TIDMMIG6
RNS Number : 4400F
Maven Income and Growth VCT 6 PLC
12 July 2019
Maven Income and Growth VCT 6 PLC
Final results for the year ended 31 March 2019.
Highlights
-- NAV total return at year end of 57.62p per share (2018: 60.01p)
-- NAV at year end of 52.77p per share (2018: 55.16p)
-- Final dividend of 1.75p per share proposed
-- Over GBP9 million of capital deployed through qualifying
investments, during the period and up to the date of
the Annual Report
-- Completion of 27 new and follow-on private company and AIM investments
-- Exits from the holdings in GEV and Just Trays completed after the period end
Chairman's Statement
On behalf of your Board, I am pleased to update Shareholders on
the progress achieved in the year to 31 March 2019. During the
period under review, your Company made further significant headway
in the construction of the long-term portfolio, achieving a record
level of investment through the deployment of GBP8.78 million in 27
new and follow-on VCT qualifying transactions in young growth
companies, operating across a diverse range of sectors. Whilst the
rapid expansion of the portfolio over the past two years has
established the foundations for future growth, it will take time
for this to translate into improvements in Shareholder value as all
holdings in earlier stage assets are initially held at cost, or
cost less provision, reflecting their stage of development and risk
profile. The Directors, nevertheless, recognise the importance of
tax-free distributions to Shareholders and are proposing a final
dividend of 1.75p per share, representing an annual yield of
3.61%.
During 2015 and 2016, your Company undertook two material
fundraisings, with the central aim of increasing its size and scale
in order to deliver a number of benefits, including an enlarged
portfolio of assets and a reduction in the total expense ratio.
Following the successful completion of these fundraisings, and with
significant new capital to deploy, the key objective for the
financial year under review was to continue to invest this capital
in a range of interesting VCT qualifying assets. Your Board is
pleased to report that this objective has been achieved, in line
with the regulatory requirements. Achieving the investment target
within the required timeframe reflects the effective transition by
the Manager to the requirements of the Finance Act 2015 which
necessitated an expansion of Maven's investment team and nationwide
office network, alongside a revised approach to deal origination.
The Manager also has executive resource with experience of the AIM
market and has completed a number of new AIM quoted investments
during the year. Generally, your Board is pleased with the new
additions to the portfolio, although it will take time for these
assets to mature and grow in value.
In the new financial year, your Company will continue to
participate in Maven led VCT investments, with the requirement to
provide follow-on funding to existing portfolio holdings also
driving investment activity, as many of the early stage assets will
require additional capital to support growth. Furthermore, your
Company may also see a greater level of activity within the AIM
component of the portfolio as holdings are likely to be actively
traded to enable the crystallisation of gains, subject always to
suitable market conditions and the VCT qualifying level
requirements.
Details of the principal Key Performance Indicators (KPIs) can
be found 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.
Whilst political and economic uncertainty has continued to
surround the UK's exit from the European Union (EU), it is
reassuring to report that most of the investee companies in the
portfolio have performed broadly in line with expectations.
A detailed analysis of portfolio developments can be found in
the Investment Manager's Review in the Annual Report. A number of
the more established private company holdings have continued to
trade well, enabling the valuations of certain assets to be
increased. Encouragingly, trading performance across the oil &
gas portfolio companies continued to show a steady improvement,
maintaining the trend of the previous year. The young and early
stage investee companies have generally made satisfactory progress
against plan, although the Board and the Manager will maintain a
conservative approach to valuing these assets, holding them at
cost, or cost less provision, until there is clear evidence of
measurable progress or a specific event from which a new valuation
can be supported. Elsewhere in the portfolio there are, however, a
small number of investments that are operating behind plan or where
a market adjustment has influenced performance and, as a result,
the valuations of these assets have been reduced.
During the period under review, the holding in Cursor Controls,
a niche manufacturer of trackballs, trackpads and keyboards for
industrial applications, was sold at a premium to carrying value,
generating a total return of 2.7 times cost over the three-year
investment period.
The Board is aware that discussions are underway regarding
further potential exits from a number of portfolio companies,
although there can be no certainty that these will result in
profitable realisations.
Dividends
The Board recommends that a final dividend of 1.75p per Ordinary
Share, be paid on 13 September 2019 to Shareholders on the register
at 16 August 2019. This payment represents a yield of 3.61% based
on the year-end closing mid-market price of 48.50p. It should be
noted that the effect of paying dividends is to reduce the NAV of
the Company by the total cost of the distribution. Since 2013, and
after receipt of the payment noted above, 6.60p per share will have
been paid in tax-free dividends.
Decisions on future distributions will take into consideration
the availability of surplus revenue, the adequacy of reserves and
the VCT qualifying level, all of which are kept under close and
regular review by the Board and the Manager. As the portfolio now
contains a greater proportion of holdings in young and early stage
companies, there may be fluctuations in the quantum and timing of
future dividend payments, which are likely to be more closely
aligned to realisation activity. The Board and the Manager will
continue to monitor this carefully, in line with your Company's
investment objective.
Dividend Investment Scheme (DIS)
Your Company has in place a DIS, through which Shareholders may
elect to have their dividend payments used to apply 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. 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.
Shareholders who wish to participate in the DIS in respect of
future dividends should ensure that a DIS mandate or CREST
instruction, as appropriate, is received by the Registrar (Link
Market Services) in advance of 30 August 2019, this being the next
dividend election date. The mandate form, terms & conditions
and full details of the scheme (including further details about tax
considerations) are available from the Company's website at
www.mavencp.com/migvct6. A DIS election can also be made using the
Registrar's share portal at www.signalshares.com
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. 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, subject always to such
transactions being in the best interests of Shareholders.
It is intended that, subject to market conditions, available
liquidity and the maintenance of the Company's VCT status, shares
will continue to be bought back at prices representing a discount
of between 10% and 20% to the prevailing NAV per share.
Regulatory Developments
Following the legislative changes introduced by the Finance Act
2015, with further amendments included in the Finance Act 2018, it
is reassuring to report that the Finance Act 2019 does not contain
any further amendments to the legislation governing VCTs. Your
Company is well positioned to accommodate the provisions of the
Finance Act 2018, and in particular the requirement for a VCT to
hold 80% of its investments in qualifying holdings. Your Company is
on track to meet this requirement ahead of its required date of 31
March 2020.
The General Data Protection Regulation (GDPR) came into force on
25 May 2018, replacing the Data Protection Act 1998. During the
year, the Manager worked with the third parties that process
Shareholders' personal data to ensure that their rights under the
new regulation are respected.
In July 2018, the Financial Reporting Council published an
update of the UK Corporate Governance Code (the Code), which
focuses on the application and reporting of the updated Principles.
The 2018 Code applies to all companies with a Premium Listing and
is applicable for all accounting periods beginning on or after 1
January 2019. The Board will consider the implications of the Code
and take appropriate action as required.
The Future
During the period under review, your Company achieved its core
objective of meeting the required investment target. Your Board is
encouraged by the quality of the new additions to the portfolio,
whilst acknowledging that it may take time for these assets to
mature and grow in value. Notwithstanding the ongoing political and
economic uncertainty associated with the UK's withdrawal from the
EU, the strategy for the year ahead will focus on building value
within the portfolio, alongside making selective new investments in
private and AIM quoted companies, consistent with the approach of
recent years.
Brian May
Chairman
12 July 2019
Business Report
This Business Report is intended to provide an overview of the
strategy and business model of the Company as well as the key
measures used by the Directors in overseeing its management. The
Company is a venture capital trust, which invests in accordance
with the investment objective set out below.
Investment Objective
The Company aims to achieve long-term capital appreciation and
generate income for Shareholders.
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/NEX quoted companies which meet the criteria for
VCT qualifying investments and have strong growth potential;
-- investing no more than GBP1.25 million in any company in one
year and no more than 15% of the Company's assets by cost in one
business at any time; and
-- borrowing up to 15% of net asset value, if required and only
on a selective basis, in pursuit of its investment strategy.
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/NEX quoted companies, some of which may be in the
early stages of their development and, by their nature, have 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 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 and other VCT managers;
-- ensuring valuations of underlying investments are made fairly
and reasonably (see Notes to the Financial Statements 1(e) and 1(f)
for further detail);
-- taking steps to ensure that 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 objectives above, with ongoing monitoring to
ensure the Manager is performing in line with expectations.
An explanation of certain risks and how they are managed is
contained in Note 16 in the Annual Report.
Financial and Liquidity Risk
As most of the investments require a medium to long term
commitment and are relatively illiquid, the Company retains a
portion of the portfolio in cash or cash equivalents in order to
finance any new and follow-on investment opportunities. The Company
has only limited direct exposure to currency risk and does not
enter into any derivative transactions.
Economic Risk
The valuation of investment companies may be affected by
underlying economic conditions such as fluctuating interest rates
and the availability of bank finance.
The economic and market environment is kept under constant
review and the investment strategy of the Company 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.
Internal Control Risk
The Board reviews regularly the system of internal controls,
both financial and non-financial, operated by the Company, the
Manager and other key third party outsourcers such as the
Custodian, Company Secretary and Registrar. These include controls
designed to ensure that the Company's assets are safeguarded, that
all records are complete and accurate and that the third parties
have adequate controls in place to prevent data protection and
cyber security failings.
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
In order to maintain its approval as a VCT, the Company is
required to comply with current VCT legislation in the UK as well
as the EU State Aid Rules. Changes in the future to either
legislation could have an adverse impact on Shareholder investment
returns whilst maintaining the Company's VCT status. The Board and
the Manager continue to make representations where appropriate,
either directly or through relevant industry bodies such as the
British Private Equity & Venture Capital Association
(BVCA).
The Company has retained Philip Hare & Associates LLP as its
VCT adviser and also uses the services of a number of other VCT
advisers on a transactional basis.
Breaches of other regulations including, but not limited to, the
Companies Act 2006, the FCA Listing Rules, the FCA Disclosure,
Guidance and Transparency Rules 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 an authorisation and
supervisory regime for all investment companies in the EU. The
Company is a small, registered, internally managed alternative
investment fund under the Alternative Investment Fund Managers
Directive (AIFMD).
The Company is also required to comply with tax legislation
under the Foreign Account Tax Compliance Act and the Common
Reporting Standard. The Company has appointed Link Market Services
to act on its behalf to report annually to HMRC and ensure
compliance with this legislation.
Political Risk
In a referendum held on 23 June 2016, the UK voted to leave the
EU (a process informally known as Brexit). The formal process of
implementing this decision exists in Article 50 of the Lisbon
Treaty, which was invoked on 29 March 2017. The political, economic
and legal consequences of the referendum vote are not yet known. It
is possible that investments in the UK may be more difficult to
value and assess for suitability of risk, harder to buy or sell and
may be subject to greater or more frequent rises and falls in
value. In the longer term, there is likely to be a period of
uncertainty as the UK seeks to negotiate its exit from the EU. The
UK's laws and regulations concerning funds may, in future, diverge
from those of the EU. This may lead to changes in the operation of
the Company or the rights of investors in the territories in which
the shares of the Company may be promoted and sold.
On a regular basis, the Board reviews the political situation
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.
An explanation of certain economic and financial risks and how
they are managed is also contained in Note 16 in the Annual
Report.
Statement of Compliance with Investment Policy
The Company is adhering to its stated investment policy and
managing the risks arising from it. This can be seen in various
tables and charts throughout 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 31 March 2019 and its performance during the year then ended
is included in the Chairman's Statement, which also includes an
overview of the Company's business model and strategy.
The management of the investment portfolio has been delegated to
Maven, which also provides company secretarial, administrative and
financial management services to the Company. The Board is
satisfied with the depth and breadth of the Manager's resources and
its network of offices, which supply new deals and enable it to
monitor the geographically widespread portfolio of companies
effectively.
The Investment Portfolio Summary in the Annual Report discloses
the investments in the portfolio and the degree of co-investment
with other clients of the Manager. The tabular analysis of the
unlisted and quoted portfolio in 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, or as otherwise required.
Key Performance Indicators
During the year, the net return on ordinary activities before
taxation was a loss of GBP979,000 (2018: a loss of GBP582,000),
losses on investments were GBP416,000 (2018: 98,000) and earnings
per share represented a deficit of 2.39p (2018: a deficit of
1.42p). The Directors also use a number of Alternative Performance
Measures (APMs) in order to assess the Company's success in
achieving its objectives as these are considered to be more
appropriate long-term measures. The APMs are viewed by the Board as
additional Key Performance Indicators that enable Shareholders and
prospective investors to gain an understanding of the Company's
business, and are as follows:
-- NAV total return;
-- annual yield;
-- share price discount to NAV;
-- investment income; and
-- operational expenses.
The NAV total return is a measure of Shareholder value that
includes the current NAV per share and the sum of dividends paid to
date. The Directors seek to pay dividends to provide Shareholders
with a yield and to 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 an investment is lower than its net
asset value per share.
Definitions of these APMs can be found in the Glossary in the
Annual Report. A historical record of some of these measures is
shown in the Financial Highlights section of the Annual Report. The
change in the profile of the portfolio is reflected in the Summary
of Investment Changes in the Annual Report. The Board reviews the
Company's investment income and operational expenses on a quarterly
basis as the Directors consider that both of these elements are
important components in the generation of Shareholder returns.
Further information can be found in Notes 2 and 4 to the Financial
Statements within 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 appropriate
indices. The Directors also consider non-financial performance
measures, such as the flow of investment proposals, and ranking of
the VCT sector by independent analysts.
In addition, the Directors will consider economic, regulatory
and political trends and factors that may impact on the Company's
future development and performance.
Valuation Process
Investments held by Maven Income and Growth VCT 6 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
At the forthcoming AGM, the Board will seek the necessary
Shareholder authority 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. However, the Directors will consider economic,
regulatory and political trends and features that may impact on the
Company's future development and performance. 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. 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 within the Annual Report.
Future Strategy
The Board and Manager intend to maintain the policies set out
above for the year ending 31 March 2020 as it is believed that
these are in the best interests of Shareholders.
Approval
This Business Report, and the Strategic Report as a whole, was
approved by the Board of Directors and signed on its behalf by:
Brian May
Director
12 July 2019
INCOME STATEMENT
For the Year Ended 31 March 2019
Year ended 31 March Year ended 31 March
2019 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- -------- -------- --------
Losses on investments - (416) (416) - (98) (98)
Income from investments 177 - 177 276 - 276
Other income 18 - 18 25 - 25
Investment management fees (111) (445) (556) (118) (473) (591)
Other expenses (202) - (202) (194) - (194)
---------------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary activities (118) (861) (979) (11) (571) (582)
before taxation
Tax on ordinary activities - - - - - -
---------------------------------- -------- -------- -------- -------- -------- --------
Return attributable to Equity
Shareholders (118) (861) (979) (11) (571) (582)
---------------------------------- -------- -------- -------- -------- -------- --------
Earnings per share (pence) (0.29) (2.10) (2.39) (0.03) (1.39) (1.42)
---------------------------------- -------- -------- -------- -------- -------- --------
All gains and losses are recognised in the Income Statement.
All items in the above statement are derived from continuing
operations. The Company has only one class of business and one
reportable segment, the results of which are set out in the Income
Statement and Balance Sheet.
The Company derives its income from investments made in shares,
securities and bank deposits.
There are no potentially dilutive capital instruments in issue
and therefore no diluted earnings per share figures are relevant.
The basic and diluted earnings per share are therefore
identical.
The accompanying Notes are an integral part of the Financial
Statements and are included in full in the Annual Report.
Statement of Changes in Equity
For the Year Ended 31 March 2019
Share Capital Capital Special Capital
Share premium reserve reserve distributable redemption Revenue
capital account realised unrealised reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ---------- ---------- ---------- ------------ --------------- ------------ --------- ----------
At 31 March
2018 4,093 6,543 (2,090) (239) 15,227 90 (1,046) 22,578
Net return - - (257) (604) - - (118) (979)
Repurchase
and
cancellation
of shares (15) - - - (78) 15 - (78)
Costs in
relation
to DIS - (5) - - - - - (5)
-------------- ---------- ---------- ---------- ------------ --------------- ------------ --------- ----------
At 31 March
2019 4,078 6,538 (2,347) (843) 15,149 105 (1,164) 21,516
-------------- ---------- ---------- ---------- ------------ --------------- ------------ --------- ----------
For the Year Ended 31 March 2018
Share Capital Capital Special Capital
Share premium reserve reserve distributable redemption Revenue
capital account realised unrealised reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ---------- ---------- ---------- ------------ --------------- ------------ --------- ----------
At 31 March
2017 4,003 5,864 (1,246) 307 15,488 40 (1,035) 23,421
Net return - - (25) (546) - - (11) (582)
Dividends
paid - - (819) - - - - (819)
Repurchase
and
cancellation
of shares (50) - - - (261) 50 - (261)
Net proceeds
of share
issue 137 668 - - - - - 805
Net proceeds
of DIS issue 3 11 - - - - - 14
At 31 March
2018 4,093 6,543 (2,090) (239) 15,227 90 (1,046) 22,578
----------
The accompanying Notes are an integral part of the Financial
Statements and are included in full in the Annual Report.
Balance Sheet
As at 31 March 2019
31 March 2019 31 March 2018
GBP'000 GBP'000
-------------------------------------- ------------- -------------
Fixed assets 17,077 9,282
Investments at fair value through
profit or loss 72 241
Current assets 4,395 13,093
Debtors
Cash
-------------------------------------- ------------- -------------
Creditors 4,467 13,334
Amounts falling due within one year (28) (38)
-------------------------------------- ------------- -------------
Net current assets 4,439 13,296
-------------------------------------- ------------- -------------
Net assets 21,516 22,578
-------------------------------------- ------------- -------------
Capital and reserves
Called up share capital 4,078 4,093
Share premium account 6,538 6,543
Capital reserve - realised (2,347) (2,090)
Capital reserve - unrealised (843) (239)
Special distributable reserve 15,149 15,227
Capital redemption reserve 105 90
Revenue reserve (1,164) (1,046)
-------------------------------------- ------------- -------------
Net assets attributable to Ordinary
Shareholders 21,516 22,578
-------------------------------------- ------------- -------------
Net asset value per Ordinary Share
(pence) 52.77 55.16
The Financial Statements of Maven Income and Growth VCT 6 PLC,
registered number 3870187, were approved by the Board and were
signed on its behalf by:
Brian May
Director
12 July 2019
The accompanying Notes are an integral part of the Financial
Statements and are included in full in the Annual Report.
Cash Flow Statement
For the Year Ended 31 March 2019
Year ended 31 March Year ended 31 March
2019 2018
GBP'000 GBP'000
-------------------------------------- ------------------- -------------------
Net cash flow from operating
activities* (552) (511)
Cash flows from investing activities
Purchase of investments (8,776) (6,000)
Sale of investments 713 1,736
-------------------------------------- ------------------- -------------------
Net cash flows from investing
activities (8,063) (4,264)
-------------------------------------- ------------------- -------------------
Cash flows from financing activities
Equity dividends paid - (819)
Issue of Ordinary Shares - 819
Repurchase of Ordinary Shares (78) (261)
Costs relating to DIS (5) -
Net cash flows from financing
activities (83) (261)
====================================== =================== ===================
Decrease in cash (8,698) (5,036)
-------------------------------------- ------------------- -------------------
Cash at beginning of year 13,093 18,129
Cash at end of year 4,395 13,093
*Refer to Note 15 in the Annual Report for reclassification in
the current and prior year.
The accompanying Notes are an integral part of the Financial
Statements and are included in full in the Annual Report.
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2019
1. Accounting Policies
The Company is a public limited company, incorporated in England
and Wales and its registered office is shown in the Corporate
Summary within the Annual Report.
(a) Basis of preparation
The Financial Statements have been prepared under the historical
cost convention, as modified by the revaluation of investments and
in accordance with FRS 102, The Financial Reporting Standard
applicable in the UK and Republic of Ireland, and in accordance
with the Statement of Recommended Practice for Investment Trust
Companies and Venture Capital Trusts (the SORP) issued by the
Association of Investment Companies (AIC) in November 2014.
(b) Income
Dividends receivable on equity shares and unit trusts are
treated as revenue for the period on an ex-dividend basis. Where no
ex-dividend date is available dividends receivable on or before the
year end are treated as revenue for the period. Provision is made
for any dividends not expected to be received. The fixed returns on
debt securities and non-equity shares are recognised on a time
apportionment basis so as to reflect the effective interest rate on
the debt securities and shares. Provision is made for any fixed
income not expected to be received. Interest receivable from cash
and short term deposits and interest payable are accrued to the end
of the year.
(c) Expenses
All expenses are accounted for on an accruals basis and charged
to the income statement. Expenses are charged through the revenue
account except as follows:
-- expenses which are incidental to the acquisition and disposal
of an investment are charged to capital; and
-- expenses are charged to 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.
(e) Investments
In valuing unlisted investments the Directors follow the
criteria set out below. These procedures comply with the revised
International Private Equity and Venture Capital Valuation
Guidelines (IPEVCV) for the valuation of private equity and venture
capital investments. Investments are recognised at their trade date
and are designated by the Directors as fair value through profit
and loss. At subsequent reporting dates, investments are valued at
fair value, which represents the Directors' view of the amount for
which an asset could be exchanged between knowledgeable and willing
parties in an arm's length transaction. This does not assume that
the underlying business is saleable at the reporting date or that
its current shareholders have an intention to sell their holding in
the near future.
A financial asset or liability is generally derecognised when
the contract that gives rise to it is settled, sold, cancelled or
expires.
1. For early stage investments completed in the reporting
period, fair value is determined 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 investee
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
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.
4. In the absence of evidence of a deterioration, or strong
defensible evidence of an increase in value, the fair value is
determined to be that reported at the previous balance sheet
date.
5. All unlisted investments are valued individually by the
portfolio management team of Maven Capital Partners UK LLP. The
resultant valuations are subject to detailed scrutiny and approval
by the Directors of the Company.
6. In accordance with normal market practice, investments listed
on the Alternative Investment Market or a recognised stock exchange
are valued at their bid market price.
(f) Fair value measurement
Fair value is defined as the price that the Company would
receive upon selling an investment in a timely transaction to an
independent buyer in the principal or the most advantageous market
of the investment. A three-tier hierarchy has been established to
maximise the use of observable market data and minimise the use of
unobservable inputs and to establish classification of fair value
measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset
or liability, including assumptions about risk, for example, the
risk inherent in a particular valuation technique used to measure
fair value including such a pricing model and/or the risk inherent
in the inputs to the valuation technique. Inputs may be observable
or unobservable.
Observable inputs are inputs that reflect the assumptions market
participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of the
reporting entity.
Unobservable inputs are inputs that reflect the reporting
entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on best
information available in the circumstances.
The three-tier hierarchy of inputs is summarised in the three
broad levels listed below.
-- Level 1 - the unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the
measurement date.
-- Level 2 - inputs other than quoted prices included within
Level 1 that are observable (ie developed using market data) for
the asset or liability, either directly or indirectly.
-- 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.
(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 unlisted investments recognised in Note 8 in the
Annual Report and explained I n Note 1(e) above.
In the opinion of the Board and the Manager, there are no
critical accounting judgements.
Reserves
Share premium account
The share premium account represents the premium above nominal
value received by the Company on issuing shares net of issue
costs.
Capital reserves
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.
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. The capital reserve realised
account also represents capital dividends, capital investment
management fees and the tax effect of capital items.
Special distributable reserve
The total cost to the Company of the repurchase and cancellation
of shares is represented in the special distributable reserve.
Capital redemption reserve
The nominal value of shares repurchased and cancelled is
represented in the capital redemption reserve.
Revenue reserve
The revenue reserve represents accumulated profits retained by
the Company that have not been distributed to Shareholders as a
dividend.
Return per Ordinary Share
Year ended 31 March Year ended 31 March
2019 2018
------------------------------------ ------------------- -------------------
The returns per share have been 40,905,054 41,117,461
based on the following figures:
Weighted average number of Ordinary (GBP118,000) (GBP11,000)
Shares
Revenue return (GBP861,000) (GBP571,000)
Capital return
------------------------------------ ------------------- -------------------
Total return (GBP979,000) (GBP582,000)
------------------------------------ ------------------- -------------------
Net Asset Value per Ordinary Share
Net asset value per Ordinary Share as at 31 March 2019 has been
calculated using the number of Ordinary Shares in issue at that
date of 40,777,657 (2018: 40,927,657).
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 31 March 2019 and for the year to that
date;
-- the Directors' Report includes a fair review of the
development and performance of the Company, together with a
description of the principal risks and uncertainties that it faces;
and
-- the Annual Report and Financial Statements taken as a whole
is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company's position and
performance, business model and strategy.
Other information
The Annual General Meeting of the Company will be held on 4
September 2019, commencing at 11.00 am at 5th Floor, 1-2 Royal
Exchange Buildings, London, EC3V 3LF.
Copies of this announcement and copies of the Annual Report and
Financial Statements for the year ended 31 March 2019 will be
available to the public at the office of Maven Capital Partners UK
LLP, Kintyre House, 205 West George Street, Glasgow G2 2LW; at the
registered office of the Company, Fifth Floor, 1-2 Royal Exchange
Buildings, London EC3V 3LF; and on the Company's website at:
www.mavencp.com/migvct6.
The Annual Report and Financial Statements for the year ended 31
March 2019 will be issued to Shareholders and filed with the
Registrar of Companies in due course.
The financial information contained within this announcement
does not constitute the Company's statutory Financial Statements as
defined in the Companies Act 2006. The statutory Financial
Statements for the year ended 31 March 2018 have been delivered to
the Registrar of Companies and contained an audit report which was
unqualified and did not constitute statements under S498(2) or
S498(3) of the Companies Act 2006.
Neither the content of the Company's website nor the contents of
any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into, or forms part of, this
announcement.
The Annual Report will be submitted to the National Storage
Mechanism and, in due course, will be available for inspection at
www.morningstar.co.uk/uk/NSM.
By order of the Board
Maven Capital Partners UK LLP
Secretary
12 July 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UUSVRKSABAAR
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