Last checked at 
2 Apr 2009 07:00
FOR IMMEDIATE RELEASE 2 April 2009
Hygea VCT plc
("Hygea" or the "Company")
Annual Report and Accounts
Notice of Annual General Meeting
The directors are pleased to announce the audited results of the Company for the year ended 31 December 2008 and a copy of the Annual Report and Accounts is expected to be sent to Shareholders on 9 April 2009. Set out below is a summary of the audited Report and Accounts.
In addition the Notice of Annual General Meeting is attached at the end of the Report and Accounts and is set out below. The AGM will be held at 8 Angel Court, London, EC2R 7HP on Tuesday, 5 May 2009 at 11:00am. This will be sent out with the Report and Accounts.
A copy of both documents is available from the registered office of the Company at 8 Angel Court, London, EC2R 7HP.
Financial Summary
| Year to 31 December 2008 | Year to 31 December 2007 | |
| Net assets (£'000s) | 5,155 | 4,608 |
| Net profit after tax (£'000s) | 418 | 314 |
| Net asset value per share | 66.2p | 61.2p |
| Earnings per share | 5.4p | 4.2p |
Chairman's Statement
I am pleased to present the 2008 annual report to shareholders in Hygea VCT plc.
In these difficult economic times, it is very satisfying to be able to report a significant rise of 8.2 % in the net asset value of your company at 66.2p compared to 61.2p at 31st December 2007. This increase in net asset value has resulted from a significant increase in the valuation of our unquoted portfolio, on which I comment below. We are pleased to have held our annual running costs at just 2.63% of year end net asset value.
Background
Counter intuitively we see the business environment for young bioscience companies improving in contrast to the general economic trend: we believe that our strategy of selecting companies which conform to the Hygea investment template results in businesses which enable their customers to achieve more with less resource. In the MedTech sector this means looking for companies which deliver better patient outcomes at lower total cost, which improves resilience throughout economic cycles. Large pharmaceutical majors are cutting costs but engaging in outsourcing to specialist suppliers and actively seeking small companies that provide scaleable, innovative solutions as acquisition targets.
Also as the large, traditional investment vehicles falter, there appears to be a greater appetite on the part of individuals and private/family offices to invest in young well run companies with good prospects.
Portfolio Review
(a) Investing
During the year, the company increased its unquoted portfolio by subscribing for further shares in Hallmarq (£100,000), Prosurgics (£100,000), Insense (£36,865) and Arecor (£534). Since the year end, the company has subscribed for further shares in Insense (£26,719). Changes to the quoted portfolio include the subscription for further shares in Scancell on its admission to PLUS Markets (£35,000) and the purchase and subsequent sale of a holding in Immunodiagnostic Systems at a profit of some £10,000. It is our intention to continue to support existing investee companies, where we believe that they offer a good opportunity for capital gains, to the extent that our cash resources allow.
These investments have been facilitated by realisations in the AIM portfolio, share issues and the modest use of our small overdraft facility.
(b) Selected operational highlights
DxS Limited has made significant advances during the year and it is anticipated that it will show excellent trading results for the current year: further details can be found in the Investment Review. We have been able to increase the valuation of our holding in line with the valuation attributed by the lead investor.
BioAnaLab is trading well, has grown strongly every year since formation and has been consistently profitable. In these circumstances the Board have felt able to increase its carrying value.
Prosurgics, after a delay in product registration, is raising further funds at a discount to the share price at which Hygea subscribed in January 2008. This has led to a significant write-down in the investment. However first results from the product launch are encouraging and we continue to have confidence in the future of this company.
The AIM portfolio, which is now a less significant part of our portfolio, has suffered from the general market malaise but we are delighted with the progress being made by Epistem, whose shares have continued to rise since the year end.
Shareholders seeking further information on portfolio companies can do so by visiting www.hygeavct.com, clicking on Investee Companies and then following the appropriate links.
Share Issue
As previously reported, we have issued 258,000 shares at 50p during the period. We have recently received expressions of interest from shareholders and others to apply for new shares which we will consider following the announcement of our results. Your Board feels it is desirable to have the ability to raise cash in this way given the continuing opportunities offered by fund raisings of current investee companies. We will be seeking to renew the existing authorities at the Annual General Meeting.
VAT
As I reported in my half year statement, HM Revenue and Customs ("HMRC") have now agreed that Investment Company management fees are not subject to VAT. We expect to be able to reclaim VAT on fees previously charged and have included an estimate in these accounts of £25,000. As the company is now managed directly by your Board, we are no longer incurring third party Investment Company management fees.
VCT Qualifying Status
PricewaterhouseCoopers LLP continues to provide the Board with advice on the ongoing compliance with HRMC rules and regulations concerning VCTs. The Board believes that Hygea VCT continues to comply with the conditions laid down by HMRC for maintaining approval as a VCT.
Outlook
Despite the problems facing many sectors of the economy, your Board is delighted that shareholders' patience is at last being rewarded and the future for the company looks positive. We are now cautiously optimistic that we can see inflows of cash from realisations later in 2009 or early in 2010 at which time your Board will reassess the future of the company and is mindful of the need to pay dividends to shareholders at an appropriate time. We are optimistic that the developments in the portfolio, together with the modest expense ratios compared to other VCTs, will allow a continuing increase in net asset value. We will continue our efforts to communicate the prospects of the company to interested parties with the hope that demand for the company's shares will increase.
I look forward to welcoming all shareholders to our Annual General Meeting on Tuesday 5th May at the Company's registered office.
James Otter
Chairman
31 March 2009
Investment Review
Investment portfolio
| Unquoted Investments | Investment at cost (£'000) | Unrealised profit/(loss) (£'000) | Carrying value at 31 December 2008 (£'000) |
| DxS Limited | 325 | 1,115 | 1,440 |
| ImmunoBiology Limited | 600 | 244 | 844 |
| BioAnaLab Limited | 279 | 451 | 730 |
| Hallmarq Veterinary Imaging Limited | 885 | (352) | 533 |
| Wound Solutions Limited | 350 | - | 350 |
| Glide Pharmaceutical Technologies Limited | 105 | 211 | 316 |
| Prosurgics Limited | 490 | (315) | 175 |
| Insense Limited | 282 | (112) | 170 |
| Arecor Limited | 1 | - | 1 |
| Purely Proteins Limited | 372 | (372) | - |
| Total unquoted investments | 3,689 | 870 | 4,559 |
| Quoted Investments | |||
| Scancell plc | 760 | (350) | 410 |
| EpiStem Holdings plc | 62 | 42 | 104 |
| Omega Diagnostics plc | 75 | (30) | 45 |
| Stem Cell Sciences plc | 250 | (230) | 20 |
| York Pharma plc | 89 | (85) | 4 |
| Total quoted investments | 1,236 | (653) | 583 |
| Total investments | 4,925 | 217 | 5,142 |
Ten largest holdings (by value)
Readers wishing to obtain easily further information on portfolio companies should click on the Investee Companies page at www.hygeavct.com.
DxS Limited
DxS is a world leader in the emerging field of companion diagnostics (sometimes referred to as personalised medicine) - its current focus is in the field of cancer treatment, where in many instances treatments are effective on only a small proportion of patients with a particular tumour and in the remaining instances are not only ineffective but can in some cases also do harm. DxS's diagnostics enable patients to be genetically tested as to whether or not they are likely to respond positively to a particular treatment. For the year to June 2008, DxS achieved sales of £3.3 million (2007: £1.1 million), operating profit of £812,000 (2007: £394,000 loss) and pre-tax profit of £386,000 (2007: £795,000 loss).Significant sales and profit growth is continuing to be achieved in the year to June 2009.
| Initial investment | April 2004 |
| Cost | £325,500 |
| Valuation at 31 December 2008 | £1,440,000 |
| Basis of valuation | Fair value |
| Equity held | 8% |
| Website | www.dxsgenotyping.com |
| Audited financial information | Year ended 30 June 2008 |
| £'000 | |
| Sales | 3,286 |
| Profit before tax | 386 |
| Retained loss | 3,141 |
| Net assets | 2,808 |
ImmunoBiology Limited
ImmunoBiology is a biotechnology company that is focused on developing products that could have applications in the treatment of cancer and certain infectious diseases. The company's technology is based on a recent discovery that a group of proteins known as 'heat shock proteins' has a pivotal role in controlling the normal immune response to infections.
| Initial investment | November 2005 |
| Cost | £600,000 |
| Valuation at 31 December 2008 | £844,000 |
| Basis of valuation | Last funding round |
| Equity held | 6% |
| Website | www.immbio.com |
| Audited financial information | Year ended 31 May 2008 |
| £'000 | |
| Sales | 1 |
| Loss before tax | 1,207 |
| Retained loss | 2,572 |
| Net assets | 174 |
BioAnaLab Limited
BioAnaLab is a leader in the provision of specialist analytical services to pharmaceutical and biotechnology companies in the growing sector of biopharmaceuticals.
| Initial investment | May 2005 |
| Cost | £278,600 |
| Valuation at 31 December 2008 | £730,000 |
| Basis of valuation | Fair value |
| Equity held | 14% |
| Website | www.bioanalab.com |
| Audited financial information | Year ended 31 October 2008 |
| £'000 | |
| Sales | 2,233 |
| Adjusted profit before tax | 243 |
| Retained profit | 144 |
| Net assets | 1,179 |
Hallmarq Veterinary Imaging Limited
Hallmarq specialises in developing low cost magnetic resonance imaging systems. The first application is for equine vets to enable the diagnosis of causes of lameness in horses that are not identifiable by any other method. The key development has been the launch of EQ 2 of the scanner, which has had a significant beneficial impact on growth in scan fees the key performance indicator for the use of MRI by the vets.
| Initial investment | August 2005 |
| Cost | £885,000 |
| Valuation at 31 December 2008 | £533,000 |
| Basis of valuation | Last funding round |
| Equity held | 8% |
| Website | www.hallmarq.net |
| Audited financial information | Year ended 31 August 2008 |
| £'000 | |
| Sales | 1,927 |
| Loss before tax | 232 |
| Retained loss | 3,695 |
| Net assets | 1,647 |
Scancell plc
Scancell is a Nottingham-based biotechnology company that is developing a pipeline of vaccines to target various types of cancer, with the first target being melanoma - Phase I trials of the latter are scheduled to start in the UK in Q1 2010. The platform technology, in effect, educates the immune system how to respond - this means that the technology can also be licensed to pharmaceutical companies to assist the development of their own therapeutic vaccines.
Scancell listed on PLUS Markets in September 2008, raising £1.6 million.
| Initial investment | December 2003 |
| Cost | £760,000 |
| Valuation at 31 December 2008 | £410,000 |
| Basis of valuation | Bid price |
| Equity held | 13% |
| Website | www.scancell.co.uk |
| Audited financial information | Year ended 30 April 2008 |
| £'000 | |
| Sales | - |
| Loss before tax | 449 |
| Retained loss | 4,072 |
| Net assets | 1,047 |
Wound Solutions Limited
Wound Solutions is working on the development of a product that has applications in the treatment of difficult to heal wounds such as leg ulcers and foot ulcers.
| Initial investment | May 2006 |
| Cost | £350,000 |
| Valuation at 31 December 2008 | £350,000 |
| Basis of valuation | Cost |
| Equity held | 3% |
| Website | www.woundsolutions.com |
| Audited financial information | Year ended 30 June 2008 |
| £'000 | |
| Sales | - |
| Loss before tax | 276 |
| Retained loss | 4,528 |
| Net assets | 669 |
Glide Pharmaceutical Technologies Limited
Glide Pharma has developed a needle-free drug delivery technology that is able to deliver a drug formulation in a solid form directly through the skin of a patient. The Glide technology has been shown to have a number of benefits when compared to other delivery mechanisms. In trials on human volunteers, Glide's device was shown to be preferable to injection using a standard needle and syringe. The first product is undergoing a clinical trial, with the results due during H1 2009. In addition, there is a good pipeline of companies investigating the Glide technology in feasibility studies - the strategy is to convert the feasibility studies into funded development programs.
| Initial investment | November 2005 |
| Cost | £105,000 |
| Valuation at 31 December 2008 | £316,000 |
| Basis of valuation | Last funding round |
| Equity held | 2% |
| Website | www.glidepharma.com |
| Audited financial information | Year ended 31 March 2008 |
| £'000 | |
| Sales | 72 |
| Loss before tax | 1,932 |
| Retained loss | 3,886 |
| Net assets | 1,242 |
Prosurgics Limited
Prosurgics develops robots for assisting surgeons: its first product Freehand, which is a camera holding robot for keyhole surgery is now being commercialised. Freehand is a Version 2 product and is much cheaper and smaller than Version 1, with the added advantage of generating recurring revenue through incorporating a consumable. Commercialisation started in February 2009, with the benefit of Prosurgics already having an established position in this market: the reaction from surgeons to live demonstrations in patients has been very encouraging.
| Initial investment | January 2006 |
| Cost | £490,000 |
| Valuation at 31 December 2008 | £175,000 |
| Basis of valuation | Last funding round |
| Equity held | 7% |
| Website | www.prosurgics.com |
| Audited financial information | Year ended 31 December 2007 |
| £'000 | |
| Sales | 305 |
| Loss before tax | 2,483 |
| Retained loss | 8,838 |
| Net assets | 112 |
Insense Limited
Insense is working on the development of an innovative product range for the wound care market - commercial launch started in January 2008, against the background of trials showing significant improvement in patient outcomes at lower cost.
| Initial investment | July 2003 |
| Cost | £282,000 |
| Valuation at 31 December 2008 | £170,000 |
| Basis of valuation | Last funding round |
| Equity held | 3% |
| Website | www.insense.co.uk |
| Audited financial information | Year ended 31 December 2007 |
| £'000 | |
| Sales | 71 |
| Loss before tax | 1,314 |
| Retained loss | 5,086 |
| Net assets | 774 |
EpiStem Holdings plc
EpiStem listed on AIM in April 2007. Its knowledge is based on over 30 years research at Christies Hospital, Manchester on the behaviour of adult epithelial stem cells - epithelial cancers account for over 80% of adult cancers. It has the attractive business model of a profitable Contract Research Organisation division, a Biomarker division and a Novel Therapies division. In March 2009, a R&D collaboration agreement was signed with Novartis, under which Epistem receives an upfront cash payment of $4 million and research funding for two years.
| Initial investment | April 2007 |
| Cost | £61,700 |
| Valuation at 31 December 2008 | £103,500 |
| Basis of valuation | Bid price |
| Equity held |
|
| Website | www.epistem.co.uk |
| Audited financial information | Year ended 30 June 2008 |
| £'000 | |
| Sales | 2,065 |
| Loss before tax | 1,333 |
| Retained loss | 4,026 |
| Net assets | 2,582 |
Disposals
A summary of the disposals during the year is show below:
| Realisations | Carrying value at 31 December 2007 (£'000) | Cost of investment realised (£'000) | Proceeds of investment (£'000) | Total gain/(loss) (£'000) |
| Immunodiagnostic Systems Holdings plc | - | 25 | 35 | 10 |
| Phoqus plc | 35 | 150 | - | (150) |
| TOTAL | 35 | 175 | 35 | (140) |
Directors' Responsibility Statement
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Services Authority.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. 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 Directors confirm that to the best of their knowledge the financial statements for the year ended 31 December 2008 comply with the requirements set out above and that suitable accounting policies, consistently applied and supported by reasonable and prudent judgement, have been used in their preparation. They also confirm that the annual report includes a fair review of the development and performance of the business together with a description of the principal risks and uncertainties faced by the Company.
Under applicable law and regulations, the Directors are responsible for preparing a Directors' Report (including Business Review), Directors' Remuneration Report and Corporate Governance Statement which comply with that law and those regulations.
In so far as the Directors are aware:
there is no relevant audit information of which the Company's auditor is unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
The Board is responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions. The work carried out by Hyman Capital Services Limited as independent auditor of the Company does not involve consideration of the maintenance and integrity of the website and accordingly they accept no responsibility for any changes that have occurred to the financial statements since they were initially presented on the website.
The Directors confirm to the best of their knowledge:
the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
the Investment Review 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; and
On behalf of the Board
James Otter
Chairman
31 March 2009
| Income Statement | ||||
| Year to 31 December 2008 | ||||
| Revenue | Capital | Total | ||
| Notes | £'000 | £'000 | £'000 | |
| Loss on disposal of fixed asset investments | 9 | - | (25) | (25) |
| Gain on valuation of fixed asset investments | 9 | - | 547 | 547 |
| Investment income | 2 | 7 | - | 7 |
| Investment management fees | 3 | - | - | - |
| VAT management fee rebate | 6 | 19 | 25 | |
| Other expenses | 4 | (136) | - | (136) |
| (Loss)/profit on ordinary activities before tax | (123) | 541 | 418 | |
| Taxation on (loss)/profit on ordinary activities | 6 | - | - | - |
| Profit/(loss) on ordinary activities after tax | (123) | 541 | 418 | |
| (Loss)/earnings per share - basic and diluted | 7 | (1.6)p | 7.0p | 5.4p |
the 'Total' column of this statement is the income statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AITC Statement of Recommended Practice
all revenue and capital items in the above statement derive from continuing operations
the accompanying notes are an integral part of the financial statements
the Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds
The Company has no recognised gains or losses other than the results for the year as set out above. Accordingly a statement of total recognised gains or losses is not required.
Other than revaluation movements arising on investments held at fair value through the profit and loss account, there were no differences between the profit/(loss) as stated above and at historical cost.
| Income Statement | ||||
| Year to 31 December 2007 | ||||
| Revenue | Capital | Total | ||
| Notes | £'000 | £'000 | £'000 | |
| Gain on disposal of fixed asset investments | - | 124 | 124 | |
| Gain on valuation of fixed asset investments | - | 378 | 378 | |
| Gain on valuation of current asset investments | - | 4 | 4 | |
| Investment income | 2 | 1 | - | 1 |
| Investment management fees | 3 | (10) | (28) | (38) |
| Other expenses | 4 | (155) | - | (155) |
| (Loss)/profit on ordinary activities before tax | (164) | 478 | 314 | |
| Taxation on (Loss)/profiton ordinary activities | 6 | - | - | - |
| (Loss)/profit on ordinary activities after tax | (164) | 478 | 314 | |
| (Loss)/earnings per share - basic and diluted | 7 | (2.2)p | 6.4p | 4.2p |
the 'Total' column of this statement is the Income Statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AITC Statement of Recommended Practice
all revenue and capital items in the above statement derive from continuing operations
the accompanying notes are an integral part of the financial statements
the Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds
The Company has no recognised gains or losses other than the results for the year as set out above. Accordingly a statement of total recognised gains or losses is not required.
Other than revaluation movements arising on investments held at fair value through the profit and loss account, there were no differences between the profit/(loss) as stated above and at historical cost.
| Balance Sheet | |||||
| As at 31 December 2008 | As at 31 December 2007 | ||||
| Notes | £'000 | £'000 | £'000 | £'000 | |
| Fixed asset investments | 9 | 5,142 | 4,358 | ||
| Current assets: | |||||
| Debtors | 10 | 79 | 3 | ||
| Cash at bank | - | 272 | |||
| 79 | 275 | ||||
| Creditors: amounts falling due within one year | 11 | (32) | (25) | ||
| Overdraft | 11 | (34) | - | ||
| Net current assets | 13 | 250 | |||
| Net assets | 5,155 | 4,608 | |||
| Called up equity share capital | 12 | 3,894 | 3,765 | ||
| Share premium account | 13 | 1,722 | 1,722 | ||
| Special distributable reserve | 13 | 1,660 | 1,660 | ||
| Capital redemption reserve | 13 | 38 | 38 | ||
| Capital reserve - realised | 13 | (1,595) | (1,474) | ||
| - unrealised | 13 | 217 | (445) | ||
| Revenue reserve |
13 | (781) | (658) | ||
| Total equity shareholders' funds | 5,155 | 4,608 | |||
| Net asset value per share | 8 | 66.2p | 61.2p | ||
The accompanying notes are an integral part of the financial statements.
The statements were approved by the Directors and authorised for issue on 31 March 2009 and are signed on their behalf by:
James Otter
Chairman
| Cash Flow Statement | |||
| Year to 31 December 2008 | Year to 31 December 2007 | ||
| Notes | £'000 | £'000 | |
| Net Cash outflow from operating activities | (173) | (122) | |
| Capital expenditure and financial investment | |||
| Purchase of investments | 9 | (297) | (713) |
| Disposal of investments | 9 | 35 | 1,013 |
| Net cash (outflow) / inflow from investing activities | (262) | 300 | |
| Financing | |||
| Issue of Ordinary share capital | 129 | - | |
| Net cash inflow from financing | 129 | - | |
| (Decrease) / increase in cash resources | (306) | 178 | |
| Reconciliation of Movements in Shareholders' Funds | ||
| Year ended 31 December 2008 | Year ended 31 December 2007 | |
| £'000 | £'000 | |
| Shareholders' funds at start of year | 4,608 | 4,294 |
| Profit on ordinary activities after tax | 418 | 314 |
| Issue of equity | 129 | - |
| Shareholders' funds at end of year | 5,155 | 4,608 |
| Reconciliation of Net Cash Flow to Movement in Liquid Resources | |||
| Year to 31 December 2008 | Year to 31 December 2007 | ||
| £'000 | £'000 | ||
| (Decrease) / increase in cash at bank | (306) | 178 | |
| Opening net liquid resources | 272 | 94 | |
| Net liquid resources at 31 December | (34) | 272 | |
Liquid resources at 31 December comprised:
| As at 31 December 2008 | As at 31 December 2007 | |
| £'000 | £'000 | |
| Cash at Bank | (34) | 161 |
| Money Market Funds | - | 111 |
| Net liquid resources at 31 December | (34) | 272 |
| Reconciliation of profit before Taxation to Cash Flow from Operating Activities | |||
| Year to 31 December 2008 | Year to 31 December 2007 | ||
| £'000 | £'000 | ||
| Profit on ordinary activities before tax | 418 | 314 | |
| Gain on valuation of fixed assets investments | (547) | (378) | |
| Loss / (gain) on disposal of investments | 25 | (124) | |
| (Increase) / decrease in debtors | (76) | 74 | |
| Increase / (decrease) in creditors | 7 | (8) | |
| Outflow from operating activities | (173) | (122) | |
Notes to the Financial Statements
1. Principal Accounting policies
The financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Where presentational guidance set out in the Statement of Recommended Practice (SORP) "Financial Statements of Investment Trust Companies", revised December 2005, is consistent with the requirements of UK GAAP, the Directors have sought to prepare the financial statements on a consistent basis compliant with the recommendations of the SORP.
The principal accounting policies have remained unchanged from those set out in the Company's 2007 annual report and financial statements. A summary of the principal accounting policies is set out below.
The accounts have been drawn up to include a statutory income statement in accordance with Schedule 4 of the Companies Act 1985.
Investments
Purchases and sales of investments are recognised in the financial statements at the date of the transaction (trade date).
These investments will be managed and their performance evaluated on a fair value basis in accordance with a documented investment strategy and information about them has to be provided internally on that basis to the Board. Accordingly as permitted by FRS 26, the investments will be designated as fair value through profit and loss ("FVTPL") on the basis that they qualify as a group of assets managed, and whose performance is evaluated, on a fair value basis in accordance with a documented investment strategy. The Company's investments are measured at subsequent reporting dates at fair value.
In the case of unquoted investments, fair value is established in accordance with industry guidelines by using measurements of value such as price of recent transaction, earnings multiple and net assets; where no reliable fair value can be estimated using such techniques, unquoted investments are carried at cost subject to provision for impairment where necessary. In the case of investments quoted on a recognised stock exchange, fair value is established by reference to the closing bid price on the relevant date or the last traded price, depending upon convention of the exchange on which the investment is quoted. This is consistent with the International Private Equity and Venture Capital (IPEVC) guidelines.
Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the income statement and allocated to the unrealised capital reserve.
In preparation of the valuations of assets the Directors are required to make judgements and estimates that are reasonable and incorporate their knowledge of the performance of the investee companies.
Current asset investments
Current asset investments comprise money market funds. Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the income statement and allocated to the unrealised capital reserve.
The current asset investments are all invested with the Company's cash manager and are readily convertible into cash at the choice of the Company. The current asset investments are held for trading, are actively managed and the performance is evaluated on a fair value basis in accordance with a documented investment strategy. Information about them has to be provided internally on that basis to the Board.
Income
Investment income includes interest earned on bank balances, money market securities and loans to unquoted companies and includes income tax withheld at source. Dividend income is shown net of any related tax credit.
Dividends receivable are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Fixed returns on debt and money market securities are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged wholly to revenue with the exception of the investment management fee, which has been charged 25% to the revenue account and 75% to the realised capital reserve to reflect, in the Directors' opinion, the expected long term split of returns in the form of income and capital gains respectively from the investment portfolio.
Revenue and capital
The revenue column of the income statement includes all income and revenue expenses of the Company. The capital column includes realised and unrealised gains and losses on investments. Gains and losses arising from changes in fair value are considered to be realised only to the extent that they are readily convertible to cash in full at the balance sheet date.
Taxation
Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the "marginal" basis as recommended in the SORP.
Deferred tax is recognised on an undiscounted basis in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less tax, with the exception that deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing can be deducted.
Cash and liquid resources
Cash, for the purposes of the cash flow statement, comprises cash in hand and deposits repayable on demand, less overdrafts payable on demand. Liquid resources are current asset investments which are disposable without curtailing or disrupting the business and are either readily convertible into known amounts of cash at or close to their carrying values or traded in an active market. Liquid resources comprise term deposits of less than one year (other than cash), government securities, investment grade bonds and investments in money market managed funds.
Loans and receivables
The Company's loans and receivables are initially recognised at fair value and subsequently measured at amortised cost.
Financial instruments
The Company's principal financial assets are its investments and the policies in relation to those assets are set out above. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to reserves.
Dividends
Dividends payable are recognised as distributions in the financial statements when the Company's liability to make payment has been established. This liability for final dividends is established when the dividends proposed by the Board are approved by the shareholders.
2. Investment income
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Income on money market securities and bank balances | 1 | 1 |
| Income received from fixed asset investments | 6 | - |
| 7 | 1 |
3. Investment management fees
| 31 December 2008 | 31 December 2007 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Investment management fee | - | - | - | 8 | 24 | 32 |
| Irrecoverable VAT thereon | - | - | - | 2 | 4 | 6 |
| - | - | - | 10 | 28 | 38 | |
For the purposes of the revenue and capital columns in the income statement, the management fee (including VAT) has been allocated 25% to revenue and 75% to capital, in line with the Board's expected long term return in the form of income and capital gains respectively from the Company's investment portfolio.
The Chancellor of the Exchequer announced in his budget statement on 12 March 2008 that the Finance Act 2008 would contain draft legislation exempting VCTs from VAT on management fees with effect from 1 October 2008. This legislation has now been passed and as such all VCTs have been made exempt from VAT on management fees from this date.
4. Other expenses
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Directors' remuneration | 35 | 36 |
| Fees payable to the Company's auditor for the audit of the financial statements | 6 | 6 |
| Fees payable to the Company's auditor - other services | 1 | 1 |
| Legal and professional expenses | 52 | 67 |
| Accounting and administration services | 28 | 25 |
| Other expenses | 14 | 20 |
| 136 | 155 |
For the year ended 31 December 2008, the running costs were 2.6% of net assets (2007: 3.4%)
5. Directors' remuneration
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Directors' emoluments | ||
| James Otter (Chairman) | 15 | 15 |
| Charles Breese | 10 | 10 |
| John Hustler | 10 | 10 |
| Mark Andrews (to 9 February 2007) | - | 1 |
| 35 | 36 |
None of the Directors received any other remuneration or benefit from the Company during the year. The Company has no employees other than non-executive Directors. The average number of non-executive Directors in the year was three (2007: three).
6. Tax on ordinary activities
The corporation tax charge for the year was £nil (2007: £nil).
Factors affecting the tax charge for the current year:
The current tax charge for the year differs from the standard rate of corporation tax in the UK of 20% (2007: 20%). The differences are explained below.
| Current tax reconciliation: | 31 December 2008 | 31 December 2007 |
| £'000 | £'000 | |
| (Loss)/profit on ordinary activities before tax | (122) | (164) |
| Current tax at 20% (2007: 20%) | (24) | (33) |
| Unrecognised tax losses | 24 | 33 |
| Total current tax charge | - | - |
Approved Venture Capital Trusts are exempt from tax on capital gains within the Company. Since the Directors intend that the Company will continue to conduct its affairs so as to maintain its approval as a Venture Capital Trust, no current deferred tax has been provided in respect of any capital gains or losses arising on the revaluation or disposal of investments.
7. (Loss)/earnings per share
The revenue (loss) per share is based on loss after tax of £(123,000) (2007: £(164,000)) and on 7,684,458 (2007: 7,530,191) shares, being the weighted average number of shares in issue during the year.
The total earnings per share is based on profit after tax of £418,000 (2007: £314,000) and on 7,684,458 (2007: 7,530,191) shares, being the weighted average number of shares in issue during the year.
There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted earnings per share are therefore identical.
8. Net asset value per share
The calculation of net asset value per share as at 31 December 2008 is based on net assets of £5,155,000 (2007: £4,608,000) divided by 7,788,191 (2007: 7,530,191) ordinary shares in issue at that date.
9. Fixed asset investments
| Unquoted investments | Quoted investments | Total | |
| £'000 | £'000 | £'000 | |
| Book cost as at 31 December 2007 | 4,176 | 626 | 4,802 |
| Revaluation to 31 December 2007 | (112) | (332) | (444) |
| Valuation at 31 December 2007 | 4,064 | 294 | 4,358 |
| Opening valuation at 1 January 2008 | 4,064 | 294 | 4,358 |
| Purchases at cost | 237 | 60 | 297 |
| Disposal proceeds | - | (35) | (35) |
| Flotation of Scancell plc (Transfer of valuation) | (725) | 725 | - |
| Loss on disposal of investments - current year | - | (25) | (25) |
| Revaluation in year | 983 | (436) | 547 |
| Closing valuation at 31 December 2008 | 4,559 | 583 | 5,142 |
| Book cost at 31 December 2008: | |||
| 3,689 | 1,236 | 4,925 | |
| Revaluation to 31 December 2008: | |||
| 870 | (653) | 217 | |
| Valuation at 31 December 2008 | 4,559 | 583 | 5,142 |
Further details of the fixed asset investments held by the Company are shown within the Investment Review.
All investments are designated as fair value through profit or loss from the time of acquisition, and all capital gains or losses on investments so designated. Given the nature of the Company's venture capital investments, the changes in fair value of such investments recognised in these financial statements are not considered to be readily convertible to cash in full at the balance sheet date and accordingly these gains are treated as unrealised.
At 31 December 2008 and 31 December 2007 there were no commitments in respect of investments approved by the Board but not yet completed.
10. Debtors
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Prepayments & accrued income | 28 | 3 |
| Other debtors* | 51 | - |
| 79 | 3 |
*Other debtors include an amount of £50,000 due from the pension fund of a Director in respect of the issue of shares which has subsequently been paid.
11. Creditors: amounts falling due within one year
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Bank overdraft | 34 | - |
| Accruals | 30 | 17 |
| Other creditors | 2 | 8 |
| 32 | 25 |
12. Share capital
| 31 December 2008 | 31 December 2007 | |
| £'000 | £'000 | |
| Authorised: | ||
| 50,000,000 Ordinary shares of 50p each | 25,000 | 25,000 |
| Allotted and fully paid up: | ||
| 7,788,191 ordinary shares of 50p each (2007: 7,530,191) | 3,894 | 3,765 |
The capital of the Company is managed in accordance with its investment policy with a view to the achievement of its investment objective as set on page 17. The Company is not subject to any externally imposed capital requirements.
The Company issued the following shares in the year (2007: nil):
2 April 2008: Issue of 100,200 shares at 50p per share
30 April 2008: Issue of 49,800 shares at 50p per share
30 May 2008: Issue of 2,000 shares at 50p per share
31 July 2008: Issue of 106,000 shares at 50p per share
The Company did not repurchase any shares in the year (2007: nil)
13. Reserves
| Share premium account | Special distributable reserve | Capital redemption reserve | Capital reserve realised | Capital reserve unrealised | Revenue reserve | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2008 | 1,722 | 1,660 | 38 | (1,474) | (445) | (658) |
| Profit on ordinary activities after tax | - | - | - | - | - | 418 |
| VAT management fee rebate | - | - | - | 19 | - | (19) |
| Prior period (losses)/gains on disposal | - | - | - | (115) | 115 | - |
| Current period (losses)/gains on disposal | - | - | - | (25) | - | 25 |
| Gains/losses on revaluation | - | - | - | - | 547 | (547) |
| Balance as at 31 December 2008 | 1,722 | 1,660 | 38 | (1,595) | 217 | (781) |
When the Company revalues its investments during the period, any gains or losses arising are credited/charged to the income statement. Unrealised gains/losses are then transferred to the capital reserve - unrealised. When an investment is sold any balance held on the capital reserve unrealised is transferred to the capital reserve - realised as a movement in reserves. The purpose of the special distributable reserve was to create a reserve which will be capable of being used by the Company to pay dividends and for the purpose of making repurchases of its own shares in the market with a view to narrowing the discount at which the Company's shares trade to net asset value.
14. Financial instruments and risk management
The Company's financial instruments comprise equity and loan note investments, cash balances and liquid resources including debtors and creditors. The Company holds financial assets in accordance with its investment policy of investing mainly in a portfolio of VCT qualifying quoted and unquoted securities whilst holding a proportion of its assets in cash or near-cash investments in order to provide a reserve of liquidity.
Fixed asset investments (see note 9) are valued at fair value. For quoted investments this is either bid price or the latest traded price, depending on the convention of the exchange on which the investment is quoted. The fair value of all other financial assets and liabilities is represented by their carrying value in the balance sheet. The Directors believe that the fair value of the assets held at the year end is equal to their book value.
In carrying on its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The most significant types of financial risk facing the Company are price risk, interest rate risk, credit risk and liquidity risk. The Company's approach to managing these risks is set out below together with a description of the nature and amount of the financial instruments held at the balance sheet date.
Market risk
The Company's strategy for managing investment risk is determined with regard to the Company's investment objective, as outlined on page 17. The management of market risk is part of the investment management process and is a central feature of venture capital investment. The Company's portfolio is managed in accordance with the policies and procedures described in the Corporate Governance statement on pages 26 to 29, having regard to the possible effects of adverse price movements, with the objective of maximising overall returns to shareholders. Investments in smaller companies, by their nature, usually involve a higher degree of risk than investments in larger companies quoted on a recognised stock exchange, though the risk can be mitigated to a certain extent by diversifying the portfolio across business sectors and asset classes. The overall disposition of the Company's assets is regularly monitored by the Board.
Details of the Company's investment portfolio at the balance sheet date are set out on page 6.
11.3% (31 December 2007: 6.4%) by value of the Company's net assets comprises equity securities listed on the London Stock Exchange or quoted on AIM or PLUS. A 10% increase in the bid price of these securities as at 31 December 2008 would have increased net assets and the total return for the year by £58,000 (31 December 2007: £29,000); a corresponding fall would have reduced net assets and the total return for the year by the same amount.
88.4% (31 December 2007: 88.2%) by value of the Company's net assets comprises investments in unquoted companies held at fair value. The valuation methods used by the Company include the application of a price/earnings ratio derived from listed companies with similar characteristics, and consequently the value of the unquoted element of the portfolio can be indirectly affected by price movements on the London Stock Exchange. A 10% overall increase in the valuation of the unquoted investments at 31 December 2008 would have increased net assets and the total return for the year by £455,853 (31 December 2007: £406,000); an equivalent change in the opposite direction would have reduced net assets and the total return for the year by the same amount.
Interest rate risk
Some of the Company's financial assets are interest-bearing. As a result, the Company is exposed to fair value interest rate risk due to fluctuations in the prevailing levels of market interest rates.
Floating rate
The Company's floating rate investments comprise cash held on interest-bearing deposit accounts and, where appropriate, within interest bearing money market securities. The benchmark rate which determines the rate of interest receivable on such investments is the bank base rate, which was 2.0% at 31 December 2008 (31 December 2007: 5.5%). The amounts held in floating rate investments at the balance sheet date were as follows:
| 31 December 2008 | 31 December 2007 | |
| £000 | £000 | |
| Cash at bank | - | 272 |
| (34) | 272 |
A 1% increase in the base rate would increase income receivable from these investments and the total return for the year by £nil (31 December 2007: £2,700)
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Board carry out a regular review of counterparty risk. The carrying values of financial assets represent the maximum credit risk exposure at the balance sheet date.
At 31 December 2008 the Company's financial assets exposed to credit risk comprised the following:
| 31 December 2008 | 31 December 2007 | |
| £000 | £000 | |
| Cash at bank | - | 272 |
| (34) | 272 |
The Company's interest-bearing deposit and current accounts are maintained with Royal Bank of Scotland.
Other than cash or liquid money market funds, there were no significant concentrations of credit risk to counterparties at 31 December 2008 or 31 December 2007.
Liquidity risk
The Company's financial assets include investments in unquoted equity securities which are not traded on a recognised stock exchange and which generally may be illiquid. They also include investments in smaller quoted companies, which by their nature, involve a higher degree of risk than investments on the main market. As a result, the Company may not be able to realise some of its investments in these instruments quickly at an amount close to their fair value in order to meet its liquidity requirements, or to respond to specific events such as a deterioration in the creditworthiness of any particular issuer
The Company's liquidity risk is managed on a continuing basis by the Board in accordance with policies and procedures laid down by the Board. The Company's overall liquidity risks are monitored on a quarterly basis by the Board.
The Company maintains sufficient cash facilities to pay accounts payable and accrued expenses. At 31 December 2008, £34,000 of the overdraft facility of £100,000 had been used (31 December 2007: £ nil).
15. Post balance sheet events
The following events occurred between the balance sheet date and the signing of these financial statements:
Investment of £26,700 into Insense Limited in March 2009
16. Contingencies, guarantees and financial commitments
As mentioned in the Chairman's Statement on pages 4 and 5, a rebate of VAT previously paid on management fees to Octopus Investments Limited is almost certain. This has been included as a debtor within these financial statements and as such has not been included as a contingent asset. There were no further contingencies, guarantees or financial commitments as at 31 December 2008 (2007: £nil).
17. Related party transactions
The Board acts as the investment manager of the Company. No remuneration has been paid to the Board during the year in its capacity as investment manager. The Directors are entitled to participate in a performance bonus calculated as 20% of sums returned to shareholders by way of dividends and capital distributions of whatever nature, which in aggregate exceeds the sum of 80p per share (including dividends paid to date, i.e. 1.25p, but excluding any sums returned to shareholders from HMRC in the year of subscription). At the 31 December 2008, no performance fee was payable (2007: nil).
The above summary of results for the year ended 31 December 2008 does not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985 and has not been delivered to the Registrar of Companies.
Statutory financial statement will be filed with the Registrar of Companies in due course; the auditors report on those financial statements under s235 of the Companies Act 1985 is unqualified and does not contain a statement under s237 (2) or (3) of the Companies Act 1985.
Notice of Annual General Meeting
Notice is hereby given that the annual general meeting of Hygea VCT PLC will be held at 8 Angel Court, London, EC2R 7HP on Tuesday 5 May 2009 at 11.00 a.m. for the following purposes:
ORDINARY BUSINESS
1. To receive and adopt the financial statements for the year to 31 December 2008 and the Directors' and auditor's reports thereon.
2. To approve the Directors' Remuneration Report.
3. To re-elect Mr Charles Breese as a director.
4. To re-appoint Hyman Capital Services Limited as auditor of the Company and to authorise the Directors to determine their remuneration.
SPECIAL BUSINESS
To consider and if thought fit, pass Resolution 5 as a Special Resolution, pass Resolution 6 as an Ordinary Resolution, and Resolutions 7 and 8 as Special Resolutions:-
5. ADOPTION OF NEW ARTICLES OF ASSOCIATION
THAT the Articles of Association produced to the meeting and initialled by the Chairman for the purposes of identification be adopted as the Articles of Association in substitution for, and to the exclusion of, the existing Articles of Association of the Company.
6. AUTHORITY TO ALLOT RELEVANT SECURITIES
THAT the Directors be generally and unconditionally authorised for the purposes of Section 80 of the Companies Act 1985 ("the Act") to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of the authorised but as yet unissued share capital of the Company from time to time provided that this authority shall expire at the conclusion of the next Annual General Meeting of the Company or 15 months following the passing of this Resolution 5, whichever is the first to occur, save that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities pursuant to such offer or agreement notwithstanding that the authority conferred hereby has expired, and the expression "relevant securities" and reference to the allotment of relevant securities shall bear the same respective meanings as in Section 80 of the Act.
7. EMPOWERMENT TO MAKE ALLOTMENTS OF EQUITY SECURITIES
THAT conditional upon the passing of Resolution 6 above, the Directors be and they are hereby empowered pursuant to Section 95 of the Act to allot equity securities wholly for cash pursuant to the authority conferred by Resolution 6 as if Section 89(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities in connection with or pursuant to either, (i) an offer by way of rights, open offer or other pre-emptive offer to the holders of shares in the Company and other persons entitled to participate therein in proportion (as nearly as may be practicable) to their respective holdings of such shares, but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlement or any legal or practical problems under the laws of any territory, or the requirements of any regulatory body or stock exchange, and/or, (ii) an offer of up to an aggregate nominal value of 10% of the issued share capital of the Company at any one time as at the date of such allotment, and in either case such power shall expire at the conclusion of the next Annual General Meeting of the Company or 15 months following the passing of this Resolution 6, whichever is the first to occur, save that the Company may, before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant to any such offer or agreement notwithstanding that the power conferred hereby has expired, and the expression "equity securities" and references to the allotment of equity securities shall bear the same respective meanings as in Section 94 of the Act.
8. EMPOWERMENT TO MAKE ALLOTMENTS OF EQUITY SECURITIES
THAT the Company be and is hereby generally and unconditionally authorised to make market purchases (within the meaning of s163(3) of the Companies Act 2006 of ordinary shares of 10p each in the Company ("ordinary shares") provided that:
By Order of the Board
8 Angel Court
London
EC2R 7HP
Craig Hunter FCIS
Company Secretary
31 March 2009
NOTES
1. Holders of ordinary shares, or their duly appointed representatives, are entitled to attend and vote at the AGM. Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and speak and vote on their behalf at the meeting. A shareholder can appoint the Chairman of the meeting or anyone else to be his/her proxy at the meeting. A proxy need not be a shareholder. More than one proxy can be appointed in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different ordinary share or shares held by that shareholder. To appoint more than one proxy, the Proxy Form should be photocopied and completed for each proxy holder. The proxy holder's name should be written on the Proxy Form together with the number of shares in relation to which the proxy is authorised to act. The box on the Proxy Form must also be ticked to indicate that the proxy instruction is one of multiple instructions being given. All Proxy Forms must be signed and, to be effective, must be lodged with the company's registrar so as to arrive not later than 48 hours before the time of the meeting, or in the case of an adjournment 48 hours before the adjourned time.
2. The return of a completed Proxy Form will not prevent a shareholder attending the AGM and voting in person if he/she wishes to do so.
3. Any person to whom this Notice is sent who is a person nominated under Section 146 of the CA 2006 to enjoy information rights (a Nominated Person) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
4. Only shareholders whose names appear on the register of members of the Company as at 48 hours before the time of the meeting shall be entitled to attend the AGM either in person or by proxy and the number of ordinary shares then registered in their respective names shall determine the number of votes such persons are entitled to cast on a poll at the AGM.
5. As at 31 March 2009 being the latest practicable date prior to the publication of this document, the Company's issued share capital consists of 7,788,191 ordinary shares of 50p, carrying one vote each. There are no shares held in Treasury. Therefore the total voting rights in the Company as at 31 March 2009 is 7,788,191.
6. In order to facilitate voting by corporate representatives at the AGM, arrangements will be put in place at the AGM so that (i) if a corporate shareholder has appointed the Chairman of the meeting as its corporate representative to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has not appointed the Chairman of the meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure. The guidance includes a sample form of appointment letter if the Chairman is being appointed as described in (i) above.
7. In Accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those members entered on the Company's register of members at 6:00pm on the day which is two days before the day of the meeting or, if the meeting is adjourned, shareholders entered on the Company's register of members at 6:00pm on the day two days before the date of any adjournment shall be entitled to attend and vote at the meeting.
8. A form of proxy is enclosed which, to be effective, must be completed and delivered to the registrars of the Company, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU so as to be received by no later than 48 hours before the time the annual general meeting is scheduled to begin. The completion and return of the form of proxy will not affect the right of a member to attend and vote at the annual general meeting.
9. Copies of the Directors' Letters of Appointment, the Register of Directors' Interests in the ordinary shares of the Company kept in accordance with s325 of the Companies Act 2006 will be available for inspection at the registered office of the Company during usual business hours on any weekday from the date of this notice until the Annual General Meeting, and at the place of that meeting for at least 15 minutes prior to the commencement of the meeting until its conclusion.
Enquiries:
Charles Breese, Hygea VCT plc on 01280 703482 or larpentnewton@btinternet.com
Roland Cornish, Beaumont Cornish Limited on 020 7628 3396