TIDMMIG1
RNS Number : 2262A
Maven Income & Growth VCT PLC
03 June 2016
Maven Income and Growth VCT PLC
Final results for the year ended 29 February 2016
The Directors are pleased to report the Company's financial
results for the year ended 29 February 2016.
Highlights for the Year
-- NAV total return of 135.2p per share (2015: 128.7p) at the
year end, up 5.1% over the year
-- NAV at period end of 68.1p per share (2015: 67.5p) after
payment of dividends totalling 5.9p during the year
-- Three new private equity investments added to the portfolio
-- Realisation of Westway Services Holdings for a total return of 6.5 times cost
-- Exit from Steminic, generating a total return multiple of 3.3 times cost
-- Disposal of XPD8 Solutions for a total return of 1.75 times cost
-- Sale of Dantec Hose, delivering a 2.1 times total return on cost
-- Exit from Six Degrees Group, generating a 2.1 times total return on cost
-- Second interim dividend of 2.4p per share declared and final
dividend of 1.2p per share proposed (2015 final: 3.5p)
Chairman's Statement
Your Board is pleased to report that the year to 29 February
2016 has been another successful period for your Company. During
the year NAV total return increased by 5.1%, representing the
seventh consecutive year of growth. In recognition of this positive
performance the Board is pleased to recommend an uplift in the full
year dividend to 6.0p per share, an increase of 1.7% over the prior
year.
In the period under review your Company has continued to deliver
against its core objectives of long term capital appreciation and
steady improvement in Shareholder returns. This is demonstrated by
the five profitable exits achieved during the year, the most
notable of which was the sale of Westway Services Holdings, which
completed in December 2015 and generated a return of 6.5 times cost
over the life of the investment. In addition, three new private
equity investments were completed consistent with the strategy of
building a diversified portfolio of robust, growth businesses. The
Board believes that your Company has a high quality asset base
capable of maintaining the payment of tax-free distributions to
Shareholders and is proposing an increase in the full year dividend
to 6.0p per share, an uplift of 1.7% over the previous period.
The majority of investee companies are trading well, as can be
seen from the detailed analysis of portfolio developments included
in the Investment Manager's Review on pages 18 to 22 of the Annual
Report. Further progress has been achieved during the year by
Crawford Scientific, Just Trays, John McGavigan, Nenplas and SPS
(EU), which has enabled the Board to increase the valuation of
those investments. Others such as CatTech International, D Mack,
ISN Solutions Group and R&M Engineering Group have had their
valuations reduced in response to challenging market
conditions.
The Board is also pleased to note that Maven received industry
recognition for its performance during the year when it was named
Private Equity House of the Year at the 2015 M&A Awards, one of
the leading events in the corporate finance calendar. This category
recognises private equity managers that have displayed the keenest
judgement and opportunism in completing acquisitions or exit
transactions, including an acknowledgement of their contribution in
increasing the value of investee businesses. Maven was also
shortlisted at the 2015 unquote" British Private Equity Awards in
the VCT House of the Year category, whilst the 3.8 times cost exit
achieved by your Company from EFC Group was nominated for VCT Exit
of the Year.
Shareholders may be aware of the significant legislative changes
which were introduced to the UK VCT scheme during the period. The
July 2015 Budget announced a number of amendments designed to bring
the UK into line with European Union (EU) State Aid Rules for
smaller company investment. The revised legislation imposes
restrictions on the types of transactions and companies that VCTs
are able to invest in, with strict limitations around acquisitions
(specifically prohibiting the financing of management buy-outs), an
age limit on investee companies at the time of investment, a
lifetime cap on the amount of funding a company can receive, and
restrictions on providing follow-on funding to existing portfolio
companies. The Board has reviewed the new legislation and,
following detailed discussions with the Manager, has concluded that
Maven remains well placed to adapt to the new requirements of a
much changed regulatory and investment landscape. The Directors
believe that Maven's track record and experience in sourcing and
executing similar transactions for non-VCT clients, for whom over
40 development capital transactions have been completed since 2011,
provides the Manager with sufficient flexibility and resource to
identify and complete transactions which will qualify under the new
rules.
Dividends
The Directors intend that the full dividend for the year ended
29 February 2016 should be 6.0p per Ordinary Share (2015: 5.9p), of
which 2.4p was paid as an interim dividend on 27 November 2015.
Furthermore, in order to ensure that the Company will continue to
comply with the VCT regulations at all times, part of the balance
of the distribution for the year is to be paid as a second interim
dividend.
Therefore, the Directors declared on 26 April 2016 that a second
interim dividend in respect of the year ended 29 February 2016, of
2.4p per Ordinary Share, was to be paid on 27 May 2016 to
Shareholders on the register at close of business on 6 May 2016.
Thereafter, subject to the approval of Shareholders at the Annual
General Meeting to be held on 7 July 2016, the Directors also
propose that a final dividend in respect of the year ended 29
February 2016, of 1.2p per Ordinary Share, be paid on 15 July 2016
to Shareholders on the register at close of business on 17 June
2016. This total dividend for the year of 6.0p per share represents
an increase of 1.7% over the prior year and a yield of 9.2% based
on the year end closing mid-market share price of 65.5p.
Since the Company's launch, and after receipt of the second
interim and proposed final dividends, Shareholders will have
received 70.7p per share in tax-free dividends. The effect of
paying the proposed final dividend would be to reduce the NAV of
the Company by the total cost of the distribution.
On 24 August 2015 the Board announced that, under the Terms and
Conditions of the Company's Dividend Investment Scheme (DIS) which
allow the Directors to suspend or terminate its operation without
prior notice and revert to making monetary payments to all
Participants, the Directors had resolved that, in light of the
investment restrictions proposed in the Government's July 2015
Budget, the DIS was to be suspended with immediate effect to allow
the Directors and the Manager to review the changes to the VCT
legislation and to consider the potential impact of these on the
Company's future investment strategy. As a result, until further
notice, all future dividends will be paid to Shareholders by either
cheque or direct bank transfer using existing mandate
instructions.
Fund Raising
In October 2014 the Company announced that it planned to raise
up to GBP4.0 million in an Offer for Subscription alongside offers
by four other Maven VCTs. The Offer by your Company was fully
subscribed by 20 January 2015 and, consequently, closed early.
Relevant details regarding shares issued during the year under
review in respect of the Offer can be found in Note 12 to the
Financial Statements.
As the Company currently enjoys significant cash liquidity for
new investment, the Board elected not to raise further funds in the
2015/16 tax year.
Share Buy-backs
Shareholders should be aware that the Board's primary objective
is for the Company to retain sufficient liquid assets for making
investments in line with its stated policy and for the continued
payment of dividends to Shareholders. However, the Directors also
acknowledge the need to maintain an orderly market in the Company's
shares and have delegated authority to the Manager to buy back
shares in the market for cancellation or to be held in treasury. 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 5% and 10%
to the prevailing NAV per share. Shares may also be bought back at
prices out with this discount range, but only when it is considered
to be in the best interests of all Shareholders.
Management and Administration Fees
HM Revenue & Customs (HMRC) has confirmed that VAT is no
longer payable on secretarial fees. The Manager has sought recovery
of amounts paid previously and the total sum of GBP47,000 received
during the year has been reflected in the Financial Statements.
Regulatory Developments
The July 2015 Budget received Royal Assent on 18 November 2015,
bringing into statute a number of material changes to the
legislation governing the UK VCT scheme, aligning it with EU State
Aid Rules for smaller company investment. The new rules impose
specific restrictions on the types of companies and transactions
which VCTs are able to pursue in order to retain qualifying status,
including a VCT's ability to finance management buy-outs and
acquisitions, an age limit for investee companies, a lifetime cap
on the amount of funding a company can receive and limitations on
the ability to provide existing portfolio companies with follow-on
funding. In order to ensure ongoing compliance with the new rules
the Manager has engaged the services of an adviser to assist in
interpreting the revised legislation in relation to proposed new
transactions.
Since the announcement of the new rules the Manager has been
actively involved in a consultation process through the industry
representative body the Association of Investment Companies (AIC)
which, supported by other leading VCT managers, has engaged with HM
Treasury and HMRC on the practical application of the new rules.
These discussions are ongoing and the Board will ensure
Shareholders are kept up to date on any further developments.
The 2014 UK Corporate Governance Code introduced a new
requirement, in respect of financial periods commencing on or after
1 October 2014, for companies to include a viability statement
regarding the Directors' assessment of the future prospects of the
Company. The Board has considered fully the Company's current
position, principal risks and future expectations, and the
Directors' statement of viability can be found on pages 32 and 33
of the Annual Report.
With effect from 1 January 2016, new tax legislation under the
OECD (Organisation for Economic Co-operation and Development)
Common Reporting Standard for Automatic Exchange of Financial
Account Information (the Common Reporting Standard) is being
introduced. The legislation will require investment trusts and VCTs
to provide personal information to HMRC on certain investors who
purchase shares in investment trusts and VCTs. As a result, the
Company will have to provide information annually to the local tax
authority on the tax residencies of a number of non-UK based
certificated shareholders and corporate entities.
All new Shareholders, excluding those whose shares are held in
CREST, entered onto the share register from 1 January 2016 will be
sent a certification form for the purposes of collecting this
information. For further information, please see HMRC's Quick
Guide: Automatic Exchange of Information - information for account
holders at https://www.gov.uk/
government/publications/exchange-of-information-accountholders.
Annual General Meeting (AGM)
As indicated in previous Annual Reports, in order to allow a
wider range of Shareholders the opportunity to meet the Directors
and the Manager, the AGM has been held in Glasgow and London in
alternate years. Due to levels of Shareholder attendance at the
respective venues, the Board has decided that most AGMs should be
held in London. Therefore, the 2016 AGM will be held in the
Manager's London office on 7 July 2016, and the Notice of Annual
General Meeting can be found on pages 72 to 76 of the Annual
Report.
The Future
Your Company has achieved significant success by following a
proven strategy of investing in a diversified portfolio of private
companies capable of generating regular income and capital
appreciation. The introduction of the new VCT rules will result in
an adjustment to this strategy, requiring the Manager to consider
investing in earlier stage businesses with growth capital
requirements, as opposed to focusing on management buy-out or
acquisition based transactions which have historically provided a
more predictable revenue stream. Whilst this revised approach will,
over time, alter the composition of the asset base, your Board is
confident that Maven's strong track record and stringent selection
process, supported by the strength of the existing portfolio, will
enable your Company to deliver growth whilst supporting the
distribution of tax-free returns to Shareholders.
John Pocock
Chairman
3 June 2016
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 in this report.
Investment Objective
The Company aims to achieve long term capital appreciation and
generate maintainable levels of income for Shareholders.
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/ISDX quoted companies which meet the criteria for
VCT qualifying investments and have strong growth potential;
-- investing no more than GBP1 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 Company had no borrowings as at 29 February 2016 and, as at
the date of this Report, the Board has no intention of utilising
the borrowing facility.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Company are as
follows:
Investment Risk
Many of the Company's investments are in small and medium sized
unlisted and AIM/ ISDX quoted companies which, by their nature,
entail a higher level of risk and lower liquidity than investments
in large quoted companies. The Board aims to limit the risk
attaching to the investment portfolio as a whole by ensuring that a
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;
-- seeking to appoint a non-executive director to the board of
each private investee company, provided from the Manager's
investment management team or from its pool of experienced
independent directors;
-- co-investing with other funds run by the Manager in larger
deals, which tend to carry less risk;
-- not investing in hostile public to private transactions; and
-- retaining the services of a Manager that can provide the
resources required to achieve the investment objective and meet the
criteria stated above.
An explanation of certain risks and how they are managed is
contained in Note 16 to the Financial Statements.
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 or cash equivalents in order to finance any new
unquoted investment opportunities. The Company has no 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.
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.
Internal Control Risk
The Board reviews regularly the system of internal controls,
both financial and non-financial, operated by the Company and the
Manager. These include controls designed to ensure that the
Company's assets are safeguarded and that all records are complete
and accurate.
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 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
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 enacted through the Finance Act 2015.
Legislative and Regulatory Risk
In order to maintain its approval as a VCT, the Company is
required to comply with VCT legislation in the UK as well as the EU
State Aid Rules.
Changes in the future to UK legislation or the EU State Aid
Rules 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
and the British Venture Capital Association (BVCA).
The Company has retained Gowling WLG (UK) LLP as VCT
advisers.
Breaches of other regulations, including the Companies Act 2006,
the FCA Listing Rules, the FCA Disclosure and Transparency Rules or
the Alternative Investment Fund Managers Directive (AIFMD), could
lead to a number of detrimental outcomes and reputational
damage.
The AIFMD, which regulates the management of alternative
investment funds, including VCTs, was fully implemented with effect
from 22 July 2014 and introduced a new authorisation and
supervisory regime for all investment companies in the EU. The
Board is approved by the FCA as a self-managed small registered UK
AIFM under the AIFMD.
As referred to in the Chairman's Statement, the Company requires
to comply with new tax legislation under the Common Reporting
Standards. The Company has appointed Capita Asset Services to act
on behalf of the Company to report annually to HMRC and to ensure
compliance with this new legislation.
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 the Investment
Manager's Review. A review of the Company's business, its position
as at 29 February 2016 and its performance during the year then
ended is included in the Chairman's Statement, which also includes
an overview of the Company's strategy and business model.
The management of the investment portfolio has been delegated to
Maven Capital Partners UK LLP (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 network of offices which supply new
deals and enable it to monitor the geographically widespread
portfolio of companies effectively.
The Investment Portfolio Summary on pages 29 and 30 of 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 on pages 16
and 17 of the Annual Report shows that the portfolio is diversified
across a variety of sectors and deal types. The level of VCT
qualifying investment is monitored by the Manager on a daily basis
and reported to the Risk Committee quarterly.
Key Performance Indicators
At each Board Meeting the Directors consider a number of
financial performance measures to assess the Company's success in
achieving its objectives, and these also enable Shareholders and
investors to gain an understanding of its business. The key
performance indicators are as follows:
-- NAV total return;
-- dividend growth;
-- share price discount to NAV;
-- investment income; and
-- operational expenses.
The NAV total return is a measure of Shareholder value that
includes both the current NAV per share and the sum of dividends
paid to date. The dividend growth measure shows how much of that
Shareholder value has been returned to original investors in the
form of dividends. A historical record of these measures is shown
in the Financial Highlights on pages 5 and 6 of the Annual Report
and the profile of the portfolio is reflected in the Summary of
Investment Changes on page 12. The Board reviews the Company's
investment income and operational expenses on a quarterly
basis.
There is no meaningful venture capital trust index against which
to compare the financial performance of the Company but, for
reporting to the Board and Shareholders, the Manager uses
comparisons with appropriate indices and the Company's peer group.
The Directors also consider non- financial performance measures
such as the flow of investment proposals and the Company's ranking
within the VCT sector by independent analysts.
Valuation Process
Investments held by Maven Income and Growth VCT 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 are valued at their bid
prices.
Share Buy-backs
The Board will seek the necessary Shareholder authority to
continue to conduct a share buy-back programme under appropriate
circumstances.
Employee, Environmental and Human Rights Policy
The Company has no direct employee or environmental
responsibilities, nor is it 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 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 may be found in the Statement of
Corporate Governance on page 45 of the Annual Report. In light of
the nature of the Company's business, there are no relevant human
rights issues and, therefore, the Company does not have a human
rights policy.
Auditor
The Company's Auditor is required to report if there are any
material inconsistencies between the content of the Strategic
Report and the Financial Statements. The Independent Auditor's
Report can be found on pages 51 to 54 of the Annual Report.
Future Strategy
The Board and Manager intend to maintain the policies set out
above for the year ending 28 February 2017, as it is believed that
these are in the best interests of Shareholders.
John Pocock
Chairman
3 June 2016
Maven Income and Growth VCT PLC
Income Statement
For the year ended 29 February 2016
Year ended Year ended
29 February 2016 28 February 2015
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income and
deposit interest 2,024 - 2,024 1,502 - 1,502
Investment management
fees (138) (552) (690) (122) (488) (610)
Other expenses (261) - (261) (355) - (355)
Gains on investments - 2,792 2,792 - 2,173 2,173
Net return on ordinary
activities before taxation 1,625 2,240 3,865 1,025 1,685 2,710
Tax on ordinary activities (282) 111 (171) (206) 100 (106)
Return attributable
to Equity Shareholders 1,343 2,351 3,694 819 1,785 2,604
Earnings per share (pence) 2.5 4.3 6.8 1.7 3.7 5.4
A Statement of Total Recognised Gains and Losses has not been
prepared, as 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 derives
its income from investments made in shares, securities and bank
deposits.
The total column of this Statement is the Profit and Loss
Account of the Company.
Reconciliation of Movements in Shareholders'
Funds
For the year ended 29 February 2016
Year ended Year ended
29 February 28 February
2016 2015
GBP'000 GBP'000
Opening Shareholders' funds 36,291 31,212
Net return for year 3,694 2,604
Net proceeds of share issue 263 5,459
Net proceeds of DIS issue 46 -
Repurchase and cancellation
of shares (193) (155)
Dividends paid - revenue (980) (960)
Dividends paid - capital (2,232) (1,869)
Closing Shareholders' funds 36,889 36,291
Balance Sheet
As at 29 February 2016
29 February 28 February
2016 2015
GBP'000 GBP'000
Investments at fair value
through profit or loss 34,827 31,255
Current assets
Debtors 793 4,749
Cash 1,580 478
2,373 5,227
Creditors
Amounts falling due within
one year (311) 191
Net current assets 2,062 5,036
Net assets 36,889 36,291
Capital and reserves
Called up share capital 5,420 5,380
Share premium account 10,253 10,013
Capital reserve - realised (9,215) (9,609)
Capital reserve - unrealised 2,795 3,070
Special distributable reserve 26,417 26,610
Capital redemption reserve 227 198
Revenue reserve 992 629
Net assets attributable to
Shareholders 36,889 36,291
Net asset value per Ordinary
Share (pence) 68.1 67.5
The Financial Statements of Maven Income and Growth VCT PLC,
registered number 3908220, were approved and authorised for issue
by the Board of Directors on 3 June 2016 on its behalf by:
John Pocock
Director
Cash Flow Statement
For the Year Ended 29 February 2016
Year ended
28 February
Year ended 2015
29 February
2016 (restated)*
GBP'000 GBP'000
------------------------------- ----------------------- ----------------------
Net cash flows from operating
activities (1,003) (1,107)
Cash flows from investing
activities
Investment income received 2,038 1,680
Deposit interest received - 2
Purchase of investments (27,066) (13,768)
Sale of investments 26,525 13,419
Net cash flows from investing
activities 1,497 1,333
Cash flows from financing
activities
Equity dividends paid (3,212) (2,829)
Issue of Ordinary Shares 4,013 1,755
Repurchase of Ordinary Shares (193) (155)
Net cash flows from financing
activities 608 (1,229)
Net increase/(decrease) in
cash 1,102 (1,003)
Cash at beginning of year 478 1,481
Cash at end of year 1,580 478
*The 2015 cash flow has been restated for the presentational
requirements of FRS 102.
Notes
Accounting Policies
(a) Basis of Preparation
The Financial Statements have been prepared under 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 November 2014. This is the first
year that the Company has presented its Financial Statements under
the Financial Reporting Standard 102 (FRS 102) issued by the
Financial Reporting Council. The date of transition to FRS 102 is 1
March 2014. There are no significant changes to the Company's
accounting policies as a result of the adoption of FRS 102 and the
SORP.
(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 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 realised capital reserves where a
connection with the maintenance or enhancement of the value of the
investments can be demonstrated. In this respect the investment
management fee has been allocated 20% to revenue and 80% to
realised capital reserves 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 investments completed prior to the reporting date and
those at an early stage in their development, fair value is
determined using the Price of Recent Investment Method, except that
adjustments are made when there has been a material change in the
trading circumstances of the company or a substantial movement in
the relevant sector of the stock market.
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
prospective earnings to determine the enterprise value of the
company.
3.1 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.
3.2 Preference shares, debentures and loan stock are valued
using the Price of Recent Investment Method. When a redemption
premium has accrued, this will only be valued if there is a
reasonable prospect of it being paid. Preference shares which carry
a right to convert into ordinary share capital are valued at the
higher of the Price of Recent Investment Method basis and the
price/earnings basis, both described above.
4. Where there is evidence of impairment, a provision may be
taken against the previous valuation of the investment
5. 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.
6. 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.
7. 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 (ie developed using market data) for
the asset or liability, either directly or indirectly; and
- Level 3 - inputs are unobservable (ie 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.
Year ended 29 February 2016
Share Capital Capital Special Capital
premium reserve reserve distributable redemption Revenue
account realised unrealised reserve reserve reserve
Movement in
reserves GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------------- ------------ ----------- --------------- ---------------- ------------------
At 1 March 2015 10,013 (9,609) 3,070 26,610 198 629
Gains on sale - 3,067 - - - -
of investments
Net decrease - - (275) - - -
in value of
investments
Investment - (552) - - - -
management
fees
Dividends paid - (2,232) - - - (980)
Tax effect of - 111 - - - -
capital items
Repurchase and
cancellation
of shares - - - (193) 29 -
Share issue 202 - - - - -
DIS share issue 38 - - - - -
Net return on
ordinary
activities
after taxation - - - - - 1,343
At 29 February
2016 10,253 (9,215) 2,795 26,417 227 992
Year ended Year ended
29 February 28 February 2015
2016
Weighted average number of
Ordinary Shares 54,383,852 48,061,685
Revenue return GBP1,343,000 GBP819,000
Capital return GBP2,351,000 GBP1,785,000
Total return GBP3,694,000 GBP2,604,000
The full Notes to the Financial Statements are contained in the
Annual Report.
Net Asset Value per Ordinary Share
Net asset value per Ordinary Share as at 29 February 2016 has
been calculated using the number of Ordinary Shares in issue at
that date of 54,197,884 (2015: 53,799,962).
Basis of Preparation of the Financial Statements
This Financial Statements included in this Announcement have
been prepared on the same basis as the Annual Report and Financial
Statements for the year ended 28 February 2015. The Annual Report
and Financial Statements for the year ended 29 February 2016 will
be filed with the Registrar of Companies and issued to Shareholders
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 28 February 2015 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.
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 29 February 2016 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
are fair, balanced and understandable and provide the information
necessary to assess the Company's position and performance,
business model and strategy.
Other Information
The Annual General Meeting will be held on 7 July 2016,
commencing at 12.00 noon at 5(th) Floor, 1-2 Royal Exchange
Buildings, London, EC3V 3LF.
Copies of this announcement, and of the Annual Report and
Financial Statements for the year ended 29 February 2016, will be
available to the public at the office of Maven Capital Partners UK
LLP, 205 West George Street, Glasgow G2 2LW; at the registered
office of the Company, Fifth Floor, 1-2 Royal Exchange Buildings,
London EC3V 3LF and on the Company's website at
http://www.mavencp.com/migvct.
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 and the Circular have been submitted to the
National Storage Mechanism will be available for inspection at:
www.morningstar.co.uk/uk/NSM.
By Order of the Board
Maven Capital Partners UK LLP
Secretary
3 June 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
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