British Smaller Companies VCT plc Annual Report &

Accounts 1

British Smaller Companies VCT plc

Annual Report

for the year ended 31 March 2024

Transforming small businesses

bscfunds.com

Financial

Overview

02 Financial Highlights in the Year

03 Five Year Summary

03 Financial Calendar

04 The Portfolio

Strategic Report

05 Chair’s Statement

09 Objectives and Key Policies

10 Processes and Operations

11 Key Performance Indicators

15 Portfolio Structure and Analysis

17 Investment Review

23 Case Studies

24 Portfolio Summary

at 31 March 2024

25 Summary of Portfolio Movement

since 31 March 2023

26 Investee Company Information

31 Risk Factors

34 Other Matters

34 Section 172 Statement

Corporate Governance

36 Directors

37 Directors’ Report

41 Corporate Governance

49 Directors’ Remuneration Report

52 Directors’ Responsibilities

Statement

Independent Auditor’s Report

53 Independent Auditor’s Report

Financial Statements

60 Statement of Comprehensive

Income

61 Balance Sheet

62 Statement of Changes in Equity

64 Statement of Cash Flows

65 Notes to the Financial Statements

Company Information

92 Notice of the Annual General

Meeting

Advisers to the Company

CONTENTS

About us

Registered Number:

03134749

British Smaller Companies VCT plc

was formed in 1996. It aims to

provide investors exposure to a

diversified portfolio of UK

businesses that offer opportunities

in the application and development

of innovation in their

products and services, across

established and emerging industries.

The portfolio had a valuation of

£126.6 million as at 31 March

2024.

Discover more about

British Smaller Companies VCT plc

www.bscfunds.com

British Smaller Companies VCT plc Annual Report & Accounts

1

Dividend Re-Investment Scheme (“DRIS”)

The Company operates a DRIS which gives

shareholders the opportunity to re-invest any cash

dividends. Currently, dividends are re-invested at

the latest reported net asset value as adjusted for

the relevant dividend in question if this has not

already been recognised. Any dividends that are re-

invested by shareholders are eligible for income tax

relief at

30 per cent of the amount invested, subject to an

annual investment limit of £200,000, or, if lower, the

amount

of a shareholder’s income tax liability. The Finance Act

2014 confirmed that shares acquired at any time under

dividend re-investment schemes will not impact tax

relief on sales of, or subscriptions for, VCT shares,

unless in the latter case it results in a breach of the

£200,000 investment limit.

*Under Chapter 3 Part 6 of the Income Tax Act

2007

BRITISH SMALLER

COMPANIES VCT PLC

Transforming small

businesses

Share Buy-Backs

Share buy-backs enable shareholders to obtain some

liquidity in an otherwise illiquid market when there is

a need to dispose of shares. This policy is kept under

active review to ensure that any decisions taken are

in the interests of shareholders as a whole. The current

rate of discount at which ordinary shares will be bought

back is targeted to be no more than five per cent of the

latest reported net asset value.

Manager

YFM Private Equity Limited (“the Manager”) is a

wholly owned subsidiary of YFM Equity Partners LLP

and is authorised and regulated by the Financial

Conduct Authority.

Investment Policy

The investment strategy of British Smaller Companies

VCT plc (“the Company”) is to invest in UK

businesses across a broad range of sectors that

blends a mix of businesses operating in established

and emerging industries that offer opportunities in the

application and development of innovation in their

products

and services.

These investments will all meet the definition of a

Qualifying Investment* and be primarily in unquoted

UK companies. It is anticipated that the majority of

these businesses will be re-investing their profits

for growth and the investments will comprise mainly

equity investments. Further details of the

Company’s investment policy can be found in the

Strategic Report on page 9.

Dividend Policy

The Board remains committed to achieving the

objective, over time, of paying tax free dividends

from realised investment returns. This depends upon

the level of investment income and realisations that

the Company is able to make or achieve in any one

period and cannot be guaranteed.

The tax reliefs that are available for an investment

in a Venture Capital Trust are of particular benefit

for shareholders as there is no income tax payable

on the dividends received, or need to declare them

in a tax return.

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

2

British Smaller Companies VCT plc Annual Report & Accounts

Financial

Highlight

s

FINANCIAL OVERVIEW

1. Total Return (“TR”) is defined as an

Alternative Performance Measure. The

Board considers TR to be the primary

measure of shareholder value; it is

calculated as the total of current net

asset value per ordinary share plus

cumulative dividends paid since

inception of the Company.

The Annual Report contains a number

of Alternative Performance Measures

(“APMs”). APMs are financial measures

that are in addition to those defined or

specified in the Company’s financial

reporting framework.

All stated figures above and throughout

the annual report exclude the impact of any

tax benefits that may arise to shareholders

due to the Company’s status as a Venture

Capital Trust.

FUNDS RAISED

£62.4m

for 22/23 & 23/24

The Company raised £44.3

million in 2022/23, which

was allotted in April

2023. A further £18.1 million

was raised in 2023/24 and

allotted in January 2024.

DIVIDENDS PAID IN

THE YEAR

4.0p

Yield of 4.8%

Total dividends paid were 4.0

pence per ordinary share,

which equates to 4.8 per cent

of the opening net asset value

per ordinary share.

TOTAL RETURN IN

THE YEAR

1

4.7% return

in the year

The Company’s Total Return

increased by 3.9 pence,

equivalent to an annualised

return of 4.7 per cent of the

opening net asset value. Overall

Total Return increased from

258.6 pence per ordinary share

to 262.5 pence per ordinary

share, which includes

cumulative dividends paid of

178.9 pence per ordinary share.

INVESTED IN

PORTFOLIO

for

23/24

The Company invested capital

into eight companies during the

year, of which two were new

additions to the portfolio.

REALISATION

PROCEEDS

+£11.3m over

cost

h

3.9p£16.5m

£9.1m

Realisations of portfolio

investments generated total

proceeds of £16.5 million, a

gain of £4.6 million over the

opening carrying value and

£11.3 million over cost, a

blended return of 3.1x cost.

Five Year

Summar

y

Year ended

31 March

2023

Year ended

31 March

2022

Year ended

31 March

2021

Year ended

31 March

2020

Income

£000

1,994

1,065

4,074

1,517

Profit (loss) before and

after taxation £000

12,237

28,264

21,339

(5,091)

Net assets attributable

to ordinary shares £000

157,032

159,534

110,36

0

88,961

Profit (Loss) per ordinary

share

6.54p

18.22p

15.38p

(3.64p)

Dividends per ordinary

share paid in the year

8.5p

9.0p

4.0p

6.0p

Net asset value per ordinary

share

83.7p

85.7p

75.8p

64.5p

Total Return per ordinary

share

1

258.6p

252.1p

233.2p

217.9p

Increase (decrease) in

Total Return per ordinary

share

1

6.5p

18.9p

15.3p

(3.8p)

Annualised

return

1

Cumulative 3 year increase in

Total Return per ordinary

share

1

Annualised 3 year

return

1

Cumulative 5 year increase in

Total Return per ordinary

share

1

Annualised 5 year

return

1

Year ended

31 March

2024

4,045

10,618

219,600

4.34p

4.0p

83.6p

262.5p

3.9p

4.8%

29.3p

13.3%

40.8p

10.9%

1. These are Alternative Performance Measures. The Board considers Total Return to be the primary measure of shareholder value.

The annualised return comprises the cumulative dividends paid plus the NAV at 31 March 2024, compared to the NAV at the

beginning of the relevant period.

Results announced

14 June 2024

Shareholder workshop

20 June 2024

Ex-dividend date

27 June 2024

Record date

28 June 2024

DRIS Election date

12 July 2024

Dividend paid

26 July 2024

Annual General Meeting

10 September 2024

British Smaller Companies VCT plc Annual Report & Accounts

3

Financia

l

Calenda

r

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

4

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL OVERVIEW

Your

Portfoli

o

Better Informed Journeys

British Smaller Companies VCT plc Annual Report & Accounts

5

STRATEGIC REPORT

Chair’s

Statemen

t

I am pleased to present the 2024

annual report and financial

statements of British Smaller

Companies VCT plc (the

“Company”), which highlight

steady progress for the Company

despite

a challenging global

economic and political

environment.

The year has been characterised by the US, UK and

European economies tackling persistently high

inflation. UK interest rates were still rising in the early

part of the Company’s financial year, reaching a peak

of 5.25 per cent by August. While rates of inflation have

come down since, they remain stubbornly above

central

bank target rates, resulting in delayed cuts to

interest rates which continue to weigh on the

economy.

Across this period the Company has generated a

4.7 per cent return on its opening net asset value in

the year. Over the same period, the FTSE Small Cap

rose by 4.4 per cent, while the AIC’s index of

generalist VCTs rose by 0.3 per cent on a Share Price

Total Return basis.

Two continuing trends have driven this positive return.

First, portfolio companies have adapted well to

market conditions and, while focused on capital

efficiency, are still achieving good growth rates in

most cases. Of the 24 portfolio companies valued on

a revenue basis, all but five have demonstrated

positive revenue growth over the last 12 months, and

nine have delivered growth of over 40 per cent. This

growth has helped

to offset the impact of lower valuation multiples, and

leaves the portfolio well placed for further growth as

market conditions improve.

Second, the portfolio continues to achieve positive

realisations in a market where many firms have

struggled to convert book values into cash. In the

year the Company fully realised four investments and

partially realised a further two for combined proceeds

of £16.5 million at a blended return of 3.1 times cost;

these were pleasing outcomes for the Company and

reflect the Company’s ethos of working closely with

management teams to generate positive returns from

all of its investments.

Financial Performance

In 2024, the Company delivered a 3.9 pence per

ordinary share increase in Total Return which, as

noted above, is equivalent to 4.7 per cent of the

opening net asset value at 31 March 2023. Total

Return is now 262.5 pence per ordinary share.

The portfolio drove the positive performance, which

generated a return of £10.6 million, 8.6 per cent over

its opening value with £4.6 million of the return from

realised investments and £6.0 million from

unrealised investments. New and follow-on

investments totalling £9.1 million were completed in

the year.

Realisations in the Year

Realisations of portfolio investments generated total

proceeds of £16.5 million, a gain of £4.6 million over

the opening carrying value and £11.3 million over the

original cost. There were four full realisations in the

year: Ncam, E2E, MacroArt and DisplayPlan; and two

partial realisations: KeTech and Arcus.

The investment in Ncam was realised in April 2023,

generating initial proceeds of £1.4 million (0.6x cost),

with the potential for additional receipts of up to £1.2

million over the coming years, which would see the

Company fully recover its investment. £0.3 million of

deferred proceeds have been recognised at the year-

end.

In November 2023 the Company exited its investment

in E2E for £2.0 million, representing a 2.5x return

on the Company’s cost; and MacroArt for £1.5

million, representing a 2.0x return on cost.

To maximise shareholder value, the KeTech business

was split into its two component parts, Rail and

Defence. The Defence business was subsequently sold

in January 2024, generating proceeds of £1.5 million.

To date, the Company has realised proceeds of £4.1

million from its KeTech investment, a 2.0x return on

cost, while still retaining its investment in the Rail

business, which at the year-end was valued at £1.2

million.

In January 2024 the Company realised part of its

investment in Arcus, generating proceeds of £0.3

million, while still retaining its investment in the

remaining restructured business which at the year-end

was valued at £1.0 million. This combined £1.3 million

of value to date equates to 0.4x cost.

In February 2024, the Company sold its investment in

Displayplan for £9.0 million. Total proceeds received

over the life of the investment are £12.5 million, an

excellent 9.6x return on the Company’s cost. There is

the potential for further deferred proceeds in due

course with £0.6 million of deferred proceeds

recognised at the year-end.

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

6

British Smaller Companies VCT plc Annual Report & Accounts

New Investments

The Company invested £9.1 million in the year into

the portfolio. Two new investments were made in the

year, totalling £4.9 million. In our continued support of

the portfolio, six companies received follow-on funding

in the year, totalling £4.2 million.

The new investments

are:

Investment

Sector

GEEIQ

Data and market intelligence platform in the gaming

space

Workbuzz

SaaS based employee engagement, survey and insights

platform

Financial Results

The movement in net asset value (“NAV”) per ordinary share and the dividends paid in the year are set out in

the table below:

Pence per

ordinary share

£000

NAV at 31 March 2023

Increase in value

Gain on disposal of

investments

157,032

6,045

4,475

10,520

98

10,618

61,585

229,235

(9,635)

Net underlying change in investment portfolio

Net operating income

Total Return in period

Issue/buy-back of new shares

NAV before the payment of dividends

Dividends paid

NAV at 31 March 2024

83.7

2.3

1.7

4.0

-

4.0

(0.1)

87.6

(4.0)

83.6

219,600

Cumulative dividends

paid

178.9

Total Return: at 31 March 2024 262.5

at 31 March 2023 258.6

The charts on page 11 show the movement in Total Return and Net Asset Value over time in greater

detail.

Chairman’s

Statement

(continued

)

British Smaller Companies VCT plc Annual Report & Accounts

7

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Dividend Re-investment Scheme (“DRIS”)

The Company operates a DRIS, which gives

shareholders the opportunity to re-invest any cash

dividends received; it is open to all shareholders,

including those who invested under the recent

offers. The main advantages of the DRIS are:

1the dividends remain tax free;

and

2any DRIS investment attracts income tax relief

at the rate of 30 per cent.

For the financial year ended 31 March 2024, £2.0

million was re-invested by way of the DRIS, from overall

dividends paid of £9.6 million.

Fundraising

During the year the Company received net proceeds

of £44.3 million from its 2022/23 fundraising, allotted

in April 2023; and £18.1 million from the first allotment

of its 2023/24 fundraising, allotted in January 2024.

Shareholder Relations

Investor Workshop

The annual shareholder workshop held on 20 June

2023 was well attended. Attendees heard from

Tom Dunlop, CEO of Summize, and Philip Hunt,

Chair of Vuealta.

The Company also hosted an online webinar on 27

November 2023, which included presentations from

Tom Whicher, CEO of DrDoctor, and Mal Barritt,

CEO of TravelTek.

We are pleased to confirm that the next in-person

shareholder workshop will be held jointly with British

Smaller Companies VCT2 plc on 20 June 2024 at One

Great George Street, Westminster, London SW1 3AA.

The electronic communications policy continues to

be a success, with 82 per cent of shareholders now

receiving communications in this way. Documents

such as the annual report are published on the

website www.bscfunds.com rather than by post,

saving on printing costs, as well as being more

environmentally friendly.

The Company’s website, www.bscfunds.com,

is refreshed on a regular basis and provides a

comprehensive level of information in what I hope

is a user-friendly format.

The portfolio investments held at the beginning of the

financial year, amounting to £123.4 million, delivered

a return over the year of £10.6 million. There was a

gain of £0.1 million arising from prior year realisations,

and the realisation of the listed investments generated

a value reduction of £0.2 million.

The current portfolio’s net valuation increased by

£6.0 million. Within this there were gains of £14.8

million, offset by £8.8 million of downward

movements.

Treasury

Due to the nature of its structure, a proportion of the

Company’s net assets will be held in cash and cash

equivalents at any point in time. As interest rates

have risen, the Company has taken an active

approach to generating a good return on liquid funds,

whilst remaining focused on the primary goal of

capital preservation.

A portion of the Company’s liquid assets are held

across a diversified range of Triple-A rated money

market funds, managed by global institutions, while

the balance is held as readily accessible cash, all

of which is held at Tier 1 Financial Institutions

(A2 rated or above).

The Company’s small externally managed listed

portfolio was exited in the period, due to the better

risk-adjusted return profile available in money

market funds and cash deposits.

In the year, the Company generated a return of

£2.8 million on its liquid assets, and at year-end was

generating a weighted run-rate return on these assets

of around 4.8 per cent per annum.

Dividends

Dividends paid in the year totalled 4.0 pence per

ordinary share. These comprised interim dividends

of 4.0 pence per ordinary share for the year ended

31 March 2024. Cumulative dividends paid as at

31 March 2024 were 178.9 pence per ordinary

share.

An interim dividend for the year ending 31 March 2025

of 2.0 pence per ordinary share will be paid on 26 July

2024, to shareholders on the register at 28 June 2024.

8

British Smaller Companies VCT plc Annual Report & Accounts

Chairman’s

Statement

(continued

)

STRATEGIC REPORT

SHAREHOLDER RELATIONS

Annual General Meeting

10 September 2024

The Annual General Meeting of the Company will

be held at 9:30 am on 10 September 2024 at

Thomas House, 84 Ecclestone Square, London

SW1V 1PX. Full details of the agenda for this

meeting are included in the Notice of the Annual

General Meeting on page 92.

Events After The Balance Sheet Date

On 3 April 2024 the Company allotted the final shares

from its fully subscribed 2023/24 share offer. Gross

proceeds of £36.8 million were raised, resulting in the

issue of 42,588,037 ordinary shares. This increased

the number of ordinary shares in issue to

305,247,398.

Subsequent to the year end, £4.7 million has been

invested into two new investments, Fuuse and Ohalo.

Outlook

While rates of inflation have come down in recent

months, central banks remain wary of its persistence,

which is seeing interest rates remaining at elevated

levels for longer than originally anticipated. Ongoing

geopolitical instability, particularly in Ukraine and the

Middle East, may negatively impact western economies,

while upcoming US and UK elections may also provide

some uncertainty.

Portfolio companies have performed well while

maintaining a focus on capital efficiency over the

past 12 months. They are therefore now well placed

to take on further funding to accelerate growth, and

we anticipate significant opportunities to deploy

capital into the Company’s most promising

investments over the course of the next year. The

Company’s 2023/24

fundraising leaves it well placed to provide this

support, as well as adding new companies to the

portfolio in the coming year.

Rupert Cook

Chair

14 June 2024

Rupert Cook

Rupert Cook (Jun 14, 2024 08:57 GMT+1)

British Smaller Companies VCT plc Annual Report & Accounts

9

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The Company’s objective is to

maximise Total Return and

provide investors with a long-

term tax free dividend yield

whilst maintaining the

Company’s status as a venture

capital trust.

Investment Strategy

The Company seeks to build a broad portfolio of

investments in early-stage companies focused on

growth, with the aim of spreading the maturity profiles

and maximising return, as well as ensuring compliance

with VCT Regulations.

The Company predominantly invests in unquoted

smaller companies and expects that this will continue

to make up the significant majority of the portfolio. It

will also retain holdings in cash or near-cash

investments to provide a reserve of liquidity which will

maximise

the Company’s flexibility as to the timing of

investment acquisitions and disposals, dividend

payments and share buy-backs.

Unquoted investments are structured using various

investment instruments, including ordinary shares,

preference shares, convertible securities and very

occasionally loan stock, to achieve an appropriate

balance of income and capital growth, having regard

to the VCT Regulations. The portfolio is diversified

by investing in a broad range of industry sectors.

The normal investment period into the portfolio

companies is expected to be typically between

the range of five to seven years.

Investment Policy

The investment policy of the Company is to invest

in UK businesses across a broad range of sectors

that blends a mix of businesses operating in

established and emerging industries that offer

opportunities in the application and development of

innovation in their products and services.

These investments will all meet the definition of a

Qualifying Investment and be primarily in unquoted UK

companies. It is anticipated that the majority of these

will be re-investing their profits for growth and the

investments will comprise mainly equity instruments.

Objectives

and

Key Policies

The Company seeks to build a broad portfolio of

investments in early-stage companies focused on

growth with the aim of spreading the maturity profiles

and maximising return as well as ensuring compliance

with the VCT guidelines.

Borrowing

The Company does not borrow and has no borrowing

facilities, choosing to fund investments from its own

resources.

Co-investment

British Smaller Companies VCT plc and British

Smaller Companies VCT2 plc (together “the VCTs”)

typically

co-invest in investments, allocating such investments

60 per cent to the Company and 40 per cent to British

Smaller Companies VCT2 plc. However, the Board of

the Company has discretion as to whether or not to

take up its allocation; where British Smaller

Companies VCT2 plc does not take its allocation, the

Board may opt to increase the Company’s allocation in

such opportunities.

The VCTs may invest alongside co-investment funds

managed by YFM, the Manager of the VCTs. The

VCTs have first priority on all equity investment

opportunities meeting the VCT qualifying criteria. Non-

VCT qualifying investments are allocated to YFM’s co-

investment funds.

Asset Mix

Cash which is pending investment in VCT-qualifying

securities is held in money market funds and interest

bearing instant access and short-notice bank accounts.

Remuneration Policy

The Company’s policy on the remuneration of its

directors, all of whom are non-executive, can be

found on page 49.

Other Key Policies

Details of the Company’s policies on the payment of

dividends, the DRIS and the buy-back of shares are

given on page 1. In addition to these, details of the

Company’s anti-bribery and environmental and

social responsibilities policies can be found on page

35.

10

British Smaller Companies VCT plc Annual Report & Accounts

The Manager is responsible for the

sourcing and screening of

investment opportunities, carrying

out suitable due diligence

investigations and making

submissions to the Board regarding

potential investments.

Post investment, the Manager works intensively

with the businesses and management teams in

which the Company is invested, monitoring

progress, effecting change and, where applicable,

redefining strategies with a view to maximising

values through structured exit processes.

The Board regularly monitors the performance of the

portfolio and the investment requirements set by the

relevant VCT legislation. Reports are received from

the Manager regarding the trading and financial

position

of each investee company and senior members of

the Manager regularly attend the Company’s Board

meetings. Monitoring reports on compliance with

VCT regulations are also received at each Board

meeting so that the Board can monitor that the

Venture Capital Trust status of the Company is

maintained and take corrective action if appropriate.

Monitoring reports carrying out an independent

review of this compliance are received twice a year.

Processes

and

Operations

STRATEGIC REPORT

The Board reviews the terms of YFM Private Equity

Limited’s appointment as Manager on a regular

basis.

YFM Private Equity Limited has performed

investment advisory/management, administrative and

secretarial services for the Company since its

inception on 28 February 1996. The principal terms

of the agreement under which these services are

performed are set out in note 3 to the financial

statements.

In the opinion of the directors, the continuing

appointment of YFM Private Equity Limited as Manager

is in the interests of the shareholders as a whole, in

view of its experience in managing venture capital

trusts and in making, managing and exiting investments

of the nature falling within the Company’s investment

policies.

British Smaller Companies VCT plc Annual Report & Accounts

11

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Key

Performance

Indicator

s

Total Return, calculated by reference to the

cumulative dividends paid plus net asset value

(excluding tax reliefs received by shareholders), is

the primary measure of performance in the VCT

industry.

Total Return (pps)

The chart illustrates the Total Return

(excluding tax reliefs received by

shareholders) for investors who

subscribed to the first fundraising in 1996

who have re-invested their dividends.

2015201620172018201920202021202220232024

412.9

Total Return with Dividend Re-Investment Scheme

(as at 31 March)

462.6

443.3

290.9

249.0

260.9

270.6

225.7

278.0

336.9

2015201620172018201920202021

202220232024

98.7108.7130.7136.4147.4153.4157.4

100.0

98.8

74.3

64.5

75.8

82.3

79.6

166.4174.9178.9

85.783.7

83.6

233.2

208.7

213.0

216.0

221.7

217.9

197.5

252.1

258.6

262.5

Total Return (as

at 31 March)

Total Return (pps)

NAV (pps)

Cumulative dividends (pps)

The chart shows how the Total Return of

your Company has developed over the

last ten years.

The evaluation of comparative success

of the Company’s Total Return is by way

of reference to the Share Price Total

Return for an index of generalist VCTs

that are members of the AIC (based on

figures provided by Morningstar). This is

the Company’s stated benchmark index.

A comparison and explanation of the

calculation of this return is shown in

the Directors’ Remuneration Report

on page 51.

12

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Shareholder Returns

The Board considers Total Return to be the primary measure of shareholder value. The IRR returns from the offers

over the last ten years are set out below. IRR is the annual rate of return that equates the cost at the date of the

original investment, with the value of subsequent dividends plus the audited 31 March 2024 Net Asset Value per

share. This excludes the benefit of any initial tax relief.

The IRRs shown are based on fundraisings and offer prices during the relevant calendar year whilst the second

graph below shows specific financial periods to 31 March 2024. Note, there were no fundraisings in 2018 and 2020

and it is too soon to give meaningful returns for the fundraisings in 2023 and 2024.

Set out below is the annualised return over 10, 5, 3, 2 and 1 years to 31 March 2024. The annualised return

is calculated with reference to the cumulative dividends paid in the period plus the audited NAV at 31 March

2024, compared to the NAV at the beginning of the relevant period.

10 yrs5 yrs3 yrs2 yrs1 yr

7.8%

10.9%

Excluding all tax reliefs

Annualised return p.a. over 10, 5, 3, 2 and

1 year periods

13.3%

(to 31 March 2024)

6.4%

4.8%

Shareholder Returns Excluding

all Tax Reliefs

(to 31 March 2024)

20132014201520162017201920212022

9.0%

8.4%

7.6%

8.7%

8.4%

10.3%

14.2%

5.5%

Excluding all tax reliefs

Key

Performance

Indicators

(continued)

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

British Smaller Companies VCT plc Annual Report & Accounts

13

Expenses

Ongoing Charges

The Ongoing Charges figure, as calculated in line

with the AIC recommended methodology, is used

by the Board to monitor expenses. This figure

shows shareholders the costs of the Company’s

recurring operational expenses, expressed as a

percentage of

the average net asset value. Whilst based on historical

information, this provides an indication of the likely

level of costs that will be incurred in managing the

Company in the future.

Year to Year to

31 March 31 March

2024 2023

(%)(%)

Ongoing Charges figure*1.852.12

* Alternative Performance

Measure.

Shareholders benefit from the Company’s agreement

with the Manager to pay a lower level of management

fee of 1 per cent on surplus cash. The Company’s

ongoing charges ratio is one of the lowest in the VCT

industry.

Expenses Cap

The total costs incurred by the Company in the year

(excluding any performance related fees, trail

commission payable to financial intermediaries and

VAT) is capped at 2.9 per cent of the total net asset

value as at the relevant year end. The treatment of

costs in excess of the cap is described in note 3 on

page 71. There was no breach of the expenses cap in

the current or prior year.

Compliance with VCT Legislative Tests

A principal risk facing the Company is the retention

of its VCT qualifying status. The Board receives

regular reports on compliance with the VCT legislative

tests from the Manager. In addition, the Board receives

formal reports from its VCT Tax Adviser (Philip Hare &

Associates LLP) twice a year. The Board can confirm

that during the period, all of the VCT legislative tests

have been met.

Under Chapter 3 Part 6 of the Income Tax Act 2007,

in addition to the requirement for a VCT’s ordinary share

capital to be listed in the Official List on a European

regulated market throughout the period, there are

further specific tests that VCTs must meet following the

initial three year provisional period.

Income

Test

The Company’s income in the period must be derived

wholly or mainly (70 per cent) from shares or

securities.

Retained Income

Test

The Company must not retain more than 15 per cent

of its income from shares and securities.

Qualifying Investments

Test

At least 80 per cent by value of the Company’s

investments must be represented throughout the

period by shares or securities comprised in

Qualifying Investments of investee companies.

For shares issued in accounting periods beginning on

or after 6 April 2018, at least 30 per cent of those

share issues must be invested in Qualifying

Investments

of investee companies by the anniversary of the

accounting period in which those shares are issued.

Eligible Shares

Test

At least 70 per cent of the Company’s Qualifying

Investments must be represented throughout the period

by holdings of non-preferential shares.

Investments made before 6 April 2018 from funds

raised before 6 April 2011 are excluded from this

requirement.

At least 10 per cent of the Company’s total investment

in each Qualifying Investment must be in eligible shares.

In addition, monies are not permitted to be used to

finance buy-outs or otherwise to acquire existing

businesses or shares.

Investment Limits

There is an annual limit for each investee company

which provides that they may not raise more than £5

million of state aided investment (including from VCTs)

in the 12 months ending on the date of each investment

(£10 million for Knowledge Intensive Companies).

There is also a lifetime limit that a business may not

raise more than £12 million of state aided investment

(including from VCTs); the limit for Knowledge

Intensive Companies is £20 million.

14

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Maximum Single Investment

Test

The value of any one investment must not, at any time

in the period, represent more than 15 per cent of the

Company’s total investment value. This is calculated

at the time of investment and updated should there

be further additions; as such, it cannot be breached

passively.

The Board can confirm that during the period, all of

the VCT legislative tests set out above have been

met, where required.

Further restrictions placed on VCTs are:

Dividends from Cancelled Share Premium

The Finance Act 2014 introduced a restriction with

respect to the use of monies in respect of VCTs. In

particular, no dividends can be paid out of cancelled

share premium arising from shares allotted on or after

6 April 2014 until at least three full financial years

have elapsed from the date of allotment.

In October 2022 the Company cancelled the balance of

its Share Premium, £63.6 million, of which £30.0

million is now distributable. The remaining £33.6 million

will become distributable over the period to 1 April

2026,

as set out on page 63.

Other

No more than seven years can have elapsed since

the first commercial sale achieved by the business

(ten years in the case of a Knowledge Intensive

Company), unless:

a. The business has previously received an

investment from a source that has received state

aid; or

b. The investment comprises more than 50 per cent

of the average of the previous five years’ turnover

and the funds are to be used in the business to

fund growth into new product markets and/or new

geographies.

Wherever possible, the Company self-assures that an

investment is a Qualifying Investment, subject to the

receipt of professional advice.

Key

Performance

Indicators

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

15

Portfolio

Structure

and Analysis

Value above cost

At cost

Ordinary shares

Less than 1 year

Between 1 and 3 years

2024 - 9%

2023 - 8%

L

Loan

P

Preference shares

18

58

20242023

Between 3 and 5 years

42

29

Greater than 5 years

35

Diversity

41

22

20242023

L

P

L

P

9192

7

4

20242023

Value below cost

8993

4

3

AGE OF

INVESTMENTS (%)

INVESTMENT

INSTRUMENT (%)

VALUE COMPARED

TO COST (%)

Portfolio Structure

The broad range of the portfolio is illustrated

below, with 35 per cent of the portfolio

valuation being held for more than five

years, while 93 per cent is valued at cost

or above. 9 per cent of the portfolio value

is held in loans and preference shares,

and loans account for only 3 per cent

of the value.

Strategic Report

16

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Portfolio Analysis

Also included below is a profile of the

portfolio by industry sector.

Tech-enabled Services

New Media

Cloud & DevOps

Retail & Brands

Business Services

Other

11

2024

10

2023

19

18

2422

INDUSTRY SECTOR (%)

4

4

1

8

1

Data

8

29

4

30

Application Software

7

Portfolio

Structure and

Analysis

(continued)

Investmen

t

Review

£126.6

million

Fair value of the

portfolio

(2023: £123.4 million)

25

Number of portfolio

companies with an

investment value of

more than £1.0

million

(2023: 27)

£1.1

million

Income from the

portfolio

(2023: £1.4 million)

£9.1 million

Level of investment

(2023: £28.4 million)

£10.6

million

Return from the

portfolio

(2023: £14.2 million)

The Portfolio

The portfolio showed robust performance in the period, adding £10.6 million of value on the opening fair value of

£123.4 million. The composition of investments continues to show its dynamism, with £9.1 million invested in the

period and cash proceeds of £16.5 million received.

The movements in the investment portfolio are set out in Table A

below: Table A: Investment Portfolio

Portfolio

£million

Listed

Investment

Funds

£million

Total

£million

Opening fair value at 1 April

2023

123.4

4.0

127.4

Additions

9.1

0.3

9.4

Disposal proceeds

(16.5)

(4.1)

(20.6)

Valuation

movement

10.6

(0.2)

10.4

Closing fair value at 31 March 2024

126.6

-

126.6

Accrued income

2.1

-

2.1

Financial assets - investments

128.7

-

128.7

At 31 March 2024 the portfolio was valued at £126.6 million, representing 57.6 per cent of net assets (78.6 per

cent at 31 March 2023). Cash and cash equivalents at 31 March 2024 of £89.8 million represented 40.9 per cent

of net assets (18.0 per cent at 31 March 2023).

Fair value changes

Table B: Gain from Investment Portfolio

£million%

Gain in fair value from the

portfolio

6.057

Gain on disposal over opening value from the

portfolio

4.643

Gain arising from the portfolio

10.6100

Loss on disposal of listed investment

funds

(0.2)

Valuation movement from the investment portfolio

10.4

Deferred consideration from prior year

realisation

0.1

Gain arising from the investment

portfolio

10.5

Of the £10.6 million gain from the portfolio in the year, £4.6 million arose from investments which were realised,

including Displayplan (£1.7 million), Macro Art (£0.9 million), the partial realisation of KeTech (£0.9 million), and

E2E (£0.8 million). Further details can be found in the Chair’s Statement and note 7 to the financial statements.

British Smaller Companies VCT plc Annual Report & Accounts

17

Strategic

Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

18

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

The ongoing portfolio delivered a net value gain of £6.0 million in the year, which arose across a range of

companies, including Unbiased, Matillion, SharpCloud, Traveltek and Vypr.

Some decreases in value have been seen, notably Outpost, Relative Insight and Wooshii; as with all portfolio

companies, the Manager continues to work closely with the companies’ management teams to aid their progress

and growth.

Other Significant Investment

Movements Investments

During the year ended 31 March 2024, the Company invested £9.1 million across 8

companies.

Two new companies were added to the portfolio, receiving aggregate investment of £4.9 million; while a further

£4.2 million was invested across six existing portfolio companies. The analysis of these investments is shown in

Table C.

Table C: Investments

Company

New

£million

Investments made

Follow-on

£million

Total

£million

Workbuzz

2.6

-

2.6

GEEIQ

2.3

-

2.3

Outpost

-

1.3

1.3

Relative Insight

-

1.2

1.2

Force24

-

0.7

0.7

Vuealta

-

0.5

0.5

Elucidat

-

0.3

0.3

SharpCloud

-

0.2

0.2

Portfolio

4.9

4.2

9.1

Listed investment

funds

0.3

Total additions in the year

9.4

Investment

Review

(continued

)

British Smaller Companies VCT plc Annual Report & Accounts

19

Strategic

Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Disposal of Investments

As set out in Table D below, during the year to 31 March 2024 the Company received proceeds from disposals of

£20.7 million, a net gain of £4.5 million over the opening carrying value at the beginning of the year, and an

overall net gain of £10.5 million over cost. This included the successful realisations of Displayplan, E2E, Macro

Art, Ncam and KeTech (partial). Further details are given in the Chair’s statement on page 5.

Table D: Disposal of

Investments

Net

proceeds

from sale of

investments

£million

Opening

value

31 March

2023

£million

Gain/(loss)

on opening

value

£million

Portfolio

16.5

11.9

4.6

Deferred consideration

0.1

-

0.1

Listed investment

funds*

4.1

4.3

(0.2)

Total investment disposals

20.7

16.2

4.5

* opening value includes additions of £0.3 million made during the

year.

Further analysis of all investments sold in the year

can be found in note 7 to the financial statements

on page 79.

Investment Portfolio Composition

As at 31 March 2024, the portfolio was valued at

£126.6 million, comprising wholly of unquoted

investments. An analysis of the movements in

the year is shown on page 76.

The portfolio has 25 investments valued above £1.0

million, with the single largest investment, Matillion,

representing 12.5 per cent of the NAV.

The charts on pages 15 and 16 show the diversity of

the portfolio, split by industry sector, investment

instrument, age of investment and the valuation

compared to cost.

Under VCT legislation, it is not possible to deposit

funds for longer than seven days, which means that

cash deposits must be available on very short notice.

The Company takes an active approach to cash

management, whilst pursuing its primary aim of capital

preservation. This is effected through the use of a

pool

of money market funds (which can be converted back to

cash with immediate notice) and cash deposits held

with tier one banking institutions. £2.8 million of income

was earned from money market funds and bank

deposits during the year. At 31 March 2024, the

Company was achieving a weighted average return on

liquid assets

of 4.8 per cent.

During the year, the Company realised its small

diversified quoted portfolio of listed investment funds,

managed by Brewin Dolphin, held as part of its

previous treasury operations. This sale generated

proceeds of £4.1 million.

Valuation Policy

Unquoted investments are valued in accordance

with both IFRS 13 ‘Fair Value Measurement’ and

International Private Equity and Venture Capital

Guidelines, December 2022 edition (IPEV

Guidelines).

Initially, at the first quarter-end following investment,

investments are valued at the price of the funding

round; following this, the valuation switches to a new

primary basis for all subsequent periods.

The valuation methodology applied depends upon the

facts and circumstances of each individual investment.

This may be with reference to revenue multiples,

earnings multiples, net assets, discounted cash flows

or calibrated from the price of the most recent

investment.

The full valuation policy is set out in note 1 on

pages 66 and 67.

Table E on page 20 shows the value of investments

within each valuation category as at 31 March 2024;

no investments are valued using discounted cash flow

methodologies.

With continued investment in earlier stage businesses

that are investing for growth, the majority of valuations

continue to be based on revenue multiples.

20

British Smaller Companies VCT plc Annual Report & Accounts

Investment

Review

(continued

)

STRATEGIC REPORT

Table E: Valuation

Policy

Valuation

£million

2024

% of

portfolio

by value

2023

% of

portfolio

by value

Revenue multiple

114.6

91

79

Earnings multiple

9.2

7

13

Net assets, reviewed for change in fair

value

2.5

2

2

Cost or price of recent investment, reviewed for change in fair

value

0.3

-

4

Sale proceeds

-

-

2

Total

126.6

100

100

Sustainable Investment and Environmental, Social

and Governance (“ESG”) Management

Whilst not Impact investors, the Company backs small

UK businesses to help them to grow and produce strong

financial returns for shareholders with the additional aim

of building better businesses that are ultimately more

sustainable.

In order to deliver more sustainable businesses,

and to meet its commitments under the United Nations’

Principles for Responsible Investment (PRI), the

Manager has continued to develop its processes

in this area.

The Manager’s approach is based on the belief that

good businesses:

Grow our economyImprove our society

Value their peopleProtect the environment

British Smaller Companies VCT plc Annual Report & Accounts

21

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

These aims are consistent with the Company’s financial

aims because businesses which improve in these areas

also strengthen their resilience and value creation

potential through their increased attractiveness to

customers, employees, suppliers and eventual future

owners and investors.

Sustainable Investment Principles

This set of principles guides the Manager’s investment

process:

>To seek to understand the ESG related impacts

and potential impacts of investments, aiming to

grow and enhance positive impacts and to avoid,

reduce or minimise any negative impacts over an

investment’s lifetime, leaving them overall better

businesses;

>To play a positive role in the investor, business

and wider communities by promoting good

practice in ESG management, and by being

transparent in the way that investments are made

and how the Manager behaves;

>To increase focus on the challenge of climate

change both as it may be affected by our

investments, and as it may impact on them

and their resilience to possible climate change

scenarios;

>To show leadership by managing the

Manager’s own business’ ESG impacts to the

best of their ability; and

>To be a proactive signatory to the PRI and to

integrate its principles into the Manager’s business

practices.

In line with the PRI the Manager has developed

processes to help the portfolio businesses to be better

in each of these spheres, by assessing them in terms

of creating positive impacts and outcomes and

preventing or minimising negative ones.

The Manager has developed and integrated the

following ESG management processes:

>Pre-investment Phase:

Structured processes at the pre-investment stage

to identify areas of potential ESG improvement and

risk as part of the due diligence and pre-investment

deliberations. Appropriate data is collected and

assessed on each business against ESG criteria

at the point of investment as a benchmark against

which to evaluate future progress.

>Portfolio Phase:

For those investments made since 2020, based on

the data collected at the point of investment at the

start of the portfolio phase, bespoke areas for

improvement are agreed with each management

team together with consequent objectives and

targets. A similar process has been applied to the

significant majority of investments made prior to

2020. Improvements are then measured and

recorded against a set of ESG criteria using the

Manager’s bespoke ESG framework, refreshing

targets annually and placing focus on any new

issues as they become more material in the

management of the company and in meeting

the expectations of its stakeholders.

>Reporting:

Annual reports will be produced, using the

Manager’s ESG framework for consistency,

recording the ESG KPI performance of each

company and providing an overview of progress

across the Manager’s portfolios.

Note that Investment Companies are not within

scope for reporting under the Task Force on

Climate-Related Financial Disclosures (TCFD); and

the Company does not use more than 40,000kWh

of energy and therefore is not required to report on

its energy usage within Streamlined Energy and

Carbon Reporting regulations.

ESG Performance Data and Reporting

ESG KPI data analysis

The Manager has developed its own ESG KPI data

collation process. It has established a data set reflecting

the above ESG themes and a means of collecting this to

make year on year comparisons for each company and

across the portfolio. Where possible baseline data has

been collected from the date of investment with a view

to showing where the Manager’s support has made a

difference during the hold period to the reporting date.

22

British Smaller Companies VCT plc Annual Report & Accounts

Investment

Review

(continued

)

STRATEGIC REPORT

Annual company specific ESG performance progress

report

The annual data collection allows a detailed report to

be prepared on each company’s progress across a

broad range of ESG KPI’s. As well as using this for

portfolio reporting to investors it will be used as an

engagement tool with the senior management teams of

each company, allowing the Manager to identify and

agree programmes of action with each business.

2023 ESG KPI Report for Investments held

in YFM’s VCT funds

>£74 million of R&D investment during

2023

>£115 million of export sales achieved in

2023

>750 new jobs were created from date of investment

to 2023 representing a 50 per cent increase

>95 per cent of companies were independently

chaired in 2023

>45 per cent of companies had female directors on

boards, with 15 per cent having a female CEO/MD

>65 per cent of businesses had a designated

board member with responsibility for improving

ESG issues

>35 per cent of the portfolio workforce was female

in 2023

>60 per cent had mental wellbeing programmes in

place and 80 per cent held regular employee

engagement surveys

>43,000 hours of non-statutory training was given

to employees

>20 per cent formally measure their carbon

footprint

>10 per cent offset all or a defined portion of their

carbon impact

>15 per cent formally set a target date and strategy

for achieving net zero carbon emissions

Summary and Outlook

The portfolio continues to deliver good underlying

revenue growth, while also demonstrating good levels

of capital efficiency over the past 12 months. Portfolio

companies continue to navigate difficult

macroeconomic conditions well, with the portfolio well

placed to benefit from a hoped for improvement in the

economic environment in 2024.

We continue to see a good pipeline of potential

investments in a range of growth companies, as well

as opportunities to further support the continued

growth of the current portfolio. We thank investors for

their continuing support in the Company’s 2023/24

fundraising, and are looking forward to putting

the funds raised to work.

14 June 2024

Growing

our economy

Improving

our society

Valuing our

people

Protecting

our environment

Eamon Nolan

YFM Private Equity

Limited

British Smaller Companies VCT plc Annual Report & Accounts

23

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Case

Studies

AMOUNT INVESTED

£5.6

million

THE BUSINESS AT INVESTMENT

A UK based lead generation platform connecting

financial advisors with customers seeking

investment, mortgage and life insurance advice.

THE INVESTMENT

Initial growth capital funding to enhance the

platform and broaden the service offering while at

the same time increasing consumer awareness of

the marketplace.

Second funding round in 2022 sought to capture

the success of the UK business and provide

investment to scale into the US.

RATIONALE FOR THE DEAL

A leader in its field, with the opportunity to build

additional services, moving into other market

sectors. Further investment provided capital to

expand into the US seeking to take share in a much

larger market where their product has genuine

USPs.

SINCE INVESTMENT

Unbiased has demonstrated the ability to grow its

offering into multiple service verticals, increasing

the value of its offering, expanding its reach to over

27,000 IFAs to help all access financial advice. It is

now seeing the early stages of success in the US,

with advisors paying to subscribe to the platform

and the company delivering converted leads.

AMOUNT INVESTED

£3.6

million

THE BUSINESS AT INVESTMENT

A visualisation tool to enable better

business collaboration.

THE INVESTMENT

Growth capital to enable further growth and

US expansion.

RATIONALE FOR THE DEAL

The investment backs the founders and

management team to capitalise on the opportunity

to expand within its already impressive current

customer base, to continue to add new customer

logos, and to take advantage of the US opportunity.

Their product addresses a known problem within a

large market.

SINCE INVESTMENT

The business has strengthened its product-

market fit and is gaining traction with its road-

mapping application within the High Value

Manufacturing sector. The business continues

to gain momentum

on expanding key accounts like Rolls-Royce,

Babcock and Volvo, and continues to add new

logos, like

Zeiss and ThermoFisher. The business has

strengthened its management team and

established a sales team in the US.

24

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

PageName of

Nocompany

Date of

initial

investmentLocation

Industry

Sector

Amount

invested

£000

Recognised

Valuation at income/ Realised &

31 March proceeds unrealised

2024 to date value to date*

£000£000£000

27Matillion LimitedNov-16ManchesterData2,66627,4157,07134,486

27Unbiased EC1 LimitedDec-19LondonTech-enabled Services 5,59612,829-12,829

28Outpost VFX Limited

Feb-21Bournemouth

New Media5,7509,518

539,571

28Elucidat Ltd

May-19Brighton

Application Software4,2605,933

3476,280

28Force24 Ltd

Nov-20Leeds

Application Software3,9005,835

415,876

29SharpCloud Software Limited

Oct-19London

Data3,5775,375

-5,375

29Vypr ValidationJan-21ManchesterTech-enabled Services 3,3005,317-5,317

Technologies Limited

29ACC Aviation Group

Limited

Nov-14Reigate

Business Services2,068

4,7255,28010,005

30Wooshii Limited

May-19London

New Media4,644

4,1516834,834

30Quality Clouds Limited

May-22London

Cloud & DevOps3,916

4,019-4,019

DrDoctor (via ICNH Ltd)

Feb-23London

Application Software3,565

3,565-3,565

Workbuzz Analytics LimitedJun-23NottinghamTech-enabled Services 2,5773,447-3,447

Traveltek Group Holdings Limited Oct-16

East Kilbride

Application Software1,7163,401

9754,376

AutomatePro LimitedDec-22

London

Cloud & DevOps2,2253,229

-3,229

Tonkotsu LimitedJun-19

London

Retail & Brands2,3883,090

-3,090

London

Data2,3582,827

-2,827

GEEIQSep-23

(via Checkpoint GG Limited)

Vuealta Holdings LimitedSep-21LondonTech-enabled Services 3,5802,4594,6197,078

Summize Limited

Oct-22Manchester

Application Software1,8002,421-2,421

Frescobol Carioca Ltd

Mar-19London

Retail & Brands1,8002,072-2,072

Plandek Limited

Oct-22London

Cloud & DevOps2,0702,070-2,070

Mar-23London

Application Software1,7402,014-2,014

Xapien (via Digital Insight

Technologies Ltd)

Biorelate Limited

Nov-22Manchester

Application Software1,5601,691-1,691

Nov-19Leeds

Data1,5001,606-1,606

Panintelligence

(via Paninsight Limited)

Relative Insight Limited

Mar-22Lancaster

Tech-enabled Services 4,200

1,598-1,598

Nov-15Nottingham

Tech-enabled Services 2,000

1,1764,0595,235

KeTech Technology

Holdings

Limited

Arcus Global LimitedMay-18

Cambridge

Application Software3,075

9523321,284

Hampshire

Cloud & DevOps2,654

8481849

Sipsynergy (via Hosted NetworkJun-16

Services Limited)

Other investments £0.75 million and

below

8,077

3,009

6,807

9,816

Total unquoted

investments

88,562

126,592

30,268

156,860

Full disposals to date

80,135

-

167,596

167,596

Total

portfolio

168,697

126,592

197,864

324,456

* represents recognised income and proceeds received to date plus the unrealised valuation at 31 March

2024.

Portfolio

Summary

at 31 March

2024

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Name of Company

Investment

valuation at

31 March

2023

£000

Disposal

proceeds

£000

Additions

including

capitalised

income

£000

Valuation

gains

including

profits (losses)

on disposal

£000

Investment

valuation

at 31 March

2024

£000

Unbiased EC1 Limited

9,976

-

-

2,853

12,829

Matillion Limited

25,193

-

-

2,222

27,415

SharpCloud Software Limited

3,404

-

170

1,801

5,375

Displayplan Holdings

Limited

7,901

(9,636)

-

1,735

-

Traveltek Group Holdings

Limited

2,049

-

-

1,352

3,401

Vypr Validation Technologies

Limited

4,051

-

-

1,266

5,317

Arcus Global Limited

239

(300)

-

1,013

952

Macro Art Holdings

Limited

558

(1,484)

-

926

-

Workbuzz Analytics

Limited

-

-

2,577

870

3,447

KeTech Holdings Limited/KeTech Technology Holdings

Limited

1,786

(1,461)

-

851

1,176

E2E Engineering Limited

1,200

(1,960)

-

760

-

AutomatePro Limited

2,557

-

-

672

3,229

Other investments £0.75 million and

below

2,346

-

-

663

3,009

Summize Limited

1,885

-

-

536

2,421

GEEIQ (via Checkpoint GG

Limited)

-

-

2,358

469

2,827

Tonkotsu

Limited

2,666

-

-

424

3,090

Force24 Ltd

4,757

-

750

328

5,835

Xapien (via Digital Insight Technologies

Ltd)

1,740

-

-

274

2,014

Biorelate Limited

1,570

-

-

121

1,691

Panintelligence (via Paninsight

Limited)

1,500

-

-

106

1,606

Frescobol Carioca Ltd

1,995

-

-

77

2,072

Ncam Technologies

Limited

1,659

(1,682)

-

23

-

DrDoctor (via ICNH Ltd)

3,565

-

-

-

3,565

Plandek Limited

2,070

-

-

-

2,070

Quality Clouds Limited

4,074

-

-

(55)

4,019

Vuealta Holdings Limited/Vuealta Group

Limited

2,126

-

535

(202)

2,459

Sipsynergy (via Hosted Network Services

Limited)

1,464

-

-

(616)

848

Elucidat Ltd

6,277

-

300

(644)

5,933

ACC Aviation Group

Limited

5,398

-

-

(673)

4,725

Outpost VFX Limited

9,420

-

1,250

(1,152)

9,518

Relative Insight Limited

2,794

-

1,200

(2,396)

1,598

Wooshii Limited

7,141

-

-

(2,990)

4,151

Total portfolio

123,361

(16,523)

9,140

10,614

126,592

Deferred consideration*

-

(96)

-

96

-

Total

123,361

(16,619)

9,140

10,710

126,592

Accrued income

2,070

Financial assets - investments

128,662

* Wakefield Acoustics (trading as Malvar Engineering Limited), see note 7.

British Smaller Companies VCT plc Annual Report & Accounts

25

since 31 March

2023

Summary of

Portfolio

Movement

26

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Investee

Company

Information

Data

Fair Value

£37.2m

Number of

companies

4

Tech-enabled

Services

Fair Value

£23.4m

Number of

companies

5

Application Softwar

e

Fair Value

£30.0m

Number of

companies

10

New Media

Fair Value

£14.3m

Number of

companies

3

Business

Services

Fair Value

£4.7m

Number of

companies

2

Cloud

& DevOps

Fair Value

£10.4m

Number of

companies

4

Retail &

Brands

Fair Value

£5.4m

Number of

companies

2

Advanced

Manufacturing

Fair Value

£0.3m

Number of

companies

1

Other

Fair Value

£0.9m

Number of

companies

5

British Smaller Companies VCT plc Annual Report & Accounts

27

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Portfoli

o

The top 10 investments

had a combined value of

£85.1 million, 67.2 per

cent of the total portfolio.

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

November 2016

£2,666,000

£27,415,000

£7,071,000

£34,486,000

3.5%

Revenue multiple

Year ended 31 January

2023

$million

2022

1

$million

Revenue

LBITA

Loss before tax

Retained losses

Net assets

84.04

(66.08)

(64.44)

(133.69)

171.93

57.26

(32.33)

(32.58)

(69.28)

226.96

1. 13 months to 31 January 2022

Matillion Limited

Manchester

Matillion is a leading provider of cloud-based data

extraction and transformation tools. The company

helps businesses utilise their data in the cloud for

insight and decision making and is headquartered in

Manchester with offices in Denver and Seattle.

www.matillion.com

Sector:

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

December 2019

£5,596,000

£12,829,000 £nil

£12,829,000

18.5%

Revenue multiple

Year ended 30 September

2023

£million

2022

£million

Revenue

LBITA

Loss before tax

Retained losses

Net assets

10.25

(2.81)

(2.74)

(4.75)

4.20

8.00

(0.43)

(0.42)

(2.07)

2.52

Unbiased EC1 Limited

London

Unbiased is a technology-enabled marketplace that

connects consumers to Independent Financial

Advisers, Mortgage Brokers and Accountants. The

company has a strong, well-established position and

brand awareness in the IFA market with a high level of

recurring subscription income from the thousands of

professionals in their network. The proven UK model is

now being launched into the much larger US financial

advisor market.

www.unbiased.co.uk

Sector:

* Represents recognised income and proceeds received to date, plus the unrealised valuation at 31 March 2024.

28

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

Interest:

Dividends:

May 2019

£4,260,000

£5,933,000

£347,000

£6,280,000

15.1%

Revenue multiple

£nil (2023 £21,699)

£281,589 (2023 £65,753)

Year ended 31 December

2022

£million

2021

£million

Revenue

LBITA

Loss before tax

Retained losses

Net assets

5.63

(0.84)

(1.27)

(2.79)

3.83

5.11

(0.06)

(0.77)

(1.72)

1.80

Elucidat Ltd

Brighton

Elucidat provides a cloud based e-learning authoring

platform which allows its customers to drive down the

cost of producing business-critical training. The

company has impressive customer retention and a

client list including Tesco, Target and Walmart.

www.elucidat.com

Sector:

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

Interest:

February 2021

£5,750,000

£9,518,000

£53,000

£9,571,000

17.3%

Revenue multiple

£30,082 (2023 £22,603)

Year ended 31 March

2023 2022

£million £million

Revenue40.2519.08

LBITA (4.04) (0.02)

Loss before tax (4.46) (0.41)

Retained losses (8.96) (4.03)

Net (liabilities) assets(0.69)0.89

Outpost VFX Limited

Bournemouth

Outpost is a visual effects firm best known for their

striking environments, seamless digital makeup and

photoreal creatures. The company is headquartered in

Bournemouth, with studios in London, Los Angeles,

Montreal and Mumbai. An impressive client list

includes global streaming platforms such as Netflix,

Amazon and Apple, and major Hollywood studios.

www.outpost-vfx.com

Sector:

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

Dividends:

November 2020

£3,900,000

£5,835,000

£41,000

£5,876,000

19.7%

Revenue multiple

£41,000 (2023 £nil)

Year ended 31 December

2022

£million

2021

£million

Revenue

LBITA

Loss before tax

Retained losses

Net assets

4.80

(1.28)

(1.68)

(3.02)

2.25

4.55

(1.96)

(2.26)

(1.83)

1.97

Force24 Ltd

Leeds

Force24 provides cloud-based personalised

marketing automation technology trusted by over 350

businesses including household brands such as

Michelin, Tarmac and Children In Need.

www.force24.co.uk

Sector:

* Represents recognised income and proceeds received to date, plus the unrealised valuation at 31 March 2024.

British Smaller Companies VCT plc Annual Report & Accounts

29

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

January 2021

£3,300,000

£5,317,000

£nil

£5,317,000

19.3%

Revenue multiple

Year ended 31 March

2023

£million

2022

£million

Revenue

LBITA

Loss before tax

Retained losses

Net assets

2.77

(1.68)

(1.97)

(3.42)

2.49

2.07

(1.20)

(1.49)

(1.48)

1.05

Vypr Validation Technologies

Limited Manchester

Vypr is a cloud-based data validation platform

providing industry-leading consumer intelligence for

use in all aspects of product development including

packaging, pricing and naming.

www.vyprclients.com

Sector:

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

October 2019

£3,577,000

£5,375,000

£nil

£5,375,000

19.5%

Revenue multiple

Year ended 31 December

2022

£million

2021

£million

Revenue

LBITA

Loss before tax

Retained losses

Net assets

1.80

(0.76)

(1.05)

(3.38)

3.11

1.42

(1.64)

(1.83)

(2.45)

1.54

SharpCloud Software Limited

London

SharpCloud provides a leading decision making

platform for managers. It provides the ability to

aggregate fragmented data into easily interpretable

top-down output that shortens decision making cycles

and eliminates decision waste.

www.sharpcloud.com

Sector:

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

November 2014

£2,068,000

£4,725,000

£5,280,000

£10,005,000

27.6%

Earnings multiple

Year ended 31 December*

2022

£million

2021

£million

Revenue

EBITA

Loss before tax

Retained profits

Net assets

72.76

2.70

(0.72)

8.08

8.10

41.84

0.84

(2.23)

9.71

9.73

* information for NEWACC (2018) Limited shown

ACC Aviation Group

Limited Reigate

ACC Aviation is the market leader in airline-to-airline

“wet lease” brokerage and associated services. The

company also provides a range of consultancy and

specialist charter services to clients via its global office

network.

www.accaviation.com

Sector:

* Represents recognised income and proceeds received to date, plus the unrealised valuation at 31 March 2024.

30

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

Dividends:

May 2019

£4,644,000

£4,151,000

£683,000

£4,834,000

19.9%

Revenue multiple £184,019

(2023 £164,700)

Year ended 31 March

2023 2022

£million £million

Revenue

6.254.30

LBITA

Loss before tax

Retained losses

Net liabilities

(1.53)

(1.83)

(7.30)

(5.40)

(1.18)

(1.45)

(5.74)

(3.84)

Wooshii Limited

London

Wooshii is a global video production agency using

technology to manage a geographically distributed

network of creative professionals. The company offers

clients the convenience and quality of a traditional

video marketing agency combined with cutting edge

video management tools. It has a blue-chip client list

including Coca Cola, Google, Microsoft and Amazon.

Wooshii has also developed software tools to enable

its customers to extract greater value from their historic

libraries.

www.wooshiivideoagency.com

Sector:

Date of initial investment:

Amount invested:

Valuation at 31 March 2024:

Recognised income/proceeds to date:

Return to date*:

Equity held:

Valuation basis:

May 2022

£3,916,000

£4,019,000

£nil

£4,019,000

13.2%

Revenue multiple

Year ended 31 December

2022

£million

2021

£million

Revenue

LBITA

Loss before tax

Retained losses

Net liabilities

1.59

(2.25)

(2.31)

(6.21)

(0.05)

1.04

(1.50)

(1.61)

(4.14)

(2.44)

Quality Clouds Limited

London

Quality Clouds provides a leading SaaS tool for the

control and governance of critical SaaS platforms, with

a focus on ServiceNow and Salesforce. The company

operates from London, Barcelona and the US, with a

client list that includes BP, Linde and JP Morgan

Chase.

www.qualityclouds.com

Sector:

* Represents recognised income and proceeds received to date, plus the unrealised valuation at 31 March 2024.

British Smaller Companies VCT plc Annual Report & Accounts

31

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The Board carries out a regular

review of the risk environment in

which the Company operates. The

emerging and principal risks and

uncertainties identified by the

Board and techniques used to

mitigate these risks are set out in

this section.

The Board seeks to mitigate its emerging and principal

risks by setting policy, regularly reviewing performance

and monitoring progress and compliance. In the

mitigation and management of these risks, the Board

rigorously applies the principles detailed in section 8:

“Audit, Risk and Internal Control” of the AIC Code.

Details of the Company’s internal controls are

contained in the Corporate Governance Internal Control

section

on pages 47 and 48 and further information on exposure

to risks, including those associated with financial

instruments, can be found in note 16 of the

financial statements.

The Board carries out a regular review of the risk

environment in which the Company operates, together

with changes to the operational environment. The

Board also seeks to identify emerging risks which might

impact on the Company. In the period the most notable

risks emerging have been:

>Geopolitical instability: geopolitical tensions, such

as the conflicts in the Middle East and Ukraine

can create uncertainty, disrupt global markets

and create market volatility.

>Global trade: ongoing global trade tensions

between major economies have the potential to

disrupt global supply chains which could cause

a slowdown in economic activity.

>Rising interest rates: whilst interest rates appear

to be stabilising, higher interest rates can increase

borrowing costs for businesses and consumers,

potentially leading to reduced spending and

investment, and ultimately economic growth.

The principal risks the Company faces are considered

in more detail below.

Risk

Factor

s

Risk

Mitigation

Change

VCT Qualifying Status:

A failure to meet the VCT qualifying

criteria could result in the loss of

approved VCT status. The loss of

such approval could lead to

investors losing the various tax

benefits associated with VCT

investments.

The Manager tracks the Company’s VCT

qualifying status on an ongoing and continual

basis. Furthermore, external independent experts

have been retained and report on the VCT

qualifying status regularly throughout the year.

The Manager reports to the Board on a

quarterly basis.

Further information on these requirements can be

found under the heading “Compliance with VCT

Legislative Tests” on pages 14 and 15.

No overall change in

risk exposure.

Economic:

Macroeconomic events such as

geopolitical developments, external

shocks and economic recession

could adversely affect smaller

companies’ valuations, as they

may be more vulnerable to

changes in trading conditions or

the sectors in which they operate.

This could lead to a reduction in

the Company’s share price,

resulting in capital losses for

Shareholders.

The Board, in conjunction with the Manager,

regularly assesses the resilience of the portfolio.

The Company has a clear Investment Policy

(summarised on page 9) and invests in a diverse

portfolio of companies across a range of sectors,

which helps to mitigate against the impact on any

one sector. The Manager also seeks to maintain

adequate liquidity to ensure it can provide follow-

on investment to those portfolio companies which

require funding, when supported by the individual

investment case.

Increased.

Growing international

tensions with the

potential to deter

investment, disrupt

markets and re-awaken

inflationary pressures.

32

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Risk

Mitigation

Change

Investment Performance:

The Company invests in small and

medium-sized VCT qualifying

companies, which, by their nature,

entail a higher level of risk and

shorter cash runway than

investments in larger quoted

companies. Poor performance

could reduce returns for

shareholders through downward

valuations.

The Board comprises individuals experienced in

assessing suitable investment opportunities. The

Manager has significant experience, expertise and

a strong track record of investing in early-stage

unquoted companies. The Manager has a

rigorous and robust formal process in selecting

new companies which includes appropriate

due diligence and approval by an Investment

Committee made up of the senior members

of the Manager’s investment team.

No overall change in

risk exposure.

Strategy:

The Board fails to set appropriate

strategic objectives and fails to

monitor the Company’s

implementation of the strategy,

which leads to poor performance.

The Board reviews strategy annually. At each

of the Board meetings, the directors review the

appropriateness of the Company’s objectives

and stated strategy in response to changes in the

operating environment and peer group activity.

It also reviews compliance of the Manager

with the stated investment strategy.

No overall change in

risk exposure.

Legislative & Regulatory:

The Company fails to comply with

applicable laws and regulations

including VCT Rules, UK Listing

Authority Rules, AIC Code on

Corporate Governance,

Stewardship Code, Companies

Act, Bribery Act, Market Abuse

Regulations, data protection rules,

Criminal Finances Act and relevant

Taxes Acts and as a result loses

its approval as a VCT.

Changes to the UK legislation, in

particular relating to the VCT

Rules, could have an adverse

effect on the Company’s ability to

achieve satisfactory investment

returns.

The Manager ensures that it has suitably qualified

members of staff who are experienced with

regulatory requirements and relevant accounting

standards. The Manager and the Company

Secretary have procedures in place to ensure

recurring Listing Rules requirements are met.

The Board and Manager review corporate

governance, regulatory legislative change and

political developments on a continual basis and

seek additional advice as and when required.

The Manager is a member of the Venture

Capital Trust Association which engages with

the Government to help shape future legislation.

No overall change in

risk exposure.

Albeit a slight

reduction in this risk,

as a result of the ten

year extension of the

VCT legislation

sunset clause to 6

April 2035,

continuing

shareholders’ rights

to Income Tax relief

on newly issued

shares. The

extension has been

agreed by HMRC,

however this needs

to be ratified by

the EU.

Risk

Factors

(continued

)

British Smaller Companies VCT plc Annual Report & Accounts

33

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Risk

Mitigation

Change

Operational:

Key service providers, such as

the Manager, have inadequate

procedures for the identification,

evaluation and management of

risks putting the Company’s assets

and data at risk.

The Board regularly reviews the system of internal

controls, both financial and non-financial operated

by the Company and the Manager. These include

controls designed to ensure that the Company’s

assets are safeguarded and proper accounting

records are maintained.

No overall change in

risk exposure.

Cyber Security and Information

Technology:

A failure in IT systems and controls

might lead to business interruption,

loss of data, the inability of the

Manager to provide accurate

reporting and monitoring or the

loss of Company records.

The Manager has in place significant cybersecurity

controls, including multifactor authentication, email

protection software, monitored firewalls and

regularly updated electronic devices. Staff at the

Manager regularly receive training in relation to

their cybersecurity obligations. The Manager is

Cyber Essentials Plus certified.

Due diligence is conducted on other service

providers, including a review on their controls

for information security.

No overall change on

balance, although cyber

threat remains a

significant risk area

faced by all service

providers, with ever

increasing

sophistication of

attacks.

Liquidity:

a. The Company may not have

sufficient liquidity available to

meet its financial obligations.

b. The VCT invests in smaller

unquoted companies, which

by their nature are illiquid,

therefore they may be difficult

to realise, at fair market value,

at short notice.

The Company’s overall liquidity risks and cashflow

forecasts are monitored on an ongoing basis by the

Manager and on a quarterly basis by the Board.

The Company’s valuation methodology takes

account of potential liquidity restrictions in the

markets in which it invests.

For any publicly listed investments, accounting

standards require an ongoing assessment of the

liquidity of the stock.

The Manager regularly reviews its exit plans for

investee companies to allow it to identify the

optimal point at which to seek a sale. As part of a

planned exit, the assistance of a third party

adviser will normally be sought, with a view to

identifying the largest number of possible

purchasers.

Increased.

A small increase to

reflect the potential

impacts of economic

uncertainty, including

the impacts on

fundraising and ability

to exit investments.

34

British Smaller Companies VCT plc Annual Report & Accounts

STRATEGIC REPORT

Section 172 Statement

This Section 172 Statement should

be read in conjunction with the

other contents of the Strategic

Report, on pages 5 to 35.

Section 172 of the Companies Act 2006 requires that a

director must act in a way that they consider, in good

faith, would be most likely to promote the success of

the company for the benefit of its members as a whole,

and in doing so have regard (amongst other matters) to:

>The likely consequences of any decision in the

long term;

>The interests of the company’s

employees;

>The need to foster the company’s business

relationships with suppliers, customers and others;

>The impact of the company’s operations on the

community and the environment;

>The desirability of the company maintaining

a reputation for high standards of business

conduct; and

>The need to act fairly as between members of

the company.

The Company takes a number of steps to understand

the views of investors and other key stakeholders and

considers these, along with the matters set out above,

in Board discussions and decision making.

Key Stakeholders

As an investment company with no employees, the

Company’s key stakeholders are its investors, its

service providers and its portfolio companies.

Investors

The Board engages and communicates with

shareholders in a variety of ways.

The Company encourages shareholders to attend its

Annual General Meeting.

Along with British Smaller Companies VCT2 plc, the

Company held two Investor Workshops during the

year. An in-person workshop was held on 20 June

2023 and an online webinar was hosted on 27

November 2023. Both were well attended.

Maintaining the Company’s status as a VCT is critical to

meeting the Company’s objective to maximise Total

Return and provide investors with an attractive long-term

tax-free dividend yield. The Company receives regular

reports on this issue from the Manager and has taken

various steps in the year to ensure that the relevant

tests are met.

The Board also aims for investors to continue to have

tax efficient opportunities to invest in the Company,

and to generate tax-free returns from both capital

appreciation and ongoing dividends.

After carefully considering its funding needs, on 20

September 2023 the Company issued a prospectus,

alongside British Smaller Companies VCT2 plc, to raise

up to £90 million in aggregate for the 2023/24 tax year.

During the year the Board kept its arrangements for

dividends, share buy-backs and the dividend re-

investment scheme under constant review. Normal

dividends totalling 4.0 pence per ordinary share

were paid in the year ended 31 March 2024.

Manager

The Company’s most important service provider is its

Manager. There is regular contact with the Manager,

and members of the Manager’s board attend all of the

Company’s Board meetings. There is also an annual

strategy meeting with the Manager, alongside the

board of British Smaller Companies VCT2 plc.

The Manager maintains strong relationships with

relevant media publications and a wide range of

distributors for the Company’s shares, including

wealth managers, independent financial advisers

and execution-only brokers. RAM Capital acts as

a promoter of the Company’s shares to smaller

distributors.

Other

Matters

British Smaller Companies VCT plc Annual Report & Accounts

35

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The Company is a member of the Association of

Investment Companies which promotes the interests

of investment companies, including VCTs. The

Manager is a founder member of the Venture Capital

Trust Association, which promotes the interests of

VCTs

in a variety of ways.

Portfolio Companies

The Company holds minority investments in its

portfolio companies and has delegated the

management of the portfolio to the Manager. The

Manager provides the Board with regular updates on

the performance of each portfolio company at least

quarterly and the Board is made aware of all major

issues.

The Manager has a dedicated Portfolio team to assist

the portfolio companies with the challenges that they

face as fast-growing companies. The Manager promotes

ongoing sustainable growth within the businesses;

this often involves improving systems and processes,

as well as significant job creation.

Employees

The Company has no employees. The Board is

composed of four non-executive directors. For a review

of the policies used when appointing directors to the

Board of the Company, please refer to the Directors’

Remuneration Report.

Environment and Community

The Company seeks to ensure that its business is

conducted in a manner that is responsible to the

environment. The management and administration of the

Company is undertaken by the Manager, YFM Private

Equity Limited, which recognises the importance of its

environmental responsibilities and is a signatory of the

United Nations’ Principles for Responsible Investment.

More details of the work that the Manager has achieved

in this area are set out on pages 20 to 22. Its

Sustainable Investment Policy can be found at

www.yfmep.com/who-we-are/our_impact/.

Business Conduct

The Company has a zero tolerance approach to bribery

and corruption. The following is a summary of the

controls in place:

>The Company conducts all its business in an

honest and ethical manner. The Company is

committed to acting professionally, fairly and

with integrity in all its business dealings and

relationships;

>The Company prohibits the offering, the giving,

the solicitation or the acceptance of any bribe;

>The Company has communicated its Anti-Bribery

& Corruption Policy to the Manager and its other

service providers; and

>The Manager has its own Anti-Bribery & Corruption

and Anti-Slavery Policies and monitors portfolio

companies’ compliance with their legal obligations.

The Strategic Report on pages 5 to 35 is approved by

order of the Board.

Rupert Cook

Chair

14 June 2024

Rupert

Cook

Rupert Cook (Jun 14, 2024 08:57 GMT+1)

36

British Smaller Companies VCT plc Annual Report & Accounts

Rupert CookAdam BastinJonathan CartwrightPurvi Sapre

Rupert Cook

Chair – independent Non-Executive Director

(appointed to the Board 1 August 2017, appointed

Chair on 16 September 2022) specialises in strategy

and corporate development, with 30 years’

experience of technology companies, including 20

years in corporate finance and investment. He has led

multiple fundraisings, acquisitions and sales of

technology businesses as well as having co-founded

and built up his own consultancy and training

business through to sale to a UK plc. Earlier in his

career, he was a senior manager at Cap Gemini plc,

Director of Advisory Services at Interregnum plc and

Head of Technology M&A at goetzpartners corporate

finance. As well as being an active angel investor,

both in the UK and

the US, Rupert is currently Chair of Overe Ltd and

a non-executive director of Immersive Labs Ltd

and Censornet Ltd.

Adam Bastin

Chair of the Investment Committee – independent

Non-Executive Director

(appointed 11 September 2019) is currently EVP,

Strategy & Corporate Development of Francisco

Partners backed Keyloop, an automotive technology

company, where he is responsible for strategic

direction as well as the acquisition and integration of

complementary businesses. Prior to that, Adam held

the equivalent role at TAAssociates-backed Unit4, an

ERP software vendor and before that spent eight years

leading acquisition and investments at Arm Limited, the

world’s largest semiconductor IP company. Previously

Adam worked at BT Group and spent ten years in

investment banking.

Adam therefore brings a well-developed network in the

technology sector in the UK and internationally, and

brings a wealth of experience of investing in, acquiring

and selling smaller companies. Adam is an

experienced M&A, corporate finance and investment

professional,

a qualified management accountant (CIMA), and has

served on the boards of various early-stage technology

companies.

Jonathan Cartwright

Chair of the Audit & Risk Committee and the

Nominations and Remuneration Committee –

independent Non-Executive Director

(appointed 1 October 2019) is a chartered accountant

and has significant experience of the investment trust

and VCT sectors and of serving on the boards of both

public and private companies in executive and non-

executive roles. He is a former Chair of Mobeus Income

& Growth 4 VCT plc and of Columbia Threadneedle

Income and Growth Investment Trust plc.

Purvi Sapre

Independent Non-Executive

Director

(appointed 6 June 2022) is currently Chief Investment

Officer of Sustainable Development Capital LLP, the

Investment Manager of SDCL Energy Efficiency

Income Trust plc “SEEIT”. She is also the fund

manager for SEEIT and is a member the Investment

Committees across SDCL’s funds. Purvi has over 20

years’ investment experience in the UK and

international capital markets, investing on behalf of

debt, equity and impact investment funds, including in

energy efficiency and renewable energy projects,

across a range of financing structures.

Director

s

CORPORATE GOVERNANCE

Secretary

The City Partnership (UK) Limited

The Mending Rooms

Park Valley Mills

Meltham Road

Huddersfield

HD4 7BH

Registered No: SC269164

Registered Office of the Company

5th Floor

Valiant Building

14 South Parade

Leeds

LS1 5QS

Registered No:

03134749

British Smaller Companies VCT plc Annual Report & Accounts

37

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The directors present their report

and audited financial statements

of British Smaller Companies

VCT plc ("the Company") for the

year ended 31 March 2024.

Principal Activity

The Company is a public limited company incorporated

and domiciled in the United Kingdom. The address of

the registered office and principal place of business is

5th Floor, Valiant Building, 14 South Parade, Leeds,

LS1 5QS.

The Company has its primary, and sole, listing on

the London Stock Exchange.

The principal activity of the Company is the making

of long-term equity and loan investments, mainly

in unquoted businesses.

The Company operates as a venture capital trust

(“VCT”) and has been approved by HM Revenue &

Customs as an authorised venture capital trust under

Chapter 3 Part 6 of the Income Tax Act 2007. It is

the directors’ intention to continue to manage the

Company’s affairs in such a manner as to comply

with Chapter 3 Part 6 of the Income Tax Act

2007.

Business Performance and Future Prospects

A detailed and fair review of the Company’s business,

its development, its financial performance during and

at the end of the financial year, and its future

prospects is set out in the Strategic Report on pages 5

to 35. The principal risks and uncertainties the

Company faces are detailed on pages 31 to 33.

The Board believes that the Annual Report and

Financial Statements taken as a whole is fair, balanced

and understandable and provides the information

necessary for shareholders to assess the Company’s

performance, business model and strategy.

Results and Dividends

The Statement of Comprehensive Income is set out on

page 60. The profit before and after taxation for the

year amounted to £10,618,000 (2023: £12,237,000).

During the year the Company paid a total of £9,635,000

(2023: £15,844,000) in dividends totalling 4.0 pence

per ordinary share (2023: 8.5 pence). A detailed review

can be found in note 5 on page 74.

The directors have announced an interim dividend of

2.0 pence per ordinary share for the year ending 31

March 2025. The dividend will be paid on 26 July

2024 to shareholders on the register on 28 June 2024.

The net asset value per ordinary share at 31 March

2024 was 83.6 pence (2023: 83.7 pence). The transfer

to and from reserves is given in the Statement of

Changes in Equity on page 62.

Going Concern

The directors have carefully considered the issue of

going concern in view of the Company’s activities and

associated risks. The Company has a well-diversified

portfolio with businesses in a variety of sectors, many

of which are well funded. Some portfolio companies

may require additional funding in the near- to medium-

term; the Company is well placed to provide this, where

appropriate.

The Company has a significant level of liquidity,

which was enhanced by the final allotment of the

2023/24 fundraising post-year-end, in April 2024. In

addition,

the Board has control over, and can flex as

appropriate, the Company’s major outgoings, which

predominantly comprise investments, dividends and

share buy-backs.

The directors have also assessed whether material

uncertainties exist and their potential impact on the

Company’s ability to continue as a going concern; they

have concluded that no such material uncertainties

exist.

The directors have carefully considered the issue of

going concern and are satisfied that the Company has

sufficient resources to meet its obligations as they fall

due for a period of at least 12 months from the date of

this report. As at 31 March 2024, the Company held

cash balances and money market funds with a

combined value of £89.8 million; this excludes £35.7

million received from the final allotment of the 2023/24

fundraising on 3 April 2024. Cash flow projections

show the Company has sufficient funds to meet both

its contracted expenditure and its discretionary cash

Directors

’

Report

For the year ended 31 March

2024

38

British Smaller Companies VCT plc Annual Report & Accounts

CORPORATE GOVERNANCE

outflows in the form of share buy-backs and dividends.

In the year ended 31 March 2024, the Company’s costs

and discretionary expenditures were:

£000

Administrative expenses3,947

Share buy-backs2,869

Dividends (before DRIS)9,635

Total16,451

Taking all of the above into consideration, the directors

are satisfied that the Company has sufficient resources

to meet its obligations for at least 12 months from the

date of this report and therefore believe that it is

appropriate to continue to apply the going concern

basis of accounting in preparing the financial

statements.

Statement on Long-term Viability

The AIC Code requires the Board to assess the

Company’s viability over an appropriate period.

The directors believe that a period of three years is

appropriate to assess the Company’s viability

because the Company is required to invest funds

raised within this timeframe in order to retain its status

as a VCT.

In making their assessment, the directors have reviewed

the types of investment that the Company will be able to

make under current VCT legislation and they believe

that the existing portfolio and future investments will be

able to deliver the Company’s objective “to maximise

total return and provide investors with a long-term tax-

free dividend yield whilst maintaining the Company’s

status as a venture capital trust”.

The directors have also taken into account the

emerging and principal risks and their mitigation

identified in the Strategic Report on pages 31 to 33, the

nature of the Company’s business, including its

reserves of cash (including proceeds of £35.7 million

following the final allotment of the 2023/24 fundraising

on 3 April 2024), the potential of its venture capital

portfolio to generate returns in the future and, as noted

above, the ability

of the directors to minimise the level of cash

outflows, should this be necessary.

Taking into account the Company’s current position and

principal risks, the directors have concluded that there

is a reasonable expectation that the Company will be

able to continue in operation and meet its liabilities as

they fall due over that period.

Corporate Governance

The statement on corporate governance set out on

pages 41 to 48 is included in the Directors’ Report

by reference.

Directors’ and Officers’ Liability Insurance

The Company has, as permitted by the Companies

Act 2006, maintained insurance cover on behalf of the

directors, indemnifying them against certain liabilities

which may be incurred by any of them in relation to

the Company.

Provision of Information to the External Auditor

The directors confirm that so far as each director is

aware, there is no relevant audit information of which

the Company’s auditor is unaware; and that each of

the directors has taken all the steps that they ought to

have taken as a director in order to make themselves

aware

of any relevant audit information and to establish that

the Company’s auditor is aware of that information.

Share Capital

As shown in note 11 of the financial statements, the

Company has only one class of share, being ordinary

shares of 10 pence each.

Buy-back and Issue of Ordinary Shares

Under the existing authority, which expires on the

conclusion of the Company’s Annual General Meeting

in 2026 or on 14 September 2026, whichever is the

later, the Company has the power to purchase shares

up to 14.99 per cent of the Company’s ordinary share

capital as at 16 June 2023, being 36,161,754 ordinary

shares.

During the year, the Company purchased 3,630,656

ordinary shares of 10 pence each in the market (as

disclosed in the table on page 39), for aggregate

consideration, including costs, of £2,869,000. These

shares are held in treasury. The buy-back was in

accordance with the Company’s buy-back policy, and

under the authorities granted by the shareholders at

the general meetings held on 10 September 2020 and

14 September 2023. At 31 March 2024 25,638,421

shares were held in treasury, representing 8.9 per cent

of the total issued share capital (including treasury

shares) at that date.

The directors have unconditional authority to allot

shares in the Company or to grant rights to subscribe for

or to convert any security into ordinary shares in the

Directors’

Report

(continued

)

British Smaller Companies VCT plc Annual Report & Accounts

39

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Company up to an aggregate nominal amount of

£8,000,000 (equivalent to 80,000,000 shares),

expiring on the conclusion of the Company’s Annual

General Meeting in 2024 or 14 September 2024,

whichever

is the later.

This authority will be replaced by a new authority

to issue shares up to an aggregate nominal amount of

£9,000,000 (equivalent to 90,000,000 shares) at this

year’sAnnual General Meeting.

In addition, the directors have unconditional authority

to allot shares and waive pre-emption rights in the

Company in connection with the Company’s Dividend

Re-investment Scheme (DRIS), expiring on the

conclusion of the Company’s Annual General

Meeting in 2024 or 14 September 2024, whichever is

the later.

This authority will be replaced by a new authority to

issue shares up to an aggregate nominal value of

£2,000,000 (equivalent to 20,000,000 shares) at the

forthcoming Annual General Meeting.

During the year to 31 March 2024, a total of 76,120,499

shares were issued from the Company’s fundraising

and 2,490,239 ordinary shares were issued under the

Company’s DRIS.

Buy-back of Shares

Date

Number of

Ordinary shares

of 10p

bought back

Percentage

of issued

share capital

at that date

Consideration

paid per

ordinary

share (pence)

26 June 2023

451,965

0.19%

80.02

25 September 2023

1,065,966

0.44%

78.12

18 December 2023

975,567

0.40%

76.88

25 March 2024

1,137,158

0.43%

80.02

Capital Disclosures

The following information has been disclosed in

accordance with Schedule 7 of the Large and Medium

Sized Companies and Groups (Accounts and Reports)

Regulations 2008 (as amended):

>The Company’s capital structure is summarised in

note 11 to the financial statements. Each ordinary

share carries one vote. There are no restrictions on

voting rights or any agreement between holders of

securities that result in restrictions on the transfer

of securities or on voting rights;

>There are no securities carrying special rights with

regard to the control of the Company;

>The Company does not have an employee share

scheme;

>The rules concerning the appointment and

replacement of directors, amendments to 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;

>With the exception of the Manager’s Incentive

Agreement, there are no agreements to which the

Company is party that take effect, alter or terminate

upon a change in control following a takeover bid;

and

>There are no agreements between the Company

and its directors providing for compensation for loss

of office that may occur because of a takeover bid.

Environment

The Company is a low energy user and is therefore

exempt from the reporting obligations under the

Companies (Directors’ Report) and Limited Liability

Partnerships (Energy and Carbon Report) Regulations

2018. The Company has no greenhouse gas emissions

to report from the operations of the Company, nor does

it have responsibility for any emissions producing

sources including those within its underlying investment

portfolio under part 7 of schedule 7 to the Large and

Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2008, as amended.

40

British Smaller Companies VCT plc Annual Report & Accounts

CORPORATE GOVERNANCE

Directors’

Report

(continued

)

Directors and their Interests

The directors of the Company as at 31 March 2024, their

interests and contracts of significance are set out in the

Directors’ Remuneration Report on pages 49 to 51.

Substantial Shareholdings

The directors are not aware of any substantial

shareholdings representing 3 per cent or more of the

Company’s issued share capital as at 31 March 2024

and the date of this report.

Independent Auditor

BDO LLP has indicated its willingness to continue in

office and a resolution concerning its reappointment

will be proposed at the Annual General Meeting.

Further details regarding their appointment is included

in the Corporate Governance section on pages 45 and

46.

There were no non-audit services provided by BDO LLP

during the year.

Financial Instruments

Details of the financial instruments held by the

Company and the risks associated with them are set out

on pages 86 to 90 and this information is accordingly

incorporated into the Directors’ Report by reference.

Employment Policies

The employment policies of the Company are set out on

page 49.

Events after the Balance Sheet Date

On 3 April 2024 the Company allotted the final shares

from its fully subscribed 2023/24 share offer. Gross

proceeds of £36.8 million were raised, resulting in the

issue of 42,588,037 ordinary shares. This increased

the number of ordinary shares issued with voting rights

to 305,247,398.

Subsequent to the year end, £4.7 million has been

invested into two new investments, Fuuse and Ohalo.

Annual General Meeting

Shareholders will find the Notice of the Annual General

Meeting on pages 92 to 96 of these financial

statements.

The business of the meeting includes an ordinary

resolution (Resolution 8) proposed to ensure the

directors retain the authority to allot shares in the

Company until the later of 10 September 2025 or the

date of the 2025 Annual General Meeting up to an

aggregate nominal amount of £9,000,000 (representing

approximately 29.5 per cent of the issued ordinary

share capital of the Company as at 14 June 2024,

excluding treasury shares).

Resolution 9 is an additional ordinary resolution

proposed to ensure the directors retain the authority to

allot shares in the Company under the Company’s DRIS

until the later of 10 September 2025 or the date of the

2025 Annual General Meeting up to an aggregate

nominal amount of £2,000,000 (representing

approximately 6.6 per cent of the issued ordinary share

capital of the Company as at 14 June 2024, excluding

treasury shares).

Also included are the following special

resolutions:

Resolution 10 is proposed to empower the directors

to allot shares under the authority granted by the

ordinary resolution (Resolution 8) above and to sell

treasury shares without regard to any rights of pre-

emption on the part of the existing shareholders.

Resolution 11 is proposed to empower the directors

to allot shares under the authority granted by the

ordinary resolution (Resolution 9) above without regard

to any rights of pre-emption on the part of the existing

shareholders.

This report was approved by the Board on 14 June 2024

and signed on its behalf by

Rupert Cook

Chair

British Smaller Companies VCT

plc

Registered number

03134749

British Smaller Companies VCT plc Annual Report & Accounts

41

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The Board is committed to the

principle and application of

sound corporate governance and

confirms that the Company has

taken steps, appropriate to a

venture capital trust and relevant

to its size

and operational complexity, to

comply with the principles and

recommendations of the

Association of Investment

Companies’ Code of Corporate

Governance issued in February

2019 (the “AIC Code”) available on

the AIC website www.theaic.co.uk.

The AIC Code addresses all the principles set out in the

UK Corporate Governance Code issued by the Financial

Reporting Council (the “FRC”), as well as setting out

additional principles and recommendations on issues

which are of specific relevance to the Company.

The UK Corporate Governance Code can be found

on the website of the FRC at www.frc.org.uk. On 22

January 2024 the UK Corporate Governance Code

(the “Code”) was updated, the 2024 Code will apply to

financial years beginning on or after 1 January 2025.

The 2018 Code remains in place until this time.

The Board considers that reporting against the

principles and recommendations of the AIC will provide

better information to shareholders.

The Company is committed to maintaining the highest

standards of corporate governance and during the year

to 31 March 2024 complied with the recommendations

of the AIC Code and relevant provisions of the Code,

except as set out below.

The Code includes provisions relating to the

appointment of a chief executive and a recognised

senior independent non-executive director, the

presumption concerning the Chair’s independence and

the need for an internal audit function. For reasons set

out in the AIC Code, and in the introduction to the

Code, the Board considers these provisions are not

relevant to the position of British Smaller Companies

VCT plc,

which is an externally managed venture capital

trust. The Company has therefore not reported

further in respect of these provisions.

Role of the Board

An agreement between the Company and YFM Private

Equity Limited sets out the matters over which the

Manager has authority. This includes monitoring of the

Company’s assets and the provision of accounting,

company secretarial, administration and some marketing

services. All other matters are reserved for the approval

of the Board. A formal schedule of matters reserved to

the Board for decision has been approved. This includes

determination and monitoring of the Company’s

investment objectives and policy and its future strategic

direction, gearing policy, management of the capital

structure, appointment and removal of third party service

providers, review of key investment and financial data

and the Company’s corporate governance, risk control

and custody arrangements.

The Board meets at least quarterly; additional meetings

are arranged as necessary. Full and timely information

is provided to the Board to enable it to function

effectively and to allow directors to discharge their

responsibilities.

There is an agreed procedure for directors to take

independent professional advice, if necessary, at the

Company’s expense. This is in addition to the access

that every director has to the advice and services of the

Company Secretary, who is responsible to the Board

for ensuring that applicable rules and regulations are

complied with and that Board procedures are followed.

The Company indemnifies its directors and officers and

has purchased insurance to cover its directors. Neither

the insurance nor the indemnity provide cover if the

director has acted fraudulently or dishonestly.

The Board reviews the performance of the Manager on

an ongoing basis and confirms that it is satisfied with the

contractual arrangement in place. The Board considers

that due to its small size, it would be unnecessarily

burdensome to establish a separate management

engagement committee, as the Board fulfils this

function.

Board Composition

The Board consists of four non-executive directors,

all of whom are regarded by the Board as independent

of each other and also of the Company’s Manager,

including the Chair. The independence of the Chair

was assessed upon his appointment. Although the

Code presumes that the chair of a company is deemed

not to

Corporate

Governanc

e

42

British Smaller Companies VCT plc Annual Report & Accounts

CORPORATE GOVERNANCE

be an independent director, the remaining directors,

having considered the nature of the role in the

Company, are satisfied that Mr R Cook fulfils the criteria

for independence as a non-executive director. The

directors have a breadth of investment, business and

financial skills and experience relevant to the

Company’s business and provide a balance of power

and authority including recent and relevant financial

experience.

Brief biographical details of each director are set

out on page 36.

A review of Board composition and balance is

included as part of the annual performance evaluation

of the Board, details of which are given below.

There are no executive officers of the

Company.

Given the structure of the Board and the fact that the

Company’s administration is conducted by YFM

Private Equity Limited, the Company has not appointed

a chief executive officer or a senior independent non-

executive director. In addition, the directors consider

that the role of a senior independent non-executive

director is taken on by all of the directors. Shareholders

are therefore able to approach any director with any

queries they may have.

Boardroom Diversity

The Board is committed to ensuring that the Company

is run in the most effective manner. Consequently the

Board monitors the diversity of all directors to ensure

an appropriate level of experience and qualification.

The Board believes in the value and importance of

diversity in the boardroom but does not consider that it

is appropriate or in the best interests of the Company

and its shareholders to set prescriptive targets for

gender or ethnicity on the Board.

Diversity of thought, experience and approach are all

important and the directors will always seek to appoint

on merit against objective criteria. In the year the

Company has not met the Listing Rule board diversity

target of the Board comprising at least 40 per cent

women; the Board’s current ratio reflects the small, four

person composition of the Board. The target of at least

one of the chair, CEO, CFO or senior independent

director being a woman has not been met in the year.

As an investment company, the Company does not

have a CEO or CFO, and has not appointed a senior

independent director. The target of at least one

member of the Board being from a minority ethnic

background was met in the year.

Number of

Board members

Percentage

of the Board

Male

2

50

Female

1

25

Prefer not to say

1

25

Number of

Board members

Percentage

of the Board

White British

2

50

Asian/Asian British

1

25

Prefer not to say

1

25

Tenure

Directors are initially appointed until the following

Annual General Meeting when, under the Company’s

Articles

of Association, it is required that they be elected by

shareholders. Thereafter, it is the Board’s policy

that

a director’s appointment will run for a term of one year

until the next Annual General Meeting. Subject to the

performance evaluation carried out each year, the

Board will agree whether it is appropriate for the director

to seek a further term. The Board, when making a

recommendation, will take into account the ongoing

requirements of the Code, including the need to refresh

the Board and its Committees.

The Board seeks to maintain a balance of skills and

the directors are satisfied that as currently composed

the balance of experience and skills of the individual

directors is appropriate for the Company, in particular

with regards to investment appraisal and investment

risk management.

The terms and conditions of directors’ appointments are

set out in formal letters of appointment, copies of which

are available for inspection on request at the

Company’s registered office and at the Annual General

Meeting. All appointments are terminable by either the

director or the Company on three months’ notice.

The directors recommend the re-election of Mr A C N

Bastin, Mr J H Cartwright, Mr R Cook and Ms P Sapre

at this year’sAnnual General Meeting, because of

their commitment, experience and contribution to

the Company.

Corporate

Governance

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

43

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

In addition, there were two DRIS allotment meetings

which the directors were not required to attend, but

which were attended by the Company Secretary.

Training and Appraisal

On appointment, the Manager and Company Secretary

provide all directors with induction training. Thereafter,

regular briefings are provided on changes in regulatory

requirements that affect the Company and its directors.

Directors are encouraged to attend industry and other

seminars covering issues and developments relevant

to VCTs.

The performance of the Board has been evaluated in

respect of the financial year ended 31 March 2024.

The Board, led by the Chair, has conducted a

performance evaluation to determine whether it and

individual directors are functioning effectively.

The factors taken into account were based on the

relevant provisions of the Code and included

attendance and participation at Board and Committee

meetings, commitment to Board activities and the

effectiveness

of their contribution.

The results of the overall evaluation process are

communicated to the Board. Performance evaluation

continues to be conducted on an annual basis.

The Chair has confirmed that the performance of

the other directors being proposed for re-election

continues to be effective and that they continue to show

commitment to the role. The independent directors have

similarly appraised the performance of the Chair. They

considered that the performance of Mr R Cook continues

to be effective.

Audit & Risk Committee

The Board considers that due to its small size it is

appropriate for all non-executive directors to be

members of the Audit & Risk Committee; the

Company’s Chair confirmed their independence upon

appointment and thus was eligible to join the

Committee. The Committee meets at least three times

each year. The directors consider that it is appropriate

that the Chair of the Committee should be Mr J H

Cartwright due to his experience in the role. The

members of the Committee consider that they have the

requisite skills and experience to fulfil the

responsibilities of the Committee, and that the Chair of

the Committee meets the requirements of the Code as

to recent and relevant financial experience.

Meetings and Committees

The Board delegates certain responsibilities and

functions to Committees. Directors who are not

members of Committees may attend at the invitation

of the Chair.

The table below details the number and function

of the meetings attended by each director.

During the year there were eight formal Board

meetings, three Audit & Risk Committee meetings, two

Allotment Committee Meetings, two Nominations &

Remuneration Committee meetings and two General

meetings. The directors met via video, telephone and

electronic conferences on 28 other occasions.

Meetings attended

Director

Mr R Mr A C N

Cook Bastin

Mr J HMs P

CartwrightSapreTotal

Board meetings

88

888

Audit & Risk Committee

33

333

Allotment Committee

21

112

Nominations & Remuneration

Committee

22

222

Video, telephone & electronic

conferences

2828

282828

General meeting

22

222

Total

4544

444445

44

British Smaller Companies VCT plc Annual Report & Accounts

CORPORATE GOVERNANCE

Corporate

Governance

(continued)

The Audit & Risk Committee’s terms of reference

include the following roles and responsibilities:

>Monitoring and making recommendations to the

Board in relation to the Company’s published

financial statements (including in relation to the

valuation of the Company’s unquoted investments)

and other formal announcements relating to the

Company’s financial performance;

>Monitoring and making recommendations to the

Board in relation to the Company’s internal control

(including internal financial control) and risk

management systems;

>Annually considering the need for an internal

audit function;

>Making recommendations to the Board in relation to

the appointment, re-appointment and removal of the

external auditor and approving the remuneration

and terms of engagement of the external auditor;

>Reviewing and monitoring the external auditor’s

independence and objectivity and effectiveness of

the audit process, taking into consideration relevant

UK professional and regulatory requirements;

>Monitoring the extent to which the external auditor

is engaged to supply non-audit services; and

>Ensuring that the Manager has arrangements in

place for the investigation and follow-up of any

concerns raised confidentially by staff in relation to

the propriety of financial reporting or other matters.

It reviews the terms of the investment management

agreement and examines the effectiveness of the

Company’s internal control and risk management

systems, receives information from the Manager’s

compliance department and reviews the scope and

results of the external audit, its cost effectiveness and

the independence and objectivity of the external

auditor.

The directors’ statement on the Company’s system

of internal control is set out on pages 47 and 48.

The Audit & Risk Committee has written terms of

reference which clearly define its responsibilities,

copies of which are available for inspection on request

at the Company’s registered office and at the Annual

General Meeting, and also on the Company’s website

at www.bscfunds.com.

The Company does not have an independent internal

audit function as it is not deemed appropriate given

the size of the Company and the nature of the

Company’s business. However, the Committee

considers annually whether there is a need for such a

function and, if so, would recommend this to the

Board.

During the year ended 31 March 2024 the Audit &

Risk Committee discharged its responsibilities by:

>Reviewing and approving the external auditor’s

terms of engagement, remuneration and

independence;

>Reviewing the external auditor’s plan for the audit

of the Company’s financial statements, including

identification of key risks;

>Reviewing YFM Private Equity Limited’s statement

of internal controls operated in relation to the

Company’s business and assessing the

effectiveness of those controls in minimising

the impact of key risks;

>Reviewing reports on the effectiveness of the

Manager’s compliance procedures;

>Reviewing the appropriateness of the Company’s

accounting policies;

>Reviewing the Company’s draft annual financial

statements, half yearly results statement and

interim management statements prior to Board

approval, including the proposed fair value of

investments as determined by the directors;

>Reviewing the external auditor’s detailed reports

to the Committee on the annual financial

statements; and

>Recommending to the Board and shareholders

the re-appointment of BDO LLP as the Company’s

external auditor.

The key areas of risk that have been identified and

considered by the Audit & Risk Committee in relation

to the business activities and financial statements of

the Company are as follows:

>Valuation of unquoted investments;

and

>Compliance with HM Revenue & Customs’

conditions for maintenance of approved venture

capital trust status.

These issues were discussed with the Manager and the

auditor at the pre-year end audit planning meeting and

at the conclusion of the audit of the financial

statements.

Valuation of Unquoted Investments

The Audit & Risk Committee reviewed the estimates

and judgements made in the investment valuations and

was satisfied that they were appropriate. The Manager

confirmed to the Audit & Risk Committee that the

investment valuations had been carried out consistently

with prior periods and in accordance with published

industry guidelines, taking account of the latest available

British Smaller Companies VCT plc Annual Report & Accounts

45

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

information about investee companies; current market

data; and a report from the auditor, including key audit

findings in respect of the valuations.

Venture Capital Trust Status

The Manager confirmed to the Audit & Risk Committee

that the conditions for maintaining the Company’s status

as an approved venture capital trust had been complied

with throughout the year. The position was also

reviewed by the Company’s advisers.

Financial Statements

The Manager confirmed to the Audit & Risk Committee

that it was not aware of any material unadjusted

misstatements. Having reviewed the reports received

from the Manager and the auditor, the Audit & Risk

Committee is satisfied that the key areas of risk and

judgement have been appropriately addressed in the

financial statements and that the significant

assumptions used in determining the value of assets

and liabilities and revenue recognition have been

properly appraised and are sufficiently robust.

Relationship with the Auditor

The Audit & Risk Committee is responsible for

overseeing the relationship with the external auditor,

assessing the effectiveness of the external audit

process and making recommendations on the

appointment and removal of the external auditor. It

makes recommendations to the Board on the level of

audit fees and the terms of engagement for the auditor.

The external auditor is invited to attend committee

meetings, where appropriate, and also meets with the

Committee and its Chair without the representatives of

the Manager being present.

The Committee undertakes a review of the external

auditor’s effectiveness of the audit process. The

Committee considers whether the auditor has:

>Demonstrated strong technical knowledge and

clear understanding of the business;

>Indicated professional scepticism in key judgements

and raised any significant issues in advance of the

audit process commencing;

>Allocated an audit team that is appropriately

resourced;

>Demonstrated a proactive approach to the audit

planning process and engaged with the Audit &

Risk Committee Chair and other key individuals

within the business;

>Provided a clear explanation of the scope and

strategy of the audit;

>Demonstrated the ability to communicate clearly

and promptly with the members of the Committee

and the Manager and produce comprehensive

reports on its findings;

>Demonstrated that it has appropriate procedures

and safeguards in place to maintain its

independence and objectivity; and

>Charged justifiable fees in respect of the scope

of services provided.

The Board regularly reviews and monitors the external

auditor’s independence and objectivity. As part of this

process it reviews the nature and extent of services

supplied by the auditor to ensure that independence is

maintained. It is the Company’s policy to contract the

external auditors to perform audit-related services

only.

The auditor prepares an audit strategy document on

an annual basis. This provides information on the

audit team and timetable, audit scope and objectives,

evaluation of materiality, initial assessment of key audit

and accounting risks, confirmation of independence and

proposed fees. This is reviewed and approved by the

Audit & Risk Committee with an opportunity to consider

the audit approach and to raise any queries with the

auditor.

The outcome of the review together with any actions

that have arisen are formally minuted and a summary

is submitted to the Board for consideration.

The Audit & Risk Committee assesses the

effectiveness of the external audit process annually and

makes a recommendation to the Board on the re-

appointment

of the auditor. This is considered by the Board prior

to agreeing the recommendation to shareholders for the

re-appointment of the auditor at each Annual General

Meeting of the Company. As part of its review, the Audit

& Risk Committee considers the performance of the

auditor and whether it has met the agreed audit plan, the

quality of its reporting in its management letter and the

cost effectiveness of the services provided as well as

the manner in which it has handled key audit issues and

responded to the Audit & Risk Committee’s questions.

As part of the review of audit effectiveness and

independence, BDO LLP has confirmed that it is

independent of the Company and has complied with

applicable auditing standards. BDO LLP has held office

for ten years; in accordance with professional

guidelines the previous engagement partner was

rotated off the audit after five years; this is the third year

of the current partner’s tenure. The Committee notes

there is a

46

British Smaller Companies VCT plc Annual Report & Accounts

Corporate

Governance

(continued)

CORPORATE GOVERNANCE

requirement to tender every ten years, and that the last

tender process was performed in the year ended 31

March 2014. The Company sought to initiate a tender

process during the year ended 31 March 2024 but was

unable to identify a sufficient number of firms with

suitable skill and experience who were prepared to

participate. Therefore, the Company submitted an

application to the FRC in accordance with its “Process

for applications to extend the maximum duration of the

audit engagement”. Pursuant to section 494ZA of the

Companies Act 2006, the FRC approved the

Company’s application for a two-year extension to the

appointment of BDO LLP as the auditor of British

Smaller Companies VCT plc for the financial periods

ending 31 March 2024 and 31 March 2025. The

Company intends to run an audit tender process during

the year ending 31 March 2025.

Having completed its review, the Audit & Risk

Committee is satisfied that BDO LLP remained effective

and independent in carrying out its responsibilities up to

the date of signing this report and its recommendation

for reappointment is endorsed by the Board. No non-

audit services were provided by BDO LLP during the

year.

Nominations and Remuneration Committee

The Company has a combined Nominations and

Remuneration Committee. The Board considers that due

to its small size it is appropriate for all non-executive

directors, who are considered by the Board to be

independent of the Manager, to be members of the

Nomination and Remuneration Committee. Mr J H

Cartwright is Chair of the Nominations and

Remuneration Committee. The Nominations and

Remuneration Committee reviews the Company’s

remuneration policy so as to determine and agree the

remuneration to be paid to each director of the Company

and is responsible for the production of the Directors’

Remuneration Report which may be found on pages 49

to 51.

In considering appointments to the Board, the

Nominations and Remuneration Committee takes into

account the ongoing requirements of the Company and

the need to have a balance of skills and experience

within the Board.

Meetings are held as and when required. There were

two Nominations and Remuneration committee

meetings during the year.

The Board considers succession planning at least

annually, especially in relation to the positions of

the Chair and the Chair of the Audit & Risk

Committee.

Investment Committee

The Investment Committee currently consists of the

non-executive directors. The Chair of the Committee

is Mr A C N Bastin.

The Investment Committee is authorised to make

investment decisions (including new investment, further

investment, variation and realisation decisions) on

behalf of the Board.

The Manager is authorised to approve follow-on

investment decisions of up to £600,000 on behalf of

the Company for well-performing investments.

The Investment Committee has written terms of

reference which define clearly its responsibilities,

copies of which are available for inspection on request

at the Company’s registered office and on the

Company’s website at www.bscfunds.com.

Allotment Committee

The Company has an Allotment Committee, which

consists of the directors, all of whom are considered

by the Board to be independent of the Manager. The

quorum for Committee meetings is one director, unless

otherwise determined by the Board. In addition, the

Company Secretary has an authority to allot shares

under the DRIS.

The Committee considers and, if appropriate, authorises

the allotment of shares. The Committee ensures that the

total number of shares to be issued does not exceed the

authority given by the shareholders. There are no written

terms of reference.

Relations with Shareholders

The Board regularly monitors the shareholder profile

of the Company. It aims to provide shareholders

with a full understanding of the Company’s activities

and performance, and reports formally to

shareholders

at least twice a year by way of the Annual Report

and the Interim Report. This is supplemented by the

daily publication of the Company’s share price and

the publication of the net asset value of the Company

for the two quarters of the year where an Annual or

Interim Report is not normally issued (30 June and 31

December), through the London Stock Exchange.

All shareholders have the opportunity, and are

encouraged, to attend the Company’s Annual

General Meeting, at which the directors and

representatives of the Manager are available in

person to meet with and answer shareholders’

questions. In addition, representatives of the Manager

periodically hold

British Smaller Companies VCT plc Annual Report & Accounts

47

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

shareholder workshops which review the Company’s

performance and industry developments, and which give

shareholders a further opportunity to meet members of

the Board and chief executives or chairs of some of the

investee companies. During the year, the Company’s

Manager has held regular discussions with

shareholders. The directors are made fully aware of

shareholders’ views. The Chair and directors make

themselves available, as and when required, to address

shareholder queries. The directors may be contacted

through the Company Secretary, whose details are

shown on page 36.

The Company’s Annual Report and Notice of the

Annual General Meeting are published in time to give

shareholders at least 21 clear days’ notice of the

Annual General Meeting. Shareholders wishing to raise

questions in advance of the meeting are encouraged to

write to the Company Secretary at the address shown

on page 36. Separate resolutions are proposed for each

separate issue. Proxy votes will be counted and the

results announced at the Annual General Meeting for

and against each resolution.

Internal Control and Risk Management

Under an agreement dated 28 February 1996, as varied

by agreements dated 1 July 2009, 16 November 2012,

17 October 2014, 24 August 2015 and 18 November

2019, certain functions of the Company have been sub-

contracted to YFM Private Equity Limited. The Board

receives operational and financial reports on the current

state of the Company and on appropriate strategic,

financial, operational and compliance issues. These

matters include, but are not limited to:

>A clearly defined investment strategy for the

Manager to the Company;

>All decisions concerning the acquisition or disposal

of investments are ratified by the Board;

>Regular reviews of the Company’s investments,

liquid assets and liabilities, revenue and

expenditure;

>Regular reviews of compliance with the VCT

regulations to retain its status; and

>The Board receives copies of the Company’s

management accounts on a regular basis showing

comparisons with budget. These include a report by

the Manager with a review of performance.

Additional information is supplied on request.

The Board confirms the procedures to implement the

guidance detailed in Principle O of the AIC Code were

in

place throughout the year ended 31 March 2024 and

up to the date of this report. A detailed review of the

risks faced by the Company and the techniques used

to mitigate these risks can be found in the Strategic

Report on pages 31 to 33.

The Board acknowledges that it is responsible for

overseeing the Company’s system of internal control

and for reviewing its effectiveness. Such a system is

designed to manage rather than eliminate the risk of

failure to achieve business objectives and can only

provide reasonable and not absolute assurance against

material misstatement or loss.

The Board arranges its meeting agenda so that risk

management and internal control is considered on

a regular basis and a full robust risk and control

assessment takes place no less frequently than twice

a year. There is an ongoing process for identifying,

evaluating and managing the significant risks faced

by the Company. This process has been in place for

longer than the year under review and up to the date

of approval of the Annual Report. The process is

formally reviewed bi-annually by the Board. However,

due to the size and nature of the Company, the Board

has concluded that it is not necessary at this stage to

set up an internal audit function. This decision will be

kept under review. The directors are satisfied that the

systems of risk management that they have introduced

are sufficient to comply with the FRC Guidance on

Risk Management, Internal Control and Related

Financial and Business Reporting.

In particular the Board, together with the Audit & Risk

Committee, is responsible for overseeing and

reviewing internal controls concerning financial

reporting. In addition to those controls sub-contracted

as listed above, the following controls have been in

place throughout the year:

>A robust system of internal control is maintained by

the Manager over the preparation and reconciliation

of investment portfolio valuations;

>Monthly reconciliation of assets held as cash and

cash equivalents;

>Independent review of the valuations of portfolio

investments by the Board (quarterly);

>The Audit & Risk Committee’s review of financial

reporting and compliance (as set out on pages 43

to 46);

>The Board reviews financial information including

the Annual Report, Interim Report and interim

management statements prior to their external

communication; and

48

British Smaller Companies VCT plc Annual Report & Accounts

Corporate

Governance

(continued)

CORPORATE GOVERNANCE

>The Board reviews the financial information in any

prospectus or offer for subscription issued by the

Company in connection with the issue of new share

capital.

The Company is classified by the FCA as an

Alternative Investment Fund (“AIF”), which requires an

Alternative Investment Fund Manager (“AIFM”) to be

appointed to, at a minimum, provide portfolio

management and risk management services. The

Manager is appointed as the Company’s AlFM.

The AIFM Directive provides two regimes, a lighter

regime for AIFMs where the cumulative assets of the

AIFs under its management do not exceed €100 million;

or do not exceed €500 million where the AIFs are

unleveraged and do not give their investors a right of

redemption within five years of initial investment.

In March 2023 the Manager exceeded this threshold

and applied to the FCA to become authorised as a full

scope AIFM. In September 2023 the Manager

received this authorisation from the FCA. From this

date, the Depositary took responsibility for the

safekeeping of the assets of the Company.

The Board has reviewed the effectiveness of the

Company’s systems of internal control and risk

management for the year and up to the date of this

Report. The Board is of the opinion that the

Company’s systems of internal, financial, and other

controls are appropriate to the nature of its business

activities and methods of operation given the size of

the Company, and the Board has a reasonable

expectation that the Company will continue in

operational existence for the foreseeable future.

Conflicts of Interest

The directors have declared any conflicts or potential

conflicts of interest to the Board, which has the authority

to authorise such situations if appropriate. The

Company Secretary maintains the Register of Directors’

Interests, which is reviewed quarterly by the Board,

when changes are notified, and the directors advise the

Company Secretary and the Board as soon as they

become aware of any conflicts of interest. Directors who

have conflicts of interest which have been approved by

the Board do not take part in discussions or decisions

which relate to any of their conflicts.

The Board notes Mr R Cook’s position as a

shareholder of Xapien, a portfolio investment of the

Company. In making the investment into Xapien, the

Company’s conflicts of interest policy was followed,

with Mr R Cook recused from all decision making.

Corporate Governance in Relation to Investee

Companies

The Company delegates responsibility for monitoring

its investments to its Manager whose policy, which has

been noted by the Board, is as follows:

YFM Private Equity Limited is committed to introducing

corporate governance standards into the companies in

which its clients invest. With this in mind, the

Company’s investment agreements contain contractual

terms specifying the required frequency of management

board meetings and of annual shareholders’ meetings,

and for representation at such meetings through YFM

Private Equity Limited. In addition, provision is made for

the preparation of regular and timely management

information to facilitate the monitoring of an investee

company performance in accordance with best practice

in the private equity sector.

Co-Investment

Typically, the Company invests alongside other venture

capital funds and other private equity funds managed

by the Manager, such syndication spreading investment

risk. Details of the amounts invested in individual

companies are set out in the Strategic Report.

Co-investments are detailed in note 7 to the financial

statements on pages 81 to 83.

Management

The Board has delegated the monitoring of the

investment portfolio to the Manager.

This report was approved by the Board on 14 June 2024

and signed on its behalf by

Rupert Cook

Chair

British Smaller Companies VCT

plc

Registered number

03134749

British Smaller Companies VCT plc Annual Report & Accounts

49

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The Board has prepared this report

in accordance with the

requirements

of the Large and Medium Sized

Companies and Groups

(Accounts and Reports)

(Amendment) Regulations 2013.

Ordinary resolutions for the

approval of this report and the

Directors’

Remuneration Policy will be put

to the members at the

forthcoming Annual General

Meeting.

The law requires the Company’s auditor, BDO LLP, to

audit certain information included in this report.

Where disclosures have been audited, they are

indicated as such. The auditor’s opinion is included in

the Independent Auditor’s Report on pages 53 to 59.

Directors’ Remuneration Policy

This statement of the Directors’ Remuneration Policy

took effect following approval by shareholders at the

Annual General Meeting held on 14 September 2023.

A resolution to approve the Directors’

Remuneration Policy will be put to shareholders

every three years.

The Board comprises four directors, all of whom

are non-executive. The Company currently has

an independent Nominations and Remuneration

Committee, which is comprised of the full Board and

of which Mr J H Cartwright is the independent

Chair.

The Board has not retained external advisors in

relation to remuneration matters but has access to

information about directors’ fees paid by other

companies of a similar size and nature and this is used

as a reference when setting directors’ remuneration.

Shareholders’ views in respect of the directors’

remuneration are communicated at the Company’s

AGM and are taken into consideration in formulating

the Directors’ Remuneration Policy.

At the last Annual General Meeting, 94 per cent of

shareholders who exercised their voting rights voted

for the resolution approving the Directors’

Remuneration Report, showing significant shareholder

approval.

The Board’s policy is that the remuneration of

non-executive directors should reflect the experience

of the Board as a whole, to be fair and comparable to

that of other relevant venture capital trusts that are

similar in size and have similar investment objectives

and structures. Furthermore, the level of

remuneration should be sufficient to attract and retain

the directors needed to properly oversee the

Company and to reflect the duties and responsibilities

of the directors and the value and amount of time

committed to the Company’s affairs.

It is not considered appropriate that directors’

remuneration should be performance-related, and as

such the directors are not eligible for bonuses, share

options, pension benefits, long-term incentive

schemes or other benefits in respect of their services

as non-executive directors of the Company.

It is the Board’s policy that directors do not have

service contracts, but new directors are provided with a

letter

of appointment. The terms of directors’

appointments provide that directors should retire and

be subject

to election at the first AGM after their appointment.

Thereafter, it has been agreed that all directors will

offer themselves for re-election on an annual basis. All

directors’ appointments are terminable by each director

or the Company on three months’ notice. Any director

who ceases to hold office is not entitled to receive any

payment other than accrued fees (if any) for past

services. There were no payments for loss of office

made during the period.

The policy will continue to be applied in the

forthcoming year.

Brief biographical notes on the directors are given

on page 36.

Statement by the Chair of the Nominations

and Remuneration Committee

The directors have reviewed the level of directors’

fees and, in light of the current inflationary

environment, agreed that they will be increased by

five per cent to £46,300 per annum for the Chair and

£28,950 for the Non-Executive Directors, effective

from 1 July 2024. Further, from the same date the

Chairs of the Audit & Risk Committee and the

Investment Committee will receive an additional

£5,000 per annum, reflecting the increased activity

required in fulfilling those roles.

Directors’

Remuneration

Report

50

British Smaller Companies VCT plc Annual Report & Accounts

CORPORATE GOVERNANCE

In accordance with the Directors’ Remuneration Policy,

the directors have agreed that they should be reviewed

again in June 2025. The cap on aggregate annual fees

is £150,000.

Directors’ Remuneration for the year ended 31

March 2024 (audited)

The directors who served in the year and the previous

year received the following emoluments in the form of

fees, which represent the entire remuneration payable

to directors (see Table A):

There are no executive directors (2023:

none).

Table A

Total Fixed Fees Paid (audited)

2024

£

R Cook43,575

A C N Bastin

27,236

26,250

J H Cartwright

27,236

26,250

P Sapre

27,236

21,606

H Sinclair*

-

19,438

125,283

128,369

* resigned 16 September 2022

With effect from 1 July 2023, the annual salary of the

Chair was increased to £44,100 (previously £42,000)

and the annual salary of the other directors was

increased to £27,565 (previously £26,250). The

annual salary of Ms P Sapre from the date of her

appointment on 6 September 2022 was £26,250.

Table B

Total Fixed Fees Paid: Annual change

2024

%

2023 2022

% %

2021

%

R Cook5.0

0.0*0.0

A C N Bastin5.0

5.00.0

J H Cartwright5.0

5.00.0

P Sapre5.0

n/an/a

H Sinclairn/a

n/a0.0

* The annual salary of Mr A C N Bastin from the date of his appointment on 11

September 2019 was £25,000, the annual salary of Mr J H Cartwright from the date of

his appointment on 1 October 2019 was £25,000 and the annual salary of Ms P Sapre

from the date of her appointment on 6 September 2022 was £26,250. The annual

salary of Mr R Cook from the date of his appointment as Chair on 16 November 2023

was £42,000.

Directors and their Interests (audited)

The directors of the Company at 31 March 2024 and

their beneficial interests in the share capital of the

Company (including those of immediate family

members) were as shown in Table C:

Table C

Directors and their interests (audited)

Number ofPercentage of

ordinary shares at: voting rights:

31 March 31 March 31 March 31 March

2024 2023 2024 2023

R Cook

196,540

222,042

0.07%0.12%

A C N Bastin

13,247

13,247

0.01%0.01%

2023

J H Cartwright 26,494 26,494 0.01% 0.01%

£

P Sapre 7,028 - 0.00% 0.00%

34,825

None of the directors held any options to acquire

additional shares at the year end.

The Company has not set out any formal requirement

or guidelines concerning their ownership of shares

in the Company.

Relative Importance of Spend on Pay

Directors’ remuneration, dividend distribution

and share buy-backs are shown in Table D:

The remuneration of the directors is fixed and

contains no performance related variable element. As

the Company has no employees, the directors do not

consider it relevant to compare directors’ fees against

employee pay.

Table D

Relative Importance of Pay

2024

£

2023

£

0.0

Dividends

9,635,000

15,884,000

2,869,000

2,497,000

0.0*

Share buy-backs

0.0*

Total directors’ fees

n/a

0.0

125,283

128,369

Directors’

Remuneration

Report (continued)

British Smaller Companies VCT plc Annual Report & Accounts

51

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Consideration of Employment Conditions of

Non-director Employees

The Company does not have any employees.

Accordingly, the disclosures required under paragraph

38 and 39 of Schedule 8 to the Large and Medium-sized

Companies and Groups (Accounts and Reports)

Regulations 2008 are not required.

Company Performance

The Board is responsible for the Company’s

investment strategy and performance, although the

management of the Company’s investment portfolio is

delegated

to the Manager through the investment management

agreement, as referred to in the Corporate Governance

section.

Net Asset Value Total Return (calculated by reference

to the net asset value and cumulative dividends paid,

as set out in note 12 of these financial statements and

excluding tax reliefs received by shareholders) is the

primary recognised measure of performance in the VCT

industry. This measure is shown on page 11.

The graph above shows a comparison over the last ten

years of the movements in both the Company’s Share

Price Total Return and the Share Price Total Return

for an index of generalist VCTs which are members of

the AIC (based on figures provided by Morningstar). In

line with the index all the relative performance

measures have been rebased to 100 as at March

2014. The directors consider this to be the most

appropriate published index on which to report on

comparative performance.

This report was approved by the Board and signed

on its behalf on 14 June 2024.

Rupert Cook

Chair

BSC - Share Price Total Return

(Dividends re-invested since inception)*

VCT Generalist Share Price Total Return

(Source: Index compiled by Morningstar)*

* assumes dividends re-invested

100

150

200

250

300

20142015201620172018201920202021202220232024

Percentage movement per ordinary share

52

British Smaller Companies VCT plc Annual Report & Accounts

CORPORATE GOVERNANCE

The directors are responsible for

preparing the annual report and

the financial statements in

accordance with UK adopted

international accounting

standards in conformity with the

requirements of the Companies

Act 2006 and applicable law and

regulations.

Company law requires the directors to prepare financial

statements for each financial year. Under that law the

directors are required to prepare the financial

statements in accordance with UK adopted international

accounting standards in conformity with the

requirements of the Companies Act 2006. 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 for 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 they have been prepared in

accordance with UK adopted international

accounting standards in conformity with the

requirements of the Companies Act 2006, 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; and

>Prepare a directors’ report, a strategic 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. The directors are responsible for

ensuring that the annual report and accounts, taken as

a whole, are fair, balanced, and understandable and

provide the information necessary for shareholders to

assess the performance, business model and strategy.

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 www.bscfunds.com 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 DTR4

The directors confirm to the best of their

knowledge:

>The financial statements have been prepared in

accordance with UK adopted international

accounting standards in conformity with the

requirements of the Companies Act 2006 and give

a true and fair view of the assets, liabilities,

financial position and profit and loss of the

Company; and

>The annual report includes a fair review of the

development and performance of the business and

the financial position of the Company, together with

a description of the principal risks and uncertainties

that they face.

The names and functions of all the directors are

stated on page 36.

This statement was approved by the Board and signed

on its behalf on 14 June 2024.

Rupert Cook

Chair

Directors’

Responsibilities

Statement

British Smaller Companies VCT plc Annual Report & Accounts

53

Opinion on the financial statements

In our opinion the financial statements:

>Give a true and fair view of the state of the

Company’s affairs as at 31 March 2024 and of its

profit for the year then ended;

>Have been properly prepared in accordance with

UK adopted international accounting standards;

>Have been prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the financial statements of British

Smaller Companies VCT plc (the ‘Company’) for the

year ended 31 March 2024 which comprise the

Statement of Comprehensive Income, the Balance

Sheet, the Statement of Changes in Equity, the

Statement of Cash Flows and notes to the financial

statements, including a summary of material accounting

policies. The financial reporting framework that has

been applied in their preparation is applicable law and

UK adopted international accounting standards.

Basis for opinion

We conducted our audit in accordance with

International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those

standards are further described in the Auditor’s

responsibilities for the audit of the financial statements

section of our report. We believe that the audit evidence

we have obtained is sufficient and appropriate to

provide a basis for our opinion. Our audit opinion is

consistent with the additional report to the Audit & Risk

Committee.

Independence

Following the recommendation of the Audit & Risk

Committee, we were appointed by the Board of Directors

during 2014 and subsequently by the shareholders at

the AGM on 22 July 2014 to audit the financial

statements for the year ended 31 March 2014 and

subsequent financial periods. The period of total

uninterrupted engagement including retenders and

reappointments is 11 years, covering the years ended

31 March 2014 to 31 March 2024. We remain

independent of the Company in accordance with the

ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s

Ethical Standard as applied to listed public interest

entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

The non-audit services prohibited by that standard

were not provided to the Company.

An audit tender was due for the 31 March 2024 year-

end. As such, the Company applied to the Financial

Reporting Council (‘FRC’) on 4 June 2023 to request an

extension which was subsequently approved, therefore

BDO LLP could continue to remain as auditors for the

financial years ending 31 March 2024 and 31 March

2025. An audit tender is required to be performed

before the financial year ending 31 March 2026.

Conclusions relating to going concern

In auditing the financial statements, we have concluded

that the directors’ use of the going concern basis of

accounting in the preparation of the financial

statements is appropriate. Our evaluation of the

Directors’ assessment of the Company’s ability to

continue to adopt the going concern basis of accounting

included:

>Obtaining the VCT compliance reports prepared by

management’s expert during the year and as at

year end and reviewing the calculations therein to

check that the Company was meeting its

requirements to retain VCT status;

>Consideration of the Company’s expected future

compliance with VCT legislation, the absence of

bank debt, contingencies and commitments and

any market or reputational risks;

>Reviewing the forecasted cash flows that support

the directors’ assessment of going concern,

challenging assumptions and judgements made in

the forecasts, and assessing them for

reasonableness. We have stress tested forecasts

including consideration of current cash levels, future

expenses with reference to historic expenditure and

cash outflows relating to new investments in order

to determine whether the Company will continue

meeting VCT compliance rules; and

>Evaluating the directors’ method of assessing the

going concern in light of market volatility.

Based on the work we have performed, we have not

identified any material uncertainties relating to events

or conditions that, individually or collectively, may

cast significant doubt on the Company’s ability to

continue as a going concern for a period of at least

twelve months from when the financial statements

are authorised for issue.

Independent

Auditor’s

Report

to the members of British Smaller Companies VCT

plc

INDEPENDENT AUDITOR’S REPORT

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

54

British Smaller Companies VCT plc Annual Report & Accounts

In relation to the Company’s reporting on how it has

applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to

the directors’ statement in the financial statements

about whether the directors considered it appropriate to

adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the

directors with respect to going concern are

described in the relevant sections of this report.

Overview

20242023

Key audit matters

Valuation of Unquoted Investments

33

Materiality

Company financial statements as a whole

£2.5 million (2023: £2.5 million) based on 2% (2023:

2%) of total financial assets at fair value through profit or

loss

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding

of the Company and its environment, including the

Company’s system of internal control, and assessing

the risks of material misstatement in the financial

statements. We also addressed the risk of management

override of internal controls, including assessing

whether there was evidence of bias by the Directors that

may have represented a risk of material misstatement.

Key audit matters

Key audit matters are those matters that, in our

professional judgement, were of most significance in

our audit of the financial statements of the current

period and include the most significant assessed risks

of material misstatement (whether or not due to fraud)

that we identified, including those which had the

greatest effect on: the overall audit strategy, the

allocation of resources in the audit, and directing the

efforts of the engagement team. These matters were

addressed in the context of our audit of the financial

statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on

these matters.

Key audit matter

How the scope of our audit addressed the key audit

matter

Valuation of unquoted

investments (Note 1

and Note 7)

We consider the valuation of

unquoted investments to be the

most significant audit area as there

is a high level of estimation

uncertainty involved in determining

the unquoted investment

valuations.

r

y

There is an inherent risk of

management override arising from

the unquoted investment

valuations being prepared by the

Investment Manage , who is

remunerated based on factors

including the net asset value of

the Compan .

For these reasons we

considered the valuation of

unquoted investments to be a

key audit matter

.

Our sample for the testing of unquoted investments was stratified according

to risk considering, inter alia, the value of individual investments, the nature of

the investment, the extent of the fair value movement and the subjectivity of

the valuation technique.

For all unquoted investments in our sample

we:

,

Challenged whether the valuation methodology was the most appropriate in

the circumstances under the International Private Equity and Venture Capital

Valuation (“IPEV”) Guidelines and the applicable accounting standards. We

have recalculated the value attributable to the Company having regard to the

application of enterprise value across the capital structures of the investee

companies.

For investments sampled that were valued using less subjective valuation

techniques (price of recent investment reviewed for changes in fair value)

we:

> Verified the price of recent investment to supporting

documentation;

> Considered whether the investment was an arm’s length transaction

through reviewing the parties involved in the transaction and

checking whether or not they were already investors of the investee

company;

> Considered whether there were any indications that the price of recent

investment was no longer representative of fair value considering, inter

alia, the current performance of the investee company and the

milestones and assumptions set out in the investment proposal; and

> Considered whether the price of recent investment is supported by

alternative valuation techniques.

INDEPENDENT AUDITOR’S REPORT

Independent

Auditor’s

Report

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

55

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Key audit matterHow the scope of our audit addressed the key audit matter

For investments sampled that were valued using more subjective

techniques (earnings multiples and revenue multiples) we:

> Challenged and corroborated the inputs to the valuation with reference to

management information of investee companies, market data and our

own understanding and assessed the impact of the estimation uncertainty

concerning these assumptions and the disclosure of these uncertainties in

the financial statements;

> Reviewed the historical financial statements and any recent management

information available to support assumptions about maintainable

revenues, earnings or cash flows used in the valuations;

> Considered the revenue or earnings multiples applied and the discounts

applied by reference to observable listed company market data; and

> Challenged the consistency and appropriateness of adjustments made to

such market data in establishing the revenue, cash flow or earnings

multiple applied in arriving at the valuations adopted by considering the

individual performance of investee companies against plan and relative

to the peer group, the market and sector in which the investee company

operates and other factors as appropriate.

For investments that were valued at net asset value, we performed

the following:

> Obtained the 31 March 2024 management accounts and recalculated the

Company’s share of net asset value; and

> Agreed the bank balance to the supporting bank statements and any loans

to companies within the portfolio to the underlying valuations work

performed above.

Where appropriate, we performed a sensitivity analysis by developing our

own point estimate where we considered that alternative input assumptions

could reasonably have been applied and we considered the overall impact of

such sensitivities on the portfolio of investments in determining whether the

valuations as a whole are reasonable and free from bias.

Key observations

Based on the procedures performed we consider the investment valuations

to be appropriate considering the level of estimation uncertainty.

Our application of materiality

We apply the concept of materiality both in planning

and performing our audit, and in evaluating the effect

of misstatements. We consider materiality to be

the magnitude by which misstatements, including

omissions, could influence the economic decisions

of reasonable users that are taken on the basis of

the financial statements.

In order to reduce to an appropriately low level the

probability that any misstatements exceed materiality,

we use a lower materiality level, performance

materiality, to determine the extent of testing needed.

Importantly, misstatements below these levels will not

necessarily be evaluated as immaterial as we also take

account of the nature of identified misstatements, and

the particular circumstances of their occurrence, when

evaluating their effect on the financial statements as a

whole.

56

British Smaller Companies VCT plc Annual Report & Accounts

INDEPENDENT AUDITOR’S REPORT

Independent

Auditor’s

Report

(continued)

Reporting threshold

We agreed with the Audit & Risk Committee that we

would report to them all individual audit differences in

excess of £125,000 (2023: £120,000). We also agreed

to report differences below this threshold that, in our

view, warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information.

The other information comprises the information

included in the annual report other than the financial

statements and our auditor’s report thereon. Our opinion

on the financial statements does not cover the other

information and, except to the extent otherwise explicitly

stated in our report, we do not express any form of

assurance conclusion thereon. Our responsibility is to

read the other information and, in doing so, consider

whether the other information is materially inconsistent

with the financial statements or our knowledge obtained

in the course of the audit, or otherwise appears to be

materially misstated. If we identify such material

inconsistencies or apparent material misstatements,

we are required to determine whether this gives rise

to a material misstatement in the financial statements

themselves. If, based on the work we have performed,

we conclude that there is a material misstatement of

this other information, we are required to report that

fact.

We have nothing to report in this

regard.

Corporate governance statement

The Listing Rules require us to review the directors’

statement in relation to going concern, longer-term

viability and that part of the Corporate Governance

Statement relating to the Company’s compliance with

the provisions of the UK Corporate Governance Code

specified for our review.

Based on the work undertaken as part of our audit,

we have concluded that each of the following elements

of the Corporate Governance Statement is materially

consistent with the financial statements or our

knowledge obtained during the audit.

Based on our professional judgement, we determined materiality for the financial statements as a whole and

performance materiality as follows:

Company financial statements

2024

£m

2023

£m

Materiality

2.5

2.5

Basis for determining

materiality

2% of total financial assets at

fair value through profit or loss

2% of total financial assets at

fair value through profit or loss

Rationale for the benchmark appliedIn setting materiality, we have had regard to the nature and

disposition of the investment portfolio. Given that the VCT’s portfolio

is comprised of unquoted investments which would typically have a

wider spread of reasonable alternative possible valuations, we

have applied a percentage of 2% of financial assets at fair value

through profit or loss.

Performance materiality

1.9

1.9

Basis for determining performance

materiality

75% of materiality

75% of materiality

Rationale for the percentage applied for

performance materiality

The level of performance materiality applied was set after having

considered a number of factors including the expected total value of

known and likely misstatements based on our knowledge and

experience of the audited entity.

British Smaller Companies VCT plc Annual Report & Accounts

57

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Going concern and

longer-term viability

>The directors’ statement with regards to the appropriateness of

adopting the going concern basis of accounting and any material

uncertainties identified; and

>The directors’ explanation as to their assessment of the Company’s

prospects, the period this assessment covers and why the period is

appropriate.

Other Code provisions

>Directors’ statement on fair, balanced and

understandable;

>Board’s confirmation that it has carried out a robust assessment of

the emerging and principal risks;

>The section of the annual report that describes the review of

effectiveness of risk management and internal control systems;

and

>The section describing the work of the Audit & Risk

Committee.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are

required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

In our opinion, based on the work undertaken in the course of the

audit:

Strategic report and

Directors’ report

>The information given in the Strategic Report and the Directors’ Report

for the financial year for which the financial statements are prepared is

consistent with the financial statements; and

>The Strategic Report and the Directors’ Report have been prepared

in accordance with applicable legal requirements. In the light of the

knowledge and understanding of the Company and its environment

obtained in the course of the audit, we have not identified material

misstatements in the Strategic Report or the Directors’ Report.

Directors’ remuneration

In our opinion, the part of the Directors’ Remuneration Report to be

audited has been properly prepared in accordance with the Companies

Act 2006.

Matters on which we are required

to report by exception

We have nothing to report in respect of the following matters in relation to

which the Companies Act 2006 requires us to report to you if, in our

opinion:

>Adequate accounting records have not been kept, or returns

adequate for our audit have not been received from branches not

visited by us; or

>The financial statements and the part of the Directors’ Remuneration

Report to be audited are not in agreement with the accounting

records and returns; or

>Certain disclosures of directors’ remuneration specified by law are

not made; or

> We have not received all the information and explanations we

require for our audit.

58

British Smaller Companies VCT plc Annual Report & Accounts

Independent

Auditor’s

Report

(continued)

INDEPENDENT AUDITOR’S REPORT

Responsibilities of Directors

As explained more fully in the Directors’

Responsibilities Statement, the directors are

responsible for the preparation of the financial

statements and for being satisfied that they give a true

and fair view, and for such internal control as the

directors determine is necessary to enable the

preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are

responsible for assessing the Company’s ability to

continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going

concern basis of accounting unless the directors either

intend to liquidate the Company or to cease

operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the

financial statements

Our objectives are to obtain reasonable assurance

about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or

error, and to issue an auditor’s report that includes

our opinion. Reasonable assurance is a high level

of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always

detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate,

they could reasonably be expected to influence the

economic decisions of users taken on the basis of these

financial statements.

Extent to which the audit was capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-

compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined

above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which

our procedures are capable of detecting

irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

>Our understanding of the Company and the

industry in which it operates;

>Discussion with the Manager and those charged

with governance; and

>Obtaining and understanding of the Company’s

policies and procedures regarding compliance with

laws and regulations.

We considered the significant laws and regulations to be

the Companies Act 2006, the FCA listing and DTR rules,

the principles of the AIC Code on Corporate

Governance, industry practice represented by the

Statement of Recommended Practice: Financial

Statements of Investment Trust Companies and Venture

Capital Trusts (“the SORP”) and updated in 2022 with

consequential amendments and the applicable financial

reporting framework. We also considered the

Company’s qualification as a VCT under UK tax

legislation.

Our procedures in respect of the above

included:

>Agreement of the financial statement disclosures

to underlying supporting documentation;

>Enquiries of the Manager and those charged with

governance relating to the existence of any non-

compliance with laws and regulations;

>Obtaining the VCT compliance reports prepared

by management’s expert during the year and as at

year end and reviewing their calculations to check

that the Company was meeting its requirements to

retain VCT status; and

>Reviewing minutes of meeting of those charged

with governance throughout the period for instances

of non-compliance with laws and regulations.

Fraud

We assessed the susceptibility of the financial

statements to material misstatement including fraud.

Our risk assessment procedures

included:

>Enquiry with the Manager and those charged with

governance regarding any known or suspected

instances of fraud;

>Review of minutes of meeting of those charged with

governance for any known or suspected instances

of fraud; and

>Discussion amongst the engagement team as to

how and where fraud might occur in the financial

statements.

Based on our risk assessment, we considered the areas

most susceptible to fraud to be the valuation of

unquoted investments and management override of

controls.

British Smaller Companies VCT plc Annual Report & Accounts

59

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

>In addressing the risk of valuation of unquoted

investments, the procedures set out in the key

audit matter section in our report were performed;

>In addressing the risk of management override

of control, we:

-Considered the opportunity and incentive

to manipulate accounting entries;

-Reviewed for significant transactions outside

the normal course of business;

-Reviewed the significant judgements made in

the unquoted investment valuations and

considered whether the valuation

methodology is the most appropriate;

-Performed an unpredictability test over a

sample of clearly trivial expenses, which

would not be normally selected, and agreed

to relevant supporting evidence;

-Considered any indicators of bias in our audit

as a whole; and

-Performed a review of unadjusted audit

differences, if any, for indications of bias

or deliberate misstatement.

We also communicated relevant identified laws and

regulations and potential fraud risks to all engagement

team members, who were deemed to have the

appropriate competence and capabilities, and remained

alert to any indications of fraud or non-compliance with

laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks

of material misstatement in the financial statements,

recognising that the risk of not detecting a material

misstatement due to fraud is higher than the risk of not

detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are

inherent limitations in the audit procedures performed

and the further removed non-compliance with laws

and regulations is from the events and transactions

reflected in the financial statements, the less likely

we are to become aware of it.

A further description of our responsibilities is available

on the Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities. This

description forms part of our auditor’s report.

Our procedures in respect of the above included:Use of our report

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work has been

undertaken so that we might state to the Company’s

members those matters we are required to state to

them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not

accept or assume responsibility to anyone other than

the Company and the Company’s members as a body,

for our audit work, for this report, or for the

opinions we have formed.

Vanessa-Jayne Bradley

(Senior Statutory Auditor)

For and on behalf of

BDO LLP,

Statutory Auditor

London, United Kingdom

14 June 2024

BDO LLP is a limited liability partnership registered in England

and

Wales (with registered number OC305127)

60

British Smaller Companies VCT plc Annual Report & Accounts

Revenue

Notes£000

2024

Capital

£000

Total

£000

Revenue

£000

2023

Capital

£000

Total

£000

Gains on investments

held at fair value

7

-

6,045

6,045

-

8,152

8,152

Gain on disposal

of investments

7

-

4,475

4,475

-

5,213

5,213

Gain arising from the

investment portfolio

-

10,520

10,520

-

13,365

13,365

Income

2

4,045

-

4,045

1,994

-

1,994

Total

income

4,045

10,520

14,565

1,994

13,365

15,359

Administrative

expenses:

Manager’s fee

(795)

(2,384)

(3,179)

(696)

(2,086)

(2,782)

Incentive fee

-

-

-

-

(125)

(125)

Other expenses

(768)

-

(768)

(215)

-

(215)

3

(1,563)

(2,384)

(3,947)

(911)

(2,211)

(3,122)

Profit before taxation

2,482

8,136

10,618

1,083

11,154

12,237

Taxatio

n

4

-

-

-

-

-

-

Profit for the year

2,482

8,136

10,618

1,083

11,154

12,237

Total comprehensive

income for the year

2,482

8,136

10,618

1,083

11,154

12,237

Basic and diluted earnings

per ordinary share

6

1.01p

3.33p

4.34p

0.58p

5.96p

6.54p

The accompanying notes on pages 65 to 91 are an integral part of these financial

statements.

The Total column of this statement represents the Company’s Statement of Comprehensive Income, prepared in

accordance with UK adopted international accounting standards. The supplementary Revenue and Capital columns

are prepared under the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies

and Venture Capital Trusts’ (issued in July 2022 – “SORP”) published by the AIC.

Statement of

Comprehensive

Income

For the year ended 31 March

2024

FINANCIAL STATEMENTS

British Smaller Companies VCT plc Annual Report & Accounts

61

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

2024

Notes£000

2023

£000

ASSETS

Non-current assets at fair value through profit or loss

Financial assets at fair value through profit or

loss

7

128,662

127,406

Accrued income and other

assets

8

-

1,556

128,662

128,962

Current assets

Accrued income and other

assets

8

1,382

161

Current asset

investments

9

53,500

7,501

Cash at bank

9

36,304

20,766

91,186

28,428

LIABILITIES

Current liabilities

Trade and other

payables

10

(248)

(358)

Net current assets

90,938

28,070

Net assets

219,600

157,032

Shareholders’ equity

Share capital

11

28,830

20,969

Share premium account

58,293

1,700

Capital reserve

79,171

82,893

Investment holding gains and losses

reserve

7

49,207

49,215

Revenue reserve

4,099

2,255

Total shareholders’ equity

219,600

157,032

Net asset value per ordinary share

12

83.6p

83.7p

The accompanying notes on pages 65 to 91 are an integral part of these financial

statements.

The financial statements were approved and authorised for issue by the Board of Directors and were signed on its

behalf on 14 June 2024.

Rupert Cook

Chair

At 31 March

2024

Balance

Sheet

Rupert Cook

Rupert Cook (Jun 14, 2024 08:57 GMT+1)

62

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Statement of

Changes in

Equity

For the year ended 31 March

2024

Share

capital

£000

Share

premium

account

£000

Capital

reserve

£000

Investment

holding gains

and losses

reserve

£000

Revenue

reserve

£000

Total

equity

£000

Balance at 31 March 2022

20,510

62,123

33,620

41,982

1,299

159,534

-

-

-

-

-

(2,211)

-

-

1,083

-

1,083

(2,211)

Revenue return for the year

Expenses charged to capital

Investment holding gain on investments

held at fair value

Realisation of investments in the

year

-

-

-

-

-

5,213

8,152

-

-

-

8,152

5,213

Total comprehensive

income for the year

-

-

3,002

8,152

1,083

12,237

Issue of shares – DRIS

Issue costs *

Share premium cancellation

Purchase of own shares

Dividends

459

-

-

-

-

3,245

(62)

(63,606)

--

-

-

63,606

(2,497)

(15,757)

-

-

-

-

-

-

-

-

-

(127)

3,704

(62)

-

(2,497)

(15,884)

Total transactions with

owners

459

(60,423)

45,352

-

(127)

(14,739)

Realisation of prior year

investment holding gains

-

-

919

(919)

-

-

Balance at 31 March 2023

20,969

1,700

82,893

49,215

2,255

157,032

-

-

-

-

-

(2,384)

-

-

2,482

-

2,482

(2,384)

Revenue return for the year

Expenses charged to capital

Investment holding gain on investments

held at fair value

Realisation of investments in the

year

-

-

-

-

-

4,475

6,045

-

-

-

6,045

4,475

Total comprehensive income

for the year

-

-

2,091

6,045

2,482

10,618

Issue of share capital

Issue of shares – DRIS

Issue costs *

Purchase of own shares

Dividends

7,612

249

-

-

-

57,237

1,769

(2,413)

--

-

-

-

(2,869)

(8,997)

-

-

-

-

-

-

-

-

-

(638)

64,849

2,018

(2,413)

(2,869)

(9,635)

Total transactions with

owners

7,861

56,593

(11,866)

-

(638)

51,950

Realisation of prior year

investment holding gains

-

-

6,053

(6,053)

-

-

Balance at 31 March 2024

28,830

58,293

79,171

49,207

4,099

219,600

The accompanying notes on pages 65 to 91 are an integral part of these financial

statements.

British Smaller Companies VCT plc Annual Report & Accounts

63

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Capital

reserve

£000

Revenue

reserve

£000

Total

£000

Distributable reserves as shown on previous

page

79,171

4,099

83,270

Income/proceeds not yet

distributable

(1,003)

(2,131)

(3,134)

Cancelled share premium not yet

distributable

(33,612)

-

(33,612)

Reserves available for distribution**

44,556

1,968

46,524

*Issue costs include both fundraising costs and costs incurred from the Company’s

DRIS. ** Following the circulation of the Annual Report to shareholders.

The capital reserve and revenue reserve are both distributable reserves. The reserves total £83,270,000, representing

a decrease of £1,878,000 during the year. The directors also take into account the level of the investment holding

gains and losses reserve and the future requirements of the Company when determining the level of dividend

payments.

Of the potentially distributable reserves of £83,270,000 shown above, £3,134,000 relates to income and proceeds not

yet distributable and £33,612,000 relates to cancelled share premium which will become distributable from the dates

shown in the table below.

Following shareholder approval at the 2022 Annual General Meeting, in October 2022 the Company cancelled the

balance of its Share Premium, £63,606,000, of which £29,994,000 is now distributable. The remaining share premium

cancelled will be available for distribution from the following dates:

£000

1 April 202532,128

1 April 20261,484

Cancelled share premium not yet distributable33,612

For the year ended 31 March

2024

Reserves available for distribution

Under the Companies Act 2006 the capital reserve and the revenue reserve are distributable reserves. The table

below shows amounts that are available for distribution.

Statement of

Changes in

Equity

(continued)

64

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

2024

Notes£000

2023

£000

Net cash outflow from operating activities

(744)

(2,277)

Cash flows generated from (used in) investing activities

Cash maturing from fixed term deposits

-

6,970

Purchase of financial assets at fair value through profit or loss

7

(9,390)

(28,832)

Proceeds from sale of financial assets at fair value through profit or loss

7

19,625

20,716

Deferred consideration

7

96

-

Net cash inflow (outflow) from investing activities

10,331

(1,146)

Cash flows from (used in) financing activities

Issue of ordinary shares

64,849

-

Costs of ordinary share issues*

(2,413)

(62)

Purchase of own ordinary shares

(2,869)

(2,497)

Dividends paid

5

(7,617)

(12,180)

Net cash inflow (outflow) from financing activities

51,950

(14,739)

Net increase (decrease) in cash and cash equivalents

61,537

(18,162)

Cash and cash equivalents at the beginning of the year

28,267

46,429

Cash and cash equivalents at the end of the year

89,804

28,267

* Issue costs include both fundraising costs and expenses incurred from the Company’s

DRIS.

Cash and cash equivalents comprise

Money market funds

9

53,500

7,501

Cash at bank

9

36,304

20,766

Cash and cash equivalents at the end of the year

89,804

28,267

Reconciliation of Profit before Taxation

to Net Cash Outflow from Operating

Activities

2024

£000

2023

£000

Profit before

taxation*

10,618

12,237

Decrease in trade and other

payables

(110)

(429)

Increase in accrued income and other

assets

(732)

(660)

Gain on disposal of

investments

(4,475)

(5,213)

Gains on investments held at fair

value

(6,045)

(8,152)

Capitalised income

-

(60)

Net cash outflow from operating activities

(744)

(2,277)

* Includes cash inflow from dividends of £341,000 (2023: £1,117,000) and interest of £2,899,000 (2023:

£700,000).

The accompanying notes on pages 65 to 91 are an integral part of these financial

statements.

Statement

of

Cash Flows

For the year ended 31 March

2024

British Smaller Companies VCT plc Annual Report & Accounts

65

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

1. Principal Accounting Policies

Basis of Preparation

The accounts have been prepared on a going concern basis as set out in the Directors Report on pages 37

and 38 and in accordance with UK adopted international accounting standards.

The directors have carefully considered the issue of going concern in view of the Company’s activities and

associated risks. The Company has a well-diversified portfolio with businesses in a variety of sectors, many of

which are well funded. Some portfolio companies may require additional funding in the near- to medium-term; the

Company is well placed to provide this, where appropriate.

The Company has a significant level of liquidity, which was enhanced by the final allotment of the 2023/24

fundraising post-year-end, in April 2024. In addition, the Board has control over, and can flex as appropriate, the

Company’s major outgoings, which predominantly comprise investments, dividends and share buy-backs.

The directors have also assessed whether material uncertainties exist and their potential impact on the

Company’s ability to continue as a going concern; they have concluded that no such material uncertainties

exist.

Taking all of the above into consideration, the directors are satisfied that the Company has sufficient resources

to meet its obligations for at least 12 months from the date of this report and therefore believe that it is appropriate

to continue to apply the going concern basis of accounting in preparing the financial statements.

The financial statements have been prepared under the historical cost basis as modified by the measurement

of investments at fair value through profit or loss.

The accounts have been prepared in compliance with the recommendations set out in the Statement of

Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’

issued by the Association of Investment Companies (issued in July 2022 – “SORP”) to the extent that they do not

conflict with UK adopted international accounting standards.

The financial statements are prepared in accordance with UK adopted international accounting standards

(International Financial Reporting Standards (“IFRS”) and International Accounting Standards (“IAS”)) and

interpretations in force at the reporting date. From 1 January 2023 IAS 1 has been amended introducing the

concept Material Accounting Policy Information. The Company has performed a review of its existing accounting

policies and updated where relevant. Other new standards coming into force during the year and future

standards that come into effect after the year-end have not had a material impact on these financial statements.

The Company has carried out an assessment of accounting standards, amendments and interpretations that

have been issued by the IASB and that are effective for the current reporting period. The Company has

determined that the transitional effects of the standards do not have a material impact.

The financial statements are presented in sterling and all values are rounded to the nearest thousand (£000),

except where stated.

Financial Assets held at Fair Value through Profit or Loss - Investments

Financial assets designated as at fair value through profit or loss (“FVPL”) at inception are those that are

managed and whose performance is evaluated on a fair value basis, in accordance with the documented

investment strategy of the Company. Information about these financial assets is provided internally on a fair

value basis to the Company’s key management. The Company’s investment strategy is to invest cash resources

in venture capital investments as part of the Company’s long-term capital growth strategy. Consequently, all

investments are classified as held at fair value through profit or loss.

All investments are measured at fair value on the whole unit of account basis with gains and losses arising from

changes in fair value being included in the Statement of Comprehensive Income as gains or losses on

investments held at fair value. Accrued income on loans/preference shares that is rolled to exit and is not past

due, forms part of the investment’s fair value.

Transaction costs on purchases are expensed immediately through profit or

loss.

Notes to the

Financial

Statements

66

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

1.Principal Accounting Policies (continued)

Although the Company holds more than 20 per cent of the equity of certain companies, it is considered that the

investments are held as part of the investment portfolio, and their value to the Company lies in their marketable

value as part of that portfolio. These investments are therefore not accounted for using equity accounting, as

permitted by IAS 28 ‘Investments in associates’ and IFRS 11 ‘Joint arrangements’ which give exemptions from

equity accounting for venture capital organisations.

Under IFRS 10 “Consolidated Financial Statements”, control is presumed to exist when the Company has power

over an investee (whether or not used in practice); exposure or rights; to variable returns from that investee, and

ability to use that power to affect the reporting entities returns from the investees. The Company does not hold

more than 50 per cent of the equity of any of the companies within the portfolio. The Company does not control

any of the companies held as part of the investment portfolio. It is not considered that any of the holdings

represent investments in subsidiary undertakings.

Due to the above factors, the Company has applied the IFRS 10 investment entity consolidation exemption

and has not prepared consolidated financial statements.

Valuation of Investments

Unquoted investments are valued in accordance with IFRS 13 “Fair Value Measurement” and using the

International Private Equity and Venture Capital Valuation Guidelines (“the IPEV Guidelines”) updated in

December 2022. Quoted investments are valued at market bid prices. A detailed explanation of the valuation

policies of the Company is included below.

Initial Measurement

The best estimate of the initial fair value of an unquoted investment is the cost of the investment. Unless there are

indications that this is inappropriate, an unquoted investment will be held at this value within the first three months

of investment.

Subsequent Measurement

Based on the IPEV Guidelines we have identified six of the most widely used valuation methodologies for

unquoted investments. The Guidelines advocate that the best valuation methodologies are those that draw on

external, objective market-based data in order to derive a fair value.

Unquoted Investments

>Revenue multiples. An appropriate multiple, given the risk profile and revenue growth prospects of the

underlying company, is applied to the revenue of the company. The multiple is adjusted to reflect any risk

associated with lack of marketability and to take account of the differences between the investee company

and the benchmark company or companies used to derive the multiple.

> Earnings multiple. An appropriate multiple, given the risk profile and earnings growth prospects of the

underlying company, is applied to the maintainable earnings of the company. The multiple is adjusted to

reflect any risk associated with lack of marketability and to take account of the differences between the

investee company and the benchmark company or companies used to derive the multiple.

> Net assets. The value of the business is derived by using appropriate measures to value the assets and

liabilities of the investee company.

>Discounted cash flows of the underlying business. The present value of the underlying business is

derived by using reasonable assumptions and estimations of expected future cash flows and the terminal

value, and discounted by applying the appropriate risk-adjusted rate that quantifies the risk inherent in the

company.

> Discounted cash flows from the investment. Under this method, the discounted cash flow concept is

applied to the expected cash flows from the investment itself rather than the underlying business as a whole.

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

67

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

>Price of recent investment. This may represent the most appropriate basis where a significant amount of

new investment has been made by an independent third party. This is adjusted, if necessary, for factors

relevant to the background of the specific investment such as preference rights and will be benchmarked

against other valuation techniques. In line with the IPEV Guidelines the price of recent investment will

usually only be used for the initial period following the round and after this an alternative basis will be found.

Due to the significant subjectivity involved, discounted cash flows are only likely to be reliable as the main basis

of estimating fair value in limited situations. Their main use is to support valuations derived using other

methodologies and for assessing reductions in fair value.

One of the valuation methods described above is used to derive the gross attributable enterprise value of the

company after which adjustments are then made to reflect specific circumstances. This value is then apportioned

appropriately to reflect the respective debt and equity instruments in the event of a sale at that level at the

reporting date.

Listed Investment Funds

Listed investment funds are valued at active market bid price. An active market is defined as one where

transactions take place regularly with sufficient volume and frequency to determine price on an ongoing basis.

There were no listed investment funds held at 31 March 2024.

Income

Dividends and interest are received from financial assets measured at fair value through profit and loss and are

recognised on the same basis in the Statement of Comprehensive Income. This includes interest and preference

dividends rolled up and/or payable at redemption. Interest income is also received on cash, cash equivalents and

current asset investments. Dividend income from unquoted equity shares is recognised at the time when the right

to the income is established.

Expenses

Expenses are accounted for on an accruals basis. Expenses are charged through the Revenue column of the

Statement of Comprehensive Income, except for the Manager’s fee and incentive fees. Of the Manager’s fees 75

per cent are allocated to the Capital column of the Statement of Comprehensive Income, to the extent that these

relate to an enhancement in the value of the investments and in line with the Board’s expectation that over the

long term 75 per cent of the Company’s investment returns will be in the form of capital gains. The incentive fee

payable to the Manager (as set out in note 3) is charged wholly through the Capital column.

Tax relief is allocated to the Capital Reserve using a marginal

basis.

Incentive Fee

The incentive fee is accounted for on an accruals basis. As further detailed in note 3, a performance incentive fee

is payable to the Manager subject to the Company achieving both a target level of Total Return (the “Total Return

Hurdle”) and dividends (“Dividend Hurdle”). Subject to meeting the Total Return Hurdle, the Manager will receive

an amount equivalent to 20 per cent of the amount by which dividends paid per share exceeds the Dividend

Hurdle, multiplied by the number of shares in issue at the year end. The incentive fee in any financial year will be

subject to a cap if the excess of dividends paid over the Dividend Hurdle is greater than the sum of the excess of

the Total Return over the Total Return Hurdle divided by 1.2. At the end of each reporting period, an accrual is

recognised based upon the dividends paid during the financial year to date and the Total Return at the end of the

reporting period. The incentive fee is charged wholly through the Capital column.

Cash, Cash Equivalents and Current Asset Investments

Cash at bank comprises cash at hand and bank deposits with an original maturity of less than three months,

readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.

68

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

1.Principal Accounting Policies (continued)

Current asset investments comprise money market funds.

Cash and cash equivalents include cash at hand, money market funds and bank deposits repayable on up to

three months’ notice as these meet the definition in IAS 7 ‘Statement of cash flows’ of a short-term highly liquid

investment that is readily convertible into known amounts of cash and subject to insignificant risk of change in

value.

Balances held in fixed term deposits which mature after three months are not classified as cash and cash

equivalents, as they do not meet the definition in IAS 7 ‘Statement of cash flows’ of short-term highly liquid

investments.

Cash and cash equivalents are valued at amortised cost, which equates to fair

value.

Cash flows classified as “operating activities” for the purposes of the Statement of Cash Flows are those arising

from the Revenue column of the Statement of Comprehensive Income, together with the items in the Capital

column that do not fall to be easily classified under the headings for “investing activities” given by IAS 7

‘Statement of cash flows’, being management and incentive fees payable to the Manager. The capital cash flows

relating to the acquisition and disposal of investments are presented under “investing activities” in the Statement

of Cash Flows in line with both the requirements of IAS 7 and the positioning given to these headings by general

practice in the industry.

Share Capital and Reserves

Share Capital

This reserve contains the nominal value of all shares allotted under offers for

subscription.

Share Premium

Account

This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted

under offers for subscription, to the extent that it has not been cancelled.

Capital Reserve

The following are included within this

reserve:

>Gains and losses on realisation of

investments;

>Realised losses upon permanent diminution in value of investments;

>Capital income from investments;

>75 per cent of the Manager’s fee expense, together with the related taxation effect to this reserve in

accordance with the policy on expenses in note 1 of the financial statements;

>Incentive fee payable to the Manager;

>Capital dividends paid to shareholders;

>Applicable share issue costs;

>Purchase and holding of the Company’s own shares;

and

>Credits arising from the cancellation of any share premium

account.

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

69

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Investment Holding Gains and Losses 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.

Revenue Reserve

This reserve includes all revenue income from investments along with any costs associated with the running of

the Company – less 75 per cent of the Manager’s fee expense as detailed in the Capital Reserve above.

Taxation

Due to the Company’s status as a venture capital trust and the continued intention to meet the conditions

required to comply with Chapter 3 Part 6 of the Income Tax Act 2007, no provision for taxation is required in

respect of any realised or unrealised appreciation of the Company’s investments which arises. Deferred tax is

recognised on all temporary differences that have originated, but not reversed, by the balance sheet date.

Deferred tax assets are only recognised to the extent that they are regarded as recoverable. Deferred tax is

calculated at the tax rates that are expected to apply when the asset is realised. Deferred tax assets and liabilities

are not discounted.

Dividends Payable

Dividends payable are recognised only when an obligation exists. Interim and special dividends are recognised

when paid and final dividends are recognised when approved by shareholders in general meetings.

Segmental Reporting

In accordance with IFRS 8 ‘Operating segments’ and the criteria for aggregating reportable segments, segmental

reporting has been determined by the directors based upon the reports reviewed by the Board. The directors are

of the opinion that the Company has engaged in a single operating segment - investing in equity and debt

securities within the United Kingdom - and therefore no reportable segmental analysis is provided.

Critical Accounting Estimates and Judgements

The preparation of financial statements in conformity with generally accepted accounting practice requires the

use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

financial statements and the reported amounts of revenues and expenses during the reporting period. Although

these estimates are based on management’s best knowledge of the amount, event or actions, actual results may

ultimately differ from those estimates. The estimates and assumptions that have a significant risk of causing a

material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used

to determine the fair value of investments at fair value through profit or loss, as disclosed in note 7 to the financial

statements.

The fair value of investments at fair value through profit or loss is determined by using valuation techniques. As

explained above, the Board uses its judgement to select from a variety of methods and makes assumptions that

are mainly based on market conditions at each balance sheet date.

The Board uses its judgement to select the appropriate method for determining the fair value of investments

through profit or loss.

70

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

2.Income

2024 2023

£000 £000

Dividends from unquoted

companies

9071,102

Interest on loans to unquoted

companies

218263

Income from unquoted

portfolio

1,1251,365

Income from listed investment

funds

97300

Income from investments held at fair value through profit or

loss

1,2221,665

Interest from bank deposits/money market

funds

2,823329

4,0451,994

3.Administrative Expenses

2024 2023

£000 £000

Manager’s fee

3,1792,782

Administration fee

8575

Total

payable

3,2642,857

Incentive fee

-125

Other expenses:

Trail commission paid to financial

intermediaries

14292

Directors’

remuneration

138141

General expenses

136149

Listing and registrar

fees

8980

Auditor’s remuneration - audit of the financial

statements (excluding irrecoverable VAT)

6664

Printing

6051

Irrecoverable

VAT

5246

3,9473,605

Fair value movement related to credit

risk

-(483)

3,9473,122

Ongoing charges figure

1.85%2.12%

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

71

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Directors’ remuneration comprises only short-term benefits including social security contributions of £12,000

(2023: £13,000).

The directors are the Company’s only key management

personnel.

No fees are payable to the auditor in respect of other services (2023:

£nil).

YFM Private Equity Limited provides management services to the Company under an investment agreement (IA)

dated 28 February 1996 as varied by agreements dated 1 July 2009, 16 November 2012, 17 October 2014, 24

August 2015 and 18 November 2019. The agreement may be terminated by not less than 12 months’ notice

given by either party at any time. No notice has been issued to or by YFM Private Equity Limited terminating the

contract as at the date of this Report.

The key features of the IA

are:

>YFM Private Equity Limited receives a Manager’s fee, calculated at half-yearly intervals as at 31 March and

30 September, at the rate of 2.0 per cent of gross assets less current liabilities. The fee is allocated between

capital and revenue as described in note 1. The fee is payable quarterly in advance;

>With effect from 1 April 2019 the annual fee payable to the Manager is 1.0 per cent on all surplus cash,

defined as all cash above £7.5 million. The annual fee on all other assets will be 2.0 per cent of net

assets per annum. Based on the Company’s net assets at 31 March 2024 of £219,600,000 and cash and

cash equivalents of £89,804,000 at that date, this equates to approximately £3,569,000 per annum;

>Under the IA YFM Private Equity Limited also provides administrative and secretarial services to the

Company for a fee of £35,000 per annum (at 28 February 1996) plus annual adjustments to reflect

movements in the Retail Prices Index. This fee is charged fully to revenue, and totalled £85,000 for the year

ended 31 March 2024 (2023: £75,000); and

>YFM Private Equity Limited shall bear the annual operating costs of the Company (including the fees set

out above but excluding any payment of the performance incentive fee, details of which are set out below

and excluding VAT and trail commissions payable to financial intermediaries) to the extent that those

costs exceed 2.9 per cent of the net asset value of the Company. The excess expenses during the year

payable to the Company from YFM Private Equity Limited amounted to £nil (2023: £nil).

When the Company makes investments into its unquoted portfolio the Manager charges that investee an

advisory fee or arrangement fee, calculated by applying a percentage to the investment amount. The Company

and the Manager have agreed that, if the average of the relevant fees during the Company’s financial year

exceeds 3.0 per cent of the total invested into new portfolio companies and 2.0 per cent into follow-on holdings

this excess will be rebated to the Company. As at 31 March 2024, the Company was due a rebate from the

Manager of £nil (2023: £1,320).

The total remuneration payable to YFM Private Equity Limited under the IA in the period was £3,264,000

(2023: £2,857,000).

Monitoring and directors’ fees the Manager receives from the investee companies are limited to a maximum of

£40,000 (excluding VAT) per annum per company.

Under the IA, YFM Private Equity Limited is entitled to receive fees from investee companies in respect of the

provision of non-executive directors and other advisory services. YFM Private Equity Limited is responsible for

paying the due diligence and other costs incurred in connection with proposed investments which for whatever

reason do not proceed to completion. In the year ended 31 March 2024 the fees receivable by YFM Private

Equity Limited from investee companies which were attributable to advisory and directors’ and monitoring fees

amounted to £1,535,000 (2023: £1,355,000).

72

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Notes to the

Financial

Statements

(continued)

3.Administrative Expenses

(continued)

A performance incentive fee is payable to the Manager subject to the Company achieving both a target level of

Total Return (the “Total Return Hurdle”) and dividends (“Dividend Hurdle”). Subject to meeting the Total Return

Hurdle, the Manager will receive an amount equivalent to 20 per cent of the amount by which dividends paid per

share exceeds the Dividend Hurdle, multiplied by the number of shares in issue at the year end. The incentive fee

in any financial year will be subject to a cap if the excess of dividends paid over the Dividend Hurdle is greater

than the sum of the excess of the Total Return over the Total Return Hurdle divided by 1.2. With effect from 31

March 2019 the Total Return Hurdle was 228.6 pence per share and the annual increase is equivalent to 4.0

pence per share, as increased or decreased by the percentage increase or decrease (if any) in RPI from 1 April

2009. For the year ended 31 March 2024 the annual increase in the Total Return Hurdle was 7.0 pence per

share.

The Dividend Hurdle was 4.0 pence per share (increasing in line with RPI) from 1 April 2009. For the year

ended 31 March 2024 the Dividend Hurdle was 7.0 pence per share.

The incentive fees payable for the years ended 31 March 2024 and 31 March 2023 were calculated as

follows:

2024

2023

Total Return Hurdle

(p)

265.50

258.20

Actual Total Return per Share before incentive fee

(p)

262.50

258.60

(Shortfall) Excess over Total Return Hurdle

(p)

(3.00)

0.40

Dividend Hurdle (p)

7.00

6.10

Actual Dividends per share

(p)

4.00

8.50

(Shortfall) Excess over Dividend Hurdle

(p)

(3.00)

2.40

Lower excess of the two hurdles

(p)

-

0.40

Fee impact reduction (divide by 1.2)

(p)

-

0.333

Performance fee per share at 20% of adjusted excess

(p)

-

0.067

Number of shares in issue

(‘000)

262,659

187,679

Incentive fee payable (£’000)

-

125

The Total Return Hurdle for the year ending 31 March 2025 is 272.75 pence per share. The Dividend Hurdle is

7.25 pence per share.

If the annual incentive fee exceeds £5.0 million then the excess is deferred until following the next year’sAnnual

General Meeting. Payment of the remainder is made five Business Days after the relevant Annual General

Meeting at which the audited accounts are presented to shareholders.

The amount of the incentive payment paid to the Manager for any one year shall, when taken with all other

relevant costs, ensure that the Company’s total costs in a single year do not exceed 5 per cent of net assets. Any

excess over the 5 per cent is carried forward to be included in the calculation of the amount that can be paid in

future years. Except with shareholder approval the maximum fee payable in any 12 month period will not exceed

£7.5 million.

There are also provisions for a compensatory fee in circumstances where the Company is taken over or the

Incentive Agreement is terminated, which is calculated as a percentage of the fee that would otherwise be

payable under the Incentive Agreement by reference to the accounting period following its termination. In this

instance 80 per cent is payable in the first accounting period after such an event, 55 per cent in the second, 35

per cent in the third and nothing is payable thereafter.

British Smaller Companies VCT plc Annual Report & Accounts

73

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Under the terms of the offer launched with British Smaller Companies VCT2 plc on 30 November 2022, YFM

Private Equity Limited was entitled to 3.0 per cent of gross subscriptions, (3.5 per cent for Applications received

from Applicants who did not invest their money through a financial intermediary advisor and invested directly into

the Company) less commissions payable to an execution-only broker or platform. The net amount paid to YFM

Private Equity Limited under this offer amounted to £1,383,000.

Under the terms of the offer launched with British Smaller Companies VCT2 plc on 20 September 2023, YFM

Private Equity Limited was entitled to 3.0 per cent of gross subscriptions, (3.5 per cent for Applications received

from Applicants who did not invest their money through a financial intermediary advisor and invested directly into

the Company) less commissions payable to an execution-only broker or platform. The net amount paid to YFM

Private Equity Limited under this offer amounted to £1,645,000.

The details of directors’ remuneration are set out in the Directors’ Remuneration Report on page 50 under the

heading “Directors’ Remuneration for the year ended 31 March 2024 (audited)”.

4.Taxation

Revenue

£000

2024

Capital

£000

Total

£000

Revenue

£000

2023

Capital

£000

Total

£000

Profit before

taxation

2,482

8,136

10,618

1,083

11,154

12,237

Profit before taxation multiplied

by standard rate of corporation

tax in UK of 19% (2023: 19%)

471

1,546

2,017

206

2,119

2,325

Effect of:

UK dividends received

(172)

-

(172)

(297)

-

(297)

Non-taxable profits on

investments

-

(1,999)

(1,999)

-

(2,539)

(2,539)

Deferred tax not

recognised

(299)

453

154

91

420

511

Tax charge

-

-

-

-

-

-

The Company has no provided or unprovided deferred tax liability in either

year.

Deferred tax assets of £4.98 million (2023: £4.75 million) calculated at 25% (2023: 25%) in respect of unrelieved

management expenses (£19.93 million as at 31 March 2024 and £19.01 million as at 31 March 2023) have not

been recognised as the directors do not currently believe that it is probable that sufficient taxable profits will be

available against which assets can be recovered.

Due to the Company’s status as a venture capital trust and the continued intention to meet with the conditions

required to comply with Section 274 of the Income Tax Act 2007, the Company has not provided for deferred tax

on any capital gains or losses arising on the revaluation or realisation of investments.

5.Dividends

Amounts recognised as distributions to equity holders in the period to 31

March:

Revenue

£000

2024

Capital

£000

Total

£000

Revenue

£000

2023

Capital

£000

Total

£000

Interim dividend for the year ended

31 March 2024 of 2.0p (2023: 2.0p)

per ordinary share

638

4,178

4,816

-

3,725

3,725

Second interim dividend for the year

ended 31 March 2024 of 2.0p

(2023: 2.0p) per ordinary share

-

4,819

4,819

-

3,736

3,736

Third interim dividend for the year

ended 31 March 2023 of 4.5p

per ordinary share

-

-

-

127

8,296

8,423

638

8,997

9,635

127

15,757

15,884

Shares allotted under

DRIS

(2,018)

(3,704)

Dividends paid in

Statement of Cash Flows

7,617

12,180

The first interim dividend of 2.0 pence per ordinary share was paid on 28 July 2023 to shareholders on the

register as at 30 June 2023.

The second interim dividend of 2.0 pence per ordinary share was paid on 8 December 2023 to shareholders on

the register as at 10 November 2023.

An interim dividend of 2.0 pence per ordinary share, in respect of the year ending 31 March 2025, will be paid on

26 July 2024 to shareholders on the register on 28 June 2024. This dividend was not recognised in the year

ended 31 March 2024 as the obligation did not exist at the balance sheet date.

74

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

75

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

6.Basic and Diluted Earnings per Ordinary

Share

The basic and diluted earnings per ordinary share is based on the profit after tax attributable to shareholders of

£10,618,000 (2023: £12,237,000) and 244,463,235 (2023: 187,113,203) ordinary shares being the weighted

average number of ordinary shares in issue during the year.

The basic and diluted revenue earnings per ordinary share is based on the revenue profit for the year attributable

to shareholders of £2,482,000 (2023: £1,083,000) and 244,463,235 (2023: 187,113,203) ordinary shares being

the weighted average number of ordinary shares in issue during the year.

The basic and diluted capital earnings per ordinary share is based on the capital profit for the year attributable to

shareholders of £8,136,000 (2023: £11,154,000) and 244,463,235 (2023: 187,113,203) ordinary shares being

the weighted average number of ordinary shares in issue during the year.

During the year the Company allotted 2,490,239 new ordinary shares in respect of its DRIS and 76,120,499

new ordinary shares from its fundraising.

The Company has also repurchased 3,630,656 of its own shares in the year, and these shares are held in the

capital reserve. The total of 25,638,421 treasury shares has been excluded in calculating the weighted average

number of ordinary shares for the period. The Company has no securities that would have a dilutive effect and

hence basic and diluted earnings per ordinary share are the same.

The Company has no potentially dilutive shares and consequently, basic and diluted earnings per ordinary

share are equivalent in both the year ended 31 March 2024 and 31 March 2023.

7.Financial Assets at Fair Value through Profit or Loss –

Investments

2024

£000

2023

£000

Investment portfolio

126,592

127,406

Accrued income and other

assets*

2,070

-

Financial assets at fair value through profit and

loss

128,662

127,406

* Relates to accrued income which is not past due which has been disclosed as part of the investment value. Prior year income was not included as it was not

material.

IFRS 13, in respect of financial instruments that are measured in the balance sheet at fair value, requires

disclosure of fair value measurements by level of the following fair value measurement hierarchy:

Level 1: quoted prices in active markets for identical assets or liabilities. The fair value of financial instruments

traded in active markets is based on quoted market prices at the balance sheet date. An active market is defined

as a market in which transactions for the asset or liability take place with sufficient frequency and volume to

provide pricing information on an ongoing basis. The quoted market price used for financial assets held by the

Company is the current bid price. These instruments are included in level 1 and comprise fixed income securities

classified as held at fair value through profit or loss. The Company held no such investments at 31 March 2024.

Level 2: 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 market data where it is

available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an

instrument are observable, the instrument is included in level 2. The Company held no such instruments in the

current or prior year.

Level 3: the fair value of financial instruments that are not traded in an active market (for example, investments in

unquoted companies) is determined by using valuation techniques such as revenue and earnings multiples. If

one or more of the significant inputs is not based on observable market data, the instrument is included in level

3. All of the Company’s investments fall into this category at 31 March 2024.

7.Financial Assets at Fair Value through Profit or Loss – Investments

(continued)

Each investment is reviewed at least quarterly to ensure that it has not ceased to meet the criteria of the level in

which it is included at the beginning of each accounting period. The change in fair value for the current and

previous year is recognised through profit or loss.

There have been no transfers between these classifications in either

period.

All items held at fair value through profit or loss were designated as such upon initial

recognition.

Valuation of Investments

Full details of the methods used by the Company are set out in note 1 of these financial statements. Where

investments are held in listed investment funds, fair value is set at the market bid price.

Movements in investments at fair value through profit or loss during the year to 31 March 2024 are

summarised as follows:

IFRS 13 measurement classification

Level 3

Level 1

Unquoted

Investments

£000

Listed

Investment

Funds

£000

Total

Investments

£000

Opening cost

73,515

4,676

78,191

Opening investment holding gain

(loss)

49,846

(631)

49,215

Opening fair value at 1 April 2023

123,361

4,045

127,406

Additions at cost

9,140

250

9,390

Disposal proceeds

(16,523)

(4,105)

(20,628)

Net profit (loss) on

disposal*

4,569

(190)

4,379

Change in fair value

6,561

-

6,561

Foreign exchange loss

(516)

-

(516)

Closing fair value at 31 March 2024

126,592

-

126,592

Closing cost

77,385

-

77,385

Closing investment holding

gain

49,207

-

49,207

Closing fair value at 31 March 2024

126,592

-

126,592

* The net profit on disposal in the table above is £4,379,000 whereas that shown in the Statement of Comprehensive Income is £4,475,000. The

difference comprises the change in the value of deferred proceeds totalling £96,000 in respect of assets which have been disposed of and are not

included within the investment portfolio at 1 April 2023.

There were no individual reductions in fair value during the year that exceeded 5 per cent of the total assets of

the Company (2023: £nil).

Level 3 valuations include assumptions based on non-observable market data, such as discounts applied either

to reflect changes in fair value of financial assets held at the price of recent investment, or to adjust revenue and

earnings multiples. IFRS 13 requires an entity to disclose quantitative information about the significant

unobservable inputs used. Of the Company’s level 3 investments, 91 per cent are held on a revenue multiple

basis and 7 per cent on an earnings multiple basis, which have significant judgement applied to the valuation

inputs. The table on page 77 sets out the range of Revenue Multiple (RM), Earnings Multiple (EM), and discounts

applied in arriving at investments valued on these bases. The remaining 2 per cent are valued based on net asset

value reviewed for change in fair value.

76

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

77

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Application

Revenue Multiple inputsSoftware

Cloud &

DevOpsData

NewRetail &

MediaBrands

Tech-enabled

Services

2024 Revenue Multiple Range4.77-6.672.51-6.67 4.77-15.15 0.97-6.301.181.60-6.30

Revenue Multiple

Weighted Average6.476.3212.412.591.185.30

2023 Revenue Multiple Range4.73-6.592.52-6.30 4.73-11.28 1.26-6.590.97-1.411.90-6.59

Revenue Multiple

Weighted Average6.265.7610.213.561.225.39

2024 Combined RM and/or

Marketability Discount

Range20%-76%36%-44% 20%-44% 20%-68%24%20%-68%

Combined RM and/or

Marketability Discount

Weighted Average47%41%24%35%24%39%

2023 Combined RM and/or

Marketability Discount

Range24%-56%36%-65% 0%-56%28%-52%24%-56% 36%-68%

Combined RM and/or

Marketability Discount

Weighted Average48%44%9%38%42%44%

BusinessNew

Earnings Multiple inputsServicesMedia

Retail &

Brands

Tech-enabled

Services

2024 Earnings Multiple

6.676.33

8.0915.21

Earnings Multiple Weighted Average

6.676.33

8.0915.21

2023 Earnings Multiple Range

6.15-8.406.74

n/a15.54

Earnings Multiple Weighted

Average

7.526.74

n/a15.54

2024 Combined EM and Marketability Discount

28%20%

28%36%

Combined EM and Marketability Discount

Weighted Average

28%20%

28%36%

2023 Combined EM and Marketability Discount Range

20%-48% 36%

n/a56%

Combined EM and Marketability Discount

Weighted Average

33%36%

n/a56%

7.Financial Assets at Fair Value through Profit or Loss – Investments

(continued)

The standard also requires disclosure, by class of financial instruments, if the effect of changing one or more

inputs to reasonably possible alternative assumptions would result in a significant change to the fair value

measurement. Each unquoted portfolio company has been reviewed in order to identify the sensitivity of the

valuation methodology to using alternative assumptions, which still fall within the IPEV Guidelines (see page 66).

Where discounts have been applied (for example to revenue/earnings levels or multiple ratios) alternatives have

been considered. For each unquoted investment, two scenarios have been modelled, principally a 5 per cent

change to discount rates, although other factors were considered on an individual portfolio company basis: more

prudent assumptions (downside case) and more optimistic assumptions (upside case). Applying the downside

case, the value of the unquoted investments would be £5.2 million or 4.1 per cent lower (2023: £4.7 million or 3.8

per cent lower). Using the upside case, the value would be increased by £5.5 million or 4.3 per cent (2023: £4.8

million or 3.9 per cent).

Movements in investments at fair value through profit or loss during the previous year to 31 March 2023 are

summarised as follows:

IFRS 13 measurement classification

Level 3

Level 1

Unquoted

Investments

£000

Listed

Investment

Funds

£000

Total

Investments

£000

Opening cost

59,265

4,618

63,883

Opening investment holding

gain

41,894

88

41,982

Opening fair value at 1 April 2022

101,159

4,706

105,865

Additions at cost

28,326

506

28,832

Capitalised income

60

-

60

Disposal proceeds

(20,365)

(351)

(20,716)

Net profit (loss) on

disposal

5,273

(60)

5,213

Change in fair value

7,098

(756)

6,342

Foreign exchange gain

1,810

-

1,810

Closing fair value at 31 March 2023

123,361

4,045

127,406

Closing cost

73,515

4,676

78,191

Closing investment holding gain

(loss)

49,846

(631)

49,215

Closing fair value at 31 March 2023

123,361

4,045

127,406

78

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

79

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The following disposals took place in the

year:

Net proceeds

from sale

£000

Opening

carrying

value as at

Cost 1 April 2023

£000 £000

Profit (loss)

on disposal

£000

Unquoted investments:

Displayplan Holdings

Limited

9,636

1307,901

1,735

E2E Engineering Limited

1,960

9001,200

760

Ncam Technologies

Limited

1,682

2,5121,659

23

Macro Art Holdings

Limited

1,484

481558

926

KeTech Holdings

Limited*

1,461

-593

868

Arcus Global Limited*

300

1,24543

257

Total from portfolio

16,523

5,26811,954

4,569

Wakefield Acoustics (via Malvar Engineering

Limited)

96

--

96

Deferred consideration

96

--

96

Listed investment

funds**

4,105

4,9284,295

(190)

Total from investment portfolio***

20,724

10,19616,249

4,475

* Partial realisation.

** Opening value includes further investments made during the

year.

*** The total from disposals in the year in the table above is £20,724,000 whereas that shown in the Statement of Cash flows is £19,721,000. The difference comprises

deferred proceeds of £1,003,000 which will be received in subsequent years.

7.Financial Assets at Fair Value through Profit or Loss – Investments

(continued) The following disposals took place in the year to 31 March 2023:

Net proceeds

from sale

£000

Opening

carrying

value as at

Cost 1 April 2022

£000 £000

Profit

(loss)

on disposal

£000

Unquoted investments:

Springboard Research Holdings

Limited

8,673

2,8226,638

2,035

Intelligent Office UK (IO Outsourcing Limited t/a Intelligent Office)6,1192,934

5,0511,068

Vuealta Group Limited*4,6012,954

3,1631,438

Wakefield Acoustics (via Malvar Engineering Limited)9721,080

-972

Arraco Global Markets Limited*-2,670

240(240)

Seven Technologies Holdings Limited-1,677

--

Total from portfolio

20,36514,13715,0925,273

Listed investment

funds

351447411(60)

Total from investment portfolio

20,71614,58415,5035,213

* Opening carrying value includes further investments made during the

year.

80

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

81

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Significant Interests

YFM Private Equity Limited, the Company’s Manager, also acts as manager to certain other funds that have

invested in some of the companies within the current portfolio of the Company. Details of these investments are

summarised in the tables below.

At 31 March 2024 the Company held a significant holding of at least 20 per cent of the issued ordinary share

capital, either individually or alongside commonly managed funds, in the following companies:

Company

Principal activity

No of shares

held by the

Company

Percentage

of class held

by the

Company*

Percentage of

class held by

commonly

managed

funds*

ACC Aviation Group Limited**

Arcus Global Limited

AutomatePro Limited

EL Support Services Limited**

Elucidat Ltd

Force24 Ltd

KeTech Technology Holdings

Limited NB Technology Services

Limited** OC Engineering Services

Limited** Outpost VFX Limited

Quality Clouds Limited

Business Services

Application Software

Cloud & DevOps

Investment Company

Application Software

Application Software

Tech-enabled Services

Investment Company

Investment Company

New Media

Cloud & DevOps

Data

Tech-enabled Services

Investment Company

Data

220,000

103,331

63,848

3,500

6,039

35,678

128,333

3,500

3,500

5,993,778

410,927

34,068

432,650

3,500

39,514

28%

21%

11%

50%

15%

20%

12%

50%

50%

17%

13%

15%

15%

50%

20%

69%

37%

25%

100%

25%

39%

35%

100%

100%

35%

29%

35%

25%

100%

40%

Panintelligence (via Paninsight Limited)

Relative Insight Limited

SH Healthcare Services Limited**

SharpCloud Software Limited

Sipsynergy

(via Hosted Network Services

Limited)**

SP Manufacturing Services Limited**

Tonkotsu Limited

Traveltek Group Holdings Limited

Unbiased EC1 Limited

Vuealta Holdings Limited**

Vypr Validation Technologies

Limited Wooshii Limited

Cloud & DevOps

Investment Company

Retail & Brands

Application Software

Tech-enabled Services

Tech-enabled Services

Tech-enabled Services

New Media

7,316,668

3,500

50,493

41,420

1,547,601

90,884

19,854

1,458,310

24%

50%

18%

15%

19%

28%

19%

20%

62%

100%

38%

42%

35%

51%

32%

37%

* Fully diluted holding.

** The registered office of these significant holdings is given on the inside back

cover.

7.Financial Assets at Fair Value through Profit or Loss – Investments

(continued)

The amounts shown below are the net cost of investments as at 31 March 2024 and exclude those companies

which are in receivership or liquidation.

British Smaller

Companies

VCT plc

£000

British Smaller

Companies

VCT2 plc £000

Other commonly

managed

funds Total

£000 £000

ACC Aviation Group Limited

Arcus Global Limited

AutomatePro Limited

Biorelate Limited Biz2Mobile

Limited DrDoctor (via ICNH

Limited) Eikon Holdco

Limited

EL Support Services Limited

Elucidat Ltd

Force24 Ltd Frescobol

Carioca Ltd

GEEIQ (via Checkpoint GG Limited)

Intamac Systems Limited

KeTech Technology Holdings

Limited Matillion Limited

NB Technology Services Limited

OC Engineering Services Limited

Outpost VFX Limited

Panintelligence (via Paninsight Limited)

Plandek Limited

Quality Clouds Limited

Relative Insight Limited

SH Healthcare Services Limited

SharpCloud Software Limited

Sipsynergy (via Hosted Network Services Ltd)

SP Manufacturing Services Limited

Summize Limited

TeraView Limited

Tonkotsu Limited

Traveltek Group Holdings Limited

Unbiased EC1 Limited

220

1,830

2,225

1,560

1,898

3,565

750

500

4,261

3,900

1,800

2,358

302

10

1,778

500

500

5,750

1,500

2,070

3,916

4,200

500

3,577

2,654

500

1,800

377

2,388

1,715

5,596

145

1,220

1,483

1,040

1,265

2,377

500

500

2,840

2,600

1,200

1,572

905

10

1,456

500

500

3,833

1,000

1,380

2,610

2,800

500

2,385

2,045

500

1,200

377

1,592

1,163

3,731

185 550

- 3,050

1,2925,000

-2,600

-3,163

1,031 6,973

250 1,500

- 1,000

- 7,101

1,300 7,800

500 3,500

- 3,930

- 1,207

10 30

549 3,783

- 1,000

- 1,000

1,917 11,500

1,000 3,500

- 3,450

1,675 8,201

- 7,000

- 1,000

1,388 7,350

1,851 6,550

- 1,000

- 3,000

- 754

995 4,975

3,580 6,458

1,22310,550

82

British Smaller Companies VCT plc Annual Report & Accounts

FINANCIAL STATEMENTS

Notes to the

Financial

Statements

(continued)

British Smaller Companies VCT plc Annual Report & Accounts

83

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

British Smaller

Companies

VCT plc

£000

British Smaller

Companies

VCT2 plc £000

Other commonly

managed

funds Total

£000 £000

Vuealta Holdings

Limited

Vypr Validation Technologies

Limited Wooshii Limited

Workbuzz Analytics Limited

Xapien (via Digital Insight Technologies

Ltd)

626

3,300

4,644

2,577

1,740

417

2,200

3,096

1,718

1,160

127 1,170

- 5,500

1,551 9,291

500 4,795

-2,900

Significant Holdings

Profit (loss)

before taxation

£million

Net assets

(liabilities)

£million

(0.72)

0.10

0.01

0.04

0.13

(1.05)

-

ACC Aviation Group Limited

EL Support Services Limited

NB Technology Services Limited

OC Engineering Services Limited

SH Healthcare Services Limited

Sipsynergy (via Hosted Network Services Ltd)

SP Manufacturing Services Limited

Vuealta Holdings Limited*

n/a

8.10

0.32

(0.11)

0.06

(0.17)

0.05

(0.98)

n/a

* Statutory accounts for this entity not yet

available.

8.Accrued Income and Other

Assets

2024 2023

£000 £000

Non-current assets:

Accrued income on financial assets

-1,556

Current assets:

Accrued income on financial assets

188

Accrued income on cash, cash equivalents and cash deposits

32039

Prepayments and other debtors

1,044114

1,382161

Non-current assets relates to income receivable on exit from the relevant investee company where this is

expected to be more than one year from the balance sheet date.

The carrying amounts of the Company’s accrued income are denominated in

sterling.

9.Current Asset Investments and Cash and Cash

Equivalents

2024 2023

£000 £000

Money market funds

53,5007,501

Current asset investments

53,5007,501

Cash at bank

36,30420,766

Cash and cash equivalents

89,80428,267

10. Trade and Other Payables

2024 2023

£000 £000

Amounts payable within one year:

Incentive fee

-125

Accrued expenses

248233

248358

An amount of £nil has been accrued within trade and other payables in relation to the performance incentive fee

for the year ended 31 March 2024 (2023: £125,000 for the year ended 31 March 2023), as further explained in

note 3.

11. Called-up Share Capital

2024 Allotted,

called-up and

fully paid

£000

2023 Allotted,

called-up and

fully paid

£000

Ordinary shares of 10 pence

Issued 288,297,782 (2023: 209,687,044)

including 25,638,421 shares held in treasury

(2023: 22,007,765)

28,830

20,969

84

British Smaller Companies VCT plc Annual Report & Accounts

Notes to the

Financial

Statements

(continued)

FINANCIAL STATEMENTS

British Smaller Companies VCT plc Annual Report & Accounts

85

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

The movements in the year were as

follows:

Price

pence

Date

Number

of shares

Share

Capital

£000

Total as at 1 April

2023

209,687,044

20,969

Issue of shares

Fundraising

85.14-89.53

4 April 2023

53,559,905

5,356

Issue of shares

DRIS

81.70

28 July 2023

1,270,231

127

Issue of shares

DRIS

80.40

8 December 2023

1,220,008

122

Issue of shares

Fundraising

81.62-85.96

30 January 2024

22,560,594

2,256

As at 31 March 2024 (including treasury shares)

288,297,78228,830

As at 31 March 2024 (excluding treasury shares)

262,659,361

The movement in the previous year to 31 March 2023 was as

follows:

Price

pence

Date

Number

of shares

Share

Capital

£000

Total as at 1 April

2022

205,095,127

20,510

Issue of sharesDRIS83.70

12 July 2022

1,029,555

103

Issue of sharesDRIS82.80

3 October 2022

1,054,908

105

Issue of sharesDRIS78.50

11 January

2023

2,507,454

251

As at 31 March 2023 (including treasury shares)

209,687,04420,969

As at 31 March 2023 (excluding treasury shares)

187,679,279

During the year the Company purchased 3,630,656 (2023: 3,172,783) of its own shares and these shares are

held on the balance sheet in the Capital Reserve. Full details of the share purchases are set out in the Directors’

Report under the heading ‘Buy-Back and Issue of Shares’. The treasury shares have been included in calculating

the number of ordinary shares in issue, and excluded in calculating the number of ordinary shares with voting

rights in issue, at 31 March 2024 and 31 March 2023.

12. Basic and Diluted Net Asset Value per Ordinary Share

The basic and diluted net asset value per ordinary share is calculated on attributable assets of £219,600,000

(2023: £157,032,000) and 262,659,361 (2023: 187,679,279) ordinary shares in issue at the year end.

The treasury shares have been excluded in calculating the number of ordinary shares in issue at 31 March

2024.

The Company has no potentially dilutive shares and consequently, basic and diluted net asset values per

ordinary share are equivalent in both the years ended 31 March 2024 and 31 March 2023.

13. Total Return per Ordinary Share

The Total Return per ordinary share is calculated on cumulative dividends paid of 178.9 pence per ordinary

share (2023: 174.9 pence per ordinary share) plus the net asset value as calculated per note 12.

14. Financial Commitments

There are no financial commitments at 31 March 2024 or 31 March 2023.

15. Events after the Balance Sheet Date

On 3 April 2024 the Company allotted the final shares from its fully subscribed 2023/24 share offer. Gross

proceeds of £36.8 million were raised, resulting in the issue of 42,588,037 ordinary shares. This increased the

number of ordinary shares issued with voting rights to 305,247,398.

Subsequent to the year end, £4.7 million has been invested into two new investments, Fuuse and

Ohalo.

16. Financial Instruments

The Company has no derivative financial instruments and has no financial asset or liability for which hedge

accounting has been used in either year. The Company classifies its financial assets as either fair value through

profit or loss or at amortised cost, and its financial liabilities, primarily accrued expenses, at amortised cost.

It is the directors’ opinion that the carrying value of financial assets and liabilities approximates their fair value.

Therefore, the directors consider all assets and liabilities to be carried at a valuation which equates to fair

value.

Investments are made in a combination of equity, fixed rate and variable rate financial instruments so as to

comply with VCT legislation and provide potential future capital growth. Surplus funds are held in bank deposits

or money market funds until suitable qualifying investment opportunities arise.

The Company has reviewed all contracts for embedded derivatives that are required to be separately accounted

for if they do not meet certain criteria set out in the standard. No embedded derivatives have been identified by

the Company.

The accounting policies for financial instruments have been applied to the items below:

Assets as per balance sheet

Other

assets at

amortised

cost

£000

2024

Assets at

fair value

through profit

or loss

£000

Other

assets at

amortised

cost

£000

2023

Assets at

fair value

through profit

or loss

£000

Non-current assets at fair value through profit or loss

Financial assets

-

128,662

-

127,406

Accrued income on financial

assets

-

-

-

1,556

Current assets

Cash and cash

equivalents

89,804

-

28,267

-

Accrued income on financial

assets

-

18

-

8

Accrued income on cash and cash

equivalents

320

-

39

-

90,124

128,680

28,306

128,970

Other assets – not financial

instruments

1,044

-

114

-

91,168

128,680

28,420

128,970

86

British Smaller Companies VCT plc Annual Report & Accounts

Notes to the

Financial

Statements

(continued)

FINANCIAL STATEMENTS

British Smaller Companies VCT plc Annual Report & Accounts

87

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Liabilities as per balance sheet

2024

Other

financial

liabilities

£000

2023

Other

financial

liabilities

£000

Trade and other

payables

(248)

(233)

Performance incentive

fee

-

(125)

(248)

(358)

Assets classified as fair value through profit or loss were designated as such upon initial

recognition.

The Company’s investing activities expose it to various types of risk that are associated with the financial

instruments and markets in which it invests. The most important types of financial risk to which the Company is

exposed are market risk, credit risk and liquidity risk. The nature and extent of the financial instruments

outstanding at the balance sheet date and the risk management policies employed by the Company are

discussed below. There have been no changes since last year in the objectives, policies, and processes for

managing and measuring risks facing the Company.

16a Market Risk

Market Price Risk

The Company invests in new and expanding businesses, the shares of which may not be traded on the stock

market. Consequently, exposure to market factors, in relation to many investments, stems from market based

measures that may be used to value unlisted investments.

The market also defines the value at which investments may be sold. Returns are therefore maximised when

investments are bought or sold at appropriate times in the economic cycle.

Market price risk arises from uncertainty about the future prices of financial instruments held in accordance with

the Company’s investment objectives. It represents the potential loss that the Company might suffer through

holding market positions in the face of market movements. In addition, the ability of the Company to purchase or

sell investments is also constrained by requirements set down for VCTs.

Of the Company’s financial assets through profit or loss, 100 per cent are in unquoted companies held at fair

value (2023: 97 per cent). The valuation methodology for these investments includes the application of externally

produced revenue and earnings multiples. Therefore the value of the unquoted element of the portfolio is also

indirectly affected by price movements on the listed market. Investments have been valued in line with the

Guidelines described within note 1. Those using revenue and earnings multiple methodologies include

judgements regarding the level of discount applied to that multiple. The effect of changing the level of discounts

applied to the multiples is considered in note 7 on page 78.

Of the Company’s financial assets through profit or loss, nil per cent (2023: 3 per cent) are investment funds

listed on the main market of the London Stock Exchange (including FCA authorised and regulated UCITS funds).

A 5 per cent increase in stock prices as at 31 March 2024 would have increased the net assets attributable to the

Company’s shareholders and the total profit for the year by £nil (2023: £202,000). An equal change in the

opposite direction would have decreased the net assets attributable to the Company’s shareholders and the total

profit for the year by an equal amount.

The largest single concentration of risk relates to the Company’s investment in Matillion Limited which constitutes

12.5 per cent (2023: 16.0 per cent) of the net assets attributable to the Company’s shareholders. The Board

seeks to mitigate this risk by diversifying the portfolio and monitors the status of all investments on an ongoing

basis. The average investment (excluding those whose value has been reduced to nil) is 1.7 per cent (2023: 2.2

per cent) of the value of net assets.

88

British Smaller Companies VCT plc Annual Report & Accounts

Notes to the

Financial

Statements

(continued)

FINANCIAL STATEMENTS

16. Financial Instruments (continued)

Comparison of Realised Proceeds to Unrealised

Valuations

The table below shows a comparison of the realised proceeds to the unrealised valuations one year prior to

sale, for all disposals of unquoted investments over the last ten years.

Full disposal

Date of Disposal

Sale

Proceeds

£000

Valuation

£000

Increase

(decrease)

£000

Waterfall Services

Limited

Dec-14

3,854

1,952

1,902

President Engineering Group

Limited

Jul-15

7,534

4,071

3,463

Insider Technologies (Holdings)

Limited

Oct-15

1,159

880

279

Callstream Group

Limited

Mar-16

785

773

12

Go Outdoors Topco

Limited

Nov-16 & Apr-

11

20,849

9,932

10,917

Cambrian Park & Leisure Homes

Limited

Mar-17

-

1,876

(1,876)

Ness (Holdings)

Limited

Mar-17

229

764

(535)

Selima Holding Company

Ltd

May-17

2,811

923

1,888

Harvey Jones Holdings

Limited

Aug-17

970

1,113

(143)

PowerOasis Limited

Sep-18

-

273

(273)

GTK (Holdco) Limited

Dec-18

3,751

2,738

1,013

Mangar Health Limited

Dec-18

5,513

3,962

1,551

Gill Marine Holdings

Limited

Dec-18

3,802

2,569

1,233

Leengate Holdings

Limited

Apr-19

1,936

1,769

167

Eikon Holdco Limited (partial

realisation)

Oct-19

6,314

2,250

4,064

Business Collaborator

Limited

Mar-20

8,085

3,662

4,423

RMS Group Holdings

Limited

Jun-20

1,446

907

539

Bagel Nash Group Limited

Oct-20

150

607

(457)

Deep-Secure Ltd

Jul-21

6,560

2,956

3,604

Arraco Global Markets

Limited

Sep-22

-

1,625

(1,625)

Intelligent Office UK (via IO Outsourcing

Limited)

Sep-22

6,119

4,600

1,519

Springboard Research Holdings

Limited

Sep-22

8,673

6,186

2,487

Vuealta Group Limited (partial

realisation)

Dec-22

4,601

3,092

1,509

Wakefield Acoustics (via Malvar Engineering

Limited)

Jan-23

1,068

278

790

Ncam Technologies

Limited

Apr-23

1,682

2,213

(531)

E2E Engineering Limited

Nov-23

1,960

1,148

812

Macro Art Holdings

Limited

Nov-23

1,484

229

1,255

Displayplan Holdings

Limited

Feb-24

9,636

7,630

2,006

Other

Dec-14 to Mar-23

94

-

94

111,06

5

70,978

40,087

British Smaller Companies VCT plc Annual Report & Accounts

89

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

Interest Rate Risk

The Company’s venture capital investments include £3,250,000 (2023: £3,385,000) of loan stock in unquoted

companies. The majority of this loan stock at 31 March 2024 is at fixed rates to guard against fluctuations in

interest rates. As a result the Company is only exposed to cash flow interest rate risk on £678,000 (2023:

£610,000) of its loan stock portfolio.

The Company has some exposure to interest rates as a result of interest earned on bank deposits and money

market funds. Other financial assets (being accrued income) and other financial liabilities (being accrued

expenses) attract no interest.

A sensitivity analysis has not been performed as the amounts involved are not considered to be significant and

the interest earned is also dependent on the level of funds held which fluctuates significantly throughout the

year.

2024

2023

Weighted

average

interest rate

£000%

Weighted

average

time for

which rate

is fixed

Months

Weighted

average

interest rate

£000%

Weighted

average

time for

which rate

is fixed

Months

Fixed rate loan stock and

preference shares

10,1239.3

51

8,2708.9

15

Cash on fixed term

deposit

--

-

6,9701.9

2

Combined

10,1239.3

51

15,2405.7

9

Exchange Rate Risk

Of the Company’s financial assets measured at fair value through profit or loss, 22 per cent (2023: 20 per cent)

are denominated in US dollars. A 5 per cent increase in the £:$ exchange rate at 31 March 2024 would have

decreased the net assets attributable to the Company’s shareholders and the total profit for the year by

£1,305,000 (2023: £1,200,000). An equal change in the opposite direction would have increased the net assets

attributable to the Company’s shareholders and the total profit for the year by £1,443,000 (2023: £1,326,000).

16b Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or

commitment that it has entered into with the Company. The Manager has in place a monitoring procedure in

respect of counterparty risk which is reviewed on an ongoing basis. The carrying amounts of financial assets

excluding equity investments total £111,559,000 (2023: £51,265,000) which best represents the maximum credit

risk exposure at the balance sheet date.

The Company does not invest in floating rate instruments other than, on occasion, unquoted loan stock. Credit

risk on unquoted loan stock held within unlisted investments is considered to be part of market risk as disclosed

above.

The fair value of other assets is not regarded as having changed due to the changes in credit risk in either

year.

Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to

unsettled transactions is considered to be small due to the short settlement period involved and the high credit

quality of the brokers used. The Board monitors the quality of service provided by the brokers used to further

mitigate this risk. Bankruptcy or insolvency of the broker may cause the Company’s rights with respect to

securities held by the broker to be delayed or limited. The Manager monitors the Company’s risk by reviewing the

broker’s internal control reports on a regular basis.

16. Financial Instruments (continued)

The only significant assets not held at fair value are cash and cash equivalents, cash on fixed term deposit and

money market funds. The funds held by the Company are held across a number of financial institutions to spread

the risk. Bankruptcy or insolvency of these financial institutions may cause the Company’s rights with respect to

the funds held by the financial institutions to be delayed or limited. The financial institutions used by the Company

are large and reputable. Should the credit quality or the financial position of the financial institutions deteriorate

significantly the Manager will move the holdings to another financial institution. Any expected credit loss

associated with the balances are considered to be highly immaterial.

The maturities of the loan stock portfolio are as

follows:

2024

£000

2023

£000

<1 year

1-2 years

2-5 years

<1 year1-2 years

2-5 years

Unquoted loan investments887

-

2,363

6001,175

1,610

An aged analysis of the unquoted loan investments included above, which are past due but not individually

impaired, is set out below. For this purpose these loans are considered to be past due when any payment due

date under the loan’s contractual terms (such as payment of interest) is received late or missed. The full value of

the loan is given even though, in some cases, the only default is in respect of interest.

20242023

< 1 year

£000

1-2 years

£000

< 1 year 1-2 years

£000 £000

Loans to investee companies past due-

-

600886

16c Liquidity Risk

The risk to the Company relates to liabilities which fall due within one year. These liabilities are deemed

immaterial and as such the risk associated with them is minimal.

The Company needs to retain enough liquid resources to support the financing needs of its investment

businesses. To meet this aim the Company places its surplus funds in a mixture of bank interest deposit accounts

and money market funds. Investments in liquid funds are held for the purpose of liquidity whilst waiting for

suitable qualifying investment opportunities to arise. The money market funds are closely monitored and could

be realised at short notice if required, although there is some risk that redemptions could be suspended in

extreme market conditions.

The Company’s liquidity risk is managed on an ongoing basis by the Manager in accordance with policies and

procedures in place. The cash requirements of the Company in respect of each investment are assessed at

monthly portfolio meetings.

The Company’s overall liquidity risks are monitored on a quarterly basis by the Board. The Company maintains

sufficient investments in cash and readily realisable securities to pay accounts payable and accrued expenses.

Of the Company’s assets 40.9 per cent (2023: 20.6 per cent) are in the form of liquid funds. There are no undrawn

committed borrowing facilities at either year end. The Company does not have a material amount of liabilities at

the year end.

90

British Smaller Companies VCT plc Annual Report & Accounts

Notes to the

Financial

Statements

(continued)

FINANCIAL STATEMENTS

British Smaller Companies VCT plc Annual Report & Accounts

91

17. Capital Management

The Company’s objectives when managing capital

are:

>To safeguard its ability to continue as a going concern, so that it can continue to provide returns for

shareholders and benefits for other stakeholders; and

>To ensure sufficient liquid resources are available to meet the funding requirements of its investments

and to fund new investments where identified.

The Company has no external debt; consequently all capital is represented by the value of share capital,

distributable and other reserves. Total shareholder equity at 31 March 2024 was £219,600,000 (2023:

£157,032,000).

In order to maintain or adjust its capital structure the Company may adjust the amount of dividends paid to

shareholders, return capital to shareholders, issue new shares or sell assets.

There have been no changes in capital management objectives or the capital structure of the business from

the previous year. The Company is not subject to any externally imposed capital requirements.

18. Related Party Transactions

Fees payable during the year to the directors and their interests in the shares of the Company are disclosed

within the Directors’ Remuneration Report on page 50. There were no amounts outstanding and due to the

directors at 31 March 2024 (2023: £nil).

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

92

British Smaller Companies VCT plc Annual Report & Accounts

COMPANY INFORMATION

BRITISH SMALLER COMPANIES VCT

PLC

No:

03134749

Notice of the

Annual General

Meeting

Ordinary Resolutions

(1)That the annual report and accounts for the year

ended 31 March 2024 be received.

(2)That the Directors’ Remuneration Report for the

year ended 31 March 2024 be approved other than

the part of such report containing the Directors’

Remuneration Policy.

(3)That Mr R Cook be re-elected as a

director.

(4)That Mr A C N Bastin be re-elected as a director.

(5)That Mr J H Cartwright be re-elected as a

director. (6)That Ms P Sapre be re-elected as a

director.

(7)That BDO LLP be re-appointed as auditor to the

Company to hold office until the conclusion of the

next general meeting at which accounts are laid

before the Company and that the directors be

authorised to fix the auditor’s remuneration.

(8)That the directors be and are hereby generally and

unconditionally authorised in accordance with

Section 551 of the Companies Act 2006 (the “Act”)

to exercise all the powers of the Company to allot

shares in the Company or to grant rights to

subscribe for or to convert any security into shares

in the Company up to an aggregate nominal

amount of £9,000,000 (representing approximately

29.5 per cent of the Ordinary share capital in issue

as at the date of this Notice), during the period

commencing on the passing of this Resolution and

expiring on the later of 15 months from the

passing of this Resolution or the conclusion of the

next Annual General Meeting of the Company

(unless previously revoked, varied or extended by

the Company in general meeting), but so that this

authority shall allow the Company to make before

the expiry of this authority offers or agreements

which would or might require shares in the

Company to be allotted, or rights to subscribe for or

to convert any security into shares to be granted,

after such expiry and the directors may allot

shares in the Company in pursuance of any

such offer or agreement notwithstanding the

expiry of such authority, and that all previous

authorities given to the directors be and they are

hereby revoked, provided that such revocation

shall not have retrospective effect.

(9)That, in addition to existing authorities, the

directors be and are hereby generally and

unconditionally authorised in accordance with

Section 551 of the Act to exercise all the powers of

the Company to allot shares in the Company up to

an aggregate nominal amount of £2,000,000 in

connection with the Company’s Dividend Re-

investment Scheme (representing approximately

6.6 per cent of the Ordinary share capital in issue

as at the date of this Notice) during the period

commencing on the passing of this Resolution

and expiring on the later of 15 months from the

passing of this Resolution or the conclusion of the

next Annual General Meeting of the Company

(unless previously revoked, varied or extended by

the Company in general meeting) but so that this

authority shall allow the Company to make, before

the expiry of this authority, any offers or

agreements which would or might require shares in

the Company to be allotted after such expiry and

the directors may allot shares in the Company in

pursuance of any such offer or agreement

notwithstanding the expiry of such authority.

Special Resolutions

(10) That the directors be and are hereby empowered in

accordance with Section 570(1) of the Act during

the period commencing on the passing of

this Resolution and expiring at the conclusion of

the Company’s next Annual General Meeting, or on

the expiry of 15 months following the passing of

this Resolution, whichever is the later, (unless

previously revoked, varied or extended by the

Company in general meeting), to allot equity

securities (as defined in Section 560 of the Act) for

cash pursuant to the general authority conferred

upon the directors in Resolution 8 above as if

Section 561 of the Act did not apply to any such

allotment provided that this power is limited to the

allotment of equity securities in connection with the

allotment for cash of equity securities up to an

aggregate nominal amount of £9,000,000, but so

that this authority shall allow the Company to make

offers or agreements before the expiry and the

directors may allot securities in pursuance of

such offers or agreements as if the powers

conferred hereby had not so expired. This

NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of the Company will be held at Thomas

House, 84 Ecclestone Square, London SW1V 1PX on 10 September 2024 at 9:30 am for the following purposes:

To consider and, if thought fit, pass the following

resolutions:

British Smaller Companies VCT plc Annual Report & Accounts

93

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

power applies in relation to a sale of shares which is

an allotment of equity securities by virtue of Section

560(3) of the Act as if in the first sentence of this

Resolution the words “pursuant to the general

authority conferred upon the directors in Resolution

8 above” were omitted.

(11) That conditional upon the passing of Resolution 9

above and in addition to existing authorities, the

directors be and hereby are empowered pursuant to

Section 571 of the Act to allot or make offers or

agreements to allot equity securities (which

expression shall have the meaning ascribed to it in

Section 560(1) of the Act) for cash pursuant to the

authority granted by Resolution 9 above, as if

Section 561 of the Act did not apply to any such

allotment and so that:

(a)reference to allotment of equity securities in

this Resolution shall be construed in

accordance with Section 560(2) of the Act;

and

(b)the power conferred by this Resolution shall

enable the Company to make any offer or

agreement before the expiry of the said

power which would or might require equity

securities to be allotted after the expiry of the

said power and the directors may allot equity

securities in pursuance of any such offer or

agreement notwithstanding the expiry of such

power.

The power provided by this Resolution shall expire

on the later of 15 months from the passing of this

Resolution or on the conclusion of the Company’s

next Annual General Meeting (unless previously

revoked, varied or extended by the Company in

general meeting).

By order of the Board

The City Partnership (UK) Limited

Company Secretary

14 June 2024

Registered office:

5th Floor, Valiant Building, 14 South Parade, Leeds LS1

5QS

Information regarding the Annual General Meeting, including the

information required by section 311A of the Companies Act 2006, is

available from www.bscfunds.com.

94

British Smaller Companies VCT plc Annual Report & Accounts

Notice of the

Annual General

Meeting (continued)

COMPANY INFORMATION

(a)Any member of the Company entitled to attend and

vote at the Annual General Meeting is also entitled

to appoint one or more proxies to attend, speak

and vote instead of that member. Any such

appointment can only be made using the

procedures set out in these notes and the notes of

the Form of Proxy. A member may appoint more

than one proxy in relation to the Annual General

Meeting provided that each proxy is appointed to

exercise the rights attached to a different share or

shares held by that member. A proxy may

demand, or join in demanding, a poll. A proxy

need not be a member of the Company but must

attend the Annual General Meeting in order to

represent their appointer. A member entitled to

attend and vote at the Annual General Meeting

may appoint the Chair or another person as their

proxy although the Chair will not speak for the

member. A member who wishes their proxy to

speak for them should appoint their own choice of

proxy (not the Chair) and give instructions directly

to that person. If you are not a member of the

Company but you have been nominated by a

member of the Company to enjoy information

rights, you do not have a right to appoint any

proxies under the procedures set out in these

notes. Please read note (k) below. Under section

319A of the Companies Act 2006, the Company

must answer any question a member asks

relating to the business being dealt with at the

Annual General Meeting unless:

•answering the question would interfere unduly

with the preparation for the Annual General

Meeting or involve the disclosure of

confidential information;

•the answer has already been given on a

website in the form of an answer to a question;

or

•it is undesirable in the interests of the

Company or the good order of the Annual

General Meeting that the question be

answered.

(b)To be valid, a Form of Proxy must be completed

and signed and with the power of attorney or other

written authority, if any, under which it is signed or

an office or notarially certified copy or a copy

certified in accordance with the Powers of Attorney

Act 1971 of such power and written authority, must

be delivered to The City Partnership (UK) Limited,

The Mending Rooms, Park Valley Mills, Meltham

Road, Huddersfield, HD4 7BH not less than 48

hours (excluding weekends and public holidays)

before the time appointed for holding the Annual

General Meeting or adjourned meeting at which the

person named in the Form of Proxy proposes to

vote. In the case of a poll taken more than 48 hours

(excluding weekends and public holidays) after it is

demanded, the document(s) must be delivered as

aforesaid not less than 24 hours (excluding

weekends and public holidays) before the time

appointed for taking the poll, or where the poll is

taken not more than 48 hours (excluding weekends

and public holidays) after it was demanded, be

delivered at (and prior to the commencement of) the

meeting at which the demand is made. If no voting

indication is given in the Form of Proxy, your proxy

will vote (or abstain from voting) as they think fit in

relation to any matter put to the Annual General

Meeting.

(c)To be valid, any Form of Proxy or other instrument

appointing a proxy, must be returned by no later

than 48 hours before the time the Annual General

Meeting is scheduled to begin, through any one of

the following methods:

i)by post, courier or (during normal business

hours only) hand to the Company’s UK

registrar at:

The City Partnership (UK) Limited

The Mending Rooms

Park Valley Mills

Meltham Road

Huddersfield

HD4 7BH;

ii)electronically through the website of the

Company’s UK registrar at

www.bscfunds.com; or

iii)in the case of shares held through CREST,

via the CREST system (see note (p) below);

(d)If you return more than one proxy appointment,

either by paper or electronic communication, the

appointment received last by the Registrar before

the latest time for the receipt of proxies will take

precedence. You are advised to read the terms

and conditionsofusecarefully.

Electronic communication facilities

areopentoall shareholders and

those who use them will not be disadvantaged.

(e)The return of a completed Form of Proxy,

electronic filing or any CREST Proxy Instruction (as

described in note (p) below) will not prevent a

shareholder from attending the Meeting and voting

in person if they wish to do so.

Notes:

Strategic Report

Financial Overview

Corporate Governance

Independent Auditor’s Report

Financial Statements

Company Information

British Smaller Companies VCT plc Annual Report & Accounts

95

(f) In order to revoke a proxy instruction a member

will need to inform the Company by sending a

signed hard copy notice clearly stating the intention

to revoke the proxy appointment to The City

Partnership (UK) Limited, The Mending Rooms,

Park Valley Mills, Meltham Road, Huddersfield,

HD4 7BH. In the case of a member which is a

company, the revocation notice must be executed

under its common seal or signed on its behalf by

an officer of the company or an attorney for the

company. Any power of attorney or any other

authority under which the revocation notice is

signed (or a duly certified copy of such power or

authority) must be included with the revocation

notice. The revocation notice must be received by

The City Partnership before the Annual General

Meeting or the holding of a poll subsequently

thereto. If a member attempts to revoke their

proxy appointment but the revocation is received

after the time specified then, subject to note (g)

directly below, the proxy appointment will remain

valid.

(g) Completion and return of a Form of Proxy will not

preclude a member of the Company from attending

and voting in person. If a member appoints a proxy

and that member attends the Annual General

Meeting in person, the proxy appointment will

automatically be terminated.

(h)Copies of the directors’ Letters of Appointment, the

Register of Directors’ Interests in the ordinary

shares of the Company, and a copy of the current

articles of association of the Company will be

available for inspection at the registered office of

the Company during usual business hours on

any weekday (weekends and public holidays

excluded) from the date of this Notice, until the end

of the Annual General Meeting and at the Annual

General Meeting venue itself for at least 15

minutes prior to and during the meeting.

(i)Pursuant to Regulation 41 of the Uncertificated

Securities Regulations 2001, the Company has

specified that only those holders of the Company’s

shares registered on the Register of Members of

the Company as at close of business on 6

September 2024 or, in the event that the

Annual General Meeting is adjourned, on the

Register of Members at close of business on the

day two days before the time of any adjourned

meeting, shall be entitled to attend and vote at the

said Annual General Meeting in respect of such

shares registered in their name at the relevant

time. Changes to entries on the

Register of Members after close of business on 6

September 2024 or, in the event that the Annual

General Meeting is adjourned, on the Register of

Members less than 48 hours before the time of any

adjourned meeting, shall be disregarded in

determining the right of any person to attend and

vote at the Annual General Meeting.

(j)As at 14 June 2024 the Company’s issued share

capital comprised 305,247,398 ordinary shares of

10 pence each with a further 25,638,421 shares

held in treasury. Those treasury shares

represented 7.7 per cent of the total issued

share capital (including treasury shares) at the

aforementioned date. Each ordinary share carries

one voting right at the Annual General Meeting of

the Company and so the total number of voting

rights in the Company as at 14 June 2024 was

305,247,398. The website referred to above will

include information on the number of ordinary

shares and voting rights.

(k)If you are a person who has been nominated under

section 146 of the Companies Act 2006 to enjoy

information rights (“Nominated Person”):

•You may have a right under an agreement

between you and the member of the

Company who has nominated you to have

information rights (“Relevant Member”) to be

appointed or to have someone else appointed

as a proxy for the Annual General Meeting;

•If you either do not have such a right or if you

have such a right but do not wish to exercise

it, you may have a right under an agreement

between you and the Relevant Member to

give instructions to the Relevant Member as

to the exercise of voting rights;

•Your main point of contact in terms of your

investment in the Company remains the

Relevant Member (or, perhaps your custodian

or broker) and you should continue to contact

them (and not the Company) regarding any

changes or queries relating to your personal

details and your interest in the Company

(including any administrative matters). The

only exception to this is where the Company

expressly requests a response from you.

(l)A company which is a member can appoint one or

more corporate representatives who may exercise,

on its behalf, all its powers as a member provided

that no more than one corporate representative

exercises powers over the same share.

96

British Smaller Companies VCT plc Annual Report & Accounts

(m) In the case of joint members, any one of them may

sign the Form of Proxy. The vote of the person

whose name stands first in the register of members

of the Company will be accepted to the exclusion

of the votes of the other joint holders.

(n)A vote withheld is not a vote in law, which means

that the vote will not be counted in the calculation

of votes for or against the resolution. If no voting

indication is given on the Form of Proxy, the proxy

will vote or abstain from voting at their discretion.

The proxy will vote (or abstain from voting) as they

think fit in relation to any other matter which is put

before the Annual General Meeting.

(o)Members may not use any electronic address

provided either in this Notice of Annual General

Meeting, or any related documents (including the

Chair’s letter and Form of Proxy), to communicate

with the Company for any purposes other than

those expressly stated.

(p)CREST members who wish to appoint a proxy or

proxies through the CREST electronic proxy

appointment service may do so by using the

procedures described in the CREST Manual.

CREST Personal Members or other CREST

sponsored members, and those CREST members

who have appointed a service provider(s), should

refer to their CREST sponsor or voting service

provider(s), who will be able to take the appropriate

action on their behalf. In order for a proxy

appointment or instruction made using the CREST

service to be valid, the appropriate CREST

message (a “CREST Proxy Instruction”) must be

properly authenticated in accordance with

Euroclear UK & Ireland’s specifications, and must

contain the information required for such

instruction, as

described in the CREST Manual (available via

www.euroclear.com/CREST).Themessage,

regardless of whether it constitutes the appointment

of a proxy or is an amendment to the instruction

given to a previously appointed proxy must, in order

to be valid, be transmitted so as to be received by

the issuer’s agent (8RA57) not less than 48 hours

(excluding weekends and public holidays) before

the time of the Annual General Meeting. For this

purpose, the time of receipt will be taken to be the

time (as determined by the time stamp applied to

the message by the CREST Application Host) from

which the issuer’s agent is able to retrieve the

message by enquiry to CREST in the manner

prescribed by CREST. After this time any change of

instructions to proxies appointed through CREST

should be communicated to the appointee through

other means.

Notice of the

Annual General

Meeting (continued)

COMPANY INFORMATION

Manager

YFM Private Equity Limited

5th Floor, Valiant Building

14 South Parade

Leeds

LS1 5QS

Registrars

The City Partnership (UK) Limited

The Mending Rooms

Park Valley Mills

Meltham Road

Huddersfield

HD4 7BH

Solicitors

Howard Kennedy LLP

No.1 London Bridge

London

SE1 9BG

Stockbrokers

Panmure Gordon (UK) Limited

One New Change

London

EC4M 9AF

Promoter

RAM Capital Partners LLP

18 Soho Square

London

W1D 3QL

Independent Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

VCT Status Adviser

Philip Hare & Associates LLP

6 Snow Hill

London

EC1A 2AY

Bankers

Santander UK plc

44 Merrion Street

Leeds

LS2 8JQ

Company Secretary

The City Partnership (UK) Limited

The Mending Rooms

Park Valley Mills

Meltham Road

Huddersfield

HD4 7BH

Depositary

Thompson Taraz Depositary

Limited

4th Floor, Stanhope House

47 Park Lane

London

W1K 1PR

Advisers to

the

Company

Registered Offices

of Significant

Holdings

ACC Aviation Group Limited:

Belgrave House,

39-43 Monument Hill,

Weybridge,

Surrey, KT13 8RN

Investment companies:

EL Support Services Limited,

NB Technology Services Limited,

OC Engineering Services Limited,

SH Healthcare Services Limited,

SP Manufacturing Services Limited:

5th Floor, Valiant Building,

14 South Parade,

Leeds, LS1 5QS

Sipsynergy Limited (via Hosted

Network Services Limited):

17 Unit 17, Tollgate Business

Centre, Eastleigh, Hampshire,

SO33 3TG

Vuealta Holdings Limited:

Harwood House,

Harwood Road,

London, SW6 4QP

bscfunds.com

Transforming small businesses

British Smaller Companies VCT plc

5th Floor, Valiant Building

14 South Parade

Leeds LS1 5QS

Telephone 0113 244 1000

Email info@yfmep.com

BSC Annual Report 31 March 2024 Final

Final Audit Report

2024-06-14

Created:

2024-06-14

By:

Marcus Karia (marcus.karia@yfmep.com)

Status:

Signed

Transaction ID:

CBJCHBCAABAA3PvKX0wjyOpWbVPCRk5yOv0D0I4iqYuf

"BSC Annual Report 31 March 2024 Final" History

Document created by Marcus Karia (marcus.karia@yfmep.com)

2024-06-14 - 7:51:21 AM GMT

Document emailed to rupert@redpenguinventures.com for signature

2024-06-14 - 7:52:43 AM GMT

Email viewed by rupert@redpenguinventures.com

2024-06-14 - 7:56:23 AM GMT

Signer rupert@redpenguinventures.com entered name at signing as Rupert Cook

2024-06-14 - 7:57:25 AM GMT

Document e-signed by Rupert Cook (rupert@redpenguinventures.com)

Signature Date: 2024-06-14 - 7:57:27 AM GMT - Time Source: server

Agreement completed.

2024-06-14 - 7:57:27 AM GMT