Company Announcements

MOBEUS INCOME & GROWTH VCT PLC

LEI:  213800HKOSEVWS7YPH79

ANNUAL FINANCIAL RESULTS OF THE COMPANY

FOR THE YEAR ENDED 31 DECEMBER 2021

Mobeus Income & Growth VCT plc (the "Company") announces the final results for the year ended 31 December 2021.  These results were approved by the Board of Directors on 31 March 2022.

You may, in due course, view the Annual Report & Financial Statements, comprising the statutory accounts of the Company by visiting www.migvct.co.uk.

FINANCIAL HIGHLIGHTS

As at 31 December 2021:

Net assets: £112.96 million

Net asset value ("NAV") per share: 90.31 pence

➤       Net asset value ("NAV") total return¹ per share was 42.2%².

➤       Share price total return¹ per share was 47.8%.

➤       Dividends paid and declared in respect of the financial year totalled 9.00 pence per share. Cumulative dividends paid to date since inception in 2004 stand at 148.80 pence per share.

➤       £7.54 million was invested into four new growth capital investments and eight existing portfolio companies during the year.

➤       £30.91 million of unrealised gains were achieved in the year from strong portfolio performance.

➤       The Company realised investments totalling £15.23 million of cash proceeds and generated net realised gains in the year of £5.45 million.

1    Definitions of key terms and alternative performance measures shown above and throughout this report are shown in the

Glossary of terms at the end of the Annual Report & Financial Statements.

2   Further details on the NAV total return are shown in the Performance section of the Strategic Report within the Annual Report & Financial Statements.

PERFORMANCE SUMMARY

Cumulative NAV Total return¹ performance over the last 3, 5 and 10 years is 63%, 66% and 111% respectively.

The table below shows the recent cumulative performance since launch as at the end of each of the last five years.

1   Definitions of key terms and alternative performance measures shown above and throughout this report are shown in the Glossary of terms on at the end of the Annual Report & Financial Statements.

2  Source: Panmure Gordon & Co (mid-market price). The discount on the Company's shares at 31 December 2021 was 4.2% as the share price was based on the NAV per share at 30 September 2021 of 83.47 pence.

3  The share price at 31 December 2021 has been adjusted for a 4.00 pence dividend paid after the year-end on 7 January 2022 which was ex-dividend at 31 December 2021.

Dividends paid post year-end in respect of the year ended 31 December 2021

A second interim dividend of 4.00 pence per share comprised of 0.25 pence (income) and 3.75 pence (capital) was paid to Shareholders on 7 January 2022.

CHAIRMAN'S STATEMENT

I am pleased to present the annual results of Mobeus Income & Growth VCT plc for the year ended 31 December 2021.

Overview

In last year's Annual Report, I was able to report on the Company's resilient performance over a time of material global uncertainty and market volatility.

Twelve months later, I am pleased to say that it has been a year of continued strong trading and portfolio value growth to 31 December 2021. The Company achieved an exceptional NAV total return per share of 42.2% for the year (2020: 19.3%).

Although this period has been marked by continued challenges, the portfolio has proven to be resilient and adaptive in facing them. The way in which businesses have been able to identify and capitalise on new opportunities in the changing UK consumer and business environment has been satisfying. The threat of impacts from the war in Ukraine and global supply chain issues in logistics, materials and labour is expected to remain for some months, although for the most part, trading for the Company's largely service and software-based portfolio has not been significantly impacted to date.

Despite Brexit concerns and considerable COVID-19 related restrictions across the year, M&A activity has remained buoyant and the Investment Adviser continues to see a healthy deal flow. The Company deployed £7.54 million of investment capital and generated £15.23 million in realisation proceeds from investment activity during the year. In that time, it added four new investments to its portfolio, provided follow-on funding into eight existing portfolio companies and supported the successful admission to AIM of a further two of its investments.

Shareholders should note that the portfolio now features some value concentration in two of its stocks: Preservica and Virgin Wines (13.0% and 10.6% of net assets respectively as at 31 December 2021), the latter of which was listed on AIM during the year. With this additional AIM exposure, there is the natural potential for a higher level of volatility in the value of the Company's portfolio and subsequent NAV returns. Following an initial uplift in value following the two IPOs in March 2021, the value of these quoted assets has been volatile over the rest of the year as the companies were impacted by unfavourable trading announcements and negative market sentiment. The remainder of the portfolio, on the whole, exhibited strong performance and growth over the same period.

We are witnessing a clear demonstration of the benefits of what is now a diverse and maturing portfolio. Following the 2015 VCT rule change, the revised investment strategy is now bearing fruit as more young growth investments are starting to achieve significant scale and value. This view has been validated by third-party investment transactions which have brought significant positive re-rating in values of portfolio businesses, such as MPB and MyTutor, whilst the Company has also been able to support the scaling of investments such as Preservica, to which the Company provided significant further funding in November 2021.

Performance

The Company's NAV total return per share was 42.2% for the year to 31 December 2021 (2020: 19.3%), and the share price total return was 47.8% (2020: 13.7%). This difference in returns arises principally due to the timing of NAV announcements and is explained more fully under Performance in the Strategic Report within the Annual Report & Financial Statements. The positive NAV total return for the year was principally the result of significant unrealised gains in the value of investments still held, as well as realised gains achieved via exits and partial realisations of several portfolio companies.

At the year-end, the Company was ranked 3rd out of 38 Generalist VCTs over five years and 1st out of 31 Generalist VCTs over ten years, in the Association of Investment Companies' analysis of NAV Total Return (dividends are reinvested). Shareholders should note that the AIC's rankings are based on the latest available published NAVs and therefore do not reflect the NAV per share increase achieved by the Company up to 31 December 2021. For further details on the performance of the Company, please refer to the Strategic Report within the Annual Report & Financial Statements.

Dividends

The Board continues to be committed to providing an attractive dividend stream to Shareholders and is pleased to have announced a second interim dividend of 4.00 pence per share, which was paid on 7 January 2022 to Shareholders on the register on 10 December 2021.

This second interim dividend, together with a first interim dividend of 5.00 pence per share paid on 12 July 2021, to Shareholders on the register on 21 May 2021, brings dividends paid and proposed in respect of the financial year ended 31 December 2021 to 9.00 pence per share. To date, cumulative dividends paid since inception are 148.8 pence per share.

The Company has always met, and often exceeded, the annual dividend payment target of at least 4.00 pence per share in respect of each financial year.

As Shareholders have been advised previously, the gradual move of the portfolio to younger growth capital investments as well as the realisations of older, more mature companies that have provided a good income yield are likely to make dividends harder to achieve from income and capital returns in any given year and thus, the Board continues to monitor the sustainability of the annual dividend target. Shareholders should also note that there may continue to be circumstances where the Company is required to pay dividends in excess of income and capital gains 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 paid in excess of net income and capital gains achieved will cause the Company's NAV per share to reduce by a corresponding amount.

Investment portfolio

The portfolio movements across the year were as follows:

During the year, the Company invested a total of £7.54 million into four new and eight existing portfolio companies (2020: £5.43 million; three new, four existing).

New investments totalling £3.15 million were made into Vivacity Labs (an artificial intelligence and Urban Traffic Control system), Caledonian Leisure (a provider of UK experience and leisure breaks), Legatics (a SaaS LegalTech software business) and Vet's Klinic (a veterinary clinic roll out).

Additional funding of £4.39 million was provided across eight existing portfolio companies, including Parsley Box (an ambient meals provider), Bleach London (hair colourants brand), Arkk Consulting (a reporting requirements service provider), Tapas Revolution (a Spanish restaurant chain), MyTutor (an online tutoring marketplace), Andersen EV (a producer of premium EV chargers), ActiveNav (a provider of enterprise-level file analysis software) and Preservica (a seller of proprietary digital archiving software).

The Company generated £7.23 million in proceeds from the realisation of its investments in Proactive Group and Vian Marketing Limited (trading as Red Paddle) during the year. In addition to £3.96 million of proceeds received from the partial realisations of Virgin Wines and Parsley Box (upon the admission of their shares to AIM as mentioned previously), the partial realisations of MPB Group and MyTutor, together with loan repayments and other capital receipts of £4.04 million, the Company generated total proceeds of £15.23 million in the year to 31 December 2021.

The portfolio has performed very strongly over the Company's financial year. The overall value increased by £36.36 million (2020: £14.81 million), or 71.1% (2020: 28.7%) on a like-for-like basis, compared to the start of the year. This increase comprised a net unrealised uplift in portfolio valuations of £30.91 million and £5.45 million in net realised gains over the year. The portfolio was valued at £79.81 million at the year-end (31 December 2020: £51.14 million).

Within net realised gains, the principal contributors were the full realised gains of Red Paddle (£3.28 million) as well as gains from the partial realisations of Parsley Box (£0.69 million), MPB Group (£0.53 million) and MyTutor (£0.45 million).

The portfolio's valuation at the year-end reflects the continued beneficial impact of changes in UK consumer and business behaviour brought on by the pandemic and lockdown restrictions, particularly for those businesses operating direct-to-consumer models. This also underscores the success of portfolio companies in adapting to a rapidly changing environment, diversifying their product offering in order to take advantage of opportunities that have arisen.

Since the year-end, the first joint investment by the VCTs under Gresham House took place into Proximity Insight, a retail software provider. The Company contributed £0.73 million towards a total investment of £5.00 million which completed on 10 February 2022. The Company also invested further funding totalling £0.27 million into Caledonian Leisure in January and February 2022.

The flotation of both Virgin Wines and Parsley Box on the AIM market in March 2021 resulted in significant uplifts in valuation, as well as generating an element of realised returns. As part of the Virgin Wines transaction, the Company received repayment of its remaining loan stock, leaving Virgin Wines ungeared and, as part of the IPO of Parsley Box, the Company realised part of its equity holding, securing a 4.0x return on the cost of the shares sold. As was expected, these quoted stocks are subject to stock market movements and have brought an additional level of volatility to a portion of the portfolio. In the second half of the year, Parsley Box in particular saw a subsequent value decline in the face of changing market sentiment and an announcement of results which were below market expectations. Virgin Wines has experienced similar volatility, but had returned to its float price at the year end.

In contrast, there have been substantial unquoted valuation increases, supported by a sizeable further investment from the Mobeus VCTs in the case of Preservica, and by third-party investment transactions in the cases of MyTutor, and MPB. It is gratifying that some growth investment companies in the portfolio have now started to achieve a scale that is attracting interest from larger private equity investors.

Although a minority of portfolio companies have been disadvantaged by the COVID-19 pandemic, principally as a result of staff shortages, closure of retail sites and interrupted supplies, these factors have only had a modest impact on overall shareholder returns over the course of the Company's financial year.

Further details of the Company's investment activity and the performance of the portfolio are contained in the Investment Adviser's Review and the Investment Portfolio Summary below.

Revenue account

The results for the year are set out in the Income Statement within the Financial Statements below and show a revenue return (after tax) of 0.54 pence per share (2020: 2.76 pence per share). The revenue return for the year of £0.68 million has decreased from last year's comparable figure of £3.47 million. This decrease is mainly due to the receipt of significant loan interest income in the previous year upon the sale of the Auction Technology Group.

Liquidity & Fundraising

Cash and cash equivalents held by the Company as at 31 December 2021 amounted to £32.97 million, or 29.2% of net assets. Following the payment of a 4.00 pence dividend shortly after the year-end, liquidity reduced to £27.95 million, or 25.9% of net assets.

On 20 January 2022, the Company launched an offer for subscription of £10 million, alongside offers from the other Mobeus-advised VCTs ("Offers"). I am pleased to report that the Offers experienced unprecedented demand such that the Company received subscriptions amounting to the full amount sought within 24 hours of launching and closed to any further subscriptions on 21 January 2022. In accordance with the Offer's prospectus, the allotment of all shares under the offer took place on 9 March 2022, generating net funds (after offer costs) of £9.69 million. In consideration of the environmental factors and cost savings, the Company elected to release the Prospectus digitally, with hard copies only available upon request, and invited applications to be submitted online via a digital portal. This method provided increased security and efficiency in the application process and the Board strongly recommends that Shareholders wishing to subscribe to any future offers opt to submit their applications via the online facility.

Share buybacks

During the year, the Company bought back and cancelled 1,259,139 of its own shares (2020: 1,423,180), representing 1.0% of the shares in issue at the beginning of the year (2020: 1.4%), at a total cost of £0.92 million, inclusive of expenses (2020: £0.76 million). It is the Company's policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy and currently seeks to maintain the discount at which the Company's shares trade at no more than 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.migvct.co.uk.

The Investment Adviser held a virtual Shareholder Event on the morning of

25 February 2022. A presentation was provided by representatives of each of the Mobeus VCT Boards as well as the Investment Adviser and the founders of two portfolio companies, Virgin Wines and MBI. A recording of the event is available here: https://mvcts.connectid.cloud/

Your Board is pleased to be able to hold the next Annual General Meeting ("AGM") of the Company in person at 2.00 pm on Thursday, 26 May 2022 at the offices of the Company's solicitors, Shakespeare Martineau, at 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 you are encouraged to return your proxy form before the deadline of 24 May 2022. 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 the Annual Report & Financial Statements.

Board Succession

Catherine Wall announced her retirement from the Board, effective from 1 January 2022. Catherine brought an enormous wealth of experience and breadth to the Company during her six and a half years as a director and Chairman of the Audit Committee, for which the Board is very grateful. The Board considered its composition and succession in light of this and has been engaged in a recruitment process to appoint a director to the Board who will also fulfil the role of Chairman of the Audit Committee. When recruiting prospective candidates, the Board took into consideration the range of requisite skills, experience and qualifications needed to carry out the role as well as diversity and, on 1 March 2022 the Company announced the appointment of Lucy Armstrong, which was effective immediately.

Fraud Warning

We have been made aware of a 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, claiming or appearing to be from a corporate finance firm offering to buy your shares at an inflated price.

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 at the end of the Annual Report & Financial Statements.

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.

Following the novation of the investment advisory agreement to Gresham House Asset Management Limited, who have 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. Under the new enlarged investment team, each investment executive is responsible for setting and achieving their own individual ESG objectives in support of the wider overarching ESG goals of the Investment Adviser.

Outlook

The year under review can be characterised as a continuation of the trying environment created for businesses in light of the COVID-19 pandemic and Brexit in 2020. However, much in the same way that we were able to report on its remarkable recovery one year ago, the Company has continued to achieve success in creating opportunities and building on them. This has been exemplified by strong trading performances and value growth across the portfolio and in exceeding expectations for the level of investment activity.

Whilst the immediate threat of further lockdowns from new variants of the virus appears to have lessened to some extent as we move into 2022, we anticipate that the indirect effects of the COVID-19 pandemic and Brexit will continue to impact the UK economy and bring an element of uncertainty for some time to come, most notably in the form of supply chain and inflationary pressures. More recently, the distressing invasion of Ukraine has sent shockwaves through global financial markets. Portfolio valuations may therefore remain volatile, particularly those of AIM-listed companies. Whilst the portfolio has limited direct exposure to these geographies, this action is expected to exacerbate risk factors in the short-term.

Nonetheless, following the successful fundraising in January 2022, the Board considers that your Company is well positioned to adapt as necessary.

The Board was very pleased to have witnessed such a positive response to the launch of the Company's offer for subscription in January and would like to thank all Shareholders for their interest in applying for the Company's shares. The Board has been satisfied with the Company's ability to maintain a high rate of investment in quality opportunities over the year. It believes that the additional fundraising will provide the necessary capital to continue to create value growth for Shareholders in what has, to date, proven to be a successful investment strategy.

I would like to take this opportunity once again to thank all Shareholders for your continued support.

Clive Boothman

Chairman

31 March 2022

INVESTMENT POLICY

The Company's policy is designed to meet the Company's Objective.

Investments

The Company invests primarily in a diverse portfolio of UK unquoted companies.

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 gains 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. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation.

Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company's total investments at the date of investment.

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.

INVESTMENT ADVISER'S REVIEW

Change in Management Arrangements

As Shareholders will be aware, Gresham House Asset Management Limited ("Gresham House") acquired the VCT investment advisory business of Mobeus Equity Partners LLP ("Mobeus") and, as a result, the entire investment and operations teams of Mobeus joined Gresham on 1 October 2021.

At the time of writing, the integration has been well underway for just over six months. Having formed one of the largest and most experienced teams in the VCT sector, the team recently completed its first combined investment into Proximity Insight, a retail software provider. It is hoped that this combined investment team will be a major force in the supply of capital to the VCT sector and the team's enhanced market position should attract strong deal flow in order to produce attractive investment returns.

Portfolio Review

Having recovered from the COVID-19 related decline in value by the start of the Company's financial year, the portfolio has made further positive progress over the past 12-months.

Whilst markets helped deliver a strong recovery in 2020, the main driver of value in 2021 has been a continuation of buoyant underlying trading performance across the portfolio. This has been bolstered by a small number of significant re-ratings during the year.

A limited number of portfolio companies have experienced disruption as a result of the UK lockdowns, but it is pleasing to report that a significant proportion have benefited from what appears to be a structural change in consumer purchasing habits and, indeed, the majority of the portfolio companies are now trading above their pre COVID-19 levels.

Overall, the majority of the portfolio has demonstrated a high degree of resilience, with the vast majority of companies by number showing revenue and/or earnings progression over the previous two years. Investments classified as Retailers now comprise over 43% of the portfolio by value, all of which are demonstrating the success of the direct-to-consumer business model. In the case of both Virgin Wines UK plc and Parsley Box Group plc, this strong performance led to successful AIM flotations in March 2021.

Significant up-ratings in the unquoted portfolio have been a consistent feature across the year, with third-party investment driving value uplifts in MPB and MyTutor, and a sizeable further investment from the Mobeus VCTs doing the same in the case of Preservica. Whilst the portfolio has limited exposure to more challenging sectors such as hospitality and overseas travel, software and other technology-enabled businesses have performed strongly. A small number of companies have struggled, though they are in the minority and their impact on overall shareholder return is minimal. Furthermore, some of these companies, such as Media Business Insight and RDL, have fundamentally re-engineered their businesses, which should provide a more positive outlook.

It is worth noting that Virgin Wines and Preservica currently account for a significant proportion of the invested portfolio's value (33.3% of the portfolio value, 23.6% of net assets), whilst 15.7% of the portfolio now held in AIM-listed investments (which equates to 11.1% of net assets). The AIM market has witnessed some volatility over the Company's financial year, with market sentiment reducing the initial value uplifts of the IPOs of Virgin Wines and Parsley Box in March. Whilst Virgin Wines had recovered its value by the year-end, Parsley Box was further impacted by its announcements of tougher trading conditions, supply constraints and further fundraising. In line with market practice, in both cases the Company's shareholdings are subject to lock-in arrangements for a period post-flotation.

Strong trading activity levels have created investment opportunities for the Company as portfolio companies sought to enhance their positions by building capability in light of demand. A number of further investments were therefore made into the portfolio during the year. Gresham House continues to review the opportunities for follow-on investments. M&A sentiment also remained buoyant with a continuing stream of attractive realisations throughout the period. The outlook for both follow-on investment and realisations continues to be positive.

The Company made investments totalling £7.54 million (2020: £5.43 million), comprising £3.15 million (2020: £1.86 million) into four new investments and £4.39 million (2020: £3.57 million) into eight existing investments. This level of new and follow-on investment is pleasing given the continued uncertainty and lockdown restrictions during the year under review.

A strong track record for the growth investments is now emerging which validates the strategic change arising from the change in VCT rules in 2015. Overall, it is reassuring to see that the more traditional investments, as well as the new growth investments, are continuing to make good progress.

Portfolio review

The portfolio's movements and valuation changes in the year are summarised below:

New investments during the year

The Company made four new investments totalling £3.15 million during the year, as detailed below:

Further investments during the year

A total of £4.39 million was invested into eight existing portfolio companies during the year, as detailed below:

Portfolio valuation movements

The portfolio generated net unrealised gains of £30.91 million in the year. The scale of the valuation increases was underpinned by the Company's growth portfolio, many of which have direct-to-consumer business models which have grown significantly since the onset of the COVID-19 pandemic. In the first half of the year, the Company generated significant unrealised gains, exemplified by the successful flotations of two investments on AIM. Despite ongoing uncertainties relating to COVID-19, Gresham House believes that the pandemic has accelerated existing trends in consumer behaviour and, in many cases, companies have experienced significant growth in demand. Over this period, some older style MBO portfolio companies with similar business practices have also benefited. A few companies have struggled in this environment, but their value has already been reduced to modest levels, reducing the risk to shareholder value.

Total valuation increases were £32.82 million. The main valuation increases were:

Virgin Wines, EOTH (Equip) and MPB Group generated record revenues and earnings over the lockdown periods and beyond. They have all significantly increased their customer base and each have strong growth prospects. Strong trading and recurring revenues at Preservica have attracted third-party investment interest which has led to a sizeable re-rating. MBI has recovered very strongly having developed its capability to provide both virtual and physical events.

Total valuation decreases were £(1.91) million. The main valuation decreases were:

Following a strong IPO in March, the value of Parsley Box subsequently experienced a significant decline over the year in light of market sentiment compounded by company announcements of slower than anticipated sales growth and supply disruption. The business intends to carry out a further fundraising soon. Andersen EV has been operating in a fast-developing industry beset with regulatory hurdles that have challenged its progress over the period albeit, these are now resolved. Bleach has had a challenging period having had to delay its US launch and having experienced normalised D2C revenues post UK lockdown. The US launch has now taken place after the Company's year-end.

The majority of the increase in portfolio value lies in the top 10 companies which represent over 70% of the portfolio by value. Year-on-year growth by either revenues or earnings has been seen in all of the top ten companies and it is pleasing to note that eight of these are from the younger, growth portfolio.

Growth capital investing involves companies which often have not achieved profitability, and as a result, have to be measured on other metrics. The table below shows the proportion of the portfolio that is represented by high growth pre-profit companies (often valued by reference to revenue or gross profit multiple), compared with more mature, established companies with a history of profitability and which are therefore valued on an earnings multiple:

Portfolio Realisations

The Company realised two of its investments during the year, as detailed below:

Loan stock repayments and other gains/(losses)

During the year and following the admission of its shares to AIM, the Company received £1.59 million from the partial realisation of its holding in Parsley Box, generating a realised gain of £0.69 million. Over the two years to date this investment has been held, this partial sale generated a multiple of cost of 4.0x on the cost of the shares sold. The Company also received £1.62 million from the partial realisation of MPB Group generating a realised gain of £0.39 million. This partial realisation generated a 7.8x multiple of cost on the cost of the shares sold and was the result of Vitruvian Partners, a large private equity investor, taking a sizeable equity investment in the company. There was a further partial realisation of MyTutor which generated £0.82 million proceeds for the Company and a realised gain in the year of £0.45 million.

repayments from Virgin Wines, Media Business Insight, Vian Marketing (trading as Red Paddle) and MPB Group, generating realised gains totalling £0.46 million. Finally, deferred consideration totalling £0.35 million in realised gains was received in respect of investments realised in a previous year. A small realised loss of £(0.07) million was also recognised in respect of transaction costs for Virgin Wines due to stamp duty paid upon the admission of the shares to listing on AIM.

Portfolio income and yield

In the year under review, the Company received the following amounts in loan interest and dividend income:

¹  Total portfolio income in the year is generated solely from investee companies within the portfolio. The fall in interest received is due to a significant interest receipt of £1.78 million from the realisation of Auction Technology Group in 2020.

New investment after the year-end

£0.73 million was invested into a new investment after the year-end, as detailed below:

Further investment made after the year-end

The Company made a further investment into an existing portfolio company of £0.27 million after the year-end, as detailed below:

Environmental, Social and Governance considerations

When seeking new investment opportunities, the Investment Adviser under Mobeus ensured that each potential new investment was subject to a comprehensive due diligence process encompassing commercial, financial and ESG-related considerations.

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 own ESG challenges and opportunities, which are diverse across the entire portfolio.

Following the novation of the advisory agreement to Gresham House on 30 September 2021, a market leader that is well-resourced with knowledge and expertise in sustainability, the Investment Advisor has moved to establish ESG procedures and protocols of the highest standards as set out and informed by Gresham House plc. The first tangible example of this revised approach is that that the individual members of the investment team now have their own individual ESG objectives set which align with the wider ESG goals of the Investment Adviser.

Gresham House is committed to sustainable investment as an integral part of its business strategy.  During 2021, the Investment Adviser has taken further steps to formalise its approach to sustainability and has put in place several processes to ensure environmental, social and governance ("ESG") factors and stewardship responsibilities are built into asset management across all funds and strategies, including venture capital trusts.

Gresham House believes the "G" (Governance) of ESG is the most important factor in its investment processes. Board composition, governance, control, company culture, alignment of interests, shareholder ownership structure and remuneration policy are important elements that will feed into the analysis and the valuation of portfolio companies.

The "E" and "S" (Environmental and Social) will be assessed as risk factors during due diligence to eliminate companies that face environmental and social risks that cannot be mitigated through engagement and governance changes.

Where material ESG risks are identified, these will be reviewed by the Adviser and a decision on how to proceed will be documented. The Adviser will then proactively follow up with the investee company management team and ensure appropriate corrective and preventative action is taken and any material issues or incidents are recorded by the Adviser.

Gresham House published its inaugural Sustainable Investment Report in 2021, that along with existing asset specific policies, including the Public Equity Policy, can be found on its website

(www.greshamhouse.com). These reports and policies cover the Investment Adviser's sustainable investment commitments, how the investment processes meet these commitments and the application of the sustainable investment framework.  The Gresham House Board and General Management Committee assess the adherence to the commitments in the Sustainable Investment Policies on an annual basis.

In a changing world, the Investment Adviser believes that this approach will contribute towards the enhancement of Shareholder value going forward.

Outlook

The growth strategy implemented in 2015 is clearly bearing fruit with many companies beginning to achieve significant scale and attract the interest of public markets and larger secondary investors. The portfolio is in a healthy position with many companies trading well throughout the lockdowns, and several at record levels. It continues to evolve, offering a balance of fast-growing and more stable investments at various stages of maturity and scale across a range of diverse market sectors. Meanwhile, the new investment pipeline is recovering to levels seen pre-COVID-19 and the prospects for capital deployment are encouraging.

The exceptional performance experienced since the impact of COVID-19 in March 2020 is, therefore, likely to moderate over the next 12 months as the level of activity normalises. Although the threat of further lockdowns to combat emerging new variants appears to have lessened somewhat, much uncertainty remains around the wider impact of the pandemic upon the economy, particularly in respect of supply chain and inflationary issues. The tragic events currently unfolding in Ukraine have amplified this uncertainty and shocked financial markets around the world. The Investment Adviser has reviewed the underlying assets and has concluded that there are no material impacts on the valuation of the portfolio. Whilst these events have created significant short-term volatility post year-end, the portfolio is in robust shape and the investment activity levels are promising. Gresham House therefore remains optimistic for the future.

Gresham House Asset Management Limited

Investment Adviser

31 March 2022

Investment Portfolio Summary

as at 31 December 2021

PRINCIPAL 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 and emerging risks faced by the Company. The Board's risk appetite is cognitive of the risks and rewards of investing in small unquoted companies. A key risk management review and robust assessment of the risks takes place at each quarterly Board meeting and the Board discusses emerging risks as and when they arise, such as the COVID-19 pandemic, and puts in place mitigating actions to manage the risk. The principal and emerging risks identified by the Board, a description of the possible consequences of each risk and how the Board manages each risk are set out below:

STATEMENT OF 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; and

●        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 Financial Statements are published on the Company's website at  www.migvct.co.uk, which is maintained by the Investment Adviser. The maintenance and integrity of the website maintained by the Investment Adviser is, so far as it relates to the Company, the responsibility of the Investment Adviser. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the accounts since they were initially presented to the website.  The accounts are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

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.

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 position, 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.

For and on behalf of the Board

Clive Boothman

Chairman

31 March 2022

FINANCIAL STATEMENTS

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 reduced due to shares bought back 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.

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 8), all such movements through both revaluation and realised capital 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 and any realised losses on the sale or impairment of investments (excluding transaction costs) are charged to this reserve. 75% of the Investment Adviser fee expense, and the related tax effect, that are charged to the realised capital reserve are transferred to this reserve. This reserve will also be charged any IFA facilitation payments to financial advisers, which arose as part of the Offer for Subscription.

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.