TIDMMIG3
RNS Number : 9611S
Maven Income and Growth VCT 3 PLC
14 March 2023
Maven Income and Growth VCT 3 PLC
Final results for the year ended 30 November 2022
The Directors report the Company's financial results for the
year ended 30 November 2022.
Highlights
-- NAV total return at the year end of 152.49p per share (2021: 152.97p)
-- NAV at the year end of 57.32p per share (2021: 62.55p), after
payment of 4.75p per share in dividends during the year
-- Interim dividend of 1.25p per share paid on 26 August 2022
-- Final dividend of 1.90p per share proposed for payment on 26 April 2023
-- GBP16.1 million of capital raised for the 2021/22 and 2022/23 tax years
-- New Offer for Subscription launched for the 2022/23 and
2023/24 tax years to raise up to GBP10 million (including an
overallotment facility for up to GBP5 million) alongside the other
Maven VCTs
Chairman's Statement
On behalf of your Board, I am pleased to present the results for
the financial year to 30 November 2022 where, against a backdrop of
economic uncertainty and geopolitical instability, your Company has
made further strategic progress. The resilient NAV total return
that has been reported reflects the strength and diversity of the
underlying portfolio with many of the private company holdings
continuing to make commercial progress and achieve their growth
objectives, which has resulted in uplifts to certain valuations.
This progress has, however, been offset by a weaker performance
across the AIM quoted portfolio, where share prices have been
impacted by the volatility that has persisted in listed markets
throughout the year. Conversely, this has been a strong period for
private company realisations with the completion of seven
profitable exits, including the sale of Quorum Cyber, which
achieved a total return of 6.5x cost inclusive of a retained
shareholding in the acquiring entity. In recognition of the exits
achieved, and the commitment to make regular tax free
distributions, the Directors are proposing a final dividend of
1.90p per share for payment to Shareholders in April 2023. This
takes the tax free dividend yield to just over 5%, which is in line
with the annual target.
Overview
At the start of the financial year, the impact of the COVID-19
pandemic had reduced, enabling economies to reopen and there was a
sense of cautious optimism within the UK business community. This
optimism was, however, curtailed by the escalating tension in
Eastern Europe and the subsequent invasion of Ukraine by Russia. In
addition to the tragic human cost, the war has had a significant
economic impact, most notably resulting in the sharp rise in global
energy prices and widespread disruption to international supply
chains. In the UK, the energy price shock has contributed to the
current high level of inflation and the cost of living crisis
which, alongside rising interest rates, resulted in an uncertain
and difficult operating environment for many consumers and
businesses during 2022.
Notwithstanding the prevailing economic conditions, the
Directors are encouraged by the resilient performance that has been
achieved during the financial year. This reflects the consistent
application of the long term investment strategy, which is focused
on 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 demand for growth capital from ambitious and
entrepreneurial private companies and completed 13 new investments,
with follow-on funding also provided to support those companies
that are gaining commercial traction 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.
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 uplifts to valuations. 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 level of risk associated
with earlier stage growth companies. This generally good
performance has, however, been offset by the volatility within
financial markets that has persisted since the start of 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. Furthermore, during the year, the AIM market
has been very quiet with limited IPO and new share issuance
activity, 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.
During the year, your Company made further progress in line with
its long term growth objective and the success of the 2021/22
fundraising, which closed in May 2022 after raising GBP16.1
million, provides good near term liquidity to support investment
activity. The commitment to future growth was further enhanced by
the announcement from UK Government in September 2022 that tax
relief for VCT and EIS schemes would continue beyond 2025. The
Board and the Manager welcomed the news that the period imposed by
the "sunset clause" will be extended as this removes uncertainty
for investors and allows entrepreneurial SMEs to continue to access
this important source of growth capital. In early October 2022, the
Directors were pleased to launch new Offers for Subscription for
the 2022/23 and 2023/24 tax years alongside the other Maven managed
VCTs. Your Company has an initial target raise of GBP5 million,
with the ability to make use of an over-allotment facility of up to
a further GBP5 million which, as announced on 16 February 2023, the
Directors have resolved to utilise. It is encouraging to report
that, at the time of writing, GBP5.2 million has been raised by
your Company. The Offers remain open until 4 April 2023 for the
2022/23 tax year and until 26 May 2023 for the 2023/24 tax year,
unless it is fully subscribed ahead of this date. Further
information about the Offers, including the Securities Note and
Application Form can be found at: mavencp.com/vctoffer.
Your Board remains committed to making regular tax free
distributions and, as Shareholders will be aware, achieving
portfolio realisations is central to this objective. It is,
therefore, encouraging to report that during the period under
review, seven profitable private company exits completed. A number
of these exits were from the early stage portfolio and have been
delivered over a relatively short period of investment, with the
key highlight being the exit from Quorum Cyber which completed in
December 2021 generating a total return of 6.5x cost inclusive of a
retained element in the acquiring entity, over a holding period of
18 months. Whilst the timing of exits is hard to predict,
particularly in the current environment, the Directors remain
optimistic that further profitable realisations can be achieved in
the year ahead.
Full details of the portfolio developments, including the new
investments and realisations completed during the year, 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, can be found in the Investment
Manager's Review in the Annual Report. Shareholders will also find
details of the principal Key Performance Indicators (KPIs) 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 preceding year
end.
The Directors would like to remind Shareholders that, as the
portfolio continues to expand and the proportion of younger
companies increases, 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
Further to the recent private company realisations, your Board
is pleased to propose that a final dividend of 1.90p per Ordinary
Share, in respect of the year ended 30 November 2022, will be paid
on 26 April 2023 to Shareholders on the register at 24 March 2023.
This will bring total distributions for the financial year to 3.15p
per Ordinary Share, representing a yield of 5.04% based on the NAV
at the immediately preceding year end of 62.55p per share. Since
the Company's launch, and after receipt of the proposed final
dividend, Shareholders will have received a total of 97.07p 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 26 April
2023, the mandate form must be received by the Registrar (The City
Partnership) before 12 April 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/migvct3. 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, alongside Maven Income and Growth VCT 4 PLC, launched
joint Offers for Subscription for new Ordinary Shares, 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 GBP16.1 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 13,603,037 new
Ordinary Shares completed on 4 February 2022, with a further
allotment of 4,314,618 new Ordinary Shares on 23 March 2022 and a
final allotment of 4,767,002 new Ordinary Shares taking place on 5
April 2022. An allotment of 2,938,136 new Ordinary Shares for the
2022/23 tax year completed on 6 June 2022.
Further details regarding the new Ordinary Shares issued under
the Offer for Subscription can be found in Note 12 to the Financial
Statements in the Annual Report.
Current Offers for Subscription
On 7 October 2022, your Company, alongside Maven Income and
Growth VCT PLC, Maven Income and Growth VCT 4 PLC and Maven Income
and Growth VCT 5 PLC, 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 the ability to use an over-allotment facility of up
to a further GBP5 million. As at the date of this Annual Report,
your Company has raised a total of GBP5.2 million and further to
the announcement of 16 February 2023, the Directors have resolved
to utilise the over-allotment facility.
With respect to the 2022/23 tax year, an allotment of 6,389,151
new Ordinary Shares completed on 8 February 2023, with a further
allotment of 982,796 new Ordinary Shares completing on 3 March
2023. A final allotment for the 2022/23 tax year will be made on or
before 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 5 April
2023, and on or before 31 May 2023.
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, and that the
additional liquidity provided by the fundraising will facilitate
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 in line 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 an unaudited NAV and any dividend. 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
was 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. In the budget statement of 17 November 2022,
the Chancellor reconfirmed the UK Government's commitment to extend
the VCT scheme beyond 2025. 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 which 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 internal metrics, which
will be measured from year to year with the intention of reducing
carbon footprint and improving and enhancing key governance and
social metrics.
The Manager has a comprehensive ESG policy in place, which is
ingrained within the investment process and is a standard part of
due diligence for any new investment to ensure that ESG risks and
opportunities are fully considered. 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 risk 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.
Whilst significant steps are being taken by the Manager to
assess ESG capability and support ongoing dialogue with investee
companies, with the aim of improving the use of ESG metrics over
the period that your Company is invested, 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 on 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 30 November 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.
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 24 April 2023, commencing at 12 noon. The Notice of AGM
can be found in the Annual Report.
Succession Planning
Further to the announcement of 12 December 2022, after nearly
nine years serving as a Non-executive Director, including seven
years as Chairman, I have informed the Board of my intention to
step down as Chairman and from the Board and I will not stand for
re-election at the 2024 AGM.
This is part of a planned succession, in line with good
corporate governance, and allows for a period of stability during
which the Board will commence a process to recruit a new
Non-executive Director, and reach a decision on who will be
appointed to succeed me as Chairman. Details of these further
changes to the constitution of the Board will be announced in due
course.
The Future
Notwithstanding the macroeconomic backdrop, this has been a year
of steady progress during which your Company has maintained a good
rate of new investment activity, completed seven profitable private
company realisations, and successfully closed a fundraising,
increasing net assets at the year end to almost GBP60 million. With
good levels of liquidity, enhanced by the current Offer for
Subscription, the strategy for the year ahead will continue to
focus on expanding and developing the portfolio through the
selective addition of high quality growth companies that operate in
sectors and markets that are less dependent on discretionary
consumer spending, and which are capable of delivering growth in an
inflationary environment. The Directors believe that this approach
will enable your Company to continue to deliver long term sustained
growth in Shareholder value and support a programme of regular tax
free distributions.
Atul Devani
Chairman
14 March 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
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 Audit & 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 risk 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. 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 Note 16 in the Annual Report for further details);
-- taking steps to ensure that 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 consequential 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
serious breach of other regulations such as the FCA Listing Rules
and the Companies Act 2006 (the Companies Act); and
-- increased investment restrictions resulting from the 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
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, 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 in
the Annual Report, 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 paper copies being printed and posted, with fewer
than 13% of Shareholders now receiving printed 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 investments could fail,
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 mid 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 regularly the political situation, 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 can be found in Note 16 to the Financial
Statements in the Annual Report.
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 this Annual Report, from information
provided in the Chairman's Statement and in the Investment
Manager's Review. A review of the Company's business, its position
as at 30 November 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 by asset class. They help to 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 qualifying
investments is monitored continually by the Manager and reported to
the Audit & 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 GBP456,000 (2021: a profit of GBP6,731,000),
the gain on investments was GBP626,000 (2021: GBP8,550,000) and
earnings per share were a deficit of (0.47p) (2021: 8.49p). The
Directors also use a number of Alternative Performance Measures
(APMs) in order to assess the Company's success in achieving its
objectives, and these also enable Shareholders and prospective
investors to gain an understanding of its business. The APMs are
shown in the Financial Highlights and are defined in the Glossary
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 both the
current NAV per share and the sum of dividends paid to date. The
annual yield is the total dividends paid for the financial year,
expressed as a percentage of the NAV per Ordinary 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 the most
recently published NAV per share. A historical record of these
measures is shown in the Financial Highlights in the Annual Report.
The change in the profile of the portfolio is reflected in the
Summary of Investment Changes in the Annual Report. The Board also
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 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.
In addition, the Directors consider economic, regulatory and
political trends and factors that may impact on the Company's
future development and performance.
Valuation Process
Investments held by Maven Income and Growth VCT 3 PLC 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 share buy-backs 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's 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 Dividend declarations - the Board recognises
encouraged to attend the the importance of tax free dividends to Shareholders
AGM and are provided with and takes this into consideration when making
the opportunity to ask decisions to pay interim and propose final dividends
questions and engage with for each year. Further details regarding dividends
the Directors and the for the year under review can be found in the
Manager. Shareholders Chairman's Statement.
are also encouraged to
exercise their right to Share buy-back policy - the Directors recognise
vote on the resolutions the importance to Shareholders of the Company
proposed at the AGM. maintaining an active buy-back policy and considered
this when establishing the current programme.
Shareholder documents Further details can be found in the Chairman's
- the Company reports Statement and in the Directors' Report in the
formally to Shareholders Annual Report.
by publishing Annual and
Interim Reports, normally Offers for Subscription - in making the decision
in March and July each to launch the current Offer for Subscription,
year. In the instance the Directors considered that it would be in
of a corporate action the interest of Shareholders to continue to
taking place, the Board grow the portfolio and make investments across
will communicate with a diverse range of sectors. By growing the Company,
Shareholders through the costs are spread over a wider asset base, which
issue of a Circular and, helps to promote a competitive total expense
if required, a Prospectus. ratio, which is in the interests of Shareholders.
In addition, the increased liquidity helps support
In addition, significant the buy-back policy referred to above. Further
matters or reporting obligations details regarding the current Offers for Subscription
are disseminated to Shareholders can be found in the Chairman's Statement.
by way of London Stock
Exchange Announcements. Liquidity management - in order to generate
income and add value for Shareholders, the Board
The Secretary acts as has an active liquidity management policy, which
a point of contact for has the objective of generating income from
the Board and communications the cash held prior to deployment in VCT qualifying
received from Shareholders investments. Further details regarding the liquidity
are circulated to the management policy can be found in the Investment
whole Board. Manager's Review in the Annual Report.
--------------------------------------------------------
ENVIRONMENT AND SOCIETY
The Directors and the The Directors and the Manager are aware of their
Manager take account of duty to act in the interests of the Company
the social, environmental and acknowledge that there are risks associated
and ethical factors impacted with investment in companies that fail to conduct
by the Company and the business in a socially responsible manner.
investments that it makes.
The Manager's ESG assessment of investee companies
focuses heavily on their impact on their 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 Statement
of Corporate Governance, Chairman's Statement
and in the Investment Manager's Review in the
Annual Report.
--------------------------------------------------------
PORTFOLIO COMPANIES
Quarterly Board Meetings The Directors are aware that the exercise of
- the Manager reports voting rights is key to promoting good corporate
to the Board on the performance governance and, through the Manager, ensures
of portfolio companies, that the portfolio companies are encouraged
in particular on the private to adopt best practice corporate governance.
investee companies, and The Board has delegated the responsibility for
the Directors challenge monitoring the portfolio companies to the Manager
the Manager where they and has given it discretion to vote in respect
feel it is appropriate. of the Company's holdings in the investment
portfolio, in a way that reflects the concerns
The Manager then communicates and key governance matters discussed by the
directly with each private Board.
investee company, normally
through the Maven representative The Board is also mindful that, as the portfolio
who sits on the board expands and the proportion of early stage investment
of the private investee increases, follow-on funding will represent
company. 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 is responsible for implementing
- the Manager attends the investment objective and the strategy agreed
every Board Meeting, presenting by the Board. In making a decision to launch
a detailed portfolio analysis any Offer for Subscription, the Board needs
and reports on key issues to consider that the Company requires to have
such as VCT compliance, sufficient liquidity to continue to expand and
investment pipeline and broaden the investment portfolio in line with
utilisation of any new the strategy, including the provision of follow-on
monies raised. funding, as referred to above.
--------------------------------------------------------
REGISTRAR
Annual review meetings The Directors review the performance of all
and control reports. third party service providers on an annual basis,
including ensuring compliance with GDPR.
--------------------------------------------------------
CUSTODIAN
Regular statements and The Directors review the performance of all
control reports received, third party providers on an annual basis, including
with all holdings and oversight of securing the Company's assets.
balances reconciled.
--------------------------------------------------------
Employee, Environmental and Human Rights Policy
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
looking to ensure 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 and
further information can be found in the Statement of Corporate
Governance. 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 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.
Auditor
The Company's 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 Manager intend to maintain the policies set out
above for the year ending 30 November 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:
Atul Devani
Director
14 March 2023
Income Statement
For the year ended 30 November 2022
Year ended Year ended
30 November 2022 30 November 2021
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- -------- -------- -------- -------- -------- --------
Gain on investments - 626 626 - 8,550 8,550
Income from investments 730 - 730 755 - 755
Other income 55 - 55 2 - 2
Investment management fees (277) (1,111) (1,388) (444) (1,776) (2,220)
Other expenses (479) - (479) (356) - (356)
------------------------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary activities
before taxation 29 (485) (456) (43) 6,774 6,731
Tax on ordinary activities - - - - - -
------------------------------------------- -------- -------- -------- -------- -------- --------
Return attributable to Equity Shareholders 29 (485) (456) (43) 6,774 6,731
------------------------------------------- -------- -------- -------- -------- -------- --------
Earnings per share (pence) 0.03 (0.50) (0.47) (0.05) 8.54 8.49
------------------------------------------- -------- -------- -------- -------- -------- --------
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 30 November 2022
Year ended 30 November 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 30 November 2021 7,866 6,436 287 9,669 (1,823) 26,020 745 49,200
Net return - - - (2,247) 2,873 (1,111) 29 456
Dividends paid - - - - - (4,607) - (4,607)
Repurchase and
cancellation
of shares (59) - 59 - - (328) - (328)
Net proceeds of share
issue 2,562 13,074 - - - - - 15,636
Net proceeds of DIS
issue* 88 410 - - - - - 498
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2022 10,457 19,920 346 7,422 1,050 19,974 774 59,943
========================= ======== ======== =========== =========== ========= ============== ======== ========
Year ended 30 November 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 30 November 2020 7,965 6,285 153 (722) 18 30,332 788 44,819
Net return - - - 10,391 (1,841) (1,776) (43) 6,731
Dividends paid - - - - - (1,783) - (1,783)
Repurchase and
cancellation
of shares (134) - 134 - - (753) - (753)
Net proceeds of share
issue
Net proceeds of DIS
issue* 35 151 - - - - - 186
----------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2021 7,866 6,436 287 9,669 (1,823) 26,020 745 49,200
----------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
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 in the Annual Report.
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 30 November 2022
30 November 2022 30 November 2021
GBP'000 GBP'000
------------------------------------- ---------------- ----------------
Fixed assets
Investments at fair value through
profit or loss 41,160 43,410
Current assets
Debtors 703 508
Cash 18,261 5,648
------------------------------------- ---------------- ----------------
18,964 6,156
Creditors
Amounts falling due within one
year (181) (366)
------------------------------------- ---------------- ----------------
Net current assets 18,783 5,790
------------------------------------- ---------------- ----------------
Net assets 59,943 49,200
------------------------------------- ---------------- ----------------
Capital and reserves
Called up share capital 10,457 7,866
Share premium account 19,920 6,436
Capital redemption reserve 346 287
Capital reserve - unrealised 7,422 9,669
Capital reserve - realised 1,050 (1,823)
Special distributable reserve 19,974 26,020
Revenue reserve 774 745
------------------------------------- ---------------- ----------------
Net assets attributable to Ordinary
Shareholders 59,943 49,200
------------------------------------- ---------------- ----------------
Net asset value per Ordinary Share
(pence) 57.32 62.55
------------------------------------- ---------------- ----------------
The Financial Statements of Maven Income and Growth VCT 3 PLC,
registered number 04283350, were approved by the Board of Directors
and were signed on its behalf by:
Atul Devani
Director
14 March 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 30 November 2022
Year ended Year ended
30 November 2022 30 November 2021
GBP'000 GBP'000
------------------------------------------ ----------------- -----------------
Net cash flows from operating activities (1,329) (1,574)
Cash flows from investing activities
Purchase of investments (5,626) (3,334)
Sale of investments 8,369 2,428
------------------------------------------ ----------------- -----------------
Net cash flows from investing activities 2,743 (906)
------------------------------------------ ----------------- -----------------
Cash flows from financing activities
Equity dividends paid (4,607) (1,783)
Issue of Ordinary Shares 16,134 186
Repurchase of Ordinary Shares (328) (753)
------------------------------------------ ----------------- -----------------
Net cash flows from financing activities 11,199 (2,350)
------------------------------------------ ----------------- -----------------
Net increase/(decrease) in cash 12,613 (4,830)
------------------------------------------ ----------------- -----------------
Cash at beginning of year 5,648 10,478
Cash at end of year 18,261 5,648
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 30 November 2022
1. Accounting Policies
The Company is a public limited company, incorporated in England
& Wales 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 GBP83,433 (2021: GBP38,805) was
received in the year ended 30 November 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 have been allocated
20% to revenue and 80% to the special distributable reserve to
reflect the Company's investment policy and prospective income and
capital growth.
(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
and loss. At subsequent reporting dates, investments are valued at
fair value, which represents the Directors' view of the amount for
which an asset could be exchanged between knowledgeable and 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, 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's portfolio management team. 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 at the year end.
(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; and
-- 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 16 in the Annual Report and explained in Note 1(e) above.
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
30 November 2022 30 November 2021
-------------------------------------------- ----------------- -----------------
The returns per share have been based on the
following figures:
Weighted average number of Ordinary Shares 97,545,818 79,296,960
Revenue return GBP29,000 (GBP43,000)
Capital return (GBP485,000) GBP6,774,000
-------------------------------------------- ----------------- -----------------
Total return (GBP456,000) GBP6,731,000
-------------------------------------------- ----------------- -----------------
Net asset value per Ordinary Share
The net asset value per Ordinary Share as at 30 November 2022
has been calculated using the number of Ordinary Shares in issue at
that date of 2022: 104,569,876 (2021: 78,660,439).
Directors' Responsibility Statement
Each Director believes 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 30 November 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 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 Annual General Meeting will be held on Monday 24 April 2023,
commencing at 12 noon, at the offices of Maven Capital Partners UK
LLP, Kintyre House, 205 West George Street, Glasgow G2 2LW.
The Annual Report and Financial Statements for the year ended 30
November 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 30 November 2021 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.
Copies of this announcement, and of the Annual Report and
Financial Statements for the year ended 30 November 2022, will be
available, in due course, to the public at the office of Maven
Capital Partners UK LLP, 205 West George Street, Glasgow G2 2LW; at
the registered office of the Company, 1-2 Royal Exchange Buildings,
London EC3V 3LF and on the Company's website at
mavencp.com/migvct3.
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 shortly 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
14 March 2023
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END
FR SFAFMLEDSEED
(END) Dow Jones Newswires
March 14, 2023 12:31 ET (16:31 GMT)
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