THE BIOTECH GROWTH TRUST PLC - Final Results

PR Newswire
London, May 22
                     THE BIOTECH GROWTH TRUST PLC               Audited Results for the Year Ended 31 March 2014                                 NEWS RELEASE                             For immediate release                                  22 May 2014                               To: City EditorsThe Biotech Growth Trust PLC today announces audited results for the year ended                                 31 March 2014                                          About The Biotech Growth Trust PLC                                          The Biotech Growth Trust PLC seeks                                          capital appreciation through                                          investment in the worldwide                                          biotechnology industry. In order to                                          achieve its investment objective, the                                          Company invests in a diversified                                          portfolio of shares and related                                          securities in biotechnology companies                                          on a worldwide basis.                                          Further details of the Company's                                          investment policy are set out within                                          this announcement.                                          Keep up to date with                                          The Biotech Growth Trust PLC                                          For more information about                                          The Biotech Growth Trust PLC                                          visit the website at                                          www.biotechgt.com                                          Follow us on Twitter                                          @biotechgt                                          Winner:                                          Investment Week, Investment Company                                          of the year, Specialist Category 2012                                          and 2013                                          techMark Technology Fund Manager of                                          the year 2011 and 2012 (OrbiMed                                          Capital LLC)                                          UKtech awards Fund Manager of the                                          year 2013 (OrbiMed Capital LLC)                                          Investment Trusts Magazine, Best                                          Specialist Trust 2011 and 2012Company SummaryThe CompanyThe Company is an investment trust and itsshares are listed on the Official List andtraded on the main market of the LondonStock Exchange. The Company is a member ofthe Association of Investment Companies("AIC").Total assets less current liabilities as at31 March 2014 were £340.2 million and themarket capitalisation was £318.6 million.ManagementThe Company employs OrbiMed Capital LLC("OrbiMed") as Investment Manager andFrostrow Capital LLP ("Frostrow") to providecompany management, company secretarial,administrative and marketing services.Further details of the terms of theseappointments are provided within the Reportof the Directors.PerformancePerformance is measured against the NASDAQBiotechnology Index (sterling adjusted).Capital StructureThe Company's capital structure is composedsolely of Ordinary Shares. Details are givenin note 11 to the accounts.DividendNo dividend is recommended in respect of theyear ended 31 March 2014 (2013: nil).Continuation VoteThe next continuation vote of the Companyshall be held at the Annual General Meetingin 2015, and further opportunities to voteon the continuation of the Company shall begiven to shareholders every five yearsthereafter.ISA StatusThe Company's shares are eligible forIndividual Savings Accounts (\`ISAs') and forJunior ISAs.Company SummaryThe CompanyThe Company is an investment trust and its shares arelisted on the Official List and traded on the mainmarket of the London Stock Exchange. The Company is amember of the Association of Investment Companies("AIC").Total assets less current liabilities as at 31 March2014 were £340.2 million and the marketcapitalisation was £318.6 million.ManagementThe Company employs OrbiMed Capital LLC ("OrbiMed")as Investment Manager and Frostrow Capital LLP("Frostrow") to provide company management, companysecretarial, administrative and marketing services.Further details of the terms of these appointmentsare provided within the Report of the Directors.PerformancePerformance is measured against the NASDAQBiotechnology Index (sterling adjusted).Capital StructureThe Company's capital structure is composed solely ofOrdinary Shares. Details are given in note 11 to theaccounts.DividendNo dividend is recommended in respect of the yearended 31 March 2014 (2013: nil).Continuation VoteThe next continuation vote of the Company shall beheld at the Annual General Meeting in 2015, andfurther opportunities to vote on the continuation ofthe Company shall be given to shareholders every fiveyears thereafter.ISA StatusThe Company's shares are eligible for IndividualSavings Accounts (\`ISAs') and for Junior ISAs.       Contents                                    About The Biotech Growth Trust PLC       Company Summary                    Company Summary       Strategic Report                    Company Performance                    Chairman's Statement                    Investment Objective                    Business Review                    Investment Portfolio                    Investment Manager's Review                    Portfolio Focus                    OrbiMed Capital LLC                    Principal Contributions to and Detractors from Net Asset                    Value       Governance                    Board of Directors                    Report of the Directors                    Statement of Directors' Responsibilities                    Corporate Governance                    Audit and Management Engagement Committee Report                    Directors' Remuneration Report                    Directors' Remuneration Policy Report       Financial Statements                    Independent Auditors' Report                    Income Statement                    Statement of Financial Position                    Statement of Changes in Equity                    Statement of Cash Flows                    Notes to the Accounts       Further Information                    Shareholder Information                    Glossary of Terms                    How to Invest                    Notice of Annual General Meeting                    Explanatory Notes to the Resolutions                    Explanatory Notes of Principal Changes to the Company's                    Articles of Association                    Statement of Circumstances                    Company InformationStrategic Report / Company PerformanceFinancial Highlights                                                      As at     As at                                                   31 March  31 March         %                                                       2014      2013    ChangeNet asset value per share                            498.7p    371.7p     +34.2Share price                                          467.0p    368.0p     +26.9Discount of share price to net asset value per         6.4%      1.0%         -shareAverage discount/(premium) of share price tonet asset value per share                              2.9%    (0.4%)         -NASDAQ Biotechnology Index(sterling adjusted) (Benchmark)                     1,480.1   1,099.0     +34.7Ongoing charges\*                                       1.2%      1.3%         -Gearing\*                                               8.3%         -         -\*See glossaryFive Year Performance Record                                    2009   2010   2011   2012    2013    2014Net asset value per share         136.9p 182.6p 186.0p 250.9p  371.7p  498.7pShare price                       130.5p 175.8p 166.0p 236.0p  368.0p  467.0pDiscount of share price to net      4.7%   3.7%  10.8%   5.9%    1.0%    6.4%asset value per shareNASDAQ BiotechnologyIndex (sterling adjusted)          477.5  618.1  647.9  801.1 1,099.0 1,480.1Strategic Report / Chairman's StatementInvestment PerformanceOverall, the year under review was a very good one for shareholders in theCompany. During the year the Company's net asset value per share increased by34.2% which was broadly in line with the Company's benchmark index whichincreased by 34.7%. It is somewhat disappointing that we did not outperform thebenchmark index as we have in previous years. However, since the appointment ofOrbiMed as your investment manager in 2005, the Company's net asset value pershare has outperformed the Company's benchmark index by a significant margin.This outperformance amounted to 103.9% as at 31 March 2014.The Company's positive performance during the year was due in part to theperformance of holdings in Incyte, Illumina, Biogen Idec, Regeneron Pharma andInterMune which all delivered good positive returns during the year. As Ireported at the half year stage, a significant detractor from performanceduring the year was the Company's holding in Infinity Pharmaceuticals. Inaddition Dynavax and Exelixis were poor performers during the year. Ourexperience with these investments is, whilst disappointing, symptomatic ofinvesting in the biotechnology sector which is volatile; inevitably there willbe investments which do not deliver positive returns for shareholders. Furtherinformation on the Company's investments can be found in Review of Investments.The Company's continued strong overall performance has enabled it, and ourInvestment Manager, to win further awards. It is particularly pleasing toreport that OrbiMed won the 2013 techMARK Technology Fund Manager of the Yearaward for the third successive year. In addition your Company has recently beendeclared the Investment Company of the year in the Specialist Category for 2013by Investment Week for the second year in succession.Share Price Performance, Premium Management and Discount ControlThe Company's share price increased by somewhat less than the net asset valueper share, delivering a gain of 26.9% over the year as a whole. This lowerreturn when compared to the rise in net asset value was due to the share pricemoving from a premium to net asset value per share at the start of the year toa discount at the year end.During the earlier part of the year, the Company's continued strong overallperformance gave rise to new demand for the Company's shares and a total of4,420,000 new shares were issued at a small premium reflecting the Board'sdesire to manage the premium to net asset value per share. This new shareissuance was offset by the need to buy back 662,309 shares in the later part ofthe year reflecting the Board's commitment to limit the Company's share pricediscount to about 6%. Share buy-backs have continued since the year end with afurther 107,128 shares having been bought back for holding in treasury up tothe date of this report.Overall demand for the Company's shares remained strong during the year. TheBoard is pleased to note that this new demand has continued to come mainly fromretail investors and we welcome all new shareholders to the Company'sshareholder register.Return and DividendThe total return per share amounted to 126.8p for the year (2013: 121.1p),comprising a revenue deficit of 0.1p per share (2013: 0.1p) and a capital gainof 126.9p (2013: 121.2p). No dividend is recommended in respect of the yearended 31 March 2014 (2013: nil).The BoardDr John Gordon has served on the Board since the launch of the Company in 1997.John has been an outstanding member of the Board and we have greatly valued hiscontribution from both a scientific and a corporate governance perspective. Inparticular the Board thanks him for the significant contribution he made at thetime of the change in the Company's investment management arrangements in 2005.He will be greatly missed when he retires from the Board at the conclusion ofthis year's Annual General Meeting. He will be succeeded as the Company'sSenior Independent Director by Andrew Joy.RegulatoryThe Board together with its advisors has been keeping developments with respectto the Alternative Investment Fund Management Directive (\`the Directive') whichis due to come into force on 22 July 2014 under close review. In accordancewith the Directive it is intended that JPMorgan will be appointed as theCompany's Custodian and Depository and the Company's Manager, Frostrow, willtake on the role of the Company's Alternative Investment Fund Manager. OrbiMedwill continue to be the Company's investment portfolio manager.OutlookDespite the biotechnology sector witnessing volatile market conditions inrecent months the focus of our Investment Manager continues to be on theselection of stocks with strong prospects for capital enhancement. Theinvestment portfolio has been constructed not only to provide shareholders withexposure to biotechnology companies with good prospects and at attractivevaluations, but also to position the Company to benefit from corporate activitywithin the Healthcare sector as a whole, such corporate activity being a keydriver of superior returns within the sector.Healthcare reform within the US market, also known as \`Obamacare' has now beenimplemented. In the near term our Investment Managers do not believe that thesechanges will have any material impact on returns from the sector. In the mediumterm however it is believed that Obamacare could be beneficial to the sector asthe number of individuals who are insured under the new arrangements increases.Your Board believes that the long term investor in the biotechnology sectorwill continue to be well rewarded.Annual General MeetingThe Annual General Meeting of the Company this year will be held at theBarber-Surgeons' Hall, Monkwell Square, Wood Street, London EC2Y 5BL onThursday, 10 July 2014 at 12.30 pm, and we hope as many shareholders aspossible will attend. This will be an opportunity to meet the Board and toreceive a presentation from our Investment Manager. Shareholders who are unableto attend are encouraged to return their forms of proxy to ensure their votesare represented.The Rt Hon Lord Waldegrave of North HillChairman22 May 2014Strategic Report / Investment ObjectiveInvestment Objective and PolicyTo seek capital appreciation through investment in the worldwide biotechnologyindustry. In order to achieve its investment objective, the Company invests ina diversified portfolio of shares and related securities in biotechnologycompanies on a worldwide basis. Performance is measured against the NASDAQBiotechnology Index (sterling adjusted). Shareholder approval to amend theCompany's investment objective and policy was obtained at a General Meetingheld on 30 October 2013.The Directors, as advised by the Investment Manager, believed that asimplification of the Company's existing Investment Objective and Policy wouldbe beneficial to shareholders as it would allow greater flexibility in the sizeof biotechnology companies in which the Company could invest. As a result theCompany's existing Investment Objective and Policy was amended, in particularby the elimination of the restriction that a majority of the investee companiesmust have a market capitalisation of less than U.S.$3 billion. This amendmentallows the Company to have a greater exposure to major biotechnology companiesand better aligns the Investment Policy with the Investment Manager'sexpectations for the portfolio.Additionally, although the Directors continued in the belief that it wasappropriate to limit exposure to swap instruments to 5% of the gross assets ofthe Company at the time of entering into the contract, they did not believe itwas appropriate to limit exposure to one particular country represented in theportfolio (India) particularly as the Company did not then (and still does nothave) any investments there either directly or through the use of swaps.The Company's investment focus remains on biotechnology; there are no plans toinclude investee companies that specialise in other aspects of healthcare. TheCompany's benchmark remains unchanged.Investment ApproachThe Company\`s assets are managed by OrbiMed Capital LLC ("OrbiMed").OrbiMed, based in New York, is an investment manager focused exclusively on thehealthcare sector, with approximately U.S.$11 billion in assets undermanagement as at 31 March 2014 across a range of funds, including investmenttrusts, hedge funds and private equity funds. OrbiMed's investment managementactivities were founded in 1989 by Mr. Samuel D. Isaly.Consistent with the revised mandate, OrbiMed has invested the Company's assetsin the worldwide biotechnology industry. Geographic allocation is in line withthe geographic distribution of investment opportunities, with the majority ofthe Company's investments in companies based in North America. The portfoliocomprised 46 holdings as at 31 March 2014 (2013: 38 holdings).OrbiMed takes a bottom-up approach to stock selection based on intensiveproprietary research. Stock selection is based on rigorous financial analysis,exhaustive scientific review, frequent meetings with company management andconsultations with physicians and other industry experts.OrbiMed looks for strong management teams, healthy organic growth from currentproducts and deep pipelines to fuel future growth.Risk management is conducted via position size limits and geographicdiversification. The Company maintains adequate portfolio liquidity by limitingthe Company's ownership to 15% of an individual company's equity (at the timeof investment) and by strictly limiting the Company's exposure to directunquoted companies to 10% of the portfolio at the time of acquisition.Investment LimitationsThe Board seeks to manage the Company's risk by imposing various investmentlimits and restrictions as follows:The Company will not invest more than 10%, in aggregate, of the value of itsgross assets in other closed ended investment companies (including investmenttrusts) listed on the London Stock Exchange, except where the investmentcompanies themselves have stated investment policies to invest no more than 15%of their gross assets in other closed ended investment companies (includinginvestment trusts) listed on the London Stock Exchange.The Company will not invest more than 15%, in aggregate, of the value of itsgross assets in other closed ended investment companies (including investmenttrusts) listed on the London Stock Exchange.The Company will not invest more than 15% of the value of its gross assets inany one individual stock at the time of acquisition.The Company will not invest more than 10% of the value of its gross assets indirect unquoted investments at the time of acquisition. This limit does notinclude any investment in private equity funds managed by the InvestmentManager or any affiliates of such entity.The Company may invest or commit for investment a maximum of US$15 million,after the deduction of proceeds of disposal and other returns of capital, inprivate equity funds managed by OrbiMed, the Company's Investment Manager, oran affiliate thereof.The Company may be unable to invest directly in certain countries. In thesecircumstances, the Company may gain exposure to companies in such countries byinvesting indirectly through swaps. Where the Company invests in swaps,exposure to underlying assets will not exceed 5% of the gross assets of theCompany at the time of entering into the contract.The Company's gearing policy is that gearing will not exceed 10% of theCompany's net assets. The Company's gearing requirements are met through theutilisation of a loan facility, repayable on demand, provided by the Company'scustodian, Goldman Sachs & Co. New York. This facility can be drawn at thediscretion of the Investment Manager.In accordance with the requirements of the UK Listing Authority, any materialchange to the investment policy will only be made with the approval ofshareholders by ordinary resolution.Dividend PolicyThe Company invests with the objective of achieving capital growth and it isexpected that dividends, if any, are likely to be small. The Board intends onlyto pay dividends on the Company's shares to the extent required in order tomaintain the Company's investment trust status.Strategic Report / Business Review(Discount)/Premium to 31 March 2014Discount of the Company's share price to the net asset value per share at 31March 2014 stood at 6.4%.During the year the Company traded at an average discount of 2.9%.Number of ordinary shares in issue68,886,347                64,466,347(including 662,309        (nil Shares held inshares held in treasury)  treasury)            31 March 2014          31 March 2013Ongoing charges ratioFor the year ended 31 March 2014               For the year ended 31 March 20131.2 %                                          1.3 %Key Performance IndicatorsThe Board assesses its performance in meeting the Company's objective againstthe following Key Performance Indicators:Net asset       Share price      Stock            Share price     Ongoingvalue return    return           contribution     discount/       charges ratioagainst the                      analysis         premiumNASDAQ                                            to net assetBiotechnology                                     valueIndex                                             per share(sterlingadjusted)The management of the portfolio has been delegated to OrbiMed and management,company secretarial, administration and marketing services have been delegatedto the Manager Frostrow. Each provider is responsible to the Board which isultimately responsible to the shareholders for performing against the aboveKPIs.Net asset value total return - benchmarkThe Directors regard the Company's net asset value total return as being theoverall measure of value delivered to shareholders over the long term. Totalreturn reflects the net asset value growth of the Company. OrbiMed's investmentstyle is such that performance is likely to deviate from that of the benchmarkindex. The Board considers the most important comparator to be theNASDAQ Biotechnology Index (sterling adjusted).During the year under review the Company's net asset value per share return was34.2% slightly underperforming the benchmark by 0.5%.A full description of performance during the year under review and theinvestment portfolio is contained in the Investment Manager's Review.Share price returnThe Directors also regard the Company's share price return to be a keyindicator of performance. This is monitored closely by the Board.During the year under review the Company's share price return was 26.9%.Stock contribution analysisThe Board undertakes a regular review of the portfolio and in particular theprincipal contributors to and detractors from net asset value.The Investment Manager provides a detailed explanation of portfolio performanceat each Board Meeting.Further details of the principal contributors to and detractors from net assetvalue performance for the year to 31 March 2014 can be found within the Reportof Directors.Share discount/premium price to net asset value per shareThe Board undertakes a regular review of the level of discount/premium andconsideration is given to ways in which share price performance may beenhanced, including the effectiveness of marketing and share issuance andbuy-backs, where appropriate. The Board has a discount control mechanism inplace intended to establish a target level of no more than a 6% discount ofshare price to the diluted net asset value per share. Shareholders should note,however, that it remains possible for the share price discount to net assetvalue per share to be greater than 6% on any one day and is due to the factthat the share price continues to be influenced by overall supply and demandfor the Company's shares in the secondary market. The volatility of the netasset value per share in an asset class such as biotechnology is another factorover which the Board has no control. The making and timing of any sharebuy-backs is at the absolute discretion of the Board.During the year under review 662,309 shares were bought back to be held intreasury by the Company.Demand for the Company's Shares led to the issue of a total of 4,420,000 newShares during the year at a price representing a small premium to NAV pershare.To meet this demand the Company published a Prospectus in July 2013. Since theyear end the Board exercised their discretion on 28 April 2014 to suspend thePlacing Programme under the 2013 Prospectus, as in the short term the Boardbelieves that further share issues can be made within the current limitsapproved by Shareholders.Ongoing charges ratioThe Board continues to be conscious of expenses and works hard to maintain asensible balance between strong service and costs.As at 31 March 2014 the ongoing charges ratio was 1.2% (2013: 1.3%) which wasmarginally less than the percentage for the previous year.Risk ManagementThe Board is responsible for the management of the risks faced by the Companyand the Board regularly review these risks and how risk is mitigated. The Boardhas categorised the risks faced by the Company under ten headings as follows:Objective  Level of  Portfolio    Operational  Market  Liquidity  Shareholder  Currency  Loan      Creditand        discount  Performance  and          Price   Risk       Profile      Risk      Facility  RiskStrategy   /premium               Regulatory   RisksA summary of these risks and their mitigation is described below:Principal Risks and            MitigationUncertaintiesObjective and Strategy         The Board reviews regularly the Company's                               investment objective and investment guidelines                               in the light of investor sentiment monitoring                               closely whether the Company should continue in                               its present form. The Board also considers the                               size of the Company to ensure that it has                               sufficient critical mass. The Board, through the                               Manager and the Investment Manager, holds                               regular discussions with major shareholders. AThe Company becomes            continuation vote is to be held at the Annualunattractive to investors.     General Meeting in 2015 and every five years                               thereafter. Each month the Board receives a                               report which monitors the investments held in                               the portfolio compared against the benchmark                               index and the investment guidelines. Additional                               reports and presentations are regularly                               presented to investors by the Company's Manager,                               Investment Manager and Corporate Stockbroker.Level of discount/premium      The Board undertakes a regular review of the                               level of discount/premium and consideration is                               given to ways in which share price performance                               may be enhanced, including the effectiveness of                               marketing and share issuance and buy-backs, if                               considered appropriate. The Board has an activeThe risk of the Company's      discount management policy in place, buying backshare price not being          the Company's shares to hold in treasury or forrepresentative of its          cancellation if the market price is at aunderlying net assets.         discount greater than 6% to the net asset value                               per share. The making and timing of any share                               issuance or buy-backs is at the absolute                               discretion of the Board.Portfolio Performance          The Board reviews regularly investment                               performance against the benchmark and against                               the Company's peer group. The Board also                               receives regular reports that show an analysis                               of performance compared to other relevantInvestment performance may     indices. The Investment Manager provides annot be meeting shareholder     explanation of significant stock selectionrequirements.                  decisions and an overall rationale for the                               make-up of the portfolio. The Investment Manager                               discusses current and potential investment                               holdings with the Board on a regular basis.Operational and Regulatory     All transactions and income and expenditure                               forecasts are reviewed by the Board at eachA breach of Sections 1158      Board Meeting. The Board considers regularly alland 1159 of the Corporation    major risks, the measures in place to controlTax Act 2010 could lead to     them and the possibility of any other risks thatthe Company being subject      could arise. The Board also ensures thatto tax on capital gains,       satisfactory assurances are received fromwhilst a serious breach of     service providers. The Compliance Officer of theother regulatory rules         Manager and Investment Manager produce regular(including those associated    reports for review at the Company's Audit andwith the Alternative           Management Engagement Committee meetings and areInvestment Fund Managers       available to attend such meetings in person ifDirective) may lead to         required.suspension from the StockExchange or to a qualifiedAudit Report. Other controlfailures, either by theManager, the InvestmentManager or any other of theCompany's serviceproviders, may result inoperational and/orreputational problems,erroneous disclosures orloss of assets throughfraud, as well as breachesof regulations.Market Price Risks             The Board meets on a quarterly basis during the                               year and on an ad hoc basis if necessary. At                               each meeting the Directors consider the asset                               allocation of the portfolio in order to minimise                               the risk associated with particular countries,Uncertainty about future       sectors, or instruments. The Investment Managerprices of financial            has responsibility for selecting investments ininstruments held.              accordance with the Company's investment                               objective and seeks to ensure that investment in                               individual stocks falls within acceptable risk                               levels.Liquidity Risk                 Ability to meet funding requirements when they                               arise. The Investment Manager has constructed                               the portfolio so that funds can be raised at                               short notice if required.Shareholder Profile            Activist shareholders whose interests are not                               consistent with the long-term objectives of the                               Company may be attracted onto the shareholder                               register.                               The Manager provides a shareholder analysis at                               every Board Meeting so that the Board can give                               consideration as to any action required; this is                               in addition to regular reporting by the                               Company's Stockbroker. The Board has implemented                               an active discount management policy.Currency Risk                  Movements in exchange rates could adversely                               affect the performance of the portfolio.                               A significant proportion of the Company's assets                               is, and will continue to be, invested in                               securities denominated in foreign currencies, in                               particular U.S. dollars. As the Company's shares                               are denominated and traded in sterling, the                               return to shareholders will be affected by                               changes in the value of sterling relative to                               those foreign currencies. The Board has made                               clear the Company's position with regard to                               currency fluctuations which is that it does not                               currently hedge against currency exposure.Loan Facility                  The provider of the Company's loan facility may                               no longer be prepared to lend to the Company.                               Both the Board and the Investment Manager are                               kept fully informed of any likelihood of the                               withdrawal of the loan facility so that                               repayment can be effected in an orderly fashion.                               The Company's borrowing requirements are met                               through the utilisation of a loan facility,                               repayable on demand, provided by Goldman Sachs &                               Co. New York.Credit Risk                    The Company's assets can be held by Goldman                               Sachs & Co. New York as collateral for the loan                               provided by them to the Company. Such assets                               taken as collateral may be used, loaned, sold,                               rehypothecated or transferred by Goldman Sachs &                               Co. New York, although the Company maintains the                               economic benefits from ownership of those                               assets. Goldman Sachs & Co. New York may take up                               to 140% of the value of the outstanding loan as                               collateral. The Company is afforded protection                               under both the SEC rules and U.S. legislation                               equal to the value of net assets held by Goldman                               Sachs & Co. New York.                               Assets held by Goldman Sachs & Co. New York, as                               custodian, that are not used as collateral, are                               held in segregated client accounts.                               Further information on financial instruments and                               risk, as required by IFRS 7, can be found in                               note 13 to the financial statements.Strategic Report / Business ReviewDirector, Social, Economic and Environmental Matters and Looking to the FutureDirectorsThe Directors of the Company, who served during the year, are shown below:The Rt Hon Lord Waldegrave of North Hill (Chairman)Sven BorhoProfessor Dame Kay Davies DBEPaul GauntDr John GordonAndrew JoyPeter KeenBoard DiversityThe Company is supportive of the recommendations of Lord Davies' Report thatthe performance of corporate boards can be improved by encouraging theappointment of the best people from a range of differing perspectives andbackgrounds. The Company recognises the benefits of diversity on the Board,including gender, and takes this into account in its Board appointments. TheCompany is committed to ensuring that any director search process activelyseeks persons with the right qualifications so that appointments can be made,on the basis of merit, against objective criteria from a diverse selection ofcandidates. To this end the Board will continue to consider diversity duringany director search process.In anticipation of the retirement of Dr John Gordon, Professor Dame Kay DaviesDBE and Andrew Joy joined the Board in March 2012 as part of the Board'songoing succession plan.Social, Economic and Environmental MattersThe Directors, through the Company's Investment Manager, encourage companies inwhich investments are made to adhere to best practice with regard to CorporateGovernance. In light of the nature of the Company's business there are norelevant human rights issues and the Company does not have a human rightspolicy.The Company recognises that social and environmental issues can have an effecton some of its investee companies.The Company is an investment trust and so its own direct environmental impactis minimal. The Board of Directors consists of seven Directors, six of whichare resident in the UK and one is resident in the United States. The Boardholds its regular meetings in the United Kingdom and has a policy that travel,as far as possible, is minimal, thereby minimising the Company's greenhouse gasemissions.Looking to the FutureThe Board concentrates its attention on the Company's investment performanceand OrbiMed's investment approach and on factors that may have an effect onthis approach. Marketing reports are given to the Board at each Board meetingby both OrbiMed and Frostrow, which include how the Company will be promotedand details of planned communications with existing and potential shareholders.The Board is regularly updated by Frostrow on wider investment trust industryissues and discussions are held at each Board meeting concerning the Company'sfuture development and strategy.The Company's Investment Manager believes that the outlook remains positive forthe biotechnology sector, with a strong earnings growth outlook for majorbiotech companies and robust development pipelines from emerging biotechcompanies. They believe that the portfolio is well positioned to capitalise onthe opportunities in the sector.A review of the Company's year, its performance since the year-end and theoutlook for the Company can be found in the Chairman's Statement and in theInvestment Managers Review.The Company's overall strategy remains unchanged.Strategic Report / Investment PortfolioInvestment as at 31 March 2014Security                                      Country   Fair value         % of                                              /Region                                                             £'000  investmentsBiogen Idec                             United States       39,163         10.6Gilead Sciences                         United States       37,002         10.0Illumina                                United States       21,845          5.9Incyte                                  United States       17,076          4.6Amgen                                   United States       14,894          4.0Alexion Pharmaceuticals                 United States       14,326          3.9Ono Pharmaceutical                              Japan       14,267          3.9BioMarin Pharmaceutical                 United States       11,373          3.1Intermune                               United States       11,179          3.0Impax Laboratories                      United States       11,089          3.0Ten largest investments                                    192,214         52.0Mylan                                   United States       10,791          2.9Prothena                                      Ireland        9,759          2.7Arrowhead Research                      United States        9,605          2.6Jazz Pharmaceuticals                    United States        9,566          2.6Neurocrine Biosciences                  United States        9,378          2.6Fluidigm                                United States        9,119          2.5Actelion                                  Switzerland        8,662          2.4Celgene                                 United States        8,625          2.3Medivation                              United States        8,493          2.3Portola Pharmaceuticals                 United States        7,937          2.2Twenty largest investments                                 284,149         77.1Vertex Pharmaceuticals                  United States        6,784          1.8Affymetrix                              United States        6,723          1.8Regeneron Pharmaceutical                United States        6,664          1.8Xencor                                  United States        5,636          1.5Shire                                         Ireland        5,433          1.5Infinity Pharmaceuticals                United States        5,066          1.4Agilent Technologies                    United States        4,830          1.3Cubist Pharmaceutical                   United States        3,948          1.1PTC Therapeutics                        United States        3,809          1.0Allergan                                United States        3,720          1.0Thirty largest investments                                 336,762         91.3Inovio Pharmaceuticals                  United States        3,595          1.0Perrigo                                 United States        3,524          1.0Questcor Pharmaceutical                 United States        3,115          0.8Ironwood Pharmaceuticals                United States        2,727          0.7Vanda Pharmaceuticals                   United States        2,556          0.7Orbimed Asia Partners L.P.                   Far East        2,495          0.7(unquoted)Tesaro                                  United States        2,304          0.6Horizon Pharmaceutical                  United States        1,776          0.5Celldex Therapeutics                    United States        1,759          0.5Synageva Biopharma                      United States        1,657          0.5Forty largest investments                                  362,270         98.3ArQule                                  United States        1,588          0.4Exact Sciences                          United States        1,444          0.4Exelixis                                United States        1,103          0.3Bluebird Bio                            United States          742          0.2GW Pharmaceuticals                     United Kingdom          634          0.2Raptor Pharmaceutical                   United States          581          0.2Total investments                                          368,362        100.0All of the above investments are equities unless otherwise stated.Portfolio BreakdownInvestments                                            Fair value          % of                                                            £'000   investmentsEquities                                                  368,362         100.0Total Investments                                         368,362         100.0Strategic Report / Investment Manager's ReviewPerformance ReviewThe Company's net asset value per share              Sven Borhoincreased 34.2% during the financialyear. This compares to a 34.7% increase              OrbiMed Capital LLCin the Company's benchmark, the NASDAQBiotechnology Index (measured on a                   Investment Managersterling adjusted basis). The Company'sshare price increased 26.9% as thediscount to net asset value per sharewidened from 1.0% to 6.4%.The leading contributors to performance in the portfolio during the financialyear were Incyte, Illumina, Biogen Idec, Regeneron Pharmaceuticals, andInterMune.• Incyte shares appreciated due to continued strong sales of lead drug Jakafifor myelofibrosis, and due to positive clinical results for Jakafi in expandedindications.• Illumina shares appreciated due to strong sales of their sequencing productofferings.• Biogen Idec shares increased due to a robust launch of Tecfidera for multiplesclerosis.• Regeneron shares appreciated due to strong sales of lead drug Eylea for wetage-related macular degeneration. Also, investor enthusiasm has increased fortheir pipeline drug targeting PCSK9 for high cholesterol.• InterMune shares appreciated due to the release of positive results from aphase III study of Esbriet for idiopathic pulmonary fibrosis. This confirmatorystudy will enable approval of the drug in the U.S.Infinity Pharmaceuticals, Dynavax, and Exelixis were the principal detractorsfrom performance in the portfolio during the financial year.• Infinity Pharmaceuticals shares declined due to concerns about the safetyprofile and competitive position of lead drug IPI-145 for lymphoma and chroniclymphocytic leukemia.• Dynavax shares declined because the U.S. Food and Administration ("FDA")requested an additional safety trial prior to approval of their hepatitis Bvaccine Heplisav, significantly delaying the launch of the vaccine.• Exelixis shares declined in response to the continuation of their phase IIItrial following an interim analysis. Many investors expected the trial tosucceed at the interim analysis; therefore the continuation of the trial was adisappointment.Sector ReviewThe biotechnology sector generated strong performance during financial year2014. Biotech stocks have outperformed the broader market for the past twoyears, which we believe is justified by improved fundamentals of the sector. Inlast year's review of performance we highlighted upcoming earningsreacceleration from the major biotechnology companies, led by new productlaunches from Gilead Sciences and Biogen Idec. These launches have indeedexceeded expectations. In the case of Gilead Sciences, the launch of Sovaldifor the treatment of hepatitis C has been the most successful drug launch ofall time. In its first full quarter of launch, Sovaldi generated $2.27 billionof sales. Previously the best performing drug launch was Vertex's Incivek, alsofor hepatitis C, which generated $1.56 billion in its first four quarters oflaunch. We believe Sovaldi will continue to exceed expectations and that thelonger-term run rate of patients being treated for hepatitis C will be higherthan investors currently expect. In the case of Biogen Idec, the launch ofTecfidera for multiple sclerosis was better than expected, generating $1.38billion in sales in its first four quarters of launch. The drug now accountsfor about 20% of all new prescriptions for multiple sclerosis treatmentsaccording to IMS data. Approximately three quarters of new Tecfidera startscome from patients switching from existing therapies, highlighting theinadequacy of prior drugs.We continue to believe valuations in biotech are attractive relative totraditional large pharma. The following table shows the P/E, expected growthrate and PEG ratios for the major biotechnology companies and the median of themajor pharmaceutical companies. We would highlight that even with the recentshare appreciation, the median 2015 P/E of biotech is 14.4x, below the 15.5x ofbig pharma despite a superior earnings growth outlook for major biotech overthe next few years.                          P/E Ratio          EPS Growth         PEG Ratio\*Company                2014   2015   2016  2015  2016   LTG   2014   2015  2016Gilead                18.5x  12.1x   9.6x 53.2% 26.6% 35.2%   0.5x   0.3x  0.3xAmgen                 15.1x  14.2x  13.2x  6.9%  7.3%  7.4%   2.1x   1.9x  1.8xBiogen Idec           27.0x  21.6x  17.6x 25.0% 22.6% 22.0%   1.2x   1.0x  0.8xCelgene               19.2x  14.6x  11.4x 30.9% 28.1% 24.5%   0.8x   0.6x  0.5xMajor Biotech Median  18.9x  14.4x  12.3x 28.0% 24.6% 23.3%   1.0x   0.8x  0.6xMajor Pharma Median   16.7x  15.5x  14.4x  7.9% 10.4%  6.1%   2.7x   2.8x  2.5xSource: FactSet, as of 31 March, 2014\* PEG Ratio calculated as P/E in respective year divided by consensus forecastlong-term growth ("LTG") rate.Impact of Healthcare Reform is Modest for BiotechThe Affordable Care Act, also known as Obamacare, was signed into law in 2010.The key provisions were recently implemented: the expansion in Medicaidcoverage, the individual requirement to have health insurance, and the creationof state-based health exchanges. Recent technical glitches in the online sitefor the federal health exchange shed some light on the difficulty inimplementing these changes. In the near-term, we see no material impact onbiotech from the implementation of Obamacare. In the medium term, Obamacarecould be a tailwind for biotech as the number of insured individuals isexpected to expand at a low-to-mid single-digit rate (2-4%). Therapeutic areaswith large uninsured populations that are most likely to benefit will beinfectious diseases, multiple sclerosis, respiratory diseases and mentalillnesses. This could be good for large cap biotech companies such as Gileadand Biogen Idec. We do expect some headline risk on drug pricing. In fact,Gilead shares have recently been under pressure due to a letter from U.S.Representative Henry Waxman, questioning the pricing of Gilead's anti-HCV drugSovaldi. However, we do not expect Congress to take action while Republicansremain in charge of the House of Representatives. We continue to believe thatdue to the innovative nature of biotech, these drugs will be able to command apremium, provided such pricing can be justified in the context of overallhealthcare spending.Financing Environment is StrongThe financing environment for biotech was strong during the financial year,indicative of high demand for biotech shares among institutional investors. Thechart below shows the total value of biotech initial public offerings andfollow-on offerings by year since 1994. As shown in the chart, 2013 easilyeclipses all prior years in terms of money raised by public biotech companies.For the calendar year 2013 through to the first quarter of 2014, there were 62biotechnology IPOs, with many experiencing strong initial share priceperformance. The Company participated in 11 IPOs during the financial year.Three recent IPOs are currently in the portfolio - Bluebird Bio, PortolaPharmaceuticals, and PTC Therapeutics. The recent IPO activity offers many newopportunities for investment in innovative approaches to drug development.New Therapeutic Opportunities: Immuno-OncologyWe continue to look for investment opportunities in fields where rapid clinicaladvances are being made that can dramatically transform the standard of care.In past years, we have highlighted developments in the hepatitis C space assignificant progress was made through the development of direct actingantiviral drugs. Hepatitis C became a key focus area for biotech investors, andthe fund profited meaningfully from investments in companies in this space,including Vertex, Pharmasset, and Gilead.We see a similarly promising new wave of therapies today in the field ofimmuno-oncology. Using the immune system to fight cancer has long been anappealing concept. However, cancers have developed the capacity to activelyevade the immune system, so generating an immune response against cancer using"cancer vaccines" has generally not been sufficient to treat cancer. Therapiesare now being developed to target the inhibitory signals that cancer cellsexploit to evade immune clearance, and therefore reactivate the immune systemto attack these cancer cells. In particular, monoclonal antibodies that targetthe PD-1 pathway are showing great promise for melanoma, kidney and lung cancerand potentially other tumor types. The durable remissions induced by theseagents may in some cases be cures. Although the four PD-1 directed agentscurrently in clinical trials are being developed by big pharma, the Japanesespecialty pharma company Ono Pharmaceuticals owns a roughly 20% interest inBristol-Myers Squibb's nivolumab, a leading PD-1 drug. Because of the largepotential of nivolumab relative to the company's existing business, this stockis highly leveraged to the success of the drug. Ono is currently one of thelargest investments in the fund (see the portfolio Focus section for moreinformation about Ono). The next step for immuno-oncology is the development ofcombination approaches that will further enhance tumor response and potentiallygenerate more cures.Within the portfolio, Incyte has promising early data for their IDO inhibitor(Indoleamine 2, 3-dioxygenase), in combination with an existing immunotherapyfor melanoma. This synergy may extend to other immunotherapies, such as PD-1,and to other tumor types. Incyte is highlighted in the Portfolio Focus section.Innate Pharma is a recent addition to the portfolio. Innate Pharma has licensedits anti-KIR antibody, an activator of the innate immune system, toBristol-Myers Squibb. This drug is currently being combined with nivolumab in aphase I trial, and we eagerly await results. Additionally, portfolio companiesBluebird Bio and Celgene are collaborating to develop modified T-cells toattack cancer. We believe that immuno-oncology will be a major focus area forinvestors over the next several years and that our portfolio is well positionedto benefit from advances in the field.OutlookThe outlook remains positive for the biotechnology sector. The earnings growthoutlook for the major biotech companies is strong, and valuations of the majorbiotech companies are attractive compared to pharma given the relative growthprofiles. Development pipelines from emerging biotech companies are robust;there are many promising new compounds under development to address a widevariety of therapeutic indications. Furthermore, the recent flurry of IPOactivity has served to reinvigorate the public biotech market with novelapproaches to treating disease. We are particularly excited about the advancesbeing made in immuno-oncology, and we expect that investor enthusiasm willbuild for this therapeutic approach. We believe the portfolio is wellpositioned to capitalize on the opportunities in the sector.Sven BorhoOrbiMed Capital LLC, Investment Manager22 May 2014Strategic Report / Portfolio FocusInterMuneInterMune is an emerging biopharmaceutical company focused on pulmonarydisease. Its lead drug is Esbriet for the treatment of idiopathic pulmonaryfibrosis (IPF). IPF is a progressive scarring of the lungs which causes loss oflung function and ultimately leads to death, typically within 3-5 years ofdiagnosis. Esbriet is a novel anti-fibrotic. The drug was tested in two nearlyidentical phase III trials which were reported in 2009. One trial met itsprimary endpoint in terms of reducing the rate of loss of lung function, butthe second trial was not successful (although there were some encouragingtrends). Because of these conflicting results, the U.S. FDA rejected the drug,requesting an additional confirmatory phase III trial to support approval.Esbriet did receive E.U. approval in 2011. The drug has now been launched inthe majority of European countries, and sales have beaten expectations over thelast several quarters.Based on the totality of the data across trials, and the fact that thestatistical strength of the successful phase III trial argued that it wasunlikely to be a fluke, we believed that the ongoing confirmatory phase III waslikely to be successful. In February 2014, InterMune announced that the trialwas indeed a success, leading to a significant jump in the company's shareprice. In fact, the treatment effect was larger than expected from the previoustrials. We are confident that this trial will be sufficient for U.S. approval,expected in 2015. InterMune is now one of the few biotech companies withworldwide rights to a drug with blockbuster potential. As such we believe thatthe company would be an attractive acquisition target. In particular, Actelionand Gilead have complementary franchises and would be potential acquirers.IncyteIncyte is a biopharmaceutical company focused on oncology and inflammatorydiseases. The company has developed a Jak inhibitor, Jakafi, for the treatmentof myelofibrosis (a hematological disorder which causes scarring of the bonemarrow). Jakafi causes profound symptomatic benefits and has been shown toextend patient survival. The drug was launched in 2011 and continues to showsteady growth in both the U.S. and the E.U. (licensed to Novartis outside theU.S.).Jakafi was recently tested in a phase II trial of pancreatic cancer. The trialdemonstrated that in a sub-population, Jakafi doubled patient survival.Previously there was no support for a role for Jakafi in solid tumors, so therelease of positive results dramatically increased Incyte's share price.Details from the trial, including the disclosure of the biomarker to select forpatients that may benefit from the drug, will be presented in June at theAmerican Society of Clinical Oncology meeting (ASCO). There is now enthusiasmthat based on this biomarker, Jakafi may benefit patients with a broad range ofsolid tumors.Additionally, Incyte is developing an IDO inhibitor for cancer. IDO plays arole in regulating immune response. By blocking IDO with an inhibitory drug,the immune system may be activated to fight cancer. The drug is currently beingtested in a phase I trial in combination with Yervoy for melanoma. Initial datasuggests that significantly more patients respond to the combination than wouldbe expected to respond to Yervoy alone, providing some proof-of concept for IDOinhibition. If successful in further trials, the IDO inhibitor could be ablockbuster opportunity for Incyte.Ono PharmaceuticalOno Pharmaceutical Co. Ltd. is a mid-tier Japanese pharmaceutical company basedin Osaka, Japan. While primarily focused on the domestic drug market there, thecompany came to prominence in 2012 as investors began to appreciate some of thepioneering work the company did in the field of immunotherapy for the treatmentof oncology.In collaboration with researchers at Kyoto University, Ono discovered andconducted early development on antibodies targeted to "PD-1", or ProgrammedDeath-1. PD-1 is a protein found on the surface of T-cells (immune systemcells) in the human body. This protein binds with a ligand, or "PD-L1", that isexpressed on tumor cells, and together they protect the cancer cell from attackby the body's own immune system. Ono discovered that antibodies directed toPD-1 (aka "anti-PD-1"), could block this interaction, thereby allowing theimmune system to resume the attack on the cancer.In the middle of the last decade, Ono collaborated with a U.S.-basedbiotechnology company, Medarex, and an early antibody candidate was identifiedand designated ONO-4538. Clinical development commenced and three years later,Medarex's commercial partner, the global drug company Bristol Myers-Squibb(BMS), began to recognize the potential application and value ofimmunotherapy-based drugs. Thus, BMS acquired Medarex and secured global rightsto ONO-4538 (ex-Japan).Today, ONO-4538 is more formally known as nivolumab. BMS has demonstratedproof-of-concept in a host of tumor types including skin, kidney, and lungcancers. A hallmark of anti-PD-1 therapy compared to current cancer regimenssuch as chemotherapy or targeted therapy is the incredible durability ofresponse in patients who do respond. Or, put another way, patients who respondto nivolumab therapy may in fact be "cured" of their cancer. While datacontinues to mature, BMS has shown that some patients with advanced disease,who normally only live for weeks or months, can live for years after nivolumabtherapy.Ono and BMS are collaborating on at least seven other solid tumor types, suchas liver, pancreatic, stomach, head & neck, and breast cancers. Utility inblood cancers and virology (most notably HIV) is also being explored. Thecommercial potential of nivolumab across such a large array of neoplasms istruly unprecedented. Given the putative efficacy profile and potential forcure, pricing of therapy will easily eclipse $100,000 per patient, if not more,in developed markets. Combined with the significant prevalence of cancerpatients globally, a peak sales potential in excess of $10 billion per annum ispossible. Ono maintained commercial rights to nivolumab in Japan, the secondlargest oncology market in the world. Moreover, with significant royalties fromBMS due to Ono, the holders of the PD-1 patent estate, we expect nivolumab tobe truly transformative to the profitability of the company.IlluminaIllumina remains one of our core positions within the portfolio. Continuedinnovation fuelling its current competitive advantage in the fast growinggenomics sequencing market has allowed the investment to outperform both thebroad market and the healthcare sector by a significant margin. Illumina'sproducts are making a significant impact on research and promise to improve theway patients are treated as medicine becomes more personalized.Illumina - enabling scientific breakthroughsIllumina participates in a fast growing genomics research market providingnext-generation sequencing instruments to multiple end-markets. Next-generationsequencing enables researchers and clinicians to decode the genomic patternsunderlying the fundamental biology for all organisms. Human genome sequencinghas changed dramatically since the very first genome was sequenced in 2001 at atotal cost of $100mm. Since the assembly of the first human genome on firstgeneration sequencing instruments, the cost of sequencing has precipitouslyfallen outpacing Moore's Law. Based on the most recent quarterly data providedby NHGRI (National Human Genome Research Institute), the cost of a fullyassembled genome currently stands at approximately $4,000. This drop has mainlybeen enabled by Illumina's technology. Later in 2014, with Illumina's newlyintroduced instrument, HiSeq X Ten, the cost of a whole human genome willlikely reach a price point of $1,000, which is considered the "holy grail" ofgenomics research.Why sequence the genome?Unlocking the biological code that enables our body to function cansignificantly add to our understanding of diseases, traits and physiology.Simply put, our genome comprising of three billion base pairs is the map to ourbody. The scientific and clinical knowledge gained through understanding ourgenetic make-up will greatly increase our knowledge of how our proteins arecoded and its impact on disease onset and treatments, metabolisms, and otherpersonal traits.Illumina's positioning in genetic analysisIllumina, as a forerunner in technology innovation, currently is the dominantmarket leader in next generation sequencing with approximately 70% market sharewith the remainder being split by three companies (Thermo Fisher, Roche, andPacific BioSciences). As Illumina continues to push its technology - drivingthe cost of sequencing lower- it has created market segments that previouslydidn't exist. A once cost prohibitive research for many, now enabled by thepromise of the $1,000 genome price, has democratized the research field.Sequencing human genome at scale is now becoming a realistic research area.Illumina's technology has significantly advanced our understanding of thegenome.                    Instrument cost       Throughput         ApplicationHiSeq X                High cost          Super high      Population studiesHiSeq 2500             High cost             High       Oncology/Reproductive                                                                healthNextSeq 500             Low cost            Medium        Hospital/ClinicalMiSeq                   Low cost          Low/Medium      Hospital/ClinicalIllumina - expanding applications, $20BN total addressable market (TAM)The current pace of innovation by Illumina in the genomics research market hasopened up new market opportunities for next generation sequencing. Managementhighlighted these existing current market opportunities at a recent investorevent valuing the addressable market at $20BN, conservatively.The oncology market is Illumina's largest market opportunity currently. Theevolving understanding of the underlying biology of cancer is fundamentallychanging how clinicians are treating the disease category. High-throughputgenomic research enabled by sequencing and other technologies over the lastdecade has shifted our view of cancer from simple anatomic views to genomicviews targeting the underlying biology and mutations.Applications within oncology vary from initial predictive testing to providingnecessary information to helping to personalize treatment decisions for eachindividual patient.Population sequencing - a new frontier of genomic researchAs mentioned earlier, Illumina's recent product announcement and the ensuinglaunch of its HiSeq X Ten has been showcased as the instrument that can takegenomic research to the next level. HiSeq X Ten promises to enable superhigh-throughput scientific research. With this product launch, Illumina hasfurther separated itself from the rest of its competitors in sequencing,offering whole genome sequencing at a cost of only $1,000 per sample. We expectthis will enable broader population sequencing studies to get additionalinsight into biology. As more genomic data are pulled together through thesewide-net population studies, researchers should gain clearer understanding intovarious mutations and genomic heterogeneity.                                             HiSeq 2500          HiSeq X                            Price               $740k              $1m                        Output per run           1Tb              1.8Tb                        Output per day          167Gb             600GbIllumina - best in class life sciences assetAs discussed, Illumina's technology has significantly benefited genomicresearch. We expect the company to continue to be successful as it rolls outnew products that will enable additional research applications.Strategic Report / OrbiMed Capital LLCFirm HistoryOrbiMed's investment business was founded in 1989 with a vision to investacross the spectrum of healthcare companies: from venture capital start-ups tolarge multinational companies.Beginning with our first public equity fund in 1989, we expanded to includelong/short equity and private equity investments in 1993. In 2007 the firmexpanded to Asia, opening offices in Mumbai and Shanghai, and launching a fundfocused on private equity healthcare opportunities in China and India. In 2010we expanded to the Middle East, opening an office in Israel to seek innovativelife sciences venture capital opportunities across the region. In 2011 OrbiMedlaunched a Royalty Opportunities fund, focused on investing in healthcareroyalty streams.Today, OrbiMed has a singular focus on seeking successful investments on aworldwide basis across the entire spectrum of private and publicly-traded lifesciences companies. With approximately $11 billion in net assets undermanagement, OrbiMed ranks as the world's largest healthcare-dedicatedinvestment firm.OrbiMed's investment professionals possess a combination of extensivescientific, medical, and financial expertise. The following four individualsrepresent the portfolio management team for the Company:The OrbiMed Team for the CompanyMr. Samuel D. Isaly is the Managing Partner of OrbiMed. Mr. Isaly is one of theworld's most recognised healthcare fund managers and has been active in globalhealthcare investing and analysis since 1968 when he joined Chase ManhattanBank in New York. During his career, Mr. Isaly has been a pharmaceuticalanalyst with Chase Manhattan Bank, Merrill Lynch, Legg Mason, and S.G. Warburg.Mr. Isaly launched OrbiMed's asset management business in 1989. Mr. Isaly has aB.A. in Economics from Princeton University and a M. Sc. (Econ.) from TheLondon School of Economics.Mr. Sven H. Borho, CFA, is a founding Partner of OrbiMed. Mr. Borho's biographycan be found within the Directors' biography.Mr. Geoffrey C. Hsu, CFA, is a Partner at OrbiMed. He joined OrbiMed in 2002 asa biotechnology analyst. Prior to joining OrbiMed, he worked as a financialanalyst in the healthcare investment banking group at Lehman Brothers. Mr. Hsureceived his A.B. degree summa cum laude from Harvard University and holds anM.B.A. from Harvard Business School. Prior to business school, he spent twoyears studying medicine at Harvard Medical School.Mr. Richard D. Klemm, Ph.D., CFA, is a Public Equity Partner focused onbiotechnology companies. He completed a Ph.D. from the Massachusetts Instituteof Technology in molecular biology in 2000. Dr. Klemm has published scientificarticles in the fields of DNA replication and transcription. He received a B.A.from the University of California, Berkeley in 1994 with majors in molecularand cell biology and economics.Haige Lu, Ph.D, is an Analyst focused on biotechnology companies. Prior tojoining OrbiMed, he worked as a Research Fellow at Memorial Sloan-KetteringCancer Centre. He received his Ph.D. from Stanford University in ChemicalBiology and his B.S. in Chemistry from Peking University in China.Strategic Report / Principal Contributors to and Detractors from                               Net Asset ValuePrincipal Contributors to and Detractors from Net Asset Value Performance forthe Year to 31 March 2014Top Five Contributors                                                     Contribution                                                              for                                                      the year to  Contribution                                                                            per                                                    31 March 2014         share                                                            £'000      (pence)\*Incyte                                                     14,071          20.7Illumina                                                   11,430          16.8Biogen Idec                                                 8,406          12.3Regeneron Pharmaceuticals                                   7,759          11.4InterMune                                                   7,189          10.5                                                           48,855          71.7Top Five Detractors                                                     Contribution                                                              for                                                      the year to  Contribution                                                                            per                                                    31 March 2014         share                                                            £'000      (pence)\*Infinity                                                 (17,603)        (25.8)Dynavax                                                   (2,595)         (3.8)Exelixis                                                  (2,349)         (3.5)Prosensa                                                  (1,243)         (1.8)Raptor Pharmaceuticals                                    (1,105)         (1.6)                                                         (24,895)        (36.5)\* based on 68,115,445 ordinary shares being the weighted average number ofshares in issue for the year ended 31 March 2014.On behalf of the BoardThe Rt Hon Lord Waldegrave of North HillChairman22 May 2014Governance / Board of Directors       The Rt Hon Lord Waldegrave Of             Sven Borho       North                                                 Sven Borho joined the Board in       Hill Chairman                             2006 and is a founding Partner                                                 of OrbiMed, the Company's       The Rt Hon Lord Waldegrave of             Investment Manager. He heads       North Hill joined the Board in            the public equity team and is       June 1998. He is Provost of               the portfolio manager for       Eton College, Chairman of                 OrbiMed's public equity and       Coutts and Co Limited and                 hedge funds. Sven has played       Chairman of the Royal Mint                an integral role in the growth       Advisory Committee. He was                of OrbiMed's asset management       formerly Vice-Chairman of the             activities. In 1991 he joined       Investment Banking Department             OrbiMed's predecessor and was       at UBS, Chairman of the Global            promoted to portfolio manager       Financial Institutions Group              in 1993. He studied business       at Dresdner Kleinwort                     administration at Bayreuth       Wasserstein and a Director of             University in Germany and       Fleming Family Partners. From             received a M.Sc. (Econs.),       1979 to 1997, he was MP for               Accounting and Finance, from       Bristol West holding a number             The London School of       of Cabinet posts including                Economics.       Secretary of State for Health.       Professor Dame Kay Davies, DBE            Paul Gaunt       Professor Dame Kay Davies DBE             Paul Gaunt joined the Board in       joined the Board in March                 June 1997. Paul is       2012. She is the Dr Lee's                 self-employed and has over 30       Professor of Anatomy and                  years' experience in the       Associate Head of the Medical             investment industry. He was       Sciences Division at the                  formerly Senior Investment       University of Oxford and a                Manager and an Assistant       fellow of Hertford College.               General Manager of The       She is also a Director of the             Equitable Life Assurance       MRC Functional Genomics Unit              Society and a Director of       at Oxford, an Independent                 Worldwide Healthcare Trust       Director of UCB Pharma S.A,               PLC, Brit Insurance Holdings       Deputy Chairman of the                    PLC and of Oasis Healthcare       Wellcome Trust and a member of            plc. Paul is also a Director       the Scientific Advisory Boards            of RCM Technology Trust PLC.       of biopharmaceutical companies       UCB Pharma S.A. and ProSensa       plc and a consultant to drug       discovery company Summit plc.       Dr John Gordon                            Peter Keen       Dr John Gordon joined the                 Peter Keen has served on the       Board in June 1997 and has                Board as a Director since the       been designated as the Senior             launch of the Company in June       Independent Director; he is               1997 and is Chairman of the       also Chairman of the                      Audit and Management       Remuneration Committee. Dr                Engagement Committee. A       Gordon is Chairman of, and                Chartered Accountant he has       employed by, Quercus                      nearly 30 years experience in       Management Limited, Chairman              the management and financing       of the William Harvey Research            of life science businesses. He       Institute in London and Senior            is Chief Executive of the       Adviser of Cardeas Pharma in              technology investment firm       Seattle. He has previously                Cambridge Innovation Capital       acted as Director of several              plc and has served on the       biotechnology companies, as               board of many private and       well as working at Beecham                public companies. He is       Research Laboratories,                    currently the Senior       Cambridge University and the              Independent Director of Abcam       Medical Research Council.                 plc and a Director of MRC                                                 Technology Ltd. He was                                                 formerly Finance Director of a                                                 number of privately held                                                 biopharmaceutical companies                                                 and a co-founder of       Andrew Joy                                Chiroscience Group plc.       Andrew Joy joined the Board in     All Directors, with the exception of       March 2012. He was one of the      Sven Borho, are members of the Audit       founding Partners of Cinven        and Management Engagement,       where he continues as a Senior     Nominations and Remuneration       Advisor. He is a Senior            Committees.       Advisor of FF&P (Fleming       Family & Partners) and             All members of the Board are       Chairman of the private equity     non-executive Directors, each of whom       sub-committee. Mr. Joy has         is independent of the Investment       been Chairman or Director of       Manager, with the exception of Mr.       numerous growing companies         Sven Borho who is a Founding General       over the past 30 years. He is      Partner of OrbiMed, the Company's       a former Chairman of the BVCA      Investment Manager and is not       (British Venture Capital and       considered to be an Independent       Private Equity Association)        Director, none of the Directors have       and Director of the EVCA.          been employed by any of the companies                                          in which the Company holds an                                          investment, or any of the Company's                                          service providers.Scheduled MeetingsThe table below sets out the number of scheduled Board and Committee meetingsheld during the year ended 31 March 2014 and the number of meetings attended byeach Director.                                               Audit and                                              Management                                              Engagement Nominations Remuneration                                        Board  Committee   Committee    CommitteeNumber of meetings held in 2013/          (4)        (3)         (1)          (1)14:The Rt Hon Lord Waldegrave of               4          3           1            1North HillSven Borho^                                 4          -           -            -Professor Dame Kay Davies, DBE              4          2           1            1Paul Gaunt                                  4          3           1            1Dr John Gordon                              4          2           1            1Andrew Joy                                  4          3           1            1Peter Keen                                  4          3           1            1All of the Directors attended the Annual General Meeting held on 9 July 2013.^ Sven Borho is not a member of any of the Company's committees.In addition to the scheduled Board meetings there were a number of unscheduledBoard Meetings to consider matters such as the issuance of shares, includingthe Prospectus issued in July 2013, the regulations concerning the AlternativeInvestment Fund Managers Directive and matters concerning the Board's decisionto undertake an audit tender.Directors' InterestsThe beneficial interests of the Directors and their families in the Companywere as set out below:                                                   Number of shares held as at                                                     22 May  31 March  31 March                                                       2014     2014\*     2013\*The Rt Hon Lord Waldegrave of North Hill             58,716    58,716    58,716Sven Borho                                          236,218   236,218   236,218Professor Dame Kay Davies, DBE                            -         -         -Paul Gaunt                                                -         -         -Dr John Gordon                                       70,000    70,000    70,000Andrew Joy                                           25,000    25,000    25,000Peter Keen                                           55,000    55,000    45,000\*Audited information.None of the Directors was granted or exercised rights over shares during theyear. Sven Borho is a Partner at OrbiMed, the Company's Investment Manager,which is party to the Investment Management Agreement with the Company andreceives feesAs at 22 May 2014, the latest practicable date before publication of the AnnualReport there have been no changes in the interests of the Directors shares ofthe Company.Governance / Report of the DirectorsIn accordance with the requirements of the Companies Act 2006 (the "Act") andthe UK Listing and Transparency Rules, the Directors present their annualreport on the affairs of the Company, together with the audited FinancialStatements and the Independent Auditors' Report for the year ended 31 March2014.The Corporate Governance Statement forms part of this Report of the Directors.Business and Status of the CompanyThe Company is registered as a public limited company and is an investmentcompany within the terms of Section 833 of the Act. Its shares are listed onthe Official List of the UK Listing Authority and traded on the main market ofthe London Stock Exchange which is a regulated market as defined in Section1173 of the Act.The Company has received approval from HM Revenue & Customs as an authorisedinvestment trust under Sections 1158 and 1159 of the Corporation Tax Act 2010("CTA 2010"), for the year commencing 1 April 2012. This approval is subject tothere being no subsequent enquiry under corporation tax self-assessment. In theopinion of the Directors, the Company continues to direct its affairs so as toenable it to qualify for such approval.Continuation of the CompanyA resolution was passed at a General Meeting of the Company held on 4 December2009, that the Company continue as an investment trust for a further five yearperiod (from the Annual General Meeting held in 2010). In accordance with theCompany's Articles of Association, shareholders will have an opportunity tovote on the continuation of the Company at the Annual General Meeting in 2015and every five years thereafter.Investment ObjectiveThe Biotech Growth Trust PLC seeks capital appreciation through investment inthe worldwide biotechnology industry. In order to achieve its investmentobjective, the Company invests in a diversified portfolio of shares and relatedsecurities in biotechnology companies on a worldwide basis.Investment PolicyIn order to achieve its investment objective, the Company invests in adiversified portfolio of shares and related securities in biotechnologycompanies on a worldwide basis.Results and DividendThe results attributable to shareholders for the year and the transfer toreserves are shown within this announcement. No dividend is proposed in respectof the year ended 31 March 2014 (2013: nil).Loan FacilityThe Company's borrowing requirements are met through the utilisation of a loanfacility, repayable on demand, provided by Goldman Sachs & Co. New York.(Further details can be found in note 13).Share CapitalAs part of the package of measures adopted in 2005 by the Board to improve theattraction of the Company's shares to new investors and also to provide theprospect of a sustained improvement in the rating of the Company's shares, anactive discount management policy was implemented to buy-back shares to eitherhold in treasury or for cancellation if the market price is at a discountgreater than 6% to net asset value per share. As at 31 March 2014, the discountwas 6.4%, which was close to the stated target of 6%. The making and timing ofany share buy-back remains at the absolute discretion of the Board. Authorityto buy-back up to 14.99% of the Company's issued share capital is sought ateach Annual General Meeting. During the year a total of 662,309 shares werebought back to hold in treasury representing 1.03% of the issued share capitalat the beginning of the year. The purchases were made at £5.1409 per share and£5.1159 per share at a cost of £3,420,000 (including expenses) and at adiscount of 6.2% and 6.8% to the net asset value per share. In addition duringthe year, 4,420,000 new shares were issued raising £17,715,000 of new funds forthe Company. Subsequent to the year end to 22 May 2014 a further 107,128 shareswere bought back to hold in treasury. As at the date of this report there were68,886,347 (including 769,437 shares held in treasury) shares in issue.Company ManagementInvestment ManagerThe Company's investment portfolio is managed by OrbiMed Capital LLC("OrbiMed"). OrbiMed have been engaged under the terms of an InvestmentManagement Agreement (the "IMA") effective from 26 April 2005. The InvestmentManager receives a periodic fee equal to 0.65% p.a. of the Company's net assetvalue. The IMA may be terminated by either party giving notice of not less than12 months. The Investment Manager under the terms of the IMA provides, interalia, the following services:seeking out and evaluating investment opportunities;recommending the manner by which monies should be invested, disinvested,retained or realised;advising on how rights conferred by the investments should be exercised;analysing the performance of investments made; andadvising the Company in relation to trends, market movements and other matterswhich may affect the investment policy of the Company.The proportion of the Company's assets committed for investment in OrbiMed AsiaPartners L.P., a limited partnership managed by OrbiMed Asia G.P., L.P., anaffiliate of the Company's Investment Manager, is excluded from the InvestmentManagement fee calculation.Performance FeeDependent on the level of long-term outperformance of the Company, theInvestment Manager and the Manager are entitled to the payment of a performancefee. The performance fee is calculated by reference to the amount by which theCompany's net asset value (\`NAV') performance has outperformed the NASDAQBiotechnology Index (sterling adjusted), the Company's benchmark index.The fee is calculated quarterly by comparing the cumulative performance of theCompany's NAV with the cumulative performance of the benchmark since thecommencement of the performance fee arrangement on 30 June 2005. Theperformance fee amounts to 16.5% of any outperformance over the benchmark, theInvestment Manager receiving 15% and the Manager receiving 1.5% respectively.Provision is also made within the daily NAV per share calculation as requiredand in accordance with generally accepted accounting standards.In order to ensure that only sustained outperformance is rewarded, at eachquarterly calculation date any performance fee is based on the lower of:(i)The cumulative outperformance of the portfolio over the benchmark as at thequarter end date; and(ii)The cumulative outperformance of the portfolio over the benchmark as at thecorresponding quarter end date in the previous year.In addition, a performance fee only becomes payable to the extent that thecumulative outperformance gives rise to a total fee greater than the total ofall performance fees paid to date.During the year performance fee amounts totaling £2,663,000 crystallised inrelation to maintained outperformance of which £982,000 remained payable at 31March 2014 (31 March 2013: £1,640,000 crystallised). See note 3 for furtherdetails.The proportion of the Company's assets invested in OrbiMed Asia Partners L.P.is excluded from the Investment Manager's performance fee calculation.ManagerFrostrow Capital LLP ("Frostrow" or the "Manager"), acts as the Company'sManager, Company Secretary and Administrator. Frostrow is an independentprovider of services to the investment companies sector and currently has fiveother investment trust clients whose assets totalled approximately £3.8 billionas at 31 March 2014. The Manager receives a periodic fee equal to 0.30% perannum of the Company's market capitalisation, plus a fixed amount equal to £60,000 per annum. The notice period in the Company Management, CompanySecretarial and Administration Agreement (the "Agreement") with the Manager,dated 5 April 2007, is not less than 12 months. Termination can be at theinstigation of either party.The Manager, under the terms of the Agreement provides, inter alia, thefollowing services:marketing and shareholder services;administrative services;advice and guidance in respect of corporate governance requirements;maintaining adequate accounting records in respect of Company dealing,investments, transactions, dividends and other income, the income account,statement of financial position and cash books and statements;preparation and dispatch of the audited annual, and the unaudited half-year,report and financial statements and interim management statements; andattending to general tax affairs where necessary.Investment Manager and Manager Evaluation and Re-AppointmentThe performance of the Investment Manager and the Manager is reviewedcontinuously by the Audit and Management Engagement Committee (the "Committee")with a formal evaluation being undertaken each year. As part of this process,the Committee monitors the services provided by the Investment Manager and theManager and receives regular reports and views from them. The Committee alsoreceives comprehensive performance measurement reports to enable it todetermine whether or not the performance objectives set by the Board have beenmet. The Committee reviewed the appropriateness of the appointment of theInvestment Manager and the Manager in February 2014 with a recommendation beingmade to the full Board.The Board believes the continuing appointment of the Investment Manager and theManager, under the terms described above, is in the interests of shareholdersas a whole. In coming to this decision, it also took into consideration thefollowing additional reasons:the quality and depth of experience allocated by the Investment Manager to themanagement of the portfolio and the level of performance of the portfolio inabsolute terms and also by reference to the benchmark index; andthe quality and depth of experience of the company management, companysecretarial, administrative and marketing team that the Manager allocates tothe management of the Company.DirectorsDirectors' FeesA report on Directors' Remuneration and also the Directors' Remuneration PolicyReport are set out within this announcement.Directors' & Officers' Liability Insurance CoverDirectors' & Officers' liability insurance cover was maintained by the Boardduring the year ended 31 March 2014. It is intended that this policy willcontinue for the year ended 31 March 2015 and subsequent years.Directors' IndemnitiesAs at the date of this report, indemnities are in force between the Company andeach of its Directors under which the Company has agreed to indemnify eachDirector, to the extent permitted by law, in respect of certain liabilitiesincurred as a result of carrying out his/her role as a Director of the Company.The Directors are also indemnified against the costs of defending any criminalor civil proceedings or any claim by the Company or a regulator as they areincurred provided that where the defence is unsuccessful the Director mustrepay those defence costs to the Company. The indemnities are qualifying thirdparty indemnity provisions for the purposes of the Companies Act 2006.A copy of each deed of indemnity is available for inspection at the Company'sregistered office during normal business hours and will be available forinspection at the Annual General Meeting.Substantial ShareholdingsThe Company was aware of the following substantial interests in the votingrights of the Company as at 22 May 2014, the latest practicable date beforepublication of the annual report.                                              22 May 2014      31 March 2014                                                        % of              % of                                                      Issued            Issued                                              No. of   share    No. of   shareShareholders                                  shares capital    shares capitalHargreaves Lansdown                        5,395,362    7.91 5,679,385    8.32Newton Investment Management               5,337,105    7.83 5,611,587    8.23East Riding of Yorkshire                   5,200,000    7.62 5,200,000    7.62Reliance Mutual                            3,454,450    5.06 3,454,450    5.06Alliance Trust Savings                     2,691,943    3.95 2,749,643    4.03Hansa Capital Partners                     2,364,629    3.47 2,364,629    3.47JPMorgan Asset Management                  2,048,833    3.00 2,048,833    3.00As at 31 March 2014 the Company had 68,886,347, (including 662,309 shares heldin treasury) shares in issue. As at 22 May 2014 the Company had 68,886,347(including 769,437 shares held in treasury) shares in issue.Beneficial Owners of Shares - Information RightsBeneficial owners of shares who have been nominated by the registered holder ofthose shares to receive information rights under section 146 of the CompaniesAct 2006 are required to direct all communications to the registered holder oftheir shares rather than to the Company's registrar, Capita Asset Services, orto the Company directly.Individual Savings AccountsThe Company's shares are eligible to be held in the stocks and shares componentof an ISA or Junior ISA, subject to applicable annual subscription limits (£11,880 for an ISA and £3,540 for a Junior ISA for the 2014/2015 tax year).Investments held in ISAs or Junior ISAs will be free of UK tax on both capitalgains and income. The opportunity to invest in Ordinary Shares through an ISAis restricted to certain UK resident individuals aged 18 or over. Junior ISAsare available for UK resident children aged under 18 and born before 1September 2002 or after 2 January 2011. Sums received by a shareholder on adisposal of Ordinary Shares held within an ISA or Junior ISA will not counttowards the shareholder's annual limit. Individuals wishing to invest inOrdinary Shares through an ISA should contact their professional advisersregarding their eligibility as should individuals wishing to invest through aJunior ISA for children under 18 years old.With effect from 1 July 2014 the government announced that ISAs will bereformed into a new simpler product, the New ISA ("NISA") with equal limits forcash, and stocks and shares.The overall NISA limits for 2014/15 will be £15,000 which offers the option tosave in cash, stocks and shares, or any combination of two.Retail Investors advised by IFAsThe Company currently conducts its affairs so that its shares can berecommended by Independent Financial Advisers ("IFAs") in the UK to ordinaryretail investors in accordance with the Financial Conduct Authority ("FCA")rules in relation to non-mainstream investment products and intends to continueto do so. The shares are excluded from the FCA's restrictions which apply tonon-mainstream investment products because they are shares in an authorisedinvestment trust.Financial InstrumentsThe Company's financial instruments comprise its portfolio, cash balances,debtors and creditors that arise directly from its operations, such as salesand purchases awaiting settlement and accrued income. The financial riskmanagement and policies arising from its financial instruments are disclosed innote 13 to the accounts.Audit TenderAs reported in the Company's 2013 Annual Report, Grant Thornton UK LLP havebeen in post for over 16 years and the Board, after consideration, agreed thata tender process should take place.Following the formal tender process held in March 2014, it is proposed that onthe recommendation of the Audit and Management Engagement Committee, Ernst &Young LLP be appointed as Auditor of the Company. A resolution for theirappointment will be proposed at the forthcoming Annual General Meeting.Please note that further details of the audit tender process can be foundwithin the Audit and Management Engagement Committee Report.Awareness and Disclosure of Relevant Audit InformationSo far as the Directors are aware, there is no relevant audit information ofwhich the Auditor is unaware. The Directors have taken all steps they ought tohave taken to make themselves aware of any relevant audit information and toestablish that the Auditor is aware of that information.S.1 2007/1093 C.49 Commencement No2. Order 2007The following disclosures are made in accordance with S.1 2007/1093 C.49Commencement No2. Order 2007Capital structureThe Company's capital structure is composed solely of Ordinary Shares. Detailsare given in note 11 to the accounts.Voting rights in the Company's sharesDetails of the voting rights in the Company's shares at the date of this annualreport are given in note 9 to the Notice of Annual General Meeting.Anti-Bribery and Corruption PolicyThe Board has adopted a zero tolerance approach to instances of bribery andcorruption. Accordingly it expressly prohibits any Director or associatedpersons when acting on behalf of the Company, from accepting, soliciting,paying, offering or promising to pay or authorise any payment, public orprivate, in the United Kingdom or abroad to secure any improper benefit forthemselves or for the Company.Political DonationsThe Company has not in the past and does not intend in the future to makecharitable or political donations.Global Greenhouse Gas EmissionsThe Company has no greenhouse gas emissions to report from its operations, nordoes it have responsibility for any other emissions producing sources underLarge and Medium sized Companies and Groups (Accounts and Reports) Regulations2008 (as amended), (including those within our underlying investmentportfolio).By order of the BoardFrostrow Capital LLPCompany Secretary22 May 2014Governance / Statement of Directors' ResponsibilitiesCompany law in the United Kingdom requires the Directors to prepare financialstatements for each financial year. The Directors are responsible for preparingthe financial statements in accordance with applicable law and regulations. Inpreparing these financial statements, the Directors have:selected suitable accounting policies and applied them consistently;made judgments and estimates that are reasonable and prudent;followed applicable international accounting standards; andprepared the financial statements on a going concern basis.The Directors are responsible for keeping adequate accounting records whichdisclose with reasonable accuracy at any time the financial position of theCompany and enable them to ensure that the financial statements comply with theCompanies Act 2006.They are also responsible for safeguarding the assets of the Company and hencefor taking reasonable steps for the prevention and detection of fraud and otherirregularities.The Directors are responsible for ensuring that the Report of the Directors andother information included in the Annual Report is prepared in accordance withcompany law in the United Kingdom. They are also responsible for ensuring thatthe annual report includes information required by the Listing Rules of theFinancial Conduct Authority.The financial statements are published on the Company's website(www.biotechgt.com) and via the website of the Manager (www.frostrow.com). Themaintenance and integrity of these websites, so far as they relate to theCompany, is the responsibility of the Manager. The work carried out by theAuditors does not involve consideration of the maintenance and integrity ofthese websites and, accordingly, the Auditors accept no responsibility for anychanges that have occurred to the financial statements since they wereinitially presented on these websites. Visitors to the websites need to beaware that legislation in the United Kingdom governing the preparation anddissemination of the financial statements may differ from legislation in theirjurisdiction.Going ConcernThe Directors believe that it is appropriate to adopt the going concern basisin preparing the accounts as the assets of the Company consist mainly ofsecurities that are readily realisable and, accordingly, the Company hasadequate financial resources to continue in operational existence for theforeseeable future.Responsibility Statement of the Directors in respect of the annual financialreportThe Directors, whose details can be found within the directors biographies,confirm to the best of their knowledge that:the Financial Statements, within this Annual Report, have been prepared inaccordance with applicable accounting standards, give a true and fair view ofthe assets, liabilities, financial position and the profit for the year ended31 March 2014;the Chairman's Statement, Strategic Report and the Report of the Directorsinclude a fair review of the information required by 4.1.8R to 4.1.11R of theFCA's Disclosure and Transparency Rules; andthe annual report and financial statements taken as a whole are fair, balancedand understandable and provide the information necessary to assess theCompany's performance, business model and strategy.On behalf of the BoardThe Rt Hon Lord Waldegrave of North HillChairman22 May 2014Governance / Corporate GovernanceThis Statement forms part of the Report of the Directors.The Board confirms that, with the exception of the below, it has in allrespects met its obligations under the Listing Rules and the UK CorporateGovernance Code throughout the period of this report:Director Tenure (Provision B.1.1 of the UK Corporate Governance Code);The role of the Chief Executive (Provision A.2.1 of the UK Corporate GovernanceCode);Executive Directors Remuneration Provisions D.2.1, D.2.2, D.2.3 and D.2.4 ofthe UK Corporate Governance Code); andThe need for an internal audit (Provision C.3.6 of the UK Corporate GovernanceCode).For reasons set out in the AIC Guide and in the preamble to the AIC Code, theBoard considers these provisions are not relevant to the position of theCompany, being an externally managed investment trust. Therefore with theexception of Director tenure, 36 and the need for an internal audit function,the Company has not reported further in respect of these provisions.The Principles of the AIC CodeThe AIC Code is made up of twenty-one principles split into threesections covering:- The Board- Board Meetings and relations with OrbiMed and Frostrow- Shareholder CommunicationsAIC Code Principle               Compliance StatementThe Board1. The Chairman should be        The Chairman, The Rt Hon Lord Waldegrave ofindependent.                     North Hill, continues to be independent of the                                 Investment Manager. There is a clear division                                 of responsibility between the Chairman, the                                 Directors, Investment Manager, Manager and the                                 Company's other third party service providers.                                 The Chairman is responsible for the leadership                                 of the Board and for ensuring its                                 effectiveness in all aspects of its role.2. A majority of the Board       Mr. Sven Borho is a Founding General Partnershould be independent of the     of OrbiMed, the Company's Investment Managermanager.                         and is not considered to be an Independent                                 Director. The Board consists of six other                                 non-executive Directors, each of whom is                                 independent of the Investment Manager. None of                                 the Board members have been an employee of the                                 Company.3. Directors should be           All Directors will submit themselves forsubmitted for re-election at     annual re-election by shareholders.regular intervals. Nominationfor re-election should not be    The individual performance of each Directorassumed but be based on          standing for re-election is evaluated annuallydisclosed procedures and         by the remaining members of the Board and, ifcontinued satisfactory           considered appropriate, a recommendation isperformance.                     made that shareholders vote in favour of their                                 re-election at the Company's Annual General                                 Meeting to be held in July.                                 Dr John Gordon will not be seeking re-election                                 at this year's Annual General Meeting. He will                                 be succeeded as the Senior Independent                                 Director and Chairman of the Remuneration                                 Committee by Mr. Andrew Joy.4. The Board should have a       The Board, meeting as the Nominationpolicy on tenure, which is       Committee, considers the structure of thedisclosed in the annual          Board and recognises the need for progressivereport.                          refreshing of the Board.                                 The Board subscribes to the view expressed                                 within the AIC Code that long-serving                                 Directors should not be prevented from forming                                 part of an independent majority. It does not                                 consider that a Director's tenure necessarily                                 reduces his ability to act independently and,                                 following formal performance evaluations,                                 believes that each of those Directors is                                 independent in character and judgment and that                                 there are no relationships or circumstances                                 which are likely to affect their judgment. The                                 Board's policy on tenure is that continuity                                 and experience are considered to add                                 significantly to the strength of the Board                                 and, as such, no limit on the overall length                                 of service of any of the Company's Directors,                                 including the Chairman, has been imposed. In                                 view of its non-executive nature, the Board                                 considers that it is not appropriate for the                                 Directors to be appointed for a specified                                 term, although new Directors are appointed                                 with the expectation that they will serve for                                 a minimum period of three years subject to                                 shareholder approval.                                 The terms and conditions of the Directors'                                 appointments are set out in letters of                                 engagement which are available for inspection                                 on request at the office of Frostrow Capital                                 LLP, the Company's Manager, and from the                                 Company Secretary at the Company's Annual                                 General Meeting to be held in July.5. There should be full          The Directors' biographical details,disclosure of information        demonstrate the wide range of skills andabout the Board.                 experience that they bring to the Board.                                 Details of the Board's Committees and their                                 composition are set out within this                                 announcement.                                 The Audit and Management Engagement Committee                                 membership comprises all of the Directors whom                                 are considered independent. The Chairman of                                 the Company is a member of the Audit and                                 Management Engagement Committee, but does not                                 chair it. His membership of the Audit and                                 Management Engagement Committee is considered                                 appropriate given the Chairman's extensive                                 knowledge of the financial services industry.                                 The Remuneration Committee is comprised of all                                 Directors whom are considered independent. The                                 Senior Independent Director of the Company                                 acts as Chairman of this Committee in light of                                 the remit of the Committee.6. The Board should aim to       The Nomination Committee considers annuallyhave a balance of skills,        the skills possessed by the Board andexperience, length of service    identifies any skill shortages to be filled byand knowledge of the company.    new Directors.                                 When considering new appointments, the Board                                 reviews the skills of the Directors and seeks                                 to add persons with complementary skills or                                 who possess the skills and experience which                                 fill any gaps in the Board's knowledge or                                 experience and who can devote sufficient time                                 to the Company to carry out their duties                                 effectively.                                 The experience of the current Directors is                                 detailed in their biographies.                                 The Company is committed to ensuring that any                                 vacancies arising are filled by the most                                 qualified candidates and recognises the value                                 of diversity in the composition of the Board.                                 When Board positions become available as a                                 result of retirement or resignation, the                                 Company will ensure that a diverse group of                                 candidates is considered.7. The Board should undertake    During the year the performance of the Board,a formal and rigorous annual     its committees and individual Directorsevaluation of its own            (including each Director's independence) wasperformance and that of its      evaluated through a formal assessment processcommittees and individual        led by the Senior Independent Director. Thisdirectors.                       involved the circulation of a Board                                 effectiveness checklist, tailored to suit the                                 nature of the Company, followed by discussions                                 between the Senior Independent Director and                                 each of the Directors. The performance of the                                 Chairman was evaluated by the other Directors                                 under the leadership of the Senior Independent                                 Director. The review concluded that the Board                                 was working well.                                 The Board is satisfied that the structure, mix                                 of skills and operation of the Board continue                                 to be effective and relevant for the Company.8. Director remuneration         The Remuneration Committee annually reviewsshould reflect their duties,     the fees paid to the Directors and comparesresponsibilities and the value   these with the fees paid by the Company's peerof their time spent.             group and the investment trust industry                                 generally, taking into account the level of                                 commitment and responsibility of each Board                                 member. Details on the remuneration                                 arrangements for the Directors of the Company                                 can be found in the Directors' Remuneration                                 Policy Report and Directors' Remuneration                                 Report and in note 14 to the Accounts.                                 As all of Directors are non-executive, the                                 Board considers that it is acceptable for the                                 Senior Independent Director of the Company to                                 chair meetings when discussing Directors'                                 fees. The Senior Independent Director takes no                                 part in discussions regarding his own                                 remuneration.9. The independent directors     The Nomination Committee is comprised of allshould take the lead in the      Directors whom are independent. Subject toappointment of new directors     there being no conflicts of interest, alland the process should be        members of the Committee are entitled to votedisclosed in the annual          on candidates for the appointment of newreport.                          Directors and on recommending for                                 shareholders' approval the Directors seeking                                 re-election at the Annual General Meeting.10. Directors should be          New appointees to the Board are provided withoffered relevant training and    a full induction programme. The programmeinduction.                       covers the Company's investment strategy,                                 policies and practices. The Directors are also                                 given key information on the Company's                                 regulatory and statutory requirements as they                                 arise including information on the role of the                                 Board, matters reserved for its decision, the                                 terms of reference for the Board Committees,                                 the Company's corporate governance practices                                 and procedures and the latest financial                                 information. It is the Chairman's                                 responsibility to ensure that the Directors                                 have sufficient knowledge to fulfil their role                                 and Directors are encouraged to participate in                                 training courses where appropriate.                                 The Directors have access to the advice and                                 services of a Company Secretary through its                                 appointed representative which is responsible                                 to the Board for ensuring that Board                                 procedures are followed and that applicable                                 rules and regulations are complied with. The                                 Company Secretary is also responsible for                                 ensuring good information flows between all                                 parties.11. The Chairman (and the        Principle 11 applies to the launch of newBoard) should be brought into    investment companies and is therefore notthe process of structuring a     applicable to the Company.new launch at an early stage.Board Meetings and relations with OrbiMed and Frostrow12. Boards and managers should   The Board meets regularly throughout the yearoperate in a supportive,         and a representative of Investment Manager andco-operative and open            Manager is in attendance at each meeting andenvironment.                     Committee meetings. The Chairman encourages                                 open debate to foster a supportive and                                 co-operative approach for all participants.13. The primary focus at         The Board has agreed a schedule of mattersregular Board meetings should    specifically reserved for decision by thebe a review of investment        Board. This includes establishing theperformance and associated       investment objectives, strategy andmatters, such as gearing,        benchmarks, the permitted types or categoriesasset allocation, marketing/     of investments, the markets in whichinvestor relations, peer group   transactions may be undertaken, the amount orinformation and industry         proportion of the assets that may be investedissues.                          in any category of investment or in any one                                 investment, and the Company's share issuance                                 and share buy-back policies.                                 The Board, at its regular meetings, undertakes                                 reviews of key investment and financial data,                                 revenue projections and expenses, analyses of                                 asset allocation, transactions and performance                                 comparisons, share price and net asset value                                 performance, marketing and shareholder                                 communication strategies, the risks associated                                 with pursuing the investment strategy, peer                                 group information and industry issues.                                 The Audit and Management Engagement Committee                                 reviews the Company's risk matrix and the                                 performance and cost of the Company's third                                 party service providers.14. Boards should give           The Board is responsible for strategy and hassufficient attention to          established an annual programme of agendaoverall strategy.                items under which it reviews the objectives                                 and strategy for the Company at each meeting.15. The Board should regularly   The Audit and Management Engagement Committeereview both the performance      reviews annually the performance of Investmentof, and contractual              Manager and Manager. The Committee considersarrangements with, the           the quality, cost and remuneration methodinvestment manager and the       (including the performance fee) of the servicemanager (or executives of a      provided by Investment Manager and Managerself-managed company).           against their contractual obligations and the                                 Board receives regular reports on compliance                                 with the investment restrictions which it has                                 set. It also considers the performance                                 analysis provided by Investment Manager and                                 Manager.                                 The Audit and Management Engagement Committee                                 reviews the compliance and control systems of                                 both Investment Manager and Manager in                                 operation insofar as they relate to the                                 affairs of the Company and the Board                                 undertakes periodic reviews of the                                 arrangements with and the services provided by                                 the Custodian, to ensure that the safeguarding                                 of the Company's assets and security of the                                 shareholders' investment is being maintained.Governance / Corporate GovernanceAIC Code Principle               Compliance Statement16. The Board should agree       The Investment Management Agreement betweenpolicies with the investment     the Company and Investment Manager sets outmanager and the manager          the limits of Investment Manager's authority,covering key operational         beyond which Board approval is required. Theissues.                          Board has also agreed detailed investment                                 guidelines with Investment Manager, which are                                 considered at each Board meeting.                                 A representative of the Investment Manager and                                 Manager attends each meeting of the Board to                                 address questions on specific matters and to                                 seek approval for specific transactions which                                 Investment Manager is required to refer to the                                 Board.                                 The Board has delegated discretion to                                 Investment Manager to exercise voting powers                                 on its behalf, other than for contentious or                                 sensitive matters which are to be referred to                                 the Board for consideration.                                 The Board has reviewed the Investment                                 Manager's Proxy Voting & Class Action Policy.                                 Reports on commissions paid by Investment                                 Manager are submitted to the Board regularly.17. Boards should monitor the    The Board considers any imbalances in thelevel of the share price         supply of and the demand for the Company'sdiscount or premium (if any)     shares in the market and takes appropriateand, if desirable, take action   action when considered necessary.to reduce it.                                 The Board considers the discount or premium to                                 net asset value of the Company's share price                                 at each Board meeting and reviews the changes                                 in the level of discount or premium and in the                                 share price since the previous Board meeting                                 and over the previous twelve months.                                 At each meeting the Board reviews reports from                                 both the Investment Manager and Manager on                                 marketing and shareholder communication                                 strategies. It also considers their                                 effectiveness as well as measures of investor                                 sentiment and any recommendations on issuance                                 and share buy-backs.18. The Board should monitor     The Audit and Management Engagement Committeeand evaluate other service       reviews, at least annually, the performance ofproviders.                       all the Company's third party service                                 providers, including the level and structure                                 of fees payable and the length of the notice                                 period, to ensure that they remain competitive                                 and in the best interests of shareholders.                                 The Committee also reviews reports from the                                 principal service providers on compliance and                                 the internal and financial control systems in                                 operation and relevant independent audit                                 reports thereon, as well as reviewing service                                 providers' anti-bribery and corruption                                 policies to address the provisions of the                                 Bribery Act 2010.Shareholder Communications19. The Board should regularly   A detailed analysis of the substantialmonitor the shareholder          shareholders of the Company is provided to theprofile of the company and put   Directors at each Board meeting.in place a system for            Representatives of Investment Manager andcanvassing shareholder views     Manager regularly meet with institutionaland for communicating the        shareholders and private client asset managersBoard's views to shareholders.   to discuss strategy and to understand their                                 issues and concerns and, if applicable, to                                 discuss corporate governance issues. The                                 results of such meetings are reported at the                                 following Board meeting.                                 Regular reports from the Company's broker are                                 submitted to the Board on investor sentiment                                 and industry issues.                                 Shareholders wishing to communicate with the                                 Chairman, or any other member of the Board,                                 may do so by writing to the Company, for the                                 attention of the Company Secretary at the                                 offices of Manager. All shareholders are                                 encouraged to attend the Annual General                                 Meeting, where they are given the opportunity                                 to question the Chairman, the Board and                                 representatives of the Investment Manager. The                                 Investment Manager will make a presentation to                                 shareholders covering the investment                                 performance and strategy of the Company at the                                 forthcoming Annual General Meeting to be held                                 in July. The Directors welcome the views of                                 all shareholders and place considerable                                 importance on communications with them.20. The Board should normally    All substantive communications regarding anytake responsibility for, and     major corporate issues are discussed by thehave a direct involvement in,    Board taking into account representations fromthe content of communications    Investment Manager, Manager, the Auditor,regarding major corporate        legal advisers and stockbroker.issues even if the manager isasked to act as spokesman.21. The Board should ensure      The Company places great importance onthat shareholders are provided   communication with shareholders and aims towith sufficient information      provide them with a full understanding of thefor them to understand the       Company's investment objective, policy andrisk/reward balance to which     activities, its performance and the principalthey are exposed by holding      investment risks by means of informativethe shares.                      annual and half-year reports and interim                                 management statements. This is supplemented by                                 the daily publication, through the London                                 Stock Exchange, of the net asset value of the                                 Company's shares.                                 The annual report provides information on                                 Investment Manager's investment performance,                                 portfolio risk and operational and compliance                                 issues. Further details on the risk/reward                                 balance are set out in note 13 to the                                 accounts.                                 The Investment Portfolio is listed within this                                 announcement..                                 The Company's website, www.biotechgt.com, is                                 regularly updated with monthly factsheets and                                 provides useful information about the Company                                 including the Company's financial reports and                                 announcements.Committees of the BoardThe Board has delegated certain responsibilities and functions to committees.Copies of the full terms of reference, which clearly define theresponsibilities of each committee, can be obtained from the Company Secretary,will be available for inspection at theAnnual General Meeting and can be found at the Company's website atwww.biotechgt.com. The membership of the Company's committees comprises thoseDirectors considered independent by the Board. The Remuneration Committee ischaired byDr John Gordon, the Nominations Committee is chaired by the Chairman of theCompany, The Rt Hon Lord Waldegrave of North Hill, and the Audit and ManagementEngagement Committee is chaired by Mr. Peter Keen.Nominations CommitteeThe Nominations Committee met on one occasion during the year and isresponsible for the Board appraisal process and for making recommendations tothe Board on the appointment of new Directors. Where appropriate, each Directoris invited to submit nominations and external advisers may be used to identifypotential candidates.Remuneration CommitteeThe Company's Remuneration Committee met on one occasion during the year as allDirectors are non executive. Throughout the life of the Company the level ofDirectors' fees is reviewed every two years relative to other comparableinvestment companies and in the light of Directors' responsibilities.Consistent with this policy as at 1 April 2014, the Directors' fees remainunchanged. Details of the fees paid to the Directors in the year under revieware detailed in the Directors' Remuneration Report and also the Directors'Remuneration Policy Report.Audit and Management Engagement CommitteeThe Audit and Management Engagement Committee (the "Committee") meets at leastthree times a year and is responsible for the review of the half-year andannual financial statements, the nature and scope of the external audit and thefindings therefrom and the terms of appointment of the Auditors, includingtheir remuneration and the provision of any non-audit services by them. Inaddition, the Committee is responsible for the review of the Company'sfinancial controls and of the Management and Investment Management Agreementsand of the services provided by the Manager and the Investment Manager.The Committee meets representatives of the Manager and Investment Manager andtheir Compliance Officers who report as to the proper conduct of business inaccordance with the regulatory environment in which the Company, Manager andInvestmentManager operate. The Company's Auditors also attend meetings of this Committeeat its request and report on their work procedures and their findings inrelation to the Company's statutory audit. They also have the opportunity tomeet with theCommittee without representatives of the Manager or the Investment Managerbeing present.Internal AuditThe Audit and Management Engagement Committee carries out an annual review ofthe need for an internal audit function. As the Company delegates to thirdparties its day-to-day operations and has no employees, it has determined thatthere are no requirements for an internal audit function.The Board applies the same standards to its service providers in theiractivities for the Company.A copy of the Company's anti-bribery and corruption policy can be found on itswebsite at www.biotechgt.com. The policy is reviewed regularly by the Audit andManagement Engagement Committee.Relations with ShareholdersThe Board reviews the shareholder register at each Board meeting. The Companyhas regular contact with its institutional shareholders particularly throughthe Manager and the Board supports the principle that the Annual GeneralMeeting be used to communicate with private investors. The full Board attendsthe Annual General Meeting under the Chairmanship of the Chairman of the Board.Details of proxy votes received in respect of each resolution are madeavailable to shareholders at the meeting and are also published on theCompany's website at www.biotechgt.com. Representatives from the InvestmentManager attend the Annual General Meeting and give a presentation on investmentmatters to those present. The Company has adopted a nominee share code which isset out below.The Board continues to strive to make information about the Company asaccessible as possible for investors. We do this directly via the Company'swebsite and via data providers, platforms and intermediaries.The Board receives marketing and public relations reports from the Manager towhom the marketing function has been delegated. The Board reviews and considersthe marketing plans of the Manager on a regular basis.The annual and half-year financial reports, the interim management statementsand a monthly fact sheet are available to all shareholders. The Board considersthe format of the annual and half-year financial reports so as to ensure theyare useful to all shareholders and others taking an interest in the Company. Inaccordance with best practice, the annual report, including the notice of theAnnual General Meeting, is sent to shareholders at least 20 working days beforethe meeting. Separate resolutions are proposed for substantive issues.Exercise of Voting PowersThe Board has delegated authority to the Investment Manager to vote the sharesowned by the Company that are held on its behalf by its custodian, GoldmanSachs & Co. New York. The Board has instructed that the Investment Managersubmit votes for such shares wherever possible. This accords with current bestpractice whilst maintaining a primary focus on financial returns. TheInvestment Manager may refer to the Board on any matters of a contentiousnature. The Company does not retain voting rights on any shares that aresubject to rehypothecation in connection with the loan facility provided byGoldman Sachs & Co. New York.Nominee Share CodeWhere shares are held in a nominee company name and where the beneficial ownerof the shares is unable to vote in person, the Company nevertheless undertakes:to provide the nominee company with multiple copies of shareholdercommunications, so long as an indication of quantities has been provided inadvance;to allow investors holding shares through a nominee company to attend generalmeetings, provided the correct authority from the nominee company is available;andthat investors in the Alliance Trust Savings Scheme or ISA are automaticallysent shareholder communications, including details of general meetings,together with a form of direction to facilitate voting and to seek authority toattend.Nominee companies are encouraged to provide the necessary authority tounderlying shareholders to attend the Company's general meetings.By order of the BoardFrostrow Capital LLPCompany Secretary22 May 2014Governance / Audit and Management Engagement Committee Reportfor the year ended 31 March 2014The Committee, which comprises of all the Directors, with the exception of Mr.Sven Borho, meets at least twice during the year.ResponsibilitiesThe Committee's main responsibilities during the year were:To review the Company's half-year and annual financial statements together withannouncements and other filings relating to the financial performance of theCompany and issues of the Company's shares. In particular, the Committeeconsidered whether the annual financial statements are fair, balanced andunderstandable, allowing shareholders to more easily assess the Company'sstrategy, investment policy, business model and financial performance.To review the risk management and internal control processes of the Company andits key service providers. As part of this review the Committee again reviewedthe appropriateness of the Company's anti-bribery and corruption policy. Duringthe year the Committee reviewed the Internal Controls in place at the Company'sInvestment Manager, OrbiMed, its Manager Frostrow, Capita Asset Services andGoldman Sachs & Co.To recommend the appointment of an external auditor, and agreeing the scope ofits work and its remuneration, reviewing its independence and the effectivenessof the audit process.To consider any non-audit work to be carried out by the auditors. The Committeereviews the need for non-audit services and authorises such fees on a case bycase basis, having consideration to the cost effectiveness of the services andthe independence and objectivity of the Auditors. Non audit fees of £6,000 werepaid to Grant Thornton UK LLP for their review of the Company's half-yearaccounts and their review of the performance fee calculation as at June 2013,September 2013 and December 2013. In addition fees totaling £4,000 were earnedin relation to taxation services. The external auditor carried out no othernon-audit work during the year.To consider the need for an internal audit function. Since the Companydelegates its day-to-day operations to third parties and has no employees, theCommittee has determined there is no requirement for such a function.The Committee's terms of reference are available for review on the Company'swebsite at www.biotechgt.com.Meetings and BusinessThe Committee which consists of all the independent Directors of the Company,met three times during the year. Attendance by each Director is shown withinthis announcement.The following matters were dealt with at these meetings:May 2013Review of the Committee's terms of referenceReview of the preliminary resultsApproval of the annual report and financial statementsReview of risk management, internal controls and complianceReview of the Manager's internal control frameworkNovember 2013Review of the auditor's plan for the 2013/2014 auditReview of the Committee's terms of referenceReview of risks, internal control and complianceReview of the Company's anti bribery and corruption policy and the measures putin place by the Company's service providersApproval of the half-year reportConsideration of the implications of the 2012 UK Corporate Governance Code andthe required changes to the Company's annual report and financial statementsFebruary 2014Review of the Committee's terms of referenceA review of the Company's service providersThe formal audit tenderFinancial StatementsThe financial statements, and the annual report as a whole, are theresponsibility of the Board. The Board looks to the Audit and ManagementEngagement Committee to advise them in relation to the financial statementsboth as regards their form and content, issues which might arise and on anyspecific areas requiring judgment.Significant Reporting MattersDuring the year the Committee considered key accounting issues, matters andjudgments in relation to the Company's financial statements and disclosuresrelating to:InvestmentsThe Committee approached and dealt with this area of risk by:reconfirming its understanding of the processes in place to record investmenttransactions and to value the investment portfolio;gaining an overall understanding of the performance of the investment portfolioboth in capital and revenue terms through comparison to a suitable benchmark;andensuring that all investment holdings and cash/deposit balances have beenagreed to confirmation from the custodian or relevant bank.TaxationThe Committee approached and dealt with the area of risk, surroundingcompliance with section 1158 of the Corporation Tax Act 2010, by:seeking confirmation from the Manager that the Company continues to meet theeligibility conditions as outlined in section 1158;by obtaining written confirmation from HMRC, evidencing the approval of theCompany as an investment trust under the regime; andunderstanding the risks and consequences if the Company breaches this approvalin future years.Internal ControlsIn accordance with the provision C2 and C3 of the UK Corporate Governance Code,risk assessment and the review of internal controls are undertaken by the Boardin the context of the Company's overall investment objective. The review coversthe key business, operational, compliance and financial risks facing theCompany. In arriving at its judgment of what risks the Company faces, the Boardhas considered the Company's operations in the light of the following factors:the nature and extent of risks which it regards as acceptable for the Companyto bear within its overall business objective;the threat of such risks becoming a reality; andthe Company's ability to reduce the incidence and impact of risk on itsperformance.Against this background, the Board has split the review of risk and associatedcontrols into five sections reflecting the nature of the risks being addressed.These sections are as follows:corporate strategy;investment activity;published information, compliance with laws and regulations;service providers; andfinancial activity.The Company has appointed Frostrow Capital LLP ("Frostrow") to provideadministrative services to the Company. The Company has obtained from itsvarious service providers assurances and information relating to their internalsystems and controls to enable the Board to make an appropriate risk andcontrol assessment, including the following:details of the control environment in operation;identification and evaluation of risks and control objectives;review of communication methods and procedures; andassessment of the control procedures.The key procedures which have been established to provide internal financialcontrols are as follows:investment management is provided by OrbiMed Capital LLC ("OrbiMed") whoprovide regular updates and reports to the Board. The Board is responsible forsetting the overall investment policy and monitors the actions of theInvestment Manager at administration, company secretarial and marketing dutiesfor the Company are performed by Frostrow;custody of assets is undertaken by Goldman Sachs & Co. New York;the Board clearly defines the duties and responsibilities of their agents andadvisers. The appointment of agents and advisers to the Company is conducted bythe Board after consideration of the quality of the parties involved; the Boardmonitors their ongoing performance and contractual arrangements;mandates for authorisation of investment transactions and expense payments areset by the Board; andthe Board regular Board meetings;reviews financial information produced by the Investment Manager and theManager in detail on a regular basis.All of the Company's management functions are performed by third parties whoseinternal controls are reviewed by the Board or on its behalf by Frostrow.In accordance with guidance issued to directors of listed companies, theDirectors confirm that they have carried out a review of the effectiveness ofthe system of internal financial control and risk management during the year,as set out above.External AuditorMeetings:This year the nature and scope of the audit together with Grant Thornton UKLLP's audit plan were considered by the Committee on 27 November 2013 withoutthe auditor being present.As Chairman of the Committee, I met the audit partner, Julian Bartlett, and hisaudit manager on 1 May 2014 to discuss the outcome of the audit and the draft2014 annual report and accounts. The Committee then met Grant Thornton UK LLPon 15 May 2014 to review the progress of the audit and to discuss the limitedmatters that arose.Given the changes to narrative reporting which are incorporated in the annualreport for the first time, we have also discussed the presentation of theannual report with the Auditor and sought their perspective.Independence and Effectiveness:In order to fulfil the Committee's responsibility regarding the independence ofthe Auditor, we reviewed:the senior audit personnel in the audit plan for the year,the Auditor's arrangements concerning any conflicts of interest,the extent of any non-audit services,the statement by the Auditor that they remain independent within the meaning ofthe regulations and their professional standards. andAuditor independenceIn order to consider the effectiveness of the audit process, we reviewed:the Auditor's fulfilment of the agreed audit plan,the report arising from the audit itself, andfeedback from the Manager.The Committee is satisfied with the Auditor's independence and theeffectiveness of the audit process, together with the degree of diligence andprofessional skepticism brought to bear.Appointment of New AuditorIt had been noted by the Committee that the Company's current Auditor, GrantThornton UK LLP and its predecessor firm, have been in office since theCompany's inception, during which time no audit tender had taken place. Whilstthe audit partner has changed periodically in accordance with professional andregulatory standards to protect independence and objectivity, in accordancewith best practice it was felt appropriate to undertake a formal audit tender.Following a formal tender process, the Directors are proposing to appoint Ernst& Young LLP as Auditor of the Company commencing with the 2014/15 financialyear. As resigning Auditor Grant Thornton UK LLP has provided the Company witha \`statement of circumstances' confirming that it will resign as Auditor of theCompany following its unsuccessful participation in the audit tender process. Acopy of the Statement of Circumstances is available upon request from theCompany Secretary.Grant Thornton UK LLP will resign with effect from the conclusion of the AnnualGeneral Meeting to be held on 10 July 2014. Having satisfied themselves of theappropriateness of Ernst & Young LLP following the tender process and inaccordance with the Companies Act 2006, shareholder approval concerning theappointment of a new Auditor and the authority to fix their remuneration willbe sought at the forthcoming Annual General Meeting to be held on 10 July 2014.Grant Thornton UK LLP carried out the audit for the year ended 31 March 2014and were considered to be independent by the Board. The Directors wish torecord their appreciation of the audit services provided by Grant Thornton UKLLP to the Company since its inception.Full details of the resolution appointing Ernst & Young LLP as Auditors can befound within the Notice of Meeting.Peter KeenChairman of the Audit and Management Engagement Committee22 May 2014Governance / Directors' Remuneration Reportfor the year ended 31 March 2014Statement from the ChairmanI am pleased to present the Directors' Remuneration Report to shareholders.This report has been prepared in accordance with the requirements of Section421 of the Companies Act 2006 and the Enterprise and Regulatory Reform Act2013. An Ordinary Resolution for the approval of this report will be put to theshareholders at the forthcoming Annual General Meeting. The DirectorsRemuneration Policy Report, which is separate to this report can be foundbelow.The law requires the Company's Auditors to audit certain of the disclosuresprovided in this report. Where disclosures have been audited, they areindicated as such and the Auditors' opinion is included in their report toshareholders. The Remuneration Policy Report forms part of this report.The Remuneration Committee considers the framework for the remuneration of theDirectors on an annual basis. It reviews the ongoing appropriateness of theCompany's remuneration policy and the individual remuneration of Directors byreference to the activities of the Company and comparison with other companiesof a similar structure and size. This is in line with the AIC Code.At the most recent review held on 27 February 2014, it was agreed that therewas to be no increase to fees paid to the Directors during the year. Myself, asChairman of the Company receives an annual fee of £34,000 and Mr. Peter Keen asChairman of the Audit and Management Engagement Committee and Dr John Gordon asSenior Independent Director receive an annual fee of £26,000. Professor DameKay Davies DBE, Mr. Paul Gaunt and Mr. Andrew Joy each receive an annual fee of£24,000. The last increase in Directors' fees took effect on 1 April 2013.Directors' FeesThe Directors, as at the date of this report, and who all served throughout theyear, received the fees listed in the table below. These exclude any employers'national insurance contributions, if applicable. No other forms of remunerationwere received by the Directors and so fees represent the total remuneration ofeach Director.As noted in the Strategic Report, all of the Directors are non-executive andtherefore there is no Chief Executive Officer. The Company does not have anyemployees. There is therefore no CEO or employee information to disclose.No payments were made to former directors of the Company during the financialyear ending 31 March 2014 (2013: £9,000 in respect to fees paid to Mr JohnSclater, CVO who retired from the Board on 12 July 2012).Directors' Emoluments for the Year (audited information)The Directors who served in the year received the following emoluments in theform of fees:                                                 Date of     Fees      Fees                                                 Appointment                                                 to the      2014      2013                                                 BoardThe Rt Hon Lord Waldegrave of North Hill\*        6 June 1998 34,000    29,000(Chairman)Sven Borho                                       23 March    24,000    22,000                                                 2006Professor Dame Kay Davies, DBE                   15 March    24,000    22,000                                                 2012Paul Gaunt                                       5 June 1997 24,000    22,000Dr John Gordon (Senior Independent Director &Chairman of theRemuneration Committee)                          5 June 1997 26,000    24,000Andrew Joy                                       15 March    24,000    22,000                                                 2012Peter Keen (Chairman of the Audit & Management   23 June     26,000    24,000Engagement Committee)                            1997                                                             182,000   165,000\*appointed as Chairman of the Company on 12 July 2012.A non-binding Ordinary Resolution proposing adoption of the Directors'Remuneration Report was put to Shareholders at the Annual General Meeting ofthe Company held on 9 July 2013, and was passed by 99.2% (40,144,402 Shares) ofshareholders voting on the Resolution.Sums paid to Third Parties (audited information)None of the fees referred to in the above table were paid to any third party inrespect of the services provided by any of the Directors.Other BenefitsTaxable Benefits - Article 88 of the Company's Articles of Association providesthat Directors are entitled to be reimbursed for reasonable expenses incurredby them in connection with the performance of their duties and attendance atBoard and General Meetings.Pensions related benefits - Article 90 permits the Company to provide pensionor similar benefits for Directors and employees of the Company. However, nopension schemes or other similar arrangements have been established and noDirector is entitled to any pension or similar benefits.Loss of officeDirectors do not have service contracts with the Company but are engaged underLetters of Appointment. These specifically exclude any entitlement tocompensation upon leaving office for whatever reason.Share Price ReturnShare price versus the NASDAQ Biotechnology Index (sterling adjusted). Thechart below illustrates the shareholder return for a holding in the Company'sshares as compared to the NASDAQ Biotechnology Index (sterling adjusted), whichthe Board has adopted as the measure for both the Company's performance andthat of the Investment Manager for the year.Relative Cost of Directors' Remuneration for the year ended 31 March 2014                                                2014         2013     DifferenceSpend                                           £000         £000     £000Fees of non-executive directors                 182          165      17Dividends paid to shareholders in respect of    -            -        -year ended 31 March 2014Share buy-backs\*                                3,420        47       3,373\* Share buy-back activity forms part of the Board's active discount managementpolicyThe above table does not reflect the issuance of new shares during the yearended 31 March 2014.Directors' InterestsThe beneficial interests of the Directors and their families in the Companywere as set out below:                                         Number of shares held                                         as at                                         22 May               31 March  31                                                                        March                                         2014                 2014\*     2013\*The Rt Hon Lord Waldegrave of North Hill 58,716               58,716    58,716Sven Borho                               236,218              236,218   236,218Professor Dame Kay Davies, DBE           -                    -         -Paul Gaunt                               -                    -         -Dr John Gordon                           70,000               70,000    70,000Andrew Joy                               25,000               25,000    25,000Peter Keen                               55,000               55,000    45,000\*Audited informationNone of the Directors was granted or exercised rights over shares during theyear. Sven Borho is a Partner at OrbiMed, the Company's Investment Manager,which is party to the Investment Management Agreement with the Company andreceives fees.As at 22 May 2014, the latest practicable date before publication of the AnnualReport there have been no changes in the interests of the Directors shares ofthe Company.Annual StatementOn behalf of the Board I confirm that this Remuneration Policy, of this annualreport and Remuneration Report summarises, as applicable, for the year to 31March 2014:the major decisions on Directors' remuneration;any substantial changes relating to Directors' remuneration made during theyear; andthe context in which the changes occurred and decisions have been taken.The Rt Hon Lord Waldegrave of North HillChairman22 May 2014Governance / Directors' Remuneration Policy Reportfor the year ended 31 March 2014The Company's Remuneration Policy provides that fees payable to the Directorsshould reflect the time spent by the Board on the Company's affairs and theresponsibilities borne by the Directors and should be sufficient to enablecandidates of high calibre to be recruited. Directors are remunerated in theform of fees payable monthly in arrears, paid to the Director personally or toa specified third party. There are no long-term incentive schemes, share optionschemes or pension arrangements and the fees are not specifically related tothe Directors' performance, either individually or collectively. Directors'remuneration comprises solely Directors' fees. The current and projectedDirectors' fees for 2014 and 2015 are shown in the table below. The Companydoes not have any employees.Directors' Fees Current and Projected                                                Date of      Fees       Fees                                                Appointment                                                to the Board 2015       2014The Rt Hon Lord Waldegrave of North Hill\*       6 June 1998  34,000     34,000(Chairman)Sven Borho                                      23 March     24,000     24,000                                                2006Professor Dame Kay Davies, DBE                  15 March     24,000     24,000                                                2012Paul Gaunt                                      5 June 1997  24,000     24,000Dr John Gordon (Senior Independent Director &Chairman of theRemuneration Committee)                         5 June 1997  7,212\*\*    26,000Andrew Joy                                      15 March     25,487\*\*   24,000                                                2012Peter Keen (Chairman of the Audit & Management  23 June 1997 26,000     26,000Engagement Committee)                                                             164,699    182,000\* appointed as Chairman of the Company on 12 July 2012.\*\* 2015 fees have been adjusted to account for Dr Gordon's retirement from theBoard in July 2014 and the subsequent appointment of Mr Joy as SeniorIndependent Director and Chairman of the Remuneration Committee.No change is expected to the current level of Directors' fees until February2015. Any new director being appointed to the Board that has not been appointedas either Chairman of a Committee or as the Senior Independent Director willunder the current level of fees receive £24,000 pa.None of the Directors has a service contract. The terms of their appointmentprovide that Directors shall retire and be subject to election at the firstannual general meeting after their appointment and to re-election annuallythereafter. The terms also provide that a Director may be removed withoutnotice and that compensation will not be due on leaving office.No communications have been received from shareholders regarding Directors'remuneration.The remuneration for the non-executive Directors is determined within thelimits set out in the Company's Articles of Association. The present limit is £200,000 in aggregate per annum. In order to continue with the Boards successionplanning an Ordinary Resolution will be put to shareholders at the forthcomingAnnual General Meeting to increase the limit to £250,000. Further details ofthis proposal can be found within the Explanatory Notes to the Resolutions.Non-executive Directors are not eligible for bonuses, pension benefits, shareoptions, long-term incentive schemes or other benefits including performancerelated benefits.In accordance with best practice recommendations the Board will put theRemuneration Policy to shareholders at the annual general meeting at least onceevery three years.An Ordinary Resolution for the approval of this policy will be considered byshareholders at the forthcoming Annual General Meeting of the Company to beheld in July.Financial Statements / Independent Auditor's Report to the Members of TheBiotech Growth Trust PLCWe have audited the financial statements of The Biotech Growth Trust PLC forthe year ended 31 March 2014 which comprise the Income Statement, the Statementof Changes in Equity, the Statement of Financial Position, the Statement ofCash Flows and the related notes. The financial reporting framework that hasbeen applied in their preparation is applicable law and International FinancialReporting Standards (IFRS) as adopted by the European Union.This report is made solely to the Company's members, as a body, in accordancewith Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has beenundertaken so that we might state to the Company's members those matters we arerequired to state to them in an auditor's report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the Company and the Company's members as a body, for ouraudit work, for this report, or for the opinions we have formed.Respective responsibilities of directors and auditorAs explained more fully in the Directors' Responsibilities Statement, thedirectors are responsible for the preparation of the financial statements andfor being satisfied that they give a true and fair view. Our responsibility isto audit and express an opinion on the financial statements in accordance withapplicable law and International Standards on Auditing (UK and Ireland). Thosestandards require us to comply with the Auditing Practices Board's (APB's)Ethical Standards for Auditors.Scope of the audit of the financial statementsA description of the scope of an audit of financial statements is provided onthe Financial Reporting Council's website at www.frc.org.uk/apb/scope/private.cfm.Auditor commentaryAn overview of the scope of our auditOur audit approach was based on a thorough understanding of the Company'sbusiness and is risk-based. The day-to-day management of the Company'sinvestment portfolio, the custody of its investments and the maintenance of theCompany's accounting records is outsourced to third-party service providers.Accordingly, our audit work is focused on obtaining an understanding of, andevaluating, internal controls at the Company and relevant third-party serviceproviders. This included a review of reports on the description, design andoperating effectiveness of internal controls at relevant third-party serviceproviders. We undertook substantive testing on significant transactions,account balances and disclosures, the extent of which was based on variousfactors such as our overall assessment of the control environment, the designeffectiveness of controls over individual systems and the management ofspecific risks.Our application of materialityWe apply the concept of materiality in planning and performing our audit, inevaluating the effect of any identified misstatements and in forming ouropinion. For the purpose of determining whether the financial statements arefree from material misstatement we define materiality as the magnitude of amisstatement or an omission from the financial statements or relateddisclosures that would make it probable that the judgement of a reasonableperson, relying on the information would have been changed or influenced by themisstatement or omission. We also determine a level of performance materialitywhich we use to determine the extent of testing needed to reduce to anappropriately low level the probability that the aggregate of uncorrected andundetected misstatements exceeds materiality for the financial statements as awhole.We established materiality for the financial statements as a whole to be £3,800,000, which is 1% of the Company's total assets.We have determined the threshold at which we communicate misstatements to theAudit Committee to be £190,000. In addition, we communicate misstatements belowthat threshold that, in our view, warrant reporting on qualitative grounds.Our assessment of riskWithout modifying our opinion, we highlight the following matters that are, inour judgement, likely to be most important to users' understanding of ouraudit. Our audit procedures relating to these matters were designed in thecontext of our audit of the financial statements as a whole, and not to expressan opinion on individual transactions, balances or disclosures.Existence and valuation of investmentsThe Company's business is investing in financial assets with a view to profitfrom the total return primarily in the form of capital gains. Accordingly, theinvestment portfolio is a significant material item in the financialstatements. The recognition and measurement of the investment portfolio istherefore a risk that requires particular audit attention.Our audit work included, but was not restricted to, understanding management'sprocess to recognise and measure investments including ownership of thoseinvestments, obtaining a confirmation of investments held at the year enddirectly from the independent custodian, testing the reconciliation of thecustodian records to the records maintained by the Company's administrator,testing a selection of investment additions and disposals shown in theCompany's records to supporting documentation and agreeing the valuation ofquoted investments to an independent source of market prices. In addition, wehave assessed the evidence supporting the valuation of the one unquotedinvestment.The Company's accounting policy on the valuation of investments is included innote 1(b), and its disclosures about investments held at the year end areincluded in note 8.Opinion on financial statementsIn our opinion the financial statements:give a true and fair view of the state of the Company's affairs as at 31 March2014 and of its profit for the year then ended;have been properly prepared in accordance with IFRS as adopted by the EuropeanUnion; andhave been prepared in accordance with the requirements of the Companies Act2006.Other reporting responsibilitiesOpinion on other matters prescribed by the Companies Act 2006In our opinion:the part of the Directors' Remuneration Report to be audited has been properlyprepared in accordance with the Companies Act 2006;the information given in the Strategic Report and Directors' Report for thefinancial year for which the financial statements are prepared is consistentwith the financial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following:Under the ISAs (UK and Ireland), we are required to report to you if, in ouropinion, information in the annual report is:materially inconsistent with the information in the audited financialstatements; orapparently materially incorrect based on, or materially inconsistent with, ourknowledge of the Company acquired in the course of performing our audit; orotherwise misleading.In particular, we are required to consider whether we have identified anyinconsistencies between our knowledge acquired during the audit and thedirectors' statement that they consider the annual report is fair, balanced andunderstandable, and whether the annual report appropriately discloses thosematters that were communicated to the audit committee which we consider shouldhave been disclosed.Under the Companies Act 2006 we are required to report to you if, in ouropinion:adequate accounting records have not been kept, or returns adequate for ouraudit have not been received from branches not visited by us; orthe financial statements and the part of the Directors' Remuneration Report tobe audited are not in agreement with the accounting records and returns; orcertain disclosures of directors' remuneration specified by law are not made;orwe have not received all the information and explanations we require for ouraudit.Under the Listing Rules we are required to review:the directors' statement, in relation to going concern; andthe part of the Corporate Governance Statement relating to the Company'scompliance with the nine provisions of the UK Corporate Governance Codespecified for our review.JULIAN BARTLETTSENIOR STATUTORY AUDITORFOR AND ON BEHALF OF GRANT THORNTON UK LLPSTATUTORY AUDITOR, CHARTERED ACCOUNTANTSLONDON22 May 2014Financial Statements /Income Statementfor the year ended 31 March 2014                                   2014                         2013                      Revenue   Capital    Total   Revenue   Capital    Total              Notes     £'000     £'000    £'000     £'000     £'000    £'000IncomeInvestment        2       873         -      873       570         -      570incomeTotal                     873         -      873       570         -      570incomeGains andlosses oninvestmentsGains on          8         -    87,614   87,614         -    80,714   80,714investmentsheld atfair valuethroughprofit orlossExchange                    -     1,670    1,670         -        92       92gains oncurrencybalancesExpensesInvestmentmanagement,management        3         -    (2,763 ) (2,763 )       -    (4,586 ) (4,586 )andperformancefeesOther             4      (869 )       -     (869 )    (566 )       -     (566 )expensesProfit                      4    86,521   86,525         4    76,220   76,224beforefinancecosts andtaxationFinance           5         -       (94 )    (94 )               (18 )    (18 )costsProfit                      4    86,427   86,431         4    76,202   76,206beforetaxationTaxation          6       (94 )       -      (94 )     (58 )       -      (58 )(Loss)/                   (90 )  86,427   86,337       (54 )  76,202   76,148profit forthe yearBasic and         7      (0.1 )  126.9p   126.8p      (0.1 )  121.2p   121.1pdiluted                       p                            p(loss)/earningsper shareThe Company does not have any income or expenses which are not included in theprofit for the year. Accordingly the "profit for the year" is also the "totalcomprehensive income for the period", as defined in IAS 1 (revised) and noseparate Statement of Comprehensive Income has been presented.All of the profit and total comprehensive income for the period is attributableto the owners of the Company.The "Total" column of this statement represents the Company's Income Statement,prepared in accordance with International Financial Reporting Standards (IFRS).The "Revenue" and "Capital" columns are supplementary to this and are preparedunder guidance published by the Association of Investment Companies.All items in the above statement derive from continuing operations.The accompanying notes are an integral part of this statement.Financial Statements / Statement of Financial Positionas at 31 March 2014                                                             2014        2013                                                Notes       £'000       £'000Non current assetsInvestments held at fair value through              8     368,362     244,296profit or lossCurrent assetsOther receivables                                   9      12,072      13,967Cash and cash equivalents                                       -       8,401                                                           12,072      22,368Total assets                                              380,434     266,664Current liabilitiesOther payables                                     10      40,186      27,048                                                           40,186      27,048Net assets                                                340,248     239,616Equity attributable to equity holdersOrdinary share capital                             11      17,222      16,117Share premium account                                      42,732      26,122Special reserve                                            21,747      25,167Capital redemption reserve                                  5,577       5,577Capital reserve                                    15     256,768     170,341Revenue reserve                                            (3,798 )    (3,708 )Total equity                                              340,248     239,616Net asset value per share                          12      498.7p      371.7pThe financial statements were approved by the Board on 22 May 2014 and weresigned on its behalf by:The Rt Hon Lord Waldegrave of North Hill ChairmanChairmanThe accompanying notes are an integral part of this statement.The Biotech Growth Trust PLC - Company Registration Number 3376377 (Registeredin England)Financial Statements / Statement of Changes in Equityfor the year ended 31 March 2014             Ordinary     Share   Special      Capital   Capital   Revenue                share   premium             redemption              capital   account   reserve      reserve   reserve   reserve     Total                £'000     £'000     £'000        £'000     £'000     £'000     £'000At 31          16,117    26,122    25,167        5,577   170,341    (3,708 ) 239,616March 2013Net profit          -         -         -            -    86,427       (90 )  86,337/(loss)for theyearIssue of        1,105    16,610         -            -         -         -    17,715new sharesRepurchase          -         -    (3,420 )          -         -         -    (3,420 )of ownshares tobe held intreasuryAt 31          17,222    42,732    21,747        5,577   256,768    (3,798 ) 340,248March 2014for the year ended 31 March 2013               Ordinary     Share   Special      Capital   Capital   Revenue                  share   premium             redemption                capital   account   reserve      reserve   reserve   reserve     Total                  £'000     £'000     £'000        £'000     £'000     £'000     £'000At 31 March      15,560    19,300    25,214        5,572    94,139    (3,654 ) 156,1312012Net profit/           -         -         -            -    76,202       (54 )  76,148(loss) forthe yearIssue of new        562     6,822         -            -         -         -     7,384sharesRepurchase           (5 )       -       (47 )          5         -         -       (47 )of ownshares forcancellationAt 31 March      16,117    26,122    25,167        5,577   170,341    (3,708 ) 239,6162013The accompanying notes are an integral part of this statement.Financial Statements / Statement of Cash Flowsfor the year ended 31 March 2014                                                                2014       2013                                                               £'000      £'000Operating activitiesProfit before tax                                             86,431     76,206Add back interest paid                                            94         18Less: gain on investments held at fair value through         (87,614 )  (80,714 )profit or lossAdd: exchange (gains)/losses on currency balances             (1,670 )      (92 )Purchases of investments held at fair value through         (317,854 ) (126,693 )profit or lossSales of investments held at fair value through profit or    271,667    129,878lossIncrease in other receivables                                   (162 )      (49 )(Decrease)/increase in other payables                         (2,950 )    2,676Net cash (outflow)/inflow from operating activities          (52,058 )    1,230before interest and taxationInterest paid                                                    (94 )      (18 )Taxation paid                                                    (94 )      (58 )Net cash (outflow)/inflow from operating activities          (52,246 )    1,154Financing activitiesIssue of shares                                               17,715      7,384Repurchase of own shares to be held in treasury/              (3,420 )      (47 )cancellationDrawdown from the loan facility                               27,880          -Net cash inflow from financing                                42,175      7,337(Decrease)/increase in cash and cash equivalents             (10,071 )    8,491Cash and cash equivalents at start of year                     8,401       (182 )Effect of foreign exchange rate changes                        1,670         92Cash and cash equivalents at end of year                           -      8,401The accompanying notes are an integral part of this statement.Financial Statements / Notes to the Accounts1.Accounting PoliciesThe financial statements of the Company have been prepared in accordance withInternational Financial Reporting Standards ("IFRS"). These comprise standardsand interpretations approved by the International Accounting Standards Board("IASB"), together with interpretations of the International AccountingStandards and Standing Interpretations Committee approved by the InternationalAccounting Standards Committee ("IASC") that remain in effect, to the extentthat IFRS have been adopted by theEuropean Union.(a) Accounting ConventionThe financial statements have been prepared under the historical costconvention, except for the measurement at fair value of investments. Wherepresentational guidance set out in the revised Statement of RecommendedPractice ("the SORP") for Investment Trust Companies and Venture Capital Trustsproduced by the Association of Investment Companies ("AIC") dated January 2009is consistent with the requirements of IFRS, the Directors have sought toprepare the financial statements on a basis compliant with the recommendationsof the SORP.(b) InvestmentsInvestments are recognised and de-recognised on the trade date.As the entity's business is investing in financial assets with a view toprofiting from their total return in the form of interest, dividends orincreases in fair value, investments are designated as fair value throughprofit or loss and are initially recognised at fair value. The entity managesand evaluates the performance of these investments on a fair value basis inaccordance with its investment strategy, and information about the investmentsis provided internally on this basis to the Board.Investments designated as at fair value through profit or loss, which arequoted investments, are measured at subsequent reporting dates at fair value,which is either the bid or the last trade price, depending on the convention ofthe exchange on which it is quoted.In respect of unquoted investments, or where the market for a financialinstrument is not active, fair value is established by using valuationtechniques which may include using recent arm's length market transactionsbetween knowledgeable, willing parties, if available, reference to the currentfair value of another instrument that is substantially the same, discountedcash flow analysis and option pricing models. Where there is a valuationtechnique commonly used by market participants to price the instrument and thattechnique has been demonstrated to provide reliable estimates of pricesobtained in actual market transactions, that technique is utilised.Gains and losses on disposal are also recognised in the Income Statement.The total transaction costs for the year were £707,000 (31 March 2013: £436,000) broken down as follows: purchase transaction costs for the year to 31March 2014 were £412,000, (31 March 2013: £226,000), sale transaction costswere £295,000 (31 March 2013: £210,000). These costs consist mainly ofcommission and stamp duty.(c) Presentation of Income StatementIn order to better reflect the activities of an investment trust company, andin accordance with guidance issued by the AIC, supplementary information whichanalyses the Income Statement between items of a revenue and capital nature hasbeen presented alongside the Income Statement. Net revenue is the measure theDirectors believe appropriate in assessing the Company's compliance withcertain requirements set out in section 1158 of the Corporation Tax Act 2010.(d) IncomeDividends receivable on equity shares are recognised on the ex-dividend date.Where no ex-dividend date is quoted, dividends are recognised when theCompany's right to receive payment is established.Dividends and interest on investments in unquoted shares and securities arerecognised when they become receivable.(e) Expenses and Finance CostsAll expenses are accounted for on an accruals basis. Expenses are chargedthrough the Income Statement as follows:expenses which are incidental to the acquisition or disposal of an investmentare charged to the capital column of the Income Statement;expenses are charged to the capital column of the Income Statement where aconnection with the maintenance or enhancement of the value of the investmentcan be demonstrated, and accordingly;investment management and management fees and related irrecoverable VAT arecharged to the capital column of the Income Statement as the Directors expectthat in the long term virtually all of the Company's returns will come fromcapital;loan interest is charged to the Income Statement and allocated to capital asthe Directors expect that in the long term virtually all of the Company'sreturns will come from capital; andbank overdraft interest is charged through the Income Statement and allocatedto the revenue column.(f) TaxationIn line with the recommendations of the SORP, the allocation method used tocalculate tax relief on expenses presented against capital returns in thesupplementary information in the Income Statement is the "marginal basis".Under this basis, if taxable income is capable of being offset entirely byexpenses presented in the revenue column of the Income Statement, then no taxrelief is transferred to the capital column.Investment trusts which have approval under Section 1158 Corporation Tax Act2010 are not liable for taxation on capital gains.Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the Balance Sheet liability method. Deferredtax liabilities are recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised.Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the Income Statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity, or Other Comprehensive Income (OCI).(g) Foreign CurrenciesThe currency of the primary economic environment in which the Company operates(the functional currency) is pounds sterling ("sterling"), which is also thepresentational currency of the Company. Transactions involving currencies otherthan sterling are recorded at the exchange rate ruling on the transaction date.At each Statement of Financial Position date, monetary items and non-monetaryassets and liabilities that are fair valued, which are denominated in foreigncurrencies, are retranslated at the closing rates of exchange.Exchange differences arising on settlements of monetary items and fromretranslating at the Statement of Financial Position date including investmentsand other financial instruments measured as fair value through profit or lossand other monetary items are included in the Income Statement and allocated ascapital if they are of a capital nature, or as revenue if they are of a revenuenature.(h) Functional and presentational currencyThe financial information is shown in sterling, being the Company'spresentational currency. In arriving at the functional currency the Directorshave considered the following:(the primary economic environment of the Company;the currency in which the original capital was raised;the currency in which distributions are made;the currency in which performance is evaluated; andthe currency in which the capital would be returned to shareholders on a breakup basis.The Directors have also considered the currency to which the underlyinginvestments are exposed and liquidity is managed. The Directors are of theopinion that sterling best represents the functional currency.(i) ReservesCapital reservesThe following are credited or charged to the capital column of the IncomeStatement and then transferred to the Capital Reserve:gains or losses on disposal of investmentsexchange differences of a capital natureexpenses allocated to this reserve in accordance with the above referredpoliciesincreases and decreases in the valuation of investments held at year endCapital Redemption Reservea transfer will be made to this reserve on cancellation of the Company's ownshares purchased, equal to the nominal value of the SharesSpecial ReserveDuring the financial year ended 31 March 2004 a Special Reserve was created,following the cancellation of the Share Premium account, in order to provide anincreased distributable reserve out of which to purchase the Company's ownshares.• a transfer will be made to this reserve on cancellation of the Company's ownshares purchased or when the Company repurchases its own shares to be held intreasury.(j) Cash and cash equivalentsCash in hand and in banks and short-term deposits which are held to maturityare carried at cost. Cash and cash equivalents are defined as cash in hand,demand deposits and short-term, highly liquid investments readily convertibleto known amounts of cash and subject to insignificant risk of changes in value.Bank overdrafts that are repayable on demand, which form an integral part ofthe Company's cash management, are included as a component of cash and cashequivalents for the purpose of the statement of cash flows.(k) Operating segmentsIFRS 8 requires entities to define operating segments and segment performancein the financial statements based on information used by the Board ofDirectors. The Directors are of the opinion that the Company is engaged in asingle segment of business, being the investments business. The resultspublished in this report therefore correspond to this sole operating segment.2. Income                                                               2014     2013                                                              £'000    £'000Investment incomeOverseas income                                                 873      570Total income                                                    873      5703. Investment Management, Management and Performance Fees                                               2014                        2013                          Revenue   Capital   Total   Revenue   Capital   Total                            £'000     £'000   £'000     £'000     £'000   £'000Investment management           -     1,967   1,967         -     1,245   1,245feeManagement fee                  -       890     890         -       583     583Performance fee                 -       (94 )   (94 )       -     2,758   2,758                                -     2,763   2,763         -     4,586   4,586During the year, performance fees totaling £2,663,000 crystallised, of which £982,000 remained payable at the period end. (31 March 2013: £1,640,000crystallised).The performance fee amount of £94,000 which was written back as at 31 March2014 represents outperformance generated as 31 March 2013 which was notmaintained for the twelve month period. In accordance with the performance feearrangements this amount was written back as at 31 March 2014.The fees crystallised at the following quarterly calculation dates:                                                                        £'00030 June 2013                                                                -30 September 2013                                                         57931 December 2013                                                        1,10231 March 2014                                                             982Fees crystallised during the year ended 31 March 2014                   2,663Details of the performance fee basis and amounts paid during the year can befound in the Report of the Directors4. Other Expenses                                             2014                        2013                        Revenue   Capital   Total   Revenue   Capital   Total                          £'000     £'000   £'000     £'000     £'000   £'000Directors' emoluments       182         -     182       174         -     174Frostrow's fixed fee         60         -      60        60         -      60Auditors'                    25         -      25        25         -      25remuneration for theaudit of theCompany's financialstatementsAuditors'                     6         -       6         5         -       5remuneration forreview of the interimaccounts andperformance feecalculationAuditor's                     4         -       4         3         -       3remuneration forother servicesLegal and                   196         -     196         2         -       2professional fees\*Registrar fees               49         -      49        34         -      34Listing fees                 49         -      49        84         -      84Other including             298         -     298       179         -     179irrecoverable VAT                            869         -     869       566         -     566\* includes legal fees of £126,000 in relation to the prospectus published inJuly 2013 and £54,000 in connection with advice sought relating to theAlternative Investment Fund Managers Directive.Details of the amounts paid to Directors are included in the Directors'Remuneration Report and the Directors' Remuneration Policy Report5. Finance Costs                                     2014                        2013                Revenue   Capital   Total   Revenue   Capital   Total                  £'000     £'000   £'000     £'000     £'000   £'000Loan interest         -        94      94         -        18      18                      -        94      94         -        18      186.Taxation(a) Analysis of charge in the year:                        Revenue   Capital    2014   Revenue   Capital    2013                          £'000     £'000   Total     £'000     £'000   Total                                            £'000                       £'000Overseas tax suffered        94         -      94        58         -      58Total current                94         -      94        58         -      58taxation for the year(see note 6(b))(b) Factors affecting current tax charge for yearApproved investment trusts are exempt from tax on capital gains made within theCompany.The tax assessed for the year is lower than the standard rate of corporationtax in the UK of 23% (2013: 24%). The differences are explained below:                                           2014                          2013                    Revenue   Capital     Total   Revenue   Capital     Total                      £'000     £'000     £'000     £'000     £'000     £'000Net profit on             4    86,427    86,431         4    76,202    76,206ordinaryactivities beforetaxationCorporation tax           1    19,878    19,879         1    18,288    18,289at 23% (2013:24%)Effects of:Non-taxable gains         -   (20,535 ) (20,535 )       -   (19,393 ) (19,393 )on investmentsheld at fairvalue throughprofit or lossNon-taxable            (201 )       -      (201 )    (137 )       -      (137 )overseasdividendsOverseas taxes           94         -        94        58         -        58Excess expenses         198       657       855       135     1,105     1,240unusedDisallowed                2         -         2         1         -         1expensesCurrent tax              94         -        94        58         -        58charge(c) Provision for deferred taxNo provision for deferred taxation has been made in the current or prior year.The Company has not provided for deferred tax on capital gains or lossesarising on the revaluation or disposal of investments, as it is exempt from taxon these items because of its status as an investment trust company.The Company has not recognised a deferred tax asset of £5,618,000 (2013: £5,610,000) arising as a result of excess management expenses and loanrelationship deficits. These excess expenses will only be utilised if theCompany generates sufficient taxable income in the future.7. Basic and Diluted (Loss)/Earnings per ShareThe Return/(loss) per Ordinary Share is as follows:                                             2014                         2013                       Revenue   Capital    Total   Revenue   Capital    Total                         pence     pence    pence     pence     pence    pence(Loss)/earnings per       (0.1 )  126.9p   126.8p      (0.1 )  121.2p   121.1pshare                          p                            pThe total gain per share of 126.8p (2013: gain 121.1p) is based on the totalgain attributable to equity shareholders of £86,337,000 (2013: gain £76,148,000).The revenue loss per share 0.1p (2013: loss 0.1p) is based on the revenue lossattributable to equity shareholders of £90,000 (2013: £54,000). The capitalgain per share of 126.9p (2013: gain 121.2p) is based on the capital gainattributable to equity shareholders of £86,427,000 (2013: gain £76,202,000).The total revenue loss and capital gain per share are based on the weightedaverage number of shares in issue during the year of 68,115,445 (2013:62,887,103).8.Investments Held at Fair Value Through Profit and LossAll investments are designated as fair value through profit or loss on initialrecognition, therefore all gains and losses arise on investments designated asfair value through profit or loss.As at 31 March 2014, all investments with the exception of the unquotedinvestment in OrbiMed Asia Partners L.P fund have been classified as level 1.OrbiMed Asia Partners L.P fund has been classified as level 3. See note 13 forfurther details.                                          Listed       2014      Total       2013                                          Equity   Unquoted      £'000      Total                                           £'000      £'000                 £'000Cost at 1 April 2013                     165,797      2,218    168,015    142,536Investment holding gains at 1 April       75,993        288     76,281     19,1192013Valuation at 1 April 2013                241,790      2,506    244,296    161,655Movement in the yearPurchases at cost                        305,739        323    306,062    145,510Sales - proceeds                        (269,610 )        -   (269,610 ) (143,583 )- gains on disposal                       64,338          -     64,338     23,552Net movement in investment holding        23,610       (334 )   23,276     57,162gainsValuation at 31 March 2014               365,867      2,495    368,362    244,296Closing book cost at 31 March 2014       266,264      2,541    268,805    168,015Investment holding gains at 31 March      99,603        (46 )   99,557     76,2812014Valuation at 31 March 2014               365,867      2,495    368,362    244,296                                                                2014     2013                                                               £'000    £'000Gains on investments:Gains on disposal based on historical cost                    64,338   23,552Amounts recognised as investment holding loss in previous    (38,085 ) (6,804 )yearGains on disposal based on carrying value at previous         26,253   16,748financial position dateNet movement in investment holding gains in the year          61,361   63,966Gains on investments                                          87,614   80,7149.Other Receivables                                                               2014     2013                                                              £'000    £'000Future settlements - sales                                   11,795   13,852Other debtors                                                   105       40Prepayments and accrued income                                  172       75                                                             12,072   13,96710.Other Payables                                                               2014     2013                                                              £'000    £'000Future settlements - purchases                               10,427   22,219Performance fee accrued                                         982    4,131Bank loan\*                                                   27,880        -Other creditors and accruals                                    897      698                                                             40,186   27,048\* Further details can be found in note 13 beginning11. Ordinary share capital                                                               2014     2013                                                              £'000    £'000Allotted, called up, issued and fully paid:68,224,038 shares of 25p (2013: 64,466,347)                  17,056   16,117662,309 shares of 25p held in treasury (2013: nil)              166        -                                                             17,222   16,117As at 31 March 2014 the Company had 68,886,347 shares of 25p in issue including662,309 shares held in treasury (2013: 64,466,347). During the year 4,420,000shares were issued raising £17,715,000. In addition, 662,309 shares wererepurchased to be held in treasury at a cost of £3,420,000 (includingexpenses). Subsequent to the year end and to the date of this report a further107,128 shares were repurchased to be held in treasury at a cost of £463,000.12. Net Asset Value per Share                                                               2014     2013                                                              £'000    £'000Net asset value per share                                    498.7p   371.7pThe net asset value per share is based on the net assets attributable to equityshareholders of £340,248,000 (2013: £239,616,000) and on 68,224,038 (excluding662,309 shares held in treasury) (2013: 64,466,347) shares in issue at 31 March2014.13. Risk Management Policies and ProceduresAs an investment trust, the Company invests in equities and other investmentsfor the long term in order to achieve its investment objective. In pursuing itsinvestment objective, the Company is exposed to a variety of risks that couldresult in either a reduction or increase in the Company's net assets or inprofits.The Company's financial instruments comprise securities and other investments,cash balances, debtors and creditors and a loan facility that arise directlyfrom its operations (for example, in respect of sales and purchases awaitingsettlement).The main risks the Company faces from its financial instruments are (i) marketprice risk (comprising currency risk, interest rate risk and other price risk(i.e. changes in market prices other than those arising from interest rate orcurrency risk)), (ii) liquidity risk and (iii) credit risk.The Board reviews and agrees policies regularly for managing and monitoringeach of these risks.1.Market price risk:The fair value or future cash flows of a financial instrument held by theCompany may fluctuate because of changes in market prices. This market riskcomprises three elements - currency risk, interest rate risk and other pricerisk.The Company's portfolio is exposed to market price fluctuations which aremonitored by the Investment Manager in pursuance of the investment objective.Further information on the composition of the portfolio is set out within thisannouncement. .No derivatives or hedging instruments are utilised to manage market price risk.(a) Currency risk:A significant proportion of the Company's portfolio is denominated incurrencies other than sterling (the Company's functional currency, and in whichit reports its results). As a result, movements in exchange rates cansignificantly affect the sterling value of those items.Management of riskThe Investment Manager and Manager monitor the Company's exposure to foreigncurrencies on a continuous basis and report to the Board regularly. TheInvestment Manager does not hedge against foreign currency movements, but takesaccount of the risk when making investment decisions.Income denominated in foreign currencies is converted into sterling on receipt.The Company does not use financial instruments to mitigate the currencyexposure in the period between the time that the income is included in thefinancial statements and its receipt.Foreign currency exposureAt the date of the Statement of Financial Position the Company held £345,433,000 (2013: £234,260,000) of investments denominated in U.S. dollars and£22,929,000 (2013: £10,036,000) in other non-sterling currencies.Currency sensitivityThe following table details the sensitivity of the Company's profit or lossafter taxation for the year to a 10% increase and decrease in the value ofsterling compared to the U.S. dollar (2013: 10% increase and decrease).The above percentages have been determined based on market volatility inexchange rates over the previous twelve months. The analysis is based on theCompany's foreign currency financial instruments held at each Statement ofFinancial Position date, after adjusting for an increase/decrease in managementfees. Movements in the performance fee accruals have been excluded from theanalysis below.If sterling had weakened against U.S. dollars, as stated above, this would havehad the following effect:                                                               2014      2013                                                                USD       USD                                                              £'000     £'000Impact on revenue return                                          -         -Impact on capital return                                     38,132    25,860Total return after tax/effect on shareholders' funds         38,132    25,860If sterling had strengthened against the U.S. dollar, as stated above, thiswould have had the following effect:                                                               2014      2013                                                                USD       USD                                                              £'000     £'000Impact on revenue return                                          -         -Impact on capital return                                    (31,199 ) (21,158 )Total return after tax/effect on shareholders' funds        (31,199 ) (21,158 )(b) Interest rate risk:Interest rate risk is the risk that the fair value of future cash flows of afinancial instrument will fluctuate because of changes in market interestrates.Management of the riskThe possible effects on fair value and cash flows that could arise as a resultof changes in interest rates are taken into account when making investmentdecisions.The Company, generally, does not hold significant cash balances, with shortterm borrowing being used when required and therefore deems this risk to beimmaterial.Interest rate exposureThe Company has a loan facility with Goldman Sachs & Co. New York which isrepayable on demand.(c) Other price riskOther price risk may affect the value of the quoted investments.If market prices at the date of the Statement of Financial Position had been20% higher or lower (2013: 20% higher or lower) while all other variables hadremained constant, the return and net assets attributable to shareholders forthe year ended 31 March 2014 would have increased/decreased by £73,193,000(2013: £48,542,000), after adjusting for an increase or decrease in managementfees. The calculations are based on the portfolio valuations as at therespective Statement of Financial Position dates.2.Liquidity risk:This is the risk that the Company will encounter difficulty in meetingobligations associated with financial liabilities.Management of the riskLiquidity risk is not significant as the majority of the Company's assets areinvestments in quoted equities and other quoted securities that are readilyrealisable. The Company has a loan facility repayable on demand, provided byGoldman Sachs & Co. New York. Interest on the facility is charged at theFederal Funds effective rate plus 1 week LIBOR-OIS spread+, plus 35 basispoints.The Board gives guidance to the Investment Manager as to the maximum amount ofthe Company's resources that should be invested in any one company.Liquidity exposureContractual maturities of the financial liabilities as at 31 March 2014, basedon the earliest date on which payment can be required, are as follows:Amounts due to brokers and accruals £12,306,000 (2013: £27,048,000). All of thestated financial liabilities are repayable within three months or less.3.Credit risk:The failure of the counterparty to a transaction to discharge its obligationsunder that transaction could result in the Company suffering a loss.Certain of the Company's assets are held by Goldman Sachs as collateral for theloan provided by them to the Company. Such assets held by Goldman Sachs areavailable for rehypothecation†. As at 31 March 2014, assets with a total marketvalue of £37.1 million were held as collateral (2013: nil).† See glossaryManagement of the riskThe risk is not significant and is managed as follows:by only dealing with brokers which have been approved by OrbiMed Capital LLCand banks with high credit ratings; andby setting limits to the maximum exposure to any one counterparty at any time.At 31 March 2014 the Company's exposure to credit risk amounted to £12,072,000and was in respect of cash and other receivables, such as amounts due frombrokers and dividends (2013: £22,368,000).Hierarchy of investmentsThe Company has classified its financial assets designated at fair valuethrough profit or loss using a fair value hierarchy that reflects thesignificance of the inputs used in making the fair value measurements. Thehierarchy has the following levels:Level 1 - quoted prices (unadjusted) in active markets for identical assets orliabilities;Level 2 - inputs other than quoted prices included with Level 1 that areobservable for the asset or liability, either directly (i.e. as prices) orindirectly (i.e. derived from prices); andLevel 3 - inputs for the asset or liability that are not based on observablemarket data (unobservable inputs).As at 31 March 2014 the investment in OrbiMed Asia Partners LP fund has beenclassified as Level 3. The fund has been valued at the estimated net assetvalue as at 31 December 2013 and it is believed that the value of the fund asat 31 March 2014 will not be materially different. If the value of the fund wasto increase or decrease by 10%, while all other variables had remainedconstant, the return and net assets attributable to Shareholders for the yearended 31 March 2014 would have increased/decreased by £250,000.                                           Level 1    Level    Level     Total                                                          2        3As of 31 March 2014                          £'000    £'000    £'000     £'000AssetsFinancial investments designated at fair   365,867        -    2,495   368,362value through profit or loss                                           Level 1    Level    Level     Total                                                          2        3As of 31 March 2013                          £'000    £'000    £'000     £'000AssetsFinancial investments designated at fair   241,790        -    2,506   244,296value through profit or lossLevel 3 ReconciliationPlease see below a reconciliation disclosing the changes during the year forthe financial assets and liabilities designated at fair value through profit orloss classified as being Level 3.                                                               2014     2013                                                              £'000    £'000AssetsAs at 1 April                                                 2,506    1,790Total gains during the year                                    (334 )    287Net capital commitments                                         323      429Assets as at 31 March                                         2,495    2,506Fair value of financial assets and financial liabilities:Financial assets and financial liabilities are either carried in the Statementof Financial Position at their fair value or at a reasonable approximation offair value.Capital management policies and proceduresThe Company's capital management objectives are:to ensure that it will be able to continue as a going concern; andto maximise the total return to its equity shareholders through an appropriatebalance of equity capital and debt.The Company's capital is disclosed in the Statement of Financial Position andis managed on a basis consistent with its investment objective and policy. TheCompany currently has a loan facility with Goldman Sachs & Co. New York whichis repayable on demand, which can be used to satisfy the Company's borrowingrequirements.The Board, with the assistance of the Manager and the Investment Manager,monitors and reviews the broad structure of the Company's capital on an ongoingbasis. This review includes:the planned level of gearing, which takes into account the Investment Manager'sview of the market;the need to buy back equity shares, for cancellation, or to be held in treasurywhich takes account of the difference between the net asset value per share andthe share price (i.e. the level of share price discount or premium);the possible need for new issues of equity shares; andthe extent to which revenue in excess of that which is required to bedistributed should be retained.The Company's objectives, policies and processes for managing capital areunchanged from the preceding accounting period.14. Related PartiesThe following are considered to be related parties:OrbiMed Capital LLCThe Directors of the CompanyDetails of the relationship between the Company and OrbiMed Capital LLC, theCompany's Investment Manager, are disclosed in the Report of Directors. SvenBorho is a Director of the Company, as well as a Partner at OrbiMed CapitalLLC. During the year ended 31 March 2014, OrbiMed Capital LLC earned £1,967,000in respect of Investment Management fees, of which £544,000 was outstanding atthe year end. In addition, amounts totaling £2,442,000 were earned by OrbiMedCapital LLC during the year in respect of performance fees which crystallised,of which £914,000 was outstanding at the year end. All material related partytransactions have been disclosed within this announcement and in note 3.Details of the remuneration of all Directors can be found within thisannouncement.15. Capital Reserve                                                           Capital                                                         reserve -                                              Capital   investment                                             reserves     holdings                                                    -                                                other       gains/      Total                                                          (losses)                                                £'000        £'000      £'000At 31 March 2013                               94,060       76,281    170,341Transfer on disposal of investments            38,085      (38,085 )        -Net gains on investments                       26,253       61,361     87,614Exchange gains                                  1,670            -      1,670Expenses charged to capital                    (2,857 )          -     (2,857 )At 31 March 2014                              157,211       99,557    256,768Profits arising out of a change in fair value of assets, recognised inaccordance with Accounting Standards, may be distributed provided the relevantassets can be readily convertible into cash. Securities listed on a recognisedstock exchange are generally regarded as being readily convertible into cash.Under the terms of the revisions made to the Company's Articles of Associationin 2013, sums within "Capital reserves - other" are also available fordistribution.Further Information / Shareholder InformationFinancial Calendar31 March       Financial Year EndJune           Final Results Announced30 September   Half Year EndNovember       Half Year Results AnnouncedFebruary/      Interim ManagementAugust         Statement AnnouncedJuly           Annual General MeetingAnnual General MeetingThe Annual General Meeting of The Biotech Growth Trust PLC will be held at theBarber Surgeons' Hall, Monkwell Square, Wood Street, London EC2Y 5BL onThursday, 10 July 2014 at 12.30 p.m.Share PricesThe Company's Ordinary Shares are listed on the London Stock Exchange under\`Investment Companies'. The price is given daily in the Financial Times andother newspapers.Change of AddressCommunications with shareholders are mailed to the address held on the shareregister. In the event of a change of address or other amendment this should benotified to the Company's Registrars, Capita Asset Services, under thesignature of the registered holder.Daily Net Asset ValueThe daily net asset value of the Company's shares can be obtained on theCompany's website at www.biotechgt.com and is published daily via the LondonStock Exchange.Profile of the Company's Ownership% of Ordinary Shares held at 31 March                 2014                                    2013Further Information / Glossary of TermsInvestment Trust TermsAIFMThe Alternative Investment Fund Manager Directive (the "Directive") is aEuropean Union Directive that entered into force on 22 July 2013. The Directiveregulates EU fund managers that manage alternative investment funds (thisincludes investment trusts). There is a one-year transition period within whichalternative funds must comply with the provisions of the Directive.Compound Annual Growth RateThe average year-on-year growth rate of an investment over a number of years.While investments usually do not grow at a constant rate, the compound annualreturn smoothes out returns by assuming constant growth.Discount or PremiumA description of the difference between the share price and the net asset valueper share. The size of the discount or premium is calculated by subtracting theshare price from the net asset value per share and is usually expressed as apercentage (%) of the net asset value per share. If the share price is higherthan the net asset value per share the result is a premium. If the share priceis lower than the net asset value per share, the shares are trading at adiscount.GearingCalculated using the Association of Investment Companies definition.Total assets, less current liabilities (before deducting any prior charges)minus cash/cash equivalents divided by Shareholders' Funds, expressed as apercentage.Initial Public Offering (IPO)The initial offer by a company of shares to be quoted on a stock exchange.Often known as a flotation.Net Asset Value (NAV)The value of the Company's assets, principally investments made in othercompanies and cash being held, minus any liabilities. The NAV is also describedas \`shareholders' funds' per share. The NAV is often expressed in pence pershare after being divided by the number of shares which have been issued. TheNAV per share is unlikely to be the same as the share price which is the priceat which the Company's shares can be bought or sold by an investor. The shareprice is determined by the relationship between the demand and supply of theshares.Ongoing ChargesOngoing charges are calculated by taking the Company's annualised ongoingcharges, excluding performance fees and exceptional items, and dividing by theaverage net asset value of the Company over the year.Overnight Indexed Swap (OIS)An interest rate swap that serves as a measure of investor expectations of anaverage effective overnight rate over the term of the swap.RehypothecationThe pledging to banks by securities brokers of the assets in a customer'smargin account used as collateral for a loan.Total AssetsTotal assets less current liabilities before deducting prior charges. Priorcharges includes all loans for investment purposes.Treasury SharesShares previously issued by a company that have been bought back fromShareholders to be held by the Company for potential sale or cancellation at alater date. Such shares are not capable of being voted and carry no rights todividends.Further Information / How to InvestInvestment PlatformsThe Company's shares are traded openly on the London Stock Exchange and can bepurchased through a stock broker or other financial intermediary. The sharesare available through savings plans (including Investment Dealing Accounts,ISAs, Junior ISAs and SIPPs) which facilitate both regular monthly investmentsand lump sum investments in the Company's shares. There are a number ofinvestment platforms that offer these facilities. A list of some of them, thatis not comprehensive nor constitutes any form of recommendation, can be foundbelow:AJ Bell Youinvest    http://www.youinvest.co.uk/Alliance Trust       http://www.alliancetrustsavings.co.uk/SavingsBarclays             https://www.barclaysstockbrokers.co.uk/Pages/index.aspxStockbrokersCharles Stanley      https://www.charles-stanley-direct.co.uk/DirectClub Finance         http://www.clubfinance.co.uk/Fast Trade           http://www.fastrade.co.uk/wps/portalFundsDirect          http://www.fundsdirect.co.uk/Default.asp?Halifax Share        http://www.halifax.co.uk/Sharedealing/DealingHargreaves           http://www.hl.co.uk/LansdownHSBC                 https://investments.hsbc.co.uk/iDealing             http://www.idealing.com/IG Index             http://www.igindex.co.uk/Interactive          http://www.iii.co.uk/InvestorIWEB                 http://www.iweb-sharedealing.co.uk/share-dealing-home.aspJames Brearley       http://www.jbrearley.co.uk/Marketing/index.aspxNatwest              http://www.natweststockbrokers.com/nw/Stockbrokers         products-and-services/share-dealing.ashxSaga Share Direct    https://www.sagasharedirect.co.uk/Selftrade            http://www.selftrade.co.uk/The Share Centre     https://www.share.com/Saxo Capital         http://uk.saxomarkets.com/MarketsTD Direct            http://www.tddirectinvesting.co.uk/InvestingCapita Asset Services - Share Dealing ServiceA quick and easy share dealing service is available to existing shareholdersthrough the Company's Registrar, Capita Asset Services, to either buy or sellshares. An online and telephone dealing facility provides an easy to access andsimple to use service.Type of trade                 Online                TelephoneShare certificates            1% of the value of    1.5% of the value of the                              the deal              dealCosts\*                        (Minimum £21.00, max  (Minimum £28.50, max £                              £125.00)              175.00)There is no need to pre-register and there are no complicated forms to fill in.The online and telephone dealing service allows you to trade \`real time' at aknown price which will be given to you at the time you give your instruction.To deal online or by telephone all you need is your surname, shareholderreference number, full postcode and your date of birth. Your shareholderreference number can be found on your latest statement or certificate where itwill appear as either a \`folio number' or \`investor code'. Please have theappropriate documents to hand when you log on or call, as this information willbe needed before you can buy or sell shares.The maximum deal size for online trades is £25,000. Deals over this amount canbe done over the telephone and rates will be advised at the time of dealing.For further information on this service please contact: www.capitadeal.com(online dealing) or 0871 664 0364† (telephone dealing).If calling from outside of the UK please dial +44 (0) 203 367 2686† Calls cost 10p per minute plus network extras and may be recorded fortraining purposes. Lines are open from 8.00 a.m. to 4.30 p.m. Monday to Friday.\*These are correct at the time of printing and may be subject to change. Pleasevisit www.capitadeal.com for the current costs.RISK WARNINGSPast performance is no guarantee of future performance.The value of your investment and any income from it may go down as well as upand you may not get back the amount invested. This is because the share priceis determined, in part, by the changing conditions in the relevant stockmarketsin which the Company invests and by the supply and demand for the Company'sshares.As the shares in an investment trust are traded on a stockmarket, the shareprice will fluctuate in accordance with supply and demand and may not reflectthe underlying net asset value of the shares; where the share price is lessthan the underlying value of the assets, the difference is known as the\`discount'. For these reasons, investors may not get back the original amountinvested.Although the Company's financial statements are denominated in sterling, all ofthe holdings in the portfolio are currently denominated in currencies otherthan sterling and therefore they may be affected by movements in exchangerates. As a result, the value of your investment may rise or fall withmovements in exchange rates.Investors should note that tax rates and reliefs may change at any time in thefuture.The value of ISA and Junior ISA tax advantages will depend on personalcircumstances. The favourable tax treatment of ISAs and Junior ISAs may not bemaintained.Further Information / Notice of the Annual General MeetingNotice is hereby given that the Annual General Meeting of The Biotech GrowthTrust PLC will be held at the Barber-Surgeons' Hall, Monkwell Square, WoodStreet, London EC2Y 5BL on Thursday, 10 July 2014 at 12.30 p.m. for thefollowing purposes:Ordinary BusinessTo consider and, if thought fit, pass the following as ordinary resolutions:1.To receive and, if thought fit, to accept the Audited Financial Statementsand the Report of the Directors for the year ended 31 March 20142.To approve the Directors' Remuneration Report for the year ended 31 March20143.To receive and approve the Remuneration Policy4. To re-elect The Rt Hon Lord Waldegrave of North Hill as a Director of theCompany5. To re-elect Professor Dame Kay Davies, DBE as a Director of the Company6. To re-elect Andrew Joy as a Director of the Company7. To re-elect Sven Borho as a Director of the Company8. To re-elect Paul Gaunt as a Director of the Company9. To re-elect Peter Keen as a Director of the Company10. To appoint Ernst & Young LLP as Auditors to the Company and to authorisethe Directors to determine their remunerationAuditors have to be appointed at each general meeting at which the annualreport and accounts are presented to shareholders. On the recommendation of theAudit and Management Engagement Committee, the Board are proposing to appointErnst & Young LLP as auditor to the Company following a formal tender processand the subsequent resignation of Grant Thornton UK LLP with effect from theconclusion of the Annual General Meeting to be held on 10 July 2014.Accordingly, shareholder approval is now sought to appoint Ernst & Young LLP asauditor of the Company and to authorise the Directors to determine theirremuneration. As resigning auditor, Grant Thornton UK LLP has provided theCompany with a \`Statement of Circumstances' confirming that it resigned asauditor of the Company following the tender process. A copy of the \`Statementof Circumstances' can be obtained from the Company Secretary upon request.Special BusinessTo consider and, if thought fit, pass the following resolutions of whichresolutions 12, 13, 14 and 16 will be proposed as special resolutions:Authority to Allot Shares11.THAT in substitution for all existing authorities the Directors be and arehereby generally and unconditionally authorised in accordance with Section 551of the Companies Act 2006 (the "Act") to exercise all powers of the Company toallot relevant securities (within the meaning of Section 551 of the Act) up toa maximum aggregate nominal amount of £1,702,922 (being 10% of the issued sharecapital of the Company at the date of the notice convening the meeting at whichthis resolution is proposed) and representing 6,811,691 shares of 25 pence each(or, if less, the number representing 10% of the issued share capital of theCompany at the date at which this resolution is passed), provided that thisauthority shall expire at the conclusion of the Annual General Meeting of theCompany to be held in 2015 or 15 months from the date of passing thisresolution, whichever is the earlier, unless previously revoked, varied orrenewed, by the Company in general meeting and provided that the Company shallbe entitled to make, prior to the expiry of such authority, an offer oragreement which would or might require relevant securities to be allotted aftersuch expiry and the Directors may allot relevant securities pursuant to suchoffer or agreement as if the authority conferred hereby had not expired.Disapplication of Pre-emption Rights12.THAT in substitution of all existing powers the Directors be and are herebygenerally empowered pursuant to Sections 570 and 573 of the Companies Act 2006(the "Act") to allot equity securities (within the meaning of section 560 ofthe Act) including if immediately before the allotment, such shares are held bythe Company as treasury shares (as defined in Section 724 of the Act) for cashpursuant to the authority conferred on them by resolution 11 set out in thenotice convening the Annual General Meeting at which this resolution isproposed or otherwise as if section 561(1) of the Act did not apply to any suchallotment and to sell relevant shares (within the meaning of section 560 of theAct) for cash as if section 561(1) of the Act did not apply to any such sale,provided that this power shall be limited to the allotment of equity securitiespursuant to:(a)an offer of equity securities open for acceptance for a period fixed by theDirectors where the equity securities respectively attributable to theinterests of holders of shares of 25 pence each in the Company ("Shares") areproportionate (as nearly as may be) to the respective numbers of Shares held bythem but subject to such exclusions or other arrangements in connection withthe issue as the Directors may consider necessary, appropriate, or expedient todeal with equity securities representing fractional entitlements or to dealwith legal or practical problems arising in any overseas territory, therequirements of any regulatory body or stock exchange, or any other matterwhatsoever; and(b)(otherwise than pursuant to sub-paragraph (a) above) up to an aggregatenominal value of £1,702,922 or, if less, the number representing 10% of theissued share capital of the Company at the date of the meeting at which thisresolution is passed,and expires at the conclusion of the next Annual General Meeting of the Companyafter the passing of this resolution or 15 months from the date of passing thisresolution, whichever is the earlier, unless previously revoked, varied orrenewed by the Company in general meeting and provided that the Company shallbe entitled to make, prior to the expiry of such authority, an offer oragreement which would or might require equity securities to be allotted aftersuch expiry and the Directors may allot equity securities pursuant to suchoffer or agreement as if the power conferred hereby had not expired.Authority to Repurchase Ordinary Shares13.THAT the Company be and is hereby generally and unconditionally authorisedin accordance with section 701 of the Companies Act 2006 (the "Act") to makeone or more market purchases (within the meaning of section 693(4) of the Act)of ordinary shares of 25 pence each in the capital of the Company ("Shares")either for retention as treasury shares for future reissue, resale, transfer orfor cancellation provided that:(a)the maximum aggregate number of Shares authorised to be purchased is10,210,724 (representing approximately 14.99% of the issued share capital ofthe Company at the date of the notice convening the meeting at which thisresolution is proposed);(b)the minimum price (exclusive of expenses) which may be paid for a Share is25 pence;(c)the maximum price (exclusive of expenses) which may be paid for a Share isan amount equal to the greater of (i) 105% of the average of the middle marketquotations for a Share as derived from the Daily Official List of the LondonStock Exchange for the five business days immediately preceding the day onwhich that Share is purchased and (ii) the higher of the price of the lastindependent trade in shares and the highest then current independent bid forshares on the London Stock Exchange as stipulated in Article 5(1) of RegulationNo. 2233/2003 of the European Commission (Commission Regulation of 22 December2003 implementing theMarket Abuse Directive as regards exemptions for buy-back programmes andstabilisation of financial instruments);(d)the authority hereby conferred shall expire at the conclusion of the AnnualGeneral Meeting of the Company to be held in 2015 or, if earlier, on the expiryof 15 months from the date of the passing of this resolution unless suchauthority is renewed prior to such time; and(e)the Company may make a contract to purchase Shares under this authoritybefore the expiry of such authority which will or may be executed wholly orpartly after the expiration of such authority, and may make a purchase ofShares in pursuance of any such contract.Adoption of New Articles of Association14.THAT the Articles of Association set out in the document produced to themeeting and signed by the Chairman of the meeting for the purposes ofidentification be and are hereby approved and adopted as the Articles ofAssociation of the Company in substitution for and to the exclusion of theexisting Articles of Association of the Company.Full explanatory notes of principal changes to the Articles of Association areset within this announcement.Directors' Fees15.THAT the limit of Directors' fees be increased from £200,000 to £250,000 inaggregate per annum.General Meetings16.THAT the Directors be authorised to call general meetings (other than annualgeneral meetings) on not less than 14 clear days' notice, such authority toexpire at the conclusion of the next Annual General Meeting of the Company or,if earlier, until expiry of 15 months from the date of the passing of thisresolution.By order of the Board                                        Registered office:                                                                One Wood StreetFrostrow Capital LLP                                            London EC2V 7WSCompany Secretary22 May 2014Notes1. Members are entitled to appoint a proxy to exercise all or any of theirrights to attend and to speak and vote on their behalf at the meeting. Ashareholder may appoint more than one proxy in relation to the meeting providedthat each proxy is appointed to exercise the rights attached to a differentshare or shares held by that shareholder. A proxy need not be a shareholder ofthe Company. A proxy form which may be used to make such appointment and giveproxy instructions accompanies this notice.2.A vote withheld is not a vote in law, which means that the vote will not becounted in the calculation of votes for or against the resolutions. If novoting indication is given, a proxy may vote or abstain from voting at his/herdiscretion. A proxy may vote (or abstain from voting) as he or she thinks fitin relation to any other matter which is put before the meeting.3.To be valid any proxy form or other instrument appointing a proxy must becompleted and signed and received by post or (during normal business hoursonly) by hand at Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, KentBR3 4TU no later than 12.30 p.m. on 8 July 2014.4.In the case of a member which is a company, the instrument appointing a proxymust be executed under its seal or signed on its behalf by a duly authorisedofficer or attorney or other person authorised to sign. Any power of attorneyor other authority under which the instrument is signed (or a certified copy ofit) must be included with the instrument.5 The return of a completed proxy form, other such instrument or any CRESTProxy Instruction (as described below) will not prevent a shareholder attendingthe meeting and voting in person if he/she wishes to do so.6.Any person to whom this notice is sent who is a person nominated undersection 146 of the Companies Act 2006 to enjoy information rights (a "NominatedPerson") may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or have someone elseappointed) as a proxy for the meeting. If a Nominated Person has no such proxyappointment right or does not wish to exercise it, he/she may, under any suchagreement, have a right to give instructions to the shareholder as to theexercise of voting rights.7.The statement of the rights of shareholders in relation to the appointment ofproxies in paragraphs 1 and 3 above does not apply to Nominated Persons. Therights described in these paragraphs can only be exercised by shareholders ofthe Company.8.Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001,only shareholders registered on the register of members of the Company (the"Register of Members") at 5.30 p.m. on 8 July 2014 (or, in the event of anyadjournment, on the date which is two days before the time of the adjournedmeeting) will be entitled to attend and vote or be represented at the meetingin respect of shares registered in their name at that time. Changes to theRegister of Members after that time will be disregarded in determining therights of any person to attend and vote at the meeting.9.As at 22 May 2014 (being the last business day prior to the publication ofthis notice) the Company's issued share capital consists of 68,886,347 ordinaryshares (including 769,437 shares held in treasury), carrying one vote each.Therefore, the total voting rights in the Company as at 22 May 2014 are68,116,910.10.CREST members who wish to appoint a proxy or proxies through the CRESTelectronic proxy appointment service may do so by using the proceduresdescribed in the CREST Manual. CREST Personal Members or other CREST sponsoredmembers, and those CREST members who have appointed a service provider(s),should refer to their CREST sponsor or voting service provider(s), who will beable to take the appropriate action on their behalf.11.In order for a proxy appointment or instruction made using the CREST serviceto be valid, the appropriate CREST message (a "CREST Proxy Instruction") mustbe properly authenticated in accordance with the specifications of Euroclear UKand Ireland Limited ("CRESTCo"), and must contain the information required forsuch instruction, as described in the CREST Manual. The message, regardless ofwhether it constitutes the appointment of a proxy or is an amendment to theinstruction given to a previously appointed proxy must, in order to be valid,be transmitted so as to be received by the issuer's agent (ID RA10) no laterthan 48 hours before the time appointed for holding the meeting. For thispurpose, the time of receipt will be taken to be the time (as determined by thetimestamp applied to the message by the CREST Application Host) from which theissuer's agent is able to retrieve the message by enquiry to CREST in themanner prescribed by CREST. After this time any change of instructions toproxies appointed through CREST should be communicated to the appointee throughother means.12.CREST members and, where applicable, their CREST sponsors, or voting serviceproviders should note that CRESTCo does not make available special proceduresin CREST for any particular message. Normal system timings and limitationswill, therefore, apply in relation to the input of CREST Proxy Instructions. Itis the responsibility of the CREST member concerned to take (or, if the CRESTmember is a CREST personal member, or sponsored member, or has appointed avoting service provider, to procure that his CREST sponsor or voting serviceprovider(s) take(s)) such action as shall be necessary to ensure that a messageis transmitted by means of the CREST system by any particular time. In thisconnection, CREST members and, where applicable, their CREST sponsors or votingsystem providers are referred, in particular, to those sections of the CRESTManual concerning practical limitations of the CREST system and timings.13.The Company may treat as invalid a CREST Proxy Instruction in thecircumstances set out in Regulation 35(5)(a) of the Uncertificated SecuritiesRegulations 2001.14.In the case of joint holders, where more than one of the joint holderspurports to appoint a proxy, only the appointment submitted by the most seniorholder will be accepted. Seniority is determined by the order in which thenames of the joint holders appear in the Register of Members in respect of thejoint holding (the first named being the most senior).15.Members who wish to change their proxy instructions should submit a newproxy appointment using the methods set out above. Note that the cut-off timefor receipt of proxy appointments (see above) also applies in relation toamended instructions; any amended proxy appointment received after the relevantcut-off time will be disregarded.16.Members who have appointed a proxy using the hard-copy proxy form and whowish to change the instructions using another hard-copy form, should contactCapita Asset Services on 0871 664 0300 (calls cost 10p per minute plus networkextras). Lines are open 8.30am to 5.30pm Monday to Friday.17.If a member submits more than one valid proxy appointment, the appointmentreceived last before the latest time for the receipt of proxies will takeprecedence.18.In order to revoke a proxy instruction, members will need to inform theCompany. Members should send a signed hard copy notice clearly stating theirintention to revoke a proxy appointment to Capita Asset Services, PXS, 34Beckenham Road, Beckenham, Kent BR3 4TU.In the case of a member which is a company, the revocation notice must beexecuted under its common seal or signed on its behalf by an officer of thecompany or an attorney for the company. Any power of attorney or any otherauthority under which the revocation notice is signed (or a duly certified copyof such power of attorney) must be included with the revocation notice. If amember attempts to revoke their proxy appointment but the revocation isreceived after the time for receipt of proxy appointments (see above) then,subject to paragraph 4, the proxy appointment will remain valid.                    LOCATION OF THE ANNUAL GENERAL MEETING   the Barber-Surgeons' Hall, Monkwell Square, Wood Street, London EC2Y 5BLFurther Information / Explanatory Notes to the ResolutionsResolution 1 - To receive the Annual Report and AccountsThe Annual Report and Accounts for the year ended 31 March 2014 will bepresented to the Annual General Meeting. These accounts accompanied this Noticeof Meeting and shareholders will be given an opportunity at the meeting to askquestions.Resolutions 2 to 3 - Remuneration Policy and Remuneration ReportIt is now mandatory for all listed companies to put both their Report onDirectors' Remuneration and their Remuneration Policy to a shareholder vote.The Report on Directors' Remuneration and the Directors' Remuneration PolicyReport are set out in full within this announcement.Resolutions 4 to 9 - Re-election of DirectorsResolutions 4 to 9 deal with the re-election of each Director.The Board has confirmed, following a performance review, that the Directorsstanding for election and re-election continue to perform effectively.Resolution 10 - Appointment of Auditors and the determination of theirremunerationResolution 10 relates to the appointment of Ernst & Young LLP as the Company'sindependent auditors to hold office until the next Annual General Meeting ofthe Company and also authorises the Directors to set their remuneration.Full details concerning the audit tender process can be found in the Audit andManagement Engagement Committee Report.Resolutions 11 and 12 - Issue of SharesOrdinary Resolution No. 11 in the Notice of Annual General Meeting will renewthe authority to allot the unissued share capital up to an aggregate nominalamount of £1,702,922 (equivalent to 6,811,691 shares, or 10% of the Company'sexisting issued share capital on 22 May 2014, being the nearest practicabledate prior to the signing of this Report). Such authority will expire on thedate of the next Annual General Meeting or after a period of 15 months from thedate of the passing of the resolution, whichever is earlier. This means thatthe authority will have to be renewed at the next Annual General Meeting.When shares are to be allotted for cash, Section 551 of the Companies Act 2006(the "Act") provides that existing shareholders have pre-emption rights andthat the new shares must be offered first to such shareholders in proportion totheir existing holding of shares. However, shareholders can, by specialresolution, authorise the Directors to allot shares otherwise than by a prorata issue to existing shareholders. Special Resolution No. 12 will, if passed,give the Directors power to allot for cash equity securities up to 10% of theCompany's existing share capital on 22 May 2014, as if Section 551 of the Actdoes not apply. This is the same nominal amount of share capital which theDirectors are seeking the authority to allot pursuant to Resolution No. 11.This authority will also expire on the date of the next Annual General Meetingor after a period of 15 months, whichever is earlier. This authority will notbe used in connection with a rights issue by the Company.The Directors intend to use the authority given by Resolutions Nos. 11 and 12to allot shares and disapply pre-emption rights only in circumstances wherethis will be clearly beneficial to shareholders as a whole. The issue proceedswould be available for investment in line with the Company's investment policy.No issue of shares will be made which would effectively alter the control ofthe Company without the prior approval of shareholders in general meeting.Resolution 13 - Share RepurchasesThe Directors wish to renew the authority given by shareholders at the previousAnnual General Meeting. The principal aim of a share buy-back facility is toenhance shareholder value by acquiring shares at a discount to net asset value,as and when the Directors consider this to be appropriate. The purchase ofshares, when they are trading at a discount to net asset value per share,should result in an increase in the net asset value per share for the remainingshareholders. This authority, if conferred, will only be exercised if to do sowould result in an increase in the net asset value per share for the remainingshareholders and if it is in the best interests of shareholders generally. Anypurchase of shares will be made within guidelines established from time to timeby the Board. It is proposed to seek shareholder authority to renew thisfacility for another year at the Annual General Meeting.Under the current Listing Rules, the maximum price that may be paid on theexercise of this authority must not exceed the higher of (i) 105% of theaverage of the middle market quotations for the shares over the five businessdays immediately preceding the date of purchase and (ii) the higher of the lastindependent trade and the highest current independent bid on the trading venuewhere the purchase is carried out. The minimum price which may be paid is 25pper share. Shares which are purchased under this authority will either becancelled or held as treasury shares.Special Resolution No. 13 in the Notice of Annual General Meeting will renewthe authority to purchase in the market a maximum of 14.99% of shares in issueon 22 May 2014, being the nearest practicable date prior to the signing of thisReport, (amounting to 10,210,724 shares). Such authority will expire on thedate of the next Annual General Meeting or after a period of 15 months from thedate of passing of the resolution, whichever is earlier. This means in effectthat the authority will have to be renewed at the next Annual General Meetingor earlier if the authority has been exhausted.Resolution 14 - Amendment to Articles of AssociationIt is proposed to make certain changes to the Company's Articles of Associationin order to reflect changes prompted by the introduction of the EU AlternativeInvestment Fund Managers Directive. Full explanatory notes of Principal Changesto the Articles of Association are set out below.Resolution 15 - Directors' RemunerationShareholder approval is sought to increase the limit on Director's fees from £200,000 to £250,000 in aggregate per annum.Shareholder approval to increase the limit on Directors fees was last sought in2009. Directors are now seeking shareholder approval to increase the limit aspart of board succession planning whereby there may be a period of overlapbetween the appointment of a new director and the retirement of an existingmember of the Board.Resolution 16 - General MeetingsSpecial Resolution No. 16 seeks shareholder approval for the Company to holdGeneral Meetings (other than the Annual General Meeting) at 14 clear days'notice.RecommendationThe Board considers that the resolutions relating to the above items of specialbusiness, are in the best interests of shareholders as a whole. Accordingly,the Board unanimously recommends to the shareholders that they vote in favourof the above resolutions to be proposed at the forthcoming Annual GeneralMeeting as the Directors intend to do in respect of their own beneficialholdings totaling 444,934 shares.Further Information / Explanatory Notes of Principal Changes to the Company'sArticles of AssociationIt is proposed that the Company adopts new Articles of Association ("Articles")to reflect changes prompted by the introduction of the EU AlternativeInvestment Fund Managers Directive ("AIFMD")Set out below is a summary of the principal changes in the Articles to beadopted at the Annual General Meeting of the Company to be held on 10 July2014.A copy of the current Articles and of the proposed new Articles marked up toshow the proposed amendments will be available for inspection at the offices ofFrostrow Capital LLP during normal business hours and will be available forinspection at theAnnual General Meeting, in each case until conclusion of the meeting.The Company is an alternative investment fund for the purposes of the AIFMD.The AIFMD and its implementing regulations require that certain disclosures bemade in the instrument constituting the Company.For this reason, the Company is proposing that the Articles be amended toprovide that the Company's annual report and accounts will be prepared inaccordance with generally accepted accounting standards or such otheraccounting standards determined by the Company's directors and permitted by UKlaw from time to time. Additionally, it is proposed that the Articles beamended to state that valuations will be made in accordance with the accountingstandards then in force.The Company is proposing that the Articles be amended to provide that the netasset value of the Company will be calculated at least annually and shall bedisclosed to shareholders from time to time in such manner as may be determinedby the Company's directors.The Company is also proposing that the Articles be amended to provide that theinformation required by the AIFMD to be disclosed to shareholders prior to aninvestment in the Company shall be made available to prospective and existingshareholders from time to time in such manner as may be determined by theCompany's directors.Such disclosures reflect current practice by the Company and do not reflect achange in policy.The Company is proposing to appoint J.P. Morgan Europe Limited ("J.P. Morgan")as its depositary on the terms and subject to the conditions prescribed in theAIFMD. Article 21(14)(a) of the AIFMD states that, where the law of a thirdcountry requires that financial instruments are held in custody by a localentity and there are no local entities that satisfy the delegation requirementslaid down in the AIFMD, J.P. Morgan can discharge itself of liability for anyloss caused to the Company or its investors by such local entity provided thatthe Articles of the Company expressly allow for such a discharge. Therefore,J.P. Morgan has requested that the Articles be amended to expressly allow forsuch discharge of liability, and the amended Articles will make such provision.Further Information / Statement of CircumstancesThe Company SecretaryThe Biotech Growth Trust plcOne Wood StreetLondonEC2V 7WS22 May 2014Company Number 3376377The Biotech Growth Trust plcFurther to the requirements of section 519 of the Companies Act 2006 thecircumstances connected with our ceasing to hold office are as follows:we were not reappointed after a tender process for the auditorsGrant Thornton UK LLPFurther Information / Company InformationDirectorsThe Rt Hon Lord Waldegrave of North Hill, (Chairman) Sven BorhoProfessor Dame Kay Davies, DBEPaul GauntDr John Gordon (Senior Independent Director and Chairman of the RemunerationCommittee)Andrew JoyPeter Keen (Chairman of the Audit and ManagementEngagement Committee)Registered OfficeOne Wood StreetLondon EC2V 7WSWebsitewww.biotechgt.comCompany Registration Number3376377 (Registered in England)The Company is an investment company as defined under Section 833 of theCompanies Act 2006.The Company was incorporated in England on 20 May 1997. The Company wasincorporated as Reabourne Merlin Life Sciences Investment Trust PLC.Investment ManagerOrbiMed Capital LLC601 Lexington Avenue, 54th FloorNew York NY10022 USATelephone: +1 212 739 6400Website: www.orbimed.comRegistered under the U.S. Securities and Exchange Commission.Manager, Company Secretary and AdministratorFrostrow Capital LLP25 Southampton Buildings LondonWC2A 1ALTelephone: 0203 008 4910E-Mail: [email protected]: www.frostrow.comAuthorised and regulated by the Financial Conduct Authority.If you have an enquiry about the Company or if you would like to receive a copyof the Company's monthly fact sheet by e-mail, please contact Frostrow Capitalusing the stated e-mail address.Independent AuditorsGrant Thornton UK LLP30 Finsbury SquareLondon EC2P 2YUCustodian and BankerGoldman Sachs & Co.200 West Street, Third FloorNew York, NY 10282 USARegistrarsCapita Asset ServicesThe Registry34 Beckenham RoadBeckenhamKent BR3 4TUTelephone (in UK): 0871 664 0300†Telephone (from overseas): +44 20 8639 3399Facsimile: +44 (0) 1484 600911E-Mail: [email protected]: www.capitaassetservices.comPlease contact the Registrars if you have a query about a certificated holdingin the Company's shares.† calls cost 10p per minute plus network charges and may be recorded fortraining purposes. Lines are open from 8.30 a.m. to 5.30 p.m. Monday to Friday.BrokersWinterflood Securities LimitedThe Atrium BuildingCannon Bridge25 Dow Gate HillLondon EC4R 2GASolicitorsDechert LLP160 Queen Victoria StreetLondon EC4V 4QQIdentification CodesShares:SEDOL 0038551ISIN:GB0000385517BLOOMBERG:BIOG LNEPIC:BIOG22 May 2014020 3170 8732www.frostrow.comThe Annual Report will be posted to shareholders on Friday, 30 May 2014 Furthercopies may be obtained from Frostrow Capital LLP, the Company Secretary at 25Southampton Buildings, London WC2A 1AL.A copy of the Annual Report will be submitted to the National Storage Mechanismand will shortly be available for inspection at www.hemscott.com/nsm.doThe Annual Report is also available on the Company's website atwww.biotechgt.com where up to date information on the Company, including dailyNAV, share prices and fact sheets, can also be found.EndThe Rt Hon Lord Waldegrave of North HillChairman
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THE BIOTECH GROWTH TRUST PLC - Final Results

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