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31 Oct 2011 13:07
Investec Structured Products Calculus VCT plc
Half Yearly Report
for the six months ended 31 August 2011
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company's principal objectives for investors are to:
- invest in a portfolio of Venture Capital Investments and Structured Products that will provide investment returns sufficient to allow the Company to maximise annual dividends and an interim return by way of a special dividend or cash offer for shares on or before an interim return date;
- generate sufficient returns from a portfolio of Venture Capital Investments that will provide attractive long-term returns within a tax efficient vehicle beyond an interim return date;
- review the appropriate level of dividends annually to take account of investment returns achieved and future prospects; and
- maintain VCT status to enable qualifying investors to retain their income tax relief of up to 30 per cent. on the initial investment and receive tax-free dividends and capital growth.
Investment Policy
Asset allocation
It is intended that approximately 75 per cent. of the monies raised by the Company will be invested within 60 days in a portfolio of Structured Products. The balance will be used to meet initial costs and invested in cash or near cash assets (as directed by the Board) and will be available to invest in Venture Capital Investments and to fund ongoing expenses.
In order to qualify as a VCT, at least 70 per cent. of the Company's assets must be invested in Venture Capital Investments within approximately three years. Thus there will be a phased reduction in the Structured Products portfolio and corresponding build up in the portfolio of Venture Capital Investments to achieve and maintain this 70 per cent. threshold along the following lines:
Average Exposure per Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+ Structured Products and 85% 75% 35% 25% 25% 0%cash/near cashVenture Capital Investments 15% 25% 65% 75% 75% 100%
Note: the investment allocation set out above is only an estimate and the actual allocation will depend on market conditions, the level of opportunities and the comparative rates of returns available from Venture Capital Investments and Structured Products.
The combination of the Venture Capital Investments and the Structured Productswill be designed to produce ongoing capital gains and income that will besufficient to maximise both annual dividends for the first five years fromfunds being raised and an interim return by an interim return date by way of aspecial dividend or cash tender offer for shares. After the interim returndate, unless Investec Structured Products are requested to make furtherinvestments in Structured Products, the relevant fund will be left with aportfolio of Venture Capital Investments managed by Calculus Capital with aview to maximising long-term returns. Such returns will then be dependent,both in terms of amount and timing, on the performance of the Venture CapitalInvestments, but with the intention to source exits as soon as possible.The portfolio of Structured Products will be constructed with differentissuers and differing maturity periods to minimise risk and create adiversified portfolio. The Structured Products may also be collateralisedwhereby notes are issued by one issuer (such as Investec Bank plc) but withthe underlying investment risk being linked to more than one issuer (asapproved by the Board) reducing insolvency risks, creating diversity andpotentially increasing returns for shareholders. If the Company invests in acollateralised Structured Product, the amount of the exposure to an underlyingissuer will be taken into account when reviewing investments fordiversification. The maximum exposure to any one issuer (or underlying issuer)will be limited, in aggregate, to 15 per cent. of the assets of the Company atthe time of investment. Structured Products can and may be sold before theirmaturity date if required for the purposes of making Venture CapitalInvestments and Investec Structured Products have agreed to make a market inthe Structured Products, should this be required by the Company.The intention for the portfolio of Venture Capital Investments is to build adiverse portfolio of primarily established unquoted companies across differentindustries. In order to generate income and where it is felt it would enhanceshareholder return, investments may be structured to include loan stock and/orredeemable preference shares as well as ordinary equity. It is intended thatthe amount invested in any one sector and any one company will be no more thanapproximately 20 per cent. and 10 per cent. respectively of the VentureCapital Investments portfolio (in both cases at the date of the investment).
The Board and its Managers review the portfolio of investments on a regular basis to assess asset allocation and the need to realise investments to meet the Company's objectives or maintain VCT status. Where investment opportunities arise in one asset class which conflicts with assets held or opportunities in another asset class, the Board will make the investment/divestment decision.
Under its Articles of Association, the Company has the ability to borrow a maximum amount equal to 25 per cent. of the aggregate amount paid on all shares issued by the Company (together with any share premium thereon). The Board will consider borrowing if it is in the shareholders' interests to do so. In particular, because the Board intends to minimise cash balances, the Company may borrow on a short-term to medium-term basis (in particular, against Structured Products) for cashflow purposes and to facilitate the payment of dividends and expenses in the early years.
The Company will not vary the investment objective or the investment policy, to any material extent, without the approval of shareholders. The Company intends to be a generalist VCT investing in a wide range of sectors.
Risk diversification
The Board controls the overall risk of the Company. Calculus Capital will ensure the Company has exposure to a diversified range of Venture Capital Investments from different sectors. Investec Structured Products will ensure the Company has exposure to a diversified range of Structured Products. The Board believes that investment in these two asset classes provides further diversification.
Co-investment policy
Calculus Capital has a co-investment policy between its various funds wherebyinvestment allocations are generally offered to each party in proportion totheir respective funds available for investment, subject to: (i) a prioritybeing given to any of the funds in order to maintain their tax status; (ii)the time horizon of the investment opportunity being compatible with the exitstrategy of each fund; and (iii) the risk/reward profile of the investmentopportunity being compatible with the target return for each fund. The termsof the investments may differ between the parties. In the event of anyconflicts between the parties, the issues will be resolved at the discretionof the independent Directors, designated members and committees. It is notintended that the Company will co-invest with Directors or members of theCalculus Capital management team (including family members).In respect of the Venture Capital Investments, funds attributable to separateshare classes will co-invest (i.e. pro rata allocation per fund, unless one ofthe funds has a pre-existing investment where the incumbent fund will havepriority, or as otherwise approved by the Board). Any potential conflict ofinterest arising will be resolved on a basis which the Board believes to beequitable and in the best interests of all shareholders. A co-investmentpolicy is not considered necessary for the Structured Products.
INVESTMENT MANAGERS
Calculus Capital Limited has been appointed to manage the Venture Capital Investments portfolio of VCT Qualifying Investments.
Investec Structured Products (a trading name of Investec Bank plc) has beenappointed to manage the Structured Products portfolio of non VCT QualifyingInvestments.FINANCIAL REVIEWOrdinary Share Fund 6 Months to 13 Months to 7 Months to 31 August 2011 28 February 2011 31 August 2010 Total returnTotal return £(133,000) £308,000 £2,000
Total return per ordinary share (2.8p) 8.3p
0.1p RevenueNet loss after tax £(37,000) £(112,000) £(42,000)
Revenue return per ordinary share (0.8p) (3.0)p
(1.3)p As at 31 As at 28 As at 31 August February August 2011 2011 2010 Assets (investments valued at bidmarket prices)Net assets £4,450,000 £4,836,000 £3,657,000Net asset value ("NAV") per 93.9p 102.1p 94.6pordinary share Mid market quotationOrdinary shares 99.5p 99.5p 99.5p
Premium/(discount) to bid price 6.0% (2.5)%
5.2%NAVC Share Fund 6 Months to 31 August 2011* Total returnTotal return £(16,000)Total return per C share (0.8)p RevenueNet loss after tax £(21,000)Revenue return per C share (1.1)p As at 31 August 2011 Assets (investments valued at bid market prices)Net assets £1,806,000NAV per C share 93.5p Mid market quotationC shares 94.00pPremium to bid price NAV 0.5%
\* The C shares were issued in three tranches, on 1 April 2011, 5 April 2011 and 4 May 2011.
CHAIRMAN'S STATEMENT
I am pleased to present your Company's financial results for the six months ended 31 August 2011. This report marks the first nineteen months of the Company which has been a period of progress. In this period, a number of notable achievements occurred.
- Completion of the C share offer which raised £1.93 million.
- Payment of the first tax-free annual dividend of 5.25p per share to ordinary shareholders.
- Investment in a portfolio of Structured Products on behalf of the C Share Fund.
- Progress towards building a well-diversified portfolio of predominantly unquoted Qualifying Investments.
The Investec Structured Products Calculus VCT plc is a joint venture betweenInvestec Structured Products (part of Investec plc which is a member of theFTSE 100) and Calculus Capital Limited, and brings together both Managers'award-winning expertise in their respective fields of Structured Products andventure capital. A net total of £6.35 million has been raised to date, withyour Board and Managers committing over £1 million of this, demonstratingtheir confidence in the Company and the product offering. The C sharefundraising undertaken earlier in the year has increased the size of theCompany over which the annual running costs can be spread and will providegreater opportunities for diversification. Moreover, the Company charges someof the lowest annual management fees in the VCT sector.The past six months have been a time of unusually high volatility for stockmarkets and challenging economic conditions for business as many westerncountries struggle to come to terms with excessive debt burdens and lowgrowth. This can create attractive investment opportunities for those willingto take a medium-term view but it can sometimes seem a turbulent ride. I ampleased to say that your Company has continued to make good progress. As at 31August 2011, the unaudited net asset value per ordinary share was 93.9p, andthe unaudited net asset value per C share was 93.5p. The decline in the netasset value of the ordinary shares since the end of your Company's lastfinancial year in February reflects the ex-dividend value of the net assetsfollowing payment of the tax-free annual dividend in July, but also reflectsthe fall in FTSE 100 Index (on which the majority of the Structured Productsare based) during the period.
Structured Products Portfolio
Our non-qualifying investments are managed by Investec Structured Products,who to date have invested approximately £3.39 million in a range of StructuredProducts of varying durations and counterparties. Of this, £2.54 million isattributable to the Ordinary Share Fund and £850,000 is attributable to the CShare Fund. At a general meeting held on 4 August 2011, shareholders approvedan investment in a collateralised Structured Product issued by Investec Bankplc on behalf of the C Share Fund.
Venture Capital Investments
Calculus Capital manages the portfolio of Venture Capital Investments made bythe Company. It is intended that approximately 75 per cent. of the Company'sfunds will be invested over a three year period in a diversified portfolio ofholdings in unquoted VCT qualifying companies. In order to achieve this, therewill be a phased reduction in the Structured Products portfolio and acorresponding increase in the portfolio of Venture Capital Investments.Calculus Capital has made Venture Capital Investments in three unquotedcompanies to date, totalling approximately £1 million. Of this, approximately£900,000 is attributable to the Ordinary Share Fund and £90,000 isattributable to the C Share Fund. The Ordinary Share Fund and the C Share Fundare managed separately, although they both have the same investment remit and,therefore, both have very similar portfolios.During the period, several further investments were made on behalf of theOrdinary Share Fund. In March, an additional £50,000 was invested in TerrainEnergy Limited ("Terrain") as ordinary equity, followed by £300,000 inMicroEnergy Generation Services Limited ("MicroEnergy") during April.MicroEnergy is a company setup to acquire renewable, microgenerationfacilities, including (but not limited to) wind, anaerobic digestion, hydroand micro CHP (Combined Heat and Power). This investment was provided as£150,000 of ordinary equity and £150,000 in the form of long-term loan stockwith a coupon of 7 per cent.The first Venture Capital Investment was made on behalf of the C Share Fundduring August, when £90,000 was invested in Terrain. Half of this investmentwas provided as ordinary equity, with the other £45,000 provided as long-termloan stock with a coupon of 7 per cent. The recent investments in Terrain formpart of a fundraising programme intended to give the company visibility overits funding needs to meet development, appraisal and exploration commitmentsuntil the end of 2012.
A more detailed analysis of the investment portfolios can be found in the respective Investment Managers' Reviews that follow this statement.
Developments Since the Period End
The Company is in the process of completing an investment in Heritage House Media Limited which provides services to the domestic and inbound tourism industry, with particular emphasis on the heritage sector. Key brands are Hudson's and Open Britain. The Company is in negotiations on a number of other Qualifying Investments.
OutlookNotwithstanding recent Government initiatives, access to finance for smallerUK companies remains tight and valuations have reached more realistic levels,providing an attractive investment scenario for your Company. The Companycontinues to build a diversified portfolio of investments which we believewill deliver sustained long-term performance. Small companies are an importantsource of growth for the UK economy and we are seeing a number of interestingopportunities across a variety of sectors at the present time.Michael O'HigginsChairman31 October 2011INVESTMENT MANAGER'S REVIEW(QUALIFYING INVESTMENTS)Portfolio DevelopmentsCalculus Capital Limited manages the VCT's portfolio of QualifyingInvestments. It is intended, over a three year period, to invest approximately75 per cent. of the Company's funds in diversified portfolio of unquotedqualifying companies. In general, we prefer to take stakes of sufficient sizeto enable us to play a more influential role in helping the companies develop.Investments may be by way of loan stock and/or preference shares. Thisprovides income for the Company to help pay regular dividends and provides ameasure of risk mitigation.
The Ordinary Share Fund and the C Share Fund are managed separately although they both have the same investment remit and, therefore, both have very similar portfolios.
As at 31 August 2011, three Qualifying Investments had been made relating to the Ordinary Share Fund, in Terrain Energy Limited ("Terrain"), Lime Technology Limited ("Lime") and MicroEnergy Generation Services Limited ("MicroEnergy"). One Qualifying Investment had been made on behalf of the C Share Fund, in Terrain.
Terrain Energy Limited
Terrain holds a portfolio of oil and gas assets onshore in the UK. Its mainproducing well is at Keddington in Lincolnshire from which oil is shippedweekly by tanker to the Immingham oil refinery. The Company initially invested£250,000 in Terrain in July 2010, followed by another £50,000 of ordinaryequity in March 2011. Both of these investments were on behalf of the OrdinaryShare Fund. In August 2011, £90,000 was invested in Terrain on behalf of the CShare Fund. Half of this investment was provided as ordinary equity, with theother £45,000 provided as long-term loan stock with a coupon of 7 per cent.These recent investments form part of a fundraising programme intended to giveTerrain visibility over its funding needs to meet development, appraisal andexploration commitments until the end of 2012.Latest AuditedResults:Period ended Investment Ordinary C Share31 December 2010 Information Share Fund Fund Turnover £271,257 Total cost £300,000 £90,000Pre-tax loss £(158,185) Total valuation £307,000 £90,000Net assets Income recognised in £1,952,887 period £7,000 - Total voting rights* 2.49% 1.05%
Valuation basis: Fair value based on cost of recent investment supported by discounted cash flow
* Other funds managed by Calculus Capital have an interest in this company andhave a combined equity holding of 19.2 per cent. This follows the additionalinvestment in Terrain in August 2011.
Lime Technology Limited
Lime was founded in 2002 and is a leader in renewable lime and hemp basedbuilding products for the mainstream construction industry. At the time ofinvestment, Lime's main product was Tradical® Hemcrete® which is a negativecarbon bio-composite product comprised of hemp and a lime based binder. Thiswas supplied as raw materials for mixing on site. The very bad winter in2010/11 severely impacted drying on site. Consequently, the companyaccelerated its launch of Hembuild® which is supplied as precast panels tosite. Through its subsidiary, Hemp Technology, the company controls the hempsupply chain from seed to finished wall. Lime's products are being used in theconstruction of Marks & Spencer's flagship Cheshire Oaks store and havepreviously been used in the construction of 16 houses at David Cameron'sconstituency at Stanton Harcourt, an Adnams distribution centre and in atemperature controlled warehouse for the Wine Society. The Company hassubscribed under two rights issues during the year to maintain its percentageinvestment.
As a small company, Lime is exempt from filing full accounts.
Latest AuditedResults:Period ended Ordinary4 November 2010 Investment Information Share Fund Total cost £304,000Net assets £1,358,275 Total valuation £280,000 Income recognised in period £9,000 Total voting rights* 0.60%
Valuation basis: Fair value based on cost of recent investment
* Other funds managed by Calculus Capital have an interest in this company and have a combined equity holding of 15.59 per cent.
MicroEnergy Generation Services Limited
In early April, £300,000 was invested in MicroEnergy on behalf of the OrdinaryShare Fund. MicroEnergy is a company set up to acquire renewable,microgeneration facilities, including (but not limited to) wind, anaerobicdigestion, hydro and micro CHP (Combined Heat and Power). The investment wasprovided as £150,000 of ordinary equity and £150,000 in the form of long-termloan stock with a coupon of 7 per cent. MicroEnergy has acquired five 5kW windturbines to date in East Anglia and has plans to acquire approximatelythirty-five by 5 April 2012.As a relatively new company, MicroEnergy has not yet filed statutory accounts. OrdinaryLatest Audited Results: Investment Information Share Fund No statutory accounts have been Total cost £300,000filed Total valuation £300,000 Income recognised in period - Total voting rights* 8.67%
Valuation basis: Fair value based on cost of recent investment
* Other funds managed by Calculus Capital have interest in this company and have a combined equity holding of 9.89 per cent.
Developments Since the Period End
The Company is in the process of completing and investment in Heritage House Media Limited with provides services to the domestic and inbound tourism industry with particular emphasis on the heritage sector. Key brands are Hudson's and Open Britain.
Outlook
The Investment Manager believes that the current market remains attractive forinvestment as access to finance for smaller UK companies remains tight andvaluations have reached more realistic levels. Although the UK economicoutlook remains uncertain, we are seeing a number of interesting opportunitiesacross a variety of sectors. Any improvement to the economic climate willassist small companies which are an important source of growth for the UKeconomy.Calculus Capital Limited31 October 2011INVESTMENT MANAGER'S REVIEW(STRUCTURED PRODUCTS)
In line with the Company's strategy set out the original Offer documents, alarge percentage of the initial cash raised has been used to build a portfolioof Structured Products. The portfolio of Structured Products has beenconstructed with different issuers and differing maturity periods to minimiserisk and create a diversified portfolio. The FTSE 100 Initial Index Levels forthese investments range from 4,805.75 to 5,718.13.Except for the RBS Autocallable product, all of the Structured Productsinvestments to date have potential returns that are by way of a fixed amountpayable as long as the Final Index Level is higher than the Initial IndexLevel (e.g. for the Abbey National Treasury Services Structured Product thefixed amount is 85 per cent. (plus 100 per cent. of the initial notionalamount) if the Final Index Level is higher than the Initial Index Level of4,940.68). All of the products have capital at risk on a one-to-one basis ifthe FTSE 100 falls by more that 50 per cent. and fails to recover at maturity.The RBS Autocallable will mature early with a fixed payout of 10.5 per cent.per annum if, on any anniversary of the strike date, the closing level of theIndex is above the Initial Index Level. Capital is at risk on a one-to-onebasis if the FTSE 100 falls by more than 50 per cent. and fails to recover atmaturity.At the end of the reporting period the FTSE 100 closing level was 5,394.53.The amount invested in Structured Products during the period was £950,000, ofwhich £100,000 was invested in the Ordinary Share Fund and the rest in the CShare Fund. The total amount to date invested in Structured Products stands at£2,543,000 for the ordinary shares and £850,000 for the C shares, representing56 per cent. and 47 per cent. of the net funds raised respectively. As at 31August 2011 the Structured Products portfolio was valued at £2,928,000 for theordinary shares and £861,000 for the C shares. At the time of writing, theFTSE 100 closing level was 5,488.65 (close 21 October 2011) which has had asmall positive effect on the performance of the Structured Products portfolio.
The Investment Manager constantly reviews the portfolio of investments to assess asset allocation and the need to realise investments.
Ordinary Share Fund Structured Products Portfolio as at 31 August 2011
FTSE 100 Initial
Price as at Valuation as Return/
Maturity Index Notional Purchase 31 August at 31 August CapitalIssuer Strike Date Date Level Investment Price Cost 2011 2011 at Risk ("CAR")†162.5% if FTSE 100* higher; CAR ifThe Royal FTSE 100Bank of falls byScotland moreplc 05/05/2010 12/05/2015 5,341.93 £275,000 £0.96 £264,000 £1.0309 £283,498 than 50% 185% if FTSE 100* higher; CAR if FTSE 100 falls byInvestec moreBank plc 14/05/2010 19/11/2015 5,262.85 £500,000 £0.98 £489,550 £1.1349 £567,429 than 50% 185% if FTSE 100* higher; CAR ifAbbey FTSE 100National falls byTreasury moreServices 25/05/2010 18/11/2015 4,940.68 £350,000 £0.99 £346,430
£1.2373 £433,055 than 50%
The above investments have been designed to meet the 43.75p per ordinary shareinterim return by 14 December 2015. A total of £1,099,980 (24.72 per cent. ofnet monies raised) was invested in the above Structured Products. Assuming noissuer defaults and if the FTSE 100 Final Index Level is higher than theInitial Index Level, then these investments will return £2,019,375, equivalentto 46.62p per ordinary share. FTSE 100 Initial Price as at Valuation as Return/ Maturity Index Notional Purchase 31 August at 31 August CapitalIssuer Strike Date Date Level Investment Price Cost 2011 2011 at Risk ("CAR")†137% if FTSE 100* higher; CAR if FTSE 100 falls byNomura Bank more thanInternational 28/05/2010 20/02/2013 5,188.43 £350,000 £0.98 £343,000 £1.1455 £400,925 50% 134% if FTSE 100* higher; CAR if FTSEMorgan 100 falls byStanley more thanInternational 10/06/2010 17/12/2012 5,132.50 £500,000 £1.00 £500,000 £1.1452 £572,575 50% 125.1% if FTSE 100* higher; CAR if FTSE 100 falls by more thanHSBC Bank plc 01/07/2010 06/07/2012 4,805.75 £500,000 £1.00 £500,000 £1.1533 £576,650 50% Autocallable 10.5% p.a.;The Royal CAR if FTSEBank of 100 fallsScotland more thanplc** 18/03/2011 20/03/2017 5,718.13 £50,000 £1.00 £50,000 £0.93 £46,315 50% 126% if FTSE 100* higher;Abbey CAR if FTSENational 100 fallsTreasury more thanServices** 03/08/2011 05/02/2014 5,584.51 £50,000 £1.00 £50,000 £0.96 £48,010 50%
The above investments are aimed to provide additional return as dividends. These investments may be sold prior to maturity if it is deemed that a greater return can be made by Calculus Capital investing in Qualifying Investments.
C Share Fund Structured Products Portfolio as at 31 August 2011
FTSE 100 Return/ Initial
Price as at Valuation as Capital
Maturity Index Notional Purchase 31 August at 31 August at RiskIssuer Strike Date Date Level Investment Price Cost 2011 2011 ("CAR")†182% if FTSE 100* higher; CAR if FTSE 100 fallsInvestec more than
Bank plc ** 05/08/2011 10/03/2017 5,246.99 £450,000 £1.00 £450,000
£1.0739 £483,237 50%
The above Investec Structured Product investment in the C Share Fund(£450,000) is a collateralised product. The collateral comprises a portfolioof securities issued by each of HSBC Bank plc (Aa2), Nationwide BuildingSociety (A2), Santander UK plc (A1), The Royal Bank of Scotland plc (A2) andLloyds TSB Bank plc (A1), and/or cash and/or UK government debt (Moody'sRatings as at 21 October 2011 in brackets). Insolvency risk to Investec isreplaced with a risk spread across these named institutions.A total of £450,000 (25.92 per cent. of net assets) was invested in the aboveStructured Product of the C Share Fund. Assuming no issuer defaults and if the FTSE 100 FinalIndex Level is higher than the Initial Index Level, then this investment willreturn £819,000, equivalent to 42.4p per C share. Further investments into theStructured Products portfolio will be required to produce an interim return of47.5p per C share by 14 March 2017. FSTE 100 Return/ Initial
Price as at Valuation as Capital
Maturity Index Notional Purchase 31 August at 31 August at RiskIssuer Strike Date Date Level Investment Price Cost 2011 2011 ("CAR")†Autocallable 10.5% p.a.;The Royal CAR if FTSEBank of 100 fallsScotland more thanplc ** 18/03/2011 20/03/2017 5,718.13 £200,000 £1.00 £200,000
£0.9263 £185,260 50% 126% if FTSE 100* higher;Abbey CAR if FTSENational 100 fallsTreasury more than
Services** 03/08/2011 05/02/2014 5,584.51 £200,000 £1.00 £200,000
£0.9602 £192,040 50%
The above investments target an average return of 9.58 per cent. per annum. These investments may be sold prior to maturity if it is deemed that a greater return can be made by Calculus Capital by investing in Qualifying Investments.
* The Final Index Level is calculated using `averaging', meaning that we takethe average of the closing levels of the FTSE 100 on each business day overthe 2 - 6 months of the Structured Product plan term (the length of theaveraging period may differ for each plan). The use of averaging to calculatethe return can reduce adverse effects of a falling market or sudden marketfalls shortly before maturity. Equally, it can reduce the benefits of anincreasing market or sudden market rises shortly before maturity.†All of the investments in Structured Products in respect of the two fundswill either be capital protected or capital at risk on a one-to-one basiswhere the FTSE 100 Index falls by more than 50 per cent. and the Final IndexLevel is below the Initial Index Level. If the FTSE 100 Index does fall bymore than 50 per cent. at any time during the investment period and fails torecover at maturity, the capital will be at risk on a maximum one-to-one basis(Capital at Risk ("CAR")) (i.e. if the FTSE 100 Index falls by more than 50per cent. during the investment period and on maturity is down 25 per cent.,capital within that Structured Product will be reduced by 25 per cent.).
** These investments have been purchased during the 2011-2012 financial year.
Investec Structured Products31 October 2011INVESTMENT PORTFOLIO AS AT 31 AUGUST 2011- ORDINARY SHARE FUNDSector % Structured Products 69%Unquoted - Qualifying Investments 21%Unquoted - other non-QualifyingInvestments 10% 100%Net Assets % Structured Products 66%Unquoted - loan stock 13%Unquoted - ordinary and preference 7%
shares
Unquoted - other non-QualifyingInvestments 10%Net current assets 4% 100% Nature of Book Cost Valuation % of Net % ofCompany Business £'000 £'000 Assets Portfolio Structured ProductsInvestec Bank plc Banking 490 567 13% 13%The Royal Bank ofScotland plc Banking 314 329 7% 8%Abbey NationalTreasury Services Banking 396 481 11% 11%Nomura Bank Banking 343 401 9% 10%InternationalMorgan StanleyInternational Banking 500 573 13% 13%HSBC Bank plc Banking 500 577 13% 14% Total Structured 2,543 2,928 66% 69%Products QualifyingInvestmentsTerrain Energy Oil and gas 300 307 7% 7%Limited production Lime TechnologyLimited Construction 304 280 6% 7%MicroEnergyGeneration ServicesLimited Energy 300 300 7% 7% Total QualifyingInvestments 904 887 20% 21% Other Non-QualifyingInvestmentsFidelity Liquidity Liquidity fund 81 81 2% 2%FundGoldman SachsLiquidity Fund Liquidity fund 50 50 1% 1%Scottish Widows Liquidity Fund Liquidity fund 314 314 7% 7% Total OtherNon-QualifyingInvestments 445 445 10% 10% Total investments 3,892 4,260 96% 100% Net current assetsless creditors dueafter one year 190 4% Net assets 4,450 100%INVESTMENT PORTFOLIO AS AT 31 AUGUST 2011- C SHARE FUNDSector % Structured Products 51%Unquoted - Qualifying Investments 5%Unquoted - other non-QualifyingInvestments 44% 100%Net Assets % Structured Products 48%Unquoted - loan stock 2%Unquoted - ordinary and preference 2%sharesUnquoted - other non-QualifyingInvestments 41%Net current assets 7% 100% Nature of Book Cost Valuation % of Net % ofCompany Business £'000 £'000 Assets Portfolio Structured ProductsInvestec Bank plc Banking 450 484 27% 29%The Royal Bank ofScotland plc Banking 200 185 10% 11%Abbey NationalTreasury Services Banking 200 192 11% 11% Total Structured 850 861 48% 51%Products QualifyingInvestmentsTerrain Energy Oil and gasLimited production 90 90 4% 5% Total Qualifying 90 90 4% 5%Investments Other Non-QualifyingInvestmentsFidelity Liquidity Liquidity fund 251 251 14% 15%FundGoldman SachsLiquidity Fund Liquidity fund 100 100 6% 6%Scottish WidowsLiquidity Fund Liquidity fund 382 382 21% 23% Total OtherNon-QualifyingInvestments 733 733 41% 44% Total investments 1,673 1,684 93% 100% Net current assetsless creditors dueafter one year 122 7% Net assets 1,806 100%
INTERIM MANAGEMENT REPORT AND DIRECTORS' RESPONSIBILITY STATEMENT
Interim Management Report
The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chairman's Statement and Investment Managers' Reviews.
The principal risks facing the Company are substantially unchanged since the date of the Annual Report and Accounts for the period ended 28 February 2011 and continue to be as set out in that report.
Risks faced by the Company include, but are not limited to, loss of approval as a venture capital trust and other regulatory breaches, risks of making Venture Capital Investments, risks attaching to investment in Structured Products, liquidity/marketability risk, changes in legislation/taxation, engagement of third party advisers, C shares versus ordinary shares, market price risk and credit risk.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements has been prepared in accordance with the Statement on Half Yearly Financial Reports issued by the UK Accounting Standards Board and gives a true and fair view of the assets, liabilities and financial position of the Company; and
- this Half Yearly Financial Report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication ofimportant events that have occurred during the first six months of thefinancial year and their impact on the condensed set of financial statements;and a description of the principal risks and uncertainties for the remainingsix months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so.
This Half Yearly Financial Report was approved by the Board of Directors on 31 October 2011 and the above responsibility statement was signed on its behalf by Michael O'Higgins, Chairman.
CONDENSED INCOME STATEMENTFOR THE PERIOD FROM 1 MARCH 2011 TO 31 AUGUST 2011 (UNAUDITED) 6 Months Ended 7 Months Ended 13 Months Ended 31 August 2011 31 August 2010 28 February 2011* Revenue Capital Revenue Capital Revenue Capital Return Return Total Return Return Total Return Return Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Ordinary Share Fund Investment holding(losses)/gains - (78) (78) - (55) (55) - 446 446Income 23 - 23 5 - 5 20 - 20Investmentmanagement fee (6) (18) (24) (4) (11) (15) (9) (26) (35)Other operatingexpenses (54) - (54) (43) - (43) (123) - (123) (Loss)/profit onordinary activitiesbefore taxation (37) (96) (133) (42) 44 2 (112) 420 308 Taxation onordinaryactivities(Note 3) - - - - - - - - - (Loss)/profit onordinary activitiesafter taxation (37) (96) (133) (42) 44 2 (112) 420 308 Return per ordinaryshare - basic (Note (0.8)p (2.0)p (2.8)p (1.3)p 1.4p 0.1p (3.0)p 11.3p 8.3p2) C Share Fund Investment holding - 11 11gains Income 3 - 3Investment management fee (2) (6) (8)Other operatingexpenses (22) - (22) Loss/(profit) onordinary activitiesbefore taxation (21) 5 (16) Taxation onordinaryactivities (Note 3) - - - Loss/(profit) onordinary activitiesafter taxation (21) 5 (16) Return per Cshare - basic (Note 2) (1.1)p 0.3p (0.8)p* These figures are audited.
The total column of these statements represent the Income Statement of the Ordinary Share Fund and the C Share Fund.
The supplementary revenue return and capital return columns are both preparedin accordance with the Association of Investment Companies ("AIC") Statementof Recommended Practice ("SORP").
No operations were acquired or discontinued during the period.
All items in the above statement derive from continuing operations.
The notes form an integral part of these Accounts.
6 Months Ended 7 Months Ended 13
Months Ended
31 August 2011 31 August 2010 28
February 2011*
Revenue Capital Revenue Capital Revenue
Capital
Return Return Total Return Return Total Return
Return Total
£'000 £'000 £'000 £'000 £'000 £'000
£'000 £'000 £'000
Total Investment holding(losses)/gains - (67) (67) - 55 55 - 446 446Income 26 - 26 5 - 5 20 - 20Investmentmanagement fee (8) (24) (32) (4) (11) (15) (9) (26) (35)Other operatingexpenses (76) - (76) (43) - (43) (123) - (123) (Loss)/profit onordinary activitiesbefore taxation (58) (91) (149) (42) 44 2 (112) 420 308 Taxation onordinaryactivities (Note 3) - - - - - - - - - (Loss)/profit onordinary activitiesafter taxation (58) (91) (149) (42) 44 2 (112) 420 308 Return per ordinaryshare - basic (Note (0.8)p (2.0)p (2.8)p 1.3p 1.4p 0.1p (3.0)p 11.3p 8.3p2) Return perC share - basic (1.1)p 0.3p (0.8)p(Note 2)
* These figures are audited.
The total column of this statement represents the Company's Income Statement.
The supplementary revenue return and capital return columns are both preparedin accordance with the Association of Investment Companies ("AIC") Statementof Recommended Practice ("SORP").
No operations were acquired or discontinued during the period.
All items in the above statement derive from continuing operations.
The notes form an integral part of these Accounts.
CONDENSED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS FOR THE PERIOD FROM 1 MARCH 2011 TO 31 AUGUST 2011 (UNAUDITED)
Share Capital Capital Share Premium Special Reserve Reserve Revenue Capital Account Reserve Realised Unrealised Reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Ordinary Share Fund For the 6 month period to 31 August20111 March 2011 47 752 3,729 (26) 446 (112) 4,836Loss for the period - - - (18) (78) (37) (133)Expenses of share issues - (4) - - - - (4)Dividends paid (Note 8) - - (249) - - - (249) 31 August 2011 47 748 3,480 (44) 368 (149) 4,450 For the 7 month period to 31 August20101 February 2010 - - - - - - -(Loss)/gain for the period - - - (11) 55 (42) 2
Issue of redeemable non-voting 50 - - - - - 50shares Redemption of redeemable non-voting (50) - - -
- - (50)sharesIssue of ordinary shares 39 3,829 - - - - 3,868Expenses of share issues - (213) - - - - (213) 31 August 2010 39 3,616 - (11) 55 (42) 3,657 For the 13 month period to28 February 2011*1 February 2010 - - - - - - -(Loss)/gain for the period - - - (26) 446 (112) 308
Issue of redeemable non-voting 50 - - - - - 50sharesRedemption of redeemable non-voting (50) - - - - - (50)sharesIncrease in share capital in issue 47 4,740 - - - - 4,787Expenses of share issues - (259) - - - - (259)Share premium cancelled during - (3,729) 3,729 -
- - -period 28 February 2011 47 752 3,729 (26) 446 (112) 4,836 C Share Fund For the 6 month period to 31 August20111 March 2011 - - - - - - -(Loss)/gain for the period - - - (6) 11 (21) (16)
Increase in share capital in issue 19 1,912 - -
- - 1,931Expenses of share issues - (109) - - - - (109) 31 August 2011 19 1,803 - (6) 11 (21) 1,806Total For the 6 month period to 31 August20111 March 2011 47 752 3,729 (26) 446 (112) 4,836Loss for the period - - - (24) (67) (58) (149)
Increase in share capital issue 19 1,912 - -
- - 1,931Expenses of share issues - (113) - - - - (113)Dividends paid (Note 8) - - (249) - - - (249) 31 August 2011 66 2,551 3,480 (50) 379 (170) 6,256 For the 7 month period to 31 August20101 February 2010 - - - - - - -Loss/(gain)for the period - - - (11) 55 (42) 2
Issue of redeemable non-voting 50 - - - - - 50sharesRedemption of redeemable non-voting (50) - - -
- - (50)sharesIssue of ordinary shares 39 3,829 - - - - 3,868Expenses of share issues - (213) - - - - (213) 31 August 2010 39 3,616 - (11) 55 (42) 3,657 For the 13 month period to28 February 2011*1 February 2010 - - - - - - -(Loss)/gain for the period - - - (26) 446 (112) 308
Issue of redeemable non-voting 50 - - - - - 50sharesRedemption of redeemable non-voting (50) - - - - - (50)shares Increase in share capital in issue 47 4,740 - - - - 4,787Expenses of share issues - (259) - - - - (259)Share premium cancelled during - (3,729) 3,729 -
- - -period 28 February 2011 47 752 3,729 (26) 446 (112) 4,836* These figures are audited.
The notes form an integral part of these Accounts.
CONDENSED BALANCE SHEETAS AT 31 AUGUST 2011 (UNAUDITED) 31 August 31 August 28 February 2011 2010 2011* Note £'000 £'000 £'000 Ordinary Share Fund Fixed assets
Investments at fair value through 4 4,260 2,748
4,488profit or loss Current assetsDebtors 302 157 214Cash at bank and on deposit 147 911 326 449 1,068 540 Creditors: amounts falling duewithin one yearCreditors (141) (141) (176) Due to C Share Fund (100) - - Net current assets 208 927 364 Non-current liabilitiesIFA trail commission (18) (18) (16) Total net assets 4,450 3,657 4,836 Capital and reservesCalled-up share capital 7 47 39 47Share premium account 748 3,616 752Special reserve 3,480 - 3,729
Capital reserve - unrealised 368 55
446Capital reserve - realised (44) (11) (26)Revenue reserve (149) (42) (112) Total shareholders' funds 4,450 3,657 4,836
Net asset value per ordinary share 5 93.9p 94.6p
102.1p 31 August 2011 Note £'000 C Share Fund Fixed assetsInvestments at fair value through 4 1,684profit or loss Current assetsDebtors 55Cash at bank and on deposit 29 84 Creditors; amounts falling duewithin one yearCreditors (51) Due from Ordinary Share Fund 100 Net current assets 133 Non-current liabilitiesIFA trail commission (11) Total net assets 1,806 Capital and reservesCalled-up share capital 7 19Share premium account 1,803Special reserve -Capital reserve - unrealised 11Capital reserve - realised (6)Revenue reserve (21) Total shareholders' funds 1,806 Net asset value per C share 5 93.5p 31 August 31 August 28 February 2011 2010 2011* Note £'000 £'000 £'000 Total Fixed assets
Investments at fair value through 4 5,944 2,748
4,488profit or loss Current assetsDebtors 357 157 214Cash at bank and on deposit 176 911 326 533 1,068 540 Creditors: amounts falling duewithin one yearCreditors (192) (141) (176) Net current assets 341 927 364 Non-current liabilitiesIFA trail commission (29) (18) (16) Total net assets 6,256 3,657 4,836 Capital and reservesCalled-up share capital 7 66 39 47Share premium account 2,551 3,616 752Special reserve 3,480 - 3,729
Capital reserve - unrealised 379 55
446Capital reserve - realised (50) (11) (26)Revenue reserve (170) (42) (112) Total shareholders' funds 6,256 3,657 4,836
Net asset value per ordinary share 5 93.9p 94.6p
102.1p Net asset value per C share 5 93.5p* These figures are audited.
The notes form an integral part of these Accounts.
CONDENSED CASH FLOW STATEMENTFOR TO THE PERIOD FROM 1 MARCH 2011 TO 31 AUGUST 2011 (UNAUDITED) 6 Months 7 Months 13 Months Ended Ended Ended 31 August 31 August 28 February 2011 2010 2011* Note £'000 £'000 £'000 Ordinary Share Fund Operating activitiesInvestment income received 10 - 7Deposit interest received 2 3 6Investment management fees (23) - (24)Other cash payments (64) (54) (169)
Cash expended from operations 6 (75) (51)
(180)
Cash flow from investing activitiesPurchase of investments (455) (2,693) (4,042)Sale of investments 605 - - Net cash inflow/(outflow) frominvesting activities 150 (2,693)
(4,042)
Net cash inflow/(outflow) before 75 (2,744)
(4,222)
financing
Cash flow from financing activitiesEquity dividend paid 8 (249) -
-
Redeemable non-voting shares issued - 50
50
Redemption of redeemable non-voting - (50)
(50)sharesShares issued - 3,868 4,787Expenses of share issues (5) (213) (239) Net cash (outflow)/inflow fromfinancing activities (254) 3,655
4,548
(Decrease)/increase in cash at bankand on deposit (179) 911 326 C Share Fund Operating activitiesInvestment income received 1Other cash payments (155) Cash expended from operations 6 (154) Cash flow from investing activitiesPurchase of investments (1,673) Net cash outflow before financing (1,827) Cash flow from financing activitiesRedeemable non-voting shares issued 1,931Expenses of share issues (75) Net cash inflow from financing (1,856)
activities
Increase in cash at bank and ondeposit 29 Total Operating activitiesInvestment income received 11 - 7Deposit interest received 2 3 6Investment management fees (23) - (24)Other cash payments (219) (54) (169) Cash expended from operations 6 (229) (51) (180) Cash flow from investing activitiesPurchase of investments (2,128) (2,693) (4,042)Sale of investments 605 - -
Net cash outflow from investing (1,523) (2,693)
(4,042)
activities
Net cash outflow before financing (1,752) (2,744)
(4,042)
Cash flow from financing activitiesEquity dividend paid (249) -
-
Redeemable non-voting shares issued - 50
50
Redemption of redeemable non-voting - (50)
(50)sharesShares issued 1,931 3,868 4,787Expenses of share issues (80) (213) (239)
Net cash inflow from financing 1,602 3,655
4,548
activities
(Decrease)/increase in cash at bankand on deposit (150) 911 326* These figures are audited.
The notes form an integral part of these Accounts.
CONDENSED NOTES TO THE ACCOUNTS
1. Nature of Financial Information
Basis of accounting
These Accounts have been prepared under the historical cost convention, exceptfor the valuation of financial assets at fair value through profit or loss, inaccordance with UK Generally Accepted Accounting Practice ("UK GAAP"). TheseAccounts cover the six month period ended 31 August 2011. The comparativescover the seven month period from incorporation on 1 February 2010 to 31August 2010, and the thirteen month period from 1 February 2010 to 28 February2011.
In determining the analysis of total income and expenses as between capital return and revenue return, the Directors have followed the guidance contained in the AIC SORP, as revised in 2009, and on the assumption that the Company maintains VCT status.
The Accounts are prepared on the basis of the accounting policies set out in the Annual Report and Accounts for the period ended 28 February 2011.
The financial information contained in this report does not constitute full statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the six months to 31 August 2011 and the period to 31 August 2010 has not been audited or reviewed by the Company's Auditors pursuant to the Auditing Practices Board guidance on such reviews.
The information for the period ended 28 February 2011 has been extracted from the latest published Annual Report and Accounts, which have been filed with the Registrar of Companies. The report of the Auditors on those Accounts contained no qualification or statement under Section 498(2) or (3) of the Companies Act 2006.
Going concern
After making enquiries, and having reviewed the portfolio, balance sheet andprojected income and expenditure for the next twelve months, the Directorshave a reasonable expectation that the Company has adequate resources tocontinue in operation for the foreseeable future. The Directors have thereforeadopted the going concern basis in preparing these Accounts.
2. Return per Share
6 Months Ended 7 Months Ended 13 Months Ended 31 August 2011 31 August 2010 28 February 2011 Revenue Capital Total Revenue Capital Total Revenue Capital Total pence pence pence pence pence pence pence pence pence Return perordinary share (0.8) (2.0) (2.8) (1.3) 1.4 0.1 (3.0) 11.3 8.3 Return perC share (1.1) 0.3 (0.8)Ordinary sharesRevenue return per ordinary share is based on the net revenue loss on ordinaryactivities after taxation of £37,000 (31 August 2010: £42,000; 28 February2011: £112,000) and on 4,738,463 ordinary shares (31 August 2010: 3,121,857;28 February 2011: 3,721,530), being the weighted average number of ordinaryshares in issue during the period.Capital return per ordinary share is based on the net capital loss for theperiod of £96,000 (31 August 2010: £44,000 gain; 28 February 2011: £420,000gain) and on 4,738,463 ordinary shares (31 August 2010: 3,121,857; 28 February2011: 3,721,530), being the weighted average number of ordinary shares inissue during the period.
Total return per ordinary share is based on the net loss on ordinary activities for the period of £133,000 (31 August 2010: £2,000 gain; 28 February 2011: £308,000 gain) and on 4,738,463 ordinary shares (31 August 2010: 3,121,875; 28 February 2011: 3,721,530), being the weighted average number of ordinary shares in issue during the period.
C shares
Revenue return per C share is based on the net revenue loss on ordinary activities after taxation of £21,000 and on 1,904,924 C shares, being the weighted average number of C shares in issue during the period.
Capital return per C share is based on the net capital gain for the period of £5,000 and on 1,904,924 C shares, being the weighted average number of C shares in issue during the period.
Total return per C share is based on the total loss for the period of £16,000 and on 1,904,924 C shares, being the weighted average number of C shares in issue during the period.
3. Taxation on Ordinary Activities
The estimated effective tax rate at the year end is 0% for both share funds. This remains unchanged from the prior period.
4. Investments at Fair Value through Profit or Loss
31 August 31 August 28 February 2011 2010 2011 £'000 £'000 £'000 Ordinary Share Fund Investment portfolio summaryInvestments in Structured 2,928 2,498 2,882ProductsUnquoted investments 887 250 556Other investments 445 - 1,050 4,260 2,748 4,488 C Share Fund Investment portfolio summaryInvestments in Structured 861ProductsUnquoted investments 90Other investments 733 1,684 Total Investment portfolio summaryInvestments in Structured 3,789 2,498 2,882ProductsUnquoted investments 977 250 556Other investments 1,178 - 1,050 5,944 2,748 4,488
5. Net Asset Value per Share
31 August 31 August 28 February 2011 2010 2011 pence pence PenceOrdinary shares of 1 pence 93.9 94.6 102.1each C shares of 1 pence each 93.5
The basic net asset value per ordinary share is based on net assets of £4,450,000 (31 August 2010: £3,657,000; 28 February 2011: £4,836,000) and on 4,738,463 ordinary shares (31 August 2010: 3,867,917; 28 February 2011: 4,738,463), being the number of ordinary shares in issue at the period end.
The basic net asset value per C share is based on net assets of £1,806,000 and on 1,931,095 C shares, being the number of C shares in issue at the period end.
6. Reconciliation of Net (Loss)/Profit before Tax to Cash Expended fromOperating Activities 31 August 31 August 28 February 2011 2010 2011 £'000 £'000 £'000 Ordinary Share Fund (Loss)/profit on ordinary activities (133) 2 308before taxationLosses/(gains) on investments 78 (55) (446)Interfund receipt (2) - -Increase in debtors (85) (159) (214)Increase in creditors 67 161 172
Cash expended from operating activities (75) (51) (180)
C Share Fund
Loss on ordinary activities before (16)taxationGains on investments (11)Interfund payment 2Increase in debtors (155)Increase in creditors 26
Cash expended from operating activities (154)
Total
(Loss)/profit on ordinary activities (149) 2 308 before taxation Losses/(gains) on investments
67 (55) (446)Increase in debtors (140) (159) (214)(Decrease)/increase in creditors (7) 161 172
Cash expended from operating activities (229) (51) (180)
7. Called-up Share Capital 31 August 2011 Number £'000 Ordinary shares of 1p each1 March 2011 4,738,463 47Shares issued in period - - 4,738,463 47The Ordinary Share Fund had 3,867,917 shares in issue (£39,000) on 31 August2010.C shares of 1p each1 March 2011 - -Shares issued in period 1,931,095 19 1,931,095 19
An offer for subscription for C shares of 1p each was launched in January 2011 and the shares were issued in April and May 2011.
8. Dividends
For the period to 28 February 2011 the Ordinary Share Fund declared a final dividend of 5.25p per ordinary share on 4,738,463 shares amounting to £248,769. The dividend was paid on 29 July 2011 to ordinary shareholders on the register at 3 June 2011.
9. Related Party TransactionsInvestec Structured Products is a related party in respect of its appointmentas an investment manager to the Company and is entitled to a performanceincentive fee. Investec Structured Products will receive an arrangement fee of0.75 per cent. of the amount invested in each Structured Product. Thisarrangement fee shall be paid to Investec Structured Products by the issuer ofthe relevant Structured Product. No arrangement fee will be paid to InvestecStructured Products in respect of any decision to invest in Investec-issuedStructured Products. Investec Structured Products has agreed not to earn anannual management fee from the Company.As at 31 August 2011, £81,000 (31 August 2010: £67,000; 28 February 2011:£81,000) was payable to Investec Structured Products in relation to theinitial fee of 5 per cent. of the gross funds raised pursuant to the originalordinary share offer. £22,000 was payable to Investec Structured Products inrelation to the initial fee of 5 per cent. of the gross funds raised pursuantto the C share offer. In addition, £230,000 (31 August 2010: £128,000; 28February 2011: £185,000) was owed to the Ordinary Share Fund by InvestecStructured Products as claw back of costs in excess of the agreed expenses capof 3 per cent. £33,000 was owed to the C Share Fund.Calculus Capital is regarded as a related party in respect of its appointmentas an investment manager to the Company. For the period ended 31 August 2011,fees of £32,000 (31 August 2010: £15,000; 28 February 2011: £35,000) werepayable to Calculus Capital, of which £20,000 (31 August 2010: £15,000; 28February 2011: £10,000) were outstanding as at 31 August 2011. CalculusCapital is also entitled to a performance incentive fee.
John Glencross, a Director of the Company, has an interest in Calculus Capital and is a director of Terrain Energy Limited and Lime Technology Limited, companies in which the Company has invested.
Calculus Capital receives an annual fee from Terrain Energy Limited for theprovision of John Glencross as a director, as well as an annual monitoring feewhich also covers the provision of certain administrative support services. Inthe period ended 31 August 2011, the amount paid to Calculus Capital which wasattributable to the investment made by the Company was £4,200 (excluding VAT)(31 August 2010: £nil; 28 February 2011: £2,713).Calculus Capital also receives an annual fee from Lime Technology Limited forthe provision of John Glencross as a director, as well as an annual monitoringfee. In the period ended 31 August 2011, the amount paid to Calculus Capitalwhich was attributable to the investment made by the Company was £2,400(excluding VAT) (31 August 2010: £nil; 28 February 2011: £1,626).
After the period end Calculus Capital received arrangement fees of £9,000 (excluding VAT) (31 August 2010: £nil; 28 February 2011: £nil) in relation to the investment in MicroEnergy Generation Services Limited.
No incentive fee accrued to either Investment Manager during the period.
The following Directors are/were considered to be related parties due to theirconnection with one of the Investment Managers: John Glencross is a directorof Calculus Capital, Ian Wohlman is a director of Investec Bank plc (of whichInvestec Structured Products is a trading division). Ian Wohlman retired as aDirector at the Annual General Meeting held on 30 June 2011. Both Directorshave agreed not to receive any remuneration from the Company.COMPANY INFORMATIONDirectors Fund Administrator andMichael O'Higgins (Chairman) Company SecretaryKate Cornish-Bowden Capita Sinclair HendersonJohn Glencross (Trading as Capita FinancialSteven Meeks Group - Specialist Fund Services)Mark Rayward Beaufort House Philip Swatman 51 New North Road Exeter EX4 4EPRegistered OfficeBeaufort House Auditors51 New North Road Grant Thornton UK LLPExeter EX4 4EP 30 Finsbury SquareTelephone: 01392 477 500 London EC2P 2YU Company Number Solicitors and VCT Status Adviser07142153 Martineau No. 1 Colmore SquareStructured Products Investment Birmingham B4 6AAManagerInvestec Structured Products Sponsor and Broker2 Gresham Street Singer Capital Markets LimitedLondon EC2V 7QP One Hanover StreetTelephone: 020 7597 4000 London W1S 1YZWebsite:
www.investecstructuredproducts.com
Registrars
Venture Capital Investments Manager Capita Registrars Calculus Capital Limited
The Registry104 Park Street 34 Beckenham RoadLondon W1K 6NF BeckenhamTelephone: 020 7493 4940 Kent BR3 4TU
Website: www.calculuscapital.com Telephone: 0871 644 0300
(Calls cost 10p per minute plus network extras. Lines are open Monday to Friday 8.30 am to 5.30pm)A copy of the Investec Structured Products Calculus VCT plcHalf Yearly Report for the six months ended 31 August 2011 can be found on thefollowing websites: www.calculuscapital.com and www.investecstructuredproducts.com.
For further information, please contact:
Investment Manager to the Structured Products PortfolioInvestec Structured ProductsGary DaleTelephone: 020 7597 4065Investment Manager to the Venture Capital PortfolioCalculus Capital LimitedSusan McDonaldTelephone: 020 7493 4940National Storage Mechanism
A copy of the Half Yearly Report 2011 will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: www.hemscott.com/nsm.do.
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.
XLON