Molten Ventures VCT plc

LEI: 2138003I9Q1QPDSQ9Z97

19 June 2025

Final Results for the year ended 31 March 2025

David Brock, Chairman, comments:

"Molten Ventures plc is actively funding innovation in deep‑tech, SaaS and enterprise technology with a diverse portfolio across AI, quantum computing, financial services and healthcare.  These pioneering companies position the VCT to benefit from the rising adoption of technology to drive business efficiency and growth. During the period Molten has also strengthened its investment process and oversight, appointing a new senior partner to lead the investment team and a new CEO to lead Molten Ventures as a whole. Strengthening the senior leadership team has contributed to a more resilient investment and exit process, which we expect to see deliver improved fund performance over time."

HIGHLIGHTS

·      Net Asset Value of £118.2 million (43p per share) at year-end; mid-market share price at 37.5p. NAV total return of -5.6%, after adding back dividends. 2.5p dividend paid (5.2% yield); on track to meet 5% target dividend for 25/26.

·      Portfolio remains resilient and appropriately valued in today's climate. Underperformers written down; core portfolio continues to perform to plan. Clear cash runways maintained across the portfolio.

·      Increased focus on exits, with the manager actively working to realise value.  Four successful exits delivered in 12 months, including Freetrade (April 2025), with £12.2 million proceeds and a 3.0x return on cost.

·      Investment focus remains on exceptional, disruptive high-tech businesses.  Strong pipeline of opportunities, with market correction presenting attractive lower entry points. Continued investment activity: £11.2 million deployed during the year, alongside EIS and PLC funds

·      £38.0 million of previously locked reserves released, enabling buybacks and dividends. 100% of 31 March 2025 buyback requests cleared.

·      £15.3 million (net) Prospectus Offer completed during the year; £6.6 million (net) raised post-period. Directors and Managers have invested over £1 million, continuing strong alignment.

·      Board succession planning ongoing with two new VCT Directors appointed bringing operational, deep tech and venture capital trust sector expertise.

OVERVIEW

Molten Ventures VCT is a £118.2 million, steadily growing, investment company that gives a distinctive opportunity to invest with the experienced, technology focused, venture capital team at Molten Ventures plc ("Molten" or "Group") in early stage companies that have exciting growth prospects whilst also giving investors tax relief, tax free dividends and tax free capital returns.

The Company benefits from Molten's exceptional experience in technology with an emphasis on enterprise technology, deeptech and hardware, digital health and consumer technology, all of which add to the portfolio's focus on UK growth and leading-edge expertise.

Through Molten's co-investment connections in future-focused sectors, and its engagement with investee companies, this VCT provides an enhanced opportunity for investors to make a serious contribution to the future of the UK's vital early stage economy thereby making a key contribution to the UK, whilst at the same time enjoying tax relief on the investment and tax free dividends, in particular as further significant reserves become available for distribution from April 2025. Those reserves will enable the Company to maintain buy-backs and target tax free dividends of 5% of net asset value per share.

FINANCIAL SUMMARY

CHAIRMAN'S STATEMENT

Introduction

Molten believes it has a unique edge in finding and selecting visionary, disruptive, high-growth technology companies and providing the funding, energy and monitoring skills to help them grow and to exit.

The past twelve months have been a period of strategic refocus. Following a change in CEO, Molten, owner of the investment manager, has strengthened its emphasis on process, performance, and portfolio discipline. This has included a renewed focus on realising exits, the appointment of a new senior investment partner, and deeper engagement with portfolio companies. These steps have contributed to a more stable, resilient portfolio and a clearer path to value creation.

At the year-end £73.8 million of the portfolio was invested largely in technology, £12.2 million in the legacy portfolio and £32.2 million of cash and cash equivalents reflected another successful fund-raising round.

Your VCT has some outstanding investee companies: Thought Machine, Focal Point Positioning, Riverlane, Satvu, and Form3 all enabling clients to realise significant benefits by embedding next-gen technology in payments, satellites, chemical processes, wearables and vehicles. More information on these can be found in the Manager's Report and Review of Investments below.

The VCT board has been active in oversight of process, marketing, meeting investors and promoting Shareholders' interests in future portfolio performance. Two new Directors have been appointed over the last 18 months.

Net asset value and results

As at 31 March 2025, the Company's Net Asset Value per share ("NAV") stood at 43.0p, a decrease of 5.6% after adding back dividends paid, which was predominantly incurred in the first half year of the year. Our valuation methodology takes careful note of commercial performance and is cautious; taking any write downs at an early stage. While recent performance has been disappointing, partly reflecting a correction from elevated private market valuations seen in prior years, the main portfolio remains strong and continues to make solid progress. We are confident that this momentum will support improved financial performance going forward.

A summary of the total return for Shareholders who invested in the Company's various other fundraisings is included on page 6 of the Annual Report.

The loss on ordinary activities after taxation for the year was £7.5 million (2024: £8.1 million), comprising a revenue gain of £0.4 million (2024: loss of £0.2 million) and a capital loss of £7.9 million (2024: £7.9 million).

Venture capital investments

Portfolio allocation

In line with the strategy that has been pursued in recent years, the Company's growth technology investments now form a substantial proportion of the investment portfolio. The split with the older legacy investments at the year-end is summarised as follows:

Portfolio activity

Further commentary on the portfolio, together with a schedule of additions, disposals and details of the ten largest investments can be found within the Investment Manager's Report and Review of Investments.

In the year the Company paid dividends of 2.5p per share equivalent to 5.2% of the starting year NAV, in line with the stated dividend policy and the Company intends to continue that dividend policy for current and future subscribing Shareholders.

A further dividend of 1.0p per share was paid on 25 April 2025. This is in line with the prior year's first payment.

The Board is proposing to pay a final dividend of 1.15p per share. This dividend will be paid, subject to Shareholder approval, on 30 September 2025 to Shareholders on the register at 22 August 2025. This will bring the total dividends paid in respect of the year to 2.15p per share, an equivalent yield of 5.0% on the 31 March 25 NAV.

Shareholders are reminded that the Company operates a Dividend Reinvestment Scheme ("DRIS"), which allows Shareholders to reinvest their dividends in new shares and obtain income tax relief on that new investment.

Fundraising

The Company received £15.3 million (net of costs) in the year in respect of the 2023 Offer for Subscription.

The Company launched a successful Offer for Subscription to raise £6.7 million in October 2024 which completed, fully subscribed, shortly after the year end.

On 4 April 2025, the Company allotted 15,252,988 Shares at an average price of 43.0p per Ordinary Share under the terms of the Offer for Subscription dated 11 October 2024.

On 16 April 2025, the Company allotted 278,213 Shares at an average price of 42.6p per Ordinary Share under the terms of the Offer for Subscription dated 11 October 2024.

The Company expects to launch another Offer for Subscription later this year.

Share Buybacks

The Company has a target policy of purchasing its own shares that become available in the market at a discount of approximately 5% to the latest published NAV, subject to regulatory and liquidity constraints. Resolution 13 on page 66 of the Annual Report will be proposed at the AGM, to renew the authority for the Company to purchase its own shares.

Over the past two years, the VCT has continued its buyback policy, albeit at a reduced level. This reduction, in place until 1 April 2025 was solely due to VCT regulations, which limit buybacks from reserves linked to capital raised in the preceding three to four years (depending on the share allotment date). During the year, the Company purchased a total of 1,047,051 shares at an average price of 45.1p per share.

The Board now has full flexibility to operate, and we are pleased to inform Shareholders that 100% of the outstanding shares offered, a total of 9,344,254 shares, were purchased post-period in April 2025 at an average price of 39.8p per share, representing the stated 5% discount to NAV. This purchase cleared the backlog at that date.

Buybacks are expected to be undertaken from time to time and any Shareholders who are considering selling their shares will need to use a stockbroker. Such Shareholders should ask their stockbroker to register their interest in selling their shares with Panmure Liberum.

Directorate

The Board is engaged in succession planning as several of the Board members have been on the Board for more than the nine- year guideline set by the Corporate Governance Code. As part of that Nicholas Lewis has retired from the Board on 31 March 2025, after 26 years. As well as his Non-Executive Director contribution Nicholas's firm Downing LLP provided company secretarial services to the VCT from inception until 26 February 2024. We would like to thank Nicholas for his invaluable contribution to the VCT. He leaves with our best wishes for the future.

On 1 April 2025, Nicholas was replaced by Steven Clarke. Steven brings over 30 years of experience in private equity and non-executive roles across the technology and business services sectors. Over the past eight years, Steven has held non- executive or investing chairman roles in eight businesses, three of which have achieved successful exits. He has worked with a range of institutional investors, including Motive Partners, BGF, Breakthrough Energy Ventures, M&G Catalyst, SBI, and Mercia. He was a non-executive director of Thames Ventures 2 VCT plc until February 2025. His experience includes advising on growth strategies, funding, and transaction planning, with a particular focus on companies scaling up into international markets.

This is the second step towards a phased succession of the Board and the process will continue.

Annual General Meeting ('AGM')

The AGM will take place at 20 Garrick Street, London WC2E 9BT on 17 September 2025 at 11:15 a.m.

Four items of special business are proposed at the AGM:

•  one in respect of the authority to buy back shares as noted above;

•  two and three in respect of the authority to allot shares; and

•  four to cancel the share premium account and capital redemption reserve.

The authority to allot shares provides the Board with the opportunity to issue shares for the next fundraising that is being planned without having to incur the expense of seeking separate approval via a Shareholder circular. Any further fundraising decisions will take account of the level of uninvested funds and the rate of investment.

Outlook

In the period following year-end, geopolitical developments, notably the introduction and subsequent pause of tariffs by the US government, have contributed to an increasingly uncertain global trading environment. Our preliminary assessment indicates that our portfolio, being technology and software focused, is less exposed to the direct impact of tariffs.

There are also signs that the trough in technology valuations may now be behind us. Interest rates are generally falling and M&A activity is on the increase, as proven by the exit of four VCT portfolio companies in the trailing twelve months. The Board believes that the portfolio contains many investments that should be able to take advantage of improving sentiment.

I look forward to updating Shareholders in the Half Yearly Report which will be published towards the end of the year.

David Brock

Chairman

18 June 2025

INVESTMENT MANAGER'S REPORT

Our focus has been on delivering an ongoing pipeline of realisations and growing the value of the portfolio through the active support of existing companies and on making new investments. In the period we have made six new investments, and three follow-on investments, alongside a flurry of profitable exits all of which are detailed below.

The valuation movements over the year showed a NAV Total Return decrease of 5.6% (after adding back dividends paid in the period), the majority of which was recognised in the first six months, with a steadying in the NAV achieved over the second half (-0.5%).

When valuing the portfolio we believe we have been cautious in taking upside valuations and prudent on write downs.

Portfolio

At the year end, Molten technology companies represented 62.5% of the portfolio and pre-Molten legacy companies 10.3%. The net asset valuation of £118.2 million was split 72.8% in investments, and 27.2% in cash and cash equivalents.

Within the portfolio our view is that, by value (NAV excluding cash), 70% of the portfolio is performing, or emerging as performing broadly as we might expect.

A further 12% are at an early stage of their commercial journey with reasonable prospects, and the balance require further help to get on to a viable growth path or exit.

Using management data for the calendar year ending 31 December 2024, 10 companies representing 36% of the portfolio NAV (excluding cash) has generated revenues or Annual Recurring Revenue ("ARR") above £5 million. Of these, 5 companies representing 13% of the portfolio NAV have revenues/ARR above £10 million and 3 companies representing 21% of the portfolio NAV have revenues above £20 million. We anticipate that the number of companies to achieve revenues above £5 million for 2025 will increase.

Of the remaining portfolio, 38% have generated revenues/ ARR between £1 million and £5 million. A further, 26% of the portfolio NAV is invested in deeptech companies, which are research and development heavy technologies that are early in commercial traction as they look to disrupt traditional industries.

Across the portfolio our companies continue to have strong cash runways, with almost 80% of the portfolio expected to be able to fund their business for the next 12 months or in the process of raising new money.

At this time, we consider that several portfolio companies have the potential to contribute positively to NAV. Below you will find a high-level overview of selected companies within the portfolio and the Manager's view on potential for value creation:

Well funded potential category winners

•  Thought Machine, Form3, Riverlane

These three companies represent £20.7 million, 17.4% of NAV and have a current combined Enterprise Value ("EV") of over $2 billion. We have well-founded expectations of target EVs that could represent increases over the current carrying values.

Near term potential uplifts (12-36 month horizon)

•  IMU, Modo, Anima

These three companies represent £7.4 million, 6.3 % of NAV and are all performing well and receiving significant inbound interest from third party investors to invest in future funding rounds at materially higher valuations than the current carrying values.

Emerging companies with exciting prospects

•  Satvu, Paragraf, AltruistIQ, BeZero Carbon, Focal Point Positioning

These five companies represent £19.7 million, 16.7% of NAV and are a mix of enterprise and deep tech companies. Focal Point Positioning is developing software that significantly enhances location accuracy, resilience. While pre-revenue, the company is building commercial traction with leading OEMs and chipset partners. The enterprise companies AltruistIQ and BeZero Carbon are both in emerging climate tech categories.

Value add

Since the deal sharing agreement with Molten we have invested over £80 million into a wide range of software and technology enabled businesses. All investments of value get close attention and have investor directors or observers on their boards. The Molten Partnership Team boasts extensive cross-sector expertise. Whether facilitating connections or sharing insights, they are dedicated to supporting growth and exits (see exit highlights below).

The Molten Platform Team handles investment transactions and post-investment portfolio engagement. Supported by legal, compliance, investor relations, finance, and ESG specialists, we work closely to support our portfolio with branding, regulatory compliance, public markets, governance, and implementing sustainability related strategies as they scale.

Valuation movements

Within the year 14 companies had positive valuation uplifts of £8.9 million and 22 companies had negative valuation movements of £11.9 million, albeit a fair amount of these were related to adverse foreign exchange valuation changes in the year.

Positive movements within the portfolio include Riverlane, Binalyze OÜ, BeZero Carbon, and Koru Kids. Riverlane is the largest uplift at £2.0 million as it closed a $75 million funding round which included participation by the UK's National Security Strategic Investment Fund (NSSIF), closely followed by BinalyzeOU (uplift of £1.9 million) a business in which Cisco also invested in 2023.

BeZero Carbon (uplift of £0.2million) improved on the back of increased sales growth, and Koru Kids (uplift of £1.5 million) is a new investment that was structured to enhance the VCT returns on exit at a low valuation.

A proportion of our larger companies have not been immune from the wider market shift towards prioritising profitability rather than growth with a consequential slowing in value growth. Downward movements in this category were recorded in Thought Machine (decline £3.1 million) and AIM listed Pulsar Group plc (LSE:PULS). Regrettably the valuation of Pulsar has declined £0.8 million over the period but your Manager remains confident that valuation recovery will be forthcoming in the future as the businesses delivers on its strategy to cut costs and return to profitability. Pulsar recently reported sales of over £60 million.

Detractors also include a subset that we have chosen not to fund again and have little prospect of return. These include Evonetix (decline £1.3 million), Macranet (decline £1.0 million) and a combined decline of £5.5 million in Primary Bid, AllPlants, Unbound and Morressier. Gardin has been written down but has attracted a new investor. While disappointing these write downs were mainly taken in the first half of the year.

Exit Highlights

Within the year we successfully exited three investments, and one investment post the period end.

The Molten portfolio team has instituted month by month tracking of each company's exit readiness, coupled with a proactive 'Stage 1' programme of relationship building with likely acquirers. This advance work - building brand awareness, brokering distribution partners and integrating product technology into proven category winners - means that when a formal sale process ('Stage 2') opens, buyers already understand the strategic value on offer.

FY25 provides evidence of the model in action. Cash proceeds of £11.0 million were generated during the financial year, the majority of which was from two realisations.

These realisations stand out not only for their scale but for the calibre of the acquirers: Nasdaq-listed Hologic (Endomag), Worldpay (Ravelin), and Freetrade (acquired by LSE-listed IG Group Holdings), the latter which completed shortly after the period end, delivering strong returns and further validating Molten's strategic approach.

These exits completed either at a premium or very close to the VCT carrying values. By demonstrating the accuracy of net asset values across holdings, the transactions reinforced confidence in the Group's valuation methodology-providing a clear reference point for Shareholders and prospective investors alike.

The highlight was portfolio company Endomagnetics Ltd ("Endomag"), the VCTs second highest valued portfolio asset, which announced an acquisition offer from NASDAQ listed Hologic Inc. The acquisition valued Endomag at approximately $310 million and to date proceeds of £8.4 million have been received with the prospect of further escrow payments to come. This represents a multiple of 3.9x cost.

The VCT first invested in Endomag in 2018 when revenues were £6 million and since then the company has grown its revenue fivefold. The acquisition demonstrates our ability to support innovative businesses as they scale and create value for our Shareholders through the cycle. Endomag's platform has been installed in over 1,350 hospitals in over 45 countries globally, and more than 500,000 women have received a better standard of breast cancer surgery with Endomag's technologies. The company received many accolades on its journey and more recently was awarded the King's Award for Enterprise.

Shareholders should feel pleased over the return and also that their investment has not only helped to change lives but has assisted an early stage UK healthtech company to breakthrough into global sales and a realisation to Hologic.

Other realisations were made in Ravelin, a 'card not present' fraud detection fintech business acquired by Worldpay, which yielded proceeds of £2.3 million and a multiple of 2.0 times cost, together with proceeds of £0.3 million from a small legacy investment returning 1.7 times cost, again with the prospect of future escrow proceeds.

Post the period end Freetrade, a consumer stock trading platform, was sold to IG Group Holdings PLC yielding proceeds of£1.1 million and a multiple of 1.9 times cost.

New investments

In the year total investments made were £11.2 million.

This compares with a total invested in the previous year of £16.4 million.

New and follow on investments alongside the Molten EIS and Molten Ventures plc funds were made during the year into the following qualifying companies:

Post year end activity

April has been a busy month. As mentioned in the exits paragraph above we were delighted to complete the realisation of Freetrade. In the month the VCT also paid its first dividend for the year at 1.0p per Share which is on track for the target 5% annual yield and purchased all the 'sellers' stock of £3.7 million through the 5% discount to NAV buyback mechanism.

VCT Association ("VCTA")

Your Investment Manager remains an active member of the VCTA which represents 14 of the largest VCT fund managers and makes up over 90% of the £6.6 billion VCT industry. The VCTA worked tirelessly to lobby Government for an extension of the Sunset Clause on the VCT scheme which has been extended to 2035. Your involvement as a Shareholder in the VCT is helping to grow UK SME businesses and contribute to the UK economy.

Outlook

In summary the portfolio remains well diversified among the four technology investment sectors with companies at different stages of maturity. We've maintained a strong level of activity this year, with significant realisations that have provided capital to pay dividends and maintain the buyback scheme.

As highlighted in the Chairman's Statement, recent macro events serve as a reminder of how quickly market dynamics can change. While these events have added short-term volatility, particularly in the public markets, our portfolio remains focused on capturing long-term opportunities driven by disrupting global industries.

The VCTs strong cash position and experienced team ensure we remain resilient in a changeable investment environment. We remain focused on what we can control and continue to invest with discipline, finding opportunities in changing environments, backing businesses that are building for the long term and creating value for our Shareholders. We remain cautiously optimistic for the year ahead.

Elderstreet Investments Limited

Part of the Molten Ventures Group

18 June 2025

REVIEW OF INVESTMENTS

Portfolio of investments

The following investments were held at 31 March 2025. All companies are registered in England and Wales, with the exception of Fulcrum Utility Services Limited, which is registered in the Cayman Islands.

^*These companies have also received investment from other funds managed by the Molten Ventures Group (Molten Ventures Plc and Molten Ventures EIS) as at 31 March 2025.

** Quoted on AIM

*** Fully diluted interest categorised as follows: Cat A: 0.0-5.0%, Cat B: 5.1-10.0%, Cat C: 10.1-15.0%, Cat D: 15.1-25.0%, Cat E: 25.0%-49.9%, F >50%.

All venture capital investments are unquoted unless otherwise stated.

Investment movements for the year ended 31 March 2025

Additions                                                                                       Cost

Disposals

These investments were revalued over time and until sold with any unrealised losses included in the fair value of the investments.

*These companies have also received investment from other funds managed by the Molten Ventures Group (Molten Ventures plc and Molten Ventures EIS) as at 31 March 2025.

DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Report of the Directors, the Strategic Report, 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 Conduct 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), including Financial Reporting Standard 102, the financial reporting standard applicable in the UK and Republic of Ireland (FRS 102).

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 applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

·    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

·    prepare a directors' report, a strategic 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.

Each of the Directors considers that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position, performance, business model and strategy.

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

INCOME STATEMENT for the year ended 31 March 2025

All Revenue and Capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the year.

The total column within the Income Statement represents the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS 102"). The supplementary revenue and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in July 2022 by the Association of Investment Companies ("SORP").

There has been no other comprehensive income in the period.

BALANCE SHEET at 31 March 2025

STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2025

* A transfer of £2.7 million (2024: £4.1 million), representing impairment losses during the year, as well as cumulative unrealised gains on investments which were disposed of during the year has been made from the Capital reserve - unrealised to the Capital Reserve - realised. A transfer of £5.0 million (2024: £2.4 million), representing realised losses on investment disposals plus capital expenses in the year, has been made from Capital Reserve - realised to the Special reserve.

Included within these reserves is an amount of (£7,340,000) (2024: (£6,823,000) which is considered distributable to Shareholders under Companies Act rules. The Income Taxes Act 2007 restricts distribution of capital from reserves created by the conversion of the share premium account into a special distributable reserve until the third anniversary of the share allotment that led to the creation of that part of the share premium account. As at 31 March 2025, £6,745,000 of the special reserve is distributable under this restriction.

STATEMENT OF CASH FLOWS for the year ended 31 March 2025

NOTES

1.      Accounting policies

General information

Molten Ventures VCT plc ("the Company") is a venture capital trust established under the legislation introduced in the Finance Act 1995 and is domiciled in the United Kingdom and incorporated in England and Wales.  The Company is a premium listed entity on the London Stock Exchange.

Basis of accounting

The Company has prepared its financial statements in accordance with the Financial Reporting Standard 102 ("FRS 102") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued in July 2022 ("SORP") and with the Companies Act 2006.

Going concern

After reviewing the Company's forecasts and projections, the Directors have a reasonable expectation that the major cash outflows of the Company (most notably investments, share buybacks and dividends) are within the Company's control and therefore the Company has sufficient cash to meet its expenses and liabilities when they fall due. The impact of ongoing conflicts, political changes and the cost of living have been considered, more detail on these considerations can be found within the Corporate Governance report. As such, the Board confirms that the Company has adequate resources to continues in operational existence for at least 12 months from the date of approval of the financial statements. The Company therefore continues to adopt the going concern basis in preparing its financial statements as noted further within the Corporate Governance report on page 40 of the Annual Report.

Presentation of Income Statement

In order to better reflect the activities of a Venture Capital Trust, and in accordance with the SORP, 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.

Investments

Investments are designated as "fair value through profit or loss" assets, upon acquisition, 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.

Listed fixed income investments and investments quoted on AIM and the Main Market are measured using bid prices in accordance with the International Private Equity and Venture Capital Valuation Guidelines ("IPEV").

For unquoted instruments, fair value is established using the IPEV. The valuation methodologies for unquoted entities used by the IPEV to ascertain the fair value of an investment are as follows:

·    Multiples;

·    Industry valuation benchmarks;

·    Discounted cash flows or earnings (of underlying business);

·    Discounted cash flows (from the investment);

·    Net assets; and

·    Calibrating to the price of a recent investment.

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 as explained in the investment accounting policy above and addressed further in note 9 of the Annual Report.

Where an investee company has gone into receivership, liquidation, or administration (where there is little likelihood of recovery), the loss on the investment, although not physically disposed of, is treated as being realised. Permanent impairments in the value of investments are deemed to be realised losses and held within the Capital Reserve - Realised.

Gains and losses arising from changes in fair value are included in the Income Statement for the period as a capital item and transaction costs on acquisition or disposal of the investment expensed.

It is not the Company's policy to exercise significant influence over investee companies. Therefore, the results of these companies are not incorporated in the Income Statement, except to the extent of any income accrued. This is in accordance with the SORP and FRS 102 sections 14 and 15 that do not require portfolio investments to be accounted for using the equity method of accounting.

Calibration to price of recent investment requires a level of judgment to be applied in assessing and reviewing any additional information available since the last investment date.  The Board and Investment Manager consider a range of factors in order to determine if there is any indication of decline in value or evidence of increase in value since the recent investment date.  If no such indications are noted the price of the recent investment will be used as the fair value for the investment.

Examples of signals which could indicate a movement in value are: -

Changes in results against budget or in expectations of achievement of technical milestones patents/testing/ regulatory approvals.

Significant changes in the market of the products or in the economic environment in which it operates.

Significant changes in the performance of comparable companies.

Internal matters such as fraud, litigation or management structure.

In respect of disclosures required by the SORP for the 10 largest investments held by the Company, the most recent publicly available accounts information, either as filed at Companies House, or announced to the London Stock Exchange, is disclosed. In the case of unlisted investments, this may be abbreviated information only.

Judgement in applying accounting policies and key sources of estimation uncertainty

The key estimates in the financial statements is the determination of the fair value of the unquoted investments by the Directors as it impacts the valuation of the unquoted investments at the year end date.

Of the Company's assets measured at fair value, it is possible to determine their fair values within a reasonable range of estimates. The fair value of an investment upon acquisition is deemed to be cost. Thereafter, investments are measured at fair value in accordance with FRS 102 sections 11 and 12, together with the IPEV.

A price sensitivity analysis of the unquoted investments is provided in note 15 of the Annual Report, under Investment price risk.

Income

Dividend income from investments is recognised when the Shareholders' rights to receive payment have been established, normally the ex-dividend date.

Interest income is accrued on a timely basis, by reference to the principal outstanding and at the effective interest rate applicable and only where there is reasonable certainty of collection. Where previously accrued income is considered irrecoverable a corresponding bad debt expense is recognised.

Expenses

All expenses are accounted for on an 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 as a capital item.

·    Expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment.

·    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. The Company has adopted the policy of allocating investment manager's fees, 75% to capital and 25% to revenue as permitted by the SORP. The allocation is in line with the Board's expectation of long term returns from the Company's investments in the form of capital gains and income respectively.

·    Performance incentive fees arising, if any, are treated as a capital item.

Taxation

The tax effects on 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 arise.

Deferred taxation is not discounted and 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 accounts.

A deferred tax asset is only recognised to the extent that it is probable there will be taxable profits in the future against which the asset can be offset.

Other debtors and other creditors

Other debtors (including accrued income) and other creditors are included within the accounts at amortised cost.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with an original maturity of three months or less. This includes £14.7 million in the JP Morgan GBP Liquidity NAV Fund and £15.2 million in the Blackrock ICS Sterling Liquidity Fund.

Dividends

Dividends payable are recognised as distributions in the financial statements when the Company's liability to make payment has been established, typically when approved by Shareholders at the AGM or, for interim dividends, the payment date.

Issue costs

Issue costs in relation to the shares issued are deducted from the special reserve.

Reportable segments

The Company has one reportable segment as the sole activity of the Company is to operate as a VCT and all of the Company's resources are allocated to this activity.

2.      Basic and diluted return per share

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.

3.      Basic and diluted net asset value per share

As the Company has not issued any convertible securities or share options, there is no dilutive effect on net asset value per share. The net asset value per share disclosed therefore represents both basic and diluted net asset value per share.

4.      Principal Risks

The Company's investment activities expose the Company to a number of risks associated with financial instruments and the sectors in which the Company invests. The principal financial risks arising from the Company's operations are:

·    Market risks;

·    Credit risk; and

·    Liquidity risk.

The Board regularly reviews these risks and the policies in place for managing them. There have been no significant changes to the nature of the risks that the Company is exposed to over the year and there have also been no significant changes to the policies for managing those risks during the year.

The risk management policies used by the Company in respect of the principal financial risks and a review of the financial instruments held at the year-end are provided below.

Market risks

As a VCT, the Company is exposed to investment risks in the form of potential losses that may arise on the investments it holds in accordance with its Investment Policy. The management of these investment risks is a fundamental part of investment activities undertaken by the Investment Manager and overseen by the Board. The Manager monitors investments through regular contact with management of investee companies, regular review of management accounts and other financial information and attendance at investee company board meetings. This enables the Manager to manage the investment risk in respect of individual investments. Investment risk is also mitigated by holding a diversified portfolio spread across various business sectors and asset classes.

The key investment risks to which the Company is exposed are:

·    Investment price risk through the uncertain economic environment; and

·    Interest rate 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.

Investment price risk

Investment price risk arises from uncertainty about the future prices and valuations of financial instruments held in accordance with the Company's investment objectives. It represents the potential loss that the Company might suffer through investment price movements in respect of quoted investments, and changes in the fair value of unquoted investments that it holds.

Interest rate risk

The Company accepts exposure to interest rate risk on floating-rate financial assets through the effect of changes in prevailing interest rates. The Company receives interest on its cash deposits at a rate agreed with its bankers and on liquidity funds at rates based on the underlying investments. Investments in loan notes and fixed interest investments attract interest predominately at fixed rates. A summary of the interest rate profile of the Company's investments is shown below.

Interest rate risk profile of financial assets and financial liabilities

There are three levels of interest which are attributable to the financial instruments as follows:

· "Fixed rate" assets represent investments with predetermined yield targets and comprise fixed interest and loan note investments.

· "Floating rate" assets predominantly bear interest at rates linked to Bank of England base rate and comprise cash at bank and money market funds.

· "No interest rate" assets do not attract interest and comprise equity investments, loans and receivables (excluding cash at bank) and other financial liabilities.

The Company monitors the level of income received from fixed, floating and non-interest rate assets and, if appropriate, may make adjustments to the allocation between the categories, in particular, should this be required to ensure compliance with the VCT regulations.

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. The Company is exposed to credit risk through its holdings of loan notes in investee companies, investments in fixed income securities, cash deposits and debtors.

The Manager manages credit risk in respect of loan notes with a similar approach as described under interest rate risk above. In addition, the credit risk is partially mitigated by registering floating charges over the assets of certain investee companies. The strength of this security in each case is dependent on the nature of the investee company's business and its identifiable assets. The level of security is a key means of managing credit risk. Similarly, the management of credit risk associated interest, dividends and other receivables is covered within the investment management procedures.

Cash of £2.3 million is held at Bank of Scotland plc, which is an A-rated financial institution. In addition, the Company holds £29.9 million in money market funds. Consequently, the Directors consider that the risk profile associated with cash deposits is low.

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. The Company normally has a relatively low level of creditors (31 March 2025: £168,000, 31 March 2024: £182,000) and has no borrowings. The Company always holds sufficient levels of funds as cash and readily realisable investments in order to meet expenses and other cash outflows as they arise. For these reasons, the Board believes that the Company's exposure to liquidity risk is minimal.

The Company's liquidity risk is managed by the Investment Manager, in line with guidance agreed with the Board and is reviewed by the Board at regular intervals.

5.      Transactions with related parties and Investment Manager

Richard Marsh is an employee of Molten Ventures plc, the parent company of Elderstreet Investments Limited. Elderstreet Investments Limited provided investment management services to the Company. During the year, £2.5 million (2024: £2.5 million) was due in respect of these services. No performance incentive fees were paid to Elderstreet Investments Limited in respect of the year under review (2024: £nil). As at 31 March 2025, £nil (2024: £27,000) was outstanding and payable.

6.      Events after the end of the reporting period

On 1 April 2025, the Company received proceeds of £1,142,000 from the sale of Freetrade Limited to IG Group Holdings plc, an online trading provider.

On 4 April 2025, the Company allotted 15,292,988 Ordinary Shares of 5p each at an average price of 43.0p per Ordinary Share under the terms of the Offer for Subscription dated 11 October 2024.

On 16 April 2025, the Company allotted 278,213 Ordinary Shares of 5p each at an average price of 42.6p per Ordinary Share under the terms of the Offer for Subscription dated 11 October 2024.

The Company also allotted 438,011 Ordinary Shares of 5p each in respect of Shareholders who agreed to subscribe for shares under the terms of the Company's Dividend Reinvestment Scheme ("DRIS") in respect of the dividend of 1p per Ordinary Share paid on 25 April 2025. The shares were issued at 41.7p per share (being the latest published unaudited adjusted net asset value).

On 29 April 2025, the Company bought back 9,344,254 of its own Ordinary Shares at a price 39.8p per share. These shares were subsequently cancelled.

The issued share capital and total voting rights of the Company is now 281,790,917 Ordinary Shares

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 31 March 2025 but has been extracted from the statutory financial statements for the year ended 31 March 2025 which were approved by the Board of Directors on 18 June 2025 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s498(2) and (3) of the Companies Act 2006.

The statutory accounts for the year ended 31 March 2024 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 s498(2) and (3) of the Companies Act 2006.

A copy of the full annual report and financial statements for the year ended 31 March 2025 will be printed and posted/emailed to shareholders shortly. Copies will also be available to the public at the registered office of the Company at The Office Suite, Den House, Den Promenade, Teignmouth TQ14 8SY and will be available for download from https://investors.moltenventures.com/investor-relations/vct.