TIDMPGOO 
 
 
   PROVEN GROWTH AND INCOME VCT PLC 
 
   ANNUAL FINANCIAL REPORT 
 
   YEARED 28 FEBRUARY 2021 
 
   ProVen Growth and Income VCT plc, managed by Beringea LLP, today 
announces the final results for the year ended 28 February 2021. These 
results were approved by the Board of Directors on 3 June 2021. 
 
   You may, in due course, view the Annual Financial Report in full at 
www.provenvcts.co.uk. All other statutory information can also be found 
there. 
 
   Financial summary 
 
 
 
 
                                                       28 February 2021  29 February 2020 
Ordinary Shares as at:                                       Pence             Pence 
Net asset value per Ordinary Share                                 61.5              58.6 
Dividends paid since class launch (originally as 'C' 
 Shares)                                                           67.7              64.4 
Total return (net asset value plus dividends paid 
 since 'C' Share class launch)                                    129.2             123.0 
Year on year change in: 
Net asset value per share (adjusted for dividends 
 paid in the year)                                                10.6%            (9.2%) 
 
   Chairman's Statement 
 
   I present the Annual Report for ProVen Growth and Income VCT plc (the 
"Company") for the year ended 28 February 2021. Following a year of 
economic and commercial turbulence created by the COVID-19 pandemic, the 
Company's investment portfolio has emerged resilient, having been well 
supported throughout this period by the Investment Manager. Indeed, this 
is reflected in the encouraging increase in total return per share in 
the year to 28 February 2021. 
 
   Results for the year 
 
   Over the year, the Company's Net Asset Value ("NAV") per share increased 
from 58.6p at 29 February 2020 to 61.5p at 28 February 2021. The total 
increase in Shareholder total return (NAV per share plus dividends) was 
6.2p, a 10.6% increase on the opening NAV. 
 
   The total profit on ordinary activities for the year was GBP14.4 million 
or 6.9p per share (2020: loss of GBP12.3 million), comprising a revenue 
loss of GBP1.1 million, or 0.5p per share, (2020: revenue loss of 
GBP758,000, 0.4p per share) and a capital profit of GBP15.5 million, or 
7.4p per share (2020: loss of GBP11.6 million, or 6.2p per share). This 
capital profit was predominantly driven by an increase in valuation of 
six companies. The combined valuation movement of these six alone 
totaled GBP18.6 million. 
 
   The Company normally announces its latest NAV on a quarterly basis, 
although it may announce new NAVs between the normal quarterly dates if 
there is a material movement. Following the announcement of the NAV at 
30 November 2020 on 20 January 2021, the Company became aware of 
developments at several portfolio companies which had a material impact 
on the valuation of the investment portfolio. It therefore announced a 
new NAV of 60.0p per share as at 28 February 2021 on 18 March 2021. 
Following discussions with the auditors as part of the year-end audit 
process, the NAV as at 28 February has been revised to 61.5p per share. 
 
   Dividends 
 
   During the year ended 28 February 2021, the Company paid a final 
dividend of 1.75p per share in respect of the year ended 29 February 
2020 on 28 August 2020 and an interim dividend of 1.5p per share was 
paid in respect of the year ended 28 February 2021 on 4 December 2020. 
 
   Your Board is proposing a final dividend for the year ended 28 February 
2021 of 1.5p per share to be paid on 30 July 2021 to Shareholders on the 
register at 9 July 2021. With total tax-free dividends of 3.0p per share 
for the year ended 28 February 2021, this represents cash returned to 
Shareholders of 5.28% on the opening NAV per share at 1 March 2020 after 
deducting the prior year final dividend of 1.75p per share. 
 
   Portfolio activity and valuation 
 
   Following the immediate shock of COVID-19, the Investment Manager has 
been working closely and proactively with portfolio companies. Moreover, 
given the turbulent and unprecedented situation, four additional Board 
meetings were held, to complement those linked to the usual quarterly 
reporting cycle and in order to offer additional support to the 
Investment Manager during a period of great turmoil. 
 
   I am pleased to report that the Investment Manager's response to the 
COVID-19 pandemic has been alert and thorough throughout. This has 
included helping portfolio companies to produce revised business plans 
taking into account the potential impact of the pandemic and identifying 
appropriate cost savings, arranging multiple seminars for portfolio 
company management, on topics ranging from managing remote teams to 
accessing government support schemes, and providing additional 
investment where appropriate. 
 
   Furthermore, BREXIT has been an additional background concern for some 
time with companies assessing how best to prepare and limit its eventual 
impact on their operations. Fortunately, with only a few portfolio 
companies dealing in physical goods, and still fewer with mainland 
European sales, the ending of the transition period on 31 December 2020 
has had a limited impact. Nevertheless, those companies concerned have 
been proactive, with one opening a warehouse in Berlin last year in 
order to be able to continue to serve their French and German customers, 
and another setting up a mainland European subsidiary in order to 
satisfy the EU regulations specific to their product. 
 
   As explained in prior years, it takes time for early-stage investments 
to mature and to reach their potential. Following some significant and 
sizeable disposals up to and including the financial year to 28 February 
2019, the Investment Manager has been working to replenish the Company's 
portfolio. With five new investee companies in 2019, six in 2020, three 
in the current financial year and a further two investments made post 
year end, more than a third of the portfolio is now less than three 
years old. However, with a 10.6% increase in total return over the last 
twelve months, there are signs that the more recent investments are 
beginning to contribute to the Company's performance. 
 
   As explained, the 10.6% increase in total return is largely a result of 
six companies in particular. All of these companies have experienced an 
increase in sales and revenue, resulting in a combined valuation uplift 
of GBP16.8 million. Inevitably though, these increases were offset by 
falling valuations in some other portfolio companies. There were three 
particular cases where trading was not as expected, which together 
resulted in a valuation reduction of GBP4 million. Overall, however, the 
portfolio showed a positive valuation movement of GBP17.7 million. 
 
   Further information about key developments at existing portfolio 
companies is given in the Investment Manager's Review. 
 
   Fundraising activities 
 
   As communicated in the interim statement, the combined offer for 
subscription with ProVen VCT plc launched on 27 January 2020 to raise up 
to GBP10 million per company, with an over-allotment facility of GBP10 
million per company. The Board utilised GBP5 million of the over- 
allotment facility per company and the offer closed to new applications 
on 19 March 2020 with GBP14.2 million of gross proceeds for the Company. 
 
   The Company launched a further combined offer for subscription with 
ProVen VCT plc on 3 December 2020 to raise up to GBP20 million per 
company, with an over-allotment facility of GBP10 million per company, 
which the Board has not utilised to date. The offer closed to new 
applications on 24 February 2021 with GBP20 million of gross proceeds 
for the Company. 
 
   Share buybacks 
 
   The Company has a policy of buying back shares that become available in 
the market at a discount of approximately 5% to the latest published net 
asset value, subject to the Company having sufficient liquidity. The 
Company retains Panmure Gordon to act as its corporate broker. 
Shareholders who are considering selling their shares may wish to 
contact Panmure Gordon, who will be able to provide details of the price 
at which the Company is buying shares. 
 
   During the year, the Company purchased 4,389,276 Ordinary Shares at an 
average price of 53.0p per share and for an aggregate consideration of 
GBP2,328,000. This represented 2.2% of the Company's issued share 
capital at the start of the year. All shares were subsequently 
cancelled. 
 
   A special resolution to allow the Company to continue to make market 
purchases of its own shares of up to 14.99% of the share capital for 
cancellation will be proposed at the forthcoming Annual General Meeting 
("AGM"). 
 
   Performance Fee 
 
   The Company's performance incentive arrangements are an important aid 
for the Investment Manager, Beringea LLP ("Beringea" or the "Investment 
Manager"), in recruiting and retaining talented investment professionals 
against competition from other investment management companies. The 
performance fee structure is designed to align the interests of the 
Investment Manager with those of Shareholders and encourages capital 
growth as well as significant payments to Shareholders by means of 
tax-free dividends, as determined by the Directors. These arrangements 
are set out in more detail in the Strategic Report. 
 
   No performance fee has been accrued at the year-end, as the performance 
hurdles had not been met, and therefore no performance fee is payable in 
relation to the financial year ended 28 February 2021. 
 
   The payment of a performance fee in future years and the amount thereof, 
if any, will be dependent on both the performance of the Company and the 
level of dividends paid to Shareholders, as determined by the Directors. 
 
   Board 
 
   As the Company announced, James Stewart retired as planned and as a much 
valued Director following last year's AGM. Anna Kuriakose has replaced 
James and is also the new Audit Committee Chairwoman; she has settled 
into both roles well. 
 
   We are also delighted to welcome back Natasha Christie-Miller following 
a period of absence. Natasha rejoins us ready to once again offer her 
sound stewardship and commercial judgement, which have played such a 
significant part in the Company's success to date. 
 
   Apart from James's departure, there have been no other changes to the 
Board. 
 
   Annual General Meeting 
 
   In light of the 'social distancing' measures and the legislation in 
place to allow companies to hold general meetings safely at the time, 
last year's Annual General Meeting ("AGM") was held as a closed meeting 
and Shareholders were unfortunately unable to attend. 
 
   We are keen to welcome Shareholders in person to our 2021 AGM this year, 
particularly given the constraints we faced in 2020. At the time of 
writing, in accordance with the Government's four-step roadmap out of 
lockdown, by step 4, which will take place no earlier than 21 June 2021, 
the Government hopes to be in a position to remove all legal limits on 
social contact. We are therefore proposing to hold the Annual General 
Meeting in The Tavern Room at RSA House, 8 John Adam Street, London, 
WC2N 6EZ at 10:00am on Wednesday 14 July 2021 and to welcome the maximum 
number of Shareholders we are able within safety constraints and in 
accordance with government guidelines in force at that time. 
 
   However, given the constantly evolving nature of the situation, we want 
to ensure that we are able to adapt these arrangements efficiently to 
respond to changes in circumstances. On this basis, we are asking 
Shareholders to register if they intend to attend the AGM. Should the 
situation change such that we consider that it is no longer possible for 
Shareholders to attend the meeting, we will notify Shareholders via 
email (to the address provided at the time of registration). Should we 
have to change the arrangements in this way, it is likely that we will 
not be in a position to accommodate Shareholders beyond the minimum 
required to hold a quorate meeting which will be achieved through the 
attendance of director Shareholders. Any updates to the position will 
also be included on our website at www.provenvcts.co.uk. 
 
   Shareholders intending to attend the Annual General Meeting are asked to 
register their intention as soon as practicable by email to 
https://www.globenewswire.com/Tracker?data=qBcbrq7yjnz-VgiPinFJHdEiqo1PzcXtRoUd564DiSwlaTdQeqR6yAG2HajFudIboa5kXM7TTNC4zSanCThQ0C39zEjom7WID0D6sDRl4Rk= 
info@beringea.co.uk. 
 
   We always welcome questions from our Shareholders at the AGM. This year, 
as in 2020, we also welcome Shareholders to send any questions via email 
in advance of the AGM to info@beringea.co.uk. 
https://www.globenewswire.com/Tracker?data=qBcbrq7yjnz-VgiPinFJHdEiqo1PzcXtRoUd564DiSwnNMA7KTaB6yGYr4zXZr0wx-zxE4_jWWW5c44dgJ7hh4p_1VIpKBY7at0k35U-C1k= 
Questions should be sent by 5:00 pm on Monday 5 July 2021 and answers to 
the themes in the questions received will be addressed on the website 
https://www.provenvcts.co.uk/ahead of the AGM. In addition, the 
Company's annual Shareholder event will again proceed virtually in the 
Autumn in order to reach the maximum number of Shareholders (further 
details below). 
 
   Given the uncertainty, we strongly recommend all Shareholders to submit 
their votes by proxy. We strongly recommend voting electronically at 
www.signalshares.com as each vote will be counted automatically. Given 
the continued prevalence of working from home, there is still a risk 
that votes may not be counted if cast by paper proxy. 
 
   Shareholder event 
 
   The Company's annual Shareholder event provides an important opportunity 
for Shareholders to hear from the Investment Manager, discussing 
performance and investment activity, as well as receiving insights and 
updates from our portfolio companies. For your Board and the Investment 
Manager, it is also a vital platform for gathering and discussing the 
views of our Shareholders. 
 
   In order to ensure the safety and wellbeing of our Shareholders, 
employees and portfolio companies, we hosted our first fully digital 
Shareholder Day in Autumn 2020, using an online platform to deliver our 
usual insights into fund performance and market conditions, as well as 
providing an opportunity for you to ask questions of our investment team 
and hear from our portfolio companies. 
 
   Following its success, the continued uncertainty as a result of the 
COVID-19 pandemic, and with over 300 attendees last year, plans are 
afoot for a similar event in 2021. This has been scheduled for Wednesday 
17 November and we would encourage you to join us for the session. 
 
   UNSOLICITED COMMUNICATIONS WITH SHAREHOLDERS 
 
   We are aware that a number of Shareholders in ProVen VCT plc have 
recently received unsolicited phone calls from an international number, 
in which the caller has sought to discuss their shareholdings. We have 
previously advised all Shareholders that these calls may be associated 
with an attempted fraud, and shareholders should not engage with the 
caller. If you do receive a suspect call, we strongly suggest that you 
hang up as soon as possible, and contact the Investment Manager. Scams 
have unfortunately become more commonplace, particularly during the 
COVID-19 pandemic. The FCA has published useful guidance for 
shareholders on how to protect themselves from scams, which you may wish 
to read. You can find it online at: https://www.fca.org.uk/consumers/pr 
https://www.globenewswire.com/Tracker?data=GKmM1IYR6s2ny7KMNRg_VZ0230cyfR3VoTiNj5dg3FhhEMx8DYmPhiQUIRd6slBNj4irTDoUEQOBNv_-ZqZo5GmBr1eyTRMMa813i4X4P3t3uhxUgbD4USNN4Yi8ljpE 
otect-yourself-scams. 
https://www.globenewswire.com/Tracker?data=U8U9hMDnXeUXFbtTAQos6UL6UdxhxwzhuG0jEyZ3-Gr_I1RqZyXKnFRmojy3UfiqVS5H_6waA1X7BLXWjp4SNLeeHqt1zluBppmNNDoivdJNMl1EI8T7K_3yBiS5GGID5Li3XQZ6WD8XKvxF7_-AEQ== 
 
 
   Outlook 
 
   Faced with the challenges of the last year, the company's investment 
portfolio has demonstrated strong performance in the face of much 
adversity. Supported by your Board, the Investment Manager has been 
proactive in working with our portfolio companies to address the 
challenges they faced and the portfolio has delivered an aggregate gain 
on investments of GBP17.4 million (Realised loss: GBP0.237 million; 
Unrealised gain: GBP17.75 million) for the current financial period. 
 
   All of the efforts outlined above have ensured that the Company has 
weathered the COVID-19 storm well and enabled the few companies affected 
by BREXIT to start 2021 on as sure a footing as possible. Furthermore, 
the successful share offer, which closed to further applications in 
February, provides the Company with additional resources to support 
existing investee companies through any further economic disruption as 
well as to take advantage of any new investment opportunities on the 
horizon. 
 
   In these recent and difficult times, the Company and its portfolio have 
been shown to be adaptable and resilient. The Board has been pleased 
with the Company's performance in these circumstances, and remains 
confident about its future prospects. 
 
   Marc Vlessing OBE 
 
   Chairman 
 
   Investment Manager's Review 
 
   Introduction 
 
   Following significant disposals up to and including the financial year 
to 28 February 2019, the Investment Manager has been working hard to 
replenish the Company's portfolio. Having already added 11 new companies 
over the preceding two years, a total of GBP5.5 million was invested in 
three new portfolio companies and GBP4.5 million in seven existing 
portfolio companies, continuing the focus of nurturing a relatively 
young portfolio to maturity. This was lower than the amount invested in 
the previous financial year, largely because of the impact of the 
COVID-19 pandemic. This particularly affected the second and third 
quarters of 2020, with investment activity picking up significantly in 
the final quarter of the year. The Company entered the new financial 
year with a strong pipeline of new investment opportunities, and two new 
investments, for a total of GBP3.2 million, were completed in March. 
 
   At 28 February 2021, the Company's venture capital portfolio comprised 
50 investments at a cost of GBP89.2 million and a valuation of GBP99.9 
million, an overall increase of 12.0% on cost. 
 
   Subsequent to the year end the Company issued 31,760,207 Ordinary Shares 
for an aggregate consideration of GBP20 million under the combined offer 
for subscription with ProVen VCT plc which launched on 3 December 2020. 
Share issue costs thereon amounted to GBP899,000. The Company therefore 
remains well capitalised to take advantage of new investment 
opportunities and to support existing portfolio companies where 
appropriate. 
 
   Investment activity 
 
   New investments 
 
   The Company entered the financial year with several new investment 
opportunities at advanced stages, with GBP2.9 million being invested 
during the first few months in two new portfolio companies. However, the 
inflow of new investment opportunities fell sharply in the first quarter 
as companies then largely put any fundraising plans on hold for several 
months, while they dealt with the impact of the COVID-19 pandemic and 
evaluated the potential future impact on their business. Deal flow 
started to pick up again in the Autumn, but, given the time it takes to 
negotiate, evaluate and complete deals, only one further new investments 
was completed during the financial year. 
 
   The largest new investment for the Company was in Luxury Promise (GBP2.5 
million), a platform to buy and sell pre-owned luxury women's handbags 
and accessories. The first tranche was completed in April 2020 with a 
further investment made in February 2021 following strong performance 
over the first ten months of the investment. 
 
   In March 2020, GBP1.5million was invested into Commonplace Digital, 
which is a software-as-a-service platform designed for digital community 
engagement in new property and infrastructure developments. Its software 
enables property developers, local authorities, transport planners, and 
infrastructure developers to gather feedback on projects from citizens 
and residents. We believe that this company is set for rapid expansion, 
with the Government having identified the housing and infrastructure 
sectors as key to the nation's recovery from COVID-19. 
 
   The Company invested GBP1.5 million into Social Value Portal in July 
2020. Social Value Portal is a software-as-a-service platform for public 
and private sector organisations to quantify the 'social value' created 
through their operations and supply chains. The company was founded in 
2014 to provide a tool that could precisely and consistently report 
social value throughout the economy and is currently benefiting from the 
rapidly increasing focus on ESG issues. The platform is today used by 
more than 100 organisations spanning the public, private, and third 
sectors, including Legal & General, UBS, Barclays, Balfour Beatty, 
Sheffield City Council, Manchester City Council, and Bristol City 
Council. 
 
   Follow-on investments 
 
   The Company has also been active in supporting the development of 
existing portfolio companies, making follow-on investments in the 
following seven companies during the year: DeepCrawl (GBP1.9m), Fnatic 
(GBP772,000), Thread (GBP671,000), Exonar (GBP532,000), Papier 
(GBP308,000), POQ Studio (GBP150,000) and ContactEngine (GBP125,000). 
 
   Investment disposals 
 
   Although the disposal of Chargemaster was completed in a prior year, 
contingent proceeds of GBP72,000 were recognised in the current year. 
 
   There was also a part-disposal of shares in DeepCrawl which completed at 
the same time as the follow-on investment in the same company. The 
proceeds of GBP482,000 translated as a profit against cost of 
GBP239,000. 
 
   Dryden Holdings Limited and Rapid Charge Grid repaid GBP4.5 million and 
GBP264,000 of loans to the Company during the year. In conjunction with 
this, these companies also made payments of GBP495,000 and GBP47,000 in 
loan note interest respectively. 
 
   Key developments at existing portfolio companies 
 
   There were notable increased in valuation at six portfolio companies, 
which together totaled GBP16.8 million. 
 
   Several companies, particularly online retailers or companies in related 
sectors, benefited from changes in consumer behaviour caused by the 
COVID-19 pandemic. Zoovu (increase of GBP5.7 million), My 1st Years 
(increase of GBP2.1 million), Picasso Labs (increase of GBP1.8 million) 
and Mycs (increase of GBP1.5 million) all showed significant increases 
in revenue compared with the prior year. MPB, the online platform for 
buying and selling pre-owned camera equipment, (increase of GBP1.5 
million) also continued to trade strongly, having opened a warehouse in 
Berlin in order to continue to serve its French and German customers 
post-BREXIT. Blis, a location-based advertising company, initially 
suffered from the effects of the COVID-19 pandemic, but performance has 
subsequently improved significantly, leading to a valuation increase of 
GBP6 million. 
 
   The increases outlined above were offset by three notable valuation 
reductions, at POQ Studio, Festicket and Response Tap, which had a 
combined decrease in valuation of GBP4 million. 
 
   POQ Studio and Response Tap have faced difficult trading conditions, 
struggling to hit their milestones and grow revenue as originally 
budgeted. 
 
   Festicket, an online platform which packages festival tickets together 
with travel, accommodation and add-ons to provide complete festival 
experiences, was inevitably impacted by the COVID-19 pandemic. 
 
   Revenue fell significantly compared to the previous year. The valuation 
reflects the current uncertainty surrounding mass events and travel in 
both the short and medium term. 
 
   In all, the investment portfolio held at the year-end showed an increase 
in value of GBP17.4 million (2020: decrease of GBP9.8 million). Further 
detail on the investments is provided in the Investment Portfolio and 
Review of Investments. 
 
   OTHER NEWS AND DEVELOPMENTS 
 
   There is a growing need for the Company and the businesses within its 
portfolio to embrace environmental, social and governance ("ESG") 
practices, as employees, customers and investors increasingly scrutinise 
the sustainability, diversity and corporate citizenship of early-stage 
companies. 
 
   In order to remain ahead of this trend and potential regulatory 
developments, the Company and the Investment Manager have worked 
together to consider new policies and processes relating to ESG. This 
has included significant work on diversity and inclusion, which resulted 
in certification for the Investment Manager as a Level 1 firm under the 
Diversity VC Standard, an industry accreditation for diversity and 
inclusion best practice, as well as a nomination for Diversity and 
Inclusion Leader of the Year at the Private Equity Awards 2021. 
 
   The Investment Manager has also led the creation of an industry 
initiative -- ESG_VC -- to support early-stage companies to measure, 
monitor and maximise their performance against key ESG metrics. This 
initiative, with the involvement of the British Venture Capital 
Association, has support from more than 50 venture capital funds, and 
will enable entrepreneurs in the Company's portfolio to access resources 
that drive ESG and commercial improvements. 
 
   Post year-end developments 
 
   Between 28 February 2021 and the date of this report, the Company issued 
31,760,207 Ordinary Shares for an aggregate consideration of GBP20 
million under the combined offer for subscription with ProVen VCT plc 
which launched on 3 December 2020. Share issue costs thereon amounted to 
GBP899,000. 
 
   On 22 March 2021, the Company bought back 274,661 Ordinary Shares at a 
price of 57p per share and for an aggregate consideration of GBP157,000. 
All shares were subsequently cancelled. 
 
   In March 2021, the Company invested in two new companies, namely 
Moonshot CVE Holdings Ltd and Utilis SAR Ltd. 
 
   GBP1.1 million was invested in Moonshot, a business with a mission to 
reach those at risk of violent extremism and offer them an alternative 
path. From digital capacity building to counter-messaging campaigns, 
Moonshot uses data-proven techniques to ensure its clients respond to 
violent extremism effectively all over the world. 
 
   Utilis received GBP2.1 million. The company uses satellite-based 
technology and a patented algorithm derived from techniques developed to 
search for water on Mars to detect drinking water leaks. With the 
potable leak detection product first commercialised in 2016, over 250 
projects have been completed worldwide in countries including the United 
States, Italy, the UK, Chile, China and South Africa, leading to almost 
20,000 leaks verified and saving customers 5,000 million gallons a year. 
 
   In April 2021, a further GBP277,000 was invested in Hygenica. This was 
to fund a working capital call caused by a surge in demand for the 
company's product. 
 
   In March 2021, there was a part-disposal of the Company's holding in 
MPB. The Company received GBP0.8 million in disposal proceeds. Having 
performed well since the initial investment by the Company in February 
2018, MPB decided to raise additional capital to accelerate its growth. 
The Company was unable to participate in this investment round owing to 
restrictions imposed by the VCT regulations. As part of the funding 
round, however, the Company had the opportunity to sell some of its 
existing shares, crystalising a 2.75x return on the initial investment 
on the shares sold, whilst also retaining 70% of its original holding. 
 
   In April 2021, the Company's holding in Response Tap Limited was also 
sold. The Company received initial proceeds of GBP0.95 million. 
Additional proceeds are expected in the coming months. 
 
   Outlook 
 
   The unique circumstances of the last financial year created big 
challenges for all companies. For some, particularly in the leisure and 
travel sectors, the restrictions imposed by the Government in response 
to the COVID-19 pandemic have had a serious adverse impact. 
 
   Fortunately, the Company's investment portfolio had very little exposure 
to these sectors. Other companies, particularly those in the online 
retailing and related sectors, where the Company has a much larger 
exposure, benefited from changes in consumer behaviour resulting from 
the COVID-19 pandemic. Overall, the portfolio performed well during the 
year, with a net valuation gain of GBP17.4 million. 
 
   The current surge in confidence in the UK and US economies is resulting 
in significantly increased levels of investment activity by private 
equity firms and M&A activity by corporate acquirors. At the same time, 
the cohort of companies which we have invested in over the past three to 
five years is maturing. These factors have resulted in several inbound 
approaches to our portfolio companies by organisations looking to invest 
or acquire. We have recently seen a significant investment in MPB from a 
new investor, combined with a partial realisation. If market conditions 
continue to be positive, we expect to see more disposals and significant 
fundraisings by our portfolio companies over the next twelve months. 
 
   We continue to see a strong flow of interesting new investment 
opportunities. However, increasing competition for deals means that 
valuation expectations are rising rapidly. We remain disciplined in our 
approach, investing selectively and only where we believe in a company's 
long-term prospects and that the pricing will allow us to achieve a good 
return on the investment. 
 
   As we emerge from the second wave of the COVID-19 pandemic, many of the 
companies in the portfolio remain well-positioned to continue the robust 
growth we have seen over the last 12 months. We continue to work closely 
with portfolio companies to help them to fulfil their potential, 
providing support to management in multiple ways, as well as making 
further investments where appropriate. While there will continue to be 
challenges, we believe that overall the Company has a strong portfolio 
and we are cautiously optimistic about the prospects for the coming 
year. 
 
   Beringea LLP 
 
   Investment Manager 
 
   Investment activity 
 
   Investment activity during the year is summarised as follows: 
 
   Additions 
 
 
 
 
                                     Cost 
                                    GBP'000 
 
Luxury Promise Limited                2,522 
Written Byte Ltd (t/a DeepCrawl)      1,930 
Commonplace Digital Ltd               1,500 
Social Value Portal Ltd               1,500 
Sannpa Limited (t/a Fnatic)             772 
Thread, Inc.                            671 
Exonar Limited                          532 
Papier Ltd                              308 
POQ Studio Ltd                          150 
ContactEngine Limited                   125 
Total                                10,010 
                                   -------- 
 
 
   Disposals 
 
 
 
 
 
                                                        Disposal 
                    Cost     Market value at 01/03/20   proceeds   Realised gain/ (loss) against cost   Realised (loss)/gain during the year 
                   GBP'000           GBP'000            GBP'000                 GBP'000                               GBP'000 
 
Dryden Holdings 
 Limited*            4,500                      4,761      4,500                                   --                                  (261) 
Written Byte Ltd 
 (t/a 
 DeepCrawl)            244                        535        483                                  239                                   (52) 
Rapid Charge 
 Grid Limited*         264                        264        264                                   --                                     -- 
Chargemaster plc        --                         --         72                                   72                                     72 
MEL Topco 
 Limited (t/a 
 Maplin)                --                         --          4                                    4                                      4 
Total                5,008                      5,560      5,323                                  315                                  (237) 
                  --------  -------------------------  ---------  -----------------------------------  ------------------------------------- 
 
 
 
 
   *  Loan note repayment 
 
   Of the disposals above, Chargemaster plc was realised in a prior period, 
but proceeds were recognised in the current period in excess of the 
amounts previously accrued. 
 
   The proceeds received in respect of MEL Topco Limited (t/a Maplin) 
reflect a final distribution in respect of the company's administration 
in excess of the amounts previously accrued. 
 
   Dryden Holdings Limited and Rapid Charge Grid Limited, the Company also 
received GBP495,000 and GBP104,000 in loan note interest respectively. 
 
   The Written Byte Ltd (t/a DeepCrawl) disposal was a part-disposal of 
shares which completed at the same time as the follow-on investment in 
the same company. The transaction was structured in this way in order to 
strengthen the Company's overall position as a shareholder. 
 
   The total disposal proceeds outlined above do not match those recorded 
in the statement of cash flows as the cashflow figure represents total 
disposal proceeds received, elements of which will have been accrued in 
prior periods. 
 
   Investment Portfolio 
 
   The following investments were held at 28 February 2021: 
 
 
 
 
 
                                                  Valuation          % of 
                                                 movement in     portfolio by 
                             Cost    Valuation       year           value 
                            GBP'000   GBP'000      GBP'000 
Venture capital 
investments (by value) 
Zoovu Limited (formerly 
 SmartAssistant)              3,653      9,296           5,730            6.8% 
Blis Media Limited**          1,083      7,511           5,964            5.5% 
Sannpa Limited (t/a 
 Fnatic)                      6,718      6,727               9            4.9% 
ContactEngine Limited         2,455      5,747             529            4.2% 
Mycs GmbH                     3,031      5,595           1,493            4.1% 
Infinity Reliance 
 Limited(t/a My 1st 
 Years)                       2,769      5,206           2,080            3.8% 
Written Byte Limited (t/a 
 DeepCrawl)                   3,299      4,471           (100)            3.3% 
Thread, Inc.                  3,980      3,766           (207)            2.8% 
Luxury Promise Limited        2,522      3,588           1,066            2.6% 
Papier Ltd                    3,458      3,458              --            2.5% 
MPB Group Limited             1,489      3,376           1,527            2.5% 
Picasso Labs, Inc. (t/a 
 CreativeX)                   1,470      3,313           1,843            2.4% 
Sealskinz Holdings 
 Limited**                    3,116      3,116              --            2.3% 
Our Path Ltd (t/a Second 
 Nature)                      2,800      2,800              --            2.1% 
D30 Holdings Ltd**            3,550      2,673           (765)            2.0% 
Monica Vinader Limited**        204      2,634           1,178            1.9% 
Arctic Shores Limited         2,450      2,450              --            1.8% 
Commonplace Digital 
 Limited                      1,500      1,970             470            1.4% 
Been There Done That 
 Global Limited               1,448      1,967            (77)            1.4% 
Disposable Cubicle 
 Curtains Limited (t/a 
 Hygenica)**                  3,286      1,850             650            1.4% 
Aistemos Limited              1,681      1.679              --            1.2% 
Access Systems, Inc.          1,500      1.626             126            1.2% 
Litchfield Media Limited      1,420      1,618               4            1.2% 
Social Value Portal Ltd       1,500      1,500              --            1.1% 
Stylescape Limited (t/a 
 EDITED)                      1,500      1,500              --            1.1% 
Response Tap Limited          1,440      1,446         (1,150)            1.1% 
Lupa Foods Limited 
 (formerly Donatantonio 
 Group Limited)               1,003      1,398           (403)            1.0% 
Exonar Limited                1,602      1,271           (192)            0.9% 
Honeycomb.TV Limited*         1,100      1,073              --            0.8% 
Simplestream Limited**          690      1,051             236            0.8% 
Festicket Ltd                 2,289      1,011         (1,278)            0.7% 
Rapid Charge Grid 
 Limited**                    1,153        991              41            0.7% 
Firefly Learning Limited        857        863             233            0.6% 
POQ Studio Ltd                3,498        679         (1,556)            0.5% 
                             75,514     99,220          17,451           72.6% 
                            -------  ---------  --------------  -------------- 
     Other venture capital 
               investments   13,726        668             224            0.5% 
Total venture capital 
 investments                 89,240     99.888          17,675           73.1% 
                            -------  ---------  --------------  -------------- 
Cash at bank and in hand                36,669                           26.9% 
Total investments                      136,557                          100.0% 
                                     ---------                  -------------- 
 
 
   Valuation movement in the year excludes the cost of investments made in 
the year. Other venture capital investments at 28 February 2021 
comprise: 
 
   Amura Limited, Buckingham Gate Financial Services Limited, Cogora Group 
Limited, Deltadot Limited, Dryden Holdings Limited*, Duncannon Holdings 
Limited* , InContext Solutions Limited, Inskin Media Limited, Lantum 
Limited, Netcall plc*, Senselogix Limited, Skills Matter Limited**, 
Utility Exchange Online Limited (t/a SwitchmyBusiness.com), Whistle 
Sports, Inc., TVPlayer Limited and Vigilant Applications Limited*. 
 
   * Non-qualifying investment 
 
   ** Partially non-qualifying investment 
 
   Investee company 100% owned by the Company but not consolidated as held 
exclusively for resale as part of an investment portfolio. 
 
   With the exception of Netcall plc which is quoted on AIM, all venture 
capital investments are unquoted. 
 
   All venture capital investments are registered in England and Wales 
except for InContext Solutions, Inc., Picasso Labs Inc., Whistle Sports, 
Inc., Access Systems, Inc., and Thread, Inc., which are Delaware 
registered corporations in the United States of America and Mycs GmbH, 
which is registered in Germany. 
 
   Strategic Report 
 
   The Directors present the Strategic Report for the year ended 28 
February 2021. The Board prepared this report in accordance with the 
Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 
2013. 
 
   Principal objectives and strategy 
 
   The Company's investment objective is to achieve long-term returns 
greater than those available from investing in a portfolio of quoted 
companies, by investing in: 
 
   --      a portfolio of carefully selected qualifying investments in 
small and medium sized unquoted companies with excellent growth 
prospects; and 
 
   --        a portfolio of non-qualifying investments permitted for 
liquidity management purposes 
 
   within the conditions imposed on all VCTs and to minimise the risk of 
each investment and the portfolio as a whole. 
 
   The Company has been approved by HM Revenue and Customs ("HMRC") as a 
Venture Capital Trust in accordance with Part 6 of the Income Tax Act 
2007 and, in the opinion of the Directors, the Company has conducted its 
a airs so as to enable it to continue to maintain approval. Approval for 
the year ended 28 February 2021 is subject to review should there be any 
subsequent enquiry under corporation tax self-assessment. 
 
   The Directors consider that the Company was not, at any time, up to the 
date of this report, a close company within the meaning of Section 414 
of the Income and Corporation Taxes Act 1988. 
 
   Business model 
 
   The business acts as an investment company, investing in a portfolio of 
carefully selected smaller companies. The Company operates as a Venture 
Capital Trust to ensure that its Shareholders can benefit from tax 
reliefs available and has outsourced the portfolio management and 
administration duties. 
 
   Business review and developments 
 
   The Company began the year with GBP77.8 million of venture capital 
investments and ended with GBP99.9 million spread over a portfolio of 50 
companies. 44 of these investments with a value of GBP95.8 million were 
VCT qualifying (or part qualifying). 
 
   The profit on ordinary activities after taxation for the year was 
GBP14.4 million comprising a revenue loss of GBP1.1 million and a 
capital profit of GBP15.5 million. The Ongoing Charges ratio (excluding 
performance fees) as calculated in line with the AIC methodology is an 
Alternative Performance Measurement used by the Board to monitor 
expenses. The Ongoing Charges ratio for the year ended 28 February 2021 
was 2.3% (2020: 2.4%). 
 
   The Company's business review and developments during the year are 
reviewed further within the Chairman's Statement, the Investment 
Manager's Review and Review of Investments. 
 
   Investment policy 
 
   The Company's investment policy covers several areas as follows: 
 
   Qualifying investments 
 
   The Company seeks to make investments in VCT-qualifying companies with 
the following characteristics: 
 
 
   -- a strong, balanced and well-motivated management team with a proven track 
      record of achievement; 
 
   -- a defensible market position; 
 
   -- good growth potential; 
 
   -- an attractive entry price for the Company; and 
 
   -- a clearly identified route for a profitable realisation within a 3 to 4 
      year period. 
 
 
   The Company invests in companies at various stages of development, 
including those requiring capital for expansion, but not in start-ups or 
in management buy-outs or businesses seeking to use funding to acquire 
other businesses. Investments are spread across a range of different 
sectors. 
 
   Other investments 
 
   Funds not invested in qualifying investments may be invested in 
non-qualifying investments permitted for liquidity management purposes, 
which include cash, alternative investment funds ("AIFs") and UCITS 
which may be redeemed on no more than 7 days' notice, or ordinary shares 
or securities in a company that are acquired on a regulated market. 
 
   Borrowings 
 
   It is not the Company's intention to have any borrowings. The Company 
does, however, have the ability to borrow a maximum amount equal to the 
nominal capital of the Company and its distributable and undistributable 
reserves (which, as at 28 February 2021, was equal to GBP137 million 
(2020: GBP117 million)). There are no plans for the Company to borrow at 
the current time. 
 
   Maximum exposures 
 
   No investment will constitute more than 15% of the Company's portfolio 
by value at the time of investment. 
 
   Listing Rules 
 
   In accordance with the Listing Rules: 
 
   (i)   the Company may not invest more than 10%, in aggregate, of the 
value of the total assets of the Company at the time an investment is 
made in other listed closed-ended investment funds except listed 
closed-ended investment funds which have published investment policies 
which permit them to invest no more than 15% of their total assets in 
other listed closed-ended investment funds; 
 
   (ii)   the Company must not conduct any trading activity which is 
significant in the context of the Company; and 
 
   (iii)   the Company must, at all times, invest and manage its assets in 
a way which is consistent with its objective of spreading investment 
risk and in accordance with its published investment policy set out in 
this document. This investment policy is in line with Chapter 15 of the 
Listing Rules and Part 6 Income Tax Act 2007. 
 
   Venture capital trust regulations 
 
   The Company has engaged Philip Hare & Associates LLP to advise it on 
compliance with VCT requirements, including evaluation of investment 
opportunities as appropriate and regular review of the portfolio. 
Although Philip Hare & Associates LLP works closely with the Investment 
Manager, they report directly to the Board. 
 
   Compliance with the main VCT regulations as at 28 February 2021 and for 
the year then ended is summarised as follows: 
 
 
 
 
              (i) The Company holds at least 80 per cent. of its                 Complied 
               investments in qualifying companies (as defined by 
               Part 6 of the Income Tax Act 2007) 
              (ii) At least 70 per cent. in the case of funds raised             Complied 
               after 5 April 2011 of the Company's qualifying investments 
               (by value) are held in "eligible shares" -- ("eligible 
               shares" generally being ordinary share capital) 
              (iii) At least 10 per cent. of each investment in                  Complied 
               a qualifying company is held in "eligible shares" 
               (by cost at time of investment) 
              (iv) No investment in a company constitutes more than              Complied 
               15 per cent. of the Company's portfolio (by value 
               at time of investment) 
              (v) The Company's income for each financial year is                Complied 
               derived wholly or mainly from shares and securities 
              (vi) The Company distributes sufficient revenue dividends          Complied 
               to ensure that not more than 15 per cent. of the income 
               from shares and securities in any one year is retained 
              (vii) The Company has not made a prohibited payment                Complied 
               to Shareholders derived from an issue of shares since 
               6 April 2014 
              (viii) No investment made by the Company causes an                 Complied 
               investee company to receive more than the permitted 
               investment from State Aid sources (including from 
               VCTs) 
              (ix) Since 18 November 2015, the Company has not made              Complied 
               an investment in a company which exceeds the maximum 
               permitted age requirement 
              (x) The funds invested by the Company in another company           Complied 
               since 18 November 2015 have not been used to make 
               a prohibited acquisition 
              (xi) Since 6 April 2016, the Company has not made                  Complied 
               a prohibited non-qualifying investment.                            Complied 
               (xii) Of funds raised on or after 1 March 2019, at 
               least 30% has been invested in qualifying holdings 
               by the anniversary of the end of the accounting period 
               in which the shares were issued. 
 
   Investment management and administration fees 
 
   Beringea provides investment management services to the Company for an 
annual fee of 2.0% of the net assets per annum. Beringea is also 
entitled to receive performance incentive fees as described below. The 
investment management agreement is terminable by either party at any 
time by one year's prior written notice. The total fees relating to this 
service amounted to GBP2,498,000 (2020: GBP2,430,000), comprising a 
management fee of GBP2,498,000 (2020: GBP2,430,000) and performance 
incentive fees as described below of GBPnil (2020: GBPnil). At the 
year-end, an amount of GBPnil (2020: GBP194,000) was outstanding. 
 
   The Board is satisfied with Beringea's approach and procedures in 
providing investment management services to the Company. The Directors 
have therefore concluded that the continuing appointment of Beringea as 
the Investment Manager remains in the best interest of Shareholders. 
 
   Throughout the year ended 28 February 2021 Beringea also provided 
administration services to the Company. In the year, total 
administration fees amount to GBP59,000 (2020: GBP54,000 ). An amount of 
GBPnil (2020: GBP14,000) remained outstanding at the year end. 
 
   The annual running costs (excluding any performance fees payable) of the 
Company, are also subject to a cap of 3.6% of the Company's net assets 
as at the end of the year. Any costs in excess of this are borne by 
Beringea. 
 
   Beringea also received arrangement fees in respect of investments made 
by the Company and other VCTs managed by Beringea totalling GBP158,000 
(2020: GBP348,000) and monitoring fees of GBP655,000 (2020: GBP364,000) 
during the year ended 28 February 2021. These fees are payable by the 
investee companies into which the Company invests and are not a direct 
liability or expense of the Company. 
 
   Performance incentive fees 
 
   Under the performance fee arrangements, the Investment Manager is 
entitled to receive a performance fee in relation to each major 
fundraising (a "Respective O er") providing that, at the end of a 
nancial year, the relevant Respective O er Performance Value exceeds the 
relevant Respective O er Hurdle. In this event the performance fee per 
Respective O er Share will be equal to 20 per cent, of the amount by 
which each such Respective O er Performance Value exceeds the relevant 
Respective O er Initial Net Asset Value per Share, less the aggregate 
amount of any performance fee per Respective O er Share already paid in 
respect of that Respective O er for nancial years starting after 29 
February 2012. 
 
   The relevant Respective O er Performance Value in respect of the 
relevant nancial year end is the sum of (i) the audited net asset value 
per Ordinary Share for a Respective O er at that date, (ii) Respective O 
er Cumulative Dividends, and (iii) all performance fees per Ordinary 
Share paid by the Shareholders of the Respective O er in relation to 
nancial years starting after 29 February 2012. 
 
   The Respective O er Hurdle is the greater of (i) 1.25 times the 
Respective O er Initial Net Asset Value per Share and (ii) the 
Respective O er Initial Net Asset Value per Share increased by the Bank 
of England base rate plus one per cent, per annum (compound) from: 
 
   --        31 August 2012, in respect of the Original O er; or 
 
   --      the date of the rst allotment of Ordinary Shares under each 
Subsequent O er, in respect of all Subsequent O ers. 
 
   If at the end of a nancial year the relevant Respective O er Performance 
Value is less than or equal to the relevant Respective O er Hurdle, no 
performance fee will be payable for such Respective O ers for that 
nancial year. 
 
   The performance fee per Respective O er Share payable in relation to a 
Respective O er for a nancial year will be reduced, if necessary, to 
ensure that (i) the cumulative performance fee per Respective O er Share 
payable in respect of a Respective O er does not exceed 20 per cent, of 
the relevant Respective O er Cumulative Dividends, (ii) the cumulative 
performance fee per Respective O er Share payable in respect of the 
Respective O er does not exceed 50 per cent, of the amount by which the 
relevant Respective O er Performance Value exceeds the relevant 
Respective O er Hurdle and (iii) the audited net asset value per 
Ordinary Share at the relevant nancial year end plus the relevant 
Respective O er Cumulative Dividends is at least equal to the relevant 
Respective O er Hurdle. 
 
   Performance fees for the year ended 28 February 2021 amounted to GBPnil 
(2020: GBPnil). 
 
   Key performance indicators 
 
   At each Board meeting, the Directors consider a number of performance 
measures to assess the Company's success in meeting its objective of 
delivering long term returns. The key performance indicators for the 
Company are compared against the results published by the Association of 
Investment Companies ("AIC"). The Board believes the Company's key 
performance indicators are: 
 
   --        Total return (net asset value plus dividends paid since 
launch); 
 
   --        Dividends paid and the dividend yield; and 
 
   --        Net asset value per share (adjusted for dividends paid in the 
year). 
 
   The total return is calculated by the net asset value per share plus the 
cumulative dividends paid to date. This is a performance measure of the 
fund and used to evaluate the total value generated for Shareholders. 
 
   The following table shows the total return, annual return shown as the 
net asset value per share, dividends paid per annum and the dividend 
yield. 
 
 
 
 
                                                    28/02/2017  28/02/2018  28/02/2019  29/02/2020  28/02/2021 
Total return                                             124.3       126.5       129.3         123       129.2 
Net asset value per share (adjusted for dividends 
 paid in the year)*                                      10.9%        2.7%        3.9%      (9.2%)       10.6% 
Dividends paid per share                                     6        12.8         6.5         3.5         3.3 
Dividend yield**                                          7.5%       15.5%        9.0%        5.1%        5.5% 
 
   * Calculated as the change in total return in the year divided by the 
opening net asset value. 
 
   ** Calculated as the total dividends paid in the year divided by the 
opening net asset value. 
 
   The net asset value per share is de ned as an Alternative Performance 
Measure and the Board considers it to be the primary measure of 
shareholder value. 
 
   The key performance indicators are discussed further in the Chairman's 
Statement and the Investment Manager's Review. 
 
   Principal risks and uncertainties 
 
   The principal nancial risks faced by the Company, which include market 
price risk, interest rate risk, credit risk and liquidity risk (being 
minimal), are summarised within the notes to the nancial statements. 
 
   In addition to these risks, the Company, as a fully listed Company on 
the London Stock Exchange and as a venture capital trust, operates in a 
complex regulatory environment and, therefore, also faces a number of 
non- nancial principal risks. A breach of the VCT Regulations could 
result in the loss of VCT status and consequent loss of tax reliefs 
currently available to Shareholders and the Company being subject to 
capital gains tax. Serious breaches of other regulations, such as the 
Listing Rules of the Financial Conduct Authority and the Companies Act 
2006, could lead to suspension from the Stock Exchange and damage to the 
Company's reputation. 
 
   The Company has also made a number of its initial investments in a 
foreign currency; most often in Euro or US Dollars. Furthermore, as not 
all companies' operations are restricted to the UK, some companies may 
function, in part, in a currency other than GBP. The portfolio is 
therefore exposed, to some extent, to foreign exchange risk and 
specifically that of transaction risk and translation risk. 
 
   The Company invests in small and immature businesses and there is a risk 
that the performance of these individual businesses negatively impacts 
the performance of the Company. The Investment Manager follows a 
rigorous process in vetting and careful structuring of new investments 
and, after an investment is made, close monitoring of the businesses. 
 
   The Board reviews and agrees policies for managing each of these risks. 
The Directors receive reports annually from the Investment Manager on 
the compliance of systems to manage these risks, and place reliance on 
the Investment Manager to give updates in the intervening periods. 
 
   Save for the impact of the Coronavirus pandemic, particularly on 
performance and valuation of portfolio companies as well as potential 
risks such as future fundraising, the risks faced by the Company have 
remained unchanged since the beginning of the nancial year. 
 
   Viability statement 
 
   The Board has assessed the Company's prospects over the three-year 
period to 29 February 2024. A three-year period has been considered 
appropriate as it broadly aligns with the time frame during which the 
Investment Manager will be required to invest 80% of the funds from the 
most recent offer for subscription in qualifying investments. 
 
   In order to support this statement, the Board has carried out a robust 
assessment of the principal and emerging risks faced by the Company, as 
detailed above, including those risks associated with the COVID-19 
pandemic and BREXIT, and considered the availability of mitigating 
factors. 
 
   The Board considers that the primary risk faced by the Company is 
compliance with the VCT rules and although there are a number of 
mitigating factors such as a robust deal identification and diligence 
process, an experienced investment team and consultation with the 
Company's VCT status adviser to ensure that investments made comply with 
the VCT rules, these factors cannot mitigate the risk that insufficient 
qualifying investments are identified to ensure ongoing compliance with 
the VCT rules. 
 
   Accordingly, the amount required to invest in qualifying holdings to 
maintain compliance with the VCT rules was a major consideration in the 
Board's analysis. Together with the expected liabilities of the Company 
for the three years to 29 February 2024, the Board considered the 
forecast cash requirements against the expected cash position, taking 
into account a level of assumed investment realisations and investment 
income during the period. 
 
   Based on the assessment of the above considerations on the cash flow 
forecasts, the Board has determined that the Company will be able to 
continue in operation, maintain compliance with the VCT rules and meet 
its liabilities as they fall due for the three years to 29 February 
2024. 
 
   Section 172 Statement 
 
   Section 172 of the Companies Act 2006 requires the Directors of the 
Company to act in a way that they consider, in good faith, will most 
likely promote the success of the Company for the bene t of the members 
as a whole. In doing so, the Directors should have regard (amongst other 
matters) to: 
 
   --        the likely consequences of any decision in the long term; 
 
   --        the interests of the Company's employees; 
 
   --        the need to foster the Company's business relationships with 
suppliers, customers and others; 
 
   --        the impact of the Company's operations on the community and 
the environment; 
 
   --        the desirability of the Company maintaining a reputation for 
high standards of business conduct; and 
 
   --        the need to act fairly as between members of the Company. 
 
   The Board considers its signi cant stakeholder groups to be its 
Shareholders, its suppliers (including the Investment Manager to whom 
most executive functions are delegated) and its portfolio companies. The 
Company is an externally managed investment company with no employees 
and no customers in the traditional sense and, therefore, there is 
nothing to report in relation to these relationships. The Company takes 
a number of steps to understand the views of its key stakeholders and 
considers these, along with the matters set out above, in Board 
discussions and decision making. 
 
   Shareholders 
 
   The Company's Shareholders are key to the success of the Company and the 
Board engages and communicates with Shareholders by various means. The 
Company encourages all Shareholders to attend its virtual shareholder 
event, which last year was held on 17 November 2020 and attended by 
around 300 Shareholders, and gives Shareholders the opportunity to ask 
questions of the Board and the Investment Manager and also hear from 
some of our portfolio companies. Following the success of last year's 
event, plans are afoot for a similar event in 2021. This has been 
scheduled for Wednesday 17 November 2021. 
 
   The Board also encourages all Shareholders to vote on the resolutions at 
the Annual General Meeting. In light of the 'social distancing' measures 
and the legislation proposed to allow companies to hold general meetings 
safely, last year's AGM was held as a closed AGM and Shareholders were 
unfortunately unable to attend. We are pleased to report that this year 
hopefully (regulations permitting) sees a return to a more traditional 
format with the next AGM of the Company being held in the Tavern Room at 
RSA House, 8 John Adam Street, London, WC2N 6EZ at 10.00 am on Wednesday 
14 July 2021. For further details, please see the Chairman's Statement 
and the Notice of the Meeting at the end of the document. 
 
   As a result of the shareholder events, together with other 
communications with Shareholders and advisors, the Company has received 
useful feedback which allows the Board to understand the nature of 
stakeholder concerns better. The Board works very closely with the 
Investment Manager in reviewing how stakeholder issues are handled, 
ensuring good governance and responsibility in managing the Company's 
affairs. Ultimately, the Directors' decisions are intended to achieve 
the Company's principle objective of long term returns for Shareholders 
greater than those available from investing in a portfolio of quoted 
companies. In addition, the Board has continued to maintain the existing 
arrangements for payments of dividends, dividend re-investment and 
buy-backs in order to give predictable income returns and liquidity to 
Shareholders when requested. 
 
   Suppliers 
 
   The Company's suppliers, and in particular Beringea as Investment 
Manager, are the cornerstone of the Company's business. There is regular 
contact with the Investment Manager and members of the Investment 
Manager's senior management team attend all of the Company's Board 
meetings. Since the outbreak of the Coronavirus pandemic, the Board has 
been in more frequent communication with the Investment Manager to 
ensure an appropriate and transparent response. 
 
   Portfolio Companies 
 
   The Investment Manager provides updates to the Board on the entire 
portfolio at least quarterly. In light of the COVID-19 pandemic, there 
have also been four additional Board meetings in order to keep the 
health and performance of the portfolio under continuous review during 
the first turbulent months. Furthermore, in addition to the Investment 
Manager's usual monitoring of portfolio companies, in the weeks 
immediately following the start of the outbreak in Europe, the 
Investment Manager worked closely with the leadership teams of portfolio 
companies to ensure that they were prepared for the disruption which 
followed. 
 
   Environmental, social, human rights policy and greenhouse emissions 
 
   The Board seeks to conduct the Company's affairs responsibly and 
maintain high standards in respect of ethical, environmental, governance 
and social issues. The Board recognises the requirement under section 
414C of the Companies Act 2006 to detail information about social and 
community issues, employees and human rights; including any policies it 
has in relation to these matters and effectiveness of these policies. 
 
   As an externally managed investment company with no employees, the 
Company has no formal policies in these matters. However, the Company 
and the Investment Manager recognise the growing need for the Company 
and the businesses within its portfolio to embrace environmental, social 
and governance ("ESG") practices and are working together to consider 
new policies and processes relating to ESG. This has included 
significant work on diversity and inclusion, which resulted in 
certification for the Investment Manager as a Level 1 firm under the 
Diversity VC Standard, an industry accreditation for diversity and 
inclusion best practice, as well as a nomination for Diversity and 
Inclusion Leader of the Year at the Private Equity Awards 2021. 
 
   The Investment Manager has also led the creation of an industry 
initiative -- ESG_VC -- to support early-stage companies to measure, 
monitor and maximise their performance against key ESG metrics. This 
initiative, with the involvement of the British Venture Capital 
Association, has support from more than 50 venture capital funds, and 
will enable entrepreneurs in the Company's portfolio to access resources 
that drive ESG and commercial improvements.. 
 
   On a general note, the Board considers that the Company's investment 
operations create employment, aid economic growth, generate tax revenues 
and produce wealth, thus benefiting the community and the economy more 
generally. Where appropriate, the investment proposals considered by the 
Investment Manager and the Board also include any relevant information 
on any social, employee, ethical or environmental matters relevant to 
that investment. 
 
   Whilst as a UK quoted company the VCT is required to report on its 
Greenhouse Gas (GHG) Emissions for any direct emissions, as it 
outsources all of its activities and does not have any physical assets, 
property, employees or operations, it is not responsible for any direct 
emissions. As a result, total energy emissions are less than 40,000 kWh 
and the additional Streamlined Energy and Carbon Reporting (SECR) 
disclosures have not been made. 
 
   Directors and senior management 
 
   Following James Stewart's retirement after the AGM in August 2020, the 
Company had four non-executive Directors at the year end, two of whom 
are male and two of whom are female. The Company has no employees and 
the same was true of the previous year. 
 
   Directors' remuneration 
 
   It is a requirement under Companies Act 2006 for Shareholders to approve 
the Directors' remuneration policy every three years, or sooner if the 
Company wishes to make changes to the policy. No changes are being 
proposed to the Directors' remuneration policy. However, as the policy 
was last approved at the Annual General Meeting of the Company on 11 
July 2018, an ordinary resolution will be proposed at the Company's 
Annual General Meeting to approve the Directors' remuneration policy. 
 
   Future prospects 
 
   The Company's future prospects are set out in the Chairman's Statement 
and Investment Manager's Review. 
 
   Despite the economic and social disruption caused by the COVID-19 
pandemic, the Directors do not foresee any major changes in the activity 
undertaken by the Company in the coming year. The Company continues with 
its objective to invest in unquoted companies throughout the United 
Kingdom or with a presence in the United Kingdom, with a view to 
providing both capital growth and dividend income to Shareholders over 
the long term whilst maintaining VCT qualifying status. 
 
   By order of the Board 
 
   Beringea LLP 
 
   Directors' responsibilities statement 
 
   The Board considers that the Annual Report and Accounts, taken as a 
whole, are fair, balanced and understandable and that they provide the 
information necessary for Shareholders to assess the Company's 
performance, business model and strategy. 
 
   The Directors are responsible for preparing the Annual Report and the 
nancial statements in accordance with applicable law and regulations. 
They are also responsible for ensuring that the Annual Report and 
Accounts includes information required by the Listing Rules of the 
Financial Conduct Authority. 
 
   Company law requires the Directors to prepare nancial statements for 
each nancial year. Under that law, the Directors have elected to prepare 
the nancial 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 
nancial statements unless they are satis ed that they give a true and 
fair view of the state of a airs of the Company and of the pro t or loss 
of the Company for that period. 
 
   In preparing the nancial statements, the Directors are required to: 
 
   --        select suitable accounting policies and then apply them 
consistently; 
 
   --        make judgments and accounting estimates that are reasonable 
and prudent; 
 
   --      state whether applicable UK accounting standards have been 
followed, subject to any material departures disclosed and explained in 
the nancial statements; 
 
   --      prepare the nancial statements on the going concern basis unless 
it is inappropriate to presume that the Company will continue in 
business; and 
 
   --      prepare a directors' report, a strategic report and directors 
remuneration report which comply with the Companies Act 2006. 
 
   The Directors are responsible for keeping adequate accounting records 
that are su cient to show and explain the Company's transactions, to 
disclose with reasonable accuracy at any time the nancial position of 
the Company and to enable them to ensure that the nancial 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 that the Annual Report and 
Accounts are made available on a website. Financial statements are 
published on the ProVen VCTs' website (www.provenvcts.co.uk), in 
accordance with legislation in the United Kingdom governing the 
preparation and dissemination of nancial statements, which may vary from 
legislation in other jurisdictions. The Directors' responsibility also 
extends to the ongoing integrity of the nancial statements contained 
therein. The maintenance and integrity of the Company's website is also 
the responsibility of the Directors. 
 
   Directors' responsibilities pursuant to the Disclosure and Transparency 
Rule 4 
 
   Each of the Directors, con rms that to the best of each person's 
knowledge: 
 
   --      the nancial statements, which have been prepared in accordance 
with UK Generally Accepted Accounting Practice, give a true and fair 
view of the assets, liabilities, nancial position and pro t or loss of 
the Company; and 
 
   --      the Directors' Report, Chairman's Statement, Strategic Report, 
Investment Manager's Review and Review of Investments include 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. 
 
   Statement as to disclosure of information to the Auditor 
 
   The Directors in o ce at the date of the report have con rmed, as far as 
they are aware, that there is no relevant audit information of which the 
Auditor is unaware. Each of the Directors con rmed that they have taken 
all the steps that they ought to have taken as Directors in order to 
make themselves aware of any relevant audit information and to establish 
that it has been communicated to the Auditor. This con rmation is given 
and should be interpreted in accordance with the provisions of section 
418 of the Companies Act 2006. 
 
   The Directors' report, which has been approved by the Board, includes 
all relevant information required to be disclosed under LR9.8.4R. 
 
   Income Statement 
 
   for the year ended 28 February 2021 
 
 
 
 
                      Year ended 28 February 
                               2021             Year ended 29 February 2020 
                    Revenue  Capital   Total    Revenue  Capital    Total 
                    GBP'000  GBP'000  GBP'000   GBP'000  GBP'000   GBP'000 
 
 
Income                  328        -       328      430         -       430 
Realised (losses) 
 / gains on 
 investments              -    (237)     (237)        -       325       325 
Unrealised gains / 
 (losses) on 
 investments              -   17,675    17,675        -  (10,082)  (10,082) 
                        328   17,438    17,766      430   (9,757)   (9,327) 
 
Investment 
 management fees      (625)  (1,873)   (2,498)    (608)   (1,822)   (2,430) 
Performance 
incentive 
fees                      -        -         -        -         -         - 
Other expenses        (761)      (4)     (765)    (580)       (7)     (587) 
FX Translation            -     (55)      (55)        -        30        30 
 
(Loss) / return on 
 ordinary 
 activities before 
 tax                (1,058)   15,506    14,448    (758)  (11,556)  (12,314) 
 
Tax on 
ordinary 
activities                -        -         -        -         -         - 
 
(Loss) / return 
 attributable to 
 equity 
 shareholders       (1,058)   15,506    14,448    (758)  (11,556)  (12,314) 
                    -------  -------  --------  -------  --------  -------- 
 
Basic and diluted 
 (loss) / return 
 per share           (0.5p)     7.4p      6.9p   (0.4p)    (6.2p)    (6.6p) 
 
 
   All revenue and capital movements in the year relate to continuing 
operations. No operations were acquired or discontinued during the year. 
The total column within the Income Statement represents the Income 
Statement of the Company, prepared in accordance with the accounting 
policies detailed in note 1 to the nancial statements. The supplementary 
revenue and capital columns are presented for information purposes in 
accordance with the Statement of Recommended Practice issued by the 
Association of Investment Companies. 
 
   A Statement of Comprehensive Income has not been prepared as no items 
have been recognised in 'other comprehensive income' in the current or 
prior year as shown. 
 
   Other than revaluation movements arising on investments held at fair 
value through pro t or loss, there were no di erences between the return 
as stated above and at historical cost. 
 
   The accompanying notes are an integral part of these nancial statements. 
 
   Statement of Changes in Equity 
 
   for the year ended 28 February 2021 
 
   Year ended 28 February 2021 
 
 
 
 
                                              Capital 
                                             redemption  Special        Share        Revaluation       Capital        Revenue 
                   Called up share capital    reserve     reserve   Premium reserve    reserve     reserve- realised   reserve    Total 
                           GBP'000            GBP'000     GBP'000       GBP'000        GBP'000          GBP'000        GBP'000   GBP'000 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
At 1 March 2020                      3,239           58    61,164            40,766      (1,160)              15,667   (2,500)   117,234 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Comprehensive 
Income for the 
year: 
Management fees 
 allocated as 
 capital 
 expenditure                            --           --        --                --           --             (1,873)        --   (1,873) 
Legal fees 
 allocated as 
 capital 
 expense                                --           --        --                --           --                 (4)        --       (4) 
Realised loss on 
 investments                            --           --        --                --           --               (237)        --     (237) 
Unrealised gain 
 on investments                         --           --        --                --       17,675                  --        --    17,675 
Loss after tax                          --           --        --                --           --                  --   (1,058)   (1,058) 
Total 
 comprehensive 
 loss                                   --           --        --                --       17,675             (2,114)   (1,058)    14,503 
 
Contributions by 
and 
distributions to 
owners: 
Issue of new 
 shares                                430           --     (577)            14,890           --                  --        --    14,743 
Share buybacks                        (71)           71   (2,339)                --           --                  --        --   (2,339) 
Dividends paid 
 (includes 
 DRIS)                                  --           --   (7,256)                --           --                  --        --   (7,256) 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Total 
 contributions 
 by and 
 distributions 
 to owners                             359           71  (10,172)            14,890           --                  --        --     5,148 
Other movements: 
Transfer of 
 previously 
 unrealised 
 gains now 
 realised                               --           --        --                --         (52)                  52        --        -- 
FX translation                          --           --        --                --           --                  --      (55)      (55) 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Total other 
 movements                              --           --        --                --         (52)                  52      (55)        55 
At 28 February 
 2021                                3,598          129    50,992            55,656       16,463              13,605   (3,613)   136,830 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
 
 
   Year ended 29 February 2020 
 
 
 
 
                                              Capital 
                                             redemption  Special        Share        Revaluation       Capital        Revenue 
                   Called up share capital    reserve     reserve   Premium reserve    reserve     reserve- realised   reserve    Total 
                           GBP'000            GBP'000     GBP'000       GBP'000        GBP'000          GBP'000        GBP'000   GBP'000 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
At 1 March 2019                      2,331           19    70,856               946        7,043              19,050   (1,772)    98,473 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Comprehensive 
Income for the 
year: 
Management fees 
allocated as 
capital 
expenditure                             --           --        --                --           --             (1,822)        --   (1,822) 
Legal fees 
 allocated as 
 capital 
 expense                                --           --        --                --           --                 (7)        --       (7) 
Realised gain on 
 investments                            --           --        --                --           --                 325        --       325 
Unrealised loss 
 on investments                         --           --        --                --     (10,082)                  --        --  (10,082) 
Loss after tax                          --           --        --                --           --                  --     (758)     (758) 
Performance fee                         --           --        --                --           --                  --        --        -- 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Total 
 comprehensive 
 loss                                   --           --        --                --     (10,082)             (1,504)     (758)  (12,344) 
 
Contributions by 
and 
distributions to 
owners: 
Issue of new 
 shares                                947           --   (1,539)            39,820           --                  --        --    39,228 
Share buybacks                        (39)           39   (1,464)                --           --                  --        --   (1,464) 
Dividends paid 
 (includes 
 DRIS)                                  --           --   (6,689)                --           --                  --        --   (6,689) 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Total 
 contributions 
 by and 
 distributions 
 to owners                             908           39   (9,692)            39,820           --                  --        --    31,075 
Other movements: 
Transfer of 
 previously 
 unrealised 
 gains now 
 realised                               --           --        --                --        1,879             (1,879)        --        -- 
FX translation                          --           --        --                --           --                  --        30        30 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
Total other 
 movements                              --           --        --                --        1,879             (1,879)        30        30 
At 29 February 
 2020                                3,239           58    61,164            40,766      (1,160)              15,667   (2,500)   117,234 
                  ------------------------  -----------  --------  ----------------  -----------  ------------------  --------  -------- 
 
 
   The special reserve, capital reserve -- realised and revenue reserve are 
all distributable reserves. Reserves available for distribution 
therefore amount to GBP60,984,000 (2020: GBP74,331,000). 
 
   During the year the Company repurchased 4,389,276 shares (2020: 
2,442,467) with a nominal value of GBP71,050 (2020: GBP9,213). All 
shares were subsequently cancelled. 
 
   The composition of each of these reserves is explained below: 
 
   Called up share capital - The nominal value of shares issued, increased 
for subsequent share issues either via an offer for subscription or the 
Company's dividend reinvestment scheme, or reduced due to shares bought 
back by the Company for cancellation. 
 
   Capital redemption reserve - The nominal value of shares bought back and 
cancelled. 
 
   Special reserve -- The Company has previously cancelled its share 
premium reserve and capital redemption reserve to create a special 
reserve that can assist in writing off losses, which in turn enhances 
the ability for a company to make distributions and implement share 
buybacks. This is the distributable reserve which is currently used to 
fund shares bought back by the Company for cancellation and share issue 
costs on shares issued under an Offer for Subscription. Dividends that 
are classified as capital may be paid from this reserve. 
 
   Share premium reserve - This reserve contains the excess of gross 
proceeds over the nominal value of shares allotted under offers for 
subscription and the Company's dividend reinvestment scheme, to the 
extent that it has not been cancelled. 
 
   Share capital to be issued -- This reserve contains the amount that has 
been raised under open offers for subscription, but which at the 
relevant period end had not been allotted. 
 
   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, all such movements through both revaluation and capital 
reserve -- realised are shown within the Income Statement for the year. 
 
   Capital reserve realised - 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 of investments; 
 
   -- 75% of the investment manager's fee expense and 100% of any performance 
      incentive fee payable; and 
 
   -- Other capital expenses and charges. 
 
 
   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 dividends paid that are classified as revenue in nature. 
 
   Statement of Financial Position 
 
   as at 28 February 2021 
 
 
 
 
 
 
                                      28 February 2021  29 February 2020 
Fixed assets                              GBP'000           GBP'000 
Investments                                     99,888            77,763 
 
Current assets 
Debtors                                            614               829 
  Cash at bank and in hand                      36,669            39,789 
                                      ----------------  ---------------- 
                                                37,283            40,618 
  Creditors: amounts falling due 
   within one year                               (341)           (1,147) 
 
Net current assets                              36,942            39,471 
 
Total assets less current 
 liabilities                                   136,830           117,234 
                                      ----------------  ---------------- 
 
Capital and reserves 
Called up share capital                          3,598             3,239 
  Capital redemption reserve                       129                58 
Special reserve                                 50,992            61,164 
Share premium                                   55,656            40,766 
  Revaluation reserve                           16,463           (1,160) 
  Capital reserve -- realised                   13,605            15,667 
  Revenue reserve                              (3,613)           (2,500) 
 
Total equity shareholders' funds               136,830           117,234 
                                      ----------------  ---------------- 
Basic and diluted net asset value                61.5p             58.6p 
 per share 
 
   Statement of Cash Flows 
 
   for the year ended 28 February 2021 
 
 
 
 
                                                         Year     Year ended 
                                                       ended 28       29 
                                                       February    February 
                                                         2021        2020 
                                                         Total      Total 
                                                        GBP'000    GBP'000 
  (Loss)/return on ordinary activities before 
   taxation                                               14,448    (12,314) 
  Loss/(Gain) on investments                            (17,438)       9,757 
  Increase in prepayments, accrued income and other 
   debtors                                                   185       (318) 
  Decrease in accruals and other creditors                 (266)       (240) 
                                                       ---------  ---------- 
  Net cash used in operating activities                  (3,071)     (3,115) 
                                                       ---------  ---------- 
 
  Cash flows from investing activities 
Purchase of investments                                 (10,010)    (25,616) 
Sale of investments                                        5,354         835 
                                                       ---------  ---------- 
  Net cash from investing activities                     (4,656)    (24,781) 
                                                       ---------  ---------- 
 
  Cash flows from financing activities 
Proceeds from share issues                                14,201      39,735 
Share issue costs                                          (577)     (1,539) 
Purchase of own shares                                   (2,880)     (1,230) 
Equity dividends paid                                    (6,137)     (5,661) 
  Net cash used in financing                               4,607      31,305 
                                                       ---------  ---------- 
 
  Increase/(decrease) in cash and cash equivalents       (3,120)       3,409 
                                                       ---------  ---------- 
  Cash at beginning of year                               39,789      36,380 
                                                       ---------  ---------- 
  Cash at end of year                                     36,669      39,789 
                                                       ---------  ---------- 
 
 
   'Net cash used in operating activities' includes interest received of 
GBP584,000, (2020: GBP273,000) and dividends received of GBP 1,000 
(2020: GBPnil). No interest was paid during the year. 
 
   Notes to the Announcement 
 
   for the year ended 28 February 2021 
 
 
   1. Accounting policies 
 
   Basis of preparation 
 
   The Company has prepared its nancial statements under Financial 
Reporting Standard 102 ("FRS102") and in accordance with the Statement 
of Recommended Practice 'Financial Statements of Investment Trust 
Companies and Venture Capital Trusts' (the "SORP") issued by the 
Association of Investment Companies ("AIC"), which was revised in 
December 2018. 
 
   The nancial statements are prepared under the historical cost convention 
except for the revaluation of certain nancial instruments measured at 
fair value. 
 
   The following accounting policies have been applied consistently 
throughout the period. 
 
   Going concern 
 
   The Directors have, at the time of approving the nancial statements, a 
reasonable expectation that the Company has adequate resources to 
continue in operational existence for the foreseeable future. Thus they 
continue to adopt the going concern basis of accounting in preparing the 
nancial statements. 
 
   Presentation of Income Statement 
 
   In order to better re ect the activities of an investment company and, 
in accordance with guidance issued by the 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 return attributable to equity shareholders is the measure the 
Directors believe appropriate in assessing the Company's compliance with 
certain requirements set out in Part 6 of the Income Tax Act 2007. 
 
   Investments 
 
   Investments, including equity and loan stock, are recognised at their 
trade date and measured at "fair value through pro t or loss" due to 
investments being managed and performance evaluated on a fair value 
basis. A nancial asset is designated within this category if it is both 
acquired and managed, with a view to selling after a period of time, in 
accordance with the Company's documented investment policy. The fair 
value of an investment upon acquisition is deemed to be cost. Thereafter 
investments are measured at fair value in accordance with International 
Private Equity and Venture Capital Valuation Guidelines ("IPEV 
Guidelines") issued in December 2018, together with sections 11 and 12 
of FRS102. 
 
   Publicly traded investments are measured using bid prices in accordance 
with the IPEV Guidelines. 
 
   Key judgements 
 
   The valuation methodologies used by the Directors for estimating the 
fair value of unquoted investments are as follows: 
 
 
   -- where a company is in the early stage of development, the estimate of 
      fair value is based on market data and assumptions as to the potential 
      outcomes, benchmarked against alternative valuation methodologies during 
      this time; 
 
   -- where a company is well established after an appropriate period, the 
      investment may be valued by applying a suitable earnings revenue or 
      transaction multiple to that company's maintainable earnings or revenue. 
      The multiple used is based on comparable listed companies or a sector but 
      discounted to reflect factors such as the different sizes of the 
      comparable businesses, different growth rates and the lack of 
      marketability of unquoted shares; 
 
   -- where a value is indicated by a material arms-length transaction by a 
      third party in the shares of the company the valuation will normally be 
      based on this, whilst also being benchmarked against alternative 
      valuation methodologies; 
 
   -- where alternative methods of valuation, such as net assets of the 
      business, are more appropriate then such methods may be used; and 
 
   -- where repayment of the equity is not probable, redemption premiums will 
      be recognised. 
 
 
   The methodology applied takes account of the nature, facts and 
circumstances of the individual investment and uses reasonable data, 
market inputs, assumptions and estimates in order to ascertain fair 
value. Methodologies are applied consistently from year to year except 
where a change results in a better estimate of fair value. 
 
   Where an investee company has gone into receivership or liquidation, or 
the loss in value below cost is considered to be permanent, or there is 
little likelihood of a recovery from a company in administration, the 
loss on the investment, although not physically disposed of, is treated 
as being realised. 
 
   All investee companies are held as part of an investment portfolio and 
measured at fair value. Therefore, it is not the policy for investee 
companies to be consolidated and any gains or losses arising from 
changes in fair value are included in the Income Statement for the 
period as a capital item. 
 
   Gains and losses arising from changes in fair value are included in the 
Income Statement for the year as a capital item and transaction costs on 
acquisition or disposal of the investment are expensed. Investments are 
derecognised when the contractual rights to the cash ows from the asset 
expire or the Company transfers the asset and substantially all the 
risks and rewards of ownership of the asset to another entity. 
 
   Key estimates 
 
   The key estimates involved in determining the fair value of a company 
can include: 
 
   --        identifying a relevant basket of market comparables; 
 
   --        deducing the discount to take on those market comparables; 
 
   --        determining reoccurring revenue; 
 
   --        determining reoccurring earnings; or 
 
   --        identifying surplus cash. 
 
   Fair value 
 
   Fair value is defined as the amount for which an asset could be 
exchanged between knowledgeable, willing parties in an arm's length 
transaction. The Company has categorised its financial instruments that 
are measured subsequent to initial recognition at fair value, using the 
fair value hierarchy as follows: 
 
   Level 1: The unadjusted quoted price in an active market for identical 
assets or liabilities that the entity can access at the measurement 
date. 
 
   Level 2: Inputs other than quoted prices included within Level 1 that 
are observable (i.e., developed using market data) for the asset or 
liability, either directly or indirectly. 
 
   Level 3: Inputs are unobservable (i.e., for which market data is 
unavailable) for the asset or liability. 
 
   Income 
 
   Dividend income from investments is recognised when the shareholders' 
rights to receive payment has been established, normally the ex-dividend 
date. 
 
   Interest income is accrued on a time basis, by reference to the 
principal outstanding and at the effective interest rate applicable and 
only where there is reasonable certainty of collection in the 
foreseeable future. Income which is not capable of being received within 
a reasonable period of time is reflected in the capital value of the 
investments. A provision is made for any fixed income not expected to be 
received. 
 
   Expenses 
 
   All expenses are accounted for on an accruals basis. In respect of the 
analysis between revenue and capital items presented within the Income 
Statement, all expenses have been presented as revenue items except as 
follows: 
 
 
   -- expenses which are incidental to the acquisition of an investment are 
      deducted from the Capital Account; 
 
   -- expenses which are incidental to the disposal of an investment are 
      deducted from the disposal proceeds of the investment; 
 
   -- expenses are split and presented partly as capital items where a 
      connection with the maintenance or enhancement of the value of the 
      investments held can be demonstrated. Accordingly, the investment 
      management fee has been allocated 25% to revenue and 75% to capital in 
      order to reflect the Directors' expected long-term view of the nature of 
      the investment returns of the Company; and 
 
   -- performance incentive fees are treated as a capital item. 
 
   Taxation 
 
   The tax effects of different items in the Income Statement are allocated 
between capital and revenue on the same basis as the particular item to 
which they relate using the Company's effective rate of tax for the 
accounting period. 
 
   Due to the Company's status as a venture capital trust and the continued 
intention to meet the conditions required to comply with Part 6 of the 
Income Tax Act 2007, no provision for taxation is required in respect of 
any realised or unrealised appreciation of the Company's investments. 
 
   Deferred taxation, which is not discounted, is provided in full on 
timing differences that result in an obligation at the balance sheet 
date to pay more tax, or a right to pay less tax, at a future date, at 
rates expected to apply when they crystallise based on current tax rates 
and law. 
 
   Timing differences arise from the inclusion of items of income and 
expenditure in taxation computations in periods different from those in 
which they are included in the financial statements. Deferred tax assets 
are recognised to the extent that it is regarded as more likely than not 
that they will be recovered. 
 
   Share issue costs 
 
   Expenses in relation to share issues are deducted from the Special 
Reserve. 
 
   Cash 
 
   Cash comprises cash on hand and demand deposits. 
 
   Debtors 
 
   Short term debtors are initially measured at transaction price. 
Subsequent remeasurement deducts any impairment from the transaction 
price. 
 
   Creditors 
 
   Short term trade creditors are initially and subsequently measured at 
the transaction price. 
 
   2        Basic and diluted return per share 
 
 
 
 
                           Year ended 28 February    Year ended 29 February 
                                    2021                      2020 
Revenue (loss)/ return 
per share based on: 
Net revenue loss after 
 taxation (GBP'000)                        (1,058)                     (758) 
 
Weighted average number 
 of shares in issue                    209,550,403               187,733,719 
 
Pence per share                             (0.5p)                    (0.4p) 
 
Capital return per share 
based on: 
Net capital return for 
 the financial year 
 (GBP'000)                                  15,506                  (11,556) 
 
Weighted average number 
 of shares in issue                    209,550,403               187,733,719 
 
Pence per share                               7.4p                    (6.2p) 
 
Total return per share 
based on: 
Total return for the 
 financial year 
 (GBP'000)                                  14,448                  (12,314) 
 
Weighted average number 
 of shares in issue                    209,550,403               187,733,719 
 
Pence per share                               6.9p                    (6.6p) 
 
 
   As the Company has not issued any convertible securities or share 
options, there is no dilutive e ect on return per share. The return per 
share disclosed therefore represents both basic and diluted return per 
share. 
 
   3        Basic and diluted net asset value per share 
 
 
 
 
                                    2021                         2020 
               Shares in issue       Net asset value  Net asset value 
                                     Pence            Pence 
                                      per              per 
               2021         2020     share   GBP'000  share   GBP'000 
Ordinary 
 Shares    222,333,613  200,137,231   61.5   136,830   58.6   117,234 
                                             136,830          117,234 
                                            --------         -------- 
 
 
 
   As the Company has not issued any convertible securities or share 
options, there is no dilutive e ect on net asset value per share. The 
net asset value per share disclosed therefore represents both basic and 
diluted return per share. 
 
   4        Principal risks and management objectives 
 
   The Company's investment activities expose the Company to a number of 
risks associated with nancial instruments and the sectors in which the 
Company invests. The principal nancial risks arising from the Company's 
operations are: 
 
   --        Market risks; 
 
   --        Credit risk; and 
 
   --        Liquidity risk. 
 
   The Board regularly reviews these risks and the policies in place for 
managing them. Save for the economic and social impact of the 
Coronavirus pandemic, there have been no signi cant changes to the 
nature of the risks that the Company is exposed to over the year and 
there have also been no signi cant changes to the policies for managing 
those risks during the year. 
 
   The risk management policies used by the Company in respect of the 
principal nancial risks and a review of the nancial instruments held at 
the year-end are provided below: 
 
   Market risks 
 
   As a VCT, the Company is exposed to market risks in the form of 
potential losses and gains that may arise on the investments it holds. 
The management of these market risks is a fundamental part of investment 
activities undertaken by the Investment Manager and overseen by the 
Board. The Investment Manager monitors investments through regular 
contact with the management of investee companies, regular review of 
management accounts and other nancial information and attendance at 
investee company board meetings. This enables the Investment Manager to 
manage the investment risk in respect of individual investments. Market 
risk is also mitigated by holding a portfolio diversi ed across several 
business sectors and asset classes. 
 
   The key market risks to which the Company is exposed are: 
 
   --        Market price risk; and 
 
   --        Interest rate risk. 
 
   Market price risk 
 
   Market price risk arises from uncertainty about the future prices and 
valuations of nancial instruments held in accordance with the Company's 
investment objectives. It represents the potential loss that the Company 
might su er through market price movements in respect of quoted 
investments and also changes in the fair value of unquoted investments 
that it holds. 
 
   At 28 February 2021, the AIM-quoted portfolio was valued at GBP363,000 
(2020: GBP193,000). 
 
   The Company's sensitivity to uctuations in the share prices of its 
AIM-quoted investments is summarised below. A 20% movement in the share 
price of all of the AIM-quoted investments held by the Company would 
have an e ect as follows: 
 
 
 
 
20% movement in 
AIM-quoted 
investments                        2021                         2020 
                  Impact on   Impact on NAV    Impact on    Impact on NAV 
                  net assets    per share      net assets     per share 
                   GBP'000        Pence         GBP'000         Pence 
AIM-quoted 
 investments              73            0.0p           38             0.0p 
 
 
   At 28 February 2021, the unquoted portfolio was valued at GBP99,525,000 
(2020: GBP77,570,000). 
 
   As many of the Company's unquoted investments are valued using revenue 
or earnings multiples of comparable companies or sectors, a fall in 
share prices generally would impact on the valuation of the unquoted 
portfolio. A 20% movement in the valuations of all of the unquoted 
investments held by the Company would have an e ect as follows: 
 
 
 
 
20% movement in unquoted 
investment valuations               2021                         2020 
                  Impact on     Impact on NAV   Impact on     Impact on 
                  net assets      per share     net assets   NAV per share 
                   GBP'000          Pence        GBP'000        Pence 
Unquoted 
 investments            19,905           9.0p       15,514            7.8p 
 
 
   The sensitivity analysis for unquoted valuations above assumes that each 
of the sub-categories of nancial instruments (ordinary shares, 
preference shares and loan stocks) held by the Company produces an 
overall movement of 20%. Shareholders should note that equal correlation 
between these sub-categories is unlikely to be the case in reality, 
particularly in the case of loan stock instruments. Where share prices 
are falling, the equity instrument could fall in value before the loan 
stock instrument. It is not considered practical to assess the 
sensitivity of the loan stock instruments to market price risk in 
isolation. 
 
   Interest rate risk 
 
   The Company is exposed to interest rate risk on floating-rate financial 
assets through the effect of changes in prevailing interest rates. The 
Company receives interest on its cash deposits at a rate agreed with its 
bankers. Investments in loan stock attract interest predominantly at 
fixed rates. A summary of the interest rate profile of the Company's 
financial instruments is shown below. 
 
   There are three categories in respect of interest which are attributable 
to the financial instruments held by the Company as follows: 
 
 
   -- "Fixed rate" assets represent investments with predetermined yield 
      targets and comprise certain loan note investments. 
 
   -- "Floating rate" assets predominantly bear interest at rates linked to 
      Bank of England base rate or LIBOR and comprise cash at bank and certain 
      loan note investments. 
 
   -- "No interest rate" assets do not attract interest and comprise equity 
      investments, certain loan note investments, loans and receivables 
      (excluding cash at bank) and other financial liabilities. 
 
 
 
 
                      Average     Average period   2021     2020 
                   interest rate  until maturity  GBP'000  GBP'000 
Fixed rate                  5.6%        190 days   11,762   16,237 
Floating rate               0.3%          0 days   36,741   39,847 
No interest rate                                   88,327   61,150 
                                                  -------  ------- 
                                                  136,830  117,234 
                                                  -------  ------- 
 
 
   The Company monitors the level of income received from xed, oating and 
non-interest bearing assets and, if appropriate, may make adjustments to 
the allocation between the categories, in particular should this be 
required to ensure compliance with the VCT regulations. 
 
   Based on the assumption that the yield of all oating rate nancial 
instruments would change by an amount equal to the movement in 
prevailing interest rates, it is estimated that an increase of 1% in 
interest rates would have increased total return before taxation for the 
year by GBP367,000 (2020: GBP399,000). Given the low level of interest 
rates through the year, a further decrease in interest rates is not 
considered likely. 
 
   Credit risk 
 
   Credit risk is the risk that a counterparty to a nancial instrument is 
unable to discharge a commitment to the Company made under that 
instrument. The Company is exposed to credit risk through its 
investments in cash deposits and debtors. Credit risk relating to loan 
stock investee companies is considered to be part of market risk. 
 
   The Company is exposed to credit risk as follows: 
 
 
 
 
                                              2021     2020 
                                             GBP'000  GBP'000 
Cash and cash equivalents                     36,669   39,789 
Interest, dividends and other receivables        295      524 
                                             -------  ------- 
                                              36,964   40,313 
                                             -------  ------- 
 
 
   The management of credit risk associated with interest, dividends and 
other receivables is covered within the investment management 
procedures. 
 
   Cash is mainly held by the Royal Bank of Scotland plc, rated A and A+ by 
Standard and Poor's and Fitch, respectively, and is also ultimately 
part-owned by the UK Government. Consequently, the Directors consider 
that the risk pro le associated with cash deposits is low. 
 
   There have been no changes in fair value during the year that are 
directly attributable to changes in credit risk. 
 
   Liquidity risk 
 
   Liquidity risk is the risk that the Company encounters di culties in 
meeting obligations associated with its nancial liabilities. Liquidity 
risk may also arise from either the inability to sell nancial 
instruments when required at their fair values or from the inability to 
generate cash in ows as required. The Company maintains a relatively low 
level of creditors (GBP341,000 relative to cash balances of GBP36.7 
million at 28 February 2021) and has no borrowings. 
 
   The Company always holds su cient levels of funds as cash in order to 
meet expenses and other cash out ows as required. For these reasons, the 
Board believes that the Company's exposure to liquidity risk is minimal. 
 
   The Company's liquidity risk is managed by the Investment Manager in 
line with guidance agreed with the Board and is reviewed by the Board at 
regular intervals. 
 
   Although the Company's investments are not held to meet the Company's 
liquidity requirements, the table below shows an analysis of the loan 
notes, highlighting the length of time that it could take the Company to 
realise its loan stock assets if it were required to do so. 
 
   The carrying value of loan stock investments (as opposed to the 
contractual cash ows) at 28 February 2021 as analysed by expected 
maturity date is as follows: 
 
 
 
 
                        Not later  Between  Between  Between   More 
                         than 1    1 and 2  2 and 3  3 and 5   than     Total 
                          years     years    years    years   5 years   Total 
As at 28 February 2021   GBP'000   GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
Fully performing loan 
 stock                        991       --       --      314    1,829    3,134 
Past due loan stock         8,700       --       --       --        -    8,700 
                        ---------  -------  -------  -------  -------  ------- 
                            9,691       --       --      314    1,829   11,834 
                        ---------  -------  -------  -------  -------  ------- 
 
As at 29 February 2020 
Fully performing loan 
 stock                     10,909       --       --      314    4,004   15,227 
Past due loan stock            --       --       --       --    1,068    1,068 
                        ---------  -------  -------  -------  -------  ------- 
                           10,909       --       --      314    5,072   16,295 
                        ---------  -------  -------  -------  -------  ------- 
 
 
   Of the loan stock classi ed as "past due" above, the full amount relates 
to the principal of loan notes where the principal has passed its 
maturity date. 
 
   Fair Value of Financial Instruments 
 
   Fair value measurements recognised in the balance sheet 
 
   Investments are valued at fair value as determined using the measurement 
policies described in note 1. The carrying value of financial assets and 
liabilities recorded at amortised cost, which includes short term 
debtors and creditors, is considered by Directors to be equivalent to 
their fair value. 
 
   The Company has categorised its financial instruments that are measured 
subsequent to initial recognition at fair value, using the fair value 
hierarchy as follows: 
 
   Level 1        Reflects financial instruments quoted in an active 
market. 
 
   Level 2        Reflects financial instruments that have been valued 
using inputs, other than quoted prices, that are observable. 
 
   Level 3        Reflects financial instruments that have been valued 
using valuation techniques with unobservable inputs. 
 
 
 
 
                        2021                                2020 
              Level 1  Level 2  Level 3    Total  Level 1  Level 2  Level 3    Total 
              GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
AIM quoted        363       --       --      363      193       --       --      193 
Loan notes         --       --   11,834   11,834       --       --   16,295   16,295 
Unquoted 
 investments       --       --   87,691   87,691       --       --   61,275   61,275 
              -------  -------  -------  -------  -------  -------  -------  ------- 
                  363       --   99,525   99,888      193       --   77,570   77,763 
              -------  -------  -------  -------  -------  -------  -------  ------- 
 
   There have been no movements between levels during the financial year to 
28 February 2021. 
 
   Reconciliation of fair value for Level 3 financial instruments held at 
the year end 
 
 
 
 
                                    Loan 
                                    Notes   Unquoted equity         Total 
                                   GBP'000         GBP'000         GBP'000 
      Balance at 1 March 
       2020                         16,295           61,275         77,570 
                             -------------  ---------------  ------------- 
      Movements in the 
      income statement: 
      Gains in the income 
       statement                   (1,402)           18,670         17,268 
                             -------------  ---------------  ------------- 
 
      Purchases at cost              1,704            8,306         10,010 
      Sales proceeds               (4,763)            (560)        (5,323) 
 
      Balance at 28 
       February 2021                11,834           87,691         99,525 
                             -------------  ---------------  ------------- 
 
 
   There is an element of judgment in the choice of assumptions for 
unquoted investments. If di erent assumptions were used, di erent 
valuations could have been attributed to certain of the VCT's 
investments. 
 
   5        Post balance sheet events 
 
   Between 28 February 2021 and the date of this report, the Company issued 
31,760,207 Ordinary Shares for an aggregate consideration of GBP20 
million under the combined offer for subscription with ProVen VCT plc 
which launched on 3 December 2020. Share issue costs thereon amounted to 
GBP899,000. 
 
   On 22 March 2021, the Company bought back 274,661 Ordinary Shares at a 
price of 57p per share and for an aggregate consideration of GBP157,000. 
All shares were subsequently cancelled. 
 
   In March 2021, the Company invested in two new companies, namely 
Moonshot CVE Holdings Ltd and Utilis SAR Ltd. 
 
   GBP1.1 million was invested in Moonshot, a business with a mission to 
reach those at risk of violent extremism and offer them an alternative 
path. From digital capacity building to counter-messaging campaigns, 
Moonshot uses data-proven techniques to ensure its clients respond to 
violent extremism effectively all over the world. 
 
   Utilis received GBP2.1 million. The company uses satellite-based 
technology and a patented algorithm derived from techniques developed to 
search for water on Mars to detect drinking water leaks. With the 
potable leak detection product first commercialised in 2016, over 250 
projects have been completed worldwide in countries including the United 
States, Italy, the UK, Chile, China and South Africa, leading to almost 
20,000 leaks verified and saving customers 5,000 million gallons a year. 
 
   In April 2021, a further GBP277,000 was invested in Hygenica. This was 
to fund a working capital call caused by a surge in demand for the 
company's product. 
 
   In March 2021, there was a part-disposal of the Company's holding in 
MPB. The Company received GBP0.8 million in disposal proceeds. Having 
performed well since the initial investment by the Company in February 
2018, MPB decided to raise additional capital to accelerate its growth. 
The Company was unable to participate in this investment round owing to 
restrictions imposed by the VCT regulations. As part of the funding 
round, however, the Company had the opportunity to sell some of its 
existing shares, crystalising a 2.75x return on the initial investment 
on the shares sold, whilst also retaining 70% of its original holding. 
 
   In April 2021, the Company's holding in Response Tap was also sold. The 
Company received initial proceeds of GBP0.95 million. Additional 
proceeds are expected in the coming months. 
 
   Announcement based on audited accounts 
 
   The financial information set out in this announcement does not 
constitute the Company's statutory financial statements in accordance 
with section 434 Companies Act 2006 for the year ended 28 February 2021, 
but has been extracted from the statutory financial statements for the 
year ended 28 February 2021, which were approved by the Board of 
Directors on 3 June 2021 and will be delivered to the Registrar of 
Companies following the Company's Annual General Meeting.  The 
Independent Auditor's Report on those financial statements was 
unqualified and did not contain any emphasis of matter nor statements 
under s 498(2) and (3) of the Companies Act 2006. 
 
   The statutory accounts for the year ended 29 February 2020 have been 
delivered to the Registrar of Companies and received an Independent 
Auditors report which was unqualified and did not contain any emphasis 
of matter nor statements under S498(2) and (3) of the Companies Act 
2006. 
 
   A copy of the full annual report and financial statements for the year 
ended 28 February 2021 will be made available to Shareholders shortly. 
Copies will also be available for download from www.provenvcts.co.uk 
 
   End 
 
 
 
 
 
 

(END) Dow Jones Newswires

June 07, 2021 11:34 ET (15:34 GMT)

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