TIDMMIG5
RNS Number : 0732U
Maven Income and Growth VCT 5 PLC
23 March 2023
Maven Income and Growth VCT 5 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 85.05p per share (2021: 84.64p)
-- NAV at the year end of 35.40p per share (2021: 38.99p), after
total dividend payments of 4.00p per share during the year
-- Enhanced interim dividend of 3.00p per share paid following the realisation of Ideagen
-- Final dividend of 0.50p per share proposed for payment on 5 May 2023
-- Offer for Subscription launched to raise up to GBP10 million alongside the other Maven VCTs
Strategic Report
Chairman's Statement
On behalf of your Board, I am pleased to present the 2022 Annual
Report. During the financial year, the unsettled economic and
geopolitical landscape created a challenging operating environment,
and it is, therefore, encouraging to report on the progress that
has been achieved by your Company. The stable NAV total return that
has been reported reflects the strength and diversity of the
unlisted portfolio, where many private companies have continued to
achieve revenue growth and meet commercial objectives, which has
merited uplifts to certain valuations. Conversely, the continued
volatility within financial markets has had an impact on AIM,
resulting in your Company's AIM quoted portfolio declining in
value. Notwithstanding the wider market conditions, in May 2022
there was a notable development when the holding in Ideagen
received an all cash offer at a significant premium to the
underlying share price. The exit generated a total return of 15x
cost and material cash proceeds, which enabled your Board to
declare an enhanced interim dividend. This has also been a good
period for private company realisations with the completion of
seven profitable exits, including the sale of Quorum Cyber, which
generated a total return of 6.5x cost, inclusive of a retained
shareholding in the acquiring entity. Further to this, and
consistent with the commitment to make regular tax free
distributions, the Directors are pleased to propose a final
dividend of 0.50p per share for payment in May 2023, which will
bring the annual yield to 8.98%, thereby comfortably exceeding the
5% target.
Overview
During the first half of the financial year, the impact of the
pandemic significantly reduced, enabling most economies to reopen
and whilst there was an initial surge in activity, the recovery was
tempered by the invasion of Ukraine by Russia. Whilst this
humanitarian tragedy has garnered global condemnation, it has also
had far reaching economic consequences, the most notable of which
have been the sharp rise in global energy prices and the widespread
disruption to international supply chains. The UK has not been
immune to these external events, with the energy price shock
significantly contributing to the current high level of inflation
and the cost of living crisis which, alongside rising interest
rates, has created a challenging situation for many consumers and
businesses.
Against this backdrop, it is encouraging to report on the
performance that has been achieved by your Company. The resilient
NAV total return that has been reported, 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 markets,
and which are capable of achieving scale and generating a capital
gain on exit. During the year, there has been further development
of the portfolio with the addition of 13 new private companies,
with follow-on funding also provided to support those companies
that are achieving commercial targets and require additional
capital to fully scale before securing an exit. The Manager
continues to see strong demand for growth capital from ambitious
and entrepreneurial private companies across its network of
regional offices and 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.
Your Board remains committed to future growth and in early
October 2022 the Directors were pleased to launch an Offer for
Subscription alongside the other Maven managed VCTs. Your Company
has a target raise of GBP10 million, and it is encouraging to
report that, at the time of writing, GBP5.18 million has been
raised by your Company. The Directors would like to remind
Shareholders that 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 fully subscribed ahead of this date. Further information
about the Offers, can be found at: mavencp.com/vctoffer. With
respect to future fund raisings, the Board and the Manager welcomed
the announcement by the UK Government in September 2022 that tax
relief for the 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.
It is pleasing to report on the tangible progress that has been
achieved across the early stage unlisted portfolio, where the
majority of companies have continued to deliver revenue growth and
achieve commercial milestones, meriting uplifts to certain
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
risks associated with earlier stage growth companies. This positive
performance has, however, been offset by the volatility that has
affected financial markets throughout 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. During the year, the value of your Company's AIM quoted
portfolio reduced by 16.2%, compared to a 26.7% reduction in the
FTSE AIM All-Share Index over the same time period. Across AIM,
there has also been limited IPO and new share issuance activity,
with only two new AIM quoted investments completed by your Company
during the year. Your Board continues to believe that a blended
portfolio of private equity and AIM quoted holdings provides the
optimal structure for delivering long term growth in Shareholder
value, however, the Manager will remain cautious on any new AIM
investments until there is clear evidence of a recovery in this
market and an improvement in the quality and range of companies
seeking VCT investment.
This has been a strong period for portfolio realisations with
the completion of seven profitable private company exits, including
the most significant realisation to date from the early stage
portfolio with the sale of Quorum Cyber, which achieved a total
return of 6.5x cost inclusive of a retained shareholding in the
acquiring entity. A further highlight was 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 cash proceeds of GBP5.9 million and a total return of 15x
cost over the life of the investment. Following this realisation,
your Company's exposure to AIM is significantly reduced, which is
consistent with the Director's previously stated strategic
objective to reduce the size of certain larger AIM quoted holdings
to rebalance the portfolio as a whole.
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
and where valuations have been uplifted, 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
Decisions on distributions take into consideration a number of
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
which 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
investments are in early stage companies, the timing of
distributions will be more 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 NAV per share. However, your Board
considers this to be a tax efficient means of returning value to
Shareholders, whilst ensuring ongoing compliance with the
requirements of the VCT legislation.
Proposed Final Dividend
Your Board is pleased to propose a final dividend of 0.50p per
Ordinary Share in respect of the year ended 30 November 2022, which
will be paid on 5 May 2023 to Shareholders on the register at 31
March 2023. This will bring total distributions for the financial
year to 3.50p per Ordinary Share, representing a yield of 8.98%
based on the NAV at the immediately preceding year end of 38.99p
per share. Since the Company's launch, and after receipt of the
proposed final dividend, Shareholders will have received a total of
50.15p 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 5 May
2023, the mandate form must be received by the Registrar (The City
Partnership) before 19 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/migvct5. 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
On 7 October 2022, your Company, alongside Maven Income and
Growth VCT PLC, Maven Income and Growth VCT 3 PLC and Maven Income
and Growth VCT 4 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 a target raise of GBP10 million and as
at the date of the Annual Report, it has raised a total of GBP5.18
million.
With respect to the 2022/23 tax year, an allotment of 9,705,619
new Ordinary Shares completed on 8 February 2023, with a further
allotment of 1,005,373 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 is expected take place 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 for 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.
As announced in the 2022 Interim Report, the Directors carried
out a further review of the Company's share buy-back policy and
following that review it is intended that the Company will seek to
buy back shares with a view to maintaining a share price discount
that is approximately 5% below the latest published NAV per share.
This will be adjusted, where appropriate, for any dividends in
respect of which the Company's shares are trading ex-dividend, and
is subject to market conditions, available 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. In the budget statement of 17 November 2022,
the Chancellor reconfirmed the 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 Directors 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
originally 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 for 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 and enhancing 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 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 is also 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 in providing 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.
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 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 25 April 2023, commencing at 11:30am. The Notice of
Annual General Meeting can be found in the Annual Report.
The Future
Despite the challenging macroeconomic backdrop, the Directors
are encouraged by the progress that has been achieved by your
Company during the financial year. The realisation of Ideagen
helped to further rebalance the portfolio and, at the same time,
allowed for an enhanced interim dividend to be paid. Additionally,
your Company has added a large number of new private companies to
the portfolio in recent years, which allows for further
diversification by sector and absolute number of holdings. This
strategy of portfolio expansion will continue, supplemented by
fundraising to match the level of new investment activity. The
Manager has a track record of successfully completing and realising
private company holdings through sales to a wide range of financial
and trade buyers, and this trend is expected to continue as the
portfolio expands every year. The Board and Manager believe that is
the optimum strategy in support of the target dividend level for
Shareholders, which has been exceeded in the last year.
Graham Miller
Chairman
23 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. Maven Capital Partners UK LLP
(Maven or the Manager) was appointed in February 2011 with a view
to applying a new investment policy, as set out below.
Business Model and Investment Policy
Under an investment policy approved by the Directors, the
Company intends to achieve its objective by:
-- investing the majority of its funds in a diversified
portfolio of shares and securities in smaller, unquoted UK
companies and AIM/AQSE quoted companies which 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. The
Board has no intention of approving any borrowing at this time.
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
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 current 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 early stage,
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 economic sectors;
-- actively and closely monitoring the progress of investee companies;
-- co-investing with other clients of Maven, other VCT managers,
and/or other co-investor 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 appropriate skills, experience and resources required to
achieve the Investment Objective above, 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. The failure of a
significant outsourcer resulting in an inability to provide
services to the Company or Shareholders and the risk of
misappropriation of funds or assets belonging to the Company are
considered to be ongoing operational risks. These are mitigated by
robust systems and controls, which include close and careful
oversight by the Manager and the Board.
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 a
serious breach of other regulations such as the FCA Listing Rules
and the Companies Act 2006; 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 2006, 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.
The AIFMD, which regulates the management of alternative
investment funds, including VCTs, introduced a new 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 only 5% of Shareholders now
receiving printed reports.
The Board is aware that the Manager has increased its efforts in
relation to the identification of environmental risks and
opportunities facing investee companies, and has developed 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.
Generally, VCTs are regarded as supporting small and medium
sized enterprises which, in turn, helps create local employment
opportunities across a range of geographical areas in the UK.
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, to ensure that any risks arising are
mitigated as effectively as possible.
Ukraine
The conflict in Ukraine and the global response has resulted in
disruptions to international supply chains, inflationary pressure
on prices and general market uncertainty . In addition, it is
acknowledged that there is an increased cyber security risk and the
Manager is taking steps to mitigate this risk, including the
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. If required, additional training is then arranged.
Management Risk
The Directors are aware of the risk that investment
opportunities 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 from the Manager's
controls that have been updated to ensure compliance with the
Senior Managers and Certification Regime.
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 takes reassurance from 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 consistent with the active liquidity
management policy, also has the ability to hold certain listed
investment trusts prior to any investment in new or follow-on
investment opportunities. The Company has only limited direct
exposure to currency risk and does not enter into any derivative
transactions.
Economic Risk
The valuation of investment companies may be affected by
underlying economic conditions such as 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 the Annual Report, and in the
Chairman's Statement and the Investment Manager's Review. A review
of the Company's business, its financial 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 VCT
qualifying investment 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 GBP693,000 (2021: GBP8,432,000), gains on investments
were GBP2,082,000 (2021: GBP9,624,000) and earnings per share were
0.39p (2021: 5.24p). The Directors also consider a number of 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 History table and definitions of the APMs
can be found in the Glossary in the Annual Report. In addition, the
Board considers the following to be KPIs:
-- NAV total return;
-- cumulative dividends paid;
-- share price discount to NAV;
-- share price total return; and
-- operational expenses.
The NAV total return is the principal measure of Shareholder
value as it includes both the current NAV per share and the sum of
dividends paid to date. Cumulative dividends paid is the total
amount of both capital and income distributions paid since the
launch of the Company. 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 share price of an investment is lower than the
NAV per share. Share price total return is the percentage movement
in the share price over a period of time including any re-invested
dividends paid over that timeframe. A historical record of these
measures is shown in the Financial Highlights in the Annual Report,
and the profile of the portfolio is reflected in the Summary of
Investment Changes in the Annual Report. The Board also reviews the
Company's operational expenses on a quarterly basis as the
Directors consider that this element is an important component in
the generation of Shareholder returns. Further information can be
found in Notes 2 and 4 to the Financial Statements in the Annual
Report.
Your Board continues to believe that a blended portfolio of
private equity and AIM quoted holdings provides the optimal
structure for delivering long term growth in Shareholder value,
however, the Manager will remain cautious on any new AIM
investments until there is clear evidence of a recovery in this
market and an improvement in the quality and range of companies
seeking VCT investment.
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
the Company's ranking within the VCT sector.
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 5 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 quoted or traded on a recognised stock
exchange, including AIM, are valued at their closing bid price at
the year end.
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 discussions
and decision making during the year. This has been summarised in
the table below:
Form of engagement Influence on Board decision making
Shareholders Dividend declarations - the Board recognises
AGM - Shareholders are encouraged the importance of tax free dividends to Shareholders
to attend the AGM and are and takes this into consideration when making
provided with the opportunity decisions to pay interim and propose final dividends
to ask questions and engage for each year. Further details regarding dividends
with the Directors and the for the year under review, and the dividend policy,
Manager. Shareholders are can be found in the Chairman's Statement.
also encouraged to exercise Share buy-back policy - the Directors recognise
their right to vote on the the importance to Shareholders of the Company
resolutions proposed at maintaining an active buy-back policy. During
the AGM. the year, the Directors reviewed and agreed to
Shareholder documents - revise the current policy with the intention
the Company reports formally that future share buy backs would be conducted
to Shareholders by publishing with a view to maintaining a share price discount
Annual and Interim Reports, that is approximately 5% below the latest published
normally in March and July NAV per share. Further details can be found in
each year. In the instance the Chairman's Statement and in the Directors'
of a corporate action taking Report in the Annual Report.
place, the Board will communicate Offers for Subscription - in making the decision
with Shareholders through to launch the current Offer for Subscription,
the issue of a Circular the Directors considered that it would be in
and, if required, a Prospectus. the interest of Shareholders to continue to grow
In addition, significant the portfolio and make investments across a diverse
matters or reporting obligations range of sectors. By growing the Company, costs
are disseminated to Shareholders are spread over a wider asset base, which helps
by way of London Stock Exchange to promote a competitive total expense ratio,
Announcements. which is in the interests of Shareholders. In
The Secretary acts as a addition, the increased liquidity helps support
key point of contact for the buy-back policy referred to above. Further
the Board and communications details regarding the current Offer for Subscription
received from Shareholders can be found in the Chairman's Statement.
are circulated to the whole Liquidity management - in order to generate income
Board. 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 investment. 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 are aware of their
The Directors and the Manager duty to act in the interests of the Company and
take account of the social, acknowledge that there are risks associated with
environmental and ethical investment in companies that fail to conduct
factors impacted by the business in a socially responsible manner. The
Company and the investments Manager's ESG assessment of investee companies
that it makes. focuses 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, the Investment Manager's Review and
in the Statement of Corporate Governance in the
Annual Report.
----------------------------------------------------------
Portfolio companies The Directors are aware that the exercise of
Quarterly Board Meetings voting rights is key to promoting good corporate
- the Manager reports to governance and, through the Manager, ensures
the Board on the performance that the portfolio companies are encouraged to
of portfolio companies, adopt best practice corporate governance. The
in particular, on the private Board has delegated the responsibility for monitoring
companies, and the Directors the portfolio companies to the Manager and has
challenge the Manager if given it discretion to vote in respect of the
they feel it is appropriate. Company's holdings in the investment portfolio,
The Manager then communicates in a way that reflects the concerns and key governance
directly with each private matters discussed by the Board. From time to
investee company, normally time, the management teams of the private investee
through the Maven representative companies give presentations to the Board.
who sits on The Board is also mindful that, as the portfolio
its board. expands and the proportion of early stage investment
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.
----------------------------------------------------------
Manager The Manager is responsible for implementing the
Quarterly Board Meetings investment objective and the strategy agreed
- the Manager attends every by the Board. In making a decision to launch
Board Meeting and presents any Offer for Subscription, the Board needs to
a detailed portfolio analysis consider that the Company requires to have sufficient
and reports on key issues liquidity to continue to expand and broaden the
such as VCT compliance, investment portfolio in line with the strategy,
investment pipeline and including the provision of follow-on funding,
utilisation of any new monies as referred to above.
raised.
----------------------------------------------------------
Registrar The Directors review the performance of all third
Annual review meetings and party service providers on an annual basis, including
control reports. ensuring compliance with GDPR.
----------------------------------------------------------
Custodian The Directors review the performance of all third
Regular statements and control party providers on an annual basis, including
reports received, with all oversight of securing the Company's assets.
holdings and balances reconciled.
----------------------------------------------------------
Employee, Environmental and Human Rights Policy
The Company has no direct employee or environmental
responsibilities, nor is it directly responsible 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. The Company has no employees and,
accordingly, has no requirement to report separately on employment
matters. The Board comprises three 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 and further information can be found in the Investment
Manager's Review and in the Statement of Corporate Governance in
the Annual Report. The Manager has continued with its focus on
developing its ESG framework and oversight capabilities. Further
details on the Manager's approach to ESG and the progress made with
developing its ESG framework can be found in the Chairman's
Statement in the Annual Report. The Manager will be overseeing the
collation of this information for the benefit of the Board but will
also be supporting individual companies to identify ESG risks and
opportunities and, where potential improvements are identified,
will work jointly with investee businesses to make positive
changes.
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:
Graham Miller
Director
23 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
------------------------------------------- -------- -------- -------- -------- -------- --------
Gains on investments - 2,082 2,082 - 9,624 9,624
Income from investments 514 - 514 516 - 516
Other income 60 - 60 3 - 3
Investment management fees (369) (1,109) (1,478) (324) (972) (1,296)
Other expenses (485) - (485) (415) - (415)
------------------------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary activities
before taxation (280) 973 693 (220) 8,652 8,432
Tax on ordinary activities - - - - - -
------------------------------------------- -------- -------- -------- -------- -------- --------
Return attributable to Equity Shareholders (280) 973 693 (220) 8,652 8,432
------------------------------------------- -------- -------- -------- -------- -------- --------
Earnings per share (pence) (0.16) 0.55 0.39 (0.14) 5.38 5.24
------------------------------------------- -------- -------- -------- -------- -------- --------
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 AIC. 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 17,635 14,527 484 6,543 1,720 29,308 (1,454) 68,763
Net return - - - (6,139) 8,221 (1,109) (280) 693
Dividends paid - - - - - (7,022) - (7,022)
Repurchase and
cancellation
of shares (207) - 207 - - (729) - (729)
Net proceeds of DIS
issue* 210 536 - - - - - 746
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2022 17,638 15,063 691 404 9,941 20,448 (1,734) 62,451
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
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 12,405 21 218 (3,095) 1,734 35,087 (1,234) 45,136
Net return - - - 9,638 (14) (972) (220) 8,432
Dividends paid - - - - - (3,874) - (3,874)
Repurchase and
cancellation of shares (266) - 266 - - (933) - (933)
Net proceeds of share
issue 5,381 14,210 - - - - - 19,591
Net proceeds of DIS
issue* 115 296 - - - - - 411
----------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2021 17,635 14,527 484 6,543 1,720 29,308 (1,454) 68,763
----------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
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 in 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.
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 43,090 46,313
Current assets
Debtors 602 436
Cash 19,303 22,434
----------------------------------------- ---------------- ----------------
19,905 22,870
Creditors
Amounts falling due within one year (544) (420)
----------------------------------------- ---------------- ----------------
Net current assets 19,361 22,450
----------------------------------------- ---------------- ----------------
Net assets 62,451 68,763
----------------------------------------- ---------------- ----------------
Capital and reserves
Called up share capital 17,638 17,635
Share premium account 15,063 14,527
Capital redemption reserve 691 484
Capital reserve - unrealised 404 6,543
Capital reserve - realised 9,941 1,720
Special distributable reserve 20,448 29,308
Revenue reserve (1,734) (1,454)
----------------------------------------- ---------------- ----------------
Net assets attributable to Ordinary
Shareholders 62,451 68,763
----------------------------------------- ---------------- ----------------
Net asset value per Ordinary Share
(pence) 35.40 38.99
----------------------------------------- ---------------- ----------------
The Financial Statements of Maven Income and Growth VCT 5 PLC,
registered number 04084875, were approved and authorised for issue
by the Board of Directors on 23 March 2023 and were signed on its
behalf by:
Graham Miller
Director
23 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 (1,357) (1,042)
Cash flows from investing activities
Purchase of investments (10,715) (8,067)
Sale of investments 15,946 4,885
----------------------------------------- ----------------- -----------------
Net cash flows from investing activities 5,231 (3,182)
----------------------------------------- ----------------- -----------------
Cash flows from financing activities
Equity dividends paid (7,022) (3,874)
Issue of Ordinary Shares 746 20,002
Repurchase of Ordinary Shares (729) (1,013)
----------------------------------------- ----------------- -----------------
Net cash flows from financing activities (7,005) 15,115
----------------------------------------- ----------------- -----------------
Net (decrease)/increase in cash (3,131) 10,891
----------------------------------------- ----------------- -----------------
Cash at beginning of year 22,434 11,543
Cash at end of year 19,303 22,434
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
and Wales and its registered office is shown in the Corporate
Summary in the Annual Report.
(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 GBP57,476 (2021: GBP34,303) 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 which 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
25% to revenue and 75% 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 which are capable of reversal in one or more
subsequent periods.
Deferred tax is measured on a non-discounted basis at the tax
rates that are expected to apply in the periods in which timing
differences are expected to reverse, based on tax rates and laws
enacted or substantively enacted at the balance sheet date.
The tax effect of different items of income/gain and
expenditure/loss is allocated between capital reserves and revenue
account on the same basis as the particular item to which it
relates using the Company's effective rate of tax for the
period.
UK Corporation tax is provided at amounts expected to be
paid/recovered using the tax rates and laws that have been enacted
or substantively enacted at the balance sheet date.
(e) Investments
In valuing unlisted investments, the Directors follow the
criteria set out below. These procedures comply with the revised
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 during 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
portfolio management team of Maven. 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 the AIM or a recognised stock exchange are valued at their
closing 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.
-- 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 Notes 8
and 16 in the Annual Report and explained in Note 1(e).
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 176,072,463 160,814,292
Revenue return (GBP280,000) (GBP220,000)
Capital return GBP973,000 GBP8,652,000
------------------------------------------- ----------------- -----------------
Total return GBP693,000 GBP8,432,000
------------------------------------------- ----------------- -----------------
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 as
at that date of: 176,391,734 Ordinary Shares (2021: 176,361,696
Ordinary Shares).
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 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 Tuesday, 25 April
2023, commencing at 11.30am, at the offices of Maven Capital
Partners UK LLP, Kintyre House, 205 West George Street, Glasgow G2
2LW.
Copies of this announcement and copies of the Annual Report and
Financial Statements for the year ended 30 November 2022, will be
available to the public at the offices of Maven Capital Partners UK
LLP, Kintyre House, 205 West George Street, Glasgow G2 2LW; at the
registered office of the Company, Fifth Floor, 1-2 Royal Exchange
Buildings, London EC3V 3LF; and on the Company's website at
www.mavencp.com/migvct5.
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.
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 2022 Annual Report will be submitted to the National Storage
Mechanism and will be available for inspection at:
www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.
By order of the Board
Maven Capital Partners UK LLP
Secretary
23 March 2023
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END
FR UOABROVUOUAR
(END) Dow Jones Newswires
March 23, 2023 13:18 ET (17:18 GMT)
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