TIDMBSC
RNS Number : 2506T
British Smaller Companies VCT2 Plc
24 March 2016
British Smaller Companies VCT2 plc
Annual Financial Report Announcement for
the Year ended 31 December 2015
British Smaller Companies VCT2 plc ("the Company") today
announces its audited results for the year ended 31 December
2015.
Financial Highlights
-- An increase in total return of 4.2 per cent to 110.9 pence
per ordinary share (2014: 106.4 pence per ordinary share).
-- An increase in net asset value of 4.5 pence per ordinary
share prior to the payment of dividends, representing a 7.2 per
cent increase on the opening net asset value.
-- 12.6 per cent underlying growth in the investment portfolio.
-- Total dividends paid in the year of 4.5 pence per ordinary
share (2014: 4.5 pence per ordinary share).
-- Total cumulative dividends paid since inception of 48.0 pence
per ordinary share (2014: 43.5 pence per ordinary share).
-- Proposed final dividend of 2.5 pence per ordinary share in
respect of the year ended 31 December 2015.
-- Successful joint fundraising with British Smaller Companies
VCT plc during the year, raising new funds of GBP14.7 million.
Chairman's Statement
Following a significant number of investments in 2014, your
Company's portfolio delivered a strong performance during the year
to 31 December 2015, producing a return of 12.6 per cent over its
opening value, which enabled your Company to maintain its NAV per
ordinary share at 62.9 pence whilst paying dividends of 4.5 pence
per ordinary share, which represented a yield of 7.2 per cent on
the opening NAV per ordinary share.
The changes to the VCT rules, originally announced in the Summer
2015 budget, created a great deal of uncertainty for all venture
capital trusts and as a result the Board took the view that they
would only complete new investments where they could obtain
advanced assurance from HMRC. Consequently, only two new unquoted
investments amounting to GBP3.0 million were completed by your
Company in the year, compared to 11 in 2014. These were womenswear
retailer Ness (Holdings) Limited, and rail and communications
equipment manufacturer KeTech Enterprises Limited.
The new legislation finally received Royal Assent on 18 November
2015. Although HMRC have delayed issuing their final guidance on
the new rules it is already clear that the range of companies that
your Company can invest in will be more restricted than before and
they may have a higher risk profile. The Board and your Company's
Investment Adviser have adapted quickly to the new rules and the
investment pipeline now contains an encouraging number of new,
eligible opportunities. Although the time taken to implement these
new rules disrupted the flow of investment in 2015, and the delay
in issuing guidance has further disrupted the pattern of new
investments, the Board fully expects to make further additions to
the portfolio in 2016.
Financial Results
In the year to 31 December 2015 your Company's total return
increased by 4.5 pence per ordinary share to 110.9 pence per
ordinary share, driven mainly by underlying value growth in the
investment portfolio. This equates to an increase of 7.2 per cent
on the opening net asset value at 31 December 2014.
During the year your Company has paid total dividends of 4.5
pence per ordinary share, bringing the total cumulative dividends
paid since inception to 48.0 pence per ordinary share. The net
asset value at 31 December 2015 is 62.9 pence per share as
summarised in the table below:
Pence per ordinary GBP000
share
--------------------- -----------------
NAV at 31 December
2014 62.9 39,333
Net underlying increase
in portfolio 4.0 3,548
Net income 0.7 584
Issue/buy-back of
new shares (0.2) 15,272
4.5 19,404
Dividends paid (4.5) (3,887)
----------- -------- -------- -------
- 15,517
----------- -------- -------- -------
NAV at 31 December
2015 62.9 54,850
----------- -------- -------- -------
The charts on page 12 of the annual report show in greater
detail the movement in total return, net asset value and dividends
paid over time.
The investments held at 31 December 2014, amounting to GBP28.22
million, have over the year increased by GBP3.55 million to
GBP31.77 million at 31 December 2015. This return comprises a gain
over the opening value from the realisation of investments and
deferred proceeds of GBP0.23 million, and a gain on the revaluation
of portfolios of GBP3.32 million. Good value gains were seen across
the portfolio, as a result of improved trading results and delivery
of value growth strategies; these were however partially offset by
a decline in the value of two investments.
Shareholder Relations
Dividends
The Board remains committed to achieving the objective of a
consistent and, where possible, increasing dividend stream over
time whilst seeking to maintain capital value. Dividends paid in
the year comprise a final dividend of 2.5 pence per ordinary share
in respect of the year ended 31 December 2014, and an interim
dividend of 2.0 pence per ordinary share in respect of the
financial year just ended, totalling 4.5 pence per ordinary share.
This brings the cumulative dividends paid to 48.0 pence per
ordinary share.
The Board is pleased to propose a final dividend of 2.5 pence
per ordinary share for the year ended 31 December 2015. This final
dividend is subject to approval by the shareholders at the
forthcoming Annual General Meeting and if approved will then be
paid on 9 May 2016 to shareholders on the register at 8 April 2016.
The ex-dividend date is 7 April 2016.
Dividend Reinvestment Scheme ("DRIS")
Your Company operates a DRIS, which gives shareholders the
opportunity to re-invest any cash dividends and is open to all
shareholders, including those who invested under the recent offers.
For the financial year ending 31 December 2015 dividends totalling
GBP0.7 million were invested in the Company by way of the DRIS.
Fundraising
During the first half of the financial year your Company raised
a total of GBP14.7 million, leaving it well funded to take
advantage of investment opportunities as they arise. Shortly after
the year end a further GBP3.5 million was raised by way of a EUR5.0
million top up offer and 5.7 million new shares were allotted.
Following this allotment the total number of shares in issue was
92.9 million.
Shareholder communications
As part of its ongoing review of costs, and in line with current
Environmental, Social & Corporate Governance best practice, the
Company is committed to promoting electronic communications with
shareholders. The Board has implemented an electronic
communications policy, whereby documents such as the annual report
are disseminated via the website www.bscfunds.com, rather than by
post. This will save on printing costs and be more environmentally
friendly. I am pleased to report that this policy has been well
received by shareholders with 84 per cent opting to receive
electronic communications.
In addition, the website www.bscfunds.com has recently been
refreshed with the emphasis on providing a comprehensive level of
information in a user-friendly format.
The next Investor Workshop will take place on 17 May 2016 and is
being held at the Conference Centre, The British Library, near
Kings Cross station.
The Annual General Meeting of the Company will be held at 12:00
noon on 6 May 2016 at 33 St James Square, London, SW1Y 4JS. Full
details of the agenda for this meeting are included in the Notice
of the Annual General Meeting on page 76 of the annual report.
Regulatory Changes
The changes that have been introduced during 2015 to the
regulations surrounding VCTs (and EIS) have arisen as a result of
an EU review of the use of state aided investment in the UK. The
EU's guidelines, Risk Capital Finance ("RCF"), set out the
operating framework for investment schemes that receive state aid
and the income tax reliefs received by VCT investors are classified
as state aid. These guidelines were the subject of some revision
with the latest set coming into force on 1 January 2015.
The UK legislation that has now been enacted as part of the
Finance (No. 2) Act 2015 includes changes to reflect the
requirements of the RCF. VCTs have to comply with both the UK
legislation and the RCF and are subject to review by both HMRC and
HM Treasury and the EU.
The principal changes that have been made are to the definitions
of Qualifying Holdings and what VCTs are able to do with
non-qualifying money.
In summary Qualifying Holdings are now restricted to companies,
less than ten years old if classed as knowledge intensive, or seven
years old if not, and into older companies where the VCT investment
is either not the first state aided investment the company has
received (if they received such money within seven years of first
trading) or that the VCT investment is "substantial in relation to
the size of the company" and the monies are used to fund the
company's growth into new product markets and/or new
geographies.
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
There are also restrictions on the use of funds prior to them
being invested in Qualifying Holdings; this is known in the
legislation as the liquidity test. This is restricted to shares or
securities on a regulated market, certain liquid funds and cash.
Notably AIM is excluded, as it is not a regulated market, which
means new non-qualifying investments on AIM will not be allowed.
Your Company's investment policy will be amended to reflect
this.
Impact of the Regulatory Changes
Existing portfolio
The new rules apply to all investments from the date of Royal
Assent, 18 November 2015. The Board and the Investment Adviser have
reviewed the existing portfolio. Although in some cases further
investment into the existing portfolio will be restricted, the
Board believes that there will be no material impact on the
portfolio as a whole.
New investments
The investment policy and mandate is set out on page 10 of the
annual report. Although the Board believes that the overall pool of
potential investments available to the VCT market as a whole will
be restricted from previous levels, and may be of higher risk, your
Company has always had a policy of investing in small companies to
support their growth plans and will be able to continue to follow
this policy under the new legislation.
Although the new rules preclude VCTs from providing replacement
capital the Investment Adviser manages some non-VCT funds that are
free of this restriction, which will allow your Company to
participate in investments where an element of replacement capital
is needed.
The Board has taken a cautious approach to the new legislation
with a policy of only completing investments for which HMRC
advanced assurance is given, which itself is only granted for
investments that meet the Qualifying Holdings test. It is
encouraging that advance assurances are now being given and we have
seen investment activity resume. HMRC's detailed guidance is
planned to be issued shortly which it is hoped will reduce the
level of uncertainty and will further increase the level of
advanced assurances that can be given.
Subsequent Events
On 3 March 2016 your Company realised its investment in
Callstream Group Limited for proceeds of GBP0.7 million, in line
with the 31 December 2015 carrying value.
Outlook
While there is still some uncertainty over how HMRC will
implement the new VCT rules in practice, the Board is confident
that there are sufficient opportunities available to allow your
Company to continue investing. However, it is possible that the
overall level of investment will be lower than experienced in
previous years, and consequently the Board will keep under close
review the need for and scale of any future fundraisings.
Additionally there may be greater volatility in the income and
capital returns from new investments.
Your Company has a strong and well diversified portfolio which
continues to deliver a strong performance and remains well
positioned to deliver future value growth.
Richard Last
Chairman
Objectives and Key Policies
The Company's objective is to provide investors with an
attractive long-term tax free dividend yield whilst seeking to
maintain and build the capital value of their investment and
maintain the Company's status as a venture capital trust.
Investment Policy
The investment strategy of the Company is to create a portfolio
with a mix of companies operating in traditional industries and
those that offer opportunities in the development and application
of innovation.
The legislation governing VCTs requires that at least 70 per
cent by value of its holdings must be in Qualifying Holdings. The
maximum value of any single investment is 15 per cent at the time
of investment.
The Company invests in UK businesses across a broad range of
sectors including, but not limited to, Software, IT &
Telecommunications, Business Services, Manufacturing &
Industrial Services, Retail & Brands and Healthcare, in VCT
qualifying and non-qualifying securities.
The Company invests in a range of securities which may include
ordinary and preference shares and fixed income securities, such as
corporate bonds and gilts. Unquoted investments are structured so
as to spread risk and enhance revenue yields, usually as a
combination of ordinary shares, preference shares and loan
stocks.
Borrowing
The Company funds the investment programmes out of its own
resources and has no borrowing facilities for this purpose.
Co-investment
British Smaller Companies VCT plc and British Smaller Companies
VCT2 plc ("the VCTs") have in aggregate first choice of all
investment opportunities meeting the VCT qualifying criteria that
require up to GBP4.5 million of equity. Amounts above GBP4.5
million may be allocated one third to YFM's institutional
co-investment funds and two thirds to the VCTs. Where there are
opportunities for the VCTs to co-invest with each other the basis
for allocation is 40 per cent to the Company and 60 per cent to
British Smaller Companies VCT plc. The Board of the Company has
discretion as to whether or not to take up, or in the circumstances
where British Smaller Companies VCT plc does not take its
allocation, increase its allocation in such co-investment
opportunities.
Asset mix
Pending investment in VCT-qualifying securities, surplus cash is
primarily held in interest bearing instant access, notice and fixed
term bank accounts. Subsequent to the Finance (No. 2) Act 2015
investments can no longer be made in non-qualifying quoted
investments traded on an unregulated exchange. This change
therefore now excludes AIM investments from this category.
Remuneration Policy
The Company's policy on the remuneration of its directors, all
of whom being non-executive directors, can be found on page 43 of
the annual report.
Other Key Policies
Details of the Company's policies on the payment of dividends,
the dividend re-investment scheme and the buy-back of shares are
given on page 2 of the annual report. In addition to these the
Company's anti-bribery and environmental and social
responsibilities policies can be found on page 32 of the annual
report.
Processes and Operations
The Investment Adviser is responsible for the sourcing and
screening of initial enquiries, carrying out suitable due diligence
investigations and making submissions to the Board regarding
potential investments. Once approved, further due diligence is
carried out as necessary and HMRC clearance is obtained for
approval as a Qualifying Holding.
The Board approves all investment and divestment decisions save
in that new investments up to GBP250,000 in companies whose
securities are traded on a regulated stock exchange and where the
decision is required urgently, in which case the Chairman of the
Board of Directors, if appropriate, may act in consultation with
the Investment Adviser.
The Board regularly monitors the performance of the portfolio
and the investment requirements set by the relevant VCT
legislation. Reports are received from the Investment Adviser
regarding the trading and financial position of each investee
company and senior members of the Investment Advisory Team
regularly attend the Company's Board meetings. Monitoring reports
are also received at each Board meeting on compliance with VCT
regulations so that the Board can monitor that the Venture Capital
Trust status of the Company is maintained and take corrective
action if appropriate.
The Board reviews the terms of YFM Private Equity Limited's
appointment as Investment Adviser on a regular basis.
YFM Private Equity Limited has performed investment advisory,
administrative and secretarial services for the Company since its
inception on 28 November 2000. The principal terms of the agreement
under which these services are performed are set out in note 3 to
the financial statements.
Performance Incentive
The Investment Adviser will receive an amount (satisfied by the
issue of shares) equivalent to 20 per cent of the amount by which
the cumulative dividends per ordinary share paid as at the last
business day in December in any year, plus the average of the
middle market price per ordinary share on the five dealing days
prior to that day, exceeds 120 pence per ordinary share, multiplied
by the number of ordinary shares issued and the ordinary shares
under option (if any) (the "Hurdle"). Under the terms of the
Subscription Rights Agreement, once the Hurdle has been exceeded it
is reset at that value going forward, which becomes the new Hurdle.
Any subsequent exercise of these rights will only occur once the
new Hurdle has been exceeded. The subscription rights are
exercisable in the ratio 95:5 between the Investment Adviser and
Chord Capital Limited. Further details are given in note 3 to the
financial statements.
In the opinion of the directors the continuing appointment of
YFM Private Equity Limited as Investment Adviser is in the
interests of the shareholders as a whole in view of its experience
in advising venture capital trusts and in making, managing and
exiting investments of the kind falling within the Company's
investment policies.
Key Performance Indicators
The commonly used benchmarks of performance for VCTs are total
return, calculated as cumulative dividends paid plus net asset
value, and dividends paid. The charts on page 12 of the annual
report show the performance history of these benchmarks.
Total Return
The evaluation of comparative success of the Company's total
return is by way of reference to the share price total return for
approximately 60 generalist VCTs as published by the Association of
Investment Companies ("the AIC"). This is the Company's stated
benchmark index. A comparison and explanation of the calculation of
this return is shown in the Directors' Remuneration Report on page
45 of the annual report.
Shareholder Returns
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
The table below shows the cumulative dividends, the total return
on each fundraising round per ordinary share and the total return
if a shareholder had opted to participate in the Company's DRIS.
The cumulative dividend and total return figures in this table
exclude the benefits of all tax reliefs, whilst the last column
includes the benefit of tax reliefs as noted.
Tax year Net Cumulative Total Offer Offer Overall
asset dividends return price price return
value paid since net including
as at since fundraising of tax relief
31 December fundraising / date initial since
2015 (1) of acquisition tax fundraising
relief with
participation
in the
DRIS
(2)
Pence Pence Pence Pence Pence Pence
--------------------------- ------------- ------------- ---------------- --------- ------- ---------------
2000/01 and 2001/02 62.90 48.00 110.90 80.00 100.00 167.26
2001/02 and 2002/03 62.90 48.00 110.90 80.00 100.00 167.26
December 2005 issue
of shares on acquisition
of British Smaller
Technology Companies
(3) 43.19 32.03 75.22 80.00 100.00 150.47
2009/10 and 2010/11 62.90 26.00 88.90 54.08 77.25 127.97
2010/11 and 2011/12 62.90 22.00 84.90 49.18 70.25 118.65
2012 62.90 18.00 80.90 49.35 70.50 111.65
2012/13 and 2013/14 62.90 13.50 76.40 47.60 68.00 103.46
2013/14 and 2014/15 62.90 9.00 71.90 47.60 68.00 96.35
2014/15 and 2015/16 62.90 4.50 67.40 45.50 65.00 88.74
Notes
1. This assumes that at the time of investment the tax relief
given on the investment was not also invested in shares of the
Company.
2. NAV plus tax relief on the initial subscription plus
additional tax relief and NAV on DRIS shares purchased. Assuming
that all dividends since inception were invested under terms of
current DRIS.
3. Assuming initial offer price and initial tax relief from
original subscription in British Smaller Technology Companies VCT
plc.
Expenses
Ongoing Charges figure
The Board monitors expenses using the Ongoing Charges figure, as
calculated in line with the AIC recommended methodology. This
figure shows shareholders the annual percentage reduction in net
asset value as a result of recurring operational expenses which,
whilst based on historical information, provides an indication of
the likely level of costs that will be incurred in managing the
fund in the future.
Year to Year to
31 December 31 December
2015 (%) 2014 (%)
----------------- ------------- -------------
Ongoing Charges
figure 2.28 2.56
Expenses Cap
The total costs incurred by the Company in the year (excluding
any performance related fees, trail commission payable to financial
intermediaries and VAT) is capped at 2.9 per cent of the total Net
Asset Value as at the relevant year end. The treatment of costs in
excess of the cap is described in note 3 on page 59 of the annual
report. There was no breach of the expenses cap in the current or
prior year.
Compliance with VCT Legislative Tests
The main business risk facing the Company is the retention of
VCT qualifying status. The Board receives regular reports on
compliance with the VCT legislative tests from its Investment
Adviser. In addition the Board receives formal reports from its VCT
Status Adviser twice a year. The Board can confirm that during the
period all of the VCT legislative tests have been met.
Under Chapter 3 Part 6 of the Income Tax Act 2007, in addition
to the requirement for a VCT's ordinary share capital to be listed
in the Official List on a European regulated market throughout the
period, there are a further five specific tests that VCTs must meet
following the initial three year provisional period:
Income Test
The Company's income in the period must be derived wholly or
mainly (70 per cent) from shares or securities. The Company
complied with this test in the period, with 91.62 per cent (2014:
89.68 per cent) of income being derived from such sources.
Retained Income Test
The Company must not retain more than 15 per cent of its income
from shares and securities. The Company complied with this test in
the period, with 0 per cent (2014: 0 per cent) of income being
retained in the period subject to payment of the final dividend to
be approved at the Annual General Meeting on 6 May 2016.
Qualifying Holdings Test
At least 70 per cent by value of the Company's investments must
be represented throughout the period by shares or securities
comprised in Qualifying Holdings of investee companies. The Company
complied with this test, with 93.07 per cent (2014: 77.54 per cent)
of value being in Qualifying Holdings.
Eligible Shares Test
At least 30 per cent of the Company's Qualifying Holdings must
be represented throughout the period by holdings of
non-preferential ordinary shares. The Company complied with this
test, with 39.14 per cent (2014: 39.95 per cent) of value being in
holdings of eligible ordinary shares.
For monies raised from 6 April 2011 onwards the eligible shares
test highlighted above increases to at least 70 per cent of
Qualifying Holdings that must be represented by eligible shares.
The Company complied with this test, with 77.63 per cent (2014:
76.92 per cent) of value being in holdings of eligible ordinary
shares.
In addition, monies are not permitted to be used to finance
buy-outs or otherwise to acquire existing businesses or shares.
There is also an annual limit for each investee company which
provides that they may not raise more than GBP5.0 million of state
aid investment (including from VCTs) in the 12 months ending on the
date of each investment.
The Board and Investment Adviser are mindful of these additional
requirements and of balancing investments to ensure continued
compliance.
Maximum Single Investment Test
The value of any one investment has, at any time in the period,
not represented more than 15 per cent of the Company's total
investment value. This is calculated at the time of investment and
further additions and therefore cannot be breached passively. The
Company has complied with this test with the highest such value
being 4.62 per cent (2014: 5.24 per cent).
Dividends from cancelled share premium
The Finance Act 2014 introduced a restriction with respect to
the use of monies in respect of VCT's. In particular, no dividends
can be paid out of cancelled share premium arising from shares
allotted on or after 6 April 2014 until at least three financial
years have elapsed. In the case of the Company this is 1 January
2018.
From the share premium cancellation of GBP13.55 million on 10
October 2014, GBP1.34 million remains undistributable until 1
January 2018.
Other
The Finance (No. 2) Act 2015 imposes further conditions in
respect of investments, including those regarded as non-qualifying
investments, including:
i) An aggregate limit of GBP12 million (or GBP20 million for
Knowledge Intensive Companies) on the amount of State Aid Risk
Finance investment a business can receive during its lifetime;
ii) No more than seven years can have elapsed since the first
commercial sale achieved by the business (ten years in the case of
a Knowledge Intensive Company), unless:
a. the business has previously received an investment from a
fund that has received state aid, or
b. the investment comprises more than 50 per cent of the average
of the previous five years' turnover and the funds are to be used
in the business to fund growth into new product markets and/or new
geographies.
Investment performance
Set out on page 15 of the annual report is a profile of the
investment portfolio by age, value compared to cost and investment
instrument.
This illustrates the broad range of the investment portfolio
with over one quarter of the portfolio valuation being held for
more than three years, whilst 81 per cent is held at cost or
above.
64 per cent of the portfolio's value is held in income
generating financial instruments, enabling a greater proportion of
the Company's future returns to derive from income rather than
capital.
Also included on page 15 of the annual report is a profile of
the investment portfolio by industry sector.
Investment review
The portfolio delivered a strong performance in the year, with a
return of GBP3.55 million on the opening value and income of
GBP1.95 million that was a 54 per cent increase over the previous
year.
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
The portfolio as a whole delivered an increased value of GBP3.55
million in the year. The majority of this has come from the
unquoted portfolio, where the improved profitability of many
companies generated a value gain of GBP2.96 million. This has
enabled the Company to maintain its strong investor returns with
the NAV per ordinary share being maintained at 62.9 pence after the
payment of dividends totalling 4.5 pence per ordinary share. The
proposed final dividend is 2.5 pence per ordinary share. Since the
year end one investment of GBP0.2 million has been completed and
the Company realised its investment in Callstream Group Limited for
GBP0.7 million, in line with the 31 December 2015 carrying
value.
Investment portfolio GBPmillion %
------------------------------- ----------- ------
Unquoted value gain 2.96 83.4
Quoted value gain 0.36 10.1
Gain on disposal over opening
value 0.22 6.2
------------------------------- ----------- ------
3.54 99.7
Gain from deferred proceeds 0.01 0.3
------------------------------- ----------- ------
Total Value Movement 3.55 100.0
------------------------------- ----------- ------
At 31 December 2015 the investment portfolio was valued at
GBP36.7 million, representing 66.8 per cent of net assets (71.7 per
cent at 31 December 2014). Cash at 31 December 2015 was GBP17.4
million representing 31.8 per cent of net assets (27.0 per cent at
31 December 2014).
Significant Investment Movements
Unquoted
The GBP2.96 million unrealised valuation gain from the unquoted
portfolio is as a result of improved profitability by a number of
businesses. The top four value gains in the period are:
-- Intelligent Office (via IO Outsourcing Limited) (GBP1.00 million)
-- ACC Aviation (via Newacc (2014) Limited) (GBP0.42 million)
-- DisplayPlan Holdings Limited (GBP0.34 million)
-- GTK (Holdco) Limited (GBP0.30 million)
These gains were partially offset by two companies which saw
profits impacted by difficult trading conditions:
-- The Heritage Window Company Holdco Limited (down GBP0.37 million)
-- Ness (Holdings) Limited (down GBP0.25 million)
Quoted
Overall the quoted portfolio produced a return of GBP0.36
million. The main contributor was AB Dynamics plc with a gain of
GBP0.44 million, which was offset by Brady plc with a fall of
GBP0.23 million.
Investments
During the year ended 31 December 2015 the Company completed
thirteen investments totalling GBP7.3 million. This comprised new
investments of GBP5.9 million and follow-on investments of GBP1.4
million. The analysis of these investments is shown below:
Date Company Investments
made GBPmillion
New Follow-on Total
-------- --------------------------- ---- ---------- ------
Jan-15 Gooch & Housego plc* 0.4 - 0.4
Mar-15 Ness (Holdings) Limited 1.0 - 1.0
Mar-15 Brady plc * - 0.4 0.4
EL Support Services
Apr-15 Limited 0.5 - 0.5
NB Technology Services
Apr-15 Limited 0.5 - 0.5
OC Engineering Services
Apr-15 Limited 0.5 - 0.5
SH Healthcare Services
Apr-15 Limited 0.5 - 0.5
SP Manufacturing Services
Apr-15 Limited 0.5 - 0.5
Sep-15 Immunobiology Limited - 0.3 0.3
KeTech Enterprises
Nov-15 Limited 2.0 - 2.0
Springboard Research
Nov-15 Holdings Limited - 0.4 0.4
The Heritage Window
Nov-15 Company Holdco Limited - 0.2 0.2
Dec-15 Intamac Systems Limited - 0.1 0.1
-------- --------------------------- ---- ---------- ------
Invested in the year 5.9 1.4 7.3
Capitalised interest
and dividends 0.1
------------------------------------ ---- ---------- ------
Total additions in
the year 7.4
------------------------------------ ---- ---------- ------
*Quoted company
Disposal of Investments
During the year to 31 December 2015 the Company received
proceeds from disposals, repayments of loans and deferred
consideration of GBP2.48 million. Overall this resulted in a value
gain on disposal of investments of GBP0.23 million compared to 31
December 2014 valuations as set out below.
Net proceeds Opening Gain
from sales value on opening
of investments 31 December value
GBPmillion 2014 GBPmillion
GBPmillion
------------------- ---------------- ------------- ------------
Sale of portfolio
investments 2.46 2.24 0.22
Deferred proceeds 0.02 0.01 0.01
------------------- ---------------- ------------- ------------
Total investment
disposals 2.48 2.25 0.23
------------------- ---------------- ------------- ------------
The most significant proceeds related to the sale in October
2015 of the Company's investment in software company Insider
Technologies (Holdings) Limited for proceeds of GBP0.77
million.
A further analysis of all investments sold in the year can be
found in note 7 to the financial statements on page 65 of the
annual report.
Portfolio Composition
As at 31 December 2015 the portfolio had a value of GBP36.7
million which comprised GBP34.0 million in unquoted investments
(92.7 per cent) and GBP2.7 million in quoted investments (7.3 per
cent). An analysis of the movements in the year is shown on page 21
of the annual report.
The portfolio remains well diversified, with 24 investments
having a value greater than GBP0.5 million, compared to 21 a year
earlier.
The charts on page 15 of the annual report show the composition
of the portfolio as at 31 December 2015 by industry sector, age of
investment, investment instrument and the valuation compared to
cost. This demonstrates representation across a wide range of
industry sectors.
Valuation Policy
Unquoted investments are valued in accordance with the valuation
policy set out on in note 1 on page 55 of the annual report, which
takes account of current industry guidelines for the valuation of
venture capital portfolios. Adjustments to fair value are made
where an investment is significantly under-performing. As at 31
December 2015 the number of investments falling into each valuation
category is shown in the table below:
Valuation % of
GBPmillion portfolio
by value
-------------------------------------- ------------ -----------
Earnings multiple 23.6 64%
Cost, reviewed for change in fair
value 8.0 22%
Price of recent investment, reviewed
for change in fair value 2.4 7%
Quoted investments at bid price 2.7 7%
-------------------------------------- ------------ -----------
Total 36.7 100%
-------------------------------------- ------------ -----------
Summary and Outlook
Your Company is well positioned to take advantage of the
opportunities to invest in younger companies seeking development
capital and the existing portfolio is delivering good growth.
Whilst the introduction of the most recent legislation will
reduce the overall pool of investments for the VCT industry as a
whole, there is a good pipeline of opportunities and YFM Private
Equity Limited has a strong track record in making development
capital investments.
We believe that 2016 will see an increased level of investment
which, combined with several good exit prospects, should allow the
Board to achieve its aim of improving the Company's total
return.
Investment Portfolio Summary at 31 December 2015
Name of Date Location Industry Current Proceeds Valuation Realised
company of initial Sector cost to at & unrealised
investment date 31 return
December to date
2015
GBP000 GBP000 GBP000 GBP000
---------------- ------------- ------------------ ---------------- -------- --------- ---------- --------------
Unquoted
Portfolio
Intelligent
Office
(via IO
Outsourcing Business
Limited) May-14 Alloa services 1,956 - 3,350 3,350
Mangar
Health
Limited Jan-14 Powys Healthcare 1,640 - 2,201 2,201
KeTech Software,
Enterprises IT &
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
Limited Nov-15 Nottingham Telecoms 2,000 - 2,000 2,000
ACC Aviation
(via Newacc
(2014) Business
Limited) Nov-14 Reigate services 1,379 - 1,801 1,801
Gill Marine
Holdings Retail
Limited Sep-13 Nottingham & brands 1,870 - 1,778 1,778
DisplayPlan
Holdings Business
Limited Jan-12 Baldock services 70 820 1,753 2,573
Springboard
Research
Holdings Business
Limited Oct-14 Bedfordshire services 1,646 - 1,646 1,646
Manufacturing
GTK (Holdco) & Ind
Limited Oct-13 Basingstoke Services 813 337 1,560 1,897
Business Software,
Collaborator IT &
Limited Nov-14 Reading Telecoms 1,340 - 1,384 1,384
Immunobiology
Limited Jun-03 Cambridge Healthcare 2,232 - 1,311 1,311
Cambrian
Park &
Leisure
Homes Limited
(via Cambrian
Lodges Manufacturing
Holdings & Ind
Limited) Oct-14 Gwynedd Services 1,133 67 1,243 1,310
Seven
Technologies Software,
Holdings IT &
Limited Apr-12 Belfast Telecoms 1,238 762 1,208 1,970
Leengate Manufacturing
Holdings & Ind
Limited Dec-13 Derbyshire Services 934 - 1,143 1,143
The Heritage
Window
Company Manufacturing
Holdco & Ind
Limited Sep-14 Sevenoaks Services 1,468 - 1,101 1,101
Harvey
Jones Holdings Retail
Limited May-07 London & brands 911 282 1,099 1,381
Macro Art
Holdings Business
Limited Jun-14 Cambridgeshire services 731 108 984 1,092
Intamac Software,
Systems IT &
Limited Jun-14 Northampton Telecoms 828 - 828 828
Wakefield
Acoustics
(via Malvar Manufacturing
Engineering & Ind
Limited) Dec-14 Heckmondwike Services 761 - 761 761
Ness (Holdings) Retail
Limited Mar-15 Edinburgh & brands 1,012 - 759 759
Software,
Callstream Henley-in IT &
Group Limited Sep-10 Arden Telecoms 329 265 679 944
Software,
PowerOasis IT &
Limited Nov-11 Swindon Telecoms 594 - 594 594
Retail
& brands
/
Manufacturing
Bagel Nash & Ind
Group Limited Jul-11 Leeds Services 655 173 583 756
Other investments
GBP0.5
million
and below 3,792 349 4,202 4,551
--------------------------------------------------------------------- -------- --------- ---------- --------------
Total unquoted investments 29,332 3,163 33,968 37,131
--------------------------------------------------------------------- -------- --------- ---------- --------------
Quoted
Portfolio
Manufacturing
AB Dynamics & Ind
plc May-13 Bradford-on-Avon Services 253 - 809 809
Gooch & Manufacturing
Housego & Ind
plc Jan-15 Ilminster Services 397 - 502 502
Other investments
GBP0.5
million
and below 1,573 372 1,373 1,745
--------------------------------------------------------------------- -------- --------- ---------- --------------
Total quoted investments 2,223 372 2,684 3,056
--------------------------------------------------------------------- -------- --------- ---------- --------------
31,555 3,535 36,652 40,187
Full disposals
to date 17,707 24,091 - 24,091
--------------------------------------------------------------------- -------- --------- ---------- --------------
Total investment portfolio 49,262 27,626 36,652 64,278
--------------------------------------------------------------------- -------- --------- ---------- --------------
Disposal History to 31 December 2015
Name of Company Date Date Industry Cost Proceeds Capital Gains
of of sector to return (losses)
initial disposal date multiple on
investment disposal
GBP000 GBP000 x GBP000
----------------------- ------------- ----------- -------------- ------- --------- ---------- ----------
Cozart plc Jul-04 Oct-07 Healthcare 1,566 2,978 1.90 1,412
Sarian Systems
Limited* Dec-05 Apr-08 Telecoms 928 2,605 2.81 1,677
DxS Limited Apr-04 Sep-09 Healthcare 163 2,515 15.43 2,352
Vibration Technology
Limited** Mar-02 Sep-06 Industrial 1,061 2,328 2.19 1,267
Primal Pictures Medical
Limited* Dec-05 Sep-12 instruments 961 2,268 2.36 1,307
Medical
Sirigen Group Limited Jun-10 Sep-12 technology 517 1,884 3.64 1,367
Amino Technologies
plc** Sep-01 Nov-04 Electronics 415 1,872 4.51 1,457
Waterfall Services Business
Limited Feb-07 Dec-14 services 483 1,422 2.94 939
Digital Healthcare Medical
Limited Jun-05 Aug-13 instruments 3,072 1,285 0.42 (1,787)
Insider Technologies
(Holdings) Limited Aug-12 Oct-15 Software 780 773 0.99 (7)
Pressure Technologies
plc Jun-07 Jul-15 Industrial 302 657 2.18 355
The ART Technology
Group Inc.** Apr-03 Oct-09 Software 275 638 2.32 363
Tamesis Limited** Jul-01 Sep-07 Software 150 317 2.11 167
Optos plc* Dec-05 Jan-14 Healthcare 152 316 2.08 164
Tekton Group Limited Dec-05 Dec-06 Software 103 296 2.87 193
Tikit Group plc May-11 Jan-13 Software 198 283 1.43 85
Oxonica plc** May-02 Sep-09 Chemical 241 258 1.07 17
Group NBT plc May-11 Nov-11 IT support 197 256 1.30 59
Business
Vianet Group plc Oct-06 Sep-14 services 243 176 0.72 (67)
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
Patsystems plc Sep-07 Jan-12 Software 317 164 0.52 (153)
Hargreaves Services
plc Aug-12 Jun-15 Transport 325 160 0.49 (165)
Cambridge Cognition
Holdings plc May-02 Jun-15 Healthcare 240 157 0.65 (83)
May Gurney Integrated
Services plc May-11 Mar-13 Construction 211 141 0.67 (70)
Arakis Limited Mar-04 Aug-05 Healthcare 14 108 7.71 94
SoseiCo Limited Aug-05 Feb-06 Healthcare 158 94 0.59 (64)
Voxar Limited* Dec-05 Nov-06 Software - 91 - 91
Sirus Pharmaceuticals
Limited** Sep-01 Mar-04 Healthcare 270 18 0.07 (252)
Broadreach Networks
Limited** Feb-03 Dec-05 Telecoms 550 17 0.03 (533)
Focus Solutions
Group plc* Dec-05 Feb-06 Software 7 7 1.00 -
Oxis Energy Limited* Dec-05 Dec-12 Electronics 5 4 0.80 (1)
2ergo Group plc May-11 Jun-13 Software 197 3 0.02 (194)
Ellfin Home Care
Limited Dec-07 Dec-13 Healthcare 317 - - (317)
Infinite Data Storage
Limited** Mar-02 Dec-10 Software 425 - - (425)
Purely Proteins
Limited** Nov-03 Dec-05 Software 438 - - (438)
ExpressOn Biosystems
Limited** Oct-02 Dec-05 Healthcare 450 - - (450)
Comvurgent Limited* Dec-05 Dec-12 Software 611 - - (611)
Silistix Limited** Dec-03 Dec-10 Electronics 1,365 - - (1,365)
----------------------- ------------- ----------- -------------- ------- --------- ---------- ----------
Total 17,707 24,091 6,384
------------------------------------------------------------------- ------- --------- ---------- ----------
Investment acquired solely from the merger with
* British Smaller Technology Companies VCT plc
in December 2005
Investment made prior to 31 December 2003
**
Summary of investment portfolio movement since 31 December
2014
Name of Company Investment Disposal Additions Valuation Investment
Valuation Proceeds including gains Valuation
at 31 capitalised including at 31
December interest profits December
2014 and / (losses) 2015
dividends on disposal
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ----------- ---------- ------------- ------------- -----------
Intelligent Office
(via IO Outsourcing
Limited) 2,355 - - 995 3,350
Mangar Health Limited 2,081 - - 120 2,201
KeTech Enterprises
Limited - - 2,000 - 2,000
ACC Aviation (via Newacc
(2014) Limited) 1,379 - - 422 1,801
Gill Marine Holdings
Limited 1,732 - - 46 1,778
DisplayPlan Holdings
Limited 2,008 (592) - 337 1,753
Springboard Research
Holdings Limited 1,186 - 460 - 1,646
GTK (Holdco) Limited 1,365 (103) - 298 1,560
Business Collaborator
Limited 1,340 - - 44 1,384
Immunobiology Limited 987 - 300 24 1,311
Cambrian Park & Leisure
Homes Limited (via
Cambrian Lodges Holdings
Limited) 1,200 (67) - 110 1,243
Seven Technologies
Holdings Limited 924 - - 284 1,208
Leengate Holdings Limited 1,080 - - 63 1,143
The Heritage Window
Company Holdco Limited 1,268 - 200 (367) 1,101
Harvey Jones Holdings
Limited 1,194 (282) - 187 1,099
Macro Art Holdings
Limited 847 (87) - 224 984
Intamac Systems Limited 750 - 78 - 828
Wakefield Acoustics
(via Malvar Engineering
Limited) 720 - 41 - 761
Ness (Holdings) Limited - - 1,013 (254) 759
Callstream Group Limited 773 - - (94) 679
PowerOasis Limited 594 - - - 594
Bagel Nash Group Limited 590 (80) 2 71 583
Insider Technologies
(Holdings) Limited 522 (773) - 251 -
Other investments GBP0.5
million and below 1,193 - 2,500 509 4,202
Quoted companies 2,128 (474) 761 269 2,684
--------------------------- ----------- ---------- ------------- ------------- -----------
Total 28,216 (2,458) 7,355 3,539 36,652
--------------------------- ----------- ---------- ------------- ------------- -----------
Risk Factors
The Board carries out a regular review of the risk environment
in which the Company operates. The principal risks and
uncertainties identified by the Board and techniques used to
mitigate these risks are set out in this section.
The Board seeks to mitigate its principal risks by setting
policy, regularly reviewing performance and monitoring progress and
compliance. In the mitigation and management of these risks, the
Board applies rigorously the principles detailed in section C.2:
"Risk Management & Internal Control" of The UK Corporate
Governance Code issued by the Financial Reporting Council in
September 2014. Details of the Company's internal controls are
contained in the Corporate Governance and Internal Control sections
on page 41 of the annual report and further information on exposure
to risks including those associated with financial instruments is
given in note 17 of the annual report.
Loss of Approval as a VCT
Risk - The Company must comply with Chapter 3 Part 6 of the
Income Tax Act 2007 which allows it to be exempted from corporation
tax on capital gains. Any breach of these rules may lead to the
Company losing its approval as a VCT, qualifying shareholders who
have not held their shares for the designated holding period having
to repay the income tax relief they obtained and future dividends
paid by the Company becoming subject to tax. The Company would also
lose its exemption from corporation tax on capital gains.
Mitigation - One of the Key Performance Indicators monitored by
the Company is the compliance with legislative tests. Details of
how the Company manages these requirements can be found under the
heading "Compliance with VCT Legislative Tests" on page 14 of the
annual report.
Economic
Risk - Events such as recession and interest rate fluctuations
could affect investee companies' performance and valuations.
Mitigation - As well as the response to 'Investment and
Strategic' risk below the Company has a clear investment policy
(summarised on page 10 of the annual report) and a diversified
portfolio operating in a range of sectors. The Investment Adviser
actively monitors investee performance which provides quality
information for monthly reviews of the portfolio.
Investment and Strategic
Risk - Inappropriate strategy, poor asset allocation or
consistently weak stock allocation may lead to under performance
and poor returns to shareholders. The quality of enquiries,
investments, investee company management teams and monitoring, and
the risk of not identifying investee under performance might also
lead to under performance and poor returns to shareholders.
Mitigation - The Board reviews strategy annually. At each of the
Board meetings the directors review the appropriateness of the
Company's objectives and stated strategy in response to changes in
the operating environment and peer group activity. The Investment
Adviser carries out due diligence on potential investee companies
and their management teams and utilises external reports where
appropriate to assess the viability of investee businesses before
investing. Wherever possible a non-executive director will be
appointed to the board of the investee.
Regulatory
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
Risk - The Company is required to comply with the Companies Act
2006, the rules of the UK Listing Authority, the Prospectus Rules
made by the Financial Conduct Authority and International Financial
Reporting Standards as adopted by the European Union and is subject
to the EU's Alternative Investment Fund Manager's Directive. Breach
of any of these might lead to suspension of the Company's Stock
Exchange listing, financial penalties or a qualified audit
report.
Mitigation - The Investment Adviser and the Company Secretary
have procedures in place to ensure recurring Listing Rules
requirements are met and actively consult with brokers, solicitors
and external compliance advisers as appropriate. The key controls
around regulatory compliance are explained on page 41 of the annual
report.
Reputational
Risk- Inadequate or failed controls might result in breaches of
regulations or loss of shareholder trust.
Mitigation - The Board is comprised of directors with suitable
experience and qualifications who report annually to the
shareholders on their independence. The Investment Adviser is
well-respected with a proven track record and has a formal
recruitment process to employ experienced investment staff.
Allocation rules relating to co-investments with other funds
advised by the Investment Adviser, have been agreed between the
Investment Adviser and the Company. Advice is sought from external
advisors where required. Both the Company and the Investment
Adviser maintain appropriate insurances.
Operational
Risk - Failure of the Investment Adviser's and administrator's
accounting systems or disruption to its business might lead to an
inability to provide accurate reporting and monitoring.
Mitigation - The Investment Adviser has a documented disaster
recovery plan.
Financial
Risk - Inadequate controls might lead to misappropriation of
assets. Inappropriate accounting policies might lead to
misreporting or breaches of regulations.
Mitigation - The key controls around financial reporting are
described on page 41 of the annual report.
Market/Liquidity
Risk - Lack of liquidity in both the venture capital and public
markets. Investment in unquoted and AIM quoted companies, by their
nature, involve a higher degree of risk than investment in
companies trading on the main market. In particular, smaller
companies often have limited product lines, markets or financial
resources and may be dependent for their management on a smaller
number of key individuals. The fact that a share is traded on AIM
does not guarantee its liquidity. The spread between the buying and
selling price of such shares may be wide and thus the price used
for valuation may not be achievable. In addition, the market for
stock in smaller companies is often less liquid than that for stock
in larger companies, bringing with it potential difficulties in
acquiring, valuing and disposing of such stock.
Mitigation - Overall liquidity risks are monitored on an ongoing
basis by the Investment Adviser and on a quarterly basis by the
Board. Sufficient investments in cash and fixed income securities
are maintained to pay expenses as they fall due.
Other Matters
The Board recognises the requirement under Section 414C of the
Companies Act 2006 to detail information about environmental
matters (including the impact of the Company's business on the
environment), employee, human rights, social and community issues,
including information about any policies it has in relation to
these matters and effectiveness of these policies.
The Company seeks to ensure that its business is conducted in a
manner that is responsible to the environment. The management and
administration of the Company is undertaken by the Investment
Adviser. YFM Private Equity Limited recognises the importance of
its environmental responsibilities, monitors its impact on the
environment and implements policies to reduce any damage that might
be caused by its activities. Initiatives of the Investment Adviser
designed to minimise its and the Company's impact on the
environment include recycling and reducing energy consumption.
Given the size and nature of the Company's activities and the fact
that it has no employees, the Board considers there is limited
scope to develop and implement social and community policies.
Anti-Bribery and Corruption Policy
The Company has a zero tolerance approach to bribery. The
following is a summary of its policy:
-- it is the Company's policy to conduct all of its business in
an honest and ethical manner. The Company is committed to acting
professionally, fairly and with integrity in all its business
dealings and relationships;
-- the directors of the Company, the Investment Adviser and any
other service providers must not promise, offer, give, request,
agree to receive or accept financial or other advantage in return
for favourable treatment, to influence a business outcome or gain
any business advantage on behalf of the Company or encourage others
to do so; and
-- the Company has communicated its anti-bribery policy to the
Investment Adviser and its other service providers.
The Company had no employees during the year. The Board is
composed of three male non-executive directors. For a review of the
policies used when appointing directors to the Board of the Company
please refer to the Directors' Remuneration Report in the annual
report.
Directors' Responsibilities Statement
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare the financial
statements for each financial year. Under that law the directors
are required to prepare the financial statements and have elected
to prepare the Company's financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. Under company law the directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss for the Company for that
period.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare a strategic report, directors' report and directors'
remuneration report which comply with the requirements of the
Companies Act 2006.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website Publication
The directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website at
www.bscfunds.com in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website is the
responsibility of the directors. The directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
Directors' Responsibilities pursuant to DTR4
The directors confirm to the best of their knowledge:
-- the financial statements have been prepared in accordance
with IFRSs as adopted by the European Union and give a true and
fair view of the assets, liabilities, financial position and profit
and loss of the Company; and
-- the annual report includes a fair review of the development
and performance of the business and the financial position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
Having taken advice from the Audit Committee, the Board
considers the annual report and accounts, taken as a whole, are
fair, balanced and understandable and that it provides the
information necessary for shareholders to assess the Company's
performance, business model and strategy.
The names and functions of all the directors are stated on page
33 of the annual report.
For and on behalf of the Board
This statement was approved by the Board and signed on its
behalf on 24 March 2016.
Richard Last
Chairman
Financial Statements
Statement of Comprehensive Income for the year ended 31 December
2015
2015 2014
Notes Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------- -------- ---------- ---------- --------- ---------- ---------- ---------
Gains on investments
held at fair value 7 - 3,316 3,316 - 111 111
Income 2 1,953 - 1,953 1,272 - 1,272
Gain on disposal
of investments 7 - 232 232 - 870 870
Total income 1,953 3,548 5,501 1,272 981 2,253
Administrative
expenses:
---------- ---------- --------- ---------- ---------- ---------
Investment Adviser's
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
fee (234) (701) (935) (173) (521) (694)
Other expenses (434) - (434) (402) - (402)
---------- ---------- --------- ---------- ---------- ---------
3 (668) (701) (1,369) (575) (521) (1,096)
Profit before taxation 1,285 2,847 4,132 697 460 1,157
Taxation 4 (152) 152 - (7) 7 -
Profit for the
year 1,133 2,999 4,132 690 467 1,157
-------------------------- -------- ---------- ---------- --------- ---------- ---------- ---------
Total comprehensive
income for the
year 1,133 2,999 4,132 690 467 1,157
-------------------------- -------- ---------- ---------- --------- ---------- ---------- ---------
Basic and diluted
earnings per ordinary
share 6 1.36p 3.60p 4.96p 1.19p 0.81p 2.00p
-------------------------- -------- ---------- ---------- --------- ---------- ---------- ---------
The Total column of this statement represents the Company's
Statement of Comprehensive Income, prepared in accordance with
International Financial Reporting Standards ('IFRSs') as adopted by
the European Union. The supplementary Revenue and Capital columns
are prepared under the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies and Venture Capital
Trusts' ('SORP') 2014 published by The AIC.
Balance Sheet at 31 December 2015
2015 2014
Notes GBP000 GBP000
------------------------------ ------ --------- ---------
Assets
Non-current assets
Financial assets at fair
value through profit or
loss 7 36,652 28,216
Trade and other receivables 678 417
------------------------------ ------ --------- ---------
37,330 28,633
Current assets
Trade and other receivables 368 314
Cash on fixed term deposit 1,992 -
Cash and cash equivalents 15,444 10,633
17,804 10,947
Liabilities
Current liabilities
Trade and other payables (284) (247)
Net current assets 17,520 10,700
Net assets 54,850 39,333
------------------------------ ------ --------- ---------
Shareholders' equity
Share capital 8,939 6,447
Share premium account 13,337 342
Capital redemption reserve 88 88
Other reserve 2 2
Merger reserve 5,525 5,525
Capital reserve 20,781 24,822
Investment holding gains
and losses 5,127 1,507
Revenue reserve 1,051 600
Total shareholders' equity 54,850 39,333
------------------------------ ------ --------- ---------
Net asset value per ordinary
share 8 62.9p 62.9p
------------------------------ ------ --------- ---------
Statement of Changes in Equity for the year ended 31 December
2015
Share Share Other Merger Capital Investment Revenue Total
capital premium reserves* reserve reserve holding reserve equity
account gains
(losses)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Balance at
31 December
2013 4,822 4,926 90 5,525 14,568 448 79 30,458
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Revenue return
for the year - - - - - - 697 697
Capital expenses - - - - (521) - - (521)
Investment
holding gain
on investments
held at fair
value - - - - - 111 - 111
Realisation
of investments
in the year - - - - 870 - - 870
Taxation - - - - 7 - (7) -
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Total comprehensive
income for
the year - - - - 356 111 690 1,157
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Issue of share
capital 1,551 9,200 - - - - - 10,751
Issue costs
** - (591) - - - - - (591)
Purchase of
own shares - - - - (75) - - (75)
Issue of shares
- DRIS 74 362 - - - - - 436
Dividends - - - - (2,625) - (169) (2,794)
Cancellation
of share premium
account - net
of costs - (13,555) - - 13,546 - - (9)
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Total transactions
with owners 1,625 (4,584) - - 10,846 - (169) 7,718
Realisation
of negative
goodwill - - - - 13 (13) - -
Realisation
of prior year
investment
holding losses - - - - (961) 961 - -
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Balance at
31 December
2014 6,447 342 90 5,525 24,822 1,507 600 39,333
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Revenue return
for the year - - - - - - 1,285 1,285
Capital expenses - - - - (701) - - (701)
Investment
holding gain
on investments
held at fair
value - - - - - 3,316 - 3,316
Realisation
of investments
in the year - - - - 232 - - 232
Taxation - - - - 152 - (152) -
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Total comprehensive
income for
the year - - - - (317) 3,316 1,133 4,132
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Issue of share
capital 2,366 13,056 - - - - - 15,422
Issue costs
** - (667) - - (92) - - (759)
Purchase of
own shares - - - - (123) - - (123)
Issue of shares
- DRIS 126 606 - - - - - 732
Dividends - - - - (3,205) - (682) (3,887)
Total transactions
with owners 2,492 12,995 - - (3,420) - (682) 11,385
Realisation
of prior year
investment
holding losses - - - - (304) 304 - -
Balance at
31 December
2015 8,939 13,337 90 5,525 20,781 5,127 1,051 54,850
--------------------- --------- --------- ----------- --------- --------- ----------- --------- --------
Reserves available for distribution
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
Under the Companies Act 2006 the capital reserve and the revenue
reserve are distributable reserves. The table below shows amounts
that are available for distribution.
Capital Revenue Total
reserve reserve equity
GBP000 GBP000 GBP000
----------------------------------- --------- --------- --------
Distributable reserves
as above 20,781 1,051 21,832
----------------------------------- --------- --------- --------
Less : Interest and dividends
not yet distributable - (774) (774)
: Deferred proceeds (93) - (93)
: Cancelled share premium
not yet distributable (1,343) - (1,343)
----------------------------------- --------- --------- --------
Reserves available for
distribution*** 19,345 277 19,622
----------------------------------- --------- --------- --------
* Other reserves include the capital redemption reserve and
other reserve, which are non-distributable. The other reserve was
created upon the exercise of warrants and the capital redemption
reserve was created for the purchase and cancellation of own
shares.
** Issue costs include both fundraising costs and costs incurred from the Company's DRIS.
*** Subject to filing these financial statements at Companies House.
The merger reserve was created to account for the difference
between the nominal and fair value of shares issued as
consideration for the acquisition of the assets and liabilities of
British Smaller Technology Companies VCT plc. The reserve was
created after meeting the criteria under section 131 of the
Companies Act 1985 and the provisions of the Companies Act 2006 for
merger relief. The merger reserve is a non-distributable
reserve.
The capital reserve and revenue reserve are both distributable
reserves. The reserves total GBP21,832,000 (2014: GBP25,422,000)
representing a decrease of GBP3,590,000 (2014: GBP10,775,000
increase) during the year. The directors also take into account the
level of the investment holding gains (losses) reserve and the
future requirements of the Company when determining the level of
dividend payments.
Of the potentially distributable reserves of GBP21,832,000 shown
above, GBP774,000 (2014: GBP332,000) relates to interest and
dividends receivable from 2018 onwards, GBP93,000 (2014: GBP85,000)
of deferred proceeds and GBP1,343,000 (2014: GBP1,343,000) of share
premium which becomes distributable from 1 January 2018.
On filing the financial statements at Companies House the
reserves available for distribution will be GBP19,622,000.
Statement of Cash Flows for the year ended 31 December 2015
Notes 2015 2014
GBP000 GBP000
----------------------------------- ------ -------- ---------
Net cash inflow (outflow)
from operating activities 147 (293)
----------------------------------- ------ -------- ---------
Cash flows (used in) investing
activities
Purchase of financial assets
at fair value through profit
or loss 7 (7,239) (14,071)
Proceeds from sale of financial
assets at fair value through
profit or loss 7 2,458 3,679
Deferred consideration 13 345
Cash placed on fixed term (1,992) -
deposit
Cash maturing from fixed
term deposits - 4,500
Net cash (outflow) from investing
activities (6,760) (5,547)
----------------------------------- ------ -------- ---------
Cash flows from (used in)
financing activities
Issue of ordinary shares 15,422 10,510
Costs of ordinary share issues* (733) (350)
Purchase of own ordinary
shares (123) (75)
Dividends paid (3,874) (2,719)
Shares issued under DRIS 732 436
Share premium cancellation
cost - (9)
----------------------------------- ------ -------- ---------
Net cash inflow from financing
activities 11,424 7,793
----------------------------------- ------ -------- ---------
Net increase in cash and
cash equivalents 4,811 1,953
Cash and cash equivalents
at the beginning of the year 10,633 8,680
Cash and cash equivalents
at the end of the year 15,444 10,633
----------------------------------- ------ -------- ---------
*Issue costs include both fundraising costs and expenses
incurred from the Company's DRIS.
Reconciliation of Profit before Taxation to Net Cash Inflow
(Outflow) from Operating Activities
2015 2014
GBP000 GBP000
---------------------------------- -------- --------
Profit before taxation 4,132 1,157
Increase in trade and other
payables 24 50
Increase in trade and other
receivables (345) (511)
Gains on disposal of investments
in the year (232) (870)
Profit on investments held
at fair value (3,316) (111)
Capitalised interest and
dividends (116) (8)
----------------------------------- -------- --------
Net cash inflow (outflow)
from operating activities 147 (293)
----------------------------------- -------- --------
Notes to the Financial Statements for the year ended 31 December
2015
1 Basis of Preparation
The accounts have been prepared on a going concern basis and in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical
cost basis as modified by the measurement of investments at fair
value through profit or loss.
The accounts have been prepared in compliance with the
recommendations set out in the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture
Capital Trusts' issued by the Association of Investment Companies
in November 2014 (SORP) to the extent that they do not conflict
with IFRSs as adopted by the European Union.
The financial statements are prepared in accordance with IFRSs
and interpretations in force at the reporting date.
Standards and interpretations have been issued which will be
effective for future reporting periods but have not been adopted
early in these financial statements. These include amendments to
IFRS 9, 10, 11 and 15, and amendments to IAS 27 and 28. The impact
of the new accounting standards and amendments applicable to the
Company is not expected to be material to the financial
statements.
2. Income
2015 2014
GBP000 GBP000
------------------------------- -------- --------
Dividends from unquoted
companies 490 160
Dividends from AIM quoted
companies 35 43
Interest on loans to unquoted
companies 1,264 926
Fixed income Government
securities - 7
Income from investments
held at fair value through
profit or loss 1,789 1,136
Interest on bank deposits 164 136
1,953 1,272
------------------------------- -------- --------
The above is stated net of GBPnil (2014: GBP46,000) of income in
relation to loan interest, which has been fully provided for.
3. Administrative Expenses
2015 2014
GBP000 GBP000
------------------------------ ------- -------
Investment Adviser's fee 935 694
Administration fee 61 60
------------------------------ ------- -------
Total payable to YFM Private
Equity Limited 996 754
Other expenses:
Trail commission 134 100
Directors' remuneration 76 75
Listing and registrar fees 57 43
General expenses 43 39
Printing 24 47
Irrecoverable VAT 20 20
Auditor's remuneration
- audit fees (excluding
irrecoverable VAT) 19 18
------------------------------ ------- -------
1,369 1,096
------------------------------ ------- -------
Ongoing Charges figure 2.28% 2.56%
------------------------------ ------- -------
Directors' remuneration comprises only short term benefits
including social security contributions.
No fees are payable to the auditor in respect of other services
supplied pursuant to legislation (2014: GBPnil).
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
YFM Private Equity Limited has acted as Investment Adviser and
performed administrative and secretarial duties for the Company
under an agreement dated 28 November 2000, superseded by an
agreement dated 31 October 2005 and as varied by agreements dated 8
December 2010, 26 October 2011, 16 November 2012, 17 October 2014
and 7 August 2015 (the "IAA"). The agreement may be terminated by
not less than twelve months' notice given by either party at any
time. Following the Financial Conduct Authority's registration of
the Company as a Small Registered Alternative Investment Fund
Manager, the Company has retained responsibility for the custody of
its investments.
The key features of the agreement are:
-- YFM Private Equity Limited receives an Investment Adviser
fee, payable quarterly in advance, calculated at half-yearly
intervals as at 30 June and 31 December. The fee is allocated
between capital and revenue as described in note 1 to the financial
statements;
-- The annual advisory fee payable to the Investment Adviser is
2.50 per cent of Net Assets up to GBP16.0 million, 1.25 per cent of
Net Assets in excess of GBP16.0 million and up to GBP26.667
million, and 2.00 per cent of Net Assets in excess of GBP26.667
million. Based on the Company's Net Assets at 31 December 2015 of
GBP54.850 million, this equates to 2.0 per cent of Net Assets, or
GBP1,097,000 per annum.
YFM Private Equity Limited shall bear the annual operating costs
of the Company (including the advisory fee set out above but
excluding any payment of the performance incentive fee, details of
which are set out below and excluding VAT and trail commissions) to
the extent that those costs exceed 2.9 per cent of the net asset
value of the Company; and
Under the IAA YFM Private Equity Limited also provides
administrative and secretarial services to the Company for a fee of
GBP46,000 per annum plus annual adjustments to reflect movements in
the Retail Prices Index. This fee is charged fully to revenue, and
totalled GBP61,000 for the year ended 31 December 2015 (2014:
GBP60,000).
When the Company makes investments into its unquoted portfolio
the Investment Adviser charges that investee an advisory fee. With
effect from 1 October 2013 if the average of relevant fees exceeds
3.0 per cent of the total invested into new portfolio companies and
2.0 per cent into follow-on investments over the Company's
financial year, this excess will be rebated to the Company. As at
31 December 2015, the Company was due a rebate from the Investment
Adviser of GBPnil (2014: GBP4,000).
Monitoring and directors' fees the Investment Adviser receives
from the investee companies are limited to a maximum of GBP40,000
(excluding VAT) per annum per company.
The total remuneration payable to YFM Private Equity Limited in
the period was GBP996,000 (2014: GBP754,000).
Under the IAA, YFM Private Equity Limited is entitled to receive
fees from investee companies in respect of the provision of
non-executive directors and other advisory services. YFM Private
Equity Limited is responsible for paying the due diligence and
other costs incurred in connection with proposed investments which
for whatever reason do not proceed to completion. In the year ended
31 December 2015 the fees receivable by YFM Private Equity Limited
from investee companies which were attributable to advisory and
directors' and monitoring fees amounted to GBP340,000 (2014:
GBP583,000).
Under the Subscription Rights Agreement dated 23 November 2001
between the Company, YFM Private Equity Limited and Chord Capital
Limited ("Chord" formerly Generics Asset Management Limited), as
amended by an agreement between those parties dated 31 October
2005, YFM Private Equity Limited and Chord have a
performance-related incentive, structured so as to entitle them to
an amount (satisfied by the issue by the Company of ordinary
shares) equivalent to 20 per cent of the amount by which the
cumulative dividends per ordinary share paid as at the last
business day in December in any year, plus the average of the
middle market price per ordinary share on the five dealing days
prior to that day, exceeds 120 pence per ordinary share, multiplied
by the number of ordinary shares issued and the ordinary shares
under option (if any) (the "Hurdle"). Under the terms of the
Subscription Rights Agreement, once the Hurdle has been exceeded it
is reset at that value going forward, which becomes the new Hurdle.
Any subsequent exercise of these rights will only occur once the
new Hurdle has been exceeded. The subscription rights are
exercisable in the ratio 95:5 between the Investment Adviser and
Chord Capital Limited.
By a Deed of Assignment dated 19 December 2003 (together with a
supplemental agreement dated 5 October 2005), the benefit of the
YFM Private Equity Limited subscription right was assigned to YFM
Private Equity Limited Carried Interest Trust (the "Trust"), an
employee benefit trust formed for the benefit of certain employees
of YFM Private Equity Limited and associated companies. Pursuant to
a deed of variation dated 16 November 2012 between the Company, the
trustees of the Trust and Chord, the Subscription Rights Agreement
was varied so that the subscription rights will be exercisable in
the ratio of 95:5 between the trustees of the Trust and Chord.
Pursuant to a deed of variation dated 5 August 2014 the
Subscription Rights Agreement was varied so that the recipient was
changed from the Trust to YFM Private Equity Limited.
As at 31 December 2015 the total of cumulative cash dividends
paid and mid-market price was 104.00 pence per ordinary share. No
shares have been issued under this agreement.
Under the terms of the offer with British Smaller Companies VCT
plc, launched on 20 October 2014, YFM Private Equity Limited was
entitled to 5.0 per cent of gross subscriptions from execution
brokers and 3.0 per cent of gross subscriptions for applications
through intermediaries offering financial advice or directly from
applicants, less the cost of incentive shares and re-investment of
intermediary commission. The net amount paid to YFM Private Equity
Limited under this offer amounted to GBP344,604.
Under the terms of the offer launched on 8 December 2015, YFM
Private Equity Limited was entitled to 5.0 per cent of gross
subscriptions from execution brokers and 3.0 per cent of gross
subscriptions for applications through intermediaries offering
financial advice or directly from applicants, less the
re-investment of intermediary commission. The net amount paid to
YFM Private Equity Limited under this offer amounted to
GBP108,200.
The Investment Adviser met all costs and expenses arising from
these offers out of these fees, including any payment or
re-investment of initial intermediary commissions (excluding
permissible trail commission, which continues to be met by the
Company).
The details of directors' remuneration are set out in the
Directors' Remuneration Report on page 44 of the annual report
under the heading "Directors' Remuneration for the year ended 31
December 2015 (audited)".
4. Taxation
2015 2014
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------- ---------- ---------- --------- ---------- ---------- ---------
Profit before taxation 1,285 2,847 4,132 697 460 1,157
-------------------------- ---------- ---------- --------- ---------- ---------- ---------
Profit before taxation
multiplied by standard
small company rate
of corporation tax
in UK of 20% (2014:
20%) 257 569 826 139 92 231
Effect of:
UK dividends received (105) - (105) (41) - (41)
Non-taxable profits
on investments - (709) (709) - (196) (196)
Excess advisory expenses - (12) (12) (91) 97 6
Tax charge (credit) 152 (152) - 7 (7) -
-------------------------- ---------- ---------- --------- ---------- ---------- ---------
The Company has no provided or unprovided deferred tax liability
in either year.
Deferred tax assets of GBP497,000 calculated at 18% (2014:
GBP560,000 at 20%) in respect of unrelieved management expenses
(GBP2.761 million as at 31 December 2015 and GBP2.799 million as at
31 December 2014) have not been recognised as the directors do not
currently believe that it is probable that sufficient taxable
profits will be available against which assets can be
recovered.
Due to the Company's status as a venture capital trust and the
continued intention to meet with the conditions required to comply
with Section 274 of the Income Tax Act 2007, the Company has not
provided for deferred tax on any capital gains or losses arising on
the revaluation or realisation of investments.
5. Dividends
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
Amounts recognised as distributions to equity holders in the
period to 31 December:
2015 2014
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- ---------- ---------- --------- ---------- ---------- ---------
Final dividend for
the year ended 31 December
2014 of 2.5p (2013:
2.5p) per ordinary
share 268 1,885 2,153 7 1,542 1,549
Interim dividend for
the year ended 31 December
2015 of 2.0p (2014:
2.0p) per ordinary
share 414 1,320 1,734 162 1,083 1,245
682 3,205 3,887 169 2,625 2,794
----------------------------- ---------- ---------- --------- ---------- ---------- ---------
Unclaimed dividends (13) (75)
----------------------------- ---------- ---------- --------- ---------- ---------- ---------
Dividends paid in Statement
of Cash Flows 3,874 2,719
----------------------------- ---------- ---------- --------- ---------- ---------- ---------
The final year-end dividend of 2.5 pence per ordinary share in
respect of the year to 31 December 2014 was paid on 8 June 2015 to
shareholders on the register at 8 May 2015.
The interim dividend of 2.0 pence per ordinary share was paid on
28 September 2015 to shareholders on the register as at 28 August
2015.
A final dividend of 2.5 pence per ordinary share in respect of
the year to 31 December 2015 is proposed. This dividend has not
been recognised in the year ended 31 December 2015 as the
obligation did not exist at the balance sheet date.
During the year the Company has received an additional GBP16,000
(2014: GBP78,000) from the Registrars in respect of unclaimed
dividends. The Company has made efforts to contact the relevant
shareholders, with the result that GBP3,000 (2014: GBP3,000) has
been paid to shareholders in the year. The unclaimed balance is
held in a separate bank account until contact can be made with the
shareholders affected.
6. Basic and Diluted Earnings per Ordinary Share
The basic and diluted earnings per ordinary share is based on
the profit after tax attributable to shareholders of GBP4,132,000
(2014: GBP1,157,000 profit) and 83,224,240 (2014: 57,825,246)
ordinary shares being the weighted average number of ordinary
shares in issue during the year.
The basic and diluted revenue earnings per ordinary share is
based on the profit for the year attributable to shareholders of
GBP1,133,000 (2014: GBP690,000) and 83,224,240 (2014: 57,825,246)
ordinary shares being the weighted average number of ordinary
shares in issue during the year.
The basic and diluted capital earnings per ordinary share is
based on the capital profit for the year attributable to
shareholders of GBP2,999,000 (2014: GBP467,000) and 83,224,240
(2014: 57,825,246) ordinary shares being the weighted average
number of ordinary shares in issue during the year.
During the year the Company allotted 1,258,531 new ordinary
shares in respect of its DRIS, and 23,665,149 new ordinary shares
under the offer for subscription with British Smaller Companies VCT
plc.
The Company has also repurchased 217,981 of its own shares in
the year, and these shares are held in treasury within the capital
reserve. The total of 2,128,003 treasury shares has been excluded
in calculating the weighted average number of ordinary shares for
the period. The Company has no securities that would have a
dilutive effect and hence basic and diluted earnings per share are
the same.
The only potentially dilutive shares are those shares which,
subject to certain criteria being achieved in the future, may be
issued by the Company to meet its obligations under the investment
advisory agreement as set out in Note 3. No such shares have been
issued or are currently expected to be issued. There are,
therefore, considered to be no potentially dilutive shares in issue
at 31 December 2015 or 31 December 2014.
7. Financial Assets at Fair Value Through Profit or Loss
Movements in investments at fair value through profit or loss
during the year to 31 December 2015 are summarised as follows:
IFRS13 measurement classification Level Level
3 1
----------------------------------- ------------- ------------- -------------
Unquoted Quoted Total
Investments Equity Investments
Investments
GBP000 GBP000 GBP000
----------------------------------- ------------- ------------- -------------
Opening cost 24,593 2,146 26,739
Opening investment holding
gain (loss) 1,495 (18) 1,477
Opening fair value at 1
January 2015 26,088 2,128 28,216
Additions at cost 6,478 761 7,239
Capitalised interest and
dividends 116 - 116
Disposal proceeds (1,984) (474) (2,458)
Net profit (loss) on disposal* 312 (89) 223
Change in fair value 2,958 358 3,316
----------------------------------- ------------- ------------- -------------
Closing fair value at 31
December 2015 33,968 2,684 36,652
----------------------------------- ------------- ------------- -------------
Closing cost 29,332 2,223 31,555
Closing investment holding
gain** 4,636 461 5,097
----------------------------------- ------------- ------------- -------------
Closing fair value at 31
December 2015 33,968 2,684 36,652
----------------------------------- ------------- ------------- -------------
* The net profit on disposal in the table above is GBP223,000
whereas that shown in the Statement of Comprehensive Income is
GBP232,000. The difference comprises deferred proceeds of GBP9,000
in respect of assets which have been disposed of and are not
included within the investment portfolio at the year-end.
** Following the merger between the Company and British Smaller
Technologies Company VCT plc a total of GBP975,000 of negative
goodwill was recognised in the investment holding gains and losses
reserve in respect of the investments acquired. The relevant amount
per investment is realised, at the point of disposal to the capital
reserve. At 31 December 2015 a total of GBP30,000 (2014: GBP30,000)
was held on investments yet to be realised in the investment
holdings gains and losses reserve.
There were no individual reductions in fair value during the
year that exceeded 5 per cent of the total assets of the Company
(2014: none).
8. Basic and Diluted Net Asset Value per Ordinary Share
The basic and diluted net asset value per ordinary share is
calculated on attributable assets of GBP54,850,000 (2014:
GBP39,333,000) and 87,262,575 (2014: 62,556,876) ordinary shares in
issue at the year end.
The treasury shares have been excluded in calculating the number
of ordinary shares in issue at 31 December 2015.
The only potentially dilutive shares are those shares which,
subject to certain criteria being achieved in the future, may be
issued by the Company to meet its obligations under the IAA as set
out in note 3. No such shares have been issued or are currently
expected to be issued. There are therefore considered to be no
potentially dilutive shares in issue at 31 December 2015 or 31
December 2014. Consequently, basic and diluted net asset values per
ordinary share are equivalent in both the year ended 31 December
2015 and 31 December 2014.
9. Total Return per Ordinary Share
The total return per ordinary share is calculated on cumulative
dividends paid of 48.0 pence per ordinary share (2014: 43.5 pence
per ordinary share) plus the net asset value as calculated per note
8.
10. Related Party Transactions
Mr R Last is chairman and non-executive director of Gamma
Communications plc, in which he has a 0.06 per cent equity stake.
During the year to 31 December 2015 he received remuneration of
GBP75,000 from Gamma in respect of his services.
11. Events after the Balance Sheet Date
On 3 March 2016 the Company realised its investment in
Callstream Group Limited for GBP0.7 million, in line with the 31
December 2015 carrying value.
Subsequent to the year end the Company allotted a total of
5,683,709 ordinary shares on 14 January 2016 pursuant to the offer
detailed under "Fundraising" on page 8 of the annual report,
raising net proceeds of GBP3.5 million.
12. Financial Information
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
The financial information set out in this announcement for the
year ended 31 December 2015 does not constitute full statutory
accounts as defined in section 434 of the Companies Act 2006 but
has been extracted from the Company's statutory accounts for that
period. Statutory accounts for the year ended 31 December 2015 will
be delivered to the Registrar of Companies following the Company's
Annual General Meeting on 6 May 2016. Those accounts have been
reported upon without qualification by the Company's independent
auditor and did not contain a statement under Section 498(2) or (3)
of the Companies Act 2006.
13. Annual Report and Accounts
Copies of the statutory accounts for the year ended 31 December
2015 will shortly be submitted to the National Storage Mechanism
and will be available to the public for viewing online at
www.hemscott.com/msn/do. They can also shortly be viewed on the
Company's website at www.bscfunds.com. Hard copies of the statutory
accounts for the year ended 31 December 2015 will be distributed by
post to shareholders who have elected to receive accounts in this
format, and will be available thereafter to members of the public
from the Company's registered office.
14. Directors
The directors of the Company are Mr R Last, Mr R Pettigrew, and
Mr P Waller.
15. Annual General Meeting
The Annual General Meeting of the Company will be held at 33 St
James Square, London, SW1Y 4JS on 6 May 2016 at 12.00 noon.
16. Final Dividend for the year ended 31 December 2015
Further to the announcement of its final results for the year
ended 31 December 2015, the Company confirms that, subject to its
approval by shareholders at the forthcoming Annual General Meeting
to be held on 6 May 2016, the final dividend of 2.5 pence per
ordinary share ("Final Dividend") will be paid on 9 May 2016 to
those shareholders on the Company's register at the close of
business on 8 April 2016. The ex-dividend date is 7 April 2016.
17. Dividend re-investment scheme ("DRIS")
The Company operates a dividend reinvestment scheme ("DRIS").
The latest date for receipt of DRIS elections so as to participate
in the DRIS in respect of the Final Dividend is the close of
business on 22 April 2016.
18. Purchase of Own Securities
Under the authority granted by shareholders at general meetings,
the Company may buy back shares to enable shareholders to obtain
some liquidity. The policy is kept under active review to ensure
that any decisions taken are in the interest of shareholders as a
whole.
The Company announces that from today the rate of discount at
which ordinary shares will be bought back will be targeted to be no
more than five per cent of the latest reported net asset value. The
policy is at the discretion of the Board and is kept under active
review.
For further information, please contact:
David Hall YFM Equity Partners Limited Tel: 0113 244 1000
Gillian Martin Nplus1 Singer Advisory LLP Tel: 0207 496 3000
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSAKQDPQBKDANB
(END) Dow Jones Newswires
March 24, 2016 10:58 ET (14:58 GMT)
British Smaller Companie... (LSE:BSC)
Historical Stock Chart
From Jun 2024 to Jul 2024
British Smaller Companie... (LSE:BSC)
Historical Stock Chart
From Jul 2023 to Jul 2024
