TIDMMAV4 TIDMTTM
RNS Number : 0367W
Maven Income & Growth VCT 4 PLC
13 April 2023
Maven Income and Growth VCT 4 PLC
Final results for the year ended 31 December 2022
The Directors report the Company's financial results for the
year ended 31 December 2022
Highlights for the year
-- NAV total return at the year end of 155.90p per share (2021: 157.48p)
-- NAV at the year end of 68.30p per share (2021: 74.88p), after
total dividend payments of 5.00p per share during the year
-- Interim dividend of 2.00p per share paid in October 2022
-- Final dividend of 1.75p per share proposed for payment in May 2023
-- GBP16 million of capital raised for the 2021/22 and 2022/23 tax years
-- New Offer for Subscription launched to raise up to GBP10
million (including an over-allotment facility for up to GBP5
million) alongside Offers by the other Maven VCTs
Chairman's Statement
On behalf of your Board, I am pleased to present the Annual
Report for the first time as Chairman. Whilst the financial year
has been a challenging period, dominated by geopolitical
instability and an uncertain macroeconomic outlook, it is
encouraging to report on the creditable performance that has been
achieved by your Company. There has been meaningful progress across
the unlisted portfolio, where an increasing number of companies
have reported revenue growth and achieved commercial milestones
which, in certain cases, has resulted in uplifts to valuations.
This positive progress has, however, been offset by the weaker
performance of AIM, where the value of your Company's portfolio,
has been impacted by the volatility within financial markets that
has persisted throughout the year. Notwithstanding the wider market
conditions, in May 2022 there was a notable development when AIM
quoted Ideagen received an all cash offer at a 52% premium to the
underlying share price, with the exit generating a total return of
9.0x cost over the holding period. In addition, there has been a
good level of realisation activity within the private company
portfolio, with the completion of five profitable exits. Further to
these realisations, and consistent with the commitment to make
regular Shareholder distributions, the Directors are proposing a
final dividend of 1.75p per share, which has enabled your Company
to achieve its annual distribution target.
Overview
Throughout the financial year, the economic backdrop has
remained uncertain. Whilst the impact of the COVID-19 pandemic
significantly reduced during the early part of the year, the
anticipated economic recovery was short lived as attention was
swiftly diverted to Eastern Europe, following the invasion of
Ukraine by Russia. The war has had wide reaching economic
consequences, including acting as the catalyst to the sharp rise in
global energy prices and the widespread disruption to international
supply chains. In the UK, the energy price shock contributed to the
current high level of inflation and the cost of living crisis
which, alongside rising interest rates, created a challenging
situation for many consumers and businesses during 2022.
It is, however, encouraging to report on the resilient
performance that has been achieved by your Company during the
financial year. This reflects the consistent application of the
investment strategy, which has been in place for a number of years
and has the core objective of building a large and sectorally
diversified portfolio of high growth private and AIM quoted
companies that operate across a broad range of end user markets,
and which are capable of achieving scale and generating a capital
gain on exit. During the year, the Manager continued to see good
levels of demand for growth capital from ambitious and
entrepreneurial private companies, and completed 11 new
investments, with follow-on funding also provided to support those
companies that are achieving commercial targets and require
additional capital to fully scale prior to securing an exit. The
Board believes that Maven remains well placed to continue to source
and execute high quality VCT qualifying investments, to ensure that
your Company maintains a good rate of investment in the new
financial year.
Following the success of the 2021/22 fundraising, which closed
in May 2022 having raised GBP16 million, the Directors were pleased
to launch a new Offer for Subscription for the 2022/23 and 2023/24
tax years alongside Offers by the other Maven managed VCTs. As part
of the Offers, your Company has an initial target raise of GBP5
million, with the ability to utilise an over-allotment facility of
up to a further GBP5 million which, as announced on 16 February
2023, the Directors resolved to utilise. It is encouraging to
report that, at the time of writing, GBP6.4 million has been raised
by your Company. The Directors would like to remind Shareholders
that the Offers will remain open until 26 May 2023 for the 2023/24
tax year, unless fully subscribed ahead of this date. Further
information about the Offers can be found at: mavencp.com/vctoffer.
With respect to future fund raising, the Board and the Manager
welcomed the announcement by the UK Government in September 2022
that tax relief for VCT and EIS schemes would continue beyond 2025.
The news that the period covered by the "sunset clause" will be
extended, removes uncertainty for investors and allows
entrepreneurial SMEs to continue to access this important source of
growth capital.
Notwithstanding the challenging economic backdrop, during the
year there has been further positive progress across the early
stage unlisted portfolio, with the majority of companies continuing
to deliver growth and achieve their strategic objectives which, in
certain cases, has resulted in valuation uplifts. Your Company also
benefits from a portfolio of later stage private companies,
completed prior to the change in VCT rules, and these more mature
holdings help to counterbalance the higher risk associated with
earlier stage growth companies. This generally good performance
has, however, been offset by the volatility that has affected
financial markets during the year, and which has impacted the value
of your Company's AIM quoted portfolio where share prices have
declined in response to negative investor sentiment. There has also
been limited IPO and new share issuance activity across AIM and,
whilst the Manager has reviewed various opportunities, they have
not been of sufficient quality to warrant participation. Whilst
your Board continues to believe that a hybrid private equity and
AIM quoted portfolio provides the optimal approach to deliver long
term growth in Shareholder value, the Manager will remain cautious
on any new AIM investments until there is clear evidence of a
market recovery and an improvement in the quality and range of
companies seeking VCT investment.
The commitment to make regular tax free distributions remains a
priority and, as Shareholders will be aware, achieving portfolio
realisations is central to this objective. It is, therefore,
encouraging to report that during the period five profitable
private company exits were completed, alongside the realisation of
your Company's holding in AIM quoted Ideagen, which received an all
cash offer at a 52% premium to the underlying share price. This
exit generated almost GBP1.6 million in cash proceeds and a total
return of 9.0x cost over the life of the investment. Whilst the
timing of exits is hard to predict, particularly in the current
environment, the Directors remain optimistic that further
profitable exits can be achieved in the year ahead.
Shareholders will find full details of the developments across
the portfolio in the Investment Manager's Review in the Annual
Report. This includes details on the new investments and
realisations that have been completed, as well as updates on the
companies that have delivered a positive performance, alongside the
small number of cases where valuations have been reduced or fully
written down. In addition, details of the principal Key Performance
Indicators (KPIs) can be found in the Business Report and a summary
of the Alternative Performance Measures (APMs) can be found in the
Financial Highlights in the Annual Report.
Dividend Policy
As Shareholders will be aware from recent Interim and Annual
Reports, decisions on distributions take into consideration several
factors, including the realisation of capital gains, the adequacy
of distributable reserves, the availability of surplus revenue and
the VCT qualifying level, all of which are kept under close and
regular review.
The Board and the Manager recognise the importance of tax free
distributions to Shareholders and, subject to the considerations
outlined above, will seek, as a guide, to pay an annual dividend
that represents 5% of the NAV per share at the immediately
preceding year end.
The Directors would like to remind Shareholders that, as the
portfolio continues to expand and a greater proportion of holdings
are in younger companies, potentially increasing volatility, the
timing of distributions will be closely linked to realisation
activity, whilst also reflecting the Company's requirement to
maintain its VCT qualifying level. If larger distributions are
required as a consequence of significant exits, this may result in
a corresponding reduction in the NAV per share of the Company.
However, your Board considers this to be a tax efficient means of
returning value to Shareholders, whilst ensuring ongoing compliance
with the VCT legislation.
Proposed Final Dividend
Your Board is pleased to propose that a final dividend of 1.75p
per Ordinary Share, in respect of the year ended 31 December 2022,
will be paid on 23 May 2023 to Shareholders on the register at 21
April 2023. This will bring total distributions for the financial
year to 3.75p per Ordinary Share, representing a yield of 5.01%
based on the NAV at the immediately preceding year end of 74.88p
per share. Since the Company's launch, and after receipt of the
proposed final dividend, Shareholders will have received a total of
89.35p per share in tax free distributions.
Dividend Investment Scheme (DIS)
Your Company operates a DIS, through which Shareholders can, at
any time, elect to have their dividend payments utilised to
subscribe for new Ordinary Shares issued by the Company under the
standing authority requested from Shareholders at Annual General
Meetings. Shares issued under the DIS should qualify for VCT tax
relief applicable for the tax year in which they are allotted,
subject to an individual Shareholder's particular
circumstances.
Shareholders can elect to participate in the DIS in respect of
future dividends, by completing a DIS mandate. In order for the DIS
to apply to the final dividend that is due to be paid on 23 May
2023, the mandate form must be received by the Registrar (The City
Partnership) before 9 May 2023, this being the relevant dividend
election date. The mandate form, terms & conditions and full
details of the scheme (including tax considerations) are available
from the Company's website at: mavencp.com/migvct4. Election to
participate in the DIS can also be made through the Registrar's
online investor hub at: maven-cp.cityhub.uk.com/login.
If a Shareholder is in any doubt about the merits of
participating in the DIS, or their own tax status, they should seek
advice from a suitably qualified adviser.
Fund Raising and Allotment
As detailed in the 2022 Interim Report, on 20 September 2021,
your Company launched joint Offers for Subscription for new
Ordinary Shares, alongside Maven Income and Growth VCT 3 PLC, to
raise up to GBP20 million in aggregate (GBP10 million for each
company) with combined over-allotment facilities of up to GBP20
million (GBP10 million for each company). Your Company's Offer
closed on 27 May 2022, having raised a total of GBP16 million for
the 2021/22 and 2022/23 tax years.
With respect to the 2021/22 tax year, there were three
allotments of new Ordinary Shares. An allotment of 11,772,141 new
Ordinary Shares completed on 4 February 2022, with a further
allotment of 3,334,456 new Ordinary Shares on 23 March 2022 and a
final allotment of 4,184,073 new Ordinary Shares on 5 April 2022.
An allotment of 2,282,396 new Ordinary Shares for the 2022/23 tax
year completed on 6 June 2022.
Current Offers for Subscription
On 7 October 2022, alongside Maven Income and Growth VCT PLC,
Maven Income and Growth VCT 3 PLC and Maven Income and Growth VCT 5
PLC, your Company launched Offers for Subscription for up to GBP40
million in aggregate, inclusive of over-allotment facilities for up
to GBP10 million in aggregate, for the 2022/23 and 2023/24 tax
years. Your Company has an initial target raise of GBP5 million,
with an over-allotment facility of up to a further GBP5 million
which, further to the announcement of 16 February 2023 the
Directors have resolved to utilise. As at the date of the Annual
Report, your Company has raised a total of GBP6.4 million.
With respect to the 2022/23 tax year, an allotment of 5,035,459
new Ordinary Shares completed on 8 February 2023, with a further
allotment of 495,482 new Ordinary Shares completing on 3 March
2023. A final allotment of 2,639,725 new Ordinary Shares for the
2022/23 tax year completed on 5 April 2023. The Offers will close
on 26 May 2023, unless a particular Offer is fully subscribed ahead
of this date, and an allotment for the 2023/24 tax year will take
place after the Offers have closed.
Further details regarding the new Ordinary Shares issued under
the Offers for Subscription can be found in Note 12 to the
Financial Statements in the Annual Report.
The Directors are confident that Maven's regional office network
has the capacity and capability to continue to source attractive
investment opportunities in VCT qualifying companies across a range
of sectors, and that the additional liquidity provided by the
fundraising will facilitate the further expansion and development
of the portfolio in line with the investment strategy. Furthermore,
the funds raised will allow your Company to maintain its share
buy-back policy, whilst also spreading costs over a wider asset
base with the objective of maintaining a competitive total expense
ratio for the benefit of all Shareholders.
Share Buy-backs
Shareholders will be aware that a primary objective of the Board
is to ensure that the Company retains sufficient liquidity for
making investments in line with its stated policy, and for the
continued payment of dividends. However, the Directors also
acknowledge the need to maintain an orderly market in the Company's
shares and have, therefore, delegated authority to the Manager for
the Company to buy back its own shares in the secondary market, for
cancellation or to be held in treasury, subject always to such
transactions being in the best interests of Shareholders.
It is intended that the Company should seek to maintain a share
price discount that is approximately 5% below the latest published
NAV per share, subject to market conditions, availability liquidity
and the maintenance of the Company's VCT qualifying status.
Shareholders should be aware that neither the Company nor the
Manager can execute a direct transaction in the Company's shares.
Any instruction to buy or sell shares on the secondary market must
be conducted through a stockbroker. If a Shareholder wishes to buy
or sell shares on the secondary market, they or their broker can
contact the Company's corporate broker, Shore Capital Stockbrokers
on 020 7647 8132, to discuss a transaction. It should, however, be
noted that such transactions cannot take place whilst the Company
is in a closed period, which is the time from the end of a
reporting period (quarter end, half year or full year) until the
announcement of the relevant results, or the release of an
unaudited NAV. A closed period may also be introduced if the
Directors and Manager are in possession of price sensitive
information that may restrict the Company's ability to buy back
shares.
VCT Regulatory Developments
During the period under review, there were no further amendments
to the rules governing VCTs. Shareholders may, however, be aware
that under the VCT scheme approved by the European Commission in
2015, a "sunset clause" was introduced, which stated that income
tax relief would no longer be available on subscriptions for new
shares in VCTs made on or after 6 April 2025 unless the legislation
was renewed by an HM Treasury order. During the financial year,
there has been a considerable level of activity by industry
participants, including The Association of Investment Companies
(AIC), of which the Company is a member, and the Venture Capital
Trust Association (VCTA), of which the Manager is an active member,
to demonstrate the important role of VCT investment in supporting
ambitious SMEs and stimulating economic growth and regional
employment. It is, therefore, encouraging to report that the UK
Government has committed to extend the income tax relief available
on new VCT shares beyond 2025, as confirmed by the Chancellor in
the Autumn 2022 budget statement, with this reaffirmed in the
recent Spring 2023 budget. The Manager will remain actively
involved in discussions regarding the process for implementing this
extension.
Consistent with industry best practice, the Board and the
Manager continue to apply the International Private Equity and
Venture Capital Valuation (IPEV) Guidelines as the central
methodology for all private company valuations. The IPEV Guidelines
are the prevailing framework for fair value information in the
private equity and venture capital industry. Following the invasion
of Ukraine in February 2022, IPEV reiterated the Special Guidance
provided in March 2020 at the outbreak of the COVID-19 pandemic in
the UK, with respect to assessing the fair value of private company
holdings. The Directors and the Manager continue to follow industry
guidelines and adhere to the IPEV Special Guidelines in all private
company valuations.
Environmental, Social and Governance (ESG) Considerations
The Board and the Manager acknowledge the importance of ESG
principles and consider that those portfolio companies that have
ESG aims integrated into their business model benefit both society
and Shareholders. The Board and the Manager believe that there is
an interconnectivity between profit and purpose, and that strong
ESG credentials can give companies a competitive edge.
The Board is pleased to report on the continued focus by the
Manager in developing its ESG framework and oversight capabilities.
In order to assist this process, Maven has partnered with a
specialist software provider to enhance its ability to track,
analyse and report key ESG information across the portfolio. The
Manager is in the process of standardising its internal metrics,
which will be measured from year to year with the intention of
reducing carbon footprint and improving key governance and social
metrics.
The Manager has a comprehensive ESG policy in place, which is
ingrained within the investment process as a standard part of due
diligence for any new investment. A number of investee companies
are already very focused on the environment or making improvements
to society and local communities and have set themselves specific
ESG related goals. Where this is not the case, the Manager is able
to support and advise on the value of improving these metrics and
all investee companies are required to include ESG as a standing
board agenda item to encourage regular dialogue on the topic.
In May 2021, the Manager became a signatory to the
internationally recognised Principles for Responsible Investment,
demonstrating its commitment to include ESG as an integral part of
its investment decision making and ownership. The Manager has also
become a signatory to the Investing in Women Code, which aims to
improve female entrepreneurs' access to tools, resources and
finance, supporting diversity and inclusion in access to
finance.
Although neither the Company nor the Manager are currently
required to disclose climate related financial information in line
with the Task Force on Climate-related Financial Disclosures
(TCFD), they recognise the aim and importance of the TCFD
recommendations to provide a foundation to improve investors'
ability to appropriately assess climate-related risks and
opportunities. Disclosing information against the TCFD
recommendations remains an objective of the Manager as part of its
ESG initiatives, and progress will be monitored by the
Directors.
The Board is aware of the significant steps that are being taken
by the Manager to assess ESG capability and support ongoing
dialogue with investee companies, with the aim of improving ESG
metrics over the period that your Company is invested. However, the
Board wishes to remind Shareholders that your Company's investment
policy does not incorporate specific ESG aims, and investee
companies are not required to meet any specific targets.
Shareholder Communications
Twice a year Maven publishes a VCT newsletter, Creating Value,
which is issued by email or post, and includes details of the new
investments and realisations that have been completed by the Maven
VCTs, as well as updates about the VCT portfolios and investee
companies, and the launch of new Maven VCT Offers. Shareholders
wishing to receive this newsletter, and other VCT related
information, can register their email address with the Registrar,
The City Partnership, or subscribe through Maven's website.
Appointment of a New Auditor
Following a formal tender process, Johnston Carmichael LLP
(Johnston Carmichael) was appointed as the new Auditor to the
Company with effect from 4 October 2022. Johnston Carmichael
conducted the audit of the Financial Statements for the financial
year to 31 December 2022 and the Independent Auditor's Report can
be found in the Annual Report. Shareholders will be asked to
confirm the appointment of Johnston Carmichael at the forthcoming
AGM.
Constitution of the Board
As noted in the 2022 Interim Report, it was with deep regret
that, on 24 June 2022, the Board announced the passing of the then
Chairman Peter Linthwaite, following a prolonged illness. Peter
became a Director of your Company following its merger with Maven
Income and Growth VCT 2 PLC in November 2018 and served as Chairman
from May 2019. During his tenure, Peter made a significant
contribution to the growth and strategic development of your
Company, helping to grow its net asset value to over GBP85 million.
The Board and the Manager wish to record their gratitude for the
considerable contribution that Peter made to the Company during his
period in office.
On 14 July 2022, the Board confirmed the appointment of Brian
Colquhoun as an Independent Non-executive Director with effect from
1 August 2022. Brian is a Fellow of the Chartered Institute of
Bankers in Scotland and spent more than three decades at Clydesdale
and Yorkshire Bank, working extensively with smaller companies and
management teams in supporting their growth ambitions. Brian's
biography can be found in the Your Board section of the Annual
Report. Brian chairs the Company's Risk Committee and serves on the
Audit, Management Engagement and Nomination Committees. Brian will
stand for election by Shareholders at the 2023 Annual General
Meeting.
Annual General Meeting (AGM)
The 2023 AGM will be held in the Glasgow office of Maven Capital
Partners UK LLP at Kintyre House, 205 West George Street, Glasgow,
G2 2LW on 11 May 2023, commencing at 11.30am. The Notice of AGM can
be found in the Annual Report.
The Future
With an improving domestic economic outlook, the Directors
believe that your Company is well positioned to deliver growth in
the year ahead in line with the long term investment objective.
During 2022, the large and sectorally diversified private company
portfolio that has been constructed has proven its ability to make
positive progress and, whilst some companies are at a relatively
early stage of development, an increasing number are achieving
scale and demonstrating their ability to create significant
Shareholder value. Although the performance across AIM continues to
be muted, financial markets have historically displayed cyclical
patterns and it is likely that a recovery will commence once market
conditions stabilise and investor sentiment improves. In the year
ahead, the focus will be to further expand and diversify the
portfolio through the addition of high quality growth companies
whilst, where possible, progressing exit opportunities to ensure
that your Company can maintain a programme of regular tax free
Shareholder distributions.
Fraser Gray
Chairman
12 April 2023
Business Report
This Business Report is intended to provide an overview of the
strategy and business model of the Company, as well as the key
measures used by the Directors in overseeing its management. The
Company is a VCT and invests in accordance with the investment
objective set out below.
Investment Objective
Under an investment policy approved by the Directors, the
Company aims to achieve long-term capital appreciation and generate
income for Shareholders.
Business Model and Investment Policy
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/AQSE quoted companies that meet the criteria for
VCT qualifying investments and have strong growth potential;
-- investing no more than GBP1.25 million in any company in one
year and no more than 15% of the Company's assets by cost in one
business at any time; and
-- borrowing up to 15% of net asset value, if required and only
on a selective basis, in pursuit of its investment strategy.
Principal and Emerging Risks and Uncertainties
The Board and the Risk Committee have an ongoing process for
identifying, evaluating and monitoring the principal and emerging
risks and uncertainties facing the Company. The risk register and
dashboard form key parts of the Company's risk management framework
used to carry out a robust assessment of the risks, including a
significant focus on the controls in place to mitigate them. The
principal and emerging risks and uncertainties facing the Company
are considered to be as follows:
Investment Risk
The majority of the Company's investments are in small and
medium sized unquoted UK companies and AIM/ AQSE quoted companies
which, by their nature, carry a higher level of risk and lower
liquidity than investments in large quoted companies. The Board
aims to limit the risk attached to the investment portfolio as a
whole by ensuring that a robust and structured selection,
monitoring and realisation process is applied by Maven. 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 sectors;
-- actively and closely monitoring the progress of investee companies;
-- co-investing with other clients of Maven, other VCT managers
and/or other co-investment partners;
-- ensuring valuations of underlying investments are made fairly
and reasonably (see Notes to the Financial Statements 1(e), 1(f)
and 16 for further details);
-- taking steps to ensure that the share price discount is managed appropriately; and
-- choosing and appointing an FCA authorised investment manager
with the skills, experience and resources required to achieve the
investment objective, with ongoing monitoring to ensure the Manager
is performing in line with expectations.
Operational Risk
The Board is aware of the heightened cyber security risk and
potential consequences of IT failure, particularly in relation to
the increased utilisation of remote working practices by the
Manager and key third parties. A cyber attack or systems failure
not only has the potential to cause a third party to fail to
perform its duties and responsibilities in accordance with the
service level agreements that are in place, but could also result
in it encountering financial difficulties, such that it is unable
to carry on trading and cannot continue to provide services to the
Company. The Board has closely monitored the systems and controls
in place to prevent or mitigate against a systems or data security
failure, and the overall effectiveness of business continuity
arrangements of the Manager and third parties.
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 the consequent loss of tax reliefs
available to Shareholders as a result of a breach of the VCT
Regulations;
-- loss of VCT status and reputational damage as a result of a
serious breach of other regulations such as the FCA Listing Rules
and the Companies Act 2006; and
-- increased investment restrictions resulting from EU State Aid
Rules, incorporated by the Finance (No. 2) Act 2015 and the Finance
Act 2018.
The Board works closely with the Manager to ensure compliance
with all applicable and upcoming legislation, such that VCT
qualifying status is maintained. Further information on the
management of this risk is detailed under other headings in this
Business Report.
Legislative and Regulatory Risk
The Directors strive to maintain a good understanding of the
changing regulatory agenda and consider emerging issues so that
appropriate changes can be implemented and developed in good
time.
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 EU State Aid Rules. Changes to either legislation 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 AIC, the British
Private Equity & Venture Capital Association (BVCA) and the
VCTA.
The Company has retained Philip Hare & Associates LLP as its
principal VCT adviser and also uses the services of a number of
other VCT advisers on a transactional basis.
Breaches of other regulations including, but not limited to, the
Companies Act, the FCA Listing Rules, the FCA Disclosure Guidance
and Transparency Rules, the General Data Protection Regulation
(GDPR), and the Alternative Investment Fund Managers Directive
(AIFMD), could lead to a number of detrimental outcomes and
reputational damage. Breaches of controls by service providers to
the Company could also lead to reputational loss or damage.
The AIFMD, which regulates the management of alternative
investment funds, including VCTs, introduced an authorisation and
supervisory regime for all investment companies in the EU. The
Company is a small registered, internally managed alternative
investment fund under the AIFMD, and its status as such is
unchanged as a result of the UK's departure from the EU.
The Company is also required to comply with tax legislation
under the Foreign Account Tax Compliance Act and the Common
Reporting Standard. The Company has appointed City Partnership to
act on its behalf to report annually to HM Revenue & Customs
(HMRC) and ensure compliance with this legislation.
Climate Change and Social Responsibility Risk
The Board recognises that climate change is an important
emerging risk that all companies should take into consideration
within their strategic planning.
As referred to elsewhere in this Strategic Report and in the
Statement of Corporate Governance, the Company has little direct
impact on environmental issues. However, the Company has introduced
measures to reduce the cost and environmental impact of the
production and circulation of Shareholder documentation such as the
annual and interim reports. This has resulted in a significant
reduction in the number of copies being printed and posted, with
fewer than 6% of Shareholders now receiving paper reports.
The Board is aware that the Manager is increasing efforts in
relation to the identification of environmental risks and
opportunities, and is developing its ESG policy accordingly.
Environmental risk is a fundamental aspect of due diligence and
industry specialists are assigned where there may be specific
concerns in relation to a potential business or sector. The results
are then factored into the decision making process for new
investments.
VCTs in general are regarded as supporting SMEs, which helps to
create local employment opportunities across a range of UK
geographical regions.
Ukraine
The conflict in Ukraine and the global response has resulted in
disruptions to international supply chains, inflationary pressures
on prices and general market uncertainty. It is also acknowledged
that there is an increased cyber security risk and the Manager is
taking steps to mitigate this risk, including oversight of third
parties.
Other Key Risks
Governance Risk
The Directors are aware that an ineffective Board could have a
negative impact on the Company and its Shareholders. The Board
recognises the importance of effective leadership and board
composition and this is ensured by completing an annual evaluation
process, with action being taken if required.
Management Risk
The Directors are aware of the risk that investment
opportunities could fail to complete, or the management of the VCT
could breach the Management and Administration Deed or regulatory
parameters, due to lack of knowledge and/or experience of the
investment professionals acting on behalf of the Company. To manage
this risk, the Board has appointed Maven as investment manager, as
it employs skilled professionals with the required VCT knowledge
and experience. In addition, the Board takes comfort that the
Manager's controls have been updated to ensure compliance with the
FCA's Senior Managers and Certification Regime (SMCR).
The Directors are also mindful of the impact that the loss of
the Manager's key employees could have on both investment
opportunities that may be lost or existing investments that may
fail. The Board is reassured by the Manager's approach to
incentivising staff and ensuring that adequate notice periods are
included in all contracts of employment.
Financial and Liquidity Risk
As most of the investments require a medium to long- term
commitment and are relatively illiquid, the Company retains a
portion of the portfolio in cash and listed investment trusts in
order to finance any new or follow-on investment opportunities. The
Company has only limited direct exposure to currency risk and does
not enter into any derivative transactions.
Political Risk
Political changes that result in parties with extreme political
or social agendas having power or influence over policies could
lead to instability and uncertainty in the markets, legislation and
the economy.
The Board reviews the political situation regularly, together
with any associated changes to the economic, regulatory and
legislative environment, in order to ensure that any risks are
mitigated as effectively as possible.
Economic Risk
The valuation of investment companies may be affected by
underlying economic conditions such as rising interest rates and
the availability of bank finance, which can be impacted during
times of geopolitical uncertainty and fluctuating markets,
including the impact of the current cost of living crisis and
rising interest rates currently being experienced in the UK. The
economic and market environment is kept under constant review and
the investment strategy of the Company is adapted so far as
possible to mitigate emerging risks.
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.
An explanation of certain economic and financial risks and how
they are managed is contained in Note 16 to the Financial
Statements.
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 in the
Investment Manager's Review. A review of the Company's business,
its financial position as at 31 December 2022 and its performance
during the year then ended is included in the Chairman's Statement,
which also includes an overview of the Company's business model and
strategy.
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 breadth and depth of the Manager's resources and
its nationwide network of offices, which supply new deals and
enable it to monitor the geographically widespread portfolio of
companies effectively.
The Investment Portfolio Summary in the Annual Report discloses
the investments in the portfolio and the degree of co-investment
with other clients of the Manager. The Portfolio Analysis charts in
the Annual Report show the profile of the portfolio by industry
sector and asset class. They also show the sectoral diversity of
the portfolio and the hybrid structure, which is balanced between
private growth capital companies, more mature private company
holdings, and AIM/AQSE quoted investments. The level of VCT
qualifying investments is monitored continually by the Manager and
reported to the Risk Committee quarterly, or as otherwise
required.
Key Performance Indicators (KPIs)
During the year, the net return on ordinary activities before
taxation was a loss of GBP2,068,000 (2021: a profit of
GBP9,392,000); loss on investments of GBP787,000 (2021: gain on
investments of GBP12,143,000) and earnings per share were a deficit
of 1.64p (2021: a gain of 8.47p). The Directors also use a number
of APMs in order to assess the Company's success in achieving its
objectives, which enable Shareholders and prospective investors to
gain an understanding of its business. These APMs are shown in the
Financial Highlights in the Annual Report.
In addition, the Board considers the following to be KPIs:
-- NAV total return;
-- annual yield;
-- share price discount to NAV;
-- investment income; and
-- operational expenses.
The NAV total return is considered to be a more appropriate
long-term measure of Shareholder value as it includes the current
NAV per share and the sum of dividends paid to date. The annual
yield is the total of dividends paid per share for the financial
year, expressed as a percentage of the NAV per share at the
immediately preceding year end. The Directors seek to pay dividends
to provide a yield and comply with the VCT rules, taking account of
the level of distributable reserves, profitable realisations in
each accounting period and the Company's future cash flow
projections. The share price discount to NAV is the percentage by
which the mid-market price of a share is lower than its NAV per
share.
Definitions of these APMs can be found in the Glossary in the
Annual Report. A historical record of some of these measures is
shown in the Financial Highlights and the change in the profile of
the portfolio is reflected in the Summary of Investment Changes in
the Annual Report. The Board reviews the Company's investment
income and operational expenses on a quarterly basis, as the
Directors consider that both of these elements are important
components in the generation of Shareholder returns. Further
information can be found in Notes 2 and 4 to the Financial
Statements in the Annual Report.
There is no VCT index against which to compare the financial
performance of the Company. However, for reporting to the Board and
Shareholders, the Manager uses comparisons with the most
appropriate index, being the FTSE AIM All-Share Index, and the
graph in the Annual Report compares the Company's performance
against the FTSE AIM All-Share Index. The Directors also consider
non-financial performance measures, such as the flow of investment
proposals, and ranking of the VCT sector by independent analysts.
In addition, the Directors will consider economic, regulatory and
political trends and factors that may impact on the Company's
future development and performance.
Valuation Process
Investments held by the Company in unquoted companies are valued
in accordance with the IPEV Guidelines. Following the invasion of
Ukraine in February 2022, IPEV reiterated the Special Guidance
provided in March 2020, at the outbreak of the COVID-19 pandemic in
the UK, with respect to assessing the fair value of private company
holdings. The Directors and the Manager continue to follow these
industry guidelines and adhere to the IPEV Special Guidelines in
all private company valuations. Investments that are quoted or
traded on a recognised stock exchange, including AIM, are valued at
their bid prices.
Share Buy-backs
At the forthcoming AGM, the Board will seek the necessary
Shareholder authority to continue to conduct a share buy-back
programme under appropriate circumstances.
The Board's Duty and Stakeholder Engagement
The Directors recognise the importance of an effective Board and
its ability to discuss, review and make decisions to promote the
long-term success of the Company and protect the interests of its
key stakeholders. As required by Provision 5 of the AIC Code (and
in line with the UK Code), the Board has discussed the Directors'
duty under Section 172 of the Companies Act and how the interests
of key stakeholders have been considered in the Board discussions
and decision making during the year.
This has been summarised in the table below:
Form of engagement Influence on Board decision making
Shareholders
AGM - Shareholders are encouraged Dividend declarations - the Board
to attend the AGM and are provided recognises the importance of tax-free
with the opportunity to ask questions dividends to Shareholders and takes
and engage with the Directors and this into consideration when making
the Manager. Shareholders are also decisions to pay interim and propose
encouraged to exercise their right final dividends for each year.
to vote on the resolutions proposed Further details regarding dividends
at the AGM. for the year under review can be
found in the Chairman's Statement.
Shareholder documents - the Company
reports formally to Shareholders Share buy-back policy - the Directors
by publishing Annual and Interim recognise the importance to Shareholders
Reports, normally in April and September of the Company maintaining an active
each year. In the instance of a corporate buy-back programme and considered
action taking place, the Board will this when establishing the current
communicate with Shareholders through policy. Further details can be found
the issue of a Circular and, if required, in the Chairman's Statement, and
a Prospectus. in the Directors' Report in the Annual
Report.
In addition, significant matters
or reporting obligations are disseminated Offers for Subscription - in making
to Shareholders by way of announcements the decision to launch the current
to the London Stock Exchange. Offer for Subscription, the Directors
considered that it would be in the
The Secretary acts as a key point interest of Shareholders to continue
of contact for the Directors and to expand the portfolio and make
communications received from Shareholders investments across a diverse range
are circulated to the whole Board. of sectors. By growing the Company,
costs are spread over a wider asset
base, which helps to promote a competitive
total expense ratio and is in the
interests of Shareholders. In addition,
the increased liquidity helps support
the buy-back policy referred to above.
Further details regarding the latest
Offer for Subscription can be found
in the Chairman's Statement.
Liquidity management - in order to
generate income and add value for
Shareholders, the Board has an active
liquidity management policy, which
has the objective of generating income
from the cash held prior to deployment
in VCT qualifying investments. Further
details regarding the liquidity management
policy can be found in the Investment
Manager's Review in the Annual Report.
----------------------------------------------
Environment And Society
The Directors and the Manager take The Directors and the Manager are
account of the social, environmental aware of their duty to act in the
and ethical factors impacted by the interests of the Company and acknowledge
Company and the investments that that there are risks associated with
it makes. investment in companies that fail
to conduct business in a socially
responsible manner.
The Manager's ESG assessment of investee
companies focuses heavily on their
impact on the environment, challenging
fundamental aspects such as energy
and emissions usage, and targets
an approach to waste and recycling
as well as broader social themes
such as the companies' approach to
diversity and inclusion in the workplace,
and their work with charities.
Further details can be found in the
Chairman's Statement, in the Investment
Manager's Review and in the Statement
of Corporate Governance in the Annual
Report.
----------------------------------------------
Portfolio Companies
Quarterly Board Meetings - the Manager The Directors are aware that the
reports to the Board on the portfolio exercise of voting rights is key
companies, in particular on the private to promoting good corporate governance
investee companies, and the Directors and, through the Manager, ensures
challenge the Manager where they that the portfolio companies are
feel it is appropriate. encouraged to adopt best practice
The Manager then communicates directly corporate governance. The Board has
with each private investee company, delegated the responsibility for
normally through the Maven representative monitoring the portfolio companies
who sits on the board of the private to the Manager and has given it discretion
investee company. to vote in respect of the Company's
holdings in the investment portfolio,
in a way that reflects the concerns
and key governance matters discussed
by the Board.
The Board is also mindful that, as
the portfolio expands and the proportion
of early stage investments increases,
follow-on funding will represent
an important part of the Company's
investment strategy and this forms
a key part of the Directors' discussions
in relation to valuations, risk management
and fundraising.
From time to time, the management
teams of investee companies give
presentations to the Board.
----------------------------------------------
Manager
Quarterly Board Meetings - the Manager The Manager is responsible for implementing
attends every Board Meeting, presenting the investment objective and the
a detailed portfolio analysis and strategy agreed by the Board. In
reports on key issues such as VCT making a decision to launch any Offer
compliance, investment pipeline and for Subscription, the Board needs
utilisation of any new monies raised. to consider that the Company requires
sufficient liquidity in order to
continue to expand and broaden the
investment portfolio in line with
the strategy, including the provision
of follow-on funding.
----------------------------------------------
Registrar
Annual review meetings and control The Directors review the performance
reports. of all third party service providers
on an annual basis, including ensuring
compliance with GDPR.
----------------------------------------------
Custodian
Regular statements and control reports The Directors review the performance
received, with all holdings and balances of all third party providers on an
reconciled. annual basis, including oversight
of securing the Company's assets.
----------------------------------------------
Employee, Environmental and Human Rights Policy
As a VCT, the Company has no direct employee or environmental
responsibilities, nor is it responsible directly for the emission
of greenhouse gases. The Board's principal responsibility to
Shareholders is to ensure that the investment portfolio is managed
and invested properly. As the Company has no employees, it has no
requirement to report separately on employment matters. The Board
comprises four male Directors and delegates responsibility for
diversity to the Nomination Committee, as explained in the
Statement of Corporate Governance in the Annual Report.
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.
Further information can be found in the Statement of Corporate
Governance in the Annual Report. The Manager is continuing to focus
on developing its ESG framework and oversight capabilities. Further
details regarding the Manager's approach to ESG and the progress
made on developing its ESG framework can be found in the Chairman's
Statement and the Investment Manager's Review in the Annual
Report.
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.
Independent Auditor
The Company's Independent Auditor is required to report if there
are any material inconsistencies between the content of the
Strategic Report and the Financial Statements. The Independent
Auditor's Report can be found in the Annual Report.
Future Strategy
The Board and the Manager intend to maintain the policies set
out above for the year ending 31 December 2023, as it is believed
that these are in the best interests of Shareholders.
Approval
The Business Report, and the Strategic Report as a whole, was
approved by the Board of Directors and signed on its behalf by:
Fraser Gray
Director
12 April 2023
Income Statement
For the year ended 31 December 2022
Year ended Year ended
31 December 2022 31 December 2021
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- -------- -------- --------
(Loss)/gain on investments - (787) (787) - 12,143 12,143
Income from investments 1,297 - 1,297 2,004 - 2,004
Other income 92 - 92 1 - 1
Investment management fees (435) (1,738) (2,173) (865) (3,460) (4,325)
Other expenses (497) - (497) (431) - (431)
---------------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary activities
before taxation 457 (2,525) (2,068) 709 8,683 9,392
Tax on ordinary activities - - - (93) 93 -
---------------------------------- -------- -------- -------- -------- -------- --------
Return attributable to Equity
Shareholders 457 (2,525) (2,068) 616 8,776 9,392
---------------------------------- -------- -------- -------- -------- -------- --------
Earnings per share (pence) 0.36 (2.00) (1.64) 0.56 7.91 8.47
---------------------------------- -------- -------- -------- -------- -------- --------
All gains and losses are recognised in the Income Statement.
The total column of this statement is the Profit & Loss
Account of the Company. The revenue and capital columns are
supplementary to this and are prepared under guidance published by
the Association of Investment Companies. All items in the above
statement are derived from continuing operations. The Company has
only one class of business and one reportable segment, the results
of which are set out in the Income Statement and Balance Sheet. The
Company derives its income from investments made in shares,
securities and bank deposits.
There are no potentially dilutive capital instruments in issue
and, therefore, no diluted earnings per share figures are relevant.
The basic and diluted earnings per share are, therefore,
identical.
The Notes are an integral part of the Financial Statements and
can be found in full in the Annual Report.
Statement of Changes in Equity
For the year ended 31 December 2022
Year Ended 31 December 2022
Non-distributable Reserves Distributable Reserves
Share Capital Capital Capital Special
Share premium redemption reserve reserve distributable Revenue
capital account reserve unrealised realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- -------- ----------- ----------- --------- -------------- -------- --------
At 31 December 2021 10,992 23,244 502 14,583 2,517 29,367 1,107 82,312
Net return - - - (2,483) 1,696 (1,738) 457 (2,068)
Dividends paid - - - - - (5,940) (390) (6,330)
Repurchase and
cancellation
of shares (260) - 260 - - (1,714) - (1,714)
Net proceeds of share
issue 2,157 13,692 - - - - - 15,849
Net proceeds of DIS
issue* 88 507 - - - - - 595
----------------------- ---------- -------- ----------- ----------- --------- -------------- -------- --------
At 31 December 2022 12,977 37,443 762 12,100 4,213 19,975 1,174 88,644
----------------------- ---------- -------- ----------- ----------- --------- -------------- -------- --------
Year Ended 31 December 2021
Non-distributable Reserves Distributable Reserves
Share Capital Capital Capital Special
Share premium redemption reserve reserve distributable Revenue
capital account reserve unrealised realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 31 December 2020 11,200 22,905 236 3,732 1,225 38,533 943 78,774
Net return - - - 10,851 1,292 (3,367) 616 9,392
Dividends paid - - - - - (3,984) (452) (4,436)
Repurchase and
cancellation
of shares (266) - 266 - - (1,815) - (1,815)
Net proceeds of
DIS issue* 58 339 - - - - - 397
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 31 December 2021 10,992 23,244 502 14,583 2,517 29,367 1,107 82,312
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
The capital reserve unrealised is generally non-distributable
other than the part of the reserve relating to gains/(losses)
attributable to readily realisable quoted investments, which are
distributable.
Where all, or an element of the proceeds of sales have not been
received in cash or cash equivalent (as noted on the Realisations
table in the Annual Report), and are not readily convertible to
cash, they do not qualify as realised gains for the purposes of
distributable reserves calculations and, therefore, do not form
part of distributable reserves. The split of unrealised
gains/(losses) for the year is detailed within the portfolio
valuation section of Note 8.
The Notes are an integral part of the Financial Statements and
can be found in full in the Annual Report.
*DIS represents the Dividend Investment Scheme as detailed in
the Chairman's Statement in the Annual Report.
Balance Sheet
As at 31 December 2022
31 December 2022 31 December 2021
GBP'000 GBP'000
------------------------------------ ---------------- ----------------
Fixed assets
Investments at fair value through
profit or loss 66,858 71,502
Current assets
Debtors 1,610 1,195
Cash 20,352 10,542
------------------------------------ ---------------- ----------------
Creditors 21,962 11,737
Amounts falling due within one year (176) (927)
------------------------------------ ---------------- ----------------
Net current assets 21,786 10,810
------------------------------------ ---------------- ----------------
Net assets 88,644 82,312
------------------------------------ ---------------- ----------------
Capital and reserves
Called up share capital 12,977 10,992
Share premium account 37,443 23,244
Capital redemption reserve 762 502
Capital reserve - unrealised 12,100 14,583
Capital reserve - realised 4,213 2,517
Special distributable reserve 19,975 29,367
Revenue reserve 1,174 1,107
------------------------------------ ---------------- ----------------
Net assets attributable to Ordinary
Shareholders 88,644 82,312
------------------------------------ ---------------- ----------------
Net asset value per Ordinary Share
(pence) 68.30 74.88
------------------------------------ ---------------- ----------------
The Financial Statements of Maven Income and Growth VCT 4 PLC,
registered number SC272568, were approved by the Board of Directors
and were signed on its behalf by:
Fraser Gray
Director
12 April 2023
The Notes are an integral part of the Financial Statements and
can be found in full in the Annual Report.
Cash Flow Statement
For the Year ended 31 December 2022
Year ended Year ended
31 December 2022 31 December 2021
GBP'000 GBP'000
--------------------------------------- ----------------- -----------------
Net cash flows from operating
activities (2,187) (3,100)
Cash flows from investing activities
Purchase of investments (5,471) (5,030)
Sale of investments 9,068 9,674
--------------------------------------- ----------------- -----------------
Net cash flows from investing
activities 3,597 4,644
--------------------------------------- ----------------- -----------------
Cash flows from financing activities
Equity dividends paid (6,330) (4,436)
Net proceeds of DIS issue 595 397
Issue of Ordinary Shares 15,849 -
Repurchase of Ordinary Shares (1,714) (1,815)
--------------------------------------- ----------------- -----------------
Net cash flows from financing
activities 8,400 (5,854)
--------------------------------------- ----------------- -----------------
Net increase (decrease) in
cash 9,810 (4,310)
--------------------------------------- ----------------- -----------------
Cash at beginning of year 10,542 14,852
Cash at end of year 20,352 10,542
The Notes are an integral part of the Financial Statements and
can be found in full in the Annual Report.
Notes to the Financial Statements
For the year ended 31 December 2022
1. Accounting policies
The Company is a public limited company, incorporated in
Scotland and its registered office is shown in the Corporate
Summary.
(a) Basis of preparation
The Financial Statements have been prepared on a going concern
basis, further details can be found in the Directors' Report in the
Annual Report. The Financial Statements have been prepared under
the historical cost convention, as modified by the revaluation of
investments and in accordance with FRS 102, The Financial Reporting
Standard applicable in the UK and Republic of Ireland, and in
accordance with the Statement of Recommended Practice for
Investment Trust Companies and Venture Capital Trusts (the SORP)
issued by the AIC in July 2022.
(b) Income
Interest income on loan notes and dividends on preference shares
are accrued on a daily basis. Provision is made against this income
where recovery is doubtful. Where the terms of unquoted loan notes
only require interest or a redemption premium to be paid on
redemption, the interest and the redemption premium is recognised
as income once redemption is reasonably certain. Until such date
interest is accrued daily and included within the valuation of the
investment. When a redemption premium is designed to protect the
value of the instrument holder's investment rather than reflect a
commercial rate of revenue return the redemption premium should be
recognised as capital. The treatment of redemption premiums is
analysed to consider if they are revenue or capital in nature on a
company by company basis. A redemption premium of GBP141,836 (2021:
GBP115,650) was received in the year ended 31 December 2022. Income
from fixed interest securities and deposit interest is included on
an effective interest rate basis. Dividends on quoted shares are
recognised as income when the related investments are marked
ex-dividend and where no dividend date is quoted, when the
Company's right to receive payment is established.
(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 that are incidental to the acquisition and disposal
of an investment are charged to capital; and
-- expenses are charged to the special distributable reserve
where a connection with the maintenance or enhancement of the value
of the investments can be demonstrated. In this respect, the
investment management fee and performance fee has been allocated
20% to revenue and 80% to special distributable reserve to reflect
the Company's investment policy and prospective income and capital
growth.
-- share issue and merger costs are charged to the share premium account.
(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 that 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
IPEV 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 early stage investments completed in the reporting
period, fair value is determined using the Price of Recent
Investment Method, calibrating for any material change in the
trading circumstances of the investee company.
Other early stage companies are valued by applying a multiple to
the investee's revenue to derive the enterprise value of each
company.
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
maintainable earnings to determine the enterprise value of the
company.
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.
4. All unlisted investments are valued individually by the
Manager. The resultant valuations are subject to detailed scrutiny
and approval by the Directors of the Company.
5. In accordance with normal market practice, investments listed
on AIM 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 - the unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the
measurement date.
-- Level 2 - inputs other than quoted prices included within
Level 1 that are observable (i.e. developed using market data) for
the asset or liability, either directly or indirectly.
-- Level 3 - inputs are unobservable (i.e. for which market data
is unavailable) for the asset or liability.
(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 to the
Income Statement.
(h) Critical accounting judgements and key sources of estimation
uncertainty
Disclosure is required of judgements and estimates made by the
Board and the Manager in applying the accounting policies that have
a significant effect on the Financial Statements. The area
involving the highest degree of judgement and estimates is the
valuation of early stage unlisted investments recognised in Note 8
and explained in Note 1(e) in the Financial Statements.
In the opinion of the Board and the Manager, there are no
critical accounting judgements.
Reserves
Share premium account
The share premium account represents the premium above nominal
value received by the Company on issuing shares net of issue costs.
This reserve is non-distributable.
Capital redemption reserve
The nominal value of shares repurchased and cancelled is
represented in the capital redemption reserve. This reserve is
non-distributable.
Capital reserve - unrealised
Increases and decreases in the fair value of investments are
recognised in the Income Statement and are then transferred to the
capital reserve unrealised account. This reserve is generally
non-distributable other than the part of the reserve relating to
gains/(losses) attributable to readily realisable quoted
investments which are distributable.
Capital reserve - realised
Gains or losses on investments realised in the year that have
been recognised in the Income Statement are transferred to the
capital reserve realised account on disposal. Furthermore, any
prior unrealised gains or losses on such investments are
transferred from the capital reserve unrealised account to the
capital reserve realised account on disposal. This reserve is
distributable.
Special distributable reserve
The total cost to the Company of the repurchase and cancellation
of shares is represented in the special distributable reserve
account. The special distributable reserve also represents capital
dividends, capital investment management fees and the tax effect of
capital items. This reserve is distributable.
Revenue reserve
The revenue reserve represents accumulated profits retained by
the Company that have not been distributed to Shareholders as a
dividend. This reserve is distributable.
Return per Ordinary Share
Year ended Year ended
31 December 31 December
2022 2021
--------------------------------------------- --------------- --------------
The returns per share have been based
on the following figures:
Weighted average number of Ordinary Shares 126,180,477 110,969,818
Revenue return GBP457,000 GBP616,000
Capital return (GBP2,525,000) GBP8,776,000
--------------------------------------------- --------------- --------------
Total return (GBP2,068,000) GBP9,392,000
--------------------------------------------- --------------- --------------
Net asset value per Ordinary Share
The net asset value per Ordinary Share as at 31 December 2022
has been calculated using the number of Ordinary Shares in issue at
that date of 129,788,859 (2021: 109,929,961).
Directors Responsibility Statement
The Directors confirm that, to the best of their knowledge:
-- 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 2022 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 and emerging risks and uncertainties
that it faces; and
-- the Annual Report and Financial Statements taken as a whole
is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company's position and
performance, business model and strategy.
Other Information
The AGM will be held on Thursday, 11 May 2023, commencing at
11.30 am, at the offices of Maven Capital Partners UK LLP, Kintyre
House, 205 West George Street, Glasgow G2 2LW.
Copies of this announcement and the Annual Report and Financial
Statements for the year ended 31 December 2022, will be available
to the public at: the registered office of the Company, Kintyre
House, 205 West George Street, Glasgow G2 2LW; the offices of Maven
Capital Partners UK LLP, Fifth Floor, 1-2 Royal Exchange Buildings,
London EC3V 3LF; and on the Company's website at
mavencp.com/migvct4.
The Annual Report and Financial Statements for the year ended 31
December 2022 will be issued to Shareholders and filed with the
Registrar of Companies 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 2021 have been delivered
to the Registrar of Companies and contained an audit report that
was unqualified and did not constitute statements under S498(2) or
S498(3) of the Companies Act 2006.
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 will be submitted to the National Storage
Mechanism and will be available for inspection at:
fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.
By Order of the Board
Maven Capital Partners UK LLP
Secretary
12 April 2023
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR ZZGMDRZZGFZM
(END) Dow Jones Newswires
April 13, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Maven Income & Growth Vc... (LSE:MAV4)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Maven Income & Growth Vc... (LSE:MAV4)
Storico
Da Lug 2023 a Lug 2024
