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Annual report and financial statements 2022

Octopus Future Generations VCT plc

Annual report and financial statements 2022

Octopus Future Generations VCT plc (‘Future Generations VCT’ or the ‘Company’) is backing businesses that aim to address society’s biggest challenges, providing an opportunity for investors to share in the growth of ambitious, purpose-driven companies.

The Company today announces the final results for the period from inception to 30 June 2022 as below.

Chair’s statement

I am pleased to present the first annual report and accounts for Future Generations VCT for the period from inception to 30 June 2022.

Future Generations VCT‘s three investment themes have great potential: 

  • large markets to address by tackling some of society’s biggest challenges;
  • demand for solutions to the planet’s challenges is growing and becoming more urgent; and
  • ability to attract talent as people increasingly want to work for businesses that make a positive difference in the world.

I would firstly like to welcome shareholders to Future Generations VCT, which aims to invest in companies that will tackle some of society’s biggest challenges. The NAV per share at 30 June 2022 was 96.1p, and in the period, Future Generations VCT made two investments. A further four completed since the period end. More information on two of these businesses can be found in the Portfolio Manager‘s Review.

In the period to 30 June 2022, we utilised £1.8 million of our cash resources, including £1.7 million in new investments. The cash balance of £29.8 million at 30 June 2022 represents 95% of net assets at that date. We look forward to deploying significant further capital into new investment opportunities over the coming months, and we ultimately intend the profile of Future Generations VCT to comprise 80% to 90% in VCT qualifying investments and 10% to 20% in permitted non-VCT qualifying investments or cash.

On 31 January 2022, we launched the initial offer to raise up to £20 million with an over-allotment facility of up to £80 million, and I am pleased to report that as of 30 June 2022, we have successfully raised £32 million. The offer will close for new applications on 31 October 2022.

As investors will be aware, the intention is to invest in businesses which meet one of three key themes, which we believe demonstrate excellent investment prospects as well as having the potential to transform the world we live in for the better.

The first Annual General Meeting (‘AGM’) will take place on Monday 12 December 2022 from 12.00pm and will be held at the offices of Octopus Investments Limited (‘Octopus Investments’), at 33 Holborn, London EC1N 2HT. Full details of the business to be conducted at the AGM will be given in the Notice of Annual General Meeting.

Shareholders’ views are important, and the Board encourages shareholders to vote on the resolutions within the Notice of Annual General meeting published as part of the Annual Report 2022 using the proxy form, or electronically at The Board has carefully considered the business to be approved at the AGM and recommends shareholders to vote in favour of all the resolutions being proposed, as the Board will be doing.

We always welcome questions from our shareholders for either the Board or Octopus Investments (‘Portfolio Manager’), so I am pleased we will be joined by Simon King from the investment team on the day. Alternatively, shareholders are invited to send any questions they may have via email to

Future Generations VCT financial summary

Net assets (£’000) 31,292
Loss after tax (£’000) (313)
Net asset value (‘NAV’) per share (p) 96.1


Future Generations VCT is at a very early stage and, although only a handful of investments have been made so far, the upcoming pipeline of portfolio companies is extremely exciting. It spans a wide range of issues that, if successful, could make a meaningful difference to the world that we live in, and could create profitable investment opportunities for Future Generations VCT.

Launching a new fund in 2022 does not come without its complexities and challenges. With central banks increasing interest rates, high inflation, the conflict in Ukraine and the cost-of-living crisis, we are entering a very different economic backdrop to that which has been experienced in recent years, even when considering issues created by the pandemic. All markets, including early-stage ventures, have been affected by these changes and we expect this to continue in the near to medium term. However, history has shown that great businesses can be founded during some of the most challenging periods as often there is more willing adoption of new technology and solutions. The investment team at Octopus – which sources the investment opportunities, completes the investments and coordinates the portfolio management – is aware that portfolio companies will need more support to navigate these challenging times and allow them to take advantage of all opportunities available to them. The team is well resourced and is very experienced in early-stage investing.

Future Generations VCT was launched with the intention of investing in companies with the power to transform the world for the better. By focusing on our three investment themes, we believe the businesses we are backing should achieve this ambitious goal, as well as delivering great returns to investors.

As this Company is at the beginning of its journey, it will take time to deploy the funds raised into companies the investment team consider to be good investment opportunities. While the Company is building up its investments, the portfolio will naturally be more concentrated in fewer companies. This means that performance will be more sensitive to the success and/or failure of these investments than if the portfolio was larger.

As such, over the coming years, there may well be a decline in overall value as Future Generations VCT invests in new businesses, some of which are at the start of their growth journey and need to build their technology, prove their market, win new contracts and grow their teams. Their value will take time to grow, and unfortunately some of these will ultimately fail.

The long-term target is to pay an annual dividend of 5% of the NAV. However, given the expected holding period of target portfolio companies and restrictions imposed on VCTs, it is very unlikely Future Generations VCT will be able to pay dividends before 1 July 2025. During this time, any growth in value will increase the value of the Company. Dividends are likely to be generated from successful exits, so the Company is unlikely to pay significant dividends until portfolio companies have time to mature and/or be acquired.

I would like to conclude by thanking both my Board colleagues and the Octopus team on behalf of all shareholders for their hard work. I am excited to see what the coming year brings for this new Company.

Helen Sinclair
28 October 2022

Portfolio Manager’s review

At Octopus, our focus is on managing your investments and providing investors with clear and transparent communication. Our annual and interim updates are designed to keep you informed about the progress of your investment. Octopus was established in 2000 and has a strong commitment to both smaller companies and to VCTs. We currently manage five VCTs, including Future Generations VCT, with assets of over £1.9 billion.

Focus on Future Generations VCT’s performance

The NAV per share at 30 June 2022 was 96.1p and in the period Future Generations VCT made two new investments. Going forward, we will report on the proportion and value of the portfolio in each sustainability theme. Of the two investments which have completed at 30 June 2022, 61% address the revitalising healthcare theme with a total value of £1.0 million and the remaining 39% are aligned with the empowering people category, with a total value of £0.7 million. There are investments in the pipeline which are concentrating on building a sustainable planet but have not yet completed.

As part of our responsible ownership strategy, we require portfolio companies to put in place a diversity and inclusion policy (‘D&I’) and an anti‑harassment policy. We will also be engaging with each company to help them understand their greenhouse gas emissions and support them to take action to minimise them. We will report on engagement to our shareholders on an annual basis. Of the two investments made, both are in the process of implementing a D&I policy and all have been offered complimentary access to a carbon accounting and management tool to enable reporting around key metrics and to feed into carbon reduction plans. We are pleased that, to date, 100% of the portfolio companies are signed up and utilising the carbon accounting tool.

Overview of investments

Future Generations VCT completed two new investments in the reporting period, totalling £1.7 million, and four further investments after 30 June 2022. Together, these totalled £3.9 million invested into new companies. These companies have also been invested in by other funds managed by Octopus.

We are expecting to make further investments over the coming months, and below are some examples of potential investments in the pipeline across Future Generations VCT’s three sustainability themes:

A selection of our pipeline of new potential investments 

Building a sustainable planet:

  • An embedded insurance platform that gives merchants the ability to provide insurance bundles to their customers. This promotes more sustainable consumption via their services for repair and reconditioning rather than the purchase of new equipment. 

Empowering people:

  • A business that offers an end-to-end federated learning platform enabling data scientists to conduct analysis over sensitive data without compromising privacy or data security.
  • A company which has developed a benefits platform to offer greater autonomy for employees to select their own benefits. 

Revitalising healthcare:

  • A company which has created a digital, personalised psychological therapy and coaching platform.
  • A business which has built an antigen discovery platform to develop cancer vaccines. 


The world around us is changing at an unprecedented rate. The Covid-19 pandemic and the economic turbulence we have encountered in 2022 means that businesses need to be even more agile and resilient. We launched the Future Generations VCT in January 2022 and we believe, as history has shown us, that great businesses are and will continue to be founded at times of economic turmoil. We are constantly impressed at the level of ingenuity, ambition, drive and passion that we see in the entrepreneurs we meet who are looking to solve some of society’s biggest issues. We believe the companies that understand what it means to make the world a better place have the potential to deliver some of the best returns to investors.

Future Generations VCT’s three themes address some of the biggest challenges we have ever faced as a society and planet. The team investing the Future Generations VCT was founded in 2007, has backed over 175 teams, and a third of them have founded their own companies previously. We review thousands of potential businesses each year and typically select fewer than 1% of these to invest in. The portfolio companies are supported through their growth journey as we believe early-stage businesses require more than just funding to be successful. They require specialist knowledge to be able to take advantage of all opportunities presented, especially in today’s more challenging and competitive climate. Our dedicated, in-house portfolio talent team offers support to help companies to scale their recruitment, provides access to specialist advice and consultants, and runs events and workshops.

We have already completed some of Future Generations VCT’s first investments and these companies are addressing a mixture of issues including career coaching, microscopic camera technology, and autonomous telemedicine. This diversity shows how wide-ranging Future Generation VCT’s scope will be across its three investment themes and we believe the entrepreneurs behind these businesses have created some best-in-class solutions that we are delighted to help scale. As well as backing companies across a diverse range of sectors, we also want to back diverse management teams as we believe diversity encourages innovation and is a crucial success factor. As such, we have recently published our intention to make sure 30% of all new founder pitches will be by businesses led or co-led by a woman by 2025, increasing to 50% by 2027. Alongside this, we have also been signatories to HM Treasury’s Investing in Women Code since 2020. We are excited to have the opportunity to invest this new VCT, support its ambition to make the world a better place for future generations, and to deliver attractive returns to shareholders. We believe that Octopus is extremely well placed to see some of the best investment opportunities, generated by our extensive network and reputation in the early‑stage market. 

Who we’ve backed so far

Inflow is a digital health company that helps people with Attention Deficit Hyperactivity Disorder (‘ADHD’). ADHD impacts hundreds of millions of people worldwide and the company hopes to become the home for people with ADHD before then applying its approach to a broader set of neurological differences including Autism, Dyslexia, Dyspraxia, Obsessive Compulsive Disorder (‘OCD’) and Tourette’s.


Product launch date: March 2021
Investment date: June 2022

  • Inflow has achieved over 200,000 downloads and has over 15,000 paying members. 
  • The company follows a self-pay, direct-to-consumer model.

Post period end investment

Oto is a digital health start-up that helps people with overlooked chronic conditions get their life back. Its first product is a digital programme that teaches people to manage tinnitus – a condition commonly experienced as ringing in the ears. The programme uses science-based therapy delivered via a mobile app to enable tinnitus self-management at a fraction of the cost of in‑person treatment.


Product launch date: January 2021
Investment date: July 2022

  • One in eight people are affected by tinnitus, and there are 23 million British and American people really struggling with it. 
  • Digital therapeutics solutions like Oto are providing a 10x cheaper and more convenient way of managing this condition.

Risk and risk management

The Board assesses the risks faced by Future Generations VCT and, as a Board, reviews the mitigating controls and actions and monitors effectiveness of these controls and actions.

Principal risks, emerging risks and risk management

Detailed below are the principal risks of Future Generations VCT, and the mitigating actions in relation to those risks. In addition to the principal risks, emerging risks including adverse changes in the global macroeconomic environment, climate change, high market valuations and geopolitical protectionism are monitored by the Board.

The Board seeks to mitigate risks by setting policy, regularly reviewing performance and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies the principles detailed in the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting.

Risk Mitigation
Investment performance:
The focus of Future Generations VCT investments is into early-stage, unquoted, 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.
Octopus has significant experience and a strong track record of investing in early-stage unquoted companies, and appropriate due diligence is undertaken on every new investment. A member of the Octopus Ventures team is typically appointed to the board of a portfolio company, and regular board reports are prepared by the portfolio company’s management and examined by the Manager. This arrangement, in conjunction with its portfolio talent team’s active involvement, allows Future Generations VCT to play a prominent role in a portfolio company’s ongoing development and strategy.
VCT qualifying status:  
Future Generations VCT is required at all times to observe the conditions for the maintenance of approved VCT status. The loss of such approval could lead to Future Generations VCT and its investors losing access to the various tax benefits associated with VCT status and investment. Octopus tracks Future Generations VCT’s qualifying status throughout the period, and review this at key points including at the point of investment and realisation. This status is reported to the Board at each Board meeting. The Future Generations VCT Board has also engaged external independent advisers to undertake an independent VCT status monitoring role.
Loss of key people:  
The loss of key investment staff by the Portfolio Manager could lead to poor fund management and/or performance due to lack of continuity or understanding of Future Generations VCT. The Portfolio Manager has a broad team experienced in and focused on early-stage investing. This mitigates the risk of any one individual with the required skill set and knowledge of Venture Capital investing, and the portfolio specifically, leaving. Key investment staff are also incentivised via the performance incentive fee.
The Future Generations VCT Board is reliant on the Portfolio Manager to manage investments effectively, and manage the services of a number of third parties, in particular the Registrar, Depositary and tax advisers. A failure of the systems or controls at Octopus or third-party providers could lead to an inability to provide accurate reporting and accounting and to ensure adherence to VCT rules. The Future Generations VCT Board reviews the system of internal controls, both financial and non-financial, operated by Octopus (to the extent the latter are relevant to Future Generations VCT internal controls). These include controls designed to make sure that Future Generations VCT assets are safeguarded and that proper accounting records are maintained.
Information security:  
A loss of key data could result in a data breach and fines. The Future Generations VCT Board is reliant on Octopus and third parties to take appropriate measures to prevent a loss of confidential customer information. Annual due diligence is conducted on third parties which includes a review of their controls for information security. Octopus has a dedicated information security team and a third party is engaged to provide continual protection in this area. A security framework is in place to help prevent malicious events.
Events such as an economic recession, movement in interest rates, inflation and rising living costs could adversely affect some smaller companies’ valuations, as they may be more vulnerable to changes in trading conditions or the sectors in which they operate. This could result in a reduction in the value of Future Generations
VCT assets.
Future Generations VCT aims to invest in a diverse portfolio of companies, across a range of sectors, which helps to mitigate against the impact on any one sector. Future Generations VCT also maintains adequate liquidity to make sure that it can continue to provide follow‑on investment to those portfolio companies which require it and which is supported by the individual investment case.
A change to the VCT regulations could adversely impact Future Generations VCT by restricting the companies Future Generations VCT can invest in under its current strategy. Similarly, changes to VCT tax reliefs for investors could make VCTs less attractive and impact Future Generations VCT’s ability to raise further funds. The Portfolio Manager engages with HM Treasury and industry bodies to demonstrate the positive benefits of VCTs in terms of growing early-stage companies, creating jobs and increasing tax revenue, and to help shape any change to VCT legislation. The ‘sunset clause’ meant that in 2025 the government would need to renew the legislation to allow VCTs to continue to operate under the current legislation. However, from the government’s recent announcement they have stated they are supportive of VCTs and see the value in extending them in the future.
The risk that Future Generations VCT’s available cash will not be sufficient to meet its financial obligations. Future Generations VCT invests into smaller unquoted companies, which are inherently illiquid as there is no readily available market for these shares. Therefore, these may be difficult
to realise for their fair market value at short notice.
Future Generations VCT’s liquidity risk is managed on a continuing basis by Octopus in accordance with policies and procedures agreed by the Board. Future Generations VCT’s overall liquidity risks are monitored on a quarterly basis by the Board, with frequent budgeting and close monitoring of available cash resources. Future Generations VCT maintains sufficient investments in cash and readily realisable securities to meet its financial obligations.

Viability statement

In accordance with the FRC UK Corporate Governance Code published in 2018 and provision 36 of the AIC Code of Corporate Governance, the Directors have assessed the prospects of Future Generations VCT over a period of five years, consistent with the expected investment holding period of an investor. A fundraising was launched on 31 January 2022 and is due to close on 31 October 2022, raising over £40 million. Under VCT rules, subscribing investors are required to hold their investment for a five‑year period in order to benefit from the associated tax reliefs. The Board regularly considers strategy, including investor demand for Future Generations VCT’s shares, and a five-year period is considered to be a reasonable time horizon for this.

The Board carried out a robust assessment of the emerging and principal risks facing Future Generations VCT and its current position. This includes the cost of living crisis, rising interest rates, the war in Ukraine and any other risks which may adversely impact its business model, future performance, solvency or liquidity, and focused on the major factors which affect the economic, regulatory and political environment.

Particular consideration was given to Future Generations VCT’s reliance on, and close working relationship with, the Portfolio Manager. The principal risks faced by Future Generations VCT and the procedures in place to monitor and mitigate them are set out above.

The Board has carried out robust stress testing of cash flows, which included assessing the resilience of portfolio companies, including the requirement for any future financial support.

The Board has additionally considered the ability of Future Generations VCT to comply with the ongoing conditions to make sure it maintains its VCT qualifying status under its current investment policy.

Based on this assessment the Board confirms that it has a reasonable expectation that Future Generations VCT will be able to continue in operation and meet its liabilities as they fall due over the five-year period to 30 June 2027. The Board is mindful of the ongoing risks and will continue to make sure that appropriate safeguards are in place, in addition to monitoring the cash flow forecasts to make sure Future Generations VCT has sufficient liquidity.

Directors’ responsibilities statement

The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Directors’ Remuneration Report and the Financial Statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report and financial statements include information required by the Listing Rules of the Financial Conduct Authority.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (‘GAAP’), including Financial Reporting Standard 102 – The Financial Reporting Standard Applicable in the United Kingdom and Republic of Ireland (‘FRS 102’), United Kingdom accounting standards and applicable law. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgements and accounting 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;
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
  • prepare a Strategic Report, Directors’ Report and Directors’ Remuneration Report which comply with the requirements of the Companies Act 2006. 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each of the Directors is aware: 

  • there is no relevant audit information of which the Company’s auditor is unaware; and
  • the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. 

The Directors are responsible for preparing the annual report and financial statements in accordance with applicable law and regulations. Having taken advice from the Audit Committee, the Directors are of the opinion that this report as a whole provides the necessary information to assess the Company’s performance, business model and strategy and is fair, balanced and understandable.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm that, to the best of their knowledge: 

  • the financial statements, prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
  • the annual report and financial statements (including the Strategic Report), give a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

Helen Sinclair
28 October 2022

Income statement
Period ended 30 June 2022

    Period to 30 June 2022
    Revenue Capital Total
    £’000 £’000 £’000
Net gain on valuation of fixed asset investments   9 9
Investment management fee   (39) (118) (157)
Other expenses   (165) (165)
Loss before tax   (204) (109) (313)
Loss after tax   (204) (109) (313)
Loss per share – basic and diluted   (1.6)p (0.8)p (2.4)p
  • The ‘Total’ column of this statement is the profit and loss account of Future Generations VCT; the supplementary revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies.
  • All revenue and capital items in the above statement derive from continuing operations.
  • Future Generations VCT has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.

Future Generations VCT has no other comprehensive income for the period.

Balance sheet
Period ended 30 June 2022

    As at 30 June 2022
    £’000 £’000
Fixed asset investments     1,663
Current assets:      
    Debtors   54  
    Applications cash1   1,915  
    Cash at bank   29,826  
Creditors: amounts falling due within one year   (2,166)  
Net current assets     29,629
Net assets     31,292
Share capital     33
Share premium     31,572
Capital reserve realised     (118)
Capital reserve unrealised     9
Revenue reserve     (204)
Total equity shareholders’ funds     31,292
NAV per share 7   96.1p
  1. Cash received from investors but not yet allotted.

The statements were approved by the Directors and authorised for issue on 28 October 2022 and are signed on their behalf by:

Helen Sinclair
Company No: 13750143

Statement of changes in equity
Period ended 30 June 2022

      Capital Capital    
    Share reserve reserve Revenue  
  Share capital premium realised1 unrealised reserve1 Total
  £’000 £’000 £’000 £’000 £’000 £’000
As at 17 November 2021
Comprehensive income for the period:            
Management fees allocated as capital expenditure (118) (118)
Net gain on fair value of fixed asset investments 9 9
Loss after tax (204) (204)
Total comprehensive loss for the period (118) 9 (204) (313)
Contributions by and distributions to owners:            
Shares issued 33 32,111 32,144
Share issue costs (539) (539)
Total contributions by and distributions to owners 33 31,572 31,605
Balance as at 30 June 2022 33 31,572 (118) 9 (204) 31,292
  1. Reserves are available for distribution, subject to restrictions.

Cash flow statement
Period ended 30 June 2022

    Period to 30 June
Cash flows from operating activities    
Loss before tax   (313)
Increase in debtors   (54)
Increase in creditors   251
Gain on valuation of fixed asset investments   (9)
Outflow from operating activities   (125)
Cash flows from investing activities    
Purchase of fixed asset investments   (1,654)
Outflow from investing activities   (1,654)
Cash flows from financing activities    
Applications account inflow   32,144
Applications account outflow   (30,229)
Proceed from share issues   32,144
Share issue costs   (539)
Inflow from financing activities   33,520
Increase in cash and cash equivalents   31,741
Opening cash and cash equivalents  
Closing cash and cash equivalents   31,741
Cash and cash equivalents comprise    
Cash at bank   29,826
Applications cash   1,915
Closing cash and cash equivalents   31,741

Notes to the financial statements

1. Principal accounting policies

Octopus Future Generations VCT plc (‘Future Generations VCT’) is a Public Limited Company (plc) incorporated in England and Wales and its registered office is at 6th Floor, 33 Holborn, London EC1N 2HT.

Future Generations VCT has been approved as a Venture Capital Trust by HMRC under Section 259 of the Income Taxes Act 2007. The shares of Future Generations VCT were first admitted to the Official List of the UK Listing Authority and trading on the London Stock Exchange on 5 April 2022 and can be found under the TIDM code OFG. Future Generations VCT is premium listed.

The principal activity of Future Generations VCT is to invest in a diversified portfolio of UK smaller companies in order to generate capital growth over the long term as well as an attractive tax-free dividend stream.

The financial statements are presented in sterling (£) to the nearest £’000. The functional currency is also sterling (£).

Basis of preparation

The financial statements have been prepared on a going concern basis under the historical cost convention, except for the measurement at fair value of certain financial instruments, and in accordance with UK Generally Accepted Accounting Practice (‘GAAP’), including Financial Reporting Standard 102 – ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (‘FRS 102’), Companies Act 2006 and the Statement of Recommended Practice (SORP) ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts (July 2022)’.

2. Investment management fees
Accounting policy
For the purposes of the revenue and capital columns in the Income Statement, the management fee has been allocated 25% to revenue and 75% to capital, in line with the Board’s expected long-term return in the form of income and capital gains respectively from Future Generations VCT’s investment portfolio.


  Period to 30 June 2022
  Revenue Capital Total
  £’000 £’000 £’000
Investment management fee 39 118 157
Total 39 118 157

The Portfolio Manager provides investment management services through agreements with Octopus AIF Management Limited and Future Generations VCT. It also provides accounting and administration services to Future Generations VCT under a Non-Investment Services Agreement (‘NISA’). No compensation is payable if the agreement is terminated by either party, if the required notice period is given. The fee payable, should insufficient notice be given, will be equal to the fee that would have been paid should continuous service be provided, or the required notice period was given.

3. Other expenses
Accounting policy
Other expenses are accounted for on an accruals basis and are charged wholly to revenue.

The transaction costs incurred when purchasing or selling assets are written off to the Income Statement in the period that they occur.

  Period to
  30 June 2022
Audit fees1 38
Directors’ remuneration2 29
NISA fees 24
Listing fees 17
Printing fees 17
Depositary fees 13
Registrar fees 12
Other fees 15
Total 165
  1. Includes VAT.
  2. Includes employers’ NI. 

Total ongoing charges are capped at 3.0% of net assets. For the period to 30 June 2022 the ongoing charges were 2.2% of net assets. This is calculated by summing the annualised expenses incurred in the period (excluding non-recurring expenses) divided by the average NAV throughout the period.

4. Directors’ remuneration
Total Directors’ fees paid during the period were £28,000. Employers’ National Insurance contributions paid during the period were £1,000. The highest paid Director received £16,000. None of the Directors received any other remuneration or benefit from Future Generations VCT during the period. Future Generations VCT has no employees other than Non-Executive Directors. The average number of Non-Executive Directors in the period was three.

5. Tax on ordinary activities
Accounting policy
Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the ‘marginal’ basis as recommended in the SORP.

Deferred tax is recognised in respect of all timing differences at the reporting date. Timing differences are differences between taxable profits and total income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements.

The corporation tax charge for the period was £nil.

  Period to
  30 June 2022
Loss on ordinary activities before tax (313)
Current tax at 19% (60)
Effects of:  
Non‑taxable income
Non‑taxable capital gains (2)
Non‑deductible expenses
Excess management expenses on which deferred tax not recognised 81
Tax rate differences1 (19)
Total current tax charge
  1. Tax rate difference due to tax charge for the period being calculated at 19% and excess management expenses on which deferred tax is not recognised being calculated at 25%.

Unrelieved tax losses of £313,000 are estimated to be carried forward at 30 June 2022 (subject to completion of Future Generations VCT’s tax return) and are available for offset against future taxable income, subject to agreement with HMRC. Future Generations VCT has not recognised the deferred tax asset of £81,000 in respect of these tax losses because there is insufficient forecast taxable income in excess of deductible expenses to utilise these losses carried forward.

The deferred tax asset is based on the future tax rate that has been substantially enacted as at the balance sheet date.

Approved VCTs are exempt from tax on capital gains. As the Directors intend for Future Generations VCT to continue to maintain its approval as a VCT through its affairs, no current deferred tax has been recognised in respect of any capital gains or losses arising on the revaluation or disposal of investment.

6. Earnings per share

  Period to 30 June 2022
  Revenue Capital Total
  £’000 £’000 £’000
Loss attributable to Ordinary shareholders (£’000) (204) (109) (313)
Loss per Ordinary share (p) (1.6) (0.8) (2.4)

The total earnings per share is based on 13,205,218 Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.

There are no potentially dilutive capital instruments in issue and so no diluted return per share figures are relevant. The basic and diluted earnings per share are therefore identical.

7. Net asset value per share

  30 June 2022
Net assets (£’000) 31,292
Shares in issue 32,569,178
NAV per share (p) 96.1

8. Post balance sheet events

The following events occurred between the balance sheet date and the signing of these financial statements: 

  • four new investments completed totalling £2.3 million; and
  • 4.6 million shares were allotted at a price of 99.1p per share on 8 August 2022. This includes the applications cash balance that had not yet been allotted at 30 June 2022.
  • on 25 October 2022, the Company announced the current Offer for Subscription to raise up to £20 million in aggregate with an over-allotment facility of £80 million will close for new applications on 31 October 2022.

9. Transactions with the Manager and Portfolio Manager
Future Generations VCT is classified as a full-scope Alternative Investment Fund under the Alternative Investment Fund Management Directive (the ‘AIFM Directive’). Future Generations VCT has appointed Octopus AIF Management Limited to provide the services of an AIFM of a full scope AIF. In accordance with its power to do so under AIFMD, Octopus AIF Management Limited has delegated investment management to Octopus Investments Limited, whilst retaining the obligations of a risk manager.

Future Generations VCT paid Octopus AIF Management Limited £157,000 in the period as a management fee. The annual management charge (‘AMC’) is based on 2% of Future Generations VCT’s NAV. The AMC is payable quarterly in advance and calculated using the latest published NAV of Future Generations VCT and the number of shares in issue at each quarter end. Once the quarter has ended, an adjustment will be made if the NAV at the end of the current quarter is calculated and which differs from the NAV as at the end of the previous quarter.

Octopus also provides Non-Investment Services to Future Generations VCT, payable quarterly in advance. The fee is 0.3% of Future Generations VCT’s NAV, calculated at quarterly intervals. The NISA fee is calculated using the latest published NAV of Future Generations VCT and the number of shares in issue at each quarter end. As with the AMC, an adjustment will be made once the quarter has ended if the NAV at the end of the current quarter is calculated and which differs from the NAV as at the end of the previous quarter. During the period £24,000 was paid to Octopus for Non-Investment Services.

In addition, Octopus are entitled to performance-related incentive fees, subject to Future Generations VCT’s total return at year end exceeding the total return at the previous year end when an incentive fee was paid or 97p if the first incentive fee has not yet been paid (the ‘Excess’), equal to 20% of the Excess. No performance fee will be paid prior to the financial year ending on 30 June 2025, dividends (paid or declared) being equal to or greater than 10p per Ordinary share and the total return exceeding 120p.

The cap relating to Future Generations VCT’s total expense ratio, that is the regular, recurring costs of Future Generations VCT expressed as a percentage of its NAV, above which Octopus have agreed to pay, is 3.0%, and is calculated in accordance with the AIC Guidelines.

10. Related party transactions

Several members of the Octopus investment team hold non-executive directorships as part of their monitoring roles in Future Generations VCT’s portfolio companies, but they have no controlling interests in those companies.

Emma Davies, a Non-Executive Director of Future Generations VCT, is also co-CEO of Octopus Ventures and owns shares in Octopus Capital Ltd. No dividends have been paid to the Directors of Future Generations VCT.

  Period to
  30 June 2022
Helen Sinclair
Joanna Santinon
Emma Davies

11. 2022 financial information

The figures and financial information for the period ended 30 June 2022 are extracted from the Company’s annual financial statements for the period and do not constitute statutory accounts. The Auditors’ report on the 2022 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.

12. Annual Report and financial statements

The Annual Report and financial statements will be available on the Company’s website and the National Storage Mechanism which is located at The Notice of Annual General Meeting is contained within the Annual Report.

13. General information
Registered in England & Wales. Company No. 13750143
LEI: 213800AL71Z7N2O58N66

14. Directors
Helen Sinclair (Chair), Joanna Santinon and Emma Davies.

15. Secretary and registered office
Octopus Company Secretarial Services Limited
33 Holborn, London EC1N 2HT


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