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OTT - Oxford Technology 3 Venture Capital Trust News Story

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Last Trade - 30/11/20

Micro Cap
Market Cap £2.37m
Enterprise Value £2.30m
Revenue £-3.15m
Position in Universe 1771st / 1819

Annual Financial Report

Annual Financial Report

21 May 2019

Oxford Technology 3 VCT plc ("the Company" or "OT3") 
Annual Report and Accounts for the year ended 28 February 2019

The Directors are pleased to announce the audited results of the Company for the year ended 28 February 2019.  A copy of the Annual Report and Accounts (together the "Accounts") will be made available to Shareholders shortly.  Set out below are extracts from the audited Accounts. References to page numbers below are to those Accounts.

The AGM will be held at Magdalen Centre, Oxford Science Park, Oxford OX4 4GA on Wednesday 3 July 2019, at 2pm.

A copy of the Annual Report and Accounts will be available from the registered office of the Company at Magdalen Centre, Oxford Science Park, Oxford OX4 4GA, as well as on the Company's website: www.oxfordtechnologyvct.com/vct3.html

Financial Headlines

   Year Ended
  28 February 2019
Year Ended
  28 February 2018

Net Assets at Year End



Net Asset Value per Share



Cumulative Dividend per Share

NAV + Cumulative Dividend paid per Share from Incorporation125.5p122.2p

Share Price at Year End


Earnings per Share
(Basic & Diluted)



Chairman’s Statement  

I am pleased to present my Annual Report for the year to 28 February 2019 to fellow shareholders.


Your company made a profit of 3.3p per share primarily due to unrealised gains in Ixaris and ImmBio offset by unrealised losses in Scancell.

Your Company continues to have adequate liquidity and your Board wishes to retain some cash flexibility for potential follow-on investments to enhance investee values. Your Board is not recommending the payment of a final dividend for the year ending 28 February 2019. 

Portfolio Review

The net asset value (NAV) per share on 28 February 2019 was 89.5p compared to 86.2p on 28 February 2018.  Dividends paid to date are 36.0p per share, giving a total return to date of 125.5p per share based on the NAV on 28 February 2019. The total return still remains just below the performance fee threshold.

The main change in the portfolio was an increase in the valuation of Ixaris by £414k as its payment systems subsidiary continued to have accelerating sales, more than offsetting the closure of the one-time card subsidiary Entropay, which had been very profitable but was unviable as VISA regulations changed. Ixaris now represents 67% of our portfolio. 

ImmBio (more formally known as Immunobiology) is our second largest holding. We invested £30k in August 2018 to support continued commercialisation of its PnuBioVax Vaccine strains.  Negotiations have continued to progress and a first commercial licence has now been signed with China National Biotech Group.  This is a significant third party validation of the heat shock protein mediated vaccine approach pioneered by the company and has led to a significant uplift in valuation of £253k.

Arecor raised £6m in a fundraising round led by 3 larger VCTs for clinical development of its diabetes speciality pharmaceutical portfolio. Your company invested £219k in this round making Arecor the third largest investment in the portfolio. Arecor has used the investment to strengthen its management team with the appointment of a Chief Financial Officer as well as to progress its portfolio into the clinic. A Phase 1 Clinical Trial Application (“CTA”) for product candidate AT247 has been approved by the Austrian Federal Office for Safety in Health Care. The double-blind, randomised, three-way cross over study will compare the pharmacokinetic and pharmacodynamic profiles of AT247 to current best in class insulin treatments. The trial is being conducted in Austria at an internationally recognised centre of excellence in the field of diabetes research.

Scancell Holdings Plc (Scancell), listed on the AIM market of the London Stock Exchange, is now your Company’s fourth largest holding following a marked decline in share price during the year.  Scancell has had some mixed news flow during the course of the reporting period. Approval of the SCIB1 Phase 2 melanoma combination trial in the US was delayed due to FDA questions over the Mark 2 version of the third party Trigrid applicator. On a more positive note, post year end, UK approval of this trial has now been received.

The partnerships with the likes of Cancer Research UK (CRUK) and BioNTech continues. Scancell were shortlisted but were not a winner of the CRUK Grand Challenge.  However, the relationships with larger players who supported Lindy Durrant’s technical leadership will hopefully bear fruit in the future. The first clinical trial of Moditope will start in early 2020 addressing 3 different types of cancer. The management team has been strengthened with 2 new senior appointments.

In May 2019, Scancell announced encouraging progress in the Cancer Research UK SCIB2 pre-clinical studies enabling liposomal nanoparticles to be used as a delivery system as an alternative to the SCIB1 electroporation method. CRUK is now planning a clinical trial to test efficacy and safety of SCIB-2.

An £8.7m placing and open offer at 12p per share was successful albeit at a 31.2% discount. Unfortunately, one of the new institutional investors (owning 5%) brought in to strengthen the register got into difficulties and started to offload its Scancell holding at distressed prices. Scancell is using the proceeds of the placing and open offer to support clinical trials for SCIB1, SCIB2 and Modi-1 and pre-clinical work for Modi-2. OT3 was unable to participate in the placing at this price due to the 15% VCT rule. As a result, our holding has become further diluted. The bid price of Scancell’s shares used for the calculation of the Company’s net asset value on 28 February 2019 was 7.0p, half the 14.0p, at the end of the previous reporting year.  Unfortunately, the share price has fallen further since year end and is currently just above 4p.

As a result of the above events the portfolio has become highly concentrated with Ixaris, Immbio and Arecor making up just over 80% of OT3’s portfolio as at 28 February 2019. The fund’s holding in Abzena was realised as a result of a takeover generating proceeds of £32k. Your Company also invested £83k in Orthogem.

The government has recently raised concerns that female entrepreneurs and founders are struggling to raise capital.  We are delighted that Scancell, founded by international prize winner Lindy Durrant, and Arecor led by MD Sarah Howell, have long been supported by your VCT and successfully raised money this year.

Whilst the valuations of several companies within the portfolio have not shown growth, some have made significant commercial progress during the reporting period. We are hopeful that this progress will be reflected in improving valuations in the future.  Your VCT has access to sufficient funds to be able to support portfolio companies as they raise money in the future at hopefully enhanced valuations, provided the VCT rules will allow OT3 to continue to invest.  The Directors currently do not envisage any early exits.

Further details are contained within the Investment Manager’s Report, and on our website.

Dividends/Return of Capital

The Directors are not recommending a final dividend for the year ending 28 February 2019. The ongoing strategy is to seek to crystallise value from the portfolio and distribute cash to shareholders when exits allow.  

VCT Market Changes

After some bigger changes in previous years the regulatory landscape remained broadly unchanged during the period following the Patient Capital Review (PCR) in the autumn of 2017. Post PCR we have noticed an increase in VCT activity in the venture and growth sectors which we believe is a good thing. In fact, the move away from secondary capital and asset backed investment by the VCT industry seems to be going well – and this is no bad thing for UK Plc. We believe that, appropriately resourced and supported, the VCT structure is well-suited to this patient approach to long term value creation. Shareholders should be aware that as from 1 March 2020 there is an increase in the level of VCT qualifying investments to 80% (up from 70%) that a VCT needs to hold. Your Company comfortably exceeds that threshold.

Planning for the Future

In previous year’s report we highlighted some significant changes in the VCT market which might present opportunities for your VCT. Your Board continues to explore various options actively but are not yet able to bring forward proposals to shareholders. Should discussions prove successful we would present them to shareholders as soon as practicable.
However, there can be no certainty that any of these discussions will lead to a concrete proposal, at this time or in the future. Shareholders may have noticed developments at sister company, Oxford Technology 2 VCT Plc,  where it was proposed to add a new class of share raising money under a new manager to keep the fund economic and to spread overheads over a wider asset base.  While this proposal did not complete,  your Board continues to explore similar options.

Your Board  continues to look at methods of improving operational efficiency, reducing costs and, more generally, putting in place appropriate plans to ensure that your VCT’s operational costs relative to its overall size remain within acceptable limits.  The current level of operating costs, directors’ fees and total investment management fees are £113k (2018: £111k) and are just under 1.9% of year end assets; one of the lowest ratios in the industry. 

Whilst all companies will be affected in some way by the eventual outcome of Brexit, our particular concern was with Ixaris with their European payment systems in the case of an unplanned no deal exit in April. Ixaris have taken steps to mitigate a no deal Brexit. Your Board will continue to monitor the ongoing negotiations and will be prepared to take appropriate action to support portfolio companies if the situation changes.

Change of Auditor

As we announced in our half year results, James Cowper Kreston, our previous auditor, decided to withdraw from auditing Public Interest Entities (which include VCTs) for the time being due to the increasing regulatory landscape and associated costs, and hence resigned as our auditor in October 2018. During a previous tender process, the Audit Committee was also impressed by one of the other firms who responded, and on its recommendation, the Board has appointed UHY Hacker Young LLP ("UHY") to fill the casual vacancy that had arisen. UHY have audited this year’s results, and shareholders are being asked to reappoint them at the AGM for the year ending 29 February 2020.


Shareholders should note that the AGM for the Company will be held on Wednesday 3 July 2019 at the Magdalen Centre, Oxford Science Park, starting at the later time of 2 pm and will include presentations by Oxford Technology Management and some of the companies that the Oxford Technology VCTs have invested in.  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 – thank you for your ongoing support. 


The Oxford Technology VCTs have operated and continue to operate very much in the spirit of the old and new VCT legislation by investing in and subsequently supporting early stage technology companies.  Unfortunately, both the previous and current VCT rules limit the amount of follow on investment that we are sometimes able to make.

Looking ahead, though, the Board continues to believe your VCT is an appropriate structure to hold your Company’s assets. The portfolio continues to mature, with several holdings showing potential to generate strong returns when the appropriate time comes to realise them.  As per our stated strategy, your Board continues to work to maximise value, reduce costs, and – when valuations and liquidity allow – crystallise this value and distribute the proceeds to shareholders.

Robin Goodfellow
21 May 2019

Investment Portfolio Review

OT3 was formed in 2002 and invested in a total of 38 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.  Dividends paid to shareholders to date are 36p per share. The table on page 15 shows the companies remaining in the portfolio.  A more detailed analysis is given of the most significant investments on the following pages. The portfolio contains several investees which are showing promise and which have the potential to deliver significant returns.

OT3 first invested £110,000 in Ixaris Systems Ltd in 2002 when the company consisted of just three founders with an idea for a transaction-based financial solution that would give anyone the ability to pay online. Today it is one of the leading suppliers of payment systems to the global travel industry. Ixaris is currently slightly exceeding its forecasts However, considerable uncertainty exists about how Brexit might affect them. Ixaris is establishing a European company to help mitigate any potential adverse effects of a disorderly Brexit to which it has material exposure.

Scancell, in which OT3 first invested in 2003 when the company was based in a University laboratory, is now AIM-listed.  Scancell is developing novel immunotherapies for cancer, based on two platform technologies known as Immunobody and Moditope.  Results from Scancell's first clinical trial for the treatment of melanoma continue to be excellent with recurrence free survival at 69% at 5 years – surpassing results in other trials of ipilimumab (leading immunotherapy for cancer) which showed 46.5% at 3 years.

There was a further investment round in April 2018, however, OT3 was unable to participate due to the constraints imposed by the VCT rules.  Scancell will use the proceeds of the placing and open offer to support clinical trials for SCIB1, SCIB2 and Modi-1 and pre-clinical work for Modi-2.

Unfortunately, Scancell has had a steady decline in share price over the year. In October 2018, there was an announcement of a delay to the planned start of the clinical trial as the FDA had yet to approve the Trichor device/SCIB1 combination as an Investigational New Device (IND). Post year end, in April 2019, Scancell received all of the regulatory, ethical and legal approvals for the UK arm of this trial. Scancell has been granted patents for the Modi platform which will give it a very strong position going into the future.

Arecor has progressed its insulin programme and has both the fastest acting and most concentrated formulations in the world. The company raised £6m to start clinical trials for its insulin products.  In March 2019 following the year end, Arecor obtained approval to start its clinical trial for the Ultra-Rapid Acting Insulin. It has also received funding from Innovate for its Superfast post-prandial insulin.

In February 2019 ImmBio signed a license deal for PnuBioVax with a subsidiary of CNBG, the leading Chinese biologics company.  The deal grants a license to CNBG for the Chinese market. PnuBioVax is a vaccine that targets pneumococcal disease in children and the elderly. £30k was invested in April 2018 and a further £20k invested in a post balance sheet event in March 2019, following the signature of the Chinese licence deal.

Orthogem received a CE mark for its putty product in early 2018. Sales have started, but in many countries approval based on the CE mark is still going through the procedures. First sales have been registered for the putty in India. Steve Lane, the former CEO has moved on to another company and has been replaced by a new Executive Chairman, Bruce Venning.

STL Management Ltd (OT3 holds Select Technology via holding company STL Management Limited) specialises in software for photocopiers – now known as MFDs – Multi-Function Devices.  Over the last decade Select Technology has built up a global network of distributors and dealers through which it sells both its own and third party products.  These products now include PaperCut, KPAX, Foldr, Drivve Image, EveryonePrint and Square 9 Enterprise Content Management. Sales have increased from £210k in the year to July 2010 to over £6.8m in the year to January 2019, up from £5.6m in the year before. Select Technology paid a dividend in February 2019.

New Investments

There were three follow-on investments during the year of £30k into ImmBio, £83k into Orthogem and £219k into Arecor.  All new investments have complied with both EU State Aid rules and HMRC VCT rules.

Disposals during the year

The shares in Abzena were sold in November 2018 yielding £32k.  OT3 also received the final escrow amount from the sale of Allinea shares of £30k during the year. Glide Technologies was dissolved  in October 2018, but there was no impact in the P&L as the investment had been fully provided for.

Valuation Methodology

Quoted and unquoted investments are valued in accordance with current industry guidelines that are compliant with International Private Equity and Venture Capital (IPEVC) Valuation Guidelines and current financial reporting standards.

VCT Compliance

Compliance with the main VCT regulations as at 28 February 2019 and for the year then ended is summarised as follows:

Type of Investment
By HMRC Valuation Rules
VCT Qualifying Investments91%Minimum obligation of: 70% 
Non-Qualifying Investments9%Maximum allowed: 30% 

At least 70% of each investment must be 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 or when the holding is added to) - Complied.

The Company’s income in the period has been derived wholly or mainly (70% plus) from shares or securities - Complied.

No investment made by the VCT has caused the company to receive more than £5m of State Aid investment in the year, nor more than the lifetime limit of £12m - Complied.

                             Table of Investments held by Company at 28 February 2019

CompanyDescriptionDate of initial investmentNet cost of investment £’000Carrying value at 28/02/19 £’000Change in value for the year £’000% equity held OT3% equity held by all OTVCTs% of Net Assets
IxarisInternet paymentsAug 20025353,9464147.27.265.0
ImmBioNovel vaccinesMay 20034615192846.320.98.5
ArecorProtein stabilisationJul 20074435012443.110.58.3
(Bid price of 7p)
Cancer therapeuticsDec 2003

OrthogemBone graft materialDec 20043172399711.530.53.9
Select - STL Management Ltd Photocopier InterfacesNov 200447163282.858.6   2.7
InsenseWound healingMay 200333360-
InvroLow power electronicsApr 20044020(20)
InaplexData integrationMar 2003586(6)13.334.80.1
Plasma AntennasDirectional antennasSep 20043583-12.448.80.1
Metal NanopowdersProduction of metal powdersNov 2002153-(5)20.036.7  -
Superhard MaterialsProduction of hard materialsFeb 201211-(1)21.840.0-
MicroarrayInsense spinoutDec 20132--  0.20.2-
Total  3,1675,816676  95.8
Other Net Assets   256   4.2
NET ASSETS   6,072   100.0

Number of shares in issue:  6,785,233
Net Asset Value per share at 28 February 2019: 89.5p
Dividends per share paid to date: 36.0p

The table shows the current portfolio holdings.  The investments in Ciphergrid, Concurrent Thinking, Coraltech, Datasoft Medical, Freehand Surgical, IFM, Im-Pak, Inscentinel, Novarc, OST, Promic, ReviveR, Streamline Computing, Concurrent Thinking and Glide Technologies have been written off. The investments in Avidex, Archimed, BioAnaLab, Commerce Decisions, Dataflow, MET, Telegesis, Equitalk, Allinea and Abzena have been sold.

Lucius Cary
OT3 Managers Ltd
Investment Manager
21 May 2019

Directors’ Report

The Directors present their report together with Financial Statements for the year ended 28 February 2019.

The Directors consider that the Annual Report and Financial Statements, taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy.

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 March 2002.  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.


The Directors of the Company are required to notify their interests under Disclosure and Transparency Rule 3.12R.  The membership of the Board and their beneficial interests in the ordinary shares of the company at 28 February 2019 and at 28 February 2018 are set out below:

Name                                                             2019                            2018
R Goodfellow                                                  35,000                         35,000
D Livesley                                                       Nil                               Nil
R Roth                                                           38,149                         38,149 
A Starling                                                       Nil                                Nil

Under the Company’s Articles of Association one third of the Directors are required to retire by rotation each year.  Robin Goodfellow and Alex Starling will be nominated for re-appointment at the forthcoming AGM.  The Board believes that both non-executive Directors continue to provide a valuable contribution to the Company and remain committed to their roles.  The Board recommends that Shareholders support the resolutions to re-elect Robin Goodfellow and Alex Starling at the forthcoming AGM. 

The Board is cognisant of shareholders' preference for Directors not to sit on the boards of too many larger companies ("overboarding").  Shareholders will be aware that in July 2015, the Company, along with the other VCTs that were managed by Oxford Technology Management, appointed directors such that the four VCTs each had a Common Board.  In addition, Richard Roth has subsequently also become a Director of Seneca Growth Capital VCT Plc, a VCT investing in the Med Tech sector which is also self-managed and has a number of investments in common with the Oxford Technology VCTs.  Whilst great care is taken to safeguard the interests of the shareholders of each separate company, there is an element of overlap in the workload of each Director across the four OT funds due to the way the VCTs are managed.  The Directors note that the workload related to the four OT funds is less than it would be for four totally separate and larger funds, and are satisfied that Richard Roth has the time to focus on the requirements of each OT fund.

Investment Management Fees

OT3 Managers Ltd, the Company’s wholly owned subsidiary, has an agreement to provide investment management services to the Company for a fee of 1% of net assets per annum.  David Livesley and Robin Goodfellow, together with Lucius Cary are Directors of OT3 Managers Ltd.

Directors’ and Officers’ Insurance

The Company has maintained insurance cover, on behalf of the Directors, indemnifying them against certain liabilities which may be incurred by them in relation to their duties as Directors of the Company.

Ongoing Review

The Board has reviewed and continues to review all aspects of internal governance to mitigate the risk of breaches of VCT rules or company law.   


The Board has been informed that the Investment Manager has arrangements in place in accordance with the UK Corporate Governance Code’s recommendations by which staff of Oxford Technology Management or the Secretary of the Company may, in confidence, raise concerns within their respective organisations about possible improprieties in matters of financial reporting or other matters. 

Bribery Act 2010

The Company is committed to carrying out business fairly, honestly and openly.  The Investment Manager has established policies and procedures to prevent bribery within its organisation.  The Company has adopted a zero tolerance approach to bribery and will not tolerate bribery under any circumstance in any transaction the Company is involved in. The Company has instructed the Investment Manager to adopt the same approach with investee companies.

Relations with Shareholders

The Company values the views of its shareholders and recognises their interest in the Company.   The Company’s website provides information on all of the Company’s investments, as well as other information of relevance to shareholders (www.oxfordtechnologyvct.com/vct3.html).

Shareholders have the opportunity to meet the Board at the Annual General Meeting.  In addition to the formal business of the AGM the Board is available to answer any questions a shareholder may have.

The Board is also happy to respond to any written queries made by shareholders during the course of the year and can be contacted at the Company’s registered office: Magdalen Centre, Oxford Science Park, Oxford OX4 4GA.

Going Concern

The assets of the Company consist mainly of securities, one of which is AIM quoted, quite liquid and readily accessible, as well as cash. After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they have adopted the going concern basis in preparing the Financial Statements.

Share Capital

As disclosed on page 57, the Board has authority to make market purchases of the Company’s own shares. No shares were purchased by the Company during the year.

The Board has authority to allot up to 339,260 shares (representing approximately 5% of the ordinary share capital as at 2 May 2018). No shares were allotted by the Company during the year.

The total number of Ordinary Shares of 10p each in issue at 28 February 2019 was 6,785,233 (2018: 6,785,233) with each share having one vote. There are no other share classes in issue

Companies Act 2006 disclosures

In accordance with Schedule 7 of the Large and Medium Size Companies and Groups (Accounts and Reports) Regulations 2008, as amended, the Directors disclose the following information:

  • The Company’s capital structure and voting rights are summarised above, and there are no restrictions on voting rights nor any agreement between holders of securities that result in restrictions on the transfer of securities or on voting rights;
  • There exist no securities carrying special rights with regard to the control of the Company;
  • The rules concerning the appointment and replacement of directors, amendment of the Articles of Association and powers to issue or buy back the Company’s shares are contained in the Articles of Association of the Company and the Companies Act 2006;
  • The Company does not have any employee share scheme;
  • There exist no agreements to which the Company is party that may affect its control following a takeover bid; and
  • There exist no agreements between the Company and its Directors providing for compensation for loss of office that may occur following a takeover bid or for any other reason.

Substantial Shareholders

At 28 February 2019, the Company has been notified of the following investors whose interest exceeds three percent of the Company’s issued share capital: State Street Nominees Limited, 8.7% (representing the beneficial interest of Oxfordshire County Council Pension Fund); Hargreaves Lansdown Nominees Limited, 7.7%; Mr Richard Vessey, 3.5% and Redmayne Nominees Limited 3.1%. The holdings in Hargreaves Lansdown Nominees Limited and Redmayne Nominees Limited include the beneficial interests of Ms Shivani Palakpari Shree Parikh, who has a declared holding of  4.1%.


As discussed in the Chairman’s Report on page 7, UHY Hacker Young LLP have been appointed as the independent auditors in accordance with Section 489 of the Companies Act 2006, and will offer themselves for reappointment at the AGM.

On behalf of the Board
Robin Goodfellow
21 May 2019

Directors’ Remuneration Report


This report has been prepared by the Directors in accordance with the requirements of the Companies Act 2006. The Company’s independent auditor, UHY Hacker Young LLP, is required to give its opinion on certain information included in this report. This report includes a statement regarding the Directors’ Remuneration Policy. This report sets out the Company’s Directors’ Remuneration Policy and the Annual Remuneration Report which describes how this policy has been applied during the year.

The Directors' Remuneration Policy was last approved by shareholders at the AGM on 12 July 2018. It needs to be put to a shareholder vote every three years, and shareholders will be asked to approve it again at the Annual General Meeting in 2021.

Shareholders also need to approve the Directors' Remuneration Report every year. It was last approved at the AGM on 12 July 2018 on a unanimous show of hands and 100% of proxies voted in favour, and a Resolution to approve the Directors’ Remuneration Report for the year ended 28 February 2019 will also be proposed at the Annual General Meeting on 3 July 2019.

Directors’ Terms of Appointment

The Board consists entirely of non-executive Directors who meet at least four times a year and on other occasions as necessary to deal with important aspects of the Company’s affairs. Directors are appointed with the expectation that they will serve for at least three years and are expected to devote the time necessary to perform their duties. All Directors retire at the first general meeting after election and thereafter every third year, with at least one Director standing for election or re-election each year.  Re-election will be recommended by the Board, but is dependent upon shareholder vote. Directors who have been in office for more than nine years will stand for annual re-election in line with the AIC Code. There are no service contracts in place, but Directors have a letter of appointment.

Directors’ Remuneration Policy

The Board acts as the Remuneration Committee and meets annually to review Directors’ pay to ensure it remains appropriate given the need to attract and retain candidates of sufficient calibre and ensure they are able to devote the time necessary to lead the Company in achieving its strategy.

The Articles of Association of the company state that the aggregate of the remuneration (by way of fee) of all the Directors shall not exceed £50,000 per annum unless otherwise approved by Ordinary Resolution of the Company. The following Directors’ fees are payable by the Company:

                                                            per annum
Director Base Fee                                   £3,500
Chairman’s Supplement                          £2,000
Audit Committee Chairman                     £3,000
Audit Committee Member                       £1,500

The OT3 Director Fees are amongst the lowest of any VCT (apart from the other OT VCTs). However, the Board has spent and continues to spend more time on Company activities than was initially envisaged in Summer 2015 (when the fees were last changed) partly due to closer involvement with investment, accounting and administration procedures and partly due to compliance with additional government regulations.  Fees remain at the levels approved last year.

Typically, VCT industry total directors’ fees are in excess of £50k and individual fees in excess of £15k for equivalent levels of work.

Robin Goodfellow chairs the Company. Richard Roth chairs the Audit Committee, with Robin Goodfellow as a member of the Committee.  As the VCT is self-managed, the Audit Committee carries out a particularly important role for the VCT and plays a significant part in the sign off of quarterly management accounts, and the production of the half year and annual statutory accounts.

Fees are currently paid annually. The fees are not specifically related to the Directors’ performance, either individually or collectively.  No expenses are paid to the Directors.  There are no share option schemes or pension schemes in place, but Directors are entitled to a share of the carried interest as detailed below. The Directors may at their discretion pay additional sums in respect of specific tasks carried out by individual Directors on behalf of the Company.

David Livesley and Robin Goodfellow receive no remuneration in respect of their directorships of OT3 Managers Ltd, the Company’s Investment Manager.

The performance fee is detailed in note 3. Current Directors are entitled to benefit from any payment made, subject to a formula driven by relative lengths of service.  The performance fee becomes payable if a certain cash return threshold to shareholders is exceeded – the excess is then subject to a 20% carry that is distributed to Oxford Technology Management, past Directors and current Directors; the remaining 80% is returned to shareholders.  At 28 February 2019 no performance fee was due.

Should any performance fee be payable at the end of the year to 29 February 2020, Alex Starling, Robin Goodfellow, and Richard Roth would each receive 0.26% of any amount over the threshold and David Livesley 0.70%.  No performance fee will be payable for the year ending 29 February 2020 unless original shareholders have received back at least 139.2p in cash for each 100p (gross) invested.

Relative Spend on Directors’ Fees

The Company has no employees, so no consultation with employees or comparison measurements with employee remuneration are appropriate.

Loss of Office

In the event of anyone ceasing to be a Director, for any reason, no loss of office payments will be made. There are no contractual arrangements entitling any Director to any such payment.

Annual Remuneration Report

No change to Director’s remuneration is expected for the year ending 29 February 2020.

Directors’ FeesYear End 29/02/20
Year End 28/02/19
Year End 28/02/18
Robin Goodfellow£7,000£7,000£7,000
Richard Roth£6,500£6,500£6,500
Alex Starling£3,500£3,500£3,500
David Livesley£3,500£3,500£3,500

Income Statement

  Year Ended

28 February 2019
Year Ended

28 February 2018







(Loss)/gain on disposal of

fixed asset investments






Unrealised gain on valuation of fixed asset investments  













Investment income22-210-10
Investment management fees3(15)(44)(59)(14)(42)(56)
Other expenses4(54)-(54)(55)-(55)
Return on ordinary activities before tax  






Taxation on return on ordinary activities5------
Return on ordinary activities after tax (67)292225(59)582523
Return on ordinary activities after tax attributable to

equity shareholders












Earnings per share – basic and diluted6(1.0)p4.3p3.3p(0.9)p8.6p7.7p

There was no other Comprehensive Income recognised during the year.

The ‘Total’ column of the Income Statement is the Profit and Loss Account of the Company, the supplementary Revenue and Capital return columns have been prepared under guidance published by the Association of Investment Companies.

All Revenue and Capital items in the above statement derive from continuing operations.

The Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds. 

The accompanying notes are an integral part of the Financial Statements.

Statement of Changes in Equity

 Share CapitalShare  PremiumUnrealised Capital ReserveProfit & Loss ReserveTotal
As at 1 March 2017

Revenue return on ordinary activities after tax---(59)(59)
Expenses charged to capital---(42)(42)
Current period gains on disposal

Current period gains on fair value of investments

Dividends paid---(271)(271)
Prior years’ unrealised losses now realised

Balance as at 28 February 20186797182,0612,3895,847

Revenue return on ordinary activities after tax






Expenses charged to capital---(44)(44)
Current period losses on disposal---(8)(8)

Current period gains on fair value of investments





Prior years’ unrealised losses now realised--244(244)-
Balance as at 28 February 2019



The accompanying notes are an integral part of the Financial Statements.

Balance Sheet

  Year Ended
28 February 2019
Year Ended
28 February 2018
 Note Ref.£’000£’000£’000£’000
Fixed Asset Investments At Fair Value7 5,816 5,190
Current Assets     
Debtors82 23 
Cash At Bank 266 644 
Creditors: Amounts Falling Due
Within 1 Year
9(12) (10) 
Net Current Assets  256 657
Net Assets      6,072 5,847
Called Up Equity Share Capital10 679 679
Share Premium  718 718
Unrealised Capital Reserve11 2,649 2,061
Profit and Loss Account Reserve11 2,026 2,389
Total Equity Shareholders’ Funds11 6,072 5,847
Net Asset Value Per Share  89.5p 86.2p

The accompanying notes are an integral part of the Financial Statements.
The statements were approved by the Directors and authorised for issue on 21 May 2019 and are signed on their behalf by:

Robin Goodfellow
21 May 2019

Statement of Cash Flows

 Year Ended
28 February 2019
Year Ended
28 February 2018
Cash flows from operating activities  
Return on ordinary activities before tax225523
Adjustments for:  
Loss/ (gain) on disposal of investments8(9)
Gain on valuation of investments(344)(615)
Decrease in debtors2180
Increase/(decrease) in creditors2(45)
Movement in investment debtors and creditors(20)(10)
Outflow from operating activities(108)(76)
Cash flows from investing activities  
Purchase of investments(332)(131)
Disposal of investments62127
Outflow from investing
Cash flows from financing activities  
Dividends paid-(271)
Outflow from financing activities-(271)
Decrease in cash at bank(378)(351)
Opening cash and cash equivalents644995
Cash and cash equivalents at year end266644

The accompanying notes are an integral part of the Financial Statements.

Notes to the Financial Statements

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 accounting policies have not materially changed from last year.

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 2018 Annual Report and Financial Statements. 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
The assets of the Company consist mainly of securities, one of which is AIM quoted, quite liquid and readily accessible, as well as cash. 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, which can be found on their website at www.privateequityvaluation.com, 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 IPEVC Valuation Guidelines.

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 1: 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 2: 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 held no such investments in the current or prior year.

For investments not quoted in an active market:
Level 3: 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 (e.g. 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.

There have been no transfers between these classifications in the year (2018: none). The change in fair value for the current and previous year is recognised in the income statement.

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.

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.  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.

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.

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 the Share Premium Account.

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. Investment Income

 Year Ended
28 February 2019
Year Ended
28 February 2018
Dividends received2-
Loan interest received-10

 3.  Investment Management Fees

Expenses are charged wholly to revenue with the exception of the investment management fee which has been charged 75% to capital in line with industry practice.

 Year Ended
28 February 2019
Year Ended
28 February 2018
Investment management fee5956

In the year to 28 February 2019 the manager received a fee of 1% of the net asset value as at the previous year end (2018: 1%). Oxford Technology Management (OTM) is also entitled to certain monitoring fees from investee companies and the Board reviews the amounts. OTM also received a further £47k in 2018, the final tranche of a payment which had been deferred from previous years. This was part of the revised agreement, with effect from 1 March 2015. No further liability is payable as at 28 February 2018 or 28 February 2019.

A performance fee is payable to the Investment Manager once original shareholders have received a specified threshold in cash for each 100p (gross) invested. The original threshold of 100p has been increased by compounding that portion that remains to be paid to shareholders by 6% per annum with effect from 1 March 2013, resulting in the remaining required threshold rising to 97.4p at 28 February 2019, corresponding to a total shareholder return of 133.4p after taking into account the 36.0p already paid out (36.0p + 97.4p = 133.4p). After this amount has been distributed to shareholders, each extra 100p distributed goes 80p to the shareholders and 20p to the beneficiaries of the performance incentive fee, of which Oxford Technology Management receives 15p.

A performance fee of £nil (2018: £nil) has been accrued to date. Any applicable performance fee accrual will be charged (or credited) 100% to capital.

Expenses are capped at 3%, including the management fee, but excluding Directors’ fees and any performance fee.

 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
28 February 2019
Year Ended
28 February 2018
Directors’ remuneration2121
Auditors’ remuneration86
Other expenses2528

 5. Tax on Ordinary Activities

Corporation tax payable at 19.0% (2018: 19.1%) is applied to profits chargeable to corporation tax, if any.  The corporation tax charge for the period was £ nil (2018: £ nil).

 Year Ended
28 February 2019
Year Ended
28 February 2018
Return on ordinary activities before tax225523
Current tax at standard rate of taxation43100
UK dividends not taxable--
Unrealised gains not taxable(65)(117)
Realised gains not taxable1(2)
Excess management expenses carried forward2119
Total current tax charge--

 Unrelieved management expenses of £2,014,783 (2018: £1,902,515) remain available for offset against future taxable profits.

6. Earnings per Share

The calculation of earnings per share (basic and diluted) for the period is based on the net profit of £225,000 (2018: £523,000) attributable to shareholders divided by the weighted average number of shares 6,785,233 (2018: 6,785,233) in issue during the period. There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant.  The basic and diluted earnings per share are therefore identical.

7. Investments

 AIM quoted investments
Level 1
Unquoted investments
Level 3
Total investments £’000
Valuation and net book amount:   
Book cost as at 28 February 20184782,6513,129
Cumulative revaluation to 28 February 2018 



Valuation at 28 February 20187684,4225,190
Movement in the year:   
Purchases at cost 



Disposals – cost 



Disposals - revaluation 



Revaluation in year 



Valuation at 28 February 20193595,4575,816
Book cost at 28 February 20194092,7583,167
Cumulative revaluation to
28 February 2019



Valuation at 28 February 20193595,4575,816

Subsidiary Company

The Company also holds 100% of the issued share capital of OT3 Managers Ltd at a cost of £1.

Results of the subsidiary undertaking for the year ended 28 February 2019 are as follows:

 Country of RegistrationNature of BusinessTurnover

Retained profit/lossNet Assets

OT3 Managers LtdEngland and WalesInvestment Manager 




Consolidated group Financial Statements have not been prepared as the subsidiary undertaking is not considered to be material for the purpose of giving a true and fair view.  The Financial Statements therefore present only the results of Oxford Technology 3 VCT plc, which the Directors also consider is the most useful presentation for Shareholders.

 8.  Debtors

 28 February 2019
28 February 2018
Prepayments, accrued income22
Accrued sales proceeds-21

9. Creditors – amounts falling due in less than 1 year

 28 February 2019
28 February 2018
Creditors and accruals1210

10. Share Capital


28 February 2019
28 February 2018
Allotted, called up and fully paid:  
6,785,233 (2018: 6,785,233) ordinary shares of 10p each679679

11.   Reserves

When the Company revalues its investments during the period, any gains or losses arising are credited/charged to the Income Statement.  Changes in fair value of investments are then transferred 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 Account Reserve as a movement in reserves.

Distributable reserves are £2,026,000 as at 28 February 2019 (2018: £2,389,000).

Reconciliation of Movement in Shareholders’ Funds

 28 February 2019
28 February 2018
Shareholders’ funds at start of year5,8475,595
Return on ordinary activities after tax225523
Dividends paid-(271)
Shareholders’ funds at end of year6,0725,847

12.  Financial Instruments and Risk Management

The Company’s financial instruments comprise equity and loan note investments, cash balances and debtors and creditors.  The Company holds financial assets in accordance with its investment policy of investing mainly in a portfolio of VCT – qualifying quoted and unquoted securities whilst holding a proportion of its assets in cash or near cash investments in order to provide a reserve of liquidity. 

The risk faced by these instruments, such as interest rate risk or liquidity risk is considered to be minimal due to their nature.  All of these are carried in the accounts at fair value.

The Company’s strategy for managing investment risk is determined with regard to the Company’s investment objective. The management of market risk is part of the investment management process and is a central feature of venture capital investment. The Company’s portfolio is managed with regard to the possible effects of adverse price movements and with the objective of maximising overall returns to shareholders.

Investments in unquoted companies, by their nature, usually involve a higher degree of risk than investments in companies quoted on a recognised stock exchange, though the risk can be mitigated to a certain extent by diversifying the portfolio across business sectors and asset classes, though VCT rules limit the extent to which suitable Qualifying Investments can be bought or sold. The overall disposition of the Company’s assets is regularly monitored by the Board.

 13. Capital Commitments

The Company had no commitments at 28 February 2019 or 28 February 2018.

14.  Related Party Transactions

OT3 Managers Ltd, a wholly owned subsidiary, provides investment management services to the Company with effect from 1 July 2015 for a fee of 1% of net assets per annum.  During the year, £58,465 (2018: £55,949) was paid in respect of these fees.  No amounts were outstanding at the year end.

15.  Events after the Balance Sheet Date

During March 2019, OT3 subscribed for ImmBio shares at a cost of £20k.

16.  Control

Oxford Technology 3 VCT Plc is not under the control of any one party or individual.

Company Number: 4351474

Note to the announcement:

The financial information set out in this announcement does not constitute statutory accounts as defined in the Companies Act 2006 ("the Act").  The balance sheet as at 28 February 2019, income statement and cash flow statement for the period then ended have been extracted from the Company's 2019 statutory financial statements upon which the auditor's opinion is unqualified and does not include any statement under the section 495 of the Act.
The Annual Report and Accounts for the year ended 28 February 2019 will be filed with the Registrar of Companies.
Copies of the documents will be submitted to the National Storage Mechanism and are available for inspection at: http://www.mornningstar.co.uk/uk/NSM

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