TIDMNEP TIDMTTM
RNS Number : 1414A
Neptune-Calculus Income &Growth VCT
21 March 2017
FINANCIAL HIGHLIGHTS
Ordinary Shares Year ended 31
December 2016
NAV as at 31 December 2016 32.5p
Cumulative dividends paid to 31
December 2016 37.5p
Accumulated shareholder valueÙ 70.0p
Recommended Final Dividend 2.0p
Ù Accumulated shareholder value represents
net asset value per share plus cumulative dividends
paid per share since inception.
As at 28 February
2017*
Unaudited net asset value per share 32.6p
* Being the latest practicable date
prior to publication.
Including current year revenue.
CHAIRMAN'S STATEMENT
The Company's results for the year ended 31 December 2016 were
mainly affected by falls in the share prices of two AIM quoted
qualifying stocks, Genedrive plc and Scancell Holdings plc
("Scancell"). This is disappointing as the falls in their share
prices mask a year of considerable progress for these companies.
Net asset value per share at the year end was 32.5 pence compared
to 39.3 pence for the prior year. Of this decline, 3.5 pence
reflected the dividends paid in the year. The remainder of the fall
of 3.3 pence per share was largely attributable to a decline in the
share prices of the Genedrive plc and Scancell. Net asset value per
share (excluding dividends paid in the period) rose slightly in the
second half of the year and, overall, I believe it to have been a
year of progress for many of the companies in the portfolio.
Investment performance (Qualifying Investments)
The Company continues to meet its requirements to qualify as a
VCT. Our qualifying investments are managed by Calculus Capital
Limited and are in a combination of unquoted and AIM companies.
During the year, the Company made six new qualifying
investments. In January 2016, GBP100,000 was invested in Arcis
Biotechnology Holdings Limited ("Arcis"). Arcis is a Cheshire
based, research and development ("R&D"), company which has used
its technology platform to develop innovative products in the DNA
extraction, agriculture and hygiene markets. In April 2016, the
Company invested GBP150,000 in a developer of novel therapeutic
vaccines for treating cancer, Scancell. In September 2016, the
Company invested GBP100,000 in drug discovery and development
company, C4X Discovery Holdings plc. In December 2016, the Company
invested in three new companies. GBP100,000 was invested in Air
Leisure Group Limited (trading as "Jumptastic"), an operator of
trampoline parks across the UK and Europe. Another GBP100,000 was
invested in Origin Broadband Limited ("Origin"), a Yorkshire-based
provider of internet and telephone services. Finally, before the
year end, GBP100,000 was invested in Weeding Technologies Limited,
a cleantech company whose technology treats weeds and moss.
Dryden Human Capital Group Limited's equity was written down to
nil at the year end, impacting net asset value by approximately 0.4
pence per share, ahead of the sale of the company in January 2017
in which the Company recovered the value of its loan stock. RMS
Europe Limited and Terrain Energy Limited were both written down by
approximately 10 per cent in the period, reflecting tougher trading
conditions.
The Company successfully exited its holding in Human Race Group
Limited in September 2016, achieving a return of 32%.
A more detailed analysis of investment performance can be found
in the Investment Manager's Review that follows this statement.
Investment performance (Non-Qualifying Investments)
Our non-qualifying investments comprise holdings in the Neptune
Income Fund, the Neptune Quarterly Income Fund and liquidity funds.
Our investments in the Neptune Income Fund rose by 9 per cent but
declined in the Neptune Quarterly Income Fund by 4 per cent over
the year.
At the year end, the Company held GBP50,000 in the Aberdeen
Global Liquidity Fund, GBP103,000 in the Fidelity Liquidity Fund,
and GBP175,000 in the liquidity fund held with Goldman Sachs Asset
Management.
Share buyback
During the year the Company purchased 100,000 shares for
cancellation. In line with its policy of returning cash to
shareholders, the Company may carry out limited share buybacks in
the future if it considers it to be in the best of interests of all
shareholders.
Board changes
In view of the fact that I have served as Chairman of your
Company since its launch in 2004, I have decided to retire from the
Board at the forthcoming AGM to be held on 22nd June 2017. In the
meantime a number of candidates are currently being considered for
my replacement as Chairman and we expect to be able to make an
announcement in the coming weeks.
Dividends
The Company paid the 2015 final dividend of 2 pence per share in
June 2016 and an interim dividend for 2016 of 1.5 pence per share
in October 2016. The total dividends paid to an ordinary
shareholder to date are 37.5p.
The directors are pleased to propose a final dividend for 2016
of 2 pence per Ordinary Share which, subject to shareholder
approval, will be payable on 30 June 2017 to shareholders on the
register on 26 May 2017.
In addition your board is considering strategic options for the
Company which may lead to proposals involving a significant return
of capital to shareholders. We look forward to providing you with
more information over the coming months.
Outlook
The UK economy remains strong though it is difficult to assess
what impact the commencement of formal 'Brexit' negotiations may
have. However, the outlook for young growing companies remains
positive and should support future growth in the portfolio and
provide opportunities for new investment.
Philip Stephens Chairman
21 March 2017
INVESTMENT MANAGER'S REVIEW (QUALIFYING INVESTMENTS)
Calculus Capital Limited manages the Company's qualifying
portfolio. The Company invests in a diversified portfolio of UK
growth companies, whether unquoted or traded on AIM.
Portfolio developments
At the year end, the portfolio of qualifying investments
comprised 14 companies, made up of both unquoted and AIM stocks.
The fall in the Net Asset Value was largely attributable to a
decline in the share price of AIM quoted holding, Genedrive. This
was due to an overhang of stock in the market, representing about
5% of Genedrive's total equity, from several institutions which did
not participate in the fundraising in July 2016. These shares were
placed with other institutions in February 2017 but the placing
served to push down the share price further. Two new quoted
investments were made in the year, in C4X Discovery plc and
Scancell Holdings plc, both quoted on AIM. Scancell's price has
decreased by 15 per cent compared to cost. This is disappointing as
each of these companies showed underlying progress during the year
under review which is detailed later in the report.
The unquoted portfolio declined in value by 7 per cent, largely
because RMS Europe Limited and Terrain Energy Limited, the two
largest holdings in the portfolio, were both written down by 10 per
due to more adverse trading conditions in 2016. Four new qualifying
investments were made during the year, Arcis, Jumptastic, Weeding
Technologies and Origin. The section on unquoted portfolio
companies in this report contains further information.
Quoted portfolio Genedrive plc ("Genedrive")
Genedrive(R), a next-generation Point of Care molecular
diagnostic system, provides a low cost, rapid, simple to use and
robust platform for the diagnosis of infectious diseases. The
company is making progress towards realising the potential of the
Genedrive(R) platform in a range of applications through own
programmes and partnerships. Progress continues to be made with the
Hepatitis C (HCV) test and the company is targeting submission for
CE Marking by the end of March based on highly encouraging
performance results. End user sales in India for the TB assay have
been slow mainly due to sample preparation issues for the test in
field that are unique to the TB assay. In January, Genedrive
announced that the US Department of Defense was starting field
trials of a handheld, rapid biohazard identifier developed by
Genedrive.
C4X Discovery Holdings plc ("C4X")
In September, the Company invested GBP100,000 in C4X as part of
a GBP3 million equity investment by funds managed by Calculus
Capital Limited. C4X is an innovative company in the discovery,
design and development of small molecule drugs. The company was
spun out of the University of Manchester in July 2007. During 2016,
the company enhanced its drug discovery engine through acquisitions
and continued to broaden its portfolio of proprietary drug
programmes. The acquisitions (Adorial Limited's innovative target
discovery platform technology, Taxonomy3, and Molplex Limited's
pioneering chemoinformatics and artificial intelligence software
platform) combine with C4X's drug discovery and rational molecule
optimisation technology platform, Conformetrix, to create a
state-of-the-art drug discovery engine. Approximately two-thirds of
new drugs originate from smaller biotech companies. C4XD continues
to build and progress its pipeline of programmes in a variety of
therapeutic areas including addiction, diabetes, inflammatory
diseases and cancer. The company has collaborations in place with
the University of Oxford Structural Genomics Consortium and Evotec
AG.
Scancell Holdings plc ("Scancell")
Scancell is developing two distinct immune-oncology platforms,
ImmunoBody(R) and Moditope(R), each with broad applications. Both
platforms are targeting multi-billion dollar markets. SCIB1 (based
on the ImmunoBody(R) platform) has achieved unprecedented survival
rates in a phase I/II clinical trial covering twenty patients for
malignant melanoma. The initial results show survival and
progression free data well beyond established norms. A phase II
combination trial of SCIB1 together with Keytruda, a checkpoint
inhibitor, will commence out of Massachusetts General Hospital in
Boston and include Harvard Medical School, MD Anderson, Memorial
Sloan Kettering and the Division of Medical Oncology at University
of Colorado. The two drugs work in different ways and Keytruda is
relatively toxic whilst SCIB-1 is far less so on evidence to date.
It is believed that a combination treatment of the two drugs will
significantly increase the success rate in the treatment of
advanced melanoma beyond current norms without significant
additional toxicity. A phase I trial for Modi-1 (based on the
Moditope(R) platform) targeting triple negative breast cancer,
osteosarcoma and ovarian cancer is scheduled for 2018. The
scientific principle behind Moditope(R) is autophagy which is the
hitherto obscure area of medical research which was the subject of
this year's Nobel Prize for Medicine. Scancell is also developing
SCIB2 (based on the ImmunoBody(R) platform) for the treatment of
non-small cell lung cancer (NSCLC) in combination with a checkpoint
inhibitor. In January 2017, Scancell announced a collaboration with
The Addario Lung Cancer Medical Institute and the Bonnie J. Addario
Lung Cancer Foundation to evaluate the use of SCIB2 to treat
NSCLC.
Unquoted portfolio Arcis Biotechnology Holdings Limited
("Arcis")
Arcis has developed an innovative DNA extraction process which
is on the cusp of commercialisation.
DNA extraction, essentially opening cells to allow access to
their DNA without damaging them, is a necessary preliminary step
before DNA analysis and sequencing can be performed. Over the last
20 years, there have been huge advances in DNA analysis and
sequencing, but little change in DNA extraction protocols, which
are slow and cumbersome. Arcis' extraction process is much faster
and simpler, and also offers a much higher level of DNA
stabilisation. This enhanced stabilisation is important in
dislodging long established laboratory procedures and, potentially
very significantly, it extends to stabilisation of RNA which other
processes cannot do (because RNA, which performs an information
carrying role in a cell, is inherently less stable than DNA).
During 2016, Arcis' initial products, targeting both human and
infectious disease DNA extraction, have undergone external
validation with a number of companies and key opinion leaders and
achieved CE-mark certification. In early 2017, heads of terms were
signed with the first customer to include Arcis' products in their
diagnostic devices, and some sales direct to end-users
commenced.
From the same technology platform, Arcis has created two crop
and turf yield improvement products. These are on the market and
making a positive contribution, but do not have the same potential
as DNA extraction and are considered non-strategic assets. The
company is also working on the development of a novel biopesticide
to treat nematodes. As its components are naturally occurring
(rather than chemical) and trials to date have exceeded
expectations, this product may have significant potential, although
it is at a relatively early stage of development.
Dryden Human Capital Group Limited ("Dryden")
Dryden is a specialist actuarial, insurance and compliance
recruitment company which was sold in January 2017. The value of
the equity was written off in 2016 impacting the Company's net
asset value by 0.4 pence per share, but the Company received a
repayment of loan stock.
Air Leisure Limited ("Jumptastic")
In the period under review, the Company made a new unquoted
investment of GBP100,000 in Jumptastic as part of a
GBP3m equity investment by funds managed by Calculus Capital
Limited. Jumptastic operates trampoline parks in the UK and
Continental Europe. Its first site opened in Gloucester in October
2015, trading under the brand name Jumptastic. This site
incorporates 90 interlinked trampolines and has traded profitably
since inception. The company's second site opened in Copenhagen,
Denmark in January 2017 and the team have a strong pipeline of
potential sites identified across Scandinavia which they will look
to open in 2017.
MicroEnergy Generation Services Limited ("MicroEnergy")
MicroEnergy owns and operates a fleet of 166 small onshore wind
turbines (5kW) installed on land in East Anglia and Yorkshire.
Revenues from the fleet of turbines come from two sources, both of
which are inflation protected, being directly linked to RPI. First,
there is the Government backed feed-in tariff (FIT) paid by the
electricity suppliers for every kilowatt of electricity generated
for twenty years. Secondly, there is an export tariff for any
surplus electricity not used by the site owner that is exported to
the grid. The valuation of MicroEnergy has been reduced as changes
to legislation means that it is likely that business rates will now
be payable on the installations. MicroEnergy has appointed an
adviser to assist with its sale - expected to be in the first half
of 2017.
Origin Broadband Limited ("Origin")
The Company invested GBP100,000 in Origin in December, a
provider of internet and phone services, based in Yorkshire. Since
launch in 2011, when it acquired for no cost part of the Digital
Europe network built with EU and government funding which Digital
Europe was proposing to close, Origin has developed its own
infrastructure and now has the sixth largest broadband network in
the UK measured by points of presence. As an operator of its own
physical network, Origin is able to deal directly with Openreach,
the BT division that maintains the UK's main telecoms network. This
gives the company greater control over the underlying circuits and
equipment; allowing it to provide a better service level than a
pure reseller and making it easier to give commitments on speed.
The company's core network is composed of over 50 points of
presence, together with diverse network links to locations
including Manchester, London and datacentres including Telecity
North and Telecity 8/9 Harbour Exchange.
Origin is seen as an agile alternative to the unwieldy corporate
giants, with a focus on providing faster broadband speeds, a
competitive pricing model and first-class customer service. More
and more businesses are moving to cloud computing and the need for
excellent 24/7 support is an important factor when choosing a
provider. Likewise, consumers are using ever increasing amounts of
data and require fast/superfast broadband services. Current clients
include Amazon - where Origin is the preferred provider for all new
warehouse and corporate sites, NHS Sheffield and various UK
universities.
Funds managed by Calculus Capital Limited invested GBP3 million
in Origin of which GBP100,000 came from the Company.
RMS Europe Limited ("RMS")
RMS provides port services from six locations on the Humber
Estuary, the UK's busiest trading estuary. Trading conditions
throughout 2016 were challenging and the implications of Brexit
have created some uncertainty about future trade between the UK and
continental Europe. Despite this, RMS achieved increased turnover
and profitability in the year. This holding is showing a
significant return on cost and will be sold when the right
opportunity arises.
Solab Group Limited ("Solab") (formerly Hampshire Cosmetics)
Solab is a long established manufacturer of fragrances, shampoos
and skincare products for third party customers, including
Penhaligon's and Philip Kingsley. Its cosmetics business has been
affected by a significant reduction in volumes from its largest
customer, The Body Shop, as a result of L'Oreal's decision to
in-source manufacturing to French factories following its
acquisition of The Body Shop. New business from third parties is
beginning to replace lost turnover, although Solab has also had
success in growing existing customer accounts. In January 2017,
L'Oreal announced the intention to sell The Body Shop. It is too
early to say whether this represents an opportunity for Solab to
win back business.
Terrain Energy Limited ("Terrain")
Terrain has interests in eleven petroleum licences: Keddington,
Kirklington, Dukes Wood, Burton on the Wolds, Whisby and Louth in
the East Midlands, Larne in Northern Ireland, Brockham and Lidsey
in the Weald Basin and Egmating and Starnberger See in Germany. The
Whisby-6 well was successfully drilled in 2016 and encountered a
good oil-saturated basal sandstone with initial production of 168
barrels of oil per day ("bopd") (of which Terrain receives 85%).
The operator is currently working to optimise production from this
well following a waxing issue. The company is producing from wells
at Keddington and Whisby; Brockham and Lidsey are currently shut-in
pending drilling or, in the case of Brockham, analysis of recent
drilling results. A new well at Lidsey is due to be drilled in
2017, with Keddington and Louth to follow in 2018. Terrain sold
half of its interest in the Brockham licence to Angus Energy (the
operator) in December
2016 (reducing Terrain's interest to 10%) in return for a cash
consideration and carrying Terrain's remaining interest in the
licence for the costs associated with the new side track. Angus has
the option for a similar transaction in relation to Lidsey which
would mean Terrain's costs would also be carried for this well.
From the evidence so far, the drilling at Brockham appears to
indicate a similar structure to the oil bearing Kimmeridge sections
in the nearby Horse Hill-1 well (this well produced over 1600bopd
on test). Oil and gas shows have also been found in the underlying
Corallian structure. A geothermal well at Holzkirchen, which is on
the Egmating licence, drilled in 2016 encountered overpressured gas
which had to be flared for 4 days before the well was brought back
under control. This could be a significant discovery on Terrain's
licence - interpretation of the limited data available to date
suggests the potential for as much as 75BCF of gas to be present at
approximately 4000 metres (equivalent to approximately 10 million
barrels of oil). A first well on the Larne licence targeting the
Woodburn prospect was drilled in May/June 2016, but did not
encounter any hydrocarbon accumulation. The data collected in the
well is being evaluated to decide where to focus future exploration
activity in the basin.
Weeding Technologies Limited ("Weedingtech")
Weedingtech is a cleantech company focused on replacing toxic
herbicides, particularly in the municipal market, but with
potential in the agricultural and domestic markets. Weedingtech's
technology treats weed and moss using environmentally friendly hot
foam (which keeps the heat on long enough to kill the weed or moss)
rather than herbicides such as Glyphosate.
Increasingly, governments and regulators around the world are
considering, or are already, banning the use of certain chemical
herbicides (e.g. glyphosate, as used in Roundup, which studies have
shown to be potentially carcinogenic) amid concerns about the risks
they pose to human health and the environment. Globally, the
herbicide market is estimated to grow at 6% a year to reach $31bn
by 2020 (Allied Market Research, October 2014), with glyphosate
accounting for around three quarters of the total. As such there is
huge potential for herbicide-free alternatives to increase their
share as concerns around glyphosate grow.
Funds managed by Calculus Capital Limited invested GBP3m into
Weedingtech in December 2016 of which GBP100,000 came from the
Company.
Developments since the year end
Other than disclosed, there have been no developments since the
year end.
John Glencross
Calculus Capital Limited 21 March 2017
INVESTMENT PORTFOLIO
The ten largest holdings by value are included below:
Cost Valuation Percentage
GBP'000 GBP'000 %
========================================== =============== ==========
AIM investments (quoted
equity)
=================================== ===== =============== ==========
Genedrive plc* 251 111 3.04%
=================================== ===== =============== ==========
Scancell Holdings plc 150 128 3.51%
=================================== ===== =============== ==========
Other AIM investments* 551 94 2.58%
=================================== ===== =============== ==========
Unquoted equity investments
=================================== ===== =============== ==========
Arcis Biotechnology Holdings
Limited 100 110 3.02%
=================================== ===== =============== ==========
RMS Europe Limited 100 537 14.73%
=================================== ===== =============== ==========
Solab Group Limited equity 35 46 1.26%
=================================== ===== =============== ==========
Terrain Energy Limited 414 726 19.92%
=================================== ===== =============== ==========
Other unquoted equity investments* 433 326 8.94%
=================================== ===== =============== ==========
Unquoted loan notes
=================================== ===== =============== ==========
Solab Group Limited loan
notes 215 215 5.90%
=================================== ===== =============== ==========
Other unquoted loan notes 25 25 0.69%
=================================== ===== =============== ==========
Non-qualifying equity investments* (9) (6) (0.16)%
=================================== ===== =============== ==========
Total qualifying investments 2,265 2,312 63.43%
=================================== ===== =============== ==========
Quoted funds
=================================== ===== =============== ==========
Neptune Income Fund Income
A Class 444 521 14.29%
=================================== ===== =============== ==========
Neptune Quarterly Income
Fund Income Units 431 477 13.09%
=================================== ===== =============== ==========
Goldman Sachs Liquidity
Fund 175 175 4.80%
=================================== ===== =============== ==========
Fidelity Sterling Liquidity
fund 103 103 2.83%
=================================== ===== =============== ==========
Other quoted funds 51 51 1.40%
=================================== ===== =============== ==========
Non-qualifying equity investments* 9 6 0.16%
=================================== ===== =============== ==========
Total non-qualifying investments 1,214 1,333 36.57%
=================================== ===== =============== ==========
Total investments 3,478 3,645 100.00%
=================================== ===== =============== ==========
* The valuations of certain investments include small purchases
made which are non-qualifying investments. These cost GBP9,000 and
are valued at
GBP5,750.
UNQUOTED PORTFOLIO COMPANIES
The following unquoted investments are included in the
investment portfolio at the balance sheet date. Further details of
these companies are provided below:
Arcis Biotechnology Holdings Limited Agri-sciences
Latest audited GBP'000 GBP'000 Investment information: GBP'000
results (group):
Year ended 31
July 2016 2015 Total cost 100
Income recognised
Turnover 184 281 in year -
Pre-tax loss 1,768 1,098 Equity valuation 110
0.7 per
Net Assets 1,352 498 Voting rights cent
Valuation basis:
Discounted cash
flow
Other funds managed by Calculus Capital Limited have invested in
this Company and have combined voting rights of
36.4 per cent.
RMS Europe Limited Operator of Port Facilities
Latest audited GBP'000 GBP'000 Investment information: GBP'000
results:
Period ended 31
December 2016 2015 Total cost 100
Income recognised
Turnover 27,435 29,223 in year -
Profit after tax 642 775 Equity valuation 537
Net Assets 9,081 8,880 Loan stock valuation -
Valuation basis: Voting rights 1.0 per
Expected sale cent
price
Solab Group Limited Cosmetics Manufacturing
Latest audited GBP'000 GBP'000 Investment information: GBP'000
results (group):
Period ended 31
Dec 2015 2014 Total cost 250
Income recognised
Turnover 21,912 26,021 in year 16
Profit after tax (330) 181 Equity valuation 46
Net Assets 2,474 2,691 Loan stock valuation 215
Valuation basis: Discounted Voting rights 1.2 per
cash flow and multiples cent
Other funds managed by Calculus Capital Limited have invested in
this Company and have combined voting rights of
6.3 per cent.
Terrain Energy Limited Oil and Gas Production
Latest audited GBP'000 GBP'000 Investment information: GBP'000
results:
Year ended 31
December 2015 2014 Total cost 414
Income recognised
Turnover 108 205 in year -
Pre-tax loss 595 635 Equity valuation 726
5.7 per
Net Assets 6,038 6,617 Voting rights cent
Valuation basis: Reserves
multiple & DCF
Other funds managed by Calculus Capital Limited have invested in
this company and have combined voting rights of
4.9 per cent.
STRATEGIC REPORT
This report has been prepared by the directors in accordance
with the requirements of Section 414A of the Companies Act
2006.
Activities, status and investment objective
The Company is a VCT listed on the London Stock Exchange. The
principal activity of the Company is investing in unquoted or AIM
traded companies in the UK with the objective of generating long
term capital growth and tax free dividends for investors. The
Company is managed as a VCT in order that shareholders may benefit
from the tax reliefs available.
Business model
The Board of directors is responsible for the overall
stewardship of the Company including investment, dividend,
borrowing and purchase of own shares policies, corporate strategy
and governance and risk management. All the directors, whose
details are set out on page 14 of the Report and Accounts, are
non-executive. The Board has appointed Calculus Capital Limited to
manage its qualifying portfolio and to provide certain
administrative services. Details of the management agreement are
set out under "Management" in the Directors' Report. Calculus
Capital Limited engages with companies invested in by the Company
on corporate governance matters to encourage good practice. This
includes engagement on significant social and environmental issues
where these may impact shareholder value.
Alternative Investment 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.
Investment and co-investment policies
The investment policy is to invest approximately 75 per cent of
the Company's funds in a diversified portfolio of holdings in
qualifying investments, whether unquoted or traded on AIM.
Investments are made selectively across a diverse range of sectors
in companies which have the potential to generate growth and
enhance their value. The balance of approximately 25 per cent of
the Company's funds can be invested in a combination of Neptune
Income Funds, a portfolio of income generating UK quoted shares,
and money market instruments.
The Company may co-invest with other funds managed and advised
by Calculus Capital Limited. The allocation between different funds
takes into account such factors as the funds available for
investment and the time horizon of these funds, the size of a
potential investment, and the existing sector exposure of the
various funds.
Policy on qualifying investments
The qualifying investments in a particular company may be made
in equity shares, loan stocks and/or preference shares where it is
felt this would enhance shareholder return. It is intended that no
one company shall represent more than 10 per cent of the portfolio
and no sector shall represent more than 20 per cent of the total
portfolio, in both cases at the date of investment. The Company's
policy is not to invest in start-up or seed capital situations. To
meet the requirements of a VCT qualifying investment, at least 10
per cent by value of the total investments in any one qualifying
company must be in ordinary shares which carry no preferential
rights. In addition, the companies in which qualifying investments
are made must be UK companies that have no more than GBP15 million
of gross assets at the time of investment (or GBP7 million if the
funds being invested were raised after 5 April 2006). There are
also restrictions on the age of the qualifying company and on the
total amount of funds it can raise.
VCT regulation
The Company's investment policy is designed to ensure that it
continues to meet the requirements for approved VCT status. Amongst
other conditions, the Company may not invest more than 15 per cent,
by value at the time of investment, in a single company and must
have at least 70 per cent by value of its investments throughout
the period in shares or securities in qualifying holdings, of which
30 per cent by value must be ordinary shares which carry no
preferential rights.
Long term viability of the Company
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 three years, which was selected because the
Company's strategic review covers a three-year period. The Board's
three-year strategic review considers the Company's income and
expenses, dividend policy, liquid investments and ability to make
realisations of qualifying investments. These projections are
subject to sensitivity analysis which involves flexing a number of
the main assumptions underlying the forecast both individually and
in unison. Where appropriate, this analysis is carried out to
evaluate the potential impact of the Group'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 three-year period of their assessment. The principal
assumptions used are as follows: i) Calculus Capital Limited pays
any expenses in excess of 3.5 per cent of net asset value as set
out on page 16 of the Report and 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 Neptune funds can be realised as permitted by the
Company's investment policy; iv) the illiquid nature of the
qualifying portfolio. The Company has a continuation vote in 2018
and the directors have also looked at the projections were
shareholders not to vote for the Company to continue. Based on the
results of this analysis, the directors have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due.
In making this statement the Board carried out a robust
assessment of the principal risks facing the Company including
those that might threaten its business model, future performance,
solvency or liquidity.
Borrowing powers
To give a degree of investment flexibility and to meet short
term liquidity requirements, borrowing is permitted by the
Company's Articles of a sum which does not exceed 10 per cent of
the Company's share capital and reserves. The Company has not
utilised these powers to date and does not plan to utilise this
ability at the current time.
Principal risks and uncertainties and management of risk
The Company is exposed to a variety of risks and the principal
risks identified by the Board are noted below.
- Regulatory
The Company is required at all times to observe the conditions
within the Income Tax Act 2007 for the maintenance of approved VCT
status. This involves compliance with a number of tests which, if
not met, could result in the loss of a number of tax reliefs which
are currently available to both the Company and its shareholders
under its VCT status. The tests are under continual review by
Calculus Capital Limited, the administrator and (qualifying)
investment manager of the Company. The Board keeps these matters
under continual review through the provision of monthly management
information and quarterly board meetings. The Board has also
retained the services of a VCT consultant to undertake an
independent monitoring role.
- Investment and liquidity risk
The majority of the Company's investments are in small and
medium size companies as these meet the VCT qualifying holdings
rules. These companies may not be publicly traded or freely
marketable and realisations of such investments can be difficult
and can take a considerable amount of time. They also, by their
nature, tend to carry higher risk than a larger or longer
established business. This risk is in part mitigated by
diversifying the investments and maintaining around 25 per cent of
the Company's portfolio in liquid assets to enable any short term
cash requirements to be met. Calculus Capital Limited further
mitigates this risk by considering exit strategy at the time of
making investments.
- Market price risk
In addition, the Company is subject to other price risk
constituting uncertainty about the future prices of financial
instruments held by the Company. This risk is in part mitigated by
diversifying the Company's portfolio. The Company has invested in
loan stocks and as a result is subject to credit risk. Credit risk
is also included within market risk. The Company mitigates this
risk through the regular monitoring of financial performance of
investee companies by Calculus Capital Limited.
- Other risks
The majority of the loan stocks are fixed rate so the Board does
not consider interest rate risk to be material. The Company has no
exposure to foreign currency risk, nor does it have any interest
bearing liabilities. Further comment is provided on the financial
instruments risks of the Company in note 18 to the financial
statements.
The Board regularly reviews the risks the business faces and
their potential impact on the Company. The Board monitors the
Company's performance through the use of regular financial
information and administrator and management reports.
Key performance indicators
The key performance indicators are those that communicate the
financial performance and strength of the Company as a whole; these
being principally the net asset value per Ordinary Share. Further
key performance indicators are those which show the Company's
position in relation to the VCT tests which it is required to meet
to maintain its VCT status.
The performance measures for the year are included in the
Financial Highlights on page 1 and reported on in the Chairman's
statement on page 2 of the Report and Accounts.
Key strategic issues considered during the year
The key strategic issues considered during the year were:
The performance of the Company
The value and nature of investments made and realised during the
year to ensure these were in accordance with the investment policy
and/or whether any changes should be proposed to the investment
policy.
The Investment Manager's Review (Qualifying Investments) on
pages 4 to 7 of the Report and Accounts provides commentary on the
performance of the Company during the year.
The level of dividends paid and proposed
The Board considered the level of dividends to be proposed, and
the use of proceeds arising from the sale of one of the Company's
investments.
Employees, environmental, human rights and community issues
The Company has no employees and the Board comprises entirely
non-executive directors. Day-to-day management of the Company's
business is delegated to the investment managers (details of the
management agreement is 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 relationships with
suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Gender diversity
The Board believes that diversity of experience and approach,
including gender diversity, amongst board members is of great
importance and the Board gives careful consideration to issues of
board balance and diversity when considering the composition of the
Board and making new appointments.
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.
By order of the Board
Lesley Watkins Company Secretary
21 March 2017
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Annual Financial
Report and the Company's financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have to prepare the financial statements 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 financial statements 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 financial statements, the directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements and the remuneration report comply with
the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that complies with that law and those regulations.
The directors are responsible for the integrity of the corporate
and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The financial statements are published on the
www.calculuscapital.com website, which is a website maintained by
the Company's investment manager, Calculus Capital Limited. The
maintenance and integrity of the website maintained by Calculus
Capital Limited is, so far as it relates to the Company, the
responsibility of Calculus Capital Limited. The work carried out by
the auditor does not involve consideration of the maintenance and
integrity of this website and accordingly, the auditors accept no
responsibility for any changes that have occurred to the financial
statements 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
financial statements may differ from legislation in their own
jurisdiction.
We confirm that, to the best of our knowledge: (a) the financial
statements, prepared in accordance with applicable accounting
standards, give a true and fair view of the assets, liabilities,
financial position and deficit of the Company; and
(b) 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
Philip Stephens Chairman
21 March 2017
INCOME STATEMENT
For the year ended 31 December 2016
Year ended Year ended
31 December 2016 31 December
2015
================================================================= =========== =========================
Revenue Capital Total Revenue Capital Total
=============== ==== ============= ============= ============ =========== ============= ==========
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=============== ==== ============= ============= ============ =========== ============= ==========
(Losses)/gains
on investments
at fair value 9 - (325) (325) - (389) (389)
=============== ==== ============= ============= ============ =========== =============
Investment
income 3 77 - 77 114 - 114
=============== ==== ============= ============= ============ =========== ============= ==========
Investment
management
fee 4 - - - (4) (11) (15)
=============== ==== ============= ============= ============ =========== =============
Other expenses 5 (127) - (127) (141) - (141)
=============== ==== ============= ============= ============ =========== =============
Deficit before
taxation (50) (325) (375) (31) (400) (431)
=============== ==== ============= ============= ============ =========== =============
Taxation 6 - - - - - -
=============== ==== ============= ============= ============ =========== ============= ==========
Deficit
attributable
to Ordinary
shareholders (50) (325) (375) (31) (400) (431)
=============== ==== ============= ============= ============ =========== =============
Deficit per
Ordinary
Share 8 (0.45 )p (2.89 )p (3.34 )p (0.27 )p (3.54 )p (3.81 )p
=============== ==== ============= ============= ============ =========== ============= ==========
The total column is the profit and loss account of the Company.
The revenue and capital columns are provided as supplementary
information in accordance with the AIC SORP.
All items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the
year.
There is no other comprehensive income as there were no other
gains and losses.
The notes to the financial statements on pages 35 to 48 of the
financial statements form an integral part of this statement.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016
Capital
Share Special redemption Capital Revenue
capital reserve reserve reserves reserve Total
======================= ==== =========== ============ ================ ============= ============ ============
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ==== =========== ============ ================ ============= ============ ============
For the year ended
31 December 2016
1 January 2016 1,131 7,395 510 (4,505) (85) 4,446
======================= ==== =========== ============ ================ ============= ============ ============
Net deficit after
taxation for the
year (325) (50) (375)
======================= ==== =========== ============ ================ ============= ============ ============
Shares bought
back for cancellation 13 (10) (40) 10 (40)
======================= ==== =========== ============ ================ ============= ============ ============
Dividends paid 7 (392) (392)
======================= ==== =========== ============ ================ ============= ============ ============
31 December 2016 1,121 6,963 520 (4,830) (135) (3,639)
======================= ==== =========== ============ ================ ============= ============ ============
For the year ended
31 December 2015
1 January 2015 1,131 8,356 510 (4,105) (54) 5,838
======================= ==== =========== ============ ================ ============= ============ ============
Net deficit after
taxation for the
year - - - (400) (31) (431)
======================= ==== =========== ============ ================ ============= ============ ============
Dividends paid 7 - (961) - - - (961)
======================= ==== =========== ============ ================ ============= ============ ============
31 December 2015 1,131 7,395 510 (4,505) (85) 4,446
======================= ==== =========== ============ ================ ============= ============ ============
The notes to the financial statements on pages 35 to 48 of the
financial statements form an integral part of this statement.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2016
Year ended Year
31 December ended
2016 31
December
2015
========================== ==== ================== =========
Note GBP'000 GBP'000
========================== ==== ================== =========
Fixed Assets
========================== ==== ================== =========
Investments at fair value
through profit or loss 9 3,645 4,085
========================== ==== ================== =========
Current Assets
Debtors 11 25 34
========================== ==== ================== =========
Cash at bank 37 392
========================== ==== ================== =========
62 426
========================== ==== ================== =========
Creditors: Amounts falling due within one year
Creditors 12 (68) (65)
========================== ==== ================== =========
Net Current Assets (6) 361
========================== ==== ================== =========
Net Assets 3,639 4,446
========================== ==== ================== =========
Represented by:
CALLED UP SHARE CAPITAL AND RESERVES
Share capital 13 1,121 1,131
============================= ============ ===============
Special reserve 14 6,963 7,395
============================= ============ ===============
Capital redemption reserve 14 520 510
============================= ============ ===============
Capital reserve 14 (4,830) (4,505)
============================= ============ ===============
Revenue reserve 14 (135) (85)
============================= ============ ===============
Total Ordinary shareholders'
funds 3,639 4,446
============================= ============ ===============
Net asset value per Ordinary
Share 15 32.46p 39.31p
============================= ============ ===============
The notes to the financial statements on pages 35 to 48 of the
financial statements form an integral part of this statement.
The financial statements on pages 31 to 48 were approved by the
Board of directors on and were signed on its behalf by: Philip
Stephens
Director
21 March 2017
STATEMENT OF CASH FLOWS
For the year ended 31 December 2016
Year ended Year ended
31 December 31 December
2016 2015
===================================================== ========================
Note GBP'000 GBP'000
====================================== ==== ======= ========================
Cash flows from operating activities
Investment income received 82 108
====================================== ==== ======= ========================
Investment management fees
refunded/(paid) 7 (67)
====================================== ==== ======= ========================
Administration fees paid (12) (26)
====================================== ==== ======= ========================
Other cash payments (115) (116)
====================================== ==== ======= ========================
Net cash used in operating
activities 16 (38) (101)
====================================== ==== ======= ========================
Cash flows from investing activities
Purchase of investments (651) (975)
====================================== ==== ======= ========================
Sale of investments 766 450
====================================== ==== ======= ========================
Net cash inflow/(outflow) from
investing activities 115 (525)
====================================== ==== ======= ========================
Cash flows from financing activities
Equity dividends paid 7 (392) (961)
====================================== ==== ======= ========================
Purchase of own shares (40) -
====================================== ==== ======= ========================
Net cash used in financing
activities (432) (961)
====================================== ==== ======= ========================
Decrease in cash and cash equivalents (355) (1,587)
====================================== ==== ======= ========================
Cash and cash equivalents at
the beginning of the year 392 1,979
====================================== ==== ======= ========================
Cash and cash equivalents at
the end of the year 37 392
The notes to the financial statements on pages 35 to 48 of the
financial statements form an integral part of this statement.
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 05300876. The registered office of the Company is
104 Park Street London W1K 6NF.
2 Basis of preparation
Basis of accounting
The financial statements have been prepared on a basis compliant
with applicable United Kingdom accounting standards, including
Financial Reporting Standard 102 - The Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland ('FRS102')
and with the Act. The directors have prepared the financial
statements on a basis compliant with the recommendations of the
Statement of Recommended Practice November 2014 ("the SORP")
updated in January 2017 for Investment Trust Companies and Venture
Capital Trusts produced by the Association of Investment Companies
("AIC").
The financial statements are presented in Sterling (GBP).
Going concern
After reviewing the Company's forecasts and projections, the
directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least 12 months from the date of signing this report. The Company
therefore continues to prepare its financial statements on the
going concern basis and on the basis that its VCT status will
continue to be met.
Significant judgements and estimates
Preparations of the financial statements requires management to
make significant judgements and estimates. The items in the
financial statements where these judgements and estimates have been
made are in the valuation of unquoted investments. The valuation
methodologies used when valuing unquoted investments provide a
range of possible values. Judgements are used to estimate where in
the range the fair value lies. The sensitivity analysis in note 18
demonstrates the impact on the portfolio of applying alternative
values in the upside and downside.
As at 31 December 2016 the value of unquoted investments
included within the Company's investment portfolio was
GBP1,984,720 (2015: GBP2,193,518). These investments are valued
in accordance with the accounting policy disclosed under note 9
investments.
Principal accounting policies
Investments
The Company has adopted FRS 102 sections 11 and 12 for the
recognition of financial instruments. The Company's business is
investing in financial assets with a view to profiting from their
total return in the form of increases in fair value. Fair value is
the amount for which an asset can be exchanged between
knowledgeable, willing parties in an arm's length transaction. The
Company manages and evaluates the performance of these investments
on a fair value basis in accordance with its investment strategy,
and information about the investments is provided on this basis to
the Board of directors.
Investments held at fair value through profit or loss are
initially recognised at fair value, being the consideration given
and excluding transaction or other dealing costs associated with
the investment, which are expensed and included in the capital
column of the Income Statement.
After initial recognition, investments, which are classified as
at fair value through profit or loss, are measured at fair value.
Gains or losses on investments classified as at fair value through
profit or loss are recognised in the capital column of the Income
Statement, and allocated to the capital reserve - other, and
capital reserve - investment holding loss as appropriate.
Aggregate transaction and dealing costs included in disposals
and additions are disclosed in note 9 to the financial statements.
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 International Private Equity and Venture
Capital ("IPEVC") guidelines. Primary indicators of fair value are
derived from earnings or sales multiples, using discounted cash
flows, recent arm's length market transactions by independent third
parties, from net assets, or where appropriate, at price of recent
investments.
Premiums on loan stock investments and preference shares are
accrued at fair value when the Company has the right to receive the
premium and expects to do so. Redemption premiums are allocated to
the revenue column of the Income Statement.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents does not include liquidity fund investments as the
Company does not consider the risk associated with changes in value
to be insignificant.
Debtors Short term debtors are measured at transaction price,
less any impairment.
Creditors Short term trade creditors are measured at the
transaction price.
Income
Dividends receivable on equity shares and on unquoted funds are
recognised as income on the date on which the shares or units are
marked as ex-dividend. Where no ex-dividend date is available, the
income is recognised when the Company's right to receive it has
been established.
Interest income on loan stock and dividends on preference shares
are accrued on a daily basis. Provision is made against this income
where recovery is doubtful.
Interest receivable from fixed income securities is recognised
using the effective interest rate method. 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 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.
Reserves Special reserve
The special reserve was created by a reduction in the share
premium account by order of the High Court. It can be used for the
repurchase of the Company's ordinary shares and for the payment of
dividends.
In accordance with the AIC SORP, the consideration paid for
shares bought for cancellation is shown as a reduction of the
special reserve.
Capital redemption reserve
The capital redemption reserve accounts for amounts by which the
issued capital is diminished through the repurchase of the
Company's own shares.
Capital reserve - other
The following are accounted for in this reserve:
- gains and losses on disposal of investments;
- transaction costs which are incidental to the acquisition of investments;
- 75% of investment management fee expenses, together with any
related tax effect, is charged to the capital column of the Income
Statement in accordance with the above policies; and
- 100% of performance incentive fees. Capital reserve - investment holding loss
The following are accounted for in this reserve:
- movements in the fair value of investments held at the year end. Revenue reserve
The revenue reserve represents the balance of revenue retained
within the Company after the payment of any dividends.
Taxation
Under FRS 102, deferred tax must be recognised in respect of all
timing differences that have originated but not reversed at the
reporting date where transactions or events that result in an
obligation to pay more tax in the future have occurred at the
reporting date. This is subject to deferred tax assets only being
recognised if it is considered more likely than not that there will
be suitable profits from which the future reversals of the
underlying timing differences can be deducted. Timing differences
are differences between the Company's taxable profits and its
results as stated in the financial statements.
Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which the timing differences
are expected to reverse, based on tax rates and laws that have been
enacted or substantially 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 - other and a
corresponding amount is charged against revenue. The relief is the
amount by which corporation tax payable is reduced as a result of
capital expenses.
Dividends
Dividends to shareholders are accounted for in the year in which
they are paid or approved in general meetings. Dividends payable to
equity shareholders are recognised in the Statement of Changes in
Equity when they are paid, or have been approved by shareholders in
the case of a final dividend and become a liability of the
Company.
Share buybacks
Where shares are purchased for cancellation, the consideration
paid, including any directly attributable incremental costs, is
deducted from distributable reserves. As required by the Companies
Act 2006, the equivalent of the nominal value of shares cancelled
is transferred to capital redemption reserve.
3 Income
Year ended 31 Year ended
December 2016 31 December
2015
============================ ====================================== ===========================
GBP'000 GBP'000
============================ ====================================== ===========================
Income from quoted investments
UK dividend income 31 52
============================ ====================================== ===========================
Unfranked investment income - -
============================ ====================================== ===========================
31 52
============================ ====================================== ===========================
Income from unquoted investments
Unfranked investment income 46 62
============================ ====================================== ===========================
46 62
============================ ====================================== ===========================
Total income 77 114
============================ ====================================== ===========================
Total income comprises
============================ ====================================== ===========================
Dividends 31 52
============================ ====================================== ===========================
Interest 46 62
============================ ====================================== ===========================
Total income 77 114
============================ ====================================== ===========================
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 31 Year ended
December 2016 31 December
2015
Revenue Capital Total Revenue Capital Total
============================================== ====================== ============================ ======= ============ ============
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ====================== ====================== ============================ ======= ============ ============
Investment management
fee 15 47 62 21 62 83
====================== ====================== ====================== ============================ ======= ============ ============
Claw back of excess
expenses (15) (47) (62) (17) (51) (68)
====================== ====================== ====================== ============================ ======= ============ ============
- - - 4 11 15
====================== ====================== ====================== ============================ ======= ============ ============
Administration fee 12 - 12 17 - 17
====================== ====================== ====================== ============================ ======= ============ ============
Claw back of excess
expenses (12) - (12) - - -
====================== ====================== ====================== ============================ ======= ============ ============
- - - 17 - 17
====================== ====================== ====================== ============================ ======= ============ ============
Expense contribution
from the manager (6) - (6) - - -
====================== ====================== ====================== ============================ ======= ============ ============
Total (due from)/due
to the Manager (6) - (6) 21 11 32
====================== ====================== ====================== ============================ ======= ============ ============
For the year ended 31 December 2016, Calculus Capital Limited
waived GBP61,828 (2015: GBP68,455) of its fees relating to
investment management, and GBP12,366 (2015: nil) of its fees
relating to administration. A further expense contribution of
GBP6,144 (2015: nil) was made by Calculus Capital Limited to the
Company. At 31 December 2016, there was GBP6,144 due to the Company
from Calculus Capital Limited (31 December 2015: due to Calculus
Capital Limited GBP5,259). Details of the terms and conditions of
the investment management agreement are set out under "Management"
in the Directors' Report.
5 Deficit before taxation
Year ended Year ended
The deficit before taxation 31 December 31 December
is stated after: 2016 2015
=================================== ============================= ===========================
GBP'000 GBP'000
=================================== ============================= ===========================
Fees payable to the Company's
auditor for the audit of
the Company's individual
accounts 23 22
=================================== ============================= ===========================
Fees payable to the Company's auditor for other
services:
Tax compliance services - 7
=================================== ============================= ===========================
Directors' remuneration
and social security contributions 29 26
=================================== ============================= ===========================
Expenses contribution from
the manager (6) -
=================================== ============================= ===========================
Other expenses 81 86
=================================== ============================= ===========================
127 141
=================================== ============================= ===========================
Further details of directors' remuneration can be found in the
Directors' Remuneration Report.
6 Taxation
Year ended 31 Year ended
December 2016 31 December
2015
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ===================== ===================== ========================== ============= ================ =========
UK Corporation - - - - - -
Tax
====================== ===================== ===================== ========================== ============= ================ =========
The tax assessed for the year is lower than the
standard rate of corporation tax In the United
Kingdom at 20% (2015: 20.25%) The differences
are explained as follows
============================================================================================================================================
Deficit before
taxation: (50) (325) (375) (31) (400) (431)
====================== ===================== ===================== ========================== ============= ================ =========
Deficit multiplied
by Corporation
Tax at 20% (2015:
20.25%) (10) (65) (75) (6) (81) (87)
====================== ===================== ===================== ========================== ============= ================ =========
Effect of:
UK dividends not
chargeable to tax (6) - (6) (11) - (11)
====================== ===================== ===================== ========================== ============= ================ =========
Non-taxable losses 65 65 - 79 79
====================== ===================== ===================== ========================== ============= ================ =========
Excess expenses
for the year 16 - 16 17 2 19
====================== ===================== ===================== ========================== ============= ================ =========
Total tax charge - - - - - -
====================== ===================== ===================== ========================== ============= ================ =========
The corporation tax rate remained at 20% throughout 2016.
At 31 December 2016, the Company had GBP1,516,639 (31 December
2015: GBP1,437,541) of excess management expenses to carry forward
against future taxable profits. The deferred tax asset of
GBP257,829 (31 December 2015: GBP259,974) has not been recognised
due to the fact that it is unlikely the excess management fees will
be set off in the foreseeable future.
7 Dividends
Year ended Year ended
31 December 31 December
2016 2015
============================================================================================================= ===========================
GBP'000 GBP'000
============================================================================ =============================== ===========================
Paid during the year:
2015 Special dividend: nil (2014:
5.0p) per Ordinary Share - 565
============================================================================ =============================== ===========================
2015 Final dividend: 2.0p (2014:
2.0p) per Ordinary Share 224 226
============================================================================ =============================== ===========================
2016 Interim dividend: 1.5p
(2015: 1.5p) per Ordinary Share 168 170
============================================================================ =============================== ===========================
392 961
============================================================================ =============================== ===========================
Declared post year end:
2016 Final dividend: 2.0p (2015:
2.0p) per Ordinary Share 224 226
============================================================================ =============================== ===========================
The Company paid a final dividend in June 2016 of 2.0p per
Ordinary Share (2015: 2.0p) and an interim dividend in October 2016
of 1.5p per Ordinary Share (2015:1.5p). The directors are proposing
a final dividend of 2.0p per Ordinary Share in respect of the year
ended 31 December 2016 (2015: 2.0p). Subject to shareholder
approval, this dividend will be paid on 30 June 2017 to
shareholders on the register on 31 May 2017.
8 Basic and diluted earnings per share
Year ended 31 Year ended
December 2016 31 December
2015
============================================================================================ ========== ================================
Revenue Capital Total Revenue Capital Total
==================== =================== =================== ============================ ========== ============= =================
pence pence pence pence pence pence
==================== =================== =================== ============================ ========== ============= =================
Ordinary Share (0.45 (2.89)p (3.34)p (0.27)p (3.54)p (3.81 )p
==================== =================== =================== ============================ ========== ============= =================
Basic and diluted earnings per Ordinary Share is based on the
net revenue deficit attributable to the Ordinary Shares of
GBP50,442 (2015: deficit of GBP29,939) and on 11,232,367 (31
December 2015: 11,311,329) Ordinary Shares, being the weighted
average number of Ordinary Shares in issue during the year.
Basic and diluted capital deficit per Ordinary Share is based on
the net capital deficit for the year of GBP325,015 (2015: return of
GBP400,614) and on 11,232,367 (31 December 2015: 11,311,329)
Ordinary Shares, being the weighted average number of Ordinary
Shares in issue during the year.
Basic and diluted total deficit per Ordinary Share is based on
the total deficit attributable to the Ordinary Shares of
GBP375,457 (2015: return of GBP430,553) and on 11,232,367 (31
December 2015: 11,311,329) Ordinary Shares, being the weighted
average number of Ordinary Shares in issue during the year.
As the Company has not issued any convertible securities or
share options, there is no dilutive effect on return per share.
9 Investments at fair value through profit or loss
Year Ended 31 Year Ended
December 2016 31 December
2015
GBP'000 GBP'000
================================== ================================== ==========================
AIM investments 333 236
================================== ================================== ==========================
Quoted Neptune income funds 998 978
================================== ================================== ==========================
Unquoted investments 1,985 2,193
================================== ================================== ==========================
Money market instruments 329 678
================================== ================================== ==========================
3,645 4,085
================================== ================================== ==========================
GBP'000 GBP'000
================================== ================================== ==========================
Opening book cost 5,422 5,414
================================== ================================== ==========================
Opening investment holding
losses (1,337) (1,465)
================================== ================================== ==========================
Opening valuation 4,085 3,949
================================== ================================== ==========================
Movements in the year:
================================== ================================== ==========================
Purchases at cost 651 975
================================== ================================== ==========================
Sales - proceeds (766) (450)
================================== ================================== ==========================
- realised losses on sales (1,828) (517)
================================== ================================== ==========================
Movement in investment
holding losses 1,503 128
================================== ================================== ==========================
Closing valuation 3,645 4,085
================================== ================================== ==========================
Closing book cost 3,479 5,422
================================== ================================== ==========================
Closing unrealised gains/(losses) 166 (1,337)
================================== ================================== ==========================
Closing valuation 3,645 4,085
================================== ================================== ==========================
GBP'000 GBP'000
================================== ================================== ==========================
Loss on disposal of investments (1,828) (517)
================================== ================================== ==========================
Movement in investment
holding gains 1,503 128
================================== ================================== ==========================
Total losses on investments (325) (389)
================================== ================================== ==========================
In the year to 31 December 2016, Dryden Human Capital Group
Limited was written down by GBP50,000 as it was sold for no return
to equity shareholders in January 2017. Terrain Energy Limited and
RMS Europe Limited were written down by
GBP49,521 and GBP62,171 respectively due to adverse trading
conditions. The holding in Human Race Group Limited which cost
GBP400,000 was sold for GBP429,744.
There have not been any transaction costs in the year to 31
December 2016, nor in the year to 31 December 2015. Note 18 to the
financial statements provides a detailed analysis of investments
held at fair value through profit or loss.
10 Significant interests
The Company had the following interests of 3 per cent or more in
the share capital of its portfolio companies:
Class of shares Number Proportion
held of class held
=================== ================ ======= ==============
Terrain Energy
Limited Ordinary GBP1 412,677 5.7%
=================== ================ ======= ==============
RMS Europe Limited Ordinary GBP1 85,166 4.5%
=================== ================ ======= ==============
11 Debtors
Year Ended Year Ended
31 December 2016 31 December
2015
============================== ============================ ================
GBP'000 GBP'000
============================== ============================ ================
Accrued income 15 10
============================== ============================ ================
Other debtors and prepayments 10 24
============================== ============================ ================
25 34
============================== ============================ ================
12 Creditors - amounts falling due within one year
Year Ended Year Ended
31 December 2016 31 December
2015
============================= =============================== ================
GBP'000 GBP'000
============================= =============================== ================
Accruals and other creditors 68 65
============================= =============================== ================
13 Called up share capital Ordinary Shares
Year Ended Year Ended
Issued and fully 31 December 2016 31 December
paid: 2015
=================== ======================================== ============================
Ordinary Shares Number GBP'000 Number GBP'000
of 10p each
=================== ============================= ========= ================ ==========
As at 1 January 11,311,329 1,131 11,311,329 1,131
=================== ============================= ========= ================ ==========
Buy back of shares
for cancellation (100,000) (10) - -
=================== ============================= ========= ================ ==========
As at 31 December 11,211,329 1,121 11,311,329 1,131
=================== ============================= ========= ================ ==========
During the year the Company purchased for cancellation 100,000
Ordinary Shares of 10p (2015:nil) at a price of 39 pence per share.
The consideration was GBP39,000 (2015:nil) including stamp
duty.
14 Reserves
Capital
reserve
Capital Capital - investment
Special redemption reserve holding Revenue
reserve reserve - other loss reserve
======================= ============= =================== ============== ========================= =============
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ============= =================== ============== ========================= =============
At 1 January 2016 7,395 510 (3,168) (1,337) (85)
======================= ============= =================== ============== ========================= =============
Loss on sales - - (1,828) - -
======================= ============= =================== ============== ========================= =============
Movement in investment
holding losses - - - 1,503 -
======================= ============= =================== ============== ========================= =============
Investment management
fee charged to - - - - -
capital
======================= ============= =================== ============== ========================= =============
Shares bought back
for cancellation (40) 10 - - -
======================= ============= =================== ============== ========================= =============
Dividends paid (392) - - - -
======================= ============= =================== ============== ========================= =============
Retained net loss
for the year - - - - (50)
======================= ============= =================== ============== ========================= =============
At 31 December
2016 6,963 520 (4,996) 166 (135)
======================= ============= =================== ============== ========================= =============
The Special reserve was created to (i) create a distributable
reserve which can be used by the Company to fund purchases of its
own shares; (ii) to enable the Company to offset the effects of any
future unrealised losses on future dividends payable in respect of
shares; and (iii) since the Company revoked its status as an
investment company, for any other purpose. The Company is therefore
able to make distributions out of the aggregate of its Revenue
reserve, Special reserve and Capital reserves, excluding any gains
arising on the valuation of unquoted investments.
15 Net asset value per share
Year Ended Year Ended
31 December 2016 31 December
2015
======================= ================================ ================
pence pence
======================= ================================ ================
Ordinary Shares of 10p
each 32.46 39.31
======================= ================================ ================
The basic and diluted net asset value per Ordinary Share is
based on net assets (including current year revenue) of
GBP3,639,000 (31 December 2015: GBP4,446,002) and on 11,211,329
(31 December 2015: 11,311,329) Ordinary Shares, being the number of
Ordinary Shares in issue at the end of the year.
16 Reconciliation of net (deficit)/return before finance charges
and taxation to net cash outflow
from operating activities
Year ended Year ended
31 December 31 December
2016 2015
================================== ============= ===============
GBP'000 GBP'000
================================== ============= ===============
Net deficit before finance
charges and taxation (375) (431)
================================== ============= ===============
Net capital deficit/(return) 325 400
================================== ============= ===============
(Increase)/decrease in debtors 9 (13)
================================== ============= ===============
(Decrease)/ increase in creditors 3 (46)
================================== ============= ===============
Investment management fee
charged to capital - (11)
================================== ============= ===============
Net cash outflow from operating
activities (38) (101)
================================== ============= ===============
17 Financial commitments
At 31 December 2016 and 2015 the Company did not have any
financial commitments which had not been accrued.
18 Financial Risk Management
The objective of the Company is to generate long term capital
growth and tax free dividends for investors. The investment policy
is to invest approximately 75 per cent of the Company's funds in a
diversified portfolio of holdings in qualifying investments,
whether unquoted or traded on AIM. Investments are made selectively
across a diverse range of sectors in companies which have the
potential to generate growth and enhance their value. The
investments in a particular company may be made in loan stocks or
preference shares as well as equity shares where it is felt this
would enhance shareholder return. In accordance with the Company's
risk averse approach, the investment manager will only invest when
it believes it has identified the right investment opportunity. The
balance of approximately 25 per cent of the Company's funds can be
invested in a combination of Neptune income funds, a portfolio of
similar income generating UK listed shares and money market
instruments.
The ten largest holdings by value and the amounts invested in
quoted equity, unquoted equity, unquoted bonds, unquoted preference
shares, quoted funds and unquoted funds are set out in the
Investment Portfolio, on page 8 of the Report and Accounts.
The Company's financial instruments comprise securities, cash
balances and debtors and creditors that arise from its
operations.
The Company has no direct exposure to foreign currency risk.
The principal risks the Company faces in its portfolio
management activities are:
- Market price risk
- Interest rate risk
- Liquidity risk
The investment manager's policies for managing these risks are
summarised below and have been applied throughout the year. The
Board keeps the risks under continual review through the provision
of monthly management information and quarterly board meetings.
(i) Market price risk
Market price risk arises from uncertainty about the future
prices of financial instruments held in accordance with the
Company's investment objectives. It represents the potential loss
that the Company might suffer through holding market positions in
the face of market movements. This risk is monitored by the
investment manager on a regular basis and by the Board at meetings
with the investment manager.
The Board reviews each investment purchase in the qualifying
portfolio to ensure that any acquisition allows the Company to
maintain an appropriate spread of other price risk and that it
falls within the VCT qualifying criteria at the time of purchase.
It considers the associated business risks of each investment.
These include, but are not restricted to, the industry sector,
management expertise and financial stability of each company.
The Company does not use derivative instruments to hedge against
market price risk. The maximum potential exposure to market price
risk is the value of the investment portfolio as at 31 December
2016 of GBP3,645,000 (31 December 2015:
GBP4,085,000).
The Board believes that the Company's assets are mainly exposed
to market price risk, as the Company holds most of its assets in
the form of investments in VCT qualifying small UK companies whose
equity shares are either quoted or valued by reference to the share
prices of quoted comparable companies and are thus subject to
market movements. The Board considers that investments in loan
stock and/or preference shares may also be sensitive to changes in
quoted share prices as the value of these financial instruments can
be determined with reference to the enterprise value of the
investee company which may be based on the value of quoted
comparable companies.
The table below shows the impact upon return and net asset value
per share if there were to be a 10 per cent (31 December 2015: 10
per cent) movement in overall share prices, and assumes:
- that each of the shares and the Neptune funds held by the
Company produces an overall movement of 10 per cent, and
- the values of the loan stocks and liquidity funds are not
affected by a market movement of this size, and
- that the actual portfolio of investments held by the Company
is perfectly correlated to this overall movement in share prices.
Shareholders should however note that this level of correlation is
highly unlikely in reality.
If overall share prices fell/rose by 10 per cent (2015: 10 per
cent), with all other variables other than investment management
fees held constant:
Year Ended 31 December 2016
Return and net assets
Year Ended 31 December 2015
Return and net assets
GBP'000 GBP'000
(Decrease)/increase in return (297)/297 (271) /271
(Decrease)/increase in net asset value per Ordinary Share
(2.74)p/2.74p (2.40) p/2.40p
A decrease of GBP296,821 (31 December 2015: GBP271,354) in the
net assets of the Company would have increased the manager's
contribution to expenses by GBP10,766 (31 December 2015: GBP9,497).
An increase of GBP296,821 (31 December 2015: GBP271,354) would have
increased the investment management and admin fees payable by
GBP4,622 (31 December 2015: GBP9,497) and reduced the expenses
contribution to nil (31 December 2015:nil).
The impact of a change of 10 per cent has been selected, as in
current market conditions, an increase/(decrease) in the aggregate
values of investments in shares and Neptune funds by 10 per cent is
reasonably possible based on historical changes that have been
observed.
The Board considers credit risk to be part of market risk. The
failure of a counterparty to a transaction to discharge its
obligations under that transaction could result in the Company
suffering a loss. The Company manages this risk by ensuring that
where an investment is made in an unquoted loan, it is made as part
of the overall equity and debt package. The recoverability of the
debt is assessed as part of the overall investment process and is
then monitored on an ongoing basis by the investment manager who
reports to the Board on any recoverability issues. It also ensures
that cash at bank is held only with reputable banks with high
quality external credit ratings. None of the Company's financial
assets are secured by collateral or other credit enhancements. The
maximum exposure to credit risk as at 31 December 2016 was
GBP3,707,000 (31 December 2015: GBP4,511,000).
All quoted shares of the Company which are traded on a
recognised exchange are held by Reyker Securities plc, the
Company's custodian. The Board regularly monitors the Company's
risk by reviewing assessments of the custodian submitted by the
investment manager.
(ii) Interest rate risk
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 rate risk
arising on loan stock instruments is not considered significant, as
the main risks on these investments are credit risk and market
price risk. The interest rate earned on the loan stock instruments
has been disclosed below:
Effective Interest rate
on 31 December 2016
%
Solab Group Limited 12.0
=================================== ====
Dryden Human Capital Group Limited 15.0
=================================== ====
On 31 December 2016, there was GBP8,507 (2015:GBP4,747) in loan
stock interest overdue from Dryden Human Capital Group Limited.
The Company does not have any interest bearing liabilities.
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 and
preference shares, loan stock, cash and debtors. The interest rate
profile of the Company's financial assets is given in the table
below:
Year Ended Year Ended
31 December 2016 31 December 2015
======================================================================== =========================================
Fair value Cash flow Fair value Cash flow
interest interest interest interest
rate rate rate rate
risk risk risk risk
=================== ========================= ======================== ========================= ==============
GBP'000 GBP'000 GBP'000 GBP'000
=================== ========================= ======================== ========================= ==============
Loan stock 240 - 599 -
=================== ========================= ======================== ========================= ==============
Money market funds - 329 - 678
=================== ========================= ======================== ========================= ==============
Cash - 37 - 392
=================== ========================= ======================== ========================= ==============
240 366 599 1,070
=================== ========================= ======================== ========================= ==============
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 0.25 per cent as at 31 December 2016 (31 December 2015:
0.5 per cent).
(iii) Liquidity risk
The investments the Company holds include AIM quoted securities
where the liquidity is generally below that of securities
listed/quoted on the main market and it also holds unquoted
investments where there is no ready market for the securities. The
ability of the Company to realise positions may therefore be
restricted when there are no willing purchasers.
The Board, which monitors the Company's overall liquidity risk,
seeks to ensure that an appropriate proportion of the Company's
investment portfolio is invested in cash and readily realisable
securities, which are sufficient to meet any funding commitments
that may arise.
At 31 December 2016, the Company held GBP1,364,000 (31 December
2015: GBP2,048,000) in cash and readily realisable securities
(including the investments in the Neptune Income Fund and Neptune
Quarterly Income Fund) to pay accounts payable and accrued
expenses.
Fair value hierarchy Investments held at fair value through
profit and loss are valued in accordance with IPEVC guidelines as
follows:
Year ended Year ended
Valuation Methodology 31 December 2016 31 December
2015
======================== ========================================= ================
GBP'000 GBP'000
======================== ========================================= ================
Quoted market bid
price 1,660 1,892
======================== ========================================= ================
Expected recoverable
amount 240 59
======================== ========================================= ================
Discounted cash flow 719 27
======================== ========================================= ================
Earnings multiple - 599
======================== ========================================= ================
Recent investment
price 300 -
======================== ========================================= ================
Sales multiple - 475
======================== ========================================= ================
Precedent transaction
multiple - 257
======================== ========================================= ================
Reserves multiple 726 776
======================== ========================================= ================
3,645 4,085
======================== ========================================= ================
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 IPEVCA guidelines.
In order to provide further information on the valuation
techniques used to measure assets carried at fair value, the
measurement bases are categorised into a "fair value hierarchy" as
follows:
- Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices for identical
asset in an active market. 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, money market funds and the quoted Neptune funds are
classified within this category.
- Valued using models with significant observable market inputs - "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. The Company has no investments
classified within this category.
- Valued using models with significant unobservable market inputs - "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, preference shares and loan stock are
classified within this category. As explained in note 1, unquoted
investments are valued in accordance with the IPEVCA
guidelines.
Financial assets at fair
value through
profit or loss for year ended
31 December
2016
Level 1 Level Level Total
2 3
================================================== =============== =============== =============== ===============
GBP'000 GBP'000 GBP'000 GBP'000
================================================== =============== =============== =============== ===============
Equity investments 333 - 1,745 2,078
================================================== =============== =============== =============== ===============
Fixed interest investments - - 240 240
================================================== =============== =============== =============== ===============
Preference share investments - - - -
================================================== =============== =============== =============== ===============
Money market funds 329 - - 329
================================================== =============== =============== =============== ===============
Quoted Neptune income
funds 998 - - 998
================================================== =============== =============== =============== ===============
1,660 - 1,985 3,645
================================================== =============== =============== =============== ===============
Financial assets at
fair value through
profit
or loss for year
ended 31 December
2015
Level 1 Level Level Total
2 3
================================================== =============== =============== =============== ===============
GBP'000 GBP'000 GBP'000 GBP'000
================================================== =============== =============== =============== ===============
Equity investments 236 - 1,595 1,831
================================================== =============== =============== =============== ===============
Fixed interest investments - - 598 598
================================================== =============== =============== =============== ===============
Preference share investments - - - -
================================================== =============== =============== =============== ===============
Money market funds 678 - - 678
================================================== =============== =============== =============== ===============
Quoted Neptune income
funds 978 - - 978
================================================== =============== =============== =============== ===============
1,892 - 2,193 4,085
================================================== =============== =============== =============== ===============
In order to maintain disclosures in line with prior year, the
Company has early adopted the changes to FRS 102 published by the
FRC in March 2016.
In valuing the unquoted portfolio, the inputs include the
discount rate used when performing the discounted cash flow
analysis and the multiple applied in universal transaction and
comparable company analysis. The portfolio has been reviewed and
both downside and upside reasonable possible alternative
assumptions have been identified and applied to the valuation of
each of the unquoted investments. Applying the downside
alternatives the value of the unquoted investment portfolio would
be GBP86,293 (31 December 2015: GBP565,003) or 7.9 per cent (31
December 2015: 25.8 per cent) lower. Using the upside alternatives
the value of the unquoted investment portfolio would be increased
by GBP96,225 (31 December 2015: GBP715,134) or 8.9 per cent (31
December 2015: 32.6 per cent) higher.
Financial liabilities
The Company finances its operations through its issued share
capital and existing reserves. The only financial liabilities of
the Company are creditors all of which are sterling denominated and
are due within one year. The creditors are disclosed in note 12. No
interest is paid on these liabilities.
Capital management policies and procedures
The Company's capital management objectives are to ensure that
it will be able to continue as a going concern and to maximise the
income and capital return to its Ordinary shareholders.
The Board, with the assistance of the investment manager
monitors and reviews the broad structure of the Company's capital
on an ongoing basis. This review includes the planned level of
gearing, which takes account of the Manager's views on the market;
the need for new issues of equity shares; and the extent to which
revenue in excess of that which is required to be distributed
should be retained. The capital of the Company is made up of called
up share capital and reserves as detailed on the statement of
financial position on page 33 of the Report and Accounts.
19 Related Party Transactions
Calculus Capital Limited receives an investment manager's fee
from the Company. As disclosed in Note 4, for the year ended 31
December 2016, Calculus Capital Limited waived GBP61,826 (2015:
GBP68,455) of its fees, and contributed a further GBP6,144 (2015:
nil) towards the expenses of the Company. At 31 December 2016,
there was GBP6,144 due back from Calculus Capital Limited (31
December 2015: due to Calculus Capital Limited GBP5,259).
20 Other Transactions with the Investment Manager
The Company's qualifying investments are managed by Calculus
Capital Limited. John Glencross, a director of the Company, has an
interest in Calculus Capital Limited and is a director of Terrain
Energy Limited.
Calculus Capital Limited receives annual fees for monitoring and
for the provision of a director from Terrain Energy Limited, Human
Race Group Limited and Solab Group Limited. Calculus Capital
Limited receives a monitoring fee from Arcis Biotechnology Holdings
Limited and MicroEnergy Generation Services Limited. Calculus
Capital Limited also received a fee from Terrain Energy Limited for
office support services. In the year to 31 December 2016, Calculus
Capital Limited received an arrangement fee relating to the
investment of funds managed by it in Arcis Biotechnology Holdings
Limited.
In the year ended 31 December 2016, the amount payable to
Calculus Capital Limited which was attributable to the investment
in the Company was GBPnil (2015: GBP700) for Dryden Human Capital
Group Limited, GBP1,205 (2015: GBPnil) from Arcis Biotechnology
Holdings Limited, GBP1,170 (2015: GBP829) for Solab Group Limited,
GBP2,409 (2015: GBP3,178) from Human Race Group Limited, GBP2,503
(2015: GBP2,681) from Terrain Energy Limited and GBP311 (2015:
GBP954) from MicroEnergy Generation Services Limited (all excluding
VAT).
Nature of financial Information
These are not full accounts in terms of Section 434 of the
Companies Act 2006. Full accounts for the year ended 31 December
2015 have been lodged with the Registrar of Companies. The Annual
Report and Financial Statements for the year ended 31 December 2016
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 published on www.calculuscapital.com, a website maintained
by the Company's Investment Manager, Calculus Capital Limited. A
copy of the Annual Report and Financial Statements will also be
submitted shortly to the National Storage Mechanism ("NSM") and
will be available for inspection at the NSM, which is situated at:
http://www.morningstar.co.uk/uk/NSM.
The audited financial statements for the year ended 31 December
2016 contain an unqualified audit report.
Page numbers and cross-references in this announcement refer to
page numbers and cross-references in the Annual Report and
Financial Statements for the year ended December 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSJBMPTMBBTBRR
(END) Dow Jones Newswires
March 21, 2017 14:28 ET (18:28 GMT)
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