TIDMMAV4 TIDMMAVC
RNS Number : 4783E
Maven Income & Growth VCT 4 PLC
09 April 2014
Maven Income and Growth VCT 4 PLC
Final results for the year ended 31 December 2013
Chairman's Statement
The Directors report the Company's financial results for the
year ended 31 December 2013.
On behalf of your Board I am pleased to announce the results for
the twelve months to 31 December 2013, with net assets increasing
to GBP29 million following a positive trading period, the merger
with Ortus VCT plc and a successful Offer for subscription which
raised a further GBP4.2 million of share capital.
Following shareholder approval, the Company completed a share
class consolidation and a merger with Ortus VCT PLC on 3 April
2013, details of which were contained in a shareholder circular and
prospectus dated 1 March 2013. The objective was to create a larger
and more efficient Company while protecting shareholders from the
lack of diversification in the Ortus portfolio resulting from the
investment strategy pursued prior to the appointment of Maven
Capital Partners UK LLP (Maven) as Manager. The Boards of both
Companies agreed that the common assets would merge into the
Ordinary Share pool and the legacy investments would be segregated
into a new C Share pool, which would be managed separately for a
period of up to two years. Ortus Shareholders received shares in
each pool.
As a result of the merger, and expansion of the asset base
through ongoing investment in private equity holdings, the enlarged
Ordinary portfolio has generated income from investments in excess
of GBP1 million in the period under review, enabling your Board to
declare an increased annual revenue dividend for Ordinary
Shareholders.
The Maven team has continued to demonstrate its ability to
create value in investee companies and attract interest from
buyers, and several successful exits have been achieved during the
period, including a realisation of the largest legacy asset within
the C Share portfolio. Proceeds from these disposals have enabled
both share pools to invest in further income generating later-stage
businesses, and your Company participated in eleven new private
equity transactions, as well as seven follow-on investments
supporting the development of existing investee companies during
the twelve month period. The majority of these businesses are
trading positively, and strong performances have enabled the Board
to write up the values of, amongst others, Maven
Co-invest Exodus, Torridon and Steminic. Conversely, adverse
events at Lawrence Recycling, Training for Travel and Higher Nature
have led to their values being reduced or written off. Developments
within the portfolio are detailed in the Investment Manager's
Review.
In line with the strategy of reducing the exposure to AIM, a
number of further disposals were made during the period and at the
year end listed securities represented only 1% of the asset base
for the Ordinary Share pool and 11% for the C Share pool. The
Manager will continue the policy of disposing of quoted holdings
for best possible value in cases where the investments are
underperforming or to take the opportunity to lock in profits.
We are also pleased to note that Maven's success as a private
equity manager has continued to be acknowledged, with a range of
nominations and awards across the UK which recognise the quality of
its investment team and your Company's portfolio.
Highlights for the year
-- NAV total return of 127.90p per Ordinary Share (2012:
122.75p) at the year end, up 4.2% over the year
-- NAV at period end of 98.60p per Ordinary Share (2012: 98.20p)
and 94.00p per C Ordinary Share
-- Eleven new investments added to the portfolio
-- Realisation of Atlantic Foods Group for a total return of 1.8x cost
-- Partial exit from Homelux Nenplas at an exit multiple of 3.8x
cost alongside a secondary buy-out of the Nenplas business
-- Successful IPO of esure, generating cash proceeds of
GBP602,000 and an exit multiple of 2.8x cost
-- Final dividend proposed of 2.65p per share making the full
year dividend 4.65p (2012: 4.50p)
Dividends
The Board recommends a final dividend of 2.65p per Ordinary
Share to be paid on 30 May 2014 to Shareholders on the Register at
9 May 2014. This brings total dividends for the year to 4.65p per
Ordinary Share, representing a yield of 5.6% on the year end
closing share price of 83.12p.
Since the Company's launch, and after receipt of the proposed
final dividend, Ordinary Shareholders will have received 31.95p per
share to date in tax-free dividends. The effect of paying the
proposed dividend would be to reduce the NAV of the Company by the
total cost of the distribution.
Ortus Shareholders received a special dividend of 2.00p per
Ortus Ordinary Share on 17 April 2013, paid from cash transferred
from Ortus to the C Share pool. By that time, Ordinary, S and Ortus
Shareholders who invested at the outset had received dividends
totalling 27.30p, 13.35p and 15.41p respectively.
New Annual Reporting Requirements
Changes have been made to the narrative reporting requirements
for annual reports in respect of years ending on or after 30
September 2013 and, therefore, this report includes a Strategic
Report, a revised format for the Directors' Remuneration Report
(including a new Remuneration Policy Report) and a number of other
consequent changes, including enhanced reports on the activities of
the Audit Committee.
Fund Raising and Share Buy-backs
An Offer for Subscription was included in the Ortus merger
documentation, resulting in the issue of 4,324,206 new Ordinary
Shares and raising an additional GBP4,224,749 of share capital. The
Offer closed on 30 April 2013.
In September 2013, the Company announced that it planned to
raise up to GBP4 million in a joint Offer for Subscription
alongside the other Maven VCTs. The first allotment under the Offer
took place on 3 February 2014 when 2,432,334 new Ordinary Shares
were issued. On 5 April 2014 a further 1,292,767 new Ordinary
Shares were issued in respect of the 2013/14 tax year. It is
anticipated that the Offer will remain open until 30 April 2014 in
respect of the 2014/15 tax year, unless fully subscribed at an
earlier date and subject to the Directors' right to close or extend
the Offer at any time. The full terms of the Offer, which includes
an over-allotment facility to allow the Company to raise a further
GBP1 million, are set out in a detailed Prospectus that was issued
on 24 October 2013, along with a Circular explaining the necessary
authorities required for the Offer to proceed, which were duly
confirmed at a General Meeting held on 27 November 2013. Additional
information was provided in the Supplementary Prospectuses issued
on 10 February, 17 March and 7 April 2014.
The Company may use the money raised under these Offers to pay
dividends and general running costs, thereby preserving for
investment purposes an equivalent sum of more valuable 'old money'
which operates under more advantageous VCT regulations. The
proceeds of the Offers will provide additional liquidity for the
Company to make further later-stage investments, and enable it to
spread its costs over a larger asset base to the benefit of all
Shareholders.
Shareholders should be aware that the Board's primary objective
is for the Company to retain sufficient liquid assets for making
investments in line with its stated policy and for the continued
payment of dividends to Shareholders. However, the Directors also
acknowledge the need to maintain an orderly market in the Company's
shares and have delegated authority to the Manager to buy back
shares in the market for cancellation, subject always to such
transactions being in the best interest of Shareholders. It is
intended that, subject to market conditions, available liquidity
and the maintenance of the Company's VCT status, shares will be
bought back at prices representing a discount of up to 15% per
Ordinary Share and up to 20% per C Ordinary Share to the prevailing
NAV per share.
VCT Regulatory Developments
The Association of Investment Companies (AIC) worked closely
with the Financial Services Authority (FSA) on Consultation Paper
12-19 (restrictions on the retail distribution of unregulated
collective investment schemes and close substitutes) and its
applicability to venture capital trusts. The Board supported the
AIC in calling on the FSA to exclude VCTs from the proposals, as
investment trusts had been excluded, and was pleased to note the
subsequent announcement by the Financial Conduct Authority (FCA,
which replaced the FSA) that VCTs had been excluded from the
marketing restrictions.
The Alternative Investment Fund Managers Directive (AIFMD) came
into force on 21 July 2011 and was implemented within the UK on 22
July 2013. The AIC has published a briefing paper reviewing the key
issues, including confirmation that the UK will impose a compliance
deadline of July 2014. The Board and the Manager have engaged legal
advisers to ensure that the impact of the legislation has been
considered fully, and the Board has taken the decision to register
Maven Income and Growth VCT 4 PLC as a self-managed small
registered AIFM. This will enable the Company to take advantage of
the reduced reporting requirements and avoid the direct and
indirect costs of appointing a depositary; the application was
submitted on 22 January 2014.
The AIC has participated in a consultation process to ensure the
Government's continued long-term support for the VCT sector by
addressing concerns from HM Treasury that enhanced shared buy-back
(EBB) schemes conflict with the public policy objectives of venture
capital trusts. Whilst it is proposed that the buy-back and
cancellation of shares will continue to be permitted, it is the
Government's intention, through the Finance Bill, that EBBs will be
prohibited, and in light of this the Board has not offered
Shareholders the opportunity to participate in an EBB scheme during
2013.
Board of Directors
Following the merger with Ortus VCT on 3 April 2013, I was
pleased to welcome David Potter to the Board as a director. David
is the former chairman of Ortus. Although this has led to a
temporary increase in the number of directors, the size of the
Board will return to previous levels when the C pool is finally
merged, and your Company has a single class of Ordinary Shares.
The Future
The past year has been another period of significant change and
positive developments for your Company, and the Board notes that
the benefits and efficiencies which were expected from the merger
have already helped towards achieving a lower total expense ratio,
due to the larger capital base, and an increase in tax-free returns
to all Shareholders. The Board believes that the selective,
later-stage investment policy pursued by the Manager will continue
to be successful, and will deliver further growth in Shareholder
value in the years ahead.
Ian Cormack
Chairman
9 April 2014
Strategic Report
This Strategic Report has been prepared by the Directors in
accordance with Section 414 of the Companies Act 2006, as amended.
The Company's Auditor is required to report if there are any
material inconsistencies between this Report and the Financial
Statements.
The Board
The Board, which is responsible for setting and monitoring the
Company's strategy, currently consists of six non-executive
Directors, all of whom are male. The names and biographies of the
Directors indicate their range of investment, commercial and
professional experience. Further details are also provided in the
Directors' Report and the Statement of Corporate Governance.
Investment Objective
The Company aims to achieve long term capital appreciation and
generate maintainable levels of income for Shareholders.
Statement of Investment Policy
Under an investment policy approved by the Directors the Company
intends to achieve its objective by:
-- investing the majority of its funds in a diversified
portfolio of shares and securities in smaller, unquoted UK
companies and AIM/ISDX quoted companies which meet the criteria for
VCT qualifying investments and have strong growth potential;
-- investing no more than GBP1 million in any company in one
year and no more than 15 per cent of the Company's assets by cost
in one business at any time; and
-- borrowing up to 15 per cent of net asset value, if required
and only on a selective basis, in pursuit of its investment
strategy.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Company are as
follows:
Investment Risk
Many of the Company's investments are in small and medium sized
unlisted and AIM/ISDX quoted companies which, by their nature,
entail a higher level of risk and lower liquidity than investments
in large quoted companies. The Board aims to limit the risk
attaching to the investment portfolio as a whole by ensuring a
structured selection, monitoring and realisation process. The Board
reviews the investment portfolio with the Manager on a regular
basis.
The Company manages and minimises investment risk by:
-- diversifying across a large number of companies;
-- diversifying across a range of economic sectors;
-- actively and closely monitoring the progress of investee companies;
-- seeking to appoint a non-executive director to the board of
each private investee company, provided from the Manager's
investment management team or from its pool of experienced
independent directors;
-- co-investing with other funds run by the Manager in larger
deals, which tend to carry less risk;
-- not investing in hostile public to private transactions; and
-- retaining the services of a Manager that can provide the
resources required to achieve the investment objective and meet the
criteria stated above.
An explanation of certain risks and how they are managed is
contained in Note 17 to the Financial Statements.
Financial and Liquidity Risk
As most of the investments require a mid to long term commitment
and are relatively illiquid, the Company retains a portion of the
portfolio in cash or cash equivalents in order to finance any new
unquoted investment opportunities. The Company has no direct
exposure to currency risk and does not enter into any derivative
transactions.
Economic Risk
The valuation of investment companies may be affected by
underlying economic conditions such as fluctuating interest rates
and the availability of bank finance.
Credit Risk
The Company may hold financial instruments and cash deposits and
is dependent on counterparties discharging their agreed
responsibilities. The Directors consider the creditworthiness of
the counterparties to such instruments and seek to ensure that
there is no undue concentration of exposure to any one party.
Internal Control Risk
The Board reviews regularly the system of internal controls,
both financial and non-financial, operated by the Company and the
Manager. These include controls designed to ensure that the
Company's assets are safeguarded and that all records are complete
and accurate.
VCT Qualifying Status Risk
The Company operates in a complex regulatory environment and
faces a number of related risks, including:
-- becoming subject to capital gains tax on the sale of its
investments as a result of a breach of Section 274 of the Income
Tax Act 2007;
-- loss of VCT status and consequent loss of tax reliefs
currently available to Shareholders as a result of a breach of the
VCT Regulations; and
-- loss of VCT status and reputational damage as a result of
serious breach of other regulations such as the UKLA Listing Rules
and the Companies Act 2006.
Legislative and Regulatory Risk
In order to maintain its approval as a VCT, the Company is
required to comply with current VCT legislation in the UK as well
as the European Commission's (EC) state aid rules. Changes in the
future to UK legislation or the EC state aid rules could have an
adverse impact on Shareholder investment returns whilst maintaining
the Company's VCT status. The Board and the Manager continue to
make representations where appropriate, either directly or through
relevant industry bodies such as the Association of Investment
Companies (AIC) or the British Venture Capital Association
(BVCA).
Statement of Compliance with Investment Policy
The Company is adhering to its stated investment policy and
managing the risks arising from it. This can be seen in various
tables and charts throughout the Annual Report, and from
information provided in the Chairman's Statement and the Investment
Manager's Review. A review of the Company's business, its position
as at 31 December 2013 and its performance during the year then
ended is included in the Chairman's Statement, which also includes
an overview of its strategy and business model.
The management of the investment portfolio has been delegated to
Maven, which also provides company secretarial, administrative and
financial management services to the Company. The Board is
satisfied with the depth and breadth of the Manager's resources and
its network of offices, which supply new deals and enable it to
monitor the geographically widespread portfolio of companies
effectively.
The Investment Portfolio Summary discloses the investments in
the portfolio and the degree of co-investment with other clients of
the Manager. The tabular analysis of the unlisted and quoted
portfolio by industrial sector and deal type shows that the
portfolio is diversified across a variety of sectors and deal
types. The level of qualifying investments is monitored by the
Manager on a daily basis and reported to the Board quarterly.
Key Performance Indicators
At each Board Meeting, the Directors consider a number of
financial performance measures to assess the Company's success in
achieving its objectives and these also enable Shareholders and
investors to gain an understanding of its business. The key
performance indicators are as follows:
-- NAV total return;
-- dividends per share;
-- investment income; and
-- operational expenses.
The NAV total return is a measure of Shareholder value that
includes both the current NAV per share and the sum of dividends
paid to date. The dividends per share measure shows how much of
that Shareholder value has been returned to original investors in
the form of dividends. A historical record of these measures is
shown in the Financial Highlights. The change in the profile of the
portfolio is reflected in the Summary of Investment Changes. The
Board reviews the Company's operational expenses on a quarterly
basis.
There is no meaningful venture capital trust index against which
to compare the financial performance of the Company, but, for
reporting to the Board and Shareholders, the Manager uses
comparisons with appropriate indices and the Company's peer group.
The Directors also consider non-financial performance measures such
as the flow of investment proposals and ranking of the VCT sector
by independent analysts.
As mentioned below the Company has no direct employee or
environmental responsibilities but the Directors will consider
economic, regulatory and political trends and features that may
impact on the Company's future development and performance.
Valuation Process
Investments held by Maven Income and Growth VCT 4 PLC in
unquoted companies are valued in accordance with the International
Private Equity and Venture Capital Valuation Guidelines.
Investments quoted or traded on a recognised stock exchange,
including AIM, are valued at their bid prices.
Share Buy-backs
The Board will seek the necessary Shareholder authority to
continue the share buy-back programme under appropriate
circumstances.
Employee, Environmental and Human Rights Policy
As a venture capital trust, the Company has no direct employee
or environmental responsibilities, nor is it responsible for the
emission of greenhouse gases. Its principal responsibility to
Shareholders is to ensure that the investment portfolio is properly
managed and invested. The Company has no employees and,
accordingly, has no requirement to report separately on employment
matters. The management of the portfolio is undertaken by the
Manager through members of its portfolio management team. The
Manager engages with the Company's underlying investee companies in
relation to their corporate governance practices and in developing
their policies on social, community and environmental matters and
further information may be found in the Statement of Corporate
Governance. In light of the nature of the Company's business, there
are no relevant human rights issues and, therefore, the Company
does not have a human rights policy.
Future Strategy
The Board and Manager intend to maintain the strategic policies
set out above for the year ending 31 December 2014 as it is
believed that these are in the best interests of Shareholders.
Ian Cormack
Chairman
9 April 2014
Maven Income and Growth VCT 4 PLC
Income Statement
For the Year Ended 31 December 2013
Ordinary Shares C Ordinary Shares TOTAL
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
Gains/(losses)
on investments 8 - 1,808 1,808 - (120) (120) - 1,688 1,688
Income
from
investments 2 1,041 - 1,041 18 - 18 1,059 - 1,059
Investment
management
fees 3 (188) (753) (941) (20) (84) (104) (208) (837) (1,045)
Other
expenses 4 (358) - (358) (37) - (37) (395) - (395)
---------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
Net Return
on ordinary
activities
before
taxation 495 1,055 1,550 (39) (204) (243) 456 851 1,307
Tax on
ordinary
activities 5 (95) 95 - - - - (95) 95 -
---------------- ------ --------------- --------------- ---------------
Return
attributable
to Equity
Shareholders 400 1,150 1,550 (39) (204) (243) 361 946 1,307
---------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
Earnings
per share
(pence) 1.8 5.3 7.1 (1.0) (5.2) (6.2) 0.8 0.1 0.9
---------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
A Statement of Total Recognised Gains and Losses has not been
prepared, as all gains and losses are recognised in the Income
Statement.
All items in the above statement are derived from continuing
operations. The Company has only one class of business and derives
its income from investments made in shares, securities and bank
deposits. The total column of this statement is the Profit and Loss
Account of the Company.
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 December 2013
Ordinary C Ordinary S Ordinary
Shares Shares Shares TOTAL
GBP'000 GBP'000 GBP'000 GBP'000
Opening Shareholders'
funds 8,990 - 5,877 14,867
S Ordinary share consolidation
to Ordinary 5,877 - (5,877) -
Net return for year 1,550 (243) - 1,307
Issue of new Ordinary
shares 6,272 - - 6,272
Issue of new C Ordinary
shares - 3,969 - 3,969
Net proceeds of share
issue 4,169 - - 4,169
Merger costs (29) - - (29)
Repurchase and cancellation
of shares (621) (95) - (716)
Dividends paid - revenue (423) - - (423)
Dividends paid - capital (445) - - (445)
Closing Shareholders'
funds 25,340 3,631 - 28,971
----------------------------------- --------------- --------------- --------------- --------------
Income Statement
For the year ended 31 December 2012
S Ordinary
Ordinary Shares Shares TOTAL
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
Gains on
investments 8 - 410 410 - 461 461 - 871 871
Income from
investments 2 460 - 460 318 - 318 778 - 778
Investment
management
fees 3 (61) (241) (302) (21) (87) (108) (82) (328) (410)
Other
expenses 4 (160) - (160) (99) - (99) (259) - (259)
-------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
Net Return
on ordinary
activities
before
taxation 239 169 408 198 374 572 437 543 980
Tax on
ordinary
activities 5 (50) 50 - (21) 17 (4) (71) 67 (4)
-------------- ------ --------------- --------------- ---------------
Return
attributable
to Equity
Shareholders 189 219 408 177 391 568 366 610 976
-------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
Earnings per
share
(pence) 2.1 2.4 4.5 3.4 7.5 10.9 5.5 9.9 15.4
-------------- ------ --------------- --------------- -------------- --------------- --------------- -------------- --------------- --------------- --------------
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 31 December 2012
Ordinary Shares S Ordinary Shares TOTAL
GBP'000 GBP'000 GBP'000
Opening Shareholders' funds 8,231 5,058 13,289
Net return for year 408 568 976
Net proceeds of share issue 740 436 1,176
Repurchase and cancellation of shares - (25) (25)
Dividends paid - revenue (124) (108) (232)
Dividends paid - capital (265) (52) (317)
Closing Shareholders' funds 8,990 5,877 14,867
---------------------------------------- ---------------- ------------------ -------------
Maven Income and Growth VCT 4 PLC
Balance Sheet
As at 31 December 2013
31 December 31 December
2013 2012
Ordinary C Ordinary Ordinary S Ordinary
Shares Shares Total Shares Shares Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
Fixed assets
Investments
at fair value
through profit
or loss 8 24,185 3,133 27,318 8,027 5,223 13,250
Current assets
Debtors 10 467 214 681 234 131 365
Cash and
overnight
deposits 963 291 1,254 785 547 1,332
---------------- --- ---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
1,430 505 1,935 1,019 678 1,697
Creditors:
Amounts falling
due within one
year 11 (275) (7) (282) (56) (24) (80)
---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
Net current
assets 1,155 498 1,653 963 654 1,617
---------------- --- ---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
Total net
assets 25,340 3,631 28,971 8,990 5,877 14,867
---------------- --- ---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
Capital and
reserves
Called up share
capital 12 2,569 386 2,955 916 526 1,442
Share premium
account 13 10,350 3,572 13,922 663 393 1,056
Capital reserve
- realised 13 (123) (281) (404) 375 322 697
Capital reserve
- unrealised 13 1,325 77 1,402 (511) 311 (200)
Distributable
reserve 13 10,591 (95) 10,496 7,168 4,124 11,292
Capital
redemption
reserve 13 119 11 130 37 11 48
Revenue reserve 13 509 (39) 470 342 190 532
Net assets
attributable
to Ordinary
Shareholders 25,340 3,631 28,971 8,990 5,877 14,867
---------------- --- ---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
Net asset value
per ordinary
share (pence) 14 98.6 94.0 98.2 111.6
---------------- --- ---------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------
Maven Income and Growth VCT 4 PLC
Cash Flow Statement
For the year ended 31 December 2013
Year ended 31 Year ended 31
December 2013 December 2012
Ordinary C Ordinary Ordinary S Ordinary
Shares Shares Total Shares Shares Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Operating activities
Investment income
received 946 3 949 472 316 788
Deposit interest
received - - - - - -
Investment management
fees paid (744) (104) (848) (345) (114) (459)
Secretarial fees
paid (80) (11) (91) (56) (35) (91)
Directors fees
paid (68) (10) (78) (41) (25) (66)
Other cash payments (215) (208) (423) (62) (38) (100)
---------------------- --- ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Net cash
(outflow)/inflow
from operating
activities 15 (161) (330) (491) (32) 104 72
Taxation
Corporation tax (4) - (4) - - -
---------------------- --- ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Financial investment
Purchase of
investments (22,367) (1,407) (23,774) (4,380) (3,225) (7,605)
Sale of investments 17,797 1,459 19,256 4,447 3,061 7,508
---------------------- --- ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Net cash
(outflow)/inflow
from financial
investment (4,570) 52 (4,518) 67 (164) (97)
Equity dividends
paid (868) - (868) (389) (160) (549)
---------------------- --- ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Net cash outflow
before financing (5,603) (278) (5,881) (354) (220) (574)
Financing
Issue of Ordinary
Shares 4,169 - 4,169 740 436 1,176
Net cash balance
acquired from
merger 1,686 664 2,350 - - -
Repurchase of
Ordinary Shares (621) (95) (716) - (25) (25)
Net cash inflow
from financing 5,234 569 5,803 740 411 1,151
---------------------- --- ---------------------- ---------------------- ---------------------- ----------------------
(Decrease)/increase
in cash 16 (369) 291 (78) 386 191 577
---------------------- --- ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Notes
Accounting Policies - UK Generally Accepted Accounting
Practice
(a) Basis of Preparation
The Financial Statements have been prepared under the historical
cost convention modified to include the revaluation of investments
and in accordance with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies' and Venture
Capital Trusts (the SORP) issued in January 2009. The disclosures
on Going Concern in the Directors' Report form part of these
financial statements.
(b) Income
Dividends receivable on equity shares and unit trusts are
treated as revenue for the period on an ex-dividend basis. Where no
ex-dividend date is available dividends receivable on or before the
year end are treated as revenue for the period. Provision is made
for any dividends not expected to be received. The fixed returns on
debt securities and non-equity shares are recognised on a time
apportionment basis so as to reflect the effective interest rate on
the debt securities and shares. Provision is made for any income
not expected to be received. Interest receivable from cash and
short term deposits and interest payable are accrued to the end of
the year.
(c) Expenses
All expenses are accounted for on an accruals basis and charged
to the income statement. Expenses are charged through the revenue
account except as follows:
-- expenses which are incidental to the acquisition and disposal
of an investment are charged to capital.
-- expenses are charged to realised capital reserves where a
connection with the maintenance or enhancement of the value of the
investments can be demonstrated. In this respect the investment
management fee has been allocated 20% to revenue and 80% to
realised capital reserves to reflect the Company's investment
policy and prospective income and capital growth.
-- share issue costs are charged to the share premium account: and
-- expenses are allocated between the original pool or the C
share pool depending on the nature of the expense.
(d) Taxation
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the balance
sheet date, where transactions or events that result in an
obligation to pay more tax in the future or right to pay less tax
in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is
considered more likely than not that there will be suitable profits
from which the future reversal of the underlying timing differences
can be deducted. Timing differences are differences arising between
the Company's taxable profits and its results as stated in the
Financial Statements which are capable of reversal in one or more
subsequent periods.
Deferred tax is measured on a non-discounted basis at the tax
rates that are expected to apply in the periods in which timing
differences are expected to reverse, based on tax rates and laws
enacted or substantively enacted at the balance sheet date.
The tax effect of different items of income/gain and
expenditure/loss is allocated between capital reserves and revenue
account on the same basis as the particular item to which it
relates using the Company's effective rate of tax for the
period.
UK Corporation tax is provided at amounts expected to be
paid/recovered using the tax rates and laws that have been enacted
or substantively enacted at the balance sheet date.
(e) Investments
In valuing unlisted investments the Directors follow the
criteria set out below. These procedures comply with the revised
International Private Equity and Venture Capital Valuation
Guidelines for the valuation of private equity and venture capital
investments. Investments are recognised at their trade date and are
designated by the Directors as fair value through profit or loss.
At subsequent reporting dates, investments are valued at fair
value, which represent the Directors' view of the amount for which
an asset could be exchanged between knowledgeable willing parties
in an arm's length transaction. This does not assume that the
underlying business is saleable at the reporting date or that its
current shareholders have an intention to sell their holding in the
near future.
A financial asset or liability is generally derecognised when
the contract that gives rise to it is settled, sold, cancelled or
expires.
1. For investments completed within the 12 months prior to the
reporting date and those at an early stage in their development,
fair value is determined using the Price of Recent Investment
Method, except that adjustments are made when there has been a
material change in the
trading circumstances of the company or a substantial movement
in the relevant sector of the stock market.
2. Whenever practical, recent investments will be valued by
reference to a material arm's length transaction or a quoted
price.
3. Mature companies are valued by applying a multiple to their
fully taxed prospective earnings to determine the enterprise value
of the company.
3.1 To obtain a valuation of the total ordinary share capital
held by management and the institutional investors, the value of
third party debt, institutional loan stock, debentures and
preference share capital is deducted from the enterprise value. The
effect of any performance related mechanisms is taken into account
when determining the value of the ordinary share capital.
3.2 Preference shares, debentures and loan stock are valued
using the Price of Recent Investment Method. When a redemption
premium has accrued, this will only be valued if there is a
reasonable prospect of it being paid. Preference shares which carry
a right to convert into ordinary share capital are valued at the
higher of the Price of Recent Investment Method basis and the
price/earnings basis, both described above.
4. Where there is evidence of impairment, a provision may be
taken against the previous valuation of the investment.
5. In the absence of evidence of a deterioration, or strong
defensible evidence of an increase in value, the fair value is
determined to be that reported at the previous balance sheet
date.
6. All unlisted investments are valued individually by the
Portfolio Management Team of Maven Capital Partners UK LLP. The
resultant valuations are subject to detailed scrutiny and approval
by the Directors of the Company.
7. In accordance with normal market practice, investments listed
on the Alternative Investment Market or a recognised stock exchange
are valued at their bid market price.
(f) Fair Value Measurement
Fair value is defined as the price that the Company would
receive upon selling an investment in a timely transaction to an
independent buyer in the principal or the most advantageous market
of the investment. A three-tier hierarchy has been established to
maximise the use of observable market data and minimise the use of
unobservable inputs and to establish classification of fair value
measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market
participants would use in pricing the asset or liability,
including assumptions about risk, for example, the risk inherent in
a particular valuation technique used to measure fair value
including such a pricing model and/or the risk inherent in the
inputs to the valuation technique. Inputs may be observable or
unobservable.
Observable inputs are inputs that reflect the assumptions market
participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the
reporting entity.
Unobservable inputs are inputs that reflect the reporting
entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on best
information available in the circumstances.
The three-tier hierarchy of inputs is summarised in the three
broad levels listed below.
-- Level 1 - quoted prices in active markets for identical investments.
-- Level 2 - other significant observable inputs (including
quoted prices for similar investments, interest rates, credit risk
etc).
-- Level 3 - significant unobservable inputs (including the
Company's own assumptions in determining the fair value of
investments).
(g) Gains and losses on investments
When the company sells or revalues its investments during the
year, any gains or losses arising are credited/charged the year,
any gains or losses arising are credited/charged to the Income
Statement.
Reserves
Share Capital Capital Capital
premium reserve reserve Distributable redemption Revenue
account realised unrealised reserve reserve reserve
Ordinary
Shares GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2013 -
Ordinary 663 375 (511) 7,168 37 342
At 1 January
2013 - S
Ordinary 393 322 311 4,124 11 190
--------------- ----------------------- ----------------------- --------------------- ------------------------ ---------------------- ---------------------
1,056 697 (200) 11,292 48 532
Gains on sales
of investments - 283 - - - -
Net increase
in value of
investments - - 1,525 - - -
Investment
management
fees - (753) - - - -
Dividends paid - (445) - - - (423)
Tax effect of
capital items - 95 - - - -
Share Issue
- 5 April 2013 3,196 - - - - -
Share Issue
- 30 April
2013 543 - - - - -
Share Issue
- 2014 (2) - - - - -
Merger - issue
of ordinary
shares 5,773 - - - - -
Merger - S
share
consolidation - - - (80) - -
Merger costs (216) - - - - -
Repurchase and
cancellation
of shares - - - (621) 71 -
Net return on
ordinary
activities
after
taxation - - - - - 400
At 31 December
2013 10,350 (123) 1,325 10,591 119 509
--------------- ----------------------- ----------------------- --------------------- ------------------------ ---------------------- ---------------------
C Ordinary
Shares
At 1 January
2013 - - - - - -
Losses on
sales
of
investments - (197) - - - -
Net increase
in value of
investments - - 77 - - -
Investment
management
fees - (84) - - - -
Issue of C
ordinary
shares 3,572 - - - - -
Dividends
paid - - - - - -
Tax effect of
capital items - - - - - -
Repurchase
and
cancellation
of shares - - - (95) 11 -
Net return on
ordinary
activities
after
taxation - - - - - (39)
At 31
December
2013 3,572 (281) 77 (95) 11 (39)
-------------- ----------------------- ---------------------- --------------------- ------------------------ ---------------------- ---------------------
Total
Reserves 13,922 (404) 1,402 10,496 130 470
-------------- ----------------------- ---------------------- --------------------- ------------------------ ---------------------- ---------------------
Return per Ordinary Share
Year ended Year ended
31 December 2013 31 December 2012
The returns per
share have been
based on the following Ordinary C Ordinary Ordinary S Ordinary
figures: Shares Shares Total Shares Shares Total
Weighted average
number of ordinary
shares 21,811,660 3,894,337 25,705,997 8,999,464 5,184,732 14,184,196
Revenue return GBP400,000 (GBP39,000) GBP361,000 GBP189,000 GBP177,000 GBP366,000
Capital return GBP1,150,000 (GBP204,000) GBP946,000 GBP219,000 GBP391,000 GBP610,000
Total Return GBP1,550,000 (GBP243,000) GBP1,307,000 GBP408,000 GBP568,000 GBP976,000
------------------------- -------------- --------------- ------------- ----------- --------------- -----------
Net asset value per Ordinary Share
The net asset value per share and the net
asset value attributable to the Ordinary
Shares at the year end calculated in accordance
with the Articles of Association were as
follows:
31 December 2013 31 December 2012
C Ordinary S Ordinary
Ordinary Shares Shares Ordinary Shares Shares
Net Net Net Net Net Net Net Net
asset asset asset asset asset asset asset asset
value value value value
per value per value per value per value
share attributable share attributable share attributable share attributable
p GBP'000 p GBP'000 p GBP'000 p GBP'000
Ordinary
Shares 98.6 25,340 94.0 3,631 98.2 8,990 111.6 5,877
---------- -------------------- -------------- ------- -------------- ------------------- ------------------ -------------- ------------------
Basis of preparation of the Financial Statements
The Financial Statements included in this Announcement have been
prepared on the same basis as the Annual Report and Financial
Statements for the year ended 31 December 2012. The Annual Report
and Financial Statements for the year ended 31 December 2013 will
be filed with the Registrar of Companies and issued to Shareholders
in due course.
The financial information contained within this Announcement
does not constitute the Company's statutory Financial Statements as
defined in the Companies Act 2006. The statutory Financial
Statements for the year ended 31 December 2012 have been delivered
to the Registrar of Companies and contained an audit report which
was unqualified and did not constitute statements under S498(2) or
S498(3) of the Companies Act 2006.
Directors' Responsibility Statement
Each Director confirms, to the best of his knowledge, that:
-- the Financial Statements have been prepared in accordance
with the applicable accounting standards and give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company as at 31 December 2013 and for the year to that
date;
-- the Directors' Report includes a fair review of the
development and performance of the Company, together with a
description of the principal risks and uncertainties that it faces;
and
-- the Annual Report and Financial Statements taken as a whole
are fair, balanced and understandable and provide the information
necessary to assess the Company's performance, business model and
strategy.
Other information
The Annual General Meeting will be held on 14 May 2014,
commencing at 10.30 am, at 1-2 Royal Exchange Buildings, London
EC3V 3LF.
Copies of this announcement, and of the Annual Report and
Financial Statements for the year ended 31 December 2013, will be
available to the public at the office of Maven Capital Partners UK
LLP, 205 West George Street, Glasgow G2 2LW (the registered
office); at the office of the Company, 1-2 Royal Exchange
Buildings, London EC3V 3LF and on the Company's website at
www.mavencp.com/migvct4.
Neither the content of the Company's website nor the contents of
any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into, or forms part of, this
announcement.
The Annual Report and the Circular have been submitted to the
National Storage Mechanism and will be available for inspection at:
www.Hemscott.com/nsm.do
By Order of the Board
Maven Capital Partners UK LLP
Secretary
9 April 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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