The Income
& Growth VCT plc
A Venture Capital Trust
Annual Report & Financial Statements
for the year ended 30 September 2022
The Income & Growth VCT plc (“the Company”) is a Venture Capital Trust (“VCT”) listed on the
London Stock Exchange. Its investment portfolio is advised by Gresham House Asset
Management Limited (“Gresham House”, ”Investment Adviser”).
Contents
Financial Highlights and Performance Summary 1
Chair’s Statement 2
Strategic Report 5
- Company objective and business model 5
- Summary of VCT regulation 5
- Performance 7
- Investment Adviser’s Review 11
- Principal Investments in the Portfolio 18
- Investment Portfolio Summary 22
- Investment Policy 28
- Other Key Policies 28
- Stakeholder Engagement and Directors’ Duties 29
- Principal Risks 31
- Going concern and Viability Statement 33
Reports of the Directors 34
Board of Directors 34
Directors’ Report 35
Corporate Governance Statement 39
Report of the Audit Committee 41
Directors’ Remuneration Report 43
Statement of the Directors’ Responsibilities 46
Independent Auditor’s Report 47
Financial Statements 52
Information for Shareholders 77
Shareholder Information 77
Timeline of the Company 78
Performance Data at 30 September 2022 80
Glossary of Terms 83
Notice of the Annual General Meeting 84
Corporate Information 87
YOUR PRIVACY
We are committed to protecting and respecting your privacy. To understand how we collect, use and otherwise
process personal data relating to you, or that you provide to us, please read our privacy notice, which can be found at
www.incomeandgrowthvct.co.uk
As at 30 September 2022:
Net assets: £108.42 million
Net asset value per share: 83.73 pence
➤ There was a negative Net asset value (“NAV”) total return (including
dividends)
1
per share of (8.7)%.
➤ Share price total return
1
per share was (3.8)%
2
(as per London Stock
Exchange mid-price on balance sheet date of 30 September 2022).
➤ Dividends paid/payable in respect of the year total 8.00 pence per share.
This brings cumulative dividends paid
1
to Shareholders in respect of the
past five years to 43.00 pence per share.
➤ The Company realised investments totalling £11.56 million of cash proceeds
and generated net realised gains in the year of £2.32 million.
➤ Net unrealised losses of £(13.16) million in the year.
➤ £7.33 million was invested into four new companies and eight follow-on
investments.
1
- Definitions of key terms and alternative performance measures shown above and throughout this report are provided in the
Glossary of terms on page 83.
2
- Further details on the share price total return are shown in the Performance section of the Strategic Report on page 7.
The table below shows the recent past performance of the Company’s existing class of shares for each of the last five years.
Reporting date
As at
30 September
Net
assets
NAV
per
share
Share
price
1
Cumulative
dividends
paid per
share
Cumulative total return
per share to
Shareholders
2
Dividends
paid and
proposed
per share in
respect of
each year
(NAV
basis)
(Share
price
basis)
(£m) (p) (p) (p) (p) (p) (p)
2022 108.42 83.73 81.50 144.50 228.23 226.00 8.00
3
2021 119.09 100.45 93.00 136.50 236.95 229.50 9.00
2020 83.13 70.06 59.50 131.50 201.56 191.00 14.00
2019 81.73 79.12 75.50 113.00 192.12 188.50 6.00
2018 82.58 78.32 69.50 108.00 186.32 177.50 6.00
1
Source: Panmure Gordon & Co (mid-market price).
2
Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (share price basis) plus
cumulative dividends paid since launch of the current share class. The details of the share price total return per share calculation are
shown in the Strategic Report on page 7.
3
Dividends paid and proposed per share in respect of 2022 include the second interim dividend referred to below.
Dividends payable after the 30 September 2022 year-end
A second interim dividend of 4.00 pence per share was paid on 7 November 2022, to Shareholders on the Register on
23September 2022.
Detailed performance data for each of the Mobeus VCT’s fundraisings is provided in the Performance Data Appendix on
pages 80 to 82. The tables, which give cumulative total return per share information for each allotment date on both a NAV
and share price basis, are also available on the Company’s website at www.incomeandgrowthvct.co.uk where they can be
downloaded by clicking on “table” under “Reviewing the performance of your investment”.
For the financial year ended 30 September 2022
Performance Summary
1
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Highlights
Financial Highlights and
Performance Summary
22
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Overview
This Company’s financial year has been
notable for the significant geopolitical
economic and political disruption both
domestically and internationally. The
end of the 2021 calendar year; was a
high watermark in many technology and
growth markets, and since then we have
experienced a number of significant
global events such as the illegal Russian
invasion of Ukraine, the return of
inflation to 40-year highs and political
turmoil in the UK and across Europe. All
of this has led to increased volatility
across global markets and a material
downward re-rating of growth stocks.
Despite the events set out above and
the widely reported cost of living
increases, the fundraise, launched for
applications on 17 October 2022
secured the full £22million sought
(including £8 million over-allotment). This
was a strong demonstration of
confidence in the Company by investors.
One positive and as yet, we believe, still
planned outcome from the so-called
‘mini-budget’ of the previous Chancellor
of the Exchequer in September, was the
commitment from the UK Government to
extend the VCT ‘sunset clause’ beyond
the end date of 5 April 2025, however it
should be noted that no further detail
has been provided at this stage and is
also likely to require parliamentary
approval. This clause was due to expire
in 2025 and would have meant that
investor income tax relief would have no
longer been available on new VCT
subscriptions.
Performance
The Company’s NAV total fell by (8.7)%
for the year ended 30 September 2022
(versus a gain of + 50.5% in 2020/21).
The negative NAV total return for the year
was principally comprised of unrealised
falls in the value of investments still held,
tempered somewhat by the successful
exits from Media Business Insight (“MBI”)
and Vian Marketing Limited (trading as
Red Paddle).
The reduction in the valuation of the
portfolio has been driven primarily by
lower benchmark market comparables
and to a lesser extent by falls in trading
performance of investee companies.
This is because markets are already
factoring in the impact of inflation and
higher interest rates on consumer
spending and business investment.
These factors are likely to impact
portfolio company trading over time.
At the year-end, the Company was
ranked 2nd out of 39 Generalist VCTs
over five years and 9th out of 31 over ten
years, in the Association of Investment
Companies’ analysis of NAV Cumulative
Total Return. Shareholders should note
that, due to the lag in the disclosed
performance figures available each
quarter, the AIC ranking figures do not
fully reflect the final NAV movement to 30
September 2022, or those of our peers.
Dividends
The Board intends to continue to target
the Investment Adviser with providing an
attractive dividend stream to
Shareholders and was pleased to
declare two interim dividends of 4.00
pence per share each totalling 8.00
pence in respect of the year ended
30September 2022 exceeding the
Company’s annual target of 6.00 pence
per share.
The first interim dividend was paid on
8July 2022, to Shareholders on the
Register on 6 June 2022 and the
second interim dividend was paid on
7November 2022 to those
Shareholders on the Register on
23September 2022. These dividend
payments brought cumulative dividends
paid per share since inception in 2004
to 148.5 pence.
The Company’s ongoing target of paying
a dividend of at least 6.00 pence per
share in respect of each financial year
has been achieved and often exceeded
in each of the last eleven financial years.
It should be noted that the continued
movement of the portfolio to a larger
share of younger growth capital
investments could lead to increased
volatility, which may affect the return in
any given year. Shareholders should
also note that there may continue to be
circumstances where the Company is
required to pay dividends in order to
maintain its regulatory status as a VCT,
for example, to stay above the minimum
percentage of assets required to be
held in qualifying investments. Such
dividends may cause the Company’s
NAV per share to reduce by a
corresponding amount.
Dividend Investment Scheme
The Company’s Dividend Investment
Scheme (“DIS”) provides Shareholders
with the opportunity to reinvest their
cash dividends into new shares in the
Company at the latest published NAV
per share. New VCT shares attract the
same tax reliefs as shares purchased
through an Offer for Subscription. A total
of 1,901,145 (2021: 1,178,669) Ordinary
shares were allotted as a result of
dividends paid during the year resulting
in £1.81 million (2021: £1.06 million) being
retained by the Company.
Shareholders wishing to take advantage
of the scheme for any future dividends
can join the DIS by completing a
mandate form available on the
Company’s website, under the
‘Dividends’ heading, at:
www.incomeandgrowthvct.co.uk, or
alternatively, Shareholders can opt-out
by contacting Link Group, using their
details provided under Corporate
Information on page 87.
Investment Portfolio
The portfolio movements across the
year were as follows:
£m
Portfolio value at 30 September 2021 88.15
New and follow-on investments 7.33
Disposal proceeds (11.56)
Net realised gains 2.32
Net unrealised losses (13.16)
Net investment portfolio losses (10.84)
Portfolio value at 30 September 2022 73.08
In the face of the current testing
environment, particularly during the final
quarter of the financial year following
the mini-budget, the Investment Adviser
has started to see the impact on trading
of a number of investee companies of a
decline in consumer confidence. As a
result, there was a fall of £10.84 million
in the overall value of the portfolio
across year to 30 September 2022
(2021: increase of £43.64 million), or a
fall of (12.3)% on a like-for-like basis
compared to the opening value of the
portfolio at 1October 2021. Notably,
included within the fall of £10.84 million
above, Virgin Wines declined by £9.67
million. Virgin Wines, an AIM-listed
investment which has suffered from the
negative sentiment of its sector, in spite
of positive news flows from the
company itself and the relative
outperformance versus its peers.
The negative NAV total return for the
year was principally comprised of
unrealised falls in the value of
investments still held of £13.16 million,
primarily Virgin Wines, MyTutor and
Buster & Punch mitigated to some extent
by the successful exits from Media
Business Insight and Red Paddle
contributing to net realised gains of
£2.32 million.
In November 2021, the Company’s entire
holding in Red Paddle was realised,
generating proceeds of £5.52 million,
taking proceeds received over the life of
the investment of £6.50 million, a
Chair’s Statement
Chair’s Statement
33
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
multiple on cost of 5.4x and an IRR of
33.2%. In June 2022, the Company
realised its investment in MBI generating
proceeds of £6.02 million from the sale
(including loan repayments made earlier
in the year). This contributed to returns
received amounting to £8.23 million, a
2.2x multiple of cost and an IRR of 13.7%
over the life of this investment.
Following the year-end, Andersen EV, the
electric charger provider, was forced into
administration as a result of a substantial
deterioration in its trading conditions. This
has resulted in a realised loss of £0.71
million recognised in the year under
review. This is particularly disappointing as
the Company, alongside the other Mobeus
VCTs made a follow on investment into the
company in May of this year. The Company
had secured some impressive clients and
funding was provided to drive product
development in a premium brand which
operated in the emerging electric car
charging market. However, over the
summer months, a sour combination of
global supply issues and the removal of
Government consumer support for the
purchase of EV chargers quickly impacted
the company’s ability to continue trading
and so necessitated the appointment of
administrators shortly after the Company’s
year-end.
Investment activity during the year has
been robust, with four new and eight
follow-on investments completed,
totalling £7.33 million. The Company
invested a total of £2.69 million into four
new investments:
Proximity Insight retail technology
software
Bidnamic a marketing
technology business
Orri Limited an intensive day care
provider for adults
with eating disorders
FocalPoint a GPS enhancement
software supplier
In addition, eight follow-on investments
totalling £4.64 million were made into:
Caledonian a provider of UK
Leisure leisure and
experience breaks
Northern Bloc a dairy and allergen-
free ice cream brand
Andersen EV a provider of
premium EV chargers
Vivacity an AI and Urban
Traffic Control
business
Bleach London a hair colourants
brand
ActiveNav a provider of
enterprise-level file
analysis software
Preservica a seller of proprietary
digital archiving
software
RotaGeek a workforce
management
software business
We expect follow-on investments to
continue to be a significant feature of the
growth capital investments as they strive
to achieve scale and move towards
profitability. Follow-on investment
requests will be subject to scrutiny and
certain criteria being met, including the
HMRC Financial Health Test.
During such uncertain times,
management of the portfolio is critical
and the Investment Adviser is focused
on deploying its Talent Managment team
to support investments.
Shareholders should be aware that an
effective tightening of HMRC policy and
practice to a technical aspect of the VCT
financing rules is now resulting in the
restriction of potential follow-on
investments to support companies,
where more than half their subscribed
share capital has been lost. In a small
number of cases, this may result in the
Company not being able to follow its
money even where a compelling
business case exists therefore affecting
the growth prospects of these
businesses.
After the year end, the Company
realised its equity holding in Equip
Outdoor Technologies Holdings Limited
(“EOTH”) for £7.34 million (including
preference dividends). These proceeds
have contributed to returns received
over the life of this investment of £9.54
million, which is a multiple on cost of
6.9x to date. The Company has retained
its interest yielding loan stock.
Revenue Account
The results for the year are set out in the
Income Statement on page 52 and show
a revenue return (after tax) of 1.23 pence
per share (2021: 0.77 pence per share).
The revenue return for the year of £1.53
million has increased from last year’s
figure of £0.91 million. This is primarily
the result of significant loan interest
arrears that were not previously
recognised that were received upon the
sale of MBI as well as higher receivable
dividends from EOTH.
Fundraising
In January 2022, the Company
completed a fundraise of £10 million for
the 2021/2022 tax year which was fully
subscribed in less than 24 hours. This
level of demand was pleasing, but the
Board was aware that a number of
investors were left disappointed having
not been able to subscribe. Later in the
year, upon considering the future cash
requirements of the VCT and the
potential demand for the Company’s
shares, the Board approved a further
fundraise for the 2022/23 tax year.
Having provided a period of time
between the launch of the prospectus
and acceptance of applications, the
Board was pleased that the initial
amount of £14m (as well as an over-
allotment facility of a further £8m),
launched early in October 2022, was
fully subscribed by 13 December 2022
and is therefore no longer taking
applications. Your Company welcomes
both new and existing shareholders.
Those investors who invested when the
over-allotment facility had been utilised,
have yet to receive their shares which
are due to be allotted in January 2023
and certificates dispatched shortly
afterwards.
The fundraising launched in October
2022 was to ensure that the Company
retained adequate levels of liquidity to
continue to take advantage of new
investment opportunities and fund
further expansion of the businesses in
its investment portfolio, seek the
delivery of attractive returns for its
Shareholder, including the payment of
dividends, over the medium term, and
buy back its shares from those
Shareholders who may wish to sell their
shares. It is not the intention of the
Board to conduct another fundraise in
2023.
Liquidity
Cash and liquidity fund balances as at
30 September 2022 amounted to £34.78
million representing 32.1% of net assets.
After the year-end, following the
payment of a 4.00 pence per share
dividend and the successful fundraise,
the pro-forma level of liquidity is £52.55
million (41.6% of net assets). The Board
continues to monitor credit risk in
respect of its cash and near cash
resources and to prioritise the security
and protection of the Company’s capital.
Share buy-backs
During the year to 30 September 2022,
the Company bought back and
cancelled 1,166,089 of its own shares
(2021: 1,285,499), representing 1% (2021:
1.1%) of the shares in issue at the
beginning of the year, at a total cost of
£1.03 million (2021: £1.05 million),
inclusive of expenses.
Chair’s Statement
4
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Chair’s Statement
It is the Company’s policy to cancel all
shares bought back in this way. The
Board regularly reviews its buyback
policy, where its priority is to act
prudently and in the interest of
remaining Shareholders, whilst
considering other factors, such as levels
of liquidity and reserves, market
conditions and applicable law and
regulations. Under this policy, the
Company seeks to maintain the discount
at which the Company’s shares trade at
approximately 5% below the latest
published NAV.
Shareholder Communications &
Annual General Meeting
May I remind you that the Company has
its own website which is available at:
www.incomeandgrowthvct.co.uk.
The Investment Adviser last held its
Shareholder Event virtually on behalf of
all four Mobeus VCTs on 25 February
2022. The event was well received and
the Investment Adviser plans to hold
another event in March 2023. Further
details will be circulated to Shareholders
and shown on the Company’s website in
due course.
Your Board is pleased to hold the next
Annual General Meeting (“AGM”) of the
Company at 11.00am on Wednesday,
22February 2023 at the offices of
Shakespeare Martineau LLP, 6th Floor,
60 Gracechurch Street, London EC3V
0HR. A webcast will also be available at
the same time for those Shareholders
who cannot attend in person however,
please note that you will not be able to
vote via this method and so are
encouraged to return your proxy form
before the deadline of 20 February
2023. Information setting out how to join
the meeting by virtual means will be
shown on the Company’s website. For
further details, please see the Notice of
the Meeting which can be found at the
end of this Annual Report & Financial
Statements, on pages 84 to 86.
Environmental, Social and
Governance (“ESG”)
The Board and the Investment Adviser
believe that the consideration of
environmental, social and corporate
governance (“ESG”) factors throughout
the investment cycle will contribute
towards enhanced Shareholder value.
Gresham House Asset Management
Limited, has a team which is focused on
sustainability, the Board views this as an
opportunity to enhance the Company’s
existing protocols and procedures
through the adoption of the highest
industry standards.
The future FCA reporting requirements
consistent with the Task Force on
Climate-related Financial Disclosures,
which commenced on 1 January 2021 do
not currently apply to the Company but
will be kept under review, the Board
being mindful of any recommended
changes.
Fraud Warning
We are aware of a number of cases
where Shareholders are being
fraudulently contacted or are being
subjected to attempts of identity fraud.
Shareholders should remain vigilant of
all potential financial scams or requests
for them to disclose personal data. The
Board strongly recommends
Shareholders take time to read the
Company’s Fraud warning section,
including details of who to contact,
contained within the Information for
Shareholders section on pages 77 to 82.
Board Succession
Helen Sinclair retired from the Board
immediately following the Annual
General Meeting in February 2022 after
19 years wonderful service and left with
the gratitude of the Board. The Board
continued to be comprised of the two
existing directors whilst considering the
appropriate composition and succession
of the Board. Following this review, an
extensive recruitment process
commenced and we were delighted to
appoint Nemone Wynn-Evans to the
Board and its committees as a non-
executive director on 7 November 2022
and extend a warm welcome to
Nemone, who will present herself for
election as a director at the AGM in
February 2023. Nemone has a wealth of
relevant experience and will bring
additional skills to the Board.
Nemone will take over as Chair of the
Audit Committee on 1 January 2023 and
I would like to thank Justin for filling this
role since his appointment in 2019 and
for the excellent work conducted under
his Chairmanship. Justin will remain as
the Chair of the Investment Committee,
a role he also took on earlier in the year.
Outlook
The geopolitical and economic context
for the next twelve months is likely to be
challenging although this can also
provide a good opportunity to make high
quality investments and build strategic
stakes in businesses with great potential
for the future. Despite the successful exit
of EOTH in November, the exit
environment is likely to be subdued
compared to recent years, although this
is not foreseen to be a significant issue
given that the VCT fund is not
time-limited. However, the combined
impact of inflation, interest rates and
restrictions in Government spending can
all be expected to impact consumer and
business confidence. With business
failure rates still below their pre-Covid
levels, we therefore anticipate that further
stresses will become apparent across the
UK business population over the coming
year. No sectors will be immune, but the
Company has a reasonably large and
diverse portfolio, managed by a
professional and capable Investment
team, that mitigates the challenges which
lie ahead.
Maurice Helfgott
Chair
16 December 2022
Company objective and
business model
Objective
The objective of the Company is to
provide investors with an attractive
return by maximising the stream of
tax-free dividend distributions from the
income and capital gains generated by a
diverse and carefully selected portfolio
of investments, while continuing at all
times to qualify as a VCT.
Summary of Investment Policy
The Company’s Investment Policy is to
invest primarily in a diverse portfolio of
UK unquoted companies. Investments
are generally structured as part loan and
part equity in order to receive regular
income, to generate capital gain upon
sale and to reduce the risk of high
exposure to equities. To further spread
risk, investments are made in a number
of different businesses across different
industry sectors.
The Company’s cash and liquid
resources are held in a range of
instruments which can be of varying
maturities, subject to the overriding
criterion that the risk of loss of capital be
minimised.
The Company seeks to make
investments in accordance with the
requirements of VCT regulation. A
summary of this is set out below.
The full text of the Company’s
Investment Policy is set out on page 28
of this Strategic Report.
Summary of VCT regulation
To maintain its status as a VCT, the
Company must meet a number of
conditions, the most important of which
are that:
●● The Company is required to hold at
least 80%, by VCT tax value
1
of its
total investments (shares, securities
and liquidity) in VCT qualifying
holdings, within approximately three
years of a fundraising.
●● all qualifying investments made by
VCTs after 5 April 2018, together
with qualifying investments made
by funds raised after 5 April 2011
are, in aggregate, required to
comprise at least 70% by VCT tax
value in “eligible shares”, which
carry no preferential rights (save as
may be permitted under VCT rules);
●● no investment in a single company
or group of companies may
represent more than 15% (by VCT
tax value) of the Company’s total
investments at the date of
investment;
●● the Company must pay sufficient
levels of income dividend from its
revenue available for distribution so
as not to retain more than 15% of its
income from shares and securities
in a year;
●● the Company’s shares must be
listed on the London Stock
Exchange or a regulated European
stock market;
●● non-qualifying investments cannot
be made, except for certain
exemptions in managing the
Company’s short-term liquidity;
●● VCTs are required to invest 30% of
funds raised in an accounting
period beginning on or after 6 April
2018 in qualifying holdings within
12months of the end of that
accounting period, and
●● The period for reinvestment of the
proceeds on disposal of qualifying
investments is 12 months.
To be a VCT qualifying holding, new
investments must be in companies:
●● which carry on a qualifying trade;
●● which have no more than £15 million
of gross assets at the time of
investment and no more than £16
million immediately following
investment from VCTs;
●● whose maximum age is generally
up to seven years (ten years for
knowledge intensive businesses);
●● that receive no more than an annual
limit of £5 million and a lifetime limit
of £12 million (for knowledge
intensive companies the lifetime
limit is £20 million, and the annual
limit is £10 million), from VCTs and
similar sources of State Aid funding;
●● that use the funds received from
VCTs for growth and development
purposes.
In addition, VCTs may not:
●● offer secured loans to investee
companies, and any returns on loan
capital above 10% must represent
no more than a commercial return
on the principal; and
●● make investments that do not meet
the ‘risk to capital’ condition (which
requires a company, at the time of
investment, to be an
entrepreneurial company with the
objective to grow and develop, and
where there is a genuine risk of loss
of capital).
1
VCT tax value means as valued in
accordance with prevailing VCT
legislation. The calculation of VCT tax
value is arrived at using tax values,
based on the cost of the most recent
purchase of an investment instrument in
a particular company, which may differ
from the actual cost of each investment
shown in the Investment Portfolio
Summary on pages 22 to 27.
5
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
Strategic Report
The Company’s business model is set out in the diagram below.
The Company and its business
model
The Company is a Venture Capital Trust
and its objective and Investment Policy
are therefore designed to ensure that it
continues to qualify and is approved as
a VCT by HM Revenue & Customs
(“HMRC”) whilst maximising returns to
Shareholders from both income and
capital. A summary of the most important
rules that determine VCT approval is set
out on page 5.
It is a fully listed company on the London
Stock Exchange and is therefore also
required to comply with the Listing Rules
governing such companies.
The Company is an externally advised
fund and has a Board comprising
Non-Executive Directors. The Board has
overall responsibility for the Company’s
affairs, including the determination of its
Investment Policy, subject to
Shareholder approval. Investment
advisory and operational support are
outsourced to external service providers
including the Investment Adviser,
Company Secretary and Administrator
and the Registrar, with the strategic and
operational framework and key policies
set and monitored by the Board.
Investment and divestment proposals
are originated, negotiated and
recommended by the Investment
Adviser and are then subject to
comment and approval by the Directors.
Following the acquisition of the VCT
investment advisory business of Mobeus
Equity Partners LLP (“Mobeus”) by
Gresham House Asset Management
Limited on 30September 2021, the
Company co-invests alongside the
Baronsmead VCTs and the other three
Mobeus VCTs in new unquoted VCT
qualifying investments in proportion to
the relative net assets of each VCT
(excluding Direct AIM investments).
Private individuals invest in the
Company to benefit from both income
and capital returns generated by
investment performance. By investing in
a VCT they are eligible for up-front
income tax relief (currently 30% of the
amount subscribed for new shares by an
investor), as well as tax-free dividends
received from the Company. Investors
are also not liable for any capital gains
tax upon the eventual sale of the shares.
Shares have to be held for a minimum of
five years to retain the initial income tax
relief received.
Board of non-executive directors
Responsible for:
- Governing all aspects of the Company’s
operations, including relationships with
key service providers
- Setting and monitoring the Investment Policy
and other key policies
-
Approving VCT investments and divestments on
the recommendation of the Investment Adviser
Investment Adviser
(Gresham House Asset
Management Limited)
Responsible for implementing the Investment
Policy and recommending suitable new
investments and realisations to the Board
Investors
Typically:
- Private individuals
- Aged 18 plus
- UK tax payers
Company Secretary & Administrator
(Gresham House Asset
Management Limited)
Responsible for providing company secretarial
and administration services to the Company
Investee companies
- Comply with VCT tax legislation
Primarily:
- Unquoted companies
- Operate within the UK
- Meet the criteria set out in the Investment Policy
6
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
Performance
The Board has identified six key performance indicators that it uses in its own assessment of the Company’s progress and which
are typical for VCTs. These are:
1. Annual and cumulative returns per share for the year;
2. The Company’s performance compared with its peer group;
3. Dividends paid compared with dividend target;
4. Compliance with VCT legislation;
5. Share price and discount to NAV; and
6. Costs.
Some of these are classified as alternative performance measures (“APMs”) in line with Financial Reporting Council (“FRC”)
guidance. See Glossary of terms for details on page 83. APMs are measures of performance that are in addition to the data
reported in the Financial Statements. It is intended that these will provide Shareholders with sufficient information to assess how
the Company has performed against its Objective in the year to 30 September 2022, and over the longer-term, through the
application of its investment and other principal policies.
1. Annual and cumulative returns per share for the year
The Company’s objective is to generate long-term growth returns from capital and income. To assess this, the Board monitors
the growth in total returns per share, both on a NAV basis and a share price basis, adjusted for dividends paid in the year.
Total Shareholder returns per share for the year
The NAV and Share Price total returns per share for the year ended 30 September 2022 were (8.7)% (2021: 50.5%) and (3.8)%
(2021: 64.7%) respectively, as shown below:
NAV basis
(p)
Share price basis
(p)
Closing NAV per share 83.73
Closing share price* 81.50
Plus: dividends paid in year (Note 1) 8.00
Plus: dividends paid in year (Note 1) 8.00
NAV Total return for year 91.73
Share price Total return for year 89.50
Less: opening NAV per share 100.45
Less: opening share price 93.00
Decrease in NAV total return for year
per share (Note 2) (8.72)
Decrease in Share price total return
for year per share (3.50)
% NAV Total return for year (8.7)%*
% Share price total return for year (3.8)%
* The Share Price return differs from the NAV total return because the share price at 30 September 2022 is by reference to the latest
announced NAV per share, being 86.78 pence as at 30 June 2022, after adjusting for a dividend of 4.00 pence paid in July. Also, the
closing share price of 81.50 pence per share has been adjusted because the share price at 30 September 2022 was ex-div, a 4.00 pence
per share dividend was paid on 7 November 2022.
Note 1: The dividends paid in the year were a 4.00 pence per share dividend in respect of the year ended 30 September 2021, paid on
7January 2022, to Shareholders on the register on 10 December 2021 and a 4.00 pence per share dividend in respect of the year
ended 30 September 2022, paid on 8 July 2022, to Shareholders on the register on 6 June 2022.
For similar performance data to that shown above for each allotment in each fundraising since the inception of the Company (including the
former ‘O’ Share Fund raised in 2000/01), please see the Performance Data Appendix on pages 80 and 81 of this Annual Report.
Note 2: NAV return per share for the year is comprised of:
Year ended 30 September 2022
(p)
2021
(p)
Gross portfolio capital returns (8.38) 36.81
Gross income returns 2.18 1.65
Costs (2.45) (3.15)
Other movements (0.07) 0.08
NAV return for the year (as above for 2022 only) (8.72) +35.39
Total return (p)
7
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
The contributions from the portfolio returns and income are shown before deducting attributable costs. They are explained
below under the Review of Financial Results for the year. Costs are referred to in section 6 on page 10.
The Company does not consider it appropriate to set a specific annual cumulative return per share target for the year. However,
Shareholders should note that the Board assesses these returns against the Company’s ability to meet its current annual
dividend target of six pence per share (explained in section 3 Dividends paid compared with dividend target).
Before any performance fee is payable, Shareholders must benefit from cumulative NAV total return since 30September 2013 of
at least 6% per annum (5% for the year ended 30 September 2014) before deducting any performance fee for the year of
calculation only. For details, see Note 4 to the Financial Statements.
Cumulative total shareholder returns per share (NAV basis)
The longer-term trend of performance on this measure is shown in the chart below:
Net asset value Cumulative dividends paid to date
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
230
240
30/09/201830/09/201730/09/201630/09/201530/09/201430/09/201330/09/2012 30/09/2021 30/09/2022
Cumulative NAV
total shareholder
return (pence per
share)
236.95 228.23138.12 179.01 183.74174.88165.10154.40
109.62 113.90 114.60 106.38 98.51
28.50 40.50
68.50
80.50
50.50
Pence per share
186.32
30/09/2019 30/09/2020
192.12 201.56
108.00 113.00
81.24 78.32
136.50 144.50
100.45
102.50
79.12
70.06 83.73
131.50
1
On 7 November 2022, the Company paid a second interim dividend of 4.00 pence per share in respect of the year ended 30 September
2022. Following this dividend, the NAV per share then prevailing will reduce by a corresponding 4.00 pence as well as cumulative
dividends paid increasing by the same.
Internal rate of return (“IRR”)
As at 30 September 2022 2021
Internal rate of return (NAV basis) (with tax relief) 13.0% 13.7%
Internal rate of return (NAV basis) (without tax relief) 8.9% 9.2%
These figures include initial income tax relief since the launch of the current share class in February 2008. The IRR is a measure
of an investment’s rate of return. It is calculated as the annual discount rate that equates the net investment cost (70.00 pence
per share with income tax relief, 100 pence per share without tax relief), at the date of the original investment, with the value of
subsequent dividends received and the latest NAV per share. This percentage return figure can be compared to percentage
returns Shareholders have achieved elsewhere.
Review of financial results for the year
For the year ended 30 September 2022
£m
30 September 2021
£m
Capital return (12.73) 40.95
Revenue return 1.53 0.91
Total return (11.20) 41.86
The capital loss for the year of £12.73 million (9.84 pence of NAV return for the year per share held at the year-end, net of costs
charged to capital) is due primarily to a net decrease in unrealised valuations of the portfolio companies, the full exits of Vian
Marketing and MBI. The decrease in capital return from £40.95 million to negative £12.73 million is due mainly to a larger net
decrease in the unrealised value of the portfolio.
8
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
The revenue profit for the year of £1.53 million (1.18 pence of NAV return for the year per share held at the year-end, net of costs
charged to revenue) has increased over the previous year. The revenue profit is derived from income, primarily from loan interest,
outweighing revenue expenses. This has increased mainly due to a large dividend declared by EOTH during the year and loan
interest arrears received upon the loan repayment of MBI. This increase was partially offset by higher revenue expenses, due to
increase in director recruitment fees, printing fees and dividend investment scheme issue fees.
2. The VCT’s performance compared with its peer group
The Board places emphasis on benchmarking the Company’s performance against its peer group of generalist VCTs and
aims to maintain the Company’s performance within the top quartile of this peer group. This compares the percentage
increase in NAV total return of the Company (assuming dividends are reinvested) to an index of generalist VCTs, which are
members of the AIC over the last one, three, five and ten years based on figures published by Morningstar.
Period I&G VCT NAV
Total Return %
(Rank)
Weighted average
Generalist VCT NAV
Total Return %
(No. of VCTs)
One year (4.1)%
1
(29th) (2.0)% (41)
Three years 58.0% (4th) 25.6% (41)
Five years 85.1% (2nd) 35.6% (39)
Ten years 182.1% (9th) 100.5% (31)
1
This figure of (4.1)% differs from that shown in section 1 of (8.7)%, due to the former being based upon the latest announced NAV per share
of 90.78 pence per share at 30 June 2022 less an interim dividend paid of 4.00 pence per share as well as assuming dividends are
reinvested at each payment date.
On a NAV cumulative Total Return basis (which, compared to the figures above assumes dividends are not reinvested), the VCT
was ranked 31st over one year (out of 41 VCTs) 4th over three years (out of 41 VCTs), 2nd over five years (out of 39 VCTs) and 9th
over ten years (out of 31 VCTs) among generalist (including planned exit) VCTs at 30 September 2022. These statistics are
produced by the AIC (based on information prepared by Morningstar).
The Board is pleased with the performance of the Company in respect of its peer group over the medium and longer term, but is
disappointed at the relative fall in recent short-term comparable performance.
3. Dividends paid compared with dividend target
The Company’s objective is to provide Shareholders with an attractive stream of tax-free dividends. The Company’s annual
dividend target is six pence per share. However, the Board continues to review the sustainability of this target and the ability of
the Company to pay dividends in the future cannot be guaranteed and will be subject to performance and availability of cash and
reserves.
20.00
0.00
Dividends paid or payable
in respect of the financial year
Cumulative dividends paid or
payable in respect of the
financial year
Pence per share
120.00
140.00
100.00
160.00
80.00
60.00
40.00
30/09/2018 30/09/202030/09/2019
6.00
111.50
30/09/202230/09/2021
6.00
117.50
14.00
131.50
9.00
8.00
140.50
148.50
Dividends paid or payable per share in
respect of the financial year ended
30 September 2022 were 8.00 pence
comprising of two interim dividends of
4.00 pence per share, paid/ payable
to Shareholders on 8 July 2022 and
7 November 2022, respectively.
Cumulative dividends paid/payable to
date since the inception of the current
share fund are now 148.50 pence per
share.
1
1
The first allotment of the former ‘S’ Share
class, now the current share class took
place on 6 February 2008.
9
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
4. Compliance with VCT legislation
In making their investment in a VCT, Shareholders become eligible for a number of tax benefits under VCT tax legislation, as long
as the Company also complies with VCT tax legislation. To achieve this, the Company must meet a number of tests set by the
VCT legislation, a summary of which is given in the table headed ‘Summary of VCT regulation’ on page 5. Throughout the year
ended 30 September 2022, the Company continued to meet these tests.
5. Share price and discount to NAV
The Board recognises that Shareholders may wish to sell their shares from time to time and that the secondary market for VCT
shares can be limited. The impact of this secondary market is that the Company’s share price will typically trade at a level which
is less than the Company’s NAV per share. Subject to the Company having sufficient available funds and distributable reserves, it
is the Board’s intention to pursue a buyback policy with the objective of maintaining the discount to NAV at which the Company’s
shares may trade in the market at approximately 5% or less.
This buyback policy provides a mechanism for the Company to enhance the liquidity of its shares and seek to manage the level
and volatility of the discount to NAV at which its shares may trade as market liquidity in VCTs is normally very restricted.
Continuing Shareholders benefit from the difference between the NAV and the price at which the shares are bought back and
cancelled.
The discount for the Company’s shares at 30 September 2022 was 6.1% (2021: 4.3%) based on the share price shown in the table
on page 1 and the NAV at 30 June 2022 of 86.78 pence (after deducting a 4.00 pence per share dividend paid on 8 July 2022).
The discount temporarily exceeded 5% at the year end due to a small number of secondary trades undertaken just prior to the
year end.
During the year ended 30 September 2022, Shareholders holding 1,166,089 shares expressed their desire to sell their
investments. The Company instructed its brokers, Panmure Gordon (UK) Limited, to purchase these shares at prices reflecting
the Company’s share buyback discount policy. The Company subsequently purchased these shares at prices of between 78.64
and 91.63 pence per share and cancelled them. During the year, the Company bought back 1.0% of the issued share capital of
the Company at 1 October 2021.
6. Costs
Shareholders will be aware there are a number of costs involved in operating a VCT. Although Shareholders do not bear
costs in excess of the expense cap of 3.25%, the Board aims to maintain the ratio before any performance fees at not more
than 3%.
The Board monitors costs using the Ongoing Charges Ratio which is as set out in the table below:
2022 2021
Ongoing charges 2.5% 2.3%
Performance fee - 1.0%
Ongoing charges plus accrued performance fee 2.5% 3.3%
The Ongoing Charges Ratio has been calculated using the AIC recommended methodology. This figure shows Shareholders the
annual percentage reduction in shareholder returns as a result of recurring operational expenses, assuming markets remain
static and the portfolio is not traded. Although the ongoing charges figure is based upon historical information, it provides
Shareholders with an indication of the likely level of costs that will be incurred in managing the fund in the future.
The Total Expense Ratio (which differs from the Ongoing charges ratio and forms the basis of any expense cap upon Investment
Adviser fees, see Note 4 for further explanation) for the year was 2.8% (2021: 2.1%) of closing net assets. As a result, no breach
has occurred of the expense cap of 3.25% of the closing net assets for the year ended 30 September 2022 (2021: £nil).
Investment Adviser fees and other expenses
Investment Adviser fees charged to both revenue and capital have increased from £2.20 million to £2.64 million. This increase
reflects principally a higher level of net assets over the majority of the year. Also, the Investment Adviser performance incentive
fee target return hurdle was not achieved during the year resulting in no performance fee (2021: £1.10 million).
Other expenses have increased from £0.44 million to £0.54 million, mainly due to increase in director recruitment fees, printing
fees and dividend investment scheme issue fees.
Further details of these fees and expenses are contained in Notes 4 and 5 to the Financial Statements on pages 58 to 60.
10
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
Investment Adviser’s Review
11
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
Portfolio Review
The current macro environment
continues to create challenging
conditions for all enterprises including
our investee companies, with operating
margins coming under pressure.
The portfolio movements in the year are
summarised as follows:
2022
£m
2021
£m
Opening portfolio
value
88.15 50.86
New and follow-
on investments
7.33 8.09
Disposal
proceeds
(11.56) (14.44)
Net realised gains 2.32 4.16
Unrealised
Valuation losses
(13.16) 39.48
Portfolio value at
30 September
73.08 88.15
The year to 30 September 2022 saw a
significant decline in many quoted
market values. In addition, political
uncertainties have also affected
consumer confidence across the UK and
impact is now being starting to be seen.
In spite of relatively resilient underlying
trading performance in the early part of
the year, the portfolio value has reduced
as a result of these circumstances. The
Company made four new growth capital
investments during the year totalling
£2.69 million:
Proximity Insight - £0.81 million
Retail technology software
Bidnamic - £0.64 million
Marketing technology business
FocalPoint - £0.66 million
A GPS enhancement software provider
Orri Limited - £0.58 million
An intensive day care provider for adults
with eating disorders
Also during the year, the Company
further invested into eight portfolio
companies totalling £4.64 million, a
breakdown is listed later in the
Investment Adviser’s Review.
Two strong exits were achieved during
the year, Red Paddle and MBI. On Red
Paddle, the Company received a total of
£5.52 million in proceeds during the
year, generating a realised gain of £1.20
million in the year. On MBI, the Company
received a total of £6.02 million in
proceeds during the year generating a
realised gain of £1.82 million. It was
disappointing that Andersen EV, despite
securing some large clients such as
Porsche and JLR, went into
administration, Andersen experienced
very challenging trading conditions with
substantially reduced demand, supplier
chain issues, cost pressures and the
removal of government consumer
support for the purchase of EV chargers.
A realised loss of £0.71 million was
recognised during the financial year as a
result.
After the year end, the Company
realised its equity holding in Equip
Outdoor Technologies Holdings Limited
for £7.34 million (including preference
dividends). These proceeds have
contributed to returns received over the
life of this investment of £9.54 million,
which is a multiple on cost of 6.9x to
date, an IRR of 23.2%. The Company has
retained it interest yielding loan stock.
The investment and divestment activity
during the year has further increased the
proportion of the portfolio comprised of
investments made since the 2015 VCT
rule change to 71.5% by value at the
year-end (30 September 2021: 59.5%).
The portfolio’s valuation changes in the year are summarised as follows:
Investment Portfolio Capital Movement 2022
£m
2021
£m
Increase in the value of unrealised investments 7.32 40.81
Decrease in the value of unrealised investments (20.48) (1.33)
Net (decrease)/increase in the value of unrealised investments
(13.16) 39.48
Realised gains 3.03 4.26
Realised losses (0.71) (0.10)
Net realised gains in the year 2.32 4.16
Net investment portfolio movement in the year (10.84) 43.64
Valuation changes of portfolio
investments still held
The main reductions within total
valuation decreases of £(20.48) million,
were:
●● Virgin Wines - £(9.67) million;
●● MyTutor - £(3.60) million
●● Buster and Punch - £(1.64) million,
and
●● Wetsuit Outlet - £(1.58) million.
Virgin Wines has consistently delivered
robust trading performance relative to its
peers and continued to release positive
news flow. Nevertheless, the value of
the AIM-listed stock has been impacted
by the general de-rating of its sector.
MyTutor has generated strong revenues
in the year to date, both above budget
and previous years. However, a
reduction in comparator multiples has
reduced the value of this investment
which reflects market movements rather
than company specific performance.
The decrease in Buster and Punch and
Wetsuit Outlet reflects the weak
economic environment and the resulting
deterioration of consumer sentiment.
The main uplifts within total valuation
increases of £7.32 million were:
●● Preservica - £2.84 million
●● EOTH - £1.72 million
●● Master Removers Group -
£1.40 million
Preservica continues build its high
retention, long contract term Software-
as-a-Service (“SaaS”) business
improving recurring revenues year on
year. EOTH and Master Removers Group
continue to grow with both businesses
being very cash generative and high
margin.
12
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
Realised gains
The Company realised its investments in
Red Paddle and MBI during the year
under review, generating gains in the
year of £1.20 million and £1.82 million,
respectively. These contributed to a
multiple of cost of 5.4x and 2.2x over the
life of the investments. A further £0.01
million of deferred proceeds were
received from investments realised in a
previous year. Conversely, Muller EV
(trading as Andersen EV) generated a
realised loss in the year of £(0.71) million.
Investment portfolio yield
In the year under review, the Company received the following amounts in loan interest and dividend income:
2022
£m
2021
£m
Interest received in the year 1.41 1.22
Dividends received in the year 1.16 0.69
Total portfolio income in the year
1
2.57 1.91
Portfolio Value at 30 September 73.08 88.15
Portfolio Income Yield (Income as a % of Portfolio value at 30 September) 3.5% 2.2%
1
Total portfolio income in the year is generated solely from investee companies within the portfolio.
New Investments during the year
The Company made four new investments totalling £2.69 million, as detailed below:
Company Business Date of
investment
Amount of new
investment (£m)
Proximity Insight Retail software
February
2022
0.81
Proximity Insight (proximityinsight.com) is a retail technology business that offers a ‘Super-App’ that is used by the customer-
facing teams of brands and retailers to engage, inspire and transact with customers. Headquartered in London with offices in
New York and Sydney, Proximity Insight has a global client base that includes over 20 brands, boutiques and department
stores in fashion, beauty, jewellery, electronics and homewares. These clients use Proximity Insight’s platform to blur the lines
between physical and digital retail, enhancing the customer experience and improving the lifetime value of their customers by
upwards of 35%. The business grew annual recurring revenue by 117% to £2.2 million in 2021, and the investment will support
Proximity Insight’s continued product development and international growth. The investment was made across all six VCTs
advised and managed by Gresham House, including the two Baronsmead VCTs.
Bidnamic
Marketing technology
business
May 2022 0.64
Lads Store Limited, trading as “Bidnamic” (bidnamic.com) is a marketing technology business that offers a SaaS platform for
online retailers to manage their search engine marketing spend. The technology was all developed internally and uses
bespoke machine learning algorithms to automate the management and optimisation of online retailers’ Google shopping
spend. The ARR of the business has grown substantially over the last two years and this is projected to continue. The
investment round will be used to further enhance the product’s capabilities and drive continued ARR growth through
expanding the sales & marketing team and building a presence in North America. The investment was made across all six
VCTs advised and managed by Gresham House, including the two Baronsmead VCTs.
FocalPoint
GPS enhancement
software provider
September
2022
0.66
Focal Point Positioning Limited (focalpointpositioning.com) is a deeptech business with a growing IP and software portfolio. Its
proprietary technology applies advanced physics and machine learning to dramatically improve the satellite-based location
sensitivity, accuracy, and security of devices such as smartphones, wearables, and vehicles and reduce costs. The investment
was made across all six VCTs advised and managed by Gresham House, including the two Baronsmead VCTs.
13
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
Company Business Date of
investment
Amount of new
investment (£m)
Orri
Specialists in eating
disorder support
September
2022
0.58
Orri Limited (orri-uk.com) is an intensive day care provider for adults with eating disorders. Orri provides an alternative to
expensive residential in-patient treatment and lighter-touch outpatient services by providing highly structured day and half
day sessions either online or in-person at its clinic on Hallam Street, London. Orri opened its current clinic on Hallam Street,
London in February 2019 which provides a homely environment in a converted 4-storey manor house but which is operating
at capacity. The plan sees a larger site being leased nearby with Hallam Street being used to provide a step-down outpatient
service. The investment was made across all six VCTs advised and managed by Gresham House, including the two
Baronsmead VCTs.
Further investments during the year
The Company made eight further investments into existing portfolio companies, totalling £4.64 million, as detailed below:
Company Business Date of
investment
Amount of further
investment (£m)
Preservica
Provider of digital
preservation solutions
November 2021 1.71
Preservica (preservica.com) is a leading provider of digital preservation solutions and its access software is used around the
globe by leading businesses, archives, libraries, museums and government organisations to safeguard and share valuable
digital content. The additional investment provides further growth funding to enable Preservica to evolve its technology
platform and to bring a potentially transformational product to market in collaboration with Microsoft.
Active Navigation File analysis software December 2021 0.43
Data Discovery Solutions, trading as Active Navigation (activenav.com) is a file analysis software solution which makes it easier
for companies to clean up network drives, respond to new data protection laws and dispose of redundant and out dated
documents. Active Navigation’s solution is used by significant blue chip customers, particularly those in highly regulated
industries such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK.
Active Navigation will seek to drive continued growth from its file analysis platform with the recruitment of experienced sales
and professional services staff.
Caledonian Leisure
UK Leisure and
experience breaks
January /
February 2022
0.30
Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as
entertainment destinations and theme parks) to deliver UK-based leisure and experience breaks to its customers. It comprises
two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The domestic leisure and
experience travel market was devastated by the COVID-19 pandemic, but the company was well-placed to expand as
lockdown and travel restrictions eased. A series of planned investment tranches has helped the company prepare for and
capitalise on the strong demand for UK staycation holidays.
Northern Bloc
Dairy and allergen-free
ice cream producer
April 2022 0.19
Northern Bloc Ice Cream (northern-bloc.com) is an established food brand in the emerging and rapidly growing vegan market. By
focusing on chef quality and natural ingredients, Northern Bloc has carved out an early mover position in the dairy and allergen-
free ice cream sector. The company’s focus on plant-based alternatives has strong environmental credentials as well as it being
the first ice cream brand to move wholly into sustainable packaging. Following the initial investment in December 2020, Northern
Bloc has grown and strengthened its prospects against a challenging market backdrop. This further investment provides
additional working capital and funds a new production facility to increase its resilience, flexibility and margins in the future.
14
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
Company Business Date of
investment
Amount of further
investment (£m)
Andersen EV Premium EV chargers May 2022 0.40
Muller EV Limited (trading as Andersen EV) (
andersen-ev.com
) is a design-led manufacturer of premium electric vehicle (EV)
chargers. Incorporated in 2016, this business secured high profile partnerships with household brands, establishing an
attractive niche position in charging points for the high-end EV market. This follow-on funding was to further support its
premium brand and product positioning whilst ensuring all new and existing products meet the most recent and highest safety
and compliance standards. Unfortunately, over the summer months the company experienced very challenging trading
conditions including substantially reduced demand, global supply chain issues, inflation and the removal of government
consumer support for the purchase of EV chargers. The company therefore entered administration after the year end.
RotaGeek
Workforce management
software
June 2022 0.31
RotaGeek (
rotageek.com
) is a provider of cloud-based enterprise software to help larger retail, leisure and healthcare
organisations to schedule staff effectively. RotaGeek has proven its ability to solve the scheduling issue for large retail clients
effectively competing due to the strength of its technologically advanced proposition. The company has made significant
commercial progress since the VCTs first investment nearly doubling Annual Recurring Revenues (ARR). This investment will
help boost ARR further and enable the company to take advantage further large client opportunities.
Vivacity
Provider of artificial
intelligence & urban traffic
control systems
July 2022 0.84
Vivacity (vivacitylabs.com) develops camera sensors with on-board video analytics software that enables real-time
anonymised data gathering of road transport system usage. It offers city transport authorities the ability to manage their road
infrastructure more effectively, enabling more efficient monitoring of congestion and pollution levels as well as planning for
other issues, such as the changing nature of road usage (e.g. the increasing number of cyclists). The technology and software
represent a significant leap forward for local planning authorities which have traditionally relied upon manual data collection
methods. This new investment will help boost the company’s revenues through development of new functionality to enhance
its product suite which can also be installed into the existing asset base.
Bleach Hair Colourants brand August 2022 0.46
Bleach London Holdings (“Bleach”) (bleachlondon.com) is an established brandwhich develops and markets a range of
innovative haircare and colouring products. Bleach is regarded as a leading authority in the hair colourant market having
opened one of the world’s first salons focused on colouring and subsequently launched its first range of products in 2013. This
further investment was part of a wider £5.5 million investment round alongside existing shareholders and a strategic partner.
The funds will be used to drive further expansion and strategic penetration of the North American market and consolidate the
brand’s position in the UK market.
15
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
Portfolio Realisations during the year
The Company realised two investments, as detailed below:
Company Business Period of
investment
Total cash proceeds over
the life of the investment/
Multiple over cost
Vian Marketing
Limited (trading
as Red Paddle)
Design, manufacture
and sale of stand-up
paddleboards and
windsurfing sails
July 2015
to
November 2021
£6.50 million
5.4x
The Company sold its investment in Vian Marketing Limited (trading as Red Paddle) to the Myers Family Office for £5.52 million
(realised gain in the year: £1.20 million). This investment generated proceeds over the life of the investment of £6.50 million compared
to original cost of £1.21 million, which is a multiple of cost of 5.4x and an IRR of 33.2%.
MBI
Publishing and events
business
January 2015
to
June 2022
£8.23 million
2.2x cost
The Company realised its investment in MBI for £6.02 million (realised gain in the year: £1.82 million) including deferred proceeds
received since completion. Total proceeds received over the life of the investment were £8.23 million compared to an original
investment cost of £3.67 million, representing a multiple on cost of 2.2x and an IRR of 13.7%.
Environmental, Social, Governance
considerations
The novation of the investment advisory
agreement to Gresham House has
enabled the Company to benefit from a
dedicated team which is focused on
sustainability tasked with implementing
the highest industry standards in this
area. Under the new enlarged
investment team, each investment
executive is responsible for their own
individual ESG objectives in support of
the wider overarching ESG goals of the
Investment Adviser. For further details,
Gresham House published its second
Sustainable Investment Report in April
2022, which can be found on its website
at: www.greshamhouse.com.
Outlook
With inflation, political uncertainty and
the increasing threat of recession
impacting consumer confidence and
business investment, the number of UK
businesses experiencing financial stress
is set to increase. This will impact all
sectors and businesses to varying
degrees and may present attractive
opportunities for a selective investor
with the advantage of being able to take
a longer term view such as your VCT.
However, the economic backdrop will
also impact existing portfolio companies
and falls largely outside of the
experience of this generation of
management teams and advisers.
Markets are volatile and uncertain and
business planning is particularly difficult.
As such, the experience of seasoned
investment managers will be
increasingly important in the coming
year as they seek to support their
portfolio management teams in
navigating through some particularly
challenging short-term trading
conditions. The VCT has ample liquidity
to provide further support to its portfolio
businesses through this period and is
keen to make such investments where
there is a commercial case to do so over
the medium-long term.
Gresham House Asset Management
Limited
Investment Adviser
16 December 2022
Investments by market sector at valuation
Investments by value remain diversified across a number of sectors, primarily in direct-to-consumer/retailers, industrial support
services and software and computer services.
0.8%
30 September 2022 30 September 2021
0% 20% 25%
30%35% 40% 45%
10%5% 15%
0.7%
0.7%
44.2%
37.0%
16.3%
21.0%
23.6%
31.4%
0.5%
1.2%
1.1%
4.7%
0.0%
0.0%
2.0%
General industrials
Healthcare Equipment & Services
Direct-to-consumer/retailers
Travel and leisure
Consumer services
Leisure goods
Industrial support services
Software and computer services
Industrial engineering
Construction and materials
Technology, hardware & equiptment
Media
1.8%
1.6%
3.8%
50%
4.9%
0.9%
Food producers
1.0%
0.1%
0.1%
0.6%
0.0%
Age of the portfolio at valuation
20212021
< 1 year
1 - 2 years
2 - 3 years
3 - 4 years
4 - 5 years
> 5 years
20222022
6.1%
10.1%
4.0%
19.6%
59.1%
12.5%
1.7%
1.1%
11.2%
13.9%
3.5%
57.2%
20212021
MBO
Growth Capital
AIM
20222022
8.3%
19.1%
72.6%
86.9%
8.2%
4.9%
Type of investment transaction at valuation
20212021
< 1 year
1 - 2 years
2 - 3 years
3 - 4 years
4 - 5 years
> 5 years
20222022
6.1%
10.1%
4.0%
19.6%
59.1%
12.5%
1.7%
1.1%
11.2%
13.9%
3.5%
57.2%
20212021
MBO
Growth Capital
AIM
20222022
8.3%
19.1%
72.6%
86.9%
8.2%
4.9%
16
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
17
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
This page has been left blank intentionally.
18
The Income & Growth VCT plc Annual Report & Financial Statements 2022
MPB Group Limited
www.mpb.com
Cost £1,511,000
Valuation £7,335,000
Basis of valuation
Revenue multiple
Equity % held
4.5%
Income receivable in year
Nil
Business
Online marketplace for
photographic and video equipment
Location
Brighton
Original transaction
Growth capital
Audited financial information
Year ended 31 March 2022
Turnover £97,793,000
Operating loss £(4,959,000)
Net assets £25,624,000
Year ended 31 March 2021
Turnover £64,888,000
Operating loss £(911,000)
Net assets £31,267,000
Movements during the year
None.
Principal investments in the Portfolio at 30 September 2022
Preservica Limited
www.preservica.com
Cost £4,675,000
Valuation £13,544,000
Basis of valuation
Revenue multiple
Equity % held
18.1%
Income receivable in year
£108,934
Business
Seller of proprietary digital
archiving software
Location
Abingdon, Oxfordshire
Original transaction
Growth capital
Audited financial information
Year ended 31 March 2022
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £(1,001,000)
Year ended 31 March 2021
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £(3,057,000)
Movements during the year
Follow on investment of £1.71 million.
EOTH Limited
(trading as Rab and Lowe Alpine)
www.equipuk.com
Cost £1,383,000
Valuation £7,149,000
Basis of valuation
Earnings multiple
Equity % held
2.5%
Income receivable in year
£1,077,811
Business
Distributor of branded outdoor
equipment and clothing including
the Rab and Lowe Alpine brands
Location
Alfreton, Derbyshire
Original transaction
Growth capital
Audited financial information
Year ended 31 January 2022
Turnover £95,790,000
Operating profit £20,360,000
Net assets £45,230,000
Year ended 31 January 2021
Turnover £61,258,000
Operating profit £8,241,000
Net assets £32,711,000
Movements during the year
None.
Strategic Report
19
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
My Tutorweb Limited
www.mytutor.co.uk
Cost £3,362,000
Valuation £5,042,000
Basis of valuation
Revenue multiple
Equity % held
7.2%
Income receivable in year
Nil
Business
Digital marketplace connecting
school pupils seeking one-to-one
tutoring with tutors
Location
London
Original transaction
Growth capital
Financial information (unaudited)
Year ended 31 December 2020
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net liabilities £2,953,000
Year ended 31 December 2019
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £1,399,000
Movements during the year
None.
Strategic Report
Bella & Duke Limited
www.bellaandduke.com
Cost £1,324,000
Valuation £3,688,000
Basis of valuation
Revenue multiple
Equity % held
6.6%
Income receivable in year
Nil
Business
A premium frozen raw dog food
provider
Location
Edinburgh
Original transaction
Growth capital
Audited financial information
Year ended 31 March 2022
Turnover £19,271,000
Operating loss £(2,024,000)
Net assets £2,998,000
Year ended 31 March 2021
Turnover £11,230,000
Operating loss £(1,861,000)
Net assets £1,024,000
Movements during the year
None.
Master Removers Group 2019
Limited
www.masterremovers.co.uk
Cost £465,000
Valuation £4,244,000
Basis of valuation
Earnings multiple
Equity % held
8.8%
Income receivable in year
£202,901
Business
A specialist logistics, storage and
removals business
Location
London
Original transaction
Growth capital
Audited financial information
Period ended 30 September 2021
Turnover £38,530,000
Operating loss £8,694,000
Net assets £16,378,000
Year ended 30 September 2020
Turnover £26,984,000
Operating loss £4,143,000
Net assets £14,286,000
Movements during the year
None.
Financial information above and opposite is derived from publicly available Report and accounts. The valuation of each investee
company is derived in line with the valuation methodology detailed in Note 9 and is typically based upon each investee
company’s latest management accounts information not yet disclosed to public sources.
Further details of the investments in the portfolio may be found on the Mobeus VCTs’ website: www.mobeusvcts.co.uk.
Operating profit is stated before charging depreciation and amortisation, where appropriate, for all investee companies.
20
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Principal investments in the Portfolio at 30 September 2022
IDOX plc
www.idoxgroup.com
Cost £454,000
Valuation £2,692,000
Basis of valuation
Bid price (AIM quoted)
Equity % held
0.9%
Income receivable in year
£16,000
Business
Developer and supplier of
knowledge management products
Location
London
Original transaction
Development capital
Audited financial information
Year ended 31 October 2021
Turnover £62,185,000
Operating profit £19,519,000
Net assets £60,810,000
Year ended 31 October 2020
Turnover¹ £57,284,000
Operating profit¹ £17,238,000
Net assets £46,958,000
¹ Restated figures
Movements during the year
None.
Strategic Report
Virgin Wines UK plc
www.virginwines.co.uk
Cost £65,000
Valuation £3,158,000
Basis of valuation
Bid price (AIM quoted)
Equity % held
11.8%
Income receivable in year
Nil
Business
Online wine retailer
Location
Norwich
Original transaction
Management buyout
Audited financial information
Year ended 30 June 2022
Turnover £69,152,000
Operating profit £6,134,000
Net assets £22,073,000
Year ended 30 June 2021
Turnover £73,634,000
Operating profit £3,468,000
Net assets £17,627,000
Movements during the year
None.
End Ordinary Group Limited
(trading as Buster and Punch)
www.busterandpunch.com
Cost £2,047,000
Valuation £2,827,000
Basis of valuation
Earnings multiple
Equity % held
10.6%
Income receivable in year
Nil
Business
Industrial inspired lighting and
interiors retailer
Location
Stamford
Original transaction
Growth capital
Audited financial information
Year ended 31 March 2021
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £5,614,000
Year ended 31 March 2020
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £1,679,000
Movements during the year
None.
21
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Vivacity Labs Limited
www.vivacitylabs.com
Cost £2,094,000
Valuation £2,094,000
Basis of valuation
Revenue multiple
Equity % held
7.6%
Income receivable in year
Nil
Business
Provider of artificial intelligence &
urban traffic control systems
Location
London
Original transaction
Growth capital
Financial information (unaudited)
Year ended 31 December 2021
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £3,954,000
Year ended 31 December 2020
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £632,000
Movements during the year
Follow on investment of £0.84
million.
Data Discovery Solutions Limited
(trading as Active Navigation)
www.activenavigation.com
Cost £1,976,000
Valuation £2,475,000
Basis of valuation
Revenue multiple
Equity % held
10.0%
Income receivable in year
Nil
Business
Provider of a global market leading
file analysis software for information
governance, security and
compliance
Location
Winchester
Original transaction
Growth capital
Audited financial information
Year ended 29 June 2021
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £3,940,000
Year ended 29 June 2020
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets -
Movements during the year
Follow on investment of £0.43 million.
Arkk Consulting Limited
www.www.arkksolutions.com
Cost £2,182,000
Valuation £2,427,000
Basis of valuation
Revenue multiple
Equity % held
9.2%
Income receivable in year
£50,467
Business
Provider of services and software
to enable organisations to remain
compliant with regulatory reporting
requirements
Location
London
Original transaction
Growth capital
Audited Financial information
Year ended 31 December 2021
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £(1,056,000)
Year ended 31 December 2020
Turnover Not disclosed
Operating profit/
(loss) Not disclosed
Net assets £(428,000)
Movements during the year
None.
Strategic Report
Financial information above and opposite is derived from publicly available Report and accounts. The valuation of each investee
company is derived in line with the valuation methodology detailed in Note 9 and is typically based upon each investee
company’s latest management accounts information not yet disclosed to public sources.
Further details of the investments in the portfolio may be found on the Mobeus VCTs’ website: www.mobeusvcts.co.uk.
Operating profit is stated before charging depreciation and amortisation, where appropriate, for all investee companies.
22
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Ordinary shares Other investments
1
Total
Cost
at 30
September
2022
£
Total
Valuation
at 30
September
2021
£
Additional
investments
£
Total
Valuation at
30 September
2022
£
Interest
receivable in
year
£
Dividends
receivable in
year
£
Unrealised
gains/(losses)
in year
£
Realised
gains/(losses)
in year
£
Net
proceeds
£
% of
equity
held
2,3
% of
portfolio
by value
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Preservica Limited
Seller of proprietary digital archiving software
1,870,014 10,605,723 2,805,149 2,938,484 4,675,163 8,986,207 1,714,264 13,544,207 108,934 - 2,843,736 - - 18.1% 18.5%
MPB Group Limited
Online marketplace for used photographic equipment
1,510,992 7,335,235 - - 1,510,992 7,466,511 - 7,335,235 - - (131,276) - - 4.5% 10.0%
EOTH Limited (trading as Equip Outdoor Technologies)
Distributor of branded outdoor equipment and clothing
including the Rab and Lowe Alpine brands
138,331 5,793,740 1,244,982 1,355,336 1,383,313 5,427,729 - 7,149,076 132,425 945,386 1,721,347 - - 2.5% 9.8%
My TutorWeb Limited (trading as MyTutor)
Digital marketplace connecting school pupils seeking one-
to-one online tutoring
3,361,778 5,042,133 - - 3,361,778 8,640,371 - 5,042,133 - - (3,598,238) - - 7.2% 6.9%
Master Removers Group 2019 Limited (trading as Anthony
Ward Thomas, Bishopsgate and Aussie Man & Van)
A specialist logistics, storage and removals business
464,658 4,244,308 - - 464,658 2,847,390 - 4,244,308 - 202,901 1,396,918 - - 8.8% 5.8%
Bella & Duke Limited
A premium frozen raw dog food provider
1,323,745 3,688,457 - - 1,323,745 3,165,212 - 3,688,457 - - 523,245 - - 6.6% 5.0%
Virgin Wines UK plc
Online wine retailer
65,288 3,158,366 - - 65,288 12,830,864 - 3,158,366 - - (9,672,498) - - 11.8% 4.3%
End Ordinary Group Limited (trading as Buster and Punch)
Industrial inspired lighting and interiors retailer
2,046,612 2,826,776 - - 2,046,612 4,470,852 - 2,826,776 - - (1,644,076) - - 10.6% 3.9%
I-Dox plc
4
Developer and supplier of knowledge management
products
453,881 2,691,797 - - 453,881 2,916,088 - 2,691,797 - 16,000 (224,291) - - 0.9% 3.7%
Data Discovery Solutions Limited (trading as Active
Navigation)
Provider of global market leading file analysis software for
information governance, security and compliance
1,975,681 2,475,414 - - 1,975,681 3,087,000 432,181 2,475,414 - - (1,043,767) - - 10.0% 3.4%
Arkk Consulting Limited (trading as Arkk Solutions)
Provider of services and software to enable organisations to
remain compliant with regulatory reporting requirements
915,607 993,604 1,266,580 1,433,423 2,182,187 2,264,597 - 2,427,027 50,467 - 162,430 - - 9.2% 3.3%
Vivacity Labs Limited
Provider of artificial intelligence & urban traffic control
systems
2,093,538 2,093,538 - - 2,093,538 1,250,760 842,778 2,093,538 - - - - - 7.6% 2.9%
Tharstern Group Limited
Software based management Information systems for the
printing industry
451,328 549,063 1,002,950 1,436,795 1,454,278 1,668,487 - 1,985,858 118,166 - 317,371 - - 17.0% 2.7%
Manufacturing Services Investment Limited (trading as
Wetsuit Outlet)
Online retailer in the water sports market
1,602,591 23,922 1,602,591 1,602,591 3,205,182 3,202,735 - 1,626,513 40,833 - (1,576,222) - - 8.8% 2.2%
Rota Geek Limited
Provider of cloud based enterprise software that uses data-
driven technologies to help retail and leisure organisations
schedule staff
1,250,800 916,542 312,700 312,700 1,563,500 962,085 312,700 1,229,242 9,252 - (45,543) - - 6.4% 1.7%
Connect Childcare Group Limited
Nursery management software provider
578,614 635,427 578,600 578,600 1,157,214 1,390,148 - 1,214,027 57,860 - (176,121) (1,736) - 4.2% 1.7%
Investment Portfolio Summary
for the year ended 30 September 2022
Notes
1
‘Other investments’ comprise principally loan stock instruments, and/or relatively small amounts of preference shares.
2
The percentage of equity held, and the amounts co-invested, in these companies by funds managed by Gresham House Asset Management Limited are
disclosed in Note 10 of the financial statements.
3
The percentage of equity held for these companies is the fully diluted figure, in the event that for example, management of the investee company
exercises share options where available.
4
Investment formerly managed by Nova Capital Management Limited until 31 August 2007.
Strategic Report
23
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Ordinary shares Other investments
1
Total
Cost
at 30
September
2022
£
Total
Valuation
at 30
September
2021
£
Additional
investments
£
Total
Valuation at
30 September
2022
£
Interest
receivable in
year
£
Dividends
receivable in
year
£
Unrealised
gains/(losses)
in year
£
Realised
gains/(losses)
in year
£
Net
proceeds
£
% of
equity
held
2,3
% of
portfolio
by value
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Preservica Limited
Seller of proprietary digital archiving software
1,870,014 10,605,723 2,805,149 2,938,484 4,675,163 8,986,207 1,714,264 13,544,207 108,934 - 2,843,736 - - 18.1% 18.5%
MPB Group Limited
Online marketplace for used photographic equipment
1,510,992 7,335,235 - - 1,510,992 7,466,511 - 7,335,235 - - (131,276) - - 4.5% 10.0%
EOTH Limited (trading as Equip Outdoor Technologies)
Distributor of branded outdoor equipment and clothing
including the Rab and Lowe Alpine brands
138,331 5,793,740 1,244,982 1,355,336 1,383,313 5,427,729 - 7,149,076 132,425 945,386 1,721,347 - - 2.5% 9.8%
My TutorWeb Limited (trading as MyTutor)
Digital marketplace connecting school pupils seeking one-
to-one online tutoring
3,361,778 5,042,133 - - 3,361,778 8,640,371 - 5,042,133 - - (3,598,238) - - 7.2% 6.9%
Master Removers Group 2019 Limited (trading as Anthony
Ward Thomas, Bishopsgate and Aussie Man & Van)
A specialist logistics, storage and removals business
464,658 4,244,308 - - 464,658 2,847,390 - 4,244,308 - 202,901 1,396,918 - - 8.8% 5.8%
Bella & Duke Limited
A premium frozen raw dog food provider
1,323,745 3,688,457 - - 1,323,745 3,165,212 - 3,688,457 - - 523,245 - - 6.6% 5.0%
Virgin Wines UK plc
Online wine retailer
65,288 3,158,366 - - 65,288 12,830,864 - 3,158,366 - - (9,672,498) - - 11.8% 4.3%
End Ordinary Group Limited (trading as Buster and Punch)
Industrial inspired lighting and interiors retailer
2,046,612 2,826,776 - - 2,046,612 4,470,852 - 2,826,776 - - (1,644,076) - - 10.6% 3.9%
I-Dox plc
4
Developer and supplier of knowledge management
products
453,881 2,691,797 - - 453,881 2,916,088 - 2,691,797 - 16,000 (224,291) - - 0.9% 3.7%
Data Discovery Solutions Limited (trading as Active
Navigation)
Provider of global market leading file analysis software for
information governance, security and compliance
1,975,681 2,475,414 - - 1,975,681 3,087,000 432,181 2,475,414 - - (1,043,767) - - 10.0% 3.4%
Arkk Consulting Limited (trading as Arkk Solutions)
Provider of services and software to enable organisations to
remain compliant with regulatory reporting requirements
915,607 993,604 1,266,580 1,433,423 2,182,187 2,264,597 - 2,427,027 50,467 - 162,430 - - 9.2% 3.3%
Vivacity Labs Limited
Provider of artificial intelligence & urban traffic control
systems
2,093,538 2,093,538 - - 2,093,538 1,250,760 842,778 2,093,538 - - - - - 7.6% 2.9%
Tharstern Group Limited
Software based management Information systems for the
printing industry
451,328 549,063 1,002,950 1,436,795 1,454,278 1,668,487 - 1,985,858 118,166 - 317,371 - - 17.0% 2.7%
Manufacturing Services Investment Limited (trading as
Wetsuit Outlet)
Online retailer in the water sports market
1,602,591 23,922 1,602,591 1,602,591 3,205,182 3,202,735 - 1,626,513 40,833 - (1,576,222) - - 8.8% 2.2%
Rota Geek Limited
Provider of cloud based enterprise software that uses data-
driven technologies to help retail and leisure organisations
schedule staff
1,250,800 916,542 312,700 312,700 1,563,500 962,085 312,700 1,229,242 9,252 - (45,543) - - 6.4% 1.7%
Connect Childcare Group Limited
Nursery management software provider
578,614 635,427 578,600 578,600 1,157,214 1,390,148 - 1,214,027 57,860 - (176,121) (1,736) - 4.2% 1.7%
Strategic Report
24
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Ordinary shares Other investments
1
Total
Cost
at 30
September
2022
£
Total
Valuation
at 30
September
2021
£
Additional
investments
£
Total
Valuation at
30 September
2022
£
Interest
receivable in
year
£
Dividends
receivable in
year
£
Unrealised
gains/(losses)
in year
£
Realised
gains/(losses)
in year
£
Net
proceeds
£
% of
equity
held
2,3
% of
portfolio
by value
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Bleach London Holdings Limited
Hair colourants brand
1,332,831 1,100,240 - - 1,332,831 1,335,917 458,529 1,100,240 3,049 - (694,206) - - 5.6% 1.5%
IPV Limited
Provider of media asset software
954,674 954,674 - - 954,674 954,674 - 954,674 - - - - - 8.5% 1.3%
Legatics Limited
SaaS LegalTech software provider
909,330 909,330 - - 909,330 909,330 - 909,330 - - - - - 8.3% 1.2%
Pets’ Kitchen Limited (trading as Vet’s Klinic)
Veterinary clinics
482,400 482,400 361,800 361,800 844,200 844,200 - 844,200 27,209 - - - - 6.0% 1.2%
Aquasium Technology Limited
4
Manufacturing and marketing of bespoke electron beam
welding and vacuum furnace equipment
166,667 817,351 - - 166,667 478,072 - 817,351 - - 339,279 - - 16.7% 1.1%
Proximity Insight Holdings Limited
Super-App used by customer-facing teams of brands and
retailers to engage, inspire and transact with customers
807,000 807,000 - - 807,000 - 807,000 807,000 - - - - - 3.3% 1.1%
Caledonian Leisure Limited
Provider of UK leisure and experience breaks
449,251 461,263 299,498 306,088 748,749 449,251 299,498 767,351 15,410 - 18,602 - - 9.0% 1.1%
Spanish Restaurant Group Limited (trading as Tapas
Revolution)
Spanish restaurant chain
543,483 - 1,086,750 669,502 1,630,233 979,122 - 669,502 59,233 - (309,620) - - 9.0% 0.9%
Focal Point Positioning Limited
A positioning technology company
664,921 664,921 - - 664,921 - 664,921 664,921 - - - - - 0.9% 0.9%
Northern Bloc Ice Cream Limited
Supplier of premium vegan ice cream
662,340 654,951 - - 662,340 506,869 189,240 654,951 - - (41,158) - - 9.8% 0.9%
Lads Store Limited (trading as Bidnamic)
SaaS platform for optimisation of search engine marketing
spend
637,383 637,383 - - 637,383 - 637,383 633,147 - - (4,236) - - 1.5% 0.9%
Orri Limited
An intensive day care provider for adults with eating
disorders
581,700 581,700 - - 581,700 - 581,700 581,700 - - - - - 4.7% 0.8%
CGI Creative Graphics International Limited
Vinyl graphics to global automotive, recreation vehicle and
aerospace markets
639,084 - 1,304,864 495,475 1,943,948 587,292 - 495,475 - - (91,817) - - 8.4% 0.7%
RDL Corporation Limited
Recruitment consultants within the pharmaceutical, business
intelligence and IT industries
250,752 - 1,190,915 204,430 1,441,667 322,033 - 204,430 59,311 - (117,603) - - 12.8% 0.3%
Parsley Box Group plc(formerly Parsley Box Limited)
Supplier of home delivered ambient ready meals targeting
the over 60s
874,001 167,173 - - 874,001 1,084,367 - 167,173 - - (917,194) - - 2.6% 0.2%
Jablite Holdings Limited (in members’ voluntary
liquidation)
Manufacturer of expanded polystyrene products
450,900 - 47,890 65,779 498,790 65,779 - 65,779 21,591 - - - - 12.1% 0.1%
Corero Network Security plc
4
Provider of e-business technologies
600,000 10,805 - - 600,000 10,314 - 10,805 - - 491 - - 0.0% 0.0%
Muller EV Limited (trading as Andersen EV) (in
administration)
Provider of premium electric vehicle (EV) chargers
950,997 - - - 950,997 317,000 396,247 - 156 - - (713,247) - 14.3% 0.0%
Investment Portfolio Summary
for the year ended 30 September 2022
Strategic Report
Notes
1
‘Other investments’ comprise principally loan stock instruments, and/or relatively small amounts of preference shares.
2
The percentage of equity held, and the amounts co-invested, in these companies by funds managed by Gresham House Asset Management Limited are
disclosed in Note 10 of the financial statements.
3
The percentage of equity held for these companies is the fully diluted figure, in the event that for example, management of the investee company
exercises share options where available.
4
Investment formerly managed by Foresight Group LLP up to various dates ending on or before 10 March 2009.
25
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Ordinary shares Other investments
1
Total
Cost
at 30
September
2022
£
Total
Valuation
at 30
September
2021
£
Additional
investments
£
Total
Valuation at
30 September
2022
£
Interest
receivable in
year
£
Dividends
receivable in
year
£
Unrealised
gains/(losses)
in year
£
Realised
gains/(losses)
in year
£
Net
proceeds
£
% of
equity
held
2,3
% of
portfolio
by value
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Bleach London Holdings Limited
Hair colourants brand
1,332,831 1,100,240 - - 1,332,831 1,335,917 458,529 1,100,240 3,049 - (694,206) - - 5.6% 1.5%
IPV Limited
Provider of media asset software
954,674 954,674 - - 954,674 954,674 - 954,674 - - - - - 8.5% 1.3%
Legatics Limited
SaaS LegalTech software provider
909,330 909,330 - - 909,330 909,330 - 909,330 - - - - - 8.3% 1.2%
Pets’ Kitchen Limited (trading as Vet’s Klinic)
Veterinary clinics
482,400 482,400 361,800 361,800 844,200 844,200 - 844,200 27,209 - - - - 6.0% 1.2%
Aquasium Technology Limited
4
Manufacturing and marketing of bespoke electron beam
welding and vacuum furnace equipment
166,667 817,351 - - 166,667 478,072 - 817,351 - - 339,279 - - 16.7% 1.1%
Proximity Insight Holdings Limited
Super-App used by customer-facing teams of brands and
retailers to engage, inspire and transact with customers
807,000 807,000 - - 807,000 - 807,000 807,000 - - - - - 3.3% 1.1%
Caledonian Leisure Limited
Provider of UK leisure and experience breaks
449,251 461,263 299,498 306,088 748,749 449,251 299,498 767,351 15,410 - 18,602 - - 9.0% 1.1%
Spanish Restaurant Group Limited (trading as Tapas
Revolution)
Spanish restaurant chain
543,483 - 1,086,750 669,502 1,630,233 979,122 - 669,502 59,233 - (309,620) - - 9.0% 0.9%
Focal Point Positioning Limited
A positioning technology company
664,921 664,921 - - 664,921 - 664,921 664,921 - - - - - 0.9% 0.9%
Northern Bloc Ice Cream Limited
Supplier of premium vegan ice cream
662,340 654,951 - - 662,340 506,869 189,240 654,951 - - (41,158) - - 9.8% 0.9%
Lads Store Limited (trading as Bidnamic)
SaaS platform for optimisation of search engine marketing
spend
637,383 637,383 - - 637,383 - 637,383 633,147 - - (4,236) - - 1.5% 0.9%
Orri Limited
An intensive day care provider for adults with eating
disorders
581,700 581,700 - - 581,700 - 581,700 581,700 - - - - - 4.7% 0.8%
CGI Creative Graphics International Limited
Vinyl graphics to global automotive, recreation vehicle and
aerospace markets
639,084 - 1,304,864 495,475 1,943,948 587,292 - 495,475 - - (91,817) - - 8.4% 0.7%
RDL Corporation Limited
Recruitment consultants within the pharmaceutical, business
intelligence and IT industries
250,752 - 1,190,915 204,430 1,441,667 322,033 - 204,430 59,311 - (117,603) - - 12.8% 0.3%
Parsley Box Group plc(formerly Parsley Box Limited)
Supplier of home delivered ambient ready meals targeting
the over 60s
874,001 167,173 - - 874,001 1,084,367 - 167,173 - - (917,194) - - 2.6% 0.2%
Jablite Holdings Limited (in members’ voluntary
liquidation)
Manufacturer of expanded polystyrene products
450,900 - 47,890 65,779 498,790 65,779 - 65,779 21,591 - - - - 12.1% 0.1%
Corero Network Security plc
4
Provider of e-business technologies
600,000 10,805 - - 600,000 10,314 - 10,805 - - 491 - - 0.0% 0.0%
Muller EV Limited (trading as Andersen EV) (in
administration)
Provider of premium electric vehicle (EV) chargers
950,997 - - - 950,997 317,000 396,247 - 156 - - (713,247) - 14.3% 0.0%
Strategic Report
26
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Investment Portfolio Summary
for the year ended 30 September 2022
Ordinary shares Other investments
1
Total
Cost
at 30
September
2022
£
Total
Valuation
at 30
September
2021
£
Additional
investments
£
Total
Valuation at
30 September
2022
£
Interest
receivable in
year
£
Dividends
receivable in
year
£
Unrealised
gains/(losses)
in year
£
Realised
gains/(losses)
in year
£
Net
proceeds
£
% of
equity
held
2,3
% of
portfolio
by value
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Kudos Innovations Limited
Online platform that provides and promotes academic
research dissemination
472,500 - - - 472,500 200,340 - - - - (200,340) - - 3.4% 0.0%
Oxonica Limited
5
International nanomaterials group
2,524,527 - - - 2,524,527 - - - - - - - - 10.6% 0.0%
Veritek Global Holdings Limited
Maintenance of imaging equipment
61,522 - 2,228,337 - 2,289,859 - - - - - - - - 21.7% 0.0%
BookingTek Limited
Software for hotel groups
779,155 - - - 779,155 - - - - - - - - 4.7% 0.0%
Racoon International Group Limited
Supplier of hair extensions, hair care products and training
568,664 - 87,187 - 655,851 - - - - - - - - 14.3% 0.0%
NexxtDrive Limited/Nexxt E-drive Limited
4
Developer and exploiter of mechanical transmission
technologies
487,014 - - - 487,014 - - - - - - - - 1.0% 0.0%
Biomer Technology Limited
6
Developer of biomaterials for medical devices
137,170 - - - 137,170 - - - - - - - - 3.5% 0.0%
Disposed in year
Vian Marketing Limited (trading as Red Paddle Co)
Design, manufacture and sale of stand-up paddleboards and
windsurfing sails
- - - - - 4,324,963 - - 6,648 - - 1,197,680 5,522,643 14.6% 0.0%
Media Business Insight Holdings Limited
A publishing and events business focused on the creative
production industries
- - - - - 4,199,330 - - 702,807 - - 1,824,416 6,023,746 21.2% 0.0%
Proceeds from the companies realised in previous years - - - - - - - - - - - 9,993 8,257 0.0% 0.0%
Total 37,091,724 61,319,000 15,240,793 11,761,003 52,512,517 88,145,889 7,336,441 73,080,003 1,413,351 1,164,287 (13,164,787) 2,317,106 11,554,646 100.0%
Portfolio split by type
Growth focused portfolio
7
30,234,927 54,091,618 9,558,650 9,558,524 39,793,577 65,067,630 7,336,441 63,650,142 511,477 1,148,287 (3,715,719) 482,697 5,522,643 87.1%
MBO focused portfolio
7
6,856,797 7,227,382 5,862,143 2,202,479 12,718,940 23,078,259 - 9,429,861 901,875 16,000 (9,449,068) 1,834,409 6,034,003 12.9%
Total 37,091,724 61,319,000 15,420,793 11,761,003 52,512,517 88,145,889 7,336,441 73,080,003 1,413,351 1,164,287 (13,164,787) 2,317,106 11,554,646 100.0%
Strategic Report
Notes
1
‘Other investments’ comprise principally loan stock instruments, and/or relatively small amounts of preference shares.
2
The percentage of equity held, and the amounts co-invested, in these companies by funds managed by Gresham House Asset Management Limited are
disclosed in Note 10 of the financial statements.
3
The percentage of equity held for these companies is the fully diluted figure, in the event that for example, management of the investee company
exercises share options where available.
4
Investment formerly managed by Nova Capital Management Limited until 31 August 2007.
5
Investment formerly managed by Foresight Group LLP up to various dates ending on or before 10 March 2009.
6
Investment formerly managed by Nova Capital Management Limited until 31 August 2007 and by Foresight Group until various dates ending on or before
10 March 2009.
7
The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in
nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy.
27
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Ordinary shares Other investments
1
Total
Cost
at 30
September
2022
£
Total
Valuation
at 30
September
2021
£
Additional
investments
£
Total
Valuation at
30 September
2022
£
Interest
receivable in
year
£
Dividends
receivable in
year
£
Unrealised
gains/(losses)
in year
£
Realised
gains/(losses)
in year
£
Net
proceeds
£
% of
equity
held
2,3
% of
portfolio
by value
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Cost
at 30
September
2022
£
Valuation
at 30
September
2022
£
Kudos Innovations Limited
Online platform that provides and promotes academic
research dissemination
472,500 - - - 472,500 200,340 - - - - (200,340) - - 3.4% 0.0%
Oxonica Limited
5
International nanomaterials group
2,524,527 - - - 2,524,527 - - - - - - - - 10.6% 0.0%
Veritek Global Holdings Limited
Maintenance of imaging equipment
61,522 - 2,228,337 - 2,289,859 - - - - - - - - 21.7% 0.0%
BookingTek Limited
Software for hotel groups
779,155 - - - 779,155 - - - - - - - - 4.7% 0.0%
Racoon International Group Limited
Supplier of hair extensions, hair care products and training
568,664 - 87,187 - 655,851 - - - - - - - - 14.3% 0.0%
NexxtDrive Limited/Nexxt E-drive Limited
4
Developer and exploiter of mechanical transmission
technologies
487,014 - - - 487,014 - - - - - - - - 1.0% 0.0%
Biomer Technology Limited
6
Developer of biomaterials for medical devices
137,170 - - - 137,170 - - - - - - - - 3.5% 0.0%
Disposed in year
Vian Marketing Limited (trading as Red Paddle Co)
Design, manufacture and sale of stand-up paddleboards and
windsurfing sails
- - - - - 4,324,963 - - 6,648 - - 1,197,680 5,522,643 14.6% 0.0%
Media Business Insight Holdings Limited
A publishing and events business focused on the creative
production industries
- - - - - 4,199,330 - - 702,807 - - 1,824,416 6,023,746 21.2% 0.0%
Proceeds from the companies realised in previous years - - - - - - - - - - - 9,993 8,257 0.0% 0.0%
Total 37,091,724 61,319,000 15,240,793 11,761,003 52,512,517 88,145,889 7,336,441 73,080,003 1,413,351 1,164,287 (13,164,787) 2,317,106 11,554,646 100.0%
Portfolio split by type
Growth focused portfolio
7
30,234,927 54,091,618 9,558,650 9,558,524 39,793,577 65,067,630 7,336,441 63,650,142 511,477 1,148,287 (3,715,719) 482,697 5,522,643 87.1%
MBO focused portfolio
7
6,856,797 7,227,382 5,862,143 2,202,479 12,718,940 23,078,259 - 9,429,861 901,875 16,000 (9,449,068) 1,834,409 6,034,003 12.9%
Total 37,091,724 61,319,000 15,420,793 11,761,003 52,512,517 88,145,889 7,336,441 73,080,003 1,413,351 1,164,287 (13,164,787) 2,317,106 11,554,646 100.0%
Strategic Report
28
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Investment Policy
The Company’s policy is to invest
primarily in a diverse portfolio of UK
unquoted companies.
Asset Mix and Diversification
The Company will seek to make
investments in UK unquoted companies
in accordance with the requirements of
prevailing VCT legislation.
Investments are made selectively across
a wide variety of sectors, principally in
established companies.
Investments are generally structured as
part loan and part equity in order to
receive regular income and to generate
capital gain from realisations.
There are a number of conditions within
the VCT legislation which need to be
met by the Company and which may
change from time to time.
No single investment may represent
more than 15% (by VCT tax value) of the
Company’s total investments at the date
of investment.
Save as set out above, the Company’s
other investments are held in cash and
liquid funds.
Liquidity
The Company’s cash and liquid funds
are held in a portfolio of readily
realisable interest bearing investments,
deposit and current accounts, of varying
maturities, subject to the overriding
criterion that the risk of loss of capital be
minimised.
Borrowing
The Company’s Articles of Association
permit borrowing of up to 10% of the
adjusted capital and reserves (as
defined therein). However, the Company
has never borrowed and the Board
would only consider doing so in
exceptional circumstances.
Other Key Policies
In addition to the Investment Policy, the
Board has put in place the following
policies to be applied to meet the
Company’s overall Objective and to
cover specific areas of the Company’s
business.
Cash available for investment and
liquidity
The Company’s cash and liquid
resources are held in a range of
instruments of varying maturities
including liquid, low risk Money Market
Funds and bank deposits, subject to the
overriding criterion that the risk of loss of
capital be minimised. The Company has
participated in the Mobeus VCTs’
fundraisings, when launched, to maintain
sufficient funds to meet the day-to-day
expenses of the Company, dividend
distributions and purchases of the
Company’s own shares whilst
maintaining the ability to invest in
attractive opportunities.
Further policies
In addition to the Investment Policy
above and the policies on payment of
dividends and share buybacks, which
are discussed earlier in this Strategic
Report, the Company has adopted a
number of additional policies relating to:
●● Environmental and social
responsibility
●● Global greenhouse gas emissions
●● Human rights
●● Diversity
●● Anti-bribery
●● Anti-tax evasion
●● Whistleblowing
●● Financial risk management
Further details of these policies are set
out in the Directors’ Report on pages 36
to 37.
Strategic Report
29
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
Stakeholder Engagement and Directors’ Duties
The Board has discussed the discharge of their Director’s duties under Section 172 of the Companies Act 2006 having regard to
the factors set out under Provision 5 of the Association of Investment Companies (AIC) Code and in line with the UK Corporate
Governance Code. The views of and the impact of the Company’s activities on the key stakeholders are an important
consideration for the Board when making relevant decisions. The Board, in normal circumstances, engages directly with
stakeholder groups through either regular or annual meetings and investor presentations to assist the directors in understanding
the issues to which they must have regard.
The table below sets out the interests of key stakeholders that have been considered throughout the year during the Board’s
discussions and in decision making.
Stakeholders Engagement Type Outcome
Shareholders
The key mechanisms of Shareholder engagement is:
●● Annual General Meeting
●● Annual, Interim Reports and Interim Management
Statements
●● Annual Investor Events
●● RNS Announcements
●● Website
●● Offer for subscription
Shareholders are now able to attend the company’s
AGM in person which is usually held in February,
There will also be a live stream providing access to
view the meeting remotely, though only Shareholders
physically attending will be able to formally take part
in the meeting and vote on resolutions by a show of
hands. Shareholders unable to attend are therefore
encouraged to submit their votes on resolutions via
proxy forms ahead of the meeting.
Shareholders are provided with Annual and Interim
Reports in hard or soft copy according to their choice,
which are also available on the Company’s website.
Voluntary Interim Management Statements are
released in the quarters between reports to ensure
that Shareholders are kept up to date with events.
The website is an important source of information for
Shareholders and announcements are also regularly
made through the London Stock Exchange.
The Share buyback programme has continued to be
offered throughout the year. This provides
Shareholders with liquidity if they wish to sell their
shares, at a price close to the latest announced NAV
per share, the Board having considered the interests
of remaining Shareholders. Further details are
contained in the Chair’s Statement on page 4 and in
the Director’s Report on page 35.
Shareholders are welcome to contact the Chair or the
Investment Adviser by email as advised on page 87
of this Report.
The Annual Shareholder Event was held as a virtual
event and took place on 25 February 2022. A similar
event is planned for March 2023.
The Company seeks to create value for Shareholders
by generating good returns which are eventually
distributed to Shareholders as dividends. The
importance of tax-free dividends to Shareholders is
recognised by the Board and considered at each
Board meeting.
Following realisations and two successful fundraisings,
the liquidity level of the Company has remained strong
and is managed with the primary aim of preserving
capital, as discussed at each Board meeting. Liquidity
levels are managed after considering, inter alia,
applicable annual dividend commitments as well as
the provision of the buyback facility.
In maintaining the dividend policy, the Board
considered the payment of dividends and the
liquidity of the Company at each quarterly meeting
and between meetings if necessary; and during the
year the Board agreed to maintain the dividend policy
by the payment of two interim dividends.
30
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
Stakeholders Engagement Type Outcome
The Board, along with the three other Mobeus VCTs,
launched Offers for Subscription on each of
20January and 5 October 2022. Both Offers
received applications in excess of the initial amounts
and, where applicable, the over-allotment amounts.
In considering Offers for Subscription for the
2021/2022 and 2022/2023 tax years, the Board
reviewed and considered: the impact of dilution of
Shareholder’s holdings; the ability to adhere to the
dividend policy of the Company; the effect on the Net
Asset Value and the ability of the Company and its
liquidity levels to be able to meet HMRC’s VCT
investment rules and timeline; the costs involved in
issuing a prospectus and charges to Shareholders;
the risk to performance and the equal treatment of
investors across the four Mobeus VCTs and those
investors that the Company co-invests with.
In the second half of the financial year, a recruitment
process commenced for a new director following the
retirement of Helen Sinclair in February and the
Board having consisted of only two directors until a
new Non-Executive Director was appointed on
7November 2022. The Board considered, as part of
the process: diversity and inclusion; the additional
skills and perspective a new director could bring to
the Board; the costs of recruitment and charges to
Shareholders and the improved governance of an
independent director which it considered would
benefit all stakeholders.
Suppliers Including: Registrar, Broker, Auditor, Lawyer, Sponsor,
Banker and the VCT Status Adviser
The Investment Adviser regularly communicates with
each of the professional advisers and secures an
annual confirmation of the policies they have in place.
The Board review the performance of each provider
on an annual basis.
Government &
Regulators
The Board is committed to conducting business in line
with the appropriate laws and regulation. The Income &
Growth VCT plc does not provide financial
contributions to political parties or lobby groups
As a UK listed company the Board and Investment
Adviser comply with the Companies Act, the UKLA,
HMRC, UK Accounting Standards and FCA regulatory
requirements in addition to the Alternative Investment
Fund Managers Directive, to ensure the Company
can continue to trade. Non-compliance with the VCT
regulations in particular is viewed as a principal risk
for the Company. The Company continued to comply
with these regulations throughout the year and to the
date of this Report.
Investee
Companies
The Investment Adviser, on behalf of the Company,
provides support to the portfolio companies through
continued communications, providing assistance such
as the help of the Gresham House Talent Team.
The Board has delegated authority for the day-to-day
management of the Company to the Investment
Adviser and engages with the Investment Adviser in
setting, approving and overseeing the execution of
the business strategy and related policies.
The Board aims to have a diverse mix of companies
across a range of different sectors and regularly
reviews the composition of the portfolio.
The Investment Adviser reports at the Company’s
quarterly Board meetings on each of the portfolio
companies. Members of the Investment Adviser sit on
the majority of the portfolio companies’ boards. This
is to provide input on key matters such as advancing
the shareholder value agenda, ensuring class leading
corporate governance and encouraging best practice
in areas such as ESG.
Gresham House organises seminars and events that
involve portfolio companies to benefit from the
Gresham House network.
31
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Strategic Report
Stakeholders Engagement Type Outcome
Investment
Adviser
The Investment Adviser’s performance is vital for the
Company to deliver its investment strategy, meeting its
objectives and generating investment returns for
Shareholders, and is a crucial relationship for the
Board.
The Investment Adviser meets with the Board at each
quarterly meeting and is in frequent contact
throughout the periods in between meetings e.g. to
approve investment transactions. All key strategic
and operational topics are discussed in detail and a
close dialogue is maintained with the Board. The
Board take an active interest in the challenges faced
by the portfolio companies. The Board considers
each potential disposal based on the company’s
performance, market conditions and the offer(s) in its
re-appointment is dependent on the outcome of that
evaluation.
Principal and emerging risks
The Directors acknowledge the Board’s responsibilities for the Company’s internal control systems and have instigated systems
and procedures for identifying, evaluating and managing the significant risks faced by the Company. This includes a key risk
management review which takes place at each quarterly Board meeting. The principal and emerging risks identified by the
Board, a description of the possible consequences of each risk and how the Board manages the risk are set out below.
The risk profile of the Company changed as a consequence of the VCT regulations introduced in 2015. As the Company is
required to focus its investment on growth capital investments in younger companies it is anticipated that investment returns will
be more volatile and will have a higher risk profile. The Board remains confident that the Company and the Investment Adviser
will continue to adapt to changes in investment requirements and put in place appropriate resource to identify and make suitable
investments as has been experienced in the year under review.
The Board regularly sets and reviews policies for financial risk management and full details of these can be found in Note 16 to
the Financial Statements on pages 68 to 75. There have been no changes to the principal or emerging risks of the Company
during the year as listed below:
Risk Possible consequence How the Board manages risk
Investment
and liquidity
Investment in VCT qualifying earlier stage unquoted
small companies involves a higher degree of risk
than investment in fully listed companies. Smaller
companies often have limited product lines, markets
or financial resources and may be dependent for
their management on a smaller number of key
Individuals. External events or factors may have
more impact as are outside of their control. As the
securities of such smaller companies held by the
Company are unquoted, they are less liquid, which
may cause difficulties in valuing and realising these
securities.
●● The Boa
rd regularly reviews the Company’s
Strategy including its Investment Policy.
●● Careful selection, appropriate due diligence and
review of the diverse portfolio takes place on a
regular basis.
●● The Board seeks to ensure the Company has an
adequate level of liquidity at all times through
review at each board meeting.
●● A member of the Investment Adviser is usually
appointed to the board of an investee company
and regular monitoring reports are assessed by
the Investment Adviser.
●● Support
provided to the portfolio companies is
ongoing.
Loss of
approval as a
Venture
Capital Trust
A breach of the VCT Tax Rules may lead to the
Company losing its approval as a VCT, which would
result in qualifying Shareholders who have not held
their shares for the designated period having to
repay the income tax relief they obtained plus future
dividends paid by the Company would be subject to
taxation. The Company would also lose its
exemption from corporation tax on capital gains.
●● The Company’s VCT qualifying status is
continually reviewed by the Board and the
Investment Adviser and is reported to each
Board meeting.
●● The Board receives regular reports from its VCT
Status Adviser, Philip Hare & Associates LLP
who have been retained by the Board to monitor
the Company’s compliance with the VCT Rules.
32
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Strategic Report
Risk Possible consequence How the Board manages risk
Economic,
political and
other external
risks
Events such as the war in Ukraine, the COVID-19
pandemic, the impact of Brexit, an economic
recession, supply shortages or a movement in
sterling or interest rates could affect trading
conditions for smaller companies and consequently
the value of the Company’s qualifying investments.
Movements in UK Stock Market indices may affect
the valuation of the Company’s investments, as well
as affecting the Company’s own share price and its
discount to net asset value.
●● The Board monitors:
(1) the portfolio as a whole to ensure that the
Company invests in a diversified portfolio of
companies as protection from large impacts;
(2) developments in the macro-economic
environment such as movements in interest
rates or general fluctuations in stock markets;
and
(3) the Investment Adviser continues to hold
ongoing discussions with all the portfolio
companies to ascertain where support is
required as well as monitoring which investee
companies are able to receive further VCT
funding within the guidelines set out by HMRC.
The interpretation of such guidelines by HMRC
can change over time, which the Company’s
VCT status adviser monitors as well as making
representations, as needed, to policy makers on
behalf of the Company and the VCT Industry as
a whole. Cash comprises a significant
proportion of net assets of the Company, further
to the successful exits and the fund-raises in the
year giving the Company a strong liquidity
position. The portfolio has assets across a range
of sectors limiting the exposure to one area of
the economy.
Financial and
operating
Failure of the systems (including breaches of cyber
security) at any of the third party service providers
that the Company has contracted with could lead to
inaccurate reporting or monitoring. Inadequate
controls could lead to the misappropriation or
insecurity of assets. Outsourcing and the increase in
remote working could give rise to cyber and data
security risk and internal control risk.
●● The Board carries out a bi-annual review of the
financial and non-financial internal controls in
place, reviews the risks facing the Company at
Board meetings and receives reports by
exception.
●● The performance of the service providers is
reviewed annually and assurances that each
provider has controls in place to reduce the
risk of breaches of their cyber security are
obtained.
Market
liquidity
Shareholders may find it difficult to sell their shares
at a price which is close to the net asset value.
●● The Board has a share buyback policy which
seeks to mitigate market liquidity risk for
Shareholders. This policy is reviewed at each
quarterly Board meeting.
Environmental,
Social and
Governance
(ESG)
Emerging Risk
Non-compliance with current and future reporting
requirements could lead to a fall in demand from
investors. That may affect the level of capital the
Company has available to meet its investment
objectives.
●● ESG and climate change impacts are also
taken into account when considering new
investment proposals. The Investment Adviser
monitors the potential impact on investee
companies of any proposed new legislation
regarding environmental, social and
governance matters and advises and adapts
accordingly.
●● The Board recognises that climate change is
an important emerging risk that the Company
is taking into account in their strategic planning
although the Company itself has little direct
impact on environmental issues. Measures had
been introduced to decrease the amount of
travel Undertaken by holding more virtual
meetings, increased working from home and
to reduce the cost and environmental impact
of providing paper copies of Shareholder
correspondence.
33
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Going concern and Viability of the Company
The Board has assessed the Company’s
operation as a going concern. The
Company’s business activities, together
with the factors likely to affect its future
development, performance and position
are set out earlier in this Strategic Report.
The Directors have satisfied themselves
that the Company continues to maintain a
sufficient cash position to meet its
liabilities as they fall due. The majority of
companies in the portfolio are well funded
and the portfolio taken as a whole remains
resilient and well diversified, although the
impact of the cost of living crisis and the
challenging economic environment may
impose further considerable demands
upon the liquidity and trading prospects of
some of these companies in the near-
term. In light of this, and in keeping with
the ongoing need to take advantage of
opportunities for further investment within
the portfolio, the Company announced its
intention to raise further funds in the
2021/22 and again for the 2022/23 tax
year, with both offers reaching full
subscription. The major cash outflows of
the Company (namely investments, share
buybacks and dividends) are within the
Company’s control. The Board’s
assessment of liquidity risk and details of
the Company’s policies for managing its
capital and financial risks are shown in
Notes 16 and 17 to the Financial
Statements. Furthermore, the Directors
have considered whether there are any
material uncertainties that the Company
may face during the twelve months from
the date of approval of the financial
statements that may impact on its ability to
operate as a going concern. No further
material uncertainties have been
identified by the Board.
Viability Statement
The UK Corporate Governance Code
includes a requirement for companies to
include a “Viability Statement” in the
Annual Report addressed to Shareholders
with the intention of providing an
improved and broader assessment of long
term solvency and liquidity. The Code
does not define “long term” but expects
the period to be longer than twelve
months with individual companies
choosing a period appropriate to the
nature of their own businesses. The
Directors have chosen a period of three
years, as explained further below.
The Directors have carried out a robust
assessment of the Company’s emerging
and principal risks and the disclosures in
the annual report that describe the
principal risks and the procedures in place
to identify emerging risks and explain how
they are being managed or mitigated.
Subsequent to this review, they have a
reasonable expectation that the Company
will continue to operate and meet its
liabilities as they fall due, for the next
three years. The Directors believe a
three-year period is appropriate given the
frequency with which it is necessary to
review and assess the impact of past,
current and proposed regulatory changes.
The Directors’ assessment has been
made with reference to the Company’s
current position and prospects, the
Company’s present strategy, the Board’s
risk appetite and the Company’s principal
risks and how these are managed, as
described on pages 31 to 32. The Board is
mindful of the risks contained therein, but
considers that its actions to manage those
risks provide reasonable assurance that
the Company’s affairs are safeguarded for
the stated period.
The Directors have reached this
conclusion after giving careful
consideration to the Company’s strategy.
They believe the Company’s current
strategy of “maximising the stream of
tax-free dividend distributions from the
income and capital gains from a diverse
and carefully selected portfolio of
investments” remains valid. The Board has
focused upon the range of future
investments that the Company will be
permitted to fund under current VCT
legislation.
The Board expects that positive returns
should continue to be achievable from
future investments and from the existing
portfolio. The Company has made 31 new
investments in compliance with the VCT
rules introduced in 2015 and its revised
Investment Policy, and the Investment
Adviser continues to build a healthy
pipeline of such investment opportunities.
The Board will continue to monitor this
assumption on a regular basis and is
encouraged, in the current circumstances,
by the returns generated from some of
these investments to date.
Shareholders should be aware that, under
the Company’s Articles of Association, it is
required to hold a continuation vote at the
next AGM falling after the fifth anniversary
of last allotting shares. As shares were last
allotted in November 2022, this factor has
not affected the Board’s assumptions for
the next three years.
Future Prospects
For a discussion of the Company’s future
prospects, please see the Chair’s
Statement on pages 2 to 4.
By Order of the Board
Maurice Helfgott
Chair
16 December 2022
Strategic Report
34
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Board of Directors
Maurice Helfgott
Independent, Non-Executive Chair
Date of appointment: 12 February 2020.
Qualifications: BA Econ (Hons) MBA
Harvard
Experience: Maurice has extensive
experience as a Chair and Independent
Non-Executive Director with a proven
track record in entrepreneurial, growth
and established businesses across a
wide range of companies. After a
successful 16-year corporate career at
Marks and Spencer plc, he left his role
as Executive Director on the Main Board
to found Amery Capital with a principal
focus on investment and advisory work
in digital, retail and consumer
businesses. He has an MBA from
Harvard Business His current
appointments include Chair of ME+EM
and Oliver Sweeney, Independent
Director at Hakim Group and Executive
Chair at Amery Capital Limited.
Justin Ward
Independent, Non-Executive Director
Date of appointment: 12 November 2019.
Qualifications: BSc, ACA
Experience: Justin is a qualified
Chartered Accountant with extensive
financial, investing and private equity
experience across a number of sectors.
Between 1995 and 2010 he worked for
CVC Capital Partners, Hermes Private
Equity and Bridgepoint Development
Capital leading growth equity and
private equity buyout transactions and
has subsequently made a number of
angel investments in technology
businesses. Justin has served on the
board of a number of private companies
as non-executive director and is
currently non-executive Director at
School Explained Limited. He is also a
Non-Executive Director on the board of
Hargreave Hale AIM VCT plc and Chair
of the Audit Committee.
Nemone Wynn-Evans
Independent, Non-Executive Director
Date of appointment: 7 November 2022.
Qualifications: MA, MBA, Fellow of the
Chartered Institute for Securities and
Investment
Experience: Nemone’s background is in
the equity capital markets sector of the
City of London, including as Finance
Director on the main board of a stock
exchange. She has an MA from the
University of Oxford and an MBA from
Cranfield School of Management.
Having begun her career in corporate
finance at KPMG and HSBC, Nemone is
currently Chair of Shepherds Friendly
Society, Chair of Audit and Risk at Good
Energy Group plc, and Non-Executive
Director of Hinckley & Rugby Building
Society, where she also chairs the
Nominations Committee. She is also a
Board Advisor at SORBUS Partners LLP.
Reports of the Directors
Reports of
the Directors
The Directors present the
Annual Report and Financial
Statements of the Company
for the year ended
30 September 2022.
The Corporate Governance Statement
on pages 39 to 41, including the Report
of the Audit Committee on pages 41 to
42, form part of this Directors’ Report.
The Board believes that the Annual
Report and Financial Statements taken
as a whole is fair, balanced and
understandable and provides the
information necessary for Shareholders
to assess the Company’s position,
performance, business model and
strategy.
The principal activity of the Company is
to operate as a Venture Capital Trust,
making investments in the equity and
loan stock of primarily unquoted
companies, in compliance with VCT
legislation.
The Company is registered in England
and Wales as a Public Limited Company
(registration number 4069483).
The Company has satisfied the
requirements for full approval as a
Venture Capital Trust under section 274
of the Income Tax Act 2007 (“the ITA”). It
is the Directors’ intention to continue to
manage the Company’s affairs in such a
manner as to comply with section 274 of
the ITA.
To enable capital profits to be
distributed by way of dividends, the
Company revoked its status as an
investment company as defined in
section 833 of the Companies Act 2006
(“the Companies Act”) on 30 November
2005. The Company does not intend to
re-apply for such status.
Share capital
The Company’s ordinary shares of 1.00
penny each, formerly ‘S’ Shares, are
listed on the London Stock Exchange
(“LSE”). The shares were first admitted to
the Official List of the UK Listing
Authority (“UKLA”) and to trading on the
LSE on 8 February 2008. Following the
merger of the former classes of ‘O’
Shares (first admitted to the Official List
of the UKLA and to trading on
15November 2000) and ‘S’ Shares on
29 March 2010 (“the Merger”), the listing
of the ‘S’ Shares was amended to
ordinary shares of 1p in the capital of the
Company on 30 March 2010 and the ‘O’
Share listing was cancelled.
The issued share capital of the Company
as at 30 September 2022 was
£1,294,819 (2021: £1,185,549) and the
number of shares in issue at this date
was 129,481,901 (2021: 118,554,881).
Buyback of shares
The following disclosure is made in
accordance with Part 6 of Schedule 7 of
The Large and Medium-sized
Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended
in 2013).
The reason the Company makes market
purchases of its own shares is to
enhance the liquidity of the Company’s
shares and to seek to manage the level
and volatility of the discount of Net
Asset Value at which the Company’s
shares may trade.
At the Annual General meeting of the
Company held on 23 February 2022,
Shareholders granted the Company
authority, pursuant to section 701 of the
Companies Act 2006, to make market
purchases of up to 17,771,376 of its own
shares, representing 14.99% of the
issued share capital of the Company at
the date of the publication of the notice
of the Company’s 2022 Annual General
Meeting. Such authority has been in
place throughout the year under review
and a resolution to renew this authority
will be proposed to Shareholders at the
forthcoming Annual General Meeting to
be held on 22 February 2023.
During the year under review, the
Company bought back 1,166,089 (2021:
1,285,499) of its own shares at an
average price of 88.45 pence (2021:
81.75 pence) per share and a total cost
of £1,031,358 including expenses (2021:
£1,050,945). All shares bought back by
the Company were subsequently
cancelled.
Substantial interests
As at the date of this Report, the
Company had not been notified of any
beneficial interest exceeding 3% of the
issued share capital.
Dividend
On 8 July 2022, the Company paid an
interim dividend in respect of the year
under review of 4.00 pence per share to
Shareholders. The Company declared a
second interim dividend of 4.00 pence
per share which was paid on
7November 2022. The Company has
met its annual divided target of paying
not less than 6.00 pence per share. The
Directors are not proposing to pay a final
dividend in respect of the year ended
30 September 2022.
Directors
During the year the Board consisted of
three Non-Executive Directors until
23February 2022 when Helen Sinclair
retired from the Board which then
consisted of two directors whilst
considering changes to its composition.
Nemone Wynn-Evans was appointed to
the Board and its committees on
7November 2022 as a non-executive
director. Maurice Helfgott remains the
Chair of the Board, Justin Ward remains
Chair of the Audit Committee until
1January 2023 when Nemone will take
over the role. Justin will remain Chair of
the Nomination & Remuneration
Committee and the Investment
Committee.
The names of and brief biographical
details on each of the Directors as at the
date of this Report are given on page
34.
Disclosure of information to the
Auditor
So far as the Directors in office at the
date of publication of this Report are
aware, there is no relevant audit
information of which the Auditor is
unaware. They have individually taken
all the steps that they ought to have
taken as Directors in order to make
themselves aware of any relevant audit
information and to establish that the
Company’s Auditor is aware of that
information.
Directors’ indemnity
The Directors have individually entered
into Deeds of Indemnity with the
Company which indemnifies each
Director, subject to the provisions of the
Companies Act 2006 and the limitations
set out in each deed, against any liability
arising out of any claim made against
him or her in relation to the performance
of their duties as Directors of the
Company. Copies of each Deed of
Indemnity entered into by the Company
for the Directors are available at the
registered office of the Company.
Directors’ and Officers’ Liability
Insurance
The Company maintains a Directors’ and
Officers’ liability insurance policy. The
policy does not provide cover for
fraudulent or dishonest actions by the
Directors.
35
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Reports of
the Directors
Directors’ Report
Articles of Association (“Articles”)
The Company may amend its Articles by
special resolution in accordance with
section 21 of the Companies Act 2006.
The Articles were last amended at the
February 2021 AGM.
Post balance sheet events
For a full list of post balance sheet
events that have occurred since
30September 2022, please see Note 19
to the Financial Statements on page 76.
Social and environmental policies
The Board recognises its obligations
under Section 414c of the Companies
Act to provide information in this respect
about environmental matters (including
the impact of the Company’s business
on the environment), human rights and
social and community issues, including
information about any policies the
Company has in relation to these
matters and the effectiveness of these
policies.
Environmental, social and
governance
When seeking new investment
opportunities, the Investment Adviser
operates with a list of exclusions which
preclude it from investing in any
businesses operating in areas perceived
to be unsustainable or detrimental to
wider society, or any businesses that
have committed purposeful breaches of
regulation or have engaged in unlawful
activity. Each potential new investment
was subject to a comprehensive due
diligence process encompassing
commercial, financial and ESG principles.
This process helped in the formulation
and agreement of strategic objectives at
the stage of business planning and
investment.
The Investment Adviser has continued
to work closely with each portfolio
company board to support them in
addressing their particular ESG
challenges and opportunities, which are
diverse across the entire portfolio.
Gresham House is a market leader with
knowledge and expertise in
sustainability.
The Company does not have any
employees or offices and the Board
therefore believes that there is limited
scope for developing environmental,
social or community policies. The
Company has however, adopted
electronic communications for
Shareholders as a means of reducing
the volume of paper that the Company
uses to produce its reports and in its
interactions with Shareholders. It uses
mixed sources paper from well-managed
forests as endorsed by the Forest
Stewardship Council for the printing of
its circulars and Annual and Half-Year
reports. The Investment Adviser is
conscious of the need to reduce its
impact on the environment and has
taken a number of initiatives in its offices
including recycling and the reduction of
its energy consumption.
Global greenhouse gas emissions
The Company has no greenhouse gas
emissions to report from its operations,
nor does it have responsibility for any
other emissions producing sources
under the Companies Act 2006
(Strategic Report and Directors’ Reports)
Regulations 2013, (including those within
the Company’s underlying investment
portfolio).
Human rights
The Board seeks to conduct the
Company’s affairs responsibly and gives
full consideration to the human rights
implications of its decisions, particularly
with regard to investment decisions.
Diversity
The Directors have considered diversity
in relation to the composition of the
Board and have concluded that its
membership is diverse in relation to
gender and breadth of experience.
During the year under review, the Board
comprised of two men and one woman
until Helen’s retirement in February
2022 and from that date to the year-end,
the Board consisted of two men. The
Company does not have any senior
managers or employees. The Board has
made a commitment to consider
diversity in making future appointments.
A female director was appointed after
the year end.
The Board believes that diversity of
experience and approach amongst
board members is of great importance.
Before any appointment is made by the
Board, the Remuneration & Nomination
Committee shall evaluate the balance of
skills, knowledge and experience, and
consider candidates on merit, against
objective criteria, and with due regard
for the benefits of diversity on the Board.
Diversity includes and makes good use
of differences in knowledge and
understanding of relevant diverse
geographies, peoples and their
backgrounds including race or ethnic
origin, sexual orientation, gender, age,
disability, or religion. This was
considered as part of the recruitment
process carried out post the year-end.
Anti-bribery
The Company has adopted a zero
tolerance approach to bribery. The
following is a summary of the Company’s
policy:
●● It is the Company’s policy to conduct
all of its business in an honest and
ethical manner. The Company is
committed to acting professionally,
fairly and with integrity in all its
business dealings and relationships
where it operates.
●● Directors and service providers must
not promise, offer, give, request,
agree to receive or accept a financial
or other advantage in return for
favourable treatment, to influence a
business outcome or to gain any
other business advantage on behalf
of themselves or of the Company or
encourage others to do so.
●● The Company has communicated its
Anti-Bribery Policy to each of its
service providers. It requires each of
its service providers to have policies
in place which reflect the key
principles of this policy and
procedures and which demonstrate
that they have adopted procedures
of an equivalent standard to those
instituted by the Company. This is
checked annually.
Anti-tax evasion
The Company has adopted a zero
tolerance approach to tax evasion in
compliance with the Criminal Finance Act
2017 and the corporate criminal offence
of failing to take reasonable steps to
prevent the facilitation of tax evasion.
The Company has applied due diligence
procedures, taking an appropriate risk
based approach, in respect of persons
who perform or will perform services on
behalf of the Company, in order to
mitigate identified risks.
Whistleblowing
The Board has considered the
recommendation made in the UK
Corporate Governance Code with
regard to a policy on whistleblowing and
has reviewed the arrangements at the
Investment Adviser under which its staff
may, in confidence, raise concerns. It has
concluded that adequate arrangements
are in place at the Investment Adviser
for the proportionate and independent
investigation of such matters and, where
necessary, for appropriate follow-up
action to be taken by the Investment
Adviser. The Board has also asked each
of its service providers to confirm that
they have a suitable whistleblowing
policy in place.
36
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Reports of
the Directors
Directors’ Report
Financial risk management
The main risks arising from the
Company’s financial instruments are due
to fluctuations in the market price,
investment risk, liquidity risk, interest
rates and credit risk. The Board regularly
reviews and agrees policies for
managing these risks and full details can
be found in Note 16 to the Financial
Statements on pages 68 to 75 of this
Annual Report.
Annual General Meeting
The Notice of the Annual General
Meeting of the Company, to be held at
the offices of Shakespeare Martineau
LLP at 11.00 am on 22 February 2023 at
6th Floor, 60 Gracechurch Street,
London, EC3V 0HR, is set out on pages
84 to 86 of this Annual Report.
A webcast of the Annual General Meeting
will also be available and details of how to
join the webcast will be shown on the
Company’s website. If possible,
Shareholders intending to join the Meeting
by means of the webcast (which would be
as an attendee only) are requested to join
at least ten minutes prior to the
commencement of the Annual General
Meeting at 11.00am on Wednesday, 22
February 2023. Where a member intends
to join the Annual General Meeting by
means of the webcast, they shall be
permitted to ask questions at the Annual
General Meeting but shall not be entitled
to vote on resolutions at the Annual
General Meeting (and are, therefore,
encouraged to lodge their proxy vote and
appoint the chairman of the Annual
General Meeting as their proxy).
A proxy form for the meeting is enclosed
separately with Shareholders’ copies of
this Annual Report. Proxy votes may be
submitted electronically via the Link
Group Shareholder Portal at
www.signalshares.com
. Shareholders
may also request a hard copy proxy form
by contacting the Company’s Registrar
Link using their details as stated on page
87.
Resolutions 1 to 8 are being proposed as
ordinary resolutions requiring more than
50% of the votes cast at the meeting to
be in favour, whilst resolutions 9 and 10
will be proposed as special resolutions
requiring the approval of at least 75% of
the votes cast at the meeting.
The following is an explanation of the main
business to be proposed at the meeting:
Resolution 1 - To receive the Annual
Report and Financial Statements
The Directors are required to present the
Financial Statements, Directors’ Report
and Auditor’s Report for the financial
year ended 30September 2022 to the
meeting.
Resolution 2 – To approve the
Directors’ Remuneration Report
Under section 420 of the Companies Act
2006 (the “Act”), the Directors must
prepare an annual report detailing the
remuneration of the Directors and a
statement by the chair of the Nomination
& Remuneration Committee (together
the “Directors’ Remuneration Report).
The Act also requires that a resolution
be put to Shareholders each year for
their approval of that report. The
Directors’ Remuneration Report can be
found on pages 43 to 45 of this Annual
Report. Resolution 2 is an advisory vote
only.
Resolution 3 – To approve the
Company’s Remuneration Policy
The Company is required to put its
Remuneration Policy to Shareholders
every three years. A resolution on the
Remuneration Policy was last voted on
at the Annual General Meeting held on
12 February 2020 and therefore a similar
resolution will be proposed at the
forthcoming meeting. The
Remuneration Policy is set out below
and full details of Directors’
remuneration can be found in the
Directors’ Remuneration Report on
pages 43 to 45 of this Annual Report.
Remuneration Policy
To ensure that the levels of
remuneration are sufficient to attract,
retain and motivate directors of the
quality required to manage the
Company in order to achieve the
Company’s Objective.
Resolutions 4 to 6 – To re-elect and
elect the Directors
The Company’s Articles of Association
require that each Director appointed to
the Board shall retire and seek election
at their first AGM following appointment
and every three years thereafter. In
terms of overall length of tenure, the AIC
Code does not explicitly make
recommendations on tenure for
directors. The Board does not believe
that a Director should be appointed for a
specified term.
The Board had previously agreed that
each Director would retire and offer
themselves for re-election annually after
serving on the Board for more than nine
years. However, following the
publication of the new AIC Code in
February 2019, the Board agreed to
follow the recommendation of Provision
23, namely that all Directors be subject
to annual re-election.
Maurice Helfgott
Independent non-executive Chair
Maurice was appointed to the Board in
February 2020, and under the Articles is
seeking re-election at this Annual
General Meeting. The remaining
Directors believe that Maurice is well
positioned to make a substantial
contribution to the Company’s long-term
sustainable success in his capacity as
Chair of the Board during the year under
review and have no hesitation in
recommending his re-election to
Shareholders.
Justin Ward
Independent non-executive director
Justin was appointed to the Board on
12November 2019 and under the
Articles is seeking re-election at this
Annual General Meeting. Following an
evaluation of Justin’s performance over
the year, the remaining Board Directors
agree that he has made a very positive
contribution to the Company and they
have no hesitation in recommending his
re-election to Shareholders.
Nemone Wynn-Evans
Independent non-executive director
Nemone was appointed to the Board on
7 November 2022 and under the
Articles is seeking election at this, the
first Annual General Meeting since her
appointment to the Board. Nemone has
extensive experience and we are
confident that she will make a very
positive contribution to the Company.
Nemone will take over as Chair of the
Audit Committee on 1 January 2023.
The Directors have no hesitation in
recommending her election to
Shareholders.
Full biographies of the Directors seeking
re-election are set out on page 34 of this
Annual Report.
Resolution 7 – To reappoint BDO
LLP as auditor of the Company, to
hold office until the conclusion of
the next annual general meeting at
which accounts are laid before the
Company and to authorise the
Directors to determine the
remuneration of the auditor
At each meeting at which the Company’s
accounts are presented to its members,
the Company is required to appoint an
auditor to serve until the next such
meeting. The Board, on the
37
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Reports of
the Directors
recommendation of the Audit
Committee, recommends the re-
appointment of BDO LLP. This resolution
also gives authority to the Directors to
determine the remuneration of the
auditor. For further information, please
see the report of the Audit Committee
on pages 41 to 42 of the Annual Report.
Resolution 8 – Authority for the
Directors to allot shares in the
Company and Resolution 9 –
Authority for the Directors to
disapply the pre-emption rights of
members
These two resolutions grant the
Directors the authority to allot shares for
cash to a limited and defined extent
otherwise than pro rata to existing
Shareholders.
Resolution 8 will enable the Directors to
allot new shares up to an aggregate
nominal value of £491,066 representing
approximately one-third of the existing
issued share capital of the Company as
at the date of the notice convening the
Annual General Meeting.
Under section 561(1) of the Act, if the
Directors wish to allot new shares or sell
or transfer treasury shares for cash they
must first offer such shares to existing
Shareholders in proportion to their
current holdings (pre-emption rights). It
is proposed by Resolution 9 to sanction
the disapplication of such pre-emption
rights in respect of the allotment of
equity securities:
(i) with an aggregate nominal value of
up to £79,660 (representing
approximately 5% of the existing
issued share capital as at the date of
the notice convening the Annual
General Meeting) in connection with
offer(s) for subscription;
(ii) with an aggregate nominal value of
up to, but not exceeding, 10% of the
issued share capital from time to
time pursuant to any dividend
investment scheme operated by the
Company, at a subscription price per
Share which may be less than the
net asset value per Share, as may be
prescribed by the scheme terms;
and
(iii) otherwise than pursuant to (i) or (ii)
above, with an aggregate nominal
value of up to, but not exceeding,
5% of the issued share capital from
time to time,
in each case where the proceeds may
be used in whole or part to purchase the
Company’s shares in the market.
The Company normally allots shares at
prices based on prevailing net asset
value per share of the existing shares on
the date of allotment (plus costs, save in
relation to the dividend investment
scheme). The Directors thus, seek to
manage any potential dilution of existing
Shareholders as a result of the
disapplication of Shareholders’
pre-emption rights proposed in
Resolution 9.
The Company does not currently hold
any shares as treasury shares.
Both of these authorities, unless
previously renewed, varied or revoked,
will expire on the date falling fifteen
months after the passing of the relevant
resolution or, if earlier, on the conclusion
of the Annual General Meeting of the
Company to be held in 2024. However,
the Directors may allot securities after
the expiry dates specified above in
pursuance of offers or agreements made
prior to the expiration of these
authorities. Both resolutions renew
previous general authorities approved at
the Annual General Meeting of the
Company held on 23 February 2022 and
are in addition to the existing authorities
of the Company obtained at the general
meeting of the Company on 12 October
2022.
Authority to purchase the
Company’s own shares (Resolution
10)
This resolution authorises the Company
to purchase its own shares pursuant to
section 701 of the Act. The authority is
limited to the purchase of an aggregate
of 22,083,241 shares representing
approximately 14.99% of the issued
share capital of the Company as at the
date of the notice convening the Annual
General Meeting or, if lower, such
number of shares (rounded down to the
nearest whole share) as shall equal
14.99% of the issued share capital at the
date the resolution is passed. The
maximum price that may be paid for a
share will be the higher of (i) an amount
that is not more than 5% above the
average of the middle market quotations
of the shares as derived from the Daily
Official List of the London Stock
Exchange for the five business days
preceding the date such shares are
contracted to be purchased and (ii) the
price stipulated by Article 5(6) of the
Market Abuse Regulation (EU) 596/2014
(as such Regulation forms part of UK law
and as amended). The minimum price
that may be paid for a share is 1 penny,
being the nominal value thereof.
Market liquidity in VCTs is normally very
restricted. The passing of this resolution
will enable the Company to purchase its
own shares thereby providing a
mechanism by which the Company may
enhance the liquidity of its shares for the
benefit of Shareholders and seek to
manage the level and volatility of the
discount to NAV at which its shares may
trade.
It is the Directors’ intention to cancel any
shares bought back under this authority.
Shareholders should note that the
Directors do not intend to exercise this
authority unless they believe to do so
would result in an increase in net assets
per share which would be in the
interests of Shareholders generally. This
resolution will expire on the date falling
fifteen months after the passing of this
resolution or, if earlier, on the conclusion
of the Company’s Annual General
Meeting of the Company to be held in
2024 except that the Company may
purchase its own shares after this date in
pursuance of a contract or contracts
made prior to the expiration of this
authority.
Recommendation
The Board recommends that
Shareholders vote in favour of the
resolutions being proposed at the
Annual General Meeting. The Directors
intend to do so in respect to their own
beneficial holdings of 167,855
representing 0.11% of the issued share
capital as at 15 December 2022.
Voting rights of Shareholders
At general meetings of the Company,
Shareholders have one vote on a show
of hands and one vote per share held on
a poll. No member shall be entitled to
vote or exercise any rights at a general
meeting unless all their shares have
been paid up in full. Any instrument of
proxy must be deposited at the place
specified by the Directors no later than
48 hours before the time for holding the
meeting.
There are no restrictions on voting rights
and no agreements between holders of
securities that may prevent or restrict
the transfer of securities or voting rights.
By order of the Board
Gresham House Asset Management
Limited
Company Secretary
16 December 2022
38
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Reports of
the Directors
This Corporate Governance Statement
forms part of the Directors’ Report.
The Directors adopted the Association
of Investment Companies (AIC) Code of
Corporate Governance 2019 (the “AIC
Code”) for the financial year ended
30September 2022.
During the year under review, the Board
considered the principles and
recommendations of the AIC Code by
reference to the AIC Corporate
Governance Guide for investment
companies (“AIC Guide”). As well as
setting out the principles of the AIC
Code, the AIC Guide provides an
overview of best practice with reference
to the UK Corporate Governance Code
(the “UK Code”) and considers how each
of the UK Code’s Principles applies to
Investment Companies. The AIC Code
also included additional Principles and
recommendations on issues that are of
specific relevance to the Company as an
investment company. The Board
therefore considers that reporting
against the AIC Code provides more
relevant information to Shareholders.
The FRC has confirmed that, in adopting
the AIC Code, the Company will meet its
obligations in relation to the reporting
requirements of the Financial Conduct
Authority’s Listing and Disclosure and
Transparency Rules on corporate
governance.
The AIC Code can be viewed on the
AIC’s website by going to the following
link: https://www.theaic.co.uk/aic-code-
of-corporate-governance.
Statement of compliance
This statement has been compiled in
accordance with the FCA’s Disclosure
and Transparency Rule (DTR) 7.2 on
Corporate Governance Statements.
The Board considers that the Company
has complied with the recommendations
of the AIC Code and the relevant
provisions of the UK Code throughout
the year under review. A table providing
further explanations of how the
Company has complied with the AIC
Code during the year is available in the
Corporate Governance section of the
Company’s website:
www.incomeandgrowthvct.co.uk.
As an externally managed VCT, most of
the Company’s operations are
delegated to third parties and the
Company has no executive directors,
employees or internal operations. The
Board has therefore concluded, for the
reasons set out in the AIC Guide, and as
explained in the UK Code that the
specific provisions of the UK Code that
relate to the requirement for an internal
audit function, the role of the chief
executive and executive directors’ pay
are not relevant to the Company. The
Company has therefore not reported
further in respect of these Provisions.
Internal control
The Board acknowledges that it is
responsible for the Company’s system of
internal control and for reviewing its
effectiveness. Internal control systems
are designed to manage the particular
needs of the Company and the risks to
which it is exposed and can, by their
nature, only provide reasonable rather
than absolute assurance against material
misstatement or loss.
The Company’s internal control system
aims to ensure the maintenance of
proper accounting records, the reliability
of the financial information used for
publication and upon which business
decisions are made, and that the assets
of the Company are safeguarded. The
financial controls operated by the Board
include regular reviews of signing
authorities, quarterly management
accounts and the processes by which
investments in the portfolio are valued.
The Board has put in place ongoing
procedures for identifying, evaluating
and managing the significant risks faced
by the Company. As part of this process
a bi-annual review of the control systems
is carried out. The review covers a
consideration of the key business,
operational, compliance and financial
risks facing the Company and includes a
review of the risks in relation to the
financial reporting process. The Board
reviews recommendations from the
Audit Committee in respect of the key
risks discussed at each of their regularly
scheduled meetings.
The Board has delegated, contractually
to third parties, the management of the
investment portfolio, the day-to-day
accounting, company secretarial and
administration requirements and the
registration services. Each of these
contracts was entered into after full and
proper consideration by the Board of the
quality and cost of services offered,
including the financial control systems in
operation at the service providers in so
far as they relate to the affairs of the
Company. The Board regularly monitors
these contracts from a risk perspective
and receives reports from the Registrar
and Investment Adviser and
Administrator when appropriate.
The Board, assisted by the Audit
Committee, carries out separate
assessments in respect of the Annual
and Half-Year reports and other
published financial information. As part
of these reviews, the Board appraises all
the relevant risks ensuing from the
internal control process referred to
above. The main aspects of the internal
controls which have been in place
throughout the year in relation to
financial reporting are as follows:
●● Internal controls are in place for the
preparation and reconciliation of the
valuations prepared by the
Investment Adviser.
●● Independent reviews of the
valuations of investments within the
portfolio are undertaken quarterly by
the Board.
●● The information contained in the
Annual Report and other financial
reports is reviewed separately by
the Audit Committee prior to
consideration by the Board.
●● The Board reviews all financial
information prior to publication.
The internal control system and the
procedure for its review has been in
place and operational throughout the
year under review and up to the date of
this Report. The Audit Committee and
the Board last carried out an assessment
of the effectiveness of internal controls
in managing risk on 1 December 2022.
The Board has identified no significant
problems with the Company’s internal
control system.
Investment management and
service providers
Gresham House acted as Investment
Adviser throughout the year under
review and provided administrative and
company secretarial services to the
Company to the Company’s financial
year-end and continues to do so. The
Directors carry out an annual review of
the performance of and contractual
arrangements with the Investment
Adviser. The annual review of the
Investment Adviser forms part of the
Board’s overall internal control
procedures discussed above. As part of
this review, the Board considers the
quality and continuity of the investment
management team, investment
performance, quality of information
provided to the Board, remuneration of
the Investment Adviser, the investment
process and the results achieved to
date. A review of the performance of the
Company is included in the Strategic
Report on pages 7 to 10. The Board
concluded that the Investment Adviser
had performed consistently well over
the medium-term despite having
returned a negative return in respect of
the year under review. The Company’s
investment portfolio trading
performance has been resilient to the
39
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Reports of
the Directors
Corporate Governance Statement
year-end and the Investment Adviser
has been proactive in supporting the
portfolio in the face of rising inflation and
political uncertainty.
The Board places significant emphasis
on the Company’s performance against
its peers and further information on this
has been included in the Strategic
Report on page 9. The Board further
considered the Investment Adviser’s
commitment to the promotion of the
Company and was satisfied that this was
highly prioritised by the Investment
Adviser as evidenced by, inter alia, the
Mobeus VCT fundraisings which have
taken place between 2010 and 2022
and annual Shareholder events.
The Board considers that the Investment
Adviser continued to exercise
independent judgement while producing
valuations which reflect fair value.
Overall, the Board continues to believe
that the Investment Adviser possesses
the experience, knowledge and
resources that are required to support
the Board in achieving the Company’s
long term investment objectives. The
Directors therefore believe that the
continued appointment of the
Investment Adviser to the Company on
the terms currently agreed is in the
interests of Shareholders, and this was
formally approved by the Board on
14September 2022.
The principal terms of the Company’s
Investment Advisory Agreement dated
29 March 2010, amended and restated
on 30 September 2021, and its
Performance Incentive Fee Agreement
dated 30 September 2014, as novated to
Gresham House effective on
30 September 2021, are set out in Note 4
to the Financial Statements on pages 58
to 59 of this Annual Report. The Board
seeks to ensure that the terms of these
agreements represent an appropriate
balance between cost and the
incentivisation of the Investment Adviser.
Investment Adviser fees
The fees paid to the Investment Adviser
and the performance incentive fees paid
are set out in Note 4 to the Financial
Statements on pages 58 to 59.
In addition, the Investment Adviser
received fees totaling £492,785 (2021:
£471,831) during the year ended
30 September 2022, being £176,750
(2021: £176,421) for arrangement fees,
and £316,035 (2021: £295,410) for acting
as non-executive directors on a number
of investee company boards. These
amounts are the share of such fees
attributable to investments made by the
Company.
Alternative Investment Fund
Manager (“AIFM”)
The Board appointed the Company as
its own AIFM in compliance with the
European Commission’s Alternative
Investment Fund Management Directive
with effect from 22 July 2014. The
Company is registered as a small AIFM,
and is therefore exempt from the
principal requirements of the Directive.
Gresham House has provided
investment advisory and administrative
services to the Company throughout the
year under review. In order for the
Company to continue to discharge its
safekeeping responsibilities for the
documents of title to its investments, a
Safekeeping Agreement has been
entered into with Apex Fund and
Corporate Services (Guernsey) Limited.
The Board and its Committees
The powers of the Directors have been
granted by company law, the Company’s
Articles of Association and resolutions
passed by the Company’s Shareholders
in general meeting. Resolutions are
proposed annually at each Annual
General Meeting of the Company to
authorise the Directors to allot shares,
disapply the pre-emption rights of
Shareholders and buyback the
Company’s own shares on behalf of the
Company. These authorities are
currently in place and resolutions to
renew them will be proposed at the
Annual General Meeting of the Company
to be held on 22 February 2023.
In regard to the Chair of the Board’s
tenure, the length of service of all
directors is considered on an ongoing
basis, with the Nomination &
Remuneration Committee giving
consideration to succession and
composition at its meeting, held on
14September 2022, in compliance with
the AIC Code of Corporate Governance
guidance. Maurice Helfgott became the
Chair of the Company in July 2020 and
will stand for re-election at the
forthcoming AGM with all the directors
standing for re-election annually.
The Board has agreed a schedule of
matters specifically reserved for
decision by the Board. These include
compliance with the requirements of the
Companies Act 2006 and the Income
Tax Act 2007, the UK Listing Authority
and the London Stock Exchange;
strategy and management of the
Company; changes relating to the
Company’s capital structure or its status
as a plc; financial reporting and controls;
Board and committee appointments as
recommended by the Nomination &
Remuneration Committee and terms of
reference of committees; material
contracts of the Company and contracts
of the Company not in the ordinary
course of business.
Each year a formal performance
evaluation is undertaken of the Board as
a whole, its Committees and each of the
directors. A summary of the findings are
submitted to the Board, which are
discussed and an action plan agreed if
appropriate. There were no issues
requiring action in the year. The
performance of the Chair was evaluated
by the other Director.
The Board has established three
Committees, the Investment Committee,
the Audit Committee and the
Nomination & Remuneration Committee,
each with responsibilities for specific
areas of its activity. The Board has
satisfied itself that each of its
Committees has sufficient resources to
undertake its duties. Each of the
Committees has written terms of
reference, which detail their authority
and duties. Shareholders may obtain
copies of these by making a written
request to the Company Secretary or by
downloading these documents from the
Company’s website:
www.incomeandgrowthvct.co.uk.
Full descriptions of the work of the Audit
and Nomination & Remuneration
Committees are set out in the Report of
the Audit Committee and the Directors’
Remuneration Report on pages 41 to 42
and 43 to 45 respectively.
Investment Committee
The Investment Committee has been
chaired by Justin Ward since the
retirement of Helen Sinclair which during
the year, comprised all of the Directors.
The Committee meets as necessary to
consider the investment proposals put
forward by the Investment Adviser. The
Committee advises the Board on the
development and implementation of the
Investment Policy and leads the process
for the ongoing monitoring of investee
companies and the Company’s
investment therein. Investment
guidelines have been issued to the
Investment Adviser and the Committee
ensures that these guidelines are
adhered to. New investments and
divestments are approved on
recommendation of the Committee
following discussion between
Committee members and are
subsequently ratified by the Board.
Investment matters are discussed
extensively at Board meetings. During
the year, the Committee formally
approved investment, divestment and
variation decisions, and met informally
40
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Reports of
the Directors
on numerous occasions and formally at
least once a year.
The Committee considers and agrees,
on the advice of the Investment Adviser
and under the guidance of the Audit
Committee, all unquoted investment
valuations for recommendation to the
Board. Investments are valued in
accordance with the International Private
Equity and Venture Capital (IPEV)
Valuation Guidelines under which
investments are valued at fair value as
defined in those guidelines. Any AIM or
other quoted investment will be valued
at the closing bid price of its shares as at
the relevant reporting date, in
accordance with generally accepted
accounting practice. For further
information on the Company’s
investment portfolio, please see pages
11 to 27 of the Strategic Report.
By order of the Board
Gresham House Asset Management
Limited
Company Secretary
16 December 2022
This Report of the Audit
Committee forms part of the
Directors’ Report.
The Audit Committee (“Committee”) will
be chaired by Justin Ward until 1 January
2023 when Nemone Wynn-Evans will
assume the Chair.
During the year the Committee
comprised all of the Directors. Due to
there only being three directors
appointed to the Company, it is
appropriate that that Board’s chair
should be a member of the Audit
Committee. A summary of the Audit
Committee’s principal activities for the
year to 30 September 2022 is provided
below:
Financial Statements
The Half-Year and Annual Reports to
Shareholders were thoroughly reviewed
by the Committee prior to submission to
the Board for approval.
Internal control
The Committee monitored the system of
internal controls throughout the year
under review and as described in more
detail in the Corporate Governance
Statement on pages 39 to 41. It received
reports by exception on the Company’s
progress against its internal controls at
its annual and half-year results meetings
and reviews the key risks regularly. A full
review of the internal controls in
operation by the Company was
undertaken by the Committee on 1
December 2022.
Valuation of investments
The Investment Adviser prepared
valuations of the investments in the
portfolio at the end of each quarter and
these were considered in detail and
agreed by the Investment Committee for
recommendation to the Board. The Audit
Committee continued to monitor the
adequacy of the controls over the
preparation of these valuations. As part
of this process, it focused on ensuring
that both the bases of the valuations and
any assumptions used were reasonable
and in accordance with the IPEV
Valuation Guidelines. The Committee
received a review within a report from
the external auditor as part of both the
year-end audit process and the specific
procedures carried out by BDO in
respect of the half-year review. These
reports were discussed in full by the
Committee, the Investment Adviser and,
with the Auditor as necessary, before a
recommendation to approve the
valuations was made to the Board.
Key issues considered by the
Committee
In addition to the valuation of
investments, the key accounting and
reporting issues considered by the
Committee during the year have
included:
Going concern and Viability of the
Company
The Committee monitors the Company’s
resources at each quarterly Board
meeting and is satisfied that the
Company has an adequate level of
resources for the foreseeable future. It
has assessed the viability of the
Company for the next three years. Its
conclusions in respect of both going
concern and viability are set out in the
Strategic Report on page 33.
Consideration was given to the cash
balances and holdings in money market
funds, together with the ability of the
Company to realise its investments.
Recognition of impairment and
realised losses
If an investment has been impaired such
that there is no realistic expectation that
there will be a full return from the
investment, the loss is treated as a
permanent impairment and is
recognised as a realised loss in the
Financial Statements. The Committee
reviews the appropriateness and
completeness of such impairments.
Compliance with the VCT tests
The Company engages the services of a
VCT Status Adviser to advise on its
ongoing compliance with the legislative
requirements relating to VCTs. A report
on the Company’s compliance
supported by the tests carried out is
produced by the VCT Status Adviser on
a bi-annual basis and reviewed by the
Committee for recommendation to the
Board. The Committee has continued to
consider the risk and compliance
aspects of changes to the VCT Rules
introduced by the Finance Act (No 2)
2015 and the recent measures contained
in the Finance Act 2018. As an essential
part of this work, the Committee has
held ongoing discussions with the
Company’s VCT Status Adviser
throughout the year.
Income from investee companies
The Committee notes that revenue from
loan stock and dividends may be
uncertain given the type of companies in
which the Company invests. Dividends
in particular may be difficult to predict.
41
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Reports of
the Directors
Report of the Audit Committee
The payments received do however
have a direct impact on the level of
income dividends the Company is able
to pay to Shareholders. The Committee
agrees policies for revenue recognition
and reviews their application at each of
its meetings. It considers schedules of
income received and receivable from
each of the investee companies and
assesses, in consultation with the
Investment Adviser, the likelihood of
receipt of each of the amounts.
Principal risks faced by the Company
The Board has identified the principal
and emerging risks faced by the
Company and established appropriate
controls (set out in the Strategic Report
on pages 31 to 32). The Committee
monitors these controls and reviews any
incidences of non-compliance. Further
details are set out in the Corporate
Governance Statement on pages 31 to
32.
Cyber Security
The Board has sought and obtained
assurances during the year from the
Investment Adviser, the Registrar and
other service providers regarding their
cyber security policies.
Tax evasion
The Company has adopted a zero
tolerance approach to tax evasion in
compliance with the Criminal Finance
Act 2017, as reported on page 36.
Relationship with the external
auditor
The Committee is responsible for
overseeing the relationship with the
external auditor, assessing the
effectiveness of the external audit
process and making recommendations
on the appointment and removal of the
external auditor.
The external auditor is invited to attend
Audit Committee meetings, where
appropriate, and also has the option to
meet with the Committee and its Chair
without representatives of the
Investment Adviser being present.
The external auditor engaged with the
Audit Committee throughout the year
and during the audit planning process. It
considers that the audit team is
appropriately resourced and has
communicated clearly and promptly with
members of the Committee and the
Investment Adviser during the audit
process. The Committee is satisfied that
independence and objectivity has been
maintained throughout the audit and the
level of fees charged are justifiable and
appropriate for the work involved. On
this basis the Committee has
recommended to the Board that, subject
to Shareholder approval, that BDO LLP
be re-appointed as the external auditor
for the forthcoming year.
Non-audit services
The Board regularly reviews and
monitors the external auditor’s
independence and objectivity. As part of
this it reviews the nature and extent of
services supplied by the auditor to
ensure that independence is maintained.
The Committee has reviewed the
implications of the Financial Reporting
Council‘s (“FRC”) Revised Ethical
Reporting Standard 2019 effective from
5 March 2020.
There are no non-audit services to be
reported.
Additional disclosures in the
Directors’ Report
Disclosures required by certain publicly-
traded companies as set out in Part 6 of
Schedule 7 of the Large and Medium-
sized Companies and Groups (Accounts
and Reports) Regulations 2008 (as
amended 2013) are addressed in the
Directors’ Report on pages 35 to 36.
By order of the Board
Justin Ward
Chair of the Audit Committee
16 December 2022
42
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Reports of
the Directors
43
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Reports of
the Directors
Directors’ Remuneration Report
Directors’ Remuneration Policy
In determining the Company’s
remuneration policy, the Committee and
the Board seek to determine a level of
fees appropriate to attract and retain
individuals of sufficient calibre to lead
the Company in achieving its Objective.
When considering the level of Directors’
fees, it takes account of the workload
and responsibilities of each role and the
value and amount of time that a Director
is required to commit to the Company. It
further considers remuneration levels
elsewhere in the Venture Capital Trust
industry for companies of a similar size
and structure, together with other
relevant information.
Supplements are paid to the Directors in
respect of their membership of the
Investment (£5,000) and Audit
Committees (£6,000). The Directors may
at their discretion pay additional sums in
respect of specific tasks carried out by
individual Directors on behalf of the
Company.
Since all the Directors are non-
executive, the Company is not required
to comply with the provisions of the
Listing Rules, the UK Corporate
Governance Code and the AIC Code of
Corporate Governance (the “AIC Code”)
in respect of Directors’ remuneration,
except in so far as they relate specifically
to non-executive directors.
The Remuneration Policy is set by the
Board on the recommendation of the
Nomination and Remuneration
Committee. The level of fees paid to
each of the Directors is reviewed
annually by the Nomination and
Remuneration Committee which makes
recommendations to the Board. The
Committee has access to independent
advice where and when it considers it
appropriate.
As part of its annual review of directors’
remuneration, at its meeting on
14September 2022, the Nomination &
Remuneration Committee considered
the aggregate level of remuneration for
each director, which was increased in
the previous year, and agreed no
change in remuneration was necessary
for the forthcoming year.
Performance related remuneration
Whilst it is a key element of this policy to
recruit directors of the calibre required
to lead the Company in achieving its
short and long-term objectives, no
component of the fees paid is directly
related to performance.
Additional benefits
The Company does not have any other
schemes in place to pay bonuses or
benefits to the Directors. No
arrangements have been entered into
between the Company and the Directors
to entitle any of the Directors to
compensation for loss of office. None of
the Directors receive pension benefits
from the Company and the Company
has not granted any Director any options
over the share capital of the Company.
Recruitment remuneration
Remuneration of any new director, who
may subsequently be appointed to the
Board, will be in line with the
Remuneration Policy set out in this
Report and the levels of remuneration
stated therein, as modified from time to
time.
Shareholders‘ views on
remuneration
The Board prioritises the views of
Shareholders very highly and encourages
a full and frank discussion at general
meetings of the Company when possible.
It takes Shareholders’ views into account,
where appropriate, when formulating its
Remuneration Policy. Shareholders can
contact the Chair or the Company
Secretary, Gresham House, at any time by
email using the address:
mobeusvcts@greshamhouse.com
Directors’ terms of appointment
All of the Directors are non-executive.
The Articles of Association provide that
Directors may be appointed either by
ordinary resolution of the Shareholders
or by the Board, provided that a person
appointed by the Board shall be subject
to election at the first Annual General
Meeting following their appointment.
With effect from 1 October 2019, the
Board adopted the 2019 AIC Code and
all Directors will continue to seek
election or re-election at each Annual
General Meeting, usually scheduled in
February of each year.
All Directors receive a formal letter of
appointment setting out the terms of their
appointment and the specific duties and
responsibilities and the fees pertaining to
the appointment. None of the Directors
have a service contract with the
Company. A Director’s appointment may
be terminated on three months’ notice
being given by the Company and in
certain other circumstances. Copies of
the Directors’ appointment letters will be
available for inspection at the place of
the Annual General Meeting from
10.45 am however Shareholders can
write to the Company Secretary at
mobeusvcts@greshamhouse.com to
request these.
New Directors are asked to undertake
that they will have sufficient time to carry
out their responsibilities to the Company
and to disclose their other significant
time commitments to the Board before
appointment.
Future policy
The table overleaf illustrates how the
Company’s objective is supported by its
Remuneration Policy. It sets out details
of each component of the pay package
and the maximum amount receivable
per annum by each Director based on
the Directors as at the date of this
Report. The Nomination & Remuneration
Committee and the Board review the
fees paid to Directors annually in
accordance with the Remuneration
Policy set out on page 44 and may
decide that an increase in fees is
appropriate in respect of subsequent
years. No performance conditions are
attached to any aspect of any fee paid to
the Directors.
44
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Reports of
the Directors
Director
Role
Components of pay package Maximum
payment per
annum
Directors’ fees Supplements for committee
membership
Audit
Committee
Investment
Committee
Maurice Helfgott
Chair £37,500 £6,000 £5,000 £48,500
Justin Ward
1
Chair, Audit, Investment and Nomination & Remuneration
Committees £27,000 £6,000 £5,000 £38,000
Nemone Wynn-Evans
2
Chair, Audit Committee £27,000 £6,000 £5,000 £38,000
Total fees payable £91,500 £18,000 £15,000 £124,500
Shareholder approval of the
Company’s Remuneration Policy
This policy applied throughout the
financial year ended 30 September
2022 and will continue to apply until the
AGM 2023 and thereafter for the
remainder of the current financial year
ending 30 September 2023, if
Shareholder approval is granted at the
AGM.
A resolution to approve the Directors’
Remuneration Policy as set out in the
Annual Report for the year ended
30September 2019 was approved
unanimously by Shareholders on a show
of hands at the Annual General Meeting
of the Company held on 23 February
2020. The Company also received proxy
votes in favour of the resolution
representing 94.10% (including those
who appointed the Chair to vote at his
discretion) of the votes received (against:
5.90%).
The Board is required to ask
Shareholders to approve the
Remuneration Policy every three years.
The Directors will therefore recommend
that Shareholders approve the Policy
again at the Annual General Meeting of
the Company to be held in February
2023.
Annual Remuneration Report
The resolution to approve the Annual
Remuneration Report as set out in the
Annual Report for the year ended
30September 2021 was approved by
Shareholders on a poll of proxy votes at
the Annual General Meeting of the
Company held on 23 February 2022.
The Company received proxy votes in
favour of the resolution representing
96.24% (including those who appointed
the Chair to vote at his discretion) of the
votes received (against: 3.76%). An
ordinary resolution for the approval of
this Annual Remuneration Report will be
proposed at the next Annual General
Meeting of the Company to be held on
22 February 2023.
This section of the Directors’
Remuneration Report sets out how the
above Remuneration Policy has been
implemented during the year.
Nomination and Remuneration
Committee
During the year under review the
Committee comprised the full Board. It
was chaired by Justin Ward throughout
the year. All members of the Committee
are considered to be independent of the
Investment Adviser with the exception of
Helen Sinclair whilst she was a director.
The Committee meets at least once a
year and is responsible for making
recommendations to the Board on
remuneration policy and reviewing the
policy’s ongoing appropriateness and
relevance. It carries out an annual review
of the remuneration of the Directors and
makes recommendations to the Board
on the level of Directors’ fees. The
Committee may, at its discretion,
recommend to the Board that individual
Directors should be awarded further
payment in respect of additional work
carried out on behalf of the Company. It
is responsible for the appointment of
remuneration consultants, if this should
be considered necessary, including
establishing the selection criteria and
terms of reference for such an
appointment. Such advice was sought
for the recruitment process the Board
undertook towards the year end. The
Committee met twice during the year
with full attendance from all of its
members.
In considering nominations, the
Committee is responsible for making
recommendations to the Board
concerning new appointments of
Directors to the Board and its
committees; the periodic review of the
composition of the Board and its
committees; and the annual
performance review of the Board, the
Directors and the Chair. This includes
the ongoing review of each Director’s
actual or potential conflicts of interest
which may arise as a result of the
external business activities of Board
members.
The Board has made a commitment to
consider diversity as part of the
recruitment process for all appointments.
Following the performance evaluation of
the Directors during the year, the Board
confirms that each of the Directors
demonstrated commitment to their roles
and were effective in carrying out their
duties on behalf of the Company.
1
Justin will hand over the role of Audit Chair on 1 January 2023.
2
Nemone was appointed to the Board on 7 November 2022, after the Company’s year-end and her fees will be pro-rated accordingly. She will assume the
role of Audit Chair on 1 January 2023.
Company Objective
To provide investors with a regular income stream, by way of tax-free dividends generated from income and capital returns
Remuneration Policy
To ensure that the levels of remuneration are sufficient to attract, retain and motivate directors of the quality required to
manage the Company in order to achieve the Company’s Objective.
Directors’ Remuneration Report
45
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Reports of
the Directors
Audited information
Total individual emoluments paid in respect
to qualifying services to each person who
served as a Director during the year
1
(audited) are set out below.
Total Directors’ fees
Year ended:
30 September
2022
30 September
2021
Change in
annual fee
£ £
Maurice Helfgott 48,500 49,000 5.4%
Helen Sinclair
2
15,151 37,000 5.6%
Justin Ward
3
43,970 37,000 5.6%
Total 107,621 123,000
1
- Details of appointments and retirements during the
year are shown on page 44.
2
- Helen retired as a director on 23 February 2022.
3
- Justin was appointed as Chair of the Investment
committee upon Helen’s retirement in February 2022
with an incremental fee of £10,000 pa paid pro-rata
until Nemone’s appointment in November 2022.
No sums were paid to third parties in
respect of any of the Director’s services
during the year under review.
Relative importance of spend on
Directors’ fees
Year ended:
30 September
2022
30 September
2021
Percentage
increase/
(decrease)
£ £
Total
Directors’ fees 107,621 123,000 (12.5)%
Dividends paid/
payable in
respect of
the year 9,397,784 10,652,083 (11.8)%
Cost of share
buybacks 1,031,358 1,050,945 (1.9)%
Directors’ interests in the Company’s shares (audited)
Although it is not a Company Policy, the Directors believe that it is in the best
interests of the Company and its Shareholders for each Director to maintain an
interest in the Company. The Directors who held office throughout the year under
review and their interests as at 30 September 2022 were:
30 September 2022 30 September 2021
Director
Shares
held
Percentage of
issued share
capital
Shares
held
Percentage of
issued share
capital
Maurice Helfgott 137,130 0.11% 30,000 0.03%
Justin Ward
1
57,369 0.4% 28,295 0.02%
1
- Justin and his wife’s holdings combined.
Directors’ remuneration: 5-year comparison
2022 2017 % Change
Chair's fee (incl. committee membership fee) 48,500 46,000 5.4%
Directors' fee (incl. committee membership fee) 38,000 36,000 5.6%
Directors’ attendance at Board and Committee meetings in 2022
The table below sets out the Director’s attendance at quarterly Board meetings and
Committee meetings held during the year ended 30 September 2022. In addition to
the quarterly Board meetings, the Board met on other occasions to consider specific
issues as they arose.
Directors Board Meetings Audit Committee
Meetings
Nomination &
Remuneration
Committee
Meetings
Eligible Attended Eligible Attended Eligible Attended
Maurice Helfgott 4 4 2 2 2 2
Helen Sinclair
1
2 2 1 1 - -
Justin Ward 4
4
2
2
2
2
1
- Helen retired as a director on 23 February 2022
Company performance
The graph below charts the total cumulative shareholder return of the Company’s
shares on a share price basis (assuming all dividends have been re-invested and
excluding the tax reliefs available to Shareholders) over the past ten years compared
with that of an index of all VCTs and an index of generalist VCTs which are members
of the AIC (based on figures provided by Morningstar). The Board considers these
indices to be the most appropriate to use to measure the Company’s relative
performance over the medium to long-term. The total shareholder returns have been
rebased to 100 at 30 September 2012.
The Income & Growth VCT plc Share Price Total Return
AIC Generalist VCTs Share Price Total Return
AIC All VCTs Share Price Total Return
30/09/2012 30/09/2013 30/09/2014 30/09/2015 30/09/2016 30/09/2017 30/09/201830/09/201930/09/202030/09/202130/09/2022
380p
340p
300p
260p
220p
180p
140p
360p
320p
280p
240p
200p
160p
120p
100p
The share price total return comprises
the share price plus cumulative
dividends paid per share assuming the
dividends paid were re-invested on the
date on which the shares were quoted
ex-dividend in respect of each dividend.
The former ‘O’ Share class was merged
into the former ‘S’ Share class on
29March 2010 to form the current class
of shares. This graph therefore shows
the performance of current class of
shares only.
An explanation of the performance of
the Company is given in the Chair’s
Statement on page 2, the Performance
section of the Strategic Report on pages
7 to 10 and in the Investment Adviser’s
Review and Investment Portfolio
Summary on pages 22 to 27.
By order of the Board
Justin Ward
Chair of the Nomination & Remuneration
Committee
16 December 2022
46
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Reports of
the Directors
Statement of the Directors’ Responsibilities
The Directors are responsible for
preparing the Annual Report and the
Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to
prepare Financial Statements for each
financial year and the Directors have
elected to prepare the Financial
Statements in accordance with United
Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards and applicable
law). Under company law the Directors
must not approve the Financial
Statements unless they are satisfied that
they 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.
In preparing these Financial Statements,
the Directors are required to:
●● select suitable accounting policies
and then apply them consistently;
●● make judgements and accounting
estimates that are reasonable and
prudent;
●● state whether the Financial
Statements have been prepared in
accordance with United Kingdom
accounting standards, subject to any
material departures disclosed and
explained in the Financial
Statements;
●● prepare the Financial Statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business;
●● prepare a Strategic Report, a
Director’s Report and Directors’
Remuneration Report which comply
with the requirements of the
Companies Act 2006.
The Directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the Company’s transactions and
disclose with reasonable accuracy at
any time the financial position of the
Company and enable them to ensure
that the Financial Statements comply
with the Companies Act 2006. They are
also responsible for safeguarding the
assets of the Company and hence for
taking reasonable steps for the
prevention and detection of fraud and
other irregularities.
Website publication
The Directors are responsible for
ensuring the Annual Report and the
Financial Statements are made available
on a website. Financial Statements are
published on the Company’s website in
accordance with legislation in the United
Kingdom governing the preparation and
dissemination of Financial Statements,
which may vary from legislation in other
jurisdictions. The maintenance and
integrity of the Company’s website is the
responsibility of the Directors. The
Directors’ responsibility also extends to
the ongoing integrity of the Financial
Statements contained therein.
Directors’ responsibilities pursuant
to Disclosure and Transparency
Rule 4 of the UK Listing Authority
The Directors confirm to the best of their
knowledge that:
(a) the Financial Statements, which have
been prepared in accordance with
United Kingdom Generally Accepted
Accounting Practice give a true and
fair view of the assets, liabilities,
financial position and the profit of the
Company; and
(b) the Annual Report 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.
Having taken advice from the Audit
Committee, the Board considers the
Annual Report and Financial Statements,
taken as a whole, is fair, balanced and
understandable and that it provides the
information necessary for Shareholders
to assess the Company’s performance,
business model and strategy.
Neither the Company nor the Directors
accept any liability to any person in
relation to the Annual Report except to
the extent that such liability could arise
under English law.
The names and functions of the
Directors are stated on page 44.
For and on behalf of the Board
Maurice Helfgott
Chair
16 December 2022
47
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Independent
Auditor’s Report
Opinion on the financial statements
In our opinion the financial statements:
●● give a true and fair view of the state
of the Company’s affairs as at 30
September 2022 and of its loss for
the year then ended;
●● have been properly prepared in
accordance with United Kingdom
Generally Accepted Accounting
Practice; and
●● have been prepared in accordance
with the requirements of the
Companies Act 2006.
We have audited the financial
statements of The Income & Growth
VCT plc (“the Company”) for the year
ended 30 September 2022 which
comprise the Income statement, the
Balance Sheet, the Statement of
Changes in Equity, the Statement of
Cash Flows and notes to the financial
statements, including a summary of
significant accounting policies. The
financial reporting framework that has
been applied in their preparation is
applicable law and United Kingdom
Accounting Standards, including
Financial Reporting Standard 102 The
Financial Reporting Standard applicable
in the UK and Republic of Ireland (United
Kingdom Generally Accepted
Accounting Practice).
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 believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis for
our opinion. Our audit opinion is
consistent with the additional report to
the audit committee.
Independence
Following the recommendation of the
audit committee, we were appointed by
the Board of Directors on 15 May 2007
to audit the financial statements for the
year ended 30 September 2007 and
subsequent financial periods. The
period of total uninterrupted
engagement, including retenders and
reappointments is 16 years, covering the
years ended 30 September 2007 to 20
September 2022. We remain
independent of the Company in
accordance with the ethical
requirements that are relevant to our
audit of the financial statements in the
UK, including the FRC’s Ethical Standard
as applied to listed public interest
entities, and we have fulfilled our other
ethical responsibilities in accordance
with these requirements. The non-audit
services prohibited by that standard
were not provided to the Company.
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. Our
evaluation of the Directors’ assessment
of the Company’s ability to continue to
adopt the going concern basis of
accounting included:
●● Obtaining the VCT compliance
reports during the year and as at
year end and reviewing the
calculations therein to check that the
Company was meeting its
requirements to retain VCT status;
●● Reviewing the forecasted cash flows
that support the Directors’
assessment of going concern,
challenging assumptions and
judgements made in the forecasts,
and assessing them for
reasonableness. In particular, we
considered the available cash
resources relative to the forecast
expenditure which was assessed
against the prior year for
reasonableness;
●● Evaluating the Directors’ method of
assessing the going concern in light
of market volatility and the present
uncertainties in economic recovery
created by the ongoing matters
including the current situation in
Ukraine/Russia; and
●● Calculating financial ratios to
ascertain the financial health of the
Company.
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 Company’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.
In relation to the Company’s reporting
on how it has applied the UK Corporate
Governance Code, we have nothing
material to add or draw attention to in
relation to the Directors’ statement in the
financial statements about whether the
Directors considered it appropriate to
adopt the going concern basis of
accounting.
Our responsibilities and the
responsibilities of the Directors with
respect to going concern are described
in the relevant sections of this report.
Overview
2022 2021
Key audit
matters
Valuation of
unquoted
investments
3 3
Materiality £1,460,000
(2021:£1,760,000) based on
2% (2021: 2%) of Gross
investments
An overview of the scope of our
audit
Our company audit was scoped by
obtaining an understanding of the
company and its environment including
the company’s system of internal control,
and assessing the risks of material
misstatement in the financial statements.
We also addressed the risk of
management override of internal
controls, including assessing whether
there was evidence of bias by the
Directors that may have represented a
risk of material misstatement. All audit
work was performed by BDO LLP.
Key audit matters
Key audit matters are those matters that,
in our professional judgement, were of
most significance in our audit of the
financial statements of the current
period 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. This matter was
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
this matter.
Independent Auditor’s Report to the Members of
The Income & Growth VCT plc
48
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Independent
Auditor’s Report
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of unquoted
investments
Note 9
We considered the
valuation of unquoted
investments to be the
most significant audit
area as investments
is the most significant
balance in the financial
statements and there
is a high level of
estimation involved
in the investment
valuations.
There is an inherent
risk of management
override arising from the
investments valuations
being prepared by the
investment adviser, who
is remunerated based
on the net asset value
of the company.
For these reasons
we considered the
valuation of unquoted
investments to be a key
audit matter.
A breakdown of the investment portfolio valuation technique is shown below.
Earning multiple
AIM Listed
Revenue multiple
Our sample for the testing of the unquoted investments was stratified according to risk considering, inter
alia, the value of the individual investments, the nature of the investments, the extent of the fair value
movement and the subjectivity of the valuation technique.
For investments in our sample we:
Challenged whether the valuation methodology was the most appropriate in the circumstances under the
International Private Equity and Venture Capital Valuation (“IPEV”) guidelines and applicable accounting
standards;
Recalculated the value attributable to the company, having regard to the application of enterprise value
across the capital structures of the investee companies.
For a sample of investments valued using less subjective valuation techniques (price of recent investment
reviewed for changes in fair value) we:
●● Agreed the cost or price of the recent investment to supporting documentation;
●● Considered whether the investment was an arms length transaction through reviewing the parties
involved in the transaction and checking whether or not they were already investors of the investee
company;
Considered whether there were any indications that the cost or price of the recent investment was
no longer representative of fair value considering, inter alia the current performance of the investee
company and the milestones and assumptions set out in the investment proposal; and
Considered whether the price of the recent investment is supported by alternative valuation techniques.
For a sample of investments that were valued using more subjective techniques (earnings and revenue
multiples) we:
●● Challenged and corroborated inputs to the valuation with reference to management information of
investee companies and market data, including considering the impact of the Covid-19 pandemic and the
current situation in Ukraine/Russia on the valuation. We assessed the impact of estimation uncertainty
concerning these assumptions and the disclosure of these uncertainties in the financial statements;
●● Reviewed the historical financial statements and any recent management information available to
support assumptions about maintainable revenues and earnings used in the valuation;
●● Considered the revenue or earnings multiples applied by reference to observable listed company
market data; and
●● Challenged the consistency and appropriateness of adjustments made to such market data in
establishing the earnings or revenue multiple applied in arriving at the valuations adopted by
agreeing the adjusted multiples to independent sources, the peer group, the market and sector in
which the investee company operates and obtaining independent third party multiples.
Where appropriate, we performed a sensitivity analysis by developing our own point estimate where we
considered that alternative input assumptions could reasonably have been applied and we considered
the overall impact to such sensitivities on the portfolio of investments in determining whether the
valuations as a whole are reasonable and free from bias.
Key observations:
Based on the procedures performed we did not identify any indicators to suggest that the investment
valuations are inappropriate considering the level of estimation uncertainty.
Independent Auditor’s Report
Our application of materiality
We apply the concept of materiality both
in planning and performing our audit,
and in evaluating the effect of
misstatements. We consider materiality
to be the magnitude by which
misstatements, including omissions,
could influence the economic decisions
of reasonable users that are taken on
the basis of the financial statements.
In order to reduce to an appropriately
low level the probability that any
misstatements exceed materiality, we
use a lower materiality level,
performance materiality, to determine
the extent of testing needed.
49
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Independent
Auditor’s Report
Importantly, misstatements below these
levels will not necessarily be evaluated
as immaterial as we also take account of
the nature of identified misstatements,
and the particular circumstances of their
occurrence, when evaluating their effect
on the financial statements as a whole.
Based on our professional judgement,
we determined materiality for the
financial statements as a whole and
performance materiality as follows:
Company
financial
statements
2022
£m
2021
£m
Materiality 1.46
1.76
Basis for
determining
materiality
2% of Gross
investments
Rationale for
the benchmark
applied
In setting materiality,
we have had regard
to the nature and
disposition of the
investment portfolio.
Given that the
VCT’s portfolio
is comprised
of unquoted
investments which
would typically have
a wider spread
of reasonable
alternative possible
valuations, we
have applied a
percentage of 2% of
gross investments,
as asset values are
the primary focus of
the users of these
financial statements
Performance
materiality
1.09
1.32
Basis for
determining
performance
materiality
75% of materiality
on the basis of our
risk assessment,
together with our
assessment of the
Company’s overall
control environment,
the expected total
value of known and
likely misstatements,
based on past
experience, and the
level of transactions
in the year.
Lower testing threshold
We determined that for Revenue return
before tax, a misstatement of less than
materiality for the financial statements as
a whole, could influence users of the
financial statements as it is a measure of
the Company’s performance of income
generated from its investments after
expenses. As a result, we determined a
lower testing threshold for those items
impacting revenue return of £146,000
based on 10% of Materiality (2021:
£96,000 based on 10% of revenue
return before tax.
Reporting threshold
We agreed with the Audit Committee
that we would report to them all
individual audit differences in excess of
£73,000 (2021: £35,000). We also
agreed to report differences below this
threshold that, in our view, warranted
reporting on qualitative grounds.
Other information
The directors are responsible for the
other information. The other information
comprises the information included in
the annual report and financial
statements other than the financial
statements and our auditor’s report
thereon. 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 course of 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 this gives
rise to a material misstatement in the
financial statements themselves. If,
based on the work we have 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.
Corporate governance statement
The Listing Rules require us to review
the Directors’ statement in relation to
going concern, longer-term viability and
that part of the Corporate Governance
Statement relating to the Company’s
compliance with the provisions of the UK
Corporate Governance Code specified
for our review.
Based on the work undertaken as part
of our audit, we have concluded that
each of the following elements of the
Corporate Governance Statement is
materially consistent with the financial
statements or our knowledge obtained
during the audit.
Going concern and longer-term
viability
●● The Directors’ statement with
regards to the appropriateness of
adopting the going concern basis of
accounting and any material
uncertainties identified; and
●● The Directors’ explanation as to their
assessment of the Company’s
prospects, the period this
assessment covers and why the
period is appropriate.
Other Code provisions
●● Directors’ statement on fair,
balanced and understandable;
●● Board’s confirmation that it has
carried out a robust assessment of
the emerging and principal risks;
●● The section of the annual report that
describes the review of
effectiveness of risk management
and internal control systems; and
●● The section describing the work of
the Audit Committee.
Other Companies Act 2006
reporting
Based on the responsibilities described
below and our work performed during
the course of the audit, we are required
by the Companies Act 2006 and ISAs
(UK) to report on certain opinions and
matters as described below.
Strategic report and Directors’
report
In our opinion, based on the work
undertaken in the course of the audit:
●● the information given in the Strategic
report and the Directors’ report for
the financial year for which the
financial statements are prepared is
consistent with the financial
statements; and
●● the Strategic report and the
Directors’ report have been
prepared in accordance with
applicable legal requirements.
In the light of the knowledge and
understanding of the Company and its
environment obtained in the course of
the audit, we have not identified material
50
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Independent Auditor’s Report
misstatements in the strategic report or
the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’
remuneration report to be audited has
been properly prepared in accordance
with the Companies Act 2006.
Matters on which we are required
to report by exception
We have nothing to report in respect of
the following matters in relation to which
the Companies Act 2006 requires us to
report to you if, in our opinion:
●● adequate accounting records have
not been kept, or returns adequate
for our audit have not been received
from branches not visited by us; or
●● the financial statements and the part
of the Directors’ remuneration report
to be audited are not in agreement
with the accounting records and
returns; or
●● certain disclosures of Directors’
remuneration specified by law are
not made; or
●● we have not received all the
information and explanations we
require for our audit.
Responsibilities of Directors
As explained more fully in the Statement
of Directors’ Responsibilities, 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 is
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 the aggregate, they
could reasonably be expected to
influence the economic decisions of
users taken on the basis of these
financial statements.
Extent to which the audit was
capable of detecting irregularities,
including fraud
We gained an understanding of the legal
and regulatory framework applicable to
the Company and the industry in which it
operates, and considered the risk of
acts by the Company which were
contrary to applicable laws and
regulations, including fraud. The
significant laws and regulations were
considered to be the Companies Act
2006, the FCA listing and DTR rules, the
principles of the UK Corporate
Governance Code, industry practice
represented by the AIC SORP and
FRS102. We also considered the
Company’s qualification as a VCT under
UK tax legislation as any breach of this
would lead to the Company losing
various deductions and exemptions from
corporation tax.
Our procedures included:
●● obtaining an understanding of the
control environment in monitoring
compliance with laws and
regulations;
●● agreement of the financial statement
disclosures to underlying supporting
documentation;
●● enquiries of the investment adviser
and those charged with governance
relating to the existence of any
non-compliance with laws and
regulations;
●● assessing management’s experts for
their independence, objectivity and
competence, and obtaining the VCT
compliance reports prepared by
management’s expert during the
year and as at year end and
reviewing their calculations to check
that the Company was meeting its
requirements to retain VCT status;
and
●● reviewing minutes of board meetings
and legal correspondence and
invoices throughout the period for
instances of non-compliance with
laws and regulations and fraud.
We assessed the susceptibility of the
financial statement to material
misstatement including fraud and
considered the fraud risk areas to be the
valuation of unquoted investments and
management override of controls.
Our procedures included:
●● the procedures set out in the Key
audit matters section above;
●● obtaining independent evidence to
support the ownership of a sample
of investments;
●● recalculating investment
management fees in total;
●● made enquiries of the investment
advisor about any known, suspected
and alleged fraud;
●● obtaining independent confirmation
of bank balances; and
●● testing journals which met a defined
risk criteria by agreeing to
supporting documentation and
evaluating whether there was
evidence of bias by the Investment
Advisor and Directors that
represented a risk of material
misstatement due to fraud.
We also communicated relevant
identified laws and regulations and
potential fraud risks to all engagement
team members and remained alert to
any indications of fraud or non-
compliance with laws and regulations
throughout the audit.
Our audit procedures were designed to
respond to risks of material
misstatement in the financial statements,
recognising that the risk of not detecting
a material misstatement due to fraud is
higher than the risk of not detecting one
resulting from error, as fraud may involve
deliberate concealment by, for example,
forgery, misrepresentations or through
collusion. There are inherent limitations
in the audit procedures performed and
the further removed non-compliance
with laws and regulations is from the
events and transactions reflected in the
financial statements, the less likely we
are to become aware of it.
A further description of our
responsibilities is available on the
Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the
Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit
work has been undertaken so that we
might state to the Company’s members
those matters we are required to state to
them in an auditor’s report and for no
Independent
Auditor’s Report
51
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Independent
Auditor’s Report
other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company and the Company’s
members as a body, for our audit work,
for this report, or for the opinions we
have formed.
Vanessa Jayne Bradley
(Senior Statutory Auditor)
For and on behalf of BDO LLP,
Statutory Auditor
London, United Kingdom
16 December 2022
BDO LLP is a limited liability partnership
registered in England and Wales (with
registered number OC305127).
52
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Income Statement for the year ended 30 September 2022
Year ended 30 September 2022 Year ended 30 September 2021
Notes Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Net investment portfolio (losses)/gains 9 - (10,847,681) (10,847,681) - 43,637,384 43,637,384
Income 3 2,818,938 - 2,818,938 1,953,493 - 1,953,493
Investment Adviser’s fees 4a (658,973) (1,976,919) (2,635,892) (548,812) (1,646,435) (2,195,247)
Investment Adviser’s performance fees 4b - - - - (1,095,268) (1,095,268)
Other expenses 5 (539,819) - (539,819) (444,069) - (444,069)
(Loss)/profit on ordinary activities before
taxation 1,620,146
(12,824,600)
(11,204,454) 960,612
40,895,681 41,856,293
Tax on (loss)/profit on ordinary activities 6 (86,613) 86,613 - (50,487) 50,487 -
(Loss)/profit for the year and total
comprehensive income 1,533,533
(12,737,987)
(11,204,454)
910,125
40,946,168
41,856,293
Basic and diluted earnings per ordinary share: 7 1.23p (10.21)p (8.98)p 0.77p 34.57p 35.34p
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net
investment portfolio (losses)/gains (unrealised losses and realised gains on investments) and the proportion of the Investment
Adviser’s fee and performance fee charged to capital.
The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial
Reporting Standards (“FRS”). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of
Recommended Practice (“SORP”) (updated in April 2021) by the Association of Investment Companies (“AIC”), supplementary
information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside
the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe
appropriate in assessing the Company’s compliance with certain requirements set out in Section 274 Income Tax Act 2007.
All the items in the above statement derive from continuing operations of the Company. No operations were acquired or
discontinued in the year.
The Notes on pages 57 to 76 form part of these Financial Statements.
Financial Statements
Financial Statements
53
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
Balance Sheet as at 30 September 2022 Company No. 4069483
as at
30 September 2022
as at
30 September 2021
Notes £ £
Fixed assets
Investments at fair value 9 73,080,003 88,145,889
Current assets
Debtors and prepayments 11 869,192 2,459,633
Current asset investments 12 33,569,357 27,194,727
Cash at bank and in hand 12 1,209,273 2,653,455
35,647,822 32,307,815
Creditors: amounts falling due within one year 13 (312,375) (1,367,430)
Net current assets 35,335,447 30,940,385
Net assets 108,415,450 119,086,274
Capital and reserves
Called up share capital 14 1,294,819 1,185,549
Capital redemption reserve 48,343 36,682
Share premium reserve 24,765,043 13,328,900
Revaluation reserve 28,034,730 43,197,940
Special distributable reserve 40,837,774 50,884,712
Profit and loss account 13,434,741 10,452,491
Equity shareholders’ funds 108,415,450 119,086,274
Basic and diluted net asset value per share
Ordinary shares 15 83.73p 100.45p
The Notes on pages 57 to 76 form part of these Financial Statements.
The Financial Statements were approved and authorised for issue by the Board of Directors on 16 December 2022 and were
signed on its behalf by:
Maurice Helfgott
Chair
Non-distributable reserves Distributable reserves
Called up Capital Share Special Realised Revenue
share redemption premium Revaluation distributable capital reserve
Notes capital reserve reserve reserve reserve reserve Total
(Note a) (Note b) (Note b)
£ £ £ £ £ £ £ £
At 1 October 2021 1,185,549 36,682 13,328,900 43,197,940 50,884,712 8,511,877 1,940,614 119,086,274
Comprehensive
income for the year
(Loss)/profit for the
year - - - (13,164,787) - 426,800 1,533,533 (11,204,454)
Total comprehensive
income for the year - - - (13,164,787) - 426,800 1,533,533 (11,204,454)
Contributions by and
distributions to owners
Shares issued
via Offer for
Subscription (Note d)
14 101,920 - 9,898,080 - - - - 10,000,000
Issue costs and
faciliations fees
on Offer for
Subscription (Note d)
14 - - (250,968) - (81,278) - - (332,246)
Dividends re-invested
into new shares
14 19,011 - 1,789,031 - - - - 1,808,042
Shares bought
back (Note e) 14 (11,661) 11,661 - - (1,031,358) - - (1,031,358)
Dividends paid 8 - - - - (4,309,323) (4,955,404) (646,081) (9,910,808)
Total contributions by
and distributions to
owners 109,270 11,661
11,436,143
- (5,421,959) (4,955,404) (646,081) 533,630
Other movements
Realised losses
transferred to special
reserve (Note a)
- - - - (4,624,979) 4,624,979 - -
Realisation
of previously
unrealised gains - - - (1,998,423) - 1,998,423 - -
Total other movements - -
-
(1,998,423)
(4,624,979) 6,623,402 - -
At 30 September 2022
1,294,819
48,343
24,765,043
28,034,730 40,837,774 10,606,675 2,828,066 108,415,450
Notes
a) The Company’s special reserve is available to fund buybacks of shares as and when it is considered by the Board to be in the
interests of Shareholders, and to absorb any existing and future realised losses and for other corporate purposes. At 30 September
2022, the Company has a special reserve of £40,837,774, all of which arises from shares issued more than three years after the end
of the financial year in which they were issued. Reserves originating from share issues are not distributable under VCT rules if they
are within three years of the end of an accounting period in which the shares were issued. The total transfer of £4,624,979 from the
realised capital reserve to the special distributable reserve above is the total of realised losses incurred by the Company in the year.
b) The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company shown in the
Balance Sheet.
c) The shareholders authorised the Company to purchase its own shares for cancellation pursuant to section 701 of the Companies Act
2006 at the Annual General Meeting held on 23 February 2022. The authority was limited to a maximum number of 17,771,376
shares (this being approximately 14.99% of the issued share capital at the date of the Notice of the meeting).The minimum price
which may be paid for a share is 1 penny per share, the nominal value thereof. The maximum price that may be paid for a share is an
amount that is not more than 5% above the average of the middle market quotations of the shares as derived from the Daily Official
List of the London Stock Exchange for the five business days preceding such purchase. The authorities provide that the Company
may make a contract or contracts to purchase its own shares prior to the expiry of the authority which may be executed in whole or
part after the expiry of such authority, and may purchase its shares in pursuance of any such contract.
d) Under the Offer for Subscription launched on 20 January 2022, a total of 10,191,964 (2021: nil) ordinary shares were allotted at an average
effective offer price of 94.86 pence per share, raising net funds of £9,667,754 (2021: £nil). This figure is net of issue costs of £250,968 and
facilitation fees of £81,278.
e) During the year, the Company repurchased 1,166,089 of its own shares at the prevailing market price for a total cost of £1,031,358,
which were subsequently cancelled. The difference between the figure shown above of £1,031,358, and that per the Statement of
Cash Flows of £1,031,123 is due to a share buyback creditor of £41,664 at the previous year end, partially offset by a share buyback
creditor of £41,899 at the year-end.
The Notes on pages 57 to 76 form part of these Financial Statements.
54
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Financial Statements
Statement of Changes in Equity for the year ended 30 September 2022
Non-distributable reserves Distributable reserves
Called up Capital Share Special Realised Revenue
share redemption premium Revaluation distributable capital reserve
capital reserve reserve reserve reserve reserve Total
£ £ £ £ £ £ £ £
At 1 October 2020 1,186,617 23,827 12,283,303 6,862,342 54,626,873 5,938,001 2,212,467 83,133,430
Comprehensive income
for the year
Profit for the year - - - 39,475,833 - 1,470,335 910,125 41,856,293
Total comprehensive
income for the year - - - 39,475,833 - 1,470,335 910,125 41,856,293
Contributions by and
distributions to owners
Dividends re-invested into
new shares 11,787 - 1,045,597 - - - - 1,057,384
Shares bought back (12,855) 12,855 - - (1,050,945) - - (1,050,945)
Dividends paid - - - - - (4,727,910) (1,181,978) (5,909,888)
Total contributions by and
distributions to owners
(1,068) 12,855 1,045,597 - (1,050,945) (4,727,910) (1,181,978) (5,903,449)
Other movements
Realised losses transferred
to special reserve - - - - (2,691,216) 2,691,216 - -
Realisation of previously
unrealised gains - - - (3,140,235) - 3,140,235 - -
Total other movements - - - (3,140,235) (2,691,216) 5,831,451 - -
At 30 September 2021
1,185,549
36,682 13,328,900 43,197,940 50,884,712 8,511,877 1,940,614 119,086,274
The composition of each of these reserves is explained below:
Called up share capital - The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for
Subscription or Dividend Investment Scheme or reduced due to shares bought back and cancelled by the Company.
Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the company’s
capital is maintained.
Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted
under recent Offers for Subscription and the Company’s Dividend Investment Scheme.
Revaluation reserve - Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve,
except to the extent that the diminution is deemed permanent. In accordance with stating all investments at fair value through profit and
loss (as recorded in Note 9), all such movements through both revaluation and realised capitl reserves are shown within the Income
Statement for the year.
Special distributable reserve - This reserve is created from cancellations of the balances upon the Share premium reserve, which are
transferred to this reserve from time to time. The cost of share buybacks is charged to this reserve. In addition, any realised losses on
the sale or impairment of investments (excluding transaction costs), 75% of the Investment Adviser fee expense and 100% of the
Investment Adviser performance fee expense, and the related tax effect, are transferred from the realised capital reserve to this reserve.
The cost of any IFA facilitation fee payable as part of the Offer for Subscription is also charged to this reserve.
Realised capital reserve - The following are accounted for in this reserve:
- Gains and losses on realisation of investments;
- Permanent diminution in value of investments;
- Transaction costs incurred in the acquisition and disposal of investments;
- 75% of the Investment Adviser fee expense and 100% of any performance fee payable, together with the related tax effect to this
reserve in accordance with the policies, and
- Capital dividends paid.
Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve, as well as 25% of the Investment
Adviser fee together with the related tax effect, as well as income dividends paid that are classified as revenue in nature.
The Notes on pages 57 to 76 form part of these Financial Statements.
55
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
Statement of Changes in Equity for the year ended 30 September 2021
Notes
Year ended
30 September 2022
Year ended
30 September 2021
£ £
Cash flows from operating activities
(Loss)/profit for the financial year (11,204,454) 41,856,293
Adjustments for:
Net investment portfolio losses/(gains) 10,847,681 (43,637,384)
(Increase)/decrease in debtors (654,550) 183,844
(Decrease)/increase in creditors and accruals (1,055,290) 1,104,812
Net cash outflow from operating activities (2,066,613) (492,435)
Cash flows from investing activities
Purchase of investments 9 (7,336,441) (8,087,743)
Disposal of investments 9 13,799,637 12,195,381
Net cash inflow from investing activities 6,463,196 4,107,638
Cash flows from financing activities
Shares issued as part of Offer for subscription 10,000,000 -
Issue costs and facilitation fees as part of Offer for subscription (332,246) -
Equity dividends paid 8 (8,102,766) (4,852,504)
Purchase of own shares 14 (1,031,123) (1,103,332)
Net cash inflow/(outflow) from financing activities 533,865 (5,955,836)
Net increase/(decrease) in cash and cash equivalents 4,930,448 (2,340,633)
Cash and cash equivalents at start of year 26,696,413 29,037,046
Cash and cash equivalents at end of year 31,626,861 26,696,413
Cash and cash equivalents comprise:
Cash at bank and in hand 12 1,209,273 2,653,455
Cash equivalents 12 30,417,588 24,042,958
The Notes on pages 57 to 76 form part of these Financial Statements.
56
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Financial Statements
Statement of Cash Flows for the year ended 30 September 2022
1 Company Information
The Income and Growth VCT plc is a public limited company incorporated in England, registration number 4069483. The
registered office is 5 New Street Square, London, EC4A 3TW.
2 Basis of preparation
A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out at
the start of the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included
within an outlined box at the top of each relevant Note.
These Financial Statements have been prepared in accordance with applicable United Kingdom accounting standards,
including Financial Reporting Standard 102 (“FRS102”), with the Companies Act 2006 and the 2014 Statement of
Recommended practice, ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (‘the SORP’)
(updated in April 2021) issued by the Association of Investment Companies. The Financial Statements have been prepared
on the historical cost basis except for the modification to a fair value basis for certain financial instruments which are
disclosed under FRS102 s11/12 as shown in Note 16.
After performing the necessary enquiries, the Directors have undertaken an assessment of the Company’s ability to meet its
liabilities as they fall due. The Company has significant cash and liquid resources and no external debt or capital
commitments. The Company’s cash flow forecasts, which consider levels of anticipated new and follow-on investment, as
well as investment income and annual running cost projections, are discussed at each quarterly Board meeting and, in
particular, have been considered in light of the current economic environment. Following this assessment, the Directors have
a reasonable expectation that the Company will have adequate resources to continue to meet its liabilities for at least 12
months from the date of these Financial Statements. The Directors therefore consider the preparation of these Financial
Statements on a going concern basis to be appropriate.
3 Income
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on
unquoted equity shares are brought into account when the Company’s right to receive payment is established and there
is no reasonable doubt that payment will be received.
Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is
doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a
redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital
as appropriate once redemption is reasonably certain. When a redemption premium is designed to protect the value of
the instrument holder’s investment rather than reflect a commercial rate of revenue return the redemption premium is
recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in
nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended
30September 2022 has been classified as capital and has been included within realised gains on investments.
57
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
Notes to the Financial Statements for the year ended 30 September 2022
3 Income (continued)
2022
£
2021
£
Income from bank deposits 38,201 28,376
Income from investments
– from equities 1,164,287 694,891
– from OEIC funds 203,099 4,103
– from loan stock 1,413,351 1,220,332
2,780,737 1,919,326
Other income - 5,791
Total income 2,818,938 1,953,493
Total income comprises
Revenue dividends received 1,367,386 698,994
Interest 1,451,552 1,248,708
Other income - 5,791
Total Income 2,818,938 1,953,493
Income from investments comprises
Listed UK securities 16,000 12,500
Listed overseas securities 203,099 4,103
Unlisted UK securities 2,565,638 1,902,723
Total investment income 2,780,737 1,919,326
Total loan stock interest due but not recognised in the year was £555,162 (2021: £784,958) due to uncertainty over its
recoverability. The decrease is due to the removal of a number of investee company provisions that were considered
appropriate in the previous year in light of the current economic conditions resulting from the COVID-19 pandemic.
4 Investment Adviser’s fees and performance fees
25% of the Investment Adviser’s fees are charged to the revenue column of the Income Statement, while 75% is charged
against the capital column of the Income Statement. This is in line with the Board’s expected long-term split of returns
from the investment portfolio of the Company.
100% of any performance incentive fee payable for the year is charged against the capital column of the Income
Statement, as it is based upon the achievement of capital growth.
a) Investment Adviser’s fees
Revenue Capital Total Revenue Capital Total
2022 2022 2022 2021 2021 2021
£ £ £ £ £ £
Gresham House Asset
Management Limited 658,973 1,976,919 2,635,892 548,812 1,646,435 2,195,247
Under the terms of a revised investment management agreement dated 29 March 2010, Gresham House Asset Management
Limited provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2.4% per
annum of closing net assets, calculated on a quarterly basis by reference to the net assets at the end of the preceding
quarter. One sixth of this fee is subject to minimum and maximum limits of £150,000 (2021: £150,000) and £170,000 (2021:
£170,000) per annum respectively.
The Investment Adviser fees disclosed above are stated after applying a cap on expenses, if applicable, excluding IFA trail
commission and exceptional items set at 3.25% of closing net assets at the year end. In accordance with the investment
management agreement any excess expenses are wholly borne by the Investment Adviser. The excess expenses during the
year attributable to the Investment Adviser amounted to £nil (2021: £nil).
58
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Financial Statements
Notes to the Financial Statements for the year ended 30 September 2022
b) Investment Adviser’s performance fees
Revenue Capital Total Revenue Capital Total
2022 2022 2022 2021 2021 2021
£ £ £ £ £ £
Gresham House Asset
Management Limited - - - - 1,095,268 1,095,268
On 30 September 2014, an incentive fee agreement was signed between the Board and Mobeus Equity Partners LLP with
effect from 1 October 2013, to amend and replace the previous agreement. This agreement was novated to Gresham House
Asset Management Limited following its purchase of the Mobeus VCT fund and investment management business on
30September 2021.
Any payment under the new incentive agreement is now 15% of net realised gains for each year, payable in cash. It is payable
only if Cumulative Net Asset Value (NAV) total return per share (being the closing NAV at a year end plus cumulative
dividends paid to that year end, since 1 October 2013) equals or exceeds a Target Return. The Target Return is the greater of
two targets, being:
i) compound growth of 6% per annum (but 5% per annum for the year ended 30 September 2014 only), before deducting
any incentive fee payable (for the year of calculation only) in Cumulative NAV total return per share; or
ii) the cumulative percentage change in the Consumer Prices Index since 1 October 2013 to the relevant financial year end,
the resultant figure then being multiplied by (100+A)/100, where A is the number of full 12 month periods (or part thereof)
that have passed between 1 October 2013 and the relevant financial year end (the result being that the cumulative
increase in inflation is further uplifted to include a 1% above inflation increase per annum in the Target Return).
Both measures of Target Return are applied to the same opening base, being NAV per share as at 30 September 2013 of
113.90 pence. The objective of this Target Return is to enable shareholders to benefit from a cumulative NAV return of at least
6% per annum (5% in the financial year ended 30 September 2014), before any incentive fee is payable. Once a payment has
been made, cumulative NAV total return is calculated after deducting past years’ incentive fees paid and payable.
Under this agreement, any fee payments to Gresham House are subject to an annual cap of an amount equal to 2% of the net
assets of the Company as at the immediately preceding year end. Any excess over the 2% remains payable to Gresham
House in the following year(s), subject to the 2% annual cap in such subsequent year(s) and after any payment in respect of
such subsequent year(s).
For the year ended 30 September 2022, the Target Return based upon Cumulative NAV total return per share under i) above
was a 6% uplift on the previous year’s Target Return of 179.83 pence, being 190.62 pence and exceeds the target return
compared to a Consumer Price basis under ii) above of 155.10 pence. As Cumulative Total NAV return is 187.73 pence per
share at the year end, and is less than the Target Return under i) above of 190.62 pence per share, no fee is therefore
payable (2021: £1,095,268).
c) Offer for Subscription fees
2022
£m
2021
£m
Funds raised by I&G VCT 9.67 -
Offer costs payable to Gresham House at 3.00% of funds raised by I&G VCT 0.29 -
Under the terms of an Offer for Subscription, with the other Mobeus VCTs, launched on 20 January 2022, Gresham House
was entitled to fees of 3.00% of the investment amount received from investors. This amount totalled £1.05 million across all
four VCTs, out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated
under the terms of the Offer.
59
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
5 Other expenses
All expenses are accounted for on an accruals basis. Expenses are charged wholly to revenue, with the exception of
expenses incidental to the acquisition or disposal of an investment, which are written off to the capital column of the
Income Statement or deducted from the disposal proceeds as appropriate.
2022
£
2021
£
Directors’ remuneration (including NIC of £8,060 (2021: £9,314)) (Note a) 115,681 132,314
IFA trail commission 99,847 89,669
Broker’s fees 12,000 12,000
Auditor’s fees – Audit of company (excluding VAT) 39,703 31,002
– audit related assurance services (Note b) (excluding VAT) 8,200 5,638
– other services (Note c) (excluding VAT) - 4,000
VCT monitoring fees 10,800 10,800
Registrar’s fees 54,292 49,707
Printing 57,304 36,726
Legal & professional fees 25,629 7,614
Directors’ insurance 11,258 8,245
Listing and regulatory fees 69,062 46,656
Sundry 36,043 9,698
Other expenses 539,819 444,069
Notes:
a) Directors’ remuneration is a related party transaction, see analysis of Directors’ fees payable and their interests in the shares of
the Company in the Directors’ Remuneration Report on pages 43 to 45, which excludes NIC included above. The key
management personnel are the three non-executive Directors. The Company has no employees. £nil is outstanding and due to
the Directors at 30 September 2022 (2021: £5,000).
b) The audit-related assurance services are in relation to a limited scope engagement in respect of the Financial Statements within
the Company’s Interim Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor
independence is maintained.
c) Included within this figure are fees of £nil inclusive of VAT (2021: £4,800) payable to the Auditor relating to the review of the
calculation of the Investment Adviser’s performance fee.
6 Taxation on ordinary activities
The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is
calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.
Any tax relief obtained in respect of adviser fees allocated to capital is reflected in the capital reserve – realised and a
corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is
reduced as a result of these capital expenses.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet
date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the
future have occurred at the balance sheet date. Timing differences are differences between the Company’s taxable profits
and its results as stated in the financial statements that arise from the inclusion of gains and losses in the tax assessments
in periods different from those in which they are recognised in the Financial Statements.
Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences
are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance
sheet date. Deferred tax is measured on a non-discounted basis.
A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be
available against which the asset can be utilised.
60
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
6 Taxation on ordinary activities (continued)
2022
Revenue
£
2022
Capital
£
2022
Total
£
2021
Revenue
£
2021
Capital
£
2021
Total
£
a) Analysis of tax charge:
UK Corporation tax on profits/(losses) for
the year 86,613 (86,613) - 50,487 (50,487) -
Total current tax charge/(credit) 86,613 (86,613) - 50,487 (50,487) -
Corporation tax is based on a rate of
19.0% (2021: 19.0%)
b) Profit/(loss) on ordinary activities
before tax 1,620,146
(12,824,600)
(11,204,454) 960,612 40,895,681 41,856,293
Profit/(loss) on ordinary activities multiplied
by main company rate of corporation tax
in the UK of 19.0% (2021: 19.0%) 307,828 (2,436,674) (2,128,846) 182,516 7,770,179 7,952,695
Effect of:
UK dividends (221,215) - (221,215) (132,029) - (132,029)
Net investment portfolio losses/(gains) not
allowable/taxable - 2,061,059 2,061,059 - (8,291,103) (8,291,103)
Losses not utilised - 289,002 289,002 - 470,437 470,437
Actual current tax charge 86,613 (86,613) - 50,487 (50,487) -
Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised.
No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the
Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital Trust.
There is no potential liability to deferred tax (2021: £nil). There is an unrecognised deferred tax asset of £2,010,000 (2021:
£1,630,000). The deferred tax asset relates to unrelieved management expenses and is not recognised because the
Company may not generate sufficient taxable income in the foreseeable future to utilise these expenses.
7 Basic and diluted earnings and return per share
2022
£
2021
£
Total earnings after taxation: (11,204,454) 41,856,293
Basic and diluted earnings per share (Note a) (8.98)p 35.34p
Revenue earnings from ordinary activities after taxation 1,533,533 910,125
Basic and diluted revenue earnings per share (Note b) 1.23p 0.77p
Net investment portfolio (losses)/gains (10,847,681) 43,637,384
Capitalised Investment Adviser fees and performance fees less taxation (1,890,306) (2,691,216)
Total capital earnings (12,737,987) 40,946,168
Basic and diluted capital earnings per share (Note c) (10.21)p 34.57p
Weighted average number of shares in issue in the year 124,696,827 118,422,497
Notes:
a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.
b) Revenue earnings per share is the revenue earnings after taxation divided by the weighted average number of shares in issue.
c) Capital earnings per share is the total capital earnings after taxation divided by the weighted average number of shares in issue.
61
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
8 Dividends paid and payable
Dividends payable are recognised as distributions in the financial statements when the Company’s liability to pay them
has been established. This liability is established for interim dividends when they are paid.
The Company’s status as a VCT means it has to comply with Section 259 of the Income Tax Act 2007, which requires that
no more than 15% of the income from shares and securities in a year can be retained from the revenue available for
distribution for the year. Accordingly, the Board is required to determine the amount of minimum income dividend.
Amounts recognised as distributions to Equity Shareholders in the year:
Dividend Type
For the year ended
30 September
Pence
per share Date Paid
2022
£
2021
£
Interim Income 2021 1.00p 23 July 2021 - 1,181,978
Interim Capital 2021 4.00p 23 July 2021 - 4,727,910
Interim Capital 2021 2.00p 07 January 2022 2,371,079 -
Interim Special 2021 2.00p 07 January 2022 2,371,079 -
Interim Income 2022 0.50p 08 July 2022 646,081 -
Interim Capital 2022 2.00p 08 July 2022 2,584,325 -
Interim Special 2022 1.50p 08 July 2022 1,938,244 -
9,910,808 5,909,588
For the year ended 30 September 2022 £9,910,808 (2021: £5,909,888) disclosed above differs to that shown in the
Statement of Cash Flows of £8,102,766 (2021: £4,852,504) due to £1,808,042 (2021: £1,057,384) of new shares issued as part
of the Company’s Dividend Investment Scheme.
2022
Revenue
£
2022
Capital
£
2022
Total
£
2021
Revenue
£
2021
Capital
£
2021
Total
£
Proposed distribution to equity holders
at the year-end
Second interim dividend for the year
ended 30 September 2022 of 4.00p per
ordinary share, of which 0.75p income,
2.50p capital and 0.75p special
971,114 4,208,162 5,179,276 - - -
Second interim dividend for the year
ended 30 September 2021 of 4.00p
(capital) per ordinary share
- - - - 4,742,195 4,742,195
Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the
requirements of section 274 of the Income Tax Act 2007 are considered.
Recognised income distributions in the Financial Statements for the year
2022
£
2021
£
Revenue available for distribution by way of dividends for the year 1,533,533 910,125
Interim income dividend for the year - 0.50p (2021: 1.00p) 646,081 1,181,978
Second interim income dividend for the year - 0.75p (2021: nil) 971,114 -
Total income dividends for the year 1,617,195 1,181,978
62
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
9 Investments at fair value
The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at
“fair value through profit and loss” (FVTPL). All investments held by the Company are classified as FVTPL and measured in
accordance with the International Private Equity and Venture Capital Valuation (“IPEV”) guidelines, as updated in December
2018. This classification is followed as the Company’s business is to invest in financial assets with a view to profiting from their
total return in the form of capital growth and income.
Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.
For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock
Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted
investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time
frame determined by the relevant market. Where the terms of a disposal state that consideration may be received at some
future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair
value discounted for the time value of money may be recognised through the Income Statement. In other cases, the proceeds
will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will
be received.
Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate
valuation techniques, which are consistent with the IPEV guidelines:
(i) Each investment is considered as a whole on a ‘unit of account’ basis, i.e. that the value of each portfolio company is
considered as a whole, alongside consideration of:-
The price of new investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair
value at the date of the transaction. The inputs that derived the investment price are calibrated within individual valuation
models and at subsequent measurement dates, are reconsidered for any changes in light of more recent events or
changes in light of more recent events or changes in the market performance of the investee company. The valuation
bases used are the following:
a multiple basis. The shares may be valued by applying a suitable price-earnings ratio, revenue or gross profit multiple to
that company’s historic, current or forecast post-tax earnings before interest and amortisation, or revenue, or gross profit
(the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference
identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability).
or:-
where a company’s underperformance against plan indicates a diminution in the value of the investment, provision
against cost is made, as appropriate.
(ii) Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan
stock investments are accrued at fair value when the Company receives the right to the premium and when considered
recoverable.
(iii) Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a
discounted cash flow, net asset valuation, realisation proceeds or a weighted average of these bases may be applied.
Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation
reserves and movements in the period are shown in the Income Statement.
All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the
Income Statement.
A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where
the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised
loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement
with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised.
This is based upon an assessment of objective evidence of that investment’s future prospects, to determine whether there is
potential for the investment to recover in value.
The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to
determine the valuation.
- Level 1 – Fair value is measured based on quoted prices in an active market.
- Level 2 – Fair value is measured based on directly observable current market prices or indirectly being derived from market
prices.
- Level 3 – Fair value is measured using valuation techniques using inputs that are not based on observable market data.
63
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
9 Investments at fair value (continued)
Movements in investments during the year are summarised as follows:
Traded on
AIM
£
Unquoted
equity
shares
£
Unquoted
preference
shares
£
Unquoted
Loan Stock
£
Total
£
Cost at 30 September 2021 1,993,170 31,854,268 1,240,546 15,417,064 50,505,048
Permanent impairment at 30 September 2021 (Note e) (500,000) (4,969,611) (301) (87,187) (5,557,099)
Unrealised gains/(losses) at 30 September 2021 15,348,463 30,897,825 159,947 (3,208,295) 43,197,940
Valuation at 30 September 2021 16,841,633 57,782,482 1,400,192 12,121,582 88,145,889
Purchases at cost - 5,321,660 779,200 1,235,581 7,336,441
Sale proceeds (Note b) - (8,678,964) - (2,875,682) (11,554,646)
Reclassification at value (Note c) - 578,640 - (578,640) -
Net realised gains on investments (Note a) - 2,317,106 - - 2,317,106
Net unrealised (losses)/gains on investments (Note d) (10,813,492) (2,030,065) 143,063 (464,294) (13,164,787)
Valuation at 30 September 2022 6,028,141 55,290,859 2,322,456 9,438,547 73,080,003
Cost at 30 September 2022 1,993,170 35,098,554 2,019,746 13,401,047 52,512,517
Permanent impairment at 30 September 2022 (Note e)
(500,000) (5,875,235) (1,955) (1,090,054) (7,467,244)
Unrealised gains/(losses) at 30 September 2022 4,534,971 26,067,540 304,665 (2,872,446) 28,034,730
Valuation at 30 September 2022 6,028,141 55,290,859 2,322,456 9,438,547 73,080,003
Net realised gains on investments of £2,317,106 together with net unrealised losses on investments of £13,164,787 equal net
investment portfolio losses of £10,847,681 as shown in the Income Statement.
A full breakdown of the increases and decreases in unrealised valuations of the portfolio is seen in the Investment Portfolio
Summary on pages 22 to 27.
64
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
Major movements in investments
Note a) Disposals of investment portfolio companies during the year were:
Company Type
Investment
Cost
£
Disposal
Proceeds
£
Valuation at
30 September
2021
£
Realised
gain/(loss) in
year
£
Media Business Insight Realisation 3,666,556 6,023,746 4,199,330 1,824,416
Vian Marketing Limited
(trading as Red Paddle Co) Realisation 837,888 5,522,643 4,324,963 1,197,680
Muller EV Limited
(trading as Andersen EV)
1
Permanent
impairment - - 713,247
1
(713,247)
Other capital proceeds Various 824,528 8,257 - 8,257
5,328,972 11,554,646 9,237,540 2,317,106
1
- includes new investment of £396,247 during the year
Note b) Sale proceeds above of £11,554,646 is less than that shown in the Statement of Cash Flows of £13,799,637 by £2,244,991.
This is comprised of proceeds received in respect of Proactive Group (£2,239,490) and Vectair Holdings (£5,501) both held as
debtors at the previous year-end and received during the year.
Note c) The amount of £578,640 transferred from unquoted loan stock to unquoted equity shares represents the conversion of
the loans held in two portfolio companies into equity shares during the year.
Note d) Within net unrealised loss of £13,164,787 for the year, the significant decreases in value compared to last year were as
follows: £9,672,498 in Virgin Wines UK plc, £3,598,238 in My Tutorweb Limited, £1,644,076 in End Ordinary Group Limited
(trading as Buster & Punch), £1,576,222 in Manufacturing Services Investment Limited (trading as Wetsuit Outlet) and £1,043,767
in Data Discovery Solutions Limited (trading as Active Navigation). These losses were partially offset by unrealised gains in
valuation compared to last year, including: £2,843,736 in Preservica Limited, £1,721,347 in EOTH Limited and £1,396,918 in Master
Removers Group (2019) Limited.
Note e) During the year, permanent impairments of the cost of investments have increased from £5,557,099 to £7,467,244. The
increase of £2,734,673 is due to the impairments of three companies offset by the removal of the cost of £824,528 of two
companies that were impaired in a previous year that have been liquidated in the year,
65
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
10 Significant interests
At 30 September 2022 the Company held significant investments, amounting to 3% or more of the equity capital of an
undertaking, in the following companies:
Total investment
(at cost)
I&G VCT
(% of equity)
% of equity held
by all funds
managed and
advised by
Gresham House
1
£
Preservica Limited 4,675,163 18.1% 57.9%
My Tutorweb Limited (trading as MyTutor) 3,361,778 7.2% 22.6%
Manufacturing Services Investment Limited (trading as Wetsuit Outlet) 3,205,182 8.8% 27.5%
Oxonica plc 2,524,527 10.6% 10.6%
Veritek Global Holdings Limited 2,289,859 21.7% 65.6%
Arkk Consulting Limited (trading as Arkk Solutions) 2,182,187 9.2% 30.1%
Vivacity Labs Limited 2,093,538 7.6% 25.4%
End Ordinary Group Limited (trading as Buster & Punch) 2,046,612 10.6% 34.6%
Data Discovery Solutions Limited (trading as Active Navigation) 1,975,681 10.0% 32.3%
CGI Creative Graphics International Limited 1,943,948 8.4% 26.9%
Spanish Restaurant Group Limited (trading as Tapas Revolution) 1,630,233 9.0% 29.0%
Rota Geek Limited 1,563,500 6.4% 20.3%
MPB Group Limited 1,510,992 4.5% 14.4%
Tharstern Group Limited 1,454,278 17.0% 55.0%
RDL Corporation Limited 1,441,667 12.8% 44.5%
Bleach London Holdings Limited 1,332,831 5.6% 18.4%
Bella & Duke Limited 1,323,745 6.6% 21.2%
Connect Childcare Limited 1,157,214 4.2% 14.4%
IPV Limited 954,674 8.5% 26.6%
Muller EV Limited (trading as Andersen EV) (in administration) 950,997 14.3% 45.0%
Legatics Holdings Limited 909,330 8.3% 27.3%
Pets’ Kitchen Limited (trading as Vet’s Klinic) 844,200 6.0% 20.0%
Proximity Insight Holdings Limited 807,000 3.3% 20.4%
BookingTek Limited 779,155 4.7% 14.9%
Caledonian Leisure Limited 748,749 9.0% 30.0%
Northern Bloc Ice Cream Limited 662,340 9.8% 31.1%
Racoon International Group Limited 655,851 14.3% 47.5%
Orri Limited 581,700 4.7% 28.4%
Jablite Holdings Limited (in members’ voluntary liquidation) 498,790 12.1% 40.1%
Kudos Innovations Limited 472,500 3.4% 10.9%
Master Removers Group 2019 Limited
(trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) 464,658 8.8% 28.0%
Aquasium Technology Holdings Limited 166,667 16.7% 16.7%
Biomer Technology Limited 137,170 3.5% 3.5%
Virgin Wines UK plc 65,288 11.8% 41.5%
1
The percentage of equity held for these companies is the fully diluted figure in the event that, for example, management of the
investee company exercises share options where available.
All of the above companies are incorporated in the United Kingdom.
It is considered that, under FRS102 s9.9, “Consolidated and Separate Financial Statements”, the above investments are held as
part of an investment portfolio and that accordingly, their value to the Company lies in their marketable value as part of that
portfolio and as such are not required to be consolidated. Also, the above investments are considered to be associates that are
held as part of an investment portfolio and are accounted for in accordance with FRS102 14.4B.
66
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
11 Debtors
2022
£
2021
£
Amounts due within one year:
Accrued income 848,654 200,128
Prepayments 20,538 14,515
Other debtors - 2,244,990
869,192 2,459,633
Other debtors of £2,244,990 in 2021 include proceeds generated from the realisation of Proactive Group Holdings Inc, as well as
additional proceeds from the disposal of Vectair Holdings Limited received in the current year.
12 Current asset investments and Cash at bank
Cash equivalents, for the purposes of the Statement of Cash Flows, comprise bank deposits repayable on up to three months’
notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank deposits that
mature after three months. Current asset investments are disposable without curtailing or disrupting the business and are
readily convertible into known amounts of cash at their carrying values at immediate or up to one year’s notice. Cash, for the
purposes of the Statement of Cash Flows is cash held with banks in accounts subject to immediate access. Cash at bank in the
Balance Sheet is the same.
2022
£
2021
£
OEIC Money market funds 30,417,588 24,042,958
Cash equivalents per Statement of Cash Flows 30,417,588 24,042,958
Bank deposits that mature after three months 3,151,769 3,151,769
Current asset investments 33,569,357 27,194,727
Cash at bank 1,209,273 2,653,455
13 Creditors: amounts falling due within one year
2022
£
2021
£
Trade creditors 107,469 67,328
Other creditors 9,094 10,525
Accruals 195,812 1,289,577
312,375 1,367,430
67
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
14 Called up share capital
2022
£
2021
£
Allotted, called-up and fully paid:
Ordinary Shares of 1p each: 129,481,901 (2021: 118,554,881) 1,294,819 1,185,549
Total 1,294,819 1,185,549
Under the Offer for Subscription launched on 20 January 2022, a total of 10,191,964 (2021: nil) ordinary shares were allotted at an
average effective offer price of 94.86 pence per share, raising net funds of £9,667,754 (2021: £nil).
During the year, the Company purchased 1,166,089 (2021: 1,285,499) of its own ordinary shares for cash (representing 1.0% (2021:
1.1%) of the ordinary shares in issue at the start of the year) at the prevailing market price for a total cost of £1,031,358 (2021:
£1,050,945). The shares bought back were subsequently cancelled. This figure is higher than that shown in the Statement of
Cashflows of £1,031,123 by £235. This is due to an opening share buyback creditor of £41,664 offset by a share buyback creditor
of £41,899 at the year end.
Under the terms of the Dividend Investment Scheme, a total of 1,901,145 (2021: 1,178,669) ordinary shares were allotted during the
year for a total consideration of £1,808,042 (2021: £1,057,384).
15 Basic and diluted net asset value per share
2022 2021
Net assets £108,415,450 £119,086,274
Number of shares in issue 129,481,901 118,554,881
Basic and diluted net asset value per share 83.73p 100.45p
16 Financial instruments
The Company’s financial instruments predominantly comprise investments held at fair value through profit and loss, namely
equity and preference shares and fixed and floating rate interest securities that are held in accordance with the Company’s
investment objective.
Other financial instruments are held at amortised cost comprising loans and receivables being cash at bank, current asset
investments and short term debtors, and financial liabilities being creditors, all that arise directly from the Company’s
operations.
The principal purpose of these financial instruments is to generate revenue and capital appreciation for the Company’s
operations, although cash and current asset investments are held to yield revenue return only. The Company has no gearing or
other financial liabilities apart from short-term creditors. It is, and has been throughout the year under review, the Company’s
policy that no trading in derivative financial instruments shall be undertaken.
The accounting policy for determining the fair value of investments is set out in Note 9 to the Financial Statements. The
composition of investments held is shown below and in Note 9.
Loans and receivables and other financial liabilities are stated at amortised cost which the Directors consider is equivalent to
fair value.
68
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
Classification of financial instruments
The Company held the following categories of financial instruments at 30 September 2022:
2022 2021
(Fair value) (Fair value)
£ £
Assets at fair value through profit and loss:
Investment portfolio 73,080,003 88,145,889
Loans and receivables held at amortised cost
Accrued income 848,654 200,128
Current asset investments 33,569,357 27,194,727
Cash at bank 1,209,273 2,653,455
Other debtors - 2,244,990
Financial liabilities
Liabilities held at amortised cost
Other creditors (312,375) (1,367,430)
Total for financial instruments 108,394,912 119,071,759
Non financial instruments 20,538 14,515
Net assets 108,415,450 119,086,274
The investment portfolio principally consists of unquoted investments - 91.8%; (2021: 80.9%) and AIM quoted stocks - 8.2%; (2021:
19.1%). The investment portfolio has a 100% (2021:100%) concentration of risk towards small UK based, sterling denominated
companies, and represents 67.4% (2021: 74.0%) of net assets at the year-end.
Current asset investments are money market funds and bank deposits which, along with Cash at bank are discussed under credit
risk below, represent 32.1% (2021: 25.1%) of net assets at the year-end.
The main risks arising from the Company’s financial instruments are the investment risk and the liquidity risk of the unquoted
portfolio. Other important risks are credit risk, fluctuations in market prices (market price risk), and cash flow interest rate risk,
although currency risk is also discussed overleaf. The Board regularly reviews and agrees policies for managing each of these
risks and they are summarised overleaf. These have been in place throughout the current and preceding years.
Investment risk
The Company’s investment portfolio is made up of predominantly UK companies which are not quoted on any recognised stock
exchange, although 8.2% of the portfolio value at the year-end is held in AIM assets. The companies held in the portfolio are
usually smaller than those which are quoted on a stock exchange. They are therefore usually regarded as carrying more risk
compared to larger companies, as they are more sensitive to changes in key financial indicators, such as a reduction in its
turnover or an increase in costs. The Board is of the view that the Investment Adviser mitigates this risk as the investment in an
investee company is held as part of a portfolio of such companies so that the performance of one company does not significantly
affect the value of the portfolio as a whole. The Investment Adviser also usually only recommends companies for investment that
have a proven business model, a sound financial record and a strong management team. The Investment Adviser also usually
takes a seat on the Board of each investee company such that it is able to monitor its progress on a regular basis and contribute
to the strategic direction of the company.
Liquidity risk
The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded, and therefore
they are not readily realisable. The ability of the Company to realise the investments at their carrying value may at times not be
possible if there are no willing purchasers and, as the Company owns minority stakes, could require a number of months and the
co-operation of other shareholders to achieve at a reasonable valuation. The Company’s ability to sell investments may also be
constrained by the requirements set down for VCTs. The maturity profile of the Company’s loan stock investments disclosed
within the consideration of credit risk below indicates that these assets are also not readily realisable until dates up to five years
from the year end.
To counter these risks to the Company’s liquidity, the Investment Adviser maintains sufficient cash and money market funds to
meet running costs and other commitments. The Company invests its surplus funds in high quality money market funds/bank
deposits of £34,778,630 (2021: £29,848,182) which are all accessible at varying points over the next 12 months. The Board also
receives regular cash flow projections in order to manage this liquidity risk.
69
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
16 Financial instruments (continued)
The table below shows a maturity analysis of financial liabilities:
<3 months 3-6 months 6-12 months over 12 months 2022 Total
Financial liabilities £ £ £ £ £
Other creditors 208,092 104,283 - - 312,375
<3 months 3-6 months 6-12 months over 12 months 2021 Total
Financial liabilities £ £ £ £ £
Other creditors 272,162 1,095,268 - - 1,367,430
The Company does not have any derivative financial liabilities.
Credit risk
Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the
Company.
The Company’s maximum exposure to credit risk is:
2022
£
2021
£
Loan stock investments 9,438,547 12,121,582
Current asset investments 33,569,357 27,194,727
Accrued income and other debtors 848,654 2,445,118
Cash at bank 1,209,273 2,653,455
45,065,831 44,414,882
The Company has an exposure to credit risk in respect of the loan stock investments it has made into investee companies, most
of which have no security attached to them, and in a minority of cases, such security ranks beneath any bank debt that an
investee company may owe. The loan stock is held in companies with turnover under £50 million, which may be considered less
stable than larger, longer established businesses. The Investment Adviser undertakes extensive financial and commercial due
diligence before recommending an investment to the Board. The Investment Adviser usually takes a seat on the Board of each
investee company and the Board of the VCT receives regular updates on each company at each quarter end.
70
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
The following table shows the maturity of the loan stock investments referred to above. In some cases, the loan maturities are not
the contractual ones, but are the best estimate using management’s expectations of when it is likely that such loans may be
repaid.
Repayable within
2022
£
2021
£
0 to 1 year 6,217,750 2,095,309
1 to 2 years 1,067,944 4,640,298
2 to 3 years 311,655 3,501,382
3 to 4 years 1,017,980 155,833
4 to 5 years 823,218 1,408,169
> 5 years - 320,591
Total 9,438,547 12,121,582
Included within loan stock investments above are loans at a carrying value of £3,482,808 (2021: £6,555,305) which are past their
repayment date but have been re-negotiated. Loans which are past their repayment date but which have not been renegotiated
have a carrying value of £1,859,656 (2021: £65,779). These loan stock investments are made as part of the qualifying investments
within the investment portfolio, and the risk management processes applied to the loan stock investments have already been set
out under market price risk below.
An aged analysis of the loan stock investments included above, which are past due but not individually impaired, is set out below.
For this purpose, these loans are considered to be past due when any payment due date under the loan’s contractual terms (such
as payment of interest) is received late or missed. The loans in the table below are all considered to be past due either because
interest on the loan is outstanding or the loan has passed its contracted redemption date. We are required to report in this format
and include the full value of the loan even though, in some cases, it is only in respect of interest that they are in default.
0-6 months 6-12 months over 12 months 2022 Total
£ £ £ £
Loans to investee companies past due - - 3,031,646 3,031,646
0-6 months 6-12 months over 12 months 2021 Total
£ £ £ £
Loans to investee companies past due - - 3,156,302 3,156,302
Credit risk also arises from cash and cash equivalents, deposits with banks and amounts held in liquidity funds. There is a risk of
liquidity fund defaults such that there could be defaults within their underlying portfolios that could affect the values at which the
Company could sell its holdings. As there are five OEIC money market funds holding £30,417,588 (2021: £24,042,958) which are
all triple A rated funds, and along with bank deposits of £4,361,042 (2021: £5,805,224) at three well-known financial institutions
with a minimum credit rating of A, credit risk is considered to be relatively low in current circumstances. The Board manages
credit risk in respect of these money market funds and cash by ensuring a spread of such investments such that none should
exceed 15% of the company’s total investment assets. The Company’s current account totalling £168,808 (2021: £1,612,044)
included within the balance above is held with Natwest Bank plc, so the risk of default is low.
There could also be a failure by counter-parties to deliver securities which the Company has paid for, or pay for securities which
the Company has delivered. This risk is considered to be small as most of the Company’s investment transactions are in
unquoted investments, where investments are conducted through solicitors, to ensure that payment matches delivery. In respect
of any quoted investment transactions that are undertaken, the Company uses brokers with a high credit quality, and these
trades usually have a short settlement period. Accordingly, counterparty risk is considered to be relatively low.
Market price risk
Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance with the
Company’s investment objectives. These future valuations are determined by many factors but include the operational and
financial performance of the underlying investee companies, as well as market perceptions of the future performance of the UK
economy and its impact upon the economic environment in which these companies operate. This risk represents the potential
loss that the Company might suffer through holding its investment portfolio in the face of market movements, which was a
maximum of £73,080,003 (2021: £88,145,889), the fair value of the investment portfolio at the year-end.
71
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
16 Financial instruments (continued)
The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded and as such
the prices are more uncertain than those of more widely traded securities. As, in a number of cases, the unquoted investments
are valued by reference to price earnings ratios prevailing in quoted comparable sectors (discounted for points of difference from
quoted comparators), their valuations are exposed to changes in the price earnings ratios that exist in the quoted markets.
The Board’s strategy in managing the market price risk inherent in the Company’s portfolio of equities and loan stock
investments is determined by the requirement to meet the Company’s Objective, as set out on page 5. As part of the investment
management process, the Board seeks to maintain an appropriate spread of market risk, and also has full and timely access to
relevant information from the Investment Adviser. No single investment is permitted to exceed 15% of total investment assets at
the point of investment. The Investment Committee meets regularly and reviews the investment performance, financial results
and prevailing market conditions, as well as compliance with the Company’s objectives. The Company does not use derivative
instruments to hedge against market risk.
Market price risk sensitivity
The Board believes that the Company’s assets are mainly exposed to market price risk, as the Company is required to hold most
of its assets in the form of sterling denominated investments in small companies.
Although a relatively small part of these assets are quoted on AIM, nearly all of these assets are unquoted. All of the investments
made by the Investment Adviser in unquoted companies, irrespective of the instruments the Company actually holds, (whether
shares, preference shares or loan stock) carry a full market risk, even though some of the loan stocks may be secured on assets,
but behind any prior ranking bank debt in the investee company.
The Board considers that the value of investments in equity and loan stock instruments are ultimately sensitive to changes in
their trading performance (discussed under investment risk above) and to changes in quoted share prices, insofar as such
changes eventually affect the enterprise value of unquoted companies. The table below shows the impact on profit and net
assets if there were to be a 20% (2021: 20%) movement in overall share prices, and has used a 20% change in the quoted market
comparator multiple as a proxy for this.
The sensitivity analysis below assumes the actual portfolio of investments held by the Company is perfectly correlated to this
overall movement in share prices. However, Shareholders should note that this level of correlation is unlikely to be the case in
reality, particularly in the case of small, unquoted companies which may have other factors which may influence the extent of the
valuation change, e.g. a strong niche brand may limit the valuation fall compared to comparators, or may be more affected by
external market factors than larger companies.
For each of the companies in the investment portfolio that are valued on a multiple basis, the calculation below has applied plus
and minus 20% to the multiple (such as earnings or revenue) derived from quoted market comparators that are used to value the
companies. The companies valued on a bid price or multiple basis represent £71.77 million (2021: £86.47 million) of the total
investment portfolio of £73.08 million (2021: £88.15 million). The remainder of the portfolio is valued at either price of recent
investment or net asset value, as shown below.
The impact of a change of 20% (2021: 20%) has been selected as this is considered reasonable given the level of volatility
observed both on a historical basis and market expectations for future movement.
2022 2021
Profit and net assets Profit and net assets
£ £
If overall share prices increased/(decreased) by 20% (2021: 20%), with all other
variables held constant – increase/(decrease)
11,529,993 /
(10,768,555)
12,403,897 /
(12,580,598)
.
Increase/(decrease) in earnings, and net asset value, per Ordinary share (in
pence) 8.90p / (8.32)p 10.46p / (10.61)p
Cash flow interest rate risk
The Company’s fixed and floating rate interest securities, its equity and preference equity investments and net revenue may be
affected by interest rate movements. Investments are often in relatively small businesses, which are relatively high risk
investments sensitive to interest rate fluctuations.
Due to the short time to maturity of some of the Company’s floating rate investments, it may not be possible to re-invest in assets
which provide the same rates as those currently held. The Company’s assets include fixed and floating rate interest instruments,
as shown below. The rate of interest earned is regularly reviewed by the Board, as part of the risk management processes
applied to these instruments, already disclosed under market price risk above.
72
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
The interest rate profile of the Company’s financial net assets at 30 September 2022 was:
Financial
net assets
on which no
interest paid
Fixed rate
financial
assets
Variable rate
financial
assets
Total Weighted
average
interest rate
Average
period to
maturity
£ £ £ £ % (years)
Equity shares 61,319,000 - - 61,319,000
Preference shares - 2,322,456 - 2,322,456 5.7% 3.1
Loan stocks - 9,438,547 - 9,438,547 5.9% 1.7
Current asset investments - - 33,569,357 33,569,357 0.9% -
Cash - - 1,209,273 1,209,273 0.0% -
Debtors 848,654 - - 848,654
Creditors (312,375) - - (312,375)
Total for financial instruments 61,855,279 11,761,003 34,778,630 108,394,912
Other non financial assets 20,538 - - 20,538
Net assets 61,875,817 11,761,003 34,778,630 108,415,450
The interest rate profile of the Company’s financial net assets at 30 September 2021 was:
Financial
net assets
on which no
interest paid
Fixed rate
financial
assets
Variable rate
financial
assets
Total Weighted
average
interest rate
Average
period to
maturity
£ £ £ £ % (years)
Equity shares 74,624,115 - - 74,624,115
Preference shares - 1,400,192 - 1,400,192 6.2% 4.2
Loan stocks - 12,121,582 - 12,121,582 7.7% 2.1
Current asset investments - - 27,194,727 27,194,727 0.1% 0.1
Cash - - 2,653,455 2,653,455 0.0% -
Debtors 2,445,118 - - 2,445,118
Creditors (1,367,430) - - (1,367,430)
Total for financial instruments 75,701,803 13,521,774 29,848,182 119,071,759
Other non financial assets 14,515 - - 14,515
Net assets 75,716,318 13,521,774 29,848,182 119,086,274
Note: Weighted average interest rates above are derived by calculating the expected annual income that would be earned on
each asset (but only for those sums that are currently regarded as collectible and would therefore be recognised), divided by the
values for each asset class at the balance sheet date.
Variable rate cash earns interest based on SONIA rates.
The Company’s investments in equity shares and similar instruments have been excluded from the interest rate risk profile as
they have no maturity date and would thus distort the weighted average period information.
Cash flow interest rate sensitivity
Although the Company holds investments in loan stocks that pay interest, the Board does not consider it appropriate to assess
the impact of interest rate changes in isolation upon the value of the unquoted investment portfolio, as interest rate changes are
only one factor affecting the market price movements that are discussed above under market price risk. However, as the
Company has a substantial proportion of its assets in cash and money market funds, the table below shows the sensitivity of
income earned to changes in interest rates in these instruments:
73
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
16 Financial instruments (continued)
2022
Profit and
net assets
£
2021
Profit and
net assets
£
If interest rates increased/(decreased) by 3% (2021: 1%) with all other variables held
constant – increase/(decrease) 845,121 / (845,121) 241,770 / (241,770)
Increase/(decrease) in earnings, and net asset value, per Ordinary share (in pence) 0.65p / (0.65)p 0.20p / (0.20)p
Currency risk
All assets and liabilities are denominated in sterling and therefore there is no currency risk, although a number of investee
companies do trade overseas, so do face some exposure to currency risk in their operations.
Fair value hierarchy
The table below sets out fair value measurements using FRS 102 s11.27 fair value hierarchy.
Financial assets at fair value through profit and loss Level 1 Level 2 Level 3 Total
At 30 September 2022 £ £ £ £
Equity investments 6,028,141 - 55,290,859 61,319,000
Preference shares - - 2,322,456 2,322,456
Loan stock investments - - 9,438,547 9,438,547
Total 6,028,141 - 67,051,862 73,080,003
Financial assets at fair value through profit and loss Level 1 Level 2 Level 3 Total
At 30 September 2021 £ £ £ £
Equity investments 16,841,633 - 57,782,482 74,624,115
Preference shares - - 1,400,192 1,400,192
Loan stock investments - - 12,121,582 12,121,582
Total 16,841,633 - 71,304,256 88,145,889
A reconciliation of fair value measurements in Level 3 is set out below:
Equity
investments
Preference
shares
Loan stock
investments Total
£ £ £ £
Opening balance at 1 October 2021 57,782,482 1,400,192 12,121,582 71,304,256
Purchases 5,321,660 779,200 1,235,581 7,336,441
Sales (8,678,965) - (2,875,681) (11,554,646)
Reclassification at value 578,640 - (578,640) -
Total gains/(losses) included in Income Statement: -
- on assets sold 2,317,106 - - 2,317,106
- on assets held at the year-end (2,030,064) 143,064 (464,295) (2,351,295)
Closing balance at 30 September 2022 55,290,859 2,322,456 9,438,547 67,051,862
There are currently no financial liabilities at fair value through profit and loss.
74
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value
measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
The valuation techniques used by the company are explained in the accounting policies in Note 9 to these Financial Statements.
As detailed in the accounting policy for Note 9, where investments are valued on an earnings-multiple basis, the main input used
for this basis of valuation is a suitable price-earnings ratio taken from a comparable sector on the quoted market, which is then
appropriately adjusted for points of difference. Thus any change in share prices can have a significant effect on the fair value
measurements of the Level 3 investments, as they may not be wholly offset by the adjustment for points of difference.
The key estimate in the financial statements is the determination of the unquoted portfolio value held at the balance sheet date.
The valuation process involves using unobservable estimates (for which market data is not available). Fair value estimates are
verified against third-party data where available. The risk of over or underestimation of fair values is greater when methodologies
are applied using more subjective inputs.
The unquoted portfolio valuation process involves key assumptions dependent upon the valuation methodology used. The
primary methodologies are shown under Note 9. Consideration is given to the circumstances as at the each measurement date,
including changes in the market or performance of the investee company. Milestone analysis is used where appropriate to
incorporate the operational progress of the investee company into the valuation. The key assumptions for the Multiples basis
approach are the selection of comparable companies on which to determine earnings or revenue multiple (chosen on the basis
of their business characteristics and growth patterns). Other assumptions include the appropriateness of the discount magnitude
applied for reduced liquidity and other qualitative factors.
Level 3 unquoted equity and loan stock investments are valued in accordance with the IPEV guidelines as follows:
30 September 2022
£
30 September 2021
£
Valuation methodology
Multiple of earnings, revenues or gross margin, as appropriate 65,739,462 69,628,026
Recent investment price 1,246,621 1,293,451
Recent investment price (reviewed for impairment) - 317,000
Estimated realisation proceeds 65,779 65,779
- -
Total 67,051,862 71,304,256
The unquoted equity investments had the following movements between valuation methodologies between 30 September 2021
and 30 September 2022:
Change in valuation methodology
(2021 to 2022)
Carrying value as at
30 September 2022
£ Explanatory note
Recent investment price (reviewed for
impairment) basis to multiple basis
1,611,551 Multiple basis is a more appropriate basis for
determining fair value.
The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial
health of the investment and the December 2018 IPEV guidelines. The Directors believe that, within these parameters, these are
the most appropriate methods of valuation which would be reasonable as at 30 September 2022.
75
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Financial Statements
17 Management of capital
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so that
it can continue to provide returns for shareholders and to provide an adequate return to shareholders by allocating its capital to
assets commensurate with the level of risk.
By its nature, the Company has an amount of capital, at least 80% (as measured under the tax legislation) of which is and must be,
and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being
subscribed. The Company accordingly has limited scope to manage its capital structure in the light of changes in economic
conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital
structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares,
or sell assets if so required to maintain a level of liquidity to remain a going concern.
Although, as the Investment Policy implies, the Board would consider levels of gearing, there are no current plans to do so. It
regards the net assets of the Company as the Company’s capital, as the level of liabilities are small and the management of them
is not directly related to managing the return to shareholders. There has been no change in this approach from the previous year.
18 Segmental analysis
The operations of the Company are wholly in the United Kingdom, from one class of business.
19 Post balance sheet events
On 20 October 2022, Muller EV Limited (trading as Andersen EV) entered into administration.
On 21 October 2022, the Company received a loan repayment of £0.66 million from Jablite Holdings Limited
On 7 November 2022, the Company paid a 4.00 pence per share dividend to shareholders in respect of the year ended
30September 2022.
On 17 November 2022, 16,936,303 Ordinary Shares were allotted at an average effective offer price of 82.73 per share, raising
net funds of £13.50 million.
On 24 November 2022, proceeds were received in respect of the sale of the equity holding in EOTH Limited totalling £7.34
million (including preference dividends).
76
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Notes to the Financial Statements for the year ended 30 September 2022
Financial Statements
77
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Information for
Shareholders
Shareholder Information
Communication with Shareholders
We aim to communicate regularly with our Shareholders. The annual general meetings provide a useful platform for the Board to
meet Shareholders and exchange views and we are pleased to be able to hold a physical meeting again in 2023. We will also offer
a facility whereby you can view the Board, the Investment Adviser’s presentation and submit questions remotely via live stream.
Your Board welcomes your attendance at the February Annual General Meeting to give you the opportunity to meet the Directors
and representatives of the Investment Adviser. The Company releases Interim Management Statements in respect of those quarters
where it does not publish half or full year accounts via the London Stock Exchange RNS service. The Investment Adviser has held
its annual Shareholder event virtually in February 2022 and plans to hold another such event in early 2023. Further details can be
found on the Company’s website at www.incomeandgrowthvct.co.uk, under “Key Shareholder Information”.
Shareholders wishing to follow the Company’s progress can visit its website at www.incomeandgrowthvct.co.uk. The website
includes up-to-date details on fund performance and dividends as well as publicly available information on the Company’s portfolio
of investments and copies of company reports. There is also a link to the London Stock Exchange’s website at:
www.londonstockexchange.com, where Shareholders can obtain details of the share price and latest NAV announcements, etc.
Financial calendar
22 February 2023 Annual General Meeting
23 March 2023 Virtual Shareholder Event
June 2023 Announcement of Half-Year Results and circulation of Half-Year Report for the six months ended
31 March 2023 to Shareholders
30 September 2023 Year-end
December 2023 Annual Report for the year ended 30 September 2023 to be circulated to Shareholders
Annual General Meeting
The Company’s next Annual General Meeting will be held on Wednesday, 22 February 2023 at 11.00 am at the offices of
Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street, London EC3V 0HR and will also be available by webcast for those
Shareholders who are unable to attend in person. Details of how to join the meeting by virtual means will be shown on the
Company’s website. Shareholders joining virtually should note you will not be able to vote at the meeting and therefore you are
encouraged to lodge your proxy form, which is included with Shareholders’ copies of this Annual Report, or on-line at www.
signalshares.com. A copy of the notice of the meeting is included on pages 84 to 86. Shareholders may send any questions on the
resolutions proposed to the following email address: AGM@greshamhouse.com. A response will be provided prior to the deadline
for lodging your proxy vote. Questions for the Annual General Meeting can also be submitted using the same email address or
there will be a facility to type in a question at the meeting itself if you are not attending in person.
Dividend
Shareholders who wish to have dividends paid directly into their bank account rather than sent by cheque to their registered
address can complete a mandate for this purpose. Mandates can be obtained by contacting the Company’s Registrars, Link Group
at the address given on page 87.
Shareholders are encouraged to ensure that the Registrar maintains up-to-date details for yourselves and to check whether
you have received all dividends payable to you. This is particularly important if you have recently moved house or changed
bank details. We are aware that a number of dividends remain unclaimed by Shareholders and whilst we will endeavour to
contact Shareholders if this is the case we cannot guarantee that we will be able to do so if the Registrar do not have an
up-to-date postal or email address for you.
Dividend Investment Scheme (“DIS”)
Those Shareholders who wish to participate, or to amend their existing participation, in the DIS, can do so by visiting
www.incomeandgrowthvct.co.uk and click the Dividends tab or by contacting the Registrar directly using the details on page 87.
Please note that Shareholders’ elections to participate or amendments to participation in the Scheme require 15 days to become
effective.
Selling your shares
The Company’s Shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other
quoted company through a stockbroker. Shareholders are also advised to discuss their individual tax position with their financial
advisor before deciding to sell their shares.
The Company is unable to buy back shares direct from Shareholders, so you will need to use a stockbroker to sell your shares. If
you are considering selling your shares or trading in the secondary market, please contact the Company’s Corporate Broker,
Panmure Gordon (UK) Limited (“Panmure”). Panmure is able to provide details of close periods (when the Company is prohibited
from buying in shares) and details of the price at which the Company has bought in shares.
Panmure can be contacted as follows:
Chris Lloyd - 0207 886 2716 chris.lloyd@panmure.com
Paul Nolan - 0207 886 2717 paul.nolan@panmure.com
Information for Shareholders
78
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Common Reporting Standard (“CRS”) and Foreign Account Tax Compliance Act (“FATCA”)
Tax legislation was introduced with effect from 1 January 2016 under the Organisation for Economic Co-operation and Development
Common Reporting Standard for Automatic Exchange of Financial Account Information. The legislation requires investment trust
companies to provide personal and financial account information to HMRC on certain investors who purchase their shares including
details of their shareholding and income from the shares. As an affected entity, the Company has to provide information annually to
HMRC relating to a number of non-UK based certificated Shareholders who are deemed to be resident for tax purposes in any of
the 90 plus countries who have joined CRS. All new Shareholders, excluding those whose shares are held in CREST, who are
entered onto the share register from 1 January 2016 will be asked to provide the relevant information. Additionally, HMRC changed
its policy position on FATCA in June 2016. We understand that this will mean that, as a result of the restricted secondary market in
VCT shares, the Company’s shares will not be considered to be “regularly traded”. This will mean that the Company will also be an
affected entity for the purposes of this legislation and as such will have to provide information annually to HMRC relating to
Shareholders who are resident for tax purposes in the United States.
For further information, please see HMRC’s Quick Guide: Automatic Exchange of Information – information for account holders:
https://www.gov.uk /government /publications/exchange-of-information-account-holders.
Managing your shareholding online
For details on your individual shareholding and to manage your account online Shareholders may log into or register with the Link
Shareholder Portal at: www.signalshares.com. You can use the portal to change your address details, check your holding balance
and transactions, view the dividends you have received and add and amend your bank details.
Fraud Warning
Boiler Room fraud and unsolicited communications to Shareholders.
We have been made aware of an increase in the number of Shareholders being contacted in connection with sophisticated but
fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an
email usually originating from outside of the UK, often claiming or appearing to be from a corporate finance firm and typically
offering to buy your VCT shares at an inflated price.
Further information on boiler room scams and fraud advice plus who to contact, can be found first in the answer to a question “What
should I do if I receive an unsolicited offer for my shares?” within the VCT Investor area of the Investment Adviser’s website in the A
Guide to VCTs section: www.mobeusvcts.co.uk/investor-area and secondly, in a link to the FCA’s ScamSmart site:
www.fca.org.uk/scamsmart
We strongly recommend that you seek financial advice before taking any action if you remain in any doubt. You can also contact the
Investment Adviser on 020 7382 0999, or email or email info@greshamhouse.com to check whether any claims made by a caller
are genuine.
Shareholders are also encouraged to ensure their personal data is always held securely and that data held by the Registrar of the
Company is up to date, to avoid cases of identity fraud.
Shareholder enquiries:
For enquiries concerning the investment portfolio or the Company in general, please contact the Investment Adviser, Gresham
House Asset Management Limited. To contact the Chair or any member of Board, please contact the Company Secretary, also
Gresham House Asset Management Limited, in the first instance.
The Registrar may be contacted via their Shareholder Portal, post or telephone for queries relating to your shareholding or dividend
payments, dividend mandate forms, change of address, change of bank details etc.
Full contact details for each of Gresham House Asset Management and Link are included under Corporate Information on page 87
of this Annual Report.
Timeline of the Company
October 2000 The Company is launched as TriVest VCT plc advised by three managers, Foresight Group, GLE Development Capital and LICA
Development Capital.
April 2001 The Company’s first fundraising of its “O Share Fund” is completed.
October 2007 The Company changes its name to The Income & Growth VCT plc.
December 2007 The ‘S’ Share Fund is launched.
March 2009 The Company becomes a VCT solely advised by Matrix Private Equity Partners. The Company changes its Investment Policy to
focus on more mature businesses.
March 2010 The ‘O’ Share Fund (launched in 2000) merges with the ‘S’ Share Fund (launched in 2007) to create the current class of shares.
November 2011 The Company sells its stake in App-DNA for 32 times cost and pays a special interim capital dividend of 20p per share in the
following January.
June 2012 Matrix Private Equity Partners LLP becomes a fully independent firm owned by its partners and renames itself Mobeus Equity
Partners LLP.
2010-2014 The Company participates in four linked fundraisings with other Mobeus advised VCTs.
March 2015 The Company closes a successful fundraising with the other Mobeus advised VCTs in which £10 million was raised for the
Company.
March 2018 The Company closes a successful fundraising with the other Mobeus advised VCTs in which £25 million was raised for the
Company.
Information for
Shareholders
Shareholder Information
79
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Information for
Shareholders
October 2019 The Company launches a joint fundraising with the other Mobeus advised VCTs in which it sought to raise up to £10 million,
including an optional over-allotment facility.
January 2020 The Company closes a successful fundraising with the other Mobeus advised VCTs for which £10 million was raised for the
Company.
September 2021 The Company becomes advised by Gresham House Asset Management Limited.
March 2022 The Company closes a successful fundraising with the other Mobeus advised VCTs for which £10 million was raised for the
Company.
December 2022 The Company reaches its capacity for its fundraising with the other Mobeus advised VCTs for which £22 million (including over-
allotment) was raised for the Company.
80
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Information for
Shareholders
Performance Data at 30 September 2022
(unaudited)
Share price at 30 September 2022 81.50p
1
NAV per share as at 30 September 2022 83.73p
Performance data for all fundraising rounds
The following table shows, for all investors in The Income & Growth VCT plc, how their investments have performed since they
were originally allotted shares in each fundraising.
Shareholders from the original fundraising in 2000/01 should note that the funds were managed by three investment advisers, up
until 10 March 2009. At that date, Mobeus became the sole adviser, to this and all subsequent fundraisings.
Total return data, which includes cumulative dividends paid to date, is shown on both a share price and a NAV basis as at
30September 2022. The NAV basis enables Shareholders to evaluate more clearly the performance of the Fund, as it reflects the
underlying value of the portfolio at the reporting date. This is the most widely used measure of performance in the VCT sector.
Allotment date(s)
Allotment
price
Net
allotment
price
2
Cumulative
dividends
paid
per share
Total return per share to
Shareholders since allotment
(Share price
basis)
(NAV
basis)
% increase
since 30
September
2021 (NAV
basis)
(p) (p) (p) (p) (p)
Funds raised - O Fund
3
(launched 18 October 2000)
Between 3 November 2000 and 11 May 2001 100.00 60.62 131.58 190.31 195.03 (3.3)%
Funds raised 2007/8 - S Share fund
(launched 14 December 2007)
Between 1 April 2008 and 6 June 2008 100.00 70.00 144.50 193.34 228.23 (3.7)%
Funds raised 2010/11
(launched 12 November 2010)
21 January 2011 104.80 73.36 144.00 225.50 227.73 (3.7)%
28 February 2011 107.90 75.53 142.00 223.50 225.73 (3.7)%
22 March 2011 105.80 74.06 142.00 223.50 225.73 (3.7)%
1 April 2011 105.80 74.06 140.00 221.50 223.73 (3.8)%
5 April 2011 105.80 74.06 140.00 221.50 223.73 (3.8)%
10 May 2011 105.80 74.06 140.00 221.50 223.73 (3.8)%
6 July 2011 106.00 74.20 140.00 221.50 223.73 (3.8)%
Funds raised 2012
(launched 20 January 2012)
8 March 2012 106.40 74.48 116.00 197.50 199.73 (4.2)%
4 April 2012 106.40 74.48 116.00 197.50 199.73 (4.2)%
5 April 2012 106.40 74.48 116.00 197.50 199.73 (4.2)%
10 May 2012 106.40 74.48 116.00 197.50 199.73 (4.2)%
10 July 2012 111.60 78.12 116.00 197.50 199.73 (4.2)%
Funds raised 2013
(launched 29 November 2012)
14 January 2013 116.00 81.20 116.00 197.50 199.73 (4.2)%
28 March 2013 112.60 78.82 110.00 191.50 193.73 (4.3)%
4 April 2013 112.60 78.82 110.00 191.50 193.73 (4.3)%
5 April 2013 112.60 78.82 110.00 191.50 193.73 (4.3)%
10 April 2013 Pre RDR
4
115.30 80.71 110.00 191.50 193.73 (4.3)%
10 April 2013 Post RDR
4
112.60 78.82 110.00 191.50 193.73 (4.3)%
7 May 2013 112.60 78.82 110.00 191.50 193.73 (4.3)%
1
- Source: Panmure Gordon & Co (mid-price basis). Share price has been adjusted for a 4.00 pence dividend paid on 7 November 2022 which
was ex-dividend at the year end.
2
- Net allotment price is the allotment price less applicable income tax relief. Income tax relief was 20% up until 5 April 2004, 40% from 6 April
2004 to 5 April 2006, and 30% thereafter
3 - Shareholders who invested in 2000/01 received 0.7578 shares in the current share class for each share previously held on 29 March 2010,
when the Company’s two share classes merged. The net allotment price, NAV, cumulative dividend, total return, share price and percentage
return data per share have been adjusted to reflect this conversion ratio.
4
- RDR means the date of implementation of the Retail Distribution Review on 31 December 2012, which affected the level of charges in the
allotment price for applications received before and after that date.
81
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Information for
Shareholders
Funds raised 2014
(launched 28 November 2013)
9 January 2014 117.82
2
82.47 104.00 185.50 187.73 (4.4)%
11 February 2014 119.02
2
83.31 104.00 185.50 187.73 (4.4)%
31 March 2014 115.64
2
80.95 100.00 181.50 183.73 (4.5)%
3 April 2014 116.17
2
81.32 100.00 181.50 183.73 (4.5)%
4 April 2014 115.45
2
80.82 100.00 181.50 183.73 (4.5)%
6 June 2014 121.55
2
85.09 100.00 181.50 183.73 (4.5)%
Funds raised 2015
(launched 10 December 2014)
14 January 2015 108.33
2
75.83 86.00 167.50 169.73 (4.9)%
17 February 2015 113.17
2
79.22 86.00 167.50 169.73 (4.9)%
10 March 2015 109.88
2
76.92 82.00 163.50 165.73 (5.0)%
Funds raised 2017/18
(launched 06 September 2017)
28 September 2017 82.49
2
57.74 42.00 123.50 125.73 (6.5)%
20 October 2017 82.67
2
57.87 42.00 123.50 125.73 (6.5)%
9 November 2017 83.20
2
58.24 42.00 123.50 125.73 (6.5)%
20 November 2017 84.54
2
59.18 42.00 123.50 125.73 (6.5)%
21 November 2017 84.50
2
59.15 42.00 123.50 125.73 (6.5)%
24 January 2018 81.27
2
56.89 39.00 116.50 122.73 (6.6)%
13 March 2018 82.32
2
57.62 39.00 116.50 122.73 (6.6)%
Funds raised 2019/20
(launched 25 October 2019)
8 January 2020 77.28
2
54.10 27.00 108.50 110.73 (7.3)%
Funds raised 2021/22
(launched 20 January 2022)
9 March 2022 98.12
2
68.68 4.00 85.50 87.73 -
1
- Net allotment price is the allotment price less applicable income tax relief. Income tax relief was 20% up until 5 April 2004, 40% from 6 April
2004 to 5 April 2006, and 30% thereafter.
2
- Average effective offer price. Shares were allotted pursuant to the 2014, 2015, 2017/18, 2019/20 and 2021/22 offers at individual prices for
each investor in accordance with its pricing formula set out in each offer’s respective securities note.
Allotment date(s)
Allotment
price
Net
allotment
price
1
Cumulative
dividends
paid
per share
Total return per share to
Shareholders since allotment
(Share price
basis)
(NAV
basis)
% increase
since 30
September
2021 (NAV
basis)
(p) (p) (p) (p) (p)
82
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Information for
Shareholders
Cumulative dividends paid
Funds
raised
2000/01
‘O’ Share
Fund
Funds
raised
2007/08
‘S’ Share
Fund
Funds
raised
2010/11
Funds
raised
2012
Funds
raised
2013
Funds
raised
2014
Funds
raised
2015
Funds
raised
2017/18
Funds
raised
2019/20
Funds
raised
2021/22
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
7 July 2022 3.03 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
7 January 2022 3.03 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
23 July 2021 3.79
1
5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
28 September 2020 8.34
1
11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00
07 October 2020 2.27
1
3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00
18 October 2019 3.41
1
4.50 4.50 4.50 4.50 4.50 4.50 4.50
12 July 2019 1.14
1
1.50 1.50 1.50 1.50 1.50 1.50 1.50
15 February 2019 2.65
1
3.50 3.50 3.50 3.50 3.50 3.50 3.50
21 June 2018 1.89
1
2.50 2.50 2.50 2.50 2.50 2.50 2.50
15 February 2018 2.27
1
3.00 3.00 3.00 3.00 3.00 3.00 3.00
31 August 2017 11.37
1
15.00 15.00 15.00 15.00 15.00 15.00
20 June 2017 2.27
1
3.00 3.00 3.00 3.00 3.00 3.00
15 February 2017 3.03
1
4.00 4.00 4.00 4.00 4.00 4.00
07 July 2016 4.55
1
6.00 6.00 6.00 6.00 6.00 6.00
15 February 2016 4.55
1
6.00 6.00 6.00 6.00 6.00 6.00
30 June 2015 4.55
1
6.00 6.00 6.00 6.00 6.00 6.00
20 March 2015 3.03
1
4.00 4.00 4.00 4.00 4.00 4.00
30 October 2014 6.06
1
8.00 8.00 8.00 8.00 8.00
03 July 2014 4.55
1
6.00 6.00 6.00 6.00 6.00
12 March 2014 3.03
1
4.00 4.00 4.00 4.00 4.00
27 June 2013 4.55
1
6.00 6.00 6.00 6.00
08 February 2013 4.55
1
6.00 6.00 6.00 6.00
15 February 2012 3.02
1
4.00 4.00
27 January 2012 15.16
1
20.00 20.00
28 March 2011 1.52
1
2.00 2.00
22 February 2011 1.52
1
2.00 2.00
29 March 2010 Merger of the ‘O’ and ‘S’ Share Funds
17 March 2010 2.00 0.50
16 February 2009 4.00
15 February 2008 2.00
24 October 2007 2.00
15 February 2007 3.75
14 February 2006 3.25
04 February 2005 1.25
11 February 2004 1.25
12 February 2003 1.75
18 February 2002 1.20
Total dividends paid 131.58 144.50 144.00 116.00 116.00 104.00 86.00 42.00 27.00 4.00
1
- The dividends paid after the merger, on the former ‘O’ Share Fund shareholdings, have been restated to take account of the merger
conversion ratio.
The above data relates to an investor in the first allotment of each fundraising. The precise amount of dividends paid to
Shareholders by date of allotment is shown in the tables on pages 81.
83
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Information for
Shareholders
Alternative performance measure (“APM”)
A financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure
defined or specified in the Company’s financial reporting framework. These APMs tend to be industry specific terms which help
Shareholders to understand and assess the Company’s progress. A number of terms contained within this Glossary have been
identified as APMs.
Cumulative dividends paid (APM)
The total amount of dividend distributions by the Company over the time period specified. A list of all dividends paid since launch
of the Company is shown on the Company’s website www.incomeandgrowthvct.co.uk. Dividends paid in the year and dividends
paid in respect of the year are shown in Note 8.
Cumulative total return (APM)
Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (Share price basis),
plus cumulative dividends paid since the launch of the current share class in 2008.
Internal Rate of Return (“IRR”)
The internal rate of return is the annual discount rate that equates the original investment cost with the value of subsequent cash
flows (such as receipts/dividends or further investment) and the latest valuation/exit proceeds or net asset value. Generally
speaking, the higher an investment’s IRR, the more successful it is.
Net asset value or NAV
The value of the Company’s total assets less its total liabilities. It is equal to the total equity Shareholders’ funds.
Net asset value per share or NAV per share
The net asset value per share is calculated as total equity Shareholders’ funds divided by the number of Ordinary shares in issue
at the year-end.
NAV Total Return (APM)
This measure combines two types of returns received by Shareholders. Firstly, as income in the form of dividends and secondly,
as capital movements (net asset value) of the value of the Fund.
It is a performance measure that adjusts for dividends that have been paid in a period or year. This allows Shareholders to assess
the returns they have received both in terms of the performance of the Company but also including dividends they have received
from the Company which no longer form part of the Company’s assets.
It is calculated as the percentage return achieved after taking the closing NAV per share and adding dividends paid in the year
and dividing the total by the opening NAV per share. The Directors feel that this is the most meaningful method for Shareholders
to assess the performance of the Company.
To aid comparison with the wider Investment Trust market, the Annual Report also contains a Total Return performance measure
which assumes dividends are reinvested. This assumes that dividends paid are reinvested at the date of payment at a price
equivalent to the latest announced NAV at the ex-div date. Where this is referred to it will be specified in the Notes.
Ongoing charges ratio (APM)
This figure, calculated using the AIC recommended methodology, shows Shareholders the annual percentage reduction in
shareholder returns as a result of recurring operational expenses, assuming markets remain static and the portfolio is not traded.
Although the Ongoing Charges figure primarily is based upon historic information, it provides Shareholders with an indication of
the likely level of costs that will be incurred in managing the Fund in the future. This is calculated by dividing the Investment
Adviser’s fees of £2,635,892 and other expenses of £539,819 (per Notes 4a and 4c on pages 57 to 58), the latter being reduced
by IFA Trail commission fees and one-off fees, by the average net assets throughout the year of £119,971,903.
Realised gains/(losses) in the year
This is the profit or loss that arises following the full or partial disposal of a holding in a portfolio company. It is calculated by
deducting the value of the holding as at the previous year-end from the proceeds received in respect of such disposal.
Share Price Total Return (APM)
As NAV Total Return, but the Company’s mid-market share price is used in place of NAV. This measure more accurately reflects
the actual return a Shareholder will have earned, were they to sell their shares at the period’s end date. It includes the impact of
any discounts or premiums at which the share price trades compared to the underlying net asset values of the Company. If the
shares trade at a discount, the returns could be less than the NAV Total Return, but if trading at a premium, returns could be
higher than the NAV Total Return.
Glossary of terms
84
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Information for
Shareholders
Notice of the Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of The Income & Growth VCT plc (“the Company”) will be held at the
offices of Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street, London EC3V 0HR at 11.00am on Wednesday,
22 February 2023 for the purposes of considering and, if thought fit, passing the following resolutions of which resolutions 1 to 8
will be proposed as ordinary resolutions and resolutions 9 and 10 will be proposed as special resolutions. An explanation of the
main business to be proposed is included in the Directors’ Report on pages 37 to 38 of this document:
1 To receive and adopt the Annual Report and Financial Statements of the Company for the year ended 30 September 2022
(“Annual Report”), together with the auditor’s report thereon.
2 To approve the Directors’ annual Remuneration Report as set out in the Annual Report.
3 To approve the remuneration policy as set out in the Annual Report.
4 To re-elect Maurice Helfgott as a director of the Company.
5 To re-elect Justin Ward as a director of the Company.
6 To elect Nemone Wynn-Evans as a director of the Company.
7 To re-appoint BDO LLP of 55 Baker Street, London, W1U 7EU as auditor of the Company until the conclusion of the next
annual general meeting at which accounts are laid before the Company and to authorise the directors to determine the
remuneration of the auditor.
8 That, in addition to the existing authority of the Company obtained at the general meeting of the Company on 12 October
2022, but in substitution for all other existing authorities, the directors of the Company be and hereby are generally and
unconditionally authorised pursuant to section 551 of the Companies Act 2006 (“the Act”) to exercise all the powers of the
Company to allot ordinary shares of 1 penny each in the capital of the Company (“Shares”) and to grant rights to subscribe for,
or convert, any security into Shares (“Rights”) up to an aggregate nominal value of £491,066, provided that the authority
conferred by this resolution shall (unless renewed, varied or revoked by the Company in general meeting) expire on the date
falling fifteen months after the passing of this resolution or, if earlier, at the conclusion of the annual general meeting of the
Company to be held in 2024 but so that this authority shall allow the Company to make before the expiry of this authority
offers or agreements which would or might require Shares to be allotted or Rights to be granted after such expiry and the
directors of the Company shall be entitled to allot Shares or grant Rights pursuant to any such offers or agreements as if the
authority conferred by this resolution had not expired.
9 That, subject to the passing of resolution 8 set out in this notice and in addition to the existing authority of the Company
obtained at the general meeting of the Company on 12 October 2022, but in substitution for all other existing authorities, the
directors of the Company be and hereby are empowered in accordance with sections 570 and 573 of the Act to allot or make
offers or agreements to allot equity securities (as defined in section 560(1) of the Act) for cash, pursuant to the authority
conferred upon them by resolution 8 set out in this notice, or by way of a sale of treasury shares, as if section 561(1) of the Act
did not apply to any such sale or allotment, provided that the power conferred by this resolution shall be limited to the
allotment of equity securities:
(i) with an aggregate nominal value of up to £73,659 (representing approximately 5% of the existing issued share capital) in
connection with offer(s) for subscription;
(ii) with an aggregate nominal value of up to, but not exceeding, 10% of the issued share capital of the Company from time to
time pursuant to any dividend investment scheme operated by the Company, at a subscription price per Share which may
be less than the net asset value per Share, as may be prescribed by the scheme terms; and
(iii) otherwise than pursuant to sub-paragraphs (i) and (ii) above, with an aggregate nominal value of up to, but not exceeding,
5% of the issued share capital of the Company from time to time,
in each case where the proceeds of the allotment may be used, in whole or in part, to purchase the Company’s Shares in the
market and provided that this authority shall (unless renewed, varied or revoked by the Company in general meeting) expire on
the date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the annual general meeting of
the Company to be held in 2024, except that the Company may, before the expiry of this authority, make offers or agreements
which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity
securities in pursuance of such offers or agreements as if the authority conferred by this resolution had not expired.
10 That, in substitution for any existing authorities, the Company be and hereby is authorised pursuant to and accordance with
section 701 of the Act to make one or more market purchases (within the meaning of section 693(4) of the Act) of its own
Shares provided that:
(i) the aggregate number of Shares which may be purchased shall not exceed 22,083,241 or, if lower, such number of Shares
(rounded down to the nearest whole Share) as shall equal 14.99% of the Shares in issue at the date of passing of this
resolution;
(ii) the minimum price which may be paid for a Share is 1 penny (the nominal value thereof);
(iii) the maximum price which may be paid for a Share (excluding expenses) shall be the higher of (a) an amount equal to 5%
above the average of the middle market quotations for a Share in the Company taken from the London Stock Exchange
85
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Daily Official List for the five business days immediately preceding the day on which the Share is contracted to be
purchased and (b) the amount stipulated in Article 5(6) of the Market Abuse Regulation (EU) 596/2014 (as such Regulation
forms part of UK law and as amended);
(iv) the authority conferred by this resolution shall (unless renewed, varied or revoked by the Company in general meeting)
expire on the date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the annual
general meeting of the Company to be held in 2024; and
(v) the Company may make a contract or contracts to purchase its own Shares under the authority hereby conferred prior to
the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may
make a purchase of its own Shares in pursuance of any such contract.
BY ORDER OF THE BOARD
Registered Office: Gresham House Asset Management Limited
5 New Street Square Secretary
London EC4A 3TW
Dated: 16 December 2022
Notes:
The following Notes explain your general rights as a Shareholder and your right to attend and vote at this Meeting or to appoint someone else to
vote on your behalf. A webcast of the Meeting will also be available and details of how to join the webcast will be shown on the Company’s
website. If possible, Shareholders intending to join the Meeting by means of the webcast (which would be as an attendee only) are requested to
join at least ten minutes prior to the commencement of the Meeting at 11.00am on Wednesday, 22 February 2023.
1. A member is entitled to attend, speak and vote at the Meeting in person or to appoint one or more other persons as their proxy to exercise
all or any of his rights on his behalf. Further details of how to appoint a proxy, and the rights of proxies, are given in the Notes below. Where a
member intends to join the Meeting by means of the webcast, they shall be permitted to ask questions at the Meeting but shall not be
entitled to vote on resolutions at the Meeting (and are, therefore, encouraged to lodge their proxy vote and appoint the chairman of the
Meeting as their proxy). Note 16 below will apply to those who join the meeting (which would be in attendance only) by means of the
webcast.
2. To be entitled to attend the Meeting (and for the purpose of the determination by the Company of the number of votes they may cast) and to
be able to lodge your proxy votes, Shareholders must be registered in the Register of Members of the Company at close of trading on
20February 2023. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any
person to attend the Meeting and/or virtual meeting and vote by proxy.
3. In order for a proxy appointment to be valid it must be received by Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL by
11.00 am on 20 February 2023.
4. A Shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights
attached to a different ordinary share or ordinary shares held by that Shareholder. A proxy need not be a Shareholder of the Company.
5. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s
Register of Members in respect of the joint holding (the first named being the most senior).
6. A form of proxy for use in connection with the Meeting is enclosed with the document of which this Notice forms part. If you do not have a
form of proxy and would like a copy, please contact the Company’s registrar, Link Group at 10th Floor Central Square, 29 Wellington Street,
Leeds LS1 4DL (“Registrar”), or on 0371 664 0391. Completion and return of a form of proxy form will not legally prevent a Shareholder from
attending and voting at the Meeting in person, or from joining the Meeting (which would be as an attendee only) by means of the webcast.
The Company requests all Shareholders to vote by proxy on the resolutions set out in this Notice as soon as possible.
7. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no
voting indication is given, your proxy will vote or abstain from voting at their discretion. Your proxy will vote (or abstain from voting) as they
think fits in relation to any other matter which is put before the Meeting.
8. You can also vote either:
a. by logging on to www.signalshares.com and following the instructions;
b. if you need help with voting online, please contact our Registrar, Link Group, on 0371 664 0391 if calling from the UK, or +44 (0) 371 664
0391 if calling from outside of the UK, or email Link at shareholderenquiries@linkgroup.co.uk.
c. in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out
below.
We strongly recommend voting electronically at www.signalshares.com as your vote will automatically be counted. Given the current
situation, with many people working from home and delays in the postal system, there is a risk that your vote may not be counted if you send
a paper proxy.
9. If you return more than one proxy appointment, the appointment received last by the Registrar before the latest time for the receipt of
proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication facilities are open
to all Shareholders and those who use them will not be disadvantaged.
Information for
Shareholders
86
The Income & Growth VCT plc Annual Report & Financial Statements 2022
Information for
Shareholders
Notice of the Annual General Meeting
10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting
(and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com/site/
public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service
provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
11. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy
Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must contain the
information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the
issuer’s agent (ID RA10) by 11.00 am on 20 February 2023. For this purpose, the time of receipt will be taken to mean the time (as
determined by the timestamp applied to the message by the CREST application host) from which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through
CREST should be communicated to the appointee through other means.
12. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited
does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply
in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member
is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that their CREST sponsor or
voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The
Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
13. Any corporation which is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers
as a Shareholder provided that no more than one corporate representative exercises powers in relation to the same shares.
14. As at 15 December 2022 (being the latest practicable business day prior to the publication of this Notice), the Company’s ordinary issued
share capital consists of 147,319,823 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at
15December 2022 are 147,319,823.
15. Under Section 527 of the Companies Act 2006, Shareholders meeting the threshold requirements set out in that section have the right to
require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s Financial
Statements (including the Auditor’s Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstances
connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual Financial Statements and
reports were laid in accordance with Section 437 of the Companies Act 2006 (in each case) that the Shareholders propose to raise at the
relevant meeting. The Company may not require the Shareholders requesting any such website publication to pay its expenses in complying
with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under Section 527
of the Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement
available on the website. The business which may be dealt with at the Meeting for the relevant financial year includes any statement that the
Company has been required under Section 527 of the Companies Act 2006 to publish on a website.
16. Any Shareholder attending the Meeting has the right to ask questions. Any Shareholder may submit questions in relation to the business to
be transacted at the Meeting via email to: AGM@greshamhouse.com by 16 February 2023. The Company must cause to be answered any
such question relating to the business being dealt with at the Meeting but no such answer need be given if: (a) to do so would interfere
unduly with the preparation for the Meeting or involve the disclosure of confidential information; (b) the answer has already been given on a
website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the Meeting that
the question be answered.
17. Copies of the directors’ letters of appointment will be available for inspection at the Company’s registered office during normal business
hours on any weekday (excluding Saturdays, Sundays and public holidays) until the end of the Meeting and will also be available for
inspection at the place of the Meeting at least 15 minutes before and during the Meeting.
18. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in either this Notice or
any related documents to communicate with the Company for any purposes other than those expressly stated.
A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the Company’s website at
www.incomeandgrowthvct.co.uk
87
The Income & Growth VCT plc
Annual Report & Financial Statements 2022
Information for
Shareholders
Corporate Information
Directors
Maurice Helfgott
Justin Ward
Nemone Wynn-Evans
Company’s Registered Office
5 New Street Square
London
EC4A 3TW
Company Registration Number
4069483
Legal Entity Identifier
213800FPC15FNM74YD92
Email
mobeusvcts@greshamhouse.com
Website
www.incomeandgrowthvct.co.uk
Investment Adviser, Company Secretary and Administrator
Gresham House Asset Management Limited
80 Cheapside
London
EC2V 6EE
Tel: +44(0) 20 7382 0999
info@greshamhouse.com
greshamhouse.com
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Tel: 0371 664 0324
Shareholder portal:
www.signalshares.com
Independent Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
VCT Status Adviser
Philip Hare & Associates LLP
6 Snow Hill
London
EC1A 2AY
Solicitors
Shakespeare Martineau LLP
60 Gracechurch Street
London
EC3V 0HR
Corporate Broker
Panmure Gordon (UK) Limited
1 New Change
London
EC4M 9AF
Bankers
National Westminster Bank plc
PO Box 12258
1 Princes Street
London
EC2R 8PA
The Income & Growth VCT plc