU State Aid Rules ZuvaSyntha was deemed to be "an
undertaking in distress" as it has been funding losses using
shareholders equity and was disqualified from accepting the grant. In
the absence of the grant ZuvaSyntha was unable to continue to trade and
was placed into a solvent dissolution.
Diamond Hard Surfaces (DHS) continues to supply a growing customer base
with its materials in a wide range of sectors, engaging in research and
development projects with both new and existing customers. However,
larger orders are proving slow to crystallise and turnover has dropped.
As DHS is valued on a multiple of turnover this has resulted in a
reduction of the valuation.
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
An interim capital dividend of 3.0p per share was paid last year on 31
August 2018, and a further interim capital dividend of 3.0p on 26 April
2019. The Board of OT4 is not recommending an additional dividend at
this time.
The ongoing strategy is to seek to crystallise value from the portfolio
and distribute cash to shareholders. As a small VCT, our options for
reinvestment are limited due to VCT rules and we expect to continue to
distribute any excess income to shareholders in the form of dividends.
There is a reasonable expectation of continued income from Select
Technology, though our priority is to maximise shareholder value and
liquidity over the medium term by seeking exits for these holdings at
the appropriate time. Castleton Technology has announced that it
expects to pay a dividend this year, which will contribute extra income
to your VCT.
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 thing. In fact, the move away from secondary
capital investment by the VCT industry seems to be going well -- and
this is no bad thing for UK Plc.
Planning for the Future
Shareholders will be aware of previous announcements relating to 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'. This new environment may
present an opportunity for your VCT -- despite not being able to bring
forward proposals on these matters to date. Shareholders will have
noticed developments at sister company Oxford Technology 2 Venture
Capital Trust Plc -- despite this particular opportunity not resulting
in a completion of the intended corporate action, the Board continues to
explore similar options and looks forward to presenting these to
shareholders in due course. However, there can be no certainty that any
of these discussions will lead to a concrete proposal, at this time or
in the future.
Whilst all companies will be affected in some way by the eventual
outcome of Brexit, your Board do not consider any of our portfolio
companies to be at an unusual level of risk dependant on the outcome, as
their trading relationships in Europe are not material to their
immediate future growth. However, your Board is monitoring the on-going
negotiations, and will be prepared to take appropriate action to support
portfolio companies if the situation changes.
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.
AGM
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.
Outlook
The Oxford Technology VCTs have operated and continue to operate very
much in the spirit of the 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.
Looking ahead, the Board continues to believe your VCT is an appropriate
structure to hold your Company's investments. Your Board continues to
work to maximise value and reduce costs so as to best provision your VCT
such that -- when valuations and liquidity allow -- holdings can be
exited and proceeds distributed to shareholders.
David Livesley
Chairman
21 May 2019
Investment Portfolio Review
OT4 was formed in 2004 and has invested in 35 companies which were
start-up or early stage technology companies. Some of these companies
failed with the loss of the investment. Some have succeeded and have
been sold. The table on page 17 shows the companies remaining in the
portfolio. A more detailed analysis is given of the major investments
on the following pages. Several still have the potential to deliver
significant returns.
OT4 received shares in AIM-listed Castleton Technology Plc as part of
the proceeds of sale when Castleton purchased Impact Applications in
2015. Castleton is a provider of software, services and IT
infrastructure to the social, public and commercial housing sector.
During the year Castleton posted its first profits and had several major
contract wins including first contracts in Australia. The effective
price of acquisition of these shares for OT4 was 45p. As at 28
February 2019, the bid price for the shares was 89p. In March 2019 the
Company sold an additional 520,000 Castleton shares at 95p per share to
enable the Company to pay a further dividend to shareholders and provide
continued support of the remaining portfolio.
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 has progressed its insulin programme and has both the fastest
acting and most concentrated formulations in the world. The company
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. GBP57k
was invested in April 2018 and a further GBP38k invested after the year
end, in March 2019, following the signature of the Chinese licence deal.
Dynamic Extractions was formed as a spin-out from Brunel University in
2005. The objective of the company was to commercialise a technology
developed at Brunel University for high performance counter current
chromatography. Initially the business was based on the trading estate
in Slough, and designed and sold HPCCC instruments which were
manufactured by subcontract. The company and its business model have
been transformed in the last few years. The HPCCC instruments have been
redesigned from scratch and the first of the much improved instruments,
manufactured by a subcontractor in Wales emerged in late 2016. Also,
although the sale of HPCCC instruments remains part of the business
(these are now in use all over the world) more of the company's effort
will be devoted to using its own technology to produce valuable
compounds for sale.
In February 2019, the company has secured is first order for a small
quantity of 99.9% CBD (Cannabidiol) which has pain relieving and other
medicinal qualities (but is not psychoactive). This order is from a
start-up company which aims to supply CBD as a means of relieving the
pain of arthritis. Dynamic Extractions' technology is ideally suited to
producing very high purity materials with all the other ingredients in
the mix separated out. So, the expectation is that the number and size
of orders for high purity compounds will now increase.
OT4 was the first investor in Diamond Hard Surfaces (DHS) when the
company was founded in 2004. The objective was to develop a process for
creating a hard diamond like coating that was superior to other similar
coatings. The DHS coating is extremely hard and also has exceptionally
low friction against itself. The technology is a low temperature process
which can be applied to a wide range of substrate materials and
geometries and is applied in sectors such as Aerospace, Oil and Gas and
Electronics. Over the last few years the company has been developing a
coating which has the unusual properties of being an almost perfect
electrical insulator while having three times the thermal conductivity
of copper. This coating has now been branded ThermaSp3c(TM).
This coating is used as a heat sink -- removing heat from chips which
are working particularly hard (and therefore getting hot) particularly
in defense applications. Interest in this particular product has been
growing and the prospects for 2019 look encouraging, despite the
uncertain economic/political landscape. The company continues to supply
a growing customer base with its materials in a wide range of sectors,
engaging in research and development projects with both new and existing
customers.
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. 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.
ZuvaSyntha is in the process of being wound up and is not expected to
return any money.
New Investments in the year
There were four follow on investments during the year of GBP57k into
ImmBio, GBP30k into ZuvaSyntha, GBP79k into Orthogem and GBP99k into
Arecor. All new investments have complied with both EU State Aid rules
and HMRC VCT rules.
Disposals during the year
During the year Historic Futures was dissolved and OT4 received GBP7k.
The remaining shares in Abzena were also sold for GBP15k. Further
shares in Castleton have been disposed of during the year yielding
GBP643k and enabling the payment of the dividend of 3p per share on 31
August 2018. Glide Technologies was dissolved in October 2018, but there
was no impact in the P&L as the investment had been fully provided for.
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
VCT Qualifying Investments 88% Minimum obligation of: 70.0%
Non-Qualifying Investments 12% Maximum allowed: 30.0%
Total 100.0% 100.0%
At least 70% of each investment must be in eligible shares - Complied.
No more than 15% of the income from shares and securities is retained -
Complied.
No investment constitutes more than 15% of the Company's portfolio (by
value at time of investment or when the holding is added to) - Complied.
The Company's income in the period has been derived wholly or mainly
(70% plus) from shares or securities - Complied.
No investment made by the VCT has caused the company to receive more
than 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
Carrying Change
Date of Net cost value at in value % equity
initial of investment 28/02/19 for the % equity held by % Net
Company Description investment GBP'000 GBP'000 year GBP'000 held OT4 all OTVCTs Assets
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Castleton
Technology
(Bid Price Mobile software
89p) for contractors Oct 2005 115 1,243 (348) 1.7 1.7 22.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Select- STL
Management Photocopier
Ltd Interfaces Aug 2006 237 1,064 183 18.4 58.6 18.9
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
ImmBio Novel vaccines Oct 2005 789 1,011 558 12.0 20.9 17.9
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Arecor Protein stabilization Jul 2007 590 907 172 5.6 10.5 16.1
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Diamond Hard
Surfaces Diamond coatings Jan 2005 640 337 (182) 49.9 49.9 6.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Separation
Dynamic Extractions technology Aug 2005 377 313 - 30.4 30.4 5.6
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Bone graft
Orthogem material May 2007 309 227 92 10.9 30.5 4.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Rechargeable
Oxis Energy batteries Nov 2005 305 90 (44) 0.2 0.4 1.6
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Active wound
Insense healing dressings Apr 2005 476 67 - 2.5 6.8 1.2
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Antibiotics
Novacta Development Apr 2005 347 59 - 2.3 2.3 1.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Solid state
Plasma Antennas antennas Mar 2005 700 41 - 30.9 48.8 0.8
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
MirriAd Advertising
(Bid Price Virtual product
15p) placement May 2015 - 7 (15) 0.0 0.0 0.1
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Production
Metal Nanopowers of metal nanopowers Aug 2006 52 - (4) 16.7 36.7 0.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Superhard Very hard
Materials materials Feb 2012 9 - (1) 18.2 40.0 0.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Microbial
ZuvaSyntha technology Feb 2012 413 - (162) 29.1 29.1 0.0
-------------------- --------------------- ------------ -------------- --------- ------------- --------- ----------- -------
Totals 5,359 5,366 249 95.2
--------------------------------------------------------- -------------- --------- ------------- --------- ----------- -------
Other Net
Assets 273 4.8
--------------------------------------------------------- -------------- --------- ------------- --------- ----------- -------
NET ASSETS 5,639 100.0
--------------------------------------------------------- -------------- --------- ------------- --------- ----------- -------
Number of shares in issue: 11,516,946
Net Asset Value per share at 28 February 2019: 49.0p
Dividends paid to date: 40.0p at 28 February 2019 with a further 3p paid
on 26 April 2019.
The table shows the current portfolio holdings. The investments in
Bluewater Bio, Cutting the Wires, Dynamic Discovery, EKB, Ingenious,
Inspiration Matters, Kinomi, Glide Technologies, Historic Futures and
Water Innovate have been written off. The investments in Dexela,
Imagineer Systems, Impact Applications, Incentec, Mecira, OxTox, Pharma
Engineering, Telegesis, Naked Objects and Abzena have been sold. Some
Castleton shares have also been sold.
Lucius Cary - Director
OT4 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 2004. The Company invests in start-up
and early stage technology companies in general located within 60 miles
of Oxford. The Company has maintained its approved status as a Venture
Capital Trust by HMRC.
Directors
The Directors of the Company are required to notify their interests
under Disclosure and Transparency Rule 3.12R. The membership of the
Board and their beneficial interests in the ordinary shares of the
company at 28 February 2019 and at 28 February 2018 are set out below:
Name 2019 2018
D Livesley 3,499 3,499
R Goodfellow 20,000 20,000
R Roth 44,310 44,310
A Starling Nil Nil
Under the Company's Articles of Association one third of the Directors
are required to retire by rotation each year. David Livesley and Alex
Starling will 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 David Livesley 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
OT4 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. David Livesley and Richard Roth,
together with Lucius Cary are Directors of OT4 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.
Whistleblowing
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 (
https://www.globenewswire.com/Tracker?data=ja1Dw5B_f_cBDSbvaHskcblNzO5ExbZxjlGgbXV7cHeiwxvRpKZUGKEQApzQxBS6zinSooQzliAucAKoYcTDKTXL7NGu3fYGu6cS47bwrCBe-VxD2fLtpZL_dZuJJcURdCI1b_GEzJZ29PrroVq5FQ==
www.oxfordtechnologyvct.com/vct4.html)
Shareholders have the opportunity to meet the Board at the Annual
General Meeting. In addition to the formal business of the AGM the
Board is available to answer any questions a shareholder may have.
The Board is also happy to respond to any written queries made by
shareholders during the course of the year and can be contacted at the
Company's registered office: Magdalen Centre, Oxford Science Park,
Oxford OX4 4GA.
Going Concern
The assets of the Company consist mainly of securities, two of which are
AIM quoted, quite liquid and readily accessible, as well as cash. After
making enquiries, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for
the foreseeable future. For this reason, they have adopted the going
concern basis in preparing the Financial Statements.
Share Capital
As disclosed on page 59, the Board has authority to make market
purchases of the Company's own shares. No shares were purchased by the
Company during the year.
The Board has authority to allot up to 575,840 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 11,516,946 (2018: 11,516,946) 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 any employee share scheme;
-- There exist no agreements to which the Company is party that may affect
its control following a takeover bid; and
-- There exist no agreements between the Company and its Directors providing
for compensation for loss of office that may occur following a takeover
bid or for any other reason.
Substantial Shareholders
At 28 February 2019, the Company has been notified of the following
investors whose interest exceeds three percent of the Company's issued
share capital: State Street Nominees Limited, 8.9% (representing the
beneficial interest of Oxfordshire County Council Pension Fund) and
Hargreaves Lansdown Nominees Limited, 5.6%.
Auditors
As discussed in the Chairman's statement on page 7, 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 up for
reappointment at the AGM.
On behalf of the Board
David Livesley
Chairman
21 May 2019
Directors' Remuneration Report
Introduction
This report has been prepared by the Directors in accordance with the
requirements of the Companies Act 2006. The Company's independent
auditor, 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 99.8% of proxies voted in favour. 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, with at least one Director standing for
election or re-election each 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. There are no service contracts in
place, but Directors have a letter of appointment.
Directors' Remuneration Policy
The Board acts as the Remuneration Committee and meets annually to
review Directors' pay to ensure it remains appropriate given the need to
attract and retain candidates of sufficient calibre and ensure they are
able to devote the time necessary to lead the Company in achieving its
strategy.
The Articles of Association of the company state that the aggregate of
the remuneration (by way of fee) of all the Directors shall not exceed
GBP50,000 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 OT4 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 the
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.
David Livesley chairs the Company. Richard Roth 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. Directors may at their
discretion pay additional sums in respect of specific tasks carried out
by the individual Directors on behalf of the Company.
David Livesley and Richard Roth receive no remuneration in respect of
their directorships of OT4 Managers Ltd, the Company's Investment
Manager.
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 0.27% of any amount over the threshold and David Livesley
1.17%. No performance fee will be payable for the year ending 29
February 2020 unless original shareholders have received back at least
122.2p 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)
---------------- ----------------- ----------------- -----------------
David Livesley GBP5,500 GBP5,500 GBP5,500
---------------- ----------------- ----------------- -----------------
Richard Roth GBP6,500 GBP6,500 GBP6,500
---------------- ----------------- ----------------- -----------------
Robin Goodfellow GBP5,000 GBP5,000 GBP5,000
---------------- ----------------- ----------------- -----------------
Alex Starling GBP3,500 GBP3,500 GBP3,500
---------------- ----------------- ----------------- -----------------
Total GBP20,500 GBP20,500 GBP20,500
---------------- ----------------- ----------------- -----------------
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 - 185 185 - - -
Unrealised gain/
(loss) on valuation
of fixed asset
investments - 617 617 - (579) (579)
Investment income 2 11 - 11 - - -
Investment management
fees 3 (13) (40) (53) (15) (45) (60)
Other expenses 4 (56) - (56) (56) - (56)
Return on ordinary
activities before
tax (58) 762 704 (71) (624) (695)
Taxation on return
on ordinary activities 5 - - - - - -
Return on ordinary
activities after
tax (58) 762 704 (71) (624) (695)
Return on ordinary
activities after
tax attributable
to
equity shareholders (58) 762 704 (71) (624) (695)
Earnings per share
-- basic and diluted 6 (0.5)p 6.6p 6.1p (0.6)p (5.4)p (6.0)p
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
funds.
The accompanying notes are an integral part of the Financial Statements.
Statement of Changes in Equity
Profit
Unrealised & Loss
Share Capital Share Premium Capital Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 March 2017 1,152 813 (878) 4,888 5,975
Revenue return on ordinary
activities after tax - - - (71) (71)
Expenses charged to capital - - - (45) (45)
Current period losses
on fair value of investments - - (579) - (579)
Balance as at 28 February
2018 1,152 813 (1,457) 4,772 5,280
Revenue return on ordinary
activities after tax - - - (58) (58)
Expenses charged to capital - - - (40) (40)
Current period gains
on disposal - - - 185 185
Current period gains
on fair value of investments - - 617 - 617
Prior years' unrealised
losses now realised - - 847 (847) -
Dividends paid - - - (345) (345)
Balance as at 28 February
2019 1,152 813 7 3,667 5,639
The accompanying notes are an integral part of the Financial Statements.
Balance Sheet
Year Ended Year Ended
28 February 2019 28 February 2018
Note
Ref. GBP'000 GBP'000 GBP'000 GBP'000
Fixed Asset Investments
At Fair Value 7 5,366 5,141
Current Assets
Debtors 8 2 2
Cash At Bank 284 147
Creditors: Amounts
Falling Due
Within 1 Year 9 (13) (10)
Net Current Assets 273 139
Net Assets 5,639 5,280
--------------------------- -------- --------- -------- --------- --------
Called Up Equity Share
Capital 10 1,152 1,152
Share Premium 813 813
Unrealised Capital
Reserve 11 7 (1,457)
Profit and Loss Account
Reserve 11 3,667 4,772
Total Equity Shareholders'
Funds 11 5,639 5,280
Net Asset Value Per 49.0p 45.9p
Share
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
David Livesley
Chairman
Statement of Cash Flows
Year Ended Year Ended
28 February 2019 28 February 2018
GBP'000 GBP'000
Cash flows from operating
activities
Return on ordinary activities
before tax 704 (695)
Adjustments for:
Gain on disposal of investments (185) -
(Gain)/loss on valuation
of investments (617) 579
Increase/(decrease) in creditors 3 (24)
Outflow from operating activities (95) (140)
Cash flows from investing
activities
Purchase of investments (265) (149)
Disposal of investments 842 -
Inflow / (outflow) from investing
activities 577 (149)
Cash flows from financing
activities
Dividends paid (345) -
Outflow from financing activities (345) -
Increase/(decrease) in cash
at bank 137 (289)
Opening cash and cash equivalents 147 436
Cash and cash equivalents
at year end 284 147
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
below.
FRS 102 sections 11 and 12 have been adopted with regard to the
Company's financial instruments. The Company held all fixed asset
investments at fair value through profit or loss. Accordingly, all
interest income, fee income, expenses and gains and losses on
investments are attributable to assets held at fair value through profit
or loss.
The most important policies affecting the Company's financial position
are those related to investment valuation and require the application of
subjective and complex judgements, often as a result of the need to make
estimates about the effects of matters that are inherently uncertain and
may change in subsequent periods. These are discussed in more detail
below.
Going Concern
The assets of the Company consist mainly of securities, two of which are
AIM quoted, quite liquid and readily accessible, as well as cash. After
reviewing the Company's forecasts and expectations, the Directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. The
Company therefore continues to adopt the going concern basis in
preparing its Financial Statements.
Key Judgements and Estimates
The preparation of the Financial Statements requires the Board to make
judgements and estimates regarding the application of policies and
affecting the reported amounts of assets, liabilities, income and
expenses. Estimates and assumptions mainly relate to the fair valuation
of the fixed asset investments particularly unquoted investments.
Estimates are based on historical experience and other assumptions that
are considered reasonable under the circumstances. The estimates and the
assumptions are under continuous review with particular attention paid
to the carrying value of the investments.
Investments are regularly reviewed to ensure that the fair values are
appropriately stated. Unquoted investments are valued in accordance with
current IPEVC Valuation Guidelines, which can be found on their website
at www.privateequityvaluation.com, although this does rely on subjective
estimates such as appropriate sector earnings 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
companies.
Fair Value Hierarchy
Paragraph 34.22 of FRS 102 regarding financial instruments that are
measured in the balance sheet at fair value requires disclosure of fair
value measurements dependent on whether the stock is quoted and the
level of the accuracy in the ability to determine its fair value. The
fair value measurement hierarchy is as follows:
For Quoted Investments:
Level 1: quoted prices in active markets for an identical asset. The
fair value of financial instruments traded in active markets is based on
quoted market prices at the balance sheet date. A market is regarded as
active if quoted prices are readily and regularly available, and those
prices represent actual and regularly occurring market transactions on
an arm's length basis. The quoted market price used for financial assets
held is the bid price at the Balance Sheet date.
Level 2: where quoted prices are not available (or where a stock is
normally quoted on a recognised stock exchange that no quoted price is
available), the price of a recent transaction for an identical asset,
providing there has been no significant change in economic circumstances
or a significant lapse in time since the transaction took place. The
Company held no such investments in the current or prior year.
For investments not quoted in an active market:
Level 3: the fair value of financial instruments that are not traded in
an active market is determined by using valuation techniques. These
valuation techniques maximise the use of observable data (e.g. the price
of recent transactions, earnings multiple, discounted cash flows and/or
net assets) where it is available and rely as little as possible on
entity specific estimates.
There has been no transfer between classifications in the year (2018:
Mirriad Advertising Limited listed on AIM and is now Mirriad Advertising
Plc). Any change in fair value for the current and previous year is
recognised in the income statement.
Income
Investment income includes interest earned on bank balances and from
unquoted loan note securities, and dividends. Fixed returns on debt are
recognised on a time apportionment basis so as to reflect the effective
yield, provided it is probable that payment will be received in due
course. Dividend income from investments is recognised when the
shareholders' rights to receive payment have been established, normally
the ex dividend date.
Expenses
All expenses are accounted for on an accruals basis. 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.
Taxation
Current tax is recognised for the amount of income tax payable in
respect of the taxable profit for the current or past reporting periods
using the 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.
Reserves
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 reserves.
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.
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 GBP27k 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 been increased by
compounding that portion that remains to be paid to shareholders by 6%
per annum with effect from 1 March 2015, resulting in the remaining
required threshold rising to 77.5p at 28 February 2019, corresponding to
a total shareholder return of 117.5p after taking into account the 40p
already paid out (40p + 77.5p = 117.5p).
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 15p. 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.
Year Ended Year Ended
28 February 2019 28 February 2018
GBP'000 GBP'000
Dividends received 11 -
Total 11 -
3. Investment Management Fees
Expenses are charged wholly to revenue with the exception of the
investment management fee which has been charged 75% to capital in line
with industry practice.
Year Ended Year Ended
28 February 2019 28 February 2018
GBP'000 GBP'000
Investment management fee 53 60
Total 53 60
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 GBP27k 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 been increased by
compounding that portion that remains to be paid to shareholders by 6%
per annum with effect from 1 March 2015, resulting in the remaining
required threshold rising to 77.5p at 28 February 2019, corresponding to
a total shareholder return of 117.5p after taking into account the 40p
already paid out (40p + 77.5p = 117.5p).
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 15p. No performance fee has become due or been paid to date.
Any applicable performance fee will be charged 100% to capital.
Expenses are capped at 3%, including the management fee, but excluding
Directors' fees and any performance fee.
4. Other Expenses
All expenses are accounted for on an accruals basis. All expenses are
charged through the income statement except as follows:
-- those expenses which are incidental to the acquisition of an investment
are included within the cost of the investment;
-- expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment.
Year Ended Year Ended
28 February 2019 28 February 2018
GBP'000 GBP'000
Directors' remuneration 21 21
Auditors' remuneration 8 6
Other expenses 27 29
Total 56 56
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 704 (695)
Current tax at standard rate of
taxation 134 (133)
UK dividends not taxable (2) -
Unrealised (gains)/losses not
taxable (117) 111
Realised gains not taxable (35) -
Excess management expenses carried
forward 20 22
Total current tax charge - -
Unrelieved management expenses of GBP2,242,461 (2018: GBP2,134,147)
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 gain of GBP704,000 (2018: loss of GBP695,000)
attributable to shareholders divided by the weighted average number of
shares 11,516,946 (2018: 11,516,946) in issue during the period.
There are no potentially dilutive capital instruments in issue and,
therefore, no diluted returns per share figures are relevant. The basic
and diluted earnings per share are therefore identical.
7. Investments
AIM quoted investments Unquoted 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 225 6,373 6,598
Cumulative revaluation to
28 February 2018 1,413 (2,870) (1,457)
Valuation at 28 February
2018 1,638 3,503 5,141
Movement in the year:
Purchases at cost - 265 265
Disposals -- cost (110) (1,394) (1,504)
Disposals - revaluation (547) 1,394 847
Revaluation in year 269 348 617
Valuation at 28 February
2019 1,250 4,116 5,366
Book cost at 28 February
2019 115 5,244 5,359
Cumulative revaluation to
28 February 2019 1,135 (1,128) 7
Valuation at 28 February
2019 1,250 4,116 5,366
Subsidiary Company
The Company also holds 100% of the issued share capital of OT4 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
OT4 Managers England and Investment
Ltd Wales Manager GBP52,809 GBP0 GBP1
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 4 VCT plc, which the
Directors also consider is the most useful presentation for
Shareholders.
8. Debtors
28 February 2019 28 February 2018
GBP'000 GBP'000
Prepayments, accrued income & other
debtors 2 2
Total 2 2
9. Creditors -- amounts falling due in less than 1 year
28 February 2019 28 February 2018
GBP'000 GBP'000
Creditors and accruals 13 10
Total 13 10
10. Share Capital
28 February 2019 28 February 2018
GBP'000 GBP'000
Allotted, called up and fully paid:
11,516,946 (2018: 11,516,946) ordinary
shares of 10p each 1,152 1,152
11. Reserves
When the Company revalues its investments during the period, any gains
or losses arising are credited/charged to the Income Statement. Changes
in fair value of investments are then transferred to the Unrealised
Capital Reserve. When an investment is sold any balance held on the
Unrealised Capital Reserve is transferred to the Profit and Loss Account
Reserve as a movement in reserves.
Distributable reserves are GBP3,667,000 at 28 February 2019 (2018:
3,315,000).
Reconciliation of Movement in Shareholders' Funds
28 February 2019 28 February 2018
GBP'000 GBP'000
Shareholders' funds at start of
year 5,280 5,975
Return on ordinary activities after
tax 704 (695)
Dividends paid (345) -
Shareholders' funds at end of year 5,639 5,280
------------------------------------ ---------------- ----------------
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 quoted and 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
OT4 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, GBP52,809 was paid
in respect of these fees (2018: GBP59,754). No amounts were outstanding
at the year end.
15. Events after the Balance Sheet Date
During March 2019, OT4 subscribed for ImmBio shares at a cost of GBP38k.
520,000 Castleton shares were sold at 95p per share during March 2019
(GBP494k).
OT4 declared a dividend of 3p per share on 4 April 2019. This dividend
was paid on 26 April 2019.
16. Control
Oxford Technology 4 VCT Plc is not under the control of any one party or
individual.
Company Number: 5038854
Note to the announcement:
The financial information set out in this announcement does not
constitute statutory accounts as defined in the Companies Act 2006 ("the
Act"). The balance sheet as at 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:
https://www.globenewswire.com/Tracker?data=I3JncpN0C3iHadUnam4spTdHv2Lm8KT8GjvbbpPxY0NGOibw4PcGHHNJIHBb7WaJzhsTq1Us67NkW2ofKTvc5PSKj00dOsEvVQvEjATJ_lQ8rnDNG6CG73CuBL7D_fm64bmUg3wZCcgvMLbvSLJfVg==
http://www.mornningstar.co.uk/uk/NSM
(END) Dow Jones Newswires
May 22, 2019 02:01 ET (06:01 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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