RNS Number : 8213V
Ventus 3 VCT PLC
03 June 2008
VENTUS 3 VCT PLC
3 June 2008
Annual Results
for the year ended 29 February 2008
The Directors of Ventus 3 VCT plc (the "Company") announce the results for the year ended 29 February 2008. A copy of the full Annual
Report and Financial Statements, which includes the Investment Manager's Report, will be posted on the Company's website www.ventusvct.com
The accounts cover the second year of investment activity of the Company. This announcement was approved by the Board on 2 June 2008.
Chairman's Statement
Net Asset Value and Results
Revenue attributable to shareholders for the year was �303,819 or 2.71 pence per share. The capital loss attributable to shareholders
for the year was �186,259 or 1.66 pence per share, resulting in a total return to shareholders for the year of �117,560 or 1.05 pence per
share. The main sources of revenue were interest earned on UK treasury bills, mezzanine loan stock investments and cash deposits. Running
costs of the Company (before irrecoverable VAT) were less than 3.6% of Net Asset Value ("NAV") in accordance with the investment management
agreement.
At 29 February 2008, the Company's NAV stood at �10.5 million or 93.8 pence per share.
Dividends
The Company declared a dividend for the half-year to 31 August 2007 of 1.00 pence per share and proposes to declare a further dividend
of 1.40 pence per share for the six months to 29 February 2008, resulting in a total dividend of 2.40 pence per share for the year. The
dividend will be paid on 14 July 2008 to all shareholders on the register at close of business on 13 June 2008.
Venture Capital Trust ("VCT") Qualifying Status
The Company continues to retain the services of PricewaterhouseCoopers LLP to review its compliance with VCT regulations.
PricewaterhouseCoopers LLP has confirmed that the Company has been in compliance with the required conditions throughout the year.
Investments
The Company's Investment Manager, Climate Change Capital Limited, continues to be actively engaged in identifying and negotiating
potential investment opportunities.
As at the date of this report, the Company has made investments and/or contractually committed to invest in thirteen companies
representing total funds invested and committed of �3.6 million.
Included in this amount is �3.1m of qualifying investments and commitments which represents 45% of the amount required to be invested in
qualifying investments by 1 March 2009 in order for the Company to comply with HM Revenue & Customs VCT regulations.
The Investment Manager is continuing to work on a number of investment opportunities in the core onshore wind sector and also with
companies utilising non-wind technologies such as landfill gas, biomass and small scale hydro-electric schemes as well as with companies
owning operational assets.
Opportunities with companies preparing planning applications for renewable energy projects are also being pursued as a means to secure
the rights to make follow on investments once planning permission has been granted.
The rate of new planning approvals in the onshore wind market has slowed in recent years and therefore the Investment Manager is
actively seeking to diversify the portfolio into other non-wind sectors. The Company has therefore recently completed its first investments
in the waste wood biomass and landfill gas power generation sectors and has also invested early stage funding into a portfolio of
hydro-electric developments. The Investment Manager expects this trend to continue whilst still focussing on good quality investment
opportunities in the core onshore wind market.
On the basis of an assessment of the potential investments in the pipeline, the Investment Manager is satisfied that sufficient projects
are available to fully invest the funds in accordance with the investment strategy and the time period required to satisfy HM Revenue &
Customs requirements in respect of maintaining the Company's VCT status.
Principal risks
Other than the inherent risk associated with investment activities, the risks described below are those which the Directors consider to
be material:
Failure to meet and maintain the investment requirements for compliance with HM Revenue & Customs VCT regulations
The Board mitigates this risk by regularly reviewing investment management activity and by obtaining pre-approval from HM Revenue &
Customs for each investment.
Inadequate control environment at service providers
The Board mitigates this risk by only appointing service providers of a high standing under agreements that set out their
responsibilities and by obtaining assurances from them that all exceptions have been reported to the Board.
Non-compliance with the Listing Rules of the Financial Services Authority, Companies Act legislation, HM Revenue & Customs VCT
regulations and other applicable regulations.
The Board mitigates this risk by employing external advisers fully conversant with applicable statutory and regulatory requirements who
report regularly to the Board on the Company's compliance.
Proposed changes to the Company's Articles of Association
It will be proposed, by resolution, at the next Annual General Meeting, to adopt new Articles of Association, primarily to take account
of changes in English company law brought about by certain provisions of the Companies Act 2006 which are already in force. A further
resolution will propose revisions to the new Articles with effect on and from 1 October 2008 (or such later date as Section 175 of the
Companies Act 2006 shall be brought into force) to cater for changes being introduced by the Companies Act 2006 relating to directors'
conflicts of interest. These resolutions will be explained in detail in the notes to the Notice of the Annual General Meeting, which is
issued with the Annual Report and Financial Statements.
David Pinckney
Chairman
2 June 2008
Income statement
for the year ended 29 February 2008
2008 2007
Revenue Capital Total Revenue Capital Total
�000 �000 �000 �000 �000 �000
Income 578 - 578 453 - 453
578 - 578 453 - 453
Expenditure
Investment management fees 78 233 311 71 214 285
Other expenses 120 - 120 106 - 106
198 233 431 177 214 391
Profit/(loss) before taxation 380 (233) 147 276 (214) 62
Tax (76) 47 (29) (54) 41 (13)
Profit/(loss) for the year 304 (186) 118 222 (173) 49
attributable to equity
shareholders
Earnings per share
Basic and diluted return per 2.71 (1.66) 1.05 2.13 (1.65) 0.47
ordinary share (p)
All revenue and capital items in the above statement derive from continuing operations.
The Company has only one class of business and derives its income from investments made.
The total column of this statement represents the Company's Income Statement, prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The supplementary revenue return and capital return columns are both prepared under
guidance published by the Association of Investment Companies.
There were no recognised gains and losses for the year other than those shown above.
Balance sheet
as at 29 February 2008
2008 2007
�000 �000
Non-current assets
Investments 1,313 169
Trade and other receivables 36 13
1,349 182
Current assets
Trade and other receivables 13 2
Cash and cash equivalents 9,177 10,416
9,190 10,418
Total assets 10,539 10,600
Current liabilities
Trade and other payables (56) (39)
Net current assets 9,134 10,379
Net assets 10,483 10,561
Equity attributable to equity holders
Ordinary share capital 2,793 2,793
Special reserve 7,803 7,803
Capital reserve - realised (359) (173)
Revenue reserve 246 138
Total equity 10,483 10,561
Basic and diluted net asset value
per ordinary share (p) 93.8 94.5
Cash flow statement
for the year ended 29 February 2008
2008 2007
�000 �000
Cash flows from operating activities
Deposit interest received 544 440
Investment management fees paid (311) (284)
Other cash payments (119) (83)
Net cash used in operating activities before taxes 114 73
Taxes paid (13) -
Net cash from operating activities 101 73
Cash flows from investing activities
Purchases of investments (1,144) (169)
Net cash used in investing activities (1,144) (169)
Cash flows from financing activities
Shares issued - 11,173
Issue costs - (577)
Dividends paid (196) (84)
Net cash (used in)/from financing activities (196) 10,512
Net (decrease)/increase in cash and cash equivalents (1,239) 10,416
Cash and cash equivalents at the beginning of the year 10,416 -
Cash and cash equivalents at the end of the year 9,177 10,416
Statement of change in equity
for the year ended 29 February 2008
Ordinary share Special reserve Capital reserve Revenue reserve Total
capital realised
�000 �000 �000 �000 �000
At 1 March 2007 2,793 7,803 (173) 138 10,561
(Loss)/profit for the year - - (186) 304 118
after tax
Total recognised income and - - (186) 304 118
expense
Dividends paid in the year - - - (196) (196)
At 29 February 2008 2,793 7,803 (359) 246 10,483
At 5 January 2006 - - - - -
Net proceeds of share issues 2,793 7,803 - - 10,596
(Loss)/profit for the period - - (173) 222 49
after tax
Total recognised income and - - (173) 222 49
expense
Dividends paid in the period - - - (84) (84)
At 28 February 2007 2,793 7,803 (173) 138 10,561
1. Accounting Policies
Accounting convention
The Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS"), which
comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), and International Accounting
Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee ("IASC") that
remain in effect, and to the extent that they have been adopted by the European Union.
The disclosures required by IFRS 1 First-time Adoption are presented in the Annual Report and Financial Statements. There were no
material differences to report between the treatment under UK Generally Accepted Accounting Practice ("UK GAAP") and IFRS.
The Financial Statements have been prepared on the historical cost basis, except for the revaluation of certain financial assets at fair
value through profit or loss. The principal accounting policies adopted are set out below. Where presentational guidance set out in the
Statement of Recommended Practice ("SORP") for investment companies issued in January 2003 and revised in December 2005 is consistent with
the requirements of IFRS, the Directors have sought to prepare the Financial Statements on a basis compliant with the recommendations of the
SORP.
Presentation of income statement
In order to better reflect the activities of the Company and in accordance with guidance issued by the Association of Investment
Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been
presented alongside the Income Statement.
Income
Income on current asset investments is stated on an accruals basis, by reference to the principal outstanding and at the effective
interest rate applicable. Interest receivable on cash and non-equity investments is accrued to the end of the year. No tax was withheld at
source on income.
Dividend income from investments is recognised when the shareholders' rights to receive payment has been established, normally the
ex-dividend date.
Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the
Income Statement, all expenses have been presented as revenue items except when expenses are split and presented partly as capital items
where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated. Accordingly the investment
management fee has been allocated 25% to revenue and 75% to capital, in order to reflect the Directors' expected long-term view of the
nature of the investment returns of the Company.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the
Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date.
The tax charge for the year is allocated between revenue return and capital return on the "marginal basis" as recommended in the SORP.
Under this basis, the benefit of tax relief on allowable expenses is allocated to revenue return unless allowable expenses exceed taxable
income in which case the benefit of the relief on the excess is credited to capital return.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets or liabilities in
the Financial Statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Due to the Company's status as a Venture Capital Trust, no provision for deferred taxation is required in respect of any realised or
unrealised appreciation in the Company's investments.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the Income Statement, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
Investments
As the Company's business is investing in financial assets with a view to profiting from their total return in the form of interest,
dividends or increases in fair values, all investments are designated as fair value through profit or loss on initial recognition. A
financial asset is designated within this category if it is acquired, managed and evaluated on a fair value basis in accordance with the
Company's documented investment policy. In the year of acquisition, investments are initially measured at cost, which is considered to be
their fair value. Thereafter, the investments are measured at subsequent reporting dates on a fair value basis in accordance with IFRS.
Investments in unquoted companies are valued in accordance with International Private Equity and Venture Capital Valuation Guidelines.
Under these guidelines, the investments are valued at fair value at the reporting date. A discounted cash flow methodology has been used to
value the assets held at the year end. There was no material difference between these valuations and cost. Gains or losses resulting from
revaluation of investments are taken to the capital column of the Income Statement.
When an investee company has gone into receivership or liquidation, the investment, although physically not disposed of, is treated as
being realised. The Company has taken the exemption permitted by IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures
from equity accounting for investments where it has significant influence or common control.
The majority of money held pending investment is invested in financial instruments with same day or two-day access and as such is
treated as cash and cash equivalents. UK treasury bills are valued at middle market prices as at the year end. There is no material
difference between the valuation at bid prices and the valuation at middle market prices.
Dividends payable
Dividends payable are recognised as distributions in the Financial Statements when the Company's liability to make payment has been
established.
2. Income
2008 2007
�000 �000
Income from investments
Mezzanine loan stock interest income 24 13
24 13
Other income
UK treasury bill income 534 376
Bank deposit interest 20 64
578 453
3. Tax on ordinary activities
2008 2007
�000 �000
(a) Tax charge for the year
Current UK corporation tax
Charged to revenue reserve 76 54
Credited to capital reserve (47) (41)
29 13
(b) Factors affecting the tax charge for the year
Revenue return before taxation 380 276
Tax charge calculated on profit before taxation at the 76 52
applicable rate of 20% (19%)
Effect of:
Capital expenses (47) (41)
Disallowable expenses - 2
29 13
4. Dividends
2008 2007
�000 �000
Amounts recognised as distributions to equity holders in the
year:
Previous period's final dividend of 0.75p per ordinary share 84 -
Current year's interim dividend of 1.00p (2007: 0.75p) per 112 84
ordinary share
196 84
The Directors recommend a final dividend of 1.40 pence per share (2007: 0.75 pence) to be paid on 14 July 2008 to all shareholders on
the register as at the close of business on 13 June 2008. The proposed final dividend is subject to approval by the shareholders at the
Annual General Meeting and has not been included as a liability in these Financial Statements.
2008 2007
�000 �000
Interim dividend for the year ended 29 February 2008 of 1.00p 112 84
(2007: 0.75p) per ordinary share
Proposed final dividend for the year ended 29 February 2008 156 84
of 1.40 p (2007: 0.75p) per ordinary share
268 168
5. Return per ordinary share
The total return per ordinary share is based on the net revenue after taxation of �117,560 (2007: �49,448) and the weighted average
number of shares in issue during the year of 11,172,954 (2007: 10,444,247).
The basic revenue return per ordinary share is based on the net revenue from ordinary activities after taxation of �303,819 (2007:
�222,161) and the weighted average number of shares in issue during the year of 11,172,954 (2007: 10,444,247).
The net capital loss per ordinary share is based on the net loss from ordinary activities after taxation of �186,259 (2007: �172,713)
and the weighted average number of shares in issue during the year of 11,172,954 (2007: 10,444,247).
There is no difference between the basic return per ordinary share and the diluted return per ordinary share because no dilutive
financial instruments have been issued.
6. Share capital
Restated
2008 2007
�000 �000
Authorised
30,000,000 ordinary shares of 25p each 7,500 7,500
7,500 7,500
�000 �000
Allotted, called up and fully paid
11,172,954 ordinary shares of 25p each 2,793 2,793
2,793 2,793
The Company has one class of share that has no right to fixed income.
In the period ended 28 February 2007, in accordance with the Articles of Association of the Company, 50,000 redeemable preference shares
of �1 each were redesignated as 200,000 ordinary shares of 25p each. This reduced the authorised non-equity share capital to nil and
increased equity share capital to 30 million shares. This was not presented correctly in the Financial Statements for the year ended 28
February 2007 therefore the comparative balance has been restated.
Ordinary Preference
shares of shares of
25p each �1.00 each
No. of shares No. of shares
As at 5 January 2006 - -
Issued during the period 29,800,000 50,000
Preference shares of �1.00 each redesignated 200,000 (50,000)
for ordinary shares of 25p each
As at 28 February 2007 (restated) 30,000,000 -
As at 29 February 2008 30,000,000 -
7. Net asset value per share
The calculation of net asset value per share as at 29 February 2008 is based on net assets of �10,483,653 (2007: �10,561,620) divided by
the 11,172,954 (2007: 11,172,954) ordinary shares in issue at that date.
8. Post balance sheet events
After the year end, the Company has invested �250,000 in PBM Power Limited, �75,000 in Osspower Limited, �30,000 in Spurlens Rig Wind
Limited and �6,000 in Stalham Wind Power Limited. The Company has committed to invest a further �250,000 in Redimo LFG Limited before the
end of 2008 and make follow-on investments of �1,000,000 in Achairn Energy Limited, �400,000 in A7 Lochhead Limited, �210,000 in Redeven
Energy Limited, �75,000 in Osspower Limited and �15,000 in Spurlens Rig Wind Limited.
9. Related party transactions
The Company retains as its Investment Manager Climate Change Capital Limited, a subsidiary of Climate Change Holdings Limited, which is
a subsidiary of Climate Change Capital Group Limited. During the year, �310,757 (2007: �284,299) was paid to the Investment Manager,
inclusive of irrecoverable VAT. At the year end, a balance of �nil (2007: �nil) was due from the Investment Manager.
The investee companies in which the Company has a shareholding of 20% or more are related parties. The aggregate balances at the balance
sheet date are summarised below.
2008 2007
�000 �000
Investments - shares 630 -
Investments - mezzanine loan stock 130 -
Notes:
This announcement is a summary of the Company's statutory accounts.
The Annual Report and Financial Statements for the year ended 29 February 2008 were approved by the Board of Directors on 2 June 2008
and will be filed with the Registrar of Companies further to adoption at the Annual General Meeting. The independent Auditor's Report in
respect of the Financial Statements was unqualified and did not contain statements under s237(2) and (3) of the Companies Act 1985.
The statutory accounts for the year ended 28 February 2007 have been delivered to the Registrar of Companies and received an audit
report which was unqualified and did not contain statements under s237(2) and (3) of the Companies Act 1985.
The Annual Report and Financial Statements will be posted to shareholders shortly and will also be available on the Company's website
www.ventusvct.com. Copies may be obtained during normal business hours from the Company's registered office, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU.
By order of the Board
David Pinckney
Chairman
2 June 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KXLBBVQBFBBB
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