TIDMCLC
RNS Number : 4806O
Calculus VCT PLC
17 May 2018
Calculus VCT plc
Legal Entity Identifier: 2138005SMDWLMMNPVA90
Annual Financial Report for the year ended 28 February 2018
The Annual Report and Financial Statements ("Annual Report and
Accounts") for the year ended 28 February 2018 and the Notice of
Annual General Meeting will be posted to shareholders shortly and
will be available for inspection at 104 Park Street , London, W1K
6NF, the Company's registered office, and will be available in
electronic format for download on
www.calculuscapital.com/calculus-vct/ , a website maintained by the
Company's Investment Manager, Calculus Capital Limited. A copy of
the Annual Report and Accounts will also be submitted shortly to
the National Storage Mechanism ("NSM") and will be available for
inspection at the NSM, which is situated at:
http://www.morningstar.co.uk/uk/NSM.
Page numbers and cross-references in the announcement below
refer to page numbers and cross-references in the PDF of the Annual
Report and Accounts.
Financial Highlights
Year to 28 February 2018
Net asset value per
share 87.00p
=========================== ======================
Final dividend proposed 4.00p
=========================== ======================
Total return per
share (2.72)p
As a result of the class merger and the different ratios used to
equalise the classes, the returns for the D shares, ordinary shares
and C shares from prior periods are not directly comparable with
the returns for Ordinary shares in existence at 28
February2018.
The returns for the D shares, ordinary shares and C shares for
the 12 months to and as at 28 February 2017 are shown in notes 8
and 13 in the financial statements.
Our Aim
Calculus VCT is a tax efficient listed company which aims to
achieve long-term returns including tax-free dividends, for
investors.
Investment Objective
To invest primarily in a diverse portfolio of UK growth
companies whether unquoted or traded on AIM. Investments are made
selectively across a range of sectors in companies that have the
potential for long-term growth.
Dividend Objective
Your board aims to maintain a regular tax free annual dividend
of 4.5% of NAV mindful of the need to maintain net asset value. The
ability to meet these twin objectives depends significantly on the
level and timing of profitable realisations and cannot be
guaranteed.
Strategic report
The Strategic Report has been prepared in accordance with the
requirements of Section 414A of the Companies Act 2006 (the "Act").
Its purpose is to inform members of the Company and help them
assess how the Directors have performed their legal duty under
Section 172 of the Act, to promote the success of the Company.
CHAIRMAN'S STATEMENT
I am pleased to present your Company's results for the year
ended 28 February 2018. It has been an active year for the Company
with the merger of the share classes, the acquisition of the assets
and liabilities of Neptune-Calculus Income and Growth VCT plc
(Neptune-Calculus) and the launch of an issue of new Ordinary
shares. The Manager has also been busy on a further seven
investments in qualifying companies. I believe these actions
provide a platform for future growth as we continue to invest funds
and put capital to work.
Share Class Merger
On 1 August 2017 the ordinary, C share classes and D classes
were merged using a ratio of 0.1442 D shares for every ordinary
share held and 0.2435 D shares for every C share held. This was
after the ordinary and C shareholders had received special
dividends of 7.00 pence and 3.00 pence respectively in June 2017
bringing total dividends received by those classes prior to the
merger to 84.05 pence and 73.10 pence per share, respectively. All
shares were subsequently named Ordinary shares.
Results for the year
Following the merger of the share classes, the net asset value
per Ordinary share at 28 February 2018 was 87.00 pence. The closest
comparative figure to the NAV of the Ordinary shares is the NAV of
the D shares, which was 92.43 pence per share as at 28 February
2017. As a result of the different ratios used to equalise the
share classes in the merger, the net asset values per share for the
original ordinary shares and C shares are not comparable.
The year's performance reflects a 4.25p dividend paid during the
year, an improvement in the unquoted portfolio and a small decrease
in the quoted portfolio on a like for like basis.
There has also been a reduction in the annual running costs in
the second half of the year as a result of the agreement with
Calculus Capital by which Calculus Capital undertook to meet costs
above a cost cap set at a lower level than was previously the case.
Performance should benefit as the Manager makes further investments
and puts more of the Company's capital to work.
Venture Capital Investments
Calculus Capital Limited manages the portfolio of VCT qualifying
investments made by the Company.
In addition to the investments acquired from Neptune- Calculus,
the Company made a number of new and follow-on investments, which
are set out in the Investment Manager's report. It also made two
disposals: GBP50,000 was received from the redemption of loan stock
in Terrain Energy Limited and a modest amount was received from the
sale of MCD Ventures Limited, a small holding that was part of the
Neptune-Calculus.
Acquisition of assets and liabilities of Neptune-Calculus
At the general meeting on 31 August 2017 all proposed
resolutions set out in the Circular dated 4 August 2017, including
the resolution to approve the acquisition of the assets and
liabilities of Neptune-Calculus and to authorise the issue of new
shares in the Company to the shareholders of Neptune-Calculus, were
duly passed. Assets with a net value of GBP2.2 million were
acquired on 12 September 2017 of which GBP2 million was represented
by investments in ten unquoted and four quoted companies. Further
details of these are set out in the Investment Manager's
Report.
Issue of new Ordinary shares
At the general meeting on 31 August 2017 shareholders approved
the launch of a further offer for subscription for Ordinary shares,
with the shares to be issued in the 2017/18 and 2018/19 tax years.
367,800 new Ordinary shares were allotted during the year and a
further 1,779,298 shares were allotted after the year end in the
2017/2018 tax year. The offer remains open until 31 July 2018.
Share buy backs
During the year the Company bought back and cancelled 62,210
Ordinary shares. The Company continues to review opportunities to
carry out share buybacks for up to GBP500,000 of Ordinary shares at
a discount of no greater than 10% to the NAV.
Cancellation of share premium
On 1 November 2017 the High Court of Justice, Business and
Property Court of England and Wales, confirmed the cancellation of
the amount standing to the credit of the share premium account of
the Company enabling the application of the resulting distributable
capital reserve to be applied in any manner in which the Company's
profits available for distribution may be applied.
Dividend
The Directors are pleased to announce a final dividend of 4
pence per Ordinary share to be paid to all eligible Ordinary
shareholders.
The new Ordinary shares issued pursuant to the latest Offer do
not rank for this final dividend. Subject to shareholder approval,
the Ordinary share dividend will be paid on 26 July 2018 to
eligible Ordinary shareholders on the register on 5 July 2018.
The Board
I am delighted that Diane Seymour-Williams joined the board in
September 2017. Diane was the Chairman of Neptune-Calculus. She
brings a wealth of general experience as well as fund experience.
Further details
about her are given in the Directors' report in the Annual Report and Accounts.
Outlook
A number of changes to the rules relating to VCTs were
introduced by the government in the budget in November 2017 and
have now passed in to law. The key changed requirement is for
investments to be focused on companies intent on long term growth
where there is a real risk to the capital being invested by the
VCT. Investment in companies and arrangements intended to provide
low risk investment, so called 'capital preservation' investments,
are no longer qualifying.
Calculus Capital is recognised as a growth investor and we
continue to believe that there will be sufficient investment
opportunities for the VCT. The acquisition of the Neptune-Calculus
investments provides our investors with a more diversified
portfolio and greater potential for long term returns. Brexit
uncertainties remain and economic growth is expected to be modest
but our investments are in interesting areas and show good
potential for growth.
Michael O'Higgins
Chairman
17 May 2018
INVESTMENT MANAGER'S REVIEW
(Qualifying Investments)
The net assets of GBP10,129,722 were as follows:
Asset class NAV (GBP000s) % of NAV Number of
investee
companies/funds
--------------------------- ------------- -------- ----------------
Unquoted company
investments 4,727 47 18
--------------------------- ------------- -------- ----------------
AIM traded company
investments 610 6 5
--------------------------- ------------- -------- ----------------
Liquidity Fund investments 2,645 26 3
--------------------------- ------------- -------- ----------------
Other Liquid assets 2,148 21 -
--------------------------- ------------- -------- ----------------
Totals 10,130 100
--------------------------- ------------- -------- ----------------
During the year, the Company made seven qualifying investments,
as we seek to build a diversified portfolio. These were:
Quai Administration Services Limited ("Quai")
In March 2017, GBP70,000 was invested in a back office digital
administration company, 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 administers thousands of
individual savings plans at a fraction of the cost incurred by
established insurance companies and wealth managers.
Blu Wireless Technology Limited ("Blu Wireless")
In June 2017, GBP150,000 was invested in a UK based
semiconductor design company, Blu Wireless Technology Limited ("Blu
Wireless"). Blu Wireless develops hardware and software IP to
provide carrier- grade wireless communications at multi-Gbit speeds
(similar to that provided by fibre). There are immediate
applications for fixed wireless broadband (where fibre roll out may
be prohibitively expensive), rail and road transport and in due
course, in providing the "backhaul" for the much denser network of
base stations that will be required for 5G roll-out. Calculus
Capital invested alongside ARM Holdings, which has a strategic aim
of strengthening its position in networking.
Cornerstone Brands Limited ("Cornerstone")
In August 2017, GBP150,000 was invested in Cornerstone Brands
Limited ("Cornerstone") an internet shaving products subscription
business. Cornerstone provides quality British skin care products
and German engineered razors to over 150,000 customers around the
UK via an online, 'direct- to-consumer' model which challenges the
strategy of traditional retail businesses. A key focus is the
successful rollout of the company's multiproduct launch, moving
into other toiletries categories.
Arcis Biotechnology Holdings Limited ("Arcis")
In September 2017, GBP150,000 was invested in research and
development company, Arcis Biotechnology Holdings Limited
("Arcis"). Arcis is developing rapid DNA / RNA extraction and
preservation products which have significant advantages over other
techniques. Two DNA extraction products, which are CE-IVD (in-
vitro diagnostic) marked, were launched in 2017 and are gaining
commercial traction. Arcis' RNA products are at an earlier stage of
development but have exciting potential. RNA biomarkers can be an
early warning signal that a cell is mutating and turning cancerous
but have been very difficult to detect because RNA is inherently
fragile. Arcis' technology can stabilise RNA biomarkers for
prostate cancer in urine. Preserving RNA in this way opens the
possibility of earlier and more accurate cancer detection,
particularly the hard to detect, so called 'silent cancers'. Arcis
completed an oversubscribed GBP1.15m fundraising in March 2018 via
the crowdfunding platform Syndicate Room.
The One Place Capital Limited ("Money Dashboard" or "MDB")
In October 2017, GBP150,000 was invested in web based personal
finance application, Money Dashboard (trading name of The One Place
Capital Limited). Money Dashboard offers its users a free view of
their finances by automatically analysing all their transactions
(from bank accounts, credit cards, store cards, etc.). In February
2018, MDB won Best Personal Finance App at the British Bank Awards
for the second year running, the first time the same app has won in
two consecutive years. MDB has a database of over 100,000 users and
aggregates their data on an anonymised basis to analyse consumer
spending trends which can be sold to institutional investors and
others, tracking trends in consumer expenditures. The introduction
of the Open Banking Standards in January 2018 (after significant
delays) is a major opportunity for MDB, making it easier to acquire
new users and so enhance the efficacy of its data analysis. The
company completed an oversubscribed GBP1.4m fundraising in
September 2017 via the crowdfunding platform Crowdcube.
Every1Mobile Limited ("Every1Mobile")
In October 2017, an investment of GBP200,000 was completed in
digital platform, Every1Mobile. Every1Mobile has developed a
propriety modular web platform that is focused on delivering web
services to the developing African market, where mobile phone
penetration is high but where the cost of data and the range of
handsets mean that normal web platforms are unsuitable.
Every1Mobile provides its platform to multi-national corporates,
international development agencies and non-profit organisations. It
has delivered programmes for them across much of sub Saharan Africa
and is in a position to become the provider of choice in this
important developing market where living standards are rising and
education and improved healthcare are becoming major
priorities.
Open Energy Market Limited ("OEM")
In January 2018, Calculus Capital invested GBP200,000 in OEM, an
online trading platform for energy contracts for medium-large
enterprises. According to Ofgem, contracts in the corporate energy
market total over GBP1.2 billion per year, of which 85% is bought
using an energy broker in what has essentially been a paper-based
process. OEM is an online trading platform for medium to large
enterprises to contract for their future energy requirements. OEM
connects businesses through the platform to all sixteen major
energy providers of gas and electricity. These providers bid for
contracts in a live auction process allowing businesses to buy
energy in a streamlined and more transparent way.
Investments acquired from Neptune-Calculus
In addition, a number of investments were acquired by way of the
merger with Neptune-Calculus. In September 2017, the majority of
the companies were already held in the Company. The investments
acquired which were not already held in the Company were Arcis
Biotechnology Limited in which a follow-on investment of GBP150,000
was made during the year and Synpromics Limited which identifies
gene sequences, known as promoters, which control how cells are
affected in gene and cell therapies. The full list of investments
acquired by way of the merger and their values at the time of
merger were:
GBP100,000 in trampoline park operator, Air Leisure Group
Limited (trading as XJump).
GBP125,000 in Arcis Biotechnology Holdings Limited.
GBP74,000 in drug discovery and development company, C4X
Discovery Holdings plc.
GBP69,000 in molecular diagnostics company, Genedrive plc.
GBP25,000 in renewable energy company, MicroEnergy Generation
Services Limited.
GBP126,000 in a provider of internet and phone services, Origin
Broadband Limited.
GBP264,000 in Scancell Holdings plc, an immunotherapy
company.
GBP249,000 in a developer and manufacturer of cosmetics,
toiletries and fragrances, Solab Group Limited.
GBP134,000 in Synpromics Limited a synthetic biology
company.
GBP722,000 in an oil and gas exploration and production company,
Terrain Energy Limited.
GBP116,000 in cleantech company Weeding Technologies
Limited.
In addition, a number of smaller holdings were acquired for an
aggregate value of less than GBP2,000. GBP286,000 cash and
GBP90,000 of net liabilities were also acquired.
Investment Diversification at 28 February 2018
Sectors by investment cost
Sector %
Consumer 17
Energy 24
Healthcare 22
Industrials 12
Technology 25
Total assets by value
Asset %
Unquoted company equity 41
Unquoted company loanstock 6
AIM traded equity 6
Liquidity fund investments 26
Other liquid assets 21
Holding period of qualifying investments by value
Asset %
Less than 1 year 27
Between 1 and 3 years 29
Between 3 and 5 years 12
Greater than 5 years 32
Developments since the year end
Since the year end the Company has invested GBP200,000 in
Mologic Limited, a developer of point of care diagnostic devices,
designed to improve the lives of patients by giving them the
opportunity to manage their own condition in the home environment.
The Company has also received GBP32,000 as additional consideration
for the sale of an investment in Triage Limited which was sold by
Neptune-Calculus before the assets and liabilities were acquired by
the Company in September 2017. Other than this, there have been no
developments since the year end.
Calculus Capital Limited
17 May 2018
INVESTMENT PORTFOLIO
Largest holdings by value
Three of the Company's ten largest investments are currently in
liquidity funds. Details of the liquidity funds and 10 largest
qualifying investments are set out below:
Investment Book Cost Valuation % of investment
GBP'000 GBP'000 portfolio
Unquoted Equity Investments
Terrain Energy Limited 972 1,037 13.0
Solab Group Limited 479 501 6.3
AnTech Limited 270 292 3.7
The One Place Capital
Limited 277 277 3.5
Acris Biotechnology Holdings 275 275 3.4
Origin Broadband Limited 226 252 3.2
Weeding Technologies 216 233 2.9
Synpromics Limited 134 232 2.9
Quai Administration Services
Limited 220 220 2.8
Other unquoted equity
investments 1,371 1,408 17.6
----------------------------- --------- --------- ---------------
AIM Investments (quoted
equity)
Scancell Holdings plc 378 367 4.6
Other AIM investments 350 243 3.0
----------------------------- --------- --------- ---------------
Quoted Funds
Fidelity Sterling Liquidity
Fund 881 883 11.1
Aberdeen Sterling Liquidity
Fund 882 882 11.0
Goldman Sachs Liquidity
Funds 880 880 11.0
----------------------------- --------- --------- ---------------
Total Investments 7,811 7,982 100
More information of the unquoted holdings included within the 10
largest qualifying investments by value are provided below.
Terrain Energy Limited ("Terrain")
Terrain has interests in eleven licenses, with nine onshore in
the UK and two in Germany.
The company is currently producing from wells at Keddington,
Whisby and Lidsey. Brockham was successfully drilled in 2017 but
there have been some delays in testing and production due to a
planning dispute which the company believes is close to settlement.
Initial results indicate that the well could be very productive
from the Kimmeridge clay, in line with the nearby Horse Hill-1 well
which had initial production of over 1600bopd. A new well at Lidsey
was spudded in September 2017 which is currently producing c.
30bopd. Further work is expected to increase production. The
company is in discussions regarding the farm-out or sale of its
German licences with several larger industry players following a
gas discovery on its Holzkirchen licence by a geothermal
company.
Latest Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
GBP'000 GBP'000 GBP'000
Year ended 31 Dec 31 Dec
------------ ---------- --------- ----------------------- ------------
Turnover 704 544 Total cost 972
------------ ---------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 136 543 in year/period 19
------------ ---------- --------- ----------------------- ------------
Net assets 6,329 6,466 Equity valuation 937
------------ ---------- --------- ----------------------- ------------
Valuation basis:
Comparable companies
and DCF Loan stock valuation 100
----------------------------------- ----------------------- ------------
Total valuation 1,037
------------ ---------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 7.4%
------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
100 per cent.
Solab Group Limited ("Solab")
Solab is a long-established manufacturer of fragrances, shampoos
and skincare products for third party customers, including
Penhaligon's and Philip Kingsley.
2017 was challenging with difficult market conditions generally,
the continuing effects of losing its largest customer (The Body
Shop), when it was acquired by L'Oreal and some unforeseen
operational issues related to a new joint venture to supply some of
the supermarket majors (Tesco, Lidl). Losses were incurred in the
first half of the year, but, following management and other
changes, Solab has been trading profitably since September. This
has continued in 2018, with new customer wins and first orders from
The Body Shop following its sale by L'Oréal.
Latest Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
(group) GBP'000 GBP'000 GBP'000
Year ended 31 Dec 31 Dec
------------ ---------- --------- ----------------------- ------------
Turnover 19,013 18,081 Total cost 479
------------ ---------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 1,335 525 in year/period 22
------------ ---------- --------- ----------------------- ------------
Net assets 1,128 2,039 Equity valuation 206
------------ ---------- --------- ----------------------- ------------
Valuation basis:
Comparable companies,
comparable transactions
and DCF Loan stock valuation 295
----------------------------------- ----------------------- ------------
Total valuation 501
------------ ---------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 7.5%
------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
85 per cent.
AnTech Limited ("AnTech")
AnTech is a specialist oil and gas engineering company, both
manufacturing products for use at the wellhead during production
and providing services for directional coiled tube drilling.
AnTech's Products Division, whose largest product category is
technically advanced Well Head Outlets, suffered falls in sales
because of low oil prices. However, in 2017, sales stabilised and
then increased with a strong order book. The Coiled Tube Drilling
Services Division has developed a new generation of directional
drilling tools for use in coiled tube drilling. These tools, COLT
and POLARIS, are effective for interventions in existing wells to
enhance production yield and extend well life. Commercialisation
has been delayed by low oil prices, but drilling is expected during
2018 in North America and Saudi Arabia (which was originally
contracted for 2016).
Latest Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
(group) GBP'000 GBP'000 GBP'000
Year ended 31 Aug 31 Aug
------------ ---------- --------- ----------------------- ------------
Turnover 2,089 2,130 Total cost 270
------------ ---------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 474 1,149 in year/period 18
------------ ---------- --------- ----------------------- ------------
Net assets 6,808 7,673 Equity valuation 142
------------ ---------- --------- ----------------------- ------------
Valuation basis:
DCF and comparable companies
and transactions Loan stock valuation 150
----------------------------------- ----------------------- ------------
Total valuation 292
------------ ---------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 1.0%
------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
32 per cent.
The One Place Capital Limited ("Money Dashboard")
Information on The One Place Capital Limited ("Money Dashboard")
is included under details of investments in the year on page 10 of
the Annual Report and Accounts.
Latest Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
(group) GBP'000 GBP'000 GBP'000
Year ended 30 Apr 30 Apr
------------ ---------- --------- ----------------------- ------------
Turnover 633 509 Total cost 277
------------ ---------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 669 1,250 in year/period -
------------ ---------- --------- ----------------------- ------------
Net assets 356 5 Equity valuation 277
------------ ---------- --------- ----------------------- ------------
Valuation basis: Loan stock valuation -
Last price paid
----------------------------------- ----------------------- ------------
Total valuation 277
------------ ---------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 2.2%
------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
36 per cent.
Arcis Biotechnology Holdings Limited ("Arcis")
Information on Arcis is included under details of investments in
the year on page 10 of the Annual Report and Accounts.
Latest Audited Audited Investment Information Ordinary
Results 2017 2016 share Fund
(group) GBP'000 GBP'000 GBP'000
Year ended 31 Jul 31 Jul
------------ --------- --------- ----------------------- ------------
Turnover 225 217 Total cost 275
------------ --------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 1,464 1,729 in year/period -
------------ --------- --------- ----------------------- ------------
Net assets 204 1,460 Equity valuation 275
------------ --------- --------- ----------------------- ------------
Valuation basis: Loan stock valuation -
Last price paid
---------------------------------- ----------------------- ------------
Total valuation 275
------------ --------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 1.5%
------------ --------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
38 per cent.
Origin Broadband Limited ("Origin")
Origin is an award-winning internet service provider, serving
residential and business customers throughout the UK.
The company owns and operates the sixth largest broadband
network in the UK measured by points of presence. As a network
operator Origin is able to deal directly with Openreach, the BT
division that maintains the UK's main telecoms network. This gives
the company greater control over the underlying circuits and
equipment; allowing it to provide a better service level than a
pure reseller. Origin is viewed by its customers as an agile
alternative to the large, incumbent telecom operators, with a focus
on faster broadband speeds, competitive pricing and first-class
customer service. Many businesses are moving to cloud computing and
need strong customer support. Consumers are using increasing
amounts of data and require fast/superfast broadband services.
Since the original Calculus investment in December 2016, Origin
has grown its residential customer base from approximately 8,000 to
over 35,000. Current business clients include Amazon - where Origin
is the preferred provider for all new warehouse and corporate
sites, NHS Sheffield and various UK universities.
Latest Audited 2017 2015* Investment Information Ordinary
Results GBP'000 GBP'000 share Fund
GBP'000
Year ended 31 30
Mar Nov
---------------- --------- --------- ----------------------- ------------
Turnover 3,011 730 Total cost 226
---------------- --------- --------- ----------------------- ------------
Income recognised
Pre-tax loss 2,350 1,301 in year/period -
---------------- --------- --------- ----------------------- ------------
Net assets/
(liabilities) 1,425 (178) Equity valuation 252
---------------- --------- --------- ----------------------- ------------
Valuation basis: Loan stock valuation -
Last price paid
-------------------------------------- ----------------------- ------------
Total valuation 252
---------------- --------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 0.6%
---------------- --------- --------- ----------------------- ------------
* Comparative figures restated according to FRS 102. Change in
accounting period end from 30 Nov 2016 to 31 Mar 2017, therefore
2017 results cover a 16 month period which is not entirely
comparable to the prior period which was 12 months in length.
Total equity held by funds managed by Calculus Capital Limited:
18 per cent.
Weeding Technologies Limited ("Weedingtech")
Increasingly, governments and regulators are becoming concerned
about the use of chemical herbicides, such as glyphosate,
particularly in public spaces. Weedingtech's "Foamstream" product
treats and controls weed and moss using environmentally friendly
hot foam. The company has had a strong 2017; it doubled its
turnover for the second year in a row, launched a new and
significantly improved product and is building a distributor
network across Europe and North America.
The company continues to invest in R&D and has plans for
improvements to the existing product and for new complementary
products to be released in 2018.
Latest Unaudited Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
GBP'000 GBP'000 GBP'000
Year ended 31 Dec 31
Dec
------------------ ---------- --------- ----------------------- ------------
Turnover 2,625 1,260 Total cost 216
------------------ ---------- --------- ----------------------- ------------
Income recognised
Pre-tax loss 1,627 1,177 in year/period -
------------------ ---------- --------- ----------------------- ------------
Net assets/
(liabilities) 981 2,086 Equity valuation 233
------------------ ---------- --------- ----------------------- ------------
Valuation basis: Loan stock valuation -
Last price paid
----------------------------------------- ----------------------- ------------
Total valuation 233
------------------ ---------- --------- ----------------------- ------------
Voting rights
/ % of equity
share capital
held 1.4%
------------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
22 per cent.
Synpromics Limited ("Synpromics")
Synpromics is a leader in gene control, improving human health
by enabling safer, more effective cell and gene medicines through
proprietary genomics, bioinformatics and intelligent data-driven
design.
The company has developed PromPT(R), its multi- dimensional
bioinformatics database that enables the development of specific
"promoters" for the next generation of cell and gene-based
medicines and bioprocessing applications. Promoters are the gene
mechanism that direct cell and gene therapies to the specific
targets. The company operates in a diverse range of fields,
including broad applications in cell and gene-based medicine,
biologics manufacturing and viral vector bioprocessing.
Latest Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
(group) GBP'000 GBP'000 GBP'000
Year ended 31 Dec 31 Dec
------------ ---------- --------- ----------------------- ------------
Turnover 1,744 1,243 Total cost 134
------------ ---------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 1,594 429 in year/period -
------------ ---------- --------- ----------------------- ------------
Net assets 4,470 1,048 Equity valuation 232
------------ ---------- --------- ----------------------- ------------
Valuation basis: Loan stock valuation -
DCF
----------------------------------- ----------------------- ------------
Total valuation 232
------------ ---------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 0.7%
------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
50 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 administers thousands of individual savings
plans at a fraction of the cost incurred by established insurance
companies and wealth managers. In October 2016 Punter Southall
Aspire, the leading workplace pensions and savings business,
selected Quai as the out-sourced investment administrator for its
forthcoming Master Trust. At the same time, Punter Southall Aspire
made a strategic investment in Quai, which was further supported by
Calculus and other existing shareholders in February 2017.
Latest Unaudited Audited Investment Information Ordinary
Results 2017 2016 share Fund
(group) GBP'000 GBP'000 GBP'000
Year ended 31 Oct 31 Oct
------------ ---------- --------- ----------------------- ------------
Turnover 1,543 919 Total cost 220
------------ ---------- --------- ----------------------- ------------
Pre-tax Income recognised
loss 1,200 1,830 in year/period -
------------ ---------- --------- ----------------------- ------------
Net assets 225 124 Equity valuation 220
------------ ---------- --------- ----------------------- ------------
Valuation basis: Loan stock valuation -
Last price paid
----------------------------------- ----------------------- ------------
Total valuation 22
------------ ---------- --------- ----------------------- ------------
Voting rights /
% of equity share
capital held 2.7%
------------ ---------- --------- ----------------------- ------------
Total equity held by funds managed by Calculus Capital Limited:
52 per cent.
OTHER STATUTORY INFORMATION
Company activities and status
The Company is registered as a public limited company and
incorporated in England and Wales with registration number
07142153. Its shares have a premium listing and are traded on the
London Stock Exchange.
On incorporation, the Company was an investment company under
section 833 of the Companies Act 2006. On 18 May 2011, investment
company status was revoked by the Company. This was done in order
to allow the Company to pay dividends to shareholders using the
special reserve (a distributable capital reserve), which had been
created on the cancellation of the share premium account on 20
October 2010 and on 1 November 2017.
Company business model
The Company's business model is to conduct business as a VCT.
Company affairs are conducted in a manner to satisfy the conditions
to enable it to obtain approval as a VCT under sections 258-332 of
the Income Tax Act 2007 ("ITA 2007").
Investment policy
It is intended that a minimum of 75 per cent of the monies
raised by the Company will be invested in a variety of investments
which will be selected to preserve capital value, whilst generating
income, and may include:
-- Bonds issued by the UK Government; and
-- Fixed income securities issued by major companies and
institutions, liquidity funds and fixed deposits with counterparty
credit rating of not less than A minus (Standard & Poor's
rate)/A3 (Moody's rated).
The Company's policy is to build a diverse portfolio of
Qualifying Investments of primarily established unquoted companies
across different industries and investments which may be by way of
loan stock and/or fixed rate preference shares as well as Ordinary
shares to generate income. The amount invested in any one sector
and any one company will be no more 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 than 20 per cent and 10 per cent respectively of
the qualifying portfolio. These percentages are measured as at the
time of investment. The Board and its Investment Manager, Calculus
Capital Limited, will review the portfolio of investments on a
regular basis to assess asset allocation and the need to realise
investments to meet the Company's objectives or maintain VCT
status.
Where investment opportunities arise in one asset class which
conflict with assets held or opportunities in another asset class,
the Board will make the investment decision. Under its Articles,
the Company has the ability to borrow a maximum amount equal to 25
per cent of the aggregate amount paid on all shares issued by the
Company (together with any share premium thereon). The Board will
consider borrowing if it is in the shareholders' interests to do
so. In particular, because the Board intends to minimise cash
balances, the Company may borrow on a short-term to medium-term
basis for cashflow purposes and to facilitate the payment of
dividends and expenses in the early years.
Long term viability
In assessing the long-term viability of the Company, the
Directors have had regard to the guidance issued by the Financial
Reporting Council. The Directors have assessed the prospects of the
Company for a period of five years, which was selected because this
is the minimum holding period for VCT shares. The Board's strategic
review considers the Company's income and expenses, dividend
policy, liquid investments and ability to make realisations of
qualifying investments. These projections are subject to
sensitivity analysis which involves flexing a number of the main
assumptions underlying the forecast both individually and in
unison. Where appropriate, this analysis is carried out to evaluate
the potential impact of the Company's principal risks actually
occurring. Based on the results of this analysis, the Directors
have a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due
over the five-year period of their assessment. The principal
assumptions used are as follows: i) Calculus Capital Limited pays
any expenses in excess of 3.0 per cent of NAV as set out on page 30
of the Annual Report and Accounts; ii) the level of dividends paid
are at the discretion of the Board; iii) this analysis, the
Directors have a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall
due.
In making this statement the Board carried out a robust
assessment of the principal risks facing the Company including
those that might threaten its business model, future performance,
solvency or liquidity.
Alternative investments funds directive (AIFMD)
The AIFMD regulates the management of alternative investment
funds, including VCTs. The VCT is externally managed under the
AIFMD by Calculus Capital Limited which is a small authorised
Alternative Investment Fund Manager.
Risk diversification
The Board controls the overall risk of the Company. Calculus
Capital Limited will ensure the Company has exposure to a
diversified range of Qualifying Investments from different
sectors.
Since November 2015, the types of non-qualifying investment
include:
-- Bonds issued by the UK Government; and
-- Fixed income securities issued by major companies and
institutions, liquidity funds and fixed deposits with counterparty
credit rating of not less than A minus (Standard & Poor's
rate)/A3 (Moody's rated).
VCT regulation
The Company's investment policy is designed to ensure that it
will meet, and continue to meet, the requirements for approved VCT
status from HM Revenue & Customs. Amongst other conditions, the
Company may not invest more than 15 per cent (by value at the time
of investment) of its investments in a single company and must have
at least 70 per cent by value of its investments throughout the
period in shares or securities in qualifying holdings, of which 30
per cent by value must be Ordinary shares which carry no
preferential rights ("eligible shares"). For funds raised from 6
April 2011, the requirement for 30 per cent to be invested in
eligible shares was increased to 70 per cent.
Changes to legislation were made in the Finance Bill 2018 such
that from 1 March 2020 the percentage by value of the Company's
investments in shares or securities which must be invested by and
maintained in qualifying holdings will rise to 80 per cent. In
addition, 30 per cent of any money raised after 6 April 2018 will
need to be invested in qualifying holdings within 12 months after
the end of the accounting period in which the money was raised and
loan stock investments in investee companies must be unsecured and
must not carry a coupon which exceeds 10% per annum on average over
a five-year period.
Key strategic issues considered during the year
Performance
The Board reviews performance by reference to a number of key
performance indicators ("KPIs") and considers that the most
relevant KPIs are those that communicate the financial performance
and strength of the Company as a whole, being;
-- total return per share
-- net asset value per share
The financial highlights of the Company can be found after the
contents page of the Annual Report and Accounts.
Further KPIs are those which show the Company's position in
relation to the VCT tests which it is required to meet in order to
meet and maintain its VCT status. The Qualifying % is disclosed in
the Investment Manager's review. The Company has received approval
as a VCT from HM Revenue & Customs.
Principal risks and uncertainties facing the Company and
management of risk
The Company is exposed to a variety of risks. The principal
financial risks, the Company's policies for managing these risks
and the policy and practice with regard to financial instruments
are summarised in note 16 to the full Annual Report and
Accounts.
The Board has also identified the following additional risks and
uncertainties:
Regulatory risk
The Company has received approval as a VCT under ITA 2007.
Failure to meet and maintain the qualifying requirements for VCT
status could result in the loss of tax reliefs previously obtained,
resulting in adverse tax consequences for investors, including a
requirement to repay the income tax relief obtained, and could also
cause the Company to lose its exemption from corporation tax on
chargeable gains.
The Board receives regular updates from the Investment Manager
and financial information is produced on a monthly basis. The
Investment Manager monitors VCT regulation and presents its
findings to the Board on a quarterly basis. The Investment Manager
builds in 'headroom' when making investments to allow for changes
in valuation. This 'headroom' is reviewed prior to making and
realising qualifying investments.
Independent advisers are used to monitor and advise on the
Company's compliance with the VCT rules.
Qualifying investments
There are restrictions regarding the type of companies in which
the Company may invest and there is no guarantee that suitable
investment opportunities will be identified.
Investment in unquoted companies and AIM-traded companies
involves a higher degree of risk than investment in companies
traded on the main market of the London Stock Exchange. These
companies may not be freely marketable and realisations of such
investments can be difficult and can take a considerable amount of
time. There may also be constraints imposed upon the Company with
respect to realisations in order to maintain its VCT status which
may restrict the Company's ability to obtain the maximum value from
its investments.
Calculus Capital Limited has been appointed to manage the
qualifying investments portfolio and has extensive experience of
investing in this type of investment. Regular reports are provided
to the Board and a representative of Calculus Capital Limited is on
the Company's board. Risk is managed through the investment policy
which limits the amount that can be invested in any one company and
sector to 10 per cent and 20 per cent of the qualifying portfolio
respectively at the time of investment - Liquidity/ marketability
risk.
Due to the holding period required to maintain up-front tax
reliefs, there is a limited secondary market for VCT shares and
investors may therefore find it difficult to realise their
investments. As a result, the market price of the shares may not
fully reflect, and will tend to be at a discount to, the underlying
net asset value. The level of discount may also be exacerbated by
the availability of income tax relief on the issue of new VCT
shares. The Board recognises this difficulty, and has taken powers
to buy back shares, which could be used to enable investors to
realise investments.
Employees, environmental, human rights and community issues
The Company has no employees and the Board comprises entirely
non-executive directors. Day-to-day management of the Company's
business is delegated to the Investment Manager (details of the
management agreement are set out in the Directors' Report) and the
Company itself has no environmental, human rights, or community
policies. In carrying out its activities and in its relationships
with suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Gender Diversity
The Board of directors comprised three male directors and two
female Directors at the end of the year to 28 February 2018.
Statement regarding annual report and accounts
The Directors consider that taken as a whole, the Annual Report
and Accounts is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
Michael O'Higgins
Chairman
17 May 2018
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. In April 2017 160,810 D shares were
issued pursuant to an offer for subscription. In July 2017 the
share classes were merged and 4,055,220 old ordinary shares were
converted into 683,243 new Ordinary shares, 1,460,898 C shares were
converted into 470,197 new Ordinary shares and the 7,672,507 D
shares then in issue were renamed Ordinary shares. In September
2017 2,511,180 new Ordinary shares were issues to acquire the
assets and liabilities of Neptune. In December 2017 367,800
Ordinary shares were issued pursuant to offers for subscription.
62,210 Ordinary shares were bought back during the year. Since the
year end a further 1,779,298 new Ordinary shares have been issued
pursuant to an offer for subscription.
Substantial Shareholdings
As at 28 February 2018, Mr Alistair Watson held 407,022 Ordinary
shares representing 3.5% of the share capital of the Company. There
were no other notifiable interests in the voting rights of the
Company.
Management
Calculus Capital Limited is the qualifying Investments'
portfolio manager. Calculus Capital Limited was appointed as
Investment Manager pursuant to an agreement dated 2 March 2010, a
supplemental agreement was entered into on 7 January 2011 in
relation to the management of the C Share fund, a further
supplemental agreement entered into on 26 October 2015 in relation
to the management of the D share fund and covers the addition of
company secretarial duties and a further supplemental management
agreement entered into on 12 September 2017 in relation to the
merged share fund (together, the "Calculus Management Agreements").
Pursuant to the Calculus Management Agreements, Calculus Capital
Limited agreed to meet the annual expenses of the Company in excess
of 3.0 per cent of the aggregate gross amounts raised under the
Ordinary share and C share offers, and 3.4 per cent of the
aggregate gross amounts raised on the D share offer, for the period
from 1 March 2017 to 12 September 2017. From 12 September 2017,
Calculus Capital Limited agreed to meet the annual expenses of the
Company in excess of 3.0 per cent of the net asset value of the
Ordinary shares.
Pursuant to the Calculus Management Agreements, Calculus Capital
Limited will receive an annual management fee of 1.75 per cent of
the net asset value of the Ordinary share fund, calculated and
payable quarterly in arrears.
Calculus Capital Limited is also entitled to a fee of GBP15,000
per annum (plus VAT where applicable) for the provision of company
secretarial services.
For the year to 28 February 2018, Calculus Capital Limited
charged GBP154,089 in management fees, GBP18,000 in company
secretarial fees, and contributed GBP26,435 to the expenses cap
such that net fees earned were GBP145,654 (2017: charged GBP62,838
in management fees, GBP18,000 in company secretarial fees and
contributed GBP20,492 to the expenses cap).
Pursuant to a performance incentive agreement dated 26 October
2015, Calculus Capital Limited is entitled to a performance
incentive fee equal to 20 per cent of Ordinary shareholder
(formerly D shareholder) dividends and distributions paid in excess
of 105 pence.
Investec Structured Products was appointed as Investment Manager
pursuant to an agreement dated 2 March 2010, and their appointment
as Investment Manager terminated in February 2017. Certain
performance incentive agreements were entered into with Calculus
Capital Limited and Investec Structured Products.
Pursuant to a performance incentive agreement between the
Company, Calculus Capital Limited and Investec Structured Products
dated 2 March 2010, Investec Structured Products and Calculus
Capital Limited will each receive a performance incentive fee
payable in cash of an amount equal to 10 per cent of dividends and
distributions paid to old ordinary shareholders following the
payment of such dividends and distributions provided that such
shareholders have received in aggregate distributions of at least
105p per ordinary share (including the relevant distribution being
offered).
Pursuant to a performance incentive agreement between the
Company, Calculus Capital Limited and Investec Structured Products
dated 7 January 2011, Investec Structured Products and Calculus
Capital Limited will be entitled to performance incentive fees as
set out below:
-- 10 per cent of C shareholder proceeds in excess of 105p up to
and including proceeds of 115p per C share, such amount to be paid
within ten business days of the date of payment of the relevant
dividend or distribution pursuant to which a return of 115p per C
share is satisfied; and
-- 10 per cent of C shareholder proceeds in excess of 115p per C
share, such amounts to be paid within ten business days of the date
of payment of the relevant dividend or distribution,
provided that C shareholders received at least 70p per C share
on or before 14 March 2017 and at least a further 45p per C share
is received or offered for payment on or before the 14 March
2019.
Continuing Appointment of the Investment Manager
The Board keeps the performance of Calculus Capital Limited
under continual review. A formal review of the Investment Manager's
performance and the terms of their engagement has been carried out
and the Board are of the opinion that the continuing appointment of
Calculus Capital Limited as Investment Manager is in the interests
of shareholders as a whole. The Board is satisfied with the
performance of the Company to date. The Board is confident that the
VCT qualifying tests will continue to be met.
Financial Risk Management
The principal financial risks and the Company's policies for
managing these risks are set out in note 16 to the Accounts.
Going Concern
In assessing the going concern basis of accounting, the
Directors have had regard to the guidance issued by the Financial
Reporting Council. After making enquiries, and having reviewed the
portfolio, balance sheet and projected income and expenditure for a
period of twelve months from the date these financial statements
were approved, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operation for the
foreseeable future. The Directors have therefore adopted the going
concern basis in preparing the Accounts.
Annual General Meeting
The Annual General Meeting will be held at the offices of
Calculus Capital Limited, 104 Park Street, London, W1K 6NF at
11.00am on 3 July 2018.
DIRECTOR'S RESPONSIBILITIES STATEMENT
Statement of Directors' Responsibilities in respect of the
Annual Report and the Accounts
The directors are responsible for preparing the Annual Report
and the Accounts in accordance with applicable law and
regulations.
Company law requires the directors to prepare Accounts for each
financial year. Under that law they have elected to prepare the
Accounts in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable laws).
Under company law the Directors must not approve the Accounts
unless they are satisfied that they give a true and fair view of
the state of affairs and profit or loss of the Company for that
period.
In preparing these Accounts, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the Accounts; and
-- prepare the Accounts on the going concern basis unless it is
inappropriate to presume that the Company will continue in
business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Accounts comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that comply with that law and those regulations, and for ensuring
that the Annual Report includes information required by the Listing
Rules of the Financial Conduct Authority.
The Accounts are published on the www.calculuscapital. com
website, which is a website maintained by the Company's investment
manager, Calculus Capital Limited. The maintenance and integrity of
the website maintained by Calculus Capital Limited is, so far as it
relates to the Company, the responsibility of Calculus Capital
Limited. The work carried out by the Auditor does not involve
consideration of the maintenance and integrity of this website and
accordingly, the Auditor accepts no responsibility for any changes
that have occurred to the Accounts since they were initially
presented on the website. Visitors to the website need to be aware
that legislation in the United Kingdom covering the preparation and
dissemination of the Accounts may differ from legislation in their
jurisdiction.
We confirm that to the best of our knowledge:
-- the Accounts, prepared in accordance with UK accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
-- the Annual Report including the Strategic Report includes a
fair review of the development and performance of the business and
the position of the Company together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Michael O'Higgins
Chairman
17 May 2018
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the year ended 28 February 2018
and the year ended 28 February 2017 but is derived from those
accounts. Statutory Accounts for 2017 have been delivered to the
Registrar of Companies, and those for 2018 will be delivered in due
course. The Auditor has reported on these accounts; their report
was (i) unqualified (ii) did not include a reference to any matters
to which the Auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006. The text of the
Auditor's report can be found in the Company's full Annual Report
and Accounts at https://www.calculuscapital.com/calculus-vct/ .
INCOME STATEMENT
for the year ended 28 February 2018
Year Ended 28 Year Ended 28
February 2018 February 2017
------------------------------- ---------------------------- ----------------------------
Revenue Capital Revenue Capital
Return Return Total Return Return Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ---- -------- -------- -------- -------- -------- --------
Gains on investments
at fair value 9 - 232 232 - 70 70
Losses on disposal
of investments 9 - (159) (159) - (214) (214)
Income 3 65 - 65 62 - 62
Investment management
fee 4 (39) (115) (154) (16) (47) (63)
Costs of acquiring
Neptune Calculus
assets and liabilities (55) - (55) - - -
Other expenses 5 (202) - (202) (193) - (193)
------------------------- ---- -------- -------- -------- -------- -------- --------
Deficit before
taxation (231) (42) (273) (147) (191) (338)
------------------------- ---- -------- -------- -------- -------- -------- --------
Taxation 6 - - - - - -
------------------------- ---- -------- -------- -------- -------- -------- --------
Deficit attributable
to shareholders (231) (42) (273) (147) (191) (338)
------------------------- ---- -------- -------- -------- -------- -------- --------
Deficit per Ordinary
share 8 (2.3)p (0.4)p (2.7)p (3.8) (4.9) (8.7)
------------------------- ---- -------- -------- -------- -------- -------- --------
The columns for the year to February 2018 include the income
attributable to the old ordinary shares, C shares and D shares
prior to the merger of the classes. The columns for the year to
February 2017 represent the income attributable to the old ordinary
shares C shares and D shares prior to the merger of the classes.
The columns for both years represent the Company's Income Statement
for the relevant year.
The deficit per Ordinary share for the year to 28 February 2017
is the implied deficit per Ordinary share on the assumption that
the merger of the share classes had taken place on 1 March
2016.
The revenue and capital return columns are both prepared in
accordance with the AIC SORP.
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 notes on pages 51 to 67 of the Annual Report and Accounts
form an integral part of these Accounts.
STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2018
Capital Capital Capital
Share Share Special redemption Reserve Reserve Revenue
Capital Premium Reserve Reserve Realised Unrealised Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- --------- -------- ----------- --------- ----------- -------- --------
For the year ended
28 February 2018
1 March 2017 141 7,046 1,277 - 725 (61) (705) 8,423
Investment holding
gains - - - - 232 - 232
Loss on disposal
of investments - - - - (159) - - (159)
New share issue
(D shares) 2 153 - - - - - 155
Expense of share
issue (D shares) - (9) - - - - - (9)
Purchase of shares
for cancellation
in connection with
merger of classes (55) - 55 - - - -
New share issue
(Ordinary shares
re Neptune-Calculus
assets and liabilities
acquisition) 25 2,176 3 - - - - 2,204
Cancellation of
share premium account - (9,342) 9,342 - - - - -
New share issue
(Ordinary shares) 4 310 - - - - - 314
Expenses of share
issue (Ordinary
shares) - (11) - - - - - (11)
Share buybacks
for cancellation (1) - (49) 1 - - - (49)
Management fee
allocated to capital - - - - (115) - - (115)
Change in accrual
in IFA commission - (25) 2 - - - - (23)
Revenue return
after tax - - - - - - (231) (231)
Dividends paid - - (601) - - - - (601)
------------------------- -------- --------- -------- ----------- --------- ----------- -------- --------
28 February 2018 116 298 9,974 56 451 171 (936) 10,130
------------------------- -------- --------- -------- ----------- --------- ----------- -------- --------
For the year ended
28 February 2017
1 March 2016 66 - 2,615 - 986 (131) (558) 2,978
Investment holding
gains - - - - - 70 - 70
Loss on disposal
of investments - - - - (214) - - (214)
New share issue 75 7,420 - - - - - 7,495
Expense of share
issue - (374) - - - - - (374)
Management fee
allocated to capital - - - - (47) - - (47)
Revenue return
after tax - - - - - - (147) (147)
Dividends paid - - (1,338) - - - - (1,338)
------------------------- -------- --------- -------- ----------- --------- ----------- -------- --------
28 February 2017 141 7,046 1,277 - 725 (61) (705) 8,423
------------------------- -------- --------- -------- ----------- --------- ----------- -------- --------
The figures for the year to February 2018 include the combined
changes in equity attributable to the old ordinary shares C shares
and D shares prior to the merger of the classes. The figures for
the year to February 2017 represent the combined changes in equity
for the old ordinary shares C shares and D shares. All items
represent the changes in equity for the Company for the relevant
year.
The notes on pages 51 to 67 of the Annual Report and Accounts
form an integral part of these Accounts.
STATEMENT OF FINANCIAL POSITION
at 28 February 2018
28 February 28 February
2018 2017
Note GBP'000 GBP'000
----------------------------------- ---- ----------- -----------
Fixed assets
Investments at fair value through
profit or loss 9 7,982 4,906
----------------------------------- ---- ----------- -----------
Current assets
Debtors 10 44 14
Cash at bank and on deposit 2,267 3,782
----------------------------------- ---- ----------- -----------
Creditors: amount falling due
within one year
Creditors 11 (142) (279)
----------------------------------- ---- ----------- -----------
Net current assets 2,169 3,517
----------------------------------- ---- ----------- -----------
Non-current liabilities
IFA trail commission (21) -
----------------------------------- ---- ----------- -----------
Net assets 10,130 8,423
----------------------------------- ---- ----------- -----------
Capital and reserves
Called-up share capital 12 116 141
Share premium 298 7,046
Special reserve 9,974 1,277
Capital redemption reserve 56 -
Capital reserve - realised 451 725
Capital reserve - unrealised 171 (61)
Revenue reserve (936) (705)
----------------------------------- ---- ----------- -----------
Equity shareholders' funds 10,130 8,423
----------------------------------- ---- ----------- -----------
Net asset value per Ordinary
share - basic 13 87.0p -
----------------------------------- ---- ----------- -----------
Net asset value per original
ordinary share - basic 13 - 20.6p
----------------------------------- ---- ----------- -----------
Net asset value per C share
- basic 13 - 26.0p
----------------------------------- ---- ----------- -----------
Net asset value per D share
- basic 13 - 92.4p
----------------------------------- ---- ----------- -----------
The assets and liabilities as at 28 February 2018 represent the
assets and liabilities attributable to the Ordinary shares. The
assets and liabilities as at 28 February 2017 represent the
combined assets and liabilities attributable to the original
ordinary shares C shares and D shares. The notes on pages 51 to 67
of the Annual Report and Accounts form an integral part of these
Accounts. The financial statements on pages 46 to 67 of the Annual
Report and Accounts were approved by the Board of directors of
Calculus VCT plc and were authorised for issue on 17 May 2018 and
were signed on its behalf by:
Michael O'Higgins
Chairman
17 May 2018
STATEMENT OF CASHFLOWS
for the year ended 28 February 2018
Note Year Year
Ended Ended
28 February 28 February
2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Investment income received 67 59
Deposit interest received 2 1
Investment management fees (145) (40)
Other cash payments (264) (107)
-------------------------------------- ---- ------------ ------------
Cash flow from operating activities 14 (340) (87)
-------------------------------------- ---- ------------ ------------
Cash flow from investing activities
Purchase of investments (1,070) (3,561)
Sale of investments 73 1,440
-------------------------------------- ---- ------------ ------------
Net cash flow from investing
activities (997) (2,121)
Cash flow from financing activities
Ordinary share issue/ D share
issue 418 7,546
Expense of Ordinary/D share issue (127) (267)
IFA commissions (3) -
Neptune-Calculus cash received 286 -
Expenses of Neptune-Calculus
transaction (102) -
Share buybacks for cancellation (49) -
Equity dividend paid (601) (1,338)
-------------------------------------- ---- ------------ ------------
Net cash flow from financing
activities (178) 5,941
-------------------------------------- ---- ------------ ------------
(Decrease)/increase in cash and
cash equivalents (1,515) 3,733
-------------------------------------- ---- ------------ ------------
Analysis of changes in cash and
cash equivalents
-------------------------------------- ---- ------------ ------------
Cash and cash equivalents at
the beginning of year 3,782 49
Net cash (decrease)/increase (1,515) 3,733
Cash and cash equivalents at
the year end 2,267 3,782
-------------------------------------- ---- ------------ ------------
The cash flows for the year to 28 February 2018 include cash
movements attributable to the original ordinary shares C shares and
D shares prior to the merger of the classes. The cash flows for the
year to 28 February 2017 represent the combined cash movements
attributable to the original ordinary shares C shares and D
shares.
The notes on pages 51 to 67 of the Annual Report and Accounts
form an integral part of these Accounts.
NOTES TO THE ACCOUNTS
1. Company Information
The Company is incorporated in England and Wales and operates
under the Companies Act 2006 (the Act) and the regulations made
under the Act as a public company limited by shares, with
registered number 07142153. The registered office of the Company is
104 Park Street, London, W1K 6NF.
2. Accounting Policies
Basis of Accounting
The financial statements have been prepared on a basis compliant
with applicable United Kingdom accounting standards, including
Financial Reporting Standard 102 - The Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland ('FRS102')
and with the Act. The Directors have prepared the financial
statements on a basis compliant with the recommendations of the
Statement of Recommended Practice ("the SORP") for Investment Trust
Companies and Venture Capital Trusts produced by the Association of
Investment Companies ("AIC").
The financial statements are presented in Sterling (GBP).
Expenses up to the date of the merger of the share classes were
allocated between the old ordinary share fund, C share fund and the
D share fund on the basis of the ratio of the net asset value of
the previous month unless the expense is attributable in full to
one of the funds.
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 month from the date these
financial statements were approved). The Company therefore
continues to adopt the going concern basis in preparing its
financial statements.
Significant judgements and estimates
Preparations of the financial statements requires management to
make significant judgements and estimates. The items in the
financial statements where these judgements and estimates have been
made are in the valuation of unquoted investments. The valuation
methodologies used when valuing unquoted investments provide a
range of possible values. Judgements are used to estimate where in
the range the fair value lies. The sensitivity analysis in note 16
demonstrates the impact on the portfolio of applying alternative
values in the upside and downside.
As at 28 February 2018 the value of unquoted investments
included within the Company's investment portfolio was GBP4,726,742
(2017 original ordinary fund: GBP880,512; 2017 C share fund:
GBP531,744; 2017 D share fund: GBP599,990).
Investments
The Company has adopted FRS 102, sections 11 and 12, for the
recognition of financial instruments. The Company's business is
investing in financial assets with a view to profiting from their
total return in the form of increases in fair value. Fair value is
the amount for which an asset can be exchanged between
knowledgeable, willing parties in an arm's length transaction. The
Company manages and evaluates the performance of these investments
on a fair value basis in accordance with its investment strategy,
and information about the investments is provided on this basis to
the Board of directors.
Investments held at fair value through profit or loss are
initially recognised at fair value, being the consideration given
and excluding transaction or other dealing costs associated with
the investment, which are expensed and included in the capital
column of the Income Statement.
After initial recognition, investments, which are classified as
at fair value through profit or loss, are measured at fair value.
Gains or losses on investments classified as at fair value through
profit or loss are recognised in the capital column of the Income
Statement and allocated to the capital reserve - unrealised or
realised as appropriate.
All purchases and sales of quoted investments are accounted for
on the trade date basis. All purchases and sales of unquoted
investments are accounted for on the date that the sale and
purchase agreement becomes unconditional.
For quoted investments and money market instruments fair value
is established by reference to bid, or last, market prices
depending on the convention of the exchange on which the investment
is quoted at the close of business on the balance sheetdate.
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 International Private Equity and Venture
Capital ("IPEVC") guidelines. Primary indicators of fair value are
derived from earnings or sales multiples, using discounted cash
flows, recent arm's length market transactions by independent third
parties, from net assets, or where appropriate, at price of recent
investments.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents does not include liquidity fund investments as the
Company does not consider the risk associated with changes in value
to be insignificant.
Debtors
Short term debtors are measured at transaction price, less any
impairment.
Creditors
Short term trade creditors are measured at the transaction
price.
Income
Dividends receivable on equity shares are recognised as revenue
on the date on which the shares or units are marked as ex-dividend.
Where no ex-dividend date is available, the revenue is recognised
when the Company's right to receive it has been established.
Interest receivable from fixed income securities and premiums on
loan stock investments and preference shares is recognised using
the effective interest rate method. Interest receivable and
redemption premiums are allocated to the revenue column of the
Income Statement.
Interest receivable on bank deposits is included in the
financial statements on an accruals basis. Provision is made
against this income where recovery is doubtful.
Other income is credited to the revenue column of the Income
Statement when the Company's right to receive the income is
established.
Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged to the Income Statement as follows:
Expenses are charged through revenue in the Income Statement
except as follows:
-- costs which are incidental to the acquisition or disposal of
an investment are taken to the capital column of the Income
Statement.
-- expenses are charged to the capital column in the Income
Statement where a connection with the maintenance or enhancement of
the value of the investments can be demonstrated. In this respect
investment management fees have been allocated 75 per cent to the
capital column and 25 per cent to the revenue column in the Income
Statement, being in line with the Board's expected long-term split
of returns, in the form of capital gains and revenue respectively,
from the investment portfolio of the Company.
-- expenses associated with the issue of shares are deducted
from the share premium account. Annual IFA trail commission
covering a five-year period since share allotment has been provided
for in the Accounts as, due to the nature of the Company, it is
probable that this will be payable. The commission is apportioned
between current and non-current liabilities.
Expenses incurred by the Company in excess of the agreed cap,
currently 3 per cent of NAV (excluding irrecoverable VAT, annual
trail commission and performance incentive fees), could be clawed
back from Calculus Capital Limited. Any clawback is treated as a
credit against the expenses of the Company.
Capital reserve
The realised capital return component of the return for the year
is taken to the distributable capital reserves and the unrealised
capital component of the return for the year is taken to the
non-distributable capital reserves within the Statement of Changes
in Equity.
Share Premium
The share premium is the excess paid by shareholders on share
allotments above the nominal value of the share. There is currently
a share premium account on the Ordinary shares issued since 1
November 2017. In order to allow the portfolios to pay dividends to
shareholders using a distributable capital reserve, the special
reserve was created on the cancellation of the share premium
account on 20 October 2010 for original ordinary shares, 23
November 2011 for C shares and 1 November 2017 for the Ordinary
share class.
Special reserve
The special reserve was created by the cancellation of the
original ordinary share fund's share premium account on 20 October
2010. A further cancellation of the share premium account occurred
on 23 November 2011 for both the original ordinary share fund and C
share fund. A further cancellation of the share premium account
occurred on 1 November 2017 for the Ordinary share fund. The
special reserve is a distributable reserve created to be used by
the Company inter alia to write off losses, fund market purchases
of its own shares and make distributions and/or for other corporate
purposes.
The Company was formerly an investment company under section 833
of the Companies Act 2006. On 18 May 2011, investment company
status was revoked by the Company. This was done in order to allow
the Company to pay dividends to shareholders using the special
reserve.
Taxation
Deferred tax must be 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 to shareholders are accounted for in the period in
which they are paid or approved in general meetings. Dividends
payable to equity shareholders are recognised in the Statement of
Changes in Equity when they are paid or have been approved by
shareholders in the case of a final dividend and become a liability
of the Company.
Share buybacks
Where shares are purchased for cancellation, the consideration
paid, including any directly attributable incremental costs, is
deducted from distributable reserves. As required by the Companies
Act 2006, the equivalent of the nominal value of shares cancelled
is transferred to the capital redemption reserve.
3. Income
Year Ended Year Ended
28 February 28 February
2018 2017
GBP'000 GBP'000
UK dividends - 3
UK unfranked loan stock interest 59 54
Liquidity Fund interest 4 4
Bank interest 2 1
---------------------------------- ------------ ------------
65 62
---------------------------------- ------------ ------------
Total income comprises:
Interest 65 59
Dividends - 3
---------------------------------- ------------ ------------
65 62
---------------------------------- ------------ ------------
All income arose in the United Kingdom.
The Board considered operating segments and considered there to
be one, that of investing in financial assets.
4. Investment Management Fee
Year Ended 28 Year Ended 28
February 2018 February 2017
------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------- -------- -------- -------- -------- --------
Investment
management
fee 39 115 154 16 47 63
------------- -------- -------- -------- -------- -------- --------
No performance fee was paid during the year.
For the year ended 28 February 2018, Calculus Capital Limited
contributed GBP26,435 (2017: GBP20,492 contributed) to the expenses
of the Company such that its net management fee was GBP127,654
(2017: 42,346 contributed). At 28 February 2018, there was
GBP42,310 due to Calculus Capital Limited for management fees
(2017: GBP32,949 due to Calculus Capital Limited).
Details of the terms and conditions of the investment management
agreement are set out in the Directors' Report.
5. Other expenses
Year Ended Year Ended
28 February 28 February
2018 2017
GBP'000 GBP'000
Directors' fees 57 50
Calculus secretarial fee 18 18
Link accounting fees 40 38
Fees payable to the Company's
auditor for the audit of the
company's annual accounts. 28 22
Other 85 85
Clawback of expenses in excess
of expense cap repayable from
the Manager (26) (20)
-------------------------------- ------------ ------------
202 193
-------------------------------- ------------ ------------
Further details of directors' fees can be found in the
Directors' Remuneration Report on page 35 to 38 of the Annual
Report and Accounts.
6. Taxation
Year Ended 28 Year Ended 28
February 2018 February 2017
------------------------ ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- -------- -------- -------- --------
Loss before tax (231) (42) (273) (147) (191) (338)
------------------------ -------- -------- -------- -------- -------- --------
Theoretical tax
at UK Corporation
Tax rate of 19.1%
(2017: 20.0%) (44) (8) (52) (30) (38) (68)
Timing differences:
loss not recognised,
carried forward 44 22 30 9 39
Effects of non-taxable
gains (14) - 29 29
------------------------ -------- -------- -------- -------- -------- --------
Tax charge - - - - - -
------------------------ -------- -------- -------- -------- -------- --------
On 1 April 2017, the Corporation Tax rate decreased from 20% to
19%. The rate remained at 19% for the remainder of the reporting
period.
At 28 February 2018, the Company had GBP1,184,503 (28 February
2017: GBP904,125) of excess management expenses to carry forward
against future taxable profits.
The Company's deferred tax asset of GBP201,365 (28 February
2017: GBP153,701) 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
28 February 28 February
2018 2017
GBP'000 GBP'000
Original ordinary shares
Declared and paid: 7.00p per
Ordinary share in respect of
the year ended 28 February
2018 (2017: 7.00p) 332 332
C shares
Declared and paid: 3.00p per
C share in respect of the year
ended 28 February 2018 (2017:
4.50p) 58 87
Declared and paid: nil per
C share in respect of the year
ended 28 February 2017 (2016:
47.6p) - 919
D shares
Declared and Paid: 4.25p per
Eligible D share in respect
of the year ended 28 February
2018 (2017: 0.00p) 211 -
--------------------------------- ----------- ------------
The Board have proposed an Ordinary share dividend in respect of
the year to 28 February 2018 of 4 pence per share which, if
approved by shareholders, will be paid to all Ordinary shareholders
on the register on 5 July 2018 other than those who subscribed for
new Ordinary shares after 1 August 2017.
The proposed dividend is subject to approval by shareholders at
the forthcoming Annual General Meeting and has not been included as
a liability in these Accounts.
8. Return per share
Year Ended 28 February Year Ended 28 February
2018 2017
------------ -------------------------- --------------------------
Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence
------------ -------- -------- ------ -------- -------- ------
Return per
Ordinary
share (2.3) (0.4) (2.7) (3.8) (4.9) (8.7)
------------ -------- -------- ------ -------- -------- ------
Return per
original
ordinary
share - - - (0.6) (3.1) (3.7)
------------ -------- -------- ------ -------- -------- ------
Return per
C share - - - (1.8) 2.6 0.8
------------ -------- -------- ------ -------- -------- ------
Return per
D share - - - (3.1) (3.5) (6.6)
------------ -------- -------- ------ -------- -------- ------
Ordinary share return
From 1 March 2016 to 31 July 2017 the Company's share capital
comprised ordinary shares, C shares and D shares. On 1 August 2017
the share classes were merged to create one class of Ordinary
shares. One Ordinary share was calculated to be equivalent to
0.1442 ordinary shares or 0.2435 C shares or one D share (the
merger ratios). To calculate a return per Ordinary share for the
period to 31 July 2017 (and for the comparative year to 28 February
2017), it is not considered meaningful to treat an ordinary share
or a C share as equal to an Ordinary share nor to treat the share
classes as equal to each other as the shares were represented by
differing amounts of assets generating different returns.
Accordingly, for this period (and for the year ended 28 February
2017) the number of Ordinary shares has been taken to be the
aggregate equivalent number of Ordinary shares which each share
class represented on the basis of the merger ratios. Throughout the
period 1 March to 31 July 2017 the number of original ordinary
shares was 4,738,463 equivalent to 683,243 Ordinary Shares (2017:
4,738,463 original ordinary shares equivalent to 683,243 Ordinary
Shares) and the number of C shares was 1,931,095 equivalent to
470,197 Ordinary shares (2017: 1,931,095 C shares equivalent to
470,197 Ordinary shares). 7,511,697 D shares (equivalent to
7,511,697 Ordinary shares) were in existence at 1 March 2017 and a
further 160,810 D shares (equivalent to 160,810 Ordinary Shares)
were issued on 7 April 2017. 2,511,180 new Ordinary shares were
issued on 12 September 2017, 367,800 new Ordinary shares were
allotted on 20 December 2017 and 62,210 new Ordinary shares were
bought back between 3 and 11 January 2018. On this basis, the
weighted average number of Ordinary Shares for the period 1 March
to 28 February 2018 was 10,033,757 Ordinary shares. (2017:
2,720,280 as the weighted average number of Ordinary shares is the
same as the weighted average number of D shares in this year).
Revenue return per Ordinary share is based on the net revenue
loss after taxation of GBP230,358 (2017: GBP146,730) and on
10,033,757 Ordinary shares, (2017: 3,873,720 implied Ordinary
shares) being the weighted average number of Ordinary shares in
issue during the period.
Capital return per Ordinary share is based on the net capital
loss for the period of GBP42,305 and on 10,033,757 Ordinary shares
(2017: 3,873,720 implied Ordinary shares) being the weighted
average number of Ordinary shares in issue during the period.
Total return per Ordinary share is based on the net loss for the
period of GBP272,663 and on 10,033,757 Ordinary shares (2017:
3,873,720 implied Ordinary shares), being the weighted average
number of Ordinary shares in issue during the period.
Original ordinary Share return
Previously reported revenue return per Ordinary share is based
on the net revenue loss after taxation of GBP30,481 and on
4,738,463 Ordinary shares, being the weighted average number of
Ordinary shares in issue during the year to 28 February 2017.
Previously reported capital return per Ordinary share is based
on the net capital loss for the year of GBP145,957 and on 4,738,463
Ordinary shares, being the weighted average number of Ordinary
shares in issue during the year to 28 February 2017.
Previously reported total return per Ordinary share is based on
the total loss after taxation of GBP176,438 and on 4,738,463
Ordinary shares, being the weighted average number of Ordinary
shares in issue during the year to 28 February 2017.
C share return
Previously reported revenue return per C share is based on the
net revenue loss after taxation of GBP33,187 and on 1,931,095 C
shares, being the weighted average number of C shares in issue
during the year to 28 February 2017.
Previously reported capital return per C share is based on the
net capital gain for the year of GBP49,541 and on 1,931,095 C
shares, being the weighted average number of C shares in issue
during the year to 28 February 2017.
Previously reported total return per C share is based on the
total gain for the year of GBP16,354 on 1,931,095 C shares, being
the weighted average number of C shares in issue during the year to
28 February 2017.
D share return
Previously reported revenue return per D share is based on the
net revenue loss after taxation of GBP83,062 and on 2,720,280 D
shares, being the weighted average number of D shares in issue
during the year to 28 February 2017.
Previously reported capital return per D share is based on the
net capital loss for the year of GBP95,039 and on 2,720,280 D
shares being the weighted average number of D shares in issue
during the year to 28 February 2017.
Previously reported total return per D share is based on the
total loss for the year of GBP178,101 and on 2,720,280 D shares,
being the weighted average number of D shares in issue during the
year to 28 February 2017.
9. Investments
Year Ended 28 February
2018
--------------------------------- ------------------------------------
VCT
Qualifying Other
Investments Investments Total
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ --------
Opening book cost 2,322 2,645 4,967
Opening investment holding
losses (59) (2) (61)
--------------------------------- ------------ ------------ --------
Opening valuation 2,263 2,643 4,906
--------------------------------- ------------ ------------ --------
Movements in year:
Purchases at cost 1,070 - 1,070
Sales proceeds (73) - (73)
Acquisition of Neptune-Calculus
investments 2,001 5 2,006
Realised losses on sales (157) (2) (159)
Increase in investment
holding gains/(losses) 228 4 232
--------------------------------- ------------ ------------ --------
Movements in year 3,069 7 3,076
--------------------------------- ------------ ------------ --------
Closing valuation 5,332 2,650 7,982
--------------------------------- ------------ ------------ --------
Closing book cost 5,163 2,648 7,811
Closing investment holding
gains 169 2 171
--------------------------------- ------------ ------------ --------
Closing valuation 5,332 2,650 7,982
--------------------------------- ------------ ------------ --------
There have not been any transaction costs in the year to 28
February 2018, nor in the year to 28 February 2017.
Note 16 of the Annual Report and Accounts provides a detailed
analysis of investments held at fair value through profit or
loss.
10. Debtors
Year Ended Year Ended
28 February 28 February
2018 2017
GBP'000 GBP'000
Prepayments and accrued income 18 14
Clawback of expenses in excess
of 3% cap payable by the Manager 26 -
----------------------------------- ------------ ------------
44 14
----------------------------------- ------------ ------------
11. Creditors
Year Ended Year Ended
28 February 28 February
2018 2017
GBP'000 GBP'000
Management fees 42 33
Audit fees 33 27
Directors' fees 11 8
Secretarial fees 5 5
Administration fees 3 9
Costs of acquiring Neptune-Calculus
assets and liabilities 8 -
Other creditors 40 197
142 279
------------------------------------- ------------ ------------
12. Share Capital
Original
Ordinary ordinary
Number of shares share share C share D share
----------- ------------ ------------ ------------
Opening balance
01 March 2017 - 4,738,463 1,931,095 7,511,697
New issue of shares - - - 160,810
Conversion of shares
to deferred shares
and cancellation
of deferred shares - (4,055,220) (1,460,898)
All shares renamed
Ordinary shares 8,825,947 (683,243) (470,197) (7,672,507)
New issue Ordinary 2,511,180 - - -
shares (Neptune
Calculus merger)
New issue Ordinary 367,800 - - -
shares
Share buyback Ordinary (62,210) - - -
shares
------------
Closing balance 11,642,717 - - -
28 February 2018
------------------------ ----------- ------------ ------------ ------------
Original
Ordinary ordinary
share share C share D share
Nominal value GBP'000 GBP'000 GBP'000 GBP'000
--------- ---------- --------- ---------
Opening balance
01 March 2017 - 47 19 75
New issue of shares - - - 2
Conversion of shares
to deferred shares
and cancellation
of deferred shares - (40) (14)
All shares renamed
Ordinary shares 89 (7) (5) (77)
New issue Ordinary 25 - - -
shares (Neptune
Calculus merger)
New issue Ordinary 3 - - -
shares
Share buyback Ordinary (1) - - -
shares
---------
Closing balance 116 - - -
28 February 2018
------------------------ --------- ---------- --------- ---------
In April 2017 the Company issued 160,810 D shares for a total
consideration of GBP155,005. The D shares that were issued prior to
1 January 2017 ranked for the dividend of 4.25 pence per share that
was paid on 1 September 2017. The D shares subscribed for after 1
January 2017 were not eligible for any dividends declared in
respect of the Company's year ended 28 February 2017.
On 31 July 2017, based on adjusted net asset value per share of
the respective share classes at 28 February 2017, it was calculated
that 1 D share was equivalent to 0.1442 ordinary shares and 0.2435
C shares. The 4,738,463 ordinary shares in issue at that date were
therefore equivalent to 683,243 D shares and the 1,931,095 C shares
were equivalent to 470,197 D shares.
To effect the merger of the classes, on 1 August 2017 the
Company converted 4,055,220 ordinary shares of 1p and 1,460,898 C
shares of 1p into 4,055,220 deferred shares of 1p and 1,460,898
deferred shares of 1p respectively to create a total of 5,516,118
deferred shares of 1p each leaving 683,243 ordinary shares and
470,197 C shares. On the same day the C shares were renamed
ordinary shares and the D shares were renamed Ordinary shares. On
17 August 2017 the 5,516,118 deferred shares were re-purchased by
the Company for cancellation for a total cost of 1 penny. The above
resulted in 8,825,947 Ordinary shares being in issue as at that
date.
On 12 September 2017 2,511,180 Ordinary shares were issued to
shareholders of Neptune-Calculus to acquire all the assets and
liabilities of that company which were valued at GBP2,202,100.
On 20 December 367,800 Ordinary shares were issued for a total
consideration of GBP312,408.
In January 2018, 62,210 Ordinary shares were bought back for
cancellation at 78p per share for an aggregate consideration of
GBP48,524. Since the year end the Company has issued 1,779,298
Ordinary shares for a total consideration of GBP1,519,000.
All Ordinary shares are fully paid, rank pari passu and carry
one vote per share.
Ordinary shares that were issued after 1 August 2017 do not rank
for the dividend of 4 pence per share that has been announced and
will be paid on 26 July 2018 subject to the shareholder
approval.
Under the Articles of Association, a resolution for the
continuation of the Company as a VCT will be proposed at the Annual
General Meeting falling after the tenth anniversary of the last
allotment (from time to time) of shares in the Company and
thereafter at five-yearly intervals.
13. Net Asset Value per Share
28 February 28 February
2018 2017
------------------------------ ----------- -----------
Ordinary Share
Net asset value per Ordinary
share 87.0p 97.2p
------------------------------ ----------- -----------
The basic net asset value per Ordinary share is based on net
assets of GBP10,129,722 (28 February 2017:
GBP8,423,089) and on 11,642,717 Ordinary shares (28 February
2017: GBP8,665,137), being the number of Ordinary shares in issue
at the end of the year (28 February 2017: the implied number of
Ordinary shares at 28 February 2017 on the assumption that the
merger of the share classes happened on 1 March 2016 using the
conversion ratio set out in note 12). Of the 11,642,717 Ordinary
shares in issue, 376,800 Ordinary shares do not rank for the
proposed final dividend of 4p per share. Taking account of the
differing dividend entitlements, the attributable net asset value
per Ordinary share for shares entitled to the dividend is 87.13p
and for those shares not entitled to the dividend it is 83.13p.
Original ordinary share
Net asset value per original
ordinary share -20.6p
------------------------------ -----
The previously reported basic net asset value per original
ordinary share was based on net assets of GBP977,699 and on
4,738,463 Ordinary shares, being the number of Ordinary shares in
issue at the end of the year.
C share
Net asset value per C share -26.0p
----------------------------- -----
The previously reported basic net asset value per C share is
based on net assets of GBP502,438 and on 1,931,095 C shares, being
the number of C shares in issue at the end of the year.
D share
Net asset value per D share -92.4p
----------------------------- -----
The previously reported basic net asset value per D share is
based on net assets of GBP6,942,952 and on 7,511,697 D shares,
being the number of D shares in issue at the end of the year.
14. Reconciliation of Net Loss before Tax to Cash Flow from
Operating Activities
Year Ended Year Ended
28 February 28 February
2018 2017
GBP'000 GBP'000
Ordinary shares
Loss for the year (273) (338)
(Gains)/losses on investments (73) 144
(Increase)/decrease in debtors (30) 71
(Decrease)/increase in creditors (137) 36
Change in IFA commission
accrual 21 -
D share issue costs included
in finance activities 157 -
Neptune-Calculus costs included
in finance activities (8) -
IFA commission costs included
in finance activities 3 -
---------------------------------- ------------ ------------
Cash flow from operating
activities (340) (87)
---------------------------------- ------------ ------------
15. Financial Commitments
At 28 February 2018, the Company did not have any financial
commitments which had not been accrued for.
16. Financial Instruments
The Company's financial instruments comprise securities and cash
and liquid resources that arise directly from the Company's
operations.
The principal risks the Company faces in its portfolio
management activities are:
-- Market price risk
-- Liquidity risk
The Company does not have exposure to foreign currency risk.
a) Market price risk
Qualifying Investments
Market risk embodies the potential for losses and includes
interest rate risk and price risk.
The management of market price risk is part of the investment
management process. The portfolio is managed in accordance with
policies in place as described in more detail in the Chairman's
Statement and Investment Manager's Review (Qualifying
Investments).
The Company's strategy on the management of investment risk is
driven by the Company's investment objective as outlined above.
Investments in unquoted companies and AIM-traded companies, by
their nature, involve a higher degree of risk than investments in
the main market. Some of that risk can be mitigated by diversifying
the portfolio across business sectors and asset classes.
Interest is earned on cash balances and money market funds and
is linked to the banks' variable deposit rates. The Board does not
consider interest rate risk to be material. Interest rates arising
on loan stock instruments is not considered significant as the main
risk on these investments are credit risk and market price risk.
The interest rate earned on the loan stock instruments is disclosed
below:
Effective interest
rate on 28 February
2018 %
AnTech Limited 12.0
Solab Group Limited 12.0
Terrain Energy Limited 15.0
------------------------ --------------------
At the year end, no loan stock interest was overdue.
An analysis of financial assets and liabilities, which
identifies the risk of the Company's holding of such items, is
provided. The Company's financial assets comprise equity, loan
stock, cash and debtors. The interest rate profile of the Company's
financial assets is given in the table below:
As at 28 February As at 28 February
2018 2017
-------------------- -------------------------------- ----------------------------
Fair Value Cash Flow Fair Value Cash Flow
Interest Interest Interest Interest
Rate Rate Rate Rate
Risk GBP'000 Risk GBP'000 Risk GBP'000 Risk GBP'000
-------------------- ----------------- ------------- ------------- -------------
Loan stock 545 - 380 -
Money market funds - 2,645 - 2,643
Cash - 2,267 - 3,782
-------------------- ----------------- ------------- ------------- -------------
545 4,912 380 6,425
-------------------- ----------------- ------------- ------------- -------------
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 0.5 per cent as at 28 February 2018.
Credit risk is considered to be part of market risk.
Where an investment is made in loan stock issued by an unquoted
company, it is made as part of an overall equity and debt package.
The recoverability of the debt is assessed as part of the overall
investment process and is then monitored on an ongoing basis by the
Investment Manager who reports to the Board on any recoverability
issues.
Credit risk arising on transactions with brokers relates to
transactions awaiting settlement. Risk relating to unsettled
transactions is considered to be small due to the short settlement
period involved and the high credit quality of the brokers used.
The Board monitors the quality of service provided by the brokers
used to further mitigate this risk.
All the assets of the Company which are traded on AIM are held
by Investec Wealth & Investment, the Company's custodian.
Bankruptcy or insolvency of the custodian may cause the Company's
rights with respect to securities held by the custodian to be
delayed or limited. The Board and the Investment Manager monitor
the Company's risk by reviewing the custodian's internal control
reports.
b) Liquidity risk
The Company's liquidity risk is managed on an ongoing basis by
the Investment Manager. The Company's overall liquidity risks are
monitored on a quarterly basis by the Board.
The Company maintains sufficient investments in cash and readily
realisable securities to pay accounts payable and accrued expenses
as they fall due.
Qualifying Investments
The Company's financial instruments include investments in
unlisted equity investments which are not traded in an organised
public market and which may be illiquid. As a result, the Company
may not be able to realise quickly some of its investments at an
amount close to their fair value in order to meet its liquidity
requirements, or to respond to specific events such as
deterioration in the creditworthiness of any particular issuer.
The Board seeks to ensure that an appropriate proportion of the
Company's investment portfolio is invested in cash and readily
realisable assets, which are sufficient to meet any funding
commitments that may arise.
Under its Articles of Association, the Company has the ability
to borrow a maximum amount equal to 25 per cent of its gross
assets. As at 28 February 2018, 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.
Ordinary share fund
Financial Assets at Fair Value
through Profit or Loss
At 28 February 2018
----------------- --------------------------------------
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- -------- --------
Unquoted equity - - 4,182 4,182
Quoted equity 610 - - 610
Money market
funds 2,645 - - 2,645
Loan stock - - 545 545
----------------- -------- -------- -------- --------
3,255 - 4,727 7,982
----------------- -------- -------- -------- --------
Total share fund
Financial Assets at Fair Value
through Profit or Loss
At 28 February 2017
----------------- --------------------------------------
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- -------- --------
Unquoted equity - - 1,632 1,632
Quoted equity 251 - - 251
Money market
funds 2,643 - - 2,643
Loan stock - - 380 380
----------------- -------- -------- -------- --------
2,894 - 2,012 4,906
----------------- -------- -------- -------- --------
Where the effect of changing one or more inputs to reasonably
possible alternative assumptions would result in a significant
change to the fair value measurement, information on this
sensitivity is provided below. The information used in
determination of the fair value of Level 3 investments is chosen
with reference to the specific underlying circumstances and
position of the investee company. The portfolio has been reviewed
and both downside and upside reasonable possible alternative
assumptions have been identified and applied to the valuation of
the unquoted investments.
The assumptions changed for the sensitivity analysis are set out
below:
Impact on Impact on
Upside downside
Assumption GBP GBP
----------------------- --------- ---------
Discount rate 340,760 175,590
Forecast 2018 results 146,227 146,227
----------------------- --------- ---------
486,987 (321,817)
----------------------- --------- ---------
Applying the downside alternatives, the Ordinary share fund
would be GBP321,817 or 3.2 per cent lower (Total share fund in
2017: GBP193,064 or 8.5 per cent lower). Using the upside
alternatives, the Ordinary share fund would be GBP486,987 or 4.8
per cent higher (Total share fund in 2017: GBP92,425 or 4.1 per
cent higher).
17. Related Parties' Transactions
Kate Cornish Bowden, John Glencross and Diane Seymour-Williams
were shareholders in Neptune-Calculus Income and Growth plc
(Neptune). Pursuant to the acquisition by Calculus VCT plc of the
assets and liabilities of Neptune, on 12 September 2017 in exchange
for their shares in Neptune, they received 30,029, 19,251, and
12,208, Ordinary shares in Calculus VCT plc which were valued at
GBP26,323, GBP16,875 and GBP10,702, respectively.
On 7 April 2017, Kate Cornish Bowden, a director of the Company
subscribed for 10491 D shares. John Glencross a director of the
company is a director of Calculus Capital Limited and owns 50 per
cent of the shares of its holding Company. Calculus Capital Limited
receives an investment manager's fee from the Company. As disclosed
in Note 4, for the year ended 28 February 2018, Calculus Capital
Limited earned GBP154,089 in relation to the Ordinary share
portfolio (Total share fund 2017: GBP62,838). Calculus Capital
Limited also earned a company secretarial fee of GBP18,000 (Total
share fund 2017: GBP18,251).
Calculus Capital Limited took on the expenses cap on 15 December
2015. In the year to 28 February 2018, Calculus Capital Limited
contributed GBP26,435 towards the expenses (2017: contributed
GBP20,492).
All related party transactions were carried out on an arm's
length basis.
18. Transactions with Investment Manager
John Glencross, a Director of the Company, is Chief Executive
and a director of Calculus Capital Limited, the Company's
Investment Manager. He does not receive any remuneration from the
Company. He is a director of Terrain Energy Limited.
Calculus Capital Limited receives a fee from certain portfolio
companies. In the year to 28 February 2018, Calculus Capital
Limited charged a monitoring fee to Air Leisure Group Limited,
AnTech Limited, Arcis Biotechnology Holdings Limited, Cornerstone
Brands Limited, Every1Mobie Limited, MicroEnergy Generation
Services Limited, Origin Broadband Limited, Park Street Shipping
Limited, Quai Administration Services Limited, Solab Group Limited,
Synpromics Limited, Terrain Energy Limited, The One Place Capital
Limited, Tollan Energy Limited and Weeding Technologies
Limited.
Calculus Capital Limited charged a fee for the provision of a
director to Air Leisure Group Limited, Cornerstone Brands Limited,
Every1Mobile Limited, Origin Broadband Limited, Pico's Limited,
Terrain Energy Limited, The One Place Capital Limited and Weeding
Technologies Limited.
In the year to 28 February 2018, Calculus Capital Limited
charged Air Leisure Group Limited, Blu Wireless Technology Limited,
Cornerstone Brands Limited, Every1Mobile Limited, Open Energy
Market Limited, Origin Broadband Limited, Quai Administration
Services Limited and Synpromics Limited an arrangement fee.
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: GBP1,578 (2017: GBP3,000); AnTech
Limited: GBP972 (2017: GBP948); Arcis Biotechnology Holdings:GBP87
(2017:GBPnil); Blu Wireless Technology Limited: GBP5,172 (2017:
GBPnil); Cornerstone Brands Limited: GBP5,780 (2017: GBPnil);
Every1Mobile Limited: GBP6,459 (2017:GBPnil); MicroEnergy
Generation Services Limited: GBP1,734 (2017: GBP1,554); Open Energy
Market Limited: GBP5,999 (2017:GBPnil); Origin Broadband Limited:
GBP2,544 (2017: GBP3,000); Park Street Shipping Limited: GBP836
(2017: GBP4,500); Pico's Limited: GBP318 (2017: GBP389); Quai
Administration Services Limited: GBP3,122 (2017: GBP924); Solab
Group Limited: GBP2,906 (2017: GBP1,479); Synpromics Limited:
GBP131 (2017:GBPnil); Terrain Energy Limited: GBP1,094 (2017:
GBP802); The One Place Capital Limited: GBP786 (2017: GBP817);
Tollan Energy Limited: GBP1,659 (2017: GBP1,611); and Weeding
Technologies Limited GBP1,960 (2017: GBP3,000) (all excluding
VAT).
19. Post balance sheet events
Since the year end, allotments of 1,779,298 Ordinary shares in
respect of the 2017/18 tax year took place on 4th and 5th April at
an average issue price of GBP0.8537 per share.
GLOSSARY OF TERMS
Accumulated Shareholder Value
The sum of the current NAV and cumulative dividends paid to
date.
C share fund
The net assets of the Company attributable to the former C
shares (including any income and/or revenue arising from or
relating to such assets) prior to the merger of the share
classes.
D share fund
The net assets of the Company attributable to the D shares
(including any income and/or revenue arising from or relating to
such assets) prior to the merger of the share classes.
IPEV Guidelines
The International Private Equity and Venture Capital Valuation
Guidelines, 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).
Total/Total Fund
In the comparative figures for the year to 28 February 2017, the
aggregate net assets of the Company attributable to the ordinary
shares, C shares and D shares including any income and/or revenue
arising from or relating to those assets.
VCT Value
The value of an investment calculated in accordance with section
278 of the Income Tax Act 2007 (as amended).
Qualifying Investments
An unquoted (or AIM-traded) company which satisfies the
requirements of Part 4, Chapter 6 of the Income Tax Act 2007 (as
amended).
END
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on this announcement (or
any other website) is incorporated into, or forms part of, this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ZDLFFVEFZBBF
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