Maven IncGwth VCT 3 - Annual Financial Report
14/03/2023 16:31
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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
• £16.1 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 £10 million (including an overallotment facility for up
to £5 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 £16.1 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 £5
million, with the ability to make use of an over-allotment facility of up to a
further £5 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, £5.2 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
(http://www.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 £20 million in aggregate
(£10 million for each company) with combined over-allotment facilities of up
to £20 million (£10 million for each company). Your Company's Offer closed
on 27 May 2022 having raised a total of £16.1 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 £40 million in aggregate,
inclusive of over-allotment facilities for up to £10 million in aggregate,
for the 2022/23 and 2023/24 tax years. Your Company has an initial target
raise of £5 million, with the ability to use an over-allotment facility of up
to a further £5 million. As at the date of this Annual Report, your Company
has raised a total of £5.2 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 £60 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 £1.25 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 £456,000 (2021: a profit of £6,731,000), the gain on investments was
£626,000 (2021: £8,550,000) 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 encouraged to attend the AGM and are provided with the Dividend declarations - the Board recognises the importance of tax free
opportunity to ask questions and engage with the Directors and the Manager. dividends to Shareholders and takes this into consideration when making
Shareholders are also encouraged to exercise their right to vote on the decisions to pay interim and propose final dividends for each year. Further
resolutions proposed at the AGM. details regarding dividends for the year under review can be found in the
Chairman's Statement.
Shareholder documents - the Company reports formally to Shareholders by
publishing Annual and Interim Reports, normally in March and July each year. Share buy-back policy - the Directors recognise the importance to Shareholders
In the instance of a corporate action taking place, the Board will communicate of the Company maintaining an active buy-back policy and considered this when
with Shareholders through the issue of a Circular and, if required, a establishing the current programme. Further details can be found in the
Prospectus. Chairman's Statement and in the Directors' Report in the Annual Report.
In addition, significant matters or reporting obligations are disseminated to Offers for Subscription - in making the decision to launch the current Offer
Shareholders by way of London Stock Exchange Announcements. for Subscription, the Directors considered that it would be in the interest of
Shareholders to continue to grow the portfolio and make investments across a
diverse range of sectors. By growing the Company, costs are spread over a
wider asset base, which helps to promote a competitive total expense ratio,
The Secretary acts as a point of contact for the Board and communications which is in the interests of Shareholders. In addition, the increased
received from Shareholders are circulated to the whole Board. liquidity helps support the buy-back policy referred to above. Further details
regarding the current Offers for Subscription can be found in the Chairman's
Statement.
Liquidity management - in order to generate income and add value for
Shareholders, the Board has an active liquidity management policy, which has
the objective of generating income from the cash held prior to deployment in
VCT qualifying investments. Further details regarding the liquidity management
policy can be found in the Investment Manager's Review in the Annual Report.
ENVIRONMENT AND SOCIETY
The Directors and the Manager take account of the social, environmental and The Directors and the Manager are aware of their duty to act in the interests
ethical factors impacted by the Company and the investments that it makes. of the Company and acknowledge that there are risks associated with investment
in companies that fail to conduct business in a socially responsible manner.
The Manager's ESG assessment of investee companies focuses heavily on their
impact on 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 Manager reports to the Board on the performance The Directors are aware that the exercise of voting rights is key to promoting
of portfolio companies, in particular on the private investee companies, and good corporate governance and, through the Manager, ensures that the portfolio
the Directors challenge the Manager where they feel it is appropriate. companies are encouraged to adopt best practice corporate governance. The
Board has delegated the responsibility for monitoring the portfolio companies
to the Manager and has given it discretion to vote in respect of the Company's
holdings in the investment portfolio, in a way that reflects the concerns and
The Manager then communicates directly with each private investee company, key governance matters discussed by the Board.
normally through the Maven representative who sits on the board of the private
investee company.
The Board is also mindful that, as the portfolio 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.
From time to time, the management teams of investee companies give
presentations to the Board.
MANAGER
Quarterly Board Meetings - the Manager attends every Board Meeting, presenting The Manager is responsible for implementing the investment objective and the
a detailed portfolio analysis and reports on key issues such as VCT strategy agreed by the Board. In making a decision to launch any Offer for
compliance, investment pipeline and utilisation of any new monies raised. Subscription, the Board needs to consider that the Company requires to have
sufficient liquidity to continue to expand and broaden the investment
portfolio in line with the strategy, including the provision of follow-on
funding, as referred to above.
REGISTRAR
Annual review meetings and control reports. The Directors review the performance of all third party service providers on
an annual basis, including ensuring compliance with GDPR.
CUSTODIAN
Regular statements and control reports received, with all holdings and The Directors review the performance of all third party providers on an annual
balances reconciled. basis, including oversight of securing the Company's assets.
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
£'000 £'000 £'000 £'000 £'000 £'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) (0.50) (0.47) (0.05)
0.03 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 Share premium account Capital redemption reserve Capital reserve unrealised Capital reserve realised Special distributable reserve Revenue reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'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 (59) - 59 - - (328) - (328)
of shares
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 Share premium account Capital redemption reserve Capital reserve unrealised Capital reserve realised Special distributable reserve Revenue reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'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 (134) - 134 - - (753) - (753)
of shares
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
£'000 £'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
£'000 £'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 £83,433 (2021: £38,805) 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 £29,000 (£43,000)
Capital return (£485,000) £6,774,000
Total return (£456,000) £6,731,000
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
(http://www.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
(http://www.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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