Annual Report
and Accounts
2017
“Our latest investments have
enabled us to extend our support
for innovative and alternative
nance in the market and to
increase the supply of capital to
ambitious small and medium sized
businesses looking to scale up.”
Catherine Lewis La Torre
Chief Executive Ocer
01
Contents
Chairman’s report 02
Chief Executive’s statement 04
Strategic report 06
Meeting our strategic and commercial objectives 06
Our Board 08
Meet the team 10
Direct Lending 12
Structured Capital Solutions 14
FinTech 16
Venture Capital 18
Opportunities for partnering 20
Managing our risks and corporate structure 22
Directors’ report 24
Statement of directors’ responsibilities 25
Independent auditor’s report 26
Financial statements for the year ended 31March2017 27
British Business Bank Investments Limited — Annual Report and Accounts 2017
At the end of 2016/17, British
Business Investments – the
commercial arm of the British
Business Bank – has become
recognised as an important enabler
of new and diverse nance for smaller
businesses. This recognition derives
from a strong and growing track
record of success since its inception.
British Business Investments is
increasing the diversity of the nance
market and producing positive
investment returns for taxpayers
in doing so. It does this by investing
in smaller banks, non-bank lenders
and venture capital funds to increase
the choice of nance for smaller and
medium sized businesses.
A successful
third year
of growth
“B ritish Business Investments is
increasing the diversity of the
nance market and producing
positive investment returns for
taxpayers in doing so.”
02
British Business Bank Investments Limited — Annual Report and Accounts 2017
Chairman’s report
03Chairman’s report
Commercially-focused
While the British Business Bank group
has a wider overall remit, including
subsidised activities and carrying out
programmes on behalf of other parts
of the government, as the commercial
arm we focus on making fully
commercial decisions on investments
where they meet the group’s strategic
objectives and oer attractive returns
for the taxpayer.
2016/17 has been another successful
year for British Business Investments,
following on from what we have
achieved previously. The gures in this
year’s report, highlighted by our CEO,
Catherine Lewis La Torre, in the
following section speak for themselves,
showing marked increases across the
board over the last three years.
Over the last year, we have increased
the level of commitment to both debt
and equity partners. A particular
focus has been catalysing the venture
capital market, which is so vital in
enabling fast-growing smaller
businesses to achieve their potential
and support the economy. This
approach is being facilitated and
encouraged by the government,
which made an additional £400 million
available to us for this purpose at the
Autumn Statement 2016.
In response to reduced activity by
the European Investment Fund the
Chancellor recently announced that
we will raise the limits on what we can
invest in venture capital funds and
bring forward some of the additional
£400 million mentioned above.
Future aims
We will continue to build on our
successes in developing existing and
new market options for businesses
seeking nance, working through our
expanding portfolio of 38 partners.
We look forward to helping many
more businesses, particularly those
seeking to grow rapidly, get the
nance they need to realise the
success they deserve.
I would like to thank Catherine, who
is now completing her rst full year
in oce, and the other directors once
again for their support, commitment
and valuable commercial insight in
helping us achieve our aims this year.
Keith Morgan
Chairman
Over the last year, we have
increased the level of commitment
to both debt and equity partners.
British Business Bank Investments Limited — Annual Report and Accounts 2017
04 Chief Executive’s statement
Delivering
against our
objectives
“O ur returns for the period
are well ahead of the
benchmarks set for the
business by our shareholder.”
We are pleased to be showing strong
performance as we complete our third
year of operation, delivering ahead of
target on the objectives set by our
shareholder, the British Business Bank.
During the year we added ve new
investment partnerships to our
portfolio and provided additional
capital to three existing successful
nancing partners. Cumulative
commitments across the portfolio
are now approaching £1.6 billion.
Our latest investments have
enabled us to extend our support
for innovative and alternative nance
in the market and to increase the
supply of capital to ambitious small
and medium sized businesses looking
to scale up.
We have achieved this whilst at the
same time earning an attractive,
commercial return for the UK
government and the British taxpayer.
In the year to the 31March2017,
we generated income from our
investments of £60.5 million, which
delivered a pre-tax prot of
£55.1million. These are signicant
increases on the prior nancial year
– 33% and 37% respectively – which
will ensure that a signicant dividend
is paid to our shareholder.
Our gross return on average capital
employed for the period was 7.4%,
or 6.7% net of costs. Both returns are
well ahead of the benchmarks set for
the business by our shareholder and
demonstrate the strength of our
investment portfolio as well as the
eciency of our operations.
A diverse and performing
debt portfolio
During the nancial year we further
diversied our portfolio and today
we work with 38 dierent providers
of capital to small and medium sized
businesses. These include direct
lending funds, asset nance
businesses, challenger banks and
FinTech companies and platforms.
Together these deliver a range of
nancial instruments spanning
senior loans, unitranche facilities,
mezzanine capital, leasing and
venture debt. This ensures that
a broad and diverse group of
businesses can nd the appropriate
funding they need to meet their
capital investment and growth plans.
British Business Bank Investments Limited — Annual Report and Accounts 2017
05Chief Executive’s statement
In the 2016/17 nancial year we have
again produced tangible, impressive
results due to the commitment and
hard work of everyone on the team.
We invest our capital on a pari passu
basis alongside institutional and other
investors who are seeking commercial
returns that are commensurate with
the investment risk undertaken.
The funding we have provided in the
market has also been successful in
unlocking third party capital for our
partners. In addition to our invested
capital of £868 million, third parties
have invested a further £6.3 billion
alongside, resulting in total funding
of £7.2 billion across the market. This
capital was invested in almost 18,000
separate businesses at the end of
March2017.
Expanding our equity
programme
The £400 million allocated at last
year’s Autumn Statement has enabled
a major expansion of our Venture
Capital (VC) Catalyst programme.
This helps us address a recognised
market gap in the UK where there
is insucient institutional capital
available to invest in venture funds.
Our programme has committed
£78million to nine venture capital
funds to date.
More importantly, our capital has
catalysed almost 13 times of additional
third party funding resulting in more
than £1billion of capital available
for innovative and high-growth
companies that require long-term
capital to start-up or scale-up.
An established and
relevant role
We continually assess our current
activities to make sure that these are
delivering on both the strategic and
commercial objectives that have been
set. We also stand ready to step up
our response or to address new areas
where we identify that there is an
insucient supply of private capital
for small and medium sized
businesses, recognising that these
companies form the backbone of the
UK economy.
After three years of trading we have
decided to refresh our brand. We
have simplied our name to British
Business Investments as reected in
our updated logo and showcased in
this report.
In the 2016/17 nancial year we have
again produced tangible, impressive
results due to the commitment and
hard work of everyone on the team
as well as the Investment Committee
and Board. I would like to thank
everyone for their eorts and look
forward to building on our success
further as we address the challenges
and opportunities of the year ahead.
Approval of the strategic
report
The following Strategic Report was
approved by the Board and signed on
its behalf by
Catherine Lewis La Torre
Chief Executive Ocer
5 September 2017
British Business Bank Investments Limited — Annual Report and Accounts 2017
Strategic report06
Meeting our
strategic and
commercial
objectives
British Business Investments continually
assesses its current activities to make
sure that these are delivering on both
our strategic and commercial objectives.
Our approach
1. Support
the development of diverse
debt and equity nance
markets
Supporting nancial
i
nnovation and diversity
Number of investments in providers of capital
40
30
20
10
0
31 Mar 15 31 Mar 16 31 Mar 17
Direct Lending FinTech
Structured Capital Solutions
Venture Capital
2. Promote
competition and increased
supply through new and
existing nance providers
Promoting a greater supply
o
f nance to the market
Portfolio commitments (£bn)
2.0
£1.2bn
£1.4bn
£1.6bn
1.5
1.0
0
0.5
31 Mar 15 31 Mar 16 31 Mar 17
British Business Bank Investments Limited — Annual Report and Accounts 2017
07Strategic report
3. Increase
the level of nance to small
and medium sized businesses
Increasing nancing options
for UK SMEs
8
£3.3bn
£5.3bn
£7.2bn
6
4
2
0
31 Mar 15 31 Mar 16 31 Mar 17
British Business Investments Capital Third Party Capital
Funding facilitated (£bn)
31 Mar 15 31 Mar 16
31 Mar 17
Number of businesses supported
17,719
7,194
12,068
4. Deliver
a commercial return
for our shareholder
40
50
60
£46m
£61m
£40m
£55m
30
20
10
0
31 Mar 16 31 Mar 17
D
elivering in excess of
our benchmark return
Profitability (£m)
Revenue
Net pro
fit before tax
8
6
2
4
0
Return on Invested Capital at 31 Mar 17 (%)
7.4%
6.7%
Benchmark Actual
Gross Net
The year in numbers
£60.5m
income generated
£55.1m
pre-tax prot
7.4%
gross return on
average capital
invested
6.7%
return on average
capital invested net
of costs
British Business Bank Investments Limited — Annual Report and Accounts 2017
08 Strategic report
Our
Board
We have a Board and governance
structure designed to protect our
commercial approach which enables
us to move quickly in investment
decision-making.
Catherine Lewis La Torre
Chief Executive Ocer
Catherine joined British Business
Investments as CEO in September 2016.
Catherine was previously Head
of Private Equity at Cardano Risk
Management where she was
responsible for managing a global
portfolio of private capital
investments with in excess of
£1billion of committed capital.
Prior to this she was a Partner with
secondaries specialist, Fondinvest
Capital, in Paris having earlier been one
of the Founding Partners of Nordic
fund-of-funds manager, Proventure
Private Equity. Catherine began her
career as an Analyst with Venture
Economics, now part of Thomson
Reuters, before joining Cinven as an
Investment Manager. Catherine has
been an active investor in small and
medium sized businesses and mid-
market funds for over 20 years.
Keith Morgan
Chair
Keith led the planning and
establishment of the British Business
Bank from January 2013, and was
appointed Chief Executive Ocer
in December 2013. Prior to this,
Keith was a Director at UK Financial
Investments (UKFI), joining in 2009
to manage the UK government’s
shareholdings in Bradford & Bingley,
Northern Rock and Northern Rock
Asset Management. Keith joined
UKFI from Banco Santander where
he was a Director of Sovereign
Bancorp in the US. He was previously
Director of Strategy and Planning
at Abbey National and a member
of the Executive Committee, and
served as Chairman of Santander’s
Asset Management and Credit
Card businesses in the UK. Before
joining Abbey in 2004, Keith spent
18 years at LEK Consulting, where
he was a partner specialising in
nancial services.
British Business Bank Investments Limited — Annual Report and Accounts 2017
09Strategic report
Sara Halbard
Independent Non-executive
Director
Sara joined as a Non-executive
Director in June2016.
Sara co-founded the Credit Fund
Management group at Intermediate
Capital Group Plc (“ICG”) in 1999
and led that business until 2008.
At ICG she was a member of the
Global Investment Committee and
Management Committees. With a
30 year career in nancial services,
she has an in-depth knowledge
of complex nancial products,
markets and nancing options with
specialist expertise in nancing
European leveraged buyouts. She
currently acts as an advisor and
angel investor to companies
spanning entrepreneurial start-ups
to multinational companies across
a wide range of industry sectors.
Francis Small
Independent Non-executive
Director
Francis became a Non-executive
Director in June2016 after spending
36 years at Ernst & Young in a wide
variety of roles.
After initially working with small and
medium sized businesses, he became
an audit partner in Financial Services
for seven years. He then joined the
rm’s Corporate Finance practice
where he specialised in cross-border
acquisitions, disposals, IPOs and
restructuring. He ran the UK
Corporate Finance practice before
becoming Global Head of Corporate
Finance and a member of the Ernst &
Young’s Global Board.
Francis lived and worked in the Middle
East for two years, advising some of
the world’s largest sovereign wealth
funds. After returning to London
in 2010, he co-ordinated services
to some of Ernst & Young’s largest
international clients.
Fiona-Jane MacGregor
Non-executive Director
Fiona-Jane is a Chartered Accountant
with a career in the nancial
restructuring of troubled corporates,
and in building valuable equity
investments, often through inuencing
complex stakeholder groups in growing
or underperforming enterprises.
Previously at Royal Bank of Scotland,
Fiona-Jane joined UK Government
Investments (UKGI) in 2012, where she
was Chief Operating Ocer until 2014.
She created the Special Situations
team in October 2014, which involved
building a team of professionals,
creating an operating model and
working with senior stakeholders
across government to ensure that
sectors at risk of economic stress
are identied and where appropriate
contingency plans are designed in
preparation for implementation.
Recent areas of focus have included
oil and gas, healthcare and
government contractors.
British Business Bank Investments Limited — Annual Report and Accounts 2017
10 Strategic report
Meet
the team
1
Mark Barry
Senior Manager
Mark joined the investment team in
November 2015. He focusses on all
aspects of the deal process as well
as monitoring existing portfolio
companies. Prior to joining, Mark
spent three years at PwC, Dublin,
where he was a Senior Associate in
the Asset Management department.
Alex Bartolini
Manager
Alex joined in January 2016 from
UBFS, a family oce engaged in
private equity placements in Africa,
where he had worked since 2015.
Prior to that Alex spent two and half
years at GE Capital working in risk
management and leveraged nance
on several large and mid-cap
sponsored deals across Europe and
the United States.
Mark Coggin
Manager
Mark joined the team in June 2016
and is responsible for supporting the
management of the portfolio, as well
as new investments.
Previously, Mark worked for Ernst &
Young as a Corporate Finance
Executive specialising in transaction
and investment-based support for
both public and private sector clients,
having started as a trainee in 2010.
Mark is a Chartered Accountant and
member of the Institute of Chartered
Accountants for Scotland.
British Business Bank Investments Limited — Annual Report and Accounts 2017
11Strategic report
Richard Coldwell
Director
Richard Coldwell joined the team in
June2012. He focuses on the direct
lending debt funds, having previously
been involved in building the peer-to-
peer portfolio.
Richard is a Chartered Accountant
with a background in corporate
nance having worked for KPMG,
ING and GE Commercial Finance.
Peter Garnham
Director
Peter is a founder member of the
team, having joined in 2012 to help
develop debt nance initiatives.
He is now chairman of the company’s
Portfolio Monitoring and Valuation
Committee.
Peter has a background in specialised
lending and corporate nance gained
in major investment banks and
accountants Ernst & Young. More
recently Peter developed venture
capital company YFM Venture Finance
as its Managing Director. He was
Non-executive Director for two VCT
funds and the investment fund of
the Waste and Resources Action
Programme charity.
Hala Georgy
Analyst
Hala joined in January 2016, having
worked for a global rm ‘NetApp’
where she held an Operations Manager
position, managing EMEA Account
Receivables, working closely with
internal treasury and J.P. Morgan bank.
Hala is a qualied accountant and
also a member of the Association
of Accounting Technicians.
Christine Hockley
Director
Christine joined the team in 2017
to focus on equity funds, having
previously spent over two years in
the Venture Solutions team at the
British Business Bank where she was
involved in investing the VC Catalyst
programme and delivering the
Enterprise Capital Fund Programme.
She has a corporate nance and
commercial background having
worked at Bank of Scotland, PwC
and BOC Industrial Gases.
Marilena
Ioannidou
Director
Marilena joined in December 2013
and she is the team lead on FinTech
investments, having previously led
the mid-cap direct lending portfolio.
Her previous career was spent largely
in corporate nance and investment
banking, having been an Assistant
Director at the Shareholder Executive
in BEIS and a Vice President at
Citigroup Global Markets where she
worked in nancial strategy, equity
capital markets and Financial
Institutions M&A.
Adam Kelly
Director
Adam joined in October 2013 and
focuses on structured capital solutions.
Adam joined from the Shareholder
Executive where he had worked since
2010. His previous career was spent
in corporate nance at two investment
banks, most recently in the Financial
Institutions team at JP Morgan
Cazenove from 2004 to 2010. Prior to
that, Adam spent six years at Dresdner
Kleinwort Wasserstein working in
several sector specic teams.
Zimeng Luo
Summer Analyst
Zimeng joined in June2017 as a
summer analyst. She is currently
pursuing a Master’s degree in
Financial Mathematics at University
College London. Previous internships
include private equity, M&A and
consulting rms.
Zimeng is a CFA level 3 candidate
and holds a B.Sc. degree in Financial
Mathematics from Shanghai Jiao Tong
University in China.
Jonathan Marriott
Senior Manager
Jonathan joined in June2013 and
specialises in asset nance. He has
a wealth of SME lending experience
having been employed in banking
and nance since 1985. Jonathan
previously worked for Yorkshire Bank,
Santander plc and more recently RBS
Invoice Finance Ltd where he held a
Senior Relationship Manager position.
Jonathan is an Associate of the
Chartered Institute of Bankers.
Joanne Ward
Executive Assistant
Joanne joined the team in December
2016 and is responsible for providing
executive administrative support
to the CEO and the investment team.
Joanne has over 15 years’ experience
supporting senior management
teams and coordinating projects
across diverse working cultures.
1
Team members that joined before 1 November
2014 were part of the Departments for Business,
Innovation and Skills or Capital for Enterprise
Limited, as part of the British Business Bank
set-up team.
British Business Bank Investments Limited — Annual Report and Accounts 2017
12 Strategic report
Overview
15
portfolio investments
£1.2bn
committed
£706m
invested
168
businesses supported
as of 31March2017
The UK government was one of
the early investors in direct lending
funds, providing capital to qualied
alternative lenders in the aftermath
of the nancial crisis at a time when
the major banks had scaled back
lending. Since then we have closely
monitored the growth and
performance of the resulting
portfolio of loans which has been
successful in producing both a steady
yield and signicant capital
repayments at a level above our
original forecasts.
As liquidity has returned to the
mid-cap market, we have focused
our eorts on supporting established
as well as emerging managers raising
funds that lend to smaller, generally
higher growth, companies with
revenues of up to £100 million.
These funds are run by experienced
management teams that use a range
of debt instruments, including senior
loans, unitranche facilities,
mezzanine capital and venture debt,
that provide funding solutions for a
broad range of companies with very
dierent capital proles.
Direct Lending
“Direct Lending has now
gained market acceptance
as an alternative source of
capital for small and medium
sized businesses.”
Richard Coldwell
Director
British Business Bank Investments Limited — Annual Report and Accounts 2017
13Strategic report
During the nancial year we
invested in three private debt funds.
These included investment in a
newly-launched debt fund as well
as two existing funds where we
increased out capital commitment
to reach an optimal size.
Going forward we have a strong
pipeline of opportunities and
envisage that direct lending will
continue to be a core part of our
investment strategy.
Partners
UK direct lending deal count continues to grow
31 Mar 17
31 Mar 16 15% Growth
31 Mar 15
85 90 95 100 105 110 115
Source: Deloitte Alternative Lender Deal Tracker 1Q 2017
Number of UK direct lending deals
British Business Investments growing commitments
Total British Business Investments direct lending commitments (£m)
900
1,000
1,100
1,200
800
700
600
500
mid-cap SME
160
863
855 855
250
306
£1,023m
£1,105m
£1,161m
31 Mar 15 31 Mar 16 31 Mar 17
British Business Investments growing lending portfolio
Number of businesses supported
31 Mar 15 31 Mar 16
31 Mar 17
168
119
84
British Business Bank Investments Limited — Annual Report and Accounts 2017
14 Strategic report
Structured
Capital
Solutions
Overview
9
portfolio investments
£205m
committed
£110 m
invested
6,358
businesses supported
as of 31March2017
“W e are able to develop exible, tailored
solutions that unlock real growth for our
partners and provide signicant additional
funding for smaller businesses in the UK.”
Adam Kelly
Director
Through our continued engagement
with the market we have developed
a strong understanding of the
dynamics impacting both asset
nance providers and challenger
banks. As a result we have structured
and delivered capital solutions
directly to qualied market
participants to help address the
access to capital constraints faced
by these partners. This has enabled
them to on-lend in greater volume to
a large number of smaller businesses
throughout the country.
During the nancial year we provided
a Tier two capital facility to a recently
licensed challenger bank. This provides
a valuable addition to its existing
regulatory capital base and can be
drawn upon in a exible manner so
as to be calibrated with the growth
in its underlying business lending.
British Business Bank Investments Limited — Annual Report and Accounts 2017
15Strategic report
Separately we also provided a
combination of senior debt funding
and mezzanine capital to two asset
nance providers that will enable
them to accelerate the growth of
their lending books, in a prudent and
capital-ecient way. Asset nance
is an important source of funding
for smaller businesses in the UK
representing just over £30 billion
of new business lending in 2016,
according to data provided by the
Finance & Leasing Association.
We are continuing our support
for both challenger banks and
asset nance providers with
several promising opportunities
in the pipeline.
3
2 4
6
7
15
Asset Finance providers
1. Credit Asset Management Limited
London
2. Haydock
Blackburn
3. Kingsway
Wilmslow
4. Praetura
Blackburn
5. Private and Commercial Finance
London
6. Shire
Tamworth
7. UFG
Bristol
Partners
Size of UK asset nance market for businesses 2007–2016
(a)(b)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total
SME asset finance (c) Leasing Hire purchase Other finance
0
5
10
15
20
25
30
£bn
Source: Finance & Leasing Association (FLA)
a. Asset finance new business for deals of up to £20 million.
b. 2016 estimates based on actual figures up to November 2016.
c. 2007-2011 SME figures estimated as 60% of total asset finance new business
excluding high value transactions of £20 million or more and public sector finance.
Number of smaller businesses using
asset based nance in the UK
2009 2010 2011 2012 2013 2014 2015 2016
35,000
37,000
39,000
41,000
43,000
Number
of clients
Source: Asset Based Finance Association (ABFA)
British Business Bank Investments Limited — Annual Report and Accounts 2017
16 Strategic report
F i nTe c h
“F inTech plays an important role
in fostering innovation and
enhancing competition in UK
nance markets, becoming a
growing source of funding
for smaller businesses.”
Marilena Ioannidou
Director
Overview
5
portfolio investments
£135m
committed
£65m
invested
11, 275
businesses supported
as of 31March2017
British Business Bank Investments Limited — Annual Report and Accounts 2017
17Strategic report
The FinTech alternative lending sector
has grown signicantly over the last
few years, with annual origination
volumes currently in excess of
£2billion spread across business
lending, property lending, invoice
nance and merchant cash advance.
Our rst investments date back to
2013 when the sector was in its
infancy. We continue to see strong
alignment with our own objectives in
supporting the ongoing development
of this sector, which provides a deeper
and a more diversied pool of funding
sources for smaller businesses.
Lenders continue to evolve rapidly as
business models develop and products
are adopted by the market, providing
smaller businesses with a wider
variety of exible, aordable and more
tailored nancial solutions. During the
year we have committed a further
£40 million to one of our existing
peer-to-peer partners, providing
ongoing institutional capital on the
platform in support of lending growth.
We provide additional support to
the FinTech sector through our
investment in a number of venture
capital funds. Our VC Catalyst funds
have provided early stage equity
of £30 million to eight FinTech
companies across a diverse range
of industry verticals.
We continue to actively engage
with market participants, seeking
appropriate investment opportunities
in this high growth sector.
Partners
Number of businesses supported
31 Mar 15
31 Mar 17
31 Mar 16
11,275
8,484
6,103
Funding supported through our FinTech partners
500
400
300
200
100
0
31 Mar 15
£294m
£347m
£453m
31 Mar 16 31 Mar 17
British Business Investments Capital Third Party Capital
£m
British Business Bank Investments Limited — Annual Report and Accounts 2017
18 Strategic report
Overview
9
portfolio investments
£78m
committed
£26m
invested
24
UK businesses supported
as of 31March2017
Our VC Catalyst programme was
established in 2013 to address a
recognised gap in the UK institutional
investor base for venture capital
funding. We invest in commercially
viable funds either to achieve a rst
close, after which point other investors
may be ready to step in, or to achieve
an optimal fund size that will allow
the manager to eectively execute
the planned investment strategy.
By the end of the nancial year we
had made commitments of £78 million
to nine venture capital funds. These
funds collectively raised over £1 billion
of total capital that is now being
invested across a broad range of
technologies encompassing
enterprise software, Deep Tech,
FinTech, and cyber security as well as
life sciences and resource eciency.
“W e have started to build a
diversied portfolio of funds
investing across multiple
technologies which are bringing
long-term capital to companies
at dierent stages of their
development.”
Christine Hockley
Director
Vent u re
Capital
British Business Bank Investments Limited — Annual Report and Accounts 2017
19Strategic report
We have been undertaking a major
expansion of the VC Catalyst
programme. This has been well
received by the market as the
institutional landscape for VC
investment is shifting. This expansion
will ensure that we become a more
signicant investor in venture capital.
These funds will be providing the
long-term capital necessary to
support the most promising early
stage businesses of tomorrow as
well as continuing to fund ambitious
high-growth businesses.
Total amount raised by VC Catalyst-backed
Venture Capital funds
British Business Investments Commitment
600m
800m
1.0bn
1.2bn
400m
200m
0
Third Party Commitment
31 Mar 15
£297m
£659m
£1.1bn
31 Mar 16 31 Mar 17
£
Partners
UK Venture Capital investment by stage of investment
2.0
2.5
3.0
3.5
1.5
1.0
0.5
0
Seed Early stage VC Later stage VC
£bn
863
2013 2014 2015 2016
£1.2bn
£1.7bn
£3.2bn
£3.1bn
Source: PitchBook
British Business Bank Investments Limited — Annual Report and Accounts 2017
20 Strategic report
The Investment Programme
for alternative providers of
debt nance
We support providers of all types of
debt nance to smaller businesses in
the UK with the main aim to promote
volume and diversity of lending to
SMEs by encouraging new entrants
and supporting the growth of
alternative lenders in the market.
The Investment Programme is open to
applicants that are best able to meet
the following four primary objectives:
— Support the development of
diverse debt nance markets
available to small and medium
sized businesses (Diversication).
— Mobilise additional funding from
private sector sources in order
to support lending to small and
medium sized businesses
(Leverage).
— Channel nance to small and
medium sized businesses in
an eective, appropriate and
responsible manner (Eective
Deployment).
— Expand the aggregate amount
and/or types of debt funding
available to small and medium
sized businesses (Additionality).
Opportunities
for partnering
“We are actively seeking
new partners with
investment strategies
that meet our strategic
and commercial objectives.”
Peter Garnham
Director
British Business Bank Investments Limited — Annual Report and Accounts 2017
21Strategic report
The VC Catalyst Programme
for investors of venture and
growth capital
The objective of the Programme is to
support the UK’s venture and growth
capital infrastructure by investing in
commercially viable funds that might
otherwise fail to reach an optimal size
and where our investment will unlock
additional private capital.
The programme is designed to cover
a diverse range of investment
strategies both in terms of the
technologies, industries and sectors
targeted, as well as the stage of
investment which spans seed and
start-up funding to later stage
venture and growth capital. The
current portfolio is comprised of
companies active in:
— FinTech
— Deep Tech
— Enterprise Software
— Cyber Security
— Resource Eciency
— Life Sciences
Contacting us
Details of each of the above
programmes and more information
on how to partner with us is available
from bbbinv.co.uk.
Opportunities
for partnering
38 partners
15
9
9
5
£906m invested
£706m
£110m
£65m
£26m
£1.6bn commitments
£1.2bn
£135m
£78m
£205m
17,719 businesses
supported
(1)
16824
6,358
11,275
(1) Individual businesses
Direct Lending Structured Capital Solutions FinTech Venture Capital
British Business Bank Investments Limited — Annual Report and Accounts 2017
22 Strategic report
Managing our
risks and corporate
structure
British Business Investments operates
within the Risk Management Framework
of the British Business Bank and the
Board has separate subcommittees
and its own investment committee.
Risk management and
internal control
A full description of the Risk
Management Framework of the
British Business Bank is included
within their Annual Report. The main
aspects of the framework are:
— A collection of tools, processes
and methodologies to identify,
assess, monitor and control risks.
— A Risk Appetite Policy which
British Business Investments is
subject to, however the British
Business Investment’s Board
approves the company’s own Risk
Appetite Statement.
— Risk governance based on the
‘three lines of defence’ model.
— A wide range of policies,
frameworks and procedures which
take account of regulatory or legal
requirement and industry best
practice.
The key operational risks the company
is exposed to are:
— Maintaining a suitably qualied
investment team and Board to
deliver the company’s investment
strategy
— Ensuring systems and processes
support investment decision
making, reporting and portfolio
management
— Procuring appropriate support
across a range of services from
the British Business Bank
including: nance, legal, risk, IT
and marketing.
The key nancial risks the company is
exposed to are detailed in note 13(iii)
of the accompanying nancial
statements.
Corporate governance
British Business Bank plc is the
ultimate parent of British Business
Bank Investments Limited and the
policies and procedures that apply to
the British Business Bank also apply
to British Business Investments (the
trading name of British Business Bank
Investments Limited). The British
Business Investment’s constitution
consists of its Articles of Association
and a shareholder relationship
framework document between British
Business Bank Investments Limited
and the British Business Bank plc (the
‘Framework Document’). It sets out,
among other things, British Business
Investment’s role within the group
including the responsibilities of Board
of Directors and the relationship
between British Business Investments
and the British Business Bank.
British Business Bank Investments Limited — Annual Report and Accounts 2017
Strategic report 23
Department for
Business, Energy &
Industrial Strategy
British Business Financial
Services Ltd
British Business
Finance Ltd
The Board of Directors
of the Company
The composition of the Board is set
out in the Directors’ Report on page
24. The Framework Document
requires that no more than one-third
of the Board may consist of members
of the British Business Bank Board.
It also provides that the consents of
both the British Business Bank and
Department for Business, Energy and
Industrial Strategy (BEIS) are required
prior to the appointment of any new
directors to the Board where the
appointee is external.
The CEO of the British Business Bank,
who is the accounting ocer, is the
Chair of the Board of British Business
Investments. He has direct
accountability to British Business
Investments ultimate shareholder,
BEIS. The responsibilities of an
Accounting Ocer include
responsibility for the propriety and
regularity of the public nances for
which the Accounting Ocer is
answerable, keeping proper records
and safeguarding British Business
Bank Investments assets.
Board Committees
The Board of Directors of British
Business Investments has been set
up along with Board level committees.
These are the Audit and Risk
Committee, the Nomination and
Remuneration Committee. British
Business Investments also has an
Investment Committee. To ensure
eective decision making there
are approved terms of reference
for each Committee.
Audit and Risk Committee
The Chair of the Audit and Risk
Committee is Francis Small. The Chief
Executive Ocer of British Business
Investments and Chief Finance
Ocer, Chief Risk Ocer, General
Counsel and Head of Internal Audit
of British Business Bank attend
Committee meetings. The Committee
also meets privately with both
internal and external audit.
Nomination and
Remuneration Committee
The Chair of the Nomination and
Remuneration Committee is Keith
Morgan. The other member is Sara
Halbard. The Committee meets
on an ad hoc basis to consider
remuneration, stang matters
and the nominations.
Investment Committee
The Chair of the Investment
Committee is Keith Morgan. The
other members of the Committee
are Catherine Lewis La Torre, Francis
Small and Sara Halbard. The Chief
Risk Ocer, the Chief Finance Ocer
and the General Counsel of British
Business Bank acting in their capacity
as approvers on behalf of British
Business Investments are required
to attend all meetings.
Catherine Lewis La Torre
Chief Executive Ocer
5 September 2017
British Business Bank Investments Limited — Annual Report and Accounts 2017
24 Directors’ report
Directors’
report
The directors present their Annual
Report on the aairs of the company,
together with the nancial statements
and auditor’s report, for the period
ended 31March2017.
The following information required by
the Companies Act 2006 can be found
in the following sections of the Annual
Report, which are incorporated by
reference into this report:
— A description of the principal
activities of the company during the
course of the period, an indication
of likely future developments in the
business and the key operational
and nancial risks the company is
exposed to are all included in the
Strategic Report.
— Details of signicant events since
the balance sheet date are
contained in note 17 to the
nancial statements.
— Information about the use of
nancial instruments by the
company is given in note 13 to
the nancial statements.
Dividends and reserves
The company paid dividends during
the period of £40m. A further
dividend of £25m is proposed but
not yet recognised in the accounts
for the year ended 31March2017.
Going concern
The directors have a reasonable
expectation that the company has
adequate resources to continue in
operational existence for the
foreseeable future. Thus, they
continue to adopt the going concern
basis in preparing the nancial
statements.
Further details can be found in the
principal accounting policies notes
in the nancial statements.
Directors
The directors who held oce during
the period were as follows:
— Keith Morgan (appointed 23July
2014) – Chairman
— Fiona-Jane MacGregor (appointed
30 October 2014)
— Paula Crofts (appointed as
alternate to Fiona-Jane MacGregor
for the period of 15December
2015 to 20June2016)
— Patrick Butler (appointed
13 November 2014 and resigned
31May2016)
— Francis Small (appointed 16June
2016)
— Sara Halbard (appointed 16June
2016)
— Catherine Lewis La Torre
(appointed 15 September 2016)
– Chief Executive Ocer
British Business Investments has
not made any political donations or
incurred any political expenditure
during the nancial year.
Appointment and removal
of directors
The Board of directors is responsible
for the appointments to the Board and
Committees.
Directors’ indemnities
The company has granted indemnities
to each of its directors in respect of all
losses arising out of, or in connection
with, the execution of their powers,
duties and responsibilities as directors
to the extent permitted by law and
the company’s Articles of Association.
Directors’ conrmations in
relation to the audit
Each of the persons who is a director
at the date of approval of this Annual
Report conrms that:
— so far as the director is aware,
there is no relevant audit
information of which the
company’s auditors are unaware
— the director has taken all the steps
that he/she ought to have taken
as a director in order to make
himself/ herself aware of any
relevant audit information and
to establish that the company’s
auditors are aware of that
information.
This conrmation is given and should
be interpreted in accordance with the
provisions of s418 of the Companies
Act 2006.
Approved by the Board of directors
Catherine Lewis La Torre
Chief Executive Ocer
5 September 2017
British Business Bank Investments Limited — Annual Report and Accounts 2017
25Statement of directors’ responsibilities
Statement
of Directors’
responsibilities
The directors are responsible for
preparing the Annual Report and the
nancial statements in accordance
with applicable law and regulations.
Under company law the directors
are required to prepare the nancial
statements in accordance with
recognised accounting standards.
The directors have chosen to adopt
International Financial Reporting
Standards (IFRSs) as adopted by the
European Union which is consistent
with the accounting treatment
adopted by the parent company.
Under company law the directors
must not approve the nancial
statements unless they are satised
that they give a true and fair view of
the state of aairs of the company
and of the prot or loss of the
company for that period. In preparing
these nancial statements, the
directors are required to:
— properly select and apply
accounting policies
— present information, including
accounting policies, in a manner
that provides relevant, reliable,
comparable and understandable
information
— provide additional disclosures
when compliance with the
specic requirements in IFRSs
are insucient to enable users
to understand the impact of
particular transactions, other
events and conditions on the
entity’s nancial position and
nancial performance
— make an assessment of the
company’s ability to continue
as a going concern.
The directors are responsible for
keeping adequate accounting records
that are sucient to show and explain
the company’s transactions and
disclose with reasonable accuracy at
any time the nancial position of the
company and enable them to ensure
that the nancial statements comply
with the Companies Act 2006. They
are also responsible for safeguarding
the assets of the company and hence
for taking reasonable steps for the
prevention and detection of fraud
and other irregularities.
The directors are responsible for
the maintenance and integrity of the
corporate and nancial information
included on the company’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of nancial statements
may dier from legislation in other
jurisdictions.
Directors’ responsibility
statement
We conrm that to the best of our
knowledge:
— the nancial statements, prepared
in accordance with International
Financial Reporting Standards as
adopted by the EU, give a true and
fair view of the assets, liabilities,
nancial position and prot or loss
of the company taken as a whole
— the Strategic Report includes 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
— the Annual Report and nancial
statements, taken as a whole, are
fair, balanced and understandable
and provide the information
necessary for shareholders to
assess the company’s performance,
business model and strategy.
By order of the Board
Catherine Lewis La Torre
Chief Executive Ocer
5 September 2017
British Business Bank Investments Limited — Annual Report and Accounts 2017
26 Independent Auditor’s Report
Independent
Auditor’s Report
To the members of British Business
Bank Investments Limited
I have audited the nancial statements
of British Business Bank Investments
Limited for the year ended 31 March
2017 which comprise the Income
Statement, Statement of Financial
Position, Statement of Changes
in Equity, Cash Flow Statement,
and the related notes. The nancial
reporting framework that has been
applied in their preparation is
applicable law and International
Financial Reporting Standards as
adopted by the European Union.
Respective responsibilities
of the directors and the
auditor
As explained more fully in the
Statement of Directors’
Responsibilities, the directors are
responsible for the preparation of the
nancial statements and for being
satised that they give a true and fair
view. My responsibility is to audit and
express an opinion on the nancial
statements in accordance with
applicable law and International
Standards on Auditing (UK and Ireland).
Those standards require me and my
sta to comply with the Auditing
Practices Board’s Ethical Standards
for Auditors.
Scope of the audit of the
nancial statements
An audit involves obtaining evidence
about the amounts and disclosures
in the nancial statements sucient
to give reasonable assurance that the
nancial statements are free from
material misstatement, whether
caused by fraud or error. This includes
an assessment of: whether the
accounting policies are appropriate
to the company’s circumstances and
have been consistently applied
and adequately disclosed; the
reasonableness of signicant
accounting estimates made by the
directors; and the overall presentation
of the nancial statements. In addition
I read all the nancial and non-nancial
information in the Annual Report to
identify material inconsistencies with
the audited nancial statements and
to identify any information that is
apparently materially incorrect based
on, or materially inconsistent with,
the knowledge acquired by me in
the course of performing the audit.
If I become aware of any apparent
material misstatements or
inconsistencies I consider the
implications for my report.
Opinion on nancial
statements
In my opinion:
— the nancial statements give a true
and fair view of the state of the
company’s aairs as at 31 March
2017 and of the prot for the year
then ended; and
— the nancial statements have been
properly prepared in accordance
with International Financial
Reporting Standards as adopted
by European Union; and
— the nancial statements have been
prepared in accordance with the
Companies Act 2006.
Opinion on other matters
prescribed by the
Companies Act 2006
In my opinion:
— The information given in the
Strategic and the Directors’ Report
for the nancial year for which the
nancial statements are prepared
is consistent with the nancial
statements and these reports have
been prepared in accordance with
the applicable legal requirements;
— In light of the knowledge and
understanding of the group and
the company and its environment
obtained in the course of the audit,
I have not identied any material
misstatements in the Strategic
Report or the Directors’ Report.
Matters on which I report
by exception
I have nothing to report in respect
of the following matters where the
Companies Act 2006 requires me
to report to you if, in my opinion:
— adequate accounting records have
not been kept by the company, or
returns adequate for my audit have
not been received from branches
not visited by my sta; or
— the nancial statements are not
in agreement with the accounting
records and returns; or
— certain disclosures of directors’
remuneration specied by law
are not made; or
— I have not received all of the
information and explanations
I require for my audit.
Hilary Lower
(Senior Statutory Auditor)
5 September 2017
For and on behalf of the
Comptroller and Auditor General
(Statutory Auditor)
National Audit Oce
157-197 Buckingham Palace Road
Victoria London SW1W 9SP
British Business Bank Investments Limited — Annual Report and Accounts 2017
27Financial statements
Financial
statements
For the year ended 31 March 2017
British Business Bank Investments Limited — Annual Report and Accounts 2017
28 Financial statements
Income statement
For the year ended 31 March 2017
2017 2016
Note £000 £000
INCOME
Fair value gain on investment assets designated at fair value
through prot or loss 7 59,184 45,145
Arrangement and other fees 1,324 336
Gross operating income 60,508 45,481
EXPENDITURE
Sta costs 4.1 (1,099) (970)
Purchase of goods and services (1,043) (1,092)
Management fee 5 (3,275) (3,408)
Operating expenditure (5,417) (5,470)
Net operating prot before tax 55,091 40,011
Tax 6.1 (11,481) (8,002)
Prot for the period 43,610 32,009
All operations are continuing.
The company has no other recognised gains and losses therefore no separate statement of other comprehensive income
has been presented.
An interim dividend of £19m in respect of the period ended 31 March 2017 was declared and paid on 8 February 2017
and a nal dividend of £24.61m in respect of that year is proposed and is not recognised in these accounts.
The notes on pages 32 to 46 form an integral part of the nancial statements.
British Business Bank Investments Limited — Annual Report and Accounts 2017
29Financial statements
Statement of nancial position
As at 31 March 2017
2017 2016
Note £000 £000
ASSETS
Non-current assets
Assets designated at fair value through prot or loss 7 946,098 702,914
Deferred tax asset 6.3 1 1
Total non-current assets 946,099 702,915
Current assets
Trade and other receivables 8 169 13,902
Cash and cash equivalents 9 9,579 3,388
Total current assets 9,748 17,290
Total assets 955,847 720,205
LIABILITIES
Current liabilities
Trade and other payables 10 (4,138) (5,389)
Corporation tax 6.2 (6,314) (5,911)
Total current liabilities (10,452) (11,300)
Total assets less current liabilities 945,395 708,905
Non-current liabilities
Trade and other payables 10 (21) –
Total liabilities (10,473) (11,300)
Net assets 945,374 708,905
Equity
Issued share capital 11 920,764 687,896
Retained earnings 12 24,610 21,009
Total equity 945,374 708,905
The nancial statements of the company (company number 09091930) were approved by the Board of directors
and authorised for issue on 5 September 2017. They were signed on its behalf by:
Catherine Lewis La Torre
Chief Executive Ocer
The notes on pages 32 to 46 form an integral part of the nancial statements.
British Business Bank Investments Limited — Annual Report and Accounts 2017
30 Financial statements
Statement of changes in equity
For the year ended 31 March 2017
Capital
Issued contribution Retained
capital reserve earnings Total
Notes £000 £000 £000 £000
Balance as at
31 March 2015 490,119 8,777 10,036 508,932
Prot after tax – – 32,009 32,009
Total comprehensive
income 11 – – 32,009 32,009
Issue of ordinary shares 189,000 – – 189,000
Capital contribution
converted to share
capital 12 8,777 (8,777) – 0
Dividends – – (21,036) (21,036)
Balance at
31 March 2016 687,896 – 21,009 708,905
Balance at
31 March 2016 687,896 – 21,009 708,905
Prot after tax – – 43,610 43,610
Total comprehensive
income – – 43,610 43,610
Issue of ordinary shares 11 232,868 – – 232,868
Dividends 16 – – (40,009) (40,009)
Balance at
31 March 2017 920,764 – 24,610 945,374
British Business Bank Investments Limited — Annual Report and Accounts 2017
31Financial statements
Cash ow statement
For the year ended 31 March 2017
2017 2016
Notes £000 £000
Prot before tax 55,091 40,011
Cash ows from operating activities
Adjustments for:
Net gain on investment assets 7 (59,184) (45,145)
Corporation tax paid 6.2 (11,078) (5,854)
Decrease/(increase) in trade and other receivables 8 13,733 (13,134)
(Decrease)/increase in trade and other payables 10 (1,230) 2,923
Net cash used in operating activities (2,668) (21,199)
Cash ows from investing activities
Financial assets transferred from HMG 7 – (36,437)
Investments in nancial assets 7 (293,727) (216,931)
Repayment of assets designated at fair value through
prot or loss 7 109,727 93,948
Net cash used in investing activities (184,000) (159,420)
Cash ows from nancing activities
Issue of new shares
1
11 232,868 189,000
Dividends paid to shareholder
1
16 (40,009) (21,036)
Net cash from nancing activities 192,859 167,964
Net increase in cash and cash equivalents 6,191 (12,655)
Cash and cash equivalents at beginning of the year 3,388 16,043
Cash and cash equivalents at end of the year 9,579 3,388
1
The payment of dividends to the shareholder was funded by the issue of new shares and these two transactions were
settled on a net basis.
The notes on pages 32 to 46 form an integral part of the nancial statements.
British Business Bank Investments Limited — Annual Report and Accounts 2017
32 Financial statements
Notes to the nancial statements
As at 31 March 2017
1. General information
British Business Bank Investments
Ltd (the Company) is a company
incorporated in the United Kingdom
under the Companies Act. The
address of the registered oce is
Foundry House, 3 Millsands, Sheeld,
S3 8NH. The nature of the company’s
operations and its principal activities
are set out in the Strategic Report on
pages 6 to 23.
2. Signicant
accounting policies
Basis of accounting
The nancial statements have been
prepared in accordance with
International Financial Reporting
Standards (IFRSs) as adopted by the
European Union (IFRSs as adopted
by the EU), IFRIC Interpretations and
those parts of the Companies Act
2006 applicable to companies
reporting under IFRS. The nancial
statements are prepared in
accordance with IFRS and
Interpretations in force at the
reporting date.
The nancial statements have been
prepared on the historical cost basis,
except for the revaluation of certain
nancial instruments and non-
nancial assets that are measured
at fair values at the end of each
reporting period, as explained in the
accounting policies below. Historical
cost is generally based on the fair
value of the consideration given in
exchange for goods and services. The
principal accounting policies adopted
are set out below.
The company is classied as an
investment company under IFRS 10
and shows investments at fair value
through prot and loss (FVTPL). The
Directors have decided that this is
the correct classication having
determined that it meets the three
criteria required under IFRS 10 in that
the Company:
— Obtains funds from one or more
investors for the purpose of
providing those investor(s) with
investment management services;
— Its aim is to earn a commercial
return through its investments;
— It measures the performance of
substantially all of its investments
on a fair value basis.
These nancial statements are
presented in pounds sterling because
that is the currency of the primary
economic environment in which the
company operates.
Going concern
The Company’s business activities,
together with the factors likely to
aect its future development and
position are set out in the Strategic
Report on pages 6 to 23.
The Directors have, at the time of
approving the nancial statements,
a reasonable expectation that the
company has adequate resources to
continue in operational existence for
the foreseeable future. In arriving at
that view they have assumed that in
the event of a downturn the parent
company and the ultimate controlling
party, the Secretary of State for the
Department for Business, Energy and
Industrial Strategy, will continue to
support the Company. Thus they
continue to adopt the going concern
basis of accounting in preparing the
nancial statements.
Adoption of new and
revised Standards
There were no new or amended
standards applied for the rst time
and therefore no restatements of
the previous nancial statements
required.
At the date of authorisation of these
nancial statements, the following
Standards and Interpretations which
have not been applied in these
nancial statements were in issue but
not yet eective (and in some cases
had not yet been adopted by the EU):
— IFRS 2 (amendments) Classication
and Measurement of Share-based
Payment Transactions;
— IFRS 9 Financial Instruments;
— IFRS 10 and IAS 28 (amendments)
Sale or Contribution of Assets
between an Investor and its
Associate or Joint Venture;
— IFRS 14 Regulatory Deferral
Accounts;
— IFRS 15 Revenue from Contracts
with Customers;
— IFRS 16 Leases;
— Annual Improvements to IFRSs
2014 – 2016 Cycle;
— IAS 7 (amendments) Statement
of Cash Flows;
— IAS 12 (amendments) Recognition
of Deferred Tax Assets for
Unrealised Losses;
— IAS 40 (amendments) Transfers
of Investment Property;
— IFRIC 22 Foreign Currency
Transactions and Advance
Consideration.
British Business Bank Investments Limited — Annual Report and Accounts 2017
33Financial statements
The Directors do not expect that
the adoption of the Standards and
Interpretations listed above will have
a material impact on the nancial
statements of the company in future
years, except that IFRS 9 will impact
the disclosures of nancial
instruments. During the year, the
Directors have determined the
company will adopt IFRS 9 for the year
ending 31 March 2019 and are in the
process of undertaking a detailed
review of the impact of the Standard.
Until this detailed review has been
completed it is not possible to provide
a reasonable estimate of the eect on
the Company’s nancial statements.
Income recognition
Income is measured as the change in
fair value of the investment portfolio,
adjusted for any additional
investments or disposals plus any
consideration received or receivable
for goods and services provided in
the normal course of business, net
of discounts, Value Added Tax (VAT)
and other sales-related taxes.
Taxation
The tax expense represents the sum
of the tax currently payable and
deferred tax.
The tax currently payable is based
on taxable prot for the year. Taxable
prot diers from net prot as
reported in the Income Statement
because it excludes items of income
or expense that are taxable or
deductible in other years and it
further excludes items that are never
taxable or deductible. The Company’s
liability for current tax is calculated
using tax rates that have been
enacted or substantively enacted
by the balance sheet date.
Deferred tax is the tax expected to be
payable or recoverable on dierences
between the carrying amounts of
assets and liabilities in the nancial
statements and the corresponding
tax bases used in the computation
of taxable prot, and is accounted
for using the balance sheet liability
method. Deferred tax liabilities are
generally recognised for all taxable
temporary dierences and deferred
tax assets are recognised to the
extent that it is probable that taxable
prots will be available against which
deductible temporary dierences can
be utilised.
Current and deferred tax is
recognised in prot or loss, except
when it relates to items that are
recognised in other comprehensive
income or directly in equity, in which
case, the tax is also recognised in
other comprehensive income or
directly in equity respectively.
VAT is accounted for in the results,
in that amounts are shown net of
VAT except:
— Irrecoverable VAT is charged to the
Income Statement, and included
under the relevant expenditure
heading;
— Irrecoverable VAT on the purchase
of an asset is included in additions.
The net amount due to, or from,
HMRevenue and Customs in respect
of VAT is included within payables
and receivables on the Statement
of Financial Position.
Financial instruments
(i) Classication
The company has designated its
investments on initial recognition as
nancial assets at fair value through
prot or loss.
Financial assets that are not at fair
value through prot or loss include
cash and cash equivalents and other
receivables which are accounted for
as loans and receivables. Financial
liabilities that are not at fair value
through prot or loss include short
term nancing and other payables
which are accounted for as liabilities
held at amortised cost.
(ii) Recognition
The company initially recognises
nancial assets or liabilities on the
trade date at which it becomes a
party to the contractual provisions
of the instrument. From this date, any
gains and losses arising from changes
in fair value of the instruments are
recognised in the Income Statement.
(iii) Measurement
Financial instruments are measured
initially at fair value. For nancial
assets acquired, cost is the fair value
of the consideration paid, while for
nancial liabilities fair value is equal
to the consideration paid. Transaction
costs on nancial assets and nancial
liabilities at fair value through prot
or loss are expensed immediately.
Subsequent to initial recognition,
all instruments classied at fair value
through prot or loss are measured
at fair value with changes in their
fair value recognised in the Income
Statement. The net gain or loss
recognised in prot or loss
incorporates any dividend or interest
earned on the nancial asset.
De-recognition of nancial assets
The company de-recognises a
nancial asset only when the
contractual rights to the cash ows
from the asset expire, or when it
transfers the nancial asset and
substantially all the risks and rewards
of ownership of the asset to another
entity. If the company neither
transfers nor retains substantially
all the risks and rewards of ownership
and continues to control the
transferred asset, the company
recognises its retained interest in
the asset and an associated liability
for amounts it may have to pay. If the
company retains substantially all the
risks and rewards of ownership of
a transferred nancial asset, the
company continues to recognise the
nancial asset and also recognises
a collateralised borrowing for the
proceeds received.
British Business Bank Investments Limited — Annual Report and Accounts 2017
34 Financial statements
Financial liabilities and equity
Debt and equity instruments are
classied as either nancial liabilities
or as equity in accordance with the
substance of the contractual
arrangement. The only nancial
liabilities held by the company are
trade and other payables.
Cash and cash equivalents
Cash and cash equivalents comprise
cash in hand and current balances
with banks and other nancial
institutions, which are readily
convertible to known amounts of
cash and which are subject to
insignicant risk of changes in value
and have an original maturity of
three months or less.
Foreign exchange
The company applies IAS 21 The
Eects of Changes in Foreign
Exchange Rates and transactions that
are denominated in a foreign currency
are translated into sterling at the rate
of exchange ruling on the date of
each transaction, except where rates
do not uctuate signicantly, in which
case an average rate for a period is
used. Monetary assets and liabilities
denominated in foreign currencies as
at the balance sheet date are
retranslated at the rates of exchange
ruling at that date.
Provisions
Provisions are recognised when the
company has a present obligation
(legal or constructive) as a result of
a past event, it is probable that the
company will be required to settle
that obligation and a reliable estimate
can be made of the amount of the
obligation.
The amount recognised as a
provision is the best estimate of
the consideration required to settle
the present obligation at the balance
sheet date, taking into account the
risks and uncertainties surrounding
the obligation. Where a provision is
measured using the cash ows
estimated to settle the present
obligation, its carrying amount is the
present value of those cash ows
(when the eect of the time value
of money is material).
When some or all of the economic
benets required to settle a provision
are expected to be recovered from a
third party, a receivable is recognised
as an asset if it is virtually certain that
reimbursement will be received and
the amount of the receivable can be
measured reliably.
Retirement benet costs
Payments to dened contribution
retirement benet schemes are
recognised as an expense when
employees have rendered service
entitling them to the contributions.
Employee benets
In accordance with IAS 19 Employee
Benets, the company recognises
short term employee benets when
an employee has rendered service
in exchange for those benets.
3. Critical accounting
judgements and key
sources of estimation
uncertainty
In the application of the Company’s
accounting policies, which are
described in note 2, the Directors
are required to make judgements,
estimates and assumptions about
the carrying amounts of assets and
liabilities that are not readily apparent
from other sources. The estimates
and associated assumptions are
based on historical experience,
industry standard practice and other
factors that are considered to be
relevant. Actual results may dier
from these estimates.
The estimates and underlying
assumptions are reviewed on an
ongoing basis. Revisions to accounting
estimates are recognised in the period
in which the estimate is revised if the
revision aects only that period, or in
the period of the revision and future
periods if the revision aects current
and future periods.
The estimates and assumptions that
risk causing a material adjustment to
the carrying amounts of assets and
liabilities within the next nancial
year are:
— Fluctuations in the fair values of
assets designated as at fair value
through prot or loss, where
reported net asset values and
other valuation models and
techniques are used to determine
estimated future cash ows, and
include a number of other
assumptions;
— Directors’ judgements with regard
to the impairment of assets.
British Business Bank Investments Limited — Annual Report and Accounts 2017
35Financial statements
4. Sta numbers, sta costs and directors’ remuneration
4.1 Sta numbers and sta costs
The average monthly number of employees (including executive directors) was:
2017 2016
Number Number
Permanent sta 10 10
Total 10 10
2017 2016
£000 £000
Aggregate remuneration comprised
Wages and salaries – permanent sta 770 726
Wages and salaries – temporary and agency sta 8 6
Short and Long-Term Incentive Plans and bonus scheme 109 54
Social security costs 106 104
Pension costs 106 80
1,099 970
The Company’s three incentive plans (long-term Incentive Plan, the short-term Incentive Plan and the annual bonus
scheme) are managed on a group-wide basis by the British Business Bank plc. Further details are set out in the British
Business Bank’s annual report and accounts.
British Business Bank Investments Limited — Annual Report and Accounts 2017
36 Financial statements
4.2 Directors’ remuneration
This note refers to the Directors of the company who have been appointed at Companies House.
Directors’ remuneration during the year was £198,000 (2016: £165,000). Remuneration for the highest paid director
during the year was £158,000 (2016: £140,000).
Executive Directors’ remuneration
Catherine Lewis La Torre received salary of £122,000 (the annual equivalent being £210,000 p.a.). In addition she received
pension contributions of £12,000 and taxable benets equivalent to £nil. She also participates in the British Business
Bank plc Long Term Incentive Plan (LTIP) and in the year under review was granted awards with a maximum potential
value of £24,000. Any payments made under the LTIP will be determined by the Remuneration Committee at their
discretion and are dependent on personal and corporate performance over a three-year period ending 31 March 2019.
Non-executive Directors’ remuneration
Non-executive Directors’ remuneration for 2016 and 2017 (£000) is made up as follows:
2017
2016
Total fees Annual equivalent Total fees
Keith Morgan – – –
Fiona-Jane MacGregor – – –
Paula Crofts (resigned 20 June 2016) – – –
Patrick Butler (resigned 31 May 2016) 4 25 25
Sara Halbard (appointed 16 June 2016) 16 20 n/a
Francis Small (appointed 16 June 2016) 20 25 n/a
Totals 40 70 25
Fees for services as Director of the company are £20,000 per annum. In addition a fee of £5,000 per annum is paid to
the chair of the Company’s audit and risk committee.
Keith Morgan is paid directly by the Company’s parent company and costs of services provided by British Business Bank
plc are recharged to the company in the form of a management charge.
Fiona-Jane MacGregor and Paula Crofts are paid by the Department for Business, Energy and Industrial Strategy (BEIS).
Fiona-Jane MacGregor returned from maternity leave during the year and therefore Paula Crofts stepped down from
the Board. The cost of services are not recharged to the Company.
No post-employment benets, termination benets or share based payments were made to Directors in the year
(2016: none).
5. Operating costs
Purchase of goods and services
Auditor’s remuneration of £42k (2016: £49k), which is included within ‘Purchase of goods and services’ relates to fees
payable for the audit of the Company’s annual accounts. The Company’s auditors did not provide any non-audit services.
2017 2016
£000 £000
Management Fee
Allocated sta costs 2,338 2,364
Allocated purchase of goods and services 937 1,044
Total 3,275 3,408
Allocated sta costs and allocated purchase of goods and services relates to recharges paid by the company to its parent,
the British Business Bank plc for the shared services provided. Allocated sta costs include an allocation of the parent
company’s legal, nancial, IT, risk management, corporate services, communications, and senior management costs.
British Business Bank Investments Limited — Annual Report and Accounts 2017
39Financial statements
Transactions and movements 2016/17
Balance at Balance at
31 March 31 March
2016 Additions Repayment Revaluation 2017
£000 £000 £000 £000 £000
BFP Mid Cap 499,641 124,716 (71,233) 33,948 587,072
BFP Small Cap 39,741 8,214 (11,060) 3,253 40,148
Investment Programme 148,503 151,327 (27,375) 16,901 289,356
VC Catalyst 15,029 9,470 (59) 5,082 29,522
Total 702,914 293,727 (109,727) 59,184 946,098
Transactions and movements 2015/16
Balance at Acquisitions Balance at
31 March From HM 31 March
2015 Additions Government Repayment Revaluation 2016
£000 £000 £000 £000 £000 £000
BFP Mid Cap 426,029 112,837 – (72,040) 32,815 499,641
BFP Small Cap 28,469 10,775 8,289 (11,735) 3,943 39,741
Investment Programme 38,487 83,530 28,148 (9,774) 8,112 148,503
VC Catalyst 5,364 9,789 – (399) 275 15,029
Total 498,349 216,931 36,437 (93,948) 45,145 702,914
Capital commitments
The company had the following undrawn commitments at the balance sheet date in relation to its existing
investment portfolio:
2017 2016
£000 £000
BFP Mid Cap 283,885 222,451
BFP Small Cap 9,786 11,971
Investment Programme 282,236 256,782
VC Catalyst 58,874 54,609
634,781 545,813
British Business Bank Investments Limited — Annual Report and Accounts 2017
38 Financial statements
7. Investments
All of the Company’s investments
have been designated at fair value
through the prot or loss. This note
provides further details on each
investment and its value at the
balance sheet date.
Business Finance
Partnership
The company manages the Business
Finance Partnership (BFP)
programme.
The Business Finance Partnership has
two strands. The rst strand is the
BFP Mid Cap which invests in funds,
or funds managed by fund managers
on commercial terms alongside
private sector investors which are
focussed on lending to medium-sized
businesses operating in the UK with
turnover of up to £500million.
The second strand is the BFP Small
Cap Tranche which invests in debt
funds and non-bank lenders on
commercial terms alongside private
sector investors that provide an
alternative source of lending for small
businesses operating in the UK with
turnover up to £75million.
Through an invoice discount rm,
British Business Bank Investments Ltd
purchases invoices from investors,
releasing money that would otherwise
be tied up for between 30 and 120
days. It also provides funding through
peer to peer lending platforms making
small part-loans to borrowers
alongside other platform lenders.
Investment Programme
The company manages the
Investment Programme. It makes
commercial investments that
stimulate at least the same amount
of investment from the private sector,
encouraging new lenders in to the
SME nance market and the growth of
smaller lenders. As with the BFP Small
Cap this programme has provided
invoice discount nance participated
in peer to peer lending and in addition
provided other credit facilities
British Business Bank Investments Ltd
participated in a public issue of Tier 2
capital by Shawbrook Bank plc which
issued xed rate reset callable
subordinated loan notes with an initial
semi-annual coupon of 8½%. The
issue was listed on the London Stock
Exchange on 28th October 2015.
VC Catalyst
The VC Catalyst programme invests
in commercially viable venture capital
funds that might otherwise fail to
reach a satisfactory ‘rst close’, after
which point other investors may be
ready to step in, or to archive an
optimal fund size that will allow the
manager to eectively execute the
planned investment strategy. It
enables private sector investment
already committed to those funds to
be unlocked and invested in growth
companies.
Assets designated at fair
value through prot or loss
The designation of nancial assets
as at fair value through prot or loss
is consistent with the Company’s
documented risk management and
investment strategy. The Company’s
investment asset portfolio is
managed and its performance is
evaluated by the Company’s key
management personnel on a fair
value basis.
British Business Bank Investments Limited — Annual Report and Accounts 2017
37Financial statements
6. Taxation
6.1 Tax expense
2017 2016
£000 £000
Current tax expense
Current year 11,018 7,986
Adjustment in respect of prior year 463 –
Total current tax expense 11,481 7,986
Deferred tax expense
Current period – 16
Total deferred tax expense – 16
Total tax expense 11,481 8,002
Current corporation tax
Corporation tax is calculated at 20% (2016: 20%) of the estimated taxable prot for the year. The table below reconciles
the current tax expense for the year:
2017 2016
£000 £000
Net operating prot before tax 55,091 40,011
Tax at standard rate of corporation tax in the UK of 20%
(2016 – 20%) 11,018 8,002
Adjustment in respect of prior year 463 –
Short term timing dierences relating to prot related pay – (16)
Total current tax expense 11,481 7,986
Deferred corporation tax
A deferred tax rate of 17% has been used for 2017 (2016: 18%). This is on the basis that the timing dierences are likely
to unwind when the rate of corporation tax is due to have fallen to this level.
The deferred tax income is entirely due to short term timing dierences.
6. 2 Corporation tax payable
2017 2016
£000 £000
Corporation tax payable at 31 March 2016 5,911 3,779
Tax expense for the year 11,481 7,986
Tax p aid (11,078) (5,854)
Corporation tax payable at 31 March 2017 6,314 5,911
6.3 Deferred tax asset
2017 2016
£000 £000
Deferred tax asset at 31 March 2016 1 17
Movement in the year – (16)
Deferred tax asset at 31 March 2017 1 1
British Business Bank Investments Limited — Annual Report and Accounts 2017
40 Financial statements
8. Trade and other receivables
2017 2016
£000 £000
Amounts receivable within one year
Trade receivables 25 13,802
Amounts owed by group undertakings 144 100
169 13,902
Trade receivables disclosed above are classied as loans and receivables and are therefore measured at amortised cost.
The trade receivables balance at 31 March 2016 included £12.3m of cash in transit that had been paid to acquire assets
but where the cash had not been received by the counterparty.
There were no amounts which are past due at the reporting date. No impairment was recognised against the trade and
other receivables as at the reporting date.
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
9. Cash and cash equivalents
2017 2016
£000 £000
Held with the Government Banking Service 3,298 1,286
Held in commercial bank accounts 6,281 2,102
9,579 3,388
10. Trade and other payables
2017 2016
£000 £000
Amounts falling due within one year
Trade payables 3 4
VAT and social security 24 410
Accrued expenditure 391 343
Amounts owed to group undertakings 3,572 4,158
Other payables 148 474
4,138 5,389
Amounts falling due after more than one year
Accrued expenditure 21 –
21 –
The Directors consider that the carrying amount of trade payables approximates to their fair value.
British Business Bank Investments Limited — Annual Report and Accounts 2017
41Financial statements
11. Share capital
2017
No.
Authorised: ordinary shares of £1 each 920,764,280
2017
£000
Issued and fully paid ordinary shares of £1 each:
At 31 March 2015 490,119
Shares issued for cash 189,000
Capital contribution reserve converted to share capital 8,777
At 31 March 2016 687,896
Shares issued for cash 232,868
At 31 March 2017 920,764
The company has one class of ordinary shares which carry no right to xed income.
12. Reserves
2016/17
Retained
earnings
£000
Opening balance 31 March 2016 21,009
Dividends paid (40,009)
Prot for the year 43,610
Balance at 31 March 2017 24,610
2015/16
Capital
contribution Retained
reserve earnings
£000 £000
Opening balance 31 March 2015 8,777 10,036
Capital contribution reserve converted to share capital (8,777) –
Dividends paid – (21,036)
Prot for the year – 32,009
Balance at 31 March 2016 – 21,009
British Business Bank Investments Limited — Annual Report and Accounts 2017
42 Financial statements
13. Financial instruments
(i) Categories of nancial instruments
The following table analyses the Company’s nancial assets and liabilities in accordance with the categories of nancial
instruments in IAS 39 Financial Instruments, Recognition and Measurement. Assets and liabilities outside the scope of
IAS 39 are shown separately.
At 31 March 2017
Non-
Liabilities nancial
Assets Loans held at assets
held at and amortised and
FVTPL receivables cost liabilities Total
Note £000 £000 £000 £000 £000
Assets
Designated at FVTPL 7 946,098 – – – 946,098
Trade and other receivables 8 – 169 – – 169
Deferred tax 6 – – – 1 1
Cash and cash equivalents 9 – 9,579 – – 9,579
Total assets 946,098 9,748 – 1 955,847
Liabilities
Trade and other payables 10 – – (4,159) – (4,159)
Corporation tax 6 – – – (6,314) (6,314)
Total liabilities – – (4,159) (6,314) (10,473)
Net assets 946,098 9,748 (4,159) (6,313) 945,374
At 31 March 2016
Non-
Liabilities nancial
Assets Loans held at assets
held at and amortised and
FVTPL receivables cost liabilities Total
Note £000 £000 £000 £000 £000
Assets
Designated at FVTPL 7 702,914 – – – 702,914
Trade and other receivables 8 – 13,902 – – 13,902
Deferred tax 6 – – – 1 1
Cash and cash equivalents 9 – 3,388 – – 3,388
Total assets 702,914 17,290 – 1 720,205
Liabilities
Trade and other payables 10 – – (5,389) – (5,389)
Corporation tax 6 – – – (5,911) (5,911)
Total liabilities – – (5,389) (5,911) (11,300)
Net assets 702,914 17,290 (5,389) (5,910) 708,905
British Business Bank Investments Limited — Annual Report and Accounts 2017
43Financial statements
(ii) Fair value measurements
The investment portfolio consists
of assets designated at fair value
through prot or loss where fair value
is measured on a recurring basis.
Fair value is the price that would be
received to sell an asset or paid to
transfer a liability in an orderly
transaction between market
participants at the measurement
date, regardless of whether that price
is directly observable or estimated
using another valuation technique.
The Company has designated certain
investments that are classied under
IAS 39 as loans and receivables as at
fair value through prot or loss. The
amount of loans and receivables
designated as at fair value through
prot or loss at the year end is £138m
(2016: £73m). The Company at year
end holds collateral of £52m which
reduces the exposure to credit risk
to £86m.
For all investment assets, the
investment valuation, a net asset
valuation (NAV), which is determined
by investment managers on a fair
value basis or is determined by
quoted prices in an active market.
The Directors review the investment
valuation reports periodically and are
satised with the year-end valuations
presented in the nancial statements.
Subsequent to initial recognition,
all instruments classied at fair value
through prot or loss are measured
at fair value with changes in their
fair value recognised in the Income
Statement. The net gain or loss
recognised in prot or loss
incorporates any dividend or interest
earned on the nancial asset.
For nancial reporting purposes, fair
value measurements are categorised
into Level 1, 2 or 3 based on the degree
to which the inputs to the fair value
measurements are observable and the
signicance of the inputs to the fair
value measurement in its entirety,
which are described as follows:
Level 1 – fair value measurements are
those derived from quoted
prices (unadjusted) in active
markets;
Level 2 – fair value measurements are
those derived from inputs
other than quoted prices
included within Level 1 that
are observable for the asset
or liability, either directly (i.e.
as prices) or indirectly (i.e.
derived from prices); and
Level 3 – fair value measurements are
those derived from valuation
techniques that include
inputs for the asset or
liability that are not based
on observable market data
(unobservable inputs).
The level in the fair value hierarchy
within which the fair value
measurement is categorised in its
entirety is determined by the lowest
level input that is signicant to the
fair value measurement in its entirety.
The company has one Investment
Programme investment that is
considered to be level 1. This is an
investment in xed rate reset callable
subordinated loan notes with an
initial semi-annual coupon of 8½%
issued by Shawbrook Bank plc.
For the period covered by these
accounts all other nancial
investments are considered level 3.
Financial instruments classied
within level 3 have signicant
unobservable inputs and include
term loans and investments in
private funds. As observable prices
are not available for these nancial
instruments, the company has
applied the following valuations.
— Investments in third party private
debt funds and venture capital
funds are valued based on the net
asset value reported by the fund
manager for the relevant date
provided the valuation approach
is recognised as industry standard
for example International Private
Equity and Venture Capital
Association (IPEVCA) guidelines.
— Loans are valued at their par value,
plus any accrued but unpaid
interest, less any adjustments
deemed appropriate.
(iii) Financial risk
management
The company has exposure to a
number of nancial risks through
the conduct of its operations.
This note presents information about
the nature and extent of risks arising
from the nancial instruments.
The company has exposure to the
following risks from its use of
nancial instruments:
— Credit risk
— Market risk
Liquidity risk is not deemed relevant
for the Company.
Credit risk
Credit risk is the risk of a loss due to the
failure of a counterparty of a nancial
instrument to meet its obligations to
pay the company in accordance with
agreed terms, or due to the risk of loss
due to inappropriate investment
decisions. Credit risk also includes
settlement risk when a counter party
fails to settle their side of a transaction
and concentration risk. The Company’s
credit risk is also inuenced by general
macroeconomic conditions.
Credit risk may arise in any of the
Company’s assets where there is the
potential for default which includes
the investments with a contractual
repayment.
British Business Bank Investments Limited — Annual Report and Accounts 2017
44 Financial statements
The degree to which the company
is exposed to credit risk depends on
the individual characteristics of the
contract counterparty and the nature
of the investment. The amount of
exposure, before taking into account
any collateral or security, in each
class of nancial asset is limited
to the amount invested at any given
point in time. At 31 March 2017,
the Company holds collateral for
£52million of investments in
the Investment Programme.
For some debt investments
appropriate collateral is held. The
nature of collateral may change over
time depending on the investments
which the company holds in any given
period. The concentration of credit
risk is limited due to the investment
base being large and spread across
the Company’s operating segments.
Accordingly, the Directors believe
that there is no further credit
provision required in excess of the
provision for impairment losses
and the specic provision for credit
losses detailed below.
Credit risk assessment is carried out
as part of the investment approval
process and is revisited on an ongoing
basis as part of the Company’s
portfolio management process.
In determining fair value the company
has made provision against the value
of certain investments, those being
receivables purchased through an
invoice discounter and part-loans to
borrowers that are made alongside
other platform lenders, in accordance
with its provisioning policy. The basis
of provisioning is dierent for the
dierent categories of investments.
In determining the recoverability
of the amounts receivable, the
company considers past performance
of recoveries.
With respect to receivables
purchased through an invoice
discounter the company provides
for all debts which are overdue by 90
days at a rate of 100% of the average
overdue balance over the previous
three months. In addition it makes
100% provision for all receivables in
respect of which there is a known or
expected problem in collection even
if payment is not overdue by 90 days.
At 31 March 2017 the gross value
of receivables purchased through
an invoice discounter was £4.3m
of which £222,000 was overdue
and fully provided.
The company makes provision for all
part-loans made to borrowers made
alongside other platform lenders
which are overdue by 90 days at a
rate of 100%. At 31 March 2017 the
gross value of such receivables was
£50.7m of which £2,596,000 was
overdue by 90 days and fully provided.
No other repayments in respect of
the Company’s nancial instruments
were overdue at the balance sheet
date.
Market risk
Market risk is the risk of a loss of
earnings or economic value due to
adverse changes in nancial market
prices, such as interest rates, foreign
exchange rates or equity prices.
The company will identify market risk
arising from an inability to exit an
investment within the intended
time frame.
Interest rate risk
The company’s investments include
a combination of xed and variable
rate loans. Interest rate risk is
regularly monitored to ensure that
the mix of variable and xed rate
borrowing is appropriate. The
company does not use derivatives
to hedge interest rate risk.
LIBOR sensitivity of the investments
is as follows:
— The impact of a 1 percentage
point increase in the interest
rate applicable to company
investments would be an
approximate increase in income
of £8m over a one year period.
— The impact of a 0.25 percentage
point decrease in the interest
reference rate applicable to
investments would be an
approximate decrease in income
of £1m over a one year period.
Larger decreases would be
mitigated by a signicant element
of LIBOR oors.
Currency risk
The company does not have material
exposure to currency risk as the
company primarily invests in its
functional currency, pounds sterling.
There are some investments in funds
which have a Europe-wide
investment mandate, and are
denominated in Euros. A prerequisite
of these funds is that they invest into
the UK at a fund level a larger amount
than our nancial investment. Less
than 6% of the company’s portfolio
is in non-GBP denominated
investments. There is currently no
policy to hedge this currency risk.
Liquidity risk
Liquidity risk is the risk that an entity
does not have sucient nancial
resources in the short term to meet
its obligations as they fall due, or its
strategy is constrained by inadequate
or inappropriate funding sources.
Liquidity risk is not deemed
signicantly relevant to the company
as it is part of the British Business
Bank plc group which is 100%
Government funded, with all
programmes pre-approved and
committed to, and it does not have
a leveraged balance sheet.
British Business Bank Investments Limited — Annual Report and Accounts 2017
45Financial statements
14. Related party transactions
There were no operational transactions with related parties during the year other than companies within the British
Business Bank plc group. British Business Bank Investments Limited entered into transactions with the following group
companies:
2017 2016
£000 £000
Income
British Business Financial Services Limited – 100
– 100
Expenditure
British Business Bank plc 3,154 3,408
British Business Finance Limited 121 125
3,275 3,533
Amounts outstanding at year end
As at the balance sheet date, British Business Bank Investments Limited had debts outstanding and receivable with
the following group companies:
2017 2016
£000 £000
Receivable
British Business Financial Services Limited 100 100
British Business Bank plc 44 –
144 100
2017 2016
£000 £000
Payable
British Business Bank plc 2,503 4,148
British Business Finance Limited 1,069 10
3,572 4,158
Key management personnel compensation is disclosed in note 4.2
British Business Bank Investments Limited — Annual Report and Accounts 2017
46 Financial statements
15. Signicant undertakings
British Business Bank Investments Ltd has the following signicant holdings in undertakings.
Class of share Proportion
Country in held by the held by the
which it is British Business Bank British Business Bank
Name incorporated Investments Limited Investments Limited
BMS Finance S.A.R.L.
Registered address:
55 Avenue Pasteur, L-2311, Luxembourg Luxembourg Not classied 49.8%
Industrial Lending 1 (Boost Fund)
Registered address:
6 Rue Adolphe, L-1116, Luxembourg Luxembourg Class A shares 46.6%
Pricoa Sterling Corporate Bond Fund
1
Registered address:
70 Sir John Rogerson’s Quay,
Dublin 2, Ireland Ireland Not classied 67.7%
Urica Capital Limited
2
Registered address:
PO Box 1075, 9 Castle Street, St Helier,
Jersey, Channel Islands, JE4 2QP Jersey Not classied 50.0%
Muzinich UK Private Debt Fund
Registered address:
49 Avenue J.F.K, L-1855, Luxembourg Luxembourg Not classied 21.0%
1
Pricoa’s latest nancial year end was 30 June 2017. The fund does not produce separate accounts and therefore gures
for the fund are not available.
2
Urica’s latest nancial year end was 30 June 2017. At the balance sheet date it had not published account in respect of
that year. As at 30 June 2016, its aggregate amount of capital and reserves was £6,999,129 and during its nancial year
it made a prot of £70,479.
16. Dividends
On 6 September 2016 a dividend of £21,009,000 (3.054096p per share) was declared and paid to the ordinary
shareholders. A dividend of £19,000,000 (2.063504p per share) was declared on 8 February 2017 and paid to the
ordinary shareholders in the year.
A nal dividend of £24,610,000 (2.672780p per share) is proposed but not recognised in the accounts for the year ended
31 March 2017.
17. Events after the reporting date
As at the date of these annual report and accounts, there have been no post reporting date events that require
disclosure.
18. Controlling party
In the opinion of the Directors, the Company’s parent company is the British Business Bank plc and ultimate controlling
party is the British Business Bank plc’s shareholder, the Secretary of State for the Department for Business, Energy and
Industrial Strategy. The consolidated nancial statements of the Department for Business, Energy and Industrial Strategy
are available from the government departments’ website at GOV.UK. Copies of the group nancial statements of the
British Business Bank plc are available from Companies House, Crown Way, Maindy, Cardi CF14 3UZ.
British Business Bank Investments Limited — Annual Report and Accounts 2017
Design: red-stone.com
Photography (except cover): Tom Donald
© British Business Bank Investments Ltd September 2017
All gures source British Business Bank Investments Ltd 31 March 2017 unless otherwise stated.
This publication is available from bbbinv.co.uk
Any enquiries regarding this publication should be sent to:
British Business Bank Investments Ltd
Foundry House
3 Millsands
Sheeld S3 8NH
British Business Bank Investments Ltd is a wholly owned subsidiary of British Business Bank plc, registered in England and Wales, registration number
09091930, registered oce at Foundry House, 3 Millsands, Sheeld, S3 8NH. It is not authorised or regulated by the Prudential Regulation Authority (PRA)
or the Financial Conduct Authority (FCA). British Business Bank plc is a public limited company registered in England and Wales registration number
08616013, registered oce at Foundry House, 3 Millsands, Sheeld, S3 8NH. As the holding company of the group operating under the trading name of
British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the PRA or FCA. British Business
Bank plc and its subsidiary entities are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc
and its subsidiaries can be found at www.british-business-bank.co.uk
