Annual Results for the year ended 30 Sep 2019

RNS Number : 1072W

Income & Growth VCT (The) PLC

06 December 2019

 

THE INCOME & GROWTH VCT PLC ANNUAL FINANCIAL RESULTS OF THE COMPANY FOR THE YEAR ENDED 30 SEPTEMBER 2019 The Income & Growth VCT plc (the "Company") today announces the final results for the year ended 30 September 2019.  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 2019: Net assets: £81.73 million Net asset value ("NAV") per share: 79.12 pence -     Net asset value ("NAV") total return per share was 7.4%*. -     Share price total return per share was 15.8%*. -     Dividends paid in respect of the year total 6.00 pence per share. This brings cumulative dividends paid to shareholders in respect of the past five years to 55.00 pence per share*. -     The Company realised investments totalling £9.19 million of cash proceeds and generated net realised gains over original investment cost of £4.38 million. -     £5.08 million was invested into three new companies and three follow-on investments. *Further details on these alternative performance measures ("APMs") are contained in the Strategic Report in the Annual Report. NAV total return per share is calculated as closing NAV per share plus dividends paid in the year as a percentage of opening NAV per share. 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. Reporting date Net assets NAV per share Share price1 Cumulative dividends  paid per share Cumulative total return per share to shareholders2 Dividends paid and proposed per share in respect of each year As at 30 September (NAV basis) (Share price basis) (£m) (p) (p) (p) (p) (p) (p) 2019 81.73 79.12 75.503 113.00 192.12 188.50 6.00 4 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 2016 70.84 98.51 88.80 80.50 179.01 169.30 10.00 2015 75.20 106.38 93.50 68.50 174.88 162.00 12.00 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 the launch of the current share class. 3 The share price at 30 September 2019 has been adjusted to add back the dividend of 4.50p per share paid on 18 October 2019, as the listed share price was quoted ex this dividend at the year end. 4 Dividends paid and proposed per share in respect of 2019 include the second interim dividend of 4.50 pence referred to below. Dividends paid post year end in respect of the year ended 30 September 2019 A second interim dividend of 4.50 pence per share, comprising 0.50 pence from income and 4.00 pence from capital was paid to shareholders on 18 October 2019. CHAIRMAN'S STATEMENT I am pleased to present the Annual Report of the Company for the financial year ended 30 September 2019. Overview This has been a year of good performance by the Company. Returns to Shareholders have been higher than the previous year, due primarily to profitable realisations of portfolio companies and increased valuations in the portfolio supported by a solid income return. During the year, the Company made investments into three new portfolio companies (plus two new investments following the year end), three existing portfolio companies and fully realised its investment in two existing portfolio companies. Further details of this investment activity can be found under the 'Investment portfolio' section of my statement below and in the Investment Adviser's Review. Including two made after the period end, eighteen new growth capital investments have now been completed by the Company in accordance with its investment policy, as revised and subsequently approved by Shareholders in response to the VCT legislation introduced by the Finance (No.2) Act 2015. During the year, additional changes to VCT legislation were enacted, further details of which can be found under the 'Industry and regulatory developments' section of my statement below. The Investment Adviser continues to report a healthy pipeline of growth capital opportunities. Meanwhile, the mature portfolio constructed under the previous VCT rules has continued to perform steadily. Subscription Offer On 25 October 2019 the Company launched a subscription offer for new shares. The Offer, launched in conjunction with other Mobeus advised VCTs, sought to raise £5.00 million with an over-allotment facility of an additional £5.00 million. At 4 December, £7.31 million worth of applications had been received following the utilisation of the over-allotment facility on 14 November 2019. Your Board regards it as important that the Company maintains adequate levels of liquidity to pursue its investment policy, and the amount sought reflects that objective. Performance The Company's NAV per share increased by 7.4% for the year ended 30 September 2019 (2018: 3.2%), before deducting dividends paid during the year. This NAV total return for the year was primarily attributable to the sale of the Company's investments in Plastic Surgeon and ASL Technology, an uplift in the value of the existing portfolio, and another year of good revenue returns, arising principally from income from loan stock investments. As a result of this year's performance, the NAV cumulative total return per share since launch (being the closing net asset value plus total dividends paid to date since launch) increased in the year by 3.1% (2018: 1.4%) from 186.32 pence to 192.12 pence. Using the benchmark of NAV cumulative total return as at 30 September 2019, the Company was ranked 3rd out of 32 VCTs over ten years amongst generalist (including planned exit) VCTs used by the Association of Investment Companies ("AIC") to measure performance. Over the shorter periods of one, three and five years, the VCT was ranked 6th (out of 45 VCTs), and 15th (out of 47 VCTs) and 25th (out of 40 VCTs) respectively. Further details on these alternative performance measures ("APMs") are contained in the Strategic Report within the Annual Report. Dividends Your Board has declared and paid two interim dividends in respect of the year ended 30 September 2019. An interim dividend of 1.50 pence per share was paid on 12 July 2019 and a further interim dividend of 4.50 pence per share was paid after the year end on 18 October 2019. These dividends bring the total paid in respect of the year ended 30 September 2019 to 6.00 pence (2018: 6.00 pence). The Company has met the Board's present annual target for the year and as a result will not be declaring a final dividend. Total dividends paid in respect of the last five years are 55.00 pence per share. Shareholders should note however, that as a result of the changes in the VCT rules that require VCTs to make growth capital investments in younger, smaller companies, which are likely to have a higher risk profile, the Company may find it a challenge to generate a similar, and consistent level of dividends over the medium-term. Your Board will continue to monitor whether the current annual dividend target of 6.00 pence per share remains sustainable in the current investment environment. Investment portfolio The portfolio performed well during the year, increasing in value by 10.0% (2018: 3.6%) on a like-for-like basis. The portfolio achieved net increases over the year of £3.15 million in realised gains and £1.78 million from investments still held. The portfolio was valued at £50.22 million at the year end, representing 0.6% above cost (30 September 2018: £49.40 million at 95.1% of cost). The portfolio movements across the year were as follows: £m Portfolio value at 30 September 2018 49.40 New and follow-on investments 5.08 Disposal proceeds (9.19) Realised gains 3.15 Valuation movements 1.78 Portfolio value at 30 September 2019 50.22 During the Company's financial year, £5.08 million (2018: £6.21 million) was invested across three new companies (2018: four) and three existing portfolio companies (2018: five). Further analysis of investments made can be found in the Investment Adviser's Review. An explanation is also provided within Note 9 to the Financial Statements. New growth capital investments totalling £2.92 million were made into the following companies during the year: ● Grow Kudos, a digital platform for dissemination of research; ● Arkk, a regulatory and reporting requirement service provider; and ● Parsley Box, home delivered, ambient ready meals for the elderly. Follow-on investments totalling £2.16 million were made into: ● Biosite, a provider of workforce management and security services; ● Proactive Investors, a provider of investor media services; and ● MPB Group, an online marketplace for used camera and video equipment. Both new and follow-on investments may require further capital investment as they seek to achieve scale. After the year end, further new investments totalling £2.50 million were made into two companies as follows: ● Active Navigation, a provider of enterprise-level file analysis software; and ● IPV, a developer of media asset management software. Including Active Navigation and IPV, the new growth capital investments made since the VCT rule change have a carrying value of £25.85 million against a cost of £22.85 million, and so form a significant proportion of the portfolio. Cash proceeds totalling £9.19 million for the year were received from portfolio companies that were either sold, repaid loans, or settled other capital proceeds. Of this total, £6.11 million was received as cash proceeds from the sale of Plastic Surgeon and ASL Technology, contributing to an overall multiple of proceeds over the life of the investments of 5.6x and 2.2x respectively and together realising a net gain of £2.38 million over opening valuation. Proceeds of £0.52 million were also received from the partial sale of Master Removers Group, yielding a gain of £0.03 million. Additionally, a further £1.82 million was received as loan repayments and finally, other receipts and a realised gain of £0.74 million was generated arising from deferred consideration from the sale of Entanet in 2017 (contributing to an overall multiple of proceeds over the life of the investment of 2.8x). For the year under review, the portfolio as a whole achieved a net increase of £3.15 million on investments realised. The unrealised portfolio as a whole achieved a net increase of £1.78 million on investments still held, with positive increases from, amongst others, Proactive Group (see further explanation in Investment Adviser's Review), Auction Technology Group, and MPB Group which were partially offset by valuation falls notably in Aquasium Technology, Bourn Bioscience and Wetsuit Outlet. Industry and regulatory developments As mentioned last year, a number of changes to the VCT Scheme were introduced with the enactment of the Finance Act 2018. The main changes require 30% of any funds raised in the Company's accounting period to be invested in Qualifying Investments within 12 months of the end of that accounting period, and the Company's required level of Qualifying Investments as a share of its Total investments increased from 70% to 80% with effect from 1 October 2019. The Company remained compliant throughout the year and to the date of this report. These changes, together with other more minor rule changes, are not expected to impact the Company's investment strategy, albeit these are further rules that the Company must meet to maintain its VCT qualifying status. Investment Policy revision Shareholders approved the changes to the Company's Investment Policy at the Annual General Meeting held on 6 February 2019. The changes brought the Policy into line with the new VCT regulations. Share Premium Account At the Annual General Meeting held on 6 February 2019, Shareholders also gave their authority for the Company to seek the Court's permission to cancel the share premium account and capital redemption reserve. On 30 July 2019, the High Court of Justice Chancery Division confirmed the cancellations of the amount standing to the credit of the share premium account and capital redemption reserve, thus increasing the Company's special reserve which can be used to facilitate distributions, share buybacks and other corporate purposes. Dividend Investment Scheme As announced on 18 December 2018, the Board decided to suspend the Company's Dividend Investment Scheme ("the Scheme") and since this date all dividends have been paid as cash. The Scheme had historically been considered a practical and cost effective way for the Company to retain cash for investment and operating purposes. However, as both current and projected liquidity levels were deemed to be sufficient over the medium term, the Board considered in the Autumn of 2018 that the Scheme should be suspended. Following a further review, the Board believes that it would be beneficial for the Company and for Shareholders for the Scheme to be recommenced with effect from the close of the Company's AGM on 12 February 2020. From this date, those participants in the Scheme will have their dividends reinvested to purchase new shares in the Company. As part of the Board's consideration in recommencing the scheme, it has carried out a review of the Scheme terms and conditions ("Scheme Rules"). The Board has decided to amend the Scheme Rules so that any new shares will be issued at the latest published NAV per share, as is current market practice, rather than as previously, at the higher of 70% of NAV per share or the mid-market price per share which, in practice, resulted in shares being issued at an effective discount to NAV of circa 10%. In addition, there are a number of other technical, regulatory and clarificatory changes being made to the Scheme Rules. These changes will apply to new participants from today and from the close of the Company's Annual General Meeting on 12 February 2020 in respect of existing participants. All existing Scheme participants will be notified of the changes and given the opportunity to remain or withdraw from the Scheme. Any Shareholders that are not currently participants of the Scheme may visit investors.mobeus.co.uk/vct-investors/the-income-and-growth-vct/dividends and sign up to the Scheme. Succession Planning After the year end, on 18 October 2019, Colin Hook resigned as the Chairman and a Director of the Board, due to personal circumstances. I have become Chairman in the meantime as explained below. On behalf of the Board, I record our great appreciation of Colin's substantial contribution to the Company's affairs over many years. He will be greatly missed. The Board is pleased to have appointed a new Director and Chairman of the Audit Committee and the Nomination and Renumeration Committee, Justin Ward, on 12 November 2019, succeeding me in both these roles. Justin has extensive experience in private equity and venture capital investment and we are confident that he will make a very positive contribution to the Company. Shareholders should be aware that the Board is seeking to appoint a new Chairman over the coming months. After a period of handover to both the new Chairman and Justin, it is my intention to retire from the Board in 2020. Shareholder Event The Investment Adviser holds an annual VCT event for Shareholders in central London. These events include presentations on the Mobeus advised VCTs' investment activity and performance. We have been pleased to receive positive comments from those attending in previous years. The next event will be held at the National Gallery in central London on Tuesday, 4 February 2020. This is a new venue for the event, though there will remain separate daytime and evening sessions as in previous years. Shareholders were sent an invitation to this event with further details in October. If you have not replied to the invitation, but would like to attend, please visit the website at www.mobeus.co.uk/shareholder-event and complete the short registration form to register. For alternative options, please see the shareholder information section within the Annual Report. The Board looks forward to meeting all Shareholders able to join them at the event. Outlook Your Board considers that your Company is well positioned, with a portfolio still including relatively mature investments providing an income return, and an increasing proportion of younger, growth capital companies seeking to achieve scale. The strong result achieved for the year reflects growth and valuation increases in both elements of the portfolio, underpinned by two profitable realisations. Notwithstanding the uncertainties surrounding the upcoming general election and the UK's exit from the European Union, there is an encouraging level of activity amongst early stage companies seeking further investment to help them grow. As has already been stated, there is a healthy pipeline of potential new investments although, with significant funding available across the VCT sector as a whole, leading to upwards pressure on entry prices, it is increasingly important to identify the most attractive opportunities and to work with potential investee businesses to facilitate the optimal operating and financing structures to foster their growth and to deliver attractive returns. Your Board reminds Shareholders however, that investing in earlier stage companies does involve increased risk and those that succeed often take longer to achieve scale. Positive returns may, therefore, take longer to emerge and may be more volatile. It is likely that unsuccessful investments will emerge sooner than successful investments and so financial progress may be slower initially. In the longer term, this should be offset by more significant gains. The strong start to the Company's fundraising indicates encouraging support for the Board's strategy and will provide the Company with further capital with which to seek attractive returns for Shareholders. Finally, I would like to thank all of our Shareholders for their continuing support. Jonathan Cartwright Chairman 6 December 2019 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 I&G 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 There remains a strong demand for growth capital investment and Mobeus is reviewing several interesting investment opportunities. It is expected that a number of new and follow-on investments will be undertaken in the short to medium-term. Portfolio review The portfolio's activity in the year is summarised as follows: 2019 2018 2017 £m £m £m Opening portfolio value 49.40 48.09 54.37 New and further investments 5.08 6.21 5.30 Disposal proceeds (9.19) (6.58) (14.73) Net realised gains 3.15 1.11 3.88 Valuation movements 1.78 0.57 (0.79) Portfolio value at 30 September 50.22 49.40 48.03 This has been a year of progress within the portfolio with three investments into new growth capital businesses totalling £2.92 million, three existing portfolio companies receiving follow-on funding totalling £2.16 million, and net cash proceeds received of £9.19 million, primarily from two realisations and loan repayments. Further details are provided later in this Review. The past year's investment and divestment activity has increased the proportion of the portfolio comprised of growth capital investments to 59.2% at the year end, representing £29.72 million of the total portfolio carrying value of £50.22 million.  After the year end, the Company invested a further £2.50 million into two new portfolio companies, increasing this ratio to 61.1% on a pro-forma basis.  To date, a total of £23.02 million has been invested in growth capital companies since the introduction of the new VCT regulations in 2015. Details of the valuation movements for each investee company are provided at the end of this Investment Adviser's Review. The portfolio's contribution to the overall results of the VCT is as follows Investment Portfolio Capital Movement 2019 £m 2018 £m Increase in the value of unrealised investments 6.69 5.91 Decrease in the value of unrealised investments (4.91) (5.34) Net increase in the value of unrealised investments 1.78 0.57 Realised gains 3.15 2.23 Realised losses - (1.12) Net realised gains in the year 3.15 1.11 Net investment portfolio movement in the year 4.93 1.68 Valuation changes of portfolio investments still held The carrying value of the existing portfolio increased by £1.78 million during the year. This net increase in the value of the portfolio of investments was due to increases in individual valuations of £6.69 million outweighing reductions in individual valuations of £(4.91) million. The principal contributors to the valuation increases of £6.69 million were: Proactive Group £1.50 million, Auction Technology Group £1.46 million and MPB Group £1.20 million. Auction Technology Group, which the VCT part realised in 2014, is trading well ahead of budget with growth showing in all areas of its business. MPB Group has grown its revenues substantially and, in July, secured a £9.00 million further investment at a higher valuation, of which £2.00 million was provided by the Mobeus advised VCTs. A small number of new growth investments (such as Proactive Group), have shown initial uplifts from cost, due in large part to the structure of the Company's investment, but, in some cases, also due to the underlying investee company performance. Proactive Group has made consistent positive progress in all its markets since investment. The principal driver of the value increase over the period however is the preference structure of the investment which allocates a greater share of economic value to the VCTs at the current stage of the business' development. The main reductions within the total valuation decreases of £(4.91) million were as follows: ● Aquasium £(0.83) million; ● Bourn Bioscience £(0.80) million; ● Wetsuit Outlet £(0.67) million; ● SuperCarers £(0.65) million; and ● Redline £(0.41) million Aquasium has underperformed for the year and is having a slow-down in conversion of its sales pipeline, particularly as a result of a slow-down in global trade. Bourn has now opened its new facility in Essex but this will take time to reach normal trading levels. Over the medium-term the company has a strong brand and retains a strategic position in the market. Wetsuit Outlet continues to have a disappointing period post investment, although it is anticipated that measures recently implemented to restore margins will soon begin to improve profitability. Redline's revenues have been unpredictable and sales in recent months have been lower than planned, which has impacted valuation. Finally, SuperCarers is performing behind plan and in response is undertaking a restructure of its cost base. Realised gains from sales of investments The Company achieved net realised gains on the sale of investments of £3.15 million over their value at the start of the financial year. The Company realised its investments in ASL Technology and Plastic Surgeon during the period under review, generating realised gains in the period of £1.89 million and £0.49 million respectively. Total proceeds received over the life of each investment contributed to a multiple over their original cost of 2.2x for the sale of ASL Technology and 5.6x for Plastic Surgeon. The Company also made a part disposal of Master Removers Group realising £0.52 million in proceeds and a gain of £0.03 million. Finally, the Company achieved a gain of £0.74 million arising from the disposal of Entanet in 2017, increasing the final return on cost from this investment to 2.8x. In addition to deferred consideration receipts and proceeds from disposals of investments referred to above, the Company also received loan stock repayments of £1.82 million. Investment portfolio yield and capital repayments During its financial year, the Company received the following amounts in loan interest and dividend income: Investment Portfolio Yield 2019 £m 2018 £m Interest received in the year 2.64 2.51 Dividends received in the year 0.26 0.42 Total portfolio income in the year 2.901 2.93 Portfolio value at 30 September 50.22 49.40 Portfolio Income Yield (Income as a % of Portfolio value at 30 September) 5.8% 5.9% 1 Total portfolio income in the year is generated solely from investee companies within the portfolio.  See Note 3 of the Financial Statements for all income receivable by the Company. New investments in the year A total of £2.92 million was invested into three new investment during the year as detailed below: Company Business Date of Investment Amount of new investment (£m) Grow Kudos Platform for the dissemination of research November 2018 0.47 Grow Kudos is an online platform which provides and promotes research dissemination. The Kudos product was developed to allow researchers to increase the impact and readership of their work and to track and analyse distribution both within academia and across broader audiences. The investment will be used principally to increase its resources to support sales growth. The company's unaudited accounts for the year ended 31 December 2018 show revenues of £0.64 million and a loss before interest, tax and amortisation of goodwill of £(0.25) million. Arkk Consulting Regulatory and reporting requirement service provider May 2019 1.53 Arkk Consulting (trading as Arkk Solutions) 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. The investment will build on Arkk's reputation and customer base, to target the cloud-based period end reporting market by building the sales and marketing team. The company's audited accounts for the year ended 31 December 2018 show turnover of £3.36 million and a loss before interest, tax and amortisation of goodwill of £(0.34) million. Parsley Box Home delivered, ambient ready meals for the elderly May 2019 0.92 Parsley Box is a UK direct to consumer supplier of home delivered, ambient ready meals for the elderly. 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 aim to contribute to a more independent and healthier lifestyle. The 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 unaudited accounts for the period ended 31 March 2019 show revenues of £3.08 million and a loss before interest, tax and amortisation of goodwill of £(0.50) million. Further investments in existing portfolio companies in the year The Company made further investments totalling £2.16 million into three existing portfolio companies during the year under review, as detailed below: Company Business Date of Investment Amount of new investment (£m) Biosite Workforce management and security services October 2018 0.93 Based in the Midlands, Biosite is a provider of biometric access control and software-based workforce management solutions for the construction sector. The business is growing significantly and this investment will support the further development of software and hardware products. The company's audited accounts for the year ended 31 July 2018 show turnover of £9.76 million and a loss before interest, tax and amortisation of goodwill of £(0.64) million. Proactive Investors Investor media services October 2018 0.45 Proactive Investors specialises in timely multi-media news provision, events organisation, digital services and investor research. Proactive provides breaking news, commentary and analysis on hundreds of small-cap listed companies and pre-IPO business across the globe. This planned follow-on investment will enable Proactive to continue to expand its services into the US market, which is the largest global market for investor media services. The company's unaudited accounts for the year ended 30 June 2018 show turnover of £4.75 million and a loss before interest, tax and amortisation of goodwill of £(0.31) million. MPB Group Online marketplace for used camera and video equipment Oct, Dec 2018, February 2019 & July 2019 0.78 MPB is Europe's leading online marketplace for used camera and video equipment. Based in Brighton, its custom-designed pricing technology enables MPB to offer both buy and sell services through the same platform and offers a one-stop shop for all its customers. Having expanded into the US (opening a New York office) and German markets as part of the initial VCT investment round, this follow-on investment, alongside funds provided by two other third-party investors, is to support its continued growth plan. Having more than doubled its sales over the last two years, this investment will help drive the company's objective to create a £100m+ turnover internationally diverse and profitable re-commerce business. The company's audited accounts for the year ended 31 March 2019 show turnover of £31.91 million and a loss before interest, tax and amortisation of goodwill of £(1.73) million. New investments after the year end After the year end, the Company made two new investments totalling £2.50 million, as detailed below: Company Business Date of investment Amount of new investment (£m) Active Navigation File analysis software November 2019 1.54 Data Discovery Solutions, trading as Active Navigation, is a file analysis software solution which makes it easier for companies to clean up network drives, respond to new data protection laws and dispose of redundant and out dated documents. Active Navigation's solution is used by significant blue chip customers, particularly those in highly regulated industries such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK. Active Navigation will seek to drive continued growth from its file analysis platform with the recruitment of experienced sales and professional services staff. The company's audited accounts for the year ended 30 June 2018 show revenues of £5.02 million and a profit before interest, tax and amortisation of goodwill of £1.45 million. Company Business Date of investment Amount of new investment (£m) IPV Media Asset Software November 2019 0.96 IPV Limited ("IPV") has developed a media asset management software product called 'Curator', enabling enterprise level customers to receive and search hours of video footage, edit into multiple short clips and broadcast to online video platforms (such as YouTube) and company intranets, in a very short time. IPV's impressive list of blue-chip clients, such as Turner Sports, NASA and Sky, are looking to improve the efficiency in managing their video content. The company has built an impressive senior management team of proven operators and is targeting a media asset management market in the US and UK, worth an estimated £1 billion per annum. The investment will be used to build out a sales and marketing team and to fund lead generation for new direct and partner channels as well as supporting the existing partner network. The company's unaudited accounts for the year ended 31 December 2018 show revenues of £2.25 million and a loss before interest, tax and amortisation of goodwill of £(1.18) million. Realisations during the year The Company realised its investments in ASL Technology and Plastic Surgeon during the year, generating cash proceeds of £6.11 million as detailed below: Company Business Period of investment Total cash proceeds over the life of the investment / Multiple over cost Plastic Surgeon Supplier of snagging and finishing services to the property sector April 2008 to May 2019 £2.27 million 5.6 x cost The Company sold its remaining investment in Plastic Surgeon to Polygon Group for £1.32 million (realised gain in the year: £0.49 million). Over the eleven years this investment was held, it generated proceeds of £2.27 million compared to an original investment cost of £0.41 million which is a multiple on cost of 5.6x and an IRR of 20.5%. ASL Technology Printer and photocopier services December 2010 to June 2019 £5.94 million 2.2 x cost The Company sold its investment in ASL Technology for £4.79 million (realised gain in the year: £1.89 million). Over the eight and a half years this investment was held, it generated proceeds of £5.94 million compared to an original investment cost of £2.72 million, which is a multiple on cost of 2.2x and an IRR of 12.6%. There was a partial realisation of Master Removers Group ("MRG") which generated proceeds of £0.52 million and a realised gain of £0.03 million. Following a reorganisation of MRG's share capital, the Company has increased its equity share from 6.3% to 9.5%. Loan stock repayments and other receipts Loan stock repayments of £1.82 million were received during the year, most notably from Hollydale Management Limited (£0.62 million) and deferred consideration receipts of £0.74 million arising from past realisations. Net realised gains on the three full and partial disposals above of £2.41 million, increased by deferred consideration gains of £0.74 million, equal the total realised gain for the year of £3.15 million. Mobeus Equity Partners LLP Investment Adviser 6 December 2019 Investment Portfolio Summary for the year ended 30 September 2019 Total cost at Total Valuation at Additional investments Total valuation at % of portfolio by value 30-Sep-19 30-Sep-18 30-Sep-19 £ £ £ £ Tovey Management Limited (trading as Access IS) 3,313,932 4,110.232 - 4,144,573 8.3% Provider of data capture and scanning hardware MPB Group Limited 2,043,137 1,885,665 773,943 3,858,515 7.7% Online marketplace for used photographic equipment Virgin Wines Holding Company Limited 2,745,503 3,227,371 - 3,421,474 6.8% Online wine retailer Preservica Limited 2,181,666 2,977,489 - 3,053,749 6.1% Seller of proprietary digital archiving software EOTH Limited (trading as Equip Outdoor Technologies) 1,383,313 2,809,199 - 2,939,441 5.9% Distributor of branded outdoor equipment and clothing including the Rab and Lowe Alpine brands Media Business Insight Holdings Limited 3,666,556 2,469,625 - 2,661,708 5.3% A publishing and events business focused on the creative production industries Pattern Analytics Limited (trading as Biosite) 1,791,938 1,384,696 934,924 2,648,952 5.2% Workforce management and security services for the construction industry Turner Topco Limited (trading as Auction Technology Group (formerly ATG Media)) 1,529,075 1,177,894 - 2,634,378 5.2% SaaS based online market place platform Proactive Group Holdings Inc. 988,390 539,214 449,176 2,486,769 5.0% Provider of media services and investor conferences for companies primarily listed on secondary public markets CGI Creative Graphics International Limited 1,943,948 1,962,334 - 1,930,826 3.8% Vinyl graphics to global automotive, recreation vehicle and aerospace markets Vian Marketing Limited (trading as Red Paddle Co) 1,207,437 1,870,551 - 1,883,950 3.7% Design, manufacture and sale of stand-up paddleboards and windsurfing sails My Tutorweb Limited 1,783,566 1,963,647 - 1,783,566 3.6% Digital marketplace connecting school pupils seeking one-to-one online tutoring Manufacturing Services Investment Limited (trading as Wetsuit Outlet) 3,205,182 2,326,781 - 1,656,308 3.3% Online retailer in the water sports market Arkk Consulting Limited Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements 1,526,007 - 1,526,007 1,546,354 3.1% Tharstern Group Limited 1,454,278 1,569,303 - 1,534,444 3.1% Software based management Information systems for the printing industry Ibericos Etc. Limited (trading as Tapas Revolution) 1,397,386 1,630,329 - 1,512,372 3.0% Spanish restaurant chain I-Dox plc 453,881 1,462,570 - 1,312,563 2.6% Developer and supplier of knowledge management products Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) 464,658 1,926,851 - 1,196,408 2.4% A specialist logistics, storage and removals business Buster and Punch Holdings Limited 725,226 855,330 - 1,176,202 2.3% Industrial inspired lighting and interiors retailer Rota Geek Limited 625,400 625,400 - 1,122,456 2.2% Provider of cloud based enterprise software that uses data driven technologies to help retail and leisure organisations schedule staff Kudos Innovations Limited (trading as Grow Kudos) 472,500 - 472,500 945,000 1.9% Online platform that provides and promotes academic research disseminatiion Vectair Holdings Limited 53,400 684,085 - 935,546 1.9% Designer and distributor of washroom products Parsley Box Limited 925,800 - 925,800 925,800 1.8% Supplier of home delivered, ambient meals for the elderly RDL Corporation Limited 1,441,667 903,731 - 695,008 1.4% Recruitment consultants within the pharmaceutical, business intelligence and IT industries Blaze Signs Holdings Limited 418,281 598,605 - 599,314 1.1% Manufacturer and installer of signs Redline Worldwide Limited 1,129,121 956,894 - 550,430 1.1% Provider of security services to the aviation industry and other sectors Bourn Bioscience Limited 1,610,379 1,153,951 - 349,376 0.7% Management of In-vitro fertilisation clinics Omega Diagnostics Group plc 280,026 350,010 - 263,674 0.5% In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases Aquasium Technology Limited 166,667 1,002,689 - 176,951 0.4% Manufacturing and marketing of bespoke electron beam welding and vacuum furnace equipment Jablite Holdings Limited 498,790 162,366 - 162,366 0.3% Manufacturer of expanded polystyrene products BookingTek Limited 872,646 436,323 - 87,233 0.2% Software for hotel groups Super Carers Limited 649,528 649,528 - - 0.0% Online platform that connects people seeking home care with experienced independent carers BG Training Limited                                                                   53,125 26,563 - 26,563 0.1% Technical training business Corero Network Security plc 600,000 9,832 - 2,458 0.0% Provider of e-business technologies Super Carers Limited 649,528 649,528 - - 0.0% Online platform that connects people seeking home care with experienced independent carers Veritek Global Holdings Limited 2,289,859 129,132 - - 0.0% Maintenance of imaging equipment Oxonica Limited 2,524,527 - - - 0.0% International nanomaterials group Racoon International Group Limited 655,851 - - - 0.0% Supplier of hair extensions, hair care products and training NexxtDrive Limited/Nexxt E-drive Limited 487,014 - - - 0.0% Developer and exploiter of mechanical transmission technologies CB Imports Group Limited (trading as Country Baskets) 175,000 - - - 0.0% Importer and distributor of artificial flowers, floral sundries and home decor products Biomer Technology Limited 137,170 - - - 0.0% Developer of biomaterials for medical devices Hemmels Limited 30,180 - - - 0.0% Company specialising in the sourcing, restoration, selling and servicing of high price classic cars Disposed in year ASL Technology Holdings Limited - 2,904,306 - - 0.0% Printer and photocopier services The Plastic Surgeon Holdings Limited (formerly TPSFF Holdings Limited) - 829,934 - - 0.0% Supplier of snagging and finishing services to the property sector Hollydale Management Limited - 621,600 - - 0.0% Company seeking to carry on a business in the food sector Backhouse Management Limited - 300,800 - - 0.0% Company seeking to carry on a business in the motor sector Barham Consulting Limited - 300,800 - - 0.0% Company seeking to carry on a business in the catering sector Creasy Marketing Services Limited - 300,800 - - 0.0% Company seeking to carry on a business in the textile sector McGrigor Management Limited - 300,800 - - 0.0% Company seeking to carry on a business in the pharmaceutical sector Total 49,902,010 49,397,230 5,082,350 50,224,727 100.0% For further information on the Investment Portfolio, please see the Annual Report and Financial Statements. 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 principal risks faced by the Company. This includes a key risk management review which takes place at each quarterly Board meeting. The principal risks identified by the Board, a description of the possible consequences of each risk and how the Board manages each risk are set out below. 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 has adapted to these new requirements and put in place appropriate resource to identify and make suitable investments. 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. Risk Possible consequence How the Board manages risk Investment and strategic 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. Furthermore, as the securities of such smaller companies held by the Company are unquoted, they 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 and review of the Investment portfolio on a regular basis. ●      The Board seeks to ensure the Company has an adequate level of liquidity at all times. 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 and future dividends paid by the Company being subject to tax. 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. ●      The Board receives regular reports from its VCT Status Adviser who has been retained by the Board to monitor the VCT's compliance with the VCT Rules. Regulatory The Company is required to meet its legal and regulatory obligations as a VCT, a listed company and its own Alternative Investment Fund Manager (AIFM). Failure to comply might result in suspension of the Company's Stock Exchange listing, financial penalties or a qualified audit report or a loss of the Company's status as a VCT. Furthermore, changes to the UK VCT legislation or the State-aid rules could have an adverse effect on the Company's ability to achieve satisfactory investment returns. ●      Regulatory and legislative developments are kept under review by the Board. Economic and political Events such as the impact of Brexit, 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 VCT's investments, as well as affecting the Company's own share price and its discount to net asset value ●      The Board monitors (i) the portfolio as a whole to ensure that the Company invests in a diversified portfolio of companies and  (ii) developments in the macro-economic environment such as movements in interest rates or general fluctuations in stock markets. 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. ●      The Board carries out an annual review of the internal controls in place, reviews the risks facing the Company at each quarterly Board meeting and receives reports by exception. ●      It reviews the performance of the service providers annually and has obtained assurance that such providers have controls in place to reduce the risk of breaches of their cyber security. 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. 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. 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. For and on behalf of the Board Jonathan Cartwright Chairman

FINANCIAL STATEMENTS Income Statement For the year ended 30 September 2019 Year ended 30 September 2019 Year ended 30 September 2018 Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Net unrealised gains on investments 9                     -             1,785,897                  1,785,897                     -             570,022                  570,022 Net gains on realisation of investments 9                     -          3,146,216               3,146,216                     -          1,113,464               1,113,464 Income 3      3,130,823                       -                 3,130,823      3,093,838                       -                 3,093,838 Investment Adviser's fees 4a (446,274) (1,338,822) (1,785,096) (428,311) (1,284,934) (1,713,245) Investment Adviser's performance fees 4b                     -   - -                     -   (1,119) (1,119) Other expenses (426,840)                       -   (426,840) (455,836)                       -   (455,836) Profit on ordinary activities before taxation      2,257,709           3,593,291               5,851,000      2,209,691           397,433               2,607,124 Tax on profit on ordinary activities 6 (381,993)           381,993                              -   (339,227)           339,227                              -   Profit for the year and total comprehensive income      1,875,716           3,975,284               5,851,000      1,870,464           736,660               2,607,124 Basic and diluted earnings per ordinary share: 7 1.80p 3.80p 5.60p 1.88p 0.74p 2.62p The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains/(losses) 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 January 2017) 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 2019 Company number: 4069483 as at 30 September 2019 as at 30 September 2018 Notes £ £ £ £ £ £ Fixed assets Investments at fair value 9 50,224,727 49,397,230 Current assets Debtors and prepayments 263,116 458,043 Current asset investments 10 29,964,187 31,627,351 Cash at bank and in hand 10 1,498,030 1,284,816 31,725,333 33,370,210 Creditors: amounts falling due within one year (221,981) (183,726) Net current assets 31,503,352 33,186,484 Net assets 81,728,079 82,583,714 Capital and reserves Called up share capital 11 1,033,029 1,054,384 Capital redemption reserve 5,245 33,490 Share premium reserve - 46,473,760 Revaluation reserve 4,652,457 4,102,002 Special reserve 63,751,255 19,655,855 Profit and loss account 12,286,093 11,264,223 Equity shareholders' funds 81,728,079 82,583,714 Basic and diluted net asset value per share Ordinary shares 12 79.12p 78.32p Statement of Changes in Equity for the year ended 30 September 2019 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 (Note a) (Note b) (Note b) For the year ended 30 September 2019 Notes £ £ £ £ £ £ £ £ At 1 October 2018 1,054,384 33,490 46,473,760 4,102,002 19,655,855 8,627,792 2,636,431 82,583,714 Comprehensive income for the year Profit for the year - - - 1,785,897 - 2,189,387 1,875,716 5,851,000 Total comprehensive income for the year - - - 1,785,897 - 2,189,387 1,875,716 5,851,000 Contributions by and distributions to owners Shares bought back (note d) 11 (21,355) 21,355 - - (1,471,131) - -  (1,471,131) Dividends paid 8 - - - - - (3,144,995 (2,090,509) (5,235,504) Total contributions by and distributions to owners (21,355) 21,355 - - (1,471,131) (3,144,995) (2,090,509) (6,706,635) Other movements Cancellation of Share premium Reserve  (note e) - (49,600) (46,473,760) - 46,523,360 - - - Realised losses transferred to special reserve (note f) - - - - (956,829) 956,829 -  - Realisation of previously unrealised gains - - - (1,235,442) - 1,235,442 -  - Total other movements - (49,600) (46,473,760) (1,235,442) 45,566,531 2,192,271 - - At 30 September 2019 1,033,209 5,245 - 4,652,457 63,751,255 9,864,455 2,421,638 81,728,079 Notes a) The Company's special reserve is available to fund buy backs of shares as and when it is considered by the Board to be in the interests of the shareholders, and to absorb any existing and future realised losses and for other corporate purposes. As at 30 September 2019, the Company has a special reserve of £63,751,255, £34,256,969 of which relates to reserves from shares issued on or before 5 April 2014, or that arise from shares issued more than three years ago. Share issues are not distributable under VCT rules if they are within three years of the end of an accounting period in which shares were issued. 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 6 February 2019.􀀀The authority was limited to a maximum number of 15,805,214 shares (this being approximately 14.99% of the issued share capital at the date of the passing of the resolution at the Annual General Meeting held on 6 February 2019).􀀀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 2,135,527 of its own shares at the prevailing market price for a total cost of £1,471,131, which were subsequently cancelled. The difference between the figure shown above of £1,471,131, and that per the Statement of Cash Flows of £1,430,752 is due to a share buyback creditor of £40,379 held at the year end. e) The cancellation of £46,473,760 from the Share Premium Reserve and £49,600 from the Capital Redemption Reserve (as approved at the General Meeting on 6 February 2019 and by the court order dated 30 July 2019) has increased the Company's special reserve out of which it can fund buybacks of shares as and when it is considered by the Board to be in the interests of the shareholders, and to absorb any existing and future realised losses, or for other corporate purposes. f) The transfer of £956,829 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company this year. Statement of Changes in Equity for the year ended 30 September 2018 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 2018 £ £ £ £ £ £ £ £ At 1 October 2017 792,047 14,014 24,099,311 4,020,689 23,215,643 10,134,703 2,072,344 64,348,751 Comprehensive income for the year Profit for the year - - - 570,022 - 166,638 1,870,464 2,607,124 Total comprehensive income for the year - - - 570,022 - 166,638 1,870,464 2,607,124 Contributions by and distributions to owners Shares issued under Offer for Subscription 266,076 - 21,293,047 - (199,395) - -  21,359,728 Dividends re-invested into new shares 15,737 - 1,081,402 - - - -  1,097,139 Shares bought back (19,476) 19,476 - - (1,379,298) - -  (1,379,298) Dividends paid - - - - - (4,143,353) (1,306,377) (5,449,730) Total contributions by and distributions to owners 262,337 19,476 22,374,449 - (1,578,693) (4,143,353) (1,306,377) 15,627,839 Other movements Realised losses transferred to special reserve - - - - (1,981,095) 1,981,095 - - Realisation of previously unrealised gains - - - (488,709) - 488,709 - - Total other movements - - - (488,709) (1,981,095) 2,469,804 - - At 30 September 2018 1,054,384 33,490 46,473,760     4,102,002 19,655,855 8,627,792 2,636,431 82,583,714 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 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 offer 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. 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 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), and 75% of the Investment Adviser 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; and - 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 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 2019 Year ended Year ended 30 September 2019 30 September 2018 Notes £ £ Cash flows from operating activities Profit for the financial year 5,851,000 2,607,124 Adjustments for: Net unrealised gains on investments (1,785,897) (570,022) Net gains on realisations on investments (3,146,216) (1,113,464) Decrease/ (increase) in debtors 117,537 (4,832) Decrease in creditors and accruals (2,124) (574,960) Net cash inflow from operating activities 1,034,300 343,846 Cash flows from investing activities Purchase of investments 9b (5,004,960) (6,290,160) Disposal of investments 9                    9,186,966                    6,579,334 Net cash inflow from investing activities                        4,182,006                        289,174 Cash flows from financing activities Shares issued as part of Offer for subscription                  -                  24,305,938 Equity dividends paid 10 (5,235,504) (4,352,591) Purchase of own shares 12 (1,430,752) (1,461,936) Net cash (outflow)/ inflow from financing activities       (6,666,256)         18,491,411 Net (decrease)/increase in cash and cash equivalents (1,449,950) 19,124,431 Cash and cash equivalents at start of year 29,760,398 10,635,967 Cash and cash equivalents at end of year 28,310,448 29,760,398 Cash and cash equivalents comprise: Cash at bank and in hand 10 1,498,030 1,284,816 Cash equivalents 10 26,812,418 28,475,582

Notes to the Financial Statements for the year ended 30 September 2019 1 Company information The Income and Growth VCT plc is a public limited company incorporated in England, registration number 4069483. The registered office is 30 Haymarket, London, SW1Y 4EX. 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 January 2017) issued by the Association of Investment Companies. The Company has a number of financial instruments which are disclosed under FRS102 s11/12 as shown in Note 16 to the Financial Statements in the Annual Report. 3 Income Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain. When a redemption premium is designed to protect the value of the instrument holder's investment rather than reflect a commercial rate of revenue return the redemption premium is recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended 30 September 2019 has been classified as capital and has been included within gains on investments. 2019 2018 £ £ Income from bank deposits 48,292 43,178 Income from investments -  from equities 259,666 424,491 -  from OEIC funds 179,705 108,807 -  from loan stock 2,623,375 2,497,742 -  from interest on preference share dividend arrears 17,423 11,881 3,080,169 3,042,921 Other income 2,362 7,739 Total income 3,130,823 3,093,838 Total income comprises Revenue dividends received 439,371 533,298 Interest 2,689,090 2,552,801 Other income 2,362 7,739 Total Income 3,130,823 3,093,838 Income from investments comprises Listed UK securities - 43,335 Listed overseas securities 179,705 108,807 Unlisted UK securities 2,900,464 2,890,779 Total investment income 3,080,169 3,042,921 Total loan stock interest due but not recognised in the year was £630,147 (2018: £445,302) due to uncertainty over its recoverability. 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 2019 2019 2019 2018 2018 2018 £ £ £ £ £ £ Mobeus Equity Partners LLP 446,274 1,338,822 1,785,096 428,311 1,284,934 1,713,245 Under the terms of a revised investment management agreement dated 29 March 2010, Mobeus Equity Partners LLP ("Mobeus") (formerly Matrix Private Equity Partners LLP ("MPEP")) 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 (2018: £150,000) and £170,000 (2018: £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 ("Total expense ratio"). 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 (2018: £nil). With effect from 1 April 2018, the Investment Adviser's fee upon the net funds raised from the over-allotment facility of £10 million under the 2017/18 Offer was reduced to 1.4% from 2.4%, for one year. b)   Investment Adviser's performance fees Revenue Capital Total Revenue Capital Total 2019 2019 2019 2018 2018 2018 Portfolio £ £ £ £ £ £ Mobeus Equity Partners LLP - - - - - - Foresight Group LLP - - - - 1,119 1,119 - - - - 1,119 1,119 Under a Deed of Termination and Variation relating to Performance Incentive Agreements dated 29 March 2010, the Investment Adviser's Incentive Agreement for the former 'O' Share Fund was continued, while the former 'S' Share Fund's Incentive Agreement was terminated.  Under the terms of the pre-merger 'O' Share Fund Incentive Agreement, each of the ongoing Investment Adviser, Mobeus Equity Partners LLP and a former Investment Adviser, Foresight Group LLP ("Foresight") are entitled to a performance fee equal to 20% of the excess of the value of any realisation of an investment made after 30 June 2007, over the value of that investment in an Investment Adviser's portfolio at that date ("the Embedded Value"), which value is itself uplifted at the rate of 6% per annum subject to a High Watermark test. On 30 September 2014, a new incentive fee agreement was signed between the Board and Mobeus, with effect from 1􀀀October 2013, to amend and replace the previous agreement. The previous agreement remained in force, but only with the former adviser, Foresight Group LLP, to whom, for the year ended 30 September 2018, £1,119 was payable. The agreement expired on 10 March 2019. Mobeus waived their right to their portion of the fee, under the previous agreement. Any payment under the new incentive agreement is now 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 this amended agreement 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 amended agreement, any fee payments to Mobeus 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 Mobeus 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 2019 was a 6% uplift on the previous year's Target Return of 150.99 pence, being 160.05 pence. As Cumulative Total NAV return is 151.62 pence per share at the year-end, the Target Return has not been met and therefore no fee is payable (2018: £nil). c)   Offer for Subscription fees 2019 2018 £m £m Funds raised by I&G VCT - 22.01 Offer costs payable to Mobeus at 3.25% of funds raised by I&G VCT - 0.72 Under the terms of an Offer for Subscription, with the other Mobeus advised VCTs, launched on 6 September 2017, Mobeus was entitled to fees of 3.25% of the investment amount received from investors. This amount (for 2018 only) totalled £2.60 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. 2019 2018 £ £ Directors' remuneration (including NIC of £9,710 (2018: £9,796)) (note a)      127,710     127,796 IFA trail commission        70,169       83,890 Broker's fees        12,000       12,000 Auditor's fees  - Audit of company (excluding VAT)        29,213       25,420 -     tax compliance (note b) (excluding VAT)          1,845         1,640 -     audit related assurance services (excluding VAT)          5,125         4,562 VCT monitoring fees        10,800       10,800 Registrar's fees        48,215       56,611 Printing        43,426       50,064 Legal & professional fees (note b)        18,916       15,010 Directors' insurance          7,565         7,842 Listing and regulatory fees        32,321       51,283 Sundry        19,536         8,918 Other expenses      426,840       455,836 a):  See analysis in Directors' Remuneration table, which excludes the NIC above. The key management personnel are the three non-executive directors. The Company has no employees. b):  The audit-related assurance services are in relation to the review of the Financial Statements within the Company's Half Year Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence is maintained. In this regard, while iXBRL services are carried out by the auditor, the majority of compliance tax services are carried out by another firm, so are included within legal and professional fees. 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 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. 2019 2019 2019 2018 2018 2018 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ a)  Analysis of tax charge: UK Corporation tax on profits/(losses) for the year 381,993 (381,993) - 339,227 (339,227) - Total current tax charge/(credit) 381,993 (381,993) - 339,227 (339,227) - Corporation tax is based on a rate of 19.0% (2018: 19.0%) b) Profit on ordinary activities before tax 2,257,709 3,593,291 5,851,000 2,209,691 397,433 2,607,124 Profit on ordinary activities multiplied by main company rate of corporation tax in the UK of 19.0% (2018: 19.0%) 428,965 682,725 1,111,690 419,841 75,512 495,353 Effect of: UK dividends (49,337) - (49,337) (80,653) - (80,653) Unrealised gains not taxable - (339,320) (339,320) - (108,304) (108,304) Realised gains not taxable - (597,781) (597,781) - (211,558) (211,558) Unrelieved expenditure 2,365 - 2,365 39 - 39 Losses utilised - (127,617) (127,617) - (94,877) (94,877) Actual current tax charge 381,993 (381,993) - 339,227 (339,227) - 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 (2018: £nil). There is an unrecognised deferred tax asset of £766,000 (2018: £880,000). 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 2019 2018 £ £ Total earnings after taxation: 5,851,000 2,607,124 Basic and diluted earnings per share (note a)                             5.60p                             2.62p Revenue profit from ordinary activities after taxation 1,875,716 1,870,464 Basic and diluted revenue earnings per share (note b)                             1.80p                             1.88p Net unrealised capital gains on investments 1,785,897 570,022 Net realised capital gains on investments 3,146,216 1,113,464 Capitalised Investment Adviser fees and performance fees less taxation (956,829) (946,826) Total capital return 3,975,284 736,660 Basic and diluted capital earnings per share (note c)                             3.80p                             0.74p Weighted average number of shares in issue in the year 104,575,505 99,602,770 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 return after taxation divided by the weighted average number of shares in issue. c) Capital earnings per share is the total capital return 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 2019 2018 Final Income 2017 0.50p 15 February 2018 -           470,185 Final Capital 2017 2.50p 15 February 2018 -         2,350,933 Interim Income 2018 0.80p 21 June 2018 -           843,492 Interim Capital 2018 1.70p 21 June 2018 -         1,792,420 Final Income 2018 1.00p 15 February 2019           1,049,870 -  Final Capital 2018 2.50p 15 February 2019         2,624,676 -  Interim Income 2019 1.00p 12 July 2019           1,040,639 -  Interim Capital 2019 0.50p 12 July 2019         520,319 -  Previous dividends not claimed within the statutory period - (7,300) 5,235,504           5,449,730* *  For the year ended 30 September 2018: £5,449,730 disclosed above differs to that shown in the Condensed Statement of Cash Flows of £4,352,591 due to £1,097,139 of new shares issued as part of the Company's Dividend Investment Scheme ("DIS"). 2019 2019 2019 2018 2018 2018 Proposed distribution to equity holders at the year end Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Final dividend for the year ended 30 September 2018 of 1.00p (income), 2.50p (capital) per ordinary share - - - 1,054,384 2,635,959 3,690,343 Second interim dividend for the year ended 30 September 2019 of 0.50p (income), 4.00p (capital) per ordinary share 519,137 4,153,095 4,672,232 - - - 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. 2019 2018 £ £ Revenue available by way of dividends for the year 1,875,716 1,870,464 Interim income dividend for the year - 1.00p (2018: 0.80p) 1,040,639 843,492 Proposed final income dividend for the year - 1.00p 1,054,384 Second interim income dividend for the year - 0.50p 519,137 - Total income dividends for the year 1,559,776 1,897,876 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.  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 in accordance with the following rules, 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 light of more recent events or changes in the market performance of the investee company. The valuation bases used are the following: a)         a multiple basis. The investment 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 and amortisation of goodwill, 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: b)         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 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, discounted cash flow or net asset valuation or realisation proceeds basis 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 in to 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 prices. - Level 3 - Fair value is measured using valuation techniques using inputs that are not based on observable market data. 2019 2018 £ £ Traded on AIM 1,578,695 1,822,412 Unquoted equity shares 25,772,163 20,758,488 Unquoted preference shares 19,247 368,541 Loan stock 22,854,622 26,447,789 Total 50,224,727 49,397,230 Brought forward net unrealised gains now realised 1,235,442 488,709 Realised gains during the year 3,185,889 1,168,917 Transaction costs (39,673) (55,453) Total realised gains over cost 4,381,658 1,602,173 Unrealised gains for the year 1,785,897 570,022 Total realised and unrealised gains 6,167,555 2,172,195 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 2018 1,333,907 24,937,303 24,718 25,636,366 51,932,294 Permanent impairment at 30 September 2018 (note d) (500,000) (6,019,699) - (117,367) (6,637,066) Unrealised gains at 30 September 2018 988,505 1,840,884 343,823 928,790 4,102,002 Valuation at 30 September 2018 1,822,412 20,758,488 368,541 26,447,789 49,397,230 - Purchases at cost (note b) - 3,997,926 - 1,084,424 5,082,350 Sale proceeds (note a) - (4,290,952) (341,620) (4,554,394) (9,186,966) Realised gains on investments (note a) - 3,146,216 - - 3,146,216 Unrealised (losses)/gains on investments (note c) (243,717) 2,160,485 (7,674) (123,197) 1,785,897 Valuation at 30 September 2019 1,578,695 25,772,163 19,247 22,854,622 50,224,727 Cost at 30 September 2019 1,333,907 25,155,824 24,138 23,388,141 49,902,010 Permanent impairment at 30 September 2019 (note d) (500,000) (3,712,373) - (117,367) (4,329,740) Unrealised gains/(losses) at 30 September 2019 744,788 4,328,712 (4,891) (416,152) 4,652,457 Valuation at 30 September 2019 1,578,695 25,772,163 19,247 22,854,622 50,224,727 A full breakdown of the increases and decreases in unrealised valuations of the portfolio is seen in the Investment Portfolio Summary in the Annual Report. 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 2018 Realised gain in year £ £ £ £ The Plastic Surgeon Holdings Limited Realisation 40,877 1,320,923 829,934 490,989 ASL Technology Holdings Limited Realisation 2,722,106 4,791,073 2,904,306 1,886,767 Master Removers Group Part realisations 217,525 514,868 481,710 33,158 Entanet Holdings Limited Deferred Consideration - 735,302 - 735,302 Hollydale Management Limited Realisation 994,560 621,600 621,600 - Backhouse Management Limited Realisation 782,080 300,800 300,800                                   - Barham Consulting Limited Realisation 782,080 300,800 300,800 - Creasy Marketing Services Limited Realisation 782,080 300,800 300,800 - McGrigor Management Limited Realisation 782,080 300,800 300,800 - Newquay Helicopters (2013) Limited Realisation 9,246 - - - 7,112,634 9,186,966 6,040,750 3,146,216 Note b) The purchases at cost figure shown above of £5,082,350 differs from the figure shown in the Statement of Cash Flows of £5,004,960, by £77,390. These funds were included in Debtors at the previous year end when they were held in a solicitor's client account in advance of an investment that completed in October 2018. Note c) Within net unrealised gains of £1,785,897 for the year, the significant increases in value compared to last year were as follows: £1,498,379 in Proactive Group Holdings Inc, £1,456,484 in Turner Topco Limited (trading as Auction Technology Group), £1,198,907 in MPB Group Limited, £497,056 in Rota Geek  Limited and £472,500 in Kudos Innovations Limited. These gains were partially offset by unrealised falls in valuation compared to last year, including:  £825,738 in Aquasium Technology Limited, £804,575 in Bourn Bioscience Limited, £670,473 in Manufacturing Services Investment Limited (trading as Wetsuit Outlet), £649,528 in Super Carers Limited, £406,464 in Redline Worldwide Limited, £349,090 in BookingTek Limited and £248,733 in Master Removers Group 2019 Limited. The decrease in unrealised valuations of the loan stock investments above reflect the changes in the entitlements to loan premiums, and/or in the underlying enterprise value of the investee company. The decrease does not arise from assessments of credit risk or market risk upon these investments. Note d) During the year, permanent impairments of the cost of investments have decreased from £6,637,066 to £4,329,740. This write-back of £2,307,326 is due to the disposal of six investee companies in the period. Provisions and write-offs against unlisted investments The amounts provided below cost at the end of the year or written-off against unlisted investments were as follows: Total Provisions at end of year Net write-offs/ (write-backs) in year Financial Year £ £ 2019 16,001,495 (2,307,326) 2018 16,029,509 38,426 2017 13,528,607 2,403,079 2016 11,500,860 (1,115,371) 2015 9,793,793 65,779 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 2019 2018 £ £ OEIC Money market funds 26,812,418 28,475,582 Cash equivalents per Statement of Cash Flows 26,812,418 28,475,582 Bank deposits that mature after three months 3,151,769 3,151,769 Current asset investments 29,964,187 31,627,351 Cash at bank 1,498,030 1,284,816 11 Called up share capital 2019 2018 £ £ Allotted, called-up and fully paid: Ordinary Shares of 1p each: 103,302,857 (2018: 105,438,384) 1,033,029 1,054,384 1,033,029 1,054,384 During the year, the Company purchased 2,135,527 (2018: 1,947,624) of its own ordinary shares for cash (representing 2.0% (2018: 2.5%) of the ordinary shares in issue at the start of the year) at the prevailing market price for a total cost of £1,471,131 (2018: £1,379, 298). The shares bought back were subsequently cancelled. The difference between the figure of £1,471,131 and that per the Statement of Cash Flows of £1,430,752 is due to a share buyback creditor of £40,379 held at the year end. Under the terms of the Dividend Investment Scheme ("DIS") (currently suspended) a total of 1,573,716 ordinary shares were allotted during the year to 30 September 2018 for a total consideration of £1,097,139. For further details of the future of the DIS scheme see the Chairman's Statement above. 12 Basic and diluted net asset value per share 2019 2018 Net assets £81,728,079 £82,583,714 Number of shares in issue 103,302,857 105,438,384 Basic and diluted net asset value per share 79.12p 78.32p 13 Post balance sheet events On 1 November 2019, a new investment of £1.54 million was made into Data Discovery Solutions Limited (trading as Active Navigation).  On 29 November 2019, a new investment of £0.96 million was made into IPV Limited. 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 2019 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, Mobeus Equity Partners LLP, 30 Haymarket (4th floor), London SW1Y 4EX or by email: [e-mail]. 16 Annual General Meeting The Annual General Meeting of the Company will be held at 11.00 am on Wednesday, 12 February 2020 at The Clubhouse, 8 St James's Square, London, SW1Y 4JU. Contact details for further enquiries Robert Brittain at Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail to [e-mail]. Mark Wignall at Mobeus Equity Partners LLP (the Investment Adviser) on 020 7024 7600 or by e-mail 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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