YFM Equity Partners # BRITISH SMALLER COMPANIES VCT PLC # ANNUAL REPORT & FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 bscfunds.com Transforming small businesses --- DISCOVER MORE ABOUT BRITISH SMALLER COMPANIES VCT PLC www.bscfunds.com Registered Number: 03134749 # CONTENTS ## Financial Overview Financial Highlights in the Year 3 Five Year Summary 4 Financial Calendar 4 The Portfolio 5 ## Strategic Report Chairman's Statement 6 Objectives and Key Policies 10 Processes and Operations 11 Key Performance Indicators 12 Portfolio Structure and Analysis 16 Investment Review 18 Case Studies 24 Portfolio Summary 26 Summary of Portfolio Movement 27 Investee Company Information 28 Risk Factors 32 Other Matters 34 Section 172 Statement 34 ## Corporate Governance Directors 36 Directors' Report 37 Corporate Governance 41 Directors' Remuneration Report 50 Directors' Responsibilities Statement 53 ## Independent Auditor's Report Independent Auditor's Report 54 ## Financial Statements Statement of Comprehensive Income 61 Balance Sheet 62 Statement of Changes in Equity 63 Statement of Cash Flows 65 Notes to the Financial Statements 66 ## Company Information Notice of the Annual General Meeting 90 Registered Offices of Significant Holdings 95 Advisers to the Company 96 --- # HELPING GROW # AMBITIOUS ENTREPRENEURIAL UK BUSINESSES ![img-0.jpeg](img-0.jpeg) ![img-1.jpeg](img-1.jpeg) ![img-2.jpeg](img-2.jpeg) ![img-3.jpeg](img-3.jpeg) ![img-4.jpeg](img-4.jpeg) ![img-5.jpeg](img-5.jpeg) ## ABOUT US British Smaller Companies VCT plc was formed in 1996. It aims to provide investors exposure to a diversified portfolio of UK businesses that offer opportunities in the application and development of innovation in their products and services, across established and emerging industries. THE PORTFOLIO HAS A VALUATION OF £159.1m AS AT 31 MARCH 2026 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Overview # BRITISH SMALLER COMPANIES VCT PLC Transforming small businesses ## Manager YFM Private Equity Limited (“the Manager”) is a wholly owned subsidiary of YFM Equity Partners LLP and is authorised and regulated by the Financial Conduct Authority. ## Investment Policy The investment strategy of British Smaller Companies VCT plc (“the Company”) is to invest in UK businesses across a broad range of sectors that blends a mix of businesses operating in established and emerging industries that offer opportunities in the application and development of innovation in their products and services. These investments will all meet the definition of a Qualifying Investment* and be primarily in unquoted UK companies. It is anticipated that the majority of these businesses will be re-investing their profits for growth and the investments will comprise mainly equity investments. Further details of the Company’s Investment Policy can be found in the Strategic Report on page 10. ## Dividend Policy The Board remains committed to achieving the objective, over time, of paying tax free dividends from realised investment returns. This depends upon the level of investment income and realisations that the Company is able to make or achieve in any one period and cannot be guaranteed. The tax reliefs that are available for an investment in a Venture Capital Trust are of particular benefit for shareholders as there is no income tax payable on the dividends received, or need to declare them in a tax return. ## Share Buy-Backs Share buy-backs enable shareholders to obtain some liquidity in an otherwise illiquid market when there is a need to dispose of shares. This policy is kept under active review to ensure that any decisions taken are in the interests of shareholders as a whole. The current rate of discount at which ordinary shares will be bought back is targeted to be no more than five per cent of the latest reported net asset value. ## Dividend Re-Investment Scheme (“DRIS”) The Company operates a DRIS which gives shareholders the opportunity to re-invest any cash dividends. Currently, dividends are re-invested at the latest reported net asset value as adjusted for the relevant dividend in question if this has not already been recognised. Any dividends that are re-invested by shareholders are eligible for income tax relief at 20 per cent of the amount invested, subject to an annual investment limit of £200,000, or, if lower, the amount of a shareholder’s income tax liability. The Finance Act 2014 confirmed that shares acquired at any time under dividend re-investment schemes will not impact tax relief on sales of, or subscriptions for, VCT shares, unless in the latter case it results in a breach of the £200,000 investment limit. * Under Chapter 3 Part 6 of the Income Tax Act 2007 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Overview # FINANCIAL HIGHLIGHTS IN THE YEAR 1. Total Return ("TR") is defined as an Alternative Performance Measure. The Board considers TR to be the primary measure of shareholder value; it is calculated as the total of net asset value per ordinary share plus cumulative dividends paid since inception of the Company. The Annual Report contains a number of Alternative Performance Measures ("APMs"). APMs are financial measures that are in addition to those defined or specified in the Company's financial reporting framework. The Company presents these measures because it considers them key indicators of performance that are relevant to shareholders' assessment of the Company. All stated figures above and throughout the annual report exclude the impact of any tax benefits that may arise to shareholders due to the Company's status as a Venture Capital Trust. # TOTAL RETURN IN THE YEAR +0.35p +0.4% RETURN IN THE YEAR The Company's Total Return increased by 0.35 pence, equivalent to an annualised return of 0.4 per cent of the opening net asset value. Overall Total Return increased from 264.70 pence per ordinary share to 265.05 pence per ordinary share, which includes cumulative dividends paid of 188.15 pence per ordinary share. # REALISATION PROCEEDS £18.5m +£8.9M OVER COST Realisations of investments generated recognised proceeds of £18.5 million, a gain of £1.6 million over the opening carrying value and £8.9 million over cost. # INVESTED IN PORTFOLIO £22.7m IN THE YEAR The Company invested capital into 15 companies during the year, of which five were new additions to the portfolio. # DIVIDENDS PAID IN THE YEAR 4.00p YIELD OF 5.0% Total dividends paid were 4.00 pence per ordinary share, which equates to 5.0 per cent of the opening net asset value per ordinary share. # FUNDS ALLOTTED IN THE YEAR £44.7m RELATING TO 2024/25 & 2025/26 TAX YEARS The Company raised £44.3 million in 2024/25, £29.5 million of which was allotted in April 2025. A further £51.3 million was raised in 2025/26, £15.2 million of which was allotted in January 2026. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Overview # FIVE YEAR SUMMARY | | Year ended 31 March 2026 | Year ended 31 March 2025 | Year ended 31 March 2024 | Year ended 31 March 2023 | Year ended 31 March 2022 | | --- | --- | --- | --- | --- | --- | | Income £000 | 4,920 | 5,463 | 4,045 | 1,994 | 1,065 | | Profit before and after taxation £000 | 939 | 6,769 | 10,618 | 12,237 | 28,264 | | Net assets attributable to ordinary shares £000 | 285,531 | 257,111 | 219,600 | 157,032 | 159,534 | | Profit per ordinary share | 0.26p | 2.21p | 4.34p | 6.54p | 18.22p | | Dividends per ordinary share paid in the year | 4.00p | 5.25p | 4.0p | 8.5p | 9.0p | | Net asset value per ordinary share | 76.90p | 80.55p | 83.6p | 83.7p | 85.7p | | Total Return per ordinary share¹ | 265.05p | 264.70p | 262.5p | 258.6p | 252.1p | | Increase in Total Return per ordinary share¹ | 0.35p | 2.20p | 3.9p | 6.5p | 18.9p | | Annualised return¹ | 0.4% | | | | | | Cumulative 3 year increase in Total Return per ordinary share¹ | 6.45p | | | | | | Annualised 3 year return¹ | 2.7% | | | | | | Cumulative 5 year increase in Total Return per ordinary share¹ | 31.85p | | | | | | Annualised 5 year return¹ | 9.0% | | | | | 1. These are Alternative Performance Measures. The Board considers Total Return to be the primary measure of shareholder value. The annualised return comprises the cumulative dividends paid plus the NAV at 31 March 2026, compared to the NAV at the beginning of the relevant period. This excludes the benefit of any tax relief. # FINANCIAL CALENDAR | Results announced | 11 June 2026 | | --- | --- | | Shareholder workshop | 18 June 2026 | | Ex-dividend date | 18 June 2026 | | Record date | 19 June 2026 | | DRIS Election date | 3 July 2026 | | Dividend paid | 17 July 2026 | | Annual General Meeting | 10 September 2026 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Overview # THE PORTFOLIO | ☑ arcus global | ☑ AutomatePro Let's make progress | ☑ aura | B2M S&LUTIONS HOUSEKEEPING | | --- | --- | --- | --- | | ☑ Biorelate | DrDoctor | ☑ DynaRisk | EIKON | | Force24 | UNIQUE FUTURE FUTURE | ☒ Fuuse | GEEIQ | | ☑ inploi | ☑ intamac Making Connections | ☑ INTEGRUM ESG | Ketech Better returned exchange | | MATILLION | ohalo | out=post | ☑ panintelligence | | Plandek | QualityClouds SaaS by Nature, Quality by Design | ☑ Relative INSIGHT | S4labour | | ☑ SpotlessWater | ☑ Summize | STORMHARVESTER | STUDENTCROWD | | TEAMFEEPAY | TeraView | TIPJAR | TORKOTSU | | Unbiased.co.uk | Vypr | Work Buzz | xapien | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # CHAIRMAN'S STATEMENT I am pleased to present the 2026 annual report and financial statements of British Smaller Companies VCT plc (the "Company"). The Company has seen notable progress from several of its portfolio holdings, during a 12-month period in which it has delivered a positive overall return. Volatility continues to be the key theme in the macroeconomic environment, as countries react to a variety of challenges. These have included global tariffs and concerns over trade wars, geopolitical tensions that included the start of the conflict in Iran at the end of the reporting period, and concerns over the impact of Artificial Intelligence ("AI") on jobs and the valuation of technology companies. Nevertheless, the Company's strategy of investing in early-stage companies that are delivering differentiated products and services to help their customers solve some of their biggest problems, has helped to offset these external market dynamics. Given this context, it is a reflection of the resilience of the portfolio and the benefits of the Manager's proactive approach to working with investee businesses, that the Company has performed positively, generating an annualised 0.4 per cent return on its opening net asset value in the year. 19 of the 24 portfolio companies valued on a revenue basis have shown positive revenue growth over the last 12 months, with nine of these delivering growth of over 40 per cent. However, market concerns that AI will replace existing software solutions has led to a reduction in the revenue multiples used to value software-led technology businesses. As a result, some portfolio companies have seen their valuations remaining static or falling back, despite the underlying revenue growth. The performance of the strongest holdings has helped to compensate for those whose valuations have been impacted by the reduction in multiples. Over the long term, companies that utilise proprietary data or operate in regulated or complex markets are likely to be well placed to benefit from the advancement of AI, rather than being at risk of AI undermining their business model. However, in the short term, as seen during recent months, the reductions in valuation multiples have affected all such technology businesses regardless of their defensibility or their market opportunity. The Company continues to benefit from the Manager's access to a healthy pipeline of new investment opportunities, which it generates through its large investment team, its regional office network and its in-house Direct Origination function. It was another strong year for investment activity, with £22.7 million deployed in the year. Five new companies were added to the portfolio, while the Company provided follow-on funding to ten existing holdings. It remains the Company's strategy to "back its winners" and shareholders should expect to see this approach of investing follow-on capital to help to accelerate future growth continuing in future years. Despite a more difficult market environment, the Company has continued its trend of delivering steady realisations of portfolio assets, with four investee businesses exited in the period, generating £18.3 million of proceeds. This includes a strong 8.1x return on cost from Teraview, following the company's listing on the Korean Stock Exchange. ## Financial Performance The Company delivered a 0.35 pence per ordinary share increase in Total Return which, as noted above, is equivalent to an annualised 0.4 per cent of the opening net asset value at 1 April 2025. Total Return is now 265.05 pence per ordinary share. ## Portfolio There has been strong sales growth across a number of portfolio companies, which has helped to drive a £1.5 million net increase in the portfolio's valuation and support the uplift in Total Return during the period. Within the top ten largest holdings, there have been material value uplifts from Xapien, Summize and Unbiased in particular. The Company's holding in Xapien increased by £5.9 million during the period. Xapien had a strong year with turnover increasing by 142 per cent and the continued build-out of the company's senior team. Xapien's AI-powered software, which automates research on individuals and companies, is increasingly being used by customers across a range of sectors. The Company participated in a follow-on funding round in December 2025, which will enable Xapien to maintain its momentum. The Company's investment in Summize increased in value by £4.2 million over the year. Summize has continued to deliver strong revenue growth, enhancing the functionality of its contract lifecycle management product and increasing its customer base in the large US market. In January 2026, Summize completed a $50 million Series B funding round, which provides the business with additional capital to continue its scaling journey. The Company's investment in Unbiased increased by £2.9 million in the year. The business provides an online marketplace that can generate new customer leads for British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report financial advisers. It continues to show good growth in its established UK business and is seeing increasing traction in the US, as it scales its customer base there. Unbiased is well-placed to maintain its current trajectory in 2026. Other notable positive valuation movements in the period include a £2.0 million realised gain following the exit of the Company's holding in Teraview, a £1.2 million realised gain from strategic planning software business SharpCloud and a valuation uplift of £1.1 million in data validation business Vypr. As noted elsewhere in the report, the reduction in valuation multiples for technology businesses has impacted the portfolio, limiting the valuation growth of those that have delivered revenue uplifts and causing falls in holding value of other investees, including some where there has been an increase in the company's underlying revenues. The portfolio companies where this most impacted valuation were Matillion, which decreased by £3.8 million, Quality Clouds (£2.2 million) and Force24 (£2.0 million). Separately, the valuation of visual effects firm Outpost reduced by £2.1 million, as the business navigated industry challenges, albeit it is now emerging positively from the worst of the industry disruption. ## Realisations in the Year Realisations of portfolio investments generated proceeds of £18.5 million in the year. These investments have returned a net gain of £8.9 million over the original cost, which includes £1.6 million over the opening carrying value at the start of the financial year. In October 2025, the Company realised its investment in Elucidat, receiving £5.5 million in initial proceeds (including income due), with additional deferred consideration of £0.7 million anticipated to be received over the next 18 months. To date, the Elucidat investment has generated a 1.3x return on the original cost of £4.3 million. Including deferred consideration, proceeds have the potential to rise to £6.2 million, and the return to 1.45x. In December 2025, the Company realised its investment in SharpCloud receiving £8.7 million in initial proceeds, with additional deferred consideration of £0.9 million anticipated to be received over the next two years. To date, the SharpCloud investment has generated a 2.0x return on the original cost of £4.4 million. Including deferred consideration, proceeds have the potential to rise to £9.6 million, and the return to 2.2x. In December 2025, portfolio company Teraview successfully completed an oversubscribed listing on the Korean Stock Exchange. The Company subsequently realised its holding prior to the year-end, receiving proceeds of £3.0 million. The Teraview investment has generated an 8.1x return on the original cost of £0.4 million. In January 2026, the Company realised its remaining holding in Vuealta, receiving proceeds of £0.7 million. Overall, the Vuealta investment has generated total proceeds of £5.6 million, a 1.5x return on the original cost of £3.6 million. In July 2025 the sale of the trade and liabilities of Wooshii was completed; no proceeds were received on exit, in line with its minimal carrying value, although there is the potential for a small return for the Company depending on future trading. The Company's investment Sipsynergy also realised its trading subsidiary in February 2026, with total expected proceeds of c.£0.9 million for the Company over the next two years. This represents a 0.3x return on the original cost of £2.8 million. In the year the Company also recognised a net gain of £0.2 million relating to deferred consideration previously recognised from investments realised in prior years. These deferred consideration proceeds were contingent rather than guaranteed with one holding recognising a £0.5 million gain and another recognising a £0.3 million loss against the previous holding value. ## Investment Activity The Company invested £22.7 million in the year into the portfolio. £11.1 million was deployed into five new investments. The new investments are: | Investment | Sector | | --- | --- | | Aura Life | A digital platform for funeral plans and at-need services | | DynaRisk | Cyber risk solutions | | S4labour | Workforce management | | TeamFeePay | Payment platform for grassroots football | | TiPJAR | A digital platform for fair and transparent tip and service charge distribution | In our continued support of the portfolio, ten companies received follow-on funding, totalling £11.6 million in aggregate. Further details are given in the Investment Review on page 19. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # CHAIRMAN'S STATEMENT (CONTINUED) ## Financial Results The movement in net asset value ("NAV") per ordinary share and the dividends paid in the year are set out in the table below: | | Pence per ordinary share | | £000 | | --- | --- | --- | --- | | NAV at 31 March 2025 | | 80.55 | 257,111 | | Decrease in value | - | | (101) | | Gain on disposal of investments | 0.40 | | 1,612 | | Net underlying change in investment portfolio | 0.40 | | 1,511 | | Net operating costs | (0.15) | | (572) | | Total Return in the year | | 0.25 | 939 | | Issue/buy-back of new shares | | 0.10 | 41,664 | | NAV before the payment of dividends | | 80.90 | 299,714 | | Dividends paid | | (4.00) | (14,183) | | NAV at 31 March 2026 | | 76.90 | 285,531 | | Cumulative dividends paid | | 188.15 | | | Total Return: at 31 March 2026 | | 265.05 | | | at 31 March 2025 | | 264.70 | | The charts on page 12 show the movement in Total Return and Net Asset Value over time in greater detail. The portfolio investments held at the beginning of the financial year, amounting to £153.4 million, delivered a return over the year of £1.3 million. The current portfolio's net valuation decreased by £0.1 million. Within this there were gains of £16.4 million, offset by £16.5 million of downward movements. ## Treasury Due to the nature of its structure, a proportion of the Company's net assets will be held in cash and cash equivalents at any point in time. The Company takes an active approach to generating a return on liquid funds, whilst remaining focused on the primary goal of capital preservation. A portion of the Company's liquid assets are held across a diversified range of Triple-A rated money market funds, managed by global institutions, while the balance is held as readily accessible cash, all of which is held at Tier 1 Financial Institutions (A2 rated or above). In the year, the Company generated a return of £4.5 million on its liquid assets, and at year end was generating a weighted run-rate return on these assets of c.3.5 per cent per annum. ## Dividends Dividends paid in the year totalled 4.00 pence per ordinary share. Cumulative dividends paid as at 31 March 2026 were 188.15 pence per ordinary share. An interim dividend for the year ending 31 March 2027 of 2.00 pence per ordinary share will be paid on 17 July 2026, to shareholders on the register at 19 June 2026. ## Dividend Re-investment Scheme ("DRIS") The Company operates a DRIS, which gives shareholders the opportunity to re-invest any cash dividends received; it is open to all shareholders, including those who invested under the recent offers. The main advantages of the DRIS are: 1. the dividends remain tax free; and 2. any DRIS investment attracts income tax relief at the rate of 20 per cent (30 per cent prior to 6 April 2026). For the financial year ended 31 March 2026, £2.4 million was re-invested by way of the DRIS, from overall dividends paid of £14.2 million. ## Budget The November 2025 Budget included increases to the annual and lifetime VCT investment limits into businesses, as detailed on pages 14 and 15. This a welcome step that will allow VCT funds to provide more support to their portfolio companies for longer. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report The Budget also announced a reduction in initial income tax relief from 30 per cent to 20 per cent. It is too early to predict the full impact of this change, but we expect the more established VCTs with stronger track records, like the Company, to continue to be able to meet their fundraising objectives. ## Fundraising During the year the Company received net proceeds of £29.5 million from the second allotment of its 2024/25 fundraising, allotted in April 2025; and £15.2 million from the first allotment of its 2025/26 fundraising, allotted in January 2026. ## Shareholder Relations ### Investor Workshop The annual shareholder workshop held on 19 June 2025 was well attended. Attendees heard from the CEOs of Xapien and AutomatePro. We are pleased to confirm that the next in-person shareholder workshop will be held jointly with British Smaller Companies VCT2 plc on 18 June 2026 at The Royal Institution, 21 Albemarle Street, London W1S 4BS. The electronic communications policy continues to be a success, with 82 per cent of shareholders now receiving communications in this way. Documents such as the annual report are published on the website www.bscfunds.com rather than by post, saving on printing costs, as well as being more environmentally friendly. The Company's website, www.bscfunds.com, is refreshed on a regular basis and provides a comprehensive level of information in what I hope is a user-friendly format. ### Annual General Meeting The Annual General Meeting of the Company will be held at 9:30 am on 10 September 2026 at 8-10 Hill Street, London W1J 5NG. Full details of the agenda for this meeting are included in the Notice of the Annual General Meeting on page 90. ## Events after the Balance Sheet Date On 1 April 2026 the Company allotted the final shares from its fully subscribed 2025/26 share offer. Gross proceeds of £37.3 million were raised, resulting in the issue of 45,900,519 ordinary shares. This increased the number of ordinary shares in issue to 417,251,444. Subsequent to the year end, the Company has invested £3.9 million into new portfolio companies Inploi and StudentCrowd, and £6.5 million into existing portfolio companies GEEIQ and Spotless Water. ## Outlook It has once again been a year filled with encouraging progress from the Company's underlying portfolio businesses, set against broader market challenges. Venture Capital Trusts were created over 30 years ago to stimulate the growth of early-stage British companies and despite the inevitable ebb and flow of economic cycles, the Company's primary objective remains aligned with this goal. There will always be both opportunities to progress and challenges to face for VCTs, which is why the quality of their Manager is paramount. Whilst Government policy on the VCT tax reliefs and valuation multiples for SaaS businesses are out of its control, the Manager is able to use its long-standing experience, regional network of offices and large investment team to support investee companies as they scale and we are optimistic about the prospects for the Company's portfolio of investments. Noting my earlier comments about the impact of AI, shareholders should take comfort from the Manager's approach: it actively reviews the portfolio on an ongoing basis, working with portfolio companies to assess their specific AI risks and opportunities and ensure an appropriate strategy is being pursued. Its assessment of the AI threat / opportunity is also a key consideration when deploying capital into new investment opportunities. The Manager has built a network of AI experts who can assist in a variety of ways, from providing investment due diligence through to giving hands-on support to portfolio companies; this expert resource will continue to evolve in the years to come and is another example of how the Manager helps to drive value creation in the portfolio. Following another strong fundraise in the period, the Company is well-placed to continue deploying capital into new and follow-on investments. We are excited about the opportunities ahead of the Company and would like to thank shareholders for their continued support. ![img-6.jpeg](img-6.jpeg) Rupert Cook Chairman 11 June 2026 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # OBJECTIVES AND KEY POLICIES The Company's objective is to maximise Total Return and provide investors with a long-term tax free dividend yield whilst maintaining the Company's status as a venture capital trust. ## Investment Strategy The Company seeks to build a broad portfolio of investments in early-stage companies focused on growth, with the aim of spreading the maturity profiles and maximising return, as well as ensuring compliance with VCT Regulations. The Company predominantly invests in unquoted smaller companies and expects that these will continue to make up the significant majority of the portfolio. It will also retain holdings in cash or near-cash investments to provide a reserve of liquidity which will maximise the Company's flexibility as to the timing of investment acquisitions and disposals, dividend payments and share buy-backs. Unquoted investments are structured using various investment instruments, including ordinary shares, preference shares, convertible securities and very occasionally loan stock, to achieve an appropriate balance of income and capital growth, having regard to the VCT regulations. The portfolio is diversified by investing in a broad range of industry sectors. The normal investment period into the portfolio companies is typically expected to be between the range of five to seven years. ## Investment Policy The investment policy of the Company is to invest in UK businesses across a broad range of sectors that blends a mix of businesses operating in established and emerging industries that offer opportunities in the application and development of innovation in their products and services. These investments will all meet the definition of a Qualifying Investment and be primarily in unquoted UK companies. It is anticipated that the majority of these will be re-investing their profits for growth and the investments will comprise mainly equity instruments. The Company seeks to build a broad portfolio of investments in early-stage companies focused on growth with the aim of spreading the maturity profiles and maximising return as well as ensuring compliance with the VCT guidelines. ## Borrowing The Company does not borrow and has no borrowing facilities, choosing to fund investments from its own resources. ## Co-investment British Smaller Companies VCT plc and British Smaller Companies VCT2 plc (together "the VCTs") typically co-invest in investments, allocating such investments 60 per cent to the Company and 40 per cent to British Smaller Companies VCT2 plc. However, the Board of the Company has discretion as to whether or not to take up its allocation; where British Smaller Companies VCT2 plc does not take its allocation, the Board may opt to increase the Company's allocation in such opportunities. The VCTs may invest alongside co-investment funds managed by YFM, the Manager of the VCTs. The VCTs have first priority on all equity investment opportunities meeting the VCT qualifying criteria. Non-VCT qualifying investments are allocated to YFM's co-investment funds. ## Asset Mix Cash which is pending investment in VCT-qualifying securities is held in money market funds and interest bearing instant access and short-notice bank accounts. ## Remuneration Policy The Company's policy on the remuneration of its directors, all of whom are non-executive, can be found on page 50. ## Other Key Policies Details of the Company's policies on the payment of dividends, the DRIS and the buy-back of shares are given on page 2. In addition to these, details of the Company's anti-bribery and environmental and social responsibilities policies can be found on page 35. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # PROCESSES AND OPERATIONS The Manager is responsible for the sourcing and screening of investment opportunities, carrying out suitable due diligence investigations and making submissions to the Board regarding potential investments. Post investment, the Manager works with the businesses and management teams in which the Company is invested, monitoring progress, effecting change and, where applicable, redefining strategies with a view to maximising values through structured exit processes. The Board regularly monitors the performance of the portfolio and the investment requirements set by the relevant VCT legislation. Reports are received from the Manager regarding the trading and financial position of each investee company and senior members of the Manager attend the Company's Board meetings. Monitoring reports on compliance with VCT regulations are also received at each Board meeting so that the Board can monitor that the Venture Capital Trust status of the Company is maintained and take corrective action if appropriate. Monitoring reports carrying out an independent review of this compliance are received twice a year. The Board reviews the terms of YFM Private Equity Limited's appointment as Manager on a regular basis. YFM Private Equity Limited has performed investment advisory or management, administrative and secretarial services for the Company since its inception on 28 February 1996. The principal terms of the agreement under which these services are performed are set out in note 3 to the financial statements. In the opinion of the directors, the continuing appointment of YFM Private Equity Limited as Manager is in the interests of the shareholders as a whole, in view of its experience in managing venture capital trusts and in making, managing and exiting investments of the nature falling within the Company's investment policies. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # KEY PERFORMANCE INDICATORS ## Total Return Total Return, calculated by reference to the cumulative dividends paid plus net asset value (excluding tax reliefs received by shareholders), is the primary measure of performance in the VCT industry. Further explanation is given under the heading 'Financial Performance' on page 6. All returns are shown as pence per share ("pps"). ## TOTAL RETURN (as at 31 March) The chart below shows how the Total Return of the Company has developed over the last ten years. The evaluation of comparative success of the Company's Total Return is by way of reference to the Share Price Total Return for an index of VCTs that are members of the AIC. This is the Company's stated benchmark index. A comparison and explanation of the calculation of this return is shown in the Directors' Remuneration Report on page 52. - Total Return (pps) - NAV (pps) - Cumulative Dividends (pps) ![img-7.jpeg](img-7.jpeg) ## TOTAL RETURN WITH DIVIDEND RE-INVESTMENT SCHEME (as at 31 March) The chart illustrates the Total Return (excluding tax reliefs received by shareholders) for investors who subscribed to the first fundraising in 1996 who have re-invested their dividends. - Total Return (pps) ![img-8.jpeg](img-8.jpeg) British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # Shareholder Returns The Board considers Total Return to be the primary measure of shareholder value. The Internal Rate of Return (the "IRR") from the offers over the last ten years are set out below. IRR, which is an Alternative Performance Measure, is a key metric used to assess the potential profitability of an investment, with a higher IRR indicating a more profitable investment. More specifically, IRR is the annual rate of return that equates the cost at the date of the original investment, with the value of subsequent dividends plus the audited 31 March 2026 Net Asset value ("NAV"). This excludes the benefit of any initial tax relief. The IRRs shown are based on fundraisings and offer prices during the relevant calendar year whilst the second graph below shows specific financial periods to 31 March 2026. Note, as VCTs are long term investments it is too soon to give meaningful returns for the fundraisings in 2025 and 2026. ![img-9.jpeg](img-9.jpeg) Set out below is the annualised return over 10, 5, 3 and 1 years to 31 March 2026. The annualised return is calculated with reference to the cumulative dividends paid in the period plus the audited NAV at 31 March 2026, compared to the NAV at the beginning of the relevant period. ![img-10.jpeg](img-10.jpeg) British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # KEY PERFORMANCE INDICATORS (CONTINUED) ## Expenses ### Ongoing Charges The Ongoing Charges figure, as calculated in line with the AIC recommended methodology, is used by the Board to monitor expenses. This figure shows shareholders the costs of the Company's recurring operational expenses of £5,188,000 (2025: £4,394,000) as shown in note 3, expressed as a percentage of the average net asset value during the year of £284,105,000 (2025: £250,491,000). Whilst based on historical information, this provides an indication of the likely level of costs that will be incurred in managing the Company in the future. | | Year to 31 March 2026 (%) | Year to 31 March 2025 (%) | | --- | --- | --- | | Ongoing Charges figure* | 1.83 | 1.75 | * Alternative Performance Measure Shareholders benefit from the Company's agreement with the Manager to pay a lower level of management fee of 1.25 per cent (1.00 per cent prior to 1 January 2026) on surplus cash. The Company estimates that the Ongoing Charges figure for the year ended 31 March 2026 would have been c.1.91 per cent had the new fee arrangements, as set out in Note 3 on page 72, been in place for the full year, remaining one of the lowest in the VCT industry. ## Expenses Cap The total costs incurred by the Company in the year (excluding any performance related fees, trail commission - staged distribution fees - payable to financial intermediaries and VAT) is capped at 2.9 per cent of the total net asset value as at the relevant year end. The treatment of costs in excess of the cap is described in note 3 on page 72. There was no breach of the expenses cap in the current or prior year. ## Compliance with VCT Legislative Tests A principal risk facing the Company is the retention of its VCT qualifying status. The Board receives regular reports on compliance with the VCT legislative tests from the Manager. In addition, the Board receives formal reports from the Company's VCT Tax Adviser (Philip Hare & Associates LLP) twice per year. The Board can confirm that during the period, all of the VCT legislative tests have been met. Under Chapter 3 Part 6 of the Income Tax Act 2007, in addition to the requirement for a VCT's ordinary share capital to be listed in the Official List on a European regulated market throughout the period, there are further specific tests that VCTs must meet following the initial three-year provisional period. ## Income Test The Company's income in the period must be derived wholly or mainly (70 per cent) from shares or securities. ## Retained Income Test The Company must not retain more than 15 per cent of its income from shares and securities. ## Qualifying Investments Test At least 80 per cent by value of the Company's investments must be represented throughout the period by shares or securities comprised in Qualifying Investments of investee companies. For shares issued in accounting periods beginning on or after 6 April 2018, at least 30 per cent of those share issues must be invested in Qualifying Investments of investee companies by the anniversary of the accounting period in which those shares are issued. ## Eligible Shares Test At least 70 per cent of the Company's Qualifying Investments must be represented throughout the period by holdings of non-preferential shares. Investments made before 6 April 2018 from funds raised before 6 April 2011 are excluded from this requirement. At least 10 per cent of the Company's total investment in each Qualifying Investment must be in eligible shares. In addition, monies are not permitted to be used to finance buy-outs or otherwise to acquire existing businesses or shares. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # Investment Limits There is an annual limit for each investee company which provides that they may not raise more than £10 million (£5 million prior to 6 April 2026) of state aided investment (including from VCTs) in the 12 months ending on the date of each investment (£20 million for Knowledge Intensive Companies, £10 million prior to 6 April 2026). There is also a lifetime limit that a business may not raise more than £24 million (£12 million prior to 6 April 2026) of state aided investment (including from VCTs); the limit for Knowledge Intensive Companies is currently £40 million (£20 million prior to 6 April 2026). # Maximum Single Investment Test The value of any one investment must not, at any time in the period, represent more than 15 per cent of the Company's total investment value. This is calculated at the time of investment and updated should there be further additions; as such, it cannot be breached passively. The Board can confirm that during the period, all of the VCT legislative tests set out above have been met, where required. Further restrictions placed on VCTs are: # Dividends from Cancelled Share Premium The Finance Act 2014 introduced a restriction with respect to the use of monies by VCTs. In particular, no dividends can be paid out of share capital or cancelled share premium arising from shares allotted on or after 6 April 2014 until at least three full financial years have elapsed from the date of allotment. In October 2025 the Company cancelled the balance of its Share Premium Account of £132.0 million, which will become distributable over the period to 1 April 2029, as set out on page 64. Also in October 2025, the Company reduced the nominal value of the share capital of the Company from 10 pence per ordinary share to 0.01 pence per ordinary share, creating additional distributable reserves of £39.1 million, which will also become distributable over the period to 1 April 2029, as set out on page 64. # Other No more than seven years can have elapsed since the first commercial sale achieved by the business (ten years in the case of a Knowledge Intensive Company), unless: a. The business has previously received an investment from a source that has received state aid; or b. The investment comprises more than 50 per cent of the average of the previous five years' turnover and the funds are to be used in the business to fund growth into new product markets and/or new geographies. Wherever possible, the Company self-assures that an investment is a Qualifying Investment, subject to the receipt of professional advice. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # PORTFOLIO STRUCTURE AND ANALYSIS ## Portfolio Structure The broad range of the portfolio is illustrated below, with 44 per cent of the portfolio valuation being held for more than five years, while 91 per cent is valued at cost or above. 3 per cent of the portfolio value is held in loans and preference shares. ![img-11.jpeg](img-11.jpeg) AGE OF INVESTMENTS (%) ![img-12.jpeg](img-12.jpeg) | | 2026 | 2025 | | --- | --- | --- | | Less than 1 year | 6% | 8% | | Between 1 and 3 years | 15% | 32% | | Between 3 and 5 years | 35% | 18% | | Greater than 5 years | 44% | 42% | | Total | 100% | 100% | - Less than 1 year - Between 1 and 3 years - Between 3 and 5 years - Greater than 5 years ![img-13.jpeg](img-13.jpeg) VALUE COMPARED TO COST (%) ![img-14.jpeg](img-14.jpeg) | | 2026 | 2025 | | --- | --- | --- | | Value above cost | 85% | 91% | | At cost | 6% | 6% | | Value below cost | 9% | 3% | | Total | 100% | 100% | - Value above cost - At cost - Below cost British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report ## INVESTMENT INSTRUMENT (%) ![img-15.jpeg](img-15.jpeg) ![img-16.jpeg](img-16.jpeg) | | 2026 | 2025 | | --- | --- | --- | | Equity | 97% | 96% | | Loans and preference shares | 3% | 4% | | Total | 100% | 100% | - Loans and Preference Shares - Equity ## Portfolio Analysis Also included below is a profile of the portfolio by industry sector. ## INDUSTRY SECTOR (%) ![img-17.jpeg](img-17.jpeg) ![img-18.jpeg](img-18.jpeg) | | 2026 | 2025 | | --- | --- | --- | | Application Software | 40% | 29% | | Tech-enabled Services | 20% | 19% | | Data | 18% | 27% | | Cloud & DevOps | 12% | 12% | | Retail & Brands | 4% | 4% | | New Media | 3% | 5% | | Business Services | 2% | 2% | | Other | 1% | 2% | | Total | 100% | 100% | - Application Software - Tech-enabled Services - Data - Cloud & DevOps - Retail & Brands - New Media - Business Services - Other British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # INVESTMENT REVIEW ## THE PORTFOLIO ### £159.1m (2025: £153.4m) Fair value of the portfolio ### £0.4m (2025: £0.7m) Income from the portfolio in the year ### £22.7m (2025: £29.3m) Level of investment in the year ### £1.3m (2025: £7.1m) Return from the portfolio in the year The portfolio added £1.3 million of value on the opening fair value of £153.4 million. The composition of investments continues to evolve, with £22.7 million invested in the period and proceeds of £18.3 million recognised from the opening portfolio. The movements in the investment portfolio are set out in Table A below: **Table A** **Investment Portfolio** | | Total £million | | --- | --- | | Opening fair value at 1 April 2025 | 153.4 | | Additions | 22.7 | | Disposal proceeds | (18.3) | | Valuation movement | 1.3 | | Closing fair value at 31 March 2026 | 159.1 | | Accrued income | 0.7 | | Financial assets - investments | 159.8 | At 31 March 2026 the portfolio was valued at £159.1 million, representing 55.7 per cent of net assets (59.7 per cent at 31 March 2025). Cash and cash equivalents at 31 March 2026 of £122.3 million represented 42.8 per cent of net assets (38.9 per cent at 31 March 2025). ## Fair Value Changes **Table B** **Gain from Investment Portfolio** | | £million | | --- | --- | | Change in fair value from the portfolio | (0.1) | | Gain on disposal over opening value from the portfolio | 1.4 | | Gain arising from the portfolio | 1.3 | | Deferred consideration from prior year realisations | 0.2 | | Gain arising from the investment portfolio | 1.5 | Of the £1.5 million gain in the year, £1.6 million arose from investments which were realised, including deferred consideration recognised from investments realised in prior years. Further details can be found in the Chairman's Statement and note 7 to the financial statements. The ongoing portfolio delivered a net value loss of £0.1 million in the year. There were strong valuation gains from some of the fastest growing portfolio companies, such as Xapien, Summize and Unbiased. The reduction in British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report valuation multiples used to value software companies has impacted portfolio valuations, with several companies showing a fall in their holding value despite a growth in their underlying revenues during the period. The Manager continues to take a proactive approach to managing the portfolio and benefits from having one of the largest and most experienced investment teams in the VCT industry. The scale of this expert resource allows the Manager to provide appropriate support to both high-performing and underperforming investments, as it seeks to maximise the returns for the Company's shareholders. ## Other Significant Investment Movements ### Investments During the year ended 31 March 2026, the Company invested £22.7 million across 15 companies. Five new companies were added to the portfolio, receiving aggregate investment of £11.1 million; while a further £11.6 million was invested across ten existing portfolio companies. The analysis of these investments is shown in Table C below. Table C Investments | Company | Investments made | | | | --- | --- | --- | --- | | | New £million | Follow-on £million | Total £million | | Summize | - | 3.0 | 3.0 | | TeamFeePay | 2.7 | - | 2.7 | | TiPJAR | 2.7 | - | 2.7 | | S4labour | 2.4 | - | 2.4 | | AutomatePro | - | 1.8 | 1.8 | | DynaRisk | 1.8 | - | 1.8 | | Fuuse | - | 1.8 | 1.8 | | Plandek | - | 1.6 | 1.6 | | Xapien | - | 1.5 | 1.5 | | Aura Life | 1.5 | - | 1.5 | | Ohalo | - | 0.9 | 0.9 | | Force24 | - | 0.4 | 0.4 | | Panintelligence | - | 0.3 | 0.3 | | Relative Insight | - | 0.2 | 0.2 | | Sipsynergy | - | 0.1 | 0.1 | | Total | 11.1 | 11.6 | 22.7 | Since the year end the Company has invested a further £6.5 million into existing portfolio companies GEEIQ and Spotless Water. The case studies on pages 24 and 25 give more information on these investments. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # INVESTMENT REVIEW (CONTINUED) ## Disposal of Investments As set out in Table D below, during the year ended 31 March 2026 the Company recognised proceeds from disposals of £18.5 million, a net gain of £1.6 million over the opening carrying value at the beginning of the year, and an overall net gain of £8.9 million over cost. This included the successful realisations of SharpCloud, Teraview and Elucidat. Further details are given in the Chairman's Statement on page 7. ## Table D Disposal of Investments | | Net proceeds from sale of investments £million | Opening value 31 March 2025 £million | Gain on opening value £million | | --- | --- | --- | --- | | Portfolio | 18.3 | 16.9 | 1.4 | | Deferred consideration | 0.2 | - | 0.2 | | Total investment disposals | 18.5 | 16.9 | 1.6 | Further analysis of all investments sold in the year can be found in note 7 to the financial statements on page 79. ## Investment Portfolio Composition As at 31 March 2026, the portfolio was valued at £159.1 million, comprising wholly of unquoted investments. An analysis of the movements in the year is shown on page 77. The largest investment, Matillion, represents 6.8 per cent of the net asset value. The charts on pages 16 and 17 show the diversity of the portfolio, split by industry sector, investment instrument, age of investment and the valuation compared to cost. Under VCT legislation, it is not possible to deposit funds for longer than seven days, which means that cash deposits must be available on very short notice. The Company takes an active approach to cash management, whilst pursuing its primary aim of capital preservation. This is effected through (i) the use of a pool of money market funds, which can be converted back to cash with immediate notice; and (ii) cash deposits held with Tier 1 banking institutions. £4.5 million of income was earned from money market funds and bank deposits during the year, equating to a weighted average interest rate of 3.8 per cent across the year. At 31 May 2026, the Company was achieving a weighted average return on liquid assets of 3.5 per cent per annum. ## Valuation Policy Unquoted investments are valued in accordance with both IFRS 13 'Fair Value Measurement' and International Private Equity and Venture Capital Guidelines (the "IPEV Guidelines"). Initially, at the first quarter-end following investment, investments are valued at the price of the funding round; following this, the valuation switches to a new primary basis for all subsequent periods. The valuation methodology applied depends upon the facts and circumstances of each individual investment. This may be with reference to revenue multiples, earnings multiples, net assets, discounted cash flows or calibrated from the price of the most recent investment. The full valuation policy is set out in note 1 on pages 67 to 69. Table E below shows the value of investments within each valuation category as at 31 March 2026; no investments are valued using discounted cash flow methodologies. With continued investment in earlier stage businesses that are investing for growth, the majority of valuations continue to be based on revenue multiples. ## Table E Valuation Policy | | Valuation £million | 2026 % of portfolio by value | 2025 % of portfolio by value | | --- | --- | --- | --- | | Revenue multiple | 142.6 | 90 | 91 | | Earnings multiple | 8.2 | 5 | 5 | | Cost or price of recent investment, reviewed for change in fair value | 4.2 | 3 | 2 | | Net assets, reviewed for change in fair value | 2.4 | 1 | 2 | | Sale proceeds | 1.7 | 1 | - | | Total | 159.1 | 100 | 100 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # Responsible Investment and Environmental, Social and Governance ("ESG") Management The Company backs small UK businesses to help them to grow, with the primary aim to produce strong financial returns for shareholders. However, in doing this we believe this can have a significant positive impact on our economy and society through economic growth, jobs creation and innovation. At the same time the Company aims to help the businesses it invests in become better and more sustainable businesses over time. The Manager maintains a Responsible Investment (RI) policy that sets out its approach to integrating responsible investment practices into its operations and investment activities. This policy outlines the processes the Manager follows and describes how environmental, social and governance (ESG) risks are considered and incorporated when appropriate. Please view the Manager's policy here: www.yfmep.com/our-purpose The Manager's approach is based on the belief that sustainable businesses: ![img-19.jpeg](img-19.jpeg) GROW OUR ECONOMY ![img-20.jpeg](img-20.jpeg) IMPROVE OUR SOCIETY ![img-21.jpeg](img-21.jpeg) VALUE THEIR PEOPLE ![img-22.jpeg](img-22.jpeg) PROTECT THE ENVIRONMENT This approach is consistent with the Company's financial aims, as improvements in these areas can strengthen the resilience and value creation potential of portfolio businesses through their increased attractiveness to customers, employees, suppliers, and eventual future owners and investors. Underpinning the Manager's approach to responsible investing is the United Nations' Principles for Responsible Investment (PRI), which the Manager has been a signatory to since 2020. The Manager is rated 4 stars (out of 5) by the PRI. # Responsible Investment Principles This set of principles guides the Manager's investment process: > To seek to understand the ESG related impacts and risk factors of the businesses the Company invests in, aiming to enhance positive impacts and to avoid, reduce or minimise any negative impacts where possible over an investment's lifetime, leaving them overall better businesses; > To play a positive role in the investor, business and wider communities by promoting good practice in ESG management, and by being transparent in the way that investments are made and how the Manager behaves; > To increase focus on the challenge of climate change both as it may be affected by our investments, and as it may impact on them and their resilience to possible climate change scenarios; and > To show leadership by managing the Manager's own business' ESG impacts to the best of its ability. The Manager has developed processes to help portfolio businesses to improve in these areas, by assessing them in terms of creating positive impacts and outcomes and preventing or minimising negative ones. The Manager has developed and integrated the following ESG management processes: ## Pre-investment Phase: The Manager applies an ESG screening process at the pre-investment stage to identify material risks and potential improvement areas. An assessment is also made for any links to excluded sectors or high risk practices. ## Portfolio Phase: During the portfolio phase the Manager works with each management team to assess ESG priorities and then works with each business to improve performance in ESG areas. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report INVESTMENT REVIEW (CONTINUED) # ESG PERFORMANCE DATA AND REPORTING ## GROWING OUR ECONOMY - Average revenue growth rate of 17 per cent across the portfolio during 2025 - Over £49 million of R&D investment during 2025 - £92 million of export sales achieved in 2025 - c.1,100 new jobs were created from date of investment to 2025 representing a 69 per cent increase ## VALUING OUR PEOPLE - 54 per cent had mental well-being programmes in place and held regular employee engagement surveys - 57 per cent of the portfolio held DE&I training for employees in 2025 - 39 per cent of companies had female representation at board-level, with 14 per cent having a female CEO/MD - 54 per cent of businesses had a designated board member with responsibility for improving ESG issues - 37,500+ hours of non-statutory training were given to employees across the portfolio ## IMPROVING OUR SOCIETY - 82 per cent of the portfolio employees underwent cyber security training, and 64 per cent of portfolio companies have a cyber accreditation or management system in place - 74 per cent was the average customer rating of portfolio companies in 2025 - 89 per cent of companies were independently chaired in 2025 ## PROJECTING THE ENVIRONMENT - 32 per cent had Environmental Policies in place - 29 per cent formally measured their carbon footprint in 2025 - 14 per cent have embedded an active carbon reduction plan British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report > Reporting: Data is collected on an annual basis across a variety of ESG areas across our investments. Note that investment companies such as the Company are not within scope for reporting under the Task Force on Climate-Related Financial Disclosures (TCFD); and the Company does not use more than 40,000kWh of energy and therefore is not required to report on its energy usage within Streamlined Energy and Carbon Reporting (SECR) regulations. > Oversight and Support: The Manager monitors the responsible investment approach. This includes delivering events and webinars and providing resources focused on key ESG themes such as environmental management, diversity and inclusion, company culture and cyber security. ## Summary and Outlook Technological change, geopolitical tensions and regulatory developments have been and will continue to be a feature of the broader landscape that the Company and other VCTs operate in. In such an environment, balance sheet strength and investment management experience are critical components in the equation for delivering sustained success for VCT shareholders. We believe the Company is well-placed on both accounts: firstly, the successful fundraise during the year combined with the future potential of the existing portfolio holdings means the Company is well-capitalised and able to pursue its strategies for investment deployment and shareholder distributions; secondly, the Manager is strategically and commercially aligned with the Company and benefits from one of the largest investment teams in the VCT market, ensuring it has the means, motivation and ability to continue driving value growth. The Company will continue to seek to deploy funds into new and existing portfolio businesses, which have the potential to deliver strong returns to shareholders and make a positive impact on the wider UK economy. We are grateful for the ongoing opportunity to keep delivering this strategy for shareholders and look ahead with optimism at the Company's prospects. ![img-23.jpeg](img-23.jpeg) Jamie Roberts YFM Private Equity Limited 11 June 2026 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # CASE STUDIES ![img-24.jpeg](img-24.jpeg) ## GEEIQ ### AMOUNT INVESTED £2.4 million in September 2023, with a £2.9 million follow-on in May 2026 ### THE BUSINESS AT INVESTMENT A data and market intelligence platform, focused on the virtual world gaming space ### THE INVESTMENT Initial investment to grow sales, marketing, and product development. Subsequent funding round to further accelerate sales and market capabilities in the US ### RATIONALE FOR THE DEAL Investing in a first-mover, data-driven platform enabling brands to measure, attribute and optimise marketing spend in gaming and virtual worlds, a rapidly growing marketing channel ### SINCE INVESTMENT Virtual worlds continue to shift from an experimental channel to a structural part of marketing, mirroring social media's evolution a decade ago. GEEIQ is uniquely positioned as the impartial, cross-platform data intelligence layer, providing key measurability to brands investing in the space British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report ![img-25.jpeg](img-25.jpeg) # SpotlessWater ## AMOUNT INVESTED £2.2 million in June 2024, with a £3.6 million follow-on in May 2026 ## THE BUSINESS AT INVESTMENT Operator of self-service purified water refill stations, predominantly servicing the window cleaning market in the UK at present ## THE INVESTMENT Growth capital to fund the rollout of new sites, build out the central team and operational infrastructure, and further prove the scalability and repeatability of the site-level economics ## RATIONALE FOR THE DEAL Backing a differentiated rollout model with attractive payback and recurring revenue. Upside through ongoing improvements in site selection, operational efficiency and estate optimisation ## SINCE INVESTMENT The business has outsourced manufacturing, installation and surveying to improve scalability and capital efficiency. Senior hires have been added, financial reporting enhanced and sales processes strengthened, which has supported improved site performance and rollout momentum British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # PORTFOLIO SUMMARY at 31 March 2026 | Page No | Name of company | Date of initial investment | Location | Industry sector | Amount invested £000 | Valuation at 31 March 2026 £000 | Recognised income/ proceeds to date £000 | Realised & unrealised value to date* £000 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 29 | Matillion Limited | Nov-16 | Manchester | Data | 2,666 | 19,398 | 7,071 | 26,469 | | 29 | Unbiased EC1 Limited | Dec-19 | London | Tech-enabled Services | 5,596 | 16,141 | - | 16,141 | | 30 | Xapien (via Digital Insight Technologies Ltd) | Mar-23 | London | Application Software | 7,607 | 15,339 | - | 15,339 | | 30 | Summize Limited | Oct-22 | Manchester | Application Software | 5,552 | 13,533 | - | 13,533 | | 30 | Vypr Validation Technologies Limited | Jan-21 | Manchester | Tech-enabled Services | 5,698 | 11,750 | - | 11,750 | | 30 | AutomatePro Limited | Dec-22 | London | Cloud & DevOps | 5,885 | 8,172 | - | 8,172 | | 31 | DrDoctor (via ICNH Ltd) | Feb-23 | London | Application Software | 5,355 | 6,351 | - | 6,351 | | 31 | Plandek Limited | Oct-22 | London | Cloud & DevOps | 5,121 | 5,779 | - | 5,779 | | 31 | Workbuzz Analytics Limited | Jun-23 | Milton Keynes | Application Software | 4,703 | 5,312 | - | 5,312 | | 31 | Outpost VFX Limited | Feb-21 | Bournemouth | New Media | 5,750 | 5,062 | 170 | 5,232 | | | Fuuse Limited | May-24 | Lancaster | Application Software | 4,800 | 4,938 | - | 4,938 | | | Force24 Ltd | Nov-20 | Leeds | Application Software | 4,275 | 4,320 | 283 | 4,603 | | | Tonkotsu Limited | Jun-19 | London | Retail & Brands | 2,388 | 4,017 | - | 4,017 | | | Quality Clouds Limited | May-22 | London | Cloud & DevOps | 5,821 | 3,625 | - | 3,625 | | | Spotless Water Limited | Jun-24 | Frimley | Business Services | 2,183 | 3,045 | - | 3,045 | | | S4labour Limited | Apr-25 | Banbury | Application Software | 2,400 | 2,881 | - | 2,881 | | | TeamFeePay (via Concept Apps Ltd) | Dec-25 | Belfast | Application Software | 2,700 | 2,700 | - | 2,700 | | | TiPJAR (via Pocket Change Pioneers Ltd) | Mar-26 | London | Application Software | 2,700 | 2,700 | - | 2,700 | | | Ohalo Limited | Jun-24 | London | Data | 2,565 | 2,570 | - | 2,570 | | | GEEIQ (via Checkpoint GG Limited) | Sep-23 | London | Data | 2,358 | 2,541 | - | 2,541 | | | Stormharvester Holdings Limited | Jan-25 | Belfast | Data | 2,100 | 2,507 | - | 2,507 | | | Frescobol Carioca Ltd | Mar-19 | London | Retail & Brands | 1,800 | 2,132 | - | 2,132 | | | DynaRisk (via Zen Risk Limited) | Jul-25 | London | Application Software | 1,800 | 1,871 | - | 1,871 | | | Arcus Global Limited | May-18 | Cambridge | Application Software | 3,075 | 1,830 | 361 | 2,191 | | | Biorelate Limited | Nov-22 | Manchester | Application Software | 2,310 | 1,620 | - | 1,620 | | | Aura Life Limited | Mar-26 | Godalming | Tech-enabled Services | 1,500 | 1,500 | - | 1,500 | | | Other investments below £1.5 million | | | | 25,504 | 7,509 | 11,001 | 18,510 | | | Total unquoted investments | | | | 124,212 | 159,143 | 18,886 | 178,029 | | | Full disposals to date | | | | 96,517 | - | 198,579 | 198,579 | | | Total portfolio | | | | 220,729 | 159,143 | 217,465 | 376,608 | * represents income and proceeds recognised to date plus the unrealised valuation at 31 March 2026. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # SUMMARY OF PORTFOLIO MOVEMENT | Name of company | Investment valuation at 31 March 2025 £000 | Disposal proceeds £000 | Additions £000 | Valuation gains/(losses) including profits/(losses) on disposal £000 | Investment valuation at 31 March 2026 £000 | | --- | --- | --- | --- | --- | --- | | Xapien (via Digital Insight Technologies Ltd) | 7,964 | - | 1,512 | 5,863 | 15,339 | | Summize Limited | 6,366 | - | 3,002 | 4,165 | 13,533 | | Unbiased EC1 Limited | 13,253 | - | - | 2,888 | 16,141 | | Teraview Limited | 1,044 | (3,041) | - | 1,997 | - | | SharpCloud Software Limited | 7,952 | (9,105) | - | 1,153 | - | | Vypr Validation Technologies Limited | 10,638 | - | - | 1,112 | 11,750 | | S4labour Limited | - | - | 2,400 | 481 | 2,881 | | Spotless Water Limited | 2,588 | - | - | 457 | 3,045 | | Arcus Global Limited | 1,410 | - | - | 420 | 1,830 | | Stormharvester Holdings Limited | 2,100 | - | - | 407 | 2,507 | | Tonkotsu Limited | 3,812 | - | - | 205 | 4,017 | | Fuuse Limited | 3,000 | - | 1,800 | 138 | 4,938 | | Frescobol Carioca Ltd | 2,033 | - | - | 99 | 2,132 | | DynaRisk (via Zen Risk Limited) | - | - | 1,800 | 71 | 1,871 | | DrDoctor (via ICNH Ltd) | 6,345 | - | - | 6 | 6,351 | | Other investments below £1.5 million | 3,294 | - | 127 | 4 | 3,425 | | TeamFeePay (via Concept Apps Ltd) | - | - | 2,700 | - | 2,700 | | TiPJAR (via Pocket Change Pioneers Ltd) | - | - | 2,700 | - | 2,700 | | Aura Life Limited | - | - | 1,500 | - | 1,500 | | Plandek Limited | 4,218 | - | 1,581 | (20) | 5,779 | | KeTech Technology Holdings Limited | 1,315 | - | - | (144) | 1,171 | | Ohalo Limited | 2,040 | - | 900 | (370) | 2,570 | | GEEIQ (via Checkpoint GG Limited) | 2,965 | - | - | (424) | 2,541 | | Elucidat Ltd | 5,869 | (5,397) | - | (472) | - | | Biorelate Limited | 2,351 | - | - | (731) | 1,620 | | Workbuzz Analytics Limited | 6,119 | - | - | (807) | 5,312 | | Relative Insight Limited | 2,065 | - | 206 | (873) | 1,398 | | AutomatePro Limited | 7,222 | - | 1,860 | (910) | 8,172 | | Integrum ESG Limited | 1,740 | - | - | (978) | 762 | | Panintelligence (via Paninsight Limited) | 1,500 | - | 281 | (1,028) | 753 | | Vuealta Holdings Limited | 2,045 | (724) | - | (1,321) | - | | Force24 Ltd | 5,934 | - | 375 | (1,989) | 4,320 | | Outpost VFX Limited | 7,123 | - | - | (2,061) | 5,062 | | Quality Clouds Limited | 5,867 | - | - | (2,242) | 3,625 | | Matillion Limited | 23,238 | - | - | (3,840) | 19,398 | | Total portfolio | 153,410 | (18,267) | 22,744 | 1,256 | 159,143 | | Deferred consideration | - | (255) | - | 255 | - | | Total | 153,410 | (18,522) | 22,744 | 1,511 | 159,143 | | Accrued income | 1,136 | | | | 723 | | Total | 154,546 | | | | 159,866 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # INVESTEE COMPANY INFORMATION APPLICATION SOFTWARE £63.4m NUMBER OF COMPANIES: 13 RETAIL & BRANDS £6.4m NUMBER OF COMPANIES: 2 TECH-ENABLED SERVICES £32.0m NUMBER OF COMPANIES: 5 NEW MEDIA £5.4m NUMBER OF COMPANIES: 3 DATA £28.5m NUMBER OF COMPANIES: 6 BUSINESS SERVICES £3.0m NUMBER OF COMPANIES: 2 CLOUD & DEVOPS £18.8m NUMBER OF COMPANIES: 4 OTHER £1.6m NUMBER OF COMPANIES: 5 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report PORTFOLIO # THE TOP 10 INVESTMENTS HAD A COMBINED VALUE OF # £106.8m 67.1 PER CENT OF THE TOTAL PORTFOLIO Financial information is derived from publically available report and accounts. 1. Return to date Represents income and proceeds recognised to date, plus the unrealised valuation at 31 March 2026. # Matillion Limited Manchester www.matillion.com Matillion is a leading provider of cloud-based data extraction and transformation tools. The company helps businesses utilise their data in the cloud for insight and decision making and is headquartered in Manchester with offices in Denver and Seattle. | Date of initial investment: | November 2016 | | --- | --- | | Amount invested: | £2,666,000 | | Valuation at 31 March 2026: | £19,398,000 | | Recognised income/proceeds to date: | £7,071,000 | | Return to date1: | £26,469,000 | | Equity held: | 3.3% | | Valuation basis: | Revenue multiple | | Year ended 31 January | 2025 $million | 2024 $million | | --- | --- | --- | | Revenue | 92.97 | 92.64 | | LBITA | (32.06) | (47.74) | | Loss before tax | (29.78) | (44.42) | | Retained losses | (220.26) | (190.00) | | Net assets | 108.11 | 133.41 | # Unbiased EC1 Limited London www.unbiased.co.uk Unbiased is a technology-enabled marketplace that connects consumers to Independent Financial Advisers, Mortgage Brokers and Accountants. The company has a strong, well-established position and brand awareness in the IFA market with a high level of recurring subscription income from the thousands of professionals in their network. The proven UK model is now being launched into the much larger US financial advisor market. | Date of initial investment: | December 2019 | | --- | --- | | Amount invested: | £5,596,000 | | Valuation at 31 March 2026: | £16,141,000 | | Recognised income/proceeds to date: | £nil | | Return to date1: | £16,141,000 | | Equity held: | 18.7% | | Valuation basis: | Revenue multiple | | Year ended 30 September | 2025 £million | 2024 £million | | --- | --- | --- | | Revenue | 17.94 | 13.82 | | EBITA (LBITA) | 4.00 | (1.03) | | Profit (loss) before tax | 2.42 | (2.28) | | Retained losses | (2.80) | (5.60) | | Net assets | 3.87 | 3.38 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # PORTFOLIO (CONTINUED) ## Xapien (via Digital Insight Technologies Ltd) London www.xapien.com Xapien is an online software platform that automates detailed background research on individuals and companies, using proprietary AI and Natural Language Processing models to screen large volumes of structured and unstructured data. It significantly speeds up the time it takes to conduct enhanced due diligence, for customers that include universities, charities, law firms and banks. | Date of initial investment: | March 2023 | | --- | --- | | Amount invested: | £7,607,000 | | Valuation at 31 March 2026: | £15,339,000 | | Recognised income/proceeds to date: | £nil | | Return to date¹: | £15,339,000 | | Equity held: | 16.6% | | Valuation basis: | Revenue Multiple | | Year ended 31 December | 2024 £million | 2023 £million | | --- | --- | --- | | Retained losses | (10.06) | (6.42) | | Net assets | 5.45 | 1.48 | ## Vynr Validation Technologies Limited Manchester www.vynrclients.com Vynr is a cloud-based data validation platform providing industry-leading consumer intelligence for use in all aspects of product development including packaging, pricing and naming. | Date of initial investment: | January 2021 | | --- | --- | | Amount invested: | £5,698,000 | | Valuation at 31 March 2026: | £11,750,000 | | Recognised income/proceeds to date: | £nil | | Return to date¹: | £11,750,000 | | Equity held: | 22.3% | | Valuation basis: | Revenue multiple | | Year ended 31 March | 2025 £million | 2024 £million | | --- | --- | --- | | Retained losses | (4.82) | (4.40) | | Net assets | 6.01 | 1.51 | ## Summize Limited Manchester www.summize.com Summize is a provider of contract lifecycle management (CLM) software for enterprise and mid-market customers including Revolut, Fujifilm, Miami Heat and Matillion. The cloud-based product integrates through Microsoft Word, Teams, Slack and DocuSign to automate the creation, negotiation and project management of high volume, low value commercial contracts, which improves efficiency and contract portfolio risk management for corporate in-house legal teams. | Date of initial investment: | October 2022 | | --- | --- | | Amount invested: | £5,552,000 | | Valuation at 31 March 2026: | £13,533,000 | | Recognised income/proceeds to date: | £nil | | Return to date¹: | £13,533,000 | | Equity held: | 14.7% | | Valuation basis: | Revenue multiple | | Year ended 30 June | 2025 £million | 2024 £million | | --- | --- | --- | | Retained losses | (9.80) | (7.61) | | Net assets | 1.36 | 3.55 | ## AutomatePro Limited London www.automatepro.com AutomatePro is a provider of automated testing and documentation tools for enterprise users of ServiceNow workflow automation, enabling new application and upgrades to be installed efficiently and safely. The company has sales teams in the UK and US, but also sells via a growing number of partners. | Date of initial investment: | December 2022 | | --- | --- | | Amount invested: | £5,885,000 | | Valuation at 31 March 2026: | £8,172,000 | | Recognised income/proceeds to date: | £nil | | Return to date¹: | £8,172,000 | | Equity held: | 18.3% | | Valuation basis: | Revenue multiple | | Year ended 30 June | 2025 £million | 2024 £million | | --- | --- | --- | | Revenue | 3.98 | 2.03 | | LBITA | (3.72) | (2.32) | | Loss before tax | (3.96) | (2.49) | | Retained losses | (10.23) | (6.56) | | Net (liabilities) assets | (0.19) | 0.29 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # DrDoctor (via ICNH Ltd) London www.drdoctor.co.uk DrDoctor is a digital patient engagement solution that links patients and clinicians in NHS secondary care trusts (hospitals). DrDoctor's platform gives patients better access to care through patient-led bookings, waitlist management to fill cancelled slots, and digital access to clinicians outside of appointments. | Date of initial investment: | February 2023 | | --- | --- | | Amount invested | £5,355,000 | | Valuation at 31 March 2026 | £6,351,000 | | Recognised income/ proceeds to date: | £nil | | Return to date1: | £6,351,000 | | Equity held: | 6.7% | | Valuation basis: | Revenue multiple | | Year ended 31 December | 2024£million | 2023£million | | --- | --- | --- | | Revenue | 16.08 | 10.05 | | LBITA | (4.81) | (8.68) | | Loss before tax | (4.55) | (8.43) | | Retained losses | (15.53) | (11.40) | | Net (liabilities) assets | (2.36) | 1.64 | # Wokbuzz Analytics Limited Milton Keynes www.workbuzz.com Workbuzz is a SaaS-based employee engagement and insights platform that is targeted at deskless and frontline workers. It enables businesses to gather real time employee feedback, track employee wellbeing and make more informed data driven people decisions. The business is UK focused and expanding internationally. | Date of initial investment: | June 2023 | | --- | --- | | Amount invested | £4,703,000 | | Valuation at 31 March 2026 | £5,312,000 | | Recognised income/ proceeds to date: | £nil | | Return to date1: | £5,312,000 | | Equity held: | 13.6% | | Valuation basis: | Revenue multiple | | Year ended 31 March | 2025£million | 2024£million | | --- | --- | --- | | Retained losses | (10.47) | (8.34) | | Net assets | 2.90 | 1.76 | | Date of initial investment: | October 2022 | | --- | --- | | Amount invested | £5,121,000 | | Valuation at 31 March 2026 | £5,779,000 | | Recognised income/ proceeds to date: | £nil | | Return to date1: | £5,779,000 | | Equity held: | 17.3% | | Valuation basis: | Revenue multiple | | Year ended 31 December | 2024£million | 2023£million | | --- | --- | --- | | Retained losses | (10.47) | (8.34) | | Net assets | 2.90 | 1.76 | # Outpost VFX Limited Bournemouth www.outpost-vfx.com Outpost is a visual effects firm best known for their striking environments, seamless digital makeup and photoreal creatures. The company is headquartered in Bournemouth, with studios in London, Montreal and Mumbai. An impressive client list includes global streaming platforms such as Netflix, Amazon and Apple, and major Hollywood Studios. | Date of initial investment: | February 2021 | | --- | --- | | Amount invested: | £5,750,000 | | Valuation at 31 March 2026: | £5,062,000 | | Recognised income/ proceeds to date: | £170,000 | | Return to date1: | £5,232,000 | | Equity held: | 18.1% | | Valuation basis: | Revenue multiple | | Interest: | £22,438 (2025: £95,096) | | Year ended 31 March | 2025£million | 2024£million | | --- | --- | --- | | Revenue | 23.80 | 38.39 | | (LBITA) EBITA | (3.74) | 0.72 | | (Loss) profit before tax | (4.15) | 0.48 | | Retained losses | (13.01) | (9.49) | | Net (liabilities) assets | (2.33) | 1.19 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # RISK FACTORS The Board has responsibility for identifying, assessing and monitoring the risks to which the Company is exposed and for maintaining appropriate systems and controls to manage those risks. The Board regularly reviews the risk environment in which the Company operates, including changes in market conditions, regulation and the wider economic and operational environment, and seeks to identify emerging risks that may affect the Company's ability to achieve its investment objectives. The risks described below represent the principal and emerging risks currently considered by the Board to be relevant to the Company. These risks are not intended to be exhaustive and additional risks and uncertainties, including those not currently known to the Company or which the Board presently considers to be immaterial, may also have an adverse effect on the Company's business, financial condition, performance or prospects. ## Investment & Portfolio The Company's performance is dependent on the performance of individual portfolio companies. Unquoted growth companies may require additional funding to support their development and growth, and such funding may not be available on acceptable terms or at all. Portfolio companies may also be adversely affected by changes in market conditions, customer demand, competitive dynamics or regulatory requirements. Poor performance or failure of one or more portfolio companies could have a material adverse effect on the Company's net asset value and returns to shareholders. The Manager actively monitors portfolio company performance and provides strategic, operational and governance support where appropriate. Investment risk is mitigated through disciplined investment selection and diversification across sectors and investment stages. Follow on funding decisions are made selectively and subject to capital availability. ## Liquidity Investments in unquoted companies are inherently illiquid and it may take a considerable period of time to realise investments. Exits are typically dependent on trade sales, secondary transactions or other corporate events, which may not occur when anticipated or at all. In some cases, investments may only be realised at a value materially below their carrying value, or may not be realised, which could restrict the Company's ability to return capital to shareholders. The Company and Manager monitor liquidity and cash resources on an ongoing basis and seek to manage the timing of investments and realisations. ## Economic Adverse economic conditions, including recession, inflation, interest rate changes or geopolitical instability, may adversely affect portfolio companies, restrict access to funding and delay or reduce exit opportunities. Market volatility may also impact investor sentiment and valuations. The Company seeks to mitigate this risk through diversification and active portfolio management. The Board regularly considers macroeconomic conditions as part of its review of strategy and performance. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # VCT Qualifying Status The continued availability of VCT tax reliefs is dependent on the Company continuing to satisfy the conditions for VCT approval, including compliance with qualifying investment requirements applicable to unquoted companies. A breach of the VCT legislation could result in the withdrawal of VCT status, which would have significant adverse tax consequences for shareholders, including the loss of income tax relief and the taxation of dividends and capital gains. The Board monitors compliance with the VCT rules on an ongoing basis and receives regular reports from the Manager and VCT Status Adviser. Specialist tax advice is obtained as required, and a formal review of compliance with the VCT rules is conducted bi-annually and reported to the Board. # Legislative and Regulatory The Company operates in a regulatory environment that is subject to change. Amendments to VCT legislation, changes in HMRC practice or interpretation, or broader changes to financial services regulation could restrict the Company's ability to pursue its investment strategy, increase compliance costs or adversely affect returns. The Board and Manager monitor legislative and regulatory developments and engage external legal and tax advisers as appropriate. The Company seeks to maintain flexibility within its investment policy to adapt to regulatory change, but such change remains outside the Company's control. # Operational The Company has no employees and is reliant on a number of third party service providers, including the Manager, receiving agent, registrar and other professional advisers, for the day to day operation of the business. As a result, the Company is exposed to the risk of failure, disruption or poor performance by these third parties, including operational errors, systems failures, cyber security incidents or the loss of key personnel. Any such failure could result in financial loss, regulatory breaches or reputational damage and could adversely affect the Company's operations or performance. The Board seeks to mitigate this risk through oversight of service providers, the use of experienced and regulated counterparties, and regular review of service arrangements and internal controls. # IT & Cyber Security The Company is reliant on information technology systems operated by the Manager, the registrar and other third party service providers for the processing, storage and reporting of data. As a result, the Company is exposed to risks arising from cyber security incidents, data breaches, systems failures or technological disruption, whether caused by malicious attack, human error or third party failure. Such incidents could result in financial loss, regulatory breaches, loss of confidential information or reputational damage, and may adversely affect the Company's operations or the services provided to shareholders. The Board seeks to mitigate this risk through oversight of service providers, the use of established systems and controls, and regular review of cyber security and business continuity arrangements. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # OTHER MATTERS ## Section 172 Statement This Section 172 Statement should be read in conjunction with the other contents of the Strategic Report, on pages 6 to 35. Section 172 of the Companies Act 2006 requires that a director must act in a way that they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to: - The likely consequences of any decision in the long term; - The interests of the company's employees; - The need to foster the company's business relationships with suppliers, customers and others; - The impact of the company's operations on the community and the environment; - The desirability of the company maintaining a reputation for high standards of business conduct; and - The need to act fairly as between members of the company. The Company takes a number of steps to understand the views of investors and other key stakeholders and considers these, along with the matters set out above, in Board discussions and decision making. ## Key Stakeholders As an investment company with no employees, the Company's key stakeholders are its investors, its service providers and its portfolio companies. ## Investors The Board engages and communicates with shareholders in a variety of ways. The Company encourages shareholders to attend its Annual General Meeting. Along with British Smaller Companies VCT2 plc, the Company holds an annual Investor Workshop. The most recent event on 19 June 2025 was well attended. A further event is scheduled for June 2026. Maintaining the Company's status as a VCT is critical to meeting the Company's objective to maximise Total Return and provide investors with an attractive long-term tax-free dividend yield. The Company receives regular reports on this issue from the Manager and has taken various steps in the year to ensure that the relevant tests are met. The Board also aims for investors to continue to have tax efficient opportunities to invest in the Company, and to generate tax-free returns from both capital appreciation and ongoing dividends. After carefully considering its funding needs, on 25 September 2025 the Company issued a prospectus, alongside British Smaller Companies VCT2 plc, to raise up to £85 million in aggregate for the 2025/26 tax year. During the year the Board kept its arrangements for dividends, share buy-backs and the dividend re-investment scheme under constant review. Normal dividends totalling 4.00 pence per ordinary share were paid in the year ended 31 March 2026. To ensure the Company has sufficient distributable reserves to facilitate the above arrangements, the Company recommended resolutions at the 2025 Annual General Meeting relating to the cancellation of the Company's share premium account, and the reduction in the nominal value of the Company's issued share capital. The approved resolutions have created £171.1 million of additional distributable reserves over the next four years, as set out on page 64. There is no dilution to shareholders' interests from the resolutions. ## Manager The Company's most important service provider is its Manager. There is regular contact with the Manager, and members of the Manager's board attend all of the Company's Board meetings. There is also an annual strategy meeting with the Manager, alongside the board of British Smaller Companies VCT2 plc. The Manager maintains strong relationships with relevant media publications and a wide range of distributors for the Company's shares, including wealth managers, independent financial advisers and execution-only brokers. RAM Capital acts as a promoter of the Company's shares to smaller distributors. The Company is a member of the Association of Investment Companies which promotes the interests of investment companies, including VCTs. The Manager is a founder member of the Venture Capital Trust Association, which promotes the interests of VCTs in a variety of ways. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Strategic Report # Portfolio Companies The Company holds minority investments in its portfolio companies and has delegated the management of the portfolio to the Manager. The Manager provides the Board with regular updates on the performance of each portfolio company at least quarterly and the Board is made aware of all major issues. The Manager has a dedicated portfolio team to assist the portfolio companies with the challenges that they face as fast-growing companies. The Manager promotes ongoing sustainable growth within the businesses; this often involves improving systems and processes, as well as significant job creation. # Employees The Company has no employees. The Board is composed of four non-executive directors. For a review of the policies used when appointing directors to the Board of the Company, please refer to the Directors' Remuneration Report. # Environment and Community The Company seeks to ensure that its business is conducted in a manner that is responsible to the environment. The management and administration of the Company is undertaken by the Manager, YFM Private Equity Limited, which recognises the importance of its environmental responsibilities and is a signatory of the United Nations' Principles for Responsible Investment. More details of the work that the Manager has achieved in this area are set out on pages 21 to 23. Its Responsible Investment Policy can be found at www.yfmep.com/our-purpose. # Business Conduct The Company has a zero tolerance approach to bribery and corruption. The following is a summary of the controls in place: - The Company conducts all its business in an honest and ethical manner. The Company is committed to acting professionally, fairly and with integrity in all its business dealings and relationships; - The Company prohibits the offering, the giving, the solicitation or the acceptance of any bribe; - The Company has communicated its Anti-Bribery & Corruption Policy to the Manager and its other service providers; and - The Manager has its own Anti-Bribery & Corruption Policy and monitors portfolio companies' compliance with their legal obligations. # Statement on Long-term Viability The statement on long-term viability on page 38 is included in the Strategic Report by reference. The Strategic Report on pages 6 to 35 is approved by order of the Board. ![img-26.jpeg](img-26.jpeg) # Rupert Cook Chairman 11 June 2026 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # DIRECTORS ## Rupert Cook Chairman – independent Non-Executive Director (appointed to the Board 1 August 2017, took over the role of Chairman on 16 September 2022) specialises in strategy and corporate development, with 30 years' experience of technology companies, including 20 years in corporate finance and investment. He has led multiple fundraisings, acquisitions and sales of technology businesses as well as having co-founded and built up his own consultancy and training business through to sale to a UK plc. Earlier in his career, he was a senior manager at Cap Gemini plc, Director of Advisory Services at Interregnum plc, Head of Technology M&A at goetzpartners corporate finance and Chief Strategy Officer at Immersive Labs. As well as being an active angel investor, both in the UK and the US, Rupert is currently Chairman of Overe and Red Penguin Ventures. ## Adam Bastin Chairman of the Investment Committee – independent Non-Executive Director (appointed 11 September 2019) is currently EVP, Strategy & Corporate Development of Francisco Partners backed Keyloop, a B2B vertical software company, where he is responsible for strategic direction as well as the acquisition and integration of complementary businesses. Prior to that, Adam held the equivalent role at TA Associates-backed Unit4, an ERP software vendor and before that spent eight years leading acquisition and investments at Arm Limited, the world's largest semiconductor IP company. Previously Adam worked at BT Group and spent ten years in investment banking. Adam therefore brings a well-developed network in the technology sector in the UK and internationally, and brings a wealth of experience of investing in, acquiring and selling smaller companies. Adam is an experienced M&A, corporate finance and investment professional, a qualified management accountant (CIMA), and has served on the boards of various early-stage technology companies. ## Jonathan Cartwright Chairman of the Audit & Risk Committee and the Nominations and Remuneration Committee – independent Non-Executive Director (appointed 1 October 2019) is a chartered accountant with significant experience of the VCT and investment trust sectors. He has previously served as Chair of the former Mobeus Income & Growth 4 VCT plc and of CT UK Capital and Income Investment Trust plc. ## Purvi Sapre Independent Non-Executive Director (appointed 6 June 2022) is currently Chief Investment Officer of Sustainable Development Capital LLP, a mid-market investment firm focusing on energy transition investments in Europe and North America. Purvi has over 20 years' investment experience in the UK and international capital markets, investing on behalf of debt, equity and impact investment funds, including listed and unlisted funds. ## Secretary The City Partnership (UK) Limited The Mending Rooms Park Valley Mills Meltham Road Huddersfield HD4 7BH Registered No: SC269164 ## Registered Office of the Company 4th Floor 2 Bond Court Leeds LS1 2JZ ## Registered No: 03134749 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance DIRECTORS' REPORT For the year ended 31 March 2026 The directors present their report and audited financial statements of British Smaller Companies VCT plc ("the Company") for the year ended 31 March 2026. ## Principal Activity The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of the registered office and principal place of business is 4th Floor, 2 Bond Court, Leeds, LS1 2JZ. The Company has its primary, and sole, listing on the London Stock Exchange. The principal activity of the Company is the making of long-term equity and loan investments, mainly in unquoted businesses. The Company operates as a venture capital trust ("VCT") and has been approved by HM Revenue & Customs as an authorised venture capital trust under Chapter 3 Part 6 of the Income Tax Act 2007. It is the directors' intention to continue to manage the Company's affairs in such a manner as to comply with Chapter 3 Part 6 of the Income Tax Act 2007. ## Business Performance and Future Prospects A detailed and fair review of the Company's business, its development, its financial performance during and at the end of the financial year, and its prospects is set out in the Strategic Report on pages 6 to 35. The principal risks and uncertainties the Company faces are detailed on pages 32 and 33. The Board believes that the Annual Report and Financial Statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy. ## Results and Dividends The Statement of Comprehensive Income is set out on page 61. The profit before and after taxation for the year amounted to £939,000 (2025: £6,769,000). During the year the Company paid a total of £14,183,000 (2025: £15,849,000) in dividends totalling 4.00 pence per ordinary share (2025: 5.25 pence). A detailed review can be found in note 5 on page 75. The directors have announced an interim dividend of 2.00 pence per ordinary share for the year ending 31 March 2027. The dividend will be paid on 17 July 2026 to shareholders on the register on 19 June 2026. The net asset value per ordinary share at 31 March 2026 was 76.90 pence (2025: 80.55 pence). The transfer to and from reserves is given in the Statement of Changes in Equity on page 63. ## Going Concern The directors have carefully considered the issue of going concern in view of the Company's activities and associated risks. The Company has a well-diversified portfolio with businesses in a variety of sectors, many of which are well funded. Some portfolio companies may require additional funding in the near- to medium-term; the Company is well placed to provide this, where appropriate. The Company has a significant level of liquidity, which was enhanced by the final allotment of the 2025/26 fundraising post-year-end, in April 2026. In addition, the Board has control over, and can flex as appropriate, the Company's major outgoings, which predominantly comprise investments, dividends and share buy-backs. The directors have also assessed whether material uncertainties exist and their potential impact on the Company's ability to continue as a going concern; they have concluded that no such material uncertainties exist. The directors have carefully considered the issue of going concern and are satisfied that the Company has sufficient resources to meet its obligations as they fall due for a period of at least 12 months from the date of this report. As at 31 March 2026, the Company held cash balances and money market funds with a combined value of £122.3 million; this excludes £36.1 million received from the final allotment of the 2025/26 fundraising on 1 April 2026. Cash flow projections show the Company has sufficient funds to meet both its contracted expenditure and its discretionary cash outflows in the form of share buy-backs and dividends. In the year ended 31 March 2026, the Company's costs and discretionary expenditures were: | | £'000 | | --- | --- | | Administrative expenses | 5,492 | | Share buy-backs | 5,411 | | Dividends (before DRIS) | 14,183 | | Total | 25,086 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # DIRECTORS' REPORT (CONTINUED) Taking all of the above into consideration, the directors are satisfied that the Company has sufficient resources to meet its obligations for at least 12 months from the date of this report and therefore believe that it is appropriate to continue to apply the going concern basis of accounting in preparing the financial statements. ## Statement on Long-term Viability The AIC Code requires the Board to assess the Company's viability over an appropriate period. The directors believe that a period of three years is appropriate to assess the Company's viability because the Company is required to invest funds raised within this timeframe in order to retain its status as a VCT. In making their assessment, the directors have reviewed the types of investment that the Company will be able to make under current VCT legislation and they believe that the existing portfolio and future investments will be able to deliver the Company's objective "to maximise total return and provide investors with a long-term tax-free dividend yield whilst maintaining the Company's status as a venture capital trust". The directors have also taken into account the emerging and principal risks and their mitigation identified in the Strategic Report on pages 32 and 33, the nature of the Company's business, including its reserves of cash (including proceeds of £36.1 million following the final allotment of the 2025/26 fundraising on 1 April 2026), the potential of its venture capital portfolio to generate returns in the future and, as noted above, the ability of the directors to minimise the level of cash outflows, should this be necessary. Taking into account the Company's current position and principal risks, the directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over that period. ## Corporate Governance The statement on corporate governance set out on pages 41 to 49 is included in the Directors' Report by reference. ## Directors' and Officers' Liability Insurance The Company has, as permitted by the Companies Act 2006, maintained insurance cover on behalf of the directors, indemnifying them against certain liabilities which may be incurred by any of them in relation to the Company. ## Provision of Information to the External Auditor The directors confirm that so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware; and that each of the directors has taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. ## Share Capital As shown in note 11 of the financial statements, the Company has only one class of share, being ordinary shares of 0.01 pence each. ## Buy-back and Issue of Ordinary Shares Under the existing authority, which expires on the conclusion of the Company's Annual General Meeting in 2026 or on 14 September 2026, whichever is the later, the Company has the power to purchase shares up to 14.99 per cent of the Company's ordinary share capital as at 16 June 2023, being 36,161,754 ordinary shares. This authority will be replaced by a new authority at the forthcoming Annual General Meeting. During the year, the Company purchased 7,125,546 ordinary shares in the market (as disclosed in the table on page 39), for aggregate consideration, including costs, of £5,411,000. These shares are held in treasury. The buy-backs were in accordance with the Company's buy-back policy, and under the authorities granted by the shareholders at the Annual General Meeting held on 14 September 2023. At 31 March 2026 41,324,542 shares were held in treasury, representing 10.0 per cent of the total issued share capital (including treasury shares) at that date. The directors have unconditional authority to allot shares in the Company or to grant rights to subscribe for or to convert any security into ordinary shares in the Company up to an aggregate amount of 90,000,000 shares, expiring on the conclusion of the Company's Annual General Meeting in 2026 or 9 December 2026, whichever is the later. This authority will be replaced by a new authority to issue shares up to an aggregate nominal amount of £9,000, equivalent to 90,000,000 shares at this year's Annual General Meeting. In addition, the directors have unconditional authority to allot shares and waive pre-emption rights in the Company in connection with the Company's Dividend Re-investment Scheme (DRIS), up to an aggregate British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance amount of 20,000,000 shares, expiring on the conclusion of the Company's Annual General Meeting in 2026 or 9 December 2026, whichever is the later. This authority will be replaced by a new authority to issue shares up to an aggregate nominal amount of £2,000, equivalent to 20,000,000 shares at the forthcoming Annual General Meeting. During the year to 31 March 2026, a total of 56,283,871 shares were issued from the Company's fundraising and 3,013,943 ordinary shares were issued under the Company's DRIS. Buy-back of Shares | Date | Number of ordinary shares of 0.01p bought back | Percentage of issued share capital at that date | Consideration paid per ordinary share (pence) | | --- | --- | --- | --- | | 23 June 2025 | 1,495,509 | 0.42% | 77.02 | | 22 September 2025 | 1,333,613 | 0.37% | 75.88 | | 19 December 2025 | 2,231,911 | 0.63% | 74.65 | | 27 March 2026 | 2,064,513 | 0.55% | 75.27 | ## Capital Disclosures The following information has been disclosed in accordance with Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended): > The Company's capital structure is summarised in note 11 to the financial statements. Each ordinary share carries one vote. There are no restrictions on voting rights or any agreement between holders of securities that result in restrictions on the transfer of securities or on voting rights; > There are no securities carrying special rights with regard to the control of the Company; > The Company does not have an employee share scheme; > The rules concerning the appointment and replacement of directors, amendments to the Articles of Association and powers to issue or buyback the Company's shares are contained in the Articles of Association of the Company and the Companies Act 2006; > With the exception of the Manager's Incentive Agreement, there are no agreements to which the Company is party that take effect, alter or terminate upon a change in control following a takeover bid; and > There are no agreements between the Company and its directors providing for compensation for loss of office that may occur because of a takeover bid. ## Environment The Company is a low energy user and is therefore exempt from the reporting obligations under the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. The Company has no greenhouse gas emissions to report from the operations of the Company, nor does it have responsibility for any emissions producing sources including those within its underlying investment portfolio under part 7 of schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended. ## Directors and their Interests The directors of the Company as at 31 March 2026, their interests and contracts of significance are set out in the Directors' Remuneration Report on pages 50 to 52. ## Substantial Shareholdings The directors are not aware of any substantial shareholdings representing 3 per cent or more of the Company's issued share capital as at 31 March 2026 and the date of this report. ## Independent Auditor BDO LLP has indicated its willingness to continue in office and a resolution concerning its reappointment will be proposed at the Annual General Meeting. There were no non-audit services provided by BDO LLP during the year. ## Financial Instruments Details of the financial instruments held by the Company and the risks associated with them are set out on pages 85 to 89 and this information is accordingly incorporated into the Directors' Report by reference. ## Employment Policies The employment policies of the Company are set out on page 52. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # DIRECTORS' REPORT (CONTINUED) ## Events after the Balance Sheet Date On 1 April 2026 the Company allotted the final shares from its fully subscribed 2025/26 share offer. Gross proceeds of £37.3 million were raised, resulting in the issue of 45,900,519 ordinary shares. This increased the number of ordinary shares in issue to 417,251,444. Subsequent to the year end, the Company has invested £3.9 million into new portfolio companies Inploi and StudentCrowd, and £6.5 million into existing portfolio companies GEEIQ and Spotless Water. ## Annual General Meeting Shareholders will find the Notice of the Annual General Meeting on pages 90 to 94 of these financial statements. The business of the meeting includes the following Resolutions. Resolution 9 is an ordinary resolution proposed to ensure the directors retain the authority to allot shares in the Company until the later of 10 December 2027 or the date of the 2027 Annual General Meeting up to an aggregate nominal amount of £9,000 (representing approximately 21.6 per cent of the issued ordinary share capital of the Company as at 11 June 2026, excluding treasury shares). Resolution 10 is an additional ordinary resolution proposed to ensure the directors retain the authority to allot shares in the Company under the Company's DRIS until the later of 10 December 2027 or the date of the 2027 Annual General Meeting up to an aggregate nominal amount of £2,000 (representing approximately 4.8 per cent of the issued ordinary share capital of the Company as at 11 June 2026, excluding treasury shares). Also included are the following special resolutions: - Resolution 11 is proposed to empower the directors to allot shares under the authority granted by the ordinary resolution (Resolution 9) above and to sell treasury shares without regard to any rights of pre-emption on the part of the existing shareholders. - Resolution 12 is proposed to empower the directors to allot shares under the authority granted by the ordinary resolution (Resolution 10) above without regard to any rights of pre-emption on the part of the existing shareholders. - Resolution 13 is proposed to renew the existing share buy-back authority which expires on the later of 14 September 2026 or the date of the 2026 Annual General Meeting (shares purchased under this authority may be placed in treasury). This report was approved by the Board on 11 June 2026 and signed on its behalf by ![img-27.jpeg](img-27.jpeg) ## Rupert Cook Chairman British Smaller Companies VCT plc Registered number 03134749 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # CORPORATE GOVERNANCE The Board is committed to the principle and application of sound corporate governance and confirms that the Company has taken steps, appropriate to a venture capital trust and relevant to its size and operational complexity, to comply with the principles and recommendations of the Association of Investment Companies' Code of Corporate Governance available on the AIC website www.theaic.co.uk. The AIC Corporate Governance Code (August 2024) (the "AIC Code") provides a framework of best practice for investment companies and addresses all relevant principles of the UK Corporate Governance Code (January 2024) issued by the Financial Reporting Council (the "FRC"), while also setting out additional principles and recommendations of particular relevance to the Company as an externally managed venture capital trust. The 2024 UK Corporate Governance Code and the 2024 AIC Code apply to financial years beginning on or after 1 January 2025, replacing the 2018 UK Corporate Governance Code and the 2019 AIC Code, which applied to earlier accounting periods. Provision 29 is effective for financial years beginning on or after 1 January 2026. The Board considers that reporting against the principles and provisions of the AIC Code provides the most appropriate and relevant governance framework for the Company and offers shareholders clear and meaningful insight into the Company's governance arrangements. Given the Company's size and its externally managed structure, the Board considers that it would be unnecessarily burdensome to establish a separate management engagement committee. Matters relating to the performance and oversight of the Manager are instead addressed by the Board as a whole. The Company is committed to maintaining high standards of corporate governance and, for the period under review, has complied with the principles and provisions of the AIC Corporate Governance Code (August 2024), except as set out below. The AIC Code includes provisions relating to the appointment of a chief executive officer, the designation of a senior independent director, the presumption regarding the independence of the Chair and the establishment of an internal audit function. For the reasons set out in the AIC Code, the Board considers that these provisions are not relevant to the Company, which is an externally managed venture capital trust with no employees. Accordingly, the Company has not reported further in respect of these provisions. ## Role of the Board An agreement between the Company and YFM Private Equity Limited sets out the matters over which the Manager has authority. This includes monitoring of the Company's assets and the provision of accounting, company secretarial, administration and some marketing services. All other matters are reserved for the approval of the Board. A formal schedule of matters reserved to the Board for decision has been approved. This includes determination and monitoring of the Company's investment objectives and policy and its future strategic direction, gearing policy, management of the capital structure, appointment and removal of third party service providers, review of key investment and financial data and the Company's corporate governance, risk control and custody arrangements. The Board meets at least quarterly; additional meetings are arranged as necessary. Full and timely information is provided to the Board to enable it to function effectively and to allow directors to discharge their responsibilities. There is an agreed procedure for directors to take independent professional advice, if necessary, at the Company's expense. This is in addition to the access that every director has to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that applicable rules and regulations are complied with and that Board procedures are followed. The Company indemnifies its directors and officers and has purchased insurance to cover its directors. Neither the insurance nor the indemnity provide cover if the director has acted fraudulently or dishonestly. ## Board Composition The Board consists of four non-executive directors, all of whom are regarded by the Board as independent of each other and also of the Company's Manager, including the Chairman. The independence of the Chairman was assessed upon his appointment. Although the AIC Code presumes that the chairman of a company is deemed not to be an independent director, the remaining directors, having considered the nature of the role in the Company, are satisfied that Mr R Cook fulfils the criteria for independence as a non-executive director. The directors have a breadth of investment, business and financial skills and experience relevant to the Company's business British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # CORPORATE GOVERNANCE (CONTINUED) and provide a balance of power and authority including recent and relevant financial experience. Brief biographical details of each director are set out on page 36. A review of Board composition and balance is included as part of the annual performance evaluation of the Board, details of which are given below. There are no executive officers of the Company. Given the structure of the Board and the fact that the Company's administration is conducted by YFM Private Equity Limited, the Company has not appointed a chief executive officer or a senior independent non-executive director. In addition, the directors consider that the role of a senior independent non-executive director is taken on by all of the directors. Shareholders are therefore able to approach any director with any queries they may have. ## Boardroom Diversity The Board is committed to ensuring that the Company is run in the most effective manner. Consequently the Board monitors the diversity of all directors to ensure an appropriate level of experience and qualification. The Board believes in the value and importance of diversity in the boardroom but does not consider that it is appropriate or in the best interests of the Company and its shareholders to set prescriptive targets for gender or ethnicity on the Board. Diversity of thought, experience and approach are all important and the directors will always seek to appoint on merit against objective criteria. In the year the Company has not met the Listing Rule board diversity target of the Board comprising at least 40 per cent women; the Board's current ratio reflects the small, four person composition of the Board. The target of at least one of the chairman, CEO, CFO or senior independent director being a woman has not been met in the year. As an investment company, the Company does not have a CEO or CFO, and has not appointed a senior independent director. The target of at least one member of the Board being from an ethnically diverse background was met in the year. | | Number of Board members | Percentage of the Board | | --- | --- | --- | | Male | 2 | 50 | | Female | 1 | 25 | | Prefer not to say | 1 | 25 | | | Number of Board members | Percentage of the Board | | --- | --- | --- | | White British | 2 | 50 | | Asian/Asian British | 1 | 25 | | Prefer not to say | 1 | 25 | ## Tenure Directors are initially appointed until the following Annual General Meeting when, under the Company's Articles of Association, it is required that they be elected by shareholders. Thereafter, it is the Board's policy that a director's appointment will run for a term of one year until the next Annual General Meeting. Subject to the performance evaluation carried out each year, the Board will agree whether it is appropriate for the director to seek a further term. The Board, when making a recommendation, will take into account the ongoing requirements of the AIC Code, including the need to refresh the Board and its Committees. The Board seeks to maintain a balance of skills and the directors are satisfied that as currently composed the balance of experience and skills of the individual directors is appropriate for the Company, in particular with regards to investment appraisal and investment risk management. The terms and conditions of directors' appointments are set out in formal letters of appointment, copies of which are available for inspection on request at the Company's registered office and at the Annual General Meeting. All appointments are terminable by either the director or the Company on three months' notice. The directors recommend the re-election of Mr A C N Bastin, Mr J H Cartwright, Mr R Cook and Ms P Sapre at this year's Annual General Meeting, because of their commitment, experience and contribution to the Company. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # Meetings and Committees The Board delegates certain responsibilities and functions to Committees. Directors who are not members of Committees may attend at the invitation of the Chairman. The table below details the number and function of the meetings attended by each director. During the year there were eight formal Board meetings, three Audit & Risk Committee meetings, two Allotment Committee meetings, one Nominations & Remuneration Committee meeting and one General meeting. The directors met via video, telephone and electronic conferences on 25 other occasions. ## Meetings Attended | Director | Mr R Cook | Mr A C N Bastin | Mr J H Cartwright | Ms P Sapre | Total | | --- | --- | --- | --- | --- | --- | | Board meetings | 8 | 8 | 5 | 8 | 8 | | Audit & Risk Committee | 3 | 3 | 3 | 3 | 3 | | Allotment Committee | 2 | 1 | 1 | 1 | 2 | | Nominations & Remuneration Committee | 1 | 1 | 1 | 1 | 1 | | Video, telephone & electronic conferences | 25 | 24 | 24 | 24 | 25 | | General meeting | 1 | 1 | - | 1 | 1 | | Total | 40 | 38 | 34 | 38 | 40 | In addition, there were two DRIS allotment meetings which the directors were not required to attend, but which were attended by the Company Secretary. ## Training and Appraisal On appointment, the Manager and Company Secretary provide all directors with induction training. Thereafter, regular briefings are provided on changes in regulatory requirements that affect the Company and its directors. Directors are encouraged to attend industry and other seminars covering issues and developments relevant to VCTs. The performance of the Board has been evaluated in respect of the financial year ended 31 March 2026. The Board, led by the Chairman, has conducted a performance evaluation to determine whether it and individual directors are functioning effectively. The factors taken into account were based on the relevant provisions of the AIC Code and included attendance and participation at Board and Committee meetings, commitment to Board activities and the effectiveness of their contribution. The results of the overall evaluation process are communicated to the Board. Performance evaluation continues to be conducted on an annual basis. The Chairman has confirmed that the performance of the other directors being proposed for re-election continues to be effective and that they continue to show commitment to the role. The independent directors have similarly appraised the performance of the Chairman. They considered that the performance of Mr R Cook continues to be effective. ## Audit & Risk Committee The Audit & Risk Committee consists of the directors of the Company. It meets at least three times each year. The directors consider that it is appropriate that the Chairman of the Committee should be Mr J H Cartwright due to his experience in the role. The members of the Committee consider that they have the requisite skills and experience to fulfil the responsibilities of the Committee, and that the Chairman of the Committee meets the requirements of the AIC Code as to recent and relevant financial experience. Given the small size of the Board, which is comprised solely of independent non executive directors, the Board considers it appropriate for the Chairman to serve as an additional member of the Audit & Risk Committee. The Chairman was independent on appointment and brings relevant financial and governance experience. In line with the AIC Code's 'comply or explain' requirements, the Board is satisfied that this arrangement remains effective and appropriate, and the Chairman does not chair the Committee. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # CORPORATE GOVERNANCE (CONTINUED) The Audit & Risk Committee's terms of reference include the following roles and responsibilities: - Monitoring and making recommendations to the Board in relation to the Company's published financial statements (including in relation to the valuation of the Company's unquoted investments) and other formal announcements relating to the Company's financial performance; - Monitoring and making recommendations to the Board in relation to the Company's internal control (including internal financial control) and risk management systems; - Annually considering the need for an internal audit function; - Making recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditor and approving the remuneration and terms of engagement of the external auditor; - Reviewing and monitoring the external auditor's independence and objectivity and effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements; - Reviewing and monitoring the Company's tax status and compliance; - Monitoring the extent to which the external auditor is engaged to supply non-audit services; and - Ensuring that the Manager has arrangements in place for the investigation and follow-up of any concerns raised confidentially by staff in relation to the propriety of financial reporting or other matters. It reviews the terms of the investment management agreement and examines the effectiveness of the Company's internal control and risk management systems, receives information from the Manager's compliance department and reviews the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the external auditor. The directors' statement on the Company's system of internal control is set out on pages 47 and 48. The Audit & Risk Committee has written terms of reference which clearly define its responsibilities, copies of which are available for inspection on request at the Company's registered office and at the Annual General Meeting, and also on the Company's website at www.bscfunds.com. The Company does not have an independent internal audit function as it is not deemed appropriate given the size of the Company and the nature of the Company's business. However, the Committee considers annually whether there is a need for such a function and, if so, would recommend this to the Board. During the year ended 31 March 2026 the Audit & Risk Committee discharged its responsibilities by: - Reviewing and approving the external auditor's terms of engagement, remuneration and independence; - Reviewing the external auditor's plan for the audit of the Company's financial statements, including identification of key risks; - Reviewing YFM Private Equity Limited's register of risks and controls operated in relation to the Company's business and assessing the effectiveness of those controls in minimising the impact of key risks; - Reviewing reports on the effectiveness of the Manager's compliance procedures; - Reviewing the appropriateness of the Company's accounting policies; - Reviewing the Company's draft annual financial statements, half yearly results statement and interim management statements prior to Board approval, including the proposed fair value of investments as determined by the directors; - Reviewing the external auditor's detailed reports to the Committee on the annual financial statements; and - Recommending to the Board and shareholders the re-appointment of BDO LLP as the Company's external auditor. The key areas of risk that have been identified and considered by the Audit & Risk Committee in relation to the business activities and financial statements of the Company are as follows: - Valuation of unquoted investments; and - Compliance with HM Revenue & Customs' conditions for maintenance of approved venture capital trust status. These issues were discussed with the Manager and the auditor at the pre-year end audit planning meeting and at the conclusion of the audit of the financial statements. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # Valuation of Unquoted Investments The Audit & Risk Committee reviewed the estimates and judgements made in the investment valuations and was satisfied that they were appropriate. The Manager confirmed to the Audit & Risk Committee that the investment valuations had been carried out consistently with prior periods and in accordance with published industry guidelines, taking account of the latest available information about investee companies; current market data; and a report from the auditor, including key audit findings in respect of the valuations. # Venture Capital Trust Status The Manager confirmed to the Audit & Risk Committee that the conditions for maintaining the Company's status as an approved venture capital trust had been complied with throughout the year. The position was also reviewed by the Company's Tax Status Advisers. # Financial Statements The Manager confirmed to the Audit & Risk Committee that it was not aware of any material unadjusted misstatements. Having reviewed the reports received from the Manager and the auditor, the Audit & Risk Committee is satisfied that the key areas of risk and judgement have been appropriately addressed in the financial statements and that the significant assumptions used in determining the value of assets and liabilities and revenue recognition have been properly appraised and are sufficiently robust. # Relationship with the Auditor The Audit & Risk Committee is responsible for overseeing the relationship with the external auditor, assessing the effectiveness of the external audit process and making recommendations on the appointment and removal of the external auditor. It makes recommendations to the Board on the level of audit fees and the terms of engagement for the auditor. The external auditor is invited to attend committee meetings, where appropriate, and also meets with the Committee and its Chairman without the representatives of the Manager being present. The Committee undertakes a review of the external auditor's effectiveness of the audit process. The Committee considers whether the auditor has: > Demonstrated strong technical knowledge and clear understanding of the business; > Indicated professional scepticism in key judgements and raised any significant issues in advance of the audit process commencing; > Allocated an audit team that is appropriately resourced; > Demonstrated a proactive approach to the audit planning process and engaged with the Audit & Risk Committee Chairman and other key individuals within the business; > Provided a clear explanation of the scope and strategy of the audit; > Demonstrated the ability to communicate clearly and promptly with the members of the Committee and the Manager and produce comprehensive reports on its findings; > Demonstrated that it has appropriate procedures and safeguards in place to maintain its independence and objectivity; and > Charged justifiable fees in respect of the scope of services provided. The Board regularly reviews and monitors the external auditor's independence and objectivity. As part of this process it reviews the nature and extent of services supplied by the auditor to ensure that independence is maintained. It is the Company's policy to contract the external auditors to perform audit-related services only. The auditor prepares an audit strategy document on an annual basis. This provides information on the audit team and timetable, audit scope and objectives, evaluation of materiality, initial assessment of key audit and accounting risks, confirmation of independence and proposed fees. This is reviewed and approved by the Audit & Risk Committee with an opportunity to consider the audit approach and to raise any queries with the auditor. The outcome of the review together with any actions that have arisen are formally minuted and a summary is submitted to the Board for consideration. The Audit & Risk Committee assesses the effectiveness of the external audit process annually and makes a recommendation to the Board on the re-appointment of the auditor. This is considered by the Board prior to agreeing the recommendation to shareholders for the re-appointment of the auditor at each Annual General Meeting of the Company. As part of its review, the Audit & Risk Committee considers the performance of the auditor and whether it has met the agreed audit plan, British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # CORPORATE GOVERNANCE (CONTINUED) the quality of its reporting in its management letter and the cost effectiveness of the services provided as well as the manner in which it has handled key audit issues and responded to the Audit & Risk Committee's questions. In accordance with professional guidelines, the audit engagement partner is rotated off the audit after five years; this is the fifth year of the current partner's tenure. In July 2025 the FRC published its annual assessment of quality among the Tier 1 audit firms. The Company's external auditor, BDO LLP, is one of the six Tier 1 audit firms, and was therefore subject to a review by the FRC's Audit Quality Review team. The FRC's report identified a number of areas for improvement for the auditor but noted improvements in the Financial Services practice and commented upon improved results in its internal quality monitoring. The Committee discussed the FRC's findings along with the auditor's action plan in detail with BDO LLP. BDO LLP have confirmed that they are committed to the highest standards of audit quality and will continue to work closely with the FRC to address any areas of concern. The Committee will continue to monitor the auditor's progress. Having completed its review, the Audit & Risk Committee is satisfied that BDO LLP remained effective and independent in carrying out its responsibilities up to the date of signing this report and its recommendation for reappointment is endorsed by the Board. No non-audit services were provided by BDO LLP during the year. # Nominations & Remuneration Committee The Company has a combined Nominations & Remuneration Committee, which consists of the directors, all of whom are considered by the Board to be independent of the Manager. Mr J H Cartwright acts as Chairman of the Nominations & Remuneration Committee. The Nominations & Remuneration Committee reviews the Company's remuneration policy so as to determine and agree the remuneration to be paid to each director of the Company and is responsible for the production of the Directors' Remuneration Report which may be found on pages 50 to 52. Given the small size of the Company and the fact that it has no employees and is overseen solely by independent non executive directors, the Board considers it appropriate to act as the Nomination & Remuneration Committee, and in accordance with the AIC Code's 'comply or explain' requirements the Board is satisfied that this structure remains effective and proportionate for the Company. In considering appointments to the Board, the Nominations & Remuneration Committee takes into account the ongoing requirements of the Company and the need to have a balance of skills and experience within the Board. Meetings are held as and when required. There was one Nominations & Remuneration Committee meeting during the year. The Board considers succession planning at least annually, especially in relation to the positions of the Chairman and the Chairman of the Audit & Risk Committee. # Investment Committee The Investment Committee currently consists of the non-executive directors. The Chairman of the Committee is Mr A C N Bastin. The Investment Committee is authorised to make investment decisions (including new investment, further investment, variation and realisation decisions) on behalf of the Board. The Manager is authorised to approve follow-on investment decisions of up to £600,000 on behalf of the Company for well-performing investments. The delegated limit is kept under review. The Investment Committee has written terms of reference which define clearly its responsibilities, copies of which are available for inspection on request at the Company's registered office and on the Company's website at www.bscfunds.com. # Allotment Committee The Company has an Allotment Committee, which consists of the directors, all of whom are considered by the Board to be independent of the Manager. The quorum for Committee meetings is one director, unless otherwise determined by the Board. In addition, the Company Secretary has an authority to allot shares under the DRIS. The Committee considers and, if appropriate, authorises the allotment of shares. The Committee ensures that the total number of shares to be issued does not exceed the authority given by the shareholders. There are no written terms of reference. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # Relations with Shareholders The Board regularly monitors the shareholder profile of the Company. It aims to provide shareholders with a full understanding of the Company's activities and performance, and reports formally to shareholders at least twice a year by way of the Annual Report and the Interim Report. This is supplemented by the publication of the net asset value of the Company for the two quarters of the year where an Annual or Interim Report is not normally issued (30 June and 31 December), through the London Stock Exchange. All shareholders have the opportunity, and are encouraged, to attend the Company's Annual General Meeting, at which the directors and representatives of the Manager are available in person to meet with and answer shareholders' questions. In addition, representatives of the Manager periodically hold shareholder workshops which review the Company's performance and industry developments, and which give shareholders a further opportunity to meet members of the Board and chief executives or chairs of some of the investee companies. During the year, the Company's Manager has held regular discussions with shareholders. The directors are made fully aware of shareholders' views. The Chairman and directors make themselves available, as and when required, to address shareholder queries. The directors may be contacted through the Company Secretary, whose details are shown on page 36. The Company's Annual Report and Notice of the Annual General Meeting are published in time to give shareholders at least 21 clear days' notice of the Annual General Meeting. Shareholders wishing to raise questions in advance of the meeting are encouraged to write to the Company Secretary at the address shown on page 36. Separate resolutions are proposed for each separate issue. Proxy votes will be counted and the results announced at the Annual General Meeting for and against each resolution. # Risk Management and Internal Control Framework Under an agreement dated 22 December 2025, certain functions of the Company have been sub-contracted to YFM Private Equity Limited. The Board receives regular operational and financial reports from the Manager covering the current position of the Company and relevant strategic, financial, operational and compliance issues. These matters include, but are not limited to: > A clearly defined investment strategy for the Manager, approved by the Board; > All decisions concerning the acquisition or disposal of investments are ratified by the Board; > Regular reviews of the Company's investment portfolio, liquid assets and liabilities, revenue and expenditure; > Regular reviews of compliance with the VCT regulations to retain its status; and > The Board receives copies of the Company's management accounts on a regular basis showing comparisons with budget. These include a report by the Manager with a review of performance. Additional information is supplied on request. The Board confirms the procedures to implement the guidance detailed in Principle O of the AIC Code were in place throughout the year ended 31 March 2026 and up to the date of this report. A detailed review of the risks faced by the Company and the techniques used to mitigate these risks can be found in the Strategic Report on pages 32 and 33. The Board acknowledges that it is responsible for overseeing the Company's risk management and internal control framework and for reviewing its effectiveness on an ongoing basis. This framework is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Board arranges its meeting agenda so that risk management and internal control is considered on a regular basis and a full robust risk and control assessment takes place at least twice a year. There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for longer than the year under review and up to the date of approval of the Annual Report. The process is formally reviewed bi-annually by the Board. Given the size and nature of the Company, the Board has concluded that it is not currently necessary to establish an internal audit function. This assessment is reviewed annually, and the Board would consider the introduction of such a function should it be deemed appropriate in the future. The directors are satisfied that the Company's risk management and internal control framework is appropriate and proportionate, and is consistent with relevant guidance issued by the FRC. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # CORPORATE GOVERNANCE (CONTINUED) In particular the Board, together with the Audit & Risk Committee, is responsible for overseeing and reviewing internal controls concerning financial reporting. In addition to the controls operated by the Manager, the following controls have been in place throughout the year: - A robust system of internal control is maintained by the Manager over the preparation and reconciliation of investment portfolio valuations; - Monthly reconciliation of assets held as cash and cash equivalents; - Independent review of the valuations of portfolio investments by the Board (quarterly); - The Audit & Risk Committee's review of financial reporting and compliance (as set out on pages 43 to 46); - The Board reviews financial information including the Annual Report, Interim Report and interim management statements prior to their external communication; and - The Board reviews the financial information in any prospectus or offer for subscription issued by the Company in connection with the issue of new share capital. The Company is classified by the Financial Conduct Authority as an Alternative Investment Fund ("AIF") and is therefore required to appoint an Alternative Investment Fund Manager ("AIFM"). The Manager has been appointed as the Company's AIFM and is authorised as a full scope AIFM, as the assets under its management exceed the applicable regulatory thresholds. As required under the AIFM regime, an independent depository, Thompson Taraz Depositary Limited, has been appointed and is responsible for the safekeeping of the Company's assets. The Board has reviewed the effectiveness of the Company's risk management and internal controls framework throughout the year and up to the date of this Report. The Board is of the opinion that the Company's systems of internal, financial, and other controls are appropriate to the nature of its business activities and methods of operation given the size of the Company, and the Board has a reasonable expectation that the Company will continue in operational existence for the foreseeable future. # Conflicts of Interest The directors have declared any conflicts or potential conflicts of interest to the Board, which has the authority to authorise such situations if appropriate. The Company Secretary maintains the Register of Directors' Interests, which is reviewed quarterly by the Board, when changes are notified, and the directors advise the Company Secretary and the Board as soon as they become aware of any conflicts of interest. Directors who have conflicts of interest which have been approved by the Board do not take part in discussions or decisions which relate to any of their conflicts. The Board notes Mr R Cook's position as a shareholder of Xapien, a portfolio investment of the Company. In making the investments into Xapien, the Company's conflicts of interest policy was followed, with Mr R Cook recused from all decision making. # Corporate Governance in Relation to Investee Companies The Company delegates responsibility for monitoring its investments to its Manager whose policy, which has been noted by the Board, is as follows: YFM Private Equity Limited is committed to introducing corporate governance standards into the companies in which its clients invest. With this in mind, the Company's investment agreements contain contractual terms specifying the required frequency of board meetings, and for representation at such meetings through YFM Private Equity Limited. In addition, provision is made for the preparation of regular and timely management information to facilitate the monitoring of an investee company performance in accordance with best practice in the private equity sector. # Co-Investment Typically, the Company invests alongside funds, including those managed by the Manager, such syndication spreading investment risk. Details of the amounts invested in individual companies are set out in the Strategic Report. Co-investments are detailed in note 7 to the financial statements on pages 80 to 82. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # Management The Board has delegated the monitoring of the investment portfolio to the Manager. This report was approved by the Board on 11 June 2026 and signed on its behalf by ![img-28.jpeg](img-28.jpeg) Rupert Cook Chairman British Smaller Companies VCT plc Registered number 03134749 British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # DIRECTORS' REMUNERATION REPORT The Board has prepared this report in accordance with the requirements of the Large and Medium Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. Ordinary resolutions for the approval of this report and the Directors' Remuneration Policy will be put to the members at the forthcoming Annual General Meeting. The law requires the Company's auditor, BDO LLP, to audit certain information included in this report. Where disclosures have been audited, they are indicated as such. The auditor's opinion is included in the Independent Auditor's Report on pages 54 to 60. ## Directors' Remuneration Policy This statement of the Directors' Remuneration Policy took effect following approval by shareholders at the Annual General Meeting held on 14 September 2023. A resolution to approve the Directors' Remuneration Policy will be put to shareholders every three years. The Board comprises four directors, all of whom are non-executive. The Company currently has an independent Nominations & Remuneration Committee, which is comprised of the full Board and of which Mr J H Cartwright is the independent Chairman. The Board has not retained external advisors in relation to remuneration matters but has access to information about directors' fees paid by other companies of a similar size and nature and this is used as a reference when setting directors' remuneration. Shareholders' views in respect of the directors' remuneration are communicated at the Company's Annual General Meeting and are taken into consideration in formulating the Directors' Remuneration Policy. At the last Annual General Meeting, 92 per cent of shareholders who exercised their voting rights voted for the resolution approving the Directors' Remuneration Report, showing significant shareholder approval. The Board's policy is that the remuneration of non-executive directors should reflect the experience of the Board as a whole, to be fair and comparable to that of other relevant venture capital trusts that are similar in size and have similar investment objectives and structures. Furthermore, the level of remuneration should be sufficient to attract and retain the directors needed to properly oversee the Company and to reflect the duties and responsibilities of the directors and the value and amount of time committed to the Company's affairs. It is not considered appropriate that directors' remuneration should be performance-related, and as such the directors are not eligible for bonuses, share options, pension benefits, long-term incentive schemes or other benefits in respect of their services as non-executive directors of the Company. It is the Board's policy that directors do not have service contracts, but new directors are provided with a letter of appointment. The terms of directors' appointments provide that directors should retire and be subject to election at the first AGM after their appointment. Thereafter, it has been agreed that all directors will offer themselves for re-election on an annual basis. All directors' appointments are terminable by each director or the Company on three months' notice. Any director who ceases to hold office is not entitled to receive any payment other than accrued fees (if any) for past services. There were no payments for loss of office made during the period. The policy will continue to be applied in the forthcoming year. Brief biographical notes on the directors are given on page 36. ## Statement by the Chair of the Nominations & Remuneration Committee The directors have reviewed the level of directors' fees and, in light of the current inflationary environment, agreed that they will be increased by 3.0 per cent, to £49,120 per annum for the Chairman and £30,215 for the non-executive directors, effective from 1 July 2026. The Chairs of the Audit & Risk Committee and the Investment Committee will receive an additional £5,305 per annum, reflecting the increased activity required in fulfilling those roles. In accordance with the Directors' Remuneration Policy, the directors have agreed that they should be reviewed again in June 2027. The cap on aggregate annual fees is £175,000. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance ## Directors' Remuneration for the year ended 31 March 2026 (audited) The directors who served in the year and the previous year received the following emoluments in the form of fees, which represent the entire remuneration payable to directors (see Table A): There are no executive directors (2025: none). Table A Total Fixed Fees Paid (audited) | | 2026 £ | 2025 £ | | --- | --- | --- | | R Cook | 47,343 | 45,750 | | A C N Bastin | 34,715 | 32,354 | | J H Cartwright | 34,715 | 32,354 | | P Sapre | 29,603 | 28,604 | | | 146,376 | 139,062 | With effect from 1 July 2025, the annual salary of the Chairman was increased to £47,690 (previously £46,300) and the annual salary of the other directors was increased to £29,820 (previously £28,950). Further, from the same date the Chairmen of the Audit & Risk Committee and the Investment Committee each received an additional £5,150 (previously £5,000) per annum, reflecting the increased activity required in fulfilling those roles. Table B Total Fixed Fees Paid: Annual change | Director | 2026 % | 2025 % | 2024 % | 2023 % | 2022 % | | --- | --- | --- | --- | --- | --- | | R Cook | 3.0 | 5.0 | 5.0 | 0.0* | 0.0 | | A C N Bastin | 3.0 | 23.2** | 5.0 | 5.0 | 0.0 | | J H Cartwright | 3.0 | 23.2** | 5.0 | 5.0 | 0.0 | | P Sapre | 3.0 | 5.0 | 5.0 | n/a | n/a | | H Sinclair | n/a | n/a | n/a | n/a | 0.0 | * The annual salary of Mr R Cook from the date of his appointment as Chairman on 16 September 2022 was £42,000. ** Includes an increase of £5,000 (equivalent to 18.2%) due to their roles as Chairman of the Audit & Risk Committee and Investment Committee respectively, as explained above. ## Directors and their Interests (audited) The directors of the Company at 31 March 2026 and their beneficial interests in the share capital of the Company (including those of immediate family members) were as shown in Table C: Table C Directors and their Interests (audited) | | Number of ordinary shares at: | | Percentage of voting rights: | | | --- | --- | --- | --- | --- | | | 31 March 2026 | 31 March 2025 | 31 March 2026 | 31 March 2025 | | R Cook | 208,746 | 196,540 | 0.06% | 0.06% | | A C N Bastin | 20,696 | 20,696 | 0.01% | 0.01% | | J H Cartwright | 26,494 | 26,494 | 0.01% | 0.01% | | P Sapre | 7,028 | 7,028 | 0.00% | 0.00% | None of the directors held any options to acquire additional shares at the year end. The Company has not set out any formal requirement or guidelines concerning their ownership of shares in the Company. ## Relative Importance of Spend on Pay Directors' remuneration, dividend distribution and share buy-backs are shown in Table D: The remuneration of the directors is fixed and contains no performance related variable element. As the Company has no employees, the directors do not consider it relevant to compare directors' fees against employee pay. Table D Relative Importance of Pay | | 2026 £ | 2025 £ | | --- | --- | --- | | Dividends | 14,183,000 | 15,849,000 | | Share buy-backs | 5,411,000 | 6,710,000 | | Total directors' fees | 146,376 | 139,062 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # DIRECTORS' REMUNERATION REPORT (CONTINUED) ## Company Performance ![img-29.jpeg](img-29.jpeg) *assumes dividends re-invested* ## Consideration of Employment Conditions of Non-director Employees The Company does not have any employees. Accordingly, the disclosures required under paragraph 38 and 39 of Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 are not required. ## Company Performance The Board is responsible for the Company's investment strategy and performance, although the management of the Company's investment portfolio is delegated to the Manager through the investment management agreement, as referred to in the Corporate Governance section. Net Asset Value Total Return (calculated by reference to the net asset value and cumulative dividends paid, as set out in note 12 of these financial statements and excluding tax reliefs received by shareholders) is the primary recognised measure of performance in the VCT industry. This measure is shown on page 12. The graph above shows a comparison over the last ten years of the movements in both the Company's Share Price Total Return and the Share Price Total Return for an index of VCTs which are members of the AIC (based on data sourced from Capital IQ). In line with the index all the relative performance measures have been rebased to 100 as at March 2016. The directors consider this to be the most appropriate published index on which to report on comparative performance. This report was approved by the Board and signed on its behalf on 11 June 2026. ![img-30.jpeg](img-30.jpeg) ## Rupert Cook Chairman British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Corporate Governance # DIRECTORS' RESPONSIBILITIES STATEMENT The directors are responsible for preparing the annual report and the financial statements in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the financial statements in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006. Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period. In preparing these financial statements, the directors are required to: > Select suitable accounting policies and then apply them consistently; > Make judgements and accounting estimates that are reasonable and prudent; > State whether they have been prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006, 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; and > Prepare a directors' report, a strategic report and directors' remuneration report which comply with the requirements of the Companies Act 2006. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the 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. The directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provide the information necessary for shareholders to assess the performance, business model and strategy. ## Website Publication The directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website www.bscfunds.com in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements contained therein. ## Directors' Responsibilities Pursuant to DTR4 The directors confirm to the best of their knowledge: > The financial statements have been prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company; and > The annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that they face. The names and functions of all the directors are stated on page 36. This statement was approved by the Board and signed on its behalf on 11 June 2026. ![img-31.jpeg](img-31.jpeg) Rupert Cook Chairman British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report # INDEPENDENT AUDITOR'S REPORT to the members of British Smaller Companies VCT plc ## Report on the audit of the financial statements ### Opinion In our opinion the financial statements: > give a true and fair view of the state of the Company's affairs as at 31 March 2026 and of its profit and cash flows for the year then ended; > have been properly prepared in accordance with UK adopted international accounting standards; and > have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements of British Smaller Companies VCT plc (the 'Company') for the year ended 31 March 2026 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards. ### Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ### Independence We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company and we remain independent of the Company in conducting our audit. ## Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included: > Obtaining the VCT compliance reports prepared by management's expert as at year end and reviewing the calculations therein to check that the Company was meeting its requirements to retain VCT status; > Consideration of the Company's expected future compliance with VCT legislation, the absence of bank debt, contingencies and commitments and any market or reputational risks; > Reviewing the forecasted cash flows that support the Directors' assessment of going concern, challenging assumptions and judgements made in the forecasts, and assessing them for reasonableness. In particular, we considered the available cash resources relative to the forecast expenditure which was assessed against the prior year for reasonableness; and > Evaluating the Directors' method of assessing the going concern in light of market volatility. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern. In relation to the Company's reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors' statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report ## Overview | | 2026 | 2025 | | --- | --- | --- | | Key audit matters Valuation of unquoted investments | ☑ | ☑ | | Materiality Company financial statements as a whole | £5.7m (2025: £5.1m) based on 2% (2025: 2%) of Net asset value. | | ## An overview of the scope of our audit Our audit was scoped by obtaining an understanding of the Company and its environment, the applicable financial reporting framework and the system of internal control. We identified and assessed the risks of material misstatement of the financial statements. We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risk of material misstatement to the financial statements. We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of reducing the risk of material misstatement to an acceptable level, to provide a basis for our opinion. ## Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. | Key audit matter | How the scope of our audit addressed the key audit matter | | --- | --- | | Valuation of unquoted investments (Note 1 and Note 7) | We assessed the design and implementation of controls relating to the valuation of unquoted investments. This included obtaining an understanding of the sources of key inputs, judgements and significant estimates used as well as the oversight and governance structures in relation to the valuation process. For all investments we: • Challenged whether the valuation methodology was the most appropriate in the circumstances under the International Private Equity and Venture Capital Valuation (“IPEV”) Guidelines and the applicable accounting standards. • Assessed whether the valuation workings are based on the latest information provided by the investee companies, were reviewed and approved accordingly and the commentary in the valuation workings supports the fair value movement. We performed a risk assessment to determine the extent of our detailed testing. This included assessing the value of individual investments, the movement in fair value; movements in multiples (where applicable); and enterprise value, and changes in discounts from prior year to current year; and the economic factors that impact the valuation of the portfolio companies. For investments selected for testing that were valued using less subjective valuation techniques we: • Verified the price of recent investment to supporting documentation; • Considered whether the investment was an arm’s length transaction through reviewing the parties involved in the transaction and checking whether or not they were already investors of the investee Company; | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report # INDEPENDENT AUDITOR'S REPORT (CONTINUED) | Key audit matter | How the scope of our audit addressed the key audit matter | | --- | --- | | | > Considered whether there were any indications that the cost or price of recent investment was no longer representative of fair value considering, inter alia, the current performance of the investee company and the milestones and assumptions set out in the investment proposal; and > Considered whether the price of recent investment is supported by alternative valuation techniques. For investments selected for testing that were valued using more subjective techniques (earnings multiples and revenue multiples) we: > Challenged and corroborated the inputs to the valuation with reference to management information of investee companies, market data and our own understanding and assessed the impact of the estimation uncertainty concerning these assumptions and the disclosure of these uncertainties in the financial statements; > Reviewed the historical financial statements and any recent management information available to support assumptions about maintainable revenues, earnings or cash flows used in the valuations; > Considered the revenue or earnings multiples applied and the discounts applied by reference to observable listed company market data; and > Challenged the consistency and appropriateness of adjustments made to such market data in establishing the revenue, cash flow or earnings multiple applied in arriving at the valuations adopted by considering the individual performance of investee companies against plan and relative to the peer group, the market and sector in which the investee company operates and other factors as appropriate. Where appropriate, we performed a sensitivity analysis by developing our own point estimate where we considered that alternative input assumptions could reasonably have been applied and we considered the overall impact of such sensitivities on the portfolio of investments in determining whether the valuations as a whole are reasonable and free from bias. | ## Key observations Based on the procedures performed we consider the investment valuations to be appropriate considering the level of estimation uncertainty. ## Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows: | | 2026 £m | Company financial statements 2025 £m | | --- | --- | --- | | Materiality | 5.7 | 5.1 | | Basis for determining materiality | 2% of Net Assets | 2% of Net Assets | | Rationale for the benchmark applied | In setting materiality, we have had regard to the nature and disposition of the investment portfolio. Given that the VCT's portfolio is comprised of unquoted investments which would typically have a wider spread of reasonable alternative possible valuations, we have applied a percentage of 2% of net assets. | In setting materiality, we have had regard to the nature and disposition of the investment portfolio. Given that the VCT's portfolio is comprised of unquoted investments which would typically have a wider spread of reasonable alternative possible valuations, we have applied a percentage of 2% of net assets. | | Performance materiality | 4.3 | 3.9 | | Basis for determining performance materiality | 75% of materiality | 75% of materiality | | Rationale for the percentage applied for performance materiality | The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements based on our knowledge and experience of the Company. | The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements based on our knowledge and experience of the Company. | ## Reporting threshold We agreed with the Audit and Risk Committee that we would report to them all individual audit differences in excess of £285,500 (2025: £257,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds. ## Other information The Directors are responsible for the other information. The other information comprises the information included in the Annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report # INDEPENDENT AUDITOR'S REPORT (CONTINUED) ## Corporate governance statement The UK Listing Rules sourcebook requires us to review the Directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit. ### Going concern and longer-term viability - The Directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on pages 37 to 38; - The Directors' explanation as to their assessment of the Company's prospects, the period this assessment covers and why the period is appropriate set out on pages 37 to 38; and - The Directors' statement on whether they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities set out on pages 37 to 38. ### Other Code provisions - Directors' statement on fair, balanced and understandable set out on page 37; - Board's confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 32 to 33; - The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages 47 to 48; and - The section describing the work of the Audit and Risk Committee set out on pages 43 to 46. ## Other Companies Act 2006 reporting Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. ### Strategic report and Directors' report In our opinion, based on the work undertaken in the course of the audit: - the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report. ### Directors' remuneration In our opinion, the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. ### Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements and the part of the Directors' remuneration report to be audited are not in agreement with the accounting records and returns; or - certain disclosures of Directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report # Responsibilities of Directors As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. # Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. However, the primary responsibility for the prevention and detection of fraud rests with both Those Charged with Governance of the Company and management. # Extent to which the audit was capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: ## Non-compliance with laws and regulations Based on: - Our understanding of the Company and the industry in which it operates; - Discussion with the Manager and those charged with governance; and - Obtaining an understanding of the Company's policies and procedures regarding compliance with laws and regulations. We considered the significant laws and regulations to be the Companies Act 2006, the FCA listing and DTR rules, the principles of the AIC Code of Corporate Governance, industry practice represented by the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("the SORP") and updated in 2022 with consequential amendments and the applicable financial reporting framework. We also considered the Company's qualification as a VCT under UK tax legislation. Our procedures in respect of the above included: - Agreement of the financial statement disclosures to underlying supporting documentation; - Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws and regulations; - Obtaining the VCT compliance reports prepared by management's expert as at year end and reviewing their calculations to check that the Company was meeting its requirements to retain VCT status; and - Reviewing minutes of meetings of those charged with governance throughout the period for instances of non-compliance with laws and regulations. ## Fraud We assessed the susceptibility of the financial statement to material misstatement including fraud. Our risk assessment procedures included: - Enquiry of the Manager and those charged with governance regarding any known or suspected instances of fraud; - Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud; British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Auditor's Report # INDEPENDENT AUDITOR'S REPORT (CONTINUED) > Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and > Considering performance incentive schemes and performance targets and the related financial statement areas impacted by these. Based on our risk assessment, we considered the areas most susceptible to fraud to be the valuation of unquoted investments and management override of controls. We performed the below to address the above risks: > Considered the opportunity and incentive to manipulate accounting entries; > Reviewed the significant judgements made in the valuation of unquoted investments and considering whether the valuation methodology is the most appropriate; > Considered any indicators of bias in our audit as a whole; > Performed a review of unadjusted audit differences, if any, for indicators of bias or deliberate misstatement; and > We have reviewed the appropriateness of adjustments made in the preparation of the financial statements. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. # Other matters which we are required to address We were appointed by the Board of Directors during 2014 to audit the financial statements for the year ended 31 March 2014 and subsequent financial periods. Our total uninterrupted period of engagement including retenders and reappointments is thirteen years, covering the years ended 31 March 2014 to 31 March 2026. Our audit opinion is consistent with the additional report to the Audit and Risk committee. # Use of our report This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.15R - 4.1.18R, these financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R - DTR 4.1.18R. This auditor's report provides no assurance over whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R - DTR 4.1.18R. # Vanessa-Jayne Bradley (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor London, UK 11 June 2026 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 March 2026 | | Notes | Revenue £000 | 2026 Capital £000 | Total £000 | Revenue £000 | 2025 Capital £000 | Total £000 | | --- | --- | --- | --- | --- | --- | --- | --- | | (Loss) gain on investments held at fair value | 7 | - | (101) | (101) | - | 5,656 | 5,656 | | Gain on disposal of investments | 7 | - | 1,612 | 1,612 | - | 965 | 965 | | Gain arising from the investment portfolio | | - | 1,511 | 1,511 | - | 6,621 | 6,621 | | Income | 2 | 4,920 | - | 4,920 | 5,463 | - | 5,463 | | Total income | | 4,920 | 1,511 | 6,431 | 5,463 | 6,621 | 12,084 | Administrative expenses: | Manager’s fee | | (1,122) | (3,367) | (4,489) | (943) | (2,830) | (3,773) | | --- | --- | --- | --- | --- | --- | --- | --- | | Other expenses | | (1,003) | - | (1,003) | (1,542) | - | (1,542) | | | 3 | (2,125) | (3,367) | (5,492) | (2,485) | (2,830) | (5,315) | | Profit (loss) before taxation | | 2,795 | (1,856) | 939 | 2,978 | 3,791 | 6,769 | | Taxation | 4 | (355) | 355 | - | (517) | 517 | - | | Profit (loss) for the year | | 2,440 | (1,501) | 939 | 2,461 | 4,308 | 6,769 | | Total comprehensive income (expense) for the year | | 2,440 | (1,501) | 939 | 2,461 | 4,308 | 6,769 | | Basic and diluted earnings (loss) per ordinary share | 6 | 0.68p | (0.42p) | 0.26p | 0.80p | 1.41p | 2.21p | The accompanying notes on pages 66 to 89 are an integral part of these financial statements. The Total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with UK adopted international accounting standards. The supplementary Revenue and Capital columns are prepared under the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (issued in December 2025 – "SORP") published by the AIC. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # BALANCE SHEET At 31 March 2026 | | Notes | 2026 £000 | 2025 £000 | | --- | --- | --- | --- | | ASSETS | | | | | Non-current assets at fair value through profit or loss | | | | | Financial assets at fair value through profit or loss | 7 | 159,866 | 154,546 | | Other assets | 8 | 2,169 | 1,714 | | | | 162,035 | 156,260 | | Current assets | | | | | Accrued income and other assets | 8 | 1,403 | 1,224 | | Current asset investments | 9 | 82,500 | 69,000 | | Cash at bank and other cash equivalents | 9 | 39,819 | 30,971 | | | | 123,722 | 101,195 | | LIABILITIES | | | | | Current liabilities | | | | | Trade and other payables | 10 | 226 | 344 | | Net current assets | | 123,496 | 100,851 | | Net assets | | 285,531 | 257,111 | | Shareholders' equity | | | | | Share capital | 11 | 41 | 35,338 | | Share premium account | | 16,351 | 105,086 | | Capital reserve | | 218,660 | 65,203 | | Investment holding gains and losses reserve | 7 | 48,023 | 48,673 | | Revenue reserve | | 2,456 | 2,811 | | Total shareholders' equity | | 285,531 | 257,111 | | Net asset value per ordinary share | 12 | 76.90p | 80.55p | The accompanying notes on pages 66 to 89 are an integral part of these financial statements. The financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on 11 June 2026. ![img-32.jpeg](img-32.jpeg) Rupert Cook Chairman British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # STATEMENT OF CHANGES IN EQUITY For the year ended 31 March 2026 | | Share capital £000 | Share premium account £000 | Capital reserve £000 | Investment holding gains and losses reserve £000 | Revenue reserve £000 | Total equity £000 | | --- | --- | --- | --- | --- | --- | --- | | Balance at 31 March 2024 | 28,830 | 58,293 | 79,171 | 49,207 | 4,099 | 219,600 | | Revenue return for the year | - | - | - | - | 2,978 | 2,978 | | Expenses charged to capital | - | - | (2,830) | - | - | (2,830) | | Investment holding gain on investments held at fair value | - | - | - | 5,656 | - | 5,656 | | Realisation of investments in the year | - | - | 965 | - | - | 965 | | Taxation | - | - | 517 | - | (517) | - | | Total comprehensive (expense) income for the year | - | - | (1,348) | 5,656 | 2,461 | 6,769 | | Issue of share capital | 6,147 | 45,932 | - | - | - | 52,079 | | Issue of shares – DRIS | 361 | 2,533 | - | - | - | 2,894 | | Issue costs* | - | (1,672) | - | - | - | (1,672) | | Purchase of own shares | - | - | (6,710) | - | - | (6,710) | | Dividends | - | - | (12,100) | - | (3,749) | (15,849) | | Total transactions with owners | 6,508 | 46,793 | (18,810) | - | (3,749) | 30,742 | | Realisation of prior year investment holding gains | - | - | 6,190 | (6,190) | - | - | | Balance at 31 March 2025 | 35,338 | 105,086 | 65,203 | 48,673 | 2,811 | 257,111 | | Revenue return for the year | - | - | - | - | 2,795 | 2,795 | | Expenses charged to capital | - | - | (3,367) | - | - | (3,367) | | Investment holding loss on investments held at fair value | - | - | - | (101) | - | (101) | | Realisation of investments in the year | - | - | 1,612 | - | - | 1,612 | | Taxation | - | - | 355 | - | (355) | - | | Total comprehensive (expense) income for the year | - | - | (1,400) | (101) | 2,440 | 939 | | Issue of share capital | 3,682 | 42,453 | - | - | - | 46,135 | | Issue of shares – DRIS | 151 | 2,208 | - | - | - | 2,359 | | Issue costs* | - | (1,419) | - | - | - | (1,419) | | Reduction in nominal value | (39,130) | - | 39,130 | - | - | - | | Share premium cancellation | - | (131,977) | 131,977 | - | - | - | | Purchase of own shares | - | - | (5,411) | - | - | (5,411) | | Dividends | - | - | (11,388) | - | (2,795) | (14,183) | | Total transactions with owners | (35,297) | (88,735) | 154,308 | - | (2,795) | 27,481 | | Transfer between reserves | - | - | (6,718) | 6,718 | - | - | | Realisation of prior year investment holding gains | - | - | 7,267 | (7,267) | - | - | | Balance at 31 March 2026 | 41 | 16,351 | 218,660 | 48,023 | 2,456 | 285,531 | * Issue costs include both fundraising costs and costs incurred from the Company's DRIS. The accompanying notes on pages 66 to 89 are an integral part of these financial statements. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the year ended 31 March 2026 ## Reserves Available for Distribution Under the Companies Act 2006 the capital reserve and the revenue reserve are distributable reserves. The table below shows amounts that are available for distribution. | | Capital reserve £000 | Revenue reserve £000 | Total £000 | | --- | --- | --- | --- | | Distributable reserves as shown on previous page | 218,660 | 2,456 | 221,116 | | Income/proceeds not yet distributable | (2,916) | (723) | (3,639) | | Cancelled share premium not yet distributable | (171,107) | - | (171,107) | | Reserves available for distribution* | 44,637 | 1,733 | 46,370 | * Following the circulation of the Annual Report to shareholders. The capital reserve and revenue reserve are both distributable reserves. The reserves total £221,116,000, representing an increase of £153,102,000 during the year. The directors also take into account the level of the investment holding gains and losses reserve and the future requirements of the Company when determining the level of dividend payments. Of the potentially distributable reserves of £221,116,000 shown above, £3,639,000 relates to income and proceeds not yet distributable and £171,107,000 relates to cancelled share premium and the reduction in the nominal value of the share capital, which will become distributable from July 2026 onwards, as set out below. | Available for distribution | Reserves arising from cancelled share premium £000 | Reserves arising from reduction in share capital £000 | Total £000 | | --- | --- | --- | --- | | July 2026 | 1,700 | 20,948 | 22,648 | | 1 April 2027 | 56,593 | 7,853 | 64,446 | | 1 April 2028 | 46,793 | 6,501 | 53,294 | | 1 April 2029 | 26,891 | 3,828 | 30,719 | | Total | 131,977 | 39,130 | 171,107 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # STATEMENT OF CASH FLOWS For the year ended 31 March 2026 | | Notes | 2026 £000 | 2025 £000 | | --- | --- | --- | --- | | Net cash (outflow) inflow from operating activities | | (379) | 1,003 | | Cash flows generated from (used in) investing activities | | | | | Purchase of financial assets at fair value through profit or loss | 7 | (22,744) | (29,288) | | Proceeds from sale of financial assets at fair value through profit or loss | 7 | 17,207 | 7,259 | | Deferred consideration | 7 | 783 | 451 | | Net cash outflow from investing activities | | (4,754) | (21,578) | | Cash flows from (used in) financing activities | | | | | Issue of ordinary shares | | 46,135 | 52,079 | | Costs of ordinary share issues* | | (1,419) | (1,672) | | Purchase of own ordinary shares | | (5,411) | (6,710) | | Dividends paid | 5 | (11,824) | (12,955) | | Net cash inflow from financing activities | | 27,481 | 30,742 | | Net increase in cash and cash equivalents | | 22,348 | 10,167 | | Cash and cash equivalents at the beginning of the year | | 99,971 | 89,804 | | Cash and cash equivalents at the end of the year | | 122,319 | 99,971 | * Issue costs include both fundraising costs and expenses incurred from the Company's DRIS. ## Cash and cash equivalents comprise | Money market funds | 9 | 82,500 | 69,000 | | --- | --- | --- | --- | | Cash at bank and other cash equivalents | 9 | 39,819 | 30,971 | | Cash and cash equivalents at the end of the year | | 122,319 | 99,971 | ## Reconciliation of Profit before Taxation to Net Cash (Outflow) Inflow from Operating Activities | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Profit before taxation* | 939 | 6,769 | | (Decrease) increase in trade and other payables | (118) | 96 | | Decrease in accrued income and other assets | 311 | 759 | | Gain on disposal of investments | (1,612) | (965) | | Loss (gain) on investments held at fair value | 101 | (5,656) | | Net cash (outflow) inflow from operating activities | (379) | 1,003 | * Includes cash inflows from | Dividends | 722 | 372 | | --- | --- | --- | | Interest | 4,593 | 5,346 | The accompanying notes on pages 66 to 89 are an integral part of these financial statements. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS ## 1. Material Accounting Policy Information ### Basis of Preparation The accounts have been prepared on a going concern basis as set out in the Directors Report on page 37 and in accordance with UK adopted international accounting standards. The directors have carefully considered the issue of going concern in view of the Company's activities and associated risks. The Company has a well-diversified portfolio with businesses in a variety of sectors, many of which are well funded. Some portfolio companies may require additional funding in the near- to medium-term; the Company is well placed to provide this, where appropriate. The Company has a significant level of liquidity, which was enhanced by the final allotment of the 2025/26 fundraising post-year-end, in April 2026. In addition, the Board has control over, and can flex as appropriate, the Company's major outgoings, which predominantly comprise investments, dividends and share buy-backs. The directors have also assessed whether material uncertainties exist and their potential impact on the Company's ability to continue as a going concern; they have concluded that no such material uncertainties exist. Taking all of the above into consideration, the directors are satisfied that the Company has sufficient resources to meet its obligations for at least 12 months from the date of this report and therefore believe that it is appropriate to continue to apply the going concern basis of accounting in preparing the financial statements. The financial statements have been prepared under the historical cost basis as modified by the measurement of investments at fair value through profit or loss. The accounts have been prepared in compliance with the recommendations set out in the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies (issued in December 2025 – the "SORP") to the extent that they do not conflict with UK adopted international accounting standards. The financial statements are prepared in accordance with UK adopted international accounting standards (International Financial Reporting Standards ("IFRS") and International Accounting Standards ("IAS")) and interpretations in force at the reporting date. New standards coming into force during the year and future standards that come into effect after the year-end have not had a material impact on these financial statements. The Company has carried out an assessment of accounting standards, amendments and interpretations that have been issued by the International Accounting Standards Board and that are effective for the current reporting period. The Company has determined that the transitional effects of the standards do not have a material impact. The Company is assessing the effects of IFRS18, Presentation and Disclosure of Financial Statements, as it is not yet effective. The financial statements are presented in sterling, and all values are rounded to the nearest thousand (£000), except where stated. ## Financial Assets held at Fair Value through Profit or Loss - Investments Financial assets designated as at fair value through profit or loss ("FVPL") at inception are those that are managed and whose performance is evaluated on a fair value basis, in accordance with the documented investment strategy of the Company. Information about these financial assets is provided internally on a fair value basis to the Company's key management. The Company's investment strategy is to invest cash resources in venture capital investments as part of the Company's long-term capital growth strategy. Consequently, all investments are classified as held at fair value through profit or loss. All investments are measured at fair value on the whole unit of account basis with gains and losses arising from changes in fair value being included in the Statement of Comprehensive Income as gains or losses on investments held at fair value. Accrued income on loans/preference shares that is rolled to exit and is not past due, forms part of the investment's fair value. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # Transaction costs on purchases are expensed immediately through profit or loss. Although the Company holds more than 20 per cent of the equity of certain companies, it is considered that the investments are held as part of the investment portfolio, and their value to the Company lies in their marketable value as part of that portfolio. These investments are therefore not accounted for using equity accounting, as permitted by IAS 28 'Investments in associates' and IFRS 11 'Joint arrangements' which give exemptions from equity accounting for venture capital organisations. Under IFRS 10 "Consolidated Financial Statements", control is presumed to exist when the Company has power over an investee (whether or not used in practice); exposure or rights; to variable returns from that investee, and ability to use that power to affect the reporting entities returns from the investees. The Company does not hold more than 50 per cent of the equity of any of the companies within the portfolio. The Company does not control any of the companies held as part of the investment portfolio. It is not considered that any of the holdings represent investments in subsidiary undertakings. # Valuation of Investments Unquoted investments are valued in accordance with IFRS 13 "Fair Value Measurement" and using the International Private Equity and Venture Capital Valuation Guidelines (December 2025) ("the IPEV Guidelines"). Quoted investments are valued at market bid prices. A detailed explanation of the valuation policies of the Company is included below. # Initial Measurement The best estimate of the initial fair value of an unquoted investment is the cost of the investment. Unless there are indications that this is inappropriate, an unquoted investment will be held at this value within the first three months of investment. # Subsequent Measurement Based on the IPEV Guidelines, six of the most widely used valuation methodologies for unquoted investments are detailed below. The Guidelines advocate that the best valuation methodologies are those that draw on external, objective market-based data in order to derive a fair value. # Unquoted Investments > Revenue multiples. An appropriate multiple, given the risk profile and revenue growth prospects of the underlying company, is applied to the revenue of the company. The multiple is adjusted to reflect any risk associated with lack of marketability and to take account of the differences between the investee company and the benchmark company or companies used to derive the multiple. > Earnings multiple. An appropriate multiple, given the risk profile and earnings growth prospects of the underlying company, is applied to the maintainable earnings of the company. The multiple is adjusted to reflect any risk associated with lack of marketability and to take account of the differences between the investee company and the benchmark company or companies used to derive the multiple. > Net assets. The value of the business is derived by using appropriate measures to value the assets and liabilities of the investee company. > Discounted cash flows of the underlying business. The present value of the underlying business is derived by using reasonable assumptions and estimations of expected future cash flows and the terminal value, and discounted by applying the appropriate risk-adjusted rate that quantifies the risk inherent in the company. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 1. Material Accounting Policy Information (continued) > Discounted cash flows from the investment. Under this method, the discounted cash flow concept is applied to the expected cash flows from the investment itself rather than the underlying business as a whole. > Price of recent investment. This may represent the most appropriate basis where a significant amount of new investment has been made by an independent third party. This is adjusted, if necessary, for factors relevant to the background of the specific investment such as preference rights and will be benchmarked against other valuation techniques. In line with the IPEV Guidelines the price of recent investment will usually only be used for the initial period following the round and after this an alternative basis will be found. Due to the significant subjectivity involved, discounted cash flows are only likely to be reliable as the main basis of estimating fair value in limited situations. Their main use is to support valuations derived using other methodologies and for assessing reductions in fair value. One of the valuation methods described above is used to derive the gross attributable enterprise value of the company after which adjustments are made to reflect specific circumstances. This value is then apportioned appropriately to reflect the respective debt and equity instruments in the event of a sale at that level at the reporting date. ## Income Dividends and interest are received from financial assets measured at fair value through profit and loss and are recognised on the same basis in the Statement of Comprehensive Income. This includes interest and preference dividends rolled up and/or payable at redemption. Interest income is also received on cash, cash equivalents and current asset investments. Dividend income from unquoted equity shares is recognised at the time when the right to the income is established. ## Expenses Expenses are accounted for on an accruals basis. Expenses are charged through the Revenue column of the Statement of Comprehensive Income, except for the Manager's fee and incentive fees. Of the Manager's fees 75 per cent are allocated to the Capital column of the Statement of Comprehensive Income, to the extent that these relate to an enhancement in the value of the investments and in line with the Board's expectation that over the long term 75 per cent of the Company's investment returns will be in the form of capital gains. The incentive fee payable to the Manager (as set out in note 3) is charged wholly through the Capital column. Tax relief is allocated to the Capital Reserve using a marginal basis. ## Incentive Fee The incentive fee is accounted for on an accruals basis. As further detailed in note 3, a performance incentive fee is payable to the Manager subject to the Company achieving both a target level of Total Return (the "Total Return Hurdle") and dividends ("Dividend Hurdle"). Subject to meeting the Total Return Hurdle, the Manager will receive an amount equivalent to 20 per cent of the amount by which dividends paid per share exceeds the Dividend Hurdle, multiplied by the number of shares in issue at the year end. The incentive fee in any financial year will be subject to a cap if the excess of dividends paid over the Dividend Hurdle is greater than the sum of the excess of the Total Return over the Total Return Hurdle divided by 1.2. At the end of each reporting period, an accrual is recognised based upon the dividends paid during the financial year to date and the Total Return at the end of the reporting period. The incentive fee is charged wholly through the Capital column. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # Cash, Cash Equivalents and Current Asset Investments Cash at bank comprises cash at hand and demand deposits. Cash equivalents comprise short-term deposits and highly liquid investments that are readily convertible into known amounts of cash and subject to insignificant risk of change in value. Current asset investments comprise money market funds. Cash and cash equivalents include cash at hand, money market funds and bank deposits repayable on up to three months' notice, as these meet the definition in IAS 7 'Statement of cash flows' of a short-term highly liquid investment that is readily convertible into known amounts of cash and subject to insignificant risk of change in value. Cash and cash equivalents (excluding money market funds) are valued at amortised cost, which equates to fair value. Money market funds are valued at fair value through profit or loss. Cash flows classified as "operating activities" for the purposes of the Statement of Cash Flows are those arising from the Revenue column of the Statement of Comprehensive Income, together with the items in the Capital column that do not fall to be easily classified under the headings for "investing activities" given by IAS 7 'Statement of cash flows', being management and incentive fees payable to the Manager. The capital cash flows relating to the acquisition and disposal of investments are presented under "investing activities" in the Statement of Cash Flows in line with both the requirements of IAS 7 and the positioning given to these headings by general practice in the industry. # Share Capital and Reserves ## Share Capital This reserve contains the nominal value of all shares allotted under offers for subscription. ## Share Premium Account This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under offers for subscription, to the extent that it has not been cancelled. ## Capital Reserve The following are included within this reserve: - Gains and losses on realisation of investments; - Realised losses upon permanent diminution in value of investments; - Capital income from investments; - 75 per cent of the Manager's fee expense, together with the related taxation effect to this reserve in accordance with the policy on expenses in note 1 of the financial statements; - Incentive fee payable to the Manager; - Capital dividends paid to shareholders; - Purchase and holding of the Company's own shares; and - Credits arising from the cancellation of any share premium account or changes in the nominal value of the share capital. ## Investment Holding Gains and Losses Reserve Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 1. Material Accounting Policy Information (continued) ### Revenue Reserve This reserve includes revenue dividends paid to shareholders, all revenue income from investments along with any costs associated with the running of the Company – less 75 per cent of the Manager's fee expense as detailed in the Capital Reserve above. ### Taxation Due to the Company's status as a venture capital trust and the continued intention to meet the conditions required to comply with Chapter 3 Part 6 of the Income Tax Act 2007, no provision for taxation is required in respect of any realised or unrealised appreciation of the Company's investments which arises. Deferred tax is recognised on all temporary differences that have originated, but not reversed, by the balance sheet date. Deferred tax assets are only recognised to the extent that they are regarded as recoverable. Deferred tax is calculated at the tax rates that are expected to apply when the asset is realised. Deferred tax assets and liabilities are not discounted. ### Dividends Payable Dividends payable are recognised only when an obligation exists. Interim and special dividends are recognised when paid and final dividends are recognised when approved by shareholders in general meetings. ### Segmental Reporting In accordance with IFRS 8 'Operating segments' and the criteria for aggregating reportable segments, segmental reporting has been determined by the directors based upon the reports reviewed by the Board. The directors are of the opinion that the Company has engaged in a single operating segment - investing in equity and debt securities within the United Kingdom - and therefore no reportable segmental analysis is provided. ### Critical Accounting Estimates and Judgements The preparation of financial statements in conformity with generally accepted accounting practice requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through profit or loss, as disclosed in note 7 to the financial statements. The fair value of investments at fair value through profit or loss is determined by using valuation techniques. As explained above, the Board uses its judgement to select from a variety of methods and makes assumptions that are mainly based on market conditions at each balance sheet date. The Board uses its judgement to select the appropriate method for determining the fair value of investments through profit or loss. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements ## 2. Income | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Dividends from unquoted companies | 272 | 443 | | Interest on loans to unquoted companies | 121 | 243 | | Income from unquoted portfolio | 393 | 686 | | Income from money market funds | 3,260 | 3,262 | | Income from investments held at fair value through profit or loss | 3,653 | 3,948 | | Income from bank deposits | 1,267 | 1,515 | | | 4,920 | 5,463 | ## 3. Administrative Expenses | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Manager's fee | 4,489 | 3,773 | | Administration fee | 92 | 89 | | Total payable | 4,581 | 3,862 | | Other expenses: | | | | Directors' remuneration | 165 | 154 | | General expenses | 153 | 116 | | Listing and registrar fees | 106 | 90 | | Auditor's remuneration - audit of the financial statements (excluding irrecoverable VAT) | 67 | 67 | | Printing | 62 | 53 | | Irrecoverable VAT | 54 | 52 | | Ongoing charges | 5,188 | 4,394 | | Trail commission (staged distribution fees) | 304 | 238 | | | 5,492 | 4,632 | | Fair value movement related to credit risk | - | 683 | | | 5,492 | 5,315 | | Ongoing charges figure | 1.83% | 1.75% | Directors' remuneration comprises only short-term benefits and includes national insurance contributions of £19,000 (2025: £14,000). The Company does not have any employees (2025: nil). No fees are payable to the auditor in respect of other services (2025: £nil). YFM Private Equity Limited previously acted as Manager and provided administrative and secretarial duties for the Company under an investment agreement (IA) dated 28 February 1996 as varied by agreements dated 1 July 2009, 16 November 2012, 17 October 2014, 24 August 2015 and 18 November 2019. Under an Investment Agreement dated 18 November 2019, YFM Private Equity Limited was appointed as the Company's Alternative Investment Fund Manager. On 19 September 2023 YFM Private Equity Limited was approved as a full-scope Alternative Investment Fund Manager; from this date Thompson Taraz Depositary Limited was appointed as the Depositary and assumed responsibility for asset safekeeping, cash flow monitoring and oversight duties. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 3. Administrative Expenses (continued) On 22 December 2025 the Company entered into a Deed of Amendment and Restatement to the Alternative Investment Fund Management Agreement (the "AIFMA") dated 18 November 2019 incorporating (and amending) the provisions of the IA. The changes to the AIFMA are effective from 1 January 2026 and supersede all previous IAs and AIFMA. The AIFMA agreement may be terminated by not less than 12 months' notice given by either party at any time. The key features of the agreement are: - YFM Private Equity Limited receives a Manager's fee, payable quarterly in advance, calculated at half-yearly intervals as at 31 March and 30 September. The fee is allocated between capital and revenue as described in note 1; - The annual fee payable to the Manager is (i) 1.25 per cent (1.00 per cent prior to 1 January 2026) on all surplus cash, defined as all cash and cash equivalents above £20 million (£7.5 million prior to 1 January 2026); and (ii) 2.00 per cent per annum of all other net assets. Based on the Company's net assets at 31 March 2026 of £285,531,000, including cash and cash equivalents of £122,319,000 at that date, this equates to approximately £4,943,000 per annum; - From 1 January 2026 the Manager's fee relating to surplus cash and cash equivalents applies to balances allotted from fundraisings from the date of allotment of the shares; - YFM Private Equity Limited shall bear the annual operating costs of the Company (including the Manager's fee set out above but excluding any payment of the performance incentive fee, details of which are set out below, and excluding VAT and trail commissions - staged distribution fees - where applicable) to the extent that those costs exceed 2.9 per cent of the net asset value of the Company. No excess expenses were payable in the year (2025: £nil); - From the 2025/26 fundraise onwards, YFM Private Equity Limited will bear the costs of any trail commissions (staged distribution fees) payable in relation to fundraising allotments; and - Under the AIFMA, YFM Private Equity Limited also provides administrative and secretarial services to the Company. The fee for the year ended 31 March 2026 totalled £91,669 (2025: £89,000). The fee is subject to annual adjustment to reflect movements in the Consumer Prices Index. 100 per cent of this fee is charged to revenue. When the Company makes investments into its unquoted portfolio the Manager charges that investee an advisory fee or arrangement fee. If the average of the relevant fees during the Company's financial year exceeds 3.0 per cent of the total invested into new portfolio companies, and 2.0 per cent into follow-on holdings, this excess will be rebated to the Company. As at 31 March 2026, the Company was due a rebate from the Manager of £69,000 (2025: £34,000). The total remuneration payable to YFM Private Equity Limited under the AIFMA in the year was £4,581,000 (2025: £3,862,000). Monitoring and directors' fees the Manager receives from the investee companies are limited to a maximum of £60,000 (£40,000 prior to 1 January 2026) per annum per company. The maximum balance is subject to annual adjustment to reflect movements in the Consumer Prices Index. Under the AIFMA, YFM Private Equity Limited is entitled to receive fees from investee companies in respect of the provision of non-executive directors and other advisory services. YFM Private Equity Limited is responsible for paying the due diligence and other costs incurred in connection with proposed investments which for whatever reason do not proceed to completion. In the year ended 31 March 2026 the fees receivable by YFM Private Equity Limited from investee companies which were attributable to advisory and director and monitoring fees attributable to the Company amounted to £1,410,000 (2025: £1,440,000). British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements A performance incentive fee is payable to the Manager subject to the Company achieving both a target level of Total Return (the "Total Return Hurdle") and dividends ("Dividend Hurdle"). Subject to meeting the Total Return Hurdle, the Manager will receive an amount equivalent to 20 per cent of the amount by which dividends paid per share exceeds the Dividend Hurdle, multiplied by the number of shares in issue at the year end. The incentive fee in any financial year will be subject to a cap if the excess of dividends paid over the Dividend Hurdle is greater than the sum of the excess of the Total Return over the Total Return Hurdle divided by 1.2. With effect from 31 March 2019 the Total Return Hurdle was 228.6 pence per share and the annual increase is equivalent to 4.0 pence per share, as increased or decreased by the percentage increase or decrease (if any) in RPI from 1 April 2009. For the year ended 31 March 2026 the annual increase in the Total Return Hurdle was 7.50 pence per share. The Dividend Hurdle was 4.0 pence per share (increasing in line with RPI) from 1 April 2009. For the year ended 31 March 2026 the Dividend Hurdle was 7.50 pence per share. There were no incentive fees payable for the years ended 31 March 2026 and 31 March 2025, as calculated below: | | 2026 | 2025 | | --- | --- | --- | | Total Return Hurdle (p) | 280.25 | 272.75 | | Actual Total Return per Share before incentive fee (p) | 265.05 | 264.70 | | Shortfall over Total Return Hurdle (p) | (15.20) | (8.05) | | Dividend Hurdle (p) | 7.50 | 7.25 | | Actual Dividends per share (p) | 4.00 | 5.25 | | Shortfall over Dividend Hurdle (p) | (3.50) | (2.00) | | Lower excess of the two hurdles (p) | - | - | | Fee impact reduction (divide by 1.2) (p) | - | - | | Performance fee per share at 20% of adjusted excess (p) | - | - | | Number of shares in issue ('000) | 371,351 | 319,179 | | Incentive fee payable (£'000) | - | - | The Total Return Hurdle for the year ending 31 March 2027 is 288.05 pence per share. The Dividend Hurdle is 7.80 pence per share. If the annual incentive fee exceeds £5.0 million then the excess is deferred until following the next year's Annual General Meeting. Payment of the remainder is made five Business Days after the relevant Annual General Meeting at which the audited accounts are presented to shareholders. The amount of the incentive payment paid to the Manager for any one year shall, when taken with all other relevant costs, ensure that the Company's total costs in a single year do not exceed 5 per cent of net assets. Any excess over the 5 per cent is carried forward to be included in the calculation of the amount that can be paid in future years. Except with shareholder approval, the maximum fee payable in any 12 month period will not exceed £7.5 million. There are also provisions for a compensatory fee in circumstances where the Company is taken over or the Incentive Agreement is terminated, which is calculated as a percentage of the fee that would otherwise be payable under the Incentive Agreement by reference to the accounting period following its termination. In this instance 80 per cent is payable in the first accounting period after such an event, 55 per cent in the second, 35 per cent in the third and nothing is payable thereafter. Under the terms of the offer launched with British Smaller Companies VCT2 plc on 17 October 2024, YFM Private Equity Limited was entitled to 3.0 per cent of gross subscriptions, (3.5 per cent for Applications received from Applicants who did not invest their money through a financial intermediary advisor and invested directly into the Company) less commissions payable to an execution-only broker or platform. The net amount paid to YFM Private Equity Limited under this offer amounted to £1,370,000. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 3. Administrative Expenses (continued) Under the terms of the offer launched with British Smaller Companies VCT2 plc on 25 September 2025, YFM Private Equity Limited was entitled to 3.0 per cent of gross subscriptions, (3.5 per cent for Applications received from Applicants who did not invest their money through a financial intermediary advisor and invested directly into the Company) less commissions payable to an execution-only broker or platform. The net amount paid to YFM Private Equity Limited under this offer amounted to £1,591,000. The details of directors' remuneration are set out in the Directors' Remuneration Report on page 51 under the heading "Directors' Remuneration for the year ended 31 March 2026 (audited)". ## 4. Taxation | | Revenue £000 | 2026 Capital £000 | Total £000 | Revenue £000 | 2025 Capital £000 | Total £000 | | --- | --- | --- | --- | --- | --- | --- | | Profit (loss) before taxation | 2,795 | (1,856) | 939 | 2,978 | 3,791 | 6,769 | | Profit (loss) before taxation multiplied by standard rate of corporation tax in UK of 19% (2025: 19%) | 531 | (353) | 178 | 566 | 720 | 1,286 | | Effect of: | | | | | | | | UK dividends received | (176) | - | (176) | (79) | - | (79) | | Non-taxable profits on investments | - | (286) | (286) | - | (1,258) | (1,258) | | Deferred tax not recognised | - | 284 | 284 | 30 | 21 | 51 | | Tax charge (credit) | 355 | (355) | - | 517 | (517) | - | The Company has no provided or unprovided deferred tax liability in either year. Deferred tax assets of £4.20 million (2025: £3.91 million) calculated at 19% (2025: 19%) in respect of unrelied management expenses (£22.08 million as at 31 March 2026 and £20.58 million as at 31 March 2025) have not been recognised as the directors do not currently believe that it is probable that sufficient taxable profits will be available against which assets can be recovered. Due to the Company's status as a venture capital trust and the continued intention to meet with the conditions required to comply with Section 274 of the Income Tax Act 2007, the Company is exempt from corporation tax on chargeable gains and has not provided for deferred tax on any capital gains or losses arising on the revaluation or realisation of investments. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # 5. Dividends Amounts recognised as distributions to equity holders in the period to 31 March: | | Revenue £000 | 2026 Capital £000 | Total £000 | Revenue £000 | 2025 Capital £000 | Total £000 | | --- | --- | --- | --- | --- | --- | --- | | Interim dividend for the year ended 31 March 2026 of 2.0p (2025: 2.0p) per ordinary share | 1,615 | 5,475 | 7,090 | 1,969 | 4,077 | 6,046 | | Second interim dividend for the year ended 31 March 2026 of 2.0p (2025: 2.0p) per ordinary share | 1,180 | 5,913 | 7,093 | 1,780 | 4,257 | 6,037 | | Special dividend for the year ended 31 March 2025 of 1.25p per ordinary share | - | - | - | - | 3,766 | 3,766 | | | 2,795 | 11,388 | 14,183 | 3,749 | 12,100 | 15,849 | | Shares allotted under DRIS | | | (2,359) | | | (2,894) | | Dividends paid in Statement of Cash Flows | | | 11,824 | | | 12,955 | The first interim dividend of 2.0 pence per ordinary share was paid on 25 July 2025 to shareholders on the register as at 27 June 2025. The second interim dividend of 2.0 pence per ordinary share was paid on 19 December 2025 to shareholders on the register as at 21 November 2025. An interim dividend of 2.0 pence per ordinary share, in respect of the year ending 31 March 2027, will be paid on 17 July 2026 to shareholders on the register on 19 June 2026. This dividend was not recognised in the year ended 31 March 2026 as the obligation did not exist at the balance sheet date. # 6. Basic and Diluted Earnings per Ordinary Share The basic and diluted earnings per ordinary share is based on the profit after tax attributable to shareholders of £939,000 (2025: £6,769,000) and 359,268,665 (2025: 305,699,410) ordinary shares being the weighted average number of ordinary shares in issue during the year. The basic and diluted revenue earnings per ordinary share is based on the revenue profit for the year attributable to shareholders of £2,440,000 (2025: £2,461,000) and 359,268,665 (2025: 305,699,410) ordinary shares being the weighted average number of ordinary shares in issue during the year. The basic and diluted capital (loss) earnings per ordinary share is based on the capital loss for the year attributable to shareholders of £1,501,000 (2025: profit of £4,308,000) and 359,268,665 (2025: 305,699,410) ordinary shares being the weighted average number of ordinary shares in issue during the year. During the year the Company allotted 3,013,943 new ordinary shares in respect of its DRIS and 56,283,871 new ordinary shares from its fundraising. The Company has also repurchased 7,125,546 of its own shares in the year, and these shares are held in the capital reserve. The total of 41,324,542 treasury shares has been excluded in calculating the weighted average number of ordinary shares for the period. The Company has no securities that would have a dilutive effect and hence basic and diluted earnings per ordinary share are the same. The Company has no potentially dilutive shares and consequently, basic and diluted earnings per ordinary share are equivalent in both the year ended 31 March 2026 and 31 March 2025. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 7. Financial Assets at Fair Value through Profit or Loss – Investments | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Investment portfolio | 159,143 | 153,410 | | Accrued income on the investment portfolio | 723 | 1,136 | | Financial assets at fair value through profit and loss | 159,866 | 154,546 | IFRS 13, in respect of financial instruments that are measured in the balance sheet at fair value, requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: Level 1: quoted prices in active markets for identical assets or liabilities. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1 and comprise fixed income securities classified as held at fair value through profit or loss. The Company's current asset investments fall into this category at 31 March 2026 and 31 March 2025. During the year the Company held one portfolio investment classed as a financial asset at fair value through profit and loss which transferred into this category; this was subsequently realised by 31 March 2026. Level 2: the fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The Company held no such instruments in the current or prior year. Level 3: the fair value of financial instruments that are not traded in an active market (for example, investments in unquoted companies) is determined by using valuation techniques such as revenue and earnings multiples. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. All of the Company's investments classed as financial assets at fair value through profit and loss fall into this category at 31 March 2026 and 31 March 2025. Each investment is reviewed at least quarterly to ensure that it has not ceased to meet the criteria of the level in which it is included at the beginning of each accounting period. The change in fair value for the current and previous year is recognised through profit or loss. There was one transfer between level 3 and level 1 during the year (2025: none), which was subsequently realised prior to 31 March 2026. All items held at fair value through profit or loss were designated as such upon initial recognition. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # Valuation of Investments Full details of the methods used by the Company are set out in note 1 of these financial statements. Movements in investments at fair value through profit or loss during the year to 31 March 2026 are summarised as follows: | IFRS 13 measurement classification | Level 3 Unquoted Investments £000 | Level 1 Quoted Investments £000 | Total £000 | | --- | --- | --- | --- | | Opening cost | 104,737 | - | 104,737 | | Opening investment holding gain | 48,673 | - | 48,673 | | Opening fair value at 1 April 2025 | 153,410 | - | 153,410 | | Additions at cost | 22,744 | - | 22,744 | | Transfer between levels | (1,961) | 1,961 | - | | Disposal proceeds | (15,226) | (3,041) | (18,267) | | Net profit on disposal* | 277 | 1,080 | 1,357 | | Change in fair value | 393 | - | 393 | | Foreign exchange loss | (494) | - | (494) | | Closing fair value at 31 March 2026 | 159,143 | - | 159,143 | | Closing cost | 117,838 | - | 117,838 | | Closing investment holding gain** | 41,305 | - | 41,305 | | Closing fair value at 31 March 2026 | 159,143 | - | 159,143 | * The net profit on disposal in the table above is £1,357,000 whereas that shown in the Statement of Comprehensive Income is £1,612,000. The difference comprises the change in the value of deferred proceeds totaling £255,000 in respect of assets which have been disposed of and are not included within the investment portfolio at 1 April 2025. ** A permanent diminution in value of investments totaling £6,718,000 (2025: £nil) has been transferred to the capital reserve. There were no individual reductions in fair value during the year that exceeded 5 per cent of the total assets of the Company (2025: £nil). Level 3 valuations include assumptions based on non-observable market data, such as discounts applied either to reflect changes in fair value of financial assets held at the price of recent investment, or to adjust revenue and earnings multiples. IFRS 13 requires an entity to disclose quantitative information about the significant unobservable inputs used. Of the Company's level 3 investments, 90 per cent are held on a revenue multiple basis and 5 per cent on an earnings multiple basis, which have significant judgement applied to the valuation inputs. The table below sets out the range of Revenue Multiple (RM), Earnings Multiple (EM), and discounts applied in arriving at investments valued on these bases. The remaining 5 per cent are valued at cost (3 per cent), net asset value reviewed for change in fair value (1 per cent) or anticipated sale proceeds (1 per cent). British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 7. Financial Assets at Fair Value through Profit or Loss – Investments (continued) | Revenue Multiple Inputs | | Application Software | Cloud & DevOps | Data | New Media | Retail & Brands | Tech-enabled Services | | --- | --- | --- | --- | --- | --- | --- | --- | | 2026 | Revenue Multiple | 4.00-8.80 | 4.37-8.80 | 4.00-8.80 | 0.71 | 1.47 | 1.47-8.80 | | | Revenue Multiple Weighted Average | 6.49 | 6.43 | 7.43 | 0.71 | 1.47 | 6.23 | | | Revenue Multiple Weighted Average | 6.99 | 6.55 | 9.43 | 0.84 | 1.23 | 6.47 | | 2026 | Combined RM and/or Marketability Discount | 4%-79% | 28%-36% | 0%-68% | 48% | 24% | 20%-48% | | | Combined RM and/or Marketability Discount Weighted Average | 22% | 33% | 9% | 48% | 24% | 30% | | | Combined RM and/or Marketability Discount Weighted Average | 40% | 32% | 21% | 20% | 24% | 33% | | Earnings Multiple Inputs | | | Business Services | New Media | Retail & Brands | Tech-enabled Services | | --- | --- | --- | --- | --- | --- | --- | | 2026 | Earnings Multiple | | 8.88 | 5.75 | 9.74 | 12.38 | | | Earnings Multiple Weighted Average | | 8.88 | 5.75 | 9.74 | 12.38 | | | Earnings Multiple Weighted Average | | 10.66 | 5.68 | 10.34 | 10.54 | | 2025 | Combined EM and Marketability Discount | | 24% | 20% | 36% | 32% | | | Combined EM and Marketability Discount Weighted Average | | 24% | 20% | 36% | 32% | | | Combined EM and Marketability Discount Weighted Average | | 36% | 20% | 36% | 20% | The standard also requires disclosure, by class of financial instruments, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. Each unquoted portfolio company has been reviewed in order to identify the sensitivity of the valuation methodology to using alternative assumptions, which still fall within the IPEV Guidelines (see page 67). Where discounts have been applied (for example to revenue/earnings levels or multiple ratios) alternatives have been considered. For each unquoted investment, two scenarios have been modelled, principally a 5 per cent change to discount rates, although other factors were considered on an individual portfolio company British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements basis: more prudent assumptions (downside case) and more optimistic assumptions (upside case). Applying the downside case, the value of the unquoted investments would be £6.2 million or 3.9 per cent lower (2025: £5.9 million or 3.8 per cent lower). Using the upside case, the value would be increased by £6.1 million or 3.8 per cent (2025: £5.9 million or 3.8 per cent). Movements in investments at fair value through profit or loss during the previous year to 31 March 2025 are summarised as follows: | IFRS 13 measurement classification | Level 3 Unquoted Investments £000 | | --- | --- | | Opening cost | 77,385 | | Opening investment holding gain | 49,207 | | Opening fair value at 1 April 2024 | 126,592 | | Additions at cost | 29,288 | | Disposal proceeds | (9,643) | | Net profit on disposal* | 1,517 | | Change in fair value | 6,317 | | Foreign exchange loss | (661) | | Closing fair value at 31 March 2025 | 153,410 | | Closing cost | 104,737 | | Closing investment holding gain | 48,673 | | Closing fair value at 31 March 2025 | 153,410 | * The net profit on disposal in the table above is £1,517,000 whereas that shown in the Statement of Comprehensive Income is £965,000. The difference comprises the change in the value of deferred proceeds totalling a loss of £552,000 in respect of assets which have been disposed of and are not included within the investment portfolio at 1 April 2024. The following disposals took place in the year: | | Net proceeds from sale £000 | Cost £000 | Opening carrying value as at 1 April 2025 £000 | Realised gain (loss) on disposal £000 | | --- | --- | --- | --- | --- | | Unquoted investments: | | | | | | SharpCloud Software Limited | 9,105 | 4,380 | 7,952 | 1,153 | | Elucidat Ltd | 5,397 | 4,260 | 5,869 | (472) | | Teraview Limited | 3,041 | 377 | 1,044 | 1,997 | | Vuealta Holdings Limited | 724 | 626 | 2,045 | (1,321) | | Total from portfolio* | 18,267 | 9,643 | 16,910 | 1,357 | | Traveltek Group Holdings Limited | 555 | - | - | 555 | | ACC Aviation Group Limited | (300) | - | - | (300) | | Deferred consideration | 255 | - | - | 255 | | Total from investment portfolio** | 18,522 | 9,643 | 16,910 | 1,612 | * The investments in Wooshii Limited and Sipsynergy (via Hosted Network Services Limited) are still held within the portfolio at 31 March 2026, although their trading entities were realised during the year as detailed on page 7. ** The total from disposals in the year in the table above is £18,522,000 whereas that shown in the Statement of Cash flows is £17,990,000. The difference of £532,000 relates to deferred consideration, both received in the year and to be received in subsequent years. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 7. Financial Assets at Fair Value through Profit or Loss – Investments (continued) The following disposals took place in the year to 31 March 2025: | | Net proceeds from sale £000 | Cost £000 | Opening carrying value as at 1 April 2024 £000 | Realised gain (loss) on disposal £000 | | --- | --- | --- | --- | --- | | Unquoted investments: | | | | | | ACC Aviation Group Limited | 6,421 | 220 | 4,725 | 1,696 | | Traveltek Group Holdings Limited | 3,222 | 1,716 | 3,401 | (179) | | Total from portfolio | 9,643 | 1,936 | 8,126 | 1,517 | | Ncam Technologies Limited | 131 | - | - | 131 | | Displayplan Holdings Limited | (683) | - | - | (683) | | Deferred consideration | (552) | - | - | (552) | | Total from investment portfolio* | 9,091 | 1,936 | 8,126 | 965 | * The total from disposals in the year in the table above is £9,643,000 whereas that shown in the Statement of Cash flows is £7,259,000. The difference comprises deferred proceeds of £2,384,000 which will be received in subsequent years. ## Significant Interests YFM Private Equity Limited, the Company's Manager, also acts as manager to other funds that have invested in certain companies within the current portfolio of the Company. Details of these investments are summarised in the tables below. At 31 March 2026 the Company held a significant holding of at least 20 per cent of the issued ordinary share capital, either individually or alongside commonly managed funds, in the following companies: | Company | Principal activity | No of shares held by the Company | Percentage of class held by the Company* | Percentage of class held by commonly managed funds* | | --- | --- | --- | --- | --- | | AutomatePro Limited | Cloud & DevOps | 129,297 | 18% | 39% | | EL Support Services Limited** | Investment Company | 3,500 | 50% | 100% | | Force24 Ltd | Application Software | 35,678 | 20% | 39% | | Fuuse Limited | Application Software | 1,403,332 | 16% | 26% | | Hosted Network Services Limited** | Cloud & DevOps | 7,316,668 | 24% | 62% | | Integrum ESG Limited | Data | 6,472 | 14% | 23% | | KeTech Technology Holdings Limited | Tech-enabled Services | 128,333 | 12% | 36% | | NB Technology Services Limited** | Investment Company | 3,500 | 50% | 100% | | OC Engineering Services Limited** | Investment Company | 3,500 | 50% | 100% | | Outpost VFX Limited | New Media | 5,993,778 | 18% | 36% | | Panintelligence (via Paninsight Limited) | Data | 34,068 | 14% | 32% | | Plandek Limited | Cloud & DevOps | 155,930 | 17% | 29% | | Quality Clouds Limited | Cloud & DevOps | 585,073 | 16% | 33% | | Relative Insight Limited | Tech-enabled Services | 818,650 | 18% | 29% | | SH Healthcare Services Limited** | Investment Company | 3,500 | 50% | 100% | | SP Manufacturing Services Limited** | Investment Company | 3,500 | 50% | 100% | | Summize Limited | Application Software | 824,388 | 15% | 25% | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements | Company | Principal activity | No of shares held by the Company | Percentage of class held by the Company* | Percentage of class held by commonly managed funds* | | --- | --- | --- | --- | --- | | Tonkotsu Limited | Retail & Brands | 50,493 | 18% | 38% | | Unbiased EC1 Limited | Tech-enabled Services | 1,547,601 | 19% | 35% | | Vypr Validation Technologies Limited | Tech-enabled Services | 25,732 | 22% | 37% | | Wooshii Limited | New Media | 1,458,310 | 22% | 42% | | Workbuzz Analytics Limited | Application Software | 48,899 | 14% | 25% | | Xapien (via Digital Insight Technologies Ltd) | Application Software | 1,017,119 | 17% | 28% | * Fully diluted holding. ** The registered office of these significant holdings is given on the inside back cover. The amounts shown below are the net cost of investments as at 31 March 2026 and exclude those companies which are in receivership or liquidation: | | British Smaller Companies VCT plc £000 | British Smaller Companies VCT2 plc £000 | Other commonly managed funds £000 | Total £000 | | --- | --- | --- | --- | --- | | Arcus Global Limited | 1,830 | 1,220 | - | 3,050 | | Aura Life Limited | 1,500 | 1,000 | - | 2,500 | | AutomatePro Limited | 5,885 | 3,923 | 2,392 | 12,200 | | Biorelate Limited | 2,310 | 1,540 | - | 3,850 | | Biz2Mobile Limited | 1,898 | 1,265 | - | 3,163 | | DrDoctor (via ICNH Ltd) | 5,355 | 3,570 | 1,548 | 10,473 | | DynaRisk (via Zen Risk Limited) | 1,800 | 1,200 | - | 3,000 | | Eikon Holdco Limited | 750 | 500 | 250 | 1,500 | | EL Support Services Limited | 500 | 500 | - | 1,000 | | Force24 Ltd | 4,275 | 2,850 | 1,425 | 8,550 | | Frescobol Carioca Ltd | 1,800 | 1,200 | 500 | 3,500 | | Fuuse Limited | 4,800 | 3,200 | - | 8,000 | | GEEIQ (via Checkpoint GG Limited) | 2,358 | 1,572 | - | 3,930 | | Hosted Network Services Limited | 2,781 | 2,143 | 2,226 | 7,150 | | Intamac Systems Limited | 302 | 905 | - | 1,207 | | Integrum ESG Limited | 1,740 | 1,160 | - | 2,900 | | KeTech Technology Holdings Limited | 10 | 10 | 10 | 30 | | Matillion Limited | 1,778 | 1,456 | 549 | 3,783 | | NB Technology Services Limited | 500 | 500 | - | 1,000 | | OC Engineering Services Limited | 500 | 500 | - | 1,000 | | Ohalo Limited | 2,565 | 1,710 | - | 4,275 | | Outpost VFX Limited | 5,750 | 3,833 | 1,917 | 11,500 | | Panintelligence (via Paninsight Limited) | 1,781 | 1,187 | 1,187 | 4,155 | | Plandek Limited | 5,121 | 3,414 | - | 8,535 | | Quality Clouds Limited | 5,821 | 3,880 | 2,000 | 11,701 | | Relative Insight Limited | 4,586 | 3,057 | 100 | 7,743 | | SH Healthcare Services Limited | 500 | 500 | - | 1,000 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 7. Financial Assets at Fair Value through Profit or Loss – Investments (continued) | | British Smaller Companies VCT plc £000 | British Smaller Companies VCT2 plc £000 | Other commonly managed funds £000 | Total £000 | | --- | --- | --- | --- | --- | | SP Manufacturing Services Limited | 500 | 500 | - | 1,000 | | Spotless Water Limited | 2,183 | 1,456 | - | 3,639 | | Stormharvester Holdings Limited | 2,100 | 1,400 | 250 | 3,750 | | Summize Limited | 5,552 | 3,701 | - | 9,253 | | S4Labour Limited | 2,400 | 1,600 | - | 4,000 | | TeamFeePay (via Concept Apps Ltd) | 2,700 | 1,800 | - | 4,500 | | TiPJAR (via Pocket Change Pioneers Ltd) | 2,700 | 1,800 | - | 4,500 | | Tonkotsu Limited | 2,388 | 1,592 | 995 | 4,975 | | Unbiased EC1 Limited | 5,596 | 3,731 | 1,223 | 10,550 | | Vypr Validation Technologies Limited | 5,698 | 3,798 | - | 9,496 | | Wooshii Limited | 4,915 | 3,277 | 1,599 | 9,791 | | Workbuzz Analytics Limited | 4,703 | 3,135 | 912 | 8,750 | | Xapien (via Digital Insight Technologies Ltd) | 7,607 | 5,072 | - | 12,679 | Financial details of significant holdings of the Company are given below: | | Profit (loss) before taxation £million | Net assets (liabilities) £million | | --- | --- | --- | | EL Support Services Limited (year to 30 April 2025) | 0.05 | 0.52 | | NB Technology Services Limited (year to 30 April 2025) | 0.03 | (0.05) | | OC Engineering Services Limited (year to 30 April 2025) | 0.02 | 0.47 | | SH Healthcare Services Limited (year to 30 April 2025) | (0.48) | (0.51) | | Hosted Network Services Limited (year to 30 June 2025) | (0.18) | (1.06) | | SP Manufacturing Services Limited (year to 30 April 2025) | 0.16 | (0.69) | ## 8. Accrued Income and Other Assets | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Non-current assets | | | | Other assets | 2,169 | 1,714 | | Current assets: | | | | Accrued income on cash, cash equivalents and cash deposits | 351 | 334 | | Prepayments and other debtors | 1,052 | 890 | | | 1,403 | 1,224 | Non-current assets relate to contingent deferred consideration, which is subject to fair value changes, where this is expected to be received in cash more than one year from the balance sheet date. The carrying amounts of the Company's accrued income are denominated in sterling. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements 9. Current Asset Investments and Cash and Cash Equivalents | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Money market funds | 82,500 | 69,000 | | Current asset investments | 82,500 | 69,000 | | Cash at bank | 37,806 | 28,958 | | Short-term deposits | 2,013 | 2,013 | | Cash and cash equivalents | 122,319 | 99,971 | 10. Trade and Other Payables | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Amounts payable within one year: | | | | Accrued expenses | 226 | 344 | | | 226 | 344 | 11. Called-up Share Capital | | 2026 Allotted, called-up and fully paid £000 | 2025 Allotted, called-up and fully paid £000 | | --- | --- | --- | | Ordinary shares of 0.01 pence Issued 412,675,467 (2025: 353,377,653) including 41,324,542 shares held in treasury (2025: 34,198,996) | 41 | 35,338 | The movement in the year was as follows: | | | Price pence | Date | Number of shares | Share Capital £000 | | --- | --- | --- | --- | --- | --- | | Total as at 1 April 2025 | | | | 353,377,653 | 35,338 | | Issue of shares | Fundraising | 81.61-86.33 | 1 April 2025 | 36,799,582 | 3,680 | | Issue of shares | DRIS | 78.55 | 25 July 2025 | 1,515,132 | 151 | | Issue of shares | DRIS | 78.05 | 19 December 2025 | 1,498,811 | - | | Issue of shares | Fundraising | 79.84-83.80 | 7 January 2026 | 19,484,289 | 2 | | Reduction in nominal value of share capital | | | | - | (39,130) | | As at 31 March 2026 (including treasury shares) | | | | 412,675,467 | 41 | | As at 31 March 2026 (excluding treasury shares) | | | | 371,350,925 | | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 11. Called-up Share Capital (continued) The movement in the previous year to 31 March 2025 was as follows: | | | Price pence | Date | Number of shares | Share Capital £000 | | --- | --- | --- | --- | --- | --- | | Total as at 1 April 2024 | | | | 288,297,782 | 28,830 | | Issue of shares | Fundraising | 84.63-90.25 | 3 April 2024 | 42,588,037 | 4,259 | | Issue of shares | DRIS | 81.60 | 26 July 2024 | 1,369,910 | 137 | | Issue of shares | DRIS | 79.80 | 20 December 2024 | 1,364,849 | 136 | | Issue of shares | DRIS | 78.55 | 27 January 2025 | 875,031 | 88 | | Issue of shares | Fundraising | 80.13-84.09 | 30 January 2025 | 18,882,044 | 1,888 | | As at 31 March 2025 (including treasury shares) | | | | 353,377,653 | 35,338 | | As at 31 March 2025 (excluding treasury shares) | | | | 319,178,657 | | During the year the Company purchased 7,125,546 (2025: 8,560,575) of its own shares. These shares are held on the balance sheet in the Capital Reserve. Full details of the share purchases are set out in the Directors' Report under the heading 'Buy-back and Issue of Ordinary Shares'. The treasury shares have been included in calculating the number of ordinary shares in issue, and excluded in calculating the number of ordinary shares with voting rights in issue, at 31 March 2026 and 31 March 2025. ## 12. Basic and Diluted Net Asset Value per Ordinary Share The basic and diluted net asset value per ordinary share is calculated on attributable assets of £285,531,000 (2025: £257,111,000) and 371,350,925 (2025: 319,178,657) ordinary shares in issue at the year end. The treasury shares have been excluded in calculating the number of ordinary shares in issue at 31 March 2026. The Company has no potentially dilutive shares and consequently, basic and diluted net asset values per ordinary share are equivalent in both the years ended 31 March 2026 and 31 March 2025. ## 13. Total Return per Ordinary Share The Total Return per ordinary share is calculated on cumulative dividends paid of 188.15 pence per ordinary share (2025: 184.15 pence per ordinary share) plus the net asset value as calculated per note 12. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements ## 14. Financial Commitments There are no financial commitments at 31 March 2026 or 31 March 2025. ## 15. Events after the Balance Sheet Date On 1 April 2026 the Company allotted the final shares from its fully subscribed 2025/26 share offer. Gross proceeds of £37.3 million were raised, resulting in the issue of 45,900,519 ordinary shares. This increased the number of ordinary shares in issue to 417,251,444. Subsequent to the year end, the Company has invested £3.9 million into new portfolio companies Inploi and StudentCrowd, and £6.5 million into existing portfolio companies GEEIQ and Spotless Water. ## 16. Financial Instruments The Company has no derivative financial instruments and has no financial asset or liability for which hedge accounting has been used in either year. The Company classifies its financial assets as either fair value through profit or loss or at amortised cost, and its financial liabilities, primarily accrued expenses, at amortised cost. It is the directors' opinion that the carrying value of financial assets and liabilities approximates their fair value. Therefore, the directors consider all assets and liabilities to be carried at a valuation which equates to fair value. Investments are made in a combination of equity, fixed rate and variable rate financial instruments so as to comply with VCT legislation and provide potential future capital growth. Surplus funds are held in bank deposits or money market funds until suitable qualifying investment opportunities arise. The Company has reviewed all contracts for embedded derivatives that are required to be separately accounted for if they do not meet certain criteria set out in the standard. No embedded derivatives have been identified by the Company. The accounting policies for financial instruments have been applied to the items below: | | 2026 | | 2025 | | | --- | --- | --- | --- | --- | | | Other assets at amortised cost £000 | Assets at fair value through profit or loss £000 | Other assets at amortised cost £000 | Assets at fair value through profit or loss £000 | | Non-current assets at fair value through profit or loss | | | | | | Financial assets | - | 159,866 | - | 154,546 | | Other assets | - | 2,169 | - | 1,714 | | Current assets | | | | | | Cash and cash equivalents | 39,819 | 82,500 | 30,971 | 69,000 | | Other assets | - | 747 | - | 670 | | Accrued income on cash and cash equivalents | 351 | - | 334 | - | | | 40,170 | 245,282 | 31,305 | 225,930 | | Other assets – not financial instruments | 305 | - | 220 | - | | | 40,475 | 245,282 | 31,525 | 225,930 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 16. Financial Instruments (continued) Liabilities as per Balance Sheet | | 2026 Other financial liabilities £000 | 2025 Other financial liabilities £000 | | --- | --- | --- | | Trade and other payables | 226 | 344 | | | 226 | 344 | Assets classified as fair value through profit or loss were designated as such upon initial recognition. The Company's investing activities expose it to various types of risk that are associated with the financial instruments and markets in which it invests. The most important types of financial risk to which the Company is exposed are market risk, credit risk and liquidity risk. The nature and extent of the financial instruments outstanding at the balance sheet date and the risk management policies employed by the Company are discussed below. There have been no changes since last year in the objectives, policies, and processes for managing and measuring risks facing the Company. ## 16a Market Risk ### Market Price Risk The Company invests in new and expanding businesses, the shares of which may not be traded on the stock market. Consequently, exposure to market factors, in relation to many investments, stems from market based measures that may be used to value unquoted investments. The market also defines the value at which investments may be sold. Returns are therefore maximised when investments are bought or sold at appropriate times in the economic cycle. Market price risk arises from uncertainty about the future prices of financial instruments held in accordance with the Company's investment objectives. It represents the potential loss that the Company might suffer through holding market positions in the face of market movements. In addition, the ability of the Company to purchase or sell investments is also constrained by requirements set down for VCTs. All of the Company's financial assets through profit or loss are in unquoted companies held at fair value. The valuation methodology for these investments includes the application of externally produced revenue and earnings multiples. Therefore the value of the unquoted element of the portfolio is also indirectly affected by price movements on the listed market. Investments have been valued in line with the Guidelines described within note 1. Those using revenue and earnings multiple methodologies include judgements regarding the level of discount applied to that multiple. The effect of changing the level of discounts applied to the multiples is considered in note 7 on pages 78 and 79. The largest single concentration of risk relates to the Company's investment in Matillion Limited which constitutes 6.8 per cent (2025: 9.0 per cent) of the net assets attributable to the Company's shareholders. The Board seeks to mitigate this risk by diversifying the portfolio and monitors the status of all investments on an ongoing basis. The average investment (excluding those whose value has been reduced to nil) is 1.5 per cent (2025: 1.7 per cent) of the value of net assets. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # Comparison of Realised Proceeds to Unrealised Valuations The table below shows a comparison of the realised proceeds to the unrealised valuations one year prior to sale, for all disposals of unquoted investments over the last ten years: | Full disposal | Date of disposal | Sale proceeds £000 | Valuation £000 | Increase (decrease) £000 | | --- | --- | --- | --- | --- | | Go Outdoors Topco Limited | Nov-16 & Apr-11 | 20,849 | 9,932 | 10,917 | | Cambrian Park & Leisure Homes Limited | Mar-17 | - | 1,876 | (1,876) | | Ness (Holdings) Limited | Mar-17 | 229 | 764 | (535) | | Selima Holding Company Ltd | May-17 | 2,811 | 923 | 1,888 | | Harvey Jones Holdings Limited | Aug-17 | 970 | 1,113 | (143) | | PowerOasis Limited | Sep-18 | - | 273 | (273) | | GTK (Holdco) Limited | Dec-18 | 3,751 | 2,738 | 1,013 | | Mangar Health Limited | Dec-18 | 5,513 | 3,962 | 1,551 | | Gill Marine Holdings Limited | Dec-18 | 3,802 | 2,569 | 1,233 | | Leengate Holdings Limited | Apr-19 | 1,936 | 1,769 | 167 | | Eikon Holdco Limited (partial realisation) | Oct-19 | 6,314 | 2,250 | 4,064 | | Business Collaborator Limited | Mar-20 | 8,085 | 3,662 | 4,423 | | RMS Group Holdings Limited | Jun-20 | 1,446 | 907 | 539 | | Bagel Nash Group Limited | Oct-20 | 150 | 607 | (457) | | Deep-Secure Ltd | Jul-21 | 6,560 | 2,956 | 3,604 | | Arraco Global Markets Limited | Sep-22 | - | 1,625 | (1,625) | | Intelligent Office UK (via IO Outsourcing Limited) | Sep-22 | 6,119 | 4,600 | 1,519 | | Springboard Research Holdings Limited | Sep-22 | 8,673 | 6,186 | 2,487 | | Wakefield Acoustics (via Malvar Engineering Limited) | Jan-23 | 1,068 | 278 | 790 | | Ncam Technologies Limited | Apr-23 | 1,813 | 2,213 | (400) | | E2E Engineering Limited | Nov-23 | 1,960 | 1,148 | 812 | | Macro Art Holdings Limited | Nov-23 | 1,484 | 229 | 1,255 | | Displayplan Holdings Limited | Feb-24 | 8,953 | 7,630 | 1,323 | | Traveltek Holdings Limited | Oct-24 | 3,777 | 2,797 | 980 | | ACC Aviation Group Limited | Feb-25 | 6,121 | 4,340 | 1,781 | | Elucidat Ltd | Oct-25 | 5,397 | 6,061 | (664) | | SharpCloud Software Limited | Dec-25 | 9,105 | 6,662 | 2,443 | | Teraview Limited | Jan-26 | 3,041 | 1,100 | 1,941 | | Vuealta Holdings Limited | Jan-26 & Dec-22 | 5,325 | 5,483 | (158) | | | | 125,252 | 86,653 | 38,599 | # Interest Rate Risk The Company's venture capital investments include £2,027,000 (2025: £2,435,000) of loan stock in unquoted companies. The majority of this loan stock at 31 March 2026 is at fixed rates to guard against fluctuations in interest rates. As a result the Company is only exposed to cash flow interest rate risk on £750,000 (2025: £750,000) of its loan stock portfolio. The Company has some exposure to interest rates as a result of interest earned on bank deposits and money market funds. Other financial assets (being accrued income) and other financial liabilities (being accrued expenses) attract no interest. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ## 16. Financial Instruments (continued) A sensitivity analysis has not been performed as the amounts involved are not considered to be significant and the interest earned is also dependent on the level of funds held which fluctuates significantly throughout the year. | | 2026 | | | 2025 | | | | --- | --- | --- | --- | --- | --- | --- | | | £000 | Weighted average interest rate % | Weighted average time for which rate is fixed Months | £000 | Weighted average interest rate % | Weighted average time for which rate is fixed Months | | Fixed rate loan stock and preference shares | 4,202 | 11.7 | 47 | 4,865 | 14.3 | 50 | ## Exchange Rate Risk Of the Company's financial assets measured at fair value through profit or loss, 12 per cent (2025: 15 per cent) are denominated in US dollars. A 5 per cent increase in the £/$ exchange rate at 31 March 2026 would have decreased the net assets attributable to the Company's shareholders and the total profit for the year by £924,000 (2025: £1,107,000). An equal change in the opposite direction would have increased the net assets attributable to the Company's shareholders and the total profit for the year by £1,021,000 (2025: £1,223,000). ## 16b Credit Risk Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Manager has in place a monitoring procedure in respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets excluding equity investments total £128,345,000 (2025: £116,830,000) which best represents the maximum credit risk exposure at the balance sheet date. The Company does not invest in floating rate instruments other than, on occasion, unquoted loan stock. Credit risk on unquoted loan stock held within unquoted investments is considered to be part of market risk as disclosed above. The fair value of other assets is not regarded as having changed due to the changes in credit risk in either year. Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be small due to the short settlement period involved and the high credit quality of the brokers used. The Board monitors the quality of service provided by the brokers used to further mitigate this risk. Bankruptcy or insolvency of the broker may cause the Company's rights with respect to securities held by the broker to be delayed or limited. The Manager monitors the Company's risk by reviewing the broker's internal control reports on a regular basis. The only significant assets not held at fair value are cash at bank and other cash equivalents. The funds held by the Company are held across a number of financial institutions to spread the risk. Bankruptcy or insolvency of these financial institutions may cause the Company's rights with respect to the funds held by the financial institutions to be delayed or limited. The financial institutions used by the Company are large and reputable. Should the credit quality or the financial position of the financial institutions deteriorate significantly the Manager will move the holdings to another financial institution. Any expected credit loss associated with the balances are considered to be highly immaterial. The maturities of the loan stock portfolio are as follows: | | <1 year | 2026 £000 1-2 years | 2-5 years | <1 year | 2025 £000 1-2 years | 2-5 years | | --- | --- | --- | --- | --- | --- | --- | | Unquoted loan investments | 150 | 1,000 | 877 | - | 150 | 2,285 | British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Financial Statements An aged analysis of the unquoted loan investments included above, which are past due but not individually impaired, is set out below. For this purpose these loans are considered to be past due when any payment due date under the loan's contractual terms (such as payment of interest) is received late or missed. The full value of the loan is given even though, in some cases, the only default is in respect of interest. | | 2026 £000 | 2025 £000 | | --- | --- | --- | | Loans to investee companies past due | 1,000 | 535 | ## 16c Liquidity Risk The risk to the Company relates to liabilities which fall due within one year. These liabilities are deemed immaterial and as such the risk associated with them is minimal. The Company needs to retain enough liquid resources to support the financing needs of its investment businesses. To meet this aim the Company places its surplus funds in a mixture of bank interest deposit accounts and money market funds. Investments in liquid funds are held for the purpose of liquidity whilst waiting for suitable qualifying investment opportunities to arise. The money market funds are closely monitored and could be realised at short notice if required, although there is some risk that redemptions could be suspended in extreme market conditions. The Company's liquidity risk is managed on an ongoing basis by the Manager in accordance with policies and procedures in place. The cash requirements of the Company in respect of each investment are assessed at monthly portfolio meetings. The Company's overall liquidity risks are monitored on a quarterly basis by the Board. The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable and accrued expenses. Of the Company's assets 42.8 per cent (2025: 38.9 per cent) are in the form of liquid funds. There are no undrawn committed borrowing facilities at either year end. The Company does not have a material amount of liabilities at the year end. ## 17. Capital Management The Company's objectives when managing capital are: - To safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and - To ensure sufficient liquid resources are available to meet the funding requirements of its investments and to fund new investments where identified. The Company has no external debt; consequently all capital is represented by the value of share capital, distributable and other reserves. Total shareholder equity at 31 March 2026 was £285,531,000 (2025: £257,111,000). In order to maintain or adjust its capital structure the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets. There have been no changes in capital management objectives or the capital structure of the business from the previous year. The Company is not subject to any externally imposed capital requirements. ## 18. Related Party Transactions Fees payable during the year to the directors and their interests in the shares of the Company are disclosed within the Directors' Remuneration Report on page 51. There were no amounts outstanding and due to the directors at 31 March 2026 (2025: £nil). British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information # NOTICE OF THE ANNUAL GENERAL MEETING No: 03134749 BRITISH SMALLER COMPANIES VCT PLC NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of the Company will be held at 8-10 Hill Street, London W1J 5NG on 10 September 2026 at 9:30 am for the following purposes: To consider and, if thought fit, pass the following resolutions: ## Ordinary Resolutions (1) That the annual report and accounts for the year ended 31 March 2026 be received. (2) That the Directors' Remuneration Report for the year ended 31 March 2026 be approved other than the part of such report containing the Directors' Remuneration Policy. (3) That the Directors' Remuneration Policy contained in the Directors' Remuneration Report for the year ended 31 March 2026 be approved. (4) That Mr R Cook be re-elected as a director. (5) That Mr A C N Bastin be re-elected as a director. (6) That Mr J H Cartwright be re-elected as a director. (7) That Ms P Sapre be re-elected as a director. (8) That BDO LLP be re-appointed as auditor to the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the Company and that the directors be authorised to fix the auditor's remuneration. ## To authorise the directors to allot shares That the directors be and are hereby generally and unconditionally authorised in accordance with Section 551 of the Companies Act 2006 (the "Act") to exercise all the powers of the Company to allot shares in the Company or to grant rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount of £9,000 (representing approximately 21.6 per cent of the ordinary share capital in issue, excluding treasury shares, as at the date of this Notice), during the period commencing on the passing of this Resolution and expiring on the later of 15 months from the passing of this Resolution or the conclusion of the next Annual General Meeting of the Company (unless previously revoked, varied or extended by the Company in general meeting), but so that this authority shall allow the Company to make before the expiry of this authority offers or agreements which would or might require shares in the Company to be allotted, or rights to subscribe for or to convert any security into shares to be granted, after such expiry and the directors may allot shares in the Company in pursuance of any such offer or agreement notwithstanding the expiry of such authority, and that all previous authorities given to the directors be and they are hereby revoked, provided that such revocation shall not have retrospective effect. ## To authorise the directors to allot shares under the Company's DRIS That, in addition to existing authorities, the directors be and are hereby generally and unconditionally authorised in accordance with Section 551 of the Act to exercise all the powers of the Company to allot shares in the Company up to an aggregate nominal amount of £2,000 in connection with the Company's Dividend Re-investment Scheme (representing approximately 4.8 per cent of the ordinary share capital in issue, excluding treasury shares, as at the date of this Notice) during the period commencing on the passing of this Resolution and expiring on the later of 15 months from the passing of this Resolution or the conclusion of the next Annual General Meeting of the Company (unless previously revoked, varied or extended by the Company in general meeting) but so that this authority shall allow the Company to make, before the expiry of this authority, any offers or agreements which would or might require shares in the Company to be allotted after such expiry and the directors may allot shares in the Company in pursuance of any such offer or agreement notwithstanding the expiry of such authority. ## Special Resolutions ### To waive pre-emption rights in respect of the allotment of shares That the directors be and are hereby empowered in accordance with Section 570(1) of the Act during the period commencing on the passing of this Resolution and expiring at the conclusion of the Company's next Annual General Meeting, or on the expiry of 15 months following the passing of this Resolution, whichever is the later, (unless previously revoked, varied or extended by the Company in general meeting), to allot equity securities (as British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information defined in Section 560 of the Act) for cash pursuant to the general authority conferred upon the directors in Resolution 9 above as if Section 561 of the Act did not apply to any such allotment provided that this power is limited to the allotment of equity securities in connection with the allotment for cash of equity securities up to an aggregate nominal amount of £9,000, but so that this authority shall allow the Company to make offers or agreements before the expiry and the directors may allot securities in pursuance of such offers or agreements as if the powers conferred hereby had not so expired. This power applies in relation to a sale of shares which is an allotment of equity securities by virtue of Section 560(3) of the Act as if in the first sentence of this Resolution the words "pursuant to the general authority conferred upon the directors in Resolution 9 above" were omitted. (12) To waive pre-emption rights in respect of the allotment of shares under the Company's DRIS That conditional upon the passing of Resolution 10 above and in addition to existing authorities, the directors be and are hereby empowered pursuant to Section 571 of the Act to allot or make offers or agreements to allot equity securities (which expression shall have the meaning ascribed to it in Section 560(1) of the Act) for cash pursuant to the authority granted by Resolution 10 above, as if Section 561 of the Act did not apply to any such allotment and so that: (a) reference to allotment of equity securities in this Resolution shall be construed in accordance with Section 560(2) of the Act; and (b) the power conferred by this Resolution shall enable the Company to make any offer or agreement before the expiry of the said power which would or might require equity securities to be allotted after the expiry of the said power and the directors may allot equity securities in pursuance of any such offer or agreement notwithstanding the expiry of such power. The power provided by this Resolution shall expire on the later of 15 months from the passing of this Resolution or on the conclusion of the Company's next Annual General Meeting (unless previously revoked, varied or extended by the Company in general meeting). (13) To authorise the directors to make purchases of its own shares That in substitution for any existing authority but without prejudice to the exercise of any such power prior to the date hereof, the Company be generally and unconditionally authorised to make one or more market purchases (within the meaning of Section 693(4) of the Act of ordinary shares of 0.01 pence in the capital of the Company provided that: a. The maximum aggregate number of ordinary shares that may be purchased is 62,545,991 being 14.99 per cent of the issued ordinary shares (excluding treasury shares) as at 11 June 2026; b. The maximum price (excluding expenses) which may be paid for an ordinary share is an amount equal to the maximum amount permitted to be paid in accordance with rules of the UK Listing Authority in force as at the date of purchase; c. The minimum price (excluding expenses) which may be paid for an ordinary share is its nominal value; d. This authority shall take effect from 10 September 2026 and shall expire at the conclusion of the Company's Annual General Meeting in 2029 or on 10 September 2029, whichever is the later; and e. The Company may make a contract or contracts to purchase ordinary shares under this authority before the expiry of the authority, which will or may be executed wholly or partly after the expiry of the authority, and may make a purchase of ordinary shares in pursuance of any such contract or contracts. By order of the Board The City Partnership (UK) Limited Company Secretary 11 June 2026 Registered office: 4th Floor, 2 Bond Court, Leeds LS1 2JZ Information regarding the Annual General Meeting, including the information required by section 311A of the Companies Act 2006, is available from www.bscfunds.com. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information # NOTICE OF ANNUAL GENERAL MEETING (CONTINUED) ## Notes: (a) Any member of the Company entitled to attend and vote at the Annual General Meeting is also entitled to appoint one or more proxies to attend, speak and vote instead of that member. Any such appointment can only be made using the procedures set out in these notes and the notes of the Form of Proxy. A member may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member. A proxy may demand, or join in demanding, a poll. A proxy need not be a member of the Company but must attend the Annual General Meeting in order to represent their appointer. A member entitled to attend and vote at the Annual General Meeting may appoint the Chairman or another person as their proxy although the Chairman will not speak for the member. A member who wishes their proxy to speak for them should appoint their own choice of proxy (not the Chairman) and give instructions directly to that person. If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not have a right to appoint any proxies under the procedures set out in these notes. Please read note (k) below. Under section 319A of the Companies Act 2006, the Company must answer any question a member asks relating to the business being dealt with at the Annual General Meeting unless: - answering the question would interfere unduly with the preparation for the Annual General Meeting or involve the disclosure of confidential information; - the answer has already been given on a website in the form of an answer to a question; or - it is undesirable in the interests of the Company or the good order of the Annual General Meeting that the question be answered. (b) To be valid, a Form of Proxy must be completed and signed and with the power of attorney or other written authority, if any, under which it is signed or an office or notarially certified copy or a copy certified in accordance with the Powers of Attorney Act 1971 of such power and written authority, must be delivered to The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield, HD4 7BH not less than 48 hours (excluding weekends and public holidays) before the time appointed for holding the Annual General Meeting or adjourned meeting at which the person named in the Form of Proxy proposes to vote. In the case of a poll taken more than 48 hours (excluding weekends and public holidays) after it is demanded, the document(s) must be delivered as aforesaid not less than 24 hours (excluding weekends and public holidays) before the time appointed for taking the poll, or where the poll is taken not more than 48 hours (excluding weekends and public holidays) after it was demanded, be delivered at (and prior to the commencement of) the meeting at which the demand is made. If no voting indication is given in the Form of Proxy, your proxy will vote (or abstain from voting) as they think fit in relation to any matter put to the Annual General Meeting. (c) To be valid, any Form of Proxy or other instrument appointing a proxy, must be returned by no later than 48 hours before the time the Annual General Meeting is scheduled to begin, through any one of the following methods: i) by post, courier or (during normal business hours only) hand to the Company's UK registrar at: The City Partnership (UK) Limited The Mending Rooms Park Valley Mills Meltham Road Huddersfield HD4 7BH; ii) electronically through the website of the Company's UK registrar at https://bsc-agm.city-proxyvoting.uk; or iii) in the case of shares held through CREST, via the CREST system (see note (p) below). (d) If you return more than one proxy appointment, either by paper or electronic communication, the appointment received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication facilities are open to all shareholders and those who use them will not be disadvantaged. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information (e) The return of a completed Form of Proxy, electronic filing or any CREST Proxy Instruction (as described in note (p) below) will not prevent a shareholder from attending the Meeting and voting in person if they wish to do so. (f) In order to revoke a proxy instruction a member will need to inform the Company by sending a signed hard copy notice clearly stating the intention to revoke the proxy appointment to The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield, HD4 7BH. 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. The revocation notice must be received by The City Partnership before the Annual General Meeting or the holding of a poll subsequently thereto. If a member attempts to revoke their proxy appointment but the revocation is received after the time specified then, subject to note (g) directly below, the proxy appointment will remain valid. (g) Completion and return of a Form of Proxy will not preclude a member of the Company from attending and voting in person. If a member appoints a proxy and that member attends the Annual General Meeting in person, the proxy appointment will automatically be terminated. (h) Copies of the directors' Letters of Appointment, the Register of Directors' Interests in the ordinary shares of the Company, and a copy of the current articles of association of the Company will be available for inspection at the registered office of the Company during usual business hours on any weekday (weekends and public holidays excluded) from the date of this Notice, until the end of the Annual General Meeting and at the Annual General Meeting venue itself for at least 15 minutes prior to and during the meeting. (i) Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified that only those holders of the Company's shares registered on the Register of Members of the Company as at close of business on 7 September 2026 or, in the event that the Annual General Meeting is adjourned, on the Register of Members at close of business on the day two days before the time of any adjourned meeting, shall be entitled to attend and vote at the said Annual General Meeting in respect of such shares registered in their name at the relevant time. Changes to entries on the Register of Members after close of business on 7 September 2026 or, in the event that the Annual General Meeting is adjourned, on the Register of Members less than 48 hours before the time of any adjourned meeting, shall be disregarded in determining the right of any person to attend and vote at the Annual General Meeting. (j) As at 11 June 2026 the Company's issued share capital comprised 417,251,444 ordinary shares of 0.01 pence each with a further 41,324,542 shares held in treasury. Those treasury shares represented 9.0 per cent of the total issued share capital (including treasury shares) at the aforementioned date. Each ordinary share carries one voting right at the Annual General Meeting of the Company and so the total number of voting rights in the Company as at 11 June 2026 was 417,251,444. (k) If you are a person who has been nominated under section 146 of the Companies Act 2006 to enjoy information rights ("Nominated Person"): - You may have a right under an agreement between you and the member of the Company who has nominated you to have information rights ("Relevant Member") to be appointed or to have someone else appointed as a proxy for the Annual General Meeting; - If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights; - Your main point of contact in terms of your investment in the Company remains the Relevant Member (or, perhaps your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information # NOTICE OF ANNUAL GENERAL MEETING (CONTINUED) (I) A company which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share. (m) In the case of joint members, any one of them may sign the Form of Proxy. The vote of the person whose name stands first in the register of members of the Company will be accepted to the exclusion of the votes of the other joint holders. (n) A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given on the Form of Proxy, the proxy will vote or abstain from voting at their discretion. The proxy will vote (or abstain from voting) as they think fit in relation to any other matter which is put before the Annual General Meeting. (o) Members may not use any electronic address provided either in this Notice of Annual General Meeting, or any related documents (including the Chairman's letter and Form of Proxy), to communicate with the Company for any purposes other than those expressly stated. (p) CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland's specifications, and must contain the information required for such instruction, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent (8RA57) not less than 48 hours (excluding weekends and public holidays) before the time of the Annual General Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information # REGISTERED OFFICES OF SIGNIFICANT HOLDINGS ## Investment Companies EL Support Services Limited, NB Technology Services Limited, OC Engineering Services Limited, SH Healthcare Services Limited, SP Manufacturing Services Limited: 4th Floor 2 Bond Court Leeds LS1 2JZ ## Hosted Network Services Limited: Sipsynergy Spaces 4500 Parkway Fareham PO15 7AZ British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- Company Information # ADVISERS TO THE COMPANY ## Manager YFM Private Equity Limited 4th Floor 2 Bond Court Leeds LS1 2JZ ## Registrar The City Partnership (UK) Limited The Mending Rooms Park Valley Mills Meltham Road Huddersfield HD4 7BH ## Solicitor Howard Kennedy LLP No.1 London Bridge London SE1 9BG ## Stockbroker Panmure Liberum One New Change London EC4M 9AF ## Promoter RAM Capital Partners LLP 18 Soho Square London W1D 3QL ## Independent Auditor BDO LLP 55 Baker Street London W1U 7EU ## VCT Status Adviser Philip Hare & Associates LLP Bridge House 181 Queen Victoria Street London EC4V 4EG ## Banker Santander UK plc 8th Floor Landmark Oxford Street Manchester M2 1PB ## Company Secretary The City Partnership (UK) Limited The Mending Rooms Park Valley Mills Meltham Road Huddersfield HD4 7BH ## Depositary Thompson Taraz Depositary Limited 4th Floor, Stanhope House 47 Park Lane London W1K 1PR British Smaller Companies VCT plc Annual Report & Financial Statements 2026 --- . --- YFM Equity Partners BRITISH SMALLER COMPANIES VCT PLC 4th Floor 2 Bond Court Leeds LS1 2JZ Tel 0113 244 1000 Email bscfunds@yfmep.com bscfunds.com Transforming small businesses