REG-Oxford Technology 2 VCT plc : Annual Financial Report <Origin Href="QuoteRef">OXF2.L</Origin>
26/05/2016 08:05
26 May 2016
Oxford Technology 2 VCT plc ("the Company" or "OT2")
Annual Report and Accounts for the year ended 29 February 2016
The Directors are pleased to announce the audited results of the Company for
the year ended 29 February 2016 and a copy of the Annual Report and Accounts
("Accounts") will be made available to Shareholders shortly. Set out below
are extracts of the audited Accounts. References to page numbers below are to
those Accounts.
The AGM will be held at The Magdalen Centre, Oxford Science Park, Oxford OX4
4GA on Friday 8 July 2016, at 11am.
A copy of the Annual Report and Accounts will be available from the
registered office of the Company at The Magdalen Centre, Oxford Science Park,
Oxford OX4 4GA, as well as on the Company's website: www.oxfordtechnology.com.
Financial Headlines
Year Ended 29 February 2016 Year Ended 28 February 2015
Net Assets at Year End £1.91m £1.89m
Net Asset Value per Share 28.2p 27.8p
Cumulative Dividend 13.0p 10.5p
NAV + Cumulative Dividend Paid from Incorporation 41.2p 38.3p
Share Price at Year End 20.0p 11.0p
Earnings Per Share (Basic & Diluted) 2.9p 1.4p
Chairman's Statement
I am pleased to present my first annual report to shareholders since becoming
a Director and taking over as Chairman in July.
Overview
There has been some positive progress within our portfolio this year.
Telegesis, a company we invested in 2003 was sold in November 2015 at a
multiple of 45 times our investment, and enabled the payment of the first
dividend since 2009. We still have shareholdings in 10 unlisted companies:
OC Robotics, the Company's largest holding (representing 45% of our net
assets) continues to progress well with several large grant-funded contracts.
Portfolio Review
The net asset value per share on 29 February 2016 was 28.2p compared to 27.8p
on 28 February 2015. Following a 2.5p payment on 19 February 2016, dividends
paid to date are now 13p. The earnings per share in the year to 29 February
2016 were 2.9p. Thus at 29 February 2016, the Total Return is 41.2p.
The Company's portfolio is dominated by its holding in OC Robotics but the
Board believes this company still has growth potential and is actively
monitoring this investment. More details are given in the Investment
Portfolio Review.
The second-largest holding in the Company's portfolio is in photocopier
software company Select Technology, which has progressed well in recent years.
It is now an international master distributor of its own and third party
software, and is growing rapidly. In February 2016 Select Technology paid out
its first dividend, which usefully helped cover half of OT2's costs for the
year.
One portfolio company was realised in the year. In November 2015 Telegesis
was sold to Silicon Laboratories UK Ltd. This allowed us to pay the 2.5p
dividend per share on 19 February 2016.
We invested £13,000 into Orthogem, at a similar price to the previous
funding rounds, taking up our allocation. ImmBio also raised money during
the year but the Company did not have sufficient liquidity to invest at the
time.
Following the year end, Plasma Antennas has raised further finance, and
whilst is at a lower price than our current valuation, we were unable to take
part, prohibited by the VCT rules, as we would otherwise exceed the 15%
maximum holding condition allowed in any single company (as defined within
ITA07/S274(2) and S277). It is disappointing that an initiative designed to
help young growing companies has such restrictive and arbitrary rules that
investee companies and the VCT's shareholders are both penalised.
Together with the Company's cash balance, OCR, Select Technology and Plasma
make up nearly 90% of OT2's portfolio. The full list of the Company's
investments is shown on Page 12, and further details on the major investments
can be found in the Investment Portfolio Review thereafter, and on our
website.
Last year, we noted that we would assess the opportunity for divestments so
as to crystallise shareholder value as and when appropriate, and were
delighted to announce the sale of Telegesis in November. Whilst we continue to
seek the opportune moment to maximise value from our portfolio, we do not
currently foresee any major liquidity events in the near future.
Dividends
The ongoing strategy is to seek to crystallise value from the portfolio and
distribute cash to shareholders via dividend payments when the opportunity
arises. As already stated, a dividend of 2.5p per share was paid during the
year.
Management and Performance Fees
Shareholders will recall the changes announced during the year at the time of
the announcement of the 2015 results. Management fees were halved to 1% per
annum with effect from the start of this financial year, with an annual cost
cap of 3% (excluding directors' fees) to cover all of the running costs
incurred by the VCT. The threshold at which a performance fee would become
payable now escalates at 6% per annum from the 10th anniversary of the VCT,
with an adjustment made to encourage dividend payments to be made. The
original threshold of 100p has been increased to 130.3p at 29 February 2016,
meaning that a minimum of a further 117.3p needs to be received by
shareholders before any performance fee will be due (and no payment has been
made to date under this scheme). Further details are shown in Note 3.
Your directors continue to believe that this lower level of management fees
and cap, together with a performance fee incorporating a challenging hurdle
and payable only once shareholders have received back more than their original
investment prior to any additional tax reliefs, makes this management
arrangement market-leading and continues the principle always adopted by the
VCT to keep its costs as low as possible.
Board Structure and VCT Management
Shareholders will also be aware of the changes to the Board and Management
arrangements that were implemented during the Summer, implementing a Common
Board across the four Oxford Technology VCTs commensurate with the companies
becoming 'self-managed'.
Lucius Cary and his team continue to be involved with the portfolio as OT2
Managers Ltd (the Company's Investment Manager) sub-contracts services from
Oxford Technology Management. The new Common Board structure has worked well
since implementation, providing the following corporate governance
improvements:
* Further formalising the roles of the directors and Oxford Technology
Management;
* Four independent directors (with the Chairman holding a casting vote) to
ensure the Board cannot be controlled by a single person;
* Providing a framework for OT2 to benefit from the differing expertise of
its newly enlarged board of directors, with those directors having a specific
mandate to contribute as best they can;
* Retention of the option of pursuing a merger (or other combination) at a
later date as and when portfolio developments permit; and
* Minimising costs by not pursuing a major restructuring at this time whilst
leaving options open to maximise shareholder value should other corporate
actions become attractive.
Michael O'Regan and Lucius Cary did not stand for re-election as Directors at
the AGM in 2015. I would like to thank them both for all their hard work on
behalf of shareholders since the formation of the Company in 2000. As part of
implementation of the Common Board, I was delighted to welcome Alex Starling,
Robin Goodfellow and David Livesley as Directors of the Company following
their appointment on 3 July 2015.
VCT Regulation Changes
Shareholders may be aware of some significant changes to the VCT rules that
have been introduced during the year. These changes have been introduced by
the UK Government, but were directed by the EU to make VCTs conform to "State
Aid" rules.
The rules introduce new restrictions on the type of investments which can be
made by VCTs, specifically prohibiting VCT funds from being used to finance
management buy-outs or for the acquisition of existing businesses. The rules
also impose a cap on the maximum lifetime amount a company can receive from
VCTs, as well as imposing a maximum age for companies which receive VCT
funding, potentially restricting follow on investments.
The new restrictions, which apply to non-qualifying holdings as well as VCT
qualifying holdings, took effect for investments made on or after 18 November
2015. The potential penalty for breach of these regulations is withdrawal of
VCT status.
The Board has reviewed the new legislation and recently issued HMRC
guidelines and, following detailed discussions with the Manager, has concluded
that OT2 remains well placed to adapt to the new requirements. The new
legislation is designed to target more VCT money towards the sorts of
companies that OT2 has always invested in and thus is not expected to have a
significant effect on your Company. The Directors will remain alert to the
additional requirements of these latest rules with any further investments OT2
may make.
Change in Registrars
As part of our ongoing focus on costs, we appointed Neville Registrars in
place of Capita as our Registrars. Their details are on the back cover. We
would also remind you that Annual Reports, notices of shareholder meetings and
other documents that are required to be sent to Shareholders are also
published on our website at www.oxfordtechnology.com/vct2, as well as any
other announcements made by the Company.
AGM
Shareholders should note that the AGM for the Company will be held on Friday
8 July 2016 at the Magdalen Centre, Oxford Science Park, starting at 11am and
will include presentations by Oxford Technology Management and some of the
companies in which the Oxford Technology VCTs have invested.
A formal Notice of the AGM has been enclosed with these Financial Statements
together with a Form of Proxy for those not attending. We appreciate the input
of our shareholders and look forward to welcoming as many of you as possible
on the day.
Outlook
The outlook has not changed from a year ago. In February 2016 we returned
funds to shareholders after a very successful exit from Telegesis. We
continue to work to maximise shareholder value and will, as per our stated
strategy, seek to crystallise this value and make distributions via dividend
payments when valuations and liquidity allow.
Richard Roth
Chairman
25 May 2016
Investment Portfolio Review
OT2 was formed in 2000 and invested in a total of 30 companies, all start-up
or early stage technology companies. Some of these companies failed with the
loss of the investment. Some have succeeded and have been sold. The table
on page 12 shows the companies remaining in the portfolio. A more detailed
analysis is given of the top 5 investments.
One of the investees was Telegesis in which OT2 first invested just under
£8k in 2003, when the company was started. Telegesis specialised exclusively
in Zigbee, a strategy which proved to be very successful. When large
companies wish to incorporate Zigbee communications (for example to enable
smart electricity meters to send and receive data wirelessly) they frequently
turned to Telegesis to do the detailed design and then to supply the Zigbee
modules, which were manufacured in China. In November 2015, Telegesis was
sold for £13m to Silicon Laboratories UK. OT2 received cash proceeds of
£355k for its shares.
OC Robotics, the Company's largest investment, continues to promote and
develop its snake arm robot technology. There are many potential
applications for such equipment, with the company benefitting from significant
grants to develop its capabilities in a number of industries, including
nuclear decommissioning, aircraft inspections and oil and gas storage.
Dividends paid to shareholders to date are 13p per share.
New Investments in the year
There was one investment into Orthogem of £13k in February 2016.
Disposals during the year
A payment of £355k was received from the sale of Telegesis during the year,
enabling the payment of a 2.5p per share dividend on 19 February 2016.
Valuation Methodology
Quoted and unquoted investments are valued in accordance with current
industry guidelines that are compliant with International Private Equity and
Venture Capital Valuation Guidelines and current financial reporting
standards.
VCT Compliance
Compliance with the main VCT regulations as at 29 February 2016 and for the
year then ended is summarised as follows:
Type of Investment By HMRC Valuation Rules Actual Target
VCT Qualifying Investments 94.0% Minimum obligation of: 70.0%
Non-Qualifying Investments 6.0% Maximum allowed: 30.0%
Total 100.0% 100.0%
At least 10% of each investment in a qualifying company is held in 'eligible
shares' - Complied.
No more than 15% of the income from shares and securities is retained -
Complied.
No investment constitutes more than 15% of the Company's portfolio (by value
at time of investment) - Complied.
No investment made by the VCT has caused the company to receive more than
£5m of State Aid investment in the year - Complied.
Table of Investments held by Company at 29 February 2016
Company Description Date of initial investment Net cost of investment £'000 Carrying value at 29/02/16£'000 Change in value for the year £'000 % equity held by OT2
OC Robotics Snake arm robots Jan 2001 311 860 2 36.9
Select Technology Photocopier Interfaces Nov 2001 132 380 143 7.4
Plasma Antennas Solid state directional antennas Nov 2001 188 139 (50) 8.3
Orthogem Bone graft material Dec 2000 317 75 13 7.3
Arecor Protein stabilization Jul 2007 14 38 - 0.5
Insense Active wound healing dressings Jun 2001 204 38 - 3.5
Inaplex Data transformation software Sep 2001 138 36 (12) 21.5
Oxis Energy Rechargeable batteries Jan 2000 540 22 - 0.2
ImmBio Novel vaccines Dec 2000 175 12 - 0.2
DHA Radiotherapy products Nov 2001 - 1 - 1.2
Totals 2,020 1,602 96
Other Net Assets 310
NET ASSETS 1,912
Number of shares in issue: 6,792,923
Net Asset Value per share at 29 February 2016: 28.2p
Dividends paid to date: 13.0p per share
This table shows the current portfolio holdings. The investments in Acumen,
Assertion, Astron Clinica, Ciphergrid, CHR Design, Coraltech, Im-Pak, Freehand
Surgical, Inscentinel, Jetmask, M3 Networks, OST, Promic and SVA have been
written off. The investments in Hardide, Commerce Decisions, MET,
Telegesis and Equitalk have been sold.
Directors' Report
The Directors present their report together with financial statements for the
year ended 29 February 2016.
This report has been prepared by the Directors in accordance with the
requirements of s415 of the Companies Act 2006. The Company's independent
auditor is required by law to report on whether the information given in the
Directors' Report is consistent with the financial statements.
Principal Activity
The Company commenced business in 2000. The Company invests in start-up and
early stage technology companies in general located within 60 miles of
Oxford. The Company has maintained its approved status as a Venture Capital
Trust by HMRC.
Directors
The Directors of the Company are required to notify their interests under
Disclosure and Transparency Rule 3.12R. The present and previous membership
of the board and their beneficial interests in the ordinary shares of the
company at 29 February 2016 and at 28 February 2015 are set out below:
Name Value 7 1,602 1,720
Current Assets
Debtors 8 21 19
Cash At Bank 333 213
Creditors: Amounts Falling Due Within 1 Year 9 (27) (27)
Net Current Assets 327 205
Creditors: Amounts Falling Due In More Than 1 Year 9 (17) (35)
Net Assets 1,912 1,890
Called Up Equity Share Capital 10 679 679
Share Premium 376 376
Unrealised Capital Reserve 11 (418) 803
Profit and Loss Account Reserve 11 1,275 32
Total Equity Shareholders' Funds 11 1,912 1,890
Net Asset Value Per Share 28.2p 27.8p
The accompanying notes are an integral part of the financial statements.
The statements were approved by the Directors and authorised for issue on 25
May 2016 and are signed on their behalf by:
Richard Roth
Chairman
Statement of Cash Flows
Year Ended 29 February 2016 £'000 Year Ended 28 February 2015 £'000
Cash flows from operating activities
Return on ordinary activities before tax 192 99
Adjustments for:
Gain on disposal of investments (142) -
(Gain) on valuation of investments (83) (157)
(Increase) in debtors (2) (6)
(Decrease)/increase in creditors (17) 11
Outflow from operating activities (52) (53)
Cash flows from investing activities
Purchase of investments (13) (86)
Disposal of investments 355 -
Dividends paid (170) -
Increase/(decrease) in cash at bank 120 (139)
Opening cash and cash equivalents 213 352
Cash and cash equivalents at year end 333 213
The accompanying notes are an integral part of the financial statements.
Notes to the Financial Statements
This is the first year in which the financial statements have been prepared
under Financial Reporting Standard 102 - 'The Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland' ('FRS 102'). The
main changes are primarily presentational and related to the fixed asset
investments' fair value hierarchy, and the primary statements and associated
reconciliations. The accounting policies have not materially changed from last
year.
A review of any required changes to comparative figures has taken place and
it has been deemed that no such restatements are necessary.
1. Principal Accounting Policies
Basis of Preparation
The financial statements have been prepared under the historical cost
convention, except for the measurement at fair value of certain financial
instruments, and in accordance with UK Generally Accepted Accounting Practice
("GAAP"), including FRS 102 and with the Companies Act 2006 and the Statement
of Recommended Practice (SORP) 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts (revised 2014)' issued by the AIC.
The principal accounting policies have remained materially unchanged from
those set out in the Company's 2015 Annual Report and financial statements.
There have been no changes to the measurement of the assets and liabilities as
a result of the transition to FRS 102. A summary of the principal accounting
policies is set out below.
FRS 102 sections 11 and 12 have been adopted with regard to the Company's
financial instruments. The Company held all fixed asset investments at fair
value through profit or loss. Accordingly, all interest income, fee income,
expenses and gains and losses on investments are attributable to assets held
at fair value through profit or loss.
The most important policies affecting the Company's financial position are
those related to investment valuation and require the application of
subjective and complex judgements, often as a result of the need to make
estimates about the effects of matters that are inherently uncertain and may
change in subsequent periods. These are discussed in more detail below.
Going Concern
After reviewing the Company's forecasts and expectations, the Directors have
a reasonable expectation that the Company has adequate resources to continue
in operational existence for the foreseeable future. The Company therefore
continues to adopt the going concern basis in preparing its financial
statements.
Key Judgements and Estimates
The preparation of the financial statements requires the Board to make
judgements and estimates regarding the application of policies and affecting
the reported amounts of assets, liabilities, income and expenses. Estimates
and assumptions mainly relate to the fair valuation of the fixed asset
investments particularly unquoted investments. Estimates are based on
historical experience and other assumptions that are considered reasonable
under the circumstances. The estimates and the assumptions are under
continuous review with particular attention paid to the carrying value of the
investments.
Investments are regularly reviewed to ensure that the fair values are
appropriately stated. Unquoted investments are valued in accordance with
current IPEVC valuation guidelines, although this does rely on subjective
estimates such as appropriate sector earnings multiples, forecast results of
investee companies, asset values of investee companies and liquidity or
marketability of the investments held.
Although the Directors believe that the assumptions concerning the business
environment and estimate of future cash flows are appropriate, changes in
estimates and assumptions could result in changes in the stated values. This
could lead to additional changes in fair value in the future.
Functional and Presentational Currency
The financial statements are presented in Sterling (£). The functional
currency is also Sterling (£).
Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less and also include bank overdrafts.
Fixed Asset Investments
The Company's principal financial assets are its investments and the policies
in relation to those assets are set out below.
Purchases and sales of investments are recognised in the financial statements
at the date of the transaction (trade date).
These investments will be managed and their performance evaluated on a fair
value basis and information about them is provided internally on that basis to
the Board. Accordingly, as permitted by FRS 102, the investments are
measured as being fair value through profit or loss on the basis that they
qualify as a group of assets managed, and whose performance is evaluated, on a
fair value basis in accordance with a documented investment strategy. The
Company's investments are measured at subsequent reporting dates at fair
value.
In the case of investments quoted on a recognised stock exchange, fair value
is established by reference to the closing bid price on the relevant date or
the last traded price, depending upon convention of the exchange on which the
investment is quoted. In the case of AIM quoted investments this is the
closing bid price.
In the case of unquoted investments, fair value is established by using
measures of value such as the price of recent transactions, earnings multiple,
revenue multiple, discounted cash flows and net assets. These are consistent
with the International Private Equity and Venture Capital (IPEVC) guidelines
which can be found on their website at www.privateequityvaluation.com .
Gains and losses arising from changes in fair value of investments are
recognised as part of the capital return within the Income Statement and
allocated to the unrealised capital reserve.
In the preparation of the valuations of assets the Directors are required to
make judgements and estimates that are reasonable and incorporate their
knowledge of the performance of the investee companies.
Fair Value Hierarchy
Paragraph 34.22 of FRS 102 regarding financial instruments that are measured
in the balance sheet at fair value requires disclosure of fair value
measurements dependent on whether the stock is quoted and the level of the
accuracy in the ability to determine its fair value. The fair value
measurement hierarchy is as follows:
For Quoted Investments:
Level a: quoted prices in active markets for an identical asset. The fair
value of financial instruments traded in active markets is based on quoted
market prices at the balance sheet date. A market is regarded as active if
quoted prices are readily and regularly available, and those prices represent
actual and regularly occurring market transactions on an arm's length basis.
The quoted market price used for financial assets held is the bid price at the
Balance Sheet date.
Level b: where quoted prices are not available (or where a stock is normally
quoted on a recognised stock exchange that no quoted price is available), the
price of a recent transaction for an identical asset, providing there has been
no significant change in economic circumstances or a significant lapse in time
since the transaction took place. The Company holds no such investments in the
current or prior year.
For investments not quoted in an active market:
Level c: the fair value of financial instruments that are not traded in an
active market is determined by using valuation techniques. These valuation
techniques maximise the use of observable data (eg the price of recent
transactions, earnings multiple, discounted cash flows and/or net assets)
where it is available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument
are observable, the instrument is included in level c (i). If one or more of
the significant inputs is not based on observable market data, the instrument
is included in level c (ii).
There have been no transfers between these classifications in the year (2015:
none). The change in fair value for the current and previous year is
recognised in the income statement.
Income
Investment income includes interest earned on bank balances and from unquoted
loan note securities, and dividends. Fixed returns on debt are recognised on
a time apportionment basis so as to reflect the effective yield, provided it
is probable that payment will be received in due course. Dividend income
from investments is recognised when the shareholders' rights to receive
payment have been established, normally the ex dividend date.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged
wholly to revenue with the exception of the investment management fee which
has been charged 75% to capital and 25% to revenue. (In 2015, the investment
management fees were all charged to capital). Any applicable performance fee
will be charged 100% to capital.
Revenue and capital
The revenue column of the Income Statement includes all income and revenue
expenses of the Company. The capital column includes gains and losses on
disposal and holding gains and losses on investments. Gains and losses
arising from changes in fair value of investments are recognised as part of
the capital return within the Income Statement and allocated to the
appropriate capital reserve on the basis of whether they are realised or
unrealised at the balance sheet date.
Taxation
Current tax is recognised for the amount of income tax payable in respect of
the taxable profit for the current or past reporting periods using the current
tax rate. The tax effect of different items of income/gain and
expenditure/loss is allocated between capital and revenue return on the
"marginal" basis as recommended in the SORP.
Deferred tax is recognised on an undiscounted basis in respect of all timing
differences that have originated but not reversed at the balance sheet date,
except as otherwise indicated.
Deferred tax assets are only recognised to the extent that it is probable
that they will be recovered against the reversal of deferred tax liabilities
or other future taxable profits.
Financial instruments
The Company's principal financial assets are its investments and the policies
in relation to those assets are set out above. Financial liabilities and
equity instruments are classified according to the substance of the
contractual arrangements entered into.
An equity instrument is any contract that evidences a residual interest in
the assets of the entity after deducting all of its financial liabilities.
Where the contractual terms of share capital do not have any terms meeting the
definition of a financial liability then this is classed as an equity
instrument.
The Company does not have any externally imposed capital requirements.
Reserves
Called up equity share capital - represents the nominal value of shares that
have been issued.
Share premium account - includes any premiums received on issue of share
capital. Any transaction costs associated with the issuing of shares are
deducted from share premium.
Unrealised capital reserve arises when the Company revalues the investments
still held during the period and any gains or losses arising are
credited/charged to the unrealised capital reserve. When an investment is
sold any balance held on the unrealised capital reserve is transferred to the
profit and loss reserve as a movement in reserves.
The profit and loss reserve represents the aggregate of accumulated realised
profits, less losses and dividends.
Dividends Payable
Dividends payable are recognised as distributions in the financial statements
when the Company's liability to make payment has been established. This
liability is established for interim dividends when they are declared by the
Board, and for final dividends when they are approved by the Shareholders.
2. Income
Year Ended 29 February 2016 £'000 Year Ended 28 February 2015 £'000
Dividends received 36 -
Total 36 -
3. Investment Management Fees
Expenses are charged wholly to revenue with the exception of the investment
management fee which has been charged 75% to the capital reserve in line with
industry practice. In 2015, these fees were allocated all to capital.
Year Ended 29 February 2016 £'000 Year Ended 28 February 2015 £'000
Investment management fee 19 36
Cost cap refund from OTM (2) (17)
Total 17 19
In the year to 29 February 2016 the manager received a fee of 1% of the net
asset value as at the previous year end. (2015: 2%). Oxford Technology
Management is also entitled to certain monitoring fees from investee companies
and the board monitors the amounts.
Oxford Technology Management had previously agreed to defer 25% of the 2%
management fee to which it was contractually entitled (ie 0.5% of net assets)
until such a time when the finances of the Company made this payment more
affordable. As part of the revised agreement with effect from 1 March 2015
the Board have agreed to pay the deferred balance over a 36 month period.
A performance fee is payable to the Investment Manager once original
shareholders have received a specified threshold in cash for each 100p (gross)
invested. As reported in last year's accounts, the original threshold of
100p has now been increased by compounding that portion that remains to be
paid to shareholders by 6% per annum with effect from 1 March 2010, resulting
in the remaining required threshold rising to 117.3p at 29 February 2016,
corresponding to a total shareholder return of 130.3p after taking into
account the 13p already paid out (13p + 117.3p = 130.3p). After this amount
has been distributed to shareholders, each extra 100p distributed goes 80p to
the shareholder and 20p to the beneficiaries of the performance incentive fee,
of which Oxford Technology Management receives 14p. No performance fee has
become due or been paid to date. Any applicable performance fee will be
charged 100% to capital.
Expenses are capped at 3%, including the management fee but excluding
Directors' fees and any performance fee. Accordingly, Oxford Technology
Management reduced their management fee by £2,000 (2015: £17,000).
4. Other Expenses
All expenses are accounted for on an accruals basis. All expenses are
charged through the income statement except as follows:
* those expenses which are incidental to the acquisition of an investment are
included within the cost of the investment;
* expenses which are incidental to the disposal of an investment are deducted
from the disposal proceeds of the investment.
Year Ended 29 February 2016 £'000 Year Ended 28 February 2015 £'000
Directors' remuneration 11 3
Auditors' remuneration 5 6
Legal and professional expenses 16 10
Other expenses 20 20
Total 52 39
5. Tax on Ordinary Activities
Corporation tax payable at 20% (2015: 21%) is applied to profits chargeable
to corporation tax, if any. The corporation tax charge for the period was
£nil (2015: £nil)
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