Annual Results for the year ended 30 Sep 2019
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THE INCOME & GROWTH VCT PLC
ANNUAL FINANCIAL RESULTS OF THE COMPANY FOR THE YEAR ENDED 30 SEPTEMBER 2019
The Income & Growth VCT plc (the "Company") today announces the final results for the year ended 30 September 2019.
You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.incomeandgrowthvct.co.uk.
FINANCIAL HIGHLIGHTS
As at 30 September 2019: Net assets: £81.73 million Net asset value ("NAV") per share: 79.12 pence
- Net asset value ("NAV") total return per share was 7.4%*. - Share price total return per share was 15.8%*. - Dividends paid in respect of the year total 6.00 pence per share. This brings cumulative dividends paid to shareholders in respect of the past five years to 55.00 pence per share*. - The Company realised investments totalling £9.19 million of cash proceeds and generated net realised gains over original investment cost of £4.38 million. - £5.08 million was invested into three new companies and three follow-on investments.
*Further details on these alternative performance measures ("APMs") are contained in the Strategic Report in the Annual Report. NAV total return per share is calculated as closing NAV per share plus dividends paid in the year as a percentage of opening NAV per share.
PERFORMANCE SUMMARY The table below shows the recent past performance of the Company's existing class of shares for each of the last five years.
Dividends paid post year end in respect of the year ended 30 September 2019 A second interim dividend of 4.50 pence per share, comprising 0.50 pence from income and 4.00 pence from capital was paid to shareholders on 18 October 2019.
CHAIRMAN'S STATEMENT I am pleased to present the Annual Report of the Company for the financial year ended 30 September 2019.
Overview This has been a year of good performance by the Company. Returns to Shareholders have been higher than the previous year, due primarily to profitable realisations of portfolio companies and increased valuations in the portfolio supported by a solid income return. During the year, the Company made investments into three new portfolio companies (plus two new investments following the year end), three existing portfolio companies and fully realised its investment in two existing portfolio companies. Further details of this investment activity can be found under the 'Investment portfolio' section of my statement below and in the Investment Adviser's Review.
Including two made after the period end, eighteen new growth capital investments have now been completed by the Company in accordance with its investment policy, as revised and subsequently approved by Shareholders in response to the VCT legislation introduced by the Finance (No.2) Act 2015. During the year, additional changes to VCT legislation were enacted, further details of which can be found under the 'Industry and regulatory developments' section of my statement below.
The Investment Adviser continues to report a healthy pipeline of growth capital opportunities. Meanwhile, the mature portfolio constructed under the previous VCT rules has continued to perform steadily.
Subscription Offer On 25 October 2019 the Company launched a subscription offer for new shares. The Offer, launched in conjunction with other Mobeus advised VCTs, sought to raise £5.00 million with an over-allotment facility of an additional £5.00 million. At 4 December, £7.31 million worth of applications had been received following the utilisation of the over-allotment facility on 14 November 2019. Your Board regards it as important that the Company maintains adequate levels of liquidity to pursue its investment policy, and the amount sought reflects that objective.
Performance The Company's NAV per share increased by 7.4% for the year ended 30 September 2019 (2018: 3.2%), before deducting dividends paid during the year. This NAV total return for the year was primarily attributable to the sale of the Company's investments in Plastic Surgeon and ASL Technology, an uplift in the value of the existing portfolio, and another year of good revenue returns, arising principally from income from loan stock investments.
As a result of this year's performance, the NAV cumulative total return per share since launch (being the closing net asset value plus total dividends paid to date since launch) increased in the year by 3.1% (2018: 1.4%) from 186.32 pence to 192.12 pence.
Using the benchmark of NAV cumulative total return as at 30 September 2019, the Company was ranked 3rd out of 32 VCTs over ten years amongst generalist (including planned exit) VCTs used by the Association of Investment Companies ("AIC") to measure performance. Over the shorter periods of one, three and five years, the VCT was ranked 6th (out of 45 VCTs), and 15th (out of 47 VCTs) and 25th (out of 40 VCTs) respectively.
Further details on these alternative performance measures ("APMs") are contained in the Strategic Report within the Annual Report.
Dividends Your Board has declared and paid two interim dividends in respect of the year ended 30 September 2019. An interim dividend of 1.50 pence per share was paid on 12 July 2019 and a further interim dividend of 4.50 pence per share was paid after the year end on 18 October 2019. These dividends bring the total paid in respect of the year ended 30 September 2019 to 6.00 pence (2018: 6.00 pence). The Company has met the Board's present annual target for the year and as a result will not be declaring a final dividend. Total dividends paid in respect of the last five years are 55.00 pence per share.
Shareholders should note however, that as a result of the changes in the VCT rules that require VCTs to make growth capital investments in younger, smaller companies, which are likely to have a higher risk profile, the Company may find it a challenge to generate a similar, and consistent level of dividends over the medium-term. Your Board will continue to monitor whether the current annual dividend target of 6.00 pence per share remains sustainable in the current investment environment.
Investment portfolio The portfolio performed well during the year, increasing in value by 10.0% (2018: 3.6%) on a like-for-like basis. The portfolio achieved net increases over the year of £3.15 million in realised gains and £1.78 million from investments still held. The portfolio was valued at £50.22 million at the year end, representing 0.6% above cost (30 September 2018: £49.40 million at 95.1% of cost).
The portfolio movements across the year were as follows:
During the Company's financial year, £5.08 million (2018: £6.21 million) was invested across three new companies (2018: four) and three existing portfolio companies (2018: five). Further analysis of investments made can be found in the Investment Adviser's Review. An explanation is also provided within Note 9 to the Financial Statements.
New growth capital investments totalling £2.92 million were made into the following companies during the year: ● Grow Kudos, a digital platform for dissemination of research; ● Arkk, a regulatory and reporting requirement service provider; and ● Parsley Box, home delivered, ambient ready meals for the elderly.
Follow-on investments totalling £2.16 million were made into: ● Biosite, a provider of workforce management and security services; ● Proactive Investors, a provider of investor media services; and ● MPB Group, an online marketplace for used camera and video equipment.
Both new and follow-on investments may require further capital investment as they seek to achieve scale.
After the year end, further new investments totalling £2.50 million were made into two companies as follows: ● Active Navigation, a provider of enterprise-level file analysis software; and ● IPV, a developer of media asset management software.
Including Active Navigation and IPV, the new growth capital investments made since the VCT rule change have a carrying value of £25.85 million against a cost of £22.85 million, and so form a significant proportion of the portfolio.
Cash proceeds totalling £9.19 million for the year were received from portfolio companies that were either sold, repaid loans, or settled other capital proceeds. Of this total, £6.11 million was received as cash proceeds from the sale of Plastic Surgeon and ASL Technology, contributing to an overall multiple of proceeds over the life of the investments of 5.6x and 2.2x respectively and together realising a net gain of £2.38 million over opening valuation. Proceeds of £0.52 million were also received from the partial sale of Master Removers Group, yielding a gain of £0.03 million. Additionally, a further £1.82 million was received as loan repayments and finally, other receipts and a realised gain of £0.74 million was generated arising from deferred consideration from the sale of Entanet in 2017 (contributing to an overall multiple of proceeds over the life of the investment of 2.8x).
For the year under review, the portfolio as a whole achieved a net increase of £3.15 million on investments realised.
The unrealised portfolio as a whole achieved a net increase of £1.78 million on investments still held, with positive increases from, amongst others, Proactive Group (see further explanation in Investment Adviser's Review), Auction Technology Group, and MPB Group which were partially offset by valuation falls notably in Aquasium Technology, Bourn Bioscience and Wetsuit Outlet.
Industry and regulatory developments As mentioned last year, a number of changes to the VCT Scheme were introduced with the enactment of the Finance Act 2018. The main changes require 30% of any funds raised in the Company's accounting period to be invested in Qualifying Investments within 12 months of the end of that accounting period, and the Company's required level of Qualifying Investments as a share of its Total investments increased from 70% to 80% with effect from 1 October 2019. The Company remained compliant throughout the year and to the date of this report. These changes, together with other more minor rule changes, are not expected to impact the Company's investment strategy, albeit these are further rules that the Company must meet to maintain its VCT qualifying status.
Investment Policy revision Shareholders approved the changes to the Company's Investment Policy at the Annual General Meeting held on 6 February 2019. The changes brought the Policy into line with the new VCT regulations.
Share Premium Account At the Annual General Meeting held on 6 February 2019, Shareholders also gave their authority for the Company to seek the Court's permission to cancel the share premium account and capital redemption reserve. On 30 July 2019, the High Court of Justice Chancery Division confirmed the cancellations of the amount standing to the credit of the share premium account and capital redemption reserve, thus increasing the Company's special reserve which can be used to facilitate distributions, share buybacks and other corporate purposes.
Dividend Investment Scheme As announced on 18 December 2018, the Board decided to suspend the Company's Dividend Investment Scheme ("the Scheme") and since this date all dividends have been paid as cash.
The Scheme had historically been considered a practical and cost effective way for the Company to retain cash for investment and operating purposes. However, as both current and projected liquidity levels were deemed to be sufficient over the medium term, the Board considered in the Autumn of 2018 that the Scheme should be suspended.
Following a further review, the Board believes that it would be beneficial for the Company and for Shareholders for the Scheme to be recommenced with effect from the close of the Company's AGM on 12 February 2020. From this date, those participants in the Scheme will have their dividends reinvested to purchase new shares in the Company. As part of the Board's consideration in recommencing the scheme, it has carried out a review of the Scheme terms and conditions ("Scheme Rules").
The Board has decided to amend the Scheme Rules so that any new shares will be issued at the latest published NAV per share, as is current market practice, rather than as previously, at the higher of 70% of NAV per share or the mid-market price per share which, in practice, resulted in shares being issued at an effective discount to NAV of circa 10%.
In addition, there are a number of other technical, regulatory and clarificatory changes being made to the Scheme Rules. These changes will apply to new participants from today and from the close of the Company's Annual General Meeting on 12 February 2020 in respect of existing participants.
All existing Scheme participants will be notified of the changes and given the opportunity to remain or withdraw from the Scheme. Any Shareholders that are not currently participants of the Scheme may visit investors.mobeus.co.uk/vct-investors/the-income-and-growth-vct/dividends and sign up to the Scheme.
Succession Planning After the year end, on 18 October 2019, Colin Hook resigned as the Chairman and a Director of the Board, due to personal circumstances. I have become Chairman in the meantime as explained below.
On behalf of the Board, I record our great appreciation of Colin's substantial contribution to the Company's affairs over many years. He will be greatly missed.
The Board is pleased to have appointed a new Director and Chairman of the Audit Committee and the Nomination and Renumeration Committee, Justin Ward, on 12 November 2019, succeeding me in both these roles. Justin has extensive experience in private equity and venture capital investment and we are confident that he will make a very positive contribution to the Company.
Shareholders should be aware that the Board is seeking to appoint a new Chairman over the coming months. After a period of handover to both the new Chairman and Justin, it is my intention to retire from the Board in 2020.
Shareholder Event The Investment Adviser holds an annual VCT event for Shareholders in central London.
These events include presentations on the Mobeus advised VCTs' investment activity and performance. We have been pleased to receive positive comments from those attending in previous years. The next event will be held at the National Gallery in central London on Tuesday, 4 February 2020. This is a new venue for the event, though there will remain separate daytime and evening sessions as in previous years. Shareholders were sent an invitation to this event with further details in October. If you have not replied to the invitation, but would like to attend, please visit the website at www.mobeus.co.uk/shareholder-event and complete the short registration form to register. For alternative options, please see the shareholder information section within the Annual Report. The Board looks forward to meeting all Shareholders able to join them at the event.
Outlook Your Board considers that your Company is well positioned, with a portfolio still including relatively mature investments providing an income return, and an increasing proportion of younger, growth capital companies seeking to achieve scale. The strong result achieved for the year reflects growth and valuation increases in both elements of the portfolio, underpinned by two profitable realisations.
Notwithstanding the uncertainties surrounding the upcoming general election and the UK's exit from the European Union, there is an encouraging level of activity amongst early stage companies seeking further investment to help them grow.
As has already been stated, there is a healthy pipeline of potential new investments although, with significant funding available across the VCT sector as a whole, leading to upwards pressure on entry prices, it is increasingly important to identify the most attractive opportunities and to work with potential investee businesses to facilitate the optimal operating and financing structures to foster their growth and to deliver attractive returns.
Your Board reminds Shareholders however, that investing in earlier stage companies does involve increased risk and those that succeed often take longer to achieve scale. Positive returns may, therefore, take longer to emerge and may be more volatile. It is likely that unsuccessful investments will emerge sooner than successful investments and so financial progress may be slower initially. In the longer term, this should be offset by more significant gains.
The strong start to the Company's fundraising indicates encouraging support for the Board's strategy and will provide the Company with further capital with which to seek attractive returns for Shareholders.
Finally, I would like to thank all of our Shareholders for their continuing support.
Jonathan Cartwright Chairman 6 December 2019
INVESTMENT POLICY The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Asset Mix and Diversification The Company will seek to make investments in UK unquoted companies in accordance with the requirements of prevailing VCT legislation.
Investments are made selectively across a wide variety of sectors, principally in established companies.
Investments are generally structured as part loan and part equity in order to receive regular income and to generate capital gain from realisations.
There are a number of conditions within the VCT legislation which need to be met by I&G and which may change from time to time.
No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.
Save as set out above, the Company's other investments are held in cash and liquid funds.
Liquidity The Company's cash and liquid funds are held in a portfolio of readily realisable interest bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.
Borrowing The Company's articles of association permit borrowing of up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.
INVESTMENT ADVISER'S REVIEW There remains a strong demand for growth capital investment and Mobeus is reviewing several interesting investment opportunities. It is expected that a number of new and follow-on investments will be undertaken in the short to medium-term.
Portfolio review The portfolio's activity in the year is summarised as follows:
This has been a year of progress within the portfolio with three investments into new growth capital businesses totalling £2.92 million, three existing portfolio companies receiving follow-on funding totalling £2.16 million, and net cash proceeds received of £9.19 million, primarily from two realisations and loan repayments.
Further details are provided later in this Review.
The past year's investment and divestment activity has increased the proportion of the portfolio comprised of growth capital investments to 59.2% at the year end, representing £29.72 million of the total portfolio carrying value of £50.22 million. After the year end, the Company invested a further £2.50 million into two new portfolio companies, increasing this ratio to 61.1% on a pro-forma basis. To date, a total of £23.02 million has been invested in growth capital companies since the introduction of the new VCT regulations in 2015. Details of the valuation movements for each investee company are provided at the end of this Investment Adviser's Review.
The portfolio's contribution to the overall results of the VCT is as follows
Valuation changes of portfolio investments still held The carrying value of the existing portfolio increased by £1.78 million during the year. This net increase in the value of the portfolio of investments was due to increases in individual valuations of £6.69 million outweighing reductions in individual valuations of £(4.91) million.
The principal contributors to the valuation increases of £6.69 million were: Proactive Group £1.50 million, Auction Technology Group £1.46 million and MPB Group £1.20 million. Auction Technology Group, which the VCT part realised in 2014, is trading well ahead of budget with growth showing in all areas of its business. MPB Group has grown its revenues substantially and, in July, secured a £9.00 million further investment at a higher valuation, of which £2.00 million was provided by the Mobeus advised VCTs.
A small number of new growth investments (such as Proactive Group), have shown initial uplifts from cost, due in large part to the structure of the Company's investment, but, in some cases, also due to the underlying investee company performance. Proactive Group has made consistent positive progress in all its markets since investment. The principal driver of the value increase over the period however is the preference structure of the investment which allocates a greater share of economic value to the VCTs at the current stage of the business' development.
The main reductions within the total valuation decreases of £(4.91) million were as follows:
● Aquasium £(0.83) million; ● Bourn Bioscience £(0.80) million; ● Wetsuit Outlet £(0.67) million; ● SuperCarers £(0.65) million; and ● Redline £(0.41) million
Aquasium has underperformed for the year and is having a slow-down in conversion of its sales pipeline, particularly as a result of a slow-down in global trade. Bourn has now opened its new facility in Essex but this will take time to reach normal trading levels. Over the medium-term the company has a strong brand and retains a strategic position in the market. Wetsuit Outlet continues to have a disappointing period post investment, although it is anticipated that measures recently implemented to restore margins will soon begin to improve profitability. Redline's revenues have been unpredictable and sales in recent months have been lower than planned, which has impacted valuation. Finally, SuperCarers is performing behind plan and in response is undertaking a restructure of its cost base.
Realised gains from sales of investments The Company achieved net realised gains on the sale of investments of £3.15 million over their value at the start of the financial year.
The Company realised its investments in ASL Technology and Plastic Surgeon during the period under review, generating realised gains in the period of £1.89 million and £0.49 million respectively. Total proceeds received over the life of each investment contributed to a multiple over their original cost of 2.2x for the sale of ASL Technology and 5.6x for Plastic Surgeon. The Company also made a part disposal of Master Removers Group realising £0.52 million in proceeds and a gain of £0.03 million. Finally, the Company achieved a gain of £0.74 million arising from the disposal of Entanet in 2017, increasing the final return on cost from this investment to 2.8x.
In addition to deferred consideration receipts and proceeds from disposals of investments referred to above, the Company also received loan stock repayments of £1.82 million.
Investment portfolio yield and capital repayments During its financial year, the Company received the following amounts in loan interest and dividend income:
1 Total portfolio income in the year is generated solely from investee companies within the portfolio. See Note 3 of the Financial Statements for all income receivable by the Company.
New investments in the year A total of £2.92 million was invested into three new investment during the year as detailed below:
Further investments in existing portfolio companies in the year The Company made further investments totalling £2.16 million into three existing portfolio companies during the year under review, as detailed below:
New investments after the year end After the year end, the Company made two new investments totalling £2.50 million, as detailed below:
Realisations during the year The Company realised its investments in ASL Technology and Plastic Surgeon during the year, generating cash proceeds of £6.11 million as detailed below:
There was a partial realisation of Master Removers Group ("MRG") which generated proceeds of £0.52 million and a realised gain of £0.03 million. Following a reorganisation of MRG's share capital, the Company has increased its equity share from 6.3% to 9.5%.
Loan stock repayments and other receipts Loan stock repayments of £1.82 million were received during the year, most notably from Hollydale Management Limited (£0.62 million) and deferred consideration receipts of £0.74 million arising from past realisations.
Net realised gains on the three full and partial disposals above of £2.41 million, increased by deferred consideration gains of £0.74 million, equal the total realised gain for the year of £3.15 million.
Mobeus Equity Partners LLP Investment Adviser
6 December 2019
Investment Portfolio Summary
For further information on the Investment Portfolio, please see the Annual Report and Financial Statements.
PRINCIPAL RISKS The Directors acknowledge the Board's responsibilities for the Company's internal control systems and have instigated systems and procedures for identifying, evaluating and managing the principal risks faced by the Company. This includes a key risk management review which takes place at each quarterly Board meeting. The principal risks identified by the Board, a description of the possible consequences of each risk and how the Board manages each risk are set out below.
The risk profile of the Company changed as a consequence of the VCT regulations introduced in 2015. As the Company is required to focus its investment on growth capital investments in younger companies it is anticipated that investment returns will be more volatile and will have a higher risk profile. The Board remains confident that the Company and the Investment Adviser has adapted to these new requirements and put in place appropriate resource to identify and make suitable investments.
The Board regularly sets and reviews policies for financial risk management and full details of these can be found in Note 16 to the Financial Statements.
STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year and the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently; · make judgements and accounting estimates that are reasonable and prudent; · state whether the Financial Statements have been prepared in accordance with United Kingdom accounting standards, subject to any material departures disclosed and explained in the Financial Statements; · prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; · prepare a Strategic Report, a Director's Report and Directors' Remuneration Report which comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein.
Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority The Directors confirm to the best of their knowledge that:
a) The Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice give a true and fair view of the assets, liabilities, financial position and the profit of the Company.
b) The Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
Having taken advice from the Audit Committee, the Board considers the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law.
For and on behalf of the Board
Jonathan Cartwright Chairman
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FINANCIAL STATEMENTS
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) and realised gains on investments and the proportion of the Investment Adviser's fee and performance fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") (updated in January 2017) by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year.
Statement of Changes in Equity for the year ended 30 September 2019
Statement of Changes in Equity for the year ended 30 September 2018
The composition of each of these reserves is explained below: Called up share capital The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for Subscription or Dividend Investment Scheme or reduced due to shares bought back by the Company.
Capital redemption reserve The nominal value of shares bought back and cancelled is held in this reserve, so that the company's capital is maintained.
Share premium reserve This reserve contains the excess of gross proceeds less offer costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme.
Revaluation reserve Increases and decreases in the valuation of investments held at the year end are accounted for in this reserve, except to the extent that the diminution is deemed permanent. In accordance with stating all investments at fair value through profit and loss (as recorded in note 9), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
In accordance with stating all investments at fair value through profit and loss (as recorded in note 9), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.
Special distributable reserve The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), and 75% of the Investment Adviser fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve.
Realised capital reserve The following are accounted for in this reserve: - Gains and losses on realisation of investments; - Permanent diminution in value of investments; - Transaction costs incurred in the acquisition and disposal of investments; and - 75% of the Investment Adviser fee expense and 100% of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies, and - Capital dividends paid.
Revenue reserve Income and expenses that are revenue in nature are accounted for in this reserve together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
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Notes to the Financial Statements for the year ended 30 September 2019
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