Calculus Vct Regulatory News (CLC)

Calculus VCT plc

Legal Entity Identifier: 2138005SMDWLMMNPVA90

Annual Financial Report for the year ended 29 February 2020

The Annual Report and Financial Statements ("Annual Report and Accounts") for the year ended 29 February 2020 and the Notice of Annual General Meeting will be posted to shareholders shortly and will be available for inspection at 104 Park Street , London, W1K 6NF, the Company's registered office, and will be available in electronic format for download on www.calculuscapital.com/calculus-vct/, a website maintained by the Company's Investment Manager, Calculus Capital Limited. A copy of the Annual Report and Accounts will also be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: http://www.morningstar.co.uk/uk/NSM.

Page numbers and cross-references in the announcement below refer to page numbers and cross-references in the PDF of the Annual Report and Accounts.

Financial Highlights

\* These are Alternative Performance Measures (APM's) which have been defined in the glossary on page 78 of the Annual Report.

Portfolio Review

Strategic Report

The Strategic Report has been prepared in accordance with the requirements of Section 414A of the Companies Act 2006 (the "Act").

Its purpose is to inform members of the Company and help them assess how the Directors have performed their legal duty under Section 172 of the Act, to promote the success of the Company for the benefit of the members as a whole and, in doing so, have a regard for the wider stakeholder interests.

CHAIRMAN'S STATEMENT

Results for the year

The net asset value per Ordinary share at 29 February 2020 was 70.2 pence, compared to 75.8 pence as at 28 February 2019, this is after paying a dividend of 3.4 pence per share.

As announced in the interim report, during the year the Company's holding in Synpromics Limited was sold, achieving an undisclosed, but significant return for investors. Synpromics, a market leader in control technologies for gene therapy has been acquired by AskBio, a leading US pioneer in gene therapeutics. Synpromics helps clinicians to target genetic cures for conditions such as haemophilia, liver disease and heart disease. The deal is further enhanced by the potential to benefit from future licensing fees on Synpromics existing portfolio of licences.

The most significant movement in the qualifying portfolio on the upside was WheelRight which, increased its valuation by 65 per cent compared to 28 February 2019, as it focused on the rapid commercialisation of its drive over tyre pressure and tread depth measuring equipment with encouraging results. The company also successfully closed an investment round with US based company Snider, who invested USD 2 million. Blu Wireless Technology, Money Dashboard (formerly The One Place Capital), Wazoku and Weeding Technologies, four of the larger holdings in the portfolio each saw their valuation increase over the year to 29 February 2020. Further details can be found on pages 15 to 23 of the Annual Report. Antech, Arecor, Essentia Analytics, Cloudtrade and Mologic also increased during the year. Altogether these valuation improvements added a further 1 pence to the Company's NAV per share. The top 10 unquoted investments by value are discussed further from page 14 to 24.

During the year, two of the Company's holdings; Terrain Energy and MicroEnergy, were combined into one new company, Evoterra Limited. The valuation of Evoterra has fallen by £290,000, as a result of operating challenges and global issues affecting the oil and gas market. Evoterra has divested several of its non-core assets to assist with cash flow management, but this has also had an impact on the value attributable to the remaining oil and gas reserves. The new fully integrated energy company will focus on delivering value from the remaining operating assets of both MicroEnergy and Terrain Energy.

Unfortunately, Benito's Hat (Pico's Limited), the Mexican food chain, was written down to nil in the year due to the problems on the high street and in particular, the fast-casual dining market. The company has been experiencing trading difficulties and appointed administrators in February 2020 with no return for equity holders being anticipated. As mentioned in the interim accounts, Solab, the Hampshire cosmetics business also had its equity written down to nil when it appointed administrators in June 2019. Of the £295,000 of outstanding loans held by the Company when Solab appointed administrators, 100% of it has been recovered. The Company has further recovered all outstanding interest owed on the loans.

Further information on the portfolio can be found in the investment manager's report following this statement.

Venture Capital Investments

Calculus Capital Limited manages the portfolio of VCT qualifying investments made by the Company.

The Company made a number of new and follow on investments in the year to 29 February 2020, with all new investments set out in the Investment Manager's report. As mentioned above, the Company recovered £200,000 of loan notes from Solab during the year to 29 February 2020 (with the balance recovered post year end). In December 2019, WheelRight also redeemed £100,000 of its loans.

Issue of new Ordinary shares

The offer for subscription for Ordinary Shares that opened on 13 September 2018 and closed on 31 August 2019 received aggregate subscriptions from the issue of Ordinary shares of £5.9 million.

On 24 September 2019, a new offer was launched. The Company has issued shares for £2 million of subscriptions under this offer by the end of the financial year. Of the £4,917,000 total new share issues in the year to 29 February 2020, £2,917,000 took place under the offer that closed on 31 August 2019.

On 3 April 2020 the Company issued a further 2,342,066 shares at an average issue price of 65.9 pence per share. The net asset value used for the allotment had been adjusted due to the anticipated impact of COVID-19 on the portfolio companies. This is further explained below.

Share buy backs

In July 2019, 78,279 shares were bought back for cancellation. In keeping with its policy for returning funds to shareholders, the Company will continue to consider opportunities for buybacks in the coming year.

Dividend

The Directors are pleased to announce a final dividend of 3.2 pence per Ordinary share to be paid to all Ordinary shareholders.

Subject to shareholder approval, the Ordinary share dividend will be paid on 31 July 2020 to shareholders on the register on 3 July 2020. The deadline for the Scheme Administrator to receive any applications under the dividend reinvestment scheme is 17 July 2020.

Board Succession

Kate Cornish-Bowden had planned to step down from the board at the next annual general meeting as she has served the Company for nine years. The Board had begun a successor recruitment process with an independent search consultant, but the COVID-19 outbreak and the difficulties this poses in carrying out interviews may lead to some delays. Kate has agreed to stay on the board until the situation stabilises and a replacement can be found. The Company is very grateful to Kate for her excellent contribution and diligence during this time.

Impact of COVID-19 and NAV movement

We have assessed that the true impact of COVID-19 was felt by our portfolio companies after the government initiated a nationwide lockdown on 23 March 2020 in order to contain the spread of infection. We have therefore treated the consequences of COVID-19 on our investee company valuations as a post balance sheet event in these accounts. On the 19 December, the Company released a NAV which was prior to any knowledge of COVID-19. The NAV was 71.8 pence per share as at 30 November 2019. The NAV at the 29 February 2020 year end was 70.2 pence per share. To the extent that unquoted investments are valued with reference to revenue or earnings multiples derived from listed companies with similar characteristics, the unquoted valuations would have been impacted by the partial fall in equity markets which occurred prior to 29 February 2020. However, the overall portfolio performance had improved since 30 November 2019. On the 31 March 2020, the Company released an unaudited NAV of 65.1 pence per share, which had been adjusted to reflect the potential impact of COVID-19. The unquoted portfolio was reviewed and factors which were deemed to affect valuations included: the impact of the lockdown on sales, investee companies' ability to fulfil orders and/or effect installations, supply chain disruption, the falling oil price and the likely detrimental impact of the general economic downturn on the availability of capital and, consequently, the valuations likely to be achieved in funding rounds. This NAV of 65.1 pence per share was released to the market, ahead of an allotment that took place on 3 April 2020. The most recent unaudited NAV available at the time of publishing these accounts is 66.5 per share as at 30 April 2020.

Developments since the year end

Given the impact of the COVID-19 epidemic on the global economy, the Manager has completed a review of the portfolio and estimated the impact of its holdings in its respective investee companies. The impact of these estimations would be to reduce the valuation of the investment portfolio by £552,402, which would result in an estimated fall in NAV (unaudited) by 3.7 pence to 66.5 pence per ordinary share. The movement reflects the Company's current best estimate of the operating impact, both positive and negative, on our portfolio companies. The reduction in NAV was limited to a 5% decrease, because the Company is shielded to a degree by holding a significant portion of its assets in cash. Furthermore, although some portfolio companies have been adversely affected by the impact of COVID-19 such as investments in the leisure and energy sectors, the Company has invested in several life sciences companies which are benefiting from creating products to aid the fight against COVID-19. It is a volatile situation, subject to rapid change; valuations of portfolio companies will be kept under regular review.

As mentioned above, since the year end the Company has made a further allotment of Ordinary shares. On 3 April 2020, a further 2,342,066 Ordinary shares were allotted at an average price of 65.9 pence per share.

On 3 April 2020 the Company invested £380,000 in Maze Theory Limited. Maze Theory develops games across multiple platforms including virtual reality (VR), PC console and mobile. Its first VR game, Dr Who, The Edge of Time was launched in November 2019.

On 4 May 2020, the Company invested £530,000 in Rotageek Limited. Rotageek uses cloud-based technology and automatic scheduling to help businesses manage and schedule staff to meet demand, drive efficiency and reduce costs. The company is providing free trials of its proprietary solutions to the NHS to assist in supporting medical teams which are facing exceptionally complex scheduling problems during the COVID-19 crisis.

In light of the COVID-19 pandemic and the regulations on social distancing, the Board is considering contingency plans for the 2020 AGM taking into account the evolving nature of the regulations and announcements from the Financial Reporting Council and the Financial Conduct Authority. Please refer to the Notice of Meeting from page 73 of this document.

Outlook

The election result in December 2019 provided some economic certainty and reduced some of the fears surrounding the UK's departure from the EU, Since the year end however, significant new uncertainties are being posed by the COVID-19 pandemic. The economic impact of this crisis has ramifications through large parts of the UK economy. The Company is fortunate in having a relatively low level of exposure to the leisure industry and other consumer related sectors. We were also fortunate to have a significant percentage of our assets held in cash when the crisis started. Calculus Capital is working closely with its portfolio companies to help them manage their cash through these uncertain times. Whilst the inevitable economic fallout will have an adverse effect on the valuation of some of the portfolio companies, others such as the investments in the life sciences sector in particular are seeing some appreciation. Portfolio companies in the technology sector are, by and large, also in a stronger position to weather the economic downturn than those companies more reliant on consumer expenditure.

Calculus Capital is a long term investor, actively identifying attractive investment opportunities. As such, the Manager will continue to deploy capital to proactively support companies through these challenging times and to invest in selective new opportunities which may arise.

27 May 2020

INVESTMENT MANAGER'S REVIEW

(Qualifying Investments)

The net assets of £17,453,046 broken down as follows:

During the year, the Company made twelve qualifying investments, as we seek to build a diversified portfolio. These included five new investments and seven follow on investments in existing portfolio companies.

New Investments

Fiscaltec Group Limited

In November 2019, the Company invested £500,000 in Fiscaltec. Fiscaltec's patented risk management software uses advanced artificial intelligence to forensically analyse an organisation's financial data. This enables the software to detect fraud and mitigate payment and supplier risk thereby protecting an organisation's working capital requirements. More information on Fiscaltec can be found on page 17.

Raindog Films Limited

In February 2020, the Company invested £400,000 in Raindog. Raindog is a creator of filmed entertainment and was co-founded in 2012 by Oscar-winning actor Colin Firth and former Chairman and CEO of Sony Music UK and Chairman of the Brit Awards, Ged Doherty. More information on Raindog can be found on page 20.

IPV Limited

In May 2019 the Company invested £340,000 in IPV limited comprising £300,000 of loans and £40,000 equity. IPV's proprietary software enables companies to access, store, modify, tag and transfer video content quickly and efficiently, significantly improving internal processes and creating more routes to market. More information on IPV can be found on page 22.

Wazoku Limited

In March 2019 the Company invested £300,000 in Wazoku. Wazoku is an idea management company with an impressive client list including the United Kingdom Ministry of Defence (MoD), Waitrose, Microsoft and HSBC. The Wazoku collaborative idea management platform helps organisations transform raw ideas generated by the workforce into actionable innovation, with the aim of realising untapped business opportunities, identifying areas for improvement, making savings and boosting revenue. More information on Wazoku can be found on page 18.

Wonderhood Limited

In December 2019 the Company invested £275,000 in Wonderhood. Wonderhood is introducing a new hybrid model as a TV programme maker and advertising agency, supported by a third-party capability which provides data-led insights into audience behaviour. More information on Wonderhood can be found on page 24.

Follow on Investments

C4X Discovery plc

In November 2019, the Company invested £400,000 in C4X Discovery (C4XD). C4XD is a drug discovery and development company that uses cutting-edge technology to design and create drug candidates. C4XD has programmes across a number of therapeutic areas including inflammation, neurodegeneration, immune-oncology and diabetes.

Blu Wireless Technology Limited

In April 2019 the Company invested £300,000 in Blu Wireless Technology. Blu Wireless Technology develops semiconductor IP to allow wireless communication at speeds similar to fibre with immediate applications for fixed wireless broadband (where fibre, roll out may be prohibitively expensive), rail and road transport and, in due course, application for 5G roll-out. More information on Blu Wireless can be found on page 15.

WheelRight Limited

During the year the Company invested £300,000 in WheelRight. WheelRight uses patented flush mounted sensor plates which measure and record the tyre pressures and wear on all of the tyres on a car, bus or truck as the vehicle drives over the plate. Their technology provides both effective maintenance and monitoring, enabling cost savings and safety benefits to vehicle and fleet owners. More information on WheelRight can be found on page 16.

Every1Mobile Limited

In May 2019 the Company invested £200,000 in Every1Mobile. Every1Mobile, provides digital communication solutions and online community management through a bespoke platform. The customer focus is to large corporates, government and international development agencies in the emerging African market. More information on Every1Mobile can be found on page 19.

Quai Administration Services Limited

In July 2019 the Company invested £150,000 in Quai. Quai provides platform technology combined with back office administration services for the high-volume personal savings industry. Quai's platform allows it to administer many thousands of individual savings plans at a fraction of the cost incurred by established insurance companies and wealth managers. More information on Quai can be found on page 21.

Oxford Biotherapeutics Limited

In February 2020, the Company invested £150,000 in Oxford BioTherapeutics (OBT). OBT is a clinical stage oncology company committed to the discovery and development of novel therapies for various cancer types. OBT has a strong pipeline of immune-oncology (IO) therapies, which are used to re-engage and recruit the body's immune system to attack cancer cells.

Evoterra Limited

An investment was made in Terrain Energy, an oil and gas exploration company, in the form of a £100,000 loan note as at the 30 October 2019. However, as of 3 February 2020, Evoterra purchased the entire share capital of Terrain Energy, hence becoming the borrower.

Evoterra also purchased all the share capital of MicroEnergy, which owns and operates a fleet of small onshore wind turbines. More information on Evoterra can be found on page 14.

Investment Diversification at 29 February 2020

Sectors by investment cost

Total assets by value

Holding period of qualifying investments by value

27 May 2020

INVESTMENT PORTFOLIO

Largest holdings by value

Three of the Company's ten largest investments are currently in liquidity funds. Details of the ten largest qualifying investments and of the liquidity funds are set out below

Calculus Capital Limited manages the portfolio of qualifying Investments made by the Company. To maintain its qualifying status as a Venture Capital Trust, the Company needed to be greater than 70 per cent invested in qualifying Investments by the end of the relevant third accounting period and to maintain it thereafter. At 29 February 2020, the qualifying percentage for the relevant funds was 87.3 per cent.

Evoterra Limited

On the 3 February 2020, Evoterra purchased the entire share capital of Terrain Energy and MicroEnergy Generation Services. The creation of Evoterra brings traditional and renewable energy under one umbrella. During the cashless transaction, the original shareholders of Terrain Energy and MicroEnergy were hived up to Evoterra Limited. These shareholders now hold shares in Evoterra rather than directly in Terrain Energy and MicroEnergy but Terrain Energy and MicroEnergy still exist as wholly owned subsidiaries of Evoterra and carry out the same trade as previously.

MicroEnergy owns and operates a fleet of small onshore wind turbines in East Anglia. Full year generation to 31 March 2019 was £206,000 (no change from 2018 revenues). This reflects reasonable performance based on some operational improvements as the wind resource was on average 5 per cent below the 10 year mean.

Terrain Energy is an oil and gas exploration and production company with interests in eight onshore licences in the UK and Germany. Terrain Energy's main producing asset, Whisby-6, remains shut-in awaiting a workover. This lack of regular income has resulted in Terrain Energy divesting several of its non-core assets to maximise near term cash in order to support the development of its German gas assets in the medium term.

As a newly formed company, no financial information other than below is yet available for Evoterra.

Total equity held by funds managed by Calculus Capital Limited: 91.1 per cent

Blu Wireless Technology Limited 

Blu Wireless provides the technology to allow data to be transmitted wirelessly at very high, fibre-like, speeds. Blu Wireless is addressing the challenge of building cost effective 5G networks, rolling out fibre-like broadband to businesses and homes, reliable connectivity on high-speed transport and low latency video streaming in the home. The company's key partnership with FirstGroup, expected to significantly boost the quality of, connectivity on trains, has advanced considerably during the year. Early roll-out is expected on both the South West and West Coast franchises' during 2020/21 and there is interest in the technology from other UK and overseas rail companies. In addition, Blu Wireless has made advances in the fixed wireless access ("FWA") market, as well as in other applications in the transport and military sectors. In February 2020, Blu Wireless appointed Alan Jones, former CEO of Virtuosys, as CEO to lead the company during the coming commercial growth phase. Alan has a strong technical background, having held engineering roles at both Hewlett Packard Labs and Motorola and has a track record of successful exits.

Total equity held by funds managed by Calculus Capital Limited: 13.0 per cent.

WheelRight Limited ('WheelRight')

WheelRight designs and manufactures unique drive-over tyre pressure and tread depth measuring equipment. WheelRight has developed a drive-over sensor plate to measure the pressure of all of a vehicle's tyres (as well as axle weight), together with a strobe-based camera array to measure each tyre's tread depth and identify external defects. The technology has been fully validated, by having sufficient installations at sites very varied in nature. Given this, WheelRight is focused on rapid commercialisation, with very encouraging initial results - installations and firm orders in the first half of the financial year to April 2020 exceed the total number of previous installations, including customers in Hong Kong, Singapore, South Africa and the US, and for the first time, orders for multiple units from the same customer.

Calculus VCT invested £0.3 million into WheelRight in December 2019 via a loan note, supplementing a previous follow on investment, to provide working capital for the new orders. The VCT investments follow equity investments from Calculus Capital EIS funds. Alongside the Calculus investment, in mid-December 2019, Snider concluded a three-tranche investment agreement totalling USD$2 million, with the first tranche of USD$1 million paid on completion and the second tranche of USD$750,000 and third tranche of USD$250,000 payable 6 months and 12 months after the date of the first tranche, respectively.

A distribution agreement was signed in tandem with the investment agreement, giving Snider exclusivity to WheelRight's products in the US market and committing it to making orders of 10 units in year 1, 20 units in year 2 and 30 units in year 3. This alone serves to be transformational for the company with the added upside that it is free to pursue sales opportunities in all non-US geographies completely unfettered, with a target of non-Snider sales units constituting 50% of total sales.

Total equity held by funds managed by Calculus Capital Limited: 48.4 per cent.

Fiscaltec Group Limited ('Fiscaltec')

Fiscaltec's proprietary solution analyses an organisation's financial transactions and supplier contacts, providing an independent overview of the effectiveness of the processes and controls encompassing spend. Its NXG Forensics® enterprise solution provides continuous protection through transactional risk analysis, supplier risk profiling, anti-fraud controls and ongoing reporting. The ongoing reporting element delivers detailed insight and flags unusual or high-risk payments before each payments run is released. These unusual outgoings include duplicates, fraudulent and erroneous payments. Fiscaltec targets companies and organisations who typically have more than £100 million in annual revenues, current customers including BAE Systems, Kent County Council, KFC and Mitchells & Butler. In November 2019, the Company invested £500,000, as part of a total fundraising of £3.6 million, which will be used to develop Fiscaltec's core UK market and increase expansion into the US, where it already has strong traction, as well as incremental product development. The investment round was led by Octopus VCT, which invested £3 million.

 Total equity held by funds managed by Calculus Capital Limited: 0 per cent.

Wazoku Limited

Wazoku's software allows very large companies and organisations to capture and develop the ideas and innovations latent within the workforce.

Calculus VCT invested £300,000 in Wazoku Ltd in April 2019 as part of £2.5 million investment round. Wazoku has developed a market leading platform and suite of support services to enable firms to innovate at scale. The core product, Idea Spotlight, is a Global Home for Ideas. It is a customisable off-the‐shelf solution offering collaborative idea management modules to meet the diverse set of innovation requirements that global businesses have. Successful innovation requires not only capturing ideas, but also collating, analysing and implementing them. The platform provides the process and structure to capture, evolve, evaluate, develop, measure, select and implement the best ideas from internal or external stakeholders. Wazoku has an impressive client list including Waitrose, HSBC and MoD. In February 2020, Wazoku announced a partnership with Innocentive, which has built a network of 400,000 subject matter experts to whom it reaches out to solve complex problems on behalf of corporate and governmental clients. Wazoku and Innocentive plan to create a new and improved product combining Wazoku's existing innovation platform with Innocentive's complementary network and methodology.

 Total equity held by funds managed by Calculus Capital Limited: 13.7 per cent.

Every1Mobile Limited

Every1Mobile provides digital communication solutions and online community management through a bespoke platform to multi-national corporates, international development agencies and non-profit organisations across Africa. The company has delivered programmes across South Africa, Kenya, Nigeria, Ghana, Cote d'Ivoire, Uganda, Sierra Leone, Zambia, and Rwanda. These initiatives help to achieve key development goals in areas such as sexual health, digital and financial literacy, business skills, family planning, gender and nutrition. During 2019, Every1Mobile doubled the size of its shopkeeper network, supporting informal vendors who service the bottom of the pyramid in Kenya and Nigeria. In 2019, Calculus VCT invested £0.2 million in loan notes as part of a larger fundraising. Currently this investment has not delivered the growth expected and the company, with Calculus support, is undertaking a strategic review to identify what is required to rectify this.

Total equity held by funds managed by Calculus Capital Limited: 38.7 per cent.

Raindog Films Limited ('Raindog')

Raindog Films was co-founded in 2012 by Oscar-winning actor Colin Firth and former Chairman and CEO of Sony Music UK and Chairman of the Brit Awards, Ged Doherty. Raindog Films has produced an award-winning slate of premium filmed entertainment and has established itself as a leading producer of important films. Recent projects include Official Secrets directed by Gavin Hood, starring Keira Knightley and Matt Smith, which opened to critical acclaim; Loving, directed by Jeff Nichols and starring Joel Edgerton and Ruth Negga for which she earned an Oscar nomination and Eye in the Sky, directed by Gavin Hood featuring Helen Mirren and Aaron Paul. Raindog has an extremely talented team with impeccable connections, providing the ability to attract the best talent to work on projects. The team has been bolstered by the addition of writer/producer and award-winning researcher Trish D Chetty who has joined Colin and Ged to implement the company's growth plans and commitment to identify new writing, directing and production talent.

In February 2020, Calculus invested £1.9 million (£396,000 from the Calculus VCT), which will be used to facilitate Raindog Films' ambitious plans to expand into TV drama, music content and documentaries.

Total equity held by funds managed by Calculus Capital Limited: 22.0 per cent.

Quai Administration Services Limited ('Quai')

Quai provides platform technology combined with back office administration services for the high-volume personal savings industry. Quai's platform allows it to administer many thousands of individual savings plans at a fraction of the cost incurred by established insurance companies and wealth managers. Since initial investment, Quai's revenues have grown by nearly 300% (over 25% compound annual growth). Quai now has 11 customers live on its platform including PJ Milton, Punter Southall, Digital Moneybox and Tavistock Investments. Recurring revenues grew at 30% to £1.7 million. In Q1 2020 Quai applied to become FCA regulated. This will be an important milestone in the company's development, providing the opportunity to expand the range of services, increase margins and reduce reliance on third parties. The application process is expected to take a number of months. Together with the onboarding of new customers and the establishment of its own IT development team, this is expected to move the company towards a profitability in 2020.

 Total equity held by funds managed by Calculus Capital Limited: 50.8 per cent.

IPV Limited

IPV's proprietary software enables companies to access, store, modify, tag and transfer video content quickly and efficiently, significantly improving internal processes and creating more routes to market. IPV's products are designed to create a "Content Factory" experience for the users, streamlining the creative editorial process and the delivery of content to multiple platforms. IPV has an established, blue chip customer base in the media and broadcast industry, including Turner, Sony Entertainment, the Oscars (AMPAS) and Sky. An increasing number of non-broadcast companies are having to manage large quantities of video material. From major brands' online marketing content to law court proceedings and large retailers' promotional materials; the need for content management is moving beyond traditional broadcasting companies. This is significantly increasing IPV's addressable market. In November 2019, IPV raised £4.2 million of new equity finance, including £1 million from the Calculus EIS funds. The valuation achieved (approximately £7 million pre-money) was a 13% uplift on the price at which the Calculus VCT previously invested.

 Total equity held by funds managed by Calculus Capital Limited: 34.4 per cent.

 Money Dashboard Limited (formerly The One Place Capital) 

Money Dashboard offers its users a view of their finances (from bank accounts, credit cards, store cards, etc.) in one secure place. The company's proprietary transaction tagging technology analyses the user's spending into categories, providing an automatically updating, consolidated view of their financial lives. With Open Banking finally becoming a reality, it is an exciting time for pioneers such as Money Dashboard as they seek to take full advantage of the many opportunities offered. During 2019 Money Dashboard won a number of awards including FinTech of the Year and Best FinTech Collaboration at the Scottish Financial Technology Awards; and Best use of Data Science for Good and Best Innovation for Savings Journey at the DATA Open Banking Awards. In August 2019, the Company raised £4.6 million of new equity capital, primarily from new investors. The additional funds are being used to support additional recruitment, as well as to further develop the company's technological offering, helping cement the company's market leading position. This investment was made at a 20 per cent premium to previous rounds.

Wonderhood Limited

Wonderhood is introducing a new hybrid model as a TV programme maker and advertising agency, supported by a third capability which provides data-led insights into audience behaviour. Wonderhood has an impressive team with a strong track record, assembled by former Channel 4 CEO David Abraham and senior partners from the advertising and television sectors. This year, Wonderhood's TV production studio has won multiple broadcast commissions: a BBC2 documentary featuring Heston Blumenthal, which was broadcast in December; a social media biography of Donald Trump for BBC3; a cutting-edge medical sciences series for Channel 4; and a documentary series with Jeremy Spake for BBC1. Meanwhile, the company's advertising studio has won a number of competitive pitches, including to produce a campaign for Starling, the mobile challenger bank and for Mizkan owner of the Branston, Sarsons and other former Crosse and Blackwell brands. Wonderhood is uniquely positioned to combine its skills to develop, produce and distribute high quality long-form content that can reach audiences in new ways at a time when audience habits are changing radically. In December 2019, Calculus invested £850,000 (£275,000 from the Calculus VCT), as part of a £1.2 million fundraise, which will enable the company to explore new genres such as drama and develop new productions.

BUSINESS REVIEW

Company activities and status

The Company is registered as a public limited company and incorporated in England and Wales with registration number 07142153. Its shares have a premium listing and are traded on the London Stock Exchange.

On incorporation, the Company was an investment company under section 833 of the Companies Act 2006. On 18 May 2011, investment company status was revoked by the Company. This was done in order to allow the Company to pay dividends to shareholders using the special reserve (a distributable capital reserve), which had been created on the cancellation of the share premium account on 20 October 2010 and on 1 November 2017.

Company business model

The Company's business model is to conduct business as a VCT. Company affairs are conducted in a manner to satisfy the conditions to enable it to obtain approval as a VCT under sections 258-332 of the Income Tax Act 2007 ("ITA 2007").

Investment policy

The Company's policy is to build a diverse portfolio of Qualifying Investments of primarily established unquoted companies across different industries and investments which may be by way of loan stock and/or fixed rate preference shares as well as Ordinary shares to generate income. The amount invested in any one sector and any one company will be no more than 20 per cent and 10 per cent respectively of the qualifying portfolio. These percentages are measured as at the time of investment. The Board and its Investment Manager, Calculus Capital Limited, will review the portfolio of investments on a regular basis to assess asset allocation and the need to realise investments to meet the Company's objectives or maintain VCT status.

It is intended that a minimum of 75 per cent of the monies raised by the Company before being invested in qualifying investments, will be invested in a variety of investments which will be selected to preserve capital value, whilst generating income, and may include:

• Bonds issued by the UK Government; and

• Fixed income securities issued by major companies and institutions, liquidity funds and fixed deposits with counterparty credit rating of not less than A minus (Standard & Poor's rate)/A3 (Moody's rated).

Where investment opportunities arise in one asset class which conflict with assets held or opportunities in another asset class, the Board will make the investment decision. Under its Articles, the Company has the ability to borrow a maximum amount equal to 25 per cent of the aggregate amount paid on all shares issued by the Company (together with any share premium thereon). The Board will consider borrowing if it is in the shareholders' interests to do so.

Long term viability

Significant ramifications to the global economy are being posed by the COVID-19 pandemic. The Directors have assessed the Company's vulnerability to the initial impact and concluded that COVID-19 is not expected to have any significant long term impact on the viability of the Company. The board came to this conclusion because a significant portion of the Company's assets are held in cash thus diluting the impact of the valuation movements on the NAV. Furthermore, some portfolio companies in the life science sector are benefiting from creating products to aid the fight against COVID-19 thus providing some upside for the portfolio.

In assessing the long-term viability of the Company, the Directors have had regard to the guidance issued by the Financial Reporting Council. The Directors have assessed the prospects of the Company for a period of five years, which was selected because this is the minimum holding period for VCT shares. The Board's strategic review considers the Company's income and expenses, dividend policy, liquid investments and ability to make realisations of qualifying investments. These projections are subject to sensitivity analysis which involves flexing a number of the main assumptions underlying the forecast both individually and in unison. Where appropriate, this analysis is carried out to evaluate the potential impact of the Company's principal risks actually occurring. Based on the results of this analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five-year period of their assessment. The principal assumptions used are as follows: i) Calculus Capital Limited pays any expenses in excess of 3.0 per cent of NAV as set out on page 34 of the Accounts; ii) the level of dividends paid are at the discretion of the Board; iii) the Company's liquid investments which include cash, money market instruments and quoted shares can be realised as permitted by the Company's investment policy; iv) the illiquid nature of the qualifying portfolio. Based on the results of this analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due.

In making this statement the Board carried out a robust assessment of the emerging and principal risks facing the Company including those that might threaten its business model, future performance, solvency or liquidity. The procedures in place to identify emerging risks and explain how they are being managed or mitigated are set out on page 27.

Alternative investments funds directive (AIFMD)

The AIFMD regulates the management of alternative investment funds, including VCTs. The VCT is externally managed under the AIFMD by Calculus Capital Limited which is a small authorised Alternative Investment Fund Manager.

Risk diversification

The Board controls the overall risk of the Company. Calculus Capital Limited will ensure the Company has exposure to a diversified range of Qualifying Investments from different sectors.

Since November 2015, the types of non-qualifying investment include:

• Bonds issued by the UK Government; and

• Fixed income securities issued by major companies and institutions, liquidity funds and fixed deposits with counterparty credit rating of not less than A minus (Standard & Poor's rate)/A3 (Moody's rated).

VCT regulation

The Company's investment policy is designed to ensure that it will meet, and continue to meet, the requirements for approved VCT status from HM Revenue & Customs. Amongst other conditions, the Company may not invest more than 15 per cent (by value at the time of investment) of its investments in a single company and must have at least 70 per cent by value of its investments throughout the period in shares or securities in qualifying holdings, of which 30 per cent by value must be Ordinary shares which carry no preferential rights ("eligible shares"). For funds raised from 6 April 2011, the requirement for 30 per cent to be invested in eligible shares was increased to 70 per cent.

Changes to legislation were made in the Finance Bill 2018 such that from 1 March 2020 the percentage by value of the Company's investments in shares or securities which must be invested by and maintained in qualifying holdings will rise to 80 per cent. In addition, 30 per cent of any money raised after 6 April 2018 will need to be invested in qualifying holdings within 12 months after the end of the accounting period in which the money was raised and loan stock investments in investee companies must be unsecured and must not carry a coupon which exceeds 10% per annum on average over a five year period.

Key strategic issues considered during the year

Performance

The Board reviews performance by reference to a number of key performance indicators ("KPIs") and considers that the most relevant KPIs are those that communicate the financial performance and strength of the Company as a whole, being;

• Total return per share

• Net asset value per share

• Dividends

The financial highlights of the Company can be found after the contents page 4 of the Report and Accounts.

Further KPIs are those which show the Company's position in relation to the VCT tests which it is required to meet in order to meet and maintain its VCT status. The Qualifying percentage is disclosed in the Investment Manager's review. The Company has received approval as a VCT from HM Revenue & Customs.

There are no KPIs related to environmental and employee matters as these are not relevant to the Company which delegates operations to external providers.

Principal risks and uncertainties facing the Company and management of risk

The Company is exposed to a variety of risks. The principal financial risks, the Company's policies for managing these risks and the policy and practice with regard to financial instruments are summarised in note 16 to the Accounts.

The Board has also identified the following additional risks and uncertainties:

Regulatory risk

The Company has received approval as a VCT under ITA 2007. Failure to meet and maintain the qualifying requirements for VCT status could result in the loss of tax reliefs previously obtained, resulting in adverse tax consequences for investors, including a requirement to repay the income tax relief obtained, and could also cause the Company to lose its exemption from corporation tax on chargeable gains.

The Board receives regular updates from the Investment Manager and financial information is produced on a monthly basis. The Investment Manager monitors VCT regulation and presents its findings to the Board on a quarterly basis. The Investment Manager builds in 'headroom' when making investments to allow for changes in valuation. This 'headroom' is reviewed prior to making and realising qualifying investments.

Independent advisers are used to monitor and advise on the Company's compliance with the VCT rules.

Qualifying investments

There are restrictions regarding the type of companies in which the Company may invest and there is no guarantee that suitable investment opportunities will be identified.

Investment in unquoted companies and AIM-traded companies involves a higher degree of risk than investment in companies traded on the main market of the London Stock Exchange. These companies may not be freely marketable and realisations of such investments can be difficult and can take a considerable amount of time. There may also be constraints imposed upon the Company with respect to realisations in order to maintain its VCT status which may restrict the Company's ability to obtain the maximum value from its investments.

Calculus Capital Limited has been appointed to manage the qualifying investments portfolio and has extensive experience of investing in this type of investment. Regular reports are provided to the Board and a representative of Calculus Capital Limited is on the Company's board. Risk is managed through the investment policy which limits the amount that can be invested in any one company and sector to 10 per cent and 20 per cent of the qualifying portfolio respectively at the time of investment.

Liquidity/ marketability risk.

Due to the holding period required to maintain up-front tax reliefs, there is a limited secondary market for VCT shares and investors may therefore find it difficult to realise their investments. As a result, the market price of the shares may not fully reflect, and will tend to be at a discount to, the underlying net asset value. The level of discount may also be exacerbated by the availability of income tax relief on the issue of new VCT shares. The Board recognises this difficulty, and has taken powers to buy back shares, which could be used to enable investors to realise investments.

COVID-19

As mentioned earlier in the Chairmans' Statement, the COVID-19 pandemic has led to significant ramifications on the global economy. The emerging risks which arise from the virus are the impact of the lockdown on sales, the investee companies' ability to fulfil orders and or/effect installations, supply chain disruption, the falling oil price and the likely detrimental impact of the general economic downturn on the availability of capital and, consequently, the valuations likely to be achieved in funding rounds. These risks are mitigated through the Company's significant cash assets and in its substantial investments in the life sciences sector, which are benefiting in the current climate from creating products to aid the fight against COVID-19.

Employees, environmental, human rights and community issues

The Company has no employees and the Board comprises entirely non-executive directors. Day-to-day management of the Company's business is delegated to the Investment Manager (details of the management agreement are set out in the Directors' Report) and the Company itself has no environmental, human rights, or community policies. In carrying out its activities and in its relationships with suppliers, the Company aims to conduct itself responsibly, ethically and fairly. Calculus Capital seeks to conduct its investment business in line with its Environment, Social and Governance policy.

Diversity

At the year end, the Board of directors comprised one male director and three female Directors, so has a diverse board in relation to gender diversity. The board also considers other forms of diversity to be important and these factors will be considered as part of the recruitment process going forward. This is further set out in the Corporate Governance statement on page 37 of the Report and Accounts.

Statement regarding annual report and accounts

The Directors consider that taken as a whole, the Annual Report and Accounts is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Jan Ward, Chairman

27 May 2020

SECTION 172 STATEMENT

Section 172 (1) of the Companies Act 2006 requires the Directors to explain how they have fulfilled their obligation to consider broader stakeholder interests when performing their duty to act in good faith for the benefit of all stakeholders. In doing this the Directors considered the following factors -

- Likely consequences of any decisions in the long term

- The interests of any employees

- The need to foster business relationships with suppliers, shareholders, and others

- The impact of the company's operations on the community and the environment

- Maintaining a reputation for high standards of business conduct

- Acting fairly as between all the members of the Company.

Communication with Shareholders

The Board promotes and encourages communications with shareholders, primarily through interim and annual reports, and at annual general meetings. The Board encourages shareholders to attend and vote at AGMs. Calculus Capital Limited as investment manager keeps shareholders up to date with investee company news stories and updates on any open offers are included on quarterly newsletters sent to investors. Investee company news stories and regulatory news is also available for shareholders to view on the Company's website. Calculus Capital also organises investor forums where shareholders have an opportunity to meet with management of portfolio companies.

Directors' decisions are intended to fulfil the Company's aims and objectives to achieve long-term returns for shareholders. In addition to providing the opportunity to benefit from investment in a diverse portfolio of unquoted growing companies, the Board aims to pay semi-annual dividends equivalent to 4.5% of NAV. During the financial year, 3.4 pence dividends per share were paid to registered shareholders. As part of its policy to return funds to shareholders, the Company will continue to consider opportunities for buybacks. 78,279 shares were bought back for cancellation during the year.

Oversight of Professional Advisors

As is normal practice for VCT, the Company delegates authority for the day to day management of the company to an experienced Investment Manager, The board ensures that it works very closely with Calculus Capital Limited to form strategy and objectives, and oversee execution of the business and related policies. The Board receives quarterly performance updates at board meetings from the Manager in addition to regular ad hoc updates and portfolio news. The Investment Manager is in attendance at every board meeting and the CEO of the Investment Manager is also a member of the Company's Board. The Board reviews other areas of operation over the course of the financial year including the Company's business strategy, key risks, internal controls, compliance and other governance matters. The Board reviews the Investment Manager's fee annually. The Board has also decided to initiate an annual strategy review event along with the Investment Manager going forward

Oversight of Suppliers and Providers

The board reviews annually the agreements with service providers including the administrators, custodian and depositary of the Company, to ensure value for money, accuracy and compliance. In carrying out its activities and in its relationships with suppliers, the Company aims to conduct itself responsibly, ethically and fairly.

Working with Portfolio Companies

The board, through its investment policy and objectives, as detailed in page 25 of the Annual Report incorporates considerations for ensuring alignment with the objectives agreed with the Investment Manager and portfolio companies. Calculus Capital Limited as Investment Manager is the main point of contact for investee companies and the Board ensures it receives updates on the entire portfolio quarterly. There have been 12 additions in the financial year and 5 disposals. Further support was provided to some portfolio companies through follow on investments. The investment manager offers investee companies both financial support and practical help by offering specialist skills and contacts to help portfolio companies achieve their long term objectives.

Supporting the Environment and the Community

The purpose of the regulations related to VCTs is to generate support and investment for small growth companies. Government endorsement of the sector is aimed at creating economic growth through innovation, entrepreneurship and employment. This benefits the economy and wellbeing of the community. The Investment Manager incorporates consideration of social, environmental and governance issues in making investment decisions, Investments in life sciences companies such as Genedrive, Mologic and Scancell for example all have core missions to help society overcome disease. Portfolio company Mologic is currently developing a fast diagnostic device for COVID-19, and Scancell has announced plans to use its technology to develop a vaccine. A further portfolio company Weedingtech offers an environmentally friendly approach to safely treating weed and moss in public areas. Every1Mobile, a digital communications platform is focussed on assisting with implementation of development programmes aimed at enhancing health and financial outcomes of communities in Africa.

The Board takes into consideration the potential long term effect of their decisions on all its associated stakeholders. The effects on members, the long term success of the company, compliance with regulations, adherence with the AIC code and the reputation of the Company are all taken into consideration.

EXTRACT OF THE DIRECTOR'S REPORT

Share capital

The capital structure of the Company and movements during the year are set out in note 12 of the Accounts. At the year end, no shares were held in Treasury. During the year, the following changes to the Company's share capital have taken place:

Since the year end a further 2,342,066 new Ordinary shares have been issued pursuant to an offer for subscription.

Substantial Shareholdings

As at 29 February 2020, there were no notifiable interests in the voting rights of the Company.

Management

Calculus Capital Limited is the qualifying Investments' portfolio manager. Calculus Capital Limited was appointed as Investment Manager pursuant to an agreement dated 2 March 2010. A supplemental agreement was entered into on 7 January 2011 in relation to the management of the C Share fund. A further supplemental agreement was entered into on 26 October 2015 in relation to the management of the D share fund and covers the addition of company secretarial duties. The supplemental management agreement entered into on 12 September 2017 relates to the merged share fund (together, the "Calculus Management Agreements"). From 12 September 2017, Calculus Capital Limited agreed to meet the annual expenses of the Company in excess of 3.0 per cent of the net asset value of the Ordinary shares.

Pursuant to the Calculus Management Agreements, Calculus Capital Limited will receive an annual management fee of 1.75 per cent of the net asset value of the Ordinary share fund, calculated and payable quarterly in arrears.

Calculus Capital Limited is also entitled to a fee of £15,000 per annum (plus VAT where applicable) for the provision of company secretarial services.

For the year to 29 February 2020, Calculus Capital Limited charged £264,358 in management fees, £18,000 in company secretarial fees, and did not contribute to the expenses (2019: charged £197,314 in management fees, £18,000 in company secretarial fees and did not contribute to the expenses cap).

Performance Fees

Pursuant to a performance incentive agreement dated 26 October 2015, Calculus Capital Limited is entitled to a performance incentive fee equal to 20 per cent of Ordinary shareholder (formerly D shareholder) dividends and distributions paid in excess of 105 pence. The board have assessed the likelihood of a performance fee being paid as remote and have thus not made a provision for it in these accounts. In making this assessment the board have taken into account the current performance of the Company, including dividends paid out and the current net asset value attributable to Ordinary shareholders.

Investec Structured Products was appointed as Investment Manager pursuant to an agreement dated 2 March 2010, and their appointment as Investment Manager terminated in February 2017. Certain performance incentive agreements were entered into with Calculus Capital Limited and Investec Structured Products.

Pursuant to a legacy performance incentive agreement between the Company, Calculus Capital Limited and Investec Structured Products dated 2 March 2010, Investec Structured Products and Calculus Capital Limited were each to receive a performance incentive fee payable of an amount equal to 10 per cent of dividends and distributions paid to old ordinary shareholders following the payment of such dividends and distributions provided that such shareholders have received in aggregate distributions of at least 105p per ordinary share (including the relevant distribution being offered). The board assess the likelihood of this hurdle ever being met in the long term as a remote probability, and consequently have not recognised a liability or contingent liability in these financial statements.

A legacy performance incentive agreement between the Company, Calculus Capital Limited and Investec Structured Products dated 7 January 2011 was entered into with reference to the C share class. As one of the performance hurdles has not been met, no incentive fee will ever be paid under this agreement, hence no performance fee has been accrued.

Continuing Appointment of the Investment Manager

The Board keeps the performance of Calculus Capital Limited under continual review. A formal review of the Investment Manager's performance and the terms of their engagement has been carried out and the Board are of the opinion that the continuing appointment of Calculus Capital Limited as Investment Manager is in the interests of shareholders as a whole. The Board is satisfied with the performance of the Company to date. The Board is confident that the VCT qualifying tests will continue to be met.

Financial Risk Management

The principal financial risks and the Company's policies for managing these risks are set out in note X to the Accounts.

Going Concern

In assessing the going concern basis of accounting, the Directors have had regard to the guidance issued by the Financial Reporting Council and also the impact caused by COVID-19. As disclosed on page 25 under long term viability, it was concluded that COVID-19 is not expected to have a significant impact in the long term. After making enquiries, and having reviewed the portfolio, balance sheet and projected income and expenditure for a period of twelve months from the date these financial statements were approved, the Directors have a reasonable expectation that the Company has adequate resources to continue in operation for at least the next twelve months. The Directors have therefore adopted the going concern basis in preparing the Financial Statements.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emission-producing sources under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013. Under the investment manager's ESG policy, the environmental impact of an investee company is considered at the point of investment.

Annual General Meeting

A formal Notice convening the Annual General Meeting of the Company to be held on 3 July 2020. As mentioned earlier, in light of the COVID-19 pandemic and the regulations on social distancing the Board is considering contingency plans for the 2020 AGM taking into account the evolving nature of the regulations and announcements from the Financial Reporting Council and the Financial Conduct Authority. 

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Annual Report and the Accounts in accordance with applicable law and regulations.

Company law requires the directors to prepare Accounts for each financial year. Under that law they have elected to prepare the Accounts in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws).

Under company law the Directors must not approve the Accounts unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that period.

In preparing these Accounts, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Accounts; and

• prepare the Accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

• prepare a director's report, a strategic report and director's remuneration report which comply with the requirements of the Companies Act 2006.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Accounts are published on the www.calculuscapital.com website, which is a website maintained by the Company's investment manager, Calculus Capital Limited. The maintenance and integrity of the website maintained by Calculus Capital Limited is, so far as it relates to the Company, the responsibility of Calculus Capital Limited. The work carried out by the Auditor does not involve consideration of the maintenance and integrity of this website and accordingly, the Auditor accepts no responsibility for any changes that have occurred to the Accounts since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom covering the preparation and dissemination of the Accounts may differ from legislation in their jurisdiction.

We confirm that to the best of our knowledge:

• the Accounts, prepared in accordance with UK accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

• the Annual Report including the Strategic Report includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the year ended 29 February 2020 and the year ended 28 February 2019 but is derived from those accounts. Statutory Accounts for 2019 have been delivered to the Registrar of Companies, and those for 2020 will be delivered in due course. The Auditor has reported on these accounts; their report was (i) unqualified (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditor's report can be found in the Company's full Annual Report and Accounts at https://www.calculuscapital.com/calculus-vct/.

INCOME STATEMENT

for the year ended 29 February 2020

Year Ended 29 February 2020 Year Ended 28 February 2019

All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

There is no other comprehensive income as there were no other gains or losses other than those passing through the Income Statement.

The revenue and capital return columns are both prepared in accordance with the AIC SORP.

The notes on pages 58 to 72 form an integral part of these financial statements.

STATEMENT OF CHANGES IN EQUITY

for the year ended 29 February 2020

The notes on pages 58 to 72 an integral part of these financial statements.

STATEMENT OF FINANCIAL POSITION

at 29 February 2020

These financial statements were approved and authorised for issue by the Board of Calculus VCT plc 27 May 2020 and were signed on its behalf by:

The notes on pages 58 to 72 form an integral part of these financial statements.

STATEMENT OF CASHFLOWS

for the year ended 29 February 2020

The notes on pages 58 to 72 form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1. Company information

The Company is incorporated in England and Wales and operates under the Companies Act 2006 (the Act) and the regulations made under the Act as a public company limited by shares, with registered number 07142153. The registered office of the Company is 104 Park Street, London, W1K 6NF.

2. Accounting Policies Basis of accounting

The Company's financial statements have been prepared under FRS102 "The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland" ('FRS102') and in accordance and with the Statement of Recommended Practice ("the SORP") for Investment Trust Companies and Venture Capital Trusts produced by the Association of Investment Companies ("AIC").

The financial statements are presented in Sterling (£).

Going concern

After reviewing the Company's forecasts and projections, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future (being a period 12 months from the date these financial statements were approved) amid the COVID-19 epidemic. This is primarily due to the large cash reserves raised through new subscription offers every year, the funds raised are invested in accordance with the Company's investment policy and to meet VCT qualification requirements. The Company therefore continues to adopt the going concern basis in preparing its financial statements.

Significant judgements and estimates

Preparations of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made are in the valuation of unquoted investments. The valuation methodologies used when valuing unquoted investments provide a range of possible values. Judgments are made to determine the best valuation methodology in order to ascertain the fair value of unquoted investments. Fair value is calculated within a reasonable range of estimates. Estimates are based on historical experience and other assumptions that are considered reasonable under the circumstances. Hence, investments are measured at fair value in accordance with the International Private Equity and Venture Capital Valuation Guidelines. The sensitivity analysis in note 16 demonstrates the impact on the portfolio of applying alternative values in the upside and downside.

As at 29 February 2020 the value of unquoted investments included within the Company's investment portfolio was £8,118,626 (2019: £5,532,937).

Investments

The Company has adopted FRS 102, sections 11 and 12, for the recognition of financial instruments. The Company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value. Fair value is the amount for which an asset can be exchanged between knowledgeable, willing parties in an arm's length transaction. The Company manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the investments is provided on this basis to the Board of directors.

Investments held at fair value through profit or loss are initially recognised at fair value, being the methodology used when assessing that the consideration given was appropriate and excluding transaction or other dealing costs associated with the investment, which are expensed and included in the capital column of the Income Statement.

Gains or losses on investments classified as at fair value through profit or loss are recognised in the capital column of the Income Statement and allocated to the capital reserve - unrealised or realised as appropriate.

All purchases and sales of quoted investments are accounted for on the trade date basis. All purchases and sales of unquoted investments are accounted for on the date that the sale and purchase agreement becomes unconditional.

For quoted investments and money market instruments fair value is established by reference to bid, or last, market prices depending on the convention of the exchange on which the investment is quoted at the close of business on the balance sheet date.

Unquoted investments are valued using an appropriate valuation technique so as to establish what the transaction price would have been at the balance sheet date. Such investments are valued in accordance with the most recent International Private Equity and Venture Capital ("IPEV") guidelines. Primary indicators of fair value are derived from price of recent investments or cost, calibrated with other valuation methods such as earnings or sales multiples, discounted cash flows, or from net assets.

Earnings or sales multiples are tools that evaluate a financial metric as a ratio of another, allowing the comparable analysis of different companies. Relevant multiples are collated from the analysis of appropriate public companies and precedent transactions, and applied to both historic and forward-looking sales and earnings, the assumptions of which are based on the Company's forecasts, providing a suitable enterprise value for the respective unquoted investment.

A discounted cash flow is a valuation tool used by the Company to estimate the value of relevant unquoted investments, based on its forecast cash flows. For the unquoted investments, the majority of the present value will be in the terminal value, which captures the value of the investment beyond the forecast period. Predominantly, the Company assumes an earnings or sales multiple, based on comparable company analysis, and applies this to the relevant financial metric for the final year of the investment's forecast. The present value of forecast future cash flows is calculated by using an assumed discount rate of 25-30%, which is a function of the required rate of return over the proposed hold period of the unquoted investments.

Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents does not include liquidity fund investments as the Company does not consider the risk associated with changes in value to be insignificant.

Debtors

Short term debtors are initially measured at transaction price. Subsequent remeasurement deducts any impairment from the transaction price.

Creditors

Short term trade creditors are initially and subsequently measured at the transaction price.

Income

Dividends receivable on equity shares are recognised as revenue on the date on which the shares or units are marked as ex-dividend. Where no ex-dividend date is available, the revenue is recognised when the Company's right to receive it has been established.

Interest receivable from fixed income securities and premiums on loan stock investments and preference shares is recognised using the effective interest rate method. Interest receivable and redemption premiums are allocated to the revenue column of the Income Statement.

Interest receivable on bank deposits is included in the financial statements on an accruals basis. Provision is made against this income where recovery is doubtful.

Other income is credited to the revenue column of the Income Statement when the Company's right to receive the income is established.

Expenses

All expenses are accounted for on an accruals basis. Expenses are charged to the Income Statement as follows:

Expenses are charged through revenue in the Income Statement except as follows:

• costs which are incidental to the acquisition or disposal of an investment are taken to the capital column of the Income Statement.

• expenses are charged to the capital column in the Income Statement where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect investment management fees have been allocated 75 per cent to the capital column and 25 per cent to the revenue column in the Income Statement, being in line with the Board's expected long-term split of returns, in the form of capital gains and revenue respectively, from the investment portfolio of the Company.

• expenses associated with the issue of shares are deducted from the share premium account. Annual IFA trail commission covering a five-year period since share allotment has been provided for in the Accounts as, due to the nature of the Company, it is probable that this will be payable. The commission is apportioned between current and non-current liabilities.

Expenses incurred by the Company in excess of the agreed cap, currently 3 per cent of NAV (excluding irrecoverable VAT, annual trail commission and performance incentive fees), could be clawed back from Calculus Capital Limited. Any clawback is treated as a credit against the expenses of the Company.

Performance fees are recognised as a liability or contingent liability only when the current obligation to pay the performance incentive fee exists. As dividend decisions are discretionary, this obligation is assessed to exist when the dividends already distributed to a share class plus the net assets attributable to that share class would reach the performance hurdle.

Share Capital

The share capital reserve contains the nominal value of all shares that have been issued. It is not distributable.

Share premium

The share premium is the excess paid by shareholders on share allotments above the nominal value of the share. There is currently a share premium account on the Ordinary shares issued since 1 November 2017. Share premium created prior to 1 November 2017 was cancelled in order to create a distributable capital reserve. The special reserve was created on the cancellation of the share premium account on 20 October 2010 for original ordinary shares, 23 November 2011 for C shares and 1 November 2017 for the Ordinary share class. The majority of the special reserve created in November 2017 becomes distributable on 1 March 2020 as disclosed below.

Special reserve

The special reserve was created by the cancellation of the original ordinary share fund's share premium account on 20 October 2010. A further cancellation of the share premium account occurred on 23 November 2011 for both the original ordinary share fund and C share fund. A further cancellation of the share premium account occurred on 1 November 2017 for the Ordinary share fund. The special reserve is a distributable reserve created to be used by the Company inter alia to write off losses, fund market purchases of its own shares and make distributions and/or for other corporate purposes.

The Company was formerly an investment company under section 833 of the Companies Act 2006. On 18 May 2011, investment company status was revoked by the Company. This was done in order to allow the Company to pay dividends to shareholders using the special reserve.

Capital Redemption

The capital redemption reserve accounts for the amounts by which the issued share capital is reduced through the repurchase and cancellation of the Company's own shares. A resolution is being put to shareholders at the upcoming annual general meeting so that the Company can apply to cancel this reserve and create additional special reserve.

Capital Reserve Realised

The capital reserve realised discloses the gains and losses on disposal of investments and also 75% of management fees as this is the level associated with the enhancement or maintenance of investments. Profits achieved from this reserve would be distributable.

Capital Reserve Unrealised

The capital reserve unrealised is the appreciation or depreciation of investments and unrealised exchange gains or losses on outstanding trades. When an investment is sold the related balance in the capital reserve unrealised is transferred to the capital reserve realised.

Revenue Reserve

The revenue reserve represents accumulated profit or loss retained by the Company.

Distributable Reserves

Distributable reserves are represented by the special reserve, the capital reserve realised and the revenue reserve reduced by negative capital reserve unrealised which total £6,822,120, as at 29 February 2020. From 1 March 2020, £6,629,005 of this amount will be distributable. A resolution is being put to shareholders at the upcoming annual general meeting to be able to apply to create further special reserves from the share premium created since 1 November 2017 (when the share premium was last cancelled) and the capital redemption reserve. In accordance with VCT rules, special reserves created from share premium cannot be distributed until three years after the accounting period in which the shares were issued.

Taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the reporting date where transactions or events that result in an obligation to pay more tax in the future have occurred at the reporting date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversals of the underlying timing differences can be deducted. Timing differences are differences between the Company's taxable profits and its results as stated in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non- discounted basis.

No taxation liability arises on gains from sales of fixed asset investments by the Company by virtue of its venture capital trust status. However, the net revenue (excluding UK dividend income) accruing to the Company is liable to corporation tax at the prevailing rates.

Any tax relief obtained in respect of management fees allocated to capital is reflected in the capital reserve - realised and a corresponding amount is charged against revenue. The relief is the amount by which corporation tax payable is reduced as a result of capital expenses.

Dividends

Dividends payable to equity shareholders are recognised in the Statement of Changes in Equity in the period which they are paid or have been approved by shareholders in the case of a final dividend and become a liability of the Company.

Interim dividends are recognised when paid. Final dividends are recognised when approved by shareholders at the AGM when they become irrevocable and legally binding.

Share buybacks

The Board considers that the Company should have the ability to purchase its shares in the market with the aim of providing the opportunity for shareholders who wish to sell their shares to do so. Subject to maintaining a level of liquidity in the Company which the Board considers appropriate, it is the intention that such purchases of shares will be made at a price which represents a discount of no greater than 5% (or 10% in respect of buybacks made on or before 28 February 2020) to the most recently published net asset value per share. Shares bought back will be cancelled.

Where shares are purchased for cancellation, the consideration paid, including any directly attributable incremental costs, is deducted from distributable reserves. As required by the Companies Act 2006, the equivalent of the nominal value of shares cancelled is transferred to the capital redemption reserve.

3. Income

All income arose in the United Kingdom.

The Board considered operating segments and considered there to be one, that of investing in financial assets.

4. Investment Management Fee

Year Ended 29 February 2020 Year Ended 28 February 2019

No performance fee was paid during the year or payable at the year end.

For the year ended 29 February 2020, Calculus Capital Limited did not contribute (2019: £nil contributed) to the expenses of the Company such that its net management fee was £264,358 (2019: £197,314). At 29 February 2020, there was £69,017 due to Calculus Capital Limited for management fees (2019: £49,945 due to Calculus Capital Limited).

Details of the terms and conditions of the investment management agreement are set out in the Directors' Report.

5. Other expenses

Further details of directors' fees can be found in the Directors' Remuneration Report on page 44 to 46 of the Accounts.

6. Taxation

The Corporation Tax rate was at 19% for the whole of the reporting period.

At 29 February 2020, the Company had £1,863,227 (28 February 2019: £1,514,379) of excess management expenses to carry forward against future taxable profits.

The Company's deferred tax asset of £316,749 (28 February 2019: £257,444) has not been recognised due to the fact that it is unlikely the excess management expenses will be set off in the foreseeable future.

7. Dividends

The Board have proposed an Ordinary share dividend in respect of the year to 29 February 2020 of 3.2 pence per share which, if approved by shareholders, will be paid on the 31 July 2020 to all Ordinary shareholders on the register on 3 July 2020.

The proposed dividend is subject to approval by shareholders at the forthcoming Annual General Meeting and has not been included as a liability in these Accounts.

8. Return per Share

Year Ended 29 February 2020 Year Ended 28 February 2019

Ordinary share return

Revenue return per Ordinary share is based on the net revenue loss after taxation of £150,950 (2019: £179,402) and on 21,728,528 Ordinary shares, (2019: 14,129,738) being the weighted average number of Ordinary shares in issue during the period.

Capital return per Ordinary share is based on the net capital loss for the period of £409,408 (2019: £847,995) and on 21,728,528 Ordinary shares (2019: 14,129,738) being the weighted average number of Ordinary shares in issue during the period.

Total return per Ordinary share is based on the net loss for the period of £560,358 (2019: £1,027,397) and on 21,728,528 Ordinary shares (2019: 14,129,738), being the weighted average number of Ordinary shares in issue during the period.

9. Investments

The Company sold investments of £588,000 in the year. The book costs of these investments when they were purchased was £433,928. These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

In the year to 29 February 2020, Blu Wireless had an uplift in value of £300,000 and Wazoku's valuation increased by £162,000. Evoterra which bought the share capital of Terrain Energy and MicroEnergy was written down by £290,000. Also during the year Benito's Hat (Pico's Limited) was written down by £181,000,Solab Group Limited by £180,000 and C4X Discoverys' valuation decreased by £227,000

In the Statement of Changes in Equity the unrealised loss of £199,000 for Benito's Hat (Pico's Limited), £180,000 for Solab Group Limited and £200,000 for Air Leisure Limited has been reclassified to capital reserve realised as it represents permanent diminution in the value of these investments.

There have not been any transaction costs in the year to 29 February 2020. Transaction costs are only incurred on sale of quoted investments.

Note 16 to the financial statements provides a detailed analysis of investments held at fair value through profit or loss.

10. Debtors

11. Creditors

On 5 April 2019, 2,069,945 Ordinary shares were issued for total consideration of £1,625,735. On 26 June 2019, 349,967 Ordinary shares were issued for total consideration of £274,374. On 11 December 2019 2,764,563 Ordinary shares were issued for a total consideration of £2,001,267.

On 31 July 2019, the Company bought back for cancellation 78,279 Ordinary shares.

On 6 September 2019, 1,334,399 Ordinary shares were issued for total consideration of £1,017,212.

All Ordinary shares are fully paid, rank pari passu and carry one vote per share.

Under the Articles of Association, a resolution for the continuation of the Company as a VCT will be proposed at the Annual General Meeting falling after the tenth anniversary of the last allotment (from time to time) of shares in the Company and thereafter at five-yearly intervals.

13. Net Asset Value per Share

The basic net asset value per Ordinary share is based on net assets of £17,453,046 (28 February 2019: £13,971,482) and on 24,862,968 Ordinary shares (28 February 2019: 18,422,373), being the number of Ordinary shares in issue at the end of the year.

14. Reconciliation of Net Loss before Tax to Cash Flow from Operating Activities 

15. Financial Commitments

At 29 February 2020, the Company did not have any financial commitments which had not been accrued for (2019: nil).

16. Financial Instruments

The Company's financial instruments comprise securities and cash and liquid resources that arise directly from the Company's operations.

The principal risks the Company faces in its portfolio management activities are:

• Market price risk

• Liquidity risk

The Company does not have exposure to foreign currency risk.

a) Market price risk

Market risk embodies the potential for losses and includes interest rate risk and price risk.

The management of market price risk is part of the investment management process. The portfolio is managed in accordance with policies in place as described in more detail in the Chairman's Statement and Investment Manager's Review (Qualifying Investments).

The Company's strategy on the management of investment risk is driven by the Company's investment objective as outlined above.Investments in unquoted companies and AIM-traded companies, by their nature, involve a higher degree of risk than investments in the main market. Some of that risk can be mitigated by diversifying the portfolio across business sectors and asset classes.

Interest is earned on cash balances and money market funds and is linked to the banks' variable deposit rates. The Board does not consider interest rate risk to be material. Interest rates arising on loan stock instruments is not considered significant as the main risk on these investments are credit risk and market price risk. The weighted average interest rate earned on the loan stock instruments as at 29 February 2020 was 9.7%.

At the year end, £96,498 loan stock interest was overdue.

An analysis of financial assets and liabilities, which identifies the risk of the Company's holding of such items, is provided. The Company's financial assets comprise equity, loan stock, cash and debtors. The interest rate profile of the Company's financial assets is given in the table below:

As at 29 February 2020 As at 28 February 2019

The variable rate is based on the banks' deposit rate and applies to cash balances held and the money market funds. The benchmark rate which determines the interest payments received on interest bearing cash balances is the Bank of England base rate, which was 0.75 per cent as at 29 February 2020.

Credit risk is considered to be part of market risk.

Where an investment is made in loan stock issued by an unquoted company, it is made as part of an overall equity and debt package. The recoverability of the debt is assessed as part of the overall investment process and is then monitored on an ongoing basis by the Investment Manager who reports to the Board on any recoverability issues.

Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the high credit quality of the brokers used. The Board monitors the quality of service provided by the brokers used to further mitigate this risk.

All the assets of the Company which are traded on AIM are held by Investec Wealth & Investment, the Company's custodian. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed or limited. The Board and the Investment Manager monitor the Company's risk by reviewing the custodian's internal control reports.

The Board considers that the value of investments in equity and loan stock instruments are sensitive to changes to trading performance and the fluctuations of wider public equity markets. Such changes affect the enterprise value of AIM listed and unquoted companies.

The sensitivity below has been applied to AIM listed investments with a 10% movement in share price and to unquoted securities valued with reference to market inputs such as multiples of earnings or revenue and discounted cash flows, with a 10% movement in such market input applied.

As at the 29 of February 2020, if the AIM listed investments share price had been 10% higher or lower with all other variables held constant, the increase or decrease on net assets at the year end would be £52,559.

As at the 29 of February 2020, if the unquoted securities had a 10% increase or decrease in the market input (due to the movement in the quoted securities) with all other variables held constant, the increase in net assets would be £274,908 and the decrease would be £275,063.

The combined total increase on net assets would be £327,467 (2019: £535,786) and total decrease would be £327,622 (2019: £700,403). The increases and decreases are based on the current portfolio value £14,309,364 (2019: £11,593,413). The variance of 10% is the Investment Managers assessment of reasonable possible change. The sensitivity analysis assumes the actual portfolio of investments held by the Company is symmetrically correlated to this overall movement in net assets. However, in reality unquoted companies have other factors which may influence the extent of the valuation change.

b) Liquidity risk

The Company's liquidity risk is managed on an ongoing basis by the Investment Manager. The Company's overall liquidity risks are monitored on a quarterly basis by the Board.

The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable and accrued expenses as they fall due.

The carrying value of fixed rate investments in unquoted companies held at 29 February 2020, which is analysed by expected maturity date, is as follows: