Annual Financial Report

RNS Number : 8567G

Mobeus Income & Growth VCT PLC

31 March 2022

 

MOBEUS INCOME & GROWTH VCT PLC LEI:  213800HKOSEVWS7YPH79 ANNUAL FINANCIAL RESULTS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2021 Mobeus Income & Growth VCT plc (the "Company") announces the final results for the year ended 31 December 2021.  These results were approved by the Board of Directors on 31 March 2022. You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.migvct.co.uk . FINANCIAL HIGHLIGHTS As at 31 December 2021: Net assets: £112.96 million Net asset value ("NAV") per share: 90.31 pence ➤   Net asset value ("NAV") total return1 per share was 42.2%2. ➤   Share price total return1 per share was 47.8%. ➤   Dividends paid and declared in respect of the financial year totalled 9.00 pence per share. Cumulative dividends paid to date since inception in 2004 stand at 148.80 pence per share. ➤   £7.54 million was invested into four new growth capital investments and eight existing portfolio companies during the year. ➤   £30.91 million of unrealised gains were achieved in the year from strong portfolio performance. ➤   The Company realised investments totalling £15.23 million of cash proceeds and generated net realised gains in the year of £5.45 million. 1  Definitions of key terms and alternative performance measures shown above and throughout this report are shown in the Glossary of terms at the end of the Annual Report & Financial Statements. 2  Further details on the NAV total return are shown in the Performance section of the Strategic Report within the Annual Report & Financial Statements. PERFORMANCE SUMMARY Cumulative NAV Total return1 performance over the last 3, 5 and 10 years is 63%, 66% and 111% respectively. The table below shows the recent cumulative performance since launch as at the end of each of the last five years. R eporting date a s  at Net assets NA V per share Share price2 Cumulative dividends paid  per share1 Cumulative total return per share to Shareholders1 Dividends paid and proposed in respect of each year (p) (£m) p p (NAV Basis) (p) (Share Price Basis) (p) 31 December 2021 112.96 90.31 80.003 144.80 235.11 224.80 9.00 31 December 2020 84.69 67.03 57.50 139.80 206.83 197.30 11.00 31 December 2019 71.89 68.78 63.75 124.80 193.58 188.55 10.00 31 December 2018 75.08 70.25 62.00 113.80 184.05 175.80 7.00 31 December 2017 69.90 71.75 63.00 108.80 180.55 171.80 16.00 1  Definitions of key terms and alternative performance measures shown above and throughout this report are shown in the Glossary of terms on at the end of the Annual Report & Financial Statements . 2  Source: Panmure Gordon & Co (mid-market price). The discount on the Company's shares at 31 December 2021 was 4.2% as the share price was based on the NAV per share at 30 September 2021 of 83.47 pence. 3  The share price at 31 December 2021 has been adjusted for a 4.00 pence dividend paid after the year-end on 7 January 2022 which was ex-dividend at 31 December 2021. Dividends paid post year-end in respect of the year ended 31 December 2021 A second interim dividend of 4.00 pence per share comprised of 0.25 pence (income) and 3.75 pence (capital) was paid to Shareholders on 7 January 2022. Change in Management Arrangements Following the communication to all Shareholders sent by the Chairmen of each of the VCTs advised by Mobeus Equity Partners LLP ("Mobeus") on 10 September 2021, I am pleased to report the sale of the Mobeus VCT fund and investment management business to a subsidiary of Gresham House plc completed with effect from 30 September 2021. As a result, the Mobeus-advised VCTs' investment advisory arrangements have been novated from Mobeus to Gresham House Asset Management Limited ("Gresham House"). The Board believes that the agreement to the novation of the investment advisory arrangements was in the interests of the Mobeus VCTs' Shareholders and that the Company will benefit from scale advantages, continuity, portfolio diversification and investment in additional skilled staff at Gresham House. The Board is pleased that Clive Austin and Trevor Hope, the two leading partners involved with managing the Mobeus VCTs' investment portfolios, remain responsible for the investment, portfolio and fund management of the Mobeus VCTs, along-side the investment and operations teams. CHAIRMAN'S STATEMENT I am pleased to present the annual results of Mobeus Income & Growth VCT plc for the year ended 31 December 2021. Overview In last year's Annual Report, I was able to report on the Company's resilient performance over a time of material global uncertainty and market volatility. Twelve months later, I am pleased to say that it has been a year of continued strong trading and portfolio value growth to 31 December 2021. The Company achieved an exceptional NAV total return per share of 42.2% for the year (2020: 19.3%). Although this period has been marked by continued challenges, the portfolio has proven to be resilient and adaptive in facing them. The way in which businesses have been able to identify and capitalise on new opportunities in the changing UK consumer and business environment has been satisfying. The threat of impacts from the war in Ukraine and global supply chain issues in logistics, materials and labour is expected to remain for some months, although for the most part, trading for the Company's largely service and software-based portfolio has not been significantly impacted to date. Despite Brexit concerns and considerable COVID-19 related restrictions across the year, M&A activity has remained buoyant and the Investment Adviser continues to see a healthy deal flow. The Company deployed £7.54 million of investment capital and generated £15.23 million in realisation proceeds from investment activity during the year. In that time, it added four new investments to its portfolio, provided follow-on funding into eight existing portfolio companies and supported the successful admission to AIM of a further two of its investments. Shareholders should note that the portfolio now features some value concentration in two of its stocks: Preservica and Virgin Wines (13.0% and 10.6% of net assets respectively as at 31 December 2021), the latter of which was listed on AIM during the year. With this additional AIM exposure, there is the natural potential for a higher level of volatility in the value of the Company's portfolio and subsequent NAV returns. Following an initial uplift in value following the two IPOs in March 2021, the value of these quoted assets has been volatile over the rest of the year as the companies were impacted by unfavourable trading announcements and negative market sentiment. The remainder of the portfolio, on the whole, exhibited strong performance and growth over the same period. We are witnessing a clear demonstration of the benefits of what is now a diverse and maturing portfolio. Following the 2015 VCT rule change, the revised investment strategy is now bearing fruit as more young growth investments are starting to achieve significant scale and value. This view has been validated by third-party investment transactions which have brought significant positive re-rating in values of portfolio businesses, such as MPB and MyTutor, whilst the Company has also been able to support the scaling of investments such as Preservica, to which the Company provided significant further funding in November 2021. Performance The Company's NAV total return per share was 42.2% for the year to 31 December 2021 (2020: 19.3%), and the share price total return was 47.8% (2020: 13.7%). This difference in returns arises principally due to the timing of NAV announcements and is explained more fully under Performance in the Strategic Report within the Annual Report & Financial Statements. The positive NAV total return for the year was principally the result of significant unrealised gains in the value of investments still held, as well as realised gains achieved via exits and partial realisations of several portfolio companies. At the year-end, the Company was ranked 3rd out of 38 Generalist VCTs over five years and 1st out of 31 Generalist VCTs over ten years, in the Association of Investment Companies' analysis of NAV Total Return (dividends are reinvested). Shareholders should note that the AIC's rankings are based on the latest available published NAVs and therefore do not reflect the NAV per share increase achieved by the Company up to 31 December 2021. For further details on the performance of the Company, please refer to the Strategic Report within the Annual Report & Financial Statements . Dividends The Board continues to be committed to providing an attractive dividend stream to Shareholders and is pleased to have announced a second interim dividend of 4.00 pence per share, which was paid on 7 January 2022 to Shareholders on the register on 10 December 2021. This second interim dividend, together with a first interim dividend of 5.00 pence per share paid on 12 July 2021, to Shareholders on the register on 21 May 2021, brings dividends paid and proposed in respect of the financial year ended 31 December 2021 to 9.00 pence per share. To date, cumulative dividends paid since inception are 148.8 pence per share. The Company has always met, and often exceeded, the annual dividend payment target of at least 4.00 pence per share in respect of each financial year. As Shareholders have been advised previously, the gradual move of the portfolio to younger growth capital investments as well as the realisations of older, more mature companies that have provided a good income yield are likely to make dividends harder to achieve from income and capital returns in any given year and thus, the Board continues to monitor the sustainability of the annual dividend target. Shareholders should also note that there may continue to be circumstances where the Company is required to pay dividends in excess of income and capital gains in order to maintain its regulatory status as a VCT, for example, to stay above the minimum percentage of assets required to be held in qualifying investments. Such dividends paid in excess of net income and capital gains achieved will cause the Company's NAV per share to reduce by a corresponding amount. Investment portfolio The portfolio movements across the year were as follows: 2021 £m 2020 £m Openingportfoliovalue 51.14 51. 70 Newandfurtherinvestments 7.54 5.43 Disposalproceeds (15.23) (20 .80) Netrealisedgains 5.45 4.34 Valuation movements 30.91 10.47 Portfolio valueat31December 79.81 51.14 During the year, the Company invested a total of £7.54 million into four new and eight existing portfolio companies (2020: £5.43 million; three new, four existing). New investments totalling £3.15 million were made into Vivacity Labs (an artificial intelligence and Urban Traffic Control system), Caledonian Leisure (a provider of UK experience and leisure breaks), Legatics (a SaaS LegalTech software business) and Vet's Klinic (a veterinary clinic roll out). Additional funding of £4.39 million was provided across eight existing portfolio companies, including Parsley Box (an ambient meals provider), Bleach London (hair colourants brand), Arkk Consulting (a reporting requirements service provider), Tapas Revolution (a Spanish restaurant chain), MyTutor (an online tutoring marketplace), Andersen EV (a producer of premium EV chargers), ActiveNav (a provider of enterprise-level file analysis software) and Preservica (a seller of proprietary digital archiving software). The Company generated £7.23 million in proceeds from the realisation of its investments in Proactive Group and Vian Marketing Limited (trading as Red Paddle) during the year. In addition to £3.96 million of proceeds received from the partial realisations of Virgin Wines and Parsley Box (upon the admission of their shares to AIM as mentioned previously), the partial realisations of MPB Group and MyTutor, together with loan repayments and other capital receipts of £4.04 million, the Company generated total proceeds of £15.23 million in the year to 31 December 2021. The portfolio has performed very strongly over the Company's financial year. The overall value increased by £36.36 million (2020: £14.81 million), or 71.1% (2020: 28.7%) on a like-for-like basis, compared to the start of the year. This increase comprised a net unrealised uplift in portfolio valuations of £30.91 million and £5.45 million in net realised gains over the year. The portfolio was valued at £79.81 million at the year-end (31 December 2020: £51.14 million). Within net realised gains, the principal contributors were the full realised gains of Red Paddle (£3.28 million) as well as gains from the partial realisations of Parsley Box (£0.69 million), MPB Group (£0.53 million) and MyTutor (£0.45 million). The portfolio's valuation at the year-end reflects the continued beneficial impact of changes in UK consumer and business behaviour brought on by the pandemic and lockdown restrictions, particularly for those businesses operating direct-to-consumer models. This also underscores the success of portfolio companies in adapting to a rapidly changing environment, diversifying their product offering in order to take advantage of opportunities that have arisen. Since the year-end, the first joint investment by the VCTs under Gresham House took place into Proximity Insight, a retail software provider. The Company contributed £0.73 million towards a total investment of £5.00 million which completed on 10 February 2022. The Company also invested further funding totalling £0.27 million into Caledonian Leisure in January and February 2022. The flotation of both Virgin Wines and Parsley Box on the AIM market in March 2021 resulted in significant uplifts in valuation, as well as generating an element of realised returns. As part of the Virgin Wines transaction, the Company received repayment of its remaining loan stock, leaving Virgin Wines ungeared and, as part of the IPO of Parsley Box, the Company realised part of its equity holding, securing a 4.0x return on the cost of the shares sold. As was expected, these quoted stocks are subject to stock market movements and have brought an additional level of volatility to a portion of the portfolio. In the second half of the year, Parsley Box in particular saw a subsequent value decline in the face of changing market sentiment and an announcement of results which were below market expectations. Virgin Wines has experienced similar volatility, but had returned to its float price at the year end. In contrast, there have been substantial unquoted valuation increases, supported by a sizeable further investment from the Mobeus VCTs in the case of Preservica, and by third-party investment transactions in the cases of MyTutor, and MPB. It is gratifying that some growth investment companies in the portfolio have now started to achieve a scale that is attracting interest from larger private equity investors. Although a minority of portfolio companies have been disadvantaged by the COVID-19 pandemic, principally as a result of staff shortages, closure of retail sites and interrupted supplies, these factors have only had a modest impact on overall shareholder returns over the course of the Company's financial year. Further details of the Company's investment activity and the performance of the portfolio are contained in the Investment Adviser's Review and the Investment Portfolio Summary below. Revenue account The results for the year are set out in the Income Statement within the Financial Statements below and show a revenue return (after tax) of 0.54 pence per share (2020: 2.76 pence per share). The revenue return for the year of £0.68 million has decreased from last year's comparable figure of £3.47 million. This decrease is mainly due to the receipt of significant loan interest income in the previous year upon the sale of the Auction Technology Group. Liquidity & Fundraising Cash and cash equivalents held by the Company as at 31 December 2021 amounted to £32.97 million, or 29.2% of net assets. Following the payment of a 4.00 pence dividend shortly after the year-end, liquidity reduced to £27.95 million, or 25.9% of net assets. On 20 January 2022, the Company launched an offer for subscription of £10 million, alongside offers from the other Mobeus-advised VCTs ("Offers"). I am pleased to report that the Offers experienced unprecedented demand such that the Company received subscriptions amounting to the full amount sought within 24 hours of launching and closed to any further subscriptions on 21 January 2022. In accordance with the Offer's prospectus, the allotment of all shares under the offer took place on 9 March 2022, generating net funds (after offer costs) of £9.69 million. In consideration of the environmental factors and cost savings, the Company elected to release the Prospectus digitally, with hard copies only available upon request, and invited applications to be submitted online via a digital portal. This method provided increased security and efficiency in the application process and the Board strongly recommends that Shareholders wishing to subscribe to any future offers opt to submit their applications via the online facility. Share buybacks During the year, the Company bought back and cancelled 1,259,139 of its own shares (2020: 1,423,180), representing 1.0% of the shares in issue at the beginning of the year (2020: 1.4%), at a total cost of £0.92 million, inclusive of expenses (2020: £0.76 million). It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy and currently seeks to maintain the discount at which the Company's shares trade at no more than 5% below the latest published NAV. Shareholder Communications & Annual General Meeting May I remind you that the Company has its own website which is available at: www.migvct.co.uk . The Investment Adviser held a virtual Shareholder Event on the morning of 25 February 2022. A presentation was provided by representatives of each of the Mobeus VCT Boards as well as the Investment Adviser and the founders of two portfolio companies, Virgin Wines and MBI. A recording of the event is available here: https://mvcts.connectid.cloud/ Your Board is pleased to be able to hold the next Annual General Meeting ("AGM") of the Company in person at 2.00 pm on Thursday, 26 May 2022 at the offices of the Company's solicitors, Shakespeare Martineau, at 60 Gracechurch Street, London EC3V 0HR. A webcast will also be available at the same time for those Shareholders who cannot attend in person. However, please note that you will not be able to vote via this method and you are encouraged to return your proxy form before the deadline of 24 May 2022. Information setting out how to join the meeting by virtual means will be shown on the Company's website. For further details, please see the Notice of the Meeting which can be found at the end of the Annual Report & Financial Statements. Board Succession Catherine Wall announced her retirement from the Board, effective from 1 January 2022. Catherine brought an enormous wealth of experience and breadth to the Company during her six and a half years as a director and Chairman of the Audit Committee, for which the Board is very grateful. The Board considered its composition and succession in light of this and has been engaged in a recruitment process to appoint a director to the Board who will also fulfil the role of Chairman of the Audit Committee. When recruiting prospective candidates, the Board took into consideration the range of requisite skills, experience and qualifications needed to carry out the role as well as diversity and, on 1 March 2022 the Company announced the appointment of Lucy Armstrong, which was effective immediately. Fraud Warning We have been made aware of a number of Shareholders being contacted in connection with sophisticated but fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the UK, claiming or appearing to be from a corporate finance firm offering to buy your shares at an inflated price. The Board strongly recommends Shareholders take time to read the Company's Fraud warning section, including details of who to contact, contained within the Information for Shareholders section at the end of the Annual Report & Financial Statements . Environmental, Social and Governance ("ESG") The Board and the Investment Adviser believe that the consideration of environmental, social and corporate governance ("ESG") factors throughout the investment cycle will contribute towards enhanced Shareholder value. Following the novation of the investment advisory agreement to Gresham House Asset Management Limited, who have a team which is focused on sustainability, the Board views this as an opportunity to enhance the Company's existing protocols and procedures through the adoption of the highest industry standards. Under the new enlarged investment team, each investment executive is responsible for setting and achieving their own individual ESG objectives in support of the wider overarching ESG goals of the Investment Adviser. Outlook The year under review can be characterised as a continuation of the trying environment created for businesses in light of the COVID-19 pandemic and Brexit in 2020. However, much in the same way that we were able to report on its remarkable recovery one year ago, the Company has continued to achieve success in creating opportunities and building on them. This has been exemplified by strong trading performances and value growth across the portfolio and in exceeding expectations for the level of investment activity. Whilst the immediate threat of further lockdowns from new variants of the virus appears to have lessened to some extent as we move into 2022, we anticipate that the indirect effects of the COVID-19 pandemic and Brexit will continue to impact the UK economy and bring an element of uncertainty for some time to come, most notably in the form of supply chain and inflationary pressures. More recently, the distressing invasion of Ukraine has sent shockwaves through global financial markets. Portfolio valuations may therefore remain volatile, particularly those of AIM-listed companies. Whilst the portfolio has limited direct exposure to these geographies, this action is expected to exacerbate risk factors in the short-term. Nonetheless, following the successful fundraising in January 2022, the Board considers that your Company is well positioned to adapt as necessary. The Board was very pleased to have witnessed such a positive response to the launch of the Company's offer for subscription in January and would like to thank all Shareholders for their interest in applying for the Company's shares. The Board has been satisfied with the Company's ability to maintain a high rate of investment in quality opportunities over the year. It believes that the additional fundraising will provide the necessary capital to continue to create value growth for Shareholders in what has, to date, proven to be a successful investment strategy. I would like to take this opportunity once again to thank all Shareholders for your continued support. Clive Boothman Chairman 31 March 2022 INVESTMENT POLICY The Company's policy is designed to meet the Company's Objective. Investments The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a wide variety of sectors, principally in established companies. Investments are generally structured as part loan and part equity in order to receive regular income and to generate capital gains from realisations. There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation. Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment. Liquidity The Company's cash and liquid funds are held in a portfolio of readily realisable interest-bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised. Borrowing The Company's Articles of Association permit borrowing of up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances. INVESTMENT ADVISER'S REVIEW Change in Management Arrangements As Shareholders will be aware, Gresham House Asset Management Limited ("Gresham House") acquired the VCT investment advisory business of Mobeus Equity Partners LLP ("Mobeus") and, as a result, the entire investment and operations teams of Mobeus joined Gresham on 1 October 2021. At the time of writing, the integration has been well underway for just over six months. Having formed one of the largest and most experienced teams in the VCT sector, the team recently completed its first combined investment into Proximity Insight, a retail software provider. It is hoped that this combined investment team will be a major force in the supply of capital to the VCT sector and the team's enhanced market position should attract strong deal flow in order to produce attractive investment returns. Portfolio Review Having recovered from the COVID-19 related decline in value by the start of the Company's financial year, the portfolio has made further positive progress over the past 12-months. Whilst markets helped deliver a strong recovery in 2020, the main driver of value in 2021 has been a continuation of buoyant underlying trading performance across the portfolio. This has been bolstered by a small number of significant re-ratings during the year. A limited number of portfolio companies have experienced disruption as a result of the UK lockdowns, but it is pleasing to report that a significant proportion have benefited from what appears to be a structural change in consumer purchasing habits and, indeed, the majority of the portfolio companies are now trading above their pre COVID-19 levels. Overall, the majority of the portfolio has demonstrated a high degree of resilience, with the vast majority of companies by number showing revenue and/or earnings progression over the previous two years. Investments classified as Retailers now comprise over 43% of the portfolio by value, all of which are demonstrating the success of the direct-to-consumer business model. In the case of both Virgin Wines UK plc and Parsley Box Group plc, this strong performance led to successful AIM flotations in March 2021. Significant up-ratings in the unquoted portfolio have been a consistent feature across the year, with third-party investment driving value uplifts in MPB and MyTutor, and a sizeable further investment from the Mobeus VCTs doing the same in the case of Preservica. Whilst the portfolio has limited exposure to more challenging sectors such as hospitality and overseas travel, software and other technology-enabled businesses have performed strongly. A small number of companies have struggled, though they are in the minority and their impact on overall shareholder return is minimal. Furthermore, some of these companies, such as Media Business Insight and RDL, have fundamentally re-engineered their businesses, which should provide a more positive outlook. It is worth noting that Virgin Wines and Preservica currently account for a significant proportion of the invested portfolio's value (33.3% of the portfolio value, 23.6% of net assets), whilst 15.7% of the portfolio now held in AIM-listed investments (which equates to 11.1% of net assets). The AIM market has witnessed some volatility over the Company's financial year, with market sentiment reducing the initial value uplifts of the IPOs of Virgin Wines and Parsley Box in March. Whilst Virgin Wines had recovered its value by the year-end, Parsley Box was further impacted by its announcements of tougher trading conditions, supply constraints and further fundraising. In line with market practice, in both cases the Company's shareholdings are subject to lock-in arrangements for a period post-flotation. Strong trading activity levels have created investment opportunities for the Company as portfolio companies sought to enhance their positions by building capability in light of demand. A number of further investments were therefore made into the portfolio during the year. Gresham House continues to review the opportunities for follow-on investments. M&A sentiment also remained buoyant with a continuing stream of attractive realisations throughout the period. The outlook for both follow-on investment and realisations continues to be positive. The Company made investments totalling £7.54 million (2020: £5.43 million), comprising £3.15 million (2020: £1.86 million) into four new investments and £4.39 million (2020: £3.57 million) into eight existing investments. This level of new and follow-on investment is pleasing given the continued uncertainty and lockdown restrictions during the year under review. A strong track record for the growth investments is now emerging which validates the strategic change arising from the change in VCT rules in 2015. Overall, it is reassuring to see that the more traditional investments, as well as the new growth investments, are continuing to make good progress. Portfolio review The portfolio's movements and valuation changes in the year are summarised below: InvestmentPortfolio CapitalMovement 2021 £m 2020 £m Increaseinthevalueof unrealisedinvestments 32.82 15.54 Decreaseinthe valueofunrealised investments (1.91) (5.07) Netincreaseinthe valueofunrealised investments 30.91 10.47 Realised gains 5.53 4.63 Realised losses (0.08) (0 .29) Netrealisedgainsintheyear 5.45 4.34 Net investment portfolio capital movement in the year 36.36 14.81 2021 £m 2020 £m Openingportfoliovalue 51.14 51. 70 Newandfurtherinvestments 7.54 5.43 Disposalproceeds (15.23) (20 .80) Netrealisedgains 5.45 4.34 Valuation movements 30.91 10.47 Portfolio valueat31December 79.81 51.14 New investments during the year The Company made four new investments totalling £3.15 million during the year, as detailed below: Company Business Date of Investment Amount of new investment (£m) Vivacity Artificial intelligence & urban traffic control system February 2021 1.16 Vivacity (vivacitylabs.com) develops camera sensors with on-board video analytics software that enables real-time anonymised data gathering of road transport system usage. It offers city transport authorities the ability to manage their road infrastructure more effectively, enabling more efficient monitoring of congestion and pollution levels as well as planning for other issues, such as the changing nature of road usage (e.g. the increasing number of cyclists). The technology and software represent a significant leap forward for local planning authorities which have traditionally relied upon manual data collection methods. The growth capital funding will allow the management team to achieve deeper penetration of the UK transport management sector, explore opportunities internationally and commercialise its new Smart Junction offering. Revenues have grown 350% over the last three years and it has exceeded its most recent year's budget despite the onset of the COVID-19 pandemic. In April 2021, Vivacity won the Queen's Award for Enterprise: Innovation 2021. Caledonian Leisure UK leisure and experience breaks March-May 2021 0.41 Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as entertainment destinations and theme parks) to deliver UK-based leisure and experience breaks to its customers. It comprises two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The domestic leisure and experience travel market has been devastated by the COVID-19 pandemic, but the company is well-placed to expand as lockdown and travel restrictions are eased. A series of planned investment tranches, has helped the company prepare for and capitalise on the strong demand for UK staycation holidays. Legatics SaaS LegalTech software business June 2021 0.82 Legatics (legatics.com) transforms legal transactions by enabling deal teams to collaborate and close deals in an interactive online environment. Designed by lawyers to improve legacy working methods and solve practical transactional issues, the legal transaction management platform increases collaboration, efficiency and transparency. As a result, Legatics has been used by around 1,500 companies, and has been procured by more than half of the top global banking and finance law firms, with collaborations having been hosted in approximately 50 countries. With this new funding round, Legatics will be looking to double the size of its team over the next 18 months and further develop its technology to deliver new features and use cases for a wider range of practice areas within new and existing customers. Vet's Klinic Veterinary clinics June 2021 0.76 Pets' Kitchen (trading as Vet's Klinic) is an established and profitable veterinary clinic providing veterinary services (vetsklinic.co.uk) as well as a premium pet food provider (vetskitchen.co.uk). Its primary Swindon 'super clinic' is a first opinion veterinary practice where pet owners can schedule consultations online and obtain real time feedback on in-patient care through its own technology platform. Without compromising on quality of care, this model enables a significantly higher price point compared to the industry average. This new investment will be used to roll out its unique clinic model to other sites along the M4 corridor. Further investments during the year A total of £4.39 million was invested into eight existing portfolio companies during the year, as detailed below: Company Business Date of Investment Amount of further investment (£m) Parsley Box Ambient ready meals targeting the over 60s January/March 2021 0.35 Parsley Box (parsleybox.com) is a UK direct to consumer supplier of home delivered, ambient ready meals for the over 60s. Founded in 2017, Parsley Box has grown rapidly and has developed a unique meal delivery solution for its customers. The company supplies a diverse range of ambient meals via next day delivery which are easy to store and contribute to a more independent and healthier lifestyle. The company has seen a strong benefit from the COVID-19 pandemic with revenues nearly eight times that at the time of the original VCT investment. This further investment enabled the company to scale its marketing strategy and to process larger order volumes and continue to build out its team. Parsley Box's shares were admitted to trading on AIM on 31 March 2021. As part of the transaction, the Company also partially realised a portion of its investment, as detailed in the "Loan stock repayments and other gains/(losses) during the year" section of this report below. Bleach London Hair colourants brand February 2021 0.14 Bleach London Holdings ("Bleach") (bleachlondon.com) is an established branded, fast-growing business which manufactures a range of haircare and colouring products. Bleach has made sound commercial progress since the VCTs invested in 2019 with its direct-to-consumer channels benefiting from the COVID-19 pandemic. Revenues have grown over 90% ahead of the previous year. This further investment, along with strong support from existing investors, is being used to invest in marketing and infrastructure to enable the business to accelerate its development in the United States of America. Arkk Consulting Regulatory and reporting requirement service provider February 2021 0.62 Arkk Consulting (trading as Arkk Solutions) (arkksolutions.com) provides services and software to enable organisations to remain compliant with regulatory reporting requirements. Arkk was established in 2009 and currently has over 800 clients across 20 countries. These include more than 80 of the FTSE 350, and half of the largest 20 accountancy firms in the UK. This further investment is to enable continued development of its software in order to capitalise on HMRC's 'Making Tax Digital' campaign. The company has incorporated artificial intelligence into its product and recurring revenues are now over 50% higher than at the point of the original investment in May 2019. Tapas Revolution Spanish restaurant chain June 2021 0.21 Spanish Restaurant Group (trading as Tapas Revolution) (tapasrevolution.com) is a leading Spanish restaurant chain in the casual dining sector. At initial investment in January 2017, it was operating five sites and, subsequent to a further investment round in March 2018, had grown to 12 sites. Tapas was trading well and had a strong outlook up until the onset of COVID-19 which mandated the closure of much of its estate during the course of 2020 in response to the varying patterns of government restrictions. Costs were controlled well under the circumstances and this further investment provided financial headroom whilst the business re-opened its estate. MyTutor Digital marketplace for online tutoring August 2021 0.82 MyTutorweb (trading as MyTutor) (mytutor.co.uk) is a digital marketplace that connects school pupils who are seeking private one-to-one tutoring with university students. The business is satisfying a growing demand from both schools and parents to improve pupils' exam results. This further investment, alongside other existing shareholders and Australian strategic co-investor, SEEK, who invested £30 million, aims to build and reinforce its position as a UK category leader in the online education market as well as to begin to develop a broader, personalised learning product. The company has been chosen as a Tutoring Partner for the National Tuition Programme where they will directly support 30,000 students in catching up on lost learning because of the COVID-19 pandemic. Andersen EV Provider of premium electric vehicle (EV) chargers September 2021 0.20 Muller EV Limited (trading as Andersen EV) (andersen-ev.com) is a design-led manufacturer of premium electric vehicle (EV) chargers. Incorporated in 2016, this business has secured high profile partnerships with Porsche and Jaguar Land Rover, establishing an attractive niche position in charging points for the high end EV market. This follow-on funding is to further support its premium brand and product positioning whilst ensuring all new and existing products meet the most recent and highest safety and compliance standards. Andersen has continued its strong trading performance with revenue up over 300% year on year. Preservica Seller of proprietary digital archiving software October/ November 2021 1.65 Preservica (preservica.com) is a SaaS software business with blue chip customers and strong recurring revenues. It has developed market leading software for the long-term preservation of digital records, ensuring that digital content can remain accessible, irrespective of future changes in technology. This latest investment is to provide additional growth capital to finance the further development of the business. The business has seen annual recurring revenues nearly double over the last two financial years. ActiveNav A provider of enterprise-level file analysis software December 2021 0.40 Data Discovery Solutions, trading as ActiveNav (activenav.com), is a file analysis software solution which makes it easier for companies to clean up network drives, respond to new data protection laws and dispose of redundant and out dated documents. ActiveNav's solution is used by significant blue chip customers, particularly those in highly regulated industries such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK. This further funding is to market its nascent Hubble platform in order to generate further company value.             Portfolio valuation movements The portfolio generated net unrealised gains of £30.91 million in the year. The scale of the valuation increases was underpinned by the Company's growth portfolio, many of which have direct-to-consumer business models which have grown significantly since the onset of the COVID-19 pandemic. In the first half of the year, the Company generated significant unrealised gains, exemplified by the successful flotations of two investments on AIM. Despite ongoing uncertainties relating to COVID-19, Gresham House believes that the pandemic has accelerated existing trends in consumer behaviour and, in many cases, companies have experienced significant growth in demand. Over this period, some older style MBO portfolio companies with similar business practices have also benefited. A few companies have struggled in this environment, but their value has already been reduced to modest levels, reducing the risk to shareholder value. Total valuation increases were £32.82 million. The main valuation increases were: Preservica £8.21 million Virgin Wines £6.39 million MPB Group £3.62 million Media Business Insight (MBI) £3.42 million EOTH £3.34 million Virgin Wines, EOTH (Equip) and MPB Group generated record revenues and earnings over the lockdown periods and beyond. They have all significantly increased their customer base and each have strong growth prospects. Strong trading and recurring revenues at Preservica have attracted third-party investment interest which has led to a sizeable re-rating. MBI has recovered very strongly having developed its capability to provide both virtual and physical events. Total valuation decreases were £(1.91) million. The main valuation decreases were: Parsley Box £(1.39) million Andersen EV £(0.23) million Bleach London £(0.20) million Following a strong IPO in March, the value of Parsley Box subsequently experienced a significant decline over the year in light of market sentiment compounded by company announcements of slower than anticipated sales growth and supply disruption. The business intends to carry out a further fundraising soon. Andersen EV has been operating in a fast-developing industry beset with regulatory hurdles that have challenged its progress over the period albeit, these are now resolved. Bleach has had a challenging period having had to delay its US launch and having experienced normalised D2C revenues post UK lockdown. The US launch has now taken place after the Company's year-end. The majority of the increase in portfolio value lies in the top 10 companies which represent over 70% of the portfolio by value. Year-on-year growth by either revenues or earnings has been seen in all of the top ten companies and it is pleasing to note that eight of these are from the younger, growth portfolio. Growth capital investing involves companies which often have not achieved profitability, and as a result, have to be measured on other metrics. The table below shows the proportion of the portfolio that is represented by high growth pre-profit companies (often valued by reference to revenue or gross profit multiple), compared with more mature, established companies with a history of profitability and which are therefore valued on an earnings multiple: Valuation methodology 2021 £m 2020 £m Revenue multiple 41.28 25.55 Earnings multiple 25.67 23.50 Bid Price 12.52 - Recent investment price (reviewed for impairment) 0.27 - Other 0.07 0.50 Recent investment price - 1.59 Total 79.81 51.14 Portfolio Realisations The Company realised two of its investments during the year, as detailed below: Company Business Period of investment Total cash proceeds over the life of the investment / Multiple over cost Proactive Group Provider of media services and investor conferences January 2018 to  September 2021 £2.38 million 2.6x cost On 29 September 2021, the Company sold its investment in Proactive Group Holdings Inc ("Proactive"). The Company received £2.32 million in cash following the disposal of its equity and loan notes, contributing to a realised gain over cost over the life of the investment of £1.46 million (realised loss in the year: £(0.01) million). Total proceeds received over the nearly four-year life of the investment were £2.38 million, compared to an original cost of £0.93 million, which is a multiple on cost of 2.6x and an IRR of 33.0%. Red Paddle Design and manufacturer of stand up paddleboards October 2008  to February 2020 £5.87 million 4.9x cost The Company sold its investment in Vian Marketing (trading as Red Paddle) to the Myers Family Office for £4.91 million (realised gain in the year: £3.19 million). Total proceeds received to date over the six-year life of the investment were £5.87 million compared to an original investment cost of £1.19 million, which is a multiple on cost of 4.9x and an IRR of 31.5%. Further proceeds of £0.53 million were received after the year end.           Loan stock repayments and other gains/(losses) During the year and following the admission of its shares to AIM, the Company received £1.59 million from the partial realisation of its holding in Parsley Box, generating a realised gain of £0.69 million. Over the two years to date this investment has been held, this partial sale generated a multiple of cost of 4.0x on the cost of the shares sold. The Company also received £1.62 million from the partial realisation of MPB Group generating a realised gain of £0.39 million. This partial realisation generated a 7.8x multiple of cost on the cost of the shares sold and was the result of Vitruvian Partners, a large private equity investor, taking a sizeable equity investment in the company. There was a further partial realisation of MyTutor which generated £0.82 million proceeds for the Company and a realised gain in the year of £0.45 million. repayments from Virgin Wines, Media Business Insight, Vian Marketing (trading as Red Paddle) and MPB Group, generating realised gains totalling £0.46 million. Finally, deferred consideration totalling £0.35 million in realised gains was received in respect of investments realised in a previous year. A small realised loss of £(0.07) million was also recognised in respect of transaction costs for Virgin Wines due to stamp duty paid upon the admission of the shares to listing on AIM. Portfolio income and yield In the year under review, the Company received the following amounts in loan interest and dividend income: InvestmentPortfolio Yield 2021 £m 2020 £m Interestreceivedinthe year 1.26 3.03 Dividendsreceivedin the year 0.45 1.63 Total portfolioincome intheyear1 1.71 4.66 Portfolio valueat31 December 79.81 51.14 Portfolio IncomeYield (Incomeasa%of Portfoliovalueat 31 December) 2.1% 9.1% 1  Total portfolio income in the year is generated solely from investee companies within the portfolio. The fall in interest received is due to a significant interest receipt of £1.78 million from the realisation of Auction Technology Group in 2020. New investment after the year-end £0.73 million was invested into a new investment after the year-end, as detailed below: Company Business Date of investment Amount of new investment (£m) Proximity Insight 'Super-App' used to inspire and transact with customers February 2022 0.73 Proximity Insight (proximityinsight.com) is a retail technology business that offers a 'Super-App' that is used by the customer-facing teams of brands and retailers to engage, inspire and transact with customers. Headquartered in London with offices in New York and Sydney, Proximity Insight has a global client base that includes over 20 brands, boutiques and department stores in fashion, beauty, jewellery, electronics and homewares. These clients use Proximity Insight's platform to blur the lines between physical and digital retail, enhancing the customer experience and improving the lifetime value of their customers by upwards of 35%. The business grew annual recurring revenue by 117% to £2.2 million in 2021, and the investment will support Proximity Insight's continued product development and international growth. The investment was made across all six VCTs advised and managed by Gresham House, including the two Baronsmead VCTs. Further investment made after the year-end The Company made a further investment into an existing portfolio company of £0.27 million after the year-end, as detailed below: Company Business Date of investment Amount of further investment (£m) Caledonian Leisure UK leisure and experience breaks January/February 2022 0.27 Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as entertainment destinations and theme parks) to deliver UK-based leisure and experience breaks to its customers. It comprises two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The domestic leisure and experience travel market has been devastated by the COVID-19 pandemic, but the company is well-placed to expand as lockdown and travel restrictions are eased. The business has significantly exceeded planned revenues since launch and this funding will provide additional working capital to facilitate further growth. Environmental, Social and Governance considerations When seeking new investment opportunities, the Investment Adviser under Mobeus ensured that each potential new investment was subject to a comprehensive due diligence process encompassing commercial, financial and ESG-related considerations. This process helped in the formulation and agreement of strategic objectives at the stage of business planning and investment. The Investment Adviser has continued to work closely with each portfolio company board to support them in addressing their own ESG challenges and opportunities, which are diverse across the entire portfolio. Following the novation of the advisory agreement to Gresham House on 30 September 2021, a market leader that is well-resourced with knowledge and expertise in sustainability, the Investment Advisor has moved to establish ESG procedures and protocols of the highest standards as set out and informed by Gresham House plc. The first tangible example of this revised approach is that that the individual members of the investment team now have their own individual ESG objectives set which align with the wider ESG goals of the Investment Adviser. Gresham House is committed to sustainable investment as an integral part of its business strategy.  During 2021, the Investment Adviser has taken further steps to formalise its approach to sustainability and has put in place several processes to ensure environmental, social and governance ("ESG") factors and stewardship responsibilities are built into asset management across all funds and strategies, including venture capital trusts. Gresham House believes the "G" (Governance) of ESG is the most important factor in its investment processes. Board composition, governance, control, company culture, alignment of interests, shareholder ownership structure and remuneration policy are important elements that will feed into the analysis and the valuation of portfolio companies. The "E" and "S" (Environmental and Social) will be assessed as risk factors during due diligence to eliminate companies that face environmental and social risks that cannot be mitigated through engagement and governance changes. Where material ESG risks are identified, these will be reviewed by the Adviser and a decision on how to proceed will be documented. The Adviser will then proactively follow up with the investee company management team and ensure appropriate corrective and preventative action is taken and any material issues or incidents are recorded by the Adviser. Gresham House published its inaugural Sustainable Investment Report in 2021, that along with existing asset specific policies, including the Public Equity Policy, can be found on its website (www.greshamhouse.com). These reports and policies cover the Investment Adviser's sustainable investment commitments, how the investment processes meet these commitments and the application of the sustainable investment framework.  The Gresham House Board and General Management Committee assess the adherence to the commitments in the Sustainable Investment Policies on an annual basis. In a changing world, the Investment Adviser believes that this approach will contribute towards the enhancement of Shareholder value going forward. Outlook The growth strategy implemented in 2015 is clearly bearing fruit with many companies beginning to achieve significant scale and attract the interest of public markets and larger secondary investors. The portfolio is in a healthy position with many companies trading well throughout the lockdowns, and several at record levels. It continues to evolve, offering a balance of fast-growing and more stable investments at various stages of maturity and scale across a range of diverse market sectors. Meanwhile, the new investment pipeline is recovering to levels seen pre-COVID-19 and the prospects for capital deployment are encouraging. The exceptional performance experienced since the impact of COVID-19 in March 2020 is, therefore, likely to moderate over the next 12 months as the level of activity normalises. Although the threat of further lockdowns to combat emerging new variants appears to have lessened somewhat, much uncertainty remains around the wider impact of the pandemic upon the economy, particularly in respect of supply chain and inflationary issues. The tragic events currently unfolding in Ukraine have amplified this uncertainty and shocked financial markets around the world. The Investment Adviser has reviewed the underlying assets and has concluded that there are no material impacts on the valuation of the portfolio. Whilst these events have created significant short-term volatility post year-end, the portfolio is in robust shape and the investment activity levels are promising. Gresham House therefore remains optimistic for the future. Gresham House Asset Management Limited Investment Adviser 31 March 2022 Investment Portfolio Summary as at 31 December 2021 Market sector Date of investment Total book cost Valuation Like for like valuation increase/ (decrease) over year1 % value of net assets % of equity held by funds advised by Gresham House Investment Portfolio £'000 £'000 Qualifying investments Unquoted investments Preservica Limited Software and computer services Dec-15   4,498   14,636 171.7% 13.0% 57.9% Seller of proprietary digital archiving software Virgin Wines UK plc(formerly Virgin Wines Holding Company Limited)2 (AIM quoted) Retailers Nov-13   58   11,985 79.2% 10.6% 41.5% Online Wine retailer MPB Group Limited Retailers Jun-16   1,405   7,395 78.4% 6.5% 14.4% Online marketplace for used photographic and video equipment EOTH Limited (trading as Equip Outdoor Technologies) Retailers Oct-11   1,000 6,289 124.1% 5.6% 8.0% Branded outdoor equipment and clothing (Rab and Lowe Alpine) My TutorWeb Limited (trading as MyTutor) Industrial support services May-17   2,892   5,885 102.5% 5.2% 22.6% Digital marketplace connecting school pupils seeking one-to-one online tutoring End Ordinary Group Limited (trading as Buster and Punch) Retailers Mar-17   1,885   4,162 24.9% 3.7% 34.6% Industrial inspired lighting and interiors retailer Media Business Insight Holdings Limited Media Jan-15   2,518   4,091 550.0% 3.6% 67.5% A publishing and events business focused on the creative production industries Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) Industrial support services Dec-14   419   3,602 187.2% 3.2% 28.0% A specialist logistics, storage and removals business Data Discovery Solutions Limited (trading as ActiveNav) Software and computer services Nov-19   1,809   3,370 5.2% 3.0% 35.1% Provider of global market leading file analysis software for information governance, security and compliance Arkk Consulting Limited (trading as Arkk Solutions) Software and computer services May-19   2,069   2,174 1.9% 1.9% 30.1% Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Retailers Jul-17   2,174   2,171 26.3% 1.9% 27.5% Online retailer in the water sports market Tharstern Group Limited Software and computer services Jul-14   1,377   1,519 16.1% 1.3% 55.0% Software based management information systems Connect Childcare Group Limited Software and computer services Dec-20   1,168   1,373 17.5% 1.2% 14.4% Nursery management software provider Vivacity Labs Limited Technology, hardware & equipment Feb-21   1,158   1,158 New investment 1.0% 20.0% Provider of artificial intelligence & urban traffic control systems Bleach London Holdings Limited Retailers Dec-19   816   1,026 (18.2)% 0.9% 14.1% Hair colourants brand Rota Geek Limited Software and computer services Aug-18   1,142   1,001 5.4% 0.9% 20.3% Workforce management software IPV Limited Software and computer services Nov-19   890   890 - 0.8% 26.6% Provider of media asset software Spanish Restaurant Group Limited (trading as Tapas Revolution) Travel & leisure Jan-17   1,453   882 305.9% 0.8% 29.0% Spanish restaurant chain Caledonian Leisure Limited Travel & leisure Mar-21   409   865 New investment 0.8% 30.0% Provider of UK leisure and experience breaks Legatics Holdings Limited Software and computer services Jun-21   822   822 New investment 0.7% 27.3% SaaS LegalTech software provider Pets' Kitchen Limited (trading as Vet's Klinic) Consumer services Jun-21   763   763 New investment 0.7% 20.0% Veterinary clinics Northern Bloc Ice Cream Limited Food producers Dec-20   420   689 64.0% 0.6% 27.3% Supplier of premium vegan ice cream Parsley Box Group plc (formerly Parsley Box Limited) 3 (AIM quoted) Retailers May-19   806   534 (28.2)% 0.5% 13.9% Supplier of home delivered ambient ready meals targeting the over 60s CGI Creative Graphics International Limited General industrials Jun-14   1,808   495 1.7% 0.4% 26.9% Vinyl graphics to global automotive, recreational vehicle and aerospace markets RDL Corporation Limited Industrial support services Oct-10   1,558   495 109.9% 0.4% 44.5% Recruitment consultant for the pharmaceutical, business intelligence and IT industries Muller EV Limited (trading as Andersen EV) Technology, hardware & equipment Jun-20   472   270 (77.6)% 0.2% 37.0% Provider of premium electric vehicle (EV) chargers Kudos Innovations Limited Software and computer services Nov-18   421   105 (46.2)% 0.1% 10.9% Online platform that provides and promotes academic research dissemination Jablite Holdings Limited (in members' voluntary liquidation) Construction and materials Apr-15   502   66 - 0.1% 40.1% Manufacturer of expanded polystyrene products Veritek Global Holdings Limited Industrial support services Jul-13   2,045   -  - 0.0% 65.6% Maintenance of imaging equipment Racoon International Group Limited Personal goods Dec-06   1,213   -  - 0.0% 36.0% Supplier of hair extensions, hair care products and training BookingTek Limited Software and computer services Oct-16   688   -  - 0.0% 14.9% Direct booking software for hotels Oakheath Limited (in members' voluntary liquidation) Industrial support services Mar-18   580   -  - 0.0% 18.7% Online platform that connects people seeking care home from experienced independent carers Total qualifying investments 41,238 78,713 69.6%4 Non-qualifying investments Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Retailers Jul-17   571   571 - 0.5% 27.5% Online retailer in the water sports market EOTH Limited (trading as Equip Outdoor Technologies) Retailers Oct-11   298   324 - 0.3% 8.0% Branded outdoor equipment and clothing (Rab and Lowe Alpine) Media Business Insight Limited Media Jan-15   200   200 - 0.2% 67.5% A publishing and events business focused on the creative production industries Total non-qualifying investments 1,069 1,095 1.0% Total investment portfolio 42,307 79,808 70.6% Current asset investments and cash at bank5 32,967 32,967 29.2% Total investments 75,274 112,775 99.8% Other assets 433 0.4% Current liabilities (248) (0.2)% Net assets 112,960 100.0% Portfolio split by type Investment made prior to 2015 VCT rule change 12,996 29,066 36.4% Investment made after 2015 VCT rule change 29,311 50,742 63.6% Total investment portfolio 42,307 79,808 100.0% 1 - This percentage change in 'like for like' valuations is a comparison of the 31 December 2021 valuations with the 31 December 2020 valuations (or where a new investment has been made in the year, the investment amount), having adjusted for any partial disposals, loan stock repayments or new investments in the year. 2 - Admitted to AIM during the year. Ahead of the Admission to AIM of Virgin Wines on 2 March 2021, the Company's equity investment in Virgin Wines Holding Company Ltd ("VWHCL") had been exchanged for an equity investment in Rapunzel Newco Ltd ("RNL"), a company owned by the four Mobeus VCTs pro rata to each VCT's share of its investment in Virgin Wines. Immediately prior to Admission, RNL exchanged its equity investment in VWHCL for an equity investment in Virgin Wines UK plc ("VWUK"). The Company is beneficially interested in VWUK, through its holding in RNL. RNL is the legal owner of the shares in VWUK, but each VCT is the beneficial holder. As part of Virgin Wines' admission to AIM, the Company received repayment of its loan stock generating proceeds of £2.38 million. 3 - Admitted to AIM during the year. On 7 January 2021, a £0.33 million follow-on investment was made into Parsley Box Limited. The enlarged shareholding was admitted to AIM on 31 March 2021. Ahead of the admission to AIM, the Company's equity investment in Parsley Box Limited had been exchanged for an equity investment in Parsley Box Group plc. Upon admission to AIM, the Company invested a further £0.01 million and realised proceeds of £1.59 million. 4 - At 31 December 2021, the Company held more than 80% of its total investments in qualifying holdings, and therefore complied with the VCT qualifying investment test. For the purposes of the VCT qualifying investment test, the Company is permitted to disregard disposals of investments for twelve months from the date of disposal.  It also has up to three years to bring in new funds raised, before these need to be included in the qualifying investment test. 5 - Disclosed as Current asset investments and Cash at bank within Current assets in the Balance sheet below. PRINCIPAL RISKS The Directors acknowledge the Board's responsibilities for the Company's internal control systems and have instigated systems and procedures for identifying, evaluating and managing the significant and emerging risks faced by the Company. The Board's risk appetite is cognitive of the risks and rewards of investing in small unquoted companies. A key risk management review and robust assessment of the risks takes place at each quarterly Board meeting and the Board discusses emerging risks as and when they arise, such as the COVID-19 pandemic, and puts in place mitigating actions to manage the risk. The principal and emerging risks identified by the Board, a description of the possible consequences of each risk and how the Board manages each risk are set out below: Risk Possible consequence How the Board manages risk Economic Events such as the war in Ukraine, COVID-19 pandemic, Brexit, an economic recession, supply shortages or a movement in sterling or in interest rates, could affect trading conditions for smaller companies and consequently the value of the Company's qualifying investments. Movements in UK Stock Market indices may affect the valuation of the Company's investments, as well as affecting the Company's own share price and its discount to net asset value. · The Board monitors (1)  the portfolio as a whole to ensure that the Company invests as far as possible in a diversified portfolio of companies; (2)  developments in the macro-economic environment such as movements in interest rates and availability of labour under new immigration plans; and (3)  the Company's cash position ensuring it can be flexible in light of economic impacts. Loss of approval as a Venture Capital Trust A breach of the VCT Rules, which change on a frequent basis, may lead to the Company losing its approval as a VCT, which would inter alia result in: (1)  qualifying Shareholders who have not held their shares for the designated period having to repay the income tax relief they obtained; (2)  future dividends paid by the Company being subject to tax; and (3)  the Company losing its exemption from corporation tax on capital gains. · The Company's VCT qualifying status is regularly reviewed by the Board and the Investment Adviser. · The Board receives regular reports from its VCT Status Adviser who has been retained by the Board to monitor the Company's ongoing compliance with the VCT Rules. Investment and strategic Investment in unquoted small companies involves a higher degree of risk than investment in fully listed companies. Smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. · The Board regularly reviews the Company's Objective and Investment Policy. · Investments are made across a number of diverse sectors to mitigate risk. Investee companies are carefully selected by the Investment Adviser for recommendation to the Board. The investment portfolio is reviewed by the Board on a regular basis. · A member of the Investment Adviser normally sits on the investee company board. Support has been provided to the portfolio companies throughout the COVID-19 pandemic and is ongoing. Regulatory The Company is required to meet its legal and regulatory obligations as a VCT, a listed company and its own AIFM. Failure to comply might result in suspension of the Company's Stock Exchange listing, financial penalties, a qualified audit report or loss of its VCT status. · Regulatory and legislative developments are kept under review by the Company's solicitors, its VCT Status Adviser and the Board. Financial and operating Failure of the systems (including breaches of cyber security) at any of the third-party service providers that the Company has contracted with could lead to inaccurate reporting or monitoring. Inadequate controls could lead to the misappropriation or insecurity of assets. Outsourcing and the increase in remote working could give rise to cyber and data security risk and internal control risk. · The Board carries out a bi-annual review of the internal controls in place and reviews the risks facing the Company at Board meetings and receives control reports by exception. · It reviews the performance of the service providers annually and has obtained assurance that such providers have controls in place to reduce the risk of breaches of their cyber security. Valuations and stock market The majority of the Company's assets are minority holdings in unquoted companies, which are inherently difficult to value. Changes in valuations are taken to Profit and Loss account, so any inaccuracy in valuations will affect both the Income Statement and the Balance Sheet. · The Board receives quarterly valuation reports from the Investment Adviser and, where necessary, challenges  its valuation process and metrics. · The Investment Adviser alerts the Board about any adverse movements. Asset liquidity The Company's unquoted investments cannot be realised in a short timescale. Under-performing unquoted investments may be difficult to realise on any timescale. · The Board receives quarterly valuation reports from the Investment Adviser and, where necessary, challenges its valuation process and metrics. Market liquidity As a result of the limited secondary market in VCT shares, Shareholders may find it difficult to sell their shares at a price which is close to the net asset value. Whilst demand has always been met to date, it may not be possible for the Company to buy back large percentages of the share capital, other than over several years. · The Board has a share buyback policy which seeks to mitigate market liquidity risk. This policy is reviewed at each quarterly Board meeting. Counterparty A counterparty may fail to discharge an obligation or commitment that it has entered into with the Company. · The Board regularly reviews and agrees policies for managing these risks. Further details can be found under 'credit risk' in Note 15 to the Financial Statements. Key staff A partner or key member of staff at the Investment Adviser may leave the organisation or the Investment Adviser may fail to maintain adequate levels of experience and expertise in its team. This may have an adverse effect on the standard of service that the Company receives from the Investment Adviser and therefore the performance of the Company. · The Board maintains regular dialogue with the Investment Adviser to ensure that the team is adequately resourced. Environmental, Social and Governance Emerging Risk Non-compliance with current and future reporting requirements could lead to a fall in demand from investors. That may affect the level of capital the Company has available to meet its investment objectives. · ESG and climate change is taken into account when considering new investment proposals. The Investment Adviser monitors the potential impact on investee companies of any proposed new legislation regarding environmental, social and governance matters and advises and adapts accordingly. · The Board recognises that climate change is an important emerging risk which the Company is taking into account in their strategic planning although the Company itself has little direct impact on environmental issues. Measures have been introduced to reduce the cost and environmental impact of providing paper copies of Shareholder correspondence and to decrease the amount of travel undertaken. STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Financial Statements for each financial year and the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these Financial Statements, the Directors are required to: ●   select suitable accounting policies and then apply them consistently; ●   make judgements and accounting estimates that are reasonable and prudent; ●   state whether the Financial Statements have been prepared in accordance with United Kingdom accounting standards, subject to any material departures disclosed and explained in the Financial Statements; ●   prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and ●   prepare a Strategic Report, a Director's Report and Directors' Remuneration Report which comply with the requirements of the Companies Act 2006. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Website publication The Financial Statements are published on the Company's website at  www.migvct.co.uk, which is maintained by the Investment Adviser. The maintenance and integrity of the website maintained by the Investment Adviser is, so far as it relates to the Company, the responsibility of the Investment Adviser. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the accounts since they were initially presented to the website.  The accounts are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions. Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority The Directors confirm to the best of their knowledge that: a)  The Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice give a true and fair view of the assets, liabilities, financial position and the profit of the Company. b)  the Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. Having taken advice from the Audit Committee, the Board considers the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and that it provides the information necessary for Shareholders to assess the Company's position, performance, business model and strategy. Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law. For and on behalf of the Board Clive Boothman Chairman 31 March 2022 FINANCIAL STATEMENTS Income Statement Year ended 31 December 2021 Year ended 31 December 2020 Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Net investment portfolio gains 8   -    36,360,661   36,360,661   -    14,811,634   14,811,634 Income 3   1,710,712   -    1,710,712   4,754,700   -    4,754,700 Investment Adviser's fees 4a (525,873) (1,577,618) (2,103,491) (423,839) (1,271,516) (1,695,355) Other expenses 4c (455,452)   -  (455,452) (424,396)   -  (424,396) Profit on ordinary activities before taxation   729,387   34,783,043   35,512,430   3,906,465   13,540,118   17,446,583 Taxation on profit on ordinary activities 5 (53,768)   53,768   -  (432,618)   241,588 (191,030) Profit for the year and total comprehensive income   675,619   34,836,811   35,512,430   3,473,847   13,781,706   17,255,553 Basic and diluted earnings per ordinary share 7 0.54p 27.67p 28.21p 2.76p 10.97p 13.73p The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net investment portfolio gains (unrealised gains and realised gains on investments) and the proportion of the Investment Adviser's fee and performance fee charged to capital. The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") (updated in April 2021) by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement.  The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007. All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year. The notes below form part of these Financial Statements. Balance Sheet as at 31 December 2021   Company No. 5153931 31 December 2021 31 December 2020 Notes £ £ Fixed assets Investments at fair value 8   79,807,671   51,144,184 Current assets Debtors and prepayments   433,761   517,277 Current asset investments 9    24,362,614   30,371,198 Cash at bank and in hand 9   8,604,505   3,120,539   33,400,880   34,009,014 Creditors: amounts falling due within one year (248,076) (464,682) Net current assets   33,152,804   33,544,332 Net assets   112,960,475   84,688,516 Capital and reserves Called up share capital 10    1,250,775   1,263,366 Capital redemption reserve   38,127   25,536 Share premium reserve   14,397,509   14,397,509 Revaluation reserve   39,729,600   12,498,006 Special distributable reserve   18,967,400   27,415,880 Realised capital reserve   36,056,813   26,927,746 Revenue reserve   2,520,251   2,160,473 Equity shareholders' funds   112,960,475   84,688,516 Basic and diluted net asset value per ordinary share 11  90.31p 67.03p The notes below form part of these Financial Statements. The Financial Statements were approved and authorised for issue by the Board of Directors on 31 March 2022 and were signed on its behalf by Clive Boothman, Chairman. Statement of Changes in Equity for the year ended 31 December 2021 Non-distributable reserves Distributable reserves Called up Capital Share Revaluation Special Realised Revenue Total share redemption premium reserve distributable capital reserve Notes capital reserve reserve reserve reserve (Note a) (Note b) (Note b) £ £ £ £ £ £ £ £ At 1 January 2021 1,263,366 25,536 14,397,509 12,498,006 27,415,880 26,927,746 2,160,473 84,688,516 Comprehensive income for the year Profit for the year - - - 30,913,086 - 3,923,725 675,619 35,512,430 Total comprehensive income for the year - - - 30,913,086 - 3,923,725 675,619 35,512,430 Contributions by and distributions to owners Shares bought back (Note c) 10 (12,591) 12,591 - - (923,642) - - (923,642) Dividends paid 6 - - - - (6,000,988) - (315,841) (6,316,829) Total contributions by and distributions to owners (12,591) 12,591 - - (6,924,630) - (315,841) (7,240,471) Other movements Realised losses transferred to special reserve (Note a) - - - - (1,523,850) 1,523,850 - - Realisation of previously unrealised appreciation - - - (3,681,492) - 3,681,492 - - Total other movements - - - (3,681,492) (1,523,850) 5,205,342 - - At 31 December 2021 1,250,775 38,127 14,397,509 39,729,600 18,967,400 36,056,813 2,520,251 112,960,475 Note a: The purpose of this reserve is to fund market purchases of the Company's own shares, to write off existing and future losses and for any other corporate purpose. The transfer of £1,523,850 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the year.  As at 31 December 2021, the Company has a special reserve of £18,967,400, £11,154,495 of which arises from shares issued more than three years ago. Reserves originating from share issues are not distributable under VCT rules if they arise from share issues that are within three years of the end of an accounting period in which shares were issued. Note b: The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company shown on the Balance Sheet. Note c: During the year, the Company purchased 1,259,139 of its own shares at the prevailing market price for a total cost of £923,642, which were subsequently cancelled. This differs to the figure shown in the Cash Flow Statement by £44,113 which was a creditor at the previous year-end. Statement of Changes in Equity for the year ended 31 December 2020 Non-distributable reserves Distributable reserves Called up Capital Share Revaluation Special Realised Revenue Total share redemption premium reserve distributable capital reserve For the year ended 31 December 2020 capital reserve reserve reserve reserve £ £ £ £ £ £ £ £ At 1 January 2020 1,045,265 11,304 - 8,719,606 45,731,919 14,528,747 1,851,534 71,888,375 Comprehensive income for the year Profit for the year - - - 10,471,413 - 3,310,293 3,473,847 17,255,553 Total comprehensive income for the year - - - 10,471,413 - 3,310,293 3,473,847 17,255,553 Contributions by and distributions to owners Shares issued under Offer for Subscription 232,333 - 14,767,667 - - - - 15,000,000 Issue costs and facilitation fees on Offer for Subscription - - (370,158) - (152,153) - - (522,311) Shares bought back (14,232) 14,232 - - (756,637) - - (756,637) Dividends paid - - - - (15,011,556) - (3,164,908) (18,176,464) Total contributions by and distributions to owners 218,101 14,232 14,397,509 - (15,920,346) - (3,164,908) (4,455,412) Other movements Realised losses transferred to special reserve - - - - (2,395,693) 2,395,693 - - Realisation of previously unrealised appreciation - - - (6,693,013) - 6,693,013 - - Total other movements - - - (6,693,013) (2,395,693) 9,088,706 - - At 31 December 2020 1,263,366 25,536 14,397,509 12,498,006 27,415,880 26,927,746 2,160,473 84,688,516 The composition of each of these reserves is explained below: Called up share capital - The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for Subscription or reduced due to shares bought back by the Company. Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company's capital is maintained. Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription. Revaluation reserve - Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent. In accordance with stating all investments at fair value through profit and loss (as recorded in Note 8), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year. Special distributable reserve - This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time. The cost of share buybacks and any realised losses on the sale or impairment of investments (excluding transaction costs) are charged to this reserve. 75% of the Investment Adviser fee expense, and the related tax effect, that are charged to the realised capital reserve are transferred to this reserve. This reserve will also be charged any IFA facilitation payments to financial advisers, which arose as part of the Offer for Subscription. Realised capital reserve - The following are accounted for in this reserve: - Gains and losses on realisation of investments; - Permanent diminution in value of investments; - Transaction costs incurred in the acquisition and disposal of investments; - 75% of the Investment Adviser fee expense and 100% of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies; and - Capital dividends paid. Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve, as well as 25% of the Investment Adviser fee together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.

Statement of Cash Flows  for the year ended 31 December 2021 Year ended Year ended 31 December 2021 31 December 2020 Notes £ £ Cash flows from operating activities Profit after tax for the financial year 35,512,430 17,255,553 Adjustments for: Net investment portfolio gains (36,360,661) (14,811,634) Tax charge for current year 5 - 191,030 Decrease/(increase) in debtors 83,516 (291,749) Increase in creditors 18,678 75,198 Net cash (outflow)/inflow from operations (746,037) 2,418,398 Corporation tax paid (191,171) (61,716) Net cash (outflow)/inflow from operating activities (937,208) 2,356,682 Cash flows from investing activities Acquisitions of investments 8 (7,541,213) (5,433,357) Disposals of investments 8 15,238,387 20,803,968 Decrease in bank deposits with a maturity over three months 256 384 Net cash inflow from investing activities 7,697,430 15,370,995 Cash flows from financing activities Shares issued as part of Offer for subscription - 15,000,000 Issue costs and facilitation fees as part of Offer for subscription - (522,311) Equity dividends paid 6 (6,316,829) (18,176,464) Share capital bought back 10 (967,755) (712,523) Net cash outflow from financing activities (7,284,584) (4,411,298) Net (decrease)/increase in cash and cash equivalents (524,362) 13,316,379 Cash and cash equivalents at start of year 32,486,439 19,170,060 Cash and cash equivalents at end of year 31,962,077 32,486,439 Cash and cash equivalents comprise: Cash equivalents 9 23,357,572 29,365,900 Cash at bank and in hand 9 8,604,505 3,120,539 The notes below form part of these Financial Statements.

Notes to the Financial Statements for the year ended 31 December 2021 1 Company information Mobeus Income and Growth VCT plc is a public limited company incorporated in England, registration number 5153931. The registered office is 5 New Street Square, London, EC4A 3TW. 2 Basis of preparation A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out at the start of the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included at the top of each relevant note. These Financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS102"), with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in April 2021) issued by the Association of Investment Companies. The Company has a number of financial instruments which are disclosed under FRS102 s11/12 as shown in Note 15 of the Annual Report. After performing the necessary enquiries, the Directors have undertaken an assessment of the Company's ability to meet its liabilities as they fall due. The Company has significant cash and liquid resources and no external debt or capital commitments. The Company's cash flow forecasts, which consider levels of anticipated new and follow on investment, the net funds raised as part of the Company's 2021/22 Offer for Subscription, as well as investment income and annual running cost projections, are discussed at each quarterly Board meeting and, in particular, have been considered in light of the ongoing impact of the COVID-19 pandemic. The Directors have also received assurances that the Company's key suppliers' abilities to continue to service the Company have not been materially impacted by the COVID-19 pandemic. Following this assessment, the Directors have a reasonable expectation that the Company will have adequate resources to continue to meet its liabilities for at least 12 months from the date of these Financial Statements. The Directors therefore consider the preparation of these Financial Statements on a going concern basis to be appropriate. 3 Income Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain. 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 is 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. Accordingly, the redemption premium recognised in the year ended 31 December 2021 has been classified as capital and has been included within gains on investments. 2021 2020 £ £ Income from bank deposits   4,755   14,334 Income from investments -  from equities   446,397  1,628,784 -  from OEIC funds   2,664   70,175 -  from loan stock  1,256,891  2,967,870 -  from interest on preference share dividend arrears   -    64,840  1,705,952  4,731,669 Other income   5   8,697 Total income  1,710,712  4,754,700 Total income comprises Dividends   449,061  1,698,959 Interest  1,261,646  3,047,044 Other income   5   8,697  1,710,712  4,754,700 Total loan stock interest due but not recognised in the year was £639,625 (2020: £979,270). The decrease is due to the removal of a number of company provisions that were considered appropriate in the previous year due in light of the COVID-19 pandemic. 4 Investment Adviser's fees and performance fees All expenses are accounted for on an accruals basis. 25% of the Investment Adviser's fee is charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board's expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year is charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth. a)  Investment Adviser's fees and performance fees Revenue Capital Total Revenue Capital Total 2021 2021 2021 2020 2020 2020 £ £ £ £ £ £ Gresham House Asset Management Limited ¹ Investment Adviser's fees 525,873 1,577,618 2,103,491 423,839 1,271,516 1,695,355 ¹ On 30 September 2021, Mobeus sold its VCT fund and Investment management business to Gresham House. As a result, the Company's Investment advisory arrangements have been novated from Mobeus to Gresham House. The entire core management, investment and operational teams involved with the Company all transferred to Gresham House in connection with this transaction. Under the terms of a revised investment management agreement dated 20 May 2010, Mobeus (from 1 October 2021, Gresham House) provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum of closing net assets, paid in advance, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fixed fee of £134,168 per annum, the latter inclusive of VAT and subject to annual increases in RPI. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise agreed with the Board. The Investment Adviser's fee includes provision for a cap on expenses excluding irrecoverable VAT and exceptional items set at 3.6% of closing net assets at the year-end. In accordance with the Investment Management Agreement, any excess expenses are borne by the Investment Adviser. The excess expenses during the year amounted to £nil (2020: £nil). In line with common practice, Gresham House retains the right to charge arrangement and syndication fees and directors' or monitoring fees to companies in which the Company invests. The Investment Adviser received fees totalling £430,390 during the year ended 31 December 2021 (2020: £415,064), being £161,076 (2020: £144,530) for arrangement fees and £269,314 (2020: £270,534) for acting as non-executive directors on a number of investee company boards. These fees attributable to the Company are proportionate to the investment allocation applicable to the Company which applied at the time of each investment. These figures are not part of these financial statements. Incentive agreement Under the Incentive Agreement dated 9 July 2004, and a variation of this agreement dated 20 May 2010, the Investment Adviser is entitled to receive an annual performance-related incentive fee of 20% of the dividends paid in a year in excess of a "Target Rate" comprising firstly, an annual dividend paid in a year target which started at 6.00 pence per share on launch (indexed each year for RPI) and secondly a requirement that any shortfall of cumulative dividends paid in each year beneath the cumulative annual dividend target is carried forward and added to the Target Rate for the next accounting period. Any excess of cumulative dividends paid above the cumulative annual dividend target is not carried forward, whether an incentive fee is payable for that year or not. Payment of a fee is also conditional upon the daily weighted average Net Asset Value ("NAV") per share throughout such year equalling or exceeding the daily weighted average Base NAV per share throughout the same year. At 31 December 2021, the annual dividend target is 8.72 pence per share and as cumulative dividends paid were 5.00 pence, this target was not met. Also, the average NAV per share was 78.06 pence for the year, which was less than the average base NAV per share for the year of 87.81 pence. Accordingly, no performance incentive fee is payable for the year. b)  Offer for Subscription fees 2021 2020 £m £m Gross funds raised by the Company   -    15.00 Offer costs payable to Mobeus at 3.00% of gross funds raised by the Company   -    0.45 Under the terms of an Offer for Subscription, with the other Mobeus advised VCTs, launched on 25 October 2019, Mobeus was entitled to fees of 3.00% of the investment amount received from investors. This amount (for 2020 only) totalled £1.74 million across all four VCTs, out of which all the costs associated with the allotment were met. c)  Other expenses Other expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are written off to the capital column of the Income Statement or deducted from the disposal proceeds as appropriate. 2021 2020 £ £ Directors' remuneration (including NIC of £6,830 (2020: £6,852)) - Note a) 111,830 111,852 IFA trail commission 111,674 98,888 Broker's fees 14,400 3,600 Auditor's fees  - Audit of Company (excluding VAT) 31,069 30,084   - audit related assurance services - Note b) (excluding VAT) 7,073 6,868 Registrar's fees 32,692 44,356 Printing 60,224 61,709 Legal & professional fees 16,794 6,654 VCT monitoring fees 9,000 9,000 Directors' insurance 8,975 6,225 Listing and regulatory fees 32,260 32,628 Sundry 19,461 9,200 Running costs 455,452 421,064 Provision against loan interest receivable (Note c) - 3,332 Other expenses 455,452 424,396 Notes: a)  Directors' remuneration is a related party transaction, see analysis of Directors' fees payable and their interests in the shares of the company in the Directors' Remuneration Report within the Annual Report, which excludes the NIC above. The key management personnel are the three non-executive Directors. The Company has no employees. There were no amounts outstanding and due to the Directors at 31 December 2021 (2020: £nil). b)  The audit-related assurance services are in relation to a limited scope engagement in respect of the Financial Statements within the Company's Interim Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence is maintained. c)  Provision against loan interest receivable above relates to an amount of £nil (2020: £3,332), being a provision made against loan stock interest regarded as collectable in previous years. 5 Taxation on profit on ordinary activities The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date. Any tax relief obtained in respect of adviser fees allocated to capital is reflected in the realised capital reserve and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is reduced as a result of these capital expenses. Deferred tax 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 a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the Financial Statements that arise from the inclusion of gains and losses in the tax assessments in periods different from those in which they are recognised in the Financial Statements. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis. A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilised. Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised. The Company is an Investment Trust and Investment Trust companies are exempt from tax on capital gains if they meet the HMRC criteria set out in section 274 of the ITA. 2021 2021 2021 2020 2020 2020 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ a)  Analysis of tax charge: UK Corporation tax on profits/(losses) for the year 53,768 (53,768) - 432,618 (241,588) 191,030 Total current tax charge/(credit) 53,768 (53,768) - 432,618 (241,588) 191,030 Corporation tax is based on a rate of 19.00% (2020: 19.00%) b) Profit on ordinary activities before tax 729,387 34,783,043 35,512,430 3,906,465 13,540,118 17,446,583 Profit on ordinary activities multiplied by main company rate of corporation tax in the UK of 19.00% (2020: 19.00%) 138,584 6,608,778 6,747,362 742,228 2,572,622 3,314,850 Effect of: UK dividends (84,816) - (84,816) (309,469) - (309,469) Net investment portfolio gains not taxable - (6,908,526) (6,908,526) - (2,814,210) (2,814,210) Losses not utilised - 245,980 245,980 - - - Overprovision in prior period - - - (141) - (141) Actual current tax charge 53,768 (53,768) - 432,618 (241,588) 191,030 Deferred taxation No provision for deferred taxation has been made on potential capital gains due to the Company's current status as a VCT under section 274 of the ITA and the Directors' intention to maintain that status. 6 Dividends paid and payable Dividends payable are recognised as distributions in the Financial Statements when the Company's liability to pay them has been established. This liability is established for interim dividends when they are paid, and for final dividends when they are approved by the shareholders, usually at the Company's Annual General Meeting. A key judgement in applying the above accounting policy is in determining the amount of minimum dividend to be paid in respect of a year. The Company's status as a VCT means it has to comply with Section 259 of the ITA, which requires that no more than 15% of the income from shares and securities in a year can be retained from the revenue available for distribution for the year. Amounts recognised as distributions to equity shareholders in the year: Dividend Type For year ended 31 December Pence per share Date Paid 2021 2020 Interim Capital 2019 4.00p* 08 January 2020   -   4,183,502 Interim Capital 2020 6.00p* 07 May 2020   -   7,665,588 Interim Income 2020 2.50p 17 December 2020   -   3,164,908 Interim Capital 2020 2.50p* 17 December 2020   -   3,164,908 Interim Income 2021 0.25p 12 July 2021   315,841   - Interim Capital 2021 4.75p* 12 July 2021 6,000,988   - Dividends refunded in the year - (2,442) 6,316,829 18,176,464 Distributions to equity holders at the year end: Pence per share Date Payable Interim Income 2021 0.25p 07 January 2022   313,845   -  Interim Capital 2021 3.75p* 07 January 2022 4,707,677   -    5,021,522   -  * These dividends were paid out of or refunded to the Company's special distributable reserve. Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of Section 259 of the ITA concerning the Company not retaining more than 15% of its income from shares and securities, is considered. Recognised income distributions in the financial statements for the year Dividend Type For year ended 31 December Pence per share Date paid/payable 2021  £ 2020  £ Revenue available for distribution by way of dividends for the year 675,619 3,473,847 Interim Income 2020 2.50p 17 December 2020   -   3,164,908 Interim Income 2021 0.25p 12 July 2021   315,841   - Interim Income 2021 0.25p 7 January 2022   313,845   - Total income dividends for the year   629,686 3,164,908 7 Basic and diluted earnings per share 2021 2020 £ £ Total earnings after taxation:   35,512,430   17,255,553 Basic and diluted earnings per share (Note a) 28.21p 13.73p Revenue earnings from ordinary activities after taxation   675,619   3,473,847 Basic and diluted revenue earnings per share (Note b) 0.54p 2.76p Net investment portfolio gains   36,360,661   14,811,634 Capital Investment Adviser fees less taxation (1,523,850) (1,029,928) Total capital earnings   34,836,811   13,781,706 Basic and diluted capital earnings per share (Note c) 27.67p 10.97p Weighted average number of shares in issue in the year  125,868,010  125,685,147 Notes: a)  Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue. b)  Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue. c)  Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue. d)  There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted earnings per share. 8 Investments at fair value The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at "fair value through profit and loss" (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 2018. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market. Where the terms of the disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value, discounted for the true value of money, may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received. Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:- i)  Each investment is considered as a whole on a 'unit of account' basis, i.e. that the value of each portfolio company is considered as a whole consideration of:- The price of new or follow on investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. The inputs that derived the investment price are calibrated within individual valuation models and at subsequent measurement dates, are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company. The valuation bases used are the following: · a multiple basis. The enterprise value of the investment may be determined by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, scale and liquidity). or:- · where a company's underperformance against plan indicates a diminution in the value of the investment, provision against the price of a new investment is made, as appropriate. ii)  Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments, are accrued at fair value when the Company receives the right to the premium and when considered recoverable. iii)  Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation, realisation proceeds or a weighted average of these bases may be applied. Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement. All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement. All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement. A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value. Accounting standards classify methods of fair value measurement as Levels 1, 2 and 3. This hierarchy is based upon the reliability of information used to determine the valuation. All of the unquoted investments are Level 3, i.e. fair value is measured using techniques using inputs that are not based on observable market data. Movements in investments during the year are summarised as follows: Traded on AIM Unquoted ordinary shares Unquoted preference shares Unquoted Loan stock Total £ £ £ £ Cost at 31 December 2020 - 23,685,698 1,185,039 16,354,239 41,224,976 Net unrealised gains/(losses) at 31 December 2020 - 16,717,309 83,145 (4,302,448) 12,498,006 Permanent impairment in value of investments as at 31 December 2020 - (2,578,496) (302) - (2,578,798) Valuation at 31 December 2020 - 37,824,511 1,267,882 12,051,791 51,144,184 Purchases at cost - 4,961,532 749,800 1,829,881 7,541,213 Sale proceeds (Note a) (1,520,105) (8,908,269) (231,381) (4,578,632) (15,238,387) Reclassification at value (Note b) 8,419,354 (7,798,669) - (620,685) - Net realised gains on investments (Note a) 620,987 4,381,296 231,232 214,060 5,447,575 Net unrealised gains on investments (Note c) 4,998,195 24,371,785 95,130 1,447,976 30,913,086 Valuation at 31 December 2021 12,518,431 54,832,186 2,112,663 10,344,391 79,807,671 Cost at 31 December 2021 864,604 26,085,667 1,934,690 13,421,908 42,306,869 Net unrealised gains/(losses) at 31 December 2021 11,653,827 30,975,015 178,275 (3,077,517) 39,729,600 Permanent impairment in cost of investments as at 31 December 2021 (Note d) - (2,228,496) (302) - (2,228,798) Valuation at 31 December 2021 12,518,431 54,832,186 2,112,663 10,344,391 79,807,671 Net realised gains on investments of £5,447,575 together with net unrealised gains on investments of £30,913,086 equal net investment portfolio gains of £36,360,661 as shown on the Income Statement. Note a) Disposals of investment portfolio companies during the year were: Type Investment cost Disposal proceeds Valuation at  31 December 2020 Realised gain/(loss) in year £ £ £ £ Vian Marketing Limited (trading as Red Paddle Co) Realisation   1,043,394   5,219,982   1,937,741   3,282,241 Parsley Box Group plc (formerly Parsley Box Limited) Partial realisation   396,178   1,593,010   899,118   693,892 MPB Group Limited Partial realisation   494,815   2,048,093   1,520,520   527,573 My Tutorweb Limited (trading as MyTutor) Partial realisation   302,880   821,135   370,781   450,354 Media Business Insight Limited Loan repayment   564,136   564,136   350,069   214,067 CB Imports Group Limited Liquidation   350,000   -    -    -  Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited) Loan repayment   2,381,344   2,381,344   2,381,344   -  Proactive Group Holdings Inc Realisation   926,573   2,323,658   2,331,239   (7,581) Other capital proceeds* Various   -    287,029   -    287,029   6,459,320   15,238,387   9,790,812   5,447,575 * Other capital proceeds contains £359,934 of deferred consideration from companies realised in previous years, against a stamp duty payment of £72,905 upon the listing of Virgin Wines shares to AIM. Note b) The Company's equity investments in Virgin Wines and Parsley Box were admitted to AIM during the year. The amount transferred from Level 3 to Level 1 of £8,419,354 reflects the combined equity value held at the start of the year and a follow-on investment made in the year. The amount of £620,685 transferred from unquoted loan stock to unquoted equity shares represents the conversion of the loans held in two portfolio companies into equity shares during the year. Note c) The major components of the net increase in unrealised valuations of £30,913,086 in the year were increases of £8,206,460 in Preservica Limited, £6,390,476 in Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited), £3,621,375 in MPB Group Limited, £3,419,609 in Media Business Insight Holdings Limited, £3,337,642 in EOTH Limited (trading as Equip Outdoor Technologies), £2,528,781 in My Tutorweb Limited (trading as MyTutor) and £2,348,072 in Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van). These increases were partly offset by falls of £1,392,281 in Parsley Box Group plc (formerly Parsley Box Limited), £233,731 in Muller EV Limited (trading as Andersen EV), £196,401 in Bleach London Holdings Limited and £90,154 in Kudos Innovations Limited. Note d) During the year, permanent impairments of the cost of investments have decreased from £2,578,798 to £2,228,798 due to the disposal of one investee company which had been permanently impaired previously. 9 Current asset investments and Cash at bank Cash equivalents, for the purposes of the Statement of Cash flows, comprises bank deposits repayable on up to three months' notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank deposits that mature after three months. Current asset investments are disposable without curtailing or disrupting the business and are readily convertible into known amounts of cash at their carrying values at immediate or up to three months' notice. Cash, for the purposes of the Statement of Cash Flows, is cash held with banks in accounts subject to immediate access. Cash at bank in the Balance Sheet is the same. 2021 2020 £ £ OEIC Money market funds 23,357,572 29,365,900 Cash equivalents per Statement of Cash Flows 23,357,572 29,365,900 Bank deposits that mature after three months but are not immediately repayable 1,005,042 1,005,298 Current asset investments 24,362,614 30,371,198 Cash at bank 8,604,505 3,120,539 10 Called up share capital 2021 2020 £ £ Allotted, called-up and fully paid: Ordinary Shares of 1p each: 125,077,481 (2020: 126,366,620) 1,250,775 1,263,366 During the year the Company purchased 1,259,139 (2020: 1,423,180) of its own shares for cash (representing 1.0% (2020: 1.4%) of the shares in issue at the start of the year) at the prevailing market price for a total cost of £923,642 (2020: £756,637). These shares were subsequently cancelled by the Company. This differs to the figure shown in the Statement of Cash Flows of £967,755 by £44,113 which was included in creditors at the previous year-end. 11 Basic and diluted net asset value per share Net asset value per ordinary share is based on net assets at the end of the year and on 125,077,481 (2020: 126,336,620) ordinary shares, being the number of ordinary shares in issue on that date. There are no instruments that will increase the number of shares in issue in future. Accordingly, the figures currently represent both basic and diluted net asset value per share. 12 Post balance sheet events On 7 January 2022, the Company paid a 4.00 pence per share dividend to shareholders in respect of the year ended 31 December 2021. On 24 January 2022 and 22 February 2022, the Company made a follow-on investment totalling £0.27 million into Caledonian Leisure Limited. On 31 January 2022, the Company received a loan repayment of £0.12 million from Media Business Insight Limited. On 10 February 2022, the Company invested £0.73 million into Proximity Insight Limited. On 16 February 2022, deferred proceeds of £0.53 million were received in respect of the divestment of Vian Marketing Limited (trading as Red Paddle Co), an investment realised in the previous year. Prior to the allotment of shares under the 2022 Offer for Subscription launched on 20 January 2022, the NAV was updated as at 28 February 2022 as the basis for allocation. This produced an NAV per share of 79.17 pence compared to a NAV per share at 31 December 2021 of 86.31 pence (adjusted for the 4 pence dividend paid on 7 January 2022). Subsequently, on 9 March 2022, 12,233,462 Ordinary Shares were allotted at an average effective offer price of 81.74 pence per share, raising net funds of £9.69 million. 13 Statutory information The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 December 2021 but is derived from those accounts.  Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting.  The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006. 14 Annual Report & Financial Statements The Annual Report will be published on the Company's website at www.migvct.co.uk shortly and, following the adoption of electronic communications by the Company, shareholders will shortly receive notification from the Company on how to download a pdf of the Report from the website.  Shareholders and members of the public who wish to receive a hard copy of the Annual Report, may request a copy by writing to the Company Secretary, Gresham House Asset Management Limited, 80 Cheapside, London EC2V 6EE or by email: [e-mail]. 15 Annual General Meeting The Company's next Annual General Meeting will be held on Thursday, 26 May 2022 at the offices of the Company's solicitors, Shakespeare Martineau, at 60 Gracechurch Street, London EC3V 0HR. A webcast will also be available at the same time for those Shareholders who cannot attend in person. However, please note that Shareholders will not be able to vote via this method and so are encouraged to return their proxy form before the deadline of 24 May 2022. Contact details for further enquiries Gresham House Asset Management Limited (the Company Secretary) on [phone] or by email to [e-mail]. DISCLAIMER Neither the contents 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.

 

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