Marwyn Val. Regulatory News (MVI)

LEI: 213800L5751QTTVEA774

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

30 June 2021

MARWYN VALUE INVESTORS LIMITED (THE "COMPANY")

Audited Annual Report and Financial Statements 2020

Marwyn Value Investors Limited announces the publication of its annual results for the year ended 31 December 2020.

The Annual Report and Financial Statements are available on the 'Financial Reports' section of the Company's website, http://www.marwynvalue.com/company-information/financial-reports.

Company enquiries:

Aztec Financial Services (Jersey) Limited

Katrina Boult / Jenny Keen

Telephone: 01534 833000

PR enquiries:

Temple Bar Advisory

Alex Child-Villiers / Will Barker

Telephone: 07795 425580 / 07827 960151

Cautionary Statement

This announcement contains forward-looking statements which are made in good faith based on the information available at the time of its approval. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievement of the Company to be materially different from those expressed or implied by these forward-looking statements.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

MARWYN VALUE INVESTORS LIMITED

AUDITED ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

I am pleased to present to shareholders the audited Annual Report and financial statements of Marwyn Value Investors Limited (LSE: MVI and MVIR) for the year ended 31 December 2020.

2020 will inevitably be remembered for COVID-19, a global pandemic which resulted in human loss, disruption to the global economy and the way we have lived our daily lives. Despite these extraordinary events, the NAV per share of both the ordinary shares and realisation shares grew, each by 2.6p and have been on an upward trajectory thus far in 2021. Our mature portfolio assets, Zegona and Le Chameau, have both contributed to recent gains and the pipeline of acquisition targets, as discussed in more detail in the Report of the Manager, provide real potential for growth and significant shareholder returns.

Discount Management

The level of the Company's ordinary share price discount to underlying net asset value remains a prime area of focus for the Board and the Manager. Despite a range of measures introduced over the last 10 years, the discount continued to grow through the start of 2020, reaching a peak of 49% in early May, driven, at least in part, by a market perception of an excess supply of shares from shareholders seeking liquidity. Consequently, we announced and completed an accelerated bookbuild to purchase ordinary shares, funded by the proceeds from the crystallisation of the ordinary share carried interest. This has had both short-term and long-term benefits to the Company's ordinary shareholders including an immediate and significant liquidity event for exiting shareholders, increased alignment of interests between the Manager and the Company's shareholders, a reduction in the perceived excess supply of shares, and the re-introduction of a preferred return hurdle to the ordinary share carried interest, ensuring ordinary shareholders receive a 7.5% preferred return before any future carry accrues.

Post the period end, in May 2021, the shareholder register saw the Company's largest shareholder exit their position, with some existing shareholders strengthening their positions and some notable new shareholders joining the register. The Board welcomes new shareholders who have joined the register and thanks existing shareholders for their continuing support.

Dividend

To further understand the views and concerns of our shareholders, the independent directors have recently met, or offered to meet, with all of the Company's larger shareholders to reconsider the effectiveness of the discount management. As a result of feedback received on the implementation of the Ordinary Share Distribution Policy, we have suspended the share buy-back programme that has been in place since 2018, reverting to the payment of dividends. Under our policy, distributions are maintained or grown on a per-share basis and currently represent an annual dividend of 9.06 pence per share, paid in equal quarterly instalments. Based on a share price of £1.21 as at 31 May 2021, this represents a yield of almost 7.5%.

Board composition

In 2020, we conducted a full review of our Board composition, considering in detail the recommendations of the AIC Code, following which we were pleased to appoint two new independent non-executive directors, Peter Rioda and Victoria Webster, and appoint Martin Adams as Senior Independent Director. Biographies for all Board members are included on our website, www.marwynvalue.com. The Board now comprises a majority of independent non-executive directors and the experience and expertise that Peter and Victoria bring to the Board complements our existing strong business and investment expertise and improves our governance.

November 2021 realisation share conversion

In November 2021, ordinary shareholders will be given the option to convert their shares into a new (second) series of realisation shares, which will provide investors with the ability to receive underlying, undiscounted net asset value, as and when investments are ultimately realised. Whilst this provides a mechanism for shareholders to realise the value of the discount, returns are only made on the exit of investments and there is no accelerated divestment for the realisation class. Furthermore, shareholders who convert their shareholding to the new series of realisation shares will not be exposed to any new Portfolio Companies in which the Company invests after creation of the new series of realisation shares, nor will they enjoy the benefits of distributions under the Ordinary Share Distribution Policy. The Board and the Manager will not be converting any of their shareholdings to the realisation class. Full details will be released through the publication of a prospectus relating to the admission of the new series of realisation shares to trading on the Specialist Fund Segment in due course.

Looking forward

As a Board, we support the Manager's view that the recent resurgence of public markets and institutional interest in alternative listed securities provides a strong market backdrop to launch a bespoke and improved European public market solution for investors, management teams and vendors. The Manager has a proven track record of generating shareholder value through listed acquisition vehicles and the Board are excited by the proposition of the 'MAC Model' which, alongside exceptional Management Partners, we believe can drive significant returns for the Company's shareholders.

Robert Ware

Chairman

29 June 2021

Ordinary Shares

The NAV per ordinary share of the Company increased during the period by 2.6p to £1.631, an increase of 1.6%, whilst the FTSE All-Share declined by 9.8%. As at 31 December 2020, the discount of the share price to NAV per ordinary share was 34.1%, compared to 34.3% as at 31 December 2019.

1 For the ordinary shares, inception to date movement is based on the combined weighted average NAV of Marwyn Value Investors I, II and B shares prior to their amalgamation, using the conversion ratio published on 17 April 2008.

Total return assumes the reinvestment of dividends paid to shareholders into the Company at NAV and is calculated on a cum-income basis.

Realisation Shares

The NAV per realisation share of the Company increased during the period by 2.6p to £1.767, an increase of 1.5% whilst the FTSE All-Share declined by 9.8%. Shareholder total return, including the cash returns to shareholders during the year, was 0.8%. As at 31 December 2020, the discount of the share price to NAV per realisation share was 23.6%, compared to 18.1% as at 31 December 2019.

2 For the realisation shares, shareholder total return is calculated as the movement in total shareholder value, including all distributions made to realisation shareholders over the relevant period.

2020 Performance

The increase in NAV per ordinary share and realisation share over the period was primarily attributable to an increase in the Master Fund's carrying value of its investment in Le Chameau arising from significant sales growth in their online channels; this is a trend that has been seen by a number of other retailers and has accelerated due to the COVID-19 pandemic. However, this increase in the carrying value of Le Chameau was largely offset by a realised loss on the indirect investment in Safe Harbour.

Despite the uncertainty and effects of the COVID-19 pandemic on the economy causing market volatility on a global scale, throughout the period the NAV for both ordinary and realisation shares remained relatively stable, reflecting the large proportion of the look-through portfolio retained in cash and the resilience of the active Portfolio Companies. The 2020 year-to-date performance of the FTSE All-Share index benchmark showed its greatest fall to March 2020 when it was down by over 34%,whereas the largest year-to-date drop for the ordinary shares and realisation shares throughout 2020 was 7.1% and 13.7% respectively.

Whilst global markets recovered somewhat from the March 2020 low-point, the ordinary shares and realisation shares both produced positive annual total returns for shareholders in 2020, despite the benchmark FTSE All-Share remaining down 9.8% for the year.

Performance since inception (to 31 December 2020)

From inception in February 2006 to 31 December 2020, the Ordinary Share NAV Total Return was 135.2%, compared to the FTSE All-Share performance over the same period of 110.5%.

The Realisation Share performance since inception on 30 November 2016 to 31 December 2020 was (14.6)%, compared to the FTSE All-Share performance over the same period of 15.5%.

2021 Performance to date

The 2021 year-to-date (to 31 May 2021) Ordinary Share NAV Total Return was 14.6% and the Realisation Shareholder Total Return was 26.2%, reflecting the positive performance of both Zegona (ticker ZEG LN) and Le Chameau and, for the Ordinary Shares only, the performance of AdvancedAdvT (ticker ADVT LN). The FTSE All-Share performance for the same period was 10.9%.

This brings the performance since inception for the Ordinary Shares to 169.6% (FTSE All-Share for the same period: 133.5%) and since inception for the Realisation Shares of (5.3)% (FTSE All-Share for the same period: 28.2%).

A review of the performance of the underlying investment assets is set out in the Report of the Manager.

Ordinary shares

Allocation of NAV by company at 31 December 2020

Based upon the Company's indirect investments in the Portfolio Companies through its interest in the Master Fund and MVI II LP, the Company's total NAV attributable to ordinary shareholders as at 31 December 2020 is broken down as follows:

3 Formerly Wilmcote Holdings plc

4 Formerly Marwyn Acquisition Company I Limited

5 Cash is primarily held by the Master Fund

Allocation of NAV by company at 31 May 2021

Based upon the Company's indirect investments in the Portfolio Companies through its interest in the Master Fund and MVI II LP, the Company's total NAV attributable to ordinary shareholders as at 31 May 2021 is broken down as follows:

All portfolio assets are held at fair value by the funds which hold them in accordance with International Financial Reporting Standards. Where there is no active market for a listed investment, or where the investment is unlisted, the valuation methodologies applied are fully compliant with International Private Equity and Venture Capital valuation guidelines as updated.

Realisation shares

Allocation of NAV by company at 31 December 2020

Based upon the Company's indirect investments in the Portfolio Companies through its interest in the Master Fund, the Company's total NAV attributable to realisation shareholders as at 31 December 2020 is broken down as follows:

Allocation of NAV by company at 31 May 2021

Based upon the Company's indirect investments in the Portfolio Companies through its interest in the Master Fund, the Company's total NAV attributable to realisation shareholders as at 31 May 2021 is broken down as follows:

Who we are

Founded in 2005, we are a specialist institutional sponsor of European listed acquisition companies. We partner with experienced industry executives who have built careers in their industries and developed deep-routed expertise and relationships to enhance deal-sourcing and subsequent platform build-out, utilising their wealth of sector-specific knowledge.

Marwyn Strategy

Marwyn's strategy is to identify, support, invest in and work alongside high-calibre, sector-leading, experienced, operational management teams to acquire, manage, build, and grow businesses headquartered in the UK, Europe, or the Americas.

· Long standing experience in acquisition companies across a range of sectors

· Tried and tested origination model based upon 15+ years of market relationships

· Immersive management partnership model delivering deep sector expertise

· Experts in completing reverse acquisitions with a long track record of raising equity from and delivering returns to blue chip institutional investors

· Bespoke acquisition vehicle structure, providing executional advantages, no promoter shares and which are better aligned with delivering long term investor returns

· Investment focus on companies where we can apply our management-led value creation expertise

Europe's Leading Sponsor

Our acquisition companies have delivered over £5.0 billion of profits to equity investors.

A Track record of success

(1) Total Equity Value reflects both realised and unrealised value to 31 May 2021; (2) Includes total capital invested and returned in related predecessor and successor entities

James Corsellis

James founded one of the earliest strategic technology consultancies in 1994 and was Chief Executive Officer of icollector plc, a leading provider of live auction trading platforms. He later negotiated its joint venture with eBay, which saw icollector become the exclusive partner worldwide for traditional auction houses. James co-founded and leads Marwyn and typically holds board positions on Marwyn's acquisition companies.

Mark Brangstrup Watts

Mark has been advising the boards of UK public companies since 1998. As a management consultant, he was responsible for strategic development projects for international clients including Ford Motor Company, Cummins and 3M. Mark co-founded and leads Marwyn and typically holds board positions on Marwyn's acquisition companies.

· Mark and James are supported by a team of 18, based in London and Jersey

· To date, Marwyn has set up 19 acquisition vehicles that have deployed £3.9 billion of equity capital since 2005

· These acquisition vehicles have completed over 80 further bolt-on acquisitions demonstrating the continuing support and value-add of Marwyn

· Marwyn is a well-aligned investor in the Company with 17.6% of the Company's ordinary shares held by Marwyn partners

· Marwyn Funds typically act as the lead cornerstone investor in the Portfolio Companies

· Additional capital to fund Marwyn acquisition companies is drawn from both our club of public equity-focussed co-investors with whom we have long standing relationships and new investors introduced by our Management Partners

How we invest

Over the last 15+ years, we have gained extensive experience in executing successful investment strategies in the public markets. Throughout this time, we have invested across a broad range of sectors and successfully launched 116 listed acquisition companies in conjunction with leading executives or management teams (our "Management Partners") which have completed a business combination. These have gone on to make more than 80 subsequent follow-on acquisitions, delivering more than £5.0 billion in equity profits.

By partnering with exceptional teams, our Management Partners have added value through the origination of investment opportunities, the assessment and due diligence process and by playing a long-term role in the hands-on execution of the strategy, commonly taking the role of Chairman or Chief Executive Officer.

A key competitive advantage over other investment managers in both originating opportunities and subsequent long-term performance has arisen due to the formation of long-term partnerships with Management Partners. Management Partners sourced either from our network and/or from the existing leadership of previous target companies, have been pivotal in the success of our investee companies. They remain a central part of the strategy for the origination of business combination opportunities and the plan for long-term value creation for our Portfolio Companies. A number of our previous Management Partners are shareholders in our new vehicles validating the value that they believe Marwyn adds to its Portfolio Companies.

6 excludes Praesepe and Le Chameau, investments which were not launched as listed acquisition vehicles comparable to our current strategy and entities that did not complete a platform acquisition

Our competitive strengths

Track record in transaction origination and execution in the public markets

Under our current investment strategy, alongside our Management Partners, we have launched 11 acquisition vehicles that have successfully completed a platform acquisition. We have developed significant expertise in structuring and executing transactions in the public markets, including raising significant equity capital from institutional investors.

Track record of identifying and attracting high quality Management Partners

We believe that we offer a compelling proposition to potential Management Partners, emphasising the importance of their leadership and the depth of understanding they have of their sector, leveraging our transactional, investment and public market expertise to support their work. Our priority is to identify and engage Management Partners, commonly ahead of pursuing specific targets for a business combination, to ensure their leadership and ultimate ownership of the subsequent investment thesis. We commonly provide our Management Partners with a substantial operating infrastructure (including office space, IT support and HR support) and, historically, the majority have elected to remain headquartered at our offices for the entire period of their investment.

We have sourced these Management Partners across a range of industries and, to date, over 40% of the enterprises we have backed have been led by women, as either CEO or Chair. All of our Management Partners have an exceptional operational track record, usually have experience in managing listed companies and bring their own deep sector knowledge and experience, as well as their own network of people and relationships.

Management Partners have historically been significant participants in the long-term incentive arrangements in each Portfolio Company and may also invest directly in the shares of the Portfolio Company.

We believe that our proposition to management teams is highly competitive compared to a role in listed acquisition businesses or to other public company roles and our track record of partnering with management teams, our continued relationship with Management Partners we have previously worked alongside, and the long term alignment of interests we have through the Long-Term Incentive Plans (LTIP) we believe will assist us in securing partnerships of the highest quality for current and future acquisition companies.

Track record of delivering long term value to shareholders

Our public company track record over the last 15+ years demonstrates our ability to source, structure and complete business combinations, work alongside management and other stakeholders to deliver strategic plans and ultimately to return value to investors either through share price gains (and dividends) or an exit.

Market Opportunity

We believe that the resurgence of public markets and institutional interest in alternative listed securities provides a strong market backdrop to launch a bespoke and improved European public market solution for investors, management teams and vendors. As an early mover in the European SPAC market, we believe there is an opportunity to deliver a solution that improves the existing reverse acquisition process, along with other improvements on existing models to create a competitive advantage. With this in mind, our key strategic objectives are:

i. recruit exceptional Management Partners;

ii. invest in sectors and companies that have the potential to deliver attractive long-term returns; and

iii. increase each Portfolio Company's attractiveness to equity investors and business owners.

To take advantage of this market opportunity, coupled with the significant pipeline of potential acquisition targets that we are analysing, we launched three new Marwyn acquisition vehicles during 2020, providing us with four Portfolio Companies seeking platform acquisitions. Launching these companies simultaneously provided efficiencies and savings through the sharing of costs and provides us with the ability to react to opportunities, as and when they arise, without any lead-time to establish a vehicle.

The four acquisition vehicles we have are:

· Marwyn Acquisition Company plc - renamed from Wilmcote Holdings plc to better facilitate the introduction of new management teams and acquisition opportunities generated by association to our investment network. MAC plc is an AIM-listed vehicle which is focussed on transactions in the industrials, manufacturing, engineering, construction, building products or support services sectors. The target company size for MAC plc is expected to be smaller than the other vehicles and will focus on opportunities that would specifically benefit from the use of a listing on the AIM Market.

· AdvancedAdvT Limited - renamed in March 2021 from Marwyn Acquisition Company I Limited, ADVT has already appointed Vin Murria OBE as Chairman and raised £130 million through a placement of new listed ordinary shares in March 2021. ADVT's strategy is to invest in a software business or businesses, using the extensive knowledge and expertise of Vin in this sector. Vin was previously our Management Partner for Advanced Computer Software Group plc which was sold for an enterprise value of £750m in 2015 to Vista Private Equity and was one of Marwyn's (and the Company's) most successful investments. The partnership with Vin for a second time underlines the attractive infrastructure and support we provide to our Management Partners.

· Marwyn Acquisition Company II Limited and Marwyn Acquisition Company III Limited are both listed on the Standard Segment of the London Stock Exchange and are actively considering a possible further equity issue of up to £200 million each in redeemable listed shares and warrants. If they decide to go ahead with the fundraising, the 'MAC Model' that it is proposed that they both follow is further described below.

MAC Model: The better model

We have designed the MAC Model from the following guiding principles:

1) reduce upfront dilution and improve long-term economic alignment of all stakeholders which we believe will make MAC II and MAC III more attractive to institutional investors and vendors therefore improving the prospects of executing a successful business combination;

2) ensure that the incentives in place for Management Partners and Marwyn are aligned with delivering long-term equity profits to investors; and

3) provide a competitive advantage in facilitating an accelerated initial business combination and private unlisted capital fundraising.

To date, the Company's ordinary share class has indirectly invested £9.6 million as part of the Marwyn Funds' total investment of £12.5 million into each of MAC II and MAC III to support their objectives.

The key characteristics of the MAC Model will, when implemented by a MAC company, be:

No upfront promote structure reduces dilution

The MAC Model would not have a promote structure (present in traditional SPACs) that allows the promoter to receive 20% of the acquired company often with no or limited performance criteria. Instead, an LTIP would be put in place based on achieving long-term performance and would provide a share of equity profits delivered to shareholders. This would minimise dilution at the time of the initial business combination and dilution would only occur if specific shareholder returns are achieved.

A performance linked LTIP rewards long-term value creation

The performance-related LTIP would ensure alignment with shareholders and long-term performance. The LTIP would be structured to provide Management Partners and Marwyn with a share of equity profits, subject to a minimum compound annual preferred return to the company's shareholders and would be exercisable between three and seven years following the initial business combination.

The value of the profit share would be calculated on the growth in equity value generated for shareholders, subject to a minimum annual preferred return, typically 7.5%.

A properly capitalised operating platform with sufficient capital to support the strategy and a thorough due diligence process ahead of a business combination

We believe that it is important that MAC vehicles are sufficiently capitalised to not only finance their initial launch but also to provide sufficient operating capital to support the execution of their strategies, including a high standard of due diligence, as well as appropriate legal and financial advice consistent with a public company transaction.

Unlike a typical SPAC, the MAC vehicles would have material operating capital, in excess of their initial launch and underwriting expenses.

A competitive advantage in closing a business combination and raising private capital

We believe that there is an opportunity to enhance the existing reverse acquisition process. The MAC Model, in addition to traditional transaction structures, would have the ability, in appropriate circumstances, to execute a transaction on an expedited basis through an 'accelerated initial business combination', which we believe would make it highly competitive compared with US SPACs and typical European acquisition companies, whilst still maintaining the quality of due diligence and documentation consistent with conventional public market transactions for listed market investors.

In an accelerated initial business combination, new unlisted shares would be issued to selected investors in a private placement, with the proceeds funding the transaction, or to vendors as consideration, enabling a shorter timeframe to execution certainty in comparison to more traditional acquisition structures. Such unlisted shares would later automatically convert into listed ordinary shares, subject to meeting regulatory requirements.

We believe that the transaction approach, as described above, would have the following core benefits:

· Confidentiality: We would be able to provide vendors with a confidential transaction process, where there is no regulatory need to announce the transaction until there is execution certainty.

· Accelerated completion: We would be able to complete a business combination in advance of any required public documentation.

· Enhanced execution certainty: The accelerated transaction timetable and confidential private capital raise process would be able to provide vendors of high-quality businesses with a shorter timeframe to execution certainty, ahead of further committing cost and resource to a business combination process.

· Material cost saving on aborted transactions: As the business combination could be completed without any required public documentation having to be prepared contemporaneously, in the event that a transaction were to abort for any reason, the costs incurred would likely be significantly less than a public capital raise equivalent.

We believe that this structure would be highly attractive and would effectively compete against private equity processes, allowing the development of a significant pipeline of attractive opportunities.

Redeemable capital

Subsequent to any private completion of a business combination, the shareholders who invested in the initial redeemable listed shares would have the option to redeem their shares or convert them into listed ordinary shares in the ongoing enlarged company. Prior to the option to redeem or convert, the proceeds from the issue of the redeemable shares would be held in trust and would not be available to meet any of the company's expenses.

Outlook

Our new acquisition company model (when adopted by MAC companies), together with the expected return of capital from Zegona, following the successful sale of Euskaltel, provide us with both the structure and the capital resources to take advantage of the resurgence of interest in public markets from experienced executives and institutional investors. Our Management Partner approach has secured a number of exceptional individuals and teams to lead our vehicles and through them we are seeing some of the strongest investment opportunities for a number of years. 

We are delighted to be working alongside Vin once again - raising £130 million of permanent equity into AdvancedAdvT is testament to the support she has and we are confident that AdvancedAdvT will acquire an attractive business.

After several difficult years, the rapid digitalisation of Le Chameau has seen that business grow, particularly online, despite the obvious challenges faced by the retail sector due to COVID-19. Under the stewardship of the new management team installed in November 2019, we expect continued growth in the coming years.

The proposed Zegona return represents an almost 50% uplift on the 31 December 2020 share price and gives the firepower to back our investment vehicles and attract new Management Partners to help us generate returns for the Company's shareholders.

We expect significant progress during the remainder of 2021 and look forward to updating you in the next interim report.

Environmental, Social and Governance

The importance of ESG considerations

With the global impact of COVID-19 being felt by everyone, across many aspects of people's day to day lives, the importance of sustainability and responsible investing has never been more prominent. We believe that the pandemic has accelerated the pace of change, with an unprecedented increase in digitalisation, affecting the way people live, work and consume, and how businesses operate, engage and sell to their customers. 

As an investment company, the Company delegates the day-to-day management of its business to the Manager (the authority of the Manager is detailed in the Report of the Directors). Whilst the Company looks to the Manager in relation to the execution of its investment strategy, in carrying out its activities and in its relationships with service providers, the Company aims to conduct itself responsibly and fairly.

As the Manager, we believe it is important to invest in companies that act responsibly in relation to social, governance, ethical and environmental issues. Whilst our strategy considers multiple sectors, our approach to identifying both Management Partners and target businesses, and the continuous evolution of those investments through both operational improvements and bolt-on acquisitions can, at each stage, integrate the same fundamental ESG principles to meet investors financial and sustainability objectives.

Our Firm…….

As a firm, Marwyn is committed to:

1. Environmental awareness and action

We are mindful of our place in the communities in which we work and live. COVID-19 has had a well-documented effect on global carbon emissions, as with almost all firms, our working practices have dramatically changed over the last 15 months.

We know that even the little things count, such as recycling and avoiding single use plastics. We have paused and reflected on the way we work, going paperless, enabling our people to work from home and utilising technology to meet virtually without the need for travel. All of which have a positive impact on emissions and the use of natural resources.

Beyond the day-to-day, environmental awareness and understanding is inbuilt to our investment strategy. We are committed to continually expanding our understanding and knowledge and looking at new and innovative ways of working and business opportunities. 

2. People, diversity, and charity

Our people are fundamental to our business. We are committed to providing an inclusive and collaborative place to work that encourages diversity, where people are recognised and rewarded for delivering on our strategic ambitions and values (including sound and effective risk management) and incorporating measures to avoid conflicts of interest and excessive risk taking. Our incentive scheme ensures that the team are aligned with the Company's shareholders, whilst providing an incentive that allows us to hire and retain the best talent.

Our dynamic team includes people from a wide range of countries, with various qualifications, backgrounds, and expertise, with half of our team being women. We have a highly qualified team and foster a culture of continued learning and development to keep our team at the forefront of market practices.

The health and wellbeing of our team is imperative. Alongside encouraging a work-life balance, we have an on-site gym and can arrange virtual training sessions.

We also operate the Marwyn Trust which provides financial support to charities both in the UK and further afield.

3. Corporate Governance

As a regulated business, our Corporate Governance manual includes requirements to ensure compliance with all applicable laws and regulations, including the bribery act and MAR, with careful monitoring of gifts and hospitality. We also have a whistleblowing procedure, should employees wish to raise concerns, and an employee handbook which addresses dignity at work, equal opportunities, disability and harassment. Marwyn does not make any political donations, nor is it involved in political lobbying.

Investing responsibly is in our nature. We do not make short term investments, we carefully conduct due diligence on investment opportunities and consider many requirements for our investments, of which ESG is a factor.

We believe that ESG is holistic, covering a great range of topics including the protection of data, tax compliance and ethics. The global ESG reporting landscape is evolving and we are considering how best to monitor and report our ESG credentials. We endeavour to integrate processes, policies and procedures into our day-to-day operations to both mitigate risk and create opportunity from the developing themes around ESG.

Examples of what we do

The Marwyn Trust

The Marwyn Trust was formed in 2009 and was established to make donations to charitable institutions working with the underprivileged and in the fields of education, healthcare, economic development and supporting individuals in the arts profession. In 2019, grants made to charitable institutions amounted to £735,000, supporting two charities, the Sumbandila Scholarship Trust ("Sumbandila") and the Helen Bamber Foundation ("HBF").

Sumbandila provides full scholarships to private schools, as well as an educational outreach program to children living in rural areas in South Africa. This aims to transform the lives of underprivileged children, creating entrepreneurs and leaders who will make significant contributions to the future of South Africa. Marwyn management have built strong relationships with Sumbandila, having seen first-hand the work that they do.

The HBF is a human rights charity that gives survivors of trafficking and torture the strength to move on. Each of their clients has a complex, unique and painful history. Most survivors have either been trafficked to the UK or have fled their country of origin after experiencing some of the most abhorrent crimes. The HBF ensures survivors are free, healthy, safe and are protected from re-victimisation, detention and poverty.

Diversity in our team

Marwyn has a team built on ability and performance, promoting from within and encouraging a wide range of skills and expertise. Half of our team are female, with one of the four partners also being female. Over the years we have had people join us from many different countries, all bringing with them different expertise and experiences.

Board diversity

Of the enterprises backed by Marwyn, over 40% have been led by female executives as either CEO or Chair.

ESG Integrations within the investment lifecycle

Establish an acquisition vehicle

· Perform in depth due diligence on the Management Partners to build an exceptional and diverse team

· Understand the sector, perform detailed due diligence on potential targets, the industry, opportunities, regulations, trends and risks

· Consider deal structuring and ability to exit

· Establish an incentive scheme that completely aligns the management team with shareholders

Development of the acquisition vehicle

· Perform full due diligence on the board, including that conducted by the broker

· Investment thesis presented to cornerstone investors

· Board composition revisited - focus on corporate governance best practice, diversity and required skills and expertise

· Preparation of key company policies, MAR compliance manual, anti-bribery and corruption and whistleblowing policies to ensure compliance with relevant legislation

· Preparation of the FPPP to provide the framework within which the company will operate, including prescribed matters reserved for the board

· Full disclosure of the board, strategy, key agreements included in the prospectus

Identify and complete the platform acquisition

· Extensive due diligence performed on target business

· Consideration of ESG risks specific to the target business along with red flags from due diligence reports prepared by third party providers

· Due diligence to cover financial, pension & HR, tax, IT, legal, commercial, environmental, insurance and asset integrity as needed

· Creation of the 100-day plan in conjunction with the FPPP to ensure risks minimised and key operational considerations made

· Revisit board composition, executive management and their incentivisation to ensure correct mix of skills and experience to lead the enlarged group

Operations control and bolt-on acquisitions

· Monitor resolution of items on the 100-day plan

· Regular board meetings to review progress, issues identified and further investment opportunities

· Oversight by the board of ESG issues and opportunities, reporting to shareholders through their annual reports on relevant topics

· Ongoing monitoring of compliance with listing rules and all internal policies and procedures

Current Portfolio

Zegona Communications plc - TMT

www.zegona.com

As at 31 May 2021

Zegona Return of Capital

In May 2021, Zegona announced its intention to return £335 million to its shareholders in cash via a capital return, contingent on receipt of the proceeds from the proposed acquisition of Euskaltel by MasMovil. The capital return will be implemented using the mechanism which the Zegona directors believe offers the best combination of timeliness, cost effectiveness and tax efficiency. Zegona is committed to completing the capital return as soon as is reasonably practicable.

The return of capital, should it take place, represents a value of £1.53 per Zegona share (including the dividend announced by Zegona in June 2021) and will result in proceeds of approximately £46.1 million attributable to the Company's ordinary shares and approximately £6.8 million attributable to the Company's realisation shares, With the remaining net asset value per Zegona share expected to be equivalent to £0.05 (resulting in total value per Zegona share of £1.58), this will generate a 1.4x return for the Marwyn Funds over the life of our investment. The remaining cash held by Zegona leaves the business in a position to source its next investment opportunity.

Management team

· Led by Eamonn O'Hare (CEO/Chair) and Robert Samuelson (COO)

· Experienced telecommunications executives

· Ex-Virgin Media team

Overview

Over the course of 2020, Zegona announced a series of key commercial and operational developments at its underlying investment, Euskaltel, including:

· the appointment of Ángel Olabuenaga Burón as CFO;

· the appointment of two new independent board directors alongside a reduction in the size of the Euskaltel board to help accelerate decision making and ensure greater dynamism within the business;

· a new management incentive scheme based on a three-year plan which allows senior management at Euskaltel to share in up to 4% of equity value creation (the maximum amount only achieved if Euskaltel's share price appreciates to €19 per share, from €7.90 at 30 June 2020); and

· a license agreement to introduce the Virgin brand to Spain as part of a national expansion (using Euskaltel's existing platform in the north of Spain), which aims to bring a value, high quality quad-play offering to a slightly more value-conscious customer segment in the 85% of Spain in which Euskaltel was previously not present.

Euskaltel's 2020 results reported growth in the main financial metrics. Revenues increased year-on-year by 1.7% and EBITDA (before the Virgin launch and early growth costs) grew 2.3%, whilst the annual growth in mass market fixed customers was the highest since the business was listed in 2015 and Virgin telco customer growth was more than 50% ahead of plan.

Over the year to 31 December 2020, Zegona's share price decreased by 3.5p to £1.055, with dividends totaling 4.8 pence per share paid in the year.

On 29 March 2021, Zegona announced that a wholly owned subsidiary of MasMovil had launched a tender offer to acquire 100% of Euskaltel for €11.17 per share in cash (the "Offer"). Whilst there remain additional regulatory and shareholder approvals outstanding in order for the Offer to become unconditional, Euskaltel's three largest shareholders, including Zegona, have irrevocably undertaken to tender all their shares.

Le Chameau - Luxury Goods

www.lechameau.com

As at 31 May 2021

1 Includes equity and debt into the Le Chameau operating group and excludes other investments made by its holding company

Value creation opportunity

§ The business is growing strongly across all channels, particularly online, and has returned to profitability in 2021

§ There is a significant opportunity for a valuation uplift to a luxury goods multiple once further progress has been made in delivering scale and margin growth

Management team

§ Led by Corry Taylor (CEO)

§ Strong operational background

§ Leveraging Bradshaw Taylor's infrastructure and experience across consumer-focused businesses

Overview

Since partnering with Bradshaw Taylor, the global distributor of Schöffel Country, in November 2019 and with Corry Taylor as CEO, Le Chameau has successfully implemented extensive cost-out and integration changes, which have significantly improved the business' ability to achieve profitability and positive cash generation. This has included the closure of the London office, a reduction in workforce at the factory, sell-down of excess inventory and consolidation of warehouse, fulfilment and back-office functions with other Bradshaw Taylor operations.

The impact of COVID-19 has been particularly severe on retail markets, with high-street stores being forced to shut in many areas and with significantly decreased footfall when those shops have been able to open. Despite this, Le Chameau's 2020 sales outperformed both prior year and against budget. Le Chameau's retail channel sales have remained relatively stable, due partly to many retailers having a strong online presence (and therefore being able to continue trading through major lockdowns) and also through the significant growth of Le Chameau's online channel sales. COVID-19 has acted as a catalyst for growth in the online segment, driving more consumers to purchase items online and has anecdotally led to higher use of outdoor footwear products during the lockdown periods. Le Chameau has witnessed a large number of new customers and a step up in conversion rates on the website. 

Le Chameau has significant momentum despite a difficult trading environment with COVID-19, headwinds in the broader retail sector and greater costs of UK firms to trade in the EU post-Brexit. The combination of increased forecast sales and reduced costs have resulted in a positive earnings forecast for 2021 and a write-up of the Master Fund's investment from £4.7 million in December 2019 to £12.3 million in December 2020. With continued growth being delivered into 2021, the investment in Le Chameau was written up further at 31 March 2021 to £14.4 million (£14.0 million of which is attributable to Company's shareholders).

AdvancedAdvT Limited - Software

www.advancedadvt.com

As at 31 May 2021

Value creation opportunity

§ Newly established vehicle with an experienced and highly credible management team

§ Sufficient capital to acquire assets of scale

§ Exposure to software sector set to benefit from structural changes brought about by the current macro environment, driving digitalisation and automation across the workplace

Management team

§ Led by Vin Murria (Chairman)

§ Former Founder and CEO of ACS and Computer Software Group, one of Marwyn's most successful investments

Overview

On 2 December 2020, AdvancedAdvT Limited (previously Marwyn Acquisition Company I Limited) completed the issue of 700,000 ordinary shares at a price of £1.00 per ordinary share, raising £700,000 to fund operating expenses and due diligence in the pursuit of acquisition opportunities.

On 31 December 2020, the Company entered into a letter of appointment with Vin Murria OBE, pursuant to which she was appointed Chairman of the company. Vin is an experienced executive and has operated and/or advised public companies for over 30 years. Vin was the founder and former CEO of Advanced Computer Software Group plc, a London Stock Exchange listed acquisition vehicle backed by Marwyn. The investment was highly successful, generating equity returns of 477%. Vin's previous directorships have included serving as a non-executive director at Sophos Group plc, Zoopla Property Group plc, Chime plc, DWF plc and COO of Kewill Systems plc (now Blujay).

In March 2021, the company raised £130 million through a fundraising from high-calibre institutional investors, changing the company's name to AdvancedAdvT Limited in the process. As part of this, the Company's ordinary share class indirectly invested £13.4 million, taking the total indirect investment by the Company's ordinary share class to £15.7 million (of the total £20.5 million invested across all Marwyn Funds).

Marwyn Acquisition Company Plc, Marwyn Acquisition Company II Limited and Marwyn Acquisition Company III Limited - Acquisition Companies

As at 31 May 2021.

For each of MAC II and MAC III, the Marwyn Funds own 75% of the 700,000 issued ordinary shares which carry voting rights, and 100% of the 12,000,000 issued A Shares which do not carry any voting rights but may convert to ordinary shares in the future.

Overview

§ MAC II and MAC III are newly launched LSE listed acquisition companies

§ Proposed MAC model and alignment believed by the Manager to be substantially better for vendors and long-term equity investors

§ £12.5 million invested by the Marwyn Funds in each of MAC II and MAC III with 1-1 warrants (at £1/5 year) to compensate the Marwyn Funds for early-stage investing

§ Each of MAC II and MAC III actively considering an equity fundraising of up to £200 million (supported by JP Morgan and Barclays)

§ MAC plc, AIM quoted, with focus on smaller UK centric opportunities

Value creation opportunity

§ Significant interest from management teams, companies and investors in European listed acquisition companies

§ Opportunity to deliver enhanced alignment with investors versus the typical US SPAC model

§ Opportunity to deliver an enhanced European model

§ Attractive model for experienced Management Partners

Target sectors

MAC II & MAC III:

§ Automotive & Transport

§ B2B Services

§ Clean Technology

§ Consumer & Luxury Goods

§ FinTech, InsurTech & Related Verticals

§ Healthcare & Diagnostics

§ Media & Technology

MAC plc

§ MAC plc is focussed on the industrials, manufacturing, engineering, construction, building products and support services sector

The Manager has identified and continues to work with a number of promising executive teams.

Status and activities

Marwyn Value Investors Limited is a closed-ended investment company registered by way of continuation in the Cayman Islands (registered number MC-228005). The rights of shareholders are governed by Cayman law and the Company's Articles. These rights may differ from the rights and duties owed to shareholders in a UK incorporated company.

The Company was admitted to trading as a closed-ended investment company on the Specialist Fund Market (the precursor to the Specialist Fund Segment) on 8 December 2008.

Fund Structure

The Company is a feeder fund which has invested all of its available capital into limited partnership interests in the Master Fund. The Company has no redemption rights for its investment in the Master Fund.

The Master Fund has invested in a second master fund, MVI II LP, a private equity fund structure through which the majority of the Master Fund's investments attributable to ordinary shareholders are made. Assets attributable to the realisation shareholders (the "realisation pool") are held directly by the Master Fund. A look-through breakdown of the NAV attributable to the ordinary and realisation shareholders along with ownership of the assets is detailed in the Allocation of Net Asset Value.

The structure of the Marwyn Funds, as detailed in the structure chart[1] below has evolved since inception to provide access to a wider investor base. The Company was added as a feeder to the Master Fund to allow access to public market investors through the Company's listing on the SFS and MVI II LP was launched to provide access to private equity investor capital.

Structure chart included in accounts available on the Company's website, www.marwynvalue.com.

Investment objective

The investment objective of the Company is to maximise total returns primarily through the capital appreciation of its investments.

Investment policy

There are no investment restrictions applicable to the Company or the Master Fund.

MVI II LP has the following investment restrictions:

· no investment can exceed 30% of the MVI II LP limited partners' aggregate commitments at the time of investment;

· it cannot engage in derivative trading except to hedge or enhance an investment in an existing or prospective Portfolio Company;

· it cannot invest in any blind-pool investment fund; and

· it may recycle distributed capital, up to an amount equal to 100% of the partners' aggregate commitments, which may only be used to acquire assets, and not pay fees.

The Master Fund and MVI II LP invest either directly or indirectly into the Portfolio Companies. The Master Fund (with the exception of the classes attributable to realisation shareholders) and MVI II LP (during its investment period being five years from the final close on 31 March 2019) are permitted to make follow-on investments into the Portfolio Companies and invest in new Portfolio Companies. In the case of capital relating to the Company's realisation shares, the Master Fund is only permitted to invest cash in follow-on investments in the Portfolio Companies within three years of creation of the realisation class which for the existing realisation class expired in November 2019.

The Master Fund also has an express power to use cash to acquire the Company's shares at a discount to their NAV for cancellation. Any such acquisitions and cancellations will be NAV enhancing for the continuing holders of ordinary shares. The use of such power is periodically reviewed by the Manager and the Board.

The assets attributable to the realisation pool are managed with a view to maximising investment returns, realising investments and making distributions to the holders of realisation shares as realisations are made. The realisation pool is permitted to invest cash allocated to it upon its creation in follow-on investments into existing Portfolio Companies made within three years of the creation of the realisation pool. Unlike the investment policy in respect of the assets relating to ordinary shareholders, cash generated on the sale of an investment in the realisation pool may not be re-invested and are, subject to amounts held back for reasonable working capital requirements, distributed to realisation shareholders.

The directors submit their Annual Report and the audited financial statements for the year ended 31 December 2020.

As announced on 10 July 2020, Ronald Hobbs and Louisa Bonney resigned from the board and Victoria Webster and Peter Rioda were appointed. Victoria Webster and Peter Rioda were re-elected by shareholders at the first AGM following their appointment.

The directors of the Company who served during the year and to the date of this report were:

Robert Ware - Chairman

Martin Adams - Senior Independent Director

Peter Rioda - Independent Non-Executive Director (appointed 9 July 2020)

Victoria Webster - Independent Non-Executive Director (appointed 9 July 2020)

Ronald Hobbs - Independent Non-Executive Director (resigned 9 July 2020)

Louisa Bonney - Non-Executive Director (resigned 9 July 2020)

Robert Ware (Non-Executive Chairman)Committee membership:

Nomination Committee - Chairman

Length of service: 15 years

Date of appointment: 3 October 2006

Last re-elected to the Board: 3 September 2019 at the Company's AGMRobert served first as corporate development director and then as deputy chief executive of MEPC between June 1997 and June 2003. MEPC was the fourth largest property company quoted on the LSE until September 2000, when Leconport Estates, a company jointly owned by clients of Hermes Pensions Management Limited and GE Real Estate, took the company private. During his tenure at MEPC, Robert and the team realised over £6 billion of international properties and invested over £2 billion, mainly in the UK. Prior to joining MEPC, Robert served as a director of Development Securities plc between 1988 and 1994.

Robert is currently chief executive officer of The Conygar Investment Company PLC, an AIM quoted property investment and development company formed in 2003 by Robert and members of the ex-MEPC team.

The Nomination Committee's considerations on Robert's tenure are included in the 'Nomination Committee' section of the Report of the Directors.

Martin Adams (Senior Independent Non-Executive Director)

Committee membership:

Audit Committee - Member

Nomination Committee - Member

Remuneration Committee - Chairman

Length of service: 6 years

Date of appointment: 8 May 2015

Last re-elected to the Board: 26 June 2018 at the Company's AGM 

Martin has served for over 30 years in executive and non-executive capacities, both as chairman and director of over 20 closed-end funds and fund-invested operating companies listed on European stock exchanges; and on the boards of fund management companies. His investment experience encompasses private equity, property, infrastructure and renewables assets, predominantly in Asia and Europe. Prior to serving on the boards of listed funds, he founded Vietnam Fund Management Company, raised and managed the first institutional investment fund for Vietnam and has been involved as a director, manager or sponsor of 11 investment funds and managers in Vietnam.

Martin is currently the Chairman of Eastern European Property Fund Limited and a non-executive director of National Investment and Infrastructure Fund Limited in India, Metage Funds Limited and Vietnam Phoenix Fund Limited. He started his career with the Lloyds Bank group, where he was based in the UK, Hong Kong, Portugal and the Netherlands.

In July 2020, Martin was appointed as the Senior Independent Director.

Peter Rioda (Independent Non-Executive Director)Committee membership:

Audit Committee - Member

Nomination Committee - Member

Remuneration Committee - Member

Length of service:

Date of appointment: 9 July 2020

Last re-elected to the Board: 15 January 2021 at an Extraordinary General Meeting

Peter is a qualified chartered accountant and independent non-executive director with over 25 years of industry experience who specialises in the establishment and management of alternative investment funds. He successfully established and developed Sanne Group's fund administration business between 2006 and 2016 exiting following its IPO in 2015. He has strong investment, risk management, governance and compliance skills acquired through directorships on a wide range of regulated and unregulated fund structures.

Peter is the independent non-executive chairman of Marwyn General Partner II Limited (the general partner of MVI II L.P.). Marwyn General Partner II Limited is not a Marwyn operating company and is regulated by the Jersey Financial Services Commission. It is a special purpose company whose role is as a general partner to MVI II LP, the fund into which the Ordinary Shares are ultimately invested. Peter's role as an independent director of Marwyn General Partner II Limited provides him with insight on Marwyn's investment process. The Board considers that this provides increased oversight and transparency into the investment structure and enhances the role Peter plays on the Board, without impugning his independence as a director of the Company. As such, the Board has determined him to be independent of Marwyn and any shareholders of the Company.

Victoria Webster (Independent Non-Executive Director)Committee membership:

Audit Committee - Chairman

Nomination Committee - Member

Remuneration Committee - Member

Length of service:

Date of appointment: 9 July 2020

Last re-elected to the Board: 15 January 2021 at an Extraordinary General Meeting

Victoria is a member of the Institute of Chartered Accountants in England and Wales having qualified with PriceWaterhouseCoopers. She has worked in Guernsey, London and New York, specialising in the audit of alternative investment funds. Victoria is the Managing Director of an independent chartered accountancy practice, Cleland & Co., which specialises in owner-managed companies and regulated entities across all sectors.

Victoria has no relationship with any Marwyn group entity and has no relationships with any other director, other than her role on the Board. The Board has determined that she is independent.

Directors' interests

The directors' interests in the ordinary shares of the Company were as follows as at 31 December 2020 and 31 December 2019.

The only change in the directors' holdings between 31 December 2020 and the date of approval of these financial statements was that Peter Rioda purchased 10,000 ordinary shares in the Company on 26 January 2021.

The directors' interests in the realisation shares of the Company were nil as at 31 December 2020 (2019: nil) and to the date of the approval of these financial statements.

The Board has put in place measures to ensure that the MAR is adhered to. 

Results

The results attributable to the shareholders for the year are shown in the Statement of Comprehensive Income.

Ordinary Share Distribution Policy

The Company's Ordinary Share Distribution Policy is comprised of two parts:

1. Minimum annual return

Policy

The Company will deliver a minimum annual return to Shareholders by making distributions in each quarter. Pursuant to the Ordinary Share Distribution Policy, in each year the Minimum Annual Distribution will be maintained or grown on a pence per share basis.

In circumstances where the Board decides to make a dividend payment which cannot be funded by income received by the Master Fund or MVI II LP, the Master Fund may make distributions from the capital attributable to Ordinary Share Interests to enable the Company to meet its obligations.

Any distribution of the minimum annual return may be made by way of:

(i) repurchases of ordinary shares;

(ii) by payment of dividends; or

(iii) a combination of both.

Implementation

Throughout 2020, the minimum return was effected via the share repurchase programme which commenced on 1 October 2018 (the "Buyback Programme"). Over the year, the Master Fund purchased 5,052,845 ordinary shares in the Company for a total of £5,374,604. These ordinary shares were converted into exchange shares under the Company's Exchange Procedure (as defined and described in the Company's prospectus dated 19 October 2016) and the corresponding limited partnership interests cancelled. The NAV-accretive benefit of these buybacks at a discount to NAV was 4.7p per remaining ordinary share.

Following feedback from the Company's significant shareholders on the implementation of this policy, the Board has determined that, from the start of 2021, the most suitable method to satisfy the minimum distribution is through the payment of dividends rather than through the Buyback Programme. Interim dividends of 2.265p per ordinary share were paid in February and May 2021, each being a total payment of £1,265,022.

2. Returns following Net Capital Gains

Policy

Where the Master Fund or MVI II LP disposes of an asset for a Net Capital Gain and the Company has not already returned to ordinary shareholders an aggregate amount since 19 November 2013 in excess of 50 per cent. Of that gain and any previous such gains pursuant to the Ordinary Share Distribution Policy (Minimum Annual Distribution payments referred to above are treated as if they had been returns of gains for this purpose), the Master Fund will distribute the difference to the Company. The Company will, in turn, make a corresponding distribution to ordinary shareholders by way of tender offers, share repurchases or other returns of capital and distributions. Any share repurchases may alternatively be made by the Master Fund and cancelled using the Exchange Procedure described in the Company's prospectus dated 19 October 2016. Returns following a Net Capital Gain may also be made by way of an extraordinary distribution, where applicable, by adding such amount to the next proposed quarterly dividend (if any), where doing so would not result in a delay as compared to declaring an extraordinary distribution.

The balance of any Profitable Realisation, after the payment of any incentive allocation, will be retained in the Master Fund and available for new and follow-on investments and to meet the Master Fund's reasonable working capital requirements, although all or part of the balance may be used to augment distributions under the Ordinary Share Distribution Policy. There is no adjustment, or offset, of any Net Capital Gains for any investments realised at a loss.

Implementation

Since the last distribution made under this section 2 of the Ordinary Share Distribution Policy following the disposal of the investment in Entertainment One, a total of over £37.9 million has been returned to ordinary shareholders (including the May 2021 dividend) compared to realised gains attributable to ordinary shareholders totaling £28.4 million (50% of which is £14.2 million). Accordingly, the Company has distributed £23.7 million in excess of what would be required under this policy and realised gains attributable to ordinary shareholders in excess of £45.0 million will be needed before any return on a Profitable Realisation is made. Should Zegona's return of capital complete, as discussed in the Report of the Manager, the additional realised gain is estimated to be £6.6 million (taking into account the dividend announced by Zegona in June 2021).

Since the implementation of this policy in November 2013, a total of £64.7 million has been returned to ordinary shareholders.

For the avoidance of doubt, the Company's Ordinary Share Distribution Policy applies only to the Ordinary Shares. The Realisation Shares carry no rights to participate in the Company's Ordinary Share Distribution Policy.

Realisation class cash return

In October 2020, the Company announced that funds attributable to realisation shareholders received from the initial distribution from the liquidation of Safe Harbour, along with cash held by the Master Fund attributable to realisation shareholders not required to be held for reasonable working capital purposes would be returned to realisation shareholders by way of a redemption of realisation shares. Following a redemption of the Company's interests in Class R(F) and Class R(G) of the Master Fund to the value of £0.84 million, the distribution to realisation shareholders was effected by way of a redemption of 503,171 realisation shares which were subsequently cancelled.

An incentive allocation payment in respect of Class R(F) of £163,888 was paid alongside the redemption of the realisation shares.

Accelerated bookbuild

On 27 May 2020, the Company announced the completion of an accelerated bookbuild whereby Liberum, the Company's broker, on behalf of MLTI, invited eligible shareholders to tender the Company's ordinary shares for purchase by MLTI on the terms and subject to the conditions set out in the Company's announcement on 22 May 2020.

The purpose of the accelerated bookbuild was to:

- return capital to eligible shareholders seeking to realise, in whole or in part, their investment in the Company;

- enhance the alignment of interests between Marwyn and ordinary shareholders by increasing the Marwyn principals' beneficial shareholdings of ordinary shares in the Company;

- narrow the discount to the prevailing NAV per ordinary share at which the ordinary shares are trading in the secondary market;

- reduce, in part, the perceived excess supply of ordinary shares; and

- reset Marwyn's future carried interest entitlement, including introducing a new 7.5% preferred return which is discussed in more detail below.

The accelerated bookbuild was funded through the sale of the accrued incentive allocations in respect of Class F and Class G interests in the Master Fund (the "Ordinary Share Carried Interest Entitlement") to the Company. This had the effect of crystallising the Ordinary Share Carried Interest Entitlement as at the close of business on 21 May 2020 and accelerated its payment (to the extent amounts were then payable).

The consideration paid by the Company for the acquisition of these incentive allocations was £19,111,102, being the value of the accrued but unpaid Ordinary Share Carried Interest Entitlement as at 21 May 2020. Of the Ordinary Share Carried Interest Entitlement, £6,027,458 was already beneficially owned by the Master Fund through its ownership of Marwyn RP Limited (the entity which was set up to acquire the incentive allocation owed to former partners and employees of Marwyn). Consequently, of the total consideration, a net amount of £13,083,644 was paid. This amount, net of tax and other costs was used to satisfy the accelerated bookbuild with the remainder of £1.6 million being used alongside the quarterly distribution amount for ongoing buy backs under the Company's existing Ordinary Share Distribution Policy. Following the crystallisation of the carry amount attributable to Marwyn RP Limited, it was subsequently liquidated.

Redemption and issue of interests in the Master Fund

The consideration for the purchase of the Ordinary Share Carried Interest Entitlement by the Company was funded by a partial redemption of interests in the Master Fund held by the Company in an amount equal to the consideration paid.

Following completion of the sale and purchase of the Ordinary Share Carried Interest Entitlement, the Company contributed the Ordinary Share Carried Interest Entitlement to the Master Fund in consideration for the issue of interests in the Master Fund in an amount equal to the consideration paid. Subsequent to this contribution, the Master Fund owned the Ordinary Share Carried Interest Entitlement and therefore the liability of the Master Fund in respect of the Ordinary Share Carried Interest Entitlement was extinguished.

Alongside this, the Class F interests and Class G interests were merged to simplify the interests into which the Company remains invested in. As a result, the Company's ordinary shareholders are now invested solely in Class F and the Company's realisation shareholders are now invested in Class R(F)1 and Class R(G)1 interests in the Master Fund.

Future carried interest entitlement

As discussed above, as part of the accelerated bookbuild, the future carried interest entitlement which would otherwise have accrued after 21 May 2020 (the "Future Carried Interest Entitlement") was reset with a reference amount of £90,289,249, being the Company's estimated ordinary share NAV as at close of business on 21 May 2020. Once returns to ordinary shareholders totalling £90,289,249 have been made (through any means including dividends, share buy backs and any additional amounts returned where required on the exit of any investment), returns will be divided 80/20 between ordinary shareholders and carried interest partners, subject to ordinary shareholders receiving a preferred return of 7.5%. Full details of the Future Carried Interest Entitlement are included in the Company's RNS announcement on 22 May 2020.

Share capital

As at 31 December 2020, the Company had 55,850,842 ordinary shares in issue (2019: 60,903,687) and 3,684,055 realisation shares in issue (2019: 4,187,226).

Portfolio Company costs

Entities within the Marwyn group may provide services to the Portfolio Companies indirectly invested in by the Company. These services include, but are not limited to, corporate finance advisory, transactional support, company secretarial, administrative and accounting services.

Fees for any services provided are negotiated and agreed with the independent management teams running each Portfolio Company and are in accordance with any regulatory or corporate governance requirements, as applicable. There is no obligation for any Portfolio Company to use the services offered by the Marwyn group and third party service providers could be, and frequently are, used.

Due to the shareholdings that the Marwyn Funds have in the Portfolio Companies and directorships that the Marwyn principals have on their boards, Marwyn group entities are invariably considered to be 'related parties' to the Portfolio Companies and as such, all fees payable to Marwyn entities are fully disclosed in the Portfolio Companies' audited accounts, with all contracts deemed 'significant' also being disclosed in any Portfolio Company admission document or prospectus.

The Portfolio Company costs indirectly borne by the Company are proportional to the Company's indirect holding in each Portfolio Company. The holding in each as at the balance sheet date are disclosed in the Portfolio Company pages in the Report of the Manager.

Directors' remuneration 

The emoluments of the individual directors for the year were as follows:

*Ronald Hobbs' remuneration includes £40,000 payment in lieu of notice

**Payable to Axio Capital Solutions Limited

Directors' fees are paid directly from the Master Fund. The above fees do not include reimbursed out-of-pocket expenditure. From 1 January 2021, the annual fees payable to Robert Ware and Martin Adams increased to £50,000 and £45,000 respectively.

Manager

Throughout 2020, Marwyn Asset Management Limited was the manager of the Company, the Master Fund, MVI II LP, its stapled co-investment vehicle, MVI II Co-Invest LP and MVI II DCI I LP, a discretionary co-investment vehicle and was advised by Marwyn Investment Management LLP. Effective 1 April 2021, Marwyn Investment Management LLP replaced Marwyn Asset Management Limited as the manager on the same contractual terms as applied to MAML, included as to fees, updated to account for regulatory developments and the additional requirements placed on a manager regulated by the FCA.

The management agreement governing the Company's appointment of the Manager allows for the investment strategies that the Manager may employ to be in any securities, instruments, obligations, guarantees, derivative instrument or property of any nature in which the relevant vehicle is empowered to invest and as contemplated by its investment policy.

The Manager is entitled to a management fee, payable by the Company in arrears, equal to 1/12th of 2% per month of the NAV from the Company where such investment is not in the Master Fund. As the Company's investments are all through the Master Fund, the Company does not currently pay a management fee to the Manager and will not do so for as long as all investments are through the Master Fund.

The Manager receives a management fee from the Master Fund, payable monthly in arrears, equal to 1/12th of 2% of the NAV before management fees and incentive allocations in respect of Class F, Class G (up to the point it was merged with Class F following the accelerated bookbuild), Class R(F)1 and Class R(G)1 interests of the Master Fund into which the Company invests. From 30 November 2018, being 2 years after the creation of the realisation pool, the management fee on the realisation share interests is calculated by reference to NAV before management fees and incentive allocation less the aggregate value of cash and near cash investments attributable to the realisation share interests.

The Manager may, at its discretion, pay from the management fee to any person to which it has delegated any of the functions it is permitted to delegate. MUFG Alternative Fund Services (Ireland) Limited) as administrator to the Master Fund, calculated the management fee payable to the Manager by the Master Fund up to 31 December 2020. From this date, the new administrator to the Marwyn Funds, Aztec Financial Services (Jersey) Limited, calculates the management fee payable. The Manager is also entitled to reimbursement of certain expenses incurred by it in connection with its duties. The Company does not pay any management fee or carried interest charge as a result of its indirect investment in MVI II LP through the Master Fund.

Incentive allocation

Incentive allocations are due from the Master Fund in respect of interests in Class F, Class R(F)1 and Class R(G)1 into which the Company invests. These incentive allocations are only payable on returns being made to shareholders as disclosed in the Company's RNS announcement published on 22 May 2020 for the Class F interests and as disclosed in Part II, section 9 of the Company's prospectus published on 19 October 2016 for the Class R(F)1 and R(G)1 interests. These documents are available on the Company's website.

The incentive allocations are deducted from the Gross Asset Value of the Master Fund in deriving the NAV. The NAV is used to calculate the value of the Company's holding in the Master Fund.

As part of the accelerated bookbuild in May 2020, as described earlier, the accrued incentive allocation in respect of the classes invested in by the Company's ordinary shares (being Class F and Class G at the time) was crystallised and paid in full. This had no impact on the NAV attributable to ordinary shareholders, but resulted in a new Class F incentive allocation, including a new 7.5% preferred return to ordinary shareholders. Full details of these arrangements are included in Note 7 of the financial statements.

Substantial shareholdings

At 31 December 2020 the following interests in 3% or more of the issued ordinary shares had been notified to the Company.

At 31 May 2021 the following interests in 3% or more of the issued ordinary shares had been notified to the Company.

Auditors

As announced by the Company on 23 October 2020, the audit services provided to the Company and the Master Fund by PricewaterhouseCoopers LLP, in addition to those provided by Ernst & Young LLP to MVI II LP, were unified in a single provider: Baker Tilly.

Baker Tilly was appointed by shareholder resolution at the first AGM following their appointment.

The Audit Committee does not have any reason to believe that Baker Tilly did not conduct an effective audit.

Baker Tilly has expressed its willingness to continue to act as auditor to the Company and a resolution for its re-appointment will be proposed at the forthcoming AGM. Audit fees for the year ended 31 December 2020 for the Company total £20,250. No non-audit services were provided by Baker Tilly for the Company in the year.

Expenses

All Company-related expenses are paid by the Master Fund and allocated to the relevant Master Fund class interest as described in Note 3.8 to the financial statements.

A summary of costs ultimately incurred by both the ordinary shareholders and realisation shareholders is included in the 'Key Information Documents', located on the 'Documents' section of the Company's website, www.marwynvalue.com.

Annual General Meeting

The notice of the AGM will be forwarded to shareholders under separate cover.

Corporate governance

As a company registered in the Cayman Islands and subject to the rules of the Specialist Fund Segment, the Company is not required to comply with the UK Corporate Governance Code published by the Financial Reporting Council.

The directors, however, recognise the importance of maintaining sound corporate governance that meet the listing requirements and so seek to ensure that the Company adopts a framework for corporate governance, including policies and procedures which reflect those principles of good corporate governance that are appropriate to the Company's size and status as an investment company and are in line with the best practices in relation to matters affecting shareholders, communities, regulators and other stakeholders of the Company.

The Company is a member of the AIC and the Board has considered the principles and recommendations of the AIC Code.

The AIC Code sets out a framework of best practice in respect of the governance of investment companies. It has been endorsed by the UK Financial Reporting Council. The AIC Code is available on the AIC's website (www.theaic.co.uk).

The Board considers that reporting against the principles and provisions of the AIC Code provides the most relevant information to shareholders given that the Company is an externally managed investment company.

The Company has complied with the principles and provisions of the AIC Code, except as set out in this report.

Board Composition and Meetings

The Chairman, Robert Ware, is not considered to be independent due to his tenure as Chairman and his having interests in, and having other directorships within, the Marwyn group. As detailed more fully in the 'Nomination Committee' section later in the Report of the Directors, the Nomination Committee believes that Robert's high level and range of business knowledge, financial experience and integrity enables him to provide clear and effective leadership and, in conjunction with his fellow Directors, proper stewardship of the Company. The Company's independent non-executive directors are of the view that Robert's position as Chairman ensures the smooth running of the business and a co-operative and aligned relationship with the Manager.

Martin Adams, Peter Rioda and Victoria Webster are considered to be independent in terms of their respective directorships. Whilst, Martin Adams and Peter Rioda have a beneficial interest in the Company as detailed in the 'Directors' Interests' section of this report, this is not considered to impugn on their independence, and serves to further align the interests of the directors with those of shareholders.

In July 2020, Martin Adams was appointed as senior independent director to provide a sounding board for the chairman and serve as an intermediary for the other directors and shareholders. He is also responsible for leading the annual appraisal of the Chairman's performance.

The Board has adopted a policy on tenure which requires the Nomination Committee to annually consider the appropriateness of the tenure of the Chairman and each director alongside the skills, experience and knowledge the directors bring to the Board, as detailed in the Nomination Committee section of this report. In line with the guidance provided by the AIC Code, the Board recognises that whilst the Company should benefit from a regular infusion of new appointments to the Board (demonstrated by the 2020 appointments of Peter and Victoria), investment companies are more likely, compared to other companies, to benefit from having at least one director with considerably longer experience. This is the case with Robert Ware, the Chairman, who has served on the Board for more than nine years. The relevant criteria when assessing the board composition include continuity, self-examination and the ability to do the job.

One-third, or the nearest number to one-third, of the directors shall retire and offer themselves for re-appointment at each AGM in accordance with the Articles, facilitating the Board's stability and decision making ability. All directors are re-elected at the next AGM following their appointment and thereafter retire by rotation, subject also to the requirement that all directors are required to offer themselves for re-election at least every three years.

The Board meets on a quarterly basis to consider, among other things, the investment performance and associated matters, such as marketing and investor relations, risk and portfolio management, the suitability of the investment policy, performance of the share price as well as NAV performance and any discount between the share price and the NAV, the shareholder profile of the Company and the performance and cost of service providers, to ensure control is maintained over the Company's affairs. Regular ad hoc informal meetings are also held with the Manager principally to review the performance of the investments and material events affecting the Company.

The Directors bring both significant funds and professional expertise and commercial operating experience, having managed businesses across a wide range of industries and economic environments. The Board consists of a majority of independent non-executive Directors. The Chairman, in his role of leading the Board, managing Board meetings, and encouraging constructive challenge between Board members is central to setting the tone from the top. The Board meets frequently, both formally and informally, and across all means of communication, which fosters openness and honesty. This is mirrored in the relationships the Board has developed with the Company's service providers.

The Board meets frequently with the Manager throughout the year at each quarterly board meeting and at any ad-hoc Board or informal meetings held dependent on the investment activity of the funds through which the Company directly or indirectly invests. The Board provides constructive challenge as well as honest and frank feedback on significant portfolio activity, contributing independent viewpoints and scrutiny to the investment process. The Board also conveys shareholder feedback to the Manager ensuring the interests of shareholders as a whole are a primary consideration for all investment decisions. The Board-level governance arrangements and relationship with the Manager facilitate the sustainability of the Company's business model and investment strategy.

The Board evaluates its performance through completion of annual confidential questionnaires with the results reported to the Nomination Committee. The Board also considers the tenure and independence of each Director, at least annually, via discussions at the Nomination Committee meetings. 

Culture 

The Board is acutely aware that the Company's culture needs to clearly align with the Company's purpose, value, and strategy. The Company is small and, as at the date of these financial statements, consists of four Directors. The Company culture is therefore set by the Board and demonstrated through Board interaction and in turn the relationships the Board develops with service providers and, in particular, the Manager.

Remuneration plays a role in impacting company behaviour and culture. The Remuneration Committee has reviewed the Company's remuneration policy and Director remuneration and are satisfied that this is aligned with Company culture, ensuring that remuneration is at level to attract individuals of a calibre appropriate to the Company's future development, without compromising Director independence.

Shareholder and Stakeholder Engagement

The Chairman regularly meets with representatives of the Manager and is in regular communication with his fellow Directors. In addition, the Board maintains open and frequent communication with the Manager, Administrator and Broker throughout the year so that any ad hoc items for the Board's consideration are able to be considered in a timely manner by all members of the Board. The Chair of the Audit Committee has regular discussions with the auditor.

The Company welcomes the views of shareholders and places great importance on communication with its shareholders. The Chairman and the independent Directors are always available for communication with shareholders, with the Chairman and Senior Independent Director regularly meeting with the Company's larger shareholders and all shareholders have the opportunity, and are encouraged, to attend and vote at the AGMs of the Company, during which the Board and the Manager will be available to discuss issues affecting the Company. The Board is regularly informed of shareholders' views via updates from the Manager and Broker as to meetings and other communications they may have had with shareholders.

Shareholder Resolutions with Significant Votes Against

At the Extraordinary General Meeting held on 15 January 2021, four resolutions received over 20% of votes cast against them. These related to: i) the approval of the annual report and accounts; ii) the re-election of Peter Rioda as a Director; iii) the re-election of Victoria Webster as a Director, and iv) the purchase of the Company's own shares.

The independent directors have met, or offered to meet, all of the Company's significant shareholders to understand their views and consider any actions that need to be taken as a result of these voting results. From these meetings, the directors note that shareholder concerns were raised regarding the independence of the Board, tenure of Directors and that shareholders, considered in aggregate, had a preference for dividends to be paid rather than effecting the Ordinary Share Distribution Policy through the buyback of the Company's Ordinary Shares..

In 2020, the appointment of two new independent non-executive directors has resulted in a majority of the Board being independent; the rationale for the Board's independence assessment has been included in this annual report. In response to the feedback on the implementation of the Ordinary Share Distribution Policy, this has been amended so that the Company will pay dividends rather than effect the Ordinary Share Distribution Policy through the buyback of the Company's Ordinary Shares.

The Board will continue to engage with shareholders, particularly those who did not vote in favour of the resolutions and is committed to continuing a constructive and open dialogue with shareholders.

Key Service Providers

Pursuant to the management agreement, the Manager performs a periodic review of the service providers to the Company for consideration by the Board.

In 2020, as part a review of the Company's operating structure with the intention of improving operating efficiencies for the Company and the funds through which it invests, a number of changes were made:

· The administration services provided to the Company by Axio Capital Solutions Limited, in addition to those provided by Mitsubishi UFJ Alternative Fund Services (Ireland Limited) to the Master Fund, and Apex Fund and Corporate Services (Jersey) Limited to MVI II LP were unified under a single provider: Aztec Financial Services (Jersey) Limited. Established in 2001, the Aztec Group is an award-winning independent provider of fund and corporate services, employing more than 950 people across Jersey, Guernsey, Luxembourg, the Netherlands and the UK. Owner-managed, the Group administers over 440 funds and 4,500 entities for a range of clients, including private equity, real asset and debt fund managers, institutional investors and multi-national corporations. Aztec also have an experienced team which specialise in the establishment and administration of listed fund vehicles for alternative investment managers.

To identify a suitable administrator who could appropriately service the whole Marwyn fund group, a list of organisations with listed fund experience, strong accounting capabilities (to produce a weekly NAV), a responsive and flexible team, a commercial and entrepreneurial approach, a stable team and with relevant regulatory experience was drawn up with detailed proposals received from three such providers. Following a review of these proposals, interviews with key personnel and discussion and recommendations from industry contacts, Aztec were appointed.

· The audit services provided to the Company and the Master Fund by PricewaterhouseCoopers LLP, in addition to those provided by Ernst & Young LLP to MVI II LP were unified in a single provider: Baker Tilly Channel Islands Limited. Baker Tilly Channel Islands is the Channel Islands member firm of Baker Tilly International, a top 10 Global Accountancy Network with member firms in more than 148 territories and combined revenues of US$4.0 billion.

Proposals were received from three firms for the audit of the Marwyn Funds, including firms both within and outside the accounting 'Big 4'. Following a review of the proposals and costs and interviews with the Chair of the Audit Committee, Baker Tilly were appointed.

· In order to appropriately segregate the activities of the Company, new roles were created to act as dedicated resources for the Board and provide effective oversight of service providers to the Company. These roles are undertaken by individuals with significant knowledge of the Company, its structure and operations.

Attendance record:

The number held has been shown for each individual to reflect the number of meetings held over the year or since the date of their appointment or prior to the date of their resignation.

Board committees

The Company uses a number of committees to manage its operations. Each committee has formal written terms of reference, which clearly define their responsibilities and are reviewed and reassessed for their adequacy on an annual basis. The terms of reference are available on the Company's website.

Audit Committee

Effective 6 April 2021, the Audit Committee comprises all the independent non-executive Directors of the Company and meets at least twice a year. Prior to this date, Robert Ware was also a member of the committee. As Robert Ware is a chartered accountant and has significant investment company experience, the Board values his input and so he is ordinarily invited to attend committee meetings as an observer. Victoria Webster, a chartered accountant, is Chairman of the Audit Committee. The Audit Committee provides a forum through which the Company's auditor has access to and can report to the Board. Its functions relate to the Company only and do not apply to the Master Fund, MVI II LP or any other vehicle.

As part of an overall operational review, the Company's auditor was changed from PwC to Baker Tilly in 2020. As part of the tender process, Baker Tilly conducted standard independence assessments to ensure they could undertake the external audit function in accordance with audit standards on independence. The Audit Committee has no reason to consider the auditor to be non-independent and will continue to review the relationship and assess independence.

The Audit Committee performs the following functions:

· selection of the statutory auditor and making recommendations relating to the appointment of the statutory auditor to the Board;

· monitoring the financial reporting (including cash and securities reconciliations) process and submitting recommendations or proposals to the Board in order to ensure the integrity of that process;

· monitoring the statutory audit of the Company's annual financial statements and the performance of the Company's auditor, taking into account any findings and conclusions by the Financial Reporting Council under article 26 (6) of Regulation 538/2014 (the Audit Regulation);

· reviewing and monitoring auditor independence in accordance with paragraphs 2(3), 2(4), 3 to 8 and 10 to 12 of Schedule 1 to the Statutory Auditors and Third Country Auditors Regulations 2016 (SI 2016/649) and article 6 of the Audit Regulation, and in particular the appropriateness of the provision of non-audit services to the issuer in accordance with article 5 of the Audit Regulation;

· informing the Board of the outcome of the statutory audit and explaining how the statutory audit contributed to the integrity of the financial reporting process and what role the Audit Committee played in that process; and

· keeping under review the adequacy and effectiveness of the Company's internal financial controls and internal control and risk management systems.

During the year, the Audit Committee met four times, the key matters discussed included the review and consideration of:

· the Audit Committee's terms of reference;

· the composition of the Audit Committee including the change in Chair;

· the appointment of Baker Tilly as auditor;

· the Company's annual financial statements for the year ended 31 December 2019 and interim financial statements for the six-month period ended 30 June 2020, including review of the RNS announcements released in connection with these accounts;

· the independence of the auditor and the effectiveness of the audit;

· the Company's policy and procedures, including compliance arrangements in relation to anti-bribery and corruption and whistleblowing;

· the Company's cash flow and reconciliation to bank statements;

· the need for an internal audit function; and

· cash flow management and the payment control system.

The Audit Committee concluded that an internal audit department was not required as all of the Company's day-to-day management and administrative functions are outsourced to regulated third parties.

During the year, the Audit Committee's terms of reference were updated.

Nomination Committee

The Nomination Committee comprises all the Directors of the Company, resulting in a majority of the members of the committee being independent non-executive directors whilst retaining access to the knowledge and experience of Robert Ware, who chairs the committee. The committee meets at least twice a year. Members of the Nomination Committee do not participate in the review of their own position, and further, Robert Ware will not chair a meeting of the Nomination Committee when it is dealing with the matter of succession to the chairmanship of the Board.

The function of the Nomination Committee is to consider the appointment and re-appointment of directors. When considering the appointment and re-appointment of directors, the Nomination Committee and the Board consider whether the Board and its committees have a balance of skills, experience, length of service, knowledge of the Company, its diversity, how the Board works together and any other factors relevant to the effectiveness of the Board including if the director or candidate being reviewed has sufficient time to devote to the Company to carry out their duties effectively.

During the year, and in line with best practice, the Board appointed Korn Ferry, the international recruitment consultants, to identify suitable candidates to fill two independent non-executive director positions to enhance the independence of the Board and to identify a suitably qualified and experienced individual to chair the Company's Audit Committee. As a result, the Board and Korn Ferry compiled a list of 22 candidates from which it interviewed eight applicants over the period to July 2020. Following that process and considering skills, experience, knowledge, board diversification and succession planning, the Board selected Peter Rioda and Victoria Webster as the best candidates and both were appointed to the Board on 9 July 2020. Victoria was also appointed as chair of the Company's Audit Committee. Both were subsequently re-elected at the first AGM following their appointment. Korn Ferry have been utilised by the Company in the past, but have no other connection to the Company or its directors.

Formal induction training is provided to new directors on request. All new directors meet with the Chairman, the Senior Independent Director, members of the Nomination Committee, the Manager and any other relevant key advisers, prior to appointment in order to discuss the Company, the Manager, the responsibilities of a director of the Company and investment company industry matters.

Any new directors will meet with the full Board at the earliest opportunity following their appointment. In addition, all directors have full access to the Administrator, broker, Manager and legal counsel.

The Nomination Committee, on at least an annual basis, considers the performance of the Board, along with the tenure and independence of each director. Following the changes in Board membership, as detailed in the Report of the Chairman, the committee believes there is a suitable combination of experience, knowledge and skills to operate as an effective Board. The significant level of shareholder engagement from the Chairman, the Senior Independent Director and the two newly appointed Independent Directors has ensured shareholders views have been fully understood by the Board and appropriate actions have been taken, including working alongside the Manager to amend the implementation of the Company's Ordinary Share Distribution Policy and further detailed disclosure in these accounts around governance, strategy and director independence.

The committee acknowledges that the Chairman, Robert Ware, has been a Board member since 2006 and is not independent of the Manager but believe that the skills and experience he brings to the Board significantly outweigh any actual or potential conflicts arising from his position. Robert has served as an independent non-executive chairman of several listed investment funds (and thus understands and respects the role of the Company's independent directors); he has a long relationship with the Manager and their key personnel; he has intimate knowledge of the Company's corporate history and long experience of running operating businesses such as those held in the portfolio. These rare skills and experience in the context of the Company combine to provide Robert the ability to bridge the views and suggestions of the independent directors with those of the Manager.

In any situation where the Chairman is conflicted, or could be perceived to be conflicted, he abstains from comment and vote and, in any case, the independent directors form a majority of the Board. The independent directors are of the view that, given the structure of the Company and its management arrangements, the Chairman is important to ensuring the smooth operation of the business and it is in the best interests of the Company and its shareholders that Robert remain as a director and Chairman.

The Nomination Committee considers that the three other Board members are all independent of the Company and the Manager, as detailed in the 'Board Composition and Meetings' section earlier.

During the year the Nomination Committee met three times, the key matters discussed included the review and consideration of:

· the Nomination Committee's terms of reference;

· the structure, size and composition of the Board and its committees;

· the appointment of Martin Adams as the Senior Independent Director;

· the appointment of Victoria Webster and Peter Rioda as Independent Directors; and

· the recommendation that, in accordance with the Company's Articles, Victoria Webster and Peter Rioda should be put forward for election at the 2020 AGM.

During the year, the Nomination Committee's terms of reference were updated.

Remuneration Committee

Effective 6 April 2021, the Remuneration Committee comprises all the independent non-executive directors of the Company and meets at least twice a year. Prior to this date, Robert Ware was also a member of the committee and as with the Audit Committee, the Board values Robert Ware's input so he is ordinarily invited to attend committee meetings. Members of the Remuneration Committee do not participate in the review of their own remuneration.

The Company's remuneration policy is to set remuneration at a level to attract individuals of a calibre appropriate to the Company's future development. The maximum aggregate remuneration of all of the Directors is £200,000.

During the year the Remuneration Committee met three times to discuss the Remuneration Committee's terms of reference and duties, the remuneration of the independent directors appointed in the year, and the increase in level of remuneration for the existing directors.

As part of the review of the remuneration of existing directors, it was approved that the fees for Robert Ware and Martin Adams, be increased to £50,000 and £45,000 respectively, considering the roles they have as Chairman and Senior Independent Director respectively and to ensure the fees, following a benchmarking analysis performed across comparable entities listed on the Specialist Fund Segment, were brought in line with market standards for their roles and tenures.

Following review and consideration of the Company's remuneration policy, the Remuneration Committee concluded that the current remuneration policy of the Company is set at a level to attract, motivate and retain individuals of a calibre appropriate to the Company's future development and that the structure of the Company's remuneration remains appropriate for the size and the activities of the Company.

During the year, the Remuneration Committee's terms of reference were updated.

Management Engagement Committee

The Board considers that due to its size and structure as a feeder fund, it would be unnecessarily burdensome to establish a separate management engagement committee. The review of the performance of, and contractual arrangements with, the Manager is undertaken by the Board. However only Directors independent of the Manager are involved with this review.

Authority of the Manager

The authority of the Manager is set out in writing in the management agreement. Under the terms of the management agreement the key duties of the Manager are the negotiation of any investment, consolidation disposal of an investment, in accordance with the relevant investment policy. In performing these services, the Manager is granted authority to:

· give instructions to administrators and sub-administrators in relation to acquisitions and disposals of investments;

· cause money to be retained in cash or placed in deposit;

· negotiate contracts, agreements and other undertakings as may be reasonable;

· instruct and appoint any advisors and specialists which are believed necessary or advisable for the purposes of implementing the investment policy and/or managing the investments;

· use reasonable endeavours to obtain all licences, permissions and consents necessary to complete, maintain or dispose of any investment;

· prepare all necessary documentation and where necessary submit to the board for execution;

· borrow or raise monies as required;

· assist as necessary in the valuation of unlisted investments;

· advise on availability and appropriate source of funds to be utilised as distributions;

· carry out quarterly reviews of the investment portfolio, or at any other time as directed by the Company;

· prepare at least quarterly a report detailing the activities and performance of the Manager during the quarter; and

· monitor investment policy and propose changes to the Board.

Any areas of decision making not under the authority of the Manager remain the responsibility of the Board.

Statement of going concern

Under the relevant class agreements between the Company and the Master Fund, the Master Fund is required to meet the Company's expenses and as such, the directors consider that there is no mismatch between the Company's assets and liabilities.

The Board and the Manager are continually assessing the economic and wider implications of the COVID-19 pandemic, and whilst the long-term impact is uncertain, considering the forecast cash position of the Master Fund (including a reasonably possible forecast of portfolio company investment and divestment), the directors continue to believe that the Company, via the Master Fund, has sufficient resources to meet all liabilities as they fall due for the foreseeable future and continue to adopt a going concern basis in preparing the financial statements.

Internal control

The Board is responsible for establishing and maintaining the Company's system of internal quality control and risk management and reviewing its effectiveness. Internal control systems are designed to meet the particular needs of the Company and the particular risks to which it is exposed.

The procedures are designed to manage rather than eliminate risk and by their nature can only provide reasonable but not absolute assurance against material misstatement or loss. The key procedures which have been established to provide effective internal controls are as follows:

The duties of managing the investments and accounting are segregated:

· throughout the year, MUFG Alternative Fund Services (Ireland) Limited, a company independent of the Manager and the Board, provided administrative and accounting services to the Master Fund. These services are now provided by Aztec Financial Services (Jersey) Limited;

· custodian services are provided by an independent party to the Master Fund and are segregated from the administrative and accounting services provided;

· throughout the year, Axio provided administrative and accounting services to the Company and the provision of these services was independent from the investment management services provided by the Manager. These services are now provided by Aztec;

· the Board reviews financial information produced by the Manager and Axio/Aztec as appropriate on a regular basis;

· the Manager, Axio and Aztec are all regulated entities and are subject to an annual audit by an independent auditor. This is confirmed to the Board on an annual basis; and

· assets attributable to the realisation shares are segregated from those attributable to the ordinary shares.

The Company does not have an internal audit function as all of the Company's management functions are delegated to third parties and the Board therefore considers that there is no need for the Company to have an internal audit function.

The Audit Committee has reviewed the Company's risk management and control systems and believes that the controls are satisfactory given the nature and size of the Company.

Financial Risk Profile

The Company's financial instruments comprise investments, cash and various items such as payables and receivables that arise directly from the Company's operations. The main purpose of these instruments is the investment of shareholders' funds. The main risks are detailed in Note 14 to the financial statements and in the Risk section.

Directors' Responsibilities

The Directors are responsible for preparing the financial statements in accordance with applicable law and International Financial Reporting Standards as adopted by the European Union (IFRS).

The Directors are required to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period and to confirm that the reports contained in these financial statements includes a fair review of the performance of the business and the position of the Company.

In preparing these financial statements the directors are required to:

· select suitable accounting policies and apply them consistently;

· make judgements and estimates which are reasonable and prudent;

· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

· 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 Cayman law. 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.

Each of the Directors, whose names and functions are listed on page 31, confirms that, to the best of their knowledge:

· these financial statements, which have been prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and loss of the Company; and

· the reports contained in these financial statements includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MARWYN VALUE INVESTORS LIMITED

Opinion

We have audited the financial statements, included within the Annual Report and Financial Statements (the "Annual Report") of Marwyn Value Investors Limited (the "Company") for the year ended 31 December 2020 which comprise the Income Statement, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity, and the related notes including a summary of significant account policies. The financial reporting framework that has been applied in their preparation is applicable Law and International Financial Reporting Standards as adopted by the European Union ("IFRS").

In our opinion, the financial statements:

· give a true and fair view of the state of the Company's affairs as at 31 December 2020 and of its loss and cash flows for the year then ended; and

· have been properly prepared in accordance with IFRS.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements, including the FRC's Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other matter

The financial statements of the Company for the year ended 31 December 2019 were audited by the previous auditor, as listed on the Advisers page, who expressed an unmodified opinion on those financial statements on 30 April 2020.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified in our audit.

Significant risks and our response

(i) Investments

There is a risk that the investments are not held at an appropriate fair value, due to incorrect valuation methodology being applied to underlying investments or the inappropriate allocation of gains, losses and expenses within the underlying fund, or that the rights to ownership are not held. The value of the investment in the Master Fund is largely driven by the valuation of the investments held by the Master Fund, and therefore the risk extends to the appropriate valuation of the underlying investments of the Master Fund.

Our response

Our audit procedures with respect to investments included, but were not limited to:

· Recalculating the closing investment position from the audited financial statements of the Master Fund, to ensure the closing balance had been calculated appropriately;

· Reviewing and understanding the investments made prior to the start of the year to ensure historic treatment was accurate;

· Review of the financial information of the underlying investments of the Master fund held at cost and holding discussions with management to ensure there have been no events in the year that may suggest a new valuation methodology is required;

· For unlisted underlying investments of the Master Fund which have been the subject of a valuation, we obtained the valuation and relevant back up information and critically reviewed the methodology applied, with reference to valuation guidelines and required accounting disclosures. An auditor recalculation of the valuation was performed to assess whether management's assessment appeared reasonable;

· For listed investments of the underlying Master Fund we verified the share prices to reliable external sources, ensuring there was an adequate active market to support the valuation;

· Reconciling gains and losses to underlying calculations, and agreed any transactions to signed agreements and bank transactions; and

· Carrying out confirmation procedures to ensure the underlying investments were still held by the Master Fund.

We have no issues to note from our testing and the investments balance appears reasonable.

(ii) Revenue recognition

There is a risk that the revenue recognised could be misstated due to inappropriate valuation methodology or not recognising all valuation movements.

Our response

Our audit procedures with respect to investments included, but were not limited to:

· Obtaining a breakdown of revenue recognised during the year and performing a recalculation on the investments to ensure accurate year movement in fair value; and

· Testing gains / losses from valuation reports back to the revenue listing for both completeness and accuracy.

We have no issues to note from our testing and the fair value movement recognised appears reasonable.

Significant risks and our response (Cont'd)

(iii) Management override of controls

There is a risk of management override of controls to achieve certain predetermined outcomes in financial statements and execution of transactions.

Our response

Our audit procedures with respect to management override of controls included, but were not limited to:

· Review of all Board minutes;

· Journal entry testing including enquiry and agreeing to source documents for significant management journals, unusual journals, year end journals, and post year end journals; and

· Review of the general control environment, including walkthroughs of adequate controls which reduce the risk of management override of controls.

We have no issues to note from our testing.

(iv) Covid-19

The COVID-19 pandemic has caused significant economic uncertainty across the globe, leading to declines in global markets. This could impact the Company directly when considering the impact on the appropriateness of the Going Concern basis of accounting, or indirectly through a potential adverse impact upon the valuation of the underlying investments of the Master Fund, which could lead to losses for the Company.

Our response

The audit team recognise the uncertainty arising globally as a result of COVID-19. We performed the following to assess the Company's going concern status:

· Review the balance sheet position, cash flow assessments and investment performance forecasts for a period at least 12 months from the date of signing the financial statements;

· Critically assessed the reasonableness of these forecasts, performing sensitivity analysis to ascertain headroom based on a number of different potential market scenarios, so as to assess whether the Going Concern basis was appropriate for the Company; and

· Understand the impact of Covid-19 on the underlying investments of the Master Fund, in particular identifying any adverse and lasting impacts which may result in a permanent loss of value.

Overall, the investments of the Master Fund appear to have rebounded well following the initial global impact of Covid-19, and the audit team consider the Going Concern basis of accounting to be an appropriate and reasonable basis on which to prepare the financial statements.

Our application of materiality

In accounting terms, a material error is one that, if it were unadjusted, would cause a user of the financial statements to alter their view of those statements or the results or the financial position of the entity being reported on. Materiality, therefore is incapable of monetary definition, since it has both quantitative and qualitative elements. Auditors examine accounts on a test basis. The level of testing we have carried out is based on our assessment of the risk that an item in the financial statements may be materially misstated.

We assess risk both at the overall financial statement level and at the individual item level. The nature and volume of audit work we have conducted is directly related to our risk assessments. We plan the audit to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements does not exceed materiality for the financial statements as a whole.

In making our assessment and being cognisant of the challenges of defining materiality, we considered a threshold of £976,000 to be an indicator of materiality for the financial statements as a whole. This threshold was based on 1% of net assets. Assets are considered to be the most important benchmark for the primary users of the financial statements. We have reported, to the Audit Committee, all corrected and uncorrected misstatements we identified through our audit with a value in excess of £49,000, in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

An overview of the scope of our audit

Our audit approach is risk based and focuses on identification of key business risks and those areas of operation that are considered significant to the results for the year and the position at the statement of financial position date. It focuses on the robustness and effectiveness of the Company's internal control environment established by management to ensure sound operational and financial control and the mitigation of risk.

The audit approach is a balance between systems and controls reliance, analytical review and detailed substantive testing (including obtaining independent third party confirmations) and is determined by assessment of the internal control environment and factors influencing inherent risk.

During our preliminary and planning phases of our audit, we gained an understanding of the business environment, including internal controls at the administrator and manager, along with the Board of Directors and respective Committees (referred to for purposes of this document as "management") where these are relevant to the audit. This ensured a robust and efficient audit at the execution stage. Where possible, we seek to validate and subsequently place reliance on the controls that are in place, in order to increase the efficiency of our audit work. Our audit comfort comes from evaluating and validating how management monitor and control the business and financial risks.

Based on our understanding of the business mentioned above, we undertook substantive testing on significant balances, transactions and disclosures in line with our risk assessment including the results of the work performed at the planning phase.

Other information

The other information comprises the information included in the annual report, other than the audited financial statements and our auditor's report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Directors

As explained more fully in the statement of Directors' responsibilities on page 46, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• We performed analytical procedures on significant and material balances, notably being financial assets and equity, corroborating the information therein with underlying agreements;

• We undertook journal testing including analysis and substantive testing to assess whether there were unusual entries that indicated irregularities, including fraud; and

• We confirmed bank balances to third party confirmations and reviewed the controls associated with the bank reconciliations and processing of payments.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Councils website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of this report

This report is made solely to the Members of the Company, as a body, as required by the Company's governing documents agreement dated 19 November 2013 in accordance with our engagement letter and for no other purpose. Our audit work has been undertaken so that we might state to the Members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Members, as a body, for our audit work, for this report, or for the opinions we have formed.

For the year ended 31 December 2020

Notes 1 to 19 on pages 58 to 74 form an integral part of these financial statements.

As at 31 December 2020

The financial statements on pages 54 to 74 were approved by the Board of Directors and authorised for issue on 29 June 2021. They were signed on its behalf by:

Notes 1 to 19 on pages 58 to 74 form an integral part of these financial statements.

For the year ended 31 December 2020

Notes 1 to 19 on pages 58 to 74 form an integral part of these financial statements.

For the year ended 31 December 2020

For the year ended 31 December 2019

Notes 1 to 19 on pages 58 to 74 form an integral part of these financial statements.

1. General information

The Company is a closed-ended investment fund registered by way of continuation in the Cayman Islands (registered number MC-228005) and is traded on the Specialist Fund Segment of the London Stock Exchange. The rights of the shareholders are governed by Cayman law and may differ from the rights and duties owed to shareholders in a company incorporated in England and Wales. The address of its registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

The Company is a feeder fund which has invested all of its available capital into limited partnership interests in the Master Fund. The Company has no redemption rights for its investment in the Master Fund.

The Master Fund has invested in a second master fund, MVI II LP, a private equity fund structure through which the majority of the Master Fund's investments attributable to ordinary shareholders are made. Assets attributable to the realisation shareholders are held directly by the Master Fund.

2. New standards and amendments to IFRS

The following standards and amendments to existing standards, which are effective for annual periods beginning on or after 1 January 2020 have had no impact on the Company's financial position or results:

2.1 New standards, amendments and interpretations not yet effective

The following standards and amendments are effective for annual periods beginning on or after 1 January 2020 and have not been early adopted in preparing these financial statements. The Company has considered the impact of these and concluded that none of these are expected to have a significant effect on the financial position or results of the Company.

3. Summary of significant accounting policies

The principal accounting policies, which have been consistently applied in the preparation of these financial statements, are set out below.

3.1 Basis of preparation and going concern

The financial statements have been prepared under the historical cost convention on a going concern basis, as modified by the revaluation of financial assets measured at fair value through profit or loss.

Under the relevant class agreements between the Company and the Master Fund, the Master Fund is required to meet the Company's expenses and as such, the directors consider that there is no mismatch between the Company's assets and liabilities.

The Board and the Manager are continually assessing the economic and wider implications of the COVID-19 pandemic, and whilst the long-term impact is uncertain, considering the significant cash balance held by the Master Fund, the directors believe that the Company, via the Master Fund, has sufficient resources to meet all liabilities as they fall due for the foreseeable future and continue to adopt a going concern basis in preparing the financial statements.

3.2 Statement of compliance

The financial statements of the Company have been prepared in accordance with IFRS together with the applicable legal and regulatory requirements of Cayman law.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and judgements. It also requires the Board of Directors to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.

The SORP issued in October 2019 by the AIC seeks to best reflect the activities of an investment company. Where the SORP contains recommendations applicable to the Company and involving material balances, its recommendations have been incorporated in these financial statements.

3.3 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). In arriving at the functional currency the directors have considered the currency in which the original capital was raised, any distributions that may be made and ultimately the currency that the capital would be returned in on a break up basis.

The directors have also considered the currency to which the underlying investments are exposed. The directors are of the opinion that Sterling best represents the functional currency and therefore the financial statements are presented in Sterling.

(b) Transactions and balances

Foreign currency transactions are translated into Sterling using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated using the exchange rate prevailing at the Statement of Financial Position date. Foreign exchange gains and losses arising from translation are included in the Statement of Comprehensive Income.

Non-monetary assets and liabilities that are measured at historic cost in a foreign currency are not retranslated.

3.4 Financial assets measured at fair value through profit or loss

(a) Classification

The Company's investment in the Master Fund was designated by the Board at fair value through profit or loss at inception as it is not held for trading but is managed, and its performance evaluated, on a fair value basis, in accordance with the Company's documented investment strategy.

The Company's business model was re-assessed on adoption of IFRS 9 - Financial Instruments - on 1 January 2018. As the investment in the Master Fund is not held for trading and the Company did not irrevocably elect, at transition, to classify the investment as a financial asset measured at fair value through other comprehensive income, the investment continues to be held as a financial asset measured at fair value through profit or loss under IFRS 9.

Changes in the fair value of investments measured at fair value through profit or loss are recognised in the Capital column of the Statement of Comprehensive Income. On disposal, realised gains and losses are also recognised in the Capital column of the Statement of Comprehensive Income and are transferred from the capital reserve to the revenue reserve in the Statement of Changes in Net Assets.

(b) Recognition, derecognition and measurement

The Company recognises unquoted investments measured at fair value through profit or loss on the date it commits to purchase the instrument. Derecognition of an investment occurs when the rights to receive cash flows from the investment expires or is transferred and substantially all of the risks and rewards of ownership have been transferred.

The amount that may be realised from the disposal of an investment in the Master Fund may differ from the values reflected in the financial statements.

Fair value estimation

The Master Fund is unquoted and accordingly the fair value of the investment is determined based primarily on the NAV information provided by the administrator of the Master Fund. The NAV of the Master Fund is determined by the administrator of the Master Fund by deducting the fair value of the liabilities of the Master Fund from the fair value of the Master Fund's assets.

3.5 Financial liabilities

The Company recognises a financial liability on assuming a financial obligation and derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or they expire. Borrowings are initially measured at fair value net of transaction costs and subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis in the Statement of Comprehensive Income. Financial liabilities include loans payable, accruals and dividends payable.

3.6 Cash and cash equivalents

Cash and cash equivalents comprise bank balances held by the Company including short-term bank deposits with an original maturity of three months or less. The carrying value of these assets approximates to their fair value.

3.7 Finance income

Interest income on cash deposits is accounted for on an accruals basis.

3.8 Expenditure

Pursuant to the "Amended and restated agreement relating to Class F, Class G and Class R interests in MVI LP", the Master Fund is legally obliged to settle all expenses specifically attributable to the Company. The Manager does not receive a management fee or incentive allocation from the Company in respect of funds invested by the Company in the Master Fund. A summary of costs ultimately incurred by both the ordinary shareholders and realisation shareholders is included in the 'Key Information Documents', located in the 'Documents' section of the Company's website, www.marwynvalue.com.

3.9 Costs directly attributable to the issue of equity

Share issue costs are placing expenses directly relating to the issue of the Company's shares. These expenses include fees payable under share placement agreements, printing, advertising and distribution costs and legal fees and any other applicable expenses. All such costs are charged to equity and deducted from the proceeds received.

3.10 Investment in unconsolidated structured entities

IFRS 12 Disclosures of Interest in Other Entities defines a structured entity as an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to the administrative tasks only and the relevant activities are directed by means of contractual agreements.

The Company has concluded that the Master Fund, in which it invests, but that it does not consolidate, meets the definition of a structured entity because: 

• the voting rights in the Master Fund are not dominant rights in deciding who controls them as they relate to administrative tasks only; 

• the Master Fund's activities are restricted by its stated investment policy, as disclosed in the Company's prospectus; and 

• the Master Fund has a narrow and well-defined objective to provide investment opportunities to investors.

3.11 Segment reporting

The Company is organised and operates as one segment by allocating its assets to its investment in the Master Fund which is not actively trade

4. Critical accounting estimates and judgements

The Company makes estimates, judgements and assumptions that affect the reported amounts of assets and liabilities. Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The fair value of the investment held in the Master Fund is determined by the directors on the basis of the NAV of the Master Fund as determined by the Administrator at the year-end date. In turn, the NAV of the Master Fund is primarily determined by the fair value of its underlying investments which, as described in Note 6, comprise fair value hierarchy level 1, level 2 and level 3 investments. Due to their unobservable nature, level 3 investments are inherently subject to a higher degree of judgement and uncertainty. The fair value of the investment held by the Master Fund in MVI II LP (also being a fund), is determined by the MVI II LP administrator and is also primarily based on the fair value of its underlying investments, which comprise level 1, level 2 and level 3 fair value hierarchy equities. Please refer to Note 6 for further details of the valuation methodologies applied.

5. Taxation

The Company is exempt from all forms of taxation in the Cayman Islands, including income and capital gains. However, dividend income and certain other interest from other countries are subject to withholding taxes at various rates. The Company recognises interest and penalties, if any, related to unrecognised tax benefits as income tax expense in the Statement of Comprehensive Income. During the years ended 31 December 2020 and 31 December 2019, the Master Fund did not incur any interest or penalties. The Company identifies its main tax jurisdiction as the Cayman Islands where the Company makes significant investments (in the Master Fund). The Board has considered the Company's tax positions, and has concluded that no liability for unrecognised tax liabilities should be recorded related to uncertain tax positions for open tax years and the positions to be taken for tax year ended 31 December 2020.

The Directors intend to manage the affairs of the Company in such a way that it is not resident in the United Kingdom for United Kingdom tax purposes. In these circumstances, the Company will not be subject to United Kingdom tax on its profits and gains (other than withholding tax on any interest or certain other income which has a United Kingdom source).

The Company recognises the tax benefits of uncertain tax positions only where the position is 'more likely than not' to be sustained assuming examination by tax authorities. As at 31 December 2020, there are no such tax benefits recognised (31 December 2019: none).

6. Financial assets measured at fair value through profit or loss

As at 31 December 2020, 100% (2019: 100%) of the financial assets measured at fair value through profit or loss relate to the Company's investment in the Master Fund. The fair value of the investment in the Master Fund is based on the latest available NAV reported by the administrator of the Master Fund. The limited partnership interests in the Master Fund are not publicly traded.

As a result, the carrying value of the Master Fund may not be indicative of the value ultimately realised on redemption. In addition, the Company may be materially affected by the actions of other investors who have invested in the Portfolio Companies in which the Master Fund has directly or indirectly invested.

Net Asset Value - investment movements

The net gain or loss recognised on financial assets measured at fair value through profit or loss reported in the Statement of Comprehensive Income consists of the movement in the unrealised gain or loss and the net realised gains or losses on redemptions. Realised gains or losses are subsequently transferred from the capital reserve to the revenue reserve.

Following the redesignation of Class G interests as Class F interests on 27 May 2020, the Company now holds 100% of the Class F interests which represents 91.00% (31 December 2019, on an equivalent basis: 90.91%) of the NAV of the Master Fund.

The Company holds 100% (2019: 100%) of the Class R(F)1 interests which represent 5.08% (2019: 5.30%) of the NAV of the Master Fund and 100% (2019: 100%) of the Class R(G)1 interests which represent 1.42% (2019: 1.48%) of the Master Fund.

During the period, Class F interests worth £19,111,102 (cost: £12,842,713) were redeemed as part of the accelerated bookbuild as described in Note 7, and Class F and Class G interests worth £5,374,605 (cost: £7,439,271) were cancelled through the Company's Share Buyback Programme as described in Note 10. The Class F incentive allocation acquired by the Company as part of accelerated bookbuild with a value of £19,111,102 was contributed in specie to the Master Fund.

As the Company has no legal, operating or management control over the activities of the Master Fund or MVI II LP and has no voting power in either of their affairs, neither the Master Fund nor MVI II LP are considered to be subsidiaries.

Fair value hierarchy

The Company classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

- quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)

- inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2)

- inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3)

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined by the lowest level input that is significant to the fair value instrument. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes 'observable' requires significant judgement. Observable data is considered to be market data that is readily available, regularly distributed or updated, reliable, not proprietary and provided by independent sources that are actively involved in the market.

Taking into account the valuation methodology applied to the investments in the Master Fund and in MVI II LP (which is held by the Master Fund at NAV), the Company's valuation of investments is classified as level 3 (2019: level 3). The Portfolio Company investments are categorised as level 1 fair value measurement if they are quoted in active markets (Zegona) or as level 3 if they are unquoted investments (Le Chameau).

For investments which are quoted, but where trading in the stock does not constitute an 'active market,' under IFRS alternative valuation techniques are applied. MAC plc is valued by reference to the observable equity raise in December 2019 and the entity's net asset value, as reported publicly, and therefore is classified as level 2 whilst ADVT, MAC II and MAC III are valued by reference to unobservable inputs, and are therefore classified as level 3. The level 2 and level 3 categorised investments are valued in accordance with IPEV Guidelines.

The following table presents the movement in the Company's investments classified as Level 3 instruments:

The following table summarises the valuation methodology used for the Company's investments characterised as Level 3:

7. Accelerated bookbuild

On 27 May 2020, the Company announced the completion of an accelerated bookbuild whereby Liberum, the Company's broker, on behalf of MLTI, invited eligible shareholders to tender the Company's ordinary shares for purchase by MLTI on the terms and subject to the conditions set out in the Company's announcement on 22 May 2020.

The purpose of the accelerated bookbuild was to:

- return capital to eligible shareholders seeking to realise, in whole or in part, their investment in the Company;

- enhance the alignment of interests between Marwyn and ordinary shareholders by increasing the Marwyn principals' beneficial shareholdings of ordinary shares in the Company;

- narrow the discount to the prevailing NAV per ordinary share at which the ordinary shares are trading in the secondary market;

- reduce, in part, the perceived excess supply of ordinary shares; and

- reset Marwyn's future carried interest entitlement, including introducing a new 7.5% preferred return which is discussed in more detail below.

The accelerated bookbuild was funded through the sale of the accrued incentive allocations in respect of Class F and Class G interests in the Master Fund (the Ordinary Share Carried Interest Entitlement) to the Company. This had the effect of crystallising the Ordinary Share Carried Interest Entitlement as at the close of business on 21 May 2020 and accelerated its payment (to the extent amounts were then payable).

The consideration paid by the Company for the acquisition of these incentive allocations was £19,111,102, being the value of the accrued but unpaid Ordinary Share Carried Interest Entitlement as at 21 May 2020. Of the Ordinary Share Carried Interest Entitlement, £6,027,458 was already beneficially owned by the Master Fund through its ownership of Marwyn RP Limited (the entity which was set up to acquire the incentive allocation owed to former partners and employees of Marwyn). Consequently, of the total consideration, a net amount of £13,083,644, was paid. This amount, net of tax and other costs, was used to satisfy the accelerated bookbuild with the amount remaining of approximately £1.6 million being used alongside the quarterly distribution amount for ongoing buy backs under the Company's Ordinary Share Distribution Policy. Marwyn RP Limited was liquidated in 2020.

Redemption and issue of interests in the Master Fund

The consideration for the purchase of the Ordinary Share Carried Interest Entitlement by the Company was funded by a partial redemption of interests in the Master Fund held by the Company in an amount equal to the consideration paid.

Following completion of the sale and purchase of the Ordinary Share Carried Interest Entitlement, the Company contributed the Ordinary Share Carried Interest Entitlement to the Master Fund in consideration for the issue of interests in the Master Fund in an amount equal to the consideration paid. Subsequent to this contribution, the Master Fund owned the Ordinary Share Carried Interest Entitlement and therefore the liability of the Master Fund in respect of the Ordinary Share Carried Interest Entitlement was extinguished.

Alongside this, the Class F interests and Class G interests were merged to simplify the interests into which the Company remains invested in. As a result, the Company's ordinary shareholders are now invested solely in Class F interests in the Master Fund and the Company's realisation shareholders are now invested in Class R(F)1 and R(G)1 interests in the Master Fund.

Future carried interest entitlement

As discussed above, as part of the accelerated bookbuild, the future carried interest entitlement which would otherwise have accrued after 21 May 2020 (the Future Carried Interest Entitlement) was reset with a reference amount of £90,289,249, being the Company's estimated ordinary share NAV as at close of business on 21 May 2020. After returns have been made to ordinary shareholders totalling the reference amount, returns will be divided 80/20 between ordinary shareholders and carried interest partners, subject to ordinary shareholders receiving a preferred return of 7.5%. This better aligns the interests of shareholders with Marwyn as following this reset, carried interest will now only be paid when shareholders have received the new reference amount and preferred return, incentivising the Manager over the existing assets (both the portfolio companies and the use of the available cash) to deliver returns to shareholders. Full details of the Future Carried Interest Entitlement are included in the Company's announcement on 22 May 2020.

8. Loan payable

The Master Fund has made a loan to the Company of £125,000 (2019: £125,000) for which the Company pays interest received on the corresponding cash amount held. The loan will be repaid by set-off on the date that the Company's interests in the Master Fund are redeemed. As a cash balance is held to the value of the loan payable and all interest earned on the cash balance is added to accruals, the effect of discounting is not material to the cash flows or balance sheet position.

9. Cash and cash equivalents

For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise balances with original maturity of less than 3 months, which total £128,614 as at 31 December 2020 (2019: £128,372).

10. Distributions

Distributions in 2020:

Ordinary shares

The Company commenced its Buyback Programme in October 2018 as a mechanism to satisfy the Minimum Annual Distribution of the Company's Ordinary Share Distribution Policy. Liberum Capital Limited, in its capacity as corporate broker to the Company, manages the programme and is authorised to effect on-market purchases of ordinary shares on behalf of the Master Fund. Under the Buyback Programme, during 2020, the Master Fund purchased 5,052,845 ordinary shares in the Company for a total of £5,374,604. These ordinary shares have all been converted into exchange shares under the Company's Exchange Procedure (as defined and described in the Company's prospectus dated 19 October 2016) and the corresponding limited partnership interests cancelled. The Company's exchange shares remain held by the exchange administrator.

Realisation shares

In October 2020, the Company announced that funds attributable to realisation shareholders received from the initial distribution from the liquidation of Safe Harbour Holdings plc, along with cash held by the Master Fund attributable to realisation shareholders not required to be held for reasonable working capital purposes, would be returned to realisation shareholders by way of a redemption of realisation shares.

Following a redemption of the Company's interests in Class R(F) and Class R(G) of the Master Fund to the value of £0.84 million, the distribution to realisation shareholders was effected by way of a redemption of 503,171 realisation shares which were subsequently cancelled. As required by IAS 32 - Financials Instruments: Presentation, this has been recognised in equity.

As the Class R(F) reference amount, preferred return and preferred return catch-up (as described in Note 15(a)) have been fully returned, an incentive allocation payment in respect of Class R(F) of £163,888 was paid alongside the redemption of the realisation shares.

Distributions in 2019:

Ordinary shares

In January 2019, the Master Fund, under instruction from the Manager made a partial offer to institutional shareholders for ordinary shares in the Company, conducted by way of a reverse bookbuild process, whereby shareholders were able to offer to sell some or all of their shareholding to the Master Fund; at the end of the offer period, the lowest clearing price submitted, allowing at least £5 million of shares to be purchased, was selected. Full details are set out in the RNS announcement made by the Manager on 3 January 2019 (available on the Company's website 'RNS' page). Pursuant to this offer, the Master Fund acquired 4,030,625 ordinary shares at a price of 130p per share for a total consideration of £5.2 million. Following approval by shareholders at the Company's September 2019 AGM, these shares were converted to exchange shares and the corresponding Master Fund limited partnership interests cancelled.

Under the Buyback Programme, during 2019, the Master Fund purchased 4,651,046 ordinary shares in the Company for a total of £5,843,262. These ordinary shares have all been converted into exchange shares under the Company's Exchange Procedure and the corresponding limited partnership interests cancelled.

Realisation shares

In November 2019, the Company announced that funds attributable to realisation shareholders received from the exit of the investment in BCA and the final distribution from the liquidation of Gloo, would be returned to realisation shareholders by way of a redemption of realisation shares.

Following a redemption of the Company's interests in Class R(F) and Class R(G) of the Master Fund to the value of £4.1 million, the distribution to realisation shareholders was effected by way of a redemption of 2,533,505 realisation shares which were subsequently cancelled. As required by IAS 32 - Financials Instruments: Presentation, this has been recognised in equity.

11. Reconciliation of net (loss)/profit for the year to net cash inflow from operating activities

12. Share Capital

As at 31 December 2020 and 31 December 2019 the authorised share capital was as follows:

The ordinary share capital of the Company of a par value of 0.0001p may be issued or redesignated in classes, and includes realisation shares.

Shares in issue

Share premium

*Includes both ordinary and realisation shares, which constitute a single class of share for the purpose of the Company's Articles and Cayman law.

The weighted average number of shares in issue for the year ended 31 December:

(a) Voting rights

(i) Ordinary shares (including realisation shares) carry the right to receive notice of and attend and vote at any general meeting of the Company in accordance with the Articles.

(ii) Exchange shares carry the rights to receive notice of and to attend any general meeting of the Company but not vote unless there are no ordinary shares in issue in which case Exchange shares will have the voting rights set out in (i) above as if exchange shares were ordinary shares.

(b) Dividends and distributions

(i) Subject to the Companies Law, the Directors may declare dividends (including interim distributions) and distributions on shares in issue and authorise payment of the dividends or distributions out of the funds of the Company lawfully available. No dividend or distribution will be paid except out of the realised or unrealised profits of the Company, or as otherwise permitted by the Companies Law. There are no fixed dates on which the entitlement to dividends arises. All dividend payments will be non-cumulative.

(ii) Distributions on each class of ordinary shares may only be paid from proceeds received from the corresponding class of interests in the Master Fund.

(iii) Exchange shares will not confer any rights to dividends or other distributions.

(iv) At the 2015 EGM a new Ordinary Share Distribution Policy was adopted which resulted in:

· a progressive return, payable quarterly in the form of a dividend in January, April, July and October each year that will be maintained or grown on a pence per ordinary share basis.

· in addition to the return detailed above, where the Master Fund or MVI II LP disposes of an asset for a Net Capital Gain and has not already returned an aggregate amount in excess of 50% of that gain and any previous such gains pursuant to the distribution policy, the Company will make an additional capital return of the difference to ordinary shareholders by way of tender offers, share repurchases or other returns of capital and distributions; and

· the opportunity to augment the distribution policy by returning cash in excess of the amounts referred to in (i) and (ii) above being kept under review and to be undertaken through periodic tender offers, share repurchases or other returns of capital and distributions.

(v) At an ordinary class meeting held on 5 September 2018, the Ordinary Share Distribution Policy was further amended, permitting the 'Minimum Annual Distribution' to be made by the repurchase of ordinary shares. Under the amended policy, returns to ordinary shareholders may be made by repurchase of shares, dividend payments, or a combination of both.

Throughout 2020 and 2019, the Minimum Annual Distribution was satisfied through share repurchases, as described in Note 10. In January 2021, the Company announced that following feedback from the Company's significant shareholders on the implementation of this policy, the Board has determined that from the start of 2021, the most suitable method to satisfy the minimum distribution is through the payment of dividends. Interim dividend of 2021 of 2.265p per ordinary share were paid in February and May 2021.

The Ordinary Share Distribution Policy (described in sections (iv) and (v) above) does not apply to the realisation shares

(c) Realisation opportunities

On 19 October 2016, the Company offered its shareholders the opportunity to redesignate some or all of their ordinary shares of 0.0001p each in the capital of the Company as realisation shares of the same par value. The realisation shares rank equally and otherwise carry the same rights as the ordinary shares, save that (i) the investment policy differs to that of the ordinary shares, the realisation pool is only permitted to invest cash in follow-on investments in the Portfolio Companies within three years of creation of the realisation pool and cash generated on the sale of an investment in the realisation pool may not be re-invested, (ii) the distribution policy for the ordinary shares will not apply and (iii) the realisation shares entitle their holders to returns only in respect of realisations made on investments attributable to the realisation pool.

Realisation opportunities will be offered every five years, with the next scheduled for November 2021.

(d) Rights as to capital

There are no exit penalties for those ordinary shareholders electing to re-designate all or some of their investment into realisation shares or on a return of capital attributable to the realisation shares. Equivalent realisation share offers will be made to ordinary shareholders again in November 2021 and thereafter at five-yearly intervals. Whilst the realisation shares currently in issue are listed on the Specialist Fund Segment, listing of realisation shares from future offers will be subject to the receipt of all required consents and approvals, including the approval of the FCA of a prospectus in relation to their admission to trading.

The surplus capital and assets of the Company will, on a winding-up or on a return of capital (otherwise than on a purchase by the Company of any of its shares) be paid to the holders of ordinary shares and realisation shares pro rata to their holding of such shares out of the proceeds of the corresponding class of interests in the Master Fund.

13. Reserves

Special distributable reserve

A special distributable reserve was created when the Company cancelled all of its share premium account in existence as at 26 January 2007, transferring it to a distributable reserve to allow, among other things, the buy-back and cancellation of the ordinary shares subject to shareholder approval at a subsequent AGM.

Exchange reserve