Half-year Report

RNS Number : 7577M

Income & Growth VCT (The) PLC

25 May 2022

 

THE INCOME & GROWTH VCT PLC

LEI: 213800FPC15FNM74YD92

UNAUDITED HALF-YEAR RESULTS FOR THE SIX MONTHS TO 31 MARCH 2022

The Income & Growth VCT plc ("the Company") today announces its Half-Year results for the six months to 31 March 2022. You may, in due course, view the Half-Year Report, comprising the Unaudited Condensed Financial Statements of the Company by visiting www.incomeandgrowthvct.co.uk.

Financial Highlights

As at 31 March 2022: Net assets: £127.65 million Net asset value ("NAV") per share: 98.79 pence

Results for the six months to 31 March 2022:

· Net asset value ("NAV") total return ¹ per share was 2.3%.

· Share price total return1 per share was 1.6%.

· The Board has declared an interim dividend in respect of the current year of 4.00 pence per share to be paid to Shareholders on 8 July 2022.

· The Company made one new investment of £0.81 million and three follow-on investments totalling £2.44 million.

· Proceeds of £6.24 million were received from realisations, generating net realised gains of £1.21 million.

1 Alternative Performance Measure ("APM").  See Glossary of Terms in the Half-Year Report.

PERFORMANCE SUMMARY

The table below shows the recent past performance of the Company's existing class of shares for each of the last five years, and the current year to date.

Reporting date Net assets NAV per Share Share  Price1 Cumulative dividends paid per share Cumulative total return per share to shareholders2 Dividends per share paid and proposed in respect of each year (NAV basis) (Share price basis) As at (£m) (p) (p) (p) (p) (p) (p) 31 March 2022 127.65 98.79 90.50 140.50 239.29 231.00 4.003 30 September 2021 119.09 100.45 93.00 136.50 236.95 229.50 9.00 30 September 2020 83.13 70.06 59.50 131.50 201.56 191.00 14.00 30 September 2019 81.73 79.12 75.50 ⁴ 113.00 192.12 188.50 6.00 30 September 2018 82.58 78.32 69.50 108.00 186.32 177.50 6.00 30 September 2017 64.35 81.24 73.00 102.50 183.74 175.50 21.00

1 Source: Panmure Gordon & Co (mid-market price). 2   Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (share price basis) plus cumulative dividends paid since launch of the current share class. 3   An interim dividend of 4.00 pence per share, referred to in the Financial Highlights above, is payable to Shareholders on 8 July 2022. 4 The share price at 30 September 2019 has been adjusted to add back the dividend of 4.50 pence per share paid on 18 October 2019, as the listed share price was quoted ex this dividend at this year-end.

Detailed performance data, including a table of dividends paid to date for all share classes and fundraising rounds, is shown in the Performance Data appendix in the Half-Year Report. The tables, which give information by allotment date on NAVs and dividends paid per share, are also available on the Company's website at www.incomeandgrowthvct.co.uk where they can be accessed by clicking on "table" under "Reviewing the performance of your investment" on the home page.

Chairman's Statement

I present the Company's Half-Year Report for the six months to 31 March 2022. Overview At the time of the publication of the Company's Annual Report in December 2021, I was able to report on the Company's robust performance over what was a time of material market volatility. The first six months of the Company's financial year has largely seen a continuation of this environment, with the portfolio generating a 2.3% NAV total return for the period against a backdrop of ongoing global uncertainty. Although the period was marked by many challenges, the portfolio proved to be resilient and adaptive in facing them. The threat from global supply issues in logistics, materials and labour resulting from COVID-19 disruption is expected to remain for some months, and the unfolding geopolitical events and instability relating to Russia's brutal aggression in Ukraine has compounded uncertainties. A more challenging environment is expected in the near future. Inevitably, this has combined with expectation of an increased risk free return on capital and, arguably, a more realistic assessment of risk in public market valuations, especially for growth and technology stories and generated an overarching negative market sentiment. This has translated into material falls in AIM market valuations and sector PE multiples which impacted overall portfolio value towards the latter stages of the period. However, for the most part, your Company's largely service and software-based portfolio has continued to trade well. M&A activity has also remained buoyant and the Investment Adviser continues to see a healthy deal flow. The Company completed its first combined new investment across all the Gresham House VCTs in February, deploying £0.81 million into Proximity Insight. Over the six-month period, the Company deployed a total of £3.25 million of investment capital and generated £6.24 million in realisation proceeds from investment activity. In that time, it added one new investment to its portfolio, realised one investment and provided follow-on funding into three existing portfolio companies. On 20 January 2022, the Company launched an Offer for Subscription alongside the three other Mobeus VCTs ("Offers") and the Board was very pleased to see that unprecedented demand meant that the target of £10 million was reached in less than 24 hours, at which point no further applications were accepted. It was gratifying that approximately half of the applications received were from existing Shareholders in the Company. The subsequent allotment of shares has now bolstered the Company's capital to deploy in new and exciting investment opportunities. Further details of this are set out later in my statement. Performance The Company's NAV total return per share was 2.3% for the six months to  31 March 2022 (2021: 35.2%), and the share price total return was 1.6% (2021: 31.9%). The difference between the NAV total return and share price total return figures above arises principally due to the timing of NAV announcements which are usually made retrospectively. This Half-Year performance represents a modest return for Shareholders during the period when many markets have seen declines. Your Board therefore remains satisfied with the way in which the portfolio companies have been able to deal with the challenges faced over the period. The Company's resilient performance was bolstered primarily by a combination of unrealised gains in the value of investments still held such as Preservica, MBI and MRG, as well as the notable exit of Red Paddle, generating a realised gain in the period of £1.20 million which contributed to a multiple on original cost over the life of that investment of 5.4x. Investment portfolio In spite of market headwinds, the portfolio has demonstrated healthy performance in the first six months of the Company's financial year. The overall value increased by £4.20 million (2021: £29.66 million), or 4.8% (2021: 58.3%) on a like-for-like basis, compared to the opening portfolio value at 1 October 2021 of £88.15 million. This increase comprised a net unrealised uplift in portfolio valuations of £2.99 million and £1.21 million in net realised gains, over the period. At the period-end, the portfolio was valued at £89.36 million after taking account of investments purchased and sold in the period, together with the net realised and unrealised gains referred to above. The portfolio may present opportunities for further investment in the future. Strong trading in portfolio companies improved investment values for companies such as MBI (£1.33 million), MRG (£1.13 million), EOTH (£0.96 million) and Bella & Duke (£0.65 million) as well as a significant funding round and positive re-rating of Preservica (£5.86 million) were the primary drivers of unrealised gains for Shareholders during the period. The negative market sentiment meant that the impacts of dips in the trading performance of AIM-listed stocks were magnified and represent some of the portfolio's most significant valuation falls over the period, in Virgin Wines (£4.61 million) and Parsley Box (£0.72 million). MyTutor (£2.49 million), was similarly impacted by reduced PE sector multiples. During the six months under review, the Company invested £0.81 million into one new investment: Proximity Insight £0.81 million  Retail software In addition, three follow-on investments totalling £2.44 million were made into: Preservica £1.71 million  Digital archiving software ActiveNav £0.43 million File analysis software Caledonian Leisure £0.30 million UK leisure and experience breaks provider We expect follow-on investments to continue to be a feature of the growth capital investments as they seek to achieve scale. Since the period-end, the Company has made one follow-on investment of £0.19 million into Northern Bloc and one new investment of £0.64 million into Bidnamic, a marketing technology business. Details of this investment activity and the performance of the portfolio are contained in the Investment Adviser's Review and the Investment Portfolio Summary below. Revenue account The results for the period are set out in the Unaudited Condensed Income Statement and show a revenue return (after tax) of 0.51 pence per share (2021: 0.70 pence per share). The revenue return for the period of £0.61 million represents a decrease from last year's comparable figure of £0.83 million. This is due to lower dividend receipts, combined with higher other expenses and Investment Adviser fees, the latter resulting from the growth in net assets. Dividends The Board intends to continue to provide an attractive dividend stream to Shareholders and is pleased to declare an Interim dividend of 4.00 pence per share for the year ending 30 September 2022. This dividend will be paid on 8 July 2022, to Shareholders on the Register on 6 June 2022, and will bring cumulative dividends paid per share to 144.50 pence per share. Shareholders wishing to amend their participation in the Dividend Investment Scheme in time for their preference to come into effect for this dividend payment must submit their instruction to the Scheme Administrator, Link Group, by no later than 23 June 2022.  For further details, please see the Company's website at www. incomeandgrowthvct.co.uk, under the "Dividends" heading. The Company's target of paying a dividend of at least 6.00 pence per share in respect of each financial year has been met or exceeded in each of the last ten financial years. The Board continues to monitor the sustainability of its dividend target. Offer for Subscription and Dividend Investment Scheme On 20 January 2022, the Company took part in a Joint Offer for Subscription ("Offer") alongside the other Mobeus VCTs. Following unprecedented demand, the Offer became fully subscribed in record time, with an allotment of 10,191,964 shares taking place on 9 March 2022 raising net funds of £9.67 million for the Company. Shareholders should have now received their share certificates. If you applied for shares, but have not received your share certificate, please contact Link Group, details as shown within the Half-Year Report. Due to the rapid, and unforeseen, response to the Offer, the Board acknowledges that not all of our existing Shareholders were able to subscribe for shares and were disappointed by this outcome. For any future fundraising, the Board will consider lessons learned and seek to apply them where practical but we would encourage all Shareholders to register for, and respond to, communications digitally to improve their access and opportunity. The Company's Dividend Investment Scheme ("DIS") provides Shareholders with the opportunity to reinvest their cash dividends into new shares in the Company at the latest published NAV per share (adjusted for any subsequent dividends). New VCT shares attract the same tax reliefs as shares purchased through an Offer for Subscription. There were 901,031 shares allotted through the DIS during the period at a price of 95.45 pence. Since its reinstatement in 2020, 6,357,651 Ordinary shares have been allotted to participants. Shareholders can opt-in to the DIS by completing a mandate form available on the Company's website at: www.incomeandgrowthvct.co.uk or can opt-out by contacting Link Group, using the details provided in the Half Year Report. Please note that instructions take 15 days to become effective. Cash Available for investment The Board continues to monitor credit risk in respect of its cash balances and to prioritise the security and protection of the Company's capital. Cash and liquidity fund balances as at 31 March 2022 amounted to £38.62 million. This figure has been boosted by the funds raised under the Offer and includes £34.05 million held in money market funds with AAA credit ratings and £4.57 million held in deposit accounts with several well-known financial institutions across a range of maturities. Share buybacks During the six months ended 31 March 2022, the Company bought back and cancelled 430,175 of its own shares, representing 0.4% (2021: 0.4%) of the shares in issue at the beginning of the period, at a total cost of £0.40 million (2021: £0.32 million), inclusive of expenses. It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy, where its priority is to act prudently and in the interest of remaining Shareholders, whilst considering other factors, such as levels of liquidity and reserves, market conditions and applicable law and regulations. Under this policy, the Company seeks to maintain the discount at which the Company's shares trade at no more than 5% below the latest published NAV. Shareholder Event & Communications May I remind you that the Company has its own website which is available at: www.incomeandgrowthvct.co.uk .  The Investment Adviser last held a Shareholder Event on behalf of the Mobeus VCTs in February 2022, a recording of which can be found on the Company's website at the web address above. The event was well received and the Investment Adviser plans to hold another shareholder event in 2023. Further details will be circulated to Shareholders and shown on the Company's website in due course. Fraud Warning Shareholders continue to be contacted in connection with sophisticated but fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the UK, claiming or appearing to be from a corporate finance firm offering to buy your shares at an inflated price. Further information and fraud advice plus details of who to contact, can be found in the Information for Shareholders section in the Half-Year Report. Environmental, Social and Governance ("ESG") Following the novation of the investment advisory agreement to Gresham House, who have a dedicated team which is focused on sustainability, the Board views this as an opportunity to enhance the Company's existing protocols and procedures through the adoption of the highest industry standards. Under the new enlarged investment team, each investment executive is responsible for their own individual ESG objectives in support of the wider overarching ESG goals of the Investment Adviser. For further details, Gresham House published its second Sustainable Investment Report in April 2022, which can be found on its website at: www.greshamhouse.com. Board Constitution Helen Sinclair resigned as a Director of the Company following the Annual General Meeting held on 23 February 2022. The Board is extremely grateful for Helen's invaluable time, experience and commitment to her role during her tenure. The Board has since been constituted of two directors who will continue to consider the composition and succession of the Board particularly in light of the new UKLA listing rules on diversity and inclusion. Outlook There is no doubt that the six months under review has been a challenging environment for businesses in general, but the majority of the portfolio has continued to trade well and deliver value growth. The Board is pleased to report that the Company has achieved a positive net return for the period but remains cautious in the face of a range of macroeconomic risks. Whilst the residual threat of further lockdowns from new variants of the virus appears to have lessened to some extent as we progress through 2022, we anticipate that the indirect effects of the COVID-19 pandemic and Brexit will continue to impact the UK economy and bring an element of uncertainty for some time to come, most notably in the form of supply chain and inflationary pressures. More recently, Russia's flagrant breach of the rules-based international order has of course resulted, inter alia, in global economic financial disruption and trade dislocation, including accelerated inflation. Nonetheless, your Board considers that your Company is well positioned to adapt as necessary. In closing, the Board was very pleased to have witnessed such a positive response to the launch of the Company's Offer for subscription in January and would like to thank all Shareholders for their interest in applying for the Company's shares. The Board has been satisfied with the Company's ability to maintain a high rate of investment in quality opportunities over the period. It believes that the additional fundraising will provide the necessary capital to continue to create value growth for Shareholders in what has, to date, proven to be a successful investment strategy. The portfolio has performed well and appears robust. I would like to take this opportunity once again to thank all Shareholders for your continued support and to extend a warm welcome to new Shareholders. Maurice Helfgott Chairman 25 May 2022

Investment Policy

The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Asset Mix and Diversification The Company will seek to make investments in UK unquoted companies in accordance with the requirements of prevailing VCT legislation. Investments are made selectively across a wide variety of sectors, principally in established companies. Investments are generally structured as part loan and part equity in order to receive regular income and to generate capital gain from realisations. There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment. Save as set out above, the Company's other investments are held in cash and liquid funds. Liquidity The Company's cash and liquid funds are held in a portfolio of readily realisable interest-bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised. Borrowing The Company's Articles of Association permit borrowing of up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances.

Investment ADVISER'S Review

Portfolio review The first six months of the Company's financial year have been marked by volatile markets and uncertainty resulting from global events such as the War in Ukraine as well as inflationary pressures. We are starting to see that these factors are now beginning to have a noticeable impact on consumer confidence but underlying trading to date has largely remained healthy. Widespread volatility of global markets and negative sentiment have hampered the ability of businesses to sustain the exceptional performance of the previous financial year.  However, a continuation of steady underlying trading by the majority of investee companies has ensured that the portfolio has nonetheless been able to record value growth of 4.8% over the six-month period, with combined net unrealised and realised gains of £4.20 million. The Company received unprecedented demand for its Offer for Subscription in January 2022, raising the full £10 million capacity of the Offer in less than 24 hours.  This supports the Company's continued momentum in deploying capital, having completed its first combined investment across all the Gresham House VCTs during the period, investing £0.81 million into retail software platform Proximity Insight in February.  In addition to this, strong trading activity levels have created investment opportunities for the Company as portfolio companies sought to enhance their positions by building capability in light of demand. The Company therefore delivered follow-on investments into three portfolio companies during the period, Preservica (£1.71 million), ActiveNav (£0.43 million) and Caledonian Leisure (£0.30 million). Further investments totalling £0.83 were made after the period-end (details below). The Company continues to generate healthy returns from the realisation of investments, completing the disposal of Red Paddle in November, generating net proceeds of £5.52 million in the period and contributing to a multiple of original cost of 5.4x and an IRR of 33.2%. As has been noted in previous reports, the traditional investments, as well as the growth investments, are continuing to make good progress.  In challenging periods such as these for global markets, the diverse portfolio has demonstrated its robustness and resilience. The Investment Adviser remains confident that the portfolio is well positioned as it enters the second half-year. The portfolio movements in the period are summarised as follows: 2022 £m 2021 £m Opening portfolio value 88.15 50.86 New and follow-on investments 3.25 4.42 Disposal proceeds (6.24) (10.22) Net realised gains 1.21 3.59 Unrealised v aluation movements 2.99 26.07 Portfolio value at 31 March 89.36 74.72 Valuation changes of portfolio investments still held The portfolio generated net unrealised gains of £2.99 million in the first half of its financial year. A substantial portion of the valuation increases were generated within the growth portfolio, many of which operate with direct-to-consumer business models that have been able to capitalise on the continuing trend of remote working and online shopping for goods and services.  Gresham House believes that much of this will prove to be permanent.  The more traditional assets that form part of the older portfolio have begun to trade well again either by re-engineering their business or benefiting as COVID-19 restrictions have receded. The total valuation increases were £11.98 million. The main valuation increases were in: ● Preservica - £5.86 million ● Media Business Insight - £1.33 million ● Master Removers Group - £1.13 million Preservica has benefitted from a significant re-rating as part of a further funding round and increased scale.  Media Business Insight has continued to reap the rewards of the success of its diversification to online income streams and a more flexible cost base, whilst Master Removers Group has been effective in taking advantage of strong property markets and a structural shift in demand for storage and logistics. The total valuation decreases were £(8.99) million.  The main valuation decreases were: · Virgin Wines - £4.61 million · MyTutor - £2.49 million · Parsley Box - £0.72 million Virgin Wines and Parsley Box have been impacted by negative market sentiment compounded by more challenging customer recruitment over the period, whilst MyTutor's valuation has been affected by a combination of smaller factors such as downgraded sector PE multiples and a reduction in surplus cash used for valuation purposes. The portfolio's valuation changes in the period are summarised as follows: Investment Portfolio Capital Movement 2021 £m 2020 £m Increase in the value of unrealised investments 11.98 26.68 Decrease in the value of unrealised investments (8.99) (0.61) Net increase in the value of unrealised investments 2.99 26.07 Realised gains 1.21 3.67 Realised losses - (0 . 08) Net realised gains in the period 1.21 3.59 Net investment portfolio movement in the period 4.20 29.66

New investments during the period The Company made one new investment of £0.81 million during the period, as detailed below:

Company Business Date of Investment Amount of new investment (£m) Proximity Insight Retail Software February 2022 0.81 Proximity Insight (proximityinsight.com) is a retail technology business that offers a 'Super-App' that is used by the customer-facing teams of brands and retailers to engage, inspire and transact with customers. Headquartered in London with offices in New York and Sydney, Proximity Insight has a global client base that includes over 20 brands, boutiques and department stores in fashion, beauty, jewellery, electronics and homewares. These clients use Proximity Insight's platform to blur the lines between physical and digital retail, enhancing the customer experience and improving the lifetime value of their customers by upwards of 35%. The business grew annual recurring revenue by 117% to £2.2 million in 2021, and the investment will support Proximity Insight's continued product development and international growth. The investment was made across all six VCTs advised and managed by Gresham House, including the two Baronsmead VCTs.

Further investments during the period The Company made three further investments into existing portfolio companies in the period, totalling £2.44 million, as detailed below: Company Business Date of Investment Amount of further investment (£m) Preservica Seller of proprietary digital archiving software October/ November 2021 1.71 Preservica is a SaaS software business with blue chip customers and strong recurring revenues. It has developed market leading software for the long-term preservation of digital records, ensuring that digital content can remain accessible, irrespective of future changes in technology. This latest investment is to provide additional growth capital to finance the further development of the business. The business has seen annual recurring revenues nearly double over the last two financial years. ActiveNav File analysis Software December 2021 0.43 Data Discovery Solutions (trading as ActiveNav) (activenav.com) is a file analysis software solution which makes it easier for companies to clean up network drives, respond to new data protection laws and dispose of redundant and outdated documents. ActiveNav's solution is used by significant blue-chip customers, particularly those in highly regulated industries such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK. This further funding is to market its nascent SaaS-based Hubble platform. Caledonian Leisure UK Leisure and experience breaks January/ February 2022 0.30 Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as entertainment destinations and theme parks) to deliver to its customers UK-based leisure and experience breaks. It comprises two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The domestic leisure and experience travel market has been devastated by the COVID-19 pandemic, but the company is well-placed to expand as lockdown and travel restrictions are eased. This investment, as part of a series of planned investment tranches, will help the company prepare for and capitalise on what is expected to be strong demand for UK staycation holidays.

Realisations during the period The Company realised its investment in Red Paddle during the period, as detailed below: Company Business Period of investment Total cash proceeds over the life of the investment / Multiple over cost Red Paddle Design and manufacturer of stand up paddleboards July 2015 to November 2021 £6.50 million 5.4x cost The Company sold its investment in Vian Marketing Limited (trading as Red Paddle) to the Myers Family Office for £5.52 million (realised gain in the period: £1.20 million). This investment generated proceeds over the life of the investment of £6.50 million compared to original cost of £1.21 million, which is a multiple of cost of 5.4x and an IRR of 33.2%. Loan repayments and other proceeds in the period The Company received loan repayments totalling £0.70 million from Media Business Insight during the period as well as receiving additional nominal proceeds from Bourn Bioscience and Vectair, both of which were investments realised in a previous year. Investment portfolio yield In the period under review, the Company received the following amounts in loan interest and dividend income: Investment Portfolio Yield 2022 2021 £m £m Interest received in the period 0.84 0.72 Dividends received in the period 0.40 0.59 Total portfolio income in the period1 1.24 1.31 Portfolio Value at 31 March 89.36 74.72 Portfolio Income Yield (Income as a % of Portfolio value at 31 March) 1.4% 1.8% 1   Total portfolio income in the period is generated solely from investee companies within the portfolio

New investments made after the period-end The Company made one new investment of £0.64 million after the period-end, as detailed below: Company Business Date of Investment Amount of further investment (£m) Bidnamic Marketing technology business May 2022 0.64 Bidnamic (www.bidnamic.com) is a marketing technology business that offers a SaaS platform for online retailers to optimise their search engine marketing ("SEM") spend. The technology was all developed internally, and uses bespoke machine learning algorithms to automate the management and optimisation of online retailers' Google shopping spend. The ARR of the business has grown substantially over the last two years and this is projected to continue. The investment round will be used to further enhance the product's capabilities, and drive continued ARR growth through expanding the sales & marketing team and building a presence in North America. Further investments made after the period-end The Company made one further investment into an existing portfolio company of £0.19 million after the period end, as detailed below: Company Business Date of Investment Amount of further investment (£m) Northern Bloc Dairy and allergen-free ice cream producer April 2022 0.19 Northern Bloc Ice Cream (northern-bloc.com) is an established food brand in the emerging and rapidly growing vegan market. By focusing on chef quality and natural ingredients, Northern Bloc has carved out an early mover position in the vegan ice cream sector. The company's focus on plant-based alternatives has strong environmental credentials as well as it being the first ice cream brand to move wholly into sustainable packaging. Following the initial investment in December 2020, Northern Bloc has grown rapidly and strengthened its prospects. COVID disruption has impacted its plan but this further investment provides additional working capital and funds a new production facility to increase its resilience, flexibility and margins in the future. Environmental, Social, Governance considerations Following the novation of the advisory agreement to Gresham House on 30 September 2021, a market leader that is well-resourced with knowledge and expertise in sustainability, the Investment Adviser aims to establish ESG procedures and protocols of the highest standards as set out and informed by Gresham House plc. The first tangible example of movement towards this revised approach is that that the individual members of the investment team now have their own individual ESG objectives set which align with the wider ESG goals of the Investment Adviser. Gresham House published its second Sustainable Investment Report in April 2022 that, along with existing asset specific policies, including the Public Equity Policy, can be found on its website www.greshamhouse.com. These reports and policies cover the Investment Adviser's sustainable investment commitments, how the investment processes meet these commitments and the application of the sustainable investment framework. The Gresham House Board and General Management Committee assess the adherence to the commitments in the Sustainable Investment Policies on an annual basis. In a changing world, the Investment Adviser believes that this approach will contribute towards the enhancement of Shareholder value going forward. Outlook Whilst the period under review has been marked with volatility and uncertainty as a result of a number of factors affecting both the global and UK economy, the portfolio has continued to trade well. Even so, negative market sentiment has impacted valuations, particularly those of the AIM-listed stocks. Global supply issues and inflationary pressures are starting to cause a noticeable impact on consumer confidence. Although there are challenging times ahead, nevertheless the Company has achieved a positive return for the period and with new investment remaining buoyant. The Investment adviser therefore remains cautiously optimistic that the portfolio will continue to provide healthy returns for shareholders. Gresham House Asset Management Limited Investment Adviser 25 May 2022

INVESTMENT PORTFOLIO SUMMARY as at 31 March 2022

Total cost at Valuation at Additional Valuation at 31 March 2022 30 September 2021 investments 31 March 2022 (unaudited) (audited) in the period (unaudited) £ £ £ £ Preservica Limited 4,675,163 8,986,207 1,714,264 16,558,035 Seller of proprietary digital archiving software Virgin Wines UK Plc (AIM quoted) 65,288 12,830,864 - 8,224,913 Online wine retailer MPB Group Limited 1,510,992 7,466,511 - 7,629,204 Online marketplace for used photographic and video equipment EOTH Limited (trading as Equip Outdoor Technologies) 1,383,313 5,427,729 - 6,388,397 Branded outdoor equipment and clothing (Rab and Lowe Alpine) My Tutorweb Limited (trading as MyTutor) 3,361,778 8,640,371 - 6,146,278 Digital marketplace connecting school pupils seeking one-to-one online tutoring Media Business Insight Holdings Limited 2,966,160 4,199,330 - 4,829,658 A publishing and events business focused on the creative production industries End Ordinary Group Limited (trading as Buster and Punch) 2,046,612 4,470,852 - 4,516,899 Industrial inspired lighting and interiors retailer Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) 464,658 2,847,390 - 3,974,741 A specialist logistics, storage and removals business Bella & Duke Limited 1,323,745 3,165,212 - 3,813,948 A premium frozen raw dog food provider Data Discovery Solutions Limited (trading as ActiveNav) 1,975,681 3,087,000 432,181 3,254,109 Provides the global market leading file analysis software for information governance, security and compliance Manufacturing Services Investment Limited (trading as Wetsuit Outlet) 3,205,182 3,202,735 - 3,202,421 Online retailer in the water sports market I-Dox plc (AIM quoted) 453,881 2,916,088 - 2,608,460 Developer and supplier of knowledge management products Arkk Consulting Limited (trading as Arkk Solutions) 2,182,187 2,264,597 - 2,324,614 Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements Tharstern Group Limited 1,454,278 1,668,487 - 2,194,651 Software based management Information systems Connect Childcare Group Limited 1,157,214 1,390,148 - 1,333,867 Nursery management software provider Vivacity Labs Limited 1,250,760 1,250,760 - 1,250,760 Provider of artificial intelligence & urban traffic control systems Caledonian Leisure Limited 748,749 449,251 299,498 1,088,103 Provider of UK leisure and experience breaks Rota Geek Limited 1,250,800 962,085 - 1,085,432 Workforce management software Spanish Restaurant Group Limited (trading as Tapas Revolution) 1,630,233 979,122 - 988,943 Spanish restaurant chain Bleach London Holdings Limited 874,302 1,335,917 - 960,952 Hair colourants brand IPV Limited 954,674 954,674 - 954,674 Provider of media asset software Legatics Holdings Limited 909,330 909,330 - 909,330 SaaS LegalTech software provider Northern Bloc Ice Cream Limited 473,100 506,869 - 872,583 Supplier of premium vegan ice cream Pets' Kitchen Limited (trading as Vet's Klinic) 844,200 844,200 - 844,200 Veterinary clinics Proximity Insight Holdings Limited 807,000 - 807,000 807,000 Super-App used by customer-facing teams of brands and retailers to engage, inspire and transact with customers Aquasium Technology Limited 166,667 478,072 - 617,538 Manufacturing and marketing of bespoke electron beam welding and vacuum furnace equipment Muller EV Limited (trading as Andersen EV) 554,750 317,000 - 554,750 Provider of premium electric vehicle (EV) chargers CGI Creative Graphics International Limited 1,943,948 587,292 - 509,847 Vinyl graphics to global automotive, recreation vehicle and aerospace markets RDL Corporation Limited 1,441,667 322,033 - 367,941 Recruitment consultants within the pharmaceutical, business intelligence and IT industries Parsley Box Group Plc (AIM quoted) 874,001 1,084,367 - 361,456 Supplier of home delivered, ambient ready meals targeting the over 60s Kudos Innovations Limited 472,500 200,340 - 112,575 Online platform that provides and promotes academic research dissemination Jablite Holdings Limited (in members' voluntary liquidation) 498,790 65,779 - 65,779 Manufacturer of expanded polystyrene products Corero Network Security plc (AIM quoted) 600,000 10,314 - 11,002 Provider of e-business technologies Oxonica Limited 2,524,527 - - - International nanomaterials group Veritek Global Holdings Limited 2,289,859 - - - Maintenance of imaging equipment BookingTek Limited 779,155 - - - Software for hotel groups Racoon International Group Limited 655,851 - - - Supplier of hair extensions, hair care products and training Oakheath Limited (in members' voluntary liquidation) 649,528 - - - Online platform that connects people seeking home care from experienced independent carers NexxtDrive Limited/Nexxt E-drive Limited 487,014 - - - Developer and exploiter of mechanical transmission technologies Biomer Technology Limited 137,170 - - - Developer of  biomaterials for medical devices Disposals in period Vian Marketing Limited (trading as Red Paddle Co) - 4,324,963 - - Design, manufacture and sale of stand-up paddleboards and windsurfing sails Total 52,044,707 88,145,889 3,252,943 89,363,060 Total Investment Portfolio split by type Growth focused portfolio¹ £36,359,607 £65,067,630 £3,252,943 £69,933,271 MBO focused portfolio¹ £15,685,100 £23,078,259 - £19,429,789 Total £52,044,707 £88,145,889 £3,252,943 £89,363,060 ¹ The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy.

Statement of the Directors' Responsibilities  Responsibility statements In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Maurice Helfgott (Chairman) and Justin Ward (Chairman of the Audit, Investment and Nomination & Remuneration Committees), being the Directors of the Company, confirm that to the best of their knowledge: a)  The condensed set of financial statements, which has been prepared in accordance with Financial Reporting Standard 104 "Interim Financial Reporting" gives a true and fair view of the assets, liabilities, financial position and profit of the Company as required by DTR 4.2.10; b)  the Half-Year Management Report, which comprises the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary, includes a fair review of the information required by DTR 4.2.7, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; c)  a description of the principal risks and uncertainties facing the Company for the remaining six months is set out under the following heading, in accordance with DTR 4.2.7; and d)  there were no related party transactions in the first six months of the current financial year that are required to be disclosed, in accordance with DTR 4.2.8. Principal risks and uncertainties In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Financial Statements for the year ended 30 September 2021 ("the Annual Report"). The occurrence of the COVID-19 pandemic and the war in Ukraine have created heighted uncertainty but has not changed the nature of the principal risks. The Board considers that the present processes for mitigating those risks remain appropriate. The principal risks faced by the Company are: · Investment and liquidity; · Loss of approval as a Venture Capital Trust; · Regulatory; · Economic, political and other external risks; · Financial and operating; and · Market liquidity; A detailed explanation of the principal risks facing the Company can be found in the Annual Report as well as in Note 16 on Financial Instruments in that report. Copies can be viewed or downloaded from the Company's website: www.incomeandgrowthvct.co.uk. Going concern The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out earlier in the Half Year management report which comprises the Chairman's Statement, Investment Policy, Investment Adviser's Review and Investment Portfolio Summary. The Directors have satisfied themselves that the Company continues to maintain a significant cash position. The majority of companies in the portfolio are well funded and the portfolio taken as a whole remains resilient and well diversified, although the continuing impact of COVID-19, Brexit, and Russia's invasion of Ukraine, may impose further considerable demands upon the liquidity and trading prospects of some of these companies in the near-term. The major cash outflows of the Company (namely investments, share buybacks and dividends) are within the Company's control. The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks are shown in Notes 16 and 17 of the Annual Report and Financial Statements. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the Interim report and financial statements. Cautionary statement This report may contain forward looking statements with regard to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast. For and on behalf of the Board: Maurice Helfgott Chairman 25 May 2022

UNAUDITED CONDENSED FINANCIAL STATEMENTS

Unaudited Condensed Income Statement for the six months to 31 March 2022

Six months ended 31 March 2022 (unaudited) Six months ended 31 March 2021 (unaudited) Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Net investment portfolio gains 9 - 4,197,868 4,197,868   -    29,661,261   29,661,261 Income 4 1,266,322 - 1,266,322   1,328,132   -    1,328,132 Investment Adviser's fees 5 (325,312) (975,934) (1,301,246) (223,439) (670,315) (893,754) Investment Adviser's performance fees 5 - (704,303) (704,303)   -  (742,900) (742,900) Other expenses (280,973) - (280,973) (218,943)   -  (218,943) Profit on ordinary activities before taxation 660,037 2,517,631 3,177,668   885,750   28,248,046   29,133,796 Tax on profiton ordinary activities 6 (49,366) 49,366 - (56,538)   56,538   -  Profit for the period and total comprehensive income 610,671 2,566,997 3,177,668   829,212   28,304,584   29,133,796 Basic and diluted earnings per share 7 0.51p 2.13p 2.64p 0.70p 23.90p 24.60p

Year ended 30 September 2021 (audited) Notes Revenue Capital Total £ £ £ Net investment portfolio gains   -   43,637,384  43,637,384 Income 4   1,953,493  -   1,953,493 Investment Adviser's fees 5 (548,812) (1,646,435) (2,195,247) Investment Adviser's performance fees 5   -  (1,095,268) (1,095,268) Other expenses (444,069)  -  (444,069) Profit on ordinary activities before taxation   960,612  40,895,681 41,856,293 Tax on profit on ordinary activities 6 (50,487)  50,487   -  Profitfor the period and total comprehensive income 910,125 40,946,168     41,856,293 Basic and diluted earnings per share 7 0.77p 34.57p 35.34p

The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net investment portfolio gains (unrealised gains and realised gains on investments) and the proportion of the Investment Adviser's fee and performance fee charged to capital. The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC") and updated in April 2021, 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 period/year. The notes to the unaudited financial statements below form part of these Half-Year Financial Statements.

Unaudited Condensed Balance Sheet as at 31 March 2022 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) Notes £ £ £ Fixed assets Investments at fair value 9 89,363,060 74,720,423 88,145,889 Current assets Debtors and prepayments 622,615 3,917,073 2,459,633 Current asset investments 10  37,198,475 32,954,426 27,194,727 Cash at bank 10  1,424,968 1,378,815 2,653,455 39,246,058 38,250,314 32,307,815 Creditors: amounts falling due within one year (955,691) (1,022,895) (1,367,430) Net current assets 38,290,367 37,227,419 30,940,385 Net assets 127,653,427 111,947,842 119,086,274 Capital and reserves Called up share capital 1,292,177 1,182,005 1,185,549 Capital redemption reserve 40,984 28,439 36,682 Share premium reserve 23,827,036 12,283,303 13,328,900 Revaluation reserve 42,700,452 31,570,937 43,197,940 Special distributable reserve 46,405,339 52,950,812 50,884,712 Realised capital reserve 10,836,154 10,890,667 8,511,877 Revenue reserve 2,551,285 3,041,679 1,940,614 Equity Shareholders' funds 127,653,427 111,947,842 119,086,274 Basic and diluted net asset value: Basic and diluted net asset value per share 11  98.79p 94.71p 100.45p The financial information for the six months ended 31 March 2022 and the six months ended 31 March 2021 has not been audited. The notes to the unaudited financial statements below form part of these Half-Year Financial Statements.

Unaudited Condensed Statement of Changes in Equity for the six months to 31 March 2022 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) £ £ £ £ £ £ £ £ At 1 October 2021 1,185,549 36,682 13,328,900 43,197,940 50,884,712 8,511,877 1,940,614 119,086,274 Comprehensive income for the period Profit/(loss) for the period - - - 2,989,587 - (422,590) 610,671 3,177,668 Total comprehensive income for the period - - - 2,989,587 - (422,590) 610,671 3,177,668 Contributions by and distributions to owners Shares issued via Offer for Subscription (Note c) 101,920 - 9,898,080 - - - - 10,000,000 Issue costs (Note c) - - (250,968) (81,278) (332,246) Dividends re-invested into new shares 9,010 - 851,024 - - - - 860,034 Shares bought back (Note d) (4,302) 4,302 - - (396,145) - - (396,145) Dividends paid - - - - (2,371,079) (2,371,079) -  (4,742,158) Total contributions by and distributions to owners 106,628 4,302 10,498,136 - (2,848,502) (2,371,079) - 5,389,485 Other movements Realised losses transferred to special reserve (Note a) - - - - (1,630,871) 1,630,871 - - Realisation of previously unrealised appreciation - - - (3,487,075) - 3,487,075 - - Total other movements - - - (3,487,075) (1,630,871) 5,117,946 - - At 31 March 2022 1,292,177 40,984 23,827,036 42,700,452 46,405,339 10,836,154 2,551,285 127,653,427 Note a): The Company's special reserve is available to fund buybacks of shares as and when it is considered by the Board to be in the interests of Shareholders, and to absorb any existing and future realised losses and for other corporate purposes. At 31 March 2022, the Company has a special reserve of £46,405,339, all of which arises from shares issued more than three years after the end of the financial year in which they were issued. Reserves originating from share issues are not distributable under VCT rules if they are within three years of the end of an accounting period in which the shares were issued. The total transfer of £1,630,871 from the realised capital reserve to the special distributable reserve above is the total of realised losses incurred by the Company in the period. Note b): The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company. Note c): Under the Company's Offer for subscription launched on 20 January 2022, 10,191,964 Ordinary Shares were allotted on 9 March 2022, raising net funds of £9,667,754 for the Company. This figure is net of issue costs of £250,968 and facilitation fees of £81,278. Note d): During the period, the Company repurchased 430,175 of its own shares at the prevailing market price for a total cost (including stamp duty) of £396,145, which were subsequently cancelled. The difference between the figure shown above of £396,145 and that per the Condensed Statement of Cash Flows of £437,809 is £41,664 which was a creditor at the previous year end. Unaudited Condensed Statement of Changes in Equity for the six months to 31 March 2021 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 £ £ £ £ £ £ £ £ At 1 October 2020 1,186,617 23,827 12,283,303 6,862,342 54,626,873 5,938,001 2,212,467 83,133,430 Comprehensive income for the period (Loss)/profit for the period - - - 26,073,426 - 2,231,158 829,212 29,133,796 Total comprehensive income for the period - - - 26,073,426 - 2,231,158 829,212 29,133,796 Contributions by and distributions to owners Shares bought back (4,612) 4,612 - - (319,384) - - (319,384) Total contributions by and distributions to owners (4,612) 4,612 - - (319,384) - - (319,384) Other movements Realised losses transferred to special reserve - - - - (1,356,677) 1,356,677 - - Realisation of previously unrealised appreciation - - - (1,364,831) - 1,364,831 - - Total other movements - - - (1,364,831) (1,356,677) 2,721,508 - - At 31 March 2021 1,182,005 28,439 12,283,303 31,570,937 52,950,812 10,890,667 3,041,679 111,947,842 The notes to the unaudited financial statements below form part of these Half-Year Financial Statements. 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 issue costs over the nominal value of shares allotted under recent Offers for Subscription and the Company's Dividend Investment Scheme. Revaluation reserve - Increases and decreases in the valuation of investments held at the period-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 period. Special distributable reserve - This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time. The cost of share buybacks and any realised losses on the sale or impairment of investments (excluding transaction costs) are charged to this reserve. 75% of the Investment Adviser fee expense, and the related tax effect, that are charged to the realised capital reserve are transferred to this reserve. This reserve will also be charged any facilitation fee payments to financial advisers, which arose as part of the Offer for Subscription. Realised capital reserve - The following are accounted for in this reserve:  - Gains and losses on realisation of investments;  - Permanent diminution in value of investments;  - Transaction costs incurred in the acquisition and disposal of investments;  - 75% of the Investment Adviser fee expense and 100% of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies; and  - Capital dividends paid. Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve, as well as 25% of the Investment Adviser fee together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.

Unaudited Condensed Statement of Cash Flows for the six months ended 31 March 2022 Six months ended Six months ended Year ended 31 March 2022 31 March 2021 30 September 2021 Notes (unaudited) (unaudited) (audited) £ £ £ Cash flows from operating activities Profit for the financial period 3,177,668 29,133,796 41,856,293 Adjustments for: Net investment portfolio gains (4,197,868) (29,661,261) (43,637,384) (Increase)/decrease in debtors (218,732) (12,233) 183,844 (Decrease)/Increase in creditors and accruals (370,075) 799,205 1,104,812 Net cash (outflow)/inflow from operating activities (1,609,007) 259,507 (492,435) Cash flows from investing activities Purchase of investments 9 (3,442,183) (4,417,515) (8,087,743) Disposal of investments 9   8,478,630   6,715,869   12,195,381 Net cash inflow from investing activities   5,036,447   2,298,354   4,107,638 Cash flows from financing activities Shares issued as part of Offer for subscription   10,000,000   -    -  Issue costs as part of Offer for subscription (332,246)   -    -  Equity dividends paid 8 (3,882,124)   -  (4,852,504) Purchase of own shares (437,809) (413,435) (1,103,332) Net cash inflow/(outflow) from financing activities   5,347,821 (413,435) (5,955,836) Net increase/(decrease) in cash and cash equivalents 8,775,261 2,144,426 (2,340,633) Cash and cash equivalents at start of period 26,696,413 29,037,046 29,037,046 Cash and cash equivalents at end of period 35,471,674 31,181,472 26,696,413 Cash and cash equivalents comprise: Cash at bank and in hand 10 1,424,968 1,378,815 2,653,455 Cash equivalents 10 34,046,706 29,802,657 24,042,958 The notes to the unaudited financial statements below form part of these Half-Year Financial Statements.

Notes to the Unaudited Condensed Financial Statements 1. Company information The Income and Growth VCT plc is a public limited company incorporated in England, registration number 04069483. The registered office is 5 New Street Square, London, EC4A 3TW. 2. Basis of preparation of the Financial Statements These Financial Statements prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in April 2021) issued by the Association of Investment Companies ("AIC"). The Half-Year Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting Council's (FRC) guidance on Review of Interim Financial Information. 3. Principal accounting policies The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the top of Note 9 on investments. 4. Income Six months ended Six months ended Year ended 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) Total Total Total £ £ £ Income  - Dividends   400,218   588,183   694,891  - Money market funds   15,113   2,569   4,103  - Loan stock interest   838,162   715,528   1,220,332  - Bank deposit interest   12,829   16,063   28,376  - Other income -   5,789   5,791 Total Income 1,266,322 1,328,132 1,953,493 5. Investment Adviser's fees and performance fees Six months ended Six months ended Year ended 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) Total Total Total £ £ £ Allocated to revenue return: Investment Adviser's fees   325,312   223,439   548,812 Allocated to capital return: Investment Adviser's fees   975,934   670,315   1,646,435 Investment Adviser's performance fees   704,303   742,900   1,095,268 Total 2,005,549 1,636,654 3,290,515 Investment Adviser's fee 1,301,246 893,754 2,195,247 Investment Adviser's performance fees 704,303 742,900  1,095,268  Total 2,005,549 1,636,654 3,290,515 On 30 September 2021, Mobeus sold its VCT and Investment management business to Gresham House. As a result, the Company's Investment advisory arrangements have been novated to Gresham House. The entire core management, investment and operational teams involved with the Company all transferred to Gresham House in connection with this transaction. The Directors have charged 75% of the fees payable under the Investment Adviser's agreement, and 100% of the amounts payable under the Incentive Agreement, to the capital reserve. The Directors believe it is appropriate to charge the incentive fees wholly against the capital return, as any fees payable depend on capital performance, as explained below. On 30 September 2014, a revised incentive fee agreement was signed between the Board, on behalf of the Company, and Mobeus, with effect from 1 October 2013, to amend and replace the previous agreement. This agreement was novated to Gresham House following its purchase of the Mobeus VCT fund and Investment management business on 30 September 2021. Any payment under the revised incentive agreement is 15% of net realised gains for each year, payable in cash. It is payable only if Cumulative Net Asset Value (NAV) total return per share (being the closing NAV at a year end plus cumulative dividends paid to that year end, since 1 October 2013) equals or exceeds a "Target Return". The Target Return is the greater of two targets, being either: (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) in Cumulative NAV total return per share; or (ii) the cumulative percentage change in the Consumer Prices Index since 1 October 2013 to the relevant financial year-end, the resultant figure then being multiplied by (100+A)/100, where A is the number of full 12 month periods (or part thereof ) that have passed between 1 October 2013 and the relevant financial year end. Both measures of Target Return are applied to the same opening base, being NAV per share as at 30 September 2013 of 113.90 pence. The objective of this Target Return is to enable shareholders to benefit from a cumulative NAV return of at least 6% per annum (5% in the financial year ended 30 September 2014), before any incentive fee is payable. Once a payment has been made, cumulative NAV total return is calculated after deducting past years' incentive fees paid and payable. Under this agreement, any fee payments to Gresham are subject to an annual cap of an amount equal to 2% of the net assets of the Company as at the immediately preceding year-end. Any excess over the 2% remains payable to Gresham House 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). For the year ending 30 September 2022, the Target Return is 190.62 pence per share (being a 6% uplift on the Target Return at the previous year-end of 179.83 pence per share). As at 31 March 2022, the Cumulative Total NAV return is 199.33 pence per share, so the Target Return for the 2022 financial year has currently been met and a fee of £704,303 has been accrued. This fee is payable subject to the cumulative Target NAV return continuing to exceed the Target Return at the year-end and the approval of the Company's Annual Report by shareholders at the AGM.

6. Taxation There is no tax charge for the period as the Company incurred tax allowable expenses in excess of taxable income. 7. Basic and diluted earnings and return per share Six months ended 31 March 2022 Six months ended 31 March 2021 Year ended  30 September 2021 (unaudited) (unaudited) (audited) Total Total Total £ £ £ i) Total earnings after taxation: 3,177,668 29,133,796 41,856,293 Basic and diluted earnings per share (Note a) 2.64 p 24.60 p 35.34 p ii) Revenue earnings from ordinary activities after taxation 610,671 829,212 910,125 Basic and diluted revenue earnings per share (Note b) 0.51 p 0.70 p 0.77 p Net investment portfolio gains/(losses) 4,197,868 29,661,261 43,637,384 Capitalised Investment Adviser fees and performance fees less taxation (1,630,871) (1,356,677) (2,691,216) iii) Total capital earnings 2,566,997 28,304,584 40,946,168 Basic and diluted capital earnings per share (Note c) 2.13 p 23.90 p 34.57 p iv) Weighted average number of shares in issue in the period (Note d) 119,992,964 118,453,326 118,422,497 Notes: a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue. b) Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue. c) Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue. d) There are no instruments that will increase the number of shares in issue in the future. Accordingly, the above figures currently represent both basic and diluted earnings per share. 8. Dividends Six months ended Six months ended Year ended 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) Dividend Type For the year ended 30 September Pence per share Date paid £ £ £ Interim Income 2021 1.00p 23 July 2021 - - 1,181,978 Interim Capital 2021 4.00p 23 July 2021 - - 4,727,910 Interim Capital* 2021 2.00p 7 January 2022 2,371,079 - - Interim Capital 2021 2.00p 7 January 2022 2,371,079 - - 4,742,158 - 5,909,888 * - This dividend was paid out of the Company's Special distributable reserve. For the period ended 31 March 2022, £4,742,158 disclosed above differs to that shown in the Condensed Statement of Cash Flows of £3,882,124 due to £860,034 of new shares allotted subject to listing under the Company's Dividend Investment Scheme.

9. Summary of movement on investments during the period 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 at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:- (i)  Each investment is considered as a whole on a 'unit of account' basis, i.e. that the value of each portfolio company is considered as a whole, alongside consideration of:- The price of new investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. The inputs that derived the investment price are calibrated within individual valuation models and at every subsequent quarterly measurement date, are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company. The valuation bases used are the following: a)  a multiple basis. The enterprise value of the investment may be determined by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, scale and liquidity). or:- b)  where a company's underperformance against plan indicates a diminution in the value of the investment, provision against the price of a new investment is made, as appropriate. (ii)  Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable. (iii)  Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation, realisation proceeds, or a weighted average of these bases may be applied. Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement. All figures are shown net of any applicable transaction costs incurred by the Company. 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 the price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value. The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to determine the valuation.  - Level 1 -  Fair value is measured based on quoted prices in an active market.  - Level 2 -  Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.  - Level 3 -  Fair value is measured using valuation techniques using inputs that are not based on observable market data. Traded Unquoted ordinary Unquoted preference Unquoted Total on AIM shares shares loan stock Level 1 Level 3 Level 3 Level 3 £ £ £ £ £ Valuation at 1 October 2021 16,841,633 57,782,482 1,400,192 12,121,582 88,145,889 Purchases at cost (Note a) - 746,639 1,583,423 922,881 3,252,943 Sales - proceeds (Note b) - (4,857,496) - (1,376,144) (6,233,640)   - net realised gains - 1,208,281 - - 1,208,281 Reclassification at valuation (Note c) - 425,790 - (425,790) - Net unrealised (losses)/gains on investments in the period (5,635,802) 8,611,665 66,174 (52,450) 2,989,587 Valuation at 31 March 2022 11,205,831 63,917,361 3,049,789 11,190,079 89,363,060 Book cost at 31 March 2022 1,993,170 32,486,833 2,823,969 14,740,735 52,044,707 Unrealised gains/(losses) at 31 March 2022 9,712,661 36,225,139 226,121 (3,463,469) 42,700,452 Permanent impairment of cost of investments (500,000) (4,794,611) (301) (87,187) (5,382,099) Valuation at 31 March 2022 11,205,831 63,917,361 3,049,789 11,190,079 89,363,060 (Losses)/gains on investments Realised gains based on historical cost - 4,492,632 - 202,724 4,695,356 Less amounts recognised as unrealised gains in previous years - (3,284,351) - (202,724) (3,487,075) Net realised gains based on carrying value at 30 September 2021 - 1,208,281 - - 1,208,281 Net movement in unrealised (losses)/gains in the period (5,635,802) 8,611,665 66,174 (52,450) 2,989,587 Net investment portfolio (losses)/gains for the period ended 31 March 2022 (5,635,802) 9,819,946 66,174 (52,450) 4,197,868 Notes: a): Purchases of investments shown above of £3,252,943 is £189,240 less than that shown on the Condensed Statement of Cash Flows due to a follow on investment into Northern Bloc which completed after the period end. b): The sale proceeds shown above of £6,233,640 is £2,244,990 less than that shown on the Condensed Statement of Cash Flows of £8,478,630 due to proceeds received from Proactive in the period. This amount was recognised as a debtor at 30 September 2021. c): The Company's loan investment in Northern Bloc Ice-Cream Limited was converted into equity during the period. Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows: As at As at As at 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) Valuation methodology £ £ £ Multiple of earnings, revenues or gross margin, as appropriate 76,729,700 52,346,068 69,628,026 Recent investment price 807,000 1,445,435 1,293,451 Recent investment price (reviewed for impairment) 554,750 - 317,000 Estimated realisation proceeds 65,779 65,779 65,779 Net asset value - 341,550 - 78,157,229 54,198,832 71,304,256 10. Current asset investments and Cash at bank As at As at As at 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) £ £ £ OEIC Money market funds 34,046,706 29,802,657 24,042,958 Cash equivalents per Statement of Cash Flows 34,046,706 29,802,657 24,042,958 Bank deposits that mature after three months 3,151,769 3,151,769 3,151,769 Current asset investments 37,198,475 32,954,426 27,194,727 Cash at bank 1,424,968 1,378,815 2,653,455 11. Net asset value per share As at As at As at 31 March 2022 31 March 2021 30 September 2021 (unaudited) (unaudited) (audited) Net assets £127,653,427 £111,947,842 £119,086,274 Number of shares in issue   129,217,701   118,200,511   118,554,881 Net asset value per share - basic and diluted 98.79p 94.71p 100.45p 12. Post balance sheet events On 6 April 2022, a further investment of £0.19 million was made into Northern Bloc Ice Cream Limited, an existing portfolio company. On 5 May 2022, a new investment of £0.64 million was made into Bidnamic Limited. On 23 May 2022, a further investment of £0.40 million was made into Muller EV Limited (trading as Andersen EV), an existing portfolio company. 13. Statutory Information The financial information for the six months ended 31 March 2022 and the six months ended 31 March 2021 has not been audited.    The financial information contained in this Half-Year report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements for the year ended 30 September 2021 have been filed with the Registrar of Companies. The auditor has reported on these Financial Statements and that report was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006. 14. Half-Year Report Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, 5 New Street Square, London, EC4A 3TW, or can be downloaded via the Company's website at www.incomeandgrowthvct.co.uk.

 

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