Maven Income and Growth VCT PLC

Final results for the year ended 28 February 2023

The Directors are pleased to report the Company's financial results for the year ended 28 February 2023.

Highlights

·        NAV total return at the year end of 147.27p per share (2022: 146.25p)

·        NAV at the year end of 43.01p per share (2022: 44.34p), after dividend payments totalling 2.35p per share during the year

·        Interim dividend of 1.10p per share paid on 2 December 2022

·        Final dividend of 1.15p per share proposed for payment on 14 July 2023

·        Offer for Subscription closed on 26 May 2023, raising £6.74 million of new capital for the 2022/23 and 2023/24 tax years

Chairman's Statement

On behalf of your Board, I am pleased to present the 2023 Annual Report. Despite the uncertain macroeconomic backdrop, your Company has made further strategic progress and, in a difficult year for markets, has recorded a modest increase in NAV total return. This reflects the strength and diversity of the unlisted portfolio, where many private companies have continued to deliver revenue growth and achieve commercial milestones which, in certain cases, has resulted in uplifts to valuations. In contrast, it has been a volatile period for listed markets and this has had an impact on the value of your Company's AIM quoted portfolio. Encouragingly, your Company maintained a good level of M&A activity and during the year four profitable private company exits completed. Following these realisations, and consistent with the objective of maintaining a programme of regular Shareholder distributions, your Board is pleased to propose a final dividend of 1.15p per share for payment in July. This brings the annual yield to 5%, which is in line with your Company's dividend target.

Overview

During the financial year, the economic landscape has remained challenging, with hopes of a post-pandemic recovery overshadowed by the war in Ukraine. In addition to the human cost, the ongoing conflict has had a significant impact on most global economies, with the sharp spike in energy prices and disruption to international supply chains impacting market dynamics and growth prospects. In the UK, the energy price shock contributed to the high level of inflation and cost of living crisis which, alongside rising interest rates, created a difficult operating environment for many businesses and consumers. It is, however, encouraging to note that the outlook for the UK is now improving, with the domestic economy expected to avoid recession during 2023. Against a more stable backdrop, your Board remains optimistic that the Company can maintain growth and achieve its investment objective in the year ahead.

During the financial year, there has been further expansion and development of the portfolio through the addition of 10 new private company holdings, with follow-on funding also provided to support those companies that are achieving commercial targets and require additional capital to fully scale before progressing to exit. The Manager continues to see good demand for growth capital from ambitious and entrepreneurial private companies across its network of regional offices, and remains well placed to continue to source and execute high quality VCT qualifying investments.

In October 2022, your Company launched a new Offer for Subscription, alongside Offers by the other Maven managed VCTs. The Directors are pleased to confirm that the Offers closed on 26 May 2023, with your Company raising a total of £6.74 million. This additional capital will enable your Company to progress its investment strategy, which has the core objective of building a large and sectorally diversified portfolio of high growth private and AIM quoted companies that are capable of achieving scale and generating a capital gain on exit. With respect to future fund raisings, the Board and the Manager welcomed the announcement by the UK Government in September 2022 that tax relief for the VCT and EIS schemes would continue beyond 2025. The news that the period covered by the "sunset" clause will be extended removes uncertainty for investors and allows entrepreneurial SMEs to continue to access this important source of growth capital.

This has been a year of further progress for the early stage unlisted portfolio, where the majority of companies have achieved strategic and operational growth objectives, which has merited uplifts to certain valuations to reflect the sustained progress. Your Company also benefits from a portfolio of later stage private companies, completed prior to the change in VCT rules, and these more mature holdings help to counterbalance the risks associated with earlier stage growth investment. This generally positive performance has, however, been offset by the volatility that has affected financial markets throughout the year, and which has impacted the value of your Company's quoted portfolio, where share prices have declined in response to negative investor sentiment. In the AIM market, there has also been limited IPO and new share issuance activity and, whilst the Manager reviewed a number of potential investment opportunities, only one new AIM quoted investment was completed during the year. Your Board continues to believe that a blended portfolio of private equity and AIM quoted holdings provides the optimal structure for delivering long term growth in Shareholder value. However, the Manager will remain cautious on any further AIM investments until there is clear evidence of a recovery in this market, and an improvement in the quality and range of companies seeking VCT investment.

Your Board remains committed to making regular tax free distributions, and achieving portfolio realisations is central to this objective. It is, therefore, encouraging to report that four profitable private company exits were completed during the period. Whilst the timing of exits is typically hard to predict, the Directors remain optimistic that further profitable exits can be achieved in the year ahead.

An update on the developments across the portfolio can be found in the Investment Manager's Review in the Annual Report. This includes a summary of the new investments and realisations completed during the year, as well as updates on the companies that have delivered a positive performance and the small number of cases where valuations have been reduced or fully written down. Details of the principal Key Performance Indicators (KPIs) are highlighted in the Business Report in the Annual Report and a summary of the Alternative Performance Measures (APMs) can be found in the Financial Highlights in the Annual Report.

Liquidity Management

As Shareholders will be aware from recent Annual and Interim Reports, your Company maintains a proactive approach to liquidity management, with the objective of generating income from cash resources held prior to investment in VCT qualifying companies. This also helps to meet the criteria of the Nature of Income test, which is a mandatory part of the VCT legislation and requires that not less than 70% of a VCT's income is derived from shares or securities. To meet this requirement, the Board had previously approved the construction of a focused portfolio of permitted, non-qualifying holdings in carefully selected investment trusts with strong fundamentals and attractive income characteristics. During the year, certain holdings from this portfolio were partially realised, with the proceeds used to fund new VCT qualifying investments. However, the recent upward trend in interest rates has required the Board and the Manager to restructure its approach to funds held prior to investment, in order to ensure ongoing compliance with the Nature of Income test. This will allow your Company to maximise interest income on residual cash held prior to investment and represents a significant new income stream. The core strategy will be to construct a diverse portfolio of permitted investment trusts alongside a number of leading money market funds, which have all been assessed and are recommended by the Manager. During the reporting period, the first new investments in support of the liquidity management strategy were completed and details can be found in the Investments table in the Annual Report.

Dividend Policy

Decisions on distributions take into consideration a number of factors, including the realisation of capital gains, the adequacy of distributable reserves, the availability of surplus revenue and the VCT qualifying level, all of which are kept under close and regular review.

The Board and the Manager recognise the importance of tax free distributions to Shareholders and, subject to the considerations outlined above, will seek, as a guide, to pay an annual dividend that represents 5% of the NAV per share at the immediately preceding year end.

As the portfolio continues to expand, and a greater proportion of holdings are in younger companies, the timing of distributions will be more closely linked to realisation activity, whilst also reflecting the Company's requirement to maintain its VCT qualifying level. If larger distributions are required as a consequence of significant exits, this will result in a corresponding reduction in NAV per share of the Company. However, your Board considers this to be a tax efficient means of returning value to Shareholders, whilst ensuring ongoing compliance with the VCT legislation.

Proposed Final Dividend

Your Board is pleased to propose that a final dividend of 1.15p per Ordinary Share, in respect of the year ended 28 February 2023, will be paid on 14 July 2023 to Shareholders on the register at 16 June 2023. This will bring total distributions for the financial year to 2.25p per Ordinary Share, representing a yield of 5.07% based on the NAV at the immediately preceding year end of 44.34p per share. Since the Company's launch, and after receipt of the proposed final dividend, a total of 105.41p per share will have been paid in tax free Shareholder distributions.

Dividend Investment Scheme (DIS)

Your Company operates a DIS, through which Shareholders can, at any time, elect to have their dividend payments utilised to subscribe for new Ordinary Shares issued by the Company under the standing authority requested from Shareholders at Annual General Meetings. Shares issued under the DIS should qualify for VCT tax relief applicable for the tax year in which they are allotted, subject to an individual Shareholder's particular circumstances.

Shareholders can elect to participate in the DIS in respect of future dividends. In order for the DIS to apply to the final dividend that is due to be paid on 14 July 2023, a mandate form must be received by the Registrar (The City Partnership) before 30 June 2023, this being the relevant dividend election date. The mandate form, terms & conditions and full details of the scheme (including tax considerations) are available from the Company's webpage at: mavencp.com/migvct. Election to participate in the DIS can also be made through the Registrar's online investor hub at: maven-cp.cityhub.uk.com/login.

If a Shareholder is in any doubt about the merits of participating in the DIS, or their own tax status, they should seek advice from a suitably qualified adviser.

Fund Raising and Allotment

On 7 October 2022, your Company, alongside Maven Income and Growth VCT 3 PLC, Maven Income and Growth VCT 4 PLC and Maven Income and Growth VCT 5 PLC, launched Offers for Subscription for up to £40 million in aggregate, inclusive of over-allotment facilities for up to £10 million in aggregate. On 26 May 2023, the Offers closed with your Company having raised a total of £6.74 million for the 2022/23 and 2023/24 tax years.

With respect to the 2022/23 tax year, an allotment of 8,130,478 new Ordinary Shares completed on 3 March 2023, with a further allotment of 4,986,813 new Ordinary Shares completing on 5 April 2023. An allotment of 2,013,349 new Ordinary Shares in respect of the 2023/24 tax year took place on 2 June 2023.

Further details regarding the new Ordinary Shares issued under the Offer for Subscription can be found in Note 12 to the Financial Statements in the Annual Report.

The Directors are confident that Maven's regional office network will continue to source attractive investment opportunities in VCT qualifying companies across a range of sectors, and the additional liquidity provided by the fundraising will facilitate further expansion and development of the portfolio in line with the investment strategy. Furthermore, the funds raised will allow your Company to maintain its share buy-back policy, whilst also spreading costs over a wider asset base with the objective of maintaining a competitive total expense ratio for the benefit of all Shareholders.

Share Buy-backs

Shareholders will be aware that a primary objective for the Board is to ensure that the Company retains sufficient liquidity for making investments in line with its stated policy, and for the continued payment of dividends. However, the Directors also acknowledge the need to maintain an orderly market in the Company's shares and have, therefore, delegated authority to the Manager for the Company to buy back its own shares in the secondary market, for cancellation or to be held in treasury, subject always to such transactions being in the best interests of Shareholders.

It is intended that the Company should seek to maintain a share price discount that is approximately 5% below the latest published NAV per share, subject to market conditions, availability liquidity and the maintenance of the Company's VCT qualifying status.

Shareholders should be aware that neither the Company nor the Manager can execute a direct transaction in the Company's shares. Any instruction to buy or sell shares on the secondary market must be directed through a stockbroker. If a Shareholder wishes to buy or sell shares on the secondary market, they or their broker can contact the Company's corporate broker, Shore Capital Stockbrokers on 020 7647 8132, to discuss a transaction. It should, however, be noted that such transactions cannot take place whilst the Company is in a closed period, which is the time from the end of a reporting period (quarter end, half year or full year) until the announcement of the relevant results, or the release of an unaudited NAV. A closed period may also be introduced if the Directors and Manager are in possession of price sensitive information that may restrict the Company's ability to buy back shares.

VCT Regulatory Developments

During the period under review, there were no further amendments to the rules governing VCTs. Shareholders may, however, be aware that under the VCT scheme approved by the European Commission in 2015, a "sunset" clause was introduced, which stated that income tax relief would no longer be available on subscriptions for new shares in VCTs made on or after 6 April 2025, unless the legislation was renewed by an HM Treasury order. During the financial year, there has been a considerable level of activity by industry participants, including The Association of Investment Companies (AIC), of which the Company is a member, and the Venture Capital Trust Association (VCTA), of which the Manager is an active member, to demonstrate the important role of VCT investment in supporting ambitious SMEs and stimulating economic growth and regional employment. It is, therefore, encouraging to report that the UK Government has committed to extend the income tax relief available on new VCT shares beyond 2025, as confirmed by the Chancellor in the Autumn 2022 budget statement and reaffirmed in the Spring 2023 budget. The Manager will remain involved in discussions regarding the process for implementing this extension.

Consistent with industry best practice, the Board and the Manager continue to apply the International Private Equity and Venture Capital Valuation (IPEV) Guidelines as the central methodology for all private company valuations. The IPEV Guidelines are the prevailing framework for fair value information in the private equity and venture capital industry. Following the invasion of Ukraine in February 2022, IPEV reiterated the Special Guidance provided in March 2020 at the outbreak of the COVID-19 pandemic in the UK, with respect to assessing the fair value of private company holdings. The Directors and the Manager continue to follow industry guidelines and adhere to the IPEV Special Guidelines in all private company valuations.

Environmental, Social and Governance (ESG) Considerations

The Board and the Manager acknowledge the importance of ESG principles and consider that those portfolio companies that have ESG aims integrated into their business model are likely to benefit both society and Shareholders. The Board and the Manager believe that there is an interconnectivity between profit and purpose, and that strong ESG credentials can give companies a competitive edge.

The Board is pleased to report on the continued progress of the Manager in developing its ESG framework and oversight capabilities. In order to assist this process, Maven has partnered with a specialist software provider to enhance its ability to track, analyse and report key ESG information across the portfolio. The Manager is further enhancing its range of internal metrics, which will be measured from year to year with the intention of reducing carbon footprint and improving key governance and social outcomes.

The Manager has a comprehensive ESG policy in place, which is ingrained within the investment process and, as a standard part of due diligence for any new investment, ESG risks and opportunities are all fully considered. A number of investee companies are already very focused on the environment or making improvements to society and local communities and have set themselves specific ESG related goals. Where this is not the case, the Manager is able to support and advise on the value of improving these metrics, and all investee companies are required to include ESG as a standing board agenda item in order to encourage regular dialogue on the topic.

In May 2021, the Manager became a signatory to the internationally recognised Principles for Responsible Investment, demonstrating its commitment to include ESG as an integral part of its investment decision making and ownership. The Manager has also become a signatory to the Investing in Women Code, which aims to improve female entrepreneurs' access to tools, resources and finance, supporting diversity and inclusion in access to finance.

Although neither the Company nor the Manager are currently required to disclose climate related financial information in line with the Task Force on Climate-related Financial Disclosures (TCFD), they recognise the aims and importance of the TCFD recommendations in providing a foundation to improve investors' ability to appropriately assess climate-related risks and opportunities. Disclosing information against the TCFD recommendations remains an objective of the Manager as part of its ESG initiatives, and progress will be monitored by the Directors.

The Board is aware of the significant steps that the Manager is taking to assess ESG capability and support ongoing dialogue with investee companies, with the aim of improving ESG metrics over the period that your Company is invested. The Board wishes to remind Shareholders that your Company's investment policy does not incorporate specific ESG aims, and investee companies are not required to meet any particular targets.

Shareholder Communications

Twice a year, Maven publishes a VCT newsletter, Creating Value, which is issued by email or post and includes details of the new investments and realisations that have been completed by the Maven VCTs, as well as updates about investee companies, and the launch of new Maven VCT Offers. Shareholders wishing to receive this newsletter, and other VCT related information, can register their email address with the Registrar, The City Partnership, or subscribe through Maven's website.

Appointment of a New Auditor

Following a formal tender process, Johnston Carmichael LLP (Johnston Carmichael) was appointed as the new independent Auditor to the Company with effect from 4 October 2022. Johnston Carmichael conducted the audit of the Financial Statements for the financial year to 28 February 2023 and the Independent Auditor's Report can be found in the Annual Report. Shareholders will be asked to confirm the appointment of Johnston Carmichael at the forthcoming AGM.

Annual General Meeting (AGM)

The 2023 AGM will be held in the Glasgow office of Maven Capital Partners UK LLP at Kintyre House, 205 West George Street, Glasgow, G2 2LW on 6 July 2023, commencing at 12.00 noon. The Notice of Annual General Meeting can be found in the Annual Report.

The Future

The strategy of your Company remains firmly focused on constructing a large and diverse portfolio of UK based growth companies. The last year has seen the continued successful execution of that strategy and it is also pleasing to note that, as the portfolio expands, a number of profitable realisations have been achieved which helps to underpin the payment of dividends, in line with the annual 5% target. The Board and the Manager are confident that this remains the correct path for your Company, and further expansion of the portfolio is anticipated in the year ahead.

John Pocock

Chairman

7 June 2023

Business Report

This Business Report is intended to provide an overview of the strategy and business model of the Company, as well as the key measures used by the Directors in overseeing its management. The Board holds at least one meeting per annum at which strategic matters are discussed. The Company is a VCT and invests in accordance with the investment objective set out below.

Investment Objective

Under an investment policy approved by the Directors, the Company aims to achieve long-term capital appreciation and generate income for Shareholders.

Business Model and Investment Policy

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 that meet the criteria for VCT qualifying investments and have strong growth potential;

•      investing no more than £1.25 million in any company in one year and no more than 15% of the Company's assets by cost in one business at any time; and

•      borrowing up to 15% of net asset value, if required and only on a selective basis, in pursuit of its investment strategy.

The Company had no borrowings as at 28 February 2023 and, as at the date of this Report, the Board has no intention of utilising the borrowing facility.

Principal and Emerging Risks and Uncertainties

The Board and the Risk Committee have an ongoing process for identifying, evaluating and monitoring the principal and emerging risks and uncertainties facing the Company. The risk register and dashboard form key parts of the Company's risk management framework used to carry out a robust assessment of the risks, including a significant focus on the controls in place to mitigate them. The principal and emerging risks and uncertainties facing the Company are as follows:

Investment Risk

The majority of the Company's investments are in small and medium sized unquoted UK companies and AIM/ AQSE quoted companies which, by their nature, carry a higher level of risk and lower liquidity relative to investments in large quoted companies. The Board aims to limit the risk attached to the investment portfolio as a whole by ensuring that a robust and structured selection, monitoring and realisation process is applied by the Manager. 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 co-investment partners;

•      ensuring valuations of underlying investments are made fairly and reasonably (see Notes 1(e), 1(f) and 16 to the Financial Statements for further detail);

•      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, with ongoing monitoring to ensure the Manager is performing in line with expectations.

Operational Risk

The Board is aware of the heightened cyber security risk and potential consequences of IT failure, particularly in relation to the increased utilisation of remote working practices by the Manager and key third parties. A cyber attack or systems failure not only has the potential to cause a third party to fail to perform its duties and responsibilities in accordance with the service level agreements that are in place, but could also result in it encountering financial difficulties, such that it is unable to carry on trading and cannot continue to provide services to the Company.

The Board has closely monitored the systems and controls in place to prevent or mitigate against a systems or data security failure, and the overall effectiveness of business continuity arrangements of the Manager and third parties.

VCT Qualifying Status Risk

The Company operates in a complex regulatory environment and faces a number of related risks, including:

•      becoming subject to capital gains tax on the sale of its investments as a result of a breach of Section 274 of the Income Tax Act 2007;

•      loss of VCT status and consequent loss of tax reliefs available to Shareholders as a result of a breach of the VCT Regulations;

•      loss of VCT status and reputational damage as a result of a serious breach of other regulations such as the FCA Listing Rules and the Companies Act 2006; and

•      increased investment restrictions resulting from EU State Aid Rules, incorporated by the Finance (No. 2) Act 2015 and the Finance Act 2018.

The Board works closely with the Manager to ensure compliance with all applicable and upcoming legislation, such that VCT qualifying status is maintained. Further information on the management of this risk is detailed under other headings in this Business Report.

Legislative and Regulatory Risk

The Directors strive to maintain a good understanding of the changing regulatory agenda and consider emerging issues so that appropriate changes can be developed and implemented in good time. 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 either legislation could have an adverse impact on Shareholder investment returns, whilst maintaining the Company's VCT status. The Board and the Manager continue to make representations where appropriate, either directly or through relevant industry bodies such as the AIC, the British Private Equity and Venture Capital Association (BVCA) and the VCTA.

The Company has retained Philip Hare & Associates LLP as its principal VCT adviser and also uses 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), or the Alternative Investment Fund Managers Directive (AIFMD) could lead to a number of detrimental outcomes and reputational damage. Breaches of controls by service providers to the Company could also lead to reputational damage or loss.

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 and 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 The City Partnership UK Limited to act on its behalf to report annually to HM Revenue & Customs (HMRC) and to ensure compliance with this legislation.

Climate Change and Social Responsibility Risk

The Board recognises that climate change is an important emerging risk that all companies should take into consideration within their strategic planning. As referred to elsewhere in this Strategic Report and in the Statement of Corporate Governance in the Annual Report, the Company has minimal direct impact on environmental issues. However, the Company has introduced measures to reduce the cost and environmental impact of the production and circulation of Shareholder documentation, such as the annual and interim reports. This has resulted in a significant reduction in the number of copies being printed and posted, with only 6% of Shareholders now receiving paper reports.

The Board is aware that the Manager is increasing its efforts in relation to the identification of environmental risks and opportunities, and is developing its ESG policy accordingly. Environmental risk is a fundamental aspect of due diligence and industry specialists are assigned where there may be specific concerns in relation to a potential business or sector. The results are then factored into the decision making process for new investments. VCTs in general are regarded as supporting small and medium sized enterprises, investment in which helps to create local employment across a range of UK regions.

Ukraine

The conflict in Ukraine, and the global response to it, has resulted in disruptions to international supply chains, inflationary pressures and general market uncertainty. It is also acknowledged that there is an increased cyber security risk and the Manager has taken steps to mitigate this risk, including oversight of third parties.

Other Key Risks

Governance Risk

The Directors are aware that an ineffective Board could have a negative impact on the Company and its Shareholders. The Board recognises the importance of effective leadership and board composition, and this is ensured by completing an annual evaluation process, with action being taken if required.

Management Risk

The Directors are aware of the risk that investment opportunities could fail to complete, or the management of the VCT could breach the Management and Administration Deed or regulatory parameters, due to lack of knowledge and/or experience of the investment professionals acting on behalf of the Company. To manage this risk, the Board has appointed Maven as investment manager, as it employs skilled professionals with the required VCT knowledge and experience. In addition, the Board takes comfort that the Manager's controls have been updated to ensure compliance with the FCA's Senior Managers and Certification Regime (SMCR).

The Directors are also mindful of the impact that the loss of the Manager's key employees could have on either investment opportunities that may be lost or existing investments that may fail. The Board is reassured by the Manager's approach to recruitment, incentivising staff, succession planning and ensuring that adequate notice periods are included in all contracts of employment.

Financial and Liquidity Risk

As most of its 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 unlisted investment opportunities. The Company has no direct exposure to currency risk and does not enter into any derivative transactions.

Political Risk

Political changes that result in parties with extreme influence over policies could lead to instability and uncertainty in the markets, legislation and the economy.

The Board reviews the political situation on a regular basis, together with any associated changes to the economic, regulatory and legislative environment, in order to ensure that any risks arising are mitigated as effectively as possible.

Economic Risk

The valuation of investment companies may be affected by underlying economic conditions, such as fluctuating interest rates, increased fuel and energy costs, and the availability of bank finance, all of which can be impacted during times of geopolitical uncertainty and volatile markets, including during the coronavirus pandemic and the situation in Ukraine. The economic and market environment is kept under constant review and the investment strategy of the Company adapted, so far as is 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 also contained in Note 16 to the Financial Statements.

Statement of Compliance with Investment Policy

The Company is adhering to its stated investment policy and managing the risks arising from it. This can be seen in various tables and charts throughout the Annual Report, and from information provided in the Chairman's Statement and in the Investment Manager's Review. A review of the Company's business, its position as at 28 February 2023 and its performance during the year then ended is included in the Chairman's Statement, which also includes an overview of its strategy and business model.

The management of the investment portfolio has been delegated to Maven, which also provides company secretarial, administrative and financial management services to the Company. The Board is satisfied with the breadth and depth of the Manager's resources and its 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 Company's holdings and the degree of co-investment with other clients of the Manager. The Portfolio Analysis charts in the Annual Report show the profile of the portfolio by industry sector and by asset class. They help to show the sectoral diversity of the portfolio, which is spread between private growth capital companies, more mature private company holdings, and AIM/AQSE quoted investments. The level of VCT qualifying investment is monitored continually by the Manager and reported to the Risk Committee quarterly, or as otherwise required.

Key Performance Indicators (KPIs)

During the year, the net return on ordinary activities before taxation was £1,392,000 (2022: £2,970,000); gains on investments were £2,449,000 (2022: £3,817,000); and earnings per share were 1.01p (2022: 2.22p).

The Directors also consider a number of APMs to assess the Company's success in achieving its objective and these also enable Shareholders and prospective investors to gain an understanding of the Company's business. These APMs are shown in the Financial Highlights in the Annual Report.

In addition, the Board considers the following to be KPIs:

•      NAV total return;

•      annual yield;

•      share price discount to NAV;

•      investment income; and

•      operational expenses.

The NAV total return is considered to be the most appropriate long-term measure of Shareholder value as it includes both the current NAV per share and total dividends paid to date. The annual yield is the total dividends paid per share for the financial year, expressed as a percentage of the net asset value at the previous year end. The Directors seek to pay dividends to provide a yield and comply with the VCT rules, taking account of the level of distributable reserves, profitable realisations in each accounting period and the Company's future cash flow projections. The share price discount to NAV is the percentage by which the mid- market price of a share is lower than its NAV.

Definitions of the APMs can be found in the Glossary in the Annual Report. A historical record of these measures is shown in the Financial Highlights in the Annual Report and the change in the profile of the portfolio is reflected in the Summary of Investment Changes. The Board reviews the Company's investment income and operational expenses on a quarterly basis, as the Directors consider that these are both important components in the generation of Shareholder returns. Further information can be found in Notes 2 and 4 to the Financial Statements in the Annual Report.

There is no VCT index against which to compare the financial performance of the Company. However, for reporting to the Board and Shareholders, the Manager uses comparisons with the most appropriate index, being the FTSE AIM All-Share Index, and the graph in the Annual Report compares the Company's performance against the FTSE AIM All-Share Index. The Directors also consider non-financial performance measures, such as the flow of investment proposals and the Company's ranking within the VCT sector by independent analysts. In addition, the Directors consider economic, regulatory and political trends and features that may impact on the Company's future development and performance.

Valuation Process

Investments held by the Company in unquoted companies are valued in accordance with the IPEV Guidelines. Following the invasion of Ukraine in February 2022, IPEV reiterated the Special Guidance provided in March 2020, at the outbreak of the COVID-19 pandemic in the UK, with respect to assessing the fair value of private company holdings. The Directors and the Manager continue to follow these industry guidelines and adhere to the IPEV Special Guidelines in all private company valuations. Investments that are quoted or traded on a recognised stock exchange, including AIM, are valued at their closing bid prices at the year end.

Share Buy-backs

At the forthcoming AGM, the Board will seek the necessary Shareholder authority to continue to conduct a share buy-back programme under appropriate circumstances.

The Board's Duty and Stakeholder Engagement

The Directors recognise the importance of an effective Board and its ability to discuss, review and make decisions to promote the long-term success of the Company and protect the interests of its key stakeholders. As required by Provision 5 of the AIC Code (and in line with the UK Code), the Board has discussed the Directors' duty under Section 172 of the Companies Act and how the interests of key stakeholders have been considered in Board discussions and decision making during the year. This has been summarised in the table below.

Employee, Environmental and Human Rights Policy

As a VCT, the Company has no direct employee or environmental responsibilities, nor is it responsible directly for the emission of greenhouse gases. The Board's principal responsibility to Shareholders is to ensure that the investment portfolio is managed and invested properly. As the Company has no employees, it has no requirement to report separately on employment matters. The Board comprises one female Director and three male Directors, all of whom are non-executive, 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 Company's assets is undertaken by the Manager through members of its portfolio management team.

The Manager engages with the Company's underlying investee companies in relation to their corporate governance practices and in developing their policies on social, community and environmental matters. Further information may be found in the Statement of Corporate Governance. The Manager is continuing to focus on developing its ESG framework and oversight capabilities. Further details regarding the Manager's approach to ESG and the progress made on developing its ESG framework can be found in the Chairman's Statement in the Annual Report.

In light of the nature of the Company's business, there are no relevant human rights issues and, therefore, the Company does not have a human rights policy.

Independent Auditor

The Company's Independent Auditor is required to report if there are any material inconsistencies between the content of the Strategic Report and the Financial Statements. The Independent Auditor's Report can be found in the Annual Report.

Future Strategy

The Board and Manager intend to maintain the policies set out above for the year ending 29 February 2024, 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:

John Pocock

Director

7 June 2023

Income Statement

For the Year Ended 28 February 2023

All gains and losses are recognised in the Income Statement.

The total column of this statement is the Profit & Loss Account of the Company. The revenue and capital columns are supplementary to this and are prepared under guidance published by the AIC. All items in the above statement are derived from continuing operations. The Company has only one class of business and one reportable segment, the results of which are set out in the Income Statement and Balance Sheet. The Company derives its income from investments made in shares, securities and bank deposits.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.

The Notes included in the Annual Report are an integral part of the Financial Statements.

Statement of Changes in Equity

For the Year Ended 28 February 2023

Year ended 28 February 2023

Year ended 28 February 2022

* DIS represents the Dividend Investment Scheme as detailed in the Chairman's Statement in the Annual Report.

**See Note 18 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 which are distributable.

Where all, or an element of the proceeds of sales have not been received in cash or cash equivalent (as noted in the Realisations table in the Annual Report), and are not readily convertible to cash, they do not qualify as realised gains for the purposes of distributable reserves calculations and, therefore, do not form part of distributable reserves. The split of unrealised gains/(losses) for the year is detailed within the portfolio valuation section of Note 8.

The Notes included in the Annual Report are an integral part of the Financial Statements.

Balance Sheet

As at 28 February 2023

*See Note 18 in the Annual Report.

The Financial Statements of Maven Income and Growth VCT PLC, registered number 03908220, were approved and authorised for issue by the Board of Directors on its behalf by:

John Pocock

Director

7 June 2023

The Notes included in the Annual Report are an integral part of the Financial Statements.

Cash Flow Statement

For the Year Ended 28 February 2023

The Notes included in the Annual Report are an integral part of the Financial Statements.

Notes to the Financial Statements

For the Year Ended 28 February 2023

Accounting policies

The Company is a public limited company, incorporated in England and Wales and its registered office is shown in the Corporate Summary.

(a)    Basis of preparation

The Financial Statements have been prepared on a going concern basis, further details can be found in the Directors' Report in the Annual Report. The Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of investments and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland, and in accordance with the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts (the SORP) issued by the AIC in July 2022.

(b)    Income

Interest income on loan notes and dividends on preference shares are accrued on a daily basis. Provision is made against this income where recovery is doubtful. Where the terms of unquoted loan notes only require interest or a redemption premium to be paid on redemption, the interest and the redemption premium is recognised as income once redemption is reasonably certain. Until such date interest is accrued daily and included within the valuation of the investment. When a redemption premium is designed to protect the value of the instrument holder's investment rather than reflect a commercial rate of revenue return the redemption premium should be recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. A redemption premium of £86,214 (2022: £38,718) was received in the year ended 28 February 2023 and recognised as income. Income from fixed interest securities and deposit interest is included on an effective interest rate basis. Dividends on quoted shares are recognised as income when the related investments are marked ex-dividend and where no dividend date is quoted, when the Company's right to receive payment is established.

(c)    Expenses

All expenses are accounted for on an accruals basis and charged to the income statement. Expenses are charged through the revenue account except as follows:

•      expenses which are incidental to the acquisition and disposal of an investment are charged to capital;

•      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;and

•      share issue costs are charged to the share premium account.

(d)    Taxation

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the Financial Statements 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 (IPEV) for the valuation of private equity and venture capital investments. Investments are recognised at their trade date and are designated by the Directors as fair value through profit and loss. At subsequent reporting dates, investments are valued at fair value, which represents the Directors' view of the amount for which an asset could be exchanged between knowledgeable and willing parties in an arm's length transaction. This does not assume that the underlying business is saleable at the reporting date or that its current shareholders have an intention to sell their holding in the near future.

A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.

1.    For early stage investments completed in the reporting period, fair value is determined using the price of recent investment, calibrating for any material change in the trading circumstances of the investee company. Where relevant, an investee may be valued on a discounted cash flow basis. Other early stage companies are valued by applying a multiple to the investee's revenue to derive the enterprise value of each company.

2.    Whenever practical, recent investments will be valued by reference to a material arm's length transaction or a quoted price.

3.    Mature companies are valued by applying a multiple to their maintainable earnings to determine the enterprise value of the company.

       To obtain a valuation of the total ordinary share capital held by management and the institutional investors, the value of third party debt, institutional loan stock, debentures and preference share capital is deducted from the enterprise value. The effect of any performance related mechanisms is taken into account when determining the value of the ordinary share capital.

4.    All unlisted investments are valued individually by the Manager's portfolio management team. The resultant valuations are subject to detailed scrutiny and approval by the Directors of the Company.

5.    In accordance with normal market practice, investments listed on AIM or a recognised stock exchange are valued at their bid market price.

6.    In accordance with normal market practice, the Open-Ended Investment Company (OEIC) investments value is based on the daily price generated from the net asset value of their underlying portfolio assets.

(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 Note 16 to the Financial Statements in the Annual Report, and explained in (e) above.

In the opinion of the Board and the Manager, there are no critical accounting judgements.

Reserves

Share premium account

The share premium account represents the premium above nominal value received by the Company on issuing shares net of issue costs. This reserve is non-distributable.

Capital redemption reserve

The nominal value of shares repurchased and cancelled is represented in the capital redemption reserve. This reserve is non-distributable.

Capital reserve - unrealised

Increases and decreases in the fair value of investments are recognised in the Income Statement and are then transferred to the capital reserve unrealised account. This reserve is generally non-distributable, other than the part of the reserve relating to gains/(losses) attributable to readily realisable quoted investments that are distributable.

Capital reserve - realised

Gains or losses on investments realised in the year that have been recognised in the Income Statement are transferred to the capital reserve realised account on disposal. Furthermore, any prior unrealised gains or losses on such investments are transferred from the capital reserve unrealised account to the capital reserve realised account on disposal. This reserve is distributable.

Special distributable reserve

The total cost to the Company of the repurchase and cancellation of shares is represented in the special distributable reserve account. The special distributable reserve also represents capital dividends, capital investment management fees and the tax effect of capital items. This reserve is distributable.

Revenue reserve

The revenue reserve represents accumulated profits retained by the Company that have not been distributed to Shareholders as a dividend. This reserve is distributable.

Earnings per share

Net asset value per Ordinary Share

Net asset value per Ordinary Share as at 28 February 2023 has been calculated using the number of Ordinary Shares in issue at that date of 134,000,597 (2022: 135,323,293).

These Notes are an integral part of the Financial Statements and are included in full in the Annual Report.

Directors' Responsibility Statement

The Directors believe 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 28 February 2023 and for the year to that date;

•      the Directors' Report includes a fair review of the development and performance of the Company, together with a description of the principal and emerging risks and uncertainties that it faces; and

•      the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.

Other Information

The Annual General Meeting will be held on Thursday 6 July 2023, commencing at 12.00 noon, at the offices of Maven Capital Partners UK LLP, Kintyre House, 205 West George Street, Glasgow, G2 2LW.

Copies of this announcement, and of the Annual Report and Financial Statements for the year ended 28 February 2023, 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, 6th Floor, Saddlers House, 44 Gutter Lane, London, EC2V 6BR and on the Company's webpage at mavencp.com/migvct.

The Annual Report and Financial Statements for the year ended 28 February 2023 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 28 February 2022 have been delivered to the Registrar of Companies and contained an audit report that was unqualified and did not constitute statements under S498(2) or S498(3) of the Companies Act 2006.

Neither the content of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

The Annual Report will be submitted to the National Storage Mechanism and will be available for inspection at: fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.

By Order of the Board

Maven Capital Partners UK LLP

Secretary

7 June 2023