TIDMCLC
RNS Number : 1214O
Calculus VCT PLC
27 May 2020
Calculus VCT plc
Legal Entity Identifier: 2138005SMDWLMMNPVA90
Annual Financial Report for the year ended 29 February 2020
The Annual Report and Financial Statements ("Annual Report and
Accounts") for the year ended 29 February 2020 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 29 February 2020
Net Asset Value Per Share 70.20p
Final Dividend Proposed 3.20p
Annual Yield* 4.56%
Total return per share* (2.58)p
Share price 50.00p
Share price discount* 28.77%
*These are Alternative Performance Measures (APM's) which have
been defined in the glossary on page 78 of the Annual Report.
Portfolio Review
Year to 29 February 2020
GBP'000
Opening Portfolio Value 11,593
New and follow on investments
made 3,511
Disposal Proceeds (588)
Realised Net gains or losses 122
Unrealised Valuation movements (329)
Closing Portfolio value 14,309
Investment Portfolio Yield Year to 29 February 2020
GBP'000
Loan interest 121
Total portfolio income in
the year 155
Portfolio value at year
end 14,309
Portfolio Income Yield 1.08%
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 VCT qualifying 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 for
the benefit of the members as a whole and, in doing so, have a
regard for the wider stakeholder interests.
CHAIRMAN'S STATEMENT
Results for the year
The net asset value per Ordinary share at 29 February 2020 was
70.2 pence, compared to 75.8 pence as at 28 February 2019, this is
after paying a dividend of 3.4 pence per share.
As announced in the interim report, during the year the
Company's holding in Synpromics Limited was sold, achieving an
undisclosed, but significant return for investors. Synpromics, a
market leader in control technologies for gene therapy has been
acquired by AskBio, a leading US pioneer in gene therapeutics.
Synpromics helps clinicians to target genetic cures for conditions
such as haemophilia, liver disease and heart disease. The deal is
further enhanced by the potential to benefit from future licensing
fees on Synpromics existing portfolio of licences.
The most significant movement in the qualifying portfolio on the
upside was WheelRight which, increased its valuation by 65 per cent
compared to 28 February 2019, as it focused on the rapid
commercialisation of its drive over tyre pressure and tread depth
measuring equipment with encouraging results. The company also
successfully closed an investment round with US based company
Snider, who invested USD 2 million. Blu Wireless Technology, Money
Dashboard (formerly The One Place Capital), Wazoku and Weeding
Technologies, four of the larger holdings in the portfolio each saw
their valuation increase over the year to 29 February 2020. Further
details can be found on pages 15 to 23 of the Annual Report.
Antech, Arecor, Essentia Analytics, Cloudtrade and Mologic also
increased during the year. Altogether these valuation improvements
added a further 1 pence to the Company's NAV per share. The top 10
unquoted investments by value are discussed further from page 14 to
24.
During the year, two of the Company's holdings; Terrain Energy
and MicroEnergy, were combined into one new company, Evoterra
Limited. The valuation of Evoterra has fallen by GBP290,000, as a
result of operating challenges and global issues affecting the oil
and gas market. Evoterra has divested several of its non-core
assets to assist with cash flow management, but this has also had
an impact on the value attributable to the remaining oil and gas
reserves. The new fully integrated energy company will focus on
delivering value from the remaining operating assets of both
MicroEnergy and Terrain Energy.
Unfortunately, Benito's Hat (Pico's Limited), the Mexican food
chain, was written down to nil in the year due to the problems on
the high street and in particular, the fast-casual dining market.
The company has been experiencing trading difficulties and
appointed administrators in February 2020 with no return for equity
holders being anticipated. As mentioned in the interim accounts,
Solab, the Hampshire cosmetics business also had its equity written
down to nil when it appointed administrators in June 2019. Of the
GBP295,000 of outstanding loans held by the Company when Solab
appointed administrators, 100% of it has been recovered. The
Company has further recovered all outstanding interest owed on the
loans.
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 in
the year to 29 February 2020, with all new investments set out in
the Investment Manager's report. As mentioned above, the Company
recovered GBP200,000 of loan notes from Solab during the year to 29
February 2020 (with the balance recovered post year end). In
December 2019, WheelRight also redeemed GBP100,000 of its
loans.
Issue of new Ordinary shares
The offer for subscription for Ordinary Shares that opened on 13
September 2018 and closed on 31 August 2019 received aggregate
subscriptions from the issue of Ordinary shares of GBP5.9
million.
On 24 September 2019, a new offer was launched. The Company has
issued shares for GBP2 million of subscriptions under this offer by
the end of the financial year. Of the GBP4,917,000 total new share
issues in the year to 29 February 2020, GBP2,917,000 took place
under the offer that closed on 31 August 2019.
On 3 April 2020 the Company issued a further 2,342,066 shares at
an average issue price of 65.9 pence per share. The net asset value
used for the allotment had been adjusted due to the anticipated
impact of COVID-19 on the portfolio companies. This is further
explained below.
Share buy backs
In July 2019, 78,279 shares were bought back for cancellation.
In keeping with its policy for returning funds to shareholders, the
Company will continue to consider opportunities for buybacks in the
coming year.
Dividend
The Directors are pleased to announce a final dividend of 3.2
pence per Ordinary share to be paid to all Ordinary
shareholders.
Subject to shareholder approval, the Ordinary share dividend
will be paid on 31 July 2020 to shareholders on the register on 3
July 2020. The deadline for the Scheme Administrator to receive any
applications under the dividend reinvestment scheme is 17 July
2020.
Board Succession
Kate Cornish-Bowden had planned to step down from the board at
the next annual general meeting as she has served the Company for
nine years. The Board had begun a successor recruitment process
with an independent search consultant, but the COVID-19 outbreak
and the difficulties this poses in carrying out interviews may lead
to some delays. Kate has agreed to stay on the board until the
situation stabilises and a replacement can be found. The Company is
very grateful to Kate for her excellent contribution and diligence
during this time.
Impact of COVID-19 and NAV movement
We have assessed that the true impact of COVID-19 was felt by
our portfolio companies after the government initiated a nationwide
lockdown on 23 March 2020 in order to contain the spread of
infection. We have therefore treated the consequences of COVID-19
on our investee company valuations as a post balance sheet event in
these accounts. On the 19 December, the Company released a NAV
which was prior to any knowledge of COVID-19. The NAV was 71.8
pence per share as at 30 November 2019. The NAV at the 29 February
2020 year end was 70.2 pence per share. To the extent that unquoted
investments are valued with reference to revenue or earnings
multiples derived from listed companies with similar
characteristics, the unquoted valuations would have been impacted
by the partial fall in equity markets which occurred prior to 29
February 2020. However, the overall portfolio performance had
improved since 30 November 2019. On the 31 March 2020, the Company
released an unaudited NAV of 65.1 pence per share, which had been
adjusted to reflect the potential impact of COVID-19. The unquoted
portfolio was reviewed and factors which were deemed to affect
valuations included: the impact of the lockdown on sales, investee
companies' ability to fulfil orders and/or effect installations,
supply chain disruption, the falling oil price and the likely
detrimental impact of the general economic downturn on the
availability of capital and, consequently, the valuations likely to
be achieved in funding rounds. This NAV of 65.1 pence per share was
released to the market, ahead of an allotment that took place on 3
April 2020. The most recent unaudited NAV available at the time of
publishing these accounts is 66.5 per share as at 30 April
2020.
Developments since the year end
Given the impact of the COVID-19 epidemic on the global economy,
the Manager has completed a review of the portfolio and estimated
the impact of its holdings in its respective investee companies.
The impact of these estimations would be to reduce the valuation of
the investment portfolio by GBP552,402, which would result in an
estimated fall in NAV (unaudited) by 3.7 pence to 66.5 pence per
ordinary share . The movement reflects the Company's current best
estimate of the operating impact, both positive and negative, on
our portfolio companies. The reduction in NAV was limited to a 5%
decrease, because the Company is shielded to a degree by holding a
significant portion of its assets in cash. Furthermore, although
some portfolio companies have been adversely affected by the impact
of COVID-19 such as investments in the leisure and energy sectors,
the Company has invested in several life sciences companies which
are benefiting from creating products to aid the fight against
COVID-19. It is a volatile situation, subject to rapid change;
valuations of portfolio companies will be kept under regular
review.
As mentioned above, since the year end the Company has made a
further allotment of Ordinary shares. On 3 April 2020, a further
2,342,066 Ordinary shares were allotted at an average price of 65.9
pence per share.
On 3 April 2020 the Company invested GBP380,000 in Maze Theory
Limited. Maze Theory develops games across multiple platforms
including virtual reality (VR), PC console and mobile. Its first VR
game, Dr Who, The Edge of Time was launched in November 2019.
On 4 May 2020, the Company invested GBP530,000 in Rotageek
Limited. Rotageek uses cloud-based technology and automatic
scheduling to help businesses manage and schedule staff to meet
demand, drive efficiency and reduce costs. The company is providing
free trials of its proprietary solutions to the NHS to assist in
supporting medical teams which are facing exceptionally complex
scheduling problems during the COVID-19 crisis.
In light of the COVID-19 pandemic and the regulations on social
distancing, the Board is considering contingency plans for the 2020
AGM taking into account the evolving nature of the regulations and
announcements from the Financial Reporting Council and the
Financial Conduct Authority. Please refer to the Notice of Meeting
from page 73 of this document.
Outlook
The election result in December 2019 provided some economic
certainty and reduced some of the fears surrounding the UK's
departure from the EU, Since the year end however, significant new
uncertainties are being posed by the COVID-19 pandemic. The
economic impact of this crisis has ramifications through large
parts of the UK economy. The Company is fortunate in having a
relatively low level of exposure to the leisure industry and other
consumer related sectors. We were also fortunate to have a
significant percentage of our assets held in cash when the crisis
started. Calculus Capital is working closely with its portfolio
companies to help them manage their cash through these uncertain
times. Whilst the inevitable economic fallout will have an adverse
effect on the valuation of some of the portfolio companies , others
such as the investments in the life sciences sector in particular
are seeing some appreciation. Portfolio companies in the technology
sector are, by and large, also in a stronger position to weather
the economic downturn than those companies more reliant on consumer
expenditure.
Calculus Capital is a long term investor, actively identifying
attractive investment opportunities. As such, the Manager will
continue to deploy capital to proactively support companies through
these challenging times and to invest in selective new
opportunities which may arise.
Jan Ward, Chairman
27 May 2020
INVESTMENT MANAGER'S REVIEW
(Qualifying Investments)
The net assets of GBP17,453,046 broken down as follows:
Asset class NAV (GBP000s) % of NAV Number of investee
companies/funds
Unquoted company investments 8,118 47 26
---------------- ----------- ---------------------
AIM traded company investments 526 3 5
---------------- ----------- ---------------------
Liquidity Fund investments 5,665 32 3
---------------- ----------- ---------------------
Other Liquid assets (debtors
and creditors) 3,144 18 -
---------------- ----------- ---------------------
Totals 17,453 100
---------------- ----------- ---------------------
During the year, the Company made twelve qualifying investments,
as we seek to build a diversified portfolio. These included five
new investments and seven follow on investments in existing
portfolio companies.
New Investments
Fiscaltec Group Limited
In November 2019, the Company invested GBP500,000 in Fiscaltec.
Fiscaltec's patented risk management software uses advanced
artificial intelligence to forensically analyse an organisation's
financial data. This enables the software to detect fraud and
mitigate payment and supplier risk thereby protecting an
organisation's working capital requirements. More information on
Fiscaltec can be found on page 17.
Raindog Films Limited
In February 2020, the Company invested GBP400,000 in Raindog.
Raindog is a creator of filmed entertainment and was co-founded in
2012 by Oscar-winning actor Colin Firth and former Chairman and CEO
of Sony Music UK and Chairman of the Brit Awards, Ged Doherty. More
information on Raindog can be found on page 20.
IPV Limited
In May 2019 the Company invested GBP340,000 in IPV limited
comprising GBP300,000 of loans and GBP40,000 equity. IPV's
proprietary software enables companies to access, store, modify,
tag and transfer video content quickly and efficiently,
significantly improving internal processes and creating more routes
to market. More information on IPV can be found on page 22.
Wazoku Limited
In March 2019 the Company invested GBP300,000 in Wazoku. 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 collaborative idea management
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. More information on Wazoku can
be found on page 18.
Wonderhood Limited
In December 2019 the Company invested GBP275,000 in Wonderhood.
Wonderhood is introducing a new hybrid model as a TV programme
maker and advertising agency, supported by a third-party capability
which provides data-led insights into audience behaviour. More
information on Wonderhood can be found on page 24.
Follow on Investments
C4X Discovery plc
In November 2019, the Company invested GBP400,000 in C4X
Discovery (C4XD). 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.
Blu Wireless Technology Limited
In April 2019 the Company invested GBP300,000 in Blu Wireless
Technology. Blu Wireless Technology develops semiconductor IP to
allow wireless communication at speeds similar to fibre with
immediate applications for fixed wireless broadband (where fibre,
roll out may be prohibitively expensive), rail and road transport
and, in due course, application for 5G roll-out. More information
on Blu Wireless can be found on page 15.
WheelRight Limited
During the year the Company invested GBP300,000 in WheelRight.
WheelRight uses patented flush mounted sensor plates which measure
and record the tyre pressures and wear on all of the tyres on a
car, bus or truck as the vehicle drives over the plate. Their
technology provides both effective maintenance and monitoring,
enabling cost savings and safety benefits to vehicle and fleet
owners. More information on WheelRight can be found on page 16.
Every1Mobile Limited
In May 2019 the Company invested GBP200,000 in Every1Mobile.
Every1Mobile, provides digital communication solutions and online
community management through a bespoke platform. The customer focus
is to large corporates, government and international development
agencies in the emerging African market. More information on
Every1Mobile can be found on page 19.
Quai Administration Services Limited
In July 2019 the Company invested GBP150,000 in Quai. Quai
provides platform technology combined with back office
administration services for the high-volume personal savings
industry. Quai's platform allows it to administer many thousands of
individual savings plans at a fraction of the cost incurred by
established insurance companies and wealth managers. More
information on Quai can be found on page 21.
Oxford Biotherapeutics Limited
In February 2020, the Company invested GBP150,000 in Oxford
BioTherapeutics (OBT). OBT is 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.
Evoterra Limited
An investment was made in Terrain Energy, an oil and gas
exploration company, in the form of a GBP100,000 loan note as at
the 30 October 2019. However, as of 3 February 2020, Evoterra
purchased the entire share capital of Terrain Energy, hence
becoming the borrower.
Evoterra also purchased all the share capital of MicroEnergy,
which owns and operates a fleet of small onshore wind turbines.
More information on Evoterra can be found on page 14.
Investment Diversification at 29 February 2020
Sectors by investment cost
Consumer 9%
Energy 13%
Healthcare 24%
Industrials 13%
Creative Content 7%
Technology 34%
Total assets by value
Unquoted company equity 37%
Unquoted company loan stock 10%
AIM traded equity 3%
Liquidity fund investments 32%
Other liquid assets 18%
Holding period of qualifying investments by value
Less than 1 year 32%
Between 1 and 5 years 56%
Greater than 5 years 12%
Calculus Capital Limited
27 May 2020
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
Evoterra Limited 1,220 764 5.3
Blu Wireless Technology Limited 450 745 5.2
WheelRight Limited 500 565 4.0
Fiscaltec Group Limited 500 500 3.5
Wazoku Limited 300 462 3.2
Every1Mobile Limited 400 400 2.8
Raindog Films Limited 396 396 2.8
Quai Administration Services
Limited 370 370 2.6
IPV Limited 340 345 2.4
Money Dashboard Limited 277 332 2.3
Other unquoted equity investments 2,952 3,239 22.6
AIM Investments (quoted equity)
AIM investments 1,178 526 3.7
Quoted Funds
Fidelity Sterling Liquidity
Fund 1,883 1,903 13.3
Aberdeen Sterling Liquidity
Fund 1,882 1,882 13.2
Goldman Sachs Liquidity Funds 1,880 1,880 13.1
Total Investments 14,528 14,309 100.0
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
29 February 2020, the qualifying percentage for the relevant funds
was 87.3 per cent.
Evoterra Limited
On the 3 February 2020, Evoterra purchased the entire share
capital of Terrain Energy and MicroEnergy Generation Services. The
creation of Evoterra brings traditional and renewable energy under
one umbrella. During the cashless transaction, the original
shareholders of Terrain Energy and MicroEnergy were hived up to
Evoterra Limited. These shareholders now hold shares in Evoterra
rather than directly in Terrain Energy and MicroEnergy but Terrain
Energy and MicroEnergy still exist as wholly owned subsidiaries of
Evoterra and carry out the same trade as previously.
MicroEnergy owns and operates a fleet of small onshore wind
turbines in East Anglia. Full year generation to 31 March 2019 was
GBP206,000 (no change from 2018 revenues). This reflects reasonable
performance based on some operational improvements as the wind
resource was on average 5 per cent below the 10 year mean.
Terrain Energy is an oil and gas exploration and production
company with interests in eight onshore licences in the UK and
Germany. Terrain Energy's main producing asset, Whisby-6, remains
shut-in awaiting a workover. This lack of regular income has
resulted in Terrain Energy divesting several of its non-core assets
to maximise near term cash in order to support the development of
its German gas assets in the medium term.
As a newly formed company, no financial information other than
below is yet available for Evoterra.
Investment Information Evoterra Terrain MicroEnergy
2020 2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total cost 1,220 1072 972 148 148
----------------------------------- --------- -------- -------- -------- --------
Income recognised in year/period 1 14 12 - -
----------------------------------- --------- -------- -------- -------- --------
Equity valuation 564 519 781 77 72
----------------------------------- --------- -------- -------- -------- --------
Loan stock valuation 200 200 100 - -
----------------------------------- --------- -------- -------- -------- --------
Total valuation 764 719 881 77 72
----------------------------------- --------- -------- -------- -------- --------
Voting rights / % of equity
share capital held 7.1 7.4 7.4 6.1 6.1
Valuation basis : Cost calibrated
with discounted cash flow
Total equity held by funds managed by Calculus Capital Limited:
91.1 per cent
Blu Wireless Technology Limited
Blu Wireless provides the technology to allow data to be
transmitted wirelessly at very high, fibre-like, speeds. Blu
Wireless is addressing the challenge of building cost effective 5G
networks, rolling out fibre-like broadband to businesses and homes,
reliable connectivity on high-speed transport and low latency video
streaming in the home. The company's key partnership with
FirstGroup, expected to significantly boost the quality of,
connectivity on trains, has advanced considerably during the year.
Early roll-out is expected on both the South West and West Coast
franchises' during 2020/21 and there is interest in the technology
from other UK and overseas rail companies. In addition, Blu
Wireless has made advances in the fixed wireless access ("FWA")
market, as well as in other applications in the transport and
military sectors. In February 2020, Blu Wireless appointed Alan
Jones, former CEO of Virtuosys, as CEO to lead the company during
the coming commercial growth phase. Alan has a strong technical
background, having held engineering roles at both Hewlett Packard
Labs and Motorola and has a track record of successful exits.
Latest Results Unaudited Audited Investment Information 2020 2019
2019 2018 GBP'000 GBP'000
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- ---------- --------- ----------------------- --------- ---------
Turnover 2,239 1,307 Total cost 450 150
---------------- ---------- --------- ----------------------- --------- ---------
Income recognised in
Pre-tax loss 10,194 10,010 year/period - -
---------------- ---------- --------- ----------------------- --------- ---------
Net assets 2,883 820 Equity valuation 745 145
---------------- ---------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation -
----------------------- --------- ---------
Price of recent investment
calibrated with Total valuation 745 145
----------------------- --------- ---------
Comparable companies and Voting rights / % of
discounted cash equity share capital
flow held 1.4% 0.4%
Total equity held by funds managed by Calculus Capital Limited:
13.0 per cent.
WheelRight Limited ('WheelRight')
WheelRight designs and manufactures unique drive-over tyre
pressure and tread depth measuring equipment. WheelRight has
developed a drive-over sensor plate to measure the pressure of all
of a vehicle's tyres (as well as axle weight), together with a
strobe-based camera array to measure each tyre's tread depth and
identify external defects. The technology has been fully validated,
by having sufficient installations at sites very varied in nature.
Given this, WheelRight is focused on rapid commercialisation, with
very encouraging initial results - installations and firm orders in
the first half of the financial year to April 2020 exceed the total
number of previous installations, including customers in Hong Kong,
Singapore, South Africa and the US, and for the first time, orders
for multiple units from the same customer.
Calculus VCT invested GBP0.3 million into WheelRight in December
2019 via a loan note, supplementing a previous follow on
investment, to provide working capital for the new orders. The VCT
investments follow equity investments from Calculus Capital EIS
funds. Alongside the Calculus investment, in mid-December 2019,
Snider concluded a three-tranche investment agreement totalling
USD$2 million, with the first tranche of USD$1 million paid on
completion and the second tranche of USD$750,000 and third tranche
of USD$250,000 payable 6 months and 12 months after the date of the
first tranche, respectively.
A distribution agreement was signed in tandem with the
investment agreement, giving Snider exclusivity to WheelRight's
products in the US market and committing it to making orders of 10
units in year 1, 20 units in year 2 and 30 units in year 3. This
alone serves to be transformational for the company with the added
upside that it is free to pursue sales opportunities in all non-US
geographies completely unfettered, with a target of non-Snider
sales units constituting 50% of total sales.
Latest Audited 2019 2018 Investment Information 2020 2019
Results (group) GBP'000 GBP'000 GBP'000 GBP'000
Year ended 28 Apr 28 Apr
------------------ --------- --------- ----------------------- --------- ---------
Turnover 509 125 Total cost 500 200
------------------ --------- --------- ----------------------- --------- ---------
Income recognised in
Pre-tax loss 1,201 1,580 year/period 26 1
------------------ --------- --------- ----------------------- --------- ---------
Net assets 39 827 Equity valuation 165 100
------------------ --------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation 400 100
----------------------- --------- ---------
Price of recent investment Total valuation 565 200
----------------------- --------- ---------
Voting rights / % of
calibrated with discounted equity share capital
cash flow held 0.8% 1.00%
Total equity held by funds managed by Calculus Capital Limited:
48.4 per cent.
Fiscaltec Group Limited ('Fiscaltec')
Fiscaltec's proprietary solution analyses an organisation's
financial transactions and supplier contacts, providing an
independent overview of the effectiveness of the processes and
controls encompassing spend. Its NXG Forensics(R) enterprise
solution provides continuous protection through transactional risk
analysis, supplier risk profiling, anti-fraud controls and ongoing
reporting. The ongoing reporting element delivers detailed insight
and flags unusual or high-risk payments before each payments run is
released. These unusual outgoings include duplicates, fraudulent
and erroneous payments. Fiscaltec targets companies and
organisations who typically have more than GBP100 million in annual
revenues, current customers including BAE Systems, Kent County
Council, KFC and Mitchells & Butler. In November 2019, the
Company invested GBP500,000, as part of a total fundraising of
GBP3.6 million, which will be used to develop Fiscaltec's core UK
market and increase expansion into the US, where it already has
strong traction, as well as incremental product development. The
investment round was led by Octopus VCT, which invested GBP3
million.
Latest Results 2019 2018 Investment Information 2020
(group) GBP'000 GBP'000 GBP'000
Unaudited Unaudited
Year ended 30 Nov 30 Nov
---------------- ----------- ----------- --------------------------------- ---------
Turnover 4,848 4,167 Total cost 500
---------------- ----------- ----------- --------------------------------- ---------
Pre-tax loss 299 197 Income recognised in year/period -
---------------- ----------- ----------- --------------------------------- ---------
Net assets (550) (3,763) Equity valuation 500
---------------- ----------- ----------- --------------------------------- ---------
Valuation basis: Loan stock valuation -
--------------------------------- ---------
Cost calibrated using multiples
and discounted cash flow Total valuation 500
--------------------------------- ---------
Voting rights / % of equity
share capital held 2.6%
Total equity held by funds managed by Calculus Capital Limited:
0 per cent.
Wazoku Limited
Wazoku's software allows very large companies and organisations
to capture and develop the ideas and innovations latent within the
workforce.
Calculus VCT invested GBP300,000 in Wazoku Ltd in April 2019 as
part of GBP2.5 million investment round. Wazoku has developed a
market leading platform and suite of support services to enable
firms to innovate at scale. The core product, Idea Spotlight, is a
Global Home for Ideas. It is a customisable off-the -- shelf
solution offering collaborative idea management modules to meet the
diverse set of innovation requirements that global businesses have.
Successful innovation requires not only capturing ideas, but also
collating, analysing and implementing them. The platform provides
the process and structure to capture, evolve, evaluate, develop,
measure, select and implement the best ideas from internal or
external stakeholders. Wazoku has an impressive client list
including Waitrose, HSBC and MoD. In February 2020, Wazoku
announced a partnership with Innocentive, which has built a network
of 400,000 subject matter experts to whom it reaches out to solve
complex problems on behalf of corporate and governmental clients.
Wazoku and Innocentive plan to create a new and improved product
combining Wazoku's existing innovation platform with Innocentive's
complementary network and methodology.
Latest Results 2019 2018 Investment Information 2020
(group) GBP'000 GBP'000 GBP'000
Unaudited Unaudited
Year ended 31 Dec 31 Dec
---------------- ----------- ----------- --------------------------------- ---------------
Turnover 2,011 1,541 Total cost 300
---------------- ----------- ----------- --------------------------------- ---------------
Pre-tax loss 1,245 1,378 Income recognised in year/period -
---------------- ----------- ----------- --------------------------------- ---------------
Net assets (1,233) (864) Equity valuation 462
---------------- ----------- ----------- --------------------------------- ---------------
Valuation basis: Loan stock valuation -
--------------------------------- ---------------
Price of recent investments
using multiples and discounted
cash flow Total valuation 462
--------------------------------- ---------------
Voting rights / % of equity
share capital held 1.6%
Total equity held by funds managed by Calculus Capital Limited:
13.7 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. During 2019, Every1Mobile doubled the size of its
shopkeeper network, supporting informal vendors who service the
bottom of the pyramid in Kenya and Nigeria. In 2019, Calculus VCT
invested GBP0.2 million in loan notes as part of a larger
fundraising. Currently this investment has not delivered the growth
expected and the company, with Calculus support, is undertaking a
strategic review to identify what is required to rectify this.
Latest Results Unaudited Audited Investment Information 2020 2019
2019 2018 GBP'000 GBP'000
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
--------------------- ---------- --------- ----------------------- --------- ---------
Turnover 1,578 1,442 Total cost 400 200
--------------------- ---------- --------- ----------------------- --------- ---------
Income recognised
Pre-tax loss 1,049 987 in year/period 16 -
--------------------- ---------- --------- ----------------------- --------- ---------
Net assets 139 242 Equity valuation 200 230
--------------------- ---------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation 200 -
--------------------------------- --------- ----------------------- --------- ---------
Cost calibrated with multiples Total valuation 400 230
----------------------- --------- ---------
Voting rights /
and discounted cash % of equity share
flow capital held 2.21% 3.5%
Total equity held by funds managed by Calculus Capital Limited:
38.7 per cent.
Raindog Films Limited ('Raindog')
Raindog Films was co-founded in 2012 by Oscar-winning actor
Colin Firth and former Chairman and CEO of Sony Music UK and
Chairman of the Brit Awards, Ged Doherty. Raindog Films has
produced an award-winning slate of premium filmed entertainment and
has established itself as a leading producer of important films.
Recent projects include Official Secrets directed by Gavin Hood,
starring Keira Knightley and Matt Smith, which opened to critical
acclaim; Loving, directed by Jeff Nichols and starring Joel
Edgerton and Ruth Negga for which she earned an Oscar nomination
and Eye in the Sky, directed by Gavin Hood featuring Helen Mirren
and Aaron Paul. Raindog has an extremely talented team with
impeccable connections, providing the ability to attract the best
talent to work on projects. The team has been bolstered by the
addition of writer/producer and award-winning researcher Trish D
Chetty who has joined Colin and Ged to implement the company's
growth plans and commitment to identify new writing, directing and
production talent.
In February 2020, Calculus invested GBP1.9 million (GBP396,000
from the Calculus VCT), which will be used to facilitate Raindog
Films' ambitious plans to expand into TV drama, music content and
documentaries.
Latest Results Audited Audited Investment Information 2020
(group) 2019 2018 GBP'000
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- --------- --------- --------------------------------- ---------
Turnover 582 206 Total cost 396
---------------- --------- --------- --------------------------------- ---------
Pre-tax profit 880 18 Income recognised in year/period -
---------------- --------- --------- --------------------------------- ---------
Net assets (505) (1,385) Equity valuation 396
---------------- --------- --------- --------------------------------- ---------
Valuation basis: Loan stock valuation -
--------------------------------- ---------
Cost calibrated with discounted
cash flow Total valuation 396
--------------------------------- ---------
Voting rights / % of equity
share capital held 4.6%
Total equity held by funds managed by Calculus Capital Limited:
22.0 per cent.
Quai Administration Services Limited ('Quai')
Quai provides platform technology combined with back office
administration services for the high-volume personal savings
industry. Quai's platform allows it to administer many thousands of
individual savings plans at a fraction of the cost incurred by
established insurance companies and wealth managers. Since initial
investment, Quai's revenues have grown by nearly 300% (over 25%
compound annual growth). Quai now has 11 customers live on its
platform including PJ Milton, Punter Southall, Digital Moneybox and
Tavistock Investments. Recurring revenues grew at 30% to GBP1.7
million. In Q1 2020 Quai applied to become FCA regulated. This will
be an important milestone in the company's development, providing
the opportunity to expand the range of services, increase margins
and reduce reliance on third parties. The application process is
expected to take a number of months. Together with the onboarding
of new customers and the establishment of its own IT development
team, this is expected to move the company towards a profitability
in 2020.
Latest Results 2019 2018 Investment Information 2020 2019
(group) GBP'000 GBP'000 GBP'000 GBP'000
Unaudited Audited
Year ended 31 Oct 31 Oct
---------------- ----------- --------- ----------------------- --------- ---------
Turnover 1,801 1,736 Total cost 370 220
---------------- ----------- --------- ----------------------- --------- ---------
Income recognised in
Pre-tax loss 848 1,010 year/period - -
---------------- ----------- --------- ----------------------- --------- ---------
Net assets (722) (533) Equity valuation 220 220
---------------- ----------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation 150 -
----------------------- --------- ---------
Price of recent investment
calibrated with multiples
and discounted
cash flow Total valuation 370 220
----------------------- --------- ---------
Voting rights / % of
equity share capital
held 2.4% 2.4%
Total equity held by funds managed by Calculus Capital Limited:
50.8 per cent.
IPV Limited
IPV's proprietary software enables companies to access, store,
modify, tag and transfer video content quickly and efficiently,
significantly improving internal processes and creating more routes
to market. IPV's products are designed to create a "Content
Factory" experience for the users, streamlining the creative
editorial process and the delivery of content to multiple
platforms. IPV has an established, blue chip customer base in the
media and broadcast industry, including Turner, Sony Entertainment,
the Oscars (AMPAS) and Sky. An increasing number of non-broadcast
companies are having to manage large quantities of video material.
From major brands' online marketing content to law court
proceedings and large retailers' promotional materials; the need
for content management is moving beyond traditional broadcasting
companies. This is significantly increasing IPV's addressable
market. In November 2019, IPV raised GBP4.2 million of new equity
finance, including GBP1 million from the Calculus EIS funds. The
valuation achieved (approximately GBP7 million pre-money) was a 13%
uplift on the price at which the Calculus VCT previously
invested.
Latest Results 2019 2018 Investment Information 2020
(group) GBP'000 GBP'000 GBP'000
Unaudited Audited
Year ended 31 Dec 31 Dec
---------------- ----------- --------- --------------------------------- ---------
Turnover 2,716 2,254 Total cost 340
---------------- ----------- --------- --------------------------------- ---------
EBITDA (847) (1,285) Income recognised in year/period 23
---------------- ----------- --------- --------------------------------- ---------
Net assets 1,601 91 Equity valuation 45
---------------- ----------- --------- --------------------------------- ---------
Valuation basis: Loan stock valuation 300
--------------------------------- ---------
Cost calibrated with multiples
and discounted cash flow Total valuation 345
--------------------------------- ---------
Voting rights / % of equity
share capital held 0.5%
Total equity held by funds managed by Calculus Capital Limited:
34.4 per cent.
Money Dashboard Limited (formerly The One Place Capital)
Latest Audited 2019 2018 Investment Information 2020 2019
Results GBP'000 GBP'000 GBP'000 GBP'000
(group)
Year ended 30 Apr 30 Apr
---------------- --------- --------- --------------------------------- --------- ---------
Turnover 966 549 Total cost 277 277
---------------- --------- --------- --------------------------------- --------- ---------
Pre-tax
loss 981 1,168 Income recognised in year/period - -
---------------- --------- --------- --------------------------------- --------- ---------
Net assets (180) 725 Equity valuation 332 277
---------------- --------- --------- --------------------------------- --------- ---------
Valuation basis: Loan stock valuation - -
--------------------------------- --------- ---------
Price of recent investment
calibrated with discounted
cash flow Total valuation 332 277
--------------------------------- --------- ---------
Voting rights / % of equity
share capital held 1.29% 2.2%
Total equity held by funds managed by Calculus Capital
Limited: 24.9 per cent.
Money Dashboard offers its users a view of their finances (from
bank accounts, credit cards, store cards, etc.) in one secure
place. The company's proprietary transaction tagging technology
analyses the user's spending into categories, providing an
automatically updating, consolidated view of their financial lives.
With Open Banking finally becoming a reality, it is an exciting
time for pioneers such as Money Dashboard as they seek to take full
advantage of the many opportunities offered. During 2019 Money
Dashboard won a number of awards including FinTech of the Year and
Best FinTech Collaboration at the Scottish Financial Technology
Awards; and Best use of Data Science for Good and Best Innovation
for Savings Journey at the DATA Open Banking Awards. In August
2019, the Company raised GBP4.6 million of new equity capital,
primarily from new investors. The additional funds are being used
to support additional recruitment, as well as to further develop
the company's technological offering, helping cement the company's
market leading position. This investment was made at a 20 per cent
premium to previous rounds.
Wonderhood Limited
Wonderhood is introducing a new hybrid model as a TV programme
maker and advertising agency, supported by a third capability which
provides data-led insights into audience behaviour. Wonderhood has
an impressive team with a strong track record, assembled by former
Channel 4 CEO David Abraham and senior partners from the
advertising and television sectors. This year, Wonderhood's TV
production studio has won multiple broadcast commissions: a BBC2
documentary featuring Heston Blumenthal, which was broadcast in
December; a social media biography of Donald Trump for BBC3; a
cutting-edge medical sciences series for Channel 4; and a
documentary series with Jeremy Spake for BBC1. Meanwhile, the
company's advertising studio has won a number of competitive
pitches, including to produce a campaign for Starling, the mobile
challenger bank and for Mizkan owner of the Branston, Sarsons and
other former Crosse and Blackwell brands. Wonderhood is uniquely
positioned to combine its skills to develop, produce and distribute
high quality long-form content that can reach audiences in new ways
at a time when audience habits are changing radically. In December
2019, Calculus invested GBP850,000 (GBP275,000 from the Calculus
VCT), as part of a GBP1.2 million fundraise, which will enable the
company to explore new genres such as drama and develop new
productions.
Latest Unaudited 2019 Investment Information 2020
Results (group) GBP'000 GBP'000
Year ended 31 Mar
---------------------- ---------- --------------------------------- ---------
Turnover 253 Total cost 275
---------------------- ---------- --------------------------------- ---------
Pre-tax loss 1,661 Income recognised in year/period -
---------------------- ---------- --------------------------------- ---------
Net assets 1,.349 Equity valuation 275
---------------------- ---------- --------------------------------- ---------
Valuation basis: Loan stock valuation -
--------------------------------- ---------
Cost calibrated with multiples
and discounted cash flow Total valuation 275
--------------------------------- ---------
Voting rights / % of equity
share capital held 1.4%
Total equity held by funds managed by Calculus Capital
Limited: 4.20 per cent
BUSINESS REVIEW
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
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.
It is intended that a minimum of 75 per cent of the monies
raised by the Company before being invested in qualifying
investments, 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).
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.
Long term viability
Significant ramifications to the global economy are being posed
by the COVID-19 pandemic. The Directors have assessed the Company's
vulnerability to the initial impact and concluded that COVID-19 is
not expected to have any significant long term impact on the
viability of the Company. The board came to this conclusion because
a significant portion of the Company's assets are held in cash thus
diluting the impact of the valuation movements on the NAV.
Furthermore, some portfolio companies in the life science sector
are benefiting from creating products to aid the fight against
COVID-19 thus providing some upside for the portfolio.
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 34
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 emerging and principal risks facing the Company
including those that might threaten its business model, future
performance, solvency or liquidity. The procedures in place to
identify emerging risks and explain how they are being managed or
mitigated are set out on page 27.
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
-- Dividends
The financial highlights of the Company can be found after the
contents page 4 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 percentage is
disclosed in the Investment Manager's review. The Company has
received approval as a VCT from HM Revenue & Customs.
There are no KPIs related to environmental and employee matters
as these are not relevant to the Company which delegates operations
to external providers.
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.
COVID-19
As mentioned earlier in the Chairmans' Statement, the COVID-19
pandemic has led to significant ramifications on the global
economy. The emerging risks which arise from the virus are the
impact of the lockdown on sales, the investee companies' ability to
fulfil orders and or/effect installations, supply chain disruption,
the falling oil price and the likely detrimental impact of the
general economic downturn on the availability of capital and,
consequently, the valuations likely to be achieved in funding
rounds. These risks are mitigated through the Company's significant
cash assets and in its substantial investments in the life sciences
sector, which are benefiting in the current climate from creating
products to aid the fight against COVID-19.
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. Calculus Capital seeks to conduct its
investment business in line with its Environment, Social and
Governance policy.
Diversity
At the year end, the Board of directors comprised one male
director and three female Directors, so has a diverse board in
relation to gender diversity. The board also considers other forms
of diversity to be important and these factors will be considered
as part of the recruitment process going forward. This is further
set out in the Corporate Governance statement on page 37 of the
Report and Accounts.
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.
Jan Ward, Chairman
27 May 2020
SECTION 172 STATEMENT
Section 172 (1) of the Companies Act 2006 requires the Directors
to explain how they have fulfilled their obligation to consider
broader stakeholder interests when performing their duty to act in
good faith for the benefit of all stakeholders. In doing this the
Directors considered the following factors -
- Likely consequences of any decisions in the long term
- The interests of any employees
- The need to foster business relationships with suppliers, shareholders, and others
- The impact of the company's operations on the community and the environment
- Maintaining a reputation for high standards of business conduct
- Acting fairly as between all the members of the Company.
Communication with Shareholders
The Board promotes and encourages communications with
shareholders, primarily through interim and annual reports, and at
annual general meetings. The Board encourages shareholders to
attend and vote at AGMs. Calculus Capital Limited as investment
manager keeps shareholders up to date with investee company news
stories and updates on any open offers are included on quarterly
newsletters sent to investors. Investee company news stories and
regulatory news is also available for shareholders to view on the
Company's website. Calculus Capital also organises investor forums
where shareholders have an opportunity to meet with management of
portfolio companies.
Directors' decisions are intended to fulfil the Company's aims
and objectives to achieve long-term returns for shareholders. In
addition to providing the opportunity to benefit from investment in
a diverse portfolio of unquoted growing companies, the Board aims
to pay semi-annual dividends equivalent to 4.5% of NAV. During the
financial year, 3.4 pence dividends per share were paid to
registered shareholders. As part of its policy to return funds to
shareholders, the Company will continue to consider opportunities
for buybacks. 78,279 shares were bought back for cancellation
during the year.
Oversight of Professional Advisors
As is normal practice for VCT, the Company delegates authority
for the day to day management of the company to an experienced
Investment Manager, The board ensures that it works very closely
with Calculus Capital Limited to form strategy and objectives, and
oversee execution of the business and related policies. The Board
receives quarterly performance updates at board meetings from the
Manager in addition to regular ad hoc updates and portfolio news.
The Investment Manager is in attendance at every board meeting and
the CEO of the Investment Manager is also a member of the Company's
Board. The Board reviews other areas of operation over the course
of the financial year including the Company's business strategy,
key risks, internal controls, compliance and other governance
matters. The Board reviews the Investment Manager's fee annually.
The Board has also decided to initiate an annual strategy review
event along with the Investment Manager going forward
Oversight of Suppliers and Providers
The board reviews annually the agreements with service providers
including the administrators, custodian and depositary of the
Company, to ensure value for money, accuracy and compliance. In
carrying out its activities and in its relationships with
suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Working with Portfolio Companies
The board, through its investment policy and objectives, as
detailed in page 25 of the Annual Report incorporates
considerations for ensuring alignment with the objectives agreed
with the Investment Manager and portfolio companies. Calculus
Capital Limited as Investment Manager is the main point of contact
for investee companies and the Board ensures it receives updates on
the entire portfolio quarterly. There have been 12 additions in the
financial year and 5 disposals. Further support was provided to
some portfolio companies through follow on investments. The
investment manager offers investee companies both financial support
and practical help by offering specialist skills and contacts to
help portfolio companies achieve their long term objectives.
Supporting the Environment and the Community
The purpose of the regulations related to VCTs is to generate
support and investment for small growth companies. Government
endorsement of the sector is aimed at creating economic growth
through innovation, entrepreneurship and employment. This benefits
the economy and wellbeing of the community. The Investment Manager
incorporates consideration of social, environmental and governance
issues in making investment decisions, Investments in life sciences
companies such as Genedrive, Mologic and Scancell for example all
have core missions to help society overcome disease. Portfolio
company Mologic is currently developing a fast diagnostic device
for COVID-19, and Scancell has announced plans to use its
technology to develop a vaccine. A further portfolio company
Weedingtech offers an environmentally friendly approach to safely
treating weed and moss in public areas. Every1Mobile, a digital
communications platform is focussed on assisting with
implementation of development programmes aimed at enhancing health
and financial outcomes of communities in Africa.
The Board takes into consideration the potential long term
effect of their decisions on all its associated stakeholders. The
effects on members, the long term success of the company,
compliance with regulations, adherence with the AIC code and the
reputation of the Company are all taken into consideration.
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
2019 18,422,373
Issue of new ordinary shares -
5 April 2019 2,069,945
Issue of new ordinary shares -
26 June 2019 349,967
Share buyback - 30 July 2019 (78,279)
Issue of new ordinary shares -
6 September 2019 1,334,399
Issue of new ordinary shares -
11 December 2019 2,764,563
Total shares in issue - 29 February
2020 24,862,968
Since the year end a further 2,342,066 new Ordinary shares have
been issued pursuant to an offer for subscription.
Substantial Shareholdings
As at 29 February 2020, there were no 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 was entered into on 26 October 2015 in
relation to the management of the D share fund and covers the
addition of company secretarial duties. The supplemental management
agreement entered into on 12 September 2017 relates 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 29 February 2020, Calculus Capital Limited
charged GBP264,358 in management fees, GBP18,000 in company
secretarial fees, and did not contribute to the expenses (2019:
charged GBP197,314 in management fees, GBP18,000 in company
secretarial fees and did not contribute to the expenses cap).
Performance Fees
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. The board have assessed the likelihood of a
performance fee being paid as remote and have thus not made a
provision for it in these accounts. In making this assessment the
board have taken into account the current performance of the
Company, including dividends paid out and the current net asset
value attributable to Ordinary shareholders.
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 legacy performance incentive agreement between the
Company, Calculus Capital Limited and Investec Structured Products
dated 2 March 2010, Investec Structured Products and Calculus
Capital Limited were each to receive a performance incentive fee
payable 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). The board assess the likelihood of this hurdle ever being
met in the long term as a remote probability, and consequently have
not recognised a liability or contingent liability in these
financial statements.
A legacy performance incentive agreement between the Company,
Calculus Capital Limited and Investec Structured Products dated 7
January 2011 was entered into with reference to the C share class.
As one of the performance hurdles has not been met, no incentive
fee will ever be paid under this agreement, hence no performance
fee has been accrued.
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 X 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 and also the impact caused by COVID-19. As
disclosed on page 25 under long term viability, it was concluded
that COVID-19 is not expected to have a significant impact in the
long term. 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 Financial Statements.
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from its
operations, nor does it have responsibility for any other
emission-producing sources under the Companies Act 2006 (Strategic
Report and Directors' Report) Regulations 2013. Under the
investment manager's ESG policy, the environmental impact of an
investee company is considered at the point of investment.
Annual General Meeting
A formal Notice convening the Annual General Meeting of the
Company to be held on 3 July 2020. As mentioned earlier, in light
of the COVID-19 pandemic and the regulations on social distancing
the Board is considering contingency plans for the 2020 AGM taking
into account the evolving nature of the regulations and
announcements from the Financial Reporting Council and the
Financial Conduct Authority.
DIRECTORS' RESPONSIBILITIES STATEMENT
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.
-- prepare a director's report, a strategic report and
director's remuneration report which comply with the requirements
of the Companies Act 2006.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
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.
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
Jan Ward Chairman
27 May 2020
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the year ended 29 February 2020
and the year ended 28 February 2019 but is derived from those
accounts. Statutory Accounts for 2019 have been delivered to the
Registrar of Companies, and those for 2020 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 29 February 2020
Year Ended 29 February 2020 Year Ended 28 February 2019
Revenue Capital Revenue Capital
Return Return Total Return Return Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Losses on investment
at fair value 9 - (329) (329) - (612) (612)
Gains/losses on disposal
of investments 9 - 122 122 - (88) (88)
Unrealised foreign
exchange loss on
disposal of investments - (4) (4) - - -
Income 3 154 - 154 91 - 91
Investment management
fee 4 (66) (198) (264) (49) (148) (197)
Other expenses 5 (239) - (239) (221) - (221)
Deficit before taxation (151) (409) (560) (179) (848) (1,027)
Taxation 6 - - - - - -
Deficit attributable
to shareholders (151) (409) (560) (179) (848) (1,027)
Deficit per Ordinary
share 8 (0.7)p (1.9)p (2.6)p (1.3)p (6.0)p (7.3)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 58 to 72 form an integral part of these
financial statements.
STATEMENT OF CHANGES IN EQUITY
for the year ended 29 February 2020
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 GBP'
000
For the year
ended 29
February 2020
1 March 2019 184 5,584 9,488 56 215 (441) (1,115) 13,971
Investment
holding losses - - - - - (329) - (329)
Gain on disposal
of
investments - - - - 122 - - 122
Unrealised
foreign
exchange
loss on
disposal of
investments - - - - - (4) - (4)
New share issue 66 4,851 - - - - - 4,917
Expenses of
share issue - (76) - - - - - (76)
Share buybacks
for
cancellation (1) - (54) 1 - - - (54)
Management fee
allocated
to capital - - - - (198) - - (198)
Change in
accrual in
IFA trail
commission - (36) - - - - - (36)
Revenue return
after
tax - - - - - - (151) (151)
Dividends paid - - (709) - - - - (709)
Transfer of
previously
unrealised
losses to
realised - - - - (583) 583 - -
Realised of
prior year
investment
holding gains - - - - 32 (32) - -
29 February 2020 249 10,323 8,725 57 (412) (223) (1,266) 17,453
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
Expense of share issue - (98) - - - - - (98)
Share buybacks for
cancellation - - (35) - - - - (35)
Management fee allocated
to capital - - - - (148) - - (148)
Change in accrual in
IFA commission - (62) - - - - - (62)
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
The notes on pages 58 to 72 an integral part of these financial
statements.
STATEMENT OF FINANCIAL POSITION
at 29 February 2020
29 February 28 February
2020 2019
Note GBP'000 GBP'000
Non-current assets
Investments at fair value through
profit or loss 9 14,309 11,593
Sales awaiting settlement 88 -
Current assets
Debtors 10 151 1,417
Cash at bank and on deposit 3,156 1,176
Creditors: amount falling due within
one year
Creditors 11 (160) (145)
Net current assets 3,147 2,448
Non-current liabilities
IFA trail commission (91) (70)
Net assets 17,453 13,971
Capital and reserves
Called-up share capital 12 249 184
Share premium 10,323 5,584
Special reserve 8,725 9,488
Capital redemption reserve 57 56
Capital reserve - realised (412) 215
Capital reserve - unrealised (223) (441)
Revenue reserve (1,266) (1,115)
Equity shareholders' funds 17,453 13,971
Net asset value per Ordinary share
- basic 13 70.2p 75.8p
These financial statements were approved and authorised for
issue by the Board of Calculus VCT plc 27 May 2020 and were signed
on its behalf by:
Jan Ward
Chairman
27 May 2020
The notes on pages 58 to 72 form an integral part of these
financial statements.
STATEMENT OF CASHFLOWS
for the year ended 29 February 2020
Year Ended Year Ended
29 February 28 February
2020 2019
Note GBP'000 GBP'000
Cash flows from operating activities
Investment income received 64 47
Deposit interest received 7 3
Investment management fees (245) (190)
Other cash payments (246) (213)
(420) (353)
Net cash flow from operating activities
Cash flow from investing activities
Purchase of investments 14 (3,511) (6,057)
Sale of investments 496 1,746
Net cash flow from investing activities (3,015) (4,311)
Cash flow from financing activities
Ordinary share issue/ D share issue 6,274 4,157
Expense of Ordinary/D share issue (81) (94)
IFA trail commission (7) (4)
Expenses of Neptune-Calculus transaction (8) -
Share buybacks for cancellation (54) (35)
Equity dividend paid (709) (451)
Net cash flow from financing activities 5,415 3,573
Increase/(decrease) in cash and cash
equivalents 1,980
Analysis of changes in cash and cash (1,091)
equivalents
Cash and cash equivalents at the
beginning of year 1,176 2,267
Net cash increase/ (decrease) 1,980 (1,091)
Cash and cash equivalents at the
year end 3,156 1,176
The notes on pages 58 to 72 form an integral part of these
financial statements.
NOTES TO THE FINANCIAL STATEMENTS
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 Company's financial statements have been prepared under
FRS102 "The Financial Reporting Standard applicable in the United
Kingdom and Republic of Ireland" ('FRS102') and in accordance and
with 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) amid the COVID-19 epidemic.
This is primarily due to the large cash reserves raised through new
subscription offers every year, the funds raised are invested in
accordance with the Company's investment policy and to meet VCT
qualification requirements. 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. Judgments are made to determine the best
valuation methodology in order to ascertain the fair value of
unquoted investments. Fair value is calculated within a reasonable
range of estimates. Estimates are based on historical experience
and other assumptions that are considered reasonable under the
circumstances. Hence, investments are measured at fair value in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines. The sensitivity analysis in note 16
demonstrates the impact on the portfolio of applying alternative
values in the upside and downside.
As at 29 February 2020 the value of unquoted investments
included within the Company's investment portfolio was GBP8,118,626
(2019: GBP5,532,937).
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 methodology used when
assessing that the consideration given was appropriate and
excluding transaction or other dealing costs associated with the
investment, which are expensed and included in the capital column
of the Income Statement.
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 price of recent investments or cost,
calibrated with other valuation methods such as earnings or sales
multiples, discounted cash flows, or from net assets.
Earnings or sales multiples are tools that evaluate a financial
metric as a ratio of another, allowing the comparable analysis of
different companies. Relevant multiples are collated from the
analysis of appropriate public companies and precedent
transactions, and applied to both historic and forward-looking
sales and earnings, the assumptions of which are based on the
Company's forecasts, providing a suitable enterprise value for the
respective unquoted investment.
A discounted cash flow is a valuation tool used by the Company
to estimate the value of relevant unquoted investments, based on
its forecast cash flows. For the unquoted investments, the majority
of the present value will be in the terminal value, which captures
the value of the investment beyond the forecast period.
Predominantly, the Company assumes an earnings or sales multiple,
based on comparable company analysis, and applies this to the
relevant financial metric for the final year of the investment's
forecast. The present value of forecast future cash flows is
calculated by using an assumed discount rate of 25-30%, which is a
function of the required rate of return over the proposed hold
period of the unquoted 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 initially measured at transaction price.
Subsequent remeasurement deducts any impairment from the
transaction price.
Creditors
Short term trade creditors are initially and subsequently
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.
Performance fees are recognised as a liability or contingent
liability only when the current obligation to pay the performance
incentive fee exists. As dividend decisions are discretionary, this
obligation is assessed to exist when the dividends already
distributed to a share class plus the net assets attributable to
that share class would reach the performance hurdle.
Share Capital
The share capital reserve contains the nominal value of all
shares that have been issued. It is not distributable.
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. Share premium created prior to 1 November 2017 was
cancelled in order to create 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. The majority of the special reserve created in
November 2017 becomes distributable on 1 March 2020 as disclosed
below.
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.
Capital Redemption
The capital redemption reserve accounts for the amounts by which
the issued share capital is reduced through the repurchase and
cancellation of the Company's own shares. A resolution is being put
to shareholders at the upcoming annual general meeting so that the
Company can apply to cancel this reserve and create additional
special reserve.
Capital Reserve Realised
The capital reserve realised discloses the gains and losses on
disposal of investments and also 75% of management fees as this is
the level associated with the enhancement or maintenance of
investments. Profits achieved from this reserve would be
distributable.
Capital Reserve Unrealised
The capital reserve unrealised is the appreciation or
depreciation of investments and unrealised exchange gains or losses
on outstanding trades. When an investment is sold the related
balance in the capital reserve unrealised is transferred to the
capital reserve realised.
Revenue Reserve
The revenue reserve represents accumulated profit or loss
retained by the Company.
Distributable Reserves
Distributable reserves are represented by the special reserve,
the capital reserve realised and the revenue reserve reduced by
negative capital reserve unrealised which total GBP6,822,120, as at
29 February 2020. From 1 March 2020, GBP6,629,005 of this amount
will be distributable. A resolution is being put to shareholders at
the upcoming annual general meeting to be able to apply to create
further special reserves from the share premium created since 1
November 2017 (when the share premium was last cancelled) and the
capital redemption reserve. In accordance with VCT rules, special
reserves created from share premium cannot be distributed until
three years after the accounting period in which the shares were
issued.
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.
Interim dividends are recognised when paid. Final dividends are
recognised when approved by shareholders at the AGM when they
become irrevocable and legally binding.
Share buybacks
The Board considers that the Company should have the ability to
purchase its shares in the market with the aim of providing the
opportunity for shareholders who wish to sell their shares to do
so. Subject to maintaining a level of liquidity in the Company
which the Board considers appropriate, it is the intention that
such purchases of shares will be made at a price which represents a
discount of no greater than 5% (or 10% in respect of buybacks made
on or before 28 February 2020) to the most recently published net
asset value per share. Shares bought back will be cancelled.
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 February
29 February 2020 2019
GBP'000 GBP'000
UK unfranked loan stock interest 121 73
Liquidity Fund interest 26 15
Bank interest 7 3
154 91
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 29 February 2020 Year Ended 28 February 2019
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment management
fee 66 198 264 49 148 197
No performance fee was paid during the year or payable at the
year end.
For the year ended 29 February 2020, Calculus Capital Limited
did not contribute (2019: GBPnil contributed) to the expenses of
the Company such that its net management fee was GBP264,358 (2019:
GBP197,314). At 29 February 2020, there was GBP69,017 due to
Calculus Capital Limited for management fees (2019: GBP49,945 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
29 February 28 February
2020 2019
GBP'000 GBP'000
Directors' fees 68 65
Calculus secretarial fee 18 18
Administrator's fees 38 38
Fees payable to the Company's auditor for
the audit of the Company's annual accounts 29 29
Fees paid to the auditor for permissible audit
related services 6 -
Other 80 71
239 221
Further details of directors' fees can be found in the
Directors' Remuneration Report on page 44 to 46 of the
Accounts.
6. Taxation
Year Ended 29 February Year Ended 28 February
2020 2019
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss before tax (151) (409) (560) (179) (848) (1,027)
Theoretical tax
at UK Corporation
Tax rate of 19.0%
(2019: 19.0%) (29) (78) (107) (34) (161) (195)
Timing differences:
loss not recognised,
carried forward 29 38 67 34 28 62
Effects of non-taxable
(gains)/ losses - 40 40 - 133 133
Tax charge - - - - - -
The Corporation Tax rate was at 19% for the whole of the
reporting period.
At 29 February 2020, the Company had GBP1,863,227 (28 February
2019: GBP1,514,379) of excess management expenses to carry forward
against future taxable profits.
The Company's deferred tax asset of GBP316,749 (28 February
2019: GBP257,444) 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
29 February 28 February
2020 2019
GBP'000 GBP'000
New ordinary shares
Declared and paid: 3.4p per Ordinary share
in respect of the year ended 29 February
2019 (2018: 4.00p) 709 451
The Board have proposed an Ordinary share dividend in respect of
the year to 29 February 2020 of 3.2 pence per share which, if
approved by shareholders, will be paid on the 31 July 2020 to all
Ordinary shareholders on the register on 3 July 2020.
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 29 February 2020 Year Ended 28 February 2019
Revenue pence Capital Total Revenue Capital Total
pence pence pence pence pence
Return per Ordinary share (0.7) (1.9) (2.6) (1.3) (6.0) (7.3)
Ordinary share return
Revenue return per Ordinary share is based on the net revenue
loss after taxation of GBP150,950 (2019: GBP179,402) and on
21,728,528 Ordinary shares, (2019: 14,129,738) 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 GBP409,408 (2019: GBP847,995) and on
21,728,528 Ordinary shares (2019: 14,129,738) 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 GBP560,358 (2019: GBP1,027,397) and on 21,728,528
Ordinary shares (2019: 14,129,738), being the weighted average
number of Ordinary shares in issue during the period.
9. Investments
Year Ended 29 February Year Ended 29 February
2020 2019
VCT Other Total VCT Other Total
Qualifying Investments Qualifying Investments
Investments Investments
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening book
cost 6,384 5 ,650 12,034 5,163 2,648 7,811
Opening
investment
holding
(losses)/gains (447) 6 (441) 169 2 171
Opening fair
value 5,937 5,656 11,593 5,332 2,650 7,982
Movements in
year:
Purchases at
cost 3,511 - 3,511 1,857 4,200 6,057
Sales proceeds (588) - (588) (546) (1,200) (1,746)
Realised
gain/losses
on sales 122 - 122 (90) 2 (88)
Increase in
investment
holding
gains/losses (341) 12 (329) (616) 4 (612)
Closing fair
value 8,641 5,668 14,309 5,937 5,656 11,593
Closing book
cost 8,878 5,650 14,528 6,384 5,650 12,034
Closing
investment
holding
(losses)/gains (237) 18 (219) (447) 6 (441)
Closing fair
value 8,641 5,668 14,309 5,937 5,656 11,593
The Company sold investments of GBP588,000 in the year. The book
costs of these investments when they were purchased was GBP433,928.
These investments have been revalued over time and until they were
sold any unrealised gains/losses were included in the fair value of
the investments.
In the year to 29 February 2020, Blu Wireless had an uplift in
value of GBP300,000 and Wazoku's valuation increased by GBP162,000.
Evoterra which bought the share capital of Terrain Energy and
MicroEnergy was written down by GBP290,000. Also during the year
Benito's Hat (Pico's Limited) was written down by GBP181,000,Solab
Group Limited by GBP180,000 and C4X Discoverys' valuation decreased
by GBP227,000
In the Statement of Changes in Equity the unrealised loss of
GBP199,000 for Benito's Hat (Pico's Limited), GBP180,000 for Solab
Group Limited and GBP200,000 for Air Leisure Limited has been
reclassified to capital reserve realised as it represents permanent
diminution in the value of these investments.
There have not been any transaction costs in the year to 29
February 2020. Transaction costs are only incurred on sale of
quoted investments.
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
29 February 2020 28 February
2019
GBP'000 GBP'000
Current debtors
Prepayments and accrued income 151 60
Share issue proceeds - 1,357
Clawback of expenses in excess of 3% cap - -
payable by the Manager
151 1,417
Non Current debtors
Sales awaiting settlement 88 -
239 1,417
11. Creditors
Year Ended Year Ended
29 February 2020 28 February
2019
GBP'000 GBP'000
Management fees 69 50
Audit fees 29 35
Directors' fees 10 11
Secretarial fees 5 5
Administrator's fees 6 3
Costs of acquiring Neptune-Calculus assets
and liabilities - 8
IFA trail commission 15 8
New issue costs - 4
Other creditors 26 21
160 145
12. Share Capital
Number of shares Ordinary
shares
Opening balance 01 March 2019 18,422,373
New issue of Ordinary shares 6,518,874
Share buyback Ordinary shares (78,279)
Closing balance 29 February 2020 24,862,968
Ordinary
Nominal value share
GBP'000
Opening balance 01 March 2019 184
New issue of Ordinary shares 65
Share buyback Ordinary shares -
Closing balance 29 February 2020 249
On 5 April 2019, 2,069,945 Ordinary shares were issued for total
consideration of GBP1,625,735. On 26 June 2019, 349,967 Ordinary
shares were issued for total consideration of GBP274,374. On 11
December 2019 2,764,563 Ordinary shares were issued for a total
consideration of GBP2,001,267.
On 31 July 2019, the Company bought back for cancellation 78,279
Ordinary shares.
On 6 September 2019, 1,334,399 Ordinary shares were issued for
total consideration of GBP1,017,212.
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
29 February 28 February
2020 2019
GBP'000 GBP'000
Net asset value per Ordinary
share 70.2p 75.8p
The basic net asset value per Ordinary share is based on net
assets of GBP17,453,046 (28 February 2019: GBP13,971,482) and on
24,862,968 Ordinary shares (28 February 2019: 18,422,373), 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
29 February 28 February
2020 2019
GBP'000 GBP'000
Loss for the year (560) (1,027)
Losses on investments 211 700
Increase in debtors (91) (16)
Increase/(decrease) in creditors 20 (10)
Cash flow from operating activities (420) (353)
15. Financial Commitments
At 29 February 2020, the Company did not have any financial
commitments which had not been accrued for (2019: nil).
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 weighted average interest rate earned on the loan stock
instruments as at 29 February 2020 was 9.7%.
At the year end, GBP96,498 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 29 February 2020 As at 28 February 2019
Fair Value Cash Flow Fair Value Cash Flow
Interest Rate Interest Interest Rate Interest
Rate Rate
Risk GBP'000 Risk GBP'000 Risk GBP'000 Risk GBP'000
Loan stock 1,625 - 775 -
Money market funds - 5,665 - 5,652
Cash - 3,156 - 1,176
1,625 8,821 775 6,828
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 29 February 2020.
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.
Sensitivity Analysis
The Board considers that the value of investments in equity and
loan stock instruments are sensitive to changes to trading
performance and the fluctuations of wider public equity markets.
Such changes affect the enterprise value of AIM listed and unquoted
companies.
The sensitivity below has been applied to AIM listed investments
with a 10% movement in share price and to unquoted securities
valued with reference to market inputs such as multiples of
earnings or revenue and discounted cash flows, with a 10% movement
in such market input applied.
As at the 29 of February 2020, if the AIM listed investments
share price had been 10% higher or lower with all other variables
held constant, the increase or decrease on net assets at the year
end would be GBP52,559.
As at the 29 of February 2020, if the unquoted securities had a
10% increase or decrease in the market input (due to the movement
in the quoted securities) with all other variables held constant,
the increase in net assets would be GBP274,908 and the decrease
would be GBP275,063.
The combined total increase on net assets would be GBP327,467
(2019: GBP535,786) and total decrease would be GBP327,622 (2019:
GBP700,403). The increases and decreases are based on the current
portfolio value GBP14,309,364 (2019: GBP11,593,413). The variance
of 10% is the Investment Managers assessment of reasonable possible
change. The sensitivity analysis assumes the actual portfolio of
investments held by the Company is symmetrically correlated to this
overall movement in net assets. However, in reality unquoted
companies have other factors which may influence the extent of the
valuation change.
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.
Maturity profile
The carrying value of fixed rate investments in unquoted
companies held at 29 February 2020, which is analysed by expected
maturity date, is as follows:
Within 1 Within Within Within Within More than Total
year 1 - 2 2 - 3 3 - 4 4 - 5 5 years
years years years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 29 February 2020
Loan stock 95 - - 280 1,250 - 1,625
As at 28 February 2019
Loan stock - 295 100 - 280 100 775
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 29 February 2020, 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 29 February
2020
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Unquoted equity - - 6,493 6,493
Quoted equity 526 - - 526
Money market funds 5,665 - - 5,665
Loan stock - - 1,625 1,625
6,191 - 8,118 14,309
Financial Assets at Fair Value through Profit or Loss at 28 February
2019
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
Reconciliation of fair value for level 3 financial instruments
held at the year end:
Level 3 Investments
Unquoted Equity Loan Stock Total
GBP'000 GBP'000 GBP'000
Balance as at 28 February
2019 4,758 775 5,533
Purchases at cost 1,961 1,150 3,111
Disposal Proceeds (288) (300) (588)
Realised gains/ 122 - 122
Unrealised movement (60) - (60)
Balance as at 29 February
2020 6,493 1,625 8,118
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 price of recent investments or cost,
calibrated with other valuation methods such as earnings or sales
multiples, discounted cash flows or from net assets.
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 mentioned above on page 68. 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.
17. Related Parties' Transactions
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 29 February 2020, Calculus Capital Limited earned
GBP264,358 in relation to the Ordinary share portfolio (2019:
GBP197,314). Calculus Capital Limited also earned a company
secretarial fee of GBP18,000 (2019: GBP18,000).
Calculus Capital Limited took on the expenses cap on 15 December
2015. In the year to 29 February 2020, Calculus Capital Limited did
not make a contribution towards the expenses of the Company (2019:
contributed GBPnil).
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 29 February 2020, Calculus Capital
Limited charged a monitoring fee to Air Leisure Group Limited,
AnTech Limited, Arcis Biotechnology Holdings Limited, Arecor
Limited, Cloud Trade 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, Money Dashboard 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, Cloud Trade Technologies
Limited, Cornerstone Brands Limited, Every1Mobile Limited, Open
Energy Market Limited, Origin Broadband Limited, Pico's Limited,
Terrain Energy Limited, Money Dashboard Limited, Weeding
Technologies Limited and WheelRight Limited.
In the year to 29 February 2020, Calculus Capital Limited
charged an arrangement fee to Arecor Limited, Cloud Trade
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: GBPnil (2019: GBP2,377); AnTech
Limited: GBP524 (2019: GBP255); Arecor Limited: GBP750 (2019:
GBP2,712); Arcis Biotechnology Holdings: GBP180 (2019: GBP187); Blu
Wireless Technology Limited: GBP2,641 (2019: GBPnil); Cloud Trade
Technologies Limited: GBP4,213 (2019: GBP7,717); Cornerstone Brands
Limited: GBP3,240 (2019: GBP3,120); Duvas Technology Limited:
GBP3,344 (2019: GBP7,212); Essentia Analytics Limited: GBP3,118
(2019 GBP4,875); Every1Mobile Limited: GBP3,518 (2019: GBP2,727);
Fiscaltec Limited: GBP10,500, IPV Limited: GBP2,361, MicroEnergy
Generation Services Limited: GBP2,198 (2019: GBP1,964); MIP
Diagnostics Limited: GBPnil (2019: GBP6000 (100% of this fee
relates to the VCT)); Mologic: GBPX (2019: GBP4,394); Open Energy
Market Limited: GBPX (2019:GBP2,489); Origin Broadband Limited:
GBPnil (2019: GBP678); Oxford BioTherapeutics Limited: GBP2,325
(2019: GBP8,402); Park Street Shipping Limited: GBP1,066 (2019:
GBP974); Pico's Limited: GBP1,115 (2019: GBP5,283); Quai
Administration Services Limited: GBP2,185 (2019: GBP1,013); Raindog
Films limited: GBP14,209 (100% of this fee relates to the VCT),
Solab Group Limited: GBP2,059 (2019: GBP4,050); Synpromics Limited:
GBP180 (2019: GBP290); Terrain Energy Limited: GBP4,179 (2019:
GBP3,708); Money Dashboard Limited: GBP793 (2019: GBP696); Tollan
Energy Limited: GBPnil (2019: GBP1,669); Weeding Technologies
Limited GBP2,026 (2019: GBP1,812) Wazoku Limited GBP3,150,
WheelRight Limited GBP964 (2019: GBP658) and Wonderhood GBP11,528
(all excluding VAT).
19. Post balance sheet events
Given the impact of the COVID-19 epidemic to the global economy,
the Manager has completed a review of the portfolio and undergone a
revaluation of its holdings in its respective investee companies.
The impact of these estimations would be to reduce the valuation of
the investment portfolio by GBP552,402, which would result in an
estimated fall in NAV (unaudited) by 3.7 pence to 66.5 pence per
ordinary share from 29 February 2020. The movement reflects the
Company's current best estimate of the operating impact, both
positive and negative, on our portfolio companies. It is a volatile
situation, subject to rapid change and valuations of portfolio
companies will be kept under constant review.
Since the year end the Company has made a further allotment of
Ordinary shares. On 3 April 2020, a further 2,342,066 Ordinary
shares were allotted at an average price of 65.9 per share. The
Company has made two further qualifying investments in Maze Theory
and Rotageek. Further details can be found on page 8 of the
Accounts.
GLOSSARY OF TERMS
Accumulated Shareholder Value
The sum of the current NAV and cumulative dividends paid to
date.
Alternative performance measure (APM)
An Alternative performance measure is a measure of a past or
future financial position, performance or cash flows that is not
prescribed by the relevant accounting standards.
Annual Yield
This is used to show the real rate of return on the portfolio.
The annual yield is calculated by dividing the final proposed
dividend over the net asset value per share.
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.
Final Dividend Proposed
The dividend declared or proposed to be distributed among the
shareholders of the Company during a financial year which will be
paid in the next financial year
IPEV Guidelines
The International Private Equity and Venture Capital Valuation
Guidelines published in December 2019, 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).
Portfolio Income Yield
The amount of investment income generated by the portfolio
during a certain period of time, expressed as a percentage.
Portfolio income yield is calculated by dividing the total
investment income during the period over the total cost of the
portfolio.
Share Price discount
The difference between the share price and the net asset value
per share expressed as a percentage.
Total return per share
Total return per share is a non-GAAP Alternative Performance
Measure ("APM"). It is taken from the Income Statement on page 53
and is calculated by taking the total profit or loss for the period
and dividing by the weighted average number of shares. This has
been selected to provide better understanding of the Company's
performance over the period on a per share basis.
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
ACSZDLFLBELXBBE
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