TIDMBRWV
RNS Number : 5257O
Bedford Row VCT PLC
30 June 2010
FOR IMMEDIATE RELEASE
30 June 2010
Bedford Row VCT plc
Audited Results Announcement
for the year ended 28 February 2010 and Notice of AGM
The directors of Bedford Row VCT plc are pleased to announce their audited
results for the year ended 28 February 2010.
Copies of the full Report and Accounts and the Notice of the AGM have been
dispatched to the Shareholders.
Chairman's Statement
Overview
The year under review has been a steadier one than the previous year.
The company started the year with eight investments. Of these eight investments
I am pleased to report the top three by value received further funding from
third party investors which validate the original investment rationale. These
three companies now represent 84.6% of the total NAV of the Company, and
represent the best upside potential for investors:-
1. Snacktime plc, is quoted on AIM and the share price has benefited from the
acquisition of its largest competitor.
2. M2FX plc has raised substantial funds from a new investor and looks poised
for fast growth now that cash is not a constraining factor. The price of the
new money is a little less per share than our previous holding value.
3. Rainbow Rewards Holdings Ltd has continued to raise significant sums
albeit at slightly lower values than our previous holding value. It has
announced its intention to seek a stock market listing this year.
A disappointment during the year was that Aquario plc was put into
administration. This compares with six companies which went into administration
in the previous year. The remaining three companies while continuing to trade
are still fragile.
The outcome of these actions has been a reduction in the Company's NAV to 26.07p
per share, excluding the 7p per share dividend for the year ended 28 February
2007.
The Company continues to be more than 70%-invested in qualifying stocks and has
met the other qualifying tests set by HMRC.
We continue to implement the cost savings outlined previously in the 2009
Interim Report with effect from 1st October 2009. Investment Management,
directors' and administrator's fees are being accrued while preserving the
limited cash in the company and no such fees have been paid since 30th September
2009.
Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is required to report
on principal risks and uncertainties facing the Company for the forthcoming
financial year.
The Board has concluded that the key risks facing the Company during the current
financial period are as follows:
i. investment risk associated with investing in small and immature
businesses;
ii. investment risk arising from extremely volatile stock market conditions
and their potential effect on investment valuation; and
iii. failure to maintain approval as a VCT.
In the case of (i) the Board is satisfied with the Company's approach. It
follows a rigorous process in vetting and careful structuring of new investments
and, after an investment is made, close monitoring of the business.
In respect of (ii), the Company seeks to hold a diversified portfolio. However,
the Company's ability to manage the risk is quite limited, primarily due to the
restrictions arising from the VCT regulations.
The Company's compliance with the VCT regulations is continually monitored by
the Company Secretary, who reports regularly to the Board on the current
position. The Company also retains James Cowper LLP, Chartered Accountants, to
provide regular reviews and advice in this area. The Board considers that this
approach reduces the risk of a breach of the VCT regulations to a minimal level.
Outlook
Although there has been some improvement of late, the future remains
unpredictable. The managers are diligently monitoring the remaining investments
but shareholders should realise that external forces can take matters outside
their control. Whilst the Board believes that the current portfolio valuation is
realistic, it cannot rule out further provisions in the next audited accounts.
However, it remains hopeful that certain well-performing investments may lead to
upward revaluations in the near future.
The Board continues to review all costs incurred by the Company and keep these
to the absolute minimum but there are fixed costs relating to a company listed
on the London Stock Exchange that cannot be reduced.
Despite the funding difficulties and trading challenges in the smaller company
sector, your Board is determined to find the best solution for shareholders to
maximise value, preserve cash, and retain the Inland Revenue qualifying status
of the Company. There are some promising companies remaining in the portfolio
and we shall work closely with the manager to realise value from these in due
course
R L Hargreaves
Chairman
29 June 2010
Investment Manager's Report for the year ended 28 February 2010
Introduction
Elderstreet Investments Limited is pleased to present the Investment Manager's
Report for the year ended 28 February 2010 for Bedford Row VCT plc.
Activity
Elderstreet has now been Investment Manager for twelve months. When we took over
the Investment Management mandate in December 2008 we identified six investments
in the portfolio with good potential. The four most exciting companies were M2FX
plc, Rainbow Rewards Holdings Limited, Snacktime plc and Dateline Holdings plc.
Three of these companies have attracted external capital from third parties
since December 2008. The two other companies were Aquario plc and ClickNow
Holdings plc. Regrettably Aquario failed to close its funding round and was put
into administration, and Click Now is currently being managed for cash ahead of
any increase in market activity.
The two remaining portfolio companies, Consolidated Asset Management Holdings
plc and Vicorp Group plc have performed badly and both been restructured and
carry de-minimis valuations.
Brief descriptions of the current investments with value follow.
Rainbow Rewards Holdings Limited Cost GBP166,447 Valuation
GBP180,455
Rainbow Rewards Holdings Limited is a provider of cash rewards to credit card
holders for loyalty to merchants who are members of the system. The key to the
reward system is that once a credit card is registered discounts will
automatically be credited to the user. A portion of the discount which the
merchant gives goes into local advertising and promotion of Rainbow Rewards
merchants and the user receives his discounts by way of cash transfers directly
into their bank account. The current focus of operations is in America, however
the product is applicable globally. The key to success is the signing of blocks
of cards from credit and debit card issuers. The company has signed a national
agreement with Affinity Solutions to roll out 10 million cards using its system,
and is in early discussions to IPO the company on AIM depending on market
conditions.
Snacktime plc Cost GBP175,236
Valuation GBP202,063
Snacktime plc is one of the UK's largest operators of snack and chilled drink
vending machines. The Group has many thousands of sites located throughout UK
mainland and both Northern and the Republic of Ireland, which are serviced by
its five main depots located in Cumbernauld (near Glasgow), Manchester,
Alcester, Wokingham, and Belfast. Each main depot is responsible through a team
of area managers, merchandisers and engineers for installing, maintaining and
restocking all of the Group's vending machines. The company floated on AIM in
December 2008 at GBP1.44 per share. During 2009 the company acquired its largest
competitor and subsequently raised a further GBP5.8 million in a placing. The
brokers forecast sales of GBP10 million and a profit before tax of around GBP1
million for the year ending March 2010.
M2FX plc Cost
GBP258,295 Valuation GBP194,728
Miniflex designs and manufactures patented plastic tubing that protects optical
fibre from damage. Its core product is the Optical Fibre Protection Tube
("OFPT") which is sold to the telecoms, aerospace and automotive industries.
Unlike normal smooth plastic tubing, OFPT has a higher resistance to kinking
when bent. The focus of sales is to America where a number of contracts have
been signed with telco distributors. For the year ended December 2009 the
company reported sales of GBP1.2 million up on the previous year, and a reduced
loss of GBP439k. Post the year end the company attracted third party capital
from a wealthy family office who have an option to invest up to GBP5 million in
future rounds. As a result of the founding round the valuation of our investment
has decreased, however the company now has the planned adequate funding to grow
substantially.
ClickNow Holdings plc Cost GBP150,000
Valuation GBP75,000
ClickNow has a partnership with ASK, a key internet search engine provider to
offer a search engine service that donates 50% of gross profits to charities.
ClickNow has relationships with over 200 charities and has a scaleable web based
platform. The company had received an offer of further funding in 2008 to expand
the business. However due to the economic downturn this investment was not
forthcoming and the Board have focused the company on a reduced expansion
strategy which will conserve cash in the business until the economy improves.
Since this change in strategy the business has been profitable on a monthly
basis.
Dateline Holdings plc Cost GBP150,900
Valuation GBP18,715
Dateline is one of the UK's longest established dating brands operating under
different ownership for 40 years. It has a database of more than 1 million
people and was the first computerised matching service in the UK. The Company
offers an internet online service, a telephone based offline service, and a
premium service. The company generates revenue from their three services with
various rates for the different levels of match making offered. The websites
will also generates money through advertising banners so as the database grows
the website should generate more money through advertising. The company reported
sales of GBP706k and a loss of GBP216k for the year ending December 2009, an
improvement on last year. During the year the company raised a further GBP250k
of investment capital from new investors and management which enabled the
existing loans to be paid off. The growth of the business and the move to
profitability is dependent on marketing spend, and the company requires further
funding to grow substantially.
Consolidated Asset Management (Holdings) plc Cost GBP74,260
Valuation GBP1,269
The original investment was made into Arc Fund Management an Aim quoted
financial services company specialising in sourcing and developing structured
products, and investing in pre-IPO businesses. Following a company restructure
the Board subsequently changed the Company's name to Consolidated Asset
Management (Holdings) plc, and in November 2008 announced that it had entered
into a subscription agreement with Mayfair Limited, a company controlled by Lord
Ashcroft, to raise additional investment. Mayfair now holds a 59% stake in the
company.
Vicorp Group plc Cost
GBP26,445 Valuation GBP591
Vicorp has developed software tools that enable large organisations to create
and manage interactive voice services for consumers. In January 2009 the
directors released a profits warning and its intention to delist from AIM. The
Directors have refocused the business around its existing contracts and the CEO
announced in January 2010 that "The company has posted a profit for the last
three quarters of calendar year 2009 and looks set to maintain profit growth in
2010".
Outlook
The Company still operates with very limited investment capital to back any
potential winners in the portfolio. While the economic outlook remains uncertain
and our outlook is generally cautious, there is some positive news in the
portfolio, particularly with Snacktime, Rainbow Rewards and M2FX. It is from
these three companies that we expect further positive asset value growth
progress in the next twelve months.
William Horlick
Elderstreet Investments Limited
29 June 2010
Statement of Directors' Responsibilities
Statement of Directors' Responsibilities in respect of the Annual Report and the
Financial Statements
Company law in the United Kingdom requires the Directors to prepare financial
statements for each financial year which give a true and fair view of the state
of affairs of the Company and of the profit or loss for that period. In
preparing those financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements 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 which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a directors' report, directors' remuneration report and corporate
governance statement that comply with that law and those regulations.
Responsibility statement of the Directors in respect of the annual financial
report
We confirm that to the best of our 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 Directors' Report includes a fair review of the development and
performance of the business and position of the issuer together with a
description of the principal risks and uncertainties they face.
Approved by the Board on 29 June 2010
and signed on behalf of the Board by
Graham K Urquhart
Company Secretary
Profit & Loss Account for the year ended 28 February 2010
+----------------------------+------+----------+----+----------+---------+----------+
| | | 2010 | | 2009 |
+----------------------------+------+----------+----+-------------------------------+
| | | Ord. | | Ord. | "C" | |
+----------------------------+------+----------+----+----------+---------+----------+
| |Note | Shares | | Shares | Shares | Total |
+----------------------------+------+----------+----+----------+---------+----------+
| | | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+------+----------+----+----------+---------+----------+
| Realised (loss) / profit | 8 | (1) | | (13) | 1 | (12) |
| on fair value of | | | | | | |
| investments | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Unrealised (loss) / gain | 8 | (260) | | (738) | 5 | (733) |
| on fair value of | | | | | | |
| investments | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Other income | 2 | - | | (2) | 8 | 6 |
| | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Investment Manager fees | 3 | (45) | | 13 | 2 | 15 |
+----------------------------+------+----------+----+----------+---------+----------+
| Other expenses | 4 | (61) | | (148) | (22) | (170) |
+----------------------------+------+----------+----+----------+---------+----------+
| Loss on ordinary | | (367) | | (888) | (6) | (894) |
| activities before tax | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Tax charge on ordinary | 6 | - | | - | - | - |
| activities | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Loss on ordinary | | (367) | | (888) | (6) | (894) |
| activities after tax | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Return per share | 7 | (14.02p) | | (50.28p) | (2.59p) | (44.32p) |
+----------------------------+------+----------+----+----------+---------+----------+
| Historic Profit / (Loss) | | | | | | |
| Note | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Loss for the year | | (367) | | (888) | (6) | (894) |
+----------------------------+------+----------+----+----------+---------+----------+
| Unrealised loss / (gain) | | 260 | | 738 | (5) | 733 |
| on fair value of | | | | | | |
| investments | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Realisation of prior | | 465 | | (9) | (1) | (10) |
| year's net loss | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Historical cost loss | | 358 | | (159) | (12) | (171) |
| before tax | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Tax charge on ordinary | | - | | - | - | - |
| activities | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
| Historical cost loss after | | 358 | | (159) | (12) | (171) |
| tax | | | | | | |
+----------------------------+------+----------+----+----------+---------+----------+
There were no other recognised gains or losses other than the results for the
year as disclosed above. Accordingly a statement of total recognised gains and
losses is not required.
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.
Reconciliation of movements in shareholders' funds for the year ended 28
February 2010
+----------------------------+----+----------+----+----------+---------+---------+
| | | 2010 | | 2009 |
+----------------------------+----+----------+----+------------------------------+
| | | Ordinary | | Ordinary | "C" | Total |
| | | Shares | | Shares | Shares | |
+----------------------------+----+----------+----+----------+---------+---------+
| | | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----+----------+----+----------+---------+---------+
| Shareholders' funds at 1 | | | | | | |
| Mar 2009 | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| Ordinary shares | | 805 | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| Former C shares converted | | 244 | | | | |
| to ordinary shares | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| | | 1,049 | | 1,810 | - | 1,810 |
| | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| Total gains and losses | | (367) | | (888) | (6) | (894) |
| recognised in period | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| Net proceeds of share | | - | | - | 250 | 250 |
| issue | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| Dividends paid | | - | | (117) | - | (117) |
| | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
| Shareholders' funds at 28 | | 682 | | 805 | 244 | 1,049 |
| February 2010 | | | | | | |
+----------------------------+----+----------+----+----------+---------+---------+
The accompanying notes are an integral part of the financial statements.
Balance Sheet as at 28 February 2010
+----------------------------+------+---------+----+---------+---------+---------+
| | | 2010 | | 2009 |
+----------------------------+------+---------+----+-----------------------------+
| | | Ord. | | Ord. | "C" | |
+----------------------------+------+---------+----+---------+---------+---------+
| |Note | Shares | | Shares | Shares | Total |
+----------------------------+------+---------+----+---------+---------+---------+
| | | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+------+---------+----+---------+---------+---------+
| | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Fixed asset investments | 8 | 720 | | 881 | 179 | 1,060 |
+----------------------------+------+---------+----+---------+---------+---------+
| | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Current assets | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Debtors | 9 | 1 | | | | 12 |
+----------------------------+------+---------+----+---------+---------+---------+
| Cash and cash equivalents | | 3 | | | | 4 |
+----------------------------+------+---------+----+---------+---------+---------+
| | | 4 | | | | 16 |
+----------------------------+------+---------+----+---------+---------+---------+
| Current Liabilities | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Creditors | 10 | (42) | | | | (27) |
+----------------------------+------+---------+----+---------+---------+---------+
| Net current assets | | (38) | | (76) | 65 | (11) |
+----------------------------+------+---------+----+---------+---------+---------+
| Net assets | | 682 | | 805 | 244 | 1,049 |
+----------------------------+------+---------+----+---------+---------+---------+
| | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Called up equity share | 11 | 262 | | 177 | 133 | 310 |
| capital | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Capital redemption reserve | 12 | 48 | | - | - | - |
| | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Special distributable | 12 | 1,492 | | 1,375 | 117 | 1,492 |
| reserve | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Revaluation reserve | 12 | (955) | | (1,165) | 5 | (1,160) |
+----------------------------+------+---------+----+---------+---------+---------+
| Revenue reserve | 12 | (165) | | 418 | (11) | 407 |
+----------------------------+------+---------+----+---------+---------+---------+
| Total equity shareholders' | | 682 | | 805 | 244 | 1,049 |
| funds | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
| Net Assets per share | | 26.07p | | 45.54p | 91.31p | 51.55p |
| | | | | | | |
+----------------------------+------+---------+----+---------+---------+---------+
The financial statements were approved by the Board and authorised for issue on
29 June 2010 and are signed on their behalf by:
Richard Hargreaves
Director
The accompanying notes are an integral part of the financial statements.
Cash flow statement for the year ended 28 February 2010
+----------------------------+----+---------+----+---------+---------+---------+
| | | 2010 | | 2009 |
+----------------------------+----+---------+----+-----------------------------+
| | | Ord. | | Ord. | "C" | |
+----------------------------+----+---------+----+---------+---------+---------+
| | | Shares | | Shares | Shares | Total |
+----------------------------+----+---------+----+---------+---------+---------+
| | | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----+---------+----+---------+---------+---------+
| Net cash inflow from | | | | | | |
| operating activities | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Return on ordinary | | (367) | | (888) | (6) | (894) |
| activities before tax | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Adjusted for: | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Realised gains on | | 1 | | 13 | (1) | 12 |
| investment disposals | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Unrealised appreciation in | | 260 | | 738 | (5) | 733 |
| investment values | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Decrease (increase) in | | 11 | | 79 | (2) | 77 |
| debtors | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| (Decrease) / increase in | | 15 | | (135) | 4 | (131) |
| creditors | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Net cash generated from | | (80) | | (193) | (10) | (203) |
| operating activities | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Taxation | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Corporation tax paid | | - | | - | - | - |
| | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Purchases of investments | | - | | (14) | (249) | (263) |
| | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Sales proceeds of | | 79 | | 96 | 76 | 172 |
| investments | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Net cash generated from | | 79 | | 82 | (173) | (91) |
| investing activities | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Equity Dividend | | - | | (117) | - | (117) |
| | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Issue of own shares | | - | | - | 265 | 265 |
| | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Share issue expenses | | - | | - | (15) | (15) |
| | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Net cash generated from | | - | | - | 250 | 250 |
| financing activities | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Net (decrease) / increase | | (1) | | (228) | 67 | (161) |
| in cash and cash | | | | | | |
| equivalents | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Reconciliation of net cash flow to | | | | |
| movements in cash and cash | | | | |
| equivalents | | | | |
+-------------------------------------------+----+---------+---------+---------+
| Net increase in cash and | | (1) | | (228) | 67 | (161) |
| cash equivalents | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Cash and cash equivalents | | 4 | | 165 | - | 165 |
| at 1 Mar 2009 | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
| Cash and cash equivalents | | 3 | | (63) | 67 | 4 |
| at 28 February 2010 | | | | | | |
+----------------------------+----+---------+----+---------+---------+---------+
1. Principal accounting policies
Basis of accounting
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of investments. The financial
statements have been prepared in accordance with applicable accounting
standards. The principal accounting policies of the Company are set out below.
Investments
Investments are classified as at fair value through the profit and loss account.
Financial assets designated as at fair value through profit and loss account are
measured at subsequent reporting dates at fair value. Investments in AIM-listed
companies are stated at bid prices discounted where necessary to reflect lack of
liquidity.
Unlisted investments are fair valued by the Directors in accordance with the
International Private Equity and Venture Capital Valuation Guidelines. The
Directors' policy in valuing unlisted investments is as follows:
a) investments which have been made within the last twelve months are valued at
cost, except where a company's under performance against plan indicates a
diminution in the value of the investment a provision against cost is made as
appropriate in bands of 25%.
b) where a company is in the early stage of development, it will normally
continue to be held at cost on the basis described above.
c) where a company is well established and profitable the shares may be valued
by applying a suitable price earnings ratio to the company's historic post tax
earnings. The ratio used is based on a comparable listed company or sector but
discounted by 25-50% to reflect marketability.
d) where a value is indicated by a material arms length transaction by a third
party in the shares of a company.
Where securities are designated upon initial recognition as fair value through
profit and loss, gains and losses arising from changes in fair value are
included in net profit or loss for the period as a capital item. Transaction
costs on acquisition are included within the original recognition and the profit
or loss on disposal is calculated net of transaction costs of disposal.
Income
Investment income includes income tax withheld at source. Dividend income is
shown net of any related tax credit.
Dividends receivable are brought into account on the ex-dividend date. 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:
a) expenses incidental to the acquisition or disposal of an investment, which
are included within the cost of the investment or deducted from the disposal
proceeds as appropriate, and;
b) 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.
Foreign currency transactions
Foreign currency transactions are translated into sterling at the rate ruling on
the date of the transaction. In the case of investment purchases these are
subsequently shown at fair value, which is calculated by converting the foreign
currency fair value to sterling at the exchange rate ruling on the balance sheet
date. The gain or loss is transferred to capital reserve as unrealised gain or
loss on investment unless the effect of the exchange rate movement is considered
material in which case it is shown as a separate item.
Taxation
Corporation tax payable is provided on taxable profits at the current rate. The
tax effect of different items of income/gain and expenditure/loss is allocated
between capital and revenue on the same basis as the particular item to which it
relates, using the Company's effective rate of tax for the accounting period.
Deferred tax is recognised, without discounting, in respect of all timing
differences between the treatment of certain items for taxation and accounting
purposes, which have arisen but not reversed by the balance sheet date, except
otherwise required by FRS 19. Due to the Company's status as a Venture Capital
Trust and the intention to continue meeting the conditions required to obtain
approval in the foreseeable future, the Company has not provided any deferred
tax on any capital gains arising on the revaluation of investments.
Revaluation reserve
The following unrealised gains and losses are included in revaluation reserve:
a) increases and decreases in the valuation of investments held at the
year end;
b) unrealised exchange differences of a capital nature;
c) unrealised gains and losses on transactions undertaken to hedge an
exposure of a capital nature.
Realised gains and losses are included in profit and loss account and a transfer
is made from revaluation reserve to profit and loss account of unrealised gains
and losses included in revaluation reserve in previous years.
Earnings per share
Earnings per share is calculated by dividing the profits or losses attributable
to ordinary shareholders by the weighted average number of shares in issue
during the year.
2. Return per share
The return per share is based on the loss from ordinary activities after tax of
GBP367,000 (2009: GBP894,000, being GBP888,000 in respect of ordinary shares and
GBP6,000 in respect of "C" shares) and on 2,615,781 ordinary shares (2009:
1,767,557 ordinary shares and 252,610 "C" shares), being the weighted average
number of shares in issue during the period.
There are no potentially dilutive capital instruments in issue and, therefore,
no diluted return per share figures are relevant.
3. Net asset value per share
The calculation of net asset value per share as at 28 February 2010 is based on
net assets of GBP682,000 (2009: GBP1,049.000, being GBP805,000 in respect of
ordinary shares and GBP244,000 in respect of "C" shares) divided by the
2,615,781 ordinary shares (2009: 1,767,557 ordinary share and 266,906 "C"
shares) in issue at that date.
4. Principal Financial Risks
The main risks the Company faces from its financial instruments are market price
risk, being the risk that the value of investment holdings will fluctuate as a
result of changes in market prices caused by factors other than interest rates;
interest rate risk; foreign currency risk and liquidity risk.
Market price risk
The Company's investment portfolio is exposed to market price fluctuations which
are monitored by the Investment Manager in pursuance of the investment
objective. Further information on the investment portfolio is set out in the
Investment Manager's report, which is not subject to audit.
- 30% (2009:11%) by value of the Company's net assets comprises equity
securities quoted on AIM or PLUS. A 5% increase in the bid price of these
securities as at 28 February would have increased net assets and the total
return for the year by GBP10,200 (2009: GBP6,300); a corresponding fall would
have reduced net assets and the total return for the year by the same amount.
- 69% (2008:80%) 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 5% overall increase in the valuation of the
unquoted investments at 28 February 2010 would have increased net assets and the
total return for the year by GBP23,450 (2009: GBP47,617); 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
The interest rate risk profile of financial assets at the balance sheet date was
as follows:
+---------------+----------+----------+----------+------+----------+----------+----------+
| | 2010 | | 2009 |
+---------------+--------------------------------+------+--------------------------------+
| | | | Non | | | | Non |
+---------------+----------+----------+----------+------+----------+----------+----------+
| | Fixed | Floating | interest | | Fixed | Floating | interest |
+---------------+----------+----------+----------+------+----------+----------+----------+
| | interest | rate | bearing | | interest | rate | bearing |
+---------------+----------+----------+----------+------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+---------------+----------+----------+----------+------+----------+----------+----------+
| Quoted on AIM | - | - | 203 | | - | - | 128 |
| / PLUS | | | | | | | |
+---------------+----------+----------+----------+------+----------+----------+----------+
| Unquoted | - | - | 469 | | - | - | 801 |
| | | | | | | | |
+---------------+----------+----------+----------+------+----------+----------+----------+
| Gilts | 48 | - | - | | 130 | - | - |
| | | | | | | | |
+---------------+----------+----------+----------+------+----------+----------+----------+
| Cash | - | 3 | - | | - | 4 | - |
| | | | | | | | |
+---------------+----------+----------+----------+------+----------+----------+----------+
| | 48 | 3 | 672 | | 130 | 4 | 929 |
+---------------+----------+----------+----------+------+----------+----------+----------+
The non-interest bearing assets represent the equity element of the portfolio.
The interest rate which determines the interest received on cash balances is
dependant on the base rate of the banks with which the deposits are held. The
gilts mature in 2010 and the interest rate is 4.75%.
Credit Risk
Credit risk is the risk that a counterparty to a financial instrument will fail
to discharge an obligation and commitment that it has entered into with the
company. The investment manager and 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.
Credit risk relating to listed fixed-interest investments is mitigated by
investing in a portfolio in investments of high credit quality, comprising
securities issued by the UK Government, European Union governments and major UK
and international companies and institutions. Credit risk relating to loans to
and preference shares in unquoted companies is considered to be part of market
risk.
The assets of the company which are traded on recognised stock exchanges are
held on the company's behalf by third party custodians (Smith and Williamson
Investment Management Limited in the case of listed fixed-interest investments
and Woodside Secretaries Limited in the case of quoted and unquoted equity
securities). Bankruptcy or insolvency of a custodian could cause the company's
rights with respect to securities held by the custodian to be delayed or
limited.
Credit risk arising on transactions with brokers relates to transactions in
quoted securities awaiting settlement. Risk relating to unsettled transactions
is considered to be low due to the short settlement period involved and the high
credit quality of the brokers used. The board further mitigates the risk by
monitoring the quality of service provided by the brokers.
The company's interest-bearing deposit accounts are maintained with major UK
clearing banks.
There were no significant concentrations of credit risk to counterparties at 28
February 2010. No individual investment exceeded 15% of the company's net assets
at 28 February 2010 (2007: nil).
Foreign currency risk
The Company's investment portfolio is exposed to foreign currency exchange rate
fluctuations which are monitored by the Investment Manager in pursuance of the
investment objective. Further information on the investment portfolio is set out
in the Investment Manager's report, which is not subject to audit. At the year
end GBP191,325 (2007: GBP59,210) of the investment portfolio is denominated in
US$. The balance of the portfolio is denominated in sterling.
Liquidity risk
Due to the nature, unquoted investments may not be readily realisable and
therefore a portfolio of quoted assets and cash is held to offset this liquidity
risk.
5. Related party transactions
Directors' and Officers' shareholdings as at 28 February 2010:
+----------------------+------------------------+---------------------+
| Person | Registered Holder | No. of Shares |
+----------------------+------------------------+---------------------+
| Richard Lawrence | Self | 51,500 |
| Hargreaves | | |
+----------------------+------------------------+---------------------+
| Kevin Thomas Morley | Self | nil |
+----------------------+------------------------+---------------------+
| Robert Wilson | Self | nil |
+----------------------+------------------------+---------------------+
There have been no changes in these interests since the year end.
BEDFORD ROW VCT PLC
(registered in England and Wales with registered no: 5323692)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVENthat the fifth Annual General Meeting of Bedford Row VCT
PLC (the "Company") will be held at the offices of Elderstreet Investments
Limited, 32 Bedford Row, London WC1R 4HE, at 11.30 a.m. on 11 August 2010, at
which the following resolutions will be proposed, in the case of resolutions 1
to 5 as ordinary resolutions and in the case of resolutions 6 and 7 as special
resolutions:
ORDINARY RESOLUTIONS
As Ordinary Business:-
1. To receive the report of the directors and the financial statements
of the Company for the year ended 28 February 2010.
2. To receive the directors' remuneration report;
3. To re-elect Robert Wilson who retires by rotation in accordance with
the Company's Articles of Association and who, being eligible, offers himself
for re-election.
4. To re-appoint James Cowper LLP as auditors of the Company to hold
office until the conclusion of the next general meeting at which accounts are
laid before the Company and that their remuneration be fixed by the directors.
As Special Business:-
ORDINARY RESOLUTION
5. THAT the Directors be and are hereby generally and unconditionally
authorised in accordance with section 551 of the Companies Act 2006 (and in
substitution for any existing general authority to allot relevant securities
granted by the Company) to allot relevant securities (within the meaning of
section 551 of that Act) of the Company up to an aggregate nominal amount equal
to GBP26,157, provided that this authority shall expire on the date of the
Annual General Meeting of the Company to be held in 2011 (unless and to the
extent that such authority is renewed or extended prior to such date) but so
that the Company may before the expiry of such period make an offer or agreement
which would or might require relevant securities to be allotted after the expiry
of such period and the Directors may allot relevant securities pursuant to such
an offer or agreement as if the authority conferred hereby had not expired.
SPECIAL RESOLUTIONS
6. THAT the Directors be and are hereby empowered pursuant to section
571(1) of the Companies Act 2006 to allot equity securities (within the meaning
of section 560 (1) of that Act) of the Company for cash pursuant to the general
authority conferred on the Directors pursuant to resolution no. 5 above as if
section 561(1) of that Act did not apply to any such allotment and to sell
relevant shares (within the meaning of section 560(2) of that Act) if,
immediately before the sale, such shares are held by the Company as treasury
shares (as defined in that Act) ("treasury shares") for cash as if section 89(1)
of that Act did not apply to such sale, provided that this power shall be
limited to theallotment of equity securities and the sale of treasury shares:-
(a) in connection with or pursuant to an offer by way of rights to the
holders of Ordinary Shares and other persons entitled to participate therein in
proportion (as nearly as may be) to their respective holdings of Ordinary Shares
(or, as appropriate, the number of Ordinary Shares which such other persons are
for those purposes deemed to hold), subject only to such exclusions or other
arrangements as the Directors may consider necessary or expedient to deal with
fractional entitlements or legal or practical problems under the laws of any
territory or the regulations or requirements of any regulatory body or any stock
exchange in any territory;
(b) (other than pursuant to sub-paragraph 6(a) above) up to an aggregate
nominal amount of GBP;
and such power shall expire on the date of the Annual General Meeting of the
Company to be held in 2011, but so that the Company may before such expiry make
an offer or agreement which would or might require equity securities to be
allotted or treasury shares to be sold (as the case may be)after such expiry and
the Directors may allot equity securities in pursuance of such offer or
agreement as if the power conferred hereby had not expired. This power shall be
in substitution for any previous general powers granted in this regard by the
Company.
7. "THAT the company be and is hereby generally and unconditionally
authorised to make market purchases (within the meaning of Section 693(4) of the
Act) of ordinary shares of 10p each in the company ("ordinary shares") provided
that:
(a) the maximum number of ordinary shares so authorised to be
purchased shall not exceed 14.99% of the present issued Ordinary share capital
of the company;
(b) the minimum price which may be paid for an ordinary share
shall be 10p;
(c) the maximum price, exclusive of expenses, which may be
paid for an ordinary share is an amount equal to 105 per cent of the average of
the middle market quotations for an ordinary share taken from the London Stock
Exchange Daily Official List for the five business days immediately preceding
the day on which the ordinary share is contracted to be purchased;
(d) the authority conferred comes to an end at the conclusion
of the next annual general meeting of the company or upon the expiry of 15
months from the passing of this resolution, whichever is the later; and
(e) that the company may enter into a contract to purchase its
ordinary shares under this authority prior to the expiry of this authority which
would or might be completed wholly or partly after the expiry of this
authority."
Registered Office:By Order of the Board
4th Floor
150-152 Fenchurch Street
London
Graham
KUrquhart FCIS
Secretary
Dated: 29 June 2010
Notes:
1. A member entitled to attend and vote at the above meeting convened by
this notice is entitled to appoint one or more proxies to attend, speak and vote
and, on a poll, to vote instead of him or her. A proxy need not be a member of
the Company but must attend the Meeting to represent you. Details of how to
appoint the Chairman of the Meeting or another person as your proxy using the
Form of Proxy are set out in the notes to the Form of Proxy. Completion and
return of a form of proxy will not prevent a member from attending and voting in
person if he or she so wishes.
2. You may appoint more than one proxy provided each proxy is appointed to
exercise rights attached to different shares. You may appoint more than one
proxy to exercise rights attached to any one share. To appoint more than one
proxy please contact Neville Registrars Limited on 0121 353 1131 (calls cost 10p
per minute plus network charge) or you may photocopy the Form of Proxy.
3. A Form of Proxy is enclosed. To be effective, the Form of Proxy,
together with any power of attorney or other written authority under which it is
signed, or a notarially certified copy or a certified copy in accordance with
the Powers of Attorney Act 1971 of such power or written authority must be
completed signed and to be valid the proxy must be duly executed and deposited
with the Company at the offices of the Company's registrars, Neville Registrars
Limited, 18 Laurel Lane, Halesowen, West Midlands B63 3DA.
4. Pursuant to Regulation 41 of the Uncertificated Securities Regulations
2001 to be entitled to attend and vote at the meeting (and for the purposes of
the determination by the Company of the number of votes they may cast), members
must be entered on the Company's register of members by 11.00 a.m. on day,
August 2010 or, in the event that the meeting is adjourned, on the Register of
Members of the Company not less than 48 hours before the time of any adjourned
meeting, and only such members shall be entitled to attend and vote at the
meeting in respect of the number of shares registered in their name at that
time. Changes to entries on the Register of Members after 11.00 a.m. on day,
August 2010 or, in the event that the meeting is adjourned, not less than 48
hours before the time of any adjourned meeting, shall be disregarded in
determining the rights of any person to attend and vote at the meeting.
5. In the case of joint holders, the vote of the senior who tenders a vote,
whether in person or by proxy, will be accepted to the exclusion of the votes of
any other joint holders. For these purposes, seniority shall be determined by
the order in which the names stand in the register of members in respect of the
joint holding.
6. To change your proxy instructions simply submit a new proxy appointment
using the methods set out above. Note that the cut-off time for receipt of proxy
appointments (see above) also apply in relation to amended instructions; any
amended proxy appointment received after the relevant cut-off time will be
disregarded. Where you have appointed a proxy and would like to change the
instructions using another hard-copy proxy form, please contact Neville
Registrars. If you submit more than one valid proxy appointment, the appointment
received last before the latest time for the receipt of proxies will take
precedence.
7. In order to revoke a proxy instruction you will need to inform the
Company using one of the following method: By sending a signed hard copy notice
clearly stating your intention to revoke your proxy appointment to Neville
Registrars Limited, 18 Laurel Lane, Halesowen, West Midlands B63 3DA. In the
case of a member which is a company, the revocation notice must be executed
under its common seal or signed on its behalf by an officer of the company or an
attorney for the company. Any power of attorney or any other authority under
which the revocation notice is signed (or a duly certified copy of such power or
authority) must be included with the revocation notice. In either case, the
revocation notice must be received by Neville Registrars no later than 11.30
a.m. on 9 August 2010. If you attempt to revoke your proxy appointment but the
revocation is received after the time specified then, subject to the paragraph
directly below, your proxy appointment will remain valid.
8. CREST members who wish to appoint a proxy or proxies through CREST
electronic proxy appointment service may do so for the meeting and any
adjournment(s) of it by using the procedures described in the CREST Manual.
CREST personal members, sponsored CREST Members and CREST Members who have
appointed a voting service provider(s) should refer to their CREST sponsor or
voting service provider(s) who will be able to take the appropriate action for
them.
9. Copies of the following documents will be available for inspection at the
registered office of the Company during normal business hours on any weekday
(Saturdays and public holidays excepted) from the date of this document until
the close of the Annual General Meeting, and at the place of the Annual General
Meeting for at least 15 minutes prior to and during the Meeting:-
(a) the service contracts and appointment letters of all the
Directors of the Company; and
(b) the articles of association of the Company with the proposed
amendments.
Accounts
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in the Companies Act 2006 ("the Act").
The balance sheet as at 28 February 2010, income statement and cash flow
statement for the period then ended have been extracted from the Company's 2010
statutory financial statements upon which the auditor's opinion is unqualified
and does not include any statement under the section 495 of the Act.
The Annual Report & Accounts for the year ended 28 February 2010 will be filed
with the Registrar of Companies and has been posted to shareholders today.
Copies of the documents listed below have been submitted to the UK Listing
Authority and will be available for inspection in the UK Listing Authority's
Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade,
Canary Wharf
London E14 5HS
Documents:
· Report and Accounts for the year ended 28 February 2010
· Notice of Annual General Meeting
· Annual General meeting Proxy Card
Enquiries: Graham Urquhart, FCIS, Company Secretary on 020 3216 2000
Roland Cornish and Felicity Geidt, Beaumont Cornish Limited
on 020 7628 3396.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KKKDPKBKDAAN
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