TIDMCLC
RNS Number : 3605Z
Calculus VCT PLC
20 May 2021
Calculus VCT plc
Legal Entity Identifier: 2138005SMDWLMMNPVA90
Annual Financial Report for the year ended 28 February 2021
The Annual Report and Financial Statements ("Annual Report and
Accounts") for the year ended 28 February 2021 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:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
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 2021 Year to 29 February
2020
Net Asset Value per share 67.08p 70.20p
Final dividend proposed 3.02p 3.20p
Annual yield* 4.50% 4.56%
Total return/(deficit)
per share* 0.98p (2.58)p
Share price 60.00p 50.00p
Share price discount* 10.55% 28.77%
*These are Alternative Performance Measures (APM's) which have
been defined in the glossary on pages 78 and 79 of the Annual
Report
Portfolio Review
2021 GBP'000 2020 GBP'000
Opening portfolio value 14,309 11,593
New and follow on investments
made 5,016 3,511
Disposal proceeds (413) (588)
Realised net gains or losses 194 122
Prior year unrealised (gains)/losses 122 -
realised during the period
Unrealised valuation movements 404 (329)
Closing portfolio value 19,632 14,309
Investment Portfolio Yield
2021 GBP'000 2020 GBP'000
Loan interest 143 121
Total portfolio income
in the year 151 154
Portfolio value at year
end 19,632 14,309
Portfolio income yield 0.77% 1.08%
NAV performance during the year ended 28 February 2021
The audited net asset value per ordinary share as at 29 February
2020 was 70.2 pence per share. However, due to the effects of the
global pandemic being experienced the NAV was revalued to 65.1
pence per share (unaudited) as of 31 March 2020. In July 2020, the
Company's NAV reduced as a result of paying out a dividend of 3.20
pence per share. Since then, the Company's NAV has steadily been
increasing towards our pre COVID-19 NAV position. As at 28 February
2021 the audited NAV stood at 67.08 pence per share.
Strategic Report
The Strategic Report has been prepared in accordance with the
requirements of Section 414A of the Companies Act 2006 (the
"Act").
It's purpose is to inform members of the Company and help them
assess how the Directors have performed their legal duty under
Section 172 of the Act, to promote the success of the Company for
the benefit of the members as a whole and, in doing so, have a
regard for the wider stakeholder interests.
Chairman's Statement
I am pleased to present Calculus VCT plc's (the Company) results
for the year ended 28 February 2021. Amidst the ongoing global
pandemic, it has been an active and resilient year for the Company
with ten new investments made on behalf of the qualifying portfolio
and over GBP4.3m new Ordinary shares allotted during the year.
Results for the year
The Company invests in a diverse portfolio of established UK
growth companies whether unquoted or traded on AIM. Our investments
are intended to support those companies to grow, innovate and scale
up. Simultaneously, the Company aims to achieve long-term returns,
including tax-free dividends, for investors through its Investment
Manager, Calculus Capital Limited (Calculus Capital), who have
demonstrated their experience in a range of successful exits. The
Board aims to maintain a regular tax-free annual dividend of 4.5
per cent whilst also maintaining the net asset value.
The net asset value per Ordinary share as at 28 February 2021
was 67.08 pence, compared to 70.20 pence as at 29 February 2020,
this is after paying a dividend of 3.20 pence per share. Since the
February 2020 year end, the NAV per share was revalued to 65.07
pence as announced in March 2020 due to the effects of the global
pandemic, however, despite the ongoing disruption due to COVID-19
and the continuing challenges it presents, the Board is pleased
with the resilience of the Company's portfolio and the positive
uplifts in the valuations of a number of portfolio companies.
The most significant movement in the qualifying portfolio on the
upside was C4X Discovery plc (C4XD), which increased the NAV by
GBP0.7m. C4XD is a drug discovery and development company that uses
cutting-edge software technology to design and develop drug
candidates. C4XD's licensed candidate, a non-opioid drug for the
treatment of opioid use disorder, which has potential milestones
for C4XD of up to a further $284m beyond the $10m payment received
in 2018, progressed well with the commencement of Phase 1 clinical
trials. These are expected to complete in May 2021. In October 2020
C4XD raised GBP15m in a placing on the AIM market. In April 2021,
after the year end, the company announced its second significant
licensing agreement, with Sanofi, a global pharmaceutical company.
Sanofi, using C4XD's technology, will develop and look to
commercialise the programme to provide an oral therapy for a
variety of autoimmune diseases. Under the agreement, C4XD will
receive an upfront payment of EUR7m and could receive up to a
further EUR407m in milestones, in addition to single digit
royalties.
Scancell is an immuno-oncology company with a primary focus to
develop innovative immunotherapies for cancer that stimulate the
body's own immune system. Scancell made headline news when the
Daily Telegraph featured Scancells' work on developing a universal
vaccine that has a greater prospect of working on all COVID-19
variants by targeting the core of the virus instead of just the
spike protein. If successful, a new vaccine could be available in
as little as a year. The rise in the share price for Scancell has
translated into a GBP0.4m increase in the NAV.
Genedrive, a molecular diagnostics company has uplifted the NAV
by GBP0.4m during the financial year, primarily due to its
contribution to develop the Genedrive 96 SARS-CoV-2 Kit which is
now CE-IVD marked and available for sale across the European Union
and the UK. The Company is pleased to announce that it has recently
sold its holdings in Genedrive for a 2.8x return since its
acquisition from the Neptune-Calculus Income and Growth VCT plc in
September 2017. The majority of the disposal occurred in February
and the remaining shares were disposed of post year end in
March.
Arecor, Cloud Trade, Essentia Analytics, Fiscaltec, Oxford
Biotherapeutics, Mologic, Raindog Films and Wonderhood also saw
their valuation increase over the year. Altogether these valuation
improvements added a further GBP0.7m to the Company's NAV per
share. Further details of the Company's significant investments can
be found on page 13 to 23 of the Annual Report.
Conversely, during the year, Arcis Biotechnology's' portfolio of
technologies did not transition into material commercial
opportunities. As a result, the Company has prudently reduced the
NAV by GBP0.3m. The Company continues to monitor Arcis closely and
will revalue the company on a periodic basis when other commercial
prospects arise.
Money Dashboard (formerly The One Place Capital), a personal
finance management web and mobile app, has also seen its value
decrease, reducing the NAV by GBP0.2m. The fall stems from
challenges arising from additional controls which the banks have
implemented to the open banking directive introduced by the
Government. For example, requiring external app users to
re-authenticate every 90 days. This has made scaling the Money
Dashboard user base more difficult than anticipated.
Further information on the portfolio can be found in the
Manager's report following this statement.
Impact of COVID-19 and NAV movement
The impact of the economic challenges caused by the pandemic on
the NAV has been mitigated due to several factors. The Company has
been shielded to a degree by holding a significant portion of its
assets in cash, and although some portfolio companies were
adversely affected by the impact of COVID-19, the valuations in
several life sciences companies (as mentioned above) have benefited
from a general rerating of the life sciences sector and, in some
cases, by developing products to aid the fight against
COVID-19.
The NAV as of 29 February 2020 was 70.20 pence, however as the
impact of COVID-19 was felt a few weeks later, the NAV was
subsequently revalued to 65.07 pence. As of the 28 February 2021
the NAV rose to 67.08 pence, an increase of 3 per cent since March
2020. Given the ongoing disruptions and uncertainties in the
current economic climate, the Board is pleased with the Company's
performance.
The most recent unaudited NAV available at the time of
publishing these accounts is 67.31 pence per share as at 31 March
2021.
Venture Capital Investments
Calculus Capital Limited manages the portfolio of VCT qualifying
investments made by the Company.
The Company invested GBP3.8 million in six new investments and
GBP1.2 million in four follow-on investments during the year ended
28 February 2021. New and follow-on investments are set out in the
Manager's review on page 10.
Issue of new Ordinary shares
The offer for subscription for Ordinary Shares that opened on 24
September 2019 and closed on 28 August 2020 received aggregate
subscriptions from the issue of Ordinary shares of GBP4.7
million.
On 8 September 2020, a new offer was launched. The Company had
issued shares for GBP1.6 million of subscriptions under this offer
by the end of the financial year. Of the GBP4.3 million total new
share issues in the year ended 28 February 2021, GBP2.7 million
took place under the offer that closed on 28 August 2020.
On 1 April 2021, the Company issued a further 7.1 million shares
at an average issue price of 65 pence per share.
From September 2019 more than GBP10 million was raised in share
issues, funds generated have and will be used in the investment of
enterprises with growth potential. The current offer will close on
27 August 2021.
Share Buybacks
During the year, 73,209 shares at a consideration of GBP44,846
were bought back for cancellation. In keeping with its policy for
returning funds to shareholders, the Company will continue to
consider opportunities for buybacks in the coming year. The total
shares bought back represent 0.23 per cent of the total holdings
during the year ended 28 February 2021. The share buy backs are
timed to avoid closed periods.
Dividend
The Directors are pleased to announce a final dividend of 3.02
pence per Ordinary share to be paid to all Ordinary
shareholders.
Subject to shareholder approval, the Ordinary share dividend
will be paid on 30 July 2021 to shareholders on the register on 1
July 2021. The deadline for the Scheme Administrator to receive any
applications under the dividend reinvestment scheme is 16 July
2021.
Board Succession
In the July 2020 AGM, Kate Cornish-Bowden stepped down from the
board after nine years of service, The Board would like to thank
Kate for her invaluable contribution as a member of the Board and
Chair of the Audit Committee. On the same date Janine Nicholls was
appointed as a non-executive director and has been chairing the
Audit Committee. Janine is a chartered accountant with over 20
years' experience in private equity across investment, operations,
and governance roles. The Board is pleased to welcome Janine to the
Company.
Developments since the year end
As mentioned above the Company sold its remaining shares in
Genedrive on 3 March 2021 for a consideration of GBP88,021.
Axol Bioscience Ltd, an established provider of stem cells
produced from reprogrammed human blood and tissue cells, and CENSO
Biotechnologies, a cell biology contract research organisation
(CRO), merged on the 19 March 2021. The new entity will become a
leading provider of product and service solutions in the induced
pluripotent stem cell (iPSC)-based neuroscience, immune cell, and
cardiac disease modelling, drug discovery and screening within
pharma and biotechnology companies. On 1 April 2021, the Company
invested GBP650,906 in CENSO Biotechnologies.
On the 29 March 2021, the company made a GBP375,000 investment
into Invizius. Invizius addresses the side effects of dialysis
patients. Currently, life expectancy on dialysis is just one-third
of normal, and half of patients die from cardiovascular
complications. A significant problem is that the immune system sees
the dialysis filter as a foreign body, creating inflammation that
damages the cardiovascular system over time. Invizius's H-Guard(TM)
product is a powerful anti-inflammatory that can be used to coat
the filter surface to 'hide' it and prevent an immune response. The
innovative technology also has potential for use with devices such
as heart and lung machines, stents, and grafts or in organ and cell
transplants.
As mentioned above, since the year end the Company has made a
further allotment of Ordinary shares. On 1 April 2021, a further
7.1 million Ordinary shares were allotted at an average price of 65
pence per share.
Cornerstone FS plc was listed on the AIM market on 6 April
trading at 61.5 pence per share.
The Company made a follow-on investment of GBP50,000 into Arcis
Biotechnology holdings on 30 April 2021. On 10 May 2021, the
Company's holdings in Open Orphan plc were fully divested for a
consideration of GBP100,000 resulting in a 1.8x return.
Outlook
The recovery of the UK economy could be hampered by a spread of
new variants of the COVID-19 virus, however, more than 57 million
people in the UK have received at least one dose of a coronavirus
vaccine - part of the biggest inoculation programme the country has
ever launched. It is hoped that by summer all adults would have
been offered the vaccine, easing national restrictions, and paving
the way for more normal trading conditions to return. The impact of
COVID-19 has been significant across UK society and the UK economy.
The Board was reassured by the swift reaction of the Investment
Manager (the Manager) and the team's increased engagement with
investee companies in the early stages of the pandemic. Despite
these challenges, we ended the year strongly with some notable
successes in our current portfolio and in the exits we have
achieved.
COVID-19 has presented unprecedented challenges to the country
and the economy. As we emerge from the impact of the pandemic, the
UK remains one of the most entrepreneurial and supportive economies
in which to start and grow a business. The Calculus VCT invests
primarily in sectors experiencing long term structural growth and
in companies which can demonstrate a potential for market
leadership. Your Board believes that our Company has an important
contribution to make in helping to rebuild UK economic activity by
continuing to back the growth and scale-up of promising smaller
companies, with both capital and expertise.
Despite the difficult economic conditions presented by this
pandemic, the Company is pleased to announce that the VCT has
successfully fund raised over GBP10 million since September
2019.
Calculus Capital is a long-term investor, actively identifying
attractive investment opportunities. As such, the Manager will
continue to deploy capital to proactively support companies through
these challenging times and to invest in selective new
opportunities which may arise.
Your Board is focused on consistently delivering value for
shareholders over the long-term by investing in high potential
businesses and building a well-diversified portfolio.
Jan Ward, Chairman
20 May 2021
Manager's Review
(NAV Breakdown)
The net assets of GBP21.1 million break down as follows:
Asset class NAV (GBP000s) % of NAV Number of investee
companies/funds
Unquoted company investments 12,207 57.96 31
AIM traded company investments 1,758 8.35 5
Liquidity Fund investments 5,667 26.91 3
Other Liquid assets (debtors
and creditors) 1,428 6.78 -
Totals 21,060 100.00 39
During the year, the Company made ten qualifying investments,
seeking to build a diversified portfolio. These included six new
investments and four follow-on investments in existing portfolio
companies.
New Investments
Maze Theory Limited
In April 2020 the Company invested GBP380,000 in Maze Theory
Limited. Maze Theory is a digital entertainment studio focusing on
the creation and development of immersive entertainment experiences
and games across multiple platforms, including Virtual Reality
(VR), PC, Console and Mobile. Maze Theory has an impressive team in
place, with a proven track record of developing and launching
successful games. The Company was attracted by Maze Theory's
ability to secure high profile IP, resulting in #a strong slate of
reputable titles, each of which has high commercial capabilities.
Titles secured so far include 'Dr. Who, The Edge Of Time', 'Dr Who,
The Lonely Assassins, 'Dr Who, The Edge of Reality' and 'Peaky
Blinders, The Kings Ransom'. The team's ability to develop games
across multiple platforms provides diversification, as well as
exposure to larger markets.
Rotageek Limited
In May 2020, the Company invested GBP530,000 in Rotageek
Limited. Rotageek uses cloud-based technology and automatic
scheduling to help multi-site businesses manage and schedule staff
to meet demand, drive efficiency and reduce costs. The tool uses
machine learning to identify patterns which may otherwise go
unnoticed, and its apps make it easier for staff to swap and cover
shifts and know when they are working. The company provided free
trials of its proprietary solutions to the NHS to assist in
supporting medical teams which are facing exceptionally complex
scheduling problems during the COVID-19 crisis.
Maven Screen Media Limited (Maven)
In August 2020, the Company invested GBP798,000 in Maven Screen
Media Limited. Maven is a leading media and entertainment
development and production company, founded by experienced
producers Celine Rattray and Trudie Styler. The founders have
established track records for producing award-winning, commercially
successful films with worldwide reach and top-tier talent attached.
Specifically, Maven recognises that women are underrepresented both
in front of and behind the camera and is therefore dedicated to
increasing representation of female content creators and
female-centred stories.
Home Team Content Limited
In September 2020 the Company invested GBP648,000 in Home Team
Content, a film and TV production company founded by two of the
U.K.'s most exciting young producers, Dominic Buchanan (BAFTA,
Royal Television Society and Peabody Award-winning "The End of The
F***ing World") and Bennett McGhee (Berlin film Festival's 2020
FRIPRESCI winner, "Mogul Mowgli"). Home Team's intention is to
identify and develop under-represented creatives and nurture
exciting voices- primarily, but not restricted to, filmmakers of
colour and women filmmakers of all ethnicities, through interactive
as well as traditional film and TV platforms.
Thanksbox Limited (Mo)
In October 2020, the Company invested GBP620,000 in Thanksbox
Limited. Thanksbox Limited whose trading name is "Mo" provides
proprietary technology to help organisations reduce employee churn
and improve employee engagement and satisfaction. Mo's core
product, 'Moments', is an intra company social media platform that
builds awareness of employees' achievements at work. The company
has built a strong product and now works with 20+ customers,
including well known organisations such as SHL and William
Hill.
eConsult Health Limited (eConsult)
In February 2021, the Company invested GBP750,000 in eConsult
Health Limited. eConsult works as an online portal to a GP
practice, allowing clinicians to determine the right care pathway
more efficiently for patients, benefiting the GP practices by
releasing capacity and reducing costs. eConsult is driven by a
proprietary, clinician led bank of 10,000+ questions produced using
evidence-based medicine, NICE guidance, Clinical Knowledge
Summaries and NHS. UK sources. It efficiently records patient
details, case history, symptoms, and provides them to the GP in a
concise format where they are processed in 2-3 minutes. Research
shows that 70% of requests are closed without the need for a
face-to-face appointment.
Follow-on Investments
Wazoku Limited
In June 2020, the Company invested GBP120,000 in Wazoku. Wazoku
is an idea management company with an impressive client list
including the United Kingdom Ministry of Defence (MoD), Waitrose,
Microsoft and HSBC. The Wazoku collaborative idea management
platform helps organisations transform raw ideas generated by the
workforce into actionable innovation, with the aim of realising
untapped business opportunities, identifying areas for improvement,
making savings and boosting revenue. More information on Wazoku can
be found on page 22.
MIP Diagnostics Limited
Also in June 2020, the Company invested GBP300,000 in MIP
Diagnostic Limited. MIP Diagnostics is a novel affinity reagent
company which produces various forms of Molecularly Imprinted
Polymers (MIPs) and NanoMIP, sometimes called 'synthetic
antibodies'. The synthetic antibodies make ideal reagents for a
wide range of applications including point-of-care diagnostics and
in field-based testing. More recently, MIP Diagnostics has
developed a nanoMIP to the Receptor Binding Domain (RBD) of the
SARS-COV-2 coronavirus Spike Protein. The nanoMIP targets a portion
of the RBD domain, unique to the SARS-COV-2 version of the virus,
maximizing specificity when used in COVID-19 diagnostic assays.
Arecor Limited
In October 2020, the Company invested GBP533,000 in the form of
loan notes in Arecor Limited. Arecor is a life sciences company
focused on developing superior biopharmaceutical products via the
application of its patented Arestat(TM) formulation technology
platform. Arestat(TM) enables the company to develop future
medicines from existing therapies, across all disease indications
and at any stage of a drug lifecycle. More information on Arecor
can be found on page 18.
Arcis Biotechnology Limited
During the year, the Company invested GBP337,000 in Arcis
Biotechnology Limited. Arcis provides highly advanced sample
preparation technology which is seeking to improve Molecular
Diagnostics testing by extracting and preserving fragile DNA and
RNA biomarkers. Arcis' technology allows the extraction of DNA and
RNA from various sample types (human, animal, plant or pathogen) in
under three minutes, which is significantly faster than the current
laboratory standards.
Investment Diversification at 28 February 2021
Sector by investment cost
-- Healthcare: 24%
-- Technology: 40%
-- Industrial: 9%
-- Media: 18%
-- Energy: 9%
Total assets by value
-- Unquoted Company Equity: 49%
-- Unquoted Company Loanstock: 9%
-- AIM Traded Equity: 8%
-- Liquidity Fund Investments: 27%
-- Other liquid assets: 7%
Holding period of qualifying investments by value
-- Less than 1 year: 19%
-- Between 1 and 5 years: 64%
-- Greater than 5 years: 17%
Investment Portfolio
Largest holdings by value
Three of the Company's ten largest investments are currently in
liquidity funds. Details of the ten largest qualifying investments
and of the liquidity funds are set out below.
Book Cost GBP'000 Valuation GBP'000 % of investment
Investment portfolio
Top AIM Investment
C4X Discovery plc 599 1,013 5.2
Top Unquoted Equity Investments
Maven Screen Media Limited 798 837 4.3
eConsult Health Limited 750 750 3.8
Blu Wireless Technology Limited 450 745 3.8
Arecor Limited 633 692 3.5
Home Team Content Limited 648 648 3.3
Oxford BioTherapeutics Limited 350 645 3.3
Thanksbox Limited 620 620 3.2
Wazoku Limited 420 593 3.0
Rotageek Limited 530 591 3.0
Other Unquoted Equity Investments
Other unquoted equity investments 7,423 6,086 30.9
Other AIM Investments (quoted
equity)
Other AIM investments 459 745 3.8
Quoted Funds
Fidelity Sterling Liquidity
Fund 1,883 1,905 9.7
Aberdeen Sterling Liquidity
Fund 1,882 1,882 9.6
Goldman Sachs Liquidity Funds 1,880 1,880 9.6
Total Investments 19,325 19,632 100.0
Calculus Capital Limited manages the portfolio of qualifying
Investments made by the Company. To maintain its qualifying status
as a Venture Capital Trust, the Company needed to be greater than
80 per cent invested in qualifying Investments by the end of the
relevant third accounting period and to maintain it thereafter. As
at 28 February 2021, the qualifying percentage for the relevant
funds was 85 per cent.
C4X Discovery plc ('C4XD')
C4X Discovery (C4XD) is a drug discovery and development company
that uses cutting-edge technology to design and create drug
candidates. C4XD has programmes across several therapeutic areas
including inflammation, neurodegeneration, immune-oncology and
diabetes. In October 2020, C4XD raised GBP15m in a placing on the
AIM market. As mentioned in the Chairman's Statement, C4XD's
licensed candidate, a non-opioid drug for the treatment of opioid
use disorder, which has potential milestones for C4XD of up to a
further $284m beyond the $10m payment received in 2018, has
progressed well with the commencement of Phase 1 clinical trials,
which are expected to complete in May 2021. Indivior, the licensee,
has announced that it is focusing its R&D on, amongst others,
the C4XD candidate. In April 2021, after the financial year end,
the company announced its second significant licensing agreement,
with Sanofi, a global pharmaceutical company, in respect of its
pre-clinical IL-17A inhibitor programme. Sanofi, using C4XD's
technology, will develop and look to commercialise the programme to
provide an oral therapy for a variety of autoimmune diseases
including psoriasis and psoriatic arthritis. As mentioned earlier,
under the agreement C4XD will receive an upfront payment of EUR7m
and could receive up to a further EUR407m in milestones, in
addition to single digit royalties.
Latest Results 2020 2019 Investment Information 2021 2020
(group) GBP'000 GBP'000 GBP'000 GBP'000
Audited Audited
Year ended 31 Jul 31 Jul
---------------- --------- --------- ----------------------- --------- ---------
Turnover - - Total cost 599 599
---------------- --------- --------- ----------------------- --------- ---------
Pre-tax Income recognised
loss (9,579) (13,622) in year/period - -
---------------- --------- --------- ----------------------- --------- ---------
Net assets 8,066 7,013 Equity valuation 1,013 318
---------------- --------- --------- ----------------------- --------- ---------
Valuation basis: BID Loan stock valuation -
Price
-------------------------------------- ----------------------- --------- ---------
Total valuation 1,013 318
----------------------- --------- ---------
Total equity held by Calculus VCT plc: 1.3 per cent;
Total equity held by funds managed by Calculus Capital Limited:
4.1 per cent.
Maven Screen Media Limited ('Maven')
Maven Screen Media was co-founded by experienced producers
Celine Rattray and Trudie Styler. The founders have established
track records for producing award-winning content, commercially
successful films with worldwide reach and top-tier talent attached.
Their productions have launched and received prizes at Cannes,
Sundance, and TIFF Film Festivals, as well as Oscar(R), Golden
Globe, BAFTA, British Independent Film, and London Critics Circle
Awards. In August 2020, Calculus invested GBP2.05 million (GBP798k
from Calculus VCT plc) to fund the company's expansion into
production for television and digital, including short-form
content. Maven is dedicated to increasing representation of female
content creators and female-centred stories. Its development slate
demonstrates its commitment to having strong female leads, with
unique narratives that address social issues and inspire change. In
March 2021, Maven wrapped shooting of Infinite Storm, a survival
thriller film project, starring two-time Oscar nominee, Naomi
Watts, in the lead role alongside Oscar nominee Sophie Okonedo and
Billy Howle. Maven begins shooting on Days of Abandonment with
Oscar winner, Natalie Portman in July 2021.
As Maven was incorporated in February 2020 its financials were
not available at the time of publication of the Company's annual
report.
Latest Results Unaudited Audited Investment Information GBP'000
(group) 2020 2019
GBP'000 GBP'000
Year ended 28 Feb 28 Feb
----------------------- ----------- ---------- ---------------------------------- --------
Turnover n/a n/a Total cost 798
----------------------- ----------- ----------- --------------------------------- --------
Pre-tax (loss)/profit n/a n/a Income recognised in year/period -
----------------------- ----------- ---------- ---------------------------------- --------
Net assets n/a n/a Equity valuation 837
----------------------- ----------- ----------- --------------------------------- --------
Valuation basis: Loan stock valuation -
---------------------------------- --------
Price of recent investment calibrated
with discounted cash flow Total valuation 837
---------------------------------- --------
Total equity held by Calculus VCT plc: 9.2 per cent;
Total equity held by funds managed by Calculus Capital Limited:
23.8 per cent.
eConsult Health Limited ('eConsult')
eConsult works as an online portal to GP practices, allowing
clinicians to determine the right care pathway for patients,
releasing capacity and reducing costs. eConsult is driven by a
proprietary, clinician led bank of 10,000+ questions produced using
evidence-based medicine, NICE guidance, Clinical Knowledge
Summaries and NHS.UK sources. It efficiently records patient
details, case history, symptoms, and provides them to the GP in a
concise format where they are processed in 2-3 minutes. Research
shows that 70% of requests are closed without the need for a
face-to-face appointment. Rapid adoption of eConsult's solution
started in 2016 following the introduction of centralised
government funding for online consultation, this was significantly
accelerated by the COVID-19 pandemic in 2020. eConsult is now live
in over 3,200 NHS GPs, providing coverage to nearly 30 million
patients. It is now the largest provider of GP digital triage
systems to the NHS. Calculus contributed GBP1.5m to a GBP7 million
investment into eConsult in February 2021. The investment will be
used to develop further the Company's leading position within NHS
primary care and to support the rollout of the Company's Urgent and
Emergency Care tool, eTriage, and hospital outpatient triage tool,
eSpecialist.
Latest Results 2020 2019 Investment Information GBP'000
(group) GBP'000 GBP'000
Unaudited Unaudited
Year ended 31 Mar 31 Mar
---------------- ----------- ----------- --------------------------------- --------
Turnover 3,093 2,124 Total cost 750
---------------- ----------- ----------- --------------------------------- --------
EBITDA (83) (289) Income recognised in year/period -
---------------- ----------- ----------- --------------------------------- --------
Net assets (123) (115) Equity valuation 750
---------------- ----------- ----------- --------------------------------- --------
Valuation basis: Loan stock valuation -
--------------------------------- --------
Price of recent investment
calibrated with multiples and
discounted cash flow Total valuation 750
--------------------------------- --------
Total equity held by Calculus VCT plc: 2.3 per cent.
Total equity held by funds managed by Calculus Capital Limited:
4.6 per cent.
Blu Wireless Technology Limited ('Blu Wireless')
Blu Wireless provides the technology to allow data to be
transmitted wirelessly at very high, fibre-like, speeds. Blu
Wireless are addressing the challenge of building cost effective 5G
networks, rolling out fibre-like broadband to businesses and homes,
reliable connectivity on high-speed transport and perimeter
security and vehicle to vehicle applications for the defence and
security industries. The company's key partnership with FirstGroup,
expected to significantly boost the quality of connectivity on
trains, has advanced further during the year. Whist there have been
some delays because of COVID-19, roll-out is expected on both the
South West and West Coast franchises during 2021 and there is
interest in the technology from other UK and overseas rail
companies. In addition, Blu Wireless has made advances in the
defence and security sector with significant interest from US, UK
and European defence bodies.
Latest Results Audited Audited Investment Information 2021 2020
2020 2019 GBP'000 GBP'000
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- --------- --------- ----------------------- --------- ---------
Turnover 6,097 2,248 Total cost 450 450
---------------- --------- --------- ----------------------- --------- ---------
Income recognised in
Pre-tax loss (5,433) (10,489) year/period - -
---------------- --------- --------- ----------------------- --------- ---------
Net assets 2,884 4,997 Equity valuation 745 745
---------------- --------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation - -
----------------------- --------- ---------
Price of recent investment
calibrated by discounted
cash flow Total valuation 745 745
----------------------- --------- ---------
Total equity held by Calculus VCT plc: 1.4 per cent.
Total equity held by funds managed by Calculus Capital Limited:
13.0 per cent.
Arecor Limited ('Arecor')
Arecor is a life sciences company focussed on the development of
superior biopharmaceutical products via the application of its
patented Arestat(TM) formulation technology platform. In addition
to a strong pipeline of partnership opportunities, Arecor is using
its pipeline to develop a portfolio of proprietary products for
diabetes care. During 2020, Arecor published Phase I trial data
showing that the Arecor Ultra-Rapid Acting Insulin performed better
than current rapid acting insulins (both on the market and in
development) and in December 2020, Arecor commenced Phase I trials
of its Ultra-Concentrated Rapid Acting Insulin, for which
preliminary results are anticipated in H2 2021. In addition to its
own portfolio of therapeutics, Arecor also partners with leading
pharmaceutical and biotech companies, delivering to them
reformulations of their proprietary products. In doing so, such
businesses can deliver improved products to patients as well as
strengthen their patent protection and commercial market access in
an increasingly competitive market.
During 2020, Arecor received a further milestone payment in
respect of it first licence, announced two collaborations with
Hikma Pharmaceuticals and entered into a new licence agreement with
Inhibrx. In November 2020, Calculus VCT plc invested GBP0.5m in the
form of a convertible loan as part of a GBP2.0m round. The company
is exploring financing options during 2021 and there appears to be
significant interest from a range of investors.
Latest 2020 2019 Investment Information 2021 2020
Results GBP'000 GBP'000 GBP'000 GBP'000
(group) Audited Audited
Year ended
------------ --------- --------- ----------------------- --------- ---------
Turnover 2,285 748 Total cost 633 100
------------ --------- --------- ----------------------- --------- ---------
Pre-tax Income recognised
loss (2,906) (2,698) in year/period 14 -
------------ --------- --------- ----------------------- --------- ---------
Net assets 2,065 3,993 Equity valuation 159 144
------------ --------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation 533 -
----------------------- --------- ---------
Price of recent investment
calibrated by discounted
cash flow Total valuation 692 144
----------------------- --------- ---------
Total equity held by Calculus VCT plc: 0.67 per cent.
Total equity held by funds managed by Calculus Capital Limited:
13.4 per cent.
Home Team Content Limited ('Home Team')
Home Team Content is an independent production company,
co-founded by experienced producers Dominic Buchanan and Bennett
McGhee. Prior to Home Team, Dominic was most recently an executive
producer on the break-out Channel 4 and Netflix co-production, The
End of the F***ing World. The show has won multiple accolades,
including the 2020 BAFTA TV Award for Best Drama Series. Bennett
McGhee established Silvertown Films in 2015, an independent film
and television production company, which was the recipient of the
British Film Institute's Vision Award in its first year. Home Team
will harness the reputations of its two producers in identifying
and developing under-represented creatives and new voices -
primarily, but not restricted to, filmmakers of colour and women
filmmakers of all ethnicities, through interactive as well as
traditional film and television platforms. In September 2020,
Calculus invested GBP775,000 (GBP648,000 from Calculus VCT plc) to
fund Home Team's exciting development slate, which is expected to
advance significantly in 2021. Home Team are expanding their team,
hiring a Senior Development Executive in March 2021.
As Home Team was incorporated in April 2020 its financials were
not available at the time of publication of the Company's annual
report.
Latest Results Unaudited Audited Investment Information GBP'000
(group) 2020 2019
GBP'000 GBP'000
Year ended 30 Apr 30 Apr
------------------ ------------ ----------- ---------------------------------- --------
Turnover n/a n/a Total cost 648
------------------ ------------ ------------ --------------------------------- --------
Pre-tax (loss) n/a n/a Income recognised in year/period -
/
profit
------------------ ------------ ----------- ---------------------------------- --------
Net assets n/a n/a Equity valuation 648
------------------ ------------ ------------ --------------------------------- --------
Valuation basis: Loan stock valuation -
---------------------------------- --------
Price of recent investment calibrated
by discounted cash flow Total valuation 648
---------------------------------- --------
Total equity held by Calculus VCT plc: 18.4 per cent.
Total equity held by funds managed by Calculus Capital Limited:
21.9 per cent.
Oxford Biotherapeutics Limited ('OBT')
Oxford BioTherapeutics (OBT) is a clinical stage oncology
company committed to the discovery and development of novel
therapies for various cancer types. 2020 was an encouraging year
for OBT, beginning in January with the announcement of the
initiation of the dose escalation portion of its US Phase I trial
for OBT076, an experimental treatment for women with high-risk HER2
negative breast cancer, as well as other specific solid tumours. In
addition, in October, building on the existing partnership with the
company, OBT established a new collaboration with Boehringer
Ingelheim (BI). In January 2021, OBT established a new research
collaboration with global cell therapy leader, Kite Pharma. OBT
received upfront milestones and full-time equivalent funding for
its activities under each collaboration. The continued progression
of the existing collaboration with BI, alongside the announcement
of new deals with BI and Kite Pharma, are an encouraging validation
of OBT's development platforms and provide significant non-dilutive
capital to support the continued development of the proprietary
therapeutic leads, the progression of which is key to a successful
exit.
Latest Results Audited Audited Investment Information 2021 2020
(group) 2020 2019 GBP'000 GBP'000
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- --------- --------- ----------------------- --------- ---------
Turnover 7,453 2,089 Total cost 350 350
---------------- --------- --------- ----------------------- --------- ---------
Pre-tax (loss) Income recognised in
/ profit (1,193) (6,961) year/period - -
---------------- --------- --------- ----------------------- --------- ---------
Net assets (2,838) (5,691) Equity valuation 645 277
---------------- --------- --------- ----------------------- --------- ---------
Valuation basis: Loan stock valuation - -
----------------------- --------- ---------
Discounted cash flow Total valuation 645 277
----------------------- --------- ---------
Total equity held by Calculus VCT plc: 0.7 per cent;
Total equity held by funds managed by Calculus Capital Limited:
3.5 per cent.
Thanksbox Limited ('Mo')
Thanksbox Ltd trading as "Mo" provides a SaaS (Software as a
Service) platform to help organisations improve their culture,
connect their people, and improve employee engagement. Mo has
developed a deep understanding of what matters to the people at
work and focusses its efforts on building value in organisations
from the bottom up. Mo's core product, 'Moments', captures moments
of appreciation, recognition, inspiration, success, and helps build
connections between colleagues. The platform provides the means to
distribute monetary and non-monetary rewards, nominate employees
for awards and collect and vote on ideas to improve the company.
The product is used in more than 45 countries around the world and
with well-known organisations such as SHL, the O2 and William Hill.
Calculus Capital led a GBP3.0m new investment round in October 2020
with the continued support of the Northern VCTs managed by Mercia
Fund Management, which first invested in Mo in 2018.
Latest Results 2020 2019 Investment Information 2021 GBP'000
(group) GBP'000 GBP'000
Unaudited Audited
Year ended 31 Dec 31 Dec
---------------- ----------- --------- ----------------------- -------------
Turnover 725 618 Total cost 620
---------------- ----------- --------- ----------------------- -------------
Income recognised in
Pre-tax loss (1,721) (1,925) year/period -
---------------- ----------- --------- ----------------------- -------------
Net assets 1,630 568 Equity valuation 620
---------------- ----------- --------- ----------------------- -------------
Valuation basis: Price of Loan stock valuation -
recent investment calibrated
by multiples and discounted
cash flow
----------------------- -------------
Total valuation 620
----------------------- -------------
Total equity held by Calculus VCT plc: 4.5 per cent;
Total equity held by funds managed by Calculus Capital Limited:
12.2 per cent.
Wazoku Limited ('Wazoku')
With an impressive client list such as Waitrose, HSBC and MoD,
Wazoku's software allows large companies and organisations to
capture and develop the ideas and innovations latent within the
workforce. Calculus VCT invested GBP300,000 in Wazoku Ltd in April
2019 as part of GBP2.5m investment round and a further GBP120,000
in June 2020 as part of GBP1.0m investment round on the back of
strong growth. Wazoku's market leading platform and suite of
support services enables firms to innovate at scale. Successful
innovation requires not only capturing ideas, but also collating,
analysing and implementing them. Wazoku's platform provides the
process and structure to capture, evolve, evaluate, develop, select
and implement the best ideas from internal or external
stakeholders. During 2020, Wazoku acquired the key assets of
Innocentive, which has built a crowd of 400,000 experts to whom it
reaches out to solve complex problems on behalf of corporate and
governmental clients. Wazoku has developed a new and improved
product combining Wazoku's existing innovation platform with
Innocentive's network and methodology and has launched it under the
Innocentive name, which is widely respected in the open innovation
market.
Latest Results Audited Audited Investment Information 2021 2020
2020 2019 GBP'000 GBP'000
GBP'000 GBP'000
Year ended 31 Mar 31 Mar
---------------- --------- --------- ----------------------- --------------- ---------
Turnover 2,856 2,011 Total cost 420 300
---------------- --------- --------- ----------------------- --------------- ---------
Income recognised in
Pre-tax loss (1,563) (1,245) year/period
---------------- --------- --------- ----------------------- --------------- ---------
Net assets 113 (1,233) Equity valuation 593 462
---------------- --------- --------- ----------------------- --------------- ---------
Valuation basis: Loan stock valuation - -
----------------------- --------------- ---------
Multiples and discounted
cash flow Total valuation 593 462
----------------------- --------------- ---------
Total equity held by Calculus VCT plc: 2.0 per cent;
Total equity held by funds managed by Calculus Capital Limited:
16.6 per cent.
Rotageek Limited ('Rotageek')
Rotageek uses cloud-based technology and automatic scheduling to
help multi-site businesses manage and schedule staff to meet
demand, drive efficiency and reduce costs. Machine learning is used
to optimise schedules based on historic trends. Meanwhile the
company's phone and tablet-based apps allow staff flexibility to
swap, cover shifts or book time off, whilst knowing when and where
they are required for work. Rotageek has established a strong
position in the UK retail sector, working with High Street names
such as Prêt a Manger, The Perfume Shop, Dune, Pets at Home and O2.
More recently, the company is addressing the secondary healthcare
market, with the addition of Ashford and St Peter's Hospitals
(ASPH) NHS Foundation Trust, one of the UK's foremost Trusts, as a
customer. In May 2020, Calculus invested GBP2.0m (GBP530k from
Calculus VCT plc) as part of a GBP6.0m new investment round,
alongside existing investors, including Mobeus.
Latest Results Unaudited Audited Investment Information 2021 GBP'000
(group) 2020 2019
GBP'000 GBP'000
Year ended 31 Dec 31 Dec
---------------- ---------- --------- --------------------------------- -------------------
Turnover 1,659 1,759 Total cost 530
---------------- ---------- --------- --------------------------------- -------------------
Pre-tax loss (2,759) (2,848) Income recognised in year/period -
---------------- ---------- --------- --------------------------------- -------------------
Net assets 2,755 (830) Equity valuation 591
---------------- ---------- --------- --------------------------------- -------------------
Valuation basis: Loan stock valuation -
--------------------------------- -------------------
Price of recent investment
calibrated by multiples and
discounted cash flow Total valuation 591
--------------------------------- -------------------
Total equity held by Calculus VCT plc: 2.6 per cent;
Total equity held by funds managed by Calculus Capital Limited:
9.9 per cent.
Business Review
Company activities and status
The Company is registered as a public limited company and
incorporated in England and Wales with registration number
07142153. Its shares have a premium listing and are traded on the
London Stock Exchange.
On incorporation, the Company was an investment company under
section 833 of the Companies Act 2006. On 18 May 2011, investment
company status was revoked by the Company. This was done 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, 1 November 2017 and 8 December 2020.
Company business model
The Company's business model is to conduct business as a VCT.
Company affairs are conducted in a manner to satisfy the conditions
to enable it to obtain approval as a VCT under sections 258-332 of
the Income Tax Act 2007 ("ITA 2007").
Investment policy
The Company's policy is to build a diverse portfolio of
Qualifying Investments of primarily established unquoted companies
across different industries and investments which may be by way of
loan stock and/or fixed rate preference shares as well as Ordinary
shares to generate income. The amount invested in any one sector
and any one company will be no more than 20 per cent and 10 per
cent respectively of the qualifying portfolio. These percentages
are measured as at the time of investment. The Board and its
Manager, Calculus Capital Limited, will review the portfolio of
investments on a regular basis to assess asset allocation and the
need to realise investments to meet the Company's objectives or
maintain VCT status.
It is intended that a minimum of 75 per cent of the monies
raised by the Company before being invested in qualifying
investments, will be invested in a variety of investments which
will be selected to preserve capital value, whilst generating
income, and may include:
-- Bonds issued by the UK Government; and
-- Fixed income securities issued by major companies and
institutions, liquidity funds and fixed deposits with counterparty
credit rating of not less than A minus (Standard & Poor's
rate)/A3 (Moody's rated).
Where investment opportunities arise in one asset class which
conflict with assets held or opportunities in another asset class,
the Board will make the investment decision. Under its Articles,
the Company has the ability to borrow a maximum amount equal to 25
per cent of the aggregate amount paid on all shares issued by the
Company (together with any share premium thereon). The Board will
consider borrowing if it is in the shareholders' interests to do
so.
Long term viability
Significant ramifications to the global economy are being posed
by the COVID-19 pandemic. The Directors have assessed the Company's
vulnerability to the initial impact and concluded that COVID-19 is
not expected to have any significant long-term impact on the
viability of the Company. The board came to this conclusion because
a significant portion of the Company's assets are held in cash thus
diluting the impact of the valuation movements on the NAV.
Furthermore, some portfolio companies in the life science sector
are benefiting from creating products to aid the fight against
COVID-19 thus providing some upside for the portfolio.
In assessing the long-term viability of the Company, the
Directors have had regard to the guidance issued by the Financial
Reporting Council. The Directors have assessed the prospects of the
Company for a period of five years, which was selected because this
is the minimum holding period for VCT shares. The Board's strategic
review considers the Company's income and expenses, dividend
policy, liquid investments and ability to make realisations of
qualifying investments. These projections are subject to
sensitivity analysis which involves flexing several 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 33
of the Accounts; ii) the level of dividends paid are at the
discretion of the Board; iii) the Company's liquid investments
which include cash, money market instruments and quoted shares can
be realised as permitted by the Company's investment policy; iv)
the illiquid nature of the qualifying portfolio. Based on the
results of this analysis, the Directors have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due.
In making this statement the Board carried out a robust
assessment of the emerging and principal risks facing the Company
including those that might threaten its business model, future
performance, solvency or liquidity. The procedures in place to
identify emerging risks and explain how they are being managed or
mitigated are set out on page 26.
In order for the future of the Company to be considered by the
members, the Directors shall procure that a resolution will be
proposed at the tenth annual general meeting after the last
allotment of shares (and thereafter at five yearly intervals) to
the effect that the Company shall continue as a venture capital
trust. Under the Articles of Association, a resolution for the
continuation of the Company as a VCT will be proposed at the Annual
General Meeting.
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 80 per cent by value of its investments throughout the
period in shares or securities in qualifying holdings. In addition,
30 per cent of any money raised after 6 April 2018 will need to be
invested in qualifying holdings within 12 months after the end of
the accounting period in which the money was raised and loan stock
investments in investee companies must be unsecured and must not
carry a coupon which exceeds 10% per annum on average over a five
year period.
Key strategic issues considered during the year
Performance
The Board reviews performance by reference to a number of key
performance indicators ("KPIs") and considers that the most
relevant KPIs are those that communicate the financial performance
and strength of the Company as a whole, being;
-- Total return per share
-- Net asset value per share
-- Dividends
The financial highlights of the Company can be found after the
contents page 4 of the Report and Accounts.
Further KPIs are those which show the Company's position in
relation to the VCT tests which it is required to meet in order to
meet and maintain its VCT status. The Qualifying percentage is
disclosed in the Manager's review. The Company has received
approval as a VCT from HM Revenue & Customs.
There are no KPIs related to environmental and employee matters
as these are not relevant to the Company which delegates operations
to external providers.
Emerging and principal risks 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 regarding financial instruments are
summarised in note 16 to the Accounts.
The Board has also identified the following additional risks and
uncertainties:
Regulatory risk
The Company has received approval as a VCT under Income Tax Act
2007 "ITA". 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 Manager and
financial information is produced on a monthly basis. The Manager
monitors VCT regulation and presents its findings to the Board on a
quarterly basis. The Manager builds in 'headroom' when making
investments to allow for changes in valuation. This 'headroom' is
reviewed prior to making and realising qualifying investments.
Independent advisers are used to monitor and advise on the
Company's compliance with the VCT rules.
Qualifying investments
There are restrictions regarding the type of companies in which
the Company may invest and there is no guarantee that suitable
investment opportunities will be identified.
Investment in unquoted companies and AIM-traded companies
involves a higher degree of risk than investment in companies
traded on the main market of the London Stock Exchange. These
companies may not be freely marketable and realisations of such
investments can be difficult and can take a considerable amount of
time. There may also be constraints imposed upon the Company with
respect to realisations in order to maintain its VCT status which
may restrict the Company's ability to obtain the maximum value from
its investments.
Calculus Capital Limited has been appointed to manage the
qualifying investments portfolio and has extensive experience of
investing in this type of investment. Regular reports are provided
to the Board and a representative of Calculus Capital Limited is on
the Company's board. Risk is managed through the investment policy
which limits the amount that can be invested in any one company and
sector to 10 per cent and 20 per cent of the qualifying portfolio
respectively at the time of investment.
Liquidity/ marketability risk.
Due to the holding period required to maintain up-front tax
reliefs, there is a limited secondary market for VCT shares and
investors may therefore find it difficult to realise their
investments. As a result, the market price of the shares may not
fully reflect, and will tend to be at a discount to, the underlying
net asset value. The level of discount may also be exacerbated by
the availability of income tax relief on the issue of new VCT
shares. The Board recognises this difficulty, and has taken powers
to buy back shares, which could be used to enable investors to
realise investments.
COVID-19
New variants of coronavirus and new waves of lockdowns have led
to significant disruptions on the global economy. The risks which
arise from the ongoing pandemic are the investee companies' ability
to fulfil orders and or /effect installations, supply chain
disruption and the impact of the general economic downturn on the
availability of capital, and consequently the valuations likely to
be achieved in funding rounds. These risks however, are mitigated
through the Company's significant cash assets and in its
substantial investments in the life sciences sector, which are
benefiting in the current climate from creating products to aid the
fight against COVID-19.
Employees, environmental, human rights and community issues
The Company has no employees and the Board comprises entirely of
non-executive directors. Day-to-day management of the Company's
business is delegated to the 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 will conduct itself responsibly, ethically
and fairly. Calculus Capital Limited seeks to conduct its
investment business in line with its Environment, Social and
Governance policy mentioned below. The Board has reviewed the
policies of the Manager and is confident that these are
appropriate.
Diversity
The Board of the Company is committed to inclusion and
diversity. At the year end, the Board of directors comprised one
male Director and three female Directors, so has a diverse board in
relation to gender diversity. The Board also considers other forms
of diversity to be important and these factors will be considered
as part of the recruitment process going forward. This is further
set out in the Corporate Governance statement on page 37 of the
Report and Accounts.
Environmental, Social and Governance (ESG) Policy
Policy
The Calculus Capital Limited ("Calculus") ESG Policy details its
firm-wide commitment to integrate ESG risks into its investment
processes, and outlines the foundation, ownership, and oversight
mechanisms, which underpin its approach. ESG integration is the
practice of incorporating material ESG information into investment
decisions and the way that it works with portfolio companies with
the objective of improving the long-term financial outcomes of
client portfolios.
Responsibility
ESG integration is a core part of the investment process, and as
with all other components of the investment process, is the
responsibility of our investment team. In turn, it is the
responsibility of the Calculus Board to ensure oversight and that
all factors detailed in the ESG Policy are considered when making
investment decisions, as well as in the management of existing
portfolio companies. Investment Directors are accountable for
ensuring existing portfolio companies adopt strategies which align
with a transition to a more sustainable economy.
Mission Statement
Calculus recognises that it has a social and environmental
responsibility beyond legal and regulatory requirements. It is
committed to making a positive environmental and social impact,
alongside continually improving performance and governance. Each of
these are integral to its business strategy and operating
methods.
The ESG Policy will be reviewed at least annually to reflect
changes within Calculus, as well as alterations made regarding ESG
considerations, more widely.
Statement regarding annual report and accounts
The Directors consider that taken as a whole, the Annual Report
and Accounts is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
Jan Ward, Chairman
20 May 2021
Section 172 Statement
Section 172 (1) of the Companies Act 2006 requires the Directors
to explain how they have fulfilled their obligation to consider
broader stakeholder interests when performing their duty to act in
good faith for the benefit of all stakeholders. In doing this the
Directors considered the following factors -
-- Likely consequences of any decisions in the long term
-- The interests of any employees
-- The need to foster business relationships with suppliers, shareholders, and others
-- The impact of the company's operations on the community and the environment
-- Maintaining a reputation for high standards of business conduct
-- Acting fairly as between all the members of the Company
Communication with Shareholders
The Board promotes and encourages communications with
shareholders, primarily through interim and annual reports, and at
annual general meetings ("AGMs"). The Board encourages shareholders
to attend and vote at AGMs. Calculus Capital Limited as Manager
keeps shareholders up to date with investee company news stories
and updates on any open offers are included on quarterly
newsletters sent to investors. Investee company news stories and
regulatory news is also available for shareholders to view on the
Company's website. Calculus Capital also organises investor forums
where shareholders have an opportunity to meet with management of
portfolio companies. In light of the restrictions in place due to
COVID-19, it is most likely that the AGM will take place virtually
in the form of a webinar where shareholders will have the
opportunity to ask the Board questions 'live'. More information
will be shared regarding the format of the AGM on the Company's
website https://www.calculuscapital.com/calculus-vct/ .
Shareholders will have the ability to vote by proxy and return
proxy forms either electronically or in the post.
Directors' decisions are intended to fulfil the Company's aims
and objectives to achieve long-term returns for shareholders. In
addition to providing the opportunity to benefit from investment in
a diverse portfolio of unquoted growing companies, the Board aims
to pay annual dividends equivalent to 4.5% of NAV. During the
financial year, 3.20 pence dividends per share were paid to
registered shareholders. As part of its policy to return funds to
shareholders, the Company will continue to consider opportunities
for buybacks. 73,209 shares were bought back for cancellation
during the year.
Oversight of Professional Advisors
As is normal practice for VCTs, the Company delegates authority
for the day to day management of the company to an experienced
Manager. The Board ensures that it works very closely with Calculus
Capital Limited to form strategy and objectives, and oversee
execution of the business and related policies. The Board receives
quarterly performance updates at board meetings from the Manager in
addition to regular ad hoc updates and portfolio news. The Manager
is in attendance at every board meeting and the CEO of the Manager
is also a member of the Company's Board. The Board reviews other
areas of operation over the course of the financial year including
the Company's business strategy, key risks, internal controls,
compliance and other governance matters. The Board reviews the
Manager's fee annually. The Board has also decided to initiate an
annual strategy review event along with the Manager going forward.
Due to the restrictions of the national lockdown the Board was
unable to hold the annual strategy review during the financial
year, the Board will resume with the review when conditions
permit.
Oversight of Suppliers and Providers
The board reviews annually the agreements with service providers
including the administrators, custodian and depositary of the
Company, to ensure value for money, accuracy and compliance. In
carrying out its activities and in its relationships with
suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Working with Portfolio Companies
The board, through its investment policy and objectives, as
detailed in page 24 of the Annual Report incorporates
considerations for ensuring alignment with the objectives agreed
with the Manager and portfolio companies. Calculus Capital Limited
as Manager is the main point of contact for investee companies and
the Board ensures it receives updates on the entire portfolio
quarterly. There have been 10 additions in the financial year and 2
disposals. Further support was provided to some portfolio companies
through follow on investments. The Manager offers investee
companies both financial support and practical help by offering
specialist skills and contacts to help portfolio companies achieve
their long-term objectives.
Supporting the Environment and the Community
The purpose of the regulations related to VCTs is to generate
support and investment for small growth companies. Government
endorsement of the sector is aimed at creating economic growth
through innovation, entrepreneurship, and employment. This benefits
the economy and wellbeing of the community. The Manager
incorporates consideration of social, environmental and governance
issues in making investment decisions, Investments in life sciences
companies such as Mologic and Scancell, for example, all have core
missions to help society overcome disease. Portfolio company
Mologic has developed a fast diagnostic device for COVID-19, and
Scancell has announced plans to use its technology to develop a
universal vaccine. Supplementing the life sciences sector, med-tech
company, eConsult works as an online portal to a GP practice,
allowing clinicians to determine the right care pathway more
efficiently for patients, benefiting the GP practices by releasing
capacity and reducing costs.
The Board takes into consideration the potential long-term
effect of their decisions on all its associated stakeholders. The
effects on members, the long-term success of the company,
compliance with regulations, adherence with the Association of
Investment Companies (" AIC") code and the reputation of the
Company are all taken into consideration.
Extract of the Directors' Report
Share Capital
The capital structure of the Company and movements during the
year are set out in note 12 of the Accounts. At the year end, no
shares were held in Treasury. During the year, the following
changes to the Company's share capital have taken place:
Total shares in issue - 1 March
2020 24,862,968
Issue of new ordinary shares -
3 April 2020 2,342,066
Share buyback - 18 June 2020 (22,127)
Issue of new ordinary shares -
31 July 2020 1,731,817
Issue of new ordinary shares -
3 September 2020 800,356
Issue of new ordinary shares -
16 December 2020 1,729,094
Share buyback - 22 February 2020 (51,082)
Total shares in issue - 28 February
2021 31,393,092
Since the year end, a further 7,103,371 new Ordinary shares have
been issued pursuant to an offer for subscription.
Substantial Shareholdings
As at 28 February 2021, there were no notifiable interests above
3 per cent in the voting rights of the Company.
Management
Calculus Capital Limited is the qualifying Investments'
portfolio manager. Calculus Capital Limited was appointed as
Manager pursuant to an agreement dated 2 March 2010. A supplemental
agreement was entered into on 7 January 2011 in relation to the
management of the C Share fund. A further supplemental agreement
was entered into on 26 October 2015 in relation to the management
of the D share fund and covers the addition of company secretarial
duties. The supplemental management agreement entered into on 12
September 2017 relates to the merged share fund (together, the
"Calculus Management Agreements"). From 12 September 2017, Calculus
Capital Limited agreed to meet the annual expenses of the Company
in excess of 3.0 per cent of the net asset value of the Ordinary
shares.
Pursuant to the Calculus Management Agreements, Calculus Capital
Limited will receive an annual management fee of 1.75 per cent of
the net asset value of the Ordinary share fund, calculated and
payable quarterly in arrears.
Calculus Capital Limited is also entitled to a fee of GBP15,000
per annum (VAT inclusive where applicable) for the provision of
company secretarial services.
For the year to 28 February 2021, Calculus Capital Limited
charged GBP319,639 in management fees, GBP18,000 (VAT inclusive) in
company secretarial fees, and did not contribute to the expenses
(2020: charged GBP264,358 in management fees, GBP18,000 in company
secretarial fees and did not contribute to the expenses cap).
Performance Fees
Pursuant to a performance incentive agreement dated 26 October
2015, Calculus Capital Limited is entitled to a performance
incentive fee equal to 20 per cent of Ordinary shareholder
(formerly D shareholder) dividends and distributions paid in excess
of 105 pence. The board have assessed the likelihood of a
performance fee being paid as remote and have thus not made a
provision for it in these accounts. In making this assessment the
board have taken into account the current performance of the
Company, including dividends paid out and the current net asset
value attributable to Ordinary shareholders.
Investec Structured Products was appointed as Manager pursuant
to an agreement dated 2 March 2010, and their appointment as
Manager terminated in February 2017. Certain performance incentive
agreements were entered into with Calculus Capital Limited and
Investec Structured Products.
Pursuant to a legacy performance incentive agreement between the
Company, Calculus Capital Limited and Investec Structured Products
dated 2 March 2010, Investec Structured Products and Calculus
Capital Limited were each to receive a performance incentive fee
payable of an amount equal to 10 per cent of dividends and
distributions paid to old ordinary shareholders following the
payment of such dividends and distributions provided that such
shareholders have received in aggregate distributions of at least
105p per ordinary share (including the relevant distribution being
offered). The board assess the likelihood of this hurdle ever being
met in the long term as a remote probability, and consequently have
not recognised a liability or contingent liability in these
financial statements.
A legacy performance incentive agreement between the Company,
Calculus Capital Limited and Investec Structured Products dated 7
January 2011 was entered into with reference to the C share class.
As one of the performance hurdles has not been met, no incentive
fee will ever be paid under this agreement, hence no performance
fee has been accrued.
Continuing Appointment of the Manager
The Board keeps the performance of Calculus Capital Limited
under continual review. A formal review of the 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 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 and also the impact caused by COVID-19. As
disclosed on page 24 under long term viability, it was concluded
that COVID-19 is not expected to have a significant impact in the
long term. After making enquiries, and having reviewed the
portfolio, balance sheet and projected income and expenditure for a
period of twelve months from the date these financial statements
were approved, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operation for at
least the next twelve months. The Directors have assessed whether
material uncertainties exist and their potential impact on the
Company's ability to continue as a going concern and conclude that
no such material uncertainties exist. The Directors have therefore
adopted a going concern basis in preparing the Financial
Statements.
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the
operations of the Company, nor does it have responsibility for any
emissions producing sources including those within its underlying
investment portfolio under part 7 of schedule 7 to the Large and
Medium- sized Companies and Groups (Accounts and Reports)
Regulations 2008, as amended. Under the Manager's ESG policy, the
environmental impact of an investee company is considered at the
point of investment.
Annual General Meeting
A formal Notice convening the Annual General Meeting of the
Company to be held on 8 July 2021 can be found on pages 73 to 74.
As mentioned earlier, in light of the COVID-19 pandemic and the
regulations on social distancing the Board is considering
contingency plans for the 2021 AGM taking into account the evolving
nature of the regulations and announcements from the Financial
Reporting Council and the Financial Conduct Authority.
Directors' Responsibilities Statement
The directors are responsible for preparing the Annual Report
and the Accounts in accordance with applicable law and
regulations.
Company law requires the directors to prepare Accounts for each
financial year. Under that law they have elected to prepare the
Accounts in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable laws).
Under company law the Directors must not approve the Accounts
unless they are satisfied that they give a true and fair view of
the state of affairs and profit or loss of the Company for that
period.
In preparing these Accounts, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the Accounts; and
-- prepare the Accounts on the going concern basis unless it is
inappropriate to presume that the Company will continue in
business.
-- prepare a director's report, a strategic report and
director's remuneration report which comply with the requirements
of the Companies Act 2006.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Accounts comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Accounts are published on the www.calculuscapital.com
website, which is a website maintained by the Company's Manager,
Calculus Capital Limited. The maintenance and integrity of the
website maintained by Calculus Capital Limited is, so far as it
relates to the Company, the responsibility of Calculus Capital
Limited. The work carried out by the Auditor does not involve
consideration of the maintenance and integrity of this website and
accordingly, the Auditor accepts no responsibility for any changes
that have occurred to the Accounts since they were initially
presented on the website. Visitors to the website need to be aware
that legislation in the United Kingdom covering the preparation and
dissemination of the Accounts may differ from legislation in their
jurisdiction.
We confirm that to the best of our knowledge:
-- the Accounts, prepared in accordance with UK accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
-- the Annual Report including the Strategic Report includes a
fair review of the development and performance of the business and
the position of the Company together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Jan Ward Chairman
20 May 2021
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the year ended 28 February 2021
and the year ended 29 February 2020 but is derived from those
accounts. Statutory Accounts for 2020 have been delivered to the
Registrar of Companies, and those for 2021 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 2021
Year Ended 28 February 2021 Year Ended 29 February 2020
Revenue Capital Revenue Capital
Return Return Total Return Return Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on
investment at fair
value 9 - 404 404 - (329) (329)
Gains on disposal
of investments 9 - 316 316 - 122 122
Realised foreign exchange
loss on disposal of
investments - (4) (4) - - -
Unrealised foreign
exchange loss on disposal
of investments - - - - (4) (4)
Income 3 151 - 151 154 - 154
Investment management
fee 4 (80) (240) (320) (66) (198) (264)
Other expenses 5 (267) - (267) (239) - (239)
Profit/(deficit) before
taxation (196) 476 280 (151) (409) (560)
Taxation 6 - - - - - -
Profit/(deficit) attributable
to shareholders (196) 476 280 (151) (409) (560)
Profit/(deficit) per
Ordinary share basic
and diluted 8 (0.68)p 1.66p 0.98p (0.69)p (1.89)p (2.58)p
All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the
year.
There is no other comprehensive income as there were no other
gains or losses other than those passing through the Income
Statement.
The revenue and capital return columns are both prepared in
accordance with the AIC SORP.
The notes on pages 58 to 72 form an integral part of these
financial statements.
Statement of Changes in Equity for the year ended 28 February 2021
Share Share Special Capital Capital Capital Revenue Total
Capital Premium Reserve redemption Reserve Reserve Reserve
GBP'000 GBP'000 GBP'000 Reserve Realised Unrealised GBP'000
GBP'000 GBP'000
For the year ended
28 February 2021
1 March 2020 249 10,323 8,725 57 (412) (223) (1,266) 17,453
Investment holding
gains - - - - - 404 - 404
Gain on disposal of
investments - - - - 316 - - 316
Realised foreign exchange
loss on disposal of
investments - - - - (4) - - (4)
Unrealised prior year
foreign exchange loss
on disposal of investments - - - - (4) 4 - -
New share issue 66 4,241 - - - - - 4,307
Expenses of share
issue - (71) - - - - - (71)
Share buybacks for
cancellation (1) - (45) 1 - - - (45)
Management fee allocated
to capital - - - - (240) - - (240)
Change in accrual
in IFA trail commission - 6 - - - - - 6
Revenue return after
tax - - - - - - (196) (196)
Dividends paid - - (870) - - - - (870)
Cancellation of share
premium account - (13,428) 13,428 - - - - -
Transfer of previously
unrealised losses
to realised - - - - (122) 122 - -
28 February 2021 314 1,071 21,238 58 (466) 307 (1,462) 21,060
Statement of Changes in Equity for the year ended 28 February 2021 (Continued)
Share Share Special Capital redemption Capital Capital Revenue Total
Capital Premium Reserve Reserve Reserve Reserve
GBP'000 GBP'000 GBP'000 Reserve Realised Unrealised GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
For the year ended 29
February 2020
1 March 2019 184 5,584 9,488 56 215 (441) (1,115) 13,971
Investment holding losses - - - - - (329) - (329)
Gain on disposal of
investments - - - - 122 - - 122
Unrealised foreign exchange
loss on disposal of
investments - - - - - (4) - (4)
New share issue 66 4,851 - - - - - 4,917
Expenses of share issue - (76) - - - - - (76)
Share buybacks for
cancellation (1) - (54) 1 - - - (54)
Management fee allocated
to capital - - - - (198) - - (198)
Change in accrual in IFA
trail commission - (36) - - - - - (36)
Revenue return after tax - - - - - - (151) (151)
Dividends paid - - (709) - - - - (709)
Transfer of previously
unrealised losses to
realised - - - - (583) 583 - -
Realised of prior year
investment holding gains - - - - 32 (32) - -
29 February 2020 249 10,323 8,725 57 (412) (223) (1,266) 17,453
The notes on pages 58 to 72 an integral part of these financial
statements.
Statement of Financial Position at 28 February 2021
28 February 29 February
2021 2020
Note GBP'000 GBP'000
Non-current assets
Investments at fair value through
profit or loss 9 19,632 14,309
Sales awaiting settlement - 88
Current assets
Debtors 10 119 151
Cash at bank and on deposit 1,562 3,156
Creditors: amount falling due within
one year
Creditors 11 (182) (160)
Net current assets 1,499 3,147
Non-current liabilities
IFA trail commission (71) (91)
Net assets 21,060 17,453
Capital and reserves
Called-up share capital 12 314 249
Share premium 1,071 10,323
Special reserve 21,238 8,725
Capital redemption reserve 58 57
Capital reserve - realised (466) (412)
Capital reserve - unrealised 307 (223)
Revenue reserve (1,462) (1,266)
Equity shareholders' funds 21,060 17,453
Net asset value per Ordinary share
- basic and diluted 13 67.08p 70.20p
These financial statements were approved and authorised for
issue by the Board of Calculus VCT plc 20 May 2021 and were signed
on its behalf by:
Jan Ward
Chairman
20 May 2021
The notes on pages 58 to 72 form an integral part of these
financial statements.
Statement of Cashflows for the year ended 28 February 2021
Year Ended Year Ended
28 February 29 February
2021 2020
Note GBP'000 GBP'000
Cash flows from operating activities
Investment income received 180 64
Deposit interest received 3 7
Investment management fees (308) (245)
Other cash payments (262) (246)
(387) (420)
Net cash flow from operating activities
Cash flow from investing activities
Purchase of investments 14 (5,016) (3,511)
Sale of investments 497 496
Net cash flow from investing activities (4,519) (3,015)
Cash flow from financing activities
Ordinary share issue 4,272 6,274
Expense of Ordinary/D share issue (70) (81)
IFA trail commission (9) (7)
Expenses of Neptune-Calculus transaction - (8)
Share buybacks for cancellation (45) (54)
Equity dividend paid (836) (709)
Net cash flow from financing activities 3,312 5,415
(Decrease)/increase in cash and cash
equivalents
Analysis of changes in cash and cash (1,594) 1,980
equivalents
Cash and cash equivalents at the
beginning of year 3,156 1,176
Net cash (decrease)/increase (1,594) 1,980
Cash and cash equivalents at the
year end 1,562 3,156
The notes on pages 58 to 72 form an integral part of these
financial statements.
Notes to the Financial Statements
1. Company information
The Company is incorporated in England and Wales and operates
under the Companies Act 2006 (the Act) and the regulations made
under the Act as a public company limited by shares, with
registered number 07142153. The registered office of the Company is
104 Park Street, London, W1K 6NF.
2. Accounting Policies Basis of accounting
The Company's financial statements have been prepared under
FRS102 "The Financial Reporting Standard applicable in the United
Kingdom and Republic of Ireland" ('FRS102') and in accordance and
with the Statement of Recommended Practice ("the SORP") for
Investment Trust Companies and Venture Capital Trusts produced by
the Association of Investment Companies ("AIC").
The financial statements are presented in Sterling (GBP).
Going concern
After reviewing the Company's cashflows and projections, the
Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future (being a period 12 months from the date these
financial statements were approved) amid the COVID-19 pandemic.
This is primarily due to the large cash reserves raised through new
subscription offers every year, the funds raised are invested in
accordance with the Company's investment policy and to meet VCT
qualification requirements. The Company therefore continues to
adopt the going concern basis in preparing its financial
statements.
Significant judgements and estimates
Preparations of the financial statements requires management to
make significant judgements and estimates. The items in the
financial statements where these judgements and estimates have been
made are in the valuation of unquoted investments. The valuation
methodologies used when valuing unquoted investments provide a
range of possible values. Judgments are made to determine the best
valuation methodology in order to ascertain the fair value of
unquoted investments. Fair value is calculated within a reasonable
range of estimates. Estimates are based on historical experience
and other assumptions that are considered reasonable under the
circumstances. Hence, investments are measured at fair value in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines. Further information on fair value of
the Company' investments can be found on fair value hierarchy on
page 69. 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 2021 the value of unquoted investments
included within the Company's investment portfolio was
GBP12,207,447 (2020: GBP8,118,626).
Investments
The Company has adopted FRS 102, sections 11 and 12, for the
recognition and measurement of financial instruments. The Company's
business is investing in financial assets with a view to profiting
from their total return in the form of increases in fair value.
Fair value is the amount for which an asset can be exchanged
between knowledgeable, willing parties in an arm's length
transaction. The Company manages and evaluates the performance of
these investments on a fair value basis in accordance with its
investment strategy, and information about the investments is
provided on this basis to the Board of directors.
Investments held at fair value through profit or loss are
initially recognised at fair value, being the methodology used when
assessing that the consideration given was appropriate and
excluding transaction or other dealing costs associated with the
investment, which are expensed and included in the capital column
of the Income Statement.
Gains or losses on investments classified as at fair value
through profit or loss are recognised in the capital column of the
Income Statement and allocated to the capital reserve - unrealised
or realised as appropriate.
All purchases and sales of quoted investments are accounted for
on the trade date basis. All purchases and sales of unquoted
investments are accounted for on the date that the sale and
purchase agreement becomes unconditional.
For quoted investments and money market instruments fair value
is established by reference to bid, or last, market prices
depending on the convention of the exchange on which the investment
is quoted at the close of business on the balance sheet date.
Unquoted investments are valued using an appropriate valuation
technique so as to establish what the transaction price would have
been at the balance sheet date. Such investments are valued in
accordance with the most recent International Private Equity and
Venture Capital ("IPEV") guidelines. Primary indicators of fair
value are derived from price of recent investments or cost,
calibrated with other valuation methods such as earnings or sales
multiples, discounted cash flows, or from net assets.
Earnings or sales multiples are tools that evaluate a financial
metric as a ratio of another, allowing the comparable analysis of
different companies. Relevant multiples are collated from the
analysis of appropriate public companies and precedent transactions
and applied to both historic and forward-looking sales and
earnings, the assumptions of which are based on the Company's
forecasts, providing a suitable enterprise value for the respective
unquoted investment.
A discounted cash flow is a valuation tool used by the Company
to estimate the value of relevant unquoted investments, based on
its forecast cash flows. For the unquoted investments, the majority
of the present value will be in the terminal value, which captures
the value of the investment beyond the forecast period.
Predominantly, the Company assumes an earnings or sales multiple,
based on comparable company analysis, and applies this to the
relevant financial metric for the final year of the investment's
forecast. The present value of forecast future cash flows is
calculated by using an assumed discount rate of 20-25%, which is a
function of the required rate of return over the proposed hold
period of the unquoted investments.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents does not include liquidity fund investments as the
Company does not consider the risk associated with changes in value
to be insignificant.
Debtors
Short term debtors are initially measured at transaction price.
Subsequent remeasurement deducts any impairment from the
transaction price.
Creditors
Short term trade creditors are initially and subsequently
measured at the transaction price.
Income
Dividends receivable on equity shares are recognised as revenue
on the date on which the shares or units are marked as ex-dividend.
Where no ex-dividend date is available, the revenue is recognised
when the Company's right to receive it has been established.
Interest receivable from fixed income securities and premiums on
loan stock investments and preference shares is recognised using
the effective interest rate method. Interest receivable and
redemption premiums are allocated to the revenue column of the
Income Statement. Provision is made against this income where
recovery is doubtful.
Interest receivable on bank deposits is included in the
financial statements on an accruals basis.
Other income is credited to the revenue column of the Income
Statement when the Company's right to receive the income is
established.
Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged to the Income Statement as follows:
Expenses are charged through revenue in the Income Statement
except as follows:
-- costs which are incidental to the acquisition or disposal of
an investment are taken to the capital column of the Income
Statement.
-- expenses are charged to the capital column in the Income
Statement where a connection with the maintenance or enhancement of
the value of the investments can be demonstrated. In this respect
investment management fees have been allocated 75 per cent to the
capital column and 25 per cent to the revenue column in the Income
Statement, being in line with the Board's expected long-term split
of returns, in the form of capital gains and revenue respectively,
from the investment portfolio of the Company.
-- expenses associated with the issue of shares are deducted
from the share premium account. Annual IFA trail commission
covering a five-year period since share allotment has been provided
for in the Accounts as, due to the nature of the Company, it is
probable that this will be payable. The commission is apportioned
between current and non-current liabilities.
Expenses incurred by the Company in excess of the agreed cap,
currently 3 per cent of NAV (excluding irrecoverable VAT, annual
trail commission and performance incentive fees), could be clawed
back from Calculus Capital Limited. Any clawback is treated as a
credit against the expenses of the Company.
Performance fees are recognised as a liability or contingent
liability only when the current obligation to pay the performance
incentive fee exists. As dividend decisions are discretionary, this
obligation is assessed to exist when the dividends already
distributed to a share class plus the net assets attributable to
that share class would reach the performance hurdle.
Share capital
The share capital reserve contains the nominal value of all
shares that have been issued. It is not distributable.
Share premium
The share premium is the excess paid by shareholders on share
allotments above the nominal value of the share. There is currently
a share premium account on the Ordinary shares issued since 8
December 2020. Share premium created prior to 8 December 2020 was
cancelled in order to create a distributable capital reserve. The
special reserve was created on the cancellation of the share
premium account on 20 October 2010 for original ordinary shares, 23
November 2011 for C shares and 1 November 2017 and 8 December 2020
for the Ordinary share class. All of the special reserve created
since November 2017 is now distributable as disclosed below.
Special reserve
The special reserve was created by the cancellation of the
original ordinary share fund's share premium account on 20 October
2010. A further cancellation of the share premium account occurred
on 23 November 2011 for both the original ordinary share fund and C
share fund. A further cancellation of the share premium account
occurred on 1 November 2017 and 8 December 2020 for the Ordinary
share fund. The special reserve is a distributable reserve created
to be used by the Company inter alia to write off losses, fund
market purchases of its own shares and make distributions and/or
for other corporate purposes.
The Company was formerly an investment company under section 833
of the Companies Act 2006. On 18 May 2011, investment company
status was revoked by the Company. This was done in order to allow
the Company to pay dividends to shareholders using the special
reserve.
Capital redemption reserve
The capital redemption reserve accounts for the amounts by which
the issued share capital is reduced through the repurchase and
cancellation of the Company's own shares. A resolution is being put
to shareholders at the upcoming annual general meeting so that the
Company can apply to cancel this reserve and create additional
special reserve.
Capital reserve realised
The capital reserve realised discloses the gains and losses on
disposal of investments and also 75% of management fees as this is
the level associated with the enhancement or maintenance of
investments. Profits achieved from this reserve would be
distributable.
Capital reserve unrealised
The capital reserve unrealised is the appreciation or
depreciation of investments and unrealised exchange gains or losses
on outstanding trades. When an investment is sold the related
balance in the capital reserve unrealised is transferred to the
capital reserve realised.
Revenue reserve
The revenue reserve represents accumulated profit or loss
retained by the Company.
Distributable reserves
Distributable reserves are represented by the special reserve,
the capital reserve realised and the revenue reserve reduced by
negative capital reserve unrealised which total GBP19,307,485, as
at 28 February 2021. From 1 March 2021, GBP6,178,247 of this amount
will be distributable. In accordance with VCT rules, special
reserves created from share premium cannot be distributed until
three years after the accounting period in which the shares were
issued.
Taxation
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the reporting date where
transactions or events that result in an obligation to pay more tax
in the future have occurred at the reporting date. This is subject
to deferred tax assets only being recognised if it is considered
more likely than not that there will be suitable profits from which
the future reversals of the underlying timing differences can be
deducted. Timing differences are differences between the Company's
taxable profits and its results as stated in the financial
statements.
Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which the timing differences
are expected to reverse, based on tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is measured on a non- discounted basis.
No taxation liability arises on gains from sales of fixed asset
investments by the Company by virtue of its venture capital trust
status. However, the net revenue (excluding UK dividend income)
accruing to the Company is liable to corporation tax at the
prevailing rates.
Any tax relief obtained in respect of management fees allocated
to capital is reflected in the capital reserve - realised and a
corresponding amount is charged against revenue. The relief is the
amount by which corporation tax payable is reduced as a result of
capital expenses.
Dividends
Dividends payable to equity shareholders are recognised in the
Statement of Changes in Equity in the period which they are paid or
have been approved by shareholders in the case of a final dividend
and become a liability of the Company.
Interim dividends are recognised when paid. Final dividends are
recognised when approved by shareholders at the AGM when they
become irrevocable and legally binding.
Share buybacks
The Board considers that the Company should have the ability to
purchase its shares in the market with the aim of providing the
opportunity for shareholders who wish to sell their shares to do
so. Subject to maintaining a level of liquidity in the Company
which the Board considers appropriate, it is the intention that
such purchases of shares will be made at a price which represents a
discount of no greater than 5% (or 10% in respect of buybacks made
on or before 28 February 2020) to the most recently published net
asset value per share. Shares bought back will be cancelled.
Where shares are purchased for cancellation, the consideration
paid, including any directly attributable incremental costs, is
deducted from distributable reserves. As required by the Companies
Act 2006, the equivalent of the nominal value of shares cancelled
is transferred to the capital redemption reserve.
3. Income
Year Ended Year Ended
28 February 2021 29 February 2020
GBP'000 GBP'000
UK unfranked loan stock interest 143 121
Liquidity Fund interest 4 26
Bank interest 2 7
Other interest 2 -
151 154
All income arose in the United Kingdom.
The Board considered operating segments and considered there to
be one, that of investing in financial assets.
4. Investment Management Fee
Year Ended 28 February 2021 Year Ended 29 February 2020
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment management
fee 80 240 320 66 198 264
No performance fee was paid during the year or payable at the
year end.
For the year ended 28 February 2021, Calculus Capital Limited
did not contribute (2020: GBPnil contributed) to the expenses of
the Company as the total expenses did not exceed the expense cap.
At 28 February 2021, there was GBP81,158 due to Calculus Capital
Limited for management fees (2020: GBP69,017 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 29 February
2021 2020
GBP'000 GBP'000
Directors' fees 62 68
Calculus secretarial fee (VAT inclusive) 18 18
Administrator's fees 38 38
Fees payable to the Company's auditor for
the audit of the Company's annual accounts 36 29
Fees paid to the auditor for permissible
audit related services - 6
Other 113 80
267 239
Further details of directors' fees can be found in the
Directors' Remuneration Report on page 42 to 45 of the
Accounts.
6. Taxation
Year Ended 28 February Year Ended 29 February
2021 2020
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit/(loss) before
tax (196) 476 280 (151) (409) (560)
Theoretical tax at
UK Corporation Tax
rate of 19.0% (2020:
19.0%) (37) 90 53 (29) (78) (107)
Timing differences:
loss not recognised,
carried forward 37 46 83 29 38 67
Effects of non-taxable
(gains)/ losses (136) (136) - 40 40
Tax charge - - - - - -
The Corporation Tax rate was at 19% for the whole of the
reporting period.
As at 28 February 2021, the Company had GBP1,355,646 (29
February 2020: GBP1,863,227) of excess management expenses to carry
forward against future taxable profits.
The Company's deferred tax asset of GBP257,573 (29 February
2020: GBP316,749) has not been recognised due to the fact that it
is unlikely the excess management expenses will be set off in the
foreseeable future.
7. Dividends
Year Ended Year Ended
28 February 29 February
2021 2020
GBP'000 GBP'000
New ordinary shares
Declared and paid: 3.2p per Ordinary share
in respect of the year ended 29 February
2020 (2019: 3.4p) 870 709
The Board have proposed an Ordinary share dividend in respect of
the year to 28 February 2021 of 3.02 pence per share which, if
approved by shareholders, will be paid on the 30 July 2021 to all
Ordinary shareholders on the register on 1 July 2021.
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 (Basic and Diluted)
Year Ended 28 February 2021 Year Ended 29 February 2020
Revenue pence Capital pence Total pence Revenue pence Capital pence Total pence
Return per Ordinary share (0.68) 1.66 0.98 (0.69) (1.89) (2.58)
Ordinary share return
Revenue return per Ordinary share is based on the net revenue
loss after taxation of GBP195,904 (2020: GBP150,950) and on
28,735,205 Ordinary shares, (2020: 21,728,528) being the weighted
average number of Ordinary shares in issue during the period.
Capital return per Ordinary share is based on the net capital
gain for the period of GBP475,951 (2020: loss GBP409,408) and on
28,735,205 Ordinary shares (2020: 21,728,528) being the weighted
average number of Ordinary shares in issue during the period.
Total return per Ordinary share is based on the net gain for the
period of GBP280,047 (2020: loss GBP560,358) and on 28,735,205
Ordinary shares (2020: 21,728,528), being the weighted average
number of Ordinary shares in issue during the period.
9. Investments
Year Ended 28 February Year Ended 29 February
2021 2020
VCT Other Total VCT Other Total
Qualifying Investments Qualifying Investments
Investments Investments
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening book
cost 8,878 5,650 14,528 6,384 5,650 12,034
Opening
investment
holding
(losses)/gains (237) 18 (219) (447) 6 (441)
Opening fair
value 8,641 5,668 14,309 5,937 5,656 11,593
Movements in
year:
Purchases at
cost 5,016 - 5,016 3,511 - 3,511
Sales proceeds (411) (2) (413) (588) - (588)
Realised
gain/(losses)
on sales 317 (1) 316 122 - 122
Prior year
unrealised
(gains)/losses
realised
during the
year (120) (2) (122) - - -
Increase in
investment
holding
gains/(losses) 522 4 526 (341) 12 (329)
Closing fair
value 13,965 5,667 19,632 8,641 5,668 14,309
Closing book
cost 13,680 5,645 19,325 8,878 5,650 14,528
Closing
investment
holding
gains/(losses) 285 22 307 (237) 18 (219)
Closing fair
value 13,965 5,667 19,632 8,641 5,668 14,309
The Company sold investments of GBP413,000 in the year. The book
cost of these investments when they were purchased was GBP209,000.
These investments have been revalued over time and until they were
sold any unrealised gains/losses were included in the fair value of
the investments.
In the year to 28 February 2021, C4X Discovery had an uplift in
fair value of GBP695,000, Scancells fair value increased by
GBP442,000 and Oxford Biotherapeutics by GBP367,000. Evoterra which
bought the share capital of Terrain Energy and MicroEnergy was
written down by GBP332,000. Also, during the year Arcis was written
down by GBP272,000 and Money Dashboard by GBP222,000.
Note 16 to the financial statements provides a detailed analysis
of investments held at fair value through profit or loss.
10. Debtors
Year Ended Year Ended
28 February 29 February
2021 2020
GBP'000 GBP'000
Current debtors
Prepayments and accrued income 119 151
Non Current debtors
Sales awaiting settlement - 88
119 239
11. Creditors
Year Ended Year Ended
28 February 29 February
2021 2020
GBP'000 GBP'000
Management fees 81 69
Audit fees 31 29
Directors' fees 10 10
Secretarial fees 5 5
Administrator's fees 3 6
IFA trail commission 20 15
Other creditors 32 26
182 160
12. Share Capital
Number of shares Ordinary shares
Ordinary shares of 1p each
Opening balance 01 March 2020 24,862,968
New issue of Ordinary shares 6,549,781
New issue of Ordinary shares via dividend reinvestment scheme 53,552
Share buyback Ordinary shares (73,209)
Closing balance 28 February 2021 31,393,092
Ordinary share
Nominal value
GBP'000
Ordinary shares of 1p each
Opening balance 01 March 2020 249
New issue of Ordinary shares 65
New issue of Ordinary shares via dividend reinvestment scheme 1
Share buyback Ordinary shares (1)
Closing balance 28 February 2021 314
On 3 April 2020, 2,342,066 Ordinary shares were issued for total
consideration of GBP1,544,124. On 31 July 2020, 1,731,817 Ordinary
shares were issued for total consideration of GBP1,136,71, of
which, and 52,091 Ordinary shares were issued as part of the
Dividend Reinvestment scheme. On 3 September 2020, 798,895 Ordinary
shares were issued for a total consideration of GBP520,100, and
1,461 Ordinary shares were issued as part of the Dividend
Reinvestment scheme. On 16 December 2020, 1,729,094 Ordinary shares
were issued for total consideration of GBP1,102,816.
On 18 June 2020 and 22 February 2021, the Company bought back
for cancellation, 22,127 and 51,082 Ordinary shares
respectfully.
All Ordinary shares are fully paid, rank pari passu and carry
one vote per share.
Under the Articles of Association, a resolution for the
continuation of the Company as a VCT will be proposed at the Annual
General Meeting falling after the tenth anniversary of the last
allotment (from time to time) of shares in the Company and
thereafter at five-yearly intervals.
13. Net Asset Value per Share
28 February 2021 29 February
GBP'000 2020
GBP'000
Net asset value per Ordinary
share 67.08p 70.20p
The basic and diluted net asset value per Ordinary share is
based on net assets of GBP21,059,689 (29 February 2020:
GBP17,453,046) and on 31,393,092 Ordinary shares (29 February 2020:
24,862,968), being the number of Ordinary shares in issue at the
end of the year.
14. Reconciliation of Net Loss before Tax to Cash Flow from Operating Activities
28 February 29 February
2021 2020
GBP'000 GBP'000
Profit/(loss) for the year 280 (560)
(Gains)/losses on investments (716) 211
Decrease/(increase) in debtors 32 (91)
Increase in creditors 17 20
Cash flow from operating activities (387) (420)
15. Financial Commitments
At 28 February 2021, the Company did not have any financial
commitments which had not been accrued for (2020: nil).
16. Financial Instruments
The Company's financial instruments comprise securities and cash
and liquid resources that arise directly from the Company's
operations.
The principal risks the Company faces in its portfolio
management activities are:
-- Market price risk
-- Liquidity risk
The Company does not have exposure to foreign currency risk.
a) Market price risk
Qualifying Investments
Market risk embodies the potential for losses and includes
interest rate risk and price risk.
The management of market price risk is part of the investment
management process. The portfolio is managed in accordance with
policies in place as described in more detail in the Chairman's
Statement and Manager's Review (Qualifying Investments).
The Company's strategy on the management of investment risk is
driven by the Company's investment objective as outlined above.
Investments in unquoted companies and AIM-traded companies, by
their nature, involve a higher degree of risk than investments in
the main market. Some of that risk can be mitigated by diversifying
the portfolio across business sectors and asset classes.
Interest is earned on cash balances and money market funds and
is linked to the banks' variable deposit rates. The Board does not
consider interest rate risk to be material. Interest rates arising
on loan stock instruments is not considered significant as the main
risk on these investments are credit risk and market price risk.
The weighted average interest rate earned on the loan stock
instruments as at 28 February 2021 was 9.2% (2020: 9.7%).
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 2021 As at 29 February 2020
Fair Value Cash Flow Fair Value Cash Flow
Interest Rate Interest Interest Interest
Rate Rate Rate
Risk GBP'000 Risk GBP'000 Risk GBP'000 Risk GBP'000
Loan stock 1,828 - 1,625 -
Money market funds - 5,667 - 5,665
Cash - 1,562 - 3,156
1,828 7,229 1,625 8,821
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 0.1 per cent as at 28 February 2021.
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
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 Manager monitor the Company's
risk by reviewing the custodian's internal control reports.
Sensitivity Analysis
The Board considers that the value of investments in equity and
loan stock instruments are sensitive to changes to trading
performance and the fluctuations of wider public equity markets.
Such changes affect the enterprise value of AIM listed and unquoted
companies.
In light of COVID-19 we have set the changes to a rate of 25%
where as historically we had used a rate of 10%, including the
sensitivity analysis for last year.
The sensitivity below has been applied to AIM listed investments
with a 25% movement in share price and to unquoted securities
valued with reference to market inputs such as multiples of
earnings or revenue and discounted cash flows, with a 25% movement
in such market input applied.
As at 28 of February 2021, if the AIM listed investments share
price had been 25% higher or lower with all other variables held
constant, the increase or decrease on net assets at the year end
would be GBP442,407.
As at 28 of February 2021, if the unquoted securities had a 25%
increase or decrease in the market input (due to the movement in
the quoted securities) with all other variables held constant, the
increase or decrease in net assets would be GBP1,826,027.
The combined total increase or decrease on net assets would be
GBP2,268,434 (2020: GBP361,057). The increases and decreases are
based on the current portfolio value GBP19,632,249 (2020:
GBP14,309,364). The variance of 25% is the Managers assessment of
reasonable possible change in light of recent events. The
sensitivity analysis assumes the actual portfolio of investments
held by the Company is symmetrically correlated to this overall
movement in net assets. However, in reality unquoted companies have
other factors which may influence the extent of the valuation
change.
b) Liquidity risk
The Company's liquidity risk is managed on an ongoing basis by
the Manager. The Company's overall liquidity risks are monitored on
a quarterly basis by the Board.
The Company maintains sufficient investments in cash and readily
realisable securities to pay accounts payable and accrued expenses
as they fall due.
Maturity profile
The carrying value of fixed rate investments in unquoted
companies held at 28 February 2021, which is analysed by expected
maturity date, is as follows:
Within Within Within Within Within More than Total
1 year 1 - 2 2 - 3 3 - 4 4 - 5 5 years
years years years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 28 February 2021
Loan stock - - 145 1,150 533 - 1,828
As at 29 February 2020
Loan stock 95 - - 280 1,250 - 1,625
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 2021, the Company had no borrowings.
c) Capital management
The capital structure of the Company consists of cash held and
shareholders' equity. Capital is managed to ensure the Company has
adequate resources to continue as a going concern, and to maximise
the income and capital return to its shareholders, while
maintaining a capital base to allow the Company to operate
effectively in the market place and sustain future development of
the business. To this end the Company may use gearing to achieve
its objectives. The Company's assets and borrowing levels are
reviewed regularly by the Board.
d) Fair value hierarchy
Investments held at fair value through profit or loss are valued
in accordance with IPEV guidelines.
The valuation method used will be the most appropriate valuation
methodology for an investment within its market, with regard to the
financial health of the investment and the IPEV guidelines.
As required by the Standard, an analysis of financial assets and
liabilities, which identifies the risk of the Company's holding of
such items, is provided. The Standard requires an analysis of
investments carried at fair value based on the reliability and
significance of the information used to measure their fair value.
In order to provide further information on the valuation techniques
used to measure assets carried at fair value, we have categorised
the measurement basis into a "fair value hierarchy" as follows:
-- Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active
markets for identical assets. Quoted in an active market in this
context means quoted prices are readily and regularly available and
those prices represent actual and regularly occurring market
transactions on an arm's length basis. The quoted price is usually
the current bid price. The Company's investments in AIM quoted
equities and money market funds are classified within this
category.
-- Valued using models with significant observable market parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted
prices included within Level 1 that are observable for the asset,
either directly or indirectly.
-- Valued using models with significant unobservable market parameters - "Level 3"
Inputs to Level 3 fair values are unobservable inputs for the
asset. Unobservable inputs may have been used to measure fair value
to the extent that observable inputs are not available, thereby
allowing for situations in which there is little, if any, market
activity for the asset at the measurement date (or market
information for the inputs to any valuation models). As such,
unobservable inputs reflect the assumptions the Company considers
that market participants would use in pricing the asset. The
Company's unquoted equities and loan stock are classified within
this category. As explained in note 1, unquoted investments are
valued in accordance with the IPEV guidelines.
The table below shows assets measured at fair value categorised
into the three levels referred to above. During the year there were
no transfers between Levels 1, 2 or 3.
Financial Assets at Fair Value through Profit
or
Loss at 28 February 2021
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Unquoted equity - - 10,379 10,379
Quoted equity 1,758 - - 1,758
Money market funds 5,667 - - 5,667
Loan stock - - 1,828 1,828
7,425 - 12,207 19,632
Financial Assets at Fair Value through Profit
or Loss at 29 February 2020
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Unquoted equity - - 6,493 6,493
Quoted equity 526 - - 526
Money market funds 5,665 - - 5,665
Loan stock - - 1,625 1,625
6,191 - 8,118 14,309
Reconciliation of fair value for level 3 financial instruments
held at the year end:
Level 3 Investments
Unquoted Equity Loan Stock Total
GBP'000 GBP'000 GBP'000
Fair value as at 29
February 2020 6,493 1,625 8,118
Purchases at cost 4,483 533 5,016
Disposal Proceeds (1) (95) (96)
Realised losses on disposal (2) - (2)
Prior year unrealised
(gains)/losses realised
during the period (2) - (2)
Unrealised movement (592) (235) (827)
Fair value as at 28
February 2021 10,379 1,828 12,207
Unquoted investments are valued using an appropriate valuation
technique so as to establish what the transaction price would have
been at the balance sheet date. Such investments are valued in
accordance with the most recent International Private Equity and
Venture Capital ("IPEV") guidelines. Primary indicators of fair
value are derived from price of recent investments or cost,
calibrated with other valuation methods such as earnings or sales
multiples, discounted cash flows or from net assets.
Where the effect of changing one or more inputs to reasonably
possible alternative assumptions would result in a significant
change to the fair value measurement, information on this
sensitivity is mentioned above on page 68. The information used in
determination of the fair value of Level 3 investments is chosen
with reference to the specific underlying circumstances and
position of the investee company.
17. Related Parties' Transactions
John Glencross, a director of the Company, is a director of
Calculus Capital Limited and owns 50 per cent of the shares of its
holding Company. Calculus Capital Limited receives a Manager's fee
from the Company. As disclosed in Note 4, for the year ended 28
February 2021, Calculus Capital Limited earned GBP319,639 of
management fees (2020: GBP264,358). Calculus Capital Limited also
earned a company secretarial fee of GBP18,000 (2020:
GBP18,000).
Calculus Capital Limited took on the expenses cap on 15 December
2015. In the year to 28 February 2021, Calculus Capital Limited did
not contribute towards the expenses of the Company as the expense
cap was not reached during the year. (2020: contributed
GBPnil).
18. Transactions with the Manager
John Glencross, a Director of the Company, is Chief Executive
and a director of Calculus Capital Limited, the Company's Manager.
He does not receive any remuneration from the Company. He is a
director of Maven Screen Media Limited and Home Team Content
Limited.
In the year to 28 February 2021, Calculus Capital receives fees
from certain portfolio companies. The aggregate amounts received by
Calculus Capital Limited for any monitoring, provision of a
director and arrangement fees, as appropriate, from the investee
companies in relation to the Company's investment was as
follows:
2021 2020 2021 2020
Antech Limited GBP536 GBP524 MIP Diagnostics Limited GBP8,999 GBP0
Arcis Biotechnology GBP9,695 GBP180 Mologic Limited GBP629 GBP719
Holdings Limited
Arecor Limited GBP14,896 GBP750 Money Dashboard Ltd GBP1,507 GBP793
Blu Wireless Technology GBP3,261 GBP2,641 Open Energy Market GBP2,520 GBP2,782
Limited Limited
Cloud Trade Technologies GBP4,320 GBP4,213 Oxford Biotherapeutics GBP6,179 GBP2,325
Limited Limited
Cornerstone Brands GBP2,027 GBP3,240 Park Street Shipping GBP1,095 GBP1,066
Limited Limited
Duvas Technologies GBP13,380 GBP3,444 Pico's Limited GBP200 GBP1,115
Limited
eConsult Health Limited GBP17,000 GBP0 Quai Administration GBP2,816 GBP2,185
Services Limited
Essentia Analytics GBP2,865 GBP3,118 Raindog Films Limited GBP2,553 GBP14,209
Limited
Every1Mobile Limited GBP7,786 GBP3,518 Rotageek Limited GBP20,232 GBP0
Evoterra Limited GBP5,507 GBP6,377 ThanksBox Limited GBP33,687 GBP0
Fiscaltec Group Limited* GBP3,039 GBP10,500 Wazoku Limited GBP7,992 GBP3,150
Home Team Content Limited GBP47,241 GBP0 Weeding Technologies GBP2,101 GBP2,026
Limited
IPV Limited GBP2,139 GBP2,361 WheelRight Limited GBP1,849 GBP964
Maven Screen Media GBP9,909 GBP0 Wonderhood Limited GBP1,941 GBP11,528
Ltd
Maze Theory Limited GBP5,348 GBP0
*100% of this fee relates to the VCT
19. Post balance sheet events
The Company sold its remaining shares in Genedrive on 3 March
2021 for a consideration of GBP88,021.
Axol Bioscience Ltd, an established provider of stem cells
produced from reprogrammed human blood and tissue cells, and CENSO
Biotechnologies, a cell biology CRO, merged on the 19 March 2021.
The new entity will become a leading provider of product and
service solutions in the induced pluripotent stem cell (iPSC)-based
neuroscience, immune cell, and cardiac disease modelling, drug
discovery and screening within pharma and biotechnology companies.
On 1 April 2021, the Company invested GBP650,906 in CENSO
Biotechnologies.
On the 29 March 2020, the company made a GBP375,000 investment
into Invizius. Invizius addresses the side effects of dialysis
patients. Currently life expectancy on dialysis is just one-third
of normal, and half of patients die from cardiovascular
complications. The problem is the immune system sees the dialysis
filter as a foreign body, creating inflammation that damages the
cardiovascular system over time, and multiple treatments.
Invizius's H-Guard(TM) product is a powerful anti-inflammatory that
can be used to coat the filter surface to 'hide' it and prevent an
immune response. The innovative technology also has potential for
use with devices such as heart and lung machines, stents, and
grafts or in organ and cell transplants.
Since the year end the Company has made a further allotment of
Ordinary shares. On 1 April 2021, a further 7,103,371 Ordinary
shares were allotted at an average price of 65 pence per share.
Cornerstone FS plc was listed on the AIM market on 6 April
trading at 61.5 pence per share.
The Company made a follow-on investment of GBP50,000 into Arcis
Biotechnology holdings on 30 April 2021.
On 10 May 2021, the Company's holdings in Open Orphan plc were
fully divested for a consideration of GBP100,000 resulting in a
1.8x return.
In light of the regulations on social distancing, the Board is
considering contingency plans for the 2021 AGM taking into account
the evolving nature of the regulations and announcements from the
Financial Reporting Council and the Financial Conduct Authority.
Please refer to the Notice of Meeting from page 73 of this
document.
Glossary of Terms
Accumulated Shareholder Value
The sum of the current NAV and cumulative dividends paid to
date.
Alternative performance measure (APM)
An Alternative performance measure is a measure of a past or
future financial position, performance or cash flows that is not
prescribed by the relevant accounting standards.
Annual Yield
This is used to show the real rate of return on the portfolio.
The annual yield is calculated by dividing the final proposed
dividend over the net asset value per share.
C share fund
The net assets of the Company attributable to the former C
shares (including any income and/or revenue arising from or
relating to such assets) prior to the merger of the share
classes.
D share fund
The net assets of the Company attributable to the D shares
(including any income and/or revenue arising from or relating to
such assets) prior to the merger of the share classes.
Final Dividend Proposed
The dividend declared or proposed to be distributed among the
shareholders of the Company during a financial year which will be
paid in the next financial year
IPEV Guidelines
The International Private Equity and Venture Capital Valuation
Guidelines published in December 2019, used for the valuation of
unquoted investments.
Net Asset Value or NAV per share
Shareholders' funds expressed as an amount per share.
Shareholders' funds are the total value of a company's assets, at
current market value, having deducted all prior charges at their
par value (or at their market value).
Old ordinary share fund
The net assets of the Company attributable to the old Ordinary
shares (including any income and/or revenue arising from or
relating to such assets) prior to the merger of the share
classes.
Ordinary share Fund
The net assets of the Company attributable to the new Ordinary
shares (including any income and/or revenue arising from or
relating to such assets).
Portfolio Income Yield
The amount of investment income generated by the portfolio
during a certain period of time, expressed as a percentage.
Portfolio income yield is calculated by dividing the total
investment income during the period over the total cost of the
portfolio.
Share Price discount
The difference between the share price and the net asset value
per share expressed as a percentage.
Total return per share
Total return per share is a non-GAAP Alternative Performance
Measure ("APM"). It is taken from the Income Statement on page 53
and is calculated by taking the total profit or loss for the period
and dividing by the weighted average number of shares. This has
been selected to provide better understanding of the Company's
performance over the period on a per share basis.
VCT Value
The value of an investment calculated in accordance with section
278 of the Income Tax Act 2007 (as amended).
Qualifying Investments
An unquoted (or AIM-traded) company which satisfies the
requirements of Part 4, Chapter 6 of the Income Tax Act 2007 (as
amended).
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