RENN UNIVERSAL GROWTH INVESTMENT TRUST PLC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2014
The full Annual Report and Financial Statements for the year ended 31 March
2014 can be accessed via the Company's website: www.renaissanceusgrowth.co.uk
or by contacting the Secretary by telephone on 01392 412122.
Company Summary
Commencement The Company was incorporated on 19 January
1996 and commenced trading on 29 May 1996.
Investment objective To conduct an orderly realisation of the
assets of the Company, to be effected in a
manner that seeks to achieve a balance
between returning cash to shareholders
promptly and maximising the value of the
Company's portfolio. A detailed description
of the Company's investment policy is set
out in the Strategic Report below.
Total net assets and
shareholders' funds £39,936,000 as at 31 March 2014.
Market capitalisation £35,901,000 as at 31 March 2014.
Capital structure As at 31 March 2014 and at the date of this
report, the Company had 13,078,541 Ordinary
shares of 25p each in issue.
Total voting rights 13,078,541.
ISA status The Company is fully eligible for inclusion
in ISAs.
AIC The Company is a member of the Association
of Investment Companies ("AIC").
Investment Manager RENN Capital Group, Inc. ("RENN Capital").
See below for further details.
Management fee The Investment Manager receives a fixed fee
of $90,000 per month. A performance fee may
also be payable as described in the
Strategic Report below and Note 3 to the
Financial Statements.
Secretarial and
administration fee The Secretary receives an annual fee of
£88,000 in respect of secretarial and
administration services. This fee is subject
to an annual adjustment based on the UK
Retail Price Index.
Summary of Results and Financial Highlights
Year ended Year ended
31 March 31 March %
2014 2013 change
Total net assets £39,936,000 £57,252,000 (30.25)
Net asset value ("NAV") per Ordinary share
- pence 305.35 328.32 (7.00)
- US cents 509.06 498.54 2.11
Mid-market price per Ordinary share 274.50p 234.50p 17.06
Discount to NAV 10.10% 28.58% 18.48
Net revenue return after taxation £(1,021,000) £(1,145,000) 10.83
Revenue return per Ordinary share (5.92)p (6.47)p 8.50
Costs of running the Company*
- Investment Manager's fee £677,000 £746,000 (9.25)
- Other expenses £498,000 £465,000 7.10
- Performance fee (Note 3 below) nil‡ £(175,000)‡ n/a
As a percentage of average net assets*
- Investment Manager's fee 1.27% 1.38% (0.11)
- Other expenses 1.18% 0.86% 0.32
Exchange rate - US Dollar/Sterling 1.66715 1.51845 9.79
S&P 500 Index (Total Return) 3,375.51 2,770.05 21.86
S&P 500 Index (Total Return)
- Sterling adjusted 2,023.57 1,823.72 10.96
Russell 2000 Index (Total Return) 5,477.96 4,385.95 24.90
Russell 2000 Index (Total Return) -
Sterling adjusted 3,283.95 2,887.58 13.73
High Date Low Date
Mid-market price per Ordinary
share 274.50p 31/03/14 229.50p 03/06/13
NAV per Ordinary share - pence† 334.29p 30/06/13 290.96p 31/12/13
Discount to NAV† 30.24% 31/05/13 9.92% 07/03/14
* Calculated in accordance with the AIC recommended methodology for the
calculation of `Ongoing Charges' issued in May 2012.
‡ There is no performance fee payable for the year ended 31 March 2014.
† Including current period revenue.
Investment Portfolio
as at 31 March 2014
Book
cost Fair value % of net
Sector US$'000 US$'000 £'000 Assets
Corporate investments
US unlisted convertible
debentures
PetroHunter Energy Oil and gas
exploration 2,100 166 100 0.25
Total US unlisted
convertible debentures 2,100 166 100 0.25
US unlisted convertible
preference shares
AnchorFree Wireless
communications 2,162 27,613 16,563 41.48
iSatori Personal products 75 2 1 -
Total US unlisted
convertible preference
shares† 2,237 27,615 16,564 41.48
US listed Chinese
equities
Tiger Media Advertising 2,422 665 399 1.00
Total US listed Chinese
equities 2,422 665 399 1.00
US listed French
equities
Flamel Technologies Pharmaceuticals 3,774 10,720 6,430 16.10
Total US listed French
equities 3,774 10,720 6,430 16.10
US listed equities
Bovie Medical Healthcare
services 3,767 6,240 3,743 9.37
Charles & Colvard Clothing and
accessories 777 572 343 0.86
Cover-All Technologies Information
technology 5,051 10,938 6,561 16.43
iSatori Personal products 9,562 5,981 3,587 8.98
PetroHunter Energy Oil and gas
exploration 202 13 8 0.02
Total US listed
equities 19,359 23,744 14,242 35.66
Total corporate
investments 29,892 62,910 37,735 94.49
Net current assets 4,555 2,732 6.84
Provision for
liabilities (885) (531) (1.33)
Net assets 66,580 39,936 100.00
† Unlisted convertible preference shares and warrants convert into unlisted
common stocks.
Unlisted warrant investments are valued at fair value using the Black Scholes
methodology, which includes a time value which is calculated and added to the
intrinsic value to arrive at a total valuation for each warrant.
The Black Scholes methodology requires certain assumptions to be made around
the volatility of the underlying shares to which the warrants subscribe.
The valuation of unlisted warrants at 31 March 2014 of £nil is made up of the
intrinsic value of £nil and a time value of £nil.
Strategic Report
The Strategic Report has been prepared in accordance with Section 414A of the
Companies Act 2006 (the "Act"). Its purpose is to inform members of the Company
and help them to assess how the Directors have performed their legal duty under
Section 172 of the Act to promote the success of the Company.
CHAIRMAN'S STATEMENT
Dear Shareholder,
On 10 June 2014, the Company announced that, due to ill health, Ernest Fenton
had stepped down as Chairman of your Company and would not be seeking
re-election at the forthcoming Annual General Meeting. Since that date, I have
assumed the role of Chairman. Ernest has been a Director of the Company since
its launch in 1996 and was appointed Chairman in 2004. He has made a great
contribution to the successful running of the Company and has worked tirelessly
on behalf of shareholders over the years. I would like to thank him on behalf
of the Board for his valuable input and advice. We are going to miss his
presence on the Board and wish him a full and speedy recovery.
Following the approval of the revised investment policy on 17 April 2013, I
want to update you on progress. As you will see from the Investment Manager's
Review and the Financial Statements, £12.95 million of capital was returned to
the shareholders on 21 March 2014 through a tender offer reducing the number of
shares in issue by 4,359,438 to 13,078,541 shares. During the year, the NAV per
share fell by 7.0%, while the share price rose by 17.1%.
As expected, the remaining portfolio is concentrated in a smaller number of
companies. The Board is fully aware of the implications of this position and is
taking advice on the processes required to avoid jeopardising investment trust
status and the favourable tax treatment that comes with it. Depending on the
circumstances and the degree of portfolio concentration, it is possible that in
order to preserve that status, the Company may have to recommend to
shareholders that it enter voluntary liquidation at any time during the coming
months, and this may need to be done at relatively short notice. As a result of
this situation, and in agreement with the Auditor, the Board has decided not to
prepare the Financial Statements on a going concern basis. This has no impact
on the amounts recognised in the Financial Statements.
There is one significant holding in the portfolio which is not valued using
market prices. AnchorFree, Inc. ("AnchorFree"), representing 41.5% of net
assets, is being held at a price which reflects a transaction which took place
in 2012. The Board recently obtained an independent valuation of the Company's
holding in AnchorFree. Having reviewed the valuation report, the Board decided
to maintain the US Dollar valuation of the holding which, as at 31 March 2014,
remained unchanged since the previous fiscal year end. This valuation was
towards the lower end of the valuation range given by the independent valuer.
The Company is in the process of changing its business model from one based on
advertising to one reliant on subscriptions. The Board sees no justification to
change the valuation of this holding at this point, but any change in the
future could clearly have a very significant impact, in either direction, on
net assets.
During the 12 months ended 31 March 2014, Sterling rose sharply by 9.8%,
negatively affecting the Sterling returns for shareholders. As the process of
realisation continues, proceeds are translated into Sterling as sales are made,
but the underlying Dollar exposure in the remaining holdings is unhedged. In
accordance with the Company's investment policy, the realised proceeds,
converted into Sterling, are held in UK treasury gilts.
The Board has taken advice on the use of buyback powers during the realisation
process and concluded that share buybacks should be suspended to avoid the risk
of the Company dealing while in possession of material non-public information
on any of its listed holdings. Therefore, the Board is not seeking
shareholders' approval to renew the Company's authority to make market
purchases of shares.
The Company's portfolio holds five core positions as at the date of this
report, and we expect the Investment Manager to continue to make steady
progress along the road to realisation, recognising that, given the underlying
illiquidity in certain key investments, and the expectation that the portfolio
will be liquidated by March 2015, some time and patience will still be required
in order to maximise returns to the shareholders.
Andrew Barker
Chairman
23 June 2014
INVESTMENT MANAGER'S REVIEW
Introduction
The establishment of the new investment policy and objective on 17 April 2013
shifted the focus of the Investment Manager towards the realisation of the
portfolio by March 2015. Many positions have been sold resulting in the
21 March 2014 tender offer returning £12.95 million to shareholders and leaving a
cash balance of £2.4 million at the end of March 2014. We expect to continue
building the cash account over the next 12 months in preparation for the
realisation of the portfolio by March 2015.
Top five holdings
AnchorFree, Inc. (Private): 41.5% of net assets, Primary Industry Group:
Internet Software & Services
AnchorFree is the world's leading advertising and subscription supported
virtual private network. Over 200 million people have downloaded AnchorFree's
Hotspot Shield to protect their identities. Hotspot Shield encrypts users'
internet communications and detects and blocks malware, protecting all internet
communication and securing customer and employee data. The company platform
accommodates desktop and all forms of mobile devices. In May 2012, Goldman
Sachs invested $52 million in AnchorFree. The company continues to make
progress through the addition of new partners and new subscription revenue with
multiple offerings. AnchorFree continues to benefit from increased demand on
the back of rising concerns about internet privacy. AnchorFree is currently
ranked 12th on iOS App Store's productivity category in the US.
Cover-All Technologies (AMEX: COVR): 16.4% of net assets, Primary Industry
Group: Application Software
Cover-All Technologies provides software solutions for insurance companies,
agents and brokers. The company has a suite of software products installed with
some of the largest insurance companies in the world. With its deep product
line, we believe Cover-All Technologies could be an acquisition candidate. For
the year ended 31 December 2013, total revenues were up 26% to $20.5 million as
compared to the same period in 2012. Earnings before interest, taxes,
depreciation and amortisation for the same period were $2.6 million compared to
a loss of $1.1 million in the comparable period of 2012. On 15 May 2014,
Cover-All Technologies announced financial results for the first quarter ended
31 March 2014. Operating income was $531,000 compared to $803,000 in the
comparable period in 2013. Net income was $434,000 ($0.02 per basic and diluted
share) compared to $705,000 ($0.03 per basic and diluted share) in the same
period of 2013.
Flamel Technologies Ltd (NASDAQ: FLML): 16.1% of net assets, Primary Industry
Group: Pharmaceuticals
Flamel Technologies engages in the development and commercialisation of
controlled release therapeutic products. The company is transforming itself
into a high margin specialty pharmaceutical company. Earlier the company
received an approval for Bloxiverz, the first FDA-approved version of
neostigmine sulfate, a drug used to reverse neuromuscular blocking drugs in
surgical procedures. The company expects solid revenue growth from Bloxiverz
throughout 2014. On 7 March 2014, the company announced a successful completion
of a $113.0 million equity financing. For the year ended 31 December 2013,
revenues were up 16% to $26.0 million and the net loss decreased to
$3.3 million.
Bovie Medical Corporation (AMEX: BVX): 9.4% of net assets, Primary Industry
Group: Healthcare Equipment
Bovie Medical engages in the development, manufacture and marketing of
electrosurgical generators and disposables. On 13 December 2013, the company
announced the completion of a $7.0 million funding by Great Point Partners, a
leading health care investment firm. This new funding is earmarked to
accelerate the growth of Bovie Medical's innovative signature technology,
J-Plasma. On the same date the board of directors appointed Robert L. Gershon
as the company's new chief executive officer. Mr. Gershon has over 25 years of
healthcare experience most recently as a senior sales and marketing executive
at Covidien (NYSE: COV) and Henry Schein (NASDAQ: HSIC). For the year ended
31 December 2013, sales totalled $23.6 million resulting in a loss of
$4.3 million. For the comparable period in 2012, sales were $27.7 million
resulting in a net income of $617,000. 2013 results were negatively impacted by
an overall decline in the OEM business, the costs of legal fees and continued
investments in J-Plasma. The Investment Manager believes that J-Plasma has
great promise and will begin to impact operations in 2014.
iSatori, Inc. (OTCBB: IFIT): 9.0% of net assets, Primary Industry Group:
Personal Products
iSatori is a developer and marketer of scientifically engineered nutritional
supplements focusing upon specific markets, including weight loss and sports
nutrition. This year the company has entered the mass market through major
retail outlets including Wal-Mart, Walgreens and Duane Reade. The company also
introduced a new category-defining product called Bio-Gro. GNC (NYSE: GNC),
America's largest sports supplement retailer, began carrying Bio-Gro in January
2014. The company has a long-term sales target of $25- $50 million. For the
year ended 31 December 2013, total revenues increased by 14% to $10.6 million.
The net loss for the same period was $959,000 compared to a loss of $1,030,638
for 2012.
Other holdings
As at 31 March 2014, your Company owned a total of eight holdings, with the
three holdings outside the top five positions representing 2.1% of net assets
in total. These three holdings are in oil and gas exploration (PetroHunter
Energy), advertising (Tiger Media) and clothing and accessories (Charles &
Colvard).
Conclusion
The Investment Manager has made progress in realising value demonstrated in the
recent return of £12.95 million in capital to shareholders. The Investment
Manager is working actively towards realising the balance of the portfolio by
March 2015.
While some holdings are sufficiently liquid to allow open market sales, others
either are not or have other characteristics which will require a structural
solution. The Investment Manager has experience in liquidating portfolios and
is optimistic that the prospects for profitable realisation are good.
Holdings at 31 March 2014 and top ten holdings at 31 March 2013
31 March 2014 % of Net Assets 31 March 2013 % of Net Assets
AnchorFree 41.5 AnchorFree 31.8
Cover-All iSatori 11.5
Technologies 16.4
Cover-All
Flamel Technologies 16.1 Technologies 11.1
Bovie Medical 9.4 Points International 7.3
iSatori 9.0 Plures Technologies 7.0
Tiger Media 1.0 Bovie Medical 6.1
Charles & Colvard 0.9 Flamel Technologies 4.0
PetroHunter Energy 0.2 Hollysys Automation
Technologies 2.8
DXP Enterprises 1.8
Titan Machinery 1.6
Russell Cleveland
RENN Capital
23 June 2014
OTHER STATUTORY INFORMATION
Objective
To conduct an orderly realisation of the assets of the Company, to be effected
in a manner that seeks to achieve a balance between returning cash to
shareholders promptly and maximising the value of the Company's portfolio.
Strategy and business model
Investment policy
The Company's investments will be realised in an orderly manner in accordance
with the investment objective.
The Company may not make any new investments save that (a) subject to Board
approval, further investment may be made into existing investments in order to
preserve the value of such investments; and (b) realised cash may be invested
in liquid cash-equivalent securities, denominated in Sterling, including
short-dated corporate bonds, government bonds, cash funds, or bank cash
deposits pending its return to shareholders in accordance with the Company's
investment objective.
No more than 10% of the Company's total assets may be invested in any single
cash equivalent instrument or placed on deposit with any single institution
except that this limit does not apply to investment in government bonds, which
shall be unconstrained.
The Company may not employ gearing.
The Company will continue to comply with the restrictions imposed by the
Listing Rules in force from time to time.
Business and status of the Company
The Company is an investment company in accordance with the provisions of
Section 833 of the Act. The Directors expect that the process of realisation
will result in a transition to voluntary liquidation in order to preserve the
Company's investment trust status. The timing of such a move is uncertain but
is unlikely to be later than the end of March 2015.
The principal activity of the Company is to conduct business as an investment
trust. The Company has received approval from HM Revenue & Customs ("HMRC") as
an authorised investment trust under Sections 1158 and 1159 of the Corporation
Tax Act 2010 ("Sections 1158 and 1159"). This approval is subject to there
being no subsequent enquiry under corporation tax self-assessment and to there
being no subsequent serious breaches of the regulations. The Directors of the
Company will endeavour to direct the Company's affairs so as to enable it to
continue to qualify for such approval.
The Company's status as an investment trust allows it to obtain an exemption
from paying taxes on the profits made from the sale of its investments.
Investment trusts offer a number of advantages for investors, including access
to investment opportunities that might not be open to private investors and to
professional stock selection skills at low cost.
The Company's shares are listed on the premium segment of the Official List of
the UK Listing Authority and traded on the Main Market of the London Stock
Exchange.
Portfolio analysis
A review of how the Company's assets have been invested is contained in the
Investment Manager's Review above. A list of the Company's investments is
contained in the Investment Portfolio above. The Investment Portfolio sets out
the sector and geographical distribution of the Company's holdings. As at
31 March 2014, the Company held eight investments, excluding cash and other net
assets. As the Investment Manager continues to realise the Company's
investments in accordance with its investment policy, the number of holdings is
expected to reduce further.
Results and dividend
The results for the year are set out in the Income Statement and Reconciliation
of Movements in Shareholders' Funds below. The Directors recommend that no
dividend be paid in respect of the year ended 31 March 2014 (2013: nil).
Key performance indicators
The key performance indicator for the Company is progress towards meeting the
Company's objective of realising its assets. The Directors also consider the
benchmark, which is the Russell 2000 Index. It should be noted though that the
relevance of this indicator is diminishing as the Company moves towards its
objective. At each Board meeting, the Directors consider a number of
performance measures to assess the Company's success in achieving its
objective. The key performance indicators used to measure progress and
performance of the Company over time are established industry measures and are
as follows:
Progress towards the Company's objective
During the year, £13.62 million of assets were sold and the sum of
£12.95 million was returned to shareholders via a tender offer.
Net asset value
In the year to 31 March 2014, the NAV per share decreased by 7.0% from 328.32p
to 305.35p. This compares with the total return gain of 13.7% from the Russell
2000 Index, adjusted to Sterling.
Share price
In the year to 31 March 2014, the Company's share price increased by 17.1% from
234.50p to 274.50p.
Share price discount to net asset value
The underlying discount to NAV fell during the year. The discount ranged from a
low of 9.92% on 7 March 2014 to a high of 30.24% on 31 May 2013, averaging
23.44% for the year. As at 31 March 2014, the Company's shares traded at a
discount of 10.10% compared to 28.58% as at 31 March 2013.
Net asset value total return per Ordinary share
There was a decrease in the loss per share in the year to 31 March 2014 of 8.5%
from (6.47)p to (5.92)p.
For the year ended 31 March 2014, the NAV return of the Company, measured in
US Dollars, rose by 2.1% compared to a rise of 24.9% for the Russell 2000. The net
asset value return of the Company, measured in Sterling, fell by 7.0% compared
to a rise of 13.7% for the Russell 2000. Since the inception of the Company in
1996, the Sterling annualised return has been 7.1% against the Russell 2000
annualised return of 8.1%.
Ongoing charges
The ongoing charges ratio was 2.45% (2013: 2.25%) in the year to 31 March 2014.
Events subsequent to the year end
As detailed in the Chairman's Statement above, Mr Barker succeeded Mr Fenton as
Chairman of the Company on 10 June 2014.
There have not been any other significant events subsequent to the year end,
nor is the Board aware of any potential developments that are likely to have a
significant impact on the Company.
Investment Management Agreement
The Company's investments are managed by RENN Capital under an agreement dated
17 May 1996, as amended. Pursuant to the Side Letter to the Investment
Management Agreement dated 19 March 2013 and following the approval of the
shareholders at the General Meeting held on 17 April 2013, the Investment
Manager is paid a fixed monthly fee of $90,000. If the realisation of the
Company's assets is ongoing after 19 March 2015, the Board and Investment
Manager will review the fixed monthly fee; this fee would also be renegotiated
on the appointment of liquidators to the Company.
Under the revised terms, the hurdle for the achievement of any performance fee
will be a cash amount which must be returned to shareholders before a
performance fee can be earned (the "Cash Hurdle"). The Cash Hurdle will be the
audited NAV as at 31 March 2013 plus a notional accrual (the "Accrual"), which
will reflect the time value of money between 17 April 2013 and actual returns
of cash in excess of the Cash Hurdle. The Investment Manager will be entitled
to 10% of any amounts returned to shareholders in excess of the Cash Hurdle
(including the Accrual). The Company and the Investment Manager have agreed
that the opening Cash Hurdle will be the audited NAV as at 31 March 2013, in
Sterling terms, and the Accrual will be 8% per annum (compound) calculated on
the opening Cash Hurdle. The total performance fee payable will be capped at an
amount equivalent to 10% of the NAV as at 31 March 2013.
The management agreement may be terminated by either party giving to the other
not less than 12 months' notice in writing at any time. No additional
compensation is payable to the Investment Manager in the event of termination.
Further details of the Investment Manager's fees are given in Note 3 to the
Financial Statements.
Appointment of the Investment Manager
Through the Management Engagement Committee, the Directors keep under review
the performance of the Investment Manager. In the opinion of the Directors, the
continuing appointment of RENN Capital as Investment Manager, on the terms
outlined in the Investment Management Agreement dated 17 May 1996, as amended,
is in the best interests of shareholders as a whole.
Principal risks and uncertainties associated with the Company
Risks associated with investing in the Company include, but are not limited to,
risk associated with non-compliance with Sections 1158 and 1159, valuation
risk, concentration risk, liquidity/marketability risk, interest rate risk,
foreign currency risk, country risk, market price and discount volatility risk
and risks associated with the engagement of third parties.
Compliance with Sections 1158 and 1159
If the Company did not comply with the provisions of Sections 1158 and 1159, it
would lose its investment trust status for taxation purposes. There is a risk
that the diversification test which needs to be met in order to ensure
compliance may be breached by the increasing concentration of the Company's
holdings. The Board continues to monitor this risk by taking professional
advice on the matter. At each Board meeting, the status of the Company is
considered and discussed, so as to ensure compliance with the criteria of
Sections 1158 and 1159.
Valuation risk
The Directors take responsibility for the valuation of a number of holdings
which are unlisted. The valuations are the result of a range of valuation
techniques described in Note 1 to the Financial Statements and do involve
elements of judgement which may mean that the values recognised in the event of
a sale might be significantly different from those used in the Financial
Statements.
Concentration risk
The portfolio of the company is concentrated in a few investee companies, with
the top five investments representing 92.4% of the net assets. Concentration in
a small number of holdings can leave the Company more exposed to liquidity
problems and market losses. The insolvency or other business failure of any one
or more of these main portfolio positions could have a material effect on the
Company, its operations and ability to achieve its objectives.
As the Company progresses with its objective to realise its assets in order to
return cash to shareholders, the degree of concentration is likely to increase.
This could impact the Company's ability to comply with the requirement under
Sections 1158 and 1159 to spread investment risk with a diversified portfolio.
The Board and the Investment Manager will be monitoring the concentration risk
on an ongoing basis.
Liquidity/marketability risk
The Company is exposed to the US equity markets and could therefore be affected
by a decline in the US equity markets as a whole. Furthermore, a large
proportion of the stocks in which the Company invests are, by their very
nature, less readily marketable than, for example, blue-chip UK equities, and
the Company may hold significant ownership stakes. The Company's largest
position is in a private company with no stock market liquidity. The Investment
Manager attempts to manage liquidity risk by monitoring the trading volume of
the listed stocks in which the Company invests and by seeking other methods of
realising assets. There is a risk that the absence of liquidity may cause
delays to the Company in meeting its objective of realising its assets by the
end of March 2015. The Board closely monitors the performance of the Company
through quarterly meetings and the review of monthly management accounts and
pays close attention to the progress of the realisation process. Where
possible, the Investment Manager monitors the value of the Company's underlying
securities on a daily basis.
Interest rate risk
Bond prices and interest rates are inversely correlated. Thus, when interest
rates increase, the price of a bond with a fixed coupon will decline.
Alternatively, when interest rates decline, the price of a bond with a fixed
coupon will increase. As the assets of the Company are realised, the proceeds
are invested in fixed income securities or held as cash. Where fixed income
securities are owned, they will normally be UK Government securities of
relatively short duration, held in order to control interest rate risk.
Foreign currency risk
The Company invests in US stocks and its assets are therefore subject to
fluctuations in the US Dollar/Sterling exchange rate. It is not the Company's
policy to hedge the currency risk between the US Dollar and Sterling. The
Investment Manager does not actively manage currency risk. As the portfolio is
liquidated, the proceeds will be converted to Sterling.
Country risk
The majority of the Company's investments have financial exposure to the US
economy and, therefore, will be influenced by its prospects and the performance
of the US stock market.
Market price and discount volatility risk
Since the Company invests in financial instruments, market price risk is
inherent in these investments. The Company itself, being a closed-end fund, has
generally traded at a discount to its NAV. The magnitude of this discount
fluctuates daily and can vary significantly. Thus, for a given period of time,
it is possible that the market price could decrease despite an increase in the
Company's net asset value. The Directors review the Company's discount levels
on a weekly basis. The Company seeks to manage discount volatility through
active communication with its shareholders and has, from time to time, bought
back shares. The Board has taken professional advice on the use of buyback
powers and decided that share buybacks should be suspended to avoid the risk of
the Company dealing while in the possession of material non-public information.
The Directors retain a corporate broker that can be consulted, if necessary.
Risks associated with the engagement of third parties
There are a number of potential operational risks associated with the fact that
third parties undertake the Company's administration and custody of assets.
Most seriously, there is the risk that third parties could fail to ensure
compliance with statutory requirements, such as the Companies Act 2006 and the
Listing Rules of the UK Listing Authority.
The Board regularly reviews the performance of the service providers to the
Company. As part of the review, the Board considers the regular assurances
provided from those service providers that appropriate controls are in place to
mitigate risks relating to services undertaken on behalf of the Company.
Further information on risks
Further information on risks facing the Company is included in Note 16 to the
Financial Statements: Analysis of financial assets and liabilities. Information
regarding the Company's risk review procedures may also be found under
`Internal control review' in the full Annual Report and Financial Statements.
Main trends and future development
A review of the main features of the year and the outlook for the coming year
is to be found in the Chairman's Statement and the Investment Manager's Review
above. As set out in the Chairman's Statement, the Directors believe that the
Company's strategy is proving effective and the Company is well placed to
progress its realisation process.
Gender diversity
The Board of Directors of the Company comprised four male Directors and one
female Director during, and at the end of, the year to 31 March 2014.
Employees, human rights, environmental, social and community issues
The Company has no employees and the Board is comprised entirely of
non-executive Directors. Day-to-day management of the Company's business is
delegated to the Investment Manager (details of the Investment Management
Agreement are set out above) and the Company itself has no environmental, human
rights or community policies. In carrying out its activities and in
relationships with suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Andrew Barker
Chairman
23 June 2014
Extracts from the Report of the Directors
Share capital
At the Annual General Meeting held on 30 July 2013, the Company was granted
authority to purchase up to 14.99% of the Company's Ordinary shares in issue at
that date, being 2,613,953 Ordinary shares. No shares have been bought back
under this authority.
At the General Meeting held on 13 March 2014, the Company was granted authority
to purchase up to 25% of the Company's issued share capital as at 31 March 2013
amounting to 4,359,494 Ordinary shares. As part of the Company's realisation
strategy and in accordance with the above authority, a tender offer took place
in March 2014. As a result of the tender offer, 4,359,438 Ordinary shares (with
a nominal value of £1,089,859.50), representing 24.99% of the issued share
capital at 31 March 2013, were bought back for cancellation at a price of
297.0036p. The total cost of shares purchased, including stamp duty, was
£13.0 million. As at 23 June 2014, the Company may purchase up to 56 Ordinary
shares under the existing authority. This authority will expire at the 2014
Annual General Meeting.
No shares were issued during the year.
At 31 March 2014, and as at the date of this report, the Company's issued share
capital comprised 13,078,541 Ordinary shares of 25p each. No shares were held
in treasury at the year end (2013: nil).
At general meetings of the Company, shareholders are entitled to one vote on a
show of hands and on a poll, to one vote for every share held. The total voting
rights of the Company at 31 March 2014 were 13,078,541.
Going concern
These Financial Statements are not prepared on a going concern basis because
the Directors expect that the Company will enter voluntary liquidation within
12 months in line with its investment policy. This accounting treatment has no
material impact on the Financial Statements.
Directors
The Directors who held office during the year and at the date of this report
were:
Andrew Barker (Chairman from 10 June 2014)
Steven Bates
Ernest Fenton (Chairman until 9 June 2014)
Alexandra Mackesy
William Vanderfelt
Management Report
Listed companies are required by the Financial Conduct Authority's Disclosure
and Transparency Rules (the "Rules") to include a management report within
their annual report and financial statements.
The information required to be included in the management report for the
purpose of these rules is detailed in the Strategic Report above. Therefore no
separate management report has been included.
Statement of Directors' responsibilities in respect of the Annual Report and
the Financial Statements
The Directors are responsible for preparing the Annual Report, the Directors'
Remuneration Report and the Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, they have elected to prepare the Financial
Statements in accordance with UK Accounting Standards and applicable law (UK
Generally Accepted Accounting Practice).
Under company law, the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for that
period. In preparing these Financial Statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and 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. As
explained in the Report of the Directors, the Directors do not believe that it
is appropriate to prepare these Financial Statements on a going concern basis.
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 and the the Directors'
Remuneration Report comply with the Act and the Listing Rules of the UK Listing
Authority. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
The Directors confirm that, to the best of their knowledge:
● the Financial Statements, which have been prepared in accordance with UK
Generally Accepted Accounting Practice, give a true and fair view of the
assets, liabilities, financial position and net return of the Company;
● the Strategic Report and the 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 it faces; and
● 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.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
On behalf of the Board
Andrew Barker
Chairman
23 June 2014
Non-Statutory Accounts
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 March 2013 and 31 March 2014
but is derived from those accounts. Statutory accounts for 2013 have been
delivered to the Registrar of Companies, and those for 2014 will be delivered
in due course. The Auditor has reported on those accounts; their report was
(i)unqualified, and (ii) did not contain a statement under Section 498 (2) or
(3) of the Companies Act 2006. The Auditor's report contained a reference to a
matter to which the Auditor drew attention by way of emphasis without
qualifying their report. This related to the non-going concern basis of
preparation of the Financial Statements, as set out in Note 1 to the Financial
Statements. The text of the Auditor's report can be found in the Company's full
Annual Report and Financial Statements at www.renaissanceusgrowth.co.uk.
Income Statement
for the year ended 31 March 2014
2014 2013
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Losses on investments
at fair value through
profit or loss 7 - (2,893) (2,893) - (913) (913)
Exchange (losses)/gains
on capital items 7 - (323) (323) - 22 22
Income 2 243 - 243 231 - 231
Investment management
fee 3 (677) - (677) (746) - (746)
Investment management
performance fee 3 - - - - 175 175
Other expenses 4 (587) - (587) (621) - (621)
Return before finance
costs and taxation (1,021) (3,216) (4,237) (1,136) (716) (1,852)
Interest payable - - - - - -
Return after finance
costs and before
taxation (1,021) (3,216) (4,237) (1,136) (716) (1,852)
Taxation on ordinary
activities 5 - - - (9) - (9)
Return on ordinary
activities after
taxation for the
financial year (1,021) (3,216) (4,237) (1,145) (716) (1,861)
pence pence pence pence pence pence
Return per Ordinary
share 6 (5.92) (18.63) (24.55) (6.47) (4.04) (10.51)
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue return and capital return columns have been
prepared in accordance with the AIC's Statement of Recommended Practice.
Revenue and capital return per share figures shown are also supplementary
information.
All revenue and capital items in the above statement derive from continuing
activities.
There are no recognised gains and losses other than those reflected in the
Income Statement for the year, accordingly no statement of recognised gains and
losses has been prepared.
The Notes below form part of these Financial Statements.
Reconciliation of Movements in Shareholders' Funds
for the year ended 31 March 2014
Share Capital
Share premium redemption Special Capital Revenue
capital account reserve reserve* reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2013 4,359 5,995 972 2,698 50,159 (6,931) 57,252
Increase in
investment holding
gains† - - - - 4,366 - 4,366
Net losses on sales
of investments† - - - - (7,259) - (7,259)
Exchange losses on
currency and
capital items† - - - - (323) - (323)
Tender offer (1,089) - 1,089 - (12,947) - (12,947)
Tender offer
expenses - - - - (132) - (132)
Investment
management
performance fee - - - - - - -
Retained revenue
return for the year - - - - - (1,021) (1,021)
As at 31 March 2014 3,270 5,995 2,061 2,698 33,864 (7,952) 39,936
Share Capital
Share premium redemption Special Capital Revenue
capital account reserve reserve* reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2012 4,506 5,995 825 4,008 50,875 (5,786) 60,423
Decrease in
investment holding
gains† - - - - (3,599) - (3,599)
Net gains on sales
of investments† - - - - 2,686 - 2,686
Exchange gains on
currency and capital
items† - - - - 22 - 22
Cost of share
repurchase (147) - 147 (1,313) - - (1,313)
Refund of share
repurchase
commissions - - - 3 - - 3
Investment
management
performance fee - - - - 175 - 175
Retained revenue
return for the year - - - - - (1,145) (1,145)
As at 31 March 2013 4,359 5,995 972 2,698 50,159 (6,931) 57,252
* The special reserve was created in September 1998, following a transfer from
the share premium account, to enable the Company to purchase its own shares.
† See Note 7 for further details.
The Notes below form part of these Financial Statements.
Balance Sheet
as at 31 March 2014
2014 2013
Notes £'000 £'000
Fixed assets
Investments at fair value through profit
or loss 7 - 53,404
Current assets
Investments at fair value through profit
or loss 7 37,735 -
Debtors 8 559 473
Cash at bank 2,395 4,181
40,689 4,654
Creditors - amounts falling due within one
year
Creditors and accruals 9 (222) (363)
(222) (363)
Net current assets 40,467 4,291
Total assets less current liabilities 40,467 57,695
Provision for liabilities and charges
Provision for bad debt 10 (531) (443)
Total net assets 39,936 57,252
Share capital and reserves
Called up share capital 3,270 4,359
Share premium account 5,995 5,995
Capital redemption reserve 2,061 972
Special reserve 2,698 2,698
Capital reserve 33,864 50,159
Revenue reserve (7,952) (6,931)
Equity shareholders' funds 39,936 57,252
Net asset value per Ordinary share 14 305.35p 328.32p
These Financial Statements were approved by the Board of Directors of
RENN Universal Growth Investment Trust PLC on 23 June 2014 and signed on
its behalf by:
Andrew Barker
Chairman
Company number: 3150876
The Notes below form part of these Financial Statements.
Statement of Cash Flows
for the year ended 31 March 2014
2014 2013
Notes £'000 £'000
Operating activities
Investment income received 145 63
Deposit interest received 16 7
Investment management fees paid (817) (738)
Investment management performance fee
paid - (714)
Secretarial and administration fees paid (92) (73)
Other cash payments (428) (378)
Net cash outflow from operating
activities 12 (1,176) (1,833)
Taxation
Irrecoverable overseas tax - (9)
Total taxation paid - (9)
Capital expenditure and financial
investment
Purchases of investments (14,528) (7,316)
Sales of investments 27,273 13,881
Net cash inflow from capital expenditure
and financial investment 12,745 6,565
Financing
Repurchase of Ordinary shares for
cancellation - (1,313)
Repurchase commissions refunded - 3
Tender offer (13,063) -
Net cash outflow from financing (13,063) (1,310)
(Decrease)/increase in cash 13 (1,494) 3,413
The Notes below form part of these Financial Statements.
Notes to the Financial Statements
for the year ended 31 March 2014
1 ACCOUNTING POLICIES
Basis of preparation
The Financial Statements are prepared under the historical cost convention, as
modified by the revaluation of fixed asset investments, and in accordance with
applicable accounting standards in the UK and with the Statement of Recommended
Practice regarding the Financial Statements of Investment Trust Companies and
Venture Capital Trusts, issued by the AIC in January 2009. All the Company's
activities are continuing. As explained in the Directors' Report, the Financial
Statements are not prepared on the going concern basis.
Investments
Financial assets are designated by the Company as at fair value through profit
or loss. Purchases and sales of financial assets are recognised on the trade
date, which is when the Company commits to purchase or sell the assets.
After initial recognition, the Company measures financial assets designated as
at fair value through profit or loss, at fair values without any deduction for
transaction costs it may incur on their disposal. The fair value of quoted
financial assets is their last traded price at the balance sheet date, unless
liquidity constraints or other factors require a Directors' valuation, as
described below.
Unlisted investments are valued by the Directors as follows:
● Where possible, unlisted equity investments are included at fair value based
on the last arm's length transaction that has taken place in the security held
by the Company. This price is reviewed by the Directors at year end to ensure
that there has not been a significant alteration in the market or stock specific
conditions since the transaction date that would make the use of the
transaction price insufficiently recent. Third party valuations may be
commissioned where the Board believes it to be appropriate.
● Unlisted convertible debentures investments and unlisted convertible
preferred stock of companies with a quoted common stock are valued by reference
to the fair value of the underlying equity of the investments only if
conversion terms are satisfied. When the conditions are satisfied, the closing
last traded price of the common stock is used to value the position.
● For ordinary unlisted debentures, an estimate of the fair value is derived
based on a discounted cashflow analysis. In performing the analysis, the
Directors estimate the cashflows they expect to arise from holding the
investment. The Directors also estimate an appropriate discount factor to apply
to the investment. The Directors then estimate the fair value of the investment
based on the expected cashflows and the discount factor they have identified.
● Unlisted warrant investments are valued at fair value using the Black Scholes
methodology which includes a time value which is calculated and added to the
intrinsic value to arrive at a total valuation for each warrant. The Black
Scholes pricing formula requires five inputs: (i) stock price, (ii) exercise
price, (iii) time to expiration, (iv) volatility and (v) interest rates. The
stock price, exercise price and time to maturity are straightforward inputs.
The interest rate is a risk-free rate represented by the yield on a US Treasury
security for a term that corresponds to the time to expiration of the subject
warrant.
The application of the Black Scholes methodology requires certain assumptions
to be made around the volatility of the underlying shares to which the warrants
subscribe. The Directors have agreed that the Company use the 100-day
volatility measure of the Russell 2000 Index to give the best reflection of
fair value.
The intrinsic value is calculated by reference to the quoted price of the
investment into which the warrant will convert and the conversion price for
each warrant.
Investment transactions are recognised on the date that they are traded.
Realised gains and losses arising from the sale of investments, and gains and
losses arising from changes in the fair value of financial assets held at fair
value through profit or loss, are included in the Income Statement in the
period in which they arise. Gains and losses arising from changes in the fair
value of financial assets classified as at fair value through profit or loss
include interest income.
Gains and losses arising from changes in the fair value of financial assets are
considered to be realised to the extent that they are readily convertible to
cash, without accepting adverse terms, at the balance sheet date. Fair value
gains on unlisted investments are not considered to be readily convertible to
cash and therefore treated as unrealised. The treatment of listed investments
is dependent upon the individual circumstances of each holding.
There is a degree of uncertainty in determining the fair values ascribed to the
unlisted investments held by the Company and the Directors have used their
judgement in determining the most appropriate methodology and valuation for
each unlisted investment. These estimates may differ significantly to the
values that might have been used if an active market existed.
Where investments in a company have been valued at nil, the loss has been
charged to the capital reserve. Other than as stated above, any unrealised
profits and losses are taken directly to the capital reserve. Any realised
profits and losses arising on the disposal of investments are also taken
directly to the capital reserve.
Income recognition
Dividends receivable on quoted shares are included in the Financial Statements
when the investments concerned are quoted `ex-dividend'.
Dividends receivable on such shares where no ex-dividend date is quoted are
brought into account when the Company's right to receive payment is
established. The fixed return on a debt security is recognised on a time
apportionment basis so as to reflect the effective yield on the debt security.
Interest receivable is included on an accruals basis.
The ordinary element of stocks received in lieu of dividends is recognised as
income of the Company. Any enhancement above the equivalent value of the cash
dividend that would have been receivable is treated as a capital gain on the
associated investment.
Management expenses and finance costs
Management expenses and finance costs are allocated in full to the revenue
account. The investment management performance fee, which is based on capital
performance, is charged to capital (see Note 3).
Foreign currency
Transactions denominated in foreign currencies are converted to Sterling at the
actual exchange rate as at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the year end are reported at
the rate of exchange at the balance sheet date. Any gain or loss arising from a
change in exchange rate subsequent to the date of the transaction is included
as an exchange gain or loss in the capital reserve or the revenue account
depending on whether the gain or loss is of a capital or revenue nature.
Taxation
No taxation liability arises on gains from sales of fixed asset investments
made by the Company by reason of its investment trust status. However, the net
revenue (excluding UK dividend income and overseas dividend income from 1 July
2009) accruing to the Company is liable to corporation tax at the prevailing
rates.
The payment of taxation is deferred or accelerated because of timing
differences between the treatment of certain items for accounting and taxation
purposes. Full provision for deferred taxation is made under the liability
method, without discounting, on all timing differences that have arisen but not
reversed by the balance sheet date, unless such provision is not permitted by
FRS 19: Deferred Tax.
Capital reserve
The following are accounted for in this reserve:
● gains and losses on the realisation of investments*;
● changes in fair value of investments held which are readily convertible to
cash, without accepting adverse terms*;
● realised exchange differences of a capital nature*;
● other capital charges and credits charged or credited to this account in
accordance with the above policies*;
● changes in fair value investments held which are not readily convertible to
cash, without accepting adverse terms; and
● unrealised exchange differences of a capital nature.
* Items classified as distributable to shareholders for the purpose of
purchasing the Company's own shares for cancellation.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment business. The Company invests primarily
in companies listed, quoted or domiciled in the US and Canada. Geographical
analysis of the portfolio is shown above.
2 INCOME
2014 2013
£'000 £'000
Income from US investments
Convertible debenture stocks - unlisted 82 161
UK Government stocks - listed 144 -
Equity shares - listed 1 63
227 224
Other income
Bank interest receivable 16 7
Total income 243 231
Total income comprises:
Dividends from financial assets designated at fair value
through profit or loss 1 63
Interest from financial assets designated at fair value
through profit or loss 226 161
Deposit interest from financial assets not at fair value
through profit or loss 16 7
243 231
3 INVESTMENT MANAGEMENT FEE
2014 2013
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 677 - 677 746 - 746
Investment management
performance fee - - - - - -
Adjustment to prior year
performance fee - - - - (175) (175)
The investment management fee is charged 100% to revenue. Investment management
fees of £677,000 (2013: £746,000) have been charged to the Income Statement. At
31 March 2014, £54,000 (2013: £193,000) was due for payment to the Investment
Manager in respect of investment management fees.
Following shareholder approval at the General Meeting on 17 April 2013, the
terms of the Investment Management Agreement between the Company and the
Investment Manager were amended in order to reflect the modification of the
Company's investment objective and policy to better align the interests of the
shareholders and the Investment Manager during the managed wind-down period.
The Investment Manager is now paid a fixed monthly fee of $90,000.
A performance fee may also become payable at the end of each year and this is
charged 100% to capital. Under the revised terms, the hurdle for the
achievement of any performance fee will be a cash amount which must be returned
to shareholders before a performance fee can be earned (the "Cash Hurdle"). The
Cash Hurdle will be the audited NAV as at 31 March 2013 plus a notional accrual
(the "Accrual"), which will reflect the time value of money between 17 April
2013 and actual returns of cash in excess of the Cash Hurdle. The Investment
Manager will be entitled to 10% of any amounts returned to shareholders in
excess of the Cash Hurdle (including the Accrual). The Company and the
Investment Manager have agreed that the opening Cash Hurdle will be the audited
NAV as at 31 March 2013, in Sterling terms, and the Accrual will be 8% per
annum (compound) calculated on the opening Cash Hurdle. The total performance
fee payable will be capped at an amount equivalent to 10% of the NAV as at
31 March 2013. No performance fee has been accrued for the year ended 31 March
2014 (2013: £nil).
Prior to the payment of the performance fee of £889,000 for the year to
31 March 2012, a further review of the fee was performed and it was identified
that the incorrect benchmark index had been used in the calculation process.
This oversight was applicable to the financial year ended 31 March 2012 only.
The recalculation of the performance fee resulted in it being revised to
£714,000, a reduction of £175,000. This adjustment is reflected within the
Income Statement. The fee of £714,000 was paid to the Investment Manager on
3 August 2012.
4 OTHER EXPENSES
2014 2013
£'000 £'000
Secretarial and administration services 86 80
Auditor's remuneration 38 37
Directors' remuneration 117 117
Other expenses 258 232
Provision for bad debt/income written off 88 155
587 621
Total fees paid to the Auditor for the year, all of which
were charged to revenue, comprised:
Audit services - statutory audit - current year 33 32
Tax services - compliance services 5 5
38 37
The Directors do not consider that the provision of non-audit work to the
Company affects the independence of the Auditor.
5 TAXATION ON ORDINARY ACTIVITIES
2014 2013
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(a) Analysis of charge in
year:
Based on net return for
the year
Overseas tax suffered - - - 9 - 9
(b) Factors affecting the current tax charge:
The tax assessed on the net return for the year is different to the standard
rate of corporation tax of 23% (2013: 24%). The differences are reconciled
below:
2014 2013
£'000 £'000
Return on ordinary activities before tax (4,237) (1,852)
Theoretical tax at UK corporation tax rate of 23%
(2013:24%) (975) (445)
Effects of:
Losses on investments and exchange losses on capital
items 740 172
Expenses not deductible for tax purposes 16 -
Foreign dividends that are not taxable - (15)
Irrecoverable overseas tax - 9
Excess management expenses for tax purposes 219 288
Total current tax charge - 9
The Company is subject to corporation tax at 23% (2013: 24%). However, the
available tax deductible expenses (including substantial brought forward
amounts) exceed the taxable income of the Company and, as a result, there is no
UK tax charge (2013: £nil), other than withholding tax suffered on foreign
dividends receipts.
At 31 March 2014, the Company had unrelieved losses for tax purposes of
£16,195,000 (2013: £15,431,000) which have not been recognised as a deferred tax
asset. This is because the Company is not expected to generate taxable income
in future periods in excess of the deductible expenses of those future periods
and, accordingly, it is unlikely that the Company will be able to reduce future
tax liabilities through the use of existing surplus expenses.
The Company carries out its activities as an investment trust and the intention
is to continue meeting the conditions required to obtain approval in the
foreseeable future. Therefore, the Company has not provided deferred tax on any
capital gains and losses arising on the revaluation or disposal of investments.
6 RETURN PER ORDINARY SHARE
2014 2013
Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence
Basic (5.92) (18.63) (24.55) (6.47) (4.04) (10.51)
Revenue return per Ordinary share is based on the net return on ordinary
activities after taxation of £(1,021,000) (2013: £(1,145,000)) and on
17,258,824 (2013: 17,703,174) Ordinary shares, being the average number of
Ordinary shares in issue during the year.
Capital return per Ordinary share is based on a net capital return for the year
of £(3,216,000) (2013: £(716,000)), and on 17,258,824 (2013: 17,703,174)
Ordinary shares, being the average number of Ordinary shares in issue during
the year.
7 INVESTMENTS
2014 2013
£'000 £'000
a) Investment portfolio summary
Listed investments
- Equities 21,071 31,300
- Warrants - 4
Unlisted investments
- Equities - -
- Convertible debenture stocks 100 594
- Loan notes - 753
- Convertible preference shares 16,564 20,003
- Warrants - 750
37,735 53,404
Listed equities make up 56% (2013: 59%) of the total portfolio and 53%
(2013: 55%) of the net assets.
2014
Listed Unlisted Total
£'000 £'000 £'000
b) Analysis of investment portfolio movements
Opening book cost 30,736 6,835 37,571
Opening investment holding gains 568 15,265 15,833
Opening valuation 31,304 22,100 53,404
Movements in the year:
Purchases at cost 13,157 1,371 14,528
Sales
- Proceeds (26,593) (711) (27,304)
- Realised gains on sales 5,239 - 5,239
- Realised losses on write-offs (7,191) (5,307) (12,498)
Increase/(decrease) in investment holding gains 5,155 (789) 4,366
Closing valuation 21,071 16,664 37,735
Closing book cost 15,348 2,188 17,536
Closing investment holding gains 5,723 14,476 20,199
21,071 16,664 37,735
During the year, the Company incurred transaction costs of £11,000 (2013:
£33,000) on purchases of investments and £65,000 (2013: £64,000) on sales of
investments. These are included within losses on investments in the Income
Statement.
2014 2013
£'000 £'000
c) Analysis of capital gains and losses
Net losses on investments designated at fair value
through profit or loss on initial recognition
Net realised (losses)/gains on sales/ write-offs (7,259) 2,686
Increase/(decrease) in investment holding gains 4,366 (3,599)
(2,893) (913)
Exchange (losses)/gains on capital items (323) 22
d) Fair value gains and losses
With effect from 1 April 2008, changes in fair value of investments which are
readily convertible to cash, without accepting adverse terms, at the balance
sheet date are considered to be realised. Fair value gains on unlisted
investments are not treated as readily convertible to cash, whereas the
treatment of fair value gains on listed investments depends on the individual
circumstances of each investment.
The Company's investments in Global Axcess, Hemobiotech, Plures Technologies
and SinoHub were written off during the year, realising losses of £1,177,000,
£1,094,000, £7,171,000 and £2,942,000, respectively. The Company received
liquidation proceeds of £691,000 for Pipeline Data convertible debenture,
realising losses of £134,000. Other than those stated, there were no other
material changes to unlisted investments.
e) Unlisted securities
Details of material investments in unlisted securities are as follows:
Carrying Carrying Net Latest
value at value at income accounts Aggregate Loss
Total 31 March 31 March from for year capital and after tax
Investment cost 2014 2013 investment end reserves for year
£'000 £'000 £'000 £'000 US$ US$
AnchorFree
Convertible
preference 1,117 16,563 18,185 - 31/03/2014 n/a† n/a†
iSatori
Convertible
preference 45 1 2 - 31/12/2013 2,728,070 (958,640)
Warrants - - - - 31/12/2013 2,728,070 (958,640)
PetroHunter
Energy
Convertible
debenture 1,026 100 201 88* 30/06/2013 (81,400,800) (7,683,060)
Warrants - - - - 30/06/2013 (81,400,800) (7,683,060)
† Private company - Information not available to the public domain.
* Against which a 100% provision has been taken.
f) Significant interests
The following are investments in which the Company has an interest exceeding
20% of the nominal value of that class in the investee company.
Country of % of class
Investment registration Class of capital held
AnchorFree US Series B Convertible
Preferred 40.2
PetroHunter Energy US 8.5% Convertible Debenture 30.2
Cover-All Technologies US Common stock 28.7
iSatori US Common stock 20.6
The Company holds more than 20% of the common stock of Cover-All Technologies
and iSatori. The investment in these companies is not held on a long-term basis
and although it is greater than 20%, the value to the Company is the marketable
value, as a part of the overall investment portfolio. Accordingly, they have
not been accounted for as associate companies.
In addition to the above, the Company has a holding of 3% or more that is
material in the context of the accounts in the following investments:
Country of % of class
Investment registration Class of capital held
AnchorFree US Series A Convertible 7%
Preferred 9.1
Bovie Medical US Common stock 9.0
iSatori US Convertible 9% Preferred 4.2
A full listing of the investment portfolio is provided above.
8 DEBTORS - amounts falling due within one year
2014 2013
£'000 £'000
Accrued income 532 450
Prepayments and other debtors 27 23
559 473
The carrying amount for prepayments, accrued income and dividends receivable
disclosed above reasonably approximates to its fair value at the year end and
is expected to be realised within a year from the balance sheet date.
9 CREDITORS - amounts falling due within one year
2014 2013
£'000 £'000
Accruals 222 363
222 363
At 31 March 2014, £7,000 was due for payment to the Administrator
(2013: £14,000).
At 31 March 2014, £54,000 was due for payment to the Investment Manager
(2013: £193,000) in respect of investment management fees and £nil (2013: £nil)
in respect of the performance fee.
The carrying amount for accruals and deferred income disclosed above reasonably
approximates to its fair value at the year end and is expected to be realised
within a year from the balance sheet date.
10 PROVISION FOR LIABILITIES AND CHARGES
2014 2013
£'000 £'000
Provision for bad debt 531 443
531 443
A provision has been made for 100% (2013: 100%) of the Company's debtor of
PetroHunter 8.5% convertible debenture interest, on the grounds of uncertainty
that full payment will be received.
11 CALLED UP SHARE CAPITAL
2014 2013
£'000 £'000
Allotted, called up and fully paid:
13,078,541 (2013: 17,437,979) Ordinary shares
of 25p each 3,270 4,359
During the year, the Company tendered 4,359,438 Ordinary shares, for
cancellation, at a cost of £2.970 per share and a total consideration of
£13,012,000 (including stamp duty).
The Company does not have any externally imposed capital requirements.
The capital of the Company is managed in accordance with its investment policy
in pursuit of its investment objective.
12 RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH
OUTFLOW FROM OPERATING ACTIVITIES
2014 2013
£'000 £'000
Net return before finance costs and taxation (4,237) (1,852)
Net capital return 3,216 716
Increase in provision for bad debts 88 155
Decrease in creditors and accruals (157) (691)
Increase in prepayments and accrued income (86) (161)
(1,176) (1,833)
13 RECONCILIATION OF NET CASH FLOW TO NET FUNDS
2014 2013
£'000 £'000
(Decrease)/increase in cash in the year (1,494) 3,413
Effect of exchange rate movements (292) 17
Movement in net funds (1,786) 3,430
Net funds at beginning of year 4,181 751
Net funds at end of year 2,395 4,181
Net funds are comprised as follows:
2014 2013
£'000 £'000
Cash at bank 2,395 4,181
Net funds at 31 March 2,395 4,181
14 NET ASSET VALUE PER ORDINARY SHARE
The basic net asset value per Ordinary share is based on net assets of
£39,936,000 (2013: £57,252,000) and on 13,078,541 (2013: 17,437,979) Ordinary
shares, being the number of shares in issue at the year end.
There are no dilutive elements or potentially dilutive elements in existence at
the year end (2013: none).
15 COMMITMENTS AND CONTINGENT LIABILITIES
At 31 March 2014, there were no outstanding commitments or contingent
liabilities (2013: none).
16 ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES
As detailed above, the investment objective of the Company is to conduct an
orderly realisation of the assets of the Company, to be effected in a manner
that seeks to achieve a balance between returning cash to shareholders promptly
and maximising the value of the Company's portfolio.
The Company's principal financial instruments comprise securities, warrants,
other investments and bank deposits which are held to achieve its investment
objective and to manage the Company's funding and liquidity requirements. The
Company has other financial assets and liabilities such as debtors and
creditors that arise from its operations, for example sales and purchases of
securities awaiting settlement and debtors of accrued income.
The nature and extent of the financial instruments outstanding at the balance
sheet date and the risk management policies employed by the Company are
discussed below.
The principal risks the Company faces through the holding of financial
instruments are:
● market risk, comprising currency risk, interest rate risk and other price
risk; and
● liquidity/marketability risk.
The Company does not enter into derivative contracts.
The Investment Manager monitors the financial risks affecting the Company on a
daily basis. The Directors receive financial information on a monthly basis
which is used to identify and monitor risk.
As required by FRS 29: Financial Instruments: Disclosure, an analysis of
financial assets and liabilities, which identifies the risk to the Company of
holding such items, is given below.
Market risk
The Company's strategy on the management of investment risk is driven by the
Company's investment objective, which is detailed above. The Investment Manager
monitors the financial risks affecting the Company on a daily basis in
accordance with the policies and procedures in place. The Board manages the
market price risks inherent in the investment portfolio by ensuring full and
timely access to relevant information from the Investment Manager. The Board
meets regularly and at each meeting reviews the investment performance, the
investment portfolio and the rationale for the current investment positioning
to ensure consistency with the Company's objective and investment policy. The
portfolio does not seek to reproduce the Russell 2000 Index.
Financial assets
All financial assets are stated in Sterling and disclosed at fair value through
profit or loss. Analysis of the Company's investment portfolio is given above.
Further details of warrants held are given below.
Intrinsic Time Total Expiry
value value value date
£'000 £'000 £'000
iSatori - - - 01/06/2014
PetroHunter Energy - - - 31/12/2014
Value at 31 March 2014 - - -
As discussed in the accounting policies of the Company in Note 1 above,
unquoted warrants are valued at fair value using the Black Scholes methodology,
which includes a time value which is calculated and added to the intrinsic
value to arrive at the total valuation for each warrant.
The method of valuing the fixed asset investments is discussed in the
accounting policies of the Company in Note 1 above.
Foreign currency risk
Due to the Company's holdings being wholly overseas, the Company is also
exposed to the risk of movement in the Sterling/Dollar exchange rate. The
Company does not, nor does it intend to, hedge the portfolio against any
movement in the exchange rate.
The Investment Manager monitors the exposure to foreign currencies on a daily
basis and reports to the Directors on a regular basis. The Investment Manager
measures the risk to the Company of the foreign currency exposure by
considering the effect on the Company's net asset value and income of a
movement in the rates of exchange to which the Company's assets, liabilities,
income and expenses are exposed.
The Company settles its investment transactions from its bank accounts in US
Dollars. In the year ended 31 March 2014, exchange losses of £323,000
(2013:gains of £22,000) relating to currency, have been taken to the capital
reserve.
The primary currency risk is between Sterling and US Dollar.
The Directors consider currency risk, but as stated in the Company's investment
policy above, it is not their intention to hedge currency risk between the US Dollar
and Sterling.
The Investment Manager's risk assessment policy is reflected in its investment
strategy. In order to protect against inflation and grow capital, the fund
invests in small companies that it believes will grow into larger companies,
with the intention of increasing the value of the investment.
The currency profile of the Company's financial assets at 31 March was as
follows:
Other
Investment current Financial Financial
As at 31 March 2014 portfolio Cash assets assets liabilities
£'000 £'000 £'000 £'000 £'000
Sterling - 2,248 28 2,276 162
US Dollar 37,735 147 531 38,413 592
Canada Dollar - - - - -
37,735 2,395 559 40,689 754
Other
Investment current Financial Financial
As at 31 March 2013 portfolio Cash assets assets liabilities
£'000 £'000 £'000 £'000 £'000
Sterling - 117 23 140 145
US Dollar 49,208 4,064 450 53,722 661
Canada Dollar 4,196 - - 4,196 -
53,404 4,181 473 58,058 806
The Company has a total exposure as a percentage of net assets to US Dollar of
95% (2013: 93%) and Canadian Dollar of nil% (2013: 7%).
Sensitivity analysis
At 31 March 2014, had Sterling strengthened by 10% in relation to the
US Dollar, with all other variables held constant, the net assets attributable
to shareholders and the return for the year would have decreased by £3,438,000
(2013: £4,824,000). A 10% weakening of Sterling against the US Dollar would
have resulted in an equal but opposite effect.
Interest rate risk
The Company's portfolio is partially invested in interest bearing securities of
various types (as set out below). At the time of investing, interest rates are
fixed and as long as the security concerned remains unimpaired, cash flows will
not be affected by movements in long-term interest rates. The Company also
holds cash in the short term.
The Company's interest rate risk is managed on a daily basis by the Investment
Manager in accordance with policies and procedures in place. The overall
interest rate risks are monitored on a regular basis by the Directors.
The Directors consider interest rate risk as part of their overall assessment
of risk in the portfolio. The interest rate profile of the Company's fixed
interest financial assets at 31 March was as follows:
Weighted
Weighted average
average period for
interest which rates
Value Value rate are fixed
US$'000 £'000 % (years)
As at 31 March 2014
US unlisted convertible debentures 166 100 0.1 -
US unlisted loan notes - - - -
US unlisted convertible preference
shares 27,615 16,564 - -
As at 31 March 2013
US unlisted convertible debentures 902 594 0.3 -
US unlisted loan notes 1,144 753 0.1 0.2
US unlisted convertible preference
shares 30,374 20,003 - -
The maturity profile of assets held in the portfolio at 31 March was as
follows:
2014 2013
£'000 £'000
Within one year 100 393
Within one to two years - 201
Within two to three years - -
Within three to four years - -
Within four to five years - 753
More than five years - -
100 1,347
Investments with no maturity dates 37,635 52,057
Net funds at end of year 37,735 53,404
The remaining current assets of the Company of £2,954,000 (2013: £4,654,000)
have no maturity date.
The Company finances its operations through equity and retained profits. The
change in the fair value of financial liabilities during the year was not
related to the credit risk profile.
The interest rate risk profile of the Company's financial liabilities as at
31 March 2014 was as follows:
Period until
Total maturity
£'000 (years)
Financial liabilities upon which no interest is paid 222 -
The interest rate risk profile of the Company's financial liabilities as at
31 March 2013 was as follows:
Period until
Total maturity
£'000 (years)
Financial liabilities upon which no interest is paid 363 -
The maturity profile of the company's financial liabilities was as follows:
As at As at
31 March 2014 31 March 2013
£'000 £'000
In one year or less 222 363
In more than one year but no more than two
years - -
In more than two years but no more than five
years - -
222 363
Sensitivity analysis
A change in interest rates would have some impact on the fair value of warrants
and debt instruments but the quantum of the impact is not easily measured.
Other price risk
Other price risk is the risk that the value of the instrument will fluctuate as
a result of changes in market prices (other than those arising from currency
risk or interest rate risk) and represents the potential loss the Company may
suffer in the light of adverse market price movements. Since the Company
invests in financial instruments, this risk is inherent. The Company will
always face uncertainty as to the future price of the financial instruments in
which it is invested. The price of certain unquoted stocks is also affected by
their relative illiquidity (see below).
The Board of Directors manages this risk by ensuring full and timely access to
relevant information from the Investment Manager. The Directors monitor
compliance with the Company's objectives and are directly responsible for
investment strategy and asset allocation.
The investment strategy of the Company is a "bottom-up" approach, meaning the
Company invests on the merits of each investee company rather than a "top-down"
approach which endeavours to have certain percentages of assets in given
sectors.
See the Investment Manager's review above for discussion of investments made
during the year. The method of valuing the investments is discussed in the
accounting policies above.
Sensitivity analysis
A 10% increase in the market value of investments at 31 March 2014 would have
increased net assets attributable to shareholders by £3,774,000
(2013: £5,340,000). An equal change in the opposite direction would have
decreased the net assets attributable to shareholders by an equal but opposite
amount.
Liquidity risk
The investments made by the Company are in smaller US companies. Although at
the year end, 56% of the portfolio (2013: 59%) was held in listed equity
securities (see Note 7), it should be recognised that the Company is exposed to
liquidity risk as many of the portfolio holdings are relatively illiquid. The
Investment Manager could be unable to sell due to lack of trading volume. Any
forced sales are likely to generate significantly lower proceeds than the
valuations in the portfolio shown above.
Most investments, micro-capitalisation and private placements in public
equities investing involve liquidity risk. Most often the lack of liquidity is
a function of the individual holding not meeting its business objectives. If a
given company becomes successful, liquidity typically increases, when
individual holdings fail, valuation and liquidity can decline to zero.
Financial liabilities
The Company finances its operations primarily through equity and retained
profits, although trade creditors and accruals arise from its operations. At
31 March 2014, all financial liabilities are due within one year and are stated at
fair value.
Fair value hierarchy disclosures
The Company has adopted the amendment to FRS 29, effective 1 January 2009. This
requires the Company to classify fair value measurements using a fair value
hierarchy that reflects the significance of the inputs used in making the
measurements. The fair value hierarchy consists of the following three levels:
● Level 1 - Quoted prices (unadjusted) in active markets for identical assets
or liabilities.
An active market is a market in which transactions for the asset or liability
occur with sufficient frequency and volume on an ongoing basis such that quoted
prices reflect prices at which an orderly transaction would take place between
market participants at the measurement date. Quoted prices provided by external
pricing services, brokers and vendors are included in Level 1, if they reflect
actual and regularly occurring market transactions on an arm's length basis.
● Level 2 - Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e., as prices) or
indirectly (i.e., derived from prices).
Level 2 inputs include the following:
● quoted prices for similar (i.e., not identical) assets in active markets.
● quoted prices for identical or similar assets or liabilities in markets
that are not active. Characteristics of an inactive market include a
significant decline in the volume and level of trading activity, the
available prices vary significantly over time or among market participants
or the prices are not current.
● inputs other than quoted prices that are observable for the asset (for
example, interest rates and yield curves observable at commonly quoted
intervals).
● inputs that are derived principally from, or corroborated by, observable
market data by correlation or other means (market-corroborated inputs).
● Level 3 - Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement in its entirety. For
this purpose, the significance of an input is assessed against the fair value
measurement in its entirety. If a fair value measurement uses observable inputs
that require significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of a
particular input to the fair value measurement in its entirety requires
judgement, considering factors specific to the asset or liability.
The determination of what constitutes `observable' requires significant
judgement by the Company. The Company considers observable data to be the price
of investments actively traded in organised financial markets, fair value is
generally determined by reference to Stock Exchange quoted market bid prices at
the close of business on the balance sheet date, without adjustment for
transaction costs necessary to realise the asset.
The table below sets out fair value measurements of financial assets in
accordance with the FRS 29 fair value hierarchy system:
Financial assets at fair value
through profit or loss at Total Level 1 Level 2 Level 3
31 March 2014 £'000 £'000 £'000 £'000
Equity investments 21,071 21,071 - -
Convertible debenture shares 100 - - 100
Loan notes - - - -
Convertible preference shares 16,564 1 - 16,563
Warrants - - - -
Total 37,735 21,072 - 16,663
Financial assets at fair value
through profit or loss at Total Level 1 Level 2 Level 3
31 March 2013 £'000 £'000 £'000 £'000
Equity investments 31,300 29,963 - 1,337
Convertible debenture shares 594 - - 594
Loan notes 753 - - 753
Convertible preference shares 20,003 2 - 20,001
Warrants 754 - 1 753
Total 53,404 29,965 1 23,438
There are no other financial assets or liabilities other than those disclosed
above. Trade receivables consist purely of accrued income and prepayments and
trade payables consist purely of accruals and are not restated at fair value.
Cash is also not restated at fair value.
Investments whose values are based on quoted market prices in active markets,
and therefore classified within Level 1, include active listed equities. The
Company does not adjust the quoted price for these instruments.
Financial instruments that trade in markets that are not considered to be
active but are valued based on quoted market prices, dealer quotations or
alternative pricing sources supported by observable inputs are classified
within Level 2. As Level 2 investments include positions that are not traded in
active markets and/or are subject to transfer restrictions, valuations may be
adjusted to reflect illiquidity and/or non-transferability, which are generally
based on available market information.
Investments classified within Level 3 have significant unobservable inputs.
Level 3 instruments include private equity and corporate debt securities. As
observable prices are not available for these securities, the Company has used
valuation techniques to derive the fair value. In respect of unquoted
instruments, or where the market for a financial instrument is not active, fair
value is established by using recognised valuation methodologies, in accordance
with International Private Equity and Venture Capital ("IPEVC") Valuation
Guidelines. New investments are initially carried at cost, for a limited
period, being the price of the most recent investment in the investee. This is
in accordance with IPEVC Guidelines as the cost of recent investments will
generally provide a good indication of fair value. Fair value is the amount for
which an asset could be exchanged between knowledgeable, willing parties in an
arm's length transaction.
There were no transfers from Level 3 to 1 (2013: £nil) for the year ended
31 March 2014.
The following table presents the movement in Level 3 instruments for the years
ended 31 March 2014 and 31 March 2013:
At 31 March 2014
Company Convertible Convertible
Equity debenture Loan preference
Total investments shares notes shares Warrants
£'000 £'000 £'000 £'000 £'000 £'000
Opening balance 23,438 1,337 594 753 20,001 753
Purchases 1,371 - - 1,371 - -
Sales - proceeds (1,339) (626) (710) - - (3)
Total (losses)/
gains for the
year included in
the Income
Statement (6,807) (711) 216 (2,124) (3,438) (750)
Closing balance 16,663 - 100 - 16,563 -
At 31 March 2013
Company Convertible Convertible
Equity debenture Loan preference
Total investments shares notes shares Warrants
£'000 £'000 £'000 £'000 £'000 £'000
Opening balance 25,728 1,698 571 - 23,454 5
Purchases 1,352 318 - 1,034 - -
Sales - proceeds (3,336) - - - (3,336) -
Total (losses)/
gains for the
year included in
the Income
Statement (306) (679) 23 (281) (117) 748
Closing balance 23,438 1,337 594 753 20,001 753
The Directors are required under FRS 29 to provide further information on
holdings categorised as Level 3 in the table above to illustrate a range of
values for these positions which might be obtainable in certain circumstances.
The holdings categorised by the Directors as Level 3 are as follows:
AnchorFree
PetroHunter Energy
The Directors show the holdings at what they believe to be fair value of
£16.7 million. There is clearly considerable uncertainty as to whether this valuation
could be realised in all market circumstances. Values realised on sale could be
lower or higher than fair value. The most significant inputs used to derive the
various valuations are the operational forecasts and the discount rate applied
to future cash flows.
17 RELATED PARTY TRANSACTIONS
Mr Russell Cleveland, President and CEO of RENN Capital, is considered a
related party due to his directorship of AnchorFree, Cover-All Technologies and
iSatori. Details of the Company's holdings in these investments are disclosed
in the Investment Portfolio and in the Strategic Report above. At the year end,
there were no amounts due from these investee companies.
Of these directorships, in 2014, Mr Cleveland received fees from Cover-All
Technologies amounting to $22,000 and stock awards of $29,000 (2013: fees
$22,000 and stock awards $29,000). Mr Cleveland holds 73,353 warrants to
purchase shares in AnchorFree and 195,545 shares, representing 0.73% of the
company, in Cover-All Technologies.
Mr Eric Stephens, Vice President of RENN Capital, was considered a related
party due to his directorship of Plures Technologies from which he received
stock awards of $9,000 (2013: fees $500 and stock awards $56,343). Mr Stephens
ceased to be a director of Plures Technologies with effect from 4 April 2014.
Mr Cleveland is interested in 210,003 Ordinary shares of the Company,
representing 1.61% of the total voting rights, as follows: Russell Cleveland -
3,753 shares, RENN Capital - 75,000 shares and Cleveland Family Limited
Partnership - 131,250 shares.
RENN Capital pays RP&C International an amount equal to 0.5% of the net asset
value of the Company each year and 5% of any performance fee received from the
Company. The fees are compensation for management and advisory services
rendered to RENN Capital.
18 POST BALANCE SHEET EVENTS
As detailed in the Chairman's Statement above, Mr Barker succeeded Mr Fenton as
Chairman of the Company on 10 June 2014.
ANNUAL GENERAL MEETING
The Company's Annual General Meeting will be held at the offices of the
Association of Investment Companies, 9th Floor, 24 Chiswell Street, London
EC1Y 4YY at 12.00 noon on Wednesday, 30 July 2014.
The notice of this meeting can be found in the full Annual Report and Financial
Statements at www.renaissanceusgrowth.co.uk.
NATIONAL STORAGE MECHANISM
A copy of the Annual Report and Financial Statements will be submitted shortly
to the National Storage Mechanism ("NSM") and will be available for inspection
at the NSM, which is situated at www.morningstar.co.uk/uk/NSM.
ENDS
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) are
incorporated into, or form part of, this announcement.