## Baronsmead Venture Trust plc ### Annual Report and Audited Financial ### Statements for the year ended ### 30September 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 ### 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. ### 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 ## Contents Investment policy and objective 2 ### Example investments About Baronsmead Venture Trust plc 3 01 Strategic report Financial highlights 5 Performance summary 6 ### Chair’s statement 7 Ozone (unquoted) Manager’s review 10 Ozone API is the provider of a software platform enabling Investments in the year 14 banks to deliver APIs to comply with and generate Realisations in the year 16 revenue opportunities from Open Banking and Open Ten largest investments 17 Finance globally. Principal risks and uncertainties 22 Environmental, Social & Governance (ESG) 24 Other matters 28 Directors’ duties 32 02 Directors’ report ### Board of Directors 37 IntelliAM (quoted) Directors’ report 38 IntelliAM provides platform-based machine-learning Corporate governance 41 solutions to blue-chip clients in the FMCG sector, Audit Committee report 46 increasing the operating and energy efficiency of their Nomination Committee report 49 manufacturing sites. 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 Panthera (unquoted) Balance sheet 69 Panthera is an independent site management organisation Statement of cash flows 70 providing patient recruitment services to clinical research Notes to the financial statements 71 organisations, pharma and biotech companies. 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 ### Skillcast (quoted) 05 Skillcast provides a compliance e-learning platform and Information subscription-based solutions to UK corporate clients Shareholder information and contact details 99 across professional services. Corporate information 102 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 ## Investment policy and objective ### Investment policy Co-investment The Company typically invests alongside Baronsmead ### Baronsmead Venture Trust plc’s (“the Second Venture Trust plc in unquoted and quoted ### Company”) investment policy is to invest companies sourced by the Manager. Following the ### primarily in a diverse portfolio of UK growth Manager’s acquisition of the Mobeus VCTs in September 2021, the Company now also co-invests alongside ### businesses, whether unquoted or traded on the Mobeus VCTs in new unquoted VCT qualifying ### AIM, which are substantially based in the UK, investments. All new qualifying AIM dealflow will continue ### although many of these investees may have to be exclusively allocated between the Company and Baronsmead Second Venture Trust plc. ### some trade overseas. As detailed in the Management retention section of the Investments are made selectively across a range of sectors Strategic Report on page 30, the Manager’s staff and in companies that have the potential to grow and enhance portfolio consultants are entitled to invest in unquoted their value and which will diversify the portfolio. investments alongside the Company. This arrangement is in line with current practice of private equity houses and The Company will make investments in accordance with its objective is to attract, recruit, retain and incentivise the prevailing VCT legislation which places restrictions, the Manager’s team and is made on terms which align the inter alia, on the type and age of investee companies as well interests of shareholders and the Manager. as the maximum amount of investment that such investee companies may receive. ### Borrowing powers ### Investment securities Should it be required, the Company’s policy is to use borrowing for short term liquidity purposes only up to a The Company invests in a range of securities including, maximum of 25per cent of the Company’s gross assets, as but not limited to, ordinary and preference shares, loan permitted by the Company’s Articles of Association. 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 ### Investment objective investments are primarily held in ordinary shares. No single investment may represent more than 15per cent (by VCT The Company is a tax efficient listed company which aims value) of the Company’s total investments. to achieve long-term positive investment returns for private investors, including tax-free dividends. ### Liquidity ### Dividend policy Pending investment in VCT qualifying investments, the Company’s cash and liquid funds are held in permitted non- The Board will decide the annual dividends each year qualifying investments. 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 ### Investment style or lower dividends relevant to prevailing circumstances and actual realisations. However, the Board confirms the Investments are selected in the expectation that the following two guidelines that shape its dividend policy: application of private equity disciplines, including active management of the investments, will enhance value and  The Board will, wherever possible, seek to pay two enable profits to be realised on the sale of investments. 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. 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 Manager as an influential shareholder The Company gives shareholders access to a diverse The Manager is an engaged and supportive shareholder (on portfolio of growth businesses. behalf of the Company) in both unquoted and significant quoted investments. The Company will make investments in growth businesses, whether unquoted or traded on AIM, which are substantially For unquoted investments, representatives of the Manager based in the UK in accordance with the prevailing VCT often join the investee board. legislation. Investments are made selectively across a The role of the Manager with investees is to ensure that range of sectors. 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 ### The Manager’s approach to investing grow the company into an attractive target which can be The Manager endeavours to select the best opportunities sold or potentially floated in the medium term. 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. 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 01 Strategic report ## Financial highlights 1 ### Net asset value total return Increase in net asset 1,2 ### (as at 30 September 2024) value per share ### (12 months to 30 September 2024) | | Sep 22 | | | Sep 22 | | | | --- | --- | --- | --- | --- | --- | --- | | | | 405.2p | | | 58.5p | | | 421.5p | | | +6.9% | | | | | | Sep 23 | | | Sep 23 | | | | | | 395.6p | | | 52.9p | | | | Sep 24 | | | Sep 24* | | | | | | 421.5p | | | 52.8p | 3.75p | NAV per share (p) Dividends* *Includes proposed final dividend of 2.0p. | Net Asset Value (“NAV”) total return to | NAV per share increased 6.9 per cent to 56.6p, | | --- | --- | | shareholders for every 100.0p invested at | before the deduction of dividends, for the | | launch (April 1998). | financial year ended 30 September 2024. | | | 1 | | 1,3 | | --- | --- | --- | --- | | Annual tax free dividend yield | | New investments | | | (12 months to 30 September 2024) | | (12 months to 30 September 2024) | | | | Sep 22 | | | Sep 22 | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | 7.3% | | | | | £21.5mn | | 7.1% | | | £13.0mn | | | | | | | Sep 23 | | | Sep 23 | | | | | | | 7.3% | | | £10.4mn | | | | | Sep 24* | | | Sep 24 | | | | | | | 7.1% | | | | £13.0mn | | * includes proposed final dividend of 2.0p. Unquoted: £9.1mn Quoted: £3.9mn Annual tax free dividend yield based on 3.75p Investments made into seven new and twelve dividends paid (including proposed final dividend follow-on opportunities during the year. of 2.0p) and opening NAV of 52.9p 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. 5Annual Report and Audited Financial Statements 2024 01 Strategic report ## Performance summary ### Ten-year performance record Pence £mn 250 222.9 212.2 193.8 194.9 200 150.6** 175.5 164.8 150 159.0 151.1 100 200 85.1 50 100 | 0 | | | | | | | 0 | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 2023 | 202420222021202020192018201720162015 | | | | Net asset value | Share price (mid) | Net asset value total return | Total net assets (£mn) | | | | | | per share (pence) | (pence) | per share (pence)* | | | | | * 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. 600 500 400 300 6 Annual Report and Audited Financial Statements 2024 01 Strategic report # Chair's statement I am pleased to report that over the 12 months to 30 September 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 9 September 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** | ## Fiona Miller Smith Chair ![img-0.jpeg](img-0.jpeg) ## 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 44 direct 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 pages 10 to 13. Annual Report and Audited Financial Statements 2024 7 01 Strategic report - Chair's statement ## 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 £0.4 million for a gross money multiple of 3.9x cost and £0.4 million 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 17 March 2025, subject to shareholder approval. The final dividend is payable to shareholders on the register as at 14 February 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. ## 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. 8 Annual Report and Audited Financial Statements 2024 01 Strategic report - Chair's statement ## 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. ## 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 Annual Report and Audited Financial Statements 2024 9 01 Strategic report ## Manager’s review ### Ken Wotton Trevor Hope Clive Austin Ed Wass Tania Hayes Managing Director, Managing Director Managing Director, Director Chief Operating Public Equity & Chief Investment VCT Portfolio of VCT Portfolio Officer, Officer, VCTs Strategic Equity 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: Number of NAV % of investees % return in Asset class (£mn) NAV* companies 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. 10 Annual Report and Audited Financial Statements 2024 01 Strategic report - Manager’s review Two new AIM quoted investments were made ### Investment activity – during the year: ### unquoted and quoted  IntelliAM is a provider of a machine learning platform enabling manufacturing organisations to leverage their The Company’s investment strategy is primarily focused data and maximise the value and efficiency of their assets on companies operating in parts of the economy that we believe are benefiting from long-term structural growth  Earnz is a consolidator in the blue collar energy trends and in sectors where we have deep expertise and services sector created by an experienced Executive network. The amount of capital invested in each business is Chairman which the Manager has successfully backed in matched to the scale, maturity and underlying risk profile of previous ventures the company seeking investment. The Company made additional investments totalling During the year, £13.0 million was invested into 19 companies £4.6million into twelve existing portfolio companies, 3 including 7 new additions to the portfolio and 12 follow- quoted and 9 unquoted, across the year. This is consistent on investments. with the investment strategy of continuing to back our high potential assets with further capital to support future growth. Five new unquoted investments were completed We anticipate the level of follow-on investment will continue during the year. to grow as the earlier stage portfolio continues to mature.  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 ### Quoted portfolio operators to analyse data from their networks ### (AIM-traded investments)  Azarc.io specialises in business process automation, notably automating custom declaration forms ###  SciLeads is a data-intelligence platform that enables Performance companies operating within Life Science verticals to identify, track and convert potential customers The quoted portfolio delivered positive absolute performance of 16.5 per cent during the year, despite the  OnSecurity Technology is a B2B cybersecurity services ongoing elevated levels of geopolitical and macroeconomic business which has built a technology platform to uncertainty in the markets. For reference, the AIM market automate the scoping, scheduling, and reporting of in the UK increased 2.0 per cent over the same period. human-based penetration tests The AIM portfolio remains in good financial health and is exposed to structural growth areas providing some insulation from the uncertain economic conditions. ### Investment diversification at 30 September 2024 by value Sector* Total assets Length of time investments held* 7% 12% 7% 9% 13% 32% 24% 21% 56% 63% 24% 32% | Technology | WS Gresham House Equity Funds | Greater than 5 years | | --- | --- | --- | | Healthcare & education | AIM | Between 3 and 5 years | | Business services | Unquoted | Between 1 and 3 years | | Consumer markets | Cash liquidity funds | Less than 1 year | * Direct investments only, not held by the WS Gresham House Equity Funds. Annual Report and Audited Financial Statements 2024 11 01 Strategic report - Manager's review 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 3.8x 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 £6.7 million 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 Annual Report and Audited Financial Statements 2024 01 Strategic report - Manager's review ## 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 4.9 per 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 Annual Report and Audited Financial Statements 2024 13 01 Strategic report # Investments in the year | 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 operators 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 Biosciences Ltd | 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 satellite systems | 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 Book cost Company Location Sector Activity £’000 AIM-traded investments New IntelliAM AI plc South Yorkshire Technology Provider of a machine learning 2,118 platform enabling manufacturing organisations to leverage their data and maximise the value and efficiency of their assets. Earnz plc Gloucestershire Business services Specialist energy and heat 702 decarbonisation platform Follow-on Eden Research plc Oxfordshire Business services Developer of biological fungicides 732 and bio equivalents PCI-PAL plc London Technology Secure payment service provider 196 Oberon Investments Group plc London Business services Wealth advisory service for 105 individuals and businesses Total AIM-traded investments 3,853 # Total investments in the year 12,999 # includes unquoted and AIM investments only. 15Annual Report and Audited Financial Statements 2024 01 Strategic report ## Realisations in the year | | | First | | Original | | | | | | Overall | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | # | | | ‡ | | | | | investment | | book cost | | | | Proceeds | | | multiple | IRR | | Company | | date | | | £’000 | | | £’000 | | return (x) | (%) | 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. | | | Cerillion plc | | | Netcall plc | | --- | --- | --- | --- | --- | --- | | London | | | Bedfordshire | | | | | 1 | | | 2 | | | Quoted | | | Quoted | | | | www.cerillion.com | | | www.netcall.com | | | Cerillion provides billing, charging and CRM software Netcall is a provider of intelligent automation and solutions, predominantly to the telecommunications customer engagement software, helping organisations sector but also to other sectors, including finance to become more customer-centric. Solutions are and utilities. Cerillion has c.80 customer installations focused on enabling customer contact across multiple worldwide, delivering a broad range of cloud channels and improving customer satisfaction whilst solutions, managed services and on-premise driving operational efficiency through increases process enterprise software. automation. Netcall has over 700 customers, spanning enterprise, healthcare and government sectors. | All funds managed by Gresham House | | | | | All funds managed by Gresham House | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | First investment: July 2015 | | | | | First investment: July 2010 | | | | | | Total original cost: £1,958,000 | | | | | Total original cost: £4,354,000* | | | | | | Total equity held: 8.7% | | | | | Total equity held: 24.4% | | | | | | Baronsmead Venture Trust only | | | | | Baronsmead Venture Trust only | | | | | | Original cost: £881,000 | | | | | Original cost: £1,738,000 | | | | | | Valuation: £20,639,000 | | | | | Valuation: £8,616,000 | | | | | | Valuation basis: Bid price | | | | | Valuation basis: Bid price | | | | | | Income recognised in the year: £176,000 | | | | | Income recognised in the year: £82,000 | | | | | | % of equity held: 3.9% | | | | | % of equity held: 6.0% | | | | | | Voting rights: 3.9% | | | | | Voting rights: 6.0% | | | | | | Year ended 30September | | | | | Year ended 30June | | | | | | | | 2024 | | 2023 | | | 2024 | | 2023 | | | £million | | £ million | | | £million | | £ million | | | Sales: 43.8 39.2 | | | | | Sales: 39.1 36.0 | | | | | | Pre-tax profits: 19.7 16.1 | | | | | Pre-tax profits: 6.3 4.0 | | | | | | Net assets: 48.5 36.9 | | | | | Net assets: 40.5 35.4 | | | | | | No. of employees: 354 324 | | | | | No. of employees: 283 270 | | | | | | Source: Cerillion plc, Annual Report and Financial Statements, | | | | | Source: Netcall plc, Annual Report and Accounts, 30 June 2024 | | | | | | 30 September 2024 | | | | | *Includes Baronsmead VCTs only | | | | | 17Annual Report and Audited Financial Statements 2024 01 Strategic report - Ten largest investments Patchworks Integration Ltd The Property Franchise Group plc London Dorset ## 4 ## Unquoted 3 Quoted www.wearepatchworks.com www.thepropertyfranchisegroup.co.uk Patchworks provides the software to integrate Property Franchise Group (“TPFG”) is the UK’s largest an ecommerce customer’s front and back office multi-brand lettings and estate agency franchising operational systems, managing the flow of data group, which has completed two transformational across their entire business and providing data and acquisitions in 2024 augmented by strong organic analytics to power decision-making. 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 | | | | | All funds managed by Gresham House | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | First investment: July 2021 | | | | | First investment: December 2013 | | | | | | Total original cost: £10,550,000 | | | | | Total original cost: £3,196,000* | | | | | | Total equity held: 25.0% | | | | | Total equity held: 18.2% | | | | | | Baronsmead Venture Trust only | | | | | Baronsmead Venture Trust only | | | | | | Original cost: £5,063,000 | | | | | Original cost: £1,438,000 | | | | | | Valuation: £6,233,000 | | | | | Valuation: £4,925,000 | | | | | | Valuation basis: Revenue multiple | | | | | Valuation basis: Bid price | | | | | | Income recognised in the year: £174,000 | | | | | Income recognised in the year: £133,000 | | | | | | % of equity held: 10.6% | | | | | % of equity held: 1.9% | | | | | | Voting rights: 10.6% | | | | | Voting rights: 1.9% | | | | | | Year ended 30June | | | | | Year Ended 31 December | | | | | | | | 2023 | | 2022 | | | 2023 | | 2022 | | | £million | | £million | | | £million | | £million | | | Net Assets: 2.6 2.7 | | | | | Sales: 27.3 27. 2 | | | | | | No. of Employees: 4 4 | | | | | Pre-tax profits: 9.0 8.8 | | | | | Net Assets: 57.7 57. 8 A full set of accounts is not publicly available. Source: Patchworks Integration Ltd, Unaudited Financial No. of Employees: 176 185 Statements, 30 June 2023 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 | | | Airfinity Ltd | | | IDOX plc | | --- | --- | --- | --- | --- | --- | | London | | | Surrey | | | | | 5 | | | 6 | | | Unquoted | | | Quoted | | | | www.airfinity.com | | | www.idoxgroup.com | | | Airfinity is a science information data analytics IDOX provides legislative compliance and document platform which provides deep information by process management software, in a variety of cloud therapeutic area on a real time basis to the life and on-premise applications, for local governments sciences industry and public entities including and the NHS. Additionally, IDOX delivers document governments, NGOs and healthcare authorities. It collaboration software for the oil & gas, energy, and grew rapidly during the pandemic on the back of its infrastructure sectors, enabling accurate record COVID-19 health analytics and intelligence platform. 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 | | | | | All funds managed by Gresham House | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | First investment: July 2021 | | | | | First investment: May 2002 | | | | | | Total original cost: £8,155,000 | | | | | Total original cost: £1,642,000* | | | | | | Total equity held: 20.1% | | | | | Total equity held: 6.5% | | | | | | Baronsmead Venture Trust only | | | | | Baronsmead Venture Trust only | | | | | | Original cost: £3,911,000 | | | | | Original cost: £614,000 | | | | | | Valuation: £4,894,000 | | | | | Valuation: £3,881,000 | | | | | | Valuation basis: Revenue multiple | | | | | Valuation basis: Traded price | | | | | | Income recognised in the year: £69,000 | | | | | Income recognised in the year: £38,000 | | | | | | % of equity held: 8.6% | | | | | % of equity held: 1.4% | | | | | | Voting rights: 8.6% | | | | | Voting rights: 1.4% | | | | | | Year ended 31 December | | | | | Year ended 31 October | | | | | | | | 2022 | | 2021 | | | 2023 | | 2022 | | | £million | | £million | | | £million | | £million | | | Sales: 5.4 2.4 | | | | | Sales: 73.3 66.2 | | | | | | Pre-tax profits: (3.5) (1.9) | | | | | Pre-tax profits: 7.8 6.6 | | | | | | Net Assets: 2.6 3.2 | | | | | Net Assets: 73.3 67.4 | | | | | | No. of employees 83 57 | | | | | No. of Employees: 626 578 | | | | | | Source: Airfinity Ltd, Annual Report & Financial Statements, | | | | | Source: Idox plc, Annual Report & Accounts, 31 October 2023 | | | | | | 31 December 2022 | | | | | *Includes Baronsmead VCTs only | | | | | 19Annual Report and Audited Financial Statements 2024 01 Strategic report - Ten largest investments | | | Panthera Biopartners Ltd | | | Bioventix plc | | --- | --- | --- | --- | --- | --- | | Lancashire | | | Surrey | | | | | 7 | | | 8 | | | Unquoted | | | Quoted | | | | www.panthera-bio.com | | | www.bioventix.com | | | Panthera is an independent site management Bioventix manufactures and supplies high organisation providing patient recruitment services to affinity sheep monoclonal antibodies for use in clinical research organisations, pharma and biotech immunodiagnostics. Focusing on clinical diagnostics, companies. The primary focus is phase 2 and 3 clinical the company’s strategy is to identify new assays for trials for new drugs across multiple therapeutic areas. which there is a need for improved antibodies. 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 All funds managed by Gresham House First investment: September 2020 First investment: June 2013 Total original cost: £6,424,000 Total original cost: £562,000* Total equity held: 26.7% Total equity held: 11.1% Baronsmead Venture Trust only Baronsmead Venture Trust only Original cost: £3,081,000 Original cost: £253,000 Valuation: £3,699,000 Valuation: £3,662,000 Valuation basis: Revenue multiple Valuation basis: Bid price Income recognised in the year: Nil Income recognised in the year: £152,000 % of equity held: 11.3% % of equity held: 1.8% Voting rights: 11.3% Voting rights: 1.8% Year Ended 31 December Year ended 30 June | | 2023 | | 2022 | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 2024 | | 2023 | | £million | | £million | | | | | | | | | | | £million | | £million | | Sales: 11.3 4.9 Sales: 13.6 12. 8 Pre-tax profits: 0.9 (5.6) Pre-tax profits: 10.6 10.1 Net Assets: 5.7 1.4 Net Assets: 12.0 12.1 No. of Employees: 108 104 No. of Employees: 17 16 Source: Panthera Biopartners Ltd, Annual Report & Financial Source: Bioventix plc, Annual Report & Financial Statements, 31 December 2023 Statements, 30 June 2024 *Includes Baronsmead VCTs only 20 Annual Report and Audited Financial Statements 2024 01 Strategic report - Ten largest investments | | | Popsa Holdings Ltd | | Clarilis Ltd | | --- | --- | --- | --- | --- | | Surrey | | | Warwickshire | | | | 9 | | 10 | | | Unquoted | | | Unquoted | | | www.popsa.com | | | www.clarilis.com | | Popsa is a photobook app that uses proprietary machine Clarilis is a legal document automation software learning algorithms to reduce the average time it takes and services provider, enabling both legal firms for customers to produce photobooks from two hours to and in-house legal teams to automate legal just five minutes. Popsa aims to disrupt an industry that contract production. has not innovated with consumer habits, in particular the shift to mobile as the key photo repository. | All funds managed by Gresham House | | | | | All funds managed by Gresham House | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | First investment: December 2021 | | | | | First investment: July 2020 | | | | | | Total original cost: £6,500,000 | | | | | Total original cost: £3,500,000 | | | | | | Total equity held: 8 .1% | | | | | Total equity held: 16.7% | | | | | | Baronsmead Venture Trust only | | | | | Baronsmead Venture Trust only | | | | | | Original cost: £3,120,000 | | | | | Original cost: £1,679,000 | | | | | | Valuation: £3,120,000 | | | | | Valuation: £2,514,000 | | | | | | Valuation basis: Revenue multiple | | | | | Valuation basis: Revenue multiple | | | | | | Income recognised in the year: Nil | | | | | Income recognised in the year: Nil | | | | | | % of equity held: 3.4% | | | | | % of equity held: 7.0% | | | | | | Voting rights: 3.4% | | | | | Voting rights: 6.6% | | | | | | Year Ended 31 December | | | | | Year ended 31 December | | | | | | | | 2023 | | 2022 | | | 2023 | | 2022 | | | £million | | £million | | | £million | | £million | | | Sales: 27.5 26.7 | | | | | Net Assets: 0.9 1.7 | | | | | | Pre-tax profits: (0.8) (2.1) | | | | | No. of Employees: 57 57 | | | | | Net Assets: 11. 2 11.3 A full set of accounts is not publicly available. No. of Employees: 58 58 A full set of accounts is not publicly available. Source: Popsa Holdings Ltd, Group Strategic Report, Report Source: Clarilis Ltd, Unaudited Financial Statements, of the Directors and Consolidated Financial Statements, 31 December 2023 31 December 2023 21Annual Report and Audited Financial Statements 2024 01 Strategic report ## 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 The Company must comply with section 274 of the Breach of any of the rules enabling the The loss of VCT status would result in The Board maintains a safety margin on all VCT tests to ensure that asa Venture Income Tax Act 2007 which enables its investors to Company to hold VCT status could result in the shareholders who have not held their shares for breaches are unlikely to be caused by unforeseen events or shocks. The CapitalTrust take advantage of tax relief on their investment and on loss of thatstatus. the designated holding period having to repay Manager monitors all of the VCT tests on an ongoing basis and the Board futurereturns. the income tax relief they had already obtained reviews the status of these tests on a quarterly basis. Specialist advisors and future dividends and gains would be subject review the tests on a bi-annual basis and report to the Audit Committee on to income tax and capital gains tax their findings. Legislative VCTs were established in 1995 to encourage private A change in government policy regarding the The Company might not be able to maintain its The Board and the Manager engage on a regular basis with HMT and individuals to invest in early stage companies that funding of small companies or changes made asset base leading to its gradual decline and industry representative bodies to demonstrate the cost benefit of VCTs to are considered to be risky and therefore have limited to VCT regulations to comply with EU State potentially an inability to maintain either its buy the economy in terms of employment generation and taxation revenue. In funding options. In return the state provides these Aid rules could result in a cessation of the tax back or dividend policies. addition, the Board and the Manager have considered the options available investors with tax reliefs which fall under the definition reliefs for VCT investors or changes to the to the Company in the event of the loss of tax reliefs to ensure that it can | | of state aid. | reliefs that would make them less attractive to | | continue to provide a strong investment proposition for its shareholders | | --- | --- | --- | --- | --- | | | | investors. | | despite the loss of tax reliefs. | | Investment | The Company invests in small, mainly UK based | Investment in poor quality companies with | Reduction in both the capital value of investors’ | The Company has a diverse portfolio where the cost of any one investment | | performance | companies, both unquoted and quoted. Smaller | the resultant risk of a high level of failure in | shareholdings and in the level of income | is typically less than 5per cent of NAV thereby limiting the impact of any one | | | companies often have limited product lines, markets | theportfolio. | distributed. | failed investment. The Manager has a strong and consistent track record | | | or financial resources and may be dependent for their | | | over a long period. | management on a smaller number of key individuals and The Manager undertakes extensive due diligence on each new investment hence tend to be riskier than largerbusinesses. 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, Whilst the Company invests in predominantly UK Events such as fiscal policy changes, economic Reduction in the value of the Company’s assets The Company invests in a diversified portfolio of companies across a political and businesses, the UK economy relies heavily on Europe recession, trade disputes, movement in interest with a corresponding impact on its share price number of industry sectors, providing protection against shocks. In addition, other external and the US as its largest trading partners. This, together or currency rates, civil unrest, war or political may result in the loss of investors through buy the Manager uses a limited amount of bank gearing in its investments which factors with the increase in globalisation, means that economic uncertainty or pandemics can adversely backs and may limit its ability to pay dividends. enables its investments to continue trading through difficult economic unrest and shocks in other jurisdictions, as well as affect the trading environment for underlying conditions. The Board monitors and reviews the position of the Company, in the UK, can impact on UK companies, particularly investments and impact on their results and ensuring that adequate cash balances exist to allow flexibility. The Board smaller ones that are more vulnerable to changes in valuations. reviews the make up and progress of the portfolio each quarter to ensure tradingconditions. that it remains appropriately diversified and funded. Regulatory and The Company is authorised as a self managed Failure of the Company to comply with any of The Company’s performance could be The Board and the Manager employ the services of leading regulatory compliance Alternative Investment Fund Manager (“AIFM”) under its regulatory or legal obligations could result in impacted severely by financial penalties and lawyers, sponsors, auditors and other advisers to ensure the Company the Alternative Investment Fund Managers Directive the suspension of its listing by the UKLA and/or a loss of reputation resulting in the alienation complies with all of its regulatory obligations. The Board has strong systems (“AIFMD”) and is also subject to the Prospectus and financial penalties and sanction by the regulator of shareholders, a significant demand to buy in place to ensure that the Company complies with all of its regulatory Transparency Directives. It is required to comply with or a qualified audit report. back shares and an inability to attract future responsibilities. The Manager has a strong compliance culture and employs the Companies Act 2006 and the UKLA Listing Rules. investment. The suspension of its shares dedicated compliance specialists within its team who support the Board in would result in the loss of its VCT taxation ensuring that the Company is compliant. status and most likely the ultimate liquidation of theCompany. Operational The Company relies on a number of third parties, in The risk of failure of the systems and controls Errors in shareholders’ records or The Board has appointed an Audit Committee who reviews the internal particular the Manager, to provide it with the necessary of any of the Company’s advisers including a shareholdings, incorrect marketing literature, control (“ISAE3402”) and/or internal audit reports from all significant third services such as registrar, sponsor, custodian, receiving cyber attack leading to an inability to service non compliance with listing rules, loss of assets, party service providers, including the Manager, on a bi-annual basis to agent, lawyers and tax advisers. shareholder needs adequately, to provide breach of legal duties and inability to provide ensure that they have strong systems and controls in place including accurate reporting and accounting and to accurate reporting and accounting all leading to Business Continuity Plans and matters relating to cyber security. The Board ensure adherence to all VCT legislation rules. reputational risk and the potential for litigation. A regularly reviews the performance of its service providers to ensure that cyber attack or data breach could lead to loss of they continue to have the necessary expertise and resources to provide sensitive shareholder data resulting in a breach a high class service and always where there has been any changes in key and liability under GDPR. personnel or ownership. The financial risks faced by the Company are covered within the Notes to the Financial Statements on pages83 to 87. 22 Annual Report and Audited Financial Statements 2024 01 Strategic report - Principal risks and uncertainties The Board has carried out a robust assessment of the principal and emerging risks and uncertainties facing the Company The Company is facing the key emerging risks of climate change and ESG, given the regulatory, operational and potentially and has assessed the appropriate measures to be taken in order to mitigate these risks as far as practicable. There is an reputational implications if not appropriately addressed. In order to address these emerging risks, when looking to make a ongoing process for identifying, evaluating and managing these risks which is part of the governance framework detailed new investment, the Manager uses an ESG Decision Tool to identify any material ESG risks that need to be managed and further in the Corporate Governance section of this report. mitigated. For further detail, see pages24 to 26. Principal risk Context Specific risks we face Possible impact Mitigation Loss of approval The Company must comply with section 274 of the Breach of any of the rules enabling the The loss of VCT status would result in The Board maintains a safety margin on all VCT tests to ensure that asa Venture Income Tax Act 2007 which enables its investors to Company to hold VCT status could result in the shareholders who have not held their shares for breaches are unlikely to be caused by unforeseen events or shocks. The CapitalTrust take advantage of tax relief on their investment and on loss of thatstatus. the designated holding period having to repay Manager monitors all of the VCT tests on an ongoing basis and the Board futurereturns. the income tax relief they had already obtained reviews the status of these tests on a quarterly basis. Specialist advisors and future dividends and gains would be subject review the tests on a bi-annual basis and report to the Audit Committee on to income tax and capital gains tax their findings. Legislative VCTs were established in 1995 to encourage private A change in government policy regarding the The Company might not be able to maintain its The Board and the Manager engage on a regular basis with HMT and individuals to invest in early stage companies that funding of small companies or changes made asset base leading to its gradual decline and industry representative bodies to demonstrate the cost benefit of VCTs to are considered to be risky and therefore have limited to VCT regulations to comply with EU State potentially an inability to maintain either its buy the economy in terms of employment generation and taxation revenue. In funding options. In return the state provides these Aid rules could result in a cessation of the tax back or dividend policies. addition, the Board and the Manager have considered the options available investors with tax reliefs which fall under the definition reliefs for VCT investors or changes to the to the Company in the event of the loss of tax reliefs to ensure that it can | | of state aid. | reliefs that would make them less attractive to | | continue to provide a strong investment proposition for its shareholders | | --- | --- | --- | --- | --- | | | | investors. | | despite the loss of tax reliefs. | | Investment | The Company invests in small, mainly UK based | Investment in poor quality companies with | Reduction in both the capital value of investors’ | The Company has a diverse portfolio where the cost of any one investment | | performance | companies, both unquoted and quoted. Smaller | the resultant risk of a high level of failure in | shareholdings and in the level of income | is typically less than 5per cent of NAV thereby limiting the impact of any one | | | companies often have limited product lines, markets | theportfolio. | distributed. | failed investment. The Manager has a strong and consistent track record | | | or financial resources and may be dependent for their | | | over a long period. | management on a smaller number of key individuals and The Manager undertakes extensive due diligence on each new investment hence tend to be riskier than largerbusinesses. 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, Whilst the Company invests in predominantly UK Events such as fiscal policy changes, economic Reduction in the value of the Company’s assets The Company invests in a diversified portfolio of companies across a political and businesses, the UK economy relies heavily on Europe recession, trade disputes, movement in interest with a corresponding impact on its share price number of industry sectors, providing protection against shocks. In addition, other external and the US as its largest trading partners. This, together or currency rates, civil unrest, war or political may result in the loss of investors through buy the Manager uses a limited amount of bank gearing in its investments which factors with the increase in globalisation, means that economic uncertainty or pandemics can adversely backs and may limit its ability to pay dividends. enables its investments to continue trading through difficult economic unrest and shocks in other jurisdictions, as well as affect the trading environment for underlying conditions. The Board monitors and reviews the position of the Company, in the UK, can impact on UK companies, particularly investments and impact on their results and ensuring that adequate cash balances exist to allow flexibility. The Board smaller ones that are more vulnerable to changes in valuations. reviews the make up and progress of the portfolio each quarter to ensure tradingconditions. that it remains appropriately diversified and funded. Regulatory and The Company is authorised as a self managed Failure of the Company to comply with any of The Company’s performance could be The Board and the Manager employ the services of leading regulatory compliance Alternative Investment Fund Manager (“AIFM”) under its regulatory or legal obligations could result in impacted severely by financial penalties and lawyers, sponsors, auditors and other advisers to ensure the Company the Alternative Investment Fund Managers Directive the suspension of its listing by the UKLA and/or a loss of reputation resulting in the alienation complies with all of its regulatory obligations. The Board has strong systems (“AIFMD”) and is also subject to the Prospectus and financial penalties and sanction by the regulator of shareholders, a significant demand to buy in place to ensure that the Company complies with all of its regulatory Transparency Directives. It is required to comply with or a qualified audit report. back shares and an inability to attract future responsibilities. The Manager has a strong compliance culture and employs the Companies Act 2006 and the UKLA Listing Rules. investment. The suspension of its shares dedicated compliance specialists within its team who support the Board in would result in the loss of its VCT taxation ensuring that the Company is compliant. status and most likely the ultimate liquidation of theCompany. Operational The Company relies on a number of third parties, in The risk of failure of the systems and controls Errors in shareholders’ records or The Board has appointed an Audit Committee who reviews the internal particular the Manager, to provide it with the necessary of any of the Company’s advisers including a shareholdings, incorrect marketing literature, control (“ISAE3402”) and/or internal audit reports from all significant third services such as registrar, sponsor, custodian, receiving cyber attack leading to an inability to service non compliance with listing rules, loss of assets, party service providers, including the Manager, on a bi-annual basis to agent, lawyers and tax advisers. shareholder needs adequately, to provide breach of legal duties and inability to provide ensure that they have strong systems and controls in place including accurate reporting and accounting and to accurate reporting and accounting all leading to Business Continuity Plans and matters relating to cyber security. The Board ensure adherence to all VCT legislation rules. reputational risk and the potential for litigation. A regularly reviews the performance of its service providers to ensure that cyber attack or data breach could lead to loss of they continue to have the necessary expertise and resources to provide sensitive shareholder data resulting in a breach a high class service and always where there has been any changes in key and liability under GDPR. personnel or ownership. The financial risks faced by the Company are covered within the Notes to the Financial Statements on pages83 to 87. Annual Report and Audited Financial Statements 2024 23 01 Strategic report ## Environmental, Social & Governance (ESG) The Company is required, by company law, to provide details For the twelve months to 30 September 2024, the Manager of environmental (including the impact of the Company’s had the opportunity to vote on 1,886 issues. Of these, the business on the environment), employee, human rights, Manager voted for 94.4 per cent of resolutions, against social and community issues, including information about on 3.9 per cent, abstained on 1.7 per cent. Of the 74 any policies it has in relation to these matters and the votes against, the majority were because the resolutions effectiveness of these policies. Since the Company does conflicted with the Manager’s house policy, notably to vote not have any employees and it has no direct impact on the against political donations. community or the environment due to its status as a VCT, The Manager has been a signatory to the United Nations the Company does not maintain specific policies in relation supported Principles of Responsible Investment (UN PRI) to these matters. However, the Board is conscious of the since February 2018. In the 2024 Private Equity module, the potential ESG risks associated with its investments as well as Manager scored 93 per cent versus a median for the sector its social and corporate governance responsibilities. of 80 per cent. It is also a signatory of the UK Stewardship The Board and the Manager believe that responsible Code. In July 2024, it was announced that the Manager investment involves the integration of ESG factors within had met the expected standard of reporting for 2023 and the investment process and that these factors should be remained a signatory to the UK Stewardship Code 2020 for considered alongside financial and strategic issues. The the fourth year in a row. Company therefore complies with current reporting and The Manager undertakes an annual ESG survey to other ESG standards for investment companies, through understand how its VCT unquoted investments respond its monitoring of the ESG risks and opportunities of its to relevant ESG risks and opportunities and how these investee companies. The Company will continue to evolve are considered as part of their operations. The survey its processes and reporting as ESG requirements change. asked unquoted investee businesses a range of questions More broadly, the Company complies with the AIC Code of based on the ESG_VC framework across a range of Corporate Governance. material environmental, social and governance factors. The Manager incorporates ESG considerations throughout It asked them to indicate the relevance of those material the investment process including valuation and this ESG factors to their business, as well as their ability to is communicated with the Board on a quarterly basis. influence those factors. Repeating the survey annually A framework based on ten key ESG themes is used to allows companies to demonstrate progression against structure analysis, and monitor and report on ESG risks and material ESG issues and forms the basis of meaningful ESG opportunities across the lifecycle of investments. engagements between Gresham House Ventures and its unquoted portfolio companies. The Manager’s investment philosophy means that it is an actively engaged shareholder. The Manager’s assessments For more information on the Manager’s commitments of management, board and governance form a critical part and approach to ESG integration and engagement, and of the investment case, which necessitates that it works the Manager’s climate related disclosures please see the with companies on strategy, M&A, remuneration and related following documents: matters, from the holding period onwards. The Manager will meet face-to-face with the management team of a publicly  Sustainable Investment Report listed company at least twice a year, and more frequently  Stewardship Code when it owns a material stake of a company. These meetings  Private Equity Sustainable Investment Policy / Public form the basis for the ongoing monitoring of a company’s Equity Sustainable Investment Policy strategy, financial performance and ESG considerations.  Engagement and Voting Policy Voting is an important part of the Manager’s investment  TCFD report 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). 24 Annual Report and Audited Financial Statements 2024 01 Strategic report - Environmental, Social & Governance (ESG) ## 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 | 2023 | | --- | --- | --- | | 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. Annual Report and Audited Financial Statements 2024 25 01 Strategic report - Environmental, Social & Governance (ESG) Table 4 below shows the gender diversity within Gresham Gresham House released their Diversity, Equity & Inclusion House as at 30 September 2024. (“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 Table 4 bias training for all employees; evolving Human Resources 3 systems to include DEI data which is now shared quarterly Gresham House gender diversity with our Group Management Committee and divisional heads and developing clear DEI guidelines for recruiters. Gender 2024 2023 Male 62% 62% During the year Gresham House have promoted or actively attended a number of events targeted at women Female 38% 38% entrepreneurs and the senior women from across 100% 100% Gresham House continued to attend a 12-week external Resilient Women’s Leadership Programme to develop their 3. as at 30 September 2024 capability to lead. Table 5 below shows the gender diversity within the Gresham House is committed to improving the diversity Strategic Equity division of Gresham House, responsible for of its investment teams, the management teams of the managing the Company’s portfolio. investee companies that they support and increasing the amount and number of investments across the UK. As an Table 5 example, Gresham House has participated in the 10,000 Black Intern programme for a number of years; in summer Gresham House strategic equity division 2024 3 interns joined the investment teams, and one 4 person was successfully hired as an Analyst into the GH genderdiversity Ventures team. Gender 2024 2023 Male 74% 70% Female 26% 30% 100% 100% 4. as at 30 September 2024 26 Annual Report and Audited Financial Statements 2024 01 Strategic report - Environmental, Social & Governance (ESG) 27Annual Report and Audited Financial Statements 2024 01 Strategic report ## Other matters Based on its research, the Manager has selected a number ### Applying the business model of sectors that it believes will offer attractive growth This section of the Strategic Report sets out the practical prospects and investment opportunities. Diversification is steps that the Board has taken in order to apply the also achieved by spreading investments across different business model, achieve the investment objective, and asset classes and making investments for a variety of adhere to the investment policy. The investment policy, different periods. which is set out in full on page2, is designed to ensure that The Company’s policy is not to invest in any of the following the Company continues to qualify, and is approved, as a areas: human cloning; arms/munitions; or adult content. VCT by HM Revenue and Customs. The Manager’s Review on pages10 to 13 provides a review of the investment portfolio and of market conditions during the year, including the main trends and factors likely to ### Portfolio Management affect the future development, performance and position The AIM portfolio is managed with a private equity of the business. approach applied to public market investments. This Risk is spread by investing in a number of different involves a proactively engaged approach to interactions businesses within different qualifying industry sectors with management and boards of portfolio companies; using a mixture of securities. The maximum the Company seeking to challenge, influence and support key areas such will invest in a single company (including a collective as strategy, capital allocation, management incentives, investment vehicle) is 15per cent of the value of its board governance and composition. The Manager investments calculated in accordance with Section 278 of views these areas as critical components of long-term the Income Tax Act 2007 (as amended) (“VCT Value”). The shareholder value creation. value of an individual investment is expected to increase The unquoted portfolio is actively managed by a large over time as a result of trading progress and a continuous team of investment executives including over ten highly assessment is made of its suitability for sale. experienced, dedicated portfolio directors who provide The Company invests in a range of securities including, access to a far-reaching network of potential partners. but not limited to, ordinary and preference shares, loan Value creation is driven through board representation in stocks, convertible securities and permitted non qualifying order to influence areas such as the go-to-market strategy, investments as well as cash. Unquoted investments capital efficiency, corporate governance and exit planning. are usually structured as a combination of ordinary An in-house talent function partners with portfolio shares and loan stocks or preference shares, while AIM- companies to help strengthen management teams and traded investments are primarily held in ordinary shares. shape boards of directors at each stage of the investment. Pending investment in VCT qualifying investments, the Company’s cash and liquid funds are held in permitted non- qualifying investments. ### Investing in the right companies Investments are primarily made in companies which are ### substantially based in the UK, although many of these VCT status investees may have some trade overseas. Investments are Compliance with the required VCT rules and regulations selected in the expectation that the application of private is considered when all investment decisions are made. equity disciplines, including an active management style for Shoosmiths LLP and Philip Hare & Associates advise the unquoted companies, will enhance value and enable profits Company on compliance with VCT requirements when to be realised from planned exits. evaluating investment opportunities. Internally, this is The Board has delegated the management of the monitored on a continuous basis and it is also reviewed investment portfolio to Gresham House. The Manager has by PricewaterhouseCoopers LLP (“PwC”) every six adopted a ‘top-down, macro economic and sector-driven’ months to ensure ongoing compliance. PwC have been approach to identifying and evaluating potential investment appointed by the Company to advise on compliance with opportunities, by assessing a forward view of firstly the VCT requirements, which includes appropriate and regular broader business environment, then the sector and finally review of the portfolio. Although PwC works closely with the the specific potential investment opportunity. Manager, it reports directly to the Board. The principal tests are summarised overleaf. Throughout the year ended 30September 2024, and at the date of this report, the Company continued to meet these tests. 28 Annual Report and Audited Financial Statements 2024 01 Strategic report - Other matters ## VCT status tests 1. 1 To ensure that the VCT's income in the period has been derived wholly or mainly (70 per cent plus) from shares or securities; 2. 2 To ensure that the VCT has not retained more than 15 per cent of its income from shares and securities; 3. 3 To ensure that the VCT has not made a prohibited payment to shareholders derived from an issue of shares since 6 April 2014; 4. 4 To ensure that at least 80 per 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. 5 To ensure that at least 70 per cent by value of the VCT's qualifying holdings has been represented throughout the period by holdings of eligible shares; 6. 6 To ensure that no investment in any company has represented more than 15 per cent by VCT value at the time of investment; 7. 7 To ensure that the VCT's ordinary capital has throughout the period been listed on a regulated European market; 8. 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. 9 To ensure that since 17 November 2015, the VCT has not made an investment in a company which exceeds the maximum permitted age requirement; 10. 10 To ensure that since 17 November 2015, funds invested by the VCT in another company have not been used to make a prohibited acquisition; and 11. 11 To ensure that since 6 April 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 pages 7 to 9. The Board assesses the performance of the Manager in meeting the Company's objective against the KPIs highlighted on page 5 of the report. ## 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 2.0 per cent per 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 3.5 per 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 30 September 2024 was 2.0 per 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 4 per cent or base rate plus 2 per 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 10 per 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 5 per cent of shareholders' funds for that period. Nil performance fee is payable for the year to 30 September 2024 (2023: £nil). Annual Report and Audited Financial Statements 2024 29 01 Strategic report - Other matters ## 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 46 companies. ## 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 about 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 22 July 2014, the Company was registered as a Small UK registered AIFM under the AIFMD. ## 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 30 September 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 pages 22 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.20 per cent of the NAV and comprised 13 per cent of the 30 September 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. 30 Annual Report and Audited Financial Statements 2024 01 Strategic report - Other matters The Board has also considered the Company’s income and  Buy back of shares: From time to time, the Company expenditure projections and find these to be realistic and buys its own shares through the market in accordance sensible. The Board has assessed the Company’s ability with its share price discount policy. Subject to the to cover its annual running costs under several liquidity likely impact on shareholders as a whole, the funding scenarios in which the value of liquid assets (including requirements of the Company and market conditions AIM-traded investments and OEICs) has been subject at the time, the Company seeks to maintain a mid to sensitivity analysis. The Directors noted that under share price discount of approximately 5per cent to none of these scenarios was the Company unable to net asset value where possible. However shareholders cover its costs. should note this discount may widen during periods of market volatility. Based on the Company’s processes for monitoring costs,  Secondary market: The Company’s shares are listed share price discount, the Manager’s compliance with the on the London Stock Exchange and can be bought investment policies, objective and business model, asset using a stockbroker or authorised share dealing allocation and the portfolio risk profile, the Directors have service in the same way as shares of any other listed concluded that there is a reasonable expectation that the company. Approximately 128,000 shares were bought by Company will be able to continue in operation and meet investors in the Company’s existing shares in the year to its liabilities as they fall due over the three-year period to 30September 2024. 30September 2027. ### Board diversity ### Shareholder choice Information on Board diversity can be found on page 50 The Board wishes to provide shareholders with a number of this Report. 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 30September 2024. Annual Report and Audited Financial Statements 2024 31 01 Strategic report ## Directors’ duties The Audit Committee has responsibility for the ongoing ### Overview review of the Company’s risk management and internal Section 172 of the Companies Act 2006 (the “Act”) requires controls. To the extent that they are applicable, risks related the Directors to act in good faith and in a way that is most to the matters set out in Section 172 are included within the likely to promote the success of the Company for the Company’s Risk Register and are subject to regular review benefit of its shareholders. and monitoring. 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, Decision making the impact the Company has on the environment and The importance of stakeholder considerations in the community, and operate in a manner which maintains their context of decision making is taken into account at reputation for having high standards of business conduct every Board meeting. All discussions involve careful and fair treatment between shareholders. consideration of the longer-term consequences of any Fulfilling this duty naturally supports the Company in its decisions and their implications for stakeholders. Further investment objective of achieving long-term investment information on the role of the Board in safeguarding returns for private investors and helps ensure that all stakeholder interests and monitoring ongoing investment decisions are made in a responsible and sustainable way. activity can be found on pages33 to 35. In accordance with the requirements of the Companies (Miscellaneous Reporting) Regulations 2018, and the AIC Code, the information below explains how the Directors ### Stakeholder engagement have individually and collectively discharged their duties under Section 172. Following a comprehensive review by the Board, which regularly keeps stakeholder engagement mechanisms To ensure they are aware of, and understand their duties, under review, it was agreed that as the Company is an Directors are provided with a detailed induction outlining externally managed Venture Capital Trust and does not their legal and regulatory duties as a Director of a UK public have any employees or customers, the Company’s key limited company upon appointment. They also receive stakeholders are: regular regulatory updates and training as appropriate. A Company Secretarial report is included within the papers of  The Company’s shareholders each Board meeting, to remind Directors of their duties and  The Manager emphasise the importance of stakeholder consideration  The portfolio of investee companies and the wider during decision making. Directors also receive technical communities in which they operate updates from the Company’s advisers and the Manager on a regular basis.  A range of external service providers  HMRC and the Company’s regulatory bodies, The Directors have access to the advice and services including the FCA 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. 32 Annual Report and Audited Financial Statements 2024 01 Strategic report - Directors’ duties 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 The Board is committed to maintaining open channels of support is critical to communication with shareholders and during the year has the sustainability of the engaged with shareholders in various ways to understand their Company and delivery of views. These include: the long-term strategy of  Annual General Meeting (“AGM”) – The Company encourages the business. 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 12March 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 page9 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 – TheManager 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. Annual Report and Audited Financial Statements 2024 33 01 Strategic report - Directors’ duties Stakeholder group Importance Board engagement The Manager The Manager’s The Board invites the Manager to attend Valuation Forums, performance is critical Board and Committee meetings to update the Directors on the for the Company to performance of the portfolio and execution of the investment successfully deliver its strategy. The Board holds detailed discussions with the Manager investment strategy on all key strategic and operational topics on an ongoing basis. In and meet its objective addition, the Chair regularly meets with the Manager to ensure a to achieve long-term close dialogue is maintained. In line with the Company’s culture, investment returns for the Board recognises the importance of working together with the private investors, including Manager in a way that: tax-free dividends.  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 The Company invests in Regular engagement with the portfolio of investee companies investee companies growth businesses across is undertaken by the Manager, so a transparent and objective a range of sectors to meet relationship between the Board and the Manager is vital. For the Company’s investment unquoted and larger AIM holdings, the Manager is an influential and objectives in accordance engaged shareholder (on behalf of the Company) and Manager with VCT legislation. representatives often join the boards of these companies. External service To function as a VCT listed The Board maintains regular contact with its external providers and providers on the London Stock receives reports from them at Board and Committee meetings, as Exchange, the Company well as outside of the regular meeting cycle. Their advice, as well as relies on a diverse range their needs and views are routinely considered. During the period, of advisors for support the Management Engagement and Remuneration Committee in meeting all relevant formally assessed the external service providers’ performance, obligations. 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 asappropriate. HMRC and The Company must comply The Board regularly considers how it meets regulatory and regulatory bodies with HMRC VCT rules and statutory obligations and follows voluntary and best-practice including the must comply or explain its guidance, including how any governance decisions it makes Financial Conduct adherence to the AIC Code impacts the Company’s stakeholders, both in the short and the Authority (“FCA”) as part of its continuing longer-term. The Audit Committee obtains confirmation from its obligations as required by VCT status adviser regarding compliance with HMRC’s VCT rules the FCA. 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. 34 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 Providing shareholders and In deciding to launch a fundraising during the reporting period, the fundraising potential new investors the Board considered: opportunity to subscribe  the expectations and preferences of the for shares in BVT, which in Company’s shareholders; turn provides opportunities  the Company’s cash flow forecast, short term investment rates for Company growth and the ability to adhere to the Company’s dividend policy; and increased investor  the effect on the NAV and the ability of the Company to be able to engagement. 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 Providing shareholders The Board takes into account any feedback it receives from Shareholder event with in-depth information in shareholders. Working with the Manager, and to further enhance and AGMs an interactive setting and the opportunity to engage with shareholders in a meaningful way, an opportunity to meet and the Directors decided to build on the agenda for the Company’s question the Board and the AGM and in 2025 will introduce additional presentations, panel Manager. discussions, portfolio company interviews and an extended Q&A session for the shareholders of the Company. | Third party | Providing comfort and | During 2023 and 2024, the Company engaged the services | | --- | --- | --- | | independent | risk mitigation on the | of Lincoln International and Kroll to undertake a sample of | | valuations | Manager’s processes | independent third party valuations as a means of managing | | | for the valuation of the | the Board’s risk in respect of the valuation of the VCT portfolio | | | portfolios unquoted assets. | 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. 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. The Strategic Report has been approved by the Board of Directors. On behalf of the Board ### Fiona Miller Smith Chair 23 December 2024 Annual Report and Audited Financial Statements 2024 35 ## Directors’ ## report ## 02 ## The Corporate Governance statement on pages41 ## to 45 forms part of the Directors’ report. 02 Directors’ report ## Board of Directors ### All directors are considered independent. | Fiona Miller Smith | Isabel Dolan | | --- | --- | | Chair and Nomination | Non-Executive Director and | | Committee Chair | Audit Committee Chair | | Appointed: 1 September 2021 | Appointed: 1 November 2023 | Fiona is the CEO of Barts Charity, a health foundation Isabel has over 25 years’ experience working with growth with a £550 million financial investment and commercial companies as a corporate financier, equity investor, lender property portfolio. Barts Charity funds transformational and as a CFO. Her previous roles include working with the medical research and innovation in healthcare delivery turnaround team in RBS, and as a Portfolio Director with 3i. and technology. Under Fiona’s leadership, over the last Until 2013 she was Finance and Operations Partner with five years, Barts has also allocated 25 per cent of its Albion Capital, specialising in the finance, operations and portfolio to private equity and venture funds, including administration of venture capital trusts. early stage venture and life sciences funds. Fiona brings a She has been a Non-Executive Director and Chair of Audit wealth of experience, spanning over 25 years, in investing and Risk Committee for an NHS Trust and previously served in and leading growth companies. Her early career was in as Chair of St. Albans Community Bank. Isabel is currently a finance and private equity at Goldman Sachs and Murray Trustee of Bedford School Foundation Trust. Johnson Private Equity, and she then had a successful entrepreneurial career prior to joining Barts Charity in 2016 Isabel is a Fellow of the Institute of Chartered Accountants including, five years at Social Finance UK, a leading impact in England and Wales and holds an MBA from London investing and advisory firm. Fiona is a Trustee of John Business School. Lyons, the Chair of Lifting Limits and sits on the Barts Life Sciences Advisory Board. Fiona has an MBA from INSEAD. Beneficial Shareholding: 37,261 ordinary shares 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 Annual Report and Audited Financial Statements 2024 37 02 Directors’ report ## Directors’ report ### The Directors of Baronsmead Venture During the year, the Company sold 15,000 ordinary shares from Treasury. The total amount received by the Company ### Trust plc (the Company) (registered number for these shares was £7, 8 9 0. Shares will not be sold out of ### 03504214) present their Annual Report and Treasury at a discount wider than the discount at which the ### Audited Financial Statements of the Company shares were initially bought back by the Company. ### for the year ended 30September 2024. As at 30 September 2024, the Company’s issued share capital was as follows: % of ### Shares and shareholders Shares in Nominal Shares Total issue Value ### Share capital In issue 424,464,819 100 £42,446,481.90 Under the terms of the prospectus published by the Held in Treasury 37,586,162 8.85 £3,758,616.20 Company on 24 November 2023, the Company issued a In circulation 386,878,657 91.15 £3 8 ,687,865.70 total of 42,843,562 (nominal value of £4,284,356.2) ordinary shares during the year ended 30 September 2024 by way of The total voting rights as at 30September 2024 were three allotments, raising approximately £25 million (before 386,878,657. Since then, the Company has brought back costs). Details of these allotments are as set out below: 4,169,361 shares, resulting in the total voting rights being 382,709,296 as at the date of this report. | Allotment | Admission | | No. shares | | | | --- | --- | --- | --- | --- | --- | | date | | date | | issued Issue price | | | 26/01/2024 02/02/2024 16,089,415 Between | | | | | Shareholders | 57.95p – 61.23p Each 10p ordinary share entitles the holder to attend and 15/02/2024 22/02/2024 7,702,241 Between vote at general meetings of the Company, to participate in 56.92p – 59.68p the profits of the Company, to receive a copy of the Annual 28/03/2024 03/04/2024 19,051,906 Between Report and Financial Statements and to participate in a final 56.80p – 59.56p distribution upon the winding up of the Company. At the AGM held on 5 March 2024, the Company was There are no restrictions on voting rights, no securities granted authority to purchase up to 14.99per cent of the carry special rights and the Company is not aware of any Company’s ordinary share capital in issue at that date on agreement between holders of securities that result in which the Notice of AGM was published, amounting to restrictions on the transfer of securities or on voting rights. 52,423,803 ordinary shares. There are no agreements to which the Company is party that may affect its control following a takeover bid. During the year, the Company bought back a total of 7,514,412 ordinary shares to be held in Treasury, In addition to the powers provided to the Directors representing 1.8per cent of the issued share capital as under UK company law and the Company’s Articles of at 30September 2024, with an aggregate nominal value Association, at each AGM the shareholders are asked to of £751,441. The total amount paid for these shares was authorise certain powers in relation to the issuing and £4,006,241. As at 30 September 2024, the Company had purchasing of the Company’s own shares. Details of the the remaining authority to buy back 48,010,050 shares powers granted at the AGM held in 2024, all of which remain under the resolution approved at the 2024 AGM. 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 3per cent of the total voting rights. 38 Annual Report and Audited Financial Statements 2024 02 Directors' report - Directors' report ## Tax free dividends The Company has paid or declared the following dividends for the year ended 30 September 2024: | Dividends | £'000 | | --- | --- | | Interim dividend of 1.75p per ordinary share paid on 9 September 2024 | 6,793 | | Final dividend of 2.0p per 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 30 September 2024. Subject to shareholder approval at the AGM, a final dividend of 2.0p per share will be paid on 17 March 2025 to shareholders on the register at 14 February 2025. The ex-dividend date will be 13 February 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 page 44 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. ## 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 30 September 2024, the Company held cash balances and investments in readily realisable securities with a value of £27 million, representing 13 per cent of the Company's NAV. Annual Report and Audited Financial Statements 2024 39 02 Directors’ report - Directors’ report The Company has no debt, and it is expected that the Further information in relation to the Manager’s integration Company will remain ungeared for the foreseeable future. of ESG factors in management of the Company’s portfolio is set out on pages24 to 26 of the Strategic Report. The Directors have assessed the Company’s ability to cover its annual running costs under several liquidity Under Listing Rule 11.4.22(R), the Company, as a closed- scenarios in which the value of liquid assets (including ended investment fund, is exempt from complying with the AIM-traded investments and OEICs) has been subject Task Force on Climate-related Financial Disclosures. to sensitivity analysis. The Directors noted that under none of these scenarios was the Company unable to cover its costs. ### Annual General Meeting The Company’s forecasts and cash flow projections, The Company intends to hold the next AGM on 12 March taking into account the current economic environment 2025, and all shareholders are invited to attend. The details and other potential changes in performance, show that the of the business put to the meeting, as well as information on Company has sufficient funds to meet both its contracted how to register will be included in the Notice of AGM and on expenditure and its discretionary cash outflows in the form the Baronsmead Venture Trust website. The Board is of the of the share buyback programme and dividend policy. 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 ### Future developments resolutions as set out in the Notice of Meeting, as they intend to do in respect of their own shareholdings. The outlook for the Company is set out in the Chair’s Statement on page9. ### Post balance sheet events ### Listing rule disclosure Post balance sheet events are disclosed in note 3.6 of the accounts. The Company confirms that there are no items which require disclosure under Listing Rule 6.6.4R in respect of By Order of the Board the year ended 30September 2024. Information required by DTR 4.1.8 is included in the Strategic Report on pages 5 to 35 and incorporated into ### Gresham House Asset Management Ltd this Directors’ report by reference. Company Secretary 5 New Street Square, London EC4A 3TW ### Streamlined energy and 23 December 2024 ### 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. 40 Annual Report and Audited Financial Statements 2024 02 Directors’ report ## Corporate governance ### This Corporate Governance statement forms The principles of the AIC code ### part of the Directors’ report. The AIC Code is comprised of five sections:  Board leadership and purpose  Division of responsibilities ### Background  Composition, succession and evaluation Under the UK Listing Rules, listed companies are required  Audit, risk and internal control to disclose how they have applied the principles and  Remuneration. complied with the provisions of the corporate governance code they follow. The provisions of the UK Corporate The Board’s Corporate Governance statement sets out Governance Code (“UK Code”), as issued by the Financial how the Company complies with each of the provisions Reporting Council (“FRC”) in July 2018, are applicable to the of the AIC Code. 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 AICCode, 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 30September 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 pagesreports on the Company’s compliance with the AIC Code. Annual Report and Audited Financial Statements 2024 41 02 Directors’ report - Corporate governance AIC Code Principle Compliance Statement BOARD LEADERSHIP AND PURPOSE A. A successful company Directors are fully engaged and committed to using their collective, extensive is led by an effective experience to foster healthy debate and drive business strategy for the long- board, whose role is to term sustainable success of the Company. The Board comprises Directors who promote the long-term have specific expertise in Venture Capital, VCTs and shareholder engagement. sustainable success of Further details of the Directors biographies can be found on page 37. All Directors the company, generating are independent and controls are in places to identify and manage conflicts of value for shareholders interest where these arise. and contributing to The Company’s investment objective is to achieve long-term investment returns widersociety. 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 purpose of the Company is also its investment objective, which is to achieve the company’s purpose, long-term investment returns for private investors, within a tax efficient structure. values and strategy, and This is achieved by investing in a diverse portfolio of primarily UK growth satisfy itself that these businesses whether unquoted or traded on AIM. and its culture are aligned. The Board adopts an open and inclusive culture in its interaction with the Alldirectors must act Manager, shareholders and other stakeholders, to support the delivery of its with integrity, lead by purpose, values and strategy. Further details of what the Directors consider example and promote the important element of culture can be found on page 34. desiredculture. C. The board should ensure The Board regularly reviews the performance of the Company and the that the necessary performance and resources of the Manager and service providers, to ensure the resources are in place for Company can meet its objectives. the company to meet its At each quarterly meeting, the Board receives a report on the performance of its objectives and measure investments benchmarked to the wider VCT sector, any industry issues, as well as performance against forecasts for future periods. them. The board should The Board has agreed specific KPIs with the Manager to enable both parties to also establish a framework monitor performance and compliance with the agreed investment policy. The of prudent and effective Directors regularly review the Company’s risk management framework, and seek controls, which enable additional information from the Manager to supplement these reports. risk to be assessed The Board holds an annual strategy meeting to set strategic and performance andmanaged. 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 The Board takes its responsibility to shareholders and stakeholders into account to meet its responsibilities and considers the opinions of all such parties when making any decision. to shareholders and The Directors place considerable importance on shareholder engagement and stakeholders, the board on communications with them and all other stakeholders. Shareholders who should ensure effective wish to contact the Board may do so by writing to the Chair at the Company’s engagement with, and Registered Office. All Directors make themselves available to meet shareholders encourage participation at the Company’s Shareholder presentation and AGM. from, these parties. The Directors’ Statement on meeting their responsibilities under Section 172 of the Companies Act 2006 can be found on pages32 to 35. 42 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Corporate governance AIC Code Principle Compliance Statement DIVISION OF RESPONSIBILITIES F. The Chair leads the board There is a clear division of responsibility between the Board, the Chair, the and is responsible for its Manager, and the Company’s third-party service providers. The Board has a overall effectiveness in policy which sets out the responsibilities of the Chair and the Senior Independent directing the company. Director which is available on the Company’s website. They should demonstrate The Chair is responsible for leading the Board and its overall effectiveness in objective judgement directing the affairs of the Company, ensuring that all Directors receive accurate, throughout their tenure timely and clear information and helping to promote a culture of openness and and promote a culture of debate in Board meetings. The Chair takes a leading role in ensuring effective openness and debate. communications with shareholders and other stakeholders. All of these areas are In addition, the Chair considered as part of the annual Board performance review, and more information facilitates constructive on the outcomes of the latest review can be found onpage49. board relations and the The Board meets regularly throughout the year and prior to each Board, Valuation effective contribution of all and Committee meeting. Additionally Directors meet between formal meetings to Non-Executive Directors, discuss matters where more time is required. and ensures that directors receive accurate, timely and clear information. G. The board should The Board comprised three Non-Executive Directors as at 30September consist of an appropriate 2024. MrMichael Probin is the Senior Independent Director and serves as an combination of directors intermediary for the Company’s shareholders. As at the date of this report, the (and, in particular, Board comprises of two female and one male Directors. independent non- Having considered the performance and independence of each Director, the executive directors) such Board has determined that they are independent in character and judgement and that no one individual or that there are no other relationships or circumstances which are likely to affect small group of individuals their judgement nor impair their independence. dominates the board’s As a result of the Board evaluation process, the Board determined that each decision making. 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 As part of the Board evaluation process, the contributions of each Director, and should have sufficient the time commitment made by each Director are considered. Directors’ other time to meet their commitments are regularly reviewed, and any new appointments are considered board responsibilities. by the other Directors to ensure there is no conflict of interest. It was concluded They should provide that each Director provided appropriate levels of commitment and challenge to constructive challenge, the Board and provided the Company and service providers with guidance and strategic guidance, offer advice when required. specialist advice and hold third-party service providers to account. I. The board, supported by The Directors have access to the advice and services of the Company Secretary the company secretary, who is responsible to the Board for ensuring that Board procedures are in place should ensure that it has and followed, and that applicable rules and regulations are complied with. The the policies, processes, Company Secretary is also responsible for ensuring good information flows information, time and between all parties. The Directors also have access to independent professional resources it needs in order advice at the Company’s expense where they judge it necessary to discharge to function effectively and their responsibilities properly. efficiently. Annual Report and Audited Financial Statements 2024 43 02 Directors’ report - Corporate governance AIC Code Principle Compliance Statement COMPOSITION, SUCCESSION AND EVALUATION J. Appointments to the The Board has established a Nomination Committee, which leads the board should be subject appointment process of new Directors as and when vacancies arise. The Board to a formal, rigorous and has adopted a formal Diversity policy. Further details of the policy can be found on transparent procedure, and page 49. 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. K. The board and its The Directors’ biographical details are set out on page37 and demonstrate the committees should wide range of skills and experience that each Director brings to the Board. have a combination of The Board maintains a Tenure and Reappointment policy for all Directors to skills, experience, and ensure that the Board continues to have the right balance of skills and experience knowledge. Consideration aligned with the strategic plans of the Company. should be given to the The Board recognises the importance of Directors maintaining independence of length of service of character and judgement. the board as a whole Both the Nomination Committee and the Board annually review the composition and membership of the Board and the succession plans for each Director to ensure that the Board regularlyrefreshed. has the skills and experience necessary for the management of the Company, having regard to anticipated challenges andopportunities. L. Annual evaluation of the The Board evaluates its own performance and that of its Committees and the board should consider its Chair on an annual basis. For the period under review, this was carried out by way composition, diversity and of a questionnaire and subsequent discussions. The details of, and results of the how effectively members annual Board Evaluation process conducted during the period can be found on work together to achieve page49. objectives. Individual evaluation should demonstrate whether each director continues to contribute effectively. AUDIT, RISK AND INTERNAL CONTROL M. The board should establish The Audit Committee has put in place a Non-Audit Services policy which ensures formal and transparent that any work outside the scope of the standard audit work requires prior approval policies and procedures to by the Audit Committee or the Board to avoid impairing the external auditor’s ensure the independence independence. and effectiveness of No non-audit services have been provided by BDO LLP during the financial external audit functions year, therefore the Committee continues to believe that BDO LLP remains and satisfy itself on the independent. Further information on the independence of the external auditor integrity of financial and and the work of the Audit Committee can be found on pages46 to 48. narrative statements. 44 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Corporate governance AIC Code Principle Compliance Statement N. The board should The Audit Committee has reviewed the Audited Annual Report and Financial present a fair, balanced Statements and agrees that it presents a fair, balanced, and understandable and understandable assessment of the Company’s position and prospects. assessment of the company’s position andprospects. O. The board should establish Risks faced by the business are considered, monitored and assessed on a procedures to manage regular basis by the Manager and formally by the Board at each Board meeting. risk, oversee the internal For details in respect to the Company’s principal risks and uncertainties and the control framework and appropriate measures taken to mitigate each risk can be found on pages22 to23. determine the nature and The Audit Committee receives service provider internal control reports which are extent of the principal collated by the Manager. The performance of all third party service providers is risks the company is reviewed at least annually by the Management Engagement and Remuneration willing to take in order Committee. Further details can be found on pages52 to56. to achieve its long-term strategicobjectives. REMUNERATION P. Remuneration policies With respect to Directors’ remuneration, the Company follows the and practices should recommendation of the AIC Code that Non-Executive Directors’ remuneration be designed to support should reflect the time commitment and responsibilities of the role. The strategy and promote long- Company’s policy is that remuneration of Non-Executive Directors should reflect term sustainable success. 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 capitaltrusts. Q. A formal and transparent The Board’s Management Engagement and Remuneration Committee procedure for developing considers at least annually the level of the Board’s fees, in accordance with the policy remuneration Remuneration Policy approved by shareholders at the AGM held in 2023. Further should be established. No details on the Directors’ remuneration is contained in the Directors’ Remuneration director should be involved Report on pages52 to 56. in deciding their own remuneration outcome. R. Directors should exercise All Directors of the Company are independent Non-Executive Directors, and independent judgement all Directors are members of the Management Engagement and Remuneration and discretion when Committee. Any decision about remuneration is taken after considering the skill authorising remuneration and time commitment required, the performance of the Company and current outcomes, taking account market conditions. of company and individual performance, and wider circumstances. Annual Report and Audited Financial Statements 2024 45 02 Directors’ report ### 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 Review of Annual and Half-Yearly ### FinancialStatements ### Membership The Audit Committee reviewed the Annual Financial Statements and the Half-Yearly Financial Statements All Directors are members of the Audit Committee, and during the period, with a particular focus on areas requiring this includes the Chair of the Board. All Audit Committee judgment and on the critical accounting policies, and members consider that, individually and collectively, they made recommendations to the Board in relation to these are each appropriately experienced to fulfil their role on financial statements. the Audit Committee through recent financial experience gained from senior positions in the venture capital and/or A significant area of focus during these reviews was the financial services sectors. The Audit Committee Chair, Ms valuation of the unquoted investments. The Manager Isabel Dolan, is a qualified Chartered Accountant (FCA). 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 Key responsibilities: about the investee companies as well as current index and market data. 1 Reviewing the content and integrity of the Annual and Half-Yearly Financial Statements: The Audit Committee spent time discussing the Manager’s 2 Reviewing compliance with HMRC VCT tests: valuation process, methodology and control systems used to draft valuations of the Company’s investment 3 Reviewing the Company’s internal control and risk portfolio. The Manager also commissioned a sample of four management systems. of the more material unquoted investments for external 4 Reviewing the remuneration and terms of appointment of independent unquoted valuation in parallel with their own, the external auditor: to provide third-party assurance and risk mitigation to the 5 Reviewing the effectiveness of the external audit process Audit Committee and the Board. in accordance with regulatory requirements: As part of the formal valuations process, the Board met 6 Ensuring auditor objectivity and independence is quarterly to assess the appropriateness of the estimates safeguarded, particularly in the context of the provision of and judgements made by the Manager during the valuation non-audit services: and process and used this information as the basis for their 7 Providing a forum through which the auditor may approval of valuations. report to the Board. ### Compliance with the VCT tests ### Matters considered by the Audit Committee The Company engages PwC as its VCT Status Adviser to ### during the year advise on its compliance with the legislative requirements relating to VCTs. The Audit Committee met three times during the year and also undertook work outside of these formal meetings. The Audit Committee met with PWC to review their report At these meetings, the Committee has addressed the which demonstrated ongoing compliance with HMRC following significant issues: 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. 46 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Audit Committee report ### Internal controls and risk Review of governance and future changes ### management systems During the year under review, the Audit Committee considered governance matters, including the monitoring The Audit Committee oversees the operation of the of the changes to the AIC Code. Company’s risk management and internal control systems, with procedures designed to identify and manage, rather The Audit Committee has started to consider which than completely eliminate, risk. changes to its processes and procedures will be necessary as part of the 1 January 2026 introduction of Provision 34 The Company is exposed to a variety of risks and of the AIC Code. This will require the Board to report on uncertainties. The Board, through delegation to the Audit the monitoring and reviewing of the Company’s internal Committee, has undertaken a review of the principal risks controls, including those of the Manager and third party facing the Company, together with a review of any emerging suppliers. Directors will be required to make a declaration to risks that may have arisen during the year to 30 September shareholders on the effectiveness of the material controls, 2024, including those that may threaten its business model, and describe any that have not operated effectively at the future performance, solvency or liquidity. A statement of end of each financial year. 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 Going concern and long-term viability exposed to, including, market, investment, operational and regulatory risks, and the controls employed to mitigate The Audit Committee has considered the Company’s long- these risks. The residual risks are rated, taking into account term financial requirements and viability for the next three their potential impact, as well as the mitigating factors and, years, using forecasts provided by the Manager. where necessary, corrective action is taken. This assessment included the review of possible The Company does not have an internal audit function. All fluctuations in investment valuations, and the impact of the Company’s management functions are delegated to changes in interest rates, inflationary pressures and other independent third parties whose controls are monitored macro-economic factors, on the Company’s liquidity by the Audit Committee and ultimately the Board. It is and on financial statements disclosures. As a result of therefore felt that there is no need for an internal audit this assessment, the Audit Committee concluded that function. The need for an internal audit function is the Company had adequate resources to continue in reconsidered by the Audit Committee on an annual basis. operation and meet its liabilities as they fall due both for the forthcoming year and until 2027. Related long-term viability The Audit Committee receives service provider ISA3402 and going concern statements are included on page 30 controls and internal audit reports which provide a and pages 39 to 40 respectively. 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 ### External Auditor reports and the further enquires undertaken, the Audit Committee was satisfied that each service provider had The Audit Committee met the Audit Partner from BDO the control systems in place to continue to deliver their LLP (“BDO”) on two occasions during the year, to discuss service effectively. 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 ### Cyber security independence. Since the year end, and as part of the review of the 2024 audit process, the Committee has met the BDO The Manager has reviewed the cyber security procedures Partner in the absence of the Manager to discuss progress and controls of its service providers on behalf of the Board, of the audit and issues that arose during the audit. The and the Manager’s Compliance Officer has presented Audit Committee Chair has also separately met with the the Manager’s cyber security procedures to the Audit BDO Audit Partner during the year. Committee. The Audit Committee continues to receive updates from the Manager to ensure that the procedures The Audit Committee has also discussed the outcome of in place are robust and enable ongoing compliance with BDO’s July 2024 Financial Reporting Council (“FRC”) annual the applicable legislation and regulations, as well as with assessment of Tier 1 audit quality with the Audit Partner. best practice. 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. Annual Report and Audited Financial Statements 2024 47 02 Directors’ report - Audit Committee report ### On the basis of this inspection, the FRC has identified that Non-audit services BDO needs to significantly improve its audit quality. In response to these findings, BDO has provided to the FRC, In line with the FRC’s guidance, the Audit Committee amongst other things, a Single Quality Plan (SQP) which is in maintains a non-audit services policy to help to ensure the process of being implemented and which is subject to that the Auditor’s independence and objectivity is not ongoing monitoring by the FRC. impaired. The policy is reviewed annually and outlines those services that the external Auditor is prohibited from The FRC have stated that they will undertake follow up providing as well as those that require pre-approval from reviews, maintain intensive supervision and will review the Audit Committee. BDO’s progress against the SQP during 2025. During the period, no non-audit services have been The Audit Committee has reviewed the detailed FRC provided by BDO. Accordingly, and taking into account inspection report, and has discussed the FRC’s findings the confirmation from the Auditor on the result of BDO’s along with BDO’s action plan with the Audit Partner. BDO independence reviews, the Audit Committee was satisfied have confirmed to the Audit Committee that they remain that BDO remains independent. 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 ### Review of Audit Committee effectiveness and informed the setting of materiality and audit testing ### Terms of Reference parameters as described in the Auditors report on pages 58 to 64. The Audit Committee has reviewed its effectiveness, both as part of a focus on continuing improvement, and specifically The Audit Committee notes the confirmation of progress in the context of the responsibilities outlined in it’s Terms of that BDO has provided, and will continue to monitor their Reference. Since the year end, the Audit Committee’s Terms progress, including through the FRC inspection in 2025. of Reference have been reviewed and can be found on the Company’s website at www.baronsmeadvcts.co.uk. 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 Isabel Dolan proposed at the 2025 AGM. Audit Committee Chair An audit fee of £53,000 (exclusive of VAT) has been agreed 23 December 2024 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. 48 Annual Report and Audited Financial Statements 2024 02 Directors' report # 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 30 September 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. Annual Report and Audited Financial Statements 2024 49 02 Directors’ report - Nomination Committee report The Nomination Committee aims to attract directors with Number diverse skills and experience and recommends appointments of senior to the Board, based on merit, so vacancies are fulfilled by positions on the most qualified candidates. When considering future the Board appointments, the Nomination Committee seeks to promote Number (CEO, CFO, diversity of gender, social and ethnic backgrounds as well as Ethnic of Board Percentage SID and cognitive and personal strengths to aid effective decision background members of the Board Chair)* making, and looks for candidates, whose skills, knowledge and experience align with the Company’s longer-term White British strategic aims. The Committee considers the use of external or other White consultants when shortlisting candidates, if required. (including minority White The FCA requires companies like BVT to report against the groups) 3 100% 2 following diversity and inclusion targets: Mixed/Multiple a) At least 40per cent of individuals on the Board to Ethnic Groups – – be women; Asian/Asian b) At least one senior Board position to be held by a British – – woman (such as Chair, /SID, Chief Executive Officer (“CEO”) or Chief Financial Officer (“CFO”); and Black/African/ Caribbean/Black C) At least one individual on the Board to be from a minority British – – ethnic background. Other ethnic Accordingly, in line with Listing Rule 6 Annex 1R, the below group, including tables in the prescribed format, show the gender and ethnic Arab – – background of the Directors at the date of this Report. Not specified/ prefer not to say – – Number of senior * The company is externally managed and does not have executive positions on management functions, specifically it does not have a CEO or CFO. the Board The information presented in these tables was collected on a self- Number (CEO, CFO, reporting basis. Gender identity of Board Percentage SID and The Board is pleased to have met the two or sex members of the Board Chair)* recommendations of having at least 40per cent female Men 1 33.3% 1 representation on the Board and at least one senior Board position held by a woman. Diversity in all its forms, Women 2 66.6% 1 including ethnic diversity, is being taken into account as the Not specified/ Company is searching for a new Board member. prefer not to say – – ### 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. 50 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Nomination Committee report ### 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. Management Engagement and Remuneration Nomination Board of Directors Audit Committee Committee 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 Annual Report and Audited Financial Statements 2024 51 02 Directors’ report ## Directors’ remuneration report The Board has prepared this report in accordance with the The Committee remains confident in the Manager’s requirements of the Large and Medium Sized Companies capabilities and its ability to continue to achieve results and Groups (Accounts and Reports) (Amendment) through finding, making, managing and selling investments Regulations 2013. on behalf of the Company and by adapting to changes in the regulatory environment as necessary. 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 Relationship with the Manager in the Independent Auditor’s Report on pages58 to 64. The Board continues to work closely with the Manager An ordinary resolution to approve the Directors’ Remuneration concerning the performance of its duties and notes that Policy and the Directors’ Remuneration Report will be Gresham House supports the UK Stewardship Code proposed at the forthcoming AGM on 12March 2025. and complies with its guidelines regarding proxy voting and engagement. ### Management Engagement and The MERC keeps the performance of the Manager under regular review. In accordance with the requirements of the ### Remuneration Committee Report 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 ### Chair: Mr Michael Probin 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 ### Annual Statement from the Chair of Committee also regularly reviews the performance of each of the other service providers and any matters concerning ### the Management Engagement and their respective appointments. ### Remuneration Committee ### The Management Engagement and Remuneration Remuneration Committee (‘MERC’ or ‘the Committee’) is chaired by Michael Each year, when the MERC reviews the Directors’ fees. The Probin and comprises all the Directors of the Company. Committee takes into account all of the Directors’ duties and As explained in the Corporate Governance Statement on responsibilities, and how the Board members discharged pages41 to 45, given the size and nature of the Company them. The Committee also considers whether the fees are it is felt appropriate that all Directors are members of the comparable with others in the VCT industry, relative to the Committee. The Company has no executive directors and NAV, so that the Board can attract and retain suitably qualified considers all the Non-Executive Directors to be independent. candidates, in accordance with the Company’s remuneration The Committee’s key responsibilities are: policy. In addition, the Committee also has regard to the 1 Determining and agreeing with the Board the Directors’ workload that individual Directors and the Chair undertake remuneration policy and the fees for the Company’s Non- as members of the Board, feedback from shareholders, the Executive Directors, within the limits set in the Company’s performance of the Company’s portfolio, and the prevailing Articles of Association; rate of Consumer Price Index (“CPI”) at the time. 2 Reviewing the appropriateness of the Manager’s The Directors set the Company’s investment strategy as well appointment (including key executives thereof) together as its policy objectives. They then monitor the performance with the terms and conditions of the appointment; and of the Company against the strategic and policy objectives. 3 Reviewing (at least annually) the contractual relationship Directors prepare for, and attend, quarterly Board meetings, with the Manager and scrutinising and holding the and the quarterly valuation meetings, through which they Manager to account for its performance. rigorously review the valuations of unquoted investee companies to arrive at appropriate valuations. The Directors monitor compliance with all regulatory matters including the ### Manager duties various VCT tests that are vital to maintain its VCT qualifying status. The Directors will assess the requirement for further The Board delegates the execution of the Company’s fundraisings and attend various Board meetings concerning investment strategy and the management of assets to the the preparation for and implementation of these fundraisings. Manager through the Management Agreement, subject to They are also responsible for monitoring the key risks to the the Board being kept informed of all material developments Company and for scrutiny of all costs. Where needed, the in the Company’s portfolio. 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. 52 Annual Report and Audited Financial Statements 2024 02 Directors' report - Directors' remuneration report 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 30 September 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 30 September 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 30 September 2024 | | % change from 2024 to 2025 | | --- | --- | --- | --- | --- | --- | --- | | | Supplement | 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 1 February 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 30 September 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. Annual Report and Audited Financial Statements 2024 53 02 Directors' report - Directors' remuneration report 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 30 September 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 30 September 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 pages 7 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. 54 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Directors’ remuneration report BVT Share Price and the VCT Generalist Share Price Total Return Performance Graph % 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 BVT Share Price Total Return VCT Generalist All-Share Total Return Source: FE Analytics ### 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 30September Percentage change from | | | | | | | | | | | 2023 to | | | 2022 to | | | 2021 to | | | 2020 to | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2024 | | 2023 | | 2022 | | 2021 | | 2020 | | | 2024 | | | 2023 | | | 2022 | | | 2021 | | | | £ | | £ | | £ | | £ | | £ | | | % | | | % | | | % | | | % | 1 Isabel Dolan 29,012 N/A N/A N/A N/A N/A N/A N/A N/A 2 Les Gabb 7,912 29,662 28,250 27,4 0 0 27,20 0 N/A 5.0 3.1 0.7 3 Susannah Nicklin 23,737 29,662 28,250 27,40 0 27,20 0 N/A 5.0 3.1 0.7 4 Michael Probin 31,649 29,662 28,250 8,199 N/A 7% 5.0 N/A N/A 5 Fiona Miller Smith 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 14June 2021. 5. Fiona Miller Smith was appointed as Non-Executive Director on 1September 2021 and appointed Chair of the Company on 31March 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. Annual Report and Audited Financial Statements 2024 55 02 Directors’ report - Directors’ remuneration report | | Year to | | | Year to | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | 30September | | | 30September | | | | | | | 2024 | | | 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 30September 2024 were 0.061per cent and for the year to 30September 2023 were 0.062per cent. There have been no changes to these holdings between ### Directors’ interests (audited) 30September 2024 and the date of this report. There is no requirement under the Company’s Articles Approved by the Board of Directors and signed by 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 30September 2024 ### were as follows: Michael Probin Chair of the Management Engagement | 30September | | | | 30September | | | | and Remuneration Committee | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | 2024 | | | | 2023 | | | | | Ordinary | | | | Ordinary | | 23 December 2024 | | | 10p shares | | | | 10p shares | | | | 1 Isabel Dolan 37,261 N/A 2 Les Gabb N/A 167, 509 3 Susannah Nicklin 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. Annual Report and Audited Financial Statements 2024Annual Report and Audited Financial Statements 202456 02 Directors’ report ## Statement of Directors’ responsibilities Under applicable law and regulations, the Directors are also ### Statement of Directors’ responsible for preparing a Strategic Report, Directors’ ### responsibilities in respect of Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and ### the 2024 Annual Report and those regulations. ### Financial Statements The Directors are responsible for ensuring the Annual The Directors are responsible for preparing the Annual Report and the financial statements are made available Report and the financial statements in accordance with on a website. Financial statements are published on applicable law and regulations. the Company’s website in accordance with legislation in the United Kingdom governing the preparation and Company law requires the Directors to prepare financial dissemination of financial statements, which may vary from statements for each financial year. Under that law, they have legislation in other jurisdictions. The maintenance and elected to prepare the financial statements in accordance integrity of the Company’s website is the responsibility of with UK Accounting Standards, including FRS 102 The the Directors. The Directors’ responsibility also extends Financial Reporting Standard applicable in the UK and to the ongoing integrity of the financial statements Republic of Ireland. contained therein. 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 Responsibility statement of the and of the profit or loss of the Company for that period. ### Directors in respect of the annual In preparing these financial statements, the Directors ### are required to: financial report  select suitable accounting policies and then apply We confirm that to the best of our knowledge: them consistently;  the financial statements, prepared in accordance with the  make judgements and estimates that are reasonable applicable set of accounting standards, give a true and and prudent; fair view of the assets, liabilities, financial position and  state whether applicable UK Accounting Standards profit or loss of the Company taken as a whole; and have been followed, subject to any material departures  the management report, which incorporates the disclosed and explained in the financial statements; Chair’s Statement, the Strategic Report and Directors’  assess the Company’s ability to continue as a going report includes a fair review of the development and concern, disclosing, as applicable, matters related to performance of the business and the position of the going concern; and Company, together with a description of the principal  use the going concern basis of accounting unless they risks and uncertainties that it faces. either intend to liquidate the Company or to cease We consider the Annual Report and Financial Statements, operations or have no realistic alternative but to do so. taken as a whole, is fair, balanced and understandable and The Directors are responsible for keeping adequate provides the information necessary for shareholders to accounting records that are sufficient to show and explain assess the Company’s position and performance, business the Company’s transactions and disclose with reasonable model and strategy. accuracy at any time the financial position of the Company On behalf of the Board 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 Fiona Miller Smith error, and have general responsibility for taking such steps Chair as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and 23 December 2024 otherirregularities. Annual Report and Audited Financial Statements 2024 57 02 Directors’ report ## Independent auditor’s report ## to the members of Baronsmead Venture Trust plc ### Opinion on the financial statements Conclusions relating ### In our opinion the financial statements: to going concern  give a true and fair view of the state of the Company’s In auditing the financial statements, we have concluded affairs as at 30 September 2024 and of its profit for the that the Directors’ use of the going concern basis of year then ended; accounting in the preparation of the financial statements  have been properly prepared in accordance with United is appropriate. Our evaluation of the Directors’ assessment Kingdom Generally Accepted Accounting Practice; and of the Company’s ability to continue to adopt the going concern basis of accounting included:  have been prepared in accordance with the requirements of the Companies Act 2006.  Obtaining the Venture Capital Trust (“VCT”) compliance reports prepared by management’s expert during the We have audited the financial statements of Baronsmead year and as at year end and reviewing the calculations Venture Trust plc (the ‘Company’) for the year ended 30 therein to check that the Company was meeting its September 2024 which comprise the income statement, requirements to retain VCT status; the balance sheet, the statement of changes in equity,  Consideration of the Company’s expected future the statement of cash flows and notes to the financial compliance with VCT legislation, the absence of bank statements, including a summary of significant accounting debt, contingencies and commitments and any market or policies. The financial reporting framework that has been reputational risks; applied in their preparation is applicable law and United  Reviewing the forecasted cash flows that support the Kingdom Accounting Standards, including Financial Directors’ assessment of going concern, challenging Reporting Standard 102 The Financial Reporting Standard assumptions and judgements made in the forecasts, applicable in the UK and Republic of Ireland (United and assessing them for reasonableness. In particular, we Kingdom Generally Accepted Accounting Practice). considered the available cash resources relative to the forecast expenditure which was assessed against the prior year for reasonableness; and ### Basis for opinion  Evaluating the Directors’ method of assessing the going concern in light of market volatility and the present We conducted our audit in accordance with International uncertainties in economic recovery created by macro- Standards on Auditing (UK) (ISAs (UK)) and applicable law. economic factors. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of Based on the work we have performed, we have not the financial statements section of our report. We believe identified any material uncertainties relating to events that the audit evidence we have obtained is sufficient and or conditions that, individually or collectively, may cast appropriate to provide a basis for our opinion. Our audit significant doubt on the Company’s ability to continue as a opinion is consistent with the additional report to the going concern for a period of at least twelve months from audit committee. when the financial statements are authorised for issue. In relation to the Company’s reporting on how it has ### Independence applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to Following the recommendation of the audit committee, the Directors’ statement in the financial statements about we were appointed by the Board of Directors on 28 May whether the Directors considered it appropriate to adopt 2021 to audit the financial statements for the year ended the going concern basis of accounting. 30 September 2021 and subsequent financial periods. The period of total uninterrupted engagement including Our responsibilities and the responsibilities of the Directors retenders and reappointments is 4 years, covering the with respect to going concern are described in the relevant years ended 30 September 2021 to 30 September 2024. sections of this report. 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. 58 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Independent auditor’s report ### 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 | We consider the valuation | Our unquoted investments valuation testing was risk based | | --- | --- | --- | | investments | of unquoted investments to | where individual investments were assessed based on | | | be the most significant audit | criteria such as fair value at year end exceeding performance | | (Notes 2.3, 3.3 of the | area as there is a high level of | materiality, fair value at year end exceeding performance | | financial statements) | estimation uncertainty involved | materiality and untested in detail in the prior year, movement | | | in determining the unquoted | between current year and prior year fair value exceeding | | | investment valuations. | performance materiality, change in the valuation methodology | from prior year, change in the multiples (Revenue/Earning) | There is an inherent risk of | from prior year by 10% or more, change in the gross enterprise | | --- | --- | | management override arising | value from prior year by 10% or more and any change in the | | from the unquoted investment | discount/premium from prior year. | valuations being prepared by the Manager, who is remunerated For 100% of the unquoted portfolio we: based on the value of the net  Considered whether the valuation methodology was assets of the VCT, as shown in the most appropriate in the circumstances under the note 2.6. 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 Annual Report and Audited Financial Statements 2024 59 02 Directors' report - Independent auditor's report | 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 benchmark applied** | In setting materiality, we have had regard to the nature and disposition of the investment portfolio. Given that the VCT's portfolio is 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 performance materiality** | 75% of materiality | | | **Rationale for the percentage applied for performance materiality** | The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year. | | 60 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Independent auditor’s report ### Reporting threshold Other information We agreed with the Audit Committee that we would The directors are responsible for the other information. report to them all individual audit differences in excess The other information comprises the information included of £187 ,000 (2022: £120 ,000). We also agreed to report in the annual report other than the financial statements differences below this threshold that, in our view, warranted and our auditor’s report thereon. Our opinion on the reporting on qualitative grounds. 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  The Directors’ statement with regards to the appropriateness of adopting the going longer-term viability concern basis of accounting and any material uncertainties identified set out on pages39 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 page30. Other Code provisions  Directors’ statement on fair, balanced and understandable set out on page57;  Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages22 to 23;  The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages46 to 48; and  The section describing the work of the audit committee set out on pages46 to 48. Annual Report and Audited Financial Statements 2024 61 02 Directors’ report - Independent auditor’s report ### 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 In our opinion, based on the work undertaken in the course of the audit: Directors’ report  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 have nothing to report in respect of the following matters in relation to which the we are required to Companies Act 2006 requires us to report to you if, in our opinion: report by exception  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 Auditor’s responsibilities for the ### As explained more fully in the Statement of Directors’ audit of the financial statements responsibilities, the Directors are responsible for the Our objectives are to obtain reasonable assurance about preparation of the financial statements and for being whether the financial statements as a whole are free from satisfied that they give a true and fair view, and for such material misstatement, whether due to fraud or error, internal control as the Directors determine is necessary to and to issue an auditor’s report that includes our opinion. enable the preparation of financial statements that are free Reasonable assurance is a high level of assurance but is from material misstatement, whether due to fraud or error. not a guarantee that an audit conducted in accordance with In preparing the financial statements, the Directors are ISAs (UK) will always detect a material misstatement when responsible for assessing the Company’s ability to continue it exists. Misstatements can arise from fraud or error and as a going concern, disclosing, as applicable, matters are considered material if, individually or in the aggregate, related to going concern and using the going concern basis they could reasonably be expected to influence the of accounting unless the Directors either intend to liquidate economic decisions of users taken on the basis of these the Company or to cease operations, or have no realistic financial statements. alternative but to do so. 62 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Independent auditor’s report ### Extent to which the audit was capable of Fraud ### detecting irregularities, including fraud We assessed the susceptibility of the financial statement to material misstatement including fraud. Irregularities, including fraud, are instances of non- compliance with laws and regulations. We design Our risk assessment procedures included: procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,  Enquiry with the Manager, the Administrator and those including fraud. The extent to which our procedures are charged with governance and the Audit Committee capable of detecting irregularities, including fraud is regarding any known or suspected instances of fraud; detailed below:  Obtaining an understanding of the VCT policies and procedures relating to: ### Non-compliance with laws and regulations – Detecting and responding to the risks of fraud; and – Internal controls established to mitigate risks Based on: related to fraud.  Our understanding of the Company and the industry in which it operates;  Review of minutes of meeting of those charged with governance for any known or suspected  Discussion with the Manager, the Administrator and those instances of fraud; charged with governance and the Audit Committee; and  Discussion amongst the engagement team as to how and  Obtaining and understanding of the Company’s policies where fraud might occur in the financial statements; and and procedures regarding compliance with laws and regulations; and  Considering performance incentive schemes and performance targets and the related financial statement we considered the significant laws and regulations to be areas impacted by these. the Companies Act 2006, the FCA listing and DTR rules, the principles of the UK Corporate Governance Code, industry Based on our risk assessment, we considered the areas practice represented by the Statement of Recommended most susceptible to fraud to be the valuation of unquoted Practice: Financial Statements of Investment Trust investments and management override of controls. Companies and Venture Capital Trusts (“the SORP”) with consequential amendments and the applicable financial Our procedures in respect of the above included: reporting framework. We also considered the Company’s  In addressing the risk of valuation of unlisted investments, qualification as a VCT under UK tax legislation. the procedures set out in the key audit matter section in our report were performed; Our procedures in respect of the above included:  In addressing the risk of management override  Agreement of the financial statement disclosures to of control, we: underlying supporting documentation;  Enquiries of the Manager, the Administrator and those – Tested journals posted in the preparation of the charged with governance relating to the existence of any financial statements which met a defined risk criteria by non-compliance with laws and regulations; agreeing to supporting documentation and evaluating whether there was evidence of bias by the Manager and  Obtaining the VCT compliance reports prepared by the Administrator that represented a risk of material management’s expert during the year and as at year misstatements due to fraud. end and reviewing their calculations to check that – Incorporated unpredictability into our testing by the Company was meeting its requirements to retain selecting a sample of immaterial expenses that would VCT status; and not otherwise have been selected for testing  Reviewing minutes of meeting of those charged with – Reviewed the significant judgements made in the governance throughout the period for instances of non- unlisted investment valuations and considering compliance with laws and regulations. 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. Annual Report and Audited Financial Statements 2024 63 02 Directors’ report - Independent auditor’s report We also communicated relevant identified laws and ### Use of our report regulations and potential fraud risks to all engagement team members, who were deemed to have the appropriate This report is made solely to the Company’s members, competence and capabilities and remained alert to any as a body, in accordance with Chapter 3 of Part 16 of the indications of fraud or non-compliance with laws and Companies Act 2006. Our audit work has been undertaken regulations throughout the audit. so that we might state to the Company’s members those matters we are required to state to them in an auditor’s Our audit procedures were designed to respond to risks report and for no other purpose. To the fullest extent of material misstatement in the financial statements, permitted by law, we do not accept or assume responsibility recognising that the risk of not detecting a material to anyone other than the Company and the Company’s misstatement due to fraud is higher than the risk of members as a body, for our audit work, for this report, or for not detecting one resulting from error, as fraud may the opinions we have formed. 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 ### Vanessa Bradley is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. (Senior Statutory Auditor) A further description of our responsibilities is available on For and on behalf of BDO LLP, Statutory Auditor the Financial Reporting Council’s website at: www.frc.org. London, UK uk/auditorsresponsibilities. This description forms part of 23 December 2024 our auditor’s report. BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). 64 Annual Report and Audited Financial Statements 2024 02 Directors’ report - Independent auditor’s report 65Annual Report and Audited Financial Statements 2024 ## Financial ## Statements ## 03 03 Financial Statements ## Income statement For the year ended 30September 2024 | | | | | Year ended | | | | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | 30September 2024 | | | | | | 30September 2023 | | | | | | Revenue | | | | Capital | Total | Revenue | | | | Capital | Total | | Notes | | £’000 | | | £’000 | £’000 | | £’000 | | | £’000 | £’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 pages71 to 87 form part of these financial statements. Annual Report and Audited Financial Statements 2024 67 03 Financial Statements ## Statement of changes in equity For the year ended 30September 2024 Non-distributable reserves Distributable reserves Called-up | | share | | Share | Revaluation | | | Capital | Revenue | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | capital | premium | | | reserve | | reserve* | reserve | | Total | | Notes | £’000 | | £’000 | | | £’000 | £’000 | | £’000 | £’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 30September 2023 Non-distributable reserves Distributable reserves Called-up | | share | | Share | Revaluation | | Capital | Revenue | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | capital | premium | | | reserve | reserve* | reserve | | Total | | Notes | £’000 | | £’000 | | £’000 | £’000 | | £’000 | £’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 pages71 to 87 form part of these financial statements. 68 Annual Report and Audited Financial Statements 2024 03 Financial Statements ## Balance sheet As at 30September 2024 Company Number: 03504214 | | | As at | | As at | | --- | --- | --- | --- | --- | | | 30September | | 30September | | | | | 2024 | | 2023 | | Notes | | £’000 | | £’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 valueper share – Basic and diluted 2.1 54.84p 55.44p The notes on pages71 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 Annual Report and Audited Financial Statements 2024 69 03 Financial Statements ## Statement of cash flows For the year ended 30September 2024 | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 30September | | | 30September | | | | | | 2024 | | | 2023 | | | | £’000 | | | £’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 pages71 to 87 form part of these financial statements. 70 Annual Report and Audited Financial Statements 2024 03 Financial Statements ## Notes to the financial statements For the year ended 30September 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. Annual Report and Audited Financial Statements 2024 71 03 Financial Statements - Notes to the financial statements ### 2 Investments, performance and shareholder returns ### 2.1 Net asset valueper share | | | Number of | | | | | Net asset value per | | | | | Net asset value | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | ordinary shares | | | | | | share attributable | | | | | attributable | | | | 30September | | | 30September | | | 30September | | | 30September | | 30September | | 30September | | | | | 2024 | | | 2023 | | | 2024 | | 2023 | | 2024 | | 2023 | | | number | | | number | | | | pence | | pence | | £’000 | | £’000 | Ordinary shares (basic) 386,878,657 351,534,507 54.84 55.44 212 ,183 194,892 ### 2.2 Returnper share | Weighted average number | | | | | | | | Return per | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | of ordinary shares | | | | | | ordinary share Net profit after taxation | | | | | | | | | 30September | | | 30September | | | 30September | | | 30September | | 30September | | 30September | | | | | 2024 | | | 2023 | | | 2024 | | 2023 | | 2024 | | 2023 | | | number | | | number | | | pence | | | pence | | £’000 | | £’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 pages83 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. Annual Report and Audited Financial Statements 2024 73 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 | | As at | | --- | --- | --- | --- | | 30September | | 30September | | | | 2024 | | 2023 | | | £’000 | | £’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 30September 2024 Level 1 Level 2 Level 3 Collective | Traded | investment | | | | | | | --- | --- | --- | --- | --- | --- | --- | | on AIM | | vehicles | | Unquoted | | Total | | £’000 | | | £’000 | | £’000 | £’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 30September 2023 Level 1 Level 2 Level 3 Collective | Traded | Listed on | | investment | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | on AIM | | LSE | | vehicles | | Unquoted | | Total | | £’000 | | £’000 | | | £’000 | | £’000 | £’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 page67. 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 30September 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 £5.5million (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. Annual Report and Audited Financial Statements 2024 75 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 | | | | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 30September 2024 | | | | | | 30September 2023 | | | | | Revenue | | | | Capital | Total | Revenue | | | | Capital | Total | | | £’000 | | | £’000 | £’000 | | £’000 | | | £’000 | £’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 30September 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 | | | | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 30September 2024 | | | | | | 30September 2023 | | | | | | Quoted | | Unquoted | | | | Quoted | | Unquoted | | | | securities | | | securities | | Total | securities | | | securities | | Total | | | £’000 | | | £’000 | £’000 | | £’000 | | | £’000 | £’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 25per cent income and 75per cent capital derived in accordance with the Board’s expected split between long term income and capital returns. Performance fees are allocated 100per cent against capital. | | | | Year ended | | | | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 30September 2024 | | | | | | 30September 2023 | | | | | Revenue | | | | Capital | Total | Revenue | | | | Capital | Total | | | £’000 | | | £’000 | £’000 | | £’000 | | | £’000 | £’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 2per centper 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 4per cent or base rate plus 2per cent on shareholders’ funds (calculated on a compound basis). The Manager is entitled to 10per cent of the excess. The amount of any performance fee which is paid in respect of a calculation period shall be capped at 5per 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. Annual Report and Audited Financial Statements 2024 77 03 Financial Statements - Notes to the financial statements Other expenses | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 30September | | | 30September | | | | | | 2024 | | | 2023 | | | | £’000 | | | £’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 page55. During the year there was no remuneration due to the auditors for non-audit services (2023: £nil). ### 2.7 Debtors | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 30September | | | 30September | | | | | | 2024 | | | 2023 | | | | £’000 | | | £’000 | Prepayments and accrued income 463 208 463 208 ### 2.8 Creditors (amounts falling due within one year) | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 30September | | | 30September | | | | | | 2024 | | | 2023 | | | | £’000 | | | £’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 | | | | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 30September 2024 | | | | | | 30September 2023 | | | | | Revenue | | | | Capital | Total | Revenue | | | | Capital | Total | | | £’000 | | | £’000 | £’000 | | £’000 | | | £’000 | £’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 30September 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. Annual Report and Audited Financial Statements 2024 79 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 30September 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. 75 per 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 30 September 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** | Annual Report and Audited Financial Statements 2024 81 03 Financial Statements - Notes to the financial statements # For the year ended 30 September 2023 | | Distributable reserves | | | Non-distributable reserves | | | | --- | --- | --- | --- | --- | --- | --- | | | Capital reserve^{1} £'000 | Revenue reserve £'000 | Total £'000 | Share premium £'000 | Revaluation reserve^{4} £'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) | – | 7,067 | 7,067 | | Realised gain on disposal of investments^{5} | 194 | – | 194 | – | – | – | | Net decrease in value of investments^{6} | – | – | – | – | (3,622) | (3,622) | | Management fee charged to capital^{7} | (2,657) | – | (2,657) | – | – | – | | Taxation relief from capital expenses^{8} | – | – | – | – | – | – | | Profit after taxation^{9} | – | 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** | $^{1}$ Of the distributable reserves noted above £52,069,000 (2023: £79,384,000) is not available for dividend distribution due to HMRC VCT rules. $^{2}$ Changes in fair value of investments are dealt with in this reserve. $^{3}$ 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. Annual Report and Audited Financial Statements 2024 83 03 Financial Statements - Notes to the financial statements As at 30September 2024 Impact | | | Fair | | | | pence | | Impact | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Value | | Sensitivity | | Impact | | per | % of net | | Security Valuation basis Key variable inputs | £’000s | | | % | £’000s | share | | assets | Multiple Estimated sustainable revenue/ EBITDA Unquoted Selection of comparable companies Application of illiquidity discount 50,140 +/-20% 10,028 2.6 +/-4.7 Bid price 61,905 +/-20% 12, 381 3.2 +/-5.8 AIM Traded price 5,145 +/-20% 1,029 0.3 +/-0.5 Gresham Published price 68,500 +/-20% 13,700 3.5 +/-6.5 House Equity Funds As at 30September 2023 Impact | | | Fair | | | | pence | | Impact | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Value | | Sensitivity | | Impact | | per | % of net | | Security Valuation basis Key variable inputs | £’000s | | | % | £’000s | share | | assets | Rebased cost Latest funding round price 3,438 +/-10 % 344 0.1 +/-0.2 Multiple Estimated sustainable revenue/ EBITDA Unquoted Selection of comparable companies Application of illiquidity discount 42,397 +/-20% 8,479 2.4 +/-4.4 Bid price 54,918 +/-20% 10,984 3.1 +/-5.6 AIM Traded price 5,467 +/-20% 1,093 0.3 +/-0.6 Gresham Published price 67,939 +/-20% 13,588 3.9 +/-7.0 House Equity Funds 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. Annual Report and Audited Financial Statements 2024 85 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 30September 2024 As at 30September 2023 | | | | | | Weighted | | | | | | Weighted | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Weighted | | | | average | | | Weighted | | | average | | | | average | | | | time for | | | average | | | time for | | | Total | interest | | | which rate | | | Total | interest | | which rate | | | investment | | | rate | | | is fixed | investment | | | rate | | is fixed | | | £’000 | | | % | | Years | | £’000 | | % | | 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 | | As at | | --- | --- | --- | --- | | 30September | | 30September | | | | 2024 | | 2023 | | | £’000 | | £’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 30September 2024 or 30September 2023. No individual investment exceeded 9.7per cent of the net assets attributable to the Company’s shareholders at 30September 2024 (2023: 10.6per 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 30 September 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 page 30, 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. Annual Report and Audited Financial Statements 2024 87 ## Appendices ## 04 04 Appendices ## Cash and total returns to shareholders since launch 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 | 137.00 | 27.40 | 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^{1} | 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. 1 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. Annual Report and Audited Financial Statements 2024 89 04 Appendices ## Cash returned to shareholders by date of investment The chart below shows cash returned to shareholders based on the subscription price and the income tax reclaimed on subscription. ![img-1.jpeg](img-1.jpeg) \* 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. 90 Annual Report and Audited Financial Statements 2024 04 Appendices ## Dividends paid since launch | Year ended | Ordinary share | | | | --- | --- | --- | --- | | | 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 | 11.00 | 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 | 7.48 | | 30/09/20 | 6.50 | 167.40 | 7.44 | | 30/09/21 | 6.50 | 173.90 | 7.40 | | 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. Annual Report and Audited Financial Statements 2024 91 04 Appendices ## Full investment portfolio % of equity | | | | | 30September | | | 30September | | | | | held by | | % of | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Original | Accounting | | | | 2024 | | | 2023 | | Baronsmead | | | equity | | | | book cost | † book cost | | † | fair value | | | fair value | | % of net | | Venture | held by | | | | Company Sector | £’000 | | £’000 | | | £’000 | | | £’000 | assets | | Trust plc | 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 Technology 1,867 1,867 2,397 – 1.1 2.3 11. 8 Ltd 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 Technology 949 949 982 – 0.5 3.4 17.4 CitySwift) Lads Store Ltd (trading as Technology 949 949 944 944 0.4 1.9 9.1 Bidnamic) 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 92 Annual Report and Audited Financial Statements 2024 04 Appendices - Full investment portfolio % of equity | | | | | 30September | | | 30September | | | | | held by | | % of | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Original | Accounting | | | | 2024 | | | 2023 | | Baronsmead | | | equity | | | | book cost | † book cost | | † | fair value | | | fair value | | % of net | | Venture | held by | | | | Company Sector | £’000 | | £’000 | | | £’000 | | | £’000 | assets | | Trust plc | 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 Technology 337 337 1,647 594 0.8 1.0 2.3 Group plc 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 Business services 586 586 849 834 0.4 1.1 7.3 Access Intelligence plc) 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 Business services 1,126 1,306 546 546 0.3 4.1 20.1 Group plc) 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 Annual Report and Audited Financial Statements 2024 93 04 Appendices - Full investment portfolio % of equity | | | | | 30September | | | 30September | | | | | held by | | % of | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Original | Accounting | | | | 2024 | | | 2023 | | Baronsmead | | | equity | | | | book cost | † book cost | | † | fair value | | | fair value | | % of net | | Venture | held by | | | | Company Sector | £’000 | | £’000 | | | £’000 | | | £’000 | assets | | Trust plc | 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 page74 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 Annual Report and Audited Financial Statements 2024 04 Appendices ## Glossary 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 valueper 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 costbasis. 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 NAVper 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 NAVper share and is usually expressed as a percentage of the NAVper share. If the share price is higher than the NAVper 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. NAVper 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”). 80per cent test Ensuring that the Company meets the requirement to hold 80per cent of its investments in qualifying holdings. 95Annual Report and Audited Financial Statements 2024 04 Appendices - Glossary | 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 Annual Report and Audited Financial Statements 2024 04 Appendices - Glossary Annual Report and Audited Financial Statements 2024 97 ## Information ## 05 05 Information ## Shareholder information and contact details ### 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 03001232040 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. Annual Report and Audited Financial Statements 2024 99 05 Information - Shareholder information and contact details ## 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 Annual Report and Audited Financial Statements 2024 05 Information - Shareholder information and contact details ### 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 6April 2004. * UK income tax payers, aged 18 or over, who acquire no more than £200,000 worth of VCT shares in a tax year. Annual Report and Audited Financial Statements 2024 101 05 Information ## Corporate information ### Directors Brokers ‡ Fiona Miller Smith (Chair) Panmure Liberum † Michael Probin** Ropemaker Place Isabel Dolan* Level 12, 25 Ropemaker Street London EC2Y 9LY Tel: 020 3100 2000 ### Secretary Gresham House Asset Management Ltd ### Auditor BDO LLP 55 Baker Street ### Registered Office London W1U 7EU 5 New Street Square London EC4A 3TW ### Solicitors Howard Kennedy LLP ### Manager 1 London Bridge London SE1 9BG Gresham House Asset Management Limited 5 New Street Square London EC4A 3TW ### VCT Status Adviser PricewaterhouseCoopers LLP ### Registered Number 1 Embankment Place London WC2N 6RH 03504214 ### Contact the Chair ### Registrars and Transfer Office chair@baronsmeadvcts.com The City Partnership (UK) Ltd The Mending Rooms Park Valley Mills Meltham Road ### Website Huddersfield HD4 7BH Tel: 01484 240 910 www.baronsmeadvcts.co.uk ‡ Chair of the Nomination Committee * Chair of the Audit Committee ** Chair of the Management Engagement & Remuneration Committee † Senior Independent Director 102 Annual Report and Audited Financial Statements 2024