TIDMCLC
RNS Number : 5800Y
Calculus VCT PLC
09 May 2019
The following replaces the 'Annual Financial Report'
announcement released on 9 May 2019 at 16.12 under RNS No
5573Y.
The full amended text is shown below.
Calculus VCT plc
Legal Entity Identifier: 2138005SMDWLMMNPVA90
Annual Financial Report for the year ended 28 February 2019
The Annual Report and Financial Statements ("Annual Report and
Accounts") for the year ended 28 February 2019 and the Notice of
Annual General Meeting will be posted to shareholders shortly and
will be available for inspection at 104 Park Street , London, W1K
6NF, the Company's registered office, and will be available in
electronic format for download on
www.calculuscapital.com/calculus-vct/ , a website maintained by the
Company's Investment Manager, Calculus Capital Limited. A copy of
the Annual Report and Accounts will also be submitted shortly to
the National Storage Mechanism ("NSM") and will be available for
inspection at the NSM, which is situated at:
http://www.morningstar.co.uk/uk/NSM.
Page numbers and cross-references in the announcement below
refer to page numbers and cross-references in the PDF of the Annual
Report and Accounts.
Financial Highlights
Year to 28 February 2019
Net asset value per share 75.84p
========================== ============
Final dividend proposed 3.40p
========================== ============
Total return per share (7.27)p
Our Aim
Calculus VCT is a tax efficient listed company which aims to
achieve long-term returns including tax-free dividends, for
investors.
Investment Objective
To invest primarily in a diverse portfolio of UK growth
companies whether unquoted or traded on AIM.
Investments are made selectively across a range of sectors in
companies that have the potential for long- term growth. Our
investment is intended to support those companies to grow, innovate
and scale up.
Dividend Objective
Your board aims to maintain a regular tax free annual dividend
of 4.5% of NAV mindful of the need to maintain net asset value. The
ability to meet these twin objectives depends significantly on the
level and timing of profitable realisations and cannot be
guaranteed.
Strategic report
The Strategic Report has been prepared in accordance with the
requirements of Section 414A of the Companies Act 2006 (the "Act").
Its purpose is to inform members of the Company and help them
assess how the Directors have performed their legal duty under
Section 172 of the Act, to promote the success of the Company.
CHAIRMAN'S STATEMENT
I am pleased to present your Company's results for the year
ended 28 February 2019. It has been an active year for the Company
with ten new investments made on behalf of the qualifying portfolio
and over GBP5.5m new Ordinary shares allotted during the year.
Having been a Board Member for 9 years and Chairman for over 8
years, it seems to me to be good corporate governance that I should
retire from the Board and I will do so at the conclusion of this
year's AGM. It has been a pleasure being a part of Calculus VCT
plc, supporting the growth and development of some potentially
outstanding British companies such as synthetic biology company,
Synpromics Limited and technology company, Blu Wireless Technology
Limited. The VCT has also led investments with a social and
environmental impact such as Every1Mobile Limited which is
providing digital communications solutions to international
development agencies and NGOs as well as commercial enterprises
across Africa, and Weeding Technologies Limited which is providing
an alternative to potentially carcinogenic chemical herbicides. The
portfolio comprises many promising companies and I am proud of what
we have accomplished.
I am pleased to introduce my successor, Jan Ward CBE. Jan, who
founded her own engineering company now active in eleven countries,
brings strategic and operational experience gained over more than
thirty years in the energy, petrochem and power industries. Jan's
experience of growth companies will be a valuable contribution to
the Company.
Results for the year
The net asset value per Ordinary share at 28 February 2019 was
75.8 pence, compared to 87.0 pence as at 28 February 2018, this is
after paying a dividend of 4 pence per share. The most significant
movements in the qualifying portfolio were caused by Air Leisure
Group Limited which has gone into administration and therefore was
written down in full during the year.
Scancell Holdings plc, which is AIM quoted, lost 50% of its
value, equating to a loss of value of over GBP180,000 for the VCT.
Whilst progress in life sciences companies can most definitely be
non-linear, it is disappointing that Scancell's share price does
not reflect clear progress made during the year. Terrain Energy
Limited conducted some initial testing of the Brockham well with
inconclusive results, so an additional test is being performed at a
further cost; this has caused the valuation to be written down by
15% in the year to 28 February 2019. These losses in the portfolio
overshadowed some significant progress made by other portfolio
companies.
Both Every1Mobile Limited and Open Energy Market Limited (OEM)
have increased in value by 15%. Every1Mobile has grown 60% year on
year, in line with its expansion plan; while OEM is hitting its
targets with bookings in the year to January 19 showing strong
year-on-year growth. OEM is well positioned to continue on its
growth trajectory and as such the valuation has been increased.
Further information on the portfolio can be found in the
investment manager's report following this statement.
Venture Capital Investments
Calculus Capital Limited manages the portfolio of VCT qualifying
investments made by the Company.
The Company made a number of new and follow on investments,
which are set out in the Investment Manager's report. It also made
two disposals: GBP150,000 was received from the redemption of loan
stock in Antech Limited and GBP44,000 was received from the sale of
Origin Broadband Limited.
During the year Tollan Energy Limited sold its portfolio of
solar panels and made a capital distribution to the VCT of 65 pence
per share. The company is currently being wound up and further
payments are expected in the region of 8 pence per share.
Issue of new Ordinary shares
At the general meeting on 9 October 2018 shareholders approved
the launch of a further offer for subscription for Ordinary shares,
with the shares to be issued in the 2018/19 and 2019/20 tax years.
6,827,656 new Ordinary shares were allotted during the year raising
over GBP5.5m.
Share buy backs
During the year the Company bought back and cancelled 48,000
Ordinary shares. The Company continues to review opportunities to
carry out share buybacks at a discount of no greater than 10% to
the NAV.
Dividend
The Directors are pleased to announce a final dividend of 3.4
pence per Ordinary share to be paid to all Ordinary
shareholders.
Subject to shareholder approval, the Ordinary share dividend
will be paid on 26 July 2019 to shareholders on the register on 5
July 2019.
The Board
In addition to Jan Ward, I am also pleased to welcome Claire
Olsen to the board. Claire joined the Company on the 3rd January
2019. Claire has a background in financial services marketing and
research and is currently an independent consultant. Steve Meeks
and Diane Seymour-Williams have stepped down from the board during
the year. Their services have been invaluable, the Company and I
thank them for their contributions. Further details about the board
are given in the Directors report.
Outlook
Brexit is undoubtedly causing some uncertainty; however, it is
our view that on the whole the companies in our portfolio are not
experiencing material difficulties as a result of the political
situation. Many of the companies in the portfolio have business
models based on global markets and hence stronger trade
relationships outside of Europe than within.
Calculus Capital continues to identify attractive investment
opportunities and the Board aims to further grow the VCT and build
a diversified portfolio for investors in the coming years.
Developments since the year end
Since the year end, the Company has made three further
qualifying investments: a further GBP100,000 has been invested in
Wheelright Limited loan notes; a further GBP300,000 has been
invested in Blu Wireless and GBP300,000 has been invested in Wazoku
Limited.
Wazoku is an idea management company with an impressive client
list including the United Kingdom Ministry of Defence (MoD),
Waitrose, Microsoft and HSBC. The Wazoku platform helps
organisations transform raw ideas generated by the workforce into
actionable innovation, with the aim of realising untapped business
opportunities, identifying areas for improvement, making savings
and boosting revenue.
Since the year end the Company has also made a further allotment
of Ordinary shares. On 5th April 2019, a further 2,076,361 Ordinary
shares were allotted at an average price of 78.54p per share.
Michael O'Higgins, Chairman
9 May 2019
INVESTMENT MANAGER'S REVIEW
(Qualifying Investments)
The net assets of GBP13,971,482 were as follows:
Asset class NAV (GBP000s) % of NAV Number of investee
companies/funds
Unquoted company investments 5,533 40 25
------------- -------- ------------------
AIM traded company investments 408 3 5
------------- -------- ------------------
Liquidity Fund investments 5,652 40 3
------------- -------- ------------------
Other Liquid assets 2,378 17 -
------------- -------- ------------------
Totals 13,971 100
------------- -------- ------------------
During the year, the Company made ten qualifying investments, as
we seek to build a diversified portfolio, including:
Arecor Limited
Arecor is a life sciences company focussed on the development of
superior biopharmaceutical products via the application of its
patented Arestat(TM) formulation technology platform. In addition
to a strong pipeline of partnership opportunities, Arecor is using
its pipeline to develop a portfolio of proprietary products for
diabetes care. In December 2018, funds managed by Calculus Capital
invested GBP2 million of which the VCT invested GBP100,000 (as part
of a GBP6 million funding round), which will be used to fund the
development of three lead proprietary diabetes products into Phase
I clinical trials, strengthen the management and sales team, and
drive growth in its technology partnering business. In March 2019,
Arecor announced regulatory approval to initiate a phase I clinical
trial for its ultra-rapid acting insulin product.
C4X Discovery Limited
C4X Discovery (C4XD) is a drug discovery and development company
that uses cutting-edge technology to design and create drug
candidates. C4XD has programmes across a number of therapeutic
areas including inflammation, neurodegeneration, immune-oncology
and diabetes. In March 2018, C4XD licensed its candidate for the
treatment of addiction to Indivior plc, resulting in the receipt of
a $10 million upfront payment with the potential for up to $284
million in further milestones and royalties. In October 2018, funds
managed by Calculus invested a further GBP1.5 million of which the
VCT invested GBP50,000 (as part of a GBP10.0m round) in the
Company, which will be used to support the acceleration of the
pipeline portfolio and for the further expansion of the Company's
commercial capability.
CloudTrade Limited
CloudTrade provides a solution to a problem faced by many medium
to larger sized enterprises - how to smoothly and efficiently
process invoices and other business documents received in multiple
different formats. CloudTrade's patented software receives
e-documents on behalf of the customer via a dedicated email
address. Relevant information is automatically extracted with 100%
accuracy from the email, with no manual intervention, converted to
EDI or XML format and injected directly into the client's
accounting or processing system. Calculus invested GBP2 million of
which the VCT invested GBP200,000 as part of a GBP2.2 million
investment round in CloudTrade in July 2018. The Company will
invest the new capital primarily in sales, marketing and
delivery.
Duvas Technologies Limited
In August 2018, GBP208,000 was invested in Duvas Technologies
Limited. Duvas develops and produces specialised emissions
detection equipment using ultra-violet (UV) spectroscopy. Duvas'
highly sensitive detection technology enables remote sensing and
identification of airborne chemicals at a "parts per billion"
level. The Duvas core technology includes software and algorithms,
together with an expanding 'gas library' of gas signatures that
allow Duvas to programme its devices to recognise such gases. The
company's first commercial, patented UV spectroscopy unit is called
the DV3000, which has obtained CE marking for sales in Europe and
is also being sold in China and the US. Duvas' primary target is
the petrochemical industry where tighter regulation is driving
demand growth.
Essentia Analytics Limited
Essentia Analytics provides decision analytics in order to
improve the performance of asset managers. Essentia's proprietary
software conducts a full algorithmic analysis, using machine
learning of all past investment decisions, to identify each
individual portfolio manager's behavioural biases. The software
then continuously monitors their portfolio including individual
stock performance and trading and creates proactive behavioural
nudges to help the fund manager improve his or her alpha
performance. Calculus Capital invested GBP2.5 million in the
company in January 2019 of which the VCT invested GBP200,000. The
investment will be used to expand the product offering and drive
growth by strengthening the US and European sales and marketing
capability.
Mologic Limited
Mologic is a Point of Care diagnostics company which is
developing a new generation of diagnostic devices to improve
accuracy or target diseases for which Point of Care diagnosis is
underdeveloped, with the first two products having received an EU
CE mark. In addition to the product development pipeline, the
company has a number of contract research partnering programmes
utilising the team's core expertise in diagnostics development and
novel analytical techniques. The Bill & Melinda Gates
Foundation has provided substantial grant funding to Mologic to
develop advanced rapid diagnostics capable of 1pg/ml sensitivity.
Calculus Capital first invested in 2015; to support its development
efforts. The company raised a further GBP4 million in April 2018
which was led by Foresight with funds managed by Calculus investing
GBP500,000 including GBP200,000 from the VCT. The funds are being
used to support the launch of further diagnostics (including
neglected tropical diseases) and international expansion of the
Contract Research business.
MIP Diagnostics Limited
MIP Diagnostics is a novel affinity reagent company. Founded in
2015 as a spin out from the University of Leicester to
commercialise various forms of Molecularly Imprinted Polymers
(MIPs), sometimes called 'plastic antibodies'. The Company's
proprietary technology includes a novel method to make nanoMIPs
which circumvents the drawbacks of traditional MIP manufacturing
methods. The robust nature of MIPs and nanoMIPs make them ideal
reagents for a wide range of applications including point-of-care
diagnostics and in field-based testing. The Calculus VCT invested
GBP200,000 in MIP in October 2018. The investment will enable the
company to further develop in house assets for future licensing,
increase revenues, bring products to market and continue
development of the platform.
Oxford BioTherapeutics Limited
In July 2018 GBP200,000 was invested in Oxford BioTherapeutics
(OBT), a clinical stage oncology company committed to the discovery
and development of novel therapies for various cancer types. OBT
has a strong pipeline of immune-oncology (IO) therapies, which are
used to re-engage and recruit the body's immune system to attack
cancer cells. Moreover, OBT has two unique development platforms to
support the discovery of novel therapeutics. OBT announced in
December 2018 that it had received Investigational New Drug (IND)
clearance from the US FDA for OBT076, an experimental treatment for
women with high risk HER2 negative breast cancer, as well as other
solid tumours expressing this target antigen including gastric,
lung, bladder and ovarian cancer. The Company has raised over GBP5
million in additional funding from UK and Chinese institutional
investors since our investment and is looking to raise a larger
round in mid-2019 prior to an IPO in 2020, following positive
OBT076 clinical readouts.
Pico's Limited ("Benito's Hat")
In July 2018, Calculus Capital completed a further GBP1 million
investment into Benito's Hat, of which the Company invested
GBP150,000. Benito's Hat is a Mexican-themed fast casual restaurant
business which launched its first site in the West End of London in
2008. Benito's Hat has since opened eight further sites including
Covent Garden, Oxford Circus, Farringdon, Selfridges Kitchen,
Leadenhall Street and Bromley, as well as two new sites in Oxford
and Leicester. This investment will fund the roll-out of further
restaurant openings to reach new customers across London and the
UK.
WheelRight Limited
WheelRight has developed and commercially proven a fully
automatic drive-through tyre check system capable of measuring tyre
pressure and temperature, tread depth and weight-in-motion, as well
as identifying tyre defects and reading the tyre sidewall data. The
number of deployed systems has doubled in the year and the company
is now reviewing which of the possible target markets (commercial
fleet, open fleet/retail, government/regulatory) to focus on and
the best strategy for this. Calculus VCT invested GBP100,000 equity
in November 2018 and made a further GBP100,000 loan in January
2019.
Investment Diversification at 28 February 2019
Sector by investment cost
Sector
Consumer 16%
Energy 18%
Healthcare 29%
Industrials 14%
Technology 23%
Total assets by value
Asset
Unquoted company equity 34%
Unquoted company loan stock 6%
AIM traded equity 3%
Liquidity fund investments 40%
Other liquid assets 17%
Holding period of qualifying investments by value
Asset
Less than 1 year 12%
Between 1 and 3 years 47%
Greater than 5 years 41%
Calculus Capital Limited
9 May 2019
INVESTMENT PORTFOLIO
Largest holdings by value
Three of the Company's ten largest investments are currently in
liquidity funds. Details of the ten largest qualifying investments
and of the liquidity funds are set out below
Investment Book Cost GBP'000 Valuation GBP'000 % of investment
portfolio
Unquoted Equity Investments
Terrain Energy Limited 972 881 7.6
Solab Group Limited 479 475 4.1
The One Place Capital Limited 277 277 2.4
Arcis Biotechnology Holdings 275 275 2.4
Mologic Limited 200 266 2.3
MIP Diagnostics Limited 200 240 2.1
Weeding Technologies Limited 216 233 2.0
Cloud Trade Technologies Limited 200 231 2.0
Every1Mobile Limited 200 230 2.0
Open Energy Market Limited 200 230 2.0
Other unquoted equity investments 2,393 2,195 18.8
AIM Investments (quoted equity)
AIM investments 777 408 3.5
Quoted Funds
Fidelity Sterling Liquidity
Fund 1,883 1,890 16.3
Aberdeen Sterling Liquidity
Fund 1,882 1,882 16.3
Goldman Sachs Liquidity Funds 1,880 1,880 16.2
Total Investments 12,034 11,593 100
Calculus Capital Limited manages the portfolio of qualifying
Investments made by the Company. To maintain its qualifying status
as a Venture Capital Trust, the Company needed to be greater than
70 per cent invested in qualifying Investments by the end of the
relevant third accounting period and to maintain it thereafter. At
28 February 2019, the qualifying percentage for the relevant funds
was 73.1 per cent.
Terrain Energy Limited ("Terrain")
Terrain Energy is an oil and gas exploration and production
company.
Terrain has interests in a balanced portfolio of eleven onshore
licences in the East Midlands & Weald Basin in England, the
Molasse Basin in Germany and the Lough Neagh Basin in Northern
Ireland. They include production, development, appraisal and
exploration assets. Terrain is currently producing from three oil
fields which supports its overheads. The main value lies in the
Egmating licence to the south of Munich following several
hydrocarbon discoveries by geothermal companies in recent years;
current estimates of recoverable resources are 23.4bcf of gas and 7
million barrels of oil. The initial testing of the Brockham well
was inconclusive so an additional test is being performed at a
further cost; this has negatively impacted the company's value.
Terrain is seeking an exit event in the next 12 months, potentially
a merger with an AIM quoted company.
Latest Results Audited Audited Investment Information GBP'000
2017 2016
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
--------------- -------- -------- -------------------------------- -------
Turnover 614 544 Total cost 972
--------------- -------- -------- -------------------------------- -------
Pre-tax loss 281 543 Income recognised in year/period 12
--------------- -------- -------- -------------------------------- -------
Net assets 6,185 6,466 Equity valuation 781
-------------------------------- -------
Valuation basis: Loan stock valuation 100
-------------------------------- -------
Comparable companies and DCF Total valuation 881
-------------------------------- -------
Voting rights / % of equity
share capital held 7.4%
Total equity held by funds managed by Calculus Capital Limited:
100.0 per cent.
Solab Group Limited ("Solab")
Solab is a long-established manufacturer of fragrances, shampoos
and skincare products for third party customers, including
Penhaligon's and Philip Kingsley.
Solab has been affected by difficult market conditions,
exacerbating the impact of the significant reduction in volumes
from the loss of its largest customer, The Body Shop, several years
ago. Initiatives introduced to improve performance, including a
drive to win new business and enlarge existing customer accounts,
recruiting Julien Laporte (former CEO of Crabtree & Evelyn) as
a part time director and diversifying into pet products and online
direct sales, have unfortunately had limited success and the
company is considering its strategic options.
Latest Results Unaudited Audited Investment Information GBP'000
(group) 2018 2017
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
----------------- --------- -------- -------------------------------- -------
Turnover 16,200 19,000 Total cost 479
----------------- --------- -------- -------------------------------- -------
Pre-tax loss 100 1,500 Income recognised in year/period 35
----------------- --------- -------- -------------------------------- -------
Net assets 1,400 1,500 Equity valuation 180
----------------- --------- -------- -------------------------------- -------
Valuation basis: Loan stock valuation 295
-------------------------------- -------
Comparable companies, comparable
transactions & DCF Total valuation 475
-------------------------------- -------
Voting rights / % of equity
share capital held 7.5%
Total equity held by funds managed by Calculus Capital Limited:
85.1 per cent.
The One Place Capital Limited ("Money Dashboard")
Money Dashboard is a free web based personal financial
management app, which offers its users a view of their finances
(from bank accounts, credit cards, store cards, etc.) in one secure
place.
Money Dashboard has taken advantage of the introduction of the
Open Banking Standards in January 2018 (after significant delays)
to acquire new users and so enhance the efficacy of its data
analytics. This has helped the company reach a number of important
milestones in 2018, including surpassing one million bank accounts
connected to its app, driven by its 450,000 users. At the 2018
British Bank Awards, it was also awarded Best Personal Finance App
for the second year running.
Latest Unaudited 2018 2017 Investment Information GBP'000
Results (group) GBP'000 GBP'000
Year ended 30 Apr 30 Apr
------------------ --------- --------- ----------------------- --------
Turnover 500 600 Total cost 277
------------------ --------- --------- ----------------------- --------
Income recognised in
Pre-tax loss 1,100 700 year/period -
------------------ --------- --------- ----------------------- --------
Net assets 700 400 Equity valuation 277
------------------ --------- --------- ----------------------- --------
Valuation basis: Loan stock valuation -
----------------------- --------
Last price paid Total valuation 277
----------------------- --------
Voting rights / % of
equity share capital
held 2.2%
Total equity held by funds managed by Calculus Capital Limited:
36.4 per cent.
Arcis Biotechnology Holdings Limited ("Arcis")
Arcis Biotechnology Holdings Limited (Arcis) has developed an
innovative way of extracting DNA (and potentially RNA) which has
significant advantages over other techniques.
Nucleic acid extraction is an essential preliminary step before
all molecular diagnostic tests and genetic analysis and so is a
large, growing market. Arcis' chemistry, unlike competitor
products, also protects the DNA / RNA from degradation; this
preservation is novel and highly beneficial. Commercialisation
progress is slow, but positive. Teleflex, a US $ multi-billion
diagnostics company, has signed an exclusive licence, including
upfront payments, to develop a bedside sepsis test and discussions
are at an advanced stage with Hygiena, the world's largest food
testing company, which would lead to several million tests per
annum.
Latest Audited 2018 2017 Investment Information GBP'000
Results (group) GBP'000 GBP'000
Year ended 31 Jul 31 Jul
------------------ --------- --------- ----------------------- --------
Turnover 200 200 Total cost 275
------------------ --------- --------- ----------------------- --------
Income recognised in
Pre-tax loss 1,200 1,400 year/period -
------------------ --------- --------- ----------------------- --------
Net assets 700 1,400 Equity valuation 275
------------------ --------- --------- ----------------------- --------
Valuation basis: DCF Loan stock valuation -
----------------------- --------
Last price paid Total valuation 275
----------------------- --------
Voting rights / % of
equity share capital
held 1.4%
Total equity held by funds managed by Calculus Capital Limited:
35.5 per cent.
Mologic
Information on Mologic Limited is included under details of
Investment Management Review above.
Latest Results Unaudited Audited Investment Information GBP'000
(group) 2018 2017
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- ---------- --------- ----------------------- --------
Turnover 1,992 800 Total cost 200
---------------- ---------- --------- ----------------------- --------
Income recognised in
Pre-tax loss 1,999 1,723 year/period 6
---------------- ---------- --------- ----------------------- --------
Net assets 3,995 2,366 Equity valuation 166
---------------- ---------- --------- ----------------------- --------
Valuation basis: Loan stock valuation 100
----------------------- --------
DCF Total valuation 266
----------------------- --------
Voting rights / % of
equity share capital
held 0.9%
Total equity held by funds managed by Calculus Capital Limited:
30.0 per cent.
MIP Diagnostics
Information on MIP Diagnostics Limited is included under details
Investment Management Review above.
Latest Results Unaudited Audited Investment Information GBP'000
(group) 2018 2017
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- ---------- --------- ----------------------- --------
Turnover 244 51 Total cost 200
---------------- ---------- --------- ----------------------- --------
Income recognised in
Pre-tax loss 366 210 year/period -
---------------- ---------- --------- ----------------------- --------
Net assets 1,200 391 Equity valuation 240
---------------- ---------- --------- ----------------------- --------
Valuation basis: Loan stock valuation 0
----------------------- --------
DCF Total valuation 240
----------------------- --------
Voting rights / % of
equity share capital
held 4.9%
Total equity held by funds managed by Calculus Capital Limited:
4.9 per cent.
Weeding Technologies Limited ("Weedingtech")
Weeding Technologies is a cleantech company focused on replacing
toxic herbicides, particularly in the municipal market.
Weedingtech's technology treats weed and moss using
environmentally friendly hot foam (which keeps the heat on long
enough to kill the weed or moss) rather than herbicides such as
Glyphosate. 2018 has seen increased legal and public focus on the
use of herbicides, particularly in public areas. In August 2018, a
California court awarded $289m against Monsanto, the manufacturer
of Glyphosate based herbicide Round-Up, in respect of a single
cancer sufferer (subsequently reduced to $78m) and a further case
has been launched in January 2019.
France's agriculture minister indicated last week that France
expects to have cut the use of Glyphosate by 80% by 2021. In 2018
Weedingtech continued to position itself as a global leader in
alternative weed control. It has significantly strengthened its
dealer network, particularly on the East and West coasts of the USA
and has a strong pipeline for 2019 consequently.
Latest Unaudited Audited Audited Investment Information
Results 2017 2016 GBP'000
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
------------------ --------- --------- ----------------------- ----------
Turnover 2,625 1,260 Total cost 216
------------------ --------- --------- ----------------------- ----------
Income recognised in
Pre-tax loss 1,679 1,177 year/period -
------------------ --------- --------- ----------------------- ----------
Net assets 1,095 2,086 Equity valuation 233
------------------ --------- --------- ----------------------- ----------
Valuation basis: Loan stock valuation -
----------------------- ----------
Last price paid Total valuation 233
----------------------- ----------
Voting rights / % of
equity share capital
held 2.15%
Total equity held by funds managed by Calculus Capital Limited:
45.9 per cent.
Cloud Trade Technologies Limited
Information on Cloud Trade Technologies Limited is included
under details of Investment Management Review above.
Latest Results Audited Audited Investment Information GBP'000
(group) 2018 2017
GBP'000 GBP'000
Year ended 31 Mar 31 Mar
---------------- --------- --------- ----------------------- --------
Turnover 1,100 800 Total cost 200
---------------- --------- --------- ----------------------- --------
Pre-tax (loss) Income recognised in
/ profit (42) 42 year/period -
---------------- --------- --------- ----------------------- --------
Net assets 200 200 Equity valuation 231
---------------- --------- --------- ----------------------- --------
Valuation basis: Loan stock valuation -
----------------------- --------
DCF Total valuation 231
----------------------- --------
Voting rights / % of
equity share capital
held 3.5%
Total equity held by funds managed by Calculus Capital Limited:
35.4 per cent.
Every1Mobile Limited
Every1Mobile provides digital communication solutions and online
community management through a bespoke platform to multi-national
corporates, international development agencies and non-profit
organisations across Africa.
The company has delivered programmes across South Africa, Kenya,
Nigeria, Ghana, Cote d'Ivoire, Uganda, Sierra Leone, Zambia, and
Rwanda. These initiatives help to achieve key development goals in
areas such as sexual health, digital and financial literacy,
business skills, family planning, gender and nutrition.
Since Calculus' original investment in October 2017,
Every1Mobile has grown 60% year on year, in line with its expansion
plan and has won several major contracts for operations in Africa
and in emerging markets outside Africa, including its first
software-as-a-service contract for delivery of online education
services.
Latest Results Unaudited Unaudited Investment Information GBP'000
2018 2017
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
--------------- --------- --------- -------------------------------- -------
Turnover 1,521 915 Total cost 200
--------------- --------- --------- -------------------------------- -------
Pre-tax loss 1,049 787 Income recognised in year/period
--------------- --------- --------- -------------------------------- -------
Net assets 139 1,029 Equity valuation 230
-------------------------------- -------
Valuation basis: Loan stock valuation 0
-------------------------------- -------
Comparable companies and DCF Total valuation 230
-------------------------------- -------
Voting rights / % of equity
share capital held 3.5%
Total equity held by funds managed by Calculus Capital Limited:
38.2 per cent.
Open Energy Market Limited (OEM)
Open Energy Market is an online trading platform for energy
contracts for medium-large enterprises.
Open Energy Market Limited has created an online platform on
which corporate energy contracts are traded. These contracts
require a bespoke price quote from the energy suppliers due to the
large quantity of energy expected to be consumed. OEM's platform
connects business customers directly to all 16 major energy
providers of gas and electricity removing the need for a
third-party broker.
The energy providers bid for contracts on the platform via a
live auction process which allows businesses to buy energy in a
streamlined and more transparent way. In addition, OEM provides
customers with live energy monitoring, usage analytics and energy
trading services. The company has introduced digital innovation
into the antiquated, manual energy brokerage process in order to
improve transparency and decrease energy costs for its clients.
Calculus Capital invested GBP3 million in January 2018. OEM will
use the funds to increase their direct sales force and software
team, implement platform development including extensions into
other commodities such as water.
Latest Results Audited Unaudited Investment Information GBP'000
(group) 2018 2017
GBP'000 GBP'000
Year ended 31 Jan 31 Jan
----------------- --------- ---------- ----------------------- --------
Turnover 1,171 734 Total cost 200
----------------- --------- ---------- ----------------------- --------
Income recognised in
Pre-tax loss 405 51 year/period -
----------------- --------- ---------- ----------------------- --------
Net liabilities 3,094 377 Equity valuation 230
----------------- --------- ---------- ----------------------- --------
Valuation basis: Loan stock valuation -
----------------------- --------
Last price paid Total valuation 230
----------------------- --------
Voting rights / % of
equity share capital
held 1.9%
Total equity held by funds managed by Calculus Capital Limited:
28.2 per cent.
Other Statutory Information
Company activities and status
The Company is registered as a public limited company and
incorporated in England and Wales with registration number
07142153. Its shares have a premium listing and are traded on the
London Stock Exchange.
On incorporation, the Company was an investment company under
section 833 of the Companies Act 2006. On 18 May 2011, investment
company status was revoked by the Company. This was done in order
to allow the Company to pay dividends to shareholders using the
special reserve (a distributable capital reserve), which had been
created on the cancellation of the share premium account on 20
October 2010 and on 1 November 2017.
Company business model
The Company's business model is to conduct business as a VCT.
Company affairs are conducted in a manner to satisfy the conditions
to enable it to obtain approval as a VCT under sections 258-332 of
the Income Tax Act 2007 ("ITA 2007").
Investment policy
It is intended that a minimum of 75 per cent of the monies
raised by the Company will be invested in a variety of investments
which will be selected to preserve capital value, whilst generating
income, and may include:
-- Bonds issued by the UK Government; and
-- Fixed income securities issued by major companies and
institutions, liquidity funds and fixed deposits with counterparty
credit rating of not less than A minus (Standard & Poor's
rate)/A3 (Moody's rated).
The Company's policy is to build a diverse portfolio of
Qualifying Investments of primarily established unquoted companies
across different industries and investments which may be by way of
loan stock and/or fixed rate preference shares as well as Ordinary
shares to generate income. The amount invested in any one sector
and any one company will be no more than 20 per cent and 10 per
cent respectively of the qualifying portfolio. These percentages
are measured as at the time of investment. The Board and its
Investment Manager, Calculus Capital Limited, will review the
portfolio of investments on a regular basis to assess asset
allocation and the need to realise investments to meet the
Company's objectives or maintain VCT status.
Where investment opportunities arise in one asset class which
conflict with assets held or opportunities in another asset class,
the Board will make the investment decision. Under its Articles,
the Company has the ability to borrow a maximum amount equal to 25
per cent of the aggregate amount paid on all shares issued by the
Company (together with any share premium thereon). The Board will
consider borrowing if it is in the shareholders' interests to do
so. In particular, because the Board intends to minimise cash
balances, the Company may borrow on a short-term to medium-term
basis for cashflow purposes and to facilitate the payment of
dividends and expenses in the early years.
Long term viability
In assessing the long-term viability of the Company, the
Directors have had regard to the guidance issued by the Financial
Reporting Council. The Directors have assessed the prospects of the
Company for a period of five years, which was selected because this
is the minimum holding period for VCT shares. The Board's strategic
review considers the Company's income and expenses, dividend
policy, liquid investments and ability to make realisations of
qualifying investments. These projections are subject to
sensitivity analysis which involves flexing a number of the main
assumptions underlying the forecast both individually and in
unison. Where appropriate, this analysis is carried out to evaluate
the potential impact of the Company's principal risks actually
occurring. Based on the results of this analysis, the Directors
have a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due
over the five-year period of their assessment. The principal
assumptions used are as follows: i) Calculus Capital Limited pays
any expenses in excess of 3.0 per cent of NAV as set out on page 30
of the Accounts; ii) the level of dividends paid are at the
discretion of the Board; iii) the Company's liquid investments
which include cash, money market instruments and quoted shares can
be realised as permitted by the Company's investment policy; iv)
the illiquid nature of the qualifying portfolio. Based on the
results of this analysis, the Directors have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due.
In making this statement the Board carried out a robust
assessment of the principal risks facing the Company including
those that might threaten its business model, future performance,
solvency or liquidity.
Alternative investments funds directive (AIFMD)
The AIFMD regulates the management of alternative investment
funds, including VCTs. The VCT is externally managed under the
AIFMD by Calculus Capital Limited which is a small authorised
Alternative Investment Fund Manager.
Risk diversification
The Board controls the overall risk of the Company. Calculus
Capital Limited will ensure the Company has exposure to a
diversified range of Qualifying Investments from different
sectors.
Since November 2015, the types of non-qualifying investment
include:
-- Bonds issued by the UK Government; and
-- Fixed income securities issued by major companies and
institutions, liquidity funds and fixed deposits with counterparty
credit rating of not less than A minus (Standard & Poor's
rate)/A3 (Moody's rated).
VCT regulation
The Company's investment policy is designed to ensure that it
will meet, and continue to meet, the requirements for approved VCT
status from HM Revenue & Customs. Amongst other conditions, the
Company may not invest more than 15 per cent (by value at the time
of investment) of its investments in a single company and must have
at least 70 per cent by value of its investments throughout the
period in shares or securities in qualifying holdings, of which 30
per cent by value must be Ordinary shares which carry no
preferential rights ("eligible shares"). For funds raised from 6
April 2011, the requirement for 30 per cent to be invested in
eligible shares was increased to 70 per cent.
Changes to legislation were made in the Finance Bill 2018 such
that from 1 March 2020 the percentage by value of the Company's
investments in shares or securities which must be invested by and
maintained in qualifying holdings will rise to 80 per cent. In
addition, 30 per cent of any money raised after 6 April 2018 will
need to be invested in qualifying holdings within 12 months after
the end of the accounting period in which the money was raised and
loan stock investments in investee companies must be unsecured and
must not carry a coupon which exceeds 10% per annum on average over
a five year period.
Key strategic issues considered during the year
Performance
The Board reviews performance by reference to a number of key
performance indicators ("KPIs") and considers that the most
relevant KPIs are those that communicate the financial performance
and strength of the Company as a whole, being;
-- total return per share
-- net asset value per share
The financial highlights of the Company can be found after the
contents page of the Report and Accounts.
Further KPIs are those which show the Company's position in
relation to the VCT tests which it is required to meet in order to
meet and maintain its VCT status. The Qualifying % is disclosed in
the Investment Manager's review. The Company has received approval
as a VCT from HM Revenue & Customs.
Principal risks and uncertainties facing the Company and
management of risk
The Company is exposed to a variety of risks. The principal
financial risks, the Company's policies for managing these risks
and the policy and practice with regard to financial instruments
are summarised in note 16 to the Accounts.
The Board has also identified the following additional risks and
uncertainties:
Regulatory risk
The Company has received approval as a VCT under ITA 2007.
Failure to meet and maintain the qualifying requirements for VCT
status could result in the loss of tax reliefs previously obtained,
resulting in adverse tax consequences for investors, including a
requirement to repay the income tax relief obtained, and could also
cause the Company to lose its exemption from corporation tax on
chargeable gains.
The Board receives regular updates from the Investment Manager
and financial information is produced on a monthly basis. The
Investment Manager monitors VCT regulation and presents its
findings to the Board on a quarterly basis. The Investment Manager
builds in 'headroom' when making investments to allow for changes
in valuation. This 'headroom' is reviewed prior to making and
realising qualifying investments.
Independent advisers are used to monitor and advise on the
Company's compliance with the VCT rules.
Qualifying investments
There are restrictions regarding the type of companies in which
the Company may invest and there is no guarantee that suitable
investment opportunities will be identified.
Investment in unquoted companies and AIM-traded companies
involves a higher degree of risk than investment in companies
traded on the main market of the London Stock Exchange. These
companies may not be freely marketable and realisations of such
investments can be difficult and can take a considerable amount of
time. There may also be constraints imposed upon the Company with
respect to realisations in order to maintain its VCT status which
may restrict the Company's ability to obtain the maximum value from
its investments.
Calculus Capital Limited has been appointed to manage the
qualifying investments portfolio and has extensive experience of
investing in this type of investment. Regular reports are provided
to the Board and a representative of Calculus Capital Limited is on
the Company's board. Risk is managed through the investment policy
which limits the amount that can be invested in any one company and
sector to 10 per cent and 20 per cent of the qualifying portfolio
respectively at the time of investment.
Liquidity/ marketability risk.
Due to the holding period required to maintain up-front tax
reliefs, there is a limited secondary market for VCT shares and
investors may therefore find it difficult to realise their
investments. As a result, the market price of the shares may not
fully reflect, and will tend to be at a discount to, the underlying
net asset value. The level of discount may also be exacerbated by
the availability of income tax relief on the issue of new VCT
shares. The Board recognises this difficulty, and has taken powers
to buy back shares, which could be used to enable investors to
realise investments.
Employees, environmental, human rights and community issues
The Company has no employees and the Board comprises entirely
non-executive directors. Day-to-day management of the Company's
business is delegated to the Investment Manager (details of the
management agreement are set out in the Directors' Report) and the
Company itself has no environmental, human rights, or community
policies. In carrying out its activities and in its relationships
with suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Gender Diversity
At the year end, the Board of directors comprised two male
directors and two female Directors. On the 1st March 2019, Jan Ward
was appointed, increasing the number of female board members to
three.
Statement regarding annual report and accounts
The Directors consider that taken as a whole, the Annual Report
and Accounts is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
Michael O'Higgins, Chairman
9 May 2019
EXTRACT OF THE DIRECTOR'S REPORT
Share capital
The capital structure of the Company and movements during the
year are set out in note 12 of the Accounts. At the year end, no
shares were held in Treasury. During the year, the following
changes to the Company's share capital have taken place:
Total shares in issue - 1 March
2018 11,642,717
Issue of new Ordinary shares -
4 April 2018 1,750,548
Issue of new Ordinary shares -
5 April 2018 28,750
Issue of new Ordinary shares -
1 August 2018 1,176,844
Share buyback - 21 August 2018 (10,000)
Share buyback - 5 November 2018 (38,000)
Issue of new Ordinary shares -
23 January 2019 2,116,998
Issue of new Ordinary shares -
28 February 2019 1,754,516
Total shares in issue - 28 February
2019 18,422,373
Since the year end a further 2,076,361 new Ordinary shares have
been issued pursuant to an offer for subscription.
Substantial Shareholdings
As at 28 February 2019, Mr Alistair Watson held 645,499 Ordinary
shares representing 3.5% of the share capital of the Company. There
were no other notifiable interests in the voting rights of the
Company.
Management
Calculus Capital Limited is the qualifying Investments'
portfolio manager. Calculus Capital Limited was appointed as
Investment Manager pursuant to an agreement dated 2 March 2010, a
supplemental agreement was entered into on 7 January 2011 in
relation to the management of the C Share fund, a further
supplemental agreement entered into on 26 October 2015 in relation
to the management of the D share fund and covers the addition of
company secretarial duties and a further supplemental management
agreement entered into on 12 September 2017 in relation to the
merged share fund (together, the "Calculus Management Agreements").
From 12 September 2017, Calculus Capital Limited agreed to meet the
annual expenses of the Company in excess of 3.0 per cent of the net
asset value of the Ordinary shares.
Pursuant to the Calculus Management Agreements, Calculus Capital
Limited will receive an annual management fee of 1.75 per cent of
the net asset value of the Ordinary share fund, calculated and
payable quarterly in arrears.
Calculus Capital Limited is also entitled to a fee of GBP15,000
per annum (plus VAT where applicable) for the provision of company
secretarial services.
For the year to 28 February 2019, Calculus Capital Limited
charged GBP197,314 in management fees, GBP18,000 in company
secretarial fees, and did not contribute to the expenses (2018:
charged GBP154,089 in management fees, GBP18,000 in company
secretarial fees and contributed GBP26,435 to the expenses
cap).
Pursuant to a performance incentive agreement dated 26 October
2015, Calculus Capital Limited is entitled to a performance
incentive fee equal to 20 per cent of Ordinary shareholder
(formerly D shareholder) dividends and distributions paid in excess
of 105 pence.
Investec Structured Products was appointed as Investment Manager
pursuant to an agreement dated 2 March 2010, and their appointment
as Investment Manager terminated in February 2017. Certain
performance incentive agreements were entered into with Calculus
Capital Limited and Investec Structured Products.
Pursuant to a performance incentive agreement between the
Company, Calculus Capital Limited and Investec Structured Products
dated 2 March 2010, Investec Structured Products and Calculus
Capital Limited will each receive a performance incentive fee
payable in cash of an amount equal to 10 per cent of dividends and
distributions paid to old ordinary shareholders following the
payment of such dividends and distributions provided that such
shareholders have received in aggregate distributions of at least
105p per ordinary share (including the relevant distribution being
offered).
Pursuant to a performance incentive agreement between the
Company, Calculus Capital Limited and Investec Structured Products
dated 7 January 2011, Investec Structured Products and Calculus
Capital Limited will be entitled to performance incentive fees as
set out below:
-- 10 per cent of C shareholder proceeds in excess of 105p up to
and including proceeds of 115p per C share, such amount to be paid
within ten business days of the date of payment of the relevant
dividend or distribution pursuant to which a return of 115p per C
share is satisfied; and
-- 10 per cent of C shareholder proceeds in excess of 115p per C
share, such amounts to be paid within ten business days of the date
of payment of the relevant dividend or distribution,
provided that C shareholders received at least 70p per C share
on or before 14 March 2017 and at least a further 45p per C share
is received or offered for payment on or before the 14 March
2019.
Continuing Appointment of the Investment Manager
The Board keeps the performance of Calculus Capital Limited
under continual review. A formal review of the Investment Manager's
performance and the terms of their engagement has been carried out
and the Board are of the opinion that the continuing appointment of
Calculus Capital Limited as Investment Manager is in the interests
of shareholders as a whole. The Board is satisfied with the
performance of the Company to date. The Board is confident that the
VCT qualifying tests will continue to be met.
Financial Risk Management
The principal financial risks and the Company's policies for
managing these risks are set out in note 16 to the Accounts.
Going Concern
In assessing the going concern basis of accounting, the
Directors have had regard to the guidance issued by the Financial
Reporting Council. After making enquiries, and having reviewed the
portfolio, balance sheet and projected income and expenditure for a
period of twelve months from the date these financial statements
were approved, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operation for at
least the next twelve months. The Directors have therefore adopted
the going concern basis in preparing the Accounts.
Annual General Meeting
The Annual General Meeting will be held at the offices of
Calculus Capital Limited, 104 Park Street, London, W1K 6NF at
11.30am on 4 July 2019.
DIRECTOR'S RESPONSIBILITIES STATEMENT
Statement of Directors' Responsibilities in respect of the
Annual Report and the Accounts
The directors are responsible for preparing the Annual Report
and the Accounts in accordance with applicable law and
regulations.
Company law requires the directors to prepare Accounts for each
financial year. Under that law they have elected to prepare the
Accounts in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable laws).
Under company law the Directors must not approve the Accounts
unless they are satisfied that they give a true and fair view of
the state of affairs and profit or loss of the Company for that
period.
In preparing these Accounts, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the Accounts; and
-- prepare the Accounts on the going concern basis unless it is
inappropriate to presume that the Company will continue in
business.
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
the Accounts 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.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that comply with that law and those regulations, and for ensuring
that the Annual Report includes information required by the Listing
Rules of the Financial Conduct Authority.
The Accounts are published on the www.calculuscapital.com
website, which is a website maintained by the Company's investment
manager, Calculus Capital Limited. The maintenance and integrity of
the website maintained by Calculus Capital Limited is, so far as it
relates to the Company, the responsibility of Calculus Capital
Limited. The work carried out by the Auditor does not involve
consideration of the maintenance and integrity of this website and
accordingly, the Auditor accepts no responsibility for any changes
that have occurred to the Accounts since they were initially
presented on the website. Visitors to the website need to be aware
that legislation in the United Kingdom covering the preparation and
dissemination of the Accounts may differ from legislation in their
jurisdiction.
We confirm that to the best of our knowledge:
-- the Accounts, prepared in accordance with UK accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
-- the Annual Report including the Strategic Report includes a
fair review of the development and performance of the business and
the position of the Company together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Michael O'Higgins Chairman
9 May 2019
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the year ended 28 February 2019
and the year ended 28 February 2018 but is derived from those
accounts. Statutory Accounts for 2018 have been delivered to the
Registrar of Companies, and those for 2019 will be delivered in due
course. The Auditor has reported on these accounts; their report
was (i) unqualified (ii) did not include a reference to any matters
to which the Auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006. The text of the
Auditor's report can be found in the Company's full Annual Report
and Accounts at https://www.calculuscapital.com/calculus-vct/ .
INCOME STATEMENT
for the year ended 28 February 2019
Year Ended 28 February 2019 Year Ended 28 February 2018
Revenue Capital Revenue Capital
Return Return Total Return Return Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Losses) /gains on investments
at fair value 9 - (612) (612) - 232 232
Losses on disposal of investments
9 - (88) (88) - (159) (159)
Income 3 91 - 91 65 - 65
Investment management fee
4 (49) (148) (197) (39) (115) (154)
Costs of acquiring Neptune - - -
Calculus assets and liabilities - - - (55) - (55)
Other expenses 5 (221) - (221) (202) - (202)
Deficit before taxation (179) (848) (1,027) (231) (42) (273)
Taxation 6 - - - - - -
Deficit attributable to
shareholders (179) (848) (1,027) (231) (42) (273)
Deficit per Ordinary share
8 (1.3)p (6.0)p (7.3)p (2.3)p (0.4)p (2.7)p
All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the
year.
There is no other comprehensive income as there were no other
gains or losses other than those passing through the Income
Statement.
The revenue and capital return columns are both prepared in
accordance with the AIC SORP.
The notes on pages 51 to 64 form an integral part of these
Accounts
STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2019
Share Share Special Capital Capital Capital Revenue Total
Capital Premium Reserve redemption Reserve Reserve Reserve
GBP'000 GBP'000 GBP'000 Reserve Realised Unrealised GBP'000
GBP'000 GBP'000
For the year
ended 28
February 2019
1 March 2018 116 298 9,974 56 451 171 (936) 10,130
Investment
holding losses - - - - - (612) - (612)
Loss on disposal
of investments - - - - (88) - - (88)
New share issue 68 5,446 - - - - - 5,514
Expenses of
share issue - (98) - - - - - (98)
Share buybacks
for
cancellation - - (35) - - - - (35)
Management fee
allocated
to - - - - (148) - - (148)
capital
Change in
accrual in
IFA - (62) - - - - - (62)
commission
Revenue return
after
tax - - - - - - (179) (179)
Dividends paid - - (451) - - - - (451)
28 February 2019 184 5,584 9,488 56 215 (441) (1,115) 13,971
For the year
ended 28
February 2018
1 March 2017 141 7,046 1,277 - 725 (61) (705) 8,423
Investment
holding gains - - - - - 232 - 232
Loss on disposal
of investments - - - - (159) - - (159)
New share issue 31 2,639 3 - - - - 2,673
Expense of share
issue - (20) - - - - - (20)
Management fee
allocated
to capital - - - - (115) - - (115)
Purchase of
shares for
cancellation
with merger
of classes (55) - - 55 - - - -
Cancellation of
share
premium account - (9,342) 9,342 - - - - -
Share buybacks
for cancellation (1) - (49) 1 - - - (49)
Change in accrual
in
IFA commission - (25) 2 - - - - (23)
Revenue return
after
tax - - - - - - (231) (231)
Dividends paid - - (601) - - - - (601)
28 February 2018 116 298 9,974 56 451 171 (936) 10,130
The notes on pages 51 to 64 form an integral part of these
Accounts
STATEMENT OF FINANCIAL POSITION
at 28 February 2019
28 February 28 February
2019 2018
Note GBP'000 GBP'000
Fixed assets
Investments at fair value through
profit or loss 9 11,593 7,982
Current assets
Debtors 10 1,417 44
Cash at bank and on deposit 1,176 2,267
Creditors: amount falling due within
one year
Creditors 11 (145) (142)
Net current assets 2,448 2,169
Non-current liabilities
IFA trail commission (70) (21)
Net assets 13,971 10,130
Capital and reserves
Called-up share capital 12 184 116
Share premium 5,584 298
Special reserve 9,488 9,974
Capital redemption reserve 56 56
Capital reserve - realised 215 451
Capital reserve - unrealised (441) 171
Revenue reserve (1,115) (936)
Equity shareholders' funds 13,971 10,130
Net asset value per Ordinary share
- basic 13 75.8p 87.0p
The notes on pages 51 to 64 form an integral part of these
Accounts. The financial statements on pages 46 to 50 were approved
by the Board of directors of Calculus VCT plc and were authorised
for issue on 9 May 2019 and were signed on its behalf by:
Michael O'Higgins
Chairman
STATEMENT OF CASHFLOWS
for the year ended 28 February 2019
Year Ended Year Ended
28 Feb 2019 28 Feb 2018
Note GBP'000 GBP'000
Cash flows from operating activities
Investment income received 47 67
Deposit interest received 3 2
Investment management fees (190) (145)
Other cash payments (213) (264)
(353) (340)
Net cash flow from operating activities
Cash flow from investing activities
Purchase of investments 14 (6,057) (1,070)
Sale of investments 1,746 73
Net cash flow from investing activities (4,311) (997)
Cash flow from financing activities
Ordinary share issue/ D share issue 4,157 418
Expense of Ordinary/D share issue (94) (127)
IFA trail commission (4) (3)
Neptune-Calculus cash received - 286
Expenses of Neptune-Calculus transaction - (102)
Share buybacks for cancellation (35) (49)
Equity dividend paid (451) (601)
Net cash flow from financing activities 3,573 (178)
(Decrease)/increase in cash and
cash equivalents
Analysis of changes in cash and (1,091) (1,515)
cash equivalents
Cash and cash equivalents at the
beginning of year 2,267 3,782
Net cash (decrease)/increase (1,091) (1,515)
Cash and cash equivalents at the
year end 1,176 2,267
The notes on pages 51 to 64 form an integral part of these
Accounts.
NOTES TO THE ACCOUNTS
1. Company information
The Company is incorporated in England and Wales and operates
under the Companies Act 2006 (the Act) and the regulations made
under the Act as a public company limited by shares, with
registered number 07142153. The registered office of the Company is
104 Park Street, London, W1K 6NF.
2. Accounting Policies Basis of accounting
The financial statements have been prepared on a basis compliant
with applicable United Kingdom accounting standards, including
Financial Reporting Standard 102 - The Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland ('FRS102')
and with the Act. The Directors have prepared the financial
statements on a basis compliant with the recommendations of the
Statement of Recommended Practice ("the SORP") for Investment Trust
Companies and Venture Capital Trusts produced by the Association of
Investment Companies ("AIC").
The financial statements are presented in Sterling (GBP).
Going concern
After reviewing the Company's forecasts and projections, the
Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future (being a period 12 months from the date these
financial statements were approved). The Company therefore
continues to adopt the going concern basis in preparing its
financial statements.
Significant judgements and estimates
Preparations of the financial statements requires management to
make significant judgements and estimates. The items in the
financial statements where these judgements and estimates have been
made are in the valuation of unquoted investments. The valuation
methodologies used when valuing unquoted investments provide a
range of possible values. Judgements are used to estimate where in
the range the fair value lies. The sensitivity analysis in note 16
demonstrates the impact on the portfolio of applying alternative
values in the upside and downside.
As at 28 February 2019 the value of unquoted investments
included within the Company's investment portfolio was GBP5,532,937
(2018: GBP4,726,742).
Investments
The Company has adopted FRS 102, sections 11 and 12, for the
recognition of financial instruments. The Company's business is
investing in financial assets with a view to profiting from their
total return in the form of increases in fair value. Fair value is
the amount for which an asset can be exchanged between
knowledgeable, willing parties in an arm's length transaction. The
Company manages and evaluates the performance of these investments
on a fair value basis in accordance with its investment strategy,
and information about the investments is provided on this basis to
the Board of directors.
Investments held at fair value through profit or loss are
initially recognised at fair value, being the consideration given
and excluding transaction or other dealing costs associated with
the investment, which are expensed and included in the capital
column of the Income Statement.
After initial recognition, investments, which are classified as
at fair value through profit or loss, are measured at fair value.
Gains or losses on investments classified as at fair value through
profit or loss are recognised in the capital column of the Income
Statement and allocated to the capital reserve - unrealised or
realised as appropriate.
All purchases and sales of quoted investments are accounted for
on the trade date basis. All purchases and sales of unquoted
investments are accounted for on the date that the sale and
purchase agreement becomes unconditional.
For quoted investments and money market instruments fair value
is established by reference to bid, or last, market prices
depending on the convention of the exchange on which the investment
is quoted at the close of business on the balance sheet date.
Unquoted investments are valued using an appropriate valuation
technique so as to establish what the transaction price would have
been at the balance sheet date. Such investments are valued in
accordance with the most recent International Private Equity and
Venture Capital ("IPEV") guidelines. Primary indicators of fair
value are derived from earnings or sales multiples, using
discounted cash flows, recent arm's length market transactions by
independent third parties, from net assets, or where appropriate,
at price of recent investments.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents does not include liquidity fund investments as the
Company does not consider the risk associated with changes in value
to be insignificant.
Debtors
Short term debtors are measured at transaction price, less any
impairment.
Creditors
Short term trade creditors are measured at the transaction
price.
Income
Dividends receivable on equity shares are recognised as revenue
on the date on which the shares or units are marked as ex-dividend.
Where no ex-dividend date is available, the revenue is recognised
when the Company's right to receive it has been established.
Interest receivable from fixed income securities and premiums on
loan stock investments and preference shares is recognised using
the effective interest rate method. Interest receivable and
redemption premiums are allocated to the revenue column of the
Income Statement.
Interest receivable on bank deposits is included in the
financial statements on an accruals basis. Provision is made
against this income where recovery is doubtful.
Other income is credited to the revenue column of the Income
Statement when the Company's right to receive the income is
established.
Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged to the Income Statement as follows:
Expenses are charged through revenue in the Income Statement
except as follows:
-- costs which are incidental to the acquisition or disposal of
an investment are taken to the capital column of the Income
Statement.
-- expenses are charged to the capital column in the Income
Statement where a connection with the maintenance or enhancement of
the value of the investments can be demonstrated. In this respect
investment management fees have been allocated 75 per cent to the
capital column and 25 per cent to the revenue column in the Income
Statement, being in line with the Board's expected long-term split
of returns, in the form of capital gains and revenue respectively,
from the investment portfolio of the Company.
-- expenses associated with the issue of shares are deducted
from the share premium account. Annual IFA trail commission
covering a five-year period since share allotment has been provided
for in the Accounts as, due to the nature of the Company, it is
probable that this will be payable. The commission is apportioned
between current and non-current liabilities.
Expenses incurred by the Company in excess of the agreed cap,
currently 3 per cent of NAV (excluding irrecoverable VAT, annual
trail commission and performance incentive fees), could be clawed
back from Calculus Capital Limited. Any clawback is treated as a
credit against the expenses of the Company.
Capital reserve
The realised capital return component of the return for the year
is taken to the distributable capital reserves and the unrealised
capital component of the return for the year is taken to the
non-distributable capital reserves within the Statement of Changes
in Equity.
Share premium
The share premium is the excess paid by shareholders on share
allotments above the nominal value of the share. There is currently
a share premium account on the Ordinary shares issued since 1
November 2017. In order to allow the portfolios to pay dividends to
shareholders using a distributable capital reserve, the special
reserve was created on the cancellation of the share premium
account on 20 October 2010 for original ordinary shares, 23
November 2011 for C shares and 1 November 2017 for the Ordinary
share class.
Special reserve
The special reserve was created by the cancellation of the
original ordinary share fund's share premium account on 20 October
2010. A further cancellation of the share premium account occurred
on 23 November 2011 for both the original ordinary share fund and C
share fund. A further cancellation of the share premium account
occurred on 1 November 2017 for the Ordinary share fund. The
special reserve is a distributable reserve created to be used by
the Company inter alia to write off losses, fund market purchases
of its own shares and make distributions and/or for other corporate
purposes.
The Company was formerly an investment company under section 833
of the Companies Act 2006. On 18 May 2011, investment company
status was revoked by the Company. This was done in order to allow
the Company to pay dividends to shareholders using the special
reserve.
Taxation
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the reporting date where
transactions or events that result in an obligation to pay more tax
in the future have occurred at the reporting date. This is subject
to deferred tax assets only being recognised if it is considered
more likely than not that there will be suitable profits from which
the future reversals of the underlying timing differences can be
deducted. Timing differences are differences between the Company's
taxable profits and its results as stated in the financial
statements.
Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which the timing differences
are expected to reverse, based on tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is measured on a non- discounted basis.
No taxation liability arises on gains from sales of fixed asset
investments by the Company by virtue of its venture capital trust
status. However, the net revenue (excluding UK dividend income)
accruing to the Company is liable to corporation tax at the
prevailing rates.
Any tax relief obtained in respect of management fees allocated
to capital is reflected in the capital reserve - realised and a
corresponding amount is charged against revenue. The relief is the
amount by which corporation tax payable is reduced as a result of
capital expenses.
Dividends
Dividends payable to equity shareholders are recognised in the
Statement of Changes in Equity in the period which they are paid or
have been approved by shareholders in the case of a final dividend
and become a liability of the Company.
Share buybacks
Where shares are purchased for cancellation, the consideration
paid, including any directly attributable incremental costs, is
deducted from distributable reserves. As required by the Companies
Act 2006, the equivalent of the nominal value of shares cancelled
is transferred to the capital redemption reserve.
3. Income
Year Ended Year Ended
28 Feb 2019 28 Feb 2018
GBP'000 GBP'000
UK dividends - -
UK unfranked loan stock interest 73 59
Liquidity Fund interest 15 4
Bank interest 3 2
91 65
Total income comprises:
Interest 91 65
Dividends - -
91 65
All income arose in the United Kingdom.
The Board considered operating segments and considered there to
be one, that of investing in financial assets.
4. Investment Management Fee
Year Ended 28 February 2019 Year Ended 28 February 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment management
fee 49 148 197 39 115 154
No performance fee was paid during the year.
For the year ended 28 February 2019, Calculus Capital Limited
contributed GBPnil (2018: GBP26,435 contributed) to the expenses of
the Company such that its net management fee was GBP197,314 (2018:
GBP127,654). At 28 February 2019, there was GBP49,945 due to
Calculus Capital Limited for management fees (2018: GBP42,310 due
to Calculus Capital Limited).
Details of the terms and conditions of the investment management
agreement are set out in the Directors' Report.
5. Other expenses
Year Ended Year Ended
28 Feb 2019 28 Feb 2018
GBP'000 GBP'000
Directors' fees 65 57
Calculus secretarial fee 18 18
Link accounting fees 38 40
Fees payable to the Company's auditor for
the audit of the 29 28
Company's annual accounts.
Other 71 85
Clawback of expenses in excess of expense
cap repayable from the Manager - (26)
221 202
Further details of directors' fees can be found in the
Directors' Remuneration Report on page 35 to 39 of the
Accounts.
6. Taxation
Year Ended 28 February Year Ended 28 February
2019 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss before tax (179) (848) (1,027) (231) (42) (273)
Theoretical tax
at UK Corporation
Tax rate of 19.0%
(2018: 19.1%) (34) (161) (195) (44) (8) (52)
Timing differences:
loss not recognised,
carried forward 34 28 62 44 22 66
Effects of non-taxable
(gains)/ losses - 133 133 - (14) (14)
Tax charge - - - - - -
The Corporation Tax rate was at 19% for the whole of the
reporting period.
At 28 February 2019, the Company had GBP1,514,379 (28 February
2018: GBP1,184,503) of excess management expenses to carry forward
against future taxable profits.
The Company's deferred tax asset of GBP257,444 (28 February
2018: GBP201,365) has not been recognised due to the fact that it
is unlikely the excess management expenses will be set off in the
foreseeable future.
7. Dividends
Year Ended Year Ended
28 Feb 2019 28 Feb 2018
GBP'000 GBP'000
Original ordinary shares
Declared and paid: 7.00p per Ordinary share
in respect of the year ended 28 February
2018 - 332
C shares
Declared and paid: 3.00p per C share in respect
of the year ended 28 February 2018 - 58
D shares
Declared and Paid: 4.25p per Eligible D share
in respect of the year ended 28 February
2018 - 211
New ordinary shares
Declared and paid: 4.00p per Ordinary share
in respect of the year ended 28 February 451 -
2019 (2018: 0.00p)
The Board have proposed an Ordinary share dividend in respect of
the year to 28 February 2019 of 3.4 pence per share which, if
approved by shareholders, will be paid to all Ordinary shareholders
on the register on 5 July 2019.
The proposed dividend is subject to approval by shareholders at
the forthcoming Annual General Meeting and has not been included as
a liability in these Accounts.
8. Return per Share
Year Ended 28 February 2019 Year Ended 28 February 2018
Revenue pence Capital Total Revenue Capital Total
pence pence pence pence pence
Return per Ordinary share (1.3) (6.0) (7.3) (2.3) (0.4) (2.7)
Ordinary share return
For the period from 1 March 2017 to 31 July 2017 the number of
Ordinary shares has been taken to be the aggregate equivalent
number of Ordinary shares which each of the original ordinary and C
share classes represented on the basis of the merger ratios.
Throughout the period 1 March to 31 July 2017 the number of
original ordinary shares was 4,738,463 equivalent to 683,243
Ordinary shares and the number of C shares was 1,931,095 equivalent
to 470,197 Ordinary shares 7,511,697 D shares were in existence at
1 March 2017 and a further 160,810 D shares were issued on 7 April
2017. 2,511,180 new Ordinary shares were issued on 12 September
2017, 367,800 new Ordinary shares were allotted on 20 December 2017
and 62,210 new Ordinary shares were bought back between 3 and 11
January 2018. On this basis, the weighted average number of
Ordinary Shares for the period 1 March 2017 to 28 February 2018 was
10,033,757 Ordinary shares.
Revenue return per Ordinary share is based on the net revenue
loss after taxation of GBP179,402 (2018: GBP230,358) and on
14,129,738 Ordinary shares, (2018: 10,033,757 implied Ordinary
shares) being the weighted average number of Ordinary shares in
issue during the period.
Capital return per Ordinary share is based on the net capital
loss for the period of GBP847,995 (2018: GBP42,305) and on
14,129,738 Ordinary shares (2018: 10,033,757 implied Ordinary
shares) being the weighted average number of Ordinary shares in
issue during the period.
Total return per Ordinary share is based on the net loss for the
period of GBP1,027,397 (2018: GBP272,663) and on 14,129,738
Ordinary shares (2018: 10,033,757 implied Ordinary shares), being
the weighted average number of Ordinary shares in issue during the
period.
9. Investments
Year Ended 28 February 2019
VCT Other Investments Total
Qualifying
Investments
GBP'000 GBP'000 GBP'000
Opening book cost 5,163 2,648 7,811
Opening investment holding gains 169 2 171
Opening valuation 5,332 2,650 7,982
Movements in year:
Purchases at cost 1,857 4,200 6,057
Sales proceeds (546) (1,200) (1,746)
Realised losses on sales (90) 2 (88)
Increase in investment holding (losses)/gains (616) 4 (612)
Movements in year 605 3,006 3,611
Closing valuation 5,937 5,656 11,593
Closing book cost 6,384 5,650 12,034
Closing investment holding (losses)/gains (447) 6 (441)
Closing valuation 5,937 5,656 11,593
In the year to 28 February 2019, Air Leisure Group Limited which
cost GBP200,000 was written down in full. Also during the year, the
Company sold its investment in Origin Broadband Limited. The
investment cost GBP226,000 and was sold for GBP44,000.
There have not been any transaction costs in the year to 28
February 2019.
Note 16 to the financial statements provides a detailed analysis
of investments held at fair value through profit or loss.
10. Debtors
Year Ended Year Ended
28 Feb 2019 28 Feb 2018
GBP'000 GBP'000
Prepayments and accrued income 60 18
Share issue proceeds 1,357 -
Clawback of expenses in excess of 3% cap
payable by the Manager - 26
1,417 44
11. Creditors
Year Ended Year Ended
28 Feb 2019 28 Feb 2018
GBP'000 GBP'000
Management fees 50 42
Audit fees 35 33
Directors' fees 11 11
Secretarial fees 5 5
Administration fees 3 3
Costs of acquiring Neptune-Calculus assets
and liabilities 8 8
IFA trail commission 8 -
New issue costs 4 -
Other creditors 21 40
145 142
12. Share Capital
Number of shares Ordinary
shares
Opening balance 01 March 2018 11,642,717
New issue of shares 6,827,656
Share buyback Ordinary shares (48,000)
Closing balance 28 February 2019 18,422,373
Ordinary
Nominal value share
GBP'000
Opening balance 01 March 2018 116
New issue of shares 68
Closing balance 28 February 2019 184
On 4 April 2018, 1,750,548 Ordinary shares were issued for total
consideration of GBP1,493,918. On 5 April 2018, 28,750 Ordinary
shares were issued for total consideration of GBP24,535. On 1
August 2018, 1,176,844 Ordinary shares were issued for total
consideration of GBP985,254.
On 21 August 2018 and 5 November 2018, the Company bought back
for cancellation 10,000 and 38,000 Ordinary shares
respectively.
On 23 January 2019, 2,116,998 Ordinary shares were issued for
total consideration of GBP1,652,317. On 28 February 2019, 1,754,516
Ordinary shares were issued for total consideration of
GBP1,357,294.
All Ordinary shares are fully paid, rank pari passu and carry
one vote per share.
Under the Articles of Association, a resolution for the
continuation of the Company as a VCT will be proposed at the Annual
General Meeting falling after the tenth anniversary of the last
allotment (from time to time) of shares in the Company and
thereafter at five-yearly intervals.
13. Net Asset Value per Share
28 February 28 February
2019 2018
GBP'000 GBP'000
Net asset value per Ordinary
share 75.8p 87.0p
The basic net asset value per Ordinary share is based on net
assets of GBP13,971,482 (28 February 2018: GBP10,129,722) and on
18,422,373 Ordinary shares (28 February 2018: 11,642,717), being
the number of Ordinary shares in issue at the end of the year
14. Reconciliation of Net Loss before Tax to Cash Flow from Operating activities
28 February 28 February
2019 2018
GBP'000 GBP'000
Loss for the year (1,027) (273)
(Gains)/losses on investments 700 (73)
(Increase)/decrease in debtors (16) (30)
(Decrease)/increase in creditors (10) (137)
Change in IFA commission accrual - 21
D share issue costs included in finance
activities - 157
Neptune-Calculus costs included in finance
activities - (8)
IFA commission costs included in finance
activities - 3
Cash flow from operating activities (353) (340)
15. Financial Commitments
At 28 February 2019, the Company did not have any financial
commitments which had not been accrued for.
16. Financial Instruments
The Company's financial instruments comprise securities and cash
and liquid resources that arise directly from the Company's
operations.
The principal risks the Company faces in its portfolio
management activities are:
-- Market price risk
-- Liquidity risk
The Company does not have exposure to foreign currency risk.
a) Market price risk
Qualifying Investments
Market risk embodies the potential for losses and includes
interest rate risk and price risk.
The management of market price risk is part of the investment
management process. The portfolio is managed in accordance with
policies in place as described in more detail in the Chairman's
Statement and Investment Manager's Review (Qualifying
Investments).
The Company's strategy on the management of investment risk is
driven by the Company's investment objective as outlined above.
Investments in unquoted companies and AIM-traded companies, by
their nature, involve a higher degree of risk than investments in
the main market. Some of that risk can be mitigated by diversifying
the portfolio across business sectors and asset classes.
Interest is earned on cash balances and money market funds and
is linked to the banks' variable deposit rates. The Board does not
consider interest rate risk to be material. Interest rates arising
on loan stock instruments is not considered significant as the main
risk on these investments are credit risk and market price risk.
The interest rate earned on the loan stock instruments is disclosed
below:
Effective interest
rate on 28 February
2019 %
Solab Group Limited 12.0
Terrain Energy Limited 12.5
Mologic Limited 7.0
Duvas Technologies Limited 8.0
Wheelright Limited 10.0
At the year end, GBP33,975 loan stock interest was overdue.
An analysis of financial assets and liabilities, which
identifies the risk of the Company's holding of such items, is
provided. The Company's financial assets comprise equity, loan
stock, cash and debtors. The interest rate profile of the Company's
financial assets is given in the table below:
As at 28 February 2019 As at 28 February 2018
Fair Value Cash Flow Fair Value Cash Flow
Interest Rate Interest Rate Interest Rate Interest
Rate
Risk GBP'000 Risk GBP'000 Risk GBP'000 Risk GBP'000
Loan stock 775 - 545 -
Money market funds - 5,652 - 2,645
Cash - 1,176 - 2,267
775 6,828 545 4,912
The variable rate is based on the banks' deposit rate and
applies to cash balances held and the money market funds. The
benchmark rate which determines the interest payments received on
interest bearing cash balances is the Bank of England base rate,
which was 0.75 per cent as at 28 February 2019.
Credit risk is considered to be part of market risk.
Where an investment is made in loan stock issued by an unquoted
company, it is made as part of an overall equity and debt package.
The recoverability of the debt is assessed as part of the overall
investment process and is then monitored on an ongoing basis by the
Investment Manager who reports to the Board on any recoverability
issues.
Credit risk arising on transactions with brokers relates to
transactions awaiting settlement. Risk relating to unsettled
transactions is considered to be small due to the short settlement
period involved and the high credit quality of the brokers used.
The Board monitors the quality of service provided by the brokers
used to further mitigate this risk.
All the assets of the Company which are traded on AIM are held
by Investec Wealth & Investment, the Company's custodian.
Bankruptcy or insolvency of the custodian may cause the Company's
rights with respect to securities held by the custodian to be
delayed or limited. The Board and the Investment Manager monitor
the Company's risk by reviewing the custodian's internal control
reports.
b) Liquidity risk
The Company's liquidity risk is managed on an ongoing basis by
the Investment Manager. The Company's overall liquidity risks are
monitored on a quarterly basis by the Board.
The Company maintains sufficient investments in cash and readily
realisable securities to pay accounts payable and accrued expenses
as they fall due.
Qualifying Investments
The Company's financial instruments include investments in
unlisted equity investments which are not traded in an organised
public market and which may be illiquid. As a result, the Company
may not be able to realise quickly some of its investments at an
amount close to their fair value in order to meet its liquidity
requirements, or to respond to specific events such as
deterioration in the creditworthiness of any particular issuer.
The Board seeks to ensure that an appropriate proportion of the
Company's investment portfolio is invested in cash and readily
realisable assets, which are sufficient to meet any funding
commitments that may arise.
Under its Articles of Association, the Company has the ability
to borrow a maximum amount equal to 25 per cent of its gross
assets. As at 28 February 2019, the Company had no borrowings.
c) Capital management
The capital structure of the Company consists of cash held and
shareholders' equity. Capital is managed to ensure the Company has
adequate resources to continue as a going concern, and to maximise
the income and capital return to its shareholders, while
maintaining a capital base to allow the Company to operate
effectively in the market place and sustain future development of
the business. To this end the Company may use gearing to achieve
its objectives. The Company's assets and borrowing levels are
reviewed regularly by the Board.
d) Fair value hierarchy
Investments held at fair value through profit or loss are valued
in accordance with IPEV guidelines.
The valuation method used will be the most appropriate valuation
methodology for an investment within its market, with regard to the
financial health of the investment and the IPEV guidelines.
As required by the Standard, an analysis of financial assets and
liabilities, which identifies the risk of the Company's holding of
such items, is provided. The Standard requires an analysis of
investments carried at fair value based on the reliability and
significance of the information used to measure their fair value.
In order to provide further information on the valuation techniques
used to measure assets carried at fair value, we have categorised
the measurement basis into a "fair value hierarchy" as follows:
-- Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active
markets for identical assets. Quoted in an active market in this
context means 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 price is usually
the current bid price. The Company's investments in AIM quoted
equities and money market funds are classified within this
category.
-- Valued using models with significant observable market parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted
prices included within Level 1 that are observable for the asset,
either directly or indirectly.
-- Valued using models with significant unobservable market parameters - "Level 3"
Inputs to Level 3 fair values are unobservable inputs for the
asset. Unobservable inputs may have been used to measure fair value
to the extent that observable inputs are not available, thereby
allowing for situations in which there is little, if any, market
activity for the asset at the measurement date (or market
information for the inputs to any valuation models). As such,
unobservable inputs reflect the assumptions the Company considers
that market participants would use in pricing the asset. The
Company's unquoted equities and loan stock are classified within
this category. As explained in note 1, unquoted investments are
valued in accordance with the IPEV guidelines.
The table below shows assets measured at fair value categorised
into the three levels referred to above. During the year there were
no transfers between Levels 1, 2 or 3.
Financial Assets at Fair Value through
Profit or Loss
At 28 February 2019
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Unquoted equity - - 4,758 4,758
Quoted equity 408 - - 408
Money market funds 5,652 - - 5,652
Loan stock - - 775 775
6,060 - 5,533 11,593
Financial Assets at Fair Value through Profit or Loss At 28
February 2018
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Unquoted equity - - 4,182 4,182
Quoted equity 610 - - 610
Money market funds 2,645 - - 2,645
Loan stock - - 545 545
3,255 - 4,727 7,982
Where the effect of changing one or more inputs to reasonably
possible alternative assumptions would result in a significant
change to the fair value measurement, information on this
sensitivity is provided below. The information used in
determination of the fair value of Level 3 investments is chosen
with reference to the specific underlying circumstances and
position of the investee company. The portfolio has been reviewed
and both downside and upside reasonable possible alternative
assumptions have been identified and applied to the valuation of
the unquoted investments.
The assumptions changed for the sensitivity analysis are set out
below:
Assumption Impact on Upside GBP Impact on downside
GBP
Discount rate 332,379 (496,996)
Forecast 2019 results 203,407 (203,407)
535,787 (700,403)
Applying the downside alternatives, the Ordinary share portfolio
would be GBP700,403 or 11.8 per cent lower (2018: GBP321,817 or 3.2
per cent lower). Using the upside alternatives, the Ordinary Share
portfolio would be GBP535,787 or 9.0 per cent higher (2018:
GBP486,987 or 4.8 per cent higher).
17. Related Parties' Transactions
On 28 February 2019, both Kate Cornish Bowden and John
Glencross, directors of the Company, subscribed for 12,961 Ordinary
shares each. John Glencross, a director of the company, is a
director of Calculus Capital Limited and owns 50 per cent of the
shares of its holding Company. Calculus Capital Limited receives an
investment manager's fee from the Company. As disclosed in Note 4,
for the year ended 28 February 2019, Calculus Capital Limited
earned GBP197,314 in relation to the Ordinary share portfolio
(2018: GBP154,089). Calculus Capital Limited also earned a company
secretarial fee of GBP18,000 (2018: GBP18,000).
Calculus Capital Limited took on the expenses cap on 15 December
2015. In the year to 28 February 2019, Calculus Capital Limited did
not make a contribution towards the expenses of the Company (2018:
contributed GBP26,435).
All related party transactions were carried out on an arm's
length basis.
18. Transactions with the Investment Manager
John Glencross, a Director of the Company, is Chief Executive
and a director of Calculus Capital Limited, the Company's
Investment Manager. He does not receive any remuneration from the
Company. He is a director of Terrain Energy Limited.
Calculus Capital Limited receives a fee from certain portfolio
companies. In the year to 28 February 2019, Calculus Capital
Limited charged a monitoring fee to Air Leisure Group Limited,
AnTech Limited, Arcis Biotechnology Holdings Limited, Arecor
Limited, Cloudtrade Technologies Limited, Cornerstone Brands
Limited, Duvas Technologies Limited, Every1Mobile Limited,
MicroEnergy Generation Services Limited, Mologic Limited, Open
Energy Market Limited, Origin Broadband Limited, Oxford
Biotherapeutics Limited, Park Street Shipping Limited, Quai
Administration Services Limited, Solab Group Limited, Synpromics
Limited, Terrain Energy Limited, The One Place Capital Limited,
Tollan Energy Limited, Weeding Technologies Limited and Wheelright
Limited.
Calculus Capital Limited charged a fee for the provision of a
director to Air Leisure Group Limited, Cloudtrade Technologies
Limited, Cornerstone Brands Limited, Every1Mobile Limited, Open
Energy Market Limited, Origin Broadband Limited, Pico's Limited,
Terrain Energy Limited, The One Place Capital Limited, Weeding
Technologies Limited and Wheelright Limited.
In the year to 28 February 2019, Calculus Capital Limited
charged an arrangement fee to Arecor Limited, Cloudtrade
Technologies Limited, Duvas Technologies Limited, Essentia
Analytics Limited, MIP Diagnostics Limited, Mologic Limited, Origin
Broadband Limited, Oxford Biotherapeutics Limited, Pico's Limited,
Quai Administration Services Limited, Weeding Technologies Limited
and Blu Wireless Limited.
Calculus Capital Limited also charged Terrain Energy Limited for
the provision of office support services.
The aggregate amounts received by Calculus Capital Limited for
any monitoring, provision of a director, arrangement and office
support services to the companies above in relation to the
Company's investment was as follows:
Air Leisure Group Limited: GBP2,377 (2018: GBP1,578); AnTech
Limited: GBP255 (2018: GBP972); Arecor Limited: GBP2,712 ; Arcis
Biotechnology Holdings: GBP187 (2018:GBP87); Blu Wireless
Technology Limited: GBPnil (2018: GBP5,172); Cloudtrade
Technologies Limited: GBP7,717 ; Cornerstone Brands Limited:
GBP3,120 (2018: GBP5,780); Duvas Technology Limited: GBP7,212 ;
Essentia Analytics Limited: GBP4,875 ; Every1Mobile Limited:
GBP2,727 (2018:GBP6,459); MicroEnergy Generation Services Limited:
GBP1,964 (2018: GBP1,734); MIP Diagnostics Limited: GBP6000 (100%
of this fee relates to the VCT) ; Mologic: GBP4,394 Open Energy
Market Limited: GBP2,489 (2018:GBP5,999); Origin Broadband Limited:
GBP678 (2018: GBP2,544); Oxford Biotherapeutics Limited: GBP8,402;
Park Street Shipping Limited: GBP974 (2018: GBP836); Pico's
Limited: GBP5,283 (2018: GBP318); Quai Administration Services
Limited: GBP1,013 (2018: GBP3,122); Solab Group Limited: GBP4,050
(2018: GBP2,906); Synpromics Limited: GBP290 (2018:GBP131); Terrain
Energy Limited: GBP3,708 (2018: GBP1,094); The One Place Capital
Limited: GBP696 (2018: GBP786); Tollan Energy Limited: GBP1,669
(2018: GBP1,659); Weeding Technologies Limited GBP1,812 (2018:
GBP1,960) and WheelRight Limited GBP658 (all excluding VAT).
19. Post balance sheet events
Since the year end, the Company has made three further
qualifying investments: a further GBP100,000 has been invested in
Wheelright Limited loan notes; a further GBP300,000 has been
invested in Blu Wireless and GBP300,000 has been invested in Wazoku
Limited. Since the year end the Company has also made a further
allotment of Ordinary shares. On 5th April 2019, a further
2,076,361 Ordinary shares were allotted at an average price of
78.54p per share.
GLOSSARY OF TERMS
Accumulated Shareholder Value
The sum of the current NAV and cumulative dividends paid to
date.
C share fund
The net assets of the Company attributable to the former C
shares (including any income and/or revenue arising from or
relating to such assets) prior to the merger of the share
classes.
D share fund
The net assets of the Company attributable to the D shares
(including any income and/or revenue arising from or relating to
such assets) prior to the merger of the share classes.
IPEV Guidelines
The International Private Equity and Venture Capital Valuation
Guidelines published in December 2018, used for the valuation of
unquoted investments.
Net Asset Value or NAV per share
Shareholders' funds expressed as an amount per share.
Shareholders' funds are the total value of a company's assets, at
current market value, having deducted all prior charges at their
par value (or at their market value).
Old ordinary share fund
The net assets of the Company attributable to the old Ordinary
shares (including any income and/or revenue arising from or
relating to such assets) prior to the merger of the share
classes.
Ordinary share Fund
The net assets of the Company attributable to the new Ordinary
shares (including any income and/or revenue arising from or
relating to such assets).
VCT Value
The value of an investment calculated in accordance with section
278 of the Income Tax Act 2007 (as amended).
Qualifying Investments
An unquoted (or AIM-traded) company which satisfies the
requirements of Part 4, Chapter 6 of the Income Tax Act 2007 (as
amended).
END
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on this announcement (or
any other website) is incorporated into, or forms part of, this
announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EAKSNEDSNEFF
(END) Dow Jones Newswires
May 09, 2019 12:50 ET (16:50 GMT)
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