Maven I&g 4 Regulatory News (MAV4)

RNS Number : 5073J

Maven Income & Growth VCT 4 PLC

31 March 2010

 

Maven Income and Growth VCT 4 PLC

 

Annual Financial Report for the year ended 31 December 2009

 

Chairman's Statement

 

The year under review saw a welcome return to stability in the financial markets, with most indices showing a steady upward trend from March onwards. However, many commentators believe the re-pricing seen in equity markets came too fast without evidence of marked economic recovery to support the sustained positive movement in indices seen during the year. The prospects for the year ahead are reasonable, but the recovery remains fragile and a major event in the financial markets could easily precipitate a loss of investor confidence and a significant adjustment in equity markets.

 

Your company is largely invested in private companies which have survived the market fallout well; in fact many have continued to grow their profits despite the recessionary backdrop over the last few years. Working closely with the Manager, the portfolio companies have managed to conserve cash during this difficult period, and many have actually substantially reduced their debt burdens since they were acquired by your Company.

 

Despite a difficult market for M&A activity with very few transactions evident, the Manager successfully concluded the profitable sale of two portfolio companies during the year generating cash receipts above carrying value and also retaining an interest in the future performance in both companies in the hands of their new owners. These realisations helped to contribute to an increase in NAV Total Return across both share classes.

 

The major highlights of the year are:

 

• Total Return on Ordinary shares 102.5p per share at year end, up 8.0% over the year

• Net Asset Value (NAV) of Ordinary shares at year end of 89.7p per share

• Total Return on S Shares 99.45p per share at year end, up 1.7% over the year

• NAV of S Share at year end of 94.4p per share

• Two successful exits from unlisted companies during the year generating net gains of 6.2p per Ordinary share and 3.9p per S Share.

• Final dividends proposed of 2.5p per Ordinary share and 0.5p per S Share in respect of the year

 

Performance

The Total Return per Ordinary Share at 31 December 2009 was 102.5p per share, an increase of 8.0% over the equivalent figure at December 2008, while for the S Share pool was 99.45p compared with 97.75p a year previously, an increase of 1.7% reflecting the differing mix of the two portfolios.

 

The most important measure for a VCT is the total return, being the long term record of dividend payments out of income and capital gains combined with the current NAV. In the short term, the NAV on its own is a less important measure of the performance as the underlying investments are long-term in nature and not readily realisable.

 

At 31 December 2009, the NAV per Ordinary share was 89.7p and the NAV per S Share was 94.4p.

 

VCT Qualifying Status

The Company is required to meet the 70% qualifying test on the combined pools from 1 January 2010 and continuously thereafter. The Board regularly review the status of the criteria that have to be met to continue to qualify as a VCT and I am pleased to confirm that all tests continue to be met.

 

 

Dividends

The Board is proposing a final dividend of 2.5p per Ordinary Share and 0.5p per S Share to be paid on 27 May 2010 to shareholders on the register on 7 May 2010. Including the interim dividends paid in September 2009, the total tax-free yield for the year is 5.8% on the net cost to both Ordinary and 2.1% to S Shareholders.

 

Investment Strategy

Since the onset of the credit crunch the AIM market has become largely moribund, with few new IPOs and limited liquidity in individual stocks. In many cases share prices for AIM listed companies continue to bear little relation to the value of the underlying asset.

 

In recent years the best returns for your Company have been achieved through the Manager investing in private company transactions, including management buy-outs, buy and build projects and funding acquisitions. Structured with manageable amounts of debt to help leverage returns, these transactions remain very attractive to VCTs.

 

The board and the Manager are therefore in agreement that the optimum investment strategy for your Company going forward is to continue to concentrate efforts on seeking out suitable private company transactions which offer attractive entry prices and a paid yield from the outset of the investment. With a large and experienced investment team operating nationally, the board is confident the Manager is well positioned to continue to identify and invest in a select number of these high quality private company transactions each year.

 

Valuation Process

Investments held by Maven Income and Growth VCT 4 in unquoted companies are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Investments quoted or traded on a recognised stock exchange including the Alternative Investment Market (AIM) are valued at their bid prices.

 

Portfolio Developments

There were two successful exits in the Ordinary Share pool unlisted portfolio during the course of the year which were also held by the S Share pool. The net gain from these realisations amounted to 6.2p per Ordinary share and 3.9p per S Share. Details of all investments and divestments during the course of the year are shown in the table on pages 9 and 11.

 

There was little opportunity to actively trade AIM stocks and net losses of £112,000 and £46,000 for the Ordinary shares and S Shares respectively from disposals where little upside was perceived or the exit was forced by corporate activity.

 

The Manager and Change of Company Name

Following the management buy-out completed by the senior members of the Manager's team in June 2009, the Company novated the investment management agreement to Maven Capital Partners UK LLP as the team previously responsible for managing the Company had migrated to Maven. As a consequence, the shareholders agreed to change the name of the Company from Aberdeen Growth Opportunities VCT 2 to Maven Income and Growth VCT 4 on 21 November 2009.

 

Recovery of VAT

The Company is entitled to recover VAT paid on management fees for the period from inception until October 2008, when a European Court ruling dictated that such fees were exempt from VAT. This repayment is due from the previous manager, Aberdeen Asset Management PLC, although they have been so far unwilling to refund any of the tax paid until they in turn complete the finalisation of their extended VAT position with HMRC. No asset has been recognised in the financial statements in respect of recoverable VAT.

 

We will remain vigilant regarding this issue and will continue to press for early payment of the VAT refund due to your Company. The board looks forward with optimism to the resolution of this matter early in 2010.

 

Co-Investment Scheme of the Manager

The co-investment scheme which allows executive members of the Manager to invest alongside the Company continued in operation during the year. The scheme operates through a nominee company which invests alongside the Company in each and every transaction made by the Company, including any follow-on investments. The scheme more closely aligns the interests of the executives and the Company's shareholders while providing an incentive to enable the Manager to retain the existing skills and capacity of the Manager's investment team in a highly competitive market.

 

The Future

The board is encouraged by the quality of new deal flow the Manager is seeing across its regional network. The effects of the credit crunch are increasing the range of companies seeking capital from alternative sources such as VCTs and your Company is well placed to benefit from these market conditions. The current portfolio is performing well and s mostly invested in profitable and yield producing private companies. Going forward the focus will be on continuing to grow this asset base with a view to enhancing investor returns in what we increasingly hope will be a more benign and predictable economic environment.

 

Investment Manager's Review

Investment Activity

 

During the year ended 31 December 2009, private company transactions were available at more attractive entry prices than in recent years. Nine significant unlisted and AIM investments were completed and a total of £2.6 million was invested of which £1.6 million was from the Ordinary Share pool and £1 million was from the S Share pool. At the year end, the portfolio stood at 61 unlisted and AIM investments at a total cost of £11.1 million.

 

The following new investments have been completed during the year.

 

			Investment cost £'000
Investment	Date	Activity	Original Pool	S Share Pool	Website
Unlisted
Ailsa Craig Capital Limited	November 2009	Oil and Gas services	249	149	No website available
Dalglen 1150 (Walker Technical Resources)	June 2009	Energy service sector business specialising in pipeline repairs.	249	99	www.wtr.uk.com
Dunning Capital Limited	November 2009	Information Technology services	249	149	No website available
Intercede (Scotland) 1 Limited	November 2009	Provider of oil and gas control services	70	99	www.electroflowcontrols.com
Lawrence Recycling and Waste Management	January 2009	Operator of material recycling facility.	224	149	www.lawrenceskiphire.co.uk
MC440 (Westway Cooling)	June 2009	Provider of design, installation and maintenance services on air-conditioning and associated building services plant.	149	149	www.westwaycooling.co.uk
Shiskine Capital Limited	November 2009	Transport and Distribution operations	249	149	No website available
Others			104	58
Total Unlisted investment			1,543	1,001
AIM/PLUS
Chime Communications	2009	Provides PR, advertising, market research and direct marketing, design event management consultancy services	70	25	www.chime.plc.uk
Others			4	2
			74	27
Total AIM/PLUS investment
			1,617	1,028

 

 

The Manager has also announced its first ever public to private transaction, forming Torridon Capital Limited as a bidco which is acquiring Litcomp PLC, a quoted insurance business listed on AIM. At the time of writing the transaction had been announced as unconditional. The Manager also has several other well priced and defensive transactions under advanced negotiation, all of which offer an attractive running yield.

 

The well publicised difficulties in the credit markets have created an environment where attractive private companies are seeking funds from alternative sources, and generalist VCTs are well placed to benefit from this changing market dynamic. Maven operates a national network of private equity offices and believes this regional presence allow it to source some of the best investment opportunities available in the UK in this defined market space.

 

The Manager has recently determined to reduce its exposure to AIM, where returns have proved to be volatile and liquidity uncertain. As a consequence, as liquidity and pricing permits, it is anticipated that a reduction of the AIM portfolio will continue and realised proceeds will be reinvested in higher yielding private company transactions where historically more predictable and better returns have been achieved by the Manager across its UK network.

 

Maven Income and Growth VCT 4 has co-invested with Maven Income and Growth VCT, Maven Income and Growth VCT 2, Maven Income and Growth VCT 3, Talisman First Venture Capital Trust and Ortus VCT (formerly Guinness Flight Venture Capital Trust) in some or all of the above transactions and is expected to continue to do so with these as well as other clients of the Manager. The advantage is that, together, the funds are able to underwrite a wider range and size of transaction than would be the case on a stand alone basis.

 

 

Portfolio Developments

 

There were two successful realisations from the unlisted portfolio during the year; Funeral Services Partnership was sold for proceeds of £487,000 plus income and redemption premium amounting to £36,000 paid on exit which compares favourably to the cost of £422,000. The investment achieved an overall return equivalent to 1.53 times subscription cost. In addition, clients of Maven (including the Company) retained a non dilutive stake in the business which is set to benefit from substantial investment from its new owners as is seeks to become one of the largest independent operators of funeral services in the UK.

 

Silkwater Holdings (which traded as Cyclotech) was also sold for proceeds of £963,000, plus income and redemption premium amounting to £67,000 paid on exit thereby achieving a healthy overall return of 3.2 times cost and an overall gain of £615,000. In addition commercial agreement has been reached with the multinational purchaser where the shareholders who sold (including the Company) will receive further consideration dependent upon future revenues. This may give rise to further proceeds for the Company although prudently, no recognition of that potential future receipt has been included in the accounts.

 

In addition to the above, reflecting the increasing maturity of the unlisted portfolio repayments of loan stock were received from a number of investee companies as shown on the table on page 11.

 

Two companies which had previously been fully provided in earlier years were struck off the Register during the year resulting in a realised loss but this had no effect on the NAV.

 

Since the year end the Company has participated in two new investment transactions. Torridon Capital Limited was set up to facilitate the first Public to Private acquisition of Litcomp PLC. Tosca Penta Insurance Limited Partnership was formed as part of the syndicate purchase of esure from HBoS.

 

Opportunities to invest in new IPOs on the AIM Market were significantly reduced during the year and no such investments were made. The opportunity was taken to sell holdings where the Manager perceived limited future upside while in other cases sales were enforced by other corporate events. The AIM quoted businesses in which we are invested are generally continuing to trade profitably and in line with expectations but, in many cases their market values bear little or no relation to their underlying profit and cash generation capability.

 

Outlook

 

The early signs are that the assets acquired in 2009 will prove to be high quality additions to the portfolio, both in terms of the yield derived from these holdings as well as the potential for medium term capital gain. Current market conditions are also likely to prevail as debt remains scarce, helping to drive down prices for private company assets. The lack of availability of debt remains a significant challenge, an active banking market is important in order to allow leverage of returns using prudent amounts of bank debt. As economic conditions improve we anticipate a continuing increase in the number of private company investment opportunities.

 

We will continue to select only those companies which are well managed, sensibly priced and are capable of providing a premium yield together with the prospects of a capital gain in the medium to longer term. The opportunity will be taken to exit AIM listed holdings on a case by case basis on the back of price movements emanating from positive newsflow or defined M&A activity.

 

 

Realisations during the financial year

 

	Date first invested	Complete/ Partial Exit	Cost of shares disposed of	Sales Proceeds	Realised Gain/Loss	Realised Gain/Loss over December 2008 Valuation	Cost of shares disposed of	Sales Proceeds	Realised Gain/Loss	Realised Gain/Loss over December 2008 Valuation
			£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Unlisted
Cyclotech Limited	2007	Complete	249	688	439	342	99	275	176	137
Funeral Services Partnership Limited	2007	Complete	298	344	46	(13)	124	143	19	(5)
Energy Services Investment Company	2007	Complete	248	249	1	0	100	100	-	-
THL Midlands Limited (formerly Transys Holdings)	2007	Partial	50	50	-	-	30	30	-	-
Westway Services Limited	2009	Partial	18	18	-	-	18	18	-	-
			863	1,349	486	329	371	566	195	132
AIM
Animalcare group Plc	2008	Partial	-	-	-	-	6	12	6	3
Avanti Communications Group Plc	2007	Partial	51	70	19	34	-	-	-	-
Brookwell Limited	2008	Partial	5	2	(3)	1	-	-	-	-
Concateno	2006	Complete	176	199	23	46	50	40	(10)	9
Craneware	2007	Complete	3	5	2	0	1	2	1	-
Essentially Group PLC	2001	Complete	136	70	(66)	27	49	26	(23)	10
Gold Frost Limited	2006	Complete	86	17	(69)	(1)	-	-	-	-
Optare	2007	Partial	27	8	(19)	(6)	27	7	(20)	(6)
			484	371	(113)	101	133	87	(46)	16
			1,347	1,720	373	430	504	653	149	148

 

 

 

Principal risks and uncertainties

The principal risks facing the Company relate to its investment activities and include market price, interest rate, liquidity and credit. An explanation of these risks and how they are managed is contained in Note 18 to the financial statements on pages 51 to 54. Additional risks faced by the Company, and the mitigation approach adopted by the Board, are as follows:

(i) investment objective: The Board's aim is to maximise absolute returns to shareholders while managing risk by ensuring an appropriate diversification of investments

(ii) investment policy: inappropriate stock selection leading to underperformance in absolute and relative terms is a risk which the Manager mitigates by operating within investment guidelines and regularly monitoring performance against the peer group

(iii) discount volatility: due to lack of liquidity in the secondary market, venture capital trust shares tend to trade at discounts to net asset values which the Board seeks to manage by making purchases of shares in the market from time to time, and

(iv) regulatory risk: the Company operates in a complex regulatory environment and faces a number of related risks. A breach of section 274 of the Income Tax Act 2007 could result in the Company's being subject to capital gains tax on the sale of its investments. A breach of the VCT Regulations could result in the loss of VCT status and consequent loss of tax reliefs currently available to shareholders. Serious breach of other regulations, such as the UKLA Listing rules and the Companies Act 2006, could lead to suspension from the Stock Exchange and reputational damage. The board receives quarterly reports from the Manager in order to monitor compliance with regulations.

The Board considers all risks and the measures in place to manage them and monitors their management at each meeting.

 

 

 

 

MAVEN INCOME AND GROWTH VCT 4 PLC
INCOME STATEMENT
For the year ended 31 December 2009
		Ordinary Shares			S Ordinary Shares			TOTAL
		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	8	-	459	459	-	56	56	-	515	515
Income from investments	2	355	-	355	206	-	206	561	-	561
Other income	2	6	-	6	2	-	2	8	-	8
Investment management fees	3	(24)	(95)	(119)	(16)	(66)	(82)	(40)	(161)	(201)
Other expenses	4	(127)	-	(127)	(95)	-	(95)	(222)	-	(222)
Net return on ordinary activities before taxation		210	364	574	97	(10)	87	307	354	661
Tax on ordinary activities	5	(42)	20	(22)	(19)	14	(5)	(61)	34	(27)
Return attributable to equity shareholders		168	384	552	78	4	82	246	388	634
Earnings per share (pence)		2.1	4.9	7.0	1.6	-	1.6	3.7	4.9	8.6

 

A Statement of Total Recognised Gains and Losses has not been prepared, as all gains

and losses are recognised in the Income Statement.

 

All items in the above statement are derived from continuing operations. The Company

has only one class of business and derives its income from investments made in shares,

 securities and bank deposits.

 

The total column of this statement is the Profit and Loss Account of the Company.

 

 

 

 

 

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 31 December 2009

 

	Ordinary Shares	S Ordinary Shares	TOTAL
	£'000	£'000	£'000
Opening Shareholders' funds	6,647	4,750	11,397
Net return for year	552	82	634
Repurchase and cancellation of shares	(23)	-	(23)
Dividends paid - revenue	(180)	(139)	(319)
Dividends paid - capital	-	-	-
Closing Shareholders' funds	6,996	4,693	11,689

 

The accompanying notes are an integral part of the financial statements.

 

 

 

 

 

 

 

 

MAVEN INCOME AND GROWTH VCT 4 PLC
INCOME STATEMENT
For the year ended 31 December 2008
		Ordinary Shares			S Ordinary Shares			TOTAL
		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Losses on investments	8	-	(1,459)	(1,459)	-	(42)	(42)	-	(1,501)	(1,501)
Income from investments	2	335	-	335	244	-	244	579	-	579
Other income	2	11	-	11	5	-	5	16	-	16
Investment management fees	3	(20)	(82)	(102)	(15)	(61)	(76)	(35)	(143)	(178)
Other expenses	4	(151)	-	(151)	(85)	-	(85)	(236)	-	(236)
Net return on ordinary activities before taxation		175	(1,541)	(1,366)	149	(103)	46	324	(1,644)	(1,320)
Tax on ordinary activities	5	(29)	17	(12)	(28)	13	(15)	(57)	30	(27)
Return attributable to equity shareholders		146	(1,524)	(1,378)	121	(90)	31	267	(1,614)	(1,347)
Earnings per share (pence)		1.9	(19.4)	(17.5)	2.4	(1.8)	0.6	4.3	(21.2)	(16.9)

 

 

A Statement of Total Recognised Gains and Losses has not been prepared, as all gains

and losses are recognised in the Income Statement.

 

All items in the above statement are derived from continuing operations. The Company

has only one class of business and derives its income from investments made in shares,

securities and bank deposits.

 

The total column of this statement is the Profit and Loss Account of the Company.

 

 

 

 

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 31 December 2008

 

 

 

	Ordinary Shares	S Ordinary Shares	TOTAL
	£'000	£'000	£'000
Opening Shareholders' funds	8,221	4,831	13,052
Net returnfor year	(1,378)	31	(1,347)
Dividends paid - revenue	(118)	(62)	(180)
Dividends paid - capital	(78)	(50)	(128)
Closing Shareholders' funds	6,647	4,750		11,397

 

 

 

 

 

 

 

MAVEN INCOME AND GROWTH VCT 4 PLC
BALANCE SHEET
As at 31 December 2009
			31 December 2009			31 December 2008
		Ordinary	S Ordinary		Ordinary	S Ordinary
		Shares	Shares	Total	Shares	Shares	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Investments at fair value through profit or loss	8	6,156	2,841	8,997	6,200	4,579	10,779
Current assets
Debtors	10	163	65	228	216	115	331
Cash and overnight deposits		756	1,832	2,588	276	90	366
		919	1,897	2,816	492	205	697
Creditors: amounts falling due within one year	11	(79)	(45)	(124)	(45)	(34)	(79)
Net current assets		840	1,852	2,692	447	171	618
Total net assets		6,996	4,693	11,689	6,647	4,750	11,397
Capital and reserves
Called up share capital	12	780	497	1,277	784	497	1,281
Share premium	13	-	4,227	4,227	-	4,227	4,227
Distributable reserve	13	6,637	-	6,637	6,660	-	6,660
Capital Redemption Reserve	13	4	-	4	-	-	-
Capital reserves - realised	13	1,349	86	1,435	1,049	(12)	1,037
Capital reserves - unrealised	13	(1,990)	(192)	(2,182)	(2,074)	(98)	(2,172)
Revenue reserve	13	216	75	291	228	136	364
Net assets attributable to Ordinary Shareholders		6,996	4,693	11,689	6,647	4,750	11,397
Net asset value per ordinary share (pence)	14	89.7	94.4		84.8	95.5

 

The accompanying notes are an integral part of the financial statements.

 

The Financial Statements of Maven Income and Growth VCT 4 PLC, registered

number SC272568, were approved by the Board of Directors and were signed

on its behalf by:

 

ID Cormack

Director

 

 

 

 

 

 

 

 

 

MAVEN INCOME AND GROWTH VCT 4 PLC

CASH FLOW STATEMENT

For the year ended 31 December 2009

 

 

 

 

		Year to 31 December 2009			Year to 31 December 2008
		Ordinary	S Ordinary		Ordinary	S Ordinary
		Shares	Shares	Total	Shares	Shares	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Operating activities
Investment income received		397	268	665	267	207	474
Deposit interest received		8	3	11	12	6	18
Investment management fees paid		(90)	(62)	(152)	(141)	(101)	(242)
Secretarial fees paid		(34)	(25)	(59)	(62)	(34)	(96)
Cash paid to and on behalf of Directors		(38)	(27)	(65)	(53)	(31)	(84)
Other cash payments		(52)	(37)	(89)	(61)	(24)	(85)
Net cash inflow/(outflow) from operating activities	15	191	120	311	(38)	23	(15)
Taxation
Corporation tax		(12)	(15)	(27)	-	-	-
Financial investment
Purchase of investments		(1,617)	(1,028)	(2,645)	(1,516)	(2,709)	(4,225)
Sale of investments		2,121	2,804	4,925	1,582	2,581	4,163
Net cash inflow/(outflow) from financial investment		504	1,776	2,280	66	(128)	(62)
Equity dividends paid		(180)	(139)	(319)	(196)	(112)	(308)
Net cash inflow/(outflow) before financing		503	1,742	2,245	(168)	(217)	(385)
Financing
Repurchase of Ordinary Shares		(23)	-	(23)	-	-	-
Net cash outflow from financing		(23)	-	(23)	-	-	-
Increase/(decrease)in cash	16	480	1,742	2,222	(168)	(217)	(385)

 

The accompanying notes are an integral part of the financial statements.

 

 

 

 

 

 

 

MAVEN INCOME AND GROWTH VCT 4 PLC

Notes to the Financial Statements

For the year ended 31 December 2009

 

1	Accounting Policies - UK Generally Accepted Accounting Practice
(a)		The Financial Statements have been prepared under the historical cost convention modified to include the revaluation of investments and in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (the SORP) issued in January 2009. The disclosures on Going Concern on page 28 of the Directors' Report form part of these financial statements.
(b)		Income
		Dividends receivable on equity shares and unit trusts are treated as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available dividends receivable on or before the year end are treated as revenue for the period. Provision is made for any dividends not expected to be received. The fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis so as to reflect the effective interest rate on the debt securities and shares. Provision is made for any fixed income not expected to be received. Interest receivable from cash and short term deposits and interest payable are accrued to the end of
(c)	Expenses
	All expenses are accounted for on an accruals basis and charged to the income statement. Expenses are charged through the revenue account except as follows:
	- expenses which are incidental to the acquisition and disposal of an investment are charged to capital; and
		- expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 20% to revenue and 80% to realised capital reserves to reflect the Company's investment policy and
		prospective income and capital growth.
		- share issue costs are charged to the share premium account.
		- expenses are allocated between the original pool or the S share pool depending on the nature of the expense.
(d)		Taxation
		Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods.
		Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
		The tax effect of different items of income/gain and expenditure/loss is allocated between capital reserves and revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the period.
(e)		Investments
		In valuing unlisted investments the Directors follow the criteria set out below. These procedures comply with the
		revised International Private Equity and Venture Capital Valuation Guidelines for the valuation of private equity
		and venture capital investments. Investments are recognised at their trade date and are valued at fair value, which
		represent the Directors' view of the amount for which an asset could be exchanged between knowledgeable willing
		parties in an arm's length transaction. This does not assume that the underlying business is saleable at the reporting
		date or that its current shareholders have an intention to sell their holding in the near future.
		A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled
		or expires.
		1. For Investments completed within the 12 months prior to the reporting date and those at an early stage in their development, fair value is determined using the Price of Recent Investment Method, except that adjustments are made when there has been a material change in the trading circumstances of the company or a substantial movement in the relevant sector of the stock market.
		2. Whenever practical, recent investments will be valued by reference to a material arm's length transaction or a quoted price.
		3. Mature companies are valued by applying a multiple to their fully taxed prospective earnings to determine the enterprise value of the company.
		3.1 To obtain a valuation of the total ordinary share capital held by management and the institutional investors, the value of third party debt, institutional loan stock, debentures and preference share capital is deducted from the enterprise value. The effect of any performance related mechanisms is taken into account when determining the value of the ordinary share capital.
		3.2 Preference shares, debentures and loan stock are valued using the Price of Recent Investment Method.
		When a redemption premium has accrued, this will only be valued if there is a reasonable prospect of it being paid.
		Preference shares which carry a right to convert into ordinary share capital are valued at the higher of the Price of
		Recent Investment Method basis and the price/earnings basis, both described above.
		4. Where there is evidence of impairment, a provision may be taken against the previous valuation of the investment.
		5. In the absence of evidence of a deterioration, or strong defensible evidence of an increase in value, the fair value is determined to be that reported at the previous balance sheet date.
		6. All unlisted investments are valued individually by Aberdeen Private Equity's Portfolio Management Team. The resultant valuations are subject to detailed scrutiny and approval by the Directors of the Company.
		7. In accordance with normal market practice, investments listed on the Alternative Investment Market or a recognised stock exchange are valued at their bid market price.
(f)		Fair Value Measurement
		Fair value is defined as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or the most advantageous market of the investment. A three-tier hierarchy has been established to maximise the use of observable market data and minimise the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable.
		Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity.
		Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on best information available in the circumstances.
		The three-tier hierarchy of inputs is summarised in the three board levels listed below.
		- Level 1 - quoted prices in active markets for identical investments
		- Level 2 - other significant observable inputs (included quoted prices for similar investments, interest rates, prepayment speeds, credit risk etc).
		- Level 3 - significant observable inputs (including the Company's own assumptions in determining the fair value of investments).

 

(g)	Gains and losses on investments
	When the company sells or revalues its investments during the year, any gains or losses arising are credited/ charged to the Income Statement.

 

 

 

7 Return per ordinary share	Year ended			Year ended
	31 December 2009			31 December 2008
	Ordinary	S Ordinary		Ordinary	S Ordinary
The returns per share have been based on the following figures:	Shares	Shares	Total	Shares	Shares	Total
Weighted average number of ordinary shares	7,834,599	4,972,459	12,807,058	7,835,163	4,972,459	12,807,622
Revenue return	£ 168,000	£ 78,000	£ 246,000	£ 146,000	£ 121,000	£ 267,000
Capital return	£ 384,000	£ 4,000	£ 388,000	£(1,524,000)	£ (90,000)	£(1,614,000)
Total Return	£ 552,000	£ 82,000	£ 634,000	£(1,378,000)	£ 31,000	£(1,347,000)

 

 

12 Share capital	31 December 2009				31 December 2008
	Ordinary Shares		S Ordinary Shares		Ordinary Shares		S Ordinary Shares
	Number	£'000	Number	£'000	Number	£'000	Number	£'000
At 31 December the authorised share capital comprised:
allotted, issued and fully paid:
Ordinary shares of 10p each
Balance brought forward	7,835,163	784	4,972,459	497	7,835,163	784	4,972,459	497
Repurchased and cancelled in year	(36,867)	(4)	-	-	-	-	-	-
	7,798,296	780	4,972,459	497	7,835,163	784	4,972,459	497
Unissued: S Ordinary shares of 10p each	-	-	25,027,541	2,503	-	-	25,027,541	2,503
Unissued: unclassified shares of 10p each	52,201,704	5,220	-	-	52,164,837	5,216	-	-
	60,000,000	6,000	30,000,000	3,000	60,000,000	6,000	30,000,000	3,000

 

 

 

 

 

 

 

 

 

 

13 Reserves	Share		Capital	Capital	Capital
	premium	Distributable	reserves	reserves	Redemption	Revenue
	account	reserve	realised	unrealised	Reserve	reserve
	£'000	£'000	£'000	£'000	£'000	£'000
Ordinary Shares
At 1 January 2009	-	6,660	1,049	(2,074)	-	228
Gains on sales of investments	-	-	375	-	-	-
Increase in unrealised appreciation	-	-	-	84	-	-
Investment management fees	-	-	(95)	-	-	-
Dividends paid	-	-	-	-	-	(180)
Tax effect of capital items	-	-	20	-	-	-
Repurchase and cancellation of shares	-	(23)	-	-	4	-
Retained net revenue for period	-	-	-	-	-	168
At 31 December 2009	-	6,637	1,349	(1,990)	4	216
S Ordinary Shares
At 1 January 2009	4,227	-	(12)	(98)	-	136
Gains on sales of investments	-	-	150	-	-	-
Decrease in unrealised appreciation	-	-	-	(94)	-	-
Investment management fees	-	-	(66)	-	-	-
Dividends paid	-	-	-	-	-	(139)
Tax effect of capital items	-	-	14	-	-	-
Retained net revenue for period	-	-	-	-	-	78
At 31 December 2009	4,227	-	86	(192)	-	75

 

 

14 Net asset value per ordinary share
The net asset value per share and the net asset value attributable to the ordinary shares at the period end calculated in accordance with the Articles of Association were as follows:
	31 December 2009				31 December 2008
	Ordinary Shares		S Ordinary Shares		Ordinary Shares		S Ordinary Shares
	Net asset	Net asset	Net asset	Net asset	Net asset	Net asset	Net asset	Net asset
	value per	value	value per	value	value per	value	value per	value
	share	attributable	share	attributable	share	attributable	share	attributable
	p	£'000	p	£'000	p	£'000	p	£'000
Ordinary shares	89.7	6,996	94.4	4,693	84.8	6,647	95.5p	4,570

 

 

Statement of Directors' Responsibilities

 

The Directors are responsible for preparing the Annual Report, Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the net return of the Company for that period. In preparing these financial statements the Directors are required to:

 

- Select suitable accounting policies and then apply them consistently;

- Make judgments and 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 financial statements;

- Prepare the financial statements on the going concern basis unless it is inappropriate to

- Presume that the company will continue in business.

 

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Responsibility statement of the Directors in respect of the Annual Financial Report

 

We confirm that, to the best of our knowledge, the financial statements, prepared in accordance with the applicable set of accounting standards and set out on pages 36 to 54, give a true and fair view of the assets, liabilities financial position and profit or loss of the company; and the Directors' Report, set out on pages 19 to 29, includes a fair review of the developments and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that they face.

 

Other information

 

This announcement has been prepared on the same basis as the Annual Report and Financial Statements for the year ended 31 December 2009. The Annual Report and Financial Statements for the year ended 31 December 2009 will be filed with the Registrar of Companies and issued to Shareholders in due course. References to page numbers and notes to the financial statements are references to the Annual Report and Financial Statements for the year ended 31 December 2009.

 

The financial information contained within this announcement does not constitute the Company's statutory Financial Statements as defined in the Companies Act 2006. The statutory Financial Statements for the year ended 31 December 2008 have been delivered to the Registrar of Companies and contained an audit report which was unqualified.

 

Copies of this announcement and of the Annual Report and Financial Statements for the year ended 31 December 2009 will be available at the registered office:149 St Vincent Street, Glasgow, G2 5NW, and on the Company's website at www.mavencp.com/migvct4.

 

By order of the Board

 

Maven Capital Partners UK LLP

Secretary

 

31 March 2010

 

This information is provided by RNS

The company news service from the London Stock Exchange