Annual Financial Report

RNS Number : 2612W

Income & Growth VCT (The) PLC

20 December 2021

 

THE INCOME & GROWTH VCT PLC LEI:  213800FPC15FNM74YD92 ANNUAL FINANCIAL RESULTS OF THE COMPANY FOR THE YEAR ENDED 30 SEPTEMBER 2021 The Income & Growth VCT plc (the "Company") announces the final results for the year ended 30 September 2021.  These results were approved by the Board of Directors on 20 December 2021. You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.incomeandgrowthvct.co.uk . FINANCIAL HIGHLIGHTS As at 30 September 2021: Net assets: £119.09 million Net asset value ("NAV") per share: 100.45 pence -  Net asset value ("NAV") total return1 per share was 50.5%. -  Share price total return1 per share was 64.7%2. -  Dividends paid/payable in respect of the year total 9.00 pence per share. This brings cumulative dividends paid1 to Shareholders in respect of the past five years to 56.00 pence per share. -  The Company realised investments totalling £14.44 million of cash proceeds and generated net realised gains in the year of £4.16 million. -  Unrealised gains of £39.48 million in the year from strong portfolio performance. -  £8.09 million was invested into six new companies and seven follow-on investments. 1 -  Definitions of key terms and alternative performance measures shown above and throughout this report are provided in the Glossary of terms in the Annual Report. 2 - Further details on the share price total return are shown in the Performance section of the Strategic Report within the Annual Report. PERFORMANCE SUMMARY The table below shows the recent past performance of the Company's existing class of shares for each of the last five years. R eporting date Net Assets NA V per share Share price 1 Cumulative dividends paidper share Cumulativetotalreturn pershareto Shareholders 2 Dividends paid and proposed per share in respect of each year As at 30September (NAV basis) (Share price basis) (£m) (p) (p) (p) (p) (p) (p) 2021 119.09 100.45 93.00 136.50 236.95 229.50 9.003 2020 83. 13 70.06 59.50 131.50 201.56 191.00 14.00 2019 81.73 79.12 75.50 113.00 192.12 188.50 6.00 2018  82.58 78.32 69.50 108.00 186.32 177.50 6.00 2017  64.35 81.24 73.00 102.50 183.74 175.50 21.00 1 Source: Panmure Gordon & Co (mid-market price). 2 Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (share price basis) plus cumulative dividends paid since launch of the current share class. The details of the share price total return per share calculation are shown in the Strategic Report within the Annual Report. 3  Dividends paid and proposed per share in respect of 2021 include the second interim dividend of 4.00 pence referred to below. Dividends payable post year-end in respect of the year ended 30 September 2021 A second interim dividend of 4.00 pence per share has been declared and is scheduled to be paid on 7 January 2022, to Shareholders on the register on 10 December 2021. Detailed performance data for each of the Mobeus VCT's fundraisings is provided in the Performance Data Appendix available within the Annual Report. The tables, which give cumulative total return per share information for each allotment date on both a NAV and share price basis, are also available on the Company's website at www.incomeandgrowthvct.co.uk where they can be downloaded by clicking on "table" under "Reviewing the performance of your investment". CHAIRMAN'S STATEMENT Change in Management Arrangements Following the communication to all Shareholders sent by the Chairmen of each of the Mobeus-advised VCTs on 10 September 2021, I am pleased to report the sale of the Mobeus Equity Partners LLP 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 the Company will benefit from scale advantages, continuity, portfolio diversification and investment in capability 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, will remain responsible for the investment, portfolio, and fund management of the Mobeus VCTs, alongside the investment and operations teams. They will be supported in the transition by Mobeus founder partners Mark Wignall and Rob Brittain who will act as consultants to Gresham House. I present the Company's Annual Report for the year to 30 September 2021. Overview At the time of the previous Annual Report, I was able to report on the Company's resilient performance over what was 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 30 September 2021. The Company achieved an exceptional NAV total return per share of 50.5% for the year (2020: 11.9%). 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 gratifying. The threat of global supply chain issues in logistics, materials and labour is expected to remain for some months, though 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 £8.09 million of investment capital and generated £14.44 million in realisation proceeds from investment activity during the year. In that time, it added six new investments to its portfolio, provided follow-on funding into seven 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 a notable value concentration in AIM-listed stocks (14.1% of net assets as at 30 September 2021). 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 two IPOs in March 2021, there has been a subsequent reduction in the value of these quoted assets in the quarter to 30 September 2021 as the companies were impacted by trading announcements and wider market sentiment. This decline however, has been more than offset by the strong performance and growth within the unquoted investments 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 of these young growth investments are starting to achieve significant scale and value - a view increasingly validated as third-party investment transactions have brought significant up-ratings in values of portfolio businesses, such as MPB, MyTutor and Bella & Duke. Performance The Company's NAV total return per share was 50.5% for the year to 30 September 2021 (2020: 11.9%), and the share price total return was 64.7% (2020: 3.3%). This difference arises principally due to the timing of NAV announcements and is explained more fully under Performance in the Strategic Report within the Annual Report. 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. The combination of these strong unrealised and realised portfolio returns has generated a performance fee of £1.10 million that is payable to our Investment Adviser, the first such fee in over three years. A positive revenue return driven by strong dividend receipts has also contributed to shareholder returns. At the year-end, the Company was ranked 5th out of 39 Generalist VCTs over five years and 9th out of 30 Generalist VCTs over ten years, in the Association of Investment Companies' analysis of NAV Cumulative Total Return. Shareholders should note that these figures do not reflect the fourth quarter NAV per share increase disclosed in this Report. For further details on the performance of the Company, please refer to the Strategic Report within the Annual Report. 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, to be 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 23 July 2021, to Shareholders on the register on 25 June 2021, brings dividends paid and payable in respect of the financial year ended 30 September 2021 to 9.00 pence per share. This brings cumulative dividends paid/payable since inception to 140.5 pence per share. The Company has met or exceeded the annual dividend payment target of at least 6.00 pence per share in respect of each financial year for the last ten years. 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 alone in any given year. 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 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 may cause the Company's NAV per share to reduce by a corresponding amount. Dividend Investment Scheme The Company's Dividend Investment Scheme ("DIS") provides Shareholders with the opportunity to reinvest their cash dividends into new shares in the Company at the latest published NAV per share. New VCT shares attract the same tax reliefs as shares purchased through an Offer for Subscription. As part of the 5.00 pence per share dividend paid on 23 July 2021, 1,178,669 Ordinary shares were allotted to participants of the DIS at a price of 89.71 pence per share. Shareholders wishing to take advantage of the scheme for any future dividends can join the DIS by completing a mandate form available on the Company's website, under the 'Dividends' heading, at: www.incomeandgrowthvct.co.uk, or alternatively, Shareholders can opt-out by contacting Link Group, using their details provided under Corporate Information in the Annual Report. Investment portfolio The portfolio movements across the year were as follows: £m P ortfolio valueat30September2020 50.86 Newandfollow-oninvestments 8.09 Disposalproceeds (14.44 ) Netrealisedgains 4.16 V aluation movements 39.48 Portfolio valueat30September2021 88.15 During the year, the Company invested a total of £8.09 million into six new and seven existing portfolio companies (2020: £8.39 million; five new, four existing). New investments totalling £5.08 million were made into Connect Childcare (a nursery management software provider), Northern Bloc (a vegan ice cream producer), 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 £3.01 million was provided across seven existing portfolio companies, including Parsley Box (an ambient meals provider), Bleach London (hair colourants brand), Arkk Consulting (a reporting requirements service provider), Caledonian Leisure (UK leisure breaks provider), Bella & Duke (a frozen raw dog food provider), Tapas Revolution (a Spanish restaurant chain), MyTutor (an online tutoring marketplace) and Andersen EV (a producer of premium EV chargers). The Company generated £6.15 million in proceeds from the realisation of its investments in Vectair, Bourn Bioscience, Omega Diagnostics and Proactive Group during the year. In addition to £7.02 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, the Company generated total proceeds of £14.44 million in the year to 30 September 2021. Since the year-end, the Company has also made follow-on investments totalling £1.71 million into Preservica, an existing portfolio company and seller of proprietary digital archiving software. The portfolio has performed very strongly over the Company's financial year. The overall value increased by £43.64 million (2020: £9.85 million), or 85.8% (2020: 19.6%) on a like-for-like basis, compared to the start of the year. This increase comprised a net unrealised uplift in portfolio valuations of £39.48 million and £4.16 million in net realised gains over the year. The portfolio was valued at £88.15 million at the year-end (30 September 2020: £50.86 million). Within net realised gains, the principal contributors were the full realised gains of Bourn Bioscience (£1.44 million) as well as gains from the partial realisations of Parsley Box (£0.94 million), MPB Group (£0.82 million) and MyTutor (£0.58 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. 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 quarter to 30 September 2021, both investments saw a subsequent value decline in the face of changing market sentiment and, in the case of Parsley Box, announcement of results which were below market expectations. The Board however, remains confident in the future prospects of both businesses. In contrast, there have been substantial unquoted valuation increases as a result of third-party investment transactions in MyTutor, MPB and Bella & Duke. 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. Since the year-end, the Company's investment in Vian Marketing Limited (trading as Red Paddle) was sold generating proceeds received to date over the life of this investment of £5.97 million, which is a multiple on cost of 4.9x. To date, and in isolation, the impact of this sale is a 0.56 pence uplift in NAV per share compared to the 30 September 2021 NAV per share contained within this Annual Report. Further proceeds of up to £0.49 million may be receivable in due course. 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 within the Annual Report. Revenue account The results for the year are set out in the Income Statement within the Financial Statements and show a revenue return (after tax) of 0.77 pence per share (2020: 2.07 pence per share). The revenue return for the year of £0.91 million has decreased from last year's comparable figure of £2.32 million. This decrease is mainly due to the significant receipt of loan interest income in the previous year upon the sale of the Auction Technology Group. Liquidity and Fundraising Cash and near cash resources held by the Company as at 30 September 2021 amounted to £29.85 million, or 25.1% of net assets. As per the announcement made on 8 November 2021, the Company has stated its intention to raise additional funds through the launch of an Offer for Subscription expected to be in early 2022 with shares to be issued in the 2021/22 tax year. Share buy-backs During the year, the Company bought back and cancelled 1,285,499 of its own shares (2020: 1,858,177), representing 1.1% of the shares in issue at the beginning of the year (2020: 1.8%), at a total cost of £1.05 million, inclusive of expenses (2020: £1.24 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.incomeandgrowthvct.co.uk . The Investment Adviser has scheduled a virtual Shareholder Event for the morning of 25 February 2022. Details of how to access the Event are included either with your notification of, or with your hard copy of this Report. Further information in relation to the Shareholder Event can also be found on the Company's website. 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 Wednesday, 23 February 2022 at the offices of Gresham House, 5th Floor, 80 Cheapside, London EC2V 6EE. 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 so are encouraged to return your proxy form before the deadline of 21 February 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 Helen Sinclair has advised of her wish to retire from the Board immediately following the Annual General Meeting in February 2022. Helen has brought an enormous wealth of experience and breadth to the Company during her time as a director for which the Board is very grateful. The Board will be considering the composition and succession of the Board further in light of this. Fraud Warnings We have been made aware of an increase in the 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 within the Annual Report. 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. The future FCA reporting requirements consistent with the Task Force on Climate-related Financial Disclosures commencing from 1 January 2021 do not currently apply to the Company but will be kept under review, the Board being mindful of any recommended changes. Outlook The year under review can be characterised as a continuation of the testing 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. We anticipate that the direct and 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. In particular, the emergence of new COVID variants may raise the possibility of further lockdown restrictions. However, your Board considers that your Company is well positioned to adapt as necessary. The Board is grateful to Shareholders for their continued interest in an offer for subscription for the Company's shares and is pleased to have announced the Company's intention to raise additional funds in early 2022. 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 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. Maurice Helfgott Chairman 17 December 2021 INVESTMENT POLICY The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Asset Mix and Diversification The Company will seek to make investments in UK unquoted companies in accordance with the requirements of prevailing VCT legislation. 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 gain 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. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment. Save as set out above, the Company's other investments are held in cash and liquid funds. 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") has 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 is well underway having formed one of the largest and most experienced teams in the VCT sector. 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, and with the economic uncertainty now dissipating to some extent, the portfolio continues on a positive trajectory. Whilst markets helped deliver a buoyant recovery in 2020, the main driver of value growth in 2021 has been a continuation of strong underlying trading performance across the portfolio. This has been bolstered by a small number of significant re-ratings or sizeable fundraisings during the period. A few 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 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 44% 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, MyTutor and Bella & Duke most significantly. Whilst the portfolio has limited exposure to more challenging sectors such as hospitality and 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 suggests a potentially more positive outlook. It is noted that 19.1% of the invested portfolio value is now concentrated in the portfolio's AIM-listed investments (which equates to 14.1% of net assets). The AIM market has witnessed some volatility in the final quarter of the Company's financial year, with market sentiment reducing the initial value uplifts upon the IPOs of Virgin Wines and Parsley Box in March. Parsley Box was further impacted by its announcements of tougher trading conditions and supply constraints. Nevertheless, the Company's investments remain in a strong position and the Investment Adviser remains confident in their medium-term prospects. In line with market practice, in both cases the Company's shareholdings are subject to lock-up 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 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 £8.09 million (2020: £8.39 million), comprising £5.08 million (2020: £4.46 million) into six new investments and £3.01 million (2020: £3.93 million) into seven 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. The portfolio's valuation changes in the year are summarised as follows: InvestmentPortfolio CapitalMovement 2021 £m 2020 £m Increaseinthevalueof 40.81 10.16 unrealisedinvestments Decreaseinthe (1.33) (6.73) valueofunrealised investments Netincreaseinthe valueofunrealised investments 39.48 3.43 Realised gains 4.26 6.53 Realised losses (0 .10) (0 .11) Netrealisedgainsintheyear 4.16 6.42 Net investment portfolio capital movement in the year 43.64 9.85 The portfolio movements in the year are summarised as follows: 2021 £m 2020 £m Openingportfoliovalue 50 .86 50 .22 Newandfollow-on 8.09 8.39 investments Disposalproceeds (14.44 ) (17. 60) Netrealisedgains 4.16 6.42 Unrealised valuation movements 39.48 3.43 Portfolio value at 30 September 88.15 50.86 New investments during the year The Company made six new investments totalling £5.08 million during the year, as detailed below: Company Business Date of Investment Amount of new investment (£m) Connect Childcare Nursery management software provider December 2020 1 . 16 Connect Childcare (connectchildcare.com) provides fully integrated nursery management systems for childcare providers in the UK. Its market leading Core Connect product provides nurseries and preschools with an enterprise software solution enabling more efficient administrative processes. The investment will be used to drive product marketing, commercialise their new SaaS product, Foundations, and support the roll out of a payment facility to its underlying customer base. Supplying 14 of the top 25 largest nursery groups in the UK, the company has strong recurring revenues which have grown 17% year on year over the last four years. Northern Bloc Vegan ice cream producer December 2020 0.47 Northern Bloc Ice Cream (northern-bloc.com) is an established food brand in the emerging and rapidly growing vegan market. By focusing on chef quality natural ingredients, Northern Bloc has carved out an early mover position in the vegan ice cream sector. The company's focus on plant-based alternatives has strong environmental credentials as well as it being the first ice cream brand to move wholly into sustainable packaging. The investment is aimed at capitalising on the company's market position and accelerating growth. It has obtained key listings across several large supermarkets and is well placed to benefit from the food service recovery as it continues to secure menu placings. Northern Bloc has doubled its retail store facings in 2020 and saw a 60% increase in retail sales over the year. Vivacity Artificial intelligence & urban traffic control system February 2021 1.25 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 2021 0.45 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, will help the company prepare for and capitalise on what is expected to be strong demand for UK staycation holidays. Legatics SaaS LegalTech software business June 2021 0.91 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 0.84 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 transaction per vet 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 The Company made further investments into seven existing portfolio companies in the year, totalling £3.01 million, as detailed below: Company Business Date of Investment Amount of new investment (£m) Parsley Box Ambient ready meals targeting the over 60s January/March 2021 0.38 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 will scale the company's marketing strategy, enable it to process larger order volumes and continue to build out its team. The company'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 the Investment Adviser's Review within the Annual Report . Bleach London Hair colourants brand February 2021 0.15 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 greatly 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, will be 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 0.66 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. Bella & Duke Frozen raw dog food provider May 2021 0.40 Bella & Duke (bellaandduke.com) is a direct-to-consumer subscription service, providing premium frozen raw dog food to pet owners in the UK. Founded in 2016, the business provides an alternative to standard meal options for dog owners by focusing on the well documented health benefits of a raw food diet. This area is a growing niche in the large and established pet food market and is being driven by the premiumisation of dog food. This follow-on investment from the Company, alongside a co-investment by the British Growth Fund ("BGF") and existing shareholders, will provide additional working capital enabling Bella & Duke to continue to scale. Tapas Revolution Spanish restaurant chain June 2021 0.23 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 have been controlled well under the circumstances and this further investment is to provide financial headroom whilst sites re-open and to capitalise on new site acquisition opportunities. MyTutor Digital marketplace for online tutoring August 2021 0.95 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 offering. 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 0.24 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. Portfolio valuation movements The portfolio generated net unrealised gains of £39.48 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 believes that the pandemic has accelerated an existing trend and, in many cases, companies have now moved to a higher operating base. Over this period, some older style MBO portfolio companies with similar business practices have also benefited. A few companies have struggled in this environment, and while there remains a possibility such businesses could fail, their value has already been reduced to modest levels, reducing the risk to shareholder value. Total valuation increases were £40.81 million. The main valuation increases were: Virgin Wines £9.05million MyTutor £5.09million Preservica £4.68million MPB £4.15million Red Paddle £ 2.97million Virgin Wines, MyTutor, MPB and Vian Marketing (trading as Red Paddle) 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 has attracted third-party investment interest which has led to a sizeable re-rating. Total valuation decreases were £(1.33) million. The main valuation decreases were: Parsley Box £(0.67)million Andersen EV £(0.27)million RotaGeek £(0.21)million Grow Kudos £(0.13)million The value of Parsley Box experienced a significant decline over the quarter in light of market sentiment combined with company announcements of slower than anticipated sales growth and supply disruption. Andersen EV has been operating in a fast-developing industry beset with regulatory hurdles that have challenged its progress over the period, RotaGeek has suffered in a market heavily impacted by COVID-19 restrictions, whilst Grow Kudos has been affected by contract delays. The majority of the increase in portfolio value lies in the top 10 companies which represent over 70% of the portfolio by value (excluding legacy). Year-on-year growth by either revenues or earnings has been seen in all of the top ten companies (excluding legacy) and it is pleasing to note that eight of these are from the younger, growth portfolio. Realisations during the year The Company realised four 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 Vectair Designer and distributor of washroom products December 2005 to November 2020 £ 1 . 83 milli on 8.5 xcost The Company sold its investment in Vectair Holdings Limited to a consortium of US investment funds, including Oxbow Industries and Arcspring, and has received proceeds of £1.09 million (realised gain in the year: £0.07 million). This investment generated proceeds over the life of the investment of £1.83 million compared to original cost of £0.22 million, which is a multiple of cost of 8.5x and an IRR of 22.3%. Bourn Bioscience In vitro fertilisation clinics January 2014 to December 2020 £2.64 million 1.6x cost The Company sold its investment in Bourn Bioscience Limited to Canadian acquirer Triangle Capital, and has received cash proceeds of £2.00 million (realised gain in the year: £1.44 million). This investment generated proceeds over the life of the investment of £2.64 million, compared to original cost of £1.61 million, which is a multiple of cost of 1.6x and an IRR of 8.5%. Omega Diagnostics In vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases December 2010 to February 2021 £1.64 million 5.9 x cost Following a further significant increase in the share price, the Company sold its remaining investment in Omega Diagnostics Group plc for £0.59 million (realised gain in the year: £0.14 million). Total proceeds received over the ten-year life of the investment were £1.64 million, compared to an original investment cost of £0.28 million, which is a multiple on cost of 5.9x and an IRR of 19.9%. Proactive Group Provider of media services and investor conferences January 2018 to  September 2021 £2.54 million 2.6 x cost On 29 September 2021, the Company sold its investment in Proactive Group Holdings Inc ("Proactive"). The Company received £2.48 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 £1.56 million (realised loss in the year: £(0.01) million). Total proceeds received over the nearly four-year life of the investment were £2.54 million, compared to an original cost of £0.99 million, which is a multiple on cost of 2.6x and an IRR of 33.0%. Loan stock repayments and other gains/(losses) during the year During the year and following the admission of its shares to AIM, the Company received £1.73 million from the partial realisation of its holding in Parsley Box, generating a realised gain of £0.94 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 £1.74 million from the partial realisation of MPB Group generating a realised gain of £0.82 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 £0.95 million proceeds for the Company and a realised gain in the year of £0.58 million. In addition to the above, proceeds of £3.72 million were received via loan repayments from Virgin Wines, Vian Marketing (trading as Red Paddle), MPB Group and BG Training, generating a realised gain of £0.04 million. Finally, deferred consideration totalling £0.22 million in realised gains was received in respect of investments realised in a previous year. A small realised loss of £(0.08) 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 Interest received in the year 1.22 2.66 Dividends received in the year 0.69 0.84 Total portfolio Income in the year1 1.91 3.50 Portfolio Value at 30 September 88.15 50.86 Portfolio Income Yield (Income as a % of Portfolio value at 30 September) 2.2% 6.9% 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 from the realisation of Auction Technology Group in 2020. Further investments made after the year-end The Company made further investments into existing portfolio companies, totalling £1.71 million after the year-end, as detailed below: Company Business Date of Investment Amount of further investment (£m) Preservica Seller of proprietary digital archiving software October/November 2021 1.71 Preservica 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. Realisation after the year-end The Company realised its investment in Vian Marketing Limited (trading as Red Paddle Co) following the year-end, as detailed below: Company Business Period of investment Total cash proceeds over the life of the investment / Multiple over cost Red Paddle Design and manufacturer of Stand up paddleboards July 2015 to November 2021 £5.97 million 4.9 x cost The Company sold its investment in Vian Marketing (trading as Red Paddle) to Myers Family Office for £4.99 million. Total proceeds received to date over the six-year life of the investment were £5.97 million compared to an original investment cost of £1.21 million, which is a multiple on cost of 4.9x and an IRR of 31.5%. Further proceeds of up to £0.49 million may be receivable in due course. Environmental, Social, Governance considerations When seeking new investment opportunities, the Investment Adviser under Mobeus Equity Partners LLP operated with a list of exclusions which precluded it from investing in any businesses operating in areas perceived to be unsustainable or detrimental to wider society, or any businesses that have committed purposeful breaches of regulation or have engaged in unlawful activity. Each potential new investment was subject to a comprehensive due diligence process encompassing commercial, financial and ESG principles. 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 particular ESG challenges and opportunities, which are diverse across the entire portfolio. Following the novation of the advisory agreement to Gresham House Asset Management Limited on 30 September 2021, a market leader that is well-resourced with knowledge and expertise in sustainability, the Investment Advisor will align its current ESG procedures and protocols to the highest standards as set out and informed by Gresham House plc. 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 showing signs of 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. There is a significant exposure to businesses operating a direct-to-consumer business model which has contributed to strong trading performance during the year. This also gives confidence about the future strength of the portfolio and its ability to cope with the challenges and opportunities associated with Brexit, the macro-economic outlook and the ongoing impact of COVID-19. 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. There still remains much uncertainty around the wider impact of the pandemic upon the economy as well as the potential impacts of new COVID variants should they emerge.  However, the portfolio is in a robust shape and the investment activity levels are promising. Gresham therefore remains optimistic for the future. Gresham House Asset Management Limited Investment Adviser 17 December 2021 Investment Portfolio Summary for the year ended 30 September 2021 Total Total Additional investments Total % of cost at Valuation at valuation at portfolio 30-Sep-21 30-Sep-20 30-Sep-21 by value £ £ £ £ Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited)1 (AIM quoted)  65,288 6,458,434 - 12,830,864 14.6% Online wine retailer Preservica Limited 2,960,899 4,303,532 - 8,986,207 10.2% Seller of proprietary digital archiving software My TutorWeb Limited (trading as MyTutor) 3,361,778 2,972,638 954,529 8,640,371 9.8% Digital marketplace connecting school pupils seeking one-to-one online tutoring MPB Group Limited 1,510,992 4,698,745 - 7,466,511 8.5% Online marketplace for used photographic equipment EOTH Limited (trading as Equip Outdoor Technologies) 1,383,313 2,986,028 - 5,427,729 6.2% Distributor of branded outdoor equipment and clothing including the Rab and Lowe Alpine brands End Ordinary Group Limited (trading as Buster and Punch) (formerly Buster and Punch Holdings Limited) 2,046,612 2,740,635 - 4,470,852 5.1% Industrial inspired lighting and interiors retailer Vian Marketing Limited (trading as Red Paddle Co) 837,888 1,881,880 - 4,324,963 4.7% Design, manufacture and sale of stand-up paddleboards and windsurfing sails Media Business Insight Holdings Limited 3,666,556 1,407,127 - 4,199,330 4.8% A publishing and events business focussed on the creative production industries Manufacturing Services Investment Limited (trading as Wetsuit Outlet) 3,205,182 2,371,375 - 3,202,735 3.6% Online retailer in the water sports market Bella & Duke Limited 1,323,745 931,499 392,246 3,165,212 3.6% A premium frozen raw dog food provider Data Discovery Solutions Limited (trading as Active Navigation) 1,543,500 3,087,000 - 3,087,000 3.5% Provider of global market leading file analysis software for information governance, security and compliance I-Dox plc 2 453,881 1,895,924 - 2,916,088 3.3% Developer and supplier of knowledge management products Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) 464,658 1,175,977 - 2,847,390 3.2% A specialist logistics, storage and removals business Arkk Consulting Limited (trading as Arkk Solutions) 2,182,187 1,348,963 656,180 2,264,597 2.6% Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements Tharstern Group Limited 1,454,278 1,137,147 - 1,668,487 1.9% Software based management Information systems for the printing industry Connect Childcare Group Limited 1,157,214 - 1,157,214 1,390,148 1.6% Nursery management software provider Bleach London Holdings Limited 874,302 1,232,358 152,850 1,335,917 1.5% Hair colourants brand Vivacity Labs Limited 1,250,760 - 1,250,760 1,250,760 1.4% Provider of artificial intelligence & urban traffic control systems Parsley Box Group plc (formerly Parsley Box Limited) 3 (AIM quoted) 874,001 2,168,135 377,486 1,084,367 1.2% Supplier of home delivered ambient ready meals targeting the over 60s Spanish Restaurant Group Limited (trading as Tapas Revolution) 1,630,233 186,300 232,847 979,122 1.1% Spanish restaurant chain Rota Geek Limited 1,250,800 1,170,582 - 962,085 1.1% Provider of cloud based enterprise software that uses data-driven technologies to help retail and leisure organisations schedule staff IPV Limited 954,674 954,674 - 954,674 1.1% Provider of media asset software Legatics Limited 909,330 - 909,330 909,330 1.0% SaaS LegalTech software provider Pets' Kitchen Limited (trading as Vet's Klinic) 844,200 - 844,200 844,200 1.0% Veterinary clinics CGI Creative Graphics International Limited 1,943,948 337,590 - 587,292 0.7% Vinyl graphics to global automotive, recreation vehicle and aerospace markets Northern Bloc Ice Cream Limited 473,100 - 473,100 506,869 0.6% Supplier of premium vegan ice cream Aquasium Technology Limited ⁴ 166,667 - - 478,072 0.5% Manufacturing and marketing of bespoke electron beam welding and vacuum furnace equipment Caledonian Leisure Limited 449,251 - 449,251 449,251 0.5% Provider of UK leisure and experience breaks RDL Corporation Limited 1,441,667 137,899 - 322,033 0.4% Recruitment consultants within the pharmaceutical, business intelligence and IT industries Muller EV Limited (trading as Andersen EV) 554,750 352,473 237,750 317,000 0.4% Provider of premium electric vehicle (EV) chargers Kudos Innovations Limited 472,500 329,354 - 200,340 0.2% Online platform that provides and promotes academic research dissemination BookingTek Limited 779,155 - - - 0.0% Software for hotel groups Oakheath Limited (in members' voluntary liquidation) 649,528 - - - 0.0% Online platform that connects people seeking home care from experienced independent carers Total Total Additional investments Total % of Cost at Valuation at Valuation at portfolio 30-Sep-21 30-Sep-20 30-Sep-21 by value £ £ £ £ Jablite Holdings Limited (in members' voluntary liquidation) 498,790 65,779 - 65,779 0.1% Manufacturer of expanded polystyrene products Corero Network Security plc 4 (AIM quoted) 600,000 7,374 - 10,314 0.0% Provider of e-business technologies Veritek Global Holdings Limited 2,289,859 - - - 0.0% Maintenance of imaging equipment CB Imports Group Limited (trading as Country Baskets) (in members' voluntary liquidation) 175,000 - - - 0.0% Importer and distributor of artificial flowers, floral sundries and home decor products Racoon International Group Limited 655,851 - - - 0.0% Supplier of hair extensions, hair care products and training Oxonica Limited 4 2,524,527 - - - 0.0% International nanomaterials group NexxtDrive Limited/Nexxt E-drive Limited 2 487,014 - - - 0.0% Developer and exploiter of mechanical transmission technologies Biomer Technology Limited 5 137,170 - - - 0.0% Developer of  biomaterials for medical devices 0.0% Disposed in year Proactive Group Holdings Inc - 2,486,769 - 0.0% Provider of media services and investor conferences for companies primarily listed on secondary public markets Vectair Holdings Limited - 1,020,351 - - 0.0% Designer and distributor of washroom products Bourn Bioscience Limited - 552,130 - - 0.0% Management of In-vitro fertilisation clinics Omega Diagnostics Group plc (AIM quoted) - 449,180 - - 0.0% In-vitro diagnostics for food intolerance, autoimmune diseases and infectious diseases BG Training Limited  - 13,281 - - 0.0% Technical training business Proceeds from the companies realised in previous years - - - - 0.0% Total 50,505,048 50,861,133 8,087,743 88,145,889 100.0% Portfolio split by type Growth focused portfolio 6   33,944,552   37,931,047   8,087,743   65,067,630 73.7% MBO focused portfolio 6   16,560,496   12,930,086   -    23,078,259 26.3% Total 50,505,048 50,861,133 8,087,743 88,145,889 100.0% Notes 1 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 Limited ("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 £2.68 million. 2 Investment formerly managed by Nova Capital Management Limited until 31 August 2007. 3 Admitted to AIM during the year. On 7 January 2021, a £0.36 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 UK plc. Upon admission to AIM, the Company invested a further £0.02 million and realised proceeds of £1.73 million. 4 Investment formerly managed by Foresight Group LLP up to various dates ending on or before 10 March 2009. 5 Investment formerly managed by Nova Capital Management Limited until 31 August 2007 and by Foresight Group until various dates ending on or before 10 March 2009. 6 The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy. 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 risks faced by the Company. This includes a key risk management review which takes place at each quarterly Board meeting. The principal and emerging risks identified by the Board, a description of the possible consequences of each risk and how the Board manages the risk are set out below. The risk profile of the Company changed as a consequence of the VCT regulations introduced in 2015. As the Company is required to focus its investment on growth capital investments in younger companies it is anticipated that investment returns will be more volatile and will have a higher risk profile. The Board remains confident that the Company and the Investment Adviser will continue to adapt to changes in investment requirements and put in place appropriate resource to identify and make suitable investments as has been experienced in the year under review. The Board regularly sets and reviews policies for financial risk management and full details of these can be found in Note 16 to the Financial Statements within the Annual Report . The occurrence of the COVID-19 pandemic, whilst creating heightened uncertainty, has not changed the nature of the principal risks. The Board considers that the present processes for mitigating those risks remain appropriate. During the year, there have been no changes in the number of principal risks. A new emerging risk was identified by the Board which, with the principal risks, is listed below: Risk Possible consequence How the Board manages risk Investment and liquidity Investment in VCT qualifying earlier stage 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. External events or factors may have more impact as are outside of their control. As the securities of such smaller companies held by the Company are unquoted, they are less liquid, which may cause difficulties in valuing and realising these securities. ● The Board regularly reviews the Company's Strategy including its Investment Policy. ● Careful selection, appropriate due diligence and review of the diverse portfolio takes place on a regular basis. ● The Board seeks to ensure the Company has an adequate level of liquidity at all times through review at each board meeting. ● A member of the Investment Adviser is usually appointed to the board of an investee company and regular monitoring reports are assessed by the Investment Adviser. ● Support has been provided to the portfolio companies through the COVID-19 pandemic and is ongoing. Loss of approval as a Venture Capital Trust A breach of the VCT Tax Rules may lead to the Company losing its approval as a VCT, which would result in qualifying Shareholders who have not held their shares for the designated period having to repay the income tax relief they obtained plus future dividends paid by the Company would be subject to Taxation. The Company would also lose its exemption from corporation tax on capital gains. ● The Company's VCT qualifying status is continually reviewed by the Board and the Investment Adviser and is reported to each Board meeting. ● The Board receives regular reports from its VCT Status Adviser, Philip Hare & Associates LLP who have been retained by the Board to monitor the Company's compliance with the VCT Rules. Economic and political and other external risks Factors such as the COVID-19 pandemic and resulting restrictions imposed by government, the impact of Brexit, supply shortages or an economic recession and movements 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 in a diversified portfolio of Companies as protection from large impacts; (2) developments in the macro-economic environment such as movements in interest rates or general fluctuations in stock markets; and (3) With regards to COVID-19, the Investment Adviser continues to hold ongoing discussions with all the portfolio companies to ascertain where support is required. Cash comprises a significant proportion of net assets of the Company, further to the successful exits and the fund-raise in 2019/2020 giving the Company a strong liquidity position. The proposed fundraise for the tax year 2021/22, will also support the Company's liquidity position. The portfolio has limited exposure to sectors such as leisure, hospitality, retail and travel which have been more at risk. 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 financial and non-financial internal controls in place, reviews the risks facing the Company at Board meetings and receives reports by exception. ● The performance of the service providers is reviewed annually and assurances that each provider has controls in place to reduce the risk of breaches of their cyber security are obtained. Market liquidity Shareholders may find it difficult to sell their shares at a price which is close to the net asset value. ● The Board has a share buyback policy which seeks to mitigate market liquidity risk for Shareholders. This policy is reviewed at each quarterly Board meeting. 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 impacts are also 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 that the Company is taking into account in their strategic planning although the Company itself has little direct impact on environmental issues. Measures had been introduced to decrease the amount of travel undertaken prior to the pandemic and working from home and to reduce the cost and environmental impact of providing paper copies of Shareholder correspondence. 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; ●   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 Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein. 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; and 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 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. The names and functions of the Directors are stated within the Annual Report . For and on behalf of the Board Maurice Helfgott Chairman 17 December 2021 FINANCIAL STATEMENTS Income Statement For the year ended 30 September 2021 Year ended 30 September 2021 Year ended 30 September 2020 Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Net investment portfolio gains 9   -    43,637,384   43,637,384   -    9,848,433   9,848,433 Income 3   1,953,493   -    1,953,493   3,660,837   -    3,660,837 Investment Adviser's fees 4a (548,812) (1,646,435) (2,195,247) (458,619) (1,375,856) (1,834,475) Investment Adviser's performance fees 4b   -  (1,095,268) (1,095,268)   -    -    -  Other expenses 5 (444,069)   -  (444,069) (528,481)   -  (528,481) Profit on ordinary activities before taxation   960,612   40,895,681   41,856,293   2,673,737   8,472,577   11,146,314 Tax on profit on ordinary activities 6 (50,487)   50,487   -  (348,948)   348,948   -  Profit for the year and total comprehensive income   910,125   40,946,168   41,856,293   2,324,789   8,821,525   11,146,314 Basic and diluted earnings per ordinary share: 7 0.77p 34.57p 35.34p 2.07p 7.87p 9.94p 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. Balance sheet as at 30 September 2021 Company number: 4069483 as at 30 September 2021 as at 30 September 2020 Notes £ £ £ £ £ £ Fixed assets Investments at fair value 9 88,145,889 50,861,133 Current assets Debtors and prepayments 2,459,633 398,489 Current asset investments 10 27,194,727 30,449,213 Cash at bank and in hand 10 2,653,455 1,739,602 32,307,815 32,587,304 Creditors: amounts falling due within one year (1,367,430) (315,007) Net current assets 30,940,385 32,272,297 Net assets 119,086,274 83,133,430 Capital and reserves Called up share capital 11 1,185,549 1,186,617 Capital redemption reserve 36,682 23,827 Share premium reserve 13,328,900 12,283,303 Revaluation reserve 43,197,940 6,862,342 Special distributable reserve 50,884,712 54,626,873 Profit and loss account 10,452,491 8,150,468 Equity shareholders' funds 119,086,274 83,133,430 Basic and diluted net asset value per share Ordinary shares 12 100.45p 70.06p The Notes below form part of these Financial Statements. The Financial Statements were approved and authorised for issue by the Board of Directors on 17 December 2021 and were signed on its behalf by: Maurice Helfgott Chairman Statement of Changes in Equity   Non-distributable reserves Distributable reserves Called up Capital Share Special Realised share redemption premium Revaluation distributable capital Revenue capital reserve reserve reserve reserve reserve reserve Total For the year ended 30 September 2021 (Note a) (Note b) (Note b) Notes £ £ £ £ £ £ £ £ At 1 October 2020 1,186,617 23,827 12,283,303 6,862,342 54,626,873 5,938,001 2,212,467 83,133,430 Comprehensive income for the year Profit for the year - - - 39,475,833 - 1,470,335 910,125 41,856,293 Total comprehensive income for the year - - - 39,475,833 - 1,470,335 910,125 41,856,293 Contributions by and distributions to owners Dividends re-invested into new shares 11 11,787 - 1,045,597 - - - 1,057,384 Shares bought back (Note d) 11 (12,855) 12,855 - - (1,050,945) - (1,050,945) Dividends paid 8 - - - - - (4,727,910) (1,181,978) (5,909,888) Total contributions by and distributions to owners (1,068) 12,855 1,045,597 - (1,050,945) (4,727,910) (1,181,978) (5,903,449) Other movements Realised losses transferred to special reserve (Note a) - - - - (2,691,216) 2,691,216 - Realisation of previously unrealised gains - - - (3,140,235) - 3,140,235 - Total other movements - - - (3,140,235) (2,691,216) 5,831,451 - - At 30 September 2021 1,185,549 36,682 13,328,900 43,197,940 50,884,712 8,511,877 1,940,614 119,086,274 Notes a) The Company's special reserve is available to fund buybacks of shares as and when it is considered by the Board to be in the interests of Shareholders, and to absorb any existing and future realised losses and for other corporate purposes. At 30 September 2021, the Company has a special reserve of £50,884,712, £28,510,263 of which arises from shares issued more than three years after the end of the financial year in which they were issued. Reserves originating from share issues are not distributable under VCT rules if they are within three years of the end of an accounting period in which the shares were issued. The total transfer of £2,691,216 from the realised capital reserve to the special distributable reserve above is the total of realised losses incurred by the Company in the year. b) The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company shown in the Balance Sheet. c) The shareholders authorised the Company to purchase its own shares for cancellation pursuant to section 701 of the Companies Act  2006  at the Annual General Meeting held on 10 February 2021.  The authority was limited to a maximum number of 17,787,390 shares (this being approximately 14.99% of the issued share capital at the date of the Notice of the meeting). The minimum price which may be paid for a share is 1 penny per share, the nominal value thereof.  The maximum price that may be paid for a share is an amount that is not more than 5% above the average of the middle market quotations of the shares as derived from the Daily Official List of the London Stock Exchange for the five business days preceding such purchase. The authorities provide that the Company may make a contract or contracts to purchase its own shares prior to the expiry of the authority which may be executed in whole or part after the expiry of such authority, and may purchase its shares in pursuance of any such contract.  d) During the year, the Company repurchased 1,285,499 of its own shares at the prevailing market price for a total cost of £1,050,945, which were subsequently cancelled. The difference between the figure shown above of £1,050,945, and that per the Statement of Cash Flows of £1,103,332 is due to a share buyback creditor of £94,051 at the previous year end, partially offset by a share buyback creditor of £41,664 at the year-end. Non-distributable reserves Distributable reserves Called up Capital Share Special Realised share redemption premium Revaluation distributable capital Revenue For the year ended 30 September 2020 capital reserve account reserve reserve reserve reserve Total Notes £ £ £ £ £ £ £ £ At 1 October 2019 1,033,029 5,245 - 4,652,457 63,751,255 9,864,455 2,421,638 81,728,079 Comprehensive income for the year Profit for the year - - - 3,425,711 - 5,395,814 2,324,789 11,146,314 Total comprehensive income for the year - - - 3,425,711 - 5,395,814 2,324,789 11,146,314 Contributions by and distributions to owners Shares issued via Offer for Subscription 129,391 - 9,870,609 - - 10,000,000 Issue costs and faciliation fees on Offer for Subscription - - (245,176) - (99,106) - (344,282) Dividends re-invested into new shares 42,779 - 2,657,870 - - - 2,700,649 Shares bought back (18,582) 18,582 - - (1,243,530) - (1,243,530) Dividends paid - - - - (5,497,299) (12,822,541) (2,533,960) (20,853,800) Total contributions by and distributions to owners 153,588 18,582 12,283,303 - (6,839,935) (12,822,541) (2,533,960) (9,740,963) Other movements Realised losses transferred to special reserve - - - - (2,284,447) 2,284,447 - Realisation of previously unrealised gains - - - (1,215,826) - 1,215,826 - Total other movements - - - (1,215,826) (2,284,447) 3,500,273 - - At 30 September 2020 1,186,617 23,827 12,283,303 6,862,342 54,626,873 5,938,001 2,212,467 83,133,430 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 Dividend Investment Scheme or reduced due to shares bought back and cancelled 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 and the Company's Dividend Investment Scheme. 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 9), 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 is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), 75% of the Investment Adviser fee expense and 100% of the Investment Adviser performance fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve. The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve. 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 30 September 2021 Year ended Year ended 30 September 2021 30 September 2020 Notes £ £ Cash flows from operating activities Profit for the financial year 41,856,293 11,146,314 Adjustments for: Net investment portfolio gains (43,637,384) (9,848,433) Decrease/(Increase) in debtors 183,844 (135,373) Increase in creditors and accruals 1,104,812 39,354 Net cash (outflow)/inflow from operating activities (492,435) 1,201,862 Cash flows from investing activities Purchase of investments 9 (8,087,743) (8,385,023) Disposal of investments 9   12,195,381   17,597,050 Net cash inflow from investing activities   4,107,638   9,212,027 Cash flows from financing activities Shares issued as part of Offer for subscription   -    10,000,000 Issue costs and faciliation fees as part of Offer for subscription   -  (344,282) Equity dividends paid 8 (4,852,504) (18,153,151) Purchase of own shares 11 (1,103,332) (1,189,858) Net cash outflow from financing activities (5,955,836) (9,687,291) Net (decrease)/increase in cash and cash equivalents (2,340,633) 726,598 Cash and cash equivalents at start of year 29,037,046 28,310,448 Cash and cash equivalents at end of year 26,696,413 29,037,046 Cash and cash equivalents comprise: Cash at bank and in hand 10 2,653,455 1,739,602 Cash equivalents 10 24,042,958 27,297,444

Notes to the Financial Statements for the year ended 30 September 2021 1 Company information The Income and Growth VCT plc is a public limited company incorporated in England, registration number 4069483. The registered office was 30 Haymarket, London, SW1Y 4EX at the year-end and has subsequently changed to 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 within an outlined box 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 Financial Statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments which are disclosed under FRS102 s11/12 as shown in Note 16. 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, 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' ability to continue to service the Company has 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. Income is not recognised in the Income Statement 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  30 September 2021 has been classified as capital and has been included within realised gains on investments. 2021 2020 £ £ Income from bank deposits 28,376 43,410 Income from investments -  from equities 694,891 837,168 -  from OEIC funds 4,103 112,575 -  from loan stock 1,220,332 2,625,570 -  from interest on preference share dividend arrears - 38,987 1,919,326 3,614,300 Other income 5,791 3,127 Total income 1,953,493 3,660,837 Total income comprises Revenue dividends received 698,994 949,743 Interest 1,248,708 2,707,967 Other income 5,791 3,127 Total Income 1,953,493 3,660,837 Income from investments comprises Listed UK securities 12,500 - Listed overseas securities 4,103 112,575 Unlisted UK securities 1,902,723 3,501,725 Total investment income 1,919,326 3,614,300 Total loan stock interest due but not recognised in the year was £784,958 (2020: £1,005,705) due to uncertainty over its recoverability. The decrease is due to the removal of a number of investee 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 25% of the Investment Adviser's fees are 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 Revenue Capital Total Revenue Capital Total 2021 2021 2021 2020 2020 2020 £ £ £ £ £ £ Gresham House Asset Management Limited1 548,812 1,646,435 2,195,247 458,619 1,375,856 1,834,475 1 -  On 30 September 2021, Mobeus Equity Partners LLP ("Mobeus") sold its VCT fund and Investment management business to Gresham House Asset Management ("GHAM"). As a result, the Company's Investment advisory arrangements have been novated from Mobeus to GHAM. The entire core management, investment and operational teams involved with the Company all transferred to GHAM in connection with this transaction. Under the terms of a revised investment management agreement dated 29 March 2010, Mobeus Equity Partners LLP ("Mobeus") (from 1 October 2021, now Gresham House Asset Management Limited ("Gresham House")) provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2.4% per annum of closing net assets, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter. One sixth of this fee is subject to minimum and maximum limits of £150,000 (2020: £150,000) and £170,000 (2020: £170,000) per annum respectively. The Investment Adviser fees disclosed above are stated after applying a cap on expenses excluding IFA trail commission and exceptional items set at 3.25% of closing net assets at the year-end. In accordance with the investment management agreement any excess expenses are wholly borne by the Investment Adviser. The excess expenses during the year attributable to the Investment Adviser amounted to £nil (2020: £nil). With effect from 1 April 2020, the Investment Adviser's fee upon the net funds raised under the 2019/2020 Offer for Subscription from the use of the over-allotment facility of £5 million was reduced to 1.4% from 2.4%, for one year. b)  Investment Adviser's performance fees Revenue Capital Total Revenue Capital Total 2021 2021 2021 2020 2020 2020 £ £ £ £ £ £ Gresham House Asset Management Limited - 1,095,268 1,095,268 - - - On 30 September 2014, an incentive fee agreement was signed between the Board and Mobeus, with effect from  1 October 2013, to amend and replace the previous agreement. This agreement was novated to Gresham House Asset Management Limited following its purchase of the Mobeus VCT fund and investment management business on 30 September 2021. Any payment under the incentive agreement is 15% of net realised gains for each year, payable in cash. It is payable only if Cumulative Net Asset Value (NAV) total return per share (being the closing NAV at a year end plus cumulative dividends paid to that year-end, since 1 October 2013) equals or exceeds a Target Return. The Target Return is the greater of two targets, being: i)  compound growth of 6% per annum (but 5% per annum for the year ended 30 September 2014 only), before deducting any incentive fee payable (for the year of calculation only) under both this amended agreement and the existing incentive agreement with Foresight Group LLP in Cumulative NAV total return per share; or ii)  the cumulative percentage change in the Consumer Prices Index since 1 October 2013 to the relevant financial year end, the resultant figure then being multiplied by (100+A)/100, where A is the number of full 12 month periods (or part thereof) that have passed between 1 October 2013 and the relevant financial year end. Both measures of Target Return are applied to the same opening base, being NAV per share as at 30 September 2013 of 113.90 pence. The objective of this Target Return is to enable shareholders to benefit from a cumulative NAV return of at least 6% per annum (5% in the financial year ended 30 September 2014), before any incentive fee is payable. Once a payment has been made, cumulative NAV total return is calculated after deducting past years' incentive fees paid and payable. Under this agreement, any fee payments to Gresham are subject to an annual cap of an amount equal to 2% of the net assets of the Company as at the immediately preceding year-end. Any excess over the 2% remains payable to Gresham in the following year(s), subject to the 2% annual cap in such subsequent year(s) and after any payment in respect of such subsequent year(s). The Target Return for the year ended 30 September 2021 was a 6% uplift on the previous year's Target Return of 169.65 pence, being 179.83 pence. As the Cumulative Total NAV return is 197.37 pence per share at the year-end, the Target Return has been met and therefore a fee is payable (2020: £nil). This fee amounts to £1,095,268 and has been accrued in these Financial Statements. This is payable following the approval of this Annual Report by Shareholders at the AGM. c)  Offer for Subscription fees 2021 2020 £m £m Funds raised by I&G VCT - 9.66 Offer costs payable to Mobeus at 3.00% of funds raised by I&G VCT - 0.30 Under the terms of an Offer for Subscription, with the other Mobeus VCTs, launched on 26 October 2019, Mobeus was entitled to fees of 3.00% of the investment amount received from investors. This amount totalled £1.74 million across all four VCTs, out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated under the terms of the Offer. 5 Other Expenses All expenses are accounted for on an accruals basis. 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 £9,314 (2020: £8,277) (note a)   132,314  137,204 IFA trail commission   89,669   82,314 Broker's fees   12,000   3,000 Auditor's fees  - Audit of company (excluding VAT)   31,002   30,089   - audit related assurance services (note b)(excluding VAT)   5,638   5,248   - other services (note c) (excluding VAT)   4,000   -  VCT monitoring fees   10,800   10,800 Registrar's fees   49,707   54,836 Printing   36,726   46,246 Legal & professional fees 7,614   18,448 Directors' insurance   8,245   7,769 Listing and regulatory fees   46,656   64,885 Sundry   9,698   42,791 Running costs   444,069  503,630 Provision against loan interest receivable   -    24,851 Other expenses   444,069  528,481 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 NIC included above. The key management personnel are the three non-executive Directors. The Company has no employees. £5,000 is outstanding and due to the Directors at 30 September 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)  Included within this figure are fees of £4,800 inclusive of VAT (2020: £nil) payable to the Auditor relating to the review of the calculation of the Investment Adviser's performance fee. 6 Taxation 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 - realised 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. 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 50,487 (50,487) - 348,948 (348,948) - Total current tax charge/(credit) 50,487 (50,487) - 348,948 (348,948) - Corporation tax is based on a rate of 19.0% (2020: 19.0%) b) Profit  on ordinary activities before tax 960,612 40,895,681 41,856,293 2,673,737 8,472,577 11,146,314 Profit on ordinary activities multiplied by main company rate of corporation tax in the UK of 19.0% (2020: 19.0%) 182,516 7,770,179 7,952,695 508,010 1,609,790 2,117,800 Effect of: UK dividends (132,029) - (132,029) (159,062) - (159,062) Net investment portfolio gains not taxable - (8,291,103) (8,291,103) - (1,871,202) (1,871,202) Losses not utilised/(utilised) - 470,437 470,437 - (87,536) (87,536) Actual current tax charge 50,487 (50,487) - 348,948 (348,948) - Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised. No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital Trust. There is no potential liability to deferred tax (2020: £nil). There is an unrecognised deferred tax asset of £1,630,000 (2020: £768,000). The deferred tax asset relates to unrelieved management expenses and is not recognised because the Company may not generate sufficient taxable income in the foreseeable future to utilise these expenses. 7 Basic and diluted earnings and return per share 2021 2020 £ £ Total earnings after taxation: 41,856,293 11,146,314 Basic and diluted earnings per share (note a)   35.34p   9.94p Revenue earnings from ordinary activities after taxation 910,125 2,324,789 Basic and diluted revenue earnings per share (note b)   0.77p   2.07p Net investment portfolio gains 43,637,384 9,848,433 Capital Investment Adviser fees and performance fees less taxation (2,691,216) (1,026,908) Total capital earnings 40,946,168 8,821,525 Basic and diluted capital earnings per share (note c)   34.57p   7.87p Weighted average number of shares in issue in the year 118,422,497 112,120,361 Notes: a)  Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue. b)  Revenue earnings per share is the revenue earnings after taxation divided by the weighted average number of shares in issue. c)  Capital earnings per share is the total capital earnings after taxation divided by the weighted average number of shares in issue. 8 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. The Company's status as a VCT means it has to comply with Section 259 of the Income Tax Act 2007, 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. Accordingly, the Board is required to determine the amount of minimum income dividend. Amounts recognised as distributions to equity shareholders in the year: Dividend Type For the year ended 30 September Pence per share Date Paid 2021 2020 Interim Income 2019 0.50p 18 October 2019   -    519,137 Interim Capital 2019 4.00p 18 October 2019   -    4,153,095 Interim Income 2020 1.50p 10 July 2020   -    1,725,492 Interim Capital 2020 1.50p 10 July 2020   -    1,725,492 Interim Income 2020 0.25p 28 September 2020   -    289,331 Interim Capital 2020 6.00p 28 September 2020   -    6,943,956 Interim Capital* 2020 4.75p 28 September 2020   -    5,497,297 Interim Income 2021 1.00p 23 July 2021   1,181,978   -  Interim Capital 2021 4.00p 23 July 2021   4,727,910   -    5,909,888   20,853,800 * - This dividend was paid out of the Company's Special distributable reserve. For the year ended 30 September 2021, £5,909,888 (2020: £20,853,800) disclosed above differs to that shown in the Statement of Cash Flows of £4,852,504 (2020: £18,153,151) due to £1,057,384 (2020: £2,700,649) of new shares issued as part of the Company's Dividend Investment Scheme. 2021 2021 2021 2020 2020 2020 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Proposed distribution to equity holders at the year-end Second interim dividend for the year ended 30 September 2021 of 4.00p1 (capital) per ordinary share - 4,742,195 4,742,195 - - - 1 - Payable out of the Company's special distributable reserve Any proposed final dividend is subject to approval by Shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. 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 274 of the Income Tax Act 2007 are considered. Recognised income distributions in the Financial Statements for the year 2021 2020 £ £ Revenue available for distribution by way of dividends for the year   910,125   2,324,789 Interim income dividend for the year - 1.00p (2020: 1.50p)   1,181,978   1,725,492 Second interim income dividend for the year - Nil (2020: 0.25p)   -    289,331 Total income dividends for the year   1,181,978   2,014,823 9 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 (as updated by Special valuation guidance issued in March 2020). 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 a 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 time 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, alongside consideration of:- The price of new 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 shares may be valued 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, depreciation 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, a lack of marketability). or:- where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost 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.  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 cost, 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. The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to determine the valuation. -  Level 1 - Fair value is measured based on quoted prices in an active market. -  Level 2 - Fair value is measured based on directly observable current market prices or indirectly being derived from market. -  Level 3 - Fair value is measured using valuation techniques using inputs that are not based on observable market data. 2021 2020 £ £ Traded on AIM 16,841,633 2,352,478 Unquoted equity shares 57,782,482 34,894,706 Unquoted preference shares 1,400,192 1,168,593 Loan stock 12,121,582 12,445,356 Total 88,145,889 50,861,133 Brought forward net unrealised gains now realised 3,140,235 1,215,826 Realised gains during the year 4,569,558 6,750,740 Transaction costs (408,007) (328,018) Total realised gains over cost 7,301,786 7,638,548 Unrealised gains for the year 39,475,833 3,425,711 Total realised and unrealised gains 46,777,619 11,064,259 Movements in investments during the year are summarised as follows: Unquoted Unquoted Traded equity preference Unquoted on AIM shares shares Loan Stock Total £ £ £ £ £ Cost at 30 September 2020 1,123,892 29,017,445 1,240,906 18,173,647 49,555,890 Permanent impairment at 30 September 2020 (500,000) (4,969,611) (301) (87,187) (5,557,099) Unrealised gains/(losses) at 30 September 2020 1,728,586 10,846,872 (72,012) (5,641,104) 6,862,342 Valuation at 30 September 2020 2,352,478 34,894,706 1,168,593 12,445,356 50,861,133 Purchases at cost - 5,757,273 - 2,330,470 8,087,743 Sale proceeds (note a & b) (2,236,021) (7,089,086) (360) (5,114,904) (14,440,371) Reclassification at value (note c) 6,323,840 (6,038,540) - (285,300) - Net realised gains/(losses) on investments (note a) 999,759 2,527,306 (3,491) 637,977 4,161,551 Net unrealised gains on investments (note d) 9,401,577 27,730,823 235,450 2,107,983 39,475,833 Valuation at 30 September 2021 16,841,633 57,782,482 1,400,192 12,121,582 88,145,889 Cost at 30 September 2021 1,993,170 31,854,268 1,240,546 15,417,064 50,505,048 Permanent impairment at 30 September 2021 (500,000) (4,969,611) (301) (87,187) (5,557,099) Unrealised gains/(losses) at 30 September 2021 15,348,463 30,897,825 159,947 (3,208,295) 43,197,940 Valuation at 30 September 2021 16,841,633 57,782,482 1,400,192 12,121,582 88,145,889 Net realised gains on investments of £4,161,551 together with net unrealised gains/(losses) on investments of £39,475,833 equal net investment portfolio gains of £43,637,384. A full breakdown of the increases and decreases in unrealised valuations of the portfolio is seen in the Investment Portfolio Summary. Major movements in investments Note a) Disposals of investment portfolio companies during the year were: Company Type Investment Cost Disposal Proceeds Valuation at 30 September 2020 Realised gain/(loss) in year £ £ £ £ Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited) Loan repayment 2,680,215 2,680,215 2,680,215 - Proactive Group Holdings Inc Realisation 988,390 2,478,682 2,486,769 (8,087) MPB Group Limited Partial Realisation 532,145 2,202,570 1,382,581   819,989 Bourn Bioscience Limited Realisation 1,610,379 1,995,299 552,130 1,443,169 Parsley Box Group plc (formerly Parsley Box Limited) Partial Realisation 429,285 1,726,131 787,082 939,049 Vectair Holdings Limited Realisation 53,400 1,086,289 1,020,351   65,938 My Tutorweb Limited Partial Realisation   352,086 954,529   379,303 575,226 Omega Diagnostics Group plc Realisation 70,011 591,940 449,180 142,760 Vian Marketing Limited (trading as Red Paddle Co) Loan repayment 369,549 527,928 527,928 - BG Training Limited Loan repayment 53,125 53,125 13,281   39,843 Other capital proceeds Various - 143,663 -   143,664 7,138,585 14,440,371 10,278,820 4,161,551 Note b) Sale proceeds above of £14,440,371 are more than that shown in the Statement of Cash Flows of £12,195,381 by £2,244,990. This is comprised of proceeds receivable from the realisations of Proactive Group (£2,239,489) and Vectair Holdings (£5,501) both held as debtors at the year-end. Note c) 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 £6,323,840 reflects the combined equity value held at the start of the year and a follow-on investment made in the year. Note d) Within net unrealised gains of £39,475,833 for the year, the significant increases in value compared to last year were as follows: £9,052,645 in Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited), £5,092,507 in My Tutorweb Limited, £4,682,675 in Preservica Limited, £4,150,347 in MPB Group Limited, £2,971,011 in Vian Marketing Limited (trading as Red Paddle Co) and £2,792,203 in Media Business Insight Holdings Limited. These gains were partially offset by unrealised falls in valuation compared to last year, including: £674,172 in Parsley Box Group plc (formerly Parsley Box Limited), £273,223 in Muller EV Limited (trading as Andersen EV), £208,497 in Rota Geek Limited, £129,014 in Kudos Innovations Limited and £49,291 in Bleach London Holdings Limited. 10 Current asset investments and Cash at bank Cash equivalents, for the purposes of the Statement of Cash Flows, comprise 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 one year's 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. Current asset investments and Cash at bank 2021 2020 £ £ OEIC Money market funds 24,042,958 27,297,444 Cash equivalents per Statement of Cash Flows 24,042,958 27,297,444 Bank deposits that mature after three months 3,151,769 3,151,769 Current asset investments 27,194,727 30,449,213 Cash at bank 2,653,455 1,739,602 11 Called up share capital 2021 2020 £ £ Allotted, called-up and fully paid: Ordinary Shares of 1p each: 118,554,881 (2020: 118,661,711) 1,185,549 1,186,617 1,185,549 1,186,617 During the year, the Company purchased 1,285,499 (2020: 1,858,177) of its own ordinary shares for cash (representing 1.1% (2020: 1.8%) of the ordinary shares in issue at the start of the year) at the prevailing market price for a total cost of £1,050,945 (2020: £1,243,530). The shares bought back were subsequently cancelled. This figure is higher than that shown in the Statement of Cashflows of £1,103,332 by £52,387. This is due to an opening share buyback creditor of £94,051 offset by a share buyback creditor of £41,664 at the year-end. Under the terms of the Dividend Investment Scheme, a total of 1,178,669 ordinary shares were allotted during the year ended 30 September 2021 for a total consideration of £1,057,384. 12 Basic and diluted net asset value per share 2021 2020 Net assets £119,086,274 £83,133,430 Number of shares in issue 118,554,881 118,661,711 Basic and diluted net asset value per share 100.45p 70.06p 13 Post balance sheet events On 8 October 2021, a £0.15 million loan investment was made into Preservica Limited, an existing portfolio company. On 26 November 2021, the entire holding of Vian Marketing Limited (trading as Red Paddle) was realised, generating proceeds of £4.99 million. On 30 November 2021, a follow-on equity and loan investment of £1.56 million was made into Preservica Limited, an existing portfolio company. 14 Statutory information The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 30 September 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. 15 Annual Report The Annual Report will be published on the Company's website at www.incomeandgrowthvct.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]. 16 Annual General Meeting The Company's next Annual General Meeting will be held on Wednesday, 23 February 2022 at 2:00 pm at the offices of the Investment Adviser, Gresham House Asset Management Limited, at 80 Cheapside, London EC2V 6EE.  Shareholders will also be able to view the meeting remotely via a link to be provided on the Company's website at: www.incomeandgrowthvct.co.uk . 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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