REG - MavIncGroVCT4 MavIncGroVCT4. - Annual Financial Report
13/04/2023 07:00
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RNS Number : 0367W Maven Income & Growth VCT 4 PLC 13 April 2023
Maven Income and Growth VCT 4 PLC
Final results for the year ended 31 December 2022
The Directors report the Company's financial results for the year ended 31
December 2022
Highlights for the year
· NAV total return at the year end of 155.90p per share (2021:
157.48p)
· NAV at the year end of 68.30p per share (2021: 74.88p), after
total dividend payments of 5.00p per share during the year
· Interim dividend of 2.00p per share paid in October 2022
· Final dividend of 1.75p per share proposed for payment in May
2023
· £16 million of capital raised for the 2021/22 and 2022/23 tax
years
· New Offer for Subscription launched to raise up to £10 million
(including an over-allotment facility for up to £5 million) alongside Offers
by the other Maven VCTs
Chairman's Statement
On behalf of your Board, I am pleased to present the Annual Report for the
first time as Chairman. Whilst the financial year has been a challenging
period, dominated by geopolitical instability and an uncertain macroeconomic
outlook, it is encouraging to report on the creditable performance that has
been achieved by your Company. There has been meaningful progress across the
unlisted portfolio, where an increasing number of companies have reported
revenue growth and achieved commercial milestones which, in certain cases, has
resulted in uplifts to valuations. This positive progress has, however, been
offset by the weaker performance of AIM, where the value of your Company's
portfolio, has been impacted by the volatility within financial markets that
has persisted throughout the year. Notwithstanding the wider market
conditions, in May 2022 there was a notable development when AIM quoted
Ideagen received an all cash offer at a 52% premium to the underlying share
price, with the exit generating a total return of 9.0x cost over the holding
period. In addition, there has been a good level of realisation activity
within the private company portfolio, with the completion of five profitable
exits. Further to these realisations, and consistent with the commitment to
make regular Shareholder distributions, the Directors are proposing a final
dividend of 1.75p per share, which has enabled your Company to achieve its
annual distribution target.
Overview
Throughout the financial year, the economic backdrop has remained uncertain.
Whilst the impact of the COVID-19 pandemic significantly reduced during the
early part of the year, the anticipated economic recovery was short lived as
attention was swiftly diverted to Eastern Europe, following the invasion of
Ukraine by Russia. The war has had wide reaching economic consequences,
including acting as the catalyst to the sharp rise in global energy prices and
the widespread disruption to international supply chains. In the UK, the
energy price shock contributed to the current high level of inflation and the
cost of living crisis which, alongside rising interest rates, created a
challenging situation for many consumers and businesses during 2022.
It is, however, encouraging to report on the resilient performance that has
been achieved by your Company during the financial year. This reflects the
consistent application of the investment strategy, which has been in place for
a number of years and has the core objective of building a large and
sectorally diversified portfolio of high growth private and AIM quoted
companies that operate across a broad range of end user markets, and which are
capable of achieving scale and generating a capital gain on exit. During the
year, the Manager continued to see good levels of demand for growth capital
from ambitious and entrepreneurial private companies, and completed 11 new
investments, with follow-on funding also provided to support those companies
that are achieving commercial targets and require additional capital to fully
scale prior to securing an exit. The Board believes that Maven remains well
placed to continue to source and execute high quality VCT qualifying
investments, to ensure that your Company maintains a good rate of investment
in the new financial year.
Following the success of the 2021/22 fundraising, which closed in May 2022
having raised £16 million, the Directors were pleased to launch a new Offer
for Subscription for the 2022/23 and 2023/24 tax years alongside Offers by the
other Maven managed VCTs. As part of the Offers, your Company has an initial
target raise of £5 million, with the ability to utilise an over-allotment
facility of up to a further £5 million which, as announced on 16 February
2023, the Directors resolved to utilise. It is encouraging to report that, at
the time of writing, £6.4 million has been raised by your Company. The
Directors would like to remind Shareholders that the Offers will remain open
until 26 May 2023 for the 2023/24 tax year, unless fully subscribed ahead of
this date. Further information about the Offers can be found at:
mavencp.com/vctoffer. With respect to future fund raising, the Board and the
Manager welcomed the announcement by the UK Government in September 2022 that
tax relief for VCT and EIS schemes would continue beyond 2025. The news that
the period covered by the "sunset clause" will be extended, removes
uncertainty for investors and allows entrepreneurial SMEs to continue to
access this important source of growth capital.
Notwithstanding the challenging economic backdrop, during the year there has
been further positive progress across the early stage unlisted portfolio, with
the majority of companies continuing to deliver growth and achieve their
strategic objectives which, in certain cases, has resulted in valuation
uplifts. Your Company also benefits from a portfolio of later stage private
companies, completed prior to the change in VCT rules, and these more mature
holdings help to counterbalance the higher risk associated with earlier stage
growth companies. This generally good performance has, however, been offset by
the volatility that has affected financial markets during the year, and which
has impacted the value of your Company's AIM quoted portfolio where share
prices have declined in response to negative investor sentiment. There has
also been limited IPO and new share issuance activity across AIM and, whilst
the Manager has reviewed various opportunities, they have not been of
sufficient quality to warrant participation. Whilst your Board continues to
believe that a hybrid private equity and AIM quoted portfolio provides the
optimal approach to deliver long term growth in Shareholder value, the Manager
will remain cautious on any new AIM investments until there is clear evidence
of a market recovery and an improvement in the quality and range of companies
seeking VCT investment.
The commitment to make regular tax free distributions remains a priority and,
as Shareholders will be aware, achieving portfolio realisations is central to
this objective. It is, therefore, encouraging to report that during the period
five profitable private company exits were completed, alongside the
realisation of your Company's holding in AIM quoted Ideagen, which received an
all cash offer at a 52% premium to the underlying share price. This exit
generated almost £1.6 million in cash proceeds and a total return of 9.0x
cost over the life of the investment. Whilst the timing of exits is hard to
predict, particularly in the current environment, the Directors remain
optimistic that further profitable exits can be achieved in the year ahead.
Shareholders will find full details of the developments across the portfolio
in the Investment Manager's Review in the Annual Report. This includes details
on the new investments and realisations that have been completed, as well as
updates on the companies that have delivered a positive performance, alongside
the small number of cases where valuations have been reduced or fully written
down. In addition, details of the principal Key Performance Indicators (KPIs)
can be found in the Business Report and a summary of the Alternative
Performance Measures (APMs) can be found in the Financial Highlights in the
Annual Report.
Dividend Policy
As Shareholders will be aware from recent Interim and Annual Reports,
decisions on distributions take into consideration several factors, including
the realisation of capital gains, the adequacy of distributable reserves, the
availability of surplus revenue and the VCT qualifying level, all of which are
kept under close and regular review.
The Board and the Manager recognise the importance of tax free distributions
to Shareholders and, subject to the considerations outlined above, will seek,
as a guide, to pay an annual dividend that represents 5% of the NAV per share
at the immediately preceding year end.
The Directors would like to remind Shareholders that, as the portfolio
continues to expand and a greater proportion of holdings are in younger
companies, potentially increasing volatility, the timing of distributions will
be closely linked to realisation activity, whilst also reflecting the
Company's requirement to maintain its VCT qualifying level. If larger
distributions are required as a consequence of significant exits, this may
result in a corresponding reduction in the NAV per share of the Company.
However, your Board considers this to be a tax efficient means of returning
value to Shareholders, whilst ensuring ongoing compliance with the VCT
legislation.
Proposed Final Dividend
Your Board is pleased to propose that a final dividend of 1.75p per Ordinary
Share, in respect of the year ended 31 December 2022, will be paid on 23 May
2023 to Shareholders on the register at 21 April 2023. This will bring total
distributions for the financial year to 3.75p per Ordinary Share, representing
a yield of 5.01% based on the NAV at the immediately preceding year end of
74.88p per share. Since the Company's launch, and after receipt of the
proposed final dividend, Shareholders will have received a total of 89.35p per
share in tax free distributions.
Dividend Investment Scheme (DIS)
Your Company operates a DIS, through which Shareholders can, at any time,
elect to have their dividend payments utilised to subscribe for new Ordinary
Shares issued by the Company under the standing authority requested from
Shareholders at Annual General Meetings. Shares issued under the DIS should
qualify for VCT tax relief applicable for the tax year in which they are
allotted, subject to an individual Shareholder's particular circumstances.
Shareholders can elect to participate in the DIS in respect of future
dividends, by completing a DIS mandate. In order for the DIS to apply to the
final dividend that is due to be paid on 23 May 2023, the mandate form must be
received by the Registrar (The City Partnership) before 9 May 2023, this being
the relevant dividend election date. The mandate form, terms & conditions
and full details of the scheme (including tax considerations) are available
from the Company's website at: mavencp.com/migvct4. Election to participate in
the DIS can also be made through the Registrar's online investor hub at:
maven-cp.cityhub.uk.com/login.
If a Shareholder is in any doubt about the merits of participating in the DIS,
or their own tax status, they should seek advice from a suitably qualified
adviser.
Fund Raising and Allotment
As detailed in the 2022 Interim Report, on 20 September 2021, your Company
launched joint Offers for Subscription for new Ordinary Shares, alongside
Maven Income and Growth VCT 3 PLC, to raise up to £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 million for the 2021/22 and
2022/23 tax years.
With respect to the 2021/22 tax year, there were three allotments of new
Ordinary Shares. An allotment of 11,772,141 new Ordinary Shares completed on 4
February 2022, with a further allotment of 3,334,456 new Ordinary Shares on 23
March 2022 and a final allotment of 4,184,073 new Ordinary Shares on 5 April
2022. An allotment of 2,282,396 new Ordinary Shares for the 2022/23 tax year
completed on 6 June 2022.
Current Offers for Subscription
On 7 October 2022, alongside Maven Income and Growth VCT PLC, Maven Income and
Growth VCT 3 PLC and Maven Income and Growth VCT 5 PLC, your Company launched
Offers for Subscription for up to £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 an over-allotment facility of up to a further £5 million which,
further to the announcement of 16 February 2023 the Directors have resolved to
utilise. As at the date of the Annual Report, your Company has raised a total
of £6.4 million.
With respect to the 2022/23 tax year, an allotment of 5,035,459 new Ordinary
Shares completed on 8 February 2023, with a further allotment of 495,482 new
Ordinary Shares completing on 3 March 2023. A final allotment of 2,639,725 new
Ordinary Shares for the 2022/23 tax year completed on 5 April 2023. The Offers
will close on 26 May 2023, unless a particular Offer is fully subscribed ahead
of this date, and an allotment for the 2023/24 tax year will take place after
the Offers have closed.
Further details regarding the new Ordinary Shares issued under the Offers for
Subscription can be found in Note 12 to the Financial Statements in the Annual
Report.
The Directors are confident that Maven's regional office network has the
capacity and capability to continue to source attractive investment
opportunities in VCT qualifying companies across a range of sectors, and that
the additional liquidity provided by the fundraising will facilitate the
further expansion and development of the portfolio in line with the investment
strategy. Furthermore, the funds raised will allow your Company to maintain
its share buy-back policy, whilst also spreading costs over a wider asset base
with the objective of maintaining a competitive total expense ratio for the
benefit of all Shareholders.
Share Buy-backs
Shareholders will be aware that a primary objective of the Board is to ensure
that the Company retains sufficient liquidity for making investments in line
with its stated policy, and for the continued payment of dividends. However,
the Directors also acknowledge the need to maintain an orderly market in the
Company's shares and have, therefore, delegated authority to the Manager for
the Company to buy back its own shares in the secondary market, for
cancellation or to be held in treasury, subject always to such transactions
being in the best interests of Shareholders.
It is intended that the Company should seek to maintain a share price discount
that is approximately 5% below the latest published NAV per share, subject to
market conditions, availability liquidity and the maintenance of the Company's
VCT qualifying status.
Shareholders should be aware that neither the Company nor the Manager can
execute a direct transaction in the Company's shares. Any instruction to buy
or sell shares on the secondary market must be conducted through a
stockbroker. If a Shareholder wishes to buy or sell shares on the secondary
market, they or their broker can contact the Company's corporate broker, Shore
Capital Stockbrokers on 020 7647 8132, to discuss a transaction. It should,
however, be noted that such transactions cannot take place whilst the Company
is in a closed period, which is the time from the end of a reporting period
(quarter end, half year or full year) until the announcement of the relevant
results, or the release of an unaudited NAV. A closed period may also be
introduced if the Directors and Manager are in possession of price sensitive
information that may restrict the Company's ability to buy back shares.
VCT Regulatory Developments
During the period under review, there were no further amendments to the rules
governing VCTs. Shareholders may, however, be aware that under the VCT scheme
approved by the European Commission in 2015, a "sunset clause" was introduced,
which stated that income tax relief would no longer be available on
subscriptions for new shares in VCTs made on or after 6 April 2025 unless the
legislation was renewed by an HM Treasury order. During the financial year,
there has been a considerable level of activity by industry participants,
including The Association of Investment Companies (AIC), of which the Company
is a member, and the Venture Capital Trust Association (VCTA), of which the
Manager is an active member, to demonstrate the important role of VCT
investment in supporting ambitious SMEs and stimulating economic growth and
regional employment. It is, therefore, encouraging to report that the UK
Government has committed to extend the income tax relief available on new VCT
shares beyond 2025, as confirmed by the Chancellor in the Autumn 2022 budget
statement, with this reaffirmed in the recent Spring 2023 budget. The Manager
will remain actively involved in discussions regarding the process for
implementing this extension.
Consistent with industry best practice, the Board and the Manager continue to
apply the International Private Equity and Venture Capital Valuation (IPEV)
Guidelines as the central methodology for all private company valuations. The
IPEV Guidelines are the prevailing framework for fair value information in the
private equity and venture capital industry. Following the invasion of Ukraine
in February 2022, IPEV reiterated the Special Guidance provided in March 2020
at the outbreak of the COVID-19 pandemic in the UK, with respect to assessing
the fair value of private company holdings. The Directors and the Manager
continue to follow industry guidelines and adhere to the IPEV Special
Guidelines in all private company valuations.
Environmental, Social and Governance (ESG) Considerations
The Board and the Manager acknowledge the importance of ESG principles and
consider that those portfolio companies that have ESG aims integrated into
their business model benefit both society and Shareholders. The Board and the
Manager believe that there is an interconnectivity between profit and purpose,
and that strong ESG credentials can give companies a competitive edge.
The Board is pleased to report on the continued focus by the Manager in
developing its ESG framework and oversight capabilities. In order to assist
this process, Maven has partnered with a specialist software provider to
enhance its ability to track, analyse and report key ESG information across
the portfolio. The Manager is in the process of standardising its internal
metrics, which will be measured from year to year with the intention of
reducing carbon footprint and improving key governance and social metrics.
The Manager has a comprehensive ESG policy in place, which is ingrained within
the investment process as a standard part of due diligence for any new
investment. A number of investee companies are already very focused on the
environment or making improvements to society and local communities and have
set themselves specific ESG related goals. Where this is not the case, the
Manager is able to support and advise on the value of improving these metrics
and all investee companies are required to include ESG as a standing board
agenda item to encourage regular dialogue on the topic.
In May 2021, the Manager became a signatory to the internationally recognised
Principles for Responsible Investment, demonstrating its commitment to include
ESG as an integral part of its investment decision making and ownership. The
Manager has also become a signatory to the Investing in Women Code, which aims
to improve female entrepreneurs' access to tools, resources and finance,
supporting diversity and inclusion in access to finance.
Although neither the Company nor the Manager are currently required to
disclose climate related financial information in line with the Task Force on
Climate-related Financial Disclosures (TCFD), they recognise the aim and
importance of the TCFD recommendations to provide a foundation to improve
investors' ability to appropriately assess climate-related risks and
opportunities. Disclosing information against the TCFD recommendations remains
an objective of the Manager as part of its ESG initiatives, and progress will
be monitored by the Directors.
The Board is aware of the significant steps that are being taken by the
Manager to assess ESG capability and support ongoing dialogue with investee
companies, with the aim of improving ESG metrics over the period that your
Company is invested. However, the Board wishes to remind Shareholders that
your Company's investment policy does not incorporate specific ESG aims, and
investee companies are not required to meet any specific targets.
Shareholder Communications
Twice a year Maven publishes a VCT newsletter, Creating Value, which is issued
by email or post, and includes details of the new investments and realisations
that have been completed by the Maven VCTs, as well as updates about the VCT
portfolios and investee companies, and the launch of new Maven VCT Offers.
Shareholders wishing to receive this newsletter, and other VCT related
information, can register their email address with the Registrar, The City
Partnership, or subscribe through Maven's website.
Appointment of a New Auditor
Following a formal tender process, Johnston Carmichael LLP (Johnston
Carmichael) was appointed as the new Auditor to the Company with effect from 4
October 2022. Johnston Carmichael conducted the audit of the Financial
Statements for the financial year to 31 December 2022 and the Independent
Auditor's Report can be found in the Annual Report. Shareholders will be asked
to confirm the appointment of Johnston Carmichael at the forthcoming AGM.
Constitution of the Board
As noted in the 2022 Interim Report, it was with deep regret that, on 24 June
2022, the Board announced the passing of the then Chairman Peter Linthwaite,
following a prolonged illness. Peter became a Director of your Company
following its merger with Maven Income and Growth VCT 2 PLC in November 2018
and served as Chairman from May 2019. During his tenure, Peter made a
significant contribution to the growth and strategic development of your
Company, helping to grow its net asset value to over £85 million. The Board
and the Manager wish to record their gratitude for the considerable
contribution that Peter made to the Company during his period in office.
On 14 July 2022, the Board confirmed the appointment of Brian Colquhoun as an
Independent Non-executive Director with effect from 1 August 2022. Brian is a
Fellow of the Chartered Institute of Bankers in Scotland and spent more than
three decades at Clydesdale and Yorkshire Bank, working extensively with
smaller companies and management teams in supporting their growth ambitions.
Brian's biography can be found in the Your Board section of the Annual Report.
Brian chairs the Company's Risk Committee and serves on the Audit, Management
Engagement and Nomination Committees. Brian will stand for election by
Shareholders at the 2023 Annual General Meeting.
Annual General Meeting (AGM)
The 2023 AGM will be held in the Glasgow office of Maven Capital Partners UK
LLP at Kintyre House, 205 West George Street, Glasgow, G2 2LW on 11 May 2023,
commencing at 11.30am. The Notice of AGM can be found in the Annual Report.
The Future
With an improving domestic economic outlook, the Directors believe that your
Company is well positioned to deliver growth in the year ahead in line with
the long term investment objective. During 2022, the large and sectorally
diversified private company portfolio that has been constructed has proven its
ability to make positive progress and, whilst some companies are at a
relatively early stage of development, an increasing number are achieving
scale and demonstrating their ability to create significant Shareholder value.
Although the performance across AIM continues to be muted, financial markets
have historically displayed cyclical patterns and it is likely that a recovery
will commence once market conditions stabilise and investor sentiment
improves. In the year ahead, the focus will be to further expand and diversify
the portfolio through the addition of high quality growth companies whilst,
where possible, progressing exit opportunities to ensure that your Company can
maintain a programme of regular tax free Shareholder distributions.
Fraser Gray
Chairman
12 April 2023
Business Report
This Business Report is intended to provide an overview of the strategy and
business model of the Company, as well as the key measures used by the
Directors in overseeing its management. The Company is a VCT and invests in
accordance with the investment objective set out below.
Investment Objective
Under an investment policy approved by the Directors, the Company aims to
achieve long-term capital appreciation and generate income for Shareholders.
Business Model and Investment Policy
The Company intends to achieve its objective by:
• investing the majority of its funds in a diversified portfolio
of shares and securities in smaller, unquoted UK companies and AIM/AQSE quoted
companies that meet the criteria for VCT qualifying investments and have
strong growth potential;
• investing no more than £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 Risk Committee have an ongoing process for identifying,
evaluating and monitoring the principal and emerging risks and uncertainties
facing the Company. The risk register and dashboard form key parts of the
Company's risk management framework used to carry out a robust assessment of
the risks, including a significant focus on the controls in place to mitigate
them. The principal and emerging risks and uncertainties facing the Company
are considered to be as follows:
Investment Risk
The majority of the Company's investments are in small and medium sized
unquoted UK companies and AIM/ AQSE quoted companies which, by their nature,
carry a higher level of risk and lower liquidity than investments in large
quoted companies. The Board aims to limit the risk attached to the investment
portfolio as a whole by ensuring that a robust and structured selection,
monitoring and realisation process is applied by Maven. The Board reviews the
investment portfolio with the Manager on a regular basis.
The Company manages and minimises investment risk by:
• diversifying across a large number of companies;
• diversifying across a range of sectors;
• actively and closely monitoring the progress of investee
companies;
• co-investing with other clients of Maven, other VCT managers
and/or other co-investment partners;
• ensuring valuations of underlying investments are made fairly
and reasonably (see Notes to the Financial Statements 1(e), 1(f) and 16 for
further details);
• taking steps to ensure that the share price discount is managed
appropriately; and
• choosing and appointing an FCA authorised investment manager
with the skills, experience and resources required to achieve the investment
objective, with ongoing monitoring to ensure the Manager is performing in line
with expectations.
Operational Risk
The Board is aware of the heightened cyber security risk and potential
consequences of IT failure, particularly in relation to the increased
utilisation of remote working practices by the Manager and key third parties.
A cyber attack or systems failure not only has the potential to cause a third
party to fail to perform its duties and responsibilities in accordance with
the service level agreements that are in place, but could also result in it
encountering financial difficulties, such that it is unable to carry on
trading and cannot continue to provide services to the Company. The Board has
closely monitored the systems and controls in place to prevent or mitigate
against a systems or data security failure, and the overall effectiveness of
business continuity arrangements of the Manager and third parties.
VCT Qualifying Status Risk
The Company operates in a complex regulatory environment and faces a number of
related risks, including:
• becoming subject to capital gains tax on the sale of its
investments as a result of a breach of Section 274 of the Income Tax Act 2007;
• loss of VCT status and the consequent loss of tax reliefs
available to Shareholders as a result of a breach of the VCT Regulations;
• loss of VCT status and reputational damage as a result of a
serious breach of other regulations such as the FCA Listing Rules and the
Companies Act 2006; and
• increased investment restrictions resulting from EU State Aid
Rules, incorporated by the Finance (No. 2) Act 2015 and the Finance Act 2018.
The Board works closely with the Manager to ensure compliance with all
applicable and upcoming legislation, such that VCT qualifying status is
maintained. Further information on the management of this risk is detailed
under other headings in this Business Report.
Legislative and Regulatory Risk
The Directors strive to maintain a good understanding of the changing
regulatory agenda and consider emerging issues so that appropriate changes can
be implemented and developed in good time.
In order to maintain its approval as a VCT, the Company is required to comply
with current VCT legislation in the UK as well as the EU State Aid Rules.
Changes to either legislation could have an adverse impact on Shareholder
investment returns, whilst maintaining the Company's VCT status. The Board and
the Manager continue to make representations where appropriate, either
directly or through relevant industry bodies such as the AIC, the British
Private Equity & Venture Capital Association (BVCA) and the VCTA.
The Company has retained Philip Hare & Associates LLP as its principal VCT
adviser and also uses the services of a number of other VCT advisers on a
transactional basis.
Breaches of other regulations including, but not limited to, the Companies
Act, the FCA Listing Rules, the FCA Disclosure Guidance and Transparency
Rules, the General Data Protection Regulation (GDPR), and the Alternative
Investment Fund Managers Directive (AIFMD), could lead to a number of
detrimental outcomes and reputational damage. Breaches of controls by service
providers to the Company could also lead to reputational loss or damage.
The AIFMD, which regulates the management of alternative investment funds,
including VCTs, introduced an authorisation and supervisory regime for all
investment companies in the EU. The Company is a small registered, internally
managed alternative investment fund under the AIFMD, and its status as such is
unchanged as a result of the UK's departure from the EU.
The Company is also required to comply with tax legislation under the Foreign
Account Tax Compliance Act and the Common Reporting Standard. The Company has
appointed City Partnership to act on its behalf to report annually to HM
Revenue & Customs (HMRC) and ensure compliance with this legislation.
Climate Change and Social Responsibility Risk
The Board recognises that climate change is an important emerging risk that
all companies should take into consideration within their strategic planning.
As referred to elsewhere in this Strategic Report and in the Statement of
Corporate Governance, the Company has little direct impact on environmental
issues. However, the Company has introduced measures to reduce the cost and
environmental impact of the production and circulation of Shareholder
documentation such as the annual and interim reports. This has resulted in a
significant reduction in the number of copies being printed and posted, with
fewer than 6% of Shareholders now receiving paper reports.
The Board is aware that the Manager is increasing efforts in relation to the
identification of environmental risks and opportunities, and is developing its
ESG policy accordingly. Environmental risk is a fundamental aspect of due
diligence and industry specialists are assigned where there may be specific
concerns in relation to a potential business or sector. The results are then
factored into the decision making process for new investments.
VCTs in general are regarded as supporting SMEs, which helps to create local
employment opportunities across a range of UK geographical regions.
Ukraine
The conflict in Ukraine and the global response has resulted in disruptions to
international supply chains, inflationary pressures on prices and general
market uncertainty. It is also acknowledged that there is an increased cyber
security risk and the Manager is taking steps to mitigate this risk, including
oversight of third parties.
Other Key Risks
Governance Risk
The Directors are aware that an ineffective Board could have a negative impact
on the Company and its Shareholders. The Board recognises the importance of
effective leadership and board composition and this is ensured by completing
an annual evaluation process, with action being taken if required.
Management Risk
The Directors are aware of the risk that investment opportunities could fail
to complete, or the management of the VCT could breach the Management and
Administration Deed or regulatory parameters, due to lack of knowledge and/or
experience of the investment professionals acting on behalf of the Company. To
manage this risk, the Board has appointed Maven as investment manager, as it
employs skilled professionals with the required VCT knowledge and experience.
In addition, the Board takes comfort that the Manager's controls have been
updated to ensure compliance with the FCA's Senior Managers and Certification
Regime (SMCR).
The Directors are also mindful of the impact that the loss of the Manager's
key employees could have on both investment opportunities that may be lost or
existing investments that may fail. The Board is reassured by the Manager's
approach to incentivising staff and ensuring that adequate notice periods are
included in all contracts of employment.
Financial and Liquidity Risk
As most of the investments require a medium to long- term commitment and are
relatively illiquid, the Company retains a portion of the portfolio in cash
and listed investment trusts in order to finance any new or follow-on
investment opportunities. The Company has only limited direct exposure to
currency risk and does not enter into any derivative transactions.
Political Risk
Political changes that result in parties with extreme political or social
agendas having power or influence over policies could lead to instability and
uncertainty in the markets, legislation and the economy.
The Board reviews the political situation regularly, together with any
associated changes to the economic, regulatory and legislative environment, in
order to ensure that any risks are mitigated as effectively as possible.
Economic Risk
The valuation of investment companies may be affected by underlying economic
conditions such as rising interest rates and the availability of bank finance,
which can be impacted during times of geopolitical uncertainty and fluctuating
markets, including the impact of the current cost of living crisis and rising
interest rates currently being experienced in the UK. The economic and market
environment is kept under constant review and the investment strategy of the
Company is adapted so far as possible to mitigate emerging risks.
Credit Risk
The Company may hold financial instruments and cash deposits and is dependent
on counterparties discharging their agreed responsibilities. The Directors
consider the creditworthiness of the counterparties to such instruments and
seek to ensure that there is no undue concentration of exposure to any one
party.
An explanation of certain economic and financial risks and how they are
managed is contained in Note 16 to the Financial Statements.
Statement of Compliance with Investment Policy
The Company is adhering to its stated investment policy and managing the risks
arising from it. This can be seen in various tables and charts throughout the
Annual Report, and from information provided in the Chairman's Statement and
in the Investment Manager's Review. A review of the Company's business, its
financial position as at 31 December 2022 and its performance during the year
then ended is included in the Chairman's Statement, which also includes an
overview of the Company's business model and strategy.
The management of the investment portfolio has been delegated to Maven, which
also provides company secretarial, administrative and financial management
services to the Company. The Board is satisfied with the breadth and depth of
the Manager's resources and its nationwide network of offices, which supply
new deals and enable it to monitor the geographically widespread portfolio of
companies effectively.
The Investment Portfolio Summary in the Annual Report discloses the
investments in the portfolio and the degree of co-investment with other
clients of the Manager. The Portfolio Analysis charts in the Annual Report
show the profile of the portfolio by industry sector and asset class. They
also show the sectoral diversity of the portfolio and the hybrid structure,
which is balanced between private growth capital companies, more mature
private company holdings, and AIM/AQSE quoted investments. The level of VCT
qualifying investments is monitored continually by the Manager and reported to
the Risk Committee quarterly, or as otherwise required.
Key Performance Indicators (KPIs)
During the year, the net return on ordinary activities before taxation was a
loss of £2,068,000 (2021: a profit of £9,392,000); loss on investments of
£787,000 (2021: gain on investments of £12,143,000) and earnings per share
were a deficit of 1.64p (2021: a gain of 8.47p). The Directors also use a
number of APMs in order to assess the Company's success in achieving its
objectives, which enable Shareholders and prospective investors to gain an
understanding of its business. These APMs are shown in the Financial
Highlights in the Annual Report.
In addition, the Board considers the following to be KPIs:
• NAV total return;
• annual yield;
• share price discount to NAV;
• investment income; and
• operational expenses.
The NAV total return is considered to be a more appropriate long-term measure
of Shareholder value as it includes the current NAV per share and the sum of
dividends paid to date. The annual yield is the total of dividends paid per
share for the financial year, expressed as a percentage of the NAV per share
at the immediately preceding year end. The Directors seek to pay dividends to
provide a yield and comply with the VCT rules, taking account of the level of
distributable reserves, profitable realisations in each accounting period and
the Company's future cash flow projections. The share price discount to NAV is
the percentage by which the mid-market price of a share is lower than its NAV
per share.
Definitions of these APMs can be found in the Glossary in the Annual Report. A
historical record of some of these measures is shown in the Financial
Highlights and the change in the profile of the portfolio is reflected in the
Summary of Investment Changes in the Annual Report. The Board reviews the
Company's investment income and operational expenses on a quarterly basis, as
the Directors consider that both of these elements are important components in
the generation of Shareholder returns. Further information can be found in
Notes 2 and 4 to the Financial Statements in the Annual Report.
There is no VCT index against which to compare the financial performance of
the Company. However, for reporting to the Board and Shareholders, the Manager
uses comparisons with the most appropriate index, being the FTSE AIM All-Share
Index, and the graph in the Annual Report compares the Company's performance
against the FTSE AIM All-Share Index. The Directors also consider
non-financial performance measures, such as the flow of investment proposals,
and ranking of the VCT sector by independent analysts. In addition, the
Directors will consider economic, regulatory and political trends and factors
that may impact on the Company's future development and performance.
Valuation Process
Investments held by the Company in unquoted companies are valued in accordance
with the IPEV Guidelines. Following the invasion of Ukraine in February 2022,
IPEV reiterated the Special Guidance provided in March 2020, at the outbreak
of the COVID-19 pandemic in the UK, with respect to assessing the fair value
of private company holdings. The Directors and the Manager continue to follow
these industry guidelines and adhere to the IPEV Special Guidelines in all
private company valuations. Investments that are quoted or traded on a
recognised stock exchange, including AIM, are valued at their bid prices.
Share Buy-backs
At the forthcoming AGM, the Board will seek the necessary Shareholder
authority to continue to conduct a share buy-back programme under appropriate
circumstances.
The Board's Duty and Stakeholder Engagement
The Directors recognise the importance of an effective Board and its ability
to discuss, review and make decisions to promote the long-term success of the
Company and protect the interests of its key stakeholders. As required by
Provision 5 of the AIC Code (and in line with the UK Code), the Board has
discussed the Directors' duty under Section 172 of the Companies Act and how
the interests of key stakeholders have been considered in the Board
discussions and decision making during the year.
This has been summarised in the table below:
Form of engagement Influence on Board decision making
Shareholders
AGM - Shareholders are encouraged 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.
resolutions proposed at the AGM.
Further 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 April and September each
year. In the instance of a corporate action taking place, the Board will Share buy-back policy - the Directors recognise the importance to Shareholders
communicate with Shareholders through the issue of a Circular and, if of the Company maintaining an active buy-back programme and considered this
required, a Prospectus. when establishing the current policy. Further details can be found in the
Chairman's Statement, and in the Directors' Report in the Annual Report.
In addition, significant matters or reporting obligations are disseminated to
Shareholders by way of announcements to the London Stock Exchange. Offers for Subscription - in making the decision to launch the current Offer
for Subscription, the Directors considered that it would be in the interest of
Shareholders to continue to expand the portfolio and make investments across a
diverse range of sectors. By growing the Company, costs are spread over a
The Secretary acts as a key point of contact for the Directors and wider asset base, which helps to promote a competitive total expense ratio and
communications received from Shareholders are circulated to the whole Board. is in the interests of Shareholders. In addition, the increased liquidity
helps support the buy-back policy referred to above. Further details regarding
the latest Offer for Subscription can be found in the Chairman's Statement.
Liquidity management - in order to generate income and add value for
Shareholders, the Board has an active liquidity management policy, which has
the objective of generating income from the cash held prior to deployment in
VCT qualifying investments. Further details regarding the liquidity management
policy can be found in the Investment Manager's Review in the Annual Report.
Environment And Society
The Directors and the Manager take 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 the environment, challenging fundamental aspects such as energy and
emissions usage, and targets an approach to waste and recycling as well as
broader social themes such as the companies' approach to diversity and
inclusion in the workplace, and their work with charities.
Further details can be found in the Chairman's Statement, in the Investment
Manager's Review and in the Statement of Corporate Governance in the Annual
Report.
Portfolio Companies
Quarterly Board Meetings - the Manager reports to the Board on the portfolio The Directors are aware that the exercise of voting rights is key to promoting
companies, in particular on the private investee companies, and the Directors good corporate governance and, through the Manager, ensures that the portfolio
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
The Manager then communicates directly with each private investee company, to the Manager and has given it discretion to vote in respect of the Company's
normally through the Maven representative who sits on the board of the private holdings in the investment portfolio, in a way that reflects the concerns and
investee company. key governance matters discussed by the Board.
The Board is also mindful that, as the portfolio expands and the proportion of
early stage investments increases, follow-on funding will represent an
important part of the Company's investment strategy and this forms a key part
of the Directors' discussions in relation to valuations, risk management and
fundraising.
From time to time, the management teams of investee companies give
presentations to the Board.
Manager
Quarterly Board Meetings - the Manager 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 sufficient
liquidity in order to continue to expand and broaden the investment portfolio
in line with the strategy, including the provision of follow-on funding.
Registrar
Annual review meetings and control 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
As a VCT, the Company has no direct employee or environmental
responsibilities, nor is it responsible directly for the emission of
greenhouse gases. The Board's principal responsibility to Shareholders is to
ensure that the investment portfolio is managed and invested properly. As the
Company has no employees, it has no requirement to report separately on
employment matters. The Board comprises four male Directors and delegates
responsibility for diversity to the Nomination Committee, as explained in the
Statement of Corporate Governance in the Annual Report.
The management of the portfolio is undertaken by the Manager through members
of its portfolio management team. The Manager engages with the Company's
underlying investee companies in relation to their corporate governance
practices and in developing their policies on social, community and
environmental matters. Further information can be found in the Statement of
Corporate Governance in the Annual Report. The Manager is continuing to focus
on developing its ESG framework and oversight capabilities. Further details
regarding the Manager's approach to ESG and the progress made on developing
its ESG framework can be found in the Chairman's Statement and the Investment
Manager's Review in the Annual Report.
In light of the nature of the Company's business, there are no relevant human
rights issues and, therefore, the Company does not have a human rights policy.
Independent Auditor
The Company's Independent Auditor is required to report if there are any
material inconsistencies between the content of the Strategic Report and the
Financial Statements. The Independent Auditor's Report can be found in the
Annual Report.
Future Strategy
The Board and the Manager intend to maintain the policies set out above for
the year ending 31 December 2023, as it is believed that these are in the best
interests of Shareholders.
Approval
The Business Report, and the Strategic Report as a whole, was approved by the
Board of Directors and signed on its behalf by:
Fraser Gray
Director
12 April 2023
Income Statement
For the year ended 31 December 2022
Year ended Year ended
31 December 2022 31 December 2021
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Loss)/gain on investments - (787) (787) - 12,143 12,143
Income from investments 1,297 - 1,297 2,004 - 2,004
Other income 92 - 92 1 - 1
Investment management fees (435) (1,738) (2,173) (865) (3,460) (4,325)
Other expenses (497) - (497) (431) - (431)
Net return on ordinary activities before taxation 457 (2,525) (2,068) 709 8,683 9,392
Tax on ordinary activities - - - (93) 93 -
Return attributable to Equity Shareholders 457 (2,525) (2,068) 616 8,776 9,392
Earnings per share (pence) 0.36 (2.00) (1.64) 0.56 7.91 8.47
All gains and losses are recognised in the Income Statement.
The total column of this statement is the Profit & Loss Account of the
Company. The revenue and capital columns are supplementary to this and are
prepared under guidance published by the Association of Investment Companies.
All items in the above statement are derived from continuing operations. The
Company has only one class of business and one reportable segment, the results
of which are set out in the Income Statement and Balance Sheet. The Company
derives its income from investments made in shares, securities and bank
deposits.
There are no potentially dilutive capital instruments in issue and, therefore,
no diluted earnings per share figures are relevant. The basic and diluted
earnings per share are, therefore, identical.
The Notes are an integral part of the Financial Statements and can be found in
full in the Annual Report.
Statement of Changes in Equity
For the year ended 31 December 2022
Year Ended 31 December 2022
Non-distributable Reserves Distributable Reserves
Share Share Capital Capital Capital Special Revenue Total
capital premium redemption reserve reserve distributable reserve £'000
£'000 account reserve unrealised realised reserve £'000
£'000 £'000 £'000 £'000 £'000
At 31 December 2021 10,992 23,244 502 14,583 2,517 29,367 1,107 82,312
Net return - - - (2,483) 1,696 (1,738) 457 (2,068)
Dividends paid - - - - - (5,940) (390) (6,330)
Repurchase and cancellation of shares (260) - 260 - (1,714) - (1,714)
-
Net proceeds of share issue 2,157 13,692 - - - - - 15,849
Net proceeds of DIS issue* 88 507 - - - - - 595
At 31 December 2022 12,977 37,443 762 12,100 4,213 19,975 1,174 88,644
Year Ended 31 December 2021
Non-distributable Reserves Distributable Reserves
Share Share Capital Capital Capital Special Revenue Total
capital premium redemption reserve reserve distributable reserve £'000
£'000 account reserve unrealised realised reserve £'000
£'000 £'000 £'000 £'000 £'000
At 31 December 2020 11,200 22,905 236 3,732 1,225 38,533 943 78,774
Net return - - - 10,851 1,292 (3,367) 616 9,392
Dividends paid - - - - - (3,984) (452) (4,436)
Repurchase and cancellation of shares (266) - 266 - - (1,815) - (1,815)
Net proceeds of DIS issue* 58 339 - - - - - 397
At 31 December 2021 10,992 23,244 502 14,583 2,517 29,367 1,107 82,312
The capital reserve unrealised is generally non-distributable other than the
part of the reserve relating to gains/(losses) attributable to readily
realisable quoted investments, which are distributable.
Where all, or an element of the proceeds of sales have not been received in
cash or cash equivalent (as noted on the Realisations table in the Annual
Report), and are not readily convertible to cash, they do not qualify as
realised gains for the purposes of distributable reserves calculations and,
therefore, do not form part of distributable reserves. The split of unrealised
gains/(losses) for the year is detailed within the portfolio valuation section
of Note 8.
The Notes are an integral part of the Financial Statements and can be found in
full in the Annual Report.
*DIS represents the Dividend Investment Scheme as detailed in the Chairman's
Statement in the Annual Report.
Balance Sheet
As at 31 December 2022
31 December 2022 31 December 2021
£'000 £'000
Fixed assets
Investments at fair value through profit or loss 66,858 71,502
Current assets
Debtors 1,610 1,195
Cash 20,352 10,542
21,962 11,737
Creditors
Amounts falling due within one year (176) (927)
Net current assets 21,786 10,810
Net assets 88,644 82,312
Capital and reserves
Called up share capital 12,977 10,992
Share premium account 37,443 23,244
Capital redemption reserve 762 502
Capital reserve - unrealised 12,100 14,583
Capital reserve - realised 4,213 2,517
Special distributable reserve 19,975 29,367
Revenue reserve 1,174 1,107
Net assets attributable to Ordinary Shareholders 88,644 82,312
Net asset value per Ordinary Share (pence) 68.30 74.88
The Financial Statements of Maven Income and Growth VCT 4 PLC, registered
number SC272568, were approved by the Board of Directors and were signed on
its behalf by:
Fraser Gray
Director
12 April 2023
The Notes are an integral part of the Financial Statements and can be found in
full in the Annual Report.
Cash Flow Statement
For the Year ended 31 December 2022
Year ended Year ended
31 December 2022 31 December 2021
£'000 £'000
Net cash flows from operating activities (2,187) (3,100)
Cash flows from investing activities
Purchase of investments (5,471) (5,030)
Sale of investments 9,068 9,674
Net cash flows from investing activities 3,597 4,644
Cash flows from financing activities
Equity dividends paid (6,330) (4,436)
Net proceeds of DIS issue 595 397
Issue of Ordinary Shares 15,849 -
Repurchase of Ordinary Shares (1,714) (1,815)
Net cash flows from financing activities 8,400 (5,854)
Net increase (decrease) in cash 9,810 (4,310)
Cash at beginning of year 10,542 14,852
Cash at end of year 20,352 10,542
The Notes are an integral part of the Financial Statements and can be found in
full in the Annual Report.
Notes to the Financial Statements
For the year ended 31 December 2022
1. Accounting policies
The Company is a public limited company, incorporated in Scotland and its
registered office is shown in the Corporate Summary.
(a) Basis of preparation
The Financial Statements have been prepared on a going concern basis, further
details can be found in the Directors' Report in the Annual Report. The
Financial Statements have been prepared under the historical cost convention,
as modified by the revaluation of investments and in accordance with FRS 102,
The Financial Reporting Standard applicable in the UK and Republic of Ireland,
and in accordance with the Statement of Recommended Practice for Investment
Trust Companies and Venture Capital Trusts (the SORP) issued by the AIC in
July 2022.
(b) Income
Interest income on loan notes and dividends on preference shares are accrued
on a daily basis. Provision is made against this income where recovery is
doubtful. Where the terms of unquoted loan notes only require interest or a
redemption premium to be paid on redemption, the interest and the redemption
premium is recognised as income once redemption is reasonably certain. Until
such date interest is accrued daily and included within the valuation of the
investment. When a redemption premium is designed to protect the value of the
instrument holder's investment rather than reflect a commercial rate of
revenue return the redemption premium should be recognised as capital. The
treatment of redemption premiums is analysed to consider if they are revenue
or capital in nature on a company by company basis. A redemption premium of
£141,836 (2021: £115,650) was received in the year ended 31 December 2022.
Income from fixed interest securities and deposit interest is included on an
effective interest rate basis. Dividends on quoted shares are recognised as
income when the related investments are marked ex-dividend and where no
dividend date is quoted, when the Company's right to receive payment is
established.
(c) Expenses
All expenses are accounted for on an accruals basis and charged to the Income
Statement. Expenses are charged through the revenue account except as follows:
• expenses that are incidental to the acquisition and disposal of
an investment are charged to capital; and
• expenses are charged to the special distributable reserve where
a connection with the maintenance or enhancement of the value of the
investments can be demonstrated. In this respect, the investment management
fee and performance fee has been allocated 20% to revenue and 80% to special
distributable reserve to reflect the Company's investment policy and
prospective income and capital growth.
• share issue and merger costs are charged to the share premium
account.
(d) Taxation
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the underlying timing differences can be deducted. Timing
differences are differences arising between the Company's taxable profits and
its results as stated in the Financial Statements that are capable of reversal
in one or more subsequent periods.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences are expected to
reverse, based on tax rates and laws enacted or substantively enacted at the
balance sheet date.
The tax effect of different items of income/gain and expenditure/loss is
allocated between capital reserves and revenue account on the same basis as
the particular item to which it relates using the Company's effective rate of
tax for the period.
UK Corporation tax is provided at amounts expected to be paid/recovered using
the tax rates and laws that have been enacted or substantively enacted at the
balance sheet date.
(e) Investments
In valuing unlisted investments, the Directors follow the criteria set out
below. These procedures comply with the revised IPEV Guidelines for the
valuation of private equity and venture capital investments. Investments are
recognised at their trade date and are designated by the Directors as fair
value through profit or loss. At subsequent reporting dates, investments are
valued at fair value, which represent the Directors' view of the amount for
which an asset could be exchanged between knowledgeable willing parties in an
arm's length transaction. This does not assume that the underlying business is
saleable at the reporting date or that its current shareholders have an
intention to sell their holding in the near future.
A financial asset or liability is generally derecognised when the contract
that gives rise to it is settled, sold, cancelled or expires.
1. For early stage investments completed in the reporting period, fair
value is determined using the Price of Recent Investment Method, calibrating
for any material change in the trading circumstances of the investee company.
Other early stage companies are valued by applying a multiple to
the investee's revenue to derive the enterprise value of each company.
2. Whenever practical, recent investments will be valued by reference to
a material arm's length transaction or a quoted price.
3. Mature companies are valued by applying a multiple to their
maintainable earnings to determine the enterprise value of the company.
To obtain a valuation of the total ordinary share capital held by
management and the institutional investors, the value of third party debt,
institutional loan stock, debentures and preference share capital is deducted
from the enterprise value. The effect of any performance related mechanisms is
taken into account when determining the value of the ordinary share capital.
4. All unlisted investments are valued individually by the Manager. The
resultant valuations are subject to detailed scrutiny and approval by the
Directors of the Company.
5. In accordance with normal market practice, investments listed on AIM
or a recognised stock exchange are valued at their bid market price.
(f) Fair value measurement
Fair value is defined as the price that the Company would receive upon selling
an investment in a timely transaction to an independent buyer in the principal
or the most advantageous market of the investment. A three-tier hierarchy has
been established to maximise the use of observable market data and minimise
the use of unobservable inputs and to establish classification of fair value
measurements for disclosure purposes. Inputs refer broadly to the assumptions
that market participants would use in pricing the asset or liability,
including assumptions about risk, for example, the risk inherent in a
particular valuation technique used to measure fair value including such a
pricing model and/or the risk inherent in the inputs to the valuation
technique. Inputs may be observable or unobservable.
Observable inputs are inputs that reflect the assumptions market participants
would use in pricing the asset or liability developed based on market data
obtained from sources independent of the reporting entity.
Unobservable inputs are inputs that reflect the reporting entity's own
assumptions about the assumptions market participants would use in pricing the
asset or liability developed based on best information available in the
circumstances.
The three-tier hierarchy of inputs is summarised in the three broad levels
listed below.
• Level 1 - the unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the measurement
date.
• Level 2 - inputs other than quoted prices included within Level
1 that are observable (i.e. developed using market data) for the asset or
liability, either directly or indirectly.
• Level 3 - inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
(g) Gains and losses on investments
When the Company sells or revalues its investments during the year, any gains
or losses arising are credited/ charged to the Income Statement.
(h) Critical accounting judgements and key sources of estimation uncertainty
Disclosure is required of judgements and estimates made by the Board and the
Manager in applying the accounting policies that have a significant effect on
the Financial Statements. The area involving the highest degree of judgement
and estimates is the valuation of early stage unlisted investments recognised
in Note 8 and explained in Note 1(e) in the Financial Statements.
In the opinion of the Board and the Manager, there are no critical accounting
judgements.
Reserves
Share premium account
The share premium account represents the premium above nominal value received
by the Company on issuing shares net of issue costs. This reserve is
non-distributable.
Capital redemption reserve
The nominal value of shares repurchased and cancelled is represented in the
capital redemption reserve. This reserve is non-distributable.
Capital reserve - unrealised
Increases and decreases in the fair value of investments are recognised in the
Income Statement and are then transferred to the capital reserve unrealised
account. This reserve is generally non-distributable other than the part of
the reserve relating to gains/(losses) attributable to readily realisable
quoted investments which are distributable.
Capital reserve - realised
Gains or losses on investments realised in the year that have been recognised
in the Income Statement are transferred to the capital reserve realised
account on disposal. Furthermore, any prior unrealised gains or losses on such
investments are transferred from the capital reserve unrealised account to the
capital reserve realised account on disposal. This reserve is distributable.
Special distributable reserve
The total cost to the Company of the repurchase and cancellation of shares is
represented in the special distributable reserve account. The special
distributable reserve also represents capital dividends, capital investment
management fees and the tax effect of capital items. This reserve is
distributable.
Revenue reserve
The revenue reserve represents accumulated profits retained by the Company
that have not been distributed to Shareholders as a dividend. This reserve is
distributable.
Return per Ordinary Share
Year ended Year ended
31 December 2022 31 December 2021
The returns per share have been based on the following figures:
Weighted average number of Ordinary Shares 126,180,477 110,969,818
Revenue return £457,000 £616,000
Capital return (£2,525,000) £8,776,000
Total return (£2,068,000) £9,392,000
Net asset value per Ordinary Share
The net asset value per Ordinary Share as at 31 December 2022 has been
calculated using the number of Ordinary Shares in issue at that date of
129,788,859 (2021: 109,929,961).
Directors Responsibility Statement
The Directors confirm that, to the best of their knowledge:
• the Financial Statements have been prepared in accordance with
the applicable accounting standards and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company as
at 31 December 2022 and for the year to that date;
• the Directors' Report includes a fair review of the development
and performance of the Company, together with a description of the principal
and emerging risks and uncertainties that it faces; and
• the Annual Report and Financial Statements taken as a whole is
fair, balanced and understandable and provides the information necessary for
Shareholders to assess the Company's position and performance, business model
and strategy.
Other Information
The AGM will be held on Thursday, 11 May 2023, commencing at 11.30 am, at the
offices of Maven Capital Partners UK LLP, Kintyre House, 205 West George
Street, Glasgow G2 2LW.
Copies of this announcement and the Annual Report and Financial Statements for
the year ended 31 December 2022, will be available to the public at: the
registered office of the Company, Kintyre House, 205 West George Street,
Glasgow G2 2LW; the offices of Maven Capital Partners UK LLP, Fifth Floor, 1-2
Royal Exchange Buildings, London EC3V 3LF; and on the Company's website at
mavencp.com/migvct4 (http://www.mavencp.com/migvct4) .
The Annual Report and Financial Statements for the year ended 31 December 2022
will be issued to Shareholders and filed with the Registrar of Companies in
due course.
The financial information contained within this announcement does not
constitute the Company's statutory Financial Statements as defined in the
Companies Act 2006. The statutory Financial Statements for the year ended 31
December 2021 have been delivered to the Registrar of Companies and contained
an audit report that was unqualified and did not constitute statements under
S498(2) or S498(3) of the Companies Act 2006.
Neither the content of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
The Annual Report will be submitted to the National Storage Mechanism and will
be available for inspection at:
fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
(http://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism)
.
By Order of the Board
Maven Capital Partners UK LLP
Secretary
12 April 2023
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. END FR ZZGMDRZZGFZMRecent news on Maven Income and Growth VCT 4
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