Annual Report
and Financial Statements
For the year ended 31 December 2023
Company No: 04221489
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Financial Headlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
01
Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
03
Strategic Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
05
Our Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
06
Chair’s Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
09
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Investment Manager’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Business Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
Independence, Gender and Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
Independence, Gender and Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
Details of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
Statutory Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
Directors’ Remuneration Report and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
Directors’ Responsibilities Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Independent Auditor’s Report to the Members of Seneca Growth Capital VCT Plc . . . . . . . .
62
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Combined Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
Ordinary Share Income Statement (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
B Share Income Statement (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
Combined Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
Ordinary Share Balance Sheet (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72
B Share Balance Sheet (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
Combined Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
Ordinary Shares Statement of Changes in Equity (Non-statutory Analysis) . . . . . . . . . . . . . . .
75
B Shares Statement of Changes in Equity (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . .
76
Combined Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
Ordinary Shares Statement of Cash Flows (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . .
78
B Shares Statement of Cash Flows (Non-statutory Analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
Shareholder Information and Contact Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Directors and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023 Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 S
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Financial
Headlines
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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B Shares
£2 .3m
£2 .4m
85 .7p
70 .7p
Amount raised during the year from the issue of B shares
Amount invested during the year into six investments
B share NAV plus cumulative dividends paid at 31 December 2023 (“Total Return”)
B share NAV at 31 December 2023
02
3 .0p
Interim dividends paid per B share during year
Ordinary Shares
91 .8p
18 .5p
2 .0p
Ordinary share NAV plus cumulative dividends paid at 31 December 2023 (“Total Return”)
Ordinary share NAV at 31 December 2023
Interim capital dividends paid per Ordinary share during year
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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Financial Summary
Year to 31 December 2023
Year to 31 December 2022
Ordinary share
pool
Net assets (£’000s)
1,499
B share
pool
15,393
Return on ordinary activities after
tax (£’000s)
(1,347)
(1,324)
Earnings per share (p)
Net asset value per share (p)
Dividends paid since inception (p)
Total return (NAV plus
cumulative dividends paid) (p)
(16 .6)
18 .5
73 .3
91 .8
(6 .6)
70 .7
15 .0
85 .7
Ordinary share
pool
3,008
13
0.2
37.1
71.3
108.4
B share
pool
15,122
(2,762)
(16.5)
80.7
12.0
92.7
Financial Calendar
The Company’s financial calendar is as follows:
15 May 2024
July 2024
March 2025
Annual General Meeting will be held at 11.00 a.m.
at 9 The Parks, Haydock, WA12 0JQ
Half-Yearly results to 30 June 2024 published
Annual results for the year to 31 December 2024
announced and Annual Report and Financial
Statements published
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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About Seneca Growth Capital
VCT Plc
Seneca Growth Capital VCT Plc (“the Company”,
“the VCT” or “Seneca Growth Capital”) is a Venture
Capital Trust, launched in 2001, which aims to
generate returns from a diverse portfolio of both
unquoted and AIM/AQSE quoted growth capital
investments . Until 23 August 2018 the Company
was called Hygea vct plc . On 9 May 2018, the
Company launched an offer for subscription for
a new B share class and made an initial allotment
of B shares on 23 August 2018, at which point the
Company’s name was changed to Seneca Growth
Capital VCT Plc and Seneca Partners Limited
(“Seneca”) was appointed as the Company’s
Investment Manager .
The Company has raised £21 million under the
Company’s B share offers as at 31 December 2023 .
It launched a new offer of B shares on 24 August
2023 to raise, in aggregate, up to £10 million with
an over-allotment facility of up to a further £10
million (before issue costs) (the “Offer”) and had
raised £796k under this Offer by the year end .
The Company’s Investment Manager, Seneca, is
registered as a full-scope UK Alternative Investment
Fund Manager (AIFM). The Company’s Board is
composed of five non-executive Directors, four of
whom are independent.
As the Company’s Investment Manager, Seneca is
responsible for the management of the Company’s B
share pool investments, whilst responsibility for the
management of the Ordinary share pool investments
has been delegated to those members of the Board of
Directors who served immediately prior to 23 August
2018, which is now solely John Hustler following the
retirement of Richard Roth earlier in the year.
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The Company continues to manage both share
classes in accordance with its investment policy.
The funds raised from the issue of B shares under
the Offer and any subsequent fund raisings are not
limited to being invested in any specific sector.
Instead, the Company’s B share pool targets well
managed businesses with strong leadership that can
demonstrate established and proven propositions
and which are seeking an injection of growth capital
to support their continued development. The B share
pool made two new investments and four follow-
on investments during the year, details of which are
included on pages 14 to 29. The Company intends to
distribute a proportion of the net profits it receives
from realisations of B share pool investments by
way of special tax-free dividends. This is intended to
provide B share investors with an attractive income
stream whilst also maintaining a relatively stable
Net Asset Value (“NAV”) per B share, subject to the
requirements and best interests of the Company.
The Directors continue to seek to return to Ordinary
shareholders over time the proceeds from any
realisations in the form of dividends or by means of a
return of capital.
Venture Capital Trusts (VCTs)
VCTs were introduced by the UK Government in
1995 to encourage individuals to invest in smaller
UK companies. The Government achieved this by
offering VCT investors a series of tax benefits.
The Company has been approved as a VCT by HM
Revenue & Customs (HMRC). In order to maintain
its approval, the Company must comply with certain
requirements on a continuing basis which are
discussed further in the Business Review on pages 34
to 38. The Company has continued its compliance
with these requirements during the year, and both
share classes in the Company are eligible shares as
defined by section 273 ITA 2007.
In 2015, a sunset clause for VCT income tax relief was
introduced which meant that income tax relief would
no longer be given to subscriptions made on or after 6
April 2025, unless the legislation was renewed by HM
Treasury. On 22 November 2023, the Government in
the Autumn Statement announced the extension of
the VCT and EIS sunset clause to April 2035.
Strategic Report
The Directors are required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2014
to include a Strategic Report to shareholders.
The following sections form part of the Strategic Report:
Our Strategy
Chair’s Statement
Investment Manager’s Report
Business Review
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Our Strategy
Seneca was appointed as the Company’s Investment
Manager in August 2018 and is specifically
responsible for the management of the Company’s
B share pool investments. Responsibility for the
management of the Ordinary share pool investments
has been delegated to the Commercial Advisory
Committee (“CAC”), which is made up of those
remaining members of the Board of Directors who
served immediately prior to 23 August 2018, which is
now solely John Hustler.
There has been no change during the year in the way
either share pool’s assets are managed. John Hustler
does not envisage making any new investments
from the funds in the Ordinary share pool, apart
from any follow-on investment in existing portfolio
companies where the Board believes this will protect
the Ordinary share pool’s existing investment and/
or improve the overall prospects of a timely exit
from the investee company. The Directors have not
made any new Ordinary share pool investments
during the year but will continue to monitor
portfolio companies for any follow-on investment
opportunities that are suitable should they arise and
continue to seek to return to Ordinary shareholders
over time, the proceeds from any realisations in the
form of dividends or by means of a return of capital.
The Company’s latest Offer for new B shares opened
on 24 August 2023 seeking to raise up to £10 million,
with an over-allotment facility of up to a further £10
million (before issue costs). The funds raised from
the issue of B shares will not be limited to being
invested in any specific sector. Instead, in line with
the Company’s investment policy, the Company
is targeting well managed businesses with strong
leadership that can demonstrate established and
proven propositions, and which are seeking an
injection of growth capital to support their continued
development.
The Company fosters a culture of innovation, risk
mitigation and collaboration supported by policies,
practices and behaviours to further our purpose as
an investment company, seeking to provide growth
capital to leading UK SMEs which share our values,
in order to deliver on our investment strategy and
objectives as described below. The Directors will
continually monitor and assess the investment
process and ensure compliance with both the
relevant VCT regulations for qualifying investments,
summarised below, and the Company’s investment
policy, included further below. These robust internal
controls are discussed in the Business Review on
page 38, the Corporate Governance policy on pages
49 to 52 and within the Audit Committee Report on
pages 54 to 55.
Qualifying Investments
Compliance with VCT tax rules and regulations is
considered with all investment decisions made.
The Company is further monitored on a continual
basis by Shoosmiths LLP to ensure compliance on
an ongoing basis. The main criteria to which the
Company must adhere include:
•
•
•
At least 80% of investments must be made in
qualifying shares or securities;
At least 70% of qualifying investments must be
invested into ordinary shares with no prohibited
preferential rights (investments made before 6
April 2018, from funds raised before 6 April 2011
are excluded);
At least 30% of funds raised after 31 December
2018 must be invested in qualifying investments
by the anniversary of the end of the accounting
period in which those funds were raised;
• No single investment made can exceed 15% of
the total HMRC company value at the time the
investment is made; and
In respect of VCT shares issued on or after 6
April 2014, VCT status will be withdrawn if a
dividend is paid (or other forms of distribution
or payments are made to investors) from the
capital received by the VCT from that issue
within three years of the end of the accounting
period in which shares were issued to investors.
•
Qualifying investments can only be made in trading
companies which fall within the following limits:
• Have fewer than 250 full time equivalent
employees (500 if a knowledge intensive
company);
• Have no more than £15 million of gross assets
•
at the time of investment and no more than £16
million immediately post investment;
Its first commercial sale must be less than seven
years old (or ten years if a knowledge intensive
company) if raising State Aided funds for the first
time subject to certain exceptions;
• Have raised no more than £5 million of State
Aided funds in the previous 12 months (or £10
million if a knowledge intensive company) and
less than the lifetime limit of £12 million (or £20
million if a knowledge intensive company);
Produce a business plan to show that its funds
are being raised for growth and development;
•
• Not be in financial difficulty;
•
• Have a permanent establishment in the United
Be an unquoted company or quoted on AIM;
Kingdom;
• Not be under the control of any other company,
nor control any company which is not a
qualifying subsidiary of the company; and
Are operating a trade which is not an “excluded
activity”.
•
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The Finance Act 2018 introduced a “risk-to-capital”
condition for qualifying investments, designed to
focus investments towards earlier stage, growing
businesses, and away from investments which could
be regarded as lower risk. The Board is satisfied that
the Company’s investment policy is in line with this
“risk-to-capital” condition.
The investment policy, as approved by shareholders
on 19 January 2018, is set out below and includes
the sections titled Investment Policy, Qualifying
Investments, Non-Qualifying Investments, Risk
Management, Borrowing and Changes to the
Investment Policy:
Investment Policy
The Company’s investment objective is to provide
shareholders with an attractive income and capital
return by investing its funds in a portfolio of both
unquoted and AIM/AQSE quoted UK companies
which meet the relevant criteria under the VCT rules.
The Company will target well managed businesses
with strong leadership that can demonstrate
established and proven propositions and which are
seeking an injection of growth capital to support
their continued development.
At least the minimum required percentage of the
Company’s assets will be invested in qualifying
investments as required by the VCT rules, with the
remainder held in cash and money market securities.
Qualifying Investments
Compliance with required rules and regulations is to
be considered with all investment decisions made.
The Company is further monitored on a continual
basis to ensure compliance.
Non-Qualifying Investments
An active approach is taken to manage any cash held,
both prior to its investment in qualifying companies
and in relation to any remaining cash after expenses
and all investment qualification targets in the VCT
rules have been satisfied. Any cash invested in non-
qualifying investments is done so in accordance
with VCT rules. The majority of cash held pending
investment in VCT-qualifying securities is held in
interest bearing instant access, short-notice bank
accounts and money market funds.
Risk Management
The Directors control the overall risk of the portfolio
by ensuring that the Company has exposure to a
diversified range of unquoted and AIM/AQSE quoted
companies. In order to limit risk in the portfolio that
is derived from any particular investment accounting
for too much of the fund, as per HMRC VCT rules, no
more than 15% of the portfolio by VCT value will be
in any one investment at the point of investment or
when an addition is made to an existing investment.
Further, investments may also be made by way of
loan stock and/or redeemable preference shares as
well as ordinary shares to generate income, whilst
ensuring compliance with whatever VCT rules apply
at the time.
Key Information Document
The EU PRIIPs regulations came into effect in
January 2018. The intent of the regulations is to
increase customer protection by improving the
functioning of financial markets and in this instance
through the Key Information Document (“KID”)
which provides shareholders with more information
about the risks, potential returns and charges within
VCTs. Although well intended, there were widespread
concerns about the application of some aspects of
the prescribed methodologies to VCTs. Specifically,
there were concerns that:
1.
2.
the risk indicator in the KID (a number on a scale
of 1 to 7, with 1 being “lower risk” and 7 being
“higher risk”) may have understated the level of
risk; and
investment performance scenarios included in
the KID may have indicated future returns for
shareholders that were too optimistic.
In what is one of the first examples of the Financial
Conduct Authority (“FCA”) confirming UK divergence
from EU rules following Brexit, revised requirements
for what information should be included in a KID
were published in March 2022 and these came into
full effect on 31 December 2022. Amongst other
changes, these revised requirements addressed both
of the concerns highlighted above by:
1.
2.
stating that a VCT must have a risk indicator of 6
or 7 (on the same scale of 1 to 7); and
replacing the investment performance scenarios
included with text describing:
a) what the investment risks are and what an
investor could get in return;
b) what could affect an investor’s return
positively; and
c) what could affect an investor’s return
negatively.
As before, the Company is required to publish a KID
and retail investors must be directed to this before
buying shares in the Company. The KID is published
on the Company website www.senecavct.co.uk/
current-offer/. The KID has been prepared using the
methodology prescribed in the FCA’s guidance.
The Board is aware of the new regulations regarding
the KID and has produced a revised KID in line with
the new Regulations. The Board recommends that
shareholders continue to classify VCTs as a high-risk
investment.
Borrowing
Whilst the Board does not intend that the Company
will borrow funds (other than to manage short term
cash requirements), the Company is entitled to do
so subject to the aggregate principal amount, at the
time of borrowing, not exceeding 25% of the value
of the adjusted capital and reserves of the Company
(being, in summary, the aggregate of the issued share
capital, plus any amount standing to the credit of
the Company’s reserves, deducting any distributions
declared and intangible assets and adjusting for any
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variations to the above since the date of the relevant
balance sheet). The Company did not borrow any
funds in 2023.
Changes to the Investment Policy
The Company will not make any material changes to
its investment policy without shareholder approval.
Section 172(1) Statement
The Directors discharge their duties under section
172 of the Companies Act 2006 to act in good faith
and to promote the success of the Company for the
benefit of shareholders as a whole as set out in the
Business Review from page 34. As an investment
company, Seneca Growth Capital has no employees.
The Directors assessed the impact of the Company’s
activities on other stakeholders, in particular
shareholders and our third-party advisers, as well as
the portfolio of companies.
The Board’s decision-making process incorporates,
as part of the Company’s investment policy
and investment objectives as set out on page 7,
considerations for supporting the Company’s
business relationships with the Investment Manager,
shareholders, advisers and registrar, independent
financial advisers and the impact of the Company’s
operations on the community and the environment,
which by nature of the business, only extends to the
holdings in portfolio companies.
Key Stakeholders
Investors
Outside of general meetings, the Company engages
with shareholders through regulatory news service
announcements, interim and annual reports as well
as regular correspondence with shareholders and
their advisers to address any queries that arise.
The Company also hosts biannual shareholder
presentations in addition to the AGM in order to
engage directly with shareholders. At the November
2023 Shareholder Update Presentation, the Board
had the opportunity to address three queries put
forward by shareholders, the answers to which are
available on our website www.senecavct.co.uk/
shareholder-update/november-2023/. It was a great
opportunity to engage directly with shareholders and
discuss the current portfolio, investment process and
objectives as well as the wider investment market.
Any shareholder queries that arise throughout
the year are discussed by the Board and factored
into any decision-making and responses are made
available to shareholders as appropriate. The Board
uses a number of measures to assess the Company’s
success in meeting its strategic objectives with
regard to shareholder interests as detailed in the Key
Performance Indicators on page 36.
Investment Manager
The Company’s most important business relationship
is with the Investment Manager. There is regular
contact with the Investment Manager, and members
of the Investment Manager’s Growth Capital
investment team attend all of the Company’s Board
meetings. There is also an annual timetable agreed
between the Investment Manager and the Company
for matters related to the annual timetable which are
discussed at each Board Meeting. The Company and
Investment Manager also work together to maintain
efficient operation of the VCT as detailed in the Key
Performance Indicators on page 36.
Portfolio Companies
The Company holds minority investments in its
portfolio companies and it has appointed the
Investment Manager to manage the B share portfolio,
and responsibility for the management of the
Ordinary share pool investments has been delegated
to those remaining members of the Board of
Directors who served immediately prior to 23 August
2018, which now solely comprises John Hustler.
While the Board has little day-to-day involvement
with the B share and Ordinary share portfolio, the
Investment Manager provides updates on the B share
portfolio at least quarterly and John Hustler also
provide updates on the Ordinary share portfolio at
least quarterly.
There were two investee company additions to the
B share portfolio and four B share pool follow-on
investments during the year. The Company achieved
two full and one partial exit in the year in addition to
receiving deferred consideration for the Company’s
full exit of ADC Biotechnology Limited (“ADC”) from
2021, as detailed in the Chair’s Statement on pages
9 to 12 and the Investment Manager’s Report on
pages 14 to 33. The Board and Investment Manager
believe that the profitable full realisation of the
remaining B share pool shares in quoted company
OptiBiotix Health Plc (“OptiBiotix”) and unquoted
company Qudini Limited (“Qudini”) as well as the
profitable partial realisation of Oxford BioDynamics
Plc (“Oxford BioDynamics”) were in the best interests
of all key stakeholders.
Environment and Community
The Company seeks to ensure that its business is
conducted in a responsible manner with regards
to the environment as far as is practicable given
the nature of the business as an investment
company. The management and administration
of the Company is undertaken by the Investment
Manager, who recognises the importance of its
environmental responsibilities, monitors its impact
on the environment and implements policies to
reduce any damage that might be caused by its
activities. Initiatives of the Investment Manager
designed to minimise its and the Company’s impact
on the environment include recycling and reducing
energy consumption. More details of the work that
the Investment Manager has done in this area are set
out on page 45.
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Chair’s Statement
I am pleased to present the 2023 Annual Report on
behalf of the Board to shareholders.
Overview
Seneca has remained active in the year to 31
December 2023, completing six new investments,
deploying a total £2.4 million into four follow-on
investments and two new investee companies. The
B share pool now comprises twenty-five investee
companies following two full exits achieved in the
period.
Whilst the B share NAV has decreased during the
year to 70.7p per B share (2022: 80.7p), Seneca has
continued to deliver on its investment strategy aimed
at achieving a broadly even split of both AIM/AQSE
quoted investments and unquoted investments
across a diverse spread of sectors to deliver exits and
distributions for shareholders. Whilst 2023 has been
recorded as one of the most challenging years for
venture capital exits, Seneca has remained focused on
securing exits where possible and achieved three full
and partial exits in the year, generating £1.8 million in
gross proceeds resulting in £800k of profits.
Crucially, we have continued to pay B share
dividends of 3p per annum and have now paid a total
of 15p of B share dividends since 2019 which have
been covered by profits on exits.
The carrying value of the Ordinary share pool
unquoted company portfolio has now been reduced
to £nil following the write off of the investment in Fuel
3D Technologies Limited (“Fuel 3D”), previously valued
at £59k. We do not expect to receive any further
distributions from the unquoted company portfolio.
The Ordinary share pool still holds two AIM quoted
investments being Scancell Holdings plc (“Scancell”)
and Arecor Therapeutics plc (“Arecor”), with the
Ordinary share NAV moving in line with the fluctuation
in share price of these two quoted companies. The
NAV per Ordinary share has reduced to 18.5p during
the year (2022: 37.1p per Ordinary share).
Whilst 2023 was another challenging year for AIM,
with a reduction in the FTSE AIM all-share index of
some 7%, we and Seneca, the Company’s Investment
Manager, continue to believe that the benefits
offered by AIM quoted investments, including access
to capital, greater liquidity for harvesting profits and
stronger reporting and governance requirements,
will continue to generate attractive investment
returns for investors over the medium and longer-
term. The reduction in the B share NAV was largely
driven by the movements in the share prices of
AIM quoted investments, but our relatively high
percentage of cash and cash equivalent holdings and
unquoted company portfolio continue to dilute such
impact. Seneca also believe that the B share pool’s
exposure to the AIM market will better position it
to participate more directly in any market recovery.
Financial advisers and UK experts expect the AIM
market to recover as interest rates and inflation
rates decrease, with attractive share prices for
undervalued companies increasing the investment
case for AIM, the largest growth market in Europe.
In August 2023, the Company launched its sixth offer
for B shares and has now raised £20.7 million since
2018. I would like to welcome all new shareholders
and thank both existing and new shareholders for
their support. The share offer will remain open until
16 August 2024 unless the offer is filled or closed
earlier at the discretion of the Directors.
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Cash and cash equivalents comprised 33% of the B
share pool’s NAV as at 31 December 2023 leaving
the B share pool well positioned to take advantage
of the expected increase in AIM quoted investment
opportunities and the robust pipeline of unquoted
company investment opportunities currently being
reviewed by Seneca.
I set out below further detail in relation to the
progress made by each of the Company’s share
classes during the year.
B Share Pool
B Shares – Results
The Total Return per B share decreased to 85.7p as
at 31 December 2023 (2022: 92.7p) principally as a
result of the following:
•
An unrealised loss totalling £3.3 million in the
year as a result of the share prices of a number
of B share pool AIM quoted investments
decreasing in value;
• Offset by the proceeds from three successful
exits plus a final deferred consideration payment
generating £800k of profits;
Two dividends paid during the year totalling 3.0p
per B share and amounting to £629k; and
The Company’s running costs (capped at 3% of B
share NAV), which amounted to £219k.
•
•
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B Shares - Investment Portfolio Review
The B share NAV as at 31 December 2023 was 70.7p
per share (2022: 80.7p). The B share unquoted
portfolio at the financial year end was valued above
original investment cost, with 2023 seeing an uplift in
value of two unquoted holdings, offset by a decrease
in one unquoted investment.
Despite the challenging economic conditions faced
by early-stage growth businesses, we are pleased
with the progress being made across the B share
portfolio. We have been impressed by the positive
trading updates and announcements made by
portfolio companies, such as Bright Network (UK)
Limited (“Bright Network”) and quoted company
Arecor. Bright Network completed a £5.3 million
fundraise, which will assist in its further growth and
international expansion into additional European
markets following its 2023 launch in Germany.
Arecor had a successful year of commercialisation
and revenue generating milestones under its licensed
programmes in addition to signing several new
revenue-generating technology partnerships.
In total, the B share pool completed six investments
in the year, four of which were follow-on
investments and achieved two full and one partial
exits at a weighted average return of 1.5x original
investment cost. The B share portfolio consisted of
twenty-five companies at the year end, sixteen of
which are quoted on AIM/AQSE. Further details in
relation to the B share pool’s investment portfolio
are included in the Investment Manager’s Report on
pages 18 to 29.
B Shares – Update and Outlook
B shareholders will be pleased to know the Board
declared an interim B share dividend of 1.5p per B
share on 7 March 2024 to be paid on 17 May 2024 to
shareholders on the B share register on 3 May 2024,
with an ex-dividend date of 2 May 2024.
We previously communicated our ambition to
increase dividends to 5% per annum of the B share
NAV by 2023 (subject to B share pool investment
performance and an intention to also maintain
a relatively stable NAV per B share). Whilst the
aggregate B share dividends of 3p represents a return
of 4.2% when compared to the NAV per B share as
at 31 December 2023 of 70.7p, our ambition remains
to increase dividends to 5% of the B share NAV once
performance and conditions enable us to do so.
Seneca expects to increase the funds raised through
the current B share Offer and add new growth capital
investments to the B share portfolio during the
course of 2024 from, inter alia, the investments they
currently have in the later stages of due diligence.
Ordinary Share Pool
Ordinary Shares - Results
The NAV per Ordinary share was 18.5p as at 31
December 2023 (2022: 37.1p per Ordinary share). The
NAV Total Return inclusive of cumulative dividends
paid to date was 91.8p per Ordinary share (2022:
108.4p per Ordinary share).
This decrease was principally driven by the 13.5p
decrease (56%) in the Scancell share price, 50p
decrease (22%) in the Arecor share price and the 2.0p
per Ordinary share dividend in the year. The Ordinary
share pool also wrote off its investment in Fuel 3D,
previously valued at £59k following notification
from the company in the period that it was formally
entering into creditors’ voluntary liquidation. We do
not expect to receive any shareholder distribution
from Fuel 3D at this time.
The quoted bid price of Scancell shares (the Ordinary
share pool’s largest investment) decreased from
24.0p as at 31 December 2022 to 10.5p at the year
end. The Company’s dividend paid in the period was
a distribution of exit proceeds realised in the prior
financial year. Due to the steady decline in Scancell’s
share price over the financial year, the Company
did not make any further realisation of its Scancell
holding in the year.
As previously reported, the Board remains focused
on identifying appropriate exit opportunities for the
remainder of the AIM quoted holdings.
Ordinary Shares - Investment Portfolio Review
The remaining Ordinary share portfolio now
comprises two AIM quoted holdings valued at £1.5
million, and five unquoted holdings valued at £nil as
at 31 December 2023.
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Shareholders will note that the AIM quoted holdings
represented 97% of the Ordinary share pool’s NAV
at the year end, with Scancell comprising 70% and
Arecor 27% of the Ordinary share pool NAV. As a
result, the NAV per Ordinary share now fluctuates
largely in line with the movement in the AIM quoted
investments, particularly the Scancell share price.
Based on the composition of the Ordinary share
pool’s assets as at 31 December 2023, the NAV per
Ordinary share moves by 1.2p for every 1p movement
in Scancell for reference.
Further details in relation to the Ordinary share pool’s
investment portfolio are included in the Investment
Manager’s Report on pages 30 to 33.
Ordinary Shares – Update and Outlook
As shareholders will recall, Richard Roth stayed on as
a member of the CAC for a period of three months
following his retirement from the Board at the last
AGM on 18 May 2023. Since that three-month period
ended in August 2023, I have been the sole member
of the CAC.
The Ordinary share portfolio held £214k in cash
as at 31 December 2023. This cash is available for
expenses relating to the Ordinary share portfolio
and to make follow-on investments into existing
Ordinary share portfolio companies where the
Board believes this will protect the Ordinary share
pool’s existing investment. Scancell completed a
£12 million raise during 2023, however, we did not
consider further investment from the Ordinary share
pool likely to improve the overall prospects for a
timely realisation of our Scancell investment and
therefore no further Ordinary share pool investments
were made in the year.
Ordinary shareholders will recall that, following the
appointment of Seneca as Investment Manager in
August 2018, the Ordinary share pool did not incur
any running costs until July 2021. From July 2021,
the Company’s running costs (exclusive of the B
share pool’s annual management fee) are shared
between the Ordinary and B share pool pro-rata to
their respective NAVs subject to a 3% cost cap. In the
current year, the Ordinary share pool’s proportion of
the running costs was £33k.
Fundraise and Buybacks
During the year the Company has allotted 3,139,061
B shares raising gross proceeds of £2.3 million in the
process.
During the year, the Company repurchased 108k
B shares as part of our B share buyback policy
(representing 0.5% of the net asset value as at 31
December 2023). Further details can be found in
Note 13 of the financial statements. The Board
continued to buy back shares in the period from
shareholders at no greater than a 5% discount to NAV
per B share.
Board of Directors
As shareholders may recall, we are committed
to a policy of Board succession, evident in the
appointment of Mary Anne Cordeiro and Ian Dighé to
the Board during the 2023 financial year.
In view of this policy and the length of my tenure as a
Director of the Company, having originally joined the
Board in September 2001 and subsequently serving
as Chair from July 2015, I have taken the decision
to retire from the Board. Consequently, I will not be
seeking re-election at the upcoming Annual General
Meeting.
It has been a pleasure working with Seneca and
previous Hygea vct plc Board members over the last
twenty-two years, steering the VCT through diverse
growth phases and witnessing its continual progress.
I have agreed with my fellow Board members and
Seneca that I will continue as the member of the CAC
for the foreseeable future in order to manage the
phased transfer of responsibilities for the Ordinary
share pool to the remaining members of the Board.
I am delighted to announce that Ian Dighé has
agreed to assume the role of Chair upon my
retirement at the forthcoming Annual General
Meeting and Mary Anne Cordeiro has also agreed
to be appointed as the Senior Independent Director
at that time. Alex Clarkson and Richard Manley will
continue as Directors of the Company with Alex also
continuing to serve as Chair of the Audit Committee.
I have no doubt that the continuing members
of the Board and the Company’s Fund Manager,
Seneca, have the skills and experience required to
successfully guide the Company as it continues
along its growth journey. I wish them, and all of our
shareholders, the very best for the future.
Annual General Meeting (“AGM”) and
Shareholder Event
The Company’s AGM will be held at 11:00 a.m.
on Wednesday, 15 May 2024 at the Company’s
registered address 9 The Parks, Haydock, WA12 0JQ.
For any shareholders wishing to attend the AGM this
year in person, we request that you please inform
us in advance by e-mailing enquiries@senecavct.
co.uk so that we may register your attendance with
the facilities manager in order to issue you with the
appropriate attendance pass. We will also be hosting
our bi-annual shareholder update presentation with a
question and answer (Q&A) session included, starting
at 11:00 a.m. on 7 May 2024. Shareholders should
note that only the formal business set out in the
notice of AGM will be considered at the AGM and we
encourage shareholders to attend the presentation
and ask questions prior to the AGM. Further details
about the shareholder update presentation can be
found on the Company’s website at www.senecavct.
co.uk/shareholder-update/may-2024/.
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We strongly encourage shareholders to vote on
the matters of business through the completion
of a proxy form, which can be submitted to the
Company’s Registrar. Proxy forms should be
completed and returned in accordance with the
instructions thereon and the latest time for the
receipt of proxy forms is 11:00 a.m. on 13 May 2024.
Proxy votes can also be submitted by CREST where
shares are so held.
The Notice of the AGM includes resolutions
empowering the Directors to issue further B shares
following the date of the AGM, which will primarily
be used for the issue of B shares under a further
Offer which we intend to launch for the 2024/2025
tax year. This requires authorisation for the Directors
to be able to allot up to a further 35,000,000 B
shares. Including these resolutions in the AGM
business will avoid the Company having to convene
a separate general meeting to approve the necessary
increase in share capital for our future fundraising,
which will be announced following the closure of the
current Offer.
A summary of the resolutions to be proposed by the
Company at the AGM is included on pages 47 to 48.
VCT Qualifying Status
Shoosmiths LLP provides the Board with advice
on the ongoing compliance with HMRC rules and
regulations concerning VCTs. They have confirmed
that the Company remains compliant with all the
appropriate VCT qualifying regulations as at 31
December 2023.
Fund Administration
Our administration is conducted by Seneca at the
Company’s registered address. Neville Registrars
Limited (“Neville”) continue to maintain the
shareholder register. All information in respect
of both share classes including Annual Reports
and notices of meetings can be found on our
website www.senecavct.co.uk. We would remind
shareholders who have not opted for electronic
communications that this is more efficient, cost
effective and ecologically friendly than receiving
paper copies by post and we therefore encourage
you to contact Neville, whose details are on page 97,
to advise them of your wish to switch to electronic
communication.
Auditor
As previously announced, Royce Peeling Green
Limited (“RPG”) was appointed as the Company’s
new independent auditor on 29 November 2023 and
has audited the Company’s financial statements for
the year ending 31 December 2023. Shareholders
will be asked to appoint RPG at the AGM for the audit
of the financial statements for the year ending 31
December 2024.
Outlook
Despite some continued headwinds impacting both
the AIM quoted and unquoted UK SME market,
we are hopeful that the overall market outlook
will improve over the course of 2024 as inflation
decreases and interest rates ease. We are seeing
more favourable unquoted company valuations and
increased M&A activity as a result, which for early-
stage investors presents profitable exit opportunities.
We are pleased that Seneca has continued to develop
the portfolio of B share pool investee companies
during the year, having completed six investments in
the period.
Seneca has also completed a total of ten full and
partial exits since 2019 and has over £5.1 million
of cash and cash equivalents on the B share pool
balance sheet at 31 December 2023. As a result,
Seneca believes that it is very well placed to
continue to support the existing B share investment
portfolio as well as adding attractive new growth
capital investments to the B share portfolio from
the strong pipeline of opportunities presented to
it. We therefore look forward to the continued
development of the B share portfolio.
Your Board continues to view the future of our
Company with confidence.
John Hustler
Chair
21 March 2024
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Investments
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Investment Manager’s Report
We have set out in this section further details in relation to the development of both the B and Ordinary share
pools and their respective investee companies during 2023.
The B Share Pool
Investment Activity and Performance
Seneca is pleased to have added six additional investments to the B share portfolio in the period, across various
sectors and split evenly across AIM quoted and unquoted companies. Following two full exits and one partial
exit in the year there were twenty-five investee companies at the year end. In addition to the three exits in the
year, we secured a further £279k in deferred consideration in relation to the 2021 exit of ADC. We continue to
deliver on our investment strategy of providing a diverse spread of investments for B shareholders across both
AIM/AQSE quoted companies and unquoted companies and believe that this remains the most effective strategy
to deliver our target returns.
B Share Portfolio Split
46%
54%
Unquoted investee companies
54%
AIM/AQSE quoted investee
companies
46%
* Equity split represented by value as at
31 December 2023
Whilst there has been some softening in AIM prices in the year contributing to the decrease in NAV Total Return
per B share to 85.7p as at 31 December 2023 (2022: 92.7p), the benefits offered by AIM quoted investments,
including access to capital markets, improved liquidity, stronger reporting and governance requirements as well
as the ability to participate more directly in any market recovery, mean AIM remains a core part of the B Share
portfolio and our deployment strategy.
The negative revenue return of 1.4p per B share (2022: negative 1.4p per B share) for the year is principally a
result of the impact of the Company’s running costs on the B share pool; however, shareholders will recall
that the Company’s total running expenses are capped at 3% of the B share NAV. As a result, Seneca reduced
its annual management fee for 2023 from £298k to £228k to ensure the Company’s annual running expenses
stayed within this 3% limit.
The negative capital return of 5.2p per B share (2022: negative 15.1p per B share) for the year was principally due
to the decrease in the value of the B share pool’s AIM holdings, offset by the gain on disposals for the year which
totalled £942k.
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Seneca completed one follow-on investment into B share AIM quoted company Oxford BioDynamics and
completed three follow-on investments into unquoted B share portfolio companies Old Street Labs Limited,
Alderley Lighthouse Labs Limited and Bright Network during the year. Seneca also completed two new
investments into Engage XR Holdings Plc and Velocity Composites plc. Together, these investments totalled £2.4
million (made up of £1.3 million invested into the existing B share portfolio and £1.1 million into new companies).
The total value of the B share portfolio as at 31 December 2023 is £10.4 million.
New investments made in the year:
AIM Quoted Investments
Unquoted Investments
Bio-Technology
Health & Consumer
Oxford BioDynamics is a global biotech
company advancing personalised healthcare
by developing and commercialising precision
medicine tests for life-changing diseases. It
launched its ground-breaking 94% accurate
EpiSwitch Prostate Screening blood test (PSE)
during the year and completed a c.£6 million
raise to further commercialise its PSE test and
its CiRT (Checkpoint Inhibitor Response) test
for cancer.
Manufacturing
Velocity Composites plc is a Northwest
headquartered manufacturer of advanced
composite material kits for use in the
production of carbon fibre composite parts
for primary aircraft manufacturers and Tier 1
suppliers in the US, UK and Europe.
VR Technology
Engage XR Holdings Plc is a spatial
computing and metaverse technology
platform business designed for corporate
and commercial training and events.
Alderley Lighthouse Labs is a next
generation UK diagnostic laboratory,
operating from a 3,500 square feet facility
providing first-class office and laboratory
space at Alderley Science Park in the
Northwest of England.
Software
Old Street Labs Limited is a provider of
cloud based, supplier collaboration tools for
large, blue-chip customers, enabling them
to manage key supplier relationships and
strategic project work with integrated ESG
optimisation and decarbonisation planning
and reporting tools.
HR Technology
Bright Network is a technology platform
which enables blue-chip employers to reach,
identify and recruit high-quality graduates
and young professionals across the UK and in
Europe.
The value of the B share pool’s holding in Bright Network was uplifted following its latest funding round,
having successfully raised a total of £5.3 million, which will be used to further develop its recruitment and
technology platform and to assist with further European expansion. The Company has also uplifted the value
of unquoted B share portfolio holding in Alderley Lighthouse Labs, which was driven by the completion of a
material and successful funding round in the year at an increased valuation. The net increase in the unquoted B
share portfolio was £163k, following the £99k decrease in unquoted B share portfolio company Silkfred Limited
(“Silkfred”) as a result of macroeconomic pressures and reduced consumer spending, impacting demand for
independent ladies’ fashion brands.
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Dividends
3p
per annum
15p
in total
The two B share dividends paid during the year
were in line with the Company’s dividend policy to
pay at least 3p per year and it should be noted that
the profits realised through the ten full and partial
B share portfolio exits to date exceeds the total
value of dividends paid. Furthermore, the Company
has sufficient distributable reserves to enable the
continued declaration of B share dividends over the
medium term subject to Board approval, B share
pool investment activity and liquidity levels. The
Company’s distributable reserves were bolstered by
the capital reduction undertaken during the year,
which increased special distributable reserves to
£20.5 million as at 31 December 2023.
Exits – Total exits to date have built our cumulative exit track record:
5
5
Full exits to date
Partial exits to date
£2 .9m
Profits generated
1 .8x
Average money multiple
£5 .3m
Gross exit proceeds
£2 .0m
Total cost of dividends to date
from launch to 31 December 2023
The AIM market continued to provide opportunities to both invest in new companies and de-risk existing
holdings by harvesting profits. As such we took the opportunity to fully realise our remaining investment in
OptiBiotix and to partially realise our holdings in Oxford BioDynamics.
B share pool AIM quoted investment realisations in the year:
•
•
In Q3 2023, the Company was able to realise a profitable exit for its remaining holding in OptiBiotix
providing a total return of 1.4x original investment cost.
The Company was able to sell 2,260,000 shares in Oxford BioDynamics during the year, which represented
31% of the original holding of 7,327,628 shares, reducing the remaining holding to 5,067,628 shares. These
were sold at an average share price of 39.5p per share providing a return of 2.5x versus average original
investment cost.
B share pool unquoted investment realisations in the year:
• We successfully exited Qudini in January 2023. This was the result of the sale of the company to US
software business Verint Systems, a leader in workforce engagement management. The consideration
comprised an upfront payment equal to the B share pool’s initial investment and the potential to receive
up to a further 0.44x of the initial investment subject to Qudini’s trading performance in the three years
following the sale.
• We also received £279k of deferred consideration for the 2021 full exit of B share unquoted portfolio
company ADC as a result of the company successfully achieving MHRA approval, a condition for the
further uplift in exit proceeds.
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Co-investing With Seneca EIS Funds
More generally we continue to develop Seneca’s position in the market as an active growth capital investor and
up to 31 December 2023, Seneca has raised and deployed more than £120 million of EIS and VCT capital into
over 78 SME companies, through over 140 funding rounds, since we undertook our first EIS investment in 2012.
This includes over £17 million raised and deployed to date by the B share pool, a significant proportion of which
has been co-invested with Seneca EIS funds. Seneca has recently made its 43rd exit from its EIS funds and has
now returned more than £70 million of exit proceeds to investors.
The twenty-five investments in the B share portfolio had a value of £10.4 million as at 31 December 2023 and all
but three are co-investments with EIS funds also managed by Seneca. We believe that the opportunity for the
Company’s B share pool to co-invest with EIS funds that are also managed by Seneca provides the B share pool
with a number of advantages including being able to participate in a higher number of investments, of a larger
scale, into more established businesses than would be possible for the B share pool on a standalone basis.
Further, as a result of Seneca’s position in the UK market as an active growth capital investor we maintain a
strong pipeline of investment opportunities, particularly in the North of England, with a focus on well managed
businesses with strong leadership teams that can demonstrate established and proven propositions in addition
to growth potential. We aim to invest in both unquoted and AIM/AQSE quoted companies and are pleased to
have completed three additional AIM/AQSE quoted investments in the year.
Fundraising
Our fifth B share offer concluded in August 2023, bringing total funds raised to £20.7 million. Our fundraising
efforts have since continued under our sixth B share Offer, with a further £796k being raised under this Offer as
at 31 December 2023. We are encouraged by the funds raised and remain focused on increasing the size of the B
share pool, which will in turn allow us to increase the number and diversity of new investments that we make.
Outlook
The diversity and volume of exciting new deals in
the current pipeline is a testament to the investment
management team’s ability to source and secure
opportunities and the strength of our network. We are
encouraged by the quality of new unquoted company
opportunities and continue to believe that there is
excellent value available on AIM. We are seeing initial
indications that the number of IPO opportunities
on AIM will increase in 2024, potentially aided by
improved macroeconomic conditions which should
attract greater inflows of capital to UK small-cap
markets. Despite challenging market conditions,
the majority of our portfolio continue to show good
operational progress and are led by management
teams that we are confident will continue to
successfully navigate current market uncertainties.
In addition to new opportunities, we are committed
to supporting our best B share investee company
opportunities as they continue along their growth
journey. On 14 February 2024, we invested a further
£206k in the existing B share AIM holding, Verici Dx
plc (“Verici”). Verici specialises in advanced clinical
diagnostics for organ transplants, offering three
main products—Clarava, Tutivia, and Protega—each
addressing distinct aspects/stages of the organ
transplant process. While Verici had sufficient
cash runway until 2025, the additional investment
will expedite growth initiatives, enhance risk
diversification, and accelerate value creation.
Supported by investee company exits and our special
distributable reserves following the capital reduction
undertaken in the year, we are optimistic about our
ability to continue to pay B share dividends in line with
our dividend policy. We are happy to have been able
to declare an interim B share dividend of 1.5p per B
share on 7 March 2024, to be paid on 17 May 2024.
We eagerly anticipate the continued growth of
the B share portfolio, with several new investment
opportunities currently in advanced due diligence
stages. Seneca believes that current cash reserves
combined with continued fundraising for the B share
pool under the current Offer sees the Company well
placed to continue to grow the B share portfolio.
Average money multiple
Total cost of dividends to date
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023 S
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Investment Portfolio –
B shares
Unquoted Investments
Equity
held
%
Investment
at cost
£’000
Unrealised
profit/(loss)
£’000
Carrying
value at
31 December
2023
£’000
Movement
in the year to
31 December
2023
£’000
SolasCure Limited
Bright Network (UK) Limited
Old Street Labs Limited
Convenient Collect Limited
Fabacus Holdings Limited
Alderley Lighthouse Labs
Limited
Geomiq Limited
Silkfred Limited
Ten80 Group Limited
2.7
2.5
6.4
5.4
1.6
22.7
1.1
<1.0
7.5
750
594
1,000
716
500
585
334
500
400
Total unquoted investments
5,379
333
466
-
-
202
20
-
(350)
(400)
271
1,083
1,060
1,000
716
702
605
334
150
-
5,650
-
244
-
-
-
20
-
(100)
-
164
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 S
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Quoted Investments
Shares
held
Investment
at cost
£’000
Unrealised
profit/(loss)
£’000
Carrying
value at
31 December
2023
£’000
Movement
in the year to
31 December
2023
£’000
Oxford BioDynamics Plc
5,067,628
Poolbeg Pharma plc
7,550,000
Velocity Composites plc
1,740,000
Arecor Therapeutics plc
252,947
Celadon Pharmaceuticals Plc
320,956
SkinBioTherapeutics plc
1,857,107
ProBiotix Health plc
3,722,4451
Engage XR Holdings Plc
9,391,704
Bidstack Group Plc
32,123,391
Northcoders Group Plc
100,000
Polarean Imaging Plc
1,644,070
Verici DX plc
799,865
Evgen Pharma plc
5,000,000
Gelion plc
Abingdon Health plc
Aptamer Group plc
250,492
78,250
495,726
775
755
696
620
530
297
777
376
916
300
986
280
400
363
75
580
618
(90)
(87)
(165)
(177)
(28)
(554)
(198)
(755)
(170)
(887)
(204)
(325)
(302)
(67)
(575)
1,393
665
609
455
353
269
223
178
161
130
99
76
75
61
8
5
664
219
(87)
(126)
193
(9)
(485)
(198)
(723)
(170)
(807)
(12)
(145)
(62)
4
(242)
Total quoted investments
8,726
(3,966)
4,760
(1,986)
Total investments
14,105
(3,695)
10,410
(1,822)
1 Includes 194,135 shares received as a dividend in specie on 31 March 2022 (“Dividend Shares”) as a result of the spin out
and listing on AQSE of the ProBiotix Health plc (“Probiotix”) division of former B share pool investee company OptiBiotix
Health Plc as a standalone entity in addition to the 3,528,310 shares purchased by the B share pool as part of the same
transaction. These Dividend Shares were received as a result of the B share pool’s shareholding in OptiBiotix Health Plc at
the point of the ProBiotix IPO.
Exits for the Year
Initial
Investment
Date
No . of
Shares sold
Investment
at cost
£’000
Sale
Proceeds
£’000
Realised
profit/(loss)
£’000
Exit
Multiple
Oxford BioDynamics Plc* October 2022
2,260,000
OptiBiotix Health Plc
April 2020
350,000
Qudini Limited
April 2019
4,724
Total
*Partial exit
2,614,724
346
103
500
949
847
125
500
1,472
501
22
-
523
2.5
1.2
1.0
1 .6
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B Share Pool –
Investment Portfolio
Listed below are details of the Company’s ten largest B share pool investments
by value as at 31 December 2023
Oxford BioDynamics Plc
Round 1 investment date:
October 2022
Round 2 investment date:
August 2023
Cost (the portion of the
original investment still
held as at 31 December
2023):
Valuation:
Equity type:
£775k
£1,393k
Quoted
Last statutory accounts:
30 September 2023
Turnover:
£510,000
Loss before tax:
£11.4 million
Net assets:
£16.1 million
Valuation method:
Bid price of 27.5p
per share
Oxford BioDynamics is a global biotechnology
company, advancing personalised healthcare by
developing and commercialising precision medicine
tests for life-changing diseases.
Its flagship product is EpiSwitch® CiRT (Checkpoint
Inhibitor Response Test) for cancer, a predictive
immune response profile for immuno-oncology
checkpoint inhibitor treatments which launched in
February 2022.
Oxford BioDynamics has participated in more
than 40 partnerships with big pharma and leading
institutions including Pfizer, EMD Serono, Genentech,
Roche, Biogen, Mayo Clinic, Massachusetts General
Hospital and Mitsubishi Tanabe Pharma.
The company has created a valuable technology
portfolio, including biomarker arrays, molecular
diagnostic tests, bioinformatic tools for 3D genomics
and an expertly curated 3D genome knowledgebase
comprising hundreds of millions of data points
from over 10,000 samples in more than 30 human
diseases.
Progress made by the company in 2023 includes:
The launch of the 94% accurate EpiSwitch Prostate
Screening blood test (PSE) for men in September
ahead of schedule. The current blood screening test
(the PSA test) is only 55% accurate and is considered
unreliable by many doctors, the PSE test is designed
to run alongside the PSA test to boost the accuracy
of the standard PSA test from 55% to 94%.
Successfully raising £5.6 million gross proceeds
to support the commercial development through
investment in sales and marketing to grow the
adoption of the EpiSwitch CiRT and to launch and
support initial sales of the PSE test.
Oxford BioDynamics receiving a reimbursement
code for EpiSwitch Prostate Screening Test (PSE)
which aids the billing process, reinforces physician
confidence in the test and will help drive adoption of
the test.
A strategic agreement between Bupa and Oxford
BioDynamics, meaning that Bupa UK health
insurance customers are to be considered for the
smart blood test and enhances access to the CiRT
test in the UK.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 Annual Report & Financial Statements for the year ended 31 December 2023
Solascure is an early stage wound care specialist,
originally spun out of and working alongside BRAIN
(world leading German biotech company), to
develop a new-to-market wound care product.
Solascure’s Aurase product is a gel-based product
that efficiently and gently cleans wounds, making
the healing process much more straightforward. Pre-
clinical work has been extremely positive and the
clinical trial is now underway.
Chronic wounds are a growing global problem,
and alternative methods of treatment for hard to
heal wounds are extremely expensive, ineffective,
impractical and slow. Solascure’s proprietary
technology utilises “maggot theory” debridement
without the cost or labour input of live maggots. In
simple terms, it uses maggot enzymes to facilitate
and also promote the body’s own wound cleansing
processes. Core benefits of the product are the clear
practical elements, as well as the reduced time scale
to full debridement without delaying wound healing.
Progress made by the company in 2023 includes:
A successful fundraise of £2.3 million to finalise the
company’s Series B funding round (£10.9 million
in total) to support the continued development of
Aurase Wound Gel and Phase II clinical trials of the
innovative wound debriding enzyme.
Being selected to receive European Innovation
Council (EIC) funding, enabling the team to further
develop its groundbreaking technology. The receipt
of this grant is a significant recognition of the
company’s technology and will propel the ongoing
development of Aurase Wound Gel.
Demonstrating proof of concept in Phase IIa safety
trial of Aurase Wound Gel. With the positive safety
data obtained from the Phase IIa trial, Solascure are
now able to explore higher concentrations of the gel
through further trials.
Continuing to attract serious attention from
major players in the space and initial partnership
discussions are underway.
Solascure Limited
Round 1 investment date:
January 2021
Round 2 investment date:
November 2021
Cost:
Valuation:
£750k
£1,083k
Equity type:
Unquoted
Last statutory accounts:
30 June 2023
Turnover:
Not Disclosed
Profit/loss before tax:
Not Disclosed
Net assets:
£6.5 million
Valuation method:
Price of last
fundraise (reviewed
for any fair value
adjustment)
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Bright Network (UK) Limited
Round 1 investment date:
March 2020
Round 2 investment date:
July 2023
Cost:
Valuation:
£594k
£1,060k
Equity type:
Unquoted
Last statutory accounts:
31 March 2023
Turnover:
£11.6 million
22
Loss before tax:
£597,000
Net assets:
£4.1 million
Valuation method:
Price of last
fundraise (reviewed
for any fair value
adjustment)
Bright Network is a media technology platform
which enables blue-chip employers to reach,
identify and recruit high-quality graduates and
young professionals. London-based Bright Network
is led by serial entrepreneur James Uffindell, who
previously established, grew, and successfully exited
from another business in the education sector.
Its platform uses advanced data analytics and
cutting-edge technology to pre-screen candidates
and ensure that its membership contains only the
top 20% of graduate talent. The quality of Bright
Network’s membership helps drive efficiencies in
the recruitment process and improved candidate
shortlisting outcomes for employers. As a result, the
business has established a strong client base of over
250 employers, which includes global blue-chip
organisations such as Bloomberg, Deloitte, Goldman
Sachs, Morgan Stanley, PwC, P&G, SkyScanner and
Vodafone.
Progress made by the company in 2023 includes:
Successful expansion into Europe, with the service
launched in Germany.
Completing a £5 million fundraise to further develop
the platform, reinforce the position in Germany and
to continue to grow the technology academy.
Continued growth of the platform, which now
includes over 850k graduates and c.300 blue chip
employers.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 Annual Report & Financial Statements for the year ended 31 December 2023
Old Street Labs Limited (t/a “Vizibl”)
Round 1 investment date:
March 2019
Round 2 investment date:
April 2023
Cost:
Valuation:
£1,000k
£1,000k
Equity type:
Unquoted
Last statutory accounts:
31 March 2023
Turnover:
Not Disclosed
Profit/loss before tax:
Not Disclosed
Net liabilities:
£5 million
Valuation method:
Price of last
fundraise (reviewed
for any fair value
adjustment)
Old St Labs is a provider of cloud based, supplier
collaboration tools for large, blue chip customers,
enabling them to manage key supplier relationships
and strategic project work. The core product, Vizibl,
seeks to make supplier collaboration much more
straight forward, with key focus on compliance,
savings / efficiency and driving growth across the
business.
Vizibl is the only SaaS workspace that supports
collaborative supplier relationships, bringing all
points of contact together in one place, providing
visibility across the company and eliminating
duplication of efforts. Vizibl’s real-time reporting
speeds up decision making, drawing on and sharing
the expertise of the community in the process.
The offering taps into a growing trend in supplier
collaboration, having moved on from the initial focus
on compliance, to an increased emphasis on savings
/ efficiency, and recent developments highlighting
the benefits in terms of wider growth strategy for
large customers.
Progress made by the company in 2023 includes:
Continuing to onboard new customers as regulatory
requirements drive growing interest in supplier
sustainability and ESG modules.
Successful launch of a new sustainability programme
helping large organisations to accelerate their
decarbonisation initiatives.
Being shortlisted for the Procurement Technology
Provider Award at the 2023 World Procurement
Awards. The award celebrates technology providers
that demonstrate the most impactful and valuable
solutions for procurement functions.
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Convenient Collect Limited
(t/a HubBox)
Initial investment date:
December 2022
Cost:
Valuation:
£716k
£716k
Equity type:
Unquoted
Last statutory accounts:
31 December 2022
Turnover:
Not Disclosed
Profit/loss before tax:
Not Disclosed
Net Assets:
£1.8 million
HubBox has developed plug-and-play software
that gives shoppers a choice between home
delivery and local pickup when they check-out on
a retailer’s website. This software has been created
in conjunction with the largest global delivery
network providers (including UPS and DPD) and is
compatible with major ecommerce platforms like
Shopify. Couriers are facing eroding margins on
home deliveries as costs associated with the ‘last
mile’ problem rise, and retailers are suffering from
lost deliveries and failed delivery charges.
HubBox provides ecommerce software that integrates
with both the retailer and the courier, enabling the
retailer to offer shoppers the option to Click & Collect
from the courier’s network of Pick-Up Points. The
software turns what would otherwise be a complex,
costly and lengthy piece of custom development
work for retailers into a simple integration that can be
completed in a matter of hours.
Progress made by the company in 2023 includes:
Valuation method:
Price of last
fundraise (reviewed
for any fair value
adjustment)
Strong revenue growth despite challenging
macroeconomic and retail environments and a solid
pipeline of international and domestic customers
ready to convert. Recent wins include global retailers
Birkenstock, GoPro, StockX and Selfridges.
Strengthening of the senior management and
technology teams.
Further integration with major carrier networks
including two significant new commercial contracts
with UPS in the USA and DPD in the UK.
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Fabacus Holdings Limited
Initial investment date:
February 2019
Cost:
Valuation:
£500k
£702k
Equity type:
Unquoted
Last statutory accounts:
31 August 2022
Turnover:
Not Disclosed
Fabacus Holdings Limited is an independent software
company that has developed a complete product
lifecycle solution, Xelacore, aimed at bringing
transparency to supply chain networks, with an initial
focus on resolving the interaction and information
flow between global licensors and their licensees.
Xelacore is a modular, Software as a Service solution
with an intuitive interface and proprietary data
aggregation and management engine that allows
all stakeholders to operate on a single unified
and collaborative platform. It bridges the gaps
in an inefficient process within the current retail
ecosystem by creating authenticated, enriched
universal records that unlock opportunities, reduce
risk and drive performance for both licensors and
licensees.
Profit/loss before tax:
Not Disclosed
Progress made by the company in 2023 includes:
Net assets:
£12.4 million
Completing a successful fundraise of £5 million to
support the continued growth in the business.
25
Valuation method:
Price of last
fundraise (reviewed
for any fair value
adjustment)
Launch of new key products from the evolving
technology suite.
Further contracts signed with global licensor brands
to underpin the core proposition licensee model.
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Poolbeg Pharma plc
Initial investment date:
July 2021
Cost:
Valuation:
Equity type:
£755k
£665k
Quoted
Last statutory accounts:
31 December 2022
Turnover:
£nil
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Loss before tax:
£4.7 million
Net assets:
£18.3 million
Valuation method:
Bid price of 8.8p
per share
Poolbeg Pharma is a clinical-stage pharmaceutical
company focused on the development and
commercialisation of therapies to treat and prevent
infectious diseases. Headquartered in London, the
business is a spin out from Open Orphan plc and
the management team has proven capabilities
in identifying, acquiring and accelerating assets
through development to commercialisation.
It has adopted a capital-light model which enables
it to develop multiple products faster and more cost
effectively than the traditional biotech model, and
the company aspires to become a “one-stop shop”
for big pharma to find Phase II ready products for
development and commercialisation. The company’s
lead asset is POLB 001, a drug with the potential to
treat serious unmet needs in patients suffering from
severe influenza.
Progress made by the company in 2023 includes:
Positive initial data analysis in the POLB 001
challenge trial which showed a marked reduction
in both systemic and localised inflammation. This
was further supported with positive results from its
human challenge trial which showed a reduction
in inflammation with an expected utility in severe
influenza and other inflammatory conditions.
A significant breakthrough in its influenza Artificial
Intelligence programme, leading to the discovery
of multiple novel drug targets for the treatment of
influenza.
Positive outputs from lab based analysis of RSV
(Respiratory Syncytial Virus) drug candidates
identified as part of its Artificial Intelligence led
programme. This is a testament to the power of
the AI led programme and supports the partnering
discussions that the company engages in.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 Annual Report & Financial Statements for the year ended 31 December 2023
Velocity Composites plc
Initial investment date:
October 2023
Cost:
Valuation:
Equity type:
£696k
£609k
Quoted
Last statutory accounts:
31 October 2023
Turnover:
£16.4 million
Loss before tax:
£16.4 million
Net assets:
£3.1 million
Valuation method:
Bid price of 35p per
share
Velocity Composites plc (“Velocity”) is the leading
supplier of composite material kits to aerospace and
other high-performance manufacturers, that reduce
costs and improve sustainability. Customers include
Airbus, Boeing, and GKN.
By using Velocity’s proprietary technology,
manufacturers can also free up internal resources to
focus on their core business. Velocity has significant
potential for expansion, both in the UK and abroad,
including into new market areas, such as wind energy,
urban air mobility and electric vehicles, where the
demand for composites is expected to grow.
In December 2022, the company signed a work
package agreement worth $100 million over 5-years
with US Tier 1 manufacturer GKN Aerospace to be
fulfilled from Velocity’s new manufacturing plant in
Alabama.
Progress made by the company in 2023 includes:
Successful completion of a £6.6 million funding
round to enable the company to accelerate its
growth in the UK and overseas.
Successful site opening and production ramp up in
Alabama with maiden revenue of £2 million derived
from the new Alabama facility built to support the $100
million 5-year Work Package Agreement with GKN.
A robust pipeline, with a large Tier 1 customer
at the live bid stage under a Memorandum of
Understanding, and a third business development
plan with another large Tier 1 customer.
Strengthening the board with the appointment of
Kevin Hickey as Group Chief Operating Officer.
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Alderley Lighthouse Labs Limited
Round 1 investment date:
October 2022
Round 2 investment date:
July 2023
Cost:
Valuation:
£585k
£605k
Equity type:
Unquoted
Last statutory accounts:
31 May 2023
Turnover:
Loss before tax:
N/A
N/A
Net assets:
£141,000
Valuation method:
Price of last
fundraise (reviewed
for any fair value
adjustment)
Alderley Lighthouse Labs is a next generation UK
diagnostic laboratory, operating from a 3,500 square
feet facility providing first-class office and laboratory
space at Alderley Science Park in the Northwest of
England.
The business incorporates a broad testing repertoire
across blood and molecular testing. It is led by two
founding directors Mark Wigglesworth and Simon
Chapman, with extensive and expert knowledge of
the UK’s diagnostic market, having played a pivotal
role in the rapid deployment of COVID-19 diagnostic
testing in the North of England throughout the
global pandemic.
Disruption in the UK diagnostics market caused by
Covid and the growing economic pressures facing
the NHS is accelerating further change in the sector
and growth in commercial opportunities for private
diagnostics.
Progress made by the company in 2023 includes:
Gaining UKAS ISO:15189 accreditation,
demonstrating the gold standard of diagnostics.
Building out the laboratory and senior management
teams.
Successfully onboarding a number of new key
recurring customer accounts.
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Arecor Therapeutics plc
Round 1 investment date:
May 2021
Round 2 investment date:
August 2022
Cost:
Valuation:
£620k
£455k
Equity type:
Quoted
By applying its innovative proprietary formulation
technology platform, Arestat™, Arecor is developing
a portfolio of proprietary products in diabetes
and other indications and is working with leading
pharmaceutical and biotechnology companies to
deliver enhanced reformulations of their therapies.
Arecor’s treatments for people living with chronic
disease are designed to advance patient care and
improve clinical outcomes. Its product portfolio
for diabetes currently includes novel insulin
formulations to deliver an ultra-rapid acting insulin
(AT247), and an ultra-concentrated rapid acting
insulin (AT278).
Last statutory accounts:
31 December 2022
Progress made by the company in 2023 includes:
Turnover:
£2.4 million
Loss before tax:
£10.5 million
Net assets:
£17.5 million
Valuation method:
Bid price of 180p
per share
Arecor raised £20 million in its AIM IPO on 3 June
2021. Arecor was an existing investee company of
the Ordinary share portfolio and the B share pool
initially invested £425k in the IPO. The Ordinary
share pool also supported the IPO with a further
investment of £85k. The VCT has since followed its
initial B share investment with a further £195k from
the B share pool.
Arecor is a globally focused biopharmaceutical
company that is aiming to transform patient care by
bringing innovative medicines to market through
the enhancement of existing therapeutic products.
First commercial launch of a product incorporating
the company’s Arestat technology which triggered a
milestone payment from Inhibrx under the existing
licence agreement and is now generating royalties.
Arecor received an initial upfront payment and is
entitled to further payments based on development,
regulatory and commercial milestones, in
addition to annual Technology Access Fees post
commercialisation.
Securing a new revenue generating collaboration with
a leading biopharmaceutical company to support the
ongoing development of a biosimilar product.
Signing a further collaboration agreement with Eli Lilly
to use the company’s proprietary technology platform
Arestat, to develop a novel liquid formulation of one
of Lilly’s products with enhanced properties. Lilly will
fund the development work with the option to acquire
the new formulation and intellectual property under
a technology licencing model to further develop and
commercialise the product.
Entering into a new co-development agreement and
exclusive licence option agreement with a leading
global medical products company with the potential
for the company to receive developmental milestone
payments and royalties.
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The Ordinary Share Pool
Shareholders will recall that responsibility for the management of the Ordinary share pool investments
continues to rest with those remaining members of the Board of Directors who were serving prior to Seneca’s
appointment as Investment Manager on 23 August 2018, which constituted Richard Roth and John Hustler prior
to Richard Roth’s retirement at the last AGM on 18 May 2023.
Following Richard Roth’s retirement, he remained a member of the CAC for a period of three months. Since that
three-month period ended in August 2023, John Hustler has been the sole member of the CAC.
John Hustler has informed the Board that having served as a non-executive Director for twenty-two years, he
will retire from the Board and therefore will not stand for re-election at the forthcoming AGM on 15 May 2024.
The Board has resolved to appoint Ian Dighé as Chair. In relation to the management of the remaining Ordinary
share holdings, John has agreed to continue as the sole member of the CAC following his retirement from the
Board for the foreseeable future in order to manage the phased transfer of responsibilities for the Ordinary
Share Pool to the remaining members of the Board.
Performance
AIM Quoted Investments
The Ordinary share pool’s largest investment is AIM quoted Scancell, which represented 70% of the Ordinary
share pool’s NAV as at 31 December 2023. The share price of Scancell decreased significantly from 24.0p at 31
December 2022 to 10.5p at 31 December 2023 (a decrease of 56%). The Ordinary share pool’s investment in
Arecor represented 27% of the Ordinary share pool’s NAV as at 31 December 2023 and Arecor’s share price likewise
decreased in the year from 230p at 31 December 2022 to 180p at 31 December 2023 (a decrease of 22%).
Given this downward trend during the year, especially the percentage decrease in Scancell’s share price, the
Ordinary share pool’s NAV decreased by 18.6p (50%) to 18.5p per Ordinary share at 31 December 2023.
Scancell successfully completed a fundraise of £12 million in December 2023, so we are hopeful that the
business will continue to be able to meet commercial milestones now that it is fully funded. Arecor also
continues to achieve significant milestones and secure new revenue generating partnerships, with significant
commercial opportunities ahead of them. As such, we remain optimistic about the future of these businesses
and will continue to monitor their progress.
Unquoted Investments
Fuel 3D informed the Company that its board of directors appointed insolvency practitioners on 7 December
2023 to place Fuel 3D and its subsidiaries into Creditors’ Voluntary Liquidation with a view to winding up the
affairs of the group. The company’s board also communicated to us that there is unlikely to be a meaningful
distribution to equity investors in the company and as such we have written off our investment which was
valued at £59k as at 31 December 2022.
Fuel 3D was the Ordinary share pool’s last remaining unquoted holding of value, resulting in a total £nil value for
Ordinary share unquoted portfolio.
Dividends and Outlook
On 19 May 2023, the Company paid an Ordinary share pool interim capital dividend of 2p per Ordinary share.
The Total Return in relation to the Ordinary shares is now 91.8p comprising cumulative distributions of 73.3p per
Ordinary share and a residual NAV per Ordinary share of 18.5p as at 31 December 2023.
As noted in the Chair’s Statement, the Company is focused on realising assets in the Ordinary share pool at the
appropriate time with the proceeds then being distributed to Ordinary shareholders as dividends – it is therefore
noteworthy that realisations in the last five years have enabled the payment of a total of 49p per Ordinary
share in dividends to Ordinary shareholders, representing 76.8% of the NAV per Ordinary share just prior to
the appointment of Seneca as Investment Manager, as at 31 December 2017. Notwithstanding this success, we
remain confident that, overall, there remains the opportunity to realise further value for Ordinary shareholders in
due course from the Ordinary share pool AIM holdings.
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Investment Portfolio –
Ordinary Shares
Unquoted Investments
Equity
held
%
Investment
at cost
£’000
Unrealised
profit/(loss)
£’000
Carrying
value at
31 December
2023
£’000
Movement
in the year to
31 December
2023
£’000
Fuel 3D Technologies Limited
<1.0
Insense Limited
OR Productivity Limited
Microarray Limited
ImmunoBiology Limited
4.6
3.7
3.0
1.2
299
509
765
132
868
(299)
(509)
(765)
(132)
(868)
Total unquoted investments
2,573
(2,573)
-
-
-
-
-
-
(59)
-
-
-
-
(59)
Quoted Investments
Shares
held
Investment
at cost
£’000
Unrealised
profit/(loss)
£’000
Carrying
value at
31 December
2023
£’000
Movement
in the year to
31 December
2023
£’000
Scancell Holdings plc
10,000,000
Arecor Therapeutics plc
223,977
Total quoted investments
605
227
832
445
176
621
1,050
(1,350)
403
(112)
1,453
(1,462)
Total investments
3,405
(1,952)
1,453
(1,521)
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Ordinary Share Pool –
Quoted Investment Portfolio
Listed below are details of the Company’s quoted Ordinary share pool
investments as at 31 December 2023 .
Scancell Holdings plc
Initial investment date:
December 2003
Cost (the portion of the
original investment still
held as at 31 December
2023):
Valuation:
Equity type:
£605k
£1,050k
Quoted
Last statutory accounts:
30 April 2023
Turnover:
£5.3 million
Loss before tax:
£14.3 million
Net liabilities:
£6.2 million
Valuation method:
Bid price of 10.5p
per share
Scancell is an AIM quoted biotechnology company
that is developing a pipeline of therapeutic vaccines
to target various types of cancer, with the first target
being melanoma.
The ImmunoBody platform technology educates
the immune system how to respond – this means
that the technology can also be licensed to
pharmaceutical companies to assist the development
of their own therapeutic vaccines, which is an area
of emerging importance for which a number of big
pharmaceutical businesses do not have in-house
technology.
In addition, in 2012 a second platform technology,
Moditope, was announced and is based on exploiting
the normal immune response to stressed cells and is
complementary to the ImmunoBody platform. The
AvidMab platform was established in 2018 which
allows direct tumour killing. Scancell continues to
develop its multiple technologies.
Progress made by the company in 2023 includes:
A successful capital raise of £11.9 million to support
important clinical milestones in 2024.
Reporting positive data from the first stage of
its SCIB1 Oncology vaccine Phase 2 SCOPE trial
for advanced melanoma. In combination with
checkpoint inhibitors, SCIB1 showed an 85%
response rate to treatment in 13 patients, exceeding
the target of 70%. Recruitment for the second stage
is expected to complete in Q1 2024 with highly
anticipated data available in Q3 2024.
MHRA approval for the addition of SCIB1+ to the
SCOPE trial, which has melanoma specific epitopes
with the potential to be even more effective in a
broader patient population. Recruitment in this
third cohort is expected to start in Q1 2024 with
early data available in Q3 2024.
Moving the ModiFY trial into the expansion cohorts
following the approval by the safety review
committee. Early data from patients receiving Modi-
1 showed good T cell responses, tolerability with no
dose limiting toxicities. Modi-1 is to be assessed in
combination with double CPI therapy in the ModiFY
study pending protocol amendment by the MHRA.
Early clinical data is anticipated in 2024.
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Arecor was admitted to the AIM market on 3 June
2021 and raised £20 million at that point. Arecor was
an existing investee company of the Ordinary share
portfolio and the B share pool invested £425k in the
IPO. The Ordinary share pool also supported the IPO
with a further investment of £85k.
For more information on the company and progress
made in the year, please see page 29, B Share Pool
Investment Portfolio summary.
Arecor Therapeutics plc
Initial investment date:
January 2008
Cost:
Valuation:
£227k
£403k
Equity type:
Quoted
Last statutory accounts:
31 December 2022
Turnover:
£2.4 million
Loss before tax:
£10.5 million
Net assets:
£17.5 million
Valuation method:
Bid price of 180p
per share
Richard Manley
Seneca Partners Limited
21 March 2024
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023 Business Review
Company Performance
The Board is responsible for the Company’s investment strategy and performance.
The graphs below compare the NAV return (rebased to 100) of the Company’s Ordinary shares over the period
from launch in October 2001 to December 2023 and the B shares from launch in August 2018 to December
2023, with the total return from a notional investment (rebased to 100) in the FTSE AIM All-Share Index over
the same period. This index is considered to be the most appropriate equity market against which investors can
measure the relative performance of the Company due to average market cap per listing, risk profile and its
investor base being more directly comparable to the Company’s. However, the Directors wish to point out that
VCTs have very restrictive investment criteria in their observance of the VCT rules.
Ordinary Share Performance
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Ordinary Share NAV Total Return*
Ordinary Share NAV Total Return Including Income Tax Reliefs**
FTSE AIM All-Share Index Total Return***
* Ordinary Share Historic NAV total return rebased to 100p at launch
** Ordinary Share Historic NAV total return plus 30% upfront income tax relief rebased to 100p at launch
*** FTSE AIM All-Share total return basis, rebased to 100
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B Share Performance
B Share NAV Total Return*
B Share NAV Total Return Including Income Tax Reliefs**
FTSE AIM All-Share Index Total Return***
* B Share Historic NAV total return rebased to 100p at launch
** B Share Historic NAV total return plus 30% upfront income tax relief rebased to 100p at launch
*** FTSE AIM All-Share total return basis, rebased to 100
The NAV Total Return to the investor, is calculated in accordance with AIC Methodology, which includes the NAV
plus dividends paid (rebased to 100p) from launch.
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Results - Return on Ordinary Activities as per Income Statement
Net return attributable to Ordinary shareholders
Net return attributable to B shareholders
Total
Key Performance Indicators (KPIs)
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
(1,347)
(1,324)
(2,671)
13
(2,762)
(2,749)
The Board uses a number of measures to assess the Company’s success in meeting its strategic objectives. The
KPIs it monitors include:
KPI
Objective
Total Return (Net Asset Value plus
cumulative dividends paid) per
share for both share classes
We have previously communicated our ambition to increase dividends
to 5% per annum of the B share NAV by 2023 (subject to B share pool
investment performance and an intention to also maintain a relatively
stable NAV per B share). Whilst increasing dividends to 5% of B share NAV
was not considered appropriate during 2023 in view of the continued
softness of the B share pool’s AIM quoted investments, this ambition
remains – subject to investment performance and in particular the
performance of the B share pool’s AIM quoted investments, given that as
at 31 December 2023 these represented 30.9% of the B share NAV.
It also remains our ambition to seek to return to Ordinary shareholders
over time the proceeds from any realisations in the form of dividends or
by means of a return of capital.
The total expenses of the
Company as a proportion of
shareholders’ funds
To maintain efficient operation of the VCT whilst minimising running costs
(noting that Seneca has agreed to cap running costs at 3% of both the
Ordinary and B share NAVs).
The Total Return for the Ordinary shares and B shares
is included in the Financial Summary on page 3 and
the change in the Total Return is explained in the
Chair’s Statement on pages 9 to 12. The Total Return
for the B share class decreased during the year by
7.6% to 85.7p and the Ordinary share Total Return
decreased by 15.3% to 91.8p.
The decrease in the B share Total Return in 2023
amounted to 7p which was principally due to the
decrease in the share prices of the B share pool’s AIM
quoted investee companies combined with the impact
of the B share pool’s share of the Company’s running
costs, offset by the uplift in value of two of the B
share pool’s unquoted investments and the profits
generated from three full and partial realisations of
AIM quoted investments during the year.
The Company has also invested £2.4 million into
two new investee companies and four follow-on
investments during the year from the B share pool
and has also made three B share pool realisations as
detailed in the Chair’s Statement on pages 9 to 12.
The disposals are also indicative of the potential for
harvesting profits from AIM quoted investments to
which the B share pool has a material exposure.
The decrease in the Ordinary share Total Return
amounted to 16.6p and is principally as a result of
the decrease in the share prices of the Ordinary
share pool’s AIM quoted investments Scancell and
Arecor, payment of the 2p per Ordinary share interim
capital dividend, the write off of the unquoted
company holding value of Fuel3D and the impact of
the allocation of running costs to the Ordinary share
pool, as detailed in the Investment Manager’s report
on page 30.
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Dividends have been paid in the year from both share
classes as follow:
1. An interim capital dividend of 2 pence per
Ordinary share for the year to 31 December
2023 was paid on 19 May 2023.
2. An interim dividend of 1.5 pence per B share
for the year to 31 December 2023 was paid on
19 May 2023. A second interim dividend of 1.5
pence per B share for the year to 31 December
2023 was paid on 22 December 2023.
The Company was again able to maintain efficient
operation of the VCT whilst minimising running costs
as a proportion of shareholder’s funds. For a three-
year period with effect from 1 July 2018, expenses
of the Company were capped at 3% of the weighted
average net asset value of the B shares, including the
management fee (but excluding any performance
fee). Since July 2021, expenses remain capped at
3% but are now allocated across both the B share
pool and the Ordinary share pool pro rata to their
respective weighted average net asset values. Seneca
reduced its management fee by £70k in the year to
31 December 2023 (2022: reduced by £18k) to keep
expenses in line with this cap.
Viability Statement
In accordance with provision 30 and 31 of The UK
Corporate Governance Code 2018, the Directors
have assessed the prospects of the Company over
a twelve month period as required by the “Going
Concern” provision.
The Board has carried out a robust assessment of the
principal risks facing the Company and its current
position, including those which may adversely
impact its business model, future performance,
solvency or liquidity. The principal risks faced by the
Company and the procedures in place to monitor
and mitigate them are set out below.
The Board has also considered the Company’s cash
flow projections and found these to be realistic
and reasonable. The assets of the Company consist
mainly of securities, seventeen of which are AIM
quoted, relatively liquid and readily accessible, as
well as three money market funds valued at £3.9
million and more than £1.4 million of cash as at 31
December 2023 (which make up 32% of net assets).
Since 31 December 2023, one additional investment
has been made totalling £206k and the Company’s
overall liquidity remains strong.
Based on the above assessment the Board confirms
that it has a reasonable expectation that the
Company will be able to continue in operation and
meet its liabilities as they fall due over the twelve-
month period to 20 March 2025.
Principal Risks, Risk Management
and Regulatory Environment
The Board carries out a regular review of the risk
environment in which the Company operates,
including principal and emerging risks. The main
areas of risk identified by the Board are as follows:
VCT qualifying status risk: the Company is required
at all times to observe the conditions laid down
in Chapter 3 of Part 6 Income Tax Act 2007 for
the maintenance of approved VCT status. These
rules have subsequently been updated on several
occasions. The loss of such approval could lead to
the Company losing its exemption from corporation
tax on capital gains, to investors being liable to pay
income tax on dividends received from the Company
and, in certain circumstances, to investors being
required to repay the initial income tax relief on their
investment.
The Board keeps the Company’s VCT qualifying
status under regular review. The Board has also
engaged Shoosmiths LLP as VCT status advisor.
Funds raised by VCTs are first included in the
investment tests from the start of the accounting
period containing the third anniversary of the date
on which the funds were raised. The value used in
the qualifying tests is not necessarily the original
investment cost due to the complex rules required
by HMRC, therefore the allocation of Qualifying
Investments as defined by the legislation can be
different to the portfolio weighting as measured by
market value relative to the net assets of the VCT.
The main specific regulations that must have been
met, and which the Directors are confident have
been complied with, are:
•
•
•
The Company’s income in the period has been
derived wholly or mainly (70% plus) from shares
or securities. As at 31 December 2023, 100% of
the Company’s income was derived from shares
in money market funds.
The Company has not retained more than 15%
of its income from shares and securities.
At least 80% by value of the Company’s
investments has been represented throughout
the period by shares or securities in qualifying
holdings of the investee company. New funds
raised are included in this requirement from
the beginning of the accounting period in
which the third anniversary of the share issue
date falls. By virtue of a disregard of the impact
of disposals which have been held for more
than 12 months (£625k of proceeds have been
realised from such disposals in the year), as at
31 December 2023 the percentage of shares or
securities comprised in qualifying holdings is
98.5% in respect of the 80% Qualifying Holdings
test. Note, even without the disregarding
of the impact of disposals which have been
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•
held for more than 12 months as noted above
the Company was still well above the 80%
qualifying requirement. At least 70% by value
of the Company’s qualifying holdings has been
represented throughout the period by holdings
of eligible shares (investments made before 6
April 2018 from funds raised before 6 April 2011
are excluded).
At least 30% of funds raised after 31 December
2018 must be invested in qualifying investments
by the first anniversary of the end of the
accounting period in which those funds were
raised. As at 31 December 2023, 34.3% of
funds raised in the year to 31 December 2022
and 33.3% of the funds raised in the year to 31
December 2023 had already been invested in
qualifying investments.
• No holding in any company has at any time in
the period represented more than 15% by value
of the Company’s investments at the time of
investment or when the holding is added to.
The Company’s share capital has throughout
the period been listed on a regulated European
market.
•
• No investment made by the VCT has caused
the investee company to receive more than £5
million (or £10 million for knowledge intensive
companies) of State Aid investment in the year
ended on the date of the VCT’s investment, nor
more than the lifetime limit of £12 million (or
£20 million for knowledge intensive companies).
Furthermore, the use of funds has not been
contrary to the EU State Aid guidelines.
Investment risk: the majority of the Company’s
investments are in smaller quoted and unquoted
companies which are VCT qualifying holdings,
which by their nature entail a higher level of risk
and lower liquidity than investments in large quoted
companies. The Directors and the Investment
Manager aim to limit the risk attached to the
portfolio as a whole by careful selection and timely
realisation of investments, by carrying out due
diligence procedures and by maintaining a spread
of holdings in terms of financing stage. The Board
reviews the investment portfolio on a regular basis.
Financial risk: by its nature, as a VCT, the Company
is exposed to market price risk, credit risk, liquidity
risk, fair value and cash flow risks. All of the
Company’s income and expenditure is denominated
in sterling and hence the Company has no direct
foreign currency risk. The indirect risk results from
investees doing business overseas. The Company is
financed through equity. The Company does not use
derivative financial instruments.
Cash flow risk: the risk that the Company’s available
cash will not be sufficient to meet its financial
obligations is managed by frequent budgeting and
close monitoring of available cash resources.
Liquidity risk: the Company’s investments may be
difficult to realise. The spread between the buying
and selling price of shares may be wide and thus the
price used for the valuation may not be achievable.
Regulatory risk: the Company is required to
comply with the Companies Act, the rules of the UK
Listing Authority and United Kingdom Accounting
Standards. Breach of any of these might lead to
suspension of the Company’s Stock Exchange listing,
financial penalties or a qualified audit report.
Reputational risk: inadequate or failed controls
might result in breaches of regulation or loss of
shareholder trust.
Economic risk: Events such as an economic
recession and movement in interest rates could
adversely affect some smaller companies’ valuations,
as they may be more vulnerable to changes in
trading conditions or the sectors in which they
operate. This could result in a reduction in the value
of the Company’s assets. The Company seeks to
mitigate wider macro-economic risks by investing in
a diverse portfolio of companies, across a range of
sectors, which helps to mitigate against the impact
on any one sector. Seneca also maintains adequate
liquidity to make sure it can continue to provide
follow-on investment to those portfolio companies
which require it and which is supported by the
individual investment case.
Internal control risk: the Board reviews annually
the system of internal controls, financial and non-
financial, operated by the Company. These include
controls designed to ensure that the Company’s
assets are safeguarded and that proper accounting
records are maintained.
The Board seeks to mitigate the internal risks by
setting policies, regular review of performance,
enforcement of contractual obligations and
monitoring progress and compliance. In the
mitigation and management of these risks, the
Board applies rigorously the principles detailed in
the Financial Reporting Council’s Guidance on Risk
Management, Internal Controls and Related Financial
and Business Reporting. Details of the Company’s
internal controls are contained in the Corporate
Governance section starting on page 49.
Further details of the Company’s financial risk
management policies are provided in Note 16 to the
Financial Statements.
Independence,
Gender and
Diversity
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Independence,
Gender and
Diversity
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Independence, Gender
and Diversity
The Board consists of five Directors comprising four Independent Directors, one of whom was appointed prior
to the appointment of Seneca Partners as the Company’s Investment Manager, the next appointed in 2019 and
a further two appointed in 2023. The fifth Director is the CEO of Seneca, Richard Manley, who was appointed in
2018.
Until the AGM in May 2023 the Board consisted of four male directors, after the AGM date when Richard Roth
stood down and Mary Anne Cordeiro was appointed, the Board continued to consist of four Directors, made
up of three males and one female. On 11 October 2023, Ian Dighé joined the Board and from this date the
Board consisted of four male Directors and one female Director; all Directors are non-executive. The Board
has assessed the independence of each Director and with the exception of Richard Manley who is CEO of the
Investment Manager, has concluded that the remaining four are Independent.
The Board is required to disclose its compliance in relation to the targets on board diversity set out under
paragraph 9.8.6R (9) of the Listing Rules which are as follows:
at least 40% of the individuals on the Board of Directors are women;
1.
2. at least one of the senior positions on the Board of Directors is held by a woman; and
3. at least one individual on the Board of Directors is from a minority ethnic background.
The table below sets out the composition of the Board at the year-end based on the prescribed criteria.
Gender Identity
Men
Women
Ethnic Background
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic groups
Asian/Asian British
Black/African
Other ethnic group including Arab
Number of Board
Members
Percentage of
the Board
Senior positions
on the Board
4
1
4
-
1
-
-
80%
20%
80%
-
20%
-
-
2
-
2
-
-
-
-
At the year end the Company did not meet the targets for splits on diversity, or the holding of one senior position
by a woman, however it does meet its target on ethnicity as Mary Anne Cordeiro identifies as British Asian.
The changes proposed following the Company’s forthcoming AGM, will impact on the year-end position as stated
above. Following the AGM on 15 May 2024, the number of Board members will reduce to four and will take the
percentage of women members from 20% to 25% of the Board. At this time Mary Anne Cordeiro will also be
appointed as the Senior Independent Director, meeting the requirement that at least one of the senior positions on
the Board of Directors is held by a woman.
Although the Company does not meet the requirements for 40% female members of the Board, any future
recruitment will be mindful of this, providing a suitable candidate possesses the key skills and experience required
for the position. The Board maintains a policy of considering diversity when reviewing Board composition and
has made a commitment to consider diversity when making future appointments. The Board will always appoint
the best person for the job. It will not discriminate on the grounds of gender, race, ethnicity, religion, sexual
orientation, age or physical ability.
More details on the Directors can be found on page 42.
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Details of Directors
John Hustler (Independent Non-Executive Chair)
John joined Peat Marwick, now KPMG, in 1965 and became a Partner in 1983. Since leaving KPMG in 1993 to
form Hustler Venture Partners Limited, he has advised and been a director of a number of growing companies.
John was appointed to the Board of Octopus Titan VCT plc in November 2007 and served as Chair of the Board
until June 2022. He was also a member of the Council of The Institute of Chartered Accountants in England and
Wales and Chairman of its Corporate Finance Faculty from 1997-2000 and was a member of the Council of the
British Venture Capital Association from 1989-1991. John has been a Director of the Company since inception
and has extensive historic knowledge of the Ordinary share pool investments and the recent development
of the Company’s B share pool. John Hustler has informed the Board that having served as a non-executive
Director for nearly twenty-three years, he will retire from the Board and so will not stand for re-election at the
forthcoming AGM on 15 May 2024. John has a beneficial interest in Scancell.
Alex Clarkson (Independent Non-Executive Director, Chair of the Audit Committee)
Alex is Managing Director of Bamburgh Capital. He qualified as a chartered accountant with
PricewaterhouseCoopers in 1998, joined Brewin Dolphin Securities in 2000 before becoming co-founder of
Zeus Capital in 2003. Alex then went on to co-found Bamburgh Capital in 2011, executing over 20 transactions
acting on both the “buy” and “sell” side and raising funding. During this time, Alex was co-founder of Compass
BioScience Group Limited and Collbio, two highly acquisitive companies, and became interim CFO of Collbio
which undertook an IPO on the London Stock Exchange within an 18-month period, changing its name to
Collagen Solutions. Given Alex’s experience of public markets and growth capital investing, his expertise and
knowledge are highly relevant to the ongoing success of the Company. Alex has a beneficial interest in Alderley
Lighthouse Labs.
Mary Anne Cordeiro (Independent Non-Executive Director)
Mary Anne is the Founder and Managing Director of Science to Business Limited which specialises in advising
medical technology businesses on fundraising and commercialisation strategy. Mary Anne joined the Board of
the Company in May 2023 and brings to the Board extensive knowledge of both the VCT and growth capital
investment sectors, having been an advisor to or executive of innovative companies in the healthcare and
technology sectors for over twenty years. Mary Anne served as a non-executive Director of Albion Technology
& General VCT Plc (“AATG”) from 2013 until 2023, following its merger with Albion Income & Growth VCT Plc
where she had served as a non-executive Director from 2004. Prior to this Mary Anne had a fifteen-year career
in international corporate finance as a M&A Investment Banker at Goldman Sachs International Limited, Vice
President at Bankers Trust Company and Managing Director of Paribas’ Financial Institutions Group. Mary Anne
holds a MA (Hons) in Chemistry from the University of Oxford and is a member of the University of Oxford’s
Department of Chemistry Development Board.
Ian Dighé (Independent Non-Executive Director)
Ian has significant listed company experience, particularly in the investment banking, corporate broking, asset
management and closed-end funds sectors. He was a co-founder of Bridgewell Group plc and was Chairman
of Miton Group plc from February 2011, overseeing the successful refinancing and subsequent growth of the
group. He retired from the Miton board in December 2017. He is Chairman of The Investment Company plc, an
independent director of Edelweiss Holdings plc, Pennant International Group plc and a director of a number of
private companies and charities. Ian brings senior Board level experience to the VCT, particularly as Chairman of
an AIF, and extensive investment knowledge; both of which are key to the ongoing success of the Company.
Richard Manley (Non-Executive Director)
Richard is CEO of and significant shareholder in Seneca. He qualified as a chartered accountant with KPMG in
2004, joined NM Rothschild’s leveraged finance team in Manchester in 2007 before joining Cenkos Fund Managers
in 2008. Richard joined Seneca on launch in 2010. Richard has been involved in the development of all areas of
Seneca’s business and played a key role in its journey from start up to managing more than £130 million. He has
been a continuous member of Seneca’s investment and credit committees and has been involved in all of Seneca’s
EIS growth capital investments to date leading 30 of these. Richard became Managing Partner in 2016 and CEO
in 2017. He joined the Board of the Company in August 2018. As CEO of the Investment Manager, Richard is well
placed to provide the Company with timely and accurate updates in relation to the development of the B share
portfolio, ongoing fundraise progress, upcoming investments and the continuing administration of the Company.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 Directors’ Report
The Directors present their Report and the audited
Financial Statements for the year ended 31
December 2023.
The Directors consider that the Annual Report
and Financial Statements, taken as a whole are
fair, balanced and understandable and provide the
information necessary for shareholders to assess
the Company’s performance, business model and
strategy.
Review of Business Activities
The Directors are required by section 417 of the
Companies Act 2006 to include a Business Review
to shareholders. This is set out on page 34 and
forms part of the Strategic Report. The purpose of
the Business Review is to inform members of the
Company and help them assess how the Directors
have performed their duty under section 172 of the
Companies Act 2006 (duty to promote the success
of the Company). The Company’s Section 172(1)
Statement on page 8, the Chair’s Statement on page 9
to 12, and the Investment Manager’s Report on pages
14 to 33 also form part of the Strategic Report.
The purpose of this review is to provide shareholders
with a snapshot summary setting out the business
objectives of the Company, the Board’s strategy
to achieve those objectives, the risks faced, the
regulatory environment and the key performance
indicators used to measure performance.
Directors’ Shareholdings – Ordinary
Shares
The Directors’ interests in the Ordinary shares of
the Company (in respect of which transactions are
notifiable under Disclosure and Transparency Rule
3.1.2R) are shown in the table below:
31 December
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31 December
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All of the Directors’ shares were held beneficially.
There have been no changes in the Directors’
Ordinary share interests between 31 December 2023
and the date of this report.
Directors’ Shareholdings – B Shares
The Directors’ interests in the B shares of the
Company (in respect of which transactions are
notifiable under Disclosure and Transparency Rule
3.1.2R) are shown in the table below:
31 December
2023
31 December
2022
Number of
Shares
Number of
Shares
John Hustler
31,841
31,841
Alex Clarkson
10,060
10,060
Mary Anne Cordeiro
Ian Dighé
-
-
n/a
n/a
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Richard Manley
129,661
96,059
All of the Directors’ B shares were held beneficially.
There have been no changes in the Directors’ B share
interests between 31 December 2023 and the date of
this report.
Directors’ and Officers’ Liability
Insurance
The Company has, as permitted by legislation and
the Company’s Articles of Association, maintained
directors’ and officers’ liability insurance cover on
behalf of the Directors, Company Secretary and
Investment Manager.
Number of
Shares
Number of
Shares
Whistleblowing
John Hustler
190,000
190,000
Alex Clarkson
Mary Anne Cordeiro
Ian Dighé
Richard Manley
-
-
-
-
-
n/a
n/a
-
The Board has approved a Whistleblowing Policy
for the Company, its Directors and any employees,
consultants and contractors, to allow them to raise
concerns, in confidence, in relation to possible
improprieties in matters of financial reporting and
other matters.
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Bribery Act
The Board has a zero tolerance policy in relation to
bribery and corruption. The Board has approved an
Anti-Bribery Policy to ensure full compliance with
the Bribery Act 2010 and to ensure that the highest
standards of professional and ethical conduct are
maintained. Through internal controls reporting it
has sought to ensure adequate safeguards are in
place at its main third party suppliers.
Management
Seneca as the Company’s Investment Manager is
responsible for the management of the Company’s
B share pool investments. Responsibility for
the management of the Ordinary share pool
investments has been delegated to John Hustler,
the last remaining member of the current Board of
Directors who served immediately prior to Seneca’s
appointment as Investment Manager on 23 August
2018. Following his retirement, John Hustler has
agreed to continue as the sole member of the CAC
to carry out its responsibilities in relation to the
Ordinary share pool for the foreseeable future.
The strategies and policies which govern the
Investment Manager have been set by the Board in
accordance with section 172 of the Companies Act
2006.
•
• New Directors do not receive a formal induction
pack on joining the Board, though they do
receive a tailored induction process on an
individual basis.
The Company conducts a formal review as
to whether there is a need for an internal
audit function. The Investment Manager was
required to appoint a depositary as part of it
becoming a full-scope AIFM on 16 June 2022.
The Depositary is responsible for monitoring
the cash flows of the Company, overseeing the
holding of financial assets in custody on behalf
of the Company, verifying ownership interests,
oversight and supervision of the Investment
Manager and the Company and maintaining
accurate records in relation to the above as
required under the Alternative Investment Fund
Managers Directive (Directive 2011/61/EU),
transposed into UK law under the European
Union (Withdrawal) Act 2018 and as set out in
Fund 3.11 of the FCA Handbook of rules and
guidance. As a result, the Directors do not
consider that a formal internal audit function
would be required as an additional internal
control for the VCT at this time.
The Company does not have a Remuneration
Committee as it does not have any executive
directors.
The Company does not have a Nomination
Committee as these matters are dealt with by
the Board.
•
•
44
Corporate Governance Statement
The Board has considered the principles and
recommendations of the 2019 AIC Code. The
Company’s Corporate Governance policy is set out
on pages 49 to 52.
The 2019 AIC Code is available on the AIC website
(www.theaic.co.uk). It includes an explanation of
how the 2019 AIC Code adapts the Principles and
Provisions set out in the UK Corporate Governance
Code (the “UK Code”) to make them relevant for
investment companies.
The Company has complied with the
recommendations of the 2019 AIC Code and the
relevant provisions of the UK Code, except as set out
below:
•
The Company does not have a Chief Executive
Officer or a Senior Independent Director. The
Board does not consider a Chief Executive Offer
necessary as it does not have any executive
directors, however, the Directors believe that
given the recent expansion of the Board, it
would be appropriate to appoint a Senior
Independent non-executive Director at this
time. Mary Anne Cordeiro has agreed to become
the Company’s Senior Independent Director,
which will become effective following the AGM
from 15 May 2024.
For the reasons set out in the AIC Guide, and as
explained in the UK Corporate Governance Code,
the Board considers the above provisions are not
relevant to the position of the Company, being an
investment company run by the Board and managed
by the Investment Manager. In particular, all of the
Company’s day-to-day administrative functions are
outsourced to third parties. As a result, the Company
has no executive directors, employees or internal
operations.
Directors
Biographical details of the Directors are shown on
page 42.
John Hustler has informed the Board that having
served as a non-executive Director for nearly twenty-
three years, he will retire from the Board and so will
not stand for re-election at the forthcoming AGM on
15 May 2024. Ian Dighé, non-executive Independent
Director of the Company, has agreed to assume the
Chair of the Board on John’s retirement. Mary Anne
Cordeiro has agreed to become Senior Independent
Director also effective from the AGM.
In accordance with the Articles of Association
and good governance in line with practices
recommended in the 2019 AIC Code, following
notification of John Hustler’s wish to retire, only
four of the five Directors will offer themselves for re-
election/election at the forthcoming AGM.
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The Board is satisfied that, following individual
performance appraisals, the Directors who are
retiring and offer themselves for re-election continue
to be effective and demonstrate commitment to
their roles and have the full support of the Board.
Further details regarding the Company’s succession
planning are set out in the Corporate Governance
policy on pages 49 to 52.
The Board did not identify any conflicts of
interest between the Chair’s interest and those
of the shareholders, especially with regard to the
relationship between the Chair and the Investment
Manager.
No concerns about the operation of the Board or the
Company were raised by any Director during the year
and had any been raised they would be mentioned in
the minutes or in writing to the Chair to be circulated
to the Board in accordance with Provision 5.2 of the
2019 AIC Code.
The Board is cognisant of shareholders’ preference
for Directors not to sit on the boards of too many
listed companies (“over-boarding”). The Board is
satisfied that all Directors have the time to focus on
the requirements of the Company.
International Financial Reporting
Standards
As the Company is not part of a group it is not
mandatory for it to comply with International
Financial Reporting Standards (“IFRS”). The Company
does not anticipate that it will voluntarily adopt
IFRS. The Company has adopted Financial Reporting
Standard 102 – The Financial Reporting Standard
Applicable in the United Kingdom and the Republic
of Ireland.
Environmental, Social and
Governance (“ESG”) Practices
The Board recognises the requirement under
section 414c of the Companies Act 2006 to detail
information about environmental matters (including
the impact of the Company’s business on the
environment), employee and human rights, social
and community issues, including information about
any policies it has in relation to these matters and
effectiveness of these policies.
Given the size and nature of the Company’s activities
and the fact that it has no employees, the Board
considers there is limited scope to develop and
implement environmental, social and community
policies, but recognises the importance of including
consideration for such matters in investment
decisions. The Board has taken into account the
requirement of section 172(1) of the Companies
Act 2006 and the importance of ESG matters when
making decisions which could impact shareholders,
stakeholders and the wider community. The
Company’s Section 172(1) statement has been
provided in the Strategic Report on page 8, where
the Directors consider the information to be of
strategic importance to the Company.
The Company seeks to ensure that its business is
conducted in a responsible manner with regard
to the environment. The management and
administration of the Company is undertaken by the
Investment Manager who recognises the importance
of its environmental responsibilities, monitors its
impact on the environment and implements policies
to reduce any negative environmental impact and
which promote environmental sustainability.
The Investment Manager was approved by the FCA
with full-scope UK Alternative Investment Fund
Manager (“AIFM”) permission (as defined in regulation
2 of the AIF Regulations) on 16 June 2022. This full-
scope UK AIFM permission means that Seneca can
manage assets (including leverage) of greater than
€100 million. Additionally, the Investment Manager
is subject to increased requirements under the AIFM
Regulations 2013 (SI 2013/1773), and therefore
recognises that managing investments on behalf
of clients involves taking into account a wide set of
responsibilities, in addition to seeking to maximise
financial returns for investors. Industry practice in
this area has been evolving rapidly and the Company
seeks to be an active participant by working to
define and strengthen its principles accordingly. This
involves both integrating ESG considerations into the
Investment Manager’s investment decision-making
process as a matter of course, and also considering
guidance issued by external bodies who are leading
influencers in the formation of industry best practice.
The following is an outline of the kinds of ESG
considerations that the Investment Manager is taking
into account as part of its investment process.
Environmental
Seneca, as part of its commercial due diligence
practices and ongoing monitoring, examines
potential issues which could arise from supply
chains, climate change and environmental policy
compliance. The Investment Manager looks for
management teams who are aware of the issues and
are proactive in responding to them.
The Company utilises video conferencing facilities
for the majority of Board meetings to avoid
unnecessary travel where possible to reduce
our carbon imprint. The Board met virtually for
all but two Board meetings during the year. The
Company also encourages shareholders to receive
communications from the Company electronically
to reduce the impact of production and delivery of
additional paper products.
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Social
Going Concern
Seneca seeks to avoid unequivocal social negatives,
such as profiting from forced labour within its
investment portfolio and to support positive impacts
which will more likely find support from customers
and see rising demand. Seneca does not tolerate
modern slavery or human trafficking within its
business operations and takes a risk-based approach
in respect of our portfolio companies. Seneca
actively engages with portfolio companies and
their boards to discuss material risks, ranging from
business and operational risks to environmental and
social risks.
Seneca is also a proud signatory to the Investing in
Women Code, and commits to adopting internal
practices to improve female entrepreneurs’ access
to finance, tools and resources needed to grow their
businesses. Partners include the UK Business Angels
Association, the British Private Equity and Venture
Capital Association, UK Finance, and the British
Business Bank.
Governance
Seneca examines and, where appropriate,
engages with companies on board membership,
remuneration, conflicts of interest such as related
party transactions, and business leadership and
culture. In addition, the Company, as a matter of
course, exercises its voting rights when possible.
Greenhouse Gas (“GHG”) Emissions
and Streamlined Energy & Carbon
Reporting (“SECR”)
Under the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013 (‘the
2013 Regulations’) and the Companies (Directors’
Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018 (“the 2018
Regulations”), quoted companies of any size are
required under Part 15 of the Companies Act 2006 to
disclose information relating to their energy use and
GHG emissions.
All of the Company’s activities are outsourced
to third parties. The Company therefore has no
greenhouse gas emissions to report from its
operations, nor does it have direct responsibility
for any other emissions producing sources under
the 2013 Regulations and the 2018 Regulations. For
the same reasons as set out above, the Company
considers itself to be a low energy user under the
SECR regulations and therefore is not required to
disclose energy and carbon information. A low
energy user is defined as an organisation that uses 40
MWh or less during the reporting period.
The Company’s business activities and the factors
likely to affect its future performance and financial
position are set out in the Chair’s Statement and
Investment Manager’s Report on pages 9 to 12 and
pages 14 to 33. Further details on the management
of the principal risks are set out on pages 37 to 38
and financial risks may be found in Note 16 to the
Financial Statements.
The Board receives regular reports from Seneca
which acts as both the Investment Manager and
the Administration Manager, and the Directors
believe that, as no material uncertainties leading to
significant doubt about going concern have been
identified, it is appropriate to continue to adopt
the going concern basis in preparing the Financial
Statements.
The Company notes the continuing material market
volatility as a result of macroeconomic pressures,
including increased costs from inflationary pressures
as a result of the military invasion of Ukraine by
Russian forces and the current situation in the Middle
East. The Company’s Board and Investment Manager
are focused on ensuring that investee companies are
taking the required actions to minimise the potential
impact that these conditions could have on them.
The Board and Seneca will continue to review these
potential risks and keep those risks under regular
review but do not consider the current conditions to
have a material impact on the Company’s own ability
to continue as a going concern.
As at 31 December 2023, the assets of the Company
consist mainly of securities, seventeen of which are
AIM quoted, relatively liquid and readily accessible, as
well as £1.5 million of cash and £3.9 million invested
in three money-market funds to manage liquidity
(a combined 32% of net assets). After reviewing the
Company’s forecasts and expectations, the Directors
have a reasonable expectation that the Company
has adequate resources to continue in operational
existence for a period of at least 12 months from the
date of the signing of these Financial Statements. The
Company therefore continues to adopt the going
concern basis in preparing its Financial Statements.
Share Capital
The Company’s issued Ordinary share capital as at 31
December 2023 was 8,115,376 Ordinary shares of 1p
each (31 December 2022: 8,115,376 Ordinary shares
of 1p each) and 21,780,329 B shares of 1p each (31
December 2022: 18,749,559 B shares of 1p each). No
shares were held in Treasury.
The total number of shares in issue for both the
Ordinary shares and B shares of 1p each as at 31
December 2023 was 29,895,705 (31 December 2022:
26,864,935) with each share having one vote.
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As disclosed on page 91 the Board has authority to
make market purchases of the Company’s own B
shares. During the year, the Company purchased
108,291 B shares, with a nominal value of £1,082.91,
for cancellation at a weighted average price of 70.3p
per share at a total consideration of £76,147, which
represents 0.58% of the shares in issue at the prior
year end (2022: 27,793 B shares for cancellation
at 90.4p per share). Of the authority granted at
last year’s AGM to buyback shares after the above
purchases there remained unused authority to
purchase 2,916,896 shares, this authority will expire
at the next AGM.
At the last AGM held on 18 May 2023, the Board
received authority to allot up to 35,000,000 B shares
in connection with any offer(s) for subscription (and
any subsequent top up offer of B shares) and up
to 405,800 Ordinary shares (for any miscellaneous
offers of such shares), which represented
approximately 175% of the Company’s issued B share
capital and approximately 5% of its issued Ordinary
share capital as at 19 April 2023.
During the year, the Company did not issue any
Ordinary shares (2022: nil). During the year, the
Company issued 3,139,061 B shares raising £2.3
million before expenses (2022: 4,188,693 shares and
£3.9 million).
In accordance with Schedule 7 of the Large and
Medium Size Companies and Groups (Accounts
and Reports) Regulations 2008, as amended, the
Directors disclose the following information:
•
•
•
•
•
•
The Company’s capital structure and voting
rights are summarised above, and there are no
restrictions on voting rights nor any agreement
between holders of securities that result in
restrictions on the transfer of securities or on
voting rights;
There exist no securities carrying special rights
with regard to the control of the Company;
The rules concerning the appointment and
replacement of directors, amendment of the
Articles of Association and powers to issue or
buy back of the Company’s shares are contained
in the Articles of Association of the Company
and the Companies Act 2006;
The Company does not have an employee share
scheme;
There are no agreements to which the Company
is party that may affect its 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 following a
takeover bid or for any other reason, apart
from their normal notice period and any fees
potentially due under the performance fee
arrangements set out on page 58 and Note 5.
Substantial Shareholdings
At 31 December 2023 and at the date of this
report, there was one holding of 3% and over of
the Company’s ordinary share capital of which we
had been notified. This holding related to Mr and
Mrs Ian William Currie and at the date of this report
amounted to 3.38% (1,010,460 B shares) of the total
issued share capital of 29,895,705. Ian William Currie
is a Director of Seneca, the Investment Manager.
There has been no change in this between the year-
end and the date of this Report.
Annual General Meeting
The Notice convening the 2024 AGM of the
Company is set out at the end of this document (and
a form of proxy in relation to the meeting is enclosed
separately). Part of the business of the AGM will be
to consider resolutions in relation to the following
matters:
Resolution 1 will seek the approval of the
Company’s Annual Report and Financial Statements
and the auditors’ report thereon for the year ended
31 December 2023. The Directors are obliged to
lay the Company’s Annual Report and Financial
Statements and the auditors’ report thereon for the
year ended 31 December 2023 before shareholders
at a general meeting.
Resolution 2 seeks shareholder approval of the
Directors’ Remuneration Report 2023 which gives
details of the Directors’ remuneration for the
financial year ended 31 December 2023 and which is
set out on pages 56 to 59 of the Company’s Annual
Report and Financial Statements for financial year
ended 31 December 2023. In line with legislation, this
vote will be advisory and the Directors’ entitlement
to remuneration is not conditional on the resolution
being passed.
Resolutions 3 to 6 will seek the re-election of
Richard Manley and Alex Clarkson as non-executive
Directors of the Company, and the election of Mary
Anne Cordeiro and Ian Dighé, being their first AGM
since their appointment. John Hustler has informed
the Board that having served as a non-executive
Director for nearly twenty-three years, he will retire
as Chair and an independent non-executive Director
of the Company at the forthcoming AGM on 15 May
2024. Ian Dighé has agreed to assume the role of
Chair and Mary Anne Cordeiro will become Senior
Independent non-executive Director with effect
from the AGM on 15 May 2024.
Resolution 7 will seek the re-appointment of Royce
Peeling Green Limited as Independent Auditor to
the Company and authorisation to determine the
auditor’s remuneration.
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Resolution 8 will authorise the Directors to allot
further B shares and Ordinary shares. This will enable
the Directors until the next AGM to allot up to
35,000,000 B shares in connection with any offer(s)
for subscription (and any subsequent top up offer of
B shares) and up to 405,800 Ordinary shares (for any
miscellaneous offers of such shares), representing
approximately 175% of the Company’s issued B share
capital and approximately 5% of its issued Ordinary
share capital as at 20 March 2024.
Resolution 9 will authorise the Board, pursuant to
the Act, to make one or more market purchases of
up to 14.99% of the issued B share capital of the
Company from time to time. The price paid must not
be less than 1p per B share, nor more than 5% above
the average middle market price of a B share for the
preceding five business days. Any B shares bought
back under this authority may be cancelled by the
Board.
Resolution 10 will, under sections 570 of the
Act, disapply pre-emption rights in respect of any
allotment of the B shares and/or Ordinary shares
authorised under Resolution 8.
The Directors intend to use the authorities in
Resolutions 8 and 10 for the purposes of the current
Offer and a further offer for subscription of B shares.
The Directors have no current intention to utilise the
authority in relation to the Ordinary shares.
Copies of the 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 (Public Holidays excluded) from the date of
this notice, until the end of the AGM and at the place
of the AGM for at least 15 minutes prior to and during
the meeting. The Articles of Association will also be
available on the Company’s website at
www.senecavct.co.uk/reports-documents/.
Recommendation
The Board believes that the passing of the
resolutions above are in the best interests of the
Company and its shareholders as a whole and
unanimously recommends that you vote in favour
of these resolutions as the Directors intend to do in
respect of their beneficial shareholdings.
By Order of the Board
ISCA Administration Services Limited
Company Secretary
21 March 2024
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The Board has considered the principles and recommendations of the 2019 AIC Code.
The 2019 AIC Code addresses the Principles and Provisions set out in the UK Code, as well as setting out
additional Provisions on issues that are of specific relevance to the Company.
The Board considers that reporting against the Principles and Provisions of the 2019 AIC Code, which has been
endorsed by the Financial Reporting Council (and associated disclosure requirements under paragraph 9.8.6 of
the Listing Rules) provides more relevant information to shareholders.
The Company is committed to maintaining high standards in corporate governance and has complied with
the Principles and Provisions of the 2019 AIC Code, except as set out below. The Company strongly believes
that achieving its corporate governance objectives contributes to the long-term sustainable success of the
Company.
The 2019 AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how
the 2019 AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for
investment companies.
Board of Directors
The Company has a Board of five non-executive Directors, details of each can be found on page 42. They meet
on a regular basis to review the investment performance and monitor compliance with the investment policy
laid down by the Board as set out in the Strategic Report on page 7.
The Board has a formal schedule of matters specifically reserved for its decision which include:
49
1.
2.
the consideration and approval of future developments or changes to the investment policy, including risk
and asset allocation;
the consideration and review of the Company’s compliance with HMRC conditions for maintenance of
approved VCT status as advised by Shoosmiths LLP;
3. consideration of corporate strategy;
4. approval of the appropriate dividend to be paid to shareholders;
5.
the appointment, evaluation, removal and remuneration of the Investment Manager, which also acts as the
Administration Manager;
the performance of the Company, including monitoring the discount of the share price to net asset value;
and
6.
7. monitoring shareholder profiles and considering shareholder communications.
The Chair leads the Board in the determination of its strategy and in the achievement of its objectives. The Chair
is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. He
facilitates the effective contribution of the Directors and ensures that they receive accurate, timely and clear
information and that the Company communicates effectively with shareholders in accordance with the Board’s
duty to promote the success of the Company.
The Company Secretary is responsible for advising the Board through the Chair on all governance matters.
All of the Directors have access to the advice and services of the Company Secretary, who has administrative
responsibility for the meetings of the Board and its Committees. Directors may also take independent
professional advice at the Company’s expense where necessary in the performance of their duties.
The Company’s Articles of Association and the schedule of matters reserved to the Board for decision provide
that the appointment and removal of the Company Secretary is a matter for the full Board.
Attendance at Board and Audit Committee meetings during the year were as follows:
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Board Meetings
Audit Committee Meetings
Entitled to attend
Attended
Entitled to attend
Attended
John Hustler
Alex Clarkson
Mary Anne Cordeiro*
Ian Dighé**
Richard Manley
Richard Roth***
7
7
4
2
7
3
7
7
4
2
7
3
2
2
1
-
1
1
2
2
1
-
1
1
* appointed on 18 May 2023, **appointed 11 October 2023, ***retired 18 May 2023
In addition to formal Board meetings, the Board communicates on a regular basis in carrying out its
responsibilities in managing the Company.
Diversity
The Directors are aware of the need to have a Board
which, as a whole, comprises an appropriate balance
of skills, experience and diversity. New regulations
require the Company to report on a comply or explain
basis against three key indicators: 40% of the Board
should be comprised of women; one senior board
position is held by a woman; and one Director should
be from an ethnic minority background. Whilst the
Company did have one female Board member at the
year-end (20% of the Board), the Company did not
meet the targets of 40% for splits on diversity, or the
holding of one senior position by a woman, however
it does meet its target on ethnicity as Mary Anne
Cordeiro identifies as British Asian.
The changes proposed following the Company’s
forthcoming AGM, will impact on the year-end
position as stated above. Following the AGM on
15 May 2024, the number of Board members will
reduce to four and will take the percentage of
women members from 20% to 25% of the Board. At
this time Mary Anne Cordeiro will also be appointed
as the Senior Independent Director, meeting the
requirement that at least one of the senior positions
on the Board of Directors is held by a woman.
Although the Company will not meet the
requirements for 40% female members of the
Board, any future recruitment will be mindful of this,
providing a suitable candidate possesses the key
skills and experience required for the position. The
Board maintains a policy of considering diversity
when reviewing Board composition and has made
a commitment to consider diversity when making
future appointments. The Board will always appoint
the best person for the job. It will not discriminate
on the grounds of gender, race, ethnicity, religion,
sexual orientation, age or physical ability.
Consumer Duty
The Directors approved the Investment Manager’s
implementation plan as per the Consumer Duty
requirements, which was in place by 31 July 2023
when the new requirements came into effect.
Whilst many requirements do not directly impact
the VCT, Seneca provides the Company with regular
updates as to the processes and procedures being
implemented by the Investment Manager to comply
with Consumer Duty requirements as they relate to
investors, investor relations and the Offer for new
shares.
Independence of Directors
The Board regularly reviews the independence of
its members and is satisfied that the Company’s
Directors are independent in character and judgment
and that there are no relationships or circumstances
which could affect their objectivity (with the
exception of Richard Manley who is the CEO of the
Investment Manager).
The 2019 AIC Code recommends that where a
Director has served for more than nine years, the
Board should state its reasons for believing that
the individual remains independent. The Board is
of the view that a term of service in excess of nine
years is not in itself prejudicial to a Director’s ability
to carry out his or her duties effectively and from
an independent perspective; the nature of the
Company’s business is such that individual Directors’
experience and continuity of Board membership
can significantly enhance the effectiveness of the
Board as a whole. However, the Board has applied
the provision that all Directors are to seek annual
re-election and has determined a policy of tenure
for the Chair and believes that both are essential
in balancing the business of the Company whilst
providing opportunity for regular refreshment and
increasing the diversity of the Board.
Directors are appointed with the expectation that
they will serve for a period of at least three years
and all Directors will retire at the first general
meeting after election and will be subject to
annual re-election thereafter in line with practices
recommended in the 2019 AIC Code. It is the
Company’s policy of tenure to review individual
appointments every year, with increased scrutiny
after nine years of service to consider whether the
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Director is still independent and still fulfils the role.
However, in accordance with the principles of the
2019 AIC Code, we do not consider it necessary
to mandatorily replace a Director, including the
Chair, after a predetermined period of tenure. A
more flexible approach to Chair tenure will help
the Company manage succession planning in the
context of the business needs of the Company,
whilst at the same time still addressing the need for
regular refreshment and diversity. The Company’s
report on Independence, Gender and Diversity is on
page 40.
In view of the Company’s succession policy and
the length of the Chair’s tenure as a Director of the
Company, having served as a non-executive Director
for nearly twenty-three years, John Hustler will retire
from the Board and therefore will not stand for re-
election at the forthcoming AGM on 15 May 2024.
The Board has resolved to appoint Ian Dighé as Chair.
Mary Anne Cordeiro has agreed to become Senior
Independent Director also effective from the AGM.
Alex Clarkson and Richard Manley will continue as
Directors of the Company with Alex also continuing
to serve as Chair of the Audit Committee.
Remuneration in addition to the Directors’ fees in the
form of a performance incentive fee is potentially
payable to those Directors serving prior to 23 August
2018 subject to certain conditions as set out in
the Directors’ Remuneration Report and Policy on
pages 56 to 59. Having regard for the historic nature
and circumstances under which the performance
incentive fees were agreed, the Board does not
believe that the performance incentive fees in any
way impact or hinder the Directors’ independence
or present a conflict of interest which could
compromise or override independent judgment of
the Directors.
Performance Evaluation
In accordance with the 2019 AIC Code, each year
a formal performance evaluation is undertaken
of the Board as a whole, its Committees and the
Directors in the form of one-to-one meetings or
telephone calls between the Chair and each Director.
The Directors were made aware of the annual
performance evaluation on their appointment.
The Board considers the size of the Company, the
number of independent non-executive Directors
on the Board and the robustness of the reviews
to be such that an external Board evaluation is
unnecessary. Annual evaluations of the Board
consider its composition, diversity, succession
planning and how effectively members work
together to achieve objectives as well as individual
contributions. The Chair provides a summary of the
findings to the Board, which are discussed at the next
meeting and an action plan agreed. The performance
of the Chair is evaluated by the other Directors. The
Board did not have a Senior Independent Director
during the year, but Mary Anne Cordeiro has agreed
to become Senior Independent Director also
effective from the forthcoming AGM. Mary Anne is
well suited for the role, having previously served as
Senior Independent Director at Albion Technology &
General VCT Plc.
The Board sets out the assessment of its members
and explains why its members are and continue to be
of importance to the long-term sustainable success
of the business on pages 44 to 45.
The Board reviews the performance of the
Investment Manager on an ongoing basis, both
formally and outside of Board meetings with
regard to its appointment, evaluation, removal
and remuneration, in both contexts of its role as
Investment Manager and Administration Manager.
The Board considers the Company’s size to be
such that it would be unnecessarily burdensome
to establish a separate management engagement
committee to perform this role.
Board Committees
The Board does not have a separate remuneration
committee, as the Company has no employees or
executive directors. Detailed information relating
to the remuneration of Directors is given in the
Directors’ Remuneration Report and Policy on pages
56 to 59.
The Board as a whole considers the selection and
appointment of Directors and reviews Directors’
remuneration on an annual basis. The Board considers
the Company’s size to be such that it is unnecessary
to form a separate committee for the purposes of
nomination. When making an appointment, the
Board draws on its members’ extensive business
experience and range of contacts in addition to the
use of external recruitment consultants. The Board
continues to speak regularly about Board composition
and succession planning in order to identify and
address any issues that may arise.
The Board has appointed an Audit Committee to
make recommendations to the Board in line with
its terms of reference. The committee is chaired by
Alex Clarkson and consists of all Independent non-
executive Directors, which does not include Richard
Manley due to his affiliation with the Investment
Manager as CEO. The Audit Committee believes
Alex Clarkson possesses appropriate and relevant
financial experience as per the requirements of
the 2019 AIC Code. The Board considers that the
members of the Committee have collectively the
skills and experience required to discharge their
duties effectively.
The Audit Committee’s terms of reference, and how
it discharges its duties are listed on pages 54 to 55.
Internal Control
The Directors have overall responsibility for keeping
under review the effectiveness of the Company’s
systems of internal controls. The purpose of these
controls is to ensure that proper accounting
records are maintained, the Company’s assets are
safeguarded and the financial information used
within the business and for publication is accurate
and reliable; such a system can only provide
reasonable and not absolute assurance against
material misstatement or loss. The system of internal
controls is designed to manage rather than eliminate
the risk of failure to achieve the business objectives.
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The Board continually reviews financial results and
investment performance. The Board also monitors
and evaluates external service providers and
maintains regular discussions with the Investment
Manager about the services provided. The
Investment Manager reviews the service contracts on
an annual basis and discusses any recommendations
with the Board as relevant.
Neville Registrars is the custodian of the documents
of title relating to the Company’s unquoted
investments.
Seneca is also the Administration Manager in addition
to its role as the Investment Manager.
The Directors confirm that they have established a
continuing process throughout the year and up to
the date of this report for identifying, evaluating and
managing the significant potential risks faced by the
Company and have reviewed the effectiveness of
the internal control systems. As part of this process
an annual review of the internal control systems is
carried out in accordance with the FRC’s Guidance
on Risk Management, Internal Control and Related
Financial and Business Reporting.
The risk management and internal control systems
include the review of monthly bank statements and
the production and review of quarterly management
accounts. All outflows made from the Company’s cash
accounts require the authority of signatories from the
Board. The Company is subject to a full annual audit.
Further to this, the Senior Statutory Auditor has open
access to the Directors of the Company.
Additionally, the Investment Manager is required
to have a depositary as part of its full-scope AIFM
status. Seneca appointed Thompson Taraz Depositary
Limited who is responsible for monitoring the cash
flows of the Company, overseeing the holding
of financial assets in custody on behalf of the
Company, verifying ownership interests, oversight
and supervision of the Investment Manager and
the Company and maintaining accurate records in
relation to the above as required under the Alternative
Investment Fund Managers Directive (Directive
2011/61/EU), transposed into UK law under the
European Union (Withdrawal) Act 2018 and as set
out in Fund 3.11 of the FCA Handbook of rules and
guidance.
Financial Risk Management
Objectives and Policies
The Company is exposed to the risks arising from its
operational and investment activities. Further details
can be found in Note 16 to the Financial Statements.
Relations with Shareholders
Shareholders have the opportunity to meet the
Board at the AGM. In addition, shareholders have
the opportunity to engage directly with the Board as
part of the regular shareholder update presentations
as detailed in the Strategic Report starting on page
5 and the Board is available to answer any questions
a shareholder may have and is happy to respond to
written queries made by shareholders during the
course of the year. The Board can be contacted
at the Company’s registered office: 9 The Parks,
Haydock, WA12 0JQ or via email at enquiries@
senecavct.co.uk.
Compliance Statement
As previously indicated, the Board considers
that reporting against the principles and
recommendations of the 2019 AIC Code will provide
better information to shareholders.
The Company has complied with the
recommendations of the 2019 AIC Code and the
relevant provisions of the UK Corporate Governance
Code, except as set out below:
•
The Company does not have a Chief Executive
Officer as the Board does not consider it
necessary as it does not have any executive
directors. However, the Directors believe that
further to the recent changes in the members
of the Board, it would now be appropriate to
appoint a Senior Independent non-executive
Director. Accordingly, Mary Anne Cordeiro
has agreed to become the Company’s Senior
Independent Director, which will become
effective from the AGM on 15 May 2024.
•
• New Directors do not receive a formal induction
on joining the Board, though they do receive
one tailored to them on an individual basis.
The Company conducts a formal review as to
whether there is a need for an internal audit
function. The Investment Manager was required
to appoint a depositary as part of its full-scope
AIFM status who is responsible for monitoring
the cash flows of the Company, overseeing the
holding of financial assets in custody on behalf
of the Company, verifying ownership interests,
oversight and supervision of the Investment
Manager and the Company and maintaining
accurate records in relation to the above as
required under the Alternative Investment Fund
Managers Directive (Directive 2011/61/EU),
transposed into UK law under the European
Union (Withdrawal) Act 2018 and as set out in
Fund 3.11 of the FCA Handbook of rules and
guidance. As a result, the Directors do not
consider that a formal internal audit function
would be a required additional internal control
for this VCT at this time.
The Company does not have a Remuneration
Committee as it does not have any executive
directors.
The Company does not have a Nomination
Committee as these matters are dealt with by
the Board.
•
•
For the reasons set out in the 2019 AIC Code, and
as explained in the UK Corporate Governance Code,
the Board considers the above provisions are not
relevant to the position of the Company, being an
investment company run by the Board and managed
by the Investment Manager. In particular, all of the
Company’s day-to-day administrative functions are
outsourced to third parties. As a result, the Company
has no executive directors, employees or internal
operations.
By Order of the Board
ISCA Administration Services Limited
Company Secretary
21 March 2024
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Statutory
Reports
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Audit Committee Report
This report is submitted in accordance with the 2019
AIC Code in respect of the year ended 31 December
2023 and describes the work of the Audit Committee
in discharging its responsibilities.
The Committee’s key objective is the provision
of effective governance and oversight of the
appropriateness of the Company’s financial
reporting, the performance of the auditor and the
management of the internal control and business
risks systems. The Directors forming the Audit
Committee can be found on page 51.
The Audit Committee’s terms of reference include
the following responsibilities:
•
•
•
•
•
reviewing and making recommendations to the
Board in relation to the Company’s published
Annual Report and Financial Statements and
other formal announcements relating to the
Company’s financial performance;
advising the Board on whether the Annual
Report and Financial Statements, taken as a
whole, is fair, balanced and understandable;
advising the Board on whether the Annual
Report and Financial Statements provides
necessary information for shareholders to assess
performance, business model and strategy;
reviewing and making recommendations to
the Board in relation to the Company’s internal
control (including internal financial control) and
risk management systems;
periodically 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
the effectiveness of the audit process, taking
into consideration relevant UK professional
regulatory requirements; and
• monitoring the extent to which the external
auditor is engaged to supply non-audit services.
As part of the process of working with the Board to
maximise effectiveness, meetings of the Committee
usually take place immediately prior to a Board
meeting when appropriate and a report is provided
on relevant matters to enable the Board to carry out
its duties.
The Committee reviews its terms of reference and
its effectiveness periodically and recommends to
the Board any changes required as a result of the
review. The full terms of reference are available
on request from the Company Secretary. The
Committee meets at least twice each year and on
an ad hoc basis as necessary. It has direct access
to the Company’s external auditor. During the
year we tendered the Company’s audit and after
a rigorous selection process RPG were chosen to
fill the casual vacancy. The Committee is happy
to recommend RPG for reappointment at the
AGM in relation to the audit for the year ending
31 December 2024. RPG do not provide any non-
audit services and as such, the Committee does not
believe there is any risk that any non-audit services
can influence their independence or objectivity due
to any associated fee. When considering whether
to recommend the reappointment of the external
auditor the Committee takes into account the
quality of service, tenure of the current auditor in
addition to comparing the fees charged by similar
sized audit firms. Once the Committee has made
a recommendation to the Board in relation to the
appointment of the external auditor, this is then
ratified at the AGM through an Ordinary Resolution.
A resolution to approve the reappointment of RPG
will be proposed at the AGM on 15 May 2024 which
has been included in the Notice of AGM on pages 98
to 99.
The effectiveness of the external audit is assessed
as part of the Board evaluation conducted annually
and by the quality and content of the Audit Plan and
Report provided to the Committee by the Auditor
and the resulting discussions on topics raised. The
Committee also challenges the Auditor when present
at a Committee meeting if appropriate.
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. The Investment Manager was required to
appoint a depositary as part of its full-scope AIFM
status who is responsible for monitoring the cash
flows of the Company, overseeing the holding
of financial assets in custody on behalf of the
Company, verifying ownership interests, oversight
and supervision of the Investment Manager and
the Company and maintaining accurate records
in relation to the above as required under the
Alternative Investment Fund Managers Directive
(Directive 2011/61/EU), transposed into UK law under
the European Union (Withdrawal) Act 2018 and as set
out in Fund 3.11 of the FCA Handbook of rules and
guidance. As a result, the Directors do not consider
that a formal internal audit function would be a
required additional internal control for this VCT at
this time.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
•
•
Compliance with HMRC conditions for
maintenance of approved VCT status:
Shoosmiths LLP provide the Company with
advice on the on-going compliance with the
HMRC rules and regulations concerning VCTs
and the Investment Manager and the Board
review the advice.
Recognition of revenue from investments:
Money market fund investment income
represented 100% of the Company’s income in
2023. Revenue is recognised when the VCT’s
right to the return is established in accordance
with the Statement of Recommended Practice.
Seneca confirms to the Audit Committee that
the revenues are recognised appropriately.
These issues were discussed with Seneca, the Board
of Seneca Growth Capital and the Auditors at the
pre-year end audit planning meeting and at the
conclusion of the audit of the Annual Report and
Financial Statements.
The Audit Committee is also responsible for
considering and reporting on any significant issues
that arise in relation to the audit of the Financial
Statements. The Audit Committee can confirm that
there were no significant issues to report to the
shareholders in respect of the audit of the Financial
Statements for the year ended 31 December 2023.
Alex Clarkson
Audit Committee Chair
21 March 2024
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The Committee will monitor the significant risks at
each meeting and the Administration Manager will
work closely with the Auditors to mitigate the risks
and the resulting impact.
During the year ended 31 December 2023, the Audit
Committee discharged its responsibilities by:
•
•
•
•
•
•
•
•
tendering for and appointing new auditors;
reviewing and approving the external auditor’s
terms of engagement and remuneration;
reviewing the external auditor’s plan for the
audit of the Company’s Annual Report and
Financial Statements, including identification
of key risks and confirmation of auditor
independence;
reviewing Seneca’s statement of internal
controls in relation to the Company’s business
and assessing the effectiveness of those controls
in minimising the impact of key risks;
reviewing the appropriateness of the Company’s
accounting policies;
reviewing the Company’s draft Annual Report
and Financial Statements and Interim results
statements prior to Board approval;
reviewing the Company’s going concern status
as referred to on pages 46 and 80; and
reviewing the external auditor’s Report to
the Audit Committee on the annual Financial
Statements.
The Committee has considered the Annual Report
and Financial Statements for the year ended 31
December 2023 and has reported to the Board
that it considers them to be fair, balanced and
understandable and providing the information
necessary for shareholders to assess the Company’s
performance, business model and strategy.
Significant Risks
The Audit Committee is responsible for considering
and reporting on any significant risks that arise
in relation to the audit of the Annual Report and
Financial Statements.
The key areas of risk that have been identified and
considered by the Audit Committee in relation to the
business activities and financial statements of the
Company are as follows:
•
Valuation and ownership of investment
portfolio: The impact of this risk could be a
large movement in the Company’s net asset
value. Guidelines, discussions, reviewing and
challenging the basis and reasonableness of
assumptions made in conjunction with available
supporting information goes into the valuation
process. The valuations are supported by
investee company Financial Statements and/or
third-party evidence where possible. Otherwise,
valuations are supported by the share price of
the most recent fundraising and/or management
information. These give comfort to the Audit
Committee.
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Directors’ Remuneration Report
and Policy
Annual Remuneration Report
This report is submitted in accordance with the
requirements of s420-422 of the Companies Act
2006, in respect of the year ended 31 December
2023. A resolution to approve the Directors’
Remuneration Report will be proposed at the
Annual General Meeting on 15 May 2024. The
Directors’ Remuneration Policy must be proposed
for shareholder approval at least every three years,
or earlier if there is a proposed change to the
Remuneration Policy. The Remuneration Policy was
last approved by shareholders at the Annual General
Meeting on 27 April 2022 and will be proposed for
shareholder approval again in 2025, unless there is a
proposed change before then.
The Company’s independent auditor, RPG, is
required to give its opinion on certain information
included in this report as indicated below. Their
report on these and other matters is set out on pages
62 to 66.
Statement from the Chair of the
Board In Relation to Directors’
Remuneration Matters
The Board is mindful of its obligation to set
remuneration at levels which will attract and
maintain an appropriate calibre of individuals
whilst simultaneously protecting the interests of
shareholders.
During the year to 31 December 2023, the Board
reviewed its existing remuneration levels, having
considered the remuneration payable to non-
executive directors of comparable VCTs, the demand
for non-executive directors within the financial
sector and the increasing regulatory requirements
with which the sector is required to comply. The
Board agreed to leave Directors’ fees unchanged
during the year (and in line with the prior year as
shown in the table on page 58) but continues to keep
them under review. As with any Board comprising
solely of non-executive directors it is unlikely that
a Director can fully abstain from any discussion
or decision concerning their own fees. Director’s
remuneration consists of a base fee for all Directors
and each Director participated in the process of
setting the level of this fee. Additional fees have been
set for the role of Chair of the Audit Committee and
the individual Director did not participate in setting
the additional fee for their own specific role. The
Board considers that this process is consistent with
the spirit of the AIC Code on the setting of Directors’
fees.
The Company’s Articles of Association limit the
aggregate amount that can be paid to the Directors
in fees to £150,000 per annum.
At the AGM held on 18 May 2023, the following votes
were cast in the Poll voting on the Remuneration
Report:
Number of
votes
% of votes
cast
1,307,203
92.31
66,266
4.68
3.01
For
Against
For
Against
At Chair’s discretion
42,576
Total votes cast
1,416,045
100 .00
Number of votes
withheld
26,630
The Remuneration Policy was also last approved by
the shareholders at the AGM held on 27 April 2022.
Number of
votes
% of votes
cast
2,265,415
99.52
4,979
0.22
0.26
At Chair’s discretion
6,000
Total votes cast
2,276,394
100 .00
Number of votes
withheld
59,418
Directors’ interests
The Directors’ interests, including those of
connected persons in the issued share capital of the
Company are outlined below. There is no minimum
holding requirement that the Directors need to
adhere to.
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Ordinary Shares
31 December 2023
31 December 2022
Shares
% of share capital
Shares
% of share capital
John Hustler (Chair)
190,000
2.34
190,000
2.34
Mary Anne Cordeiro
Alex Clarkson
(Chair of the Audit Committee)
Ian Dighé
Richard Manley
B Shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31 December 2023
31 December 2022
Shares
% of share capital
Shares
% of share capital
John Hustler (Chair)
Mary Anne Cordeiro
Alex Clarkson
(Chair of the Audit Committee)
Ian Dighé
Richard Manley
31,841
-
10,060
-
129,661
0.15
-
0.05
-
0.60
31,841
-
10,060
-
96,059
0.17
-
0.07
-
0.51
There have been no changes in the Directors’
interests since 31 December 2023. No options over
the share capital of the Company have been granted
to the Directors.
Details of the Directors’ remuneration are disclosed
below and in Note 4 on page 84.
Pensions (Information Subject to Audit)
None of the Directors receives, or is entitled to
receive, pension benefits from the Company.
Share options and long-term incentive schemes
(Information Subject to Audit)
The Company does not grant any options over the
share capital of the Company nor operate long-term
incentive schemes.
Relative spend on pay
The table below sets out:
a)
b)
the remuneration paid to the Directors; and
the distributions made to shareholders by way
of dividends paid in the financial year ended 31
December 2023 and the preceding financial year.
No shares are held in Treasury.
Year ended
31 December
2023
Year ended
31 December
2022
Change
%
74,824
65,000
15.1
791,730
700,400
13.0
Total
remuneration
Dividends paid
(Note 14)
Directors’ Emoluments (Information Subject to
Audit)
The total emoluments in respect of qualifying
services of each person who served as a Director
during the year are as set out in the table below.
Richard Roth was entitled to a £2,000 payment for
remaining as a member of the CAC for a period of
three months following his retirement on 18 May
2023.
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Directors’ Fees
Year ended
31 December
2023
Year ended
31 December
2022
£
£
16,558
15,000
16,558
15,000
10,839
3,814
-
-
John Hustler
(Chair)
Alex Clarkson
(Chair of the Audit
Committee)
Mary Anne
Cordeiro*
Ian Dighé**
Richard Manley
16,490
15,000
Richard Roth***
10,565
20,000
Total
74,824
65,000
* appointed on 18 May 2023
** appointed 11 October 2023
*** retired 18 May 2023
The Directors did not receive any other form of
emoluments in addition to the Directors’ fees during
the year. John Hustler and Richard Roth, as members
of the CAC, may be entitled to performance fees
in the future as referred to below. Directors may
be entitled to fees from investee companies
when acting on the Company’s behalf as Director,
Observer or Consultant to those investees; however,
no Directors currently perform such a role in relation
to the Ordinary share pool and any fee that could
be payable in relation to the B share pool would be
payable to Seneca and would be disclosed in Note
19. The Board will ensure that any such fee would
not present a conflict of interest which could impact
its independent judgement.
Total Shareholder Return Performance Graph
The graphs on pages 34 to 35 compare the NAV
return (rebased to 100) of the Company’s Ordinary
shares over the period from October 2001 to
December 2023 and the B shares from August 2018
to December 2023, with the total return from a
notional investment (rebased to 100) in the FTSE AIM
All-Share Index over the same period. This index is
considered to be the most appropriate equity market
against which investors can measure the relative
performance of the Company due to average market
cap per listing, risk profile and its investor base being
more directly comparable to the Company’s.
Statement of the Company’s policy on Directors’
Remuneration
The Board manages the Company and consists of
five non-executive Directors, who meet formally
as a Board at least four times a year and on other
occasions as necessary, to deal with the important
aspects of the Company’s affairs. Seneca is the
Company’s Investment Manager and is responsible
for the management of the investments made from
the B share pool, although management of the
investments in the Company’s Ordinary share pool
has been delegated to the remaining members of the
Board of the Company serving immediately prior to
the appointment of Seneca (the CAC), which now
consists of John Hustler.
The performance incentive fees relevant to those
Directors serving up to 7 October 2015 were revised
under an agreement dated 7 October 2015 (the
“Accrued Performance Incentive Fee”). The new
arrangements froze the sum due to those Directors
serving up to 7 October 2015 at £702,000 (the
accrued liability as disclosed in the 2014 audited
Financial Statements) which will only start to become
payable once a further 8.75p of dividends have been
paid in respect of each Ordinary share (such that
original subscribing shareholders will have received
80p per share in dividends). As no liability is payable
to any relevant Director more than five years after
his resignation from the Company, James Otter is
no longer entitled to any such fee: as explained in
Note 5, his potential share of any liability has been
extinguished and the remaining total potential
liability under the Accrued Performance Incentive
Fee has been reduced to £468,000. This liability will
then be paid at the rate of 16.67% of subsequent
dividends until a liability of £468,000 has been
discharged; this is in keeping with the original
approved arrangement. Following the payment
of this liability, any further performance fee in the
future will be payable at the reduced rate of 10% of
total distributions above the audited total return at
31 December 2014, with the outstanding balance
subject to a hurdle rate of 6% per annum, and will
be split between the members of the CAC based
on a formula driven by relative length of service
starting from 7 October 2015 (“Further Performance
Incentive Fee”). Further details of the revised
arrangements are set out in Note 5 to the Financial
Statements.
The Company entered into an agreement with
Charles Breese following his resignation on 10 June
2019 that he may be entitled to a pro rata proportion
of performance fees as set out in Note 5 to the
Financial Statements.
The Board as a whole considers Directors’
remuneration and has not appointed a separate
committee in this respect.
The Board increased Directors’ fees in the year from
£15,000 per annum to £17,500 per annum with effect
from the last AGM on 18 May 2023. The Company
also began covering travel expenses of the non-
executive Directors with effect from the same date.
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Company Strategy
To provide shareholders with an attractive income and capital return by investing its funds in a portfolio of both
unquoted and AIM/AQSE quoted UK companies. which meet the relevant criteria under the VCT rules.
Terms of Appointment
Directors are appointed with the expectation that they will serve for a period of at least three years. All Directors
retire at the first general meeting after election and thereafter will be subject to re-election on an annual basis in
line with practices recommended in the 2019 AIC Code. Re-election will be recommended by the Board but is
dependent upon a shareholder vote.
Each Director has received a letter of appointment. A Director may resign by notice in writing to the Board at
any time. Current and former members of the CAC are entitled to a pro rata proportion of any performance fees
payable to the CAC, accruing at the date of resignation up to five years from the date of resignation.
By order of the Board
ISCA Administration Services Limited
Company Secretary
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Directors’ Responsibilities
Statement
The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law
the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). 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 and profit or loss of the Company for that period.
In preparing these Financial Statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and estimates that are reasonable and prudent;
•
state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the Financial Statements; and
prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
•
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 the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of Financial Statements may differ from legislation in other jurisdictions.
Each of the Directors confirms that, to the best of their knowledge:
•
•
•
•
there is no relevant audit information of which the Company’s auditor is unaware;
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant
audit information and to establish that the auditor is aware of that information;
the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
the Investment Manager’s Report, Business Review and Directors’ Report include a fair review of the
development and performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties that it faces.
On behalf of the Board
John Hustler
Chair
21 March 2024
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Auditor’s
Report
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Independent Auditor’s Report to
the Members of Seneca Growth
Capital VCT Plc
Opinion
We have audited the financial statements of Seneca Growth Capital VCT Plc (the ‘Company’) for the year ended
31 December 2023 which comprise the Income Statements, Balance Sheets, Statements of Changes in Equity,
Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The
financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable
in the UK and Republic or Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Company’s affairs as at 31 December
2023 and of its loss for the year then ended;
the financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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 are 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. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We were appointed by the Board on 29 November 2023 to audit the financial statements for the year ended 31
December 2023 and subsequent financial periods. Our total uninterrupted period of engagement is one year.
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 Standards 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 the FRC’s Ethical Standard were not provided to the Company.
Our audit opinion is consistent with the additional report to the Audit Committee.
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.
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.
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 the year
end, and reviewing the calculations therein to check that the Company was meeting the requirements to
retain VCT status;
• Discussing future plans with management, including the expectation of future compliance with VCT
•
legislation, reviewing forecasts including expected cash flows and considering the appropriateness and
sensitivity of assumptions used in the preparation of those forecasts; and
Reviewing the results of subsequent events and assessing the impact on the financial statements and
considering whether management have used all relevant information in their assessment and enquiring
whether any known events or conditions beyond the period of assessment may affect going concern.
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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.
Our Approach to the Audit
The audit was scoped by obtaining an understanding of the Company and its environment, including the
Company’s systems 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.
Our Application of Materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect
of misstatements on our audit and on the financial statements. For the purposes of determining whether
the financial statements are free from material misstatement, we define materiality as the magnitude of
misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person
would be changed or influenced. We also determine a level of performance materiality which we use to assess
the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
We determined the materiality for the financial statements as a whole to be £172,000 (2022: £184,000) based on
1% of gross assets (2022: 1% of gross assets).
Performance materiality was set at £129,000 (2022: £138,000), being 75% of financial statement materiality
having considered a number of factors including the level of transactions in the year and the expected total
value of known and likely misstatements.
For income statement and balance sheet items not related to investment balances and movements, we
determined that misstatements of lesser amounts than materiality for the financial statements as a whole
would make it probable that the judgement of users, relying on the information would have been changed or
influenced by the misstatement or omission. Accordingly, we set a specific materiality figure of £134,000 (2022:
£121,000) for these other balances. Performance materiality was set at £100,000 (2022: £91,000). The specific
materiality was based on 5% of loss before tax (2022: 25% of Company’s net revenue return).
We agreed with the board that we shall report to them misstatements in excess of £6,750 that we identify
through the course of the audit, together with any qualitative matters that warrant reporting.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, 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) 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.
As set out below we have determined management override of controls and valuation of unquoted investments
to be the key audit matters to be communicated in our report.
Key audit matter : Management override of controls
Under ISA (UK) 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, there is
a presumed significant risk of management override of the system of internal controls.
The primary responsibility for the prevention and detection of fraud rests with management. Their role in the
detection of fraud is an extension of their role in preventing fraudulent activity.
Management are responsible for establishing a sound system of internal control designed to support the
achievement of policies, aims and objectives and to manage risks facing an entity; this includes the risk of
fraud.
Management are in a unique position to perpetrate fraud because of their ability to manipulate accounting
records and prepare fraudulent financial statements by overriding controls that otherwise appear to be
operating effectively.
How our scope addressed this matter
We considered the potential for the manipulation of financial results to be a significant fraud risk.
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Our work in this area included:
•
•
•
•
Review of journals processed during the period and in the preparation of the financial statements to
determine whether these were appropriate.
Review of bank transactions throughout the period and since the year end for material, round sum or
unusual amounts and evidenced these back to appropriate documentation.
Review of key estimates, judgements and assumptions within the financial statements for evidence of
management bias and agreement of any such to appropriate supporting documentation.
Assessment of whether the financial results and accounting records included any significant or unusual
transactions where the economic substance was not clear.
Our conclusion
Based on the procedures performed, we are satisfied that the accounting records and financial statements are
free from material misstatement in this respect.
Key audit matter: Valuation of unquoted investments
Due to the material value of unquoted investments which involves a significant amount of judgement and
estimation, the valuation of such financial instruments is considered to be a significant risk.
How our scope addressed this matter
For unquoted investments we have:
• Obtained an understanding of how the valuations were performed, considered whether the method
chosen was in accordance with IPEV guidance and FRS 102, and challenged the assumptions applied to
the valuation inputs.
Considered alternative valuation methods and discussed with the Directors and the investment manager
to gain comfort as to why alternative methods were not used and considered the rationale for changes in
basis from one year to the next, if any.
Performed sensitivity analysis on any relevant inputs to determine whether the valuation calculations are
materially correct.
Considered any changes in the markets and environment in which the investee companies operate and
reviewed latest available information available to management.
•
•
•
Our conclusion
Based on the procedures performed, we consider the unquoted investment valuations to be appropriate given
the level of estimation uncertainty.
Other Information
The other information comprises the information included in the Annual report, other than the financial
statements and our auditor’s report thereon. The Directors are responsible for the other information contained
within the Annual report. Our opinion on the Company 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 Statement 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:
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Going concern and longer term viability
•
•
The Directors’ statement on page 46 with regards to the appropriateness of adopting the going concern
basis of accounting in preparing the financial statements and any material uncertainties identified; and
The Directors’ explanation on page 46 as to how they have assessed the prospects of the Company, over
what period they have done so and why they consider that period to be appropriate.
Other code provisions
•
•
•
•
The Directors’ statement on page 54 on fair, balanced and understandable;
The Board’s confirmation on page 37 that is has carried out a robust assessment of emerging and
principal risks;
The section of the Annual Report on page 38 that describes the review of effectiveness of the Company’s
risk management and internal control systems; and
The section of the Annual Report on pages 54 to 55 that describes the work of the Audit Committee,
including the significant issues that the Audit Committee considered relating to the financial statements.
Other Companies Act 2006 Reporting
Based on the responsibilities described below and our work performed in the course of our audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters described below:
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial period 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.
65
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 by the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
the Company 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.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the
preparation of the Company 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 Company financial statements, the Directors are responsible for assessing the ability of the
Company 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.
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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:
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws
and regulations (irregularities) and fraud that are material to the financial statements. Our audit work included
but was not limited to the following procedures.
We obtained an understanding of the legal and regulatory frameworks that apply to the Company and identified
the key laws and regulations that had a direct effect on the determination of material amounts and disclosures
in the financial statements, including the Companies Act 2006, the FCA Listing and DTR Rules, the UK Corporate
Governance Code and UK tax legislation.
Our procedures in respect of the above included:
•
Considering the risk of acts by the Company which were contrary to applicable laws and regulations,
including fraud;
• Making enquiries of Directors and management their policies and procedures regarding compliance with
laws and regulations;
• Making enquiries of Directors and management and reviewing Board and Committee minutes regarding
•
known or suspected non compliance with laws and regulations; and
Communicating identified laws and regulations throughout our engagement team and remaining alert to
any indications of non-compliance throughout our audit.
Our audit procedures in relation to fraud included but were not limited to:
• Making enquiries of Directors and management and reviewing Board and Committee minutes regarding
known or suspected instances of fraud;
• Gaining an understanding of the policies and procedures relating to the detection of fraud and internal
controls established to mitigate risks related to fraud;
• Discussing amongst the engagement team the risks of fraud;
•
Evaluating performance incentives and opportunities for fraudulent manipulation of the financial
statements; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.
•
Based on our risk assessment we identified management override of controls and valuation of unquoted
investments to be the areas most susceptible to fraud. Our audit procedures in respect of the above include
matters covered in Key audit matters above.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
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.
Martin Chatten (Senior Statutory Auditor)
For and on behalf of Royce Peeling Green Limited
Chartered Accountants
Statutory Auditor
The Copper Room
Deva City Office Park
Trinity Way
Manchester M3 7BG
21 March 2024
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Combined Income Statement
Combined
Combined
Year to 31 December 2023
Year to 31 December 2022
Note
Revenue
Capital
Total
Revenue
Capital
£’000
£’000
£’000
£’000
£’000
Total
£’000
Gain on disposal of fixed asset
investments
(Loss) on valuation of fixed asset
investments
Income
Performance fee
Investment management fee net of
cost cap
Other expenses
Return on ordinary activities
before tax
11
5
2
3
-
-
3
-
942
942
(3,343)
(3,343)
-
3
207
207
-
-
-
-
290
290
(2,554)
(2,554)
-
(2)
-
(2)
(57)
(171)
(228)
(70)
(215)
(285)
(252)
-
(252)
(198)
-
(198)
(306)
(2,365)
(2,671)
(268)
(2,481)
(2,749)
Tax on return on ordinary activities
6
-
-
-
-
-
-
Return on ordinary activities after
tax
Return on ordinary activities after tax
attributable to:
Owners of the fund
(306)
(2,365)
(2,671)
(268)
(2,481)
(2,749)
(306)
(2,365)
(2,671)
(268)
(2,481)
(2,749)
There was no other Comprehensive Income recognised during the year.
1. The ‘Total’ column of the income statement and statement of comprehensive income is the profit and
loss account of the Company; the supplementary revenue return and capital return columns have been
prepared under guidance published by the Association of Investment Companies.
2. All revenue and capital items in the above statement derive from continuing operations.
3. The Company has only one class of business and derives its income from investments made in shares and
securities and from bank and money market funds.
4. The Company has two share classes, the Ordinary share and B share class.
The Company has no recognised gains or losses other than the results for the year as set out above.
The accompanying notes are an integral part of the Financial Statements.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
Ordinary Share Income Statement
(Non-statutory Analysis)
Ordinary shares
Ordinary shares
Year to 31 December 2023
Year to 31 December 2022
Note
Revenue
Capital
Total
Revenue
Capital
£’000
£’000
£’000
£’000
£’000
Total
£’000
Gain on disposal of fixed asset
investments
(Loss) on valuation of fixed asset
investments
Performance fee
Other expenses
9
5
2
-
-
-
(33)
-
-
(1,521)
(1,521)
207
-
207
(33)
-
-
-
(28)
Return on ordinary activities
before tax
(33)
(1,314)
(1,347)
(28)
Tax on return on ordinary activities
6
-
-
-
-
Return on ordinary activities after
tax
Return on ordinary activities after tax
attributable to:
Ordinary shareholders
Earnings per share – basic and
diluted
(33)
(1,314)
(1,347)
(28)
(33)
(1,314)
(1,347)
(28)
41
7
(0 .4)p
(16 .2)p
(16 .6)p
(0.3)p
0.5p
0.2p
86
86
(43)
(43)
(2)
-
41
-
41
(2)
(28)
13
-
13
13
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
I
F
I
69
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
I
F
I
70
B Share Income Statement
(Non-statutory Analysis)
B shares
B shares
Year to 31 December 2023
Year to 31 December 2022
Note
Revenue
Capital
Total
Revenue
Capital
£’000
£’000
£’000
£’000
£’000
Total
£’000
Gain on disposal of fixed asset
investments
(Loss) on valuation of fixed asset
investments
Income
Investment management fee net of
cost cap
Other expenses
Return on ordinary activities
before tax
9
11
2
2
-
-
3
942
942
(1,822)
(1,822)
-
3
-
-
-
204
204
(2,511)
(2,511)
-
-
(57)
(171)
(228)
(70)
(215)
(285)
(219)
-
(219)
(170)
-
(170)
(273)
(1,051)
(1,324)
(240)
(2,522)
(2,762)
Tax on return on ordinary activities
6
-
-
-
-
-
-
Return on ordinary activities after
tax
Return on ordinary activities after tax
attributable to:
B shareholders
Earnings per share – basic and
diluted
(273)
(1,051)
(1,324)
(240)
(2,522)
(2,762)
(273)
(1,051)
(1,324)
(240)
(2,522)
(2,762)
7
(1 .4)p
(5 .2)p
(6 .6)p
(1.4)p
(15.1)p
(16.5)p
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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71
Combined Balance Sheet
Combined as at
Combined as at
31 December 2023
31 December 2022
Note
£’000
£’000
£’000
£’000
9
10
16
12
-
11,863
-
13,576
13
1,455
3,896
(189)
-
-
-
-
10
5,065
-
(168)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,175
-
4,907
(146)
16,892
299
1,077
1
20,504
1,610
(3,544)
(3,055)
16,892
-
-
-
-
-
-
-
-
-
-
(353)
18,130
269
14,537
-
5,642
2,113
(1,682)
(2,749)
18,130
Fixed asset investments*
Current assets:
Debtors
Cash at bank
Money market funds
Creditors: amounts falling due within one year
Net current assets
Creditors: amounts falling due after more than one year
12
Net assets
Called up equity share capital
Share premium
Capital redemption reserve
Special distributable reserve
Capital reserve – realised gains and losses
Capital reserve – holding gains and losses
Revenue reserve
Total equity shareholders' funds
*At fair value through profit and loss
13
14
14
14
14
14
14
The accompanying notes are an integral part of the Financial Statements.
The statements were approved by the Directors and authorised for issue on 21 March 2024 and are signed on
their behalf by:
John Hustler
Chair
Company No: 04221489
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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72
Ordinary Share Balance Sheet
(Non-statutory Analysis)
Ordinary shares as at
Ordinary shares as at
31 December 2023
31 December 2022
Note
£’000
£’000
£’000
£’000
Fixed asset investments*
9
-
1,453
-
2,974
Current assets:
Cash at bank
Creditors: amounts falling due within one year
12
Net current assets
Creditors: amounts falling due after more than one year
12
Net assets
Called up equity share capital
13
Special distributable reserve
Capital reserve – realised gains and losses
Capital reserve – holding gains and losses
Revenue reserve
Total equity shareholders' funds
Net asset value per share
8
*At fair value through profit and loss
214
(22)
-
-
-
-
-
-
-
-
-
-
-
-
192
(146)
1,499
81
3,436
252
(248)
(2,022)
1,499
18 .5p
409
(22)
-
-
-
-
-
-
-
-
-
-
-
-
387
(353)
3,008
81
3,598
985
333
(1,989)
3,008
37.1p
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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73
B Share Balance Sheet
(Non-statutory Analysis)
B shares as at
B shares as at
31 December 2023
31 December 2022
Note
£’000
£’000
£’000
£’000
9
10
16
12
13
Fixed asset investments*
Current assets:
Debtors
Cash at bank
Money market funds
Creditors: amounts falling due within one year
Net current assets
Net assets
Called up equity share capital
Share premium
Capital redemption reserve
Special distributable reserve
Capital reserve – realised gains and losses
Capital reserve – holding gains and losses
Revenue reserve
Total equity shareholders' funds
Net asset value per share
8
*At fair value through profit and loss
-
10,410
-
10,602
13
1,241
3,896
(167)
-
-
-
-
10
4,656
-
(146)
-
-
-
-
-
-
-
-
-
-
-
4,983
15,393
218
1,077
1
17,068
1,358
(3,296)
(1,033)
15,393
70 .7p
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,520
15,122
188
14,537
-
2,044
1,128
(2,015)
(760)
15,122
80.7p
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Combined Statement of
Changes in Equity
Share
capital
Share
premium
Capital
Redemption
Reserve
Special
distributable
reserve
Capital
reserve
realised
gains/
(losses)
Capital
reserve
holding
gains/
(losses)
Revenue
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
227
10,738
42
3,799
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
269
14,537
31
(1)
-
-
-
-
-
-
-
-
2,269
-
(15,729)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
-
6,367
2,639
273
(2,481)
17,763
-
(25)
-
-
-
(700)
-
-
-
-
-
-
(215)
(2)
-
290
-
-
-
-
-
-
-
-
(2,554)
(599)
599
-
-
3,841
(25)
(268)
(268)
-
-
-
-
-
-
(215)
(2)
(700)
290
(2,554)
-
5,642
2,113
(1,682)
(2,749)
18,130
-
(76)
15,729
-
-
-
(791)
-
-
-
-
-
-
-
(171)
207
-
942
-
-
-
-
-
-
-
-
-
(3,343)
(1,481)
1,481
-
-
-
2,300
(76)
-
(306)
(306)
-
-
-
-
-
-
(171)
207
(791)
942
(3,343)
-
299
1,077
1
20,504
1,610
(3,544)
(3,055)
16,892
Balance as at
1 January 2022
B share issue
Own shares purchased for
cancellation
Revenue return on ordinary
activities after tax
Expenses charged to capital
Performance fee allocated as
capital expenditure
Dividends paid
Current period gains on
disposal
Current period losses on fair
value of investments
Prior years' unrealised losses
now realised
Balance as at
31 December 2022
B share issue
Own shares purchased for
cancellation
Capital reduction
Revenue return on ordinary
activities after tax
Expenses charged to capital
Performance fee allocated as
capital expenditure
Dividends paid
Current period gains on
disposal
Current period losses on fair
value of investments
Prior years' unrealised losses
now realised
Balance as at
31 December 2023
The accompanying notes are an integral part of the Financial Statements.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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75
Ordinary Shares Statement
of Changes in Equity
(Non-statutory Analysis)
Share
capital
Share
premium
Capital
Redemption
Reserve
Special
distributable
reserve
Capital
reserve
realised
gains/
(losses)
Capital
reserve
holding
gains/
(losses)
Revenue
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Balance as at
1 January 2022
Revenue return on ordinary
activities after tax
Performance fee allocated as
capital expenditure
Dividends paid
Current period gains on
disposal
Current period losses on fair
value of investments
Prior years' unrealised losses
now realised
Balance as at
31 December 2022
Revenue return on ordinary
activities after tax
Performance fee allocated as
capital expenditure
Dividends paid
Current period gains on
disposal
Current period losses on fair
value of investments
Prior years' unrealised losses
now realised
Balance as at
31 December 2023
81
-
-
-
-
-
-
81
-
-
-
-
-
-
81
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,760
1,531
(254)
(1,961)
3,157
-
-
(162)
-
-
-
-
(2)
-
86
-
-
-
-
-
(43)
(630)
630
(28)
(28)
-
-
-
-
-
(2)
(162)
86
(43)
-
3,598
985
333
(1,989)
3,008
-
-
(162)
-
-
-
-
207
-
-
-
-
-
-
-
(1,521)
(940)
940
(33)
(33)
-
-
-
-
-
207
(162)
-
(1,521)
-
3,436
252
(248)
(2,022)
1,499
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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76
B Shares Statement of
Changes in Equity
(Non-statutory Analysis)
Share
capital
Share
premium
Capital
Redemption
Reserve
Special
distributable
reserve
Capital
reserve
realised
gains/
(losses)
Capital
reserve
holding
gains/
(losses)
Revenue
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
146
10,738
42
3,799
-
-
-
-
-
-
-
-
-
-
-
-
-
-
188
14,537
31
(1)
-
-
-
-
-
-
-
2,269
-
(15,729)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
2,607
1,108
527
(520)
14,606
-
(25)
-
-
(538)
-
-
-
-
-
-
(215)
-
204
-
-
-
-
-
-
-
(2,511)
31
(31)
-
-
3,841
(25)
(240)
(240)
-
-
-
-
-
(215)
(538)
204
(2,511)
-
2,044
1,128
(2,015)
(760)
15,122
-
(76)
15,729
-
-
(629)
-
-
-
-
-
-
-
(171)
-
942
-
-
-
-
-
-
-
-
(1,822)
(541)
541
-
-
-
2,300
(76)
-
(273)
(273)
-
-
-
-
-
(171)
(629)
942
(1,822)
-
218
1,077
1
17,068
1,358
(3,296)
(1,033)
15,393
Balance as at
1 January 2022
B share issue
Own shares purchased for
cancellation
Revenue return on ordinary
activities after tax
Expenses charged to capital
Dividends paid
Current period gains on
disposal
Current period losses on fair
value of investments
Prior years’ unrealised profits
now realised
Balance as at
31 December 2022
B share issue
Own shares purchased for
cancellation
Capital reduction
Revenue return on ordinary
activities after tax
Expenses charged to capital
Dividends paid
Current period gains on
disposal
Current period losses on fair
value of investments
Prior years’ unrealised losses
now realised
Balance as at
31 December 2023
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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77
Combined Statement of
Cash Flows
Cash flows from operating activities
Return on ordinary activities before tax
Adjustments for:
Increase in debtors
(Decrease) / increase in creditors
Gain on disposal of fixed asset investments
Loss on valuation of fixed asset investments
Cash from operations
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of fixed asset investments
Sale of fixed asset investments
Total cash outflow from investing activities
Cash flows from financing activities
Dividend paid
Own shares purchased for cancellation
Issue of B shares
Total cash inflow from financing activities
Increase / (decrease) in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Cash and cash equivalents comprise
Cash at bank
Money market funds
Closing cash and cash equivalents
Combined Year to
Combined Year to
31 December 2023
31 December 2022
Note
£’000
£’000
(2,671)
(2,749)
10
12
6
9
9
14
14
13
16
(3)
(186)
(942)
3,343
(459)
-
(459)
(2,437)
1,749
(688)
(791)
(76)
2,300
1,433
286
5,065
5,351
1,455
3,896
5,351
(1)
5
(290)
2,554
(481)
-
(481)
(5,920)
1,245
(4,675)
(700)
(25)
3,841
3,116
(2,040)
7,105
5,065
5,065
-
5,065
The accompanying notes are an integral part of the Financial Statements.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Ordinary Shares Statement of Cash
Flows (Non-statutory Analysis)
Ordinary shares Year
Ordinary shares Year
to 31 December 2023
to 31 December 2022
Note
£’000
£’000
Cash flows from operating activities
Return on ordinary activities before tax
Adjustments for:
(Decrease) / increase in creditors
Gain on disposal of fixed asset investments
Loss on valuation of fixed asset investments
Cash from operations
Income taxes paid
Net cash used in operating activities
78
Cash flows from investing activities
Sale of fixed asset investments
9
6
9
Total cash (outflow) / inflow from investing activities
Cash flows from financing activities
Dividend paid
Total cash outflow from financing activities
(Decrease) / increase in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Cash and cash equivalents comprise
Cash at bank
Closing cash and cash equivalents
(1,347)
(207)
-
1,521
(33)
-
(33)
-
(33)
(162)
(162)
(195)
409
214
214
214
13
2
(86)
43
(28)
-
(28)
281
281
(162)
(162)
91
318
409
409
409
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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79
B Shares Statement of Cash
Flows (Non-statutory Analysis)
B shares Year to
B shares Year to
31 December 2023
31 December 2022
Note
£’000
£’000
Cash flows from operating activities
Return on ordinary activities before tax
(1,324)
(2,762)
Adjustments for:
Increase in debtors
Increase in creditors
Gain on disposal of fixed asset investments
Loss on valuation of fixed asset investments
Cash from operations
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of fixed asset investments
Sale of fixed asset investments
Total cash outflow from investing activities
Cash flows from financing activities
Dividend paid
Own shares purchased for cancellation
Issue of B shares
Total cash inflow from financing activities
(Increase) / decrease in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Cash and cash equivalents comprise
Cash at bank
Money market funds
Closing cash and cash equivalents
9
6
9
9
13
16
(3)
21
(942)
1,822
(426)
-
(426)
(2,437)
1,749
(688)
(629)
(76)
2,300
1,595
481
4,656
5,137
1,241
3,896
5,137
(1)
3
(204)
2,511
(453)
-
(453)
(5,920)
964
(4,956)
(538)
(25)
3,841
3,278
(2,131)
6,787
4,656
4,656
-
4,656
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Notes to the Financial Statements
The Company is a public company and is limited by shares .
1 . Accounting Policies
Basis of preparation
The Financial Statements have been prepared under the historical cost convention, except for the measurement
at fair value of certain financial instruments, and in accordance with UK Generally Accepted Accounting
Practice (“GAAP”), including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of
Ireland (January 2022)” and with the Companies Act 2006 and the Statement of Recommended Practice (SORP)
‘Financial Statements of Investment Trust Companies and Venture Capital Trusts (revised 2021)’.
The principal accounting policies have remained materially unchanged from those set out in the Company’s
2022 Annual Report and Financial Statements. A summary of the principal accounting policies is set out below.
The Financial Statements are presented in Sterling (£). The functional currency is also Sterling (£).
The Company held all fixed asset investments at fair value through profit or loss. Accordingly, all interest
income, fee income, expenses and gains and losses on investments are attributable to assets held at fair value
through profit or loss.
The most important policies affecting the Company’s financial position are those related to investment valuation
and require the application of subjective and complex judgements, often as a result of the need to make
estimates about the effects of matters that are inherently uncertain and may change in subsequent periods.
These are discussed in more detail below.
Going Concern
The assets of the Company consist mainly of securities, seventeen of which are AIM quoted (2022: sixteen),
quite liquid and readily accessible, as well as cash and cash equivalents, including money market funds. As at 31
December 2023, 32% of net assets was cash and cash equivalents (2022: 28%). After reviewing the Company’s
forecasts, the Directors have a reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. The Company therefore continues to adopt the going concern
basis in preparing its Financial Statements.
The Company continues to face material AIM market volatility as a result of macroeconomic pressures. The
Company’s Board and Investment Manager are focused on ensuring that investee companies are taking the
required actions to minimise the potential impact that these conditions could have on them. The Board and
Seneca will continue to review these potential risks and keep those risks under regular review but do not
consider current macroeconomic pressures to have a material impact on the Company’s own ability to continue
as a going concern.
Key judgements and estimates
The preparation of the Financial Statements requires the Board to make judgements and estimates regarding the
application of policies affecting the reported amounts of assets, liabilities, income and expenses. Estimates and
assumptions mainly relate to the fair valuation of the fixed asset investments particularly unquoted investments.
Estimates are based on historical experience and other assumptions that are considered reasonable under the
circumstances. The estimates and the assumptions are under continuous review with particular attention paid to
the carrying value of the investments.
Investments are regularly reviewed to ensure that the fair values are appropriately stated. Unquoted investments
are valued in accordance with current International Private Equity and Venture Capital Valuation (IPEV)
guidelines, which can be found at www.privateequityvaluation.com, although this does rely on subjective
estimates such as appropriate sector earnings or revenue multiples, forecast results of investee companies,
asset values of investee companies and liquidity or marketability of the investments held. The material factors
affecting the returns and net assets attributable to shareholders of the different share classes are the valuations
of the Ordinary and B share pools and ongoing general expenses.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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Although the Directors believe that the assumptions concerning the business environment and estimate of
future cash flows are appropriate, changes in estimates and assumptions could result in changes in the stated
values. This could lead to additional changes in fair value in the future.
Cash and cash equivalents
Cash, for the purposes of the cash flow statement, comprises cash at bank and money market funds. Cash
equivalents are current asset investments which are disposable without curtailing or disrupting the business
and are either readily convertible into known amounts of cash at or close to their carrying values or traded in an
active market. This comprises investments in money market funds.
Fixed asset investments
The Company’s principal financial assets are its investments and the policies in relation to those assets are set
out below.
Purchases and sales of investments are recognised in the Financial Statements at the date of the transaction
(trade date).
These investments will be managed and their performance evaluated on a fair value basis and information about
them is provided internally on that basis to the Board. Accordingly, as permitted by FRS 102, the investments are
measured as being fair value through profit or loss on the basis that they qualify as a group of assets managed,
and whose performance is evaluated, on a fair value basis in accordance with a documented investment
strategy. The Company’s investments are measured at subsequent reporting dates at fair value.
In the case of investments quoted on a recognised stock exchange, fair value is established by reference to
the closing bid price on the relevant reporting date or the last traded price, depending upon convention of the
exchange on which the investment is quoted. In the case of AIM quoted investments this is the closing bid price.
In the case of unquoted investments, fair value is established by using measures of value such as the price of
recent transactions, earnings or revenue multiples, discounted cash flows and net assets. These are consistent
with the IPEV guidelines.
Gains and losses arising from changes in fair value of investments are recognised as part of the capital return
within the Income Statement and allocated to the capital reserve - holding gains/(losses) on the Balance Sheet
and within the Statement of Changes in Equity.
In the preparation of the valuations of assets the Directors are required to make judgements and estimates that
are reasonable and incorporate their knowledge of the performance of the investee companies.
Fair value hierarchy
Paragraph 34.22 of FRS 102 regarding financial instruments that are measured in the balance sheet at fair value
requires disclosure of fair value measurements dependent on whether the stock is quoted and the level of the
accuracy in the ability to determine its fair value. The fair value measurement hierarchy is as follows:
For quoted investments:
Level 1: quoted prices in active markets for an identical asset. The fair value of financial instruments traded
in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active
if quoted prices are readily and regularly available, and those prices represent actual and regularly occurring
market transactions on an arm’s length basis. The quoted market price used for financial assets held is the bid
price at the Balance Sheet date.
Level 2: where quoted prices are not available (or where a stock is normally quoted on a recognised stock
exchange that no quoted price is available), the price of a recent transaction for an identical asset, providing
there has been no significant change in economic circumstances or a significant lapse in time since the
transaction took place. The Company held no such investments in the current or prior year.
For investments not quoted in an active market:
Level 3: the fair value of financial instruments that are not traded in an active market is determined by using
valuation techniques. These valuation techniques maximise the use of observable data (e.g.: the price of recent
transactions, earnings/revenue multiple, discounted cash flows and/or net assets) where it is available and rely
as little as possible on entity specific estimates.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Current asset investments
No current asset investments were held at 31 December 2022 or 31 December 2023. Should current assets be
held, gains and losses arising from changes in fair value of investments are recognised as part of the capital
return within the Income Statement and allocated to the capital reserve - gains/(losses) on disposal.
Income
Investment income includes interest earned on bank balances, money market funds, from unquoted loan note
securities and dividends. Fixed returns on debt are recognised on a time apportionment basis so as to reflect the
effective yield, provided it is probable that payment will be received in due course.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged wholly to revenue with the exception
of the performance and management fee. The performance fee is charged 100% to the capital reserve and the
investment management fee charged to the B shares has been split 25% revenue and 75% capital, in line with
industry practice and to reflect the Board’s estimated split of investment returns which will be achieved by the
Company’s B shares over the long term. Expenses and liabilities not specific to a share class were chargeable to
the B share pool for a period of three years from 1 July 2018 (subject to the cost cap discussed in Note 2). Since
1 July 2021, expenses are allocated pro-rata between the B shares and Ordinary shares based on their respective
net asset values. These costs, including the annual management fee in the case of the B share pool, are capped
at 3% of the net asset value of each share class.
Revenue and capital
The revenue column of the Income Statement includes all income and revenue expenses of the Company.
The capital column includes gains and losses on disposal and holding gains and losses on investments, as well
as those expenses that have been charged as capital costs. Gains and losses arising from changes in fair value
of investments are recognised as part of the capital return within the Income Statement and allocated to the
appropriate capital reserve on the basis of whether they are realised or unrealised at the Balance Sheet date.
Taxation
Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current
or past reporting periods using the applicable tax rate. The tax effect of different items of income/gain and
expenditure/loss is allocated between capital and revenue return on the “marginal” basis as recommended in the
SORP.
Deferred tax is recognised on an undiscounted basis in respect of all timing differences that have originated but
not reversed at the balance sheet date, except as otherwise indicated.
Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the
reversal of deferred tax liabilities or other future taxable profits.
Financial instruments
The Company’s principal financial assets are its investments and its cash and the policies in relation to those
assets are set out above. Financial liabilities and equity instruments are classified according to the substance
of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all of its financial liabilities. Where the contractual terms of
share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity
instrument.
Capital management is monitored and controlled using the internal control procedures set out on page 51 of
this report. The capital being managed includes equity and fixed-interest investments, cash balances and liquid
resources including debtors and creditors.
The Company does not have any externally imposed capital requirements.
Reserves
Called up equity share capital – represents the nominal value of shares that have been issued.
Share premium account – includes any premiums received on issue of share capital. Any transaction costs
associated with the issuing of shares are deducted from share premium.
Capital redemption reserve – represents the nominal value of shares bought back from shareholders and
cancelled.
Special distributable reserve – includes cancelled share premium and capital redemption reserves available for
distribution, share buy backs and may be used to cover dividend payments.
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Capital reserve – holding gains and losses created when the Company revalues the investments still held during
the year with any gains or losses arising being credited/ charged to the Capital reserve.
Capital reserve – gains and losses on disposal created when an investment is sold. Any balance held in the
Capital reserve – holding gains and losses is transferred to the Capital reserve – realised gains and losses on
disposal and recognised as a movement in reserves.
Revenue reserve – represents the aggregate value of accumulated realised profits (excluding capital profits), less
losses and dividends.
Dividends payable
Dividends payable are recognised as distributions in the Financial Statements when the Company’s liability to
make payment has been established. This liability is established for interim dividends when they are declared by
the Board, and for final dividends when they are approved by shareholders.
2 . Investment Management Fees for B Shares
Gross investment management fee
Cost cap refund from Seneca
Investment management fee net of cost cap
Year to
31 December 2023
£’000
Year to
31 December 2022
£’000
298
(70)
228
303
(18)
285
Seneca is entitled to an annual management fee of 2% of the weighted net asset value of the B share pool (2022:
2%) and, with effect from 1 August 2019, is also entitled to an annual fee of £9,000 (plus VAT, if applicable) in
relation to management accounting services. These fees are payable quarterly in arrears. Seneca will also be
entitled to certain monitoring fees from investee companies and the Board reviews the amounts (please see
Note 19).
Seneca is also entitled to receive a performance related incentive fee (the “Performance Incentive Fee”) in
relation to the B share pool of an amount equal to 20% of the shareholder proceeds arising, provided that the
payment of such a fee shall also be conditional upon (i) a return being generated on the B share pool for B
shareholders in respect of that performance period of more than 5% per annum (pro-rated if that period is less
than a year) and (ii) that such a return calculated for the period from 23 August 2018 to the end of the relevant
performance period exceeds 5% per annum.
Shareholder proceeds are all amounts paid by way of dividend or other distributions, share buy backs, proceeds
on a sale or liquidation of the Company in relation to the B shares and calculated on a per share basis, and any
other proceeds or value received or deemed to be received by the holders of the relevant shares (excluding any
income tax relief on subscription).
For the avoidance of doubt, no Performance Incentive Fee will be payable to the extent that the shareholder
proceeds paid by the Company to the holders of the B shares have been justified by reference to distributable
reserves otherwise attributable to the Ordinary share pool (as permitted in accordance with the Articles).
For a three-year period with effect from 1 July 2018, expenses of the Company were capped at 3% of
the weighted average net asset value of the B shares, including the management fee (but excluding any
performance fee). Since 1 July 2021, expenses have been capped at 3% across both the Ordinary share pool
and the B share pool pro-rata to their respective net asset values. In the current year, the Ordinary share pool’s
proportion of the running costs was £33k and the B share pool’s proportion of the running costs was £219k.
The Investment Manager will indemnify the Company for any excess over the cost cap, with an amount equal
to such excess either being paid by Seneca to the Company or refunded by way of a reduction to its fees.
Accordingly, Seneca reduced its management fee by £70,000 in the year to 31 December 2023 (2022: reduced
by £18,000).
Expenses are charged wholly to revenue with the exception of the (net) investment management fee which has
been charged 75% to the capital reserve in line with industry practice and the performance fee.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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3 . Other Expenses
Directors’ remuneration and social security costs
Fees payable to the Company’s auditor for the audit of the
Financial Statements
Legal and professional expenses
Accounting and administration services
Other expenses (revenue)
Other expenses (capital)
Year to
31 December 2023
£’000
Year to
31 December 2022
£’000
79
36
90
21
26
-
252
68
22
50
19
39
-
198
Expenses are capped at 3% across both the Ordinary share pool and the B share pool pro-rata to their respective
net asset values. Any expenditure related specifically to assets in one pool is chargeable to that pool.
4 . Directors’ Remuneration
Directors’ emoluments:
John Hustler (Chair)
Alex Clarkson
Mary Anne Cordeiro
Ian Dighé
Richard Manley
Richard Roth
Year to
31 December 2023
£
Year to
31 December 2022
£
16,558
16,558
10,839
3,814
16,490
10,565
74,824
15,000
15,000
-
-
15,000
20,000
65,000
Apart from the Directors’ fees detailed above, none of the Directors received any other remuneration from the
Company during the year.
Directors’ emoluments are exclusive of employers’ National Insurance contributions, which totalled £4,443
(2022: £3,212). Together, the Directors’ remuneration and social security costs totalled £79,267 (2022: £68,212).
Certain Directors may become entitled to receive a share of the Performance Incentive Fee related to the
Ordinary share pool as detailed in the Directors’ Remuneration Report on page 58 and in Note 5.
The Company has no employees other than non-executive Directors. The average number of non-executive
Directors in the year was four (2022: four).
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5 . Performance Fees for Ordinary Shares
The performance incentive fees are calculated separately on the Ordinary shares and the B shares. Performance
incentive fees in relation to the Ordinary shares are potentially payable to past and current members of the CAC.
The current member of the CAC is John Hustler.
The CAC entered into an agreement to take over management of the Company’s investments on 30 July 2007
(the “2007 Agreement”) and at that time a revised performance incentive scheme was implemented, such that
its members would be entitled to 20% of all cash returns above the initial net cost to subscribing shareholders of
80p (the “Accrued Performance Incentive Fee”).
On 7 October 2015, the performance incentive fee structure was further amended as follows. In respect of
the period to 31 December 2014, the Accrued Performance Incentive Fee on the Ordinary share class of up to
£702,000 shall be payable to James Otter (a former director of the Company who was also a member of the
CAC), Charles Breese (a former director of the Company who was also a member of the CAC) and John Hustler,
in equal proportions (with the liability to pay a director his share of such fee being extinguished if the fee is due
for payment five years after his ceasing to be a member of the CAC. Such extinguished fees are credited back to
the Company).
The liability to pay James Otter his share of any potential Accrued Performance Incentive Fee was extinguished
on 7 October 2020 – the fifth anniversary of his ceasing to be a member of the CAC. Therefore, the total
potential liability for the Company was reduced from £702,000 to £468,000.
As a result of the reduction in the Accrued Performance Incentive Fee by one third, the amount of the Accrued
Performance Incentive Fee shall be 16.67% of any dividends and capital distributions returned to shareholders,
which in total exceed the sum of 80p per Ordinary share (the “Hurdle”). This includes dividends paid to date
on the Ordinary shares, being 73.3p per share. As a result of this, for every £1 potentially distributable in excess
of the Hurdle, 80p shall be distributed to shareholders and 13.33p shall be paid as the Accrued Performance
Incentive Fee, with 6.67p (being one third of the original 20p) retainable by the Company up until an amount
of 114.65p per Ordinary share has been distributed to Ordinary shareholders, after which no further payment
is payable in respect of the Accrued Performance Incentive Fee or otherwise under the terms of the 2007
Agreement (as amended). The Accrued Performance Incentive Fee shall be paid at the same time as payments
are made to the Ordinary shareholders. All distributions by way of dividends and capital distributions in relation
to the Ordinary share class shall count towards the Accrued Performance Incentive Fee and where non-cash
dividends are declared the Company’s auditors shall assess their value by reference to a distribution per share.
Following payment in full of the Accrued Performance Incentive Fee, a further performance incentive fee may
become payable to the CAC in relation to the period after 7 October 2015 (the, “Further Performance Incentive
Fee”).
Following the amendment on 7 October 2015, any returns above the 31 December 2014 levels are subject to a
further hurdle (the “Further Hurdle”), and the Further Performance Incentive Fee reduces the share to the CAC to
10% of sums returned to Ordinary shareholders by way of dividends and capital distributions of whatever nature,
which in total exceed the Further Hurdle (excluding any initial tax relief on the subscription for the Ordinary
shares). The “Base Figure” for the Further Hurdle shall be 90.4p per Ordinary share and shall be increased by a
sum equal to notional interest thereon, at the rate of 1.467% per quarter from 1 January 2015, compounded
with quarterly rests. For the purposes of determining the increase in the Base Figure, the amount on which
notional interest is to accrue in each quarter shall be reduced by the amount of all sums returned to Ordinary
shareholders by way of dividends and capital distributions in the previous quarter. Shareholders will need to
have received distributions of 114.65p per Ordinary share, together with the amount to take account of notional
interest as calculated above, before any Further Performance Incentive Fee is payable.
As at 31 December 2023, the Total Gross Return in respect of the Ordinary shares is 93.51p, 1.80p per Ordinary
share totalling £146,000, which has been accrued as part of this performance fee liability (31 December 2022:
112.66p, 4.35p and £353,000 respectively). The reduction of £207,000 in the Accrued Performance Incentive Fee
has been recognised as capital income in the Ordinary share income statement (2022: capital expenditure of
£2,000).
Assuming no dividends are paid on the Ordinary shares in 2024, the Total Gross Return would need to exceed
179.1p at 31 December 2024 before any Further Performance Incentive Fee could be due, and at that time it
would be 10% of any dividends or capital distributions made above this threshold. If the Further Performance
Incentive Fee is not triggered (as it has not been in this financial year) the Further Hurdle, net of dividends paid,
increments by a compound annual growth rate of 6%, applied quarterly as described above.
If the CAC considers it necessary to engage external advisors in support of managing its portfolio, the costs
of this will be borne by the Ordinary share pool. The Further Performance Incentive Fee shall be divided
among such members of the CAC (past, present and future) who have been members of that committee since
7 October 2015, on a pro rata basis, linked to the relative amount of time since the date of the 7 October
2015 agreement for which each individual has been a member of the CAC. An individual will not be entitled
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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to payment of any of Further Performance Incentive Fee if he ceased to be a member of the CAC in certain
conditions, or ceased to be a member of the CAC more than five years before the payment of any amount of
Further Performance Incentive Fee becomes due and any such fees will be credited back to the Company. For
the purposes of the Further Performance Incentive Fee, the method of determining distributions will follow that
used in calculating the Accrued Performance Incentive Fee.
6 . Tax on Ordinary Activities
The corporation tax charge for the year was £nil (2022: £nil).
The tax charge is calculated on return on ordinary activities before taxation at the applicable rate of 23.52%
(2022: 19.0%).
Current Tax Reconciliation:
Return on Ordinary activities before tax
Current tax at 23.52% (2022: 19%)
Gains/losses not subject to tax
Performance fee accrual not tax deductible
Excess management expenses carried forward
86
Total current tax charge and tax on results of ordinary
activities
Year to
31 December 2023
£’000
Year to
31 December 2022
£’000
(2,671)
(628)
565
(49)
112
-
(2,749)
(522)
430
0
92
-
The Company has excess management expenses of £4,210,000 (2022: £3,763,000) to carry forward to offset
against future taxable profits.
Approved VCTs are exempt from tax on capital gains within the Company. Since the Directors intend that the
Company will continue to conduct its affairs so as to maintain its approval as a VCT, no current deferred tax has
been provided in respect of any capital gains or losses arising on the revaluation or disposal of investments.
7 . Earnings per Share
The earnings per Ordinary share is based on 8,115,376 (31 December 2022: 8,115,376) shares, being the
weighted average number of Ordinary shares in issue during the year, and a return for the year totalling negative
£1,347,000 (31 December 2022: £13,000).
The earnings per B share is based on 20,116,139 (31 December 2022: 16,694,546) shares, being the weighted
average number of B shares in issue during the year, and a return for the year totalling negative £1,324,000 (31
December 2022: negative £2,762,000).
There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures
are relevant. The basic and diluted earnings per share are therefore identical.
8 . Net Asset Value per Share
The calculation of NAV per Ordinary share as at 31 December 2023 is based on 8,115,376 Ordinary shares in issue
at that date (31 December 2022: 8,115,376).
The calculation of NAV per B share as at 31 December 2023 is based on 21,780,329 B shares in issue at that date
(31 December 2022: 18,749,559).
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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9 . Fixed Asset Investments
Ordinary Shares
Valuation and net book amount:
Book cost at 1 January 2023
Cumulative revaluation
Valuation at 1 January 2023
Movement in the year:
Revaluation in year
Valuation at 31 December 2023
Book cost at 31 December 2023
Revaluation to 31 December 2023
Valuation at 31 December 2023
B Shares
Valuation and net book amount:
Book cost as at 1 January 2023
Cumulative revaluation
Valuation at 1 January 2023
Movement in the year:
Purchases at cost
Disposals – cost
Disposals – revaluation
Revaluation in year
Valuation at 31 December 2023
Book cost at 31 December 2023
Revaluation to 31 December 2023
Valuation at 31 December 2023
Level 1:
AIM-quoted
investments
£’000
Level 3:
Unquoted
investments
£’000
Total
investments
£’000
832
2,083
2,915
(1,462)
1,453
832
621
1,453
2,573
(2,514)
59
(59)
-
2,573
(2,573)
-
3,405
(431)
2,974
(1,521)
1,453
3,405
(1,952)
1,453
Level 1:
AIM-quoted
investments
£’000
Level 3:
Unquoted
investments
£’000
Total
investments
£’000
7,682
(2,122)
5,560
1,493
(449)
142
(1,986)
4,760
8,726
(3,966)
4,760
4,935
107
5,042
944
(500)
-
164
5,650
5,379
271
5,650
12,617
(2,015)
10,602
2,437
(949)
142
(1,822)
10,410
14,105
(3,695)
10,410
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Further details of the fixed asset investments held by the Company are shown within the Investment Manager’s
Report on pages 14 to 33.
Full details of the valuation methods used by the Company are set out in Note 1 of these financial statements.
Where investments are held in quoted stocks, fair value is set at the market bid price.
All investments are initially measured at their transaction price. Subsequently, at each reporting date, the
investments are valued at fair value through profit or loss, and all capital gains or losses on investments are so
measured. Unquoted fixed asset investments are valued at fair value in accordance with the IPEV guidelines.
The changes in fair value of such investments recognised in these Financial Statements are treated as unrealised
holding gains or losses.
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 fundraise, or to adjust revenue or
earnings multiples. Of the Company’s Level 3 investments, 100% are valued based on price of recent fundraise,
with significant independent third-party investment underpinning the price, reviewed and adjusted for fair value
and factors relevant to the background of the specific investment, such as preference rights, waterfall structure
and/or material trading considerations (2022: 24% were previously held on a revenue multiple basis). Therefore,
each valuation has a degree of significant judgement applied to the valuation inputs. Throughout this exercise,
and where the value of the Company’s equity investments have been benchmarked using trading multiples to
support adjustments to fair value, multiples used are reviewed and compared to industry peers, based on size,
stage of development, revenue generation and growth rate, as well as their wider strategy and market position.
These multiples are calculated in the traditional manner, by dividing the enterprise value of the comparable
group by its revenue, EBITDA or earnings depending on what is the norm in a particular sector driven by how
acquisitions in that sector are typically valued. The trading multiple is then adjusted for considerations such as
illiquidity, marketability and other differences, advantages and disadvantages between the portfolio company
and the comparable public companies based on company specific facts and circumstances.
When considering the valuations and valuation methodologies, we determined that the fair value for the B share
pool’s investments in Silkfred and Vizibl was most appropriately benchmarked by a revenue multiple based
approach to substantiate adjustments to the price of recent fundraise for factors specific to each investment
which required a greater degree of judgment. An earnings multiple based approach was not considered
appropriate for any B share pool investments at this point given their stage of development.
The valuations for the remaining B share pool unquoted investments are also based on the price of funds last
raised and are reviewed for change in fair value.
Similar valuation methodologies as highlighted above are also considered in assessing the fair value of the
Ordinary share pool’s unquoted investments.
A detailed assessment of the respective value of each portfolio company is performed in each instance in
order to gain the necessary comfort as to whether a fair value reduction or uplift is required. This process
involves a review of the progress made by each investee company, recent developments in the M&A market and
comparisons to listed competitors across all relevant key performance indicators.
FRS 102 requires the Directors to consider the impact of changing one or more of the assumptions used as
part of the valuation process to reasonable possible alternative assumptions. Each of the relevant unquoted
portfolio companies has been reviewed in order to identify the sensitivity of the valuation methodology to
using alternative assumptions. Where discounts have been applied (for example to revenue levels) alternatives
have been considered which still fall within the IPEV Guidelines. For each relevant unquoted investment, two
scenarios have been modelled; more prudent assumptions (downside case) and more optimistic assumptions
(upside case). Using the upside alternative case, the value of the unquoted investments could result in an
increase in valuation of the B share pool investments by £160k. Applying the downside alternative case, the
value of the unquoted investments could result in a decrease in valuation of B share pool investments by £150k.
The impact of the downside sensitivity is more limited by the preferential positions in the equity distribution
waterfalls of the B share pool investee companies mentioned above.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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31 December 2023
£’000
31 December 2022
£’000
10
3
13
10
-
10
31 December 2023
£’000
31 December 2022
£’000
3
3
-
-
10 . Debtors
Prepayments
Accrued Income
Total
11 . Income
Money market funds
Total Income
12 . Creditors
31 December 2023
£’000
31 December 2022
£’000
89
Amounts falling due within one year
Trade creditors
PAYE/NIC
Other creditors
Accruals
Total amounts falling due within one year
Amounts falling due after one year
Accruals
Total amounts falling due after one year
12
8
23
146
189
146
146
-
5
23
140
168
353
353
The amount falling due after more than one year relates to the potential liability for a performance fee on the
Ordinary share portfolio. More details are in Note 5.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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13 . Share Capital
Allotted and fully paid up:
8,115,376 Ordinary shares of 1p
(2022: 8,115,376 shares of 1p)
21,780,329 B shares of 1p
(2022: 18,749,559 shares of 1p)
31 December 2023
£’000
31 December 2022
£’000
81
218
299
81
188
269
The capital of the Company is managed in accordance with its investment policy with a view to the achievement
of its investment objective as set out on page 7.
During the year, the Company did not issue or buy back any Ordinary shares.
The Company issued a total of 3,139,061 B shares at prices between 69.4p and 74.4p per B share during the
year. These were issued pursuant to the offer for subscription for B shares launched on 26 August 2022 and a
further offer for subscription for B shares launched on 24 August 2023 to raise, in aggregate, up to £10 million
with an over-allotment facility of up to a further £10 million (before issue costs). The Company also bought back
108,291 B shares (equal to 0.58% of the opening number of B shares in issue) at an average price of 70.3p per
share.
The total net proceeds received for the shares issued in the year was £2.3 million for the B share pool.
Share Rights
As regards Income: shareholders shall be entitled to receive such dividends as the Directors resolve to pay out
in accordance with the Articles. Under the Articles of the Company, all the assets of the Company and all the
liabilities of the Company will be allocated either to the Ordinary share pool or the B share pool. The Ordinary
shares will be entitled to the economic benefit of the assets allocated to the Ordinary share pool and the B
shares will be entitled to the economic benefit of assets allocated to the B share pool. Therefore, although the
rules in the Companies Act 2006 and elsewhere in relation to the payment of distributions will be applicable to
the Company on a company-wide basis, the income arising on the portfolios will belong to one or the other of
the share classes depending on which portfolio generated the income.
As regards Capital: similarly, the capital assets of the Company will be allocated to either the Ordinary share pool
or the B share pool. On a return of capital on a winding-up or on a return of capital (other than on a purchase
by the Company of its shares) the surplus capital shall be divided amongst the holders of the relevant share
class pro rata according to the number of shares of the relevant class held and the aggregate entitlements of
that share class. The Ordinary shares will not be entitled to any capital assets held in the B share pool and the
B shares will not be entitled to any capital assets held in the Ordinary share pool. In relation to the purchase by
the Company of its shares, the purchase of Ordinary shares may only be financed by assets in the Ordinary share
pool and the purchase of the B shares may only be financed by assets in the B share pool.
As regards voting and general meetings: subject to disenfranchisement in the event of noncompliance with a
statutory notice requiring disclosure as to beneficial ownership, each shareholder present in person or by proxy
shall on a poll have one vote for each share of which he/she is the holder. The Ordinary shareholders may not be
entitled to vote on certain matters which concern the B share class only and vice versa.
As regards Redemption: none of the Ordinary shares or B shares are redeemable. The Articles provide that
reserves (whether created upon the cancellation of the share premium account arising from the issue of
Ordinary shares or B shares or otherwise) may also be used for the benefit of the other share class. While this will
not transfer any net asset value between the different share classes, it will permit those reserves to be treated as
distributable profits on a Company-wide basis such that on an accounting basis dividends and share buybacks in
respect of both share classes may be facilitated by the availability of those reserves.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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14 . Movement in Shareholders’ Funds
Shareholders’ funds at start of year
Return on ordinary activities after tax
Increase due to issue of B shares
Own shares purchased for cancellation
Dividend paid
Shareholders’ funds at end of year
Year to
31 December 2023
£’000
Year to
31 December 2022
£’000
18,130
(2,671)
2,300
(76)
(791)
16,892
17,763
(2,749)
3,841
(25)
(700)
18,130
The analysis of changes in equity by the various reserves, including special distributable reserves, are shown in the
Statement of Changes in Equity on page 74.
The purpose of the special distributable reserve was to create a reserve which will be capable of being used by the
Company to pay dividends and for the purpose of making repurchases of its own shares in the market with a view
to narrowing the discount at which the Company’s shares trade to net asset value, providing shareholder authority
has been granted.
Although the special distributable reserves total £20.5 million as at 31 December 2023 as shown in the statement
of Changes in Equity on page 74, the distributable reserves are calculated by factoring in the capital reserve
realised gains and losses, the capital reserve holding gains and losses and the revenue reserve, which total
£15.5 million. However, only £2.6 million is able to be distributed as the reserves contain £12.9 million from the
cancellation of the share premium account on issued B shares which cannot be distributed until after the three-
year anniversary of the end of the accounting period in which funds were raised (2022: £3.3 million).
When the Company revalues its investments during the year, any gains or losses arising are credited/charged to the
Income Statement. Changes in fair value of investments held are then transferred to the capital reserve - holding
gains/(losses). When an investment is sold any balance held on the capital reserve - holding gains/(losses) reserve
is transferred to the capital reserve – gains/(losses) on disposal as a movement in reserves.
An interim capital dividend of 2 pence per Ordinary share for the year to 31 December 2023 was paid on 19 May
2023.
An interim dividend of 1.5 pence per B share for the year to 31 December 2023 was paid on 19 May 2023. A second
interim dividend of 1.5 pence per B share for the year to 31 December 2023 was paid on 22 December 2023.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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15 . Financial Instruments
The Company’s financial instruments comprise equity investments, cash and cash equivalent balances. The
Company holds financial assets in accordance with its investment policy of investing mainly in a portfolio of
VCT qualifying unquoted and quoted securities whilst holding a proportion of its assets in cash or near-cash
investments in order to provide a reserve of liquidity.
Classification of financial instruments
The Company held the following categories of financial instruments, all of which are included in the balance
sheet at fair value, at 31 December 2023 and 31 December 2022:
31 December 2023
£’000
31 December 2022
£’000
Financial assets at fair value through profit or loss
Fixed asset investments
Money market funds
Total
Financial assets measured at amortised cost
Debtors
Cash at bank
Total
Financial liabilities measured at amortised cost
Creditors
Accruals
Performance fee
Total
11,863
3,896
15,759
3
1,453
1,456
43
146
146
335
13,576
-
13,576
-
5,065
5,065
28
140
353
521
Fixed asset investments (see Note 9) are valued at fair value. Unquoted investments are carried at fair value as
determined by the Directors in accordance with the IPEV guidelines. The fair value of all other financial assets
and liabilities is represented by their carrying value in the balance sheet. The Directors believe that the fair value
of the assets held at the year-end is equal to their book value.
The Company’s creditors are initially recognised at fair value, which is usually the transaction price, and then
thereafter at amortised cost.
The Company’s Ordinary share pool provided an indemnity to the Royal Bank of Scotland (“RBS”) in 2013 of
£250,000 in relation to the registration of its shareholding in Omega Diagnostics Group Plc (“Omega”). The
investment in Omega was made in 2007 and was fully exited in September 2020. The Board has not recognised
any liability in relation to this historic indemnity as at 31 December 2023 and is liaising with RBS regarding the
formal release of the indemnity.
16 . Financial Risk Management
In carrying on its investment activities, the Company is exposed to various types of risk associated with the
financial instruments and markets in which it invests. The most significant types of financial risk facing the
Company are market risk, interest rate risk, credit risk and liquidity risk. The Company’s approach to managing
these risks is set out below together with a description of the nature and amount of the financial instruments
held at the balance sheet date.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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Market risk
The Company’s strategy for managing investment risk is determined with regard to the Company’s investment
objective, as outlined on page 7. The management of market risk is part of the investment management process.
The Company’s portfolio is managed with regard to the possible effects of adverse price movements and with
the objective of maximising overall returns to shareholders in the medium term. Investments in unquoted
companies, by their nature, usually involve a higher degree of risk than investments in companies quoted on
a recognised stock exchange, though the risk can be mitigated to a certain extent by diversifying the portfolio
across business sectors and asset classes. The overall disposition of the Company’s assets is regularly monitored
by the Board.
Details of the Company’s investment portfolio at the balance sheet date are set out on pages 14 to 33.
33.4% (2022: 28.1%) by value of the Company’s net assets comprise investments in unquoted companies held at
fair value. The valuation methods used by the Company include the application of a price/earnings ratio derived
from listed companies with similar characteristics, and consequently the value of the unquoted element of the
portfolio can be indirectly affected by price movements on the London Stock Exchange. A 10% overall increase
in the valuation of the unquoted investments at 31 December 2023 would have increased net assets and the
total return for the year by £565,000 (2022: £510,000) disregarding the impact of the performance fee; an
equivalent change in the opposite direction would have reduced net assets and the total return for the year by
the same amount.
36.8% (2022: 46.7%) by value of the Company’s net assets comprises equity securities quoted on AIM. A 10%
increase in the bid price of these securities as at 31 December 2023 would have increased net assets and the
total return for the year by £621,000 (2022: £848,000) disregarding the impact of the performance fee; a
corresponding fall would have reduced net assets and the total return for the year by the same amount.
Interest rate risk
Some of the Company’s financial assets are interest-bearing, of which some are at fixed rates and some variable.
As a result, the Company is exposed to fair value interest rate risk due to fluctuations in the prevailing levels of
market interest rates.
Floating rate risk
The Company’s floating rate investments comprise interest-bearing money market funds as at 31 December
2023. The benchmark rate which determines the rate of interest receivable on the Company’s money market
investment is the Bank of England base rate, which was 5.25% at 31 December 2023. The amounts held in
floating rate investments at the balance sheet date were as follows:
Money market funds
Total
31 December 2023
£’000
31 December 2022
£’000
3,896
3,896
-
-
A 1% increase or decrease in the base rate would have impacted income receivable from these investments and
the net assets for the year by £nil (2022: £nil).
Credit risk
There were no significant concentrations of credit risk to counterparties at 31 December 2023 or 31 December
2022.
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or
commitment that it has entered into with the Company. The Board carries out a regular review of counterparty
risk. The carrying values of financial assets represent the maximum credit risk exposure at the balance sheet date.
Liquidity risk
The Company’s financial assets include investments in unquoted equity securities which are not traded on
a recognised stock exchange and which generally are illiquid. They also include investments in AIM-quoted
companies, which, by their nature, involve a higher degree of risk than investments on the main market. As
a result, the Company may not be able to realise some of its investments in these instruments quickly at an
amount close to their fair value in order to meet its liquidity requirements, or to respond to specific events such
as deterioration in the creditworthiness of any particular issuer.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable
and accrued expenses. The Company’s listed money market funds are considered to be readily realisable as they
are of high credit quality.
The Company’s liquidity risk is managed and monitored on a continuing basis by the Board in accordance with
policies and procedures laid down by the Board.
17 . Events After the Balance Sheet Date
In February 2024, the Company completed a follow-on investment of £206k from the B share pool into existing
AIM quoted portfolio company Verici Dx plc.
The Company declared an interim B share dividend of 1.5p per B share on 7 March 2024 to be paid on 17 May
2024 to shareholders on the share register on 3 May 2024, with an ex-dividend date of 2 May 2024.
On 11 March 2024, AIM quoted investee company Bidstack Group Plc (“Bidstack”) announced its intention to
appoint administrators and requested suspension of trading in the company’s ordinary shares on AIM with effect
from 11 March 2024. As at 31 December 2023, Bidstack was valued at £161k in the B share pool.
As a result of a reduction in share prices of some of the B share pool’s AIM quoted investments since the year
end, including Bidstack’s, the B share pool’s updated unaudited NAV is 63.8p per B share as at 20 March 2024.
The share prices of both Ordinary share pool AIM quoted investments Arecor and Scancell also decreased since
the year end, which has resulted in an updated Ordinary share pool unaudited NAV of 16.9p per Ordinary share
as at 20 March 2024.
The Directors are not aware of any other post balance sheet events which need to be brought to the attention of
shareholders.
18 . Contingencies, Guarantees and Financial Commitments
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There were no contingencies, guarantees or financial commitments as at 31 December 2023 (2022: £nil).
19 . Related Party Transactions
As set out in Note 5, certain Directors and former Directors are entitled to participate in a performance bonus in
respect of the Ordinary share pool. As at 31 December 2023, performance fees of £146,000 have been accrued
as part of this performance fee liability (31 December 2022: £353,000). A performance fee becomes payable
once dividends and capital distributions to Ordinary shareholders exceed the sum of 80p per Ordinary share
for those members of the CAC who were members of that committee prior to 7 October 2015 and a Further
Performance Incentive Fee is payable once Ordinary shareholders have received distributions of 114.65p per
Ordinary share for those members of the CAC who were or have been members of that committee since 7
October 2015. Directors are entitled to this performance bonus whilst a member of the committee and up to a
period of five years following their resignation.
As set out in Note 2, Seneca has earnt £298,000 in management fees (2% of the weighted average net assets of
the B share portfolio) (2022: £303,000). However, only £228,000 (2022: £285,000) is recoverable by Seneca as a
result of the cost cap, as detailed in Note 2 of which £71,000 remained unpaid as at 31 December 2023 and has
therefore been included in accruals (2022: £72,000).
Seneca as Investment Manager accrued £66,000 (2022: £106,000) transaction fees and directors’ fees from
investee companies in relation to the arrangement and monitoring of the Company’s investments. As a related
party, we believe that this transaction is disclosable, and the Board ensures it is managed from a conflicts of
interest point of view. Seneca may also become entitled to a performance fee. See Note 2 to the financial
statements for more information on these fees.
As detailed in the offer for subscription document dated 24 August 2023, Seneca (as promoters of the Offer)
is entitled to charge the Company up to 5.5% of investors’ subscriptions. A total of £38,171 has been paid to
Seneca for the year ended 31 December 2023 (2022: £23,049). Richard Manley’s Director’s fee of £16,490
was taken for the 2023 financial year as payment to the Investment Manager as detailed in the Directors’
Remuneration Report and Policy on pages 56 to 59 (2022: £15,000). Directors’ fees were increased partway
through the year to £17,500 per annum effective from 18 May 2023.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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Shareholder Information and
Contact Details
Dividends
Dividends will be paid by the Registrar on behalf of the Company. Shareholders who wish to have dividends paid
directly into their bank account rather than by cheque to their registered address should contact the Company’s
Registrar, Neville, whose details can be found on page 97. Other queries relating to dividends and shareholdings
should also be directed to Neville.
Share Price
The share price of both the Company’s Ordinary shares and B shares are published daily on the London Stock
Exchange’s website (www.londonstockexchange.com), and other financial websites, and can also be accessed
through the Company’s website (www.senecavct.co.uk). The Ordinary share price may be found using the TIDM/
EPIC code HYG, and the B share price may be found using the TIDM/EPIC code SVCT.
Latest mid-market share price (20 March 2024)
13.5p per share
69.00p per share
Ordinary shares
B shares
Buying and Selling Shares
The Company’s Ordinary and B shares, which are listed on the London Stock Exchange, can be bought
and sold in the same way as any other company quoted on a recognised stock exchange via a stockbroker.
There may be tax implications in respect of all or part of your holdings, so shareholders should contact their
independent financial adviser if they have any queries.
The Company does not currently operate a share buyback policy for its Ordinary shares, but is authorised to buy
back its B shares (within approved limits). If you are considering selling your shares or trading in the secondary
market, please contact the Company’s Corporate Broker, Panmure Gordon (UK) Limited as follows:
Chris Lloyd
Paul Nolan
020 7886 2716 chris.lloyd@panmure.com
020 7886 2717 paul.nolan@panmure.com
Risk Warning - Financial Scams
We have been made aware that a number of existing shareholders and those of other VCTs have been contacted
in connection with fraudulent financial scams. In these instances, shareholders have received unsolicited phone
calls from persons claiming to work for a corporate finance firm, offering to buy their VCT shares at an inflated
price in connection with a possible take-over of the VCT and asking shareholders to sign a non-disclosure
agreement.
The claims made are false and are invariably an attempt to obtain confidential personal information from
shareholders with a view to fraudulently extract money from them.
Shareholders are warned to be very suspicious if they receive any similar type of communication and we would
recommend that you do not respond with any personal information.
If you are in any doubt, we recommend that you seek professional financial advice before taking any action.
You can also call Seneca Partners Limited on 01942 295 981 if you wish to check that any correspondence or
communication you receive from the Company is genuine.
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
Notification of Change of Address
Communications with shareholders are mailed to the registered address held on the share register unless
shareholders have agreed to be contacted via e-mail. In the event of a change of address or other amendment
this should be notified to Neville Registrars, under the signature of the registered holder.
Other Information for Shareholders
Previously published Annual Reports and Half-Yearly Reports are available for viewing on the Company’s website
at www.senecavct.co.uk, and in line with current trends all future communications will also be made available
there. The Company has introduced e-communication for its shareholders and in line with these objectives,
the Company will not be printing the Half-Yearly Reports in the future but will instead provide an electronic
version made available on the Company’s website www.senecavct.co.uk. We continue to encourage all of our
investors to switch to receiving updates from the Company via e-mail and documents in soft copy. This enables
you to receive documents more quickly and has the added benefits of being more environmentally friendly and
reducing printing and postage costs.
Should you wish to switch to e-mail communication and documents in the future by e-mail, please contact
our registrars, Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD, e-mail info@
nevilleregistrars.co.uk, or phone 0121 585 1131. Please also contact them for any other queries related to your
shareholding in the Company.
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Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
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Directors and Advisers
Board of Directors
John Hustler (Chair)
Alex Clarkson
Mary Anne Cordeiro
Ian Dighé
Richard Manley
Company Number
Registered in England & Wales No 04221489
Company Secretary
Registered Office
Investment Manager and Administration Manager
Corporate Broker
Sponsor
Solicitors
Independent Auditor
VCT Tax Adviser
Bankers
Registrars
Depositary
ISCA Administration Services Limited
The Office Suite
Den House
Den Promenade
Teignmouth TQ14 8SY
9 The Parks
Haydock WA12 0JQ
Seneca Partners Limited
9 The Parks
Haydock WA12 0JQ
Tel: 01942 271746
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
Tel: 020 7886 2500
SPARK Advisory Partners Limited
5 St. John’s Lane
London EC1M 4BH
Hill Dickinson LLP
50 Fountain Street
Manchester M2 2AS
Royce Peeling Green Limited
The Copper Room
Deva City Office Park
Trinity Way
Manchester M3 7BG
Shoosmiths LLP
No. 1 Bow Churchyard
London EC4M 9DQA
The Royal Bank of Scotland plc
62/63 Threadneedle Street
London EC2R 8LA
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen B62 8HD
Tel: 0121 585 1131
www.nevilleregistrars.co.uk
Thompson Taraz Depositary Limited
47 Park Lane
London W1K 1PR
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Notice of Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will be held at 11:00 a.m. on Wednesday, 15 May 2024 at the
Company’s registered address 9 The Parks, Haydock, WA12 0JQ.
For any shareholders wishing to attend the AGM this year in person, we request that you please inform us in
advance by e-mailing enquiries@senecavct.co.uk so that we may register your attendance with the facilities
manager in order to issue you with the appropriate attendance pass. For those unable to attend, we will be
hosting our bi-annual shareholder update presentation with a question and answer (Q&A) session included,
starting at 11:00 a.m. on 7 May 2024. Shareholders should note that only the formal business set out in the
notice of AGM will be considered at the AGM and we encourage shareholders to attend the presentation and
ask questions prior to the AGM. Further details about the shareholder update presentation can be found on the
Company’s website at www.senecavct.co.uk/shareholder-update/may-2024/.
We strongly encourage shareholders to vote on the matters of business through the completion of a proxy
form, which can be submitted to the Company’s Registrar. Proxy forms should be completed and returned in
accordance with the instructions thereon and the latest time for the receipt of proxy forms is 11:00 a.m. on
13 May 2024. Proxy votes can also be submitted by CREST where shares are so held.
John Hustler has informed the Board that having served as a non-executive Director for nearly twenty-three
years, he will retire from the Board and so will not stand for re-election at the forthcoming AGM on 15 May 2024.
Resolutions 1 to 8 (inclusive) will be proposed as Ordinary Resolutions and resolutions 9 and 10 (inclusive) will
be proposed as Special Resolutions.
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Ordinary Business
To consider and if thought fit, pass the following as Ordinary Resolutions:
1. THAT the Company’s Annual Report and Financial Statements and the auditors’ report thereon for the year
ended 31 December 2023 be received.
2. THAT the Directors’ Remuneration Report in respect of the year ended 31 December 2023 (as set out in the
Annual Report and Financial Statements for the same) be approved.
3. THAT Alex Clarkson be re-elected as a Director of the Company.
4. THAT Mary Anne Cordeiro be elected as a Director of the Company.
5. THAT Ian Dighé be elected as a Director of the Company.
6. THAT Richard Manley be re-elected as a Director of the Company
Biographical details for each Director and their individual contributions to the Company towards its long-term
sustainable success can be found on page 42 of the Annual Report.
7. THAT Royce Peeling Green Limited be appointed as auditor of the Company until the conclusion of the next
Annual General Meeting of the Company at which accounts are laid before the shareholders and THAT the
Directors be authorised to determine their remuneration.
Special Business
To consider and if thought fit, pass the following as an Ordinary Resolution:
8. AUTHORITY TO ALLOT RELEVANT SECURITIES
THAT, in addition to existing authorities, 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:
1. B ordinary shares of 1p each in the capital of Company (“B shares”) up to an aggregate nominal amount
of £350,000 in connection with offer(s) for subscription;
2. B shares for cash and otherwise than pursuant to sub-paragraph 1. above, up to an aggregate nominal
amount of £100,000; and
3. ordinary shares of 1p each in the capital of Company (“Ordinary Shares”) for cash, up to an aggregate
nominal amount of £4,058
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provided that this authority shall expire at the later of the conclusion of the Company’s next Annual General
Meeting following the passing of this resolution and the expiry of 15 months from the passing of this
resolution (unless previously revoked, varied or extended by the Company in a general meeting) but so
that such authority shall allow the Company to make offers or agreements before the expiry thereof which
would or might require relevant securities to be allotted after the expiry of such authority and the Directors
shall be entitled to allot shares pursuant to any such offers or agreements as if the authority conferred by
this resolution had not expired.
To consider and if thought fit, pass the following as a Special Resolution:
9. AUTHORITY TO PURCHASE RELEVANT SECURITIES
THAT the Company be and is hereby generally and unconditionally authorised within the meaning of
section 701 of the Act to make one or more market purchases (within the meaning of section 693(4) of the
Act) of B shares provided that:
1.
2.
3.
4.
5.
the maximum number of B shares hereby authorised to be purchased is an amount equal to 14.99% of
the issued B share capital of the Company from time to time;
the minimum price which may be paid for a B share is 1 pence per share, the nominal amount thereof;
the maximum price which may be paid for a B share is an amount equal to the higher of:
1.
105% of the average of the middle market prices shown in the quotations for a B share in The
London Stock Exchange Daily Official List for the five business days immediately preceding the
day on which that share is purchased; and
the amount stipulated by Article 5(6) of Market Abuse Regulation (596/2014/EU) (as such
Regulation forms part of UK law as amended);
2.
the authority hereby conferred shall (unless previously renewed or revoked) expire on the earlier of the
conclusion of the Company’s next Annual General Meeting following the passing of this resolution and
the date which is 15 months after the date on which this resolution is passed; and
the Company may make a contract or contracts to purchase its own B shares under this authority
before the expiry of the authority which will or may be executed wholly or partly after the expiry of the
authority, and may make a purchase of its own B shares in pursuance of any such contract or contracts
as if the authority conferred hereby had not expired.
To consider and, if thought fit, pass the following as a Special Resolution:
10. EMPOWERMENT TO MAKE ALLOTMENTS OF EQUITY SECURITIES
THAT, in addition to existing authorities, the Directors pursuant to section 570(1) of the Act be and are
hereby empowered to allot or make offers or agreements to allot equity securities (as defined in section
560(1) of the Act) for cash pursuant to the authority referred to in Resolution 8 as if section 561(1) of the Act
did not apply to any such allotments and so that:
1.
2.
reference to allotment in this resolution shall be construed in accordance with section 560(2) of the
Act; and
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 such offer or
agreement notwithstanding the expiry of such power,
and this power, unless previously varied, revoked or renewed, shall come to an end at the conclusion of the
Annual General Meeting of the Company next following the passing of this resolution or, if earlier, on the
expiry of 15 months from the passing of this resolution.
By order of the Board
ISCA Administration Services Limited
Company Secretary
21 March 2024
Registered Office:
9 The Parks
Haydock
WA12 0JQ
Seneca Growth Capital VCT Plc Annual Report & Financial Statements for the year ended 31 December 2023
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Notes
i.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, entitlement to attend and vote
at the meeting (and the number of votes that may be cast thereat), will be determined by reference to the
Register of Members of the Company at the close of business on the day which is two days before the day
of the meeting or of the adjourned meeting. Changes to the Register of Members of the Company after
the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the
meeting.
ii. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend,
speak and vote on his or her behalf. A proxy need not also be a member but must attend the meeting to
represent the appointer. Details of how to appoint the chair of the meeting or another person as a proxy
using the Form of Proxy are set out in the notes on the Form of Proxy. If the member wishes his or her proxy
to speak on their behalf at the meeting then the member will need to appoint their own choice of proxy (not
the chair) and give their instructions directly to the proxy.
iii. A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached
to different shares. A member may not appoint more than one proxy to exercise rights attached to any one
share. To appoint more than one proxy, a member may copy the proxy form, clearly stating on each copy
the shares to which the proxy relates, or alternatively contact the Company’s registrars, Neville Registrars
Limited, on 0121 585 1131 to request additional copies of the proxy form. For legal reasons Neville Registrars
Limited will be unable to give advice on the merits of the proposals or provide financial, legal, tax or
investment advice. The member will need to indicate in the box next to the proxy holder’s name the number
of shares in relation to which they are authorised to act as proxy, and will also need to indicate on the form
(by ticking the box provided) if the proxy instruction is one of multiple instructions being given. All forms
must be signed and returned together in the same envelope.
iv. Any person to whom this notice is sent who is a person nominated under section 146 of the Act to enjoy
information rights (a “Nominated Person”) may, under an agreement between him/her and the member by
whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy
for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise
it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the
exercise of voting rights.
v. The statement of the rights of members in relation to the appointment of proxies in paragraphs (ii) to (iii)
above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised
by members of the Company.
vi.
If the recipient of this document has been nominated to receive general shareholder communications
directly from the Company, it is important to remember that the member’s main contact in terms of their
investment remains as it was (being the registered shareholder, or perhaps custodian or broker, who
administers the investment on their behalf). Therefore, any changes or queries relating to a member’s
personal details and holding (including any administration thereof) must continue to be directed to that
member’s existing contact at their investment manager or custodian. The Company cannot guarantee that
it will deal with any matters that are directed to it in error. The only exception to this is where the Company,
in exercising one of its powers under the Act, writes to a member directly for a response.
vii. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy
appointment service may do so for the AGM and any adjournment(s) of it by using the procedures described
in the CREST Manual (available from www.euroclear.com/site/public/EUI). CREST Personal Members
or other CREST sponsored members, and those CREST members who have appointed a voting 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 made by means of CREST to be valid,
the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance
with Euroclear UK & International Limited’s (EUI) specifications and must contain the information required
for such instructions, as described in the CREST Manual. The message must be transmitted so as to be
received by the issuer’s agent (CREST ID 7RA11) by 11:00 a.m. on 13 May 2024. For this purpose, the time
of receipt will be taken to be the time (as determined by the timestamp applied to the message by the
CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST. CREST members and, where applicable, their CREST sponsors or
voting service providers should note that EUI does not make available special procedures in CREST for any
particular messages. Normal system timings and limitations will therefore apply in relation to the input of
CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has appointed a voting service provider(s),
to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST
system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set
out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023
viii. A reply-paid Form of Proxy or a reply-paid envelope is enclosed with this document if received by post.
To be valid, the enclosed Form of Proxy for the meeting, together with the power of attorney or other
authority, if any, under which it is signed or a notarially certified or office copy thereof, must be deposited at
the offices of the Company’s registrar, Neville Registrars Limited, Neville House, Steelpark Road, Halesowen
B62 8HD to be received not later than 11:00 a.m. on 13 May 2024 or 48 hours before the time appointed for
any adjourned meeting or, in the case of a poll taken subsequent to the date of the meeting or adjourned
meeting, so as to be received no later than 24 hours before the time appointed for taking the poll.
ix. Appointment of a proxy will not preclude a member from subsequently attending and voting at the meeting
should he or she subsequently decide to do so. A member can only appoint a proxy using the procedure set
out in these notes and the notes to the Form of Proxy.
x. As at 20 March 2024 (being the last business day prior to the publication of this notice), the Company’s
issued share capital comprised 8,115,376 Ordinary shares and 21,780,329 B shares, all of which carry one
vote each. Therefore, the total voting rights in the Company as at 20 March 2024 was 29,895,705.
xi. Copies of the Directors’ letters of appointment, the Register of Directors’ Interests in shares of the Company
and copies of the 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 (Public Holidays excluded) from the
date of this notice, until the end of the AGM and at the place of the AGM for at least 15 minutes prior to and
during the meeting.
xii. If a corporate shareholder has appointed a corporate representative, the corporate representative will have
the same powers as the corporation could exercise if it were an individual member of the Company. If more
than one corporate representative has been appointed, on a vote on a show of hands on a resolution, each
representative will have the same voting rights as the corporation would be entitled to. If more than one
authorised person seeks to exercise a power in respect of the same shares, if they purport to exercise the
power in the same way, the power is treated as exercised; if they do not purport to exercise the power in the
same way, the power is treated as not exercised.
xiii. At the meeting, shareholders have the right to ask questions relating to the business of the meeting and
the Company is obliged under section 319A of the Act to answer such questions, unless: to do so would
interfere unduly with the preparation of the meeting or would involve the disclosure of confidential
information; if the information has been given on the Company’s website: www.senecavct.co.uk in the form
of an answer to a question; or if it is undesirable in the interests of the Company or the good order of the
meeting that the question be answered.
xiv. Further information, including the information required by section 311A of the Act, regarding the meeting is
available on the Company’s website, www.senecavct.co.uk.
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Seneca Growth Capital VCT PlcAnnual Report & Financial Statements for the year ended 31 December 2023 Seneca Growth Capital VCT Plc
9 The Parks, Haydock, WA12 0JQ
www .senecavct .co .uk