?Risk Factors

?The Board carries out a regular review of the risk environment in which the Company operates. The emerging and principal risks and uncertainties identified by the Board and techniques used to mitigate these risks are set out in this section.

The Board seeks to mitigate its emerging and principal risks by setting policy, regularly reviewing performance and monitoring progress and compliance. In the mitigation and management of these risks, the Board rigorously applies the principles detailed in section 8: "Audit, Risk and Internal Control" of the AIC Code. Details of the Company's internal controls are contained in the Corporate Governance Internal Control section on pages 47 and 48 of the annual report and further information on exposure to risks, including those associated with financial instruments, can be found in note 17a of the financial statements.

The Board carries out a regular review of the risk environment in which the Company operates, together with changes to the operational environment and idiosyncratic risks. The Board also identifies emerging risk which impact on the Company. In the period the most notable emerging risks have been:

? Global trade: on-going global trade tensions between major economies have the potential to disrupt global supply chains which could cause a slowdown in economic activity.

? Geopolitical instability: geopolitical tensions, such as the conflicts in the Middle East and Eastern Europe can create uncertainty, disrupt global markets and create market volatility.

? Rising interest rates: whilst interest rates appear to be stabilising, higher interest rates can increase borrowing costs for businesses and consumers, potentially leading to reduced spending and investment, and ultimately economic growth.

The principal risks the Company faces are considered in more detail below.

VCT Qualifying Status:

Risk - A failure to continue to meet the VCT qualifying criteria could result in the loss of approved VCT status. The loss of such approval could lead to investors losing the various tax benefits associated with VCT investments.

Mitigation - The Manager tracks the Company's VCT qualifying status on an ongoing and continual basis. Furthermore, external independent experts have been retained and report on the VCT qualifying status regularly throughout the year.

The Manager reports to the Board on a quarterly basis.

Further information on these requirements can be found under the heading "Compliance with VCT Legislative Tests" above.

Change - No overall change in risk exposure.

Economic:

Risk - Macroeconomic events such as geopolitical developments, external shocks and economic recession could adversely affect smaller companies' valuations, as they may be more vulnerable to changes in trading conditions or the sectors in which they operate. This could lead to a reduction in the Company's share price, resulting in capital losses for Shareholders.

Mitigation - The Board, in conjunction with the Manager, regularly assesses the resilience of the portfolio. The Company has a clear Investment Policy (summarised above) and invests in a diverse portfolio of companies across a range of sectors, which helps to mitigate against the impact on any one sector. The Manager also maintains adequate liquidity to make sure it can provide follow-on investment to those portfolio companies which require it and which is supported by the individual investment case.

Change - Up. Continued uncertainty in an environment that currently includes high inflation, high interest rates and other economic factors.

Investment Performance:

Risk - The Company invests in small and medium-sized VCT qualifying companies, which, by their nature, entail a higher level of risk and shorter cash runway than investments in larger quoted companies. Poor performance could reduce returns for shareholders through downward valuations.

Mitigation - The Board places reliance on the Manager's significant experience, expertise and strong track record of investing in early-stage unquoted companies. The Manager has a rigorous and robust formal process in selecting new companies which includes appropriate due diligence and approval by an Investment Committee made up of the senior members of the Manager's investment team.

Change - No overall change in risk exposure.

Strategy:

Risk - The Board fails to set appropriate strategic objectives and fails to monitor the Company's implementation of the strategy, which leads to poor performance.

Poor performance leads to a lack of investor demand for the Company's shares resulting in difficulty raising new capital and lack of cash available to fund corporate activity.

Mitigation - The Board reviews strategy annually. At each of the Board meetings, the directors review the appropriateness of the Company's objectives and stated strategy in response to changes in the operating environment and peer group activity. It also reviews compliance of the Manager with the stated investment strategy.

Change - Up. Small increase due to the difficult macro environment and more challenging trading conditions for some portfolio companies.

Legislative & Regulatory:

Risk - The Company fails to comply with applicable laws and regulations including VCT Rules, UK Listing Authority Rules, AIC Code on Corporate Governance, Stewardship Code, Companies Act, Bribery Act, Market Abuse Regulations, data protection rules, Criminal Finances Act and relevant Taxes Acts and as a result loses its approval as a VCT.

Changes to the UK legislation, in particular relating to the VCT Rules, could have an adverse effect on the Company's ability to achieve satisfactory investment returns.

Mitigation - The Manager ensures that it has suitably qualified members of staff who are experienced with regulatory requirements and relevant accounting standards. The Manager and the Company Secretary have procedures in place to ensure recurring Listing Rules requirements are met.

The Board and Manager review corporate governance, regulatory legislative change and political developments on a continual basis and seek additional advice as and when required.

The Manager is a member of the Venture Capital Trust Association which engages with the Government to help shape future legislation.

Change - Down. A reduction in this risk, as result of the ten year extension of the VCT legislation sunset clause to 6 April 2035, continuing shareholders' rights to income tax relief on newly issued shares.

Operational:

Risk - Key service providers, such as the Manager, have inadequate procedures for the identification, evaluation and management of risks, cyber security and data protection putting the Company's assets and data at risk.

Mitigation - The Board regularly reviews the system of internal controls, both financial and non-financial operated by the Company and the Manager. These include controls designed to ensure that the Company's assets are safeguarded and proper accounting records are maintained.

Change - No overall change in risk exposure.

Cyber Security and Information Technology:

Risk - A failure in IT systems and controls might lead to business interruption, loss of data, the inability of the Manager to provide accurate reporting and monitoring or the loss of Company records.

Mitigation - The Manager has in place significant cybersecurity controls, including multifactor authentication, email protection software, monitored firewalls and regularly updated electronic devices. Staff at the Manager regularly receive training in relation to their cybersecurity obligations. The Manager is Cyber Essentials Plus certified.

Due diligence is conducted on other service providers, including a review on their controls for information security.

Change - No overall change on balance, although cyber threat remains a significant risk area faced by all service providers, with ever increasing sophistication of attacks.

Liquidity:

Risk -

a. The Company may not have sufficient liquidity available to meet its financial obligations.

b. The VCT invests in smaller unquoted companies, which by their nature are illiquid, therefore they may be difficult to realise, at fair market value, at short notice

Mitigation - The Company's overall liquidity risks and cashflow forecasts are monitored on an ongoing basis by the Manager and on a quarterly basis by the Board.

The Company's valuation methodology takes account of potential liquidity restrictions in the markets in which it invests.

For any publicly listed investments, accounting standards require an ongoing assessment of the liquidity of the stock.

The Manager regularly reviews its exit plans for investee companies to allow it to identify the optimal point at which to seek a sale. As part of a planned exit, the assistance of a third party adviser will normally be sought, with a view to identifying the largest number of possible purchasers.

Change - Up. A small increase to reflect the potential impacts of economic uncertainty, including the impacts on fundraising and ability to exit investments.

?Other Matters

?Section 172 Statement

This Section 172 Statement should be read in conjunction with the other contents of the Strategic Report, on pages 6 to 36 of the annual report.

Section 172 of the Companies Act 2006 requires that a director must act in the way that they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

? The likely consequences of any decision in the long term;

? The interests of the company's employees;

? The need to foster the company's business relationships with suppliers, customers and others;

? The impact of the company's operations on the community and the environment;

? The desirability of the company maintaining a reputation for high standards of business conduct; and

? The need to act fairly as between members of the company.

The Company takes a number of steps to understand the views of investors and other key stakeholders and considers these, along with the matters set out above, in Board discussions and decision making.

Key Stakeholders

As an investment company with no employees, the Company's key stakeholders are its investors, its service providers and its portfolio companies.

Investors

The Board engages and communicates with shareholders in a variety of ways.

The Company encourages shareholders to attend its Annual General Meeting.

Along with British Smaller Companies VCT plc, the Company held two Investor Workshops during the year. An in-person workshop was held on 20 June 2023 and an online webinar was hosted on 27 November 2023. Both were well attended.

Maintaining the Company's status as a VCT is critical to meeting the Company's objective to maximise Total Return and provide investors with an attractive long-term tax-free dividend yield. The Company receives regular reports on this issue from the Manager and has taken various steps in the year to ensure that the relevant tests are met.

The Board also aims for investors to continue to have tax efficient opportunities to invest in the Company, and to generate tax-free returns from both capital appreciation and ongoing dividends.

After carefully considering its funding needs, on 20 September 2023 the Company issued a prospectus, alongside British Smaller Companies VCT plc, to raise up to £90 million in aggregate for the 2023/24 tax year.

During the year the Board kept its arrangements for dividends, share buy-backs and the dividend re-investment scheme under constant review. Along with normal dividends totalling 3.0 pence per ordinary share in the year ended 31 December 2023, a special dividend of 2.25 pence per ordinary share was paid in January 2023, following the realisation of the Company's investments in Springboard and Intelligent Office in 2022.

Manager

The Company's most important service provider is its Manager. There is regular contact with the Manager, and members of the Manager's board attend all of the Company's Board meetings. There is also an annual strategy meeting with the Manager, alongside the board of British Smaller Companies VCT plc.

The Manager maintains strong relationships with relevant media publications and a wide range of distributors for the Company's shares, including wealth managers, independent financial advisers and execution-only brokers. RAM Capital acts as a promoter of the Company's shares to smaller distributors.

The Company is a member of the Association of Investment Companies which promotes the interests of investment companies, including VCTs. The Manager is a founder member of the Venture Capital Trust Association, which promotes the interests of VCTs in a variety of ways.

Portfolio Companies

The Company holds minority investments in its portfolio companies and has delegated the management of the portfolio to the Manager. The Manager provides the Board with regular updates on the performance of each portfolio company at least quarterly and the Board is made aware of all major issues.

The Manager has a dedicated Portfolio team to assist the portfolio companies with the challenges that they face as fast-growing companies. The Manager promotes ongoing sustainable growth within the businesses; this often involves improving systems and processes, as well as significant job creation.

Employees

The Company has no employees. The Board is composed of one female non-executive director and two male non-executive directors. For a review of the policies used when appointing directors to the Board of the Company, please refer to the Directors' Remuneration Report.

Environment and Community

The Company seeks to ensure that its business is conducted in a manner that is responsible to the environment. The management and administration of the Company is undertaken by the Manager, YFM Private Equity Limited, which recognises the importance of its environmental responsibilities and is a signatory of the United Nations' Principles for Responsible Investment.

More details of the work that the Manager has achieved in this area are set out above. Its Sustainable Investment Policy can be found at www.yfmep.com/who-we-are/our_impact/.

Business Conduct

The Company has a zero tolerance approach to bribery and corruption. The following is a summary of the controls in place:

? The Company conducts all its business in an honest and ethical manner. The Company is committed to acting professionally, fairly and with integrity in all its business dealings and relationships;

? The Company prohibits the offering, the giving, the solicitation or the acceptance of any bribe;

? The Company has communicated its anti-bribery & corruption policy to the Manager and its other service providers; and

? The Manager has its own Anti-Bribery & Corruption Policy and monitors portfolio companies' compliance with their legal obligations.

Peter Waller

Chair

15 March 2024

?Statement of Comprehensive Income

For the year ended 31 December 2023

	Notes	2023			2022
		Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Gains on investments held at fair value	7	-	8,043	8,043	-	4,287	4,287
Gain on disposal of investments	7	-	1,018	1,018	-	3,586	3,586
Gain arising from the investment portfolio		-	9,061	9,061	-	7,873	7,873
Income	2	2,047	-	2,047	1,075	-	1,075
Total income		2,047	9,061	11,108	1,075	7,873	8,948
Administrative expenses:
Manager's fee		(536)	(1,611)	(2,147)	(447)	(1,339)	(1,786)
Incentive fee		-	(1,601)	(1,601)	-	(635)	(635)
Other expenses		(669)	-	(669)	(274)	-	(274)
	3	(1,205)	(3,212)	(4,417)	(721)	(1,974)	(2,695)
Profit before taxation		842	5,849	6,691	354	5,899	6,253
Taxation	4	-	-	-	-	-	-
Profit for the year		842	5,849	6,691	354	5,899	6,253
Total comprehensive income for the year		842	5,849	6,691	354	5,899	6,253
Basic and diluted earnings per ordinary share	6	0.39p	2.69p	3.08p	0.20p	3.25p	3.45p

The accompanying notes on pages 65 to 89 of the annual report are an integral part of these financial statements.

The Total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with UK adopted international accounting standards. The supplementary Revenue and Capital columns are prepared under the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (issued in July 2022 - "SORP") published by the AIC.

?Balance Sheet

At 31 December 2023

	Notes	2023 £000	2022 £000
ASSETS
Non-current assets
Financial assets at fair value through profit or loss	7	97,702	82,981
Accrued income and other assets		210	948
		97,912	83,929
Current assets
Accrued income and other assets		475	287
Current asset investments		23,500	1,988
Cash at bank		15,571	26,486
		39,546	28,761
LIABILITIES
Current liabilities
Trade and other payables		(1,842)	(821)
Net current assets		37,704	27,940
Net assets		135,616	111,869
Shareholders' equity
Share capital		25,014	20,014
Share premium account		25,386	858
Capital redemption reserve		88	88
Other reserves		2	2
Merger reserve		5,525	5,525
Capital reserve		37,458	52,263
Investment holding gains and losses reserve		40,245	31,762
Revenue reserve		1,898	1,357
Total shareholders' equity		135,616	111,869
Net asset value per ordinary share	8	59.3p	61.6p

The accompanying notes on pages 65 to 89 of the annual report are an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on 15 March 2024.

Peter Waller

Chair

?Statement of Changes in Equity

For the year ended 31 December 2023

	Share capital	Share premium account	Other reserves*	Capital reserve	Investment holding gains and losses reserve	Revenue reserve	Total equity
	£000	£000	£000	£000	£000	£000	£000
Balance at 31 December 2021	15,808	24,122	5,615	12,818	28,009	1,003	87,375
Revenue return for the year	-	-	-	-	-	354	354
Expenses charged to capital	-	-	-	(1,974)	-	-	(1,974)
Investment holding gain on investments held at fair value	-	-	-	-	4,287	-	4,287
Realisation of investments in the year	-	-	-	3,586	-	-	3,586
Total comprehensive income for the year	-	-	-	1,612	4,287	354	6,253
Issue of share capital	4,023	21,274	-	-	-	-	25,297
Issue of shares - DRIS	183	902	-	-	-	-	1,085
Issue costs **	-	(1,125)	-	-	-	-	(1,125)
Share premium cancellation	-	(44,315)	-	44,315	-	-	-
Purchase of own shares	-	-	-	(1,572)	-	-	(1,572)
Dividends	-	-	-	(5,444)	-	-	(5,444)
Total transactions with owners	4,206	(23,264)	-	37,299	-	-	18,241
Realisation of prior year investment holding gains	-	-	-	534	(534)	-	-
Balance at 31 December 2022	20,014	858	5,615	52,263	31,762	1,357	111,869
Revenue return for the year	-	-	-	-	-	842	842
Expenses charged to capital	-	-	-	(3,212)	-	-	(3,212)
Investment holding gain on investments held at fair value	-	-	-	-	8,043	-	8,043
Realisation of investments in the year	-	-	-	1,018	-	-	1,018
Total comprehensive (expense) income for the year	-		-	(2,194)	8,043	842	6,691
Issue of share capital	4,636	24,077	-	-	-	-	28,713
Issue of shares - DRIS	364	1,719	-	-		-	2,083
Issue costs **	-	(1,268)	-	-	-	-	(1,268)
Purchase of own shares	-	-	-	(1,516)	-	-	(1,516)
Dividends	-	-	-	(10,655)	-	(301)	(10,956)
Total transactions with owners	5,000	24,528	-	(12,171)	-	(301)	17,056
Realisation of prior year investment holding losses	-	-	-	(440)	440	-	-
Balance at 31 December 2023	25,014	25,386	5,615	37,458	40,245	1,898	135,616

The accompanying notes on pages 65 to 89 of the annual report are an integral part of these financial statements.?

Reserves available for distribution

Under the Companies Act 2006 the capital reserve and the revenue reserve are distributable reserves. The table below shows amounts that are available for distribution.

	Capital reserve £000	Revenue reserve £000	Total £000
Distributable reserves as shown above	37,458	1,898	39,356
Income/proceeds not yet distributable	(253)	(1,315)	(1,568)
Revaluation losses	(630)	-	(630)
Cancelled share premium not yet distributable (see below)	(27,580)	-	(27,580)
Reserves available for distribution***	8,995	583	9,578

* Other reserves include the capital redemption reserve, the merger reserve and the other reserve, which are non-distributable. The other reserve was created upon the exercise of warrants, the capital redemption reserve was created for the purchase and cancellation of own shares, and the merger reserve was created on the merger with British Smaller Technologies Company VCT plc.

** Issue costs include both fundraising costs and costs incurred from the Company's DRIS.

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

The merger reserve was created to account for the difference between the nominal and fair value of shares issued as consideration for the acquisition of the assets and liabilities of British Smaller Technology Companies VCT plc. The reserve was created after meeting the criteria under section 131 of the Companies Act 1985 and the provisions of the Companies Act 2006 for merger relief. The merger reserve is a non-distributable reserve.

The capital reserve and revenue reserve are both distributable reserves. The reserves total £39,356,000, representing a decrease of £14,264,000 during the year. The directors also take into account the level of the investment holding gains and losses reserve and the future requirements of the Company when determining the level of dividend payments.

Of the potentially distributable reserves of £39,356,000 shown above, £1,568,000 relates to income/proceeds not yet distributable and £27,580,000 relates to cancelled share premium which will become distributable from the dates shown in the table below. In addition revaluation losses of £630,000 included within the investment holding gains and losses reserve are not considered to be recoverable.

Total share premium cancelled will be available for distribution from the following dates:

	£000
1 January 2025	7,387
1 January 2026	20,193
Cancelled share premium not yet distributable	27,580

?Statement of Cash Flows

For the year ended 31 December 2023

	Notes	2023 £000	2022 £000
Net cash outflow from operating activities		(1,821)	(5,911)
Cash flows generated from (used in) investing activities
Cash maturing from fixed term deposits		1,988	-
Purchase of financial assets at fair value through profit or loss	7	(10,696)	(17,978)
Proceeds from sale of financial assets at fair value through profit or loss	7	6,031	12,929
Deferred consideration	7	27	4
Net cash outflow from investing activities		(2,650)	(5,045)
Cash flows from (used in) financing activities
Issue of ordinary shares		28,713	25,297
Costs of ordinary share issues*		(1,268)	(1,125)
Purchase of own ordinary shares		(1,516)	(1,572)
Dividends paid	5	(8,873)	(4,359)
Net cash inflow from financing activities		17,056	18,241
Net increase in cash and cash equivalents		12,585	7,285
Cash and cash equivalents at the beginning of the year		26,486	19,201
Cash and cash equivalents at the end of the year		39,071	26,486

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

Cash and cash equivalents comprise:

Money market funds		23,500	-
Cash at bank		15,571	26,486
Cash and cash equivalents at the end of the year		39,071	26,486

Reconciliation of Profit before Taxation to Net Cash Outflow from Operating Activities

	2023 £000	2022 £000
Profit before taxation	6,691	6,253
Increase (decrease) in trade and other payables	1,021	(3,722)
Increase in accrued income and other assets*	(472)	(529)
Gain on disposal of investments	(1,018)	(3,586)
Gains on investments held at fair value	(8,043)	(4,287)
Capitalised income	-	(40)
Net cash outflow from operating activities	(1,821)	(5,911)

* Includes accrued income and other assets disclosed in Note 7 - Financial Assets at Fair Value through Profit or Loss - Investments.

The accompanying notes on pages 65 to 89 of the annual report are an integral part of these financial statements.

Notes to the Financial Statements

1. Principal Accounting Policies

Basis of Preparation

The accounts have been prepared on a going concern basis as set out in the Directors Report on page 38 of the annual report and in accordance with UK adopted international accounting standards.

The directors have carefully considered the issue of going concern in view of the Company's activities and associated risks. The Company has a well-diversified portfolio with businesses in a variety of sectors, many of which are well funded. Some portfolio companies may require additional funding in the near- to medium-term; the Company is well placed to provide this, where appropriate.

The Company has a significant level of liquidity, which will be further enhanced by the current fundraising. In addition, the Board has control over, and can flex as appropriate, the Company's major outgoings, which predominantly comprise investments, dividends and share buy-backs.

The directors have also assessed whether material uncertainties exist and their potential impact on the Company's ability to continue as a going concern; they have concluded that no such material uncertainties exist.

Taking all of the above into consideration, the directors are satisfied that the Company has sufficient resources to meet its obligations for at least 12 months from the date of this report and therefore believe that it is appropriate to continue to apply the going concern basis of accounting in preparing the financial statements.

The financial statements have been prepared under the historical cost basis as modified by the measurement of investments at fair value through profit or loss.

The accounts have been prepared in compliance with the recommendations set out in the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies (issued in July 2022 - the "SORP") to the extent that they do not conflict with UK adopted international accounting standards.

The financial statements are prepared in accordance with UK adopted international accounting standards (International Financial Reporting Standards ("IFRS") and International Accounting Standards ("IAS")) and interpretations in force at the reporting date. From 1 January 2023 IAS 1 has been amended introducing the concept Material Accounting Policy Information. The Company has performed a review of its existing accounting policies and updated where relevant. Other new standards coming into force during the year and future standards that come into effect after the year-end have not had a material impact on these financial statements.

The Company has carried out an assessment of accounting standards, amendments and interpretations that have been issued by the IASB and that are effective for the current reporting period. The Company has determined that the transitional effects of the standards do not have a material impact.

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

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

Financial assets designated as at fair value through profit or loss ("FVPL") at inception are those that are managed and whose performance is evaluated on a fair value basis, in accordance with the documented investment strategy of the Company. Information about these financial assets is provided internally on a fair value basis to the Company's key management. The Company's investment strategy is to invest cash resources in venture capital investments as part of the Company's long-term capital growth strategy. Consequently, all investments are classified as held at fair value through profit or loss.

All investments are measured at fair value on the whole unit of account basis with gains and losses arising from changes in fair value being included in the Statement of Comprehensive Income as gains or losses on investments held at fair value. Accrued income on loans/preference shares that is rolled to exit and is not yet past due, forms part of the investment's fair value.

Transaction costs on purchases are expensed immediately through profit or loss.

Although the Company holds more than 20 per cent of the equity of certain companies, it is considered that the investments are held as part of the investment portfolio, and their value to the Company lies in their marketable value as part of that portfolio. These investments are therefore not accounted for using equity accounting, as permitted by IAS 28 'Investments in associates' and IFRS 11 'Joint arrangements' which give exemptions from equity accounting for venture capital organisations.

Under IFRS 10 "Consolidated Financial Statements", control is presumed to exist when the Company has power over an investee (whether or not used in practice); exposure or rights; to variable returns from that investee, and ability to use that power to affect the reporting entities returns from the investees. The Company does not hold more than 50 per cent of the equity of any of the companies within the portfolio. The Company does not control any of the companies held as part of the investment portfolio. It is not considered that any of the holdings represent investments in subsidiary undertakings.

Valuation of Investments

Unquoted investments are valued in accordance with IFRS 13 "Fair Value Measurement" and using the International Private Equity and Venture Capital Valuation Guidelines (the "IPEV Guidelines"). Quoted investments are valued at market bid prices. A detailed explanation of the valuation policies of the Company is included below.

Initial Measurement

The best estimate of the initial fair value of an unquoted investment is the cost of the investment. Unless there are indications that this is inappropriate, an unquoted investment will be held at this value within the first three months of investment.

Subsequent Measurement

Based on the IPEV Guidelines we have identified six of the most widely used valuation methodologies for unquoted investments. The IPEV Guidelines advocate that the best valuation methodologies are those that draw on external, objective market-based data in order to derive a fair value.

Unquoted Investments

? Revenue multiples. An appropriate multiple, given the risk profile and revenue growth prospects of the underlying company, is applied to the revenue of the company. The multiple is adjusted to reflect any risk associated with lack of marketability and to take account of the differences between the investee company and the benchmark company or companies used to derive the multiple.

? Earnings multiple. An appropriate multiple, given the risk profile and earnings growth prospects of the underlying company, is applied to the maintainable earnings of the company. The multiple is adjusted to reflect any risk associated with lack of marketability and to take account of the differences between the investee company and the benchmark company or companies used to derive the multiple.

? Net assets. The value of the business is derived by using appropriate measures to value the assets and liabilities of the investee company.

? Discounted cash flows of the underlying business. The present value of the underlying business is derived by using reasonable assumptions and estimations of expected future cash flows and the terminal value, and discounted by applying the appropriate risk-adjusted rate that quantifies the risk inherent in the company.

? Discounted cash flows from the investment. Under this method, the discounted cash flow concept is applied to the expected cash flows from the investment itself rather than the underlying business as a whole.

? Price of recent investment. This may represent the most appropriate basis where a significant amount of new investment has been made by an independent third party. This is adjusted, if necessary, for factors relevant to the background of the specific investment such as preference rights and will be benchmarked against other valuation techniques. In line with the IPEV Guidelines the price of recent investment will usually only be used for the initial period following the round and after this an alternative basis will be found.

Due to the significant subjectivity involved, discounted cash flows are only likely to be reliable as the main basis of estimating fair value in limited situations. Their main use is to support valuations derived using other methodologies and for assessing reductions in fair value.

One of the valuation methods described above is used to derive the gross attributable enterprise value of the company after which adjustments are then made to reflect specific circumstances. This value is then apportioned appropriately to reflect the respective debt and equity instruments in the event of a sale at that level at the reporting date.

Listed Investment Funds

Listed investment funds are valued at active market bid price. An active market is defined as one where transactions take place regularly with sufficient volume and frequency to determine price on an ongoing basis. There were no listed investment funds held at 31 December 2023.

Income

Dividends and interest are received from financial assets measured at fair value through profit and loss and are recognised on the same basis in the Statement of Comprehensive Income. This includes interest and preference dividends rolled up and/or payable at redemption. Interest income is also received on cash, cash equivalents and current asset investments. Dividend income from unquoted equity shares is recognised at the time when the right to the income is established.

Expenses

Expenses are accounted for on an accruals basis. Expenses are charged through the Revenue column of the Statement of Comprehensive Income, except for the Manager's fee and incentive fees. Of the Manager's fees 75 per cent are allocated to the Capital column of the Statement of Comprehensive Income, to the extent that these relate to an enhancement in the value of the investments and in line with the Board's expectation that over the long term 75 per cent of the Company's investment returns will be in the form of capital gains. The incentive fee payable to the Manager (as set out in note 3) is charged wholly through the Capital column.

Tax relief is allocated to the Capital Reserve using a marginal basis.

Incentive Fee

The incentive fee is accounted for on an accruals basis. As further detailed in note 3, the incentive fee is calculated as 20 per cent of the amount by which the cumulative dividends per ordinary share paid as at the last business day in December in any year, plus the average of the Company's middle market price per ordinary share on the five dealing days prior to that day, exceeds the Hurdle (as defined in note 3), multiplied by the number of ordinary shares issued and the ordinary shares under option. At the end of each reporting period, an accrual is recognised based upon the cumulative dividends per ordinary share paid to the reporting date, plus the average of the Company's middle market price per ordinary share on the five dealing days prior to the reporting date. The incentive fee is charged wholly through the Capital column.

Cash, Cash Equivalents and Current Asset Investments

Cash at bank comprises cash at hand and bank deposits with an original maturity of less than three months, readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.

Current asset investments comprise money market funds and balances held in fixed term deposits which mature after three months.

Cash and cash equivalents include cash at hand, money market funds and bank deposits repayable on up to three months' notice as these meet the definition in IAS 7 'Statement of cash flows' of a short-term highly liquid investment that is readily convertible into known amounts of cash and subject to insignificant risk of change in value.

Balances held in fixed term deposits which mature after three months are not classified as cash and cash equivalents, as they do not meet the definition in IAS 7 'Statement of cash flows' of short-term highly liquid investments.

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

Cash flows classified as "operating activities" for the purposes of the Statement of Cash Flows are those arising from the Revenue column of the Statement of Comprehensive Income, together with the items in the Capital column that do not fall to be easily classified under the headings for "investing activities" given by IAS 7 'Statement of cash flows', being management and incentive fees payable to the Manager. The capital cash flows relating to the acquisition and disposal of investments are presented under "investing activities" in the Statement of Cash Flows in line with both the requirements of IAS 7 and the positioning given to these headings by general practice in the industry.

Share Capital and Reserves

Share Capital

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

Share Premium Account

This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under offers for subscription, to the extent that it has not been cancelled.

Capital Reserve

The following are included within this reserve:

? Gains and losses on realisation of investments;

? Realised losses upon permanent diminution in value of investments;

? Capital income from investments;

? 75 per cent of the Manager's fee expense, together with the related taxation effect to this reserve in accordance with the policy on expenses in note 1 of the financial statements;

? Incentive fee payable to the Manager;

? Capital dividends paid to shareholders;

? Applicable share issue costs;

? Purchase and holding of the Company's own shares; and

? Credits arising from the cancellation of any share premium account.

Investment Holding Gains and Losses Reserve

Increases and decreases in the valuation of investments held at the year end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.

Revenue Reserve

This reserve includes all revenue income from investments along with any costs associated with the running of the Company - less 75 per cent of the Manager's fee expense as detailed in the Capital Reserve above.

Taxation

Due to the Company's status as a venture capital trust and the continued intention to meet the conditions required to comply with Chapter 3 Part 6 of the Income Tax Act 2007, no provision for taxation is required in respect of any realised or unrealised appreciation of the Company's investments which arises. Deferred tax is recognised on all temporary differences that have originated, but not reversed, by the balance sheet date.

Deferred tax assets are only recognised to the extent that they are regarded as recoverable. Deferred tax is calculated at the tax rates that are expected to apply when the asset is realised. Deferred tax assets and liabilities are not discounted.

Dividends Payable

Dividends payable are recognised only when an obligation exists. Interim and special dividends are recognised when paid and final dividends are recognised when approved by shareholders in general meetings.

Segmental Reporting

In accordance with IFRS 8 'Operating Segments' and the criteria for aggregating reportable segments, segmental reporting has been determined by the directors based upon the reports reviewed by the Board. The directors are of the opinion that the Company has engaged in a single operating segment - investing in equity and debt securities within the United Kingdom - and therefore no reportable segmental analysis is provided.

Critical Accounting Estimates and Judgements

The preparation of financial statements in conformity with generally accepted accounting practice requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through profit or loss, as disclosed in note 7 to the financial statements.

The fair value of investments at fair value through profit or loss is determined by using valuation techniques. As explained above, the Board uses its judgement to select from a variety of methods and makes assumptions that are mainly based on market conditions at each balance sheet date.

The Board uses its judgement to select the appropriate method for determining the fair value of investments through profit or loss.

2. Income

	2023 £000	2022 £000
Dividends from unquoted companies	531	642
Interest on loans to unquoted companies	152	206
Income from unquoted portfolio	683	848
Income from listed investment funds	47	22
Income from investments held at fair value through profit or loss	730	870
Interest from bank deposits/money market funds	1,317	205
	2,047	1,075

3. Administrative Expenses

	2023 £000	2022 £000
Manager's fee	2,147	1,786
Administration fee	85	75
Total payable to YFM Private Equity Limited	2,232	1,861
Incentive fee	1,601	635
Other expenses:
General expenses	135	120
Directors' remuneration	112	106
Listing and registrar fees	93	68
Trail commission	75	59
Auditor's remuneration - audit fees (excluding irrecoverable VAT)	63	62
Printing	57	40
Irrecoverable VAT	49	43
	4,417	2,994
Fair value movement related to credit risk	-	(299)
	4,417	2,695
Ongoing charges figure	2.14%	2.08%

Directors' remuneration comprises only short term benefits including social security contributions of £10,000 (2022: £10,000).

The directors are the Company's only key management personnel.

No fees are payable to the auditor in respect of other services (2022: £nil).

YFM Private Equity Limited has acted as Manager and performed administrative and secretarial duties for the Company under an Investment Agreement dated 28 November 2000, superseded by an agreement dated 31 October 2005 and as varied by agreements dated 8 December 2010, 26 October 2011, 16 November 2012, 17 October 2014, 7 August 2015 and 13 November 2019 (the "IA"). The agreement may be terminated by not less than twelve months' notice given by either party at any time. Under an Investment Agreement dated 13 November 2019, YFM Private Equity Limited was appointed as the Company's Alternative Investment Fund Manager. On 19 September 2023 YFM Private Equity Limited was approved as a full-scope Alternative Investment Fund Manager, from this date Thompson Taraz Depositary Limited were appointed as the Depositary and assumed responsibility for asset safekeeping, cash flow monitoring and oversight duties.

The key features of the agreement are:

? YFM Private Equity Limited receives a Manager's fee, payable quarterly in advance, calculated at half-yearly intervals as at 30 June and 31 December. The fee is allocated between capital and revenue as described in note 1;

? The annual Manager's fee payable to the Manager is 1.0 per cent on all surplus cash, defined as all cash above £5 million. The annual fee on all other assets will be 2.0 per cent of net assets per annum. Based on the Company's net assets at 31 December 2023 of £135,616,000, and cash and cash equivalents of £39,071,000 at that date this equates to approximately £2,372,000 per annum;

? YFM Private Equity Limited shall bear the annual operating costs of the Company (including the Manager's fee set out above but excluding any payment of the performance incentive fee, details of which are set out below and excluding VAT and trail commissions) to the extent that those costs exceed 2.9 per cent of the net asset value of the Company; and

? Under the IA, YFM Private Equity Limited also provides administrative and secretarial services to the Company for a fee of £46,000 per annum plus annual adjustments to reflect movements in the Retail Prices Index. This fee is charged fully to revenue, and totalled £85,000 for the year ended 31 December 2023 (2022: £75,000).

When the Company makes investments into its unquoted portfolio, the Manager charges that investee an advisory fee. With effect from 1 October 2013, if the average of relevant fees exceeds 3.0 per cent of the total invested into new portfolio companies and 2.0 per cent into follow-on investments over the Company's financial year, this excess will be rebated to the Company. As at 31 December 2023, the Company was due a rebate from the Manager of £nil (2022: £nil).

Monitoring and directors' fees the Manager receives from the investee companies are limited to a maximum of £40,000 (excluding VAT) per annum per company.

The total remuneration payable to YFM Private Equity Limited under the IA in the year was £2,232,000 (2022: £1,861,000).

Under the IA, YFM Private Equity Limited is entitled to receive fees from investee companies in respect of the provision of non-executive directors and other advisory services. YFM Private Equity Limited is responsible for paying the due diligence and other costs incurred in connection with proposed investments which for whatever reason do not proceed to completion. In the year ended 31 December 2023, the fees receivable by YFM Private Equity Limited from investee companies which were attributable to advisory and directors' and monitoring fees amounted to £1,869,000 (2022: £2,026,000).

Under the Subscription Rights Agreement dated 23 November 2001 between the Company, YFM Private Equity Limited and Chord Capital Limited ("Chord" formerly Generics Asset Management Limited), as amended by an agreement between those parties dated 31 October 2005, YFM Private Equity Limited and Chord have a performance-related incentive, structured so as to entitle them to an amount equivalent to 20 per cent of the amount by which the cumulative dividends per ordinary share paid as at the last business day in December in any year, plus the average of the middle market price per ordinary share on the five dealing days prior to that day (the "Share Price"), exceeds 120 pence per ordinary share, multiplied by the number of ordinary shares issued and the ordinary shares under option (if any) (the "Hurdle"). Under the terms of the Subscription Rights Agreement, once the Hurdle has been exceeded it is reset at that value going forward, which becomes the new Hurdle. Any subsequent exercise of these rights will only occur once the new Hurdle has been exceeded. The subscription rights are exercisable in the ratio 95:5 between the Manager and Chord Capital Limited.

By a Deed of Assignment dated 19 December 2003 (together with a supplemental agreement dated 5 October 2005), the benefit of the YFM Private Equity Limited subscription right was assigned to YFM Private Equity Limited Carried Interest Trust (the "Trust"), an employee benefit trust formed for the benefit of certain employees of YFM Private Equity Limited and associated companies. Pursuant to a deed of variation dated 16 November 2012 between the Company, the trustees of the Trust and Chord, the Subscription Rights Agreement was varied so that the subscription rights will be exercisable in the ratio of 95:5 between the trustees of the Trust and Chord. Pursuant to a deed of variation dated 5 August 2014 the Subscription Rights Agreement was varied so that the recipient was changed from the Trust to YFM Private Equity Limited. Pursuant to a deed of variation dated 13 November 2019 the Subscription Rights Agreement was varied so that the recipients can elect to receive the incentive in the form of shares or cash.

As at 31 December 2022, the total of cumulative cash dividends paid and the Share Price was 137.25 pence per ordinary share. Consequently the Hurdle was exceeded and a performance related incentive of £635,000 for the year ended 31 December 2022 was paid. The Hurdle for the year ending 31 December 2023 was reset at 137.25 pence per ordinary share.

As at 31 December 2023 the total of cumulative cash dividends paid and the Share Price was 140.75 pence per ordinary share. Consequently the Hurdle was exceeded and a performance related incentive of £1,601,000 for the year ended 31 December 2023 is payable.

The Company, the Manager and Chord have agreed to amend the current agreement with effect from 1 January 2024. The Hurdle for each financial year will be increased by an agreed percentage of the corresponding Share Price for each of the five years starting from the year ending 31 December 2024, commencing with 1 per cent for the year ending 31 December 2024 and increasing by an additional 1 per centage point per year until the year ending 31 December 2028 when the increase to the Hurdle will be 5 per cent of the corresponding Share Price. Following the changes, the Hurdle for the year ending 31 December 2024 was reset at 141.295 pence per ordinary share. In addition, from 1 January 2027 the subscription rights will be wholly exercisable to the Manager.

If the IA is terminated, the beneficiaries of the Incentive Agreement will continue to be entitled to the Incentive Payment. The Incentive Payment will be modified so as to entitle the recipients to an Incentive Payment that is fair, having regard to all the circumstances.

Under the terms of the offer launched with British Smaller Companies VCT plc on 30 November 2022, YFM Private Equity Limited was entitled to 3.0 per cent of gross subscriptions, (3.5 per cent for Applications received from Applicants who did not invest their money through a financial intermediary advisor and invested directly into the Company) less commissions payable to an execution-only broker or platform. The net amount paid to YFM Private Equity Limited under this offer amounted to £859,000.

Under the terms of the offer launched with British Smaller Companies VCT plc on 20 September 2023, YFM Private Equity Limited will be entitled to 3.0 per cent of gross subscriptions, (3.5 per cent for Applications received from Applicants who did not invest their money through a financial intermediary advisor and invested directly into the Company) less commissions payable to an execution-only broker or platform.

The details of directors' remuneration are set out in the Directors' Remuneration Report on page 50 of the annual report under the heading "Directors' Remuneration for the year ended 31 December 2023 (audited)".

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4. Taxation

	2023			2022
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Profit before taxation	842	5,849	6,691	354	5,899	6,253
Profit before taxation multiplied by standard rate of corporation tax in UK of 19% (2022: 19%)	160	1,111	1,271	67	1,121	1,188
Effect of:
UK dividends received	(101)	-	(101)	(172)	-	(172)
Non-taxable profits on investments	-	(1,721)	(1,721)	-	(1,496)	(1,496)
Deferred tax not recognised	(59)	610	551	105	375	480
Tax charge	-	-	-	-	-	-

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

Deferred tax assets of £4,420,000 (2022: £3,703,000) calculated at 25% (2022: 25%) in respect of unrelieved management expenses (£17.68 million as at 31 December 2023 and £14.81 million as at 31 December 2022) have not been recognised as the directors do not currently believe that it is probable that sufficient taxable profits will be available against which assets can be recovered.

Due to the Company's status as a venture capital trust and the continued intention to meet with the conditions required to comply with Section 274 of the Income Tax Act 2007, the Company has not provided for deferred tax on any capital gains or losses arising on the revaluation or realisation of investments.

5. Dividends

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

	2023			2022
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Interim dividend for the year ended 31 December 2023 of 2.25p (2022: 1.5p) per ordinary share	-	4,097	4,097	-	2,718	2,718
Second interim dividend for the year ended 31 December 2023 of 1.5p (2022: 1.5p) per ordinary share	301	3,130	3,431	-	2,726	2,726
Third interim dividend for the year ended 31 December 2023 of 1.5p per ordinary share	-	3,428	3,428	-	-	-
	301	10,655	10,956	-	5,444	5,444
Proceeds from shares allotted under DRIS			(2,083)			(1,085)
Dividends paid in Statement of Cash Flows			8,873			4,359

The first interim dividend of 2.25 pence per ordinary share was paid on 11 January 2023 to shareholders on the register as at 18 November 2022.

The second interim dividend of 1.5 pence per ordinary share was paid on 26 June 2023 to shareholders on the register as at 12 May 2023.

The third interim dividend of 1.5 pence per ordinary share was paid on 3 November 2023 to shareholders on the register as at 6 October 2023.

An interim dividend of 1.5 pence per ordinary share, in respect of the year ending 31 December 2024, will be paid on 28 June 2024 to shareholders on the register on 31 May 2024. This dividend was not recognised in the year ended 31 December 2023 as the obligation did not exist at the balance sheet date.

6. Basic and Diluted Earnings per Ordinary Share

The basic and diluted earnings per ordinary share is based on the profit after tax attributable to shareholders of £6,691,000 (2022: £6,253,000) and 217,157,606 (2022: 181,163,554) ordinary shares being the weighted average number of ordinary shares in issue during the year.

The basic and diluted revenue earnings per ordinary share is based on the revenue profit for the year attributable to shareholders of £842,000 (2022: £354,000) and 217,157,606 (2022: 181,163,554) ordinary shares being the weighted average number of ordinary shares in issue during the year.

The basic and diluted capital earnings per ordinary share is based on the capital profit for the year attributable to shareholders of £5,849,000 (2022: £5,899,000) and 217,157,606 (2022: 181,163,554) ordinary shares being the weighted average number of ordinary shares in issue during the year.

During the year the Company allotted 3,649,583 new ordinary shares in respect of its DRIS and 46,357,328 new ordinary shares from the fundraising.

The Company has also repurchased 2,716,956 of its own shares in the year, and these shares are held in the capital reserve. The total of 21,383,768 treasury shares has been excluded in calculating the weighted average number of ordinary shares for the period. The Company has no securities that would have a dilutive effect and hence basic and diluted earnings per ordinary share are the same.

The Company has no potentially dilutive shares and consequently, basic and diluted earnings per ordinary share are equivalent in both the year ended 31 December 2023 and 31 December 2022.

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

	2023 £000	2022 £000
Investment portfolio	96,427	82,981
Accrued income and other assets	1,275	-
Financial assets at fair value through profit and loss	97,702	82,981

IFRS 13, in respect of financial instruments that are measured in the balance sheet at fair value, requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

Level 1: quoted prices in active markets for identical assets or liabilities. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1 and comprise fixed income securities classified as held at fair value through profit or loss. The Company held no such investments at 31 December 2023.

Level 2: the fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The Company held no such instruments in the current or prior year.

Level 3: the fair value of financial instruments that are not traded in an active market (for example, investments in unquoted companies) is determined by using valuation techniques such as revenue and earnings multiples. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. All of the Company's investments fall into this category at 31 December 2023.

Each investment is reviewed at least quarterly to ensure that it has not ceased to meet the criteria of the level in which it is included at the beginning of each accounting period. The change in fair value for the current and previous year is recognised through profit or loss.

There have been no transfers between these classifications in either period.

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

Valuation of Investments

Full details of the methods used by the Company are set out in note 1 of these financial statements. Where investments are held in listed investment funds, fair value is set at the market bid price.

Movements in investments at fair value through profit or loss during the year to 31 December 2023 are summarised as follows:

IFRS 13 measurement classification	Level 3 Unquoted Investments	Level 1 Listed Investment Funds	Total Investments
	£000	£000	£000
Opening cost	49,494	1,752	51,246
Opening investment holding gain (loss)*	31,891	(156)	31,735
Opening fair value at 1 January 2023	81,385	1,596	82,981
Additions at cost	10,031	665	10,696
Disposal proceeds	(4,125)	(2,159)	(6,284)
Net profit on disposal**	1,093	(102)	991
Change in fair value	9,258	-	9,258
Foreign exchange loss	(1,215)	-	(1,215)
Closing fair value at 31 December 2023	96,427	-	96,427
Closing cost	56,209	-	56,209
Closing investment holding gain*	40,218	-	40,218
Closing fair value at 31 December 2023	96,427	-	96,427

* Following the merger between the Company and British Smaller Technologies Company VCT plc a total of £975,000 of negative goodwill was recognised in the investment holding gains and losses reserve in respect of the investments acquired. The relevant amount per investment is realised at the point of disposal to the capital reserve. At 31 December 2023 a total of £27,000 (2022: £27,000) was held on investments yet to be realised in the investment holdings gains and losses reserve.

** The net profit on disposal in the table above is £991,000 whereas that shown in the Statement of Comprehensive Income is £1,018,000. The difference comprises deferred proceeds in respect of assets which have been disposed of in prior periods and were not included in the portfolio at 1 January 2023.

The following disposals took place in the year:

	Net proceeds from sale	Cost	Opening carrying value as at 1 January 2023	Profit (loss) on disposal
	£000	£000	£000	£000
Unquoted investments:
E2E Engineering Limited	1,305	600	800	505
Ncam Technologies Limited	1,118	1,675	1,175	(57)
Macro Art Holdings Limited	990	320	409	581
Wakefield Acoustics (via Malvar Engineering Limited)	712	720	648	64
Total from portfolio	4,125	3,315	3,032	1,093
Tissuemed Limited	27	-	-	27
Deferred Consideration	27	-	-	27
Listed investment funds*	2,159	2,418	2,261	(102)
Total from investment portfolio**	6,311	5,733	5,293	1,018

* Opening carrying value includes further investments made during the year.

** The total from disposals in the year in the table above is £6,311,000 whereas that shown in total in the Statement of Cash Flows is £6,058,000. The difference comprises deferred proceeds of £253,000 which will be received in subsequent years.

8. Basic and Diluted Net Asset Value per Ordinary Share

The basic and diluted net asset value per ordinary share is calculated on attributable assets of £135,616,000 (2022: £111,869,000) and 228,758,665 (2022: 181,468,710) ordinary shares in issue at the year end.

The treasury shares have been excluded in calculating the number of ordinary shares in issue at 31 December 2023.

The Company has no potentially dilutive shares and consequently, basic and diluted net asset values per ordinary share are equivalent in both the years ended 31 December 2023 and 31 December 2022.

?

9. Total Return per Ordinary Share

The Total Return per ordinary share is calculated on cumulative dividends paid of 86.25 pence per ordinary share (2022: 81.0 pence per ordinary share) plus the net asset value as calculated per note 8.

10. Financial Commitments

There are no financial commitments at 31 December 2023 or 31 December 2022.

11. Events after the Balance Sheet Date

Having previously assessed its expected cash requirements, the Company announced a new share offer on 20 September 2023, alongside British Smaller Companies VCT plc, with the intention of raising up to £90 million, in aggregate which included an over-allotment facility of £25 million, in aggregate. The offers closed to new Applications on 16 February 2024. Gross Applications of £90 million have been received, of which £34.5 million relate to the Company. The first allotment of £30 million (£11.4 million relating to the Company) took place on 30 January 2024. The second and final allotment will take place in early April 2024.

Subsequent to the year end, the Company has invested £1.2 million into three follow on investments. The Company also received £6.5 million from the realisation of Displayplan, and the partial realisations of KeTech and Arcus, as detailed above.

On 30 January 2024, the Company issued 19,533,372 shares in relation to the 2023/24 fundraising, raising gross proceeds of £11.4 million. Following this allotment, the Company's issued share capital consists of 248,292,037 ordinary shares with voting rights and 21,383,768 shares held in treasury.

12. Contingent liability

As set out in note 3, the Manager and Chord Capital are entitled to a performance-related incentive fee if the cumulative dividends per ordinary share paid as at the last business day of December in any year plus the average of the middle market price per ordinary share on the five dealing days prior to that day, exceeds a Hurdle, which is set at 141.295 pence per ordinary share for the year ending 31 December 2024. The value of the incentive fee is 20 per cent of the excess to the Hurdle, multiplied by the number of ordinary shares issued. The reported net assets per ordinary share have increased by 2.4 pence per ordinary share since 31 December 2023. If this increase were to flow through to an increase in the middle market price per ordinary share in the last five dealing days of December 2024, at a discount of 5 per cent to the net asset value per ordinary share, then an incentive fee of approximately £641,000 would be payable at 31 December 2024 based on the number of shares in issue at 15 March 2024.

13. Related Party Transactions

Fees payable during the year to the directors and their interests in the shares of the Company are disclosed within the Directors' Remuneration Report on page 50 of the annual report. There were no amounts outstanding and due to the directors at 31 December 2023 (2022: £nil).

14. Annual Report and Accounts

Copies of the statutory accounts for the year ended 31 December 2023 will shortly be submitted to the National Storage Mechanism and will be available to the public for viewing online at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. They can also shortly be viewed on the Company's website at www.bscfunds.com. Hard copies of the statutory accounts for the year to 31 December 2023 will be distributed by post or electronically to shareholders and will thereafter be available to members of the public from the Company's registered office.

15. Directors

The directors of the Company are Mr P C Waller, Ms B L Anderson and Mr R S McDowell.

16. Annual General Meeting

The Annual General Meeting of the Company will be held at 9:30 am on 13 June 2024 at Thomas House, 84 Ecclestone Square, London SW1V 1PX. Full details of the agenda for this meeting are included in the Notice of the Annual General Meeting on page 90 of the annual report.

17. Interim Dividend for the Year Ending 31 December 2024

The directors are pleased to announce the payment of an interim dividend for the year ending 31 December 2024 of 1.5 pence per ordinary share ("Interim Dividend").

The Interim Dividend will be paid on 28 June 2024 to those shareholders on the Company's register at the close of business on 31 May 2024. The ex-dividend date will be 30 May 2024.

The directors are not proposing a final dividend for the year ended 31 December 2023.

18. Dividend Re-investment Scheme

The Company operates a dividend re-investment scheme ("DRIS"). The latest date for receipt of new or updated DRIS elections in respect of the Interim Dividend is the close of business on 14 June 2024.

19. Inside Information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

For further information, please contact:

David Hall YFM Private Equity Limited Tel: 0113 244 1000

Alex Collins Panmure Gordon (UK) Limited Tel: 0207 886 2767