Annual Financial Report
Mobeus Income & Growth 2 VCT plc
Results announcement for the year ended 31 March 2016
Mobeus Income & Growth 2 VCT plc, ("MIG2", the "Company", "VCT", or the "Fund") is a Venture Capital Trust ("VCT") advised by Mobeus Equity Partners LLP ("Mobeus"), investing primarily in established, unquoted companies.
OBJECTIVE OF COMPANY
The Objective of the Company is to provide investors with a regular income stream, arising both from the income generated by companies selected for the portfolio and from realising any growth in capital, while continuing at all times to qualify as a VCT.
VENTURE CAPITAL TRUST STATUS
Mobeus Income & Growth 2 VCT has satisfied the requirements for full approval as a Venture Capital Trust under section 274 of the Income Tax Act 2017 ("ITA"). It is the Directors' intention to continue to manage the Company's affairs in such a manner as to comply with section 274 of the ITA.
FINANCIAL HIGHLIGHTS
Results for the year ended 31 March 2016
· Net Asset Value ("NAV") and Share Price Total Return per share for the year was 7.9% and 5.5% respectively.
· Shareholders received an interim dividend of 5.00 pence per share on 18 March 2016.
· A special interim dividend of 5.00 pence per share for the year ending 31 March 2017 has been declared by the Board, payable on 8 August 2016. This will bring total dividends paid since inception of the current share class* to 52.00 pence per share.
· £4.51 million was invested during the year into four new investments totalling £4.19 million with a further £0.32 million invested into existing investments.
· A total of £5.00 million was received as net cash proceeds from realisations, compared with a total cost of £2.84 million.
· Total liquid assets available for investment are £20.44 million.
Note: The above data does not reflect the benefit of income tax relief.
*The first allotment of the former "C" share class, now the current share class, took place on 23 December 2005.
Performance Summary
The NAV per share as at 31 March 2016 was 119.61 pence.
The table below shows the recent past performance of the current share class, first raised in 2005 at an original subscription price of 100p per share before the benefit of income tax relief. Performance data for all fundraising rounds are shown in the tables on pages 69 and 70 of the Annual Report and Financial Statements (the "Annual Report").
|
Reporting date as at |
Net assets (£ m) |
Net asset value (NAV) per share (p) |
Share price (mid-market price) (p)1 |
Cumulative dividends paid per share (p) |
Cumulative total return per share since launch |
|
|
(NAV basis) |
(Share price basis) |
|||||
|
(p)2 |
(p)3 |
|||||
|
31 March 2016 |
43.14 |
119.61 |
105.25 |
47.00 |
166.61 |
152.25 |
|
31 March 2015 |
42.10 |
115.45 |
104.50 |
42.00 |
157.45 |
146.50 |
|
31 March 20144 |
33.88 |
120.73 |
103.50 |
23.00 |
143.73 |
126.50 |
|
30 April 2013 |
25.70 |
106.75 |
70.30 |
18.00 |
124.75 |
88.30 |
|
30 April 2012 |
24.53 |
98.71 |
67.00 |
14.00 |
112.71 |
81.00 |
1 Source: London Stock Exchange.
2 NAV as at the reporting date plus cumulative dividends paid since shares were first allotted in the fund in December 2005.
3 Mid-market share price as at the reporting date plus cumulative dividends paid since shares were first allotted in the fund in December 2005.
4 Data relates to an 11 month period, as the Company shortened its accounting period by 1 month during the year.
The data in the table above excludes the benefit of any income tax relief.
Chairman's Statement
I am pleased to present the annual results of Mobeus Income & Growth 2 VCT plc for the year ended 31 March 2016.
Overview of performance
It has been a solid year for the Company. The Net Asset Value ("NAV") Total Return was 7.9% (2015:11.4%) for the year.
This year's return benefited from one realisation at a substantial gain over both cost and its valuation at the start of the year, as well as several other partial, profitable realisations. In addition, a number of existing investee companies have returned good performances in the portfolio, causing an increase in their valuations.
At 31 March 2016, your Company was rated 5th out of 31 VCTS, 2nd out of 44 VCTs, 3rd out of 53 VCTs and 21st out of 55 VCTs over the previous 10, 5, 3 and 1 years respectively in the Association of Investment Companies' analysis of NAV Cumulative Total Return for all Generalist VCTs.
Further details of the calculations demonstrating the Company's performance for the year are contained in the Strategic Report in the Annual Report.
Shareholders will have noted that the UK Finance (No2) Act 2015, which became law in November 2015, requires some changes to the type of investment that the VCT is now permitted to make. These regulatory changes will require the Company to amend its Investment Policy. For further explanation, please refer to the Industry developments and Changes to the Investment Policy sections below.
Dividends
The Company paid an interim dividend of 5.00 pence (2015: two interim dividends of 14.00 pence and 5.00 pence) per share on 18 March 2016, meeting the Company's annual dividend target of a minimum of 5.00 pence per share for the year.
Shareholders will be pleased to note that a special interim dividend of 5.00 pence per share in respect of the financial year ending 31 March 2017 has been declared by the Board. It will be paid on 8 August 2016 to shareholders on the register on 1 July 2016. This will bring cumulative dividends paid to 52.00 pence per share since the launch of the current share class.
Investment portfolio
There has been a steady flow of new investments resulting in a total of £4.51 million being successfully invested in six new and existing investee companies during the year. £4.19 million related to investments into Jablite, Tushingham, Access IS and Redline. A further £0.32 million was invested into existing companies.
Cash proceeds totalled £5.00 million in the year, reflecting principally £2.10 million received from one sale, £0.84 million of deferred consideration received from sales in the previous year and £2.06 million received from loan repayments from existing companies. Realised gains over the original cost of investments sold or partially sold were £2.16 million.
Full details of all of these transactions are included in the Investment Review in the Annual Report.
A number of companies in the portfolio continued to perform well, although several have experienced more mixed results but the performance of the portfolio as a whole remained good. The current portfolio at the year-end was valued at £29.33 million (2015: £22.35 million). The movement in value is due to new investment of £9.16 million (including companies preparing to trade), and an increase in valuations of £1.09 million less disposals (at opening valuation) of £3.27 million, in the year.
Industry developments
The UK Finance (No 2) Act 2015 became law on 18 November 2015. This introduced rules designed to ensure that VCTs comply with the new European Union ("EU") State Aid rules, while remaining able to provide finance to small and growing businesses.
The UK's VCT scheme must comply with EU State Aid rules, as the tax relief given to investors is deemed to be State Aid to the companies in which the VCTs invest. They prohibit governments from providing State Aid to companies which are deemed capable of raising finance from investors, banks and financial assistance without such support.
The new VCT rules have introduced new criteria regarding:
• a requirement that VCT investment is to be used for growth and development purposes only; and
• the maximum age of companies that are eligible for investments (generally seven years); and
• besides an annual limit of £5 million, already in place, there is now also a lifetime cap on the total amount of State Aid risk finance investment a company can receive (generally £12 million).
Impact on the Company's Investment Policy
The practical consequences of the application of these EU State Aid rules by the UK Finance (No 2) Act 2015 are that the range and size of potential investments open to generalist VCTs, such as Mobeus Income & Growth 2 VCT plc, will reduce. The Government has decided that VCT investments made to finance the purchase of existing business owners' shareholdings and the acquisition of businesses will no longer be permitted. Previous legislation had prevented such transactions if they used the VCT's funds raised after 5 April 2012. The UK Finance (No 2) Act 2015 has extended this restriction firstly, to apply to previously exempted monies raised prior to 5 April 2012 and secondly, to prevent such investment, even if it would be a non-qualifying holding. The new rules will prevent all VCTs' future participation in funding management buyout ("MBO") transactions. However, such investments that have already been made remain qualifying investments as part of our investment portfolio.
The UK Finance (No 2) Act 2015 requires the VCT to re-adjust its focus for new investments to provide growth capital to younger companies, which is likely to alter the balance of the portfolio of the Company over a number of years. The UK Government has also announced an intention to permit VCTs to provide some replacement capital finance within investments, subject to agreement with the EU State Aid authorities. If this comes to pass, it would enlarge the pool of possible investment opportunities for VCTs compared to the more restricted regime that now applies under the new VCT Rules.
How could these changes affect returns?
The change in focus to investments in younger, smaller companies requiring growth (and possibly replacement) capital carries a higher risk, but also the prospect of higher, but more variable, returns. Generating the level of consistently high returns achieved over the last six years in particular is likely to be more challenging.
Shareholders should note that the nature of the more restrictive range and size of new potential investments is likely to reduce gradually the overall income yield on the portfolio as a whole, although there should be a commensurate increase in the level of capital returns albeit with a more volatile profile. However, shareholders should note that the existing portfolio is comprised almost exclusively of MBO investments whose full potential should be realised over the next five years or so and thus changes to the balance of the portfolio and therefore to the risk and reward metrics are likely to be gradual.
Previously, the Board has set a minimum average return target of 8% per annum that the Company should achieve. The Board is now considering an appropriate target to take account of the changed circumstances outlined above.
How is the Company responding?
Your Board has questioned the Investment Adviser on its ability to comply with the new rules. The Board is pleased to note that recruitment of two senior hires with extensive experience of growth capital has already taken place and further recruitment is planned. The Board has confidence in the Investment Adviser, justified by the past strong returns to shareholders, being able to adapt its investment approach to the new rules so as to generate attractive returns in the future.
Changes to the Investment Policy
The new VCT legislation above requires revisions to this VCT's current Investment Policy (the "Policy") which, in turn, will require the approval by shareholders of an ordinary resolution that will be proposed at the Annual General Meeting. Although the proposed changes to the Policy appear substantial, the underlying investment methodology remains broadly similar with one principal exception. The current Investment Policy makes particular reference to investing in MBO transactions, which we propose to remove as VCTs are no longer permitted to fund them.
The current policy also includes some of the key specific VCT legislative requirements, which we propose are removed, to be replaced by an intent that every investment will meet the requirements of prevailing VCT legislation. This should reduce the requirement to amend the Policy, which can be a costly and time-consuming process, each time VCT legislation changes.
The proposed Policy retains flexibility to enable the Board and the Investment Adviser to consider a wide range of opportunities amongst established businesses to provide growth capital under the new VCT legislative environment. These amendments should also ensure that your Company complies with the new EU State Aid Rules and thereby continues to retain its VCT qualifying status. The potential impact of the changes on the VCT's portfolio and investment risk is set out under Industry developments above.
Further details of the proposed changes to the Policy itself are contained in the Directors' Report, in the Annual Report, explaining the ordinary resolution to approve a revised Policy. The Board strongly recommends that shareholders approve the resolution. If the resolution is not approved, the Company is unlikely to continue to operate under current VCT regulations, and the Board will need to explore alternative strategies which may have a substantial impact on the Company and its shareholders.
Your Directors continue to work closely with Mobeus and our other professional advisers to understand the full implications of the new rules, so as to apply the revised Policy at a practical level. There remain many detailed points to be clarified in interpreting the new legislation. The draft VCT Guidance published by HMRC in May has provided some clarification in respect of the application of the new rules, which the Investment Adviser is now reviewing. Practical experience in applying the Guidance to particular transactions, once the former is finalised, will also be needed.
Share buybacks
During the year ended 31 March 2016, the Company bought back 1.1% (2015: 2.2%) of its share capital in issue at the beginning of the year, maintaining an average discount of 10%. Further details are included in the Strategic Report and the Directors' Report in the Annual Report.
Liquidity
At 31 March 2016, net assets were £43.14 million (2015: £42.10 million), comprising principally £22.60 million (2015: £19.97 million) in investments (52.3% of net assets (2015: 47.4 %)) and liquidity of £20.44 million (2015: £22.12 million) (47.4% of net assets (2015: 52.5%)). £6.74 million (2015: £2.38 million) of this liquidity was invested in companies preparing to trade. This factor explains why the return on the investment portfolio of 12.6% for the year exceeds the NAV return of 7.9%.
These figures indicate a relatively high level of liquidity currently held by the Company, bolstered by last year's fundraising and substantial realisation proceeds over the last two years. The Board is conscious that this level of liquidity may reduce overall returns in the short term, until further sums are applied to new investments. The unexpected changes in the VCT Rules are likely to slow down the rate of new investment initially. In the meantime, the Company continues to seek opportunities to increase returns on its liquid assets without compromising the overriding requirement that any risk to the liquid assets within the portfolio be minimised. Of the liquidity above, £7.38 million is spread across deposit and term accounts at four UK banks and £13.06 million is held in a selection of money market funds with AAA credit ratings.
Fundraising
Having considered the level of liquidity above, the Board has concluded that there is no need to raise further funds in the current tax year.
Industry awards for the Investment Adviser
Your Board is pleased to see the Investment Adviser, once again, winning significant industry awards. The Investment Adviser was named VCT House of the Year for the fourth consecutive year at the unquote" British Private Equity Awards 2015 and also received the award for Exit of the Year for Focus Pharmaceuticals. In addition, Mobeus was named VCT Manager of the Year by Investor Allstars. These three awards recognised again the continuing high level of performance achieved by the Investment Adviser in all areas of its activity including deals, exits, portfolio management and fundraising.
Annual General Meeting
The Annual General Meeting of the Company will be held at 11.00 am on Thursday, 15 September 2016 at 33 St James's Square, London SW1Y 4JS. Both the Board and the Investment Adviser look forward to welcoming shareholders to the meeting which will provide shareholders with the opportunity to ask questions and to receive a presentation from the Investment Adviser on the investment portfolio. The Notice of the meeting is included on pages 72 to 74 of the Annual Report, which includes a resolution approving the proposed changes in the Investment Policy, which I referred to above under "Changes to the Investment Policy".
Shareholder Communications
The annual shareholder event was held on Tuesday 26 January 2016 at the Royal Institute of British Architects in central London. This annual event included presentations on the Mobeus advised VCTs' investment activity and performance including presentations by the Chief Executives of Jablite and Plastic Surgeon. There were separate day-time and evening sessions, and feedback from those who attended found it informative and worthwhile.
A similar event will be held on 24 January 2017 once again at the Royal Institute of British Architects in central London. Further details and an invitation will be sent to shareholders in due course.
Future prospects
A number of global uncertainties continue to overshadow investment markets, which in turn could affect the VCT.
As indicated, we are proposing changes to the Company's current Investment Policy at the forthcoming AGM to ensure full compliance with the provisions of the UK Finance (No 2) Act 2015. There may be a reduction in the level of new investment in the shorter term while the Investment Adviser identifies opportunities that comply with the requirements of the new legislation.
The Company and its Investment Adviser are confident that they will be able to adjust to the changes in VCT regulation introduced by the UK Finance (No 2) Act 2015, and still produce attractive returns in the future. The existing portfolio continues to perform well and to provide a good foundation for future performance.
Finally, I would like to express my thanks to all shareholders for their continuing support of the Company.
Nigel Melville
Chairman
23 June 2016
Investment Review
Portfolio review
This has been another positive year for the investment portfolio. The market continued to provide a healthy pipeline of good investment opportunities and conditions have remained favourable for both new investment and realisations. The portfolio is performing well, demonstrated by the fact that the valuation of the portfolio as a whole has increased by 12.6% during the year on a like-for-like basis*. The portfolio continues to be cash generative and many companies made partial repayments of their loan stock during the year.
Investments are spread across a number of sectors, primarily in support services, general retailers, media and fixed line telecommunications and software and computer services.
The Company made four new and two follow-on investments in the year, investing £4.51 million in total. Realisations totalled £5.00 million, the highlight being the sale of Tessella in December 2015. This realised cash proceeds of £2.10 million, and a gain over current cost of £1.39 million, being 3.85 pence per share. Total proceeds over the life of the investment were £2.55 million, representing a return of 2.8 times the original cost of the investment of £0.91 million, over the three and a half years that this investment was held.
Further proceeds from several investments sold in previous years totalled £0.84 million. Finally, £2.06 million, comprising loan repayments from companies held within the portfolio, make up the balance of total net realisation proceeds of £5.00 million.
Further details of the portfolio transactions above are included later under New investment and Realisations.
Impact of changes in VCT Rules
The changes to VCT Rules, introduced by the UK Finance (No2) Act 2015, have required all VCTs to reconsider the type of investments that they can make in future. This process is not yet complete and we anticipate a phase of familiarisation with the practical application of the rules. The new environment in which your Company is now operating is better defined than it was when first announced (but further clarity is needed) and this will support the Company in applying its Investment Policy at a detailed level to be consistent with the new VCT Rules. It is hoped that finalisation of the draft guidance recently published by HMRC will also assist this process. Nevertheless we have been able to make two investments under the new rules, in Redline in February 2016, and in MPB Group Limited after the year end in June 2016.
In response to the changes, we also intend to recruit additional investment professionals, who will focus primarily upon growth capital transactions and supplement our current resources. Mobeus are pleased to have already recruited both a senior experienced individual to head up this team, and another senior experienced individual, who both have a good track record of profitable investments in the VCT growth capital sector.
Mobeus Equity Partners LLP
*"Like for like" basis is calculated by dividing the value of the portfolio at 31 March 2016 plus the proceeds of any realisations that occurred in the year less the total cost of new investments made in the year, with the portfolio valuation at 31 March 2015.
New investment
A total of £4.51 million was invested in new deals during the year under review. This included £4.19 million in new investments into Jablite, Tushingham, Access IS and Redline and £0.32 million in two follow-on investments in CGI Creative Graphics International and Racoon International.
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Principal new investments in the year
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Company |
Business |
Date of Investment |
Amount of new Investment (£m) |
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Jablite |
Expanded polystyrene products |
April 2015 |
0.84 * |
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Jablite is the UK's largest domestic manufacturer of Expanded Polystyrene products operating under two divisions manufacturing packaging (Styropack) and construction (Jablite) products. The business was acquired from its Dutch parent and operates from five production sites in the UK. For the year ended 31 December 2014, Jablite Limited and Styropack (UK) Limited generated annual sales of £32.83 million and £15.17 million respectively and profit before interest, tax and amortisation of goodwill of £2.01 million and £0.34 million respectively.
* £0.84 million was invested into Duncary 16, a company preparing to trade, on 2 April 2015. This enabled Duncary 16 to acquire Jablite on 23 April 2015. Duncary 16 has subsequently changed its name to Jablite Holdings Limited. |
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Tushingham Sails |
Supplier of watersports equipment |
July 2015 |
0.72* |
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Tushingham Sails is a supplier of sails to the UK windsurfing market. It has recently moved into the young and rapidly expanding watersport of stand-up paddleboarding, as the manufacturer of its own fast growing brand called Red Paddle. The Company's design ethos and historical market knowledge have enabled Tushingham to penetrate this world market and we are optimistic that its strong growth will continue. The Company had a turnover of £7.54 million and generated an adjusted profit before interest, tax and amortisation of goodwill of £1.08 million during the year ended 28 February 2015.
* £0.85 million was invested in Vian Marketing, a company preparing to trade, which acquired Tushingham Sails Limited. This resulted in a net repayment to the Company of £0.13 million. |
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Access IS |
Data capture and scanning hardware |
October 2015 |
1.95* |
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Redline Worldwide |
Provision of security products and services |
February 2016 |
0.68* |
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Redline Worldwide Limited ("Redline") is a market leader in the provision of security consultancy and training services to airlines, governments, institutions, airports and global distribution companies. Redline currently operates predominantly in the aviation security market and is at the forefront of counter terrorism training and services. The investment will be applied to enable the Company to grow in its core aviation market and in other sectors. The company's latest accounts for the year ended 31 March 2015 show turnover of £4.81 million and profit before interest, tax and amortisation of goodwill of £0.82 million. * £0.85 million invested in Pound FM Consultants Limited, a company preparing to trade, was used for this investment. This resulted in a net repayment of £0.17 million to the Company. Pound FM Consultants Limited has subsequently changed its name to Redline Worldwide Limited.
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New Investment after the year-end
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Company |
Business |
Date of Investment |
Amount of new Investment (£m) |
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MPB Group |
Online marketplace for used photo and video equipment |
June 2016 |
0.37 |
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MPB is Europe's leading online marketplace for used photo and video equipment. Based in Brighton, their custom-designed pricing technology enables MPB to offer both buy and sell services through the same platform and offers a one-stop shop for all its customers. The investment is to fund expansion of their platform globally, with launches into both the US and German markets. The company's latest audited accounts for the year ended 31 March 2015 show turnover of £7.49 million and profit before interest, tax and amortisation of goodwill of £0.30 million. |
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Company |
Business |
Date of Investment |
Amount of new Investment (£m) |
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CGI |
Producer of adhesive decorative graphics for vehicles |
June 2015 |
0.27 |
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CGI Creative Graphics International is a leading specialist provider of adhesive decorative graphics to the automotive, recreational vehicle and airline markets. It operates from two centres, in Bedford, England and Cape Town, South Africa. The VCT made a further loan stock investment in June 2015 which had been negotiated at the time of the original investment in June 2014. The Company's latest audited accounts for the year ended 28 February 2015 show annual sales of £9.19 million and profits before interest, tax and amortisation of goodwill of £1.30 million. |
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Racoon International |
Hair extension, hair care products and training |
October 2015 |
0.05 |
|
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|
Racoon International is a premier supplier of ethically sourced hair for hair extensions. A small further investment had been made in January 2015 with the expectation that this, together with the appointment of a successful sales-orientated Mobeus operating partner to the management team of the business, will add value to a previously unsuccessful investment. A further £0.05 million was advanced in October 2015 to provide working capital. Racoon has a £1.57 million turnover and generated profit before interest, tax and amortisation of goodwill in the year ended 31 March 2015 of £0.01 million. |
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The VCT also invested a further £4.25 million into new companies preparing to trade, in April 2015 and a further investment of £1.00 million into an existing company preparing to trade, in July 2015.
Realisations As noted in the portfolio review above, the sale of Tessella Holdings Limited generated attractive returns, realising sale proceeds in the year totalling £2.10 million. Other capital receipts were £0.84 million being a further consideration of £0.68 million received in respect of investments realised in earlier periods, most notably Focus Pharma (£0.37 million), Monsal Holdings (£0.09 million) and Youngman (£0.07 million), and £0.16 million from Newquay Helicopters (2013) Limited, as interim distributions resulting from the members' voluntary liquidation of the company. With the loan repayments of £2.06 million (listed below), total net cash proceeds for the year amounted to £5.00 million.
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Company |
Business |
Period of investment |
Total cash proceeds over the life of investment/ Multiple over cost |
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Tessella |
Science powered technology and consulting services |
July 2012 - December 2015 |
£2.55 million |
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|
The VCT sold its investment in Tessella to the French engineering consultancy, Altran Group plc for £2.10 million. Founded in 1980, Tessella is now a global business. In 2011 the company received the prestigious Queen's Award for Enterprise in innovation for its work on preserving the integrity of digital information over long periods of time, irrespective of numerous changes in technology. As part of the sale transaction, the Company has retained a small investment in this data archiving business, Preservica, which was previously held within Tessella. The sale returned an IRR of 42% and during the three and a half years of this investment, revenue has increased by 43% from £18.5 million in 2012 to £26.5 million forecast for the current financial year.
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Loan stock repayments
Loan stock repayments totalled £2.74 million for the year, including £0.68 million as part of the proceeds from the Tessella realisation above. Positive cash flow at four other companies contributed to the balance of £2.06 million, summarised below:-
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Company |
Business |
Month |
Amount (£000's) |
||||||||
|
|
Leap New Co (Ward Thomas) |
Logistics, storage and removals business |
May-January |
849 |
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|
|
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|
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Jablite |
Expanded polystyrene products |
May-November |
730 |
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|
|
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|
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Motorclean |
Vehicle cleaning and valeting services |
April-February |
251 |
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|
|
|
|
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|
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Vian Marketing |
Company preparing to trade |
July |
131 |
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|
|
|
|
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Tessella |
Consultancy services |
June-September |
50 |
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|
|
|
|
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|
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Pound FM Consultants |
Company preparing to trade |
February |
46 |
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|
|
|
|
|
|
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|
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Total |
|
|
2,057 |
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Investment Portfolio Summary
as at 31 March 2016
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Total Book cost at 31 March 2016 |
Valuation at 31 March 2015 |
Additions at cost |
Disposals at valuation |
Valuation at 31 March 2016 |
Change in valuation for year |
% of net assets by value |
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£ |
£ |
£ |
£ |
£ |
£ |
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Qualifying investments |
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Unquoted investments |
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ASL Technology Holdings Limited Printer and photocopier services |
December 2010 Support services |
2,092,009 |
2,394,873 |
- |
- |
2,397,086 |
2,213 |
5.6% |
|
|
Entanet Holdings Limited Wholesale voice and data communications provider |
February 2014 Fixed Line Telecommunications |
1,444,090 |
2,180,042 |
- |
- |
2,045,102 |
(134,940) |
4.7% |
|
|
Virgin Wines Holding Company Limited Online wine retailer |
November 2013 General retailers |
1,284,333 |
1,374,970 |
- |
- |
1,886,136 |
511,166 |
4.4% |
|
|
Tovey Management Limited (trading as Access IS)1 Provider of data capture and scanning hardware |
October 2015 Software and Computer Services |
1,733,500 |
885,000 |
848,500 |
- |
1,733,500 |
- |
4.0% |
|
|
Manufacturing Services Investment Limited Company seeking to carry on a business in the manufacturing sector |
February 2014 Support services |
1,608,300 |
608,000 |
1,000,300 |
- |
1,608,300 |
- |
3.7% |
|
|
Fullfield Limited (trading as Motorclean Limited) Vehicle cleaning and valet services |
July 2011 Support services |
1,025,152 |
930,735 |
- |
251,452 |
1,281,548 |
602,265 |
3.0% |
|
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Tharstern Group Limited Software based management information systems to the print sector |
July 2014 Software and Computer Services |
789,815 |
789,815 |
- |
- |
977,681 |
187,866 |
2.3% |
|
|
Veritek Global Holdings Limited Maintenance of imaging equipment |
July 2013 Support services |
967,780 |
1,089,947 |
- |
- |
974,052 |
(115,895) |
2.2% |
|
|
Media Business Insight Holdings Limited (formerly South West Services Investment Limited) A publishing and events business focused on the creative production industries |
January 2015 Media |
1,447,188 |
1,447,188 |
- |
- |
910,360 |
(536,828) |
2.1% |
|
|
CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets |
June 2014 General Industrials |
999,568 |
731,032 |
268,536 |
- |
889,634 |
(109,934) |
2.1% |
|
|
Hollydale Management Limited Company seeking to carry on a business in the food sector |
March 2015 Support Services |
885,000 |
885,000 |
- |
- |
885,000 |
- |
2.0% |
|
|
Backhouse Management Limited Company seeking to carry on a business in the motor sector |
April 2015 Support Services |
848,500 |
- |
848,500 |
- |
848,500 |
- |
2.0% |
|
|
Barham Consulting Limited Company seeking to carry on a business in the catering sector |
April 2015 Support Services |
848,500 |
- |
848,500 |
- |
848,500 |
- |
2.0% |
|
|
Chatfield Services Limited Company seeking to carry on a business in the retail sector |
April 2015 Support Services |
848,500 |
- |
848,500 |
- |
848,500 |
- |
2.0% |
|
|
Creasy Marketing Services Limited Company seeking to carry on a business in the textile sector |
April 2015 Support Services |
848,500 |
- |
848,500 |
- |
848,500 |
- |
2.0% |
|
|
McGrigor Management Limited Company seeking to carry on a business in the pharmaceutical sector |
April 2015 Support Services |
848,500 |
- |
848,500 |
- |
848,500 |
- |
2.0% |
|
|
EOTH Limited (trading as Rab and Lowe Alpine) Branded outdoor equipment and clothing |
October 2011 General retailers |
817,185 |
915,779 |
- |
- |
842,686 |
(73,093) |
2.0% |
|
|
Turner Topco Limited (trading as ATG Media) Publisher and online auction platform operator |
October 2008 Media |
1,320,963 |
1,317,247 |
- |
- |
798,686 |
(518,561) |
1.8% |
|
|
Jablite Holdings Limited (formerly Duncary 16 Limited)2 Manufacturer of expanded polystyrene products |
April 2015 Construction and materials |
312,091 |
- |
840,015 |
527,924 |
788,021 |
475,930 |
1.8% |
|
|
The Plastic Surgeon Holdings Limited Snagging and finishing of domestic and commercial properties |
April 2008 Support services |
392,348 |
511,002 |
84 |
- |
767,053 |
255,967 |
1.8% |
|
|
Gro-Group Holdings Limited Baby sleep products |
March 2013 General retailers |
1,123,088 |
695,892 |
- |
- |
751,930 |
56,038 |
1.7% |
|
|
Blaze Signs Holdings Limited Manufacturing and installation of signs |
April 2006 Support services |
437,030 |
816,333 |
- |
- |
738,939 |
(77,394) |
1.7% |
|
|
Vian Marketing Limited (trading as Tushingham Sails)3 Design, manufacture and sale of stand-up paddleboards and windsurfing sails |
July 2015 Leisure goods |
717,038 |
- |
848,500 |
131,462 |
717,038 |
- |
1.7% |
|
|
Redline Worldwide Limited (formerly Pound FM Consultants)4 Provider of security services to the aviation industry |
February 2016 Support services |
682,222 |
- |
848,500 |
166,278 |
682,222 |
- |
1.6% |
|
|
RDL Corporation Limited Recruitment consultants for the pharmaceutical, business intelligence and IT industries |
October 2010 Support services |
1,000,000 |
607,325 |
- |
- |
669,057 |
61,732 |
1.5% |
|
|
Bourn Bioscience Limited Management of In-vitro fertilisation clinics |
January 2014 Healthcare Equipment & Services |
757,101 |
607,329 |
- |
- |
626,517 |
19,188 |
1.4% |
|
|
Leap New Co Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van)5 A specialist logistics, storage and removals business |
December 2014 Support services |
369,625 |
1,221,841 |
- |
852,216 |
534,927 |
165,302 |
1.2% |
|
|
Vectair Holdings Limited Designer and distributor of washroom products |
January 2006 Support services |
60,293 |
190,542 |
- |
- |
271,156 |
80,614 |
0.6% |
|
|
Racoon International Holdings Limited Supplier of hair extensions, hair care products and training |
December 2006 Personal goods |
1,045,985 |
119,613 |
47,845 |
- |
167,458 |
- |
0.4% |
|
|
Newquay Helicopters (2013) Limited (in members' voluntary liquidation) Helicopter service operators |
June 2006 Support services |
66,169 |
226,000 |
- |
159,831 |
66,169 |
- |
0.2% |
|
|
Lightworks Software Limited Provider of software for CAD and CAM vendors |
April 2006 Software and Computer Services |
25,727 |
60,279 |
- |
- |
65,592 |
5,313 |
0.1% |
|
|
Preservica Limited6 Seller of proprietary digital archiving software |
December 2015 Software and Computer Services |
- |
- |
- |
- |
- |
- |
0.0% |
|
|
PXP Holdings Limited (no longer trading) Design, manufacture and supply of timber frames for buildings |
December 2006 Construction and materials |
1,220,579 |
- |
- |
- |
- |
- |
0.0% |
|
|
Tessella Holdings Limited Provider of science powered technology and consulting services |
July 2012 Support services |
- |
1,179,963 |
- |
1,179,963 |
- |
- |
0.0% |
|
|
Total unquoted investments |
|
28,866,679 |
21,785,747 |
8,944,780 |
3,269,126 |
28,318,350 |
856,949 |
65.6% |
|
|
AIM quoted investments |
|
|
|
|
|
|
|
|
|
|
365 Agile Group plc (formerly Iafyds plc) Development of energy saving devices for domestic use |
March 2001 Electronic and electrical equipment |
254,586 |
- |
- |
- |
8 |
8 |
0.0% |
|
|
Total AIM quoted investments |
|
254,586 |
- |
- |
- |
8 |
8 |
0.0% |
|
|
Total qualifying investments |
|
29,121,265 |
21,785,747 |
8,944,780 |
3,269,126 |
28,318,358 |
856,957 |
65.6%7 |
|
|
Non-qualifying investments |
|
|
|
|
|
|
|
|
|
|
Media Business Insight Limited |
as above |
561,884 |
561,884 |
- |
- |
794,824 |
232,940 |
1.8% |
|
|
Tovey Management Limited (trading as Access IS)8 |
as above |
219,873 |
- |
219,873 |
- |
219,873 |
- |
0.5% |
|
|
Century 3370 plc (formerly Fuse 8 plc) Promotional goods and services agency |
March 2004 Support Services |
250,000 |
- |
- |
- |
- |
- |
0.0% |
|
|
Total non-qualifying investments |
|
1,031,757 |
561,884 |
219,873 |
- |
1,014,697 |
232,940 |
2.3% |
|
|
Total investments per note 8, page 54 of the Annual Report |
|
30,153,022 |
22,347,631 |
9,164,653 |
3,269,126 |
29,333,055 |
1,089,897 |
67.9% |
|
|
Cash and current asset investments9 |
|
13,702,539 |
19,739,427 |
- |
- |
13,702,539 |
|
31.8% |
|
|
Total investments including cash and current asset investments |
|
43,855,561 |
42,087,058 |
9,164,653 |
3,269,126 |
43,035,594 |
1,089,897 |
99.7% |
|
|
Other assets |
|
266,308 |
180,065 |
|
|
266,308 |
|
0.6% |
|
|
Current liabilities |
|
(160,890) |
(164,306) |
|
|
(160,890) |
|
(0.3)% |
|
|
Totals |
|
43,960,979 |
|
9,164,653 |
3,269,126 |
|
|
|
|
|
Net assets at the year end |
|
|
42,102,817 |
|
|
43,141,012 |
|
100.0% |
|
1 £848,500 invested in Tovey Management Limited, a company preparing to trade, was used to acquire Knighton Management Limited, a company preparing to trade held at 31 March 2015, and Access IS, on 2 October 2015. 2 £840,015 was invested into Duncary 16 Limited on 2 April 2015, a company preparing to trade. This enabled Duncary 16 to acquire Jablite on 23 April 2015. Duncary 16 has subsequently changed its name to Jablite Holdings Limited. 3 £717,038 invested in Vian Marketing Limited, a company preparing to trade, was used to acquire Tushingham Sails Limited. This resulted in a net repayment to the Company of £131,462. 4 £682,222 invested in Pound FM Consultants Limited, a company preparing to trade, was used for the investment into Redline Assured Security Limited ("Redline"). This resulted in a net repayment to the Company of £166,278. Pound FM Consultants Limited subsequently changed its name to Redline Worldwide Limited. 5 On 31 July 2015, Leap New Co Limited (trading as Ward Thomas and Bishopsgate) acquired Aussie Man & Van Limited via a share for share exchange plus a small amount of cash. The figures represent the combined holding which was the position at 31 March 2016. 6 The Company realised its investment in Tessella Holdings Limited in December 2015. As part of the consideration, in addition to cash, the Company received a small share holding in Preservica Limited, a subsidiary of Tessella Holdings that was demerged as part of the transaction. The fair value of the holding received was deemed to be zero at the date of the transaction and therefore, the investment cost is zero. 7 As at 31 March 2016, the Company held more than 70% of its total investments in qualifying holdings, and therefore complied with the VCT Qualifying Investment test. For the purposes of the VCT qualifying test, the Company is permitted to disregard disposals of investments for six months from the date of disposal. It also has up to three years to bring in new funds raised, before these need to be included in the qualifying investment test. 8 The Company also advanced a non-qualifying loan of £219,873 to Access IS Limited on 20 October 2015. 9 Disclosed as Current asset investments and Cash at bank within Current assets in the Balance Sheet on page 43 of the Annual Report. |
|||||||||
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year and the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.
In preparing these financial statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and accounting estimates that are reasonable and prudent;
● state whether the financial statements have been prepared in accordance with United Kingdom accounting standards, subject to any material departures disclosed and explained in the financial statements;
● prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;
● prepare a Strategic Report, a Directors' Report and Directors' Annual 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 financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority
The Directors confirm to the best of their knowledge that:
(a) The financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice give a true and fair view of the assets, liabilities, financial position and the profit of the Company.
(b) The Annual 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.
The Board considers that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A and schedule 10A of the Financial Services and Markets Act 2000.
The names and functions of the Directors are stated on page 25 of the Annual Report.
For and on behalf of the Board
Nigel Melville
Chairman
23 June 2016
FINANCIAL STATEMENTS
Income Statement
for the year ended 31 March 2016
|
|
|
Year ended 31 March 2016 |
Year ended 31 March 2015 |
||||
|
|
Notes |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
Unrealised gains/(losses) on investments |
8 |
- |
1,089,897 |
1,089,897 |
- |
(1,032,124) |
(1,032,124) |
|
Realised gains on investments |
8 |
- |
1,732,241 |
1,732,241 |
- |
4,618,332 |
4,618,332 |
|
Income |
3 |
1,736,490 |
- |
1,736,490 |
1,901,055 |
- |
1,901,055 |
|
Investment Adviser's fees |
4a |
(246,651) |
(739,953) |
(986,604) |
(222,228) |
(666,684) |
(888,912) |
|
Other expenses |
4b |
(302,518) |
- |
(302,518) |
(293,602) |
- |
(293,602) |
|
|
|
|
|
|
|
|
|
|
Profit on ordinary activities before taxation |
|
1,187,321 |
2,082,185 |
3,269,506 |
1,385,225 |
2,919,524 |
4,304,749 |
|
Taxation on profit on ordinary activities |
5 |
(147,991) |
147,991 |
- |
(140,960) |
140,960 |
- |
|
|
|
|
|
|
|
|
|
|
Profit for the year and total comprehensive income |
|
1,039,330 |
2,230,176 |
3,269,506 |
1,244,265 |
3,060,484 |
4,304,749 |
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per ordinary share: |
7 |
2.86p |
6.14p |
9.00p |
4.02p |
9.88p |
13.90p |
|
|
|
|
|
|
|
|
|
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains and realised gains on investments and the proportion of the Investment Adviser's fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the Statement of Recommended Practice ("SORP") issued in November 2014 by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year.
Balance Sheet
as at 31 March 2016
Company number: 03946235
|
|
|
|
|
|
|
|
31 March 2016 |
31 March 2015 |
|
|
Notes |
£ |
£ |
|
|
|
|
|
|
Fixed assets |
|
|
|
|
Investments at fair value |
8 |
29,333,055 |
22,347,631 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Debtors and prepayments |
|
266,308 |
180,065 |
|
Current asset investments |
|
9,337,621 |
8,227,301 |
|
Cash at bank |
|
4,364,918 |
11,512,126 |
|
|
|
|
|
|
|
|
13,968,847 |
19,919,492 |
|
|
|
|
|
|
Creditors: amounts falling due within one year |
|
(160,890) |
(164,306) |
|
|
|
|
|
|
Net current assets |
|
13,807,957 |
19,755,186 |
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
43,141,012 |
42,102,817 |
|
|
|
|
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
Called up share capital |
|
360,685 |
364,686 |
|
Share premium reserve |
|
15,901,497 |
15,901,497 |
|
Capital redemption reserve |
|
83,622 |
79,621 |
|
Revaluation reserve |
|
1,783,724 |
1,116,647 |
|
Special distributable reserve |
|
8,524,729 |
9,537,078 |
|
Realised capital reserve |
|
15,529,419 |
14,279,820 |
|
Revenue reserve |
|
957,336 |
823,468 |
|
|
|
|
|
|
Equity shareholders' funds |
|
43,141,012 |
42,102,817 |
|
|
|
|
|
|
Basic and diluted net asset value per ordinary share |
|
119.61p |
115.45p |
|
|
|
|
|
Statement of Changes in Equity
for the year ended 31 March 2016
|
|
|
|
|
|||||
|
|
Non-distributable reserves |
Distributable reserves |
Total |
|||||
|
Called up share capital |
Share premium reserve |
Capital redemption reserve |
Revaluation reserve |
Special distributable reserve |
Realised capital reserve |
Revenue Reserve |
||
|
|
|
|
|
|
(Note a) |
(Note b) |
(Note b) |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2015 |
364,686 |
15,901,497 |
79,621 |
1,116,647 |
9,537,078 |
14,279,820 |
823,468 |
42,102,817 |
|
Comprehensive income for the year |
|
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
1,089,897 |
- |
1,140,279 |
1,039,330 |
3,269,506 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
1,089,897 |
- |
1,140,279 |
1,039,330 |
3,269,506 |
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
- |
|
Shares bought back (note c) |
(4,001) |
- |
4,001 |
- |
(420,387) |
- |
- |
(420,387) |
|
Dividends paid |
- |
- |
- |
- |
- |
(905,462) |
(905,462) |
(1,810,924) |
|
|
|
|
|
|
|
|
|
|
|
Total contributions by and distributions to owners |
(4,001) |
- |
4,001 |
- |
(420,387) |
(905,462) |
(905,462) |
(2,231,311) |
|
|
|
|
|
|
|
|
|
|
|
Other movements |
|
|
|
|
|
|
|
|
|
Realised losses transferred to special reserve (note a) |
- |
- |
- |
- |
(591,962) |
591,962 |
- |
- |
|
Realisation of previously unrealised appreciation |
- |
- |
- |
(422,820) |
- |
422,820 |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
Total other movements |
- |
- |
- |
(422,820) |
(591,962) |
1,014,782 |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2016 |
360,685 |
15,901,497 |
83,622 |
1,783,724 |
8,524,729 |
15,529,419 |
957,336 |
43,141,012 |
|
|
|
|
|
|
|
|
|
|
Notes
a): The cancellation of the formerly named C Share Fund's share premium account (as approved at the Extraordinary General meeting held on 10 September 2008 and by the order of the Court dated 28 October 2009), together with the previous cancellation of the share premium account attributable to the former Ordinary Share Fund and C Shares, has provided the Company with a special distributable reserve. The purpose of this reserve is to fund market purchases of the Company's own shares as and when it is considered by the Board to be in the interests of the Shareholders, and to write-off existing and future losses as the Company must take into account capital losses in determining distributable reserves. The total transfer of £591,962 from the special distributable reserve to the realised capital reserve above is the total of realised losses incurred by the Company in the year.
b): The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company.
c): During the year, the Company purchased 400,169 of its own shares at the prevailing market price for a total cost of £420,387, which were subsequently cancelled. The difference between the total cost above of £420,387 and that per the Statement of Cash Flows of £376,756 is due to a share buyback creditor at 31 March 2016 of £43,631.
The composition of each of these reserves is explained below:
Called up share capital
The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for Subscription or reduced due to shares bought back by the Company.
Capital redemption reserve
The nominal value of shares bought back and cancelled is held in this reserve, so that the company's capital is maintained.
Share premium reserve
This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under Offers for Subscription in 2014 and 2015.
Revaluation reserve
Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent. In accordance with stating all investments at fair value through profit and loss (as recorded in note 8), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
Special distributable reserve
The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve.
Realised capital reserve
The following are accounted for in this reserve:
· Gains and losses on realisation of investments;
· Permanent diminution in value of investments;
· Transaction costs incurred in the acquisition and disposal of investments;
· 75% of the Investment Adviser's fee and 100% of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies; and
· Capital dividends paid.
Revenue reserve
Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
Statement of Changes in Equity
for the year ended 31 March 2015
|
|
|
|
|
|||||
|
|
Non-distributable reserves |
Distributable reserves |
Total |
|||||
|
Called up share capital |
Share Premium reserve |
Capital redemption reserve |
Revaluation reserve |
Special distributable reserve |
Realised capital reserve |
Revenue Reserve |
||
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2014 |
280,621 |
5,363,551 |
73,413 |
5,930,144 |
11,565,499 |
10,099,137 |
566,014 |
33,878,379 |
|
Comprehensive income for the year |
|
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
(1,032,124) |
- |
4,092,608 |
1,244,265 |
4,304,749 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
(1,032,124) |
- |
4,092,608 |
1,244,265 |
4,304,749 |
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
- |
|
Shares issued via Linked Offer for Subscription |
90,273 |
10,537,946 |
- |
- |
(45,871) |
- |
- |
10,582,348 |
|
Shares bought back |
(6,208) |
- |
6,208 |
- |
(652,628) |
- |
- |
(652,628) |
|
Dividends paid |
- |
- |
- |
- |
- |
(5,023,220) |
(986,811) |
(6,010,031) |
|
|
|
|
|
|
|
|
|
|
|
Total contributions by and distributions to owners |
84,065 |
10,537,946 |
6,208 |
- |
(698,499) |
(5,023,220) |
(986,811) |
3,919,689 |
|
|
|
|
|
|
|
|
|
|
|
Other movements |
|
|
|
|
|
|
|
- |
|
Realised losses transferred to special reserve |
- |
- |
- |
- |
(1,329,922) |
1,329,922 |
- |
- |
|
Realisation of previously unrealised appreciation |
- |
- |
- |
(3,781,373) |
- |
3,781,373 |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
Total other movements |
- |
- |
- |
(3,781,373) |
(1,329,922) |
5,111,295 |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2015 |
364,686 |
15,901,497 |
79,621 |
1,116,647 |
9,537,078 |
14,279,820 |
823,468 |
42,102,817 |
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows
for the year ended 31 March 2016
|
|
|
|
|
|
|
Notes
|
Year ended 31 March 2016 £ |
Year ended 31 March 2015 £ |
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
Profit for the financial year |
|
3,269,506 |
4,304,749 |
|
Adjustments for: |
|
|
|
|
Net unrealised (gains)/losses on investments |
|
(1,089,897) |
1,032,124 |
|
Net gains on realisations on investments |
|
(1,732,241) |
(4,618,332) |
|
(Increase)/decrease in debtors |
|
(86,327) |
216,588 |
|
(Decrease)/increase in creditors and accruals |
|
(47,047) |
54,945 |
|
|
|
|
|
|
Net cash inflow from operating activities |
|
313,994 |
990,074 |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchase of investments |
8 |
(9,164,569) |
(7,374,456) |
|
Disposal of investments |
8 |
5,001,367 |
13,145,958 |
|
Increase in bank deposits with a maturity over three months |
|
(7,061) |
(500,000) |
|
|
|
|
|
|
Net cash (outflow)/inflow from investing activities |
|
(4,170,263) |
5,271,502 |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Shares issued as part of Offer for subscription |
|
- |
12,782,668 |
|
Equity dividends paid |
6 |
(1,810,924) |
(6,010,031) |
|
Purchase of own shares |
|
(376,756) |
(680,302) |
|
|
|
|
|
|
Net cash (outflow)/inflow from financing activities |
|
(2,187,680) |
6,092,335 |
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(6,043,949) |
12,353,911 |
|
Cash and cash equivalents at start of year |
|
19,239,427 |
6,885,516 |
|
|
|
|
|
|
Cash and cash equivalents at end of the year |
|
13,195,478 |
19,239,427 |
|
|
|
|
|
|
Cash and cash equivalents comprise: |
|
|
|
|
Cash equivalents |
|
8,830,560 |
7,727,301 |
|
Cash at bank and in hand |
|
4,364,918 |
11,512,126 |
|
|
|
|
|
Notes to the Financial Statements
for the year ended 31 March 2016
1 Company Information
Mobeus Income and Growth 2 VCT plc is a public limited company incorporated in England, registration number 03946235. The registered office is 30 Haymarket, London, SW1Y 4EX.
2 Basis of preparation
A summary of the principal accounting policies, all of which have been applied consistently throughout the year, are set out at the start of the related disclosure throughout the Notes to the Financial Statements within an outlined box.
These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, Financial Reporting Standard 102 ("FRS102"), with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Companies.
This is the first year in which the financial statements have been prepared under FRS102. There has been no material change in the accounting policies and so there has been no restatement of comparatives, other than in relation to Cash at bank and Current asset investments which was just a presentational change and had no effect on net assets. The Company has elected to apply early the revised disclosure requirements as set out in Amendments to FRS 102 - Fair Value hierarchy disclosures issued in March 2016.
3 Income
|
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain. When a redemption premium is designed to protect the value of the instrument holder's investment rather than reflect a commercial rate of revenue return the redemption premium is recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended 31 March 2016 has been classified as capital and has been included within realised gains on investments. |
|
|
|
|
|
|
2016 |
2015 |
|
|
£ |
£ |
|
|
|
|
|
Income from bank deposits |
49,237 |
29,815 |
|
|
|
|
|
Income from investments |
|
|
|
- from equities |
87,073 |
286,492 |
|
- from overseas based OEICs |
14,913 |
10,873 |
|
- from UK based OEICs |
6,493 |
4,811 |
|
- from loan stock |
1,578,774 |
1,566,646 |
|
|
|
|
|
|
1,687,253 |
1,868,822 |
|
Other income |
- |
2,418 |
|
|
|
|
|
Total income |
1,736,490 |
1,901,055 |
|
|
|
|
|
Total income comprises |
|
|
|
Dividends |
108,479 |
302,176 |
|
Interest |
1,628,011 |
1,596,461 |
|
Other |
- |
2,418 |
|
|
|
|
|
|
1,736,490 |
1,901,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
2015 |
|
|
£ |
£ |
|
|
|
|
|
Income from investments comprises |
|
|
|
Listed overseas securities |
14,913 |
10,873 |
|
Unlisted UK securities |
93,566 |
291,303 |
|
Loan stock interest |
1,578,774 |
1,566,646 |
|
|
1,687,253 |
1,868,822 |
|
Total loan stock interest due but not recognised in the year was £166,537 (2015: £103,565). |
4 Investment Adviser's fees and Other expenses
|
All expenses are accounted for on an accruals basis. |
a) Investment Adviser's fees and performance fees
|
25% of the Investment Adviser's fees are charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year is charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth. |
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
Investment Adviser's Fees |
246,651 |
739,953 |
986,604 |
222,228 |
666,684 |
888,912 |
|
|
|
|
|
|
|
|
Under the terms of a revised investment management agreement dated 10 September 2010, Mobeus Equity Partners LLP ("Mobeus") provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fee of £113,589 per annum, the latter being subject to changes in the retail prices index each year. In 2013, Mobeus has agreed to waive such further increases due to indexation, until otherwise agreed by the Board. In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 10 May 2000, the Directors have charged 75% of the investment management expenses to the capital account. This is in line with the Board's expectation of the long-term split of returns from the investment portfolio of the Company.
Under the terms of the management agreement the total Investment Adviser and administration expenses of the Company excluding any irrecoverable VAT, exceptional costs and any performance incentive fee, are linked to a maximum of 3.6% of the value of the Company's closing net assets. For the year ended 31 March 2016, the expense cap has not been breached (2015:£nil).
The Company is responsible for external costs such as legal and accounting fees, incurred on transactions that do not proceed to completion ("abort expenses") subject to the cap on total annual expenses referred to above.
In accordance with general market practice, the Investment Adviser earned arrangement fees and fees for supplying Directors and/or monitoring services from investee companies. The share of such fees attributable to the investments made by the Company were £111,903 (2015: £150,817) and £124,601 (2015: £136,277) respectively. The fees for supplying directors and/or monitoring services were from 26 (2015: 30) investee companies during the year. These figures are not part of these financial statements.
Performance incentive agreement
The following performance incentive fee agreement dated 20 September 2005 continues to be in place, and operated as detailed below:
New Ordinary and former C share fund shares
Basis of Calculation
The performance incentive fee payable is calculated as an amount equivalent to 20 per cent of the excess of a "Target rate" comprising:-
i) an annual dividend target (indexed each year for RPI) and
ii) a requirement that any cumulative shortfalls below the annual dividend target must be made up in later years. Any excess is not carried forward, whether a fee is payable for that year or not.
Payment of a fee is also conditional upon the average Net Asset Value ("NAV") per share for each such year equalling or exceeding the average "Base NAV" per share for the same year. Base NAV commenced at £1 per share when C fund shares were first issued in 2005, which is adjusted for subsequent shares issued and bought back.
Any performance fee will be payable annually. It will be reduced to the proportion which the number of "Incentive Fee Shares" represent of the total number of shares in issue at any calculation date. Incentive Fee Shares are the only shares upon which an incentive fee is payable. They will be the number of C fund shares in issue just before the Merger of the two former share classes on 10 September 2010, (which subsequently became Ordinary shares) plus Ordinary shares issued under new fundraisings since the Merger. This total is then reduced by an estimated proportion of the shares bought back by the Company since the Merger, that are attributable to the Incentive Fee Shares.
Position at 31 March 2016
The cumulative dividend shortfall at 31 March 2016 is 7.40p per share (£2,085,484 in aggregate, being 78.1% of the total shortfall) at the year-end (where 78.1% is the proportion of Incentive Fee Shares to the total number of shares in issue at the year-end date) and taking into account the target rate of dividends and the dividends paid to shareholders.
The 6p annual dividend hurdle was 7.32p per share at the year-end after adjustment for RPI. The Base NAV was 106.12p per share at the year-end and an average of 106.11p for the year, compared to an average NAV for the year of 119.62p.
Accordingly, no Incentive payment is payable for the year, as there is a cumulative dividend shortfall at the year-end of 7.40p per share.
Clarifications in the year
The Board and the Investment Adviser have agreed to confirm and clarify in more detail a number of principles and interpretations applied to the Agreement. The principal ones are reflected in the paragraphs above and explained below:-
First, the incentive payment is payable upon dividends paid in a year, not declared and paid in a year, as the original agreement stated. Secondly, the average NAV referred to above is calculated on a daily weighted average basis throughout the year. In turn, this average NAV is compared to a Base NAV that is also calculated on a daily weighted average basis throughout the year. Thirdly, the methodologies to account for new shares issued and buybacks of shares, their consequent impact upon the incentive fee calculations and to identify the proportion of Incentive Fee Shares upon which an incentive fee is payable, have been clarified.
Finally, it has been agreed that any excess of cumulative dividends paid over the cumulative annual dividend target is not carried forward, whether a fee is paid for that year or not.
These clarifications have been incorporated into the performance incentive agreement. The Board has been advised that, as these and a number of more minor clarifications, are clarifications of the Incentive Agreement, rather than changes to it, there is no need to seek shareholder approval for them.
b) Other expenses
|
Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are written off to the capital column of the Income Statement or deducted from the disposal proceeds as appropriate. |
|
|
|
|
|
|
2016 |
2015 |
|
|
£ |
£ |
|
|
|
|
|
Directors' remuneration (including NIC) (note a) |
97,080 |
92,614 |
|
IFA trail commission |
27,009 |
49,642 |
|
Broker's fees |
12,000 |
12,000 |
|
Auditors' fees - audit |
33,537 |
21,060 |
|
- tax compliance services (note b) |
4,448 |
2,160 |
|
- audit related assurance services (note b) |
5,720 |
5,580 |
|
Registrar's fees |
26,914 |
21,662 |
|
Printing |
24,194 |
34,357 |
|
Legal & professional fees |
6,091 |
8,772 |
|
VCT monitoring fees |
7,500 |
10,320 |
|
Director's insurance |
8,838 |
9,063 |
|
Listing and regulatory fees |
20,810 |
24,359 |
|
Sundry |
3,534 |
2,013 |
|
|
|
|
|
Running costs |
277,675 |
293,602 |
|
Provision against loan interest receivable (note c) |
24,843 |
- |
|
|
|
|
|
Other expenses |
302,518 |
293,602 |
|
|
|
|
a): See analysis in the Directors' emoluments table on page 32 of the Annual Report, which excludes the NIC above. The key management personnel are the four non-executive directors. The Company has no employees.
b): The Directors consider the Auditor was best placed to provide the other services disclosed above. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence is maintained.
c): Provision against loan interest receivable of £24,843 (2015: £nil) is a provision made against loan stock interest recognised in previous years.
5 Taxation on ordinary activities
|
The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date. Any tax relief obtained in respect of Investment Adviser fees allocated to capital is reflected in the capital reserve - realised and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is reduced as a result of these capital expenses. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in the tax assessments in periods different from those in which they are recognised in the Financial Statements. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis. A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilised. |
|
|
|
|
||||
|
|
2016 |
2015 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
a) Analysis of tax charge: |
|
|
|
|
|
|
|
UK Corporation tax on profits for the year |
147,991 |
(147,991) |
- |
140,960 |
(140,960) |
- |
|
|
|
|
|
|
|
|
|
Total current tax charge |
147,991 |
(147,991) |
- |
140,960 |
(140,960) |
- |
|
|
|
|
|
|
|
|
|
Corporation tax is based on a rate of 20% (2015: 20%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Profit on ordinary activities before tax |
1,187,321 |
2,082,185 |
3,269,506 |
1,385,225 |
2,919,524 |
4,304,749 |
|
Profit on ordinary activities multiplied by small company rate of corporation tax in the UK of 20% (2015: 20%) |
237,464 |
416,437 |
653,901 |
277,045 |
583,905 |
860,950 |
|
Effect of: |
|
|
|
|
|
|
|
UK dividends |
(17,414) |
- |
(17,414) |
(57,298) |
- |
(57,298) |
|
Unrealised gains not taxable |
- |
(217,979) |
(217,979) |
- |
206,425 |
206,425 |
|
Realised gains not taxable |
- |
(346,449) |
(346,449) |
- |
(923,666) |
(923,666) |
|
Marginal rate relief |
- |
- |
- |
7,624 |
(7,624) |
- |
|
Utilisation of losses on which deferred tax not recognised |
(72,059) |
- |
(72,059) |
(86,411) |
- |
(86,411) |
|
|
|
|
|
|
|
|
|
Actual tax charge |
147,991 |
(147,991) |
- |
140,960 |
(140,960) |
- |
|
|
|
|
|
|
|
|
Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised.
No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital Trust.
There is no potential liability to deferred tax (2015: £nil). There is an unrecognised deferred tax asset of £18,875 (2015: £90,934).
6 Dividends paid and payable
|
Dividends payable are recognised as distributions in the financial statements when the Company's liability to pay them has been established. This liability is established for interim dividends when they are paid, and for final dividends when they are approved by the shareholders, usually at the Company's Annual General Meeting. The Company's status as a VCT means it has to comply with Section 259 of the Income Tax Act 2007, which requires that no more than 15% of the income from shares and securities in a year can be retained from the revenue available for distribution for the year. Accordingly, the Board is required to determine the amount of minimum income dividend. |
|
|
|
|
||||
|
Amounts recognised as distributions to equity shareholders in the year: |
|
|
||||
|
Dividend |
Type |
For year ended 31 March |
Pence per share |
Date Paid |
2016 £ |
2015 £ |
|
|
|
|
|
|
|
|
|
Interim |
Capital |
2015 |
14.00p |
20/10/2014 |
- |
4,215,829 |
|
Interim |
Income |
2015 |
2.75p |
20/03/2015 |
- |
986,811 |
|
Interim |
Capital |
2015 |
2.25p |
20/03/2015 |
- |
807,391 |
|
Interim |
Income |
2016 |
2.50p |
18/03/2016 |
905,462 |
- |
|
Interim |
Capital |
2016 |
2.50p |
18/03/2016 |
905,462 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,810,924 |
6,010,031 |
|
|
|
|
|
|
|
|
Any proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of section 274 of the Income Tax Act 2007 are considered.
|
|
|
|
||||
|
Recognised income distributions in the financial statements for the year: |
|
|
||||
|
Dividend |
Type |
For year ended 31 March |
Pence per share |
Date Paid |
2016 £ |
2015 £ |
|
|
|
|
|
|
|
|
|
Revenue available for distribution by way of dividends for the year |
1,039,330 |
1,244,265 |
||||
|
|
|
|
|
|
|
|
|
Interim |
Income |
2015 |
2.75p |
20/03/2015 |
- |
986,811 |
|
Interim |
Income |
2016 |
2.50p |
18/03/2016 |
905,462 |
- |
|
|
|
|
|
|
|
|
|
Total income dividends for the year |
|
905,462 |
986,811 |
|||
|
|
|
|
|
|
|
|
The Board has declared a special interim dividend of 5.00 pence per share in respect of the year ending 31 March 2017, which is not reflected in any of the figures above.
7 Basic and diluted earnings per share
|
|
|
|
|
|
2016 |
2015 |
|
|
£ |
£ |
|
|
|
|
|
Total earnings after taxation: |
3,269,506 |
4,304,749 |
|
Basic and diluted earnings per share (note a) |
9.00p |
13.90p |
|
|
|
|
|
Net revenue earnings from ordinary activities after taxation |
1,039,330 |
1,244,265 |
|
Basic and diluted revenue earnings per share (note b) |
2.86p |
4.02p |
|
|
|
|
|
Unrealised capital gains/(losses) |
1,089,897 |
(1,032,124) |
|
Realised capital gains |
1,732,241 |
4,618,332 |
|
Capital expenses (net of taxation) |
(591,962) |
(525,724) |
|
|
|
|
|
Total capital earnings |
2,230,176 |
3,060,484 |
|
Basic and diluted capital earnings per share (note c) |
6.14p |
9.88p |
|
|
|
|
|
Weighted average number of shares in issue in the year |
36,312,815 |
30,966,734 |
|
|
|
|
Notes:
a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue.
c) Capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue.
d) There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted earnings.
8 Investments at fair value
|
The most critical estimates, assumptions and judgments relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as updated in December 2015. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEVCV guidelines: All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, each investment is considered as a whole on a 'unit of account' basis, alongside the following factors: (i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used. (ii) In the absence of i) and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:- a) an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability). or:- b) where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. (iii) Premiums that will be received upon repayment of loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable. (iv) Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied. A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value. None were identified in the year. |
Movements in investments during the year are summarised as follows:
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|
|
|
|
|
|
Traded on AIM |
Unquoted equity shares |
Unquoted preference shares |
Loan Stock |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
Cost at 31 March 2015 |
254,586 |
7,914,104 |
23,963 |
15,792,128 |
23,984,781 |
|
Permanent impairments at 31 March 2015 |
(254,586) |
(1,688,074) |
(739) |
(810,398) |
(2,753,797) |
|
Unrealised (losses)/gains at 31 March 2015 |
- |
(280,955) |
19,974 |
1,377,628 |
1,116,647 |
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|
|
|
|
|
|
|
Valuation at 31 March 2015 |
- |
5,945,075 |
43,198 |
16,359,358 |
22,347,631 |
|
|
|
|
|
|
|
|
Purchases at cost |
- |
2,969,664 |
170 |
6,194,819 |
9,164,653 |
|
Sale proceeds |
- |
(2,264,020) |
(1,000) |
(2,736,347) |
(5,001,367) |
|
Reclassification at value |
- |
(122,903) |
178 |
122,725 |
- |
|
Realised gains |
- |
1,530,455 |
- |
201,786 |
1,732,241 |
|
Unrealised gains/(losses) on investments |
8 |
194,782 |
(21,011) |
916,118 |
1,089,897 |
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|
|
|
|
|
|
|
Closing valuation at 31 March 2016 |
8 |
8,253,053 |
21,535 |
21,058,459 |
29,333,055 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost at 31 March 2016 |
254,586 |
10,176,306 |
23,311 |
19,698,819 |
30,153,022 |
|
Permanent impairments at 31 March 2016 (note a) |
(254,586) |
(1,537,968) |
(739) |
(810,398) |
(2,603,691) |
|
Unrealised gains/(losses) at 31 March 2016 |
8 |
(385,285) |
(1,037) |
2,170,038 |
1,783,724 |
|
|
|
|
|
|
|
|
Valuation at 31 March 2016 |
8 |
8,253,053 |
21,535 |
21,058,459 |
29,333,055 |
|
|
|
|
|
|
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A breakdown of the increases and the decreases in unrealised valuations of the portfolio is shown in the Investment Portfolio Summary on pages 18 to 20 of the Annual Report.
a) During the year, permanent impairments of the cost of investments have reduced from £2,753,797 to £2,603,691. The reduction of £150,106 is due to an investee company being dissolved in the year, which removes the cost and related impairment of this investment from these accounts.
Reconciliation of investment transactions to Statement of Cash Flows
Purchases above of £9,164,653 are greater than that reported in the Statement of Cash Flows of £9,164,569 by £84. This relates to the purchase of shares through exercising options in an investee company, which completed in the year.
9 Post balance sheet events
On 15 June 2016, the Company invested £0.37 million in MPB Group Limited.
10 Statutory information
The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 March 2016 in terms of section 434 of the Companies Act 2006 but is derived from those accounts. Statutory accounts for the year ended 31 March 2016 will be delivered to Companies House following the Company's Annual General Meeting. The auditors have reported on those accounts: their report was unqualified and did not contain a statement under Section 498 of the Companies Act 2006.
11 Annual Report
The Annual Report for the year ended 31 March 2016 will shortly be made available on the Company's website: www.mig2vct.co.uk. and Shareholders will be notified of this by email or post or sent a hard copy in the post in accordance with their instructions. Copies will be available thereafter to members of the public from the Company's registered office.
12 Annual General Meeting
The Annual General Meeting of the Company will be held at 11.00 am on Thursday, 15 September 2016 at 33 St James's Square, London SW1Y 4JY.
Contact details for further enquiries:
Robert Brittain of Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail to vcts@mobeusequity.co.uk.
Mark Wignall or Mike Walker at Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600 or by e-mail to info@mobeusequity.co.uk.
DISCLAIMER
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS
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