Baronsmead Venture Trust plc
Annual Report and Audited Financial
Statements for the year ended
30September 2024
Company number 03504214
Please join us for the
2025 Baronsmead
Shareholder event
& Annual General
Meetings (AGM)
Wednesday 12 March 2025
Saddlers’ Hall EC2V 6BR
10:30am
Welcome reception
11:00am
Shareholder presentation
12.30pm
Break for lunch and refreshments
1 : 1 5 p m
Baronsmead Venture Trust AGM
1:30pm
Baronsmead Second Venture Trust AGM
Register to attend at www.greshamhouse.com/baronsmead-
vcts-agm-2025 / or scan the QR code below.
Please note the event will be in-person only
The Notice of AGM will be posted to shareholders separately, and
will include an explanation of the items to be considered. It will be
uploaded to the Company’s website in due course.
Contents
Investment policy and objective 2
About Baronsmead Venture Trust plc 3
01
Strategic report
Financial highlights 5
Performance summary 6
Chair’s statement 7
Manager’s review 10
Investments in the year 14
Realisations in the year 16
Ten largest investments 17
Principal risks and uncertainties 22
Environmental, Social & Governance (ESG) 24
Other matters 28
Directors’ duties 32
02
Directors’ report
Board of Directors 37
Directors’ report 38
Corporate governance 41
Audit Committee report 46
Nomination Committee report 49
Directors’ remuneration report 52
Statement of Directors’ responsibilities 57
Independent auditor’s report 58
03
Financial Statements
Income statement 67
Statement of changes in equity 68
Balance sheet 69
Statement of cash flows 70
Notes to the financial statements 71
04
Appendices
Cash and total returns to shareholders since launch 89
Cash returned to shareholders by date of investment 90
Dividends paid since launch 91
Full investment portfolio 92
Glossary 95
05
Information
Shareholder information and contact details 99
Corporate information 102
Example investments
Ozone (unquoted)
Ozone API is the provider of a software platform enabling
banks to deliver APIs to comply with and generate
revenue opportunities from Open Banking and Open
Finance globally.
IntelliAM (quoted)
IntelliAM provides platform-based machine-learning
solutions to blue-chip clients in the FMCG sector,
increasing the operating and energy efficiency of their
manufacturing sites.
Panthera (unquoted)
Panthera is an independent site management organisation
providing patient recruitment services to clinical research
organisations, pharma and biotech companies.
Skillcast (quoted)
Skillcast provides a compliance e-learning platform and
subscription-based solutions to UK corporate clients
across professional services.
If you have sold or otherwise transferred all of your shares in Baronsmead Venture Trust plc, please forward this document
and the accompanying form of proxy as soon as possible to the purchaser or transferee, or to the stockbroker, bank or
other agent through whom the sale or transfer was, or is being, effected, for delivery to the purchaser or transferee.
Annual Report and Audited Financial Statements 2024 1
Co-investment
The Company typically invests alongside Baronsmead
Second Venture Trust plc in unquoted and quoted
companies sourced by the Manager. Following the
Manager’s acquisition of the Mobeus VCTs in September
2021, the Company now also co-invests alongside
the Mobeus VCTs in new unquoted VCT qualifying
investments. All new qualifying AIM dealflow will continue
to be exclusively allocated between the Company and
Baronsmead Second Venture Trust plc.
As detailed in the Management retention section of the
Strategic Report on page 30, the Manager’s staff and
portfolio consultants are entitled to invest in unquoted
investments alongside the Company. This arrangement is
in line with current practice of private equity houses and
its objective is to attract, recruit, retain and incentivise
the Manager’s team and is made on terms which align the
interests of shareholders and the Manager.
Borrowing powers
Should it be required, the Company’s policy is to use
borrowing for short term liquidity purposes only up to a
maximum of 25per cent of the Company’s gross assets, as
permitted by the Company’s Articles of Association.
Investment objective
The Company is a tax efficient listed company which aims
to achieve long-term positive investment returns for private
investors, including tax-free dividends.
Dividend policy
The Board will decide the annual dividends each year
and the level of the dividends will depend on investment
performance, the level of realised returns and available
liquidity. The dividend policy guidelines below are not
binding and the Board retains the ability to pay higher
or lower dividends relevant to prevailing circumstances
and actual realisations. However, the Board confirms the
following two guidelines that shape its dividend policy:
The Board will, wherever possible, seek to pay two
dividends to shareholders in each calendar year, typically
an interim in September and a final dividend following the
AGM in February/March; and
The Board will use, as a guide, when setting the dividends
for a financial year, a sum representing 7 per cent of the
opening NAV of that financial year.
Investment policy
Baronsmead Venture Trust plc’s (“the
Company”) investment policy is to invest
primarily in a diverse portfolio of UK growth
businesses, whether unquoted or traded on
AIM, which are substantially based in the UK,
although many of these investees may have
some trade overseas.
Investments are made selectively across a range of sectors
in companies that have the potential to grow and enhance
their value and which will diversify the portfolio.
The Company will make investments in accordance with
the prevailing VCT legislation which places restrictions,
inter alia, on the type and age of investee companies as well
as the maximum amount of investment that such investee
companies may receive.
Investment securities
The Company invests in a range of securities including,
but not limited to, ordinary and preference shares, loan
stocks, convertible securities, and permitted non qualifying
investments as well as cash. Unquoted investments are
usually structured as a combination of ordinary shares
and loan stocks or preference shares, while AIM-traded
investments are primarily held in ordinary shares. No single
investment may represent more than 15per cent (by VCT
value) of the Company’s total investments.
Liquidity
Pending investment in VCT qualifying investments, the
Company’s cash and liquid funds are held in permitted non-
qualifying investments.
Investment style
Investments are selected in the expectation that the
application of private equity disciplines, including active
management of the investments, will enhance value and
enable profits to be realised on the sale of investments.
Investment policy and objective
2 Annual Report and Audited Financial Statements 2024
About Baronsmead Venture Trust plc
Key elements of the business model
Access to an attractive, diverse portfolio
The Company gives shareholders access to a diverse
portfolio of growth businesses.
The Company will make investments in growth businesses,
whether unquoted or traded on AIM, which are substantially
based in the UK in accordance with the prevailing VCT
legislation. Investments are made selectively across a
range of sectors.
The Manager’s approach to investing
The Manager endeavours to select the best opportunities
and applies a distinctive selection criteria based on:
Primarily investing in parts of the economy which are
experiencing long term structural growth.
Businesses that demonstrate, or have the potential for,
market leadership in their niche.
Management teams that can develop and deliver
profitable and sustainable growth.
Companies with the potential to become an
attractive asset appealing to a range of buyers at the
appropriate time to sell.
In order to ensure a strong pipeline of opportunities, the
Manager invests in building deep sector knowledge and
networks and undertakes significant proactive marketing
to target companies in preferred sectors. This approach
generates a network of potentially suitable businesses
with which the Manager maintains a relationship ahead of
possible investment opportunities.
The Manager as an influential shareholder
The Manager is an engaged and supportive shareholder (on
behalf of the Company) in both unquoted and significant
quoted investments.
For unquoted investments, representatives of the Manager
often join the investee board.
The role of the Manager with investees is to ensure that
strategy is clear, the business plan can be implemented and
the management resources are in place to deliver profitable
growth. The intention is to build on the business model and
grow the company into an attractive target which can be
sold or potentially floated in the medium term.
A more detailed explanation of how the business model is applied
is provided in the Other Matters section of the Strategic Report on
pages 28 to 31.
3Annual Report and Audited Financial Statements 2024
Strategic
report
01
5Annual Report and Audited Financial Statements 2024
01 Strategic report
Financial highlights
421.5p
7.1%
+6.9%
£13.0mn
Net asset value total return
1
(as at 30 September 2024)
Annual tax free dividend yield
1
(12 months to 30 September 2024)
Increase in net asset
value per share
1,2
(12 months to 30 September 2024)
New investments
1,3
(12 months to 30 September 2024)
Net Asset Value (“NAV”) total return to
shareholders for every 100.0p invested at
launch (April 1998).
NAV per share increased 6.9 per cent to 56.6p,
before the deduction of dividends, for the
financial year ended 30 September 2024.
Annual tax free dividend yield based on 3.75p
dividends paid (including proposed final dividend
of 2.0p) and opening NAV of 52.9p
Investments made into seven new and twelve
follow-on opportunities during the year.
1. Alternative Performance Measures (“APM”)/Key Performance Indicators (“KPIs”) – please refer to glossary on page 95 for definitions.
2. Please refer to table on page 7 for breakdown of NAV per share movement.
3. Investments into unquoted and AIM investments only.
Unquoted: £9.1mn
Quoted: £3.9mn
Sep 22
Sep 23
Sep 24
421.5p
395.6p
405.2p
Sep 22
Sep 23
Sep 24*
52.8p
52.9p
NAV per share (p)
Dividends*
*Includes proposed final dividend of 2.0p.
3.75p
58.5p
Sep 22
Sep 23
Sep 24*
7.1%
7.3%
* includes proposed final dividend of 2.0p.
7.3%
Sep 22
Sep 23
Sep 24
£13.0mn
£10.4mn
£21.5mn
6 Annual Report and Audited Financial Statements 2024
01 Strategic report
Performance summary
Ten-year performance record
Net asset value
per share (pence)
Share price (mid)
(pence)
Net asset value total return
per share (pence)*
Pence
Total net assets (£mn)
£mn
0
100
200
300
400
500
600
202420222021202020192018201720162015
0
50
100
150
200
250
2023
194.9
212.2
222.9
164.8
151.1
175.5
159.0
150.6**
85.1
193.8
* Net asset value total return (gross dividends reinvested) rebased to 100p. Source: Gresham House Asset Management Ltd
** Net asset value increase following the merger of Baronsmead VCT plc and Baronsmead VCT2 plc in February 2016.
NAV total return
NAV total return reconciliation 2022 2023 2024
Opening NAV total return (p) 496.2 405.2 395.6
NAV movement (p) (28.6) (9.7) (0.5)
Dividend (p) 8.8 7.4 7.3
Total return (p) (19.8) (2.3) 6.8
Change in NAV total return (p)* (91.0) (9.6) 25.9
Closing NAV total return (p) 405.2 395.6 421.5
* The change in NAV total return is the sum of the monthly total returns calculated on a compound basis.
AIC methodology: The NAV total return to the investor, including the original amount invested (rebased to 100) from launch,
assuming that dividends paid were reinvested at the NAV of the Company at the time the shares were quoted ex-dividend.
I am pleased to report that over the 12 months to
30September 2024 the Net Asset Value per share
increased by 3.65p per share (an increase of 6.9 per
cent), from 52.94p to 56.59p before taking account of
the payment of the interim dividend of 1.75p per share
paid on 9September 2024. This follows several years of
disappointing results and occurred during a fairly mixed and
uncertain economic and political environment.
The increase in the Company’s NAV is attributable to
the positive performances of our AIM and other listed
investments. The value of the Company’s unquoted
portfolio continued to exhibit weakness due to a
combination of both difficult trading conditions and
lengthening of sales cycles. Overall, however, the
Company’s ‘hybrid’ investment strategy of investing in
both AIM-listed and unquoted VCT qualifying companies
has contributed significantly to this year’s investment
performance. Your Board believes this strategy can
provide greater consistency of investment returns over the
medium to long term.
Results
Pence per
ordinary
share
NAV as at 1 October 2023
(after final dividend) 52.94
Valuation increase (6.9 per cent) 3.65
NAV as at 30 September 2024
before dividends 56.59
Less:
Interim dividend paid on 9 September 2024 (1.75)
Proposed final dividend of 2.0p payable, after
shareholder approval, on 17 March 2025 (2.00)
Illustrative NAV as at 30 September 2024
after proposed dividend 52.84
Portfolio Review
At 30 September 2024, the Company’s investment
portfolio was valued at £117.2 million and comprised a
diverse portfolio of 41 investments in unquoted companies
and 44direct investments in AIM-listed companies. The
Company’s investments in three WS Gresham House
Equity Funds were valued at £68.5 million at 30 September.
These investments provide further diversity through
indirect investments in a further 76 companies.
The Company’s portfolio of AIM-listed and other listed
investments increased by 16.5 per cent during the year.
This compared favourably to the FTSE AIM All Share
Index which increased by 2.0 per cent over the same
period. Significant contributors to this performance
were Cerillion, which increased by 47.7 per cent during
the year, and Property Franchise Group, which increased
by 54.5 per cent.
The value of the Company’s unquoted investments
however decreased by 8.6 per cent during the year. This
is clearly very disappointing and stems from continued
difficult trading conditions and lower valuations where the
valuations are based on the valuation of comparable listed
companies and affected by higher discount rates. The
largest detractors from performance were eConsult in the
healthcare sector and RevLifter in the technology sector.
These are covered in more detail in the Manager’s Review
on pages10 to 13.
Fiona Miller Smith
Chair
7Annual Report and Audited Financial Statements 2024
01 Strategic report
Chair’s statement
Principle Risks and Uncertainties
The Company faces a number of risks and uncertainties
including macro-economic and geopolitical uncertainties.
The outlook for the UK economy in particular as well as
factors influencing the global economy including political
uncertainties and armed conflicts can influence UK
government policies, corporate spending and investment
plans and consumer confidence. These factors provide
a significant source of risk for our existing investment
portfolio as well as the number and quality of future
investment opportunities for future. The Company seeks
to mitigate these risks by investing in a diverse portfolio
of VCT qualifying companies which operate in different
sectors and which have different stages of maturity. Further
detail on the Risks and Uncertainties faced by the Company
are set out on pages 22 to 23.
VCT Regulations – Retirement Date
of the UK Government’s Venture
Capital Schemes
During the summer we were pleased to see the European
Commission approve the extension of the VCT scheme
until 5 April 2035. This was formalised by UK legislation
on 3 September 2024. The regulations bring into effect
the extension of the Enterprise Investment Scheme
(EIS) and the Venture Capital Trust (VCT) Scheme sunset
clause to 2035.
The Board welcomes this news and would like to thank the
Manager, the Venture Capital Trust Association (“VCTA”),
the Association of Investment Companies (“AIC”) and
other parties involved for their help in getting the new
legislation enacted. We were particularly pleased with the
commitment to maintaining the Government’s Venture
Capital Schemes on the part of both the previous and
current governing parties.
Autumn Budget 2024
On 30 October 2024, the Chancellor of the Exchequer
presented her Autumn Budget to Parliament. Whilst there
were no direct changes to VCT legislation, there were
certain changes to inheritance and the capital gains tax
regimes. It is possible that there may be increased demand
from investors for other tax efficient forms of investing
such as VCTs. However, the much heralded change to
the inheritance tax treatment of AIM-listed shares had
the potential to severely impact the demand for these
investments from retail investors. The reduction of the relief
from 100 to 50 per cent proved to be somewhat of a relief
to the AIM market as a whole.
Investments and Divestments
Your Board is once again pleased to report that the
Manager continues to see attractive opportunities for
investment. During the year, the Company deployed a total
of £13.0 million in 19 companies in both new and follow-
on investments. Further details of these investments
are included in the Manager’s review on pages 10 to 13.
As we have communicated to shareholders previously,
the requirement to make investments in earlier stage
companies may result in greater volatility of returns over
time. However, the more mature, established portfolio of
existing investments should assist in sustaining returns
and dividends for shareholders as the new portfolio
develops and grows.
Commensurate with a challenging valuation environment,
divestments from the unquoted portfolio were somewhat
muted with only one minor full realisation and a small
amount received in deferred consideration arising from a
previous realisation (proceeds from these sources totalling
approximately £0.1 million).
In contrast, in the AIM portfolio, the Manager has
continued its approach of profitable partial realisations
of Cerillion. Over the course of the Company’s financial
year, this resulted in the receipt of proceeds of £6.7mn at
an aggregate of 21.1x original invested cost. Additionally,
its worth noting that following the takeovers of Gresham
House and Gama Aviation, the Company received
£0.4million for a gross money multiple of 3.9x cost
and £0.4million for a gross money multiple of 0.6x
cost respectively.
Dividends
The Board is pleased to declare a final dividend of 2.0p
per share for the year to 30 September 2024, payable on
17March 2025, subject to shareholder approval. The final
dividend is payable to shareholders on the register as at
14February 2025. An interim dividend of 1.75p per share
was paid in September and means that the total dividends
for the year are 3.75p. Thus, once again, the Board is
pleased to have paid or declared dividends representing
a yield of 7.1 per cent based on the opening NAV of 52.9p,
which is in line with its dividend policy objective.
8
01 Strategic report - Chair’s statement
Annual Report and Audited Financial Statements 2024
Annual General Meeting (“AGM”)
The Company intends to hold the next AGM on 12 March
2025. Shareholders are invited to attend the Shareholder
Event starting at 10.30am. This will include presentations
from myself, members of the Manager’s team, case studies
and presentations from a number of portfolio companies
as well as a Q&A session. This will be followed by lunch. The
formal business of the AGM will start at 1.15pm.
We anticipate that this year’s AGM will provide shareholders
with greater opportunities to engage with the Board and
the Manager and I would encourage as many shareholders
as possible to attend. Please see the inside cover for
more details and how to register to attend. Registration
details will also be included in the Notice of AGM and on
the Baronsmead Venture Trust website. In a slight change
to recent AGM’s which have been ‘live-streamed’ at
considerable cost but with very few people logging in to the
event, the event will be recorded and made available on the
Company’s website for those unable to attend in person.
Outlook
As we look beyond the turn of the year, the geopolitical and
economic uncertainties which have prevailed for the past
few years see no signs of abating. The cautious optimism of
just a few months ago would appear to have been replaced
by the prospects of trade disputes and a subdued UK
economic recovery.
The portfolio remains highly diversified and the hybrid
nature of our investment portfolio helps to mitigate those
uncertainties. Through its team of portfolio managers and
highly experienced portfolio consultants, the Manager is
working with our investee companies to help them focus on
investment fundamentals, conserve cash where necessary
and grow value.
The Board continues to believe it is a good time to be
investing in earlier stage, innovative and high growth
potential businesses. The Manager is actively seeking
to complete new investments, believing that this is an
attractive time to invest in the economic cycle.
We remain confident that the Manager is suitably
positioned to provide the necessary levels of support to
the portfolio companies and remains focussed on retaining,
recovering and helping to grow value in existing and future
investee companies. The Board also believes that the
Company’s ‘hybrid” investment strategy will continue to be
a strength and help deliver greater consistency of returns
through the economic cycle.
Fiona Miller Smith
Chair
23 December 2024
Succession planning
During the year, Susannah Nicklin, the Senior Independent
Director and Chair of the Nomination Committee retired
from the Board. Susannah served as a director of the
Company from February 2018 until June 2024 and I would
like to thank Susannah for her dedication and hard work and
wish her all the best in her future endeavours.
The Board has commenced the process of recruiting an
additional Director to replace Susannah and we expect to
finalise this process in early 2025.
In the meantime, the Board has consisted of 3 Non-
Executive Directors. Following Susannah’s retirement
from the Board, Michael Probin became the Company’s
Senior Independent Director and I became the Chair of the
Nomination Committee.
Shareholder friendly policies
The Company has established various policies aimed at
providing shareholders long term investment returns as
well as financial planning opportunities. These include the
Company’s dividend policy as noted above, the share price
discount management and associated share buy-back
policies as well as regular new fundraisings.
Fundraising
On 1 October 2024 the Company announced its intention
to fundraise new funds in the 2024/25 tax year. It is the
Board’s current intention to launch its offer for subscription
to raise £15 million (before costs) with an additional £10
million over allotment facility during January 2025 in
a joint offer for subscription alongside our sister VCT,
Baronsmead Second Venture Trust plc. The full terms and
conditions as they pertain to these offers will be published
in the prospectus and we will ensure shareholders are
notified accordingly.
Share price discount and buy back policies
The Board intends to continue with the policy of seeking
to maintain a share price discount to NAV of 5 per cent
and to buy back shares at that level from time to time
with the objective of maintaining liquidity in the market
for its existing shares. To that end it will also sell shares
out of Treasury in certain circumstances. The day-to-
day management of these policies is undertaken by the
Manager on behalf of the Board and are subject to the
prevailing market circumstances and on the basis that the
Company has adequate resources to make new and follow-
on investments and pay dividends to shareholders. More
details regarding the number of shares bought in and out
of Treasury during the year can be found in the Director’s
report on page 38.
9
01 Strategic report - Chair’s statement
Annual Report and Audited Financial Statements 2024
Despite high levels of uncertainty and volatility, equity markets delivered modest growth during the year to 30 September
2024. Inflation and interest rates appear to have peaked, but concerns regarding geo-political tensions in Europe and the
Middle East persist. Against this backdrop, it is encouraging that the portfolio, which is well diversified, with exposure to
over 160 quoted and unquoted companies, has delivered an increase in net asset value of 6.9 per cent over the year.
Portfolio review
Overview
The net assets of £212 million were invested as follows:
Asset class
NAV
(£mn)
% of
NAV*
Number of
investees
companies
% return in
the year**
Unquoted 50 23 41 (9)
AIM-traded companies 67 32 44 17
WS Gresham House Equity Funds*** 68 32 76 18
Liquid assets
#
27 13 N/A 4
Totals 212 100 161 7
* By value as at 30 September 2024.
** Return includes interest received on unquoted realisations during the year.
***
Excludes investee companies with holdings by more than one fund.
#
Represents cash, OEICs and net current assets. % return in the period relates only to the cash liquidity funds.
The tables on pages 14 to 16 show the breakdown of new investments and realisations over the course of the year and
below is a commentary on some of the key highlights in both the unquoted and quoted portfolios.
Clive Austin
Managing Director,
VCT Portfolio
Ken Wotton
Managing Director,
Public Equity
Tania Hayes
Chief Operating
Officer,
Strategic Equity
Trevor Hope
Managing Director
& Chief Investment
Officer, VCTs
Ed Wass
Director
of VCT Portfolio
10 Annual Report and Audited Financial Statements 2024
01 Strategic report
Manager’s review
Two new AIM quoted investments were made
during the year:
IntelliAM is a provider of a machine learning platform
enabling manufacturing organisations to leverage their
data and maximise the value and efficiency of their assets
Earnz is a consolidator in the blue collar energy
services sector created by an experienced Executive
Chairman which the Manager has successfully backed in
previous ventures
The Company made additional investments totalling
£4.6million into twelve existing portfolio companies, 3
quoted and 9 unquoted, across the year. This is consistent
with the investment strategy of continuing to back our high
potential assets with further capital to support future growth.
We anticipate the level of follow-on investment will continue
to grow as the earlier stage portfolio continues to mature.
Quoted portfolio
(AIM-traded investments)
Performance
The quoted portfolio delivered positive absolute
performance of 16.5 per cent during the year, despite the
ongoing elevated levels of geopolitical and macroeconomic
uncertainty in the markets. For reference, the AIM market
in the UK increased 2.0 per cent over the same period.
The AIM portfolio remains in good financial health and
is exposed to structural growth areas providing some
insulation from the uncertain economic conditions.
Investment activity –
unquoted and quoted
The Company’s investment strategy is primarily focused
on companies operating in parts of the economy that we
believe are benefiting from long-term structural growth
trends and in sectors where we have deep expertise and
network. The amount of capital invested in each business is
matched to the scale, maturity and underlying risk profile of
the company seeking investment.
During the year, £13.0 million was invested into 19 companies
including 7 new additions to the portfolio and 12 follow-
on investments.
Five new unquoted investments were completed
during the year.
Ozone API is a software developer providing banks and
financial institutions with low-cost, compliant APIs
CitySwift is a software business that works with bus
operators to analyse data from their networks
Azarc.io specialises in business process automation,
notably automating custom declaration forms
SciLeads is a data-intelligence platform that enables
companies operating within Life Science verticals to
identify, track and convert potential customers
OnSecurity Technology is a B2B cybersecurity services
business which has built a technology platform to
automate the scoping, scheduling, and reporting of
human-based penetration tests
Investment diversification at 30 September 2024 by value
Sector* Total assets Length of time investments held*
Healthcare & education
Business services
Consumer markets
Technology
63%
7%
21%
9%
AIM
Unquoted
Cash liquidity funds
WS Gresham House Equity Funds
32%
32%
24%
12%
Between 3 and 5 years
Between 1 and 3 years
Less than 1 year
Greater than 5 years
56%
13%
7%
24%
* Direct investments only, not held by the WS Gresham House Equity Funds.
11
01 Strategic report - Manager’s review
Annual Report and Audited Financial Statements 2024
The software sector provided the largest positive
contributor to performance with Cerillion, a provider of
billing and charging software to the telecoms industry,
continuing to deliver strong revenue and profit growth.
Property Franchise Group, a franchised estate agency
business focussed primarily on lettings, also performed
positively during the year following its takeover of
Belvoir Lettings.
The largest detractors from performance were Crossword
Cybersecurity, a cyber consultancy and software
provider, which was subscale and exhibited a challenging
cash runway; and Inspired, an energy procurement and
optimisation consultancy, which announced the potential
for certain large customer projects to be delayed impacting
current year revenue and profits.
We continue to closely monitor our AIM portfolio with a
rolling programme of independent reviews of top AIM
holdings and broadly continue to be positive on the
long-term investment prospects of these companies.
Many of the larger quoted investments have been long-
term holdings. These companies are typically profitable,
cash generative businesses with low levels of financial
gearing and continue to have attractive long-term
growth prospects.
Divestments
There were two full realisations during the year, both
corporate actions, in Gresham House and Gama Aviation
whose proceeds of £0.4 million each represented gross
multiples of 3.9x and 0.6x cost respectively. Our investment
in DeepVerge, an environmental and life sciences group,
was written off during the year although the NAV impact
of this was limited during the year as the value of this
investment had largely decreased in previous years.
The opportunity to crystallise further profits was taken
for Cerillion; over the course of the year proceeds of
£6.7million were realised at a 21.1x cost multiple.
In addition to this, liquidation proceeds of £0.1 million
were received for InterQuest, which was written off in
September 2023.
Unquoted portfolio
Performance
The unquoted portfolio decreased in value by 8.6 per
cent during the year. The macroeconomic environment
remained challenging for our portfolio companies with
many experiencing difficult trading conditions and
lengthening of product and services sales cycles, most
notably consumer related businesses.
This was a disappointing performance which reflects
the immaturity of the unquoted portfolio. Earlier stage
investment delivered lower levels of growth than had been
forecast resulting in shortened cash runways. With this
increased risk profile it is appropriate to have reduced the
holding value of a number of the companies within our
portfolio. Gresham House’s experienced Non-Executive
Directors and consultants continue to support the
portfolio companies during these turbulent times with the
expectation that a number of these companies will recover
value as they trade out of difficult conditions and / or raise
further capital.
Panthera Biopartners and Ozone API were the two
investments that made the biggest positive contribution
in the year. Panthera, a provider of recruitment services
for clinical trials, delivered impressive sales growth and
profitability during the year as a result of new contract
wins. Ozone API, a software developer providing banks and
financial institutions with low-cost, compliant APIs, was
a new investment in the year. The company grew in line
with expectations and the valuation benefitted from the
preference structure of the investment.
The largest detractors from performance were in the
healthcare and technology sectors. eConsult, an online
consultation provider used by GP practices and hospitals,
experienced increased competition during the year and
an ongoing challenge of funding for its hospital product,
leading to a much reduced cash runway. This led to
the decision to seek a new owner for the business and
eConsult was acquired by Huma Therapeutics Ltd in a
share for share transaction in September 2024. Huma is a
well funded digital healthcare business which specialises
in continuous patient monitoring. RevLifter, an AI platform
using advanced behavioural analytics to deliver tailored
promotions to users, suffered from its largest customer, a
large US retailer, more than halving its spending.
As Manager we remain highly engaged with the management
teams within the portfolio, sharing insight and best practice
to help them both manage risk and spot opportunities in a
quickly changing environment. We have continued to invest
in our portfolio and in-house talent teams, which alongside
our extensive network of earlier stage, high growth company
experts, ensure we are well positioned to help the companies
we invest in to navigate the challenges they face whilst also
continuing to develop and scale.
Divestments
There was one full realisation in the unquoted portfolio
during the year with proceeds of £0.04 million received
from the realisation of FundingXchange, for a gross multiple
of 0.1x cost. In addition to this, earn out proceeds were
received on Evotix of £0.1 million with a gross money
multiple of 0.8x cost. Our investment in Armstrong Craven,
a provider of executive search and business intelligence
services, was written off during the year although the value
of this investment had largely decreased in previous years.
12
01 Strategic report - Manager’s review
Annual Report and Audited Financial Statements 2024
Collective investment vehicles
The Company’s investments in the WS Gresham House
UK Micro Cap Fund (“Micro Cap”), WS Gresham House
UK Multi Cap Income Fund (“Multi Cap”) and WS Gresham
House UK Smaller Companies Fund (“Small Cap”) remain a
core component of the Company’s portfolio construction.
These investments provide shareholders with additional
diversification through exposure to an additional 76 underlying
companies, as well as access to the potential returns available
from a larger and more established group of companies that
fall within the Manager’s core area of expertise.
Over the year, Small Cap and Micro Cap delivered returns of
28.1 per cent and 9.8 per cent respectively, compared to the
IA UK Smaller Companies sector which returned 16.1 per cent.
Multi Cap delivered a return of 22.9 per cent, compared to the
IA UK Equity Income sector which returned 15.0 per cent.
Micro Cap and Multi Cap continue to be both highly rated
by independent ratings agencies. Micro Cap’s cumulative
performance is currently second quartile within the IA UK
Smaller Companies sector over the past 10 years. Multi Cap’s
cumulative performance has remained the top quartile within
the IA UK Equity Income sector since launch in June 2017
and is the best performer over five years. Small Cap has also
achieved top quartile cumulative performance since launch in
2019 and is the third best performing fund over the past five
years within the IA UK Smaller Companies sector.
Liquid assets (cash and near cash)
The Company held cash and liquidity OEICs of
approximately £27.3 million at the year-end. This asset
class is conservatively managed to take minimal or no
capital risk. The average 7 day yield on the liquidity OEICs
was 4.9per cent at the end of the year.
Third party independent valuations
During the year, the Company engaged the services of Lincoln
International and Kroll to conduct independent third party
valuations as a means of managing the Board’s risk in respect
of a systematic error regarding the valuation of one or more
of the material VCT portfolio assets. The responsibility for the
preparation of draft valuations lies with the Manager, and this
does not constitute outsourcing of any part of the valuation
process, and the Board is responsible for the approval of
valuations. The Manager uses these independent valuations in
conjunction with their own valuations to provide independent
assurance and risk mitigation to the Board and the Board
continues to support this. Four unquoted investment were
selected, focussing on the higher valued assets in the portfolio,
which also covered different characteristics such as value based
on both revenue and EBITDA multiples and those with a range
of both equity and loan instruments. In July 2024, the Board
assessed the use of the third party valuations and concluded
that the process had provided comfort on the Manager’s
controls and the quality of the Manager’s processes compared
to the market. Furthermore, the Board agreed to reassess the
use of third party independent valuations on a regular basis.
Outlook
Geo-political flux is likely to persist throughout 2025,
although the UK and US election results will hopefully
allow more clarity on the future economic and political
landscape. That being said, the impact of the UK
Government’s first budget has caused an element of short
term market turbulence, potential inflationary pressures
and pausing of interest rate reductions.
This environment should present attractive opportunities
with the advantage of being able to take a longer-term view
of both new and portfolio follow-on investments. The early
stage cohort of investments are taking on the challenges
presented and are expected to accelerate their funding
plans, however this should also produce some compelling
follow-on investment opportunities.
Gresham House’s seasoned investment managers are
a vital source of knowledge and experience available to
support the Company’s portfolio of management teams.
In this respect, Gresham House is well placed by having
one of the largest and most experienced portfolio teams
in the industry.
Looking into 2025, the Manager remains cautiously
optimistic that the combination of a somewhat improving
economic backdrop, greater political stability and a more
attractive valuation environment will produce attractive
investment opportunities when viewed with a long-
term perspective.
Gresham House Asset Management Ltd
Manager
23 December 2024
13
01 Strategic report - Manager’s review
Annual Report and Audited Financial Statements 2024
Company Location Sector Activity
Book
cost
£’000
Unquoted investments
New
Ozone Financial Technology Ltd London Technology Open banking infrastructure provider 1,867
OnSecurity Technology Ltd Bristol Technology A B2B cybersecurity services
business which has built a
technology platform to automate
the scoping, scheduling, and
reporting of human-based
penetration tests
1,210
Huddl Mobility Ltd (trading as
CitySwift)
Ireland Technology SaaS product for bus opreators
and local authorities to aggregate,
cleanse and access insight from data
from across their bus networks
949
SciLeads Ltd London Technology A data-intelligence platform that
enables companies operating within
Life Science verticals to identify, track
and convert potential customers
942
Azarc.Io inc London Technology Automating customs declarations 659
Follow-on
Patchworks Integration Ltd London Technology Leading integration platform for
fast-growing retail and ecommerce
businesses
840
Airfinity Ltd London Healthcare & education Provides real time life science
intelligence as a subscription service
600
Metrion BiosciencesLtd Cambridgeshire Healthcare & education Ion channel drug discovery and
safety assessment service provider
486
Counting Ltd London Business services Banking and accounting software for
small businesses
470
Orri Ltd London Healthcare & education Provider of intensive day care
treatments for eating disorders
340
Focal Point Positioning Ltd Cambridgeshire Technology A research and development
focused technology business
focusing on global navigation and
satellitesystems
226
Yappy Ltd Manchester Consumer markets Supplier of customisable pet products 222
Rockfish Group Ltd Devon Consumer markets Seafood restaurant chain 175
Dayrize B.V. Amsterdam Technology A rapid product-level sustainability
impact assessment software tool for
retailers and Consumer Packaged
Goods ("CPG") companies
160
Total unquoted investments 9,146
14
Annual Report and Audited Financial Statements 2024
01 Strategic report
Investments in the year
Company Location Sector Activity
Book
cost
£’000
AIM-traded investments
New
IntelliAM AI plc South Yorkshire Technology Provider of a machine learning
platform enabling manufacturing
organisations to leverage their
data and maximise the value and
efficiency of their assets.
2,118
Earnz plc Gloucestershire Business services Specialist energy and heat
decarbonisation platform
702
Follow-on
Eden Research plc Oxfordshire Business services Developer of biological fungicides
and bio equivalents
732
PCI-PAL plc London Technology Secure payment service provider 196
Oberon Investments Group plc London Business services Wealth advisory service for
individuals and businesses
105
Total AIM-traded investments 3,853
Total investments in the year
#
12,999
#
includes unquoted and AIM investments only.
01 Strategic report - Investments in the year
15Annual Report and Audited Financial Statements 2024
Realisations in the year
Company
First
investment
date
Original
book cost
#
£’000
Proceeds
‡
£’000
Overall
multiple
return (x)
IRR
(%)
Unquoted realisations
Funding Xchange Ltd Full trade sale Nov 19 705 44 0.1 –
Armstrong Craven Ltd Written off Jun 13 543 – 1.1* 1.6
Total unquoted realisations 1,248 44
AIM-traded realisations
Cerillion plc Market sale Nov 15 317 6,685 21.1 43.4
Gama Aviation plc Tender offer Nov 10 776 440 0.6 –
Gresham House plc Takeover Nov 14 112 433 3.9 15.9
Deepverge plc Written off Jun 21 1,410 – – –
Total AIM-traded realisations 2,615 7,558
Total realisations in the year** 3,863 7,602
During the year, liquidation proceeds of £114k were received from InterQuest Group plc, which was written off in September 2023; earn out
proceeds of £62k were received from Evotix Ltd, which was realised in May 2023; and liquidation proceeds of £4k were received from Crawshaw
Group plc, which was written off in October 2018.
#
Residual book cost at realisation date.
‡
Proceeds at time of realisation including interest.
* Includes interest/dividends received, loan note redemptions and partial realisations accounted for in prior periods.
** Includes unquoted and AIM investments only.
16 Annual Report and Audited Financial Statements 2024
01 Strategic report
Ten largest investments
The top ten investments by value at 30 September 2024 illustrate the diversity of investee companies within the portfolio.
For consistency across the top ten and based on guidance from the AIC, data extracted from the last set of published
audited accounts is shown in the tables below. However, this may not always be representative of underlying financial
performance for several reasons. Published accounts lodged at Companies House may be out of date and the Manager
works from up-to-date monthly management accounts and has access to draft but unpublished annual audited accounts.
In addition, pre-tax profit in statutory accounts is often not a representative indicator of underlying profitability as it can be
impacted by, for example, deductions of non-cash items, such as amortisation, that relate to investment structures rather
than operating performance.
1
Cerillion plc
London
Quoted
www.cerillion.com
Cerillion provides billing, charging and CRM software
solutions, predominantly to the telecommunications
sector but also to other sectors, including finance
and utilities. Cerillion has c.80 customer installations
worldwide, delivering a broad range of cloud
solutions, managed services and on-premise
enterprise software.
All funds managed by Gresham House
First investment: July 2015
Total original cost: £1,958,000
Total equity held: 8.7%
Baronsmead Venture Trust only
Original cost: £881,000
Valuation: £20,639,000
Valuation basis: Bid price
Income recognised in the year: £176,000
% of equity held: 3.9%
Voting rights: 3.9%
Year ended 30September
2024
£million
2023
£ million
Sales: 43.8 39.2
Pre-tax profits: 19.7 16.1
Net assets: 48.5 36.9
No. of employees: 354 324
Source: Cerillion plc, Annual Report and Financial Statements,
30 September 2024
2
Netcall plc
Bedfordshire
Quoted
www.netcall.com
Netcall is a provider of intelligent automation and
customer engagement software, helping organisations
to become more customer-centric. Solutions are
focused on enabling customer contact across multiple
channels and improving customer satisfaction whilst
driving operational efficiency through increases process
automation. Netcall has over 700 customers, spanning
enterprise, healthcare and government sectors.
All funds managed by Gresham House
First investment: July 2010
Total original cost: £4,354,000*
Total equity held: 24.4%
Baronsmead Venture Trust only
Original cost: £1,738,000
Valuation: £8,616,000
Valuation basis: Bid price
Income recognised in the year: £82,000
% of equity held: 6.0%
Voting rights: 6.0%
Year ended 30June
2024
£million
2023
£ million
Sales: 39.1 36.0
Pre-tax profits: 6.3 4.0
Net assets: 40.5 35.4
No. of employees: 283 270
Source: Netcall plc, Annual Report and Accounts, 30 June 2024
*Includes Baronsmead VCTs only
17Annual Report and Audited Financial Statements 2024
01 Strategic report
3
Patchworks Integration Ltd
London
Unquoted
www.wearepatchworks.com
Patchworks provides the software to integrate
an ecommerce customer’s front and back office
operational systems, managing the flow of data
across their entire business and providing data and
analytics to power decision-making.
All funds managed by Gresham House
First investment: July 2021
Total original cost: £10,550,000
Total equity held: 25.0%
Baronsmead Venture Trust only
Original cost: £5,063,000
Valuation: £6,233,000
Valuation basis: Revenue multiple
Income recognised in the year: £174,000
% of equity held: 10.6%
Voting rights: 10.6%
Year ended 30June
2023
£million
2022
£million
Net Assets: 2.6 2.7
No. of Employees: 4 4
A full set of accounts is not publicly available.
Source: Patchworks Integration Ltd, Unaudited Financial
Statements, 30 June 2023
4
The Property Franchise Group plc
Dorset
Quoted
www.thepropertyfranchisegroup.co.uk
Property Franchise Group (“TPFG”) is the UK’s largest
multi-brand lettings and estate agency franchising
group, which has completed two transformational
acquisitions in 2024 augmented by strong organic
growth. With c.1,900 outlets across the UK, TPFG
manages over 150,000 tenanted properties across its
18 brand portfolio. TPFG’s franchise model generates
multiple income streams, with the majority of earnings
being driven by lettings revenue, with additional fees
generated from financial and other service revenues
All funds managed by Gresham House
First investment: December 2013
Total original cost: £3,196,000*
Total equity held: 18.2%
Baronsmead Venture Trust only
Original cost: £1,438,000
Valuation: £4,925,000
Valuation basis: Bid price
Income recognised in the year: £133,000
% of equity held: 1.9%
Voting rights: 1.9%
Year Ended 31 December
2023
£million
2022
£million
Sales: 27.3 27. 2
Pre-tax profits: 9.0 8.8
Net Assets: 57.7 57. 8
No. of Employees: 176 185
Source: The Property Franchise Group plc, Annual Report and
Accounts, 31 December 2023
*Includes Baronsmead VCTs only
18 Annual Report and Audited Financial Statements 2024
01 Strategic report - Ten largest investments
5
Airfinity Ltd
London
Unquoted
www.airfinity.com
Airfinity is a science information data analytics
platform which provides deep information by
therapeutic area on a real time basis to the life
sciences industry and public entities including
governments, NGOs and healthcare authorities. It
grew rapidly during the pandemic on the back of its
COVID-19 health analytics and intelligence platform.
All funds managed by Gresham House
First investment: July 2021
Total original cost: £8,155,000
Total equity held: 20.1%
Baronsmead Venture Trust only
Original cost: £3,911,000
Valuation: £4,894,000
Valuation basis: Revenue multiple
Income recognised in the year: £69,000
% of equity held: 8.6%
Voting rights: 8.6%
Year ended 31 December
2022
£million
2021
£million
Sales: 5.4 2.4
Pre-tax profits: (3.5) (1.9)
Net Assets: 2.6 3.2
No. of employees 83 57
Source: Airfinity Ltd, Annual Report & Financial Statements,
31 December 2022
6
IDOX plc
Surrey
Quoted
www.idoxgroup.com
IDOX provides legislative compliance and document
process management software, in a variety of cloud
and on-premise applications, for local governments
and the NHS. Additionally, IDOX delivers document
collaboration software for the oil & gas, energy, and
infrastructure sectors, enabling accurate record
keeping for project management. IDOX’s solutions
seek to deliver process automation to support
enhanced citizen and customer experience, improved
operational efficiency and reduced overheads.
All funds managed by Gresham House
First investment: May 2002
Total original cost: £1,642,000*
Total equity held: 6.5%
Baronsmead Venture Trust only
Original cost: £614,000
Valuation: £3,881,000
Valuation basis: Traded price
Income recognised in the year: £38,000
% of equity held: 1.4%
Voting rights: 1.4%
Year ended 31 October
2023
£million
2022
£million
Sales: 73.3 66.2
Pre-tax profits: 7.8 6.6
Net Assets: 73.3 67.4
No. of Employees: 626 578
Source: Idox plc, Annual Report & Accounts, 31 October 2023
*Includes Baronsmead VCTs only
19Annual Report and Audited Financial Statements 2024
01 Strategic report - Ten largest investments
7
Panthera Biopartners Ltd
Lancashire
Unquoted
www.panthera-bio.com
Panthera is an independent site management
organisation providing patient recruitment services to
clinical research organisations, pharma and biotech
companies. The primary focus is phase 2 and 3 clinical
trials for new drugs across multiple therapeutic areas.
Panthera supports all aspects of new clinical trials
including feasibility assessments, site set up, patient
recruitment and engagement and day to day running
of clinical trials in line with strict regulatory criteria.
All funds managed by Gresham House
First investment: September 2020
Total original cost: £6,424,000
Total equity held: 26.7%
Baronsmead Venture Trust only
Original cost: £3,081,000
Valuation: £3,699,000
Valuation basis: Revenue multiple
Income recognised in the year: Nil
% of equity held: 11.3%
Voting rights: 11.3%
Year Ended 31 December
2023
£million
2022
£million
Sales: 11.3 4.9
Pre-tax profits: 0.9 (5.6)
Net Assets: 5.7 1.4
No. of Employees: 108 104
Source: Panthera Biopartners Ltd, Annual Report & Financial
Statements, 31 December 2023
8
Bioventix plc
Surrey
Quoted
www.bioventix.com
Bioventix manufactures and supplies high
affinity sheep monoclonal antibodies for use in
immunodiagnostics. Focusing on clinical diagnostics,
the company’s strategy is to identify new assays for
which there is a need for improved antibodies.
All funds managed by Gresham House
First investment: June 2013
Total original cost: £562,000*
Total equity held: 11.1%
Baronsmead Venture Trust only
Original cost: £253,000
Valuation: £3,662,000
Valuation basis: Bid price
Income recognised in the year: £152,000
% of equity held: 1.8%
Voting rights: 1.8%
Year ended 30 June
2024
£million
2023
£million
Sales: 13.6 12. 8
Pre-tax profits: 10.6 10.1
Net Assets: 12.0 12.1
No. of Employees: 17 16
Source: Bioventix plc, Annual Report & Financial
Statements, 30 June 2024
*Includes Baronsmead VCTs only
20 Annual Report and Audited Financial Statements 2024
01 Strategic report - Ten largest investments
10
Clarilis Ltd
Warwickshire
Unquoted
www.clarilis.com
Clarilis is a legal document automation software
and services provider, enabling both legal firms
and in-house legal teams to automate legal
contract production.
All funds managed by Gresham House
First investment: July 2020
Total original cost: £3,500,000
Total equity held: 16.7%
Baronsmead Venture Trust only
Original cost: £1,679,000
Valuation: £2,514,000
Valuation basis: Revenue multiple
Income recognised in the year: Nil
% of equity held: 7.0%
Voting rights: 6.6%
Year ended 31 December
2023
£million
2022
£million
Net Assets: 0.9 1.7
No. of Employees: 57 57
A full set of accounts is not publicly available.
A full set of accounts is not publicly available.
Source: Clarilis Ltd, Unaudited Financial Statements,
31 December 2023
9
Popsa Holdings Ltd
Surrey
Unquoted
www.popsa.com
Popsa is a photobook app that uses proprietary machine
learning algorithms to reduce the average time it takes
for customers to produce photobooks from two hours to
just five minutes. Popsa aims to disrupt an industry that
has not innovated with consumer habits, in particular the
shift to mobile as the key photo repository.
All funds managed by Gresham House
First investment: December 2021
Total original cost: £6,500,000
Total equity held: 8 .1%
Baronsmead Venture Trust only
Original cost: £3,120,000
Valuation: £3,120,000
Valuation basis: Revenue multiple
Income recognised in the year: Nil
% of equity held: 3.4%
Voting rights: 3.4%
Year Ended 31 December
2023
£million
2022
£million
Sales: 27.5 26.7
Pre-tax profits: (0.8) (2.1)
Net Assets: 11. 2 11.3
No. of Employees: 58 58
Source: Popsa Holdings Ltd, Group Strategic Report, Report
of the Directors and Consolidated Financial Statements,
31 December 2023
21Annual Report and Audited Financial Statements 2024
01 Strategic report - Ten largest investments
Principal risks and uncertainties
The Board has carried out a robust assessment of the principal and emerging risks and uncertainties facing the Company
and has assessed the appropriate measures to be taken in order to mitigate these risks as far as practicable. There is an
ongoing process for identifying, evaluating and managing these risks which is part of the governance framework detailed
further in the Corporate Governance section of this report.
Principal risk Context Specific risks we face Possible impact Mitigation
Loss of approval
asa Venture
CapitalTrust
The Company must comply with section 274 of the
Income Tax Act 2007 which enables its investors to
take advantage of tax relief on their investment and on
futurereturns.
Breach of any of the rules enabling the
Company to hold VCT status could result in the
loss of thatstatus.
The loss of VCT status would result in
shareholders who have not held their shares for
the designated holding period having to repay
the income tax relief they had already obtained
and future dividends and gains would be subject
to income tax and capital gains tax
The Board maintains a safety margin on all VCT tests to ensure that
breaches are unlikely to be caused by unforeseen events or shocks. The
Manager monitors all of the VCT tests on an ongoing basis and the Board
reviews the status of these tests on a quarterly basis. Specialist advisors
review the tests on a bi-annual basis and report to the Audit Committee on
their findings.
Legislative VCTs were established in 1995 to encourage private
individuals to invest in early stage companies that
are considered to be risky and therefore have limited
funding options. In return the state provides these
investors with tax reliefs which fall under the definition
of state aid.
A change in government policy regarding the
funding of small companies or changes made
to VCT regulations to comply with EU State
Aid rules could result in a cessation of the tax
reliefs for VCT investors or changes to the
reliefs that would make them less attractive to
investors.
The Company might not be able to maintain its
asset base leading to its gradual decline and
potentially an inability to maintain either its buy
back or dividend policies.
The Board and the Manager engage on a regular basis with HMT and
industry representative bodies to demonstrate the cost benefit of VCTs to
the economy in terms of employment generation and taxation revenue. In
addition, the Board and the Manager have considered the options available
to the Company in the event of the loss of tax reliefs to ensure that it can
continue to provide a strong investment proposition for its shareholders
despite the loss of tax reliefs.
Investment
performance
The Company invests in small, mainly UK based
companies, both unquoted and quoted. Smaller
companies often have limited product lines, markets
or financial resources and may be dependent for their
management on a smaller number of key individuals and
hence tend to be riskier than largerbusinesses.
Investment in poor quality companies with
the resultant risk of a high level of failure in
theportfolio.
Reduction in both the capital value of investors’
shareholdings and in the level of income
distributed.
The Company has a diverse portfolio where the cost of any one investment
is typically less than 5per cent of NAV thereby limiting the impact of any one
failed investment. The Manager has a strong and consistent track record
over a long period.
The Manager undertakes extensive due diligence on each new investment
and reviews the portfolio composition maintaining a wide spread of holdings
in terms of financing stage and industry sector. Investments are actively
managed with a view to delivering value and growth.
Economic,
political and
other external
factors
Whilst the Company invests in predominantly UK
businesses, the UK economy relies heavily on Europe
and the US as its largest trading partners. This, together
with the increase in globalisation, means that economic
unrest and shocks in other jurisdictions, as well as
in the UK, can impact on UK companies, particularly
smaller ones that are more vulnerable to changes in
tradingconditions.
Events such as fiscal policy changes, economic
recession, trade disputes, movement in interest
or currency rates, civil unrest, war or political
uncertainty or pandemics can adversely
affect the trading environment for underlying
investments and impact on their results and
valuations.
Reduction in the value of the Company’s assets
with a corresponding impact on its share price
may result in the loss of investors through buy
backs and may limit its ability to pay dividends.
The Company invests in a diversified portfolio of companies across a
number of industry sectors, providing protection against shocks. In addition,
the Manager uses a limited amount of bank gearing in its investments which
enables its investments to continue trading through difficult economic
conditions. The Board monitors and reviews the position of the Company,
ensuring that adequate cash balances exist to allow flexibility. The Board
reviews the make up and progress of the portfolio each quarter to ensure
that it remains appropriately diversified and funded.
Regulatory and
compliance
The Company is authorised as a self managed
Alternative Investment Fund Manager (“AIFM”) under
the Alternative Investment Fund Managers Directive
(“AIFMD”) and is also subject to the Prospectus and
Transparency Directives. It is required to comply with
the Companies Act 2006 and the UKLA Listing Rules.
Failure of the Company to comply with any of
its regulatory or legal obligations could result in
the suspension of its listing by the UKLA and/or
financial penalties and sanction by the regulator
or a qualified audit report.
The Company’s performance could be
impacted severely by financial penalties and
a loss of reputation resulting in the alienation
of shareholders, a significant demand to buy
back shares and an inability to attract future
investment. The suspension of its shares
would result in the loss of its VCT taxation
status and most likely the ultimate liquidation of
theCompany.
The Board and the Manager employ the services of leading regulatory
lawyers, sponsors, auditors and other advisers to ensure the Company
complies with all of its regulatory obligations. The Board has strong systems
in place to ensure that the Company complies with all of its regulatory
responsibilities. The Manager has a strong compliance culture and employs
dedicated compliance specialists within its team who support the Board in
ensuring that the Company is compliant.
Operational The Company relies on a number of third parties, in
particular the Manager, to provide it with the necessary
services such as registrar, sponsor, custodian, receiving
agent, lawyers and tax advisers.
The risk of failure of the systems and controls
of any of the Company’s advisers including a
cyber attack leading to an inability to service
shareholder needs adequately, to provide
accurate reporting and accounting and to
ensure adherence to all VCT legislation rules.
Errors in shareholders’ records or
shareholdings, incorrect marketing literature,
non compliance with listing rules, loss of assets,
breach of legal duties and inability to provide
accurate reporting and accounting all leading to
reputational risk and the potential for litigation. A
cyber attack or data breach could lead to loss of
sensitive shareholder data resulting in a breach
and liability under GDPR.
The Board has appointed an Audit Committee who reviews the internal
control (“ISAE3402”) and/or internal audit reports from all significant third
party service providers, including the Manager, on a bi-annual basis to
ensure that they have strong systems and controls in place including
Business Continuity Plans and matters relating to cyber security. The Board
regularly reviews the performance of its service providers to ensure that
they continue to have the necessary expertise and resources to provide
a high class service and always where there has been any changes in key
personnel or ownership.
The financial risks faced by the Company are covered within the Notes to the Financial Statements on pages83 to 87.
01 Strategic report
22 Annual Report and Audited Financial Statements 2024
The Board has carried out a robust assessment of the principal and emerging risks and uncertainties facing the Company
and has assessed the appropriate measures to be taken in order to mitigate these risks as far as practicable. There is an
ongoing process for identifying, evaluating and managing these risks which is part of the governance framework detailed
further in the Corporate Governance section of this report.
Principal risk Context Specific risks we face Possible impact Mitigation
Loss of approval
asa Venture
CapitalTrust
The Company must comply with section 274 of the
Income Tax Act 2007 which enables its investors to
take advantage of tax relief on their investment and on
futurereturns.
Breach of any of the rules enabling the
Company to hold VCT status could result in the
loss of thatstatus.
The loss of VCT status would result in
shareholders who have not held their shares for
the designated holding period having to repay
the income tax relief they had already obtained
and future dividends and gains would be subject
to income tax and capital gains tax
The Board maintains a safety margin on all VCT tests to ensure that
breaches are unlikely to be caused by unforeseen events or shocks. The
Manager monitors all of the VCT tests on an ongoing basis and the Board
reviews the status of these tests on a quarterly basis. Specialist advisors
review the tests on a bi-annual basis and report to the Audit Committee on
their findings.
Legislative VCTs were established in 1995 to encourage private
individuals to invest in early stage companies that
are considered to be risky and therefore have limited
funding options. In return the state provides these
investors with tax reliefs which fall under the definition
of state aid.
A change in government policy regarding the
funding of small companies or changes made
to VCT regulations to comply with EU State
Aid rules could result in a cessation of the tax
reliefs for VCT investors or changes to the
reliefs that would make them less attractive to
investors.
The Company might not be able to maintain its
asset base leading to its gradual decline and
potentially an inability to maintain either its buy
back or dividend policies.
The Board and the Manager engage on a regular basis with HMT and
industry representative bodies to demonstrate the cost benefit of VCTs to
the economy in terms of employment generation and taxation revenue. In
addition, the Board and the Manager have considered the options available
to the Company in the event of the loss of tax reliefs to ensure that it can
continue to provide a strong investment proposition for its shareholders
despite the loss of tax reliefs.
Investment
performance
The Company invests in small, mainly UK based
companies, both unquoted and quoted. Smaller
companies often have limited product lines, markets
or financial resources and may be dependent for their
management on a smaller number of key individuals and
hence tend to be riskier than largerbusinesses.
Investment in poor quality companies with
the resultant risk of a high level of failure in
theportfolio.
Reduction in both the capital value of investors’
shareholdings and in the level of income
distributed.
The Company has a diverse portfolio where the cost of any one investment
is typically less than 5per cent of NAV thereby limiting the impact of any one
failed investment. The Manager has a strong and consistent track record
over a long period.
The Manager undertakes extensive due diligence on each new investment
and reviews the portfolio composition maintaining a wide spread of holdings
in terms of financing stage and industry sector. Investments are actively
managed with a view to delivering value and growth.
Economic,
political and
other external
factors
Whilst the Company invests in predominantly UK
businesses, the UK economy relies heavily on Europe
and the US as its largest trading partners. This, together
with the increase in globalisation, means that economic
unrest and shocks in other jurisdictions, as well as
in the UK, can impact on UK companies, particularly
smaller ones that are more vulnerable to changes in
tradingconditions.
Events such as fiscal policy changes, economic
recession, trade disputes, movement in interest
or currency rates, civil unrest, war or political
uncertainty or pandemics can adversely
affect the trading environment for underlying
investments and impact on their results and
valuations.
Reduction in the value of the Company’s assets
with a corresponding impact on its share price
may result in the loss of investors through buy
backs and may limit its ability to pay dividends.
The Company invests in a diversified portfolio of companies across a
number of industry sectors, providing protection against shocks. In addition,
the Manager uses a limited amount of bank gearing in its investments which
enables its investments to continue trading through difficult economic
conditions. The Board monitors and reviews the position of the Company,
ensuring that adequate cash balances exist to allow flexibility. The Board
reviews the make up and progress of the portfolio each quarter to ensure
that it remains appropriately diversified and funded.
Regulatory and
compliance
The Company is authorised as a self managed
Alternative Investment Fund Manager (“AIFM”) under
the Alternative Investment Fund Managers Directive
(“AIFMD”) and is also subject to the Prospectus and
Transparency Directives. It is required to comply with
the Companies Act 2006 and the UKLA Listing Rules.
Failure of the Company to comply with any of
its regulatory or legal obligations could result in
the suspension of its listing by the UKLA and/or
financial penalties and sanction by the regulator
or a qualified audit report.
The Company’s performance could be
impacted severely by financial penalties and
a loss of reputation resulting in the alienation
of shareholders, a significant demand to buy
back shares and an inability to attract future
investment. The suspension of its shares
would result in the loss of its VCT taxation
status and most likely the ultimate liquidation of
theCompany.
The Board and the Manager employ the services of leading regulatory
lawyers, sponsors, auditors and other advisers to ensure the Company
complies with all of its regulatory obligations. The Board has strong systems
in place to ensure that the Company complies with all of its regulatory
responsibilities. The Manager has a strong compliance culture and employs
dedicated compliance specialists within its team who support the Board in
ensuring that the Company is compliant.
Operational The Company relies on a number of third parties, in
particular the Manager, to provide it with the necessary
services such as registrar, sponsor, custodian, receiving
agent, lawyers and tax advisers.
The risk of failure of the systems and controls
of any of the Company’s advisers including a
cyber attack leading to an inability to service
shareholder needs adequately, to provide
accurate reporting and accounting and to
ensure adherence to all VCT legislation rules.
Errors in shareholders’ records or
shareholdings, incorrect marketing literature,
non compliance with listing rules, loss of assets,
breach of legal duties and inability to provide
accurate reporting and accounting all leading to
reputational risk and the potential for litigation. A
cyber attack or data breach could lead to loss of
sensitive shareholder data resulting in a breach
and liability under GDPR.
The Board has appointed an Audit Committee who reviews the internal
control (“ISAE3402”) and/or internal audit reports from all significant third
party service providers, including the Manager, on a bi-annual basis to
ensure that they have strong systems and controls in place including
Business Continuity Plans and matters relating to cyber security. The Board
regularly reviews the performance of its service providers to ensure that
they continue to have the necessary expertise and resources to provide
a high class service and always where there has been any changes in key
personnel or ownership.
The financial risks faced by the Company are covered within the Notes to the Financial Statements on pages83 to 87.
The Company is facing the key emerging risks of climate change and ESG, given the regulatory, operational and potentially
reputational implications if not appropriately addressed. In order to address these emerging risks, when looking to make a
new investment, the Manager uses an ESG Decision Tool to identify any material ESG risks that need to be managed and
mitigated. For further detail, see pages24 to 26.
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Annual Report and Audited Financial Statements 2024
Environmental, Social & Governance (ESG)
01 Strategic report
The Company is required, by company law, to provide details
of environmental (including the impact of the Company’s
business on the environment), employee, human rights,
social and community issues, including information about
any policies it has in relation to these matters and the
effectiveness of these policies. Since the Company does
not have any employees and it has no direct impact on the
community or the environment due to its status as a VCT,
the Company does not maintain specific policies in relation
to these matters. However, the Board is conscious of the
potential ESG risks associated with its investments as well as
its social and corporate governance responsibilities.
The Board and the Manager believe that responsible
investment involves the integration of ESG factors within
the investment process and that these factors should be
considered alongside financial and strategic issues. The
Company therefore complies with current reporting and
other ESG standards for investment companies, through
its monitoring of the ESG risks and opportunities of its
investee companies. The Company will continue to evolve
its processes and reporting as ESG requirements change.
More broadly, the Company complies with the AIC Code of
Corporate Governance.
The Manager incorporates ESG considerations throughout
the investment process including valuation and this
is communicated with the Board on a quarterly basis.
A framework based on ten key ESG themes is used to
structure analysis, and monitor and report on ESG risks and
opportunities across the lifecycle of investments.
The Manager’s investment philosophy means that it is an
actively engaged shareholder. The Manager’s assessments
of management, board and governance form a critical part
of the investment case, which necessitates that it works
with companies on strategy, M&A, remuneration and related
matters, from the holding period onwards. The Manager will
meet face-to-face with the management team of a publicly
listed company at least twice a year, and more frequently
when it owns a material stake of a company. These meetings
form the basis for the ongoing monitoring of a company’s
strategy, financial performance and ESG considerations.
Voting is an important part of the Manager’s investment
strategy. The Manager’s voting decisions are based on
the course of action that will be in the best interest of the
investee company. Decisions are informed by various
sources including procedures, research, engagement with
the company, discussions with other stakeholders and
advisers, internal discussions and consultations, and other
relevant information (Stewardship-Code-Report-2024.
pdf). For details of our voting records (Public Equity |
Gresham House | Alternative asset management).
For the twelve months to 30 September 2024, the Manager
had the opportunity to vote on 1,886 issues. Of these, the
Manager voted for 94.4 per cent of resolutions, against
on 3.9 per cent, abstained on 1.7 per cent. Of the 74
votes against, the majority were because the resolutions
conflicted with the Manager’s house policy, notably to vote
against political donations.
The Manager has been a signatory to the United Nations
supported Principles of Responsible Investment (UN PRI)
since February 2018. In the 2024 Private Equity module, the
Manager scored 93 per cent versus a median for the sector
of 80 per cent. It is also a signatory of the UK Stewardship
Code. In July 2024, it was announced that the Manager
had met the expected standard of reporting for 2023 and
remained a signatory to the UK Stewardship Code 2020 for
the fourth year in a row.
The Manager undertakes an annual ESG survey to
understand how its VCT unquoted investments respond
to relevant ESG risks and opportunities and how these
are considered as part of their operations. The survey
asked unquoted investee businesses a range of questions
based on the ESG_VC framework across a range of
material environmental, social and governance factors.
It asked them to indicate the relevance of those material
ESG factors to their business, as well as their ability to
influence those factors. Repeating the survey annually
allows companies to demonstrate progression against
material ESG issues and forms the basis of meaningful ESG
engagements between Gresham House Ventures and its
unquoted portfolio companies.
For more information on the Manager’s commitments
and approach to ESG integration and engagement, and
the Manager’s climate related disclosures please see the
following documents:
Sustainable Investment Report
Stewardship Code
Private Equity Sustainable Investment Policy / Public
Equity Sustainable Investment Policy
Engagement and Voting Policy
TCFD report
24 Annual Report and Audited Financial Statements 2024
Diversity
On 18 July 2023, the House of Commons Treasury Committee
published its report (the “Report”) on Venture Capital, which
included growth capital funding provided by Venture Capital
Trusts, and which was broadly positive. MPs recommended
that venture capital firms and their investment companies
should collect and publish their diversity statistics. The Report
also considered the allocation of investment capital to the
various regions of the UK.
The Company and the Manager have long supported
the creation of opportunities for everyone across the UK
through its investment portfolio.
The investment due diligence process for any proposed
new investment includes a consideration of the board
structure and composition as part of the Manager’s
governance considerations within the ESG Decision Tool.
We have considered the findings of the Report and set out
the relevant metrics pertaining to the Company’s portfolio
of unquoted investments as at 30 September 2024,
Gresham House and the Gresham House Strategic Equity
division, responsible for managing the public and private
equity portfolios managed or advised by the Manager.
Table 1 below shows that the portfolio companies were
predominantly set up by males, or groups of male founders,
with 11% (2023: 14%) being founded by all females or
groups of mixed male and female founders.
Table 1
Portfolio company founders
Based on number of companies
Founders 2024 2023
All male 89% 86%
Mixed gender 8% 8%
All female 3% 6%
100% 100%
Table 2
Portfolio company board composition
1
Based on number of directors
Directors 2024 2024
Male 85% 85%
Female 15% 15%
100% 100%
1. excluding Gresham House representatives
Table 2 above shows that board composition within the
portfolio was similarly predominantly male, with 15% of
board members being female (2023: 15%), after excluding
representatives of Gresham House.
Table 3 below shows the regions of the UK where the
Company’s capital has been invested, with the majority of
capital being invested in London and/or the South East.
Table 3
Allocation of capital by region
2
2024 2023
London and South East 62% 65%
Other regions 38% 35%
100% 100%
2. based on cost of investment
In 2024, Gresham House signed up to the Investing in
Women Code. This is a commitment to support the
advancement of female entrepreneurship in the United
Kingdom by improving female entrepreneurs’ access
to tools, resources and finance from the financial
services sector.
In September 2024, the Manager hosted its second annual
female-led event bringing together innovators, investors,
and advisers to foster relationships and share learnings.
01 Strategic report - Environmental, Social & Governance (ESG)
25Annual Report and Audited Financial Statements 2024
Table 4 below shows the gender diversity within Gresham
House as at 30 September 2024.
Table 4
Gresham House gender diversity
3
Gender 2024 2023
Male 62% 62%
Female 38% 38%
100% 100%
3. as at 30 September 2024
Table 5 below shows the gender diversity within the
Strategic Equity division of Gresham House, responsible for
managing the Company’s portfolio.
Table 5
Gresham House strategic equity division
genderdiversity
4
Gender 2024 2023
Male 74% 70%
Female 26% 30%
100% 100%
4. as at 30 September 2024
Gresham House released their Diversity, Equity & Inclusion
(“DEI”) strategy at the start of 2022 to help understand the
changing landscape of DEI. Included within the strategy are
initiatives to improve DEI such as carrying out unconscious
bias training for all employees; evolving Human Resources
systems to include DEI data which is now shared quarterly
with our Group Management Committee and divisional
heads and developing clear DEI guidelines for recruiters.
During the year Gresham House have promoted or
actively attended a number of events targeted at women
entrepreneurs and the senior women from across
Gresham House continued to attend a 12-week external
Resilient Women’s Leadership Programme to develop their
capability to lead.
Gresham House is committed to improving the diversity
of its investment teams, the management teams of the
investee companies that they support and increasing the
amount and number of investments across the UK. As an
example, Gresham House has participated in the 10,000
Black Intern programme for a number of years; in summer
2024 3 interns joined the investment teams, and one
person was successfully hired as an Analyst into the GH
Ventures team.
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01 Strategic report - Environmental, Social & Governance (ESG)
Annual Report and Audited Financial Statements 2024
01 Strategic report - Environmental, Social & Governance (ESG)
27Annual Report and Audited Financial Statements 2024
Other matters
Applying the business model
This section of the Strategic Report sets out the practical
steps that the Board has taken in order to apply the
business model, achieve the investment objective, and
adhere to the investment policy. The investment policy,
which is set out in full on page2, is designed to ensure that
the Company continues to qualify, and is approved, as a
VCT by HM Revenue and Customs.
Portfolio Management
The AIM portfolio is managed with a private equity
approach applied to public market investments. This
involves a proactively engaged approach to interactions
with management and boards of portfolio companies;
seeking to challenge, influence and support key areas such
as strategy, capital allocation, management incentives,
board governance and composition. The Manager
views these areas as critical components of long-term
shareholder value creation.
The unquoted portfolio is actively managed by a large
team of investment executives including over ten highly
experienced, dedicated portfolio directors who provide
access to a far-reaching network of potential partners.
Value creation is driven through board representation in
order to influence areas such as the go-to-market strategy,
capital efficiency, corporate governance and exit planning.
An in-house talent function partners with portfolio
companies to help strengthen management teams and
shape boards of directors at each stage of the investment.
Investing in the right companies
Investments are primarily made in companies which are
substantially based in the UK, although many of these
investees may have some trade overseas. Investments are
selected in the expectation that the application of private
equity disciplines, including an active management style for
unquoted companies, will enhance value and enable profits
to be realised from planned exits.
The Board has delegated the management of the
investment portfolio to Gresham House. The Manager has
adopted a ‘top-down, macro economic and sector-driven’
approach to identifying and evaluating potential investment
opportunities, by assessing a forward view of firstly the
broader business environment, then the sector and finally
the specific potential investment opportunity.
Based on its research, the Manager has selected a number
of sectors that it believes will offer attractive growth
prospects and investment opportunities. Diversification is
also achieved by spreading investments across different
asset classes and making investments for a variety of
different periods.
The Company’s policy is not to invest in any of the following
areas: human cloning; arms/munitions; or adult content.
The Manager’s Review on pages10 to 13 provides a review
of the investment portfolio and of market conditions during
the year, including the main trends and factors likely to
affect the future development, performance and position
of the business.
Risk is spread by investing in a number of different
businesses within different qualifying industry sectors
using a mixture of securities. The maximum the Company
will invest in a single company (including a collective
investment vehicle) is 15per cent of the value of its
investments calculated in accordance with Section 278 of
the Income Tax Act 2007 (as amended) (“VCT Value”). The
value of an individual investment is expected to increase
over time as a result of trading progress and a continuous
assessment is made of its suitability for sale.
The Company invests in a range of securities including,
but not limited to, ordinary and preference shares, loan
stocks, convertible securities and permitted non qualifying
investments as well as cash. Unquoted investments
are usually structured as a combination of ordinary
shares and loan stocks or preference shares, while AIM-
traded investments are primarily held in ordinary shares.
Pending investment in VCT qualifying investments, the
Company’s cash and liquid funds are held in permitted non-
qualifying investments.
VCT status
Compliance with the required VCT rules and regulations
is considered when all investment decisions are made.
Shoosmiths LLP and Philip Hare & Associates advise the
Company on compliance with VCT requirements when
evaluating investment opportunities. Internally, this is
monitored on a continuous basis and it is also reviewed
by PricewaterhouseCoopers LLP (“PwC”) every six
months to ensure ongoing compliance. PwC have been
appointed by the Company to advise on compliance with
VCT requirements, which includes appropriate and regular
review of the portfolio. Although PwC works closely with the
Manager, it reports directly to the Board.
The principal tests are summarised overleaf. Throughout
the year ended 30September 2024, and at the date of this
report, the Company continued to meet these tests.
01 Strategic report
28 Annual Report and Audited Financial Statements 2024
Continuing appointment of the Manager
The Board keeps the performance of the Manager under
continual review. The Management Engagement and
Remuneration Committee, comprising all Directors,
conducts an annual review of the Manager’s performance
and makes a recommendation to the Board about its
continuing appointment.
It is considered that the Manager has executed the
Company’s investment strategy according to the Board’s
expectations. Accordingly, the Directors believe that
the continuing appointment of Gresham House Asset
Management Limited as the Manager of the Company, on
the terms agreed, is in the best interests of the Company
and its shareholders as a whole.
The management agreement
Under the management agreement, the Manager receives
a fee of 2.0per centper annum of the net assets of the
Company. In addition, the Manager is responsible for
providing all secretarial, administrative and accounting
services to the Company for an additional fee of £164k. The
Manager has appointed Waystone Administration Solutions
(UK) Ltd to provide these services to the Company on
its behalf. The Company is responsible for paying the
fee charged by Waystone Administration Solutions (UK)
Ltd to the Manager in relation to the performance of
these services.
Annual running costs are capped at 3.5per cent of the net
assets of the Company (excluding any performance fee
payable to the Manager and irrecoverable VAT), any excess
being refunded by the Manager by way of an adjustment to
its management fee. The running cost as at 30September
2024 was 2.0per cent.
The management agreement may be terminated at
any date by either party giving 12 months’ notice of
termination and, if terminated, the Manager is only entitled
to the management fees paid to it and any interest due
on unpaid fees.
Performance fees
A performance fee will be payable to the Manager once
the total return on shareholders’ funds exceeds an annual
threshold of the higher of 4per cent or base rate plus 2per
cent calculated on a compound basis. To the extent that
the total return exceeds the threshold over the relevant
period then a performance fee of 10per cent of the excess
will be paid to the Manager. The amount of any performance
fee which is paid in an accounting period shall be capped at
5per cent of shareholders’ funds for that period.
Nil performance fee is payable for the year to 30September
2024 (2023: £nil).
VCT status tests
1 To ensure that the VCT’s income in the period has
been derived wholly or mainly (70per cent plus)
from shares or securities;
2 To ensure that the VCT has not retained more than
15per cent of its income from shares and securities;
3 To ensure that the VCT has not made a prohibited
payment to shareholders derived from an issue of
shares since 6April 2014;
4 To ensure that at least 80per cent by value of
the VCT’s investments has been represented
throughout the period by shares or securities
comprised in qualifying holdings of the VCT;
5 To ensure that at least 70per cent by value of the
VCT’s qualifying holdings has been represented
throughout the period by holdings of eligible shares;
6 To ensure that no investment in any company has
represented more than 15per cent by VCT value at
the time of investment;
7 To ensure that the VCT’s ordinary capital has
throughout the period been listed on a regulated
European market;
8 To ensure that the VCT has not made an investment
in a company which causes it to receive more than
the permitted investment from State Aid sources;
9 To ensure that since 17November 2015, the VCT
has not made an investment in a company which
exceeds the maximum permitted age requirement;
10 To ensure that since 17November 2015, funds
invested by the VCT in another company have not
been used to make a prohibited acquisition; and
11 To ensure that since 6April 2016, the VCT has not
made a prohibited non-qualifying investment.
Appointment of the Manager
The Board expects the Manager to deliver a performance
which meets the objective of achieving positive long-term
investment returns, including tax free dividends. A review of
the Company’s performance during the financial year, the
position of the Company at the year end and the outlook for
the coming year is contained within the Chair’s Statement
on pages7 to 9. The Board assesses the performance of
the Manager in meeting the Company’s objective against
the KPIs highlighted on page5 of the report.
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Annual Report and Audited Financial Statements 2024
Viability statement
In accordance with principle 21 of the Association of
Investment Companies Code of Corporate Governance
2019 (“AIC Code”), the Directors have assessed the
prospects of the Company over the three-year period to
30September 2027.
This period is used by the Board during the strategic
planning process and is considered reasonable for a
business of our nature and size. The three-year period is
considered the most appropriate given the forecasts that
the Board require from the Manager and the estimated
timeline for finding, assessing and completing investments.
In making this three-year assessment, the Board has taken
the following factors into consideration:
The Company’s investment strategy
The nature of the Company’s portfolio
The potential impact of the principal risks
and uncertainties
Share buy-backs and dividends
The liquidity of the Company’s portfolio
Market falls and gains
Maintaining VCT approval status
The Board has carried out a robust assessment of the
above factors, as they have the potential to threaten the
Company’s business model, future performance, solvency,
or liquidity. This review has considered the principal risks as
outlined on pages22 to 23.
The Board has also evaluated the ability of third party
suppliers to continue to deliver services to the Company.
The Board has considered the ability of the Company to
raise finance and deploy capital. The Board’s assessment
took account of the availability and likely effectiveness
of the mitigating actions that could be taken to avoid or
reduce the impact of the underlying risks, and the large
listed portfolio that could be liquidated if necessary.
The Company’s portfolio currently includes a large position
in cash or liquid money market funds. Over the last five
years, cash and liquid money market funds have averaged
c.20per cent of the NAV and comprised 13per cent of the
30September 2024 NAV. Cash balances can fluctuate over
time due to changes in market conditions, but positive cash
levels are expected to be maintained over the period.
The Company has no debt, and it is expected that the
Company will remain ungeared for the foreseeable future.
Management retention
The Board is keen to ensure that the Manager continues
to have one of the best investment teams in the VCT and
private equity sector.
The Manager currently operates a hybrid portfolio
management model whereby the significant majority of
cases have a Gresham House appointed Investor Director
drawn from one of, the new investment team, the in-
house portfolio team or an external group of nine highly
experienced portfolio consultants.
A VCT Incentive Scheme was introduced in November
2004 under which members of the Manager’s investment
and in-house portfolio teams invest their own money into a
proportion of the ordinary shares of each eligible unquoted
investment made by the Baronsmead VCTs. In addition,
in 2024, the Manager introduced a Parallel Investment
Incentive Scheme (each a “Scheme” and together “the
Schemes”) for the portfolio consultants allowing them to
invest in the same instruments on the same terms as the
VCTs in any deal where they become the Investor Director.
The Board regularly monitors the Schemes’ arrangements
and considers them to be essential in order to attract,
retain and incentivise the best talent. The Schemes are
in line with current market practice in the private equity
industry and the Board believes that it aligns the interests
of the Manager with those of the Baronsmead VCTs.
Currently, 25 members of the Manager’s investment
and portfolio teams and consultants are included in
the Schemes and have invested a total of £62,000
in 46companies.
Advisory and Directors’ fees
During the year, Gresham House Asset Management
Ltd received £274,000 (2023: £185,000) advisory fees,
£397,000 (2023: £369,000) directors’ fees for services
provided to companies in the investment portfolio and
incurred abort costs of £11,000 (2023: £5,000) with respect
to investments attributable to the Company.
Alternative Investment Fund Managers
Directive (“AIFMD”)
The AIFMD regulates the management of alternative
investment funds, including VCTs. On 22July 2014, the
Company was registered as a Small UK registered AIFM
under the AIFMD.
30
01 Strategic report - Other matters
Annual Report and Audited Financial Statements 2024
Buy back of shares: From time to time, the Company
buys its own shares through the market in accordance
with its share price discount policy. Subject to the
likely impact on shareholders as a whole, the funding
requirements of the Company and market conditions
at the time, the Company seeks to maintain a mid
share price discount of approximately 5per cent to
net asset value where possible. However shareholders
should note this discount may widen during periods of
market volatility.
Secondary market: The Company’s shares are listed
on the London Stock Exchange and can be bought
using a stockbroker or authorised share dealing
service in the same way as shares of any other listed
company. Approximately 128,000 shares were bought by
investors in the Company’s existing shares in the year to
30September 2024.
Board diversity
Information on Board diversity can be found on page 50
of this Report.
The Board has also considered the Company’s income and
expenditure projections and find these to be realistic and
sensible. The Board has assessed the Company’s ability
to cover its annual running costs under several liquidity
scenarios in which the value of liquid assets (including
AIM-traded investments and OEICs) has been subject
to sensitivity analysis. The Directors noted that under
none of these scenarios was the Company unable to
cover its costs.
Based on the Company’s processes for monitoring costs,
share price discount, the Manager’s compliance with the
investment policies, objective and business model, asset
allocation and the portfolio risk profile, 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 the three-year period to
30September 2027.
Shareholder choice
The Board wishes to provide shareholders with a number
of choices that enable them to utilise their investment
in the Company in ways that best suit their personal
investment and tax planning and in a way that treats all
shareholders equally.
Fundraising: From time to time, the Company seeks to
raise additional funds by issuing new shares at a premium
to the latest published net asset value to account for
costs. The Company intends to launch a new offer for
subscription in January 2025.
Dividend Reinvestment Plan: The Company offers a
Dividend Reinvestment Plan which enables shareholders
to purchase additional shares through the market in lieu
of cash dividends. Approximately 2,575,000 shares were
bought in this way during the year to 30September 2024.
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01 Strategic report - Other matters
Annual Report and Audited Financial Statements 2024
Directors’ duties
Overview
Section 172 of the Companies Act 2006 (the “Act”) requires
the Directors to act in good faith and in a way that is most
likely to promote the success of the Company for the
benefit of its shareholders.
Directors must consider the long-term consequences
of any decision they make. They must also consider the
interests of the various stakeholders of the Company,
the impact the Company has on the environment and
community, and operate in a manner which maintains their
reputation for having high standards of business conduct
and fair treatment between shareholders.
Fulfilling this duty naturally supports the Company in its
investment objective of achieving long-term investment
returns for private investors and helps ensure that all
decisions are made in a responsible and sustainable way.
In accordance with the requirements of the Companies
(Miscellaneous Reporting) Regulations 2018, and the AIC
Code, the information below explains how the Directors
have individually and collectively discharged their duties
under Section 172.
To ensure they are aware of, and understand their duties,
Directors are provided with a detailed induction outlining
their legal and regulatory duties as a Director of a UK public
limited company upon appointment. They also receive
regular regulatory updates and training as appropriate. A
Company Secretarial report is included within the papers of
each Board meeting, to remind Directors of their duties and
emphasise the importance of stakeholder consideration
during decision making. Directors also receive technical
updates from the Company’s advisers and the Manager on
a regular basis.
The Directors have access to the advice and services
of the Company Secretary and a range of other service
providers and when deemed necessary, the Directors may
seek independent professional advice in the furtherance of
their duties at the Company’s expense.
The Company has a Schedule of Matters Reserved
for the Board which describe the Board’s duties and
responsibilities. Terms of Reference of the Board’s
Committees are in place, which outline the duties of those
Committees that are delegated to them by the Board,
including their statutory and regulatory responsibilities.
The Board’s Schedule of Matters Reserved and the
Committees’ Terms of Reference are all reviewed at
least annually.
The Audit Committee has responsibility for the ongoing
review of the Company’s risk management and internal
controls. To the extent that they are applicable, risks related
to the matters set out in Section 172 are included within the
Company’s Risk Register and are subject to regular review
and monitoring.
Decision making
The importance of stakeholder considerations in the
context of decision making is taken into account at
every Board meeting. All discussions involve careful
consideration of the longer-term consequences of any
decisions and their implications for stakeholders. Further
information on the role of the Board in safeguarding
stakeholder interests and monitoring ongoing investment
activity can be found on pages33 to 35.
Stakeholder engagement
Following a comprehensive review by the Board, which
regularly keeps stakeholder engagement mechanisms
under review, it was agreed that as the Company is an
externally managed Venture Capital Trust and does not
have any employees or customers, the Company’s key
stakeholders are:
The Company’s shareholders
The Manager
The portfolio of investee companies and the wider
communities in which they operate
A range of external service providers
HMRC and the Company’s regulatory bodies,
including the FCA
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Annual Report and Audited Financial Statements 2024
01 Strategic report
Details of how the Board seeks to understand the needs and priorities of these stakeholders and how these are taken into
consideration during its discussions as part of its decision making are described in the table below:
Stakeholder group Importance Board engagement
Shareholders Continued shareholder
support is critical to
the sustainability of the
Company and delivery of
the long-term strategy of
the business.
The Board is committed to maintaining open channels of
communication with shareholders and during the year has
engaged with shareholders in various ways to understand their
views. These include:
Annual General Meeting (“AGM”) – The Company encourages
attendance and participation from shareholders at the AGM and
values any feedback and questions it may receive.
The Company’s forthcoming 2025 Baronsmead Shareholder
event & AGM will take place on 12March 2025. The Board has
enhanced the event by introducing more relevant and interactive
content in the investment management presentation for the
shareholders of the Company. The AGM will be held in person
and those unable to attend will be able to watch a recording of
the session afterwards.
Further information on the 2025 Baronsmead Shareholder
Event & AGM can be found in the inside cover and in the Chair’s
Statement on page9 and within the Notice of AGM, which is
being sent to shareholders separately from this Annual Report.
Publications – The Company’s Annual and Half-Yearly
Reports are made available on the Company’s website
(www.baronsmeadvcts.co.uk) and sent to shareholders
when requested. These publications provide shareholders
with information regarding the Company’s business model,
strategy and investment portfolio, and provide a clear picture
of the Company’s financial position. This is supplemented by
the monthly publication of the NAV and quarterly factsheets
published on the Company’s website. Feedback and questions
received by the Company from shareholders enables the
Company to improve its reporting, which in turn helps to deliver
transparent and understandable updates.
Shareholder communication and shareholder concerns –
TheManager communicates with shareholders periodically and
shareholders are welcome to raise any comments, issues or
concerns with the Board at any time. Shareholders are invited
to do so by writing to the Chair at the registered office. Michael
Probin as Senior Independent Director is also available to
shareholders if they have any questions or concerns.
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01 Strategic report - Directors’ duties
Annual Report and Audited Financial Statements 2024
Stakeholder group Importance Board engagement
The Manager The Manager’s
performance is critical
for the Company to
successfully deliver its
investment strategy
and meet its objective
to achieve long-term
investment returns for
private investors, including
tax-free dividends.
The Board invites the Manager to attend Valuation Forums,
Board and Committee meetings to update the Directors on the
performance of the portfolio and execution of the investment
strategy. The Board holds detailed discussions with the Manager
on all key strategic and operational topics on an ongoing basis. In
addition, the Chair regularly meets with the Manager to ensure a
close dialogue is maintained. In line with the Company’s culture,
the Board recognises the importance of working together with the
Manager in a way that:
encourages open, honest, and collaborative discussions
at all levels, allowing time and space for original and
innovative thinking;
draws on Board members’ individual experience and knowledge
to support and challenge the Manager in its monitoring of and
engagement with portfolio investee companies;
ensures that the impact on the Manager is fully considered and
understood before any business decision is made; and
ensures that any potential conflicts of interest are avoided or
managed effectively.
The portfolio of
investee companies
The Company invests in
growth businesses across
a range of sectors to meet
the Company’s investment
objectives in accordance
with VCT legislation.
Regular engagement with the portfolio of investee companies
is undertaken by the Manager, so a transparent and objective
relationship between the Board and the Manager is vital. For
unquoted and larger AIM holdings, the Manager is an influential and
engaged shareholder (on behalf of the Company) and Manager
representatives often join the boards of these companies.
External service
providers
To function as a VCT listed
on the London Stock
Exchange, the Company
relies on a diverse range
of advisors for support
in meeting all relevant
obligations.
The Board maintains regular contact with its external providers and
receives reports from them at Board and Committee meetings, as
well as outside of the regular meeting cycle. Their advice, as well as
their needs and views are routinely considered. During the period,
the Management Engagement and Remuneration Committee
formally assessed the external service providers’ performance,
fees and individually, their continuing appointment to ensure that
they continue to fulfil their role in support of the Company and the
Board and are appropriately remunerated to deliver the expected
level of service. The Audit Committee reviews and evaluates
the control environments in place at each service provider
asappropriate.
HMRC and
regulatory bodies
including the
Financial Conduct
Authority (“FCA”)
The Company must comply
with HMRC VCT rules and
must comply or explain its
adherence to the AIC Code
as part of its continuing
obligations as required by
the FCA.
The Board regularly considers how it meets regulatory and
statutory obligations and follows voluntary and best-practice
guidance, including how any governance decisions it makes
impacts the Company’s stakeholders, both in the short and the
longer-term. The Audit Committee obtains confirmation from its
VCT status adviser regarding compliance with HMRC’s VCT rules
twice a year, and from the Manager at each board meeting. The
Company Secretary reviews the Company’s ongoing compliance
with the AIC Code which informs the Company’s corporate
governance disclosures in the Annual Report. In addition, the
Board receives regular reports on regulatory compliance and
any inspections or reviews that are commissioned by regulatory
bodies. The Company ensures it meets all required HMRC
obligations and payments promptly.
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Annual Report and Audited Financial Statements 2024
01 Strategic report - Directors’ duties
The mechanisms for engaging with stakeholders are kept under review by the Directors and discussed at Board meetings
to ensure they remain effective. Examples of the Board’s principal decisions during the year and how the Board fulfilled its
duties under Section 172, and the related engagement activities, are set out below.
Principal decision Long-term impact Stakeholders and engagement
Approval of
fundraising
Providing shareholders and
potential new investors the
opportunity to subscribe
for shares in BVT, which in
turn provides opportunities
for Company growth
and increased investor
engagement.
In deciding to launch a fundraising during the reporting period, the
Board considered:
the expectations and preferences of the
Company’s shareholders;
the Company’s cash flow forecast, short term investment rates
and the ability to adhere to the Company’s dividend policy;
the effect on the NAV and the ability of the Company to be able to
meet HMRC’s VCT investment rules and timelines;
the new investment pipeline;
the impact on future compliance with HMRC VCT legislation;
the costs involved in issuing a prospectus and of fundraising; and
the advantages and disadvantages of a joint prospectus across
the two Baronsmead VCTs which Gresham House manages.
As a result, the Company had raised £25m in 2023/2024.
The Baronsmead
Shareholder event
and AGMs
Providing shareholders
with in-depth information in
an interactive setting and
an opportunity to meet and
question the Board and the
Manager.
The Board takes into account any feedback it receives from
shareholders. Working with the Manager, and to further enhance
the opportunity to engage with shareholders in a meaningful way,
the Directors decided to build on the agenda for the Company’s
AGM and in 2025 will introduce additional presentations, panel
discussions, portfolio company interviews and an extended Q&A
session for the shareholders of the Company.
Third party
independent
valuations
Providing comfort and
risk mitigation on the
Manager’s processes
for the valuation of the
portfolios unquoted assets.
During 2023 and 2024, the Company engaged the services
of Lincoln International and Kroll to undertake a sample of
independent third party valuations as a means of managing
the Board’s risk in respect of the valuation of the VCT portfolio
unquoted assets. The responsibility for the preparation of draft
valuations lies with the Manager, and the Board is responsible
for the approval of valuations. The Manager used these
independent valuations in conjunction with their own valuations
to provide independent assurance and risk mitigation to the
Board. InJuly2024, the Board assessed the use of the third party
valuations and concluded that the process had provided comfort
on the Manager’s controls and the quality of the Manager’s
processes compared to the market. Furthermore, the Board
agreed to reassess the use of third party independent valuations
on a regularbasis.
The Strategic Report has been approved by the Board of Directors.
On behalf of the Board
Fiona Miller Smith
Chair
23 December 2024
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01 Strategic report - Directors’ duties
Annual Report and Audited Financial Statements 2024
Board of Directors
Fiona Miller Smith
Chair and Nomination
Committee Chair
Appointed: 1 September 2021
Fiona is the CEO of Barts Charity, a health foundation
with a £550 million financial investment and commercial
property portfolio. Barts Charity funds transformational
medical research and innovation in healthcare delivery
and technology. Under Fiona’s leadership, over the last
five years, Barts has also allocated 25 per cent of its
portfolio to private equity and venture funds, including
early stage venture and life sciences funds. Fiona brings a
wealth of experience, spanning over 25 years, in investing
in and leading growth companies. Her early career was in
finance and private equity at Goldman Sachs and Murray
Johnson Private Equity, and she then had a successful
entrepreneurial career prior to joining Barts Charity in 2016
including, five years at Social Finance UK, a leading impact
investing and advisory firm. Fiona is a Trustee of John
Lyons, the Chair of Lifting Limits and sits on the Barts Life
Sciences Advisory Board. Fiona has an MBA from INSEAD.
Beneficial Shareholding: 16, 811 ordinary shares
Michael Probin
Non-Executive Director,
Senior Independent Director and
Management Engagement and
Remuneration Committee Chair
Appointed: 14 June 2021
Michael has over 30 years’ experience in executive roles
within the tax efficient investment industry. He worked
on Business Expansion Scheme products at AXA Sun
Life Group for ten years before joining the management
team at Livingbridge LLP, where he gained extensive
knowledge of the VCT industry. Before retiring from his role
at Livingbridge LLP in 2018, he worked extensively with the
VCT industry trade and representative bodies and various
stakeholders. Michael has a B.Sc. (Econ.) and M.Sc. (Econ.)
(Urban and Regional Planning) from the London School of
Economics and EMBA from London Business School.
Beneficial Shareholding: 86,235 ordinary shares
Isabel Dolan
Non-Executive Director and
Audit Committee Chair
Appointed: 1 November 2023
Isabel has over 25 years’ experience working with growth
companies as a corporate financier, equity investor, lender
and as a CFO. Her previous roles include working with the
turnaround team in RBS, and as a Portfolio Director with 3i.
Until 2013 she was Finance and Operations Partner with
Albion Capital, specialising in the finance, operations and
administration of venture capital trusts.
She has been a Non-Executive Director and Chair of Audit
and Risk Committee for an NHS Trust and previously served
as Chair of St. Albans Community Bank. Isabel is currently a
Trustee of Bedford School Foundation Trust.
Isabel is a Fellow of the Institute of Chartered Accountants
in England and Wales and holds an MBA from London
Business School.
Beneficial Shareholding: 37,261 ordinary shares
All directors are considered independent.
37
02 Directors’ report
Annual Report and Audited Financial Statements 2024
Directors’ report
The Directors of Baronsmead Venture
Trust plc (the Company) (registered number
03504214) present their Annual Report and
Audited Financial Statements of the Company
for the year ended 30September 2024.
Shares and shareholders
Share capital
Under the terms of the prospectus published by the
Company on 24 November 2023, the Company issued a
total of 42,843,562 (nominal value of £4,284,356.2) ordinary
shares during the year ended 30 September 2024 by way of
three allotments, raising approximately £25 million (before
costs). Details of these allotments are as set out below:
Allotment
date
Admission
date
No. shares
issued Issue price
26/01/2024 02/02/2024 16,089,415 Between
57.95p – 61.23p
15/02/2024 22/02/2024 7,702,241 Between
56.92p – 59.68p
28/03/2024 03/04/2024 19,051,906 Between
56.80p – 59.56p
At the AGM held on 5 March 2024, the Company was
granted authority to purchase up to 14.99per cent of the
Company’s ordinary share capital in issue at that date on
which the Notice of AGM was published, amounting to
52,423,803 ordinary shares.
During the year, the Company bought back a total
of 7,514,412 ordinary shares to be held in Treasury,
representing 1.8per cent of the issued share capital as
at 30September 2024, with an aggregate nominal value
of £751,441. The total amount paid for these shares was
£4,006,241. As at 30 September 2024, the Company had
the remaining authority to buy back 48,010,050 shares
under the resolution approved at the 2024 AGM.
During the year, the Company sold 15,000 ordinary shares
from Treasury. The total amount received by the Company
for these shares was £7, 8 9 0. Shares will not be sold out of
Treasury at a discount wider than the discount at which the
shares were initially bought back by the Company.
As at 30 September 2024, the Company’s issued share
capital was as follows:
Shares Total
% of
Shares in
issue
Nominal
Value
In issue 424,464,819 100 £42,446,481.90
Held in Treasury 37,586,162 8.85 £3,758,616.20
In circulation 386,878,657 91.15 £3 8 ,687,865.70
The total voting rights as at 30September 2024 were
386,878,657. Since then, the Company has brought back
4,169,361 shares, resulting in the total voting rights being
382,709,296 as at the date of this report.
Shareholders
Each 10p ordinary share entitles the holder to attend and
vote at general meetings of the Company, to participate in
the profits of the Company, to receive a copy of the Annual
Report and Financial Statements and to participate in a final
distribution upon the winding up of the Company.
There are no restrictions on voting rights, no securities
carry special rights and the Company is not aware of any
agreement between holders of securities that result in
restrictions on the transfer of securities or on voting rights.
There are no agreements to which the Company is party
that may affect its control following a takeover bid.
In addition to the powers provided to the Directors
under UK company law and the Company’s Articles of
Association, at each AGM the shareholders are asked to
authorise certain powers in relation to the issuing and
purchasing of the Company’s own shares. Details of the
powers granted at the AGM held in 2024, all of which remain
valid, can be found in the last notice of AGM.
The Company is not, and has not been throughout the year,
aware of any beneficial interests exceeding 3per cent of
the total voting rights.
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Annual Report and Audited Financial Statements 2024
02 Directors’ report
Conflicts of interest
The Directors declare all actual or potential conflict of
interest to the Board, which has the authority to approve
such situations. The Company Secretary maintains
the Register of Directors’ Conflicts of Interests which is
reviewed quarterly by the Board. Directors advise the
Company Secretary and the Board as soon as they become
aware of any conflicts of interest and do not take part in
discussions which relate to any of their conflicts.
Financial instruments
The Company’s financial instruments comprise equity
and fixed interest investments, cash balances and liquid
resources including debtors and creditors that arise
directly from its operations such as sales and purchases
awaiting settlement and accrued income. The financial
risk management objectives and policies arising from its
financial instruments and the exposure of the Company to
risk are disclosed in note 3.3 of the accounts.
Responsibility for accounts
The Directors who held office at the date of approval of
this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which the
Company’s Auditor is unaware and each Director has taken
all the steps that they ought to have taken as a Director to
make themselves aware of any relevant audit information
and to establish that the Company’s Auditor is aware of
that information.
Going concern
After making enquiries and bearing in mind the nature of
the Company’s business and assets, the Directors consider
that the Company has adequate resources to continue
in operational existence for the foreseeable future. The
going concern assumption assumes that the Company will
maintain its VCT status with HMRC.
The Directors acknowledge the uncertainty in the
macroeconomic and equity market. The Board
nevertheless considers the Company to be well placed to
continue to operate for at least 12 months from the date of
this report, as the Company has sufficient liquidity to pay its
liabilities as and when they fall due and also to invest in new
opportunities as they arise.
The Directors have considered the liquidity of the Company
and its ability to meet obligations as they fall due for a
period of at least 12 months from the date that these
financial statements are approved. As at 30September
2024, the Company held cash balances and investments
in readily realisable securities with a value of £27million,
representing 13per cent of the Company’s NAV.
Tax free dividends
The Company has paid or declared the following dividends
for the year ended 30September 2024:
Dividends £’000
Interim dividend of 1.75pper ordinary share
paid on 9September 2024
6,793
Final dividend of 2.0pper ordinary share to
be paid on 17 March 2025*
7,738
Total dividends paid for the year 14,531
* Calculated on shares in circulation as at 30September 2024.
Subject to shareholder approval at the AGM, a final
dividend of 2.0pper share will be paid on 17March 2025 to
shareholders on the register at 14February 2025. The ex-
dividend date will be 13February 2025.
Directors
Appointments
The rules concerning the appointment and replacement
of Directors are contained in the Company’s Articles of
Association and the Companies Act 2006. Further details
in relation to the appointed Directors and the governance
arrangements of the Board can be found on page44 and in
the Corporate Governance Statement.
Directors are entitled to a payment in lieu of three-month
notice by the Company for loss of office in the event of
a takeover bid.
Directors’ indemnity
Directors’ and officers’ liability insurance cover is in place
in respect of the Directors and was in place throughout the
year under review. The Company’s Articles of Association
provide, subject to the provisions of UK legislation, an
indemnity for Directors in respect of costs which they may
incur relating to the defence of any proceedings brought
against them arising out of their positions as Directors,
in which they are acquitted or judgement is given in their
favour by the Court.
Save for such indemnity provisions in the Company’s
Articles of Association and in the Directors’ letters of
appointment, there are no qualifying third party indemnity
provisions in force.
39
02 Directors’ report - Directors’ report
Annual Report and Audited Financial Statements 2024
Further information in relation to the Manager’s integration
of ESG factors in management of the Company’s portfolio
is set out on pages24 to 26 of the Strategic Report.
Under Listing Rule 11.4.22(R), the Company, as a closed-
ended investment fund, is exempt from complying with the
Task Force on Climate-related Financial Disclosures.
Annual General Meeting
The Company intends to hold the next AGM on 12 March
2025, and all shareholders are invited to attend. The details
of the business put to the meeting, as well as information on
how to register will be included in the Notice of AGM and on
the Baronsmead Venture Trust website. The Board is of the
opinion that the passing of all resolutions being put to the AGM
would be in the best interests of BVT and its shareholders. The
Directors recommend that shareholders vote in favour of all
resolutions as set out in the Notice of Meeting, as they intend
to do in respect of their own shareholdings.
Post balance sheet events
Post balance sheet events are disclosed in note 3.6
of the accounts.
By Order of the Board
Gresham House Asset Management Ltd
Company Secretary
5 New Street Square, London EC4A 3TW
23 December 2024
The Company has no debt, and it is expected that the
Company will remain ungeared for the foreseeable future.
The Directors have assessed the Company’s ability to
cover its annual running costs under several liquidity
scenarios in which the value of liquid assets (including
AIM-traded investments and OEICs) has been subject
to sensitivity analysis. The Directors noted that under
none of these scenarios was the Company unable to
cover its costs.
The Company’s forecasts and cash flow projections,
taking into account the current economic environment
and other potential changes in performance, show that the
Company has sufficient funds to meet both its contracted
expenditure and its discretionary cash outflows in the form
of the share buyback programme and dividend policy.
Future developments
The outlook for the Company is set out in the Chair’s
Statement on page9.
Listing rule disclosure
The Company confirms that there are no items which
require disclosure under Listing Rule 6.6.4R in respect of
the year ended 30September 2024.
Information required by DTR 4.1.8 is included in the
Strategic Report on pages 5 to 35 and incorporated into
this Directors’ report by reference.
Streamlined energy and
carbon reporting
The Company has no greenhouse gas emissions to
report from its operations nor does it have responsibility
for any other emissions producing sources under the
Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013. Consequently, the Company
consumed less than 40,000 kWh of energy during the year
in respect of which the Directors’ Report is prepared and
therefore is exempt from the disclosures required under the
Streamlined Energy and Carbon Reporting criteria.
02 Directors’ report - Directors’ report
40 Annual Report and Audited Financial Statements 2024
Corporate governance
This Corporate Governance statement forms
part of the Directors’ report.
Background
Under the UK Listing Rules, listed companies are required
to disclose how they have applied the principles and
complied with the provisions of the corporate governance
code they follow. The provisions of the UK Corporate
Governance Code (“UK Code”), as issued by the Financial
Reporting Council (“FRC”) in July 2018, are applicable to the
year under review and can be viewed at www.frc.org.uk.
The related AIC Code issued by the AIC in February 2019
addresses all the principles set out in the UK Code. The
FRC has confirmed that AIC member companies, such
as Baronsmead Venture Trust plc, who report against the
AICCode, will be meeting their obligations in relation to
the UK Code and the associated disclosure requirements
under the Listing Rules. The AIC Code can be viewed at
www.theaic.co.uk where it includes an explanation of
how the AIC Code adapts the principles and provisions
set out in the UK Code to make them relevant for
investment companies.
The Board believes that high standards of governance
help make sure that consideration of stakeholders’
interests is embedded in our discussions and decision-
making, that the Board maintains a long term perspective,
that the Company maintains its reputation for fairness,
high quality corporate reporting and business conduct,
and ultimately, good governance helps support BVT in
delivering its strategy.
Compliance
Throughout the year ended 30September 2024, the
Company complied with the principles and provisions of
the AIC Code which incorporates the UK Code. The Board
attaches great importance to the matters set out in the
Code and strives to observe its principles. The table on
the following pagesreports on the Company’s compliance
with the AIC Code.
The principles of the AIC code
The AIC Code is comprised of five sections:
Board leadership and purpose
Division of responsibilities
Composition, succession and evaluation
Audit, risk and internal control
Remuneration.
The Board’s Corporate Governance statement sets out
how the Company complies with each of the provisions
of the AIC Code.
41
Annual Report and Audited Financial Statements 2024
02 Directors’ report
AIC
Code Principle Compliance Statement
BOARD LEADERSHIP AND PURPOSE
A. A successful company
is led by an effective
board, whose role is to
promote the long-term
sustainable success of
the company, generating
value for shareholders
and contributing to
widersociety.
Directors are fully engaged and committed to using their collective, extensive
experience to foster healthy debate and drive business strategy for the long-
term sustainable success of the Company. The Board comprises Directors who
have specific expertise in Venture Capital, VCTs and shareholder engagement.
Further details of the Directors biographies can be found on page 37. All Directors
are independent and controls are in places to identify and manage conflicts of
interest where these arise.
The Company’s investment objective is to achieve long-term investment returns
for private investors within a tax efficient structure and the Board ensures that all
decisions are made responsibly. The Board and the Manager are committed to
managing the business and its investment strategy in a sustainable manner and
the Board emphasises the importance of ESG in its investment decisions and risk
management.
B. The board should establish
the company’s purpose,
values and strategy, and
satisfy itself that these
and its culture are aligned.
Alldirectors must act
with integrity, lead by
example and promote the
desiredculture.
The purpose of the Company is also its investment objective, which is to achieve
long-term investment returns for private investors, within a tax efficient structure.
This is achieved by investing in a diverse portfolio of primarily UK growth
businesses whether unquoted or traded on AIM.
The Board adopts an open and inclusive culture in its interaction with the
Manager, shareholders and other stakeholders, to support the delivery of its
purpose, values and strategy. Further details of what the Directors consider
important element of culture can be found on page 34.
C. The board should ensure
that the necessary
resources are in place for
the company to meet its
objectives and measure
performance against
them. The board should
also establish a framework
of prudent and effective
controls, which enable
risk to be assessed
andmanaged.
The Board regularly reviews the performance of the Company and the
performance and resources of the Manager and service providers, to ensure the
Company can meet its objectives.
At each quarterly meeting, the Board receives a report on the performance of its
investments benchmarked to the wider VCT sector, any industry issues, as well as
forecasts for future periods.
The Board has agreed specific KPIs with the Manager to enable both parties to
monitor performance and compliance with the agreed investment policy. The
Directors regularly review the Company’s risk management framework, and seek
additional information from the Manager to supplement these reports.
The Board holds an annual strategy meeting to set strategic and performance
objectives for the year ahead.
The Board has established a framework for monitoring and evaluating the
performance of its third-party service providers.
D. In order for the company
to meet its responsibilities
to shareholders and
stakeholders, the board
should ensure effective
engagement with, and
encourage participation
from, these parties.
The Board takes its responsibility to shareholders and stakeholders into account
and considers the opinions of all such parties when making any decision.
The Directors place considerable importance on shareholder engagement and
on communications with them and all other stakeholders. Shareholders who
wish to contact the Board may do so by writing to the Chair at the Company’s
Registered Office. All Directors make themselves available to meet shareholders
at the Company’s Shareholder presentation and AGM.
The Directors’ Statement on meeting their responsibilities under Section 172 of
the Companies Act 2006 can be found on pages32 to 35.
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AIC
Code Principle Compliance Statement
DIVISION OF RESPONSIBILITIES
F. The Chair leads the board
and is responsible for its
overall effectiveness in
directing the company.
They should demonstrate
objective judgement
throughout their tenure
and promote a culture of
openness and debate.
In addition, the Chair
facilitates constructive
board relations and the
effective contribution of all
Non-Executive Directors,
and ensures that directors
receive accurate, timely
and clear information.
There is a clear division of responsibility between the Board, the Chair, the
Manager, and the Company’s third-party service providers. The Board has a
policy which sets out the responsibilities of the Chair and the Senior Independent
Director which is available on the Company’s website.
The Chair is responsible for leading the Board and its overall effectiveness in
directing the affairs of the Company, ensuring that all Directors receive accurate,
timely and clear information and helping to promote a culture of openness and
debate in Board meetings. The Chair takes a leading role in ensuring effective
communications with shareholders and other stakeholders. All of these areas are
considered as part of the annual Board performance review, and more information
on the outcomes of the latest review can be found onpage49.
The Board meets regularly throughout the year and prior to each Board, Valuation
and Committee meeting. Additionally Directors meet between formal meetings to
discuss matters where more time is required.
G. The board should
consist of an appropriate
combination of directors
(and, in particular,
independent non-
executive directors) such
that no one individual or
small group of individuals
dominates the board’s
decision making.
The Board comprised three Non-Executive Directors as at 30September
2024. MrMichael Probin is the Senior Independent Director and serves as an
intermediary for the Company’s shareholders. As at the date of this report, the
Board comprises of two female and one male Directors.
Having considered the performance and independence of each Director, the
Board has determined that they are independent in character and judgement and
that there are no other relationships or circumstances which are likely to affect
their judgement nor impair their independence.
As a result of the Board evaluation process, the Board determined that each
Director provided expert and valued contributions to Board deliberations and
no one individual, or small group of individuals has dominated Board decision
making.
H. Non-Executive Directors
should have sufficient
time to meet their
board responsibilities.
They should provide
constructive challenge,
strategic guidance, offer
specialist advice and
hold third-party service
providers to account.
As part of the Board evaluation process, the contributions of each Director, and
the time commitment made by each Director are considered. Directors’ other
commitments are regularly reviewed, and any new appointments are considered
by the other Directors to ensure there is no conflict of interest. It was concluded
that each Director provided appropriate levels of commitment and challenge to
the Board and provided the Company and service providers with guidance and
advice when required.
I. The board, supported by
the company secretary,
should ensure that it has
the policies, processes,
information, time and
resources it needs in order
to function effectively and
efficiently.
The Directors have access to the advice and services of the Company Secretary
who is responsible to the Board for ensuring that Board procedures are in place
and followed, and that applicable rules and regulations are complied with. The
Company Secretary is also responsible for ensuring good information flows
between all parties. The Directors also have access to independent professional
advice at the Company’s expense where they judge it necessary to discharge
their responsibilities properly.
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Code Principle Compliance Statement
COMPOSITION, SUCCESSION AND EVALUATION
J. Appointments to the
board should be subject
to a formal, rigorous and
transparent procedure, and
an effective succession
plan should be maintained.
Both appointments and
succession plans should
be based on merit and
objective criteria and,
within this context, should
promote diversity of
gender, social and ethnic
backgrounds, cognitive
and personal strengths.
The Board has established a Nomination Committee, which leads the
appointment process of new Directors as and when vacancies arise. The Board
has adopted a formal Diversity policy. Further details of the policy can be found on
page 49.
K. The board and its
committees should
have a combination of
skills, experience, and
knowledge. Consideration
should be given to the
length of service of
the board as a whole
and membership
regularlyrefreshed.
The Directors’ biographical details are set out on page37 and demonstrate the
wide range of skills and experience that each Director brings to the Board.
The Board maintains a Tenure and Reappointment policy for all Directors to
ensure that the Board continues to have the right balance of skills and experience
aligned with the strategic plans of the Company.
The Board recognises the importance of Directors maintaining independence of
character and judgement.
Both the Nomination Committee and the Board annually review the composition
of the Board and the succession plans for each Director to ensure that the Board
has the skills and experience necessary for the management of the Company,
having regard to anticipated challenges andopportunities.
L. Annual evaluation of the
board should consider its
composition, diversity and
how effectively members
work together to achieve
objectives. Individual
evaluation should
demonstrate whether
each director continues to
contribute effectively.
The Board evaluates its own performance and that of its Committees and the
Chair on an annual basis. For the period under review, this was carried out by way
of a questionnaire and subsequent discussions. The details of, and results of the
annual Board Evaluation process conducted during the period can be found on
page49.
AUDIT, RISK AND INTERNAL CONTROL
M. The board should establish
formal and transparent
policies and procedures to
ensure the independence
and effectiveness of
external audit functions
and satisfy itself on the
integrity of financial and
narrative statements.
The Audit Committee has put in place a Non-Audit Services policy which ensures
that any work outside the scope of the standard audit work requires prior approval
by the Audit Committee or the Board to avoid impairing the external auditor’s
independence.
No non-audit services have been provided by BDO LLP during the financial
year, therefore the Committee continues to believe that BDO LLP remains
independent. Further information on the independence of the external auditor
and the work of the Audit Committee can be found on pages46
to 48.
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Code Principle Compliance Statement
N. The board should
present a fair, balanced
and understandable
assessment of the
company’s position
andprospects.
The Audit Committee has reviewed the Audited Annual Report and Financial
Statements and agrees that it presents a fair, balanced, and understandable
assessment of the Company’s position and prospects.
O. The board should establish
procedures to manage
risk, oversee the internal
control framework and
determine the nature and
extent of the principal
risks the company is
willing to take in order
to achieve its long-term
strategicobjectives.
Risks faced by the business are considered, monitored and assessed on a
regular basis by the Manager and formally by the Board at each Board meeting.
For details in respect to the Company’s principal risks and uncertainties and the
appropriate measures taken to mitigate each risk can be found on pages22 to23.
The Audit Committee receives service provider internal control reports which are
collated by the Manager. The performance of all third party service providers is
reviewed at least annually by the Management Engagement and Remuneration
Committee. Further details can be found on pages52 to56.
REMUNERATION
P. Remuneration policies
and practices should
be designed to support
strategy and promote long-
term sustainable success.
With respect to Directors’ remuneration, the Company follows the
recommendation of the AIC Code that Non-Executive Directors’ remuneration
should reflect the time commitment and responsibilities of the role. The
Company’s policy is that remuneration of Non-Executive Directors should reflect
the experience, the responsibilities and time commitments each Director devotes
to the Company’s affairs and to be in line with that of other relevant venture
capitaltrusts.
Q. A formal and transparent
procedure for developing
policy remuneration
should be established. No
director should be involved
in deciding their own
remuneration outcome.
The Board’s Management Engagement and Remuneration Committee
considers at least annually the level of the Board’s fees, in accordance with the
Remuneration Policy approved by shareholders at the AGM held in 2023. Further
details on the Directors’ remuneration is contained in the Directors’ Remuneration
Report on pages52 to 56.
R. Directors should exercise
independent judgement
and discretion when
authorising remuneration
outcomes, taking account
of company and individual
performance, and wider
circumstances.
All Directors of the Company are independent Non-Executive Directors, and
all Directors are members of the Management Engagement and Remuneration
Committee. Any decision about remuneration is taken after considering the skill
and time commitment required, the performance of the Company and current
market conditions.
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The Board’s Committees
The Board has delegated certain responsibilities to its Audit, Management Engagement and Remuneration and Nomination
Committees. Given the size and nature of the Board, it is felt appropriate that all Directors are members of each of the
Committees. The Board has established formal Terms of Reference for each of the Committees, which are available on the
Company’s website at www.baronsmeadvcts.co.uk, and from the Company Secretary upon request.
Audit Committee report
Chair: Ms Isabel Dolan
Membership
All Directors are members of the Audit Committee, and
this includes the Chair of the Board. All Audit Committee
members consider that, individually and collectively, they
are each appropriately experienced to fulfil their role on
the Audit Committee through recent financial experience
gained from senior positions in the venture capital and/or
financial services sectors. The Audit Committee Chair, Ms
Isabel Dolan, is a qualified Chartered Accountant (FCA).
Key responsibilities:
1 Reviewing the content and integrity of the Annual and
Half-Yearly Financial Statements:
2
Reviewing compliance with HMRC VCT tests:
3
Reviewing the Company’s internal control and risk
management systems.
4
Reviewing the remuneration and terms of appointment of
the external auditor:
5
Reviewing the effectiveness of the external audit process
in accordance with regulatory requirements:
6
Ensuring auditor objectivity and independence is
safeguarded, particularly in the context of the provision of
non-audit services: and
7
Providing a forum through which the auditor may
report to the Board.
Matters considered by the Audit Committee
during the year
The Audit Committee met three times during the year and
also undertook work outside of these formal meetings.
At these meetings, the Committee has addressed the
following significant issues:
Review of Annual and Half-Yearly
FinancialStatements
The Audit Committee reviewed the Annual Financial
Statements and the Half-Yearly Financial Statements
during the period, with a particular focus on areas requiring
judgment and on the critical accounting policies, and
made recommendations to the Board in relation to these
financial statements.
A significant area of focus during these reviews was the
valuation of the unquoted investments. The Manager
has confirmed to the Audit Committee that all valuations
had been prepared in accordance with IPEV guidelines
and had taken account of the latest available information
about the investee companies as well as current index
and market data.
The Audit Committee spent time discussing the Manager’s
valuation process, methodology and control systems
used to draft valuations of the Company’s investment
portfolio. The Manager also commissioned a sample of four
of the more material unquoted investments for external
independent unquoted valuation in parallel with their own,
to provide third-party assurance and risk mitigation to the
Audit Committee and the Board.
As part of the formal valuations process, the Board met
quarterly to assess the appropriateness of the estimates
and judgements made by the Manager during the valuation
process and used this information as the basis for their
approval of valuations.
Compliance with the VCT tests
The Company engages PwC as its VCT Status Adviser to
advise on its compliance with the legislative requirements
relating to VCTs.
The Audit Committee met with PWC to review their report
which demonstrated ongoing compliance with HMRC
VCT rules. The Audit Committee Chair also met with the
Company’s VCT tax advisor PWC individually to understand
more information about team composition and depth.
The Audit Committee intends to continue to work with the
Company’s advisors to maintain the policies and controls
necessary for the Board to ensure full compliance with
the VCT rules.
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Review of governance and future changes
During the year under review, the Audit Committee
considered governance matters, including the monitoring
of the changes to the AIC Code.
The Audit Committee has started to consider which
changes to its processes and procedures will be necessary
as part of the 1 January 2026 introduction of Provision 34
of the AIC Code. This will require the Board to report on
the monitoring and reviewing of the Company’s internal
controls, including those of the Manager and third party
suppliers. Directors will be required to make a declaration to
shareholders on the effectiveness of the material controls,
and describe any that have not operated effectively at the
end of each financial year.
Going concern and long-term viability
The Audit Committee has considered the Company’s long-
term financial requirements and viability for the next three
years, using forecasts provided by the Manager.
This assessment included the review of possible
fluctuations in investment valuations, and the impact of
changes in interest rates, inflationary pressures and other
macro-economic factors, on the Company’s liquidity
and on financial statements disclosures. As a result of
this assessment, the Audit Committee concluded that
the Company had adequate resources to continue in
operation and meet its liabilities as they fall due both for the
forthcoming year and until 2027. Related long-term viability
and going concern statements are included on page 30
and pages 39 to 40 respectively.
External Auditor
The Audit Committee met the Audit Partner from BDO
LLP (“BDO”) on two occasions during the year, to discuss
their report on the Company’s 2023 audit and separately
to agree the audit plan and fees for the 2024 audit.
These discussions included examination of the Auditor’s
independence. Since the year end, and as part of the review
of the 2024 audit process, the Committee has met the BDO
Partner in the absence of the Manager to discuss progress
of the audit and issues that arose during the audit. The
Audit Committee Chair has also separately met with the
BDO Audit Partner during the year.
The Audit Committee has also discussed the outcome of
BDO’s July 2024 Financial Reporting Council (“FRC”) annual
assessment of Tier 1 audit quality with the Audit Partner.
BDO is one of the six Tier 1 audit firms, and was therefore
subject to a review by the Financial Reporting Council’s
Audit Quality Review team.
Internal controls and risk
management systems
The Audit Committee oversees the operation of the
Company’s risk management and internal control systems,
with procedures designed to identify and manage, rather
than completely eliminate, risk.
The Company is exposed to a variety of risks and
uncertainties. The Board, through delegation to the Audit
Committee, has undertaken a review of the principal risks
facing the Company, together with a review of any emerging
risks that may have arisen during the year to 30 September
2024, including those that may threaten its business model,
future performance, solvency or liquidity. A statement of
the principal risks and uncertainties faced by the Company
can be found on pages 22 to 23.
A Risk Register records the risks that the Company is
exposed to, including, market, investment, operational and
regulatory risks, and the controls employed to mitigate
these risks. The residual risks are rated, taking into account
their potential impact, as well as the mitigating factors and,
where necessary, corrective action is taken.
The Company does not have an internal audit function. All
the Company’s management functions are delegated to
independent third parties whose controls are monitored
by the Audit Committee and ultimately the Board. It is
therefore felt that there is no need for an internal audit
function. The need for an internal audit function is
reconsidered by the Audit Committee on an annual basis.
The Audit Committee receives service provider ISA3402
controls and internal audit reports which provide a
view on the quality of the control systems operated
within the Company’s third-party service providers,
including the Manager. As a result of the review of these
reports and the further enquires undertaken, the Audit
Committee was satisfied that each service provider had
the control systems in place to continue to deliver their
service effectively.
Cyber security
The Manager has reviewed the cyber security procedures
and controls of its service providers on behalf of the Board,
and the Manager’s Compliance Officer has presented
the Manager’s cyber security procedures to the Audit
Committee. The Audit Committee continues to receive
updates from the Manager to ensure that the procedures
in place are robust and enable ongoing compliance with
the applicable legislation and regulations, as well as with
best practice.
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Non-audit services
In line with the FRC’s guidance, the Audit Committee
maintains a non-audit services policy to help to ensure
that the Auditor’s independence and objectivity is not
impaired. The policy is reviewed annually and outlines
those services that the external Auditor is prohibited from
providing as well as those that require pre-approval from
the Audit Committee.
During the period, no non-audit services have been
provided by BDO. Accordingly, and taking into account
the confirmation from the Auditor on the result of BDO’s
independence reviews, the Audit Committee was satisfied
that BDO remains independent.
Review of Audit Committee effectiveness and
Terms of Reference
The Audit Committee has reviewed its effectiveness, both as
part of a focus on continuing improvement, and specifically
in the context of the responsibilities outlined in it’s Terms of
Reference. Since the year end, the Audit Committee’s Terms
of Reference have been reviewed and can be found on the
Company’s website at www.baronsmeadvcts.co.uk.
Isabel Dolan
Audit Committee Chair
23 December 2024
On the basis of this inspection, the FRC has identified that
BDO needs to significantly improve its audit quality. In
response to these findings, BDO has provided to the FRC,
amongst other things, a Single Quality Plan (SQP) which is in
the process of being implemented and which is subject to
ongoing monitoring by the FRC.
The FRC have stated that they will undertake follow up
reviews, maintain intensive supervision and will review
BDO’s progress against the SQP during 2025.
The Audit Committee has reviewed the detailed FRC
inspection report, and has discussed the FRC’s findings
along with BDO’s action plan with the Audit Partner. BDO
have confirmed to the Audit Committee that they remain
committed to maintaining the highest standards of audit
quality and will continue to work closely with the FRC to
address any areas of concern. These discussions have
informed the setting of materiality and audit testing
parameters as described in the Auditors report on
pages 58 to 64.
The Audit Committee notes the confirmation of progress
that BDO has provided, and will continue to monitor their
progress, including through the FRC inspection in 2025.
In accordance with professional guidelines, the senior Audit
Partner is rotated at least every five years. The current
senior Audit Partner started working with the Company in
2021 and is therefore, set to change in 2026. A resolution
to re-appoint BDO as the Company’s Auditors will be
proposed at the 2025 AGM.
An audit fee of £53,000 (exclusive of VAT) has been agreed
in respect of the year ended 30 September 2024.
Review of effectiveness of external audit
Through meetings with the Auditor, the Audit Committee
has had the opportunity to question and challenge BDO in
respect of their plans, independence and their reports on
issues relating to the audit.
The Audit Committee undertakes a formal review of the
effectiveness of the external audit based on the guidance
issued by the AIC and other sources. The Audit Committee
also considers the results of the FRC’s annual Audit Quality
Reviews as noted above.
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Nomination Committee report
Chair: Ms Fiona Miller Smith
Key responsibilities:
1 Lead the process for the appointments of additional
Directors to the Board as and when appropriate;
2 Consider the resolutions relating to the election and re-
election of Directors; and
3 Consider the orderly succession planning of the Board
and the need to have a balance of skills, experience,
knowledge, and diversity amongst Directors.
Board Composition and Directorate changes
Following an announcement in October 2023, Les Gabb,
a Non-Executive Director and the Chair of the Audit
Committee, retired at the end of December 2023. The
Committee led the search for his replacement, and was
pleased to recommend the appointment of Isabel Dolan as
a Non-Executive Director from 1 November 2023. After Les
retired on 31 December 2023, Isabel took on the role of the
Chair of the Audit Committee.
In June 2024, the Company announced that Susannah
Nicklin would retire from the Board from 30 June 2024, and
the search for a new Board member to replace Susannah is
currently underway and it is expected that an appointment
will be made in Q1 2025.
With these changes in mind, the Nomination Committee
considered the composition of the Board and concluded
that, collectively, the Directors held the skills, experience
and knowledge that are essential to effectively exercise its
duties and responsibilities, it is, however, also taking into
account the desired skills and experience the Committee
plans to add with the next recruitment to the Board.
The Nomination Committee is also responsible for assessing
the time commitment required for each Board appointment
and making sure that the Directors have sufficient time to fulfil
their duties. Following this year’s review, the Committee was
satisfied that all Board members were able to, and did, devote
appropriate amount of time to the business of the Company.
Board evaluation
In order to review the effectiveness of the Board as a
whole, its Committees, the individual Directors (including
the independence of each Director) and the Chair, the
Company undertakes a thorough annual evaluation
process by way of an extensive and tailored questionnaire,
meetings between Board members and the Chair and
completion of self-evaluation questionnaires, confidentially
shared between Directors and the Chair.
The Chair led the evaluation, which covered the functioning
of the Board as a whole, composition and diversity of
the Board, the effectiveness of the Board Committees
and the independence and contribution made by each
Director. Each Director also completed a self-evaluation
questionnaire reflecting on their personal contribution and
commitment as a Director during the period and discussed
any key individual areas of focus with the Chair.
This thorough evaluation process enables each Director
to evaluate, assess and reflect on the Board’s operations,
individual Director contributions and the Company’s
leadership with a view to identify and address any areas
requiring improvement.
This year, some of the key themes that emerged from the
process included developing a deeper understanding of
the views of shareholders and shareholder engagement
and enhancing the AGM in 2025 refreshing this year’s
Annual Report are a key next step on this.
The results of the evaluation process indicated that
the Board continued to function well and there are no
significant concerns raised regarding the effectiveness of
the Board, its Committees and that of individual Directors
and the Chair. Accordingly, the Nomination Committee
remains satisfied with the performance of the Board, its
Committees and that of individual Directors and the Chair.
Succession planning, diversity and new
appointments process
The Nomination Committee reviews the size and structure
of the Board annually. In addition to the current recruitment,
the Directors are also giving thought to future changes to
the Board, beyond the appointment to replace Susannah,
as succession planning remains a key area of focus for the
Board for the year ending 30September 2025.
On 3 September 2024, the Nomination Committee reviewed
and recommended to the Board the adoption of a Diversity
Policy. The Diversity Policy was approved by the Board on
24 October 2024 and in accordance with this Policy, the
Nomination Committee and Board will consider issues of
Board balance and diversity when making new appointments.
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The Nomination Committee aims to attract directors with
diverse skills and experience and recommends appointments
to the Board, based on merit, so vacancies are fulfilled by
the most qualified candidates. When considering future
appointments, the Nomination Committee seeks to promote
diversity of gender, social and ethnic backgrounds as well as
cognitive and personal strengths to aid effective decision
making, and looks for candidates, whose skills, knowledge
and experience align with the Company’s longer-term
strategic aims. The Committee considers the use of external
consultants when shortlisting candidates, if required.
The FCA requires companies like BVT to report against the
following diversity and inclusion targets:
a) At least 40per cent of individuals on the Board to
be women;
b) At least one senior Board position to be held by a
woman (such as Chair, /SID, Chief Executive Officer
(“CEO”) or Chief Financial Officer (“CFO”); and
C) At least one individual on the Board to be from a minority
ethnic background.
Accordingly, in line with Listing Rule 6 Annex 1R, the below
tables in the prescribed format, show the gender and ethnic
background of the Directors at the date of this Report.
Gender identity
or sex
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
(CEO, CFO,
SID and
Chair)*
Men 1 33.3% 1
Women 2 66.6% 1
Not specified/
prefer not to say – –
Ethnic
background
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
(CEO, CFO,
SID and
Chair)*
White British
or other White
(including
minority White
groups) 3 100% 2
Mixed/Multiple
Ethnic Groups – –
Asian/Asian
British – –
Black/African/
Caribbean/Black
British – –
Other ethnic
group, including
Arab – –
Not specified/
prefer not to say – –
* The company is externally managed and does not have executive
management functions, specifically it does not have a CEO or CFO.
The information presented in these tables was collected on a self-
reporting basis.
The Board is pleased to have met the two
recommendations of having at least 40per cent female
representation on the Board and at least one senior
Board position held by a woman. Diversity in all its forms,
including ethnic diversity, is being taken into account as the
Company is searching for a new Board member.
Tenure and Reappointment policy
The Board maintains a Tenure and Reappointment Policy
(the “Policy”), according to which the Board will seek to
recruit a Director on average every 3-4 years which will
result in an average Director tenure of seven years or less;
the Policy covers the whole Board, including the Chair.
The Board intends to maintain a range of experience
from Directors who have served on the Board for varying
periods of time. This approach aims to reserve the
cumulative experience and understanding of the Company,
the commitments and the knowledge of the investment
portfolio amongst Directors, while benefiting from fresh
thinking and promoting diversity.
All Directors will stand for re-election at the next AGM and
accordingly, resolutions to that effect will be proposed to
the shareholders for their approval in March 2025.
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Directors’ meeting attendance
The table below sets out the Directors’ attendance at scheduled, quarterly meetings held during the year, as well as
scheduled Committee meetings held during the year, against the number of meetings each Director was eligible to attend.
Board of Directors Audit Committee
Management
Engagement and
Remuneration
Committee
Nomination
Committee
Eligible Attended Eligible Attended Eligible Attended Eligible Attended
Fiona Miller Smith 4 4 3 3 3 3 2 2
Michael Probin 4 4 3 3 3 3 2 2
Isabel Dolan 4 4 3 3 3 3 1 1
Susannah Nicklin 3 3 2 2 2 2 1 1
Les Gabb 1 1 1 1 1 1 1 1
The Directors also held additional meetings to discuss the valuations of unquoted investments in the portfolio,
the Company’s fundraising offer to shareholders for subscription, the resignation of Directors and changes to the
Board composition.
Fiona Miller Smith
Nomination Committee Chair
23 December 2024
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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.
The law requires the Company’s auditor, BDO, to audit
certain disclosures. Where disclosures have been audited,
they are indicated as such. The auditor’s opinion is included
in the Independent Auditor’s Report on pages58 to 64.
An ordinary resolution to approve the Directors’ Remuneration
Policy and the Directors’ Remuneration Report will be
proposed at the forthcoming AGM on 12March 2025.
Management Engagement and
Remuneration Committee Report
Chair: Mr Michael Probin
Annual Statement from the Chair of
the Management Engagement and
Remuneration Committee
The Management Engagement and Remuneration
Committee (‘MERC’ or ‘the Committee’) is chaired by Michael
Probin and comprises all the Directors of the Company.
As explained in the Corporate Governance Statement on
pages41 to 45, given the size and nature of the Company
it is felt appropriate that all Directors are members of the
Committee. The Company has no executive directors and
considers all the Non-Executive Directors to be independent.
The Committee’s key responsibilities are:
1 Determining and agreeing with the Board the Directors’
remuneration policy and the fees for the Company’s Non-
Executive Directors, within the limits set in the Company’s
Articles of Association;
2 Reviewing the appropriateness of the Manager’s
appointment (including key executives thereof) together
with the terms and conditions of the appointment; and
3 Reviewing (at least annually) the contractual relationship
with the Manager and scrutinising and holding the
Manager to account for its performance.
Manager duties
The Board delegates the execution of the Company’s
investment strategy and the management of assets to the
Manager through the Management Agreement, subject to
the Board being kept informed of all material developments
in the Company’s portfolio.
The Committee remains confident in the Manager’s
capabilities and its ability to continue to achieve results
through finding, making, managing and selling investments
on behalf of the Company and by adapting to changes in
the regulatory environment as necessary.
Relationship with the Manager
The Board continues to work closely with the Manager
concerning the performance of its duties and notes that
Gresham House supports the UK Stewardship Code
and complies with its guidelines regarding proxy voting
and engagement.
The MERC keeps the performance of the Manager under
regular review. In accordance with the requirements of the
AIC Code, the Committee reviews the performance of the
Manager’s obligations under the Management Agreement
and considers the need for any variation to the terms
of the Management Agreement on an annual basis. The
Committee then makes a recommendation to the Board
about the continuing appointment of the Manager. The
Committee also regularly reviews the performance of each
of the other service providers and any matters concerning
their respective appointments.
Remuneration
Each year, when the MERC reviews the Directors’ fees. The
Committee takes into account all of the Directors’ duties and
responsibilities, and how the Board members discharged
them. The Committee also considers whether the fees are
comparable with others in the VCT industry, relative to the
NAV, so that the Board can attract and retain suitably qualified
candidates, in accordance with the Company’s remuneration
policy. In addition, the Committee also has regard to the
workload that individual Directors and the Chair undertake
as members of the Board, feedback from shareholders, the
performance of the Company’s portfolio, and the prevailing
rate of Consumer Price Index (“CPI”) at the time.
The Directors set the Company’s investment strategy as well
as its policy objectives. They then monitor the performance
of the Company against the strategic and policy objectives.
Directors prepare for, and attend, quarterly Board meetings,
and the quarterly valuation meetings, through which they
rigorously review the valuations of
unquoted investee
companies to arrive at appropriate valuations. The Directors
monitor compliance with all regulatory matters including the
various VCT tests that are vital to maintain its VCT qualifying
status. The Directors will assess the requirement for further
fundraisings and attend various Board meetings concerning
the preparation for and implementation of these fundraisings.
They are also responsible for monitoring the key risks to the
Company and for scrutiny of all costs. Where needed, the
Directors usually lead and attend a number of other ad hoc
meetings. This work is in addition to the time taken up in the
formal meetings of the Board.
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In September 2023, the MERC met to review the level of
Directors’ fees. The Committee agreed to increase the Chair’s
fee to £35,000 effective from 1 October 2023. A further
review was also undertaken in December 2023 where it was
proposed, and subsequently approved by the Board, that
all Directors’ fees be increased by 6.7 per cent for CPI as at
30September 2023, effective from 1 October 2023.
In December 2024, the MERC then met to consider the level
of Directors’ fees from 1 October 2024. The Committee
carefully considered the required time commitments, and
agreed that it was appropriate to increase Directors’ base fees
by 1.7 per cent, which was in line with CPI as at 30September
2024. Historically, the fee of the Chair of the Company has
been higher to reflect the additional time commitments, and
in December 2024, the Committee also decided to clearly
define small supplemental fees for the Chair of the Audit and
Risk Committee as well as the Senior Independent Director for
the additional time and responsibilities associated with those
roles, in line with many VCTS of comparable size.
As a result, with effect from 1 October 2024, the Directors’ remuneration changes as follows:
Expected fees for year ending
30 September 2025
Fees for year to
30September 2024
% change
from 2024
to 2025Supplement
Base
NED fee Total Supplement Total
Non Executive Director – £32,200 £32,200 – £31,649 1.7%
Chair £6,000 £32,200 £38,200 £5,696 £37, 345 2.3%
Senior Independent Director £2,000 £32,200 £34,200 – £31,649 8.1%
Audit Committee Chair £2,000 £32,200 £34,200 – £31,649 8.1%
Since June 2024, the Board has consisted of three Directors
while they seek to appoint a fourth Director to the Board.
In order to provide the Directors flexibility and to ensure that the
Directors’ remuneration is fair and comparable to that of other
relevant venture capital trusts, the Directors will be seeking
shareholder approval to increase the current fee cap in the
Company’s Articles of Association to £200,000, through a
resolution to be considered at the Company’s Annual General
Meeting on 12 March 2025.
The Board is of the view that it is in the shareholder’s best
interests that the Directors’ remuneration ensures that the
Company can attract and retain high calibre non-executive
directors with the right mix of skills and experience necessary,
taking into account all of the aspects of the investment and
regulatory environment in which it operates. The benefit of
changing the description of the Directors fee to show a ‘base’
plus a ‘supplement’, is that the Board can distinguish between
any ‘cost of living’ changes (expressed through the CPI) and any
changes stemming from the market or regulatory environment.
Furthermore, the Board will be able to make those distinctions
known to shareholders and other stakeholders in future
Remuneration Reports.
None of the Board members provided advice, services or
was otherwise involved in deciding their own remuneration.
Directors’ remuneration policy
The Board’s policy is that the remuneration of Non-
Executive Directors should reflect the experience of
the Board as a whole, 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 oversee properly the Company and to reflect
the specific circumstances of the Company, the duties
and responsibilities of the Directors and the value and
amount of time committed to the Company’s affairs.
The remuneration policy, as set out in the box above, was last
approved by the members at the AGM held on 1February
2023. The Directors would like to propose a slight amendment
to the policy, to reflect that the remuneration of the Directors
should be fair and comparable to not only other relevant
venture capital trusts, but also to investments companies,
in particular those that are similar in size and have similar
investment objectives and structures. The Directors do not
intend for this to signal any fundamental changes to the
existing remuneration arrangements, and instead, wish to
expand the scope of the remuneration reviews to make sure
that the Committee considers the remuneration across
the comparable universe of investment and venture capital
companies. Therefore, an ordinary resolution to approve the
revised Policy will be proposed at the next AGM in March 2025.
If approved by shareholders, the refreshed policy will continue
for the year ending 30September 2025 and subsequent
years. Regardless of whether the Company proposes any
changes to the Directors’ Remuneration Policy in future, an
Ordinary Resolution to approve it will be put to shareholders at
least once every three years.
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Annual Report and Audited Financial Statements 2024
Fees for any new Non-Executive Director who is appointed
to the Board will be set in accordance with the Company’s
Remuneration Policy.
The Directors are not eligible to receive pension entitlements
or bonuses, and no other benefits are provided. The Directors
are not entitled to participate in any long-term incentive plan
or share option schemes. Fees are paid to the Directors on a
monthly basis and are in no way performance related.
The Directors do not have service contracts with the
Company; however, their appointment letters do include a
three-month notice period. As a result, the Company’s policy
on termination payments is for a payment of three months in
lieu for Directors, who are not requested to work their notice
period. Directors’ terms and conditions for appointment are set
out in letters of appointment which are available for inspection
at the registered office of the Company.
No external party or person provided advice or services in
respect of their consideration of Directors’ remuneration.
Statement of implementation
of the Remuneration Policy in
respect of the financial year ending
30September 2025
The Management Engagement and Remuneration
Committee intends to review Directors’ fees in late 2025,
when it will determine the fees effective from 1 October
2025. In the absence of unforeseen circumstances, the
Committee does not expect any other changes.
Shareholder views on remuneration
Shareholder views in respect of Directors’ remuneration are
communicated at the Company’s AGM and are taken into
account in formulating the Directors’ remuneration policy.
The votes cast by proxy were as follows:
Remuneration report
(2024 AGM voting figures)
Number
of votes
Percentage of
votes cast
For 6,542,419 92.09%
Against 562,249 7.91%
Votes withheld 504,320
Remuneration policy
(2023 AGM voting figures)
Number of
votes
Percentage of
votes cast
For 11,953,443 88.67%
Against 1,527,884 11.33%
Votes withheld 824,519
Annual remuneration report
Scheme interests awarded during the
financial year
The Company does not operate any share incentive
plans. The Directors do not receive any remuneration or
any part of their fee in the form of shares in the Company,
options to subscribe for shares, warrants or any other
equity-based scheme.
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 management agreement, as referred
to in the Directors’ report. The graph below compares, for
the ten years ended 30September 2024, the percentage
change over each period in the share price total return
(assuming all dividends are reinvested) to shareholders
compared to the share price total return of approximately
40 generalist VCTs (source: FE Analytics), which the
Board considers to be the most appropriate benchmark
for investment performance measurement purposes. An
explanation of the performance of the Company is given in
the Chair’s Statement and Manager’s Review on pages7 to
9 and 10 to 13.
At least annually, the Management Engagement
and Remuneration Committee formally reviews the
performance of the Manager and the appropriateness of its
continuing appointment.
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Annual Report and Audited Financial Statements 2024
BVT Share Price and the VCT Generalist Share Price Total Return Performance Graph
BVT Share Price Total Return
VCT Generalist All-Share Total Return Source: FE Analytics
170
160
150
140
130
120
110
100
30/09/2430/09/2330/09/2230/09/2130/09/2030/09/1930/09/1830/09/1730/09/1630/09/1530/09/14
%
Directors’ emoluments for the year (audited) and annual percentage change
The Directors who served in the year received the following emoluments in the form of fees:
Year to 30September Percentage change from
2024
£
2023
£
2022
£
2021
£
2020
£
2023 to
2024
%
2022 to
2023
%
2021 to
2022
%
2020 to
2021
%
Isabel Dolan
1
29,012 N/A N/A N/A N/A N/A N/A N/A N/A
Les Gabb
2
7,912 29,662 28,250 27,4 0 0 27,20 0 N/A 5.0 3.1 0.7
Susannah Nicklin
3
23,737 29,662 28,250 27,40 0 27,20 0 N/A 5.0 3.1 0.7
Michael Probin
4
31,649 29,662 28,250 8,199 N/A 7% 5.0 N/A N/A
Fiona Miller Smith
5
37,345 31,815 29,275 2,283 N/A 17% 8.7 N/A N/A
Total 129,655 120, 801 131,458* 122,082* 110, 8 0 0* 7%
1. Isabel Dolan was appointed as a Non-Executive Director on 1 November 2023 (and subsequently became the Chair of the Audit Committee on
31 December 2023.
2. Les Gabb retired as Non-Executive Director and Chair of the Audit Committee of the Company on 31 December 2023.
3. Susannah Nicklin retired as a Non-Executive Director and the SID of the Company on 30 June 2024. Ms Nicklin also received £191 to cover
travel expenses during the year to 30 September 2024.
4. Michael Probin was appointed as Non-Executive Director of the Company on 14June 2021.
5. Fiona Miller Smith was appointed as Non-Executive Director on 1September 2021 and appointed Chair of the Company on 31March 2022.
*
The total figures for 2022, 2021 and 2020 include fees to past Directors.
There are no further fees to disclose as the Company has no employees, chief executive or executive directors. The figures
detailed in the Directors’ Remuneration Report disclose remuneration only.
Relative importance of spend on Directors’ fees
The below table is required to be included in accordance with The Large and Medium Sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2008. It should be noted that the figures below are not directly
comparable due to:
the payment of the final dividend for the prior year within the current financial year; and
a fundraising which was conducted between December 2023 and April 2024.
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Year to
30September
2024
£
Year to
30September
2023
£
Percentage
change
Total Directors’ fees 129,655 120, 8 01 7.3
Shares repurchased 4,006,000 2,962,000 35.2
Dividends 15,906,000 15,275,000 4.1
NAV 212,183,000 194,892,000 8.9
The Directors’ fees as a percentage of NAV for the year to 30September 2024 were 0.061per cent and for the year to
30September 2023 were 0.062per cent.
Directors’ interests (audited)
There is no requirement under the Company’s Articles
of Association or the terms of their appointment for
Directors to hold shares in the Company. The interests
of the Directors in the shares of the Company (including
their connected persons) as at 30September 2024
were as follows:
30September
2024
Ordinary
10p shares
30September
2023
Ordinary
10p shares
Isabel Dolan
1
37,261 N/A
Les Gabb
2
N/A 167, 509
Susannah Nicklin
3
N/A 56,804
Michael Probin 86,235 59, 311
Fiona Miller Smith 16, 811 8,094
Total 140,307 291,718
1. Isabel Dolan was appointed as a Non-Executive Director on
1 November 2023.
2. Les Gabb retired as Non-Executive Director and Chair of the Audit
Committee of the Company on 31 December 2023.
3. Susannah Nicklin retired as a Non-Executive Director of the
Company on 30 June 2024. Susannah’s interest included those
held by persons closely associated with her.
There have been no changes to these holdings between
30September 2024 and the date of this report.
Approved by the Board of Directors and signed by
Michael Probin
Chair of the Management Engagement
and Remuneration Committee
23 December 2024
02 Directors’ report - Directors’ remuneration report
Annual Report and Audited Financial Statements 2024Annual Report and Audited Financial Statements 202456
Statement of Directors’ responsibilities
Statement of Directors’
responsibilities in respect of
the 2024 Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, they have
elected to prepare the financial statements in accordance
with UK Accounting Standards, including FRS 102 The
Financial Reporting Standard applicable in the UK and
Republic of Ireland.
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 of the Company for that period.
In preparing these financial statements, the Directors
are required to:
select suitable accounting policies and then apply
them consistently;
make judgements and estimates that are reasonable
and prudent;
state whether applicable UK Accounting Standards
have been followed, subject to any material departures
disclosed and explained in the financial statements;
assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern; and
use the going concern basis of accounting unless they
either intend to liquidate the Company or to cease
operations or have no realistic alternative but to do so.
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 its financial statements
comply with the Companies Act 2006. They are responsible
for such internal control as they determine is necessary
to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps
as are reasonably open to them to safeguard the assets
of the Company and to prevent and detect fraud and
otherirregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that complies with that law and
those regulations.
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 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.
Responsibility statement of the
Directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and
profit or loss of the Company taken as a whole; and
the management report, which incorporates the
Chair’s Statement, the Strategic Report and Directors’
report includes a fair review of the development and
performance of the business and the position of the
Company, together with a description of the principal
risks and uncertainties that it faces.
We consider 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 position and performance, business
model and strategy.
On behalf of the Board
Fiona Miller Smith
Chair
23 December 2024
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02 Directors’ report
Annual Report and Audited Financial Statements 2024
Opinion on the financial statements
In our opinion the financial statements:
give a true and fair view of the state of the Company’s
affairs as at 30 September 2024 and of its profit for the
year then ended;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements
of the Companies Act 2006.
We have audited the financial statements of Baronsmead
Venture Trust plc (the ‘Company’) for the year ended 30
September 2024 which comprise the income statement,
the balance sheet, the statement of changes in equity,
the statement of cash flows and notes to the financial
statements, including a summary of significant accounting
policies. The financial reporting framework that has been
applied in their preparation is applicable law and United
Kingdom Accounting Standards, including Financial
Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland (United
Kingdom Generally Accepted Accounting Practice).
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. Our audit
opinion is consistent with the additional report to the
audit committee.
Independence
Following the recommendation of the audit committee,
we were appointed by the Board of Directors on 28 May
2021 to audit the financial statements for the year ended
30 September 2021 and subsequent financial periods.
The period of total uninterrupted engagement including
retenders and reappointments is 4 years, covering the
years ended 30 September 2021 to 30 September 2024.
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 that standard were not provided
to the Company.
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 Venture Capital Trust (“VCT”) compliance
reports prepared by management’s expert during the
year and 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 and the present
uncertainties in economic recovery created by macro-
economic factors.
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.
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.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Independent auditor’s report
to the members of Baronsmead Venture Trust plc
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Overview
2024 2023
Key audit matters Valuation of unquoted investments
4 4
Materiality Company financial statements as a whole
£3.74 m (2023: £3.39 m) based on 2% (2023: 2%) of net assets
adjusted for significant fundraising in the year.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s
system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed
the risk of management override of internal controls, including assessing whether there was evidence of bias by the
Directors that may have represented a risk of material misstatement.
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
(Notes 2.3, 3.3 of the
financial statements)
We consider the valuation
of unquoted investments to
be the most significant audit
area as there is a high level of
estimation uncertainty involved
in determining the unquoted
investment valuations.
There is an inherent risk of
management override arising
from the unquoted investment
valuations being prepared by the
Manager, who is remunerated
based on the value of the net
assets of the VCT, as shown in
note 2.6.
Our unquoted investments valuation testing was risk based
where individual investments were assessed based on
criteria such as fair value at year end exceeding performance
materiality, fair value at year end exceeding performance
materiality and untested in detail in the prior year, movement
between current year and prior year fair value exceeding
performance materiality, change in the valuation methodology
from prior year, change in the multiples (Revenue/Earning)
from prior year by 10% or more, change in the gross enterprise
value from prior year by 10% or more and any change in the
discount/premium from prior year.
For 100% of the unquoted portfolio we:
Considered whether the valuation methodology was
the most appropriate in the circumstances under the
International Private Equity and Venture Capital Valuation
(“IPEV”) Guidelines. Where there was a change in valuation
methodology from prior year, we assessed whether the
change was appropriate
Considered the change in market multiples and discount
applied from prior year and if they were supported by the
performance of the underlying investment
Checked that the valuation was based on recent financial
information and reviewed the arithmetic accuracy
of the valuation
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Key audit matter How the scope of our audit addressed the key audit matter
Valuation of unquoted
investments
(continued)
(Notes 2.3, 3.3 of the
financial statements)
Further, for the unquoted investments samples selected for
detailed testing we:
Re-performed the calculation of the investment
Corroborated and benchmarked key inputs and estimates to
independent information from our own research and against
metrics from the most recent investments
Challenged the assumptions inherent to valuation of
unquoted investments and assessed the impact of the
estimation uncertainty concerning these assumptions
and the disclosure of these uncertainties in the
financial statements
Where appropriate, we performed sensitivity analysis on the
valuation calculations where there was sufficient evidence to
suggest reasonable alternative inputs might exist
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.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Company financial statements
2024
£
2023
£
Materiality £3,744 ,000 £3,390 ,000
Basis for determining materiality 2% of net assets adjusted for significant fundraising in the year.
Rationale for the
benchmarkapplied
In setting materiality, we have had regard to the nature and disposition of the
investment portfolio. Given that the VCT’s portfolio is highly weighted in level
1 and level 2 assets in the fair value hierarchy and also comprising unquoted
investments which would typically have a wider spread of reasonable alternative
possible valuations, we have applied a percentage of 2% of net assets adjusted for
significant fundraising in the year.
Performance materiality £2,808 ,000 £2,540 ,000
Basis for determining
performancemateriality
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 and the level of transactions in the year.
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Reporting threshold
We agreed with the Audit Committee that we would
report to them all individual audit differences in excess
of £187 ,000 (2022: £120 ,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.
Corporate governance statement
The Listing Rules require 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
pages39 to 40 and;
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 page30.
Other Code provisions
Directors’ statement on fair, balanced and understandable set out on page57;
Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on pages22 to 23;
The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on pages46 to 48; and
The section describing the work of the audit committee set out on pages46 to 48.
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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.
Responsibilities of Directors
As explained more fully in the Statement of Directors’
responsibilities, 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.
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Annual Report and Audited Financial Statements 2024
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, the Administrator and those
charged with governance and the Audit Committee; and
Obtaining and understanding of the Company’s policies
and procedures regarding compliance with laws and
regulations; and
we considered the significant laws and regulations to be
the Companies Act 2006, the FCA listing and DTR rules, the
principles of the UK Corporate Governance Code, industry
practice represented by the Statement of Recommended
Practice: Financial Statements of Investment Trust
Companies and Venture Capital Trusts (“the SORP”) 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 the Manager, the Administrator 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 during the year and 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 meeting 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 with the Manager, the Administrator and those
charged with governance and the Audit Committee
regarding any known or suspected instances of fraud;
Obtaining an understanding of the VCT policies and
procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks
related to fraud.
Review of minutes of meeting of those charged
with governance for any known or suspected
instances of fraud;
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.
Our procedures in respect of the above included:
In addressing the risk of valuation of unlisted investments,
the procedures set out in the key audit matter section in
our report were performed;
In addressing the risk of management override
of control, we:
– Tested journals posted in the preparation of the
financial statements which met a defined risk criteria by
agreeing to supporting documentation and evaluating
whether there was evidence of bias by the Manager and
the Administrator that represented a risk of material
misstatements due to fraud.
– Incorporated unpredictability into our testing by
selecting a sample of immaterial expenses that would
not otherwise have been selected for testing
– Reviewed the significant judgements made in the
unlisted investment valuations and considering
whether the valuation methodology is the
most appropriate;
– Considered any indicators of bias in our audit
as a whole; and
– Performed a review of unadjusted audit differences, if
any, for indications of bias or deliberate misstatement.
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Annual Report and Audited Financial Statements 2024
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.
Vanessa Bradley
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
23 December 2024
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members, who were deemed to have the 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.
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Annual Report and Audited Financial Statements 2024
65Annual Report and Audited Financial Statements 2024
02 Directors’ report - Independent auditor’s report
Financial
Statements
03
Income statement
For the year ended 30September 2024
Year ended
30September 2024
Year ended
30September 2023
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains/(losses) on investments 2.3 – 14,023 14,023 – (3,428) (3,428)
Income 2.5 3,572 – 3,572 2,486 – 2,486
Investment management fee
and performance fee 2.6 (900) (2,699) (3,599) (885) (2,657) (3,542)
Other expenses 2.6 (701) – (701) (659) – (659)
Profit/(loss) before taxation 1,971 11,324 13,295 942 (6,085) (5,143)
Taxation 2.9 – – – – – –
Profit/(loss) for the year,
being total comprehensive
income for the year 1,971 11,324 13,295 942 (6,085) (5,143)
Return per ordinary share:
Basic and diluted 2.2 0.53p 3.03p 3.56p 0.28p (1.80p) (1.52p)
All items in the above statement derive from continuing operations.
There are no recognised gains and losses other than those disclosed in the Income statement.
The revenue column of the Income statement includes all income and expenses. The capital column accounts for the
realised and unrealised profit or loss on investments and the proportion of the management fee charged to capital.
The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in
accordance with Financial Reporting Standards (
“
FRS”) 102. The supplementary revenue return and capital return columns
are prepared in accordance with the Statement of Recommended Practice issued by the Association of Investment
Companies (“AIC SORP”).
The notes on pages71 to 87 form part of these financial statements.
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03 Financial Statements
Annual Report and Audited Financial Statements 2024
Statement of changes in equity
For the year ended 30September 2024
Non-distributable reserves Distributable reserves
Notes
Called-up
share
capital
£’000
Share
premium
£’000
Revaluation
reserve
£’000
Capital
reserve*
£’000
Revenue
reserve
£’000
Total
£’000
At 1 October 2023 38,162 – 20,357 133,959 2,414 194,892
Profit after taxation – – 10,496 828 1,971 13,295
Net proceeds of share
issues, share buybacks &
sale of shares from treasury 4,284 20,036 – (4,414) – 19,906
Dividends paid 2.4 – – – (15,154) (752) (15,906)
Share premium
cancellation costs – – – (4) – (4)
At 30 September 2024 42,446 20,036 30,853 115,215 3,633 212,183
For the year ended 30September 2023
Non-distributable reserves Distributable reserves
Notes
Called-up
share
capital
£’000
Share
premium
£’000
Revaluation
reserve
£’000
Capital
reserve*
£’000
Revenue
reserve
£’000
Total
£’000
At 1 October 2022 34,205 108,435 16, 912 31,786 2,487 193,825
(Loss)/profit after taxation – – 3,445 (9,530) 942 (5,143)
Net proceeds of share
issues, share buybacks &
sale of shares from treasury 3,957 20,346 – (2,801) – 21,502
Dividends paid 2.4 – – – (14,260) (1,015) (15,275)
Cancellation of Share
Premium – (128 ,781) – 128 ,781 – –
Share premium
cancellation costs – – – (17) – (17)
At 30 September 2023 38 ,162 – 20,357 133,959 2,414 194,892
* Of the distributable reserves noted above £52,069,000 (2023: £79,384,000) is not available for dividend distribution due to HMRC VCT rules.
The notes on pages71 to 87 form part of these financial statements.
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03 Financial Statements
Annual Report and Audited Financial Statements 2024
Balance sheet
As at 30September 2024 Company Number: 03504214
Notes
As at
30September
2024
£’000
As at
30September
2023
£’000
Fixed assets
Investments 2.3 212,252 195,159
Current assets
Debtors 2.7 463 208
Cash at bank and on deposit 752 680
1,215 888
Creditors (amounts falling due within one year) 2.8 (1,284) (1,155)
Net current liabilities (69) (267)
Net assets 212,18 3 194,892
Capital and reserves
Called-up share capital 3.1 42,446 38 ,162
Share premium 3.2 20,036 –
Capital reserve 3.2 115,215 133,959
Revaluation reserve 3.2 30,853 20,357
Revenue reserve 3.2 3,633 2,414
Equity shareholders’ funds 212,183 194,892
Net asset valueper share
– Basic and diluted 2.1 54.84p 55.44p
The notes on pages71 to 87 form part of these financial statements.
The financial statements were approved, and authorised for issue, by the Board of Directors of Baronsmead Venture Trust
plc on 23 December 2024 and were signed on its behalf by:
Fiona Miller Smith
Chair
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03 Financial Statements
Annual Report and Audited Financial Statements 2024
Statement of cash flows
For the year ended 30September 2024
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Cash flows from operating activities
Investment income received 1,963 1,760
Deposit interest received 38 86
Investment management fees paid (3,523) (3,537)
Other cash payments (626) (661)
Net cash outflow from operating activities (2,148) (2,352)
Cash flows from investing activities
Purchases of investments (34,994) (94,084)
Disposals of investments 33,246 55,827
Net cash outflow from investing activities (1,748) (38,257)
Financing activities
Gross proceeds of share issues 25,000 25,038
Gross proceeds from sale of shares from treasury 8 523
Gross cost of share buybacks (4,007) (2,951)
Costs of share issues (1,075) (1,083)
Costs of share buybacks (31) (14)
Equity dividends paid (15,906) (15,275)
Other costs charged to capital (21) –
Net cash inflow from financing activities 3,968 6,238
Increase/(decrease) in cash 72 (34,371)
Reconciliation of net cash flow to movement in net cash
Increase/(decrease) in cash 72 (34,371)
Opening cash at bank and on deposit 680 35,051
Closing cash at bank and on deposit 752 680
Reconciliation of profit before taxation to net cash outflow from operating activities
Profit/(loss) before taxation 13,295 (5,143)
(Gains)/losses on investments (14,023) 3,428
Income reinvested (1,322) (563)
Increase in debtors (255) (77)
Increase in creditors 157 3
Net cash outflow from operating activities (2,148) (2,352)
The notes on pages71 to 87 form part of these financial statements.
70
03 Financial Statements
Annual Report and Audited Financial Statements 2024
Notes to the financial statements
For the year ended 30September 2024
We have grouped notes into sections under three key categories:
1. Basis of preparation
2. Investments, performance and shareholder returns
3. Other required disclosures
The key accounting policies have been incorporated throughout the notes to the financial statements adjacent to the
disclosure to which they relate. All accounting policies are included within an outlined box.
1 Basis of preparation
1.1 Basis of accounting
These Financial Statements have been prepared under FRS 102 ‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland’ and in accordance with the Statement of Recommended Practice (“SORP”) for investment trust
companies and venture capital trusts issued by the Association of Investment Companies (“AIC”) in November 2014 and
last updated in July 2022 and on the assumption that the Company maintains VCT status with HMRC.
The application of the Company’s accounting policies requires judgement, estimation and assumptions about the
carrying amount of assets and liabilities. These estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
After making the necessary enquiries, including those made during the preparation of the viability statement in the
Strategic Report, the Directors believe that it is reasonable to expect that the Company will continue to be able to meet
its liabilities as and when they fall due for a period of at least 12 months, therefore it is appropriate to apply the going
concern basis in preparing the financial statements.
The Directors acknowledge the current economic and geo-political environment, however the Directors consider the
Company to be well placed to continue to operate for at least 12 months from the date of this report. The Company has
no debt and has sufficient liquidity to meet both its contracted expenditure and its discretionary cash outflows, including
to invest in new opportunities as they arise. The Directors note that the Company’s third-party suppliers are not
experiencing any significant operational difficulties affecting their respective services to the Company. The Directors
have also assessed the Company’s ability to cover its annual running costs under several liquidity scenarios in which
the value of liquid assets (including AIM-traded investments and OEICs) has been subject to sensitivity analysis, taking
into account the current economic environment and other, plausibly possible changes in performance. It is therefore
appropriate to apply the going concern basis in preparing the financial statements.
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03 Financial Statements
Annual Report and Audited Financial Statements 2024
2 Investments, performance and shareholder returns
2.1 Net asset valueper share
Number of
ordinary shares
Net asset value per
share attributable
Net asset value
attributable
30September
2024
number
30September
2023
number
30September
2024
pence
30September
2023
pence
30September
2024
£’000
30September
2023
£’000
Ordinary shares (basic) 386,878,657 351,534,507 54.84 55.44 212 ,183 194,892
2.2 Returnper share
Weighted average number
of ordinary shares
Return per
ordinary share Net profit after taxation
30September
2024
number
30September
2023
number
30September
2024
pence
30September
2023
pence
30September
2024
£’000
30September
2023
£’000
Revenue 373,425,403 337,263,955 0.53 0.28 1,971 942
Capital 373,425,403 337, 263,955 3.03 (1.80) 11,324 (6,085)
Total 3.56 (1.52) 13,295 (5,143)
2.3 Investments
The Company has fully adopted sections 11 and 12 of FRS 102.
Purchases or sales of investments are recognised at the date of transaction at fair value.
Investments are subsequently measured at fair value through profit and loss. For listed securities this is either bid price
or the last traded price, depending on the convention of the market on which the investment is traded.
In respect of collective investment vehicles, which consists of investments in open-ended investment companies
authorised in the UK, this is the published price.
In respect of unquoted investments, these are valued at fair value by the Directors using methodology which is
consistent with the International Private Equity and Venture Capital guidelines (“IPEV Guidelines”).
Judgements
The key judgements in the fair valuation process are:
i) The Manager’s determination of the appropriate application of the IPEV Guidelines to each unquoted investment;
ii) The Directors’ consideration of whether each fair value is appropriate following detailed review and challenge.
The judgement applied in the selection of the methodology used for determining the fair value of each unquoted
investment can have a significant impact upon the valuation.
72
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Estimates
The key estimate in the financial statements is the determination of the fair value of the unquoted investments. This
estimate is key as it significantly impacts the valuation of the unlisted investments at the balance sheet date. The fair
valuation process involves estimates using inputs that are unobservable (for which market data is unavailable). Fair
value estimates are cross-checked to alternative estimation methods where possible to improve the robustness of the
estimate. As the valuation outcomes may differ from the fair value estimates a price sensitivity analysis is provided in
Other Price Risk Sensitivity in note 3.3 on pages83 to 87. The risk of an over or underestimation of fair values is greater
when methodologies are applied using more subjective inputs.
Assumptions
The determination of fair value for unquoted investments involves key assumptions dependent upon the valuation
methodology used. The primary methodologies applied are:
i) Cost of recent investment
ii) Multiple basis.
The enterprise value of the investment may be determined by applying a suitable price-earnings ratio, revenue or
gross profit multiple to that company’s historic, current or forecast earnings before interest, tax, depreciation and
amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value
being adjusted to reflect points of difference identified by the Manager compared to the sector including, inter alia,
scale and liquidity.
iii)
Offer less 10 per cent.
Where Heads of Terms have been agreed or a formal offer received from a third party for an investee company, and it is
the intention of the Manager to accept it, a discount of 10% is applied to the offer price.
The nature of the unquoted portfolio will influence the valuation technique applied. The valuation approach recognises
that, as stated in the IPEV Guidelines, the price of a recent investment, if resulting from an orderly transaction, generally
represents fair value as at the transaction date and may be an appropriate starting point for estimating fair value at
subsequent measurement dates.
The Cost of recent investment approach involves holding the investment at the price set in the latest available funding
round, taking into account, amongst other things, factors such as the time lapsed since the last round.
However, consideration is given to the facts and circumstances as at the subsequent measurement date, including
changes in the market or performance of the investee company. Milestone analysis is used where appropriate to
incorporate the operational progress of the investee company into the valuation. Additionally, the background to the
transaction must be considered.
As a result, various multiples based techniques are employed to assess the valuations particularly in those
companies with established revenues. All valuations are cross-checked for reasonableness by employing relevant
alternative techniques.
The Multiple approach involves more subjective inputs than the Cost of recent investment and Offer approaches and
therefore presents a greater risk of over or under estimation
The key assumptions for the multiples basis are:
the selection of companies on which to determine a basket of comparative multiples;
the determination of maintainable historic or forecast earnings, revenue or gross profit;
the appropriateness of the discount magnitude applied for reduced liquidity and other qualitative factors;
identifying surplus cash.
Gains and losses arising from changes in the fair value of the investments are included in the Income statement for the
year as a capital item. Transaction costs on acquisition are included within the initial recognition and the profit or loss on
disposal is calculated net of transaction costs on disposal.
All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in
the Income statement.
73
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
The methods of fair value measurement are classified into a hierarchy based on reliability of the information used to
determine the valuation.
Level 1 – Fair value is measured based on quoted prices in an active market.
Level 2 – Fair value is measured based on directly observable current market prices or indirectly being derived
from market prices.
Level 3 – Fair value is measured using a valuation technique that is not based on data from an observable market.
As at
30September
2024
£’000
As at
30September
2023
£’000
Level 1
Investments traded on AIM 65,966 60,384
Level 2
Collective investment vehicles 95,060 87,969
Level 3
Unquoted investments 51,226 46,806
212,252 195,159
For the year ended 30September 2024
Level 1 Level 2 Level 3
Traded
on AIM
£’000
Collective
investment
vehicles
£’000
Unquoted
£’000
Total
£’000
Opening book cost 48,904 73,895 52,003 174, 8 02
Opening unrealised appreciation/(depreciation) 11,4 8 0 14,074 (5,197) 20,357
Opening fair value 60,384 87,969 46,806 195,159
Movement in the year:
Transfer between levels (604) – 604 –
Purchases at cost 3,853 23,317 9,146 36,316
Sale – proceeds (7, 558) (25,465) (223) (33,246)
Sale – realised gains/(losses) on sales 1,440 1,461 (2,115) 786
Unrealised gains/(losses) realised during the year 4,683 (222) (1,720) 2,741
Increase/(decrease) in unrealised appreciation 3,768 8,000 (1,272) 10,496
Closing fair Value 65,966 95,060 51,226 212,252
Closing book cost 50,718 72,986 57,695 181,399
Closing unrealised appreciation/(depreciation) 15,248 22,074 (6,469) 30,853
Closing fair Value 65,966 95,060 51,226 212,252
Equity shares 65,966 – 6,440 72,406
Preference shares – – 35,085 35,085
Loan notes – – 9,701 9,701
Collective investment vehicles – 95,060 – 95,060
Closing fair Value 65,966 95,060 51,226 212,252
74
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
For the year ended 30September 2023
Level 1 Level 2 Level 3
Traded
on AIM
£’000
Listed on
LSE
£’000
Collective
investment
vehicles
£’000
Unquoted
£’000
Total
£’000
Opening book cost 48,212 2,315 42,931 49,397 142,855
Opening unrealised appreciation/(depreciation) 8,607 (2,291) 11, 8 09 (1,213) 16,912
Opening fair value 56,819 24 54,740 48 ,184 159,767
Movement in the year:
Transfer between levels (1,410) – – 1,410 –
Purchases at cost 2,136 – 84,204 8,307 94,647
Sale – proceeds (541) – (53,240) (2,046) (55,827)
Sale – realised gains/(losses) on sales 123 (24) – 95 194
Unrealised gains/(losses) realised during the year 384 (2,291) – (5,160) (7,0 67)
Increase/(decrease) in unrealised appreciation 2,873 2,291 2,265 (3,984) 3,445
Closing fair Value 60,384 – 87,969 46,806 195,159
Closing book cost 48,904 – 73,895 52,003 174, 802
Closing unrealised appreciation/(depreciation) 11,4 8 0 – 14,074 (5,197) 20,357
Closing fair Value 60,384 – 87,969 46,806 195,159
Equity shares 60,384 – – 6,834 67, 218
Preference shares – – – 29,975 29,975
Loan notes – – – 9,997 9,997
Collective investment vehicles – – 87,969 – 87, 969
Closing fair Value 60,384 – 87,969 46,806 195,159
The gains and losses included in the above table have all been recognised in the Income statement on page67.
In the year ending 30 September 2024, two investments held, Fulcrum Utility Services Ltd and LoopUp Group plc
previously Level 1 were transferred to Level 3 following their delistings from AIM.
In the year ending 30September 2023, an investment held, Deepverge plc previously Level 1 was transferred to Level 3
following its delisting from AIM.
The Company received £7.8 million (2023: £2.6 million) from investments sold in the year, excluding liquidity funds
redeemed of £25.5 million (2023: £53.2 million). The book cost of these investments when they were purchased was
£5.5million (2023: £9.5 million). These investments have been revalued over time and until they were sold any unrealised
gains or losses were included in the fair value of the investments.
75
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
2.4 Dividends
Equity dividends payable are recognised when the shareholders’ right to receive payment is established. For interim
dividends this is when they are paid and for final dividends this is when they are approved by shareholders.
Year ended
30September 2024
Year ended
30September 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Amounts recognised in the year:
For the year ended 30 September 2024
Interim dividend of 1.75p per ordinary
share paid on 9 September 2024 388 6,405 6,793 – – –
For the year ended 30 September 2023
Final dividend of 2.50p per ordinary share
paid on 8 March 2024 364 8,749 9,113 – – –
Interim dividend of 1.75p per ordinary
share paid on 9 September 2024 – – – 352 5,802 6,154
For the year ended 30 September 2022
Final dividend of 2.75p per ordinary share
paid on 3 March 2023 – – – 663 8,458 9,121
752 15,154 15,906 1,015 14,260 15,275
2.5 Income
Interest income on loan notes and dividends on preference shares are accrued on a daily basis. Provision is made
against this income where recovery is doubtful.
Where the terms of unquoted loan notes only require interest or a redemption premium to be paid on redemption, the
interest and redemption premium is recognised as income once redemption is reasonably certain. Until such date
interest is accrued daily and included within the valuation of the investment. When a redemption premium is designed
to protect the value of the instrument holder’s investment rather than reflect a commercial rate of revenue return the
redemption premium should be recognised as capital. The treatment of redemption premiums is analysed to consider
if they are revenue or capital in nature on a company by company basis. A redemption premium of £nil (2023: £nil) was
received for the year ended 30September 2024.
Income from fixed interest securities and deposit interest is included on an effective interest rate basis.
Dividends on quoted shares are recognised as income when the related investments are marked ex-dividend and where
no dividend date is quoted, when the Company’s right to receive payment is established.
76
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Year ended
30September 2024
Year ended
30September 2023
Quoted
securities
£’000
Unquoted
securities
£’000
Total
£’000
Quoted
securities
£’000
Unquoted
securities
£’000
Total
£’000
Income from investments
Dividend income 2,153 – 2,153 1,276 – 1,276
Interest income 1,038 352 1,390 741 382 1,123
3,191 352 3,543 2,017 382 2,399
Other income
Deposit interest 28 87
Other interest 1 –
Total income 3,572 2,486
All investments have been included at fair value through profit or loss on initial recognition, therefore all investment income
arises on investments at fair value through profit or loss.
2.6 Investment management fee and other expenses
All expenses are recorded on an accruals basis.
Management fees are allocated 25per cent income and 75per cent capital derived in accordance with the Board’s expected
split between long term income and capital returns. Performance fees are allocated 100per cent against capital.
Year ended
30September 2024
Year ended
30September 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management fee 900 2,699 3,599 885 2,657 3,542
Performance fee – – – – – –
900 2,699 3,599 885 2,657 3,542
The management agreement may be terminated by either party giving 12 months’ notice of termination.
The Manager, Gresham House Asset Management Ltd, receives a fee of 2per centper annum of the net assets of the
Company, calculated and payable on a quarterly basis. The WS Gresham House Equity Funds are also managed by
Gresham House. Arrangements are in place to avoid the double charging of fees.
The Manager is entitled to a performance fee if at the end of any calculation period, the total return on shareholders’ funds
exceeds the threshold of the higher of 4per cent or base rate plus 2per cent on shareholders’ funds (calculated on a
compound basis). The Manager is entitled to 10per cent of the excess. The amount of any performance fee which is paid in
respect of a calculation period shall be capped at 5per cent of shareholders’ funds at the end of the period.
Amounts payable to the Manager at the year end are disclosed in note 2.8.
77
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Other expenses
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Directors’ fees 130 121
Secretarial and accounting fees paid to the Manager 164 155
Auditor’s fees for statutory audit (including VAT) 64 61
Other 343 322
701 659
Information on directors’ remuneration is given in the directors’ emoluments table on page55. During the year there was
no remuneration due to the auditors for non-audit services (2023: £nil).
2.7 Debtors
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Prepayments and accrued income 463 208
463 208
2.8 Creditors (amounts falling due within one year)
Year ended
30September
2024
£’000
Year ended
30September
2023
£’000
Management, secretarial and accounting fees due 1,139 1,019
Share premium cancellation costs – 17
Amounts due to brokers – 11
Other creditors 145 108
1,284 1,155
78
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
2 . 9 T a x
UK corporation tax payable is provided on taxable profits at the current rate.
Provision is made for deferred taxation, without discounting, on all timing differences and is calculated using
substantively enacted tax rates.
This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of the underlying timing differences can be deducted.
A reconciliation of the tax (credit)/charge to the profit before taxation is shown below:
Year ended
30September 2024
Year ended
30September 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Profit/(loss) before taxation 1,971 11,324 13,295 942 (6,085) (5,143)
Corporation tax at a rate of 25.0 per cent
(2023: 22.0 per cent) 493 2,831 3,324 207 (1,338) (1,131)
Effect of:
Non-taxable losses – (3,506) (3,506) – 754 754
Non-taxable dividend income (538) – (538) (281) – (281)
Losses carried forward 45 675 720 74 584 658
Tax charge/(credit) for the year – – – – – –
At 30September 2024, the Company had tax losses of £24,545,649 (2023: £21,849,853). A deferred tax asset of
£6,136,412 (2023: £5,462,463) has not been recognised because the Company is not expected to generate taxable income
in a future period in excess of the deductible expenses of that future period. Accordingly the Company is unlikely to be able
to reduce future tax liabilities through the use of existing surplus expenses. Due to the Company’s status as a VCT, and the
intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not
provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.
79
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
3 Other required disclosures
3.1 Called-up share capital
Allotted, called-up and fully paid:
For the year ended 30September 2024 £’000
381,621,257 ordinary shares of 10p each listed at 30 September 2023 38 ,162
42,843,562 ordinary shares of 10p each issued during the year 4,284
424,464,819 ordinary shares of 10p each listed at 30 September 2024 42,446
30,086,750 ordinary shares of 10p each held in treasury at 30 September 2023 (3,009)
7,514,412 ordinary shares of 10p each repurchased during the year and held in treasury (751)
15,000 ordinary shares of 10p each sold from treasury during the year 2
37,586,162 ordinary shares of 10p each held in treasury at 30 September 2024 (3,758)
386,878,657 ordinary shares of 10p each in circulation at 30 September 2024 38,688
For the year ended 30 September 2023 £’000
342,045,641 ordinary shares of 10p each listed at 30 September 2022 34,205
39,575,616 ordinary shares of 10p each issued during the year 3,957
381,621,257 ordinary shares of 10p each listed at 30 September 2023 38,162
25,827,475 ordinary shares of 10p each held in treasury at 30 September 2022 (2,583)
5,196,571 ordinary shares of 10p each repurchased during the year and held in treasury (520)
937,296 ordinary shares of 10p each sold from treasury during the year 94
30,086,750 ordinary shares of 10p each held in treasury at 30 September 2023 (3,009)
351,534,507 ordinary shares of 10p each in circulation* at 30 September 2023 35,153
* Carrying one vote each.
The 42,843,562 (2023: 39,575,616) ordinary shares were issued at an average price of 58.352p (2023: 63.268p).
During the year, the Company bought back 7,514,412 (2023: 5,196,571) ordinary shares and sold from treasury 15,000
(2023: 937,296) shares, representing 2.1 per cent (2023: 1.3 per cent) of the ordinary shares in circulation at the beginning
of the financial year.
Treasury shares
When the Company reacquires its own shares, they are held as treasury shares and not cancelled where permitted
under legislation.
Shareholders have authorised the Board to sell treasury shares at a discount to the prevailing NAV subject to the
following conditions:
It is in the best interests of the Company;
Demand for the Company’s shares exceeds the shares available in the market;
A full prospectus must be produced if required; and
HMRC will not consider these ‘new shares’ for the purposes of the purchasers’ entitlement to initial income tax relief.
80
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
3.2 Reserves
Gains and losses on realisation of investments of a capital nature are dealt with in the capital reserve. Purchases of the
Company’s own shares to be either held in treasury or cancelled are also funded from this reserve. When shares are
reissued from treasury the original cost is allocated to the capital reserve with any gains allocated to share premium.
75per cent of management fees are allocated to the capital reserve in accordance with the Board’s expected split
between long term income and capital returns.
For the year ended 30September 2024
Distributable reserves Non-distributable reserves
Capital
reserve
†
£’000
Revenue
reserve
£’000
Total
£’000
Share
premium
£’000
Revaluation
reserve*
£’000
Total
£’000
At 1 October 2023 133,959 2,414 136,373 – 20,357 20,357
Gross proceeds of share issues – – – 20,716 – 20,715
Purchase of shares for treasury (4,007) – (4,007) – – –
Sale of shares from treasury 8 – 8 – – –
Expenses of share issue and buybacks (20) – (20) (680) – (680)
Expenses in relation to cancellation of
Share Premium (4) – (4) – – –
Cost of share issues – Advisor Fees (395) – (395) – – –
Reallocation of prior year unrealised
gains/losses 2,741 – 2,741 – (2,741) (2,741)
Realised gain/(loss) on disposal of
investments# 786 – 786 – – –
Net increase in value of investments# – – – – 13,237 13,237
Management fee charged to capital# (2,699) – (2,699) – – –
Profit after taxation# – 1,971 1,971 – – –
Dividends paid in the year (15,154) (752) (15,906) – – –
At 30 September 2024 115,215 3,633 118,848 20,036 30,853 50,888
81
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
For the year ended 30September 2023
Distributable reserves Non-distributable reserves
Capital
reserve
†
£’000
Revenue
reserve
£’000
Total
£’000
Share
premium
£’000
Revaluation
reserve*
£’000
Total
£’000
At 1 October 2022 31,786 2,487 34,273 108,435 16,912 125,347
Gross proceeds of share issues – – – 21,081 – 21,081
Cancellation of Share Premium 128,781 – 128,781 (128,781) – (128,781)
Purchase of shares for treasury (2,962) – (2,962) – – –
Sale of shares from treasury 523 – 523 – – –
Expenses of share issues and buybacks (362) – (362) (735) – (735)
Share premium cancellation costs (17) – (17) – – –
Reallocation of prior year unrealised
losses/gains ( 7,067) – (7, 067) – 7,0 67 7,0 67
Realised gain on disposal of investments
#
194 – 194 – – –
Net decrease in value of investments
#
– – – – (3,622) (3,622)
Management fee charged to capital
#
(2,657) – (2,657) – – –
Taxation relief from capital expenses
#
– – – – – –
Profit after taxation
#
– 942 942 – – –
Dividends paid in the year (14,260) (1,015) (15,275) – – –
At 30 September 2023 133,959 2,414 136,373 – 20,357 20,357
†
Of the distributable reserves noted above £52,069,000 (2023: £79,384,000) is not available for dividend distribution due to HMRC VCT rules.
* Changes in fair value of investments are dealt with in this reserve.
#
The total of these items is £13,295,000 (2023: loss £5,143,000), which agrees to the total profit for the year.
Distributable reserves may also include any net unrealised gains on investments whose prices are quoted in an active
market and deemed readily realisable in cash.
Share premium is recognised net of issue costs.
The Company does not have any externally imposed capital requirements.
82
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
3.3 Financial instruments risks
The Company’s financial instruments comprise equity and fixed interest investments, cash balances and liquid resources
including debtors and creditors. The Company holds financial assets in accordance with its investment policy to invest in a
diverse portfolio of UK growth businesses.
The Company’s investing activities expose it to a range of financial risks. These key risks and the associated risk
management policies to mitigate these risks are described below.
Market risk
Market risk includes price risk on investments and interest rate risk on investments and other financial assets and liabilities.
Price risk
The investment portfolio is managed in accordance with the policies and procedures described in the Strategic Report of
the full Audited Annual Report and Financial Statement.
Investments in companies listed on the AIM market usually involve a higher risk than investments in larger companies
quoted on a recognised stock exchange. The spread between the buying and selling price of such shares may be wide
and the price used for valuation may be limited and many may not be achievable. The valuation of the portfolios and
opportunities for realisation of AIM-traded investments within the portfolios may also depend on stock market conditions.
The Company aims to reduce these risks by diversifying the portfolio across business sectors and asset classes. The
Board monitors the portfolio on a quarterly basis.
Investments in unquoted companies, by their nature, usually involve a higher degree of risk than investments in companies
quoted on a recognised stock exchange. The fair valuation of these unquoted investments is influenced by the estimates,
assumptions and judgements made in the fair valuation process (see 2.3 above).
Price risk sensitivity
The fair valuation of unquoted investments is influenced by the estimates, assumptions and judgements made in
the fair valuation process (see note 2.3). A sensitivity analysis is provided below which recognises that the valuation
methodologies employed involve different levels of subjectivity in their inputs. The sensitivity analysis below applied a
wider range of input variable sensitivity to the Multiple method due to the increased subjectivity involved in the use of this
method compared to the rebased cost method, which refers to the price of a recent investment.
83
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
As at 30September 2024
Security Valuation basis Key variable inputs
Fair
Value
£’000s
Sensitivity
%
Impact
£’000s
Impact
pence
per
share
Impact
% of net
assets
Unquoted
Multiple Estimated sustainable revenue/
EBITDA
Selection of comparable
companies
Application of illiquidity discount 50,140 +/-20% 10,028 2.6 +/-4.7
AIM
Bid price 61,905 +/-20% 12, 381 3.2 +/-5.8
Traded price 5,145 +/-20% 1,029 0.3 +/-0.5
Gresham
House
Equity
Funds
Published price 68,500 +/-20% 13,700 3.5 +/-6.5
As at 30September 2023
Security Valuation basis Key variable inputs
Fair
Value
£’000s
Sensitivity
%
Impact
£’000s
Impact
pence
per
share
Impact
% of net
assets
Unquoted
Rebased cost Latest funding round price 3,438 +/-10 % 344 0.1 +/-0.2
Multiple Estimated sustainable revenue/
EBITDA
Selection of comparable
companies
Application of illiquidity discount 42,397 +/-20% 8,479 2.4 +/-4.4
AIM
Bid price 54,918 +/-20% 10,984 3.1 +/-5.6
Traded price 5,467 +/-20% 1,093 0.3 +/-0.6
Gresham
House
Equity
Funds
Published price 67,939 +/-20% 13,588 3.9 +/-7.0
84
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Key variable inputs/valuation bases
The key variable inputs applicable to each valuation basis will vary dependent on the particular circumstances of each
unquoted company valuation. Where there has been a recent transaction, such as an initial investment being made into
the company, or where there has been a subsequent external funding round, the key variable input will be the last funding
round price. Where this is not the case, the valuation has been based on a multiple of estimated sustainable revenue/
EBITDA. An explanation of each of the key variable inputs is provided below and includes an indication of the range in value
for each input, where relevant.
Latest funding round price
The latest funding round price is the key variable input in the valuation of a company when there has been a recent
investment either by the Company or by another investor. This transaction provides evidence of the price an independent
third party would be willing to pay for the investment. There is lower estimation uncertainty where this third party is an
external investor, and higher estimation uncertainty where this is an internal investor (i.e. where the investor already has an
investment in the company).
Estimated sustainable revenue/EBITDA
The selection of sustainable revenue or EBITDA will depend upon whether the company is sustainably profitable or not,
and where it is not then revenues will be used in the valuation. The valuation approach may use prior year actuals, the last
12 months, or a forecast of revenue/EBITDA where deemed appropriate. The valuation approach will typically assess
companies based on the prior year actuals or last 12 months of revenue or EBITDA, as this represents the most recently
available trading information and therefore is viewed as the most reliable. Where the company has a history of accurate
forecasting, or where there is a change in circumstance at the business which will impact revenue/EBITDA going forward,
then a forecast or budget will be deemed most appropriate.
Selection of comparable companies or indices
The selection of comparable companies or indices is assessed individually for each investment at the point of investment,
and at each valuation thereafter. The key criteria in selecting appropriate comparable companies or indices are the
industry sector, the business model, and the respective revenue/EBITDA growth rates of the company. Typically up to 15
comparable companies or indices will be selected for each investment to derive the adopted revenue/EBITDA multiple.
The Multiples can be derived from either listed companies with similar characteristics or recent comparable transactions.
The value of the unquoted element of the portfolio may therefore also indirectly be affected by price movements on the
listed exchanges.
Application of illiquidity discount
An illiquidity discount is applied to the majority of unquoted investments, reflecting that the Company usually holds a
minority stake and that the realisation of the investment may require cooperation on the timing and sale price from other
stakeholders. A standard illiquidity discount of 25 per cent is applied on all unquoted investments reflecting that the
Company usually holds a minority stake and that the realisation of the investment may require cooperation on the timing
and sale price from other stakeholders.
85
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Interest rate risk
The Company has the following investments in fixed and floating rate financial assets:
As at 30September 2024 As at 30September 2023
Total
investment
£’000
Weighted
average
interest
rate
%
Weighted
average
time for
which rate
is fixed
Years
Total
investment
£’000
Weighted
average
interest
rate
%
Weighted
average
time for
which rate
is fixed
Years
Loan note securities 9,701 11.80 4.30 9,997 10.85 4.58
Floating rate sterling liquidity funds 26,559 – – 20,031 – –
Cash at bank and on deposit 752 – – 680 – –
37,012 30,708
The fixed rate loan notes are not subject to interest rate risk and would therefore not impact the net assets.
Movements in interest rates would not significantly affect net assets attributable to the Company’s shareholders and total
profits; a movement of 1% in interest rates would cause a movement in net assets of £232,000.
Credit risk
Credit risk refers to the risk that a counterparty will default on its obligation resulting in a financial loss to the Company. The
Manager monitors credit risk on an ongoing basis.
At the reporting date, the Company’s financial assets exposed to credit risk amounted to the following:
As at
30September
2024
£’000
As at
30September
2023
£’000
Cash at bank and on deposit 752 680
Interest, dividends and other receivables 463 208
1,215 888
Credit risk on unquoted loan stock held within unlisted investments is considered to be part of market risk as disclosed
earlier in the note.
Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled
transactions is considered to be small due to the short settlement period involved and the high credit quality of the brokers
used. The Board monitors the quality of service provided by the brokers used to further mitigate this risk.
All the assets of the Company which are traded on a recognised exchange are held by JP Morgan Chase (“JPM”), the
Company’s custodian. The Board monitors the Company’s risk by reviewing the custodian’s internal controls reports as
described in the Corporate Governance section of this report.
The majority of cash held by the Company is held by JPM. The Board monitors the Company’s risk by reviewing regularly
the internal control reports. Should the credit quality or the financial position of the bank deteriorate significantly the
Manager will seek to move the cash holdings to another bank.
There were no significant concentrations of credit risk to counterparties at 30September 2024 or 30September 2023.
No individual investment exceeded 9.7per cent of the net assets attributable to the Company’s shareholders at
30September 2024 (2023: 10.6per cent).
86
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Liquidity risk
The Company’s financial instruments include investments in unquoted companies which are not traded in an organised
public market, all of which generally may be illiquid. AIM traded equity investments also carry a degree of liquidity risk. As a
result, the Company may not be able to quickly liquidate some of its investments in these instruments at an amount close
to their fair value in order to meet its liquidity requirements, or to respond to specific events such as deterioration in the
creditworthiness of any particular issuer.
The Company’s liquidity risk is managed on an ongoing basis by the Manager. The Company’s overall liquidity risks are
monitored on a quarterly basis by the Board. The Company is a closed-end fund, assets do not need to be liquidated to
meet redemptions, and sufficient liquidity is maintained to meet obligations as they fall due.
At the year end the Company had financial liabilities of £1,284,000 (2023: £1,155,000). All financial liabilities were due within
three months and were undiscounted (2023: same).
The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable and
accrued expenses. At 30September 2024, these investments were valued at £27,311,000 (2023: £20,711,000).
3.4 Related parties
Related party transactions include Management, Secretarial, Accounting and Performance fees payable to the Manager,
Gresham House Asset Management Ltd, as disclosed in notes 2.6 and 2.8, and fees paid to the Directors along with their
shareholdings as disclosed in the Directors’ Remuneration Report. In addition, the Manager operates a VCT Incentive
Scheme and Parallel Investment Incentive Scheme, detailed in the Management retention section of the Strategic Report
on page30, whereby members of staff and portfolio consultants of the Manager are entitled to participate in all eligible
unquoted investments alongside the Company.
During the year, Gresham House Asset Management Ltd received £274,000 (2023: £185,000) of advisory fees, £397,000
(2023: £369,000) of directors’ fees for services provided to companies in the investment portfolio and incurred abort costs
of £11,000 (2023: £5,000) with respect to investments attributable to BVT.
3.5 Segmental reporting
The Company has one reportable segment being investing in primarily a portfolio of UK growth businesses, whether
unquoted or traded on AIM.
3.6 Post balance sheet events
The following events occurred between the balance sheet date and the signing of these financial statements:
The 31 October 2024 NAV of 55.0p was announced on 8 November 2024 and the 30 November 2024 NAV of 54.4p was
announced on 5 December 2024. At the date of publishing this report, the Board is unaware of any matter that will have
caused the NAV per share to have changed significantly since the latest NAV.
On 18 November 2024, purchased 2.1 million shares of 10.0p at a price of 52.2p per share to be held in Treasury; and on
19 December 2024, purchased 2.0 million shares of 10.0p at a price of 51.7p per share to be held in Treasury.
Completed two new unquoted investments, totalling £1.5 million.
Completed four follow-on investments, into two quoted and two unquoted companies, totalling £0.9 million.
Partially realised Cerillion plc in November 2024, receiving proceeds of £0.04 million and making a return of 25.7x cost.
Crossword Cybersecurity plc delisted from AIM and entered in to Administration in November 2024.
87
Annual Report and Audited Financial Statements 2024
03 Financial Statements - Notes to the financial statements
Appendices
04
The table below shows the cash and total returns to shareholders dependent on their subscription cost, including their
income tax reclaimed on subscription.
Year subscribed
Cash
invested
(p)
Income tax
reclaim
(p)
Net cash
invested
(p)
Cumulative
dividends
paid
#
(p)
Return
on cash
invested
(%)
Current
NAV
(p)
Total
return
(%)
1998 (Apr) Ord 100.00 20.00 80.00 187.65 207.7 54.84 321.5
1999 (May) Ord 102.00 20.40 81.60 184.15 200.5 54.84 301.4
2000 (Feb) Ord 137.0 0 27.4 0 109.60 180.95 152.1 54.84 198.7
2000 (Mar) Ord 130.00 26.00 104.00 180.95 159.2 54.84 213 .1
2004 (Oct) C Shares
‡
100.00 40.00 60.00 136.00 176.0 54.84 193.7
2009 (Apr) Ord 91.60 27.48 64.12 119.75 160.7 54.84 133.7
2012 (Dec) Ord 111. 80 33.54 78.26 94.25 114. 3 54.84 59.0
2014 (Mar) Ord 103.80 31.14 72.66 76.75 103.9 54.84 33.4
2016 (Feb) Ord 102.80 30.84 71.96 62.25 90.6 54.84 19.4
2017 (Oct) Ord 94.76 28.43 66.33 44.25 76.7 54.84 6.7
2019 (Feb) Ord 84.20 25.26 58.94 37.75 74.8 54.84 11.6
2019 (Nov) Ord 76.80 23.04 53.76 30.25 69.4 54.84 7.3
2020 (Jan) Ord 82.40 24.72 57.68 30.25 66.7 54.84 1.7
2020 (Feb) Ord 80.10 24.03 56.07
26.75 63.4 54.84 6.5
2020 (Mar) Ord 63.80 19.14 44.66 26.75 71.9 54.84 20.7
2020 (Nov) Ord 75.20 22.56 52.64 23.75 61.6 54.84 1.8
2020 (Dec) Ord 78.00 23.40 54.60 23.75 60.4 54.84 (2.3)
2021 (Jan) Ord 81.30 24.39 56.91 23.75 59.2 54.84 (3.7)
2021 (Feb) Ord 78.80 23.64 55 .16 20.25 55.7 54.84 (6.1)
2021 (Mar) Ord 80.90 24.27 56.63 20.25 55.0 54.84 (8.4)
2021 (Dec) Ord 83.10 24.93 58.17 17. 25 50.8 54.84 (13.6)
2022 (Jan) Ord 82.40 24.72 57.68 17.25 50.9 54.84 (11.1)
2022 (Mar) Ord 72.60 21.78 50.82 13.75 48.9 54.84 (5.2)
2023 (Jan) Ord* 64.25 19.28 44.97 10.75 46.7 54.84 1.3
2023 (Mar) Ord* 62.64 18.79 43.85 8.00 42.8 54.84 5.1
2023 (Apr) Ord* 60.26 18.08 42.18 8.00 43.3 54.84 3.2
2024 (Jan) Ord* 58.78 17.63 41.15 6.25 40.6 54.84 2.1
2024 (Feb) Ord* 58.29 17.49 40.80 3.75 36.4 54.84 2.3
2024 (Mar) Ord* 58.01 17.40 40.61 3.75 36.5 54.84 2.6
#
Includes proposed final dividend of 2.0p.
‡
C Share dividend calculated using conversion ratio of 0.9657 which is the rate the C shares were converted into ordinary shares.
* Cash invested is the average effective offer price. Shares were allotted pursuant to the 2023 & 2024 Offers at individual prices for each
investor in accordance with the allotment formula as set out in each Offer’s Securities Note.
Cash and total returns to shareholders since launch
89
04 Appendices
Annual Report and Audited Financial Statements 2024
The chart below shows cash returned to shareholders based on the subscription price and the income tax reclaimed
on subscription.
0
20
40
60
80
100
120
140
160
180
200
220
Cash invested (p) Income tax reclaim (p) Cumulative dividends (p)*
2023 (Apr) Ord**
2023 (Mar) Ord**
2023 (Jan) Ord**
2024 (Mar) Ord**
2024 (Feb) Ord**
2024 (Jan) Ord**
2022 (Mar) Ord
2022 (Jan) Ord
2021 (Dec) Ord
2021 (Mar) Ord
2021 (Feb) Ord
2021 (Jan) Ord
2020 (Dec) Ord
2020 (Nov) Ord
2020 (Mar) Ord
2020 (Feb) Ord
2020 (Jan) Ord
2019 (Nov) Ord
2019 (Feb) Ord
2017 (Oct) Ord
2016 (Feb) Ord
2014 (Mar) Ord
2012 (Dec) Ord
2009 (Apr) Ord
2004 (Oct) C shares
2000 (Mar) Ord
2000 (Feb) Ord
1999 (May) Ord
1998 (Apr) Ord
* Includes proposed final dividend of 2.0p.
** Cash invested is the average effective offer price. Shares were allotted pursuant to the 2023 & 2024 Offers at individual prices for each
investor in accordance with the allotment formula as set out in each Offer’s Securities Note.
Cash returned to shareholders by date of investment
90 Annual Report and Audited Financial Statements 2024
04 Appendices
Ordinary share
Year ended
Dividend
history
per ordinary
share
(p)
Cumulative
dividends
(p)
Average total
dividend
per ordinary
share
(p)
6mths to 30/09/1998 1.00 1.00 0.50
30/09/99 3.80 4.80 3.20
30/09/00 3.60 8.40 3.36
30/09/01 3.50 11. 90 3.40
30/09/02 2.50 14.40 3.20
30/09/03 11. 90 26.30 4.78
30/09/04 4.90 31.20 4.80
30/09/05 10.20 41.40 5.52
30/09/06 11. 0 0 52.40 6.16
30/09/07 8.50 60.90 6.41
30/09/08 7.00 67.90 6.47
30/09/09 5.50 73.40 6.38
30/09/10 5.50 78.90 6.31
30/09/11 7.00 85.90 6.36
30/09/12 7.50 93.40 6.44
30/09/13 9.50 102.90 6.64
30/09/14 12.50 115 .40 6.99
30/09/15 6.50 121.90 6.97
30/09/16 18.50 140.40 7. 59
30/09/17 6.50 146.90 7. 53
30/09/18 7.50 154.40 7. 53
30/09/19 6.50 160.90 7.4 8
30/09/20 6.50 167.40 7.44
30/09/21 6.50 173.90 7.4 0
30/09/22 5.75 179.65 7. 33
30/09/23 4.25 183.90 7.21
30/09/2024* 3.75 187.65 7.08
* Includes proposed final dividend of 2.0p.
Unclaimed Dividends
The Company’s Registrar was holding £1.5m in unclaimed dividends as at 30 September 2024. Of this amount, £0.2m has
been unclaimed for over 12 years.
Under the terms of the Company’s Articles of Association, any dividends unclaimed for a period of 12 years after having
become due for payment shall, if the Board so resolves, be forfeited and shall cease to remain owing by the Company. Your
Board would like to ensure shareholders receive dividends that are owing to them and I would like to remind shareholders that
it is their responsibility to keep their address, and for those who receive their dividends by bank transfer, their bank account
details, up to date by informing the Company’s Registrar of any changes. Any shareholders who have not been able to claim
their dividends are requested to contact the Company’s Registrar on 01484 240 910 or by email at registrars@city.uk.com.
Dividends paid since launch
91Annual Report and Audited Financial Statements 2024
04 Appendices
Company Sector
Original
book cost
†
£’000
Accounting
book cost
†
£’000
30September
2024
fair value
£’000
30September
2023
fair value
£’000
% of net
assets
% of equity
held by
Baronsmead
Venture
Trust plc
% of
equity
held by
all funds
#
Unquoted
Patchworks Integration Ltd Technology 5,063 5,063 6,233 5,567 2.9 10.6 25.0
Airfinity Ltd Healthcare & education 3, 911 3, 911 4,894 4,357 2.3 8.6 20.1
Panthera Biopartners Ltd Healthcare & education 3,081 3,081 3,699 1,644 1.8 11.3 26.7
Popsa Holdings Ltd Technology 3,120 3,120 3,120 3,120 1.5 3.4 8 .1
Clarilis Ltd Technology 1,679 1,679 2,514 2,514 1.2 7. 0 16.7
Scurri Web Services Ltd Technology 2,033 2,033 2,499 2,411 1.2 6 .1 14.7
Ozone Financial Technology
Ltd
Technology 1,867 1,867 2,397 – 1.1 2.3 11. 8
Huma Therapeutics Ltd Healthcare & education 2,578 2,578 2,324 – 1.1 0.4 0.8
Fu3e Limited Technology 1,680 1,680 1,981 1,847 0.9 12.6 29.7
TravelLocal Ltd Consumer markets 1,879 1,879 1,878 1,879 0.9 4.7 10.9
Metrion Biosciences Ltd Healthcare & education 1,543 1,543 1,773 1,283 0.8
11.1 26.8
OnSecurity Technology Ltd Technology 1,210 1,210 1,642 – 0.8 3.9 20.0
Orri Ltd Healthcare & education 1,359 1,359 1,572 1,410 0.7 7. 6 38.2
SecureCloud+ Ltd Technology 700 700 1,495 1,688 0.7 7. 8 16.7
Counting Ltd Business services 1,410 1,410 1,410 936 0.7 3.7 8.8
Pointr Ltd Technology 466 466 1,116 1,001 0.5 2.4 5.2
Cognassist UK Ltd Healthcare & education 896 896 1,008 933 0.5 4.4 22.2
Huddl Mobility Ltd (trading as
CitySwift)
Technology 949 949 982 – 0.5 3.4 17.4
Lads Store Ltd (trading as
Bidnamic)
Technology 949 949 944 944 0.4 1.9 9.1
SciLeads Ltd Technology 942 942 942 – 0.4 3.0 16.5
Branchspace Ltd Technology 659 659 912 659 0.4 4.9 25.5
Proximity Insight Holdings Ltd Technology 1,148 1,14 8 860 1,148 0.4 4.1 20.4
Focal Point Positioning Ltd Technology 1,131 1,131 849 905 0.4 1.2 6.0
Revlifter Ltd Technology 1,438 1,438 834 1,899 0.4 5.7 23.0
Mable Therapy Ltd Healthcare & education 670 670 670 670 0.3 6.6 34.3
IWP Holdings Ltd
Business services 1,407 1,407 352 1,339 0.2 3.5 8.5
Connect Earth Ltd Business services 447 447 336 447 0.2 2.9 14.7
Azarc.Io inc Technology 659 659 329 – 0.1 4.5 23.1
Dayrize B.V. Technology 917 917 229 757 0.1 5.9 31.3
Rockfish Group Ltd Consumer markets 875 875 226 166 0.1 5.4 11.6
Yappy Ltd Consumer markets 2,009 2,009 120 102 0.1 18.9 40.4
CISIV Ltd Technology 700 700 – 475 0.0 5.6 12.0
Custom Materials Ltd Technology 2,530 2,530 – – 0.0 12.4 27. 8
Tribe Digital Holdings Ltd Technology 1,198 1,198 – 495 0.0 5.4 11.5
Equipsme (Holdings) Ltd Business services 842 842 – – 0.0 5.7 12.7
Full investment portfolio
92 Annual Report and Audited Financial Statements 2024
04 Appendices
Company Sector
Original
book cost
†
£’000
Accounting
book cost
†
£’000
30September
2024
fair value
£’000
30September
2023
fair value
£’000
% of net
assets
% of equity
held by
Baronsmead
Venture
Trust plc
% of
equity
held by
all funds
#
Unquoted (continued)
Knight Recruitment Group Ltd Business services 705 705 – – 0.0 9.8 23.8
SilkFred Ltd Consumer markets 790 790 – 324 0.0 2.3 5.1
Munnypot Ltd Technology 460 460 – – 0.0 1.2 2.7
55,900 55,900 50,140 23.6
Delisted (previously AIM)
LoopUp Group plc Technology 504 504 – 11 0.0 0.2 0.6
MXC Capital Ltd Business Services 197 231 – – 0.0 0.3 0.6
Fulcrum Utility Services Ltd Business Services 102 100 – – 0.0 0.1 1.0
803 835 – 0.0
Total unquoted 56,703 56,735 50,140 23.6
AIM
Cerillion plc Technology 881 881 20,639 20,657 9.7 3.9 8.7
Netcall plc Technology 1,738 3,246 8,616 8,319 4.1 6.0 24.4
Property Franchise Group plc Consumer markets 1,438 1,477 4,925 1,852 2.3 1.9 18.2
IDOX plc Technology 614
614 3,881 4,073 1.8 1.4 6.5
Bioventix plc Healthcare & education 253 669 3,662 3,662 1.7 1.8 11.1
Diaceutics plc Healthcare & education 1,410 1,410 2,449 1,911 1.2 2.2 13.0
IntelliAM AI plc Technology 2,118 2,118 1,802 – 0.9 11. 8 23.5
PCI-PAL plc Technology 1,297 1,297 1,670 1,802 0.8 4.9 10.9
hVIVO plc Healthcare & education 1,18 0 1,245 1,660 1,166 0.8 0.9 1.9
Beeks Financial Cloud
Group plc
Technology 337 337 1,647 594 0.8 1.0 2.3
Anpario plc Healthcare & education 304 768 1,474 1,144 0.7 2.2 6.9
Vianet Group plc Business services 1,292 1,14 4 1,305 777 0.6 3.5 17. 3
Crossword Cybersecurity plc
‡
Technology 3,104 3,104 1,228 1,723 0.6 7.5 15.6
Begbies Traynor Group plc Business services 433 474 1,063 1,215 0.5 0.7 3.8
Oberon Investments Group plc Business services 1,372 1,372 939 848 0.4 4.6 9.7
Eden Research plc Business services 1,857 1,857 928 564 0.4 4.5 9.9
Skillcast Group plc Healthcare & education 754 754 917 387 0.4 2.3 4.7
Tan Delta Systems plc Business services 918
918 883 848 0.4 4.8 9.8
Pulsar Group plc (formerly
Access Intelligence plc)
Business services 586 586 849 834 0.4 1.1 7.3
Inspired plc Business services 574 1,542 821 1,296 0.4 1.7 28.5
SysGroup plc Technology 1,292 1,310 684 621 0.3 2.5 26.3
Earnz plc Business services 702 702 674 – 0.3 9.2 24.5
Merit Group plc Technology 2,022 2,546 622 487 0.3 4.1 10.2
Diales plc (formerly Driver
Group plc)
Business services 1,126 1,306 546 546 0.3 4.1 20.1
Everyman Media Group plc Consumer markets 782 825 528 472 0.3 1.0 9.6
One Media iP Group plc Technology 825 778 431 593 0.2 4.8 10.8
SEEEN plc Technology 2,019 2,019 332 730 0.2 11.0 23 .1
Scholium Group plc Consumer markets 900 626 288 288 0.1 6.6 14.7
TPXimpact Holdings plc Technology 585 585 261 308 0.1 0.9 1.8
93
04 Appendices - Full investment portfolio
Annual Report and Audited Financial Statements 2024
Company Sector
Original
book cost
†
£’000
Accounting
book cost
†
£’000
30September
2024
fair value
£’000
30September
2023
fair value
£’000
% of net
assets
% of equity
held by
Baronsmead
Venture
Trust plc
% of
equity
held by
all funds
#
AIM (continued)
Crimson Tide plc Technology 592 592 247 355 0.1 3.0 6.4
IXICO plc Healthcare & education 675 675 217 434 0.1 5.0 11.1
Staffline Group plc Business services 174 4,614 202 179 0.1 0.5 1.2
Poolbeg Pharma plc Healthcare & education 44 44 188 138 0.1 0.4 0.9
KRM22 plc Technology 450 450 144 158 0.1 1.3 2.8
Science In Sport plc Consumer markets 288 263 116 58 0.1 0.2 0.5
Rosslyn Data Technologies plc Technology 1,151 1,151 53 96 0.0 2.7 6.0
Totally plc Healthcare & education 70 170 36 28 0.0 0.2 0.5
Zoo Digital Group plc Technology 788 442 35 40 0.0 0.1 0.2
Tasty plc Consumer markets 1,18 8 2,832 31 35 0.0 1.4 10.2
Fusion Antibodies plc Healthcare & education 540 540 27 36 0.0 0.7 1.5
I-nexus Global plc
Technology 563 562 21 28 0.0 2.4 5.4
Aptamer Group plc Healthcare & education 2,206 2,206 4 25 0.0 0.1 0.2
RUA Life Sciences plc Healthcare & education 509 289 4 4 0.0 0.0 0.0
CloudCoco Group plc Technology 438 338 3 25 0.0 0.4 0.8
Total AIM 42,389 51,678 67,052 31.6
Collective investment vehicle
WS Gresham House UK Micro Cap Fund 7, 217 12,617 30,960 28 ,186 14.6
WS Gresham House UK Smaller Companies Fund 22,021 22,021 24,072 23,791 11.3
WS Gresham House UK Multi Cap Income Fund 11,789 11,789 13,469 15,961 6.3
BlackRock Sterling Liquidity Fund 8,853 8,853 8,853 6,677 4.2
Goldman Sachs Sterling Liquidity Fund 8,853 8,853 8,853 6,677 4.2
JPMorgan Sterling Liquidity Fund 8,853 8,853 8,853 6,677 4.2
Total collective investment vehicle 67,586 72,986 95,060 44.8
Total investments 166,678 181,399 212,252 100.0
Net current assets (69) 0.0
Net assets 212,183 100
†
The original book cost column provides the combined cost of investments made by BVCT & BVCT2 prior to the merger of the two VCTs to
become BVT. This is included for information purposes for shareholders reviewing the portfolio.
The accounting cost column ties into the investment note on page74 of these accounts. For investments owned before the assets of BVCT
were acquired by BVCT2 the accounting book cost is the sum of the original cost of the investment held in BVCT2 and the market value of the
investment in BVCT at the date of the merger.
#
All funds managed by Gresham House Asset Management Ltd.
‡
Includes unquoted convertible loan note; Cost £960,000, Fair Value £1,086,000. Since the year end, the Company has delisted from AIM and
entered in to Administration.
94
04 Appendices - Full investment portfolio
Annual Report and Audited Financial Statements 2024
AIM The Alternative Investment Market, a sub-market of the London Stock
Exchange, designed to help smaller companies access capital from
the public market.
Annual Dividend Yield The ratio of dividend paid/declared for financial year divided by opening net
asset valueper share.
BVT Baronsmead Venture Trust plc
Book Cost (Original) Total acquisition value, including transaction costs, less the value of
any disposals or capitalised distributions allocated on a weighted
average costbasis.
Book Cost (Accounting) The original book cost of an asset, rebased to the value at which it was used
in a subsequent transaction, such as a transfer between entities.
Collective Investment Vehicle An entity which allows investors to pool their money, investing the pooled
funds on their behalf.
Direct Investments Investments held by Baronsmead Venture Trust plc only. Does not include
investments held by Micro Cap, Multi Cap Income or Small Cap.
Discount/Premium If the share price is lower than the NAVper share, it is said to be trading at a
discount. The size of the Company’s discount is calculated by subtracting
the share price from the NAVper share and is usually expressed as a
percentage of the NAVper share. If the share price is higher than the
NAVper share, this situation is called a premium.
EBITDA Earnings before Interest, Tax, Depreciation and Amortisation – a proxy for
the cash flow generated by a business, most commonly used for businesses
that do not (yet) generate operating or shareholder profits.
IFA Independent Financial Advisors, professionals who offer independent
advice to their clients and recommend suitable financial products.
Key Performance Indicators (“KPIs”) A measurable value that demonstrates how effectively the Company is
achieving core business objectives.
NAV The total value of all the Company’s assets, at current market value, having
deducted all liabilities at their carrying value.
NAVper share Total Net Asset Value divided by the number of shares.
NAV total return A measure showing how the Net Asset Value has performed over a period
of time, taking into account both capital returns and dividends paid to
shareholders, assuming that dividends paid were reinvested at the NAV of
the Company at the time the shares were quoted ex-dividend.
Return on Cash Invested to shareholders The amount of cash returned to shareholders through income tax reclaimed, and
cumulative dividends paid, expressed as a percentage of the initial investment.
Shares Held in Treasury Shares in the Company repurchased by itself, reducing the number of
freely traded shares.
SME Small and medium-sized entities. These are independent companies which
meet two of the three recognition criteria for small or medium companies
according to EU Legislation.
Total Assets All assets, both current and non-current. An asset is an economic resource
owned by an entity that can lead to an increase in economic value.
VCT Value The value of an investment when acquired, rebased if the holding is added to
or any payment is made which causes an increase or decrease in its value.
WS Gresham House Equity Funds Includes WS Gresham House UK Micro Cap Fund (“Micro Cap”), WS Gresham
House UK Multi Cap Income Fund (“Multi Cap”) and WS Gresham House UK
Smaller Companies Fund (“Small Cap”).
80per cent test Ensuring that the Company meets the requirement to hold 80per cent of its
investments in qualifying holdings.
Glossary
95Annual Report and Audited Financial Statements 2024
04 Appendices
NAV total return reconciliation Q1 Q2 Q3 Q4
Opening NAV total return (p) 395.6 415.3 410.8 426.7
NAV movement (p) 5.1 (5.4) 3.8 (4.0)
Dividend (p) 0.0 4.3 0.0 3.0
Total return (p) 5.1 (1.1) 3.8 (1.1)
Change in NAV total return (p)* 19.7 (4.6) 15.9 (5.2)
Closing NAV total return (p) 415.3 410.8 426.7 421.5
* The change in NAV total return is the sum of the monthly total returns calculated on a compound basis.
AIC methodology: The NAV total return to the investor, including the original amount invested (rebased to 100) from launch,
assuming that dividends paid were reinvested at the NAV of the Company at the time the shares were quoted ex-dividend.
Annual dividend yield reconciliation 2024 2023 2022
Interim dividend 1.75p 1.75p 3.00p
Recommended final dividend 2.00p 2.50p 2.75p
Total dividend 3.75p 4.25p 5.75p
Opening NAV (after final dividend) 52.94p 58.54p 78.90p
Dividend yield 7.1% 7.3% 7.3%
96
04 Appendices - Glossary
Annual Report and Audited Financial Statements 2024
97
04 Appendices - Glossary
Annual Report and Audited Financial Statements 2024
Information
05
Warning to Shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning
investment matters. These are typically from “brokers” based overseas who target UK shareholders offering to sell them
what often turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely
persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount
or offers for free company reports.
Please note that it is very unlikely that either the Company or the Company’s Registrar, The City Partnership (UK) Ltd,
would make unsolicited telephone calls to shareholders and that any such calls would relate only to official documentation
already circulated to shareholders and never in respect of investment “advice”.
If you are in any doubt about the veracity of an unsolicited phone call, please call either the Company or the Registrar at the
numbers provided below.
Protect Yourself
If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company
or research reports, you should take these steps before handing over any money or share certificates:
1
Get the name of the person and organisation contacting you.
2 Check the FCA Register at www.fca.org.uk/register to ensure they are authorised (or www.fca.org.uk/publication/
systems-information/aifmd-small-register.pdf).
3
Use the details on the FCA Register to contact the firm.
4 Call the FCA Consumer Helpline on 0800 111 6768 (freephone) from 8.00am to 6.00pm, Monday to Friday (except
public holidays) and 9.00am to 1.00pm, Saturday (from abroad call +44 20 7066 1000) if there are no contact details on
the Register or you are told they are out of date.
5
Search the FCA’s list of unauthorised firms and individuals to avoid doing business with.
6 REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other investments, you will not have access to the Financial
Ombudsman Service (https://www.financial-ombudsman.org.uk/) or Financial Services Compensation Scheme
(https://www.fscs.org.uk/) if things go wrong.
Report a Scam
If you are approached about a share scam, you should tell the FCA using the Share Fraud Reporting Form (www.fca.org.
uk/consumers/report-scam-unauthorised-firm), where you can find out about the latest investment scams.
You can also call the FCA Consumer Helpline on 0800 111 6768.
If you have already paid money (or otherwise dealt with share fraudsters), you should contact ActionFraud on
03001232040 or use the ActionFraud (https://www.actionfraudalert.co.uk/) Online Reporting Tool.
More detailed information on this or similar activity can be found on the FCA web site.
Shareholder information and contact details
99
05 Information
Annual Report and Audited Financial Statements 2024
Shareholder account queries
The Registrar for Baronsmead Venture Trust plc is The City Partnership (UK) Limited (“City”).
The Registrar will deal with all of your queries with regard to your shareholder account, such as:
Change of address
Latest net asset value
Your current shareholding balance
Your payment history including any outstanding payments and reissue requests
Your payment options (cheque, direct payment to your bank/building society account, reinvestment)
Paper or electronic communications
Request replacement share certificates (for which there may be additional administrative and other charges)
You can contact City with your queries in several ways:
On-line: Investor Hub
https://gresham-house-vcts.cityhub.uk.com
City’s secure website, Investor Hub, allows you to
manage your own shareholding online
You will need to register to use this service on
the Investor Hub.
You should have your Access Token to hand, which is
available on the Change in Registrar letter, any recently
issued share certificates and the quarterly DRIP
statement (if applicable) which you should always keep
confidential for security reasons.
Telephone: 01484 240 910
Lines are open 9.00am to 5.30pm, Monday to Friday,
excluding public holidays in England and Wales.
Calls are charged at the standard geographic rate and
will vary by provider. Calls from outside the UK will be
charged at the applicable international rate.
Email: registrars@city.uk.com
Post: The City Partnership (UK) Limited
Mending Rooms, Park Valley Mills,
Meltham Road, Huddersfield HD4 7B
Share price
The Company’s ordinary shares are listed on the London Stock Exchange (LSE). The LSE code for the Company is “BVT”.
Share price information can be obtained from the link on the Company’s website and many financial websites.
Calendar
February 2025 Quarterly factsheet to 31 December 2024.
14 February 2025 FY24 final dividend record date.
12 March 2025 Annual General Meeting.
17 March 2025 FY24 final dividend payment, subject to shareholder approval at the AGM on 12 March 2025.
May/June 2025 Announcement and posting of interim report for the six months to 31 March 2025.
August 2025 Quarterly factsheet to 30 June 2025.
December 2025 Announcement and posting of final results for year to 30 September 2025.
100
05 Information - Shareholder information and contact details
Annual Report and Audited Financial Statements 2024
Additional information
The information provided in this report has been produced in order for shareholders to be informed of the activities of the
Company during the period it covers. Gresham House Asset Management Limited does not give investment advice and
the naming of companies in this report is not a recommendation to deal in them.
Baronsmead Venture Trust plc is managed by Gresham House Asset Management Limited which is authorised and
regulated by the FCA. Past performance is not necessarily a guide to future performance. Stock markets and currency
movements may cause the value of investments and the income from them to fall as well as rise and investors may not
get back the amount they originally invested. Where investments are made in unquoted securities and smaller companies,
their potential volatility may increase the risk to the value of, and the income from, the investment.
Secondary market in the shares of Baronsmead Venture Trust plc
The Company’s shares can be bought and sold in the same way as any other quoted company on the London Stock
Exchange through a stockbroker.
The market makers in the shares of Baronsmead Venture Trust plc are:
Panmure Liberum
020 3100 2000
Winterflood 020 3100 0000
Qualifying investors* who invest in the existing shares of the Company can benefit from:
Tax free dividends;
Realised gains are not subject to capital gains tax (although any realised losses are not allowable);
No minimum holding period; and
No need to include VCT dividends in annual tax returns.
The UK tax treatment of VCTs is on a first in first out basis and therefore tax advice should be obtained before shareholders
dispose of their shares and also if they deferred a capital gain in respect of new shares acquired prior to 6April 2004.
* UK income tax payers, aged 18 or over, who acquire no more than £200,000 worth of VCT shares in a tax year.
101
05 Information - Shareholder information and contact details
Annual Report and Audited Financial Statements 2024
Brokers
Panmure Liberum
Ropemaker Place
Level 12, 25 Ropemaker Street
London EC2Y 9LY
Tel: 020 3100 2000
Auditor
BDO LLP
55 Baker Street
London W1U 7EU
Solicitors
Howard Kennedy LLP
1 London Bridge
London SE1 9BG
VCT Status Adviser
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Contact the Chair
chair@baronsmeadvcts.com
Website
www.baronsmeadvcts.co.uk
Directors
Fiona Miller Smith (Chair)
‡
Michael Probin**
†
Isabel Dolan*
Secretary
Gresham House Asset Management Ltd
Registered Office
5 New Street Square
London EC4A 3TW
Manager
Gresham House Asset Management Limited
5 New Street Square
London EC4A 3TW
Registered Number
03504214
Registrars and Transfer Office
The City Partnership (UK) Ltd
The Mending Rooms
Park Valley Mills
Meltham Road
Huddersfield HD4 7BH
Tel: 01484 240 910
Corporate information
‡
Chair of the Nomination Committee
* Chair of the Audit Committee
** Chair of the Management Engagement & Remuneration Committee
†
Senior Independent Director
102
05 Information
Annual Report and Audited Financial Statements 2024
