TIDMPGOO 
 
   PROVEN GROWTH AND INCOME VCT PLC 
 
   ANNUAL FINANCIAL REPORT 
 
   YEARED 29 FEBRUARY 2020 
 
   ProVen Growth and Income VCT plc, managed by Beringea LLP, today 
announces the final results for the year ended 29 February 2020. These 
results were approved by the Board of Directors on 1 July 2020. 
 
 
 
 
 
   You may, in due course, view the Annual Financial Report in full at 
https://www.globenewswire.com/Tracker?data=3aSoHewhtv85eraUrtfiQPDasMnJ33-k56ck79zOxKozZTgBDTKDuyI52LihUYDiMNc4_XgX6ke22PqaofbiN4N7egtJAYRbdmTS5palbPU= 
www.provenvcts.co.uk.  All other statutory information can also be found 
there. 
 
   Financial summary 
 
 
 
 
                                                           29 
                                                        February 
                                                          2020     28 February 
Ordinary Shares as at:                                   Pence     2019 Pence 
Net asset value per Ordinary Share                           58.6         68.4 
Dividends paid since class launch (originally as 'C' 
 Shares)                                                     64.4         60.9 
Total return (net asset value plus dividends paid 
 since 'C' Share class launch)                              123.0        129.3 
Year on year change in: 
Net asset value per share (adjusted for dividends 
 paid in the year)                                         (9.2%)         3.9% 
 
   Chairman's Statement 
 
   I present the Annual Report for ProVen Growth and Income VCT plc (the 
"Company") for the year ended 29 February 2020. This report focuses 
primarily on the year to 29 February but as Shareholders are all aware, 
subsequent to the year end, the Coronavirus pandemic occurred which had 
a signi cant impact on the economy as a whole and on the Company. The 
portfolio has been regularly reviewed in this time and a new NAV was 
released in March in advance of the share allotments in early April 
under the Company's most recent o er for subscription. 
 
   Results for the year 
 
   Over the year, there was a decrease in Shareholder total return (net 
asset value ("NAV") per share plus dividends) of 9.2% which was largely 
attributable to the decrease in valuation of four companies. The 
Company's NAV per share fell from 68.4p at 28 February 2019 to 58.6p at 
29 February 2020. This included a reduction of 3.5p in relation to 
dividend payments. 
 
   The total loss on ordinary activities for the year was GBP12.3 million 
(2019: pro t of GBP3.8 million), comprising a revenue loss of 
GBP758,000, or 0.4p per share, (2019: revenue loss of GBP736,000, 0.5p 
per share) and a capital loss of GBP11.6 million, or 6.2p per share 
(2019: pro t of GBP4.6 million, 3.2p per share). This capital loss was 
largely caused by an aggregate decrease of GBP10.2 million in the 
valuation of four portfolio companies. 
 
   Dividends 
 
   During the year ended 29 February 2020, the Company paid a nal dividend 
of 2.0p per share in respect of the year ended 28 February 2019 on 19 
July 2019 and an interim dividend of 1.5p per share was paid in respect 
of the year ended 29 February 2020 on 6 December 2019. 
 
   Your Board is proposing a nal dividend for the year ended 29 February 
2020 of 1.75p per share to be paid on 28 August 2020 to Shareholders on 
the register at 7 August 2020. With total tax-free dividends of 3.25p 
per share for the year ended 29 February 2020, this represents cash 
returned to Shareholders of 5.0% on the opening NAV per share at 1 March 
2019 after deducting the prior year nal dividend of 2.0p per share. 
 
   Portfolio activity and valuation 
 
   Following a period of several years during which a number of pro table 
disposals generated strong returns for Shareholders, the focus during 
the year has been on supporting the existing portfolio and adding new 
investments. 
 
   The Company invested a total of GBP25.6 million during the year. Six new 
companies were added to the portfolio, at a cost of GBP17.3 million. As 
is the nature of early stage investing, there is usually a delay before 
the bene t of the Company's investment is re ected in the performance of 
the portfolio company. We would not, therefore, expect to recognise an 
increase in valuation of new investments for some time. 
 
   The Company also provided further investment, totalling GBP8.3m, to 
seven of the companies which the Company has invested in during the last 
few years. Further details of all these investments are provided in the 
Investment Manager's Review. 
 
   The performance of the companies in the portfolio during this year in 
particular has been mixed. This is to be expected given the Company has 
a relatively young portfolio of venture capital investments which can 
take time to bed down and generate returns. Some companies saw increases 
in valuation o the back of strong trading, whereas others declined in 
value as a result of di cult trading as well as reduced multiples. The 
portfolio had an overall decrease in value of GBP10.1 million in the 
year (2019: increase of GBP3.4m). It is important to remember that 
investment in venture capital should be considered as a long-term 
investment and returns should be measured over the medium term, not a 
single year. 
 
   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 o er for 
subscription with ProVen VCT plc launched on 11 January 2019 to raise up 
to a total of GBP30 million per company, with an over-allotment facility 
of GBP10 million per company, was fully subscribed due to strong 
investor demand. 
 
   The Company launched a further combined o er for subscription with 
ProVen VCT plc on 27 January 2020 to raise up to GBP10 million per 
company, with an over-allotment facility of GBP10 million per company, 
which the Board utilised in part in the amount of up to GBP5 million per 
company. The o er closed to new applications on 19 March 2020 with 
 
   GBP14.2 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 su cient 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 2,422,467 Ordinary Shares at an 
average price of 60.1p per share and for an aggregate consideration of 
GBP1,456,000. This represented 1.7% 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 signi cant 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. 
 
   Based on the NAV per share at 29 February 2020, no performance fee is 
accrued at the year-end as the performance hurdles were not met and as 
such no present obligation exists and therefore no liability has been 
recognised. 
 
   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 recently announced James Stewart will resign as a 
Director following this year's AGM. James has served as a director of 
the Company since February 2001, and his sound stewardship and 
commercial judgement have played a signi cant part in the Company's 
success. The Board would like to thank James for his valuable 
contribution over the years, we will miss him as a friend as well as a 
colleague. We are delighted that Anna Kuriakose will replace James as 
the Audit Committee Chairman. 
 
   Apart from James's resignation and the appointment of Anna as mentioned 
in the interim report and accounts, there have been no other changes to 
the Board. 
 
   Annual General Meeting 
 
   In planning our AGM we have sought to prioritise the safety and 
wellbeing of our Shareholders and employees. In light of the current 
Coronavirus 'social distancing' measures in England, and the legislative 
measures that have been proposed to allow companies to hold general 
meetings safely, the AGM will be held as a closed AGM and Shareholders 
will not be able to attend the AGM this year. The meeting will still 
comply with the minimum legal requirements for an AGM. 
 
   The closed AGM will be held at 1.30 p.m. on Monday 10 August 2020 via 
electronic means. Full details of the business to be conducted at the 
AGM are given in the formal Notice of Annual General  Meeting which will 
be sent to Shareholders by their preferred method in due course. 
Resolution 12 proposes a change to the Company's Articles of Association 
that will allow Shareholders to participate remotely in future AGMs. A 
copy of the proposed new articles of association is available on the 
website at https://www.provenvcts.co.uk/. 
 
   Shareholders are encouraged to submit their votes by proxy, as they will 
not be able to do so in person. In addition, we strongly recommend 
voting electronically at www.signalshares.com as your vote will 
automatically be counted. Given the current situation, with many people 
working from home and delays in the postal system, there is a risk that 
your vote may not be counted if you send a paper proxy. 
 
   We always welcome questions from our Shareholders at the AGM but this 
year, given the restrictions in place, please send any questions via 
email to info@beringea.co.uk by 5:00 pm on Monday 3 August 2020. Answers 
to the themes in the questions received will be addressed on the website 
at https://www.provenvcts.co.uk/. In addition, the Company's annual 
Shareholder event will proceed in the Autumn, albeit in a di erent 
format (further details below). 
 
   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. It is with 
this in mind that we are seeking to ensure that we can continue to 
deliver the Shareholder event in the current environment. 
 
   Therefore, in order to ensure the safety and wellbeing of our 
Shareholders, employees and portfolio companies, we will be hosting our 
rst fully-digital Shareholder Day in the Autumn, 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. 
 
   We will soon distribute invitations to this digital event, as well as 
providing you with further information on the format and logistics for 
the day and we would encourage you to join us for the session. 
 
   Outlook 
 
   The combination of Brexit and COVID 19 has provided an unprecedented 
economic, social and political backdrop for the market as a whole. 
Despite this, the Company has been able to remain active and productive 
and managed to deliver a successful fundraise, provide important 
resources to support our portfolio and continue to harness a resilient 
pipeline of investment opportunities. 
 
 
 
   Subsequent to the year-end, the economic and commercial turbulence 
created by the Coronavirus pandemic has resulted in a revaluation of the 
portfolio to take account of the context in which we are now operating 
and the announcement of a reduced net asset value in March of 54.6p per 
share. 
 
   The Company has been pleased to see how the Investment Manager has 
guided the portfolio companies through the immediate shock of the 
outbreak and it is now working alongside these portfolio companies to 
help them prepare and adapt to the trading environment. The Directors of 
the Company will continue to monitor the performance of the portfolio 
carefully and will announce a new net asset value per share if there is 
a material movement in valuations. 
 
   We warmly welcome our new Shareholders who joined the fund as part of 
the share o er that successfully closed in March. The funds raised 
provide the Company with additional resources to support our existing 
portfolio through any prolonged economic disruption, and ensure that it 
is able to harness a pipeline of investment opportunities that remains 
resilient. The Investment Manager has continued to do this following a 
successful transition to operating remotely during the lockdown, with 
recent additions to the portfolio and follow-on investments completed 
through an entirely digital process. 
 
   Despite the current challenging economic and social conditions, the 
Board remains con dent that the Company has resilient long-term 
prospects. 
 
   Marc Vlessing OBE 
 
   Chairman 
 
   Investment Manager's Review 
 
   Introduction 
 
   Following a number of successful realisations in the last couple of 
years, the focus this year was on investing into new portfolio companies 
as well as supporting the current portfolio. During the year, a total of 
GBP17.3 million was invested in six new portfolio companies and GBP8.3 
million in seven existing portfolio companies. 
 
   At 29 February 2020, the Company's venture capital portfolio comprised 
46 investments at a cost of GBP84.2 million and a valuation of GBP77.8 
million, an overall decrease of 7.7% on cost. 
 
   Subsequent to the year end the Company issued 24,518,370 Ordinary Shares 
for an aggregate consideration of GBP14.2 million under the combined o 
er for subscription with ProVen VCT plc which launched on 27 January 
2020. Share issue costs thereon amounted to GBP577,000. The Company 
remains well capitalised to take advantage of new investment 
opportunities and support existing portfolio companies where 
appropriate. 
 
   Investment activity 
 
   New investments 
 
   We continued to experience a strong level of deal ow, with GBP17.3 
million being invested during the year in six new portfolio companies. 
 
   The new investments in the year are: 
 
   --              Sannpa Limited (t/a Fnatic) (GBP5.9m) -- an eSports team 
owner and lifestyle brand, with professional teams in the most popular 
games such as League of Legends, Dota 2 and Battle eld 4; 
 
   --              Papier Ltd (GBP3.15m) -- an online stationery retailer, 
specialising in unique curated collections; 
 
   --              Our Path Ltd (t/a Second Nature) (GBP2.8m) -- a provider 
of a digital healthcoaching app, with an evidence-based program for 
lifestyle change and diabetes prevention/weight loss; 
 
   --              Arctic Shores Limited (GBP2.45m) -- a provider of 
data-driven psychometric tests combining neuroscience, arti cial 
intelligence and game technology for more predictive and less biased 
employee recruitment; 
 
   --              Stylescape Limited (t/a EDITED) (GBP1.50m) -- a SaaS 
provider of pricing and product intelligence for apparel and fashion 
retailers; and 
 
   --              Picasso Labs, Inc. (GBP1.47m) - an automated creative 
measurement platform that aims to enhance creativity through 
objectivity. Their technology is used globally by Fortune 500 brands 
like Unilever, Mondelez, and Heineken to measure creative e ciency, 
consistency, and impact across all creatives worldwide. 
 
   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: Mycs (GBP1.8m), ContactEngine 
(GBP1.6m), Aistemos (GBP1.4m), Thread (GBP1.4m), Festicket (GBP0.9m), 
MPB (GBP0.7m) and POQ (GBP0.5m). 
 
   Investment disposals 
 
   As reported in the interim statement, the Company's shareholding in 
7digital Group was sold in the year resulting in a loss against cost of 
GBP0.4 million. The loss was recognised in previous years so there was 
no impact to the NAV during the year. 
 
   Rapid Charge Grid repaid GBP472,000 of loans to the Company during the 
year. 
 
   Skills Matter repaid GBP68,000 of its loan notes during the year. 
 
   Key developments at existing portfolio companies 
 
   Several companies have seen increases in value at the year end, owing to 
strong performance. 
 
   ContactEngine performed well in the year, securing several large new 
customer contracts. In November, it won the award for "Best use of IP" 
at the Sunday Times Hiscox Tech Track 100 awards. ContactEngine closed a 
further funding round of GBP3.75 million in August 2019, to which the 
Company contributed GBP1.6 million. The value of the Company's 
investment has increased to GBP5.09m on a cost of GBP2.33m. 
 
   DeepCrawl has grown its revenue signi cantly in the year. It also closed 
a $15 million funding round in December 2019, led by specialist US 
software investor, Five Elms. This has given DeepCrawl signi cant 
repower to invest in accelerating its growth rate, particularly in the 
USA which already accounts for more than half of its revenue. This has 
led to an increase in value of the Company's investment to GBP3.2 
million on a cost of GBP1.6 million. 
 
   A number of portfolio companies have faced di cult trading conditions 
during the year. In particular four companies gave rise to an overall 
decrease in valuation of GBP10.2 million. 
 
   POQ studio, InContext and SmartAssistant have faced obstacles over the 
past twelve months and have struggled to hit their milestones and grow 
their revenues as originally budgeted. As a result, there has been a 
combined decrease in valuation of GBP8.1 million. 
 
   Blis has been impacted by the falling comparative multiples for 
advertising technologies used to value the business as well as slower 
than anticipated growth in revenues. This has led to a reduction in 
value of GBP2.1 million. 
 
   We continue to work closely with these companies to help them through 
these challenges. 
 
   Overall, the investment portfolio held at the year-end showed a decrease 
in value of GBP10.1 million (2019: increase of GBP3.4 million). 
 
   Post year-end developments 
 
   The global Coronavirus pandemic has impacted a wide range of companies. 
On 23 March this year a revised NAV of 54.6p per share was announced to 
re ect the immediate valuation impact on the Company's portfolio. This 
compares to a NAV of 58.6p per share as at 29 February 2020. 
 
   Between 29 February 2020 and the date of this report, the Company issued 
24,518,370 Ordinary Shares for an aggregate consideration of GBP14.2 
million under the combined o er for subscription with ProVen VCT plc 
which launched on 27 January 2020. Share issue costs thereon amounted to 
GBP577,000. 
 
   The Company has invested into the following new companies subsequent to 
the year end: 
 
   --              Commonplace (GBP1.5 million) - a B2B software company 
that has developed a digital community engagement platform enabling 
developers, local authorities, transport planners, infrastructure 
developers and other large project owners to engage with local 
communities; and 
 
   --              Luxury Promise (GBP1.35 million) a re-sale platform for 
luxury women's handbags and accessories 
 
   The Company also made follow on investments into Fnatic (GBP0.5 million), 
Thread (GBP0.42 million) and ContactEngine (GBP125,000). 
 
   Outlook 
 
   The short-term outlook for the UK economy will be dominated by the 
Coronavirus pandemic. We will continue to work closely with our 
portfolio companies to support them through the challenges this has 
created, including providing additional investment where this is 
appropriate. Fortunately, few of the investments in the portfolio are in 
sectors which have been severely a ected by Coronavirus, such as travel, 
hospitality and traditional retailing. Therefore, despite the recent 
reductions in the valuations of some portfolio companies, we are 
cautiously optimistic about the prospects of the portfolio as a whole 
over the medium term. 
 
   Following the recent fundraising, the Company is now well placed to take 
advantage of new investment opportunities. While some companies have 
been badly a ected by Coronavirus, others have seen minimal impact and 
certain sectors are likely to bene t from the acceleration of market 
trends arising from the Coronavirus. We are still seeing a strong ow of 
investment opportunities and will continue to invest selectively where 
we believe companies have excellent 
 
   long-term prospects and the pricing of the investment is appropriate. 
The economic disruption caused by Coronavirus may result, over the next 
12 months, in a softening of the lofty investment valuations we have 
seen recently. This should help to deliver strong returns from 
investments made during this period. 
 
   Despite the turbulent broader economic and political environment, we 
believe that there will still be opportunities for well-managed, agile, 
entrepreneurial companies to prosper. We believe the Company is well 
placed to take advantage of opportunities to invest in these businesses. 
 
   Beringea LLP 
 
   Investment Manager 
 
   Investment activity 
 
 
 
   Investment activity during the year is summarised as follows: 
 
   Additions 
 
 
 
 
                                   Cost GBP'000 
 
Sannpa Limited (t/a Fnatic)               5,946 
Papier Ltd                                3,150 
Our Path Ltd (t/a Second Nature)          2,800 
Arctic Shores Limited                     2,450 
Mycs GmbH                                 1,756 
ContactEngine Limited                     1,642 
Stylescape Limited (t/a EDITED)           1,500 
Picasso Labs, Inc.                        1,470 
Aistemos Limited                          1,405 
Thread, Inc.                              1,400 
Festicket Ltd                               897 
MPB Group Limited                           700 
POQ Studio Ltd                              500 
 
Total                                    25,616 
                                   ------------ 
 
 
   Disposals 
 
 
 
 
                                                       Realised 
                                                         gain/      Realised 
                               Market                   (loss)     (loss)/gain 
                              value at     Disposal     against    during the 
                   Cost       01/03/19     proceeds      cost         year 
                 GBP'000      GBP'000      GBP'000      GBP'000      GBP'000 
 
Rapid Charge 
 Grid 
 Limited*              472          472          472          --            -- 
MatsSoft 
 Limted                 --           --          227         227           227 
MEL Topco 
 Limited (t/a 
 Maplin)             2,218           --           98     (2,120)            98 
Skills Matter 
 Limited*               68           --           68          --            68 
Senselogix 
 Limited                --           67           --          --          (67) 
7digital 
 Group plc             400            1           --       (400)           (1) 
 
Total                3,158          540          865     (2,293)           325 
               -----------  -----------  -----------  ----------  ------------ 
 
 
 
 
   *    Loan note repayment 
 
   Of the disposals above, MatsSoft Limited was realised in a prior year, 
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) re 
ect a further interim distribution in respect of the company's 
administration. In addition, MEL Topco Limited (t/a Maplin), which had a 
cost of GBP2,218,000 and a market value of nil at 1 March 2019 was 
dissolved in December 2019. However, the loss of GBP2,218,000 had 
already been recognised as realised in a prior period. 
 
   Investment Portfolio 
 
   The following investments were held at 29 February 2020: 
 
 
 
 
 
                                                Valuation           % of 
                                                movement in     portfolio by 
                          Cost    Valuation        year             value 
                         GBP'000   GBP'000       GBP'000 
Venture capital 
investments (by value) 
Sannpa Limited (t/a 
 Fnatic)                   5,946      5,946                --             5.1% 
ContactEngine Limited      2,330      5,093             1,419             4.3% 
Dryden Holdings Limited    5,000      4,761                --             4.1% 
Mycs GmbH                  3,031      4,103             1,072             3.5% 
Zoovu Limited (formerly 
 Smart Assistant)          3,653      3,566           (2,533)             3.0% 
D30 Holdings Ltd**         3,550      3,439                82             2.9% 
Thread, Inc.               3,309      3,302              (32)             2.8% 
Written Byte Ltd (t/a 
 DeepCrawl)                1,612      3,177               983             2.7% 
Papier Ltd                 3,150      3,150                --             2.7% 
In nity Reliance 
 Limited (t/a My 1st 
 Years)                    2,769      3,126             (919)             2.7% 
Sealskinz Holdings 
 Limited**                 3,116      3,116           (1,315)             2.7% 
Our Path Ltd (t/a 
 Second Nature)            2,800      2,800                --             2.4% 
Response Tap Limited       1,440      2,597               123             2.2% 
Arctic Shores Limited      2,450      2,450                --             2.1% 
Festicket Ltd              2,289      2,289                --             1.9% 
Poq Studio Ltd             3,348      2,084           (3,014)             1.8% 
Been There Done That 
 Global Limited            1,448      2,044               596             1.7% 
MPB Group Limited          1,489      1,849               360             1.6% 
Lupa Foods Limited 
 (formerly Donatantonio 
 Group Limited)            1,003      1,801               167             1.5% 
Aistemos Limited           1,681      1,679               (2)             1.4% 
Litch eld Media Limited    1,420      1,614              (52)             1.4% 
Blis Media Limited**       1,083      1,547           (2,130)             1.3% 
Access Systems. Inc.       1,500      1,500                --             1.3% 
Stylescape Limited (t/a 
 EDITED)                   1,500      1,500                --             1.3% 
Picasso Labs. Inc.         1,470      1,470                --             1.3% 
Monica Vinader 
 Limited**                   204      1,456               190             1.2% 
Rapid Charge Grid 
 Limited**                 1,416      1,213             (140)             1.0% 
Disposable Cubicle 
 Curtains Limited (t/a 
 Hygenica)**               3,286      1,200           (1,157)             1.0% 
Honeycomb.TV Limited       1,100      1,073                 6             0.9% 
Exonar Limited             1,070        931             (139)             0.8% 
Simplestream Limited**       690        815               106             0.7% 
Fire y Learning Limited      857        630             (249)             0.5% 
 
                          71,010     77,321           (6,578)            65.8% 
Other venture capital 
 investments              13,208        443           (3,504)             0.4% 
                         -------  ---------  ----------------  --------------- 
Total venture capital 
 investments              84,218     77,764          (10,082)            66.2% 
Cash at bank and in 
 hand                                39,789                              33.8% 
                                                               --------------- 
Total investments                   117,553                             100.0% 
                                  ---------                    --------------- 
 
 
   Valuation movement in the year excludes the cost of investments made in 
the year. Other venture capital investments at 29 February 2020 
comprise: 
 
   Buckingham Gate Financial Services Limited, Cogora Group Limited, 
Duncannon Holdings Limited* , InContext Solutions Limited, Inskin Media 
Limited, Lantum Limited, Netcall, 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., Deepcrawl Holdings, 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 29 
February 2020. 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 29 February 2020 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 GBP62.8 million of venture capital 
investments and ended with GBP77.8 million spread over a portfolio of 46 
companies. 41 of these investments with a value of GBP70.2 million were 
VCT qualifying (or part qualifying). 
 
   The loss on ordinary activities after taxation for the year was GBP12.3 
million comprising a revenue loss of GBP758,000 and a capital loss of 
GBP11.6 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 29 February 2020 was 2.4% 
(2019: 2.8%). 
 
   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 29 February 2020, was equal to GBP117 million 
(2019: GBP98.5 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: 
 
 
   1. 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; 
 
   2. the Company must not conduct any trading activity which is significant in 
      the context of the Company; and 
 
   3. 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 29 February 2020 and for 
the year then ended is summarised as follows: 
 
 
 
 
 (i) The Company holds at least 70 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. 
 
 
 
 
   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 GBP2,430,000 (2019: GBP2,414,000), comprising a 
management fee of GBP2,430,000 (2019: GBP2,083,000) and performance 
incentive fees as described below of GBPnil (2019: GBP331,000). At the 
year-end, an amount of GBP194,000 (2019: GBP488,000) was outstanding. 
 
   The Board is satis ed 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 29 February 2020 Beringea also provided 
administration services to the Company. In the year, total 
administration fees amount to GBP54,000 (2019: GBP54,000 ). An amount of 
GBP14,000 (2019: 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 GBP348,000 
(2019: GBP361,000) and monitoring fees of GBP364,000 (2019: GBP506,000) 
during the year ended 29 February 2020. 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 29 February 2020 amounted to GBPnil 
(2019: GBP331,000), of which GBPnil (2019: GBP331,000) was outstanding 
at the year-end. 
 
   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. 
 
 
 
 
                                                    29/02/2016  28/02/2017  28/02/2018  28/02/2019  29/02/2020 
Total return                                             115.6       124.3       126.5       129.3         123 
Net asset value per share (adjusted for dividends 
 paid in the year)*                                     (1.4%)       10.9%        2.7%        3.9%      (9.2%) 
Dividends paid per share                                   4.5           6        12.8         6.5         3.5 
Dividend yield**                                          5.3%        7.5%       15.5%        9.0%        5.1% 
 
   * 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 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 28 February 2023. 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 o er 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 Coronavirus 
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 identi cation 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 insu cient 
qualifying investments are identi ed 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 28 February 2023, 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. The Board considered scenario analysis with 
stress tests on the cash ow forecasts. 
 
   Based on the assessment of the above considerations on the cash ow 
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 28 February 
2023. 
 
   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 annual Shareholder Day, 
which last year was held on 13 November 2019 and attended by around 250 
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. Given the Coronavirus pandemic, the Company is 
putting in place arrangements for the 2020 Shareholder Day to be held 
virtually so that our Shareholders will still be given the opportunity 
to engage with the Board and Investment Manager and hear from some of 
our new portfolio companies. 
 
   The Board also encourages all Shareholders to vote on the resolutions at 
the Annual General Meeting. The Company's Annual General Meeting, this 
year on 10 August 2020, is typically used as another opportunity to 
communicate with Shareholders. However, as detailed in the Chairman's 
statement, in light of the current Coronavirus 'social distancing' 
measures in England, the AGM will be run as a closed meeting and 
Shareholders will not be able to attend this year. However, Shareholders 
are still strongly encouraged to submit their votes by proxy. 
Shareholders will also be able to submit questions via email to 
info@beringea.co.uk by 5:00 pm on Monday 3 August 2020. Answers to the 
themes in the questions received will be addressed on the website at 
https://www.provenvcts.co.uk/. 
 
   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 better understand the nature 
of stakeholder concerns. 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 a 
airs. Ultimately, the Directors' decisions are intended to achieve the 
Company's principle objective to achieve 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 and this has happened more regularly with 
the outbreak of the Coronavirus pandemic. 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 caused by 
a global pandemic. The Investment Manager continues to work closely with 
management teams to ensure that they continue to evaluate and react 
accordingly to the evolving situation. 
 
   Environmental, social, human rights policy and greenhouse emissions 
 
   The Board seeks to conduct the Company's a airs 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 e ectiveness of these policies. As 
an externally managed investment company with no employees, the Company 
has no formal policies in these matters and as such these requirements 
do not apply. 
 
   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 bene ting 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. 
 
   Directors and senior management 
 
   The Company had ve non-executive Directors at the year end, three of 
whom are male and two of whom are female (and following James Stewart's 
retirement after the AGM in August 2020, the Board will consist of an 
equal number of male and female directors). 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. The Directors' 
remuneration policy was approved at the AGM of the Company on 11 July 
2018 and no changes are proposed for the forthcoming year. 
 
   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 Coronavirus 
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 29 February 2020 
 
 
 
 
 
 
                                                   Year ended 28 February 
                    Year ended 29 February 2020             2019 
                    Revenue  Capital    Total    Revenue  Capital   Total 
                    GBP'000  GBP'000   GBP'000   GBP'000  GBP'000  GBP'000 
 
 
Income                  430         -       430      355        -       355 
Realised gains on 
 investments              -       325       325        -    3,145     3,145 
Unrealised 
 (losses) / gains 
 on investments           -  (10,082)  (10,082)        -    3,375     3,375 
                        430   (9,757)   (9,327)      355    6,520     6,875 
 
Investment 
 management fees      (608)   (1,822)   (2,430)    (521)  (1,562)   (2,083) 
Performance 
 incentive fees           -         -         -        -    (331)     (331) 
Other expenses        (580)       (7)     (587)    (570)     (57)     (627) 
FX Translation            -        30        30 
 
(Loss) / return on 
 ordinary 
 activities before 
 tax                  (758)  (11,556)  (12,314)    (736)    4,570     3,834 
 
Tax on 
ordinary 
activities                -         -         -        -        -         - 
 
(Loss) / return 
 attributable to 
 equity 
 shareholders         (758)  (11,556)  (12,314)    (736)    4,570     3,834 
                    -------  --------  --------  -------  -------  -------- 
 
Basic and diluted 
 (loss) / return 
 per share           (0.4p)    (6.2p)    (6.6p)   (0.5p)     3.2p      2.7p 
 
 
   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 all gains 
and losses are recognised in the Income Statement in the current and 
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 29 February 2020 
 
   Year ended 29 February 2020 
 
 
 
 
                   Called 
                     up      Capital              Share                 Capital 
                    share   redemption  Special  Premium  Revaluation  reserve-   Revenue 
                   capital   reserve    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 
                  --------  ----------  -------  -------  -----------  ---------  -------  --------- 
 
 
   Year ended 28 February 2019 
 
 
 
 
                   Called 
                     up      Capital               Share                  Capital 
                    share   redemption  Special   Premium   Revaluation  reserve-    Revenue 
                   capital   reserve    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 2018      2,330       1,168     9,970    69,935       10,080     11,443    (1,036)    103,890 
                  --------  ----------  --------  --------  -----------  ---------  ---------  --------- 
Comprehensive 
Income for the 
year: 
Management fees 
allocated as 
capital 
expenditure             --          --        --        --           --    (1,562)         --    (1,562) 
Legal fees 
 allocated as 
 capital 
 expense                --          --        --        --           --       (57)         --       (57) 
Realised gain on 
 investments            --          --        --        --           --      3,145         --      3,145 
Unrealised gain 
 on investments         --          --        --        --        3,375         --         --      3,375 
Loss after tax          --          --        --        --           --         --      (736)      (736) 
Performance fee         --          --        --        --           --      (331)         --      (331) 
                  --------  ----------  --------  --------  -----------  ---------  ---------  --------- 
Total 
 comprehensive 
 profit                 --          --        --        --        3,375      1,195      (736)      3,834 
 
Contributions by 
and 
distributions to 
owners: 
Issue of new 
 shares                 32          --        --     1,356           --         --         --      1,388 
Share buybacks        (31)          31   (1,321)        --           --         --         --    (1,321) 
Dividends paid 
 (includes 
 DRIS)                  --          --   (9,318)        --           --         --         --    (9,318) 
                  --------  ----------  --------  --------  -----------  ---------  ---------  --------- 
Total 
 contributions 
 by and 
 distributions 
 to owners               1          31  (10,639)     1,356           --         --         --    (9,251) 
Other movements: 
Transfer of 
 previously 
 unrealised 
 gains now 
 realised               --          --        --        --      (6,412)      6,412         --         -- 
Cancellation of 
 share premium 
 account                --          --    70,345  (70,345)           --         --         --         -- 
Cancellation of 
 capital 
 redemption 
 reserve                --     (1,180)     1,180        --           --         --         --         -- 
                  --------  ----------  --------  --------  -----------  ---------  ---------  --------- 
Total other 
 movements              --     (1,180)    71,525  (70,345)      (6,412)      6,412         --         -- 
At 28 February 
 2019                2,331          19    70,856       946        7,043     19,050    (1,772)     98,473 
                  --------  ----------  --------  --------  -----------  ---------  ---------  --------- 
 
 
   The special reserve, capital reserve -- realised and revenue reserve are 
all distributable reserves. Reserves available for distribution 
therefore amount to GBP74,331,000 (2019: GBP88,134,000). 
 
   During the year the Company repurchased 2,442,467 shares (2019: 
1,929,510) with a nominal value of GBP39,213 (2019: GBP31,000). 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 -- A distributable reserve which is 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 29 February 2020 
 
 
 
 
 
 
                                      29 February 2020  28 February 2019 
Fixed assets                              GBP'000           GBP'000 
Investments                                     77,763            62,769 
 
Current assets 
Debtors                                            829               481 
Cash at bank and in hand                        39,789            36,380 
                                      ----------------  ---------------- 
                                                40,618            36,861 
Creditors: amounts falling due 
 within one year                               (1,147)           (1,157) 
 
Net current assets                              39,471            35,704 
 
Total assets less current 
 liabilities                                   117,234            98,473 
                                      ----------------  ---------------- 
 
Capital and reserves 
Called up share capital                          3,239             2,331 
Capital redemption reserve                          58                19 
Special reserve                                 61,164            70,856 
Share premium                                   40,766               946 
Revaluation reserve                            (1,160)             7,043 
Capital reserve -- realised                     15,667            19,050 
Revenue reserve                                (2,500)           (1,772) 
 
Total equity shareholders' funds               117,234            98,473 
                                      ----------------  ---------------- 
Basic and diluted net asset value                58.6p             68.4p 
 per share 
 
 
   Statement of Cash Flows 
 
   for the year ended 29 February 2020 
 
 
 
 
                                                     Year ended 
                                                         29      Year ended 
                                                      February   28 February 
                                                        2020        2019 
                                                       Total        Total 
                                                      GBP'000      GBP'000 
(Loss)/return on ordinary activities before 
 taxation                                              (12,314)        3,834 
Loss/(Gain) on investments                                9,757      (6,520) 
Increase in prepayments, accrued income and other 
 debtors                                                  (318)         (68) 
Decrease in accruals and other creditors                  (240)        (782) 
                                                     ----------  ----------- 
Net cash used in operating activities                   (3,115)      (3,536) 
                                                     ----------  ----------- 
 
Cash flows from investing activities 
Purchase of investments                                (25,616)      (9,900) 
Sale of investments                                         835       14,741 
                                                     ----------  ----------- 
Net cash from investing activities                     (24,781)        4,841 
                                                     ----------  ----------- 
 
Cash flows from financing activities 
Proceeds from share issues                               39,735           -- 
Share issue costs                                       (1,539)           -- 
Purchase of own shares                                  (1,230)      (1,057) 
Equity dividends paid                                   (5,661)      (7,930) 
Net cash used in financing                               31,305      (8,987) 
                                                     ----------  ----------- 
 
Increase/(decrease) in cash and cash equivalents          3,409      (7,682) 
                                                     ----------  ----------- 
Cash at beginning of year                                36,380       44,062 
                                                     ----------  ----------- 
Cash at end of year                                      39,789       36,380 
                                                     ----------  ----------- 
 
 
   'Net cash used in operating activities' includes interest received of 
GBP273,000, (2019: GBP284,000) and dividends received of GBP 4,000 
(2019: GBPnil). No interest was paid during the year. 
 
   Notes to the Announcement 
 
   for the year ended 29 February 2020 
 
   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 or revenue 
multiple to that company's maintainable earnings or revenue. The 
multiple used is based on comparable listed companies or a sector but 
discounted to re ect factors such as the di erent sizes of the 
comparable businesses, di erent growth rates and the lack of 
marketability of unquoted shares; 
 
   --     where a value is indicated by a material arm's-length transaction 
by a third party in the shares of the company the valuation will 
normally be based on this; 
 
   --     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 29 February    Year ended 28 February 
                                    2020                      2019 
Revenue (loss)/ return 
per share based on: 
Net revenue loss after 
 taxation (GBP'000)                          (758)                     (736) 
 
Weighted average number 
 of shares in issue                    187,733,719               143,594,091 
 
Pence per share                             (0.4p)                    (0.5p) 
 
Capital return per share 
based on: 
Net capital return for 
 the financial year 
 (GBP'000)                                (11,556)                     4,570 
 
Weighted average number 
 of shares in issue                    187,733,719               143,594,091 
 
Pence per share                             (6.2p)                      3.2p 
 
Total return per share 
based on: 
Total return for the 
 financial year 
 (GBP'000)                                (12,314)                     3,834 
 
Weighted average number 
 of shares in issue                    187,733,719               143,594,091 
 
Pence per share                             (6.6p)                      2.7p 
 
 
   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 
 
 
 
 
                                    2020                         2019 
               Shares in issue       Net asset value  Net asset value 
                                     Pence            Pence 
                                       per              per 
                  2020         2019  share   GBP'000  share   GBP'000 
Ordinary 
 Shares    200,137,231  144,047,261   58.6   117,234  68.4p    98,473 
                                             117,234           98,473 
                                            --------         -------- 
 
 
 
   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 29 February 2020, the AIM-quoted portfolio was valued at GBP193,000 
(2019: GBP143,000). 
 
   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                        2020                          2019 
                Impact on net  Impact on NAV  Impact on net  Impact on NAV 
                   assets        per share       assets        per share 
                   GBP'000         Pence         GBP'000         Pence 
AIM-quoted 
 investments               38           0.0p             28           0.0p 
 
 
   At 29 February 2020, the unquoted portfolio was valued at GBP77,570,000 
(2019: GBP60,626,000). 
 
   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              2020                          2019 
                Impact on net  Impact on NAV  Impact on net  Impact on NAV 
                   assets        per share       assets        per share 
                   GBP'000         Pence         GBP'000         Pence 
Unquoted 
 investments           15,514           7.8p         12,526           8.6p 
 
 
   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   2020     2019 
                   interest rate  until maturity  GBP'000  GBP'000 
Fixed rate                  7.1%        352 days   16,237   15,333 
Floating rate               0.3%          0 days   39,847   36,498 
No interest rate                                   61,150   46,642 
                                                  -------  ------- 
                                                  117,234   98,473 
                                                  -------  ------- 
 
 
   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 GBP399,000 (2019: GBP365,000). 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: 
 
 
 
 
                                              2020     2019 
                                             GBP'000  GBP'000 
Cash and cash equivalents                     39,789   36,380 
Interest, dividends and other receivables        524      423 
                                             -------  ------- 
                                              40,313   36,803 
                                             -------  ------- 
 
 
   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 BBB+ 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 (GBP1,147,000 at 29 February 2020) 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 29 February 2020 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 29 February 2020   GBP'000   GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
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 
                        ---------  -------  -------  -------  -------  ------- 
 
As at 28 February 2019 
Fully performing loan 
 stock                      1,113   13,094       --      291       --   14,498 
Past due loan stock            --       --       --      953       --      953 
                        ---------  -------  -------  -------  -------  ------- 
                            1,113   13,094       --    1,244       --   15,451 
                        ---------  -------  -------  -------  -------  ------- 
 
 
 
 
   Of the loan stock classi ed as "past due" above, GBP1,068,000 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. 
 
 
 
 
                        2020                                2019 
                                                                    Level 
              Level 1  Level 2  Level 3    Total  Level 1  Level 2    3       Total 
              GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000          GBP'000 
AIM quoted        193       --       --      193      143       --      --      143 
Loan notes         --       --   16,295   16,295       --       --  15,451   15,451 
Unquoted 
 investments       --       --   61,275   61,275       --       --  47,175   47,175 
              -------  -------  -------  -------  -------  -------  ------  ------- 
                  193       --   77,570   77,763      143       --  62,626   62,769 
              -------  -------  -------  -------  -------  -------  ------  ------- 
 
 
 
 
   There have been no movements between levels during the financial year to 
29 February 2020. 
 
 
 
   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 2019                  15,451           47,175   62,626 
                                     ----------  ---------------  ------- 
Movements in the income statement: 
Gains in the income statement           (2,688)          (7,118)  (9,806) 
                                     ----------  ---------------  ------- 
 
Purchases at cost                         4,004           21,611   25,615 
Sales proceeds                            (472)            (393)    (865) 
 
Balance at 29 February 2020              16,295           61,275   77,570 
                                     ----------  ---------------  ------- 
 
 
   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 29 February 2020 and the date of this report, the Company issued 
24,518,370 Ordinary Shares for an aggregate consideration of GBP14.2 
million under the combined o er for subscription with ProVen VCT plc 
which launched on 27 January 2020. Share issue costs thereon amounted to 
GBP577,000. 
 
   In March 2020, the Company invested in two pre-existing portfolio 
companies. GBP772,000 was invested in Fnatic and GBP421,000 in Thread. 
In the same month, an investment was also made in Commonplace (GBP1.5m), 
an online community consultation platform. Subsequent to this, GBP1.35m 
was invested in April in Luxury Promise, the leading marketplace to buy, 
sell and swap pre loved luxury goods. In June 2020, the Company invested 
GBP125,000 in ContactEngine, a pre-existing portfolio company. 
 
   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. 
 
   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 29 February 2020, 
but has been extracted from the statutory financial statements for the 
year ended 29 February 2020, which were approved by the Board of 
Directors on 1 July 2020 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 28 February 2019 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 29 February 2020 will be made available to Shareholders shortly. 
Copies will also be available for download from 
https://www.globenewswire.com/Tracker?data=3aSoHewhtv85eraUrtfiQPDasMnJ33-k56ck79zOxKo2EnUQ0KlLKNVnNzb1r_ZQJW7UNrbd_MkA75y6MnUg1fyG5fARfuv8Q9dxTzgEoz0= 
www.provenvcts.co.uk 
 
   End 
 
 
 
 
 
 

(END) Dow Jones Newswires

July 02, 2020 02:46 ET (06:46 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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