Final Results

PROVEN GROWTH AND INCOME VCT plc FINAL RESULTS for the year ended 28 FEBRUARY 2010 FINANCIAL SUMMARY    New Original  'C' 'D' Ordinary Ordinary  Shares  Shares Shares  Shares As at 28 February 2010 2009 2010 2009 2010 2009 2010 2009 pence pence pence pence pence pence pence pence Net asset value per share 74.10 n/a 45.80 57.10 74.10 76.70 92.30 n/a Dividends paid since launch - n/a 146.90 132.90 9.60 8.25 - n/a Total return 74.10 n/a 192.70 190.00 83.70 84.95 92.30 n/a (net asset value plus dividends paid since launch) CHAIRMAN'S STATEMENT I am pleased to present the Annual Report for ProVen Growth and Income VCT plc for the year ended 28 February 2010 and would like to welcome any new shareholders who may have subscribed under the Company's recent Linked 'D' Share offer or the Ordinary Share Top-Up Offer. Against a background of unprecedented volatility in stock markets, the continuing uncertainty about the economy has held back development of many smaller companies.  The Investment Manager has also taken a cautious approach to investing in this climate.  This has resulted in a relatively low level of investment activity during the year. The Board recognises that this has been a risky time for investing and is supportive of the Investment Manager's patient approach to identifying and securing suitable investment opportunities. The valuations of unquoted businesses are generally a discounted reflection of stock market pricing and it is therefore pleasing to be able to report that overall the existing portfolio has performed satisfactorily. Away from the investment activities, the Company undertook a number of corporate actions. Fundraisings were launched in both the 'D' Share and Ordinary Share pools.  A tender offer was undertaken in respect of the 'C' Shares and subsequently the 'C' Share pool was merged with the original ordinary share pool and followed with a share consolidation to create New Ordinary Shares. Details of the tender offer, merger and share consolidation are shown below. Following these events, the Company now has two classes of shares which simplifies the management and administration tasks. Net asset value Ordinary Shares At 28 February 2010 the Company's New Ordinary Share Net Asset Value ("NAV") stood at 74.1p per share. For original Ordinary Shareholders, this represents an increase of 2.7p or 6.3% since 28 February 2009 after adjusting for the dividends of 14.0p which were paid during the year and the conversion to New Ordinary Shares. The Total Return (NAV plus dividends paid to date) to Ordinary Shareholders that invested at the Company's launch now stands at 192.7p per original ordinary share. For Shareholders who originally invested in 'C' Shares this represents a small decrease of 1.25p or 1.7% since 28 February 2009 after adjusting for the dividends of 1.35p per share which were paid during the year. 'D' Shares The NAV of the Company's 'D' Shares stood at 92.3p at 28 February 2010, a decrease of 2.2p or 2.3% on the initial 'D' Share NAV of 94.5p per share. No dividends have been paid to 'D' Shareholders to date. Portfolio activity and valuation Ordinary Share pool (including 'C' Share portfolio) The economic climate has not been supportive of investment realisations at attractive prices, nor has new investment been easy. A number of new investment opportunities were progressed to an advanced stage, but they have proved impossible to complete on acceptable terms. Accordingly, the investment activity in the Ordinary Share pool during the year comprised two follow-on investments totalling £643,000 and a small number of realisations were achieved, primarily from repayments of loan stock, which produced total proceeds of £283,000. A detailed review of the investment valuations of the unquoted portfolio at the year end has resulted in a net unrealised gain for the year of £1.0 million.  Further details are provided in the Investment Manager's Review and the Review of Investments. 'D' Share pool The 'D' Share pool did not make any investments during the year and held its funds in bank deposits and liquidity funds as at the year end. Results and dividends The total return on ordinary activities for the year was as follows:   Revenue Capital Total   £'000 £'000 £'000 Ordinary Shares (152) 996 844 'C' Shares (393) (499) (892) 'D' Shares (54) (69) (123)   (599) 428 (171) On 3 July 2009, the Company paid interim dividends of 14.0p per original Ordinary Share (2009: 31.0p per share) and 1.35p per 'C' Share (2009: 1.0p). The Board is not proposing to pay final dividends in respect of either share class for the year ended 28 February 2010. New fundraisings Linked 'D' Share issue In November 2009, the Company launched a second Linked 'D' Share offer, in conjunction with ProVen VCT plc.  Up to the date of this report, the offer has raised a total of £5.2 million of which £2.6 million is allocated to 'D' Shares issued and to be issued by ProVen Growth and Income VCT plc. No shares were issued before 28 February 2010. The offer is scheduled to close on 29 October 2010 and will provide the Company with additional funds over which the fixed running costs of the Company can be borne and to make further venture capital investments. Ordinary Share Top-up Offer In November 2009, the Company also launched an Ordinary Share Top-Up offer, in conjunction with ProVen VCT plc and Proven Health VCT plc.  The offer raised a total of £2.1 million of which £0.7 million was allocated to Ordinary Shares issued by ProVen Growth and Income VCT plc. No shares were issued before 28 February 2010. The offer closed on 28 May 2010. Share buybacks In order to ensure liquidity in the market in the Company's shares, the Company has operated a policy of buying in its own shares that become available in the market. During the year, the Company repurchased 34,633 Original Ordinary Shares at an average price of 39.5p per share, 5,174,771 'C' Shares at an average price of 75.2p per share and 186,001 New Ordinary Shares at an average price of 64.7p per share for cancellation. The Board intends to continue to make purchases of its shares when they become available in the market and has a current policy of purchasing New Ordinary Shares at a price equivalent to a 10% discount to the latest published NAV and  at a 5% discount in respect of 'D' Shares. A special resolution to allow the Board to continue to purchase shares for cancellation will be proposed at the forthcoming AGM. Investment policy In light of the current market conditions, the Board has reviewed the Company's Investment Policy and is proposing to make a minor adjustment to increase flexibility in respect of the non-qualifying investments. The Investment Manager sees opportunities to make further investments in existing portfolio companies or other companies familiar to the Manager that, for technical reasons, would not be VCT qualifying, for example, a purchase of shares from an exiting member of an investee company's management team. Such investment opportunities can be at attractive prices and are, of course, in companies well-known to the Investment Manager. Board composition In September 2010, a UK Listing Rule in relation to Directors' Independence becomes effective for all VCTs.  Under the rule, Directors who also serve on the Board of other funds managed by the same investment manager are deemed not to be independent of the investment manager.  In view of this, I have agreed to step down from the Board of ProVen Growth and Income VCT at the forthcoming AGM.  I will continue as chairman of Proven VCT plc. The Board has decided not to seek to appoint a replacement director as it has concluded that a board comprising four directors is sufficient for a VCT of this size.  Marc Vlessing, who has served as a director since the Company's launch in 2001, has agreed to take over as Chairman. Some changes to the individual directors' fees have been agreed to reflect the changes to the Board, however total Directors' fees will not increase. It has been a pleasure to chair what has been one of the best performing VCTs and I wish Marc every success in his new role. Annual General Meeting The Annual General Meeting ("AGM") of the Company will be held at 39 Earlham Street, London WC2H 9LT at 12:15 p.m. on 24 August 2010. Five items of special business will be proposed at the AGM in respect of share buybacks, adjustment to the Investment Policy, adoption of updated Articles of Association (as described in the Report of the Directors) and two resolutions in connection with authority for the Directors to allot shares. Outlook Although there has been a low level of investment activity over the year under review, the Board takes comfort from the fact that the Company's NAVs have been reasonably stable over this difficult year and are generally satisfied with the performance of the majority of the existing portfolio companies. The Board expects to see higher levels of new investment activity during the coming year, in particular in respect of the 'D' Share pool.  This has already been evident since the year end, during which time the Company has made one new investment.  Although the recession may be coming to an end, we are still expecting to see continuing turmoil and growth uncertainty.  The new Government has unprecedented challenges to deal with and, as a result, we must expect uncomfortable and, possibly, abrupt policy changes which will provide opportunities and reverses to the small enterprises that form our investment pools.  Nonetheless, this phase of the economic cycle has historically yielded excellent growth opportunities.  Accordingly, we will be looking to the Investment Manager to continue to generate dealflow from which the Company can secure attractive new investments. Andrew Davison Chairman 'C' SHARE TENDER OFFER, CONVERSION AND SHARE CONSOLIDATION 'C' Share tender offer The prospectus for the 'C' Share fundraising issued by the Company in November 2005 set out an intention to return at least 25p per 'C' Share to 'C' Shareholders within 3½ years of the close of the offer for subscription through a combination of tax-free dividends and a tender offer.  In July 2009, the Company fulfilled this intention by means of a tender offer. Under the tender offer the Company acquired 5,079,999 'C' Shares at a price of 75.35p per share.  These shares were subsequently cancelled. 'C' Share conversion and share consolidation Following the tender offer described above and as set out in the Company's 'C' Share prospectus, the Company's 'C' Shares were converted into Ordinary Shares.  The conversion was based on the relative NAVs of the Ordinary Shares and 'C' Shares as at 31 August 2009. Following the conversion, the Ordinary Shares were consolidated into New Ordinary Shares at such a ratio such that the NAV of a New Ordinary Share was equal to that of a 'C' Share before conversion.  As the original 'C' Share class had significantly more members than the original Ordinary Share class, the Board felt that this consolidation made it more straightforward for the majority of Shareholders to follow the value of their investment. The effect on the holdings of original ordinary shareholders and 'C' Shareholders is summarised below: * For every original ordinary share held 0.6178 New Ordinary Shares were issued. * For every 'C' Share held 1 New Ordinary Share was issued. All Ordinary and 'C' Shareholders will have received new share certificates for the New Ordinary Shares following the conversion and consolidation. Any original Ordinary Share or 'C' Share certificates are now invalid. INVESTMENT MANAGER'S REVIEW Introduction Beringea LLP is a specialist venture capital management company which has been established for over 20 years. It currently manages over £60 million of venture capital funds in the UK and has been the investment manager of ProVen Growth and Income VCT plc since inception in 2001. The Company currently has two share classes: Ordinary Shares and 'D' Shares. The Company's 'C' Shares, which were in existence at the start of the year, merged with the Ordinary Shares in October. As a result, the original ordinary shareholders and original 'C' shareholders now have an interest in a wider range of investments in the New Ordinary Share pool. Going forward, the Ordinary Share and 'D' Share pools will remain as separate pools. The year covered by this report was one of the most challenging periods for making new investments for many years.  With the UK economy in recession for most of the period and the stock market falling dramatically between September 2008 and March 2009, confidence among the owners and directors of small growth companies was in short supply.  Consequently, few businesses were seeking to raise additional capital, as companies put their expansion plans on hold until there was visibility of a return to economic growth.  Likewise, we were cautious when reviewing new investment opportunities, focusing our attention on companies with exceptional management and strong competitive positions.  Against this background, the volume of new investments made by the Company was much lower than in previous years, reflecting the trend across the venture capital industry.  Following the UK's return to economic growth, the flow of new investment opportunities has increased significantly and we expect that the rate of new investment will increase during the year ending 28 February 2011.  The competition for good deals remains fierce, however, and we will be vigilant about not overpaying for investments. Ordinary Share pool - portfolio activity & valuation Two follow on investments in Overtis and Fjordnet, totalling £643,000, were made from the Ordinary Share pool during the year. The investment in Overtis enables the company to further develop its software security solutions and its sales channels to market. The investment in Fjordnet was part of the original investment strategy but was delayed in order to meet the VCT qualification rules. Since the Company's investment in Fjordnet, the digital media agency has opened two new offices and now has operations in London, Helsinki, Berlin, Madrid and New York. The new international offices have enabled Fjordnet to respond to the needs of global clients. The company was instrumental in bringing the BBC iPlayer to mobile. At 28 February 2010, the Company's Ordinary Share pool comprised 26 investments with a total cost of £17.9 million and a valuation of £15.3 million. In addition, the Ordinary Share pool held cash and liquidity funds of £2.5 million. The merger of the previously separate Ordinary Share and 'C' Share pools has resulted in a broader diversification of investments. Only Espresso Group and Fjordnet account individually for more than 10% by value of the total Ordinary Share investments. Espresso is entering the next phase of its development having secured a significant share of the primary school market. The company continues to increase its share of the UK secondary school market and is exploring a number of international expansion opportunities. Espresso's launch in Sweden has already demonstrated its international potential and, since the year end, the Espresso primary school service has also been launched in the United States. Espresso made a further scheduled repayment of loan notes during the year, as did Ashford Colour Press and Dianomi. A number of other portfolio companies have shown encouraging results particularly when viewed against the challenging economic backdrop. Eagle Rock continues to perform well and is further strengthening its position by indentifying new ways to leverage its impressive rights catalogue.  The recent purchase of Edel Music further adds to the company's attractiveness as a potential acquisition target. Charterhouse Leisure, a small restaurant chain operating under the brand name "Coal Grill & Bar" has also performed well. The CEO is an experienced restaurateur who ran the Ma Potters restaurant chain in which the Company invested and made a strong return. We have been able to uplift the valuations of both these companies as a result of this performance. Disappointingly, Optima Data Intelligence Solutions (ODIS) was placed in administration. ODIS suffered from the impact of the economic downturn on its clients in the magazine publishing industry. The company was unable to achieve a trade sale and an orderly administration was the only viable alternative. 'D' Share pool - portfolio activity & valuation At 28 February 2010, the 'D' Share portfolio comprised net assets of £5.1 million. This comprised net cash, after operating expenses, from the original 'D' Share offer which closed in October 2009 and funds from unallotted subscriptions from the subsequent offer launched in November 2009. No investments were made during the period. In April 2010, £504,000 was invested from the 'D' Share pool in Tossed as part of a total £1.5 million investment from ProVen VCT and ProVen Growth and Income VCT. Tossed is a chain of healthy eating outlets offering ethically sourced food. The company currently has six outlets in central London and the ProVen VCTs' investment will provide funds for further development. The CEO, Vincent McKevitt, has been recognised as one of the leading young entrepreneurs in the country. Proposed change in investment policy During the year we have been presented with several opportunities to make further investments in portfolio companies which are performing well but where the additional investment would not be VCT qualifying for technical reasons.  We are therefore supporting the Board's proposal that the Company's investment policy is changed to allow a portion of the non-qualifying part of the Company's assets to include investments originated in line with the Company's qualifying VCT policy but which do not qualify under the VCT rules for technical reasons.  We believe that this will allow us to achieve a higher total investment return.  A resolution seeking Shareholder approval for this change is included in the Notice of AGM. Outlook The UK economy appears to be growing again, although at a relatively slow rate.  Historically, this phase of the economic cycle has been the best for making venture capital investments, as entry prices are at a cyclical low point.  As the economy recovers over the next few years, well managed small companies have the potential to grow much more quickly than larger businesses, resulting in rapid increases in valuation and ultimately profitable disposals.  We are already seeing a significant increase in the flow of new opportunities which could result in a healthy crop of new investments, although we remain highly selective about the businesses in which the Company invests. We continue to spend a substantial amount of time working with the Company's existing portfolio companies to ensure that they are well positioned to take advantage of the economic upturn.  The benefits of this supportive approach to the portfolio are already being seen in the companies' performance and we are cautiously optimistic that this trend will strengthen throughout the current financial year. Beringea LLP INVESTMENT MANAGER'S REVIEW During the year £643,000 was invested into two existing portfolio companies. Five investments with an original acquisition cost of £1.6 million were realised generating a loss of £0.5 million. The tables below summarise the transactions during the year: Additions   Cost £'000 Venture capital investments Fjordnet Limited** 400 Overtis Group Limited** 243   643 Disposals   Cost Market Proceeds Profit/(loss) vs Realised Value at cost gain/(loss)£'000 £'000 28/02/09 £'000 £'000 Venture capital investments Ashford Colour 69 32 69 - - Press Limited** Espresso Group 147 147 147 - - Limited** Dianomi 54 54 54 - - Limited**  Sports Holdings - - 13 13 13 Limited** Optima Data 1,299 507 - (1,299) (507) Intelligence Services Limited   1,569 740 283 1,286 (494) **   Investments also held by Proven VCT plc INVESTMENT PORTFOLIO - ORDINARY SHARE POOL as at 28 February 2010 Ordinary Share portfolio of investments The following investments were held at 28 February 2010:     Valuation Valuation movement in % of portfolio   Cost year   £'000 by value   £'000 £'000 Top ten venture capital investments (by value) Espresso Group Limited** 1,583 2,271 (277) 12.8% Fjordnet Limited** 1,400 2,017 617 11.4% Charterhouse Leisure 1,000 1,235 434 7.0% Limited**  Eagle Rock Entertainment 680 1,180 302 6.7% Group Limited** Overtis Group Limited** 1,093 1,074 (19) 6.0% Chess Technologies 900 989 89 5.6% Limited** Lazurite Limited** 1,000 962 (37) 5.4% Prelude Media Limited 1,000 959 (41) 5.4% Donatantonio Limited** 1,366 890 239 5.0% Saffron Media Group 670 889 219 5.0% Limited** 10,692 12,466 1,526 70.3% Other venture capital 7,215 2,804 (65) 15.7% investments Total venture capital 17,907 15,270 1,461 86.0% investments Liquidity funds   1,250   7.0% Cash at bank and in hand   1,249   7.0% Total Ordinary Share   17,769   100.0% investments All venture capital investments above are unquoted unless otherwise stated. Other venture capital investments as at 28 February 2010 comprise: SPC International Limited**, Path Group Limited**, Dianomi Limited**, Ashford Colour Press Limited**, Heritage Partners Limited**, Campden Media Limited**, Steak Media Limited**, Coolabi plc* **, Breeze Tech Limited**, Pilat Media Global plc* **, UBC Media Group plc* **, Sports Holdings Limited**, Immedia Group plc*, The Vending Corporation Limited**, Isango! Limited**, Baby Innovations S.A. t/a Steribottle**. * Quoted on AIM ** Investments also held by ProVen VCT plc All venture capital investments above are registered in England and Wales with the exception of Baby Innovations S.A., which is registered in Madeira. STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the Report of the Directors, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Services Authority. Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).  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 those financial statements, the Directors are required to: * select suitable accounting policies and then apply them consistently; * make judgments and estimates that are reasonable and prudent; * state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and * prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping 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 to enable them to ensure that the financial statements, and the Directors' Remuneration Report, comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information relating to the Company included on the Managers' websites. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions. STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS The Directors in office at the date of the report have confirmed, as far as they are aware, that there is no relevant audit information of which the Auditors are unaware. Each of the Directors have confirmed that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the Auditors. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. Grant Whitehouse Company Secretary 39 Earlham Street London WC2H 9LT INCOME STATEMENT for the year ended 28 February 2010 Company Position     Year ended 28 February Year ended 28 February 2009 2010 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Income   243   -   243   1,188   -   1,188 Gains/(losses) on   -   967   967   -   (4,055)   (4,055) investments     243   967   1,210   1,188   (4,055)   (2,867) Investment management   (118)   (356)   (474)   (136)   (407)   (543) fees Performance incentive   (7)   (184)   (191)   (27)   (634)   (661) fees Recoverable VAT   -   1   1   51   155   206 Other expenses   (717)   -   (717)   (271)   (16)   (287) Return on ordinary   (599)   428   (171)   805   (4,957)   (4,152) activities before tax Tax on ordinary   -   -   -   (217)   217   - activities Return attributable   (599)   428   (171)   588   (4,740)   (4,152) to equity shareholders Basic and Diluted   (2.3p)   2.1p   (0.2p) return per New Ordinary Share Basic and Diluted               0.7p   (14.0p)   (13.3p) return per Original Ordinary Share Basic and Diluted   -   -   -   2.2p   (15.2p)   (13.0p) return per 'C' Share Basic and Diluted   (1.1p)   (1.5p)   (2.6p)   -   -   - return per 'D' Share All revenue and capital items in the following statements and above derive from continuing operations.  No operations were acquired or discontinued during the year.  The total column within the Income Statement represents the profit and loss account of the Company. A Statement of Total Recognised Gains and Losses relating to each class of share has not been prepared as all gains and losses are recognised in the relevant Income Statements in the current and prior year as shown the following statement and above. Other than revaluation movements arising on investments held at fair value through the Income Statement, there were no differences between the return/loss as stated on the following statement and above and at historical cost. There are no 'D' Share comparative figures; the first allotment of 'D' Shares was in March 2009. INCOME STATEMENT for the year ended 28 February 2010 Split as: Ordinary Shares (including 'C' Share pool)     Year ended 28 February Year ended 28 February 2009 2010 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Income   217   -   217   1,188   -   1,188 Gains/(Losses) on   -   967   967   -   (4,055)   (4,055) investments     217   967   1,184   1,188   (4,055)   (2,867) Investment management   (95)   (287)   (382)   (136)   (407)   (543) fees Performance incentive   (7)   (184)   (191)   (27)   (634)   (661) fees Recoverable VAT   -   1   1   51   155   206 Other expenses   (660)   -   (660)   (271)   (16)   (287) Return on ordinary   (545)   497   (48)   805   (4,957)   (4,152) activities before tax Tax on ordinary   -   -   -   (217)   217   - activities  Return attributable   (545)   497   (48)   588   (4,740)   (4,152) to equity shareholders 'D' Shares     Year ended 28 February Period ended 28 February 2010 2009 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Income   26   -   26   -   -   - Gains/(Losses) on   -   -   -   -   -   - investments     26   -   26   -   -   - Investment management   (23)   (69)   (92)   -   -   - fees Performance incentive   -   -   -   -   -   - fees Recoverable VAT   -   -   -   -   -   - Other expenses   (57)   -   (57)   -   -   - Return on ordinary   (54)   (69)   (123)   -   -   - activities before tax Tax on ordinary   -   -   -   -   -   - activities  Return attributable to   (54)   (69)   (123)   -   -   - equity shareholders RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 28 February 2010   Year ended 28 February 2010 Year ended 28 February 2009 Ordinary 'C' 'D' Total Ordinary 'C' Total Shares Shares Shares Shares Shares £'000 £'000 £'000 £'000 £'000 £'000 £'000  Opening shareholders' funds 3,890 19,055 - 22,945 7,594   23,691   31,285  Issue of shares - - 5,526 5,526   656   -   656  Share issue   - - (304) (304)   (36)   -   (36) costs  Purchase of   (14) (3,911) - (3,925)   (47)   (77)   (124) own shares  Distributions   (955) (335) - (1,290)   (3,375)   (1,309)   (4,684)  Conversion of   13,917 (13,917) - -   -   -   - shares  Purchase of     -   -   - own converted shares (121) - - (121)  Total recognised (losses)/gains for the year 844 (892) (123) (171)   (902)   (3,250)   (4,152)  Closing   17,561 - 5,099 22,660 3,890   19,055   22,945 shareholders' funds BALANCE SHEET as at 28 February 2010 28 February 2010 28 February 2009 New 'D' Total Original 'C' Total Ordinary Ordinary Shares** Shares* Shares Shares £'000 £'000 £'000 £'000 £'000 £'000 Fixed assets Investments   15,270 -   15,270   2,406    11,537   13,943 Current assets Debtors   380 589   969   945    569   1,514 Current   1,250 1,250   2,500   1,470    6,080   7,550 investments Cash at bank   1,249 3,758   5,007   25    948   973 and in hand   2,879 5,597   8,476   2,440    7,597   10,037   (588) (498)   (1,086)   (956)    (79)   (1,035) Net current   2,291 5,099   7,390   1,484    7,518   9,002 assets Total assets less current 17,561 5,099 22,660 3,890 19,055 22,945 liabilities/ Net assets Capital and reserves Called up share   383 55   438   68    1,243   1,311 capital Capital   943 -   943   9    6   15 redemption reserve Share premium   - 5,167   5,167   641    22,357   22,998 Special reserve   19,381 -   19,381   2,517    -   2,517 Capital reserve   34 (69)   (35)   971    (224)   747 - realised Unrealised   (2,636) -   (2,636)   (350)    (4,541)   (4,891) holding losses Revenue reserve   (544) (54)   (598)   34    214   248 Total equity   17,561 5,099   22,660   3,890    19,055   22,945 shareholders' funds Basic and   74.1p 92.3p       57.1p    76.7p diluted net asset value per share CASH FLOW STATEMENT for year ended 28 February 2010   Year ended Year ended 28 February 2010 28 February 2009   Ordinary 'C' 'D' Total Ordinary 'C' Total Shares Shares Shares Shares Shares £'000 £'000 £'000 £'000 £'000 £'000 £'000 Net cash outflow from operating activities (315) (14) (214) (543) (752) (24) (776) Capital expenditure Purchase of investments (643) - - (643) (350) (7,687) (8,037) Sale of 283 - - 283 2,662 422 3,084 investments Net cash inflow/(outflow) from capital expenditure (360) - - (360) 2,312 (7,265) (4,953) Equity dividends paid (955) (335) - (1,290)   (3,375) (1,309) (4,684) Management of liquid resources Purchase of current investments held as liquidity funds - - (1,250) (1,250) (1,000) (300) (1,300) Withdrawal from liquidity funds 1,250 5,050 - 6,300 1,800 8,500 10,300 Net cash 1,250 5,050 (1,250) 5,050 800 8,200 9,000 inflow/(outflow) from liquid resources Net cash inflow/(outflow) before financing (380) 4,701 (1,464) 2,857 (1,015) (398) (1,413) Financing Proceeds from share issue - - 5,526 5,526   637 - 637 Share issue costs   - - (304) (304)   (36) - (36) Purchase of own shares (13) (3,911) - (3,924)   (47) (77) (124) Transfer of bank on conversion of shares 1,738 (1,738) - -   - - - Purchase of own converted shares (121) - - (121)   - - - Net cash inflow/(outflow) from financing 1,604 (5,649) 5,222 1,177   554 (77) 477 Increase/ (decrease) in cash 1,224 (948) 3,758 4,034 (461) (475) (936) NOTES Basis of accounting The Company has prepared its financial statements under UK Generally Accepted Accounting Practice ("UK GAAP") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" revised January 2009 ("SORP"). The financial statements are prepared under the historical cost convention except for certain financial instruments measured at fair value. The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. The Company implements new Financial Reporting Standards ("FRS") issued by the Accounting Practices Board when required. Presentation of income statement In order to better reflect the activities of an investment trust company and in accordance with guidance issued 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 net revenue is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Part 6 of the Income Tax Act 2007. Fixed assets investments Investments are designated as "fair value through profit or loss" assets due to investments being managed and performance evaluated on a fair value basis.   A financial asset is designated within this category if it is both acquired and managed, with a view to selling after a period of time, in accordance with the Company's documented investment policy.  The fair value of an investment upon acquisition is deemed to be cost.  Thereafter investments are measured at fair value in accordance with the International Private Equity and Venture Capital Valuation Guidelines ("IPEV Guidelines") together with FRS26 - Financial Instruments: Recognition and Measurement.  New IPEV Guidelines were issued in September 2009 and have been used for the valuations as at 31 January 2010. The Directors and the Investment Manager consider that the valuations prepared under the new IPEV Guidelines do not differ materially from the valuations that would have been prepared under the previous version of the IPEV Guidelines. Publicly traded investments are measured using bid prices in accordance with the IPEV Guidelines. The valuation methodologies used by the Directors for assessing the fair value of unquoted investments are as follows: * Price of recent investment; * Multiples; * Net assets; * Discounted cash flows or earnings (of underlying business); * Discounted cash flows (from the investment); and * Industry valuation benchmarks. The methodology applied takes account of the nature, facts and circumstances of the individual investment and uses reasonable data, market inputs, assumptions and estimates in order to ascertain fair value. Where an investee company has gone into receivership or liquidation, or there is little likelihood of a recovery from a company in administration, the loss on the investment, although not physically disposed of, is treated as being realised. Gains and losses arising from changes in fair value are included in the Income Statement for the year as a capital item. It is not the Company's policy to exercise significant influence over investee companies.  Therefore, the results of these companies are not incorporated into the Income Statement except to the extent of any income accrued. This is in accordance with the SORP that does not require portfolio investments to be accounted for using the equity method of accounting. Current assets investments Current assets investments comprise investments in liquidity funds with AAA rating and are redeemable on call. These investments are fair value through profit or loss assets and are marked-to-market. Income Dividend income from investments is recognised when the shareholders' rights to receive payment has been established, normally the ex dividend date or, where no dividend date is established, when the Company's right to receive payment is established. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable and only where there is reasonable certainty of collection.  Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investments. Expenses All expenses are accounted for on accruals basis. In respect of the analysis between revenue and capital items presented within the income statement, all expenses have been presented as revenue items except as follows: * expenses which are incidental to the acquisition of an investment are deducted from the Capital Account; * expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment; and * expenses are split and presented partly as capital items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated and accordingly the investment management fee has been allocated 25% to revenue and 75% to capital, in order to reflect the Directors' expected long-term view of the nature of the investment returns of the Company. Taxation The tax effects of different items in the Income Statement are allocated between capital and revenue on the same basis as the particular item to which they relate using the Company's effective rate of tax for the accounting period. Due to the Company's status as a venture capital trust and the continued intention to meet the conditions required to comply with Part 6 of the Income Tax Act 2007, no provision for taxation is required in respect of any realised or unrealised appreciation of the Company's investments which arises. Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. Other debtors and other creditors Other debtors (including accrued income) and other creditors are included within the accounts at amortised cost, equivalent to the fair value of the expected balance receivable/payable by the Company. Share issue costs Expenses in relation to share issues are deducted from the Share Premium Account.   Ordinary/'C' Share pool 'D' Share pool Revenue return per share based on: Net revenue after taxation (£'000) (545)   (54) Weighted average number of shares in 23,773,597   4,685,172 issue Pence per New Ordinary Share/'D' Share (2.3p)   (1.1p) Capital return per share based on: Net capital gain/(loss) for the 497   (69) financial year (£'000) Weighted average number of shares in 23,773,597   4,685,172 issue Pence per New Ordinary Share/'D' Share 2.1p   (1.5p) As the Company has not issued any convertible securities or share options, there is no dilutive effect on return per share.  The return per share disclosed therefore represents both basic and diluted return per share. 2010 2009 Shares in issue Net asset value Net asset value 2010 2009 pence per £'000 pence per £'000 share share New Ordinary 23,684,352 n/a   74.1p   17,561     n/a   n/a Shares Original n/a 6,816,160   n/a   n/a     57.1p   3,890 Ordinary Shares 'C' Shares - 24,855,707   -   -     76.7p   19,055 'D' Shares 5,525,501 -   92.3p   5,099     -   -           22,660         22,945 As the Company has not issued any convertible securities or share options, there is no dilutive effect on net asset per share.  The net asset value per share disclosed therefore represents both basic and diluted return per share. As a VCT, the majority of the Company's assets are represented by financial instruments which are held as part of the investment portfolio. In order to ensure continued compliance with the relevant VCT regulations and to be in a position to deliver the long-term capital growth which is part of the Company's investment objective, the Board is very much aware of the need to manage and mitigate the risks associated with these financial instruments. The management of these risks starts with the application of a clear investment policy which has been developed by the Board who are experienced investment professionals. Furthermore, the Board has appointed an experienced investment manager to whom they have communicated the Company's investment objectives and whose remuneration is linked to the achievement of those objectives. The Investment Manager reports regularly to the Board on performance. Further information about the VCT's investment policy is set out in the Report of the Directors. In assessing the risk profile of its investment portfolio, the Board has identified two principal classes of financial instrument. Instruments deemed to be "fair value through profit or loss account" assets are recognised as such on initial recognition. In addition to its investment portfolio, the VCT maintains a portfolio of liquidity funds and a cash balance with one of the main UK banks. The Directors consider that the risk profile associated with cash deposits and liquidity fund investments is low and thus the carrying value in the financial statements is a close approximation of the fair value. The Board has reviewed the Company's financial risk profile and is of the opinion that the exposure to financial risk has not changed significantly since the previous year. A review of the specific financial risks faced by the Company is presented below. Financial liabilities The Company has no financial liabilities or guarantees, other than the creditors disclosed within the balance sheet. Currency exposure As at 28 February 2010, the Company had one overseas investment, Baby Innovations S.A., which trades in Euros and was valued at £Nil (2009: £Nil). This represented Nil% of Net Assets (2009: Nil %). Market risks The key market risks to which the Company is exposed are interest rate risk and market price risk. The Company has undertaken sensitivity analysis on its financial instruments, split into the relevant component parts, taking into consideration the economic climate at the time of review in order to ascertain the appropriate risk allocation. Interest rate risk The Company receives interest on its cash deposits at a rate agreed with its banker and on liquidity funds at rates based on the underlying investments. Investments in loan stock and fixed interest investments attract interest predominately at fixed rates. As the Company must comply with the VCT regulations, increases in interest rates could lead to a potential breach of these regulations.  The Company therefore monitors the level of income received from fixed, variable floating, floating and non interest rate assets to ensure that the regulations are not breached. Due to the relatively short period to maturity of the fixed rate investments held within the portfolio, it is considered that an increase or decrease of 25 basis points in the interest rates as at the reporting date would not have had a significant effect on the Company's net assets or total return for the year. Market price risk Market price risk arises from uncertainty about the future prices of financial instruments held in accordance with the Company's investment objectives.  It represents the potential loss that the Company might suffer through holding market positions in the face of market movements. At 28 February 2010, the unrealised loss on AIM quoted portfolios was £807,000 (2009: unrealised loss £857,000). The investments that the Company holds are, in the main, thinly traded and, as such, the prices are more volatile than those of more widely traded securities.  In addition, 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.  The ability of the Company to purchase or sell investments is also constrained by the requirements set down for VCTs. It is not the Company's policy to use derivative instruments to mitigate market risk, as the Board believes that the effectiveness of such instruments does not justify the cost involved. Credit risk Credit risk is the risk that a counterparty to a financial instrument is unable to discharge a commitment to the Company made under that instrument. Credit risk in respect of investments in liquidity funds is minimised by, where possible, investing in AAA-rated funds. Investments in loan stocks comprise a fundamental part of the Company's venture capital investments and are managed within the main investment management procedures. Cash is mainly held by Bank of Scotland plc, which is an AA- rated financial institution part owned by the UK Government and, consequently the Directors consider that the risk profile associated with cash deposits is low.  There have been no changes in fair value that are directly attributable to changes in credit risk. Interest, dividends and other receivables are predominantly covered within the investment management procedures. There have been no changes in fair value that are directly attributable to changes in credit risk. Liquidity risk Liquidity risk is the risk that the Company encounters difficulties in meeting obligations associated with its financial liabilities. Liquidity risk may also arise from either the inability to sell financial instruments when required at their fair values or from the inability to generate cash inflows as required. As the Company only normally ever has a relatively low level of creditors and has no borrowings, the Board believes that the Company's exposure to liquidity risk is minimal. Announcement based on audited accounts The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 28 February 2010, but has been extracted from the statutory financial statements for the year ended 28 February 2010, which were approved by the Board of Directors on 30 June 2010 and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.  The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006. The statutory accounts for the year ended 28 February 2009 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under S237(2) or (3) of the Companies Act 1985. A copy of the full annual report and financial statements for the year ended 28 February 2010 will be printed and posted to shareholders shortly. Copies will also be available to the public at the registered office of the Company at 39 Earlham Street, London, WC2H 9LT and will be available for download from www.provenvcts.co.uk and www.downing.co.uk . [HUG#1428709] This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. All reproduction for further distribution is prohibited. Source: Proven Growth & Income VCT plc via Thomson Reuters ONE
UK 100

Latest directors dealings