TIDMMIG5
RNS Number : 3107S
Maven Income and Growth VCT 5 PLC
15 March 2021
Maven Income and Growth VCT 5 PLC
Final results for the year ended 30 November 2020
The Directors report the Company's financial results for the
year ended 30 November 2020
Highlights
-- NAV total return at the year end of 79.83p per share (2019: 79.22p)
-- NAV at the year end of 36.38p per share (2019: 37.37p), after
total dividend payments of 1.60p per share during the year
-- Final dividend of 1.10p per share proposed
-- Offer for Subscription launched with over GBP12 million raised to date
-- Deployment of GBP7.0 million in total, including investments
in 17 new private and AIM quoted companies
-- Three profitable realisations completed during the year and
GBP1.87 million realised in AIM disposals
Strategic Report
Chairman's Statement
The financial year to 30 November 2020 has been a period of
significant challenge and uncertainty, following the emergence of
the COVID-19 pandemic and the subsequent imposition of protective
measures and restrictions that have had a wide reaching impact on
the economy and our society. This public health crisis has touched
the lives of many people and our thoughts are with everyone who has
been affected.
Notwithstanding the disruption caused by the pandemic, your
Board is pleased to announce a slight uplift in NAV total return at
the year end to 79.83p per share. Under the circumstances, the
Directors consider that this is a creditable performance, which
reflects the strength and diversity of the underlying portfolio and
the ability of most investee companies to adjust to the current
market conditions. Notably, the AIM quoted portfolio performed
strongly during the year, with the majority of holdings reporting
positive trading updates and share price appreciation. In terms of
portfolio construction, your Company maintained a healthy rate of
investment during the year with the addition of eleven new private
company and six new AIM quoted holdings, whilst follow-on funding
was provided to a number of existing investee companies where
continuing commercial progress merited further investment.
Pleasingly, three profitable private company realisations were
completed, including the exit from Symphonic Software, which
generated a total return of 2.9 times cost over a holding period of
less than two years, and is the first material realisation from the
early stage portfolio. The Directors are committed to making
distributions whenever possible and have proposed a final dividend
of 1.10p per share.
At the start of the financial year, with good levels of
liquidity, your Company was well positioned to continue its active
investment programme, which is focused on the expansion and
diversification of the portfolio to support the long term
investment objective of growing the portfolio and improving
Shareholder returns. Whilst the outbreak of COVID-19 required a
swift change in approach to one of value preservation and
supporting the requirements of existing portfolio companies, the
Directors are encouraged to report that despite the challenging
underlying market conditions, good progress has been achieved in
expanding the asset base.
Prior to the announcement of the first nationwide lockdown, the
Manager had successfully migrated its regional offices and
administration hub to a remote working model, to comply with
Government and local guidelines. Your Company has maintained full
operational capability throughout this period and the Directors are
reassured that the Manager, and all third-party providers, are
capable of continuing to service your Company either remotely or
from COVID-secure office environments for as long as is
necessary.
The Manager responded promptly to the potential economic impact
of the pandemic, conducting a comprehensive review of the portfolio
to identify those companies that would be most immediately
affected. Subsequently, the Board approved a small number of
specific provisions to holdings in private companies with exposure
to consumer facing sectors. There was also a contraction in listed
markets, including AIM, at that time. This review resulted in a
9.0% reduction in NAV per share from 37.37p at 30 November 2019 to
33.99p as at 20 March 2020, which was announced on 26 March 2020.
The Directors are pleased to note that there has been a recovery in
NAV per share at the year end to 36.38p, which is stated after the
payment, during the year, of the 2019 final and 2020 interim
dividends, totalling 1.60p per share. This improvement in NAV
demonstrates the strength and resilience of the underlying
portfolio, which has diversified exposure to a range of defensive
sectors such as software, funeral services, healthcare, data
analytics and training, where the impact of the pandemic has been
less severe. A number of portfolio companies have continued to
generate meaningful growth during the year, which has resulted in
uplifts to valuations in line with the progress achieved. The
recovery in NAV was also supported by good performance by the AIM
quoted portfolio, which has recorded a significant increase in
value since 20 March 2020. Several of the larger AIM holdings have
reported good results, which led to share price appreciation. In
addition, a number of the new AIM portfolio holdings, notably those
with exposure to the healthcare and life sciences sectors, have
experienced share price re-ratings following positive trading
updates and favourable market sentiment.
Throughout the initial lockdown period, the Directors maintained
close communication with the Manager, receiving monthly updates on
the performance of the investee portfolio. The Board has been
encouraged by the measures taken by investee management teams, with
Maven maintaining an active role and providing direct assistance on
a case-by-case basis. Whilst there are a small number of portfolio
companies that are operating behind plan, the majority are trading
in line with revised budgets and, in all cases, cash is being
carefully managed. It is also encouraging to report that several
unlisted and AIM quoted assets have harnessed opportunities
presented by the market conditions, reflecting the level of
innovation and entrepreneurialism across the portfolio. This
includes companies that offer a disruptive technology designed to
take a product or service online, such as training, restaurant food
ordering or prescription dispensing. Several businesses operating
in the specialist biotechnology market have been able to make an
active contribution towards the urgent need for COVID-19 testing or
therapeutics and those that manufacture devices and products for
medical markets have experienced a surge in demand.
Shareholders can find full details on portfolio developments and
a summary of the investments completed during the year in the
Investment Manager's Review in the Annual Report. Given the market
conditions, the Manager maintained a cautious approach to new
investment, which resulted in a small number of potential
transactions being aborted due to client attrition arising from the
pandemic. It is, however, encouraging to report that eleven new
private company and six AIM quoted holdings were added to the
portfolio including several in the healthcare and life sciences
sectors, which are likely to remain attractive investment areas for
the foreseeable future and will continue to be a key focus of the
Maven investment team, both in the private and AIM markets. Your
Company also gained exposure to various new end markets including
web archiving, data analytics and cyber security, investing in
several new companies with defensive qualities that operate in
sectors which are likely to continue to grow when the immediate
impact of the pandemic subsides. The provision of performance based
follow-on funding remains a key component of the investment
strategy, as it is generally recognised that many earlier stage
companies are likely to require several rounds of capital before
they are fully scaled and Shareholder value can be optimised.
The portfolio of AIM quoted holdings made a strong contribution
to the full year performance recording a 25.4% return, which
compares favourably to the FTSE AIM All-Share Index which returned
13.9% over the same period. During the year, six new AIM quoted
investments were completed with the AIM quoted portfolio
representing 22.7% of net assets at the year end. Given the
positive performance and the dedicated AIM VCT executives at Maven,
your Company will continue to make selective new investments in AIM
quoted companies to complement the core private equity asset
base.
The uncertainty surrounding the UK's future global trading
relationships has continued throughout the year. The UK formally
left the EU on 31 January 2020 and entered an eleven-month
transition period that ended on 31 December 2020. The EU (Future
Relationship) Act 2020, which was agreed with the EU on 24 December
2020, came into effect on 1 January 2021. The potential impact of
the UK's withdrawal from the EU has been closely monitored across
the portfolio of investee companies and as at the date of the
Annual Report, the portfolio has not been materially affected. The
majority of the investee companies have limited direct exposure to
the EU, and those that do have been implementing contingency plans
to mitigate any potential impact. Furthermore, it is not
anticipated that there will be any changes to the legislation
governing VCTs as a result of the UK's departure from the EU.
The partial realisation of the holding in Global Risk Partners
completed in June 2020, generating a total return of 2.6 times cost
over the life of the investment. Towards the end of the financial
year, there was a further positive development when your Company
successfully exited its holding in Symphonic Software through a
sale to a US listed trade acquirer. The exit generated a total
return of 2.9 times cost in a holding period of just under two
years. The Directors are optimistic that further profitable exits
can be achieved from the early stage portfolio as those companies
develop and achieve scale, although it may take time for them to
mature and for full value to be optimised. The timing of exits is
often hard to predict, and this is particularly pertinent for the
early stage portfolio where certain assets may attract early
interest from a strategic acquirer, whereas others may need to
raise further capital in order to develop to their full potential
before a formal exit process can be initiated.
Proposed Final Dividend
In respect of the year ended 30 November 2020, your Board is
proposing a final dividend of 1.10p per Ordinary Share to be paid
on 7 May 2021 to Shareholders on the register at 9 April 2021. This
will bring total distributions for the year to 1.60p per Ordinary
Share, representing a yield of 5.06% based on the year end closing
mid-market share price of 31.60p. Since the Company's launch, and
after receipt of the proposed final dividend, Shareholders will
have received 44.55p per share in tax free distributions. It should
be noted that the effect of paying dividends is to reduce the NAV
of the Company by the total cost of the distribution.
As Shareholders will be aware from recent Interim and Annual
Reports, decisions on distributions take into consideration the
availability of surplus revenue, the realisation of capital gains,
the adequacy of distributable reserves and the VCT qualifying
level, all of which are kept under close and regular review by the
Board and the Manager. The Board and the Manager recognise the
importance of tax free distributions to Shareholders and remain
committed to paying dividends whenever possible.
Given the higher concentration of early stage companies within
the portfolio, as required by the VCT rules, future distributions
will be closely linked to realisation activity, whilst also
reflecting the Company's requirement to maintain its minimum VCT
qualifying level. If larger distributions are required, as a
consequence of exits, this could result in a corresponding
reduction in NAV per share, however the Board considers this to be
a tax efficient means of returning value to Shareholders, whilst
ensuring ongoing compliance with the requirements of the VCT
legislation.
Dividend Investment Scheme (DIS)
Your Company operates a DIS, through which Shareholders may
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. Due to the
volatility in financial markets caused by the COVID-19 pandemic,
the DIS was temporarily suspended on 26 March 2020, before being
fully reinstated on 24 July 2020 ahead of the payment of the 2020
interim dividend on 28 August 2020.
Shareholders who wish to participate in the DIS in respect of
future dividends, including the payment of the proposed final
dividend, should ensure that a DIS mandate or CREST instruction, as
appropriate, is received by the Registrar (Link Group) in advance
of 23 April 2021, this being the next dividend election date. The
mandate form, terms & conditions and full details of the scheme
(including further details about tax considerations) are available
from the Company's website at www.mavencp.com/migvct5. Election to
participate in the DIS can also be made through the Registrar's
share portal at www.signalshares.com. 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. 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 Allotments
On 23 October 2020, the Directors of your Company, together with
the board of Maven Income and Growth VCT PLC, launched joint Offers
for Subscription of new Ordinary Shares for up to GBP20 million in
aggregate (GBP10 million for each company) with a combined
over-allotment facility of up to GBP20 million (GBP10 million for
each company). On 8 February 2021, the Directors resolved to
utilise the over-allotment facility to the extent required to meet
investor demand. As at the date of the Annual Report, over GBP12
million has been raised by your Company.
An allotment of 24,921,994 new Ordinary Shares in respect of the
2020/21 tax year was made on 2 March 2021. A further allotment will
be made on or around 1 April 2021. The allotment for the 2021/22
tax year will take place after 5 April 2021, and on or before 4 May
2021, once the Offer has closed.
This additional liquidity will enable your Company to continue
to expand the portfolio by investing in ambitious, growth focused
private and AIM quoted companies that operate across a range of
market sectors, and which are capable of generating capital gains.
It will also ensure that existing portfolio companies can continue
to be supported through follow-on funding where there is an ongoing
business case which merits support. Furthermore, the funds raised
will allow your Company to maintain its share buy-back policy,
whilst also spreading costs over a wider asset base in line with
the objective of maintaining a competitive total expense ratio for
the benefit of all Shareholders.
Share Buy-backs
Shareholders will be aware that a primary objective for the
Board is to ensure that the Company retains sufficient liquidity
for making investments in line with its stated policy, and for the
continued payment of dividends. However, the Directors also
acknowledge the need to maintain an orderly market in the Company's
shares and have, therefore, delegated authority to the Manager to
buy back shares in the market for cancellation or to be held in
treasury, subject always to such transactions being in the best
interests of Shareholders. Despite the market volatility in
relation to COVID-19, the Board maintained the view that it was
appropriate to continue to operate the buy-back policy as this is
an important mechanism for ensuring an orderly market in your
Company's shares.
It is intended that, subject to market conditions, available
liquidity and the maintenance of the Company's VCT status, Shares
will be bought back at prices representing a discount of between
10% and 15% to the prevailing NAV per share.
Regulatory Developments
During the year, there have been no further amendments to the
rules governing VCTs. The Chancellor did not issue an Autumn 2020
Budget as the Treasury's focus at the time was on providing
stimulus packages to support the economy through the pandemic. The
Spring Budget was delivered on 3 March 2021, with no specific
changes being proposed to the regulations governing VCTs.
The requirement of the Finance Act 2018, which increased the
threshold level of qualifying investments that a VCT must hold from
70% to 80%, was comfortably achieved by your Company ahead of 1
December 2019, being the required date of compliance. The
qualifying level continues to be closely monitored by the Manager
and reviewed by the Board on a regular basis.
Following the outbreak of COVID-19, a number of regulatory
changes were implemented to assist companies through the crisis.
The Corporate Insolvency and Governance Act 2020 temporarily
suspended parts of insolvency law to support directors, whose
companies continued to trade through the emergency, from the threat
of personal liability for wrongful trading and to protect companies
from creditor action. This suspension has been extended until April
2021. In addition, Company Law and other legislation was amended to
provide companies with temporary easements on company filings and
the holding of Annual General Meetings.
On 27 March 2020, the International Private Equity and Venture
Capital Valuation (IPEV) Guidelines Board issued Coronavirus
Special Valuation Guidance to assist managers who are applying the
IPEV Valuation Guidelines to portfolios from 31 March 2020. The
Guidelines were last updated in 2018 and are the prevailing
framework for fair value information in the private equity and
venture capital industry. The Directors and the Manager continue to
apply the IPEV Guidelines as a central methodology for all private
company valuations.
Environmental, Social and Governance (ESG)
The Board recognises the importance of ESG principles and
believes that each portfolio company should behave responsibly
towards the environment and society. The Directors are pleased to
report that the Manager considers environmental, social and
governance matters as part of the investment appraisal process and
ensures that any relevant ESG issues are identified at an early
stage. The Manager is currently undertaking a programme of work to
develop a framework that will ensure that ESG issues are carefully
managed throughout the period of investment, and there is close
engagement with each portfolio company in relation to corporate
governance practices and support provided to the management team to
develop or improve policies on the environment, community
engagement, HR and employee relations, corporate governance and
responsible product marketing.
The Directors are aware of the work that the Manager is
undertaking to address the recommendations of the Task Force on
Climate-related Financial Disclosures, which seeks to address the
material financial impacts of the global transition to a lower
carbon economy. The Directors are satisfied that the Manager is
taking the appropriate steps to address these requirements and will
continue to monitor progress.
Annual General Meeting (AGM)
The 2021 AGM will be held in the Glasgow office of Maven Capital
Partners UK LLP on 27 April 2021 commencing at 11:30am. The Notice
of Annual General Meeting can be found in the Annual Report.
The Directors understand that the AGM is a good opportunity for
Shareholders to meet the Board and the Manager but consider the
well-being of its Shareholders and other AGM attendees to be their
immediate priority. In light of the current Government advice
against all non-essential travel and public gatherings,
Shareholders will be unable to attend the AGM in person and should
instead vote using the Proxy Form, which should be completed and
returned in accordance with the instructions thereon. The latest
time for the receipt of Proxy Forms is 11.30am on 23 April 2021.
Proxy votes can also be submitted by CREST or online using the
Registrar's Share Portal Service at www.signalshares.com.
The Directors also encourage Shareholders to submit any
questions to the Board and the Manager by email or by letter in
advance of the AGM. Shareholders wishing to submit a question
should write to: The Company Secretary, Maven Income and Growth VCT
5 PLC, c/o Maven Capital Partners UK LLP, First Floor, Kintyre
House, 205 West George Street, Glasgow G2 2LW or email:
CoSec@mavencp.com. A summary of responses will be published after
the AGM on the Company's website at www.mavencp.com/migvct5.
The Future
Despite the clear challenges presented by the pandemic, the
Directors are encouraged by the progress that has been achieved
during the financial year. Against a backdrop of prolonged economic
uncertainty, the portfolio of investee companies has proven to be
resilient, which reflects the breadth and diversity of the
underlying asset base and the well- balanced composition of the
portfolio as a whole. Whilst protective measures and restrictions
remain in place across the UK, the Board are encouraged by the
speed with which the vaccination programme is being rolled out and,
assuming that the virus continues to be suppressed, anticipate a
strong economic recovery in the second half of the year. The funds
raised under the current Offer for Subscription will provide
further liquidity to support the ongoing active investment strategy
to expand and develop the portfolio, with the core objective of
generating sustained growth in Shareholder value in the years to
come.
Graham Miller
Chairman
15 March 2021
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 venture capital trust, which invests in accordance
with the investment objective set out below.
Investment Objective
The Company aims to achieve long-term capital appreciation and
generate income for Shareholders. Maven Capital Partners UK LLP
(Maven or the Manager) was appointed in February 2011 with a view
to applying a new investment policy, as set out below.
Business Model and Investment Policy
Under an investment policy approved by the Directors, the
Company intends to achieve its objective by:
-- investing the majority of its funds in a diversified
portfolio of shares and securities in smaller, unquoted UK
companies and AIM/AQSE quoted companies which meet the criteria for
VCT qualifying investments and have strong growth potential;
-- investing no more than GBP1.25 million in any company in one
year and no more than 15% of the Company's assets by cost in one
business at any time; and
-- borrowing up to 15% of net asset value, if required and only
on a selective basis, in pursuit of its investment strategy. The
Board has no intention of approving any borrowing at this time.
Principal and Emerging Risks and Uncertainties
The Board and the Risk Committee have an ongoing process for
identifying, evaluating and monitoring the principal and emerging
risks and uncertainties facing the Company. The risk register and
risk dashboard form key parts of the Company's risk management
framework used to carry out a robust assessment of the risks,
including a significant focus on the controls in place to mitigate
them.
The current principal and emerging risks and uncertainties
facing the Company are considered to be as follows:
Investment Risk
The majority of the Company's investments are in early stage,
small and medium sized unquoted UK companies and AIM/AQSE quoted
companies which, by their nature, carry a higher level of risk and
lower liquidity than investments in large quoted companies. The
Board aims to limit the risk attached to the investment portfolio
as a whole by ensuring that a robust and structured selection,
monitoring and realisation process is applied. The Board reviews
the investment portfolio with the Manager on a regular basis.
The Company manages and minimises investment risk by:
-- diversifying across a large number of companies;
-- diversifying across a range of economic sectors;
-- actively and closely monitoring the progress of investee companies;
-- co-investing with other clients of Maven, other VCT managers,
and/or other co-investor partners;
-- ensuring valuations of underlying investments are made fairly
and reasonably (see Notes to the Financial Statements 1(e), 1(f)
and 16 in the Annual Report for further details);
-- taking steps to ensure that the share price discount is managed appropriately; and
-- choosing and appointing an FCA authorised investment manager
with the appropriate skills, experience and resources required to
achieve the Investment Objective above, with ongoing monitoring to
ensure the Manager is performing in line with expectations.
Internal Control Risk
The Board regularly reviews the system of internal controls,
both financial and non-financial, operated by the Company, Maven
and other key third party outsourcers such as the Custodian and
Registrar. These include controls designed to ensure that the
Company's assets are safeguarded, that all records are complete and
accurate and that the third parties have adequate controls in place
to prevent data protection and cyber security failings. Breaches of
controls by service providers to the Company could also lead to
reputational damage or loss.
VCT Qualifying Status Risk
The Company operates in a complex regulatory environment and
faces a number of related risks, including:
-- becoming subject to capital gains tax on the sale of its
investments as a result of a breach of Section 274 of the Income
Tax Act 2007;
-- loss of VCT status and the consequential loss of tax reliefs
available to Shareholders as a result of a breach of the VCT
regulations;
-- loss of VCT status and reputational damage as a result of a
serious breach of other regulations such as the FCA Listing Rules
and the Companies Act 2006; and
-- increased investment restrictions resulting from the EU State
Aid Rules incorporated by the Finance (No. 2) Act 2015 and the
Finance Act 2018.
The Board works closely with the Manager to ensure compliance
with all applicable and upcoming legislation such that VCT
qualifying status is maintained. Further information on the
management of this risk is detailed under other headings in this
Business Report.
Legislative and Regulatory Risk
The Directors strive to maintain a good understanding of the
changing regulatory agenda and consider emerging issues so that
appropriate changes can be implemented and developed in good
time.
In order to maintain its approval as a VCT, the Company is
required to comply with current VCT legislation in the UK as well
as the EU State Aid Rules. Changes to either legislation could have
an adverse impact on Shareholder investment returns, whilst
maintaining the Company's VCT status. The Board and the Manager
continue to make representations where appropriate, either directly
or through relevant industry bodies such as the Association of
Investment Companies (AIC), the British Venture Capital Association
(BVCA) and the Venture Capital Trust Association (VCTA).
The Company has retained Philip Hare & Associates LLP as its
principal VCT adviser and also uses the services of a number of
other VCT advisers on a transactional basis.
Breaches of other regulations, including but not limited to the
Companies Act 2006, the FCA Listing Rules, the FCA Disclosure
Guidance and Transparency Rules, the General Data Protection
Regulation (GDPR), and the Alternative Investment Fund Managers
Directive (the AIFMD), could lead to a number of detrimental
outcomes and reputational damage.
The AIFMD, which regulates the management of alternative
investment funds, including VCTs, introduced a new authorisation
and supervisory regime for all investment companies in the EU. The
Company is a small registered, internally managed alternative
investment fund under the AIFMD, and its status as such is
unchanged as a result of the UK's departure from the EU.
The Company is also required to comply with tax legislation
under the Foreign Account Tax Compliance Act and the Common
Reporting Standard. The Company has appointed Link Group to act on
its behalf to report annually to HM Revenue & Customs (HMRC)
and ensure compliance with this legislation.
Political Risk
Although the EU (Future Relationship) Act 2020 came into effect
on 1 January 2021, the full political, economic and legal
consequences of the UK leaving the EU are not yet known. It is
possible that investments in the UK may be more difficult to value
and assess for suitability of risk, harder to buy or sell and may
be subject to greater or more frequent rises and falls in value. In
the longer term, there is likely to be a period of uncertainty as
the UK seeks to negotiate its ongoing relationship with the EU and
other global trade partners. The UK's laws and regulations,
including those relating to investment companies, may, in the
future, diverge from those of the EU. This may lead to changes in
the operation of the Company or the rights of investors in the
territories in which the shares of the Company may be promoted and
sold.
The Board regularly reviews the political situation, together
with any associated changes to the economic, regulatory and
legislative environment, to ensure that any risks arising are
mitigated as effectively as possible.
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 the 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 cost and the
environmental impact of the production and circulation of
Shareholder documentation such as the Annual and Interim Reports.
This has resulted in a significant reduction in the number of paper
copies being printed and posted, with only 15% 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 industry. The
results are then factored into the decision making process for new
investments. VCTs in general are regarded as supporting small and
medium sized enterprises which, in turn, helps create local
employment opportunities across a range of geographical areas in
the UK.
Other Risks
Governance Risk
The Directors are aware that an ineffective Board could have a
negative impact on the Company and its Shareholders. The Board
recognises the importance of effective leadership and board
composition, and this is ensured by completing an annual evaluation
process. If required, additional training is then arranged.
Management Risk
The Directors are aware of the risk that investment
opportunities could fail or the management of the VCT could breach
the Management and Administration Deed or regulatory parameters,
due to lack of knowledge and/or experience of the investment
professionals acting on behalf of the Company. To manage this risk,
the Board has appointed Maven as investment manager, as it employs
skilled professionals with the required VCT knowledge and
experience. In addition, the Board takes comfort from the Manager's
controls that have been updated to ensure compliance with the
Senior Managers and Certification Regime.
The Directors are also mindful of the impact that the loss of
the Manager's key employees could have on both investment
opportunities that may be lost or existing investments that may
fail. The Board takes reassurance from the Manager's approach to
incentivising staff and ensuring that adequate notice periods are
included in all contracts of employment.
Financial and Liquidity Risk
As most of the investments require a mid to long-term commitment
and are relatively illiquid, the Company retains a portion of the
portfolio in cash and 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.
Economic Risk
The valuation of investment companies may be affected by
underlying economic conditions such as fluctuating interest rates
and the availability of bank finance. 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 in the
Chairman's Statement and the Investment Manager's Review. A review
of the Company's business, its financial position as at 30 November
2020 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 depth and breadth 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 tabular analysis of the
unlisted and quoted portfolio shows that the portfolio is
diversified across a variety of industry sectors and transaction
types. The level of VCT qualifying investment is monitored
continually by the Manager and reported to the Risk Committee
quarterly or as required.
Key Performance Indicators (KPIs)
During the year, the net return on ordinary activities before
taxation was GBP656,000 (2019: GBP519,000), gains on investments
were GBP1,442,000 (2019: GBP960,000) and earnings per share were
0.52p (2019: 0.44p). The Directors also consider 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
History table in the Annual Report. In addition, the Board
considers the following to be KPIs:
-- NAV total return;
-- cumulative dividends paid;
-- share price discount to NAV;
-- share price total return; and
-- operational expenses.
The NAV total return is the principal measure of Shareholder
value as it includes both the current NAV per share and the sum of
dividends paid to date. Cumulative dividends paid is the total
amount of both capital and income distributions paid since the
launch of the Company. The Directors seek to pay dividends to
provide a yield and comply with the VCT rules, taking account of
the level of distributable reserves, profitable realisations in
each accounting period and the Company's future cash flow
projections. The share price discount to NAV is the percentage by
which the mid-market share price of an investment is lower than the
NAV per share. Share price total return is the percentage movement
in the share price over a period of time including any re-invested
dividends paid over that timeframe. A historical record of these
measures is shown in the Financial Highlights in the Annual Report,
and the profile of the portfolio is reflected in the Summary of
Investment Changes in the Annual Report. Definitions of the APMs
can be found in the Glossary in the Annual Report. The Board also
reviews the Company's operational expenses on a quarterly basis as
the Directors consider that this element is an important component
in the generation of Shareholder returns. Further information can
be found in Notes 2 and 4 to the Financial Statements in the Annual
Report.
The introduction of the Finance (No. 2) Act 2015 altered the
type of investments VCTs can make, and also changed the transaction
structure to be more heavily weighted to equity investment. The
proportion of loan notes has reduced as a result and, accordingly,
the Directors have agreed that investment income should no longer
be considered a KPI. The Directors have also agreed that the
rebalancing of the legacy AIM portfolio should no longer be
considered a KPI. In recent years, AIM has matured and has offered
increasingly good investment opportunities, and your Board has been
pleased with the positive contribution that the AIM portfolio has
delivered. Whilst the majority of new investments will continue to
be made in unlisted companies, given the positive performance and
the expertise of the dedicated AIM executives at Maven, your
Company will continue to make selective AIM investments.
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. The
Directors also consider non-financial performance measures such as
the flow of investment proposals and the Company's ranking within
the VCT sector.
In addition, the Directors consider economic, regulatory and
political trends and factors that may impact on the Company's
future development and performance.
Valuation Process
Investments held by Maven Income and Growth VCT 5 PLC in
unquoted companies are valued in accordance with the International
Private Equity and Venture Capital Valuation Guidelines.
Investments 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 discussions
and decision making during the year. This has been summarised in
the table below:
Form of engagement Influence on Board decision making
Shareholders Dividend declarations - the Board recognises
AGM - under normal circumstances, the importance of tax free dividends to Shareholders
Shareholders are encouraged and takes this into consideration when making
to attend the AGM and are provided decisions to pay interim and propose final
with the opportunity to ask dividends for each year. Further details regarding
questions and engage with the dividends for the year under review can be
Directors and the Manager. found in the Chairman's Statement in the Annual
Shareholders are also encouraged Report.
to exercise their right to Share buy-back policy - the Directors recognise
vote on the resolutions proposed the importance to Shareholders of the Company
at the AGM. In respect of the maintaining an active buy-back policy and
2021 AGM, please note the guidance considered this when establishing the current
in the Chairman's Statement. programme. Further details can be found in
Shareholder documents - the the Chairman's Statement and in the Directors'
Company reports formally to Report in the Annual Report.
Shareholders by publishing Offer for Subscription - in making a decision
Annual and Interim Reports, to launch an Offer for Subscription, the Directors
normally in March and July considered that it would be in the interest
each year. In the instance of Shareholders to continue to grow the portfolio
of a corporate action taking and make investments across a diverse range
place, the Board will communicate of sectors. By growing the Company, costs
with Shareholders through the are spread over a wider asset base, which
issue of a Circular and, if helps to promote a competitive total expense
required, a Prospectus. ratio, which is in the interests of Shareholders.
In addition, significant matters In addition, the increased liquidity helps
or reporting obligations are support the buy-back policy referred to above.
disseminated to Shareholders Further details regarding the latest Offer
by way of Stock Exchange Announcements. for Subscription can be found in the Chairman's
The Secretary acts as a key Statement.
point of contact for the Board Liquidity management - in order to generate
and communications received income and add value for Shareholders, the
from Shareholders are circulated Board has an active liquidity management policy,
to the whole Board. which has the objective of generating income
from the cash held prior to investment. Further
details regarding the liquidity management
policy can be found in the Investment Manager's
Report in the Annual Report.
=======================================================
Environment and society The Directors and the Manager are aware of
The Directors and the Manager their duty to act in the interests of the
take account of the social Company and acknowledge that there are risks
environment and ethical factors associated with investment in companies that
impacted by the Company and fail to conduct business in a socially responsible
the investments that it makes. manner.
Further details can be found in the Statement
of Corporate Governance in the Annual Report.
=======================================================
Portfolio companies The Directors are aware that the exercise
Quarterly Board Meetings - of voting rights is key to promoting good
the Manager reports to the corporate governance and, through the Manager,
Board on the portfolio companies ensures that the portfolio companies are encouraged
and the Directors challenge to adopt best practice corporate governance.
the Manager if they feel it The Board has delegated the responsibility
is appropriate. The Manager for monitoring the portfolio companies to
then communicates directly the Manager and has given it discretion to
with each portfolio company, vote in respect of the Company's holdings
normally through the Maven in the investment portfolio, in a way that
representative who sits on reflects the concerns and key governance matters
the board of the portfolio discussed by the Board. From time to time,
company. the management teams of investee companies
give presentations to the Board. 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.
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 on valuations,
risk management and fundraising.
=======================================================
Manager The Manager is responsible for implementing
Quarterly Board Meetings - the investment objective and the strategy
the Manager attends every Board agreed by the Board. In making a decision
Meeting and presents a detailed to launch any Offer for Subscription, the
portfolio analysis and reports Board needs to consider that the Company requires
on key issues such as VCT compliance, to have sufficient liquidity to continue to
investment pipeline and utilisation expand and broaden the investment portfolio
of any new monies raised. in line with the strategy, including the provision
of follow-on funding, as referred to above.
=======================================================
Registrar The Directors review the performance of all
Annual review meetings and third party service providers on an annual
control reports. basis, including ensuring compliance with
GDPR.
=======================================================
Custodian The Directors review the performance of all
Regular statements and control third party providers on an annual basis,
reports received, with all including oversight of securing the Company's
holdings and balances reconciled. assets.
=======================================================
Employee, Environmental and Human Rights Policy
The Company has no direct employee or environmental
responsibilities, nor is it directly responsible for the emission
of greenhouse gases. The Board's principal responsibility to
Shareholders is to ensure that the investment portfolio is managed
and invested properly. The Company has no employees and,
accordingly, has no requirement to report separately on employment
matters. The Board comprises three male Directors and delegates
responsibility for diversity to the Nomination Committee, as
explained in the Statement of Corporate Governance in the Annual
Report. The management of the portfolio is undertaken by the
Manager through members of its portfolio management team.
The Manager engages with the Company's underlying investee
companies in relation to their corporate governance practices and
in developing their policies on social, community and environmental
matters and further information can be found in the Statement of
Corporate Governance in the Annual Report. Additional work is being
carried out by the Manager to establish a framework for the
effective capture of ESG information, consistently across all
investee companies. The Manager will be overseeing the collation of
this information for the benefit of the Board but will also be
supporting individual companies to identify ESG risks and
opportunities and, where potential improvements are identified,
will work jointly with investee businesses to make positive
changes.
In light of the nature of the Company's business, there are no
relevant human rights issues and, therefore, the Company does not
have a human rights policy.
Auditor
The Company's Auditor is required to report if there are any
material inconsistencies between the content of the Strategic
Report and the Financial Statements. The Independent Auditor's
Report can be found in the Annual Report.
Future Strategy
The Board and Manager intend to maintain the policies set out
above for the year ending 30 November 2021, as it is believed that
these are in the best interests of Shareholders.
Approval
The Business Report, and the Strategic Report as a whole, was
approved by the Board of Directors and signed on its behalf by:
Graham Miller
Director
15 March 2021
Income Statement
For the year ended 30 November 2020
Year ended 30 November Year ended 30 November
2020 2019
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- -------- -------- -------- --------
Gains on investments - 1,442 1,442 - 960 960
Income from investments 473 - 473 607 - 607
Other income 28 - 28 49 - 49
Investment management
fees (239) (718) (957) (198) (593) (791)
Other expenses (330) - (330) (306) - (306)
---------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary
activities before taxation (68) 724 656 152 367 519
Tax on ordinary activities 33 (33) - (7) 7 -
---------------------------- -------- -------- -------- -------- -------- --------
Return attributable to
Equity Shareholders (35) 691 656 145 374 519
---------------------------- -------- -------- -------- -------- -------- --------
Earnings per share (pence) (0.03) 0.55 0.52 0.12 0.32 0.44
---------------------------- -------- -------- -------- -------- -------- --------
All gains and losses are recognised in the Income Statement.
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 2020
Year ended 30 November 2020
Non Distributable Reserves Distributable Reserves
Share Capital Capital Capital Special
Share premium redemption reserve reserve distributable Revenue
capital account reserve unrealised realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2019 12,608 23,180 3,955 (2,803) - 11,260 (1,076) 47,124
Net return - - - (292) 1,734 (751) (35) 656
Cancellation of share
premium account - (23,180) - - - 23,180 - -
Cancellation of capital
redemption reserve - - (3,955) - - 3,955 - -
Share premium
cancellation
costs - (10) - - - - - (10)
Dividends paid - - - - - (1,882) (123) (2,005)
Repurchase and
cancellation
of shares (218) - 218 - - (675) - (675)
Net proceeds of DIS
issue 15 31 - - - - - 46
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2020 12,405 21 218 (3,095) 1,734 35,087 (1,234) 45,136
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
Year ended 30 November 2019*
Non Distributable Reserves Distributable Reserves
Share Capital Capital Capital Special
Share premium redemption reserve reserve distributable Revenue
capital account reserve unrealised realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2018 7,527 8,816 3,752 (3,530) (24,615) 37,531 (1,221) 28,260
Net return - - - 727 233 (586) 145 519
Share premium
cancellation
costs - (1) - - - - - (1)
Dividends paid - - - - - (634) - (634)
Repurchase and
cancellation
of shares (203) - 203 - - (669) - (669)
Net proceeds of share
issue 5,269 14,329 - - - - - 19,598
Net proceeds of DIS
issue 15 36 - - - - - 51
Transfer between
distributable
reserves* - - - - 24,382 (24,382) - -
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
At 30 November 2019 12,608 23,180 3,955 (2,803) - 11,260 (1,076) 47,124
------------------------- -------- -------- ----------- ----------- --------- -------------- -------- --------
*Refer to Note 1 to the Financial Statements in the Annual
Report.
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 that are
distributable.
The Notes are an integral part of the Financial Statements and
can be found in full in the Annual Report.
Balance Sheet
As at 30 November 2020
30 November 2020 30 November 2019*
GBP'000 GBP'000
------------------------------------ ---------------- -----------------
Fixed assets
Investments at fair value through
profit or loss 33,821 28,555
Current assets
Debtors 242 286
Cash 11,543 18,648
------------------------------------ ---------------- -----------------
11,785 18,934
Creditors
Amounts falling due within one
year (470) (365)
------------------------------------ ---------------- -----------------
Net current assets 11,315 18,569
------------------------------------ ---------------- -----------------
Net assets 45,136 47,124
------------------------------------ ---------------- -----------------
Capital and reserves
Called up share capital 12,405 12,608
Share premium account 21 23,180
Capital redemption reserve 218 3,955
Capital reserve - unrealised (3,095) (2,803)
Capital reserve - realised 1,734 -
Special distributable reserve 35,087 11,260
Revenue reserve (1,234) (1,076)
------------------------------------ ---------------- -----------------
Net assets attributable to Ordinary
Shareholders 45,136 47,124
------------------------------------ ---------------- -----------------
Net asset value per Ordinary Share
(pence) 36.38 37.37
------------------------------------ ---------------- -----------------
*Refer to Note 1 to the Financial Statements in the Annual
Report.
The Financial Statements of Maven Income and Growth VCT 5 PLC,
registered number 4084875, were approved and authorised for issue
by the Board of Directors on 15 March 2021 and were signed on its
behalf by:
Graham Miller
Director
15 March 2021
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 2020
Year ended 30 November Year ended 30 November
2020 2019
GBP'000 GBP'000
-------------------------------------- ---------------------- ----------------------
Net cash flows from operating
activities
Cash flows from investing activities (720) (519)
Purchase of investments (7,196) (6,821)
Sale of investments 3,549 2,107
-------------------------------------- ---------------------- ----------------------
Net cash flows from investing
activities (3,647) (4,714)
-------------------------------------- ---------------------- ----------------------
Cash flows from financing activities
Equity dividends paid (2,005) (634)
Issue of Ordinary Shares 46 19,649
Share premium cancellation
costs (10) (1)
Repurchase of Ordinary Shares (769) (495)
-------------------------------------- ---------------------- ----------------------
Net cash flows from financing
activities (2,738) 18,519
-------------------------------------- ---------------------- ----------------------
Net (decrease) / increase in
cash (7,105) 13,286
-------------------------------------- ---------------------- ----------------------
Cash at beginning of year 18,648 5,362
Cash at end of year 11,543 18,648
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 2020
1. Accounting policies
The Company is a public limited company, incorporated in England
and Wales and its registered office is shown in the Corporate
Summary in the Annual Report.
(a) Basis of preparation
The Financial Statements have been prepared on a going concern
basis including an assessment of the impact of COVID-19 on the
finances of the Company, as covered 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 Association of Investment Companies (AIC) in October
2019.
Change in presentation of 2019 Statement of Changes in Equity
and Balance Sheet - in previous years, capital expenses and
dividends were recorded through the capital reserve realised. The
nature of this treatment created a large deficit position that
continued to build. In order to improve the transparency of
distributable reserves, capital expenses and dividends are now
recorded through the special distributable reserve. A one-off prior
year re-classification has been reflected in the statement of
changes in equity to clear the originating deficit position. This
disclosure change has no impact on the profit and loss account or
NAV.
(b) Income
Dividends receivable on equity shares and unit trusts are
treated as revenue for the period on an ex-dividend basis. Where no
ex-dividend date is available dividends receivable on or before the
year end are treated as revenue for the period. Provision is made
for any dividends not expected to be received. The fixed returns on
debt securities and non-equity shares are recognised on a time
apportionment basis so as to reflect the effective interest rate on
the debt securities and shares. Provision is made for any fixed
income not expected to be received. Interest receivable from cash
and short term deposits and interest payable are accrued to the end
of the year.
(c) Expenses
All expenses are accounted for on an accruals basis and charged
to the income statement. Expenses are charged through the revenue
account except as follows:
-- expenses which are incidental to the acquisition and disposal
of an investment are charged to capital; and
-- expenses are charged to the special distributable reserve
where a connection with the maintenance or enhancement of the value
of the investments can be demonstrated. In this respect, the
investment management fee and performance fee have been allocated
25% to revenue and 75% to the special distributable reserve to
reflect the Company's investment policy and prospective income and
capital growth.
(d) Taxation
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the Balance
Sheet date, where transactions or events that result in an
obligation to pay more tax in the future or right to pay less tax
in the future have occurred at the Balance Sheet date. This is
subject to deferred tax assets only being recognised if it is
considered more likely than not that there will be suitable profits
from which the future reversal of the underlying timing differences
can be deducted. Timing differences are differences arising between
the Company's taxable profits and its results as stated in the
Financial Statements which are capable of reversal in one or more
subsequent periods.
Deferred tax is measured on a non-discounted basis at the tax
rates that are expected to apply in the periods in which timing
differences are expected to reverse, based on tax rates and laws
enacted or substantively enacted at the Balance Sheet date.
The tax effect of different items of income/gain and
expenditure/loss is allocated between capital reserves and revenue
account on the same basis as the particular item to which it
relates using the Company's effective rate of tax for the
period.
UK corporation tax is provided at amounts expected to be
paid/recovered using the tax rates and laws that have been enacted
or substantively enacted at the Balance Sheet date.
(e) Investments
In valuing unlisted investments, the Directors follow the
criteria set out below. These procedures comply with the revised
International Private Equity and Venture Capital Valuation
Guidelines (IPEVCV) 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 with reference to the price of
recent investment, calibrating for any material change in the
trading circumstances of the investee company. Other early stage
investments are valued using a milestone approach, in particular
where it is considered there are no deemed current or short-term
future maintainable earnings or positive cashflows.
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. In the absence of evidence of a deterioration, or strong
defensible evidence of an increase in value, the fair value is
determined to be that reported at the previous Balance Sheet
date.
5. All unlisted investments are valued individually by the
portfolio management team of Maven Capital Partners UK LLP. The
resultant valuations are subject to detailed scrutiny and approval
by the Directors of the Company.
6. In accordance with normal market practice, investments listed
on the Alternative Investment Market 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) 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
non-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 2020 30 November 2019
------------------------------------ ----------------- -----------------
The returns per share have been
based on the following figures:
Weighted average number of Ordinary
Shares 125,305,497 117,646,559
Revenue return (GBP35,000) GBP145,000
Capital return GBP691,000 GBP374,000
------------------------------------ ----------------- -----------------
Total return GBP656,000 GBP519,000
------------------------------------ ----------------- -----------------
Net asset value per Ordinary Share
The net asset value per Ordinary Share as at 30 November 2020
has been calculated using the number of Ordinary Shares in issue at
that date of 124,055,920 (2019: 126,086,158).
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge:
-- the Financial Statements have been prepared in accordance
with the applicable accounting standards and give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company as at 30 November 2020 and for the year to that
date;
-- the Directors' Report includes a fair review of the
development and performance of the Company, together with a
description of the principal risks and uncertainties that it faces;
and
-- the Annual Report and Financial Statements taken as a whole
is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company's position and
performance, business model and strategy.
Other information
The Annual General Meeting will be held on Tuesday, 27 April
2021, commencing at 11.30am, at the offices of Maven Capital
Partners UK LLP, Kintyre House, 205 West George Street, Glasgow G2
2LW. As highlighted in the Chairman's Statement, in light of the
current Government advice against all non-essential travel and
public gatherings, Shareholders will be unable to attend the AGM in
person.
Copies of this announcement and copies of the Annual Report and
Financial Statements for the year ended 30 November 2020, will be
available to the public at the offices of Maven Capital Partners UK
LLP, Kintyre House, 205 West George Street, Glasgow G2 2LW; at the
registered office of the Company, Fifth Floor, 1-2 Royal Exchange
Buildings, London EC3V 3LF and on the Company's website at
www.mavencp.com/migvct5.
The Annual Report and Financial Statements for the year ended 30
November 2020 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 2019 have been delivered
to the Registrar of Companies and contained an audit report which
was unqualified and did not constitute statements under S498(2) or
S498(3) of the Companies Act 2006.
Neither the content of the Company's website nor the contents of
any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into, or forms part of, this
announcement.
The 2020 Annual Report will be submitted to the National Storage
Mechanism and will be available for inspection at:
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.
By order of the Board
Maven Capital Partners UK LLP
Secretary
15 March 2021
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END
FR UVOVRAUUOAAR
(END) Dow Jones Newswires
March 15, 2021 11:37 ET (15:37 GMT)
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